Yes, you certainly can establish business credit with just about any average personal credit rating. But, many lenders demand a certain soft or hard pull on your credit report, some take a hard pull, and even bad personal credit limits your business credit options with your financial institution. But a bad personal rating is not a death sentence for your business. Rather, it is only a hurdle that must be jumped in order for your business to achieve the goals that you have set for it.
Most business credit options today offer a variety of benefits and perks to attract and retain customers. While business credit cards offer the convenience of cashless transactions and added rewards, business credit cards also offer customer satisfaction perks such as airline miles and hotel stays, reduced interest rates, and no annual fee. These types of perks are exactly what most small business owners need to ensure that they continue to grow their business and stay competitive in today's ever-changing economy.
Unfortunately, if you're looking for business credit cards that offer these benefits at no personal guarantee without personal guarantee requirements, then you are out of luck. Lenders who want to give out unsecured business credit cards usually require certain things before they will grant you a card. Let's look at what they want to see in a business card for you.
First off, business credit card issuers want to see that you have good payment habits and a consistently strong financial record. This shows that you will be responsible with your money and won't waste it. This goes a long way towards building business credit fast. So how can you build business credit fast? Get a cosigner for your card, if you don't already have one, and start using it.
Cosigner requirements are actually pretty easy to meet. Most small businesses don't even need a cosigner to get business credit ready – they only need to have a solid business plan. If you do qualify for a cosigner, the lenders might not automatically issue you a card without a deposit. They might ask you to make an investment first, but if you keep depositing money into your business account, they might consider it a good idea to get business credit ready on your own.
Now, if you don't have a cosigner, but you do qualify for a business credit line, then you need to decide which lenders you want to apply to. The best place to start is probably your local bank. Most banks have special programs for small businesses. See if there's a program that you qualify for and apply to that instead. Or go to one of the online credit card companies. They usually have more generous terms with their lending terms.
And then there . . . . . . are the internet lenders. These are the guys that will approve you for a business credit line, but the terms will be pretty hard to live with. Usually, these types of lenders charge very high interest rates for loans. So if you want to build business credit ready, this might not be the best option. Also, the terms aren't flexible at all. You can't adjust them at a later date.
A better choice might be applying for a small business credit card. Credit cards generally have better terms than a personal loan would, since they're backed by credit card companies, not by the government. But not all credit cards are created equal. You need to read the credit card provider terms carefully and make sure you're getting what you need. You can also try an online business credit card service to help you build business credit ready with minimal hassle.