subject: Building Business Credit: How To Get Started [print this page] If you hope to qualify for financing for your business without having to use your personal credit then building a solid company foundation with positive business credit history is mandatory. Here is a brief overview of the steps you will need to take to move you through the process and get your company on the path to obtaining the funding it needs based on its own creditworthiness.
Shelf Corporations
If you think purchasing shelf corporations will open up the credit floodgates for your company think again! These aged corporations provide the perception of years in business which is important in the eyes of lenders and customers. But there is a lot more to building corporate credit then age alone but if you do decide to purchase one make sure it's reasonably priced and at least two years old with no liabilities attached.
Dun & Bradstreet
Once you have a corporation set up and completed all the necessary corporate conformity guidelines including but not limited to 411 listings, verifications and licenses you will be ready to register with Dun & Bradstreet.
Establish Business Credit
Once your registered you will need to establish business credit by first applying for vendor credit accounts with a few well known companies that report. Once you get approved and begin making purchases make sure to pay your invoices on time and monitor your files.
To get listed with Corporate Experian and Small Business Equifax you will need to establish accounts with companies that report to these particular bureaus.
Business Credit Cards
One of the ways you can start establishing business credit is through a secured card. This helps prevent your company from incurring any revolving debt so it's a good place to start but as you continue building corporate credit you may soon qualify for no personal guarantee business credit cards.
If you must apply for business credit cards that requires your personal guarantee be sure that it reports your payment history to your business credit files and not your personal credit reports.
Small Business Loans
Obtaining small business loans can be difficult but it's not impossible. It really depends on the level of bank credit that you have established. I would first focus on securing a business line of credit for your company so you can have the funds readily available when needed. This is much more convenient then having to apply for a loan every time your business needs the funds.
Business Credit Information
Finally you should stay plugged in and up to date with the latest news, resources and business credit information so your company can continue to expand its funding capabilities as well as leverage its diversity of credit.
Building business credit is not something you should spend your precious time or resources trying to figure out. It's simply smart business to utilize a system that can take you through the process. With the right plan and execution of that plan you can expect your company to qualify for business financing without having to put your personal credit and personal assets at risk.
