6 Best Business Credit Cards for Entrepreneurs: Fuel Your Growth

As an entrepreneur, managing your finances is crucial. And guess what? A business credit card can be a game-changer. In this article, we explore the world of credit cards designed specifically for entrepreneurs. We’ll reveal the leading contenders, highlight their impressive features, and address the burning questions you have about credit cards for contractors, independent contractors, and self-employed individuals.

But first, let’s give you a sneak peek of the cards—because that’s what you’re here for!

Presenting the most practical (and rewarding) business credit cards for entrepreneurs:

These credit cards from major banks are quite popular, but here’s a little secret: If you have a solid relationship with a small community bank or credit union, you might be able to secure even higher credit limits. In fact, we specialize in teaching entrepreneurs like you how to build those relationships and access credit lines worth hundreds of thousands of dollars at Business Credit Workshop. So, don’t overlook the potential benefits of working with local financial institutions!

Now, let’s take a closer look at each of the cards mentioned above and uncover valuable information and advice to help you maximize your business credit profile. Get ready to elevate your financial strategy and unlock new opportunities for your business!

Here’s what’s in store:

Explore the Best Credit Cards for Entrepreneurs
How to Build Credit for a New LLC or Business with No Credit History
- What if You Have Bad Credit?
- What if Your Business Has Bad Credit?
Frequently Asked Questions
Final Takeaway

Now, let’s get crackin’!

Explore the Best Credit Cards for Entrepreneurs

When it comes to choosing the perfect credit card for your small entrepreneurial venture, it’s smart to consider some of the major cards specifically tailored to meet the needs of small business owners like yourself. Before we delve into the world of business credit and its intricacies, let’s take a closer look at the unique features and benefits offered by each of these top credit cards.

1. Chase Ink Business Preferred

Credit Card: Ink Business Preferred® Credit Card

Issuer: Chase

APR: 20.99%–25.99% variable APR

Annual Fee: $95

Rewards Program:

Earn 3X points on shipping and other select business categories
Earn unlimited 1 point per $1 spent on all other purchases. Points do not expire as long as the account is open
Redeem points for cash back, gift cards, travel experiences, and more through Chase Ultimate Rewards
Get 25% more value when redeeming points for travel through Chase Ultimate Rewards
Earn 5X points on Lyft rides through March 2025

Benefits:

Employee cards at no additional cost, with individual spending limits
No foreign transaction fees
1:1 point transfer
Travel and purchase coverage
Stay on top of your business with expense tracking tools
Referral program: Earn up to 200,000 points per year by referring other business owners to any Chase Ink® Credit Card

The Ink Business Preferred® Credit Card from Chase is a top choice for entrepreneurs looking for flexible and rich rewards. With a generous sign-up bonus, accelerated points earning in select business categories, and various redemption options, it provides value for business expenses. The card also offers additional benefits like no foreign transaction fees, point transfers, and purchase coverage. Positive customer reviews highlight its effectiveness for earning rewards and the overall satisfaction of cardholders.

2. BoA Mastercard Business Platinum

How much money do you need to make for your business to get credit line?

Credit Card: Platinum Plus® Mastercard® Business card

Issuer: Bank of America

APR: 0% introductory APR for the first 7 billing cycles, then a variable APR of 16.24% to 27.24%

Annual Fee: $0

Benefits:

Employee cards at no additional cost: Get employee cards with credit limits set by you
Mastercard Easy Saving® Program: Automatic rebates when using the card at tens of thousands of locations across the U.S.
Cash flow management tools: Suite of online services for managing your business finances
Online and mobile access: Secure access to manage your account online 24/7
Travel and emergency services: Includes travel accident insurance, auto rental insurance, emergency ticket replacement, lost-luggage assistance, and more
Free access to business credit scores: View Dun & Bradstreet business credit scores within Business Advantage 360, Bank of America’s Small Business Online Banking platform
Security features: Zero liability protection, fraud monitoring, paperless statement option, and more
Balance Connect® for overdraft protection: Link your credit card to a Bank of America business checking account for overdraft protection

The Platinum Plus® Mastercard® Business card from Bank of America offers competitive features, including a 0% introductory APR, no annual fee, and a $300 online statement credit offer. It also provides benefits such as employee cards, access to the Mastercard Easy Saving® Program, cash flow management tools, travel and emergency services, free access to business credit scores, and various security features. This card can be a suitable choice for businesses looking for a straightforward credit card option with cost-saving benefits.

3. Amex Business Gold

Best business credit cards for new business (Amex)

Credit Card: Amex Business Gold Card

Issuer: American Express

Annual Fee: $295

Rewards:

Earn 4X Membership Rewards points on the top 2 business categories where your business spends the most each billing cycle.
- Airfare purchased directly from airlines
- U.S. purchases for advertising in select media
- U.S. purchases made directly from select technology providers
- U.S. purchases at gas stations
- U.S. purchases at restaurants (including takeout and delivery)
- U.S. purchases for shipping
Earn 1X points on other select purchases made using the Business Gold Card.

Benefits:

Pay Over Time APR: APR on purchases will be a variable rate of 19.24% – 27.24%, based on creditworthiness and other factors at the time of account opening
Acceptance: American Express can be used at 99% of places in the US that accept credit cards
Expense management tools for better cash flow management
Travel benefits and additional services

The American Express Business Gold Card offers a competitive rewards program with the opportunity to earn 4X Membership Rewards points on the top 2 business spending categories each billing cycle. It also provides 1X points on other select purchases. With a special welcome offer of 100,000 Membership Rewards Points and various expense management tools, this card aims to provide flexibility and benefits for business owners. The card has a variable APR for purchases and is widely accepted across the US.

4. Capital One Spark 2% Cash for Business

How much of a business loan can I get with a 700 credit score?

Credit Card: Spark 2% Cash Plus

Issuer: Capital One

Annual Fee: $0

Rewards Program:

Unlimited 2% cash back on every purchase, everywhere, with no limits or category restrictions
Earn unlimited 5% cash back on hotels and rental cars booked through Capital One Travel

Benefits:

Pay-in-Full Charge Card: The balance must always be paid off in full every month
No Preset Spend Limit: Adapts to your needs based on spending behavior, payment history, and credit profile
Annual Fee Refund: Get your $150 annual fee refunded every year you spend at least $150,000
Business-Grade Capabilities: Empower your team with free employee and virtual cards, and easily pay vendors
Additional benefits include account management tools, employee access, travel benefits, service and protection features such as automatic payments, $0 fraud liability, year-end summaries, account managers, purchase records, and virtual card numbers

The Spark 2% Cash Plus card from Capital One offers excellent cash back rewards with unlimited 2% cash back on all purchases and 5% cash back on select travel bookings. With a one-time cash bonus of $1,200 and the option to earn an annual fee refund, this card provides significant value for business owners. It also includes various business-grade capabilities, such as employee cards, vendor payments, and a range of benefits and features to manage accounts and protect against fraud.

5. AAdvantage Platinum Select

Can I get a start-up business loan with 500 credit score?

Credit Card: AAdvantage® Platinum Select® World Elite Mastercard®

Issuer: Citibank

Annual Fee: $0 intro annual fee for the first year, then $99

Rewards:

AAdvantage® Miles: Earn miles from purchases
Loyalty Points: Earn 1 Loyalty Point for every 1 eligible mile earned from purchases

Benefits:

First checked bag free on domestic American Airlines itineraries for you and up to 4 travel companions on the same reservation (savings of up to $300 per round trip)
Preferred boarding on American Airlines flights
25% savings on inflight food and beverage purchases on American Airlines flights when you use your card
Variable APR for purchases and balance transfers: 20.99% – 29.99% based on creditworthiness.
No foreign transaction fees

The Citi® AAdvantage® Platinum Select® World Elite Mastercard® offers travel benefits, including a free checked bag, preferred boarding, and savings on inflight purchases. You can earn AAdvantage® miles and loyalty points for eligible purchases. The card has a variable APR for purchases and balance transfers, and there are no foreign transaction fees. The annual fee is $0 for the first year, then $99*.

6. Divvy Corporate Card

Best business credit cards for startups with bad credit

Credit Card: Divvy Corporate Card

Issuer: Divvy

Annual Fee: $0

Rewards:

Earn up to 7x points by paying off your balance more frequently
- Weekly: 7x points on restaurants
- Semi-Monthly: 5x points on hotels
- Monthly: 2x points on recurring software subscriptions
- 1.5x points on everything else
Unlimited Earnings: Earn rewards points daily with no cap and no expiration.
Effortless management: Track and redeem points easily through the rewards dashboard.
Boost your ad spend: Earn up to 2.25% cash back on advertising spend through Divvy, with no limit on earnings.
Flexible rewards redemption options: Cash back, gift cards, statement credit, and Divvy Travel partnership for double the point value and industry-leading rates.

Benefits:

Free, fast, and flexible business credit with credit lines up to $15M
Credit line scales with your business, with the ability to apply for credit line increases
Flexible underwriting options based on your business’s unique needs
Cards for every employee with proactive spend controls
Seamless software integration with desktop software and highly-rated mobile app
Advanced fraud protection for secure transactions

The Divvy Corporate Card is a free business credit card that offers fast and flexible funding options for businesses of all sizes. With its simple online application process, businesses can access credit lines up to $15M. The card scales with your business and offers flexible underwriting options to fit your needs. Divvy provides cards for every employee, seamless software integration, and advanced fraud protection. Additionally, businesses can earn rewards based on payment frequency. The Divvy Corporate Card is a valuable tool for managing business expenses and streamlining financial operations.

How to Build Credit for a New LLC or Business with No Credit History

Startup business credit cards no personal guarantee

If you’re eager to build your business credit fast, I’ve got some great insights for you! Building solid business credit can open up funding options beyond your personal credit limits and even help you secure lower insurance rates.

But before we dive in, let’s address some commonly asked questions about business credit. Can you use your EIN (Employer Identification Number) to apply for credit? Absolutely!

As long as you have an EIN assigned by the IRS, you can use it for business credit applications. Getting a business credit card isn’t as hard as you might think. With a high business credit score, you’ll have no trouble securing one. While some business credit cards may do a soft or hard pull on your personal credit, there are others that don’t.

And yes, an LLC can have a credit score! With an EIN and a DUNS number from Dun & Bradstreet, your LLC can have a credit score separate from your personal credit score.

Now, let’s jump into the steps to build business credit quickly. Remember, just like with personal credit, paying your debts on time is crucial for maintaining a good score.

Here’s a breakdown of the steps:

Form your business — Just like laying a strong foundation for a building, you need to properly form your business. Choose a neutral business name that allows for flexibility in funding options. Once you settle on a name, try to stick with it to show stability. Decide how you want to establish your business entity, whether it’s through an attorney, an online service, or manually with your local Secretary of State
Get your company “business credit ready” — Think of this step as adding a rough frame to your business. Establish a physical address (avoid using P.O. boxes), get the necessary business insurance if required, obtain any required business licenses, and create a strong online presence with a website and domain. Listing your business in relevant directories adds credibility and trustworthiness.
Network with local banks — Networking is vital, whether in buildings or business credit. Attend local Chamber of Commerce events if possible, or network online with local professionals to build connections. Research local banks and credit unions to understand their financing programs and underwriting processes.
Setup business credit profiles — This step involves setting up insulation for your business. Establish a business credit profile with Dun & Bradstreet (D&B) to obtain your PAYDEX score, which is a crucial business credit score. Monitor your Equifax and Experian business credit scores for free, fixing any inaccuracies you come across. Utilize business credit monitoring services like Nav to stay on top of your credit profile.
Build small trade lines of credit — Here’s where we add the finishing touches to make your building habitable. Establish small tradelines of credit, which are credit accounts with vendors or suppliers. These tradelines play a significant role in solidifying your business credit. Secure credit with suppliers and make timely payments to build trust and a positive credit history.

By following these steps, you can accelerate the process of building your business credit. We teach the full, 7-step process to build business credit in Business Credit Workshop.

Now, find out what you can do if your credit needs some work.

What if You Have Bad Credit?

Can I start a business with 700 credit score?

If you’re wondering if personal credit affects business, it does. So, before you apply for large lines of business credit, it’s important that you clean up your personal credit score.

Here’s my best advice to clean up bad personal credit.

First, educate yourself. Gain knowledge about credit repair strategies and consumer protection laws that can work in your favor. Understanding the credit reporting system will help you navigate the process more effectively.
Next, identify errors. Carefully review your credit reports for any inaccuracies, incomplete information, or unfair items. These errors are common and can have a negative impact on your credit score. Disputing and resolving these issues is crucial.
And, take action! — This is key and may include sending dispute letters to creditors and credit bureaus, requesting the removal or update of erroneous information. Follow step-by-step tutorials and utilize letter templates provided in credit repair resources.
Furthermore, take advantage of legal loopholes. Learn about the consumer protection laws that safeguard your rights. This knowledge can empower you to file small claims lawsuits against creditors, credit bureaus, or collection agencies if they have violated these laws. Seek legal advice when necessary to understand the best course of action.
Then, as you make changes, maintain good financial habits. Focus on making on-time payments, reducing debt, and managing your credit responsibly. Avoid common credit mistakes, such as late payments, high credit utilization, opening multiple accounts simultaneously, relying too heavily on one type of credit, and neglecting to review your credit report for inaccuracies.
Finally, seek professional help if needed. While credit repair resources like books and online communities can provide valuable insights, it’s always wise to consult with professionals, such as credit counselors or attorneys, for specific legal advice or guidance tailored to your situation.

Remember, cleaning up your personal credit takes time and effort. Stay committed and patient as you work toward improving your financial health and credit scores.

What if Your Business Has Bad Credit?

So, let’s talk about fixing your not-so-great business credit in a way that’ll make you feel optimistic about the future. There could be a few reasons why your business credit isn’t where you’d like it to be. Maybe you had some hiccups in the past, like late payments, debts piling up, or even unfortunate situations like liens or bankruptcy.

But hey, don’t fret! You have the power to turn things around.

Now, when it comes to your credit score, one important thing to consider is the Paydex score from Dun & Bradstreet (the main business credit bureau). It’s like a report card that ranges from 0 to 100 — The higher your score, the better your creditworthiness. If your business credit isn’t so hot right now, your Paydex score might be on the lower side. But fear not, my friend, because there’s a way to fix it so that you don’t have to rely on those high-interest business credit cards for bad credit.

So, how do you get started on the road to credit recovery?

