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.

The Value of Building Business Credit

Building business credit is something many businesses struggle with. It can sometimes be hard enough to make ends meet without worrying about your business credit. However, this doesn’t mean that it is impossible, in fact, you’ll need to learn how to be effective in multitasking in order to be successful. Here are a few tips to help you improve your business’s credit rating and secure outside funding at the same time.

Watch Your Personal Credit Rating

Many banks take into account your personal credit rating when lending funds. If your personal credit rating is positive that will serve to support your business finance application. It’s not enough for you to be timely with your payments. Also, try to ensure your personal credit cards carry a low balance. As a guideline, only use up to 30% of your available credit at any one time and try to repay on time or in advance.

Only Apply For Credit When You Need It

Many people apply for credit, either personal or business credit, “just in case”. Many also apply for unnecessary reasons. Save your credit applications for when it’s absolutely needed otherwise you risk building up a record of continually applying for credit and continually appearing to be in and out of debt.

Start Small

If you haven’t applied for credit before and would like to in order to start building a credit score start small. Rather than your first application being to a bank for a large amount consider starting small instead. Apply for a small limit on a store card and ensure you always make payments on time.

Keep Updated Records

Update your records with the major reporting bureaus such as Dun and Bradstreet, Experian and Equifax. Periodically apply for a copy of your credit report to ensure it’s up to date and has all the relevant history recorded on your profile.

Set Up Trade Lines With Suppliers

You will need at least three trade lines in order to obtain a Paydex score from Dun and Bradstreet. A Paydex score measures your payment history. Even smaller suppliers, like water suppliers or office stationary suppliers, can be valuable. While they may not report to the lending bureaus you can provide them as a reference when applying for funds.

Mind Your Credit

Once you’ve built up a good credit score use it and don’t abuse it. A good credit score doesn’t mean it’s time to go bananas applying for credit. Treat your credit score with respect as it can take years to improve.

Building business credit isn’t always a quick nor easy process, but it is worthwhile in the long run. With the practical tips suggested above your business can soon be on the way to improving its credit history.

What if I need funds before then?

At eBusiness Funding, we know that building business credit is a long-term process. This is especially true if you’re trying to restore credit after past issues. As a result, we offer funding services that can get you funding for your business quickly. Also, it is your potential that helps you qualify, not your credit history or collateral.

95% of businesses that meet our minimum requirements qualify. These requirements are very simple—all you need is to be in business for at least 6 months and bring in $10,000 in monthly revenue. We also can have your funds deposited in your bank account as soon as 72 hours after you apply.

Interested in working with us? Fill out the contact form on this page for essential funding support while you work on building your business’s credit.