How to Establish New Business Credit
Would you like to know how you can establish new business credit? Then read on the rest of this article to find out the steps. But first, let’s discuss why it is important to establish business credit history.
Why Establish New Business Credit
If you are a business owner, why should you go out of your way to establish business credit? What are the advantages of having a good business credit history?
It is interesting to know that there are established businesses in the industry today that have yet to build business credit. As a result, it is more difficult for them to get approved for loans from and lenders, so they may need to seek out other business financing options which often have higher interest rates and expensive fees.
Having a good business credit standing will give you an advantage when dealing with banks, creditors, insurers, suppliers, investors and other financial firms. And because all businesses need financing assistance, it would be easier for you to get the support you need if you have business credit. A solid business credit also gives you the opportunity to get the lowest interest rates and flexible repayment terms.
A separate business credit profile also protects your personal credit from damages in case you encounter problems in paying your business debts. Clearly, establishing and building business credit is essential for any business.
How to Establish New Business Credit
Listed below are the steps on establishing new business credit:
Register your business with Dun & Bradstreet. D & B is the major credit tracker for businesses. Sign up with D&B for free and you will be given your unique D-U-N-S number.
Open a business credit account. Look for a credit card for business that will report your payments to the major business credit trackers. Technically, you can acquire a business credit card more easily even without business credit. To build up your credit profile, use your business credit card for your company’s expenses and pay off your monthly charges on time.
Apply for a business bank account. Open a bank account, separate from your personal bank account that you will use exclusively for expenses related to your business.
Incorporate your business. Incorporating your business will give you tax advantages and protect your personal assets from liabilities. There are different types of legal business structures that you can choose from and each one has its own rules on taxes and liabilities so seek advice from a business attorney regarding which structure is best for your business.
Irish Taylor is a bussiness loan consultant with Startup Business Loans and has been providing consumers and business owners with startup business financing since 1992. For years she has helped people with credit and loan problems especially pertaining to business start up, SBA loans and Unsecured loans.
Copyright 2010.
Related Article: Borrowing Money To Build Your Business
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