Sole Proprietorship VS LLC: How to Choose Your Entity Wisely

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Sole proprietorship vs LLC

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: 

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. 

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: 

  1. 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.
  2. 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 

How to Register as a Sole Proprietor

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:

  1. Pick a name for your LLC that’s not already taken in your state and meets your state’s requirements.
  2. 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.
  3. 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.
  4. 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.
  5. 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:

  1. Decide on a name for your business, whether it’s your own name or something else.
  2. Get any licenses or permits you need to legally run your business in your area.
  3. File a “Doing Business As” (DBA) form with your state’s business registration office to register your business name.
  4. 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. 

Recommended: Secretary of State Offices Directory | Where to File a Business License

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

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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: 

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. 

Amex business card for personal use

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.

Recommended: Credit Secrets: Can You Erase Bad Credit History? 

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.

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

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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: 

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). 

credit stacking course

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. 

credit stacking login

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? 

credit stacking reddit

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. 

credit stacking reviews

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:  

  1. What you’re grateful for
  2. Affirmations for yourself
  3. A recent win
  4. Desires for yourself
  5. 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. 

credit stacking companies

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. 

Recommended: Credit Secrets Book Review: Can You Erase Bad Credit History?  

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. 

Recommended: How Business Credit Can Transform Your Life (Really)

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: 

  1. Your own cash (personal capital) — with this, you’ll foot 100% of the risk
  2. Business loan — lofty interest rates on a non-transferable lump sum of debt
  3. Get a partner — you’ll have to share control of business decisions
  4. 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. 

Recommended: Everything You Need to Know About a DUNS Number

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: 

  1. Open a business checking account with the main (big) bank
  2. Open a business checking account with a regional bank or credit union
  3. If you already have an account with a regional bank, move some of your capital to a big bank
  4. 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. 

Recommended: This is How to Build Business Credit Fast [Step-by-Step Guide] 

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: 

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”

credit stacking jack mccoll reddit

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. 

Credit stacking course download

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.

The Ultimate Business Credit Deep Dive: 130+ Statistics & FAQs (2023)

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business credit

We work one-on-one with thousands of business owners (and interact with tens of thousands online) to help people build business credit and improve their credit scores so they can obtain substantial lines of credit to grow their companies.

Over the years, we’ve answered and kept records of the top questions people ask when embarking on their business credit-building journey. Today, we’ve decided to share our exclusive insights here, so anyone can access them. 

First, we will share the most interesting takeaways from 3,988 surveyed business owners, and explain how we respond to their queries. We’ll answer the top questions entrepreneurs have about business credit. Keep in mind, we always recommend that you consult with an attorney and a CPA before making legal or financial decisions regarding your business.

Here’s your in-depth exploration into the realm of business credit: 

Now, let’s dive in!

What Motivates People to Seek Out Business Credit Education? 

The top 8 motivators to learn about business credit are credit score issues, lack of knowledge, funding offers, leisure/expertise, specific funding types, business challenges, increasing credit lines, and credit piggybacking

Credit is a crucial factor that lenders, suppliers, and other businesses consider when evaluating a company’s creditworthiness and financial stability. A strong business credit score can help a small business or larger company secure favorable loan terms, negotiate better payment terms with suppliers, and potentially even attract new customers. On the other hand, a poor credit score can make it difficult for a business to secure the funding it needs to operate and grow.

While each situation is unique, business owners have various reasons for seeking business credit education that I’ve broken down into eight categories: credit scores, general business credit knowledge, interest in current offers, curiosity, information about specific funding types, business-related challenges, increasing existing credit lines, and even selling credit. 

Here, we examine the top questions people have about business credit, then read answers to those queries. 

1. Most Business Owners Need Help With Their Credit Scores

The most common credit score issues business owners face are low credit score, too few or no accounts reporting, no idea how to manage their business credit score, and a lack of no-PG funding options.

The top reason people come to us is for help with their credit scores. Sometimes this pertains to business credit, while other times there are issues with personal FICO scores. 34.4% of business owners need help with their credit scores when they begin their business credit-building journey. Whether it’s personal or business credit that people need to build or repair, credit score queries are our number one issue. This topic is where we exert most of our energy. 

First of all, there are things you can do to improve your credit score: 

  • Pay your bills on time to prevent negative marks on your report
  • Keep your credit utilization below 30% to optimize your credit score
  • Don’t open too many new accounts at one time to minimize the negative impact of credit inquiries 
  • Monitor your credit score so you can catch and dispute errors right away
  • Focus on one area at a time, so as not to overwhelm yourself (sometimes, patience is key)

Here are answers to common questions about general credit score issues: 

What is the fastest way to fix your credit score?

The quickest way to fix your credit score is to pay off any outstanding debts right away, to make sure that all of your accounts are current. Moreover, you can try to dispute any errors or inaccuracies on your credit report, as these can negatively impact your credit score. I recommend the Credit Secrets system to anyone with a low credit score. 

Who can I talk to to help me with my credit score?

For help with your credit score, you can talk to a financial advisor, credit counselor, or credit coach for help with improving your credit score. They can provide you with advice and resources to help you pay off your debts and manage your finances in a way that will positively impact your score. In some circumstances, you may also be able to find free or low-cost credit counseling services through non-profit organizations or your local government.

Can I pay someone to clean up my credit report?

I generally advise against paying someone to “clean up” your credit report. The truth is, companies that offer services like this are generally expensive while the industry is flooded with scammers. If you do decide to pay for a service like this, check with the Better Business Bureau, read company reviews, and do your due diligence before you proceed, as paid credit clean-up is a high-risk solution for poor credit. 

Is it easier to qualify for a business credit card?

A business credit card is not easier to qualify for than a personal credit card because it requires that the applicant submit business financial documents, sometimes in addition to personal credit information. However, if they take the right steps, a business may be able to build credit faster than an individual. 

Relative to general credit score challenges, a number of people we interact with have problems specifically related to business credit. Of those that need help with their business credit scores, ⅓ of them have an existing, low business credit score or negative items on their report that they want to clean up. These issues need to be handled on a case-by-case basis since there are so many possibilities, and what works for someone with too many inquiries won’t work for someone whose utilization is too high. 

In many ways, business credit is similar to personal credit, and some of the same strategies that help boost an individual’s FICO score can help increase a company’s Paydex score and other business credit scores. 

Let’s look at the usual queries people have about business credit problems: 

How can I fix my business credit score?

To fix your business credit, you can start by paying all bills and debts on time, as agreed. Next, keep your balances low on credit cards and lines of credit. Furthermore, you should regularly review your credit reports for errors. In some cases, it can also be helpful to build a positive credit history by taking out small loans or credit cards and using them responsibly.

How do I remove negative items from my business credit?

To remove negative items from your business credit, you can try disputing the errors with the credit bureaus or negotiating with the creditor to have the item removed in exchange for payment. It is also a good idea to regularly review your credit reports and address any errors or issues as soon as possible. You may also try a goodwill request for the deletion of valid negative marks on your report.

What is a goodwill request for deletion?

A goodwill request for deletion is a letter or email that you can send to a creditor (not a credit bureau), asking them to remove a negative item from your credit report as a gesture of “goodwill.” These requests are typically made when the negative item on your credit report is the result of a one-time mistake or misunderstanding, and you have an otherwise good credit history.

Do goodwill deletion letters work?

Yes, goodwill deletion letters can work to mitigate accurate, negative marks on a credit report, though usually only when the individual or entity making the request has a history of otherwise positive records.

Much of the time, credit score problems are based on a scarce number of accounts on a business credit report. 26.1% of the businesses with credit score issues report too few or no accounts listed on their business credit report. This can occur when the company utilizes tradelines that don’t report to D&B, a new credit line hasn’t been reported yet, or when the business hasn’t applied for credit. Again, these problems need to be resolved on a case-by-case basis. 

Having a limited credit history can make it difficult for businesses to establish a strong credit score, which is based on a variety of factors, including payment history, credit utilization, and the length of credit history. If a business has a limited credit history, it is impossible for any credit scoring algorithm to accurately assess a business’s creditworthiness and financial stability.

Here’s what business owners want to know about a limited number of accounts on a business credit report: 

How many business credit accounts should I have?

Prior to applying for business funding, you should establish tradeline accounts to establish credit. You first need to set up your business so that it’s optimized for obtaining business credit. To build credit fast, you need a minimum of three tradelines reporting to business credit bureaus, before your score is adequate for lenders; A perfect score requires more.

Can I self-report business credit?

As an individual or entity, you cannot simply report your payments to business credit bureaus. However, there are steps you can take to have certain bills reported. For example, eCredable has options to link utility payments to users’ accounts to have them reported. And, you can apply for certain types of funding that report on-time payments to business credit bureaus.

Why does my business credit card not show on my credit report?

Many business credit cards report on the cardholders’ personal credit reports, not the business credit reports. In a case where you know that your business credit card should be reporting, you may have to wait, as it takes some lenders longer to report than others.

How long does it take business credit to report?

The length of time it takes lenders to send payment activity to business credit bureaus varies from bank to bank. In many cases, it can take over 30 days before payment history shows on a report. Some lenders do not report until after the second billing cycle.

Does Amex report to Dun & Bradstreet?

As a rule, Amex reports all business credit history to the Small Business Financial Exchange (SBFE). Only negative payment activity is reported by Amex to Dun & Bradstreet.

Does Chase report to Dun & Bradstreet?

Yes. Chase does report business credit payment history to Dun & Bradstreet. 

In the segment of those whose credit score motivates them to seek more information, 26.1% of business owners express that their personal credit prohibits them from obtaining business credit. From this, I gather that these people are in need of personal credit repair. When a FICO score requires a lot of work, it can take a while to repair it. In the meantime, these individuals might not be quite ready to build business credit. 

Nonetheless, we are here to answer everyone’s questions, and try to help them get where they need to be to obtain substantial lines of business credit. Personal credit, after all, can have an impact on business creditworthiness.   

See the answers to the most frequently asked questions people have when their personal credit holds them back from obtaining business credit: 

Can personal credit affect business credit?

Yes. For most lenders, personal guarantees are required for business loans and business credit cards. This means that your personal credit will usually be considered when you apply for business credit.

Does personal credit affect LLC credit?

Personal credit may impact an LLC’s credit score. On the contrary, an LLC’s credit score will not impact the owner’s personal credit score.

What is the minimum credit score for a small business loan?

Underwriting terms for all banks vary. This means that each bank looks at personal credit scores differently. Still, to obtain business credit, the owner should have a FICO score of at least 640 as a rule.

Do all banks check personal credit for business credit funding?

No. While banks that do not require a personal guarantee for business credit funding are rare, they do exist. With that said, most corporate cards do not require a personal guarantee since they are backed by a business’ revenue as opposed to its credit score.

Of those that come to us with credit score issues, 14.8% of business owners just want to learn how to manage their business credit score. Some business owners need to clean up their personal credit reports, while others want to know how to find and manage their DUNS number or find a business credit monitoring solution. 

For these people, we offer education about the major business credit bureaus, credit scores, and credit monitoring tools. While there are a plethora of business credit services out there, we only recommend those that we have vetted and that we know will impact credit decisions from legitimate lenders. 

