Tag: Business

How to Use Strong Business Credit to Unlock the Power of Advanced Business Vendors

We always talk about building business credit, and how a strong business credit score can help you get funding for your business. It can help you fund your business without overloading your personal credit.  Also, it can help you reduce your need for a personal guarantee when you need business financing. Yet, there is one huge benefit to strong business credit that is rarely mentioned. That is access to advanced business vendors.

Advanced Business Vendors are One of the Real Benefits of Business Credit

There is a misconception among many business owners that are just starting to understand business credit.  It is that a good business credit score can help you get a business loan without a personal guarantee. However, the truth is, pretty much every small business loan from a traditional lender will require a personal guarantee.

That being the case, is it really necessary to build business credit? Wouldn’t it be better to work on personal credit so a lender will accept your personal guarantee? What is business credit good for if not to help you get a business loan?

What frustrates you the most about funding your business? Check out how our free guide can help.

First, it can help you get a business loan. If your personal credit isn’t great and you have good business credit, underwriters will see that as a positive. Also, good business credit can help reduce the reliance of lenders on a personal guarantee, even if it doesn’t go away completely.

But the real benefit of business credit is that it allows you to access advanced business vendors.

What are Advanced Business Vendors?

These are vendors that offer credit to businesses that have strong business credit, but they may not report your payments.  That means they don’t help build your business credit score. Still, they are pivotal to running a thriving business.

Unlocking access to these vendors is a little realized benefit of a strong business credit score. If you have access to credit with advanced vendors you can grow your business in ways you may have never imagined

For example, you can bid on the big project even if you don’t have the cash flow to buy the supplies. You can offer the latest new product despite not having cash flow to keep up with demand. Basically, it opens up a whole new world as far as what you can and cannot do in your business.

What Does This Look Like Practically?

It may be hard to wrap your mind around exactly what this looks like in real life.  Especially when you are just thinking about credit cards and business loans.  Some examples may help.

Example 1: Remodeling Contractor Needs Supplies Before Payment

Suppose a contractor is hired to remodel a kitchen. The supplies are going to cost money, but the client isn’t going to pay until the job is done. However, if the contractor has business credit with advanced vendors to purchase the supplies, he or she can still take the job.  They will pay suppliers when the customer pays.

Example 2: Restaurant Owner Must Keep Up With Customer Demand

A restaurant owner needs to keep up with customer demand. Dishwashers are not keeping up, and they need more utensils and serving dishes. A vendor account with a restaurant supplier makes this a non-issue.  Just purchase what you need now, and pay the next month when meeting the increased demand pays off.

Example 3: Music Teacher Needs to Provide Various Instruments to Beginner Students

A music teacher has a studio to offer lessons to children.  As beginners, many of them do not have an instrument at first,  They likely do not even know what they want to play.  Business credit accounts with instrument suppliers, as well as suppliers of those things needed to maintain instruments can help. They will allow the teacher to provide a number of various types of instruments for students to try.

Students may even purchase instruments from the school once they choose what they want to play. This may offer an incentive to choose lessons at that specific school, as parents will not be spending on an instrument that may or may not get played.

Each example shows how advanced business vendors can help a business grow in a way that would not be possible otherwise. Of course, business credit cards may work. However, with vendors you usually have net terms. That means you cannot carry a balance, which reduces the risk of racking up huge amounts of debt.  Accounts like this are the reason you work to build strong business credit.

What frustrates you the most about funding your business? Check out how our free guide can help.

How To Find Advanced Business Vendors

Not all suppliers will offer this type of credit. The ones that do don’t necessarily advertise it. You typically have to know to ask for it or develop a relationship with them first.  This can take a lot of time.

Luckily, you can speed up the process by working with someone who knows who these vendors are. You need someone who already has a relationship with the vendors.  They can help you find the ones that will work best with your business. Of course, whoever you are working with has to know and understand your business as well.  Then, they will  know which vendors you will qualify for advanced business credit with.

The Benefit of the Credit Suite Business Credit Builder

This is a little known benefit of the Credit Suite Business Credit Builder. You have access to the platform for 5 years!  So, after you work through the business credit building process, you still have access to our huge database of advanced business vendors.

Furthermore, we tell you just what is required to get approved with each one. Of course, there are too many vendors to list in one presentation.  Still, a little taste of what is available can help you see that advanced vendors are just what you need.

Then you can run your business the way you need to.

Access Hardware Supply

Access Hardware Supply is a leading wholesale distributor of products from the top names in door hardware and security technology.

Qualification requirements include:

  • Entity in good standing with Secretary of State
  • EIN
  • Business address- matching everywhere
  • D & B number
  • Business License- if applicable
  • Business Bank account
  • Bank reference
  • Trade references
  • A good Experian business credit score

There is no minimum time in business necessary, and terms are net 30, 60, or 90. You can apply online or on the phone.

Central Restaurant Products

Central Restaurant Products has beens selling pretty much anything needed for the food service industry since 1981.

Qualification requirements include:

  • Entity in good standing with Secretary of State
  • Business credit history
  • EIN
  • Business address- matching everywhere.
  • D&B number
  • Business License- if applicable
  • Business Bank account
  • Bank reference
  • Trade/credit references
  • At least 1 year in business
  • D&B paydex score of 80 or higher

Terms are Net 30.

Sherwin Williams

Sherwin Williams is a widely known provider of paint and coatings for over 150 years.

Qualification requirements include:

  • Entity in good standing with Secretary of State
  • EIN number with IRS
  • Business address- matching everywhere
  • D&B number
  • Business License- if applicable
  • Business Bank account
  • 3 Trade references

If there is not enough business credit history, a personal guarantee (PG) is required. You have to apply for the account in the store, and terms are net 20.

Personal Guarantee

Sherwin Williams is a great example of how business credit can help your business, and help you avoid a personal guarantee in some instances. If you give a personal guarantee, the account may show up on your personal credit report. However, without a personal guarantee, using your business information, that is likely not to be the case.

Remember, a personal guarantee isn’t a bad thing. In fact, it may be the only option you have to get the funding you need until you build strong business credit. At least, that is, if you have good personal credit and you want to avoid very high interest rates.

But not using a personal guarantee keeps your personal credit available for personal financial needs.

Trade References

You may also notice that each of these vendors requires trade references. A trade reference is a report that details the payment history between a company and a vendor. It can come verbally, in a letter, or on a business credit report. Vendors that do not report to the business credit reporting agencies may be willing to provide a trade reference.  As a result, they can still help you get funding.

What frustrates you the most about funding your business? Check out how our free guide can help.

Unlock the Power of Advanced Business Vendors

Access to advanced business vendors is a huge benefit of strong business credit. They offer funding to help you build and grow your business, without paying unnecessary interest. They also help you avoid the temptation of carrying a large balance unnecessarily.

Of course, you have to manage the vendors in your credit portfolio carefully. Be sure you can repay and do so on time. Even if they do not report positive payment history, they are likely to report negative payment history.  Plus, you want to keep a good relationship with them. Not to mention, if you do not pay responsibly, you will not be able to get good trade references from them.

Ready to get started business business credit and unlock the power of advanced business vendors?  Try a free consultation with a business credit specialist.

The post How to Use Strong Business Credit to Unlock the Power of Advanced Business Vendors appeared first on Credit Suite.

