Business Credit: The Gateway to Financing
If you are in need of financing or were recently denied financing, building up your business credit will be advantageous. It is a primary cause for denial for financing requests. Some of the top ways to establish your credit and receive financing include separating your personal and business numbers and bank accounts, paying your bills early or at least on time, and making sure you are listed on Dun & Bradstreet. Following these three simple tricks will help to establish your credit and drastically improve your odds of obtaining financing.
Separate Business and Personal Accounts and Numbers
Separating your personal and business numbers as well as bank accounts will be beneficial when trying to establish your credit. Establishing two separate bank accounts will help you keep your finances separate. When it comes time to apply for financing, lenders will look at your business account bank information to make the approval or denial decision as opposed to your personal information. When attaining a new number for business, you can consider using your current phone or landline.
Paying on Time (or Even Early)
Additionally, making your payments on time should always be a priority, especially when trying to establish business credit. Unlike personal credit which allows multiple weeks to pay before your credit is effected, business credit has to be paid early in order to receive a 100 Dun & Bradstreet PAYDEX score. Dun & Bradstreet is a top credit bureau.
The Importance of Dun & Bradstreet
Before ensuring you are listed on Dun & Bradstreet, make certain your company is legally established. This can be accomplished though setting it up as an LLC or S-Corp. In order to determine which option is best for you, it may be wise to consult a tax advisor. Once it is put on the map, you can verify your business is listed on D&B. This is important because of the PAYDEX score which is used on trade credit applications. If you are not listed, you can register for free and it will certainly be worthwhile.
The gateway to obtaining financing is to establish business credit. Luckily, there are multiple ways to go about doing this including separating your personal and business numbers and bank accounts, paying your bills early or at least on time, and making sure you are listed on Dun & Bradstreet. Through following these tips, you will be able to obtain the necessary financing to either fund your business or continue running it.