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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Posts: 72
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.
FPP
Old 01-28-2005, 02:34 PM
txcreditcache txcredit is offline
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Location: texas
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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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Default
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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Location: Grand Rapids MI
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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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Location: columbia sc
Posts: 9
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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Posts: 1
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.
Petrorecovery
Old 02-14-2005, 09:50 AM
gmancache gman is offline
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Posts: 213
Default
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!!!!!
gman
Old 02-14-2005, 11:40 PM
magyartcache magyart is offline
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Location: Columbus, OH
Posts: 41
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!
holdenoversoul
Old 02-16-2005, 04:09 PM
smithdesigncache smithdesign is offline
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Location: Grand Rapids MI
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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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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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Posts: 213
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
Getting Business Lines of Credit w/out PG's 
