Question by Andrew D: Personal credit score is to “FICO” as Business credit score is to What?
I have heard it before and I can’t remember what it’s called. It’s on the tip of my tongue…
Tom Mckenzie – Two Tips For Building Commercial Credit
Two Tips For Building Commercial Credit
There is an increasing need for commercial credit especially since the banks are slowly increasing lending. Commercial Credit is the process of using only the business Tax ID Number or Articles of Incorporation in place of a personal guarantor.
During the 90’s commercial credit was as common as traditional credit, but only for those in the know. For years corporation have enjoy the ability to buy items in the business name without using the personal credit of the CEO or Board Members. This system works well as long as the organization is financially solvent, and can pay all invoices as scheduled.
Commercial credit can be a valuable asset for small business owners because of its ability to separate their personal credit from the business expenses. One of the major challenges for small business owners is how to get the items they need without overextending their personal credit. Another benefit of commercial credit is it allows small business owners to count installments payments from commercial accounts as business expenses at tax time.
Listed below are two accounts that you can apply for today using only your tax id number and articles of incorporation. If you pay these accounts before the bill is actually due then both of them will report the payments to Experian. Once you’re in Experian then the Doors of Credit will open to your business.
Two Business Credit Accounts You Can Open Today
AT&T Cell Phone Account – AT&T has a new initiative that is very welcoming to small business owners if you need Blackberry’s from your staff. All that is required as of the date of this article (today’s date June 25, 2010, their policies are subject to change) is your TIN and Articles of Incorporation. I can’t stress how important it is to pay this account on time, it can work wonders for your rating in Experian.
Chevron Gas Card Account– Chevron loves small business owners, especially companies with multiple vehicles. No personal guarantor is required for established business, however they prefer if you use over 00 worth of fuel charges per month. This is another commercial account that can get you into Experian, which is the only credit bureau that matters for commercial credit.
Please keep in mind that there is no need to pay a company to get you commercial credit, and having a DUN’s number is overrated. I have found that most of these companies over charge for something you can do yourself, so get started building your commercial credit on your own.
Question by Jo Man: Business credit card for a freelancer / sole-proprietor?
My wife and I have a small side business and we’re thinking of opening a business card to keep those purchases separate from our personal spending. We’re not incorporated, but it seems I can still apply for “business” cards – is this a good idea vs. another personal card? Or are business cards on personal credit essentially the same as a personal one?
Best answer:
Answer by Floppy Well since you mentioned Sole Proprietor the difference may be not to big. In todays society you often can get every business card by telling the Card Issuer that you are the sole proprietor which means anyway it goes it will reflect in your credit. Anyway the big difference in having a business vs. personal account are the rewards and the APR. Usually Business Cards have a lower APR and higher reward. American Express for example offers more features on a business account than an individuell account (I just got the Amex Platinum & Platinum Business offered). A business card will certainly pay off in the long run compared to an individual card. So if you can go with a Business Card do it. Due to personal experience I highly recommend American Express. In my opinion there is nothing better out there and believe me, I am addicted to credit and love to know every single thing about credit cards.
If you are a small business owner then the best way to establish credit is by applying for a business credit card. By completing a business credit card application in the name of your business you are now building credit for the business and are more likely to receive favorable terms as far as interest rates and lines of credit are concerned.
These days, easily accessible credit has become an indispensable part of many businesses day to day fiscal operations. Because of this, businesses both large and small can find offers that are virtually specialized to meet their specific needs. So, business credit cards are available from a range of lenders, and these cards offer set credit limits to businesses, and enable businesses to make purchases up to the agreed limit and then spread the repayments by making a minimum repayment each month. These business credit cards are not tied to personal credit.
Business credit cards offer unique business oriented benefits and generally offer high lines of credit. These credit cards can offer rewards, savings on business products and services and the purchasing power of a credit card. Business credit cards will help your business grow; there is no doubt about it. Business owners also understand that securing a business credit card early on in the life of the business, helps the business to build its credit track record; and that the sooner a track record is established, the sooner the business will be able to carry the business credit card liabilities on its own.
Business credit cards are allocated for business use only and provide a simple track record of company expenses. Credit cards for businesses in general, and for small business in particular, have become increasingly popular as more and more businesses started realizing the benefits. Business credit cards have become popular as a source of financing for small businesses, since business credit card issuers often give up to 60 days in which you can pay the full statement amount, which can help your cash flow considerably. Business credit cards have gradually become one of the most common forms of business credit that assists businesses meet their urgent requirements, even when there is a deficiency of cash. Business, both large and small, are no different from private consumers when it comes to the benefits of credit cards, and many businesses rely on the convenience and flexibility of these cards in order to aid the smooth running of their finances. These credit cards open valuable avenues of financial assistance in the future through the bank or company that issued the small business credit line.
Business credit cards often secure preferential exchange rates to the business traveler. Card holders sometimes qualify for frequent miles or discounts on certain flights and at certain hotels. Business credit card issuers also arrange for worldwide emergency and travel assistance.
Business credit cards offering zero percent interest rates and reward rich incentives are advertised widely and business credit cards are going to be more widely marketed to small business owners in upcoming months.
As you can see, business credit cards are a wonderful thing if used properly and are a must for business people.
So, if you have a business do not put it off any longer, get a business credit card and save more time and money for your company today.
