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.

Using Business Credit Cards With Bad Credit

Getting business credit cards is a handy way to get funding quickly without turning to a loan. For this reason, they are popular among business owners with poor credit trying to rebuild. However, misusing this useful tool can hurt you, so it’s important to be smart with your cards. Here are some valuable tips:

What To Do When You Search For A Business Credit Card

Keep an eye out for cards that are labeled “secured credit”. Secured credit cards make for a solid option for those with lower credit scores. Credit cards that have “secured credit” require a deposit and certain fees. While these fees can be large, the intention is to secure the card from being misused. Your approved line of credit will be the amount of your security deposit.

Try to get a low limit credit card. As a general rule of thumb the higher the amount of credit a business credit card allows, the higher your credit score will have to be in order to get one. Some of the lower limit ones will generally have credit lines between $300 and $500. Note that these carry high set up fees, so you may not want to use one unless it’s necessary.

Consider details of the card. Before you choose potential business credit cards, review the details of said card. Make sure that it is the right fit for you and your business needs. Some things to consider are the interest rates, and potential awards like cash-back or credit benefits, as well as your ability to pay bills once you have the card.

Look into business charge cards. Another possible bad credit solution is business charge cards. The major difference here is that you must pay off the balance in full every billing cycle. Since there is no chance of a balance, poor credit won’t hurt you as much when it comes to qualifying. In addition, every time you pay, your credit will improve.

What To Do When You Have A Business Credit Card

Negotiate your balance. Keep in contact with your creditors to negotiate any missed payments or remaining balances you may have. By offering certain payment plans or options, you may have some fees or penalties waived. Taking the time to do this can mean big dividends for your credit bills and score.

Pay your bills on-time. This may sound obvious but it bears repeating— pay all your credit bills on time. Late fees and missed payments can hurt your credit score, but regularly paying on time can help it grow. In addition, these extra fees may cost money that you can’t afford to spend.

Set up reminders. If you have recurring bills or payments, it can pay off to install some form of reminder. This will help you remember when to pay your bills, making sure that you don’t incur any fees or penalties. A business calendar or smartphone app makes for a great choice.

Know your limits. Knowing the limits of your business credit card is essential for getting the best use of it. Overreaching these limits can hurt your score. Here are a few handy rules of thumb:

• Don’t use your card for every purchase.
• Try not max your credit card out each month.
• Avoid using your card for more than 30% of purchases.

Keep cards open. Cancelling your old may seem like a good idea, but doing so can actually hurt your credit score. A better choice business credit cards is keeping them open and using them sparingly to help your credit.

Funding With Merchant Cash Advances

These won’t be viable instructions for every business or every person. For this reason, it’s important to find alternatives to traditional loans like business credit cards when the standby options fall short.

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.

Business Financing With Bad Credit

It’s no secret that bad credit is a major obstacle to obtaining a business loan. Business financing for bad credit can be extremely hard to find as restrictions grow. Don’t get discouraged, though. Modern research shows that there are more funding opportunities out there, some that are under the radar. Don’t think that the high-interest rate loans offered to many with bad credit are all there is. Let’s take a moment to break down what you can use when you have difficult troubles.

The first option may be a traditional bank loan, but what you may favor may be the hardest to get. It’s likely you’ll need to provide collateral for approval of a bank loan.  In addition, you’re likely to have to deal with high interest on the loan. Banks aren’t preferential to businesses with bad credit, and will charge a higher interest rate to cover the higher risk. For some, this still may be the best option out there.  But don’t let a lack of knowledge put you in a corner. Read on for some alternatives.

Alternatives For Bad Credit

Business Credit Cards

If you can secure a credit card for your business, making repayments on time is a good way of rebuilding bad credit.  Note, though, those lending criteria and interest rates are similar to that of a traditional loan. This makes it difficult for businesses with bad credit to gain approval.

Microloans

A microloan is like a traditional loan but from a smaller lender, such as a credit union. It might be slightly easier to obtain a microloan but you generally receive smaller amounts. Not only will you have to deal with a small loan, you’ll also still experience a high-interest rate due to your bad credit.

