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Table of Contents
Table of Contents
How to Get the Most out of This Book ...................................................... 4 Why Business Credit ................................................................................. 6
Personal Credit vs Business Credit ...........................................................................8
Table of Contents
Step 7. .................................................................................................................. 28 Tier 3 creditors .......................................................................................................... 28 Step 8. .................................................................................................................. 28 Step 9 ................................................................................................................... 29 Tier 4 creditors .......................................................................................................... 29 Step 10.................................................................................................................. 29 Step 11.................................................................................................................. 30 Tier 5 creditors: ......................................................................................................... 30
Resources ............................................................................................... 45
Seasoned Business Tradelines ............................................................................... 46
Table of Contents
Account List by Tier ............................................................................................... 47 Tier 1 accounts .......................................................................................................... 47 Tier 2 accounts .......................................................................................................... 50 Tier 3 accounts .......................................................................................................... 53 Tier 4 accounts .......................................................................................................... 55 Tier 5 accounts .......................................................................................................... 58 Business Credit with a PG ...................................................................................... 61 Secretary of State Websites ................................................................................... 62 What to do if deny me or ask for a PG? .................................................................. 63 Frequently Asked Questions .................................................................................. 65 Bonus.................................................................................................................... 68
I would recommend reading the book in its entirety first. This way you get a better feel for the credit building process and can start to see the end from the beginning. After you have read it once I would recommend following the step-by-step process that we put together to help you build business credit on your own. We have outlined all the necessary steps that need to be completed in order to successfully build your business credit. Due to the fact that building business credit is not an exact science, I tried my best to cover varying situations that you may face in building business credit.
If you are like most small business owners, growing your business is both hurting your personal credit and draining your resources that can be used for your personal expenses. According to a study done by the SBA, 92% of all business loan applications are done based solely on the merit of the applicants fico and personal assets. We all know that Capital is the life source of any business and the lack of capital is one of the major reasons for the failure of businesses in America. Business Credit is an alternative source of capital and is an area of financing that every entrepreneur should be well versed in. Without spending time and resources on establishing business credit, entrepreneurs are missing out on the single largest source of lending in the world. Business Credit is simply the best kept secret by winning companies.
Interesting Fact
More money is leant to companies than real estate investors, home owners, car owners and all other borrowers combined.
There are many advantages to establishing and maintaining solid business credit but going through all of them will involve me writing another book. A few of these benefits are: Solid business credit allows you to obtain more working capital for your business at lower rates. Even if the credit is in the form of store credit, this can be used for some to purchase goods that the business needs and increase your businesss cash on hand.
Having separate lines of credit in your businesss name makes it easy to keep your business expenses separate from your personal expenses. This means when it comes time to file your taxes, you'll already have separate financial records for business expenses and personal expenses, making both your life and your tax attorney's life simpler.
With most business credit line, you have the luxury of requesting additional cards for authorized employees to use. You can even control the spending power of each individual card.
Perhaps the most important benefit of separating your business credit from your personal credit is that in the event that your business is in trouble, your personal credit and assets are protected once your company is structured correctly.
By establishing strong business credit your also build credibility for your business. This is especially important for startups that do not have a track record of success.
LOC - Line of credit EIN This starts for Employee Identification Number. This number is also called a Tax ID number. This number is issued by the IRS and each business can only have one Tax ID number. Vendor LOC - A line of credit with a vendor such as Dell, Home Depot and Lowes. We know them as store cards or store credit in the personal credit realm Net 30 Accounts - a line of credit, usually extended by a vendor that has to be paid in full in 30 day. The only way this is seen as a positive payment is if the balance in paid off in or before the 30 days. There are Net 10 and Net 15 accounts that follow the same pattern. Revolving Line of credit - This is a line of credit like your typical credit cards where you have an interest rate and you are given a minimum payment to pay every month. Vendor lines come in net 30 or revolving terms. PG - In the business credit world this stands for personal guarantee. This is a key element to business credit. You do not want to PG any accounts if you do not have to. This is where the separation of the credit liability between your business and personal credit comes in. Shelf Corporation According to Wikipedia, A shelf corporation, also called an aged corporation, is a corporation that has had no activity. It was created and put on the "shelf" to age. Some lenders do not lend to brand new corporations so one method of getting around such a restriction is by purchasing a shelf corporation. Tradeline Also known as trade reference is any credit account listed on your credit report. Examples: Vendor lines, Credit Cards, Mortgages etc. DNB or Dun and Bradstreet or D&B- This is one of the two major business credit agencies. They currently hold 75% of the business credit reporting market share. DUNS Number DUNS is an acronym for Data Universal Numbering System (I know, I thought it was just the first name of D&B) which is a system developed and regulated by Dun and Bradstreet which assigns a unique number to a single business. Eupdate This is the system that DnB offer their clients to track their business credit profiles.
