smithdesign how to establish business credit (From AOC)

[roybean]

01-19-2005, 02:48 PM
smithdesigncache smithdesign is offline

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Default Here's How to Establish Business Credit Establishing business credit is tough, especially for a new business. But remember: It CAN be done, and it's easier than you think. Follow these steps, and you'll be on your way to an excellent credit profile. Here is what I have learned: ~Set up a Corp business. Smart to protect yourself and the only type of business that allows you to keep your business credit and personal credit seperate. LLCs and Sole are okay for contract work or property investment, but you still should get a Corp to manage them. ~Once you get your EIN, through registrastion, set up your business phone. You will need to make sure it is at an address not the same as your home (because it is not looked upon favorably by the lending world) and the phone will need to be registered in the 411 directory. Quite a few have had success with calling the local phone company and getting a call forwarding number. It is a business number that automatically forwards to any desired phone. Make sure it will list with 411 before signing up however. ~After receiving your first phone bill, go to www.staples.comcache and fax in copy of application along with copy of phone bill to apply for business credit. Use professional letterhead for coversheet. You should receive the standard $750 credit line with no personal guarentee (herein referred to as "PG"). ~Also during this time go to www.dnb.comcache and register your business to receive a D&B number. It will take 30-40 days to receive it in the mail. If you want to establish business credit sooner, you can pay for the credit builder ($399), but it's not required. After you have at least 5 business accounts reporting, you'll receive a paydex rating (similiar to FICO for personal credit). *REMEMBER - a paydex score will only take into account your payment history. Unlike personal credit, this is counted in days. For example, if you pay your invoices 14 days late, it will be reported as such. If you pay your account off before the statement or invoice comes, it will be reported as such. The bottom line: Pay your invoices on time, and you will get a better paydex score. ~Set up the following business accounts, and make at least one purchase, you want to pay this off BEFORE the first statement hits: *1. UPS - www.ups.comcache 2. FedEx CONTACT Revenue Services Department 1-800-622-1147 press 4 then 1 3. Barnes & Noble CONTACT Purchase order department 1-212-414-6000 4. Quill Corporation 100 So Schelter Lincolnshire, IL 60069 CONTACT Credit Department 1-800-634-3090 *5. Viking 8200 East 32nd St No. Wichitas, KS 67226 CONTACT Credit Department 1-888-454-5457 6. Rapid Forms 301 Grove Rd Thorofare, NJ 08086 CONTACT Billing Departement 1-800-257-5287 *7. Nebs - www.nebs.comcache *11. Office Depot www.officedepot.comcache Apply online (*- Really easy to get) ~Need a cell phone? Once you have a EIN and D&B# apply for a business account. Usually T-Mobile is the easiest to get credit with, but I've heard that Sprint, cingular, and Verizon are easy to get as well. Nextel? Good phone, but you have to jump through a lot of hoops, and you usually have to put down a deposit. ~If you have at least 30-45 days to use, the following companies automatically report to D&B creating your business file: -FedEx -UPS -Staples -Viking -Nebs -Office Depot ~Once you have a paydex score of 75+, you can apply for Lines of Credit (herein referred to as "LOC") or business Credit Cards without any sort of PG. The cards/accounts desired are: Enterprise Rent a Car (Corp. Rental) www.enterprise.comcache Wells Fargo Bank (Visa/Mastercard) www.wellsfargo.comcache Bank of America (Visa) www.bankofamerica.comcache American Express (Green/Gold) www.americanexpress.comcache Chevron www.chevron.comcache Mobil www.mobil.comcache MBNA Bank www.mbna.comcache Wells Fargo (Line of Credit) www.wellsfargo.comcache Bank of America (Line of Credit) www.bankofamerica.comcache Union Bank (Line of Credit) www.unionbank.comcache Cal Fed www.calfed.comcache United California Bank www.unitedcalbank.comcache Most companies will not ask to see financials for loans of 50k or less. I hope this helps, and I wish the best of luck to you in your pursuit of credit.