Here are answers to the business credit score management questions we hear most: 

What credit bureau is used for business loans?

There are three major business credit bureaus that we recommend business owners keep an eye on: Dun & Bradstreet, Experian Business, Equifax Small Business. CreditSafe, LexisNexis Risk Solutions, and other specialty bureaus are also used by some lenders to determine a company’s creditworthiness. 

Where can I check my business credit score?

There are tons of credit monitoring tools available to business owners, the most trusted being Nav. The platform is free to use and helps businesses manage and get more from their financial data. 

How do I access my company DUNS number?

Any business can look up their DUNS number by visiting Dun & Bradstreet’s website and searching for their business. For established businesses, the owner can claim an existing profile to access their DUNS number. In some cases, a business owner may need to add their business to the directory to establish a profile. 

Is a DUNS number the same as an EIN?

No, a DUNS number is not an EIN. A DUNS number is assigned by Dun & Bradstreet, which is a business credit bureau. An EIN is assigned by the United States Internal Revenue Service (IRS) and is designated for tax purposes. 

What is a DUNS number used for?

A DUNS number distinguishes businesses from one another and is used by lenders to look up a company’s PAYDEX score (D&B business credit score). The PAYDEX score is used by lenders to determine a company’s creditworthiness. 

Does my LLC have a credit score?

If you have established business credit through tradelines, business loans, or business lines of credit that are reported to business credit bureaus, your LLC likely has a credit score. But, if you have no business credit, your company may not have an established profile with any bureaus. 

Relative to personal credit scores, 12.5% of business owners sought funding that requires no personal guarantee (No PG). While such funding is scarce, it does exist. We do our best to help people understand that this type of funding is rare, but that it does exist (and how to get it if they so choose). 

It’s very possible — though not always ideal — to obtain loans and credit cards without sharing a social security number. On our blog and in our workshops, we’ve explained how to get business credit with no personal guarantee, which is essentially what this group wants to know.  

Most often, people who want to know about “no PG” funding have the following queries:

Can I get a business loan without using my personal credit?

Most business credit is backed by a personal guarantee, which requires you to use your social security number to obtain funding. There are some lenders and loans that do not require personal guarantees, the most common type of funding being merchant cash advances (these usually come with excessively high interest rates).

Can I use my EIN to get a credit card?

In most cases, business credit cards and lines of credit require a personal guarantee, which means that, even if you apply using an EIN, your social security number is also required. With that said, yes, there are ways that you can obtain credit with just an EIN. 

Can I use my EIN to get a loan?

As with credit cards, most lenders require a personal guarantee. In this case, even with an EIN, you will still need to share your social security number. But, in limited scenarios, you can get a loan with just an EIN.

2. Many People Have a General Lack of Business Credit Knowledge

People want to brush up on their business credit knowledge to learn the first steps of the process, learn where to start, discover why they get rejections, or to find out more so they can help others.

After those with credit score issues, the next most common reason people come to us is that they simply don’t have a strong understanding of business credit. We help people who want to move into the first phase of building business credit, those who have no idea what they need, others who want to know why they’re getting rejections, and even some who want to learn so they can help others. 

31.6% of business people have a general lack of business credit knowledge that drives their decision to learn about the subject. In a nutshell, our core offer is business credit education. Those with a lack of understanding are in the right place when they stumble onto our materials. Some of them want to know why they keep getting denied, how to qualify for substantial credit lines, or just want to learn as much as they can so they can help others. 

We have a five-step process that is especially helpful for this group: 

  1. Form your company in a way that optimizes your business credit potential
  2. Take the steps to get your company “business credit-ready”
  3. Network with local banks to understand underwriting requirements
  4. Set up your business credit profiles with the three main bureaus
  5. Build your first, small tradelines (lines of credit) to officially establish your credit score

Our advanced process is available to business credit workshop coaching students. 

From this segment, here are the top questions we’ve been asked: 

How do I obtain business credit as a beginner?

The very first step you must take to obtain business credit is to establish a business in a way that it is likely to be worthy of business credit: Choose a neutral name and business category. The same company name over a long period shows dependability. You can get your articles of organization from your Secretary of State. 

How do you explain business credit?

Business credit is your company’s ability to borrow from banks and other lenders. In most cases, your business credit score is central to a bank’s perception of your company’s creditworthiness.

What can I use business credit for?

You can use business credit for almost anything you need to grow and scale your company. Business credit can be used to replace or repair equipment, make investments, and pay vendors or utilities. You can even use business credit to pay rent. 

Does my EIN have a credit score?

In a word, no. An EIN assignment does not automatically establish a business in any credit bureau databases. However, there are credit scores attached to EINs separately from SSNs.

Why is my business credit card on my personal credit report?

If your SSN was used to obtain a credit card, then it will report to consumer credit bureaus. The same credit card may or may not report to business credit bureaus. 

Will a business credit card build my credit score?

With responsible payment history, a business credit card can serve to boost a business credit score. However, aside from secured credit accounts, most business credit cards require some sort of credit history before a company is considered creditworthy. 

Should I pay off my business credit card in full?

Paying off your business credit card in full each billing cycle will help you avoid interest accrual. In most cases, yes, this would be beneficial and the cost of using the card would be less.  

Most of those who with a lack of business credit knowledge just want to know where to start. 44.4% of business owners with a lack of knowledge specifically seek how to establish business credit or want to know the first steps of the process. Once they get the early training, many of them are surprised that the way they establish their business itself plays a major role in obtaining business credit. Sometimes, people need to make changes to their business structure through their state or establish a new business. 

In a nutshell, you need to incorporate your business, establish an EIN, register with the right state and local government agencies, and open a business bank account before you can move on to what people tend to think of as the early steps. 

For those who want to learn how to navigate the early stage of establishing business credit, here are the most common questions we answer: 

How long do you have to have an LLC to get business credit?

Banks look at your time in business to determine creditworthiness, but not all banks are the same. Since some lenders will extend credit to new businesses when they can show a certain amount of revenue. To determine your odds of qualifying for credit, check the bank’s underwriter for the time in business requirements.

Do you need an EIN to build business credit?

Yes. To obtain business credit that is based on your business credit score, your company must have an EIN.

What is an EIN?

An EIN is a nine-digit employer identification number, assigned by the IRS that acts as a tax ID for a business. An EIN is required to establish a business bank account. 

How do I find my EIN?

Your business is not automatically assigned an EIN when it is established. You need to apply for an EIN with the IRS. Note: if you accidentally apply for a state tax ID instead of an EIN, and you do not have employees, your state may send undue tax invoices throughout the year. So, be sure to apply for your EIN on the IRS website. 

Of those who lack business credit knowledge, many of them are clueless when they begin. 32% of individuals don’t know where to begin or what they’re looking for. For this group, I lay out the basics of building credit. Again, this involves establishing your business the right way. Before we explore that, this group requires a more fundamental understanding. 

In general, these people are asking broad questions, which usually requires that we start asking questions about their business so that we can steer them in the right direction. For the most part, this group is the most eager to learn. 

Here are the questions we hear most from those who don’t know where to begin: 

How do small business owners build credit?

First, small business owners looking to build credit should establish their business in such a way that their company is likely to be considered creditworthy. They then need to network with local banks to learn about business credit requirements and establish an EIN and a business bank account. Finally, they must establish their first tradelines or net 30 accounts. 

What is the minimum business credit score?

Business credit scores range from 0 to 100. Most business credit lenders require a minimum business credit score of 70 to deem a company creditworthy. 

What should I look for when building business credit?

Depending on whether or not your business is properly established to obtain business credit, you may need to look at your business structure and whether or not your company name and category are neutral. Next, you should research the underwriting requirements of the banks you would like to obtain funding from. 

From the group with little business credit understanding, some of them need to understand what factors lead to business credit denials from banks. 16% of people who cite a lack of business credit knowledge have no idea why they get rejections from lenders. This fact reinforces the significance of learning as much as you can about business credit before applying for new credit lines. 

There are a variety of reasons that a business might be denied credit. A lack of credit history, poor credit history, insufficient collateral or income, and excessive debt might lead to the inability to obtain business credit. 

Here’s what this group tends to ask, and how we generally respond: 

Why do I keep getting denied business credit?

Requirements for any type of credit vary from lender to lender. You might be denied business credit when you have a poor credit history or a low personal or business credit score, not enough collateral or revenue, a lack of time in business, or limited financial resources among other things.

How many times can you apply for business credit?

There is no set limit to the number of times you can apply for business credit. With that said, hard inquiries on your credit report can have a negative, albeit temporary impact on your personal and/or business credit score. So, too many applications in a short timeframe can damage your capacity to qualify for business credit.

How long after being refused business credit can I reapply?

There is no set limit to the time you should wait before reapplying for business credit. However, you should take enough time to find out why you were denied, assess your creditworthiness, and remedy any issues with your credit before you file a consecutive business credit application. 

Does it hurt your business credit score if you are denied a line of credit?

A turndown for funding is not damaging to your business credit score, but a hard inquiry for business credit can lead to a slight, temporary decline in your credit score. Depending on which credit reports are pulled during the application process, applying can affect your personal and business credit scores. 

What rights do you have when you are denied credit?

 When you are denied a line of credit, you have the right to receive a notice of the action taken, to request a free copy of your credit report that was provided to the lender, to dispute incorrect information, and to file a complaint with the Consumer Financial Protection Bureau (CFPB). 

Maybe the most intriguing statistic from these findings — for me anyway — is the fact that 7.4% of people seeking business credit knowledge want it so that they can help others. Some of them even cited spiritual reasons for learning more about the topic. While I have always genuinely been driven to help others by teaching business credit topics, before these instances I had never considered the opportunities might be considered sacred to some people.   

The group that wants to learn so they can help people is highly inquisitive and asks questions all over the board. They tend to ask almost every query on this page, and we love it! 

3. More Than One Out of Ten Want to Locate Business Credit Offers

People looking for specific business credit offers want to find the best banks and lenders, discover which vendors report to business credit bureaus, or learn how to spot a financial scam.

Many people want to stay in the loop about legitimate banks and lenders, tradelines that report to business credit bureaus, and weed out scammers. 11.3% of business leaders want to know more about the business credit offers that are currently available. Though not the majority, there are many people who come to me because they want to know more about banks and lenders that offer the right of financing for their needs. More than one out of ten people who come to Business Credit Workshop are interested in learning about specific business credit offers!  

The most common general questions about business credit offers are below: 

What is the best business credit card?

The “best” credit card for a business depends on the company’s financial status, its credit standing, and its funding goals. We don’t have a favorite business credit card, but the offer that we most often refer business owners to is Divvy. 

What bank is best for a business account?

In general, for a business bank account, we recommend business owners research local community banks and credit unions to see what offers are available for business. This way, they can determine which is best suited to their needs. We continually review banks and business credit offers on our website and YouTube channel to try to keep people informed. 

What is the best credit union for a small business?

We recommend that business owners first turn to their local community banks and credit unions when starting on the business credit-building journey. We do have a list of our favorite nationwide credit unions that we sometimes refer people to. 

