How To Build Business Credit
So many business owners fail at establishing business credit due to fact most have no idea how to approach the idea of achieving business credit credibility.
The lenders care about one thing:
Are you attractive on paper?
That is truthfully the only thing any lender will ever worry about. All lenders measure risk in an effort to help them reduce the default rate a prospective client could have. They do this by measuring the “fundability” of a business.
Here’s five quick tips to help you establish your business credit in the quickest fashion
1. Ensure everything in your business is set up. You must be in a position to receive credit in the first place before you apply. This includes a 20 point checklist a few of them are: ensure you have an EIN number, ensure you an incorporated, ensure you have an 800 number and ensure you are listed in the 411 directory.
There are 16 other points such as this that a business owner must have in place to qualify for any type of financing. We know because we have the lending guildelines from over 2000 lenders!
Part of the reason lending institutions require such information is due to the fact that so many people apply for business financing and small business loans who, quite frankly, have no business applying. This helps weed out many business owners who simply will never receive financing for their small business.
2. Start with vendor accounts. Vendor accounts, unlike revolving accounts, are typically set up with net 30 terms. This requires the business owners to pay, in full, the balance at the end of each month on the amount allotted by the vendor. Many vendors including staples, home depot, radio shack, Uline shipping etc, all have vendor accounts that can be set up for any type of business owner. We have the exact underwriting guidelines for these plus 300 other vendors in our business credit program. Therefore the business owner will always be approved for the vendor account before they even apply.
3. Access your Duns Account and Duns number to ensure your vendor tradelines are reporting. Unless you know how to set this up, Dun and Bradstreet can charge anywhere from $700- $1500 to get a business owner set up. They like to couple products and programs in an effort to squeeze the business owner’s cash. The truth is, through our business finance suite business owners can be set up with a Duns account for free. This virtually covers the cost of the system.