For a lot of people who want to take their product to retail, they need to create and develop a company for retailers to partner with. However, one of the things they’re probably not building is business credit. On today’s podcast, Timothy Bush is joined by Stephen Wible, a Marine Corps veteran with a deep background in real estate sales, flipping property management, print manufacturing, and building and obtaining business credit. What is business credit and how can you make your company be eligible for it? That’s what you’re going to find out in this episode!
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Listen to the podcast here
The Definitive Guide To Building Your Business Credit With Stephen Wible
I am glad that you’re here. I am glad that we have a chance to spend some time together. I appreciate you. I know that you were doing awesome. You are out there pitching your products, talking to buyers and making your products better. I hear from you every single day and I live for it. I was reading a comment from a reader saying that although she doesn’t want to get into Costco and wants to get into specialty retail, she gets so much out of the show. I enjoy hearing from you, how the show is helping you, and how the things that we talk about are making a difference in your journey, in your goal setting, in what you’re trying to do and what you’re trying to accomplish.
Along those lines, along with trying to help you get where you want to go, I’m having a conversation with a gentleman named Stephen Wible. Stephen is a Marine Corps veteran. He has a deep background in real estate sales, flipping property management, print manufacturing, building and obtaining business credit. He’s found and led multiple successful companies and has had as many as 300 rental properties in his portfolio. Stephen has done and knows a few things and he’s going to help you make yourself better. We’re not talking about flipping houses, although we did talk about that for fun, we’re mostly talking about how to build your business credit.
One of the things that I hear a lot when I have a client that’s coming in, they have a product on Amazon and they want to take it to retail is they think they have a company. They think they’ve developed and created a company, but that’s not true. What they have is a product. When they realize that they need a company for retailers to partner with, they go about building that. One of the things they’re probably not building is business credit. It’s not as hard as you think it is. Stephen gets into that. Even I found out that I’m making some mistakes that are easy to fix that would help my company be eligible for even more business credit. I have a client in Canada and we secured over $7 million in POs from Costco. The big question I get a lot is how did they afford that? How did they afford to pay for that business credit? Business lines of credit that they’ve been cultivating over the years allows them to flex that line-up and flex it down based on their needs. That’s what Stephen is going to help you understand. Let’s not waste more time. Let’s get right into it.
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Stephen, welcome to the program. Thanks for being here. I appreciate it.
Thanks for having me, Tim.
It is good to see you. I learned that we’re not too far away here in Florida. I don’t know about you, but I haven’t been here my whole life, maybe for a few years.
If you could tell by accent, I’m nowhere near close to being originally from Florida. I’m from New Jersey originally and I’ve been here for several years.
We almost came out close to Tampa. What brought you here?
The crash. One time, I used to own 300 properties and I was one of the top real estate agents in the state of New Jersey. When the crash happened, I lost everything. I was okay with that. I had the right setup, so that didn’t kill me financially, but what I ran into as I was going into people’s homes to list their properties for sale, my competition would say, “He couldn’t sell any of his properties. What makes you think that he’s going to sell yours?” I was in such a small community in South Louisiana. I was losing listings. I was like, “I got to get out of here. I got to go somewhere else and do this,” so I moved to Tampa. I did well. I decided that real estate wasn’t for me. I got to the point where I was burned down on it.
I think some people will get there. I have a question on flipping houses, this is for my own personal knowledge because I am interested. How long does it generally take from the day that you take ownership of the house to the day that you sell the house to flip a house if you know what you’re doing?
When we say sell it, it means close, not under contract. Typically, when I was doing it and this was during a hot market, we were at the settlement table 60 to 90 days at worst. We were selling them within one day. A lot of times, we’d have them sold while we were doing construction. We would put a for sale sign out front. People would see the construction come in, “I’m interested.” Now, 90 to 120 days would be normal if you priced it right. It depends on the size of the house. I was doing row homes. If you’re familiar with that term in the northeast brownstones, they’re basically townhouses all in a row. It got to the point that I had it down well, I knew exactly what the air conditioners cost. I knew what a roof was going to cost. I knew how many square feet each window was. It was almost like manufacturing, an assembly line. I could walk into the house and know that $30,000 in three weeks, I’m on the market.
What’s the one thing that you have to remodel in a home to flip it?
To me, it is the kitchen and bath. If you avoid the kitchen and bath, you’re crazy. Nothing’s changed. It’s going to sound sexist, but it’s the truth. Women buy kitchens in the baths. If you think they’re not the ones making the decision on the house, you’re crazy.
Without business credit, most businesses are not going to make it. Click To TweetWomen make some ridiculous, 80% of all the purchasing decisions for the house. I have a couple of friends that run a design company. They’re more into podcasting now than design, but their whole concept was how to feminize your product, not change it in any way, but make it appealing to the one person who’s going to be buying it. Whether it’s going to be the man that uses it, it’s the woman who generally buys it and gives it to the man. A lot of times for male-based products, they were packaging and marketing them to the men who weren’t buying them. They made an entire company on how to gender feminize your products so that it would be accessible to both people especially the one person who’s technically buying it.