While anyone can do the research online to see relevant offers for their business, it’s not always easy to find, especially when you don’t know exactly what you’re looking for. Of the business leaders who want to find out about specific offers, 65.5% are looking to find out which lenders and banks offer the best funding options. We regularly cover the most popular business credit offers on our blog and our YouTube channel. 

One-on-one, here are the top questions people ask us about banks and funding options: 

What bank has the best business credit offers?

Of course, offers from Amex, Discover, Chase, and the like are legitimate. Most major banks have a plethora of business credit offers. However, we recommend a local community bank or credit union for the highest business credit limits and best interest rates — this is the core of what we teach. 

Is it better for a business to bank with a credit union?

While it’s impossible to answer this question for every possible scenario, at Business Credit Workshop, we do typically recommend small community banks and credit unions over traditional, big banks for small business owners. 

What is the safest bank to do business with?

Most banks in the United States are FDIC insured, which covers deposits, dollar-for-dollar, and any accrued interest. So, they’re pretty safe. One bank that comes up (a lot) as a servicer for some of our favorite business credit offers is Celtic Bank. And, we often recommend people look into offers from Navy Federal Credit Union. 

Is Chase a good bank for a small business?

For business owners who want a traditional offer from a big bank, yes, Chase has a full suite of options for business owners. They provide robust online banking features, credit cards, loans, and lines of credit. But, our general advice is to check with local credit unions and community banks to learn what’s available for small businesses. 

One of the early steps to building business credit is to establish tradelines that report on-time payments to business credit bureaus. Without net 30 vendors and gas cards, the path to a substantial business credit line is long and difficult. 27.6% of entrepreneurs in this group are seeking a list of vendors or tradelines to establish their reporting accounts. We cover tradelines all the time on our blog and YouTube channel and share a list of 30+ reporting vendors to Business Credit Workshop participants. 

The following tradeline-related questions are commonplace: 

What is the best tradeline for a small business building credit?

You should choose a tradeline that offers something you actually need and reports payment history to business credit bureaus. A couple of vendors that we often recommend are Summa Office Supplies and Crown Office Supplies, though many others also report. 

How many tradelines do I need to build business credit?

After your business credit profiles are established, you should have a minimum of three tradelines reporting, and more for a perfect business credit score (which you need to obtain substantial credit lines).

Which net 30 vendors report to business credit bureaus?

Quill, Lowe’s, Uline, and SupplyWorks are just a few of the many net 30 vendors that report on-time payments to business credit vendors. Business fuel cards can also be a great option for business credit. 

What is the easiest business gas card to get?

Business fuel cards are not difficult to get, because they typically have net terms (you pay in full as you spend). This means that a credit score is not required to obtain a card. Most recently, we reviewed AtoB’s gas card offer, and we pretty much love it. 

With so many ads coming at us from all directions, it’s smart to be aware of fraud. I was not at all surprised to learn that fear of scammers kept 6.9% of these business owners from applying for business funding. People want to know that they’re not being scammed before they sign up for an offer, especially when it involves their business. 

Here’s what people want to know about business funding scams: 

How do you know if something is a financial scam?

Most of the time, if something seems too good to be true, it is. If a so-called business pressures you to make a decision quickly, this is a huge red flag. And, in most cases, a legitimate financial offer won’t require money upfront to apply. Before you sign up for any offer, do your due diligence: read reviews and make sure funding offers are upfront about the banks backing them. 

Can you get money back from a fraudulent funding offer?

If you can catch the scammer, you may be able to get your money back. But, in most cases, fake funding offers are gone before you know what hit you. If you use your credit card or debit card to pay for any upfront fees, the bank may be able to help you recover what you’ve lost. 

Is business credit a real thing?

Yes! Business credit is real, and it doesn’t impact your personal credit. In general, business lines of credit are typically larger than personal lines of credit, and you can build business credit in as few as 30 days. 

4. Plenty of Entrepreneurs Simply Enjoy Honing Their Expertise

Those who learn for leisure usually report no pending business credit problems, and some want to make sure their understanding is up to date.

Of the thousands of people who came to us to learn about business credit education, hundreds were just learning for leisure or to sharpen their mastery. 10.2% of small business entrepreneurs reported that they enjoy brushing up on the subject of business credit. Some of the people who were casually learning are credit repair specialists (of course, not all of them told us so). Whether they had no problems or just wanted to make sure they were up-to-date, they signed on to find out just what we were teaching — their questions were mostly procedural and unrelated to what we teach. 

Of the leisurely learners, 76.9% of people in this segment cited no problems with or questions about business credit. I gather that they were either just learning for leisure, or they were researching for a personal or professional project. As you might guess, they weren’t super inquisitive about the process. 

However, they weren’t the only ones enjoying themselves while learning, and the other portion of this segment wasn’t so quiet. 23.1% of the business owners in this group admitted that they already knew about business credit, but were updating their understanding. And, they wanted to ask about … 

Here are the queries we heard most from those who wanted the skinny on modern business credit concepts: 

What’s the fastest way to build credit for an LLC? 

The fastest tactic for building business credit, after your business is established in an optimal way, is to use tradelines and gas cards that report to business credit cards. Of course, you need to pay these accounts as agreed to avoid negative marks on your business credit report. 

How can I get a business credit card for a new business?

The first step is to establish your business the right way.  There are many factors that contribute to a company’s creditworthiness. Many people who obtained business credit on behalf a prior, established company don’t realize that, in the past, their tradelines reported to business credit bureaus, which boosted their business credit score.

Should I use my SSN for business credit?

Most business credit cards are backed by a personal guarantee (PG), so yes, it’s most likely that you will include your social security number in a business credit application. However, no PG business credit lines do exist.

What gas card can I get with a 600 credit score?

You can get most gas cards with a 600 credit score. In fact, fuel cards usually come with net terms, which means that you pay in full each billing cycle. So, most of these offers are not based on FICO scores at all.

What credit score do you need to get a gas card for your business?

You do not need a certain credit score to qualify for a gas card. Because most gas cards have net terms, you pay in full each billing cycle. The credit lines for a fuel card are based on income, not credit scores — increased spending limits are usually offered over time.

5. Some Business Owners Want Help Obtaining Specific Types of Funding

Business owners looking for certain types of funding usually want cash flow to launch a new business. Some seek business loans or mortgages. Others are looking for standard business loans.

While they’re not the majority, there are quite a few people who ask us about funding for specific uses. 5.9% of business owners want to learn how to find and obtain a specific type of business credit or funding. They might ask about startup funds, real estate loans & mortgages, or business loans. 

In general, here’s how we address this group’s top issues:

Can I get a business loan without business credit?

There are types of funding that business owners can get using their personal credit. And, there are income-based business lines of credit. Aside from corporate cards, however, business funding for a company with no credit score tends to come with high-interest rates.  

What are the main types of credit businesses can get?

 Businesses can obtain secured and unsecured credit cards, term loans, SBA loans, equipment loans, corporate cards, mortgages & real estate lines of credit, gas cards, as well as invoice factoring & merchant cash advances (not recommended).

Within this segment, most often, individuals seek startup funds. In most cases, they’re looking for a way to fund and launch a new business idea. In fact, 40% of individuals looking for a specific type of business funding want startup funds. Some of them are under the wrong impression — they tend to think that there might be a way to get funding with no revenue or positive credit history to back it. This group benefits tremendously from learning the fundamentals.  

Here’s what they ask: 

How much can I get for a startup business loan?

That number ranges from $0 to $500K but depends on what you have to prove your creditworthiness. In a nutshell, you need a credit score and some proof of your ability to repay the funds. We teach businesses how to obtain up to $100K in business credit, which they can use as startup funds or for any other business purpose. 

How do I get startup credit for my business?

The first step is to incorporate your business. Next, you must apply for an EIN and set up business banking. You’ll need to get your business set up in such a way that it appears trustworthy to lenders and open a business credit file. Then, you need to establish a number of tradelines that report on-time payments to business credit bureaus. 

What is your business credit score when you first start?

If you have not established any tradelines, your business credit score starts at zero. 

Is business credit better than private funding?

Many people would say that they prefer business credit over VC and private equity funding because they do not want investors in control of their business operations. Others would prefer private capital because they are interested in expert guidance, and eventually exiting their business for a profit.

Of those who seek a specific type of funding, 33.3% want business real estate loans or mortgages. While we don’t focus a ton on mortgage options, we do share what we know — We share information about various commercial mortgages and the BRRRR method of real estate investing, as well as alternative options for purchasing homes and real estate. 

These are the questions we most commonly answer: 

What is a mortgage for a business called? 

A business mortgage is called a commercial mortgage. Another type of funding that businesses can consider when purchasing property is a real estate investor line of credit. In some cases, business owners have paid for homes with credit cards or revolving lines of credit. 

Can a business get a 30-year mortgage?

Business property loans typically have 7-20 year terms rather than 30. And, the amortization period for a commercial mortgage can last up to 30 years, which means that payments may still be required after the terms are up.

Are business mortgages cheaper?

As a rule, no. The APR is typically higher on a business mortgage than on a consumer mortgage. However, businesses have some funding options that are not available to individuals.

Of the group looking for a specific type of funding when they come to us, 26.6% want a business loan. These people are pretty quick to the gun, ready to do what they need to get funding. 

Most often, here are their queries: 

What do I need to get a business loan?

You’ll need a business that has been established properly, an EIN, good personal and business credit, a number of tradelines reporting on your business credit report, substantial business revenue (this will vary based on the credit line you want), and documentation to provide lenders.  

What is the minimum income for a business loan?

There is no minimum income required for a business loan because offers vary from lender to lender. For a smaller line of credit, $5K or less monthly income may suffice. For larger business loans, there may be higher income requirements, but there are banks with underwriting requirements that are easier to meet. 

What is the best loan for a business?

The best loan for a business can vary tremendously based on the company’s needs. We often share in-depth reviews for popular and recommended business loans and credit cards after learning more about an individual’s goals and requirements. 

6. Numerous People Want Business Credit to Solve Work-Related Challenges

Most people who want to use commercial credit to solve business challenges don't feel they earn enough revenue. Others either don't have trackable income or think that their line of work holds them back.

Whether it’s their occupation or industry, the fact that they run a cash business, or a lack of revenue, 4.7% of business owners have a business-related challenge they need to learn how to overcome when they seek out business credit knowledge. Establishing business credit can give this group a way to access financing, secure loans, and get better terms on credit offers. The funds that they obtain can then help them grow their business. 

In general, we answer the following for this segment: 

How can I use credit to grow my business?

Once you establish a strong credit profile, you can obtain substantial credit lines. If you use your funding responsibly, you can make investments that improve your profitability. 

How fast does business credit grow?

If you make all the right moves, you can have an established business credit profile with an excellent credit score in as little as one billing cycle, or as soon as your accounts are reported to business credit bureaus. 

In the group with work-related challenges, 83.3% of business owners say that they don’t generate enough revenue. They might be looking for an income-generating investment: equipment, staff, advertising, you name it. And, those who are serious about implementing our training can find new ways to boost profits. 

Here’s what they tend to ask us: 

How do you use credit to generate income?

