How to Build Business Credit Fast

Securing funding for your business is no easy task. According to the Bureau of Labor Statistics, over half of businesses fail within their first five years, with most of those failures linked to cash flow problems (U.S. Bank Study). A Small Business Majority report reveals that 90% of entrepreneurs find it difficult to obtain loans, and 51% of small business owners worry about access to capital every week (Firmament Group, 2017).

Most businesses fail within the first two years of incorporation. Lenders are very aware of this trend and prefer to lend funds to businesses at least two years old.

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This Guide Covers:

• COVID-19 Adjustments: How to build business credit for your EIN, independent of your SSN, even after post-COVID changes.
• Outsmarting Traditional Banks: Tips to become fundable and bypass traditional lending barriers.
• EIN Credit: These are simple steps anyone can follow to secure credit under their EIN.
• Corporate Cards: How to qualify for high-limit, revolving business credit cards.
• No Credit Check Needed: Get credit without personal guarantees or hard pulls.
• New Businesses Welcome: How startups can access up to $150,000 in credit lines.

This Guide Is Important If:

• You Need Capital: You’re seeking funds to grow your business.
• You’ve Been Denied: You’ve been rejected or might be denied funding. If your corporation or LLC isn’t at least two years old, you may be facing immediate rejection in business funding.
• You Want Fast Cash: You want the fastest and simplest path to capital.
• You Want Self-Funding: You prefer your business to fund itself.
• Avoid Guarantees: You’re ready to eliminate personal guarantees.
• Launch or Expand: You’re after the best funding options and terms to start or scale.

How to Win at Business Funding

• Build Credit Effectively: To secure the highest credit limits and best terms, structure your business to meet lender approval requirements before applying.
• Use Your EIN: Establish business credit using your EIN, separate from your SSN, to make your business more attractive to lenders.

Improve Your Access to Business Funding

Automated Approvals

Ever applied for a credit card and received instant approval? Lenders use specific, often secret criteria programmed into their systems. Meeting these standards gets you automatic approvals. The age of the company is often a secret requirement.  Your company should be at least two years old.

Make Your Business Credit Ready

Your business’s level of business loan readiness directly impacts its ability to secure automated approvals. A poorly structured business is often denied.

Why Loans Get Denied

Even if you qualify, many loan applications are rejected due to fraud concerns. Proper setup can prevent these unnecessary denials.

Key Business Credit Ready Elements

Ensure your business meets these critical business funding standards:

• Legal business structure (LLC, corporation, etc.)
• Age of the business.
• Dedicated business phone number (not personal)
• Phone listing in online directories
• Real business address (not a P.O. Box)
• Required licenses and permits
• Matching business records across all platforms
• Established business bank account
• Professional website and branded email
• Federal and business identification numbers: EIN, DUNS, BIN

What Business Lenders Check

Lenders validate your business information against data from sources like:

• LexisNexis
• Dun & Bradstreet
• Experian
• Small Business Financial Exchange
• Equifax
• ChexSystems

What LexisNexis Reports Contain:

• A complete record of every property you have ever owned, including purchase and sale prices, property values over time, and transaction details.
• Specific information on the building materials used in the construction of each home you’ve owned.
• Homeowners Association (HOA) details such as the number of bedrooms and bathrooms, roofing materials, and architectural features.
• Information on all air conditioning units associated with your residential properties.
• Documentation of deeds and mortgages linked to your name, including historical ownership transfers.
• Records of title companies involved in your real estate transactions.
• Interest rate data for all loans and mortgages, as well as original loan amounts, terms, types of loans (fixed, adjustable, etc.), and payment histories.
• A history of every phone number and email address you’ve ever used, across both personal and business domains.
• A comprehensive list of all licenses you have held—this includes professional licenses, driver’s licenses, and firearm registrations—as well as records of any violations.
• Legal records encompassing traffic infractions, misdemeanors, felonies, and any listings on sex offender registries.
• All known variations and aliases of your full name used in any personal, legal, or business context.
• Records of all marriages and divorces, including dates, spouse names, and court jurisdictions.
• A complete inventory of all vehicles registered under your name, including Vehicle Identification Numbers (VINs) and registration details.
• Data on every insurance policy you’ve held—auto, home, life, health, and more—including providers, policy numbers, and coverage terms.
• Identification of all businesses you’ve been affiliated with, either as an owner, officer, partner, or authorized representative.
• Family-related data, including records that identify your children and other familial associations.
• Details of personal loans, commercial loans, and lease agreements you have entered into over the years.
• Documentation showing ownership or registration of aircraft and boats, including model numbers and tail or hull identification.
• Public record information such as bankruptcy filings, civil judgments, liens, and lawsuits filed either by or against you.
• Academic records that list the schools you attended, degrees earned, fields of study, and the dates you enrolled and graduated.
• Military service records, including branch of service, ranks held, deployment history, and dates of service.
• Digital and marketing data including your response to online advertisements, email campaigns, and any short-term credit offer requests you’ve made or interacted with online.

