Business Credit Building: Top 10 Business Credit Tips For 2011

As we celebrate the New Year let's take some time to review a few key business credit

building strategies that can put your company on the path to creditworthiness. I'm sure there have been plenty of lessons that you've learned from in the past twelve months but what steps are you planning to take in 2011?

Here are my top twenty business credit building tips:

Tip #1

Get listed with all three major business credit reporting agencies - This is a major factor for a lender or supplier to determine the creditworthiness of your company without relying on your personal credit.

Tip #2

Obtain a merchant line of credit - An excellent source of cash credit that does not require a personal credit check, guarantee, or collateral since the credit line is determined by your monthly credit card transactions.

Tip #3

Develop a well written business plan - When it comes to bank financing a well written plan can help support a loan request.

Tip#4

Monitor, protect, and manage your business credit files - It's one thing to build a good company credit rating but it's vital that you also protect and maintain it too.

Tip #5

Establish a 'low 5' bank rating - Even though bank credit is different from business credit they both play an integral role in your company's ability to secure financing. A healthy balance rating and bank rating can play a positive role in a lender's decision making process.

Tip #6

Make business purchases with suppliers and creditors that report - If your good payment history with existing suppliers is not being reported how can you expect to show that you're a creditworthy company?

Tip #7

Add positive trade references to your company profile - This is a solution for non reporting suppliers but does require that your company pay a small fee. Dun and Bradstreet is currently the only agency that allows you to submit trade references.

Tip #8

Become a data furnisher with a business credit bureau - Extending credit and supplying payment data to the bureaus can benefit your business in multiple ways including increased product/service sales by as much as 50%.

Tip #9

Maximize your personal and business credit scores - Strong personal and business credit scores will open you up to many more financing opportunities. More choices simply give you much more leverage.

Tip #10

Build a strong diversity of credit accounts - A healthy blend of credit further shows that your business can handle different types of financing programs.

In 2011 your business will at one point require an influx of cash in order to cover certain business expenses. The worst mistake you can make is not preparing ahead of time and instead seeking funding when your business needs it most. Always remember that lenders prefer to extend credit to companies that don't need the capital.

Instead of relying on your personal credit ratings every time your company needs funding, you can use your business' credit rating to secure the financing you need with even more favorable terms and lower interest rates. Make 2011 your year for business credit building!

by: Marco Carbajo

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