Sometimes getting
started with business credit can be difficult. Business owners, when first
building credit, sometimes feel forced to settle for business credit cards with
less-than-desirable terms and then discover those credit cards aren’t even
reporting to the business credit bureaus.
Perhaps this is why it is reported that as many as 41% of small businesses rely on their personal credit cards instead. But using personal credit isn't good for your business in the long run, so business owners should consider the other options available to them.
Twenty percent of small businesses rely on credit cards for one purpose or another. How can a business that is just getting started with business credit get off on the right foot with the right business credit card?
The best advice is often the most simple:
1. Build business credit. Use vendor credit as much as possible. Utilize other business credit building tools so that you'll be able to get approved for better credit terms as soon as possible. THE KEY HERE IS TO MONITOR YOUR CREDIT AND ENSURE THE VENDORS YOU ARE USING ARE REPORTING YOUR POSITIVE PAYMENT HISTORY.
2. Plan for higher interest rates. Higher interest rates are not the end of the world, especially when you consider that the condition is only temporary!
It is not uncommon in the consumer credit market for a person with no credit to start out with a 20% or higher APR credit card. This is acceptable because it's temporary.
The same thing applies to business. With patience, time, and careful management of your business credit, you will eventually be approved for much better rates and much higher credit limits.
3. Don't shy away from offering a personal guarantee.
Again, offering a personal guarantee or using your personal credit to win credit approval for your business may not seem like the best case scenario. But it's a stepping stone; a building block. You've got to start somewhere, and this is a common place to start.
Remember that "A journey of a thousand miles begins with a single step." Your first steps into business credit are just that: first steps. The only way to get down the road towards the BEST business loans and credit cards is to take the steps that will eventually lead you in that direction.
Please 'Like' our Facebook page and get more information on building business credit so your business can start qualifiying for much higher financing amounts and at better terms than using your personal credit.
Perhaps this is why it is reported that as many as 41% of small businesses rely on their personal credit cards instead. But using personal credit isn't good for your business in the long run, so business owners should consider the other options available to them.
Twenty percent of small businesses rely on credit cards for one purpose or another. How can a business that is just getting started with business credit get off on the right foot with the right business credit card?
The best advice is often the most simple:
1. Build business credit. Use vendor credit as much as possible. Utilize other business credit building tools so that you'll be able to get approved for better credit terms as soon as possible. THE KEY HERE IS TO MONITOR YOUR CREDIT AND ENSURE THE VENDORS YOU ARE USING ARE REPORTING YOUR POSITIVE PAYMENT HISTORY.
2. Plan for higher interest rates. Higher interest rates are not the end of the world, especially when you consider that the condition is only temporary!
It is not uncommon in the consumer credit market for a person with no credit to start out with a 20% or higher APR credit card. This is acceptable because it's temporary.
The same thing applies to business. With patience, time, and careful management of your business credit, you will eventually be approved for much better rates and much higher credit limits.
3. Don't shy away from offering a personal guarantee.
Again, offering a personal guarantee or using your personal credit to win credit approval for your business may not seem like the best case scenario. But it's a stepping stone; a building block. You've got to start somewhere, and this is a common place to start.
Remember that "A journey of a thousand miles begins with a single step." Your first steps into business credit are just that: first steps. The only way to get down the road towards the BEST business loans and credit cards is to take the steps that will eventually lead you in that direction.
Please 'Like' our Facebook page and get more information on building business credit so your business can start qualifiying for much higher financing amounts and at better terms than using your personal credit.
Expert
Credit Consultants, LLC specializes in establishing business credit and funding
using our exclusive Business Credit and Finance Suite as well as consumer
credit restoration and optimization services. www.ExpertCreditConsultants.com.
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