While there are many reasons to establish business credit for your company many small business owners overlook the advantages of financing their autos with corporate credit. I can’t emphasize enough the importance of keeping all your business related expenses and obligations separate from your personal credit files.
This includes minimizing the use of personal credit checks and personal guarantees to get business credit.
Ask yourself the following questions:
Are my business debts reporting on my personal credit files?
Does my auto loan or lease report to my personal credit files?
The good news is there are companies like GMAC that understand the importance of keeping personal obligations separate from your business debts. More importantly one program it offers reports your payments to your small business credit report and not your personal credit files.
Now you may have to provide the additional financial backing that GMAC requires like a personal guaranty if your corporate credit files cannot support the loan or lease.
Here’s a quick rundown of the benefits:
- Build business credit in your company name only.
- Your vehicle purchase or lease will not be reported on your personal credit reports, unless your business defaults.
- Added protection from liability, since your name remains off of the vehicle’s title and contract.
- Personal privacy since you are only personally contacted in the event of default
Now to take it a step further suppose your business needs to purchase multiple vehicles. GMAC also has a program called the GMAC Commercial Line of Credit.
The best part of this program is your business can provide the financial data it needs to establish a business line of credit with GMAC one time rather than provide the same information for each vehicle purchase. This is extremely convenient especially if you have to purchase or lease multiple vehicles at different times and at different dealerships.
Think about the positive impact this will have on your personal debt-to-credit limit income ratios if suddenly your future auto loans or leases stop reporting on your personal credit reports and now report to the business credit bureaus.
There are also several other major automotive companies like GMAC that offer vehicle financing programs designed to establish business credit while protecting your personal credit files.
To your business credit success!
Marco is founder of the Business Credit Insiders Circle which helps small business owners start business credit.
You may contact Marco directly at: email@example.com