Request Business Credit Reports
TransUnion, Experian, and Equifax handle business credit reporting for over 27 million businesses in the US. If you’re listed in the appropriate sections, you may have a report available now. Acquire the report to see what your current standing is before you attempt to apply for business credit lines or ask for a supplier to extend credit terms. Each credit bureau reports different aspects of your report, but the basic structure includes:- Business Name
- Address
- SIC Code
- Creditors
- Length of Credit History
- Rating
- Score
Correct Inaccuracies
Review all three of your credit reports for inaccuracies then proceed with disputes, if applicable. Understand that the process can take up to 45 days and it can improve your scores before you approach suppliers for credit lines.Ask Suppliers to Extend Credit Terms
Based on your score, you can move into the next phase by asking suppliers to extend credit terms. An extremely high-risk business is ranked low, which is near 0 while low-risk businesses are near 100. Anyone in-between may have an active report, but it can change with the right steps. Suppliers are skeptical when it comes time to extend credit to new businesses so if you start with a strong score, keep it as you build your business.Apply for Business Loans
Strong business credit profiles have long histories of positive credit lines. This may include business loans taken from reputable lenders such as Advanced Funds Network. They’re open to helping small businesses get started onto the path of growth. With easy application processes, you will be on your way to growth potential in no time. A few questions you can ask lenders includes:- What are my interest rates?
- What is my loan term?
- Will I need collateral?
- Do you offer insurance on my loans?
- Do you report my payment history to the credit bureaus?
Use Smart Cash Flow Management
Savvy borrowers pay their bills on time, all the time. It’s an obvious responsibility as a business owner and it creates synergy with your suppliers. On-time payments can give future investors a level of confidence in your ability to run a successful business, manage financial responsibilities and earn a profit within the same scope. If you can show signs of profits, reinvest the money into your business as it continues to grow. Lenders are available for short-term loans to handle emergencies including natural disasters, unexpected opportunities, new hire expenses and equipment leasing.Growth Hack Your Business
Stay focused on the end result of your investments, but monitor your credit reports as you make new financial decisions. Any changes to your credit report can deter others from offering you favorable credit terms. We know you’ll have investors and equity partners. Anyone that sees a strong business credit profile will want to assist you as you continue your journey of entrepreneurship. We’re your strategic partner. Advanced Funds Network can help you get started on your journey with just a few questions to see if you’re ready. Contact us today for more information.Frequently Asked Questions
What are the initial steps to establish a strong business credit profile?
To establish a robust business credit profile, begin by forming a legal business entity such as an LLC or corporation, which separates personal and business finances. Next, obtain an Employer Identification Number (EIN) from the IRS and open a dedicated business bank account to manage transactions. These foundational steps are crucial for building a distinct business credit history.
How can I monitor and improve my business credit score?
Regularly reviewing your business credit reports from major bureaus like Experian, Equifax, and Dun & Bradstreet is essential to ensure accuracy and identify areas for improvement. Disputing any inaccuracies promptly and maintaining consistent, on-time payments to creditors can significantly enhance your business credit score over time.
Why is it important to separate personal and business finances?
Separating personal and business finances is vital because it protects personal assets, simplifies tax preparation, and ensures that your business credit profile reflects only business-related activities. This distinction is crucial for building credibility, potentially leading to better financing opportunities.
What role do vendor relationships play in building business credit?
Establishing credit lines with vendors and suppliers who report payment histories to business credit bureaus can positively impact your credit profile. Consistently paying these vendors on time demonstrates financial responsibility and can enhance your business’s creditworthiness, making it easier to secure favorable terms with future creditors.
