BUILDING CORPORATE CREDIT.

Incorporating a new company is better than not incorporating at all. And older corporation is a great advantage in overcoming the age hurdle immediately. Most competitors won't consider it.

Don't pay for the DNB corporate credit package. You don't need it, or them.

DNB makes money from selling reports about your company. When your company applies for any credit, DNB will issue a DUNS number automatically so it can sell reports about your company. Therefore, you don't need to pay DNB for a "quick" registration. Save your $500+ and spend it on marketing.

Not paying bills on time.

Pay bills on time.

Don't use personal credit to finance business operations.

Don't place your house and other assets at risk. Don't use your home office to build corporate credit.

Incorporate. Obtain a business address for the company.

Don't post collateral from personal assets for business operations. It makes them vulnerable to loss.

This risk is acceptable if you're reasonably sure that it's necessary and there's a likelihood of success. Otherwise, it's a bad idea.

Don't commingle business and personal assets. As a sole proprietor, you have unlimited liability. The use of a corporation or LLC provides limited liability.

Incorporate!
Keep company assets separate from business assets.
Then place business assets in your business. Don't commingle personal and business assets. Separate is good.

Don't commingle contact information. Although your name is on the corporation or LLC as the Director/President or Manager, the address of the company should be a business address.

Keep business contact information separate from your personal assets. This means a separate phone number, separate fax number and address. Efax.com and a virtual office, or mail drop, may help accomplish this objective.

Don't use family assets unless collateral is required for the necessary level of financing.

Keep the family assets and obligations separate from the business. Only use the family assets when you accept the total commitment of that collateral and what would happen if the collateral is lost.

Don't use your personal credit as guarantor for a business loan unless it is absolutely necessary.

Apply for credit under the company name to develop a company credit profile that is separate from your personal credit profile.

Don't ignore special status.

SBA offers special status such as Women Business Enterprise, Women-Owned Small Business, B(A) Business Development Program, Minority Business Enterprise, Disadvantaged Business Enterprise, Historically Underutilized Business Zones, and Service-Disabled Veteran-Owned Small Business

Don't ignore business licensing and insurance.

Compliance is a prerequisite to getting funded. Obtain the business licensing and insurance required by your state.

Don't ignore the business plan. Since most people don't have a business plan, they lose out on opportunities, cost cutting measures, and execute poor accounting measures. They don't know where they are going.

Business plans help business owners stay focused. And they assist in keeping things into perspective in how the business sits among competitors, the industry, location, break even point, advantages, risks, customer profile, marketing plan, objectives, management, operations, financials, goals, and other issues. This is an advantage for people who plan because most people won't plan at all. How many people heard of the business plan but refuse to consider one? But they'll plan a vacation to every detail.

Don't ignore business financials.

The bank wants to see your business' cash position, cash on hand, income sales, expenses, and repayment terms on loans.

Don't ignore yourself.

Critical information about you: Your financials, collateral, loan terms, interest rate, personal credit score, and reason for the loan.

Don't commingle credit histories.

Keep your credit file separate from your spouse, separate from others (co-signer) and separate from your business.