In this presentation, John Baird with J. Galt talks about how to build your business credit.
Here is the transcript from the presentation:
Ryan: All right, so now it is time to move on to the speaker part of our meeting today.
Ryan: So, everyone, the importance of being able to build credit in for your business and not just tied on to your personal credit is extremely important.
Ryan: And without saying too much because I want John to be able to share all of his expertise that he, he could fit into the time that we have here in this meeting. I’d like for everyone to give John Baird a hand, who is going to teach us how and why every business needs to be building their own credit. So let’s give John a hand.
John: Thank you for that.
John: I’m going to share a screen. Can everyone see it?
John: Alright, so big thing is, is, what is business credit? Because I can tell you I’m a recovering attorney and they don’t teach this in law school. They don’t teach it to most of the accounts I’ve ever come across, and it’s when business owners hear about it, they really don’t believe it’s a possibility. So, we’re going to discuss what the, what business credit is and why it’s needed.
John: Alright, so if you look at these, these little questions here, I mean, personally guaranteed a loan, used your personal credit card. Do you want to protect your family assets? Have money when you need it for taking advantage of different opportunities? Weather, rough storm, like COVID, for example, things like that. If you’re a business owner that can check one or more of those boxes, then it warrants having a conversation with me or one of our other representatives.
John: So, imagine a world where you knew, and you knew that, you knew that your business would never be turned down for credit, assets would never be placed at risk. You’d always, always have access to money when you needed it, to survive storms, to meet the needs of your operation, receives opportunities and scale. Well, J. Galts here with to help you realize that possibility.
John: So, business credit facts. More than half of businesses will fail within five years or less. 82% of business failures are due to cash flow issues. And more than 90% of business owners agree the availability of loans is a major problem.
John: So, what businesses can build business credit? Just about every business can build business credit from startups to established businesses, nonprofits, churches, foreign-owned US-based businesses, individuals owning multiple business- they can all build business credit. They just don’t know how.
John: So, what is it?
John: It’s credit extended to businesses based on the credit worthiness of the business, not the business owner. You have a 300 personal credit, the absolute worst, you have stellar business credit, and it doesn’t matter one way or the other cause the credit on the business is tied to your tax ID number, not your Social Security number. And credit accounts reported to business credit reports are not on your personal credit report.
John: So, your business does have a credit report and credit score, and you probably never realize that.
John: Business credit accounts include everything that reports to the business credit bureaus, that accounts retail credit cards, lines of credits, gas cards, fleet cards, et cetera.
John: Whoops, sorry about that.
John: So, why does the business need business credit?
John: So, you don’t have to use personal guarantees and put your personal credit at risk. Take, you know, make obviously make sure your financial well-being and that of your family is not at risk.
John: When you have business credit and your credit on the business is usually 3 to 10 times that what you could possibly get on your personal credit, even more we see up to 100 times more business credit available than you’d ever get using your personal credit. And realistically, it actually lowers insurance premiums and gives you access to 10s of to hundreds of thousands of dollars in credit when you need it.
John: So, personal credit scores have no business, have no impact on business funding approvals. You can use business credit for most of the tangible goods of your business. You can achieve financial freedom separating yourself and your family from the financial aspects of the business.
John: So, personal credit versus business credit, scores built, built automagically, you know, start, you know, obviously we all got a, you know, offer for a credit card for 500 bucks. And as we used it and charged, you know, charge things and paid it off, our credit scores went up.
John: We didn’t really do anything intentionally to build the credit. It just happened, right?
John: But the business credit score is built intentionally. You have to actually identify the vendors that report when timely payments are made and your score is 1 to 100 on the business, at two of the three credit bureaus. So, it’s not the same with business credit.
John: Personal credit, like I said, builds on its own personal credit accounts. Accounts report your payment history proves your creditworthiness, balance, balance available to you increases, right? So it’s built passively. You’ve not done really anything other than use the credit.
John: But, you must, like I said, must intentionally establish and build a business credit profile.
John: So, we have a program.
John: It’s one stop shop, helping you build credit the right way. Everything you need to build the profile.
John: And as a seven step process, each step builds off the other and it must be completed in the right order.
John: So, the seven steps.
John: Determining the base credit fundability of your business. Current ability to obtain funding is what your fundability is, there are 125 factors that can affect the fundability of business, but not every business is impacted by all 125 factors, for example, an HVAC company is going to be different factors ,can have different factors than the chiropractor might.
