It may seem that trying to establish business credit in a recession is too little too late. It is definitely better to have strong business credit before a recession hits. However, if you are in the middle of hard economic times and trying to figure out how to survive and even thrive, all is not … Continue reading Survival of the Fittest: The Essential Guide to Establish Business Credit in a Recession
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Fight Back: Get an Unsecured Business Line of Credit in a Recession
The COVID-19 pandemic has quite literally turned the economy on its head. Businesses are suffering, and recession is imminent. Not only that, but aside from the influx of federal funds to the SBA, banks are not going to keep lending so freely for much longer. The time to get funding to help your business survive the recession is now. Still, is it even possible to get an unsecured business line of credit in a recession?
Everything You Need to Know Before You Apply for an Unsecured Business Line of Credit in a Recession
Even during a recession, it is almost impossible to run a business without financing. At some point you will need a large supply of cash that you do not have. Even if you do have sizeable cash reserves, it is typically not a good idea to deplete them all at once. A line of credit can be a huge help, because the credit line is revolving. This means you do not have to continually apply for it. It is just there to use as needed. The problem is, small business lending drastically decreases during a recession. How do businesses survive then? How can you get an unsecured business line of credit in a recession?
Before You Learn How, Learn Why
Before the how, know the why. An unsecured business line of credit in a recession can help you make repairs, cover a cash gap, or just take advantage of an awesome wholesale promotion without reapplying for credit. You are likely not going to have all the cash on hand. This is especially during a recession.
Even if you do, a business line of credit is a great way to build business credit and manage cash flow. If you use it properly. The question then becomes not “if” you need business financing, but rather “what type” of business financing do you need.
The options are many. Which one is best for your business will depend on multiple factors. There are both unsecured and secured lines of credit, term loans, various types of invoice lending, credit cards and more. During hard economic times, some financing options are more available than others. The greatest cutbacks on lending are in the larger banks. Typically, traditional term loans are squeezed the hardest.
Therefore, finding an unsecured line of credit in a recession isn’t impossible. It may not be as easy to come by as during an economic boom, but it is possible. You are likely to have better luck at the smaller banks.
Check out how our reliable process will help your business get the best business credit cards, even during a recession.
The Fine Print
Under each lending option there are sub options for specific types of borrowers, specific borrower needs, secured, unsecured, and even options with cash back and other rewards.
The best way to make a decision is to learn as much as you can about each one. Do this before you need financing. Then when the time comes, you already know what you need.
The unsecured line of credit is one option that is often misunderstood. It can be difficult to determine why you would choose this option over a secured line of credit or a term loan, and if you do, what are the benefits?
Why Choose a Line of Credit?
The best way to explain this is to line up the unsecured line of credit head to head with the most commonly used other options.
Unsecured Line of Credit in a Recession vs. Term Loans
Besides the fact that it is much harder to get a term loan during a recession, the answer here is pretty straight forward. If you need cash occasionally for various reasons, a line of credit is your best bet. If you have a large, specific purchase or project, then a term loan could work better depending on a number of variables.
Consider the following scenarios:
One company is beginning to see cash gaps due to a lag in customer payments. The recession is hitting everyone hard, and while no one has completely stopped paying, the average time receivables stay on the books has increased. In this situation, a line of credit is the best option. You will have the financing to use from month to month. Also, you can take only what you need, and pay it back once the invoices are paid.
The next company needs to add another truck to its fleet to handle the shipping for increased orders. This kind of growth is fortunate given the recession, but they need to finance the truck. In this situation, a term loan would be best. It may be difficult to find given the slow economy, but the smaller banks may just come through.
Unsecured Line of Credit in a Recession vs. a Business Credit Card
A credit card is very similar to a line of credit. Most often the glaring difference is the use of a card, though some business lines of credit offer a card for access in addition to checks. Similar to how some credit cards offer checks for access as well as a card.
Another difference is that sometimes you can use your lending institution’s online banking option to make direct transfers from a line of credit to a checking account, if the accounts are at the same institution. Also, if you need cash, there is no cash withdrawal fee usually with a line of credit. Credit card cash advance fees can expensive.
Credit cards tend to have higher interest rates than business lines of credit also, though unsecured lines of credit in a recession can have very high interest rates as well.
What if You Could Have Both? Credit Line Hybrid
What if there were an option that allowed you to have an even better interest rate than a secured loan, and yet get the money faster and easier than any type of traditional funding. What if you could get business funding similar to an unsecured business line of credit without having to supply any bank statements or check stubs? Imagine that you could get funding in a few days rather than weeks without supplying any collateral or documents? This is exactly what the credit line hybrid allows you to do.
What is a Credit Line Hybrid?
A credit line hybrid is basically revolving, unsecured financing. It allows you to fund your business without putting up collateral, and you only pay back what you use.
What are the Qualifications?
How hard is it to qualify? Not as hard as you may think. You do need good personal credit. That is, your personal credit score should be at least 685. In addition, you can’t have any liens, judgments, bankruptcies or late payments. Also, in the past 6 months, you should have less than 5 credit inquiries, and you should have less than a 45% balance on all business and personal credit cards. It’s also preferred that you have established business credit as well as personal credit.
If you do not meet all of the requirements, all is not lost. You can take on a credit partner that meets each of these requirements. Many business owners work with a friend or relative to fund their business. If a relative or a friend meets all of these requirements, they can partner with you to allow you to tap into their credit to access funding.
Unsecured Line of Credit in a Recession vs Secured Line of Credit
Now that you can see the benefit of using a line of credit over other financing options in certain situations, you need to know when and why to choose an unsecured line of credit.
The fact is, an unsecured line of credit in a recession, or in times of a strong economy, is harder to get. It typically has the higher interest rate of the two as well.
Check out how our reliable process will help your business get the best business credit cards, even during a recession.
This is due to increased risk to the lender. A secured business line of credit has collateral. If you don’t pay, the lender can still use the collateral to recover some if not all of the loss.
Some business owners either do not have collateral to offer, or they have no interest in tying up their assets with financing. In these cases, they may be able to get line of credit without security.
An unsecured line of credit in a recession typically has strict approval guidelines and qualifications. Due to the increased credit risk, it will likely have higher interest rates and less favorable repayment terms as well.
Where Can You Find an Unsecured Line of Credit in a Recession?
As a general rule, the same places you could any other time. Not all lenders offer this as a product, but there are options available at many traditional and alternative type lenders. Which one you go with depends, again, on your specific situation. During an economic downturn, alternative lenders may be your best bet.
Traditional lenders offer the lowest interest rates, but their repayment terms may be less flexible. They will also have qualifications that are harder to meet and a longer approval process. In addition, it can take several days after approval to have access to the funds.
An alternative lender will usually have easier to meet qualifications and more flexible repayment terms, but the interest rates are much higher. The approval process is much faster though, and usually takes place all online. In some cases, you can have access to funds in as little as 24 hours.
Application Preparation
The items you need to apply for an unsecured line of credit in a recession are the same as what you would need for any other time. It will vary from lender to lender, but a general list includes:
· Bank statements
· Financial statements
· Tax returns
Some lenders will check your business credit score, and sometimes even your personal credit score as well. A score of 620 is usually the minimum requirement for approval, but some alternative lenders do not require a minimum score. Some traditional lenders may require a higher score for an unsecured business line of credit in a recession than it would otherwise.
They are looking for minimum annual revenue as well. Traditional banks are more likely to grant approval at $180,000 or more of revenue annually. Alternative lenders usually have a lower threshold.
Basically, lenders want to see how long you have been in business and what your annual revenue is, thought exactly what they need to see to grant approval varies from lender to lender.
Examples of Unsecured Line of Credit in a Recession Options 
from Real Lenders
Seeing exactly what types of products are currently available from real lenders can be helpful in understanding the difference between what traditional and alternative lenders offer. Please note that lenders change product offerings and terms at their leisure, and then a change in economic client with trigger a change. Therefore, there is no guarantee these products have not been adjusted since this writing.
Traditional Lenders
Bank of America
There is currently an unsecured line of credit product available from Bank of American that ranges from $10,000 to $100,000. There is a $50 origination fee if approved. The origination fee is a limited time offer. It is usually $150.
A business must have been in business for two years and have a minimum of $100,000 in annual revenue to qualify.
Alternative Lenders
Fundbox
The unsecured line of credit offered by Fundbox goes up to $100,000. You will also have to have a business bank account.
The interest rate will increase based on annual revenue and time in business.
OnDeck
OnDeck offers an unsecured business line of credit of up to $100,000. You repay it weekly for up to 6 months.
Check out how our reliable process will help your business get the best business credit cards, even during a recession.
Blue Vine
This one ranges from $5,000 to $250,000. The repayment term is from 6 to 12 months.
StreetShares
With repayment terms from 3 to 36 months, this is a good option if you qualify. Amounts start at $5,000 and range up to $150,000. They also offer some specialty products with lower interest rates.
An Unsecured Business Line of Credit in a Recession Is a Viable Option
Even if the recession has caused lenders to cut back, an unsecured line of credit in a recession could be an option. It is way better than a term loan during a recession for a number of reasons. The first is that you can control payments.
A term loan requires a set payment each month, while a line of credit requires you only to make payments on the amount you use. If you only use what you need, you will very likely come out with a lower monthly payment.
If you don’t have collateral or do not want to tie up your assets with financing, an unsecured line of credit is an option. The repayment only on what you use may cost less than an unsecured term loan despite the higher interest due to being unsecured.
The bottom line is that an unsecured business line of credit can be more costly than a secured line of credit, but less costly than a term loan. While they are easier to get if you have been in business longer, have higher annual revenue, and have a great credit score, they are not impossible to get without these things. If you are not sure how much you need, or the need could vary, and you do not want to tie up assets or do not have assets to offer as security, then an unsecured business line of credit could be for you.
The post Fight Back: Get an Unsecured Business Line of Credit in a Recession appeared first on Credit Suite.
