Tag: business credit

How to Get Business Credit

I learned a ton of great information from Tom Kish about how to get business credit during Week Two of the Credit and Debt Summit.
How to Get Business Credit
Tom Kish is the author of Shortcuts to Money, and he’s one of our experts at the Credit and Debt Summit. Basically, Tom teaches people how to get business credit, and then he teaches them how to use it to expand their businesses.
Here are three highlights:
The first secret about how to get business credit is this: Don’t apply in your own name. A lot of entrepreneurs walk into a bank and fill out a business loan application using their own name. Kish says the banks will basically laugh in your face if you do this.
Banks want to do business with LLCs, S-Corps, and C-Corps. Banks know that corporations might buy insurance products through the bank, they might build investment accounts or retirement accounts, or they might process their merchant services through the bank.
And being a sole proprietor—even one with a Fictitious Business Names or “DBA”—just doesn’t cut it, says Kish.
But if you register your business as a corporation or formal partnership, the banks will practically salivate at your door.
The second secret about how to get business credit is this: Keep your personal credit score high. A lot of lenders will look at the owner or principal’s credit score when considering a loan application.
This doesn’t mean that you should apply for business credit under your own name. Once again, you absolutely should not. It does, however, mean that your personal credit score might be considered as part of the overall process.
So if you have a bad credit score, be sure you know how to build credit. Namely, get your outstanding debt as low as you can, pay your bills on time, and scour your credit report for errors. (Be sure to come back later for some hot information from Brian Diez about errors on your credit report!)
And the third secret I’ll share is this: Apply for more than one loan. Let’s say you have a business registered as a corporation and you want a $150,000 line of credit. Instead of applying for one big loan, try breaking it into three or four loans that add up to $150,000.
You will have much more success if you start by looking for a bank that will provide you with $30,000 or $40,000 line of credit. Once you secure this loan, apply for another one. And then another.
Heck if you are just getting started, apply for a $5,000 line of credit. Get your foot in the door and get the ball rolling.
One thing you should know about how to get business credit is that getting the first loan is always the hardest step, especially if you don’t have any assets or much history. Look for a bank that provides “stated income” loans that are unsecured. This means that you won’t have to provide tax returns, collateral, or a business plan.

First Time Entrepreneur with No Credit wants Business Credit – Possible?

Credit Bad, No Credit Score, How to Build Credit – Question #1
Question Submitted by:  Benjamin, Aliso Viejo, CA
How can a first time entrepreneur, with virtually no credit score, who is starting his own business, apply for business credit – the correct way, and not have to use personal collateral to obtain the credit?
Answer by Philip Tirone:
In short, especially in today’s market, you will need to learn how to build credit personally, before anyone gives you business credit without personal collateral.  In short, they will consider your credit bad, and not lend to you.
This was possible before the mortgage meltdown, but now, it’s not possible and anyone that tells you it is, is just dreaming.
I’m a big believer in entrepreneurs!  The key is that you start establishing your credit immediately, and the good news, since you have no credit, you will have a 720+ credit score in a very short time as long as you take the right steps.   At that point, the lenders won’t consider your credit bad.
I recommend you attend our free 60-minute teleseminar, it’s jam packed with information, and at the end of the call you will be invited to enroll into our full program (that is why it’s free).  Even if you don’t enroll in our program, you will find this very valuable.
If you can’t attend, here is a link to our full program, however, since you are a start up – I will give you our $997 program for whatever you can afford.  I’m really committed to riding America of bad credit or no credit.  The only way I can do that is with people like you, if you help me spread the word.
If you want to enroll, email me at Philip (at) 720CreditScore (dot) com and I will get you enrolled immediately.