The Small Business Administration (SBA) defines Business Credit:
Access to cash and credit is a business’s lifeline. Business credit allows a company to borrow money that can be used to purchase products or services. It is based on the trust that payment will be made in the future.
Why establish business credit? For business owners, having a separate legal entity, such as a corporation or limited liability company, provides the unique ability to create a credit identity with business credit reporting agencies, also known as a business credit profile.
Reality check:
> Funding your business with your home equity or personal savings/guarantee is a HUGE risk
> ~45% of Small Businesses applied for a Business Loan in 2023
> Less than 2% of SBA Loans are actually funded/approved
> 29% of Small Businesses FAIL because thee run out of Capital
> Your company’s name on a credit card is NOT corporate credit (if you used your FICO score to get it)
> Business (EIN) credit will open new ways to finance your growth
If you keep doing what you've always done, you'll keep getting what you always got!
