The Misnomer of Business Credit Loans and What Business Credit Can Actually Do

You know you need business credit for a number of reasons, including to protect your personal credit.  But, how do you use it? What funding can you get using your business credit?  Do business credit loans actually exist?

Business Credit Can Help You Get All Kinds of Funding

There are some types of funding that you can get on the merits of your business credit alone.  However, even those lenders, like traditional banks, that still want a personal guarantee want to see strong business credit as well.  So, while it may not be necessary to get the loan, building strong business credit can definitely increase your chances. 

Business Credit Loans: What Type of Funding Helps You Build Business Credit? 

You know you need business credit, but how do you get it?  Few realize it doesn’t just build on its own.  You have to have your business properly set up, and then work with creditors that report your payments to the business credit reporting agencies.  

Starter Vendors

The trick is finding the ones that will extend credit when you do not yet have strong business credit, or any business credit at all, to get you started.  This is where starter vendors come in. In short, they are vendors that will offer net terms on invoices without a credit check, and then report your payments on those invoices to the business credit reporting agencies. 

Demolish your funding problems with 27 killer ways to get cash for your business.  

Business Credit Cards

After you work with a few starter vendors to get things going, you can apply for business credit cards based only on your business credit. They will then report your payments to the business credit CRAs, and you’re your business credit will continue to grow. Of course, you will have access to the funding from those cards at the same time. 

Credit Line Hybrid

The credit line hybrid is your miracle worker.  It is your ace in the hole, so to speak.  The thing about this type of funding is, though it does require a personal credit score of at least 680, along with some other risk mitigating factors, you can still get the funds even if you do not meet the requirements.  

That’s because his type of funding allows for a credit partner.  This means if you have friends or family that do meet the requirements, they can sign on for you to get the funds for your business. The payments are then reported on the business’s credit report.  As more positive payment history builds on your report, your business credit continues to grow. 

These are great for startups also.  It is very difficult to get startup business loans no collateral, but this type of funding can be just that! 

It’s a great way to get funding for your business when you do not qualify otherwise, and build business credit at the same time. Then, you can qualify for business credit loans, and other types of funding, that use your business credit as a deciding factor. 

Business Credit Loans: What Type of Funding Can Business Credit Get You On Its Own?

What types of loans and other funding does that entail, exactly?  Well, typically credit cards are the most likely to approve you based on the merits of your business credit alone, without a personal guarantee.  However, there are some private lenders that have options as well. Most often, those lenders have a very low minimum personal credit score, and having strong business credit can only help you. Not only will it help you get approved, but it will help you obtain better rates and terms as well. 

Business Credit Loans: What Other Types of Funding Can Business Credit Help With? 

Now, here is the best part.  Even if you have great personal credit, you need business credit. First, it can help protect your personal credit.  Business credit allows you to get accounts that will report to your business credit only.  

This protects your personal credit in more ways than one.  It will keep large business funding balances from increasing your debt to credit ratio.  If you are using too much of your credit limit, your personal credit score will decrease. 

Also, if your business goes south, your personal credit will not suffer, at least not as badly as if you had a ton of business accounts on it. This means you can still purchase a home or a car. 

Demolish your funding problems with 27 killer ways to get cash for your business. 

Next, your business credit can help sway lenders your way. For example, even if a lender checks personal credit when underwriting a business loan, business credit can still help.  If your personal credit isn’t the best, business credit can make the difference when it comes to approval.  Or, if approval isn’t really a question, good business credit can help you get better rates and terms. 

So essentially all loans for your business can be business credit loans.  

Business Credit Loans: It Helps to Work with and Expert

Now, for the real questions.  It’s probably no surprise you need business credit, and now you know how to start building business credit. You know starter vendors and options like the credit line hybrid can get you started. You know you need to set your business up properly.  But, how do you do all these things?  How do you find starter vendors? They do not typically identify themselves that way. 

How do you know if your business is set up properly, and how do you fix it if not?  How do you get started with the credit line hybrid?  The answer is, you need help. 

While it is technically possible to do this alone, it is much more effective, efficient, and cost friendly in the long-term to work with a qualified business credit expert. An expert can help in a number of ways.  They can help you find the best starter vendors for your business.  They can ensure your business is set up properly and help guide you if not. Furthermore, they can help you get started on the credit line hybrid and help you find additional funding that may work for your business

Business Credit Loans are Kind of a Misnomer

When discussing business credit and business loans, there is something you need to know.  Most traditional business loans will look at your personal credit.  There aren’t really any business credit business loans in the sense of a business loan that you can get solely on the merits of your business credit. 

Demolish your funding problems with 27 killer ways to get cash for your business. 

But, that doesn’t mean your business credit cannot help you get traditional loans.  Strong business credit will strengthen your approval odds substantially. It will also help you get better rates and terms so that you save money in the long run. 

Then, there are the other funding types that will be available for your business. Business credit cards can be a very useful tool for a business.  They offer instant access to funding, can have decent interest rates if you know where to look, and they often offer valuable rewards.  They also typically have higher limits than personal credit cards, and if you have access to both personal and business credit cards, your options double. 

When you are considering raising capital, it can help to have good business credit as well. It will only strengthen your case with investors. 

So, do business credit loans exist? Not in so many words.  However, business credit definitely can help you get more and better funding options of all kinds.  

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