Establish a solid credit history for your business to improve your financing options.
It takes money to run a business. But financing isn’t always easy to get: In 2021, only 31% of Asian and Hispanic business owners and 19% of Black business owners had sufficient funding to run their business, compared to 50% of white business owners.1 But Black-owned firms were only half as likely as white-owned firms to get full approval for loans, lines of credit, and cash advances.2 Building a solid business credit history can improve the odds of receiving financing. Here are five key elements to address as you build your business credit:1A formal business entity
It’s important to establish a separate business entity that can establish its own credit history
- Incorporate your business by registering it to establish a separate legal entity such as an LLC, S-corporation, or LLP
- It’s usually a good idea to apply for an employer identification number (EIN) from the IRS to establish additional separation between your business and personal finances, even if one isn’t required.
- You should consult a tax or legal professional to help ensure you choose the right form of incorporation for your business.

2A business banking relationship


Loans are by far the most common form of financing, sought by 76% of businesses.3
Like establishing a corporation, opening a business bank account helps establish a business as an independent entity.
- While business lenders may not specifically require you to have a business bank account, it could ease the process of applying for — and paying down — a loan or line of credit.
- Having an existing financial relationship with a bank could make the process more efficient.
3Trade credit
Opening trade lines with your vendors can help build your business credit. Here are three important steps you can take.
- Talk to your vendors about opening a line of credit.
- Check with vendors to be sure they report their credit arrangements to the major credit bureaus.
- Submitting trade references to Dun & Bradstreet, which tracks business credit, can also help ensure your trade relationships are captured properly so they can help build your business credit.

4On-time payments
Just as with personal credit, an established history of on-time payments creates a track record for your business that can make lenders more willing to extend business credit.

of all business-to-business payments are made late.4
- Notifications of late or missed payments can harm your business credit score.
- Make all of your business payments on time or early, if possible.
- If you know you’ll need more time to make a payment, speak with the affected vendor or lender right away to work out a payment plan.
5Monitoring your business credit score
To ensure your efforts to improve your business credit are working, it’s important to monitor your score regularly.
20% of small business loans are denied due to poor business credit.5
By building and maintaining solid business credit, you raise the chances your business will get the funding it needs to grow and thrive.
Track your score across the major business credit bureaus:
- Dun & Bradstreet
- Experian
- Equifax
Correct any errors immediately by contacting the credit bureau and filing a formal dispute.

1. Fed Small Business, 2021 Report on Firms Owned by People of Color
2. Fed Small Business, 2021 Report on Firms Owned by People of Color
3. Fed Small Business, Small Business Credit Survey: 2022 Report on Employer Firms
4. Pyments.com, New Data: 15% of Receivables Are Late
5. US SBA, 10 Stats That Explain Why Business Credit is important for Small Business