I will give you the cheat code to get $10,000 in months. I’m going to share my dirty little secrets with you so you can get business credit fast. I will tell you my actual story to see exactly what I did and I’m also going to tell you many things I did wrong so you don’t make those same mistakes. Let’s first talk about business credit versus personal credit because there is a big difference. I need you to understand the two before I can tell you how to get business credit. So first, let me tell you about personal credit. So many of you are familiar with FICO scores, and you’re familiar with TransUnion and Experian, and Equifax. Those are the three credit bureau agencies that report your credit. They have nothing to do with business credit because they are two separate entities.
A tire business credit agency does not exist in the world of personal credit. And that agency is called Dun and Bradstreet. Okay, so again, on the personal side, you have Equifax, TransUnion, and Experian; those are the three credit bureaus that report for your credit, but on the business side, you also have Experian and Equifax. Still, the big company that most people use, and that gets us.
They’ve been around for hundreds of years, Dun and Bradstreet, and there is a big difference between your credit and your business credit. Again, with your credit, they are looking at your trade lines and big at how you use your credit cards and things like that, especially your credit cards. So I’ll give you a major difference between personal and business credit, which is so important.
Personal credit card versus a business credit card
In the business credit model like just say a credit card, a personal credit card versus a business credit card, a personal credit card if you have like $1,000 limit and you spent $1,000 on that credit card even if you make all of the monthly payments and you are doing really well paying the payments, your credit score is going to go to crap because you have used most of the utilization on that card your credit utilization is 100%.
So if you have $1,000 on the credit card and use $1,000, you use 100% of that credit line, and your credit score will tank; they penalize you on the personal criticized for doing things like that. On the business credit side, a business credit card, so you get one for $1,000, is another big difference. That is a tiny line on the business side of personal credit, but that’s fine.
But on the business side, they usually give you more. They give you higher limits. Usually, that’s the first thing, but when you use a credit card, they do not penalize you for maxing it out the same way they do with personal credit so that you can make and it’s $1,000. We’ll use that same example, and you charge $1,000 On the business side when they report it as long as you make the payments. They will be like Yay, good job business; you can pay your debts. They care about how you manage your debt. But on the personal side, they care that you are not using your debt. They want you to be very careful. They care about things about debt ratio, just in a different world. And some of the things you do on the personal side, you’re rewarded on the business side.
Also Read: How Do Merchant Accounts Work?
Get your business registered
The business side has so much to offer. And if you feel bad because you have bad personal credit, I can tell you not to feel bad. We have a solution for you. Now that you understand the difference between personal credit and business credit, let’s dig into how to build your business credit because, again, if you have bad personal credit, we’re not even going to worry about that; we are just going to ignore that, and we’re going to start talking about how to get some good business credit built, so you don’t even care about your bad personal credit.
Well, not for right now. Anyway. So let’s talk about what you need. These are the must-haves to start building your business credit. You have to have your business registered, that you’re in. Okay, so if you don’t have an LLC, or you don’t have your S corp or C Corp or your DBA or whatever you don’t have, you don’t have your business registered. It would help if you had your business registered. That is clear-cut step one. Okay, they move in, and they get your business registered.
And next, once you do that, the next steps are super easy. Most of them are free. You want to get an EIN with irs.gov. You want to go ahead and get an email, you want to get a phone number, you want to get a business website. Again, they do your business; the funny part is that it does not take very long. I have students that can put their whole business together in a matter of days. Okay. And in some cases, it’s not even days as hours, depending on what state you’re in.
Because you could go online and fill out all the paperwork to register your business in some states. You have to wait a few days. If you’re from certain states, you can get all of this done matter of hours, and you can have an established business already set up that you can get credit to; wow, when you do this, it becomes its entity. Okay, as a person with your social security number, you’re an entity. You’re recognized as a thing. But if you create a business like I have my business, and it’s its entity, it’s almost like it’s rehearsing. It can borrow money; it can pay debts.
The great thing about it is that this is something you can duplicate repeatedly. Once you have one social security number, getting another one is illegal. But suppose you have a business and set it up, and you get business credit. You can repeat that step in that case, and I have students with two or three businesses. They have millions of dollars in funding just by repeating what I’m teaching you. You do it one time, and then you duplicate the process. So let’s get to the next step. The next step isn’t easy because this is how you can get business credit. These people will lend you money, you with bad credit.
They will lend you money, and they will lend your business money. And some of those companies right now are PayPal Square and Kabbage, and that’s kabbage with a K. Those three companies right now are what we call subprime lenders in a sense because they are lending startup companies that are not two years old companies where the owner the business does not have great personal credit, they are lending you money, okay?
And the key to this is you have to have transactions with them. Okay, so once you set up your PayPal business, your Square business account, and your Kabbage account again, it all has to be business because some of them will ask you if you want to set up a personal or if you want to set up a business profile. You want to set up a business profile, which is why I told you to do that other stuff before because if you don’t have a business, EIN, and all this stuff.
Then you’re not going to have anything to fill in. But it’s super easy to get those things done, and it’s super easy to apply and start opening up those accounts which have given examples because I just had a student let me tell you what they did. So they started their business about six months ago, okay, this guy, and he works full time. So it’s not like he had tons of time or money, but he had personal credit that was not good, and I told him, it’s okay if you have bad credit, don’t worry about that.
