Building Business Credit for Business Owners

Are you a business owner or entrepreneur and still have not separated your personal credit from your business credit? If so, you may find yourself in the same category as most business owners, not quit sure how to build business credit!

Most businesses want to be able to borrow money when they need it, without the owners having to personal guarantee the loans. This means less risk to the owners. Hoping to get a business loan without a personal guarantee is one thing and actually obtaining it is quit another.

The solution is to understand what business credit is and why every business owner should build it. By building business credit every business owner is able to separating business debt and liability from their personal debt and liability. Most importantly, by building business credit a business owner is able to obtain larger amount of business financing at better interest rates.

Before a business owner rushes out in a frantic search of business credit, one must understand that there are no laws protecting business owners from the business credit bureaus! It is imperative to know how to set up business credit properly, but most importantly what to do prior to setting up business credit and in what order to proceed. The reason this is so important is, like personal credit, where someone has the right to dispute in inaccurate information, by law the personal credit bureaus must respond within a certain time period. If a business owner’s business credit is inaccurate or set up improperly, the business owner does not have such protection to dispute inaccurate information.
Make sure that you meet all business credit criteria prior to setting up business credit and before applying for any type of business lending. A business credit profile can be established for a common C- Corporation, S- Corporation or LLC. Don’t bother trying to build business credit to a Sole Proprietor, as most Sole Proprietors are based on the business owner’s social security number and not a tax id number.

Once the business credit is build then the business owner can apply for business financing on obtain credit without personal credit checks or personal guarantees! The stronger and stronger business credit the owner builds the better financing the business is able to obtain.

There will come a time, if not already, that every business owner will need additional financing. If you have taken the responsibility of separating business credit from personal credit then your business will flourish as you will have all the business financing that you need.

Do yourself a favor and start building business credit the right way so when your business needs financing you know where to go to obtain it!