Some TIPS about Corporate Credit
BUILDING CORPORATE CREDIT: Remember, Building Corporate Credit takes time. Be smart, there are no shortcuts. Don’t set yourself up as a victim. Do your due diligence if you decide to pay anyone to assist you, and do that due diligence before you pay them. Building corporate credit is a process. Build corporate credit before you need it.
To build corporate credit, you’ll need a corporation or LLC to build credit with. All sources agree. That’s where I come in. I create that corporation or LLC . You’ll be utilizing an attorney with 38 years of legal experience.
It’s not just about running your business it is about running your business right. Business is risky, but you can reduce the risks by incorporating or forming an LLC. For example, it doesn’t matter if you work out of your house, start a restaurant, retail store or construction company, take on a profession or provide consulting services. Remember, a properly structured corporation provides a shield between your personal assets and the activities of the business.
One advantage of structuring a corporation correctly is the increased tax benefits associated with being incorporated. By law, corporations are entitled to many tax deductions that are not available to individuals, sole proprietorships or partnerships. Those tax benefits could save you thousands of dollars annually. A properly structured corporation can protect your personal assets, reduce your taxes and provide a universe of pre-taxed “fringe benefits” such as retirement plans, deferred compensation, annuities, life insurance and medical reimbursement plans.
OBTAINING CORPORATE CREDIT is a process and that process can’t be hurried . Like anything else that is worth while, it’s going to take unhurried time. And, over time, it may be possible that your corporation could carry its own credit rating over time, without a guarantor . This makes it possible for your corporation, on its own , to raise capital and secure credit with financial institutions, and to obtain better rates with your business partners.
Tips to enhance your chances of obtaining corporate credit and a higher business credit rating (Source: Dunn & Bradstreet, Business Credit Reporting Agency)
- Separate your personal credit from your corporate business credit. This means that you want your business to be structured as a corporation or an LLC, NOT as a sole proprietorship or partnership where you and your business are one in the same and you are subject to UNLIMITED PERSONAL LIABILITY .
- It is best to separate business and personal credit as soon as possible .
- It’s also important to do most of your business with companies that will report to the major credit reporting agencies.
- They further recommend that your business has all the necessary licenses.
- That the corporation or LLC be registered with the major credit reporting agencies such as Experian and D&B.
To start building corporate credit your first step is to establish your business as a separate entity, to separate your business credit profile from your personal credit profile. This means you want your business to be structured as a Corporation or LLC. Call me, I will go over your options with you and make recommendations.