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Thought there are many different forms of credit available to businesses, there is one to which nearly all entrepreneurs overwhelmingly apply: business credit cards. They are the most common forms of credit, and the most notorious for getting people and businesses over their heads in debt. Business credit cards can, however, be an excellent tool for convenient financing and credit building, and in this article we will tell you what you can do to help apply for your first business credit cards.
You will need first to either incorporate or form a Limited Liability Company. Business entities are what get filed with the credit reporting agencies, not individuals. You may want to talk to a lawyer to find out which of these options is correct for you; if you want stability and long term growth and plan on taking your business public one day, you will probably want to incorporate. If you want flexibility and ease of use, you will probably be better off with a Limited Liability Company. Either way, once set up with your business entity, you can file your business with the IRS and set up a credit profile with Dun & Bradstreet, at which point you will have an account to which you can apply business credit.
Cards come in a range of varieties that are similar to personal credit cards. Business cards are often marketed with low introductory APRs and special benefits or cashback offers. Which one is right for you is purely a matter of taste, just make sure that you are well versed in the fine print of your credit card offer and don’t get stuck with an unfortunate interest rate hike out of nowhere.
You can build business credit initially in much the same way that you build personal credit, however there is more weight on business profitability and stability that there is on simply paying your bills on time. However, that does not neglect the use of thrift, as you can apply business credit card strategies in much the same way that you use personal credit card strategies.