Are you a new small business owner who needs money to get your startup off the ground? If you’ve been trying to avoid taking out a business loan, you may be approaching it all wrong. At least, that’s the conclusion of a study published in the Journal of Corporate Finance.
Here are some steps to take to build your business credit rating from scratch:
1. Get a business credit card and use it to make startup purchases such as equipment, supplies, and inventory. The study notes that you can typically get a business credit card based on your personal credit history. Be sure to pay off the balance on time every month; your goal is to enhance your credit rating, not get over your head in debt.