Building Your Corporate Credit For Better Prospects
For establishing your credit worthiness with creditors you need to build corporate credit. By doing this, not only does your business grow faster, but also your credibility goes up significantly. When you are a serious business person and have a strong corporate credit, chances are that loan requests will be approved, which, if not approved, could compel you to withdraw money from your personal pool. So before you apply for a loan or a lease, build your corporate credit and create your credit reputation.
Build Credibility of Your Company
If your company is a Corporation or a LLC, getting significant credit is always possible. A business credit assessment goes a long way in proving the genuine nature of your business. Getting an IRS approval by means of a Federal Tax ID is recommended to create a separation between your corporate and personal activities and credit. Apply for and acquire all permits and licenses that are required by paying the required fee to the sate or city governments. Have a business address, relevant mail address, and website and telephone lines to establish your presence. Ask for an audit to ensure that you meet all the necessary stipulations for running a business. Creating an online presence through web and advertisements also go a long way in establishing strong corporate presence.
Look Out For Small Credits and Lenders
It is a good idea to approach small business credit providers. However, ascertain the rates and fees before you accept credit from them. Later on, corporate houses will use this important history that you build with other creditors. Thus, if you want to build corporate credit, you need to pay back the creditors on time. When you establish a good payment history for a period of six months, you can expect to get bigger loans and credit. Make a liaison with at least six such companies that will report on-time payments on your behalf. Establish an accounting system for paying back these companies so that the records add to your credibility.
Move On To Higher Credit Lines
When you build corporate credit on a lower scale, you are eligible for larger credits now. Increase the credit amount as you expand your business. Repeat the earlier terms for these companies too and pay all bills on time. Now is the time for you to move up to higher credits and even unsecured business credit from banks and other commercial lenders. You can expect a personal credit check from these lenders and even a guarantee from you ascertaining payment.
When you create business credibility remember to start from the bottom and rise up to the top. Creating a good credibility will ensure loans from higher bodies. It would help to have a corporation which has a strong sales and a good future growth. A business plan explaining the purpose of loan, the company requirements, the amount of money used and strategies for loan repayment will build business credit immensely. Professional help that guides you through the steps to build corporate credit are available and benefit your business credit greatly.
By Sherry Gain
Image by Steve Roberts
Image by Steve Roberts
Sherry Gain is an advocate for entrepreneurs and small business owners alike. She freely shares her knowledge and experience and with her guidance your small business will be empowered to succeed. Find out more by visiting BusinessSmallBusinessCredit.com.
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