How Do I Build my Business Credit

The best way to build your business credit is to establish your business name under a Corporation /LLC, by doing that it can have its own credit profile, this will allow you to qualify for business loans, leases, and business credit without harming your personal credit score even if you have poor credit or bankruptcy. The next thing would be to start a line of business credit with a Office Supply Store, like Office Depot, Staples etc. By establishing good credit with these vendors will set the stage for bigger business credit lines and loans because of your on time payments that have been reported your company has now established, so the risk to the lenders is far less.

In the loan process the lenders want to see the following:

• Business summary Purpose of the loan
• Personal profile How much money you will need
• Loan proposal Management profile
• Support documentation Loan equipment
• Business plan (with financials)

Make sure that your business creditors report your on time payments to the business credit bureaus, and not the personal credit bureaus. By having a high business credit score, this in terms multiplies your chance of approval and the size of business credit lines that you will receive.

Mistakes made by business owners when trying to establish business credit:

• Not incorporating your business
• Using your personal credit to finance your business
• A personal guarantee that allows the creditor to attach your personal assets
• Not being incompliance with the credit bureau
• Applying for loans without establishing payment history

Once you have established your business credit you will be able to:

• Get lower interest rates
• Do business on credit instead of cash
• Improve your loan credibility with vendors
• Increase your loan approvals