A word here about home-based businesses, which are growing by leaps and bounds daily, not only in sheer numbers, but in credibility. Home-based businesses are gaining in popularity and are being widely recognized for their contributions to the national productivity picture. No longer thought of as part-time, hobbyist, or unprofessional, home-based businesses are now on the cutting edge of the business landscape.
My business is home-based and I have never tried to hide that fact. Even when Dun & Bradstreet called me for an interview to gain information about my company. I told them that I worked from a home office.
Let me stress the small distinction that I just made:I don't WORK FROM HOME, which sounds like a hobby.
I operate my BUSINESS from a HOME OFFICE, which is professional, well equipped, and operate like any business, just in a more convenient, cost efficient, and pleasant environment.
Some entrepreneurs think that you will appear just too "small time" if you work from home and nobody is going to loan you a cent because of it, or what they will approve your business for will be miniscule. This has not been my experience. I have never had any problem acquiring credit because my business is home-based.
Your business credit, length of time in business, personal credit history, your yearly sales volume, and overall professionalism go a lot farther than your location.Still, some entrepreneurs think they need to get a rental space or a suite number, etc, to try to fool lenders into believing that their business is not home-based.
Folks, it’s not necessary.
1. Apply for your Corporation or LLC, this can be done online inexpensively
2. Apply for your Tax ID
3. Get your business telephone number
4. Call Verizon Foreign listing and have your number listed in directory service, also get listed with:
5. Listyourself – allows you to publish your toll free 800 number, your VOIP or your cell phone number)
6. Call 411 to verify your business is located in directory service
7. Open your business checking account
8. Create a professional looking website and set up the company email address
Credit Builders - A service that can swiftly build your business credit Dun & Bradstreet
After leaving work one day in January 2006, I called Dun & Bradstreet to make a purchase for a DUNS number. The customer service representative told me that my file would be incomplete with only the purchase of the DUNS number, and that I needed to purchase Credit Builders to complete my file. At the time, feeling that it was an unnecessary expense I decided against purchasing the service.
The charge for the DUNS number only was $99. After providing him with my credit card information, right then and there he gave me my number.As the end of January 2006 approached, I rushed out and made my first purchase, setting up a net 30 account with U-line, which is a shipping supplies company.
In February, I made purchases with Nebs, Quill and Fedex-kinkos. U-line reported very fast and was the first trade line to appear on my business reports.
Net 30 accounts, by the way, are considered your ‘no Personal Guarantees’ accounts or no “PG” accounts that must be paid in full within 30 days. These accounts are usually your very first business trade lines, and are critical to establishing long term credit accounts and relationships. Manage them wisely!
After observing for a couple of months that I only had one trade line reporting on my Dun & Bradstreet business report, I decided to call back Dun & Bradstreet to purchase Credit Builders. I thought that the accounts that I had already made purchases with, my Office Depot card, Nebs, Quill, Fedex-kinkos, could be used as credit references for the Credit Builders service.
The representative told me that my assumptions were wrong; these accounts automatically report to Dun & Bradstreet, every month. (After a couple of months some of these accounts were not reporting).
“You need to provide me with references who normally do not report to Dun & Bradstreet, and those references must have a DUNS number as well, “she explained. “For example, your accountant, your attorney, an equipment leasing company, subscriptions service, your landlord, advertisers, etc.”
Four months later, I received a Paydex 80 with four trade lines reporting. Then shortly after verifying payment history with the other references that I had submitted to Dun & Bradstreet for the Credit Builders service, about three weeks later, D&B completed their investigation of the four accounts that I had provided to them and my business credit report was updated, now showing 8 positive trade lines. It has been observed that businesses with 5 accounts or less reporting, is considered having light business credit. What you want to do – your goal - is to eventually build up your business reports with between 7 to 10 accounts, with at least three of them showing over 90 days of positive payment history. This should be accomplished BEFORE applying for business credit cards.
If your Dun & Bradstreet business report is “light” with only a handful of accounts, like mine was showing only four accounts, the Credit Builders service can beef up your business reports by adding additional trade lines to your account. They can also add "age" by reporting the date when you first began service with the vendors, thereby making your company appear stronger and better established.
Now, please understand that there are entrepreneurs who have received their Paydex score without the need to purchase Credit Builders. Some will tell you that you can do it yourself because they have done it themselves. They will suggest that you “save yourself some money” and don’t purchase the Credit Builders service. And of course you can do it yourself. You can also make your own clothes, pull your own teeth, and repair your own automobile....get my drift? When a service that will save you tons of time and effort is very reasonably priced and professional, why not take advantage of it? If you’re looking to speed things up and you have trade references that normally don’t report to Dun & Bradstreet, then paying for the Credit Builders service is well worth it, in my humble opinion.
