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Comments URL: https://news.ycombinator.com/item?id=35427338
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Apply for a business credit card now – even as our lives are on pause. This is actually an excellent time to get your business credit ducks in a row.
Apply for a business credit card today – yes, you can! We researched a considerable number of small business credit cards. We did the research for you. So here are our favorites. Applying for a business credit card is easy. You can do it even in an economic crisis.
Per the SBA, small business credit card limits are a whopping 10 – 100 times that of personal cards! So don’t use personal credit cards for business! Instead, use business only credit cards.
This means you can get a lot more cash with small business credit. And it also means you can have personal charge cards at stores. So you would now have a second card at the same shops for your business.
And you won’t have to have collateral, cash flow, or financials in order to get company credit.
Still asking yourself: what do I need to get a business credit card? And do I need a business credit card?
The number of US banks and also thrifts has been decreasing gradually for a quarter of a century. This is from consolidation in the marketplace in addition to deregulation in the 1990s, lowering barriers to interstate banking. See: https://www.fundera.com/blog/happened-americas-small-businesses-financial-crisis-six-years-start-crisis-look-back-10-charts
Assets focused in ever‐larger financial institutions is troublesome for local business proprietors. Big banks are much less likely to make small loans. Economic recessions suggest financial institutions end up being much more cautious with lending. Thankfully, business credit does not depend on banks.
Benefits vary, so make certain to choose the reward you prefer from this selection of options. It’s a great way to decide on applying for business credit card. This is how to get credit for a business.
We have the best business credit cards for new small business. But it’s beyond the best startup business credit card. And this will even work during an economic crisis.
Take a look at the Blue Business® Plus Credit Card from American Express. It has no yearly fee. There is a 0% introductory APR for the first one year. Afterwards, the APR is a variable 14.74 – 20.74%.
Get double Membership Rewards® points on everyday company purchases like office supplies or client suppers for the initial $50,000 spent each year. Get 1 point per dollar afterwards.
You will need good to excellent credit to qualify.
Find it here: https://creditcard.americanexpress.com/d/bluebusinessplus-credit-card/
Also take a look at the American Express® Blue Business Cash Card. Keep in mind: the American Express® Blue Business Cash Card is identical to the Blue Business® Plus Credit Card from American Express. But its rewards are in cash as opposed to points.
Get 2% cash back on all qualified purchases on up to $50,000 per calendar year. After that get 1%.
It has no annual fee. There is a 0% introductory APR for the initial twelve months. After that, the APR is a variable 14.74 – 20.74%.
You will need good to exceptional credit scores to qualify.
Find it here: https://creditcard.americanexpress.com/d/business-bluecash-credit-card/
Take a look at the Capital One® Spark® Classic for Business. It has no annual fee. There is no introductory APR offer. The regular APR is a variable 24.49%. You can get unlimited 1% cash back on every purchase for your business, without minimum to redeem.
While this card is within reach if you have average credit, beware of the APR. But if you can pay on time, and completely, then it’s a good deal.
Find it here: https://www.capitalone.com/small-business/credit-cards/spark-classic/
Take a look at the Ink Business Unlimited℠ Credit Card. Past no yearly fee, get an introductory 0% APR for the initial one year. After that, the APR is a variable 14.74 – 20.74%.
You can earn unlimited 1.5% Cash Back rewards on every purchase made for your business. And get $500 bonus cash back after spending $3,000 in the initial 3 months from account opening. You can redeem your rewards for cash back, gift cards, travel and more via Chase Ultimate Rewards®. You will need excellent credit to get this card.
Find it here: https://creditcards.chase.com/business-credit-cards/ink/unlimited
Have a look at the Capital One® Spark® Miles for Business. It has an introductory annual fee of $0 for the first year, which then rises to $95. The regular APR is 18.49%, variable due to the prime rate. There is no introductory annual percentage rate. Pay no transfer fees. Late fees go up to $39.
This card is excellent for travel if your costs don’t fall under typical bonus categories. You can get unlimited double miles on all purchases, with no limits. Get 5x miles on rental cars and hotels if you book with Capital One Travel.
Get an initial bonus of 50,000 miles. That’s the same as $500 in travel. Yet you only get it if you spend $4,500 in the initial 3 months from account opening. There is no foreign transaction fee. You will need a good to exceptional FICO rating to qualify.
Find it here: https://www.capitalone.com/small-business/credit-cards/spark-miles/
For an excellent sign-up offer and bonus categories, take a look at the Ink Business Preferred℠ Credit Card.
Pay an annual fee of $95. Regular APR is 17.49 – 22.49%, variable. There is no introductory APR offer.
Get 100,000 bonus points after spending $15,000 in the initial 3 months after account opening. This works out to $1,250 towards travel rewards if you redeem using Chase Ultimate Rewards.
Get three points per dollar of the initial $150,000 you spend with this card. So this is for purchases on travel, shipping, internet, cable, and phone services. Plus it includes advertising purchases made with social media sites and search engines each account anniversary year.
You can get 25% more in travel redemption when you redeem for travel with Chase Ultimate Rewards. You will need a great to superb FICO score to qualify.
Find it here: https://creditcards.chase.com/business-credit-cards/ink/business-preferred
Learn more here and get started toward establishing business credit and qualifying for even better business credit cards, even during a recession.
For no yearly fee while still getting travel rewards, have a look at this card from Bank of America. It has no yearly fee and a 0% introductory APR for purchases during the initial 9 billing cycles. Afterwards, its regular APR is 13.74 – 23.74% variable.
You can get 30,000 bonus points when you make a minimum of $3,000 in net purchases. So this is within 90 days of your account opening. You can redeem these points for a $300 statement credit towards travel purchases.
Get unlimited 1.5 points for each $1 you spend on all purchases, everywhere, every time. And this is regardless of how much you spend.
Also get 3 points per every dollar spent when you book your travel (car, hotel, airline) through the Bank of America® Travel Center. There is no limit to the number of points you can earn and points do not expire.
You will need superb credit scores to get this one (as in, 700s or better).
Find it here: https://www.bankofamerica.com/smallbusiness/credit-cards/products/travel-rewards-business-credit-card/
Have a look at the Marriott Bonvoy Business™ Card from American Express. It has a yearly fee of $125. There is no introductory APR offer. The regular APR is a variable 17.24 – 26.24%. You will need good to excellent credit scores to get this card.
You can get 75,000 Marriott Bonvoy points after using your card to make purchases of $3,000 in the initial 3 months. Get 6x the points for qualified purchases at participating Marriott Bonvoy hotels. You can get 4x the points at US restaurants and filling stations. And you can get 4x the points on wireless telephone services bought straight from US providers and on US purchases for shipping.
Get double points on all other eligible purchases.
Also, you get a free night every year after your card anniversary. And you can earn an additional free night after you spend $60,000 on your card in a calendar year.
You get Marriott Bonvoy Silver Elite status with your Card. Also, spend $35,000 on qualified purchases in a calendar year and get an upgrade to Marriott Bonvoy Gold Elite status through the end of the following calendar year.
Plus, each calendar year you can get credit for 15 nights towards the next level of Marriott Bonvoy Elite status.
Find it here: https://creditcard.americanexpress.com/d/bonvoy-business/
Learn more here and get started toward establishing business credit and qualifying for even better business credit cards, even during a recession.
Take a look at the Plum Card® from American Express. It has an introductory yearly fee of $0 for the first year. After that, pay $250 per year.
Get a 1.5% early pay discount cash back bonus when you pay within 10 days. You can take up to 60 days to pay without interest when you pay the minimum due by the payment due date.
You will need great to excellent credit to qualify.
Find it here: https://creditcard.americanexpress.com/d/the-plum-card-business-charge-card/
Look into the Brex Card for Startups. It has no yearly fee.