2021 Inflation and the Cost of Doing Business

2021 Inflation, You, and 2022

If you pay attention to business news—and even some national news—you’ve likely heard that 2021 inflation is coming. Or maybe that we’ll be spared until 2022.

But that’s wrong. 2021 inflation is already here.

Wait, what?

Is Inflation Coming Soon?

Economic predictions are, of course, never guaranteed. But per the New York Times, “there’s enough evidence to believe that a further upturn in inflation is coming.” But inflation isn’t all bad. Once the stock market calms down, an inflationary period is often the best time to buy stocks.

Per Inflation Calculator, the trouble started in March of this year. In January and February, inflation was at 1.4 and 1.7%, respectively. Then in March, it crept up to 2.6%.  In April, it was already 4.2%.

Then in May, it hit 5.0%. And now, through August, it hasn’t gone below 5.0%.

That’s more than a little troubling.

But What Exactly is 2021 Inflation?

Or, inflation in any year?

Per Investopedia, inflation is “the decline of purchasing power of a given currency over time. A quantitative estimate of the rate at which the decline in purchasing power occurs can be reflected in the increase of an average price level of a basket of selected goods and services in an economy over some period of time. The rise in the general level of prices, often expressed as a percentage, means that a unit of currency effectively buys less than it did in prior periods.”

In plain language, inflation is best understood through an example. In 1970, the standard cost of a new car was a little over $3,500. Yet in 1980, the average cost was $7,000. And in 2010, it was a little over $29,000. While the Covid-19 pandemic reduced prices, it didn’t reduce them even to 2010 levels. In 50 years, the average price of a new car went up close to ten times!

What Does the Federal Reserve Do?

If and when inflation strikes, the Federal Reserve will most likely raise short-term interest rates. The reason is to make it more attractive for banks to lend money. During an inflationary period, lenders will demand higher interest rates as compensation for the decrease in purchasing power of the money they are paid in the future. The Federal government will also sell off US securities. This takes money out of banks. And since the banks have less to lend, it forces the banks to raise interest rates.

Why Are We Experiencing 2021 Inflation Right Now?

What we’ve got right now is a near-perfect storm of circumstances, and it’s incubating the 2021 inflation we’re seeing.

Discover our business credit and finance guide, jam-packed with new ways to finance your business without emptying your wallet.

Reason #1: Supply Chain Disruptions

Remember the Great Toilet Paper Shortage of 2020? Remember that container ship that was stuck in the Suez Canal? The former was due to hoarding. And the latter caused some disruptions, but those were supposed to be done.

Not so fast. If you’ve had to have any work done on your home in the past year, you’ve experienced how slow and difficult it is to get lumber. This basic, vital commodity can still be obtained—but it takes longer. And delays cost money. Because those costs are passed on to the consumer, prices rise. Hence, 2021 inflation.

Reason #2: COVID-19

Well, of course. The pandemic doesn’t cause inflation by itself. But our country (as of the day writing this blog post) is missing over 600,000 people from the workforce.

When labor is scarce, it helps to raise salaries. This is because workers have gotten into a better bargaining position.

When there aren’t a lot of jobs and too few and too many workers to fill them, then the employer is in the catbird seat. They can set wages, and often those wages can be low. But the opposite is true right now. With businesses awash in jobs, but not enough people to fill them, potential employees are starting to dictate terms.

And their terms include higher salaries.

Health Care Workers, a Special Case

In addition to people trying to dictate better terms, we also have an issue with healthcare workers. Every day in the news, you see stories of health care workers who are just plain fed up. It could be that they’ve seen far too many COVID patients die, or they are angry at people who aren’t vaccinated, or they refuse to be vaccinated themselves. In any of these circumstances, this means that they just plain don’t want to work. They are ready to throw in the towel and leave.

And what is especially interesting about this is that nursing in particular was only until recently considered to be a recession-proof profession. Hospitals, nursing homes and more could barely fill job openings.

But now they really can’t fill job openings.

Retail and Hospitality Workers: Another Special Case

For people who normally make either minimum wage, or make some of their money in tips, the pandemic and its resultant pauses in our lives has led a lot of them to reconsider their career choices. People are also considering that if they need to enforce a mask requirement, then they may have few to no tools with which to do that. These people are tired of being abused, particularly for a very low salary.

So they want more money. And they’re tired of working three jobs to be able to feed their families and make rent. They’re just plain tired.

Reason #3: People Restarting Their Lives

In addition to hospitality and health care workers, there are a number of other people who don’t necessarily fit into those buckets. But during shutdowns in particular, they reassessed their lives. And some of them realized that they didn’t want to do what they had been doing. There’s nothing wrong with this. People change their careers all the time. But what we’re seeing right now is a wholesale change in hundreds of thousands if not millions of people.

Because, at times, those people are used to higher salaries, they are trying to demand them even if they need to start over at the bottom.

Social media and the regular mainstream media don’t help. If they tell people that they can get more money to do any kind of work, then job seekers will start demanding higher salaries, and continue to do so. No one will want to demand a lower salary, of course.

Discover our business credit and finance guide, jam-packed with new ways to finance your business without emptying your wallet.

Reason #4: Side Hustles

As a corollary to people changing their lives, there are also people who may have thought that they wanted to perhaps change things. But they weren’t ready to jump in headfirst. As a result, they’ve created side hustles of various kinds. With eBay, Etsy, Upwork, and various other sites where you can sell or offer your services online, people are spreading their wings and trying to do something different.

A businessperson might decide that because they make incredible muffins, that they should go into the bakery business. But chances are the bakery business is not very easy to succeed in. So instead of quitting their day job, they bake muffins on the side, and ship them. They can do so without an office, and can quit pretty much whenever they need to.

Higher Starting Wages and Decreased Supply Equals 2021 Inflation

Prices are going up. Whether it’s because of shortages, or potential workers demanding higher salaries, either way, prices are rising. Hence, 2021 inflation.

How Does 2021 Inflation Change How You Run Your Business?

The first obvious reason is that the cost of supplies is increasing. There are parts of this country where gasoline costs over $5 per gallon. And shortages of other supplies, such as lumber (mentioned above), means that everything takes longer to do. If you would normally complete, say, ten jobs in a week, but you can only complete eight now, then you will have to pass your added costs onto the consumer. And since you still need to pay rent, feed your family, and perhaps make payroll, you’ll raise prices.

If you raise prices, then other people will as well. And around and around we go.

The Inflationary Cycle

2021 Inflation Credit SuiteInflation will cut into your profit margin unless you raise your prices.

If your business customers raise their prices, that perpetuates a cycle of price increases. Government clients may start to rack up municipal debt. Individual customers might buy less, and they may even take their business elsewhere. But since inflation hits everyone, chances are they won’t find a safe haven with lower prices at your competitors’.

How Can Your Business Ride Out Inflation?

You will need business capital. This is the money or wealth needed to produce goods and services. All businesses have to buy assets and maintain their operations. Business capital comes in two main forms: debt and equity. Getting capital for business financing should be your concern.

Business financing is the act of leveraging debt, retained earnings, and/or equity. Its purpose is to get funds for business activities, making purchases, or investing. With lower retained earnings and perhaps less equity, it’s a good time to leverage debt. One way you can do so is to request a credit line increase, particularly if you’ve been a good credit customer and have paid your business’s bills on time.

Building and improving your business credit is a great way to help your business ride out inflation. Buying on credit means you can wait a bit (although not forever) to pay for goods and services. If prices go down, particularly during a grace period where you don’t have to pay, you’ll do better. But better terms will only come to your business if your business credit is good.

