Many small business owners are unaware of their ability to build a business credit profile so they can stop using their personal credit to fund their business. You can separate your personal liability and protect your personal assets from that of the business just by incorporating. Once of the main advantage of building your business credit is that you can separate your personal assets and liabilities from those of the business. If the business incurs a debt that it is unable to repay, your personal assets (house, car, belongings, etc.) are not at risk.

 

We have developed a program designed specifically to help small business owners build their business credit profile and separate their personal liability from their business. But before we start building your business credit you will want to make sure that you fully understand the basics of business credit. Being able to speak knowledgably about business credit will make your lender feel confident in you, and thus enhance your chances of obtaining a loan.

Financing is a critical part of growing a small business and almost always a very large concern for the owners. Nothing is more important and vital to the health of a small business than having the right financing in place.

 

Most small businesses are initially financed by the personal savings or assets of the owners and can rapidly reach a stage of growth where they are forced to seek credit or investment solutions to fund that growth. Below I am going to teach you how to build your business credit profile in order to assist you in obtaining the financing you need to grow and succeed.

 

Business owners quickly realize that applying for business funding is a much more complicated process than applying for personal credit. Applying for business funding requires careful preparation and demands that you understand the process and what it takes to qualify.

As an Underwriter does their due diligence in determining your credit worthiness, they will also rely heavily on what’s being reported to your businesses credit reports. Business credit scores predict the likelihood of a late payment and lenders review them for one reason, to determine the likelihood of the business going delinquent. Much like a consumer credit report, a business credit score uses credit history to calculate a number indicating a company’s risk.

 

Underwriters look closely at your business credit reports for numerous reason, one reason is to find debt that may not be reporting or listed on your personal credit report. There are 3 major business credit agencies that lending institutions typically use in their underwriting process; Dun & Bradstreet, Experian Business and Equifax Business. Let’s break down each agency and their specific grading criteria.