1st Step: Credibility

Goal: to build a sure database for your company. The Creditors will verify your information, they want to feel comfortable enough to lend.

First we would ask you to set up a Business Entity or verify your Business Entity is set up correctly

  • Why do you need a business entity to build business credit?

    Best for Building Business Credit:  LLC or Corporation (S or C Corporation). Creditors, Lenders, Trade Accounts and so on prefer to see an actual business entity.  Furthermore a separate entity can separate you personally from the liability of operating your business.

  • What kind of information we will request in this step?

    • Business Name

      Building strong business credit and getting approved for financing is all about paying attention to the details. It is very important that we have your exact business legal name. This includes the recorded DBA filing (not required) you will be using.

    • Business Address

      What better proves to a lender that you are a real business than having a real business address? Do not use a post office box or UPS box (can flag your file as high risk).
      You can use your home address for business credit building, but be aware that some lenders will not fund “home based” businesses. This will not stop you from building business credit scores, but may limit some of your funding options.

    • Business Phone, Fax & 411

      The perception lenders, vendors, and creditors have of your business is critical to your ability to build strong business credit. This perception is why we highly recommend that you have a business phone number listed under 411, and optional “800” numbers or Fax Number.

      1. Business Phone Number:You must have a dedicated business phone number that is listed with 411 directory assistance, under the business name. Do not use your home number, cell number or other non business numbers it may “flag” your business as a higher risk. Lenders, vendors, creditors, and even insurance providers will verify the business phone and look for the 411 listing.
        (Note: you can forward a virtual number to any phone number, see the information in the box above)
      2. Business Phone Number:Does your business need a fax number?  It can be more cost effective and efficient to use a virtual fax number.  You can fax and receive faxes by using your email account.
      3. Submitting Your Number to 411 Directory:

        *** DO NOT USE CELL OR RESIDENTIAL PHONES ***

        You have the option to submit your business name and phone number for listing with the national 411 directory. This is a courtesy service and we cannot guarantee every submission because we are simply passing your information to 411. Please do not enter a cell phone or home phone number in the field provided. Only enter a business land line or a virtual number (VOIP or local area code numbers from providers like Ring Central, etc.).
        (Note: Allow up to 2 weeks for your phone number to show as listed. After selecting Yes you’ll need to click the “Save & Continue” button in order for your information to be submitted to 411.)

      4. Verifying Your Business is Listed:You will need to verify that you are listed under 411.  If possible, do not use a cell phone to check your listing! Once you fill in the listing information on your account it will be AUTOMATICALLY sent to 411.

 

    • Business Website and Email

      Many creditors will search for a business web site when verifying that a business is credible, to learn about their business, and verify information they have received about the business.
      It is important to get a company email address for your business. example is an email like support@yourcompany.com or john.smith@yourcompany.com. It’s recommended to avoid is using a free service like yahoo and hotmail. The Email address has to be “@yourcompany.com”.

      There is nothing worse than potential credit providers noticing your company email address is partychic2009@yahoo.com. Setting up a business email address is just too easy and inexpensive to neglect. It’s important for the business to be professional in even the smallest ways.

    • EIN and Business License

      Employer Identification Number (EIN)
      Whether you have employees or not, your business entity must have a Federal Tax ID number (EIN). Just like you have a Social Security Number, your business has an EIN. Your Tax ID number is used to open your bank account and to build your business credit profile. If you have an EIN, you may still need a new one if:

      • Your business is subject to a bankruptcy proceeding.
      • You form a new corporation or change the corporate name.
      • You take in new partners and operate as a partnership.
      • You purchase, or inherit, and plan to operate an existing business.

 

    • Bank Account and Merchant Services

      Business Bank Account
      It is important that your business has a business bank account for these reasons and more. Having a business checking account will allow you to keep your business funds separate from your personal for tax and legal purposes. If your business has a business checking account you will be able to receive and pay right from your business. Furthermore there are creditors that will lend based on revenue flowing through your business bank account and/ or merchant account.

  • What is the best bank or account for me to choose?

    Simply put pick a bank and account that is convenient for you. Sometimes it is helpful to stay with the bank you have personal accounts. Look at the business bank account cost, features, and the technology your bank offers that may help you run your business more efficiently.

    Open your bank account with a Business Specialist. Not all bankers are created equally and opening your account with a banker that frequently deals with business owners may entitle you to more information, a better overview of features, or the presentation of more in-depth business products that may help your business. While you are opening your account create a relationship with your banker. Businesses typically need a banker on their side to help with questions, issues, and so on.

  • My business bank account is currently a personal checking account or in a different business name, how do I get that fixed?

    Every bank may handle this a little bit different but in general they may have you open a new business bank account.  Especially if you are transferring from a personal checking account.

  • I need to open a business bank account, what should I take to my banker?

    We suggest calling ahead of time to make sure a Business Account Specialist is available before going by your local branch.  When it is time to open you account each bank may have varying protocols but typically you will need to bring the following:

      • All Signers / the majority business owner should be present
      • All signers should be prepared to provide a Drivers License or Legal Identification Card
      • They will verify all signers through ChekSystems
      • IRS EIN Letter
      • Articles of Incorporation (for corporation and LLC)
      • Operating Agreement or relative meeting minutes
      • Certificate from the Secretary of State documenting your LLC or Corporation filing

 

    • Merchant Credit Card Processing
      It’s proven that clients will spend more if they can pay by debit card or credit card. Could your business benefit from taking debit cards or credit cards? There is no shortage of sources out there that can provide you with a merchant account, a processing gateway and any necessary equipment so you can accept credit cards from your customers. In fact, your bank will more than likely want to be that merchant solution for your business.However, it’s important to explore your options before setting up a merchant account with your bank. It might be convenient but can also greatly limit your financing and credit options both short term and long term. For example, there are funding programs based on your merchant processing and not on standard credit underwriting that can provide ongoing access to cash for your business.

 

    •  Verify Your Business is Listed CorrectlyAction Item:You must confirm that every agency, creditor, supplier, and trade credit vendor has your business listed the exact same way. You must be listed with the exact same spelling of your business name and the exact same address and phone number. Take the time to verify that these main agencies (State, IRS, Bank, and 411 national directory) have your business listed the same way and with your Exact Legal Name. Also take the time to ensure every bill you get (power bill, phone bill, landlord, etc.) has the business name listed correctly and comes to the business address.

 

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