How a Good D&B Business Credit File Can Help In Hard Economic Times
No one realized when the year started that a crushing recession would follow a global pandemic. And yet, here we are living in this post COVID-19 world. Here’s how a good D&B business credit file can help you survive.
Everything you Need to Know about Your D&B Business Credit File and the Other Business Credit Reporting Agencies
When it comes to your business, business credit is one of the most important things you can focus on. Of course, you should keep your main focus on actually running the business. In hard times however, like during a recession, you will be glad you paid some attention to your business credit. Dun and Bradstreet is the largest and most widely used business credit reporting agency, or CRA. If you do not have a D&B business credit file, many lenders consider you to not have credit. There are other CRAs that are worth mentioning however.
It can help to understand a little more about business credit and how it can help in a recession. What makes it so special? Who needs it? How do you get it?
Why Business Credit?
There are a number of reasons why it is important to actively build business credit.
It Shields Your Personal Credit Report
It is important to organization success that you develop business credit. Without a business credit score, your capability to fund your business rests entirely on your individual credit score. That’s not a big deal if you have great personal credit.
However, business financing can impact your personal credit scores as well. If you finance your business on the merits of your personal credit, you will likely find your balances stay near your limits. On personal cards the limits are not as high as most business cards allow.
Discover our business credit and finance guide, jam-packed with new ways to finance your business without emptying your wallet. Save your money during the recession!
This has a negative effect on your credit report. It is true even if you are making your payments on time. If your business has its very own credit report, it’s not a problem. Limits are higher, so you have a lot more credit to deal with. Regardless, it doesn’t impact your personal credit score.
When you have solid business credit, you have access to the funds you need to run your business. Not only that, but you can do what you need to do without worrying about exhausting cash reserves.
In short, business credit opens the door to higher limits, lower interest rates, and it protects your business transactions from affecting your personal credit. This is especially important during a recession. Imagine how much harder hard times would be if your personal credit was declining due to business issues.
Business Credit vs. Personal Credit
It is also difficult to see how a D&B Business credit file, or any business credit file, is necessary if you do not understand the differences between business credit and personal credit. We break it down here.
Key Differences Between Personal Credit Reports and Business Credit Reports:
- Personal FICO scores range from 300 to 850
- Business credit scores usually range from 0 to 100.
- FICO algorithms are commonly used by consumer credit bureaus to generate a credit score.
- Business credit scores do not follow industry standard algorithms, meaning they can vary greatly between credit reporting agencies.
- Business credit usually include only accounts that are in your company’s name. Your personal accounts are on your personal credit report.
- You can get a free copy of your personal credit report from the three major consumer credit reporting agencies each year. This includes Experian, Equifax, and TransUnion. There are also several free options for getting a glimpse at your credit scores at any given time.
- Business credit is quite different when it comes to accessibility. You have to pay to see your company’s credit report and to find out the score at all three major business credit reporting agencies, including Dun and Bradstreet, Experian, and Equifax.
- Not just anyone can see your personal credit report, but business credit reports are public. Anyone that wants to pay can see your business credit, including your D&B business credit file.
What Makes the D&B Business Credit File So Special?
Besides being the largest and most commonly uses, they offer way more than just a single business credit score. There are many reporting options that lenders can choose from to assess the credit worthiness of a specific business. Here is a breakdown of what they offer, with an explanation of what it all means.
Credit Reporting at Dun and Bradstreet: What Does Dun and Bradstreet Do?
The quick answer is they provide lenders with business credit reports to help them make lending decisions.
There are six different Dun and Bradstreet reporting options. All of them measure different areas of credit worthiness. The most popular option is also the easiest to understand. It is the PAYDEX. Generally speaking, this is the Dun and Bradstreet credit score most like the consumer FICO score. It measures the speed of payment. The score ranges from 1 to 100. A 70 or higher is “good.” For example, a score of 100 means that the company makes payments in advance, and a score of 1 indicates that they pay 120 days late, or more.
What Else Does a D&B Business Credit File Include?
In addition to the PAYDEX, there are many other options for a business credit report on you D&B business credit file.
● Dun and Bradstreet Delinquency Predictor Score
The delinquency predictor score measures the likelihood the company will not pay, will be late paying, or will fall into bankruptcy. The scale is 1 to 5, and a 2 is good.
● Financial Stress Score
The financial stress score is a measurement of the pressure on a company’s balance sheet. It indicates the likelihood of a shutdown within a year. It measures with a minimum of 5 and a maximum of 1, with a score of 2 being a good thing.
- Supplier Evaluation Risk Rating
This is a rating that ranks the odds of a company surviving 12 months. The minimum score is 9 and the maximum is 1. A score of 5 is good.
- Credit Limit Recommendation
The credit limit recommendation shows a business’s borrowing capacity. It is a dollar amount recommendation for how much debt a company can handle. Typically creditors use it to determine how much credit to extend.
- D&B Credit Rating
This is an estimation of overall business risk on a scale of 4 to 1. A two is good. The rating includes letters, the combination of which indicate a company’s net worth.
Even if there isn’t enough information on a business to assign a regular rating, Dun and Bradstreet will assign what they call a Credit Appraisal Score. This is based on number of employees. Another option is an alternative rating based on what data is actually available.
What Goes into a Credit Rating on Your D&B Business Credit File?
The different scores and ratings are based on information from a number of places. The first is the business itself, but they also tap into public records. A business must submit a financial statement to D&B before they can have a full rating. In the absence of that, they give a limited rating based on number of employees. For example, the rating would be 1R if the business has 10 employees or more, and 2R if they have less than 2 employees.
A composite credit appraisal may also be available in the absence of a financial statement in your D&B business credit file. A business is only eligible for a rating up to a 2 in this case however. You do not get a 1 rating without a financial statement.
You can also self-report trade references to D&B, in addition to financial statement. This makes it easier to build business credit faster. You will need a D-U-N-S number, of course. It is free and easy to get on their website.
Discover our business credit and finance guide, jam-packed with new ways to finance your business without emptying your wallet. Save your money during the recession!
Dun and Bradstreet and the Commercial Credit Score
The commercial credit score is the term used to describe the actual business credit score. It has three separate parts. Each predicts how likely the business is to default on bills or become delinquent. Following are the three parts and the scales by which they are ranked.
● Commercial credit score
Measured on a scale of 101 to 670, it predicts the probability of a company becoming delinquent. A score of 101 is most probable, so that’s bad. A score of around 500 is good.
● Commercial credit percentile
This is measured on a scale of 0 to 100. It measures the probability of delinquency as well, but against other companies in the Dun and Bradstreet system. A score of 1 is the highest probability compared to other businesses in the system, and most say a score of 80 is good.
● Commercial credit class
This is a method of dividing businesses into classes based on the probability of delinquency. Companies in class 1 are the least likely to be delinquent. If you are in class 2, that’s good.
Who Are the Other CRAs?
You hear so much about Dun and Bradstreet, it is easy to forget that there are other agencies that offer business credit reports.
Equifax
They collect their information in ways similar Dun and Bradstreet, including: information from public records, financial data from the business, and payment history from creditors. In addition, they factor information about credit utilization, or how much credit a business is currently using versus how much they have available, into their calculation.
They then use the information collected to generate various scores, similar to those on your D&B business credit file, but not the same. These scores include the business credit risk score and the business failure score. The business credit risk score measures how likely it is that a business will become 90 days or more delinquent on bills over the next 12 months. It ranges from 101 to 992. The business failure score ranges from 1,000 to 1610, and it predicts how likely it is that the business will file for bankruptcy over the next year. The lower the score, the higher the risk.
Another score they offer is the business payment index. This is their version of the D&B PAYDEX, and it even runs on the same scale, 0 to 100. It indicates payment history over the past year. Different from the PAYDEX however, you have to reach a score of 90 or higher for it to be a “good” score.
Equifax also offers business identity reports that serve as confirmation that a company actually exists. It also verifies details such as the company’s tax ID, number of employees, and yearly sales.
Equifax does not allow business owners to request a report on their company. They decide themselves when to start a credit file on a specific company.
Experian
Your Experian report could be a lot different than the one from your D&B business credit file. Their credit ranking, Intelliscore, uses more than 800 variables to predict a company’s risk of defaulting or becoming delinquent. A 76 or higher is considered good with Intelliscore. That indicates a low risk of late payments or default. A score from 51 to 75 indicates a low to medium risk and 26 to 50 indicates medium risk. From 25 down 1 is medium high to high risk.
Intelliscore is considered a blended score of both the business and business owner’s information. It offers insights into a business’s public record findings, collections, payment trends, and overall business background. A major difference between Experian and the other two characters is that they do not ask businesses to self-report at all. Rather, they collect all the information themselves. Since it includes personal information, you do have to give permission for a lender to view this report.
Specifically, the Experian credit ranking gives insights into a company’s payment trends, public record filings, collections, and general business background. The result is a blended score calculated using both the business and business owner’s information.
Discover our business credit and finance guide, jam-packed with new ways to finance your business without emptying your wallet. Save your money during the recession!
The Experian Database and Credit Report Generation
Experian’s database has information on over 27 million businesses. Reports are generated with information from the database, which houses information on bankruptcy filings, payment history, collections, banking, insurance, and leases.
There has to be a minimum amount of information in the database about a business before Experian will generate a score for it. There must be at least one tradeline in the system, so you should definitely do business with a company that will report to Experian if you want to build business credit.
Your D&B Business Credit File and Those from Experian and Equifax Can Make All the Difference During a Recession
You can’t know or choose which one your lender will use to base their decision upon. That means it is important to build strong business credit with each one. While a lot of this is out of your control, you can choose which starter vendors you work with. Since not all starter vendors report to all credit reporting agencies, you need to make sure you do business with a variety that report to each one. Then you can be on your way to building strong business credit.
