Overcome the Credit Struggles as a New Business Owner
Good credit makes starting a business easier, so do your best to avoid or correct any negative credit issues in your life. Begin establishing credit in your business name as soon as possible. Here’s how:
- Incorporate or form an LLC: Otherwise, This helps establish the separation between your business credit and personal credit. You should also further define your business identity with a business bank account and an EIN (employer ID number for tax filing).
- Register your business with the state: If you have more than one business, make sure you have separate state registration for each.
- Get a business phone number: Having a phone number in your business’s legal name further establishes your credibility as a real business, not just a side gig, and begins building good business credit.
- Open a business credit file: Do so with Dun & Bradstreet®, Equifax Small Business, etc. Check first to see if they have already established a file in your business name.
- Check for errors: Monitor your business credit profile and dispute any wrong information. Credit bureaus don’t automatically track business credit in the same way as personal credit. Be certain that company credit transactions are get documented in your business credit history.
- Establish credit with suppliers or vendors: Request that they report your payment history to credit agencies.
- Avoid using personal credit for business: Look into all your credit and financing options under your business name as soon as you can. You may begin getting credit offers early on, and signing up will start building your credit history, provided you pay on time.
- Look into alternative funding options: Your business could qualify for credit lines or funding, even with a lower credit score. Also, there are other types of financing that depend less upon credit scores and more upon the value of business equipment you may be buying. Equipment financing is just one example.
If you’re interested in a business line of credit or other financing options, designed to grow your business and enhance your credit profile, contact the experts at Fintrus today.