Getting the Business Credit You Deserve

Getting the business credit that you deserve as a business owner, particularly a new entrepreneur or start-up business, requires a proactive approach. Establishing business credit, in the form of loans, lines of credit and other borrowing is essential to a business owner in order to purchase equipment and make the necessary investments to grow the business.

Understanding a Business’s Credit Rating

Obtaining business credit begins with an understanding of the business’s credit rating. As a sole proprietor or single-owner business, the business credit rating is the same as the owner’s individual credit rating. A business owner with a lower credit score will find it harder to obtain credit versus owners that have a higher credit rating.

Managing Credit – Individual Owner

Managing the personal credit of an individual business owner is important in order to obtain the necessary business credit to be competitive.  A business owner should diligently check their credit reports and make any necessary corrections or changes as items appear that are either erroneous or false in order to protect their credit standing and get the business credit.

Managing Credit – Business Entity

For businesses that are corporate entities, business credit is measured via their DUNS number.  This number issued through Dun & Bradstreet Corporation, a financial rating company, is required of business performing transactions for a governmental body such as a city or the federal government. Banks and other lenders to determine the number of lines of credit that are open as well as the contracting and other financial history of a company use a DUNS rating.  This information helps a lender determine the creditworthiness of the business and helps a business obtain their deserved credit.

Create Opportunities for Bureau

A business should discuss their credit options with a lender, such as a bank,  and establish methods that help start a good credit history. This may include taking out small personal and business lines, opening credit card accounts and performing other borrowing necessary to demonstrate the ability of the business to take on debt and repay loans when due. The length and duration of these loans do not need to be long and do not have to entail large amounts of borrowing. Establishing a track record through a borrowing history is sufficient for most lenders to extend additional lines of credit that are larger and help a business meet its needs.