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This document summarizes a small business workshop on building business credit. It discusses that business credit is important and different from personal credit, with business credit reports and scores ranging from 0-100 while personal credit ranges from 300-850. It encourages registering the business as a legal entity so payment history can be reported. The major differences between personal and business credit are outlined. Building business credit is important for obtaining financing, contracts, suppliers, insurance rates, and customer trust. The workshop provides tips for building business credit such as separating business and personal finances, using business credit cards, and ensuring on-time payments are reported to build a positive payment history over time.
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- 2. Tim Graczewski Vice President, Strategy & Business Development Presented by
- 3. Business has credit scores too 32 715 @navSMB #SmallBizLove
- 5. Where do credit scores come from Personal & Business @navSMB #SmallBizLove The National Credit Bureaus COMMERCIAL BUREAU SCORE PROVIDER
- 6. 0 - 49 50 - 79 80 - 100 Low Medium High Many different scores. (Too many?) 300 - 850 Personal Credit 0 - 100 Business Credit 0 - 300 350 - 850 VantageScore Intelliscore SBSS Paydex
- 7. Register your business as a legal entity Public records Info is sent by lenders and business creditors Reporting lines - How bureaus populate business reports @navSMB #SmallBizLove
- 8. Business Credit Score Utilization Business Data Payment History Length of History What Are Your Credit Factors? Debt to Income @navSMB #SmallBizLove
- 9. Do you have a thin file? @navSMB #SmallBizLove
- 10. Major differences between personal and business credit Difference in scores 1 No FCRA protection for business credit2 3 Business reports are more likely to have errors 4 Payments
- 11. Why you should care about your business credit
- 12. Business Credit Government & Enterprise Contracts Business Financing Trade Credit (Suppliers & Vendors) Insurance Rates How is Business Credit Used Potential Business Partners Business Credit Cards Customer Trust Equipment Leasing Commercial Real Estate @navSMB #SmallBizLove
- 13. Insufficient financing: 2nd most common reason for business failure - SBA Most small business owners rely solely on personal funds and credit for financing Business credit and getting financing 72% GET DENIED! @navSMB #SmallBizLove
- 14. Business credit and getting financing
- 15. Business credit and getting financing A business can access 10 to 100 times more credit than a consumer A business will use credit at 10 times the rate of a consumer @navSMB #SmallBizLove
- 17. How to build your credit profile Get Set Up Correctly: Get your current business and personal scores (2 min) Incorporate your company (2 days) Establish EIN (1 hour) Open a business bank account Establish credit lines for your business • Open business credit card • Get your key vendors/suppliers reporting Get a DUNS number (optional) 6 3 1 2 4 5
- 18. Separate business from personal Business bank account - ensure contact details match business reports 1 Charge business expenses to your business • Company credit cards • Use accounting software 2 Business insurance3 Build business credit4 @navSMB #SmallBizLove How to build your credit profile
- 19. How to build your credit profile No thin files!2 Pay early if you can. Never be late 4Check regularly1 • Dispute if necessary Make sure credit and trade lines are reported 3 • Get at least 4 Plan your future5 @navSMB #SmallBizLove
- 21. www.nav.com QUESTIONS ?We are here to help