Top 10 Reasons to Start Business Credit in 2009
Top 10 Reasons to Start Business Credit in 2009
Entrepreneurs and small business owners who have a separate legal entity for their
business have a unique opportunity that no other individual or sole proprietor has.
It’s the opportunity to start business credit by establishing a business credit
profile that is completely separate from a personal credit profile.
The main problem still facing today’s small business owner is fewer than 10 percent
know about or truly understand how business credit is established and tracked-and
how it affects their lives and businesses.Statistics even show that over 65% off
all small businesses use credit cards on a regular basis; but the problem is less
than half of those credit cards are actually in the business name. The others
continue to use the owner’s personal credit cards for business transactions.
One of the key advantages of having business credit is instead of putting your
personal credit and assets at risk every time your company requires financing you
would now be in a position to secure the financing you need with your businesses’
credit. Here is the ‘Top 10 Reasons Why You Should Start Business Credit Now.’
1.Any debt you accumulate for the business would only report to your business
credit file not your personal credit file.
2.Eliminate the co-mingling of funds–and this includes the “co-mingling” of credit
profiles so you won’t jeopardize the protection of the corporate veil.
3.Protect you and your family from personal liability when you get approved solely
on your businesses’ credit file.
4.Improve your personal debt to credit limit ratios by transferring the balances of
business debt used with your personal credit to your business credit.
5.Eliminate personal liability you have on your existing business debt by balance
transfer from personal credit to your business credit.
6.Increase your personal credit limit availability for you and your family.
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Top 10 Reasons to Start Business Credit in 2009
7.Improve the appearance of your businesses’ funding capacity and stability.
8.Eliminate inquiries on personal credit when applying for business financing.
9.Increase your businesses’ ability to obtain cash credit 10 to 100 times greater
then you can obtain personally.
10.Last but not least you SAVE MONEY! For example, an individual might pay up to
13% interest on a $100,000 line of credit whereas a business could qualify for an
interest rate of 7%. That would save you almost $40,000 in interest alone.
Some other benefits include:
*Business credit cards have much higher limits than personal credit cards.
*Having the larger cash lines available for unforeseen expenses like expansion,
equipment, operations or fulfillment
*Prevent the risk of damaging your personal credit
*You can build business credit even if you have bad personal credit
*Prevent the limits that lenders will impose on you for personal credit for you and
your family’s needs
*Reduce your tax burden and improve accounting
Still not convinced you need to start business credit? Every business will at one
point require an influx of cash in order to cover operating expenses, expansion
costs, legal fees, inventory or a range of other items the business may require in
order to operate. The worst mistake you can make is seeking funding when your
business needs it most. Lenders extend cash credit lines to businesses that don’t
need the capital. Start digging your well before your business gets thirsty!
If you ask any business owner how they financed their business start up the answers
usually are:
-Personal credit cards
-Tapped into home equity line
-Personal loan from the bank
-Personal loan from family & friends
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Top 10 Reasons to Start Business Credit in 2009
-Private investors
One of the many risks that business owners face is using their personal assets as
collateral or guarantee for business loans and financing. If the business owner
defaults on a loan then, valuable items like a car, house, or bank account can be
vulnerable to creditors’ claims.
Instead of jeopardizing your personal credit and assets every time your company
requires financing, you can use the business’ credit rating to secure the financing
you need with even more favorable terms and lower interest rates.
About the Author
Marco Carbajo is a business credit specialist, author, speaker and founder of
http://www.startbusinesscredit.com. Want to learn more about how to build business
credit and obtain unlimited financing for your business? Claim Marco's popular FREE
business credit seminar ($597 Value),available at:=>
http://www.businesscreditblogger.com
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