For small business owners, the importance of building up business credit cannot be overstated. However, many owners are unsure of the easiest ways to build good credit. Here's a brief list of some good ways to build business credit:
Keep your Information Current: Specifically, you'll want to make sure that all your financial information is current with all three business credit bureaus. This is because the three bureaus use different calculations for business credit scores, and different lenders prefer to report different scores and different types of data.
Have a Business Banking Account: This account should be in the legal business name of your company. Use this account for all major financial transactions of your business. Many companies also opt for a business credit card; using one can help build credit. If you do, pay the credit bills from your business banking account.
Pay Bills On time or Early!: speaking of paying credit bills, credit card bills should always be paid on time, or early if possible. Be sure to also pay back any loans on time; this will improve your credit and save you interest fees.
Establish credit with your suppliers: Another good idea is to work with multiple vendors repeatedly, and discuss with them how you can build credit that your company can use for further purchases. Not only will this gain you credit with suppliers, but you can also ask them to report your (hopefully flawless) payment history to business credit reporting agencies.
Get a Business Phone Number:
It may not be obvious how having a business phone number can help your credit, but it will. By establishing a phone number for your business, and listing it in various places so it can be easily found, you ensure that creditors, bank officials, and others can reach a business number aside from your personal cell phone. Being easy to contact will allow your business to be in constant communication, which allows you to quickly address any credit issues should they arise.
If You're the Owner, Keep Personal Credit Records Clean:
A major factor in many banks' and creditors' decisions to lend are the personal credit scores of the owner. If you own a small business, it's a good idea to keep your credit score high, ideally in the mid-600s or above, to make it easier to borrow money and therefore build business credit.
Unlike a typical business loan, a merchant cash advance (MCA for short), does not negatively impact your business or personal credit. Many small businesses like MCAs because they are a quick and easy way to obtain the funds needed for any short term project. If you're looking for a cash advance as a business loan alternative, consider contacting Everest Business Funding. Apply online today to see how much your business qualifies for!