Credit History or Credit Report is developing record of an individual’s or company’s current and past borrowing and repaying, including information about late payments and bankruptcy. The term “Credit Reputation” can either be used synonymous to credit history or to credit score.
Corporate Credit Strategies
Cirqa Financial offers multiple programs to build corporate credit. We will provide your business with the next steps needed to separate your personal credit from your business credit. We have developed a unique process that compresses the 4-6 years it usually takes to establish business credit down to only 60 to 90 days, creating a new credit profile based on your Tax ID number.
Here are three major benefits of building business credit:
Large Credit Capacity – Businesses have 10 to 100 times greater credit capacity compared to personal credit. As a creditworthy business, your company will be in a position to qualify for financing based on factors strictly related to the business. Without building business credit, you will have to continue to rely on your personal credit.
Increase Company Value – A creditworthy business has a powerful advantage in financing ability. And because this asset is fully transferable with the business, it makes it very attractive to a potential buyer or investor.
Protect Personal Credit – A business owner will be able to limit, if not eliminate, the use of personal credit checks since the company has its own credit ratings. This prevents a business owner from having to co-mingle personal credit, personal debts, and personal assets with that of his company.
Once you Establish Corporate Credit it is possible to obtain:
- Real estate
- Auto leases
- Credit cards
- Lines of credit with various companies
- Equipment leases
- When To Establish Credit
Throughout the life of a company, the need to establish business credit will most likely arise. Build credit before your company needs it. No institution wants to lend money to a business in need of cash flow. A business should start to build its credit history and get a corporate credit profile over time. This is possible with a Corporation or Limited Liability Company (LLC) using the tax identification number (EIN).
When officers and owners use their own personal credit profiles to obtain credit or credit cards for their business, they risk the chance of personal liability and weakening the corporate veil by co-mingling financial transactions. There are two reasons business owners should try not to use their personal guarantee in this situation. Build separate credit – it is the answer to these vulnerabilities with your enterprise.
The individual signer is liable if the business cannot make the payments.
The credit obtained for the business can result in seizure of personal assets.
Keep in mind, business credit ratings much like your personal credit score, are based on several factors, including: available credit, the amount of available credit used, late payments, and much more.
Obtaining lines of credit for a business is a process that should be established over time. The older the business, the more options it will have to build credit and obtain loans and leases without the use of personal guarantees. It’s not easy to do this but it’s not impossible, either. The first step is to start the process. Build your corporation’s or company’s credit today.
Cirqa Financial offers aged companies and shelf corporations that can help to build corporate credit quickly.
Cirqa Financial has developed a program to provide your business with the next logical step in separating business and personal finances through creating a new credit profile based on your Tax ID Number.
It all starts with our Credit Builder Program, which will establish a brand new credit profile and score. The goal is to establish corporate credit scores of 75 or better. In comparison, a score of 80 is like having a personal credit score of 800.
That is excellent credit. We have collected and made available, the credit score systems for the primary reporting agencies.
A credit score is built by having lines of credit, credit cards, accounts and trade references that report to the business credit bureaus. For most businesses, it’s very difficult to find a creditor willing to grant most forms of corporate credit with no personal guarantees without any previous business credit history. If you have your own trade references, we will work with them to build the score. However, most businesses need additional trade references who report to credit agencies that will open lines of credit and begin reporting to the major agencies. Though the process usually takes the time outlined above, occasionally four to six months is required for the vendors to properly verify to the reporting agency.
We offer guidance on how to select companies who will provide your business with immediate credit. Part of the program is to assist you with the entire application and reporting process as well as choosing businesses that will grant credit to your company. The companies we work with will report payment experiences to the credit bureaus – and provide loans without a personal guarantee or the need for personal credit checks.
Companies are willing to issue the credit because their clients are not considered high risk. The reason they are not considered high risk is because of the business owners desire to build their business’ credit by investing in a corporate credit building program.