As we approach 2022, it’s worth reflecting on the highs and lows of 2021 so we can begin making plans to start the New Year with our best foot forward. It’s been a long year, so to make the planning process a little easier we’ve put together a list of financial resolutions to consider for 2022.

Resolution 1: Review business targets and budgets

Start by reviewing your business strategy alongside your financial targets and budgets. Doing this will help you identify opportunities for driving growth and potential problems.

Resolution 2: Manage your debt

Believe it or not, debt can be a great way to introduce more working capital into your business and improve your cash flow – providing its managed wisely.

It’s not uncommon for business owners to have some form of debt, whether it’s from business credit cards, revolving credit facilities, secured or unsecured business loans, asset finance, or merchant cash advances.

Review any debt you have, the interest rates you’re currently paying, and how much you owe. Having this information will be helpful for exploring refinancing options. Debt refinance can lower your repayment costs, leaving you with more cash in hand.

Resolution 3: Improve your business’ credit rating

When applying for business finance, having a good credit score can improve your eligibility across a range of products and increase your chances of success.

Credit scores can also impact the amount of interest you pay or even decrease the total cost of the finance you’re eligible for. If you have a bad credit score, don’t worry, there are a few things you can do to improve it:

• Find out where you stand with your credit rating. Start by getting a credit report from a credit reporting company (CRA) such as Experian, CreditSafe, or Equifax. The credit reporting company (CRA) will conduct a ‘soft check’ so it won’t affect your credit score.

• Be sure to fulfil your financial obligations on time – missing or making late payments can harm your credit rating.

• Establishing credit by taking out a business credit card or a business loan can help you establish a credit history, demonstrating to CRAs that you can responsibly use credit. Of course, it’s essential to borrow within your means and meet your repayment obligations every month by paying in full and on time.

• Filing your business accounts promptly with Companies House can also be a way of boosting your credit rating. Always aim to get your accounts in earlier than the deadline to be on the safe side and avoid possible late penalty fees.

• Credit utilisation is one of the things CRAs factor in when determining your business credit score. For example, if you have a business credit card with a £5,000 monthly limit and usually use around £1,000 per month; your credit utilisation ratio is 20%. You should aim to keep your credit utilisation to a minimum.

If your credit score is low, you might still be able to get business finance.

More and more lenders provide finance options for businesses with bad credit; it’ll also depend on your particular circumstances and willingness to use different security forms such as a personal guarantee, property or asset.