When you first start your business, you likely rely on your personal finances and credit score to qualify for loans and funding. Though this is normal, it’s not the most practical way to continue growing your company. Instead, you need to build business credit so you can leverage your company’s financial strength rather than relying on your personal finances. If you’re not sure how to start, you’re not alone. Building credit for your business takes time and determination. Here are a few simple ways to speed up the process.
Work With Vendors and Suppliers
One of the easiest ways to build credit is to work with the vendors and suppliers you’re already familiar with. These companies understand your business’s needs and should have faith that you’ll be able to pay them on time based on previous shipments and orders. Let them know that you’re trying to build credit for your company and see if they’d be willing to help. Most will offer short-term financing deals on certain services and products. As long as you pay them off in full by the end of the term, you’ll build a solid and reliable credit history that your business can use in the future.
Open a Business Credit Card
If you don’t have a network of suppliers you can work with, another great way to build credit for your company is to open a dedicated business line of credit or credit card. These credit lines are available from most standard banks and credit unions and allow you to make purchases just like you would with a personal credit card. As long as you pay the credit line off, you won’t pay interest on the funds you use. This makes it easier for you to keep track of your business’s expenses while also giving you more flexibility than you’d find with a traditional loan.
Discuss Your Options With Service Providers
Believe it or not, your cable, internet, phone and utility providers are already helping you establish business credit. They’re giving you services and expect that you pay them after they send you the invoice or bill. Since you don’t pre-pay for their services, the agreement functions much like a traditional line of credit. As long as you pay the bills on time and in full, you’ll build a solid credit history.
Building credit for your business is possible. It just takes time and determination. Try these methods for yourself and see how easy building credit can be.