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Business Credit During Tough Economic Times

October 20, 2009 By Marco Carbajo

worriedIn the past during good economic times you may have become accustom to using personal credit cards to finance purchases, equipment, and even payments to suppliers or vendors when starting and operating your business.

 

Unfortunately times have changed for business credit for small business and what has become a shocking reality to many are the ramifications of what the co mingling of personal credit files for business financing has resulted in.

 

Many small business owners who have followed the traditional route of personally guaranteeing each and every credit card, credit line, or loan for business have come to realize that they have put their personal assets and family at risk! 

 
The single greatest challenge during these tough economic times facing small business in America is adapting to change. Less than ten percent of business owners in America know how to truly separate their personal credit from business credit let alone understand how to set up a business credit profile an establish a good rating.

 
So what is business credit?

 

It’s the ability to obtain financing under the name of your business entity without using your personal credit or personal guarantee. Business credit should be separate and based on the corporation’s credit worthiness not yours! Recently Entrepreneur Magazine was quoted as saying “You should differentiate your personal credit from your business credit.”

 

If you own a separate legal entity for your business than you have a unique opportunity that no other individual or sole proprietor has. It’s the ability to establish a business credit profile that is completely separate from a personal credit profile.

 

If you think you’re business is just making it fine despite the current economic times and you don’t need the credit think again! The reality is that your business will at one point require an influx of cash in order to cover unforeseen operating expenses, development, expansion, legal fees, inventory or a range of other items that a business may require in order to grow.

 

One of the key advantages of having business credit is instead of putting your personal credit and assets at risk every time your company requires financing you would now be in a position to secure the financing you need with your businesses’ credit. Some other benefits you can expect include:
 
…any debt you accumulate for the business would only report to your business credit file not your personal credit file.

…eliminating the co-mingling of funds–and this includes the “co-mingling” of credit profiles so you won’t jeopardize the protection of the corporate veil.

…protecting you and your family from personal liability when you get approved solely on your businesses’ credit file.

…improving your personal debt to credit limit ratios by transferring the balances of business debt used with your personal credit to your business credit.
 
…increase your businesses’ ability to obtain cash credit 10 to 100 times greater than you can obtain personally.

…SAVING MONEY! For example, an individual might pay up to 13% interest on a $100,000 line of credit whereas a business could qualify for an interest rate of 7%. That would save you almost $40,000 in interest alone.

 

After the recent economic downturn small business owners like you are facing a new era when it comes to business financing. Banks, lenders, suppliers, leasing companies and others are making adjustments, adopting new rules, and facing new regulations in the lending arena.

 

Now more than ever you need to be pro active and establish a new level of financial preparation which includes establishing a strong business credit profile, a favorable business credit rating, and a solid bank rating. I encourage you to start building your business credit today and enjoy the benefits and peace of mind that comes with it!

 

To Your Success!

 

Marco Carbajo

About the Author

Marco Picture 2009 Super Small picMarco Carbajo is a business credit specialist, author, speaker, and founder of http://www.startbusinesscredit.com . Want to learn more about how to build business credit and obtain unlimited financing for your business? Claim Marco’s popular FREE business credit seminar ($597 Value), available by simply submitting your email below =>

Filed Under: Business Credit Tagged With: build business credit, building business credit, business credit, business credit help, start business credit

How To Build Business Credit With Bad Personal Credit

September 1, 2009 By Marco Carbajo

Credit ReportAfter presenting to REIA of Macomb last week it was clear to me that building business credit was a HOT topic for real estate investors. It was interesting to find that small business owners and real estate investors have similiar questions when it comes to business credit.

 

As a result of the economic downturn many find themselves being faced with less than perfect credit.  While credit repair companies are springing up all over the country there are few like United Credit that can truly deliver.

 

But in the meantime can you start building business credit with bad personal credit?

 

Absolutely!

 

There are vendors, suppliers, leasing companies, and even cash credit issuers that will extend credit to your business solely based on your businesses credit rating.  In order for you to obtain cash credit without a personal guarantee first requires you to start establishing strong business credit with vendors & suppliers.

 

The key is identifying which vendors & suppliers offer the following:

  • Credit with no personal credit checks
  • Credit with no personal guarantee
  • Credit for start ups (great for new entities)
  • Monthly payment reporting to business credit bureaus

 

If this part leaves you scratching your head don’t worry we have all this work already done for you if you’re interested. As long as you understand the fact that cash credit without a personal guarantee can only happen once you have established a strong business credit profile.

 

Here’s a quick comparison on personal credit vs. business credit.

Business Credit Comparison.png.jpg

As you can see there are HUGE differences and the one in particular that should get you really excited is the unlimited amount of business credit files you can establish! 

