Building Business Credit: 20 Steps to No Personal Guarantee

Business Credit No Personal Guarantee

Building Business Credit

 

While obtaining business credit cards, small business loans and a business line of credit is the common objective for many small business owners there is a growing demand for learning how to qualify without having to use personal credit or a personal guarantee.

I’m happy to see that more and more business owners are embracing the idea of completely separating your personal credit from business credit. Many of our new members were never aware of the danger that co mingling the use of credit profiles for personal and business can jeopardize the protection of the corporate veil plus limit the amount of funding their business can obtain.

 Here are twenty steps to building corporate credit without using a personal guarantee. Please note that I’ve used examples from my business credit building system.

  1. Incorporate your business and obtain a Federal Tax ID#- your Tax ID number will be the number that identifies your business and information. It’s just like how your social security number will identify who you are for personal credit.
  2. Complete corporate conformity (411 listing, verifications, business license, etc.) –vendors, lenders and banks will do their due diligence prior to extending credit to your company. Don’t expect to receive credit by skipping these key fundamental steps.
  3. Select the right business classification codes – avoid selecting codes that will trigger a red flag with the business credit bureaus and lenders. This can stop your business credit building efforts dead in its tracks.
  4. Set up a complete profile with Dun and Bradstreet – Simply obtaining a DUNs number doesn’t cut it you will need to furnish additional information on your profile to give creditors a complete picture of your business. Remember there are companies like First Equity that offer no personal guarantee business credit cards but by invitation only. They purchase targeted lists from the business credit bureaus which you want your company to be on.
  5. Add existing positive trade references – if you have existing trade references to add to your file then you may want to consider using DNB’s business credit builder program which allows you to add your own references but keep in mind there are certain references they will not accept.
  6. Apply for vendor lines of credit – obtaining vendor credit can be simple and some suppliers even specialize in extending credit to startup companies or businesses with no credit at all. The key though is applying for credit with vendors that report each month and report the true credit limits your approved for. Keep in mind that we provide these to you as a member of our Business Credit Insiders Circle.
  7. Pay invoices ahead of the due date – you can increase your paydex score to 90 or higher by simply paying your invoices 10-20 days ahead of the due date. A big plus on your files!
  8. Build solid payment history – while account types and trade lines are a factor keep in mind that a payment track record is the final ingredient. Don’t think that one paid invoice will make your business capable of acquiring no personal guarantee credit lines or credit cards.
  9. Monitor your business credit file – a no brainer and a good habit to adopt for your personal files as well.
  10. Get listed with multiple business credit bureaus –target specific business credit bureaus that cater to your industry on top of the big three.
  11. Set up a small business bank account –before selecting a financial institution for your banking make a list of the financial products you may need. Consider a credit union or community bank because they are much more flexible in today’s economic environment.   
  12. Establish a minimum ‘low 5’ bank rating – establish bank credit with your small business bank account.
  13. Obtain secured business credit cards
  14. Open a small business credit line
  15. Establish a diversity of credit – build a strong business credit rating by obtaining different account types. This includes trade credit, revolving credit, loans and leases.
  16. Keep proper financials
  17. Establish a well written business plan – A business plan is your blueprint that outlines every necessary component for the success of your business. Enough said!
  18. Maintain personal credit scores at 680+ – when applying for no personal guarantee credit a lender or creditor may still require a personal credit check.
  19. Build large trade lines with multiple tiers of credit –you can request for a credit limit increase usually after six months of good payment history. Before applying for larger tiers of credit be sure to know what the requirements for approval are.
  20. Stay informed! – join forums, social networks, read articles, subscribe to blogs and consider joining memberships like the business credit insiders circle.

Following these steps will provide your business opportunities to establish business credit in the name of your business while protecting your personal credit and personal liability.

Ready to start building your business credit? Become a member of my Business Credit Insiders Circle and gain access to a proven step-by-step business credit building system. A system that provides you access to vendor lines of credit, fleet cards, business credit cards with and without a PG, funding sources and lenders that report to all the major business credit bureaus. Submit your name and email below for details and receive a free audio seminar ($597 value) =>

 

Marco CarbajoMarco Carbajo is a business credit specialist, author, speaker, and founder of the Business Credit Insider’s Circle. He is a business credit blogger for All Business.com, a subsidiary of Dun and Bradstreet and author of “Eight Steps to Ultimate Business Credit”. His articles and blogs have also been featured in American Express Small Business, Business Week, The Washington Post, The San Francisco Tribune, Resource Nation, Scotsman Guide, Alltop, Entrepreneur Connect, and Active Rain.  

Comments

  1. says

    I recently came across your blog and have been reading along. I thought I would leave my first comment. I don’t know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

    Alisha

    http://pay-dayadvance.net

  2. says

    Thanks for taking a few minutes to debate this, Personally i think strongly about this and love learning more about this topic. When possible, while you gain expertise, would you mind updating your blog with an increase of information? It is extremely helpful personally.

  3. says

    Thanks for the feedback Weldon. I post twice a week so be sure to subscribe to my feed so you get the latest information.

    All the best,

    Marco :)

  4. says

    Hi Marco, this is really great that I found the Business Credit Insiders Circle. I want to learn more about establishing business credit without a personal guarantee.

    Thanks for the info!
    ==================
    Smith

  5. says

    Wonderful post and excellent resources, I simply passed this onto a colleague who was in search of this info. I’ve you bookmarked on Digg too!

  6. says

    Hey Marco, I have been a reader for a long while, but this is my first time as a commenter. I just wanted to say that this has been my favorite post of yours! Keep up the great work and I’ll keep on coming back.

  7. Sherise Veteto says

    Thank you very much for posting this great information! Looking forward to checking out more!

  8. says

    Please, keep up the excellent work and continue to post topics like this. I am really a fan of your site!The steps you outline here are truly priceless for small biz owners.

  9. says

    I have been a reader for a long while, but this is my first time as a commenter. I just wanted to say that this has been my favorite entry of yours! Great tips and resources that will definitely come in handy. Keep up the great work and I’ll keep on coming back.

  10. says

    I was very pleased to find this site. I wanted to thank you for these great steps for no pg biz credit. I’m definitely enjoying every little bit of it and I have you bookmarked to check out new stuff you post.

  11. says

    I apparently have REALLY bad credit. My lease is up at my apartment and I am looking to move. I put in an application for an apartment today and was denied because of my credit. I have never had a problem getting an apartment before, I have lived on my own in apt’s for 5 years and never paid rent late, never broken a lease, and never left damages. I make $36,000/year and could not get approved for a $650/month apt. I have been at my job for 6 years, and I am 24. Is this right? Should I keep looking? I don’t want to keep paying application fees if I am not going to get approved. I live in Houston.

  12. says

    Hi Angelika,

    Sorry to hear about your challenge and one of the first things you need to do is obtain copies of your credit reports from all three major consumer credit agencies so you know what in fact is causing you to get declined. You are allowed one free credit report per year so it won’t cost you anything. Go to annualcreditreport.com to order your copies first.

    There are many factors that impact your credit but if you have derogatory items showing up on your files then I would suggest reading my post titled A Bad Credit Problem is a Temporary Setback not a Death Sentence. This will give you some helpful direction.

    All the best,

    Marco

  13. says

    Quality blog post Marco. Most of the time I stumble upon awesome posts here on this website. Thanks a bunch for sharing. I plan to bookmark this blog. Excellent information and great website. Email me the advert information if you can. Happy new year!

Trackbacks