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Building Business Credit: 20 Steps to No Personal Guarantee

February 4, 2010 By Marco Carbajo

Building Business Credit

While obtaining business credit cards, small business loans and a business line of credit is the common objective for many small business owners the

Business Credit No Personal Guarantee

re is a growing demand for learning how to qualify without having to use personal credit or a personal guarantee.

I’m happy to see that more and more business owners are embracing the idea of completely separating your personal credit from business credit. Many of

our new members were never aware of the danger that co mingling the use of credit profiles for personal and business can jeopardize the protection of the corporate veil plus limit the amount of funding their business can obtain.

Here are twenty steps to building corporate credit without using a personal guarantee. Please note that I’ve used examples from my business credit building system.

  1. Incorporate your business and obtain a Federal Tax ID#- your Tax ID number will be the number that identifies your business and information. It’s just like how your social security number will identify who you are for personal credit.
  2. Complete corporate conformity (411 listing, verifications, business license, etc.) –vendors, lenders and banks will do their due diligence prior to extending credit to your company. Don’t expect to receive credit by skipping these key fundamental steps.
  3. Select the right business classification codes – avoid selecting codes that will trigger a red flag with the business credit bureaus and lenders. This can stop your business credit building efforts dead in its tracks.
  4. Set up a complete profile with Dun and Bradstreet – Simply obtaining a DUNs number doesn’t cut it you will need to furnish additional information on your profile to give creditors a complete picture of your business. Remember there are companies like First Equity that offer no personal guarantee business credit cards but by invitation only. They purchase targeted lists from the business credit bureaus which you want your company to be on.
  5. Add existing positive trade references – if you have existing trade references to add to your file then you may want to consider using DNB’s business credit builder program which allows you to add your own references but keep in mind there are certain references they will not accept.
  6. Apply for vendor lines of credit – obtaining vendor credit can be simple and some suppliers even specialize in extending credit to startup companies or businesses with no credit at all. The key though is applying for credit with vendors that report each month and report the true credit limits your approved for. Keep in mind that we provide these to you as a member of our Business Credit Insiders Circle.
  7. Pay invoices ahead of the due date – you can increase your paydex score to 90 or higher by simply paying your invoices 10-20 days ahead of the due date. A big plus on your files!
  8. Build solid payment history – while account types and trade lines are a factor keep in mind that a payment track record is the final ingredient. Don’t think that one paid invoice will make your business capable of acquiring no personal guarantee credit lines or credit cards.
  9. Monitor your business credit file – a no brainer and a good habit to adopt for your personal files as well.
  10. Get listed with multiple business credit bureaus –target specific business credit bureaus that cater to your industry on top of the big three.
  11. Set up a small business bank account –before selecting a financial institution for your banking make a list of the financial products you may need. Consider a credit union or community bank because they are much more flexible in today’s economic environment.
  12. Establish a minimum ‘low 5’ bank rating – establish bank credit with your small business bank account.
  13. Obtain secured business credit cards
  14. Open a small business credit line
  15. Establish a diversity of credit – build a strong business credit rating by obtaining different account types. This includes trade credit, revolving credit, loans and leases.
  16. Keep proper financials
  17. Establish a well written business plan – A business plan is your blueprint that outlines every necessary component for the success of your business. Enough said!
  18. Maintain personal credit scores at 680+ – when applying for no personal guarantee credit a lender or creditor may still require a personal credit check.
  19. Build large trade lines with multiple tiers of credit –you can request for a credit limit increase usually after six months of good payment history. Before applying for larger tiers of credit be sure to know what the requirements for approval are.
  20. Stay informed! – join forums, social networks, read articles, subscribe to blogs and consider joining memberships like the business credit insiders circle.

Following these steps will provide your business opportunities to establish business credit in the name of your business while protecting your personal credit and personal liability.

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 vendor lines of credit, fleet cards, business credit cards with and without a PG, 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) =>

To Your Success In Business and in Life!

Did This Blog Help You? If so, I would greatly appreciate if you like and shared this on Facebook and Twitter.

About the author

Marco CarbajoMarco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. He is a business credit blogger for Dun and Bradstreet Credibility Corp, the SBA.gov Community, About.com and All Business.com. His articles and blog; Business Credit Blogger.com, have been featured in ‘Fox Small Business’,’American Express Small Business’, ‘Business Week’, ‘The Washington Post’, ‘The New York Times’, ‘The San Francisco Tribune’,‘Alltop’, and ‘Entrepreneur Connect’.