The post How a Good D&B Business Credit File Can Help In Hard Economic Times appeared first on Credit Suite.
Pros and Cons of American Express Business Credit Cards
Have you ever wondered about the pros and cons of American Express business credit cards? Well, wonder no longer. And in particular, if your personal credit is particularly good to excellent, then the pros and cons of American Express business credit cards turns into just the pros.
Great personal credit scores will always help you. And it is no more apparent than when looking at business credit card offers from American Express.
Let’s Look at the Pros and Cons of American Express Business Credit Cards
We researched the pros and cons of American Express business credit cards for you. So, here are our selections.
Per the SBA, corporate credit card limits are a massive 10 – 100 times that of personal credit cards!
This reveals you can get a great deal more funding with company credit cards. And it likewise shows you can have personal credit cards at shops. So, you would now have an additional card at the same shops for your company.
And you will not need collateral, cash flow, or financials to get small business credit.
Pros and Cons of American Express Business Credit Cards and Benefits
Benefits can differ. So, make sure to pick the benefit you would like from this selection of alternatives. Note: a lot of the pros and cons of American Express business credit cards come in the form of the personal credit scores you will need in order to qualify.
If you have fantastic personal credit, then a lot of the cons go away completely.
Pros and Cons of American Express Business Credit Cards with a 0% Introductory APR – Pay Zero!
These first selections are a pair of great choices for regular, everyday expenses. In particular, if you do not travel too often, these could be perfect cards for you. Your only choice would be cash versus points.
Blue Business® Plus Credit Card from American Express
Have a look at the Blue Business® Plus Credit Card from American Express. It has no annual fee. There is a 0% introductory APR for the initial year. Afterwards, the APR is a variable 14.74 to 20.74%.
The Pros
Get double Membership Rewards® points on day to day business purchases like office supplies or client suppers for the first $50,000 spent annually. Get 1 point per dollar afterwards.
The Cons
You will need great to superb credit to qualify.
Find it here: https://creditcard.americanexpress.com/d/bluebusinessplus-credit-card/
Establish business credit fast with our research-backed guide to 12 business credit cards and lines. Get credit cards even in a recession!
American Express® Blue Business Cash Card
Also take a look at the American Express® Blue Business Cash Card. Note: the American Express® Blue Business Cash Card is identical to the Blue Business® Plus Credit Card from American Express. However its rewards are in cash rather than points.
The Pros
Get 2% cash back on all qualified purchases on up to $50,000 per calendar year. Then get 1%.
It has no yearly fee. There is a 0% introductory APR for the first twelve months. After that, the APR is a variable 14.74 to 20.74%.
The Cons
You will need great to excellent credit scores to qualify.
Find it here: https://creditcard.americanexpress.com/d/business-bluecash-credit-card/
Pros and Cons of American Express Business Credit Cards with Flexible Financing Credit Cards – Check Out This Great Choice!
If you can pay the minimum early every month, then this next card could be the ideal choice for you. But the annual fee is rather high, after the first year’s introductory $0 fee.
The Plum Card® from American Express
Check out the Plum Card® from American Express. It has an introductory annual fee of $0 for the first year. After that, pay $250 each year.
The Pros
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.
The Cons
You will need excellent to exceptional credit scores to qualify. And that annual fee is rather high.
Find it here: https://creditcard.americanexpress.com/d/the-plum-card-business-charge-card/
Pros and Cons of American Express Business Credit Cards for Lavish Travel Points
Hotel Credit Card
If you spend a lot of time on the road, this could be a good card for you. The annual fee could be better – and it could be a lot worse, too.
The points and rewards are particularly good. But the price of a second free night in a calendar year? It is far higher than the value of any room at Marriott Bonvoy, anywhere around the world.
If you make a lot of purchases on this card, then it can be worthwhile, and the annual fee can be justifiable. And since you can get multiplied points for everyday activities like eating out and filling your tank, you may be able to make the minimum spend for the really good rewards.
But that means using this particular credit card practically to the exclusion of all others.
Marriott Bonvoy Business™ American Express® 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 to 26.24%.
The Pros: Points
You can get 75,000 Marriott Bonvoy points after using your card to make purchases of $3,000 in the initial three months. Get 6 times the points for qualified purchases at participating Marriott Bonvoy hotels. You can get 4 times the points at United States restaurants and filling stations. And you can get 4 times the points on wireless telephone services bought directly from US providers and on US purchases for shipping.
Get double points on all other eligible purchases.
The Pros: Rewards
Plus, you get a free night each year after your card anniversary. And you can get one more free night after you spend $60,000 on your card in a calendar year.
You get free 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.
The Cons
You will need good to exceptional credit scores to get this card.
Find it here: https://creditcard.americanexpress.com/d/bonvoy-business/
Establish business credit fast with our research-backed guide to 12 business credit cards and lines. Get credit cards even in a recession!
Airline Credit Card
The main positives for this credit card are the great perks for travel. If you travel a lot, and you buy your airline tickets with this card, then you can probably make the minimum spend for the first three months.
But the negatives far, far outweigh the positive aspects of this credit card. The annual fee is about what you could pay for three or four other American Express business credit cards. And the points boost will not kick in until you have spent enough to buy a house in Little Rock, Arkansas.
And even if you can make it to the exorbitant spend levels this card demands; the perks are not as generous as they could be.
Delta SkyMiles® Reserve Business American Express Card
Have a look at the Delta SkyMiles® Reserve Business American Express Card. Nowhere are the pros and cons of American Express business credit cards more apparent than here.
The Pros
The best way to use this card is if you travel for business a great deal. Then, and only then, it may be the card for you. Get up to 100,000 Bonus Miles and 20,000 Medallion® Qualification Miles. You can get 80,000 bonus miles and 20,000 Medallion® Qualification Miles after you spend $5,000 in your first three months. Also, earn an additional 20,000 bonus miles after your initial anniversary of card membership.
Get triple miles on Delta purchases. And get 1.5 times the miles on eligible purchases the rest of the year after you spend $150,000 in a calendar year. Get a companion certificate annually upon renewal. And you get one Global Entry ($100) statement credit every 4 years. Or you can get one TSA Pre ✓® ($85) statement credit every 4.5 years for an application, free.
The Cons
It has a $550 annual fee! There is no introductory APR offer. Rather, the regular APR is a variable 17.24 to 26.24%.
You will need good to outstanding credit to qualify.
Find it here: https://creditcard.americanexpress.com/d/delta/
Establish business credit fast with our research-backed guide to 12 business credit cards and lines. Get credit cards even in a recession!
Your Pros and Cons of American Express Business Credit Cards
Your own pros and cons of American Express business credit cards will depend upon your credit report and scores.
Just you can pick which features you want and need. So, ensure to do your homework. What is outstanding for you could be devastating for another person.
In particular, be sure to value these cards’ annual fees versus the required spends to get the best perks. If you cannot make the minimums, then why are you paying for these credit cards?
And, as always, make certain to establish credit in the advised order for the best, fastest benefits.
The post Pros and Cons of American Express Business Credit Cards appeared first on Credit Suite.
Empower Your Business with 0% APR Business Credit Cards in a Recession
Get Epic 0% APR Business Credit Cards in a Recession
Do you know how to get 0% APR Business Credit Cards in a recession? We break down the many choices out there to show you the best corporate credit cards with 0% APR.
Per the SBA, corporate credit card limits are often 10 – 100 times that of personal cards! This means you can get a lot more cash with business credit.
And this also means you can have personal credit cards at retail stores, and now have a second card at the same shops for your company. And you will not need collateral, cash flow, or financials to get small business credit.
0% APR Business Credit Cards in a Recession: Benefits
Features vary, so make certain to pick the perk you prefer from this selection of possibilities.
Alternatives to 0% APR Business Credit Cards in a Recession: Dependable Credit Cards for Fair to Poor Credit, Not Calling for a Personal Guarantee
Brex Card for Startups
Check out the Brex Card for Startups. It has no yearly charge.
You will not need to supply your Social Security number to use. And you will not need to supply a personal warranty. 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 paperwork. 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. Also, get triple points on dining establishments. 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/
Check out how our reliable process will help your business get the best business credit cards, even during a recession.
Secure Business Credit Cards for Fair Credit
Capital One® Spark® Classic for Business
Check out the Capital One® Spark® Classic for Business. It has no annual cost. There is no initial APR offer. The regular APR is a variable 24.49%. You can get limitless 1% cash back on every purchase for your business, without minimum to retrieve.
While this card is within reach if you have fair credit, beware of the APR. However if you can pay in a timely manner, and in full, after that it’s a bargain.
Find it here: https://www.capitalone.com/small-business/credit-cards/spark-classic/
Superior Business Credit Cards without Annual Charge
No Yearly Fee/Flat Rate Cash Back
Ink Business Unlimited ℠ Credit Card
For a great example of 0% APR business credit cards in a recession, look into the Ink Business Unlimited ℠ Credit Card. Beyond no yearly cost, get an initial 0% APR for the initial twelve months. After that, the APR is a variable 14.74 – 20.74%. You can get endless 1.5% Cash Back rewards on every purchase made for your company. As well as obtain $500 bonus cash back after investing $3,000 in the first three months from account opening. You can redeem your incentives for cash back, gift cards, traveling and even more through Chase Ultimate Benefits ®. You will require excellent credit report to get approved for this card.Find it here: https://creditcards.chase.com/business-credit-cards/ink/unlimited
Alternatives to 0% APR Business Credit Cards in a Recession:
0% APR Business Credit Cards in a Recession – Pay Absolutely Nothing!
Blue Business® Plus Credit Card from American Express
For a great example of 0% APR business credit cards in a recession, have a look at the Blue Business® Plus Credit Card from American Express. It has no annual charge. There is a 0% introductory APR for the initial one year. After that, the APR is a variable 14.74 – 20.74%.
Get double Subscription Rewards ® points on day-to-day business purchases like office supplies or customer suppers for the initial $50,000 spent per year. Get 1 point per dollar after.
