Business Credit 2017-04-18T09:00:18-04:00

BUSINESS CREDIT

Building your business credit profile is key to accessing untapped capital.

Whether you are considering forming a corporation or LLC in Nevada, or even if you already have a Nevada entity, one thing is certain; sooner or later you will need access to capital.

Let’s face it … getting a business loan is not easy – you need to understand the process and what it takes to qualify. Our Business Credit coaches help you establish and build your business credit profile, separate from personal credit. Many of our clients have been able to get significant corporate credit using our systems – without a personal guarantee!

Where do you start?

So many small businesses tend to be financed initially with personal savings or by the assets of the owner – but that becomes difficult to sustain once a certain rate of growth is reached. You can always raise money by bringing in new shareholders, but with that comes a much higher degree of internal complexity and potential problems. If you need access to money, but don’t want to add new owners, your only option may be to borrow. That’s when entrepreneurs quickly find out the complexity involved with obtaining a business loan.  Financing is a critical part of a small business and almost always a large concern for the owners, yet few know how to set about finding credit or investment solutions to fund their business growth. That is exactly where we can help!

Corporate Service Center, Inc. can help you to build a business credit profile and understand the business loan process. This preparation will significantly improve your chances of being approved for the loan you need with the best terms possible. Our first step is to analyze where you are now – that’s exactly what a potential lender will be doing. The Business Credit Analysis identifies where you are today and where to begin with building a business credit profile that will make your application more likely to succeed.

BUSINESS CREDIT FAQ

The security of having business credit is important for any organization. With Corporate Service Center’s business credit services, you will be able to have the security you need for your business and its assets.

The following are some of the benefits of building good business credit:

  • Meet any lending needs

  • Extend your cash flow

  • Lower your interest rates

  • Save valuable time and money

  • Improve the credibility of your business

For those of you who do not know exactly what business credit is and why it is important, you are not alone. There are many business owners who share this feeling of uncertainty. Corporate Service Center, Inc., can provide you with what you need to know so that you feel prepared and confident about your business operations.

The following are some of the valuable things you will discover about business credit:

  • Your rights as a business owner regarding information on your credit reports.
  • Who the largest business credit bureaus are.
  • The criteria business lenders use.
  • Where business credit scores come from and what they mean to your business.
  • Which companies grant credit and how to get them to do it for your business.
  • Which companies report to business credit bureaus.
  • Which credit cards companies do not require personal guarantees.

Learn how to limit the use of your personal guarantee and build business credit (regardless of your personal credit history) just by building a business credit profile.

Building a business credit profile allows you to:

  • Limit your personal liability
  • Protect your personal assets from any business losses
  • Eliminate the need for using personal credit
  • Purchase vehicles without using personal guarantees
  • Access more cash for the business
  • Purchase items for business with convenience
  • Prepare your business for future lending needs

One of the biggest advantages of having a good business credit profile is saving money. By obtaining a more favorable credit score, you will lower the interest you pay on loans and leases.

For example, a good business credit score can lower your interest rate by 3 percentage points, and save your business almost $10,000 over ten years on a $50,000 loan!

Through incorporation, you can separate yourself from your business and protect your personal assets from any business liabilities. While it is possible to build a business credit profile for a sole proprietorship or partnership, you and your family are still personally responsible for all the debts your business may incur.

Corporate Service Center, Inc., recommends building your business credit as a Nevada corporation or Nevada limited liability company. When you incorporate with us, you benefit from:

  • Protection of your personal assets
  • The ability to raise capital and build credit faster
  • Lower tax liabilities
  • Limited liability of owners and officers
  • 100 percent tax-deductible insurance
  • 100 percent medical expense reimbursement
  • Stock ownership – which makes it easier to transfer assets
  • Greater credibility through a corporate image
  • Lowered audit risk

The Business Credit Accelerator Program is designed to help you build lines of business credit rapidly for your new or existing business. Credit experts will help you build your credit score and profile with major business credit reporting bureaus. With our comprehensive understanding of personal credit, business credit, and our lenders’ underwriting standards, we will ensure that you have the best possible profiles. Our program can help you and your business:

  • Establish, develop and enhance your business and personal credit rating
  • Work one-on-one with you on your personal business financing needs
  • Match your businesses needs with the right lending sources

Our business funding experts will guide business owners through the maze of financing options and lending sources that might be suitable for your business.

