Norio Matsumoto

Easy Ways to Build Business Credit

I know of a few businessmen and women who started out with as little as a few thousand dollars to start up anew small business venture. They did not use their personal credit and somehow got successful but as their businesses started to expand and they needed newlines of credit, some of them were quite surprised why they got turned down by creditors, lending companies and banks when they applied for a business loan. Some of them, however thought that they were declined because their business was still quite new.

And then a few of them somehow ended up quite lucky. They were introduced to people who invested in their company and gave them the capital they needed. Now, those entrepreneurs have ended up expanding their business successfully and it was now the banks and lending companies turn to call them up and inquire if they are interested in getting a business loan. They now laugh at how ironic their situation had become.

The thing is, they learned based on what happened to them that it was less challenging to get credit if there was no need for it. But for those small business owners who were not as lucky as the businessmen I told you about, here are some tips you can try to build your business credit so that creditors will have no reason to decline you.

Start building credit as soon as you start your business. Be proactive. You can apply for credit as soon as your business has started its operations. Lending institutions usually “wait” for small business to tenure for two years before they are ok with offering a credit line. You can choose not to wait that long. You can try to get approved of a bank loan with an amount that is not too big (probably just the minimum amount you can get approval of or even lesser than that) or you can get credit card solely for business purposes. If the banks get too stingy and even they you a business credit card, opt for opening a secured credit card with just a small credit limit. The point is, do these things while you are still not in need of a credit yet because your purpose is to build your business credit. Another option is to try and approach big time retail companies where you buy equipment and whatnot and inquire if they offer commercial credit accounts for small businesses. This can also help b