John: So, each business has its own typical individual blueprint. So, this is kind of like the fundability circle. Just gives you an idea of the 125 factors that go into building business credit. Foundation, the number of factors include business name, address, entity, EIN, Phone number, and 411 listing, business website, business e-mail address. Gmail, Hotmail, Yahoo, AOL, those are all considered personal addresses, so that when vendors start looking for business website and business emails, if you don’t have like John@abccorp.com then they will see that they’ll think it’s a personal, personal, not really a business. Probably limit the credit they’ll make available or maybe deny credit altogether.
John: Business license, where needed, like if I’m a lawyer, I need a law license. Doctors need a medical license. Beauticians need additional licenses, et cetera. So, if you need a license to operate your business, you need to make sure you have it.
John: Business accounts, if you take credit cards, merchant accounts.
John: So, once we get the credibility established, then we need to make sure that the IRS, the Secretary of State, and the three credit bureaus, Dun and Bradstreet, Experian, and Equifax, have the identical business names and addresses as well.
John: We see typically happening, as a business will file their paperwork with the Secretary of State using their residence address and then they’ll have a different address down the road. And if those aren’t In Sync with the current address, current business name, then credit will be denied. So, we need to make sure that when we check all, all 5 entities and everything’s in, in, in sync, or we need to amend it and update the profiles.
John: We help you through the process and any member that signs up with us, then we, we assign a credit coach or credit analyst to guide them through the process.
John: So, typically, you, you, we agree, we will we completely affirm that you as a business owner can build business credit yourself, but you have to identify the vendors that extend credit without doing a credit check and you have to identify the ones that will be report when payments are timely made, because although all vendors will report when you miss a payment, less than 7% of sources in the marketplace report when you make a timely payment.
John: So, even if you do have a business credit score, you’ve locked into using a vendor or two that might have reported it, but if you’re not continually doing that, then you’re not going to build the credit that you need.
John: So, the accounts on our platform, and we have out of the seven steps, four steps are, are dedicated to building business credit, because most vendors do not report the information of timely payments, the vendors on our account on our platform are guaranteed to report when you’ve made a transaction and paid it off on time. And that’s how business credit is built. It’s purely transactional.
John: You, you charge, you know, you order some supplies, equipment, what have you, you know, you get the invoice, you pay it off before the due date. They report it. Credit, credit bills, and increases.
John: On your own, it’s really just trial and error.
John: Exclusive access to vendors we know will extend credit without a credit check and report your payments to the credit agencies. These are net accounts, 30, 60, 90 days. You’re probably familiar with those types of vendors. Uline, for example, is one of those vendors.
John: So, these are the essential first step in the process of building true in, in, in very, very high business credit score.
John: Step four, we want you to monitor the credit reports. We can actually provide access to a service that brings all three reports together. So, you for example, if I’m your credit coach, then you and I can check your credit scores on a continuous basis to actually see where we need to focus our attention.
John: If you have a great score at Dun and Bradstreet, but a, you know, less than stellar score at Experian, then we need to focus on vendors that report to Experian, to help build that score up to 80 plus.
John: So, we’ll tell you what accounts and how many are reporting. And this is what lenders will see about your business, because unlike personal credit, anyone can check what your business credit scores are.
John: I can take all your business names and I can do a search on the, on the Dun and Bradstreet, Experian, and find out what your credit score is, because it’s public knowledge.
John: So, is it Step 2, Tier 2 accounts out of the four? These are both net and revolving retail credit card, credit accounts, for the cards are you could be fleet cards, could be store cards, could be bank, bank cards, et cetera.
John: Again, these are accounts that are going to report to the business credit bureaus, for example, could be Home Depot, could be Costco, could be, let’s say, Speedway, Sam’s Club, et cetera. They’re all part of, many of them are part of our program at the higher, higher levels, Tier 3, Tier 4.
John: So strong, you know, as the credit scores go up, the, the more vendors that are open to you as a business to actually continue building your credit score.
John: And the reason why you want to build credit on your, on your tax, your EIN, your business EIN, rather than your personal Social Security number, your personal credit for use in the business is because you really want to put that brick wall and financially separate yourself and your family from your business.
