Its been your heart’s desire to own your own business; be your own boss. Year after year the wish and your passion for it sits squarely at the top of you list of resolutions but remains an unrealized, seemingly unreachable dream. You’ve unconsciously.. constructed roadblocks to the reality – its too difficult; I have no money; I don’t know where to start and most importantly I have really bad credit. Well, that was then, this is now. The current state of the world have spawned many options to the traditional way of starting and funding a business.

And, you are not alone. VantageScore says there are about 220 million scorable Americans and 68 million of them have bad or poor scores, i.e. lower than 601. Figures from credit bureau TransUnion also say that 30% have subprime credit, based on the VantageScore 3.0 model. According to a study conducted by Credit Bureau Experian, about 16% of consumers have bad credit, and more than a third of the population has what lenders call a subprime score, which includes the fair and poor categories.

In addition, most people are unaware that the rules governing business product is arguable the exact opposite of those that govern personal credit. Personal credit is determined by how much credit you are using, whereas business creditors look at how you manage your credit; they are not so concerned that you use all of your available credit as long as you have a good repayment history. Therefore, ALL you have to do is take the leap, start the process and forget about failure. Focus on the amazing feeling you will have when you get it done. So what if you fail; you will know that you tried and you can try again.

Let’s begin. In order to build your business profile and make you attractive to the lending community, your business must be legitimate. Having a business name and some business cards, does not a business make. You must:

  • Have a plan of action and a business plan.
  • Register the business with your State Department of Corporations,
  • Get an EIN number from the IRS – its quick and easy,
  • Register with Dun & Bradstreet; they are the keepers of business credit,
  • Open a business checking account. Mid sized banks such as PNC and Regions are more small-business friendly and supportive of new businesses.

Your next order of business to building your credit profile is to utilize non traditional strategies:

  • Open vendor credit lines. This is where you use companies such as U-Line to order your business supplies. They will also offer you credit on a net basis. For example, net30 means you have 30 days to settle your account.
  • Consider store credit under the business name. Costco and Walmart are great options. Make a note of your purchases for tax purposes.
  • Secured Business Credit Cards from your bank. You will start to build a business credit history for a manageable financial investment. Start with as little as $500.00.

Now that you are up and running, you can strengthen your position by using fintech institutions to handle your e-commerce, collection and funding sources. Using companies such PayPal, Kabbage and Square to control the flow of money in and out of your business demonstrates your viability and eventually qualifies you for their business loans.

Funding is also available from Community-based organizations. What great about these organizations is that they offer other support for start-up businesses, such as writing your business and marketing plans and mentorship. In Florida where I reside, there is:

  • Tools for Change (TFC), is a non-profit Community Development Financial Institution (CDFI) that provides microloanssmall business loans, training, technical assistance, and development services to under-served entrepreneurs.
  • Partners for Self Employment mission is to promote financial well-being of low to moderate income individuals and families in South Florida via financial literacy training and providing opportunities to borrow and save. We strive to be a cost effective provider of financial and training services to our constituents and as a prudent and responsible steward of the funds entrusted to us.

Nationally, there is Accion, a nonprofit community lender dedicated to helping entrepreneurs generate income, build assets, create jobs and achieve financial success through business ownership. Their network serves small businesses in communities across the U.S. and is made up of three certified Community Development Financial Institutions.

Business ownership can be daunting but shouldn’t be. There is a plethora of opportunities for those who want to start on this path. E-commerce is booming. My advise: do your research to determine if your product/service/idea is viable and can be monetized. If you have a business idea consult with an attorney to ensure you protect it. You now have some direction, now just go do it.

If you want to get more details and other business resources, please subscribe to my blog or leave your email and I will respond to you.

Inspiring Infinite Possibilities.

Salomie Chung