Building Business Credit
If you hope to qualify for financing for your business without having to use your personal credit then building a solid company foundation with positive business credit history is mandatory.
Here is a brief overview of the steps you will take to move you through the process and get your company on the path to obtaining the funding it needs based on its own creditworthiness.
If you think purchasing shelf corporations will open up the credit floodgates for your company think again! These aged corporations provide the perception of years in business which is important in the eyes of lenders and customers. But there is a lot more to building corporate credit then age alone but if you do decide to purchase one make sure it’s reasonably priced and at least two years old with no liabilities attached.
Dun & Bradstreet
Once you have a corporation set up and completed all the necessary corporate conformity guidelines including but not limited to 411 listings, verifications and licenses you will be ready to register with Dun & Bradstreet.
Establish Business Credit
Once your registered you will need to establish business credit by first applying for vendor credit accounts with companies that report on a monthly basis. Once you get approved and start making purchases make sure to pay your invoices on time and monitor your files.
To get listed with Corporate Experian and Equifax Small Business you will need to establish accounts with companies that report to these specific bureaus.
Business Credit Cards
One of the ways you can start establishing business credit is through a secured card. This helps prevent your company from incurring any revolving debt so it’s a good place to start but as you continue building corporate credit you may soon qualify for no personal guarantee business credit cards.
If you must apply for business credit cards that requires your personal guarantee be sure that it reports your payment history to your business credit files and not your personal credit reports.
Small Business Loans
Obtaining small business loans can be difficult but it’s not impossible. It really depends on the level of bank credit that you have established. I would first focus on securing a business line of credit for your company so you can have the funds readily available when needed. This is much more convenient then having to apply for a loan every time your business needs the funds.
Business Credit Information
Finally you should stay plugged in and up to date with the latest news, resources and business credit information so your company can continue to expand its funding capabilities as well as leverage its diversity of credit.
Building business credit is not something you should spend your precious time or resources trying to figure out. It’s simply smart business to utilize a system that can take you through the process. With the right plan and execution of that plan you can expect your company to qualify for business financing without having to put your personal credit and personal assets at risk.
Looking to access a proven step by step business credit building system? A system that provides you access to premium vendors, business credit cards, funding sources and lenders that report to all the major business credit bureaus? Become a member of my Business Credit Insiders Circle. Submit your name and email below for details and receive a free audio seminar ($597 value) =>
Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. A business credit builder membership helping business owners build business credit. He is a weekly columnist for Dun & Bradstreet Small Business Solutions, a business credit blogger for All Business & American Express Small Business and author of “Eight Steps to Ultimate Business Credit” and “How to Build Business Credit with No Personal Guarantee.” His articles and blogs have also been featured in Business Week, The Washington Post, The San Francisco Tribune, Scotsman Guide, Alltop, Entrepreneur Connect, and Active Rain.