Business credit application questions

[Peach331]

Hi all,

I’m a bit confused about something. Here’s the scenario:

I have an LLC. I’m considering adding family members to it in order to start building business credit. (Their credit is better than mine). I know the steps to take to build credit, but during the time when I’ll need to PG it would be best to use them. I want to know:

Do I have to formally add them to my LLC thru the state in order for them to PG business credit? Do lenders check with the state for this?

I have a TAX ID # for the LLC, but it’s linked to my name/info. Is this the important part for lenders? Do I need to get them their own TAX ID # to apply for credit under my LLC?

I hope this makes sense. Let me know if I can clarify anything

[SouthJamaica]

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@Peach331 wrote:
Hi all,

I’m a bit confused about something. Here’s the scenario:

I have an LLC. I’m considering adding family members to it in order to start building business credit. (Their credit is better than mine). I know the steps to take to build credit, but during the time when I’ll need to PG it would be best to use them. I want to know:

Do I have to formally add them to my LLC thru the state in order for them to PG business credit? Do lenders check with the state for this?

I have a TAX ID # for the LLC, but it’s linked to my name/info. Is this the important part for lenders? Do I need to get them their own TAX ID # to apply for credit under my LLC?

I hope this makes sense. Let me know if I can clarify anything

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To me it does not make sense.

Adding relatives with good personal credit isn't going to help your business credit.

Even if it could help your business credit,

(a) there would be no reason on earth for them to get employer identification numbers

(b) it's too trivial a reason to start adding members to an LLC

(c) your tentative plan would risk getting them into personal guarantees, which they could then be sued for if you had trouble meeting your obligations.

IMHO you should scrap this idea and just build your business credit on your own.

Family is family. Don't put them in uncomfortable positions and don't risk messing up their lives.

[Anonymous]

^^^ X2 ... Not worth the trouble, risk or complications. That being said, there's a case to be made for short term circumstances if its part of a well executed plan with extreme attention to detail. Thats where people mess up. In order to pull this off family member would have to be added to members of LLC on record in Operating Agreement and given authority to extend credit in name of business. Most creditors stipulate in credit agreement that they be notified of any changes in structure of LLC as well. Family member takes on personal risk if it goes south and if done improperly OP risks piercing veil and all bets are off.

**My suggestion would be to consult with an attorney as I am not one and my advice is strictly for entertainment purposes only**

🤣

[Peach331]

It would be handled correctly. I just wanted to know if it was possible. Thanks for your responses.