You will not need to provide your Social Security number to apply. And you will not need to provide a personal guarantee. They will take your EIN.
Nevertheless, they do not accept every industry.
Additionally, there are some industries they will not work with, and others where they want added documentation. For a list, go here: https://brex.com/legal/prohibited_activities/.
To determine creditworthiness, Brex checks a business’s cash balance, spending patterns, and investors.
You can get 7x points on rideshare. Get 4x on Brex Travel. Likewise, get triple points on restaurants. And get double points on recurring software payments. Get 1x points on everything else.
You can have poor credit scores (even a 300 FICO) to qualify.
Find it here: https://brex.com/lp/startups-higher-limits/
Have a look at the Capital One® Spark® Cash for Business. It has an introductory $0 annual fee for the initial year. Afterwards, this card costs $95 each year. There is no introductory APR deal. The regular APR is a variable 18.49%.
You can get a $500 one-time cash bonus after spending $4,000 in the first 3 months from account opening. Get unlimited 2% cash back. Redeem any time without any minimums.
You will need good to excellent credit to qualify.
Find it here: https://www.capitalone.com/small-business/credit-cards/spark-cash/
Take a look at the Discover it® Business Card. It has no annual fee. There is an introductory APR of 0% on purchases for 12 months. After that the regular APR is a variable 14.49 – 22.49%.
Get unlimited 1.5% cash back on all purchases, with no category restrictions or bonuses. They double the 1.5% Cashback Match™ at the end of the first year. There is no minimal spend requirement.
You can download transactions| easily to Quicken, QuickBooks, and Excel. Keep in mind: you will need great to superb credit to get this card.
https://www.discover.com/credit-cards/business/
Take a look at the Ink Business Cash℠ Credit Card. It has no yearly fee. There is a 0% introductory APR for the first 12 months. Afterwards, the APR is a variable 14.74 – 20.74%. You can get a $500 one-time cash bonus after spending $3,000 in the first three months from account opening.
You can get 5% cash back on the initial $25,000 spent in combined purchases at office supply stores and on internet, cable, and phone services each account anniversary year.
Get 2% cash back on the first $25,000 spent in combined purchases at filling stations and restaurants each account anniversary year. Earn 1% cash back on all other purchases. There is no restriction to the amount you can earn.
You will need outstanding credit scores to get this card.
Find it here: https://creditcards.chase.com/business-credit-cards/ink/cash?iCELL=61GF
Check out the Bank of America® Business Advantage Cash Rewards MasterCard® credit card. Get an 0% introductory APR for the first 9 billing cycles of the account. After that, the APR is 13.74% – 23.74% variable. There is no annual fee. You can get a $300 statement credit offer.
Get 3% cash back in the category of your choice. So these are filling stations (default), office supply stores, travel, TV/telecom & wireless, computer services or business consulting services. Earn 2% cash back on dining. So this is for the first $50,000 in combined choice category/dining purchases each calendar year. After that get 1% after, with no limits.
You will need excellent credit to qualify.
Find it here: https://promo.bankofamerica.com/smallbusinesscards2/
Learn more here and get started toward establishing business credit and qualifying for even better business credit cards, even during a recession.
Take a look at the Capital One® Spark® Cash Select for Business. It has no annual fee. You can get 1.5% cash back on every purchase. There is no limit on the cash back you can earn. And earn a one-time $200 cash bonus when you spend $3,000 on purchases in the first three months. Rewards never expire.
Pay a 0% introductory APR for 9 months. Then pay 14.49% – 22.49% variable APR afterwards.
You will need good to outstanding credit to qualify.
Find it here: https://www.capitalone.com/small-business/credit-cards/spark-cash-select/
Your optimal company credit cards hinge upon your credit history and scores.
Just you can decide which advantages you want and need. So be sure to do your homework. What is excellent for you could be disastrous for someone else when you apply for business credit card.
And, as always, make sure to build credit in the recommended order for the greatest, fastest benefits. Apply for a business card and succeed in business. And while you’re at it – get business credit! The COVID-19 situation will not last forever.
The post Apply for an Awesome Business Credit Card in an Economic Crisis appeared first on Credit Suite.
Do you need the best hacks to set up your business bank account in a recession? Then read on.
You’ve got a brand-new business. And you’ve got clients. You’ve got expenses. And congratulations, you’ve got money. So, where do you put that cold, hard cash?
Please don’t say a mattress.
Instead, you need a business bank account, to keep funds separate from your personal accounts and to keep the Internal Revenue Service happy. Maybe that’s going too far. Let’s just say not unhappy.
Your business needs a legal and a mailing address. These can be the same. Because business addresses are a matter of public record, you will want to keep an address separate from your home. The legal address is for service of process. So talk to your lawyer about this and see what he or she thinks. You might be able to hire an agent to accept service for you. Note: in most states, if your company is a corporation, you must have an agent to accept service of process.
Are you a sole proprietor, working out of your home? Then seriously consider a virtual address. We like Alliance Virtual Offices. Note: there are some places which don’t seem to have virtual addresses. If you are in one of those areas, talk to local business owners. Find out what they use.
Get yourself a business Federal tax ID number from the IRS. In order to open a business bank account at all, you are going to need one, so get this out of the way first. The IRS has a form for everything, including getting a Federal tax ID number. This is form SS-4.
Once you have filled it out, you either mail or fax it to the appropriate office. Note: the form contains this information. Getting a Federal tax ID number is free. The appropriate IRS will usually send you (by mail) the number within about two or three weeks of receiving your form.
Check out our professional research on bank ratings, the little-known reason why you will – or won’t – get a bank loan for your business during a recession.
Get your business a state tax identification number for the state in which you intend to do business. You can find all of the states’ government information here.
However, state websites differ; a random check of Massachusetts requiring visiting the Department of Revenue site, then clicking on Businesses and then selecting Registering, Filing and Reporting. On Louisiana’s site, it took some digging to find Form 16019. Your state might have similar hoops to jump through, so be prepared to spend some time searching or talking with a clerk.
Looking to keep your business as a sole proprietorship or partnership but want to do business under another name? This is known as a DBA, which stands for doing business as. Then you will need a fictitious name, and you will have to register your fictitious name with your city, county or state you can open a business account.
In many states, just go to your county offices and pay a registration fee to the county clerk. However, in some other states, you are required to place a notice in a local newspaper. In addition, in most states, corporations are not required to file fictitious names unless those corporations do business under names other than their own.
Fictitious names are helpful because, otherwise, the name of your company is your name. and that means that sometimes you can end up a part of a law suit against your business.
The costs of filing a fictitious name notice can range from $10 to $100.
Check out our professional research on bank ratings, the little-known reason why you will – or won’t – get a bank loan for your business during a recession.
In order to be able to accept credit cards, you must set up a credit card merchant account. A merchant account makes it so your customers’ credit card payments can be transferred to the bank account you designate.
Your start-up fee will range from about $50 to $200, plus monthly and per-transaction fees. You may also have to pay monthly statement fees, which tend to run from $4 to $20. There are also transaction fees; they are usually 5 to 50 cents/purchase.
A discount rate tends to vary from 1.5% to 3%. This is the percentage charged/transaction. Such a figure is based on the volume of card sales, the degree of risk, and whether you swipe cards at a brick and mortar store or you accept orders online.
Without a credit card merchant account, you can’t accept credit card payments, as you need that, plus a business bank account, and a means of processing payments.
Don’t want to set up a credit card merchant account? You can instead accept online payments such as PayPal, which takes a small fee per transaction (0.7 to 2.9% of the transaction plus 30 cents per order, depending on your company’s sales volume).
