Step 3: Build Business Credit
Business owners need to build their BUSINESS credit rating and make it distinct from their PERSONAL credit rating. Unless the business credit is built separate from the personal credit, the business credit will be zero even if the owner’s personal credit is very good.
Imagine if you were a 40-year-old woman and you had gone your whole life relying on your husband’s credit. You had never borrowed money and gotten credit in your own name. Then you find yourself in a situation where, you need to finance a purchase. Would you be granted a loan? NO, because you have not established a credit profile. No credit equals bad credit in a lender’s eyes. The same is true for business credit.
Why does business credit matter, you still might ask? Because if you never build your business credit, then you will have a more difficult time in getting business financing; or you will pay higher interest rates and get worse terms, if your business doesn’t have a credit history. If you don’t establish it separate from your personal credit, your business credit will always be tied to you personally. For liability and growth reasons, someday you may want to have your business and you as separate entities. Financing can be a crucial part of growing a small business in the good times and keeping it afloat in rough times
Do these 6 things to build a positive BUSINESS credit profile:
To take the Business Fundability Test and to determine your Lender Compliance Score, CLICK HERE. The Fundability Test will help you determine if you are ready to get funding or what is lacking.
For a special report on "Building Your Business Credit" enter your name and email below:
Imagine if you were a 40-year-old woman and you had gone your whole life relying on your husband’s credit. You had never borrowed money and gotten credit in your own name. Then you find yourself in a situation where, you need to finance a purchase. Would you be granted a loan? NO, because you have not established a credit profile. No credit equals bad credit in a lender’s eyes. The same is true for business credit.
Why does business credit matter, you still might ask? Because if you never build your business credit, then you will have a more difficult time in getting business financing; or you will pay higher interest rates and get worse terms, if your business doesn’t have a credit history. If you don’t establish it separate from your personal credit, your business credit will always be tied to you personally. For liability and growth reasons, someday you may want to have your business and you as separate entities. Financing can be a crucial part of growing a small business in the good times and keeping it afloat in rough times
Do these 6 things to build a positive BUSINESS credit profile:
- Create a business entity separate from the business owners.
- Get a business tax identification number, which is like a social security number for your business.
- Establish a physical location for your business.
- Have a separate business phone number and listing for your business.
- Get all the appropriate city, county, and state business licenses.
- Set up a separate bank account for your business.
To take the Business Fundability Test and to determine your Lender Compliance Score, CLICK HERE. The Fundability Test will help you determine if you are ready to get funding or what is lacking.
For a special report on "Building Your Business Credit" enter your name and email below:
