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Grow your small business by acquiring corporate credit

As a business owner, your goal is to constantly grow to meet the sales you’re racking up. Money is often needed to obtain the equipment and cover operating expenses to start such a venture. The only problem is that you don’t want to spend all your profits on the cost of expansion and the reason why you should apply for corporate credit.

Applying for corporate credit can be tricky if you’re not sure how to do it the right way. Remember that it is very important to carefully access what you need to obtain. This helps the research aspect of the process and finds the lenders you should consider applying with. The last thing you want to do is apply for corporate credit with any company.

Before you start applying for corporate credit with a bunch of different financial institutions, do your homework because the last thing you want to do is apply for different types of corporate credit from a bunch of different companies at the same time. You will only end up being taken advantage of and you will end up with very unattractive terms. The better interest rate you can get, the more money you will earn.

  • The first thing you want to do is form a corporation such as an LLC or limited liability corporation.
  • Get out there and get all the proper permits and identification numbers. The most important identification number you will need is the Federal Employer Identification Number, or FEIN. You may also need to acquire certain licenses, sales tax numbers, and state identification numbers.
  • Now that you’ve allocated corporate funds, you’ll need to open a bank account in your corporation’s name with a reputable financial institution.
  • Now you need to obtain a Data Universal Numbering System, also known as DUNS, identification number for your business. These usually take about seven days to receive.
  • Find some creditors who may be willing to lend money to relatively new corporations. Always make sure you understand all the fine print and terms and conditions associated with one of your loans. Ask questions about rates and fees, annual fees, and payment penalties.
  • Many financial experts recommend taking out small incremental loans at first. This helps build your credit reputation and then in the future you may qualify for better rates. Start with a bunch of small loans, and then pay them all off on time. This will help increase your company’s credit score in the 70-80 range, which is considered excellent. Also, make sure you have clean books of account.
  • Take the time to talk to other business owners in the same industry and ask them which loan bureaus are the best to work for. You will find that industry references generally work better than general recommendations.
  • During the first few months of your business, never make your corporate credit vulnerable and bite off more than you can chew. Budget wisely and incorporate finance charges into your semi-annual budgets.

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