- Separate your personal and business credit. Avoid using your personal funds for business purposes, or vice versa, to prevent losing the protection of your LLC or corporation. This will also prevent personal liability for any outstanding debts.
- Apply for a federal tax ID number or EIN. Just like your Social Security number, this unique nine-digit number identifies your business entity and allows you to open a bank account.
- Prepare all necessary documentation. Keep your licenses and other relevant documents on hand for easy access. Lenders and vendors will review these during their due diligence process.
- Set up a business bank account. Consider your current and future banking needs before selecting a financial institution. Decide if a big bank, community bank, credit union or online bank suits your business best.
- Monitor both personal and business credit scores. Different credit reports mean different credit scores. To obtain favorable credit rates, strive to keep your personal score at 680 and your Paydex business score at 80 or above. Dun and Bradstreet will determine the latter.
- Get a business credit card. Be aware that the issuer may assess your personal credit score since most business credit cards require a personal guarantee. However, your score typically rebounds after a few on-time payments.
- Apply for an unsecured line of credit. An unsecured line of credit gives you access to capital that you can use for business expenses. Repayments are replenished automatically when additional payments are made to the lender.
Contact us for additional support in all facets of your business.