John: Big, big box retailers like, let’s say, Walmart, they have, they make tons of profit and they don’t use their own money to pay off their vendors. They have, they have vendors and they utilize other sources to pay it and they’re continuing running that, and, and so, they understand the process and the whole point of, of building credit on your tax ID is to make your business like a, a small Walmart, small Meijer, small Target, right?
John: And because we’re guiding you through the process, we can get you there in a very, very quick manner. The process on average takes about 12 months and depending on what your goals are for your business, could take up to 18 months, maybe longer, depending on the funding that you’re looking for.
John: And I’ve had bankers suggest that they don’t want to refer businesses to us that need to build their business credit because the businesses might not come back to them when they need funding in, in, well, that may or may not be the case, but, quite often, when you get your business credit built up to the point where you can get large sums of money from unsecured sources, which would not be the bank and not be the SBA, it may not be the total amount that you need.
John: So, you might need to strategically go back to the banker and, and actually apply for less money than you normally would, if you hadn’t built your business credit, and that provides less for us to the bank and greater likelihood that they would approve the loan.
John: So, now, using your personal credit scores and your personal guarantees is a strategic decision rather than a necessary one.
John: So, you know, as you can move up through the step seven of the seven step process, you get higher limit count, higher count limits, more flexibility. You’re handling your credit responsibly on your business and basically your business is running itself on its business credit score.
John: So, you can get approved for business credit regardless of your personal credit score, no personal guarantees required, no consumer credit inquiries. Credit limits 10 times or more the consumer credit. You can get credit quickly. It’s based solely on payment history.
John: Separates personal business credit reports, establishes credibility with lenders, suppliers and credit issuers, and anyone can see your business credit reports.
John: So, we have everything you need, and, to build a perfect business profile, credit profile in one place. We have over 100 reporting vendors. And when you get up to step 6 or 7, we have 3 to 400 different funding sources that aren’t requiring personal guarantees or personal credit.
John: Hundreds of non-reporting vendors, huge selections of business credit cards made available and access to a variety of alternative funding options.
John: The interesting thing is, is that the business, you know, you might have a business credit card, but the reality is over 95% of those business credit cards are tied to your Social Security number. So, you’re personally guaranteeing the use of your personal credit for business expenses, and if this is a factor that hasn’t been shared yet, but if a business closes, on average, the business owner owes $93,000 on, tied, on our personal credit tied to their business expenses.
John: So, that’s, that, that the financial issues that we’re helping solve. You know, we’re helping, we’re seeing marriages, you stay together. We’re seeing, you know, houses, and, and assets stay in the ownership, we’re seeing less, fewer suicides. We’re seeing less, you know, a reduction in addictions, because of the ability to build credit on your business.
John: So, options on unconventional options, revenue, lending, purchase order financing, securities financing, equipment financing, et cetera, et cetera, these are all available to you as you build your business credit.
John: We offer other benefits, business credit monitoring. I mentioned financing services, cash flow mapping. It’s not budgeting, it’s actually taking your revenue and your liabilities and projecting when you can spend money for, for your business.
John: For example, if an HVAC company needs 3 videos and they want to buy all three in April, but the, the projections say hey, you can buy one in April, and two in August. Well, that way you won’t put yourself in a precarious financial position by spending the money on all three at once.
John: So, business valuation as well, let’s say you want to know what your business is valued at every year and especially the five to 10 years prior to retirement. When you’re thinking business is worth 5,000,000 and it might be worth 2.8, that could change your retirement plans or help you, drive you to figuring how to generate 2.2 more million more in revenue, so, professional guidance every step of the way, the fundable foundation, credibility that you need, which accounts to apply for, when to apply. Building your score as effectively and efficiently as possible.
John: So, now with the J. Galt, our members that we have in our process, they know that they will never be turned down for credit and they’ll never be placed at risk. And they’ll always have access to the capital in need to survive downturns, meet the needs of operation, seize opportunities, and ability to scale.
John: So, programs for you, if you want to expand your business, well, the easiest and fastest way to access business credit have a true business credit profile and have the blueprint to reduce and eliminate the need to use personal credit or provide personal guarantees for funding.
John: And here’s the cost. And that seems like quite a bit, but when you looked at, you could have 10 to a hundreds of, 100 times the business credit available to you that you would ever have available to you on personal credit. It’s a one time fee. Payable in different ways.
John: And only starting in year two, an annual fee of $250.
John: So that ends my presentation. And you, my, my, my, you have my contact information in the, the share.
