Finance & Banking
U.S. Post Office Box instead?
4. 5.
business name?
6. 7.
Have you registered & asked for an Employer Identification Number (also known as an EIN) from the IRS?
8. 9.
If your answer to the first question was a sole proprietorship, partnership or trust;
Have you established a business checking account?
Is your business telephone number recognized by directory assistance?
Are your incoming telephone calls professionally answered in your
Are your commercial permits, li- censes and registrations current?
Does your business have a physical address, or are you trying to use a
I urge you to re-establish your company as a corporation or LLC. I’m not going to provide you with legal advice, but many CPAs and attorneys highly recommend LLCs (Limited Liability Corporations) as a way of protecting your personal assets & estate... in the event of any lawsuits being filed against your company. As a sole proprietor, your personal as-
sets are at direct risk of seizure or forfei- ture when faced with most types of legal action. Additionally, if you are applying for business loans in a corporation’s name... most lending institutions will not require you to provide any personal guar- antee!
A corporation can still face difficulties
applying for business credit, if it has been in business less than two (2) years or had previous credit problems reported against it. Here are some ways to fix these prob- lems.
I cannot stress this enough... you MUST have a physical address (not a PO Box) if you want to establish a solid busi- ness credit rating. The same thing is said for telephone numbers & the way incom- ing phone calls are handled. Would you lend money to a company that does not appear to have a physical address or docu- mented telephone number? And, don’t forget to always keep your commercial permits, licenses & registra- tions current... and always keep copies of these documents in case a potential lender asks for this information.
Business checking accounts are a must.
Again, this proves stability to your poten- tial lenders. Here are a couple of tips for you, in case you’ve had any checking ac- counts closed by a financial institution. Pay off the outstanding balance (if any) that’s being reported by the bank, or open a checking account at a bank or credit union that doesn’t use the ChexSystems credit reporting system. Most credit unions don’t use ChexSystems, and you can always find a list of banking institu- tions in your area that don’t use ChexSys- tems... by simply doing a search on Google, Yahoo or MSN. Small business credit ratings are
tracked using your business name, busi- ness address and employer identification number (EIN). You can apply for & re- ceive an EIN at the IRS’s website (irs. gov). You can also call the IRS, but be pre- pared for long waits. Then you’ll want to obtain a D-U-N-S number from Dun & Bradstreet, the larg-
76
www.blackeoejournal.com The Black E.O.E. Journal
„ Purchasing a “shelf corporation” or “aged corporation” that’s been in good standing with your State government (for longer than 2 years) can drasti- cally improve your chances for small business loan approval.
„ You can attempt to repair your busi- ness credit rating by writing dispute letters to Experian or Dun & Bradstre- et, which isn’t always possible.
„ Some corporate credit experts will help you find, select & purchase an established “shelf” or “aged” corpo- ration, some of which already have strong credit ratings established... saving you alot of hassles!
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