Business Credit – NOT!! « Building Business Credit

Business Credit – NOT!!

25Jan07

WHAT BUSINESS CREDIT IS NOT!

There’s so much hype about business credit that for the novice, it can be tough separating fantasy from reality. It would be wonderful to think that all you have to do is push a few buttons, learn a secret code and money will begin to flow like water. Fortunately, for business owners, who are commited to building a strong business model that is not the case. Here are some real facts that you have to keep in mind…

Business Credit is NOT…..

1. It is NOT credit granted on the basis of personal credit scores.

It’s not uncommon for business owners to be granted loans,
equipment leases or professional services for their businesses
if they have an acceptable personal credit score. If business
credit has not been properly established, these loans are often
personal loans used for business purposes. They are approved on
the basis of the entrepreneur’s personal credit only and are
reported on their personal credit file. This is an unwelcome
two-edged sword. Though credit has been granted, the owner
has unwittingly lowered their personal credit score by
increasing their income to debt ratio.

2.     Business credit is NOT a substitute for building and
       maintaining a good personal credit score. Rather, it is a
       separate credit score and profile that can ultimately
       become the sole basis for credit approval

       Building a strong business credit profile if you have bad
       personal credit is possible. However, there are times when
       your information about your personal credit may be requested:

· When you are applying for large lines of credit and loans,
        · If your business is les than two years old ,
        · If the industry that you are in is considered high risk.

Don’t despair, bad credit doesn’t have to stop you from building
business credit. We will walk you through each step and if needed,
connect you with professional help to have your personal credit repaired.

3. It is Not obtained by randomly submitting applications and
hoping for the best.

      Every lender has “ criteria” that must be met before credit is granted. 97% of business credit applications
      are denied simply because business owners don’t take the time to
      learn what a lender requires.   Before you submit, applications,
      take the time to understand business credit and let us introduce
      you to lenders whose criteria you can meet.