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Old 9th December 2010, 09:06 PM   #1
colbycampbell
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Default Help With Business Line Of Credit?

I am looking for help in establishing a business line of credit. Have any of you used a service to build your business credit? If so, what services were offered? What would you have liked them to do differently? If you were going through the process again, what would you look for in a program?

Thanks for any help you have!

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Old 13th December 2010, 01:52 PM   #2
bones46
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Personally, I am not a fan of business credit. The reason is that many business owners think that they can use business credit to get around their poor personal credit. I can guarantee you that the banks and other lenders know these tricks as well.
Plus, as a small business or a new business - business credit (even if you have strong personal credit) will do very little if at anything at all to help you secure funding. Most small business owners who build their business credit find that the only funding they can obtain is a small $200 in store credit at their local office supply store.
Now, business credit may help you if you are seeking trade credit from a supplier or vendor. But, if you just explain to them that you are new in business or are just now pursuing using them as a supplier - it should work just as well.
The reason that business credit is sub-par with lenders is that not all lenders use business credit to make decisions (they all use personal credit histories) - plus, very few lenders report to it. Thus, most lenders know that the information found there is not very accurate or complete.
Think about it this way - you don't have to pay to get a personal credit history - it is automatically generated once you take your first credit product (or apply for one). With business credit - you have to pay D&B to get a file. And, most business lenders understand this and know that all you have to do is pay to build business credit - thus they don't use it. You can't pay to get or fix personal credit and everyone report to your personal credit file.
If you still want to pursue this - do it yourself - contact D&B and find out how to proceed. Do not pay someone - all that will do is cost you more money - and you will not get enough return on that money to justify it.

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Old 13th June 2012, 11:41 AM   #3
TCCDepot
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Default No offense but we completely disagree with Bones

Business credit was not created for a company to get around their poor credit score, it was created to protect the owner from personal liability on their business. Why do people create a corporation or LLC? It's to keep their personal liability out of the business. Now, creating a business credit profile allows the owner to use his corporate profile and keep his personal credit and liability separate. Why would you want to use your personal credit and liability when the SBA states, "Over 50% of new small business close their doors in the first 5 years?"

Business credit can secure you more funding than you could get using personal credit as long as your company has revenue and assets. Over the last dozen years, we have helped small businesses achieve the American entrepreneurial dream and are proud to have provided an "educational gateway service" that has led to over $260 million dollars in funding through business credit. Our company has a network of over 3,800 vendors that report to at least one of the three major credit bureaus and 48 banks that extend credit to our clientele. What happens when you take out a personal loan for your business and 2 years down the road want to purchase a house? Guess what, the banks won't lend to you. Having a good business credit profile will also allow you to get better terms than you would with personal credit.

"The longer you delay establishing business credit, the longer you delay taking advantage of business loans." - Wells Fargo

Bones is correct that you do have to setup and pay for a Dnb file. Business credit is fundamentally the same thing as personal credit except instead of it being associated with you; the credit is associated with your business. Most companies don't even know that business credit exists.

"You should differentiate your personal credit from your business credit." - Entrepreneur Magazine

Like bones said, you can do it yourself. It can be very time consuming and you need to become a student because there is a lot to learn about navigating the financial maze.

The Wall Street Journal states, "Lenders check your company's credit report to see if they want to do business with you."

If you would like more information Colby, please contact us, info is in our signature. Here is a link to another posting I made: Why YOU Should Build Your Business Credit

Hope this was helpful. Have a great day!

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Old 28th June 2012, 02:17 PM   #4
tgriffith
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Have you considered accounts receivable financing? It's a debt-free way to secure quick funding for businesses. However, it typically only works for B2B companies.

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Old 10th July 2012, 02:25 PM   #5
MakGlobal
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Default I'm with TCC Depot

... that may be because we're in the same industry, but to answer your questions pointedly -

1. Services I've used and seen work are equipment leases and merchant advances - these aren't "services" you pay for. To build your business credit you start using financing options and pay as agreed, making sure they report to D&B.

2. "What services were offered?" - In regard to my answer above, several different leasing/financing options are offered to the business owner and he/she can choose what best fits his/her need, is the best term, etc., best payment for their business cash flow. Many times these become long lasting financing opportunities because funders like to work with people who have financed items with them successfully in the past.

3. The one thing I demand be done differently is, NO UPFRONT COSTS to see your options.

4. A program/company/representative should: know and be willing to work to find options that fit your needs, give you as many options as possible to choose from, work fast and efficiently and help guide you through any questions in regard to your financing (ie. is there an end of lease letter required) and keep you updated on any deadlines, helping you to avoid costly mistakes.

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