There are two business credit reporting agencies in the United States that lenders and financial institutions rely on for information to grant credit. The two credit agencies are D&B and Experian.

Dunn & Bradstreet (D&B)

  • More than 70 million businesses are registered with D&B.
  • The credit profile created by D&B uses information provided by the business owners and vendors of the business. D&B grants a PAYDEX score to businesses based on payment experiences of the business.
  • D&B issues a DUNS rating based on the financial statements of the business.
  • D&B has a ‘High-Risk’ status for companies that will destroy a company’s ability to obtain credit.

Experian Business

  • More than 14 million businesses are registered with Experian.
  • The credit profile created by Experian uses information provided by vendors only.
  • Experian grants an Intelliscore based on payment experiences.
  • Experian is one of the three largest personal credit bureaus.

The business credit scores with D&B and Experian are what the financial institutions look for in order to determine credit:

PAYDEX Score

  • Score ranges from 0 to 100
  • 75+ score is good
  • Based on payment experiences reported by vendors
  • Need 2 trade references who report to Experian

DUNS Rating

  • Various rating schedules
  • Based on employee size and financial statements
  • Also takes payment history into account
  • Based on payment experiences reported by vendors

The following criteria are used by lenders when determining credit approval, limits and interest rates:

  • On-time bill payment history (payment experiences)
  • D&B DUNS rating
  • D&B PAYDEX score
  • Public records information
  • Years in business
  • Business tax returns
  • Type of business
  • Number of employees
  • Location of business
  • Business plan
  • Trade references
  • Banking references
  • Accounts receivable aging reports
  • Owner/officer credit score (can be overlooked depending on which lender is being used)
  • Loan package – A formal presentation of everything above to present to the lender

The credit reports lenders look at vary from lender to lender. The reports listed below are the most common reports used to determine credit. The scores shown are only a guide and are not set in stone. Every lender varies their requirements based on the amount of funding they have available at any given time.

D&B Business Information Report – Contains:

  • D&B PAYDEX Score – Scale of 0-100 – should be 75+ to be in the low to medium risk of default
  • D&B DUNS Rating – Varies based on financial statements and size (an ER, 1R or 2R rating only indicates employee size and does not indicate financial rating)
  • Payment experiences for business
  • Public information records

Experian Business Owner Report – Contains:

  • Experian Intelliscore – Scale of 0-100 – a score of 75+ will put your business in a low to medium risk of default
  • Experian FICO – FICO scores range from 300 to 850. You want a score of 630+ to better your chances of approval.

Equifax, Experian, Trans Union Personal Credit Reports

  • All of the above are personal credit reporting agencies
  • All issue a FICO or Beacon score

Corporate Service Center, Inc. can provide you with a complete profile of all your credit scores, including a composite score analyzing several criteria that a lender will look at, and can also help you build and improve your credit scores.

It can be extremely difficult to find someone willing to give your business a loan or lease without the proper credit profile. Before looking for financing, make sure you’re prepared to present the offer to a lender. Learn what it takes to obtain the loan or lease your business deserves. Our Corporate Service Center, Inc. experts advise that you take the following steps:

  1. Prepare You and Your Business
    • Have a favorable PAYDEX score with D&B.
    • Have a favorable Intelliscore with Experian.
    • Have a favorable personal credit score (FICO).
    • Have a minimum of three trade references.
    • Have a good bank reference.
    • Do the research on what type of loan or lease you want.
  2. Develop a Plan
    • Find someone with good credit to sign for the loan or lease.
    • Determine what business entity you will have when you apply.
    • Determine why you need the money.
    • Determine how much you need.
    • Determine how you will pay it back.
    • Put Together a Written Plan
  3. Put Together a Written Plan (Almost any lender will want to see these three things before looking at an application, and they will be crucial to obtaining the loan or lease you want.)
    • Prepare a business plan.
    • Prepare a marketing plan.
    • Have two years’ financial statements and tax returns prepared.
  4. Packaging the Request
    • Lenders want the loan request presented in a specific manner.
    • Use a professional loan packager, especially with a SBA Loan request.
    • The packager will provide the lender with what they want to see and increase your chances of approval.
    • The packager will also save you time and money.

If you would like more information about business credit,
contact us at 1-866-411-2002