Filed Under: Business Credit Tagged With: building business credit, building business credit fast, building corporate credit, business credit, business credit cards, establish business credit

Establishing Business Credit with a Secured Business Credit Card

January 25, 2010 By Marco Carbajo

Secured Business Credit Card

Recently I posted how credit restoration is a viable strategy for small business owners in personal credit recovery. In addition to repairing your personal credit you should also focus on building and if necessary repairing your business credit as well.  One of the best ways to start establishing business credit is through a secured business credit card. secured business credit card

These types of credit cards are specifically designed for businesses with no credit or less than perfect credit history. When you apply you are required to submit a security deposit that will establish an initial credit line. In most cases a minimum deposit of $500-$1,000 is required and once you begin using your card you will receive invoices like a standard unsecured business credit card.

As you pay your invoices your payments will get reported to the business credit bureaus. I always encourage my members to use a secured business credit card along with vendor credit lines because it will allow you establish a strong blend of account types on your files.

Some of the secured business credit cards we have listed report solely to one bureau like Corporate Experian while others report to two or all three of the major business credit bureaus. Keep in mind that your deposit is only used to pay off the debt in the event that you default on making payments.

As soon as you receive your card you can start using it to make purchases for your business. When you charge a purchase just simply pay the invoice when it comes due. Now remember the whole purpose of using the card is to build credit so don’t be late on your payments. After six months you can request that your account be reviewed for a credit limit increase without requiring a larger security deposit.

Some other benefits of a secured business credit card include:

  • Universal Acceptance
  • Cash Back Programs
  • Online Expense Management
  • Easy Funding Options

Before you apply you will need to have your company’s business license, articles of incorporation, address verification, federal tax ID#, banking reference and general business information. You will also need to list authorized users and how many cards you are requesting.

You can send your security deposit via wire transfer and typical turnaround times take 7-10 business days. Keep in mind that before you select any secured business credit card make sure you read the terms and conditions completely and verify which business credit bureau they report to.

Another advantage to using secured business credit cards is the separation between your personal credit and business credit. In my opinion these types of business credit cards are ideal for every small business owner because it not only establishes business credit but also controls spending, eliminates personal liability and protects your personal credit files.

Looking for the best secured business credit cards?  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 secured business credit cards, vendor lines of credit, fleet cards, business credit cards with and without a personal guarantee, 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) =>

Marco Carbajo

Marco Carbajo is a business credit specialist, author, speaker, and founder of the Business Credit Insider’s Circle.  He is a business credit blogger for AllBusiness.com, a subsidiary of Dun and Bradstreet and author  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 American Express Small Business, Business Week, The Washington Post, The San Francisco Tribune, Scotsman Guide, Alltop, Entrepreneur Connect, and Active Rain. 

Filed Under: Business Credit Tagged With: establish business credit, establishing business credit, how to establish business credit, secured busines credit card, secured business credit cards

How Business Credit Can Make A Difference

September 30, 2009 By Marco Carbajo

Credit Card Capacity

Business credit also referred to as corporate credit, is the ability to obtain financing under the name of a corporation or business rather than an individual person. Now I’m happy to tell you how business credit can make a difference in more ways than you can imagine but first you have to realize that the only way you can benefit is by taking action. Start digging your well before you get thirsty! 

 

Don’t put your business in a position where you are desperately seeking funds to survive and/or expand.  You will find that banks and lenders are much more likely to extend credit to a business in large amounts that don’t need the funds when they apply. The best time to build busness credit is when you don’t need the money!

 

The advantages of having established business credit range from simple operational issues, all the way up to allowing your company to withstand scrutiny from a potential client or potential business partner who may gauge how reliable and proficient your company is by how well your business credit profile reads.

 

From an operational standpoint, business credit allows you to do several things such as purchase supplies, pay debts, maintain facilities, hire additional staff, compensate for a downswing or upswing in business without depleting your vital cash assets. If you establish business credit you’ll have the ability and the financial resources available to respond to market demands or growth.

 

Another advantage includes the fact that many lenders and lease providers base their interest rates on what the business credit profile and rating is for your company. Having established credit can lead to incredible savings in interest rates and much more favorable lease and loan terms.

