A lot of aspiring boutique owners try and want to know how to start an online boutique with no money. And end up running into one of the biggest challenges with any new business: having to pay for stuff!
Start up costs are a real thing.
From your business entity and inventory to your website and marketing to get the word out, you can’t start or run a business (successfully) without money.
So what if you could get your business off the ground even faster and easier? That’s exactly what business credit it for!
Using business credit to start a business or in this case to starting an online boutique is one of the most overlooked tools when starting a new business. It can be a great way to get the money you need to finance your dream without having to put up your own personal assets as collateral.
And you can use it to grow your boutique whether that’s investing in more inventory, doing a pop-up shop, spending more on marketing or hiring help.
In this blog post, we’ll share one of the best kept secrets in business and how you can use it to help launch and grow your online boutique. So read on to learn more!
What Is Business Credit?
Business credit is simply credit that’s extended to a business, rather than an individual. This means that businesses can apply for and receive loans, lines of credit, and even credit cards without putting their personal assets at risk.
For many aspiring boutique owners, this can be a game changer!
You won’t have to get a second job or dip into your personal savings.
Or put your home or car up as collateral in order to secure financing.
And without the burden of high interest rates and monthly payments, you can reinvest that money back into your business to help it grow even faster.
It’s important to note that using business credit to start a business is not the same as personal credit. While your personal credit score may be a factor in getting approved for business financing, it’s not the only thing lenders consider.
When you apply for business credit, lenders will also consider the financial history of your business. This can include revenue, cash flow, or outstanding business debts. This is why it’s possible to get approved for business financing even if you have bad personal credit.
How to Access Business Credit For Your Online Boutique
The first step in getting business credit is to establish your business as a legal entity. This can be done by forming an LLC, corporation, or partnership.
>> CLICK HERE TO GET YOUR LLC
Once your business entity is established, you’ll need to get a business credit report. This report will list all existing loans, lines of credit, and other financing options that your business has received.
You can get a business credit report from any of the three main business credit reporting agencies
- Dun & Bradstreet
- Experian Business
- Equifax Small Business.
As you establish more of a credit history, it’s helpful to get a business credit report from all three of these reporting agencies so that you can see what lenders are seeing when they pull your report. That gives you some insight into what is considered in order to qualify for even more funding.
Building Your Business Credit Profile
If you want to start using business credit to start a business or for your online boutique, the next step is to start building your business credit. There are many ways to do that.
You can do this by applying for various loans, entry lines of credit, and low interest business credit cards from lenders that report to the business credit agencies.
You will also build your business credit by paying your invoices on time, maintaining a good credit utilization ratio, and keeping your business free of major debt.
If you don’t have any regular expenses for your business as of yet, you can apply to relevant supply vendors. Think of products that you’ll use for your business on a regular basis. This can include packing tape, boxes, printer paper and similar items.
The most important thing to remember is that building business credit takes time. So be patient and focus on maintaining a good credit history with your lenders.
Using business credit to start a business is a powerful tool to launch and grow your online boutique. By establishing your business as a legal entity and building a strong credit history over the next few months and years, you can get the financing you need to take your business to the next level.
Want a step-by-step walk through to get funding to launch and grow your online boutique? Click here to learn more about Business Credit 101.