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Old 01-25-2005, 09:07 PM
FPPcache FPP is offline

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Default Re: Here's How to Establish Business Credit
Very good information. I must say however that it appears wells fargo, bofa and other finanical institutions require the authorizing officers ssn and other personal info., implying a PG is required. Please correct me if I am wrong. SmithDesign would you confirm whether this is valid. Thanks in advance.
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Old 01-28-2005, 02:34 PM
txcreditcache txcredit is offline

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Default i am a little confused and new to the site
really liked what i have read so far but i was under the impression that a llc was a corp. please help me to understand because i was just about to file my paper work for a llc but you said it is better to file corp status when obtaining business credit. give me the best advice for this because i am in texas

sincerely
txcredit

p.s. how do i register my phone with the 411?
txcredit





Old 01-28-2005, 05:44 PM
akaimushicache akaimushi is offline

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LLC = Limited Liabilty Corporation. You are liable for the amount of investment you put into the company.
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Old 02-08-2005, 02:51 AM
smithdesigncache smithdesign is offline

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Default Sorry about the delay
Sorry about the delay, I was on vacation.

As far as the question about wells fargo, most companies will require a PG for Visa/MC credit cards. Only in extreme circumstances have I seen people get them without one. If anybody does, let me know. Sorry about the confusion.

About LLC's and Corps. : A regular corporation looks better when applying for business credit. Not to say that it can't be done with an LLC, S-corp. or even a sole prop. Most of the starting accounts that I've listed will usually approve you either with a net 30 or revolving with no PG. But down the road, an LLC or an S-Corp. MIGHT hinder you progress when your trying to obtain those massive credit lines. The bottom line is stick with what works, develop a credit profile, keep it in good standing, and work your way up.

P.S. Just because they ask you on the application to give a PG doesn't mean you have to fill one out. If I had a credit line for every time I've seen that... oh wait... I do! LOLOLOL

Hope this helps. Best of luck to you both.
smithdesign
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Old 02-08-2005, 03:51 AM
cementocache cemento is offline

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Default i followed the advice on this board...I have an LLC
Update here from me...although I don't post alot, I read this board with an obsession. I have followed bits and pieces of the advice on building business credit and used most everyones advice just not in particular order set up.

So...to date here is what I've been able to accomplish in less than 4-5 months with NO PG

**Office Depot - $250
**Nebs Net 30 account (unsure of limit since I only ordered 100.00 of stuff
**Viking -- Net 30 with at least a $500 limit since that is what I have ordered and received
** Home Depot - $2500.00 CL
** Lowes - $2500.00 CL
**Sam's Club Business -- $2000 CL
**Northern Tool -- $400.00 CL

And today, I don't know how...cause I have a bad FICO (560, 513, and 470) score personally, but I received a Citi Bank Platinum Businss Card with a $4k limit !!

All I can say is this board rocks!! Thanks to all who post the wonderful information on here...it WORKS.
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Old 02-10-2005, 04:33 PM
Tonigcache Tonig is offline

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Default Help!
Hello!

Thank you for the wealth of information!! I have ran into a snag. My local telephone company will not bill my second line to a different address for my home business.

Are there any suggestions on company's that install second lines at a minimal rate? Or if I get a toll free number will it be able to be listed with 411??? Help!

Thank You!!
Tonig






Old 02-12-2005, 06:33 PM
skywalkercache skywalker is offline

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Thats is a good question about phone lines. How can I put a business phone line when my business adress is a mail boxes etc.... Any suggestions..
skywalker






Old 02-13-2005, 03:53 PM
Petrorecoverycache Petrorecovery is offline

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Quote:
Originally Posted by skywalker
Thats is a good question about phone lines. How can I put a business phone line when my business adress is a mail boxes etc.... Any suggestions..

I have a PMB and still have a toll free number. The bill is sent to the mailing address. I ordered a 800 number through tollfreemax.com and then called my local phone comapny (SBC) and asked to be listed in their directory. I was told I could pay under $5.00 per city I asked to be listed in. I then decided I'd see if I could get a remote call forwarding number. It costs me under $15 a month and is listed in the 800 directory (national) and through 411. Either route will work.

