Ive been dump trucking for 4 years and know the business pretty good. I have contacts and work when I get my truck, the problem in financing.

My personal credit is shot due to reasons beyond my control :evil: . I can't wait for seven years to go by before my credit is clean again, I was hoping I can start a business line of credit for when I go to buy a truck, maybe it won't be as much of a hassle as with the personal credit.

Any tips on how should I go about aquiring business credit?

Name Picking first?
Tax ID # second?
Incorporate third?
Bank Account/Credit card fourth?

 

There are infomercials on late night TV that will supposedly teach you to get business credit but I have no idea if the techniques they teach actually work.

I sympathize with your desire to own your own business, I am right there with you, but are you sure you really are ready for this step? What happens if you blow a motor or transmission? What happens if you fall down in the shower and break your leg and cant work for two months?

If you can save up enough money to buy a truck for cash, or at least save up enough to give you a good cushion, say $10,000 you might make it work if you are lucky.

If you are determined to go forward, you might want to try to get a deal with an owner operator who will let you buy one of his trucks while you work for/with him. You aren't going to get bank or finance company financing.

Good luck to you.

 

sign up for creditboards.com forum and read the business credit forum thoroughly, its actually really easy to get business credit.

 

1.Pick a name
2.Get a good lawyer. She would be able to tell you what would work better for your incorporation. Here in MD an LLC is kinda better.
3.Get your Tax ID from the IRS. That can be done online now
4.Get a bank account
5.When you goto get your truck your company and it's tax ID number would be the Creditor. Being as it is a new company, it would need to be cosigned. So find someone to be a partner with you and cosign for you.

Be aware that if you intend to go this way you will need articles of incorporation and an operating agreement. You would have to set up your partner as a member of your corporation and they would bear a tax burden as a result. Now with a good CPA or EA it can be turned into a positive for the partner and you could always set up something to buy them out of the corporation after a few years once your business credit is good. And whatever you do, NEVER EVER MESS UP YOUR BUSINESS CREDIT. Think of it as your chance to start over.

Now it is possible and easy to do all of this yourself aside from sound legal advice on what kind of corporation to set up. I for one would never talk to friends to figure out what kind of corporation to set up. But everything else, operating agreement and articles of incorporation can be done with a little bit of research on the web.

 

Most lenders will require at least a 2 year business history to qualify for a business line of credit. They will probably also check you personal credit and will require you to sign as personal guarantor for the corporation. Banks want to see a work history. They will likely require financial statements and could require bank records. With a small corporation, your personal credit is often considered when looking at a line of credit. Initially, you may also need to pledge personal assets to secure the loan. You don't just set up a corporation, walk into a bank and automatically get a loan. They want to see a track record. It would probably be advisable for you to visit a local bank who works with commercial lines of credit and talk to a bank officer. That way you can find out first hand what will be required. Like your personal credit, it takes time to build a good credit history. I have a couple of lines of credit in my corporation, but have long history with my corporation. Fortunately, my personal credit is also in good shape. They checked and will check any time I want an increase in the credit line. There is no quick fix for you. I suggest you start building a personal relationship with your bank. I don't know what your personal credit looks like, but some of the banks will want to see at least a credit score of 650. The higher the better. Home ownership is also helpful in securing credit. If there is a bankruptcy, that can be especially difficult to overcome, but not impossible. You might find someone who would be willing to co-sign who has good credit. Some people are reluctant to commit themselves because their credit is also at risk. If you can come up with a large enough down payment and show some working capital, you might be able to overcome some of the negative credit.

 

If you cannot handle personal credit.... why would handling business credit be any different.....

 

I have a construction business and every supplier I have an account set up with (about 15) and my business line of credit required a personal guarantee. They all checked my personal credit too.

My last two trucks I've bought could've went through the business but it can be a hassle, they want alot of information about your business, so I just did a personal loan, much easier.

There's no getting away from bad credit.

I ruined my credit once (stupid kid) so I know it can be hell.

 

Heres the deal, I figured somebody would say something about not managing my personal credit properly without knowing the details.. I co-signed for a $350k house and I had to find out on my own that it was in foreclosure status.. Prior to this my credit was about 690-700. but thats another topic..


thanks for all the info so far, creditboards.com is great!

I'm not planning on buying a new truck(not unless God wants me to have one) in reality I need about $30k for a truck and the fee's n taxes..

I have about $8k in my 401k.. When I leave my present company that can be used for a rainy day!

 

Just ignore these folks. Like any online community there are always a few who feel the need to post every thought that comes into their head.
You can take some pretty heavy penalties on removing money from a 401k. But I am sure you know that.

In my humble opinion, 20K or more for a rainy day is a much better number when you are dealing with trucks.

I was not trying to say it was that easy, If I came across that way I apologize. I was oversimplifying it.

It is most certainly not as easy as a car loan, you really need to have a good relationship with your bank and they are more than happy to tell you what you need to do to qualify. I firmly believe anyone can get a loan, it's just that you may not be able to meet their demands (i.e. 99% down or the like)

 

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