did you see this? Someone posted this info online. Doesn't hurt to check it out!!
The Story
Establishing business credit is tough, especially for a new business. But remember: It CAN be done, and it's easier than you think. Follow these steps, and you'll be on your way to an excellent credit profile.
For most you of you have completed steps one and two, if you have not please done so.
1. Set up a C or S corporate business. These are smart to protect yourself, and these corporation structures are the only type of business structure that allows you to keep your business credit and personal credit separate. Limited Liability Corporations (LLC's) and Sole Proprietors are okay for contract work or property investment, but you still should get a C or S-Corp to manage them.
2. Get your EIN through registration with the IRS. It is free and can be completed online. You will also receive your EIN the same day.
http://www.irs.gov/businesses/small/article/0,,id=98350,00.html
3. Set up your business phone. You will need to make sure it is at an address not the same as your home (because it is not looked upon favorably by the lending world, but if you don't have a choice it's not a real problem) and the phone will need to be registered in the 411 directory. Quite a few have had success with calling the local phone company and getting a call forwarding number. It is a business number that automatically forwards to any desired phone. Make sure it will list with 411 before signing up however.
4. Get your Dunn & Bradstreet number. If you want to establish credit sooner pay for the Dunn and Bradstreet Credit Builder basic plan. This a service that assigns a D-U-N-S Number to your company, builds a full credit profile, and assigns a basic set of D&B scores and ratings that potential business partners can view. This well worth the $329.00 At this point will immediately be able to get small lines of credit. (
http://www.irs.gov/businesses/small/article/0,,id=98350,00.html). After you have at least 5 business trade lines or business accounts reporting, you receive a paydex rating (Paydex is similar to FICO as for personal credit).
5 After receiving your first phone bill, go to
http://www.staples.com/ and fax in copy of application along with copy of phone bill to apply for business credit. Use professional letterhead for coversheet. You should receive the standard $750 credit line with no personal guarantee (herein referred to as "PG").
*REMEMBER - a paydex score will only take into account your payment history. Unlike personal credit, this is counted in days. For example, if you pay your invoices 14 days late, it will be reported as such. If you pay your account off before the statement or invoice comes, it will be reported as such. The bottom line: Pay your invoices on time, and you will get a better paydex score.
6. Set up the following business accounts, and make at least one purchase, you want to pay this off BEFORE the first statement hits:
a) UPS -*
http://www.ups.com/
b) FedEx CONTACT Revenue Services Department 1-800-622-1147 press 4 then 1
c) Barnes & Noble CONTACT Purchase Order Department 1-212-414-6000
d) Quill Corporation, CONTACT Credit Department 1-800-634-3090
e) Viking CONTACT Credit Department 1-888-454-5457
f) Rapid CONTACT Billing Department 1-800-257-5287
g) Nebs -*
http://www.nebs.com/
h) 11. Office Depot*
http://www.officedepot.com/* apply online
7. Need a cell phone? Once you have an EIN and D&B# apply for a business account. Usually T-Mobile is the easiest to get credit with. Yet with all the cellular company competing for business market, I've heard that Sprint, Cingular, and Verizon are easy to get as well. Nextel? Good phone, but you have to jump through a lot of hoops, and you usually have to put down a deposit. It will take at least 30-45 of use and the following companies will automatically report to D&B creating your business file:
8. Once you have a paydex score of 75+, you can apply for Lines of Credit (herein referred to as "LOC") or business Credit Cards without any sort of PG.
Most companies will not ask to see financials for loans of 50k or less.
I hope this helps, and I wish the best of luck to you in your pursuit of credit
Keven Alexander & Associates is a professional accounting and consulting firm providing comprehensive resources and high quality services designed to help move your business forward.
From tax returns to audits to strategic planning, we're a full-service firm serving clients across the Southeast. We also provide optional services to help you stay current amid changing rules and regulations. Looking at your business' big picture, we are available at your request to assist in assessing your financial goals and developing plans for reaching them.
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Our coalition of industry consultants, specialists and accountants work independently and, as necessary, together when a client needs more than one expert to get a job done.
The jobs may vary, but the quality of Keven Alexander & Associates' work remains the same. Through our Quality Control division, we have established performance standards that we maintain to ensure that the only product that leaves our desk is the best product we can create for our clients. From financial statements to tax returns, we meet the standards of our profession for excellence.
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