Real Guidance on
How to Build Business Credit
Before we talk about how to build business credit, let’s make sure you’re prepared for what’s in store.
Have you done your research?
Have you come to understand that it’s practically a necessity if you want to consistently receive the best that business loans have to offer?
Are you also committed, ready and willing to do whatever it takes to build your business credit?
Great! You’re making wonderful progress.
There’s only one problem now. You don’t know how to do it. No worries. We’re about to give you real guidance on how to build business credit.
How exactly do I build business credit?
How exactly do I build business credit?
There are 3 Phases with multiple associated steps and tasks. Here’s a basic outline of how to build business credit…
Phase I – Establishing your Business Credit Profile
A. Choosing the best type of corporate entity for your business
- 1. You can do all of the other business credit building steps, but if you don’t choose to make your business a corporation or an L.L.C., you’ll forfeit all of the benefits of building business credit.
- This is the foundational step. You must decide which is best for you.
- 2. Next, set up the entity being certain to obey all of the laws of your state.
B. Getting your EIN number
C. Obtaining required business license(s)
- 1. All businesses don’t require a business license. Contact your secretary of state to determine what license(s) are required for your business
- 2. Be sure to acquire all of the business licenses you need.
D. Securing an official corporate location
- 1. It’s best to be set up in a commercial office.
- 2. If you’re running your business out of your home, consider using the services of a virtual office. This way, you can secure an inexpensive commercial office address.
E. Listing your local business phone number
- 1. Even if you have an 800 number, be certain to secure a local business phone number as well.
- 2. Don’t use the cheap VOIP phone services because you can't list them with the 411 directory.
- 3. List the phone number(s) with the 411 directory
(By the way, this company offers both a toll free number and a listing of your business with the 800-411 directory all in one: Toll Free Services - Get a toll free 800 number.)
F. Building the company website with corresponding e-mail
- 1. Lenders will visit your website. They want to know how your customers view you. Your website will give them a good idea.
- 2. Make sure it looks professional and that it provides an overview of your products and services.
- 3. It looks better when your e-mail corresponds to your site. For example, firstname.lastname@example.org
- 4. Strongly consider building a website that does it all. One that pleases your visitors, lenders, and the search engines. That's what we did with Solo Build It! I encourage you to take the time to check it out.
G. Opening a business checking account
- 1. Lenders don’t view you as a real business until you have a business checking account.
- 2. It’s also the foundation for your business financial statements.
H. Verifying how you're listed with each entity that you interact with
- 1. Make sure your business name, address, phone, and e-mail are all listed exactly the same with each and every entity that you interact with. Your state. Your bank. The phone company.
- 2. Everyone must have the exact same information on you. Otherwise, your entire business credit profile can be compromised.
Phase II – Establishing your profile with the major business credit bureaus.
A. Dun and Bradstreet
B. Equifax SBFE
C. Experian Business
Phase III – Building your reputation with the appropriate creditors at the appropriate time.
A. 1st Level – Vendors
B. 2nd Level – Retail Creditors and Credit Cards
C. 3rd Level – Non-Bank Lenders
D. 4th Level – Banks
It’s important to build your reputation with each type of creditor one at a time and in this order.
It’s just like climbing a ladder. For your own safety, you really must get your footing and then take one step at a time.
Now you have the basics on how to build business credit. We will soon go into further detail on phases II and III.
Just contemplating all of these phases, steps and tasks at a glance can seem completely overwhelming.
So now is the time to ask yourself some difficult questions like…
- Am I willing to see each phase, step and task through to completion?
- Am I serious about overcoming any roadblocks that may surface?
If you answered “no,” to any of the above questions, consider spending more time pondering this subject. Think again about the benefits you receive when you build business credit.
Contemplate, “What really is holding me back?” Once you identify the true roadblocks you’ll be in a much better position to root them out.
Did you answer “yes” to all the above questions?
Do you understand how to build business credit?
Then you are well on your way to securing an A++ business credit profile.
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