Building credit for your small business is important because you never know when you’ll want access to more funds, be it for expansion or to help out in a pinch. And what better time to think about building credit for your small business than now, because credit is easier to build when you’re riding the wave of success.
Building credit for your small business is similar to building personal credit; however there are a few key distinctions:
Clear distinction between business and personal
Even if you run your business as a sole-proprietorship, be sure to clearly distinguish your business and personal finances. You’ll want to demonstrate a clear paper trail of your business’s financial transactions, including all income and expenditures. This may include opening a business bank account and even a business credit card.Having corroborating documentation is key. For instance, if you pay all of your expenses with a small business credit card, you’ll have monthly statements to document your business expenses, but you’ll still want keep receipts and invoices as well.
Business credit card
Most credit cards charge exorbitant interest rates so avoid using them to carry debts. However, business credit cards that are used frequently and paid off to zero every month can be a great way to start building business credit for your small business. Get a business credit card today and start building your credit rating.
Apply for a line of credit
Ideally, apply for a line of credit before you start your business. Remember, having access to a new business line of credit doesn’t mean you have to use it. So consider building credit for your small business now because it’s better to be prepared than to have to scramble in the event of an emergency.
Overcoming bad personal credit
Building business credit is not a substitute for a personal history of bad credit. Business creditors will take your personal credit into account, so continue improving your personal credit while building your business credit. In fact, consulting can be a flexible way to get out of debt.
Building credit for your small business
Building credit for your small business is similar to building personal credit. Show a clear history of timely payments on products like lines of credit and credit cards, and you’ll be on your way to building credit for your small business.
- Government-funded small business loans
- Bad small business credit card management
- New business line of credit
- Starting a consulting business is cheap
- Small business income standards
- Surviving feast or famine work cycles
- Setting consulting fee rates
- Tax write-off list
- Sample consulting invoice
- Finance for consultants
- Consulting Fees: A Guide for Independent Consultants
- Discover Your Inner Consultant
- Discover Your Inner Entrepreneur (for moms)
- Small business training