Secrets

to
Business
Credit
Monica Main
Why Business Credit?
 Unsecured Business Lines of Credit and Unsecured
Business Credit Cards
 To Use for Property Down Payments Mostly
 Can Be Used to Start or Expand a Business
 Best Commercial Mortgage Interest Rates on
Investment Properties
 Save Yourself “Personal Hits” to Your Personal Credit
with Business Credit Cards, Car Leases and Business
Loans
 Gain Access to MUCH LARGER AMOUNTS of Credit By
Using Business Credit Instead of Personal Credit
 Banks Give Businesses LARGER Amounts of Credit vs. Much
Smaller Amounts to Persons Applying, Even When Based on
Personal Credit Profile/FICO Score
 Your Required
Basic Foundation
 A Personal “Mid” FICO Score of 680 or Above
 A Mid-FICO of 700 and Higher is BETTER
 No Recent Bankruptcies
 Within the Past 5 Years
 No Recent Foreclosures
 Within the Past 5 Years
 No Judgments or Charge-Offs
 Within the Past 2 – 3 Years
 No Mortgage “Lates”
 Within the Past 2 – 3 Years
Without Good
Personal Credit…
Personal Guarantee

 Required for Loans and Credit Cards

 Expect to Have to Offer Personal Guarantees for
Most Legitimate Loans, Credit Lines and Business
Credit Cards
 Should NOT Be a Problem If You Are “Credit
Responsible”
 Some Smaller Trade Lines and Credit Cards Do Not
Require a Personal Guarantee
 These Are FAR AND FEW Between These Days
Why Not Just Use Personal
Credit Instead?
 Banks and Credit Card Companies DRASTICALLY RESTRICT
What an Individual Person Can Qualify for a Signature
Line of Credit or Unsecured Credit Card
 Businesses Are KNOWN to REQUIRE Cash for Operations
 Individuals DO NOT Need This Kind of Money for “Day to
Day” Living Unless They Are in Financial Distress
 Banks Won’t Lend to People They Believe Are in Financial
Distress
 Even Someone With an 800+ FICO Cannot Qualify for Six-
Figure Signature Loans UNLESS They Offer Equal or
Greater Collateral
 Meanwhile Creditworthy Businesses Can EASILY Qualify for
This Type of Money BECAUSE It’s Needed for Basic Business
Operations
How to Start the Process
 An Incorporated Business Entity is Required to Get
Business Credit Started
 It Needs to Be Its Own “Entity”
 Cannot Be a Sole Proprietorship Using Your Personal Social
Security Number
 S Corporation is Recommended; NO LLCs UNLESS You Are
In a Legitimate Partnership With a REAL Person
 IMPORTANT NOTE: All Corporations Are “Born” C Corps; To
Convert A C to an S Corp, Simply File IRS Form 2553 AFTER
Receiving (1) Your Corporate Resolution Paperwork and (2)
Getting Your EIN
 Must Be in Your HOME STATE
 If You Are Foreign to the United States, You Can Consider
Nevada, Delaware or Wyoming
 Do Not Use an Out-of-State Corporation If You Live in the
United States
 This Will Backfire on You!
 Some Tips
 If Your Personal Credit Needs a Lot of Work, You
Can Start an S Corporation NOW and Consider
Getting a Secured Business Credit Card
 Wells Fargo Offers the ONLY Secured Business Credit Card
Right Now By a Recognizable Bank

