As a business owner, you will need funding to help with your business. The adage goes you need money to make money, but where does business credit come into play? Business credit can help you leverage and scale your business as well as help keep your business sustainable.
What is Business Credit?
Business credit like personal credit is a Credit profile but is strictly used for your business. Like personal credit or merchant card advance, it will take time to build as it is not an overnight process, but you can also harm your business credit if you don’t pay your bills on time.
Who Can Use Business Credit?
Any business entity with an EIN number can begin building business credit. Typically, LLC s and corporations make use of business credit. Even though you may have an EIN number there are a few steps to get yourself set up correctly. Here are a few things to keep note of
- Make sure your business is set up correctly
- Get a virtual address
- Make your business known on google my business and 411
- Open a business bank account
- Apply for your Duns number
These are just a few of the steps to help get you started
How to Apply
Once you’ve taken the proper steps to set up your business credit you can start applying for accounts, but don’t apply for too many at one time because inquiries apply to your new credit profile. You may come across different types of credit accounts, but keep in mind it will take time to establish certain types. Below you will find popular business credit accounts.
- Net Terms
- Revolving Credit
- Cash Advance (usually with your merchant account)
These accounts will be beneficial to you as you continue to grow your business credit profile. You can get more information on these different types of accounts here Perks Program.
Do I Need my Personal Credit for Business Credit?
This is a popular topic and a frequently asked question. The answer is both yes and no. The reason why is that certain types of accounts may require a personal guarantee, while others can simply go by your business credit profile. It will depend on the vendor or the issuer of your business account. 5 Star Processing always recommends making sure your credit profile is also in good standing should the need for a personal guarantee arises. If you need help with getting your credit back on track you can get more information here Perks Program.
Building business credit can both be exciting and overwhelming, but at the end of the day, the key is having patience as this is an overnight process. If you have more questions on how to build out your business credit feel free to reach one of our team members at 888-253-9692 or [email protected]