Understanding Business Credit Reports

• Lenders rely on your business credit report to evaluate your company’s financial health, determine creditworthiness, and decide how much funding to offer.
• Your business credit directly affects your chances of approval, as well as your credit limits, interest rates, and repayment terms.
• With strong business credit, you can secure funding regardless of your personal credit score.
• Business credit allows you to access financing without a personal guarantee or consumer credit check.
• Credit limits are often 10 to 100 times higher than those available with personal credit.
• Approval decisions are typically faster, as business credit scoring emphasizes on-time payment history.
• A well-established business credit profile builds credibility with lenders, vendors, and partners, giving your business a competitive edge.

Key Points to Know:

• Your business credit file is public—lenders, suppliers, and even competitors can view it.
• If your business has no accounts reporting, it may receive a low or failing score, signaling a lack of stability or credibility.
• Even a single positive tradeline can significantly raise your score and enhance your lending potential.
• As your credit profile grows, credit bureaus begin recommending your business for more funding, helping you unlock greater financial opportunities.
• All types of businesses can qualify for business credit—including startups, nonprofits, foreign-owned companies, and entrepreneurs with multiple businesses.
• You can still get approved for business credit without meeting traditional loan requirements—there’s no need for collateral, revenue, or personal credit checks.

Initial Steps to Build EIN Credit

• Start With the Right Issuers: Choose credit issuers who report to business credit reporting agencies (CRAs) and approve businesses without existing credit.
• Guarantee Options: You can build credit with or without a personal guarantee.

Use the Credit Line Hybrid to Build EIN Credit

• Access up to $150,000 with a Credit Line Hybrid
• Enjoy 0% interest for a set period and no document requirements
• Cash-out options available
• Great for startups or those with credit partners
• No collateral or revenue required
• Get multiple cards, typically 5 to 8
• Both standard and business credit cards offered
• Free roll-in funding process

Use Vendor Accounts to Grow EIN Credit

• Choose vendors that don’t require a personal guarantee or credit check
• Avoid Net 30 terms if not necessary
• Some vendors have a minimum purchase requirement
• Only work with vendors who report to business credit agencies

Top Starter Vendors:

• Uline
• Crown Office Supplies
• Laughlin & Associates
• SupplyWorks

Your business credit readiness determines your approval with these vendors

Steps to Build Credit for Your EIN

• Build Credit for Your EIN: Start by applying for a credit-building program that matches the number of accounts currently reporting under your EIN.
• Increase Accounts Reporting:
  • With five or more accounts reporting, you can apply for Retail Credit.
  • With eight or more, you qualify for the Fleet Credit Tier.
  • Once you have 14 or more accounts and at least one with a $10,000 high limit, you can access Cash Credit Tier and auto financing.
• Post-COVID-19 Lending Climate: Underwriting relationships have become critical in the approval process since the pandemic.
• Avoid Personal Guarantees: Do not authorize personal guarantees or consumer credit checks. Use the credit extended to your business, pay early, and ensure all credit lines report to business credit bureaus.
• Annual Reports: Be mindful of employee count when filing; it impacts business credit readiness.
• Dun & Bradstreet (D&B): Submit your financial statements to D&B to strengthen your business credit profile.

Step 2: Monitor Your Business Credit Reports

• Every Entrepreneur Needs Access to Funding: You deserve reliable access to funding to fuel growth and success.
• Know What Lenders Want: Businesses are held back by a lack of awareness of approval requirements, missing business credit history, and scattered funding options.

Make Your Business Credit Ready

Your business’s level of business loan readiness directly impacts its ability to secure automated approvals. A poorly structured business is often denied.

Conclusion

In Conclusion, establishing good business credit is crucial in obtaining funding, longevity, and expansion for your business. By taking the proper steps – like building a strong credit profile, utilizing your EIN and steering clear of personal guarantees – you can better your odds of approval and take the steps to secure the capital your company needs to grow. The proper preparation now will ensure future access to more financial opportunities.