The Business Credit and Financing Guide
I. Business Credibility: Make Sure Your Business Meets Lending Criteria Before You Apply Lenders and creditors have rather specific requirements of what they want to see to approve you for credit and financing. If you meet these criteria, you often get approval. But if not, you’ll get a denial. You’ve probably been turned down before, due to not meeting one of these criteria. But in this section we reveal the lender’s secret formula for approval. So you know you’ll get an approval before you apply. The first step in building business credit is to ensure you have a business entity set up. Per Wikipedia: “A business entity is an entity that is formed and administered as per commercial law in order to engage in business activities, charitable work, or other activities allowable. Most often, business entities are formed to sell a product or a service.” Setting up your entity is what allows you to do business legally with your state and the Federal government. So it’s an absolute necessary first step. Any entity can build business credit. But to remove personal liability, choose an entity like a Corporation or LLC (Limited Liability Corporation). After your entity is set up, next you must get your EIN number from the IRS. An Employer Identification Number or EIN (also known as Federal Employer Identification Number or FEIN) is the corporate equivalent to a Social Security number. But it is issued to anyone, including individuals, who must pay withholding taxes on employees. To do business legally, you must have an EIN.
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