CJ Wallace Interview
Entrepreneurship is part of the American Dream, and is something that many of us aspire to when we have something we’re passionate about. Unfortunately, not everyone has been given access to the knowledge and resources needed in order to turn those concepts into reality. One of those resources is the capital you need to get your business off the ground, and CJ Wallace, real estate investor and business credit consultant, had a lot of advice to share about how to turn those dreams into profitable businesses without negatively impacting your own credit score.
How is Business Credit Different From Personal Credit?
Personal credit relies on your social security number and your own personal credit report to determine your creditworthiness. If you have poor credit, you’re much less likely to be approved for a loan or credit application. Even if you’re approved, chances are high that you’re not going to get the amount of credit access you need or the APR or interest rate you might hope for. Those with low credit scores also often have to pay additional fees to maintain their account or annual fees to get started.
However, unsecured business credit cards (AKA credit cards that require no deposit or collateral) do not rely on your personal scores or your social security number. Instead, what you would provide is an EIN (Employer Identification Number). Rather than your approval being dependent on your own credit score, it would rely on the legitimacy and profitability of your business and would have no bearing on your credit score whatsoever! This approval is, however, a 7 step process that any start-up or brand new business can obtain without having any profits as of yet. That 7-step process is outlined in detail below.
Another huge difference between personal credit and business credit is how each is reported and improved
upon. For example, personal credit scores range between 300-850 and information on it lasts a full 7 years 
unless forcibly removed by a creditor or the credit bureaus. Your business credit score (or Paydex) ranges between 0-100 and cycles annually. In other words, you could raise your Paydex score from 0 to 100 in as
little as 6 to 9 months by following the 7-step program above.
The final major difference between unsecured business credit cards and unsecured personal credit cards is the fact that business credit primarily cares about your payment history. If you’re making at least your minimum monthly payments on time every single month, you should never have to worry about any negative impacts to your business credit account. With personal credit, you have to worry about your utilization percentage along with your payment history, how many hard inquiries have been made to your score, and several other factors that would have no bearing on your business whatsoever. Business credit allowances are often ten to a hundred times higher than what you might be approved for with a personal credit application, according to CJ Wallace.
Which Type of Business Entity Should I Set Up?
CJ Wallace recommends using an LLC (a Limited Liability Company) when you’re just starting out with your business. This type of business entity protects your personal assets so long as they are not in the LLC’s name. In other words, if your business is sued for some reason, your home, car, and anything else in your name (and not the LLC’s) are all protected.
That being said, you do need to provide your social security number in order to obtain an LLC since a business does, naturally, need to be legally attached to a person (or several people). Every proprietor of the business needs to have their social security numbers listed in the business in order to be a legitimate owner. However, that information is not used or needed when applying for actual business credit.
Can You Get Business Credit Without a Social Security Number?
How?
You absolutely can! As explained above, a business credit application will not ask for or need your social security number. Instead, they will use the EIN and your DUNS (Data Universal Numbering System or Dun & Bradstreet) number to attach to your business credit account. Additional information they may ask for includes:
1.) Legal business name and address
2. ) What kind of business it is (salon, real estate, etc.)
3.) Contact information for the business (separate for personal contact information)
4.) Tax identification number (EIN and/or DUNS in this case)
5.) Annual business revenue and monthly expenses
6.) How long the business has existed
There may be some applications that ask you for your social security number, but you do not have to use it and you should avoid doing so altogether. Only use your EIN number for unsecured business credit card applications.
As Per Our Show on Velocity Banking, We Know It Helps to Pay
Off Debts and Have Positive Cash Flow. Can Business Credit Be
Used to Facilitate This Concept?
Using business credit to pay off personal debts and improve personal finances can actually be one of the best ways to implement the velocity banking concept. What’s wonderful about this idea is that your business credit line becomes that amount that you “borrow” from to pay down (or off) any personal debts you have. Doing so will automatically improve your cash flow, your credit score, and your lifestyle without negatively impacting the number of hard inquiries on your credit score or making it constantly fluctuate like it would if you pulled from a personal credit line.
