How to Leverage Business Credit
As a business owner, you are probably aware of how important it is for you to be able to leverage business credit. If you are unable to fund your business on your own or through an investor, at some point you will likely need some business credit. Without first establishing your business, lenders won't be eager to leverage business credit. Building your business' credibility and credit score are the first steps to leveraging business credit.
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Instructions
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Incorporate your business, if you haven't already done so. Then obtain a federal tax identification number as well as the necessary permits and licenses, such as sales tax permits. Establish a business phone number and address.
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Register your business with the main business credit bureaus: Dun & Bradstreet, Experian Business and Equifax Business. Apply for a D-U-N-S number with Dun & Bradstreet.
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Visit your bank and open business accounts. Establish a relationship with your banker, since you may later leverage business credit with them. Ask them what the requirements are for opening a business credit card or line of credit. Most banks require that your business has been operating for two years, however smaller banks may be more lenient. You might consider switching banks.
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Leverage credit with your suppliers. Contact each of them and ask them if you can open a small line of credit. Make sure that they report your information to the business bureaus. This will help you build your business credit. If they don't, ask them to.
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Contact companies such as Office Depot, Target or Staples. These stores are known for leveraging small credit lines to new businesses.
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Consider opening a secured business line of credit with Wells Fargo, if your business is less than 2 years old. Keep in mind that secured loans use your assets as collateral. If you default on the loan, you may lose your assets.
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Tips & Warnings
Monitor your business credit score regularly for any errors. Pay all balances off well before the due date to keep your business credit score in good standing.
