Small Business Lending Information
It can often happen that you successfully started your small business without requiring any financing but later on find, as the small business begins to expand, that you require some form of bank funding but are unable to secure it due to having a poor personal credit history. If you are aware that your personal credit history is less than stellar it is important to establish your small business with its own credit history independently.
The first step to achieving this is to completely separate all your small business loans from your personal accounts and expenses. By having the business operating completely independently with its own accounts preferably at a bank you have never done business with personally you start to establish it as a separate credit entity.
To ensure the business is a separate legal entity, obtain a tax ID number for it and use this when conducting all transactions for the business. This includes putting all bills in the businesses name such as utilities, internet and telephone and using the tax ID number as the identifier not your own social security number.
The first step to achieving this is to completely separate all your small business loans from your personal accounts and expenses. By having the business operating completely independently with its own accounts preferably at a bank you have never done business with personally you start to establish it as a separate credit entity.
To ensure the business is a separate legal entity, obtain a tax ID number for it and use this when conducting all transactions for the business. This includes putting all bills in the businesses name such as utilities, internet and telephone and using the tax ID number as the identifier not your own social security number.
Fast Business Loans
The next step is to obtain small amounts of credit in the small business’s name such as small credit lines with your suppliers by using your businesses tax ID when doing so and provided you are able to keep these supplier accounts in good standing through prompt payment, a good credit rating for your business will start to develop.
Once you have taken all these steps and after at least six months and preferably longer, it may be possible to apply for short term financing on your small business accounts such as an overdraft or small line of credit. You can also seek to obtain a business credit card with a moderate limit and keep all these credits in good standing. By completing this kind of forward planning you will be able to avoid your own personal credit history ever really affecting your business and you will be set up for obtaining larger financing should the need arise.