 Choose a Corporation Name That is Bland, Non-

Descriptive, and Cannot Directly Identify Any
Specific Type of Business
 It’s Best to Have a FUNCTIONING Business
That’s Generating Revenues (for LATER
Purposes, Will Be Described Later)
 If You Have a Business That’s Generating Revenues of ANY
Kind (Especially One That’s YEARS Old), Consider Getting a
DBA With a “Generic” Name So You Can Use Those
Revenues to Bolster Your Business Credit Building Activities
A Quick Note About DBAs
 Stands for “Doing Business As”
 Is Filed in YOUR COUNTY
 Is Very Easy to Get
 Is Recommended If You Dislike the Company
Name You Have OR Have a Functioning Company
With a Specific Name
 For Example, If Your Company Name is “Franks
Flowers Inc.” Then Consider Getting a DBA ON the
Corporation of Something General Like “FF
Direct”
 Should Be Something You ALWAYS Get for an
Operating Business as an Asset Protection
Measure
The Importance of an EIN
 Stands for Employer Identification Number
 Is the “Social Security Number” of a Corporation
(Which is its Own Entity, Much Like a Person)
 Is REQUIRED for Your Company to “Be Its Own”
Entity
 Get Your EIN After Receiving Your Corporation
Resolution Paperwork By Going to www.IRS.gov
 Is Required to Build Business Credit Through DNB
and Experian Business
 Is Needed to Open a Bank Account and to File
Corporate Taxes
 Is “Tied” to You Via Your Social Security Number
 Only Your Bank and the IRS Know You Are “Tied” to the
Company EIN
Building Business Credit Comes
in 2 Options or “Levels”

Level 2:
THE HARD
WAY
Very Difficult, Costly
and Time-Consuming to
Level 1: Set Up But Allows for
Access to MUCH LARGER
THE EASY AMOUNTS of Credit!
WAY
Very Cost-Effective to Pull
Off But Credit Building is
LIMITED to Smaller Amounts!
The 2 Credit Building Entities to
Know About…
Dun and Bradstreet (DNB) Experian Business
 Requires a Fee to Set Up a Solid  Just Like Your Personal
Credit Profile Experian Credit Report
 Becoming Less and Less Reputable  Based on Reported Credit
Every Year Under Business EIN
 Most Business Creditors Do Not  Much More Reputable
Report to DNB  Doesn’t Require a Fee to Use
 Has a Paydex Number  Many Creditors Report to
 You Have to Do the Work of Experian Business
“Reporting” Your Creditors on Automatically Without You
Your DNB Profile Doing Anything
The Problem with “Level 2”
or Building with DNB…
 Requires a 2-Year (or Older) “Seasoned” AND Functioning
Business
 A Functioning Business Files Tax Returns Each Year and There MUST
Be Financial Activity
 Those Who Have to Purchase a 2-Year Shelf Corporation Will Have
to Pay a VERY COSTLY AMOUNT OF MONEY to Do This

 Requires a Brick-and-Mortar Business Address OR a Virtual

Office
 This ALSO Requires a Phone Number That is Piped Into the Physical
Location

 Requires You to Buy Their Credit-Building Service Which

Ranges in Price; It’s Currently $99 a Month and Can Run
Upwards of $12,000 for Their “Specialty” Package
Without Gross Business
Receipts or Tax Returns…

“FUN” FACT:
Banks Have Become VERY STRICT in Lending on ANY
Large-Sum Unsecured Loans (Personal or Business)
Since the Near-Banking Collapse in 2008!
Here’s the Good News…

This is a HUGE Misconception in the

Business Building Process!
Here’s What You’ll Focus On
Instead…
 Getting Revolving Lines of Credit (Starting VERY SMALL
and Working Your Way Up)
 A “Open” Revolving Line of Credit is DIFFERENT Than a
“Closed” Loan Because It Stays Open and Even Grows in Size As
You Keep Using It and Paying It Down/Off

 Getting A LOT of Unsecured Business Credit Cards

 Getting Trade Accounts Only WHEN You Actually Need
to Use Them for Business Purposes
 Using Your Business’ Credit to Get a Mortgage for
Investment Properties
 And That’s It! Pretty Simple!!
 “New”
Business Building
System
Just Like With Your Personal
Credit…

