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5 Companies that Build Business Credit

Published By Faith Stewart at October 23rd, 2020

Building business credit is not hard, if you know what you are doing.  It doesn’t happen without some intentional action on your part.  You need to know how to set up your business, and then you need to do business with companies that build business credit. 

How to Use Companies that Build Business Credit to Your Advantage 

companies that build business credit Credit Suite2 - 5 Companies that Build Business CreditIt can seem almost impossible to get business without business credit.  They cannot get approved for accounts because they do have business credit.  But they do not have business credit because they do not have accounts reporting positive payment history. 

What do you think of when you hear about companies that help build business credit?  Probably  not what they actually are.  These are companies that will offer net terms on invoices without a credit check. Then they will report your payments on those invoices to business credit reporting agencies.  Of course, they have to reduce risk in other ways since there is no credit check.  They may require a minimum order, a certain amount of pre orders, a minimum amount of time in business, or any number of things. 
companies that build business credit Credit Suite3 - 5 Companies that Build Business Credit

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit. 

Why Business Credit?

What is business credit, and why do you need it?  Many business owners ask themselves this very question, especially if they have good personal credit.   They think they can get all the business funding they need with their personal credit, and fail to understand the need for business credit.  

The thing is, you need your personal credit for personal things, like buying a house and a car.  Generally, business expenses are much higher than personal ones.  They can eat up personal credit limits in a heartbeat.  This means your balances are always hovering at your limit, even if you make payments like you should.

With personal credit, this means your debt-to-credit ratio is always high, which knocks your personal credit score down.  Then, not only do you not have the open credit you need to handle your personal finances, you also ruin your personal credit score.  That crushes your chances of additional personal credit, and reduces your ability to grow our business in the future. 

The solution is business credit.  That is credit in the name of your business that is not attached to your personal credit report at all.  Typically, business credit limits are much higher.  This means you do not run as much risk of maxing out.  Also, the debt-to-credit ratio does not affect business credit the same way it does personal credit.  Even if you do max out business credit, your score will not be affected.  Your business credit score is much more reliant on making consistent, on-time payments. 

More Differences Between Business Credit and Personal Credit

Business credit is vastly different from personal credit.  They are affected differently by late payments, amounts reported, balances, and even inquiries.  

Of course, both are affected greatly by late payments.  However, business credit is affected much more quickly. Late payments are not typically reported to your personal credit report until they are 30 days late.  Late payments on business credit accounts hit your business credit report when they are as little as one day late.

Here is the biggest difference though.  With personal credit, almost every account reports to the credit reporting agencies.  In contrast, only about 7% of business credit accounts report to business credit reporting agencies.  This means you have to be intentional to get accounts reporting to business credit. 

Start by setting up your business as a separate entity from you as the owner.  Then, work with companies that build business credit.  

Companies that Build Business Credit: Set Up Your Business to Be Fundable

If your business is set up properly, you are very likely to meet most of the requirements set forth by companies that build business credit.  other than minimum time in business or minimum revenues.  These things, of course, are a function of being in business for enough time.  

How do you set up your business to build business credit and be fundable so you can take full advantage of companies that build business credit? 

There are a number of steps you need to take to ensure your business is set up in the best way to build both fundability and business credit

Get Separate Contact Information

Your business needs it’s own business phone number and fax number.  You can get both pretty easily that will work over the internet instead of phone lines.  In addition, the phone number will forward to any phone you want it too so you can simply use your personal cell phone or landline if you want.  Whenever someone calls your business number it will ring straight to you. 

Faxes can be sent to an online fax service, if anyone ever happens to actually fax you.  This part may seem outdated, but it does help your business appear legitimate to lenders. 

You also need a separate business address. You can use a virtual office to accomplish this, even if your business is run out of your home. This is a business that offers a physical address for a fee, and sometimes they even offer mail service and live receptionist services.  In addition, there are some that offer meeting spaces for those times you may need to meet a client or customer in person. 
companies that build business credit Credit Suite3 - 5 Companies that Build Business Credit

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit. 

Get an EIN

Next, get an EIN for your business.  This is an identifying number for your business that works in a way similar to how your SSN works for you personally.  You can get one for free from the IRS.

You Have to Incorporate

Incorporating your business as an LLC, S-corp, or corporation is necessary to fundability.  It makes your business appear more legitimate and offers some protection from liability. 

The option you choose does not matter other than for your budget and needs for liability protection.  The best thing to do is talk to your attorney or a tax professional.  Keep in mind that your time in business will start over at the time of incorporation. Remember many companies that build business credit require a minimum time in business to extend net terms.  That is why it is essential that you incorporate as soon as possible. 

Open a Business Bank Account

You have to open a separate business bank account.  There are a few reasons for this.  First, it will help you keep track of business finances.  It will also help you keep them separate from personal finances for tax purposes. Also, a lot of companies that build business credit want to see a business bank account with a minimum average balance.  