As a matter of fact, when I say row homes, I’m talking about areas that weren’t traditionally rehabbed high-end. They were traditionally done for rentals. We took a different approach. We went granite when nobody was doing it. We went stainless steel when nobody was doing it. We didn’t put used appliances in it. Our home sold within a day. We did well. Unfortunately, I kept leveraging and was hoping to buy a 30-story building in downtown Philadelphia. That was my goal. The market then said, “We’re going to change all your plans for you.”
Huge shifts in the market or the economy seemed to be the dinner of the day.
I’m sure it’s the same growing up. When I was growing up, all we ever heard was, “Buy real estate. That’s the safest investment you can have.” When I got involved, I had already sold my manufacturing company. I was like, “I’ll buy real estate.” That’s what I was always told. Who knew that it was going to crash? Maybe there was a housing crash at some point in history, but I wasn’t alive for it. That’s how I ended up in Florida.
I think we’re experiencing some things none of us have been alive for it. How are you enjoying the pandemic?
If you can’t tell already, I’m a hyper person. A couple of things that threw me a curveball. I bought this house that I’m in based on where the office of the company was. I got tired of driving 35 to 40 minutes to work every day. I am like, “I’m going to buy a house up there.” I closed in late October and we closed our office in February. I moved to the house on the beach, that’s where I lived. That’s the worst part. I lived on the water. I had my boat outback. That was one.
Two is I’m old school. I’ve been a road salesperson my whole life. I had the manufacturing business so I am always driving somewhere. This waking up and being at work, I’m not a big fan of. The problem is that you’ll never leave work. I had to train myself to shut the computer down every day. Otherwise, I would work until 10:00 to 11:00 at night and then I’d get up every day at 5:00 AM. The first thing I did was walk into my office, I open my computer and I’m at work again. It’s been an adjustment.
I’ve had my own home office since I started my company in 2009. I’ve been on both sides of the spectrum. I’ve been where I get real super distracted and don’t get any work done like, “What’s on Netflix.” I’ve been where I’ll get up, I accidentally come into the office to grab something out of there. The next thing you know, it’s 11:00 at night and I haven’t left my family. They haven’t seen me. It’s a routine-based algorithm. For me, its get-up, coffee, I take a walk every morning, come home, shower, talk to the family a little bit and then go to the office. I have a predetermined shutdown time. My schedule stops at a certain time. If I still have work to do, I still stop at the time. I get dinner done. I’ll then come back for a couple of hours and finish those things up, but if I don’t schedule myself a stop time, it goes on forever.
Being in real estate, I did work from home a lot. I had my office, but a lot of times I would work from home. All of that business was conducted on a cell phone. I’d be out back walking around the pool, I’d walked down to my dog, I’d be looking at the water, I’d watch the dolphins swim by. I was doing something. My wife used to laugh. I used to do circles around the pool while I was talking to people. Now, I’m tied to a computer because it’s an internet-based phone. I’m always in front of it. When they shut down, even the golf courses for a while were shut down, you couldn’t go. That frustrated me to no end. There were a couple of times where my wife and I would be in the car and literally drive from Tampa down to Longboat Key for the drive to get out of the house. I think you need that. You got to clear your mind.
I do 3 or 4 miles walk every day. If I miss a day, then I’m all messed up because I need that outside time and that air. When I used to live in Mount Dora, my walk was all by the lake. In Winter Park, I mostly have cars for the lake instead. When you walk along the lake in Florida every day, you are going to see a lot of cool stuff. You’re going to see alligators, snapping turtles and bald eagles. Anything that you could possibly imagine as coming out of the lake. I didn’t know until I saw it for myself, but herons eat water moccasins. I saw one when I was walking out and one was sitting right in front of my house with one draped over out of its mouth and it flipped it up and it sucked it down like a piece of spaghetti. I was amazed. It wasn’t that thick. It was a smaller one, but I’ve seen everything. I came out on my lawn to take a walk one day and I had 2 or 3 alligators right on my lawn. It’s not a big deal because they take off like a shot. The second you step out there, they’re off, but still super cool. Nowadays, the coolest thing I see are cars driving by.
The good news is our weather is finally coming now. I’m looking forward to it.
This is why we live in Florida, but a big thing for us in our family is a Halloween horror night in October. My daughter turned eighteen in 2020 and it was going to be her first year to be able to go down and be interviewed to be a scare actor and work down there but that’s out the window. There are many things for teenagers that are disrupting their lives anyway. I can remember Octobers wherein at night it would still be 90 because we’d be waiting in those lines down there. I’m glad to see the temperature coming down a little bit. From now all the way through April or May 2021 is going to be beautiful. I’m looking forward to that.
Although I’d like to talk about Florida weather all day, I know that you’re in the credit business and helping companies build in and get access to credit. I have a poll going on my Facebook private group, which is, “What’s the one thing that you feel like you can’t get your product into retail?” A lot of people select, “If I get a good size order, I don’t have enough money to finance it or to pay for it.” I thought it would be interesting to have you on the show and talk about how small manufacturers, one, product manufacturers can start to build their credit so that they can have access to capital when those orders come through.