Art Taylor has been a successful internet marketer for 10 years. He writes articles about credit cards and other topics. For more information or to apply for credit cards visit his websites at: Ecreditcardworld or Eshopperworld.
16 Real Answers to Your Business Credit Questions Ilya Bodner Initial Underwriting
Ilya Bodner is a successful entrepreneur and owner of Initial Underwiting Group, an organization that underwrites business loans for owners that are ready to start up or expand a small business. In a recent interview, Mr. Bodner answered some of the most frequently asked questions that are on the minds of business owners when they need financing and commercial loans.
How did you get involved in business credit?
I needed to raise money for my first business venture; being young and just out of college my personal credit could not support 0,000 loan. I found out about Dun & Bradstreet and spent 3 years carefully learning its methods and lenders that use that information.
Why did you decide to help small businesses obtain loans?
I got 0k for my own business through the use of business credit, realized that a lot of business owners don’t know about business credit and decided to cater to the demand.
What is the worst mistake you see small business owners make?
Being undercapitalized – Worst mistake is not to plan for unpredicted expenses, loose projections, and shift in demand; which all contributes to increased spending and lowered sales.
Do you think it is fine for new business owners to borrow money from people they know?
No, I don’t think it is fine to borrow from people you know – If you undercapitalize, you tend to go to friends and family for immediate money. Otherwise, borrowing with caution and enough reserves to pay back in case of total loss, is the only acceptable method of borrowing from your loved ones.
Do you see a trend in why small business owners get rejected for loans?
High Risk – the lenders see a small business owner as a renegade who may or may not pay back the loan + interest. 3 out of 4 businesses don’t survive; and the small percentage of small businesses that do survive end up defaulting at some point.
Is there a way to apply for a business loan without revealing your personal credit history?
Yes, some banks offer business credit based programs.
In your experience do you see business owners without business credit, get lines of credit and business credit cards?
Yes, they take the steps to establish a strong business credit profile and go to the right lenders.
Can a business owner apply for a business loan if they declared bankruptcy sometime in the past?
Yes, only if a strong business credit profile already exists. Apply with a lender that offers business credit-based financing.
How should one establish business credit when just starting out?
Establish a legal entity with an EIN number first. Then, apply for a Dun & Bradstreet number and an Experian report – both are free. Lastly, sway 6 vendors to report payment history (this part is tricky if you don’t have the leisure of time).
Do your business credit habits automatically get submitted to the business credit reporting agencies?
No – Reporting can be done by all; however, automatic reporting is done by only a few vendors and lenders.
Is it easy to get financing once you have a business credit profile?
Nothing is easy in the current state of our credit-crunched lending sector. By having business credit a business is open to more lending options.
Is the SBA the only resource for small business loans?
Not anymore – more and more banks offer business credit based financing.
Will the current situation in the banking industry and the economy affect a new business owner’s ability to get a loan?
Yes, for those that don’t have business credit.
Will a business owner be expected to pay high fees when they apply for business-credit based financing?
No, these are the same banks and the same lending guidelines – pulling business credit reports, not personal credit scores.
Can a business owner, without business credit, get lines of credit and business credit cards?
Yes, take the steps to establish a strong business credit profile and go to the right lenders.
Any tips for all of us who are looking for loans to expand, start, or restructure our business?
Just like you take the time to go to an accountant for tax advice and preparation (regardless if it is your first year of operation or tenth year), spend some time with a business professional to prepare and take advice on strong business credit.
Over the course of the last 5 years as an entrepreneur I have successfully launched, managed, and sold off several businesses. Each organization started has added some value to my understanding of the business world today. My philosophy has been that 9 things out of 10 that I try will fail, but that golden one is always worth the battle. In my experience that has proven to be the case and my successful businesses still operate today under the management of those whom I have sold off to. The latest project is Initial Underwriting Group, a corporation comprised of two concepts: 1) business credit building and 2) business loan underwriting.
Get 0000 to 0000 in cash and UNSECURED new business lines of credit by following a 4-step system. Dear Entrepreneur I want to introduce you to an amazing credit system that taught me where to get huge unsecured lines of credit. This guide shows you where to get 0000 to 0000 in cash and UNSECURED new business lines of credit by following a 4-step system. An unsecured business line of credit is the easiest short cut to getting money that you will ever find. You will learn how to get money in the name of a business using any registered business entity, and stop using your personal name and social security number to apply for business credit. The secret to successfully getting large amounts of business credit is to use stated income applications to qualify for money from many different lenders. This system will show you exactly how to properly complete the stated income application process at each of the national lenders on my lenders list. Business lines of credit come in the form of multi-year loans, convenient checks and business credit cards that offer cash advances that can be used anywhere. Get the complete guide with workbook, lenders list, CD set and everything you need to get the money at: businesscapitaltoday.com This system has helped me tremendously, that’s why I want to share what I’ve learned with you. Video Rating: 3 / 5
Information on establishing business credit without using personal credit Video Rating: 5 / 5
Thomas Kish, Business Credit Expert, explains the Credit System, and the advantages of obtaining BUSINESS CREDIT. Learn more at www.WhoHasMyCash.biz Video Rating: 4 / 5
www.buildrapidcredit.org A resource for building your personal and business credit fast, using new and rarely advertised programs at Banks around the nation.
