Your small business needs credit to thrive. Access to operating expenses and equipment, including trade credit and business credit cards, will help you build a favorable credit profile.
Getting a business credit card is the most effective way to establish your business credit profile. Those without any business credit may need to start with a trade credit card, such as a card from an office supply store or computer vendor. Maintain a low balance, pay the bills on time, and use the card carefully.
Business credit cards should be used responsibly, and business credit should be applied for every few months. Consider extending your vendor's terms once you've been with them for a while. Try applying for a new business credit card. Get a line of credit from a supplier or lease equipment.
Building a positive business credit profile will not happen overnight; it takes time and effort. This is no different than building your personal credit. Take the necessary time and make the effort in order to develop credit responsibly.
Make sure you have a business account, a phone number, and an established business if you do not have a business credit card. You may need to demonstrate your business's stability. Incorporation is not necessary, but it can be beneficial.
You'll have to start over from scratch when it comes to building your credit history. It may take from three to four months before you can establish credit with a supplier. By taking this step now, it will give your business credit a better look down the road, even if it seems like a lot of trouble.
Be careful when setting up accounts, to only establish what you need, where you need it. And watch your spending. This is your business, and you need to keep your business credit profile very clean. It can be difficult sometimes to avoid that brand-new "thing," but you absolutely have to if you're trying to establish business credit.
It may help to make a written plan of how you intend to build your credit. Think about how you can get to where you want to be, what you want to accomplish, and what you need to purchase during this plan.
Consider building business credit just another part of your job as a business owner. It's not always fun, but taking the time to do it well will make your business grow faster. This will place you in a more favorable position to take advantage of future opportunities as they arise.
Credit gives you flexibility, and you absolutely need to be flexible to be ready for every obstacle you will face as a business owner. Building credit is not only a wise idea; it's practically a necessity if you intend to create and maintain a thriving business.