Business Credit Building Step 1- Building Business FundabilityTM
If you’re not sure what this whole business credit stuff is, read “What is Business Credit?” first.
The perception lenders, vendors, and credit issuers have of your business is critical to your ability to build strong business credit. Before applying for business credit, a business must assure it meets or exceeds
all lender legitimacy standards.
There are over 20 FundabilityTM points
necessary for a business to have a strong fundability foundationTM.
It is very important that you use your exact business legal name. Your full business name should include any recorded DBA filing you are using. Make sure your business name is exactly the same on your
corporation papers, licenses, and bank statements.
You can build business credit with almost any corporate entity type. But if you truly want to separate business credit from personal credit, your business must be a separate legal entity and not a sole
proprietor or partnership. Unless you have a separate business entity (Corporation or LLC) you might be doing business but you are not truly a business. You need to be a Corporation or an LLC to separate personal from business. Your business entity also matters for taxes, and for liability in the event of a lawsuit.
Whether you have employees or not, your
business entity must have a Federal Tax ID
number known as an EIN or Employer IdentificationNumber. Like you have a Social Security Number, your business has an EIN. Your Tax ID number is used to open your bank account and to build your business credit profile.
Take the time to verify that all agencies, banks, and trade credit vendors show your business listing with the same Tax ID number. Your business address must be a real brick and mortar building, a deliverable physical address. It cannot be a PO Box, or a UPS address.
Lenders tend to frown upon the use of home addresses. Some lenders will not approve and fund unless this criterion is met. You must have a dedicated business phone number under the business name. A toll-free number can give your business legitimacy. A local business number is good if you provide local services and if you want to have a listing with 411 directory assistance.
Lenders perceive 800 numbers or other toll-free phone numbers as a sign of business legitimacy. Even if you’re a single owner with a home-based business, a toll-free number provides the perception that you
are an even bigger company. It’s easy and inexpensive to set up a virtual local phone number or a toll free 800 number.
A cell or home phone number as your main business line could get you flagged as an unestablished business that is too high of a risk.
DON’T give a personal cell phone or residential phone as the business
phone number. You can forward a virtual number to any cell or land
line phone number.
Credit providers will research your company on the internet. It is best
if they learned everything directly from your company website. Not having a company website will hurt your chances of getting business credit. Bravori’s lead web developer has been doing full stack web development since 2006. We offer affordable business websites. So you can have an internet presence that displays an
overview of your company’s services and contact information.
It is important to get a company email address for your business. It’s not only professional; It also greatly helps your chances of getting the thumbs up from a credit provider. Setting up a business email address is too easy and inexpensive to neglect. Bravori Web Development services come with an email server and 4096-bit RSA encryption. if you don’t know what that is, it’s the same level of email security used by the Department of Defense and the Whitehouse.
One of the most common mistakes when building credit for your company is non-matching business addresses on your business licenses. Even worse is when you don’t have the required licenses for your type of business to operate legally. Contact the State, County, and City Government offices. See if there are any required licenses
and permits to operate your type of business. You may need a mover license, nursery license, or something along those lines that isn’t covered by your normal business license or UBI.
State business, county license and/or permit, city license and/or permit and IRS filings must have correct listings. Take the time to verify that main agencies (State, IRS, Bank, and 411 national directory) list your
business the same way and with your Exact Legal Name. Also take the time to ensure every bill you get (power bill, phone bill, landlord, etc.) has the right business name and comes to the business address.
We understand that all this can be confusing if you’re new to entrepreneurship. It can be too time consuming if you’re busy operating your business already. It can be frustrating or something you just don’t want to do yourself if you already have good money and you’re starting your 2nd or 5th business. We are here to help. We can give you exact guides if you want to do it yourself. We can do most of it for you and leave anything with private information to you if you prefer. We also can sign a non-disclosure agreement and a very limited power of attorney (NDA and LPOA) allowing us to do the fundability foundationTM requirements for you if you prefer.