By Scott Letourneau, CEO of Fast Business Credit, Inc. & Nevada Corporate Planners, Inc.
What is business credit, and how do you build a Business Credit Asset?
There are three primary tasks to create a business credit asset.
Step 1: Establish your business as being credible with major credit agencies.
Businesses must comply with the corporate guidelines established by agencies and financial institutions, including Dun & Bradstreet® and Corporate Experian®, in order to establish credit. These agencies want to ensure that the entity is a real business and require that it be incorporated (LLC, S Corp or C Corp), have a physical address, a valid phone number, a website and other limited guidelines.
Step 2: Create a credit file.
Once compliance is established, then an actual business credit file is created. The file establishes a unique profile with D&B® and Corporate Experian® to facilitate the tracking of credit history and the development of a business credit score. In the case of D&B®, a PayDex score is the assigned numerical evaluation of a company or organization’s credit-worthiness.
Step 3: Build a business credit history.
After a credit file is established, the business has the opportunity to build a credit history by working with credit and financial institutions who report to D&B®. Approximately 10% of all credit and lending institutions report to D&B®, so it’s critical that a business owner is properly guided through building a business credit history that maximizes access to credit and lending – while creating the strongest credit score possible.
The business credit score is analogous to a personal credit score except for one fundamental issue — the business credit score is not limited by the personal credit limits that are established for all consumers.
About the Author: Scott Letourneau is the CEO of Fast Business Credit, Inc. & Nevada Corporate Planners, Inc. Over the past 15 years NCP has assisted more than 5,850 business owners form LLCs and corporations to get their business off to a fast start to profits™! Since 2003 FBC has helped business owners secure cash and vendor lines of credit and avoiding costly mistakes. For further assistance regarding the development of business credit for your business call Fast Business Credit, Inc. at 1-888-313-6333.