You can leverage your credit to make investments that are profitable. It’s as simple as that. Some people invest in inventory, real property, or business equipment. Others might opt for something less tangible like digital assets. Though, all investments come with some risk. If you do use your credit to generate income, always be sure that your profit is higher than your account interest and fees. 

Can I use a credit card to invest?

Yes. Technically, you can use a credit card to invest in stocks or bonds. When you use credit for investing, it’s probably smarter to look at assets with less risk like business equipment, advertising, or retail inventory. 

Does credit funding count as income?

No. Credit funding is debt. It does not count as income and can not be taxed as such. 

Can you use a credit card to invest in Bitcoin?

Yes, some of the bigger crypto exchanges allow users to invest using credit cards. Though, we don’t generally advise beyond that on the crypto market or investments in general.  

Another work-related problem is that 8.3% believe that their cash business is holding them back from obtaining business credit. It’s actually pretty common for a company to do business using cash. Luckily, this problem has a simple solution (as long as you’re not trying to hide your money from the mafia). Really, you just need to use your bank account.  

This is what we most often address with this crowd: 

Can I get a business credit card with a cash business?

Yes, you can obtain business credit, even if your income is cash. However, you will need to first make sure that your business is legally established and “credit-ready.” And, you will most likely need to have your money in a business bank account. 

Can I get a business credit card with no money in the bank?

In most cases, no. You can not get a business credit card without traceable money. If you are going to apply for business credit, you will need money in a business bank account. 

What business funding can I get with a cash-only business?

If you run a cash business, and you refuse to keep all of your money in a business bank account, your funding options will likely be limited to bootstrapping (owner-funding), private investing, and crowdfunding. 

Akin to undocumented revenue, another 8.3% say that they believe their occupation or industry keeps them from being able to obtain credit. For example, freelancers and independent contractors have had a particularly hard time, and attribute their type of work to their inability to get funding. The truth is that any business can get funded — they just need to establish their company properly. 

For the most part, here’s what this group is asking: 

Can I get a business credit card with a 1099? 

Yes, you can get a business credit card, even if all of your income is from contract work. To do so, you will need to establish your business properly and account for your financials in a way that makes you appear creditworthy to lenders. 

Can I get a business credit card if I am self-employed? 

Yes. Self-employed businesses are no less creditworthy than businesses with employees. As with all businesses, you will first need to establish your business properly and get it “credit ready” before you can obtain funding.  

Can freelancers get business credit cards? 

Yes. Freelancers are self-employed businesses. The thing is, you just need to have your ducks in a row before you apply: Incorporate your business and get it “credit ready.”

Can I get a loan being an independent contractor? 

Yes. Independent contractors can get business credit, as long as they set the proper foundation. You will need to incorporate your business, get an EIN and business bank account, and establish your business profiles before anything else.

7. Those Who Want to Increase Their Existing Credit Lines Are a Minority

While not the smallest group, there are not many people who want to grow business credit lines that they’ve already obtained. Only 1.2% of business leaders who seek business credit education want to increase their existing credit lines. Looking at this, I think it’s safe to assume that most people who already have business lines of credit are not super likely to be actively learning about the topic. But, they do have some specific inquiries. 

Here, you have the typical questions that this group asks:  

How can I get my line of credit increased?

Credit card issuers ultimately want to earn profit from credit card interest. When a cardholder shows that they make payments on time, as agreed, this can lead to an increased credit line. However, making minimum monthly payments is usually insufficient. Paying an account in full while the card is still in regular use is sometimes the fastest way to show worthiness for a credit limit increase. 

Why is it so hard to get a credit line increased?

The final determination for a credit limit increase, for any bank, is based on the profitability forecast for the account. Most banks have private underwriting terms, which makes it difficult for many people to determine what will make their account eligible for an increased spending limit. 

Will requesting an increase in credit line harm my business credit?

Some banks may conduct a hard pull to your personal or business credit report when you request a credit limit increase. While a hard inquiry does impact your account, the impact is typically low and is always temporary.  

When should you ask for a credit line increase?

The best time to request a credit line increase is when you actually need it. But, you should consider your payment history over the past few months, and be sure that your account usage is not nearing your existing credit limit when you do so. 

What’s a good credit limit on a business loan?

We often see business term loans in the amount of $20K-100K. The best amount would be whatever you need to grow your business and ultimately improve profitability.  

Does canceling a business credit card hurt your credit score?

If you cancel a business credit card, it would decrease your credit limit; this could increase your utilization. You should try to keep your total credit utilization below 30% to optimize your credit score. 

8. A Handful of People Are Curious About “Credit Piggybacking”

When they first come to us, 0.7% of small business entrepreneurs are interested in learning how to earn money by allowing others to “piggyback” on their credit. This is the smallest group. And, honestly, I was taken aback when the first person came to us looking to sell business credit since this isn’t a service that we offer. Still, I take everyone’s interests into account. In fact, I reviewed one of the most highly-rated tradeline brokers some time back. 

Note: I try not to censor anything I share with Business Credit Workshop readers and coaching students (even when it is controversial). While I don’t endorse tradeline brokering, I have several coaching students who partake in the practice, and I see even more in the online groups I’m part of. Tradeline brokerages can absolutely be legitimate businesses, and — although there are considerable risks — there is potential to earn money for those with an abundance of credit.  

So, here’s the skinny on the credit piggybacking questions we most often hear: 

Is piggybacking credit legal?

Yes, adding an authorized user to a credit account is legal. Though, it is meant for family and close associates who actually intend to share an account. Many lenders prohibit cardholders from adding strangers to their accounts or using tradeline brokers.  

Does adding someone as an authorized user hurt my credit?

No, adding a new user to a credit account does not harm your credit score. However, if the authorized user uses the account irresponsibly, it can negatively impact your credit. 

Can piggybacking hurt credit?

Yes, adding an authorized user to an account can hurt credit if the authorized user uses the credit card or line of credit irresponsibly. Simply adding multiple users has no negative impact on a credit score. 

What are the disadvantages of credit piggybacking?

Credit piggybacking, as advertised through tradeline brokers may be prohibited by your lender. This means that if the lender found out that you participated, they might close your account. Another risk is that an authorized user who has access to your line of credit may spend irresponsibly, which has the potential to ruin your credit. 

What is a tradeline broker?

A tradeline broker is a middleman between a credit account holder and a client who wants to “buy” (more appropriately, “rent”) an account, or be added as an authorized user. Clients are willing to pay for the chance to temporarily show an increased credit line prior to applying for a mortgage or other high-limit financing. 

How much can I sell my tradeline for?

Depending on which tradeline broker you were to go with, you could earn from $50 to $2K per month to participate in credit piggybacking. 

Final Takeaway

There are several motivations that drive people to seek out education on business credit. The most common reason is the need for help with their credit scores. Many people also have a general lack of knowledge about business credit, and more than one in ten are interested in locating specific business credit offers.

Moreover, some entrepreneurs enjoy learning more about various financial topics, while others want help obtaining specific types of funding or want to use business credit to solve business-related challenges. A small minority of business owners are interested in increasing their existing credit lines, and a handful of people are curious about “credit piggybacking.”

We have assisted thousands of business owners in building business credit and improving their credit scores, enabling them to obtain lines of credit to grow their companies. This post contains the top questions asked by entrepreneurs about business credit. These are our exclusive insights and responses to these queries based on our experiences working with these business owners. 

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

What is the Best Bank of America Business Credit Card for Your Needs? 

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Best Bank of America Business Credit Card

Recently, we shared an overview of Bank of America’s corporate card offer, which comes with some pretty robust benefits. And, while putting that together, we realized that we hadn’t covered their small business credit cards yet. Currently, BoA is promoting seven business credit cards, each with its own set of pros and cons. This might leave you scratching your head, wondering which card is best for your situation. 

Well, I’m going to break each BoA business credit card offer down for you. At the end of each section, you’ll find a quick overview of who that card would be best for. 

Here’s what’s in store: 

Let’s get moving. 

Bank of America Company Overview

Bank of America was founded in 1998 in San Francisco, California. Since then, they’ve grown to become one of the largest and most well-known banks in the country, if not the world. In fact, they’re a household name. 

The bank has a traditional offer, providing almost every financial service under the Sun, from personal banking to business finance management (and beyond). The company is a publicly traded, for-profit investment bank. With these credentials, it’s safe to label them as trustworthy.

Bank of America’s current CEO, Brian Moynihan, was promoted to this position in 2009 and still leads a team of nearly 200K staff members.  

Bank of America Business Credit Card Requirements

Bank of America Business Credit Card Application

Nearly any business structure can apply for a Bank of America business card, including corporations, LLCs, sole proprietors, and freelancers. 

To apply for a business credit card with them, you’ll need to have the usual information handy: 

  • Legal and preferred business names
  • Type of business
  • Business address
  • EIN or SSN (for sole proprietors & freelancers)
  • Articles of organization 
  • Business contact information
  • Years in business
  • Annual revenue and expenses

A good FICO credit score can be important for new business owners, since Bank of America may elect to look at applicants’ personal credit history when making a decision. For cases in which an applicant’s credit isn’t great, though, they do offer secured cards. 

The Business Credit Card Offers

6 out of 7 of the Bank of America cards below are Mastercard,™ which means that cardholders can take advantage of the perks that come along with that. Mastercard standard benefits include zero-liability protection, theft protection, and emergency assistance. 

Note: Visa™  cards also come with some advantages of their own, such as discounts on partner offers.  

These cards are designed for businesses and report on-time payments to Equifax Small Business, so they can have an impact on your business credit score.  

Now, we’ll take a look at Bank of America’s business credit cards, one-by-one. 

1. Business Advantage Customized Cash Rewards Credit Card

Bank of America Credit Card: Customized Cash Rewards

The first card we’ll look at is the Bank of America Business Cash Advantage Customized Cash Rewards Card. In this case, “customized” means that you can earn 3% cash back on the category with the highest spending. For example, you might choose to use your card primarily for fuel purchases, in which case you could earn 3¢ for every dollar spent at a gas station. 

To take advantage of the 3% cash back, cardholders must select their own “choice” category, which is managed in the app or cardholder dashboard. 

This card also comes with 2% cash back on dining and 1% on everything else. No matter what, you’re earning at least 1¢ per dollar spent. You can redeem cash rewards as statement credit, a paper check, or have it deposited directly into a Bank of America checking or savings account.   

There is no annual fee with the Customized Cash Rewards card, and you can increase the amount of interest earned if you bank with Bank of America. 

Currently, there’s an introductory offer with this card, which promises a $300 statement credit if you use your card to spend at least $3K in the first 90 days and 0% interest for the first 9 billing cycles (after that, it’s ≤25.99%). 

Who is this card good for? 

The Business Advantage Customized Cash Rewards Mastercard™ from Bank of America is best for business owners who like to take advantage of cash rewards and are pretty organized with their spending. While you can earn 1% cash back on all spending, you would want to use this card if you plan to spend primarily in one category to maximize your rewards. 

You should also have a good business and personal credit score since it’s an unsecured card with a competitive interest rate from a traditional lender. 

