Many small business owners fail to establish credit for their business.
They use their personal credit to finance the business when they need loans.
That is a bad habit. It not only lowers your personal credit score but can also make it more challenging to get business credit when you need it.
It is also linked to other bad financial habits.
Small business owners who treat their personal credit like their business credit are also likely to treat small business profits as their income.
This mixing of profits and salary can make assessing how the business is doing very difficult.
Part of separating business finances from personal finances is establishing business credit.
Here are 10 Great Reasons to Get Started Establishing Your Business Credit Today
1. You can protect your assets. Once you establish your business credit, you can get financing with your EIN and not use your personal credit or personally guarantee the loan. If the business fails, it does not have to mean disaster for you.
2. Establishing business credit is a much faster process than building good personal credit.
3. Your business could use the money. Consider taking out a small business loan or other financing to invest in expansion. The United States is experiencing significant post-pandemic growth, making now the time to re-invest in your business.
4. Get money even if the bank has turned you down. Business credit lines and business loans have very different requirements. You may qualify for the credit even if a bank has turned you down for a loan.
5. Get credit lines for different purposes. Lenders offer credit lines for various parts of your business, including trade credit, fleet credit, cash credit, store credit cards, and auto vehicle financing.
6. You can get business credit as a startup. To qualify for a bank loan, you usually need to have an established history of being in business. However, you can get business credit as a startup.
7. Qualify for better terms as you build your business credit. A history of on-time payment is all you need to create a strong credit history for your company.
8. Access specialized lending programs. There are hundreds of loan programs that are designed specifically for businesses.
9. Get a funding team. A dedicated funding team helps you get the types of credit that are right for your business. It also helps you avoid credit you do not need.
10. Get funding qualification coaching. Need to get a bank loan for future business? Our coaching program is designed to help you. Using our guidelines, you can increase your chances of securing bank funding.