 

For a complete list of our preferred business credit sources join my business credit community today!

 

Remember – Abundance is not something we acquire. It is something we tune into. ~ Wayne Dyer

 

To Your Success!

Marco Carbajo

About the Author

sp_image-435950341-1242740704.pjpeg

Marco Carbajo is a business credit specialist, author, speaker, and founder of http://www.startbusinesscredit.com . Want to learn more about how to build business credit and obtain unlimited financing for your business? Claim Marco’s popular FREE business credit seminar ($597 Value), available by simply submitting your email below =>

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Submit Your Email and Receive ‘8 Steps to Building Ultimate Business Credit’ audio FREE ($597 Value)


Filed Under: Business Credit Tagged With: build business credit, build corporate credit, building business credit, business credit, business credit building, business credit help, business credit strategy, business credit without a personal guarantee, how to business credit, start business credit

Top 4 Reasons Not to Use Personal Credit for Business

August 13, 2009 By Marco Carbajo

Business Credit Card picStatistics show that over 65% off all small businesses use credit cards on a regular basis; but the problem is less than half of those credit cards are actually in the business name. The others continue to use the owner’s personal credit cards for business transactions.

Using your personal credit, also known as you’re “Consumer Credit Profile,” instead of establishing Business Credit is a bad idea on many fronts.

 

Here are my ‘Top 4 Reasons Why You Should Not Use Personal Credit for Business.’

 

Reason 1

It impacts your personal debt to credit limit ratios, credit scores, and personal finance capacity for you and your family.

 

This reason alone has caused severe personal credit damage and liability to small business owners across the country who have lost their businesses due to the recession and have used personal credit and personal guarantees for all their business financing. Just ask Kirk Brown, owner of Buck’s Shoes in Fremont, who knows firsthand what using personal credit for business can do.

 

When you properly separate your personal credit from business credit the debt you accumulate for your business should only report to your business credit file not your personal credit file. More importantly you protect you and your family from personal liability when you get approved solely on your businesses’ credit file.

 
Reason 2

When you use your personal credit for the benefit or operation of the company it can lead to an “alter-ego” decision by regulatory or a financial organization, and a piercing of the corporate veil.

 

This would directly endanger the owner’s personal assets and make the owner or owners directly liable for the penalties or repayment of any debts incurred by the business or corporation.

 

It’s always a good idea to build business credit rather than abandon it through the co-mingling of funds–and this includes the “co-mingling” of credit profiles.

 

Many entrepreneurs believe that a corporation protects them because corporations are viewed as separate legal entities but you can jeopardize that protection when you use personal credit for the benefit or operation of your corporation!

 

Reason 3

Another disadvantage of using your personal credit in place of proper business credit is the fact that the use of personal credit for the operation of a company can make your company appear improperly funded or operated, or may incorrectly establish that your business credit is unstable, unreliable, or overextended.

 

Reason 4

Last but not least what might be perfectly normal and acceptable for a business credit profile, such as submitting multiple applications for business credit, can have a serious negative impact on personal credit because of what’s called excessive inquiries.

 

Solution:

Start building business credit for your corporation separate from your personal credit and improve your company’s image, protect you and your family’s assets, credit capacity, and personal liability.

 

Remember – To be prepared is half the victory. ~ Miguel De Cervantes

 

To Your Success!

 Marco Carbajo

About the Author

 sp_image-435950341-1242740704.pjpeg

Marco Carbajo is a business credit specialist, author, speaker, and founder of the National Entrepreneur Club.  Click here to visit his blog and signup free to get strategies, resources, and response-boosting tips with blog updates, news, and more! To start building business credit join his business credit community today and Click Here.

Filed Under: Business Credit Tagged With: build business credit, build corporate credit, building corporate credit, business credit, business credit card, business credit help, business credit strategy, business finance, business finance articles, businesscreditnopersonalguarantee, businesscreditvspersonalcredit, corporate banks, corporate credit, corporate credit program, corporate visa, establish corporate credit, financecorporate, general business credit, get corporate credit, home finance business, homefinancebusiness, how to business credit, instant business credit, obtain business credit, personalcredit, start business credit

Business Structures to Avoid for Building Business Credit

July 21, 2009 By Marco Carbajo

Business EntityI get asked this question quite often and thought I would clear the air on what business entity selection is best for building business credit.  This step by far is the most important because it’s the foundation of your business credit.  Not to mention all the other important areas that entity selection affects such as taxes, liability, asset protection and so on.

