How To Build Business Credit Fast

If you want to learn how to build business credit fast, it’s easier than you think. It requires some discovery into how to build business credit fast, then getting an idea for business credit building strategies that have been proven to work. In the main, building business credit fast is about not making the same common mistakes most businesses make — and, just as importantly, following a proven business credit building strategy that works. 

Learn how to build business credit fast by not making the same mistakes most business owners make and following this business credit blueprint we’ve laid out for you.

Building Business Credit Course

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Why Is it Important to Build Business Credit Fast?

The main reason it is important to build business credit fast has to do with cash flow. Did you know that over 80% of businesses fail because of cash flow shortages? This single problem could be easily avoided if a business were to build business credit fast and thus resolve their cash flow problems. This isn’t the sole reason why you should build business credit fast, but it is the most important.

Here are some other benefits of building business credit fast:

  • Grow your business faster. When you build business credit fast, you can leverage debt faster (i.e., other people’s money ([OPM]), which is how to grow your business fast.
  • Get faster financing. When you have great business credit, you can get approved much faster for new loans.
  • Get higher lines of business credit. Lenders love to extend credit to businesses worthy of credit.
  • Get better financing terms. Like with personal credit, the better your credit score and, the more credit you have, the better the interest rates and other terms.
  • Keep business and personal finances separate. This protects your personal assets and credit should your business, unfortunately, run into problems (e.g., legal, credit, bankruptcy, etc.).
  • Track expenses easier. Having a business credit card can help you monitor and track spending as well as a business checking account does.
  • Make tax time less taxing. There are numerous tax incentives for borrowing money to grow your business. You can deduct interest for short-term loans and lines of credit. You can hand over all this information to a certified public accountant, and they can easily make sense of everything, getting you the best tax breaks.
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Recommended: You’ll need a business before you can start establishing business credit. Learn how to start a business.

What Is the Best Strategy for Building Business Credit Fast?

There is a simple strategy for building business credit fast. This strategy has you do two things: Avoid making mistakes that most businesses make when learning how to establish business credit. Establish business credit fast by establishing relationships with vendors and lenders who will extend your business credit fast.

Here’s what you need to keep in mind:

  • Make sure your business is a separate legal entity. This means forming a corporation or learning how to start a limited liability company (LLC) so you can maintain the corporate veil.
  • Make sure you have an Employer Identification Number (EIN). You’ll need an EIN to get a business bank account. You can easily learn how to get an EIN with our guide.
  • Understand what net 30 vendors are and how they operate. Check out this list of net 30 starter vendors.
  • Become familiar with secured business credit cards vs. unsecured business credit cards. These will help you build credit for your LLC.
  • Commit to paying your bills off early, never late. Just like with personal credit, your business credit score will also nose dive if you miss a payment. Better though, if you pay your bills early, then your business credit score will increase.
  • Know the business credit bureaus. The most important business credit bureaus are Dun & Bradstreet, Experian Business, and Equifax Small Business.
  • Understand how business credit works. When you’re ready, you can learn how to build business credit from the ground up. This will help you build business credit fast.
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Recommended: If all of this is overwhelming you, or you just want to make all of this even faster, check out Obsidian Bear Funding.

How to Build Business Credit Fast

Now that you know why it is important to build business credit fast and the best strategy to adopt, the next part is to step-by-step learn how to build business credit fast. Here we’re going to teach you the secret to building business credit fast.

Let’s learn how to build business credit fast:

  1. Form an LLC
  2. Get an EIN number.
  3. Get a business bank account.
  4. Establish starter net 30 vendor accounts as soon as possible. Here’s a net 30 vendor list to help you get started. Get a secured business credit card. Read up on secured business credit cards to know what you need to know about secured business credit cards. Do this now, don’t wait.
  5. Apply for in-store credit cards. These will help you build business credit fast. Wait six months to apply. Make sure you’ve received reported trade lines from at least five net-30 vendors and your secured business credit card and have a history of early payments.
  6. Talk to your net-30 vendors and see if you can get them to increase your credit line. The highest credit limit you have of these accounts will be the equivalent of what most unsecured business credit card companies will extend to you. The higher the credit limit on these net-30 accounts, the higher your credit card limit will be.
  7. Apply for an unsecured business credit card. Wait until a year has passed. First, see if your secured business credit card company will transfer your account to an unsecured card. Most likely, they will. If they say yes, ask for a credit limit increase. If they say no, apply for another unsecured business credit card with another company. 
  8. Wait six more months and pull your Dun & Bradstreet, Experian Business, and Equifax Small Business business credit reports. Make sure your business credit reports are perfect, and your business credit scores are excellent.  
  9. Apply for a working capital loan with your bank. They will pull your business credit reports, find out your business FICO score, review activity on your business checking account, and, based on this information, approve you for the loan. 
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Tip: Use a working capital loan to pay your bills each month, then pay this balance off with your business bank account. This will help you manage your cash flow better while continuing to build your business credit profiles.

Final Advice for Building Business Credit Fast

Now you understand the importance of building business credit fast. You understand the preliminaries and even how to build business credit fast. The only thing left is to take action and start implementing the practical advice we’ve laid out for you. Before you do, however, here is some final advice to help you build business credit fast.

  • Pay all your bills early, always. Paying them on time is good, but it won’t earn you an excellent business credit score rating, just a good one.
  • Make sure your business is fundable. Fundability is ensuring your business can get business credit. You’ll want to learn more about how to build business credit first.
  • Do your due diligence. Start by asking yourself some questions: How do I get business credit? Is business credit based on personal credit? How do I build up my business credit without using my personal credit? Questions like these will guide you as you learn more about building business credit.
  • Find out about small business loans through the Small Business Association (SBA). The SBA offers 7(a) loans that can go a long way in helping small businesses build business credit faster.
  • Think of building business credit as building relationships with other companies and institutions. The more effort you put into building the relationship, the more you get out of it.
  • Check your business credit reports regularly. Mistakes in reporting happen. For this reason, we recommend checking your business credit reports monthly to ensure all information is correct.
  • Monitor public records. Potential lenders will check your business out thoroughly before deciding to extend a line of credit to you. Make sure your company is in good standing and compliant with all reporting requirements, etc.
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Recommended: Now that you know how to build business credit fast, discover how to maintain business credit. Then head over to our business center to take advantage of some free business tools.

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