Let your business entity assume the loan!
Establishing strong business credit is crucial for securing financing, obtaining favorable terms from suppliers, and enhancing your company’s reputation. Here’s a concise guide to help you build and maintain solid business credit:
**1. Maintain Good Personal and Business Credit History**
For new businesses, lenders often assess the owner’s personal credit score. A strong personal credit history can improve your chances of securing financing. The Consumer Financial Protection Bureau offers resources to help individuals build and improve their credit.
**2. Apply for Business Credit**
Establishing business credit can help your company secure financing with better terms. Start by registering for a Dun & Bradstreet (DUNS) number, a unique nine-digit identifier for your business. This number is essential for building your business credit profile. Ensure you have the right business entity structure in place before you do!
**3. Check and Monitor Your Credit**
Regularly monitoring both your credit reports is vital. For personal credit, you can obtain free reports from the Annual Credit Report website. For business credit, consider checking reports from agencies like Experian, Equifax, and Dun & Bradstreet. This practice helps you identify and correct errors promptly. Make sure any errors are reported to the credit bureau so you can get those fixed as soon as possible!
There are also other ways to start building business credit; some stores will open business lines of credit for smaller amounts, without having to go through the whole loan process. You can start as low as $500 at some stores! A lot of it depends on your business as well, and what kind of stores you frequent.
By following these steps, you can establish and maintain strong business credit, positioning your company for better financing opportunities and relationships with suppliers and partners; all without putting your own assets at risk!
For the full article, check out the SBA website here.
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