When you’re a successful escort, it’s reasonable to consider what it would be like to expand your business to include several employees and make your enterprise an agency. If you have hopes of growing your business in any capacity, you should build a professional credit history.
Building a credit history takes several steps and cannot be done overnight. But, it’s an effort that can yield great benefits. For instance, if you ever want to purchase property or build offices for your escort agency, you will likely need to acquire funding. Getting a commercial loan is getting harder and harder, so it’s essential that your credit history is strong and demonstrates fiscal responsibility on your part. It’s never too early to begin building a good credit history for your escort business.
It will take a few months to put into place all the steps necessary to begin building good credit. Here are the steps you should take:
- Apply for official identifying numbers for your business. You can apply to the Internal Revenue Service (IRS) for a federal tax identification number, officially called an Employer Identification Number (EIN). The application process can be completed online here. It’s a simple process that requires you to answer questions about your business and its structure. None of the questions are invasive or complex. Additionally, apply for a D-U-N-S number from Dun & Bradstreet, Inc. A D-U-N-S number is a unique identification number that puts you into the D&B database of viable businesses. The D&B database is a global standard for credible businesses and verifies that you are legitimate. After answering a few basic questions, you will be issued an ID number via email within 30 days. After getting a D&B number, you can begin a credit file, which lends even more credibility to your business record when you apply for financing or a credit card.
- Establish credit for your business separate from your personal accounts. When you’re running a small business, such as working as an escort, it’s easy to use your own accounts to pay for business expenses and to put your earnings into. However, if you want to build a business credit history, you must separate your personal and business finances. Do this first by opening a business checking account in your escort agency name. After opening a checking account and depositing money into it, apply for a credit card for your business. Your credit card should be used when ordering supplies or making simple purchases for your business. Additionally, put your phone or utilities to your incall in your business name. Finally, apply for vendor-related credit lines at retailers you do business with regularly, such as Dell, Home Depot or local gas stations. Creating positive relationships with these vendors will go a long way in padding your credit file.
- Pay all accounts on time. Any account that is in your business name should be paid promptly, ahead of the due date. Paying these accounts late will result in negative reports to credit reporting agencies. Too many reports indicate that you are not trustworthy and are fiscally irresponsible. It is also an indicator to banks or other lenders about how you handle cash flow with your business.
- Monitor your business credit file. According to D&B, the credit scores of one in three businesses may go down in just over a three-month period. It’s important to regularly check your credit rankings so that you are aware of any changes before your accounts are affected. It’s never good to be caught off guard. Additionally, make regular updates about any location changes, numbers of employees or revenue adjustments. Correct any misinformation in your reports, too.
- Make sure all of your business licenses are current and in place. Many cities and counties require escort agencies and escorts to file for licenses or permits in order to operate legally. Obtain any licenses required by your local government. If you are unsure if you’re required to file for a license or permit, call your local county clerk or city clerk to learn more. Many times, you can do an online search of your municipal code to find requirements, too. Additionally, get any other business licenses required to operate a general business in your town.
- Use an accountant to gain credibility. An accountant’s stamp of approval on your books and financial reports is like a gold seal to other banking professionals. If you are looking to gain financing in the future from a bank or other commercial lender, hire a reputable (discreet) accountant to do your books. By having someone else keep track of your money and expenses, it’s much like a checks and balances process that makes you look more reliable. The professional impression it creates for your business is worth much more than it will cost you each month. Of course, because you are an escort, your accountant must be chosen carefully to ensure that discretion is key.
- Consider forming an S-corporation or an limited liability corporation. Either method of organizing takes your business to a more professional level than the sole-proprietorship. As an S-corp. or LLC, you will be required to file for an EIN with the IRS and with your state tax department. But, once you get past the legalities of reorganizing your business, the benefits are great. When an entity pulls your credit report to consider financing, only your business credit report will be accessed. Your personal credit will remain private and unassociated with your business. Your business credit is based solely on your business activities; it will have no relationship to your personal credit information whatsoever. If you have less-than-perfect personal credit, this is a huge deal. Additionally, it’s one step closer to establishing your business as its own legal entity.
- Avoid trouble with the law at all costs. Lenders and bankers are hesitant to approve funding for any business that has been under the scrutiny of local (or other) law enforcement. Do your best to detract attention from yourself and the services you provide. Any business associated with criminal convictions might as well give up their hopes of acquiring financing. In addition to criminal scuffles with the law, stay on track with all accounts to avoid any lawsuits involving battles over past-due accounts. Civil suits can hurt your chances of getting loans, too. Make sure you and your business abide all laws and contracts you engage in.
- Know what goes into business credit scores. In order to build the best credit score possible, it helps to know the elements that are factored in when establishments assess your credit worthiness. Several things are considered, according to Experian, including:
- Number of trade experiences with vendors
- Outstanding balances
- Payment habits
- Credit utilization
- Trends over time
- Public record, frequency and dollar amounts
- Years on file
- Business size
- Treat your business like a business, not a personal line of credit. Although you may make more than you can spend at a time, keep your business revenues in a separate account that is not part of your personal budget. Each week (or month, etc.) pay yourself a salary from your income that you use to pay for your bills, such as personal utilities, groceries and personal items. Your salary should be enough to pay your personal expenses without having to dip into your corporate account for additional funds. Keeping your money separate demonstrates that you consider your business an entity that is stable on its own and has the capacity to grow. However, if you continue to use it as a personal line of credit when you want to buy a new purse or go on a vacation, you will never appear to be serious about your business when applying for financing. Commercial lenders look at your books to find evidence that a business owner is making good use of her money. Escorts who want their businesses to grow need to learn to leave some money in their business accounts to demonstrate their own investment interests.
Building credit good enough to get commercial loans in today’s society is difficult. But, you can do it if you focus on elements bankers deem important. Be smart about your money, just as you are wise about marketing decisions, screening your clients and your personal escorting principles and boundaries. Set goals and stick to them; you’ll eventually get there with a good plan.