Many business owners wait until it’s too late to start building business credit. But you can increase your chances for success by building credit from the very beginning. It’s worth it. Business credit can turn your company’s cash flow cycle around and increase profitability.
If you are about to try working on your business credit, this blog post will shed light on the stages to get there!
The Stages of Building Business Credit: How To Do It
Stage One: Overcome Using Personal Credit
This is the most dangerous stage of building your business credit. The temptation to use personal credit is great, but your business credit will suffer.
Why? Because your personal credit and business credit live in different credit repositories. Your business credit can be ruined by bad personal credit.
The best way to build business credit is to use business credit cards, not personal credit cards.
The goal is to get a credit card in your business’s name. You can get a business credit card by applying for one or starting a charge account.
Stage Two: Beginning Business Credit
This is the stage that most business owners are in. You’ve started building business credit and are enjoying the benefits of your efforts.
You’re building good credit by paying your bills in a timely fashion. This stage is a great way to start your journey to great business credit.
You’re able to get a business loan or line of credit to help you expand your business and get it on the right track.
Stage Three: Developing Business Credit
The stage where you begin to really build business credit. You’re starting to get some depth in your business credit. You’re not just using one line of credit, but perhaps two.
Your business credit is growing, and you’re able to take advantage of the best business credit deals. You’re able to get lower interest rates and better deals on financing, as well as other business credit cards.
The goal is to be able to show a long history of building good business credit.
Stage Four: Strengthening Business Credit
Now your business credit is so strong that you’re able to make large purchases. You’re getting some great deals on equipment and vehicles.
You’re also able to get some of the best deals on suppliers and travel. It’s a great time to be doing business. You get excellent deals and can take advantage of them.
Stage Five: Maintaining Business Credit
You’re in the final stage of building business credit. If you’ve made it this far, you have a strong business credit portfolio.
Your business credit is so strong now that you’re able to get more than one business credit card. You can get a business line of credit and check writing. These are all the great benefits of a strong business credit portfolio.
It’s the goal of all business owners to get to this stage. It’s a great place to be, but it’s not the end. You’ll need to keep growing your business credit portfolio, as well as maintaining it.
Building business credit is a fun and exciting process. You’re the master of your financial destiny, and you can control your destiny by building good business credit.
If you’re ready to get a business card and start building business credit, contact Head Start Biz Solutions. We offer consulting and real solutions to current projects/dilemmas while helping you structure your business to be best prepared for the future. Our services include Credit Restoration, Tradelines, Business Formation, Business Plan, Building Business Credit, Online Presence, Merchant Accounts, Business Funding, Accounting, Payroll Services, Tax Services, Customer Relationship Management, and Lead Generation. We ensure you, the business owner, have everything in order and are getting the best deals.