WANT TO IMPROVE YOUR BUSINESS CREDIT & FUNDABILITY?
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Published By Janet Gershen-Siegel at January 21st, 2021
You may have heard of business credit, which is credit in the name of a business and not its owner. It is an ongoing process and you must do it proactively. That is, it won’t just happen – you have to make it happen. Did you know that in 30 days, you can hit the ground running and build business credit?
There are a number of things you can do to make your business more fundable. That is, more likely to get funding. Here are some acts you can take which are fast. They will give you quick bang for your buck.
Yes, it will help you get business credit fast. But building fundability also bakes credibility right into your business. This will help you attract prospects, and it will help you convert more of them into customers.
Getting fundable may even help to shorten your time to close. And it will do so long after the 30 day time period has expired. A lot of these steps will require a phone call to a provider or chatting online. To expedite matters, get someone to help you, so you can get the preliminaries done in a total of maybe 2 or 3 days.
Does your business contain the name of its industry? That can be problematic if you’re in what is considered to be a risky industry. Risk is usually defined as a higher chance of injury on the job and/or businesses which perform more cash transactions than most other companies. To become more fundable, don’t add the name of a risky industry to your business name. Deciding on your business name can take less than a day.
A cell phone or home phone number will get your business flagged. It will not be considered to be established. This will harm your business in your quest for fundability. But you can use VOIP (voice over internet protocol). This enables any phone number to ring any device. So you can still use your cell phone. Setting up a VOIP will take far less than a day.
Toll-free numbers are best. That is, 800 or an equivalent exchange, such as 877 or 888. You also want to have a 411 listing. You can get one via ListYourself.net. Lenders and credit providers will be looking for your phone numbers, so make them findable. You can a toll-free number fast through a provider like RingCentral.
Working from a residence can be a red flag to lenders and credit providers. They will check your business address on Google Street View and flag it as residential, and you’ll be denied business credit. A virtual business address can address all these issues.
You get a deliverable address – not a PO box or UPS box, which would also be flagged and generate a denial. This means an actual brick and mortar address. Some plans give you access to clerical help, conference rooms, mail forwarding, and more. Three we really like are Alliance, Da Vinci, and Regus. You can contact any of these providers and get a fast live quote.
You must have a professional-looking website and email address. Your domain needs to be yourcompany.com or .net if you can get that. Never use Wix or Weebly. You will need hosting through a hosting company like GoDaddy. You can buy a domain and set up a website (larger hosting companies will provide services to help if you’re inexperienced with this) in maybe a day.
Your email address needs to be on the same domain as your website. Generic professional names work well, something like [email protected] or [email protected]. Don’t use Gmail, Yahoo, AOL, or the like. But don’t worry about checking yet another email address, you can have any email forward to any other email. You can set all of this up at the same time you set up hosting.
The Secretary of State’s office has info on every license needed to run your business. They also have helpful information, like if you need to take continuing education to maintain your license. Processing time varies, in some states, it won’t be done in time.
But even if licensing will come past the 30 day mark, you can at least get started with getting your licensing. Even business credit providers which insist that you have your license(s), may make an allowance if you can prove you have put in your application. So be sure to print and keep copies of receipts and forms.
Many business credit providers will insist that you have a business bank account. It must be devoted to your business. This will also help to keep you from accidentally commingling funds. You can apply for a business bank online at many banks, even if the bank has brick and mortar locations.
In particular if you have a personal account with a bank, and you’ve managed it well, you can get a business bank account fast. You can often be approved within as little as 15 minutes online. But it may take longer for you to get a debit card or checks or the like in mail. So to save time, you may want to do this in person.
Visit the IRS website and get a free EIN for your business. Choose a business entity like corporation, LLC, etc. You can start off as a sole proprietor. But you will most likely want to change to a type of corporation. This is to minimize risk and maximize tax benefits. Note: a DBA is not a separate business entity.
Getting an EIN and choosing a business entity at IRS.gov are both fast. They will happen as quickly as your internet connection allows. Doing these things at this stage of the game means you’ve got a set business address, phone numbers, etc. So you wouldn’t have to change them later.
You will also choose codes at IRS.gov. SIC and NAICS codes classify your business. The IRS is moving from SIC to NAICS. But for now, consider both to be in play.
Codes show what your business does. For example, NAICS code 531312 means Nonresidential Property Managers. If your business could fit under one or more code, choose the less risky code
Lenders and credit providers are far less likely to approve a business if they consider it to be risky. Risky often means a higher chance of injury on the job or a business with more cash transactions than the average. You choose codes at the same time as you get your EIN and select a business entity. You can get all this done in less than an hour (internet permitting).
The amount of time it takes to incorporate will vary. It will depend on the state you’re incorporating in. It will also depend on the means you use. In general, online will be faster.
Even if you apply to incorporate online, you may still have to wait a few business days. In general, you will need Articles of Incorporation. If you want them drafted quickly and correctly, you’ll probably need to hire a corporate attorney to get this done. In the meantime, you can be working on some of the other things you need to get fundable and quickly build business credit
To build business credit, you will need a D-U-N-S number from Dun & Bradstreet. A D-U-N-S number + 3 or more reported payment experiences will generate a business credit report. And, therefore, you’ll have built business credit.
Go here: dnb.com/duns-number/get-a-duns-number-product.html. The free product will send you a D-U-N-S number within 30 days. But with our time frame, you don’t have that kind of time to wait around. Hence, you’ll end up spending $229 to get an expedited D-U-N-S number in 5 business days or less.
The $229 (DUNSFile + CreditSignal) will also get you monitoring, but it’s only monitoring of D&B business credit scores. You will also get alerts when your score changes. And you will get a full basic D&B business credit file.
Lenders consider your credit history as one of the chief factors when determining creditworthiness. Making timely payments will demonstrate to anyone looking to do business with your company that you’re low risk. You can open most credit accounts online in just a few minutes. But it will take longer to see the impact on your credit report. To save time, you only want vendors which will report to the business credit reporting agencies.
Even vendors which report may need you to reach a certain minimum before they will report. But check the fine print and call or chat online with a representative to get information fast, which you know will be correct. And keep in mind, it can take over 30 days for reported purchases to show up on your business credit report.
When all is said and done, it may take over 30 days to build business credit. But if your business is already set up, that will save time. You may need to pay to get everything done faster, and correctly the first time (which will also save time). But no matter what, once the 30 days have elapsed, your business will be set up well and will exude fundability.
A highly fundable business setup will only help you in the years to come. We can help you get started. And we can help you get everything done a lot more quickly. Let’s work together to build your business credit as fast as possible.