You
Social Security #

Credit

Usage
Reported
Works the Same with Business
Credit…
Your
Corp EIN
Biz
Credit

Usage
Reported
And Now It is Thanks to
Experian Business!
What is “Good” Personal
Credit?
 No Bankruptcies in the Past 5 Years
 No Foreclosures in the Past 5 Years
 No Judgments and/or Charge-Offs in the Past 2 – 3 Years
 Personal Mid-FICO at 700 or Higher
 Current Accounts (Making Payments ON TIME)
 At Least ONE Auto Loan or Lease
 At Least ONE or TWO Credit Card Accounts
If You Don’t Have “Good”
Personal Credit Right Now…

Most Credit Can Be COMPLETELY or

MOSTLY Cleaned Up Within 6 to 12
Months…No Matter How Bad It Is!
In a Nutshell, At This Point
You’ll Need to Have…
 S Corporation in Your HOME State
 EIN
 Employer Identification Number
 Business Street Address
 Not Your Home Address and Not a PO Box
 Business Phone Number
 Can Be a 2nd Cell Number or a Vonage Phone Number
 Separate Business Email
 Can Be a Gmail or Yahoo Address
 Business Bank Account
 Wells Fargo if You Have Poor Personal Credit
 Bank of America if You Have Good Personal Credit
Next…

www.DandB.com
If Your Business is a Year Old
Already…
 Your Company Will Already Be in the DNB System
 You’ll Already Have a D-U-N-S Number in Their System
 They’ll Sell You on a $99/Month Plan
 If You’re NOT in Their System, They’ll Sell You on a $229 Plan
(Or An “Upgraded” Option of $599)
 GET THE FREE D-U-N-S Number
 This Can Take Months But…That Doesn’t Matter At This Stage
of the Game
 Also, DO NOT Get Their “Plans” (Including the $99/Month) At
This Point
 You’ll Do This Much Later On
What to Do to Start Building
Business Credit RIGHT NOW!
Poor Personal Credit Good Personal Credit
 Get a Secured Business  Get a Costco Business
MasterCard from Wells American Express
Fargo  Open a Business Bank Account
 Get a Fleet Business Gas at Bank of America and Apply
Card for Their Unsecured Business
Credit Card
 Chevron is
Recommended  Cash Rewards MasterCard

 Work on Fixing/Rebuilding  Apply for a SMALL Revolving

Personal Credit to Exceed Line of Credit for Your
Business (Starting at $25,000)
a 680 Mid-FICO (Ideally
700+) Before Proceeding  They Will Want You to State
Further That Your Business is 2 Years
Old With the Current
Ownership
Importance of “Real”
Credit Accounts
 A “Real” Business Credit Card is Provided by a
Credit Card Company (to Start) that Furnishes a
BUSINESS Credit Card
 The Credit is Reported Directly to Your Experian
Business Credit Profile By Using Your Company
EIN
 This Quickly Builds Business Credit Through
Experian Business Credit Reporting System
 Trade Accounts Don’t Work for This Purpose
(Such As Accounts with Uline.com, FedEx, Etc.)
 My Business Credit Card
Recommendations
 American Express (Costco Business AMEX)
 You MUST Go to Costco IN PERSON to Get This Card
 CitiBusiness
 Offers Some of the HIGHEST Credit Limits for Business
 Bank of America Platinum Plus
 Also Offers Some of the HIGHEST Credit Limits, Especially to
New Business
 Chase Ink Business
 Capital One Sparks Business
 The WORST Business Credit Card, Offering the LOWEST Credit
Limits
 Discover Business
 US Bank
 Also Provides Low Credit Limits But Is MUCH BETTER Than Capital One
A “Trick” With
American Express

Get the First Costco Business

American Express Card, Use It for 6
Months, Then Call AMEX to Get ANY
OTHER CARD You Want Thereafter As
a Second AMEX; I Suggest the Delta
AMEX (Business Version) If You Fly A
Lot OR Their Blue or Plum Cards
AMEX Keeps Your Profile In Their System and Will Give
Additional Cards Based on Payment Performance of the First
Card; Costco AMEX Business Card is the Easiest AMEX to Get
 There Have Been MANY LAZY STUDENTS Who Try
Applying for a Business AMEX Online and They Are
DECLINED; This is What They Get for NOT Following
Instructions! Get Off Your Ass, GO TO COSTCO
PERSONALLY, Go to Membership Services, and Apply
for the Costco Business AMEX Card!

