Business credit

7 Replies

If I set up a LLC does a bank generally see that there is no credit history or do they go off of my personal credit? How do I get a loan of they won't use my personal hx?

you will have to sign personal guarantees. you have to build a credit history just like you did personally.  

How do you build business credit in the LLC name?

Originally posted by @Renee Cato :

How do you build business credit in the LLC name?

You need to start applying for business credit. To begin with, you apply with you as a personal guarantee. That's the only way to do it. After you establish a history, you can continue to build that business credit without your personal credit having anything to do with it.

I got over $50k recently on revolving business credit and I max it out to do all my rehab work on my properties. Doesn't effect my personal credit history and as long as I'm making the minimum payments, the lenders love me. Bonus is, I'm paying no interest. Can wait to reapply again and try for more credit. It's really helping me get more deals done.

What I have done is get loans in my name and put the money in the LLC. Yes I am liable for the money still however the property I buy in the LLC is not. I like buying in my own name in good areas and buying the more risky areas in my LLC. They bank did give me a credit card for my LLC and used gave me the same balance my current credit card had which was nice.

The fastest way to build business credit today is to bypass vendor credit and go directly to the banks-- unsecured business lines of credit. In 90 - 120 days business owners can obtain $100k to $250k in unsecured business lines of credit themselves.

Follow these simple steps:

1) Establish a strong internet presence for your company by listing it on at least 15 sites-- Facebook, LinkedIn, Twitter, Scoop It, Bing, Manta, 411, Google+, Google Places, etc.

2) Establish a business checking account at 2 banks (with a 700 credit each will offer a business credit card.

3) Make regular deposits into your business checking account for 90 days to establish a favorable bank rating.

4) Add higher level trade references to Dun and Bradstreet to provide depth to your Paydex Score (net 30s are usually lower amounts; you'll need higher approvals from your trade references-- 2k to 4k).

5) Upload your company financials to Dun and Bradstreet to complete your file and create a strong credit profile.

6) After 90 days apply for unsecured lines of credit. Here is why you'll be approved:

* a bank has already loaned your business money (business credit cards); Dun and Bradstreet, Experian Business and Equifax Business have all reported your business credit cards. 

* the added trade references will add credit profile depth, as will uploading your financials

* your deposit activity and use of bank products (business credit cards) shows ability to   repay

* bank rating is formed after 90 days of deposit activity 

@Shay Seimears

Generally, C-corporations are better for raising commercial credit (visa, mastercard, amex, etc). If a company knows that you are a real estate company (using your NAICS or SIC code), they will shy away from that. It is best to use a NAICS or SIC code showing that you do "Business Management."

If your corporation's credit scores are not good enough (Paydex score and Experian Intelliscore), banks and other vendors will want to see your FICO.

There is someone named Jorge Bueno that has a system called "The Business Codex."

You can look him up, he is a very well knowledged individual

Stanley and Manuel.

There are some points I wasn't aware of so thanks for adding the information. While I've been building my business credit I haven't been able to do it in the speed you mentioned Stanley.

What's most important, is that everyone understands that initially, you're going to need to personally sign to apply for business credit. Once you've established a good credit history, the rest takes care of itself. But that first step, MUST be done right otherwise you risk hurting your personal credit score. I had a company helping me set it up and I'm about ready for my second round of business funding. 

Thanks again.

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