subject: Building Business Credit: The 20 Essential Questions To Focus On [print this page] Do you know where your business stands in the business credit building process?
One of the most important things you should first learn to do is ask the right questions. One of the classic mistakes that many business owners tend to make is moving forward in establishing credit for their business without having the proper framework in place.
Instead you can end up feeling scattered and spend lots of time trying to back track and correct mistakes you've made. These mistakes can cost you higher rates of interest, reduced credit and loan amounts, and even impact your personal credit scores. Without properly separating your personal credit from business credit you can even jeopardize the protection of the corporate veil which may end up putting your personal assets at risk.
So in order to help you prevent from making those costly mistakes here are 20 essential questions you should focus on:
1) How long has your company been in business?
2) Does your company have a business plan?
3) How many employees are working for your company?
4) Does your company accept credit cards? If so, what's your total amount of credit card sales?
5) What are your company's gross monthly revenues?
6) How do you operate your business? (i.e., corporation, LLC, etc.)
7) Does your company have a Federal Tax Identification number?
8) Does your company have the "required" licenses and/or permits to operate legally?
9) Does your company have a commercial address?
10) Is your business phone number listed with directory assistance?
11) Does your company have a small business bank account?
12) Does your company have a "low 5" bank rating?
13) Does your company have a website and dedicated email address?
14) Does your company have a DUNS number?
15) Does your company have vendor lines of credit (trade credit)?
16) Does your company have a Paydex Score?
17) Does your company have an Intelliscore?
18) Does your company have a Small Business Credit Risk Score?
19) Does your company have a strong blend of account types reporting on its credit files?
20) Does your company have a reporting bank loan or line of credit?
Each of these questions serves a unique purpose and should not be taken lightly because it impacts your company's ability to obtain credit. By answering these questions you should have a much better perspective of where your business stands in the process.
Use these questions as a reference point as you work your way through the process and you may want to consider utilizing a system that can track all your progress which can save you a great deal of time.
Keep in mind it is a process and building business credit is not something that happens overnight. So stay focused and consistent as you work your way to establishing your company's creditworthiness.
