Business Financing: Establish Business Credit

This is a five part blog series on establishing and growing business financing.

Make sure you have set up a business (as an LLC or Corporation) and have an EIN and have registered with the state you are doing business in. My recommendation is to file in the state you’re doing business in rather than in Delaware or Wyoming like some folks tend to recommend. Consult with a legal representative for further questions/insight there.

• Establish a business banking account, with both checking and savings accounts

  • I’ve used a number of local smaller banks, credit unions, and big banks. After trying them all, I’ve found that Bank of America is the easiest to use and seems to be the best of the bunch. Chase is my runner up option because of all of the business credit cards they have, although it is not necessary to have an account with them in order to apply for their cards.

  • If you have a business partner, you’ll need to do this with them. They will require all of your entity documents (EIN, Operating Agreement, Articles, and state registration) as well as personal information.

• Create a D-U-N-S number from Duns & Bradstreet for each LLC/entity

  • https://www.dnb.com/duns-number/get-a-duns.html

  • This number establishes your business a legitimate and with D&B, you’re business credit can be better monitored and improved over time

• Look for business credit cards

  • Start with some local banks as well as bigger national chains

    • Start off with the bank that your business banking account is established with

  • Prefer cards with promotionals. My preference is for cards with:

    • no annual fee

    • 0% intro APR for 6+ months

    • some sort of initial cash back bonus

    • cash back over points

    • look for good balance transfer programs (0% interest and low transfer fee)

  • I typically look at the above items over the actual interest rate (they’re all gonna be high and you should not be holding principle on your account for very long)

  • If you are limited on your options, 0% APR and no annual fee is the most important

  • Nav (see Monitor Your Business Credit) will help present credit cards to you that you’ll likely be approved for

  Card Options

  • I have the following business credit cards:

    • A few from smaller banks:

      • Bank of Sierra Visa

      • Fremont Bank Mastercard

    • A few from larger banks

      • Chase Ink

      • Capital One Spark (great one to use for your first card)

      • Bank of America Platinum Business Mastercard (2x)

      • US Bank Business

      • American Express Amazon Prime

      • Blue Business Plus American Express

  • Check out these great balance transfer cards

    • Best cards for balance transfers

      1. Citi® Diamond Preferred® Card

      2. Alliant Visa® Platinum Credit Card

      3. Citi® Double Cash Card

      4. U.S. Bank Visa® Platinum Card

• Chase tends to offer the best credit cards. Chase Ink is the best.

• Here is a list from a blogger I follow for credit card ratings:

• If you have poor personal credit, here is a list of cards that are easier to get

  • https://www.nerdwallet.com/best/small-business/business-credit-cards-bad-credit

  1. MAKE SURE YOU APPLY FOR ALL CARDS AT THE SAME TIME!

     • Can increase your odds of getting approved for more than you normally would be

• Keep cards open as long as possible!

  • Ideally never close

  • Keep some small repeatable expenses on each one so they don’t get shut down for lack of use