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    13 Replies Latest reply on Sep 15, 2011 10:46 AM by phanio

    New Company Business Credit

    Newbie

      Does anyone know a good way to get credit for a new company?

        • New Company Business Credit
          PiperE Wayfarer

          Google "ways to fund a business" or similar term and you will find more hits than you can ever read. Most of them will say the same thing like, use your retirement account, borrow from family and friends, use the equity in your home (Ha!).

           

          From your question I assume you do not have the down payment to qualify for an SBA loan. You can try starting your business on a shoestring, but if your business is a manufacturing or something requiring a large investment in equipment, that is not a viable option.

           

          Be very careful with any company that says they can get you financing using business credit and ask for a deposit up front. It is a great way to lose money before you even start your buiness!

           

          Good luck!

            • New Company Business Credit
              Newbie

              I already have a business started... Im looking for a way to build business credit for credit cards without using my personal credit.

                • New Company Business Credit
                  KathleenF Scout

                  Small short term purchases with local suppliers.

                   

                  Anyone else?

                  Kathleen

                    • New Company Business Credit
                      Newbie

                      So youre saying something like leasing office equipment?

                        • New Company Business Credit
                          KathleenF Scout

                          Yes!  I would think short term credit purchases such as office equipment or supplies would give you references when going for a higher level loan.  You would be able to show your payment history and line of credit.  Don't do too much! 

                           

                          Kathleen

                            • New Company Business Credit
                              Newbie

                              Hi, I have a question not a reply and am new to the web site. How can you build a business credit on a business you do not own yet. I have an underwriter telling me to hook up with Dun and Bradstreet to build a business credit but they say you can not do this if there is no dba attached to your LLC. I am so frustrated I could pull all my hair out. Any help would be great.

                                • New Company Business Credit
                                  PiperE Wayfarer

                                  In my last life I knew people who built business credit for a price and I studied it thinking I would get into the biz. Unfortunately, with the credit markets VERY tight, building business credit is not the easy task it used to be. The people I knew, could no longer build it.

                                   

                                  You need to own the business or have access to information about the business to apply for a D and B number (not a DBA, which is a ficticious name registration, totally different). If you do not own the business how could you have access to the credit?

                                   

                                  Are you trying to build credit for your LLC in which there is  no actively operating business? That is different and you can develop business credit, however without assets and/or evidence of revenue over the last 2 years, the amount of credit you can get is minimal.

                                   

                                  If you Google "developing business credit" you can find a world of free information on how to do it. There are still a few companies that will give business credit with no personal guarantee, but it is rare and the credit limita are very low.

                                   

                                  So go research it. And do not pay anyone up front to do it for you... they can't. I know.

                          • Re: New Company Business Credit
                            phanio Pioneer

                            If you are trying to build business credit to get around poor personal credit - it will not work.  Banks and other lenders - even credit card companies know these tricks.

                             

                            I have banked multi-million dollar businesses and always pull and use the personal credit histories of the owners or major shareholders.  It is just the way it works.

                             

                            Lenders what to get repaid and they will always place a personal guarantee on any loan or credit facility.  Thus, they will always pull your personal credit.

                             

                            Business credit can help you get say trade credit from your suppliers or maybe a small $200 in store charge card with a office supply company - but, when it comes to lines of credit (credit cards) or standard business loans - they will want that personal guaranatee.

                             

                            Now, having strong business credit may or may not help your funding deal - having bad business credit will surely hurt it. 

                             

                            If you have poor personal credit - work to fix it instead of trying to get around it.  Much better for the long-run viability of your business.

                            If you just don't want to use it - I suggest you reconsider as that is how this market works.  Use it temporarily to grow your business to the point that you no longer need outside capital.

                             

                            In regard to some of these other posts that say they used business credit to get a business loan - ask them if their personal credit histories were also pulled and which one was used for the decision.  I can quarantee you - having spent over two decades in the industry - that no true lender will rely only on business credit.  We never use it!

                          • New Company Business Credit
                            Wayfarer

                            Let's use the term "credit" loosely. I assume you are looking for capital for your new business. If you can't obtain "credit", you can still obtain funding by:

                            Factoring Accounts Receivable

                            Factoring Future Card Payment Cash Flows (known as a Merchant Cash Advance)

                             

                            In regards to PiperE, there are ways to build credit by paying for it. When I organized an LLC many years ago, I was offered to do the following to establish credit: I paid the company $500, they then extended me with a $500 credit line and I made payments on it every month. They reported this to the credit bureaus as a loan and voila! business credit was established. I was able to obtain a business loan a year after that.

                            • Re: New Company Business Credit
                              Norm Newbie

                              Visit this site: AccountClient.com They feature articles on how and what cards or credit to get. And no, it is not my site, but it is good nonetheless.

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                                      • New Company Business Credit
                                        KathleenF Scout

                                        Hi cijohn82,

                                         

                                        Unfortunately, I have removed your content from this thread.  This is not the appropriate place to be seeking clients for their funding needs.  While we appreciate your interest we have no way of confirming if infact you work for the company referenced. 

                                         

                                        Thank you for your interest and we do hope you can help members with the general information on funding and acquiring capital through explaining the processes.

                                        Kathleen

                              • New Company Business Credit
                                Wayfarer

                                I am a business banker and work with folks like yourself all the time.

                                 

                                First, register your company with Dunn & Bradstreet for free ASAP if you have an EIN number.  Then, get a business credit card that uses your EIN number and your SSN if needed.  This is for companies that are less than two years old.  Leasing is a great option but do look at your bank first because the rates are much better than other leasing deals.