How to build business credit with buiness credit cardsWant to learn how to get small business credit cards like American express, bank of America, and capital one spark card to help you build business credit.
Many small business owners and entrepreneurs start using their personal credit card and retirement accounts to get the business up and running, then they run out of money. They’re not aware of how to get access to their business credit report or business credit score or even how to build business credit until it’s to late.
A lot of time they start their businesses in debt, because they never discovered how to build business credit and how to use it as leverage in their businesses. Their always taught go open a business bank account and take out a few small business loans, and this is why they get themselves and their business in financial trouble.
Let's understand that applying for a small business loan itself takes time and a load of paperwork, as well as being established as a business for at least 2 years. Then you must produce taxes and 3 to 6 months of bank statements. Now for a small business owner that has a cash based business, or a small business that don’t keep good financial records, or even a new business you automatically get denied.
That's why I encourage small business owners and entrepreneurs to start build their business credit, by following the basic steps and stay away from business loans.
First, you set up a C-corporation, because you want the business to have a life of it's own and it will eliminate always having to personal guarantee business credit cards and business lines of credit that you may need as the business grows.
Next, you open a business checking account and start making small bank deposits in it, so that the banks see that you have activity in the account. This is how you build your business bank rating which is the life line of your business.
Then, you'll apply for some business credit cards and business line of credit with your personal credit, but if your personal credit is not good, you may want to consider bringing in a partner that has at least a 680-credit score to apply for those business cards and business lines of credit for the business. Also make sure the business credit cards you apply for has rewards on purchases and that offer discounts on car rental. and hotels.
Now, if you’re an existing business website owner that have accounts receivables, you can get financing thru merchant cash advance. Interest rates on merchant cash may be higher then business loans lines of credit, but you can get approved in less than 48 hours.
So, now you know that it is possible to get working capital for your business without applying for a small business loan or buying net 30 accounts to build a Dun and Bradstreet paydex score. You can start building your business credit the proper way.
If you want to learn more strategies to business credit building regardless of your credit, Click here.