Let’s break it down in a way that’s easy to understand:

Become a champion of timely payments — One of the biggest factors in improving your credit is paying your bills on time. It’s like scoring a winning goal in the game of credit. Make it a priority to pay your suppliers, vendors, and lenders right on schedule, or even earlier if you can. Timely payments are key to boosting your creditworthiness.
Tackle those overdue accounts — If you have any lingering debts or accounts that are past due, it’s time to face them head-on. Develop a plan to pay off those outstanding balances as soon as possible. Don’t be afraid to negotiate payment arrangements or settlements with your creditors. You’ll feel a weight lifted off your shoulders once those accounts are squared away.
Say bye-bye to high debt levels — Picture this: your debt levels dropping like confetti at a celebration. It’s a beautiful sight, isn’t it? High levels of debt can drag down your credit score, so it’s important to reduce those balances. Make consistent payments and resist the temptation to take on unnecessary new debt. Gradually, you’ll see that credit score start to rise.
Build friendships with credit-worthy partners — Relationships matter in business and credit building is no exception. Seek out vendors and suppliers who are willing to report your stellar payment history to credit bureaus. It’s like having cheerleaders in your corner, rooting for your credit success. These positive credit relationships can work wonders in improving your creditworthiness. You might consider working with a credit broker (proceed with caution), but I am more inclined to recommend a business credit consultant or coach.
Embrace the power of a fresh start — In some cases, if your current business has deep-rooted credit issues, starting anew might be the way to go. It’s like hitting the reset button and getting a chance to build a shiny new credit profile. Just remember, starting a new business comes with its own considerations, so consult with the experts to figure out the best approach for your situation.

Remember, improving your credit takes time and dedication. But don’t be discouraged! — With each positive step you take, you’re moving closer to a brighter credit future. So roll up those sleeves, put on your optimistic mindset, and let’s get to work on fixing that business credit of yours.

The future is looking mighty bright!

Frequently Asked Questions

What is good credit for small business owners?

A Paydex score between 70-80 is a strong score that can be considered “creditworthy” by business lenders.

How can I get a 100 business credit score?

By having several positive reporting tradelines, you can get a perfect (100) Paydex score. But, this isn’t a common or believable score for a business to have.

How good does my credit need to be to get a business loan?

Nearly any business with income can get a business loan. Even with a low business credit score, most companies can qualify for merchant cash advances, factoring, and other alternative loans. The higher your credit score, the more likely you are to qualify for business loans with lower rates and more favorable features and rewards.

What credit score does a business start with?

The minimum credit score (Paydex) for a business is zero — Scores are calculated on a scale of 0-100. If you have no reporting tradelines, you will not have a credit score. You can use net 30 accounts and gas cards to establish your business credit score.

Final Takeaway

Business credit is a tool that can help you improve your cash flow to grow your company in invest in your future The cards listed here are some of the most popular business credit cards for entrepreneurs — Each has its own set of pros and cons.

The Chase Ink Business Preferred offers a generous rewards program and travel benefits, making it an attractive choice.
If comprehensive travel insurance coverage is a priority, the Mastercard Business Platinum is a great option to explore.
For those seeking flexible rewards and bonus categories tailored to common expenses, the American Express Business Gold is worth considering.
The Capital One Spark Cash for Business provides unlimited 2% cash back on all purchases, offering simplicity and value.
If you’re a frequent flyer with American Airlines, the CitiBusiness/AA Advantage Platinum Select offers travel benefits and rewards specifically designed for American Airlines customers.
Lastly, the Divvy Business Card streamlines expense management and budget controls, making it an efficient choice for businesses.

With these options in mind, you can choose the business credit card that aligns with your specific needs and preferences.

If you want to learn how to obtain up to $100K in business credit in as few as 30 days, join Business Credit Workshop today.

What’s the Best Credit Card for a Small Construction Business? +TIPS

By Joe

Best credit card for small construction business

Taking control of your finances is vital for small construction businesses. And, guess what? A business credit card can be a game-changer. Here, we’re diving into the world of credit cards tailored specifically for small construction businesses. We’ll uncover the top contenders, highlight their awesome features, and even tackle those burning questions you have about credit cards for contractors, independent contractors, and self-employed folks.

But first, let me give you a sneak peek of the cards…since that’s what you came here for!

Introducing the best business credit cards for small construction businesses:

Note, that these are the most popular credit cards available from big banks. And, while I don’t have anything against them, you can sometimes obtain a lot more credit (hundreds of thousands of dollars) when you have a relationship with a small community bank or credit union — which is precisely what we teach at Business Credit Workshop.

Let’s dive in a bit deeper to learn more about each card above, then explore some information and advice that can help you get even more from your business credit profile. Get ready to level up your financial game!

Here’s what’s in store:

Best Credit Cards for Small Construction Businesses
Most Important Credit Card Features for Construction
How to Build Business Credit to Access More Funding
Frequently Asked Questions
Conclusion

Now, let’s dive in.

Best Credit Cards for Small Construction Businesses

When it comes to selecting the best credit card for your small construction business, it’s a good idea to explore major cards that are designed to cater to small business owners with operations like yours. Before we get into the tricks of the trade (business credit), see what each of these top cards has to offer.

1. American Express Business Platinum

Best small business credit card for construction

The Business Platinum Card from American Express is a credit card designed for businesses. It has an annual fee of $695. By spending $15,000 on eligible purchases within the first 3 months, you can earn 130,000 Membership Rewards Points. This offer is subject to availability and may not be available if you leave the webpage and return later.

With the Business Platinum Card, you can earn points on your purchases. You’ll earn 5X points on flights and prepaid hotels booked on AmexTravel.com, 1.5X points on eligible purchases in key business categories and on eligible purchases of $5,000 or more everywhere else, and 1X points on other eligible purchases.

The card also offers various benefits. You can get statement credits for select purchases, such as $200 back semi-annually for U.S. purchases with Dell Technologies, $90 back per quarter for purchases with Indeed, $150 back per year for select business subscription purchases with Adobe, and $10 back monthly for select purchases with U.S. wireless phone service providers.

Additionally, the card provides access to the Global Lounge Collection, offering access to more than 1,400 airport lounges across 140 countries. You can receive up to $200 in airline fee credits per year, enjoy benefits like Clear membership, and get 35% points back when using points for eligible flights booked through Amex Travel.

Other perks include hotel benefits, premium car rental privileges, and various travel insurances. The card also offers cash flow flexibility with a Pay Over Time option and has no preset spending limit. Expense management features include employee cards, QuickBooks integration, online statements, account alerts, and a year-end summary.

2. Capital One Spark Cash Select

Best credit card for construction business

The Spark 1.5% Cash Select card is an excellent business credit card offered by Capital One. With this card, you can earn unlimited 1.5% cash back on every purchase for your business, without any limits or category restrictions. It’s a great way to maximize your rewards and get some extra cashback.

The best part? There’s no annual fee for this card, so you can enjoy the big rewards and cash bonus without any additional costs. Capital One also offers additional cash-back rewards of 5% on hotels and rental cars booked through Capital One Travel, adding even more value to the card.

Redeeming your cash-back rewards is easy too. You can cash them in for any amount at any time, and they don’t expire for the life of the account. It’s a flexible and convenient way to enjoy the benefits of your hard-earned rewards.

In terms of the interest rate, the variable APR for purchases ranges from 18.24% to 24.24%, depending on your creditworthiness. As always, it’s important to manage your credit responsibly and pay off your balances in full to avoid any interest charges.

The Spark 1.5% Cash Select card also comes with a range of benefits to make managing your business easier. You can conveniently manage your accounts online, provide employee access, enjoy travel services, set up automatic payments, and benefit from $0 fraud liability in case your card is lost or stolen. Additionally, you’ll receive year-end summaries for simplified budgeting and tax time, and the option to assign an account manager to handle purchases and payments.

When it comes to applying for this card, the process is quick and straightforward. It only takes about 10 minutes to complete the application, and you’ll receive a decision within seconds. Just make sure to have the necessary information on hand, such as the legal names, addresses, and Social Security Numbers of all business owners, as well as your business’s legal name, address, and tax ID number.

The Spark 1.5% Cash Select card has received positive reviews from customers, with an overall rating of 4.4 out of 5 stars based on 946 reviews. The majority of reviewers highly recommend this card, which speaks to its value and benefits.

3. Brex Business Corporate Card

Best credit card for independent contractors

Accepted worldwide, the Brex Corporate Card provides both physical and virtual cards on the reliable Mastercard network. And with the highly rated 5-star app available on iOS and Android, you can manage your card effortlessly from your phone. Features like Apple Pay integration, card cancellation, and spend monitoring are all conveniently accessible in one place.

What sets the Brex Corporate Card apart is its rewarding nature. Earn up to 7x back on your spending and redeem your rewards for cash back, credits, or even billboards. This enables you to maximize your benefits and get more value from your expenses.

With credit limits tailored to your business, you can enjoy a card limit that suits your needs based on financial factors such as revenue or funding raised. This flexibility ensures that your card aligns with your business’s financial capabilities.

The Brex Corporate Card is not just a single-purpose card; it caters to various business needs. Enable spend for travel, procurement, and more with worldwide card acceptance. Additionally, Brex offers specialized cards for travel and entertainment expenses, vendor expenses, purchase cards, benefits cards, and more. The flexibility to customize spend limits for specific purposes ensures that your policies are enforced with every card swipe.

Expense management is simplified with the Brex Corporate Card. It automatically collects itemized receipts compliant with IRS or local tax laws, generates memos, and categorizes expenses to the right general ledger and/or project. Real-time expense tracking allows you to monitor card limits and expenses in real-time, increasing accountability. It’s an all-in-one solution that streamlines your expense reporting process.

Brex offers local cards in over 20 currencies, allowing you to conduct operations locally wherever you do business. The comprehensive global features enable you to manage your company’s credit limit, subsidiary-specific limits, expenses, and billing in one console, reducing risk and increasing control. By issuing cards in employees’ local currencies and enabling subsidiaries to pay statements from their local bank, you can avoid intercompany transactions and foreign exchange fees.

4. Chase Ink Business Preferred

Chase ink business preferred credit card for construction

Chase’s Ink Business Unlimited® Credit Card might be the perfect credit card solution for your business. With the Ink Business Unlimited card, you can enjoy a range of benefits designed to maximize your rewards and simplify your financial management.

With the Ink Business Unlimited card, you’ll earn unlimited 1.5% cash back on every purchase made for your business. Whether it’s office supplies, equipment, or other business expenses, you can earn cash back on all of your transactions. Plus, there’s no annual fee, ensuring that you can enjoy the benefits without any additional costs.

To give you even more value, the Ink Business Unlimited card offers a 0% introductory APR for 12 months on purchases. This allows you to make business purchases and pay them off over time without accruing interest. After the introductory period, the variable APR will be between 18.24% and 24.24%, based on your creditworthiness.

Redeeming your rewards is a breeze with the Ink Business Unlimited card. You can choose to redeem your cash back rewards for cash, gift cards, travel, and more through Chase Ultimate Rewards®. This flexibility allows you to use your rewards in a way that suits your business needs.

Another great feature of the Ink Business Unlimited card is the option to add employee cards at no additional cost. These employee cards not only help you manage your expenses but also enable you to set individual spending limits for each employee. This allows you to keep track of spending while giving your employees the ability to earn rewards on their purchases

Finally, for those who frequently use Lyft, the Ink Business Unlimited card offers an exciting benefit. Earn a total of 5% cash back on Lyft rides through March 2025. This includes an additional 3.5% cash back on top of the 1.5% you already earn on travel purchases, making it a valuable perk for business travelers.

Most Useful Credit Card Features for Small Construction Businesses

Can you use credit card for contractors?

As I said before, the cards above are just some of the offers that are great for small construction businesses like yours. And, there are virtually hundreds of credit cards you might apply for, based on your stage in business, credit profile, and your financial health.

I always recommend you do your due diligence (which you’re doing now — good job!) to find the right card for your situation. Still, there are some super valuable credit card features that you should be looking for.

When it comes to credit for your construction business, you can get the most from a card with the following features:

Robust expense tracking — Construction businesses deal with many expenses that require effective management. When choosing a credit card, prioritize those with handy expense-tracking features. Look for cards that provide detailed transaction descriptions, spending categories, and downloadable reports. These tools will simplify the task of monitoring and analyzing your expenses, making your bookkeeping process a breeze.
Flexible credit limits — Construction projects come in all shapes and sizes, each with its unique scale and cost. To meet the ever-changing financial requirements, it’s crucial to have a business credit card with a flexible credit limit. This flexibility ensures that you have the necessary purchasing power to cover expenses like materials, equipment, and other project-related costs. Having a credit card with a flexible credit limit allows you to adapt to the varying financial demands of your construction projects effectively.
Rewards on construction-related spending — When searching for a credit card for your construction business, keep an eye out for rewards or cash-back programs specifically tailored to construction-related spending. Some cards offer enhanced rewards for purchases made at hardware stores, home improvement retailers, or building material suppliers. By maximizing these rewards, you can offset costs and enjoy additional benefits. It’s a smart way to make the most out of your business expenses while you get more value from your card.
Introductory offers — You’ll find that many business credit cards come with enticing introductory offers that can be quite valuable for your construction business. These offers may include bonus rewards points, statement credits, or even waived annual fees for the first year. Taking advantage of these introductory perks can provide you with significant value, especially when you’re starting or expanding your construction business. It’s a great way to give your business a financial boost and maximize the benefits of your credit card.
Expense management tools — Managing expenses effectively is of utmost importance for construction businesses. When choosing a credit card, it’s essential to look for one that offers comprehensive expense management tools. These tools can include handy features like mobile apps, receipt capture capabilities, and integration with accounting software. By utilizing these tools, you can streamline the process of tracking expenses, monitor your finances in real time, and seamlessly manage your financial operations. It’s a smart way to stay on top of your expenses and ensure efficient financial management for your construction business.
Business-specific benefits — Certain credit cards provide extra perks specifically designed for construction businesses. These benefits can be quite advantageous and may include discounted rates on equipment rentals, exclusive access to construction industry events or trade shows, or special partnerships with suppliers offering favorable rates or exclusive deals. These tailored perks are aimed at supporting and enhancing the operations of construction businesses, providing valuable advantages that can contribute to their success.

Remember, the best business credit card features for your construction business may vary depending on your specific needs and preferences. Evaluate your business’s spending patterns and requirements to choose a credit card that offers the most relevant and valuable features for your construction operations.

How to Build Business Credit to Access More Funding

Did you know that you can actually build business credit in as little as 30 to 90 days? And, with a perfect business credit score, you can access higher amounts of funding? Business credit is a great channel to grow and scale your business, invest, and pay for emergencies.

In brief, here’s how to build business credit fast:

First, you need to form your business. Establish a proper business entity, choose a neutral business name and category, and decide on the best method to establish your business entity.

Next, it’s important to get your company “business credit ready.” Set up a physical address, obtain necessary business insurance and licenses, establish an online presence, list your business in relevant directories, and open a business bank account.

