Obtaining credit for a business with no personal credit check and no personal guaranty is very appealing. One might say this is the holy grail of owning a business, being able to obtain massive amount of funding while using the business itself as collateral.
There are many steps to building an exceptional business credit profile. Each of these steps is essential in obtaining business credit with no personal guaranty.
Here are some of the steps you will want to take when building business credit...
1. Start by incorporating your business and make sure you have obtained a Federal Tax ID#.
2. Set up a business bank account and always make sure that the business name on the corporation papers is the same as on your business bank account.
3. Have a business land-line number that is listed with 411.
4. Always have the proper businesses licenses for your business that is needed in your state.
5. Complete a credit profile with Dun and Bradstreet
6. Pay business bills that report to the business credit reporting agencies ahead of the due date. The earlier they are paid, the higher your business credit scores will be.
7. Build solid payment history with many accounts being paid as-agreed or early each month. Building excellent business scores means they have many accounts reporting as paid-as-agreed. So get credit, and then use it to build a solid profile.
8. Always monitor your business credit file. Keep an eye on your scores and the accounts that are reporting.
9. Establish a minimum 'low 5' bank rating by establishing and using your bank credit.
10. Open a small business credit line that reports on their business credit profile. Credit lines have high limits and reflect positively on their business reports.
11. Establish a diversity of credit using multiple store and Visa, MasterCard, and Amex accounts.
12. Establish a well written business plan as many lenders will want to see this in order to approve you for funding.
We hope this information was informative for those of you who are starting your own business or even just thinking about it. If you have any questions please give us a call.