2. Business Advantage Unlimited Cash Rewards Credit Card

Bank of America Business Account: Unlimited Cash Rewards Card

Next, let’s take a peek at the Business Advantage Unlimited Cash rewards card. “Unlimited” implies that you will earn on all spending. The standard cashback rate for this card is 1.5%. So, you will earn at least 1.5¢ with every dollar you spend — it’s a pretty simple offer.  

Like the Customized Cash Back card above, you can earn more if you’re a Bank of America business banking member (if you qualify for the Preferred Rewards Business Tier). And, there is no annual fee. 

The Unlimited Cash Back card also has an intro offer of $300 statement credit with $3K spending in the first 90 days and 0% interest for the first 9 billing cycles ( and ≤25.99% thereafter).  

Who is this card good for? 

The Business Advantage Unlimited Cash Rewards Mastercard™ from Bank of America is structured for someone who is looking for a simple rewards card. You can earn on all spending without prioritizing a specific category. Bank of America banking members may see even more benefits. 

You should have a good credit score. Again, we’re looking at a traditional lender’s unsecured credit card with competitive rates, so they need to see proof that you will pay as agreed.  

3. Business Advantage Travel Rewards Credit Card

Bank of America Business Advantage Credit Card Reviews: Travel Rewards

Now, let’s explore the Business Advantage Travel Rewards credit card. Instead of cashback, with this card, you will earn points (though the math usually comes out about the same with points as it does cash) at a rate of 1.5 points per dollar spent. 

Points can be redeemed as statement credit, gift cards, or toward offsetting travel or dining purchases. And, cardholders who make travel purchases through the Bank of America Travel Center can book hotels (from 200K+ brands) and flights (from 200+ airlines) with no blackout dates. 

The current online introductory offer can get you 30K bonus points with $3K in spending in the first 90 days. As with the other Business Advantage credit cards’ intro offers, this can also be redeemed as a $300 statement credit but is limited to use toward travel or dining purchases. As of now, you can also take advantage of 0% APR for the first 9 billing cycles (≤25.99%  after that).  

Who is this card good for? 

The Business Advantage Travel Rewards Mastercard™ is designed for business owners who want to earn travel or dining rewards with their credit card spending. This might be the right card for you if you would find benefit in redeeming 

Not to sound like a broken record, but you should have a good credit score — Bank of America tends to follow conventional standards with their underwriting for unsecured credit cards. 

You Might Also Like: Marriott Bonvoy Business Credit Card Review & Comparison 

4. Alaska Airlines Visa® Business Credit Card

Bank of America Credit Card: Alaska Airlines Business

Now, we have the Alaska Airlines Business Credit Card. Unlike other credit cards from Bank of America, this is a Visa. And, you can earn “miles” rather than cash back or points. The benefits of this card come at a cost of $50 per year, but you can earn 3 miles per dollar with spending at Alaska Airlines and 1 mile per dollar on all other spending. 

Since miles usually convert the same as points, this card has triple the rewards potential of the Business Advantage Travel card (if you use it solely for purchases with the airline).

Miles can be redeemed with oneworld™ Alliance and Bank of America’s Global Partners. Some airlines include:

  • Alaska Airlines
  • American Airlines
  • British Airways
  • Cathay Pacific
  • Finnair +more

In addition, if you get this card, you will get Alaska’s famous companion fare every year on your account birthday. This will enable you to purchase one round-trip, coach ticket for a traveling companion for just $121 — companion tickets must be purchased at the same time as the base ticket and on the same itinerary. 

Furthermore, you will get one free checked bag for yourself and up to six guests traveling with you; the value is $60 per bag. Plus, while traveling, you can enjoy 20% off in-flight purchases when you pay with your card. 

The latest introductory offer is 40K bonus miles with $2K in spending in the first 90 days. 

Note that the APR is ≤27.74% variable. 

Who is this card good for? 

The BoA Alaska Airlines Business Visa is suited, first, for any business owner who will take advantage of the companion fare yearly. With redemption, the $50 annual fee will pay for itself instantly. And, the high miles rewards offer makes this a natural choice for business travelers who frequent Alaska airlines will reap the most rewards. 

All others will earn only 1 mile per dollar and would probably be better off applying for one of the Business Advantage cards instead.  

Finally, you will almost certainly need a high FICO score of 700 or better to qualify. 

5. Platinum Plus® Business Credit Card

Bank of America credit card limit: Platinum Plus Business Mastercard

While there are no rewards offered, the interest rates with the Platinum Plus Business Credit Card are lower than with other unsecured business credit cards from Bank of America (≤24.99%).  

This card has no annual fee — it’s comparable to the Business Advantage cards in that way. And, you can take advantage of many of Bank of America’s free financial tools such as unlimited employee cards and automatic bill pay. 

There is an ongoing intro offer, right now, for 0% APR for the first 7 billing cycles and $300 statement credit with $3K spending in the first 90 days.  

Who is this card good for? 

The Bank of America Platinum Plus Business Mastercard™ is great for a business owner who wants a simple business credit card with a lower interest rate. If you’re not interested in rewards, and you just want to be able to leverage the buy now, pay later features of a revolving card, this could be your best bet. 

Once more, you’ll need good credit to qualify. 

6. Business Advantage Unlimited Cash Rewards Secured Card

Bank of America Business credit card application status: Cash Rewards Secured Mastercard

The Business Advantage Unlimited Cash Rewards Secured Credit Card is very similar to the unsecured Unlimited card (see above). 

Here’s how the two cards are the same: 

  • ≤25.99% standard APR
  • $0 annual fee
  • 1.5% cash back rewards
  • Rewards redemption options:
    • Statement credit
    • BoA checking or savings deposit
    • Paper check 

What’s different about the secured card is that it’s intended to help you build business credit. So, if your credit scores are lower, this card provides a solution. 

A $1K minimum deposit is required to open an account, and payments are reported to credit bureaus. 

Who is this card good for? 

The Bank of America Business Advantage Unlimited Cash Rewards Secured Mastercard™  is designed for business owners who might want to apply for the unsecured Unlimted Cash Rewards card.  

With a secured card, there’s no need for excellent credit, because you will use your own funds to build credit. 

7. Bank of America Executive Explorer Card

Bank of America Business credit card login: Executive Explorer Mastercard

Finally, the Executive Explorer card is another offer you might want to consider. With this card, there is a $375 annual fee. While that’s a bit steep, if you take advantage of everything the card offers, it more than makes up for the fee. 

For example, you can get a $600 Lounge Access credit every year and $100 Airport Fast Track credit every four years, just for having the card. Then, you can access the Benefits on Us and Dinova Rewards programs, which are covered in our Bank of America corporate card review

The catch is that this isn’t a revolving credit line. Instead, it’s essentially a charge card that you must pay in full. You must be an executive or owner of your company to join the program. 

Who is this card good for? 

The Bank of America Executive Explorer Mastercard™ is great for business owners and executives who want discounts on the occasional airport lounge experience and Airport Fast Track. Anyone who might like to leverage dining and culture rewards (and thinks they’ll make the $375 annual fee worthwhile) should contact the sales team at Bank of America to discuss details in full. 

Recommended: Bank of America Corporate Cards: A Complete, Uncut Review

Final Thoughts

Bank of America seems to have a credit card for every type of business owner. Whether you’re a corporate executive spending hundreds on Lounge Access for business travel, or you simply need to build your business credit, one of the above cards could be right for you. 

Keep in mind, though, they’re not the only cards out there. Explore some of our previous business credit card reviews to make sure you’re applying for the right card. 

Bank of America does require a personal guarantee, so their business credit cards can affect your personal credit score. 

If you want to learn how to obtain up to $100K in business credit (that won’t affect your personal credit) in as few as 30 days, join Business Credit Workshop today.

Bank of America Corporate Cards: A Complete, Uncut Review

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Bank of America Corporate Card

Bank of America is one of the largest banks in the United States, with robust financial offers for consumers and businesses. One popular business product from Bank of America is their corporate cards — here, we examine this offer in full (note: we’re not talking about the small business credit cards). 

We’ll look at the benefits and the downsides of BoA’s corporate cards, and, by the time you’re done reading, you’ll know whether it’s right for you (or if you should explore other offers). 

Here’s what’s covered: 

Now, let’s begin. 

What is a Corporate Card? 

Before we dig into Bank of America’s offer, how do corporate cards work? 

Typically, businesses with substantial revenue can obtain corporate cards to improve cash flow and track spending. With corporate cards, credit lines are issued to a corporation or business entity, not the business owner. 

Not just any business can get a corporate card, though. The requirements are typically strict, based on revenue (usually in the millions) and expenses (typically in the hundreds of thousands), creditworthiness (credit score), and sometimes require several cardholders to qualify. 

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

In many ways, corporate cards are like other credit cards. Businesses might need a corporate card in order to keep track of expenses and employee spending, and/or to get quick or easy access to funds to grow or maintain operations. 

Corporate cards vary from personal cards in the way that the business, not the individual is responsible to maintain the account and pay the balance. And, corporate card terms often require that the balance is paid in full each billing cycle, whereas most traditional personal credit cards have revolving terms. 

When corporate card payments are reported to credit bureaus, corporate credit cards can impact the business’ credit score, for better or worse. On-time payments on a corporate card typically help increase the company’s business credit score(s). 

Finally, corporate cards should typically not be used for personal expenses. While using a business card to pay a personal expense is not always illegal, there can be tax implications and it could be a violation of the cardholder’s fiduciary duty to the company. 

Now, let’s look specifically at Bank of America’s corporate card offer. 

What is the Bank of America Corporate Card? 

Bank of America services several business credit cards — a handful of small business credit cards and a commercial prepaid credit card. The commercial prepaid card is the most similar to a typical corporate card, but it is not really a line of credit. Cash must be deposited to the card before the funds can be accessed.  

You may have received a pre-approval offer from BoA for a business credit card, which is how you ended up here. In this case, note that we’re exploring an entirely different offer. 

Bank of America Business Credit Card Preapproval

The idea behind prepaid is that businesses can leverage digital payments for purchases anywhere Mastercard or Visa cards are accepted, withdraw cash at ATMs, and go about their day without carrying large amounts of cash while protected from fraudulent financial activity via BoA’s zero liability policy.  

Bank of America’s prepaid cards are widely used in government programs like unemployment and child support, and the fees are a little steep. The bank tends to charge $2-5 per transaction, which is determined on a case-by-case basis, depending on your account needs. 

Unlike some corporate card programs, prepaid card use is not reported to credit bureaus, so if you opt to join the BoA commercial prepaid program, there will be no impact on your business’ credit score. 

Recommended: Brex Card Review: Is This Corporate Card Too Good to be True? 

Benefits of BoA’s Commercial Prepaid Cards

If you have to pay in advance, and payments aren’t reported to business credit bureaus, why would you want to take advantage of a commercial prepaid card system? BoA offers more than a handful of benefits for companies and staff cardholders with its prepaid cards. Like corporate credit cards, BoA’s prepaid cards are intended to help you manage cash flow and come with other perks. 

If you choose to leverage BoA for this purpose, here’s what you’ll get. 

