Thread: Business Credit

Here is the part every one hates to speak of, the finances of your company. But mostly i wonder about your companies credit. What have most of you done to increase your companies credit rating or to ensure that your limits are higher. I have a 780 but dont feel comfortable attaching that to my company in the event that anything happens. So what have you done?

Your going to have to sign personally these days, really no other option

The big three credit bureaus generally rate individuals, not businesses. If you want your business to have credit, you have three options.

Moody's, S&P, and other financial firms can credit rate your business. This is very expensive, as they pour over the books, and it's typically reserved for large public companies that want to issue debt (bonds, commercial paper, etc.).

Personally guarantee the loan. The banks want small businesses to do this for the exact reason you suggest. They don't want you to be able to just walk away from the loan.

Establish repeat business. If you bank with a given bank long enough, they may, based on the banking history and assets, allow your company to have a line of credit without personally underwriting it. But the only way you're likely to get here is by having other business and loans with the bank which are personally guaranteed.

Yea, i was kind of trying to get away from it cause as of now i do my credit line with the company for purchase contracts. But was hoping to get to a point where i no longer have to risk my personal assets. I guess im just going to have to keep on keeping on with the risk.

If you have repeat business and assets in the company name (like real estate) you might be able. I would ask your banker at what point they would extend business credit without your name on it. If you don't have any physical assets they can lien, though, it's very unlikely. They don't want you to liquidate the company, move corporate assets to yourself, and then walk away from the company that's just a pile of debt.