Building business Credit For Australian businesses
From startups to established businesses, the need to build credible business credit is a very real one for many companies.
1. Incorporate your business
Though it looks very obvious, there are many examples of entrepreneurs who get the drive to start a business and overlook this critical step. First, decide on the type of business you are planning to register. Are you looking for a Limited Liability Company (also called an LLC), a corporation or looking for some more unique options like the Wyoming DAO incorporation entity. Once you decide on the type of business you want to be registered as, proceed to register the business.
2. Get an Employer Identification Number or EIN
An Employer Identification Number (or EIN) is a number issued by the Internal Revenue Service. It is a number that identifies your business in government records and also one that is required by banking institutions to confirm your company’s identity. Acquiring an EIN as an American resident is very easy, simply log on to the IRS site and request for one. If you are a company owner but not resident in the USA, the process is rather different. You shall need to file a SS-4 document and send to the IRS.
3. Open a business bank account
it is important to separate your personal finances from that of the business. Open a business bank account that meets the needs of your business. and keep records.
4. Apply to Duns & Bradstreet for a DUNS number
Duns & Bradstreet is a multinational credit agency targeting businesses. They report on your creditworthiness, your trade lines, how regularly you pay suppliers and more. Many lenders reply on Duns & Bradstreet as one of the sources for their decision one whether to lend or not. There are many suppliers who reply on Duns & Bradstreet as well.
5. Apply for some Net30 accounts
Net30 accounts are accounts set by businesses that provide you with services or products and allow you 30 days to pay. This is often a good start in the credit building journey. Some of the popular providers of Net30 accounts are Quill and Uline. It is important to find out which credit agencies that supplier reports to and how regularly they do so.
6. Pay your suppliers on time
Most lenders are hesitant to lend to people who have not been faithful to previous lenders. Do make every effort to pay your suppliers on time because they will report it to the credit agencies.
7. Use a Kivovo Enhanced or Kivovo Pro account
A Kivovo Enhanced or Kivovo Pro account help in building business credit because they offer a net30 and Net60 account with some of the highest amounts on the market. Many Net30 providers offer a few hundreds but Kivovo offers Kivovo Enhanced clients USD 3000 reported trade line and Kivovo Pro clients get USD 5000 monthly reported trade line.