Companies Incorporated Credit Division Publication - Page 1 of 6

Business Credit Building Blocks

By: Companies Incorporated

1-800-Company

Companies Incorporated is the Nation’s leader in Business Credit services and Corporate Credit building programs for small businesses. This document is a FREE business credit guide on how to establ ish a credit profile for your company, create true and separate credit under your business’ identity and Tax ID number, often without the use of personal guarantees or your personal credit scores. For more information on business credit and our programs, you can contact our off ice and speak to a credit special ist during normal business hours Pacif ic Standard Time.

Copyright © Companies Incorporated 2008 – All Rights Reserved - 28015 Smyth Drive Santa Clarita, CA 91355

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Business Credit Business credit is having a credit profile under a legal business entity, such as a corporation or limited liability company. The business’ credit profile is much like a personal credit profile, however the business uses a TAX ID number similar to that of an individual’s SSN. Business credit is grown in a similar fashion and credit is scored on your credit accounts, payment activity and the overall credit worthiness of your business. Scoring systems and ratings are provided by credit reporting bureaus such as Experian and Equifax as well as Dun and Bradstreet and follow similar principles as personal credit scoring. Although the business credit scoring has different ratings and scales, the fundamentals are exactly the same; having a solid business entity that is well organized and established, creditors reporting positive payment activity and lenders reporting to the bureaus regularly will grow your company’s credit profile. Where do you start and how is this accomplished?

Building Blocks of Business Credit

This guide offers the information you need to begin building business credit the right way.

So we’ll walk you through the steps and process of preparing your business to build credit, creating your business’ credit profile

and getting credit under your company’s TAX ID number.

Your Business Business credit falls into two categories. First is business credit that is solely associated to your legal business entity. The second type is both under your business’ name and your personal name. With the second type, both the individual and the business are responsible for the performance of the note. With the first type of the business is unable to satisfy obl igations, there isn’t any l iabil ity protection afforded to the guarantor of the credit terms. So to start build ing pure business credit, you’re going to need a business that is formally organized, specif ically a corporation or l im ited l iabil ity company.

Business Structure Options For Building Credit You will need a legal business structure with an EIN (Employer Identification Number) issued from the IRS as well as a business checking account. If you are not incorporated with a Tax ID number and checking account, you can speak with a business credit counselor and incorporation specialist that can assist you with your needs immediately by calling 1-800-COMPANY.

Forming a Corporation or LLC is easy and takes a few days to a few weeks, depending on the state, to have the documents filed in order to begin the credit building process. You can also purchase a company that is already incorporated that is between 2 to 90 years old that affords you an instant entity and opens doors to lenders with age requirements for businesses.

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Once you have established your legal business entity and have your identification number issued with an open checking account, the next steps are to build the identity of your company.

Separate Business Credit Identity Though you own the company, your corporation or LLC is legally separate from you for l iabil ity purposes. Lenders will be looking at all things related to your business, such as contact information, location and l istings. The first step in preparing your business for credit profile building is to ensure that your business identity is truly separate from you. The goal here is to open the doors to as many lenders as you can. For example, some lenders do and some don’t grant credit to businesses that are home-based… so naturally, for the lenders that require this, you want to meet lender requirements for a business location. Phone numbers and email addresses follow the same formal ity. So let’s walk through the checkl ist here on how we are going to set up your business identity so that you have the best chances of growing your credit profile quickly and without l im itations as to where you can apply for credit.

o These steps will be the foundation that you will rely on during your business credit building process. It is pertinent that these simple tasks be completed when you begin applying for credit with various lenders.

o If you s tar t apply ing fo r bus iness c red i t without

per forming some or all of these tasks, you could take much longer to develop a credit profile or not at all.

o Your business identity will be scrutinized by lenders

and these items will all stack up in your favor if they are completed and lead to successful credit profile growth.

Legal Business Name The name of your incorporated business is very important. Don’t use the words “Realty,” “Real Estate,” “Investing” or investing derivatives such as “Investments.” Instead use “Management,” “Enterprises,” or “Services,” for example. In addition, when building business credit, selecting a name that is not in use by another company, in another state that already has credit scores (good or bad) is a necessary first step. If you have a company that is filed in Cal ifornia and there is another entity f iled in Texas where the business owner has credit activity, occasionally could confuse lenders, though this usually not a major concern. Entity names are recorded at the state level, while business credit reporting bureaus are at the national level, which means your legal entity name could be registered in another state. Don’t worry - there are tools that we give you so that you can check for this.

If you are already incorporated and you f ind that your entity name is not suitable for build ing business credit, it’s ok, we can f ile an amendment for you with your state’s office and change your legal business name – for more information cal l 1-800-COMPANY.

We can help check every State’s office, Dun and Bradstreet, U.S. Trademark office, domain availabil ity as well as business directory l istings for businesses using your name as a D.B.A.

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During these entity name searches, at any time you find your company’s name in use or any other reason it should be changed, you start the process over until you have a legal business name that is free and clear and ready to build a credit profile with.

