At SimplyQuick Business Loans, your credit history is secondary when it comes to offering you a business loan. But you probably still want to build and improve your business credit score. Take a look at some of the things you should be doing as a small business owner to establish a good credit score for your business.
Separate Yourself from Your Business
Even if you are your only employee right now, if you’re serious about your business credit score, you need to make your business a separate legal entity from yourself as a person. You can do this by incorporating your business or forming a limited liability company (an LLC). Obtain a federal Employer Identification Number, and open bank accounts under the name of your business. Finally, acquire a phone line and number for your business and get it listed in directories.
Use Small Business Loans to Build Credit
Using small, short-term loans to finance business operations when needed, such as to expand your premises or acquire new equipment or inventory is a great way to build up credit for the future. Showing lenders and credit bureaus that you can make payments on time is just as important for a business as it is for an individual, so it’s important to create a credit history with business loans.
Open a Business Credit Card
When you can, open a credit card account for your business. Just like with small business loans, a regular payments on a credit card from your business account will build a strong credit history.
Once you have the necessary tools for your business to be a legally and financially distinct entity, be scrupulous in how you pay for business expenses. Don’t mix personal and business funds at all. Some people don’t consider using personal funds to finance their business as big a problem as using business funds for personal spending, but it can make accounting and taxes just as difficult, and it doesn’t help you build any business credit.
Pay Early when Possible
On time payments of any business debts are good, but early ones are even better. Some credit bureaus only give perfect scores to early payments.
Work with Your Suppliers
When you buy with credit from your suppliers, they aren’t necessarily reporting your on-time or early payments to the credit bureaus, as they aren’t legally obligated to do so. As you build up good working relationships with these companies, ask them to start reporting your positive payment history to give your business credit score a boost.
Your business credit score can be important for your business both now and in the future, and not just for securing loans. If your credit isn’t perfect, that’s ok; you can still get the loans you need from SimplyQuick Business Loans, where 80% of applicants are approved, even without a strong credit history. Get the money you need and start getting your credit score back on track today.