If You Aren’t Using Your SSN, How Are You Obtaining Unsecured
Credit Cards?
This is where it’s important to follow the steps that CJ Wallace outlines in our interview. Without following these steps, any business credit line you wind up being approved for is likely to be a fraction of what you may have been able to get otherwise. People will often start receiving offers in the mail for unsecured business credit cards at around $5,000. This is around a tenth of what you should expect to qualify for within the first year of opening your LLC..
The 7 steps in this program are:
1. Come up with a name for your business
2. Apply for a virtual address (through services like Davinci, Alliance, or Regus)
3. Apply for a virtual phone number (using a service like Vonage, Ring Central, or Freedom Voice) and
register that phone number with a 411 directory service at http://www.listyourself.net/ListYourself/
4. Apply for your LLC by Googling “department of state business licenses + [your state]” or go to
http://www.mycorporation.com to have it done for you
5. Apply for an EIN number (which you can refer to https://oelshow.com/EIN for assistance)
6. Apply for a General Business License for your LLC or corporation
7. Finally, apply for 3 trade lines of credit or Net 30 accounts. Wallace recommends using Uline, Supply
Works, and Grainger.
What Range Can You Expect to Receive in Unsecured Credit Card
Limits When Your Business is About 9 Months to a Year Old?
According to CJ Wallace, you can typically expect that an unsecured business credit card will provide you with around $50,000 within your first year of business so long as you’re following the steps he has laid out for us. Without following those steps, you may mistakenly settle for a fraction of that credit line and sell yourself short. As your business grows, though, so will your credit line and the range of money you will have access to.
What is a Brick and Mortar Location?
A brick and mortar location, simply speaking, is an actual building with an address that you can use for your business as opposed to a post office box or other non-physical space. That being said, there are places referred to as “virtual offices” that can function as an actual location without requiring you to be paying for a lease, an electric bill, and all of the other hassles that come with owning a physical building. Virtual offices, like through Regus and Davinci (companies that offer virtual office solutions), allow you to use a physical space for meetings and conferences when necessary, provide telecommunication services, and a physical address which you can provide to credit companies and clients alike. The spaces are also fully furnished with office equipment and furniture you might need, and you can book these spaces at your convenience and for a very reasonable price (especially when compared with big-number costs like rent and utility bills).
You absolutely have to have a brick and mortar location in order to be approved for an unsecured business credit card. Without it, your application will be denied because home-based businesses or post office box addresses are not seen as legitimate business addresses. In fact, home-based start-up businesses are denied for business credit 99% of the time. Having a brick and mortar location (including a virtual office space) gives your business legitimacy in the eyes of lenders.
Can I Use This For Wealth Building, Like Buying Performing
Assets? I.E. Real Estate Investing?
You can and should utilize this method to build your own wealth and that of your business. Use your credit line to acquire whatever materials, assets, real estate, etc. that you might need in order to get your business off the ground. Using your normal business practices, you should be able to turn those purchases into profits and put that money right back into both the credit line and your own pocket. This is an excellent way to build wealth and grow your business at the same time.
5 Takeaways about Obtaining Business Credit without an SSN
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Using business credit as a means to improve your personal debt situation is both legal and advisable so long as your business is pulling in the money to cover your monthly minimum payments.
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You can build your wealth with a business credit line by using it to pay off personal debts, improving your personal credit score by freeing up your credit availability and lowering debt with no negative impact to your business accounts beyond transfer of balances.
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Follow the steps! There are specific steps that you should take before applying for business credit, and applying before completing these steps can significantly lower your credit accessibility.
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Take the leap. A lot of people will have an idea but be afraid that, if they don’t have the money in their own pockets to get started, they won’t be able to get off the ground. This concept of business credit is exactly what you need in order to do so without bleeding yourself dry.
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If you have a great credit score, you can use that to add to your credit line accessibility, but it is not.
Resources
On CJ Youtube Channel you discover more videos explaining the Business Credit Processing real estate investing and much much more.
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https://CJWallacellc.com
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CJ Wallace’s Youtube Channel
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CJ Facebook Page
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Sign of for CJ Business Credit How to Course Here