Managing Director, BRP Onesta – 21st Century Perspectives

The Complete Guide to Business Credit: What is Business Credit?

One of the questions we are asked frequently is what is business credit? This article explores the main concept of business credit and some of the benefits of establishing and building business credit. We also provide some of the barriers that small businesses encounter when establishing and building business credit and some things that small business owners should expect.

By Thomas Tramaglini, Managing Director at BRP Onesta About Thomas Tramaglini

Business Credit: What is it?

Nearly every successful business has established business credit. When the business wants to grow or expand they do not need the personal funds of the business owner(s) to fund their projects.

When a business is able to use their established business credit, the business has demonstrated to creditors that they have an ability to perform on paying its financial obligations according to the terms of its contracts from their creditors. That is, business credit is how well the business takes on debt and pays its bills over time.

How is business credit different than personal credit?

Business credit is the establishment, building, and maintaining of a successful borrowing and payment of credit on goods and services. Business credit is established under the business’ Employee Identification Number (EIN) and is not associated with the business owner’s social security number.

Personal creditors like loan companies and credit card companies report your payments to the three consumer credit bureaus (Transunion, Experian, and Equifax). Business creditors do not report your borrowing and payment history to your personal credit. Instead, borrowing and payment history is reported to business credit bureaus (Dun & Bradstreet, Experian, Equifax, Creditsafe). The business credit bureaus score history and provide an estimate of the business’s risk, or ability to repay a loan or other financial obligations, similar to personal credit.

On average, small business owners have 50+ lower FICO scores.

The advisors at BRP Onesta work with a large cross-section of small business owners to provide a host of back-office solutions and offer an affordable, world-class commercial lending platform.

With the need for small business loans and other financial solutions, on average our clients’ personal credit scores (FICO) are 50+ points lower than the Equifax average score of 698 that was reported in 2021.

Therefore, it is in every small business owner’s best interest to establish and build their business credit as a major advantage is that they can separate their business finances from their personal wealth, ultimately protecting themselves.

Other advantages of business credit

  • Most ability to borrow is double for what it would be on your personal credit.
  • Perfect for startups.
  • Easy and fast to establish credit.
  • Building business credit makes.
  • You do not have to have outstanding personal credit to build and use business credit.
  • Most business credit financing does not require financials for approval.
  • Your business will become much more valuable.
  • No collateral required.
  • Usually, no financials or business bank statements needed for applying (No Cash Flow Requirements).

Does your business have any business credit?

Many times, business owners tell our advisors that they have a lot of business credit. For instance, we are told that the business owner has a business credit card, or they have their car in their business’s name.

Having a business credit card or a car in your name does not mean you have business credit. If you do not know, NAV has a great free tool to gauge what you have on Experian, Equifax and Dun and Bradstreet Business Credit Scores.

Business Credit Programs Work

One of the most valuable investments that a business owner can make is by establishing their business credit. Establishing business credit is not hard, however there is a lot that goes into building one’s business credit such as understanding the process and applying for the right tradeline at the right time.

There are several different business credit programs our there and business owners should examine those programs before they get into any process. For instance, the program we provide allows small business owners to take a test drive before they spend one cent on programming. Some companies will charge you up front thousands of dollars and have a time limit for their work with you. Many times, the time it takes to establish and build business credit surpasses the time the company gives you, unleashing hidden costs. Programs like BRP Onesta’s do not have time limits.

Do It Yourself Usually Not Successful

Many different companies will provide business credit programs that are mostly do it yourself. That is, the majority of the work for Business Credit tends to be placed on the business owner. When that happens, we estimate about 85% of our clients (who have done our DIY model) never actually can attain any business credit past the basic business credit where anyone can get what is offered (Uline, Grainger). Not that those tradelines that are basic are good, they will not provide your business cash and certainly when more advanced business credit needs are required, the small business owner will be declined.

Biggest Barriers for Building Business Credit

We have been working with small business owners to build business credit for many years. We know that small business owners struggle with the following aspects of building business credit before they try to establish their tradelines:

  • Unsure of what goes into business credit approvals.
  • When business owners assume that they already have plenty of business credit.
  • Lack of understanding of what business credit is.
  • Fail to have established what creditors suggest are indicators of business creditworthiness (some examples below).
  • No business address.
  • No phone number for the business.
  • No website.
  • No domain.
  • No business email with a business domain.
  • No web presence on social media.
  • Not found on Google.
  • Just do not have the time.
  • Failure to know who gives business credit and who does not.

Coaching Models Works

Models that coach small business owners seem to be the best way for small businesses to establish and build their business credit. These coaching models are deliberate, support the business owner, and have a human being who is experienced advising the client.

For more on a coaching model, click here.

TONS of misinformation out there

Like anything online, there is a lot of information out there which is not true or just wrong. Many of our clients go to and spend lots of time on YouTube or reading stuff that is just not accurate. In some cases, clients do things which hurt their business credit such as apply for business credit cards before they have the preliminary business credit that is needed.

Companies like ours provide a team which will not only provide you accurate information but teach you about what you want to do. In fact, our advisors will walk you through every step of the way so you do not make mistakes in the work that you are doing towards your business credit goals.

Three things to watch out for when choosing a business credit program

1. Do it yourself plans.

Most do it yourself business credit models are on the surface great ideas. However, they are counterproductive because they amount of time and lack of information you have will never outweigh the efficiency and effectiveness of working with trained experts. The best programs are those which have live support, even if those plans are temporary and limited in scope.

2. SCAMS by those who do not know what they are doing.

Experience matters. Business credit development can be an art because it is different than building personal credit and many people who claim they are going to build business credit and use a canned program will never build anyone’s business credit.

When you are going to work with someone on business credit the people working with you should answer simple questions such as, What is business credit? How is business credit different than personal credit? How long does it take to build your business credit? Or What are creditors that will give you business credit when you have none or only a little business credit and which creditors require preliminary business credit for an approval?

3. Business credit is more than just business credit

Business credit is not just business credit – its way beyond business credit. So, anyone who tries to tell you different you should consider working with someone else. Business credit requires business credibility, without one cannot get approved for business credit (beyond basic). Furthermore, important pieces of business credit go way beyond having your Dun and Bradstreet address match that on the EIN letter and articles of organization or incorporation. Business credit includes web presence, knowledge of how lenders interact with borrowers, as well as when and who to apply for tradelines.

Before considering building your business credit one should know what business credit is and what value building business credit will have for the business. Business credit makes businesses more valuable and allows owners to separate their personal finances from their business, something that most small business owners fail to do.

For more information and a free assessment of your business credit, click here (no obligation).

Dr. Thomas Tramaglini is the Managing Director for BRP Onesta, a company that supports small businesses. By offering a host of important and affordable services that small business owners tend to not have time to do themselves, the team at BRP Onesta can help small businesses grow infinitely. Although located in on the famous Jersey shore, BRP Onesta serves clients in all 50 states, Puerto Rico, Mexico and Canada.

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