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1. Set up your business structure
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Starting a business involves planning and part of that planning
should concentrate on business structure. Some of you may
already be in business but have not formally structured your
business.
In order to build business credit separate from your personal
credit you must decide how you want to structure your business.
This means researching the differences between the most
common ways to structure a business.
The C-Corporation; the S-Corporation; Sole-Proprietorship;
Limited Liability Company and Partnerships are the most common.
Each of the business structures have separate benefits as well
as drawbacks, especially when it comes to taxes. Remember, for
business credit separate from your personal credit you will need
to structure your business as a Corporation or Limited Liability
Company.
Keep in mind that many lenders may require a business owner to
personally guarantee a loan if your business is structured as a
limited liability company. In every case when applying for
business credit it is imperative that you read the contract before
signing.
You can also purchase a “shelf” or “aged” corporation in the
State where you want to do business. See Structure Your
Business for more information on the various ways to structure
your business.
Operating your business as a sole proprietorship or general
partnership will pretty much insure you will have to personally
guarantee any loan, line of credit or credit card your business
seeks.
A creditor may even have the right to personally sue you. This
can be devastating, especially if you are married and your
spouse jointly signed for the credit. If this is the case, all of your
joint assets and joint income can be seized to satisfy a debt.
should concentrate on business structure. Some of you may
already be in business but have not formally structured your
business.
In order to build business credit separate from your personal
credit you must decide how you want to structure your business.
This means researching the differences between the most
common ways to structure a business.
The C-Corporation; the S-Corporation; Sole-Proprietorship;
Limited Liability Company and Partnerships are the most common.
Each of the business structures have separate benefits as well
as drawbacks, especially when it comes to taxes. Remember, for
business credit separate from your personal credit you will need
to structure your business as a Corporation or Limited Liability
Company.
Keep in mind that many lenders may require a business owner to
personally guarantee a loan if your business is structured as a
limited liability company. In every case when applying for
business credit it is imperative that you read the contract before
signing.
You can also purchase a “shelf” or “aged” corporation in the
State where you want to do business. See Structure Your
Business for more information on the various ways to structure
your business.
Operating your business as a sole proprietorship or general
partnership will pretty much insure you will have to personally
guarantee any loan, line of credit or credit card your business
seeks.
A creditor may even have the right to personally sue you. This
can be devastating, especially if you are married and your
spouse jointly signed for the credit. If this is the case, all of your
joint assets and joint income can be seized to satisfy a debt.
More Resources
Business Opportunities
Home-based business
opportunities. Earn extra income
from your computer.
Bad Credit Business Loans
Find alternative funding sources if
you have bad credit.
Micro Business Loans
Do you need just a little cash to
grow your business try a microloan
from the SBA.
Business Loan Sources
A little creativity and al lot of
determination can get you the
money you need.
Home-based business
opportunities. Earn extra income
from your computer.
Bad Credit Business Loans
Find alternative funding sources if
you have bad credit.
Micro Business Loans
Do you need just a little cash to
grow your business try a microloan
from the SBA.
Business Loan Sources
A little creativity and al lot of
determination can get you the
money you need.
How to Build and Establish Business Credit in 10 Steps
by Lisa Phillips
by Lisa Phillips
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