Top Five Reasons to Establish
Business Credit! |
By Trent Lee |
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Too Many business owners are using their personal credit to finance
the launch, expansion or growth of their business. A majority of
business owners have no idea what business is or how to establish
it. By following a few simple steps any business owner can
establishing business credit, therefore, separating their personal
credit from their business credit.
When business owners use
personal credit card to pay for business expenses, the debt of the
business reports back to their personal credit reports which lowers
their scores because their business debts hurt their personal debt
to income ratio.
To help prevent business owners from
damaging their personal credit, every business owner should follow
the simple steps of establishing business credit. By establishing
business credit the debt of the business will report to the business
credit file and not the personal credit file. Establishing business
credit will also help the business build a strong business credit
file so loans, lines of credit wont require the business owner to
sign a personal guarantee.
Here are just a few reasons why
every business owner should establish business credit.
1.
Establish creditability. You cant expect to walk into a bank and ask
for a business loan with no business credit or business history. By
establishing a good business credit profile you will be able to
secure the financing your business needs.
2. If your business
should fail, you would still be legally responsible if you used your
personal credit to finance your business
3. Saving money.
That's right, business credit rates are typically lower than
personal credit rates. A few percentage points in interest mean
thousands of dollars in the long run
4. Float your business
through tough times. Even though everything make be going great
currently, you never know when your company will take a turn for the
worse or when economic times might change. By establishing business
credit you will be prepared for the down time.
5. Get the
money you need. Lets face it, without the money you need to finance
the launch or expansion of your business you really wont be in
business at all. Don't make the mistake of using your personal
finances to finance you business.
The are many, many more
reasons why you should establish business credit. We have all heard
the saying, "keep business expenses separate from personal
expenses," right? The only way to do that is to set up your business
properly in the first place by establishing business credit.
If you are interested in learning...
-What rights does a
business owner have if there is incorrect information on a credit
report
-How do I obtain a business credit score
-What do
business lenders look at in order to extend business credit
-Where do you find companies that grant credit
-Which companies
report to the business credit bureaus
-What credit cards
companies do not require personal guarantees
Then I suggest
you start the education process of learning how to establish
business credit! |
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