Do You Struggle to Get Business Credit Without a Personal Guarantee?

Getting business credit can be a dificult thing to do. Lenders do not want to finance your venture if they don’t believe you have a stake in the business. However, if you can overcome their doubts, you will be able to get separate credit in your business name. So, what do I have to offer?

I have started four businesses over the last 13 years. In that amount of time, you can learn a lot of lessons about business. One of the biggest is how to get credit for a business without my personal guarantee. From experience I know that having business debt on your personal record does make your debt to income ratio a sight to behold. Now, there is one thing I did learn about lenders.

Lenders want to lend money. It’s the only way they make money for themself. But, they don’t want to give away money. For a lender to have enough confidence in an individual or business to lend money, they need some type of assurance that they are going to receive their payments. Where do lenders get their data to make a decision?

Lenders use credit reporting agencies to check on the reputation of a business or individual to see what is their history of credit. they can’t see into the future so their only measure of success is the past. The problem is that most businesses do not have a separate credit history. That’s why the lenders insist on having a personal guarantee for their loans. Do you know where a lender gets their information about you or your business?

There are different credit reporting agencies for business and personal information. We know there are at least three for personal history, but in the business realm, there is one main organization that most lenders use, Dun and Bradstreet. For you to be successful in obtaining independent business credit, you must have an excellent credit rating with Dun and Bradstreet. And what is detemines a great credit rating and D&B?

They have a rating system with a range of 0 to 100, with 100 being the best possible score. Their system is based on the number of days late that payments are reported from their participating lenders. The score of 80 means that every payment is made on time. A score higher than 80 means you pay everything earlier than the due date with 100 meaning that you pay everything before it is even invoiced. A score below 80 means you have a few late payments and it goes down from there. Can you guess what score you need?

To be able to get separate credit, you will need a score of 75 or higher or lenders won’t even consider you for a non-guaranteed loan. But, how do you build credit for your business?

There are steps that you can follow to get a acceptable score with Dun and Bradstreet. It begins with getting listed with D&B and getting creditors to report their experience about you to them. With enough history for your company, you should be able to get the credit you need to succeed. All you need to know is which companies will help you as you build your company’s credit.

Getting Business Ethics Right

Employees are more aware of business ethics and how they work inside the office and the company as a whole. In fact, they are more likely to report a wrongdoing than they were in previous years, even if some form of retaliation might be coming.

Employees also felt like they had to compromise their own standards in order to do their job or keep their job, and a nearly half of them report weakening standards by co-workers and management.

Employees Often Have Higher Standards than Businesses

Let’s take into consideration that most employees have been raised with better ethical standards than most companies list in their Employee Handbooks. Children are raised knowing it is wrong to lie and steal, be mean to another person, harass someone, or ignore something alarming. These are more or less the same things mentioned in an Employee Handbook.

The Josephson Institute of Business Ethics and Leadership reports that:

  • 45% of employees said they witnessed misconduct at work
  • 65% said they reported the misconduct they saw
  • 22% of those who said they reported misconduct claim they experi¬≠enced some form of retaliation in return
  • 13% said they felt pressured to compromise standards in order to do their jobs
  • 42% described the ethical culture of their company as weak

It is positive that more than half of the people in the survey reported misconduct they saw. However, in order to get business ethics right for employees and company, workers should not be asked or required to lower their personal standards. Nor should they feel like their jobs are threatened or some other form of retaliation is forthcoming. According to the National Business Ethics Survey, ethics are at an all-time low. They were lower in the year 2000. Some can play the partisan game of blame the President vs. blame the conservatives, but the bottom line is if it doesn’t look right, sound right or feel right, it is not right and should be reported. It is the same whether the company is a large corporation or a small business.

Getting It Right

The easiest way to get business ethics right is to practice ethically:

Business owners: Practice what you preach. You are expected to follow the same guidelines that you give your staff. They will follow them and report something that is not right and expect to carry on doing their job without adverse reaction from the person they reported it to or about someone they reported. They expect something to be done even if the person they reported is your friend or someone who makes money for you. Ethics are ethics. Practice what you preach.

