HOW TO FORM AN LLC AND BUILD BUSINESS CREDIT FAST
- A great resource for your loan once you have completed the steps below. You can read the details here:https://blog.stacksource.com/the-sba-504-loan-for-real-estate-31b0d249270c Apply here: https://www.stacksource.com/sba-loans
- Once you have executed on all the items below. May I suggest you look at Investing outside your local market, if there are a lack of deals in your area.
- The next thing I would say is focus on one thing that will deliver the best outcome.
- My I suggest setting up an LLC. You can do it for free here (avoid all the upsales of EIN’s etc: https://www.incauthority.com/ysf
- You will need an operating agreement, get if free here: https://www.llcuniversity.com/
- Must have an EIN to establish your business credit, Get it free here: www.irs.gov type in EIN in the search bar.The first result should be the link.
- Go to www.sba.gov type in license and permits click on state and federal licensing. This will take you through what is needed for your state.
- Open your business bank account. You will need your 1. Personal ID, 2. EIN /TIN 3. Articles of Incorporation. You get this after filing with the state for your LLC.
- Make sure the Bank you do business with is part of the Small Business Financial Exchange (SBFE). An organization of non affiliated banks that share your business transactions to Equifax. See list of banks here: https://s3.amazonaws.com/thinkific/file_uploads/120182/attachments/7f7/5c4/544/SBFE-Bank-Recommendations_%281%29.pdf
- Establish a minimum low 5 bank rating which is 10,000 for three month. This strengthens your case when you apply for a loan in the future (without a sponsor).
- Get your D&B D-U-N-S number to establish your business credit profile. Get it free here: https://www.dnb.com/duns-number/get-a-duns.html
- Setup your IUpdate tool after you get your DUNS # at: https://www.dnb.com/duns-number/view-update-company-credit-file.html
- Establish your PayDex score so vendors know what type of risk you are. Paydex rates your businesses likelihood of paying on time from 0-100. Shoot for a score of 80 or higher to put you among the elite.
- Do not buy any suggested D&B products offered outside your free D&B # & IUdate tool.
- Get SIC & NAIC codes that are used for standard classification of your business. You want to make sure your business is classified correctly so lenders know how to correctly assess the risk of your company. Get it free here: www.naics.com/search
- Check & Update and merge your Experian business credit Files (BIN files) and establish your Intelescore that ranges from 0-100.
- Go to www.businesscreditfacts.com Make sure company name doesn’t exist.
- Then go to www.smartbusinessreports.com to find out if your company has an existing BIN number. Must spell company name exactly as you have entered it with the state.
- The only way to get a BIN number with Experian is to do business with a Vendor that has been verified with Experian. That vendor will then report your company to Experian.
- Get a certificate of deposit (CD loan) secure loan that reports to your business credit. You deposit a specific amount of money that you can’t take out for a specific amount of time. Maybe six months, maybe one year. You then tell the bank you want to take a loan out against the money in the secured account. If you don’t have the money, borrow from a friend. Then pay them back immediately after you get the loan. You then pay yourself back to generate business credit. In business credit, if you pay on time and you pay early your credit score is going up. This helps you set your business credit foundation