If you are in business most likely your personal credit has been your business credit, but did you know that you can establish business credit. Cash challenges are real. We have all been there, needing cash flow to make payroll, purchase inventory, hire new employees and expand but can’t because the capital isn’t available without a personal guarantee. If you a ready to stop giving a personal guarantee on credit for your business, you need to establish business credit. Bank financing is the most affordable financing out there, and when you establish business credit, you become a more secure risk to the bank. The great thing is that it’s not that hard to establish business credit. Most businesses close their doors due to lack of cash flow. In most cases, business owners go into bankruptcy or shut down because they maxed out their personal credit. Once you learn how to establish business credit, a whole new world of financing options will open up to you. No one wants to put up their house as collateral, and once you establish business credit, you won’t need to anymore. Every highly successful company has business credit, so it’s time to learn how to establish business credit so you can grow, your business. What is business credit? Business credit is credit that is obtained in the business’ name. Your business can obtain its own credit profile and credit score. With an established credit score, the business will then qualify for credit. This credit is in the business name and based on the business’ ability to pay, not the business owners. Business credit scores are based only on whether the business pays its bills on time. And in some cases there is no personal credit reporting from the business owner. In other words, you won’t need to provide your personal social security number to establish a credit line. Steps to establish business credit
Benefits of building business credit Better interest rates on loans. Established business credit scores can help business owners secure better interest rates on bank loans. Position your business for better payment terms. Decrease instances where you need to prepay for products or services. Your suppliers will extend credit to businesses with established business credit and you can get better payment terms too. Faster credit approvals. A business owner can obtain credit much faster using their business credit profile versus their personal credit profile. Double the borrowing power. You can double down on your investment in your business because you can utilize the businesses credit and your personal credit to grow your business. Approval limits are much higher on business accounts versus personal accounts. Credit limits on business credit cards are usually 10-100 times higher than consumer credit cards. For those of you who’ve been running your business on credit cards, this is a way to build a path to good business credit and give yourself more options to grow your business. The post How to Establish Business Credit appeared first on Succeed As Your Own Boss. from https://succeedasyourownboss.com/how-to-establish-business-credit/
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AuthorHello I am Teri Crawford 26 years old living in Toronto, Canada. I have recently finished my MBA and planning to start my own business. Archives
November 2018
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