Why Build Business Credit

The importance of building business credit

After 20 years of working with small business owners, we’ve realized the lack of understanding most entrepreneurs have when it comes to their business credit and funding options. The vast majority of business owners, who are successful in obtaining business financing, establish loans and credit for their businesses improperly.

When properly obtaining credit and financing in the business name a business owner can…

  • Protect their personal credit scores
  • Ensure business loan information isn’t reported to their personal credit
  • Build the business’ credit separate from the owners
  • Minimize the need for personal guarantees
  • Obtain trade credit in the name of the business regardless of the owner’s personal credit score

92% of Businesses Do Not Qualify for Traditional Financing

Why do businesses tend to go to banks, try to get SBA loans, or try to obtain traditional financing before they take four simple steps to not only increase the likelihood of getting approved, but also to lower their interest rates?

The answer is simple: a lack of understanding of business credit. The result is predictable – 92% of businesses do not qualify for traditional financing – so almost all businesses that apply for traditional financing will get rejected.

Of the 8% who are qualified for financing, 80% of those are relying solely on the owners personal credit score.

Very few business owners understand the importance of building business credit. When an entrepreneur takes the time to build the company’s business credit profile separate from the owners, they not only increase the likelihood of getting approved, but they also increase the chances of obtaining lower interest rates, minimizing the need for personal guarantees and they protect their personal assets from possible creditors of the business.