Discover our business credit and finance guide, jam-packed with new ways to finance your business without emptying your wallet.

How Can Your Business Prepare for Inflation?

It’s already here, but it may get worse. And, no matter what, it’ll come back when it’s finally gone. So here are some ways to get your business ready.

Your money won’t go as far. So before inflation hits harder, it should be a good idea to invest in new equipment if you need it. This may mean leveraging accounts receivable or using merchant cash advances to get capital now so you can act before inflation skyrockets.

It may also mean equipment financing and/or equipment sale and leaseback. So you can spread payments out over time.

And build business credit. Because if prices are going to rise, you want to buy from starter and other reporting vendors before that happens.

Getting Through 2021 Inflation Now, and Coming Out Better on the Other Side: Takeaways

As prices continue to rise, and demands for goods, services, and workers goes unfulfilled, inflation has the potential to worsen before it gets better. Act now. Secure larger ticket items your business needs before they become more expensive. If you need to hire, see if you can offer non-salary incentives to help break the cycle, such as offering more vacation time to new employees. And work to build your business credit before you need it, to better weather 2021 inflation and beyond. Good business credit is an asset that won’t lose its value, no matter what the economy does.

The post 2021 Inflation and the Cost of Doing Business appeared first on Credit Suite.

The Best Options for Small Business Startup Grants Revealed

Business grants are not easy to come by for anyone, but for startups, it’s a whole other story. Small business startup grants do exist.  However, they are even more competitive than grants for existing businesses. We have put together a list of some of the best options, along with some tips on funding startups if grants aren’t enough. 

Are Small Business Startup Grants Always the Best Option? 

There are a lot of options out there when it comes to small business grants. Who doesn’t want a grant?  After all, it’s free money. You don’t have to pay it back. I mean, what’s not to like?

Truly, grants sound like the perfect solution for business funding.  Actually, they are great if you can get one.  Yet, there are two cons most don’t realize.  Of course they are highly competitive.  But also, the money isn’t as free as you may think. Even though there is no interest and no repayment, it often takes a lot of time and effort to apply for a grant. Not to mention, sometimes there is an application fee. 

On top of the highly competitive nature of most grants, the result is that you could spend a lot of time and money applying for grants with nothing to show for it. 

Learn more here and get started with building business credit with your company’s EIN and not your SSN.

Why Are Startup Grants Different?

Unfortunately these problems are only magnified when it comes to small business business grants. There are far fewer grants available to startups.  That means the competition is even more fierce.  Furthermore, most of them are not open to just any business.

There are research and development grants, as well as grants for specific types of business owners.

Examples include: 

  • Veterans
  • Minorities
  • Women
  • And those in low income areas

Is It Even Worth it to Apply?

Due to the fact that it can be very hard  to get a grant, you may wonder if it’s even worth trying. That depends. Honestly, If the application process is fast and cheap, then yes, it is likely worth it. Of course, that is assuming you know that you meet all of the requirements. 

However, if you are not sure you qualify, and the application process is long or there is a large application fee, it might be best to skip it. Remember, you can use that time and money to pursue other funding options.

Best Options for Small Business Startup Grants 

We’ve put together a list of some of the easiest grants to qualify for.  Still, competition is still very tough.  Also, there are never any guarantees. We’ve divided them into the following categories: 

  • Open to all businesses
  • Innovation and Research
  • Women
  • Minorities
  • And veterans

Best Open to Any Small Business Startup Grant

FedEx Small Business Grant Contest

The FedEx Small Business Grant is one of the most popular small business startup grants around. The contest is open to any business that has been in operation for at least 6 months and has 99 employees or less.  It awards eight $7,500 grants, one $15,000 grant, and one $25,000 grant to winners each year.

Best for Innovation and Research

Small Business Innovation Research Program

This grant is designed to provide funding for scientific research and development. The business must be an organized for profit, with a place of business located in the United States. In addition, it must be more than 50% owned and controlled by one or more individuals who are citizens or permanent resident aliens of the United States. It can have no more than 500 employees. 

Learn more here and get started with building business credit with your company’s EIN and not your SSN.

Best for Women Business Owners

Amber Grant 

The Amber Grant awards one prize of $10,000 per month to a woman-owned business. One of the recipients also receives an additional $25,000 grant at the end of the year. Applicants only need to tell their story and turn it in with a $15 application fee.

Best for Minorities

The Minority Business Development Agency

The Minority Business Development Agency (MBDA) is operated by the US Department of Commerce. It is dedicated to helping minority-owned businesses access the resources they need to grow and succeed. They provide grants through their Minority Business Centers.

You can find grants available in your area by searching for your local Minority Business Center or visit the MBDA’s website for information on all current opportunities. You also need to have a D-U-N-S number to apply for these grants. Which is necessary for fundability anyway.

Best for Veterans

StreetShares Foundation’s Veteran Small Business Award

The StreetShares Foundation’s Veteran Small Business Award is for individual veterans who are low-income or otherwise lack the financial means to start their own business or nonprofit venture.  This grant is also available to surviving spouses and children. The winner must have a positive impact on the veteran community.

Honorable Mention

The InnovateHER small business challenge is sponsored by the SBA office of women’s business ownership. The program awards three winners $30,000 in prize money for businesses that have an impact on the lives of women. Awards are designed for products that meet certain standards including: 

  • Having a measurable impact on the lives of women and families (30%)
  • Having the potential for commercialization (40%), and
  • Filling a need in the marketplace (30%)

What if Grants Aren’t Enough?

It’s almost certain grants will not be enough. Of course, any free money is better than none at all.  Still, you cannot rely on grants alone to fully fund your business. Instead, one of the best things you can do for your business is build a strong business credit profile. 

A business credit profile is the credit history of the business itself, not the owner. It includes all business information and the business credit report, which reflects the business credit score.

To establish a business credit profile your business needs to be fundable. As a startup, this means starting now.  Get an EIN, incorporate, make sure you have a physical business address and open a separate, dedicated business bank account. 

Honestly, these things are good to have for a grant application anyway. After you establish a business credit profile, look for vendor credit that will report payments to your business credit report. Most importantly, always pay everything on time.

Learn more here and get started with building business credit with your company’s EIN and not your SSN.

Business Funding With Business Credit

In time, you will have a strong business credit score. Then, you can apply for business loans and lines of credit using your business information, and your business can basically fund itself. Any grant money you can get will be icing on the cake. 

The post The Best Options for Small Business Startup Grants Revealed appeared first on Credit Suite.

Startup Money for Business: Check Out Your Choices

How to Get Startup Money for Business

Are you looking for startup money for business? Starting a business can be an exhilarating experience. That is, except for the part about needing money. But your startup won’t survive for long without cash. If you’re not independently wealthy and can bootstrap your dream, what do you do?

The answer: think like a lender.

It may seem simplistic, but lenders just want two things: to make money off the loans they offer and be paid back by their borrowers. The first one is a result of their choices of loans to offer and terms. The second is in your hands.

The 3 Cs Capital Acquisition Formula

This is why lenders look at one of three things for loan approval: cashflow, collateral, or credit. The more of these “Cs” you have, the more funding options are available. For all the funding we cover in today’s post, we show you exactly what you need to have for approval.

But keep in mind, startups have it rough.

