How to Take Advantage of Business Credit Responsibly with Expert Accountant Lashanta Witherspoon & More News

Published by
Peter Kavinsky

Welcome to another episode of Launched & Legal with Dayna Thomas, Esq., entrepreneurship attorney and law firm coach. Launched & Legal is an Atlanta Small Business Network original series dedicated to bringing entrepreneurs and business owners the best practices and tips for strategizing, legalizing, and monetizing their ventures. Today, Dayna is joined by financial services consultant Lashanta Witherspoon, aka the ‘Business Credit Connect’ and Co-founder of EPA Financial.

If you have questions or comments about today’s show, send Dayna a message or comment on Instagram @daynathomaslaw.

Transcription: 

Dayna Thomas, Esq.:
Without a doubt, there are countless businesses operating without truly understanding the importance and power of business credit. Well, today I’m going to help change that with my guest, Lashanta Witherspoon. Affectionately known as the ‘Business Credit Connect.’ Lashanta co-founded EPA financial with her sister. A company with the goal of bridging the gap between success, financial freedom and generational wealth. Lashanta graduated with a Bachelor’s of Science Degree in finance has an Executive MBA. She uses her platforms to educate and inspire people to take advantage of business credit responsibly. And today she’s going to share those tips with us. Lashanta thank you so much for being on the show.

Lashanta Witherspoon:
Yes. Hello, thank you so much for having me.

Dayna Thomas, Esq.:
Absolutely. So I will say for sure, business credit is one of the topics that has been most requested.

Lashanta Witherspoon:
Yes.

Dayna Thomas, Esq.:
So, I’m happy to have you today because I do follow you on Instagram as well. And you just provide that information in such a fun way. You break it down. So we’re going to definitely give that exclusive to our viewers today. So before we get into that, just tell us about your background and how you got into finance, and then launching your business EPA financial.

Lashanta Witherspoon:
Absolutely. So as you stated, my BS is in finance. So I started there, and then I got my Executive MBA. So from that point forward, it’s just weird, because I was in finance first and foremost, right? So I used to work for a credit union for over seven years. So I worked for a credit union as a loan officer.

Dayna Thomas, Esq.:
Okay.

Lashanta Witherspoon:
So that’s where I loan, learn, excuse me, everything about installment loans, lines of credits, mortgages, business accounts, and all this great stuff. So from that point forward, I transitioned over to contract acquisition.

Dayna Thomas, Esq.:
Wow.

Lashanta Witherspoon:
Weird. Okay. Very weird. So I transferred over to contract acquisitions where I learned about project managers, collections, all accounting things and so forth. And that’s what helped landed me a job here in Dallas, Texas as a senior accountant. So I went from financial all the way up until a senior accountant. So everything that I was able to learn, bridge the gap today, for me to be able to offer financial literacy to our community.

Dayna Thomas, Esq.:
Let’s get into the juice of it. Right?

Lashanta Witherspoon:
Yes.

Dayna Thomas, Esq.:
Building business credit. I know for a fact, entrepreneurs are not doing this enough. So how does one establish business credit? So if you were going to break it down to someone who has no information at all, and they say, I want to start building business credit, what should I do? What would your response to that be?

Lashanta Witherspoon:
So you first and foremost have to start with your vendor accounts. So a vendor account would be your trade accounts, as well as your Net-30 accounts. So you can’t go onto any other levels without your Net-30 accounts. So you’re basically be starting with those accounts. And first off, let’s back it up a little bit, because you do have to have a business formation, right?

So you have to have the business form first and foremost. So that’s your LLC. You need to have your bank account in place, you’re checking accounts, saving accounts, etcetera. Have your EIN number, obtain your Duns and Bradstreet number and so forth. So once you get those things established, then you’re going to start actually building out your accounts. Started with those vendor accounts, which is your Net-30. Then you’re going to work your way up into your Tier 2 accounts, which is your retail accounts. Your store accounts.