You will certainly require excellent to superb credit report to qualify.
Find it here: https://creditcard.americanexpress.com/d/bluebusinessplus-credit-card/
American Express® Blue Business Cash Card
Additionally take a look at the American Express® Blue Business Cash Card. Note: the American Express® Blue Business Cash Card is identical to Blue Business® Plus Credit Card from American Express. However its rewards are in cash rather than points.
Get 2% money back on all qualified purchases on approximately $50,000 per calendar year. After that get 1%.
It has no annual cost. There is a 0% introductory APR for the initial year. After that, the APR is a variable 14.74 – 20.74%.
You will need great to superb credit to qualify.
Find it here: https://creditcard.americanexpress.com/d/business-bluecash-credit-card/
Terrific Cards for Cash Back
Flat-Rate Rewards
Capital One ® Spark® Cash for Business
Look into the Capital One® Spark® Cash for Business. It has an introductory $0 annual fee for the very first year. After that, this card costs $95 per year. There is no initial APR offer. 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 unrestricted 2% cash back. Redeem any time with no minimums.
You will need good to superb credit to qualify.
Find it here: https://www.capitalone.com/small-business/credit-cards/spark-cash/
Flat-Rate Rewards and No Yearly Cost
Discover it® Business Card
For a great example of 0% APR business credit cards in a recession, have a look at the Discover it® Business Card. It has no yearly fee. There is an initial APR of 0% on acquisitions for one year. After that the routine APR is a variable 14.49 – 22.49%. Get unrestricted 1.5% cash money back on all purchases, with group restrictions or perks. They double the 1.5% Cashback Match™ at the end of the very first year. There is no minimum spend requirement.
You can download deals quickly to Quicken, QuickBooks, as well as Excel. Note: you will need great to superb credit scores to get approval for this card.
Find it here: https://www.discover.com/credit-cards/business/?ICMPGN=PUB_HNAV_CARDS_BUSINESS
Check out how our reliable process will help your business get the best business credit cards, even during a recession.
Bonus Categories
Ink Business Cash℠ Credit Card
For a great example of 0% APR business credit cards in a recession , check out the Ink Business Cash℠ Credit Card. It has no annual cost. There is a 0% initial APR for the first year. 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 initial 3 months from account opening.
You can earn 5% cash back on the very first $25,000 spent in mixed acquisitions at workplace supply shops and also on web, cord and phone services each account wedding anniversary year. Get 2% cash back on the initial $25,000 spent in combined purchases at gas stations and also restaurants each account anniversary year. Get 1% cash back on all other purchases. There is no limit to the amount you can earn.
You will need outstanding credit scores to get approval for this card.
Locate it right here: https://creditcards.chase.com/business-credit-cards/ink/cash?iCELL=61GF
Boosted Cash Back Categories
Bank of America® Business Advantage Cash Rewards Mastercard® credit card
Take a look at the Bank of America® Business Advantage Cash Rewards Mastercard® credit card. Get an 0% initial APR for the first 9 billing cycles of the account. Afterwards, the APR is 13.74% – 23.74% variable. There is no annual charge. You can get a $300 statement credit offer.
Get 3% cash back in the group of your choice. So these are filling stations (default), office supply shops, travel, TV/telecom & wireless, computer services or business consulting solutions. Get 2% cash back on dining. So this is for the first $50,000 in combined choice category/dining purchases each calendar year. After that make 1% after, unlimited.
You will need excellent credit scores to qualify.
Find it here: https://promo.bankofamerica.com/smallbusinesscards2/
Alternatives to 0% APR Business Credit Cards in a Recession: Flexible Financing Credit Cards – Take A Look at Your Alternatives!
The Plum Card® from American Express
Have a look at the Plum Card® from American Express. It has an initial annual fee of $0 for the first year. Afterwards, pay $250 each 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 good to outstanding credit to qualify.
Find it here: https://creditcard.americanexpress.com/d/the-plum-card-business-charge-card/
Check out how our reliable process will help your business get the best business credit cards, even during a recession.
Irresistible Cards for Jackpot Rewards That Never Expire
Capital One® Spark® Cash Select for Business
For a great example of 0% APR business credit cards in a recession, have a look at the Capital One® Spark® Cash Select for Business. It has no yearly cost. You can get 1.5% cash back on every purchase. There is no limitation on the cash back you can earn. And get a one-time $200 cash bonus when you spend $3,000 on purchases in the first three months. Rewards never run out.
Pay a 0% introductory APR for 9 months. Then pay 14.49% – 22.49% variable APR after that.
You will need good to excellent credit to qualify.
Find it here: https://www.capitalone.com/small-business/credit-cards/spark-cash-select/
Company Credit Cards for Extravagant Travel Points
Flat-rate Travel Rewards
Capital One® Spark® Miles for Business
Have a look at the Capital One® Spark® Miles for Business. It has an introductory annual cost 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 expenditures don’t come under standard bonus categories. You can get unlimited double miles on all purchases, with no restrictions. Get 5x miles on rental cars and hotels if you book with Capital One Travel.
Get an introductory benefit of 50,000 miles. That’s the same as $500 in travel. But you only get it if you spend $4,500 in the first 3 months from account opening. There is no foreign transaction fee. You will need a great to superb FICO rating to qualify.
Find it here: https://www.capitalone.com/small-business/credit-cards/spark-miles/
Bonus Travel Categories with Sign-Up Offer
Ink Business Preferred℠ Credit Card
For a wonderful sign-up deal and bonus categories, look into the Ink Business Preferred℠ Credit Card.
Pay an annual cost 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 first $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 also search engines each account anniversary year.
You can get 25% more in travel redemption when you redeem for travel via Chase Ultimate Rewards. You will need a good to superb FICO score to qualify.
Find it here: https://creditcards.chase.com/business-credit-cards/ink/business-preferred
No Yearly Fee
Bank of America® Business Advantage Travel Rewards World Mastercard® credit card
For a great example of 0% APR business credit cards in a recession, take a look at this card from Bank of America. It has no annual fee and a 0% introductory APR for purchases during the first 9 billing cycles. Afterwards, its regular APR is 13.74 – 23.74% variable.
You can earn 30,000 bonus points when you make at the very least $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 every $1 you spend on all purchases, everywhere, every time. And this is no matter how much you spend.
Likewise earn 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 outstanding 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/
Hotel Credit Card
Marriott Bonvoy Business™ American Express® Card
Check out 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 superb credit scores to get this card.
Points
You can get 75,000 Marriott Bonvoy points after using your card to make purchases of $3,000 in the first 3 months. Get 6x the points for eligible purchases at participating Marriott Bonvoy hotels. You can get 4x the points at US restaurants and gasoline stations. And you can get 4x the points on wireless telephone services bought directly from US service providers and on US purchases for shipping.
Get double points on all other eligible purchases.
Rewards
And also, you get a free night each year after your card anniversary. And you can make an additional free night after you spend $60,000 on your card in a calendar year.
You get free of charge Marriott Bonvoy Silver Elite status with your Card. And also, spend $35,000 on qualified purchases in a calendar year and also make an upgrade to Marriott Bonvoy Gold Elite status through completion of the next calendar year.
And also, 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/
Your Best 0% APR Business Credit Cards in a Recession and More
Your absolute best 0% APR business credit cards in a recession will hinge upon your credit history and scores. Just you can determine which features you want and need, so make sure to do your research. And, as always, make certain to build business credit in the recommended order for the best, fastest benefits.
The post Empower Your Business with 0% APR Business Credit Cards in a Recession appeared first on Credit Suite.
How to Build Business Credit Without Using Personal Credit
You need to know how to build business credit without using personal credit. It’s possible, but you have to start at the beginning and work through the process.
How to Build Business Credit Without Using Personal Credit: There is More to the Process than You May Imagine
That’s right, there is a process for how to build business credit without using personal credit. Just like any process, you can’t start in the middle. You can’t start at the end. There is no other place to start and make it work than the beginning.
How to Build Business Credit Without Using Personal Credit: Set Your Business Up to Be Fundable
The first step in how to build business credit without using personal credit is to separate your business from yourself. Until you do that, your personal credit will come into play every time. Your business has to be a separate, fundable entity all on its own. How do you make this happen?
Set Up Separate Contact Information
First, make sure your business has its own phone number, fax number, and address. That doesn’t mean you can’t run your business from your house. There are ways to separate contact information and still do that.
Check out our best webinar with its trustworthy list of seven vendors to help you build business credit.
In fact, you can get a business phone number and fax number that will work over the internet instead of phone lines. Also, the phone number will forward to any phone you want it too so you can simply use your personal cell phone or landline.
Furthermore, you can use a virtual office for a business address. That is different than what you may think. A virtual office is a business that offers a physical address for a fee. Sometimes they even offer mail service and live receptionist services. In addition, there are some that have meeting spaces for when you need to meet a client or customer in person.
EIN
Next, you have to get an EIN. As you may know, that’s an identifying number for your business that works similar to how your SSN works for you personally. You can get one for free from the IRS.
Incorporate
Not surprisingly, incorporating your business as an LLC, S-corp, or corporation is necessary for separation. In addition, iIt lends credibility to your business as one that is legitimate. It also offers some protection from liability.
The truth is, which option you choose relates more to your budget and protection needs. In fact, the best thing to do is talk to your attorney or a tax professional when making that decision.
You Need a Separate Business Bank Account
Why? First, it will help you keep track of business finances. It will also help you keep them separate from personal finances for tax purposes.
There’s more to it however. There are several types of funding you cannot get without a business bank account. Many lenders and credit cards want to see one with a minimum average balance. In addition, you cannot get a merchant account without a business account at a bank. That means, you cannot take credit card payments. Studies show consumers tend to spend more when they can pay by credit card.