Then, you’ll want to network with local banks. Attend local Chamber of Commerce events or network online to build relationships with bankers and financial professionals. Research financing programs offered by local banks and credit unions.

After that, set up business credit Profiles: Establish business credit profiles, such as a PAYDEX score from Dun & Bradstreet (D&B), by obtaining a DUNS number. Monitor your Equifax and Experian business credit scores for accuracy using services like Nav.

Finally, you have to develop small tradelines of credit and net 30 accounts that report your on-time payments to business credit bureaus. Consider using gas cards and store cards, ensuring that payments will be reported.

By following these steps, you can lay the foundation for a strong business credit profile and access better funding options for your business.

Frequently Asked Questions

Can I get a business credit card with a 1099?

Yes, you can get a business credit card with a 1099. Many credit card issuers consider 1099 income as eligible for credit card applications. However, specific requirements may vary among different credit card providers. A 1099 is not like an EIN and will not qualify you for business credit on its own. It’s always best to check each lender’s individual policies.

Is being an independent contractor the same as owning a business?

In short, no, but only because most independent contractors operate as an individual. However, independent contractors and self-employed individuals can obtain business credit if they create a business entity and structure their businesses properly.

Do business credit cards verify income?

Yes. Most business credit lenders verify income. There are a few outliers, but your income and/or assets will almost always play into a credit decision. Some lenders look at cash flow and revenue while others might look at collateral (cash on hand) during the underwriting process.

What is the 5/24 rule?

The 5-24 rule is a guideline used by Chase and some other credit card issuers. It states that if you’ve opened five or more credit card accounts within the past 24 months, you may be ineligible for certain Chase credit cards.

Conclusion

Picking the perfect credit card for your small construction business can work wonders for your financial management and score you some awesome perks. We’ve got your back with options like American Express, Capital One, Brex, and Chase, all geared toward meeting your unique business needs.

But hold up, there’s more to the credit card game! We’re here to demystify credit cards for contractors, independent contractors, and self-employed folks. We’ll answer your burning questions and equip you with the knowledge you need to make savvy financial decisions for your growing business.

But hey, getting a credit card is just the first step. If you’re serious about leveling up your small construction business and snagging up to $100,000 in business credit fast, we’ve got a killer recommendation. Join Business Credit Workshop and tap into our expertise. We’ll teach you insider strategies and techniques to skyrocket your business credit journey. Get ready to take charge of your finances and make some serious waves in the construction industry!

Want to learn how to obtain up to $100K in business credit for your small construction business in as few as 30 days? Join Business Credit Workshop today.

Should You Hire a Business Credit Consultant?

By Joe

BUSINESS CREDIT CONSULTING

Empower Your Business with Tailored Credit Solutions

Improve Cash Flow & Financing With a Skilled Business Credit Consultant

Accelerate your business’s financial success with our specialized business credit coaching. Let us assess your company’s creditworthiness, develop targeted strategies, and provide actionable guidance to optimize your credit profile.

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Learn More

Joe really knows his stuff!

“With Joe’s help, I obtained $320,000 in unsecured business credit. It’s super powerful and now I’m able to expand my business…

…I did the step-by-step tasks, and it works!”

Sergey D.

Parker Management LLC

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Maximize Your Financial Strategy with Expert Credit Consultation

Enhance Your Credit Profile Evaluate your current credit profile, identify areas for improvement, and develop strategies to enhance your creditworthiness.
	Get Access to Funding Identify the best funding sources, improve your loan applications, and increase your chances to secure the funding your business needs..
Improve Business Cashflow Optimize your cash flow management strategies and get advice on techniques to shorten your cash conversion cycle and reduce penalties.
	Negotiate Ideal Terms Learn negotiation tactics and industry knowledge to help you land more favorable terms with suppliers, creditors, and lenders.
Mitigate Common Risks Conduct a thorough credit risk assessment to minimize credit-related risks that can arise when you try to navigate business credit alone.
	Save Time and Resources Save valuable time and resources — Instead of mulling through the complex credit landscape, rely on expertise to focus on the most productive tasks.
Get Expert Guidance Learn about credit management best practices to maintain a strong credit profile and cultivate a credit-conscious culture within your organization.

Start Optimizing Your Business Credit Today

Hire a leading business credit consultant to provide you with valuable insights, actionable strategies, and personalized guidance to maximize your credit profile. Increase funding opportunities and improve your business’ financial stability.

Work With Joe

Join BCW Online

Do you need a business credit consultant?

Managing credit is vital for businesses seeking financial stability and growth. But, the complex world of business credit can be challenging — you often need expert guidance to navigate it. Here, I’ll explore the role of business credit consultants and give you some insights into whether hiring one is the right choice for your specific needs.

Whether you’re in search of a business credit consultant in your area, interested in building business credit, negotiating business credit cards, or understanding the benefits and drawbacks of credit consultants, this article will give you all the information you need.

What Does a Business Credit Consultant Do?

A business credit consultant specializes in helping businesses improve their credit profiles and access financing.

They can help business owners by providing various customized services:

Credit status evaluation
Credit-building strategy development
Connecting businesses with vendors and suppliers offering trade credit
Suitable financing option identification
Documentation and application assistance
Business credit education

Their expertise lies in credit scoring systems, lending practices, and creditor requirements. And, they work alongside business owners to enhance creditworthiness and facilitate access to funding.

Signs You Might Need a Business Credit Consultant

Not everyone needs a business credit consultant…but many do.

Here are some indicators that your business could benefit from the expertise of a business credit consultant:

You have limited access to credit — If your business is struggling to obtain credit or is limited to low credit limits, a credit consultant can help you improve your creditworthiness and access larger lines of credit.
Your business has a lack of credit history — If your business has a limited or nonexistent credit history, a credit consultant can guide you in establishing a strong credit profile by building trade lines and diversifying credit sources.
Business loan applications have been denied — If your business consistently faces rejections when applying for loans or financing, a credit consultant can evaluate your credit profile, identify weaknesses, and provide strategies to increase your chances of approval.
Your existing accounts have high interest rates — If you’re paying high interest rates on loans or credit, a credit consultant can help you improve your credit profile, potentially qualifying you for lower rates and better terms.
You depend on personal credit to fund your business — If your personal credit is heavily relied upon for business expenses, a credit consultant can assist in separating your personal and business credit, protecting your personal credit score, and providing strategies to establish independent business credit.
Your credit report is Inaccurate — If you suspect errors or inaccuracies on your business credit reports, a credit consultant can help you identify and correct these mistakes, ensuring accurate information that reflects positively on your creditworthiness.
You have a need for funding or growth — If you’re planning to expand your business or require additional funding, a credit consultant can develop strategies to optimize your credit profile, increase lending options, and improve your chances of securing the necessary funds.
You have a lack of credit management knowledge — If you’re unsure about credit management best practices, credit scoring systems, or how to navigate the complex landscape of business credit, a credit consultant can provide education and guidance to help you make informed decisions.

In these situations, a credit consultant with expertise in business credit can provide valuable insights, customized strategies, and assistance to overcome credit challenges and improve your business’s financial standing.

Factors to Consider Before Hiring a Business Credit Consultant

Before you hire a business credit consultant, you need to look at expertise, reputation, location, cost, and understand the services they offer.

Assess their experience and qualifications in business credit.
Research their reputation through reviews and testimonials — In addition to looking at Google reviews and Trustpilot, ask around on anonymous sites like Reddit for uncensored experiences.
Decide if a local or remote consultant is preferred.
Evaluate their pricing structure and fees.
Ensure they provide the specific services your business needs.

And, if you need a consultant to negotiate business credit, there are a few more items to look at.

Look for a consultant with a proven track record in negotiating business credit.
Verify their understanding of the credit card industry.
Assess their ability to negotiate favorable terms.
Evaluate their fees relative to potential savings.
Consider client feedback that specifically mentions their negotiation services.

Considering these factors will help you select the right consultant for your business credit needs.

Debunking Myths: Is Business Credit Real?

Business credit is indeed real and plays a crucial role in financial management.

So, let’s debunk some common myths:

Myth #1: Business credit is the same as personal credit.
- Reality: Business credit and personal credit are separate entities. Establishing business credit requires building a credit profile specifically for your business, distinct from your personal credit history.
Myth #2: Only large corporations need business credit.
- Reality: Businesses of all sizes can benefit from building business credit. It helps demonstrate credibility, secure better loan terms, attract suppliers, and separate personal and business finances.
Myth #3: Business credit is not necessary if I don’t need a loan.
- Reality: Even if you don’t currently require financing, establishing business credit is essential. It opens doors for future borrowing needs, enhances business credibility, and allows for favorable vendor terms or leases.
Myth #4: Personal credit doesn’t affect business credit.
- Reality: While separate, personal credit can impact business credit, especially for small businesses or sole proprietors without a well-established business credit history. Lenders may consider personal credit when evaluating the creditworthiness of a business.
Myth #5: Business credit is only based on revenue.
- Reality: Business credit is determined by a range of factors, including payment history, credit utilization, industry risk, years in operation, and public records. Revenue alone is not the sole basis for establishing business credit.

It is important to recognize business credit as a legitimate and vital component of financial management — Building and maintaining a strong business credit profile can help your business thrive, gain access to financing, negotiate favorable terms, and establish a solid reputation in the marketplace.

Alternatives to Hiring a Business Credit Consultant

Before you hire a business credit consultant, you should know that you’ve got options. Some popular choices are business credit courses and workshops, business credit builders, and diy business credit building.

Let’s look a bit closer at each of these options.

1. Business Credit Courses and Workshops

Business Credit Workshop helps small business owners and startups obtain large lines of unsecured business credit. We offer guidance on obtaining business credit cards that don’t appear on personal credit reports, accessing unsecured business lines of credit with no documentation, and getting loans for both new and established companies.

Business Credit Workshop provides online workshops, personal coaching, and a simple three-step approval process for obtaining business credit. We also offer case studies, education, and free guides. Joe Lawrence, the founder, is a leading business credit coach and investor who helps small business owners obtain business credit and teaches methods to develop a strong business credit profile.

Business Credit Workshop is based in Somerset, New Jersey, and offers services to businesses nationwide.

To learn how you can get up to $100K in business credit in as few as 30 days, join BCW online.

2. Business Credit Builders

Business credit builders are services or programs designed to help businesses establish and improve their credit profiles. They focus on building a strong credit history, which can enhance a business’s credibility, borrowing capacity, and access to favorable financing terms.

One notable credit builder program is the Dun & Bradstreet Credit Builder. Dun & Bradstreet is a leading provider of business credit information and solutions. Their Credit Builder program allows businesses to establish a credit file and obtain a DUNS number, which is a unique identifier. By registering with Dun & Bradstreet, businesses can start building a credit profile and track their creditworthiness over time.

The Dun & Bradstreet Credit Builder offers services such as credit monitoring, credit alerts, and access to business credit scores. This program enables businesses to proactively manage their credit and take necessary steps to improve it, such as making timely payments, maintaining low credit utilization, and ensuring accurate business information.

In addition to Dun & Bradstreet, there are other notable credit builder programs available. Some of these include Experian’s Business Credit Advantage, Equifax Small Business Credit Builder, and NAV Small Business Boost. These programs provide similar services, helping businesses establish credit profiles, monitor credit activity, and access resources for credit improvement.

Recommended: The Ultimate Tillful Review

By participating in credit builder programs like those offered by Dun & Bradstreet and other providers, businesses can take proactive steps to establish and improve their credit. This, in turn, can open up opportunities for better financing options, partnerships, and overall business growth.

3. Tradelines and Business Credit Cards

Using business credit cards helps build credit and establish a favorable credit history.

Choose cards that report to business credit bureaus like Dun & Bradstreet. Popular credit card options include Chase Ink, Amex Business Platinum, Capital One Spark, and Discover it Business. Use cards responsibly, make timely payments, keep credit utilization low, and pay attention to balances. This improves creditworthiness and increases access to financing opportunities.

Net 30 accounts that report to credit bureaus are also beneficial for business credit building when they report to business credit bureaus — not all net 30 accounts report payment history.

Is it Worth it to Pay a Business Credit Consultant?

While managing credit can be complex, hiring a business credit consultant can provide the expertise and guidance needed to navigate this landscape successfully. Whether you’re seeking assistance with negotiating business credit cards, building business credit, or improving your credit score, a knowledgeable coach or mentor can help you achieve your goals.

However, it’s essential to weigh the benefits, cost, and alternatives before making a decision. By understanding the role of credit consultants and conducting thorough research, you can choose the path that best suits your business’s credit management needs.

If you want to learn how to obtain up to $100K in as little as 30 days, join Business Credit Workshop.

To get customized, one-on-one support from a business credit expert, apply to work with Joe.

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Business Credit Workshop’s Official Business Credit Building Checklist

By Joe

→ Download the Business Credit Checklist PDF

Get the PDF Now →

As an entrepreneur looking to build credit for your small business, you’ve probably realized how important it is to establish creditworthiness. Building credit for your business is crucial to secure start-up funds, get financed for operating costs, or expand your offer.

Establishing business credit can be challenging, but by following this checklist, you can get your business on the right track. Here’s a comprehensive business credit checklist with nine essential steps to help you build and maintain business credit. From getting your personal credit in check to applying for business credit, we’ll walk you through each step to help you establish a strong credit profile for your small business.

Here’s everything covered in this checklist:

1. Get Your Personal Credit In Check
2. Establish Your Business for “Credit Readiness”
3. Open a Business Bank Account
4. Establish Relationships at the Bank
5. Make Sure You Have a DUNS Number
6. Establish Your First Trade Lines of Credit
7. Pay Your Accounts at the Right Time
8. Check and Monitor Your Business Credit
9. Apply for Business Credit
Final Thoughts

Now, let’s get to it!

1. Get Your Personal Credit In Check

Before you start building business credit, you need to get your personal credit in check. It doesn’t necessarily have to be perfect, but most business credit lenders require a “personal guarantee” (PG). This means your personal credit can impact your ability to obtain funds for your business.

If you don’t know without a doubt that your personal credit is excellent, here’s what you need to do:

Obtain a copy of your credit report from each of the three major credit bureaus – Equifax, Experian, and TransUnion — You can do this through AnnualCreditReport.com or individual credit bureaus’ websites.
Review your credit reports carefully and dispute any errors or inaccuracies with the credit bureau(s) reporting it.
Pay down any outstanding balances on loans, credit cards, or lines of credit to decrease the size of outstanding debt in proportion to your available credit. This will lower your credit utilization ratio, which can boost your credit score over time.
Make timely payments on all current and prior debt obligations and avoid negative marks by paying your bills on time.
Try to increase the average length of your credit history by keeping your oldest credit card account(s) open and active (closing them can reduce your credit history and negatively affect your credit score).
Avoid opening multiple new credit card accounts or loans at once, as it can impact your credit score negatively in the short term.
Monitor your credit reports regularly to ensure that they reflect your current creditworthiness.