It’s not the number one problem for even manufacturers, almost all business owners have this problem. There are three reasons. The first being, no one teaches them. In other words, business credit has been around for a long time. As a print manufacturer, I had to have credit to buy paper, ink, and whatnot to manufacture my printing. Walmart’s entire business plan is based on business credit. They don’t pay for anything that’s on the shelf until after you’ve paid them so they have the credit. It has been around forever.
They start at $60,000 which turns into a net $120,000.
Without business credit, most businesses are not going to make it. They need to have somebody that’s larger than them that’s willing to finance their business. Whether that’s a vendor, a customer who’s willing to pay upfront, whatever the reason. The problem is most business owners have no idea what business credit is and how to get it. What our CEO and COO did is they organized this platform that guides people through the process step by step because the key is you need to have a tradeline reporting or payment experiences reporting to Dun & Bradstreet, Experian and Equifax. However, only 7% of all companies report. Seven percent of lenders and vendors report, the rest do not. How do you then build a profile? You need to know who reports.
I’m TLB Consulting and I want to go to the bank and get a loan because I’m trying to hire some new salespeople. They’ll run my credit, but I haven’t been reporting to Dun & Bradstreet or anybody. They can’t figure out whether I even pay my bills on time. Is that what you’re saying?
It’s not that you are reporting. It’s that you haven’t done business with anybody that is reporting. For example, if you do business with the government, the federal government, state government and the county government. From county on up, they’re going to pull your Dun & Bradstreet. They’ll call you, “It’s your DUNS number.” They’re going to pull your DUNS report. They’re going to look to see if you pay your vendors. They want to make sure that you’re paying your bills. Otherwise, they don’t want to do business with you because if they pay you and you don’t pay your vendors, people can come around and sue them. It’s the first thing is they pull. The problem is how do you build that credit profile? There’s a couple of ways. One is you can call Dun & Bradstreet and pay a couple of thousand dollars and they’ll put who you’re doing business with on your report.
It’s convenient. However, if you don’t renew that year in and year out, they become deadlines because it stops reporting. It’s like having a credit card on your personal report and you close the account. That’s not a deadline. It’s not reporting. It comes back at zero. You need to know how to do that. The real problem is if you find people who report, how do you get approved if you have nothing showing up? Unlike personal credit, business credit reporting agencies don’t give you no Beacon or a good score with nothing on the report. They’ll give you a bad score. If nothing’s reporting, they’ll show Dun & Bradstreet with zero and Experian will typically give you about a 28. It would say high risk on your credit report, even though you’ve done nothing wrong. If a lender pulls that report and when they say, high risk, they give you the scale 1 to 6, and closer to the 1 is borderline bankrupt even though you’ve done nothing wrong. It looks like you may be bankrupted.
You could be crushing it out there paying everybody on time and you got nothing.
That’s basically what to call it. It’s a risk assessment that says, “Typically, companies with this score will be bankrupt in the next twelve months.” You need to build that profile. Let’s say, I pull your business credit report. You want credit for me and I see nothing there. I’ve got to go in a different direction. I’ve got to look at your fundability factors. In other words, I got to look at you and say, “Is this a real company? Are they going to be in business in twelve months? Are they legit? Are they fraudulent?” When I say fraudulent, it doesn’t mean you’re out trying to steal, but you’re not set up. You’re like those people that have Amazon pages and they think they’re a business. They’re selling a product, but they are not in business. They look for these fundability factors. The simple and almost every real manufacturer back in my day used to have these no problem, but most people, business owners don’t have it now. Do you mind if I share a couple of them with you?
I don’t mind.
I run into this all the time, Tim. The first thing is I’ll ask somebody, “Give me your best business email.” Here’s what they’re going to give me, TimothyOwnsABusiness@gmail.com or TimothySellsWidgets@yahoo.com. That’s a 100% red flag to every lender, vendor and creditor.
They are saying, “We’re not real.”
Better would be Info@TimothySellsWidgets.com because if you’re a real business, you would have a legit website. You would have a legitimate business email. That’s the first thing. That’s an almost not automatic denial, but now their red flag is up.
Tim@TLBConsulting.com is my email. It’s a Gmail and it’s done through G Suite. It’s easy to do. As long as you own a URL, TLBConsulting.com, you can get your own. The thing is I have three users on it, $18 a month. When you set up a GoDaddy account, GoDaddy will say, “Do you want to have a business email?” I recommend don’t do it. I always go to Google G Suite and the reason is they’re never down. You can do all kinds of stuff and Gmail works everywhere.
If you're a real business, you would have a legit website and a legitimate business email. Click To TweetIt also ties into your calendar and all that stuff. I have a personal Gmail account and I have my Credit Suite account, which by the way, happens to be G Suite. It is on my phone. I can look at it and I can toggle between the two. It takes two seconds.
Big Boxers, there’s no excuse. If you own a URL, if you have a website, you should have your Name@ or Info@ or Sales@.
I love who your audience is because I use this all the time. I flip it and say, imagine you have a product that you want to sell a big box. You want to sell at Walmart. You get an email that says, “We’re interested in putting your product on the shelf.” The email was from Walmart and the email address is WalmartPurchasing@gmail.com, would you believe it? If they say, “Please enter all your information in here and your bank account,” would you trust that email?