Dun and Bradstreet Credit Profile Search We have a paid subscription to Dun & Bradstreet, so we can search their business credit profiles for you. We can perform a search nationwide for your business entity name. If a business already has credit, or worse, has bad or high-risk credit with the same entity name As your business, you could have a long hard road developing your business’ credit profile.

Domain Name Search Some lenders will look to see that you have an offic ial business presence and will look at your email addresses and website. You should try and register www.yourcompanyname.com and have business email accounts. Using yourcompanyname@hotmail.com isn’t as credible as an offic ial domain for your business. Lenders are seeking identif iers that your business is here to stay and this is a check that some will perform. Search your favorite domain name registrar and if your business name is available, register it and begin using an off ic ial business email address.

411 Directory Listings Search business directories, such as the Yellow Pages, Super book and the rest for your business name. You m ight find that another business has registered your entity name and is marketing or conducting business through a D.B.A. (doing business as). You are going to have to create your own directory l istings and 411 inclusion as part of the business credit preparation process, so f irst, you want to search large directories for your business’ name being used.

Stacking Business Credit Building Blocks

If you have performed all of the corporate credit preparation formalities, you should have a formally organized business structure with a clear name to build credit with, an EIN number and a business checking account.

The next step is going to be checking all of your information so that when a lender checks, they find the right stuff immediately.

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Legal Business Addresses All of your business records should match identically. This means that your state fil ing and publ ic records, bank account documents, IRS f il ings, directory l istings and physical business address are all the same. This includes suite numbers and the syntax, so #100, unit 100, suite 100 and set 100 are not identical.

Physical Business Address Required You wil l have to have an actual business address, not a PO box or your home. Remember, lenders are l ook ing for credibili ty. Depending on the location, you can often choose an off ice program, executive suite or another option for building business credit. For more options, call 1-800-COMPANY and speak to a counselor for free.

Starting Your Business Credit Profile The f irst step is going to be gett ing a DUNS number from Dun and Bradstreet. This is a business identif ication that is used for credit rating and reporting by D&B. Experience and Equifax credit profiles will automatically be created as soon as the first lender reports any paym ent activity for your business.

Getting a DUNS Number Contact 1-800-COMPANY, and, as part of our credit-building process, we can apply for a new DUNS number. You will receive your number promptly. You don’t have to expedite or pay for faster processing because the rest of your credit profile building is going to take 60, 90 or 120 days to complete, so we recommend getting a DUNS number for and contacting us for the rest of the credit profile process.

Applying For Business Credit If you have followed our business credit build ing blocks preparation process and have completed the tasks, your business should have the fol lowing:

1) Clear Entity Name 2) Incorporated as a Corporation or LLC 3) EIN Number from the IRS 4) Business Checking Account

Your business is ready to begin performing the 26-step processes, including applying for business credit with lenders. Now the work begins and you can start contacting providers of business credit and apply for Net 30 vendor trade lines, retail credit cards, and bank loans and cash lines of credit. Before you do this, we have some more information that will help you on your way. Call 1-800-COMPANY for details.

5) Business Name Domain Registered 6) Official Business Email Addresses 7) Physical Business Address 8) Business Directory Listings

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Before You Apply For Business Credit You have to start thinking like a lender. Ask yourself some questions and lets walk through a scenario. You want to have credit with providers that make sense for your business. If your business is a consulting company; you may seek credit with com puter hardware manufacturers or lease copiers and printers. You may also have a company vehicle lease with a f leet fuel card from a gas company, or possibly a business credit card for booking travel expenses. Credit that makes sense is important. If you were a lender reviewing a credit report for a consulting company and found that small lines of credit were open from a jewelry store under the business name or a trade line with a packaging m anufacturer, th is might indicate that the business sought credit with “anyone” and “everyone” that would approve it. Simply having credit is one thing, however you want to make sure that anytime you build your business credit profile, you are taking signif icant steps towards your goal. This means applying for credit at the right places for your business.

Business Credit Building Program

∞ Support with the application process ∞ Help with choosing a credit provider ∞ Assistance with lender requirements ∞ Working with banks for business loans ∞ Getting your Paydex Score above 75 ∞ Choosing the lenders that reports quickly ∞ Business Credit Report analysis ∞ Hands-on support throughout the whole process

That’s exactly what you get when you choose to work with any of our business credit programs. We offer many levels of service and you can elect us to build your credit profile, assist with lender searches and the appl ication process as wel l as monitoring your credit score and reports.

Call 1-800-COMPANY for details

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Get Started Today You can have the nation’s largest business credit program provider assist you with the entire credit build ing process - trusted since 1977. We have access to lender’s who are wil l ing to work with our cl ients due to the fact that they understand that businesses that invested in our corporate credit program are more apt to demonstrating responsibil ity with their business’ credit. You can have your corporate credit profile created in days and be approved for l ines of credit in just a few months.

1) Computer Leases and Equipment Purchases 2) GM Vehicle Leases 3) Bank Loans and Cash Lines of Credit 4) Start up business capital 5) Invest in Real Estate with Corporate Credit

Don’t hesitate, lenders do not want to g ive money to businesses that are in the need of cash flow, build your credit prof ile now so that when the time com es you need to rely on credit, it’s there.

1-800-COMPANY