Your personal credit score can impact your ability to secure business credit, so it’s crucial to maintain healthy financial habits like making timely payments and keeping credit balances low. Improving and maintaining your personal credit score is an investment in the future of your business.

2. Establish Your Business for “Credit Readiness”

Whether your business is established or brand new, there are several items you need to be “credit ready.” Go through this list and make sure you’ve done everything you need to make your business seem credible to lenders.

Note that you need to choose a consistent business name and address, and a start date, get a business phone number, and create a legal entity for your business. If your business has a physical location, determining an address is easy. If not, you can use a virtual address or shared office space. And, use a consistent date for your business start date.

Here’s how to properly set up and establish your business:

See: Sole Proprietorship VS LLC: How to Choose Your Entity Wisely

Apply for an Employer Identification Number (EIN) from the IRS in the company’s name.
Set up a dedicated business phone line and list it on 411 under the exact business name used on your registration.
Create a professional business website and email address.
Ensure credibility by meeting the following requirements for business credit approval:
1. Use the full legal name, including DBAs, and ensure it matches the corporation records for the business name.
2. Obtain necessary business licenses required by your industry and state.
3. Make sure your EIN matches exactly with your state filing.
4. Have a physical business address and avoid using P.O. box. If you use your home office address, establish a suite number.
5. Use a real business or VOIP number instead of your mobile or home phone — for a free or low-cost option, look into Google Voice.
6. Have a business fax number — you can use an online service for this, if you don’t want to mess with a fax machine.
7. Ensure there are no liens, judgments, or lis pendens exist against the business in public records.

By following these steps, your business can establish good business credit, which is necessary for obtaining business credit approval.

3. Open a Business Bank Account

You need a business bank account to get business credit because it helps lenders verify your financial stability and separate your business and personal finances. Without one, you may not be able to provide the necessary information to apply for business credit, and it can harm your chances of approval.

Here’s how to open a business bank account:

Research and identify a suitable bank or credit union for your business needs. Small community banks and credit unions are often a great option for businesses.

See: 3 Best Credit Unions for Small Business Banking

→ Interested in online banking? See our full write-ups on Novo Bank, Amex Business Checking, Bluevine, and NorthOne.

Gather your business’s legal documents such as your state and local business license, Articles of Incorporation or Organization, and the employer identification number (EIN) issued by the IRS.
Schedule an appointment with the bank and bring the business documents, along with the personal identification documents of anyone authorized to make transactions on the account.
Choose the type of account you need, such as a checking or savings account, and ensure that it meets the requirements of your business.
Provide the bank with the business’s address, phone number, and tax/EIN number to set up the account.
Ask about any fees, minimum balance requirements, and transaction limits associated with the account and make sure you understand the terms and conditions.
Commit to using this account for all business expenses and avoid using it for personal expenses. Mixing business and personal transactions can make it difficult to track expenses, which can lead to complications come tax season.

Opening a business bank account is essential for establishing financial credibility for your business. By choosing the right account and keeping personal and business expenses separate, you can effectively manage your business finances, and build a positive relationship with your bank or credit union.

4. Establish Relationships at the Bank

Establishing a good relationship with your bank provides several benefits, including quicker loan processing, more flexibility, access to financing, personalized services, and financial expertise. It lays a strong foundation of mutual understanding, trust, and communication, which can help your business grow and succeed.

Here are some steps you can take to establish rapport at your bank:

Schedule a meeting with a business banker at your bank to introduce yourself and your business. Use this opportunity to learn more about the bank’s lending policies and requirements.
Use your bank account regularly for all business transactions. This can help you establish a positive payment history and build trust.
Avoid overdrafts and NSFs from your bank account.
If your business needs a loan, consider applying for a small business loan through your bank rather than going to alternative lenders like online lenders or credit cards. This can help you establish a credit history with the bank and show that you are committed to building a relationship with them.
Attend local business events and network with other entrepreneurs and business professionals. Building these relationships can help entrepreneurs gain referrals and make useful connections.
Be open and honest with the bank about your business’s financial situation, plans, and goals. Honesty can help build trust.
Regularly communicate with the bank to nurture the relationship and ensure that they are aware of your business’s successes and challenges.

Taking these steps can help you establish strong relationships with your bank and increase your odds of obtaining business credit. Building a relationship with your bank is important in establishing financial credibility and creating a successful business.

5. Make Sure You Have a DUNS Number

A business needs a DUNS number to establish a credit file, enhance credibility, access loans and credit, and increase visibility. It’s a unique identifier assigned by Dun & Bradstreet (the leading business credit bureau) that allows for easy tracking and reporting of credit history, and it’s free and easy to obtain online.

Here’s how to make sure your business has a DUNS number:

Check if your business is listed with the major business credit reporting agencies, including Dun & Bradstreet, Equifax, and Experian. You can search for your business on their website or through a free Nav account.
Apply for a free D-U-N-S number from Dun & Bradstreet, which is required to create a business credit profile in their system. It can take 4-6 weeks to process.

When you take these steps, you can properly build business credit. It’s important to stay on top of your payments and ask others to report on your payments as well to ensure you build a positive credit history.

6. Establish Your First Trade Lines of Credit

Establishing the first tradelines (credit accounts) for your business is crucial to building and improving your business credit score. It involves paying on time and generating a positive payment history with suppliers or vendors that report to credit reporting agencies. By doing this, you increase your chances of obtaining financing and credit on favorable terms for your business.

To obtain vendor credit, follow these steps:

Locate 3-5 vendors who report to business credit reporting agencies.

See: Using 30-Day Net Vendors to Build Your Business Credit Score

Ask all vendors, suppliers, and service providers to report on your payments to improve your score — your CPA and attorney might be able to report on your payments as well.
Apply for vendor credit using your EIN without revealing your SSN.
Purchase products from these vendors, following their reporting terms.
Use the newly approved credit to buy over $50 worth of items.
Pay your accounts on time, preferably early in the billing cycle.

You can build business credit and establish a positive payment history by following these steps — this will allow you to access credit and better financing options in the future.

7. Pay Your Accounts at the Right Time

Paying business tradeline accounts on time is crucial to maintain a positive payment history, improve your business credit score, and build positive supplier/vendor relationships. Late payments can harm your credit score, trigger fees, and damage your reputation, making it harder to obtain financing and business opportunities in the future.

Here’s how to build business credit by paying on time:

Set up reminders, alerts, or auto payments to pay business accounts on time.
Pay your bills early to further improve your credit score, (this also helps you take advantage of discounts with suppliers).
Proactively contact suppliers to avoid late fees or negative reports if you can’t make a payment on schedule.
Connect the tradeline to your business account and use it to pay the credit card bill to establish a good payment history.

*By connecting your tradeline to your business bank account and using it to pay your invoices, you establish a good payment history and keep cash flowing through your account.

8. Check and Monitor Your Business Credit

Reviewing business credit reports often, promptly correcting any errors, and taking action if fraudulent activity occurs can protect you from business credit fraud and identity theft.

Here are some action steps to monitor your business credit effectively:

Understand the number of payment experiences required to qualify for different types of business credit — as a rule, you should gather at least 3 payment experiences on your business credit report.
Obtain credit reports from business reporting agencies such as D&B, Experian, and Equifax by obtaining a DUNS number for free from D&B and enrolling for reporting agencies.
Check credit reports every month to monitor for unfamiliar inquiries or accounts you didn’t authorize.
Review reports from all agencies quarterly, correct errors promptly, and take action if any fraudulent activity occurs.
Use a monitoring service to stay informed of any changes.

When you have three reporting payments, this gives you an 80 Paydex score, which is the ideal business credit score. However, specific lenders may have unique qualifying requirements.

9. Apply for Business Credit

When you have your perfect Paydex score (80), you’re ready to apply for business credit. You can start with store cards, revolving cash credit, or credit cards. Let’s take a quick look at each.

How to apply for business store credit:

To obtain revolving credit at popular stores like Best Buy, Amazon, Walmart, Target, and Staples, establish a business credit profile with at least a D&B and Experian score and at least five reported payment experiences.
Contact the store directly to learn how to apply, research their approval requirements, and complete the application without including your social security number.
Use your newly established business credit accounts to purchase products and timely pay bills while monitoring your credit reports.
Establish at least ten reported payment experiences, including vendor and revolving credit, to start getting approved for more cash credit.

How to secure revolving cash credit:

Establish a business credit profile with at least a D&B and Experian score and at least ten payment experiences, including at least one reported account with a $10,000 high limit.
Locate cash credit sources and complete the business application form without including your social security number.
Use your new credit to purchase items and timely pay bills to increase your business credit score.
Monitor your credit reports to ensure your new accounts are reporting.

How to use a business credit card:

Pay your business credit card on time to boost your business credit scores and improve overall creditworthiness.
Note that some business credit cards may report to the owner’s personal credit reports with all activity or just negative activity in the case of unpaid bills.
Before applying for a small business credit card, ensure you have good personal credit scores and sufficient income from all sources.
Review credit card offers carefully as terms and rewards vary widely.
Determine whether to issue business credit cards to employees to help with expense reporting and segregating business expenses.
Connect the tradeline to your business account and use it to pay the credit card bill.

By following these steps, businesses can establish a credit profile and obtain business credit. Establishing payment experiences for revolving and cash credit, researching approval requirements, and monitoring credit reports regularly are key to building and maintaining business credit. Using a business credit card can also be an effective tool to manage expenses and improve credit scores.

Asking for Help is Not a Sign of Weakness

Building business credit can be complex and overwhelming, but it’s essential for the success of your business. Remember that asking for help is not a sign of weakness. Resources and experts are available to guide you through the process and help you establish strong credit for your business. With guidance from people with experience, you can navigate the complexities of building business credit and take your business to the next level.

If you want to learn how to obtain up to $100K in business credit in as few as 30 days, join Business Credit Workshop today.

Low-Risk NAICS Codes +Best SIC Codes for Business Credit in 2025

By Joe

If you register your business in a high-risk industry, it can cause all sorts of problems down the road:

Limited access to credit and funding
Higher insurance costs
Increased regulatory scrutiny
Difficulty attracting investments
Challenges building partnerships

No matter what industry you’re in, choosing the right North American Industry Classification System (NAICS) codes and Standard Industrial Classification (SIC) codes can make all the difference.

Tony Hsieh once said, “Chase the vision, not the money; the money will end up following you.” I love this.

But, how exactly can you chase your vision and ensure the money follows in a high-risk industry, never able to break even with no access to funding (and paying out your ears in insurance)? — That’s where understanding low-risk NAICS codes and best SIC codes for business credit comes into play.

So, grab a cup of coffee, get comfortable, and let’s explore low-risk NAICS codes and the best SIC codes for business credit.

Here’s what’s in store:

NAICS Codes vs. SIC Codes: A Comparison
Understanding NAICS Codes
Identifying High-Risk NAICS Codes
What Industries Get the Most Funding?
How to Choose the Best NAICS Codes for Funding
- What NAICS Codes Get the Most Funding?
- Exploring SIC Codes for Business Credit
Frequently Asked Questions
Final Thoughts

Now, let’s dive in!

NAICS Codes vs. SIC Codes: A Comparison

Let’s take a look at the key differences between NAICS codes and SIC codes.

First, the structure and scope vary. NAICS codes get a bit more detailed with their five to six-digit codes — this provides a more specific breakdown of industries. On the other hand, SIC codes keep it simple with three to four-digit numbers, offering less granularity in industry categories.

Next, their adoption and age differ. NAICS codes are the cool kids on the block, introduced in 1997 as a modern and flexible system. They all but replaced the old-timer SIC codes from the 1930s. NAICS codes are widely used these days. Meanwhile, SIC codes are still kicking around in some older databases (and history books).

Furthermore, there are compatibility differences. NAICS codes like to play nice with international standards — this makes it easier to compare and analyze industries worldwide. SIC codes, on the other hand, are more focused on the home turf, primarily used within the U.S., and not always a match with international systems.

Finally, industry coverage deviates between systems. NAICS codes have a wider embrace, covering a broader range of industries to keep up with the modern business landscape. SIC codes, bless their old souls, might not have codes for some of the newer industry segments. NAICS codes are the more with-it choice if you want a comprehensive classification system.

In sum, NAICS codes are a fresh, versatile system, perfect for keeping up with the times and playing well with others. However, if you’re dealing with older databases, SIC codes can still be useful.

Even though they have been replaced by NAICS, government agencies and some funding companies continue to use SIC codes to classify companies based on their business activity.

Note: unless you’re a contractor for the government, you’re not required to enter a NAICS code when you register your business. However, you will need it when you file your taxes with the IRS.

You might also like: What’s the Best Payment Processor for a Small Business? Really

Understanding NAICS Codes

As previously mentioned, NAICS stands for the North American Industry Classification System. It was developed by the statistical agencies of the United States, Canada, and Mexico to classify businesses and industries.

NAICS codes are used to collect and analyze statistical data, facilitate comparability of data across countries, and assign businesses to specific industry categories.

The NAICS system is hierarchical and organized into sectors, sub-sectors, industry groups, industries, and national industries. At the most detailed level, there are six-digit NAICS codes. As of my knowledge cutoff in September 2021, there are over 1,000 six-digit NAICS codes covering a wide range of industries and business activities.

To select the appropriate NAICS code for your business, consider the primary activities and functions of your company. Start by identifying the core aspects of your business and the industry in which it operates. Then, find the code that best aligns with your business activities. You should select a code that accurately describes the primary nature of your business operations.

When applying for business credit, lenders consider the level of risk associated with the industry in which the business operates. Low-risk NAICS codes are less prone to economic volatility and have historically demonstrated stability. Having a low-risk NAICS code can positively influence lenders’ perception of your business, potentially increasing your chances of obtaining credit or better loan terms.

Let’s look at some examples of low-risk NAICS codes for different industries:

Real estate:
- 531110 – Lessors of Residential Buildings and Dwellings
- 531120 – Lessors of Nonresidential Buildings (except mini warehouses)
- 531190 – Lessors of Other Real Estate Property
Online retail:
- 454110 – Electronic Shopping and Mail-Order Houses
- 454210 – Vending Machine Operators
- 454310 – Fuel Dealers
Consulting:
- 541611 – Administrative Management and General Management Consulting Services
- 541612 – Human Resources Consulting Services
- 541618 – Other Management Consulting Services

For business credit purposes, I generally recommend new businesses choose an appropriate category that is very “general” (i.e. “business management”).