And then the last and foremost will be your cash accounts, your credit cards, different things of that nature. So from that .4, that is going to help you to build to the next level. Which is getting your lines of credit, those major high end credit cards and so forth. Which that part will lead you into getting your properties, your Airbnbs, your cards in your business name, vending machines, and so forth. So it’s a level to everything it’s level study.

Dayna Thomas, Esq.:
Absolutely.

Lashanta Witherspoon:
Right?

Dayna Thomas, Esq.:
Yes.

Lashanta Witherspoon:
So you have to start with your basic first and foremost, and then work your way up through the process.

Dayna Thomas, Esq.:
And you build on top of that. So I think that was a great introduction. You’ve mentioned vendor accounts and retail accounts. What are the difference?

Lashanta Witherspoon:
So the vendor accounts, again, are your Net-30 accounts. So what Net-30 means, is that you would purchase your, so just say for instance, we’re going to purchase from Quail. So we purchased something from Quail, which is just a online store that you can get various supplies. So you purchase something from Quill today.

And you have 30 days from that date to make the payment. But we always encourage our people to make their payments on time. Because one of the number one things with business credit is, your credit history. Making your payments on time. So I always encourage people to make your payments at least five to 10 days before your due date. If you’re unable to do so, you at least have 30 days, it is super important that we pay those vendor accounts off in time. Because that is what’s going to help build your rapport for your company.

Dayna Thomas, Esq.:
Absolutely. And about how long does it take to really start seeing some increases once you’re paying on time and things like that?

Lashanta Witherspoon:
So you can literally get a paydex score, because that is the score that you’re trying to establish, right?

Dayna Thomas, Esq.:
Okay.

Lashanta Witherspoon:
Which is your Duns and Bradstreet score. So once you get your Duns and Bradstreet score, that takes about 30 days. So as a timeline to actually build your business credit, it usually takes about one year to build out a solid profile. Because you need at least five to 10 accounts between each vendor.

Dayna Thomas, Esq.:
Okay.

Lashanta Witherspoon:
And that’s a lot of accounts you all. Okay. So it takes some time to really build out a solid profile. But once you build that profile out, you’re good to go. You’re ready to take on the world to be honest with you.

Dayna Thomas, Esq.:
That’s fantastic. And you know what you mentioned about a Duns number, right?

Lashanta Witherspoon:
Yes.

Dayna Thomas, Esq.:
So I know in personal credit, we’re measured on a scale of 300 to 850. What is that measurement like for business credit? Is it a scale? So how does someone know if they have good business credit or bad business credit?

Lashanta Witherspoon:
So how it works when it comes down to business credit. It is a scale. So you’re doing it on a range. So for Duns and Bradstreet, that starts from one to 100, your experience score will be from zero to 100. And your Equifax, so that is going to be as well from zero to 100. So when it comes to your Duns and Bradstreet and your Equifax score, those are on a scale to 100.

Dayna Thomas, Esq.:
Okay.

Lashanta Witherspoon:
So obviously the higher your score is, the better the rating will be. Also the higher the score, the lower your risk as well. So that’s how you have to make sure you do understand that.

Dayna Thomas, Esq.:
Absolutely. So it sounds like a lot of responsibility Lashanta. You know …

Lashanta Witherspoon:
Yes.

Dayna Thomas, Esq.:
… you can’t just start this process and just pay late and things like that. It really sounds like a commitment with an important goal on the other end. So tell us about some pitfalls that you have seen or you know of, with people who have improper use of business credit, or just doing things the wrong way. What are some bad things or some pitfalls that can happen?

Lashanta Witherspoon:
So one thing would be, as far as your personal credit score. So what most people don’t realize when you’re first starting your businesses and you start building business credit, your personal credit scores and your business scores go hand in hand. So as you’re getting your credit cards, your lines of credits, your personal credit score is going to be considered.
So once we get a chance to bypass that two or three year mark, then only your business profile will be considered. Your social security number would not be considered from that .4. So a lot of people, as they’re getting their credit cards, lines of credit, they’re not paying their bills on time, and not understanding that that default is hurting their personal credit as well. Or if they’re missing those late payments.

