How to Build Corporate Credit in 30 Days

Credit can ease the cost of operating your business.

Frequently, a business owner must have at least two years of business credit to qualify for a new line of credit. This is to minimize the lender's risk. If you do not have at least two years of business experience, often, you can give a personal guarantee to improve your chances of approval. A personal guarantee makes you liable for any outstanding debts your business owes. When building business credit in 30 days, you must obtain a good mix of credit accounts and use them effectively so your business credit file is favorable at the end of your first billing cycle.

Instructions

1. Compare corporate credit products. Inquire about pre-approval for revolving lines of credit and business loans. Sign up for a purchases, travel or fleet account, depending on your needs. Some creditors provide a decision in as little as 60 seconds; however, if additional information is required, expect to receive written notification of approval within seven to 10 business days.

2. Apply for a corporate credit account. Enter your registered business name, Employer Identification Number (EIN), business license number and business address, along with profit and loss information from the previous quarter. Additional profit information may be necessary, such as profit and loss statements for the previous five years.

3. Apply for a commercial supplier credit account. Many commercial suppliers offer revolving charge cards and credit accounts. Complete a commercial credit application with your business' dedicated telephone number and business address, parent company contact information (if applicable), billing information and bank information. Additional requirements may also apply, depending on the supplier.

4. Enlist management and trusted employees to purchase equipment, furniture and machinery using credit accounts. Create a good mix of spending across all credit accounts, so you don't overuse one card, which can hurt your business credit score. Also, do not spend in excess of 30 percent of any one maximum credit limit.

5. Pay down your credit balance at least seven business days before your minimum balance is due to avoid a missed payment. You want to end your first billing period with a healthy payment to quickly bolster your credit history.

Tips & Warnings

• Keep up-to-date billing records and monitor credit accounts frequently to remain in control of corporate spending patterns.

References

• Capital One: Venture for Business
• American Express: Simply Cash
• Nevada Corporate Planners: Corporate Credit
• Business Credit Entrepreneur: Insiders 20 Item Checklist for Business Lines of Credit - Avoid Getting Denied
• U.S. Federal Reserve: A Guide to Business Credit