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Experian Business - This is the other business credit agency. There are a few lenders who use Experian Business. Intelliscore This is the business credit score developed by Experian Business. You need 2 trade references in order to get an intelliscore. This score also ranges from 0-100 and a good score is considered 75. This score is derived from the timely many in which you pay your creditors as well as the dollar amount. D&B Rating this is a score that is based on employee size and financial statements. This score is used by the bigger lenders. You can view the complete explanation and chart at http://www.dnb.com/us/customer_service/paydex_tables.html
Paydex Score - This is the goose you need to get that will lay the golden eggs of business credit. Ok Seriously. Your paydex is the credit that you get from DnB. This score is out of 100 and a 75+ is considered a good paydex score. You get a paydex score when 5 companies report to DnB that you did business with them. The PAYDEX Score is D&Bs unique numerical indicator of how a firm paid its bills over the past year, based on trade experiences reported to D&B by various vendors. The D&B PAYDEX Score ranges from 1 to 100, with the higher scores indicating better payment performance.
NOTE: When making payments on revolving accounts it really doesnt matter if you pay the minimum payment or the full balance, they simply give a score based on the timing for the payment. The amount does not affect your score as it does in personal credit.
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This may disappoint some of you but establishing business credit IS NOT ROCKET SCIENCE, IT IS NOT COMPLICATED and IT SHOULD NOT BE CONSIDERED A SECRET. Building business credit is a process that takes time. There are ways to shorten the time and simplify the process but it is just that, A PROCESS. The sad thing is, due to how it has been marketed up to this point, when I break it down for most people they think that there is more to it. I have been doing this for a long time and it I know that some of you will think that this is a waste of time is really this simple. So before but you will be surprised at some of the complaints I get that we get into the details on what go something like this; to do when and so on, let us just run through what to expect with I woke up this morning and just received my DUNS number and I the process. applied to Dell and the rejected me. What the hell is going on?
Similar to establishing personal credit, establishing business credit is about showing good credit history. The good thing is that each business starts with a clean slate and it does not take long to establish favorable credit history. The process is broken down into the following steps:
Step 1 - Establish a business entity in your respective state.(A Corporation, LLC, LLP etc) We will go into the structure of choice later in the book.
Step 2 - Structure your company correctly with the state, IRS and Credit Bureaus.
Step 3 -Establish Credit accounts with Tier 1 creditors and use the accounts and pay them on time.
Step 4 - Wait until these Tier 1 creditors report to the credit bureaus of youre their positive experience with doing business with you.
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Step 5 - Establish Credit accounts with Tier 2 creditors and use the accounts and pay them on time.
Step 6 - Wait until these Tier 2 creditors report to the credit bureaus of youre their positive experience with doing business with you.
Step 7 - Establish Credit accounts with Tier 3 creditors and use the accounts and pay them on time.
Step 8 - Wait until these Tier 3 creditors report to the credit bureaus of youre their positive experience with doing business with you.
Step 9 - Establish Credit accounts with Tier 4 creditors and use the accounts and pay them on time.
And the later steps are the same with bigger lenders. There will be a detailed description in the step by step section.
Its pretty much that simple. The information needed now is; How do I structure my company right? and When do I apply to Tier 1-6 lenders and who are these mysterious lenders? I am sorry to disappoint you but that basic information is what all these big companies are charging thousands of dollars for.
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The first thing you will want to look at is your overall D&B company rating. This is found at the top right hand side of the business credit report. If you have provided D&B with financials of your business, you will have a rating from 5A to HH. This score reflects your companys size based on your Net Worth or equity of the company. If you have released financials that show a negative net worth, your business will not be rated. It will show a -where the rating belongs.
The other half the report is your composite credit appraisal. This is a number from 1 to 4 that is listed next to your overall rating. The 1 through 4 rating reflects D&Bs overall assessment of your companys creditworthiness. This number is based on your financials and payment history. One is the highest credit assessment that you can receive, while 4 is the lowest.
We suggest that you do not provide D&B with your financials. If you do not provide your financials then your rating will be a 1R or a 2R. The number represents the size of your business with 10 or more employees. The 2 represents a business with less than 10 employees. The R represents that they have not been provided with financials. After the R rating, your company will be assigned a composite credit appraisal between 2 and 4. Since no financials have been reported, they base the ranking on payment history, public filings and time in business. A 2 is the highest composite credit rating that you will receive without providing financial statements. A 1R2 and a 1R3 will be fine if you are looking for financing.
There are also other alternative ratings that D&B uses. These are used in special cases and for special industries such as a bank or insurance company.
An alternative rating that may be of interest is the DS rating. The DS stands for D-U-N-S Support. This rating is applied to those companies who have provided information to D&B, but this information has not yet been verified. The DS rating is neither good nor bad; however, there are many lenders that will not lend money if you have this type of rating. This simply means that D&B does not have sufficient information to provide the business with a regular rating. The DS rating is more or less a marketing record that shows that the company is on their marketing list but a full investigation has not yet been performed.
The next score you will want to look at is your PAYDEX score. The PAYDEX score is a unique, dollar-weighted indicator. This provides an instant overview of how a firm has
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paid its bills in the past, and how the firm is likely to pay its bills in the future. This is a very important score when it comes to being approved for corporate credit financing.
The PAYDEX is a 1 to 100 weighted numerical score of payment performance. The score is calculated by using up to 875 payment experiences from the trade references reported to D&B. As you can see in the PAYDEX Score Key below, an 80 is considered a perfect PAYDEX score. If your payment terms to a vendor are 30 days net, then on the 30th day after billing your vendor has received your check, your payment is on time. Anything above 80 means that you actually paid before the due date and anything below means you paid some amount late. Most PAYDEX scores do not include anywhere near the 875 maximum payment experiences. You will need 5 trade accounts that report on your business to generate a PAYDEX score. Remember, anything above 75 is good.
