How Does One Build Business Credit

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Comments

  • pagejamespagejames subscriber Posts: 1
    My pleasure!  Like I said, I found it on another forum and just thought it would be great for everyone.
    Good fortune!
  • NuevolutionNuevolution subscriber Posts: 30 Bronze Level Member
    Well,After Applying with one, Some lady called me and, the funny thing about it was, she was telling me about the packages. She explained to me that there are two ways of getting one. You apply for one and you purchase their package.You wait till you do business with a company and they report your rating to DNB.So basically, you will get one eventually. The only thing is you wont be able to add trade lines and stuff of that nature. Here is something for you guys. I tried opening an account with SAM`s Club and they are one of the hardest people to get credit with. Try elsewhere. Any Suggestions? I have T-Mobile under the Corporation`s name now..
  • BluPantherBluPanther subscriber Posts: 5

    The DNB number is not free unless you are going to be using it for a government contract.  The minimum was $299. 
    Blu

    Maybe I am not following the conversation correctly.
    When I applied for a DUNS number I did it online. They called in a few days and wanted to sell a couple of packages. I had selected the free option and after listening to the lady a bit I declined the offers and she set up the number. I do not remember paying anything. The process was not overnight but I believe I was up and running within a weekweek.Note
    Note that this was about 2 years ago so maybe things are different now.
    when I tried to go the free route a gentleman called me (this was last year around November, and tried to sell me the number.  I told him I had selected the free option and he said that the only way they would set it up for free for me was if I was trying to get a contract with the government, or if I was doing business with a company that already reports to them.  Did you already have business credit through someone that was reporting to them (eg. Office Depot or Staples)?
  • BluPantherBluPanther subscriber Posts: 5
    Well,After Applying with one, Some lady called me and, the funny thing about it was, she was telling me about the packages. She explained to me that there are two ways of getting one.

    You apply for one and you purchase their package.
    You wait till you do business with a company and they report your rating to DNB.So basically, you will get one eventually. The only thing is you wont be able to add trade lines and stuff of that nature. Here is something for you guys. I tried opening an account with SAM`s Club and they are one of the hardest people to get credit with. Try elsewhere. Any Suggestions? I have T-Mobile under the Corporation`s name now..

     
    Staples and Office Depot are the easiest to open up.  The website may say no but you will get the credit cards without having to put up a personal guarantee (PG). NEBS and Viking are also easy, according to Creditboards.
  • BreeBree subscriber Posts: 0
    Business credit, a liability a decrease in your company`s equity.  You might want to rethink this.  If you are willing to get a business loan against your business assets might be one way and most common ways businesses get funds for start up costs.  Sometimes not feasible.  If you are a soleproprietor, your company liabilities will be your personal liability, and your personal assets as well as your business is at risk should you default on your business.  Restructurize your business as a corporation to avoid this issue.  As a corporation and your marketing of your product should they be sound and well thought out, you may want to consider looking into selling shares publicly.  With investors they will purchase shares of your company stocks and you may use these funds from venture capitalism to help with start up cost. 
    When you go to a bank seeking a business loan you will need  the following a sound business plan, projected cash flow and profit and loss and other things. 
    You will need to sell your business potential be honest about the business dont fudge information, it will hurt you in the end. 
    Bree
  • pagejamespagejames subscriber Posts: 1
    Some good points, Bree!  But it is also a reality that we live in a plastic society and many businesses will need credit at some point.  This is all about building up that credit so if and when it`s needed, you can obtain it.  Building up the business`s net worth is definitely the main goal, but if the additional liability creates more cash flow and assets and more than pays for itself, then it is a good option.
  • phil07phil07 subscriber Posts: 2
    some of those credit card companies you listed, you still have to use your PG in order to apply for them. or am i not going about it in the right way?
  • hawkwilliamshawkwilliams subscriber Posts: 0
    I read over the information concerning establishing the business credit.  My question is . . . Is it easier to establish business credit with a S-Corp or LLC? I`m going to be setting up a part-time business soon and will be incorporating as well.  It will be a one person operated business.
  • pagejamespagejames subscriber Posts: 1
    Hi Hawk,
         I believe it`s the same either way.  It just comes down to which entitiy (LLC or S-Corp) is better suited to whatever business you`ll be involved in.  I`m not really qualified to tell you which one it it.  You can consult an attorney(make sure you get referred to one by someone you trust)or there are plenty of books that talk about the different entities you can create and what the advantages and disadvantages of each one are.
     
