Building Business Credit
Tue, 29 Apr 2008 16:21:31 -0700
Building Business Credit
Filled in Building CreditStep One: There a many aspects to starting a business, but first we will talk about licensing your business. There are many types of licensing, and most cities, counties, or states require some type of licensing. Nearly, all businesses need a local (city or county) license, however you can check with your county government or local city hall to be sure.
A local business license will give you the authority to operate your business within that city of county. Visit your local city hall to obtain your application or you can request information for licensing your business over the internet by downloading the correct forms, completing and mailing your forms back to your Commissioner of Revenue, City Hall, or County Office in your area.
Step Two: Applying for a EIN (Employer Identification Number) An employer identification number, also known as a federal tax identification is used to identify a business entity. You can apply for your EIN number online or you may download the form and send it via snail mail
Step Three: The process of establishing a limited liability corporation (LLC). This I found to be a very simple process, once I decided to save my $500.00 and undertake it on my own. A limited liability corporation give you the owner a limited amount of liability for the debts and actions of the corporation. There are also many tax benefits to establishing this type of structure. You will establish this corporation so that you may begin to build your credit under the corporation, instead of using your own personal credit.
Visit your State Corporate Division's website to download the forms you will need. Before you begin completing the form, you should be sure to do a such from the site to be sure that the corporate name you plan to use is available. This can be done online for most states. Read all pertinent information on the site, as some states are different from others.
Once you have completed the form, you will need to type up a form called an Article of Organization, which basically provides information as to who will be running the company. After you have completed both forms, you will need to copy them and submit the request fee, usually $100.00 to your states corporate division. The process will usually take about 30 days.
Step Four: While waiting for you LLC documentation to return, you will need to open a business checking account. Be sure to take all necessary documents regarding your business when opening your account.
Step Five: You will need a business phone number listed in your business name. A business listing is mandatory to your business credit building efforts. Often times after you complete a step, you will automatically be pushed into the next step. Establishing your business listing will cause you to start receiving various business solicitations from various credit card companies. An additional option for getting a business listing is toe call your local phone company and ask for information on remote call forwarding. See if they will allow you to have this set up using your business name and cell phone number. When you begin apply for credit you will give them your remote number.
Step Six: Now we are going to begin opening some net 30 day accounts, which are accounts that allow us to make a purchase and pay within 30 days. The below accounts I will give you do not require very much verifiable data. You will want to start by opening a minimum of 5 net 30 day accounts. Make monthly purchases and pay those accounts in advance of 30 days.
List of Net 30 day Business Credit Accounts
http://www.uline.com Order catalog online, place small order via fax, pay within 30 days
http://www.quill.com Register and order catalog online, place minimum of $50.00 fax order, pay within 30 days
http://www.nebs.com Register online, order catalog with this one I did a mail order paying 50% of my order and leaving the rest to be placed on account.
http://www.ShopAramark.com Register online, order catalog, Check bill me and fax your order.
http://www.reliable.com Register online, order catalog, place order and pay within 30 days.
Step Seven: Open the following Shipping Accounts
1. http://www.fedex.com/us 2. UPS shipping account
Making regular and consistent orders, then submitting payments early, over time will make this next step a lot easier.
Get an additional List of 22 other Credit Accounts for your Business for $3.00
Only $3.00 This $3.00 will help us to maintain and update this
list to provide you with current information. We thank you for your help.
Step Eight: Applying for your Dunn & Bradstreet Account after 3 to 6 months of using your net 30 accounts. Usually most of the the 30 day nets will have already sent in a rating on your account. A paydex score is a score used to rate your business credit worthiness. Visit http://www.dnb.com and apply for a D&B number. This usually takes about 30 days, if you do not use the D&B business builder plan with cost at this time $400.00.
Within 30 days you will received your D&B number, and most of the 30 day net accounts will have already begin reporting, giving you a pretty good paydex score. Now, that you have your D&B account, you will want to use the list of 22 Credit Accounts above to apply for additional credit.
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