Friday, November 12, 2010
Thursday, November 11, 2010
How To Get Business Credit The Hard Way
Form a Corporation.
I have a Corporation some guys favor C corps and still others like S corps. Check with your accountant to see which is best for you. There are some companies out there that will sell you seasoned “shelf-corporations” for several thousand dollars. That’s fine if you want to go that way but it won’t get you big lines off the bat because they aren’t cash-flowing corporations. I personally think they’re a rip.
Get a Tax ID
Also known as an Employer Identification Number of EIN you can get this online for free from the IRS website.
Get a DUNS number from this site http://www.dnb.com for free
D&B is to business credit like FICO is to personal credit. They rate your company and your vendors report to them. Get signed up at http://www.dnb.com
Your goal is to build your “Paydex” number. Your goal should be a Paydex of 80.
It will take 3-6 months to build up your paydex. Be patient.
Get a Few 30-Day Business Credit Accounts
The easiest way to start building your business credit is with 30-day accounts. Places like FedEx, Office Depot, Home Depot and Kinko’s will give you a business credit account. It’s a like a charge account. Charge something each month and pay it off each month.
Get a Business Credit Card
Once you have a few months of this under your belt, apply for a business credit card such as Discover or American Express.
Get a Small Line of Credit
Then after a year or so when your Paydex is close to 80, and your business has some positive, cash-flowing financials that you can show the banker, you have a good shot at an unsecured line of credit of $25,000 – $50,000.
Get a Big Line of Credit
Behave responsibly with that and the bank will continue to increase your line.
And there you have it – my 6 easy steps to a million dollar business line of credit. Is this as easy as it sounds? Kinda. Is it guaranteed? No. Nothing in life really is. But if you show that you have cash flow in your corporation, you’re head and shoulders above the rest. Cash flow is key.
The next questions is always “is there a course that will walk me through all this?” The answer is yes. Try Gboggie.com I like this one because they break it down into really, simple actionable steps and they don’t blow smoke up your… well, let’s just say they don’t make any false promises. And they have an online component with videos that walk you through each step and a database of business line of credit providers that’s updated regularly.
So, get out there and start building your business credit.
I have a Corporation some guys favor C corps and still others like S corps. Check with your accountant to see which is best for you. There are some companies out there that will sell you seasoned “shelf-corporations” for several thousand dollars. That’s fine if you want to go that way but it won’t get you big lines off the bat because they aren’t cash-flowing corporations. I personally think they’re a rip.
Get a Tax ID
Also known as an Employer Identification Number of EIN you can get this online for free from the IRS website.
Get a DUNS number from this site http://www.dnb.com for free
D&B is to business credit like FICO is to personal credit. They rate your company and your vendors report to them. Get signed up at http://www.dnb.com
Your goal is to build your “Paydex” number. Your goal should be a Paydex of 80.
It will take 3-6 months to build up your paydex. Be patient.
Get a Few 30-Day Business Credit Accounts
The easiest way to start building your business credit is with 30-day accounts. Places like FedEx, Office Depot, Home Depot and Kinko’s will give you a business credit account. It’s a like a charge account. Charge something each month and pay it off each month.
Get a Business Credit Card
Once you have a few months of this under your belt, apply for a business credit card such as Discover or American Express.
Get a Small Line of Credit
Then after a year or so when your Paydex is close to 80, and your business has some positive, cash-flowing financials that you can show the banker, you have a good shot at an unsecured line of credit of $25,000 – $50,000.
Get a Big Line of Credit
Behave responsibly with that and the bank will continue to increase your line.
And there you have it – my 6 easy steps to a million dollar business line of credit. Is this as easy as it sounds? Kinda. Is it guaranteed? No. Nothing in life really is. But if you show that you have cash flow in your corporation, you’re head and shoulders above the rest. Cash flow is key.
The next questions is always “is there a course that will walk me through all this?” The answer is yes. Try Gboggie.com I like this one because they break it down into really, simple actionable steps and they don’t blow smoke up your… well, let’s just say they don’t make any false promises. And they have an online component with videos that walk you through each step and a database of business line of credit providers that’s updated regularly.
So, get out there and start building your business credit.
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