 

As a business owner, you have four real choices when it comes to business structures for building business credit, and two bad choices:

 

    * C Corporation

    * S Corporation

    * Limited Liability Company

    * Limited Partnership

    * Sole Proprietorship

    * General Partnership

 

You can learn more about your four good choices by listening to my FREE Business Corporations Seminar.

 

CLICK HERE to listen

 

To learn why Sole Proprietorships and General Partnerships are so dangerous to you and your family, read on.

 

A Sole Proprietorship is bad…

 

Have you heard the saying “You get what you pay for?” Well, you normally don’t pay anything to start either a Sole Proprietorship or a General Partnership. Of course you don’t get anything, either. Unless you count the following as valuable business assets:

 

    * Lots of personal liability

    * No protection from your business creditors

    * An increased risk of being audited

    * Problems with valuation for a subsequent sale of the business

 

The reason for this lack of protection is because neither of these structures is considered a separate legal structure. Instead, they are considered personal extensions of you, if you are operating as a Sole Proprietorship, or you and your partners, if you’re operating as a General Partnership.

 

And, because these business types are considered personal extensions of you, you don’t have any protection from them.

 

But a General Partnership is Downright Ugly!

 

It gets even worse if you are operating with a partner as a General Partnership. That’s because not only are you responsible for all debts and agreements you enter into in the name of your business, you’re also on the hook for all of your partner’s actions in the name of your business as well. This can be devastating if your partner is financially irresponsible, and, because either of you can bind the partnership; you have zero protection from your partner.

 

If You Don’t Choose a Good Entity, the Government Will Choose a Bad One for You!

 

If you’ve been doing business up to now without a business structure, both the IRS and your state government have defaulted your business into either a Sole Proprietorship or a General Partnership.

 

And that means you’re exposed.

 

Use a Proper Business Structure – If you want to build business credit and you want to protect yourself from personal liabilities.

 

CLICK HERE to join my business credit community today and discover what cash credit and financing opportunites you can obtain for your business entity. 

 

Remember – There is one thing stronger than all the armies in the world and that’s an idea whose time has come ~ Victor Hugo

 

 

To Your Success!

Marco Carbajo

About the Author

sp_image-435950341-1242740704.pjpegMarco Carbajo is a business credit specialist, author, speaker, and founder of the National Entrepreneur Club.  Click here to visit his blog and signup free to get strategies, resources, and credit building tips with blog updates, news, and more! To start building business credit join his business credit community today and Click Here.

Filed Under: Business Credit Tagged With: build business credit, building business credit, business credit, business credit blog, business credit blogger, business credit builder, business credit building, business credit coach, business credit help, business credit information, business credit service, getting business credit, how to build business credit, marco carbajo

Business Credit Help that Can Make or Break You

July 12, 2009 By Marco Carbajo

Business Credit Help

 

One of the mistakes that I see business owners make when attempting to build business credit is not paying attention to details. I want to provide you a business credit tip that can help improve your chances of getting approved for loans, credit cards, and  lines of credit for your business.

One small detail like choosing an SIC code in a high risk classification can mean your business being flagged as a high risk with the business credit bureaus. As a result every lender, creditor, or company that pulls your business credit report will see that you’re business is in a high risk classification.

As a result many lenders will automatically decline your application! In addition, Dun & Bradstreet will minimize the credit limit recommendation for your company on your DNB file which lenders take a close look at prior to extending credit to your business.

This short video will give you these high risk categories to stay away from so you can prevent your business from being placed in a high risk classification. If you haven’t selected an SIC code or NAICS code for your entity you will need to prior to setting up your Dun & Bradstreet file.

Don’t let a simple detail like this hurt your chances for obtaining the cash credit and financing your business needs and deserves.

Every business will at one point require an influx of cash in order to cover operating expenses, expansion costs, legal fees, inventory or a range of other items it may require in order to operate. 

Another major benefit for building business credit is you’re ability to have access to capital which provides the leverage you need to purchase additional income producing assets like other businesses, real estate, equipment and so on.

The worst mistake you can make is seeking funding when your business needs it most. Lenders extend cash credit lines to businesses that are not in high risk industries, don’t need the capital and have strong business credit ratings. Start digging your well before your business gets thirsty!

Ready to start building your business credit? Become a member of my Business Credit Insiders Circle and gain access to 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. Submit your name and email below for details and receive a free audio seminar ($597 value) => 

About the Author

Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. A business credit builder system helping business owners establish business credit with no personal guarantee. 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. 

Filed Under: Business Credit Tagged With: build business credit, build corporate credit, business credit, business credit blog, business credit blogger, business credit community, business credit help, business credit information, business credit strategy, corporate credit, corporate credit help, corporate credit information, marco carbajo, small business finance, small business financing, start business credit

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