 

So let’s suppose that you need $50,000 for a piece of equipment for your business. Without a strong business credit rating, your bank will use your personal credit only. If you get approved, you’ll have an interest rate of let’s say 18%. With a D&B report, you can lower your rate to maybe 10% and you don’t have to guarantee the loan with your personal assets. So these are just a few of the examples on how business credit can benefit your company

 

Finally, 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 even more favorable terms and lower interest rates without a personal guarantee. That is a major difference from how you may be running your business today!

 

Some other ways that business credit can make a difference include:

 

  • Business credit cards have much higher limits than personal credit cards.
  • Your corporation has the ability to obtain 10 to 100 times the credit then you can obtain personally
  • Having the cash lines available for unforeseen expenses like expansion, equipment, operations or fulfillment
  • Prevent the risk of damaging your personal credit
  • Prevent the limits that lenders will impose on you for personal credit for you and your family’s needs
  • Reduce your tax burden and improve accounting
  • Last but not least you SAVE 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.

 

How has business credit made a difference for you and your business?

 

CLICK HERE to become a member and discover what a difference business credit can do for you!

 

 

To Your Success!

Marco Carbajo

About the Author

 marco-picture-2009-small-pic2

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 To Your Success! =>

Filed Under: Business Credit Tagged With: build business credit, building business credit, business credit, business credit cards, establish business credit, how business credit

Start Business Credit : Top 10 Reasons Why

June 30, 2009 By Marco Carbajo

Corporation picEntrepreneurs and small business owners who have a separate legal entity for their business have a unique opportunity that no other individual or sole proprietor has.

 

It’s the opportunity to start business credit by establishing a business credit profile that is completely separate from a personal credit profile. 

 

The main problem still facing today’s small business owner is fewer than 10 percent know about or truly understand how business credit is established and tracked-and how it affects their lives and businesses.

 

Statistics even 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.

 

Here’s what others are saying about the importance of starting business credit:

 

“The longer you delay establishing business credit,
the longer you delay taking advantage of business loans.”

~ Wells Fargo Bank

 

“You should differentiate your personal credit from your business credit.”

~ Entrepreneur Magazine

 

“Before you apply, you should examine your business credit reports.”

~ Inc Magazine

 

 

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.

 

Here is the ‘Top 10 Reasons Why You Should Start Business Credit Now.’

 

  1. Any debt you accumulate for the business would only report to your business credit file not your personal credit file.
  2. Eliminate 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.
  3. Protect you and your family from personal liability when you get approved solely on your businesses’ credit file.
  4. Improve your personal debt to credit limit ratios by transferring the balances of business debt used with your personal credit to your business credit.
  5. Eliminate personal liability you have on your existing business debt by balance transfer from personal credit to your business credit.
  6. Increase your personal credit limit availability for you and your family.
  7. Improve the appearance of your businesses’ funding capacity and stability.
  8. Eliminate inquiries on personal credit when applying for business financing.
  9. Increase your businesses’ ability to obtain cash credit 10 to 100 times greater then you can obtain personally.
  10. Last but not least you SAVE 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.

 

Some other benefits include:

 

  • Business credit cards have much higher limits than personal credit cards.
  • Having the larger cash lines available for unforeseen expenses like expansion, equipment, operations or fulfillment
  • Prevent the risk of damaging your personal credit
  • You can build business credit even if you have bad personal credit
  • Prevent the limits that lenders will impose on you for personal credit for you and your family’s needs
  • Reduce your tax burden and improve accounting

 

Still not convinced you need to start business credit?

 

CLICK HERE to listen to a free Business Credit Seminar ($597 Value)

 

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 the business may require in order to operate. The worst mistake you can make is seeking funding when your business needs it most. Lenders extend cash credit lines to businesses that don’t need the capital. Start digging your well before your business gets thirsty!

 

If you ask any business owner how they financed their business start up the answers usually are:

  • Personal credit cards
  • Tapped into home equity line
  • Personal loan from the bank
  • Personal loan from family & friends
  • Private investors

One of the many risks that business owners face is using their personal assets as collateral or guarantee for business loans and financing. If the business owner defaults on a loan then, valuable items like a car, house, or bank account can be vulnerable to creditors’ claims.

 

Instead of jeopardizing your personal credit and assets every time your company requires financing, you can use the business’ credit rating to secure the financing you need with even more favorable terms and lower interest rates.

 

Start your business credit today!

 

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, build corporate credit, building business credit, business credit, corporate credit, establish business credit, establish corporate credit, getting business credit, instant business credit, start business credit, startbusinesscredit

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