Building business credit is a must in today’s economy. Let me ask you this question; how do you financially check out a company (if they are private)? Can you call the IRS and get their last three years tax returns? No. Can you call the bank and pull their last three months of bank statements? No. But you can spend $40 -$130 at Dun & Bradstreet® and pull a business credit report on your next vendor, joint venture partner, supplier or customer and check them out first.
That also means someone can do the same to your company. Did you ever consider that? Could you be losing customers, clients and opportunities because you appear financially naked with your competition? Meaning, why not invest $40 and pull your own report and see what others see? What message are you sending? Do you have any report at all? Most companies may not or may have very little reported.
Now, you realize even more that it is critical to develop your business credit profile with D&B®, Corporate Experian® and Corporate Equifax®…with vendor and trade lines of credit. That will put your business in a better position to qualify for cash lines of credit down the road.
With all that being said, what do you look for when it comes finding a company that builds business credit? Like any industry, there are exaggerations all over the place and in this economy you can only imagine how a company that “claims to build business credit” can easily prey on struggling small business owners who are desperate for a solution.
Here is a list of criteria to use before you invest any money with a business credit builder program (most will apply to almost any service):
- How long has the company been in business, 5 years should be minimum.
- Who is the main person, CEO or owner behind the company? Do they hide that on their website or make it clearly visible. Stay away from companies who attempt to hide who is really behind the company. Odds are there is a reason no one wants to come forward with their profile and background.
- Check out their BBB (Better Business Bureau rating). Even though it is fairly easy to have a good rating, a bad one is not good.
- Does their company have any business credit? Pull a D&B® report on them.
- Do they exaggerate claims? Any time you hear “we guarantee $100K of CASH LINES” (NOT VENDOR CREDIT) within 45 days…you need to ask more questions. How is that possible for a new business owner? Yes, if you have been in business for 2 years with $300K per month with credit card sales you will get the $100K you need. In 90% of the other cases that is not true.
- Understand the difference between a vendor line of credit (for supplies) and a cash line of credit (access to the cash immediately) and what is being promised.
- Find out the time frame for results in your situation. Does it sound realistic?
- What amount of work is required on your part to get results? Do you have to fill out vendor applications? How much time is involved?
- Check their company outline online. Keep in mind if any company has been around for years, you will always find some negative comments about them, but you should not find dozens of complaints, rip off reports…online (there may be one or two).
10. Look for testimonials or referrals of the program working.
In summary, use these criteria to plan to get on a great business credit builder program soon to help your business obtain more customers, clients and business by having a strong financial foundation when your company is checked out (even when you do not know about it)!