With very little time in business, they can’t prove that they’re getting steady cashflow. They just plain don’t have a big enough sample size. A short time in business is also seen as less stable, because about 1/5 of all new businesses fail in the first two years. So the first “C” is out.

But that’s okay. Because you’ve got access to two more.

Demolish your funding problems with 27 killer ways to get cash for your business.

Startup Money for Business: Using Collateral

Collateral is a great way to assure a lender that you’ll pay them back. And while your business might not have too much collateral yet, you probably have something you can pledge. It’s time to think outside the box.

401(k) Financing

This is not a loan. And you will not have to pay an early withdrawal fee or a tax penalty. You put the money back by contributing, like with any 401(k) program. This means you won’t lose your retirement funds. This is a 401(k) Rollover for Working Capital program. The IRS calls it a Rollover for Business Startups (ROBS).

According to the IRS, a ROBS qualified plan is a separate entity with its own set of requirements. The plan, through its company stock investments, owns the trade or business. That is, not the individual. Hence, some filing exceptions for individuals may not apply to such a plan. This type of financing isn’t a loan against, your 401(k), so there’s no interest to pay. It does not use the 401(k) or stocks as collateral. Instead, this is no more than a movement or change of custodian.

401(k) Financing: Terms and Qualifying

Low rates, often less than 5%. Your 401(k) must have more than $35,000 in it. You can usually get up to 100% of what’s “rollable” within your 401(k). The lender will want to see a copy of your two most recent 401(k) statements.

You can get 401(k) financing even with severely challenged personal credit. The 401(k) you use cannot be from a business where you are currently working. So it must be from older employment. You cannot be currently contributing to it.

IRA Financing

Don’t have a 401(k) that would work? Then try IRA financing. It’s a lot like 401(k) financing. In as little as 3 weeks you can invest a part of your retirement funds into your business. This gives you more control over the performance of your retirement plan assets. And it gives you the working capital you need for business growth.

IRA Financing: Terms and Qualifying

In general, you will work with a CPA. They will help you roll over a non-contributing and qualifying account. This allows for cash out of half, or $50,000, whichever is lower. If applicable, a CPA you work with will structure a self-directing IRA for the remaining funds.

Stocks Financing

Do you own stocks? Some lenders will make loans using securities as collateral. Securities-based lending provides ready access to capital. You can use this capital for almost any purpose, such as buying real estate or investing in a business. The only restrictions to this kind of lending are other securities-based transactions. For example, like buying shares or repaying a margin loan..

Stocks Financing: Terms and Qualifying

You continue to earn interest on stocks you pledge as collateral. Closing and funding takes less than 3 weeks. Rates can be as low as 1.6%. But you will have challenged personal credit.

Demolish your funding problems with 27 killer ways to get cash for your business.

Bonds Financing

Bonds will work just as well as stocks. Securities-based lending for bonds comes from large financial institutions and private banks. People tend to seek out these kinds of loans, if they want to make a large business acquisition. Another reason is if they want to execute large transactions like real estate purchases.

Lenders determine the value of the loan from an assessment of the borrower’s investment portfolio. In some cases, the issuer of the loan may determine eligibility based on the underlying asset. It can end up approving a loan based on a portfolio of US Treasury notes rather than stocks.

Bonds Financing: Terms and Qualifying

Most investment-grade corporate, treasury, municipal, and government agency bonds are good to use. You keep all the interest and appreciation from your securities. To qualify all the lender will want is a copy of your two most recent securities statements. If your stocks or bonds have a value over $25,000, you can get approval, even with severely challenged personal credit.

No Collateral to Get Startup Money for Business? Not to Worry

If you’ve got good personal credit, we can tie a direct line from it to good business credit. The good FICO score doesn’t have to be yours; it can be a credit partner’s.

Credit Line Hybrid

A credit line hybrid is a form of unsecured funding. Our credit line hybrid has an even better interest rate than a secured loan. Get some of the highest loan amounts and credit lines for businesses. You can get 0% business credit cards with stated income. Many of these report to business CRAs. You can build business credit at the same time. This will get you access to even more cash!

Credit Line Hybrid: Terms and Qualifying

You need a good credit score or a guarantor with good credit to get an approval (a FICO score of at least 680). No financials are necessary. You can often get a loan of up to $150,000. Some cards may report on your personal credit.

Demolish your funding problems with 27 killer ways to get cash for your business.

Get Startup Money for Business by Building Business Credit

And keep in mind: our Credit Line Hybrid isn’t the only way to build business credit. Business credit is an asset, and lenders like to see that yours is good. But you’ve got to work at it.

Start with vendor accounts. Starting with vendor credit accounts is a proven way to start building business credit. But we don’t include vendors just because they report to the business credit reporting agencies. We include them and we talk about them because they have quality products that you can use, and fantastic customer service. They are more than a means to an end!

Vendor Credit

Starter vendors are open to working with most businesses, even startup ventures like yours! Make sure vendors report to the CRAs – not all do. Vendors report to the business CRAs within 60 days. They help you build your business credit profile and score.Startup Money for Business Credit Suite

Vendor Credit: Terms and Qualifying

Terms will vary depending on the vendor, but they tend to be Net 30. Some will not accept virtual offices. You will often need a D-U-N-S and an EIN at the very least. But you will not need collateral, good personal credit, or cash flow.

And continuing to grow your business credit portfolio means credit cards. Add payment experiences from at least three vendors. Once they report to business CRAs like Dun & Bradstreet, you start qualifying for store credit, and fleet credit, too. While your startup grows, so will your business credit.

Get Startup Money for Business: Takeaways

Startups have a few strikes against them when it comes to getting business financing. But you may have collateral right now, and can use it to get money. Good personal credit is another thing you can leverage. And it doesn’t even have to be your own good personal credit! And build business credit for the best chances for the most money. Contact us today for the details.

The post Startup Money for Business: Check Out Your Choices appeared first on Credit Suite.

Follow the Smart Business Timeline for Credit

Your Smart Business Timeline for Building Business Credit Starts NOW

You’ve heard of business credit, right? It’s credit in the name of a business and not its owner. It is an ongoing process and you must do it proactively. That is, it won’t just happen – you have to make it happen. But did you know that you can hit the ground running and build business credit? You can start your business timeline for credit right now!

Your Business Credit Building Timeline

Any business can build credit, even nonprofits. This timeline is designed to work in order

It takes advantage of the passage of time, so you don’t pursue options that require a certain amount of time in business before that time has elapsed.

Get Started by Getting Fundable

There are a number of things you can do to make your business more fundable. That is, more likely to get funding. Here are some acts you can take which are fast. They will give you quick bang for your buck.

Getting Fundable Goes Beyond Building Business Credit

These tasks also have the added bonus of being helpful in other areas of your business

Building fundability bakes credibility right into your business. This will help you attract prospects, and it will help you convert more of them into customers.

Getting fundable helps your business to get money. And it will do so for years to come. It’s worth the time and effort to get it right the first time, this also saves you any lost ground from having to undo older mistakes.

A lot of these steps will require a phone call to a provider or chatting online. To expedite matters, get someone to help you, so you can get the preliminaries done faster, if absolute speed is your objective.

Start Your Business Credit Building Timeline With a Great Business Name

Does your business, or the business name you want to use,  contain the name of its industry?

That can be problematic if you’re in what is considered to be a risky industry.

