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The Importance of Building Business Credit

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The Importance of Building Business Credit

By Marco Carbajo, Guest Blogger
Published: October 18, 2012

According to Wikipedia an asset can be defined as a resource controlled by an entity as a result of past events and from which future economic benefits are expected to flow to the entity.

Many startups rely on the use of personal assets to secure funding for the business. Although money is often tight during the early stages, the goal of a small business owner should be to not only increase sales revenues but to build the company’s creditworthiness.

In particular, business credit is an asset and considered an economic resource that make up the financial foundation of a company.

Here are two important questions that you should be able to answer:

What is a tangible business asset?

What is an intangible business asset?

A tangible business asset is when you purchase vehicles, real estate, computers, office furniture and other fixtures exclusively for business use.

Intangible business asset are nonphysical resources and rights that have value to a business. Some examples are copyrights, trademarks, patents, accounts receivables and you guessed it - business credit.

In this particular article we will be discussing the importance of building business credit. You don’t really hear about business credit being an asset but it is. Business credit has value to a company’s financing ability and credit capacity.

By building business credit with all the National business credit bureaus a company increases its finance capacity. This creates an asset that can be used to acquire financing for the business based on its own creditworthiness rather than that of its owners.

Here are three major benefits of building business credit:

  1. Large Credit Capacity – Businesses have 10 to 100 times greater credit capacity compared to personal credit. As a creditworthy business your company will be in a position to qualify for financing based on factors strictly related to the business. Without building business credit you will have to continue to rely on your personal credit.
  2. Increase Company Value – A creditworthy business has a powerful advantage in financing ability. Because this asset is fully transferable with the business it makes it very attractive for a potential buyer or investor.
  3. Protect Personal Credit – A business owner will be able to limit if not eliminate the use of personal credit checks since the company has its own credit ratings. This prevents a business owner from having to co-mingle personal credit, personal debts, and personal assets with his company.

Building business credit truly provides remarkable benefits for a business and gives unique financial advantages in the market place. With this asset a business can secure lines of credit, lease equipment, finance a company vehicle, and obtain business loans and credit cards without putting personal credit at risk.

Finally, it’s important to remember, the greater the business credit, the greater the worth and potential return you will receive if you choose to sell the business in the future.


About the author

Marco Carbajo is CEO of the Business Credit Insiders Circle (, a step-by-step business credit building system providing credit recovery, lines of credit, business credit cards, trade credit, and funding sources.

About the Author:

Marco Carbajo
Marco Carbajo

Guest Blogger

Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. He is a business credit blogger for Dun and Bradstreet Credibility Corp, the Community, and All His articles and blog; Business Credit, have been featured in 'Fox Small Business','American Express Small Business', 'Business Week', 'The Washington Post', 'The New York Times', 'The San Francisco Tribune',‘Alltop’, and ‘Entrepreneur Connect’.


Intellectual importance of building business property rights-although credits their glorious title-less about and more about intellectual property. This is big money: intellectual property in the market exceeds the total industrial production in the world
Even small companies can build business credit. Just start by opening a few NET-30 accounts at Quill, OfficeMax, UPS. Then buy something and pay the invoice within 30 days.
I always find such amazing posts on this website and today’s post was really amazing. Now I have become a regular user of this website. Thanks for giving us so much knowledge.
Thank you for posting information I can use for my deductions for my small business. I am sure many other readers have benefited in some way from your article.
Knowing the details of the assets of our business is to understand the capabilities and strengths of our business. From here we can know and plan what we want to achieve in business, what can we do to grow the business, and how to achieve it.
This creates an asset that can be used to acquire financing for the business based on its own creditworthiness rather than that of its owners.
Building business credit actually provides significant benefits for businesses and for the unique advantage in the market. But is it really necessary and important to me because I am a small business individual
Thanks for the information. From my point of view, building business credit undoubtedly provide many benefits, but I don't think every company need it, especially small company such as mine.
a business always needs financial help from other sources and you will get finance only when someone has trust on you . i think it good
There's a lot information on building a credit on the web. I personally don't think it's important for every business,but I can see how some do really need it and benefits from it.


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