Is it Magic? No, it’s Turo!
One of the inevitable side effects of having a fleet of vehicles is they do nothing for you if they’re idle. In fact, you lose money on them, as you need to pay for parking. Plus, of course, they’re depreciating every single day. Turo is a company that can help you turn idle vehicles into cash cows – no magic wand necessary.
But first, you need to get the vehicles – and here’s how you do ALL that.
Building Your Commercial Fleet While You Build Your Business and Its Credit
Your business doesn’t start off with good business credit already built. In much the same way, you probably didn’t start with any vehicles. Or, at least, not with business vehicles you wanted to keep. And even if you bought your business fully created, you can still build it to greater heights. For all three goals, it pays to work in an orderly fashion. Step by step, it all works together.
Building business credit means getting vendor accounts. Starting with vendor credit accounts is a proven way to start building business credit. But we don’t include vendors just because they report to the business CRAs. We include them because they have quality products you can use, and great customer service. They are more than a means to an end!
Building Business Credit the Right Way
Let’s start with building business credit. You can’t start with high limits. First build starter trade lines that report (vendor credit). Then you’ll have an established credit profile. Then you’ll get a business credit score. With an established business credit profile and score you can start getting high credit limits.
Use your credit. Pay on time, like you should with personal credit. These vendors we’ll show you will report to the business CRAs. And you’ll build a good business credit score.
But Wait: What is Starter Vendor Credit?
These trade lines are creditors who will give you initial credit when you have none now. These vendors often offer terms such as Net 30, instead of revolving. So if you get an approval for $1,000 in vendor credit and use it all, you must pay the money back in a set term. Such as, within 30 days on a Net 30 account. But there are some revolving accounts still considered to be starter vendors.
Vendor Credit Accounts
You must pay net 30 accounts in full within 30 days. And you must pay net 60 accounts in full 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.
To start your business credit profile the RIGHT way, you need approval for vendor accounts that report to the business CRAs. Once that’s done, you can then use the credit, pay back what you used. Then the account is on report to Dun & Bradstreet, Experian, or Equifax, or some combination.
Once it reports, then you have trade lines, an established credit profile, and an established credit score. With an established business credit profile and score, you can then get approval for more credit under your EIN. For vendor credit, you can usually leave your SSN off the application. Because this credit isn’t offered through a bank. Then the credit issuer pulls your EIN credit, sees a solid profile and score, and as a result can approve you for more credit. Keep in mind, credit through a bank will demand your SSN. It’s an anti-money laundering requirement under federal law.
Vendor Credit Cards
Vendor credit cards will kick off business credit building for your business. Once you’ve added payment experiences from three vendors, and they have sent reports to business CRAs like Dun & Bradstreet, you can start qualifying for fleet credit. Make sure business credit cards don’t report on your personal credit.
Every step and every credit provider is designed to help your business. It’s meant to help you qualify for business credit cards you will actually use. This isn’t building for the sake of building, and it isn’t just to increase a number. These credit providers are going to have what your business needs to succeed.
Business Credit
Keep in mind, business credit is independent of personal. Applying for it often won’t harm your personal credit scores, although it can if you offer a PG and then fail to pay. An inquiry will also impact personal credit. Too many inquires can hurt your ability to get an approval. Building this asset can only help your business. You can help your future business right now.
Vendor Credit Benefits
You need 3 or more vendor accounts reporting to move onto more credit with higher limits and better terms. More reporting accounts are even better. It will take 30-90 days for those accounts to report – 60 days on average. Do NOT apply for tier 2 credit without having 3 or more accounts first.
Getting a Vendor to Pull Credit Under your EIN
There is no Social Security requirement for starter vendor credit. This is unlike bank loans and bank cards. So leave the field blank. Don’t fill in any other number. It’s a violation of two Federal laws.
A blank field will force them to pull your business credit under your EIN. But note: some creditors will still want an SSN for verification purposes. You should present your SSN in this situation. But make sure you aren’t agreeing a PG or personal credit check.
Demolish your funding problems with 27 killer ways to get cash for your business.
Building Business Credit – What You Really Need to Know
You won’t get a Visa or a MasterCard (bank credit cards) right away. You need to have credit to get more credit. Start building trade lines to get the big payoff. Getting initial credit is the hardest part. The vast majority of trade vendors who issue credit don’t report it to the business CRAs. So, you MUST find sources which actually report.