For comparison purposes, let’s peek at high-risk NAICS codes.

Identifying High-Risk NAICS Codes

Certain NAICS codes are considered “high risk” due to various factors that impact business stability and profitability.

Economic volatility, regulatory challenges, technological disruption, and environmental or safety hazards can contribute to the risk of certain NAICS codes.

Now, here are some examples of NAICS codes that can be considered high-risk:

Construction and Extraction:
- 238910 – Site Preparation Contractors
- 213112 – Support Activities for Oil and Gas Operations
- 238990 – All Other Specialty Trade Contractors
Accommodation and Food Services:
- 721110 – Hotels (except Casino Hotels) and Motels
- 722310 – Food Service Contractors
- 722511 – Full-Service Restaurants

Please note that the classification of high-risk NAICS codes can vary based on economic conditions and industry-specific circumstances. It is important to thoroughly research and analyze to assess the risk level of a particular industry and understand the potential challenges associated with specific codes.

Next, learn how choosing the right codes can impact your potential business funding.

What Industries Get the Most Funding?

The industries that get the most funding seem to vary greatly based on the type of funding.

For example, Kingscrowd — a sort of crowdfunding platform where venture capitalists and businesses can connect for investment opportunities — reported their top five industries for funding in 2020 as the following:

Alcohol, tobacco, and recreational drugs
Food, beverage, and restaurants
Consumer products, goods, and services
Media, entertainment, and publishing
Transportation, automotive, aviation, and aerospace

Meanwhile, WestTown Bank & Trust compiled an SBA financing report that same year, in which the highest volume industries were:

Full-service restaurants
Limited-service restaurants
Offices and dentists
General freight trucking
Hotels and motels

Note that this list is based on the number of loans obtained, not funding amounts.

Now, the SBA doesn’t allow some businesses to apply for funding through their programs — These include certain real estate investment firms, dealers of rare coins and stamps, banks and insurance companies, pyramid sales plans, businesses involved in illegal activities or gambling as the principal focus, non-profits, government-owned corporations, consumer and marketing cooperatives, and churches and organizations with religious objectives.

While some real estate investment firms can’t get SBA funding, $270 billion in SBA funds were allocated to commercial real estate in 2020. So, a lot of money is also poured into real estate.

And, Crunchbase reported the six industries with the highest growth potential in 2020 in a completely separate arena than other sources:

Med/biotech
Payments
Cybersecurity
Telehealth
Remote meeting/collaboration
Edtech

The answer to which industries get the most funding varies greatly, so it’s hard to say exactly. Generally, you need to look to the funding source for more information.

Now, let’s look at how NAICS codes can affect business funding odds.

How to Choose the Best NAICS Codes for Funding

Selecting the right NAICS codes can improve your chances of securing funding.

First, many funding programs, grants, and loans are specifically designed for businesses in certain industries or sectors. By correctly identifying your NAICS code, you can narrow down your search for funding opportunities that are tailored to your industry, increasing your chance to find relevant funding sources.

Next, funding programs often have specific eligibility criteria based on NAICS codes. Certain programs may prioritize or exclusively support businesses in particular industries. By accurately aligning your NAICS code with your business activities, you ensure that you meet the eligibility requirements for relevant funding programs.

Furthermore, funding institutions or investors may prefer to support businesses within industries they are familiar with or have expertise in. By selecting the right NAICS code, you can better attract the attention of funders who specialize in or have a keen interest in your industry, potentially increasing their confidence in your business and improving your chances of securing funding.

Funding opportunities can vary depending on numerous factors, including economic conditions and specific funding initiatives.

Here are a couple of examples of NAICS codes that have historically shown higher funding potential or are commonly associated with industries that receive funding support:

Information Technology:
- 541511 – Custom Computer Programming Services
- 541512 – Computer Systems Design Services
- 518210 – Data Processing, Hosting, and Related Services
Healthcare and Biotechnology:
- 621111 – Offices of Physicians
- 621610 – Home Healthcare Services
- 325414 – Biological Product (except Diagnostic) Manufacturing

Keep in mind that funding opportunities are subject to change. You need to conduct thorough research to identify specific funding programs, grants, or loans that are available for your industry and business needs.

What NAICS Codes Get the Most Funding?

According to the U.S. Department of Treasury’s Guide for Small, Minority-Owned, and Women-Owned Businesses, these are some of the NAICS codes that receive significant funding:

541519 – Other Computer Related Services
541512 – Computer Systems Design Services
322121 – Paper (Except Newsprint) Mills
517110 – Wired Telecommunications Carriers
511210 – Software Publishers
334111 – Electronic Computer Manufacturing
541611 – Administrative Management and General Management Consulting Services
541511 – Custom Computer Programming Services
561720 – Janitorial Services
561210 – Facilities Support Services

These NAICS codes represent industries that the Department of Treasury procures products and services from, and where a considerable amount of resources are spent. Small, minority-owned, and women-owned businesses are encouraged to market their capabilities within these industry codes to Treasury.

Let’s not forget to look at SIC codes — many lenders still rely on them.

Exploring SIC Codes for Business Credit

SIC codes, or Standard Industrial Classification codes, were primarily used before NAICS codes to classify businesses based on their industry and activities. The US government developed them to collect, analyze, and compare data across industries.

SIC codes were last updated in 1987 and can provide insights into a business’s operations, industry risks, and historical performance (yes, even today) — These are all relevant factors to assess creditworthiness.

As with NAICS codes, to choose the best SIC code for your business, you should always do your research. Consider the primary activities and functions of your business and select an SIC code that accurately represents the industry in which your business operates.

The best SIC code is the one that aligns closely with your business activities and industry classification and is considered low-risk by the lender you’re targeting.

With that said, here are a few SIC codes that are generally considered to have lower-risk profiles:

Real estate:
- SIC 6512 – Operators of Nonresidential Buildings
- SIC 6531 – Real Estate Agents and Managers
Online retail:
- SIC 5961 – Catalog and Mail-Order Houses
- SIC 5941 – Sporting Goods Stores
General business:
- SIC 8741 – Management Services

Of course, these examples are not exhaustive, and the relevance of specific SIC codes for obtaining business credit can depend on various factors, including the lender’s assessment criteria and industry-specific considerations.

It’s a good idea to consult with lenders and business credit consultants to identify the most appropriate SIC codes for your business and to understand the requirements for funding.

Frequently Asked Questions

How many NAICS codes should I use?

The number of NAICS codes you should use depends on your analysis needs. Consider factors like specificity, focus, and resource constraints. There is no fixed number; choose based on your objectives and available resources.

How might NAICS codes be most helpful?

NAICS codes are helpful for industry classification, market research, data analysis, business planning, government analysis, and business credit/funding.

What is the SIC code for financing?

The Standard Industrial Classification (SIC) code for financing is 6199.

What is the best NAICS code for a holding company?

The most suitable NAICS code for a holding company would be 551112 – Offices of Other Holding Companies.

Final Thoughts

Understanding NAICS codes and leveraging SIC codes can help you take actionable steps to secure funding and credit for your business. Identify high-risk industries, choose the best codes for funding, and stay updated on changes in coding systems. By using these codes effectively, you can unlock the doors to financial success for your business.

Want to learn how to obtain up to $100K in business credit in as few as 30 days? Join Business Credit Workshop today.

Shirtsy Review: A Business Swag Offer with Net 30 Option

By Joe

In today’s competitive business landscape, a strong brand identity is paramount to stand out from the crowd. An effective way to showcase your company’s image and values is through custom apparel and swag. Shirtsy, a popular business t-shirt club, offers a wide range of high-quality print-on-demand t-shirts that can elevate your brand and leave a lasting impression.

The reason I take an interest is because of the net 30 offer, which is a key element in building a strong business credit profile.

In this full review, I’ll delve into Shirtsy’s full print-on-demand offer (the range of products, available designs, customization options, and dropshipping offer) and explore my favorite parts of the offer (net 30 accounts, credit reporting, and credit bureaus).

But, is this the best offer for your business, or can you find one that’s better suited?

This is what’s in store:

Meet Shirtsy — The Business T-Shirt Club That Can Help You Build Business Credit
More Net 30 Options to Build Business Credit
Final Thoughts

Now, let’s get the ball rolling!

Meet Shirtsy — The Business T-Shirt Club That Can Help You Build Business Credit

Shirtsy offers a wide range of print-on-demand products for businesses to build their brand. From apparel like hoodies, shirts, and activewear for both men and women to home items like candles and wall art, Shirtsy has customizable options to suit various needs.

They also provide promotional items like magnets and postcards, as well as specialized merchandise for restaurants and professionals (i.e. chefs and skateboarders). With their print-on-demand services, businesses can create personalized items that showcase their brand identity and leave a lasting impression.

[Shirtsy Custom Desk LED Sign]

Whether it’s clothing, accessories, or promotional merch, Shirtsy offers a diverse selection to help businesses enhance their brand visibility and engage with their target audience effectively.

Product categories include Apparel, Home (candles, wall art, and frames), Promotional (magnets & postcards), Restaurant Merch, Office (business cards, mugs, and mouse pads), Create (puzzles and stickers), Portraits, and Drinkables (bagged coffee).

Shirtsy Company Overview

Shirtsy is a fashion apparel company based in Dania Beach, FL, dedicated to creating and selling unique and funny shirts. With a diverse collection of creative designs, they offer high-quality and distinctive shirts and other products that cater to various styles and preferences.

I didn’t know this before I went down the rabbit hole, but Shirtsy is managed by the same person as Crown Office Supplies, Dana Angelino. Angelino is also responsible for a few other up-and-coming Florida companies like Coconut Bikinis and Greentees and a handful of other businesses.

Shirtsy’s Net 30 Payment Terms

When considering signing up for Shirtsy’s Net 30 account, you need to understand the terms and how they will impact you. With this account, you have 30 days after each billing cycle to pay your balance. Shirtsy offers a 0% Annual Percentage Rate (APR) for purchases, based on your creditworthiness — This means you won’t be charged interest on your purchases if you pay off your entire balance by the due date each month.

But, there are other fees associated with the account.

Shirtsy charges an annual fee of $99.

The annual membership fee is non-refundable. However, as a gesture of goodwill, Shirtsy claims that they will report the fee to the credit bureaus as your initial credit payment — This should allow your business to begin building credit immediately, regardless of whether you utilize the services.

And, there are late fees depending on your balance:

$2 minimum finance charge
$15 for balances up to $100
$29 for balances from $100 up to $250
$39 for balances of $250 and over.

In addition, a returned payment fee of $39 may apply if your payment cannot be processed.

If you decide to sign up for the Shirtsy Net 30 Account, keep in mind that Shirtsy has the discretion to apply your payments in a way that benefits them the most — This means they may choose to pay off lower APR balances before the higher ones.

And, Shirtsy can change the rates, fees, and terms of the card agreement at any time, but they will provide you with advance notice of any rate or fee increases…If you don’t agree with the changes, you have the right to opt-out, but this may result in the closure of your account. You can continue paying the remaining balance under the old rates, fees, and terms.

Signing up for the Shirtsy Net 30 Account may affect your credit report. Shirtsy reports credit information to the credit bureaus, and they may request commercial reports and other information about your business. It’s crucial to provide accurate information and be aware of how your creditworthiness can be impacted.

To summarize the costs, you can expect to pay an annual fee of $99 and potential late fees and returned payment fees. However, if you manage your payments responsibly and pay off your balance each month, you can avoid interest charges.

Review the terms and conditions carefully before making a decision, and if you have any questions, reach out to Shirtsy for clarification.

What to Expect When You Apply for Shirtsy’s Net 30 Terms

Before applying for Shirtsy’s Net 30 account, make sure you meet the following requirements:

25% or more ownership of the company
Accurate details about your company, including its legal name, website, EIN, and DUNS number
Your full name, email address, password, phone number, and date of birth
Your company’s complete address
Ability to receive account status notifications via email, SMS, and phone

Approval is contingent on commercial data reports, and commercial debt servicing and collections may be provided by a third-party financial institution — the application does not result in a hard credit inquiry and will not affect your personal credit score.

To apply for Shirtsy’s Net 30 account, follow these simple steps:

Visit Shirtsy’s NET 30 Application page
Fill in the required information in the application form, including:
- First Name
- Last Name
- Email
- Password
- Company Name
- Website (optional)
- EIN
- DUNS (optional)
- Address (Street, Suite, City, State, Zip)
- Phone Number
- Date of Birth (Month, Day, Year)
Read and agree to the terms and conditions (and that the information is truthful and accurate)
Review the application details and click the Submit button to complete the application process.

That’s it!… You’ll receive further updates about your application status and instructions via the email you provide when you apply.

Does Shirtsy Report to Dun & Bradstreet?

According to their customer support, Shirtsy reports to Dun & Bradstreet and other credit bureaus such as Equifax, Credit Safe, NACM, LexisNexis, and Ansonia. Shirtsy reports to these credit bureaus for any purchase with a minimum amount of $30.

They require that you make the payment 2 to 3 days before your invoice due date for the payment to be reported. Still, they report your net 30 membership fee as a courtesy, even if no order is placed.

Shirtsy reports on the 15th of each month for on-time payments made the previous month. For instance, if you place an order in February but pay for it on March 1st, the payment will be considered a March payment and reported on April 15th.

However, if the payment is made on February 27th or 28th, before the end of the month, it will be considered a February payment and reported on March 15th.

It’s important to note that while some credit bureaus report accurately within 30 days, others have the discretion to delay reporting for a period ranging from 45 to 90 days.

More Net 30 Options to Build Business Credit

An annual fee is not typical with a net 30 offer. And, several other net 30 offers report on-time payments to business credit bureaus.

Using Net 30 vendors is a smart way to build your business credit score. These vendors offer payment terms where you pay the amount owed within 30 days. By choosing vendors that report to business credit bureaus, like Quill, you can establish trade lines and build credit.

Other vendors, such as BP Gas, Valero Gas, Advance Auto Parts, Gemplers, Supplyworks, Business T-Shirt Club, and Lowe’s, provide similar opportunities.

Final Thoughts

In this review, we’ve explored Shirtsy’s collection of custom swag and its knack for personalization. Then, we touched on the story behind the brand. We’ve also looked at the details of their net 30 payment terms (including the infamous $99 annual membership fee and potential late payment fees that could whack your credit score).

While Shirtsy has its charm, it’s a good idea to at least consider other net 30 account options without an annual fee. Just like mixing and matching outfits, exploring various vendors can help you find the perfect credit-building ensemble for your business.

Ready to discover the best net 30 vendors to level up your credit journey and obtain up to 100K in business credit in as little as 30 days? Join Business Credit Workshop today.

