Welcome to our guide how to build small business credit. Before we get too far in the
process we want to remind you of a few things regarding this guide and the process of
building small business credit you are about to undertake.
Things to Think About Before Getting Started Building Business Credit
Don’t lie on applications
Don’t use business credit to circumvent bad personal credit
You are most likely still on the hook if accounts go bad
Difference between personal and business credit
Benefits of using business credit in your small business
Who should and shouldn’t build business credit
What is the price for building small business credit?
Pace to best build business credit
Fix any inaccuracies in your business credit file
Step 1 ~ Disclaimers
The information contained in this guide may not be for everyone and cannot be relied
upon as fact. Build Small Business Credit does not provide advice or opinions on
business credit building strategies, nor the use of business credit for business activities.
All data is provided for informational purposes only. Terms, conditions and account
availability are subject to change and are out of the control of this website, its’ affiliate
companies and their owners. It is not guaranteed that any of the business credit issuers in
this guide will approve your business for credit with no personal guarantee. Each may
change their guidelines at any time and approval is solely a determination of the business
credit underwriters themselves.
Any person, business or organization that attempts to use this information to commit
fraudulent activities needs to be aware that business credit issuers have every right to
charge and prosecute both the business owner(s) and those responsible for the
procurement of the business credit. This website, its’ affiliate companies and their owners
are hereby absolved from any liability regarding the use of included information and
resulting business credit obtained. By continuing further in this guide, the user of said
information hereby acknowledges that they have read and fully understand this
Disclaimer, and agree to be bound by the terms and conditions described herein.
Step 2 ~ Don’t Lie on Applications
The one constant in your journey to build small business credit is you will become very
familiar with business credit applications and later in this guide we will share the right
and wrong ways to complete the application. The application stage also provides you, the
small business owner, with the best chance to lie in order to make your business look
better on paper. Included in the previous disclaimer is language regarding fraudulent
activities and we feel it deserves a deeper explanation and what it means to you, the
business credit seeker.
The simple definition of the term “fraud” is to knowingly provide false information. As
you start the process of building small business credit you will start to see that many
applications, especially the higher tier business credit issuers, have extremely high
business sales/revenue requirements in order for approval with no personal guarantee,
which is likely higher than that of your small business. It is tempting to provide incorrect
numbers to give your small business a better chance at approval or to get a little higher
credit limit. Although most of the time you won’t be required to submit documentation to
setup the account there is always an opening for the business credit issuer to come back
and verify the information you provided on the application. If you are unable to provide
documentation or you can only prove a fraction of the numbers represented, you leave the
door open for a formal investigation and possible felony fraud charges.
We decided to detail this topic not to alarm you, rather to empower you to make the right
decisions. The good news is it is our experience, and the experience of our members, that
business credit issuers list the higher numbers to deter a small business owner from
applying if they aren’t qualified. If you meet the minimum levels described with each
business credit issuer later in this guide there is typically not a problem. Do the work of
building a solid business credit file and the massive amounts of business credit and
unsecured financing will follow, all without a personal guarantee.
Step 3 ~ Business Credit vs. Bad Credit
The availability of business credit is a privilege, not an easy escape from bad personal
credit. There are two different types of bad credit, one can be aided by building small
business credit and the other will hinder you and your business until it is
rectified. Whatever your situation right now, if you continue to follow the steps lay out
in this guide you will soon have great personal credit and a thick business credit file
which will provide your small business the best possible chance to obtain large amounts
of unsecured financing with no personal guarantee.
The first type of bad credit is simply called being “over-extended” which we will discuss
in detail in an upcoming step. The good news is that by starting the process to build
small business credit you will soon have access to the funds necessary to run your
business with business credit, rather than personal credit.
The second type of bad credit involves having derogatory items (collections, late
payments, tax liens, bankruptcies, etc.) showing on your personal credit files. This will
hinder your small business until they are ALL removed or changed to report positively.
The reality is that your small business will be able to access unsecured financing quicker,
easier and in larger amounts if you are able to personally guarantee. It can even speed up
the process of building business credit by qualifying for higher tier financing sources that
will provide your business credit file with a high reporting tradeline. Don’t worry if you
are confused, we will fully explain this later in the guide. There are ways around this
such as bringing in a partner to provide the personal guarantee but the catch is that
business credit issuers will want a personal guarantee from all business owners with at
least 20% ownership rights. Unless you are willing to give up the majority of your
company to access large amounts of unsecured financing it is time to start doing
something about your bad credit now.
Fix Your Personal Credit
There is a lot of information out there about credit repair so we want to provide the
variety of options available along with our honest opinion so please research each and
choose the option that best fits your situation.