For example: You have advertise with someone (let’s say a newspaper) for over a year and have paid them $2,000. However, the advertiser doesn’t report to Dun & Bradstreet and the company does have a DUNS number. This would be an excellent account for Credit Builders.
They would post the one year payment history to your Duns & Bradstreet business report which gives you age of a year and the high credit limit of $2,000.This will only help your company get approval for higher lines of credit down the road. Note: You’re already spending money with a person or company for products or services, however, that particular person or company doesn’t report to the business bureaus. In these instances it is in your best interest to have it reported by purchasing Credit Builders.
However, if you don’t have any trade references to provide to Dun & Bradstreet, then there is no benefit in purchasing Credit Builders. Doing it yourself is the only way to go.You have established your Corporation or LLC. You also have your business Tax I.D or EIN (Employer Identification Number). Your business telephone number is listed In 411 directory service and finally you have opened a business checking account.
Let’s move on. You’re good to go.HERE’S WHAT TO DO NEXT
Ø Call Dun & Bradstreet and pay for a DUNS number
Some will tell you to say you’re a contractor for the government in order to get it for free. Do the right thing. If you’re not a government contractor pay for the number. This is small stuff.
Ø Apply for four net 30 accounts.
At this point it’s a waiting game.
You have to give your net 30 accounts time to age. Unfortunately, you will age too, but hopefully like a fine wine, not a stodgy old account!
Basically, what you will do is make a purchase with all four of your chosen net 30 accounts each month and then pay the invoice in full at least 10 days before the due date each month. This is establishing your track record. A mistake here can be rectified, but it will set you back months in terms of establishing credit.
After the second month check all three of your business reports, Dun & Bradstreet, Experian and Equifax to make sure your net 30 accounts are reporting your positive payment history. Follow up as necessary to make sure this payment history is accurately reported. Anytime around your third, fourth sometimes the fifth month, you should receive a Paydex 80 from Dun & Bradstreet.
Everybody celebrates once reaching this important milestone. Champagne, anyone?1. Uline – Shipping supplies company. www.uline.com ---1800 295-5510
2. Reliable – Office supplies company. www.reliable.com 800 735 - 4000
3. Tech Depot – www.techdepot.com ---800 625-9866
4. Sears commercial- www.sears.com
5. Franklin Covey –www.franklincovey 800 819-1812
6. Rapid formswww.rapidforms 800 257-8357
7. Grainger-Industrial supplies – www.grainer.com 800 323 - 0620
8. Gempler – Outdoors products – www.gempler.com 800 382-8473
9. Aramark uniform – Uniforms service – www.Aramark-uniform.com 800-3883300
11. Mens Wearhouse – Mens apparel – www.menswearhouse.com 800-851-6744
12. Intersate Batteries – www.interstatebatteries.com 866 842-5368
13. Deluxe checks – www.deluxechecks.com 800 328 0304
14. DHL- shipping - www.dhl-usa.com – 800 225-5345
15. Circuit city – www.circuitcity.com 800 - the city
16. Ready to work – posters shop www.readytowork.com
17. Global computers- hard & software - www.globalcomputers.com 800 446-9662
18. Quill – Office supplies company. www.quill.com 800 982 - 3400
19. Global Industrial-industrial supplies – www.globalindustrial.com 888 978-7759 Even though I had only been operating for a few months in business and had therefore built up only a few months of business credit history, I decided to jump in the water, you know, at least get my feet wet, and apply for a Citibank business credit card online. I was inspired to do this because of a business credit forum I’d been studying for several weeks. Many entrepreneurs were talking about how they gained instant approval for $25,000. I thought: Since I now have my Paydex 80, with four accounts reporting positive payment history, maybe I can get approved as well!
So, online I went. As I turned to my PC and feels a rush of adrenalin watching my computer screen saying “processing please wait”, I was hoping for an instant approval too. Instead, I got a message that stated: You will receive a letter in the mail in 7 to10 business days. Ugh!
Well, that definitely was no "instant approval." It appeared that I was declined. The adrenaline seeped away, a reverse surge that left me feeling frustrated. A couple of weeks later, I received the "decline" letter in the mail. Shucks!
Back to the drawing board . . .
They had pulled my Experian personal credit report showing that I’d had two late payments that were several years old. That was apparently the reason for the decline. Some members on the credit forum said that their personal credit report was not accessed.
Why had mine been? I thought, Oh! Well. I’ll just press forward with my plans.In retrospect, I think my personal credit report was access because of the newness of my business. In addition, I only had four trade lines reporting credit history of $50 here, $72 there, $120 there, $68 there. This is a small time payment history, not impressive at all, and to top it off, under five months of age.
If I had looked objectively at the age of each account, I would have probably seen that two of these trade lines has a one-month payment history, another one had two months payment history, and the last one had three months of payment history.
No wonder they pulled my personal credit report.