There is another important aspect of the PAYDEX system that you need to know. This weighted average score gives more weight to the trade accounts that report higher amounts of credit extended and less weight to trade accounts that are reporting lower dollar amounts of credit.
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DS
- (Blank)
ER
NQ
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PAYDEX
100 99 98 97 96 95 94 93 91 90 89 88 87 86 85 84 83 82 81 80 79 78 77
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Step-By-Step
STEP-BY-STEP
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Step-By-Step
STEP 1
ESTABLISH A BUSINESS ENTITY.
CHOOSE A NAME
I know many of you guys reading this book plan to get into real estate investing and that is a commendable goal. But stay away from real estate names like Mike Properties LLC or Franks Realty. A better alternative may be Mike Enterprises or Franks Professional Services. In the current financial climate, lenders are staying clear of the real estate market. Although you may have success establishing credit with your basic Net 30 accounts and Vendor Lines of Credit, when we get to the Banks and the Cash Lines of Credit you may run into some issues. That will just result in lost time and resources. Lets simply be cautious and do thing right from the beginning without taking short cuts.
Your business address should be one of two places; your home address or office space. I say this because I have seen many guides that suggest that you use virtual offices (which many times is suggested to be in another state), a PO Box or a UPS Box. All of these options have a high probability of causing red flags in your credit applications. Although the UPS Box address is not structured like a P.O. Box, lenders tend to keep a database of these addresses so your application will be instantly when flagged. This is also true for many virtual offices.
STEP 2
INCORPORATE/BUY A SHELF CORPORATION AND STRUCTURE YOUR COMPANY CORRECTLY WITH THE STATE, IRS AND CREDIT BUREAUS.
Incorporating your business can be done through your respective secretary of state and in many states; the option of incorporating online is available and simple to do on your own. You can get your respective secretary of state website in the resources sections. In the event that you do not want to incorporate on your own (which we recommend) we recommend http://www.incfile.com/. When incorporating, we suggest that you choose a Corporation instead of an LLC. We have noticed that lenders tend to grant more credit to Corps compared to LLCs. We will get into the shelf corporation option in the section dedicated to shelf corporations.
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Step-By-Step
This does not have to be done at this stage but it is part of setting up your business right. This will
Acquiring your Tax Id is a simple process and I do not think companies should charge for this service. If you plan to use a company for incorporation purposes, most of them charge an extra $50 or so for your Tax Id number. Save the money. Go to https://sa1.www4.irs.gov/modiein/individual/index.jsp and fill out the application. You will have your Tax ID in 48 hours.
Now that you have your Tax Id number, you need to establish a business phone line with that tax id number. Other than a dedicated business number you will have to be listed in 411. There are a couple of ways to get this done and they all have pros and cons.
PHONE SOLUTIONS:
a. Get a business phone line with one of the major carriers like ATT, Verizon and so on. This is my recommended option. Although this is the most expensive option, with the major carriers, your business will be automatically listed with 411. These carriers also usually report to D&B which will act as one of your trade lines. I know that ATT reports for sure. Another issue that this takes care of is being able to call your lender back from the listed number. Some lenders verify that the number exists by calling you in the number as well as having you call them back. b. Get a business line with a VOIP or cheaper provider. This is another option but the listing in 411 comes in here. None of the VOIP providers currently list in 411. One way to get around that is by using listyourself.net but this has not been very reliable in my experience. In many occasions I had to list my company more than once to have it listed in the 411 directory. c. Establishing an RCF or Remote Call Forward number with a major phone provider. This option does take care of the 411 issue but you will not be able to call the lenders back from this number. An RCF is simply a number that forwards calls to another number. It usually cost less than $20 a month but the per minute rate for calls may vary.
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Step-By-Step
You first need to get your DUNS number. When applying for your DUNS number you will be required to provide your income and the number of employees. For startups, this is projected income. Ideally speaking, your company should do more than $500K in revenue and have more than 10 employees but this is an ideal situation. Will the lenders ask for tax returns? No. Does your income on the application have to match what is in DnB? Yes. Reps at D&B usually try to make you pay for a service or wait 30 days before giving you your number. The typical way to get your DUNS number is to go to www.dnb.com. Under the Customer Resources heading, click on Get a D&B DUNS Number. You will then be directed to begin the process by checking if your company is listed in the D&B database. You will also be asked to choose Establish a credit file with ScoreBuilder and get a DUNS number or Get a DUNS number only". You will choose get a DUNS number only. After you have set-up your DUNS number for your business, it will be emailed to you in 30 45 days. You will also receive many phone calls from Dunn & Bradstreet to verify your information and then they will try to solicit additional products for you to purchase. Some clients have even reported receiving calls on a daily basis. Now here is a method where you can get it within 24 hours:
Go to www.ccr.gov Then click Start New Registration on your left Now choose I am not a Government Entity out of the 3 options given and click continue Next, click the linked Data Universal Number System ****** You will be then sent to DnBs website. Follow the instructions and you will have your DUNS number in 24 hours.
