Business Credit Builder Unlocks Corporate Credit for Small Business

May 29, 2014 By Marco Carbajo

Business Credit Builder

Have you been sitting on the fence when it comes to building business credit?

Are you confused on where to start?

Is it because you think it’s too difficult or takes too much time?

Building small business credit for a start-up or existing business can seem like it requires a great deal of time or appear difficult to do, but the good news is it doesn’t have to when you have access to a business credit building system.

Today’s post is a bit different because rather than cover the ‘Why’ I want to talk about the ‘How To’ when it comes to building business credit. The reality is one of the biggest roadblocks preventing entrepreneurs and small business owners from getting started is where to begin, what exact steps need to be taken, and where to find the best creditors, suppliers, and lenders.
Click to continue …

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.

Business Credit: Top 10 Myths-Part 2

February 25, 2010 By Marco Carbajo

Business Credit: Top 10 Myths

On the previous post I covered the first four myths on building business credit. I encourage you to bookmark these posts so you can revisit them at any time.

Here are the remaining myths of the top 10 surrounding the corporate credit industry:

6: All vendors, suppliers and lenders report to the business credit bureaus

Not true! There are over a half a million vendors and suppliers that are willing to extend vendor lines of credit to your business but less than six thousand of these companies report to the business credit bureaus. What’s even more alarming is not all of these companies report on a monthly basis either. Some only report to the business credit bureaus once every six months!

5: All business credit cards report to the business credit bureaus

Currently there are over five hundred business credit cards in the marketplace but less than forty will issue a card without requiring a personal credit check or personal guarantee. These select cards report solely to the business credit bureaus and not your personal credit reports. However, there are also a few business credit cards that require a personal guarantee but only report to the business credit bureaus.

4: Every business has a business credit profile with the business credit bureaus

A Dun & Bradstreet profile requires that a business owner first apply for a DUNs number and submit their business information. Corporate Experian and Small Business Equifax create a business profile report for your company once a lender or supplier that you have payment experience with submits a data record. There are many other business credit bureaus that require business owners to complete a registration process prior to creating a profile.

3: Buy a shelf corporation and get all the business credit you’ll ever need

Shelf corporations provide certain advantages when it comes to obtaining credit simply from the fact that a business that is five years old has a much greater influence to a lender than a business that’s been in business for a few months.

With that said a shelf corporation alone will not enable you to obtain all the credit you need because there are many other factors that are taken into consideration. For example, if you have a ten year old shelf corporation that needs a $100k business line of credit a bank will need to view your company’s bank rating, balance history, financials, tax returns, profit & loss statements and so on.

2: All you need is a strong paydex score to qualify for a business line of credit

While a strong business credit file does play a part in qualifying banks look at many other factors. This includes your bank rating, balance rating, NSF track record and personal credit scores.

1: All you need is an 80 paydex score to get unlimited business financing

This by far is one of the biggest myths in business credit because an 80 paydex score with Dun & Bradstreet is said to be like having a 720 personal credit score. While that may be true to some degree there are some important details that many fail to mention. For example, you can have four positive trade references reporting with $200 being the highest credit limit on all four accounts and still score an 80 paydex.

This is because DNB’s rating system requires a minimum of four positive trade references but if the four you have are small limits then this hardly qualifies your business to get approved for thousands of dollars of cash credit, lease credit, business loans and business lines of credit.

In addition, having only a DNB file is like having only one personal credit file with the credit reporting agencies. Let’s say all you have is a personal credit file with Equifax but have no file with Transunion or Experian. You would never be able to get approved for a mortgage because you don’t have a completed financial picture for lenders to review your creditworthiness.

This holds true for your business as well. In order to show a complete business credit report for your company then you will need to have a profile with the three main business credit bureaus.

Now that you know the myths surrounding the industry I encourage you to share this information with other small business owners and put your company on the path to corporate credit success!

Business Credit Resources

» Start Business Credit

» Business Credit Insiders Circle

» Business Credit Blog

To access business credit insider secrets, premium vendors, leasing companies, business credit cards, 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 specialist, author, speaker, and founder of the Business Credit Insiders Circle. 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.

Build Business Credit History on a Shoestring Budget

February 8, 2010 By Marco Carbajo

Build Business Credit History

Business credit builder companies believing it’s too difficult to build company credit on a shoestring budget are in for a pleasant surprise after reading this post. Every business regardless of how small the amount of money it can spend has mandatory expenses it cannot avoid.

These expenses in my book are opportunities for you to build business credit history. No matter what amount of money you’re spending right now to operate and grow your business you can benefit by having it reported on your company’s corporate credit file.

