It constantly amazes me how many small business owners do not have a clue about business credit. We all know that one of the biggest challenges of a small business is the lack of financing. Some time in the first couple of years the lack of capital/financing kills most businesses. Something like 95% of new businesses close in the first couple of years.

Now I do understand that setting up a business, hiring staff, keeping the books, running the day to day operations of a business leaves little time for anything else. But considering the overwhelming number of businesses that close up due to lack of financing, does it not make sense to learn about business credit BEFORE even opening up a business.

On of the problems is that business owners  assume that once they get their business operating at a certain level they will have no problem getting business credit. Everything will fall into place.


To that all I will say is “Most businesses close-up in the first couple of years due to lack of financing” – excuse me for repeating myself.

Getting the appropriate business credit education is a MUST even before opening a business. Knowing how to secure financing before the lack-of-financing flood, is intelligent business planning.

The amazing thing is that business (& personal) credit is not all about having great cash- flow,  that is like saying personal credit cards are only for people with stable jobs. Ok, that might not be a good example. My point is business credit has many facets to it, cash – flow is only one of them. I have seen people set up business cash lines of credit with very little in business operations. Similarly, I have seen business with enormous operations run into problems getting financing. To take it to another extreme, a person can set-up a number of shelf-corps  complete with cash lines of credit that can be sold for profit. All done completely legally.

Of course UCC filings is just one aspect and can be effective by itself but it is just one piece of the puzzle.A good SIC code, dealing with Dun & Bradstreet, other public filings, “padding” your file (etc) all help in getting business credit.

Please just realize that the credit world, especially the business credit world, is not just for the select few.

Stay tune for updates.

Thank you.