Business Credit

Establishing business credit and separating it from your personal credit is crucial for maintaining financial health and growing your business. Here’s how you can do it:

Steps to Establish Business Credit

1. Incorporate Your Business
   • Forming an LLC, corporation, or partnership helps separate your personal and business finances. Sole proprietorships do not provide this separation.
2. Obtain an EIN (Employer Identification Number)
   • An EIN is like a Social Security number for your business, allowing you to open a business bank account and apply for business licenses.
3. Open a Business Bank Account
   • Use this account for all business-related transactions to avoid mixing personal and business finances.
4. Register with the Business Credit Bureaus
   • Ensure your business is registered with major credit bureaus like Dun & Bradstreet, Experian Business, and Equifax Business.
5. Establish Net 30 Accounts
   • Net 30 accounts are essential for building your credit profile. These vendors report your payment history to the credit bureaus.

Net 30 Accounts

Establishing Net 30 accounts with vendors is a great way to build business credit.

• NAMYNOT
  • Offers a variety of products and reports to credit bureaus^[1].
• Office Garner
  • Specializes in office supplies, electronics, apparel, etc., requiring at least a 30-day business history^[1].
• Summa Office Supplies
  • Provides office supplies and reports to various credit bureaus^[1].

Tier 1 Business Credit Accounts

Tier 1 accounts are easier to obtain and are suitable for businesses just starting to build credit.

• CEO Creative
  • Offers Net 30 terms to newly established businesses^[2].

Tier 2 Business Credit Accounts

Tier 2 accounts usually require more robust business credit profiles and offer higher credit limits.

• Digital Honey
  • Provides a thorough list of Tier 1 and Tier 2 vendors that can boost your business credit^[2].

Additional Resources

For further reading, you can explore the following sources:

• Nav: Net 30 Vendors^[1]
• Startup Savant: Easy-Approval Net 30 Accounts for Startups^[1]
• Nav: Vendors That Can Help You Build Business Credit^[1]
• Digital Honey: Tier 1 Business Credit Vendors^[2]

 

By following these steps and utilizing these resources, you can effectively build and separate your business credit from your personal credit, helping pave the way for a financially healthy business.

Sources:

1. https://www.nav.com/resource/net-30-accounts/
2. https://digitalhoney.money/tier-1-business-credit-vendors/