Did you know that you can start building your business credit even before opening your doors for business? The first thing you do is to establish your business as a separate entity. Don’t mix it with your personal credit profile. Your second step is to make sure you have a well-written business plan, which you must know every details about it and be ready to defend it by showing how you came up with your figures. In addition, before going further, you need to make sure that you have all the necessary licenses/ permits to start a business.
Your initial goal on the other hand is to establish a viable business on paper, with all the details in place.
Then find out what exactly are the requirements for both the lender and credit bureaus. By doing such assessment, you’ll know what are expected before establishing your credit profile. It’s always advantageous to know what’s required before embarking on any project.
Finally, start making initial purchases for your business, and this is where you’ll need to invest in your business. This is where business credit should come in handy; business plan can be very helpful especially to attract angel investors or business investors with significant business credentials.
Having financial backing from a financial or credit firm can motivate vendors to believe in your business and may even grant you a line of credit.
Another means of getting a business credit started is through loans from banks or lending firms. Paying your loans on time can also help you establish your credit profile.
However, you should watch where your business stands in concurrence to your industry. Whether you’re spending much-more or less -than your competitors, Lenders will certainly be aware of the numbers that unusually appears which might affect your credit credibility.