Risk is usually defined as:

  • A higher chance of injury on the job and/or
  • Businesses which perform more cash transactions than most other companies

To become more fundable, don’t add the name of a risky industry to your business name

There’s nothing underhanded, immoral, or illegal about doing this

Start Your Business Timeline With Consistent Information

Just copy/paste business information – name, address, and everything else. Why? Because retyping opens up opportunities for error. Differences will be interpreted as fraud by lenders and credit providers. Keep records of where your business name is, so, you can be sure you catch everything. These are records both online and offline.

You want an exact match across the board. This means deciding between spelling a word out or abbreviating. It also means choosing between an ampersand (&) and the word ‘and’. Pick one and stick with it.

Get our business credit building checklist and build business credit the fast and easy way.

Continue Your Business Timeline With Your Business Phone Number

A cell phone or home phone number can harm your business in your quest for fundability. But you can use VOIP (voice over internet protocol). This enables any phone number to ring any device. So you can still use your cell phone.

Toll-free numbers are often best. That is, 800 or an equivalent exchange. You can get a toll-free number fast through a provider like RingCentral. But if your business is purely local, you may be able to go with just a local number.

You also want to have a 411 listing for your business phone number(s). You can get one via ListYourself.net. Lenders and credit providers will be looking for your phone numbers, so make them findable.

Do you really need a separate business phone number? It’s not a complete, 100% dealbreaker if you don’t. But if you don’t want clients to ring your home phone all day long, or have your toddler pick up (!), then a separate business phone number is the best way to go.

Continue Your Business Credit Building Timeline With Your Business Address

Working from a residence can be a problem to lenders and credit providers if your business is a retail establishment like a clothing store. They will check your business address on Google Street View, and you could be denied business credit. A separate address fixes this issue.

A separate business address is also better for your family as no customers will be coming and going in your home, and taking up parking spaces on your street. But what if an office just isn’t in the financial cards right now? A virtual business address is a terrific solution. It can address all these issues.

Virtual Business Addresses

With a virtual business address, you get a deliverable address – not a PO box or UPS box, which would be flagged and generate a denial. This means an actual brick and mortar address.

Some plans give you access to clerical help, conference rooms, mail forwarding, and more.

Three we really like are:

  • Alliance Virtual Offices
  • Da Vinci
  • Regus

But recognize that there are some lenders and credit providers that will not work with virtual addresses.

Continue Your Business Timeline With Your Business Website

Lenders and credit providers will be looking for your business online. It would be a lot better if they got their information directly from you, and not a competitor. As a result, you must have a professional-looking website and email address. Your domain needs to be yourcompany.com or .net if you can get that.

Never use Wix or Weebly, so your domain is yourdomain.com versus yourdomain.wix.com. You will need hosting through a hosting company like GoDaddy or HostGator. You can buy a domain and set up a website. Larger hosting companies will provide services to help if you’re inexperienced with this.

Your Business Email

Your business email address needs to be on the same domain as your website. Generic professional names work well, something like admin@yourwebsite.com or gethelp@yourwebsite.com. Do not use Gmail, Yahoo, AOL, or the like. But don’t worry about checking yet another email address; you can have any email forward to any other email. You can set all of this up at the same time you set up hosting.

Get our business credit building checklist and build business credit the fast and easy way.

Follow Your Business Timeline to The Secretary of State’s Office

The first steps already outlined will probably take you between a month to three months at the least. Now it’s time to move onto the Secretary of State for your state.

The Secretary of State’s office has info on every license needed to run your business

They also have helpful information, like if you need to take continuing education to maintain your license. Processing time varies.

You may need to register your business. It’s possible that the SOS will require that your business name be unique. And they may want corporations to be defined with a term like ‘Inc.’ at the end of their names. For anything you need to pay for at the SOS, be sure to print and keep copies of receipts and forms.

Continue Your Business Credit Building Timeline With Your Business Bank Account

Many business credit providers will insist that you have a business bank account. It must be devoted to your business. This will also help to keep you from accidentally commingling funds. This will make tax time a lot easier. You can apply for a business bank online at many banks, even if the bank has brick and mortar locations.

In particular if you have a personal account with a bank, and you’ve managed it well, you can get a business bank account fast. You can often be approved in as little as 15 minutes online. For some more risky industries like cannabis, it may pay to look online for a bank to work with

Continue Your Business Timeline With Your EIN and Business Entity

Visit the IRS website and get a free EIN for your business. Choose a business entity like corporation, LLC, etc. It’s best to choose a type of corporation. This is to minimize risk and maximize tax benefits. It also creates an entity separate from you, the business owner.

Doing these things at this stage of the game means you’ve got a set business address, phone numbers, etc. So you wouldn’t have to change them later.

Note: a DBA is not a separate business entity.

Proper NAICS Codes

You also choose NAICS codes at IRS.gov. SIC and NAICS codes classify your business and show what it does. The IRS works with NAICS codes. But D&B still works with both. If your business can fit under one or more code, choose the less risky code. There’s nothing illegal, immoral, or underhanded about doing this.

Get our business credit building checklist and build business credit the fast and easy way.

Continue Your Business Credit Building Timeline By Incorporating Your Business

Even incorporating online may take a few business days. In general, you will need Articles of Incorporation. If you want them drafted quickly and correctly, you’ll probably need to hire a corporate attorney to get this done. At the very least, it’s best practices to have a lawyer look over your completed documents.

Get Your D-U-N-S Number

Business Timeline Credit SuiteTo build business credit, you will need a D-U-N-S number from Dun & Bradstreet. A D-U-N-S number + 3 or more reported payment experiences will generate a business credit report with a PAYDEX score. And, therefore, you’ll have built business credit. The free product will send you a D-U-N-S number within around 30 days. Don’t let them upsell you!

By now, you’re about one to two quarters into your business credit building timeline

Continue Your Business Timeline By Establishing Positive Payment Experiences

Lenders consider credit history as one of the chief factors when determining creditworthiness. Making timely payments will demonstrate to anyone looking to do business with your company that you’re low risk. Work with vendors that will report positive payment experiences to the business credit reporting agencies. That way, you won’t waste your time.

Most vendors don’t report positive experiences, but have no problem reporting if you default. But here are three that will report positive experiences:

We don’t just recommend these vendors because they report, we also recommend them because they have great products and service.

Continue Your Business Credit Building Timeline By Working With Vendors Which Report

Even vendors that report may need you to reach a certain minimum before they will report. They may also want some time in business. So check the fine print and call or chat online with a representative to get information, which you know will be correct. And keep in mind, it can take over 30 days for reported purchases to show up on your business credit report. By now, your timeline has stretched to three-quarters of a year to a year, AND you’ve got good business credit!

A Smart Business Timeline for Credit: Takeaways

Following the steps in order assures that you take the shortest distance between the point of startup, and the point of having good business credit. You don’t meander, you get straight there, in a year or less. For more guidance, and to extend your timeline into getting more credit and funding as your business grows, contact us.

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The Surprise that Makes Recommended Vendors for Business Credit Different

When we talk about recommended vendors for business credit, there are several questions that pop up. First, what exactly do we mean by vendors? Then, what makes some vendors recommended for business credit, and others not?  After that, who are these recommended vendors and how do you find them?  Let’s find out.

What Do We Mean by Vendors

This is probably the best place to start. When using the term “credit from vendors,” we are talking about credit from companies that are not financial in nature, like banks and other credit unions. Rather, their focus is on retail, and they extend net terms on invoices to customers as a courtesy.

