Business Credit- How to Get it?


 A lot of people that I talk to ask me, "Who will give my business credit?".

Having business credit will help you to purchase the tools, equipment, and supplies that you may need to help you to grow your business. 

But, in order to get business credit, your business needs to Be Separate from you.  Also, the business needs to have a proven track record of purchasing items on credit and repaying them ON TIME and/or IN FULL each month.  In other words,  Have its own Credit Score.

As you know, a Credit Score is given to people/businesses and is attached to the NAME and TAX ID of the person/business for all to review and decide whether or not more CREDIT can be issued.

First Step

If you want to establish business credit and have established your business as a sole proprietor, the FIRST STEP you need to take is to Separate You from Your Business. 

You can do this by forming a separate legal entity such as a Corporation or an LLC to allow your business to begin building a credit identity with the business credit reporting agencies to establish a business credit profile. 

Once you form a separate legal entity, your business would receive its own NAME and TAX ID and STAND ALONE.

Second Step



After you have properly separated your business and are now a NEW LEGAL ENTITY, the SECOND STEP is to apply for credit in your company's name.  

Types of Business Credit to apply for

Below are several basic types of business credit you can APPLY FOR and very likely receive in the early stages of establishing your business:

  1. Service credit - Setting up one or more utility payments for internet, cell phone, satellite TV, etc. under your business name will help you to build credit.
  2. Retail credit - You would get this from stores who offer credit cards to buy things like fuel, office supplies, etc. that you regularly and frequently use in your business. These cards are usually only allowed to be used at a specific store. 
  3. Business Credit Cards - You would apply to a bank or credit union under your business's NAME and TAX ID and be sure that it ONLY reports to the business credit agencies.
  4. Vendor credit - By purchasing products or services from various providers on short term financing for items that you may regularly sell in your business will help to build your credit.
  5. Supplier credit - This is similar to vendor credit in that your business sells products that they acquire from others. They will sometimes grant you at least a 30 day grace period to pay their invoice for the supplies.

By establishing business credit, a bank, lender, supplier, retailer, insurer, and investor will be able to assess the viability and creditworthiness of your business which will ultimately impact the amount of credit, payment terms, interest rates and insurance premiums that your business will pay.

Call me today for information on the least expensive and correct way to start and manage an LLC or a Corporation.  It is important for you to have a full understanding of all the options available so you will successfully establish your business.

Take care and I look forward to hearing from you,

Bonnie Dorsey
972-672-8850
Dorseytaxplace@gmail.com
www.Dorseytaxplace.com



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