4 Ways to Build Business Credit With Bad Personal Credit

Credit card with dollars

Nothing can be more frustrating than dealing with personal credit issues while you’re trying to launch a new business or grow an existing one. If you are looking for ways to begin developing the creditworthiness of your business with bad personal credit, you’ve come to the right place.

First things first, it’s important to not merely concentrate on building business credit; you should also initiate a personal credit recovery plan so you can improve your own individual credit ratings.

Both business and personal credit play a critical function in all elements of your life. By improving your personal credit you simply open up more financing opportunities for you and your business.

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Here are four ways to build business credit with bad personal credit:

Trade Financing – Throughout the preliminary phases of the business credit building process, one type of credit a business owner with personal credit issues can obtain is business-to-business credit, also known as trade financing. While trade credit is a form of short-term financing with usually net 15 to net 30 day terms, it allows a business to establish a positive payment record with suppliers while conserving cash flow.

Secured Business Credit Card - An additional form of credit is revolving credit via a business credit card. However, with bad credit you would certainly need to start with a secured business credit card which requires a security deposit of $500.

Fleet Cards – A secured fleet card is another form of credit you can acquire with bad personal credit and generally requires a very small security deposit of $300.

Revenue based financing – There are additional financing programs such as revenue based financing where credit scores in the 550 range can even enable a business to secure financing. This type of financing is based more upon business bank deposits rather than credit scores. It’s crucial to bear in mind; the trick to developing a creditworthy company is in utilizing a correct mix of credit kinds such as short-term funding, revolving credit, installment loans, leasing, etc.

So there you have it, four ways to begin building business credit with personal credit challenges. Remember, once you establish payment history, maintain a low debt to credit utilization on individual business accounts, and work on restoring your personal credit, you and your business can be in a much better position to acquire additional financing sooner than you think.

Marco Carbajo is a nationally recognized expert on building business credit and consumer credit restoration. He is founder of the Business Credit Insiders Circle, the nation's leading step-by-step business credit building system providing access to vendor lines of credit, fleet cards, business credit cards, funding sources and lenders that report to all the major business credit agencies.