All About Business Credit

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In this episode of Wealthy & Wise, NCH’s Founder and CEO, Cort Christie together with NCH’s Business Credit Expert, Danielle Creamer, delved into the significance of initiating your business credit journey on the right path.

May 17, 2024
Author: NCH

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About the Video

The discussion centers on business credit and its advantages for a company. It delves deeply into the benefits of maintaining strong business credit, highlighting how it paves the way for numerous opportunities. Furthermore, it touches upon the expedited process of achieving an A-plus credit rating within as little as 65 days through partnerships with the business bureaus NCH collaborates with.

Prefer to read? A full transcript is provided below.

Cort:  

Hello and welcome to another edition of Wealthy and Wise. I’m your host, Cort Christie, CEO of NCH. Today we’re going to be talking about small business credit and why small business credit is so important. It’s kind of like where you were a teenager. Maybe they wanted to get your first car loan or you were trying to get a mortgage on a house in your twenties and thirties and you really didn’t have enough credit and your FICO score maybe wasn’t really strong. 

Well, for every business, every LLC and corporation that gets established, there are separate credit bureaus, different for businesses, and they are for you and I as individuals. And we’re going to talk about why you need business credit when you should start business credit and what the process looks like and what can happen. What’s the outcome of building what we call A plus business Credit for your business? 

And I have an expert with us today. I have Danielle Creamer, who is one of the leading people in the nation on small business credit. Danielle works with thousands of clients every year and is the head of our team here at NCH supporting the business credit needs of our new entrepreneurs that are just launching their businesses and developing them. 

So thanks for being on the program today, Danielle 

Danielle: 

Of course thank you for having me. I’m excited to be here.  

Cort: 

Thank you. And it’s always fun to have you on the program because you have such a wealth of knowledge to share with everybody that’s watching our program today. And let’s start off with really the basics, which is why does a business owner who is just starting a new business need to be thinking about a business credit score and building business credit. 

Danielle: 

Yeah, it’s it’s tremendously important as a new business owner to start thinking about, okay, the financial foundation of my business, what do I need to do to start separating my personal credit, my personal purchases, and expenses from the business’s expenses. And so it’s really important that once you get an LLC, start working on the foundational pieces of building business credit. 

Cort: 

I love that because, you know, as we said, if you are a young person and you’re trying to get a credit card, a car loan, a mortgage, whatever it is, and you haven’t put some intention behind your credit score and actually how much credit you have, you’re not going to get any of the things that you were hoping to achieve. 

Same with a business owner. And so that business owner has to know that you have to go through this process, you’ve got to build this credit up. And there is a system to it. It’s not like just flipping a switch. And that’s what you are working with so many clients all the time that we have in our system here. 

What is the process like when you bring on a new customer and you start educating and bringing them through, you know, your journey that you take every business credit customer on?  

Danielle: 
Yeah, the first things first, once we establish the LLC, you want to of course apply for that EIN number with the IRS. Without having that, you can’t establish any type of credit profile underneath that business. 

The next thing you’d like to do is of course register for a business credit report through the business credit bureaus. One of the business credit bureaus that we work very closely with is Dun Bradstreet. It’s one of the oldest business credit bureaus that have been around. And then we work with also experienced small business, Equifax Small business in creating that profile. 

And so before we register for that business credit report, though, we do want to make sure that you are meeting all of the basic necessities of the business credit bureaus before we put you in the front of them. We want to make sure that when the business credit bureaus look at your business profile or your request, they see you as a legitimate company. 

It’s very important if you’re not seen as a legitimate business in the eyes of the business credit bureaus, who wants to lend to this company? Right. And so I say let’s work on the prerequisites first. Let’s get your business compliant. Let’s legitimize your business in the eyes of the bureau. Then we’ll register for that business credit report. The business credit report sometimes can take anywhere between two weeks, up to 30 days to create that business credit report. 

Of course, we’re relying on this third party agency to go through those checks and balances to make sure that, hey, you are a real company and we can extend to your company. Once we have that business credit report, now we start building business credit. Let’s look at some of the vendors and creditors that will extend your business a small line of credit just by being one compliant with the business credit bureaus. 