If you are in Los Angeles, I can provide you with contacts.
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Old 02-14-2005, 09:50 AM
gmancache gman is offline

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As for the credit card (MC/Visa/Amx) I have found that they all try to tie
you personally to the card. For example (my corp had a Paydex of 80)
I applied for a true American Express Corporate Card for large
corporations. MY company at the time (3 years ago) had trade lines of
over $500,000 with 2 companies. Amex approved the card without checking my credit or needing a PG. They gave me $250,000 credit limit.

Granted this was payable in full every statement and it was no problem at the time.

Then a customer burned me for close to $500,000 which I tried to recover
from. I finally filed Ch7 12/2004, giving up because with the current admin in DC there is no recovery happening.

Anyway, I owed Amex $16,000 and the usual collections proceeded, then it went to a attorney who filed suit against me personally!. This was a C-Corp(DE) so I had to pay
my attorney to represent me (total to ch7 $5,800) I had every print out from my application which showed the account had NO PG and no responsibility except the CORP.

Anyway they (AMX) changed attorneys from a local one to a NYC one who is a real bottom feeder

Amx never provided any documents to the court with a Sig or agreement
they also check my personal credit (attorney)posted the default on my personal credit, etc.... I ran out of money with my attorney and the $1200 to file CH7 seemed the best deal. I listed all corp debts along with personal just so Corp Creditors could not pierce the corp veil later to come after me again.


BE CAREFULL, KEEP COPIES OF APPLICATIONS/AGREEMENTS FOREVER!!!!!
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Old 02-14-2005, 11:40 PM
magyartcache magyart is offline

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Default Business Credit Application with Barnes & Noble
I have a five year old LLC and tonight I completed the "Corprate Discount Application" for Barnes & Noble. It was simple. Company name, address, accts. payable contact, and federal tax number.

This is different from the card you may apply for online.

Good luck to everyone establishing their own LOC.
magyart





Old 02-15-2005, 10:12 AM
holdenoversoulcache holdenoversoul is offline

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What if I already have paydex. Do they add vendors who report as I add accounts or do they just keep who I have? If I already have 5 reporting is there any benefit to adding more?
Ho do I find our corporate credit score? I understand this is a different # from paydex.

Awsome info!
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Old 02-16-2005, 04:09 PM
smithdesigncache smithdesign is offline

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The more credit lines you have in good standing, the better your business looks when applying for more lines. As far as PayDex goes, you should only need 5 lines with about 90 days of payment history for each line. There's no added benefit to adding more lines; as far as PayDex is concerned.

Remember: A PayDex score ONLY scores payments. Nothing else.

The bottom line is this: Get credit for the things that you need. Not what you want.

Too many businesses out there get as many credit lines that they can, and max them out; only to find themselves in over their heads. And while some are responsible, some are not. For example: If you are a company that has $50000 a year in sales, and you have one or more credit lines totaling $25000, chances are you would have a hard time repaying that debt. (being maxed out) Stick with what works for your business, and don't get overextended. Hire or befriend a good accountant, and seek good financial advice.

While this board is an excellent source of credit information relating to business, it has to be interpreted to match the goals of your specific business.

Hope this helps,
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Old 02-17-2005, 11:00 AM
holdenoversoulcache holdenoversoul is offline

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Default
Got a 77 paydex already but want to push it up. Adding more vendors helps I guess? don't mean to be redundant but still not sure.


Total in D&B's file 18 58,950 50,000

Top 10 Industries:

1 Telephone communictns 4 650 250 58 42 - - -
2 Misc publishing 3 3,350 2,500 14 49 - - 37
3 Nonclassified 2 50,100 50,000 100 - - - -
4 Public finance 2 2,000 1,000 100 - - - -
5 Radiotelephone commun 1 1,000 1,000 50 50 - - -
6 Granite mining 1 750 750 100 - - - -
7 Misc business service 1 500 500 50 - 50 - -
8 Whol electrical equip 1 50 50 100 - - - -
9 Executive office 1 50 50 100 - - - -
10 Whol auto parts 1 0 0 - - - -
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Old 02-17-2005, 01:48 PM
gmancache gman is offline

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Default
What helps your score is number of employee's.
More employee's changes your rating to a larger business.