Sole Proprietorship VS LLC: How to Choose Your Entity Wisely

By Joe

Here, we teach people how to build business credit. And, establishing your entity is a super important step in the process — early on, the two most common choices are sole proprietor or LLC.

If you’re running a business as a sole proprietor, and considering an upgrade to LLC, you might already know that you can get some business credit even without registering as an LLC or corporation…But if you’re looking to take your business to the next level and secure larger no-doc business lines of credit (think 25k, 50k, 100k), you might find it challenging without a registered corporate entity.

Banks and lenders tend to prefer working with LLCs or corporations because they offer more protection and credibility. So, I highly recommend considering forming an LLC over a sole proprietorship if you’re serious about obtaining substantial business credit.

Don’t get me wrong — you can still apply for business credit cards as a sole proprietor. But, a registered LLC or corporation can make it easier to secure other types of financing and help you build a stronger credit profile for your business.

In this article, we’ll dive deeper into the differences between sole proprietorship and LLC, and explore their pros and cons, especially when it comes to business credit and financing options.

Here’s what we’ll cover:

Are You Sure You Only Want to Look at Two Options?
Sole Proprietorship vs Single-Member LLC
Here’s How Sole Proprietorships & LLCs Pay Taxes
- Comparison of Tax Rates & Deductions
- Can an LLC Be Used to Reduce Taxes?
How to Choose Between a Sole Proprietorship and an LLC
How to Register Your Business
Frequently Asked Questions
Conclusion: Which Structure is Best for You?

Now, let’s get going!

Are You Sure You Only Want to Look at Two Options?

Before we get too deep into the pros and cons of LLCs vs sole proprietorships, let’s take a quick look at some more entity types — I want to cover it all and give you everything you need to know. After all, it’s crucial to choose the right structure for your needs.

You might also like: What’s the Best Payment Processor for a Small Business? Really

Sole Proprietorship

A sole proprietorship is the simplest type of business structure and is owned by one person. The owner has complete control over the business and is personally liable for its debts and legal issues. Sole proprietorships are not taxed as separate entities from the owner, meaning that the owner reports the business income on their individual tax returns.

Limited Liability Company (LLC)

A limited liability company (LLC) is a type of business entity that gives the owners (“members”) “limited liability protection.” This is a swanky way to say that the member’s personal assets are separate from the company’s assets, and their personal liability is limited to the amount of money they’ve invested in the company.

LLCs can have one (“single-member”) or more (“multi-member”) members, and they can be taxed as either a sole proprietorship, partnership, S corporation, or C corporation, depending on how the members choose to be taxed.

S Corporation

An S corporation is another type of entity that you may want to consider — it’s a type of corporation that is taxed differently than a traditional corporation (C corporation). An S corporation’s profits and losses are “passed through” to its shareholders, who report the income on their individual tax returns.

This means that S corporations avoid double taxation. To qualify as an S corporation, a business must meet certain requirements set by the IRS.

C Corporation

Next, you have a C corporation — a traditional corporation that is taxed as a separate entity from its owners (“shareholders”); this means that the corporation pays taxes on its profits, and the shareholders pay taxes on the dividends they receive from the corporation.

C corporations offer limited liability protection for their shareholders, but they are subject to double taxation.

Partnership Options

At this stage, it’s also important to look at the two types of partnerships:

General partnerships are a type of business entity where two or more people share the management and ownership and management of the company. The partners share the profits and losses of the business and are personally liable for any debts or legal issues that the business incurs.

A general partnership is typically not taxed as a separate entity from the partners, meaning that the partners report the business income on their individual tax returns.

Limited partnerships are similar to general partnerships but with two types of partners: general and limited partners. General partners have control over the day-to-day business operations and are personally liable for any business debts and legal issues. Limited partners, on the other hand, have limited liability and are not involved in the management of the business.

Limited partnerships are typically taxed as pass-through entities.

Sole Proprietorship vs Single-Member LLC

A single-member LLC is not the same as a sole proprietorship. In terms of liability protection, taxation, ease of formation and maintenance, and flexibility in management, there are considerable differences between sole proprietorships and limited liability companies (LLCs):

First of all, sole proprietorships provide no liability protection for their owners — basically, he owner’s personal assets are at risk if the business is sued or incurs debt. In contrast, LLCs offer “limited liability protection” to their owners (their personal assets are generally protected from the company’s debts and legal judgments).

Next, sole proprietorships are typically taxed as pass-through entities, which means that the business’s profits and losses are reported on the owner’s personal tax return. LLCs can also be taxed as pass-through entities, but they provide the option to be taxed as a corporation (this can be advantageous for LLCs that want to cash in on lower corporate tax rates or retain earnings in the business without paying personal income taxes on them).

And, sole proprietorships are the easiest and cheapest business entities to set up…in most states, they require no formal paperwork or registration. Now, while LLCs require more paperwork and filing fees to establish, they offer formal structure and protection. Both types of businesses require ongoing maintenance, such as keeping accurate financial records and filing tax returns, but LLCs typically have more stringent compliance requirements.

Finally, sole proprietors have complete control over the management of their businesses…but (big but), this also means that they have full responsibility for all aspects of the business. LLCs are more flexible in terms of management structure — they can be managed either by the members or by outside “managers.” LLCs can also have varying degrees of ownership and voting rights among members, which allows for more customized ownership structures.

While both sole proprietorships and LLCs offer benefits and drawbacks, LLCs typically offer more liability protection, tax flexibility, and management structure options, but require more paperwork and ongoing maintenance.

Here’s How Sole Proprietorships & LLCs Pay Taxes

Sole proprietors report their business income and expenses on their personal tax returns using Schedule C (Form 1040). The net income from the business is then subject to self-employment taxes, which include Social Security and Medicare taxes. Self-employment taxes are calculated on Schedule SE (Form 1040) and are owed in addition to income tax.

→ Sole proprietors are also responsible for paying estimated taxes quarterly throughout the year.

LLCs have more flexibility in how they pay taxes — by default, single-member LLCs are taxed as sole proprietorships and report their business income and expenses on the same Schedule C as a sole proprietor (Form 1040).

Multi-member LLCs are taxed as partnerships and file Form 1065 to report their business income and expenses annually. But, LLCs can also choose to be taxed as S corporations or C corporations by filing Form 8832 or Form 2553, respectively.

Comparison of Tax Rates & Deductions

Sole proprietors and LLCs taxed as sole proprietorships pay income tax at their individual tax rates, which range from 10% to 37% depending on their taxable income. They are also subject to self-employment tax, which is currently 15.3%.

LLCs taxed as partnerships, S corporations, or C corporations are not subject to self-employment tax — Instead, the owners or shareholders pay income tax only on their share of the profits.

Both LLCs and sole proprietors can deduct typical business expenses, such as rent, supplies, and equipment, to reduce their taxable income.

Can an LLC Be Used to Reduce Taxes?

You can use an LLC to reduce taxes in a couple of ways:

Elect to be taxed as an S corporation — this allows the owners to pay themselves a reasonable salary and take the remaining profits as distributions. This can reduce self-employment tax, as only the salary is subject to Social Security and Medicare taxes.
Take advantage of deductions and credits — LLCs can deduct business expenses, such as rent, supplies, and equipment, as well as contributions to retirement plans and health insurance premiums. They may also be eligible for tax credits, such as the Research Tax Credit or the Small Business Health Care Tax Credit.

Note that sole proprietorships are eligible for many of the same write-offs and credits as LLCs. So, how can you choose between them?

How to Choose Between a Sole Proprietorship and an LLC

Here are some factors to consider when deciding whether to choose a sole proprietorship or an LLC:

Sole Proprietorship:

Simple to set up and maintain — A sole proprietorship requires minimal paperwork and legal formalities, making it easy and affordable to start and operate.
Complete control — As a sole proprietor, you have complete control over your business decisions and operations.
Tax benefits — As a sole proprietor, you report your business income and expenses on your personal tax return, which can simplify tax preparation and potentially lower your tax burden.

Limited Liability Company (LLC):

Limited liability protection — An LLC provides limited liability protection to its owners, meaning that the owners are not personally responsible for the company’s debts and liabilities.
Credibility and professionalism — An LLC is often seen as a more credible and professional business entity than a sole proprietorship, which can be an advantage when dealing with customers, vendors, and investors.
Flexibility in taxation — LLCs have the option to be taxed as a partnership, an S corporation, or a C corporation, providing flexibility in tax planning and potentially reducing overall tax liability.

In general, if you’re a small business owner with low risk and relatively simple operations, a sole proprietorship can be a decent choice. However, if you are concerned about personal liability or are looking to grow your business and establish credibility, an LLC may be a better option. It’s always a good idea to consult with a lawyer or accountant to determine the best business structure for your specific needs and circumstances.

With that said, I know that you can get business credit with a sole prop but you can get serious no-doc business lines of credit (25k, 50k, 100k) without a real entity. so I recommend getting an LLC. You can get business credit cards but banks want to see an LLC or corporation to extend business lines of credit.

How to Register Your Business

Here are the basic steps to file the necessary paperwork for forming an LLC and registering as a sole proprietor.

Of course! Here are some more conversational explanations of the steps to form an LLC and register as a sole proprietor:

How to form an LLC:

Pick a name for your LLC that’s not already taken in your state and meets your state’s requirements.
File an Articles of Organization form with your state’s Secretary of State office. This form typically asks for basic information about your LLC, like its name, address, and the name and address of your registered agent.
Draft an operating agreement for your LLC. This outlines how your LLC is run and who owns it. Some states don’t require an operating agreement, but it’s still a good idea to have one.
Get any necessary licenses and permits for your business. Depending on where you live and what you do, you might need specific licenses or permits to operate your LLC.
Apply for an EIN from the IRS if you plan on hiring employees or opening a bank account for your LLC.

How to register as a sole proprietor:

Decide on a name for your business, whether it’s your own name or something else.
Get any licenses or permits you need to legally run your business in your area.
File a “Doing Business As” (DBA) form with your state’s business registration office to register your business name.
Apply for an EIN from the IRS if you plan on hiring employees or opening a business bank account.

Remember, the specific rules and requirements for forming an LLC or registering as a sole proprietor vary by state and local municipality, so be sure to do your research and follow the guidelines for your location. For example, in Oregon, you can legally run a business after filing an “Assumed Business Name” alone, but may still need local business licenses.

Frequently Asked Questions

What are the disadvantages of an LLC vs a sole proprietorship?

LLCs can be more costly and require more paperwork than sole proprietorships, but they offer greater personal liability protection. Sole proprietorships are generally easier and cheaper to set up, but leave you personally responsible for any business debts or legal issues.

What is more risky, a sole proprietorship or an LLC? Why?

A sole proprietorship is generally riskier than an LLC, as sole proprietors are personally liable for any business debts or legal issues. Forming an LLC can offer greater personal liability protection, which can help shield the owner’s personal assets from business-related risks.

How do business owners pay themselves?

Business owners can pay themselves in different ways, including salary, dividends, or draws/distributions from business profits, depending on the business structure and personal financial needs. And, some companies pay the owner’s salary with a business credit card. It’s important to consult with a financial advisor or accountant to ensure compliance with legal and tax requirements.

Conclusion: Which Structure is Best for You?

Whether you should choose a sole proprietorship or an LLC is based on a number of factors. Do you want more ease or more protection? Do you have specific tax needs? By now, you should have an idea which is best for your operations.

However, if you want substantial lines of business credit, there is a clear choice: form an LLC…You can certainly obtain business credit cards as a sole proprietor, but to get those larger lines of credit in the tens and hundreds of thousands range, most banks will want to see a more formal business entity like an LLC or corporation.

To learn how to obtain up to $100K in business credit in as little as 30 days, join Business Credit Workshop today.

Is it Illegal to Use a Business Credit Card for Personal Use? +More Answers

By Joe

Have you ever wondered whether you can use your business credit card for personal expenses?

It’s a common question among business owners, but the answer can be a bit tricky.

While we can’t give legal advice (if you need that, please talk to your attorney and your CPA), we’re here to provide you with helpful information that can guide you in making informed decisions for your business — One interesting thing we found out is that using your business credit card to pay yourself a salary as an employee of your own business can be considered a legitimate expense.

Pretty cool, huh?

We’ll delve into this and other commonly asked questions about business credit card use in this article, so keep reading to find out more!

Here’s what’s in store:

Scenario: Employee Uses Company Credit Card for Personal Use
- How to Prevent Personal Spending on Company Credit Cards
General Rules for Business Credit Cards
- What Can You Use Business Credit For?
  - Paying Yourself With Business Credit When
- Is It Illegal to Use Business Funds for Personal Use?
How Business Credit Affects Personal Credit
- Is it Better to Use Business Credit Card Points for Personal Things?
Conclusion: Is it Illegal?

Let’s rock and roll!

Scenario: Employee Uses Company Credit Card for Personal Use

While most of our content is targeted at business owners, you might be reading this because you’re wondering if you can add a pair of shoes to your business order, and still pay with your company’s corporate card. Here’s what I can tell you.

When an employee uses a company credit card for personal expenses, it can cause a lot of problems.

First off, it’s usually against company policy, which means the employee could face some serious consequences like getting in trouble with the boss or even losing their job. From a legal standpoint, this is risky for all parties because if the expenses are shady or illegal, both the employee and the company could face a run-in with the law.

Next, staff members that use a company’s card for non-business expenditures can complicate finances because it’s hard to keep track of personal expenses and separate them from business expenses — it could cause some major issues with taxes and budgets down the road.

Lastly, if personal spending exceeds the credit limit on the card, it can result in fees or penalties, which will hurt the company’s bottom line.

Can you use business credit card for personal use Reddit

_{Image source: Reddit}

So, if you accidentally used a company credit card when you didn’t intend to, or if you notice that an employee used your business credit card for something questionable, it’s best to act fast.

How to Prevent Personal Spending on Company Credit Cards

Q: Why does our Amazon business report show an order for a gold-plated toilet seat?

A: Someone wanted to feel like a VIP on the company’s dime.

In all seriousness, it’s crucial to make sure that employees use company credit cards responsibly and only for legitimate business expenses. Otherwise, the company could end up footing the bill for some pretty outrageous purchases!

Here are some actions you can take to avoid personal employee spending on your business credit cards:

Create clear policies — Make sure everyone knows the rules when it comes to using company credit cards. This means setting out clear policies on what expenses are allowed and what expenses are not allowed.
Set spending limits — Give your employees some guardrails by setting limits on how much they can spend with the company credit card. You can also set daily or weekly limits to help control spending.
Monitor transactions — Keep a close eye on credit card transactions to make sure there are no unauthorized or personal expenses. This means setting up alerts to notify you of any unusual transactions or spending patterns.
Require receipts — Make sure your employees know that they need to submit receipts for all credit card expenses. This helps ensure that all expenses are legitimate and for business purposes.
Provide training — Never assume that everyone just knows how to use a company credit card. Provide training that covers your company’s spending policies, guidelines, and best practices for managing credit card expenses.

