Stage Two of the Business Credit Success Guide
How to Build Small Business Credit with No Personal Guarantee

Step 5 ~ Business Credit vs. Personal Credit

Until you truly understand the difference between personal and business credit it will be difficult to know what you are trying to accomplish by building business credit.  The terms are pretty simple to understand but there are two distinct definitions for business credit. The first definition of business credit is likely the reason you are reading this guide, to qualify for unsecured business credit based solely on the qualifications of the business.  The purpose for this definition is to separate liability and reduce the risk to business creditors going after your personal assets in case of business failure and default on outstanding debt.  The second definition of business credit is simply credit that doesn’t report to the personal credit bureaus.  This works in conjunction with the first definition to provide all the benefits of building business credit to use in place of personal credit.

Let us be clear, the fastest and easiest way to large amounts of available business credit is for the small business owner to provide a personal guarantee on all applications.  The problem with this solution is the national average credit score is well below the minimum requirements for the majority of these personal and business credit sources so the only plan of action is to start building business credit today so your business can access the unsecured financing it requires to live on an thrive.  In the next step we will discuss the benefits of using business credit in your small business to provide you the complete understanding of the difference between personal and business credit.