If you can afford the DnB credit builder program I do suggest that you get it. This is not necessary but it will speed up the business credit building process. Please see details in the Chapter dedicated to their program. Now that you have your duns number you will need to get your eupdate password. Simply go to https://eupdate.dnb.com/ and click Not Registered and your eupdate password will be sent out to you. If you paid for any of the credit builders, the faster way will be to call your rep and ask for it over the phone.
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Step-By-Step
There are two options for Eupdate - View your information and Edit your information. After you have your password, when you log in, you should only use the "View Information" option UNTIL you are completely ready to make changes.
There is nothing to really set up with Experian. Some companies report to Experian and some dont and a few companies pull your file. What you do need to know is how to check your Experian Business credit file. You can start by going to http://www.smartbusinessreports.com/ and searching for your business. You will simply see if it is in the database or not and how many trades are on your file. You company is automatically put into the database when one of your lenders report to them about their business experience with your company. Other than searching for free you can also purchase a full business credit file from http://www.smartbusinessreports.com/.
IN THE NEXT FEW STEPS WE WILL SIMPLY 1-10 ACCOUNTS FOR EACH TIER BUT WE WILL LIST MORE LENDERS AND MORE DETAILS IN THE CHAPTER DEDICATED TO ACCOUNTS.
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Step-By-Step
STEP 3
Establish Credit accounts with Tier 1 creditors and use the accounts and pay them on time. In the rare situation that DnB sends your DUNS number in 30 days, you do not have to wait in order to start this step. 90% of these vendors no not require you to have your DUNS number; they will go by your Tax ID/EIN number.
TIER 1 CREDITORS These creditors are usually your basic net 30 accounts. These are the starter accounts that will help you build your business credit history. In come cases you may not need anything from these accounts but this is the basic stepping stone to getting to where we need to be. Some of these vendors have tightened recently so they may ask for a pre-pay and then they will establish as account for you. You can either opt for the pre-pay or simply go on to the other tier one accounts. Remember, you can apply to as many accounts as you want in one day.
Examples
QUILL.COM ULINE.COM PENS.COM RAPIFORMS.COM GRAINGER.COM USPLASTICS.COM
Before going onto the next step you need to confirm that your business is in the 411 directory. Underwriters use this as a means of confirming that your business is real. When calling 411 you will have to give them the City, State of where your business is located and the name of your business. If for some reason you do not appear in the 411 listing, this means that listyourself.net did not work yet or your phone provider did not list you yet. Please ensure that you are listed before you move forward.
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Step-By-Step
STEP 4
Wait until these Tier 1 creditors report to the credit bureaus of youre their positive experience with doing business with you. You need a minimum of 5 vendors reporting to go on to the next step. Some companies suggest 4 but we suggest 5. As mentioned before, all vendors from this point will need your DUNS number and will also verify with 411 that your business is listed. When you see that your Tier 1 creditors report to Dun and Bradstreet(you check this through eupdate) and you now have your 80 Paydex, Then you will move on to applying to the next Tier of
WOOHOOO..
This is where you should have your 80 paydex score. It usually takes 3-5 weeks using this ebook as a guide but it all depends on DnB. Sometimes they will take forever to post your trades. If you purchase the credit builder program you will not have this problem.
creditors.
STEP 5
Establish Credit accounts with Tier 2 creditors and use the accounts and pay them on time. TIER 2 CREDITORS These are some basic vendors. These accounts are both revolving and net 30 accounts. Staples and Office Depot were in this tier and you can take the chance and apply to them at this stage but we moved them to tier 3. Applying to them with the other tier 3 accounts will guarantee approval but we have had success getting approved at this stage. Approvals are getting tougher and tougher to get so the stronger your business credit file, the better you are.
Examples
RELIABLE.COM WEARGUARD.COM TECHDEPOT.COM AJESTICADVERTISING.COM THESUPPLYROOM.COM BITWAVEDESIGN.COM
(This is a special one that you will not see in other programs)
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Step-By-Step
STEP 6.
Wait until these Tier 2 creditors report to the credit bureaus of their positive experience with doing business with you. At this point you should have 7-12 tradelines/vendors reporting to your business credit file on DnB and 3-5 minimum reporting to Experian Business.
STEP 7.
Establish Credit accounts with Tier 3 creditors and use the accounts and pay them on time. TIER 3 CREDITORS These accounts are generally revolving accounts and are a little more desirable for this simple fact. These are your more common retail credit accounts.
Examples
OFFICEDEPOT.COM STAPLES.COM CONOCO INC (PROCLEANCARD.COM) BP.COM SHELL.COM
STEP 8.
Wait until these Tier 3 creditors report to the credit bureaus of youre their positive experience with doing business with you. At this point you should have a very minimum of 12 trades on DnB and 7 on Experian Business.
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Step-By-Step
STEP 9
Establish Credit accounts with Tier 4 creditors and use the accounts and pay them on time. TIER 4 CREDITORS These are some bigger retailers. These accounts generally have higher limits than your tier 4 creditors. This is also one step before you get to the cash credit.
Examples
DELL.COM SEARS.COM WRIGHTEXPRESS.COM AMAXON.COM
Trade Secret
In order to apply for billmelater, you must go to Apple.com and put items into your shopping cart. When checking out, for payment options choose bill me later and simply apply for the account. This is not a revolving account but it is a nice account to have. The terms are like net 120 but it varies.
