Did you know that almost 9 out of 10 business owners start a business based off of their personal credit! They use their own saving to invest as start up capital then they personally guarantee business loans and lines of credit.
If you know how to separate your personal credit from your business credit you can separate the personal liability from the business. There is a simply and proven path to establishing business credit that must be followed if you are a business owner.
By establishing business credit, your chances of obtaining business financing will increase by over 250%!
As an expert in building business credit and the business credit industry, it has been my experience that less then 5% of entrepreneurs or business owners truly know what business credit is and how to establish business credit.
Last month I was speaking at a real estate investment seminar and was not surprised by how many business owners in the room came up to me afterwards and expressed their concern for starting a business incorrectly by not separating their personal credit from their business credit.
Many of them mentioned that they had anywhere from 3-9 properties in their personal name, which was negatively effecting their personal credit history. We spoke about the many benefits of business credit, mainly, the possibility of purchasing real estate under the corporation name without it showing up on their personal credit report.
We spoke about the possibility of obtaining additional financing to fund their real estate deals or other businesses. The one thing everyone had in common was not enough funding! They knew what to do with the funding; they just were not able to obtain it.
By establishing business credit you will be able to literally obtain unlimited financing and eventually obtain it without a personal guarantee!
One thing is certain, if you don’t establish business credit you damage your personal credit, put your family at risk and dramatically lower the possibly of funding and business success!
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2 comments:
Cool post. I'll keep this one in mind because I'm looking to run a business soon. I'm ready for the challenge, but I can still use all the help and advice I can get. Lately I've been thinking about buying a business instead of starting one from scratch. Maybe a franchise? I'm not sure. Any suggestions? Advice? Thanks!
@Jenny -- There are a lot of resources online that you can check out if you're strongly considering to buy a business. There's one called BizTrader.com, which is an online global marketplace where you can buy and sell businesses. It has a bunch of different resources, and you can also use it to find a lender, broker, etc.
Then there are always books, magazines, and local small business groups that can provide helpful advice.
Good luck!
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