Building business credit


#1

We haven’t needed a line of credit or CC and technically still don’t, but found out recently that our business doesn’t automatically have a credit file. We tried to lease some window washing equipment from Window Washing resource to get our first trade line and got denied. Then we went to a regional bank with statements from my credit union personal checking, savings, and truck loan (of which I’ve paid off half in a little over a year), two business checking and savings, brought up to date EIN, Secretary of State incorporation docs, signed commercial contracts ranging from $1400 to $4200 over the next 3 months, etc, etc, etc…

We got denied for a business line of credit despite showing an average daily deposit of $600, which I know isn’t breaking any records, but all I’m trying to do is start a credit file. I requested a $2500 line of credit. I was told that without a personal guarantee I would have a hard time getting credit anywhere since we were less than 2 years old.

I don’t want to mix business credit with personal credit, but I want to start a credit file. I don’t care if it’s for $1000 to start.

Long story short, I have 3 questions:

  1. Who knows of any companies willing to open trade accounts with net 30 terms or banks willing to loan to small businesses without a personal guarantee?

  2. How did you build your business credit?

  3. There was a webinar advertised on the forum for May of '14 on this very topic, but I can’t find a replay and the link doesn’t work. Anyone know where to find it?

Thanks in advance!


#2

Try you local vendors where you might already have accounts under your name. Switch them to your business name. Fuel cards are pretty easy to get. Take your local banker out to lunch and tell him what you need. When the flood took me out last year I called my banker at home on a Saturday and told him I was going to be buying 4 trucks over rhe weekend and needed him to cover the checks until I could come in a sign whatever he needed.


#3

Fuel card is a great idea. I never thought about a fuel card. Lord knows I go through enough of it. I do all my banking through credit union which I’ve always loved because they tend to know their customers and have some flexibility in lending. Unfortunately, the credit union I’ve been with is SMALL and they have really limited business options. Checking & savings is about it there. I’m looking for a larger credit union with a bigger business menu of options.


#4

As you mentioned it, I have a handful of equipment rental companies here locally that have credit options and I have a good relationship with as well.


#5

Most credit unions can’t help much with businesses as they are essentially co-op’s. Find the smallest bank in town. Tell them what you want and what you have to offer.


#6

I applied for a fuel card with the EIN and was approved in a matter of minutes. Bingo. Thanks a ton for the recommendation!


#7

a great start is to go to dun and bradstreet dnb.com and get a duns number for your business


#8

Just did it. Thanks for the advice. I signed up with Nav.com awhile ago, but didn’t realize it didn’t set you up with a DUNS number despite showing your DUNS “score”.


#9

The small local bank is also a good suggestion. We have Navy Fed and USAA but for all my business stuff we use Frost Bank, they are not that small but still a TX bank. I pay as I go but they have offered me a credit line etc. on my business account. It becomes a face to face relationship.


#10

Update. I’ve been working on building up my Dun & Bradstreet profile buying the things my business would need anyway, but using net terms with suppliers who report to Dun & Bradstreet.

Don’t use you “personal guarantee” if you don’t have to.

Suppliers who will issue net terms with little to no business credit as long as you have a D&B profile set up AND accurate! (Check out credit suite business credit on YouTube).

Grainger - $1000 net credit terms to start
Uline - unknown credit line, but has things like tape, bags for bagging off gutters for roof washing, buckets and lids of all sizes.
Quill - paper, ink, etc.
And a handful of others. I’ve only used these 3.

That led to business credit accounts with:
Dultmeier - Up to 90 day terms negotiable as far as I understand it.
Amazon Business Credit - Instant approval for $6000 after a 2 minute application and zero documentation OH and 55 day net terms
Praxair - Welding gas on net terms
Fastenal - Hardware, replacement parts
Quiktrip Fleet Card - I could basically fill the truck and machines all year on this card.

And now I’m talking with a work truck leasing company here in Kansas City about leasing a flat bed with NO personal guarantee with pretty dang favorable terms.

If you’re interested in building business credit (and I know some of you could care less) check out Credit Suite’s videos on YouTube. They’ll basically give you all the info you need for free, but they do try to sell you a service. You don’t need it.

“Don’t abuse the credit, but use it as stepping stones to build your business.” Love, Mom.


#11

Get NET 30 terms with your suppliers. 1st one is the most difficult, obviously, but, once you have two, the others are cake. Not many, though, report to D&B. Never pay to build your file. Form an LLC or S corp for further isolation from your personal and always setup with your company name not your own name


#12

Bingo.