One Step at a Time

If you remember how difficult it was to establish your personal credit for the first time, you'll have a good idea of the struggle you'll be facing with your small business credit aspirations. One of the easiest methods of starting a credit history for your business is taking out a credit card.

Credit cards are generally easier than other types of credit to obtain. Plus, many of the cards have reasonable interest rates and can be easy to maintain. They are also very useful for a wide range of purchases.

Obviously, maintaining a reasonable balance and paying your bills on time. You should keep a balance on the card but never max it out - that looks bad on your report. If possible, look for cards that provide cash back or other incentives for businesses. That way you'll be reaping other rewards from your business spending.

Another good reason for choosing a credit card is that you'll have an easy record of your business expenses at tax times. Just remember not to use your business card for any personal costs. It might be tempting but you do not want to give in to that temptation.

Another alternative is a line of credit through your bank. Many banks will extend credit to you for the short-term. If you want to pay off the balance quickly, just make larger payment. Everything over the minimum payment will go directly towards the principal so you'll save on interest in the long run. Plus, those monthly payments will each help build your credit history and allow you access to better terms and larger amounts as they are needed