Here is a sample list of the typical expenses every business incurs that can be used to build business credit history:

Website development – some companies in the marketplace that develop web sites not only extend credit to start ups but also report your payment experience to the business credit bureaus. If you already have a working web site then make a note of the company that you paid to build it for you.
Internet services – are you paying a web hosting fee? If so why not have the monthly fee reported to your file? Are there companies that report web hosting fees to the bureaus? You bet!
Phone services – another expense that is so widely overlooked that your company should get credit for on its report.
Office supplies – many office supply companies offer vendor credit lines that you can use to purchase supplies your company needs. This is not only a great way to fund your short term needs but also an easy business credit builder.
Postage/Shipping – instead of going to the post office and using cash to ship products, letters or materials why not use a shipping company that reports your payment history.
Marketing – if you are using a printing company to create your brochures, business cards and marketing materials why isn’t your payment experiences with them being reported on your corporate credit file?

These are just a few of the items I review with my clients in my business credit practice. One of my members who own a home based business marketing children’s books had over twelve positive payment experiences added to her file after we did this exercise. Within two weeks after her profile was updated we got her approved for a $7,500 credit line with a marketing company which she is now using to expand her advertising reach.

It was much easier for her to get those items listed because she enrolled in the duns credit builder program offered at Dun & Bradstreet. This would be a good option if you already have companies that you work with that do not report to the bureaus. But if you’re just getting started then it makes sense to use companies that report so you don’t have to go through the additional work.

You may want to consider the Business Credit Insiders Circle because we provide you with the companies that offer these services like web hosting, web development, marketing, office supplies and many more that all report to the business credit bureaus.

As you can see this is simply a business credit building strategy that takes what you are already spending to operate and grow your business and have it reported on your company’s credit file. When you showcase your company’s ability to manage its finances on its corporate credit file you can greatly increase the ability for your business to access the cash, credit and financing it may need in the near future.

To your business credit success!

To access business credit insider secrets, premium vendors, leasing companies, business credit cards, and lenders that report to all the major business credit bureaus become a member of my Business Credit Insider’s Circle. Submit your name and email below for details and receive a free audio seminar ($597 value) =>

Marco Carbajo is a business credit specialist, author, speaker, and founder of the Business Credit Insider’s Circle. 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.

Build Corporate Credit for your Home Based Business

January 18, 2010 By Marco Carbajo

One of my friends recently asked me whether or not he can build corporate credit for his home based business. After asking a few simple questions there was really only one obstacle that was preventing him from starting which was the legal structure of the sole proprietorship that he chose for his company.

Unfortunately, this happens to be the most common choice among home based businesses. Normally you don’t pay anything to start a sole proprietorship. 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 a sole proprietorship is not considered a separate legal structure. Instead, it is considered a personal extension of you and because this business types is considered a personal extension of you, you don’t have any protection from it.

In addition, you can’t establish corporate credit separate from your personal credit with a sole proprietorship. In order to build company credit you will need to first incorporate your home based business and next obtain an employee identification number (EIN).

This step by far is the most important because it’s the foundation for what you will build business credit upon. Not to mention all the other important areas that entity selection affects such as taxes, liability and asset protection.

Once you incorporate your business and have obtained an employee identification number you will then need to complete the standard corporate conformity guidelines that creditors expect your business to complete. There are over twenty specific tasks that I review with our members prior to setting up their business credit file and applying for vendor credit lines to build their corporate credit.

Now if you’re wondering why your home based business would need this credit information first ask yourself the following questions:

Do I use my personal credit cards to pay for my home based business expenses?

Do I purchase goods and services from other businesses using my personal credit in order to operate and grow my home based business?

Do the credit card charges I incur for my home based business show up on my personal credit reports?

When you build business credit you have the unique opportunity to obtain business credit cards with no personal guarantee. Best of all when you use these cards for your home based business expenses they don’t affect your personal credit reports!

Some other benefits include:

Business credit cards have much higher limits than personal credit cards.
You can build companycredit even if you have bad personal credit
Reduce your tax burden and improve accounting

If you’ve been doing business up to now without a business structure, both the IRS and your state government defaults your business into a sole proprietorship.

And that means you’re exposed.

Now is the time to select the proper business structure for your home based business if you want to establish corporate credit and you want to protect yourself from personal liabilities.

To access corporate credit insider secrets, premium vendors, leasing companies, business credit cards, and lenders that report to all the major business credit bureaus become a member of my Business Credit Insider’s Circle. Submit your name and email below for details and receive a free audio seminar ($597 value) =>

Marco Picture 2009 Super Small pic Marco Carbajo is a business credit specialist, author, speaker, and founder of the Business Credit Insiders Circle. 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.