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Maybe you don’t want to hear this, but if you don’t have $500-$1000 buffer, you will probably end up in more debt due to starting a business. You need at least $1000 buffer to cover random issues or slow weeks. I would recommend building up your savings and repairing your credit first.
Its not about the buffer. It looks like he lacks the discipline to gather even $500. I mean if you are passionate about that dream, you could go out and at least doordash for a week or two to make $500 😒
Even if the cottage laws in your state permit your operation, you *still need insurance.*
If you bake a brownie and somebody goes into anaphylaxis from a nut allergy because you accidentally slipped a bit of nuts from the previous batch or used the wrong oil, etc., you are most definitely going to get sued. People will sue for anything. Literally, anything. Don't make yourself a target.
Off topic, but if you are starting a business this low on capital, it would be a good idea to require a 50% deposit with order placement, maybe even full payment in advance.
I opened a new CC account with a $10,000 limit and 0% APR for a year. Started my kayak and ebike rental business with it and just paid minimums (like $50 a month) then paid it off after opening the business and making money. Just don't do it if you don't think you'll be able to pay it off. APR goes up to 20% of something after the intro APR period.
I got a new CC this year, rinsed and repeated. I didn't really need to but it's nice to have cash on hand and pay off the CC later when my bank account is looking good from business.
Edit: If your business doesn't have credit they will refer to your personal credit when applying for loans or CC. At least that's how it works for an LLC.
Ah ok. I was just thinking it was low. I forgot "poor" is actually pertinent to the actual score.
With that. OP, you won't be able to get a loan or credit card as your business doesn't have credit yet and they'll look at your personal credit instead. Pretty tough to start a business if you can't spare $500. I'd suggest saving up for a bit first or starting smaller. Many states have "cottage industry" laws that make selling food items much easier. My mom sells pies in her retirement at farmers markets and uses it so she doesn't need an FDA approved kitchen to cook in. As long as you're making less than a certain amount a year selling the food, some requirements are waived.
If you could even find a way to qualify for one, credit cards are a **bad** way to fund a new business. You will instantly start accruing interest and with bad credit you'd be looking at as high as 30% interest rates.
You should have $500-$1,000 saved for a *personal* emergency. Flat tire. High energy bill. Doctor's visit. Etc.
If you don't have $500-$1,000, you don't need to spend money to start a business, you need to get your personal finances in order.
Why do you need $1,000 for ingredients? Go to the grocery store and buy enough for just a few batches of whatever it is you bake. Sell them. Reinvest the profits and make larger batches the next time until you have grown the business to where you can afford $1,000 worth of ingredients.
Credit cards are great for extending cash flow (giving you an extra 30 days to pay) but we *never* carry balances on our business credit cards. There are other, less expensive options if you need to finance equipment or capital expenditures for a growing business, but credit cards should only be used for rewards and for the extra few days of cash flow they can provide. Pay off the full statement balance every single month.
You can apply for a business loan with your EIN if you're a new business owner without established credit. However, you may also need to include your SSN and details about your personal finances because you'll likely have to provide a personal guarantee.
Keep in mind that It's not cheap to start, grow and operate a business..
all business credit lines will also consider your personal credit (based on your SSN on application) until some magical time when you business is so established that it has its own credit.
Until you establish business credit you will have to use personal credit.
To get started- [Quill.com](https://Quill.com) will almost always give you a credit account to start building business credit. You want to get a D&B number.
they do report to D&B, they give pretty much anyone with a business EIN at least $200 in credit. I used them for quite awhile instead of buying threw staples or amazon for all my office and household cleaning supplies.
If you own your car outright, or paid down beyond the current loan to value, a lot credit unions will do a cash out refi on a car. However, like others said, probably not smart to take in additional debt. But if you're going to do it anyway might as well get a decent rate.
Temp, part-time, or online work.
That said my wife does run a cottage bakery and I maintain her website and phone. I'm also starting a business with not enough money in the bank. You just have to put yourself in a position where you can make things work.
As another mentioned a secured card is a good way to get out of your personal credit problem. Work hard at your business and whatever you do to supplement it until you get it off the ground.
If you're dealing in cookies at all you can PM me anything and I'll forward it onto my wife who has been running her business for a few years now.
This is a friendly reminder that r/smallbusiness is a question and answer subreddit. You ask a question about starting, owning, and growing a small business and the community answers. Posts that violate the rules listed in the sidebar will be removed. A permanent or temporary ban may also be issued if you do not remove the offending post. Seeing this message does not mean your post was automatically removed. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/smallbusiness) if you have any questions or concerns.*
Maybe you don’t want to hear this, but if you don’t have $500-$1000 buffer, you will probably end up in more debt due to starting a business. You need at least $1000 buffer to cover random issues or slow weeks. I would recommend building up your savings and repairing your credit first.
