Post-recession, business credit is more important than ever in the U.S., as consumers have cut back on spending and increased their reliance on borrowing money from banks and credit card companies to finance major purchases and small day-to-day expenses alike. The good news is that when it comes to establishing business credit, you have the power to speed up the process by following some basic steps that require very little time or money. Here’s how to build business credit in 30 days or less so you can take advantage of this crucial financial metric and keep growing your company’s bottom line.
Step 1: Open A Secured Credit Card
Step 2: Use It Regularly
If you want to build business credit, you need to use it regularly. That means making sure you keep up with your payments and using them for business-related expenses only. You can also build credit by using a business credit card for everyday expenses and paying off the balance in full each month. By following these steps, you can build business credit in 30 days or less. It’s that easy!
Now, here are five additional ways to build business credit:
-Make all of your payments on time
-Keep a low revolving utilization ratio (less than 30%) on your business credit cards
-Don’t borrow more than 50% of the limit on any one card; don’t borrow more than 20% of total limits across all cards
-Take advantage of perks like reward points and no annual fee offers; make sure to read the fine print though!
-Look into opportunities like small business loans and unsecured lines of credit if you’re looking for financing options.
Step 3: Add Another Card After 30 Days
• Double down: Add more cards as needed to spread out the risk
• Secure the best rates possible: Shop around for low-interest rates and annual fees
• Consider building credit with other banks: Get other sources of funding such as home equity loans, personal loans, lines of credit, etc.
The important thing is to ensure you are paying off these debts so that they don’t affect your business credit score. Building up a healthy balance sheet will show lenders that you’re responsible and capable of managing money responsibly. A mix of debt and equity sources shows a healthy approach when it comes to financial management – a quality lenders look for when deciding whether or not they want to work with someone who needs financing.
