When I first began working in the incorporation and business credit industry, some years ago, our clients had the goal to separate their business life from their personal life. Some wished to do this for tax reasons, others for asset protection, and in many cases for both. In order to achieve this separation, they incorporate their businesses.

 

After a legal entity is properly formed and filed, the next thing to do to achieve true separation is to build credit on that entity. This is a step by step process, much like building a pyramid. I have had the pleasure of personally helping hundreds of business owners build credit for their businesses. It has been wonderful to see them succeed.

 

The desire for separation has not changed; however, within the past year there has been a change in the wind. In addition to separating their business and personal lives, many business owners are now experiencing the “credit crunch” that comes from trying to support their business with their personal credit. They are discovering that suddenly getting credit is not as easy as it used to be. Personal credit standards have changed dramatically. A recently published article on MSN’s Money Central makes use of some statistical data that does a great job of illustrating our current situation:

 

“We had an artificial economy,” said Brad Geisen, founder of Foreclosure.com, a Web site that lists foreclosure properties. “There was all this wealth created in real estate, and it wasn’t really created.”

 

In other words, the economy, which had been driven in large part by rising real estate prices, was artificially inflated. That means that when the bubble popped we were left with just air. The article goes on to support this further with the following:

 

“The Census Bureau today released 2006 housing data for every state, county, metro area and city with a population of at least 65,000. Income data were released last month. Together, the figures provide a snapshot of the nation’s economy just as housing prices were peaking in many areas. Since then, housing prices have decreased in many markets, fueled by a crisis in the subprime loan market and dwindling credit even for some wealthier borrowers.”

 

(Source: articles.moneycentral.msn.com/News/HousingCrunch.aspx)

 

What does all of this mean to you: You had better start thinking about an alternative.

 

Our clients are looking for the alternative as well. They have come to our staff with the following question: Can I still build business credit, despite everything that is going on with the economy? We have heard this from new clients as well as those who have been in our program for some time and I understand why: They are seeing foreclosures in their neighborhoods and are having their credit card limits suddenly slashed. It is only natural to wonder if the ability to build business credit will also be affected.

 

I have given the question a lot of thought. It was not something that I immediately was able to answer. I have had to place myself in the shoes of my clients, and by extension the public at large. It is certainly daunting; one could even say that it is scary. We are facing a credit crisis that we have never seen before. While thinking about all of this I suddenly realized that they have already taken themselves out of harm’s way. Therein lays the “secret formula”.

 

Unlike Colonel Sanders, I will put that secret formula down here in black and white: Build separate business credit. Right now this is the alternative. Very soon, I believe that this will be the standard.

 

The advantages of the business credit system are growing by the moment, again, especially in light of our present economic circumstances. The credit of corporate entities is evaluated using a system of rules completely different from the FICO system; things such as debt to income ratio and inquires have no effect whatsoever. That is why you can build separate credit for your business.

 

Business credit is the largest lending source in the world. Here is a system that allows you to use other people’s money interest free. For instance, let’s assume that you own a retail business that sells framed works of art. Wouldn’t it be great if your frame supplier shipped all of your framing materials to you, but gave you thirty days to pay your bill? That is the way business credit works. The system allows the business to purchase everything from vehicles to real estate to equipment. The thing to remember is that it must be done the right way. You will want be sure that you are following the proper steps at the proper time.

 

Those who have already pursued the goal of building separate business credit are going to be ahead of curve when the dust finally settles. Those who have not, I would strongly urge to take that step. Very quickly, business owners will not be able to grow their business and maintain their personal life using their personal credit. They have a relatively small window of opportunity to take advantage of what is going to be the new standard.

 

The solution, or secret formula, is there for the taking. Achievements never happen on their own. They happen because of the hard work that we put into achieving them. Get ahead of the curve and escape the “credit crunch” and in so doing, take advantage of the peace of mind that comes from true separation of your business and your personal life.

Hazen Martin
Senior Advisor
Corporate Credit Concepts
hazen@corporatecreditconcepts.com

<a target=”_new” href=”http://businessloansbadcredit.net//index.php”>http://businessloansbadcredit.net//index.php</a>

Hazen Martin