But you probably still want to use a credit card merchant account. Why? Because studies have shown that people will tend to spend more money if they can pay by credit card.
Maybe it’s not so much for setting up your business bank account. But do not underestimate the value of keeping a high balance. This has to do with your bank credit score. Yes, you have one.
A small business can obtain more business credit rapidly, so long as it has at least one bank reference and an average daily account balance of at least $10,000 for the most recent three month time period. This set up will yield a bank rating of a Low-5. So this means it is an Adjusted Debt Balance of from $5,000 to $30,000.
A lower rating, like a High-4, or balance of $7,000 to $9,999 will not automatically reject the small business’s loan application. However, it will slow down the approval process.
A bank credit rating is the average minimum balance as maintained in a business bank account over a three month long period. Hence a $10,000 balance will rate as a Low-5, a $5,000 balance will rate as a Mid-4, and a $999 balance will rate as a High-3, etc.
A small business’s chief goal should always be to maintain a minimum Low-5 bank rating (or, an average $10,000 balance) for at least three months. This is because, without at least a Low-5 rating, the majority of banks will operate under the assumption that the business has little to no ability to repay a loan or a business line of credit.
One thing to keep in mind – you will never actually see this number. The bank will just keep this number in its back pocket.
The numbers work out to the following ranges:
It should be clear that the thrust behind bank credit scores is to prove your small business can pay back its financial obligations quickly. Therefore, yes, you will need to maintain a minimum balance for at least three months. Every cycle is based on the balance rating during the previous three month period.
Check out our professional research on bank ratings, the little-known reason why you will – or won’t – get a bank loan for your business during a recession.
Also, a business owner must ensure their business bank accounts are reported exactly the same way all of their business records are. So this means with the exact same physical address (no post office box) and phone number.
It is imperative that each and every credit agency and trade credit vendor, every record keeper also lists the business name and address the exact same way. These are keepers of financial records, income tax, web addresses and e-mail addresses, directory assistance, etc. No lender will stop to consider all of the ways that a business might be listed, when they look into the business’ creditworthiness. So if they can’t find what they need easily, they will just deny the application.
Plus a business must manage its bank account responsibly. This means that the small business should avoid writing non-sufficient funds (NSF) checks at all costs. Because that decimates bank ratings. Non-sufficient-funds checks are something which no business can afford to let happen. It is even a good idea for the business to add overdraft protection to their bank account as soon as possible. Do this to avoid NSFs.
Your business must show a positive cash flow. The cash coming in and leaving a company’s bank account should reflect a positive free cash flow. A positive free cash flow is the amount of revenue left over after a company has paid all of its expenses.
When an account shows a positive cash flow it means the business generates more revenue than is used to run the company. That means the bank will feel that the business can pay its bills.
Finally, understand that banks are highly motivated to lend to a business with consistent deposits. A business owner must also make regular deposits to maintain a positive bank rating. The business owner must make a lot of consistent deposits, more than the withdrawals they are making, to get and keep a good bank rating. If they can do that, then they will have a good bank credit score. But first, use our hacks to set up your business bank account. And get started the right way.
Share this and tell your friends what you think of our hacks to set up your business bank account in a recession.
The post Awesome! 5 Hacks to Set up Your Business Bank Account in a Recession appeared first on Credit Suite.
You may have heard or read the term ‘trade reference’, but do you really know what it’s all about? Are you asking yourself, what are trade references on a standard business credit application? What are the most important things you should know about trade references? How can they help you in a slump economy?
Building corporate credit is more than just the objective information. It’s also about the subjective. So sit tight, because here are the details.
The number of American banks and also thrifts has been decreasing progressively for a quarter of a century. This is from consolidation in the marketplace as well as deregulation in the 1990s, lowering barriers to interstate banking. See: https://www.fundera.com/blog/happened-americas-small-businesses-financial-crisis-six-years-start-crisis-look-back-10-charts
Assets focused in ever‐larger banks is problematic for small business owners. Big banks are much less likely to make small loans. Economic downturns imply banks come to be extra cautious with financing. Luckily, business credit does not depend on banks. And it is utterly independent of any pandemic.
Here is a standard trade reference definition. A trade reference on a credit application is used to help lenders and business to business suppliers make decisions about whether or not to extend credit to a credit applicant.
So, what are trade references on a credit application? They are one of the only parts of a credit file that isn’t just numbers or court filings!
These credit references for businesses are usually presented in conjunction with a formal credit report. Such a formal credit report would come from a known business credit-rating agency. These are the best-known CRAs, such as Experian or Dun & Bradstreet.
Companies and banks which loan money and extend credit want to be sure that their customers can pay their debts on time and in full. Excellent trade references are an important asset which successful companies should place a high value on.
A trade reference means there is more to go on that numbers. With trade references on credit application, there is a lot more detail.
Lenders and credit suppliers will often ask just how long an account has been open. They will ask about its credit or purchasing limit. And they also want to know how many times (if any) the amount due has been paid late. Such inquiries can come either by phone or in writing.
Creditors naturally place a higher value on customers with longstanding payment histories. Plus they often will save their best deals for credit applicants with the best trade references and credit profiles.
Some banks may not report negative payment histories to the big national credit bureaus (Experian, Equifax, and Dun & Bradstreet) until the borrower is 30 or 60 days late.
And some suppliers, in particular smaller businesses, will not report their client histories at all. These factors make checking trade references vital when companies are making the decision to extend credit.
In addition, month to month payment histories will always represent a far more accurate picture of a small business’s true financial viability. This is because even companies with good cash flow could be taking unreasonable risks at the expense of their suppliers.
Most businesses realize that maintaining a prime credit rating is very important. Therefore, if they start struggling, they may become good at prioritizing their debt and supplier payments.
This is like the old expression, ‘robbing Peter to pay Paul’. By using their cash flow to pay any bank loans and larger suppliers, they might also be putting off smaller creditors. In this way, these businesses on the edge can paint a misleading credit portrait.
Therefore, it is important to start checking both large and small references. As a result, you can save yourself the time and headaches of taking on new clients whose accounts have a high chance of going into collections.
This is true of both companies looking to extend credit, and banks looking to make loans. And for startups, this is really vital. It helps a lot to get trade references for new business.
A standard business credit application will ask for three trade references. These are often creditors and suppliers within the industry. Trade reference examples tend not to be utilities like telephone and gas service.
This is because many struggling businesses may try to put off their suppliers for a month or two, but not the utility companies. At least, they won’t do this if they want their offices to have heat and lights.
Primary and direct references, which include suppliers of items such as computer equipment and raw materials, will be the most valuable.
Secondary trade references may include subcontractors who may be willing to not be paid until the main client pays. As a result, these examples of credit references can be less reliable indicators of a small business’s overall financial health. Still, you should take any negative feedback on a trade reference sheet seriously.
Hit the jackpot and weather any recession with our best webinar and its trustworthy list of seven vendors who can help you build business credit.
A trade reference sample is best. This great business credit reference form came from Business Debt Line. Make sure to fill in the blanks or information in square brackets [].
From:
__________ [Sender’s name]
__________ [Sender’s address]
__________
__________
Date: __________ [Sender wrote the letter on this date]
To:
__________ [Receiver’s name]
__________ [Receiver’s address]
__________
__________
Dear Sir/Madam:
Re: [enter the name of the company you are asking about here]
I have received an application for a credit account from the above named company. Your name has been given as a referee. Therefore, I would be grateful if you could answer the following questions.
How long has the customer traded with you? ________________________________
What are your terms of payment? _______________ days
Does the customer generally pay within the time required? YES/NO
Would you consider the customer to be a good credit risk? YES/NO
Please add any other comments you feel are relevant below.
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
Once you have completed this form please return it in the envelope provided.
Thank you for your assistance.
