Many small businesses could benefit from having additional capital available to free up their cash flow, but sadly most will never know that they can establish and build business credit for their business without using their personal credit.
There are 3 critical things any small business can do to ensure they are building business credit.
Beware of “business” credit cards
Do not apply for credit cards that say they are “business credit” cards if the application asks for your personal information, such as your social security number. This is a dead giveaway that it is a personal credit card masquerading as a business credit card.
Prepare your business documents
Make sure your small business is set up right from the start. That means properly filing your articles of corporation with the secretary of state in the state in which you do business, as well as filing with the IRS for a tax identification number (sometimes called an EIN number). This data is critical to completing a true business credit application.
List your business correctly
Make sure your business is listed with commercial credit reporting agencies like Dun and Bradstreet. You can visit them at dnb.com and see if your company is already listed in their system.
Establishing and building business credit is the most important thing you can do to help grow your business. Following these critical steps will help ensure that you can build adequate business credit.
Having these things in place for your small business before applying for a business loan or line of credit can mean the difference between being approved or denied.
