Small Business Credit Why Even Small Businesses Has To Have Business Credit
You thought one of the many reasons small business owners give to business consultants
and financial advisors when they are asked why they have not established business credit or business funding.The plain fact is that almost every small business one-man show, mom-and-pop, hobby that pays money whatever you want to call it, can benefit by building business credit. This means it benefits you, the small business owner the most!
Establishing business credit is relatively easy and can afford you, and your small business, many benefits right now. Pre-established business credit lines can help your business (and you!) survive a rough patch or finance the growth of your business in ways you did not think possible before.
Three basic steps will get you on your way to establishing a business line of credit:
1. Become a legal business entity. Incorporate your business as a standard corporation (C- or S-), or a limited-liability corporation (LLC), or other incorporation.
2. Make sure you have a business phone at your business address. Banks compare the information you give them with the national 411 directory. Calling 411 is an easy way to verify you are listed correctly.
3. Establish vendor credit lines. If you make a product, this is easy. Develop business credit lines with at least your top five material suppliers. If you do not make anything, you can still develop a line of credit with your office supply store(s), cell phone company, and other business service providers. Cars can and should be purchased or leased by your business, if you can qualify at this point. Office equipment and other equipment can also be leased or purchased to build vendor credit.
Now you have the basics to start expanding your small business credit line. Apply for a business credit card using only your businesss credit information. This means using all business information for credit references, too.
After you have a couple of business credit cards, you can start looking for other small business credit options. Opening a business line of credit with your current bank or other lender is a good next step. This will strengthen your business credit and allow you to borrow even more money in the future. And remember if done correctly these business lines of credit will not show up on your personal credit reports.
Building good small business credit can put $30,000, $100,000, or more into your business. A few years from now, your current small business may not be so small at all.
Pat Gage, The Opportunity Creator, has over 18 years experience in money and finance, business building, real estate investing and marketing. The Opportunity Creator is not only a sought-after business coach but he also is a national speaker, trainer, and life-long entrepreneur who himself has started several companies.
For more information, visit Gages site at http://www.10stepstomoney.com
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