Business Accountants: How to Establish Business Credit: A Comprehensive Guide

Starting and growing a business often requires financial resources beyond personal savings. Entrepreneurs faced with limited capital can turn to borrowing from lenders to fuel their business ambitions. However, securing loans and credit lines from banks or financial institutions demands a crucial element: establishing a robust business credit profile. This guide unveils the process and benefits of building business credit, providing valuable insights for founders seeking funding opportunities.

Understanding Business Credit:

Similar to personal credit, business credit relies on the financial records of your company rather than your individual history. By cultivating your business credit, you gain the ability to apply for loans and credit lines essential for various operational expenses, including office space rental, equipment acquisition, employee compensation, and inventory procurement. Business credit is assigned a score ranging from 1 to 100, indicating different levels of creditworthiness and risk.

Separating Personal and Business Credit Histories:

One of the primary advantages of establishing business credit is the separation it creates between your personal and business financials. This separation safeguards personal assets in case of business-related financial challenges, such as bankruptcy or loan defaults. By nurturing a distinct business credit history, you can also overcome poor personal credit and gain access to financing options based on your business’s financial strength.

Benefits of Good Business Credit:

Maintaining a strong business credit profile brings several benefits, including:

1. Lower Interest Rates: Good credit can help you secure loans and credit lines at lower interest rates, reducing the overall cost of borrowing.

2. Favorable Vendor Terms: Improved business credit can lead to better terms with vendors, allowing you to order products and services without prepayment.

3. Reduced Insurance Costs: A solid credit history may lead to lower insurance premiums, saving your business on operational costs.

Building Business Credit:

Building business credit is a gradual process that requires careful management and financial discipline. While the timeline can vary based on your financial choices, here are key steps to consider:

1. Register Your Business: 

Start by creating a separate legal entity for your business, choosing from options like LLC, C corporation, S corporation, or LLP. Register your business with your county clerk’s office or through their website.

2. Apply for a business number. 

This unique number helps track your business’s financial activities and is essential for applying for loans and credit cards.

3. Open a Business Bank Account: 

Maintain a dedicated business bank account to keep personal and business finances separate. This will be crucial when presenting financial records to lenders.

4. Secure Secured Loans and Credit Cards: 

Start building credit with secured business loans and credit cards, which often require collateral or a deposit. These options are ideal for businesses with limited credit history.

5. Establish Trade Lines: 

Develop relationships with vendors and suppliers who offer trade lines, allowing you to order products and pay within a specified time frame.

6. Maintain On-Time Payments: 

Consistently make on-time payments on loans, credit cards, and trade lines to enhance your business credit rating.

Establishing business credit is a strategic endeavor that can significantly impact your ability to access funding and support your business’s growth. By separating personal and business credit histories, maintaining strong credit discipline, and adhering to the steps outlined in this guide, entrepreneurs can build credibility with lenders and pave the way for sustainable financial success.


Your Outside Team



Need a bit of assistance with your business? Contact an Outside Accounting team member today and learn more about our fixed fees. You won’t regret it.

Aside from business consultation, we are business accountants Wellington who offer accountingbookkeeping, payroll services designed to help you achieve greater financial success.

You can click here to speak to a businessaccounting and bookkeeping firm. We will give you a call to know more about your needs. We will explain to you how we can improve your business. 




Wellington Accountants | 

Business Accountants | 

Construction Accountants 

Property Accountants 

Contractor Accountants 

Hospitality Accountants |

Property Developer Accountants | Accountants Wellington | Wellington Accountant | Restaurant Accountants | Cafe Accountants | Business Consultation | Business Adviser

AddressLevel 2, 182 Vivian Street,
Te Aro, Wellington 6011, New Zealand 

Mail: PO Box 24-457, Wellington 6142

Phone04 889 2975

New Zealand Accounting, Bookkeeping & Property Business Consultancy Services | Wellington & Lower Hutt Xero Property Accountants Business coach business consultation business adviser

Business Accountants: Understanding Changes in Residential Property Taxation

Recent years have seen significant adjustments to the tax landscape, particularly concerning residential property. The government has responded to calls from various quarters to address investor demand in this sector. Notably, recent changes have been initiated to reverse tax policies affecting residential property, aligning with promises made by both National and ACT during their election campaigns.

Read More »
New Zealand Accounting, Bookkeeping & Property Business Consultancy Services | Wellington & Lower Hutt Xero Property Accountants Business coach business consultation business adviser

Business Accountants: GST on Housing: Avoid Surprise Tax Bills

As we approach May 2024, it’s crucial to address potential GST pitfalls when selling property. Over the past decade, there have been instances where property sellers, unaware of GST implications, faced unexpected tax bills, especially those converting residential properties into holiday rentals or using them for business.

Read More »

business credit cards nz
how to get business credit
business credit cards
business expenses
business credit card