Would you think that they’re legit? Believe me, when you’re trying to sell to retailers like Walmart, they would think about it for a sec. They tried to talk themselves into it, but if it’s from Walmart, it’s not going to be a Gmail.
It’s like getting a certified check for the car you have up on Craigslist like, “Cash that and send me the difference. Good luck.” By the way, if you reverse it, it makes sense. I’m assuming Tim that you and I are roughly from the same decade. Back in the day, do you remember you picked up the phone and you dialed 411 and you asked for Joe’s Pizza, Tom’s Towing Shop or whatever business you wanted?
The fact that you’re putting that on a rotary, we certainly had a rotary in the garage when I was growing up.
That was called the 411 databases. That database still exists. Back then, it was tied into Bell or whoever was, but there is a National 411 database and 800 numbers are all listed there. Lenders and creditors use artificial intelligence to check if your business is listed within the National 411 database. It is easy to do. You can go to ListMeNow.ca and you can list your business. The problem is they don’t list cell phones.
It’s got to be a landline or at least an internet landline.
It’s got to be a legitimate business phone number. It cannot be a Google number, which I love. I have one myself because Google owns the rights to that phone number. You’re not paying for that. Google phone is free, but you get a Google number. They can pull it from you at any time. You can go to somebody like RingCentral.com, get yourself an 800 number, but it has to be a legitimate business number that can be listed within the National 411 database, and you pay for it. It’s $40 or $25 or whatever it is. It’s your phone number and it’s tied to your business. That’s the second thing they do. That’s probably the number one mistake I see because we’re all tied to our cell phones. Everybody thinks, “I’ll give my cell phone, it is my business number.” That’s a mistake.
I’m going to be getting myself a legit business line.
The third thing I see a lot as well is the address. They’re going to do a search on you and artificial intelligence can find all this information out in about 5 to 10th of a second. Almost all applications are done online now so it is easy. If you’ve ever applied for a credit card loan, you’ve felt the results of that. They either gave you an instant approval or you got that pop-up letter that says, “We’ll be sending you a letter in the next 30 days.” Nobody looked at that credit application that was all done through artificial intelligence. Business credit, especially in the beginning operates the same way. The next thing they’re going to look for is your address. Does it match everywhere? What I mean by that is that the IRS, Secretary of State, Dun & Bradstreet all have the same address. Does your website have that address or any Google listings have that address? If anything is a mismatch, it’s potential fraud. It’s an automatic denial. Remember, nobody’s talking to you. This is instant, you’re denied. In the business credit world, there’s no such thing as the Fair Credit Reporting Act. They don’t have to tell you why they’ve denied you. They deny you and say reapply six months because they don’t want you to know the secrets.
You have to synchronize your addresses.
Synchronize everything. It all needs to match. You have to have congruency everywhere. I know people going, “How many times have I put down my home or my PO Box?”
One of the things we talked about a lot is look and feel. A lot of times, a manufacturer will have a product in the packaging look and feel is not the same as the overall look and feel of their website. It’s different branding. I’m constantly telling them, maybe they’re going to buy this product on Amazon, but they may go to your website to learn more about you and your company. If they see a whole different look and feel, they’re going to start wondering, are these two companies connected? Is this their product? Are they buying it from China? What are they doing? Is it theirs? That fits into that same synergistic. Can you have a PO Box as your address as long as it’s the same everywhere?
I felt like you tossed me a softball. I’m glad you asked that question. I’m going to say it loud for those in the cheap seats, do not ever put a PO Box on a credit application. As a matter of fact, don’t have a PO Box as a primary address, have a virtual address. That’s fine. Do not get a UPS Box, a PO Box, or iPostal. If I can’t Google Earth your building, if I can’t go street level and look at your building and it better not say UPS mailbox, then you’re going to get denied. Let’s reverse it again. You got that same purchase order from WalmartPurchasing@Gmail.com and the phone number they put down was a throwaway cell phone. The address was POBox12345@ImGoingToRipYouOffArkansas.com. You have to see it from a lender’s point of view. What are they seeing? You’re putting your “best foot forward” and you’re throwing them a cell phone, a free Gmail account, and a PO Box. “Would you lend to that person $10,000?”
Probably not. A lot of people like myself working from home never want to list my home address as my business address. I don’t want people knocking on my door.
Your business credit report has a picture of your office on it. It is free information. You need to go with what’s called a virtual office. In a virtual office in the ‘70s, that industry sued to be recognized as an actual office, as opposed to a PO Box. They used to be recognized as a PO Box and they sued and they won. The virtual office industry is recognized as a real office. There are two major ones in the country, Regus and Alliance Virtual Offices. Not that I endorse either one of those, it’s that they’re big enough that no matter who’s reading, there’s going to be one in their city.
What was the other big one that was having financial trouble like something space?
That’s the one where it was one big open space. I’m drawing a blank. We have one here in Tampa.
In Regus, is that where you would send your mail?
