Please begin typing, and select your location from the list
Get better results and save time by saving your locations. Home, Office, Favorite vacation spot, Grandmas House and more...Create an account | Log In
Recently Searched locations
Trending Articles in Your Area
List: Posted: 09/29/11
As soon as possible, a small business owner should work to build business credit, and move away from using his or her personal credit to accomplish business goals. When you use personal credit for your business, you create a fuzzy line between the two, and that can be risky should your business go under or a credit agent come after you.
However, even with a good personal history score, your business does not have any history just yet. That means the business needs to work to build it before it can obtain a significant line of credit.
There is help, though. Perhaps the first step for a small business to take is to incorporate. Becoming a LLC, or Limited Liability Company, for example, is often the right route to take. It helps to form a line between your personal and business finances.
Tips to Establish Credit For Your Small Business
* Put together a financial plan as part of your business plan. A business plan outlines your financial stability and it shows potential lenders what you can offer to them. A business plan is often something creditors will require of you if you plan to receive a larger loan.
* Get your EIN, or Federal Employer Identification Number. You can also obtain a Dun & Bradstreet (DUNS) number. Both are important to help secure your financial separation from your personal finances. This is also an ideal way to create a credit report for your business.
* Get a company credit card. Your small business needs to use credit in order to build credit. To do this, apply for credit cards meant for smaller businesses. Many major lenders will offer these to consumers with new businesses, especially if you have a good personal credit score. However, as the business grows and develops its own business credit score, it becomes necessary to close those accounts and open new accounts under just your business's EIN number.
* Make sure to contact small business credit bureaus, too. You can register your business here, which helps to show your business's payment history and credit usage.
Always Be Patient
The process of building credit so that you can obtain new loans can take some time. However, nothing will protect the process more so than ensuring you make payments to creditors on time, honor obligations, and avoid borrowing too much.
Even as a small business, you will find success overall if you invest wisely in the process of building business credit. The key is not to spend too much time on the actual offers, as too many cards or new accounts can cause a reduction to your score.
Finally.... give the process time. Just like building your personal credit history, your business needs time to prove itself financially. Once you obtain these loans, whether they come from traditional national lenders, credit unions or your local bank, you will likely find new offers coming in with improved interest rates and credit lines, especially if you make wise credit decisions for your business.
We look at your life through tax - and find ways to help. H&R Block is a global consumer tax services provider that prepares one in every seven U.S. tax returns. H&R Block is global leader in tax preparation services - we've prepared more than 700 million tax returns through retail locations and at-home, digital solutions since 1955. And with approximately 12,000 tax offices in all 50 states, as well as U.S. territories, military bases and abroad, we're always available to help you file your taxes. Find your local Ashburn tax office and schedule an appointment today.
We look at your life through tax - and find ways to help. H&R Block is a global consumer tax services provider that prepares one in every seven U.S. tax returns. H&R Block is global leader in tax preparation services - we've prepared more than 700 million tax returns through retail locations and at-home, digital solutions since 1955. And with approximately 12,000 tax offices in all 50 states, as well as U.S. territories, military bases and abroad, we're always available to help you file your taxes. Find your local Broadlands tax office and schedule an appointment today.
The material in this article is for informational purposes only. The views expressed in this article are those of the author and do not necessarily reflect the views or opinions of Local.com. See Additional Information