The first steps to building business credit can be taken as soon as your business is ready to begin operations.
Establish a Business and a Credit File Immediately
When deciding whether or not to start a business, some potential entrepreneurs may decide to pursue a business loan as a source of funds for the startup. This can take a great deal of time and effort, and may not be successful.
In general, lenders will only approve applications from borrowers who have the capacity to repay a loan or possess sufficient collateral to mitigate the risk of a loan. Without an operating history, a startup will not be able to demonstrate the capacity to repay the loan. To provide collateral, a new business owner may have to pledge personal assets.
Rather than dedicating time to an action that offers a low probability of success, new business owners could improve their creditworthiness by taking simple steps to build a credit file. With a strong credit file, the chances of loan approval are higher and the business owner might be able to secure funding after operating for only a short time.
Get Help to Create a Credit File
Because a credit file will carry so much importance to potential lenders, new business owners should consider seeking professional advice to open their file. Small Business Starter™ is a service offered by Dun & Bradstreet that could help your business quickly create a business credit file and have an accurate credit history from the time your business pays its first invoice.
With this service, you will enjoy rush service, including your ability to obtain a D&B D-U-N-S® Number. That number can help you begin documenting your business credit in your D&B credit file fast, and start to show off your company’s financial stability to both creditors and suppliers.