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How to Establish Business Credit

If you are in business most likely your personal credit has been your business credit, but did you know that you can establish business credit. Cash challenges are real. We have all been there, needing cash flow to make payroll, purchase inventory, hire new employees and expand but can’t because the capital isn’t available without a personal guarantee. If you a ready to stop giving a personal guarantee on credit for your business, you need to establish business credit. Bank financing is the most affordable financing out there, and when you establish business credit, you become a more secure risk to the bank. The great thing is that it’s not that hard to establish business credit. Most businesses close their doors due to lack of cash flow. In most cases, business owners go into bankruptcy or shut down because they maxed out their personal credit. Once you learn how to establish business credit, a whole new world of financing options will open up to you. No one wants to put up their house as collateral, and once you establish business credit, you won’t need to anymore. Every highly successful company has business credit, so it’s time to learn how to establish business credit so you can grow, your business. What is business credit? Business credit is credit that is obtained in the business’ name. Your business can obtain its own credit profile and credit score. With an established credit score, the business will then qualify for credit. This credit is in the business name and based on the business’ ability to pay, not the business owners. Business credit scores are based only on whether the business pays its bills on time. And in some cases there is no personal credit reporting from the business owner. In other words, you won’t need to provide your personal social security number to establish a credit line. Steps to establish business credit Establish a legal business entity (LLC, S-Corp, etc) Apply for an EIN number or Employer Identification number from the IRS Open a business bank account (Ideally, this is with a different bank than your…

5 Tips to Improve Your Business Credit Score

Most people have a decent understanding of their personal credit score, but not so many are as familiar with their business credit scores. Your business credit score is crucial in determining whether or not your enterprise is fit to borrow, how much interest you’ll have to pay on credit, and in some cases, whether or […] The post 5 Tips to Improve Your Business Credit Score appeared first on SmallBizClub.

Prepayment Penalties: When the Early Bird Doesn’t Get the Worm

It’s every small business owner’s dream: you took out a business loan to start or expand your small business, and it really paid off. Business is booming, cash is flowing, and you suddenly find yourself in the coveted position of being able to pay off your loan far before you anticipated. While you’ve always wanted […] The post Prepayment Penalties: When the Early Bird Doesn’t Get the Worm appeared first on SmallBizClub.

Your Personal Credit Score Matters More Than You Realize to Your Business

As an entrepreneur, it is assumed that you are aware that your business credit matters. It makes a difference in applying for loans, it affects your credit score, and improves your ability to apply for credit with your vendors. But How Aware Are You? Lenders of all kinds, especially banks, will look at how your […] The post Your Personal Credit Score Matters More Than You Realize to Your Business appeared first on SmallBizClub.

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