Briggs Law Group is a boutique Phoenix law firm that specializes in corporate legal
counsel services, business transactions, representation before government agencies,
and campaign finance and election law advice.
Photo Credit: 401(K) 2012
Using a personal credit card to fund your small business is a risky venture because you could be held personally liable if someone decides to file a lawsuit against your business. To protect your personal assets and credit rating, all of your business expenses need to be kept separate from your personal finances. This means you must establish credit in your business’s name.
Try to make it easy for lenders and creditors to validate your business information so you can begin building a solid credit report for your company. These four steps will get you started:
After you’ve followed the four steps listed above, you are ready to begin applying for business credit. If your new company has literally no credit history, the easiest way to begin establishing credit is often through your regular vendors. Find a vendor that will extend a line of credit so you can finance purchases for your business. This not only conserves your company’s limited cash, it also begins building your business’s credit history.
Establishing credit is a crucial component in the growth of your young company because businesses typically have a much higher credit capacity than individuals.