Yours faithfully,
Signature
Name
For and On Behalf of Your Business
Hit the jackpot and weather any recession with our best webinar and its trustworthy list of seven vendors who can help you build business credit.
Let’s use another business credit application sample. Make sure to fill in the blanks or information in square brackets [], and select anything with a slash (/) and delete the other choice. This is a great trade reference form template.
From:
__________ [Sender’s name]
__________ [Sender’s address]
__________
__________
Date: __________ [Sender wrote the letter on this date]
To:
__________ [Receiver’s name]
__________ [Receiver’s address]
__________
__________
Dear Sir/Madam:
Re: Trade Reference for [your company]
It has been [your company]’s pleasure to conduct business with you for [number] years/months. The company is applying for more credit, and I hope to be able to cite your name as a referee. Would that be possible? Please let me know either way.
If the answer is yes, then I have prepared a few brief questions. Please send back in the enclosed envelope and we will type it up. We will send it back with another self-addressed, stamped envelope, so you can send us a signed copy. Of course we will enclose a copy for you to keep for your records.
Therefore, I would be grateful if you could answer the following questions.
How long has [your company] traded with you? ________________________________
What are your terms of payment? _______________ days
Does [your company] generally pay within the time required? YES/NO
Would you consider [your company] to be a good credit risk? YES/NO
Please add any other comments you feel are relevant below.
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
Once you have completed this form please return it in the envelope provided.
Thank you for your assistance.
Yours faithfully,
Signature
Name
For and On Behalf of Your Business
Hit the jackpot and weather any recession with our best webinar and its trustworthy list of seven vendors who can help you build business credit.
Let’s start with a trade reference example. Make sure to fill in the blanks or information in square brackets [], and select anything with a slash (/) and delete the other choice in this trade reference form.
From:
__________ [Sender’s name]
__________ [Sender’s address]
__________
__________
Date: __________ [Sender wrote the letter on this date]
To:
__________ [Receiver’s name]
__________ [Receiver’s address]
__________
__________
Subject: Trade Reference for [company name]
Dear Sir/Madam:
Thank you for requesting a trade reference. We have done business with the [company name] for [amount of time]. Our terms of payment with them are [number] days.
[Company name] generally pays/does not pay within the time required. Payment patterns with [company name] are/are not subject to seasonal fluctuations. I would/would not consider the customer to be a good credit risk.
If you have any questions, please feel free to contact me.
Yours faithfully,
Signature
Name
Business Name
Send a copy of your trade reference to Dun & Bradstreet here. It will become part of your credit report, available to anyone who pulls your report. Because D&B gives trade references meaning – slump economy or not.
So, what is trade references? Trade references for a small business can provide a much clearer picture of the overall health and day to day operations of a company. These allow a credit or loan provider to dig much deeper into the financial guts of a company.
What is trade reference meaning? What is a trade reference on a credit application? This is the best way to get to the real truth about the business’s financial viability. And that goes double in a slump economy.
The post Awesome! Trade References Can Help in the Slump Economy appeared first on Credit Suite.
We looked at a lot of fair credit business credit cards, and did the research for you. So here are our choices.
Per the SBA, company credit card limits are a whopping 10 – 100 times that of personal credit cards!
This demonstrates you can get a lot more cash with small business credit. And it also means you can have personal credit cards at retailers. So you would now have an extra card at the same shops for your company.
And you will not need collateral, cash flow, or financial data in order to get company credit.
Benefits can differ. So, make certain to select the perk you like from this variety of fair credit business credit cards and reasonable alternatives.
For fair credit, we like the Capital One Spark Classic for Business. It has no yearly fee. There are cash-back rewards. The card earns an unlimited 1% cash back on all purchases. There is an annual fee of $0.
With this card, you will get benefits including an auto rental collision damage waiver, and purchase security. And you also get extended warranty coverage. And you get travel and emergency assistance services.
But BEAR IN MIND: the ongoing APR is 24.74% variable APR. And the penalty APR is even higher, 31.15%. Also, there is no sign-up bonus.
Get it here: https://www.capitalone.com/small-business/credit-cards/spark-classic/
For another choice in fair credit business credit cards, take a look at the Wells Fargo Business Secured Credit Card. It charges a $25 yearly fee per card (up to 10 employee cards). It also requires a minimum security deposit of $500 (up to $25,000) and it is designed to help cardholders establish or rebuild their credit.
Choose if you want to earn 1.5% per dollar in purchases with no limits or get one point for every dollar in purchases. You also earn 1,000 bonus points for every month your company makes $1,000 in purchases on the card.
Also, you get free FICO scores every month. There are no foreign transaction fees. It is possible to upgrade to unsecured credit. Your account is regularly reviewed.
And you may become eligible for an upgrade to an unsecured card with responsible use over time. Approval is not guaranteed and depends on factors including how you manage this and your other accounts.
APR is the current prime rate plus 11.90%. There is no introductory APR period and no sign-up bonus. This is not a card for balance transfers.
Get it here: https://www.wellsfargo.com/biz/business-credit/credit-cards/secured-card/
Establish business credit fast with our research-backed guide to 12 business credit cards and lines.
Build your credit and you will end up no longer needing fair credit business credit cards.
Be sure to check out the Discover it® Student Cash Back card. It has no annual fee. The credit card also offers a six-month introductory period of 0% APR on purchases. And there is an APR of 14.99 – 23.99% variable on all purchases after that period.
One one-of-a-kind feature is that it provides an incentive for students to maintain good grades with a $20 statement credit. If students earn a GPA of 3.0 or better each school year, the card will award the $20 statement credit each year for up to five years.
Use this card to build personal credit. While this is a personal credit card versus a company card, for new credit users, their FICO scores will be important. And this credit card provides an excellent way to raise FICO while also getting rewards.
You can earn 5% cash back at different places each quarter such as grocery stores, gas stations, restaurants or Amazon.com up to the quarterly maximum. After that, this credit card offers unlimited 1% cash back on all purchases.
In the initial year, all cash back rewards are matched 100%.
Downsides include a cash advance fee of either $10 or 5% of the amount of each cash advance, whichever is more. And though they waive the first late payment fee, a fee of up to $37 applies on all other late payments. There is also a returned payment fee of up to $37.
Get it here: https://www.discover.com/credit-cards/cash-back/it-card.html
Cards for transferring balances are another great alternative to fair credit business credit cards.
Check out the Discover it® Cash Back card. There is a 10.99% introductory APR for six months from date of first transfer. So, this is for transfers under this offer which post to your account by January 10, 2019.
After the introductory APR expires, your APR will be 14.99% to 23.99%. So, this is based on your creditworthiness. Your APR will vary with the market, which is based upon the Prime Rate.
You can get 5% cash back at different places every quarter. So, these are establishments like gas stations, grocery stores, restaurants, Amazon.com, or wholesale clubs. But this is up to the quarterly maximum each time you activate. Plus, automatically get unlimited 1% cash back on all other purchases.
You will get an unlimited dollar-for-dollar match of all the cash back you have earned at the end of your first year, automatically.
Get it here: https://www.discover.com/credit-cards/cash-back/it-card.html
Cards with 0% APR can make for a terrific alternative to fair credit business credit cards.
The Bank of America® Business Advantage Travel Rewards World Mastercard® credit card has no annual fee and comes with a 0% introductory APR on purchases for the first nine months. Afterwards, the card has a 13.24 – 23.24% variable APR
Earn 3 points/dollar spent when you book travel with the Bank of America Travel Center and 1.5 points/dollar on all other purchases. You can earn unlimited points and points never expire.
There is a 25,000-point sign-up bonus when you spend $1,000 in the initial 60 days of opening up the account. Cardholders get travel accident insurance, and lost luggage reimbursement.
