Build Your Credit, Grow Your Business

You may be familiar with some of the struggles that accompany individuals with poor credit. From high interest rates to assuming a role as a high risk to creditors, negative credit ratings can sometimes be crippling, hindering many of the hopes that are associated with the American Dream. Although individuals can be plagued by bad credit, your business can endure similar hardships if credit is not built properly or if poor credit characterizes it.

Because finances are so important to businesses, whether yours is just getting its start or experiencing growth, obtaining a positive credit score and building your business's credit history can be a vital aspect of growing your company as a whole and taking the next leap in your journey. Similarly to an individual, if your business has poor or no credit history, you may have to bite the bullet and obtain higher interest or high fee loans as you work toward improving your financial situation.

Credit Building Options
Although it can take some time to establish, building business credit can be a great option if you have poor credit as an individual since this alternative is unrelated to your personal scores. In addition to helping your business achieve lower interest rates as time progresses and credit builds, a poor business credit score resulting from any issues in your business will not damage your personal credit score.
One of the most important aspects to building your business's credit is making sure that you have completed some of the basic requirements and established tools for your company that give lenders the necessary confidence. Check with various lenders to gain a better understanding of the individual factors they may be looking for when it comes to your business plan and set up.

How to Set Up Business Credit
Whether you are establishing a corporation or an LLC, making sure to draw a clear line regarding what your business entails can be a good way to separate its operation from your personal credit. Some other ways you can separate your business finances from the credit and finances of your business include:

• Opening a business checking account. Instead of using your personal bank accounts, use a business established checking account to handle any finances for your business.
• Using a company telephone line for any business that takes place. A phone line can be an easy way to help your business establish credit using an aspect that you already use.
• Use credit with any vendors or suppliers your company deals with. Vendors and suppliers that provide your business with office goods and inventory can help your company establish and improve its credit by insuring you pay the balances and payments due promptly. To make sure your business's credit is grown by establishing credit with vendors, make sure they use the information of your company rather than your personal information, such as your social security number.

Danny is a veteran commercial lender with over fifteen years of experience in accounts receivable funding. Factor Funding can provide more information on how to grow your business with the right funding company.