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Building and Sustaining Business Credit: A Step-by-Step Guide

In the business world, your creditworthiness can be the ticket to various growth opportunities, from securing a larger office space to expanding your product line. Business credit, separate from personal credit, is a measure of a company's financial responsibility. So, how does one go about establishing and maintaining a solid business credit profile?

1. Separate Business from Personal Finances: Begin by opening a business bank account and ensuring all business expenses and revenues pass through it. This not only helps in financial tracking but also in building a transaction history. 2. Obtain an EIN and D-U-N-S Number: An Employer Identification Number (EIN) is required for tax purposes, while a D-U-N-S Number from Dun & Bradstreet helps creditors report your payment activities. 3. Establish Trade Credit: Initiate credit terms with your suppliers. Even if it's "Net-30" terms, it's a start. Ensure you're on time with payments. 4. Get a Business Credit Card: Using and promptly paying off a business credit card can help establish credit history. 5. Pay Your Bills On Time: Your payment history has a significant impact on your credit score. Ensure you're paying all your bills on or before their due date. 6. Monitor Your Business Credit Reports: Regularly check your credit reports for inaccuracies and discrepancies. 7. Limit Credit Usage: Maxing out your credit limits can be a red flag. Aim to use only 20-30% of your available credit.

Building and maintaining business credit won't happen overnight. But with patience and diligence, it can lead to better loan terms, increased borrowing power, and, ultimately, a more trustworthy and attractive business entity. If you're looking to understand more about business credit or need assistance in evaluating your current standing, reach out to us at chris@quantififunding.com.

– The Quantifi Team


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