Corporate Credit

Having a small business is all about the money you make and your corporate credit. Corporate credit is similar to your personal credit as your loans are reported to a credit bureau. When you start a business, you will want to set your business up with a legitimate business entity, such as an LLC or Corporation. This allows you to keep your personal and business finances separate. Having the two separate will keep your personal credit score separate from your corporate credit score. Doing this will establish your business credit and will allow you to acquire loans under the business name.

Business Entity
As mentioned above, one of the first steps you should do when starting your new business, is setting up your business entity. This will not only help keep your personal and business finances separate, it will also help the future of your company and possible purchases your make or clients that you will work with. Along with setting up your business entity, set up a physical address your creditors can use with your credit score and a legitimate phone number that is separate from your personal phone. These are the first steps to building your corporate credit.

Register with the Credit Bureaus
Building your corporate credit score will take time and patience. As you find yourself making purchases and applying for loans, make sure that you have registered your company with the business credit bureaus. Once your business is registered with these business bureaus, the financial institutions you use will start reporting your credit history, thus raising your credit score. As you apply for corporate credit with financial institutions, make sure it is an institution that will report your credit rating. If it is an agency that doesn’t, your corporate credit score will not be built.

Know Your Score
As you start to raise your corporate credit, take a look to see where your rating is at. Business’ have a credit score range between 0 and 100. The higher your number is, the better your corporate credit is. You want your credit score to be around 75 or higher. This number will show your company as a dependable company that is ready and willing to take a loan out and pay it back in full. Like mentioned above, the way to establish this credit number, is to make sure the financial institutions you are using, will report your credit to the business bureau.

Acquire Funding
Most corporate credit loans are unsecured loans. An unsecured loan is when you don’t put any collateral against your loan. You are using your corporate credit score to get your unsecured loan. Once you have your loan in place and have received your money, use your money what you intended it for to start or grow the business. You have taken a loan out against your business’ credit score, now is not the time to damage your credit score. You should not use this money for anything personal; use it towards your company. You can purchase equipment, real estate, an office or office supplies, etc. Make your loan payments in a timely manner. As you make your payment, your financial institutions will report your credit, thus building your corporate credit rating.

Don’t forget that corporate credit is about your company. When researching your financial institutions and inquiring about getting a corporate credit loan, you will want to a financial institution that will not want to use your personal credit against the loan. Not all financial institutions will offer this. You are working on building your corporate credit, not your personal credit. Keep the two as separate as you can. If you find yourself in a bind with your corporate credit, you don’t want it to have an effect on your personal credit score. Always keep your corporate credit first when it comes to your business.

Corporate Credit Concepts specializes in corporate credit. For more information about corporate credit have it might benefit your business, please click below for a free phone consultation.