How to Build Business Credit

MSC Legacy can help you establish business credit quickly with no PG or personal credit check so you can run and grow your business.

How to Establish Business Credit

Just like you have personal credit, your business has business credit. Business Credit is all credit available to a business. This can come in many forms including credit that does not require a Personal Guarantee and some that does.

You will always need your EIN to apply and use business credit and in many cases you’ll need your SSN to verify your identity.

How long does it take to build business credit? Establishing business credit is a process. But it doesn’t have to take forever. You’ll often see that it takes three years for a business to build credit. While it can be helpful to be in business for that long, you can build a good business credit profile and score long before that.

To start establishing business credit you will need to determine what type of trade credit you will need.

Vendor Credit

Retail Credit

Fleet Credit

Service Credit

Business Credit Cards

Vendor Credit

Vendor credit is when a vendor (a business that your business buys goods or services from) extends payment terms to a customer. This is generally based upon the customer meeting certain criteria set by vendors themselves and sometimes underwriters or financial institutions.

Vendor credit is often made on net terms. This means the customer has a set number of days in which to pay. Net 30, for example, means the customer has 30 days to pay—and they have to pay in full.

Contrast this with revolving credit terms, where a customer can pay some of the balance and carry over the remaining balance to the next month. Vendors will sometimes offer revolving terms.

Another aspect of vendor credit is that it’s only good for the vendor extending it. Unlike, say, a Visa card, vendor credit won’t be accepted anywhere but with the vendor.

Starter vendors are often where to apply for business credit if your business is a startup. Many of them do not require much time in business, or credit history. And if you cannot meet either of those criteria, you may be able to instead offer a personal guarantee or secure your credit with a monetary deposit.

More About Fundability

Fleet Credit

Fleet credit comes from companies that issue credit for purchasing fuel, and the repair and maintenance of vehicles. Often, these are gas credit cards. Even businesses that don’t have large fleets of vehicles can still benefit from fleet credit.

There may be time in business and/or credit history or business revenue requirements. If you cannot meet some or all of those criteria, you may be able to instead offer a personal guarantee or secure your credit with a monetary deposit.

Since these credit cards tend to be ultimately issued by banks, your Social Security number will have to be on your credit application. This is in accordance with Federal law.

Terms can be either net or revolving.

Service Credit

Service credit is credit issued by a service provider to pay for their services only.

There may be time in business and/or credit history or business revenue requirements. If you cannot meet some or all of those criteria, you may be able to instead offer a personal guarantee or secure your credit with a monetary deposit.

Since these credit cards tend to be ultimately issued by banks, your Social Security number will have to be on your credit application. This is in accordance with Federal law.

Terms can be either net or revolving.

Business Credit Cards

Business credit cards are payment cards issued by a vendor through or directly by a financial institution to users. Such a card enables a business to pay a merchant for goods and services. This is based on the business and/or the business owner’s promise to the card issuer to pay them for the amounts plus any other agreed charges.

There may be time in business and/or credit history or business revenue requirements. If you cannot meet some or all of those criteria, you may be able to instead offer a personal guarantee or secure your credit with a monetary deposit.

Since these credit cards are issued by banks, your Social Security number will have to be on your credit application. This is in accordance with Federal law.

Terms are usually revolving.

More About Fundability

What is Business Credit Used For?

What can business credit be used for? For businesses, credit can and is used for any purpose which requires the use of funds. Understanding when the business should use business credit with or without a PG to run and grow your business can be truly powerful.

Vendors and trade credit can often be used to keep business debt from showing up on the business owner’s personal credit.

However, it might make sense to save a personal guarantee when you apply and use business credit with a PG to grow and expand your business.

Business credit should be used strategically to help manage cash flow and to help the business become more Fundable.

There is a science to using your personal credit in the right way at the right time. It helps to ensure that business debt doesn’t show on the personal credit reports and works to protect your personal credit.

The Day to Day Running of a Business

With a wide variety of business credit issuers, you can use business credit to fuel the daily running of your business. You can often get vendor and trade credit without a personal guarantee. This can also make it possible for you to keep business expenses from reporting to your personal credit. Instead, it will keep the reporting of those business expenses on your business credit accounts. This helps to make sure business debts don’t show on your personal credit.

Growing a Business

It often makes sense to personally guarantee or leverage a personal credit check to access more advanced business credit accounts. This can often help you get higher limits on business credit cards or other accounts.

Our Credit Line Hybrid program is a sequence of business credit cards that leverage both business credit and personal credit to get up to $150,000 that can be used to hire new employees, grow your marketing, or otherwise expand your business.

Strategically using business credit and personal credit together can open you up to more financing options beyond net 30 vendors.

How do I Build Business Credit Fast?

To build business credit fast, you need to know which business credit vendors will report to the business credit bureaus, so you don’t waste your time trying to work with those which don’t. It will also save time to get your business set up properly and gather all the information and documents which many vendors will want to see before they will approve you.

A third way to save time is to only apply to vendors where you know your business is most likely to be approved. If you’re wondering how to get approved for business credit, the answer is to start small.

It pays to work with a business credit expert who keeps track of which vendors will report to the business credit bureaus. Furthermore, it helps even more when that expert diligently keeps track of changing requirements. MSC Legacy does both.

The Business Credit Builder

The MSC Legacy Business Credit Builder and Business Finance Suite can help you build business credit by doing the heavy lifting for you. We have a team dedicated to finding and maintaining hundreds of business credit accounts. The Business Finance Suite will help you understand and improve your Fundability, establish your business credit profile, get business credit accounts, and even give you access directly to lending opportunities.

Business Credit Builder

Business Credit With and Without a Personal Guarantee

Credit issuers and lenders will ask for a personal guarantee when a business’s other Fundability Factors are not strong enough to support the credit decision without leveraging your personal credit.

You can still access hundreds of business credit accounts without a personal guarantee in the MSC Legacy Business Credit Builder. Not using your personal guarantee to get business credit means that you can use it later when it matters most… Growing your business.

The Credit Line Hybrid product leverages your personal credit or a credit partner’s personal credit for credit card approvals up to $150,000 and 0% for 6-18 months. This is a great way to get cash in hand and still run your day to day operations without harming your personal credit or finances.

Business Credit Benefits

There are several benefits to building and using business credit. Business credit building is a meaningful act which can help your business now and in the future. Here are some ways it can help you and your business succeed.

Boosting your overall Fundability™

Your business can qualify for more types of financing, at better rates and with better terms

Lower Insurance Premiums

A business credit file showing a history of paying on time can help lower your business insurance premiums

Separate your business from personal credit

Using business credit can lower your personal credit utilization which can raise your personal credit scores and even make your business more Fundable

Better cash flow management

Using business credit to run your business, buy supplies, buy inventory, etc. can be done with net 30, 55, 60 terms or on revolving terms which allows you to get what you need now and pay later.

Can get regardless of personal credit

Many vendors and trade accounts don’t require a personal guarantee so if you’re working on your personal credit you can build business credit at the same time

Business Valuation

Surprisingly having an established business credit profile can impact the value of your business. As you build business credit it can be easier to grow and a less risky business is more valuable!

SINGLE Payment

$1997

30% cheaper than the competitors, to get started.

after receiving your first $50K in business credit a $2499 finders fee will be charged.