How to Build Business Credit on a Shoestring Budget


By Marco Carbajo,

Many businesses start on a shoestring budget so it can be challenging to build the business credit you need to expand your business. But every business has to start somewhere and building your business credit can be done with the right action plan to guide you.

In this article we’ll cover how to build business credit without cash flow coming into your business.

The first place to start is with your existing operating expenses. Did you know the payments you already make on a monthly basis for expenses such as your business phone line, internet and utility accounts, can be reported to a business credit reporting agency? Unfortunately, many of these service providers do not report your company’s monthly payments to the business credit reporting agencies, so you don’t get the benefit of paying these bills on time. s

The good news is there are data reporting services that allow small business owners to link their eligible accounts and have the payment history automatically report to a business credit reporting agency. This allows you to have this information reported to one or more of the business credit agencies which will build and improve your business credit reports.

As you know an established business credit report and score may lead to better rates and terms for business credit cards, lines of credit or loans from banks, card issuers and lenders.

By starting with your operating expenses, you can start establishing business credit history for payments you’re already making every month but never get credit for.  It’s alarming how many small business owners don’t realize that utility accounts and other operational expenses such as these never get reported.

It’s important to note that this can only be accomplished if the business phone line, internet and utility accounts are set up in the company’s name. This is obviously an essential part of establishing a separation between you and your business.  As you know, keeping all aspects of how you structure and operate your business completely separate also helps you manage your taxes more efficiently.

Failing to separate your personal and business accounts leads to an accounting nightmare during tax time. To protect your personal assets, it’s critical to separate your personal accounts, funds, expenses, and debt from those of your business, or you may surrender the legal protection that an entity structure offers.

Here are several operating expenses that can help build business credit:

Business phone line – There is no one-size-fits-all solution when it comes to setting up an ideal phone system for a business. Whether a mobile phone, VoIP or other type of phone service, be sure to establish the account in your company name.

Printing & Copying – Do you use print & copy services on a regular basis? Did you know you can set up a corporate account with a printing service provider? Many office supply companies offer net 30 accounts which can be a useful trade reference on future business credit applications.

Web hosting – Paying for web design, webhosting, domain names, and other services related to your company’s online presence should be purchased in the company’s name. Web hosting is an ongoing expense that can be used as a valuable trade reference.

Marketing & Advertising – Promoting a company’s products and/or services via advertising is a sizable expense that is incurred by every business. Many advertising companies offer special financing terms for major promotions and monthly billing options.

Building business credit with low cash flow doesn’t have to be a difficult process if you take advantage of your existing expenses and ensure the business gets credit for it. It’s simply a matter of taking action, setting up accounts in the company’s name, and linking those accounts with a data reporting service.


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