It is possible to obtain a business credit profile under the business name. This is separate from any owner credit history.

Every business needs cash or capital to operate. In the beginning this capital might come from personal savings, or a home equity line of credit. Perhaps personal credit cards are used. An owner might get a loan against their retirement funds. Sometimes loans come from personal family and friends.

Once the business has started up, more cash can be needed and many owners get more money from those same sources. Also investors come into the picture plus a business line of credit or loan. A credit card is not on this second group because the typical small business does not start off with a credit card.

A less mentioned method of having startup cash flow is corporate credit or business credit. More businesses lend money to other businesses than any other type of lending. This type of lending is critical to a new business.

Home businesses and small businesses based on the owner's savings etc, frequently forget the steps to build up their credit scores ahead of time then when the capital is needed, the small business is not ready.

A lot of times, the home business owner will go to the bank but not be prepared. If a business owner is not prepared, they have about a 3% chance of getting that loan, according to the SBA (Small Business Admin.)

The 4 top reasons the small business or home business is turned down are:

• The business is not prepared to meet the basic requirements of a bank; they are not in compliance with the guidelines.


• The personal credit score of the owners of the business are too low.


• The business is not old enough.


• The home business or small business has not established business credit.

The application for business credit, if done well, can save thousands of dollars in interest. For example, if the owner has a credit score of 650, then they may well qualify for a loan of $100,000 over 10 years at an interest rate of 13%.

That same loan, if based on a credit score for the business, could be at 7% instead. That 6% difference in interest rate over 10 years is a whole lot of earnings the owners could have kept.

$100,000 for 10 years at 13% has a payment of $1,493.11 and a total pay back of $179,173.20.

The same $100,000 for 10 years with a 7% interest rate has a monthly payment of $1,161.08 and the total pay back is $139,329.60.

The owner could have pocketed that $40,000 +- difference over the 10 years.

No matter what the credit is, there are ways to get a business loan. The owners need to know what to do and where to go,

There are some steps in building business credit. A few are:

• Limit the use of personal credit by the owners.


• Build a business profile with the major business credit bureaus.


• Get credit from the vendors and use it prudently.


• This way you can get a business credit score. This will enable you to increase the available business loans.

An average consumer gets one inquiry on their credit record a year. The average business will get 10 inquiries. The more the inquiries, the lower the score.

A good first step is to have a Business Credit Analysis performed on your business. This will greatly improve your chances at getting credit. This analysis will tell you where to begin to get the business credit your small business needs.

As mentioned above, the SBA makes loans to new businesses also. This Business Credit \Analysis can help with that type of loan as well.

The business credit bureaus include Dunn and Bradstreet, Experian, Equifax, Business Credit USA, etc. These companies rate your business by the business credit scores and business credit ratings. You do not have to pay these companies to receive a profile. Here are some small home/business finance options when you have poor credit.