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Business Credit for Corporations
- Thread starter Oasis
- Start date
PressurePros
New Member
Initially a new corp will have credit only as good as it's signers. If you have lousy personal credit, so does your company. Start the same way anyone would if establishing new credit. If the bank has your articles on file, they will sometimes extend you 100% additional credit on a secured deposit business credit card. (eg. You deposit $500 they give you a one thousand dollar credit line)
Scott Stone
New Member
Banks want as many signers as possible on any credit that you might get. I have loans that were set up 100% as corporate credit, and it still hit my personal stuff because I signed the note for the corporation.
Scott
Scott
Flue Steam
New Member
If you want it seperate you need a "C" corp. A "C" corp is a completely seperate entity, no finances, liabilities or credit is shared.
An "S" corp shares your personal finances and therefore also your credit.
I would recommend you spend some time with your accountant to get what you are looking for.
An "S" corp shares your personal finances and therefore also your credit.
I would recommend you spend some time with your accountant to get what you are looking for.
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A C-Corp, and S-Corp are very similar in there articles and protection and liabilities just as a LLC. The main difference is how they are tax, and how many managing members they are able to have. Depending on what entity you choose they have different tax structures. My attorney said the bank would require the same personal guarantee with any entity. The only thing I can think of is setting up an escrow account with a bank for collateral, or a CD, which was advice from another member. After you have a very study pay history than you can transfer everything to a corporate card or lines of credit.
Oasis Roof Care, Inc
Elliot Reposa
Oasis Roof Care, Inc
Elliot Reposa
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Flue Steam
New Member
You have your attorneys take on the differences, now call your accountant.
In my opinion you did the right thing by becoming a S corp. Take Grants advice and talk to your accountant. My next question to you would be why wouldn't you be willing to personally guarantee a loan. No lending institution is going to give you a loan without some sort of guarantee to back it up. If you don't want to personally gaurantee the loan it shows no confidence in you business or your ability to pay the money back. My advice to you is to apply for a business credit card with a limit of $500 and max it out every month and pay it off every month. Every 2 months try to up the credit line you will be surprised at how fast they will up your credit line. I did this on one of my business cards and now have a $25,000 line of credit on that card. I hope this helps you.
Thank you that helps. I don't have a problem with a personally guarantee. I am just trying to have everything go through my corporation. I guess that is not possible unless you are a very mature company, and even then you have to fight the personal guarantee situation. Here is a interesting fact. Most start up companies that have investers usually buy a "shell corporation" for the purpose of having established credit. They cost about 100-200k per shell. This is also popular with companies that go IPO.
Thank You
Oasis
Thank You
Oasis
Dun & Bradstreet all you need to know about business credit.
www.dnb.com
You have to be creative to achieve your goal lawyers and accountants are taught traditional methods you have to find the gray line .
Terah
www.pressurewashingpros.com
www.dnb.com
You have to be creative to achieve your goal lawyers and accountants are taught traditional methods you have to find the gray line .
Terah
www.pressurewashingpros.com