And so there are certain ways that you’ll need to go about the application process with some of these vendors in order for you to get approved. And so once you secure a few accounts, you want, of course, just like any other line of credit, let’s start utilizing it. Let’s start making purchases, utilizing that line of credit. And once you start paying back, the line of credit is when they’ll report that positive payment history over to the business credit bureaus. 

And once you have enough credit history reporting to the bureaus, that’s going to generate that A plus business credit score. And that’s ultimately our goal for each of our clients as they come through the processes to help them, you know, establish that presence within the bureaus, to establish that credibility, to show, hey, I’m worthy as a company. I’m starting to establish credit. 

I know how credit works. And then after that, we want to teach you, well, how do you read your business credit report? There are over 80% of businesses out there that don’t even know how to read a credit report. That’s important. It’s not the same as your personal credit reports. All the detail that you get from the personal credit bureaus is not going to be the same with business credit. 

And so we want to be able to teach you how to read your report. How do I manage my credit report so that I can continue to access the types of lines of credit that I want? 

Cort: 
That sounds very complete, that process. And I know that it doesn’t happen overnight. How long does the normal client of ours that you have in your system take typically if they’re responsive? 

Now, I know there’s some people that are slow and they’re not really, you know, they’re busy doing other things. But if somebody is fairly responsive, how long does it take?  

Danielle: 
It can take as little as 90 days to establish a business credit profile within the bureau. So, again, that’s if you’re responsive, that’s if you are meeting the requirements, you are jumping through those hoops that we put in the front of you. 

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We make it as easy as we possibly can because we do know that a lot of our business owners, you know, have other jobs that they’re trying to maintain while they’re trying to establish this brand new entity and build credit for it and all doing all the different foundational pieces that they need to. But 90 days is pretty much the quickest. 

I’ve seen some clients do it within 65, but it just all depends on your determination. Some clients on average can take up to about six months to establish a credit profile, So it just really depends on your drive and what you’d like to do with your credit profile and how good you are at following instructions.  

Cort: 
And, you know, we know a lot of budding entrepreneurs aren’t necessarily great at always following directions. 

But if you do, I know Danielle and her team can really take a lot of burden off and really speed up that process. I also know that we’ve had clients in the past that have come to us who said, I tried to do this on my own and they make a lot of mistakes. And then you create a problematic business credit score and the information that the bureaus are storing on you is incorrect. 

And then there’s a whole process of trying to play cleanup. It’s way better to deal with it upfront, do it right the first time, as opposed to just going it on your own and just kind of hoping that you can kind of follow this path. I also know that most typically individuals that have not treated it intentionally or really spent a lot of time kind of working on their business credit. 

It can take a couple of years to build your own A-plus business credit score as opposed to following a path and following a system. And I know you and your team make it so easy. So for those people listening, Danielle, you know, they understand maybe a little bit now that, you know, business credit is different than personal credit and that there’s a process that you have to go through to establish it. 

The bureaus need the right information to even set up the profiles in their system so that they even know that you exist and you help through that process. But ultimately, when that A-plus business credit score has been established with the bureaus, the business credit bureaus, what are some of the outcomes that a small business owner can expect from doing this and setting it up right.  

Danielle: 
Yeah. Well, once you establish that credibility with the credit bureaus and you have that score, you’ll be able to unlock more lines of credit, unlock opportunity for you to obtain, you know, whether it be an SBA loan, whether that may be, you know, small business funding, whatever the case may be, that’s what you’ll be able to access once you start to establish credibility. 

Of course, once clients have the A-plus business credit score, we want to strengthen the business credit profile. It you know, it’s a brand new profile. It’s great that you were able to establish a score, but like you’ve mentioned before, as an 18 year old, you’re coming out fresh out of high school. You get your first job and you say, hey, I’ve got a little bit of money in my pocket. 

I got my first credit card, and now I want, you know, to buy a brand new Acura. And you go out there and the dealership just crushes your dreams because they’re like, you don’t have enough credit history. You’ve got a great credit score. And I’m glad that you’re making some money in your pocket, but I need you to make a little bit more. 

I need you to get a little bit more history going on here to show me that you’re going to be able to maintain the longevity of this line of credit. And so that’s what we encourage our clients to do once they’re able to access that A-plus business credit score and then also be able to start applying for some business credit cards, that’s really important as well. 

