Felicia Dixon Ward
Here is a quick recap from part I of this two part article:
According to the United States Chamber of Commerce Statistics and Research Center these are some of the following factors, which affect credit approval:
• Business Owners Race
• Business Owners Gender
• Lender Size
• Business Plan
37 percent *
• Financial Stmt. Issues
• Amount Requested
• Age of Business
• Annual Revenue
• Current Business Debt
• Business Owners’ Credit
*African Americans 47 percent, Asian Americans 42 percent and Hispanic Americans 33 percent.
Out of all the factors in the statistical data considered, business owners’ personal credit was the highest factor for consideration for credit approval.
Part II of this article deals with establishing credit for your business. If your personal credit is in the process of being restored you can still receive credit for your business ventures. The information applies to businesses established as a corporation.
If your business is not a corporation your commercial credit will be based on your personal credit file.
Most commercial accounts are separated from your personal credit history. Commercial business accounts can help the small business owner finance certain business products and services necessary in starting and running their business.
Commercial creditors normally want the business to be established at a minimum of six months. If the business is less than two years it may require a personal guaranty. Commercial creditors use companies such as Dun and Bradstreet (http://www.dnb.com) to check your business account status. Equifax business has the same commercial credit services.
Dun and Bradstreet and Equifax are the business equivalent of personal credit. So, it is important if the business owners already have commercial credit accounts to keep the accounts current and in good standing. A Paydex Score (rating system) of 80 is excellent. This means the business accounts are paid timely per the commercial account agreement.
Dun and Bradstreet is a paid a service, which means you as the business owner must pay Dun and Bradstreet to establish your commercial credit account file. Equifax is not a paid service the information is automatically added to a file once the business has commercial credit accounts. Your commercial credit information is added to Equifax if the subscriber (commercial creditor) uses Equifax Business Services.
However, most companies use Dun and Bradstreet to check commercial business account status. You do not have to have a DnB credit file to receive commercial credit. DnB has a free service, which allows the business owner to establish/receive a Dun and Bradstreet number. A Dun and Bradstreet Number is the first step to establishing a DnB account but remember it will cost you to establish an actual business credit file.
Recap to establishing commercial credit:
1. Free Federal Id Number http://www.IRS.Gov
2. Establish a bank account
3. Establish a free Dun and Bradstreet Number http://www.DNB.com
4. Corporations commercial accounts will be based on the business not the business owner.
Listed are a few commercial creditors to assist you in establishing business credit without a personal guarantee. Some of these creditors will allow you start building credit the moment you have a Federal Id Number. Each creditor has specific requirements.
1. Nebs Office Supplies
2. Kinkos Commercial Account
3. ExxonMobil Business Card
4. BP Corporate Business Solutions Mastercard
5. Office Max Business Credit
6. Lowes Business Credit
7. Staples Business Credit
8. JC Penney Commercial Account
9. Office Depot Business Credit
10. Home Expo Commercial Credit
11. Home Depot MasterCard
12. Home Depot Commercial Credit
13. Shell Business Gas Card
14. Sunoco Business Gas Card
16. Tiger Direct-Technology Products.
17. Tiffany & Co.
18. Phillip 66 Conoco 76
19. Dell Financial Services
20. Best Buy for Business
21. Marathon Fleet Card (Gas Card)