Do-it-Yourself ~ Whenever possible we will provide you with a do-it-yourself option and
the Credit Repair Software website provides visitors enough information, resources and
how-to guides to allow you to successfully repair your own bad credit.
I would like some help ~ You can spend hours researching and you will find hundreds of
companies that advertise they can repair your bad credit. In reality, they are all doing the
same exact thing you can do yourself but the only difference is they are getting paid to
send the right letters at the right time. If you don’t want the hassle of keeping track of
timing and schedules it might be in your best interest to hire one of these services. Our
members have used eCreditRepair with fantastic success, if anything take advantage of
their Complimentary Credit Analysis Consultation by filling out the simple online form.
We recommend to our members they use a service as long as they first understand two
points, it won’t happen overnight and don’t expect the world. Whether or not you do-ityourself,
you will likely not see any results for 3-6 months and often longer. What you
need to focus on is would it be worth $100 or $200 to get at least one bad credit item
removed or changed. This one item could mean a 20-40 point increase in your credit
score, which could be enough for you to qualify for a better interest rate and save
thousand in interest payments.
Monitor Your Personal Credit
Whether or not you need to repair your credit it is essential to regularly monitor your
credit. We highly recommend the True Credit services as they are one of the only
companies that offer daily updates so you can always see the exact state of your credit
files online in real-time. This is an invaluable tool to protect you from identity theft by
immediately detecting unauthorized inquiries or account activity before its too late.
3-Bureau Credit Monitoring includes unlimited 3-in-1 Credit Reports & Scores from all
three credit bureaus: TransUnion, Equifax and Experian. Get unlimited Access to Your
Credit Report. Sign up today!
Step 4 ~ Liability of the Business Owner
One of the most frequently misunderstood aspects of business credit is even though you
did not provide a personal guarantee you are often liable for the business debt created by
your soon-to-be formed business credit accounts. We discuss in detail the importance of
structuring the proper entity, keeping it in good standing and having the proper
accounting and record-keeping systems in place. If all this is done there is a recognizable
entity doing business rather than just you, the small business owner, doing business
which creates a clear separation of liability. It’s a confusing subject so there are a few
things that must be understood before we start the process of building business credit.
Use Business Credit Wisely
The first thing to remember is business credit is not expendable and it should be used
wisely. Don’t think that just because you won’t provide the business credit issuer with
your social security number or any other personal information that it can’t easily be found
if they want to access it for any reason. You can protect yourself by having a clearly
defined line between personal and business affairs but that barrier is not impenetrable. If
accounts start getting paid late, or not at all, the business credit issuers are likely to do
anything in their power to try and collect on the debt. We have seen business credit
issuers add late payments to the small business owners personal credit reports. We have
seen business credit issuers come back and sue the small business owner for a past-due account. These situations can happen on any application regardless of whether or not you
provide a personal guarantee.
Although business credit issuers regularly lend to small businesses they are also very
aware of the business law of averages, where only 2% of businesses remain in business
for over two years. They are also aware of the many fraudsters who take advantage of
business credit to get around their bad personal credit. The bad news for the true small
business owner attempting to build business credit is the business credit accounts that are
available without a personal guarantee also carry very stiff interest rates and terms. All
the more reason to have an excellent personal credit rating so at least you can have
business credit that doesn’t report to your personal and carries with it reasonable rates and
Step 5 ~ Business Credit vs. Personal Credit
Until you truly understand the difference between personal and business credit it will be
difficult to know what you are trying to accomplish by building business credit. The
terms are pretty simple to understand but there are two distinct definitions for business
credit. The first definition of business credit is likely the reason you are reading this
guide, to qualify for unsecured business credit based solely on the qualifications of the
business. The purpose for this definition is to separate liability and reduce the risk to
business creditors going after your personal assets in case of business failure and default
on outstanding debt. The second definition of business credit is simply credit that doesn’t
report to the personal credit bureaus. This works in conjunction with the first definition
to provide all the benefits of building business credit to use in place of personal credit.
Let us be clear, the fastest and easiest way to large amounts of available business credit is
for the small business owner to provide a personal guarantee on all applications. The
problem with this solution is the national average credit score is well below the minimum
requirements for the majority of these personal and business credit sources so the only
plan of action is to start building business credit today so your business can access the
unsecured financing it requires to live on an thrive. In the next step we will discuss the
benefits of using business credit in your small business to provide you the complete
understanding of the difference between personal and business credit.
