Corporate Credit

Each time you provide a personal guarantee for any type of credit extended to your business, you jeopardize your personal assets, such as savings and investment accounts, your car, and even your home. If your business can’t pay off its debt, the bank will come looking for you to make good on the loan. A business entity established as a sole proprietorship is most susceptible to this risk. Although you can build business credit as a sole proprietor, you will be completely liable for all personal and corporate debt. Your credit history will be based solely on activity associated with your social security number because you will not have a corporate tax ID number. As a sole proprietor, you also have no legal means for separating corporate and personal credit.

The best way to protect your personal assets is to incorporate your business. You’ll shield yourself from personal liability for the company’s debts and typically will also reduce your tax burden.

When people marry, they vow to share their lives. For some good-hearted but financially naïve couples, this means sharing personal credit. Unfortunately, adding your spouse to your credit isn’t a show of undying loyalty and devotion. It’s credit file contamination – an almost unforgivable sin if you’re a business owner. When you initiate joint credit, your spouse’s credit history becomes part of your credit file. If your spouse misses a payment, the delinquency affects your credit. The matter is complicated further if you haven’t taken steps to separate your personal credit from your company’s corporate credit. Credit file contamination created by a spouse’s credit history could easily keep y0u from achieving your business goals – because it will prevent you from securing the financing necessary to grow your company.

To avoid credit file contamination, keep your credit history completely separate from your spouse’s history. If your spouse ruins his or her credit, then you’ll still have a good credit history to support your family, as well as your business.

You misplaced your credit card bill and sent in payment a few days late. It happens to the best of us, right? Maybe so … but as an entrepreneur, you can’t afford even a single late payment. Your credit file is a complete history of your credit activity. Not paying your bills on time can ruin your credit file. A single delinquency can be held against you for years and be used to constrict the extension of existing credit or deny new credit– which can make or break your ability to finance the launch, operation or growth of your company. There are two things you should do to protect yourself from this critical mistake.

The first, obviously, is to ensure that you pay your bills promptly. Second, keep your personal credit separate from your corporate credit. That way, problems with your personal credit history will have no bearing on your corporate credit. But if you do not take all the necessary steps to separate your corporate and personal credit, problems with your personal credit file could directly affect your ability to build your corporate credit and your business.

When you use your personal credit card to buy business items, you instantly slash the amount of credit you have available to get the things you and your family need and want. And if you, like many Americans, regard your credit cards as the financial cushion that will carry you through emergencies—such as an illness that makes it impossible to work– wasting your credit on business expenses weakens your safety net. Still, many entrepreneurs ignore the dramatic consequences of this dangerous practice:

As we discussed in Mistake #9, using your personal credit to pay for business expenses is a strategic error. And if it doesn’t make sense for you, the business owner, it makes even less sense for family members. Keep everyone’s personal credit strictly separated from your company’s corporate credit.

Corporate credit can be an invaluable tool as you build your wealth; because it gives you the flexibility to invest money in ways that you have determined will help you build your business.

But just as it takes time and patience to build wealth, it takes time and patience to build the corporate credit that enables you to get cash from lenders without your personal guarantee. Incorporating your business is just the start of the process. The industry standard for building corporate credit to the point where you can secure cash loans without a personal guarantee is two to three years. Corporate Credit Concepts has streamlined its credit-building process so that you can get the corporate credit you need in as little as one month. And then follow the steps to position your company to qualify for no personal guarantee lines of credit.

Once they begin to follow the prescribed process for building corporate credit, many entrepreneurs simply don’t do enough follow-up work. But if you don’t keep track of your progress during the process of building excellent corporate credit, you may miss key elements that could make the difference between getting the cash line of credit you need … or being denied.

It is always a good idea to delegate, especially if you are busy. But you have to be careful as to which kind of work you delegate. The work that directly affects the growth of your business and your wealth deserves your personal attention.

At the first sign of profits or the first influx of credit, many business owners spend more than they have – or even more than they will make – on material goods. Lured by the luxury car or exotic vacation they’ve lusted after for years, they ignore long-term business goals in favor of temporary and immediate gratification. But if you want to achieve your long-term business goals, recognize that corporate credit and profits should only be leveraged to create greater gains for your business. Instead of figuring out how much profit you can take out of the business, seek ways to invest your corporate credit so that it will deliver greater returns for your business. This is not, by any means, a comprehensive list of all the mistakes entrepreneurs make when it comes to building corporate credit. But if you address these costly and dangerous errors, you will be on your way to building a safe, secure, and financially sound business—the business you always dreamed of! Corporate Credit Concepts shows entrepreneurs and business owners how to get at least $30,000 – $100,000 and up – in cash to finance their businesses …while bullet-proofing their assets, slashing their taxes, and safeguarding their personal credit history and score. CCC’s groundbreaking, comprehensive Credit Builder Program, is a proven, step-by-step program for separating personal credit from corporate credit, building your corporate credit, and obtaining cash lines of credit!

In addition to our Credit Builder Program, you receive a top-secret list of the handful of lenders who offer cash lines of credit without personal guarantee. The business-financing experts at Corporate Credit Concepts have already helped hundreds of real estate investors, stock and other investors and small business owners from a wide variety of industries all over the United States qualify for the lines of credit their businesses need.