Why Should You Build Business Credit?

Getting business credit isn’t usually a top priority of company owners until they need a loan, but if you’re wise, you’ll establish business credit way before you need a loan.  Having a business credit score associated with your company means that you won’t have to worry about comingling your personal finances with your company affairs.  It’s also worth noting that almost any form of serious business loan will require you to furnish business credit.  Whether it’s a small loan for $10,000 from a commercial lender, or a $5 million venture capitalist investment, a business credit score is a must.

Having a company that has its own credit score also raises its value, since it means that business owners who buy your company in the future will not have to deal with the red tape involved in establishing credit.  The good credit score allows them to hit the ground running, borrow money as soon as they need it, and also get more opportunities.  As a result of the easier borrowing ability credit scored businesses have, getting business credit makes your business more attractive to buyers – and more valuable in the market.

How To Build Business Credit Quickly

Having a personal credit score seems hard enough at times for most people, and if you’ve been trying to get an unsecured business loan, you probably feel as if establishing business credit seems nearly impossible.  Though it’s not easy, establishing business credit is a struggle well worth it.  Having a good business score often means that you won’t have to secure a loan with your own property, or furnish your own credit score for a smaller loan.  Before you can build business credit, you’re going to need to know how to build a credit score.  That’s where we come in, and this is how we make it happen.

Make sure that your business is bank compliant.  In order to get a business credit score, you need to actually comply with all the banking regulations involved.  This includes getting all the right licenses and certifications for your company – and that can vary depending on your industry.  Create a filing with all three major business credit bureaus.  The big three include Equifax Business, Dunn and Bradstreet, and Corporate Experian.  By linking them up with your information, you’ll be able to start having a business credit score soon enough.

We help you start working with vendor accounts.  The easiest way to begin establishing your own business credit is to establish accounts with vendors.  These vendors allow you to get a line of credit for your business, which in turn means that you will be able to buy supplies now, then pay for them all at the end of the month.  This helps you establish a good payment history without spending too much money and effectively and efficiently opens the door to other sources of credit.

After about six months of spending, you’ll have a good credit score.  This will allow you a better shot at the loans that you want, and also will give you more business opportunities in the future.  The longer you have a good payment history, the better off you will be.

It’s important to remember that a credit score alone is not the sole deciding factor for business loans but it does mean that you may end up having to deal with less credit issues moving forward.  The sooner you get a business credit history, the sooner you have a great shot at getting the loan you want.