|
What is business credit?
Business credit is defined as credit extended by one business (the creditor) to another business (the borrower). Business credit is the single largest source of business financing in the United States.
Pg. 1, Principles of Building Business Credit
Why do business owners need business credit?
There are several reasons why every business owner needs business credit:
- Business credit helps you maximize the financing options available to your business.
- Business credit allows you to defer expenses over time for improved cash flow.
- Business credit improves the overall creditworthiness of your business.
- Business credit builds credibility for your business.
Pg. 3, Principles of Building Business Credit
When is the best time to build business credit?
You should begin to build business credit the day you start your business so that credit is available to your business before, not after you need it.
Pg. 5, Principles of Building Business Credit
Who are the business credit bureaus?
- Accurint
- Business Insight
- ClientChecker
- Credit.net
- Dun & Bradstreet
- Equifax
- Experian
- PayNet
Pgs. 7-19, Principles of Building Business Credit
What is a good business credit score?
Business credit scores typically range from 0 to 100. A good business credit score is 80, because it means you pay your business credit obligations on time and within terms.
PsS. 16-18, Principles of Building Business Credit
Can business credit be used to replace poor personal credit?
Business credit is not a substitute for poor personal credit. While it is possible to get business credit without providing a personal guarantee, there are instances when you may have t use your personal credit in addition to your business credit to obtain credit (e.g., a large business loan). If poor personal credit is a problem, begin to repair your personal credit while you work to build business credit. That's why Principles of Personal Credit Management is a part of the Business Credit Home Study Program- so you can repair your personal credit while you build your business credit!
Pgs. 6-7, Principles of Building Business Credit
Also see- Principles of Personal Credit Management (Part of the Business Credit Home Study Program)
Is it possible to build business credit as a sole proprietor?
While it's possible to build business credit as a sole proprietor, it's not recommended. It's best to form a corporation or limited liability company to build business credit to help protect your personal assets against potential business lawsuits.
Pgs. 33-42, Principles of Building Business Credit
Can a Federal Tax ID Number be used to build business credit?
The Federal Tax ID Number (a.k.a., EIN) is used to pay taxes and for identification purposes only. In order to establish a business credit profile and build business credit, you will need a Data Universal Numbering System Number.
Pgs. 49-55, Principles of Building Business Credit
Also see- Accessing Capital for Growth (Part of the Business Credit Home Study Program)
Is it a good idea to buy trade references to build business credit?
No. Purchasing trade references can be risky and costly. When you purchase a trade reference, the payment history of the trade account is transferred to your business credit profile. If you purchase a trade reference, you put your business credit rating at the mercy of another company. What if the company you purchased the trade reference from begins to pay its obligations late or not at all? Your credit rating will decline and you won't be able to do anything about it.
Pgs. 6 and 64, Principles of Building Business Credit
Is it a good idea to buy a shelf corporation to build business credit?
Some companies will sell shelf companies to you for a fee to help you build business credit. However, there is no guarantee that the shelf company (also known as an “aged company”) will have a positive business credit profile with the business credit bureaus.Some companies will sell shelf companies to you for a fee to help you build business credit.
Pgs. 6 and 62, Principles of Building Business Credit
Where can I learn how to get corporate credit?
We have a number of resources available for business owners that will teach you where to find reputable creditors, including a list of angel investment groups, U.S. banks and venture capital firms interested in start-ups and growing businesses. We will help you learn how to build corporate credit domestically and abroad with the techniques we teach you in Principles of Building Business Credit and the Business Credit Home Study Program.
|