Once You’re “IN” With AMEX, You’re IN for Life!! You Can Get Any
AMEX Card You Want Thereafter Every 6 to 12 Months!
A Word of Caution About
Getting a “Regular” AMEX…
 The “Original” Set-Up for AMEX Was to Pay the Balance
Off Every Month
 Later They Introduced a More Revolving Credit Style of
How Credit Balances Are Handled, Exactly Like Every
OTHER Type of Credit Card Out There
 Still, AMEX Has Their Original Cards Where the ENTIRE
Balance Must Be Paid Each Month on Its Due Date
 This Gives LESS Flexibility for a Business Owner; This is
Why I No Longer Use My Platinum AMEX Card and Why
You Should NEVER Apply for One When Given the Chance
 Stick With Other AMEX Cards That Allow You to Carry a
Balance IF You Need to!
You’ll Be Focusing on Building
with Experian Business
 Unlike Using the DNB System, Experian Business is Built
AUTOMATICALLY Simply By Using Business Credit Cards and a
Small Revolving Line of Credit
 All Credit Activity is Reported Through the Credit Bureaus
 It’s Build Through LOTS OF ACTIVITY and TIME, Just Like With
Personal Credit
 Once You Get a Strong Handle on Building Through Experian
Business (With Multiple Unsecured Business Credit Cards and
a Small Revolving Line of Credit), Only THEN Should You Start
Building with DNB (Dun & Bradstreet)
 Secrets of Revolving
Lines of Credit
 Most Banks Will Want to See That Your Business is AT LEAST 2
Years Old
 Until Your Corporation is 2 Years Old, You May Not Be Ready for
This Option
 A “Small” Line of Credit is $25,000
 Wells Fargo Offers Lines of Credit as Low as $10,000
 Smaller Lenders Online Will Offer Smaller Amounts
 Most Banks Will Want to See Collateral for Lines of Credit At or
Above $100,000
 They’ll Also Want to See Company AND Personal Tax Returns
 Start With the Smallest Allowable Amount Then INCREASE As
Time Goes On
 Awesome Thing About Revolving Lines of Credit is That It’s
ALWAYS Available As Long As You Keep Paying It Off
 Increasing It As You Show Credit Worthiness is MUCH EASIER
Than Going Out for a $100,000 BLOC Right Off the Bat
How to Use Unsecured Credit
Cards As Liquid CASH…
 You’ll Have Access to MUCH HIGHER Credit Limits When You
Apply for Business Credit Cards Than You Will for Personal
Credit Cards, Even With the SAME Personal FICO Score
 Be Sure to Tell the Bank What Your PROJECTED Business Income
Will Be Instead of Your ACTUAL Business Income When Applying
 Getting Unsecured Business Credit Cards is MUCH EASIER Than
Getting Business Loans or BLOCs
 Even Though Both Are Unsecured, There is Much More Red Tape
Attached to BLOCs and Business Loans
 When You Get Unsecured Business Credit Cards, You CAN Access
Liquid Cash