I used to have bad credit. I don’t hear that. That’s not like a minute stamp bad credit. You do not have that credit for your whole life. You don’t have to. It’s up to you. So he’s like, Are you sure we’ve worked through this? So what he did was what I just told you went out of business license, and he set it up with PayPal. And then, he was able to do some partnerships with a few people where he was able to send them some invoices, they paid his invoices, and so he was able to create some transactions in his business. And again, you don’t need a lot of transactions. PayPal wants to see that you’re using their service. And I’m going to tell you why. Because it’s kind of funny, they make money off of you.
That’s the big secret to this. So, for example, when you set up your business account with PayPal and start using and sending invoices, every time someone pays one of your invoices, they will charge a fee. Okay, so giving you a raw example, you send a PayPal invoice to somebody, which is for $500. You’re only going to get like $490. Their fee is like 3%, So you’re not going to get the whole 500. PayPal receives money every time someone pays with a credit card, and that’s how they make their money. But do not feel ashamed about that. Do not get mad about that.
That is okay because they have done a remarkable thing. They have lots and lots of money; this company, PayPal, owns eBay. Remember, PayPal used to be owned by Elon Musk and is a significant, significantly cash, cash-heavy company. They have a lot of money. So they were brilliant. And what they started to do is they began to lend that money back to the people that were using the service. So if you are one of those people, you start using their service after three months, literally three months, they sent my student a working capital loan; they have two different types of net working capital and a loan builder. They sent him an application after three months, and he got $10,000 in his business’s name, no personal guarantee. So this is straightforward stuff to do. And again, he had a very low credit score.
We know it is less than 600 because I saw it for myself, so this is easy. It is easy. You have to get it done. Alright, I’ll give you another secret because that was amazing. And again, I had a student who just got $10,000, and I will provide you with another one. My student just got 1500, and this was just three days ago.
Okay, you’ve heard of secured savings accounts since it’s super easy to have. Well, you can get a loan. It’s called a secured loan against your savings account. When you open up your business checking account, make sure you open up your business savings account if you can, and in many cases, so say, for example, you have just $1,000. Maybe you have it in a 401 K you have it saved, put it in that savings account, and then they will loan you that money back. Okay. They do not care about your credit score.
So it’s called a secured Savings Loan. They do this with savings accounts, and some companies and some banks do it with checking accounts; not all, but almost all do with savings accounts. And many companies, like Sorry, credit unions, also do them against CDs. So if you don’t, your significant banks like Wells Fargo, Chase, and Bank of America will do it against the savings accounts. And trust me, I have that in them.
I have two right now because if you ever need to boost your credit, this is a way to extend your credit. After all, it’s an installment loan. That is a fantastic thing. So I’m not going to get into all the different types of loans, but remember, there are unsecured credit cards.
There are installment loans, like your car note, and they all have different values. Installment loans are good for your credit. And this is an easy way to get one with bad credit. I had a student who put $1,500 into the savings account and got a loan in the business’s name for $1,500. Again, they’ll lend you the same money back. So again, he gives it to them, he signs a loan, he has to pay them, I think $80 per month, and then they hand him back the $1,500, and now I was reporting on his credit report.
And this is the easy one. I’ve talked about this one a lot. This is vendor credit. Another quick way to build business credit, and when you have bad personal credit, is to go ahead and get some vendor accounts. But the key to this is they need to report to the credit bureaus, okay?
So just because someone will say, alright, you know, you can pay me in 30 days, or say, for example, you’re going to have some T-shirts printed up, and you’re going to use this company, they’re going to print out some T-shirts, and they’ll say okay, you can pay me in 30 days or convenience 60 days. That’s great because they did extend you credit. But, still, it is excellent if they report to the credit bureau because you want credit for everything you do. After all, you will try to get this business credit built up quickly. And so here’s what I recommend.
There are three companies out there that I know for a fact report to Dun and Bradstreet, and they give money to startups. I have students that are getting, you know, vendor credit from them on day one where they’re like, Okay, here’s a net 30 and just giving it to them immediately. Okay, and that is Uline Quill, Granger. Okay, those are my top three.
We know all three of those companies report to Dun and Bradstreet. You can make just a small purchase. It has to be at least $50 for them to report, and it can even be a cash transaction. So even if they won’t extend your credit, they will still report that transaction to the credit bureaus, and it works. Okay, guys, this is amazing. And this will help you build your credit fast. And then once you get those credit trade lines to report, you can go to the next level and start getting gas cards like Chevron Texaco, you know, those fleet cards they’ll give out pretty quickly. Then Amazon, Walmart, and a few others are right behind it. And the sky’s the limit that I also have students that are looking after they do those three rounds.
Getting to the third round probably retakes about three to six months because this is bad credit. If you have good credit, it takes less time. Still, we’re talking about crap credit, low credit scores, you’re going to take it’s going to take you three to six months to get to this next level where they’re giving you those chases and those other things without a personal guarantee. Okay, so because that’s what you want. The great thing about business credit is you can get it with a personal guarantee, but that usually requires good personal credit, and that’s what you’ve probably all heard about wherever you guys like; oh, you need good credit. No, you don’t. Some places do not require a personal guarantee. You have to go about it correctly and already have some tradelines.
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