Have you ever rejected for business credit? If so, not only you, more than half of the small business owners are denied for business financing. The main reason for rejection is business and personal credit scores. If you have not developed robust business credit till now, it is the time to build business credit fast.
A business credit card is a must for business owners apart from holding a personal credit card. Making your credit card payment in time and maintaining at least the minimum amount always help your business credit very much. You can check the important factors a business owner must consider when getting a business credit card is explained in the website https://www.sba.gov/blogs/business-credit-cards-what-every-business-owner-should-consider.
The key factors to building your business credit swiftly are listed below.
The first factor you should consider is placing your business on the map. You must establish your business as a separate legal firm in your state. Then you must complete the procedures to get Employee identification Number (EIN)
The second step is opening a bank account for your business separately. Though you have a personal bank account, maintaining a business bank account is a must and you remember to make all your business transactions through your business account. When applying financing, the majority of the lenders will verify your business bank account details to make their financing decision.
The next important point is like a separate bank account for your business, you must hold a landline phone or cell phone for your business. It should be listed in the directory.
Once your business is legally launched, you must check whether it is listed in the major credit bureaus and the credit score set by them is verified for most of the trade credit process either by your lenders or suppliers. Even your business partners will check your credit score to confirm whether you are a potential investor to invest in their business. The method of calculation of the credit score varies from one credit bureau to another hence the credit score of all the credit bureaus you maintain your business reports will not be the same.
Then you need to check whether the suppliers you hire for getting the raw materials and other inventories for your business report your payment details to the credit bureaus. If one supplier is not reporting to the business credit bureau, you must check whether other suppliers will do before offering their services. You must ensure to make the payment either on time or earlier than that. At least maintaining four to five suppliers who report to the credit bureaus are essential.
If you are using your personal credit card to pay your business transactions, you should stop that process. Apply for a business credit card and get a business credit so that you can make all your payments through your business credit card. You check with the credit card service providers whether they can report your application to the credit bureaus. You must remember to pay all your business credits within time to avoid negative impacts on your business.