Trade lines, length of time, credit limit

[eriksalmon]

The information in the original post is for the most part correct. How ever there is a lot of information that is missing.

There are steps that have to be taken prior to applying for credit that have not been addressed.

Once your corp is set up you will need to have a physical location for your business along with a business lic. to that location. Home or office space does not matter. This is not a resident agents address or post office box.

The tax id is also correct how ever if you setup divisions (DBA) under your corp. the divisions will use the same TIN/EIN. It is illegal to file for separate TIN/EIN for the corp. divisions. You can go to: www.irs.gov and fill out the online SS4 form and get your number in 30 seconds once you submit the form.

You must have a business bank account set up.

Yes the phone listed in 411/directory assistance is correct. This is because it is easy for creditors and credit reporting agencies to verify your business simply by calling 411/directory assistance. Also call 411/directory assistance to verify you are listed, some times things fall through the cracks and it would be a sham that you get turned down because of something as simple as no being verifiable.

You must also get your DUNS number prior to applying: go to www.dnb.com They will want you to purchase their credit builder program. You do not need it. They will lie and say you do. The only thing I would purchase is the expedite of your duns number. Last time I checked it was $70. You will get your number in 5 days by expediting.

Before applying for any credit account you will want to know exactly what type of funding your business needs and then take a look at what the funding options are for each type of need. Just applying for credit accounts for the sake of obtaining credit is not smart business. You also have to take a look at your cash flow to determine how the credit accounts will be paid.

One last thing. Corp. Credit is for business growth and cash flow. I have found that most first time business owners find this out too late and they find the business in debt. Do not treat your corporate credit like a consumer credit card. If you do you will fall into the same debt trap consumers find them self’s in very fast.

Good Luck in your new business.

[Hedwig]

Great information. Thanks.

[roybean]

Quote:

Originally Posted by eriksalmon The information in the original post is for the most part correct. How ever there is a lot of information that is missing. There are steps that have to be taken prior to applying for credit that have not been addressed. Once your corp is set up you will need to have a physical location for your business along with a business lic. to that location. Home or office space does not matter. This is not a resident agents address or post office box. The tax id is also correct how ever if you setup divisions (DBA) under your corp. the divisions will use the same TIN/EIN. It is illegal to file for separate TIN/EIN for the corp. divisions. You can go to: www.irs.gov and fill out the online SS4 form and get your number in 30 seconds once you submit the form. You must have a business bank account set up. Yes the phone listed in 411/directory assistance is correct. This is because it is easy for creditors and credit reporting agencies to verify your business simply by calling 411/directory assistance. Also call 411/directory assistance to verify you are listed, some times things fall through the cracks and it would be a sham that you get turned down because of something as simple as no being verifiable. You must also get your DUNS number prior to applying: go to www.dnb.com They will want you to purchase their credit builder program. You do not need it. They will lie and say you do. The only thing I would purchase is the expedite of your duns number. Last time I checked it was $70. You will get your number in 5 days by expediting. Before applying for any credit account you will want to know exactly what type of funding your business needs and then take a look at what the funding options are for each type of need. Just applying for credit accounts for the sake of obtaining credit is not smart business. You also have to take a look at your cash flow to determine how the credit accounts will be paid. One last thing. Corp. Credit is for business growth and cash flow. I have found that most first time business owners find this out too late and they find the business in debt. Do not treat your corporate credit like a consumer credit card. If you do you will fall into the same debt trap consumers find them self’s in very fast. Good Luck in your new business.

Keep it coming as we don't have many business advocates posting as of yet.

[2gorjus4u]

Has anyone heard on Tom Kish?? He giving a Seminar on How to Get unsecured Business Lines of Credit without personal guaranteeds. Is this possible? Please reply I'm registering for his class this weekend.

[roybean]

Haven't heard of Tom Kish.

[Qtip]

Quote:

Originally Posted by 2gorjus4u Has anyone heard on Tom Kish?? He giving a Seminar on How to Get unsecured Business Lines of Credit without personal guaranteeds. Is this possible? Please reply I'm registering for his class this weekend.

Never heard of him, however getting business lines with no personal guarantee is possible. You have to buil up the business credit first, start with basic cards.

