Business Credit Funding

[Cassandra Sifford]

Hello BP!!! I recently started an LLC and was wondering what type of success and stumbling blocks everyone has had in building their own business credit? What companies do you find that are extending lines of credit and / or loans to your business? How long have you had your LLC or corporation as I'm sure that may have made a difference in a denial vs. an approval? Was a personal guarantor contingent upon approval? I was looking into working with a company, but like to give things a good effort before I hand things over to someone with more experience. If you've had really good success with a company who set you up, please share your story as well!

Looking forward to everyone's insight and hope others can benefit from the experiences of others!

Cassandra

[Clint Coons]

Cassandra,

Are you looking to get tradelines in the name of your LLC? One thing I tell my clients is to open up a business credit card with Amex, Chase, or Wells (these companies do not report back to your credit score). You will have to give a personal guarantee, and the companies will run your credit when deciding on your limit, but this is a good start. Just make sure when you obtain the card that the issuer will not report back to your credit. Step #2, work to establish business lines with home depot, office depot, etc. under your business and use the credit; otherwise, you won't get any benefit. The key to building credit is to make sure the companies you work with are reporting. Keep in mind that building credit with your business if great for trade lines, but I run into a lot of investors who believe once they have built up a credit score for their business, they will be able to buy real estate and not have to sign personally or use their credit. All I can say is it has never worked for me. I have a portfolio of over 110 properties, and unless it is a commercial or portfolio lender /asset and experienced-based loan, I have always had my credit hit. My firm offered this service at one point (15 years ago), and we stopped after about one year because our client's expectations often exceeded reality. There are some companies out there that are great with setting up lines that report. This is key - you need the lines to report. Just realize what is and is not obtainable with business credit, and your expectations will most likely be met.