Before you begin applying for credit it’s important to determine what strengths and weaknesses your company brings to the table.
Are you a startup or have you been in business for several years?
Do you have projected revenues or actual revenues coming in year after year?
Does your company process credit cards on a monthly basis? If so, how much volume?
Are you struggling with poor personal credit or do you have strong credit scores?
Does your company have any assets or are you relying on your own personal assets?
Once you have made an honest assessment you’ll have a better idea of what types of credit your company will be able to start obtaining right away.
I have assembled the six major types of business credit applications along with some examples so you can easily identify which best fit the needs of your business.
Six Major Types of Business Credit Applications
- Personal Credit Check --Personal Guarantee -- Reports to Personal Credit Reports (majority of the business credit cards offered by major banks)
- Personal Credit Check --Personal Guarantee -- Reports to Personal Credit Reports and Business Credit Reports (Capital One Business Platinum: that card reports to Corporate Experian, Small Business Equifax, Experian, Transunion, Equifax)
- Personal Credit Check --Personal Guarantee -- Reports to Business Credit Reports (Discover Business, Comerica Business Mastercard)
- Personal Credit Check --Business Credit Check -- No Personal Guarantee -- Reports to Business Credit Reports (Sam’s Club Business Discover card)
- Business Credit Check -- No Personal Credit Check -- No Personal Guarantee -- Reports to Business Credit Reports (First Equity Card, secured business credit cards, vendor credit lines)
- No Business Credit Check -- No Personal Credit Check -- No Personal Guarantee -- No Business Credit Reporting (Merchant Cards)
While most businesses start off with trade credit and secured business credit cards you can easily obtain other types of credit depending on what you are willing and not willing to do.
If you are against a creditor pulling your personal credit then you have to realize that your business must be able to show that it’s a creditworthy company.
Creditworthiness starts with establishing strong business credit files, solid business credit scores and favorable bank ratings.
Marco is founder of the Business Credit Insiders Circle, a step-by-step business credit builder system for business owners. You may contact Marco directly at: ceo@startbusinesscredit.com
Follow Marco on Twitter @MarcoCarbajo and read more of his insights on business credit without using a personal guarantee.