They also get trip cancellation coverage, trip delay reimbursement and other perks.
There is no introductory rate for balance transfers. Also, bonus categories are limited.
Get it here: https://www.bankofamerica.com/smallbusiness/credit-cards/products/travel-rewards-business-credit-card/
Have a look at the JetBlue Plus Card for an additional offer of a 0% introductory APR
Get six points/dollar on JetBlue purchases, two points/dollar at eateries and grocery stores. And get one point/dollar on all other purchases.
Spend $1,000 in the initial 90 days and pay the annual fee, and get 40,000 bonus points. New cardholders receive a 12 month, 0% initial APR on balance transfers made within 45 days of account opening.
Afterwards, the variable APR on purchases and balance transfers is 17.99%, 21.99% or 26.99%, based upon creditworthiness. Benefits include a free first checked bag and 50% savings on in-flight purchases.
There is a $99 annual fee for this card.
Get it here: https://cards.barclaycardus.com/cards/jetblue-card/
Not paying an annual fee is always helpful. Cards with this feature are a great alternative to fair credit business credit cards.
Check out the Uber Visa Card. Uber is the very first ride-sharing service to offer a credit card, in a partnership with Visa and Barclays.
The card provides 4% back per dollar spent at restaurants, takeout and bars, including UberEATS. Also, earn 3% back on hotel, airfare and vacation home rentals. And get 2% back on online purchases.
So, this includes retailers and subscription services like Uber and Netflix. And get 1% back on all other purchases. Each percent/point has a value of 1 cent. Redeem points for cash back, gift cards or Uber credits directly in the app.
By spending a minimum of $500 in the first 90 days, users can earn a $100 sign-up bonus. Cardholders spending a minimum of $5,000 annually are eligible to receive a $50 credit toward online subscription services.
If you pay your cellphone bill with this card, you are insured up to $600 for cellphone damage or theft.
Cardholders are eligible for exclusive access to certain events and offers. Uber anticipates the majority of these offers to be available in major cities like New York, San Francisco, Los Angeles, Chicago and DC. There is no foreign transaction fee.
But there is no introductory rate. The APR is a variable 16.99%, 22.74% or 25.74%, based on your creditworthiness. Cardholders with less than stellar credit will be on the higher end of the range.
Also, there are restrictions on Uber credits. To redeem points as credits in the Uber app, accrue at least 500 points, or $5. Cardholders can convert a maximum of 50,000 points, or $500, in a given day.
Get it here: https://www.uber.com/c/uber-credit-card/
Not taking Uber? Then you’ll need to fill your gas tank someway. Why not do so with the Costco Anywhere Visa® Business Card by Citi?
This card earns cash back with every purchase. Earn 4% cash back on the first $7,000 spent on eligible gas purchases annually (1% after that). Get 3% cash back at restaurants and on eligible travel purchases. Also, get 2% cash back at Costco and Costco.com. And earn 1% cash back on all other purchases.
Keep in mind: the $0 annual fee is only for Costco members. And an active Costco membership is required. Cardholders will get access to damage and theft purchase protection, extended warranty coverage and travel accident insurance.
Also, there is no sign-up bonus available with this card.
Get it here: https://www.citi.com/credit-cards/credit-card-details/citi.action?ID=Citi-costco-anywhere-visa-business-credit-card
Look at the Ink Business Cash ℠ Credit Card. Companies can earn cash back with every single purchase. Spend $3,000 in the first three months from account opening. And you’ll earn a $500 bonus cash back.
There is a $0 yearly fee with a 0% introductory APR for 12 months on purchases and balance transfers. Afterwards, the APR is a 15.24 – 21.24% variable.
The card features travel and purchase coverage benefits. So, this includes an auto rental collision damage waiver and extended warranty protection.
Earn extra cash back on business categories. So, these include office supply stores, telecommunications, gas stations and restaurants.
Note: this card has a balance transfer fee. Pay 5% of the amount transferred or $5, whichever is greater. Also, there is a foreign transaction fee of 3%.
Get it here: https://creditcards.chase.com/small-business-credit-cards/ink-cash
Get a good look at the United MileagePlus Explorer Business Card.
Earn 2 miles/dollar with United and at restaurants, filling stations and office supply stores. All other purchases get 1 mile/dollar. Earn a 50,000-mile sign-up bonus after spending $3,000 in the initial three months from account opening.
Benefits include priority boarding, a free first checked bag for you and a companion on the same reservation.
Also, get two United Club passes annually. And get hotel and resort perks including upgrades. Additionally, get early check-in and late checkout. And get an auto rental collision damage waiver.
Also, get baggage delay insurance, lost luggage reimbursement, trip cancellation and interruption insurance. Finally, get trip delay reimbursement, purchase protection, price protection and concierge service.
After the first year, the card has an annual fee of $95. APR of 17.99% – 24.99%, based on creditworthiness.
Get it here: https://creditcards.chase.com/small-business-credit-cards/united-mileageplus-explorer-business
Establish business credit fast with our research-backed guide to 12 business credit cards and lines.
Another possibility is the Starwood Preferred Guest Business Credit Card from American Express.
This credit card is for those who stay at Starwood Preferred Guest and Marriott hotels often. Earn six points per dollar of eligible purchases at participating SPG and Marriott Rewards hotels.
And get four points per dollar at American restaurants, American gas stations, and on US purchases for shipping.
Also, earn four points to the dollar on wireless telephone services purchased directly from US service providers. For all other eligible purchases, earn two points per dollar.
Get 75,000 bonus points when you spend $3,000 in the initial three months of account opening. Benefits include free in-room premium internet access, Sheraton Club lounge access, and purchase protection.
Plus you get car rental loss and damage insurance. And you get baggage insurance. There is also a global assistance hotline. And there is a roadside assistance hotline. And get travel accident insurance and extended warranty coverage.
The biggest issue is the annual fee. There is a $0 introductory annual fee for the first year, then it’s $95 after that. Plus there is no 0% introductory APR. Instead, there is a 17.74 – 26.74% variable APR
Get it here: https://www.americanexpress.com/us/credit-cards/business/business-credit-cards/spg-amex-starwood-credit-card
Take a look at the Capital One® Quicksilver® Card. It offers flat-rate rewards of 1.5% on all purchases. There are no limits to the amount of cash back rewards which cardholders can earn. Also, the card has a $0 yearly fee.
New cardholders have a 0% APR on purchases and balance transfers for the first 15 months after opening the account. Then afterwards they have a 14.74 – 24.74% (variable) APR after that.
A cash bonus of $150 is available for those who make a minimum of $500 in purchases in 3 months of account opening.
Also, cash back rewards do not expire for the life of the account. And there is no limit to how much you can earn.
This card also offers travel accident insurance. And you get an auto rental collision damage waiver. There are no foreign transaction fees. And there is extended warranty coverage.
Downsides are the flat reward rate, not allowing for any more than that. And the higher APR after the first 15 months.
Get it here: https://www.capitalone.com/credit-cards/quicksilver/
Establish business credit fast with our research-backed guide to 12 business credit cards and lines.
Take a look at the IHG ® Rewards Club Premier Credit Card. it earns hotel rewards worldwide. For each dollar spent at participating IHG hotels, get 10 points. Get two points per dollar spent at gas stations, grocery stores and restaurants.
Plus all other purchases earn one point. New cardholders can get an 80,000-point sign-up bonus when they spend $2,000 in the first three months of account opening.
This card provides a free one-night hotel stay per year. Plus there is a variety of benefits like travel and purchase coverage and an upgrade to Platinum Elite status with the IHG Rewards Club. The club offers complimentary room upgrades when available and guaranteed room availability.
