If you bring us a contract with a better offer, we guarantee to either beat that rate or pay you $500.

Building Business Credit – The Authoritative Guide


Does Your Business Pass the Business Credit Test?


7 Things You Can Improve on Today


  • What stage is your business?
  • Are you just starting?
  • Are you an existing business?
  • Are you thinking of buying a business?


If You Are Just Starting a Business


Then building business credit is perfect for you. Especially if you have bad credit on the personal side. It is critical for newer companies to have access to credit and capital. You must give your new business every financial advantage.


Have an Existing Business


Even if you have been in business for ten years, you may not have a business credit profile! Whether you do or not, you must follow the tried and true methods for establishing your business credit profiles to grow your business.


Buying a Business or Franchise


When considering purchasing a business, you should first form a new entity for the acquisition. Then you will want the new business to have strong business credit scores so that you are ready to jump in once your sale closes.


Strong business credit scores


Build strong business credit scores the fastest possible way with all three agencies and make thousands of dollars in credit available to your business!

For lenders to approve your company and to improve your business, here are 20 compliance items to complete first.

The first step to building your business credit  is to open a file with all three national business credit agencies; Experian Business, Equifax Business, and D&B (Dun & Bradstreet).

Your business must have five vendor lines of credit that report credit history.


Here is the challenge

Right now, there is over half a million vendors extending credit, but less than 2% report to the business credit agencies. The fact is that you can obtain $1,000’s of dollars in vendor credit lines. You can do this by setting it up in your business and not piggybacking on your personal credit. Building corporate credit is the process of separating business and personal credit.

Business credit cards are critical to building business credit. You need at least three business credit cards that show up on your business credit scores.


Here is the next big challenge

Guess how many business credit cards are in the market today?

There are over 500 business credit cards. What makes it challenging is that only 40 of those business credit cards will issue a card without using your social security number.

Imagine getting approved for thousands of dollars in business credit cards that do not appear on personal credit reports.

Imagine separating business and personal expenses by using corporate cards or business charge cards to improve your business credit.

Don’t confuse a bank-issued card that has both your name and the name of your company.  Your name is on the card means you are personally guaranteeing the debt.

Once you have built strong business credit scores, you can access much more financing.

This is unlike consumer credit. With business credit cards your spending limits can be much higher than with personal charge cards even if you have excellent credit.


How to get approved for your first business bank loan


A reporting bank loan puts your business “on the map” as far as every other business lender is concerned. You will be so surprised once you secure a small or large business loan that reports to business credit.

Again, we suggest this strategy over going for a personal loan.

Just like when you get your mortgage for your home.  You will start receiving unsolicited offers extending you more credit.


The Checklist 20

Did you know that there is a checklist that most banks and commercial lenders use?

This checklist is a list of 20 items.  To be considered compliant, you need to make sure all 20 items are checked off.


What are the 20 questions?


While the items are not complicated, they are not simple.

Is your business listed with Directory Assistance?  It used to be simple.  Everyone had AT&T.  Everyone got automatically listed in that directory.

Now with the dozens of phone companies and technologies, there is a good chance your business is not on the “national” list.

Make sure you list your business in the 411 directories with your proper legal business name.  Otherwise, it’s all over if you are not listed.

Don’t believe me?


What type of phone system do you use?

  • VOIP
  • Virtual System
  • Cell Phone

Here’s a test for you. Call your local 411 right now.  Use your business under its legal name (the way your business is listed with the state when you incorporated).  Ask if it is listed.

Congratulations if it is and on completing step one.

Only 19 more.

If your business is not listed?  Here is the potential problem.

Sit back; this can be confusing.  You make a call to 411.  The call routes from your local phone provider to the company that “owns your phone.”

In English, it looks like this.  Sprint routes to Sprint.  T-Mobile routes to T-Mobile, AT&T to AT&T, etc.

Let’s say it is T-Mobile.  You call 411 to find that your business listed with T-Mobile.  So far so good, right?

Now use a buddy’s phone that has Verizon, Comcast, or any other local provider.  Is your business still listed?

What about a business lender or the bank who calls to verify your listing from an outside area code?  Odds are they will dial 1-XXX-555-1212.

Make sure you check out that scenario as well.  Many times, those calls route to the national directory assistance database and not to the local service provider.


This step is just one of twenty steps.

There are 19 more.

Missing one of these 20 checklist items can easily result in your small business loan request declined.

Unfortunately, most providers of credit will just send you a “decline” letter.  It is a heck of a lot easier for them to do this than explain to you which items you failed to complete and how to correct them.

What you need to ask yourself is this. How does your business measures up with the entire lending and investing community?  How well does your company look to the lenders?

You must ask yourself this question. How lenders look at my business.  What do they see?  Talk to investors.  Ask a bank.  Speak to your vendors or insurers. How do they understand your business and what do they consider to be the risks?

What do the companies extending you credit want?



Complete the 20 compliance items before the loan or credit application submitted.

What that tells everyone is you have attention to detail. You are acting like a real business’ behaves.


Building Strong Business Credit Scores


Building strong credit scores with all three national business credit reporting agencies:


Credit Usage – Optimal Results

Here it is.  Have one bank loan.  Have three business credit cards.  Have five vendor lines of credit that are strictly in the company name (nothing personal).


Comparable Credit

One strategy is to get alternative lenders to give your business a business loan that is similar in size to the loan you are seeking from an institutional lender like the bank.

The merchant cash advance is the perfect vehicle. The cash advance is typically not based on personal credit and if you have some business credit you can easily be approved. This is different that an SBA loan which is backed by personal guarantees and probably does not report to the business credit bureau.


You can get credit in many ways.

A vendor might offer a $15,000 credit line to your business.  Maybe you can secure a $50,000 lease line of credit to be used for equipment.  The reality is that no one wants to be the first one.


How Viable is Your Business?


There are two things you must consider.

  1. Can you prove that you are credit worthy?
  2. Can you show that your company is both creditworthy and “competitive” for your industry and market segment?
  3. Do you have a sound business plan and business model? When the underwriter looks at your application and supporting documents does it make sense and can they readily see how you can repay the loan?

The bottom line is this: All lenders want to get paid back.

You want to succeed at this, right?  Of course, you do.  You would not be reading this if you didn’t.  I get it.

You must build strong business credit. Building business credit will also improve the “health” of your company.  The bottom line is that it will increase your ability to succeed now and in the future.  That is something we can all take to the bank.


There is my way or the highway.

How often have we heard that?  We all know there is a right way and wrong way to do virtually everything.

It is the same for building business credit scores, like building your personal or FICO credit score.

We see something like this all the time.

A business sets up as a sole proprietor.  The owner operates the business for years with the assumption that they built business credit.

How does this happen?  Can’t blame the business credit agencies. They issue the sole prop the credit file.  That sole-prop will also get a business credit score.


What’s the problem?

It is the nature of the beast sort to speak.  With a sole proprietorship (and partnerships), everything gets tied to your personal credit score and not your business credit score.  You and not your business is 100% responsible for all debts and liabilities.  While you might be doing business, you are not a separate business.



How do you fix it?

Fortunately, this remedy is not too bad.  Work with your accountant or attorney to separate from you, from your business.  Either be an incorporation (INC or S-Corp) or a limited liability company (LLC).

This business formation creates a stand-alone “entity.”   Separate from you personally.

Now creditors see your business as a business and not an extension of yourself.  This small step enables you to build business credit scores that are separate from your FICO score.  Business debts never show up on your personal credit report.

Personal = Social Security Number
Business = EIN = Employer Identification Number

Here is another response we hear all the time.

“I have a Paydex score.  Don’t I have business credit.”

It is true that D&B that you need them to build business credit.  The challenge is that you are only one-third of the way there.  You still need Experian Smart Business and Equifax Small Business Financial Exchange scores.  Unlike the big three personal credit bureaus, the business credit bureaus cover different markets.

If you want a bank loan or line of credit, then Equifax may be the best one for that. Equifax is where banks go to check on you.  So, no Equifax, no chance for bank loans or lines of credit.

Experian works with a different set of vendors extending credit to businesses.  These are the credit card companies, companies that lease equipment, general vendors, and even your business landlords. To build strong business credit, you need an Experian Smart Business profile and score.


Reasons to celebrate

Birthdays, anniversaries, holidays are all good reasons to celebrate.  Well, there is one more reason.  The day your business obtains its first bank loan.  Getting your first business loan will make you feel how you felt when you got your first mortgage.  Mark it on the calendar.

It is truly a day to celebrate.  It is the day that all other lenders will take notice of your business and it puts your business on their credit map.

Everybody knows how difficult it is to get approved for a business bank loan.  When non-bank business lenders and credit providers see a reporting bank loan hit your business credit reports, it an indication to the non-bank business lenders and credit providers that your business is for real.

Ever since the great recession, many business owners think that obtaining a business loan from a bank is an impossible dream and rightfully so.

Build business credit right the way, and you are on your way.

There are multiple roads you can take including getting the business bank loan.  The bank loan helps a lot.  There is no doubt about that.  Before getting vendor lines of credit, business credit cards or that coveted loan all hinges on the date you opened your business checking account.

Here’s another minor mistake most business owners make.  Most owners erroneously assume that the day they incorporated or filed for their business license is the day their business began.


Not true

Believe it or not, it is the date you opened your business bank account.  That is the day your business started.

If you incorporated in July 2008, but opened your business checking account in March 2010 then, as far as lenders are concerned, your company began in 2010.  Make sense?

The next thing you need to concern yourself with is your “Bank Rating.”

The business credit bureaus will determine your company’s creditworthiness based on its credit scores.

Banks and other traditional lenders will evaluate your business’s ability to pay back the business loan on that Bank Rating.

Do you know what your average daily bank balance is?  If you do not this can be the sticky wicket.  On average how much cash is in your business checking account on a day-by-day basis?

Now go back a few months.  This daily balance calculation goes into determining your business bank rating.  Got it?

Just how serious are you?

If you are serious about the success of your business then you will need to know:

  1. How to address the compliance items required by most lenders and credit providers;
  2. How to properly go about building strong business credit scores with the national business credit reporting agencies; and
  3. How to properly manage your business banking relationships.



According to the SBA, vendor credit is the largest source of SME lending in the United States.  According to the Small Business Administration, there are over half a million companies who extend lines of credit (vendors).

What is vendor credit?

Vendor credit is when one business, like a coffee supplier or office supply store, allows your business to get the coffee it needs or supplies now but pay for them later.

These vendor credit terms give you 30 days to pay and are called “Net 30.”

Net 30 means you must pay the invoice in full within 30 days of the receipt of the coffees.

There are also Net 15, Net 60, Net 90, and even Net 120 payment terms. It depends on the vendor and your business credit.

Maybe you are asking yourself, why does my company need vendor credit?

Two key reasons.

  1. Cash flow.  The credit you receive from the vendor gives your company the ability to get the products and services it needs “now.”  It also enables you to defer the payments for later, thus improving cash flow.  It does this by conserving the money on hand for your more important short-term expenses.  It also gives you the ability to generate more business income to cover the original invoice.
  2. Payment history.  Paying on-time or early will build strong business credit scores.  So, do yourself a huge favor and pay on-time (or early if you can).


The good news and the bad news

The good news is that vendor credit is that it is tied to your business and not to you personally.

The bad news is that there are over 500,000 vendors that extend business credit.

So what you ask?

Only about 6,000 reports to the national business credit bureaus.  Naturally, you will want to select only the vendors that file to with the appropriate credit agencies.

Make sure you ask.


How do I optimize my score?


To maximize your business credit scores, you need five vendor lines of credit that report.

Keep in mind that you must keep “declines” to an absolute minimum.

Every time you apply for any credit, it gets reflected as an inquiry (just like with personal credit).  These queries will show on your business credit reports.

As a result, you need to prepare before you apply.  To get an edge know beforehand what the vendor requires to get the approval.

The beautiful thing is when you apply with vendors that only report to the business credit bureaus it does not matter what you have as a personal credit score.

What do I do after I have my five reporting vendor lines of credit?


Business credit cards


First, the five vendor lines report only to business credit bureaus.  Next up is getting three business credit cards that report to the national business credit agencies.

Again, ensure they do not appear on your personal credit files.

Do you want a business credit card?

Make sure you have first completed all 20 of the bank lending compliance items.  Confirm that you have five vendors credit lines and you have verified are reporting.

Virtually all business credit cards issuers want to see that your business credit files are established and showing you have a bit of actual reporting history under your belt.

The beautiful thing about business credit cards is that they carry more weight than vendor lines in the business credit scoring process.

Again, don’t get too aggressive with all your applications at once. Spread them out. Minimize lender inquiries.

Same for the declines.  Keep the rejections to a minimum.



Same as before.  Know what the business credit card issuers require for approval.

Like the Boy Scout motto, “be prepared” before you apply.


Credit building tip

For business credit cards, it is important to carry balances that are no more than 40% of your available credit limits.


Credit building secret


Credit card providers do not report your “available” credit limit. What this means to you is that most lenders will take your “available limit” or spending limit  as your “highest reported balance.”

How do you do it properly?  When you first receive a business charge, you need to run it up.  Yes, you heard that right. Run it up. Just make sure you pay your bills on time.

Then pay it down to the forty percent level.  Obviously, make sure you have the funds to do this.

Like the speed limit on the highway, where they allow you about a ten-mph grace, you need to maintain a balance of around 30 to 40 percent to keep your business credit scores at the optimal level.

Remember, there are over 500 business credit cards in the United States.  Your company only needs three that report.

Before you apply, ask if they report only to the business credit bureaus.  Do they require a personal guarantee?  Do they use your personal credit for approvals?

I cannot repeat it enough.  Know the requirements beforehand.  It significantly increases your chances of your approval.

If you follow my steps, do I guarantee that you will have strong business credit scores no matter what?

Unfortunately, I have no control over how you pay your business bills.  Trust me on this.  Once you establish your business credit, if you pay your new credit accounts when they are due or early, you will build strong business credit scores. If you do not, you will not, and all bets are off. If you pay them late, you know what will happen. Right? Know your billing cycles.

I want you to make sure you know what those 20 business information items are and that you check them off quickly before anyone even looks at your business credit reports.

Your company needs to have reporting files with all 3 National business credit agencies.



In establishing your business credit files, one agency will tell you that you must pay up to $500 or your credit file will never open.



You can open all three for free.  How?  Some vendors when you establish your line with them will automatically report to that bureau. For FREE!



There are over 500,000 vendors in the United States extending credit.  Less than two percent report your payment history to the business credit agencies.

Even less will extend business credit lines without requiring you using your social security number to guarantee it personally.  Make sure you ask before applying.

Business credit cards without the personal guarantee.

Your company must have three credit cards that report only on business credit reports.  The numbers are staggering.

There are over 500 business credit cards. However, less than 10 percent will provide your company with a credit card without using your SSN and your personal credit to secure it.

Don’t be tempted by a card from American Express, Capital One Spark or Ink business unless you know 100% that these rely solely on your business credit and not tagged to your personal credit. Don’t be tempted by the reward points on the personal cards. You can find them on the business side as well. You can still enjoy the cash rewards, introductory APR of 0% and other membership rewards on your business charge cards.


How to skyrocket your business credit?


Get a bank loan or installment account.  This business loan is the turbo booster you need.  It is business credit on steroids.

Do you know what it will do for you?  It puts you on business lenders’ “radar.”

The nature of the reporting process notifies all other business lenders that your business is real and creditworthy.  Everyone knows how difficult it is to get a bank loan.
However, guess what?  You got a business loan!

The same thing for financing your business truck, your computer network or any other business purchase need.

Know what banks and all lenders require to approve your business before you apply.

Your company needs its good credit scores, so let’s get them!

Follow the rules so your business can get approved.

Get $1,000’s in vendor and business credit card financing.

Pre-qualify and apply for business funding programs.

Build strong business credit scores with all 3-credit agencies.

More now than ever our economy needs small to mid-sized businesses to succeed.

Ever since the financial collapse in the mid-2000’s your business needs to have a strong business credit profile that is separate from your personal credit.


Separate, Grow, and Succeed!

Your business needs its good credit scores, so let’s get them!

Mark Kane 2

Mark J. Kane, Founder & CEO of Sunwise Capital, is a distinguished entrepreneur with over 16 years in business financing. Beginning as a psychologist, he quickly became a trailblazing Hospital Administrator. Mark has built multiple ventures, notably accelerating a startup to $18M within months. His transition to Sunwise Capital stems from a deep-seated desire to empower business owners with strategic financial solutions. Recognized for his expertise, Mark's leadership at Sunwise Capital reflects his commitment to fostering business growth and success. Click the link to read more about the author.

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