Whether you recently opened a startup or have been running a small business for a few years, building credit for your company is an important aspect. Building credit for your business is very similar to personal credit, but a major difference is you are striving to make a profit as opposed to just making sure you have a good credit score. But this part of running your business does not have to be a stressful practice. By following a few of these tips, you will be able to have strong and clean credit for your business:
Leave the personal stuff at home
The first step in this process is getting your personal credit in order. It is important to have a personal credit clean up before working on business related maters because if you have to use personal credit for your business, you don't want the company to be affected by bad credit. Continue making credit card payments, get your balance down and even enlist the assistance of credit repair services to aid you in getting your personal finances in order.
Get an EIN number
Once you are ready to get your small business off the ground, you will need to differentiate your business credit from your own. You can do this by getting an Employer Identification Number. Think of this as a Social Security number for your business that will let you track your credit and tax information. You can get an EIN number by applying with the IRS.
Small loan can help start you off
You can begin to build credit by taking out a small bank loan or applying for a business credit card. Consider getting a loan that will cover minimal costs because you don't want to get your business in deep debt right off the bat. If you have trouble getting a small business loan from a bank, consider a commercial credit account. Many retailers will offer these accounts to companies they will be doing business with. The important thing to remember is to keep paying your bills on time and don't overspend.
Expenses charged to company credit
When writing down your list of expenses, such as supplies, internet or even a water cooler for employees, charge those expenses in the name of your business credit. By registering these accounts with your EIN number, you will be able to build up credit for your business in no time.