We recently sought out CorpNet.com CEO, Nellie Akalp to help us gain some clarity surrounding the importance of building, monitoring, and maintaining business credit. Nellie is no stranger to helping entrepreneurs as CorpNet.com is an online legal document filing service, assisting entrepreneurs Incorporate or Form an LLC. We’d like to extend Nellie’s helping hand…
You’ve said in the recent past, “Most commercial banks and traditional lenders are reluctant to loosen their purse strings until you’ve proven yourself with a strong credit history. But it’s difficult to develop that good record when no one will lend to you in the first place”. This is both of our customers’ biggest quagmire. What do you think are the first three baby steps to take in order to jump through this catch-22 hoop?
1) Get your business legal by incorporating your business or forming an LLC; this can be done really quickly and affordably by using a reputable filing service such as CorpNet.com at a fraction of the cost of what an attorney charges.
2) Get your D&B D-U-N-S® Number and make sure you update your profile regularly.
3) Have the business apply for a business credit card to start building credit and establish the business. Most often the easiest route is to apply for an AMEX business card.
If you had one sentence to explain the most important distinction between business credit and personal credit, what would you say?
A business line of credit is any type of credit (revolving or not, including bank accounts) applied for and under the name of the business e.g. ABC, Incorporated vs. a Personal line of credit is any type of credit (revolving or not, including bank accounts) applied for and under the name of the individual e.g. Jon Doe as an individual.
At what point in your past did you decide that serving business owners was the path for you? (This is that defining moment request where the music swells and tears flow.)
I was raised in an entrepreneurial environment so I always knew I wanted to be an entrepreneur myself. When we started our first company helping other entrepreneurs in their journey to success, it was then that I just realized where my true passion lies. After we sold that company to Intuit in 2005, I dabbled in other industries like fashion, but the fulfillment just wasn’t there like it once was. I had to re-visit my goals, and decided to start CorpNet.com where we assist entrepreneurs file documents to help their new businesses get off the ground. I couldn’t be happier with that decision!
Once you’ve obtained business credit, what do you find are some of the most important factors regarding maintaining that business credit, and verifying your businesses’ character and identity?
Make sure your information is updated continuously on your DUNS platform. Pay your bills on time. Make sure you have a system in place where you can calendar items as to when your tax filings are due and when your corporate filings are due so that your business remains in good standing and in corporate compliance.
For those businesses that have already set up business credit, maintained a superior rating and made timely payments, what slice of advice can you throw their way to make sure they stay on top of the game?
Do not delegate your finances and the management of your finances to anyone else – stay on top of it yourself! Have a budget. Be on top of your accounting on a monthly basis and pay your bills on time. I would also suggest having quarterly meetings going over all accounting and credit history so you know exactly where everything is at throughout the year.
What are you and your business doing to stay on top? Please share other questions you may have for Nellie and we’ll do our best to get them answered! See you on Main Street.