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How do you build your business credit?
Here’s what Wells Fargo Bank has said regarding Separating Personal and Business Finances...
"The longer you delay establishing business credit, the longer you delay taking advantage of business loans."
By strengthening your business credit, you will not have to use the owner or shareholder(s)’ guarantee(s) for loans, leases, credit cards and other sources of debt financing. If your company has a strong operating history and financials to support this, you can easily build your business’ credit. If you have not already done so, do the following as soon as possible to build your small business credit:
o Each year, see if you can increase the size of the credit line. Make sure you use it as appropriate to keep the credit line there. Example: If you have a $50,000 credit line but always pay within 10 days by check, your credit line will disappear. You should place your orders using the credit line, then pay off the credit line every 30 – 60 days.
Finally, you should have a business plan. Banks and other lending institutions will look at the company’s credit profile, its financial history, financial projections, and the business plan in making its decision. If you do not have a business, it obviously cannot factor into the decision-making.
Author Bio:
Tiffany C. Wright is an author, business advisor, and interim CFO and CEO who has helped numerous small businesses obtain over $31 million in financing. To learn more about how you can build your company’s business credit and remove personal guarantees and other hits to your personal credit, view this course. If you would like to contact Ms. Wright directly, you can email her at twright@tocafamilyservices.com.
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