Most companies want to be able to borrow money when
need it, without the owners having to personally guarantee the
loans This means less risk for homeowners. Hoping to get a
business loan without a personal guarantee is one thing and
actually getting it is quitting another.
Too many business owners come to us at the last minute trying to
obtain additional financing. They constantly bring us closer
business owners asking how to get business financing, and
more importantly, how to get it without a staff
to guarantee! We see how successful businesses are rejected
for funding because they haven’t taken the time to establish
business credit correctly.
More vital is after business credit is established, who should
the commercial contact to obtain financing? Let me also say one
thing, there is a common mistake, good business credit
will overcome bad personal credit. In most cases, this is
it just isn’t true. It is important to have a good personal credit
and good business credit.
Let’s face it, banks are not donation centers! They will be
looking at both business credit and personal credit
of business owners. Just because a business owner
have a large business credit does not mean that the bank
Completely ignore negative personal credit.
Part of building a good, solid business is taking care
Both business credit and personal credit. Although, building
business credit is totally different than personal construction
credit. With business credit, you’ll need to make sure
has a suitable business entity established. You will need to
make sure it’s a real business. By that I mean I should
have the proper licenses and permits to operate in your
local jurisdiction. You will also need to have a real
Address. It’s not a post office box! You will need to configure the phone
correctly so that commercial credit bureaus can
verify that you are really in business.
You will need to do business with companies that report to
business credit bureaus. There are more than 500,000 companies.
that extend credit and fewer than 10,000 actually report to
business credit bureaus. If you are doing business with
whoever does not report it does nothing to establish
commercial references.
The best advice I can give you is to start now! the point that
your business needs the money this is not the time to start
business credit creation. Start before you need it so that when
You need it, it’s available. Remember, the most important
Part of building and operating a successful business is
laying the groundwork and business credit is part of that
base that must be set correctly at the beginning.
Let me give you a couple of words of warning!
1. Do not try to buy
credit. There are some companies that will try to sell
business referrals for a large sum of money. This is a fraud
and as soon as the credit bureaus find out, they’ll put your
company in “High Risk” status.
2. You do not need to spend large sums of money on “Shelf
Corporations” or “Aged Corporations”, shelf corporations have
its place and can be a benefit, but it can also build
commercial credit and obtain financing to a brand new
corporation.
3. Don’t try to substitute good business credit for bad
personal credit Spending the necessary time and money to repair
your personal credit while building your business credit.
Do yourself a favor and start building business credit
correct way so that when your business needs financing you know
where to go to get it!