How to Kick Start Your Business Credit
A lot of people think that the best way of getting out of the rat race that is called employment, it is to start their own business. To start a business, you would need capital. However, lending institutions only approve a loan if you already have an existing business credit. But how can you get a business without a business credit? It seems to be another rat race isn’t it?
The purpose of this article is not to help you find ways and means to acquire initial capital. You have to be creative and open minded to find out for yourself. However, you should read on because we will be helping you in kick starting your business credit profile so that by the time you would need additional credit to either expand your business or improve it, you will have no problem going to any lending institution because you will be confident enough that your business credit will speak for itself and get approval from any bank or creditor. So let’s get started.
Grow and use your existing credit. Once you have already started business operations, if banks decline requests for loans or even business credit cards, open a secured credit card account. Then start using it and start making on time payments as well. If there is already payment history on that account, request for a credit limit increase on that account even if there is no need for one yet. While this is ongoing, check if you already have a business profile in big credit bureaus or business credit reporting agencies such as D & B or Experian. If there is none yet for your company, then create one right away. Submit information to these agencies about your payment histories and you cans tart building your business credit profile from there.
Start building credit as soon as you start your business. Be proactive. You can apply for credit as soon as your business has started its operations. Lending institutions usually “wait” for s small business to tenure for two years before they are ok with offering a credit line. You can choose not to wait that long. You can try to get approved of a bank loan with an amount that is not too big (probably just the minimum amount you can get approval of or even lesser than that) or you can get credit card solely for business purposes. If the banks get too stingy and even deny you a business credit card, opt for opening a secured credit card with just a small credit limit. The point is, do these things while you are still not in need of a credit yet because your purpose is to build your business credit. Another option is to try and approach big time retail companies where you buy equipment and whatnot and inquire if they offer commercial credit accounts for small businesses. This can also help build your company’s credit history.
These methods will surely help you build a strong business credit profile and once this has kick started, there is not stopping you from expanding your business and make your dreams come true.