    Good Fortune!
  • entreplanetentreplanet subscriber Posts: 3
    Business credit is never really recorded like personal credit. The best way is history. Deal with larger companies and pay your invoices and don`t leave invoices hanging open. ry and establish net 7 days, net 14 days, etc. From there, one reference leads to another and that`s how you build business credit. It`s all about references from reputable sources.
  • RoblueRoblue subscriber Posts: 0

    Good Question,
    Establishing Company (corporate) Credit was a huge question for me when I started the business. I searched and searched until I came across D&B. I think for $249.99 they will establish a credit profile for your company. See the problem with Vendors and people you do business with is, they never report your good standing and prompt payments to the credit bureaus, they only report the negative stuff, like late payments and past due amounts. When you create a profile with D&B you can list all your vendors, and they will contact your vendors as to see if you pay on time or are always late.
    One of the draw backs in establishing business credit is if you are a sole-proprietor, you are still using your social security as your FED TAX ID,What I would suggest is Incorporate, Get a FED TAX ID for your corporation this way you can use the FED TAX ID instead of your SOCIAL 

    Thanks for responding.  I, too, was really interested in hearing the answer to that question.  I think this D&B is a great idea. 
    Are they the only company of this sought that does this type of thing?
  • rdegr8rdegr8 subscriber Posts: 0
    This information was very helpful. I got bits and pieces of this info from a website but they wanted $3000.00 but would give me a special deal for only $995.00 for the rest.  Thanks again!!
  • RoblueRoblue subscriber Posts: 0
    Some good points, Bree!  But it is also a reality that we live in a plastic society and many businesses will need credit at some point.  This is all about building up that credit so if and when it`s needed, you can obtain it.  Building up the business`s net worth is definitely the main goal, but if the additional liability creates more cash flow and assets and more than pays for itself, then it is a good option.

    I actually feel that Bree`s post/suggestion is a sound and safe approach.  If risk is an issue, Bree`s approach comes complete with a safety net.
  • RoblueRoblue subscriber Posts: 0
    I have had success with www.thesnaploan.com.  This company actually helps you with acquiring the Dunns #.
    Try them out and see.
    I like this company because it is straightforward and helps you every step of the way.  My favorite part about this company is you are not charged anything unless they approve a loan.
    Hope you find information helpful.
  • pagejamespagejames subscriber Posts: 1
    Some good points, Bree!  But it is also a reality that we live in a plastic society and many businesses will need credit at some point.  This is all about building up that credit so if and when it`s needed, you can obtain it.  Building up the business`s net worth is definitely the main goal, but if the additional liability creates more cash flow and assets and more than pays for itself, then it is a good option.

    I actually feel that Bree`s post/suggestion is a sound and safe approach.  If risk is an issue, Bree`s approach comes complete with a safety net.

     
    I agree with Bree also.  Hence the "good points, Bree".  I agree with incorporating (or forming an LLC), etc.  I was just pointing out that one of the primary goals of a business is to make net profit and if taking on debt makes that happen, it`s not a bad thing.  Yes, the liability is a decrease in net worth, but if it creates assets (cash, accounts receivable, etc.) - an increase in net worth  - that outweighs the decrease, isn`t that a net increase in net worth?  And taking out a line of credit when you don`t need it is a heck of a lot easier than trying to take one out when you do need it.  And if you take out a credit line and don`t use it, it`s not a decrease in net worth, right?
     
    Just my thoughts
     
    Good fortune!
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