Many people tend to start a business and apply for business credit. However, there are three primary reasons because of which they fail in building their business credit without even noticing it.
- Non-Credible: The first of the three reasons is a business not being set up in a credible manner to earn Business Credit Score to impress the lenders. Knowing that the perception of creditors, vendors and lenders towards the business is extremely critical to get investors. Any business that wants to claim business credit, must make sure that it exceeds or at least meets all the credibility standards of the lender. This means the business must have a legal business name. It should be the same in bank statements, licenses and corporation papers. There has to be the tax number as per the local tax rules. The business address must belong to a real building, better if the building is a business hub. The phone number should be registered to the business and it should appear the same under the online searches. The physical office details and contact details must appear on the official website and there has to be a business email.
- Social Security Number: It is excellent and a must when applying for the personal credit, but not when going ahead and getting a business credit. The SSN gives a complete financial background of the individual to the credit company and then if there is an issue pertaining to the same; the business credit cannot be a possibility anymore.
- Wrong Order: Applying for the credit in a wrong order is definitely a killer to the business credit perspective. The report for business credit can be commenced in the same manner as a report for a consumer is created; with small account credit cards. Any business can get approval for small credit card to assist in building the initial profile for credits. Such initial cards in business terms are known as “vendor credit” or commonly known as “small credit.” Business Accounting will explain the proper order and how to arrange them.
Avoiding the above three situations and sorting out their solutions is the best way to go ahead to get the business credit approved. A bit of extra time may go in the preparation of the much-needed paperwork and profile building, but it will help in getting the required amount of credit in the end.