It’s a forwarding service. They’re going to send it right to you. Back in my day, I had one. I would have them open it, scan it, and email it to me. I’d have my mail the same day or you could pick it up whatever you want. I had a Regus office that wasn’t 3 miles from my house, so it was easy, plus it was a great place to meet clients. You can use your home to build business credit, the limits will be much lower because they’re seeing you as a home. We all started our business in our homes. I started in my basement in New Jersey, but we prefer to see you with a professional address if you can’t get a real commercial address. If you’re manufacturing a product, at some point you’ve got to have a commercial building, whether it’s for inventory or something.
3PLs were probably one of the biggest growing businesses now because of the big online boom. You technically could be a manufacturer and never touch a piece of product and still work it out of your home because all that product comes from wherever you’re manufacturing it to your 3PL. Your 3PL sends it into Amazon or to the retailers or whatever. You would still need to have to your point of Regus office. Big Boxers, these are key points. If you’ve ever applied for credit and universally denied, you get denied a couple of times, you’re like, “I’m not big enough yet. I’m not that enough yet,” when there are some simple things that you’re making mistakes on.
By the way, here’s how you’ve been denied for business credit. When I say business credit, that’s credit in the company name, not tied to you personally. The company has its own credit profile. You have to be an LLC or an S Corp or a C Corp. You can’t be a sole proprietor issue. If you get denied for business credit, that denial looks like this, “Please give us your Social Security Number.”
They want a personal guarantee.
In the business credit world, there's no such thing as the Fair Credit Reporting Act. They don't have to tell you why they've denied you. Click To TweetYou got it. That’s a denial for business credit. What most people don’t realize because it’s been ingrained in our heads since we were little, every time we see that blank Social Security Number spot, we all fill it in for a credit application, for employment applications or for whatever. It’s been true. We’ve been trained to do that. The bigger lenders and creditors don’t want you to know you can get business credit because it’s in their best interest to have you personally guarantee it. However, at the same time, they also want your business. Like paper suppliers, it is one of my businesses, I was buying millions of dollars a year. If they made me personally guaranteed, I wouldn’t be buying from them. I’d have bought it from somebody else. Truck drivers, when they get fuel cards, they can get limits of $50,000 for fuel, which makes sense for an over the road trucker.
The reason these vendors give them credit is that they what their business. They’re competing for their business. You have a fuel station called Sunoco here, Mobil here, and Mobil says, “I’ll give you $50,000 of credit.” It is not tied to you personally, instead of saying, “No, we want your Social.” Which way do you think the driver’s going to go? They’re going to get that credit from that particular supplier and they’re going to buy their product.
You’re getting it either people if you have BillysTrucking@gmail.com.
Here’s the thing. If all these manufacturers are reading what to supply Walmart, they’re going to ask for credit. They’re going to ask 30 net, 60 net, 90 terms. You need to have that same type of credit for whoever supplies you. You’re not going to get it with a 28 experience score. You’re not going to get it with anything showing up on Dun & Bradstreet. How you’re going to get it is to have a strong business credit profile and manufacturers are going to want to supply you.
Another thing that people don’t realize is once you get to the point where you’ve got cashflow, you’ve got a P&L going on, you want to apply for an SBA loan because you want to expand. The SBA is going to pull your personal credit, 100%. They’re going to pull your P&L. They’re going to want to look at your two years tax returns. They’re going to look at your business credit profile. The way I like to describe it, it’s like a funding wheel. If you leave one-quarter of that wheel missing, how far is that wagon going to roll? What they have to do is they have to focus on your personal even deeper because you have nothing on their business credit profile. Ninety percent of the business owners out there don’t have anything on the business credit profile. It’s a shame.
Can you get an American Express business corporate card without putting your Social down?
That changes. Here’s what I mean by that. Business credit is a constantly moving target. I wrote a book a couple of years ago and within three months it was outdated because the creditors are constantly changing their parameters as a mortgage company will. The answer to that would have been yes several years ago. Now, it’s maybe. Can you get Visas or MasterCards? You can with no personal guarantee. You can get vehicle financing. If you have a delivery service, you’re delivering your product, you can get a box truck and the company name without you signing personally. You can get a gas card, you can get computers. Ironically, Amazon offers business credit. You can get a credit card from Amazon in the business name.
Anybody who is selling on Amazon now, they got to buy this business credit thing. It would be great if their customers bought from them that had business credit because they can use business credit cards to buy it. Amazon would give them credit. You have to understand that it’s even out there and most people have no idea, none whatsoever. I see this all the time. What happens is they’ll come to us when it’s too late and say, “I got a huge order. I can’t produce it. I don’t have any business credit.” I’ll say, “First, what is your credit score?” “590, I maxed out all my cards building this business up.” “That’s why you need business credit so you didn’t max out your personal credit.”
When I was in real estate and even in printing, I had a ton of business credit. I only used personal credit if I could turn that into money like buying a house, then I would use it. If I was selling a product, let’s say T-shirts and an opportunity to fill a 500,000-piece order and the supplier would give me a huge discount if I personally guaranteed it, I’ll use my personal credit for that. I’m going to leverage and make more money. For you to use your personal credit to buy supplies and a computer, it’s insane.
