Building Business Credit Quickly:

Business credit is an important part of running a small business. It opens up opportunities for new markets and partnerships and even increases the likelihood of securing funding for new opportunities.

All business operations rely on working capital, and most new business owners spend their capital while launching their new business ventures. The biggest challenge a new company may face is finding funds to maintain operations until they reach stability. If your business plans on applying for a small business loan, you will need to learn how to quickly build your business credit. 

Choose the Correct Business Type

Choosing to be an Inc. or an LLC separates differentiates your business interests from your personal interests. An LLC means that your liability is limited to the business. It also shows that your business can stand independently without relying on your assets to support it.

Obtain your EIN

Obtaining an Employee Identification Number (EIN) will distinguish you as a business with the federal government. With an EIN, you can open bank accounts and perform other tasks that will allow you to manage the day-to-day operations of your business. You will use your EIN to record your assets and also file your taxes. Using your EIN will help establish which accounts belong to your business and which ones are your personal accounts.

Open A Business Banking Account

Once you have your EIN, you will need to open a bank account for your business. The bank account will allow you to perform transactions under your business’ name. This identifies your business as its own financial entity. The bank account for your business can be used to pay bills, cash checks, and set money aside for specific projects.

Apply for a Business Credit Card

Opening a line of credit is a positive step in showing creditworthiness. Using your credit card for small purchases and paying it off monthly will show a positive payment history. Choose a credit card that reports to all three credit bureaus, and you will have a modest credit history after a few short months.

Build Your Credit By Using Vendors who Report Positive Accounts with Credit Bureaus

One of the best ways to build business credit quickly is to work with vendors who report positive payment histories to all three credit bureaus. The faster you pay off your invoices, the more positive reports you will have going to the credit bureaus. This may not seem important at first, but as a new business, any positive report will boost your credit and increase your creditworthiness.

Continuously Monitor Your Credit Reports

Once you establish a credit rating, you will want to monitor your credit reports. Look for any discrepancies that may adversely affect your positive rating. Try to pay off your balances quicker and borrow less.

When you are ready to start expanding your business, make sure you have your business credit on point. Apply with Shore Funding and allow us to find you the funds you need in just a few hours instead of banks that could wind up taking months. Understanding your business credit and how you can improve it will help.