The most significant issue is that the card does not offer a zero percent APR introductory rate. And the standard APR is 17.99 – 24.99% variable. Also, the annual fee is $89.
Get it here: https://creditcards.chase.com/a1/ihg/premiernaep
Get a look at the Ink Business Preferred Credit Card from Chase. Cardholders earn 3 points for every dollar spent on travel, shipping, internet, cable, phone and qualifying advertising with the card. So, this is up to $150,000 each year. And all other purchases earn an unlimited one point per dollar spent.
This is a Visa credit card.
Cardholders get benefits like purchase protection, trip cancellation or interruption insurance. They also get cellphone protection. And they get extended warranty coverage. And they get an auto rental collision damage waiver.
Earn 80,000 bonus points when you spend $5,000 in the first 3 months from account opening. There is an annual fee of $95. You can add employee credit cards at no additional cost.
This credit card only offers 3 points per dollar to a limit of $150,000 a year. So, this is for travel, shipping, internet, cable, phone and qualifying advertising. All other purchases earn an unlimited flat rate of one point per dollar. And there is no introductory APR
Get it here: https://creditcards.chase.com/small-business-credit-cards/ink-business-preferred
Your absolute best fair credit business credit cards hinge on your credit history and scores.
Only you can select which features you want and need. So make sure to do your homework. What is excellent for you could be disastrous for somebody else.
And, as always, make sure to establish credit in the recommended order for the best, fastest benefits.
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Business owners hear it all the time. You need business credit to run a business. You shouldn’t run your business using personal credit. Business credit is the best way to ensure you can get the funding you need to build and grow your business. The problem is, you don’t hear a lot about what business credit is, how to get it, or how to build business credit score.
Did you know you can’t automatically build business credit score? That’s right. It isn’t like your personal credit score where accounts are automatically reported. You have to be intentional when you want to build business credit score. In fact, if you have not been intentional, you may not even have business credit yet, despite the fact that you own a business.
Before you can even begin to build business credit, you have to establish your business as an entity separate from yourself. Here is how that happens:
This is the most decisive first step in separating your business credit from your personal credit. When you cease operating as a sole proprietorship and incorporate your business, it will be easier for credit agencies to recognize your business separately. You have a few options.
This is the most definitive separation, but it is also the most complicated and expensive. Before choosing this option, be certain there are reasons other than establishing business credit that it needs to be done. If it isn’t necessary for some other reason, there are other, less complicated, and less costly options.
This option basically offers the same separation as the C Corp, but taxes are paid at the personal level, rather than requiring the business to be taxed as well, resulting in double taxation. It is also cheaper than incorporating as a C Corp. If you aren’t required to file as a C corp, this is a good alternative.
Forming a Limited Liability Corporation results in less liability, thus the name, and offers enough separation to serve the purpose of establishing business credit. If you are not required to be a C Corp or S Corp, this is the easiest and most cost-effective way to create the separation of business and personal credit needed.
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You need to apply for an EIN and stop using your Social Security Number as the identifying number for your business. Your SSN is tied to you, personally, and it is virtually guaranteed that anything connected credit-wise will end up on your personal credit reports.
The process for applying for and EIN is easy. The IRS has an online form, and as soon as all the information is verified you receive your number. It typically happens almost immediately.
Dun and Bradstreet (D&B) is the most widely used business credit reporting agency. They issue each business on file a 9-digit DUNS number. Application is easy and free, and once you have that number, you will be even closer to establishing credit for your business separate from your own.
Your business needs its own phone number. This way, when you apply for credit, you can enter contact information that is separate from your own. When information is reported to agencies, sometimes the phone number is an identifying factor. If you and your business share a number, that just decreases the level of separation.
Be sure you get your business phone number listed in the directory under the business name.
There has to be a dedicated business bank account. Run all business transactions through this account. Resist the temptation to pay personal expenses from it by paying yourself a salary instead.
The next question is, how do you build business credit score if you have business credit already, but it is bad? How do you improve your business credit score? It is impossible to improve on anything if you do not know what you are starting with, what you have to work with, and what you have control over. Let’s break down where exactly your business credit score comes from and what it means. This is important to get a good starting point.
Dun & Bradstreet offers several different types of business credit reports. In fact, there are six different reporting options in all. They all offer different information related to credit worthiness. It takes all of them to get the whole picture.
The report most used is the PAYDEX. This is probably because it is the easiest to understand. It is the options most like the consumer FICO score. It measures how quickly a customer makes payments and ranges from 1 to 100. Scores of 70 or higher are acceptable. For reference, a score of 100 shows payments are made in advance, and a score of 1 indicates that they are 120 days late, or more.
Experian uses what it calls Intelliscore as its credit ranking. There are more than 800 different factors that they use to predict a company’s credit risk. With Intelliscore, a score of 76 or higher indicates a low risk of default or late payment. If a score falls between 51 to 75, it indicates a low to medium risk. Scores from 26 to 50 are medium risk, and from 25 down to 1 is medium high to high risk.
Experian Commercial offers a number of other scores as well, similar to Dun & Bradstreet.
Equifax gets its business credit data in ways similar to D&B and Experian. They get Net 30 type industry trade credit information from a wide variety of suppliers that provide products and services to businesses on an invoice basis.
In addition, they use financial data with this industry trade data, and they add in utility and telephone payment data. They also use public records information.
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Equifax Business credit scores include:
It is scored on a scale of 1 to 100, with 90+ indicating that a business has paid its obligations as agreed. An 80 to 89 means they are 1 to 30 days past due, 60 to 79 indicates they are 31-60 days overdue, 40 to 59 is 61 to 90 days past the payment date. It just goes down from there.
This score indicates the chance of a company paying its bills late on the following scale:
The FICO SBSS is the business version of your personal FICO credit score. It is becoming increasingly more common for lenders to use this score, rather than the Experian or even the D&B PAYDEX business credit score.
Unlike your personal FICO, the SBSS reports on a scale of 0 to 300. Of course, the higher the better, but most lenders require a score of at least 160.
This is a lot different from other business credit scoring models because it combines your business credit score, personal credit score, and other financial information such as business assets and revenue. It is a total global financial picture rolled into one score.
Unfortunately, there are not a lot of ways to find out what your business credit score is without paying. Find out how to get business credit reports for free here. Most options do not work on a continual basis however. You will eventually have to pay.
The prices are not cheap. Here are the prices for the top 3 business credit reporting agencies:
As for your FICO SBSS, that is a whole other story. You cannot really get a copy of it because it will be different from lender to lender. They system calculates a score based on what the lender tells it to look for. This means the lender can weight certain aspects of the calculation. For example, if one lender says that they want the personal credit history to be heavily weighted and another prefers to focus on another type of debt, those two lenders will have two different scores. Meanwhile, another lender may leave out student loans all together. The next may not want any personal credit information at all. With the huge number of possibilities, you could feasibly have a different FICO SBSS score every time.
With Credit Suite, you can monitor your scores with Dun & Bradstreet and Experian for a fraction of the cost. Get more information here.
Once you understand where it comes from, what it is, and what it means, you can get to work and build business credit score. Here are some of our favorite tips.
The fastest way to build business credit score is to get as many accounts as possible reporting on-time payments. The fastest way to do this is to work with starter vendors.
These are vendors that will offer net terms on invoices without a credit check. After you pay, they will report those payments to the credit agencies. As more and more of these vendors report your payments, your business credit score will start to grow.
Another way to get more accounts reporting on-time payments is to ask vendors you already work with to report. You pay things like rent, utilities, and your telephone bill each month. Sometimes if you ask them, they will report those payments. They are not required to though.