Licenses
A legitimate business has all of the necessary licenses it needs to operate legally. If it doesn’t, warning signals are going to alert lenders that there may be a problem. Make sure you have all of the licenses necessary to legitimately run your business at the federal, state, and local levels.
Website
You might as well not exist if you don’t have a website. However, having a website that looks unprofessional or isn’t user friendly can be even worse. Often, this is the first impression you make. If it appears to be unprofessional that will be bad.
Spend the time and money necessary to ensure your website is professionally designed and works well. Pay for hosting too. Don’t use a free hosting service. Along these same lines, your business needs a dedicated business email address. Make sure it has the same URL as your Website. Don’t use a free service such as Yahoo or Gmail.
How to Build Business Credit Without Using Personal Credit: Get Initial Accounts Reporting
Now that your business is separate and can have its very own credit, you have to get accounts reporting. This is the crux of how to build business credit without using personal credit. There are a few ways to do it.
Ask Current Vendors to Report Payments to Credit Agencies
Vendors you already work with may be willing to extend credit without a credit check. If not, they may give you net terms on invoices. The worst they can say is no. If they say yes, ask them to report the payments to the business credit agencies.
Check out our best webinar with its trustworthy list of seven vendors to help you build business credit.
Ask Monthly Service Providers to Report Payments
You already pay utilities, rent, and internet each month. Ask those providers to report your payments to the business credit reporting agencies. If they say yes, make certain your accounts are set up in your business name with your business contact information. Then, those payments will help build business credit.
Work with Starter Vendors
Starter vendors are the key to how to build business credit without using personal credit. They are part of what we like to call vendor credit. These are certain retailers that will extend Net 30 terms in your business name without a credit check. Then, after you pay, they will report those payments to the business credit report agencies (CRAs).
This starts a sort of snowball effect for building business credit. They do not check your credit score, so it doesn’t matter that it may not be great. As you make these payments responsibly and they are reported, you begin to build positive business credit history.
How to Build Business Credit Without Using Personal Credit: Work Through Getting More Credit
There are actually more kinds of credit beyond vendor credit. You have to work through them in order. Once you get enough initial accounts reporting from vendor credit, you can apply for revolving store cards (AKA retail credit). These are vendors as well, but they do check your business credit.
Generally, these are credit cards limited to use at the stores that issue them. For example, Office Depot cards can only be used at Office Depot. Best Buy cards can only be used at Best Buy.
After retail credit comes fleet credit. This includes fleet credit cards that are limited to use for fuel and auto repair and maintenance costs. Examples include fleet cards issued by Shell, Fuelman, and WEX.
After this comes more universal cash credit. If you have enough accounts and you handle them responsibly, you should qualify for approval here. It includes general business credit cards that are not limited to where you can use them or what you can use them on. Often, they even have nice rewards such as cash back.
Business Credit is Just a Piece of A Much Larger Puzzle
Of course, when it comes to funding your business, business credit isn’t the only thing that makes a difference. It is arguably the biggest factor, but other things come into play as well. You need to know what those things are so you aren’t going in blind.
Other Business Data Agencies
There are other business data agencies that affect credit reports indirectly. Two examples include LexisNexis and The Small Business Finance Exchange. These two agencies collect data from various sources, including public records. That means, they could have access to information relating to automobile accidents and liens, among other things. I think you’ll agree that most business owners do not expect things like this to affect their ability to get funding. However, it can.
While you may not be able see or make changes to the data these agencies have on your business, you can make sure that any new information they receive is positive. Enough positive information can help counteract any negative information from the past.
Identification Numbers
Other than the EIN, there are identifying numbers that go along with your business credit reports. You need to be aware that these numbers exist. Some of them are assigned by the agency, like the Experian BIN. At least one, however, you have to apply to get. It is absolutely necessary that you do this.
Dun & Bradstreet is the largest and most commonly used business credit reporting agency. Every credit file in their database has a D-U-N-S number. To get a D-U-N-S number, you have to apply for one through the D&B website. If you do not, you will not have a credit report with D&B. When a lender tries to pull your business credit score from them, it will not be there, no matter how well you have paid your business accounts.
Business Information
On the surface, it seems obvious that all of your business information should be the same everywhere you use it. However, when you start changing things up, you may find that some things slip.
This is a problem. A ton of loan applications are turned down each year due to fraud concerns because things do not match up. Maybe your business licenses have your personal address but now you have a separate business address. Change it. Perhaps some of your credit accounts have a slightly different name or a different phone number listed than what is on your loan application. Do your insurances all have the correct information?
The key to this piece of the business fundability is to monitor your reports regularly.
Financial Statements
This encompasses a broad spectrum of things. First, there is the obvious. Both your personal and business tax returns need to be in order. Not only that, but you need to be paying your taxes, both business and personal.
Business Financials
It is best to have an accounting professional prepare regular financial statements for your business. Having an accountant’s name on financial statements lends credence to the legitimacy of your business. If you cannot afford this monthly or quarterly, at least have professional statements prepared each year.
Personal Financials
Often tax returns for the previous three years will suffice. Get a tax professional to prepare them. This is the bare minimum you will need. Other information you may need could include check stubs and bank statements, among other things.
Bureaus
There are several other agencies that hold information related to your personal finances that you need to know about. Everyone knows about FICO. Your personal FICO score needs to be as strong as possible. It really can affect business fundability and almost all traditional lenders will look at personal credit along with business credit.
In addition to FICO reporting personal credit, there is ChexSystems. In the simplest terms, they keep up with bad check activity. This makes a difference when it comes to your bank score. If you have too many bad checks, you will not be able to open a bank account. That will cause serious fundability issues.
Everything is fair game. Have you ever been convicted of a crime? Do you have a bankruptcy or short sell on your record? How about liens or UCC filings? All of this can and will affect the fundability of your business.
Personal Credit History
Even once you know how to build business credit without using personal credit, your personal credit score matters. It has to be in order because it will definitely affect the fundability of your business. Work on improving it while you’re building business credit without it. The number one way to get a strong personal credit score or improve a weak one is to make payments consistently on time.
Also, make sure you monitor your personal credit regularly to ensure mistakes are corrected and that there are no fraudulent accounts being reported.
Application
Consider the timing of the application. Is your business currently fundable? If not, do some work first to increase fundability. Next, ensure that your business name, business address, and ownership status are all verifiable. Lenders will check into it. Lastly, make sure you choose the right lending product for your business and your needs. Do you need a traditional loan or a line of credit? Would a working capital loan or expansion loan work best for your needs? Choosing the right product to apply for can make all the difference.
Check out our best webinar with its trustworthy list of seven vendors to help you build business credit.
How to Build Business Credit Without Using Personal Credit: It Is Possible
You need to know how to build business credit without using personal credit, especially if your personal credit is bad. However, you cannot just ignore personal credit. It affects the fundability of your business as well as many other factors. Take the time to improve your personal credit and evaluate the other pieces of your complete fundability picture while building business credit. Then, you will always be able to get the funding you need.
The post How to Build Business Credit Without Using Personal Credit appeared first on Credit Suite.
How to Build Business Credit Without Using Personal Credit
You need to know how to build business credit without using personal credit. It’s possible, but you have to start at the beginning and work through the process. How to Build Business Credit Without Using Personal Credit: There is More to the Process than You May Imagine That’s right, there is a process for how … Continue reading How to Build Business Credit Without Using Personal Credit
3 Recession Factors that Can Devastate a New Business Credit Score
Did You Know These Recession Factors Can Devastate a New Business Credit Score?
These are three ways you can devastate a new business credit score. Do not let anything like this happen to you! These are easily preventable. Save your business credit scores!
Uh, oh. You tried to build a commercial credit score without truly thinking it through and taking into consideration what affects small business credit rating. Let’s take a look at 3 factors that can devastate your business credit scores. And how to fix them.
And you do have to fix them, because this is what affects a business credit rating.
In particular, this is an issue during economic downturns.
Recession Era Financing and COVID-19
As the novel coronavirus continues to transform our economy, it becomes more imperative than ever to keep your business credit scores high. It’s no time to make preventable errors – like these three.
Devastate a New Business Credit Score: 3. You Used More Credit Than Your Company Could Handle
Credit can be intoxicating. Take a look at all that free cash! Look at all the important things your company needs!
Wait; wait, whoa, time out!
It is not free cash. It’s a loan, really. All credit is whether it’s commercial or consumer. If you have gone on a wild credit spree, your credit rating is going to be affected. How? Delinquency.
When you are that much in hock, it may be tricky to stay on top of the payments. Late payments will directly and adversely impact your business credit score. So be responsible with credit. This isn’t gambling; it’s your livelihood and the livelihood of anyone who works for you.
Devastate a New Business Credit Score: 2. You Didn’t Stay on Top of Your Credit Scores or Dispute CRA Mistakes
While credit reports aren’t exactly page turners, you should still be staying on top of them.
Don’t have time to read through credit reports? Then use a monitoring service. Experian offers Business Credit Advantage. PAYDEX has Credit Reporter. And Equifax has Business Credit Monitor. If you prefer a free version for credit alerts, you can try CreditSignal.
Fix Your New Business Credit Score Now!
The point of all of that monitoring is to spot errors and fix them. If any one of your credit reports has mistakes, then you must get on top of that, without delay. Disputing credit report errors generally means you send a paper letter with copies of any proofs of payment with it.
These are documents like receipts and cancelled checks.
Details of How to Fix a New Business Credit Score
Never send the originals. Always send copies and retain the originals. Precisely detail any charges you dispute. Make your dispute letter as crystal clear as possible. Use certified mail so that you will have proof that you sent in your dispute.
Contesting an error quickly means your credit reports will be corrected more quickly.
Find out why so many companies are using our proven methods to improve their business credit scores, even during a recession.
Devastate a New Business Credit Score: 1. You Didn’t Separate Your Company and Individual Credit (or You Didn’t Do So Quickly)
The longer and more intimately your personal and business finances are entangled, the more likely it is that credit reporting agencies will take your consumer credit into account when looking at your company.
