One of the most important things for any business that want business credit is how credible it looks. If you don't look credible, how are lenders going to trust you? It's true that you can build that credibility but you have to know the process. The quickest way to ensure that your business has the credibility it needs is going through the credibility and foundation process. This blog will look at how to go about creating this business profile.
In this post, we're going to go over business credibility and foundation. And the main reason why most small businesses get it wrong and can't get access to credit or funding is because the business simply put credibility is the foundation for fast business credit. When it's solid one, It makes the lender send you those pre approval letters that we all love. So let's make sure we get yours solid.
What is Business Credit?
Business credit is a rating of your business' financial responsibility. It lets you get financing or credit that helps your business grow. Banks and investors look at business credit when deciding how much money to give you, or if they will work with you at all. If you have good business credit, you can get more money and better loans from banks and suppliers.
Get the complete business credit breakdown here
Credibility and foundation
To make sure your business is credible you will need a strong business profile. You business profile is your business reputation from the eyes of the lenders and vendors you will be getting credit and loans from.
The credibility and foundation of your business profile is a 9 step process. If you would know to know if you business profile is done correctly take our free business credit Assessment below.
Step 1 Business Entity
What designation your business has have a lot to with an ability and fund ability. Limited Liability Company (LLC) and Corporations have access to more funding than say a Sole Proprietorship. LLC and S corp are business designations that you can completely create a profile from as stand alone entities. Sole Proprietor is just you personally conducting business with a tax ID.
Step 2 Business Address
The type of address your business uses can when you go to higher tiers of credit building effect your fundability. Commercial address is from the banking perspective gives your business legitimacy that your personal address doesn't.
If you don't have a commercial address then use a virtual office address as an alternative.
Step 3 EIN/TAX ID number
The EIN is the identification number of your tax payment, which is basically proof that you are paying tax. You have to provide EIN to start a business bank account for your company, and it is also required for investments and financing.
Once you have a EIN for your business, at least for tax purposes, you have a registered business.
Here is a full breakdown of EIN/TAX ID process
Step 4 Business License
Does your business require any state or federal licenses? If it does then you should complete the required steps to obtain it before you move to on to the next step.
Step 5 Business Bank account
- Have a business phone number
Having a dedicated phone number through which investors, suppliers, and customers can connect to you will make your business seem more credible too.
Step 6 Website and Business email
Your business will need a website and professional email. Create a simple landing page and your business email should be yourbusiness.com not email@example.com You can buy your domain on Godaddy.com. We use Siteground.com for all our domain needs and you can create your professional email directly in Siteground.com
Step 7 Business Bank account
Your business bank account is the actual start of having a business. Let me explain. Your bank account that was created with your Tax ID and all your business expenses and liabilities go into is where you have separated your business finances from you personally is when you "have" a fully realized legal business entity because now you business expenses can to be tracked and looked at to give you can get all the benefits of being a business owner
Step 8 411 listing
You should list you and your business for free on Listyourself.net. Once you put all the information in they will call you to verify you and your business. After the verification it takes a few days for the listing to be publicly available. Now you business can be found all over the world. Since you created the listing all information should match before you reach the next stage of building your business credit.
Step 9 Duns Number
A D-U-N-S number is a unique nine-digit identifier for businesses. This number is to each business from Dun and Bradstreet. They are the biggest business credit monitoring agency. Duns number report your Paydex score so lenders know if you have been up to-date on your invoices. With a Duns number now you are ready to start Tier one of business credit.
To sum up, strong business credit can provide numerous financial advantages and help your business grow. We hope that after reading this article, you have a clear idea of how important your business credit profile is. Use our credibility and foundation steps to build fast a fast business credit profile.
Business Credit and Real Estate
I’m Ghanaian body building nerd who loves teaching about Business, Business Credit and Real Estate!