Business Credit in 3 Steps

Name: Jaeli Capital Consulting
Address: 66 W. Flagler St Suite 900, Miami, FL, 33130, United States
Telephone: 786-786-7706

By Walter Nunez & Yhordan Serpentini

Did you know, as per SBA, business credit limits are 10-100 times higher than that consumer credit limits? Did you also know that every successful business has business credit? These companies, ranging from small to large, have leveraged their higher business credit limit to grow exponentially.

Large corporations have hundreds of credit tradelines reporting on their business credit report. A successful business knows the formula to get business credit and you can too. ANY company can build business credit with 3 basic steps.

Step One

Start a business credit report much the same as a consumer report with small credit cards and/or vendor credit. The goal here is to build an initial credit profile. Net 30 terms are common with most vendors. This means they will give you 30 days to pay the bill you owe in its entirety. It is important to ask your credit issuer which business credit they report and how frequently.

Step Two

You will need at least three payment experiences reported to start getting retail credit. A payment experience is the reporting of an account to a business reporting agency. Some accounts report to multiple agencies. It is not recommended to apply for store credit without any payment experience, with no credit score, and no profile, or you WILL get a denial.

The key to revolving business credit is to build your initial score and profile with vendor accounts. However, if you provide a personal guarantee and your personal credit file is outstanding then you may still get approved for retail credit without an established business profile.

Step 3

Once you have a total of at least 10 payment experiences you can then start getting approval for cash credit. You should have at least one account with a $10,000 high credit limit so your cash limits are as high as possible. When you do, you can start getting Visa and MasterCard credit cards.

You can start from no credit and get to this point in a fraction of the time that it will take under consumer credit. This is amazing considering in the consumer world you must have credit reported for six months to even get a personal credit score.

This is ideal for business that leverages revolving credit to manage their monthly or quarterly cash flow. For more complex lending needs such as commercial real estate, asset-based lending, securities lending, etc. then other important factors are considered as well.