Employees: Always be absolutely sure of the wrong doing before reporting it. If it was something that was mentioned to you, it is hearsay and doesn’t mean much. If you saw it, heard it or felt it, report it. If you are fired over it, there are legal recourses and the law is on your side.

Top Reasons Why You Need to Get Business Insurance Quotes

In order to protect your business, you would need to get business insurance quotes. They have specific tasks that are best for specific situations in the business. These quotes will help you cope up just in case there are lawsuits filed against you. In the times today, you can never tell what goes on with the minds of different people who will have something to do with your business. To be able to prevent a major financial disaster, protect your business with different insurance quotes. Here are the reasons that you must remember why you need to protect your business.

If your business is a grocery store where people can go in and out of the premises, you need to remember that you are liable for what happens to your customer within the premises of your store. If they tripped and got hurt because of some structural defects of the store, you are liable for any medical expenses. In times like this, you would surely need some cash and with the help of small business insurance quotes, you can be saved from spending much on medical financing for the costumer.

Moreover, if you are selling different kinds of products and when the buyer reaches home and surprisingly returns back due to some complains, you are again responsible to answer for the complaints since you are the owner of the small business. Product liability insurance quotes are useful for these kinds of situations because this type of business protection saves you from whatever the product has incurred on any of your customers. Depending on your quotes, it will cover medical expenses and maybe legal transactions.

If you are also running a business wherein your employers will be handling different kinds of tools like a construction business for instance, you need to protect your employees from whatever may happen to them at your workplace. As the head of your employees, you need to look over after their welfare. Business insurance quotes can also include health plans for all your employees. These plans save you from medical expenses. You can even include your health insurance so that you can get a good deal when in a group.

Lastly, if your business requires shipping of equipment, you might need insurance for the use of automobile by your employees and the quotes for the materials that will be transported on the automobile. Having insurance for this will protect your business from anything that may happen along the way or in the duration of transport of the products. It would be a big loss if you have no insurance policy since you will have to pay for the damages and at the same time you were not able to reach your suppose to be number sales for the transport.

These are few of the reasons of why you need to get business insurance quotes no matter how big or small your endeavor is. You must remember that you will suffer a great loss if you have no backup plan. So secure yourself with the right insurance quotes for your business.

Easy Way to Get Business Credit

One of the most important things in a business is getting credit. But how do we build a business credit?

Not because you have a business, you automatically have credit.

Make sure that you separate all your business and from all personal credit. The bank will always want to make your loans personal, so they can have a grasp on your personal credit. Make sure you make the loan in the name of your corporation, LLC etc. Your personal credit will get affected if you start using it to build your corporation credit.

Identity is everything. To have business identity is the most important thing to do. You need to go to the IRS and get a Federal EIN number, that is like the social security of your company. Get Permits on your business name as well as phone. The more things you have under your company’s name the better when the bank is looking into your business potential.

Maintain a balance on the bank for at least 3 month. The bank looks into your business statements. This is one of the most important things. To keep working capital on your bank account.

Business credit bureaus are an important step. Make sure you contact them, and open a file with them, the information provided is voluntarily. They are not the same as the personal credit agencies. The name of this companies are Dun & Bradstreet, Experian Business, Equifax Business, and Business Credit USA, report your business credit history to them. This will give more chances for getting loans from banks when they look at your credit history.

Get business credit cards that are not part of your personal credit. Apply for business credit cards from places like Staples, Home Depot, Apple, Sam’s Club, Costco etc. This report to the credit agencies. Contact vendors and ask for small credit. The more vendors you have the better for your company. Make sure you pay everything on time. If you have the money to pay the loan right away, don’t do it, pay it little by little. This will give you more credit on the long run. Keep your credit profile active all the time.

It is not a complicated process it only takes time to be build. Be consistent and you will build your credit in no time.