This is one thing that a lot of business owners do not realize they can do to build business credit score. Once you are able to see your business credit report, be sure to dispute any mistakes you find. Do this in writing. When you send the letter, you have to be very detailed about what the mistake is. Be clear about the correct information, and send copies of supporting documents. These are documents like receipts and cancelled checks. Additionally, use certified mail to send dispute information. .
Dispute your or your business’s Equifax report by following the instructions here: www.equifax.com/small-business-faqs/#Dispute-FAQs.
You can dispute mistakes on your or your business’s Experian report by following the instructions here: www.experian.com/small-business/business-credit-information.jsp.
And D&B’s PAYDEX Customer Service contact number is here: www.dandb.com/glossary/paydex.
Share our foolproof business credit building checklist and tell your friends about how you’re building business credit the quick and easy way.
The Small Business Finance Exchange collects information from its members for their database. They then provide this information to partner credit agencies. These credit agencies can then distribute that information to other SBFE members seeking credit data on potential borrowers. Consequently, by doing business with members of the Small Business Exchange, you ensure that the credit agencies have as much information as possible related to your business.
It’s important to remember that using too much of your available credit can cause problems. Your credit utilization, as indicated by your debt-to-credit ratio, needs to stay as low as possible. So you cannot use up every bit of credit you have. Carrying balances close to your limits will raise this ratio. As a result, your credit score will go down. Granted, you need to carry balances and make payments to get those payments reported. However, avoid getting too close to your limits.
Despite the fact that business credit is separate from your personal credit, there are some business credit reporting agencies, like Experian Business and FICO SBSS, that use your personal credit history in the calculation. As a result, it is possible for a poor personal credit score to have a negative effect on your business credit score. So don’t neglect it.
Here’s the thing. It will not do you any good to get more accounts reporting, correct mistakes, or work with SBFE members if you are not making payments on time. Regardless of how much credit you have available and how little you are using, not paying will tank your score fast. Hence, it will totally negate any progress you make to build business credit score. You just have to pay, on-time, and consistently.
Whether you are starting from scratch or trying to build up a bad score, trying to build business credit score can be completely overwhelming. Honestly, you have to start somewhere though, right? These tips can help you find a good starting point, and from there you just keep swimming.
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Long Haul Truckers: Here’s How to Build Business Credit Quickly Who needs business credit for trucking? We can help you get it. Here’s how to build business credit quickly. Why, exactly, do you need business credit for trucking? We’ve got the answers here – business credit works for all business and not just traditional companies! … Continue reading How to Build Business Credit Quickly: Awesome Secrets for Long Haul Truckers
Who needs business credit for trucking? We can help you get it. Here’s how to build business credit quickly.
Why, exactly, do you need business credit for trucking? We’ve got the answers here – business credit works for all business and not just traditional companies!
Business Credit for Trucking: Why get Business Credit in the First Place?
If you’ve got an EIN, then the IRS says you’ve got a business. But if you only have personal credit, then you’ll be accountable for your business’s debts, its tax bills, and its bankruptcy, if that happens. You don’t want this. Separate business from personal credit and it won’t.
And specifically, fleet credit will precisely help your trucking business. And gasoline credit cards will, too. We all know how pricey it is to fill up these days.
Business Credit is credit obtained in a business’s name. With business credit the firm builds its own credit profile and credit score. With an established credit profile and score, the company will then qualify for credit.
Since the business gets approval for the credit, in some cases, there is no personal credit check needed from the firm owner. The business can utilize its credit to get approval for retail credit tier credit cards.
These come from places like BP, Sunoco, Exxon, Shell, Ford, RGS Fleets, Walmart, even MasterCard, Visa, and AMEX. Additionally the company can utilize its credit to get approval for fleet credit for repair and maintenance of business vehicles including semis. And the firm can also qualify for lines of credit and loans.
A credit profile can be created for a business which is utterly independent from the firm owner’s personal credit profile. This offers firm owners two times the borrowing power as they have both personal and business credit profiles.
A business owner can get credit much more quickly using their business credit profile rather than their personal credit profile. Approval limits are much higher on business accounts as opposed to personal accounts. According to the SBA, credit limits on business cards are usually 10 – 100 times higher than for consumer credit.
Dun & Bradstreet’s Business PAYDEX scores are based upon payment history.
But personal credit scores are based on 5 factors:
When done right, business credit can be established without a personal credit check and irrespective of personal credit quality, without any personal credit reporting of business accounts. Most business credit may be obtained without having the owner assuming personal liability, or a personal guarantee.
Hence in the event of default, the company owner’s private assets can’t be attached. When a business owner applies for financing, their business credit is under review. Not having business credit built will get an owner declined for funding. There are no regulations requiring lenders to notify the business owner for their reason for rejection, so many never know.
Virtually any company can get business credit so long as it has an EIN number and entity set up. You do not need to have collateral or financials. Your firm can be a startup company. You simply need to understand the proper building steps. All highly-successful firms have business credit; it’s a “rite of passage” to ever attain real success.
A firm starts developing a brand new credit profile almost the same as a consumer does. The business starts off with no credit profile. The company gets approval for new credit which reports to the business CRAs. Then the company uses the credit and pays the bill promptly. A favorable business credit profile is established.
As the business continues using credit and covers bills promptly it will get approval for more credit.
The understanding lending institutions, retail merchants, and creditors have of your company is important to your ability to establish strong business credit. Before making an application for business credit a firm must properly insure it meets or surpasses all lender credibility specifications. There are over 20 credibility points that are needed for your business to have a solid, reputable foundation.
It is essential that you use your exact business legal name. Your full firm name should include any recorded DBA filing you are using. Make sure your company name is precisely the same on your corporation papers, licenses, and bank statements.
You can build business credit with virtually any type of corporate entity. If you truly wish to separate business credit from personal credit your business must be a separate legal entity. Hence it cannot be a sole proprietor or partnership.
Unless you have a separate business entity (Corporation or LLC) you might be ‘doing business’ but not truly ‘a business’. You need to be a Corporation or an LLC to differentiate personal from business.
Whether you have employees, your business entity must have an EIN. Your EIN is used to open your bank account and to establish your business credit profile. So take the time to verify that all agencies, banks, and trade credit vendors have your business on file with the exact same EIN.
Your firm address must be a genuine brick-and-mortar location, with a deliverable physical address. It cannot be a home address, a PO Box, or a UPS address. Some lending institutions will not approve and fund unless these requirements are met.
However, virtual addresses are terrific business address solutions. For address only, you will receive mail and packages at a dedicated business address. For a virtual office, you get a professional business address, and dedicated phone and fax numbers. And you also get receptionist services and part-time use of fully furnished offices and conference rooms.
And for a genuine office, you’ll have your own full-time private office with receptionist services, dedicated phone and fax, internet, full furnishings, conference rooms, and more.
You must have a dedicated firm phone number listed with 411 directory assistance, under the company name. Lenders, vendors, creditors, and even insurance providers will validate your business is listed with 411. A toll-free telephone number will give your company credibility. But you need to have a local business number for a listing with 411 directory assistance.
Lenders view 800 number or toll-free phone numbers as proof of business credibility. Even if you’re a solitary owner with a home-based business, a toll-free number makes you seem like an even bigger business. It’s very easy and affordable to set up a virtual local telephone number or a toll free 800 number.
A cell or home telephone number as your main business line could get you flagged as a non-established firm, which is too high of a risk. Do not give a personal cell phone or residential telephone as the company telephone number! You can forward a virtual number to any cell or land line telephone number.
Lenders also feel a firm is more legitimate if it has a fax number. As a business you will need a fax number to receive important documents, you will also need it to fax in some of your credit applications. You can set up an e-fax going directly to your email.
You will also need a business website. Credit providers will research your business on the net. It is best if they discovered everything directly from your business website. Not having a website will significantly damage your chances of getting business credit.