Using Business Credit Vendors
Check out three of our favorite starter vendors:
All three come from Wex.
Wex Fleet
They report to Experian and D&B. They offer universal fleet cards, heavy truck cards, and universally accepted business fleet cards. Their cards have features supporting a small business. This includes a rewards program. Before applying for several accounts with WEX Fleet cards, leave enough time between applying so they don’t red flag your account for fraud.
If you don’t get an approval based on business credit history, or been in business for at least a year, then a $500 deposit is necessary or a PG. Apply online or over the phone. Terms: Net 15 (Wex Fleet Card), Net 22, or revolving (Wex FlexCard).
To qualify, you need:
- Entity in good standing with Secretary of State
- EIN number with IRS
- Business address- matching everywhere.
- D-U-N-S number
- Business license (if applicable)
- And a business bank account
- Business phone number with a listing on 411
Marathon
Marathon Petroleum Company provides transportation fuels, asphalt, and specialty products throughout the US. Their product line supports commercial, industrial, and retail operations. This card reports to Dun & Bradstreet and Experian. Remember: before applying for several accounts with WEX Fleet cards, leave enough time between applying so they don’t red-flag your account for fraud.
To qualify, you need:
- Entity in good standing with Secretary of State
- EIN number with IRS
- Business address- matching everywhere.
- D-U-N-S number
- Business license (if applicable)
- And a business bank account
- Business phone number with a listing on 411
Your SSN is necessary for informational purposes. If concerned they will pull your personal credit talk to their credit department before applying. You can provide a $500 deposit instead of using a PG if you’ve been in business less than a year. Apply online or over the phone. Terms are Net 15.
76
Phillips 66 Company owns 76. It has more than 1,800 retail fuel sites in the United States. This card reports to: D&B and Experian. Keep in mind: before applying for several accounts with WEX Fleet cards. make sure to leave enough time between applying so they don’t red flag your account for fraud.
To qualify, you need the following:
- Corporate entity must be in good standing with the applicable Secretary of State
- An EIN
- Company address matching everywhere
- D-U-N-S number from Dun & Bradstreet
- Your business license (if applicable)
- A business bank account
- Business phone number with a listing on 411
Your SSN is necessary for informational purposes. If concerned they will pull your personal credit talk to their credit department before applying. You can give a $500 deposit instead of using a personal guarantee. if you’ve been in business less than a year. Apply online or over the phone. Terms are Net 15. You can used this card at any P66, 76, or Conoco fueling location. Let’s move onto fleet credit.
Demolish your funding problems with 27 killer ways to get cash for your business.
Fleet Credit
Fleet credit comes after starter vendors. It comes from places like Gulf and Exxon. You use it to:
- Buy fuel
- Maintain vehicles of all sorts
- Repair vehicles
Even businesses which don’t have big fleets can still benefit. These are usually gas credit cards.
You may need to have a minimal time in business. If your business doesn’t have enough time in business, you may be able to instead offer a personal guarantee or give a deposit to secure the credit. Now that you’ve got a bunch of cards to support your fleet, it’s time to look at vehicle financing to buy the fleet!
Vehicle Financing
Chances are you didn’t buy personal vehicles outright. In the same way, financing is a great way to get a vehicle now, without having to wait until you can pay cash and drive it off the lot. With a fleet car, your choices are usually buying or leasing. Providers include banks like Bank of America or the financing arm of the manufacturer, like Chrysler Capital.
Using Business Credit for Vehicle Financing
You can even finance a vehicle purchase or lease through our Business Credit Builder. These offers are in Tier 4. So they have certain requirements that business credit neophytes won’t be able to meet. Lenders will want to see you have the income to support the purchase. Consider Ford Commercial Vehicle Financing.
Ford Commercial Vehicle Financing Through Credit Suite
Ford offers several commercial vehicle financing options. These include loans, lines, and leases to actual business entities. This is not for sole proprietorships. You can get a loan or a lease.
Ford may ask for a personal guarantee if you do not get an approval on the merit of your application. Apply at the dealership. Ford will report to D&B, Experian, and Equifax.
To qualify, you need:
- Entity in good standing with Secretary of State
- EIN number with IRS
- Business address- matching everywhere
- D-U-N-S number
- Business license (if applicable)
- And a business bank account
- Strong business credit history
- Must have a good Experian business credit score
Ally Car Financing Through Credit Suite
Ally provides personal financing. But they will also report to business credit bureaus. If your business qualifies for financing without the owner’s guarantee, you can get financing in the business name only. Ally will report to D&B, Experian, and Equifax.
