Why You Should Start Building Business Credit Now
Before you even think of stepping foot in a bank, you’re going to want to have created a strong business credit rating. Many traditional lenders on the market make it quite difficult for your business to obtain funds if you don’t have it, so building business credit is paramount. Items like loans, business lines of credit, and business credit cards are all often contingent on these factors, with some of the biggest impediments being:
- A low personal credit score.
- A low business credit score.
- Your business having no credit history.
An individual’s credit score is up to 850 points. As a general rule, anything above a 740 is what you want to aim for to in order to get the best rates on loans. A business’ score is calculated up to 100 and anything above 75 is considered to be good. It sounds simple, but this one number is very important to your business.
When you go to a traditional lender, they will often look to a combination of your personal and business credit history. It’s also important to know that they will likely look to your partners as well. As a result, not only should you make sure that you know about the financial history of who you are in business with, but also have a strong business credit report to show to these lenders. Here are some of the major ways you can begin putting together a business credit report to show that you have been building business credit.
Where Do I Begin Creating A Business Credit Report?
- Make sure you have incorporated your business, as your company must be a separate business entity from your personal funds.
- Obtain a federal employer identification number.
- Open bank accounts in the business’ name. These accounts must use the incorporated name established.
- Create a dedicated business phone number and bill it in your business’ name. Make sure to place this number in the Yellow Pages as well as your social media pages.
All of these are the beginning, but you aren’t out of the woods yet. After taking these steps, you are ready to start building your company’s business credit. However, even after all this hard work, you can still get turned down. Your business credit is still limited, which may lead to declined loans. In time, this will change as long as you continue to use your business accounts and be prompt with your payments. But if you have funding needs that are more immediate, you may be out of luck. At the same time, though, alternative products have entered the marketplace to serve this community.
What To Use While Building Business Credit
As you are building business credit, you may need alternative funding sources, and not be able to wait until you used these tips to build your credit up. eBusiness Funding helps businesses that may struggle with traditional lenders. To do this, we provide merchant cash advances. These are accessible to a wider spread of businesses than bank loans or private lenders. 95% of businesses that meet our simple requirements qualify for funding. All you need is to be in business for at least six months, with over $10,000 in monthly revenue. With us, it’s not about past credit history or collateral, but about your business’s potential.
It’s important to us that you use the funds we offer in the most helpful way possible. As a result, so we place no limit on how you spend our advances. Payroll, expansion, repairs, spend on what you need! We also get you your funds fast, sometimes as soon as 72 hours after you first apply. Repayment is also very simple. Rather than large monthly payments, we take a set part of your future sales. This is set up by our skilled consultants. This percentage stays the same, so if business slows down, you pay less.
Interested? All it takes to begin is filling out a simple contact form. We’ll be waiting, and are looking forward to helping your business get the funding support it needs.