You probably have a good idea of your personal credit score. But what is your business credit score? Is it the same as your personal credit score?
When do the two remain the same? When do they get separated? How does all this work?
Here’s the quick of how it happens:
- To have separate credit, your business must be an LLC or corporation. This makes your business an entity separate from you. Sole proprietor’s credit remains exactly the same as the business’s credit because you are legally the same entity.
- Pay your bills on time for several years. Just like you do with your personal credit, you establish business credit with a good payment record. Whatever bills your company has to pay, simply pay them on time or negotiate repayment plans with creditors.
- Business credit is scored differently. While your personal credit is scored from 300 to 850, business credit is scored from 0 to 100. If you score more than 75, you have a very good business credit score.
- The tricky part… The way your business credit is scored is based on how your suppliers report your payment history. They have no legal or ethical obligation to report this information to business credit bureaus. So, if it’s a smaller supplier, they may not report the information at all. If you want to establish credit, it’s up to you to make sure the supplier you pay reports your transaction information to the business credit bureaus.
4 Simple Steps You Can Take to Establish Business Credit
Here they are:
- Form an LLC, S-corporation, or C-corporation (if you haven’t already)
- Apply with the IRS for an EIN number
- Make sure at least some of your suppliers report your transactions to business credit bureaus
- Pay your bills on time
Establishing good credit for your business is easy.
How You can Get Business Financing with Poor or No Business Credit Score
You can do this, regardless of your credit score. There’s a new niche in small business lending called “alternative lending.” Banks view small businesses as a higher risk, so they’re afraid to lend to small businesses like yours.
Alternative lenders offer financing for small businesses unable to meet bank requirements or uninterested in jumping through all the hoops. At Reliant Funding, we focus less on a three-digit credit score. Instead, we analyze the current health of your business and lend you funds based on that.
All you need to qualify is:
- To have been in operations for at least the past 12 months
- $10,000 per month minimum in gross revenues
- Have no open bankruptcies (prior bankruptcies are often okay)
You only have to complete a 1-page application, don’t pay any up-front fees, and do not have to pledge any personal assets. You have to submit a few recent financial statements.
Best of all, you can get up to $500,000 per physical location and can have the cash in hand in as little as 3 business days.
Contact Reliant Funding online or call 877-850-0998 to learn how you can access the financing your small business needs to grow.