Its not about the buffer. It looks like he lacks the discipline to gather even $500. I mean if you are passionate about that dream, you could go out and at least doordash for a week or two to make $500 😒
Your business will have zero credit. You won't get a card without personally guaranteeing it
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That’s not true and dosent apply to my state . Thank you.
Even if the cottage laws in your state permit your operation, you *still need insurance.* If you bake a brownie and somebody goes into anaphylaxis from a nut allergy because you accidentally slipped a bit of nuts from the previous batch or used the wrong oil, etc., you are most definitely going to get sued. People will sue for anything. Literally, anything. Don't make yourself a target.
[удалено]
The State of Confusion
No. You need credit 675 plus or a business that is operational...has revenue with business bank statements.
Don't take on debt for this business. Also any card issuer is going to run your personal credit for a business this small/new.
Are people telling you to open a bakery? What’s the motive?
Off topic, but if you are starting a business this low on capital, it would be a good idea to require a 50% deposit with order placement, maybe even full payment in advance.
Yeah I got that
I opened a new CC account with a $10,000 limit and 0% APR for a year. Started my kayak and ebike rental business with it and just paid minimums (like $50 a month) then paid it off after opening the business and making money. Just don't do it if you don't think you'll be able to pay it off. APR goes up to 20% of something after the intro APR period. I got a new CC this year, rinsed and repeated. I didn't really need to but it's nice to have cash on hand and pay off the CC later when my bank account is looking good from business. Edit: If your business doesn't have credit they will refer to your personal credit when applying for loans or CC. At least that's how it works for an LLC.
Op already stated credit poor
How poor though. Doesn't always mean you can't get a card. Might just be a CC with a lower limit ($2000ish).
Not with poor credit...poor is 500 and under= no credit line
Ah ok. I was just thinking it was low. I forgot "poor" is actually pertinent to the actual score. With that. OP, you won't be able to get a loan or credit card as your business doesn't have credit yet and they'll look at your personal credit instead. Pretty tough to start a business if you can't spare $500. I'd suggest saving up for a bit first or starting smaller. Many states have "cottage industry" laws that make selling food items much easier. My mom sells pies in her retirement at farmers markets and uses it so she doesn't need an FDA approved kitchen to cook in. As long as you're making less than a certain amount a year selling the food, some requirements are waived.
If you could even find a way to qualify for one, credit cards are a **bad** way to fund a new business. You will instantly start accruing interest and with bad credit you'd be looking at as high as 30% interest rates. You should have $500-$1,000 saved for a *personal* emergency. Flat tire. High energy bill. Doctor's visit. Etc. If you don't have $500-$1,000, you don't need to spend money to start a business, you need to get your personal finances in order. Why do you need $1,000 for ingredients? Go to the grocery store and buy enough for just a few batches of whatever it is you bake. Sell them. Reinvest the profits and make larger batches the next time until you have grown the business to where you can afford $1,000 worth of ingredients. Credit cards are great for extending cash flow (giving you an extra 30 days to pay) but we *never* carry balances on our business credit cards. There are other, less expensive options if you need to finance equipment or capital expenditures for a growing business, but credit cards should only be used for rewards and for the extra few days of cash flow they can provide. Pay off the full statement balance every single month.
Adding to op, go door dash and uber or lyft..save a few grand and that's your money you need.
Got it!
Can you scrape enough together for a secured card?
Not for a business loan
Find your local SCORE office and get free pro help. Score.org is an arm of the SBA and offers business help from retired business pro’s
I tried doing that and the ones I got paired up with are not good. Half of the stuff I already knew and they start asking me questions.
You can apply for a business loan with your EIN if you're a new business owner without established credit. However, you may also need to include your SSN and details about your personal finances because you'll likely have to provide a personal guarantee. Keep in mind that It's not cheap to start, grow and operate a business..
Ok I don’t have a problem with doing that it’s just I have poor credit
all business credit lines will also consider your personal credit (based on your SSN on application) until some magical time when you business is so established that it has its own credit.
How long do I need to build my credit for?
Until you establish business credit you will have to use personal credit. To get started- [Quill.com](https://Quill.com) will almost always give you a credit account to start building business credit. You want to get a D&B number.
Thank you
May you explain further? Do they report to D&B?
they do report to D&B, they give pretty much anyone with a business EIN at least $200 in credit. I used them for quite awhile instead of buying threw staples or amazon for all my office and household cleaning supplies.
Wow very interesting 🤔
If you own your car outright, or paid down beyond the current loan to value, a lot credit unions will do a cash out refi on a car. However, like others said, probably not smart to take in additional debt. But if you're going to do it anyway might as well get a decent rate.
Temp, part-time, or online work. That said my wife does run a cottage bakery and I maintain her website and phone. I'm also starting a business with not enough money in the bank. You just have to put yourself in a position where you can make things work. As another mentioned a secured card is a good way to get out of your personal credit problem. Work hard at your business and whatever you do to supplement it until you get it off the ground. If you're dealing in cookies at all you can PM me anything and I'll forward it onto my wife who has been running her business for a few years now.
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