Can Shelf Corporations Help You Establish More Business Credit?

In the past, it was suggested to people who were brand new in business that if they wanted large lines from banks or from credit cards and they were brand new, didn’t have any history, that they get a shelf corporation. That was a possibility.

Many people in the past have purchased a shelf corporation that has at least 2 years, and that was the key. You didn’t need to go purchase a 5-year, because a 5-year will cost more than a 2-year. The key was 2 years. That’s what the bank looked for in the past.

The reason that was is, last year and the years previous to that, the banks simply would go to the Secretary of State and see the incorporation date of that corporation. That’s the only criteria that they used to establish the age of that corporation. If you bought a corporation that has been sitting on the shelf for 2 years, they considered you 2 years old.

Nowadays, the banks may do that to consider the age of the corporation, but they’re also going to ask for a tax return or a business license or something that shows that you’ve been in business 2 years, if you’re saying you’ve been in business.

Because of this it is not recommended to spend the money to go purchase a shelf corporation for credit-building purposes.

Now there may be some other things that your accountant or attorney may tell you that you may want one for. But for credit-building purposes, unless you can provide documentation to go along with that 2-year corporation, it is not necessary to spend the money on a shelf corporation.

For more information on increasing your business credit, read on! Increase Business Credit.

About The Author: Scott Letourneau is the CEO of Fast Business Credit, Inc. When it comes to securing cash and vendor lines of credit and avoiding costly mistakes his company is the authority. For further assistance regarding the development of business credit go to or call FBC at 1-888-313-6333 or 702-977-5246.