Here’s How…
Two Ways…

and
“Convenience” Checks Can
Be Expensive So…
 PayPal is a MUCH Better Option to Save on Fees and
Higher Interest Rates
 If You Have a Merchant Account for Your Business, You Can
Use This As Well; Simply Charge Your Own Credit Card
 For a PayPal Account, It’s Best to Have a Separate
Account, Preferably That of a Spouse or Other Trusted
Family Member
 This Person Will Send a “Money Request”
 You Can Also Send This Person a “Gift”
 It is Charged to Your Business Credit Card Just Like Any
Other Charge
 The Cash is Deposited Into the PayPal Account Which Can
Then Be Transferred Into a Bank Account You Can Access
 It’s Not Any More Complicated Than That!
How to Save Yourself Thousands
of Dollars in PayPal Fees!
 Typically PayPal Will Charge 2% to 3% in Fees; By Using Their
Limit of $10,000, That’s $200 to $300 in PayPal Fees to Tap
Your Business Credit
 There’s a Little-Known PayPal “Fee Aversion” Trick Called
PayPal Business Payments
 Instead Have Your “Trusted” Partner Set Up An Account
Through Freshbooks (at Freshbooks.com)
 They Will Also Set Up Their PayPal Account With Them
 PayPal Transaction Fee: Only 50 Cents Per Transaction
 Freshbooks Fee: They Charge $19.95 Per Month, Offering
the First Month Free
 An Alternative Company is Harvest (GetHarvest.com) Which
Offers the Same Set-Up As Above Except That It’s Only $12
Per Month Instead of $19.95 Per Month
Most People Don’t Understand
This Type of Leverage…
 You Can Get a TON of Unsecured Business Credit Cards
With Good Personal Credit, Even With a NEW Business
 Right Off the Bat, Most People Can Get About 3 to 5
Unsecured Business Credit Cards, Totaling $50,000 to
$75,000
 Instead, People Falsely Assume They Have to Get BLOCs or Loans
to Gain Access to This Type of Liquid Business Cash

 To Know How to Convert That Into QUICK LIQUID CASH is

a Powerful Form of Financial Leverage
 You Can Then Use This Cash for Down Payment Funds
Back on Track…
When – and ONLY When – You Fit
the Following Criteria is When You
Can Begin Building DNB Credit…
 You Have a Personal Mid-FICO At or Higher Than 720
 You Have an S Corporation That is 2 Years or Older
 Your Corporation Has Filed Taxes for the Last 2 Years
 There is Gross Receipts Filed on Those Returns (And Not
Just Showing $0) for Those Last 2 Years
 There MUST Be SOME Profit in Those 2 Years
 You Have Decent Personal Tax Returns Filed for the Past 2
Years (Meaning That You’ve Shown an Income of $50,000
MINIMUM)
 You Have a MINIMUM of 3 Business Trade Accounts (Which
Do Not Include Credit Cards)
 This Includes Vendors Such As Uline, Printers, Shipping Companies,
Etc.
Get a DNB Profile Set Up
 Then Keep Adding
Trade Credit Accounts
Any Business Credit Card or Business Loan That Asked
for Your D-U-N-S Number SHOULD Automatically Report
All Credit Activity to DNB Without You Having to
Painstakingly Add It to Your DNB Profile
 Use Your Accounts and
PAY Your Accounts On Time
Build Paydex Score to 85+
Seasoning and
Consistency is
the Key to
Success
 Best Method:
Stick With Experian
Business Building Model
Get Your 1st S Corporation
Then…
Use the Credit
for 6 to 12
Months
Start a 2nd S Corporation
Then…
Repeat the
Process for
6 to 12
Months
How to Use Your
Corporation to
Buy Real Estate
 Umbrella S You
Corporation in
HOME STATE with 2 Entities in the
Built Business Credit Property LLC:
Umbrella S
Corporation and YOU

Property in Which
You’ll Form an LLC in
the State Where the
Property is Located
Why This Set Up?
 Credit to Buy the Property Will Come From
BOTH You and Your Umbrella S Corporation
 Better Credit = Best Mortgage Interest Rates
 Property LLC Must Have 2 Entities in Order to Be
IRS Compliant
 IRS No Longer Recognizes a “Single-Member” LLC
and Will Not Allow You to File As Such When Tax
Time Comes Around
Before Setting Up With DNB,
You Need:
 S Corp or LLC
 EIN
 Business or Virtual Office Address
 Business Phone Number
 Business Email Address
 Toll-Free Number (Optional)
 3 Trade Accounts Up and Running for 30+ Days
DNB Rules About Your
Business Address (That Don’t Apply
for Experian Business Building)
 Best Business Address is a “Brick and Mortar” Address
 If You Can “Piggyback” Off Someone Else’s Business Address, DO IT!
 Just ADD a Business Phone Line to that Address (Even If You NEVER Use It)
Under Your Company Name
 You Can Always Permanently Have That Phone Line on “Forward” to Another Phone

