I’ve been teaching business credit tactics to my friends and students that need start up supplies and money for a few years, and it can really help to grow your business if used wisely.
Some of you may have seen the scam courses on TV at 3am on business credit, offering to teach you how to get a million dollars in unsecured non personal guarantor credit, well let me save you $100 and give you the crash course (and no you aren’t going to get a million dollars). Now be careful here, the credit is not in your name, it is in the name of your business, but that doesn’t mean that you can just decide not to pay it back, retail giants may make hundreds of millions, but they deserve what they are owed as much as you do, so pay your debts!.
The reason I show people this is that start ups need supplies and cash, two things they often don’t have. Add to that a great credit score, which most new entrepreneurs do not have either. I started my first business with a 450 credit score, I couldn’t get a bank loan to save my life 🙂 Hey I was 18, and I had fallen into the trap of activating all those high interest credit cards that started rolling into the mailbox on my 18th birthday. I did it the hard way, I never knew about business credit until I had an 800 credit score with a 6 figure business a few years later, and they were throwing credit cards at me, of course when I didn’t need them anymore.
These days, forming a company has never been easier, it can be done online for a couple hundred dollars in a week or two, or you can pick up the paperwork from your local state office and submit it yourself with about $100 which varies by state by a few dollars.
Business credit, for those of you that don’t know, is credit given in the name of your business (makes sense right), and it often times can be non-personal guarantor, meaning that you do not give your social security number for approval, you give your employer identification number also known as the tax id which is your businesses social security number.
Now, I strongly suggest that every one of you is a registered company regardless if you are full or part time. You are missing out on piles of money and paying super high taxes if you are not treating your business as a business. Even if this is a hobby for you, you can be taking advantage of huge tax breaks and write offs.
I’ve read hundreds of business and marketing books over the last 14 years, before I was even in business, just dreaming about it as a teenager. Out of hundreds of authors that preach the gospel of business Robert Kiyosaki is hands down the best read about why you should be a business regardless if you feel you are a business or not.