I see a lot of people interchanging the terms business credit and corporate credit as if they meant the same thing. They do not. Business credit and corporate credit are two different types of business credit lines. Business credit is a form of credit that uses your personal credit file but issues the credit lines to your business. These are considered recourse credit lines which require your personal guarantee. Lenders use your personal credit file to determine the size of your credit line, interest rates, and terms but issued in your business name and attached to your business tax ID number (EIN#). They do not show up on your personal credit reports and only report to the business credit bureaus. When you use these credit lines they do not hurt or affect your personal credit. They are business credit lines. Corporate credit is also issued in your business name and attached to your business tax ID number (EIN#). But your personal credit is not reviewed or considered when determining the size of your credit line, interest rates, and terms. They are determined solely by your business information and standing. They are considered non-recourse credit lines and require no personal guarantees. They also do not show up on your personal credit and only report to the business credit bureaus. When you use these credit lines they do not hurt or effect your personal credit. They do however affect your business credit. When using corporate credit lines, you are building credit histories and business credit scores with Dun & Bradstreet, Experian business bureau, and Equifax business bureau. Vendor credit lines, both Net 30 and revolving credit lines, are generating the business information establishing your business credit file and business credit scores from vendors that report positive payment history. Once your business has been around for a few years, and you have developed strong business credit scores, and you are showing growing revenue, you can start getting many non-personal guaranteed corporate credit lines. You can start obtaining business equipment, business vehicles, and even real estate using corporate credit.

Most credit applications are now done online and with AI underwriting. A cursory review of your business name could place you in a high-risk industry and get you an instant credit denial. You don’t want a business name that indicates a high-risk industry (like real estate investing or money lending) . You want generic lender friendly names such as “ABC Enterprises”, “ABC Solutions”, ABC Holdings”, or ABC Ventures”. Nothing that indicates any particular industry, especially a high-risk one. If you already have formed a business (LLC or Corporation) with a high-risk industry designation name you can try creating a “DBA” (doing business as) and use that name on credit applications. Use your EIN number for the LLC or Corp and use the DBA name on the application. Both are filed and will show up on the Secretary of States website or Department of Corporations website depending on what state you are domiciled in. https://www.secstates.com/ Example: corporate name = “ABC Real Estate Investments”. Create a DBA name like “ABC Enterprises or ABC Holdings”. If a DBA name won’t work, I suggest starting a whole new LLC. Don’t be caught with a high-risk industry indicated in your business name. Note: Not all lenders find the same industries as high-risk or unacceptable. It varies from lender to lender. Certain alternative finance lenders actually cater to high-risk industries. Of course, their funding options will come at a premium cost. Do you have a high-risk business name? (See attachment).