Small businesses are growing every day in the US. In fact, small business ownership is the dream of many people, quickly replacing the traditional 9-5 jobs of the past. Most new businesses start with the owner researching a business idea, developing new products and services, and learning how to market their business. Another important step in successful business ownership is establishing credit as a new business. If you’re starting, growing, expanding, or franchising a new business, consider these seven important steps toward establishing the business credit you need:
- Create a separate entity from your personal credit. Avoid comingling business and personal funds and consider incorporating your business as a limited liability corporation.
- Obtain an EIN (employer identification number) from the Internal Revenue Service. It’s fast and easy, to obtain an EIN once your new company is incorporated.
- Create a business credit profile with the three major credit bureaus – Experian, Equifax, and TransUnion.
- Create a Dun and Bradstreet (D&B) account. A D&B rating gives your new business credibility that makes applying for business credit easier without requiring personal guarantees.
- Open a business banking account wholly separate from your personal checking and savings accounts.
- Establish lines of credit with your top five vendors and suppliers that help establish your creditworthiness and can later become trade references for your business that boost your Paydex score.
- As much as possible, pay your bills in a timely fashion. This is the most significant part of establishing and maintaining a favorable business credit score.
Starting and running your new business with a solid credit history makes it easier for your company to qualify for low-interest small business loans and business credit cards. Establishing good credit is also a form of reputation management that matters more in today’s digital, consumer-review age than ever before. Call Grissom Law, LLC. Our attorneys have the skill and expertise to help you understand and establish credit potential for your business.
Disclaimer
This Blog/Web Site is made available for educational purposes only as well as to give you general information and a general understanding of the law, not to provide legal advice. By using this blog site you understand that there is no attorney client relationship between you and Grissom Law, LLC.