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Getting Started with Business Credit
Manage episode 436630916 series 3430754
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In this solo episode, we dive into practical ways to build and protect your business credit, helping you set up a strong financial foundation. We share tips on separating business and personal credit, avoiding high-risk loans, and laying the groundwork for securing a traditional line of credit that can support your business as it grows.
In this episode, Ryan discusses:
- Separating business credit from personal credit
- The challenges of obtaining traditional business credit for new businesses
- Risks associated with non-traditional business funding options
- Steps to build and improve business credit over time
Key Takeaways:
- Business owners should carefully review their existing credit cards to ensure they are not personally liable, as this could expose them to significant personal financial risk if their business fails.
- It is advisable to secure a home equity line of credit before starting a business, as most banks will not extend traditional business loans or lines of credit to companies that have been operating for less than two years due to perceived risk.
- Business owners should avoid high-interest, non-traditional funding options like hard money loans and instead focus on building their business credit through microloans or secured credit cards, which can establish a solid payment history.
- After reaching two years in business, owners should present financial documents such as tax returns and profit and loss statements to a trusted banker to secure a traditional line of credit, which is crucial for maintaining cash flow and supporting business growth.
"Everyone’s goal should be to have a business line of credit that they can draw on when needed." — Ryan Kimler
Schedule your free 1:1 Profit Breakthrough Session with Ryan here: https://go.oncehub.com/profit
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Email: ryan@netprofitcfo.com
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Show notes by Podcastologist Andy Santiago
Audio production by Turnkey Podcast Productions. You're the expert. Your podcast will prove it.
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