How do new businesses get credit and establish credit?
Sep 26, 2009
in
Business Line Of Credit
I am in the early stages of a start-up and am wondering how I can get a business credit line when the business has no credit history. Is it based on the owners’ credit?
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2 comments
imisidro on September 26, 2009 at 5:38 am
Building business credit is not a quick process – it takes time, normally around 3-4 years. The first step is to set up the proper business structure and take basic steps to ensure your business appears "real" and stable to the business credit bureaus. That means getting the proper occupational licenses, and a phone number that is listed with directory assistance in the businesses’ name, among other things.
Other than paying a company to do it for you, here are some ways you can build a business credit fast:
1. Register your phone in your business name
2. Get a business checking account
3. Register with DUN & BRADSTREET and get your DUNS Number
4. Find vendors who can give you lines of credit (start with Staples or DELL)
5. Apply for a business credit card – giving your business EIN instead of your SSN
I recommend reading the article "Building Business Credit" at http://www.powerhomebiz.com/vol146/credit.htm
Nancy Kay on September 26, 2009 at 5:38 am
Yes, it will initially be based upon the owner’s creit…that’s another reason keeping your credit clean and maintaining a good credit score is important…for more than just getting credit cards or housebuying!