BILLMELATER
STEP 10
Wait until these Tier 4 creditors report to the credit bureaus of youre their positive experience with doing business with you. At this point your credit files should be pretty thick. You do not necessarily have to wait until all of your new accounts report to the necessary credit bureaus but it is advised. By this point you should have a feel for the process and how all of this works.
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Step-By-Step
STEP 11
Establish Credit accounts with Tier 4 creditors and use the accounts and pay them on time. This is an exciting step because you finally get to cash accounts and financing cars under your company name with No PG.
TIER 5 CREDITORS: These are some even bigger retailers, some cash credit and Auto financing.
Examples
HOMEDEPOT.COM WALMART.COM
(Not MasterCard)
(This is a MasterCard but the payment terms are flexible but not revolving)
GLOBALFLEET.COM
Trade Secret 1
On the Key Bank application there is a space for your SSN. Simply cross it out and right DUNS number and put your Duns number there. I know it seems crazy but it works. This is to avoid a PG.
TCHEK.COM
(A MasterCard) (MasterCards
FLEETCARDSUSA.COM
available) (usually need 2 years but with a thick file you can get approved)
OFFICEMAX.COM KEYBANK.COM
(This is a MasterCard)
PLEASE SEE THE CHAPTER THAT COVERS THE ACCOUNT LIST FOR MORE ACCOUNTS IN THE VARIOUS TIERS.
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Shelf Corporations
SHELF CORPORATIONS
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Shelf Corporations
As stated before;A shelf corporation, also called an aged corporation, is a corporation that has had no activity. It was created and put on the "shelf" to age. The major reason for acquiring a shelf corporation for building business credit is, some lenders only lend to corporations that are two years old. So in looking for shelf corporations we have a number of questions.
What should I look for in a Shelf Corporation? Where can I get a Shelf Corporation? What should I pay for a Shelf Corporation?
Trade Secret
Shelf corporations are simply aged corporations and every day, in every state, there are corporations that are being closed. In some situations an entrepreneur may have started a business and it failed and he simply stopped paying his state fees to keep the corporation active and there are other times when the business did not even get off the ground. This is where you can capitalize. You can go to your state Secretary of State website and reinstate these corporations. Much of the companys information and owners information is available. In most state you simply have to send in some paperwork and pay for all the yearly fees that the company was inactive. Please see your respective SOS website for more information.
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All businesses should have a business license. You should also check with your state, city or county to verify what type of license and permit you require. The business credit bureaus sometimes verify whether you are operating with a license and then post those findings on your business credit report. If you do not have a license, you risk not being able to borrow money from a lender, as many lenders will pull the report and look for whether or not you are operating with a license. Many of the accounts mentioned in this book do not require you to have a business license but we suggest that you take all precautions to avoid wasting time. You do not want to build up a lot of vendor credit and when it is time to get cash credit, something as simple as a business license is stopping you. There are times when your local or state authorities might not require you to obtain a business license. Even though you are not required, we still recommend that you apply for one. Having a business license will make it easier if Dunn and Bradstreet do their investigation and when you apply for lines of credit at a bank.
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1. For some mysterious reason, when you purchase from a vendor that reports, it takes forever (up to 3 months) to show up on your credit file. When you pay for DnBs credit builder (package 2 or 3), these reports amazingly show up in 2-3 weeks and this is why many people seem not to like DnB.
2. If you are doing business with a company (maybe your accountant) that does not report to DnB, you can have DnB call that company and report a tradeline on their behalf. But there is a catch. The company must fit DnB criteria. Most companies that are in business for two years or more fit the criteria of DnB so you will not have many issues with that.
3. If you do not purchase D&B Credit Builder, you will have a rating of DS. If you pay for any of the credit builders, you will get a rating according to your Revenue and Number of employees (see the section on understanding your credit file for more details). I have noticed that companies that have a rating get approved slightly easier than companies with a DS rating.
So how does this credit builder work? Its simple. When you purchase your credit builder through your personal rep, he/she will send you a link. When you open an account with a vendor, order something and then pay the invoice, you then go back to DnBs link and input the Company information, Account Number and Contact phone number. DnB
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will subsequently contact the company in question, verify the information and a tradeline will quickly and magically appear on your credit file.
PRICING
DUN AND BRADSTREETS CREDIT BUILDER COMES IN THREE PACKAGES.
THE SUCKER PACKAGE The first package costs $299 or somewhere around that price. Never buy this one. This is the Sucker Package(As I like to call it) If you refuse to buy the more expensive packages they will usually try to stick you with this one claiming that your file is not active until you purchase a package. In many cases they will reduce the price by 1020%. This package simply allows you to change the basic company information on your file without them trying to sell you anything else. I say that because you can change this information without paying for a package but there is no guarantee it will be done on the first request and every time you call to change it they will try to sell you a package.
THE BEGINNERS PACKAGE This package is good but if you have more money, you should go for the next package. The ticket on this package is $449. You can usually get a discounted price. This allows you to not only change that information we spoke about but to entire up to 5 companies that you did business with.
THE PLATINUM PACKAGE This package is $799, and again, ask for a discount. For the $799 you get the same package as the $449 except you can enter as many companies in that link as you want to. This is where you get your value for you money.
