Building business credit is critical for your business finances, just as building personal credit is important for your personal finances.
Building business credit is very dear to every company that has genuine intentions to grow and expand. Assessments under reviewsbird.co.uk shows that building business is crucial in gaining access to affordable financing your business. Not building business credit as a company may greatly affect your ability to obtain financing. This assertion is based on assessments revealed under business bank account reviews. Thus, as a company, building business credit is basic.
This content aims at providing you with proper steps to follow in order to build your business credit. Below are 4 simple but important steps:
1. Create a Business Bank Account
Especially for a financial home based business, creating a business account should be top priority. A business bank account enables you to pay all of your bills (on time and in full, of course) under the business name. When opening a business bank account, it is important to ensure that you open one under your business exact legal name and use the Employer Identification Number (EIN). If you don’t have an EIN yet, you are advised to get one as soon as possible. Keeping to this ensures that your on-time bill payments will register as coming from your business which further makes tracking easier.
2. Get a Business Credit Card
Generally, it is not advisable to use your personal credit card in paying for business expenses. Not only will it create logistical issues by combining your personal and business expenses, but more importantly, it will hinder you from building your business credit easily. Using a business credit card in paying your bills- in full and on time, is one great way in building business credit without disrupting your typical workflow. If you’re going to buy those office facilities or pay for a plane ticket to visit a client, won’t it be more advantageous using a tool that can improve your credit score? A business credit card can help you achieve that!
3. Always Report Past On-Time Payments
Most companies have a history of responsible payments that have already happened. If you wish to be paying on-time for your business’ supplies, facilities, internet charges, utility bills etc, you can use a service to promptly report payments from previous years back to certain credit bureaus.
4. Choose Suppliers That Often Report to Business Credit Bureaus
Always take note of suppliers that report your responsible payments to credit bureaus. As a company, you need to take your business to where your credibility and reliability are made known to relevant financial organizations. When selecting suppliers, make serious inquiries on whether they report to credit bureaus. When choosing a creditor or a business credit card provider, it is generally advised that you make findings on whether they report payment activity to business credit bureaus. While some suppliers report to both business and credit cards, some only report to personal credit bureaus which add nothing to your business credit.
Building business credit may be quite tiring, especially if you have no guide on how to go about it. However, the above steps can ease your journey in building one. By all means possible, also ensure that business credit bureaus are aware of your business’s stellar record. This will help increase your chances in obtaining more affordable financing for your business.