#Hidden business credit lines how to#

This allows a credit grantor to assess your company’s creditworthiness rather than always relying on personal credit alone.Ĥ) Limit liability – Establishing credit in the company’s name and using business credit cards that report only to business credit agencies reduces your legal liability. With business credit cards that report solely to business credit agencies ( Business Credit Card Funding Program), the personal credit report of the owner remains unaffected by the company’s credit accounts and revolving debts.ģ) Increase your chances of getting approved – As you start building business credit quickly, your company establishes its own report and score. This is a crucial step necessary to ensure the protection of the corporate veil remains intact.Ģ) Protect your personal credit – Business credit accounts that appear on the personal credit reports of the owner can impose serious strains on personal credit scores and credit utilization. Here are several of the key benefits when building business credit:ġ) Separate personal and business finances – As a corporation or limited liability company, you must keep business finances separate from personal because the business is considered a separate legal entity. It also plays a role when potential investors are researching your company and determining whether or not to invest in your company. Your business credit impacts many areas of a company’s life-cycle when it comes to its finances such as getting a business loan, business line of credit, company credit card, financing terms from suppliers, leasing office space, etc. Your personal credit impacts many areas of your personal life such as buying a car, what you’ll pay in insurance premiums, purchasing a home, renting an apartment, getting a credit card, etc. In fact, business credit is just as important as personal credit. This provides the credit grantor with the data it needs to verify your company’s existence and obtain a copy of its business credit report. When you fill out a business credit application, there will be a request for your EIN number. Think of your company’s EIN as the social security number for the business. Your EIN is also used to create a business credit file for the business with business credit reporting agencies such as Dun & Bradstreet, Equifax Small Business & Experian Commercial. Your company’s Employer Identification Number (EIN) is used to identify your business entity to the IRS, banks, lenders, suppliers, vendors and other businesses. It’s important to realize when you structure your business as a corporation or limited liability company it becomes recognized as a separate legal entity with the ability to enter into contracts. that will require additional working capital. In business, there will always be unforeseen expenses, opportunities to expand into new markets, research & development, etc.

#Hidden business credit lines how to#

Whether you are a startup or existing business you can start establishing business credit quickly by following the strategies we cover in today’s post.īe sure to also check out our recent post on How to Build Business Credit in 30 Days for additional strategies.įrom the early startup stage all the way to the growth stages, access to business credit and funding is crucial if you want to achieve success in business. How do you start building business credit fast? There are several new business credit building strategies that will help you build your business credit reports in record time.