Derick is a business, real estate and business credit consultant and
the creator of the 6 Figure business credit system fastest way to
get 6 figure business credit!
How can I use business credit to grow my online business?
Before I talk about using business credit to build your E-com business, I want to make one thing perfectly clear:
Your business will need capital to survive whether from revenue,
rich uncle, investors, SBA, you will need the capital.
Brick and mortar stores faced an unexpected obstacle as the pandemic worsened. On the other hand, the e-commerce industry is flourishing. Online shopping is no longer a luxury; it’s now a necessity.
Everyone wants a piece of this booming business. It takes years to perfect without proper guidance. It isn’t just listing your products and choosing a catchy brand name and tagline.
You have to set up your store and find a way to protect yourself legally. There’s also the matter of driving enough traffic to your website. Even the best business ideas fail without proper exposure.
Most importantly, you need to find the right financing methods. What better way is there than credit for your business?
Why is Business Credit So Important?
Business credit helps a company qualify for vendor credit, merchandise, supplies, fleet financing and anything else your business may need. It is also important for any emerging company. Yes, even if you have multiple angel investors backing you. A positive business credit rating will help your acquire investments.
It will also increase the value of your business. The business credit score determines whether your company can handle money. It reflects the state of your business and can help you make or break future business deals.
No credit or poor credit history for your business will drive away potential investors or lenders. A strong one will attract them. Essentially, the state of your financial dealings states whether your business is risky or not.
How Do You Build a Good Business Credit History?
Establishing business credit is the easy part. Maintaining a good credit profile isn’t. You need to pay special attention to this. It may be the only thing that helps your plans come to fruition.
Here’s how to build business credit using our 4 Step Formula
1. Business Credibility
Have business foundation and credibility will firmly establish your business through the eyes of lenders. This helps you separate your business credit profile and assets from your personal ones. Your personal assets may be at risk if you don’t. Make sure you separate your personal spendings from your business ones. It’s easier to manage taxes this way.
2. Understanding Business Credit Monitoring
Learn the difference in business credit monitoring. Use the credit reporting agencies
and others to your advantage. Finally, monitor your credit! Small errors may lead to significant ones in the long run. Paying close attention to your business credit helps you spot any issues and instantly correct it.
Now that you know what business credit is. Let’s see how you can start your e-commerce business.
3. Starter and Tier 1 Suppliers and Vendors
These companies will help you start your credit building process. The better your relationships are, the more benefits you get from it. Suppliers and vendors often send feedback to business credit reporting agencies. It’s best to establish a positive business credit beforehand. These agencies then become more flexible while extending credit.
3. Going Through the Tiers of Business Credit and don’t pay Late!
This is the first rule in the handbook of credit whether personal or bushiness to live by is Paying your bills on time, it tells the investors that you’re reliable. It says that you can pay off your debt in due time. Late payment history will negatively impact your business profile. Nobody wants that!
Don’t Start an E-commerce Business with a Hunch
Research is the most critical aspect of starting a business. You can’t run a company with an idea only. You need a structure that appeases all the stakeholders of your business.
This means that you need to figure out your business model. Ask yourself how you want to run your e-commerce store. Do you want a warehouse filled with a wide range of items? Or do you want a drop-shipping service? digital products? courses?
Figure out your product category, brand your services, and focus on driving traffic and sales. After that, now that you know what to do, check out your competitors! You need to be able to differentiate your business from others.
Once you’re ready with your product listing and web design, you need to figure out how to finance the entire project. Lenders are picky with who they’re about to invest in. You have to be creative to attract their attention.
This is where having business credit comes in handy.
Here’s how you can use it to finance your e-commerce business.
Dos and Don’ts of Using Business Credit
Credit card debt is bad debt. You might think it’s best to shy away from business credit, but businesses don’t come with money just waiting to be deployed, it has to be created. The one thing you need to pay attention to is using business credit help get the resources you need for your business.
Using the vendors like
- Uline for shipping, Industrial, and Packing materials, Industrial and Janitorial Products.
- Global Voice Direct for Cloud Phone System with Voice, Fax, SMS & HD Meetings, Business credit line, business trade line, start-up vendor account, Conferencing, audio.
- Strategic Network solutions for technology support and training. This includes security assurance, continuous monitoring, asset management & preventative maintenance
- Amazon for online shopping from the earth’s biggest selection of books, magazines, music, DVDs, videos, electronics, computers, software, apparel & accessories, shoes, and much more.
You might qualify for a business credit card with 0% introductory APR after your business has went through the tiers of building credit. This is great for starting your business, as purchases will be reasonable and attainable.
You get a year or so before the regular APR pops ups. So, kickstart your e-commerce site before it ends. There are cases where you shouldn’t use business credit. One of them is when you qualify for a loan.
If you do, just take it. They offer lower interest rates that help in the long run. The repayment process is easier, and there are no credit scores to worry about. If you have people willing to support you, then you shouldn’t say no.
Business credit is a great choice only if you use it strategically to grow your business with credit and funding. This framework will help you create your ideal e-commerce business with ease.
Want to get started with Business Credit for your Online Business?
Business Credit and Real Estate
I am Ghanaian Body building nerd who Loves Teaching about Business Income, Business Credit and Real Estate!