"Knowledge is Power" The answer is yes you can build or borrow thousands and millions of dollars if you know the recipe for building credit. The problem with this method of financing has been lack of available information or knowledge about the subject.
As a former Dun & Bradstreet Senior analyst, my job was collecting information from owners to build a business profile and credit report, if profiles monitored and prepared properly the owner should benefit greatly with future possibilities, if prepared incorrectly the business owners would possible struggle to establish venders and lenders outside of their local markets. Dun & Bradstreet and the owner benefits by having a complete business report.
Here is the big secret! – In order to have a chance with building corporate credit – You must own an business that is registered as a corporation or LLC with the Sec of State. The company should have an established EIN number. an office, a business phone number listed with 411 directory and of course a duns number and credit profile. Once you have completed the business foundation you business is ready to add vender trade lines, loans and / or Credit Cards.
There is a process to building business credit for your corporation as follows.
Step 1 – Corporate Structure must be built on a solid foundation with the Secretary of State using the company EIN for starters.
Step 2 – Applying for Business credit! No short cuts – Period. For those who do not know the recipe the business credit opportunities are limited.
This process of building the corporate foundation can be time consuming but very well worth the effort. If time is important look for a good corporate credit eBook or find a qualified business financing expert to build the foundation for you first before trying to obtain business credit on your own. Those that understand the corporate building process will save you time and money to build the foundation you need to grow, otherwise it could set you back several months trying to correct mistakes. Take your time and create a plan of action. If you do not have the time have someone in your office to monitor the program to meet your credit goals.
Building the corporate foundation first is essential when securing vender trade accounts and unsecured larger lender loans. If your company is new, it is consider a new company and will take a couple of years to build the proper business history, trade lines and credit to meet most vender credit requirements. Assuming you added a corporate credit building program to your new business over the first couple of years then you are well a heard of the game and now the company is ready to start looking for additional financing to grow your business. Congratulations on your success …
Like most business owners, entrepreneurs and those starting a company for the first time, the last thing on your mind is more paper work much less thing about a long range goal of preparing your business for future financing.
The chances are you did not know you could build or establish a 1-2 year corporate credit plan to grow your business if times were financially tough. Most of us think that were are going to make lots of money after we get started, however, you did not considered the fact of what happens if it really does start making a ton of money and you need more funds to cover inventory or supplies, or maybe you need to hire more employees but strapped for cash. Maybe short on cash to cover employee payrolls because the accounts receivable was slow to arrive. Checks in the mail. Never the less it is always good to plan for the rainy day when starting a business you can never have enough cash available.
Do yourself a favor, make a business credit plan and stick to the plan, when the time comes you will be much more prepared.
Here is the good news, you can start building your copporate credit and long term financing goals at any time. However you must start with a solid foundation.
Many people come to me asking for assistance with company financing or corporate credit. The first thing I ask, besides the courteous introduction; What is your personal credit scores? What is your company Duns number and Paydex score? I would bet you a dollar to a donut that 9 out of 10 responses are "I have no clue" but they know they have one.
Should they have the right answers, then the next series of questions are about the corporation foundation, like where are they located? Do you work from home or an office? Do you have a business telephone in the name of the company listed with 411? Does someone answer the phone or do you use an answering service or answering machine? All questions that will determine whether or not you will get corp credit or loans for your corporation.
If you are looking for financing put together a one page data form that lists all of your business information needed for obtaining corporate company credit. This check list will insure you have a strong foundation before you start applying for credit or loans. If you are unclear of what this data sheet is call a business specialist and ask what will be required for building a solid foundation. If they do not know then move on, they do not know credit requirements. Find a credit expert that can answer your questions or find a good corporate Credit eBook to assist you.
Once you have completed step 1: The company foundation essentials are complete and you are ready to start obtaining financing or credit.
Remember to verify and organized your data on one or 2 sheets of paper for later use. As an owner you will be finding yourself referring back to this information regularly when applying for vender credit, credit Cards or business loans or credit.
Congratulations, you will have completed step 1! You are well on your way to $ 500,000 in credit.
Now the Fun part begins, building your Business Credit.
Part 2: Corporate Credit Building Time Line
Part 3: Who should I use to build my trade lines before applying for credit or loans?
Part 4: Who & How to apply for credit for your business.
Plan, prepare and execute – It will work! Best of Luck