Simultaneously, what is also happening is that you are limiting your opportunities with lenders in vendors as well. So after you are defaulting on these payments and different things like that, you’re also limiting your opportunities to get additional funding. More money, as far as with your lines of credit, higher credit limits and things of that nature. So we have to be cautious, and why it’s so important that we do make our payments on time and we pay early.

Dayna Thomas, Esq.:
Absolutely. So that was actually going to be something I wanted to touch on, because I do know that in the beginning, you do have to personally guarantee a lot of things. But that’s not something that someone who’s trying to build business credit needs to be afraid of. It’s just a part of the process?

Lashanta Witherspoon:
That is correct. So a lot of people like, oh my god, I have to PG, it’s okay. If you guys have to PG, it is totally okay.

Dayna Thomas, Esq.:
Personal guarantee, PG.

Lashanta Witherspoon:
Yeah. So a personal guarantee is basically, you are just ownership of that debt. So if you default on the loan, if you default on it or have late payments, then you’re responsible for that. It’s going to show up on your report. Mainly your personal credit report. Okay. So that’s what a PG basically means.

So if you’re paying your bills on time, obviously, right. If you’re paying ahead of time, you don’t have to worry about defaulting. Because you are responsible, right. You’re holding yourself accountable. And that we are making our payments, so PG is okay. I just want people to always know that it’s okay to PG, because when it comes to credit cards, when it comes to especially credit cards, mainly more than anything, you do have to PG on quite a bit of cards, as well as fuel cards. Because Wex cards now you do have to PG. In the past it wasn’t that way. But now with the Wex cards, which is also a fuel card or fleet card, you do have to PG on those cards.

Dayna Thomas, Esq.:
Okay.

Lashanta Witherspoon:
But just make your payments on time and you’re going to be okay.

Dayna Thomas, Esq.:
So speaking of that, having to PG. I’m going to use PG instead of personal guarantee. So having a PG, should we be afraid of so many hard inquiries on our personal credit when we’re trying to initially build business credit?

Lashanta Witherspoon:
You do need to be cautious. You do still have to be cautious because again, as you’re getting credit cards, as you’re getting any sort of funding, they’re going to pull your personal credit. So you are going to have that in part inquiry on your credit report. But it’s always a way to do things you all. So just say, for instance, if you’re going to get a credit card, you want to apply for multiple credit cards.

So Dayna, if you’re going to get in American express cards, that’s my heart. American express is my love language. American express, Capital one, discover. Just say, if you want all three or four different types of cards. You want to be able to apply for those cards at the same time. The reason why you want to be able to do that is because you’re going to have one inquiry. So we are trying to avoid having multiple inquiries on our credit report. So as you’re applying for these different business credit cards, apply for them at the same time. That’s only going to let you have just one inquiry versus having four inquiries. You’ll just have one.

Dayna Thomas, Esq.:
Wow. That’s good to know.

Lashanta Witherspoon:
Yes.

Dayna Thomas, Esq.:
And that’s really important. This strategy, it’s all strategy.

Lashanta Witherspoon:
Yes, it is. It’s a strategy to everything we do in this life. I personally feel.

Dayna Thomas, Esq.:
Absolutely. And so following you on Instagram and seeing your reels, I have seen a few reels about points cards. I see you going to the gas station or whatever. Tell me about points cards and why we need to pay attention to that as we build our business credit.

Lashanta Witherspoon:
So your points cards or your fleet cards are super important, more than anything. When you’re getting your points, you’re getting rewards. That’s pretty much what points means.

Dayna Thomas, Esq.:
Okay.

