Fernald Business Association

Business owners know that to run a business requires a ton of financial know-how and money. That money often comes in the form of credit loans, but only if the business has a good credit rating. When you first start a business, and before you incorporate it, your business credit will be the same as your personal credit. However, once you start to get serious about establishing great business credit, you’ll realize you want to separate the two. However, how do you start building a credit history for your business, without any loans under that name? That’s where you have to do some careful planning to make sure everything you do go towards building the best credit history for your business that is possible. Here are a few steps to follow.

1. Incorporate First

Once you have a business name and have chosen the type of business you’ll run for incorporation purposes, you’ll have successfully started the process of separating your personal credit from your business credit.

2. Write a Winning Business Plan

Next, you are going to have to convince others that your business is a winning proposition. Whether you are going to approach angel investors, family, or a bank, having a well-written business plan will help you to appear more professional and give you credibility. It will show you’ve done your homework and that you are serious about doing business.

3. Find Suppliers Who Will Provide Credit

If you have a good personal credit history, finding suppliers who are willing to work with you and put you on a payment plan for supplies for your business can help you to establish your business credit. Make sure they report this credit to the credit bureaus.

4. Obtain Credit Cards in Your Business Name

You can also pick up a few business credit cards to use when you make purchases. Make sure you repay the balance promptly and on time to maintain a good credit history. Do all the things you would do with personal credit history to help keep a good credit score for your business.

5. Get a SBA-backed Loan

If you can’t find angel investors to help you get credit for your business, seek out SBA-backed loans for new business owners. You will get great rates, and it will show up in your business credit history.