Ally Car Financing: Ally Commercial Line of Credit
To qualify, you need:
- Entity in good standing with Secretary of State
- EIN number with IRS
- Business address- matching everywhere
- D-U-N-S number
- Business license (if applicable)
- And a business bank account
- Bank reference
- Fleet financing references
If you use a PG, Ally will not report to the personal credit bureaus unless the account defaults.
Ally Car Financing: Ally Commercial Vehicle Financing
Get a lease or a loan. To qualify, you need the same things as you need for an Ally Commercial Line of Credit. This is except for a bank reference and fleet financing references. There is no time in business requirement. Apply in person only. The dealer will say if you get approval or must provide a PG. Now that you’ve got the cars and the cards, let’s explore Turo.
Demolish your funding problems with 27 killer ways to get cash for your business.
What’s Turo, Anyway?
Turo is a peer-to-peer car sharing marketplace. You can book any car you want, wherever you want it, from a community of trusted hosts across the US, Canada, and the UK. Guests choose from a unique selection of nearby cars. Hosts earn extra cash to offset the costs of car ownership.
How Do Turo, Business Credit, and Business Ownership Work Together?
There are going to be times when some of the vehicles your fleet aren’t in use. This could happen if there’s a personnel change, or if an employee with an older vehicle gets an upgrade to a newer one. This could be a perk accompanying a promotion. Or an employee with a vehicle could be out for parental leave. But no matter how or why any vehicles are idle. you can be making money from them.
Turning the Idle Vehicles in Your Fleet into Moneymakers
Turo says you can make an average of $620 per month per vehicle. This comes from 2019 stats for hosts with twelve or more trips and “at least average quality metrics”. You can set your own price and availability dates. Make 70% of the price, or 80% if you can prove you have your own insurance and waive Turo’s coverage. Turo offers an array of coverage options with different percentages and deductibles. So you can choose what appeals most to you. Liability insurance comes from a policy issued to Turo by Liberty Surplus Insurance Corporation. They’re a member of the Liberty Mutual Group.
Bringing Out the Best in Your Vehicles to Make the Most Money
There are ways to make more money and get your vehicle out there to more riders, more often. Turo offers tips on taking better photographs of your car and listing your car’s options. as riders may be searching for things like all-wheel drive or air conditioning, etc.
Working with Turo
Turo will provide guidance on how to write better descriptions, and otherwise make a vehicle more appealing to riders. There is even a section on writing a business plan. Also – earnings go through Turo so you will get a 1099. And even making a few hundred per month per vehicle is a VAST improvement over letting a vehicle idle while you pay for parking and it depreciates! To end, let’s touch on personal guarantees for financing.
Vehicle Financing
With commercial vehicle financing, business owners may need to personally guarantee vehicle loans. If you are a co-borrower the loan will most likely report to your personal credit report. Starting off by giving a personal guarantee means you can get money, and start building your commercial fleet now instead of later.
PG (Personal Guarantee) Financing
According to Investopedia, a personal guarantee is:
“an individual’s legal promise to repay credit issued to a business for which they serve as an executive or partner. Providing a personal guarantee means that if the business becomes unable to repay the debt, the individual assumes personal responsibility for the balance. Personal guarantees provide an extra level of protection to credit issuers who want to make sure they will be repaid.”
When you provide a PG, you are adding your Social Security number to the application. You should expect a hard inquiry. You’re also adding the details of your personal income to the application.
No PG Financing
With no PG financing, you can get higher limits and better terms. Continue to build exceptional business credit and pay your bills on time. In general, the following you won’t need to provide a personal guarantee for this type of financing if you have:
- good business credit
- a decent amount of time in business or
- good personal credit
Much like with any other kind of business borrowing, the more assurances you can give the lender, the better.
Turo, Business Credit, and Growing Your Business: Takeaways
Use business credit to buy everything you need to run a fleet, from fuel to service. And use auto financing to buy the vehicles. Plus, you can make money with the idle vehicles in your fleet! Turn your fleet into a regular, reliable moneymaker – without having to pull any rabbits out of your hat. Let’s get together and talk about getting started.
The post Presto! Turn Your Commercial Fleet into a Turo Fleet appeared first on Credit Suite.
