If you've got a business running, you know how important it is to be able to get funding. You've got to have a good source of outside financial aid, whether it's for expanding your business, corporate credit, or simply establishing your business in the first place. But in order to be able to get the loans you need, you'll also need a good credit score to go with it. What to do?
Well, if you've already got fabulous business credit, it's a lot easier. At that point, you'll just need to prove to the bank that you're worthy of their consideration by asking your current creditors and vendors to provide financial and credit statements to the bank. When they see how well you've been working with your creditors, the bank will know how good your credit is.
But what if your credit isn't quite that perfect? What if you're trying to start a business, and you're being turned down by bank after bank because of your personal credit score?
Have no fear; you can still get the money you need. You'll just have to go to a little more effort to get it. In order to find this kind of money with a bad credit score, you might have to accept a much higher interest rate. You might also have to start looking at lenders outside the banks. But the simplest way to get these loans is to establish a better line of business credit.
The first thing you should do in this case is make sure you're a separate entity from your business, legally. In order to overlook your personal credit score, the bank needs another credit score to look at. That means you're either going to have to ask Aunt Ida Mae to take out the loan for you, or you're going to want to establish your company as the person taking out the money, instead of you. This isn't as hard as it sounds; by establishing your company as a corporation, you set up your company as a separate legal identity. That means the law - and the lenders you go to for funds - treat your corporation as a separate person, with its own credit score. That means you can start to build your credit score from scratch, as a business.
Once you've established your business as a separate legal personality, with an EIN (Employer ID Number - like a Social Security Number, but for a business,) you can set up a separate bank account for your business spending. This allows you to pay your bills with a separate account, and it allows you to move on to the next step: compare business credit cards.
By working as a separate entity, you establish your business as a separate line of credit. But in order to build that line of credit, you're going to have to compare business credit cards and decide who can best work with you to improve your credit. You'll want to be able to find a credit card company with decent interest rates, but the main point here is to pay your bills off crazy-fast, so you'll be able to build up a great credit history for your business. You can establish a good line of credit to your company's name by making as many of your mundane business purchases (like office supplies) as possible on credit, and then paying off the sum immediately. That will show you're trustworthy.
As you compare business credit cards, you may notice a difference in some of the plans. While some credit cards are willing to establish a line of credit to anyone with a bank account, some will require a Social Security Number. These are not good companies to use for establishing business credit, because they may trace the line of credit to you personally, instead of to your business. When you compare business credit cards, make sure you select a card that treats your business as the cardholder.
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.