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Three Best Ways to Build Business Credit from the WSJ
Monday, November 02,2009 12:22 PM
These are tough times so it bears listening to the old guard when it comes to how to get, build and maintain your business credit. No less an authority than the Wall Street Journal recently gave their Top Three when it comes to business credit, promising that it's ...
... an ongoing process and requires some vigilance. But the good news is ... you can build solid business credit in as little as a year or two, depending on how proactive you are.
Here's a thumbnail: 1. Get your books and records in order.
if you're a sole proprietor, consider forming a business entity – such as a corporation or a limited liability company – that provides you liability protection and generally carries more heft. Next, get an accountant to validate your financial statements so that banks and other credit issuers can see that you're running a legitimate and healthy business.
2. Obtain business or trade credit with vendors or suppliers.
Start by doing business only with vendors and suppliers that are able to report your company's payment history to credit-reporting agencies such as Dun & Bradstreet, Experian, Small Business Financial Exchange and Cortera.
3. Always practice fiscal responsibility. Pay your bills on time (or ahead of time!).
How you handle your company's cash flow is a sign of how creditworthy your business is...
And know that even with good credit, loans are still very hard to come by no matter what the banks are saying... even the SBA backed loans designed especially for small businesses. Read the article here: