'Tis the Season to Boost Business Credit

And how! We are really seeing exciting results right now! There are so many ways to build the business credit, boost scores and ratings, add vendors and suppliers, and reduce the weight of your credit debt, it's amazing. And right now, it's so ridiculously easy because of all the options available, so I thought I would share a few...

It's a given... You are going to spend money this time of year, so why not make sure your company gets credit for that spending? And while lots of people tend to focus on getting Net 30 accounts (the forest), they completely miss out on all the other opportunities for growing their business credit (the trees). But having a variety of payment types is just as important as having a variety of vendor accounts, and BOTH can benefit your business.

Take ONLINE BUYING, as an example... Those one-time purchases you make online tell a whole different story about your business — namely, that your business uses alternate resources and providers. In fact, this is the time of year when many small business owners take advantage of seasonal discounts to stock up their inventory, shop for employee gifts, and make those higher dollar purchases that would otherwise be out of budget, even if those purchases are prepaid.

As an example — I typically use pre-Christmas discounts to renew subscriptions, switch monthly services to annual billing, and buy big ticket items that I have been eyeing all year. Last week, I invested in a new 32" monitor for my desk, and by creating a business account at the retailer's online store, I was able to make my purchase in the business name, pay for it using my business credit card and have it shipped direct to me overnight. Great price! No lines. No crowds. No traffic.

In doing it this way, my one prepaid purchase will account for two new payments in my D&B report! The retailer I made my purchase from will (hopefully) auto-report to D&B, and the credit card I used to pay for my purchase also reports to D&B.

This is also the best time of year for OPENING NEW VENDOR ACCOUNTS. Whether prepaid, Net 30, or revolving, suppliers and creditors are bending over backwards right now to win a larger share of those seasonal spends. In addition, many are also relaxing their normal credit standards to help make online buying easier, especially for new commercial customers that they hope to harvest as recurring spenders later. When a creditor is willing to jump through hoops, you need to get in on the act!

As an example: Julie's company already has a dozen vendors reporting in her D&B file, but she has also been receiving marketing from several who sell the same supplies at a cheaper price. One of them is someone she had tried to open an account with in the past but was declined. Now, they are reaching out to her, chasing her business, and offering discounts and special pricing. Now that she has payment history and her D&B scores and ratings are in place, she reapplied in the business name and was instantly approved for a $2,500 revolving credit line.

COMMERCIAL CREDIT CARD approvals are way up right now because providers are wooing small business owners and trying to grow their customer base. They are also being more generous, whether you are applying for a new credit card account or requesting an increase to an existing credit line, and that can make it a lot easier to afford those online buys while the pricing is right.

As an example: Manny and Jenn are a couple with a two-business household.

• Manny, a lighting contractor, had a credit card account with a $2,500 credit limit that he initially opened in his business name about six months ago. With a click of a button in his online account, he was able to increase his credit line to $22,500, and that allowed him to go online and order inventory from a new (auto-reporting) supplier.

• When Jenn's home-based accounting business was young, her credit card application was declined. Now that her business is a older and has all it's scores and ratings, she was instantly approved for a $5,000 credit line. This allowed her to take advantage of online Black Friday deals to buy a couple more computers and upgrade her system software. Now she can hire additional staff for the upcoming tax season.

Relaxed credit card criteria is also allowing small business owners to move business debt off their personal credit to where it should be: the business. By TRANSFERRING BUSINESS DEBT that is weighing down your personal credit scores, you can gain a healthy boost to the payment history in the D&B report and relieve stress on over-burdened personal FICO scores.

As an example: Will has always carried his business expenses on his personal credit. From the day he started his real estate flipping business, he has paid his suppliers with cash, check, or a personal credit card. That card has been working overtime, and it has always been a burden on his FICO scores. Once we'd built up his D&B report, he was approved for a business line of credit. He was able to transfer the business debt off the personal credit card, which helped to boost his personal FICO score (a win), and the new line of credit will be a nice positive transaction on his business credit report (also a win).

COMMERCIAL WORKING CAPITAL LOAN approvals are also on the rise, and the consistency of the loans is actually really impressive. If you can prove your company makes more than $5,000/month and that your FICO score is 550 or above, you are already halfway through the approval process. We'd still want to boost your D&B report as much as possible and verify the other base criteria to get a higher approval, but at least you already know you are working in the right direction.

As an example: Pete owns two businesses: contract trucking and real estate investment. His focus is primarily on trucking in the spring, summer, and fall — but, when highway construction jobs are slow in the winter, he and his wife like to buy a house, rehab it themselves, and then put it into the rental market. This year, instead of using their savings to buy their fifth property, Pete opted for a short term working capital loan and was approved in less than 24 hours. He also created construction-based vendor accounts in preparation for this opportunity, so they were able to get the remodeling materials they need on Net 30 terms. As an added bonus, when this loan is paid off, the lender will set Pete up with a larger business line-of-credit with longer terms and lower fees so he can use only what he needs and pay interest only on what he uses.

As the year's end grows closer and you are shopping for the holidays, taking advantage of discount pricing, and making those year-end purchases to reduce your taxes, make sure to keep your business credit goals and objectives in mind. If you shop smarter, your credit will work harder to prove your business is strong, viable and creditworthy. And isn't that the best gift you could possibly give to yourself this season?