Building Business Credit
I thought I'd post 20 steps that are very helpful in building business credit. Of course, you may have a steady cash flow and not require a D& B number or an Experian or Equifax number. If so, diregard this thread.
The 20 steps:
1. State Records: Your entity must be open, active and in good standing.
2. Federal EIN: Your Employer Identification number filing must match your state filing exactly.
3. Bank Account: The day you open your "business" bank account is the day your business starts in the eyes of lenders.
4. Business Licenses: All applicable business licenses must be filed.
5. DBA: Any DBA's must be on all state/federal/banking records.
6. Separate business phone: Your business must have its own phone number.
7. 411 Directory: Business phone number must be listed with 411 under the exact legal name.
8. Experian: File must be open with a credit history and good score.
9. Dun & Bradstreet: File must be open with a credit history and good score.
10. Equifax: File must be open with a credit history and good score.
11. Business Credit Histories: No lates or derogatory on the business reports.
12. Physical Address: The business needs its own physical address.
13. Bank Rating: Your business bank rating should be a minimum of a low 5.
14. Tax Returns: All applicable business tax returns must have been filed.
15. Public Records: No liens, judgments pending against the business.
16. Credit Cards: At least 3 business credit cards with payments made early.
17. Vendor Credit: At least 5 vendor lines of credit with payments made early.
18. Comparable Credit: A larger loan from a non-bank lender with payments made early.
19. Bank Loan: Securing a small bank business loan with payments made early.
20. Business Model: A summary of your business plan with revenue projections.
These aren't the end all be all but they are a fantastic start. If you have the above, you probably already have an excellent business credit standing.
From what I read in this thread, folks are searching for ways to make their company viable in the eyes of their prospects. This is one method.
Like I said, if you already have a great cash flow and don't believe you need this advice don't read this post. I hope this info helps.
Tom
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