What is business credit?

 Most people are familiar with how personal credit works. You start with no credit profile, get small credit cards to initially build your credit score, then as your credit grows you can use it to qualify for loans, auto vehicle financing, even mortgages. 

With business credit you can do the exact same thing.  A business itself can also start with nothing, put small credit accounts on the report called “vendor” accounts to establish a score, then that credit can be used to qualify for loans, auto vehicle financing, even mortgages. 

Having business credit provides any business owner some major advantages. For one, with both personal and business credit built the business owner has double the borrowing power as the owner now has two profiles they can use to obtain credit. 

When business credit is built the right way, it can be built with no personal credit check or guarantee. This makes it perfect for credit challenged individuals, and those who want to eliminated their personal liability on their business debts. 

All too many business owners get into serious trouble, lose their personal assets, even file personal bankruptcies, all to get rid of business debt. With business credit this doesn’t need to happen as the business owner them self isn’t liable for the business debts, only the business is. 

That means in case of default, the lender couldn’t pursue the personal assets of the business owner.  SBA states that business credit approvals are typically 10-100 times higher than consumer credit approvals. So another benefit of business credit is the business can obtain A LOT more money in approvals. 

And, business credit can be built quickly, much faster than consumer credit. It takes 6 months for an initial consumer credit score to even be established.  With business credit it is very practical for a business to qualify for credit within 90 days or less, then build that credit to a point where the business is getting $10,000 credit card approvalswithin 6 months or less.

Business credit is one of the strongest assets any business can have.

Please contact us with questions during your business credit building process.