Re: Subprime Meltdown: What about HELOCs?
start building your biz. credit score. You likely won't get as much $ as you have available in a HELOC - but it's something.
www.creditboards.com has a pretty good biz credit board.
First, I want to thank ATW for this link. It got me started on what appears to be a fairly long road of building business credit.
I made a new thread for this because I think it is critical for any new business starting out. Right up there with setting up the legal entity, you should begin building the business credit. This is something I neglected to do and I am wishing I had known/taken the time to learn what I am learning now. I have 2 companies - one which has been in operation 5 years (gasp) and the other just shy of 2. Neither one has any credit whatsoever. Everything is in my own (or partners) names.
Huge mistake.....as we all know, one very important factor in many business ventures is the advantage of leveraging OPM. The ability to utilize OPM frees up your own capital for other ventures (or safekeeping!). Our company is now looking to secure lines of credit in the business name, so that we can be more agressive/do more deals and I am sure a positive credit rating really would have helped.
So figure I will attempt to save someone else the mistake.
Appears to be a fairly straightforward process, which requires the following, at a minimum:
1. Establish a Dun & Bradstreet Number for your company www.dnb.com - it will be this organization, along with Experian who track credit for your company. This process is free (although you can pay to make things move faster)
2. Establish at least 5 credit relationships (i have read it takes 5 to get a score)
Just like personal credit, not too many people want to loan to a business without any record. It seems the best place to start is with smaller vendors - think Staples, OfficeMax, Home Depot, Texaco, Lowes, FedEx, etc. (many can be applied for online)
Many will require a personal guarentee and then, after 6 months or so, will release the personal guarentee, if you request.
Again, just like personal credit, it's all about time - the earlier you start, the better!! Starting a new business can be very hectic and this might be the last thing on your mind, when you are juggling a million other things but just think about the power this can provide. Established credit for a company can act like an entire separate person - with access to more and more funding (if you treat it right) - it can make or break your Growth potential.
I am sure there are lots of people on this forum who have experience in this topic. Please, feel free to add...... I, for one, am listening.
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