Start applying, see what you qualify for. We’ve got many different credit cards that we offer our clients in this process. And so we like to gauge and figure out which one is going to be the best one for you. \ 

Cort: That’s good. And that Acura. I mean, you know, even though that 18 yearold really had their heart set on it, then you kind of rerouted over to the used car lot at that point. 

That’s like maybe this $5,000 car might be better for you today. So. Well, I think, you know, it’s to be a bankable business, to be an established business. You know, this is all a part of the process. So I can go into a bank or I can apply for not just a credit card for your business with a couple of thousand dollars line of credit, But we’re talking like 20, 30, 40,000 lines of credit. 

If that credit has been built and developed properly, it swings more doors open. You mentioned the SBA could be, you know, you need supplies from a supplier. Again, they’re going to look at, you know, if you want your shelves stocked and you’ve got a store, a beauty salon or even a landscaping company where you’ve got equipment and fertilizer and lines of credit from, you know, whether it’s Lowe’s or Home Depot or other supply companies, all these things add up to getting all that done because you set up your business credit, you did it properly, and then you actually built it. 

So there’s the foundation and then there’s the building process and the outcome is doors are going to swing open. You’re going to need money to grow any business, any business out there. You know, you can say, Well, I’m going to bring in customers. Well, that’s great if you bring in customers. But marketing is expensive, Supplies are expensive, employees are expensive. 

All these things add up and having access to credit cards, especially, you know, high credit line credit cards really can make or break a business because there’s going to be slow times, There’s going to be times that things are really cooking. But then you can burn up your cash really quickly in any business endeavor. So super important to get this done. 

I think it’s important for people to understand what’s involved in building business credit. And I know one thing for sure. You’ve been doing this for years. Your team’s been doing this for years At our organization. We’ve been helping people establish business credit for over 20 years, and we’ve been in business for about 32 years now. So we are good at it. 

We do it right and we understand from a customer standpoint, we don’t try to put too much on your on your plate. You and your team dish it out in a way that’s systematic, that helps them kind of go through this step by step process. And you’ve really honed it over the years. And and I know that the feedback that we get from our customers is, you know, if they’re following the path and actually being responsive, they love the outcome at the end of the day. 

Danielle: 

Yep, absolutely right.  

Cort: 

Fantastic. Well, thank you for sharing a little bit of our business credit today and what you and your team do. And for those of you that are tuning in today and watching this episode of Wealthy and Wise know that we have a team at NCH here to help you and your small business establish your business credit, score your business credit profile with the three different bureaus that we work with. 

And it’s so important that you do it right the first time and work with a professional organization because it could be the difference of getting a $2,000 credit line and getting a $30,000 business credit line or credit cards or, you know, whatever the supplier you need in your business, where they’re going to give you are shelves full of inventory that maybe don’t have to pay for 90 days or even longer. 

Again, this is all about getting your business credit score set up properly and doing it right the first time. So know that you can call us at NCH, there’s links below that you can actually schedule and get to our website and schedule a meeting with experts like Danielle that work in conjunction with any of our clients and customers and we’d be happy to teach you about the process, educate you. 

It’s free to learn more. We will lay it all out and also lay out the cost of that service. But I always look at it like an investment. This is really not a cost to you. It’s an investment into the future of your business because you’re going to need access to capital to grow any business properly. And additionally, please like and subscribe so we can continue to spread the message that we have about business credit and about the services offered at NCH and helping small businesses succeed. 

Thanks again for tuning in to another edition of the Wealthy and Wise. I’m your host Cort Christie. Have a great day.

With NCH, the state’s top business formation service, you can register your LLC in Nevada quickly and easily. Our specialists will help you choose the right entity for your company and understand why an LLC in Nevada is your best option. We’ll assist you with all necessary Nevada LLC forms, including the vital Articles of Organization, and help you comply with state regulations. In addition, we offer expert assistance with tax compliance, credit building, and payroll management. Schedule a private consultation to explore effective solutions to minimize tax liabilities and protect your wealth. Start unleashing your LLC’s full potential today with NCH.

DISCLAIMER: The above material has been prepared for informational purposes only, containing opinions of the provider, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Please consider consulting tax, legal, and accounting advisors before engaging in any transaction.

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