Building business credit is a process. Entrepreneurs and small business owners need to understand the importance of having a solid business credit file. A strong business credit profile can get your business approved for unsecured lines of credit which can be used to for business operation like meeting payroll, to purchase equipment and for expansion. But before you can apply for business lines of credit you must have a solid foundation to start with.
1. Doing business with the right vendors. Make sure that your trade payments from vendors are being reported to the business credit bureaus. Dun and Bradstreet, Experian Business and Equifax Business. Making on time payment recurring payments will give your company a solid business credit rating. 80 paydex
2. Business bank account. You must have a business bank account. A Savings and checking account are a essential to building a solid business credit foundation. Banks want to see consistent activities flowing from your bank accounts. This kind of activity shows that the business is active and making money.
3. Public filings and up to dated business financial statements are very important. These documents help to get a clear rating with Dun and Bradstreet which increases your chances of getting approved for business lines of credit. I cannot over emphasize this enough. This is a critical step in the process of building business credit. The very few who understand this step are successful.
4. Filing your back taxes. Back tax filing shows age and credit bureaus are able very your business a 3rd party source. This process helps to legitimize your business standing. Many Sole Proprietors who have been in business for years never file taxes. You can always go back and file those taxes which also help with building business credit.
Completing these steps will help set the right foundation for your business success. In order for you to have any success with building business credit these steps must be completed first before you business can qualify for unsecured lines of credit. The steps are simple but the process requires patients and persistence.
Sincerly,
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