This means customers have either 30, 60, 90, or however many days the net terms state to pay in full.  It’s different from a credit card because it is not revolving credit.  So, when we talk about vendors, this is not a card that you apply for. This is a retail company that sells products you can use in your business, then you do not have to pay the invoice immediately.

Learn more here and get started with building business credit with your company’s EIN and not your SSN.

What are Vendors for Business Credit?

Don’t a lot of vendors offer net terms?  What makes them so special? Well, there is a small subset of vendors that we call starter vendors. Starter vendors do two things that not a lot of vendors do.

First, they will extend net terms to your business without a credit check.  That’s not to say that they do not have standards. They will not give net terms to just anyone. However, they will consider other factors besides credit score.  For example, they may take into consideration:

  • Current relationship with the customer
  • Time in business
  • Average balance in business bank account
  • Annual income
  • And more

But that’s not all.  Getting net terms without a credit check is great, but it does nothing to build your business credit score if the payments do not show up on your business credit report. True starter vendors will also report the payment you make to the business credit reporting agencies.  Again, doesn’t sound like a big deal, right? That changes when you realize that only 7% of companies that extend credit of any type to businesses report positive payment history to business credit reports.  A lot more will report negative payment history, but that does not help build a strong business credit score.

Finding Vendors for Business Credit

Vendors do not typically make it obvious if they report or who they report to. If you call, you may or may not get to talk to the right person to ask. You’ll likely be on hold for a long time, and once you get to someone they may or may not tell you.

One option is to just apply for vendor accounts and hope you get approval. Then monitor your business credit report to see if they are reporting. However, this trial and error method will take a lot of time and will likely cause a serious amount of frustration

It will take away from you doing what you need to be doing, which is running your business. Yet, it doesn’t have to be this way. There is a better option. A business credit specialist can help you find vendors that you qualify for, and that will report your on-time payment, not just late or missed payments.

They know who to talk to, what questions to ask, and the language to use to get the answers you need. This alone saves you a huge amount of time and frustration.   You not only avoid applying for accounts that you do not yet qualify for, but you also find those accounts that will actually help you build your business credit score.

Our business credit specialists have a list of starter vendors that they already work with. This list is always changing, as vendors and lenders are always changing their policies.

Also, it takes more than 3 or 4 vendors to build a strong enough score to move on to the next level of credit. Our specialists work with many vendors that can help you get things going. Here is a sample of some recommended vendors for business credit.

Learn more here and get started with building business credit with your company’s EIN and not your SSN.

Grainger Industrial Supply

One of the first vendors for business credit business owners find out about is Grainger.  They sell hardware, power tools, pumps and more. They also do fleet maintenance, and they report to Dun and Bradstreet. If a business doesn’t have a credit score already,they will want to see additional documents like accounts payable, income statement, balance sheet, etc.

To qualify, you need:

  • To be an entity in good standing with Secretary of State
  • EIN number with IRS
  • Business address (matching everywhere)
  • D-U-N-S number
  • Business License (if applicable)
  • Separate, dedicated business bank account
  • To be registered to Secretary of State (SOS) for at least 60 days

Marathon

Marathon Petroleum Company provides transportation fuels, asphalt, and specialty products throughout the United States. The products support commercial and industrial, as well as retail operations. They report to Experiand and  Dun & Bradstreet.

To qualify, you need:

  • To be in good standing with the Secretary of State
  • An EIN number with IRS
  • A Business address- matching everywhere.
  • D-U-N-S number
  • Business license (if applicable)
  • A business bank account
  • Business phone number listed on 411

Your SSN is required for informational purposes only. You can give a $500 deposit instead of using a personal guarantee, if you have been in business less than a year.

Supply Works

Supply Works is a part of Home Depot. They offer facility maintenance supplies. It’s important to know that they do not accept virtual addresses, so you will need to use your home address if you do not have a brick and mortar location. They report to Experian.

To qualify, you need:

  • To be in good standing with Secretary of State
  • EIN number with IRS
  • Business address (matching everywhere)
  • D-U-N-S number
  • Business License (if applicable)
  • Business Bank account
  • Trade/Bank references
  • There is no minimal time in business requirement

Learn more here and get started with building business credit with your company’s EIN and not your SSN.

Beyond Recommended Vendors for Business Credit: What’s Next

These vendors are great for getting started with building a business credit score. However, a good business credit specialist won’t stop there. They can guide you to a system that will help you through the business credit building process, from establishing your business credit profile to finding initial accounts, all the way through knowing which accounts to apply for next that you actually qualify to get.

For example, once you have your established business credit profile and have some initial accounts reporting, you may think you are done.  Those reported payments start building your credit score, and all you have to do is keep paying.  That’s not quite how it works.

First, there aren’t that many starter vendors out there. You are going to need credit from someone else eventually.  But, applying for accounts before your business credit profile is ready for them wastes more time, more money, and causes more frustration.

For example, some retailers will extend revolving credit rather than net terms after you have 5 or more initial accounts reporting. Some need to see a longer and larger credit history.  A business credit specialist can help you with a program to guide you in knowing which accounts you’re ready to apply for, and when.

How to Use Vendors for Business Credit Wisely

Here’s the thing, it’s not all about business credit when it comes to vendors.  For a well rounded credit portfolio, you are going to need to use all vendor accounts wisely.  You may need credit with a vendor that does not report.  But, to get approval, you’ll need to have a strong business credit profile.

You also need to use all vendor credit wisely.  When you are working toward building business credit, you are limited on which vendor accounts you can get approval for. Then, you are even further limited on which vendors will help you build your business credit score.

But do not make the mistake of thinking that means you need to buy things you don’t need because these are the only vendors you can get that will help your score. Use these vendors to purchase general items all businesses need, just until you get to the point you need to be. They may or may not offer products specifically for your business type. But, they most will offer fuel, office supplies, cleaning products and more. These are things all businesses can use.

Advanced Vendors

Building business credit is the goal, and starter vendors are a necessary part of that. Still, the end game is building and growing your business. A strong business credit profile is one tool to help you do that.  It’s job is to  help you get credit with any vendor you need, whether they report or not.  We call these advanced vendors.

Consider this example. Imagine you need to buy inventory for your business. However, your cash flow isn’t yet where it needs to be. Using an inventory supplier that will extend net terms will allow you to purchase the inventory you need. You can pay the vendor after you sell the inventory. This is just one very general example, but you get the point.

Recommended Vendors for Business Credit Are Important, But So Are Other Vendors

Both types of vendors, reporting and non reporting, are necessary for building and running a strong business.

In fact, there are a lot of vendors out there that many do not even know offer business accounts. They can help your business grow and thrive, but you have to know they exist. This is another way a business credit expert can help you save a lot of time and frustration.

A good business credit specialist will help you access the vendors your business needs to grow. They can help you determine when you qualify for these vendors, and guide you in the right direction so that you reach the required qualifications as quickly as possible. Because when it comes to running your business and managing cash flow, there is no time to waste.

The post The Surprise that Makes Recommended Vendors for Business Credit Different appeared first on Credit Suite.