Please realize that these are not DnBs names for their respective packages but simply me renaming them. :)
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In some cases, Credit Line Increases can make up the majority of your business lines of credit. What exactly is a CLI/Credit Line Increase? A Credit Line Increase is exactly what it says, an increase in your line of credit with a specific lender. Lenders vary when it comes to credit lines increases but we must know that they usually look at the payment history on the account.
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Checklist
CHECKLIST
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Business Credit Made Easy This is a simple check list to ensure that you crossed all the Ts and dotted all the Is. I also included an excel spreadsheet in the package to help you guys track your credit building.
Checklist
Incorporated Business Phone Line Tax ID DUNS Number Confirmed 411 listing to be correct Eupdate Password Appropriate Stated Income Appropriate Number of Employees.
Please Note that the ideal company profile should have an income of more than 1 million and should have more than 10 employees.
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Pitney Bowes
PITNEY BOWES
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Pitney Bowes
This is a special account that was added to the book. It is a method of getting a Visa credit line with no PG with a limit as high as $49,500. This is a revolving Visa business credit card that you can use to purchase whatever you want. The trick is that you have to go through one year of building your credit with Pitney Bowes before you get the VISA card. Many cash lines of credit require your business to be 2 years old or more but this is not the case with this account. Hopefully you have some business use for a postage meter so that you get some benefit out of the 12 months of building your credit with Pitney Bowes.
You should start this process once you have completed step 3.
1. You will first be required to purchase a mailing machine. I suggest going for the cheapest one unless you have a need for it. The cheapest model currently costs $17.99 per month and is designed for 200-300 pieces of mail per month. Details on the various machines can be found on pitneybowes.com
Note
The bigger machine that you get, the bigger your initial credit limit will be.
2. Go To http://www.pitneyworks.com/postagemeters/ Choose the meter of choice and order it. There will be a $30 postage purchase that is required. Order the machine online. Do not call as sales reps are usually hard to deal with. 3. Once you have received the machine in the mail, you must set up a postage by phone account. Go to http://www.postagebyphone.com On the right hand side of the page, under the regular login section find the link that says: "Register now" Once you have filled out all the customer information, add $10 of postage using cash to your pre-paid account using the instructions below: When you first order your machine over the phone with Pitney Bowes, they will require that you put some initial amount of postage into the machine. You are now adding $10 more.
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Pitney Bowes
4. You will now want to activate your purchase power credit line. After you've ordered additional postage, call back into the "Postage by Phone Department" (800-243-7800) and tell them that you would like to activate a "purchase power credit line". All clients will be approved once you have not had a bad account with Pitney Bowes before. Order some more postage on that line because you will want to generate an invoice with them. 5. Order postage on a monthly basis using your purchase power account. This is a revolving account so you do not have to pay it in full every month but you must ensure that you pay each month on time. 6. After making at least three monthly payments, you now need to request a credit line increase. My suggestion is to ask for an increase to at least $5000. Do not ever put in your social security number when applying for your initial credit line or your credit line increase. Go to www.postagebyphone.com and on the left hand side of the page, click the "Purchase Power" link. Then click the "Apply now!" link. Fill out everything except for your social security number. 7. For the requested credit line, you should request $5000. Every 2 months of buying postage and paying the invoice, request another credit line increase. My suggestion is to ask for $10,000 more. 8. After 12 months of using the account and paying on-time, request the Purchase Power Visa Card. This is one of the few revolving cash lines of credit that you can get without a personal guarantee. Call 888-339-7228 and listen to the prompts to apply for the Purchase Power Visa Card. When applying for the Visa card, do not request more than $50,000 because tax returns and financials are required for this amount of credit.
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Seton
Website: www.seton.com Paydex Required: No Application: Call 800-571-2596 to place an order and ask for a Credit Line. Notes: These guys will start you off with a net 10. Remember this when planning to pay the invoice. Do not be late. These guys report to both DnB and Experian Business
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Rapid Forms
Website: www.rapidforms.com Paydex Required: NO Application: Call 800-257-8354 to place an order and ask for a Credit Line. Notes: Another one that reports and I have never got denied from them.
National Pens
Website: www.pens.com Paydex Required: NO Application: Call 866-900-PENS to place an order and ask for a Credit Line. Notes: They approve accounts and take a little time to report but they usually require you to buy in bulk. It is hard to find a very cheap product.
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Notes: They are a good provider of office supplies. They are a bit overpriced but they report to DnB and they report quickly.
Tech Depot
Website: www.techdepot.com Paydex Required: NO Application: Call 800-625-9866 for ordering and to get a credit account. Notes: Tech Depot is owned by office depot.
Majestic Advertising
Website: www.majesticsadvertising.com Paydex Required: NO Application: When you go to their website there is a link in the main menu on the home page. Notes: They sell business cards and other marketing supplies.
Supply Hero
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Global Industrial
Website: www.globalindustrial.com Paydex Required: NO Application: Call 888-978-7759 to order and request terms. Notes: NA
Marathon Oil
Website: www.marathonpetroleum.com Paydex Required: NO Application: http://www.marathonpetroleum.com/content/documents/mpc/credit_card/fleet_app.pdf Notes: Reports to both DnB and Experian
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Notes: This company has raised their requirements recently. They now require either a paydex score or 6 months of payment history. Once you have a 75+ paydex score, they will usually start you off with a $2000 credit limit.
