All you need to know abour business credit.

1. Business Credit

2. Your 3 Types of Credit
• Every business has 3 types of credit:
• The Consumer credit of the business owner
• Bank Credit
• And Business Credit

3. Consumer Credit
• Most business owners are familiar with their consumer credit
• This is credit that reports to the consumer credit reporting
agencies TransUnion, Equifax, and Experian
• Scores range from 350-850
• Credit is linked to the owner’s Social Security Number

4. Bank Credit
• Most business owners don’t know that banks have their own internal
scoring system for businesses
• This scoring system is known as Bank Credit, or a Bank Rating
• This score is based on how you manage your business bank account
• Having $10,000 or more in your bank account will give you a good
bank credit score

5. Business Credit
• A business also has its own credit profile known as business credit
• Credit reports to the business credit reporting agencies Dun &
Bradstreet, Equifax, and Experian
• Scores usually range from 0-100
• Credit is linked to the business EIN number, not the owner’s SSN
number

6. Business Credit Benefits
• No link to consumer credit… so no personal credit check is required…
and accounts don’t report to the consumer agencies
• No personal guarantee is needed in most cases
• Credit limits are 10-100 times higher than with consumer credit
• You can build business credit and get a good score FAST
• Having business credit increases the value of your company
• You won’t need financials or collateral for approval

7. Business Credit
• With consumer credit, just because you have a SSN doesn’t mean you
have an established credit profile
• To get a consumer credit score and profile, you first must:
• Get approved for accounts that report to the consumer reporting
agencies
• Use those accounts
• Pay your bills for those accounts
• Then and only then will you have an established credit profile and
score for your SSN

8. Business Credit
• Just like with consumer credit, just because you have an EIN doesn’t
mean you have an established business credit profile and score
• To get a business credit score and profile, you first must:
• Get approved for accounts that report to the business reporting agencies
• Use those accounts
• Pay your bills for those accounts
• Then and only then will you have an established credit profile and score
for your EIN

9. Business Credit… The Best Kept Secret
• Entrepreneur.com reports that 90% of business owners know nothing
about business credit
• Business credit is usually reserved for established businesses, or those
that meet a certain criteria for approval, and often is used by companies
big enough that they have a CFO
• But any business can actually establish business credit, the key to success
is knowing the formula for success, and knowing what steps to take and
in what order

10. Step 1… Insure Your Business is Credible
• Business credit isn’t highly promoted in stores, or with
cash credit sources
• So usually only larger businesses take advantage of it
• Credit issuers and lenders like it this way, because usually
those larger companies are more established and have
less of a risk of default
• But it’s not actually the size of your company they look at
for approval
• To get approved your business must pass a test that
shows the credit issuers and lenders that you are
credible, no matter your size

11. Step 1… Insure Your Business is Credible
• If you pass this test and are credible in their eyes, you’ll be approved for
business credit… many times you get approved automatically by their
computers without someone manually reviewing your application
• So your business size, and how long you’ve been open, aren’t really the
driving factors for your approval
• Passing this test is
• This means even if you just opened your doors yesterday and have little
or no revenue, you can still be approved with most business credit
sources… as long as you pass their test

12. The Credibility Test
• You must have a physical business address, or use a virtual
address
• You’ll need to have a business phone number, preferably a toll
free number… and it’ll need to be listed in 411
• You’ll need a business fax number
• You should have a professional email address, and website
• You must have the proper licenses for your business, industry,
city, county, and state
• You need an EIN, entity setup, and bank account
• There are actually 20 items on this test that will be reviewed

13. Make Sure You Get Vendor Accounts FIRST
• Once you know your business is setup credibly, it’s time to
apply for new business credit
• When establishing business credit, there’s actually three
types of credit you can get:
• Vendor credit, starter accounts that offer Net 30 terms
• Store credit, revolving credit cards available in retail stores
• Cash credit, revolving credit cards such as Visa and
MasterCard that card issuers or banks approve you for

14. Get Vendor Accounts FIRST
• The biggest mistake entrepreneurs make when building
business credit is that they try to apply for store or cash credit
first, and skip vendor credit
• But stores and banks will NOT approve a business owner for
credit until their EIN credit profile and score are established
• If you try to apply for store or cash credit without an
established business credit profile and score, you’ll be denied…
100% of the time

15. Get Vendor Accounts FIRST
• You must get approved with vendors first who offer Net 30 terms
• Then after you use those accounts and pay your bills the accounts will
get reported to the business credit reporting agencies
• Then and only then will you have an established business credit profile
and score
• Once your business credit’s established, you can start to get approved
for store revolving credit next

16. Get Vendor Accounts FIRST
• You should seek out vendors who will approve a business for credit,
even if none is established yet
• There are actually many vendor sources who are well known for this:
• Uline
• Quill
• Reliable
• Laughlin and Associates
• Just to name a few

17. Get Vendor Accounts FIRST
• To start business credit, you first should get approved for accounts with
these vendors
• Some will require you purchase their products first
• Some will have you make 3 orders and pay before they’ll issue you a
line-of-credit
• But all of the sources I listed will approve a brand new business, even if
you have no credit now

18. Get Vendor Accounts FIRST
• You’ll want to insure you have a total of 5 payment experiences
reported before you even think of applying for store credit
• A payment experience is the reporting of an account to a business
reporting agency
• So Quill for example reports to both D&B and Experian
• That means that one account will count as two payment experiences
• Laughlin only reports to Experian, counting as one payment experience

19. Monitor Your Credit Building
• You’ll need to know how many payment experiences you have
established before trying to apply for store credit
• So get and review your business credit reports as you go to watch
your credit being built in real time
• You should at least get your reports with Experian and Dun and
Bradstreet because they are the biggest of the business credit
bureaus

20. Get Revolving Store Accounts
• Once you have 5 payment experiences reporting, next you can start to
secure revolving store credit cards… for your EIN
• KEEP IN MIND, all applications will ask for your SSN… but you do NOT
need to provide your SSN on the application
• If you do supply your SSN, they WILL pull your personal credit… and if it’s
bad you’ll get denied
• When you leave the SSN field blank, they’ll pull your business credit
• And once they see that you have business credit
established and at least 5 payment experiences
reporting, then you’ll start to get approved for
store credit

21. Get Revolving Store Accounts
• Most major retailers do offer business credit as well as consumer credit
• Staples, Office Depot, Home Depot, Lowes, Target, Walmart, Costco,
Sam’s Club, Radio Shack, Best Buy, BP, Chevron, Amazon, Shell, and most
other stores offer business credit
• Some sources like Home Depot, might have more stringent approval
requirements and want to see big revenue and 3 years in business for
approval of no personal-guarantee credit
• But most sources don’t have these requirements, if you have business
credit established

22. Get Revolving Store Accounts
• WARNING!!!!!!!!!!!
• Do NOT put your SSN on the application
• Do NOT apply for revolving store credit without having at least 5
payment experiences reporting to the business credit reporting
agencies
• If you do either of these, you’ll be denied or you’ll have to give them
your personal guarantee

23. Get Revolving Cash Credit Accounts
• Once you have a total of 10 payment experiences reported to the
business bureaus, then you can start to get cash credit cards
• Cash cards are those issued by Visa, MasterCard, even AMEX, and are
cards you can use anywhere, not just cards you can only use in one store
• It’s recommended that at least one of your 10 payment experiences has
a high limit of $10,000 or more before applying for cash credit
• Dell is a revolving store source who regularly approves business owners
with established business credit for an account with a limit of $10,000 or
more

24. Get Revolving Cash Credit Accounts
• Key Bank, and Home Depot are two sources that offer revolving cash
credit cards you can use most anywhere
• Many banks offer these also
• Just keep in mind, before applying you MUST have at least 10 payment
experiences… and once account should have a limit of $10,000 or higher

25. You did it!!!
• When you follow these steps, your business can have an established
business credit profile and score
• This profile and score can then be used to get you credit in your business
name, regardless of your personal credit, and without a personal
guarantee
• Then you’ll want to continue building business credit, applying and
getting more credit, using that credit, and getting approved for higher,
and higher credit limits

26. Business Credit
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