Step 6 ~ Benefits of Using Business Credit
Perhaps the most significant benefit of building business credit and qualifying for
unsecured financing without a personal guarantee is you will drastically reduce the
number of inquiries on your personal credit files. This becomes very important for the
following reasons. As you probably know, each inquiry reduces your credit score by 1-5
points so your credit score can take a massive dive with only a hand-full of inquiries.The
more inquiries a new creditor sees on your credit report, the less likely they are to
approve your account.
If you personally guarantee a business credit account to get approved, it is likely the
account won’t report to the personal credit bureaus but a new credit lender will be able to
see an inquiry from another business credit issuer. Whether or not you actually have this
account, the new business credit lender will assume the inquiry means another account
with hidden debt so they will likely decline your application.
We realize there are certain times when a personal guarantee is in order so this adds
another reason to dispute incorrect inquiries and have them removed from your personal
credit files. Revisit Step 3 for the options available.
It is obvious we are preaching to the choir as everyone reading this guide understands
how critical it is to build small business credit. Since you are well on your way to
building business credit it is important to take a look at what the future holds for your
small business so you can begin to envision the benefits of the business credit that will
soon be accessible.
Business Credit Cards
The majority of business credit cards have phenomenal promotional deals such as 0% for
12 months or 2.9% for life, and it is very possible to have access to $50,000 to $150,000
in revolving business credit within a short period of time. We will share later business
credit cards (available without a personal guarantee) later in this guide that will easily
approve your business for $25,000 and allow you to balance transfer the full amount into
your business checking account for instant cash access.
Business Lines of Credit
Traditional banks offer a business line of credit, which is similar to a business credit card,
except for the exciting fact that you always have cash access to 100% of your available
credit. Depending on the age, financial state and business credit profile of your business
you can qualify for anywhere from $10,000 up to $1,000,000 in cash access business
lines of credit. If you have at least decent personal credit now we suggest contacting our
Business Line of Credit Partner to see what you can qualify for today. If you don’t have
decent personal credit now, we suggest you revisit Step 3 and work on your personal
credit while you build business credit. Later in this guide we will also share a strategy for
obtaining business lines of credit with no personal guarantee.
Equipment financing can be thought of as secured financing for pieces of equipment
needed to conduct business activities. This type of financing is much more lenient and
banks will approve your business for significantly larger loan amounts because the funds
are secured by the equipment purchased. If you know the right sources, which we will
also share later in this guide, you can easily obtain $100,000 in equipment financing
without a personal guarantee. So whether you need a printing press, a new lawnmower
or possibly a new company car this financing option might be for you. The following
commercial/business/fleet accounts have reported to the business credit bureaus for our
members. You can find applications for each by searching on their website, typically
under Credit section. It is also possible to call the Customer Service line of each and get
instructions for applying for a business account.
Step 7 ~ Who Should Build Business Credit
The question of who should and shouldn’t build business credit is fairly obvious but
deserves the attention in this portion of the guide. The business credit industry is often
taken advantage of which causes undo hardship on those that should build business
credit. If you fall into any of these categories below we highly suggest you re-think your
decision to continue with this process:
If you are building business credit to circumvent bad personal credit you shouldn’t
be building business credit.
If you are trying to take advantage of how the business credit system is setup, you
shouldn’t be building business credit.
If your only motive to start a business is to take advantage of business credit you
shouldn’t be building business credit.
If your intention is to build business credit and never pay back the debt you
shouldn’t be building business credit.
Now that we have that out of the way we can focus on the honest, hard-working small
business owner and share the possibilities for those of you who should build business
If we were to look for the single most common factor for business failure, it would be
safe to say that the majority of business failures are a result of a small business owner’s
limited access to additional business financing sources. What if these small business
owners knew the power of building business credit and using it in their business?
The obvious answer is they could have increased their inventory, hired additional
employees or maybe just paid the bills just one more month until their business
The viscous cycle most small business owners get into is using their personal credit to
fund their business activities. The main problem this creates is a lower than normal credit
score caused by using the majority of your available credit. Being over-extended with
personal credit will cause a significant drop in your credit score AND makes it difficult,
if not impossible, to be approved for any more credit when you are maxed out with what
you have available. With a strong business credit profile it will now be possible to obtain
enough business credit to free up all your personal credit, instantly boosting your credit
score and opening the door to larger business lines of credit to help continue the growth
of your small business.
Step 8 ~ Price for Building Business Credit
Another question we hear a lot from members is how much it is going to cost to build
small business credit. The answer is different for every small business and the first cost
is dependent on which of our programs you choose:
You can follow along with the 10 week email lesson guide for free
You have chosen to purchase and download the entire eBook (Wise choice!)
