How to build business credit
Many business owners fail to establish business credit credibility because they need to learn how to approach it.
One thing is important to lenders:
Do you look attractive on paper?
This is the only thing a lender should ever be concerned about. Lenders measure risk to reduce default rates for potential clients. This is done by assessing the “findability” of a company.
These five tips will help you quickly establish credit for your business.
1. Make sure everything is in order. Before you apply for credit, you must be able to get it. These include a 20-point checklist.
A business owner must also have 16 additional points to be eligible for financing. We have over 2000 lenders’ lending guidelines!
Lending institutions need this information because many applications are for small business loans and business financing. This allows us to eliminate many small-business owners who need help getting funding.
2. Start with vendor accounts. Contrary to revolving and revolving accounts, vendors’ charges are usually set up with net 30-terms. The vendor will require that the business owners pay the balance at the end of each month. Many vendors, including staples and Uline shipping, Uline shipping, Uline radio shack, and home depot, offer vendor accounts that can all be set up by any business owner. These guidelines are based on our business credit program.
We also have 300 other vendors. The business owner will be approved before they apply for the vendor account.
3. Access your Duns Account number to ensure that your vendor tradelines are reporting. Dun and Bradstreet charge anywhere from $700 to $1500 to help a business owner get set up. They like to pair products and programs to get the most out of business owners’ cash. Our business finance suite allows business owners to set up a Dun’s account free of charge. This almost covers the cost of the system.
It is vital to know what trade lines are showing up on your business credit profile for a business owner to succeed. This is because many revolving credit lines rely on starter vendors to be trade references before granting corporate credit. It can make a difference in the success or failure of your business credit report.
4. To get started, ensure that you use no personal guarantee or personal credit check vendors.
Building corporate credit is about removing your liability from your business risk. A business owner cannot accept personal guarantees or credit checks to get business credit approved correctly. Determining which vendors don’t require private contracts or credit checks can take time and effort. To know which vendors require personal guarantees of credit checks, you need to be able to access underwriting guidelines. These are available in our business finance suite. You can ask the vendor directly for this information if you’d like. Alternatively, you can collect many applications and not worry about personal information. There are only so many options if you have a reliable source.
5. Before applying for business credit or revolving accounts, ensure you have “x” tradelines reported.
This is critical to your success. Many business owners need help understanding the requirements for approval for a VISA line of $10,000.
Can a merchant extend a VISA credit line of $10,000 to a business owner with credit that has yet to be established or is in poor standing?
NO!
This is why so many business owners fail. People talk about applying for business credit, such as a Staples Visa. If you have nothing to make you attractive to the lender on paper, is it logical for them to lend you money?
Would you lend money to me? What if you still need to get business credit?
Most likely not. Financial institutions won’t either.
It is important to have everything to build business credit. Your chances of getting financing will be ruined if your foundation is weak. Building business credit can be difficult if a business owner needs to know where they should start.
Business owners work with a business coach who is solely responsible for ensuring they receive the financing they desire. Our business coaches have an unmatched guarantee of $50,000.