There are many places on the internet offering inexpensive company websites. That way, you can have an internet presence displaying an overview of your firm’s services and contact information.
Plus, it is critical to get a company email address for your company. It’s not only professional, but significantly helps your chances of getting an approval from a credit provider.
Setting up a business email address is just too simple and inexpensive to overlook. When it concerns your business email, never use free email services like Yahoo and Hotmail. The email address should be at yourcompany.com.
Your company banking history is important to long term success in acquiring more substantial business loans. The date you establish your business bank account is the day that loan providers consider your company launched, no matter when you incorporated or achieved any other business milestone. The longer your business banking history, the better your borrowing potential is.
Having a high account balance is crucial in obtaining an excellent Bank Rating. And a good Bank Rating is essential for loan approval later on. Try to keep a bank balance of $10,000 or more for a 5 Bank Rating. In that way, you are more likely to get approval for loans eventually.
A common mistake when developing credit for a firm is non-matching business addresses on the business licenses. Even worse is not having the licenses necessary for a trucking company to operate legally.
Contact the State, County, and City Government offices to see whether there are any necessary licenses and permits to operate your trucking business. This includes your commercial driver’s license. You must list your business filings correctly at the state, county, and city levels. Plus your IRS filings must have correct listings.
Also make sure to confirm that main agencies (State, IRS, Bank, and the 411 national directory) have the same listing for your company and with your precise legal name. Also make certain every single bill you get has a correct listing for your business name and comes to your company address.
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Make sure your firm has a listing with Dun and Bradstreet. If it isn’t, then get a D-U-N-S Number. This number starts the process of developing your business credit profile with them. Your D-U-N-S number will also play an important role in allowing your company to borrow without a personal guarantor. You can get your D-U-N-S number here: dnb.com. And you can also enroll for the DNBi SelfMonitor to monitor your credit. A subscription is $39-99/ month.
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Our business finance suite includes monitoring.
Don’t want to take the plunge yet? Then visit smartbusinessreports.com for a copy of your Experian Smart Business report. It costs $49 – 99. Learn how many trade lines are reporting, and see if you have a business credit score assigned. See if you have an active Experian Business Profile, and check on recent inquiries.
Buy a copy of your Equifax Small Business Credit Report here: https://www.equifax.com/business/business-credit-reports-small-business. It is $99.95 for a full report.
This is the beginning of business credit for trucking companies.
It is when a vendor extends a line of credit to your company on ‘Net 15, 30, 60 or 90’ day terms. This means you can buy their products or services up to a maximum dollar amount. And then you have 15, 30, 60 or 90 days to pay the bill fully.
So if you’re set up on Net 30 terms and purchased goods today, then repayment is due in the next 30 days. Get products for your business needs and postpone payment on those for 30 days, thereby easing cash flow. Some merchants will approve a firm for Net 30 payment terms upon verification of as little as an EIN and a 411 listing.
We have a great list of starter vendors here: https://www.creditsuite.com/blog/5-vendor-accounts-that-build-your-business-credit/
Be sure to apply first without using your Social Security Number. Some vendors will request it and may even tell you on the phone they need to have it. But submit first without it. Keep in mind: A Social Security Number is required for business loans but not for initial vendor credit building.
Some vendors require an initial prepaid order before they can authorize your firm for terms. When your first Net 30 account reports your trade line to Dun and Bradstreet, the D-U-N-S system will automatically activate your file if it isn’t already. This is also true for Experian and Equifax.
Repay all Net 30 vendor accounts in full and promptly. Be patient and allow time for the vendors’ reporting cycles to get into the reporting systems.
It commonly takes 3 cycles of Net accounts reporting to develop credit scores. Most merchants and major retailers offer business credit, but don’t publicize it. Having said that, there is no benefit to the merchant to promote credit without personal liability if a business owner agrees to take on that liability. So they do not promote their business credit cards and frequently demand an SSN.
You must have a total of at least five (5) Net 30 day pay accounts reporting although eight (8) are better, to move onto the next tier.
After you set up 5 – 8 trade lines by utilizing vendor accounts, getting retail accounts is the next step. These are cards which a business owner can make use of and they don’t have to pay the full balance owed each month.
Retail credit tier approvals will start coming from stores. You must get retail credit prior to you, the business owner, can start getting Visa, MC, and Amex-type cards.
Most stores will not approve a business owner for business credit unless the owner has an established credit profile and score, a lot like in the consumer world. Vendor accounts must be utilized first to set up a profile and score, and after that your firm can get store credit. It generally takes a mere 90 days or less to set up a score and profile with trade lines.
Most major stores offer business credit such as: Racetrac, the Fuelman MasterCard, Ally Car Financing, and Phillips 66/Conoco/76 Commercial.
Once 10 total accounts are on report, a firm owner can then start applying for Visa, MC, and Amex-type credit. Approval amounts will equal the greatest credit limit account on the business report.
For that reason, try to have 10 accounts with at minimum one of them having a $10,000 high limit. Keep using the credit, and keep applying for more, and speak with credit providers to increase credit limits. If you do this, your business credit will keep growing until you can get higher limit credit lines, normally within 6 – 12 months.
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As soon as you have 10 – 15 accounts, you can begin to get approval for fleet credit and auto vehicle financing. You must have at least one account with a $10,000 high credit limit to get authorization for most fleet credit sources.
Plus you must have higher scores, 75 or higher with Dun and Bradstreet. This score just confirms you pay your bills on time. Fleet credit is for everything to do with business vehicles and can be used at multiple locations. Its uses include fuel purchases, and vehicle repair work and maintenance.
As you keep building more business credit, you’ll get approvals for more high-limit accounts. Many loans will ask for a personal guarantee and credit check for approval.
And you will need well over 20 reported accounts, a bigger number of employees, and higher revenue and profits to get loans without these. Being responsible with fleet credit will lead straight to getting vehicle financing.
This is one more practical option. Unsecured credit is not secured with collateral. Good personal credit gets you unsecured credit cards with a personal guarantee; this normally means a 685 score or better. Good business credit gets you unsecured credit cards without any personal guarantee. The amount you can finance is often very high, as in $10,000 – 50,000, and you can get it in 1 – 4 weeks.
You can also get cash flow-based lending; these are short term loans of 6 – 18 months, with amounts as much as $1 million. The loan amounts are equal to 8 – 12% of annual revenue, with rates of 10 – 45%. A 520 credit score is accepted, but good bank statements are required.
A revenue loan (or revenue-based loan) is an alternative kind of loan. In contrast to a bank loan, it doesn’t require collateral or substantial assets. And unlike angel investing or venture capital, they do not give you cash in trade for a portion of the business. Rather, you repay the loan (or credit line) as a percent of incoming revenue. See: https://en.wikipedia.org/wiki/Revenue-based_financing.
The lender (investors, really) will take an equity warrant which means they have a fixed price if they want to buy stock in the business until an expiration date. And the business owner does not need to back the loan with their own personal assets. They do no valuation on the company’s assets.
All you need is:
One way to get revenue-based financing is via crowdfunding platforms. Interest paid is often a tax deduction for the firm. Costs tend to be more than for traditional bank loans. It’s not for very early stage startups, by definition. But it may be a decent choice for a firm about 2 – 4 years old, with revenue coming in but banks still aren’t providing loans.
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Our preferred provider is Fundbox. It’s a suitable option for short-term financing. The gist is you borrow on a line of credit to be repaid every week for up to 12 weeks. This is done via automatic deductions from your business bank account. $1,000 – $100,000 is available. There are no minimum credit score requirements.
Requirements:
Find them online at: https://fundbox.com/lines-credit.
You have a lot of options when it comes to getting business credit for trucking companies.
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