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Owning a new business is exciting. You’re making money, hiring people, and moving up in the corporate world. One thing that may not be as exciting is trying to take out a business loan.
You may hear the dreaded words, “you need more business credit.” Have no fear though because there are lots of ways in which you gain credit as a new business. It’s just a matter of knowing HOW.
Business credit is important for a new business because you may need to purchase equipment, pay employees, marketing, and so much more. A lot of businesses depend on small or large loans to help them make it through.
Here is how to gain credit as a new business…
Look into getting a DUNS number
If you’re going to gain credit as a new business, then you really need a DUNS number. This number is issued by Dun & Bradstreet. You can also look at it as a business profile for your credit. Once you sign up for this number, it will give your business a little more street credit.
Grab an employee identification number
As you can see, this number this is pretty big business whenever you’re trying to gain credit as a new business. The only entity that can give you an EIN number is the IRS. Essentially, all business numbers get an employee identification number to help identify them in their business.
Put some money in the bank
When it comes to a business, it’s always good to show you’re making some sort of money. You can do this by putting some money in the bank. When you go to the bank to open up an account, your business account should always be separate from your personal account.
You shouldn’t have any problems opening up a business account if you have your DUNS number and your EIN. Of course, adding money to your account is always a good thing, don’t forget that.
Open up utilities in the name of your business
One thing you will want to do, when trying to gain credit as a new business, is opening up utilities in your business name at your business address. A few things you can put in your name utilitywise, include:
- A phone number
- Rent in the name of your business
As you can see, there is a lot of opportunity to get your business credit up and running!
While a phone bill and utilities aren’t hardcore evidence you’re a good business owner, it’s a good start. Banks just want to see that you are committed to making payments.
If you’re committed to making payments and building your business credit profile, then you will be able to do this in no time!
Start a small loan request
If you go straight to the bank and ask for a $100,000 loan and you’re new to it all, it’s probably not going to go down very good. Instead, start small! Once the bank sees that you can pay this back, it’ll open up more opportunity for more credit down the road.
It’s not uncommon for big businesses to borrow up to $500,000. It’s important to remember that you do have to pay this back, so don’t bite off more than you can chew.
Always pay your loan on time
If you’re going to take out a loan in the name of your business, then you need to make sure you’re paying your loan on time. If you anticipate your business lasting a long time, you’ll want to be in good standing with your creditor.
This is also a good reason to take out a small loan because you want to make sure you can pay it back! Your business will grow bigger and you’ll be able to take out more money as time goes on.
Keep at it
You can continue to build a positive business credit profile by paying on time, even paying it off if you can. Keep at it and don’t give up! Growing a business is a lot of work, but a lot of times, loans can help you grow even bigger and give you a leg up with the competition.
Keep up with your business credit profile
One thing you can do to help your business is to keep up with your business credit profile. It’s not always the first thing you want to do, but monitoring it can really help you build that credit score up, up and up. Head to Experian to get a business credit profile.
You can always head to Crediful.com to get more tips on building up your credit from scratch. Remember that your personal credit and your credit for the business are two different things! How have you taken the time to build up your business credit score?