Corporate credit works just like personal credit. If you have personal credit, you can borrow money from an institution or buy goods or services, and you agree to pay for it at a later date. Similarly, corporate credit is a contract or agreement between a corporation and a lender or credit institution. The corporation acquires items of value (e.g. goods, services, loans, raw materials) and pays for them later. This article will explain the steps that you can take to obtain corporate credit.
In personal credit, the individual person enters into an agreement with a credit institution. In corporate credit, the business entity enters into an agreement with a credit institution or vendor. Regardless of size, any business today will need at least some kind of corporate credit for the
business to operate. One common form of corporate credit is the agreement for later payment of received goods. Another is the ability to pay balances over a longer period. If you own your business, you will want to have corporate credit so that you can avail of these privileges. Another important reason for you to want to have corporate credit is the protection that it gives to your personal credit line. Corporate credit shields your personal credit line from liability, as well as enables you to get leases and loans needed by your business to operate.
- The first thing that you need to do to get corporate credit is to incorporate. That is, form a corporation. You might want to create an LLC (limited liability corporation).