January 15, 2016
When it comes to running a business, regardless of what size it is, it’s important to find the most affordable credit in order to make it easy to make payments, even if you end up being late on a payment here and there and have to deal with interest or a late fee. But how can you go about ensuring that your business will be able to gain access to the most affordable credit out there? Continue reading for a few tips.
Make Sure Your Business and Personal Finances are Separate
Even though a lender may look into your personal credit report and credit score when you apply for a business loan, it’s important that you differentiate between your personal financial records and those of your business.
Do this by setting up business banking accounts after registering your company as a corporation or LLC and receiving your Employer Identification Number (EIN). Doing so will establish your business as a separate entity from you, and lenders and creditors will be more willing to work with you.
Build Up Your Business Credit Rating and Report
Your business’s credit rating and report will play a huge role in what lenders and creditors are willing to give you. It could be the difference between getting a much-needed loan or none at all. It could also be the difference between getting a higher credit limit on your credit card, along with a lower interest rate, or a higher interest rate and lower limit.
Taking steps to build up your credit is the first step, and you should start doing so right when you launch your business. You can even search for how to build business credit for free, so you needn’t worry about having to spend a lot of money.
Start with Smaller Credit Lines
Starting with smaller credit cards and credit lines, such as those issued by retailers, is a good way to set a solid foundation that other creditors and lenders will use to determine if you’re eligible for more funding. Again, make sure that you keep track of every expense and that you pay all of your bills on time so you can create a stellar credit report.
Monitor Your Credit Report Regularly
Once you’ve established that you have a credit report, thanks to getting loans, as well as credit and debit cards, and making payments on what you owe, you should also make it a point to monitor your credit report on a regular basis. This will alert you to any errors within the report, as well as give you insight into the lenders that have been accessing the report, along with the steps that you need to take to bring your credit score even higher than it currently is.
By taking these simple steps, you can ensure that your business will be recognized as its own entity and that it will be eligible for a variety of credit cards and loans from the most reputable and affordable sources. This will give you access to the funding you need to grow your business. You want to make many sales and to increase profits but all this starts with funding. Allow yourself enough time to make everything work properly.
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