Home
>
Small Business
>
How To Build Business Credit

How To Build Business Credit

Having their own business is something many millions of people dream of doing. Many do, of course, but so many others never quite get around to it. One of the factors that may discourage people from getting that business off the ground, is a lack of start up capital; and another may be the risk of losing their own money.

With a bit of thought, planning and effort, though, it may be possible for you to not only raise some start up capital, but do so through business credit. In other words, borrow against the business rather than personal assets.

You may be thinking that you have no business yet. That may be so, but it does not mean you cannot obtain business credit to get your plans started

Building business credit is completely different from building personal credit, and it is best to keep them separate if possible. Some credit reporting agencies will sell a business FICO score based on both the risk of the business and the personal credit of the owner. In some instances, the owner's personal credit is linked to the business credit, separate credit records are profitable. You should also bear in mind that you do not have the same credit protection laws with business credit as you do with personal credit.

There are some important steps to follow in building a good business credit record. Here are a few for you to take into account:

1. Prepare Business Plan And Structure

You are now in the world of business credit, not consumer credit. This means that you are trying to project yourself in a business-like way. In preparing yourself to do this, you will have the added bonus of preparing yourself for the transition from being an employee to being a business man or woman. The more business-like you become, the better your business will do in the future.

But first things first. Your first job is to convince potential lenders you are going to have a viable business. The quality of your preparation is important; if you go seeking business credit without doing your homework, you will be sent back to the drawing board.

To begin with, set up a proper business structure, and if you require any licenses, make sure those are in place. Also, prepare a business plan, with the aid of an advisor if necessary. You can use this to show that you have thought about the business: the products, the markets, the competition, pricing, and all the other elements of the business. Be prepared to defend your projections for sales, and your estimate of start up and running costs.

Again, this has the added bonus of being a good preparation for you, regardless of seeking credit for your business. You will become a better business person for preparing your business plan. Hopefully, that will stand you in good stead as your business grows successfully. Planning will become a part of your monthly or annual routine.

Another preparatory move that will help you is, in the US at least, getting a business credit profile. This can help you to build up business credit without using your personal credit. The benefits in having a business credit profile are many. Most importantly, you will have more cash for the business, convenience in purchasing, protection of your personal assets, limiting of personal liability from the business, and the ability to prepare your business for future lending needs.

2. Become A Good Credit Customer

You will, of course, need to buy equipment, services, stocks and other materials for your new business. If you can find vendors who will grant you credit, all the better; but is best if they are companies who will report your credit history to the major business credit reporting agencies. Dunn and Bradstreet is probably the best know internationally. Unlike with personal credit ratings, or FICO scores, with business credit scores income or income potential play an important roll. The top scores are reserved for the large stable businesses, but with careful and diligent business and crdit practice, you too can achieve a good credit rating.

3. Obtain A Credit Assessment

In order to enter the business credit market, it is best to do a credit assessment. This will determine if you comply with the lender and credit bureau's requirements. Once you have done that, look for businesses that issue credit without the need for established business or personal credit checks or guarantees. Once you have transacted business with vendors on credit, you can utilize those references to build your credit profile with the credit reporting agencies.

In many US states, there are non-profit organizations and/or government organizations that will help you with obtaining business credit. Often there are loans available for start-up businesses or even government grants. Check your state government, or national government if not in the US, web sites for such organizations.

Many retired, or semi retired, businessmen volunteer to help start-up businesses. If you can, take advantage of such help; it will all build your knowledge as you set out on the road to a successful business with a good credit standing. Experienced business people will forewarn you of many of the pitfalls of starting your own business, and you will be better prepared.

This how to build small business credit article was written by Roy Thomsitt, owner author of the Eliminate Credit Card Debt Now website. Roy is a former finance and business professional, now a full time online author.

Geneva ohare limo service .. Lockport Chicago limo O’Hare

In The News:

Security experts have discovered that hackers are targeting apps on the App Store to spread malware that steals information from saved screenshots.

A new luxury SUV combines military-inspired design and high-end luxury transportation and includes two military-grade gas masks to protect against chemical warfare.

80% of stalking victims are tracked using tech. GPS trackers, like AirTags, are among the most popular ways to do it. Here's how to protect yourself.

Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.

Kurt "CyberGuy" Knutsson explains how to protect yourself against artificial intelligence-fueled romance scams, which have become the most common type of fraud in 2025.

Kurt "CyberGuy" Knutsson explains the steps to declutter text messages on a Mac or iPad. Apple offers ways to do this more efficiently.

Here's how to take control of the algorithms on Facebook, YouTube, Instagram and TikTok if your social media feeds aren't showing you content you want to see.

Beware of iCloud scams using urgent messages. Tech expert Kurt “CyberGuy" Knutsson helps you spot the red flags to protect yourself.

Travel abroad worry-free with these top translation apps for travelers. Tech expert Kurt “CyberGuy" Knutsson highlights some favorites.

The European Space Agency's Euclid space telescope was going through preliminary tests in September 2023 when it captured images of an Einstein Ring in a nearby galaxy.

Tech expert Kurt “CyberGuy" Knutsson says hackers are using Microsoft Teams for phishing, vishing and quishing via social engineering.

Red light camera tickets: Not liable to ID the driver; some are fishing expeditions. Tech expert Kurt “CyberGuy" Knutsson helps you fight back against tricky fake tickets.

The apps collecting the most data about you are among the most widely used. Kurt the CyberGuy takes a look at 20 of these apps and how you can protect personal information.

AST SpaceMobile of Texas is developing the world's first global cellular broadband network that can connect directly to your smartphone without special equipment.

Community Health Center, a Connecticut-based healthcare provider, has disclosed a recent data breach affecting over 1 million people in the U.S.

Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.

The TruePeopleSearch.com website works for landline and cellphone numbers, allowing you to do a reverse phone lookup for any type of phone number.

A Chinese startup has developed a robot, Mirror Me, that has run about 100 meters in under 10 seconds, pushing the boundaries of robotics and speed.

Bad actors are now mimicking Reddit to spread malware that can steal personal information. CyberGuy shares what you need to know about fake Reddit pages.

An innovative new window system keeps your home comfortable without using a single watt of electricity and could change the way we think about energy efficiency in buildings.

Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.

Kurt the CyberGuy offers tips to dramatically reduce the risk of having your information stolen while booking flights, cruises, vehicles and accommodations.

Whoosh to launch a new urban transit system in 2026, offering a unique blend of on-demand service, direct routing and privacy that sets it apart from traditional public transportation.

Spambots, data thieves, and other bad actors run rampant online — more so now than ever before. Here's what to do if one gets ahold of you.

Tech expert Kurt “CyberGuy" Knutsson says the Super Bowl's huge audience makes it a prime target for many types of cybersecurity scams.

How To Build Business Credit

Small Business