This is not the same as using your personal credit to obtain a credit card with your business name on it. Obtaining a business credit card relies on your business credit information, not on your personal credit information.
When you are beginning your business, you will probably need to use your personal credit. After you have fulfilled certain basics, your business should rely on itself for credit.
These basics include incorporating your business as a legal business entity. This does not include DBAs (individuals Doing Business As company x). Consult a local business attorney about incorporations are available in your state.
Another basic for building business credit is establishing a business phone that matches your business address in the national 411 directory. Even business cell phone service can be set up for this. Residential addresses are okay, too. Just make sure you are listed as a business in 411 and that your information is correct. Always give lenders this same information.
The last basic step involves building credit with your vendors. If you are in the service industry, you can develop accounts with your office supply, Internet, and phone service providers. Otherwise, get a credit account with your suppliers.
Now you are ready to apply for a business credit card. Use all business information on the business credit card application. Use business sales numbers, list other business assets and liabilities. List business creditors (your vendors) and use business references. Simply put, make your business stand on its own when obtaining business credit cards.
Once you have a business credit card or two, use them for business expenses only. Carry some balance on them month-to-month, but plan on paying almost all of it off monthly. Do not use your business credit card to purchase items for which you could otherwise obtain business financing. Your long-term goal should be to establish solid overall credit for your business.
Establishing solid credit for your business is relatively easy to do if you start by following the three steps above. Then get business credit cards to further build your business’s credit. With good business credit as your foundation, you are now ready to get a business line of credit that does not depend on your personal credit.
While a business credit card is a great tool for using credit for business purposes, as with any tool, use your business credit card wisely and it will serve your business well.
Pat Gage, The Opportunity Creator, and a leading expert in the field of business credit has helped a number of clients target his specialty – starting, expanding, and growing their businesses through his trademarked 10 Steps to Money System. The Opportunity Creator is not only a sought after business credit coach, but also a national speaker. For more information on any topic discussed, visit Gage’s site at http://www. 10stepstomoney. com
November 30, 2009
Business Credit Lines-long Island, New York: Using Business Credit Cards Effectively
Track Your Business Expenses With Business Credit Cards
Are you a business owner or do you have plans of venturing into business? If yes, then this article is for you. It doesn’t matter whether your business is old or new, or what type of business you’re into- if you’re in the business industry, you should take advantage of the benefits of business credit cards. Why is a business credit card a must for every business owner? Track Your Business Expenses Efficiently Primarily, business credit cards help a business manage its finances more efficiently. For instance, tracking business expenses can prove to be a challenge. Keeping inventory of the costs and making sure that not a single cent is missed involves a lot of work. However, this task is made much simpler with the help of business credit cards. How Do Business Credit Cards Help You To Manage Your Business? All purchases that are charged to your business credit cards are automatically included in your account history. Most business credit card companies provide an online account access option to its holders so you can check on the status of your business credit card account anytime. Monthly billing statements will also be sent regularly along with quarterly and yearly summaries of your account. Account summaries are indispensable tools when doing your accounting and bookkeeping tasks. These summaries are also wonderful references when filing your taxes. By checking into your account summary, you can easily identify the items or purchases that are qualified for tax exemptions. Another great feature of business credit cards is the option to distribute extension credit cards to your employees. This way, you can give out credit cards to your selected employees which they can use for official business expenses. Because all expenses charged to these extension credit cards will also be listed in your account statement, you can be sure that you can keep track of your employees’ spending habits and that the cards will be used accordingly. The use of business credit cards also enable a business establish a separate business credit history for the company. By using your business credit card, keeping within your given credit limit, and staying true to your payment obligations, you can build an excellent credit history for your company more easily. Of course, don’t forget that in order for your business credit to be recorded, you need to register with a business credit reporting agency like D&B and Experian. Furthermore, business credit cards help you separate your business funds from your personal money. This is a crucial factor especially as your business begins to grow and as expenses start to multiply and mount up. A separate business account helps you see exactly how much your budget is and thus, will enable you to make business decisions more effectively. Use Your Business Credit Card with Care Caution must also be taken when using business credit cards. For instance, some business owners carelessly use their business credit cards even for their personal purchases. Doing so can easily put you into credit card debt and can cause problems to your business. Therefore, make sure that you’ll use your business credit card strictly for business expenses only. Don’t use it when you’re at the mall or buying your groceries or when dining out with your family. Remember, your business credit card should be a tool to help you with your business and must never be used for personal whims.