CORPORATIONS AND SHELF LLC'S
BUILD CORPORATE CREDIT
Your business must have the following attributes:
- You must be a corporation or an LLC. If you're not
incorporated, you're not considered to be in business. Sole
proprietors may not obtain business credit. In fact, sole
proprietors may only access personal lines of credit.
- At least two(2) years old
- At least 5 trade credits accounts. These are trade lines that
are reported to credit bureaus.
- Credit file number
- Business credit score of 70 or below
- No 411 directory assistance listing
- All resources of information, from the local business license, your
website, to the Secretary of State, must have the same information about
you and your company. The reported address of the company must be
the same. The officers of the company must be the same.
- Debt coverage ratio of 5:1 or better
- You should have at least $10,000 in your bank account for the last
three(3) months. Your Average Daily Balance(ADB) is important.
The banks consider any ADB of $10,000 to $30,000 a Low-5. Balances
from $7,000 to $9,999 will delay any application process. These
are funds that are left on deposit with the bank, and not used for
operating expenses or any other reason.
Without business credit, expect to provide the following:
- Credit references
- Financial statements and tax returns for each owner of the
- Financial statements, prepared by your accountant, and balance
- Personal financial statements
- Assets available for collateral
- The above documents for the last three(3) years.
How does applying for corporate
credit impact your assets?
Serving as a personal guarantor for
business loans places your assets at risk. This means the banks
may sue you to recover personal assets to cover business liabilities.
Not serving as a guarantor will protect your personal assets from any
possible business failure. In addition, tapping into your own
savings may not be advisable if lines of unsecured credit is available
to the business.
Banks may also sue you for payment, if
you used personal credit cards for business activity. If the
business tanks, then you're stuck holding the bills on a personal end.
Using personal credit to apply for
business loans also reduces your credit score.
SHELF COMPANIES . BUILD CORPORATE
CREDIT . TRANSPARENCY
109 EAST 17TH
STREET, SUITE 25, CHEYENNE WY 82001
Office 307.237.2580, Fax 702.920.8824,
All Rights Reserved