This doesn’t give your company a chance to make its own credit ‘name’, as it were. When you examine your company credit score vs personal credit score, they should be different.
You Can Change a New Business Credit Score
Paying off your business’s charges with personal charge cards or checks; not getting a separate IRS EIN number for your company; and not putting your business’s bills in the company’s name can all aggravate this problem.
And the Internal Revenue Service will probably have something to say about your business not having its own identification number.
Fix a New Business Credit Score Now!
So to repair this, your mission is as follows:
- Get an EIN first. You can apply online after you determine your eligibility. That is, if your business is located within the US, etc.
- Visit your local bank and open a small business banking account
- Contact local vendors and get your company’s bills put into the company’s name. While you’re at it, see if you can start to build trade credit with them
- Always pay the business’s bills with your business accounts or credit
Bonus – Business Credit Building
Factors that can devastate your business credit scores include not building business credit in the proper manner. So here’s how to do that. Corporate credit is credit in a small business’s name.
It isn’t attached to an owner’s individual credit, not even when the owner is a sole proprietor and the solitary employee of the business. Therefore, an entrepreneur’s business and individual credit scores can be very different.
The Advantages
Because business credit is detached from consumer, it helps to safeguard an entrepreneur’s personal assets, in the event of a lawsuit or a business bankruptcy. Also, with two distinct credit scores, an entrepreneur can get two separate cards from the same merchant.
This effectively doubles buying power.
Another advantage is that even startup businesses can do this. Heading to a bank for a business loan can be a recipe for disappointment. But don’t worry. Building small business credit, when done correctly, is a plan for success.
Personal credit scores rely on payments but also various other considerations like credit usage percentages. But for business credit, the scores actually just depend on whether a small business pays its bills in a timely manner.
The Process
Building Small Business Credit is a process, and it does not occur automatically. A business must proactively work to build corporate credit. Nonetheless, it can be done readily and quickly, and it is much quicker than establishing personal credit scores. Merchants are a big part of this process.
Undertaking the steps out of order will cause repeated rejections. Nobody can start at the top with corporate credit. For instance, you can’t start with store or cash credit from your bank. If you do you’ll be turned down 100% of the time.
Company Legitimacy
A business needs to be legitimate to lenders and vendors. As a result, a corporation will need a professional-looking web site and e-mail address, with site hosting purchased from a supplier such as GoDaddy. Plus company telephone and fax numbers ought to be listed on 411. com. Also the company telephone number should be toll-free (800 exchange or comparable).
A corporation will also need a bank account dedicated purely to it, and it needs to have all of the licenses required for operating. These licenses all have to be in the precise, appropriate name of the corporation, with the same company address and telephone numbers.
Note that this means not just state licenses, but possibly also city licenses.
Find out why so many companies are using our proven methods to improve their business credit scores, even during a recession.
Dealing with the IRS
Visit the Internal Revenue Service web site and get an EIN for the small business– they’re free. Choose a business entity like corporation, LLC, etc.
A small business can start off as a sole proprietor but will probably want to switch to a kind of corporation or partnership to reduce risk and take full advantage of tax benefits.
And a business entity will matter when it comes to tax obligations and liability in case of a lawsuit. A sole proprietorship means the owner is it when it comes to liability and taxes. No one else is responsible.
DBAs
If you operate a small business as a sole proprietor at least file for DBA (‘ doing business as’) status. If you do not, then your personal name is the same as the corporate name. Consequently, you can end up being personally liable for all company debts.
Also, per the IRS, by having this arrangement there is a 1 in 7 possibility of an IRS audit. There is a 1 in 50 probability for incorporated businesses! Avoid confusion and considerably lower the chances of an Internal Revenue Service audit at the same time.
And see a DBA as a stepping stone to incorporating. It shouldn’t be your final destination for your choice of business entity.
Kicking Off the Business Credit Reporting Process
Begin at the D&B web site and obtain a free DUNS number. A DUNS number is how D&B gets a small business in their system, to generate a PAYDEX score. If there is no DUNS number, then there is no record and no PAYDEX score.
Once in D&B’s system, search Equifax and Experian’s sites for the company. You can do this at https://www.creditsuite.com/reports/. If there is a record with them, check it for accuracy and completeness. If there are no records with them, go to the next step in the process.
By doing so Experian and Equifax will have activity to report on.
Vendor Credit
First you need to build trade lines that report. This is also known as vendor credit. Then you’ll have an established credit profile, and you’ll get a business credit score. And with an established business credit profile and score you can begin obtaining revolving store and cash credit.
These sorts of accounts tend to be for the things bought all the time, like shipping boxes, outdoor work wear, ink and toner, and office furniture.
What is Trade Credit?
But first of all, what is Trade Credit? These trade lines are creditors who will give you preliminary credit when you have none now. Terms are normally Net 30, as opposed to revolving.
Hence if you get approval for $1,000 in vendor credit and use all of it, you must pay that money back in a set term, such as within 30 days on a Net 30 account.
Net 30 accounts need to be paid in full within 30 days. 60 accounts have to be paid fully within 60 days. Unlike with revolving accounts, you have a set time when you must pay back what you borrowed or the credit you used.
Start Building Business Credit
To kick off your business credit profile the proper way, you should get approval for vendor accounts that report to the business credit reporting bureaus.
As soon as that’s done, you can then make use of the credit, repay what you used, and the account is reported to Dun & Bradstreet, Experian, or Equifax.
Vendor Credit Helps!
Not every vendor can help in the same way true starter credit can. These are merchants that will grant an approval with nominal effort. You also want them to be reporting to one or more of the big three CRAs: Dun & Bradstreet, Equifax, and Experian.
You want 3 of these to move onto the next step, which is revolving store credit.
Uline Shipping Supplies
Uline Shipping Supplies is a true starter vendor. Find them online at uline.com. They sell shipping, packing, and industrial supplies, and they report to D&B.
You must have a DUNS number. They will request 2 references and a bank reference. The initial few orders may need to be prepaid to initially get approval for Net 30 terms.
Quill Office Supplies
Quill Office Supplies is an additional true starter vendor. Find them online at quill.com. They sell office, packaging, and cleaning supplies, and they report to D&B and Experian.
Place an initial order first unless the D&B score is developed. Normally they’ll put you on a 90 day prepayment schedule.
If you order items each month for 3 months, they will commonly approve you for a Net 30 Account.
Grainger Industrial Supply
Grainger Industrial Supply is also a true starter vendor. Find them online at grainger.com.
They sell safety equipment, plumbing supplies, and more, and they report to D&B. You will need to have a business license, EIN, and a DUNS number. For less than $1000 credit limit they will approve virtually any person with a business license.
Find out why so many companies are using our proven methods to improve their business credit scores, even during a recession.
Accounts That Do Not Report
Non-Reporting Trade Accounts can also be helpful. While you do want trade accounts to report to at the very least one of the CRAs, a trade account which does not report can nevertheless be of some worth.
You can always ask non-reporting accounts for trade references. And also credit accounts of any sort will help you to better even out business expenses, thereby making financial planning less complicated. These are providers like PayPal Credit, T-Mobile, and Best Buy.
Retail Credit
Once there are 3 or more vendor trade accounts reporting to at least one of the CRAs, move onto revolving store credit. These are companies like Office Depot and Staples. These companies are more likely to have items you need.
Use the corporation’s EIN on these credit applications.
Fleet Credit
Are there more accounts reporting? Then move onto fleet credit. These are businesses such as BP and Conoco. Use this credit to buy, repair, and maintain vehicles. Make sure to apply using the small business’s EIN.
If you already have adequate trade lines, you can get an approval.
Cash Credit
Have you been sensibly managing the credit you’ve up to this point? Then move to more universal cash credit. These are businesses such as Visa and MasterCard. Keep your SSN off these applications; use your EIN instead.
These are commonly MasterCard credit cards. If you have more trade accounts reporting, then these are attainable.
Monitor Your Business Credit
Know what is happening with your credit. Make certain it is being reported and take care of any mistakes as soon as possible. Get in the practice of checking credit reports and digging into the specifics, and not just the scores.
We can help you monitor business credit at Experian and D&B for 90% off.
At Equifax, you can monitor your account at: equifax.com/business/business-credit-monitor-small-business.
Fix a New Business Credit Score Now!
Update the info if there are inaccuracies or the information is incomplete. At D&B, you can do this at: https://iupdate.dnb.com/iUpdate/viewiUpdateHome.htm.
For Experian, go here: experian.com/small-business/business-credit-information.jsp.
Equifax: equifax.com/business/small-business.
Contesting Errors Which Can Devastate a New Business Credit Score
What’s all this monitoring for? It’s to contest any mistakes in your records. Errors in your credit report( s) can be taken care of. But the CRAs often want you to dispute in a particular way.
Get your small business’s PAYDEX report at: dnb.com/about-us/our-data.html.
You can get your company’s Experian report at: businesscreditfacts.com/pdp.aspx?pg=SearchForm.
And get your Equifax business credit report at: equifax.com/business/credit-information.
Disputes
Disputing credit report mistakes normally means you mail a paper letter with copies of any evidence of payment with it. These are documents like receipts and cancelled checks. Never mail the original copies. Always mail copies and keep the originals.
Disputing credit report mistakes also means you precisely detail any charges you contest. Make your dispute letter as crystal clear as possible. Be specific about the concerns with your report. Use certified mail so that you will have proof that you mailed in your dispute.
Details
Also, dispute your or your corporation’s Equifax report by following the instructions here: equifax.com/small-business-faqs/#Dispute-FAQs.
Dispute inaccuracies on your or your small business’s Experian report by following the directions here: experian.com/small-business/business-credit-information.jsp.
So, D&B’s PAYDEX Customer Service contact number is here: dandb.com/glossary/paydex.
