Business credit was always more difficult and expensive to obtain than personal credit. There are many companies in the marketplace today engaged in business of creating a corporate credit rating for small business owners who need to get access to business loans. Most charge hefty fees, often exceeding the $3,000 mark. Many businesses took advantage of such services despite the price tag attached to them, as it allowed them to gain access to significant cash inflow coming from corporate credit cards and business lines of credit. Today, when economic downturn brings us lower interest rates and more stringent underwriting criteria, business financing looks even more desirable yet less achievable
Most Credit Building Services Are Expensive
Competition always serves to consumer advantage. The same services, previously performed for thousands, may now be obtained for just few hundred with proper research. The way most companies that provide business credit services work is that they develop a solid network of banks, vendors, and credit card companies that they utilize to get financing for their clients. Most of them are paid on performance-based scale, which benefits business owners seeking financing: they only spend money if they get financing. While some corporate business agents are paid on commission basis, others are paid flat fees for establishing business credit profile. Overall, utilizing services of third-party business credit agents is pretty expensive compared to other alternatives. There are platforms in place now, essentially providing the very same services for a fraction of a standard fee.
Business Credit Is a Path to Higher Profits
Unsecured business loans provide a great way to expand activities and earn more profits in a cost-effective way. They typically offer great rates and terms, adaptable to your business needs. That is why more and more small business owners are trying to understand the way business credit is established and maintained. Being formerly a privilege of established businesses, getting loans is now feasible to newly-formed businesses. Start-up small businesses are now able to secure at least $50 thousand within first year of operation with minimal efforts and nominal costs involved.
Do-It-Yourself Is Often the Right Approach
However, before obtaining larger unsecured business loans, it is vital to build a successful repayment record with smaller amounts. Credit lines opened by vendors are the easiest and most effective tools in building business credit. Below are a few that may help you to start your credit going.
– Dell Computers. Dell has its own financing division, servicing both, individual customers and business clients. They open lines of credit, allowing you to purchase computers and supplies with flexible terms, and report them to credit bureaus, such as Experian and D&B. A positive credit experience with Dell may help you to qualify for business credit cards and loans easier.
– Staples. Staples is great to build foundation of your business credit. Buying supplies on account and making timely payments will look good on your business credit profile and would open up more financing opportunities over time.
– Fleet One Gas Card. Fleet One is a way to a free Dun & Bradstreet profile and Experian Intelliscore. Opening a profile with D&B would cost $329, however, a Fleet One, reporting to all business credit bureaus would lead to one being opened automatically and free of charge. It also reports as a credit card to Experian, showing your potential lenders a history of handling unsecured credit. You do use gas on a daily basis, so why not take advantage of Fleet One?
Business credit, seeming frighteningly hard to obtain, may be built and maintained with minimal cost and effort, opening doors to greater financing opportunities as your business expands.