Credit allows businesses to boost inventory and staff, increase market share, and maintain cash flow. Try these tactics to establish business credit:
Make sure your personal credit is solid. Once a year, you can check it free through reporting services Equifax.com/home/en_us, Experian.com and Transunion.com. Obtain a business credit card. Pay off charges in a timely manner. If vendors will give you payment terms, pay on time. “Ask them to serve as references when you apply for a line of credit,” says leadership consultant Stever Robbins. Maintain clear records that show credit management. If you lent personal funds to your business, document repayment. Be prepared. “Before approaching a lender, entrepreneurs must have a well-rehearsed elevator pitch and sufficient research to show their ideas have legs,” says Norman Scarborough, entrepreneurship professor at Presbyterian College in Clinton, S.C. Provide documentation. Be ready with years of business tax records and earnings statements to prove financial stability. Lenders may also request a business plan to gauge future potential.