Staples
Website: www.staples.com Terms: Revolving Paydex Required: 75+ Application: http://www.staples.com/sbd/cre/programs/credit/business/revolving.html Notes: Staples is similar to office depot as they recently raised their requirements. Both companies are backed by Citi bank so this is understandable.
Conoco Inc
Website: www.procleancard.com Paydex Required: 75+ Terms: Revolving Application: The application is on the main page of the website. Notes: This is one of the first gas cards that can be obtained on revolving terms. The only issue is that this company is not nation wide.
British Petroleum
Website: www.bp.com Paydex Required: 75+ Terms: Net 30/Revolving
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Notes: They usually give you a net 30 account to start with. If you apply for the account when your credit file has more tradelines you may be able to get the revolving account. They offer a MasterCard but this account is a tier 5 card. The MasterCard is also a net 30 account which is not very attractive.
Shell Corporation
Website: www.shell.com Paydex Required: 75+ Terms: Revolving Application: This is a Citi backed account so you will call their credit center at 888-987-4355 to apply. Notes: They start accounts as high as a $5000 limit with a good credit file.
Texaco Inc
Website: www.texaco.com Paydex Required: 75+ Terms: Revolving/Net 30 Application: http://www.chevrontexacobusinesscard.com/ Notes:
Borders
Website: www.boders.com Paydex Required: 75+ Terms: Net 10/Net 30 Application: http://www.borders.com/online/store/GroupSavingsServicesView_gssapplyonline Notes: When choosing accounts, you want to apply for the differed payment account.
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Application: http://www.dell.com/content/topics/segtopic.aspx/finance/dfs_financing?c=us&cs=04&l=en&s=bsd &redirect=1 Notes: Dell was a relatively easy account to get but as the credit crunch slowly got to affect business th credit, they have been moved up to the 4 Tier.
Trade Secret
After acquiring this account, if you want to get a credit line increase, you will want to follow these instructions. You call the sales department and inform the sales person that you will like to order more computers for you business. The sales person gets a commission so he will do what it takes to get the sale done. You let him know that you want to order a certain number of computers and then let him know that you will like to pay with your line of credit but you may need a credit line increase to cover the cost and let him take care of the application for an increase. This works much better than a simple application. Ensure that you paid on time at least 3 months in a row.
Sears
Website: www.sears.com Paydex Required: 75+ Terms: Revolving Application: http://www.citibank.com/us/cards/srs/credit_options.jsp Notes: NA
Wright Express
Website: www.wrightexpress.com Paydex Required: 75+ Terms: Revolving Application: You will see the application link on their home page.
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Amazon
Website: www.amazon.com Paydex Required: 75+ Terms: Revolving Application: https://www.amazon.com/gp/corporate/register Notes: Amazon tends to pull Experian. They offer a Corporate Paid in Full account and a Corporate Revolving account. You want to apply for the corporate account.
Bill Me Later
Website: www.billmelaterbusiness.com Paydex Required: 75+ Terms: Varies Application: When applying for this account we suggest that you go to www.apple.com. Put some products in your shopping cart and when you are ready for checkout you will choose the bill me later business account. Please note that you have to ensure that this is the business section of apple. Notes: This is an account that various. Most of the accounts that I got were net 120 accounts. They usually start you out with a limit of at least $10,000 once you have good corporate credit.
Exxon Mobil
Website: www.exxon.com Paydex Required: 75+ Terms: Revolving Application: http://www.exxon.com/USAenglish/GFM/How_to_Buy/ExxonMobil_Business_Card.asp Notes:
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If you have a good Paydex score on an LLC or Corporation that has over 2 million in annual sales that is over two years old, that has at least 10 employees, then you have close to a 100% chance of getting approved without a personal guarantee. I have gotten approved for this card when I did not meet all the requirements but there isnt any guarantee.
Once you are approved for the Home Depot store card, wait 3-5 months and apply for their MasterCard.
Key Bank
Website: www.key.com Paydex Required: 75+ Terms: Revolving (MasterCard) Application: https://www.key.com/pdf/KeyOnlineBusApp.pdf Notes: This will be one of the few cash accounts that you can get without a personal guarantee. They do not require you to be in business for 2 years or more. On the Key Bank application there is a space for your SSN. Simply cross it out and right DUNS number and put your Duns number there. I know it seems crazy but it works. This is to avoid a PG. Another little trick in this application is that although you may not be incorporated for more than two years you can state that you were in business for more than two years. If they ask any questions, you simply explain that you were operating as a sole proprietor previous to your incorporating.
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Minimum number of cards that they like to see being requested at the time of application: 5 cards needed While it's normally used for fuel, you can use the card for corporate purchasing. There is a $75 start up fee and the monthly fee is usually about $2.00 per card per month. Audited Financial statements are required if the credit line requested is $50,000 or greater. They will run a Dun & Bradstreet and Experian Business credit report. If the company is less than three years, they generally want a personal guarantee However, if the business is 1.5 years old and has good financials, they could get away without a personal guarantor. The terms for repayment are very flexible. They have options with weekly and monthly billing cycles. They will bill the customer to pay in full. The actual number or days they approve for your billing cycle varies between 14 and 25 days.