Licenses

For a business to be legitimate it has to have all of the necessary licenses. If it doesn’t, credit issuers will be concerned.  Do what you have to make sure you have all of the licenses necessary to legitimately run your business at the federal, state, and local levels. 

Website

Spend the time and money necessary to ensure your website is professionally designed and works well.  Pay for hosting too. Don’t use a free hosting service.  Along these same lines, your business needs a dedicated business email address.  Make sure it has the same URL as your Website.  Don’t use a free service such as Yahoo or Gmail. 

Companies that build business credit may not check this, but they may.  Regardless, your website is your first impression on almost everyone, and this is a vital part of setting up your business to be fundable. 

Finding Companies that Build Business Credit

Once you set your business up right, you still have to find the companies that will extend net terms and report payments.  That first part is pretty easy.  Lots of companies extend net terms on invoices.  However, most of them do not report those payments to the business credit reporting agencies like Dun & Bradstreet, Experian, and Equifax.  

Furthermore, the ones that do report do not make that information readily available. Here are a few however, just to get you started.  

76

76 is a fleet card that offers net 15 terms. To qualify you must be and entity in good standing with Secretary of State and have the following:
– EIN number with IRS
– Business address- matching everywhere
– D & B number
– Business License- if applicable
– Business Bank account
– Business Phone Number Listed in 411

Also, they will want your SSN for informational purposes. If concerned they will pull your personal credit please talk to their credit department before applying.

The great thing is, if you are not approved based on business credit history,  or you have been in business less than 1 year, you may still establish an account with a $500 deposit.

Grainger Industrial Supply

Grainger Industrial Supply sells industrial equipment for outdoors as well as standard tools, and more. To gain net 30 approval you will need a business license, a DUNS number, and bank reference among other things.  You will also need to make a $50 initial purchase.  They report to Dun & Bradstreet.

Summa Office Supplies

This is another office supply provider.  You can order anything from paper to staples, pens to printer ink, and pretty much anything you can think of in between from Summa.  They require a $75 initial purchase to report. They report to Equifax.

Uline

Uline sells shipping, industrial, and packing materials.  They also offer industrial and janitorial products. As a general rule, orders ship the same day.  You can get approval for net 30 terms when you order, but the credit department may make you do a few pre-paid orders first. 

Crown Office Supplies

Crown Office Supplies offers paper and other office supplies. They report to all three of the major business credit reporting agencies, which of course include D & B, Experian, and Equifax. It can be hard to find vendors which report to Equifax, so getting credit with Crown is a good move.  They do have a $99 membership fee.

This is a good start, but it isn’t enough.  You will need many more of these types of accounts to really build business credit.  How do you find them if they don’t make it publicly known whether or not they report?  You need a qualified expert to help walk you through the process. 

Another Option for Building Business Credit

Doing business with companies that build business credit is a vital step in the process, but there are some ways to make it go even faster. One of these is the credit line hybrid. 

What Is the Credit Line Hybrid? 

A credit line hybrid is a way to fund your business without putting up collateral.  Also, you only pay back what you use.  You do need a personal credit score of at least 605.  In addition, you can’t have any liens, judgments, bankruptcies or late payments.  Furthermore, in the past 6 months you should have less than 4 credit inquiries, and you should have less than a 45% balance on all business and personal credit cards.  It’s also preferred that you have established business credit as well as personal credit. But, if you do not meet all of the requirements, you can still use this type of funding.

Here’s how.  You use a credit partner that meets each of these requirements.  Many business owners work with a friend or relative to help fund their business.  If a relative or a friend meets all of these requirements, they can partner with you to allow you to tap into their credit to access funding, and as long as you make the payments, you can still build business credit.  

companies that build business credit Credit Suite3 - 5 Companies that Build Business Credit

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit. 

Companies that Build Business Credit: Next Steps

Once you have companies reporting your on-time payments you will start building business credit pretty fast.  Then what?  Then you will be able to get approval for business credit cards.  In the beginning, it will be easiest to qualify for store cards like those offered by Office Depot or Best Buy.  These are cards you can only use at the specific store that issues them. 

After that, you should be able to get approval for fleet cards.  These cards can be used for vehicle maintenance and repair, and gasoline purchases. 

Once you have several of these different types of accounts reporting consistent, on-time payments, your business credit should be strong enough to handle whatever comes its way.

Companies That Build Business Credit Can Help You Meet Your Goals

Unlike personal credit, you have to work to intentionally build business credit.  The first step is setting up your business to be fundable.  It doesn’t stop there though.  Since few business accounts actually report to D&B, Experian, Equifax, or any other business credit reporting agency, you have to work with companies that you know will report.  That takes some work and intentionality.  Find a qualified business credit expert that can help you find these companies and get approval.  Then you will be well on your way.

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