Is Building Business Credit Really Worth It?

Building business credit
The loooong road to building business credit…isn’t as long as you think

Business Credit Won’t Build Itself

You’ve got a business that is wholly separate from you, and yet you’re on the hook for anything that goes wrong.

You need credit for operational expenses, but you don’t want cash flow issues related to the business affecting you personally.

You’ve heard about DUNS Numbers and have a vague notion of business credit, but haven’t had the time or desire to learn more about what all is involved.

Does any of this sound familiar? The reality is, if you pay your bills your personal credit has a way of working itself out. But business credit doesn’t work that way. You can be in business for 20 years, and have no credit established for your business.

The Difficulty Of Establishing Business Credit

When you’re getting a business started you generally have to give a personal guarantee. Unless you take the steps to establish separate credit for that business at some point, then the business will always be limited to what you can personally get access to. This leaves the business owner personally responsible for covering all of the cash flow needs of the business.

The good news is there is a process for establishing credit that is tied to your business, and not to you personally.

Getting The Ball Rolling

The solution is to begin to establish a separate credit profile for your business. In order to do that you need to have lines of credit that are assigned to your business, not to you personally.

This will also open up far more lines of cash to you. The world of business credit is very different than personal credit, and that includes the payment terms. You’ll suddenly discover that those Net 30 or Net 45 payment terms that you hate so much as a receivable becomes the lifeblood of your business as a payable.

Process For Establishing Business Credit

Here’s how to get started – gets a DUNS Number. They will try to get you to pay for some special business credit package, but you don’t need that. Just get the DUNS Number so you can start applying for business lines of credit.

Then you need to get a Net 30 line of credit in the name of your business at Staples or some other retailer that reports to the credit bureaus. The goal is to start getting some creditors to add entries into your business credit profile with DNB.

For more details on how to continue down this path, checkout the Business Credit Guide.