A lot of times, they’re maxing out their cards buying their first minimum order. They’ll buy their first 1,000 units, their first 5,000 units and I see that a lot too. They come to me and say, “I got a garage full of products. We need to sell it because I need that cash back.” Your urgency is nothing to a retailer. Retailers are going to put you through the same thing. They’re going to put anybody through the fact that it’s urgent for you. It makes no difference to them.
When we would have a slow 4 or 5 shifts in a row in the printing and we ran 3 shifts, I wasn’t calling my customers and go, “I need you to order something from me now or I’m in trouble.” They don’t care and be like, “We have nothing to order. We got all we need.” Here is another thing, business credit limits are 10 to 100 times higher than personal credit limits.
That’s a big number.
Go to the SBA website. It’s a word for word. What they say on their website is 10 to 100 times higher. I use that trucking example. Imagine Tim that you’re a truck driver. You personally go into a Shell or Sunoco and you apply for a gas card, not the company name, just your name. With good personal credit, they probably going to give you $300 or maybe even $500, but how much are you spending on fuel in your car? If you go in there as Bush Trucking, Inc. with a strong business credit profile, the limit is $25,000 to $50,000, a monster difference. A telemarketing company would buy way more computers from Apple than you or I would.
What about tangible things? What if you want to grow your business, but what you need is employees?
Here’s the deal, anytime you get actual cash from a lender, they’re going to take your Social, always. That’s a case where you’re expanding your business or you’re leveraging your personal credit to make money. You wouldn’t hire more employees if you didn’t have enough business to do it. Could you get an SBA loan? Yes, if you had a great business credit profile and even your local banks will look at your business credit profile. Their decision, whether to approve you or not, can be impacted by that. In other words, I go in with 800 credit scores, but let’s say I don’t have a thick file. Maybe the most amount of credit I have is a small mortgage and a car payment, but I’m an 800 credit score. It looks great on paper.
They know better. They can look at that file go, “That’s thin to give you $100,000.” I then say, “Pull my business credit profile tool.” They’re recommending you, which by the way, credit reporting agencies do. They’re recommending you for $100,000. That’s the business credit reporting agencies. Now, I’ve got a thin personal credit, but a good score and I’ve got a great business credit profile, “I’m going to get funded.” That’s the difference.
You had said, “People come to us.” I want to get to that, but what type of repayment? Let’s say, you want some money to buy computers, buy a truck, buy some merchandise. Let’s say you worked, you have a number and an address. You’re not using BillyBob@gmail.com. You’ve done all these things. You have a decent business credit built up. How far do you expect to be able to defer your first payments so that you can use that money without having to use part of that money to pay for that money?
Every loan is going to be different. We were discussing purchase order financing. Every term is going to be different. Every borrower to be honest with you is different. It depends on the type of loan you’re getting. With receivables financing, you’re not making any payment back until the customer pays you. With personal financing, they’re going front it and they’re going to give you delayed payment until you deliver the product. Back in my day, they would give you 60 days after you delivered the product.
Normally, your terms with the retailer are 60 days.
They never paid on time. SBA takes your fees out of the backend. Usually, that includes delaying your first payment for 60 to 90 days. Every loan is going to be different. It’s a great question, but it’s such a wide variety of answers.
Do you expect that you can try to find a loan that’s going to give you the best possible deferred first payment so that you can get things started?
Absolutely and I say this to people all the time. When they come to us, they talk about what we do and they explain to me how this works. I explain and say, “Here’s what’s great. Have you ever had a good personal credit score?” I asked the same question all the time and nobody is going to tell me they haven’t. They always say yes. I say, “When you had a good personal credit score, do you remember going out to your mailbox and seeing tons of credit card offers? There’s always a credit card offers in your mailbox. I’m sure it happens to you now. Check your mailboxes. There’s from Capital One, that doesn’t matter. There are always offers.”
They didn’t randomly send that mail out. I was in direct mail. That was my specialty. They bought that list from somebody and who they bought it from was the credit reporting agencies. We want everybody in this zip code with a credit score between 725 and 840. They mail that specific mailing list because their job is to get people to use their credit card, to apply for the credit card and get approved. That’s their job. That’s what they want. Don’t you think commercial lenders do the same thing?
When you start saying it like that, it makes perfect sense that they would, but I would not have thought that commercial lending would even think about me, but now, as you’re talking about it, if I had a profile, if I’m out there to be thought of.
If you have no Beacon, no score at Dun & Bradstreet, it’s not creating a Paydex score for you. You’re not on anybody’s radar. You need an 80 Paydex score and you can generate that with three tradelines but that doesn’t mean you have a good credit score. It means you’ve generated a score. If you have an 86, 88, 90 Experian, a small business score, you’re on somebody’s radar. They’ll buy a lists, “We want companies that are two years old that are doing a minimum of X hundred thousand dollars a year with an SBS score of 88 in this area,” and they mailed them. The money starts looking for you is my point, instead of you looking for the money. I’ve had people say to us in my webinars, “It’s unbelievable. I went through the program. All of a sudden, instead of me looking for money, the money keeps coming to me.” That’s what happens.
Let’s talk about that. I’m sure where we’re getting to is you can do all this by yourself or you can use us and streamline it and make it faster. Who is us? How does that all work?
