Establishing Small Business Credit - and Your Options in the Meantime?

Establishing small business credit is an essential step as you work to grow your business. Given that small business credit card rates are often higher than those associated with cards for the general consumer, having a solid credit reputation for your business is important. Similarly, you’ll find that the better your small business credit rating is, the better the terms that you’ll receive when you make arrangements with new suppliers. If you intend to branch out and grow your business or move to additional locations, the credit you establish for your business will also play a vital role in your ability to finance that growth.

So, what can you do to establish small business credit?

On one hand, the best thing that you can do is to start small. Make sure that you are paying utility and rent bills on time. Just as these steps impact your personal credit in life outside of your business, they are key in establishing small business credit. Additionally, you will want to focus on making payments to your suppliers in a timely fashion, to make tax payments on time, and - once you’ve established a reputation of credit-worthiness with some suppliers - ask your creditors for a reference that can be used as you enter into new relationships.

Having a merchant account for your business will also help you to establish small business credit as the processing company charges monthly fees and per transaction costs. Additionally, if you need financial support while you are establishing small business credit, this will enable you to apply for cash advances - giving you access to the funding you need now as an advance on credit card payments that will be made in the future.

Obviously these are just starting points when it comes to establishing small business credit, but you may be surprised by how far they will take you. Look at relationships with your creditors, focus on budgeting well and making all of your payments on time, and then work to continually improve the financial reputation of your business.