subject: Credit Options For Starting A Business [print this page] Register your business as a legal business entity. DBAs do not qualify for business loans. You should also have a business phone listing that matches your businesss physical address. Lending institutions use the national 411 directory to verify this information. Finally, develop a line of credit with your vendors and service providers.
But, you think, I need the money from the loan to do these things! Lenders understand this and offer credit for business start-up. To get this type of loan, you will have to have a sound business plan that includes how you intend to spend the start-up money (equipment, staff, computers, utilities, etc.). Show how you will make money with the financing from their loan. A good source for these types of loans is the SBA. You will need a good personal credit rating in the beginning, unless you use one of the various bad credit business loans available.
You should also get business credit cards by using your businesss information. To build your business credit, you want business credit cards with your business name on it. It is very important that this be a business card, not one with your personal name on it, to help your business establish credit.
You can and should apply for a business line of credit, even before you pay off your initial start-up business loan. By establishing this additional business credit line, you offer yourself some financial protection should your business need it in the future. If you wait to apply for a line of credit until you need it, your business will be less apt to qualify.
If your business needs more capital than your unsecured line of credit can provide, there is even a secured business line of credit option. This line of credit is secured by the collateral you have in your business. A secured business credit line is similar to a home equity line of credit, with a couple of exceptions. You can get a higher capital amount with a secured business line of credit. Plus you would never want to use your personal home equity to fund your business. This is not a good business practice. You would then be commingling funds and lose business tax benefits as well.
When starting your business, start building your business credit profile at the same time. Soon, you will qualify for working capital credit lines that can take your company to the next level.
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.10steps2moneysystem.com
by: Patrick Gage
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