Business credit is something that everyone should look at it. If you don't have a business credit profile, you hamstring yourself. Click To TweetWe’re Credit Suite. We’re an education company. We teach business owners how to build a business credit profile. We do it through two things. We have a platform with a step-by-step guide and we have advisors that guide you through it because every business is unique and you’re going to run into issues where you get denied and you don’t know why. They’re not going to tell you why. We’ll look at your profile, figure it out and be like, “Here’s what we got to correct, go back and apply.” We teach people how to do that. We have a program to help you do that, but we give away a ton of free information. If your readers are interested and they want to learn even some basics, they can go to CreditSuite.com/pod-ein and get themselves a free business credit building guide.
Even if they never talked to anybody here again, that’s okay. They’re going to get some good information there. We teach people how to do that. We’ve helped create over a billion dollars in business credit. We’re not doing it for you. We’re teaching you how to do it. If you follow the steps, it works. It’s the way I describe it. If you have a 20-acre yard and I tell you, “There’s a $100,000 buried in a coffee can out in your yard.” You could take a shovel and start digging. I’m not going to tell you where it’s at or you can take a shovel to map. Which way do you want to go? You’re going to find the money, eventually. My first time building a business credit profile, it took me seven years.
We typically see our customers go create a strong profile in 6 to 9 months. What’s great about business credit is the limits go up super-fast. As an individual, when you turned eighteen, maybe you got a jewelry card for $300 limit. Nobody came approaching you trying to give you a $500,000 mortgage right after that. You had to build your profile and it will take a long time. Business credits were amazing. You apply for these starter vendors, you get approved and usually get a $1,000 limit, you pay it, and they report. The next thing you know, people are recommending you for $2,500 limits for the next set. You use those, you pay them. The next thing you know, you’re on a $7,500 limit. It’s amazing how fast it grows. Typically, I see startups get between $60,000 to $100,000 in credit in the first 6 to 9 months.
You could pay on time, pay it off every month for a regular personal credit card for two years. You then call them up and say, “Can I buy my credit?” “No.”
If you don’t use it, it’s even worse. I had somebody do that. I won’t say the bank, but I was like, “I haven’t used this card in a year. Its limit is too low.” I called her like, “You never used it. We’re not going to increase it.” I had another card with the same company that was seven times the limit.
This was years ago, I was on the phone with my Bank of America Visa card. It wasn’t a debit card. It was a legit credit card. I got stuck because my flight was canceled. I needed to rent a car. The guy’s like, “No.” I’m like, “I’ve been a customer of your guys for a lot of years. I’m on a long business trip. I maxed my card out. Can you give me a little bit of extra?” He goes, “You being a good customer is no longer a factor in our decision-making process.” I’ll never forget that. I got home. I pulled all my money out of Bank of America. I canceled all my credit cards. It was like, “Are you kidding me being a good customer is no longer a factor? How do you even work there?”
Since we’re trashing banks, I was a Wells Fargo customer. I was banking with Wells Fargo forever. I was a RE/MAX agent, a Keller Williams agent. When I moved to Florida, I stuck with it. I have my Keller Williams license in New Jersey and I was I’m going to go with Keller Williams in Florida. I had a $40,000 commission or something that was due to me. They would deposit it for me in my Wells Fargo because they bank with Wells Fargo and then I’d have the money. I started writing checks to the same bank. They bounced every check I wrote. They didn’t bounce them to the receiver of the money. They bounced it to me.
In other words, they charge me a daily overdraft fee for each one. All said and done, they ended up taking $3,000 from me. This was a Wells Fargo check that was deposited in a Wells Fargo account. It was a payroll check they held. I went and asked them, “What’s the deal?” He said, “With what happened after the crash, the only way we’re making money is with our fees. We’re holding every check ten working days. We’re honoring them, but we’re charging you the daily fee for each check.” I said, “How much is my account? Clear it out now. Give me all my money. You admitted that you stole $2,000 from me because you had the right to do that with the new Dodd-Frank laws.” That was part of it. They could hold the check for ten days. It didn’t matter if it was a check. I found the smallest bank I could find and said, “This is where I am banking from now on.”
I’ve never seen in all my days in the business where being a good customer means nothing, but at that moment, me being a long-term good customer, I’ve never had anybody tell me that since.
“Tim, you’re a great customer. We love you, but it does affect anything. If you need help, don’t call us.”
That would never happen with American Express. You would call them up and you would say, “I’m stuck in Frankfurt and I need this and that.” They’d be like, “You’re good.”
That’s a great story. Anyway, you can’t build your high limits super-fast. I know we tend to get off on tangents. Business credits are something that everyone should look at it. I don’t care if you started your business now or ten years ago, if you don’t have a business credit profile, you’re hamstringing yourself. Business credit profiles stick with the business.
If you sell it, it’s an asset.
It adds real value. I’ve seen this many times where people will sell their business, the creditors got more than they expected because they get double credit.
