Your business needs good credit to survive. When you're trying to make your business bigger, build a new facility, acquire expensive new machinery or resources, or even use a simple line of corporate credit, your business needs to have a good sense of trust with its lender. That's why it's so important to have a good business credit history.
But what if you just started a business - or else you're trying to start one - and you don't have a good line of credit? What if your personal credit can't get you the funds you need to get your business off the ground? Are you doomed?
Of course you're not doomed! What you need to do is establish a separate line of credit through your business, so that your lenders will be looking at the credit history of your company, instead of your personal credit history. You'll need to establish your business credit as being separate from your personal credit. Here are a few ways to do that:
1. In order to establish better credit history for your business, you're going to have to create a separate legal entity for your business. That means severing the financial link between your business and yourself. Don't worry - you can still use your own personal means if you need to, but you won't have the same account as your business. In order to establish your business as a separate legal entity from yourself, you'll want to set it up as a corporation. This will enable it to have its own legal personality, as though it's a different person. That allows your business to handle all its own financial transactions, without being tied to yours.
2. You'll want to establish a separate bank account for your business. This will require an EIN (Employer ID Number,) which functions much the same as an SSN (Social Security Number) does for a person. This allows your business to function separately and pay its own bills. (It also keeps you from being tempted to use business funds for your own debts.)
3. Establish separate credit card accounts. Your new business will probably need about three different credit card accounts - each with a different credit card company - in order to establish a good line of credit. A business credit card comparison will allow you to choose the best companies for this. You'll want to make sure you know what to look for; a business credit card comparison should bring you the kind of results that make it clear your credit card companies are treating your business as a separate entity. Some companies will still want your Social Security Number, and if possible, you should steer clear of these companies. They're not looking to swindle you; the problem is that they may treat you as a person who owns a business, not a business in of itself.
4. Once you've completed a business credit card comparison, you'll be able to choose a few credit cards to use for your business. This allows you to use your credit cards to make purchases for your business. Don't go out and try to make extra purchases; that will only waste money. Just make sure to use your credit cards on the mundane purchases you're already making. And be sure to pay them off before you rack up any charges on your credit card bills. That business credit card comparison isn't worth anything if you go off and get yourself a bad credit score again. By paying off your bills punctually, you'll establish good credit for your business. When those credit card companies report to your lender (make sure they will,) they'll be able to testify of your good credit history as a company.
Corporate Credit Concepts specializes in "KEY PHRASE". For more information about "KEY PHRASE" and how it might benefit your business, please CLICK HERE for a free phone consultation.