Kathy Stielsa

Posts Tagged ‘line of credit’

Many people say, that what you don’t know is what will hurt you. That’s not true. It is what you don’t know that you don’t know which will hurt you.

Let me tell you that I am not a licensed Attorney or an Accounts - so before you jump into action base on the information in this article, make sure to talk to a Tax and Law professional to get proper legal advice according to your specific situation.

Most people are pretty familiar with Personal Credit and what they need to do in order to maintain a good FICO Credit Score. Actions such as low revolving balances, always making payments on time, using different types of credit, and length of credit history all play a major rule in determining an individuals Personal Credit worthiness. If dealt with properly, leveraging Personal Credit can be very useful in further advancing an individuals net worth by wisely investing the borrowed money.

Did you know that just as there is Personal Credit, there is also Business Credit? Similar to Personal Credit which applies to an individuals credit worthiness, Business Credit applies to a company’s credit worthiness. There are some similarities between Personal Credit and Business Credit, however in all actuality Business Credit is a whole another ball game.

Personal Credit is connected with an Individual’s Social Security number as opposed to Business Credit which is connected to a company’s (LLC, C Corporation, S Corporation, etc) Tax Identification Number, also known as FEIN (Federal Employer Identification Number) or just EIN (Employer Identification Number).

As an individual you can only have one Social Security number for your entire lifetime however there are no limits to how many companies you can own, each with a unique Tax ID number. So, there is only so much personal credit an individual can obtain, but there is virtually no limit to how much a company can obtain in Business Credit.

Computing Personal Credit ratings is the responsibility of three major credit bureaus; Equifax, Transunion, and Experian. Conversely, the majority of Business Credit ratings and reporting is the in the hands of a single company known as Dun & Bradstreet. Primarily based outside of the United States, it methods of operations vary from those of the three major personal credit bureaus.

There is a certain method to structuring a company in such a way that allows for the maximum amount of Business Credit, a set of specific processes and to-dos per say. If you don’t follow this methodology, it does not mean that you will not receive Business Credit, it just means that it may take you a lot longer and you may not receive as much.

In conclusion the situation is really sime: Using and levering OPM (Other Peoples Money, i.e. Business Credit) to develop and operate a business is more efficient and economically preferable to saving the same amount of money yourself.

A good friend of mine obtained a $100,000 business loan in just 3 months for a company that was only one year old. Intrigued by the idea and process, he asked his mentor, who helped him in obtaining the business credit loan, if he was interested in starting a business venture to educate others in how to apply for and receive large amounts of Business Credit.