Big Boxers, I know all of you at some point have an exit strategy. Getting into retail is part of you 2X or 3X-ing the value of your business. If you get a vendor number at Costco or a Walmart, all of a sudden, your business is worth 2 or 3 times more. What Stephen is saying is if you have a solid business credit profile, maybe can take your business up another X. That’s a lot of great information. I’m sure we didn’t get to it all, but I think that the gist is that business credit is something that your business needs in order for you to move forward. Stephen, great talking to you. I’m sure we could chit chat for quite a long time about a bunch of different things. We’ll be sure to have you back on and good luck with the rest of your calls.
I appreciate that, Tim. You have a great day. It was nice talking to you.
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Stephen has left the building, but not before departing some amazing advice on how we can all build our business credit, how we can all take advantage of that money that’s out there. I don’t know about you guys, but I found it interesting and insightful. Some of the easy things that you can do like making sure that you have a phone line or your office address is not a PO Box. I’ve worked from home for many years. My cell phone is basically my main office line. I’m going to go right out and get myself an internet line, an 1-800 line that can tie back to my business. I’m going to make sure that my business address, I have an office address that people can tie to my business. These are some easy things that you can also do to make sure that we are not coming up like red flags when we’re looking to build our business credit.
Thanks for reading. I appreciate each and every one of you. I hope you guys are all doing great. Don’t forget a couple of things. If you’re not part of our Facebook private group On The Shelf “Now”, hop on over to Facebook, look for On The Shelf Now, hit join and get into that conversation. If you are about to be in the process of taking your products to retail, you were 100% going to want to join our TLB VIP experience. I think that this is going to publish in enough time for you to still get in at the $19 price. The price is going up and even the new pricing people, it’s still worth ten times that, but we meet every single week for an hour. We have an entire base camp that’s dedicated to the VIP group. These people in here are problem solvers. We met one of the VIP members who was having some questions about a spec sheet that he was trying to put out. We put that out there to the group and the group solved it for him. When he left, he had multiple answers, multiple different things that people had done, along with me, weighing in on how he could set up the spec sheet for success. That’s what that group is designed for.
We are in the middle of going through deals that are happening now. The group gets to see and mock respond to emails that I’m receiving from buyers. To give you an idea of what we do is I’ll get a re-email from a buyer. It’s something that’s happening and I’ll post it in base camp. I’ll ask the group, “Respond to this email if you received it.” During our VIP session, we go through those responses. We talk about how they could be improved, what you might want to say and what you might not want to say. We also let our group members that are going after retailers on their own talk about their experiences that they’ve had for the week. What you get is inside information that’s not available anywhere.
If you want to know what it’s like to talk to buyers and negotiate deals, that’s what we’re talking about. That’s what we’re doing. Not only that, but it’s super fun with a great group of people. We’d love to have you there. If you’re interested in checking it out, one session is for free so you can see what’s going on, all you have to do is send me an email at Tim@TLBConsulting.com. If we’re friends on Facebook, or if you’re in the Facebook group, send me a Facebook Messenger saying, “I’d like to sit in,” and we’ll make that happen. Come and check it out for yourself, come and sit in and hear what we’re talking about for yourself. You will not want to miss the next one after that.
We’re going to be doing roleplay some specific buyer scenarios that I and myself have been through in the hundreds of different buyer meetings that I’ve had. We’re going to be role-playing with the different people in the group so that everybody gets a chance to see what buyers might say in a real scenario. Anyway, TLB VIP group, if you want to go to the website, we’re in the middle of changing it on the website, but it still should be on the first page, you scroll all the way down. It’s on the left-hand side, you click on it and it’ll take you to where you can sign up.
I am looking forward to you being in there. You don’t want to miss it, you’ll especially want to sign up before the end of October 2020. All kinds of different ways to connect with us on OnTheShelfNow.com our website, get in there, and leave some comments on On The Shelf Now private Facebook group. Check that out. Go to TLBConsulting.com, which is our main website, and see what’s going on there that has all our services. You want to book a coaching call. You want to be part of our mentorship program. That’s where you’ll find that information out. That’s all I got for you. I hope you enjoyed Stephen. Stephen, thank you for coming on. We appreciate your knowledge. We appreciate you being willing to share it. Until then, I look forward to seeing your products on the shelf.
Important Links
- Stephen Wible
- Tim@TLBConsulting.com
- TLBConsulting.com
- ListMeNow.ca
- RingCentral.com
- Regus
- Alliance Virtual Offices
- SBA
- Credit Suite
- CreditSuite.com/pod-ein
- TLB VIP
- On The Shelf “Now” – Facebook Group
About Stephen Wible
Stephen is a Marine Corps veteran with a deep background in real estate sales, flipping and property management, print manufacturing, and of course, building and obtaining business credit. He has founded and led multiple successful companies and had as many as 300+ rental properties in his portfolio.
Stephen is a public speaker, author or “Business Credit – The Complete Step – By- Step Guide”, trainer, and avid learner. He passionately combines his high energy and business credit knowledge and is a recognized expert in the field. He provides impactful insight into building business credit and obtaining loans for business – teaching and presenting to thousands.
He is the Director of Business Development for Credit Suite, Inc. – The recognized leader in teaching business owners how to “Build Business Credit” that is NOT tied to your social security number.
Part time day trader. Licensed Real Estate Agent
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