You can secure our expert coaching services and have us hold your hand through
the entire process of building business credit. Learn more about our expert
business credit building services.
Whichever option you choose, you can still expect to pay a price for building business
credit. The actions involved with building business credit will require a small capital
investment to purchase the goods and services your business uses already.
We have mentioned that you can get business credit from almost any source that offers
personal financing options but it is important to note that not all business credit lenders
report account activity to the business credit bureaus. So when you are just starting the
process it will be important to only choose from the list of companies given later in this
guide to give your business the best chance to build business credit. We also have two
other suggestions to consider when establishing your business credit building path.
First is to apply for business credit vendors your business will actually use. Business
credit that is not being used will do your business credit file no good since infrequently
used accounts are less likely to report. More importantly, you will find it will be very
difficult to get a credit limit increase on a barely used business credit account and
frequent credit limit increases are the key to strengthening your business credit file and
opening up larger sources of business financing. Not only should you only apply for
business credit your business will use frequently but we suggest you only buy what your
business needs. There is absolutely no reason to buy something just to build business
credit. We will discuss this further in the next step.
The second suggestion is it will be necessary, mostly in the beginning, to purchase
supplies from business credit vendors even though you might pay a little more. The
reason is these vendors know your small business needs vendors like theirs to help build
your business establish and build a business credit file. You have to remember, business
credit vendors usually pay to report activity. The same goes for the personal credit world
except we all take it for granted and expect it on the business side. With the amount of
fraudulent users of business credit, these vendors safe-guard their risk of lending to your
business, without a personal guarantee, by charging an additional 20%-50% for their
products or services. Well, wouldn’t it be worth an extra $2-$5 on the purchase of a ream
of paper to have your business credit file? We think so and we will show you these
business credit sources in upcoming stages.
Step 9 ~ Pace to Best Build Business Credit
Before we get too far we want to make it clear, the process of building business credit is
slow and tedious and it is important that you thoroughly understand and implement each
step. If you are patient you will be able to access any type of business credit financing
with no personal guarantee. If you try and rush the process or simply skip one of these
first steps you will ruin your chances of obtaining business credit cards, business lines of
credit, equipment and automobile financing. There is a recommended pace to build
business credit that if followed, will work each and every time. If you stray from this
proven method your business credit file might get red-flagged, making it impossible to
obtain any new business credit.
It is easier to think of each business credit account as a brick in a wall. The more bricks
added, the strong the wall will be. If the brick-layer hurries through the process you will
end up with a flimsy wall that will likely cave at the first sign of any stress. The same
goes for business credit, by adding accounts methodically and choosing the strongest
accounts will help build an impenetrable business credit file. With a strong business
credit file you will be able to obtain any type of business credit or unsecured financing
with no personal guarantee, so it is worth the wait. Here are a few questions we
repeatedly get from members and both are important for you to understand.
How many business credit accounts are too many?
You can never have too many business credit accounts, as long as you regularly use
them. Unused business credit does you no good and if you never use the account you
will likely always be confined to the same starter credit limit which will hurt your
chances at obtaining larger business credit and unsecured financing down the road.
How often can I apply for business credit?
It is not necessary to apply for more than 2-3 accounts per month, except in the very
beginning and we will share this later in the guide. Any more inquiries than this will set
off red flags for the business credit bureaus and your business credit file could be locked,
negating all the hard work put into building business credit up to that point. Even if your
business credit files aren’t locked, a new business credit lender will often decline your
application simply for having too many inquiries.
Step 10 ~ Fix Your Business Credit File
It is critical to understand the importance of fixing any inaccuracies on your business
credit file before you move forward and start building business credit. In the next stage
we will provide you with an understanding of each of the important business credit
bureaus along with information and resources for checking your business credit file and
disputing any incorrect information.
Just as with your personal credit files, any derogatory items (collections, charge-offs, tax
liens, etc.) will have a negative impact on your business’ ability to obtain business credit
and unsecured financing with no personal guarantee. We want you to have success in
building business credit so please take all the time it might require to have completely
clean business credit files.
When you search for your business credit file and don’t find anything, don’t worry you
soon will. You should also be wary if you know your business doesn’t have any business
credit and your business credit files show one, two or twenty business credit accounts.
The business credit industry is notorious for reporting the account activity for one
business to the business credit files of a completely different and separate business with
the same or similar name or address. If this is the case, we suggest having them removed
now even though you will be losing reported tradelines. The problem you might run into
is you can’t control if the other company will pay their bill on-time, if at all so it is
possible these accounts will one day start reporting negatively. It is better to start with a
clean slate than have to deal with the hassle of potential problems down the road.