Business Credit Reporting

One advantage of incorporating right away to enhance a business’ business credit reporting which helps later when trying to obtain a small business loan, is that the time in business will show as of the original inception date in business credit reports such as Experian and Dun and Bradstreet.

Some business lenders generate auto decisions when reviewing a small business loan.  If incorrect and shorter time in business is showing on the business credit reports as part of the business credit reporting accessed by the lender,  this will be a more negative factor in the decision and can cause a lower approval, or even a decline.   Even in cases when the application is reviewed manually,  there are no guarantees  that the credit analyst will even realize, much less take the time to consider that the time in business is actually longer.

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Unless a reviewer is aware of any additional facts, here isn’t any reason or motivation for a credit analyst to assume that the time in business is longer than what is showing as part of the business credit reporting.  As a result, the small business owner applying for a small business loan may be at a significant disadvantage in the small business loan process.   Contact the business credit agencies and make sure that the full time in business is being reflected.

Business credit reporting
Business credit reporting information.

 

Business Credit Reporting Resource page links:

Bureau of Labor Statistics – Provides companies with up to date information on employment, demand, hiring, productivity and other information that may be useful to companies.

International Trade Administration – Creates jobs and economic growth by promoting U.S. companies abroad to governments in other countries.

More Business Credit Reporting resources:

Department of Labor – Provides information on many labor issues that can be useful to companies, such as insurance, regulation, wages, wage hours, compensation, safety and health

U.S. Patent and Trademark Office – U.S. office to file patents to protect a companies new or existing proprietary products.

U.S. Trade and Development Agency – Promotes U.S. Exports to Foreign Countries, please review if your company is interested in exporting goods to foreign countries.

CEO Refresher – A monthly newsletter on creative leadership ideas. Short articles, brief book reviews, models, management tools, quotations and commentary.

E-Network for CEOs – Online articles and much more for CEO’s

Public Radio Planet Money – All issues money related to the public.

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Small Business Loan Resources:

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Sole Proprietorship vs Corporation

Sole Proprietorship vs Corporation

Is an S corp the same as a Sole Proprietorship?
No. An S Corp is a Corporation. A Sole Proprietorship is not a Corporation.

By setting up a small business as a corporation from the beginning, the full time in business will be reflected with the secretary of state and with main business credit agencies.   Both Dun & Bradstreet and Experian business credit are major credit reporting agencies.    These reportings will later help the small business owner in their efforts to obtain a small business loan.

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What is the difference between a Sole Proprietorship and a Corporation

A Sole Proprietorship is one indidual operating a business and are the sole owner
of that business. They are not a Corporation and do not receive the protections and other benefits that being structured as a Corporation provide.
A Corporation is a type of company structure that is more commonly used for larger companies. This type of company structure affords certain important legal protections to the owners of the Corporation. The Corporate business structure provides a strong barrier against owners being sued individually for damages.

A sole proprietorship is not listed with the secretary of state with most states.   Some states offer listing sole proprietorships under fictitious name certificate sections.     However, this is not the case with all states and even in the states which do list fictitious names, the section for finding these names is often not as prominent as the sections for corporations.    The result is when you are doing something important with your small business, such as obtaining a small business loan, setting up trade accounts, people will be looking for you.

When someone is looking for your business listing, you want them to find you. 

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