The Importance of Independent Business Credit
If you’re like nearly 1/3 of new small-business owners, then you’re planning to use some combination of personal credit and savings to finance your business startup. Should your business fail for any reason, you will be personally liable for your company’s debts.
By signing on the dotted line, you’re putting your property — including your mortgage, your car, and your retirement savings — in peril. Can you really afford to lose your home? If your business goes belly-up, will you be able to survive professional ruin and personal bankruptcy?
Your business is a venture, an endeavor, and every endeavor involves some degree of risk. However, there’s a big difference between strategic, reasoned risks that benefit your bottom line, and unnecessary risks that jeopardize your future. By eschewing personal guarantees and focusing instead on establishing independent business credit, you can establish a strong financial foundation for your company without exposing your most important personal assets. Here’s how.
Building Business Credit With Dun & Bradstreet
To begin building business credit, you will need a D&B D-U-N-S® Number, a unique, 9-digit identification sequence that is required by financial institutions, governments, and trade associations worldwide. If you’re willing to wait a month, you can apply for a free D-U-N-S™ Number online. However, with D&B’s Small Business StarterTM kit, you can receive an expedited D-U-N-S® Number in 5 business days or less.
In addition to supplying your start-up with a D-U-N-S® Number, Small Business StarterTM helps you get started building a D&B business credit file, and enhances your visibility and ranking on search engines.
As your business continues to grow, you will need to monitor your credit score and payment history on a regular basis to ensure that the information contained in your file is accurate and up-to-date. CreditBuilder™ helps you take control of your score and ratings with continuous monitoring, real-time alerts, and comparative metrics. Benchmark your business against a key competitor, or see how you stack up against your industry as a whole.
Knowing your score is only half the battle—you need to pay your bills on time as well!—but credit monitoring is an essential piece of the risk management puzzle. A strong and robust credit file not only helps your business find new sources of financing, but it allows you to negotiate better payment terms that provide your company with a competitive edge.