The reading level for this article is All Levels
Using a Limited Liability Company (LLC) is one of the most preferred ways to go about the setup of a new business. LLC’s are relatively easy to set up, do not require formal meetings and minutes, and have a much looser organizational system than their corporate cousins. Once you are set up, you will want to learn how to begin building business credit for a new LLC so that you can take advantage of the many benefits that LLC’s and the business credit system have to offer.
This begins with a Dun & Bradstreet profile. Once you have set your business up with its own accounts and some trade lines and have registered your LLC with the IRS, you will want to do one of the two following things: apply for one or more SBA loans, or start hunting down some business credit cards. Like personal credit, the fastest way to begin building business credit is to borrow money and repay it in a timely fashion. SBA loans are very useful because they are offered at relatively low interest rates and are particularly accommodating to start-up businesses that most banks will not even consider. Business credit cards enable you to build credit consistently with each purchase; while your first business credit cards may be challenging to apply for, they are definitely worth it in the long run.
Now that you have begun building business credit for a new LLC, you can start focusing on building your business. This is, of course, the most essential key to a good Paydex score; business credit is mostly influenced by the profitability and longevity, however these things are hard to establish on their own without the readily available help from the business credit system.