I had the wonderful opportunity to help a business owner last week, and the story is worth talking about. It’s been in business for three years and it’s grown fast…maybe too fast. He had leased four vehicles from a major automaker and was financing them in his personal name. However, payments were made through the company. When the transaction began, his business had not structured a credit profile through any of the business reporting agencies like D&B or Experian. Meanwhile, his personal credit score had dropped below 600 and he was having trouble paying his son’s college expenses.

My initial recommendation was that he make an appointment for us with the manager of the branch where he did his banking. He had become a good depositor at his bank and they were willing to help.

The bank agreed that if we could develop a favorable business credit score (Paydex with D&B or Intellescore with Experian), they would buy out the leases and refinance the trucks on behalf of the company. Truck payments would now be reported to the business credit bureau (in this case, Experian). The process will take a couple of months, but all future payments to business creditors will easily earn you a very favorable credit rating at D&B and Experian.

Now don’t get excited… the business owner will still be responsible for payments through a “letter of guarantee”. However, your personal credit will now show $88,000 less and your personal credit score (FICO score) will increase significantly. More importantly, as long as your business continues to make purchases and payments on time, your business credit profile will grow to a higher score.

Of course, there are many more considerations in developing business credit, but this business can now grow freely and will not be limited by the owner’s personal credit. By the way, the owner of this business now has room on his personal loan for nearly $100,000 to use for his son’s college education, which is why he approached me at first.

If your business growth is blocked by personal credit limits and your business can pay debt service, you have many more options available than you think.