| By :
Marco Carbajo
Building business credit history for an existing or newly formed corporation can seem like a time intensive task but it doesn't have to be with the right system. One of the biggest roadblocks preventing most small business owners from getting started is where to begin and what exact steps need to be taken to build corporate credit. Let's face it there's a lot information out there and unfortunately most of it is incorrect and outdated. You can easily spend endless amounts of time searching for ways to build business credit history but unless you set up your foundation correctly you can find yourself peddling backwards and scratching your head trying to figure out why you keep getting declined for corporate credit. What I encourage you to do is set up a business credit building strategy for your company immediately because I guarantee that at one point your business will need access to funds and this is an area you don't want to figure out through trial and error. The last thing you want is to rely on your personal credit to finance your business or even worse putting personal guarantees on the majority of your company's financial obligations. First, you will need to decide which strategy best fits the needs of your business. Some of the areas that will affect your decision will be based on how much time you are willing to commit, resources you have available such as an assistant and the budget you have allocated for building small business credit. When it comes to how much time you are willing to commit keep in mind that the bulk of the work involved is during the foundation stage such as incorporating your business, obtaining a federal tax ID #, corporate compliance and other tasks. You can easily delegate most of this work and the simple tasks can be handled by your assistant. Once you complete the foundation stage then the rest of the time involved is submitting corporate credit applications for your company, making purchase orders, paying invoices and monitoring your file. The challenging part of this whole process is if you don't have a business credit builder system in place. Instead you have to keep track of your progress, know when and where to apply for the next levels of corporate credit and understand what the approval guidelines are required from the companies willing to extend credit to your business. On top of that you have to worry about whether or not the vendors and lenders you are doing business with will report the actual credit limit you were approved for on your file or simply report the balance owning. Many of the business credit builder companies do not address this very issue which makes it extremely frustrating for small business owners. You want to ensure that whatever business credit building system you select will allow you to track your progress and provide all the approval criteria for each supplier and lender it lists. But the most important feature to look out for is whether or not it provides premium suppliers and lenders that report your actual credit limits not just your balance owing! By doing so you will be in a position to unlock credit for you're small business without having to deal with the trial and error approach or repeated declines. Remember, a system that allows your business to conserve cash flow, unlock corporate credit, build business credit history, track your progress and qualify for greater amounts of financing is a system worth looking into.
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