Get Small Business Credit: 10 Factors Impacting Your Ability

November 6, 2015 By Marco Carbajo

Get Small Business Credit

Do you know what type of credit and funding your company may qualify for today?

I’m sure we can agree that there’s nothing more frustrating for a small business owner than not having access to the funds needed to grow a business.

Unfortunately, the most common mistake business owners make is applying for credit without knowing which factors play a role for each type of funding option.

Here are the top ten elements that impact the most popular forms of credit and financing for businesses today.

1) Personal FICO® Scores – It’s remarkable how strong FICO® scores (720+) streamline the credit granting process. The fact is with strong FICO® Scores you have more funding options available. For example, unsecured business credit lines, business loans & SBA loans all factor in personal credit scores as part of their underwriting requirements. Now if you have low scores you can always utilize a business credit partner to secure the funding you need.
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Business Credit Video: Business Credit vs Personal Credit

June 12, 2013 By Marco Carbajo

Business Credit Video

Did you know business credit has 10 to 100 time’s greater credit capacity compared to personal credit? business credit vs personal credit

As a business owner you have the opportunity to leverage the power of credit like never before.

What’s even more exciting is if you own more than one business each of your companies has the ability to establish its own creditworthiness.
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How to Balance Personal and Business Credit

December 1, 2012 By Marco Carbajo

Personal and Business Credit

Operating a successful business requires a great deal of attention and effort, from cultivating your business reputation and managing day-to-day operations to keeping your company finances organized.

One of the most important tasks owners focus on is maintaining a strong business credit rating due to its influence on business lending, partnerships, investors, and vendor relationships.

One of the most difficult aspects of managing business accounts is keeping personal and business credit lines separate, namely because it’s easy to blur the two.
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How Business Credit Trumps Personal Credit in the Business World

June 3, 2010 By Marco Carbajo

Business Credit vs. Personal Credit

I’m sure we can agree that for far too long business owners have relied on the strength of their personal credit to dictate their ability to obtain funding for their businesses.

Unfortunately this dependence can be easily avoided if more business owners knew about the advantages that business credit provides.

To provide some insight I have assembled some of the key advantages of business credit compared to personal credit that I know will get your attention:

Social Security vs. Federal Tax ID

Your social security number (SSN) is your personal unique nine-digit number issued to you so you can pay taxes and pay into the social security system. It’s also used by the credit reporting agencies in the creation of your personal credit files.

A Federal Tax ID Number (EIN) is the corporate equivalent to a social security number. It’s a nine-digit number assigned by the IRS to business entities operating in the U.S. in order to identify each company.

The major difference here is even though you are issued only one social security number as an individual as a business owner you can obtain multiple Federal Tax ID numbers if you own multiple companies.

Single Personal Credit File vs. Unlimited Company Files

Now this is the part where it gets really exciting because while you have only one consumer credit file linked to your SSN you have the ability to create and establish multiple business credit files with the business credit bureaus.

You can accomplish this because each company you incorporate has its own individual identity separate from that of its owners. Each business can obtain its own unique Federal Tax ID number allowing it to build its own unique credit file as well!

Limited Credit Capacity vs. Unlimited Credit Capacity

If you’re like most business owners who rely on their personal credit for business you’ll really get a kick out of this one.

Did you know that business credit has 10 to 100 time’s greater credit capacity then personal credit?

When you use personal credit to apply for business financing your mortgage, auto loan, credit cards and even student loans are affecting your ability to qualify.

But when you take advantage of business credit reports you truly get to leverage the power of your business. Your files include your company’s payment history and may include revenues, assets and company financials depending on how much information you furnish to the business credit bureaus. In addition your files will not show your personal debts or personal financial obligations.

What’s even more exciting is if you own several companies each of the businesses will have its own credit capacity giving you unlimited financing potential.

FICO® Credit Score vs. Paydex

Now I know there are many different scoring models out there but the most widely used on the consumer side is FICO® so for simplicity let’s cover that one.

The FICO® scoring system has eighty-eight negative rating factors that can hurt your personal credit score and only six positive ones. What’s even worse is you only have control over five of them so needless to say you’re fighting an uphill battle on the consumer side.

However, one of the main business credit bureaus known as Dun and Bradstreet issues its own business credit score known as paydex. This score is primarily based on how your business pays its bills and it’s much easier to understand and maintain compared to FICO®.

As you can see business credit will always trump personal credit and if you are just starting to launch a business or run an existing one now is the time to utilize one of the best kept secrets in the business world.

Ready to start building 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 titled ‘Eights Steps to Ultimate Business Credit’ ($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 building program for small business owners. 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.

Business Credit

May 25, 2010 By Marco Carbajo

Business Credit

Business Credit is borrowed money that your company can use to purchase products or services it needs and repay the funds at an agreed upon date or time frame. It can also refer to the amount of capital your business can secure without the use of personal assets.

The good news for you is that businesses of all sizes and entity types have the ability to create its own corporate credit identity completely separate from that of its owners.

Unfortunately most entrepreneurs are not aware of this and operate as a sole proprietorship which is a form of business structure in which the individual takes on all aspects of funding, starting and operating the business.

As a sole proprietor you keep all the net profits but you’re also taxed on them too. This is why entrepreneurs often rely on the strength of their personal credit reports to determine the amount of financing they are able to obtain for their business.

Unless you incorporate the IRS will automatically default your business as a sole proprietorship leaving you personally liable for all debts and actions made by the company.

By incorporating your business it now gets to be treated as a separate legal entity like a human being created through a legal process.

Similar to a social security number which is tied to your consumer credit files your business can obtain a Federal Tax Identification Number and establish its own business credit report.

Once you begin building business credit you can obtain everything from equipment, office furniture, supplies, and inventory or even lease automobiles through corporate fleet programs.

You should limit the use of your personal credit or guarantee by applying for vendor credit and if you apply for other sources of financing like a business line of credit then you will also need to maintain a solid bank rating too.

Business credit cards are another source of credit that your company can obtain with each card containing its own approval criteria and terms and conditions. Some cards may not be a good fit especially the ones who base its approval and payment reporting on the owner’s personal credit and not the business.

Your company can also apply for business loans which are either secured or unsecured and are traditionally funded by banks.

Each of these sources of business credit can provide the short or long term capital your business needs while protecting your personal credit and personal liability.

While it does take time to build a creditworthy company you can expect to save more money and obtain much greater financing than you would ever personally.

Are you ready to start building business credit for your company? 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 building system for small business owners. 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.