How to Build Business Credit With No Personal Guarantees

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Building business credit with no personal guarantees requires accruing a small amount of credit card debt, getting a small government loan and paying each off in a timely manner. Gain credibility with the bank as a new business with information from a financial manager and currency trader in this free video on finance.

Part of the Video Series: Credit Information & Tips
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Video Transcript

I'm Roger Groh. We're here today to talk about how to build your corporate credit history without any personal guarantees. Well think from the banker's point of view, if you have a startup company and you have no revenue, no history and you're an unknown, a banker is probably not going to feel very good about giving you money because they want to know how they're going to get paid back and they don't know. So in the past, they've demanded that you, a key person in that company could be an owner, could be an officer, but a key person in that company would have to guarantee the note so that is the company didn't pay it, you were obligated to. The question is, how can you do, how can you build credit history without in fact signing a note? Well think small in the beginning. You can usually get a credit card even a small one for 500 dollars or a thousand dollars in the corporate name. Try that first. Second thing is, get a government loan. Again, very small government loan and where the government will guarantee the payments on it, maybe an SBA loan as an example and make your payments on time and the goals in there are really not to use that money, but to make the payments on time so that you have a credit history with no personal guarantees that you can show to a banker when the time comes to really borrow money. When you need to expand, when you need a new office, when you need new employees, whatever it might be. That's how you build business credit history with no personal guarantees. I'm Roger Groh.

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