Forums: Discussions for entrepreneurs and small business.

Starting a business with "business credit" can be a challenge because the lender wants to see some history that indicates an ability to repay the debt. Most traditional lenders will want a personal guarantee and possibly a pledge of personal assets (this is common with an SBA guaranteed loan)

Starting a business using outside capital is very possible. The first step is to develop a plan that identifies how much capital is needed. There are a number of ways to acquire capital -depending upon your specific situation.

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Business Growth Masters, LLC -
Capital Catalysts for Entrepreneurs
Home of the Scalable Business Plan and QuikStart Capital Programs
http://www.bizgrowthmasters.com
info@bizgrowthmasters.com

 

 

 

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Lisa Schaab
www.funderbug.com
fundraising

Lisa,

FunderBug is a pretty cool idea. I hope it is a hit.

Now about your brother`s situation. Since the company isn`t generating enough revenue to "pay " him - is the loan to cover his personal expenses?

How long will it be before the business can pay him enough to cover his monthly bills?

 

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Business Growth Masters, LLC -
Capital Catalysts for Entrepreneurs
Home of the Scalable Business Plan and QuikStart Capital Programs
http://www.bizgrowthmasters.com
info@bizgrowthmasters.com

Serrenity,

 

  

Establishing business credit is tough, especially for a new business. But remember: It CAN be done, and it`s easier than you think. Follow these steps, and you`ll be on your way to an excellent credit profile.

Here is what I have learned:

~Set up a Corp business. Smart to protect yourself and the only type of business that allows you to keep your business credit and personal credit seperate. LLCs and Sole are okay for contract work or property investment, but you still should get a Corp to manage them.

~Once you get your EIN, through registrastion, set up your business phone. You will need to make sure it is at an address not the same as your home (because it is not looked upon favorably by the lending world) and the phone will need to be registered in the 411 directory. Quite a few have had success with calling the local phone company and getting a call forwarding number. It is a business number that automatically forwards to any desired phone. Make sure it will list with 411 before signing up however.

~After receiving your first phone bill, go to www.staples.com and fax in copy of application along with copy of phone bill to apply for business credit. Use professional letterhead for coversheet. You should receive the standard $750 credit line with no personal guarentee (herein referred to as "PG").

~Also during this time go to www.dnb.com and register your business to receive a D&B number. It will take 30-40 days to receive it in the mail. If you want to establish business credit sooner, you can pay for the credit builder ($399), but it`s not required. After you have at least 5 business accounts reporting, you`ll receive a paydex rating (similiar to FICO for personal credit).

*REMEMBER - a paydex score will only take into account your payment history. Unlike personal credit, this is counted in days. For example, if you pay your invoices 14 days late, it will be reported as such. If you pay your account off before the statement or invoice comes, it will be reported as such. The bottom line: Pay your invoices on time, and you will get a better paydex score.

~Set up the following business accounts, and make at least one purchase, you want to pay this off BEFORE the first statement hits:

*1. UPS - www.ups.com

2. FedEx CONTACT Revenue Services Department 1-800-622-1147 press 4 then 1

3. Barnes & Noble CONTACT Purchase order department 1-212-414-6000

4. Quill Corporation 100 So Schelter Lincolnshire, IL60069 CONTACT Credit Department 1-800-634-3090

*5. Viking 8200 East 32nd St No.Wichitas, KS67226 CONTACT Credit Department 1-888-454-5457

6. Rapid Forms 301 Grove RdThorofare, NJ08086 CONTACT Billing Departement 1-800-257-5287

*7. Nebs - www.nebs.com

*11. Office Depot www.officedepot.com Apply online

(*- Really easy to get)

~Need a cell phone? Once you have a EIN and D&B# apply for a business account. Usually T-Mobile is the easiest to get credit with, but I`ve heard that Sprint, Cingular, and Verizon are easy to get as well. Nextel? Good phone, but you have to jump through a lot of hoops, and you usually have to put down a deposit.

~If you have at least 30-45 days to use, the following companies automatically report to D& B creating your business file:

-FedEx

-UPS

-Staples

-Viking

-Nebs

-Office Depot

Try a credit union.  I just recently joined one and they have so many options for loans.  Fresh start loans, revolving credit loans, credit cards.  You can also get a loan against your savings account, your savings is collateral. 

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Janice Gentles-Jones
Online Success Queen
www.onlinesuccessqueen.com

It is available, but you`ll need a solid business plan and hard numbers of some sort to back it up. It`s very tough to get unsecured lines of credit when you are starting up and have not yet established a business,


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