[2gorjus4u]

Thanks Qtip for the info. I have 9 lines of business credit with D&B and one line w/Experian. How should I proceed to obtain LOC without PG. Thanks for your feed back.

[iwantbigcredit]

i have the tom kish course someone asked about. while it doesnt impart any real magic info, it is a nicely condensed version of a lot of the info you would find here or on the old art of credit forum. but i do not believe the lenders he uses do not ask for a personal guarantee. i have some of the lines and as i recall they did require it. toms issue is that they dont affect your personal credit score for using the lines in full. his idea is to use the money in your business or real estate investing to cover necessary cash needs till you hit big paydays. while i do think he provides a valuable course i think most people would have the most interest in the 4-5 pages that list the lenders he is talking about.

now as far as true cash credit lines i know of a couple of groups that can offer to help you get several $50k plus lines at a time but they want anywhere from 5-10% of the amount of credit they get you approved for. but if you got $500,000 unsecured and paid them $50,000 for it and made a few hundred thousand it would work out in your favor. but even for those they want a corporation with 2 yrs plus and a min 680 personal scores.

i hope the info helps.

[Hedwig]

Most business credit is not reported on your personal credit report. That's what they mean by "hiding" credit. You get the money or credit on your business lines and keep your personal ratio in line so it doesn't kill your score.

[Enigma]

While I will not say that the information touted by Mr Kish is fraud, but it is very close, in my opinion.

While Smithdesigns info is a little dated, it is still sound.

You can get a business telephone number by getting what is called Remote Call Forwarding Number. Have that number forwarded to a cell or VoIP account.

As for business address, stay away from UPS stores and other branded mailbox type places. The CC and D&B have flaged them. If you must use one of these places, go to a mom & pop type place. But it is very acceptable to use your home address as a place of business. Now if you claim you are an aircraft engine repair shop, that might be a problem.

Until I found an officemate to share expenses with, I ran most of my practice out of my home. Never met clients there. I never had a problem obtaining credit. But then again I am not going after huge lines. I just don't need them.

[lostnjax]

Quote:

Originally Posted by Enigma While I will not say that the information touted by Mr Kish is fraud, but it is very close, in my opinion. While Smithdesigns info is a little dated, it is still sound. You can get a business telephone number by getting what is called Remote Call Forwarding Number. Have that number forwarded to a cell or VoIP account. As for business address, stay away from UPS stores and other branded mailbox type places. The credit card and D&B have flaged them. If you must use one of these places, go to a mom & pop type place. But it is very acceptable to use your home address as a place of business. Now if you claim you are an aircraft engine repair shop, that might be a problem. Until I found an officemate to share expenses with, I ran most of my practice out of my home. Never met clients there. I never had a problem obtaining credit. But then again I am not going after huge lines. I just don't need them.

I agree with Enigma about Tom Kish. His kicker is encouraging people to set up multiple LLC's and set up separate creditlines for each. A little deceptive to creditors.

Another option for establishing a biz address is a lot of the bigger office complexes in your town may lease fractional office space. They are excellent for start-ups working on a shoestring budget.

You pay a monthly rent and you get a small office and included in your rent is a community board/meeting room, receptionist, and a copy/business center. You can rent these things on a monthly or yearly basis until you get up and running.

I think it's a great option for the small biz entreprenuer

[jeffmthomas]

Hello,

I found this forum and this has been the exact resource that I have spent days scouring the internet looking for. I do have a couple of questions however, seeing as some people have said this article is a little outdated. I have filed my articles with the SOS in Nevada and am just waiting on them to come back

Once I get that back and can get my EIN, I am going to get a remote call forwarding number. Does anyone have any recommendations for that?

Also, I was reviewing the credit offered by Staples and Office Max. Should I apply for a revolving credit line or a Net Pay credit line. Which one would be more likely to approve me and has anyone who has done this process recently run into any problems being a brand new business?

Lastly, is there a list of companies that report to D&B out there besides the ones listed above?

I look forward to your response.

Thanks,

Jeff

[Hedwig]

Welcome, Jeff.

I haven't had a business for about six years and it was a small, part-time business. But I'm sure there will be someone around to answer your questions.