Also, always use credit responsibly! Don’t borrow more than what you can pay off. Track balances and deadlines for payments. Paying punctually and fully will do more to increase business credit scores than virtually anything else.
Factors That Can Devastate a New Business Credit Score – Takeaways
Building corporate credit pays. Good business credit scores help a corporation get loans. Your lending institution knows the corporation can pay its financial obligations. They know the company is for real.
The corporation’s EIN links to high scores, and creditors won’t feel the need to ask for a personal guarantee.
Save your business credit scores! Learn more here and get started toward getting rid of these factors that can devastate a new business credit score.
The post 3 Recession Factors that Can Devastate a New Business Credit Score appeared first on Credit Suite.
How to Easily Improve Your Business Credit Scores in a Recession
Yes, You Can Easily Improve Your Business Credit Scores in a Recession – This is Foolproof!
Do you know your small business’ business credit score? And is it, maybe, not so hot? Then consider these simple tips for how to easily improve your business credit scores in a recession.
Every Small Business Needs Business Credit Building
This is especially true in an economic downturn, when bank loans can be scarce.
Company credit is credit in a small business’s name. It doesn’t attach to an owner’s personal credit, not even when the owner is a sole proprietor and the sole employee of the small business.
Thus, an entrepreneur’s business and personal credit scores can be very different.
The Benefits
Because small business credit is distinct from consumer, it helps to protect a business owner’s personal assets, in case of litigation or business bankruptcy.
Also, with two distinct credit scores, a small business owner can get two different cards from the same vendor. This effectively doubles purchasing power.
Another benefit is that even startup businesses can do this. Visiting a bank for a business loan can be a formula for disappointment. But building small business credit, when done right, is a plan for success.
Personal credit scores are dependent on payments but also additional considerations like credit usage percentages.
But for small business credit, the scores truly just depend on whether a small business pays its debts timely.
Find out why so many companies are using our proven methods to improve their business credit scores, even during a recession.
Easily Improve Your Business Credit Scores in a Recession: Take Steps to Improve Your Payment History
How do you improve your payment history? It’s easy – just pay your bills on time, and as close to ‘in full’ as possible. Of course, that is not always as easy as it sounds. The truth is, just as you need to keep your personal spending within your means, you will need to keep your business spending realistic as well.
We cannot predict the future. Who can tell if your company’s particular widget will suddenly take off? All you can do is go by whatever data you can get, and interpret it in a manner that is not overly optimistic. For new companies, that means looking at industry trends. For more seasoned companies, it means closely examining your business’s performance under all sorts of conditions.
Therefore, if it looks like your company can make $1 million next quarter, but you need to borrow money, don’t borrow more than $1 million and, in fact, you probably want to borrow less than that.
Keeping your business spending in check and not gambling the company’s future on a hunch are both good ways to get your credit balances down and, as a result, improve your payment history. After all, your biggest supplier could go out of business, your best worker could retire, or crops could fail or any of a number of setbacks could occur. Being bold in business can often be a virtue – but you still need to pay your company’s bills.
It Pays – Big Time!
The single most vital step you can take to improve your business credit scores is to improve your payment history. Every credit reporting agency weighs this factor heavily.
Easily Improve Your Business Credit Scores in a Recession: Keep on Top of Your Credit Scores
This means regularly getting and reviewing your credit reports. And not just for your business! For new businesses and sole proprietorships, credit bureaus often look at your person credit as well. And this goes double if your business just so happens to be both. Therefore, you will need to keep on top of both sets of scores, which is a good financial habit to get into, anyway.
Why do this? Because credit scoring reports can have errors and you have the right to dispute them. But you will not know there’s an error unless you check.
Disputing credit report errors generally involves sending a paper letter with copies of all proofs of payment accompanying it, such as receipts and cancelled checks. Of course, you do not want to send the originals – always send copies and retain the originals. Precisely itemize any charges that you are calling into question. Use certified mail so that you will have proof that you sent in your dispute.
Of course, if there are no mistakes on your credit reports, then you will need to move onto the next step. Don’t try to pull a fast one and dispute your credit score if there is really nothing wrong with it! Credit reporting agencies understandably do not like that.
Find out why so many companies are using our proven methods to improve their business credit scores, even during a recession.
Easily Improve Your Business Credit Scores in a Recession: Keep a Handle on Your Credit Utilization Rate
This goes right along with improving your payment history. Your credit utilization rate is an easy calculation: it’s just your balances divided by your total available credit.
You want to keep this figure under 30% if that is at all possible. So if you borrow less money, and you pay your debts off as quickly as possible, you will keep your business’s credit utilization rate in check.
Credit reporting agencies look at this figure, so if you keep it low, that will help with your score.
Furthermore, credit utilization rate tends to go toward your ability to better balance your budget and work within your means. Of course there can be unexpected expenses. But those should be rare.
Find out why so many companies are using our proven methods to improve their business credit scores, even during a recession.
Easily Improve Your Business Credit Scores in a Recession: Monitor Your Business Credit
Know what is happening with your credit. Make sure it is being reported and attend to any inaccuracies ASAP. Get in the practice of taking a look at credit reports and digging into the particulars, and not just the scores.
We can help you monitor business credit at Experian and D&B for 90% less.
At Equifax, you can monitor your account at: www.equifax.com/business/business-credit-monitor-small-business.
Update Your Record
Update the relevant information if there are mistakes or the information is incomplete. At D&B, you can do this at: https://iupdate.dnb.com/iUpdate/viewiUpdateHome.htm. For Experian, go here: www.experian.com/small-business/business-credit-information.jsp. And for Equifax, go here: www.equifax.com/business/small-business.
Fix Your Business Credit
So, what’s all this monitoring for? It’s to contest any inaccuracies in your records. Errors in your credit report(s) can be fixed. But the CRAs typically want you to dispute in a particular way.
Get your company’s PAYDEX report at: www.dnb.com/about-us/our-data.html. Get your company’s Experian report at: www.businesscreditfacts.com/pdp.aspx?pg=SearchForm. And get your Equifax business credit report at: www.equifax.com/business/credit-information.
Disputes
Disputing credit report errors normally means you mail a paper letter with duplicates of any proofs of payment with it. These are documents like receipts and cancelled checks. Never mail the originals. Always send copies and keep the original copies.
Fixing credit report errors also means you specifically spell out any charges you challenge. Make your dispute letter as crystal clear as possible. Be specific about the concerns with your report. Use certified mail so that you will have proof that you sent in your dispute.
Dispute your or your small business’s Equifax report by following the instructions here: www.equifax.com/small-business-faqs/#Dispute-FAQs.
You can dispute inaccuracies on your or your small business’s Experian report by following the directions 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.
Easily Improve Your Business Credit Scores in a Recession: Personal Credit Score Reports
You can use AnnualCreditReport.com to get your credit report from Transunion, Equifax, and Experian.
Easily Improve Your Business Credit Scores in a Recession: Business Credit Score Reports
You will need to keep on top of three separate reports: Equifax, Experian, and your business’s PAYDEX report.
Equifax
Order your business’s Equifax report here. Dispute your or your company’s Equifax report by following the instructions here.
Experian
You can order your company’s Experian report here. You can dispute any errors on your or your company’s Experian report by following the directions here.
PAYDEX
Get your PAYDEX report here and you can contact their Customer Service department (it’s a part of Dun & Bradstreet, as they also generate PAYDEX reports) here. D & B’s PAYDEX Customer Service phone number is here.
Easily Improve Your Business Credit Scores in a Recession: Patience is a Virtue in the Credit World, Too!
Finally, you will need to be patient. In particular, because credit reporting bureaus look at payment history. And they also look at the length of your payment history. So this goes directly to how long your company has been in business.
As a result, one piece of the score improvement puzzle is to just let some time pass. Get some distance you from your opening day. Good business credit scores aren’t built in a day.
Easily Improve Your Business Credit Scores in a Recession: A Word about Business Credit Building
Always use credit responsibly! Never borrow more than what you can pay back. Monitor balances and deadlines for payments. Paying off in a timely manner and in full will do more to raise business credit scores than nearly anything else.
Establishing small business credit pays off. Great business credit scores help a small business get loans. Your lender knows the company can pay its financial obligations. They recognize the company is bona fide.
The business’s EIN attaches to high scores and lending institutions won’t feel the need to request a personal guarantee.
Easily Improve Your Business Credit Scores in a Recession: Takeaway
Business credit is an asset which can help your small business for many years to come. Learn more here and get started toward building company credit.
The post How to Easily Improve Your Business Credit Scores in a Recession appeared first on Credit Suite.
Brilliant! How to Start a Business with No Money and Bad Credit in a Recession
Is it really possible to start a business with no money and bad credit in a recession? Absolutely! Pandemic or no pandemic, this is possible.
Learn Start a Business with no Money and Bad Credit in a Recession
Do you know how to start a business with no money and bad credit in a recession? We can help you build business credit, even if your personal credit is not so hot.
This is through building business credit.
Building business credit means that your firm gets chances you never felt you would. You can get brand new equipment, bid on buildings, and cover the company payroll. And you can do this even when times are a bit lean. This is specifically helpful in holiday business enterprises, where you can go for several months with merely hardly any sales.
Because of this, you should really tackle developing your business credit. Enhance and maintain your scores and you will have these opportunities. Do not, and either you do not get these opportunities, or they will cost you a lot more. And no small business owner wants that.
You will need to understand what affects your company credit before you can make it better.
How to Start a Business with no Money and Bad Credit in a Recession: Credit History Length Matters
This is basically how long your business has been using company credit. Needless to say newer firms will have short credit histories. While there is not too much you can particularly do about that, do not stress.
Credit reporting agencies will also inspect your personal credit score and your own background of payments. If your own personal credit is excellent, and particularly if you have a reasonably lengthy credit history, then your personal credit can come to the rescue of your company. That is, you did not just get your first credit card not too long ago.
