Business Credit Cards

Clean 2 to 12 year old shelf companies for less.

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Business Credit Cards: Visa Mastercard American Express

Building Business Credit

  • When you own a business, you are always building business credit and Business Credit Cards.

  • Sitting on your laurels will not serve your business well in the long run.

  • Business credit scores are determined by several criteria, the most important of which is your ability to pay your payments on time.

  • Your credit score rises as you have more positive payment experiences.

How Using Business Credit Affects Your Scores

  • Credit managers, according to Dun & Bradstreet, consider both performance-based and predictive analytics, such as scores that measure a company’s historical payment behavior and those that anticipate the possibility of a future late payment.
  • Other factors considered include:
  • The company’s history
  • Public records
  • Trade statistics.
  • The D&B Paydex score is the well-known.
  • Paydex is based on trade experiences given by vendors and is calculated as a weighted average of a company’s combined individual payment experiences.
  • Continuing to use your company credit can help you boost your Paydex score.
  • Credit limits tend to rise as you use more credit.

  • When computing your Paydex score, D&B will give more weight to larger bills.

Using Your Business Credit History to Get Higher Credit Limits

  • If a Business Credit Cards holder requests a credit limit increase, it is not certain that the request will be granted.

  • Creditors want to know that you will repay them.
  • As a result, if your payment history is poor, your chances of receiving an increase are lower.
  • A solid payment history provides a credit provider with certainty that you will pay your bills.
  • Credit lenders will grant you more credit if you are less of a risk.
  • If you wish to increase your credit limit, it is best not to inquire unless your account is current.

Growing Your Business Credit Over Time

  • As you qualify Corporate Credit Card limit increases, you will receive additional offers for greater credit as you continue to demonstrate that you pay your company debts appropriately.

  • Approvals will be easier to obtain since lenders will trust a business credit score that is always improving.

Standards for Credit Providers

  • Most credit providers have some form of benchmark since they want to ensure that your company satisfies their requirements.
  • Uline, for example, requires your company to have a minimum Paydex score of 80.
  • This implies that your company should already have a track record of paying payments on schedule.
  • It may appear counterintuitive, but starting vendors prefer that your company already has a business credit score.

Meeting Credit Provider Standards

  • Prepaid orders from Uline provide a way around this loophole.
  • That same Uline account can be used to assist establish your business credit.
  • After you’ve been paying off your Uline account for a while, you can request Net 30 terms.
  • Because you have demonstrated that you are not a high risk, you will be eligible for Net 30 terms.
Standards

Alternative Ways to Meet Credit Provider Standards

  • There are other strategies you might employ to meet credit provider requirements.
  • With provider 76, they like to see a business that has been in operation for at least a year.
  • If your company is newer, a $500 deposit or personal guarantee is required.

Securing Small Business Credit Cards

  • Adding a deposit is referred to as securing credit.

  • A secured company Business Credit Cards is created exclusively for firms with minimal credit history.

  • It can be a means to obtain credit when you otherwise would not be able to.
  • A security deposit is required at the outset; this determines the credit limit on your company credit card.
  • A $500 minimum deposit is frequently required.

  • When you begin making purchases, you will receive invoices like a standard Small Business Credit Cards.

Personal Guarantees

  • Personal guarantees are another option for obtaining credit when you are unable to do so otherwise.

  • Working with a personal guarantee and non-personal guarantee credit is part of leveraging your business credit.

  • Personal assurances should be avoided in general, but this is not always possible.

Limited Vs. Unlimited Personal Guarantees

  • There are two types of personal guarantees: restricted and unlimited.
  • Whenever possible, try to negotiate for personal guarantees that are limited in scope.
  • If the borrower fails to return their obligation, the business owner is accountable for the entire loan amount, including any associated legal fees, under unlimited personal guarantees.
  • The financial responsibility of the business owner also includes any connected legal fees.
  • There is no restriction on unlimited personal guarantees for business owners, but restricted personal guarantees impose a limit on the amount that business owners may owe in the case of default.
  • As a result, minimal personal guarantees become significantly more appealing.

Are Personal Guarantees Worthwhile for Your Business?

  • When considering personal guarantees for your firm, examine whether you can afford to absorb the hit if your company fails.
  • This entails putting your personal finances, such as your car or home, in danger.
  • Before making a personal guarantee, you should always consider your options.
  • There is no such thing as a guaranteed thing; you should never assume that your company will last forever.
  • This means that you must be able to repay the loan without jeopardizing your personal financial security in the worst-case scenario.

  • The personal guarantee is an essential component of appropriately leveraging your credit portfolio.

Avoiding a Prepay Requirement

  • A prepay requirement is unnecessary with good business credit.
  • Because you don’t have to prepay, you can possibly hold amounts for at least a Net 30 period, which can assist in smooth cash flow.

Avoiding a Deposit Requirement

  • Because you don’t have to submit a deposit, your limitations aren’t determined by the amount of cash you had on hand when you applied for the Business Credit Cards.

  • The funds you would have used to get credit can now be put to better use in your firm.