How to Get Business Credit for a Start Up Company

January 29, 2010 2 comments

To get working capital and start up financing is very hard. Especially in tough economic times that we are experiencing today. There are a few options though. This includes the SBA and other programs that take advantage of The Federal Stimulus programs. The biggest problem is twofold. First these stimulus funds and SBA programs are limited and restrictive. These programs are short term fixes for this tough economy and you are in business for the long term business. Secondly, you must have good personal credit and sometimes even assets to serve as collateral to qualify for financing. These are sometimes obstacles that entrepreneurs can not overcame. There are other, better, long term options available to you.

Build a Corporate Credit Profile.

As a new company you have no corporate credit profile and you need to develop one to access the funds that are available to you. Many businessmen (and women) work hard at establishing their business and slowly developing the necessary credit to stay afloat. But, most are not aware of the unlimited resources that are available to them based on there corporate credit profile. Even after they establish accounts their profiles are not developed because 90% of the creditors to not report to the credit bureaus. This means they are starting from scratch in many instances. The sooner a business builds its corporate credit profile the sooner it can take advantage of opportunities that require no personal guarantees. Many of us have worked for large companies that did not require personal guarantees for business credit and small start up companies can enjoy the same benefits. Here are 4 steps needed to build your corporate profile.The sooner a business builds its corporate credit profile the sooner it can take advantage of opportunities that require no personal guarantees.

Establish Your Company.

Many business operate without being fully licensed with the state and their municipal governments. This is the first thing creditors check. Make sure you have a land phone line that is listed with directory assistance. This will also be checked. Even if you work out of your home, make sure you establish a business line. A presence on the Internet is also helpful in developing credibility as well as marketing your business.

Open Trade Lines of Credit.

Office supply stores, gas cards and merchant accounts that specific to your business will be helpful in establishing a credit profile. It is important to check if they report to the business credit bureaus like Dunn and Bradstreet. Otherwise you are not building a profile. This is why many companies have been in business for years without and established corporate credit profile and they still need to use personal credit for business purposes. Remember you want them to report your payment history so you must pay on time.

Business Credit Cards, Automobile and Equipment Leasing.

You can open these type of accounts soon after you establish trade lines that report to the bureaus. There are companies that do this without reviewing or using personal credit.

Working Capital Lines without Personal Credit.

This is the pinnacle of business credit that we all aspire to achieve. It can happen in 6 to 9 months if you are steady and follow the steps outlined above. Working Capital LOC’s are those credit lines that have no restrictions you just use them to operate your business. They might be $50,000 or $100,000 dollars or more. As you develop and maintain your positive corporate profile you will even receive offers.

Hire a Professional Corporate Credit Coach.

Now if the process was as simple as outlined here everyone would have a positive profile at the onset of there business. It really is but you must know which lenders have what requirements and who reports to the bureaus to help build up your profile. With 20 years in banking, I often found it hard to keep up with the guidelines of the bank I worked for. So I know it is impossible for an individual entrepreneur to do the same. Work with a company that has experience successfully working with companies to establish their corporate credit profiles and getting them financing. A written guarantee is also helpful.

Get Business Credit For Your Start up Company Today. Guaranteed.

Coach Louis

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