Naturally the reverse is also right. So if your personal credit history is poor, then it will impact your business credit scores until your company and consumer credit can be separated.
How to Start a Business with no Money and Bad Credit in a Recession: Your Payment History is Important
Tardy repayments will affect your company credit score for a good seven years. If you pay your small business (and personal) debts off, as quickly as possible and as completely as possible, then you can make a very real difference when it concerns your credit scores. Make sure to pay on schedule and you will experience the benefits of promptness.
How to Start a Business with no Money and Bad Credit in a Recession: Your Personal Credit Can Influence Your Business Credit
Are you having a bad business year? Then it could wind up on your personal credit score. And just in case your small business has not been around for too long, it will directly affect your business credit.
How do you fix this? By building business credit.
How to Start a Business with no Money and Bad Credit in a Recession: Build Business Credit
Business credit is credit in a small business’s name. It doesn’t connect to an owner’s personal credit, not even when the owner is a sole proprietor and the solitary employee of the small business. Truly, it is the best method of how to start a business with no money and bad credit in a recession.
As such, a business owner’s business and personal credit scores can be very different.
The Benefits
Due to the fact that small business credit is independent from individual, it helps to protect a business owner’s personal assets, in the event of court action or business bankruptcy.
Also, with two separate credit scores, a business owner can get two separate cards from the same vendor. This effectively doubles purchasing power.
Another advantage is that even start-ups can do this. Visiting a bank for a business loan can be a formula for frustration. But building small business credit, when done the right way, is a plan for success.
Individual credit scores are dependent on payments but also additional factors like credit use percentages.
But for company credit, the scores actually just hinge on if a small business pays its invoices timely.
Learn more here and get started toward building business credit attached to your company’s EIN and not your SSN. Get money even in a recession!
The Process
Growing company credit is a process, and it does not occur automatically. A company must actively work to develop company credit.
Nonetheless, it can be done readily and quickly, and it is much more efficient than developing individual credit scores.
Vendors are a big aspect of this process.
Doing the steps out of order will cause repetitive denials. No one can start at the top with business credit. For example, you can’t start with retail or cash credit from your bank. If you do, you’ll get a denial 100% of the time.
Business Fundability
A business has to be fundable to lending institutions and merchants.
That’s why, a company will need a professional-looking web site and email address. And it needs to have site hosting bought from a merchant such as GoDaddy.
Plus, company telephone and fax numbers must have a listing on ListYourself.net.
In addition, the business telephone number should be toll-free (800 exchange or similar).
A small business will also need a bank account dedicated purely to it, and it must have every one of the licenses essential for operating.
Licenses
These licenses all have to be in the identical, appropriate name of the small business. And they must have the same small business address and telephone numbers.
So bear in mind, that this means not just state licenses, but possibly also city licenses.
Dealing with the IRS
Visit the Internal Revenue Service web site and get an EIN for the small business. They’re totally free. Pick a business entity like corporation, LLC, etc.
A company can start off as a sole proprietor. But they will probably wish to switch to a sort of corporation or an LLC.
This is in order to diminish risk. And it will maximize tax benefits.
A business entity will matter when it comes to tax obligations and liability in the event of litigation. A sole proprietorship means the entrepreneur is it when it comes to liability and tax obligations. Nobody else is responsible.
Sole Proprietors Take Note
If you run a company as a sole proprietor, then at the very least be sure to file for a DBA. This is ‘doing business as’ status.
If you do not, then your personal name is the same as the business name. Consequently, you can find yourself being directly responsible for all small business financial obligations.
Also, per the IRS, using this structure there is a 1 in 7 chance of an IRS audit. There is a 1 in 50 possibility for corporations! Avoid confusion and noticeably lower the chances of an IRS audit at the same time.
Starting the Business Credit Reporting Process
Start at the D&B web site and get a free D-U-N-S number. A D-U-N-S number is how D&B gets a business into their system, to produce a PAYDEX score. If there is no D-U-N-S number, then there is no record and no PAYDEX score.
Once in D&B’s system, search Equifax and Experian’s sites for the company. You can do this at www.creditsuite.com/reports. If there is a record with them, check it for correctness and completeness. If there are no records with them, go to the next step in the process.
In this way, Experian and Equifax will have something to report on.
Vendor Credit
First you should build trade lines that report. This is also referred to as vendor credit. Then you’ll have an established credit profile, and you’ll get a business credit score.
And with an established business credit profile and score you can start to get retail and cash credit.
These kinds of accounts have the tendency to be for the things bought all the time. Like marketing materials, shipping boxes, outdoor work wear, ink and toner, and office furniture.
But first off, what is trade credit? These trade lines are credit issuers who will give you starter credit when you have none now. Terms are commonly Net 30, instead of revolving.
So, if you get approval for $1,000 in vendor credit and use all of it, you will need to pay that money back in a set term, such as within 30 days on a Net 30 account.
Details
Net 30 accounts need to be paid in full within 30 days. 60 accounts must be paid fully within 60 days. In contrast to with revolving accounts, you have a set time when you have to pay back what you borrowed or the credit you made use of.
To kick off your business credit profile properly, you ought to get approval for vendor accounts that report to the business credit reporting agencies. Once that’s done, you can then use the credit.
Then repay what you used, and the account is on report to Dun & Bradstreet, Experian, or Equifax.
Vendor Credit – It Helps
Not every vendor can help in the same way true starter credit can. These are vendors that will grant an approval with hardly any effort. You also need them to be reporting to one or more of the big three CRAs: Dun & Bradstreet, Equifax, and Experian.
This is vital for how to start a business with no money and bad credit in a recession.
You want 3 of these to move onto the next step, which is retail credit.
Learn more here and get started toward building business credit attached to your company’s EIN and not your SSN. Get money even in a recession!
Accounts That Don’t Report
Non-Reporting Trade Accounts can also be helpful. While you do want trade accounts to report to at the very least one of the CRAs, a trade account which does not report can nonetheless be of some worth.
You can always ask non-reporting accounts for trade references. Additionally credit accounts of any sort should help you to better even out business expenditures, thus making financial planning less complicated. These are companies like PayPal Credit, T-Mobile, and Best Buy.
Retail Credit
Once there are 3 or more vendor trade accounts reporting to at least one of the CRAs, then move to retail credit. These are companies which include Office Depot and Staples.
Just use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, use the company’s EIN on these credit applications.
Fleet Credit
Are there more accounts reporting? Then move onto fleet credit. These are businesses like BP and Conoco. Use this credit to purchase fuel, and to fix and take care of vehicles. Just use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, make certain to apply using the small business’s EIN.
Learn more here and get started toward building business credit attached to your company’s EIN and not your SSN. Get money even in a recession!
Cash Credit
Have you been sensibly handling the credit you’ve gotten up to this point? Then move onto more universal cash credit. These are businesses such as Visa and MasterCard. Just use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, use your EIN instead.
These are often MasterCard credit cards. If you have more trade accounts reporting, then these are doable.
Monitor Your Business Credit
Know what is happening with your credit. Make certain it if being reported and take care of any inaccuracies as soon as possible. Get in the habit of checking credit reports. Dig into the details, not just the scores.
We can help you monitor business credit at Experian and D&B for 90% less than it would cost you at the CRAs.
At Equifax, you can monitor your account at: www.equifax.com/business/business-credit-monitor-small-business.
Update Your Record
Update the details if there are mistakes or the information is incomplete. At D&B, you can do this at: https://iupdate.dnb.com/iUpdate/viewiUpdateHome.htm. For Experian, go here: www.experian.com/small-business/business-credit-information.jsp. And for Equifax, go here: www.equifax.com/business/small-business.
Fix Your Business Credit
So, what’s all this monitoring for? It’s to challenge any errors in your records. Mistakes in your credit report(s) can be fixed. But the CRAs often want you to dispute in a particular way.
Get your business’s PAYDEX report at: www.dnb.com/about-us/our-data.html. Get your company’s Experian report at: www.businesscreditfacts.com/pdp.aspx?pg=SearchForm. And get your Equifax business credit report at: www.equifax.com/business/credit-information.
Disputes
Disputing credit report errors commonly means you send a paper letter with duplicates of any proof of payment with it. These are documents like receipts and cancelled checks. Never mail the original copies. Always send copies and keep the original copies.
Fixing credit report inaccuracies also means you specifically itemize any charges you contest. Make your dispute letter as clear as possible. Be specific about the problems with your report. Use certified mail so that you will have proof that you mailed in your dispute.
Dispute your or your small business’s Equifax report by following the directions here: www.equifax.com/small-business-faqs/#Dispute-FAQs.
You can dispute inaccuracies on your or your business’s Experian report by following the directions here: www.experian.com/small-business/business-credit-information.jsp.
And D&B’s PAYDEX Customer Service telephone number is here: www.dandb.com/glossary/paydex.
A Word about Building Business Credit
Always use credit sensibly! Never borrow more than what you can pay back. Monitor balances and deadlines for payments. Paying in a timely manner and fully will do more to raise business credit scores than almost anything else.
Establishing small business credit pays off. Excellent business credit scores help a company get loans. Your lender knows the company can pay its financial obligations. They understand the business is for real.
The small business’s EIN connects to high scores and lenders won’t feel the need to ask for a personal guarantee.
Business credit is an asset which can help your small business for many years to come. Learn more here and get started toward growing company credit.
How to Start a Business with no Money and Bad Credit in a Recession: Looking for Some Ideas?
And we would be remiss if we didn’t give you any business ideas! Here are seven great ones from Shopify which we loved.
How to Start a Business with no Money and Bad Credit in a Recession: Takeaways
Once you understand what impacts your small business credit score, you are that much nearer to creating better business credit which will help you learn how to start a business with no money and bad credit in a recession. Don’t let COVID-19 get you down.
Now go get ‘em, tiger!
The post Brilliant! How to Start a Business with No Money and Bad Credit in a Recession appeared first on Credit Suite.