Quick Guide to Business Credit Lines

Dec 17, 2024

How to Build a Business Credit Line in 3 Days

Introduction

  • Obtain hundreds of thousands of dollars in business funding in your business's name, potentially without a personal guarantee.
  • Understanding the difference between business credit and personal credit is crucial.

Personal vs. Business Credit

  • Personal Credit:
    • 3 credit bureaus: Transunion, Equifax, and Experian.
    • Reports trade lines such as credit cards, mortgages, car loans, and student loans.
    • Good personal credit score: Over 700.
  • Business Credit:
    • 3 credit bureaus: Experian Business, Equifax Business, and Dun & Bradstreet (major one).
    • Reports only business accounts.
    • Personal accounts do not affect business credit.

Steps to Build Business Credit

Step 1: Set Up a Business

  • Register Your Business:
    • Obtain a business license.
    • Choose between LLC, C Corp, or S Corp.
    • Register your business with your state’s Secretary of State.
  • Obtain an EIN:
    • Employer Identification Number (EIN), similar to a social security number for your business.
    • Free and available at irs.gov.
  • Establish Professional Details:
    • Obtain a professional phone number, email, and website.

Step 2: Open a Business Checking Account

  • Requirements:
    • Business license and EIN number.
    • Deposit of $500-$1,000 recommended.
  • Bank Selection:
    • Opt for mid-sized banks rather than large ones (e.g., Regions Bank, BB&T, PNC Bank).
    • Mid-sized banks have more funding opportunities for small businesses.

Benefits and Opportunities

  • Business credit cards and lines of credit can be obtained quickly and do not affect personal credit.
  • Business funding can be accessed on the spot when opening a business checking account.
  • Credit cards and funds are available due to current economic policies.

Additional Resources

  • North One:
    • Bank that facilitates access to business funds.
    • Integrates with Paypal and Square.
    • Recommended for easy and fast access to business funding.

Conclusion

  • Implement these steps to access business funding quickly.
  • Start your journey to securing business credit lines and support your business growth efficiently.
  • Check out North One for further assistance and resources.