A Business Line of Credit is the lifeblood of any company, allowing said company to make payroll, manage inventory, expand … the list goes on. Credit also equals credibility. A solid credit profile simply creates better relationships with partners, vendors and trade sources.

The problem is that a tight credit market makes it tough for even creditworthy business owners to access the capital they need. Now, more than ever, it pays to take active steps to make your business more creditworthy.

Of course, paying vendors on time and actively monitoring your business credit report at least quarterly is essential. But consider some other ways to strengthen your business’ credit:

1. Establish a business entity. It’s critical that your business is viewed as a separate entity from you personally. Establish a business bank account in your business’s name using an employee identification number (EIN). Log and submit to credit agencies all business payment activity under accounts that are exclusively under the name of the business.

2. Report transactions. Unlike credit reporting on the consumer side, there is no requirement for suppliers to report transactions with your business to credit agencies. It’s voluntary. You can be proactive by asking or by filling out a trade reference request.

3. Submit your financials. Providing audited financial statements to companies such as Dun & Bradstreet helps properly portray your company’s financial history. In many cases, a complete statement is not required, just key, high-level data points (current assets and liabilities, net working capital and ratable net worth).

4. Clear out outdated public filings. Typically, banks require businesses to put up assets as collateral in exchange for a loan when purchasing large equipment. Under Uniform Commercial Code (UCC), the bank reports the transaction and notes the collateral being used in exchange for the loan. Once the loan is paid off, the collateral asset is no longer at risk, but if the bank does not report that the loan is paid off, the credit agency is unaware and the result is a credit score that still reflects this liability.

5. Update business information. Be sure to amend any incorrect or out-of-date business information. As your business grows, it’s important to keep your credit profile up to date. For example, the more employees you have, the bigger your company is and the more creditworthy it may be perceived.

6. Work with credit-friendly vendors. Open up business accounts with companies that have a reputation for extending credit to start-ups without requiring personal credit (such as Dell, FedEx or Home Depot).

Get the Credit You Deserve

Building a credit history is as important to your business as it is to your family. Nevada State Bank's Business Centers are here to help you every step of the way – from qualifying, to processing paperwork and final closing. You’ll find conveniently located Business Centers in northern and southern Nevada.


The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank, a division of ZB, N.A.