We are trying to get more people involved in this forum, so please post your results and questions as you go along.

[Qtip]

Quote:

Originally Posted by jeffmthomas Hello, I found this forum and this has been the exact resource that I have spent days scouring the internet looking for. I do have a couple of questions however, seeing as some people have said this article is a little outdated. I have filed my articles with the SOS in Nevada and am just waiting on them to come back Once I get that back and can get my EIN, I am going to get a remote call forwarding number. Does anyone have any recommendations for that? Also, I was reviewing the credit offered by Staples and Office Max. Should I apply for a revolving credit line or a Net Pay credit line. Which one would be more likely to approve me and has anyone who has done this process recently run into any problems being a brand new business? Lastly, is there a list of companies that report to D&B out there besides the ones listed above? I look forward to your response. Thanks, Jeff

We do not have a list of companies, I will check to see some of the companies I used in the past. I would first purchase a small item from 5 net 30's that list on D&B. Once you have your phone number listed on 411, probably a month after purchasing items from the net 30's; giving them time to report, I would venture into Staples and office max business credit card. The main criteria for them is to verify you are running a legit compnay and that the compnay is listed on 411.

[jeffmthomas]

Hello Again,

Thank you for your replies. I am anxious to get my corporation approved by the state now.

I have also bee researching elsewhere and have found resources that tell you to open an Experian and an Equifax business account as well. Are thee widely used, or is it mainly the D & B report that companies look at.

I look forward to hearing more replies and getting a current list of companies that for sure report to D & B. I called around and the customer service people had to clue what I was even talking about.

Jeff

P.S. As a side note, I have several ventures going on at the moment. In order to make them part of my corporation, do I have to just go out and get a DBA that says .. My Corporation Inc is doing business as My Company? or is there a different process to this.

I am not new to the business game, however I am new to this whole corporate thing.

[Enigma]

Is NV your home state? If not, you will need to register as a foreign company in your home state.

As far as your phone number, use who ever is your local baby bell.

If it were me, I'd start with the 30 net from Staples and Office Depot card first. Generate some good paying history then move up from there.

As far as I know, there is no one master list of companies/cards that reprot to D&B.

[curren$y]

Quote:

Originally Posted by 2gorjus4u Thanks Qtip for the info. I have 9 lines of business credit with D&B and one line w/Experian. How should I proceed to obtain LOC without PG. Thanks for your feed back.

this is curren$y tell me how you got the 9 lines and what steps did you take so i can be fab!

[Matt H]

I am curious as to how you can start building business credit. A profile is required to obtain certain government contracts but I would like to utilize business credit to secure financing. Anybody have any ideas on how to go about that?

[Enigma]

Quote:

Originally Posted by Matt H I am curious as to how you can start building business credit. A profile is required to obtain certain government contracts but I would like to utilize business credit to secure financing. Anybody have any ideas on how to go about that?

Do you own a business? If so, do you have positive cash flow? Are you profitable? Do you have trade credit lines? Do you pay your bills on time?

[Matt H]

I was under the impression that I would be able to start building business credit just the same as building credit on my own but I heard that you have to be incorporated and registered with Dun and Bradstreet. Then the question of paying bills on time and having positive revenue would come into play. Seems kind of odd, can anyone validate this?

[Hedwig]

Why does it seem odd? Lenders want to make sure that they can get paid back. They want to make sure you have the income and will be able to make payments. That's what credit is all about, business or personal. To get business credit, you need to be a business. You may be able to get some business credit as a sole proprietorship, but you are still going to have to show that you are a going business with the ability to repay.

[Enigma]

Quote:

Originally Posted by Hedwig Why does it seem odd? Lenders want to make sure that they can get paid back. They want to make sure you have the income and will be able to make payments. That's what credit is all about, business or personal. To get business credit, you need to be a business. You may be able to get some business credit as a sole proprietorship, but you are still going to have to show that you are a going business with the ability to repay.

Amen!

[FSBOKing]

Does it matter if LLC is less than 2 years old?

[Enigma]

Quote:

Originally Posted by FSBOKing Does it matter if LLC is less than 2 years old?

It can. How strong are your financial's?