Business Credit
Business Credit, sometimes referred to as Trade
Credit, is credit that is established under a
businesss name.
Business credit permits a business owner to use
their business credit profile and score for financing
not their personal credit score and profile.
One of the reasons business credit is so appealing
is that business owners can commonly qualify with
no personal-guarantee (PG).
This means business owners can access cash for
their businesses without the personal liability.
Another reason business credit is a great resource
for business owners is that there is no personal
credit check with many sources.
So, even business owners with challenged credit
can be approved for thousands of dollars of credit
for their businesses.
To qualify for most business credit sources
the business must have a positive credit score
established with the appropriate business credit
reporting agencies.
The two most commonly used business credit
scores are the Paydex score from Dun and Brad
Street and the Intelliscore from Experian.
Once a positive business credit score is established,
many merchants will then approve the business
owner for credit in the businesss name.
Thousands of major merchants offer business
credit. But most dont promote their business
credit programs, so they are difficult to locate.
Some merchants offering business credit include
Chevron, Dell, Staples, and Lowes.
Once business credit is established and paid-as-agreed
the business credit scores will continue to
increase.
As more positive credit history is established and
scores increase, business owners can then be
approved for even more credit with higher credit
limits.
Business credit is an outstanding resource for
businesses.
Owners can obtain credit to run and expand their
businesses without the personal liability of using a
personal guarantee.
Many people who are in the start-up phase of their business dont think about building personal credit so it makes it harder to get a loan. Others who have established businesses may have had capital in the beginning but dont have the same resources and need a bigger loan now. So establishing business credit for start-ups or established businesses is the smartest thing to do.