Improve Access to Business Credit for Your Small Business

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When building your initial business credit profile, make sure to meet credit issuer criteria. Since you don’t have established business credit and your personal credit needs to be under scrutiny, the application’s content becomes the sole factor for approval. Therefore, it must be strong. Have you ever applied for a business credit card and received immediate approval from an automated system? That’s because lenders and credit issuers maintain a secret set of requirements you need to meet to get approved for business loans. Your ability to secure electronic approvals or face rejections depends on your company’s fundability. Fundability factors include your business entity type, the kind of business phone number you have, whether your business phone number appears in specific directories, your business address type, your business licensing, the consistency of your business records, the quality of your business lending references, the status of your business bank account, and the setup of your business website and email, as well as your EIN, DUNS, and BIN numbers. Understand that even if you meet all these criteria, most business loan applications get rejected due to fraud concerns, not compliance issues. Lenders combat fraud by cross-referencing their business and application information with databases like LexisNexis, Dun & Bradstreet, Experian, The Small Business Financial Exchange, Equifax, and ChexSystems.

A major reason for application denial is a mismatch between the application’s name and the legal name registered in state records. Always use your exact business name for every application. If you’re using a DBA, make sure it aligns with your full corporate name. Another viable approach to navigate such challenges is by considering a shelf company to streamline your business processes. Keep your business name consistent across all documents, certifications, and bank statements. Your company name could pose an issue if your business operates in a high-risk industry. High risk usually means a higher chance of workplace injuries or a business model that involves more cash transactions than most. To improve your chances of funding, avoid using a high-risk industry name on your application.

Install a true physical business phone line for maximum reliability, especially if you have a store location. Lenders view toll-free or 800 numbers as a sign of business credibility. Never list your personal cell phone or home phone number as your business number on any website.
Set up your business properly by ensuring you:

Voice Over I.P.

Consider using Voice over I.P. services from providers like Freedom Voice or RingCentral as a strong alternative to a physical business phone line. Once you secure a business phone number, also obtain a fax number to boost your company’s credibility in the eyes of lenders. Use this fax number for receiving vital documents and sending in credit applications. Services like Freedom Voice and RingCentral offer cost-effective fax numbers that closely match your business phone number. After setting up your business phone number, acquire a toll-free number to enhance your credibility with lenders and credit issuers.

411 Listing

Most lenders and credit issuers won’t tell you that you need to list your company’s phone number in the 411 directory. Not being listed in 411 can signal to lenders that your business needs to be well-established. To get a 411 listing, make sure search engines like Google, Bing, and Yahoo publicly display your phone number. Go to for a fast and simple way to get a 411 listing.

Business Address

Most lenders and credit issuers will likely deny you if you operate your business from home and use your home address on loan and credit card applications. Lenders employ specialized algorithms and tools like Google Street View to flag your address as residential, leading to a denial of business credit. Using a P.O. box or UPS address on your application will also result in a denial. To increase your chances of approval, use a physical business address. A virtual address serves as an alternative to a traditional business address.

Virtual Business Address

Consider opting for a virtual address if your business lacks a physical address. Reputable office buildings like Regis, Alliance, and Da Vinci offer virtual addresses, allowing you to rent a mailing address and a conference room. Opting for a virtual address eliminates the need for high rent or a lease. Even if your business isn’t physically located in the building, having a space in a reputable location can enhance your company’s professional appearance to lenders. Ensure that this address aligns with your business records both online and with the secretary of state.

Regus offers mobile offices with features like meeting rooms, executive lounges, a discount program, and mail routing and handling services. They provide furnished offices equipped with high-speed broadband, and you can choose between glass offices or coworking spaces. For precise pricing on office suites, call the number provided on their website. Coworking spaces serve as the most budget-friendly option. Regus operates offices globally, with several well-known locations in European countries.

