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Op-Ed May 5, 2023

Establishing Credit for Your Small Business

By Keisha Bross

A Black woman in business attire smiles

National Small Business Week has come to an end but your small business journey is just beginning.

In an ever-changing economic landscape, small businesses must stay vigilant and adaptable, finding innovative ways to manage their credit and capital effectively. Many small businesses rely on business credit to help finance the purchase of new machinery, acquire inventory, and expand their operations. 

If you don't need funding or aren't using credit right now, it is a good idea to establish your business credit in preparation for a day when you may need to apply for external lending.  

Here are some easy steps to establish business credit. 

  1. Establish Your Business as a Separate Entity. Separating owner and enterprise is often the best approach when establishing your business credit. There are different types of corporate structures so they may need a link to understand LLC, versus S-Corp, versus partnership so they are keyed to find out the ramifications of each business structure.  And they will need advice that a lawyer can give so they don't mess up trying to do a DIY.  Most states have a page that links to small business formation, typically within the Secretary of State's office, and states may also have resources for minority small businesses. 
  2. Register for a Dun & Bradstreet D-U-N-S® Number. The D-U-N-S Number is a unique identifier for your business, and it's available for free from Dun & Bradstreet. 
  3. Get an Employer Identification Number From the IRS. An Employer Identification Number (EIN) is required to file your company's taxes. 
  4. Open a Bank Account for Your Business. A business account can also help you build a track record with the bank. 

For the Black community, decades of systemic racism and discrimination placed them at a particular disadvantage regarding financial opportunities. That's why our society must prioritize financial education. Taking control of our credit is one step to building economic health that's in our control. It's never too late to start - or restart. The NAACP has two partnerships that can help you understand and establish credit. Our relationships with TransUnion and Hello Alice help grow and sustain Black small businesses. 

Financial Education and Wellness: NAACP & TransUnion

TransUnion

Black-Owned Business Resource Center: NAACP & Hello Allice

Hello Alice

Your credit journey is essential to the future of your business. You can start looking at options and resources for your next steps on business credit.