 Second Best Option is a Virtual Office Address

 Choose a Virtual Office That Has a BLEND of Business by Doing a
MapQuest.com Search
 DNB Will Do This EXACT Search

 DO NOT Use Your Home Address (Same Applies for

Experian Business)
 DO NOT Use a Post Office Box Address (Same Applies
for Experian Business)
DNB Rules About Your
Phone Number:
 No More Magic Jack (Can Be Used for Experian Business)
 No Longer Works
 No Vonage (Can Be Used for Experian Business)
 Doesn’t Work Anymore Either
 You Need a REAL Business Line
 No “Voice Mail” Line Either
 No Cell Phone Line (Can Be Used for Experian Business)
 You Can Have a REAL Business Line in Your Virtual Office
 You Can Always Forward This Line ANYWHERE
DNB Rules About
Your Email Address:

 Shows “Professionalism” in Your Organization

 You Can Get a Domain Name and Email Address
from GoDaddy.com
 Should Have a “Neutral” Email Such as
[email protected] or
[email protected]
 You Should Forward This Email to ANY Other
Email You’d Like
DNB Rules About the
Toll-Free Number:
 This Will Enhance Your Credibility (But Is Optional)
 An “800” Number is Best
 Get an Ugly Number

 You Can Get a Toll-Free Number for $5/Month Instantly

at www.Kall8.com
 You Can Forward This Toll-Free Number Anywhere
 Make Sure You Forward It Somewhere Where Someone Will Answer the Phone
LIVE with Your Company Name
Rules About Your Profile:
 Use a Business Address…ALWAYS
 Don’t Put Your Home Address in Then Later Change It
 Use a Business Phone Number
 Make Sure Your Annual Gross Revenues are Accurate
 Gross Revenues Under $1,000,000 Per Year Unless You
Can Prove Otherwise
 Keep Dollar Amounts “Odd” Rather Than Exact

 Make Sure You Keep Your Operation “Reasonable”

 Employees Under 10
 Keep Your “Start” Year Exact to Your Corporation Start
Year; Hopefully It’s 2 Years Old or Older
Recent DNB Findings:
 Need $229 Option to Go to an “Active” Status
 Need $99/Month Program to Add in Trade References
 Will Take a “Few Days” to Give the Company a Paydex
Score
 Can “Buy” Additional References…But I’m Waiting for Now
 Make Sure You Can Answer THESE Questions…
 Company Ownership (You…or You and a Partner?)
 Your Title (You Are ALWAYS the CEO)
 Your Address and If It’s a “Commercial” Location (YES!)
 Size of Building/Unit
 Who Do You Sell To? (Wholesalers, Retailers, General Public?)
 Number of Employees INCLUDING Yourself
 PROJECTED INCOME!!! (I Said $2.3 Million for 2015)
Other Business Credit Resources:

 Experian Credit
 Equifax Credit
 TransUnion Credit
The Only One With
Credit Access is…
Business Credit Cards & Accounts
for Both Experian and DNB:
 Office Depot
 Staples
 Office Max
 Capital One Business
 CitiBusiness
 American Express Business
 Discover Business
 Gas Cards
 Chevron, Shell, 76, etc.
 CSI-BusinessMastercard.com
Business Credit Cards & Accounts
Only DNB:
 Uline.com
 FedEx
 UPS
 Quill.com
Accounts Not Accepted by DNB
or Experian Business:

 Utilities
 Water, Gas, Electric, Etc.

 Phone
 Including Vonage, AT&T, Cell Phone, Etc.

 Answering Service
 This Falls Under the “Phone” Category