Alliance offers a range of services, including live receptionists, meeting rooms, a business address, and optional mail routing. They also provide a local or toll-free business phone number, unlimited local and long-distance calls, email voicemail, custom greetings, and an online control panel. Alliance operates globally with notable locations in Mexico, the United Arab Emirates, the United Kingdom, and the Netherlands. Prices range from $50 to $125.

Davinci offers live receptionists, video messaging, meeting rooms, and event facilities as part of its virtual office services. The company has a global presence with notable locations in Mexico, various European countries, South Korea, Hong Kong, Japan, and Brazil. Prices vary.

Business Website

You need a professional-looking website and email address for your business. Choose a domain name ending in .com or .net and opt for reputable hosting services like GoDaddy instead of Wix or Weebly. You can purchase a domain and set up a website in just one day; larger hosting companies can help you if you need to be tech-savvy. List your business on search engines such as Yelp, Citysearch, and Zagat, as well as in 411 directories. Enable Secure Sockets Layer (SSL) technology to establish an encrypted connection between your server and a client. When applying for a loan, note the age of your website’s domain and ensure it aligns with your WhoIS domain listing. Your website’s search engine ranking and directory listings can also enhance your loan application. Update your website’s design, backlinks, and practices to present a positive image of your business to credit issuers. Accept multiple credit cards on your website to enhance credibility. Ensure consistency across your public filings with the Secretary of State, business licenses, and other public records, matching them with your website’s information. For added trust, display seals like McAfee, Verisign, and TrustE on your website. Maintain a strong social media presence; lenders assess your business’s credibility based on your social media reviews, ratings, check-ins, news coverage, web engagements, likes, and followers.

Business Email

Lacking an email address or website can make your business appear untrustworthy. Ensure your email address shares the same domain as your website. Opt for generic, professional names like or Steer clear of using free email services like Gmail, Yahoo, or AOL for your business account. If you prefer another email address for daily use, you can easily forward all emails to it.

Business Bank Account

Most business credit providers require a business bank account to avoid accidental mixing of funds. Many banks, even those with physical locations, allow you to open business bank accounts online. If you purchase a business, lenders might raise red flags because they look at the bank account’s start date, not the entity’s start date. So, open a business bank account as soon as possible for it to serve as a reference. Maintain a $10,000 balance in your business bank account if you aim to apply for an SBA loan. Getting a business account should be straightforward if you already have a well-managed personal bank account.

Banks use an internal, confidential credit score based on your average account balance over the last 90 days to assess your bank credit. You’ll generally need an average of $10,000 in your business bank account to secure a good enough score for a bank loan. Large banks like Wells Fargo and Chase consider your bank credit score when deciding to extend credit. Aim for a high five rating to secure a sizable bank loan.

DUNS Number

To build business credit, you need to obtain a DUNS number from Dun and Bradstreet. A business credit report is generated once you have a DUNS number with at least three registered payment experiences. Dun and Bradstreet offers a free product that gives you a DUNS number within 30 days. If you need it more quickly, you can pay $229 for a DUNS number in five business days or less. DUNSFile and CreditSignal offer credit reporting for the same price but only focus on D&B business credit scores. They also send you alerts if your credit score changes and provide a detailed D&B business credit report.

Your business needs a Federal Tax ID number (EIN), whether you have employees or not. The EIN for your organization serves the same purpose as your Social Security number. Make sure that all agencies, banks, and trade credit vendors use this same Tax ID number to identify your business. You can obtain a free EIN for your company on the IRS website. Choose a legal structure for your business, such as a corporation, limited liability partnership, or coalition. Although you can start as a sole proprietor, you’ll likely want to incorporate later to limit liabilities and maximize tax benefits. Keep in mind that a DBA is not a separate legal entity.

Certain industries are viewed as high-risk by lenders. If your business falls into one of these categories, you could face immediate rejection or, at the least, stricter underwriting, higher rates, and less favorable terms. Reviewing the associated SIC or NAICS code, lenders determine your business’s industry. To avoid automatic rejections based on this code or your business name, devise a strategy while maintaining honesty. Lack of integrity could result not only in denials but also in criminal charges.

