By: Joshua Finley

Andrew Imbesi, a name synonymous with success in the world of business funding, is known for his practical expertise in helping individuals and businesses secure substantial credit. Having helped numerous people secure substantial business funding, Andrew’s approach debunks common myths and provides transparent, actionable advice. In this article, we explore some prevalent myths about business credit and uncover the truths behind them, as shared by Andrew.

You Need a Dun & Bradstreet Number to Get Approved for Business Credit

One of the common myths is that a Dun & Bradstreet (D&B) number is essential for obtaining business credit. According to Andrew, this is not necessarily true. While a D&B number can help establish credit with certain companies, it is not a requirement for business credit approval. The crucial factor is your personal credit score, which banks will assess when considering business credit applications. Maintaining a solid personal credit score is more critical than acquiring a D&B number.

Net 30 Accounts Are Essential for Business Credit

Another widespread misconception is that net 30 accounts are a prerequisite for business credit. Net 30 accounts are vendor lines of credit that require payment within 30 days of purchase. Andrew emphasizes that these accounts are optional for obtaining business credit. The primary factors that banks consider are your personal credit score, business structure, and income. Establishing good personal credit and demonstrating financial stability is more critical than acquiring net 30 accounts.

You Can Obtain Business Credit with Poor Personal Credit

Many people believe they can secure substantial business credit even if their personal credit could be better. Andrew clarifies that while some options exist for those with less-than-perfect credit, substantial business credit typically requires a good personal credit score. A credit score of at least 700 is generally necessary to access favorable terms and significant credit limits. Those with lower scores may find it challenging to secure business credit without addressing personal credit issues first.

Steps to Improve Personal Credit for Business Credit

Improving personal credit is a crucial step in enhancing business credit opportunities. Andrew offers several practical tips for boosting your personal credit score. First, request higher credit limits on existing personal credit cards. This can improve your credit utilization ratio, a critical factor in credit scoring. Ensure all your bills and debts are paid on time. Late payments can significantly impact your credit score. Keep older credit accounts open to benefit from a more extended credit history. A mix of credit types, such as credit cards, installment loans, and mortgages, can positively influence your credit score.

Advantages of Business Credit over Personal Credit

Understanding the benefits of business credit over personal credit can motivate business owners to transition. Andrew highlights several advantages. Business credit allows you to separate your business and personal finances, simplifying accounting and tax preparation. Using business credit does not affect your personal credit utilization ratio. High utilization of personal credit cards can lower your credit score, but this is fine with business credit cards. Business credit cards often come with higher credit limits than personal credit cards, providing more flexibility for business expenses. Many business credit cards offer superior rewards programs, including cash back, travel rewards, and other perks tailored for business use.

The Realities of Business Credit Application

Instead of addressing common questions, let’s dive into the real-life scenarios and practical steps in the business credit application process. Understanding these can bring a sense of relief, demystifying the journey and setting realistic expectations. Most banks require minimal documentation, primarily your Articles of Incorporation and EIN letter. Tax returns and bank statements are rarely needed, making the application process straightforward. Banks predominantly focus on your personal credit score when assessing business credit applications. Ensuring your personal credit is strong can significantly enhance your chances of approval. Establishing relationships with banks can be beneficial. Opening business checking accounts, maintaining a healthy balance, and demonstrating consistent financial activity can positively influence your credit applications. Applying for business credit requires strategy. Spreading applications across different credit bureaus can minimize the impact on your credit score and maximize your chances of approval.

Transitioning from Personal to Business Credit

Making the transition from personal credit to business credit involves several strategic steps. Andrew outlines the key actions that can facilitate this smooth transition, instilling you with the confidence to take the leap. Even if your business is new, you can start building a business credit history by applying for business credit cards and using them responsibly. Utilize business credit to invest in your business, but ensure you manage repayments diligently to maintain a good credit standing. Regularly monitor your personal and business credit reports to ensure accuracy and promptly address discrepancies.

Final Thoughts

Understanding the truths behind business credit myths can significantly enhance your chances of securing the credit your business needs. Andrew Imbesi’s insights reveal that a robust personal credit score, a solid business structure, and strategic planning are the keys to successful business credit approval. Focusing on these areas can unlock substantial business credit and set your enterprise on a path to growth and success.

If you’re interested in learning more about securing business credit or need personalized assistance, Andrew and his team are ready to help you navigate the process with confidence and expertise.

Disclaimer: This content is for informational purposes only and is not intended as financial advice, nor does it replace professional financial advice, investment advice, or any other type of advice. You should seek the advice of a qualified financial advisor or other professional before making any financial decisions.

Published by: Holy Minoza