Business Credit Lending
Being an entrepreneur, there are many unique chances for you to build, preserve, and have credit in both individual and business owner.
This option can help you start your own business that is easy.
Before anything else, let us first talk about business credit score. The business credit scores vary on a scale from 0 to 100 with 75 or more as the excellent rating. It is essential to understand that there are many factors that affect a credit score. It is not just based on whether you pay your bills on time or not but the amount of existing credit you have on bank lines of credit and credit card is also considered. Credit score is also affected from other factors like the span of time that you have a credit profile, the number of investigation made on your profile and many other more.
Now there are several steps that you require for you to set up your own business credit and profile. Here are the steps:
- You should develop a corporation or LLC to manage your business than building your business as a single proprietorship or partnership for the reason that if you have a single proprietorship or partnership, your personal credit information might be incorporated on your business credit report or vice versa. Also, if you are have a single proprietor or partner in a partnership, you yourself are responsible for the debts of your business and your entire personal assets is at risk in case of legal action.
- You should enlist your company with the business credit bureaus.
- You must abide with the business credit requirements. It is very essential for different businesses to comply with all the requirements of the credit market so that you can ensure a high percentage of credit approval. Actually, if you do not comply with the credit market, they can raise red flags with both credit bureaus and grantors. The red flag compose of different things like not having a business license or a phone line. Many businesses would not give credit to other business that didn’t comply on setting the company up with the appropriate licenses and other requirements.
- You must have a financial statements and a professional business plan. These said documents are needed by various credit grantors.
- You must find a company that is willing to give credit to your business even if you don’t have a personal credit check or guarantee. If a company gives you business credit, be sure that they report your payment experiences to the business credit bureau to assist you in building your business credit report and also a financial foundation for your company.
- Handle your debt so that you won’t go into trouble in making your payments because this will greatly affect your credit score negatively.
- Have monthly payments to credit grantors to maintain your business credit profile active.