By doing these things, you can help prevent personal employee spending on company credit cards…. and ensure that all credit card expenses are legitimate and for business purposes only.

General Rules for Business Credit Cards

First and foremost, you need to understand that business credit cards are intended for business expenses…legit ones! This means that you should only use the card to pay for things that are related to your business, like office supplies, travel expenses, and other business-related costs.

Next, it’s vital to keep your personal and business expenses separate (i.e. you should never use your business credit card to pay for personal expenses, like groceries, clothing, or personal entertainment).

On a similar note, you need to keep track of your spending. You should monitor your credit card statement regularly to ensure that all charges are legitimate and for business purposes. When issuing business credit cards or corporate cards, it’s also a good idea to set spending limits for yourself and your employees to prevent overspending.

Lastly, be sure to pay your credit card bill on time and in full every month — Late payments can devastate your business credit score and result in hefty late fees and interest charges (remember, you should credit card funds to invest in assets, not squander on liabilities).

Note, that business credit card policies vary between credit card companies and businesses have a right to set unique spending policies within legal guidelines in their jurisdiction.

By following these general rules, you can use your business credit card responsibly and avoid any potential issues down the road.

What Can You Use Business Credit For?

In a word, you need to use your business credit for business expenses.

However, in some industries, expenses that seem frivolous can be completely above board — for example, stylists in the beauty business need to look nice, so they can buy makeup, clothing, and haircare products. And, for businesses with dress codes, you might have a green light on that Armani suit you’ve been eyeballing.

So, what constitutes a business expense?

A business expense is any cost incurred as part of running your business, most commonly:

Rent for your office space
Equipment purchases
Employee salaries
Marketing expenses
Travel costs.

In addition to these more obvious expenses, there are also many other items that can be considered legitimate business expenses, depending on your industry and specific needs. For example, as previously mentioned, in certain industries, expenses like clothing, makeup, and hair care products can be considered legitimate business expenses.

Other examples might include:

Home office expenses
Professional development courses or certifications
Certain meals and entertainment expenses (if they are related to business activities)

It’s important to note, however, that not all expenses will be considered legitimate business expenses. Any personal expenses, such as vacations or personal entertainment, should never be charged to your business credit card.

In general, it’s always a good idea to consult with a financial professional, like an accountant or tax advisor, to ensure that you are using your business credit card appropriately (and taking advantage of all eligible tax deductions).

Paying Yourself With Credit When You Own a Business

As a business owner, there are a few different ways you can pay yourself. One common method is to pay yourself a salary, which you can do using a number of different payment methods including checks, direct deposit, or even a credit card.

Yes, you read that right – you can pay yourself a salary with a credit card!

Now, before you go swiping that plastic, it’s important to understand the pros and cons of each payment method.

For example, paying yourself with a credit card may be convenient, but it can also come with high interest rates and fees if you don’t pay off the balance each month…while other payment methods like checks and direct deposit may be more traditional, they might also require more effort and may not be as flexible.

Regardless of which payment method you choose, it’s important to manage your business finances wisely:

Create a budget
Keep track of expenses
Set aside money for taxes and emergencies.

By taking these steps, you can ensure that you are paying yourself in a sustainable way that supports both your personal and business financial goals.

So, is It Illegal to Use Business Funds for Personal Use?

In general, it can be illegal to use business funds for personal use, especially for employees whose companies prohibit it; this includes paying personal expenses and withdrawing cash from a business account to spend on personal items.

Is using a company credit card for personal use embezzlement?

How often people get caught doing this, I can’t begin to guess. And, the penalties would surely vary depending on the severity of the crime — which is why you should consult with an attorney or CPA to ensure legal compliance.

Using business funds for personal expenses can sometimes be considered embezzlement or fraud, and can result in serious legal consequences…It can also damage your business’s financial stability and reputation.

That being said, in my experience, there are some exceptions to this (like a business owner paying their own salary).

How Business Credit Affects Personal Credit

As a business owner, you need to understand the relationship between your personal and business credit. While they are technically separate, your personal credit can still impact your LLC in a few different ways.

If you have a poor personal credit score, it may be harder to get approved for business loans or credit cards…On the other hand, a strong personal credit score can make it easier to access funding and other resources for your business.

To manage both your personal and business credit effectively, there are a few key tips to keep in mind:

First, make sure to keep your personal and business finances separate as much as possible: open separate bank accounts and credit cards for your business and avoid using your personal credit to cover business expenses.

Next, be sure to monitor your credit scores regularly and address any errors or issues that arise promptly.

And, you need to maintain a good credit utilization ratio – that is, the amount of credit you are using compared to the amount you have available…Both personal and business credit scores are impacted by this ratio, so it’s important to keep your balances low and avoid maxing out your credit cards.

Is it Better to Use Business Credit Card Points for Personal Things?

While I wouldn’t encourage you to spend business credit on personal items, rewards redemption is another story.

Using your business credit card points for personal things can be a tempting proposition, especially if you’ve been racking up rewards points with your business purchases.

I’ve redeemed my Marriott Bonvoy rewards on more than one family vacation.

However, whether it’s better to use those points for personal use ultimately depends on your business’s financial situation and your personal financial goals.

Here are some things to consider:

If your business has a cash flow problem and you’re relying on credit card rewards to make ends meet, it’s probably not a good idea to use those points for personal purchases. Instead, you should focus on using your rewards to offset your business expenses.
On the other hand, if your business is doing well and you have plenty of cash on hand, using your rewards for personal purchases can be a great way to enjoy some extra perks. Just be sure to keep careful track of your expenses and make sure you’re not putting your business at risk by overspending.
If you have a specific personal financial goal, such as saving up for a down payment on a home or a car, using your business credit card rewards to help achieve that goal can be a smart move. Just be sure to weigh the potential benefits of using your rewards against any fees or interest charges associated with cashing them in.

The bottom line is that you should consider the financial health of your business and your personal financial goals before making a decision.

Conclusion: Is it Illegal?

I’ve already said this a few times, but I would rather sound like a broken record than steer you down the wrong path: when in doubt about business credit spending, consult an attorney or CPA.

The short answer is that business credit spending for personal use can be risky and it’s likely to complicate your business budget. Yet, there are plenty of totally above-water business credit spending categories you might not have considered (paying yourself a salary) — I tried to cover them here.

If you want to learn how to obtain up to $100K in business credit in as few as 30 days, join Business Credit Workshop today.

Ty Crandall’s Story: A Quick Look at the Mind Behind CreditSuite

By Joe

When it comes to building business credit, Ty Crandall’s name stands out. As the founder of Credit Suite, Ty has helped thousands of entrepreneurs obtain business credit that’s not linked to their personal social security numbers.

With nearly two decades of experience in the financial services industry, Ty has become an authority in business credit building, scoring, and financing…plus he’s been featured in publications like Forbes, Entrepreneur, and Inc.

So, are you curious about how Ty became the go-to guy for business credit or whether or not you can trust him? Keep reading to learn more about his story, his net worth, and his approach to business credit.

Here’s what’s in store:

Ty’s Career Story
Ty’s Approach to Business Credit
Final Takeaway

Now, let’s get to it!

Ty’s Career Story

Ty Crandall, a Tampa-based entrepreneur, founded Credit Suite (a company that helps entrepreneurs get business credit and financing) over 12 years ago. He is a business credit-building and business loan specialist and fundability expert. Before Credit Suite, Ty founded Elite Credit Inc. (a credit repair offer) and worked as a CEO for TLC Jumbo Mortgage Services for 7 years.

He served in the US Air Force for four years, from 1994 to 1998 before he studied Psychology at the University of South Florida. At this point, Ty has helped over 100,000 entrepreneurs build business credit and access financing with his extensive knowledge of the industry.

Ty’s experience, education, and dedication to helping entrepreneurs expand their business credit options show me that he’s legit.

Ty’s Approach to Business Credit

If you want to learn more about Ty’s approach to business credit, the best place to start is his content — he’s created a myriad of resources worth checking out.

Website: TyCrandall.com

TyCrandall.com is where Ty promotes his most up-to-date speaking, coaching, and retail offers (books). Here, you can get his up-to-date Multiple Uses Model for free, which is a marketing guide that spells out how you can create up to 20 brand assets from one piece of content.

He also promotes a coaching offer — for a very small group of elite entrepreneurs — where he guides business owners to scale their companies to $10K+ in revenue.

CreditSuite YouTube Channel

CreditSuite’s YouTube channel offers solutions for small businesses looking to improve their fundability, build business credit, and obtain loans and credit lines.

The channel emphasizes the importance of meeting lending guidelines and building credit in the business name with an EIN to avoid personal guaranteeing of finances. Credit Suite aims to give businesses the competitive advantage and capital they need to succeed and grow with confidence.

The Business Credit and Financing Show (Podcast)

A few years ago, I actually had the opportunity to meet Ty when he reached out and invited me to speak on his Podcast, The Business Credit & Financing Show — he was super knowledgeable (we could have chatted about this stuff all day). If you want to hear how that went, you can access the full episode here.

The Business Credit and Financing Show covers a wide range of topics related to obtaining business credit and financing for starting and expanding your business. We feature insightful discussions with prominent influencers and industry experts on marketing and growth strategies, aimed at assisting you in establishing and growing a successful business.

Consumer & Business Credit Books

Ty has written two bestselling books on consumer credit — Perfect Credit and Business Credit Decoded. And, he’s attributed to seven books, most recently business credit titles like Business Credit: The Complete Step-By-Step Guide (most popular) and Business Credit Decoded (newest).

Most of Ty’s books get rave reviews, though some of them didn’t get a ton of traction…all are available in paperback and most in Kindle formats.

Business Credit Course on Udemy

Ty’s Udemy course — How to Get Credit for Your EIN That’s Not Linked to Your SSN — aims to help students set up their business in a credible way to meet lender and credit issuer guidelines.

By the end of the course, students will be able to navigate their business credit reports, build initial business credit reports using vendor accounts, and obtain high-limit revolving store and fleet credit cards.

The course includes 1.5 hours of on-demand video, 1 downloadable resource, and a certificate of completion.

While the course content was good, it hasn’t been updated since 2016, and I can safely tell you that a lot has changed in the industry since then.

Media Appearances/Guest Contributions

You’ll find Ty’s contributions around the web on various business, finance, and even legal publications. For example, at one point, he was a regular contributor to Inc. Masters. His advice has been mentioned in Entrepreneur as well as Forbes.

And, if you do a quick search for articles by Ty Crandall, you’ll see that he’s been hard at work, over the years, making his rounds with hundreds of blogs and business websites.

Final Takeaway

And there you have it! That’s a quick look at the man behind CreditSuite, Ty Crandall. From his early career in finance to his success as an entrepreneur, Ty’s story is truly inspiring. His approach to business credit has helped countless entrepreneurs build and grow their businesses, and his legacy is one of innovation and success.

If you’re interested in learning more about Ty and his work, be sure to check out TyCrandall.com and the CreditSuite YouTube channel. You can also tune in to The Business Credit and Financing Show podcast or read any of Ty’s consumer and business credit books.

If there’s one thing to take away from Ty’s story, it’s that with hard work, determination, and the right tools and knowledge, you can achieve success. So, go out there, build your business, and make your mark on the world!

If you’re interested in learning how to get up to $100K in business credit in as few as 30 days, join Business Credit Workshop today.

A Credit Stacking Breakdown: What it is & How it Works

By Joe

Credit stacking is one of the latest catchphrases in the credit card realm. Naturally, as a business credit coach and expert, I had to check it out. I did a ton of research into the system (everything shy of hopping on a strategy call and joining the community) to see what I could find out.

As usual, I want to share what I’ve learned with you.

At first glance, credit stacking seemed a lot like what we teach at Business Credit Workshop…but it’s not — there are some fundamental differences. I’ll summarize the most glaring distinctions before I wrap up.

If you’re thinking about hopping on a call with the Credit Stacking team to become a member, read this first.

Here’s what’s in store:

What is Credit Stacking, Exactly?
- What is the Credit Card Stacking Strategy?
Frequently Asked Questions
The Credit Stacking Book by Jack McColl
The Takeaway — Is Credit Stacking Legit?

Now, let’s hop to it!

What is Credit Stacking, Exactly?

When I first heard the expression, I thought credit stacking might be akin to credit piggybacking, but I was wrong.

Credit stacking is a popular buzz phrase (pretty catchy, really!) coined by Jack McColl — it refers to building multiple lines of credit in an alleged specific order to obtain large lines of credit. Essentially, it is a framework to apply for multiple cards at once with the least negative impact on your credit.

With credit stacking, you can get up to hundreds of thousands of dollars in funding by applying for multiple credit cards and taking advantage of business credit (which is separate from personal credit).

McColl teaches about the system through a credit stacking course, online membership, and a Facebook group. Through these channels, members allegedly learn how to maximize their credit limits to grow businesses from the ground up with tens of thousands of dollars in credit.

The application process to join is simple and seems to help gauge where potential members are on their credit journey — which is helpful for a customized strategy.

🚩 The company doesn’t display the cost of membership anywhere on its website and some sources say that it costs $4,500 or more to join.

What is the Credit Card Stacking Strategy?

With the Credit Stacking system, essentially, you want to apply for cards in a specific order that might improve your odds of successful funding…this requires that you aren’t over-leveraged in the way that you have too many inquiries showing on your credit profile.

To do this, you need to know which banks pull your info from which credit bureaus, and apply in such an order that all of your inquiries hit your report with minimal negative impact on your score.

And, since Chase Bank is more strict about how many credit inquiries you can have to qualify, you should apply for credit with them first.

Frequently Asked Questions

Why is credit stacking effective?

Credit card “stacking” is effective because it ideally maximizes the amount of credit you’re able to obtain by minimizing the impact of inquiries on your consumer credit report.

What is the credit stacking analogy?

Think of credit stacking as building a tower out of blocks. You start with a solid foundation, like a base of small credit lines, and then add more blocks (larger lines of credit) on top in a specific order. This way, you can build a strong and stable tower of credit that allows you to access more funding opportunities over time. It’s like playing Jenga, but instead of removing blocks, you’re carefully adding them to build something bigger and better!

What are the effects of credit stacking?

Credit stacking can help you spread out your balances, increase your credit limits, and minimize the negative impact of too many inquiries. However, this can lead to high interest charges if you can’t keep up with payments, so it’s important to be mindful when using this technique.

The Credit Stacking Book by Jack McColl

I already told you that I didn’t hop on a strategy call or join the Credit Stacking group…what I did is read Jack McColl’s book, Credit Stacking: Accelerate Financial Freedom With Business Credit.

