Over the years I have never directly addressed the issue of Building Business Credit for startups but I thought it was a bit obvious.
After talking to a client today and getting some of teh same questions over and over, I figured I will write a quick post about it.
A Common Question. Can I Build Business Credit to Start a Business? How does that work?
To quickly answer the question, Yes, one can build business credit to start a business, but there are some things we have to take into consideration. The bottom line is this, business credit is more difficult to acquire than it was a few years ago and it is even harder if you are not actually in business. I have covered much of this in posts in the past but when building business credit for a startup, I suggest that you do not take any short cuts in the process. Here are some points that you much keep in mind when building business credit for a start up.
- Get a Shelf Corporation. Whether you like it or not, banks are simply not lending to brand new companies. Using a company that is more than 3 years old is the better way to go at this point. We at Credit Rich has made is very affordable to acquire Shelf Corporation. Send me an email or give me a call and we will get you set up.
- Do not worry about the Name of the Shelf Corporation. Many Entrepreneurs or would be entrepreneurs worry too much about small things and issues that have little impact on the bottom line. The bottom line is this, you need capital to start a business and getting a shelf corporation is the way to go. You will not get the name you want or even close in many case but you can file a DBA(Doing Business As) with your state or you can Incorporate a different company to operate under. This is usually what I suggest and I have written about this recently.
- Follow every step in the business credit bible on setting things up right and do not skip a step. You are not an actual business but you have to look like you are a business in operations. If you are serious about being successful, taking short cuts is not the way to go.
- Get a Coroprate Website. This is something that most people skip but it helps a lot for the credibulity of the company. We develop a free website for our clients.
- Be Patient. I do not know how many time I have to say this but building busienss credit does not happen over night. It takes months to build solid business credit and if you stick to it year after year, you can and will have hundreds of thousands, if not millions of dollars in business credit. What will that do for you? What were you doing 2 years ago? If you started two years ago and now had $1,000,000 in business credit where will you be?
Bottom line is this. It can be done and I have done it for hundreds of clients. If you have any questions send me an email or give us a call at 305-432-2921. Look out for my article on Business Structure for Startups when Building Business Credit.