Starting a Business with Bad Credit? Yes, It’s Possible - Here’s How!

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Business credit is the lifeblood to any successful business, but how can you build it if your own credit is in the tank?

It’s not as hopeless a situation as it sounds. You don’t have to wait for years to repair your own credit to give your business the boost it deserves, nor do you have to spend a ton of money to make it happen.

I’ve streamlined the process and taken out the guesswork of starting a business with bad credit so you can go out and be the Boss you were born to be!

Why Business Credit is Important

First things first: why do you even need business credit?

Let me tell you, I know from experience that no business can really succeed without it.

Your business credit will help you get financing when you need it—and every business will need it at some point. Whether you need equipment or supplies to grow, add inventory to your shelves, or make unexpected repairs to your office or store, you won’t always be able to pay out of the business bank account (or your own pocket). Your credit might be the only thing that’s keeping your business alive at times.

The good news is that even if your personal credit is less than stellar, you can still build a good business credit profile to get the funding you need.

How to Fast-Track Your Business Credit Building

I cover my streamlined process of building business credit in my full-length guide, but I’ve broken down the steps in this brief summary:

Separate Your Business from Yourself

Your business and personal credit profiles aren’t connected, but they could be related. If you’re a sole proprietor (aka YOU are your business), you can bet that banks and lenders will check your personal credit before handing out any loans.

And if you aren’t a sole proprietor, you want to build as official a business presence as possible so lenders know you mean, well, business. Do the following:

● Choose a real business name and get it registered

● Choose your business legal structure (e.g. LLC, C-Corp, S-Corp, etc.)

● Open a business banking account

Build Your Business Presence

To continue adding to your legitimacy, you’ll need a business phone number and address, even if you don’t want the expense of a physical location. You can get a business phone number without a business phone system and have calls routed to your cell phone. Also, if you don’t need an actual office, consider getting a virtual office that will give you a real address without the overhead.

You should also set up a business website and email address. These tools can be invaluable in setting you apart from fly-by-night businesses and show you’re serious about growing your presence.

Get a Duns & Bradstreet D-U-N-S Number

Dun & Bradstreet is the top credit reporting agency for business. You can call them to apply for a D-U-N-S Number. Credit issuers often check Dun & Bradstreet before extending business credit. However, this is only one credit reporting bureau - there are three others that lenders may check.

Get Business Credit Monitoring

You can’t grow what you can’t see, so paying for business credit monitoring is a must. Consider it a way to check your progress as you grow.

Apply for Vendor Credit

Now that you’re legit, you can start applying for vendor credit, which is like a secured credit card for businesses. Some vendors will allow you to pay on 15, 30, 60, or 90-day terms and will report your activity to credit bureaus. Quill and Uline are excellent beginner accounts to start with, and most likely you’ll need something they sell.

From there, you can start building additional vendor credit lines and monitor your credit as it grows!

Starting a Business with Bad Credit? Get Help!

Getting business credit shouldn’t be complicated! Check out my free full-length guide for a deeper dive on starting a business with bad credit and take control of your venture!