How to Build Business Credit-with Stephen Wible-EP48

During this episode of the Lab Coat Agents Podcast, host Jeff Pfitzer speaks with Stephen Wible, a Marine Corps veteran with extensive experience in real estate who is now the Director of Business Development for Credit Suite. Stephen is an expert on the subject of business credit. This episode will teach you how you can build business credit that is not tied to your social security number.  Episode Highlights:  Stephen Wible is originally from Philadelphia. He was in the Marine Corps, then started a printing company which he later sold. He then became a real estate investor and a realtor, then found his position at Credit Suite. Business credit is credit that's tied to your business and not to you personally. With business credit, your business can generate credit in the business name that you do not personally guarantee or sign for. If you're a real estate agent and don't have an LLC or an S corp, you should get one. When naming your LLC, you never want to pigeonhole yourself. Lenders and creditors have what is known as high-risk industries and real estate is one of them. If you put real estate in the title of your company, you will be pigeon-holed as high-risk right away. Make your LLC name as vanilla as possible. If you're getting paid personally from your broker, deposit everything in the LLC. You have to have a mind shift. It's the company's money and you need to then pay yourself.  Decide whether you want to have credit for that company. If you want credit for that company, there are some steps you need to take. The business credit world is looking for fraud. They start with your email address. They are looking to see if you have an email address set up for your business. The second thing they will catch is virtual phone numbers. Your number needs to be listed with the national 411 database. If you're not listed with the national 411 database you're not considered a legitimate business by lenders and you are denied. The third thing is the address. A lot of real estate investors like to use P.O. boxes. That is a big red flag when borrowing money. Go with either your home, a virtual office, or a commercial building. A commercial building would be the best, virtual is next, your home is ok. Everything else fails. If you can pass those tests you'll get approved quickly. You'll be approved for $1k initially and you could build up to $50k-$100k within six months. Why not get that car in the company name? Typically you will even get better terms. Your limits will be higher. When you're audited, you can hand the IRS all your business credit statements and show them all of your expenses. Talk to your accountant about how you can make business credit work for your particular situation. Most business credit lenders are only going to look at your business, not your personal finances. They will be looking at the credibility issues. Have a business bank account. Do not run it through your personal account. You are a business the day you open your business bank account. Your bank actually gives you a credit score based on that bank account. You'll go to Net 30 lenders first. With Net 30, you get approved for credit with someone and then they give you Net 30 terms. You have thirty days to pay after receiving an invoice. Once you begin paying, they'll begin reporting that to business credit reporting agencies. Once you have three tradelines, Duns & Bradstreet will generate a paydex which is like your FICO score. In the business credit world, if you have nothing reporting, Experian reports that you are borderline bankrupt. Having tradelines changes how other businesses and vendors see you. The first thing liability insurance companies due is to pull your business credit report. All the things that you need to run your business day to day, you can buy utilizing business credit and never touch your personal credit. 35% of your score is utilization. Steve shares how someone took his utilization on his personal cards, transferred them to the business cards that he knows do not report on his personal credit, and now his utilization went down to nothing. He now has six-figure credit available personally and another six-figure credit available business-wise. Business credit is fast-moving and changes constantly, thus Steve’s book is outdated. Updated information is available for free at www.creditsuite.com  This strategy is scalable. You can open five LLCs and build a credit profile for all five of them. This is not a replacement for bad personal credit. This is one of those vehicles that will give you more opportunities to invest in more real estate. Steven used business credit to get into flipping properties. If you don't have the cash and you always wanted to get into flipping properties, if you have a strong business credit profile and you have high-limit credit with the type of companies you need it with, you could rehab a property without putting any money out of your pocket. He would get estimates from vendors and then negotiate so he could make a profit on construction. Business credit is reported based on your address, not your social security number. Sam's Club will give you a traveling MasterCard with a $25k limit in the business name not tied to you personally. This is valuable information that you have the opportunity to get for free. 3 Key Points: With business credit, you can generate credit in the name of the business that you do not personally guarantee or sign for.  Once you open a business bank account, you’ll want to establish tradelines that will legitimize your business in the eyes of other vendors.  Business credit can be leveraged to pursue opportunities in real estate.  Resources Mentioned: LCA Marketing Center: LCAmarketingcenter.com Lab Coat Agents: LabCoatAgents.comBusiness Credit (book) Credit Suite website, YouTube, Twitter, Facebook, LinkedIn, Instagram, podcast Contact Steve at info@creditsuite.com or stephen@creditsuite.com Grasshopper Ring Central Quill Connect with Lab Coat Agents: Lab Coat Agents on Facebook Lab Coat Agents on Twitter Lab Coat Agents on Instagram Lab Coat Agents Facebook Group