The business benefits: 

  • Comprehensive payables – Business owners who use Bank of America’s prepaid cards can utilize automation for their payables system, to save time. In turn, this feature can save companies a lot of money. 
  • Secure, fast purchases on the go – Take advantage of secure purchases using your mobile wallet platform with Bank of America prepaid cards to make in-person payments throughout North America, Europe, and Asia Pacific. 
  • Virtual travel cards – Virtual cards can be used with cardholders’ mobile wallets and make it easier for travel coordinators to implement spending limits and access travel data for accounting and reports. 
  • Complete accounts payable – Members also get access to Bank of America Complete AP, which automates the entire accounts payable cycle, from invoicing and receipts to payment processing. The platform can be integrated into your enterprise resource planning system to help reduce paper and manual processes.  

If your business involves travel, especially for multiple staff members, you can see how these cards might be a great idea, even if they come with no traditional line of credit. 

The cardholder benefits: 

  • Global card access – Cardholders get visibility, convenience, and control with Bank of America’s Global Card Access, and can manage their prepaid cards from anywhere they can connect to the internet. 
  • Contactless payments – When it comes time to pay for goods and services, BoA prepaid cards can be used with any functioning contactless payment system — these systems continue to grow in demand and implementation. 
  • Executive Explorer Card – For an additional $375 per year, executives at your company can leverage advanced card perks, including $600 Lounge Access credit and $100 Airport Fast Track credit per year. 
  • Dining and entertainment perks – The “Benefits on Us” (just a catchy title) gives BoA commercial cardholders free access to over 225 cultural institutions across the US, and rebates on in-network dining via Dinova.™ 

The most notable perks seem to be dining and entertainment, so let’s explore those a bit further. 

Accounts Payable Automation Overview

Bank of America Complete AP

Bank of America’s “Complete AP” launched in April 2021, and is included with commercial prepaid accounts. According to BoA, the platform can easily be integrated with “nearly any” existing enterprise technology. 

I know for sure that the platform integrates with Quicken, Quickbooks, and MyPortfolio. If you use another technology, you might have to reach out to a sales rep to make sure that your platform will integrate easily. 

Next, with Complete AP as a standalone system, you have several automation options: 

  • Capture and digitize supplier invoices
  • Route invoices for coding and approval
  • Visibility & control of invoices & payments
  • Organized payment queues 
  • Payment approval alerts & audits 
  • Automated payments (via supplier’s preferred payment method)
  • Communication with suppliers
    • Account validation
    • Network enrollment
    • Payment preference controls
    • Payment research & support
  • Currency exchange
  • Cross-border payment tracking 

And, as of August 2022, Bank of America was scouting a new software integration developer. This tells me that the company is definitely building out its technology offer, and there will be more automation features and integrations to come.  

Lounge Access Overview

Bank of America Business Debit Card benefits

Many business travelers stop in at airport lounges for more comfortable layovers, including snacks, beverages, and showers (some of them even have swimming pools, massage, and fitness centers). Lounge Access with a BoA Executive Explorer Card is limited, but the lounges that credit may be spent on are some of the most popular: 

  1. Admiral’s Club by American Airlines
  2. Alaska Lounge by Alaska Airlines
  3. Delta Sky Club by Delta Airlines
  4. United Club by United Airlines 

If your executives utilize any of the above lounges, and individual spending is in excess of $375 per calendar year, you could save hundreds by taking advantage of the Explorer Card offer alone. 

Airport Fast Track Credit Overview 

BoA Business Advantage Credit Card perks

The $100 Fast Track statement credit per Executive Explorer card, per year can be used for a few different airport purposes.

  1. TSA Precheck
  2. Global Entry  
  3. Nexus
  4. Registered Traveler

Again, this perk is only available with the Executive Explorer card, which costs $375 per year — it is not included with every business prepaid card from BoA. So, while it’s a great perk to offer, it is best leveraged by individual staff members who will also take advantage of Lounge Access credits. 

Arts & Culture Benefits Overview

Global Access Card Bank of America Benefits

Available with all BoA prepaid cards, Arts & Culture benefits are fun for anyone who might find interest in visiting museums on pitstops while traveling for business. With a BoA, cardholders get complimentary access to hundreds of museums and cultural centers in the United States. 

For a full, updated list of participating organizations, visit BoA’s Museums on Us participant roster. 

Note that this perk can be leveraged by any BoA cardholder during operating hours and can only be used during certain weeks each month — you’ll have to check with the facility to find out if your travel aligns with the dates and times that you can cash in on the perk. 

Dinova™  Rebates Program Overview

Bank of America Global Access Card Login benefits

There are over 20K restaurants in Dinova’s network. And, with BoA prepaid cards, businesses earn rebates on all in-network cardholder spending, and cardholders can earn individual points that can be exchanged for gift cards. 

There’s no need to offer incentives to staff to take advantage of these perks, since BoA does that for you through their individual rewards program. And, Executive Explorer cardholders (owners and executives) get 2X points. 

Bank of America Business Credit Cards

At this point, if you’re not interested in a prepaid card, you might find what you’re looking for with one of BoA’s business credit cards. Here’s a quick summary of what’s available. 

APRAnnual FeeRewardsIntro Offer
15.99 to 25.99%$01.75% to 5.25%0% APR for 9 mos$300 bonus
15.99 to 25.99%$01.5% unlimited0% APR for 9 mos$300 bonus
15.99 to 25.99%$01.5 points per $130K bonus points
19.74% to 27.74%$50 +$25 per card$121 Companion Fare™ Free checked bag3 miles per $140K bonus miles

For even more options, see the full list of BoA small business credit cards. 

Frequently Asked Questions

Is it hard to get a Bank of America card?

Generally, a BoA credit card account requires a credit score of 750 or higher. However, there are quite a few perks to be leveraged with prepaid or “corporate” cards, which have no credit score requirements. Of course, you must be at least 18 years old and have a valid SSN or ITIN. 

Which FICO score does Bank of America use?

Typically, BoA uses Experian to pull credit but can get some information from Equifax and Transunion as well.  

What credit score is needed for a Bank of America business card?

A personal credit score of 750 may be required, even for a business credit card. However, corporate prepaid cards have no strict credit score requirements. 

Final Thoughts

Bank of America has quite a few options for business owners looking to optimize their corporate cash flow. If you’re a high-revenue company, interested in perks related to travel, arts & culture, or dining, they may have a corporate offer for you by way of their prepaid cards system. If you’re looking for lines of credit, there might be a BoA business credit card that would be great for you. 

BoA’s business offer is pretty traditional, but there’s nothing boring about it. If you liked what you learned here, and saw something that would be beneficial for you, I recommend you chat with a BoA sales rep to find out what might be best for you at this time. I can’t knock the offer. 

But, if you are interested in a corporate card offer that’s more innovative — maybe something with more tech perks — I’ve done a handful of reviews of other corporate cards that you may want to see: 

And, if you want to learn how to obtain up to $100K in business credit (won’t affect your personal credit) in as few as 30 days, join business credit workshop today.

Bluevine Review: Free, High Yield Small Business Checking! Are They Serious?

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Bluevine Business Checking Review

I’ve been really excited to review Bluevine since so many people have asked me about it. This is a free small business checking account offer that earns 50X the national average interest with no monthly fees or minimum deposits. Of course, they can’t possibly cater to every business owner… Can they?

That’s what we’ll explore here.   

Now, let’s fire away!

Bluevine Business Checking Overview

Bluevine offers free, single-user business checking accounts that can earn 2% interest on up to $100K with qualifying activity. There are no minimum deposits or NSF fees, which is incredible. 

One standout feature that Bluevine doesn’t seem to advertise much is the ability to give your bookkeeper access to your account without sharing your dedicated login information — this can come in handy!

Bluevine login

To qualify for interest accrual, account holders must meet at least one of the following requirements: 

  • Spend $500 with your Bluevine debit card in a calendar month OR
  • Receive or deposit $2.5K via ACH, mobile deposit, wire transfer, or via a merchant payment processor (not ATM). 

Bluevine uses the MoneyPass ATM network, with 37K locations nationwide. So, if you’re super rural, you may not be able to access a surcharge-free ATM. In this case, you would pay $2.50 for every ATM transaction. 

While most services are free online and within the MoneyPass network, Bluevine charges $4.95 for all cash deposits made at an ATM. This might be steep for a business that makes multiple cash deposits, but online businesses wouldn’t be affected much. 

There are no limits to the number of transactions that can be made in a Bluevine account, but cash transfers are limited to $1.5K per transaction, $2K per day, and $7.5K per month.  

ProsCons
Free checking with no monthly feesNo joint accounts
2% interest on balances up to $100KMinimum requirements to collect interest
No minimum deposits$7.5K maximum monthly cash transfers
Sub-accounts with dedicated account numbers$2.50 fee for out-of-network ATMs
Unlimited, fee-free transactionsNo branch access (ATM-only)
No NSF fees$4.95 fee for cash deposits

So, a Bluevine checking account seems like a fantastic option for certain businesses. The offer seems to be catered to accountants, bookkeepers, freelancers, and other service businesses that primarily conduct digital transactions. 

Bluevine review Reddit

Naturally, there are businesses that Bluevine isn’t going to work well for. 

For one, partnerships might not be a great fit, since only one account holder is permitted for each account. Next, super rural businesses without easy access to MoneyPass ATMs might end up paying quite a bit in surcharges (assuming you would need ATM access).  Finally, this offer is simply not well-suited for businesses that need to deposit more than $7.5K in cash monthly, as that’s where Bluevine maxes out. 

Fun Fact: Bluevine checking is powered by Coastal Community Bank, which is also the servicer for the X1 credit card. 

Bluevine’s Line of Credit

Bluevine offers lines of revolving credit up to $250K, with rates as low as 4.8%, serviced by Celtic Bank.  Once approved, you can get access to funds quickly. Note that the advertised interest rate is “simple interest,” which means compounding isn’t accounted for, and the low 4.8% is based on a 26-week repayment plan. 

Bluevine loan

You can apply for a line of credit online in minutes. Bluevine uses Plaid to connect to your bank account and analyze cash flow. To qualify, you must have been in business in the U.S. for at least 6 months, have at least $10K in monthly revenue, and have a personal FICO score of 625 or higher. 

Bluevine reviews

According to at least one satisfied lendee, you cannot apply for a Bluevine loan using your Bluevine checking account, which seems a little wonky. Hopefully, they will update their lending platform to work with their own bank at some point in the future. But, as of now, there doesn’t seem to be a workaround. 

If you apply and are approved for a Bluevine line of credit, you can choose to wire transfer funds for access within a few hours and a fee of $15. Alternatively, you can choose an ACH deposit, which can get your funds to you as soon as the next business day (however, in some cases this can take a few days). 

Recommended: Meet Celtic Bank: A Humble Brand With an Enormous Reach 

Bluevine’s Bill Pay

If you have the banking information for your payees, you can add them manually in your Bluevine account dashboard. I feel like online check services like Checkbook.io might be easier to use, since you only need an email address and name to deliver payments. But, bill pay is a nice feature for any bank account. 

Moreover, you can connect Bluevine to Quickbooks to view income and expenses from your checking account dashboard. 

Bluevine Bank

Bill pay funds are held by Silicon Valley Bank, a trusted FDIC-insured institution. All-in-all, I think Bluevine’s bill pay options are competitive. 