The U.S. government assigns businesses a four-digit Standard Industrial Classification (SIC) code to categorize their primary activities easily. The Securities and Exchange Commission (SEC) developed the SIC code system, which investors use to identify a company’s industry. The first four digits of the code indicate the company’s general business. For example, the code 8711 represents Engineering Resources. Additional numbers appended to this four-digit sequence increase specificity. For instance, Engineers-Agriculture has the code 871103, while Contractors-Engineering General carries the code 871105. Over 30 different protocols exist under the 8711 Engineering Resources code.

The North American Industry Classification System (NAICS) serves as a newer system for classifying businesses and collecting, analyzing, and publishing U.S. economic statistics. Unlike the more specific SIC codes, each NAICS code can encompass multiple SIC codes. For example, the SIC code for Engineering Services, 8711, includes over 30 different SIC codes, while its corresponding NAICS code is 541330. Although the plan is to transition to the NAICS system fully, many businesses still heavily rely on the older SIC system.

Ensure that all key authorities, including the department, the IRS, the bank, and the 411 National Directory, list your business using its exact legal name. Confirm that all your received bills, such as electricity, telephone, and rent, display the correct business name and go to the proper business address. Visit the Secretary of State’s office to obtain any necessary licenses for operating your business. They can also inform you if you need continuing education to maintain your license. Since processing times can vary and may take longer than 30 days in some states, begin the licensing process immediately.

To build business credit, you can use any form of business entity. However, if you aim to separate your personal and business credit, your business must be a distinct legal entity like a Corporation or LLC, not a sole proprietorship or partnership. Operating this way doesn’t necessarily shield you from personal liability. The time required to incorporate your business varies based on your state and the method you choose. Typically, online filing is faster. Even with online filing, you might need to wait a few days. In most scenarios, you’ll need to file Articles of Incorporation. To draft these quickly and accurately, consult a corporate attorney.


LexisNexis provides all lenders with information that influences loan application decisions. This data predicts the likelihood of repayment. Lenders compare the details you provide on your loan application with the information in LexisNexis. If discrepancies exist, the lender will deny your loan. LexisNexis employs a proprietary linking system that connects all your personal information, both positive and negative. LexisNexis reports include: every property you’ve owned along with its value and sale prices; your home’s building materials; details about your Homeowners Association, including bed, bath, and roofing specs; air conditioning units; deeds and mortgages; associated title companies; interest rates; loan amounts, terms, and types; all your phone numbers and email addresses; every license, firearm, mortgage, and violation you have; traffic tickets, felonies, misdemeanors, and sex offender records; variations of your name; your marriage and divorce records; every vehicle you’ve owned, including their VIN numbers; all your past insurance policies; every business affiliation; family information, including details about your children; loans and leases; aircraft and boat ownership records; public records like bankruptcies, judgments, and lawsuits; educational records, including degrees earned, schools attended, and graduation dates; military records; online marketing records; and records of requests for short-term credit offers.

Small Business Financial Exchange

The Small Business Financial Exchange (SBFE) is a non-profit organization that collects small business data from its member lenders, who also serve as its owners and stakeholders. The organization then uses this data to generate comprehensive credit reports, which lenders use for credit assessments. Operating under a “give-and-get” principle, the SBFE allows members to access information about their borrowers, including payment history, and also gather trade data. If you want a loan, lenders within the SBFE scrutinize a wealth of information about you and your small business, not just your payment history. The SBFE also supplies data to credit reporting agencies and LexisNexis. They store any information you’ve submitted in a business application, and discrepancies in this information can lead to loan application denial. Certified Vendors are credit reporting agencies that have partnered with the SBFE. The only Certified Vendors are Equifax, Experian, Dun and Bradstreet, and LexisNexis Risk Solutions. While lenders can use other reporting services, membership in the SBFE and utilization of a Certified Vendor provide them with both the vendor’s data and data from the SBFE.