I’ll tell you that it seems to be self-published. It could have used an editor to help condense some of the information (which is absolutely valuable nonetheless).

And, while I can’t shame the hustle, the book was pretty promo-heavy, leading readers into the Credit Stacking program by teasing some of the resources that are exclusive to members.

With that said, I was taking notes the entire time, and here’s what I got from it.

→ If you don’t want to read the entire synopsis, you can skip to the final takeaway.

Chapter 1: Where Do You Want to Go?

The first chapter of the book is all about mindset and vision — this is probably my favorite chapter because it’s so interactive. Before you implement the steps to stack credit and build your dream business, you need a vision.

McColl leads into the book with questions such as, “Where do you want to live?” “What relationship do you want to have?” and “What career do you want?” He recommends you get a clear vision by answering all of the questions in his sequence before you move forward.

Next, he shares his framework for daily journaling, recommending that you do something similar. Every day, you should write about the following:

What you’re grateful for
Affirmations for yourself
A recent win
Desires for yourself
A power list of needle-moving tasks you can accomplish today

With a clear vision and daily check-ins with yourself, you can take an honest look at your discipline, resilience, and environment to determine what you need to do to make your business strategies work.

Before wrapping up, the first chapter looks at good debt vs bad debt. In a nutshell, good debt is invested in assets that generate cash flow or equity and bad debt is costing you money… think of it as assets = good debt, liabilities = bad debt.

Chapter 2: Personal Credit

The second chapter is all about consumer credit. Good personal credit gives you access to rewards cards as well as low-interest auto and home loans. And, according to McColl, better access to 0% interest business capital.

This is where the book starts to talk about the technical aspects of credit stacking like awareness of the three consumer credit bureaus, VantageScore vs FICO, credit score factors, and credit repair.

When speaking on the three major credit bureaus, McColl mentions a specific template that Credit Stacking members use to analyze their credit profiles but doesn’t offer the template in the book.

Vantage scores are more readily available for free (via Credit Karma, for example), but lenders typically pull FICO scores. McColl recommends myscoreiq.com, which costs $35.99 per month, to monitor your FICO score. There’s a gray area between scores of 500 to 700, but below 500 typically means that a borrower is high-risk, and above 700 usually signals that a borrower is low-risk.

Naturally, lenders like higher credit scores.

But, if you have a low score, don’t let it discourage you, because, as McColl states, this can always be fixed.

This chapter also breaks down the factors of a credit score and what you might do to maintain or improve each factor — this information is typically available with any credit monitoring system, but it’s good for beginners to understand:

Payment history and amount of debt have the highest impact while credit mix and new credit are important too. After explaining each factor in more detail, this chapter goes on to share a few case examples of individuals who used the credit stacking strategy.

One Credit Stacking member was able to obtain a $50K line of business credit from Chase Bank. McColl claims that this was 0% interest capital. In the case of this borrower, they had a strong personal credit profile, and their business entity was established properly…they also had a checking account and a connection with the relationship manager at the bank where they applied for the loan.

Here, McColl mentions an important fact: You don’t necessarily have to have a large, established business to obtain large lines of credit. Small, new businesses can obtain credit too.

Many business owners who started out with poor credit were able to obtain large lines of credit after implementing a credit repair system. McColl mentions that this process starts by disputing anything negative that might be holding your score down. He mentions that the Fair Credit Reporting Act (FCRA) has laws in place that protect consumers and enables them to dispute anything that is unfair or inaccurate and that the burden of proof is on the creditors.

McColl mentions a credit repair partner that Credit Stacking members can be connected with and cites some happy endings after working with these programs.

⚠️ I do not ever recommend unethical exploitation of laws or institutions that are in place to protect you. I do recommend educating yourself on the regulations and strategies to repair your consumer credit profile.

Chapter 3: Credit Cards and Calculated Risk

The third chapter of the book starts with a pretty long intro to the story of Amazon. Then, it talks about why you should use credit cards instead of other types of capital to fund a business: protection, rewards, card benefits, and relationship building.

Here, the book fails to mention freedom (this is why I like business credit over other funding types). Traditionally, when a company gets funding, it might have to rely on personal capital or investors who want control — with business credit, the business owner maintains control and freedom to make their own choices for their company.

Next, McColl recommends some credit cards you should apply for, and ones that you shouldn’t. He says that he doesn’t recommend that anyone apply with Capital One because they pull from all three bureaus, creating a ding on all three consumer credit reports. This is true, but he doesn’t mention that these “dings” last two years — they’re temporary.

Then, McColl recommends some questions to ask yourself when applying, such as, “Do you have a travel card yet?” and, “Which bank are you looking to build a relationship with?”

Before he moves on, he covers when to apply, how to apply, and how to request reconsideration on a failed application.

Chapter 4: Using Business Credit to Gain Momentum

According to McColl, the key to business success is momentum — the value of your company has a direct impact on momentum.

The fourth and most extensive chapter covers the different ways you can fund your business to create momentum:

Your own cash (personal capital) — with this, you’ll foot 100% of the risk
Business loan — lofty interest rates on a non-transferable lump sum of debt
Get a partner — you’ll have to share control of business decisions
0% interest business credit card — if you keep your relationship with the bank in good standing, you’ll keep yourself “just one application away” from more business credit

Note: McColl doesn’t mention all of the ways to fund a business like Y Combinator, seed funding, MCAs, nor the many, many others.

Next, he explains that business credit won’t impact your FICO score, which is mostly true…if you apply for the business credit cards that are reported to D&B and not the three consumer credit bureaus.

He then shares the process for setting your business up for business credit.

This section discusses business SIC codes, and the fact that some are considered higher risk than others — General businesses such as “consulting” and “management” are best and may get better business credit results than “credit coach” or “real estate agent.”

In a nutshell, you need a NAICS code that fits your business narrative in a low-risk category.

McColl recommends that you look up your business on D&B to see if you have a DUNS number. If you don’t, create a profile with D&B…and make sure your NAICS code is the same with your bank, D&B, and your state business registry.

McColl strongly recommends that you use Chase Bank for your business checking, as he’s seen the most business credit success with Chase, however, he cites other major banks like BoA and US Bank and claims that you should have similar results.

Basically, he says that you should only build a relationship with a bank that offers 0% interest business credit cards. And, he shares his framework for building your business credit:

Open a business checking account with the main (big) bank
Open a business checking account with a regional bank or credit union
If you already have an account with a regional bank, move some of your capital to a big bank
Get your FICO score above 780
1. No derogatory marks
2. No more than one late payment
3. 4-5 accounts that are at least three months old

The framework we teach at Business Credit Workshop is quite a bit different.

Next, McColl covers each of the four funding types from the beginning of the chapter (personal capital, business loan, equity partner, and business credit) in detail before he starts elaborating on business credit.

Business credit is a way for you to finance business ops by borrowing from banks using your EIN rather than your SSN. McColl says you should have an LLC or a Corporation rather than a sole proprietorship, and I agree… 💯

After this, he lists a handful of the benefits of business credit, such as the fact that business credit bureaus don’t include opening dates on their reports and you can go through rounds of applications (“credit stacks”) without harming your credit score.

Then, McColl lists some ideas for ways to use business credit to grow your business (invest in equipment, rent office space, hire a mentor, etc.) and lists new business ideas for entrepreneurs:

Start a trucking business
Start an Airbnb
Launch an eCommerce store
Buy a rental property with the BRRRR method
Fix & Flip a property

He mentions that there are ways to liquidate credit cards into cash, but doesn’t mention what they are.

Recommended Resources:

This chapter also mentions business credit requirements such as on-time payment history on your personal credit profile, a variety of accounts, and sizable limits on your consumer cards. Here, it starts to feel like the book exerts excessive information about consumer credit.

McColl shares the difference between revolving credit cards — with and without interest — and charge cards (Capital on Tap, Divvy, and Amex) are discussed… he recommends that you max out your Amex cards and pay them off in full to get your limit increased.

There are companies that will apply for business credit for you, but McColl recommends DIY credit applications. The companies that offer services like this aren’t always thinking in your best interest where high card limits and the number of hard inquiries are concerned. Plus, you have to pay fees for these services.

The book then mentions that 0% interest credit cards aren’t necessarily easy to find (there was no database that houses all of the banks’ current promotions, so McColl built one…though, it’s only available for Credit Stacking members).

In place of a database of cards with 0% introductory rates, you can use McColl’s recommended searches:

“[your state] 0% interest business credit cards”

As he wraps up, McColl summarizes inquiry stacking. “Stacking” credit inquiries can allow you to maximize your business credit. When you know which banks pull from which bureau, not all of your inquiries will show up when you apply for multiple cards.

And, Chase is stricter about maximum credit inquiries, so McColl recommends you apply for any Chase business credit cards first.

Tip: If you submit your applications in the branch, your applications won’t be flagged for technical issues like invalid IP, flagged VPN, or grammar mistakes. McColl suggests that you submit your application through a relationship manager for the best results (they work directly with the underwriting team, so they know what you need to get credit and can help you with your applications).

The book then states that it is difficult to find a bank’s relationship manager to submit your applications and that Credit Stacking members are introduced to relationship managers as part of their membership.

Finally, McColl shares his advice for filling out credit applications accurately.

Chapter 5: Money

In the fifth chapter, wealth accumulation and money are covered.

The first principle of wealth that McColl covers is compound interest. For example, you have $100 growing at 10%, and you earn $10 the first year. So, the next year, you have $110, and your earnings are $11. As this continues, your annual growth grows.

And, if you have $250K to invest initially, with a 10% growth rate, you would have $11M after 40 years.

There is a lot more information in this section about investing — buying low and selling high, dollar cost averages, etc — including examples of billionaires who invested wisely.

The key takeaway is that you need to invest wisely in facets of your business that produce income and wealth.

McColl then covers the importance of educating yourself — both about money and about your industry. Essentially, if you learn specific skills from experts in a niche, you save yourself the time and heartache of learning through trial and error.

Likewise, it’s important to join networks of successful people who you can piggyback from their knowledge. McColl recommends in-person mastermind events in particular.

Next, he covers Roth IRAs and the “infinite banking” concept.

Roth IRAs allow you to invest, tax-free, if you keep your money in the account until you’re 59.5 years old and at a 10% fee if you withdraw sooner. The maximum you can invest in a Roth IRA is $6K per year. There are also exceptions to the 10% fee, such as withdrawing $10K to put down on your first home.

This is an excellent investment opportunity, especially for young people looking to the future, especially since these accounts compound *see above.*

The infinite banking concept is essentially the idea of an Indexed Whole Life Insurance Policy (not all life insurance policies are equal). With this type of life insurance, you get most of the benefits of building your net worth without triggering an MEC through the IRS…in a nutshell, it maximizes the cash value of your policy without negating the tax benefits.

Plus, nobody can come after money in an Indexed Whole Life Insurance Policy — not the courts, ex business partners, or spouses…nobody. And, all the while, it will accrue interest of about 5.5% while any loan repayment to the account will cost about 5%.

The rest of this chapter covers the fundamentals of cryptocurrency, centralized exchanges, and crypto hedge funds; these are pretty extensive explanations and I recommend you read the book if you’re interested to learn more.

Chapter 6: Traveling on Credit

The sixth chapter covers how travel creates work-life harmony and how this can be achieved with business credit.

If you opt to travel while working, you need to be sure you can have a consistent, reliable WiFi connection — a fast one — anywhere you go (this is especially true if you opt to travel full time). McColl also recommends that you make sure you’re close to a gym, beach, or hiking trails to stay in shape.

Basically, you can travel on credit by maximizing the use of your credit card travel rewards and points.

The final section of this chapter covers credit card points accumulation and redemption strategies, how to gain status with hotels (Hilton and Marriott), and credit card travel benefits.

Chapter 7: The Road to Independence

The seventh chapter wraps up the book — it starts with some motivational ideas about maintaining freedom and reaching goals, with the thought that independence, once earned, is hard to keep.

McColl concludes by inviting readers to take advantage of a free “strategy session” with the Credit Stacking team, followed by lots of testimonials and case examples of what members have achieved.

The Takeaway — Is Credit Stacking Legit?

In a word, yes, Credit Stacking is a legitimate technique and sort of mastermind group that has helped people obtain substantial lines of credit…tens of thousands of dollars, in fact.

I don’t believe they’re going to steal your money if you sign up — these guys seem to be for real and their members are getting some great results.

With that said, I have a few conflicting ideals with the Credit Stacking system:

First of all, at Business Credit Workshop, we don’t teach members to give big banks precedence over smaller community banks and credit unions.
Next, we share a lot more information upfront about the steps to obtain business credit, including establishing the right number of reporting tradelines to achieve a perfect business credit score.
Finally, my focus is on helping people learn how to build their business credit fast and have a long term strategy working with local banks to get funding…not just applying for as many credit cards from big banks as they can.

If you’re looking to obtain $100K in business credit in as few as 30 days (even if you have a new business), join Business Credit Workshop today.

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	Chase Ink Business Preferred Generous rewards program and travel benefits → Learn more
	BoA Mastercard Business Platinum Comprehensive travel insurance coverage → Learn more
	American Express Business Gold Flexible rewards and bonus categories for common expenses → Learn more
	Capital One Spark 2% Business Cash Unlimited 2% cash back on all purchases → Learn more
	CitiBusiness/AAdvantage Platinum Select Travel benefits and rewards for American Airlines → Learn more
	Divvy Corporate Card Simplified expense management and budget controls → Learn more

Chase Ink Business Preferred	Competitive APR, employee cards, Mastercard Easy Saving® Program	Cash flow management tools, online & mobile access, travel and emergency services, free access to business credit scores
BoA Platinum Plus® Business Mastercard®	Competitive APR, employee cards	Cash flow management tools, online & mobile access, travel and emergency services, free access to business credit scores
Amex Business Gold	4X points on top 2 business categories, 1X points on other purchases	Cash flow flexibility, expense management tools, travel benefits, additional services
Spark 2% Cash Plus Business	Unlimited 2% cash back on every purchase, 5% cash back on hotels and rental cars booked through Capital One Travel	Flexible underwriting, cards for every employee, seamless software integration
AAdvantage Platinum Select	Travel benefits, mileage benefits, additional benefits	First checked bag free, preferred boarding, savings on inflight purchases
Divvy Corporate Card	Flexible rewards program	Control over rewards earnings, effortless management, various redemption options

	Amex Business Platinum	Capital One Spark Cash Select	Brex Corporate Card	Chase Ink Business Unlimited

_{Key Benefits:}	_{Robust rewards program and expense management}	_{Flexible rewards and business management tools}	_{Tailored for startups with no personal guarantee}	_{Wide range of card options and rewards}