As the topic of business compliance, being the foundation for building business credit, comes up over and over, it raises the question, what compliance items apply to you and your business? The fact is, there are hundreds of items each with a few conditional items… which represents the potential for thousands of compliance checks possible. Narrowing this down is the job of a business credit professional. Having your business evaluated for simple and specific compliance checks has to be done. Learn more about what these checks mean here.
The principle behind credit compliance is simple… Incorporate, establish, license and operate your business properly. Sounds easy enough, right? Lets start off with the beginning, Incorporate. Form your business in your state and qualify your incorporated business in the states that you conduct business. Secondly, establishing your business with the IRS and a bank by being issued a TAX ID number and opening a business checking account. License your business and obtain all necessary permits. Does your business sell food, tobacco, alcohol or own equipment? There are hundreds of questions you should ask when seeking the proper licenses and permits for your business. Companies Incorporate can obtain all of your business licenses for a small fee.
Operating your business. Take this from the lender or creditor’s position. Do you want to lend money or open up credit lines to a home-based business that is being operated with a cellular phone number, no website or email address and isn’t listed in any business directories? That doesn’t sound like a business that is here to stay. Creditors want to see a strong presence and demonstrations that the business owner is serious about the company. What does a successful company look like? What are the properties of a successful business in the eyes a lender?
Insurance plays a role too. All kinds of insurance, right down to you personally. Would you want to lend money to someone that didn’t have health coverage, or family medical? Probably not, simply because you would know that medical treatment for one’s self or family would be senior to a loan payment. So showing that the business owner is insured eases a lender’s mind that in the event of medical expenses, the business owner still has resources to pay the obligations of the company. Business insurance, company vehicle coverage, all kinds of organizational and operational matters are scrutinized. Of course the more money you seek, the more your business will be reviewed. You probably won’t get to this level seeking an office supplies retail credit card, however a bank line of cash credit will want to see these things… as well as revenue that assures debt service.
Take it from the professionals who know how to build your company foundation for credit building. The compliance phase will ensure that your business is ready for the stage of credit you are seeking… all the way up to Jumbo loans from business banks.