Real Estate Business & Credit Planner
Congratulations on your decision to start a real estate business! With the right strategy and hard work, you can turn your passion for real estate into a thriving enterprise. But before you start buying and selling properties, you need to form your business and build your business credit. And the good news is, you don’t need a personal guarantee to do so!
Here’s yes or no questionnaire on how to form a real estate business and build your business credit without a personal guarantee: AKA Not tied to your personal credit score.
Do you have a EIN?
Step 1: Choose a Business Structure Select a business structure that suits your needs. The most common options for a real estate business are a sole proprietorship, partnership, LLC, or corporation. Each structure has its advantages and disadvantages, so it’s important to do your research and consult with a business lawyer before making a decision.
Step 2: Register Your Business Once you’ve chosen your business structure, register your business with the appropriate government agencies. This will include obtaining a business license and registering for taxes.
Step 3: Get an Employer Identification Number (EIN) An EIN is a tax identification number for your business. You can obtain an EIN for free from the IRS. Having an EIN is essential for opening business bank accounts, obtaining business loans, and building your business credit.
Step 4: Open a Business Bank Account Having a separate business bank account is a critical step in building your business credit. It will help keep your personal and business finances separate and make it easier for you to track your expenses and income.
Step 5: Get a Net 30 Accounts & Secured Business Credit Card. A Net 30 Account is a great way to start building your business credit. With a secured card, you provide a security deposit that acts as collateral in case you default on your payments. The Net 30 businesses & card issuer will report your payment history to credit bureaus, which will help build your business credit score.
Step 6: Manage Your Credit Wisely To build your business credit, it’s important to manage your credit wisely. This includes making timely payments, keeping your credit utilization low, and avoiding late payments.
Here are some statistics to show the importance of building business credit:
- According to Experian, businesses with good credit scores are more likely to be approved for loans and receive more favorable loan terms.
- In a survey by the National Small Business Association, 75% of small business owners agreed that having a good business credit score is essential to their success.
- The average credit score for a small business with a secured credit card is 700, while the average score for a business without one is 550.
By following these steps, you can form a successful real estate business and build your business credit without a personal guarantee. But don’t stop there! Continue to monitor your credit and look for other opportunities to build your business credit, such as obtaining business loans or leasing equipment.
Forming a real estate business and building business credit is a critical step in your entrepreneurial journey. With the right strategy and a little bit of hard work, you can achieve success and become an award-winning real estate business owner!
Do you have a EIN?