Why do I need all of these bank accounts?
Establishing relationships with local and national banks is a long term growth strategy that will position you to have access to funding opportunities like loans and grants. Shop around and choose wisely to select a bank that caters to small businesses. You don't have to carry huge balances in each of these accounts but you do want to make deposits regularly and keep them open for years. You can use the multiple accounts to organize your finances. For example, designate one account as a savings account for estimated quarterly tax payments.
Why do I have to make purchases with T1 vendors?
You want to establish yourself as a credible business with a reputation for paying quickly. The Tier 1 vendors listed above are small business friendly and will help you accomplish this goal with the least amount of financial commitment from you.
Why can't I just apply for credit cards now?
If you have no business credit score and no business presence, you will have to use your social security number to personally guarantee business credit cards. It takes time for business directories to update the business information you will provide when completing your action plan above. While these directories are updating your information, your payments to Tier 1 vendors will start to be reported to the credit bureaus around the same time. Once your business credit and business presence are updated and in alignment, then you can start looking at applying for credit cards based on the strength of your business foundation.
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