How Do I Establish Business Credit: Everything You Need to Know

by Keith Huckabay

Separate business and personal finances to maintain accurate records.

You're standing in the loan queue at your local bank. You can't help but bite your nails and pull your hair, wondering if you'll score a business loan.  

You finally get to the loan manager only to discover you can't get the loan due to poor credit. 

Such scenarios are more common; up to 20% of small businesses fail to secure financing due to poor business credit. 

Fortunately, building a solid business credit score can be the key to unlocking access to the financing you need to fund core business operations, grow, and succeed. 

Here's how to achieve this goal. 

Why Does Maintaining a Strong Business Credit Matter?

Maybe you want to invest in the trending crypto, restock inventory, rebrand your business, or treat your employees for a well-done job. 

Whatever you need funds for, a strong business credit matters for the following reasons:

  • Access and quick approval to financing when you need it. A strong credit score indicates a lower risk as a borrower, getting you approved faster whether you're looking for a loan, a line of credit, or even lease equipment. 
  • Power to negotiate more favorable payment terms with your vendors and suppliers. You could enjoy longer payment windows, lower interest rates, or discounts for early payment for improved cash flow management and stronger relationships with your suppliers.
  • Improved credibility and reputation in the eyes of potential partners, investors, and customers. 
  • Improved partnerships and collaborations with other businesses. A solid credit score signals your business's financial stability, responsibility, and trustworthiness, building robust relationships and attracting more business opportunities.
  • Easier access to resources that can help your business grow, such as PrimeWay's Resources. 
  • Access to lower insurance premiums, saving you money on insurance services and costs.
  • Get approved for rental agreements, potentially leading to lower rental rates.
  • Increased business value.

Easy Steps to Establish a Solid Business Credit

Building a solid business credit isn't rocket science, but only if you do it right.

You've already established your business and categorized it as a sole proprietorship, partnership, limited liability company, or corporation. 

By now, you've already registered the business with your secretary of state to establish it as a legal entity, allowing you to obtain the necessary legal documents, such as licenses and permits. 

From there, follow the following steps, easy: 

Check to Confirm Your Credit Score 

While building solid business credit is paramount for your operations and growth, you can't begin to build unless you know how it actually is.

Begin to establish business credit by checking your credit score to get an idea of where you stand and what you need to do to improve your score.

You can check your credit score for free through several online services, including TransUnion, Experian, and Equifax. Knowing this score can help you strategize how to improve and set goals for building credit.

Obtain an Employer Identification Number (EIN)

An EIN is a unique nine-digit identification number the IRS assigns to your business. Think of the EIN as your business's Social Security Number. 

An EIN is your business's corporate ID number, and it matters for several reasons:

  • Filing taxes for your business
  • Opening a business bank account
  • Hiring employees
  • Legal compliance
  • Applying for business permits and licenses

Fortunately, you can obtain an EIN for free through the IRS website. 
Maintain a positive cashflow to strengthen business credit.

PrimeWay Has Many Options for Your Business To Get Up and Running

With flexible options, get the money you need to start and grow your business. Let our experienced business team help you with your business journey.
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Resources to Help Your Financial Growth

Financial Guides

We all have goals we are trying to achieve.

What are yours?

  • Paying off debt
  • Putting your child through college
  • Buying your dream home

PrimeWay has many resources to help you. Start your self-learning with PrimeWay Resources.

How Do I Establish Business Credit: Everything You Need to Know

Establishing business credit can take time and effort. Learn how to build your business credit fast and access the financing you need to fund your business.

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Author Bio

Keith Huckabay

Take 3 parts Internet Junkie, 4 parts Broadway Fanatic, 1 part News Addict, 2 parts Comedy Enthusiast, and mix it with some ice in a blender and you get Keith. He is highly energetic and brings just a little bit of quirky to all he does. When he’s not marketing his pants off for PrimeWay, Keith likes to hold court with his friends over a nice dinner or traveling new places.

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