Business credit is linked to the
EIN of the company. The business credit score and its profile
are linked to the company name and EIN, and the company's
Business credit assists a company
qualify for credit cards, loans, credit lines, and auto vehicle
financing. Commercial loans are also available.
Business credit is also based on
the company’s ability to pay outstanding loans and lines of
Business credit is based on the
company, who is on the public record involving the company.
There are unexpected factors
involving business credit. The company is partly assessed on
the persons associated with the public record with the company.
There are other factors, such as rent district of where the
office is located, the demographic makeup of the address and per
capita income of that area. Some of these factors aren’t fair
to certain groups who seek a level playing field in obtaining
The address of the company plays a
role in profiling the business. Avoid UPS Stores, PO Boxes, and
mail drops. Those addresses are considered high risk.
A personal guarantee may be
avoided when there’s enough activity to support the loan, and
payment history. You should start building the business credit
early without a personal guarantee. If you’re seeking a large
loan amount, a personal guarantee may be required if the company
isn’t old enough.
Consider obtaining a business
credit card without a personal guarantee. Also obtain a
business credit card with a personal guarantee. Keep those
accounts separated by financial institution.
Business credit may take up to six
months to build. It may involve up to three (3) months to six
(6) months to build business credit.
The possible ceiling of available
business credit limit is many times higher than that of limits
on consumer credit.
When applying for business credit,
leave the Social Security Number blank. Make sure to write in
the Employer Identification Number (EIN) of the company where
If there’s a default in the
payment of business credit, it may count against you in future
applications when your SSN is tied to the debt. In other words,
if you agreed to serve as guarantor for the business loan, then
it will impact future applications for business credit. If you
didn’t guarantee the loan, it may or may not pose a future
impact on the future business credit. It depends on if the
creditor reports to business credit bureaus. There may be an
impact depending on how they characterized the default.
If the loan was
obtained using the EIN of the company, and without your SSN, then
it’s hit or miss whether there will be lasting impact on future
credit ratings involving any future business project. If you tied
your SSN to the debt, then there’s a guarantee of lasting impact on
the business credit and personal credit sides.
When you’re not the guarantor for
the business loan, the creditor may go after the assets of the
company, but not you. When you’re the guarantor for the
business loan, the limited liability protection of the company
won’t keep the creditor from making you personally responsible
for the unpaid debt.
To obtain business credit, a
financial organization will look at the business credit
profile. If the profile doesn’t look complete, they may extend
a small amount of credit. If so, build that by paying your
Make certain that the name on the
business credit applications is exactly as it appears on the
articles of incorporation, Secretary of State registries,
business licenses and online. Since many companies have similar
names, any typo may cancel out an application for business
Business credit results are best
when operating from a corporation or LLC. Don’t do business
from a sole proprietorship.
Sole proprietorships and
partnerships present the risk of full liability. The
corporation and the Limited Liability Company (LLC) limits your
liability. Business credit will always favor the corporation
and LLC because they’re more organized.
US Citizens and US Permanent
Residents have SSNs. Companies have EINs. Without the EIN, you
can’t open a bank account or apply for business credit.
To build business credit, don’t
use a PO Box or UPS Store address. Home addresses are in the
grey area. For best results, obtain a brick and mortar
Obtain a business phone number and
register with 411 information services. Also obtain a toll-free
number and fax number.
The company website should display
what it does or offer, the company address, phone number(s), fax
number, email and mention the principal’s names. The company
email should contain the domain name and not a free email
The company needs a bank account
in the company name. When a lender offers a line of credit, it
will also invite your business to open a new account where the
funding is available. The number of digits in the account
balance may also be important. Consider depositing at least
$1000 in the business bank account.
Compliance is critical. The
company must be filed with the Secretary of State, business
licenses, permits and any other compliance requirement. Also
obtain a utility bill in the name of the company, such as an
electric bill, water bill, or a lease.
Vendor accounts or vendor line of
credit is a credit lend to the company initially for building up
the company’s business credit under net 15, net 30, net 60 or
net 90 days to pay. Which means whatever purchases has been made
the loan amount must be returned within these days or agreed in
the contract. This said terms are for mainly startup business
Build out at least five (5) net 30
pay accounts reporting to your company. Some of the vendors may
require prepaid order for considering your business terms. Some
vendor companies don’t report back to business credit bureaus
for the business. Find out if your vendor reports the account.
Companies such as Apple, Lowe’s,
Walmart, BP, Shell, Macy’s, Nordstroms extend business credit.
Once the five vendor trade lines
are approved, the company needs to enroll for revolving
accounts. High priority accounts involve Walmart, Amazon, and
Apple. This readies you for Visa, Mastercard and American
Your goal is for the documentation
to support the company’s operations.
Every business must be legitimate
in every sense and documentation for getting easy approvals for
loans from big companies or banks. The more business with
various clients and always good in payments the more the company
gets approval for business loans and higher goes its business
Business and shipping supplies?
Uline.com and Quill.com both report to business credit bureaus.
Provide them with your company’s EIN and they’ll check with 411
What factors are considered when
evaluating the business credibility of your business?
Years of operation.
YELP.COM, CITYSEARCH.COM, ZAGAT.COM
Registration with 411
Number of years domain
Search engine ranking
Media on website
Social media presence
Number of reviews
Number of ratings
Number of likes
Credit cards accepted
Policies posted on the
Principals listed on
the website. Do those principals match the public
record with the Secretary of State, business
licenses, and other public data? Consistency is
McAfee seal? Verisign
seal? TrustE seal?
Number of locations
Press releases, Ads
Good standing with the
Secretary of State
State where the company
UCC filings as creditor or
Per capita income of the
area of where the business is located.
Complaints or lack