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.

A Better Business Credit Line

People often ask, what is a business credit line? A business credit line allows a business to have access to funding to help supplement cash flow or expand the business. There are several different options out there for a business credit line so you have to do your research. Choosing the right one for you can be difficult.

Business Credit Line Options

• Business Equity Line of Credit

• An equity business credit line can be given with business real estate as collateral.
• This is a smaller amount of funding, typically up to $500,000.

• Business Line of Credit

• A business line of credit offers a much larger line of credit to draw from.
• Collateral is also flexible. Some lines of credit do not require collateral.
• There is an SBA option for a business line of credit up to a certain value.

• Business Credit Card

• You can use your credit card at any time without any questions asked about how you are utilizing the funds.
• You have to be careful how much of your credit line you as it can affect your credit score. The recommended amount is that you try and only use 30% of your credit limit.

A business line of credit is not the only one way to look at having access to immediate funds. Another alternative is a Merchant Cash Advance. This type of funding gets you access to cash quickly, often in just three days.

What is a Merchant Cash Advance?

A Merchant Cash Advance offers businesses the ability to get cash in their hands quickly. Once a business has applied, we can get them approved in just 24 hours. After we know what you have been approved for, we can get the cash into your account in just three days. Our minimum requirements make it easy for you to get funding without the hassle of going through a bank.

With a bank, you are going to need to meet regulatory and compliance standards that have recently been introduced to the financial services industry. Banks are looking for transparency from their borrowers. They will request full access to your business’ financial history. To be less of a risk to a bank, you will need to have been in business for at least two years. They will also look at the type of industry you are in. The steadiness of your income and your profitability statements will also be analyzed. The bank will pull a credit report on both you and your business and analyze your debts. The financial services industry is going to do their complete due diligence to hedge their risk. This due diligence can cause small businesses a major headache. Especially if you are eventually turned down.

A Bank’s Requirements

• A complete business plan
• Collateral
• Credit history for both the owner and the business
• Financial statements from the last few years
• At least two years in business

Our Requirements

• Six months in business
• $10,000 a month in sales revenue

These lists make it simple to us! Why put yourself through the headache of getting turned down by a bank if you don’t meet their complete list of requirements? As long as you hit our two requirements, you have a 95% chance of getting approved with us.

Want to know the best part for the businesses who use our Merchant Cash Advance? We don’t look at your business’ short history as a negative. We also understand that starting a new business can be harmful to your credit score. We care about where your business has the potential to go, instead of looking at some of the mistakes you may have made while learning to operate your business.

Get Started Now

So what are you waiting for? Request your business credit line alternative today and start growing your business later this week. Call eBusiness Funding at 305-985-6604 or complete the contact form on this page.