Bluevine Company Overview

Bluevine Inc. was co-founded in July 2013 by Eyal Lifshitz, Moti Shatner, and Nir Klar in Redwood City, California. The company started as an invoice factoring company, offering capital loans from $5K to $50K with “cash in as fast as 1 day.” They exited the factoring game and announced their free checking account offer in early 2020.  

I found this gem from 2014 in the Wayback Machine: 

Bluevine capital

Frequently Asked Questions

What happened to Bluevine?

There are a few rumors floating around that Bluevine is not accepting new applications. This is not the case — Bluevine is accepting new applications for lines of credit and new bank accounts. The rumor that they were closed may have started when PPP funding ended, as Bluevine was an approved lender for the Paycheck Protection Program. 

Is Bluevine accepting new applications?

Yes! Despite the hearsay, Bluevine is currently accepting applicants for business checking accounts and lines of credit. 

Does Bluevine run a credit check?

Yes, Bluevine runs a credit check for applicants looking for a line of credit. For approval, applicants must have a FICO score of 625 or higher. 

Does Bluevine do a hard pull?

For businesses organized as an LLC, Bluevine does not do a hard pull, so applicants’ credit will not be negatively impacted. 

What bureau does Bluevine pull from?

Bluevine has a partnership with Experian, Equifax, and Dun and Bradstreet, and reports on-time payments to all three. 

Does Bluevine affect credit score?

Since they report payments to business credit bureaus, on-time payments to Bluevine will have a positive impact on your credit score.  

Does Bluevine charge a fee?

The only fees Bluevine charges for checking accounts are ATM fees for cash deposits. Most ATMs within the MoneyPass network are surcharge-free for Bluevine account holders. 

How much can I withdraw from Bluevine?

The maximum amount you can withdraw from Bluevine is $1,500 per transaction, $2,000 per day, and $7,500 per month

Is Bluevine a direct lender?

No. Bluevine’s lines of credit are serviced through Celtic Bank. 

Who owns Bluevine?

Bluevine was founded by Eyal Lifshitz, Moti Shatner, and Nir Klar, who still currently own and operate the company. 

What credit score does Bluevine use?

Bluevine uses applicants’ FICO scores to determine creditworthiness. 

Is Bluevine FDIC insured?

Bluevine checking accounts, loans, and bill pay funds are FDIC insured through the respective banks that service these offers (Coastal Community Bank, Celtic Bank, and Silicon Valley Bank).  

How many customers does Bluevine have?

As of February 2022, Bluevine had 450K customers. 

The Verdict: Is Bluevine Legit? 

Yep! This business checking offer is legit, and I would go as far as to say that I recommend it… for some business owners, namely accountants, freelancers, and other entities that conduct mostly digital banking. However, if you move a lot of cash through your company, or you have more than one owner, Bluevine probably isn’t your best option. 

As far as Bluevine’s line of credit, I do trust offers from Celtic Bank, but I’m not the biggest fan of these fast-cash-type offers that use the owner’s personal FICO score to determine creditworthiness. Instead, I like to teach business owners to obtain credit using their business credit. What I do like is that Bluevine reports payments to D&B. So, with responsible payments, a Bluevine loan can help you build business credit.  

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

The Ultimate Tillful Review (+New Secured Credit Offer for Businesses)

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Tillful review

Recently, I came across a Facebook post in a private group, announcing a new secured credit card for businesses — it’s perfect timing for an offer like this since Wells Fargo and Brex no longer offer secured business credit cards. So, naturally, I had to explore the offer. And, what I found was so much more than just a credit card. 

This complete Tillful review is a breakdown of everything I learned, and how you might use this offer to build business credit. 

Here’s what’s covered: 

Now, let’s get going! 

What is Tillful? 

Tillful is a fintech company that offers businesses a free credit score (which is different from a DUNS number and other traditional credit scores) that they use to match account holders with curated financial offers. To me, the business closely resembles a new Credit Karma for business. 

By connecting to users’ business bank accounts via Plaid, the platform is able to gain financial information about companies, which is delivered back to users to see how they stack up. 

Tillful also offers their own free, secured business credit card with 1.5% cash back, to help owners build business credit, an innovative and timely offer. 

Tillful Business Credit Score Overview

The folks at Tillful have created their own business health score, which ranges from 0-100 and is based partially — i.e. mostly — on a company’s cash reserves and industry, a measure of real-time financial performance. The Tillfull score is never shared with lenders and is meant to give users a fresh view of their company’s financial health. 

Tillful Business Health Score

I’m not confident that this scoring system will actually influence potential lenders outside Tillful’s platform, but it seems like a pretty clever and helpful tool. 

In addition, Tillful has partnered with Experian, who recently launched a machine-learned business credit score called Intelliscore Plus V3 (IPV3) — the new model is said to improve risk assessment for business lenders. Active Tillful account holders can request their free IPV3 business credit score at any time.

Experian IPV3 business credit score

However, Tillful users who want to see a full report will have to order it from Experian using a quick link in their Tillful account dashboard or by visiting Experian’s website directly. 

At least in part, the IPV3 score is based on a company’s tradeline payment history and ranges from 300-850. Rather than a 12-month model prediction, the IPV3 is based on the previous 24 months of credit history. 

Coming from Experian, I think this scoring system is going to stick and that continually more traditional lenders will use it to make funding decisions. 

Recommended: Nav Review: A Tool that Helps Build Up Your Business Credit Score 

Currently, Tillful has a 4-star rating on Trustpilot, which tells me they’re making users happy, for the most part. 

Tillful reviews

Most business owners typically don’t have all of the information they need to access business lines of credit — Tillful gives them a new way to establish business credit at no cost (other than a security deposit for the secured credit card). 

Recommended: This is How to Leverage Business Credit to Transform Your Life 

Partner Offers Overview

New businesses that show very low financial reserves won’t qualify for the Tillfull credit card, but will be directed to Biz2Credit for alternative funding. If you have multiple business bank accounts, consider connecting all of them to get more relevant offers. I caution against connecting bank accounts in poor standing. 

Tillful login

In addition to funding offers, Tillful might connect you with a new business banking or insurance offer. Especially since the company is fairly new, I assume they will continue to expand their partner offer — as of right now, it seems on par for a business just starting to build credit history (as long as you do your due diligence to make sure a better competitor offer doesn’t exist and pay your accounts responsibly). 

Business Credit Education Overview

Tillful is built to help companies improve their credit (and to earn from partner commissions), so the offer wouldn’t be complete without business credit education. Tillful’s blog is stacked with information about how to improve your credit score, streamline your cash flow, create an effective budget, and learn about COVID-19 financial relief. 

Tillful business credit resources

After browsing the blog, my official stance is that the information seems to be well-written, easy to digest, and helpful for businesses trying to build credit. 

The Tillful Credit Card

The Tillful business credit card is a secured card for legal entities. Like a charge card, the balance should be paid in full each month. Unlike other secured business credit cards, Tillful uses Plaid to connect to your business bank account, sizes up your cash flow and reserves, then makes an offer to apply if you are likely to qualify. 

Tillful card login

One highlight is that this card comes with 1.5% cash back rewards on all spending. If you read the fine print, this is a promotional rate, which means rewards could decrease over time. Next, there is no personal guarantee. Finally, there’s no hard pull to an applicant’s credit.  

Currently, the card reports payments to business credit bureaus to help build business credit scores. Tillful plans to report to Dun & Bradstreet in the near future.  

Since it is a secured card, you will be required to deposit funds into your account, and the minimum security deposit is $500.  

The Tillful App

If you didn’t already guess, Tillful also has an app available on the iOS App Stores. It has a 4.4-star rating on the platforms. So, users can conveniently monitor business credit and apply for funding from an Apple device. Thus far, there is no Tillful app in the Google Play store (you might just as easily log in using your mobile browser).  

Tillful app

Using the app, you can get your free business credit score and see financial product recommendations, including funding options. It’s pretty straightforward. 

Tillful Company Overview

Located in the San Francisco Bay area, Tillful was founded by Ken So in June 2020. Tillful is a subsidiary of Flowcast, which is a company that uses AI to help financial institutions make credit decisions (hence the fast friends situation with Experian). 

Tillful Crunchbase

Flowcast has been around since 2015, and has a five-star glassdoor rating. So, from what I can tell, they’re a great company to work for — in full disclosure, there are currently only two reviews, so this isn’t a particularly scientific sample to base opinions on. 

So, let’s talk about the founder, Ken So (also Flowcast’s CEO). Before all of this, So was the Director of Corporate Development at Ericsson and previously worked in the corporate dev department at Qualcomm – both very reputable companies. To me, this seems like a strong and trustworthy leader and makes me believe the offer is likely to be around for a while. 

According to Growjo.com, Tillful’s current annual revenue is estimated at $2.3 million. And, since they’re not reliant on external funding, they’re likely at an advantage over other newcomers in the business credit-building arena. 

Tillful valuation

Frequently Asked Questions

Here are the answers to the questions people are asking about Tillful:

Is Tillful free?

Yes, Tillful’s offer is completely free – users can access their credit score and secured credit card. However, any partner offers that Tillful recommends may charge fees and interest.  

Does Tillful do a hard inquiry?

No, Tillful does not do a hard pull on business or credit reports. Instead, credit card approval is based on other factors. 

Does Tillful report to credit bureaus?

Yes, Tillful reports payment history to business credit bureaus, as the credit card offer is intended to help entities build credit. 

Which credit bureaus does Tillful report to?

Currently, Tillful reports payments to Experian and Equifax Business. 

Does Tillful report to Dun & Bradstreet?

Unfortunately, no. As of October 2022, Tillful does not report on-time payments to D&B or Equifax Business. However, they plan to in the near future. 

Tillful Secured Credit Card Competitor Overview

Tillful is not the only secured business credit card on the market — a couple of veterans still exist: Bank of America (BoA) and First National Bank of Omaha (FNBO). See how these three secured business credit cards stack up next to one another.

Tillful competitors, Tillful vs BoA vs FNBO

The key tradeoff with the Tillful secured card is that you should pay your account in full each month, while the other available cards have revolving terms — you can make a monthly minimum payment if you choose, so there’s a bit more freedom with the old-timers. 

However, monthly minimums come with the risk of high fees and interest; with the Tillful secured business credit card, if you make your payments as agreed, you’ll avoid this. Now, if you pay a BoA or FNBO card in full each month, you will avoid interest charges, so these offers almost balance each other out, not factoring FNBO’s $39 annual fee.

Tillful is available with a smaller minimum credit line. So, businesses with less cash in reserves are more likely to qualify. Plus. Tillful does no hard pull to your credit and there is no personal guarantee (the business owner is not liable for repayment of the funds — the business is), which is not the case with BoA or FNBO. 

If I were going to use a secured credit card to establish business credit, I would choose Tillful over BoA or FNBO. 

The Verdict: Is Tillful the Real Deal? 

Of course, the question I was most interested in answering when I started down the Tillful rabbit hole is whether or not this is a good offer for building business credit. After some digging, it appears that this is a legitimate offer with a ton of potential. The offer is free, the company will help businesses improve credit (with on-time payments, anyway), and the brand is transparent about what they provide. 

