There are several specific steps to building your “business” credit so that you can become creditworthy enough to apply to lending and financial institutions. You points you need to understand are:
the differences between personal credit and business credit;
the importance of choosing a business name and registering it with the State;
the best legal entity structure for your business needs;
the importance of your physical address where your place of business resides;
how to apply to multiple businesses for credit lines without hurting your FICO scores;
how avoid the many pitfalls that can occur when “personal guarantees” are used; and
how to establish your business credit profile properly so creditors come seeking “your” business
Maybe you have a great new business idea or you already have a home based business that you want to take to the next level, but you don’t have ready access to extra funds. Or perhaps your personal credit is so poor that financial institutions won’t lend to you. Your goals should include:
building your business creditworthiness;
applying for small business credit cards;
applying for unsecured business loans without personal guarantees;
obtaining unsecured lines of credit; and
getting the working capital that you need
But you are saying to yourself “that’s easier said than done”. Well, what matters is that you understand what it means to be business creditworthy then personal guarantees will generally no longer be needed. It’s also very important that your personal credit reports reflect a “positive” picture of you because in the beginning, you will need to use personal guarantees.
One very important point is that entrepreneurs and new business owners must keep their personal expenses separate from their business. The only way to achieve this is to establish a business credit profile so that when you apply for corporate credit cards, or commercial credit, or any type of business credit you don’t use your social security number, but rather your tax ID number.
Let CL King and Associates experts help you take action in the right direction. If you are currently ruining your personal credit by overextending it with business expenses, then stop it. Consult with the experts at CL King and Associates to finance your business needs.
If you want to learn more, please visit here: http://www.clking.com/