Why Do I Need Business Credit?
When you decided to go into business, there were a bunch of great ideas flying around, excitement was in the air and many items had to get accomplished. Now that the dust has settled, you are up and running, there are some other important factors you need to consider. You may need a business line of credit.
Have you ever considered where you want your company to be? Most of us have and probably had high hopes and aspirations. The thing that might have not been considered is the fact on how to achieve it. The most common mistake for people that have gone into business is they have not completed a thorough Business Plan. In this, it explains the future goals and the way to attain them.
In order to get the most out of your business, you need to establish a few things. First, you need to make sure you have a sound business. This means, you are incorporated, follow all legal rules and have a clear vision of where you want to be and the steps needed to get there.
After establishing the above mentioned, you should only need, then at that point, a means to get there. This is also known as capital. The most prevailing way to get capital for a business is through a bank loan.
What Happens At The Bank?
Let’s take the scenario where you enter a bank, sit down with a loan officer, and discuss your needs. You have been in business for five years now; you have an award winning business plan and a great personal credit score. Should be easy, right? Not as easy as you might think.
The loan officer will then ask you for your DUN number. You then look as though you were a deer in the headlights of an oncoming truck. The loan officer then proceeds to look at you while waiting for a response.
Unfortunately, you will not have a response because you have not established business credit. This brings me to the main reason why you would need business credit.
Another very important reason corporate credit is something you need is for the simple fact that you are you and your corporation is its own entity. With that being said, let us take a closer look.
If you are looking for a "business loan" and you only have your credit instead of business credit to apply with, you have just got yourself a personal loan. This is because you will have to guarantee it with your personal assets. In other words, if you cannot repay your loan, not only will your credit be slashed, but your home, car, investments could all be assumed by the bank.
To keep a business its separate entity, a business will needs its own credit; this is the only logical and safe way to do it. Not only will business credit set you up for larger growth opportunity, it will safe guard your personal assets and save you money in the long run. Follow these steps and you will be sure to build business credit the right way.
Tags: business line of credit | business line of credit | build business credit | build business credit | corporate credit | corporate credit | business credit | business loan | business loan