Home Equity Line Of Credit

This is a risky financial strategy where the bank uses your home as collateral for a loan. This only applies to homeowners and may exclude some business owners. Providing collateral doesn’t necessarily mean you’ll get a generous APR, it just provides some security to the bank.

There are other options out there for business financing, but the further you go away into the alternatives, the further risk you incur in different ways. Securing potential loans with collateral like equipment, homes, cars, or other similar items leave your personal life at risk should your business fail. Having bad credit may close off some areas to you, but don’t think you’re doomed to a bad situation. Merchant cash advances are one such option.

Another Business Financing Choice

eBusiness Funding helps businesses that may struggle with traditional lenders. We also  help those who may be looking for business financing for bad credit but are wary of some of the risks out there. To do this, we provide merchant cash advances that more businesses can use 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, so we place no restrictions 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 an established percentage 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? If you’re ready to begin, all you need to do to start is fill out this simple contact form. We’ll be waiting, and are looking forward to helping your business get the funding support it needs.

Creating an E-commerce Business Line Of Credit

During periods of low cash flow, many business owners will consider applying for a business line of credit. A business line of credit can be a viable means of having access to cash when needed, but along with this advantage comes disadvantages. At the same time, these are often extremely essential for e-commerce businesses. On the whole, they have far more difficulty getting funding from some of the traditional lenders that may perceive them as riskier. Before going into e-commerce applications, let’s explain what a business line of credit is.

What Is A Business Line of Credit?

A business line of credit is a type of business loan designed for helping businesses meet their short-term cash flow needs. Credit is more versatile in usage than other types of funding. Business owners can use this for anything business related. These applications range from operating expenses to purchasing new equipment and payroll. Think of a line of credit as pre-approved access to funds when they are needed.

For repayment, after borrowing from your business line of credit, you must make repayments on the amount borrowed. The amount you repay is contingent on what you borrow. The more you borrow, the higher the repayment amount, and you can not exceed the pre-approved credit limit. Interest rates are generally higher than standard business loans but lower than credit cards.

Depending on the type of business, certain businesses may find a line of credit ideal. Many prefer to save on interest when compared to holding a business credit card. Others prefer the convenience of which having a line of credit provides them. Many businesses will need to seek funding solutions at times. It’s also important to ensure you apply for the financial product that best suits your individual needs. All of these types of issues can appear in an e-commerce business, making a business line of credit appealing. At the same time, though, there are several things that may keep you from getting this credit. Here’re some of the major items you’ll need for a business line of credit.

What You Need:

1. A Good Credit History. Make sure all business accounts such as utilities and bank accounts are in your business name and that invoices are always paid in full on time. This will help slowly build good credit.
2. Cash Flow. Your business will also need to demonstrate positive cash flow prior to approval of a line of credit. This can be a difficult requirement to meet because having a positive cash flow would likely reduce the need for a line of credit.
3. Good Credit. Keep your other business credit accounts in order. Don’t max out your business credit card then apply for a line of credit. This alone can lead to your rejection as it appears to the lender your business is not capable of making repayments.
4. Collateral. Collateral is essential in many cases to secure your line of credit. This provides the lender with a way to recoup if you cannot pay.

A business line of credit is useful, and banks treat them as easy to obtain, convenient and flexible. The reality is they’re often difficult to obtain and not as convenient you may think.

For one, if cash flow is a concern, it doesn’t help to have differing repayment amounts per month. It’s much easier to budget for set repayments each month when cash flow is a concern.

In addition, if your e-commerce business is struggling, this could hurt your chances. Banks still need to see concrete evidence of your ability to make repayments. This makes it very difficult for seasonal businesses to obtain a line of credit unless you can forecast your finance needs well in advance.

A New Option

eBusiness Funding helps businesses that may struggle with traditional lenders. In addition, we work to support those or are unable to qualify for options like a business line of credit. To do this, we provide merchant cash advances that are accessible to a wider spread of businesses than bank loans or private lenders. This combines some of the positives of business lines of credit while missing some of the negatives. 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, so we place no restrictions 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 an established percentage 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? If you’re ready to begin, all you need to do to start is fill out this 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.