How to Build Business Credit Quickly and Easily

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If you’re a business owner, sooner or later you’ll probably want to get a bank account for your company. But getting a business checking account can be challenging for small businesses that don’t have the sort of moneyed connections that allow other companies to open accounts with their names as soon as they’re incorporated. However, it doesn’t have to be quite so difficult if you know what you're doing. The good news is that opening a business bank account is easier than you think and there are many helpful resources available to help new businesses get started. A good way to start building your business credit is by establishing a trust account. A trust account is essentially an investment account that allows businesses to hold liquid assets—such as cash—but still operate in a manner that keeps those assets separate from the company's other assets. This prevents your business from overdrawing its checking or savings accounts and also helps establish some trust between your company and any financial institutions doing business with it.

 

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How to get a business bank account

The first thing new businesses need is a business bank account so that they can deposit and withdraw funds. Most banks will require that a company open a business account for which the owner is the signatory. Once you’ve opened a business account, you can deposit funds from customers or receive deposits from suppliers. You can then use those funds to pay bills or make purchases. If you want to take advantage of the fact that banks offer higher interest rates for business accounts and make online deposits, you’ll also want to consider opening a business account that allows electronic transactions. Establish a Trust Account. A trust account is essentially an investment account that allows businesses to hold liquid assets, but still operate in a manner that keeps those assets separate from the company’s other assets. This prevents your business from overdrawing its checking or savings accounts and also helps establish some trust between your company and any financial institutions doing business with it. Trust accounts come in several forms. One common type is a revocable trust, in which a bank will act as the trustee and hold your funds. This type of trust account is revocable, which means you can change the terms at any time. Another type of trust accounts is a irrevocable trust, in which the bank acts as the trustee, and assets are held for the benefit of a third party, such as a charitable organization.

Establish a Trust Account

Setting up a revocable trust account is something that you can do yourself, saving you time and hassle. Revocable trust accounts allow you to hold funds in your name but also have the ability to give that money to someone else—such as your lawyer or accountant—immediately without going through the whole process of creating a new legal entity. You can also close a revocable trust account and open a new one at any time. This can be useful if you need to close an account for some reason, but it’s also helpful if you want to open a new business account that’s managed by a different bank.

Get a Credit Card

When you’ve opened your business bank account, the next thing to do is to get a credit card. Credit cards are convenient payment tools that allow business owners to accept credit card payments without tying up their own funds. And they can also help build your credit score, since credit bureau will include the credit limit you’ve used as part of your credit score. There are a number of different credit cards to choose from, including business credit cards, travel credit cards and credit cards for small businesses. Business credit cards provide some of the most powerful benefits, like discounted business travel, cash advances and assistance in securing business loans.

 

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 Establish an Automated Clearing System (ACH) Account

A cash advance on a business bank account is a particularly useful type of credit card for new businesses. Most banks charge an annual fee for business cash advances, but some offer fee-free cash advances for new customers. Cash advances on a business bank account are designed to help businesses make purchases on short notice. They come with high interest rates and fees, so it’s important to choose a card that offers a fee-free period and a low interest rate.

Set Up an Electronic Fund Transfer (EFT) Account

An electronic fund transfer is similar to a cash advance on a business bank account, but it can be used for recurring payments, such as monthly bills. An electronic fund transfer also works similarly to a cash advance in that it comes with fees and interest charges. Setting up an electronic fund transfer account allows you to send money from your business bank account to a regular payment account, such as a credit card, mortgage, utility bill or student loan.

Conclusion

Building business credit is essential for any company that wants to get loans and open accounts. The best way to build business credit is to open a trust account, establish a credit card and use an electronic fund transfer account. These three accounts can help you get a business bank account, gain access to credit and make payments without having to pay interest. In addition, they can also help you open a business credit card account, build your credit score and make payments on time without late fees.

 

BUILD BUSINESS CREDIT TODAY! #1 CREDIT BUILDING SOFTWARE.