How to Access Business Credit

When you start a new business, you may want to explore options for getting business credit. You can either use your own funds to start up and maintain your company or use "other people's money" to get things up and running. If you go the latter route, you will have to handle some preliminary details in order to access business credit.

Instructions

1

Improve your own personal credit history and scores. When you start making plans to start a new business, it's important to take steps to boost your own individual credit scores. You can do this by resolving issues with unpaid accounts, making payments on time and disputing any incorrect information listed on your personal credit history. Business creditors usually ask that the owner or company representative act as a "responsible party" for the application. The responsible party is contacted in case of an issue with the account and sometimes held liable if the account goes into default. The business creditor may also evaluate the responsible party's personal credit history before approving the business credit application.

2

Write a list of the collateral you can use to back your business credit application. The bank may request collateral sources, such as a piece of property or vehicle, in order to approve a loan. You should also develop a profile of your business that summarizes your company, including the number of employees, annual (or projected) revenues and management information.

3

Create a comprehensive business plan, including financial records, if you want to access business credit. When applying for loans and lines of credit as a start-up, most firms will be asked to provide creditors with a written proposal describing the concept in detail so that they can evaluate whether it's a viable business idea. You can start with the business plan template offered by the Small Business Association.

4

Secure an employer identification number to access business credit. The EIN is your company's tax identification number. While it's not always necessary in order to operate as a company (sole proprietors can use a Social Security number), some banks require an EIN in order to open a new account in the business' name.

5

Register your business with your state's department of commerce or secretary of state's office. When you form an officially registered company, sometimes business creditors will send offers for credit cards or loans for you to review. Some banks also want to see your state-registered paperwork in order to approve you for business credit.