Top Tips for How to Build Credit for a Business: The Last One May Shock You

Most business owners assume that you build credit for a business the same way you build consumer credit. Honestly, it makes sense.  It’s no wonder this is such a common misconception. With consumer credit, you just get credit accounts, and your payment history, good or bad, is reported to the credit bureaus. It builds passively … Continue reading Top Tips for How to Build Credit for a Business: The Last One May Shock You

Top Tips for How to Build Credit for a Business: The Last One May Shock You

Most business owners assume that you build credit for a business the same way you build consumer credit. Honestly, it makes sense.  It’s no wonder this is such a common misconception. With consumer credit, you just get credit accounts, and your payment history, good or bad, is reported to the credit bureaus. It builds passively on its own, whether you want it to or not. However, when it comes to how to build credit for a business, the same is not true.

How to Build Credit for a Business: Be Intentional

You have to intentionally work to build a business credit profile with a positive score. How do you do that? First, you have to establish a business credit profile. Then, you have to find accounts that will report your payments.  This is how you start to build a business credit score.

How do you establish a business credit profile? Don’t all creditors report payments, or lack thereof? Where do I start? Surprisingly,  you start at the beginning. 

It goes all the way back to the foundation. Business credit is part of a bigger picture we call fundability. You cannot build credit for your business if your business is not fundable, and fundability starts with a fundable foundation. 

How to Establish a Business Credit Profile

The steps you take to build a business credit profile are the same ones necessary to lay a fundable foundation for your business. If you are missing any of these steps your business will not be fundable and you will not be able to build credit for your business. Some of the things that make a difference will probably surprise you.

  • You need an EIN
  • You need to incorporate
  • A separate business bank account is a must
  • Even your business name and NAICS codes can make a difference! 

How to Build Credit for a Business: Pay Attention to the Details

Something as little as your business address, phone number, or email address can cause problems with fundability.  That, in turn, affects your ability to build credit for your business. Your address has to be a physical address where you can receive mail. For example, don’t use a P.O. Box or an UPS Box.  

Your phone number should be toll-free and listed in the 411 directories.  You can have it forwarded to your personal phone, but you need a separate business phone number. Also, a business email address is necessary.  But, you need to be sure it has the same URL as your business website. Do not use a free option like Yahoo or Gmail.

Here is a quick bonus tip. Your website needs to look professional and work well, and you need to pay for hosting. If a lender looks at your website, you want to make a good impression.  

Learn more here and get started with building business credit with your company’s EIN and not your SSN.

How to Build Credit for a Business: You Have to Apply for a D-U-N-S Number

Dun & Bradstreet is the largest and most commonly used business credit agency. Yet, you cannot have a business credit profile with them without a D-U-N-S number. You will not get one automatically. You have to apply for one on the Dun & Bradstreet website. Since lenders use it often, it is important to have a profile with them. It’s free, but be careful. They will try to sell you a lot of things you do not need, including their business credit monitoring services. You can do that cheaper elsewhere. Just apply for the number. 

How to Build Credit for a Business: Recognize That Not All Credit Accounts Will Report Payments

One of the major differences between consumer credit and business credit is that not all business credit accounts report payment history. Of course, pretty much all consumer credit accounts report payment history. You do not have to do anything to make that happen, it just does.

But this is not how business credit accounts work. Even if you do all the work to set your business up to be fundable, and establish your business credit profile, you may still not have a business credit score. Unfortunately, that’s because the accounts you have may not be reporting your on-time payments. 

The solution may seem simple. Just find accounts that will report. However, it’s not easy to find accounts that will approve you before your business credit score is established, let alone those that will do so and report payments. When you are trying to establish a business credit score, you have to find the few vendors that will both extend credit to your business without a credit check and report payments. There aren’t many, so you have to take what you can get. 

Finding Initial Accounts to Build a Business Credit Score

Business owners pretty much have two ways to go about finding these accounts. Of course,  you can just apply for credit accounts and hope you get approved. Then, hope they are reporting payments. You can monitor your business credit to see if payments are being reported. If they are, that’s great. If not, you have to start over.

Complicating matters even further is that you need 5 or more accounts reporting initially. This is a minimum to build a score strong enough for approval from other accounts. As you can imagine, this trial and error method can take an extremely long time.

The other option is to enlist the help of a business credit specialist. This is someone who can help you find those accounts that will both approve you without a credit check, and report on-time payments to the business credit reporting agencies. These are typically net accounts, not revolving.  That means they have to be paid in full completely at the end of the net term, usually 30, 60, or 90 days.

Learn more here and get started with building business credit with your company’s EIN and not your SSN.

How to Build Credit for a Business: Apply for Accounts in the Right Order

You cannot just start applying for any and all accounts at random trying to get credit for your business. Well, technically you can, but if you do not have a strong business credit score, you will be denied. 

The first accounts are those initial accounts that will approve a business without a credit score and report payments to the business credit reporting agencies. Still, even after you have your initial business credit score, you will not yet be eligible for any and all business credit accounts.  In contrast, you’ll have to find those that will approve you based on your still limited credit history.  Furthermore, those new accounts need to report payments as well so that you can continue to build your business credit score. 

This puts you in the same predicament described above. You can either apply at random, using trial and error until you get enough accounts reporting to apply for those with higher limits and lower interest rates, or  you can save yourself considerable time and frustration by working with a business credit specialist. A free consultation with a business credit specialist is one of the best ways to see what they can do for your business. 

Learn more here and get started with building business credit with your company’s EIN and not your SSN.

You Can Build Credit for Your Business

You can build credit in your business name. However, you have to take the initiative to work through the process. It will not happen on its own. Don’t wait either. Start now.  Even if your personal credit is fabulous and you have no trouble funding your business based on it, you need to know how to build credit for your business so that you can keep your strong consumer credit score. Then, you can get the funding you need to run your business, when you need it. 

The post Top Tips for How to Build Credit for a Business: The Last One May Shock You appeared first on Credit Suite.

How to Setup a Business the Right Way to Start Building Business Credit

How to Setup a Business the Best Way for Building Business Credit

Are you looking to setup a business? Your business can be much more likely to get funding from the jump – if you set it up the right way. Here’s how.

Setup a Business the Right Way from the Start

Setting up a business is a task that can take a while. There are a lot of moving parts. It’s a lot more than just hanging out a shingle. And the way your business is set up can directly affect the ability of your business to succeed.

Fundability

What is it? Fundability is as a business’s ability to get funding. You can make it harder or easier for your business to get money. A lot of the power is in your hands. Yes, you have some control over this.

Setup a Business For Fundability

A business starts with no credit profile. Therefore, what’s on an application is all that’s reviewed for approvals. So your application must be very strong. Nearly half of all companies fail in their first 5 years, and about 2/3 in the first ten. As a result, new businesses don’t seem fundable to lenders. You can change that by building for fundability from the very start.

Industry and Risk

An early step to fundability is the industry your business is in. Some industries are considered to be riskier than others. When it comes to traditional funding sources, added risk can mean stricter underwriting guidelines or even no funding at all

Risky industries tend to be places where chances of personal injury or property damage are high, or a lot of cash is used, or the revenue stream is unstable. Weapons manufacturing, pawn shops, and the political campaigns all fill the bill.

Business Name

Check with your Secretary of State – they might require that a business name be unique. While checking your name with your Secretary of State, also ensure they have all the necessary information for your company. Make sure that you are in good standing with them, and that your entity is active. You will have to file annual reports and pay a fee each year to stay active.

Keep the name of a high-risk or restricted industry out of your business name. There is nothing underhanded about this – it is above board and honest. And it can help prevent an automatic or nearly automatic denial from a lender. A common reason for loan and credit card application denials is the lender can’t easily locate a business online. The business name on your application should be the exact same as what’s listed online and with your Secretary of State.

Business Names and DBA Filings

A full business name should include any recorded DBA filing in use. But consider a DBA only a short stop on the way to incorporating. Make sure the business name is exactly the same on corporation papers, licenses, utility statements, and bank statements. Also make sure the business name and all other information is the same on as many online listings you can find.

Business Address

A business address must be a real brick and mortar building. It must be deliverable physical address. This can never be a UPS box or a PO Box. Some lenders will not approve and fund unless you meet this criterion. Lenders check with USPS and places like Google Maps to see if you’re using a home address. If you are, you may get a decline.

In particular, retail establishments like clothing boutiques need their own address. If your business is a retail establishment like this, do not use a home address on your application! Not even if your company is just you . You can use a virtual address. We like Regus, Davinci, and Alliance Virtual Offices. But keep in mind that there are credit providers that will not accept virtual addresses.

Learn more here and get started with building business credit with your company’s EIN and not your SSN.

Setup a Business Entity and EIN

You can get a free EIN for your business at IRS.gov. Just like you have a Social Security Number, your business has an EIN. Your EIN is used to open a bank account and to build a business credit profile. To truly separate business credit from personal credit your business must be a separate legal entity, not a sole proprietor or partnership. Only incorporating creates a new, separate entity.

A corporation or LLC business entity gives you more credibility in many cases. These entities by default reduce your personal liability. Other entities don’t. File this with the Secretary of State for your state. Make sure your entity is set up in the same state as your business address. Verify all listings show the same name, address, phone numbers, etc. as in state and other records. Also make sure your address with the IRS matches everywhere else.

Business Licenses

Contact State, County, and City Government offices to see if there are any required licenses and permits to operate your type of business. Licensing requirements differ. Differences depend on state, town, and industry. Always make sure you have the proper licensing for your corporation.

Do not apply for funding if you are unlicensed. Verify that all main agencies (State, IRS, Bank, and 411 national directory) have your business listed the same way and with your exact legal name. And make sure the address on your licenses is the same as all other documents. Being licensed also builds credibility in your business, and that can help you get more customers.

SIC and NAICS Codes

The IRS website is also where you choose SIC and NAICS codes. Industries are classified by 2 kinds of codes. They are SIC (Standard Industrial Classification) and NAICS (North American Industry Classification System). You chose these codes. Be honest when you choose your codes.

There’s no reason to choose the riskiest code if a less risky one might apply. The NAICS system is phasing out the SIC system. But that’s taking years.

Learn more here and get started with building business credit with your company’s EIN and not your SSN.

Business Phone and 411 Listing

Toll-free phone numbers are best. Lenders see them as a sign of business credibility. Even if you’re a single owner with a home-based business, a toll-free number provides the perception that you are an even bigger company. It’s very easy and inexpensive to set up a virtual local phone number or a toll free 800 number. A cell or home phone number as your main business line could get you flagged as un-established – but VOIP is okay.

If you don’t want customers and prospects calling you all day long, do not use a personal cell phone or residential phone as the business phone number. It also helps with fundability if you have a dedicated business phone number. Your phone number must be listed with 411 for most credit issuers and lenders to approve you. Check for your record to see if you’re listed. Make sure your information is accurate. No record? Then use ListYourself.net to get a listing.

Web Domain and Professional Website

Credit providers will research your corporation on the internet. It is best if they learned everything directly from your corporate website. Not having a company website can hurt your chances of getting corporate credit. You need it to be a professional website.

Use places like TemplateMonster.com and Upwork.com and get a site up cheap and fast. Get a professional logo from Fiverr. Buy web hosting from a company like GoDaddy. Do not use Weebly or Wix. This is because you want it to be your domain, not domain.wix.com. Your domain should be your business name, if possible

Web Domain and Professional Website: Details

You need a company email address for your business. This email must be on the same domain as your website. Use a professional email address such as yourname@yoursite.com. It often comes with a website domain provider such as GoDaddy. This is not just professional; it also greatly helps your chances of getting approval from a credit provider. Do not use Yahoo, AOL, Gmail, Hotmail, or similar kinds of email.

Business Bank Account in the Business’s Name

You must have a bank account devoted strictly to your business. The IRS does not want you commingling funds. Make accounting easier and reduce the risk of audit at tax time. Keep personal and business funds separate. The simplest way to do this is with a separate account.

Your business banking history is vital to your future success of being able to secure larger business loans. The date you open your business bank account is the day that lenders consider your business to have started. So if you incorporated your business 10 years ago, but just opened the business bank account yesterday, then your business started yesterday. The longer your business banking history, the better your borrowing potential is.

Business Bank Accounts and Business Financials

Look to the future. It’s bank (and other) loans, and other kinds of funding. Set your business up for bank loan approval success. Keep a balance of $10,000 or more, for at least three months. This gives you a Low 5 Bank Rating.

With a Low 5 Bank Rating, most conventional banks see your corporation as fundable. Less than $10,000 in your account gives you lower than a Low 5 bank rating. If you don’t have a Low 5, you can still get corporate credit and alternative loans, but you would not be able to get a conventional loan. Bank ratings measure how responsible the account owner is with funds.

Learn more here and get started with building business credit with your company’s EIN and not your SSN.

Setup a Business Merchant Account

Getting a business merchant account is a smart way to help out your business. Now your business will be able to accept credit and debit cards. Studies show that customers will spend more if they can pay by card. This also increases your finance options. It’s generally more secure, too.

Get Set Up With the Business Credit Reporting Agencies

Go to D&B’s website and look for your business. Can’t find it? Then get a free D-U-N-S number. A D-U-N-S number plus payment experiences leads to a PAYDEX score. Once you are in D&B’s system, search Experian and Equifax’s sites for your business. Another ID number is the BIN (Business Identification Number) number from Experian. Experian’s BizSource assigns a BIN.

Your Business Credit History

You  can get the most favorable funding by paying all bills on time. This will get your business:

  • A PAYDEX score of 80
  • Equifax Credit Risk Score of 90 or better
  • And a good FICO SBSS score, which is driven (in part) by on-time payments and business credit history
  • For Experian, historical behavior (payment history) is 5-10% of the total score

Keeping Congruent Business Information

Keep all records consistent! CRAs and creditors are going to look at everything. So it had better match, or you’ll get a denial due to fraud. That’s how lenders interpret inconsistencies.

Your business name, address, and phone number – all your business information – must look the same in these places and more:

  • IRS and Secretary of State records
  • Business records with Dun & Bradstreet, Equifax, and Experian
  • Incorporation documents
  • All online listings
  • Copy and paste this information; do not chance it with retyping

Personal Financials and Personal Credit History

Let’s not forget about your personal credit. Personal credit quality is often helpful for getting funding. So if your personal credit is not in order, get it straightened out and improve it. This generally means paying your bills on time and curbing your usage. For a business loan at a conventional bank you need good personal, business, and bank credit. While you want to build good business credit, having good personal credit can get you started.

Good personal credit will open doors, and it will open them earlier. Do you eventually want to try for an SBA loan? Then you will need to have good personal credit.

Setup a Business the Right Way: Takeaways

The way your business is set up can directly affect whether your business survives. Details such as business name, address, phone number, and email address all play a part. When you setup a business smartly, you can also help assure prospects that your business is on the up and up. It also means getting set up with D&B and other business CRAs, so you can start building business credit.

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