Building a strong business credit history can help your organization grow and become successful within its field. Since positive business credit is based on substantiated business identity and the ability to make on-time payments and acquire loans, it is wise to start building your business credit as soon as you begin operations.
Here are several ways to build your business credit.
Establish Your Business
Properly launch your business by setting it up as a corporation or limited liability organization. Also, visit the Internal Revenue Service’s website to apply for an Employer Identification Number (EIN). In addition, register for a free Dun & Bradstreet number so that your business will be included in their database. And, open a business banking account and apply for one or more secured credit cards. All of these steps will establish your identity and can help to build your business credit.
Practice Good Business Habits
To nurture a positive credit history, do not borrow more than you can manage and always pay your bills on time. After several months have passed, ask for more credit on your unsecured credit cards, but don’t necessarily use it. Improving your credit utilization ratio can also improve your business credit score.
Enjoy the Rewards
After you have built a robust business credit history, you can then take advantage of many ensuing benefits. For example, you are more likely to qualify for business loans and unsecured credit lines with lower interest rates. Since you will be keeping better records and have better access to working capital, you will also probably experience a more positive cash flow which will make it easier to manage your expenses. Your may even receive travel miles or other types of perks.
A good business credit history is critical to any company’s success. Express Capital Financing can help you build your business credit and offers a variety of financial solutions designed to help your business excel in the coming years.