Office Max
Website: www.officemax.com Paydex Required: 75+ Terms: Revolving/ Net 30 Application: http://www.officemax.com/omax/home/custom.jsp?id=m280004 Notes: NA
Tcheck MasterCard
Website: www.tcheck.com Paydex Required: 75+ Terms: Varies Application: http://www.tchek.com/mastercard.asp
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Notes: To qualify with no PG, they will run your D&B, Run an Experian Business Report, and look at your profit and loss statement and your balance sheet. The MAXIMUM credit line will be 10% of their net worth. They pull a credit report from Experian and D&B. They look at your bank and credit references. You will be automatically rejected if they think that your financials that were uploaded to D&B were fraudulent.
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In my experience, Bank of America is a great start when applying for business credit cards with a PG.
understand PGd credit. For those of you with Good personal credit, there are even more options that are available for financing. There are many business credit cards that I have acquired for clients with a PG and 0 paydex. I have personal obtained 100K in credit cards for a client with a 700+ fico and a 3 month old business. Obtaining business credit cards is a great idea if they are needed. These credit card companies simply leverage the fact that you have a business along with your good credit and grant you more credit than you will normal get on your personal credit alone. The other positive about this type of credit is, even though you have personal guaranteed these credit cards, 90% of the times, the actual credit account does not show up on your personal credit. The creditors simply do a pull on your credit to verify the score and grant you credit. Since the accounts do not show up on your personal credit, the only effect that it will have it the inquiry. A few things to keep in mind with these PGd accounts are: 1. You will be held personal liable if you default on any of the accounts. 2. 90% of these banks will not grant you an actual Cash LOC without good business credit as well, only Business Credit Cards. 3. The interest rates tend to be just as high as personal credit cards if there isnt any business credit established. If you have good credit, and you need credit for your business, and you consider yourself a responsible borrower, PGd business credit cards is a great tool for financing your business.
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Minnesota
Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Vermont Virginia Washington West Virginia Wisconsin Wyoming
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FAQ
FAQ
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FAQ
Q: WHAT IS A CORPORATION? A: A business that has been granted a state charter recognizing it as a separate legal entity having its own rights, privileges, and liabilities distinct from those of the individuals within the entity. A corporation can acquire assets, enter into contracts, sue or be sued, and pay taxes in its own name.
Q: WHAT IS THE DIFFERENCE BETWEEN BUSINESS CREDIT AND PERSONAL CREDIT? A: With personal credit, youll be limited in the amount of credit you can receive and your LTV (Loan to Value) will affect your ability to obtain further financing. The more you use your personal credit, the worse off your personal credit will be. Personal credit is driven by FICO, and each time a lender requests a credit inquiry, your FICO score will drop by 2 points - this brands you as an even greater credit risk. With business credit, you are not limited to the amount you can receive, there is no LTV (Loan to Value), and inquiries have no impact on the corporations credit score. Your corporation also has the ability to obtain 10 to 100 times the credit you can obtain personally.
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Business Credit Made Easy Q: WHAT KINDS OF BUSINESS CREDIT ARE AVAILABLE? A: There are two types of Business Credit; trade credit and cash credit. Trade credit is also known as vendor credit and usually consists of credit from stores such as Staples, Office Depot, Home Depot, Lowes, Dell Financial, Best Buy, etc. Cash credit is the type you get from traditional credit cards-such as Master Card, Visa, and American Express-as well cash lines of credit from individual lenders.
FAQ
Q: MY BUSINESS IS NEW. CAN I STILL GET LINES OF CREDIT? A: With the right strategy any can easily get Business Lines of Credit.
Q: WILL THE PLACES I AM APPLYING TO ON THIS PROGRAM ASK ME FOR TAX RETURNS OR BANK STATEMENTS TO VALIDATE THE GROSS INCOME NUMBERS THAT I LIST ON THE APPLICATION? A: All of the places on this program will not need financials for the initial application. There are one or two lenders who may ask for these documents but for the most part they are not needed.
Q: DOES THE GROSS INCOME FIGURE THAT I GIVE DUN & BRADSTREET HAVE TO MATCH THE FIGURES I LIST ON THE APPLICATIONS? A: Yes.
Q: IS DUN & BRADSTREET GOING TO ASK ME FOR TAX RETURNS OR BANK STATEMENTS? A: You can always give them your tax returns and they will welcome them - almost no one does - there is no requirement or expectation that you do.
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Business Credit Made Easy Q: IF NO ONE IS GOING TO ASK FOR MY TAX RETURNS, THEN I COULD LIST A HIGHER INCOME, THE COMPANIES WOULD JUST USE THAT FIGURE, RIGHT? A: The initial vendors that are on our program generally don't ask for any documentation, but when you get into more advanced financing such as business loans, auto or equipment leases, documentation is often asked for. The auto financing in our program does not require verification though. One logical reason to make your revenue projections realistic is that in the future, when you start getting advanced credit that requires documentation, you won't have a huge discrepancy in your figures because hopefully you are now actually making close to or more than your projections.
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BONUS
1. Feel free to contact me at marcaaugustine@gmail.com 2. When you are finished with the book, I will like you to send reviews to marcaaugustine@gmail.com and I will be posting the reviews on my blog at creditrich.net.
3. I offer business credit coaching for $200 per month and shelf corporations with an established credit file from $3500.
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