Business credit

Structure your business

As a business owner, when you decide that you want to obtain some business credit, there are a number of steps you must take in order to accomplish this goal. The first thing you need to decide before anything is how you are going to structure your business. There are different options with different advantages and disadvantages to the way you structure your business. If you really want to obtain business credit which is totally separate from your personal credit, you will need to open up a corporation or an LLC. The common options to choose from are an S corporation, a C corporation, a sole proprietorship, a partnership, or a limited liability company.

Obtain an Employee Identification Number or an EIN

After this, you must obtain an Employee Identification Number or an EIN. The reason that you must have an EIN is because business credit is tracked based on your business name, your business address, and your EIN number.

Open a separate bank account, list your business in the 411 directory

The next step is opening a separate bank account in the name of your business as well as listing your business in the 411 directory. This step is critical to obtaining corporate business credit and positioning it to be completely separated from your personal credit.

Obtain the proper licenses and permits

After this, you must obtain the proper licenses and permits needed to run and operate your business. Different states have different laws, guidelines and legal requirements on what you have to do to get these licenses and required permits for your business to be totally legally compliant in the state(s) in which you operate, but you will not be able to obtain business credit without these licenses and permits.

Apply for a DUNS Number with Dun and Bradstreet

After you complete this process you need to apply for a DUNS Number with Dun and Bradstreet. Dun and Bradstreet is the largest tracker of business credit in the US. Make sure you pay everything that you need to pay on time to make your Duns score as high as possible. The higher the score, the more likely you are to qualify for business credit. After these steps, you are ready to start applying for business credit. If you follow these steps precisely, than you should have very little problems in obtaining the credit your business needs and deserves to grow and sustain itself independent of your personal cash flow situation.