How to Get Credit After Incorporating a Business
Running a business requires money or capital. And if you don't have money in the bank, you'll likely rely on business loans and credit cards to keep your business afloat. While some business owners apply for credit in their personal name, others choose to establish business credit after incorporating. Thus, the business maintains its own identity; and if the business venture fails, your personal credit score isn't affected.
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Instructions
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Contact the IRS and request a business tax identification number. If you want to establish business credit after incorporating, you'll need to give your business it's own identity. Rather than file business taxes or apply for credit under your Social Security number, request a business tax identification number from the IRS.
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Open a business account. When a business is new and doesn't have a credit history, some lenders and credit card companies are hesitant to extend a line of credit--especially since a large percentage of new businesses fail within the first five years. Put their mind at ease by opening a business savings or checking account. You can open an account with $50 to $100.
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Apply for a secured or unsecured business credit card. After opening a business account, you may be able to get a credit card with the bank. Talk to a representative and see whether you qualify for an unsecured business credit card. Some banks are prepared to offer new businesses credit accounts. However, these credit cards typically feature low limits. If you need a higher limit, consider a secured business credit card. These require an upfront deposit.
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Get a small business loan. Applying for a small business loan is another way to establish business credit for a corporation. Qualifying for a business loan is challenging. And although your business is a separate entity, lenders may review your personal credit score before making a decision. Before applying for a business loan, obtain a business credit card and submit timely payments. This maneuver builds credit, and it'll help you qualify for future loans.
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