Saturday, May 22nd, 2010
How do you build business credit fast?
Emeka N asked:
I have a 2 year old company but its been doing business only and we had no need to borrow money to fund anything. Now looking to expand, our road block is no business credit. How can we build it within 30-60 days. I’m talking a Business paydex score of 80 or better.
I have a 2 year old company but its been doing business only and we had no need to borrow money to fund anything. Now looking to expand, our road block is no business credit. How can we build it within 30-60 days. I’m talking a Business paydex score of 80 or better.
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May 22nd, 2010 at 8:49 am
It is very rare for banks to offer credit to private companies without a personal guarantee from its principals, regardless of the Paydex score offered by D&B. While the Paydex will be taken into account, the principals will still need to co-sign, generally.
There are several companies online which will provide you “instant” reporting lines on your D&B. This method is similar to the “authorized user” service offered by companies for your personal credit report. In my opinion, this practice is unethical, and the FTC may even make it illegal in the future.
Overall, there is no easy way to build business credit quickly, in the sense you describe. Since you have been in business for two years, if you have solid financials, you already have some weight should you go out and try and obtain a loan.
If you have poor personal financials, you may want to consider going to the SBA. Your two year old business financials will be intrumental in determining your eligibility for an expansion loan.