Right now, the biggest downside to Tillful’s offer is that they do not report on-time payments to D&B. To report to D&B, companies need at least 300 active accounts. So, I think it is likely that Tillful will do this in the future, in which case I would probably give the offer a 5-star rating (when appropriately utilized). 

With that said, Tillful does currently report payments to Experian Business, and they claim that they will be reporting to Dun & Bradstreet as well as Equifax Business soon. Whether they deliver on that offer is yet to be seen, but do keep your eyes peeled.  

Note that as far as business credit monitoring platforms, I’m still a bigger fan of Nav — mostly because I have more trust in established companies (Plus Nav has an Android app). But, I do encourage you to check out both offers and see which one you like best.

I teach a seven-step process to get up to $100K in business credit in as few as 30 days by leveraging the right combination of offers and setting up your business the correct way. If you’re interested in learning exactly how it works, join Business Credit Workshop today.

AtoB Business Gas Card Review: Is it Really a Superior Fleet Card?

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AtoB business gas card review

I have not used this card myself, but AtoB has been coming up in conversations about building business credit for over a year now. People in my network are giving the card and the company rave reviews. So, I had to find out what was up for myself. Now that I know, I definitely want to share this offer with readers.  

Here, learn everything you need to know about an AtoB business fuel card: overview, benefits, highlights, and application process (there’s even a bit of info about bonus offers from AtoB). 

Here’s the breakdown: 

Now, learn what this offer has in store.  

What is the AtoB Gas Card? 

AtoB offers a business “fleet card” for companies that would like to buy now and pay later for fuel and automotive services. In addition, the card offers bonuses like discounts up to 25 cents per gallon (determined by the underwriting team upon approval) on gas… and it’s free — zero fees.  

Fleet cards aren’t just for business owners, but for anyone who drives for your company. So, you can request multiple cards and provide one for each driver. 

The AtoB card is different from a typical credit card in that you don’t make minimum monthly payments. Instead, the terms are net 7 (you pay the card in full every week). 

I heard that AtoB offers net 7 terms (true) — this means cardholders are expected to pay their balance in full every 7 days — and that these terms could be expanded to net 14. While there might have been an offer to extend payment terms in the past, this is not the case. As of today, according to an AtoB sales rep, the only available terms are net 7.  

AtoB gas card reviews

Finally, their offer is geared toward but is not limited to serving the trucking and logistics industry, which is natural since trucking and logistics companies have the largest fleets. 

Where is AtoB Located? 

Celegans Labs, Inc., the name of AtoB’s parent company, is located in San Francisco, California, at Four Embarcadero Centre, Suite 1400. Their company actually does business from Carr Workplaces, a co-working space off Mission Street — a building about 8 blocks from Oracle Park (makes me wonder if they’re Giants fans). 

Who Owns AtoB Fuel Card? 

AtoB was founded in 2019 (not very long ago!) by Harshita Arora, Tushar Misra, and Vignan Velivela. Collectively, they seem to be a brilliant tech team. 

Harshita Arora, AtoB Co-Founder
Harshita Arora
Tushar Misra, Co-Founder of AtoB
Tushar Misra
Vignan Velivela, Co-Founder & CEO of AtoB
Vignan Velivela

Harshita Arora is a backend software engineer who previously founded Harshita apps, the company that built Crypto Price Tracker, which was acquired a few years back. 

Before AtoB, Tushar Misra attempted to build a decentralized charging station network for lighter-than-car vehicles as the CEO and Founder of Grido. In the course of fewer than 18 months, the company scaled to five cities in the US and Mexico before it looks like they closed the shop.

Vignan Velivela, AtoB’s current CEO, is a Carnegie Mellon graduate. And, before this venture, he worked full-time as a software engineer at Cruise (he created motion-planning software for self-driving cars).  

AtoB Fuel Card Highlights (Beyond Savings & Ease)

In addition to the savings (up to 25 cents per gallon) on fuel and the ease of making one fuel payment for multiple drivers, AtoB has some pretty impressive features and benefits. Take a look: 

1. It’s Completely Free… Really

The key benefit of an AtoB card is that it is free for qualified businesses. Most business gas cards charge monthly fees and interest. Not to mention, AtoB’s maximum savings are at least double that of any card I’ve ever heard of. 

If it’s Free, How Does the AtoB Fuel Card Make Money? 

Most fleet cards earn money with merchant rebates — essentially asking the merchant for a rebate each time a driver pays for fuel with their card. In AtoB’s case, where they offer up to 5% savings, rebates would have to be loftier than that. And, traditionally, merchant rebates range between 1-4%. 

According to a Buzzfile report on the company, AtoB generated just above a quarter million dollars in 2019 (this isn’t much for a company that now has at least 158 employees). 

AtoB Fuel Card Reviews

Someone told me that they believed AtoB had halted operations because of changing market conditions. As of today, September 2022, this rumor is false, and AtoB is still in operation — the business is very much alive and well. Any sluggish business in recent months could have had something to do with the funding round that just took place. 

After some digging, I found that AtoB has received a total of $257 million from 5 funding rounds since August 2020. Most recently, they announced another $75 million raised on August 16, 2022. And, with the founders’ tech background, I would wager that the majority of future profits will come from their software offer. 

Furthermore, AtoB has additional offers that generate revenue. 

Extra Offers From AtoB

Complementary to the zero-fee gas card offer, which certainly stands out, AtoB has other offers within its platform. 

  • AtoB Plus – Paid, subscription-based offers for added benefits. 
  • AtoB Wallet – Stripe-powered digital wallet. 
  • AtoB Payroll – In-app W2 and 1099 payroll platform.  
  • AtoB Factor – Invoice factoring for outstanding earnings (partner offer).

If any of these interest you, I encourage you to look into them — for non-cardholders, see AtoB’s terms & conditions to learn more.  

2. Get On-Time Payments Reported to Experian Business

Anyone building business credit will want to check out AtoB’s full offer when they find out that they report on-time payments to Experian Business every 30 days. 

Does A to B fuel card report to credit bureaus?

Several fuel cards do this — In fact, there are at least a dozen or so business gas cards that report on-time payments to credit bureaus (but, you don’t see me sharing full reviews about all of them, do you?).  

3. It’s Universal: Use Your Card Anywhere Visa is Accepted 

Many, if not most business gas cards are limited to specific, in-network gas stations. AtoB has eliminated that headache and can be used at any station that accepts Visa.  

AtoB fuel card reddit

Full disclosure: AtoB is not the only fuel card that does this. For instance, Comdata has a Mastercard, and Wex has some universal options — they have at least 30 small business gas card offers with various terms. 

4. See the Best Nearby Stations to Buy Fuel 

After 90 days of account and card activation, cardholders can access the AtoB app. You’ll have to reach out to support to activate this perk after you’ve been using your card(s) for a few months.

With the AtoB Driver mobile app, anyone can find the best in-network fuel savings in their area, even when they’re on the go — And, the in-app directory includes the fuel grade at each location, to make thoroughly-informed decisions. 

Where can I use atob gas card?

5. Use Your Card to Pay Insurance, Maintenance, Tolls, & More

Most fuel fleet cards offer variable savings on fuel for every gallon purchased. AtoB offers more savings. In addition, they offer business owners the option to opt-in to use your cards on other purchases

So, if you choose, you’ll be able to unlock the ability to use your card(s) to pay auto insurance, vehicle maintenance, bridge & interstate tolls, and other business costs. 

6. Control Spending to Prevent Card Misuse

According to a US fraud report from Shell, 86% of Fleet managers think that drivers’ card misuse results in 30 cents per gallon or 10% in added costs. And, AtoB has used this statistic to power their strategy, add security features to their offer, and to provide a savings prediction for businesses.   

A to B fuel card discounts

So, you’ll not only save via instant discounts but also prevent card misuse for up to 10% savings on gas costs. 

Here’s How to Apply for an AtoB Gas Card

AtoB fuel card application

If you’re ready to apply, head over to AtoB.com, and click Get Started.

The application asks for basic contact info, company info, financial information, and your business location. You’ll have to be a legitimate business owner with an EIN to complete the online form. You’ll also need to share your weekly fuel spend and the number of vehicles you have, along with how many cards you need. And, you’ll need to upload a copy of your driver’s license.  

You can either link your business bank account or upload your three most recent business checking account statements. If you try to use a personal checking account, you won’t be able to proceed. 

A to B fuel card application financial information

Before you submit, you’ll have a chance to review the application info you entered. Once your email is confirmed, AtoB will review your information and get back to you within 5-7 business days (that is, according to the website — the sales rep I spoke with said it could take up to 14 days for a decision). 

AtoB fuel card requirements

While they state in their terms & conditions that they reserve the right to pull consumer credit, AtoB does not ask for a social security number during the application process. 

The Secured Card Option From AtoB

Business owners with lower, provable business income may qualify for a secured card (you put money into your account, and refill your fund balance as you go). While secured cards aren’t typically recommended — traditional secured card fees are just too high — this one is free and comes with most of the benefits AtoB offers. 

So, if you are unsure about your ability to qualify for a tradeline, this might still be an offer worth looking into. You be the judge.   

Answers to Related Questions

Will a gas card help build credit?

Many fuel cards report payment activity to credit bureaus, which can help build out the cardholder’s credit profile and, in turn, build credit. Fleet cards (business gas cards) often report on-time payments to D&B, Experian Business, and/or Equifax Business. So, yes, responsible payments made toward a balance on a gas card can help build credit.

Is there a “universal gas card?”

AtoB Fuel Card

Universal gas cards aren’t limited to in-network fuel purchases. There are universal cards. AtoB, for example, can be used anywhere Visa is accepted. And, companies like Comdata and Wex have universal options. 

Is fuel cheaper with a fuel card?

When used at discount locations, which vary from card to card, fuel cards enable the cardholder to save on the price per gallon of gas. AtoB offers savings of up to 25 cents per gallon at select locations and up to 5 cents per gallon universally.  Some fuel cards offer “cash price” or better at select stations.

What fuel card can be used anywhere?

Several fuel cards can be used anywhere. Any card with a Visa or Mastercard logo can be used wherever these types of payments are accepted. AtoB is a universal Visa card, Comdata offers a Mastercard, and Wex has a handful of universal card options. 

What business gas card is easiest to get?

Any secured business gas card is easy to get because you can fund the account with your own cash (and still take advantage of card benefits). Some secured cards come with high fees. AtoB, however, offers a free, secured business gas card to those who might not qualify for net 7 terms at the gate. Over time, most secured cards can be upgraded to more traditional credit terms.      

How do I apply for a gas card?

To apply for a gas card, 99% of the time, you can visit the website of the card you want and apply online. There may be some cases where you must file a paper application. Review a business credit application template to see what you might expect. 

Final Thoughts

In addition to the features and benefits already listed above, I love that AtoB, as a company, is so transparent — they’re not trying to hide anything (as far as I can tell), and their offer stands out from every competitor that I know of. 

If you’re in the market for a fleet card, I recommend you do more research on AtoB, and consider their offer. It seems to be a hit! Before you do, take a look at our list of gas cards that report to business credit bureaus.   

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

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