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by Chosun One on September 24th, 2006

Chosun One

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How do I establish business credit? I recently established my own LLC company but need credit so that the business can be approved for loans.

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Answers. 5 helpful answers below.

  • by cami1211 on December 5th, 2006

    cami1211

    bank of america has a secure corporate credit card that helps you establish credit.

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  • by Roger in Bangkok on December 5th, 2006

    Roger in Bangkok

    A sound business plan is the first step. The best avenue I know of is to hook up with SBA (provided you are in the states!). They will not only help you write it (for free!) but they will also guarantee bank loans/line of credit. Now mind you, it's been nearly 40 years since I went that route, and I've been out of the states for more than 20 years ... 2, maybe even 3 things could have changed since then :-))

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  • by spcstr8 on December 5th, 2006

    spcstr8

    I'm nearing the LLC or S-Corp decision myself, so I have yet to reach the point that you are at, however, here's an article that may help.

    http://smallbusiness.yahoo.com/r-article-a-2274-m-2-sc-53-the_abcs_of_business_credit-i

    An additional thought was to simply:
    1) Open a business account at a local bank or credit union.
    2) Put $ into the account.
    3) Request a Business Credit Card or a Business Loan using the $ deposited into the biz-account as collatoral.
    4) a: If a credit card is obtained, make cash withdrawls, then pay back the bill using the cash from the original withdrawl.
    OR
    b: If a business loan is obtained, do the same thing, this time you'll pay the loan back using the cash from the original loan.

    Both ways you'll pay some points, or small fees, however in time this should help to establish some credit history for your company.
    Good luck

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  • by jonesy on April 20th, 2007

    jonesy

    I regards to Bank of America secured Credit Card they are no longer offering this. As it was to only build your credit internally with the bank if you wanted to apply for a loan. They did not report to any Business credit reporting agencies. only if you were delinquent

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  • by jonesy on April 19th, 2007

    jonesy

    Here is a free resourse on how to build business credit. Follow the steps closely if you get stuck they have coaches that can assist.

    The Basic Process

    To begin separating your personal credit profile from that of your company, the following are the first basic steps.

    1. Incorporate or Form an LLC

    You need to have a separate entity to build a separate credit profile. Click here for our incorporation and LLC formation services.

    2. Obtain your Federal Employer Identification Number (FEIN)

    We can prepare this form for you when you use our incorporation services.

    3. Open a Separate Business Bank Account

    Business funds and personal funds must be separate.

    4. Obtain a D-U-N-S Number

    This is a 9-digit number issued by Dun & Bradstreet that most companies utilize to verify the credit history of businesses.

    5. Compliance

    Make sure you've obtained all necessary business licenses, permits, etc. that are required in your jurisdiction.

    6. Business Phone Line and Yellow Pages Listing

    Make sure your business is listed in the phone directory and the phone line is in the business name, not in your personal name.

    7. Same Business Address

    Make sure the exact same business address is used for your DUNS number, the yellow pages listing and phone number as well as on business licenses and company credit cards (that you will be applying for later). Your home address is acceptable, however, private mailboxes and p.o. boxes may not be.

    8. Apply to "New Business-friendly" Creditors

    Apply to those companies that generally grant new businesses credit cards and lines of credit without requiring a personal guarantee. These companies will then update your credit profile with the various credit agencies. This is how you initially establish a business credit profile.

    9. All finished

    That's the basic process to setting up a new credit profile.

    http://www.boostscores.com/build_business_credit.php

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