Lashanta Witherspoon:
So anything regarding any sort of credit cards, fleet cards and things of that nature, you’re just gaining more rewards when it comes to those different type of programs. So fleet card are super important. You can have a fleet card, you need a fleet card. Gas prices are super high. And the reason why a lot of people may not realize that your fleet cards are on terms, which means that you can be on a Net-10, Net-15 or Net-30 term. One of my favorite cards is the Shell navigator because it’s Net-30.

Dayna Thomas, Esq.:
Okay.

Lashanta Witherspoon:
That means I have 30 days to pay back my gas. So I absolutely love that.

Dayna Thomas, Esq.:
And you still get the points.

Lashanta Witherspoon:
That’s it.

Dayna Thomas, Esq.:
Yeah.

Lashanta Witherspoon:
You get all your points. So you still are able to gather and collect all of your points. Which is going to give you those rewards. That is going to turn into a percentage all, as far as your gas, you’ll probably be able to get different things in a gas station, etcetera. So that’s pretty much what your points would do for you.

Dayna Thomas, Esq.:
That’s fantastic. And all the things that we’re talking about Lashanta, is so that we can create generational wealth.

Lashanta Witherspoon:
Yes.

Dayna Thomas, Esq.:
I know that’s super important to you, it’s super important to me. So for someone who has a goal of creating generational wealth, because I feel like a lot of people that watch this show, are newer entrepreneurs and maybe within the one to five year mile. And the future is just maybe so clear and they just want to be able to have something to leave. So if you were going to advise someone who is kind of younger, getting started and things like this, or a newer entrepreneur, and how to create generational wealth. Just like what are some tips that you would have for them or pieces of advice to encourage them?

Lashanta Witherspoon:
Absolutely. So just going through my own journey, Dayna so far. Just trust the process. You may not have it all. You may not know it all, but just trust the process. Start with one endeavor at a time. Sometimes we can just get so caught up in like, I want to do this, I want to do that. I want to invest in this. I want to invest in that. But honey, none of it would happen if you don’t start with one thing at a time.

So I do encourage people that are getting into the industry, especially entrepreneurs and young entrepreneurs, just trust the process. Build that one portfolio. Build that business out. Use those funds, use your business funding, all of those great things, your business credit, to be able to leverage to your next business. That is what’s going give you the capital, to capitalize upon your next business and the next investment properties, different things of that nature.

So, like you said, I just say to trust the process, just start with one endeavor at a time and then work your way up to the next. That way you’re not frustrated.

Dayna Thomas, Esq.:
Yep.

Lashanta Witherspoon:
You are not overwhelmed. You’re not having a scatter brain trying to figure out, okay, well, what else am I going to do?

Dayna Thomas, Esq.:
Right.

Lashanta Witherspoon:
So I’ve just learned to trust that process. Being a new entrepreneur, with about two years in business at this point, as long as you trust the process, God is going to do the rest for you.

Dayna Thomas, Esq.:
Absolutely good things take time. And you have to …

Lashanta Witherspoon:
Yes.

Dayna Thomas, Esq.:
… take baby steps and build a solid foundation. I was talking …

Lashanta Witherspoon:
Yes.

Dayna Thomas, Esq.:
… about a solid legal foundation, having your things in order. A solid foundation for generational wealth and good credit is important too. So do not be intimidated by it. It’s just something that has to be done in order to be a successful entrepreneur. Which is what we’re about today. So one thing that I also want to make sure is clear to our viewers, is it sounds fantastic and great to build business credit.
But one key takeaway is being responsible, right. Because we talked a lot about credit

cards and points cards and vendor accounts. But if you’re not committed to being responsible, it’s not going to work. So if you know, you’re not responsible with your own personal credit. It’s probably likely that you’re not going to be responsible with business credit as well.

So you have to make sure that you’re making some lifestyle changes. Because it’s very important. So make sure you’re responsible. Definitely take that leap to build the foundational elements and follow everything that Lashanta mentioned. I work with some amazing entrepreneurs and you are just fantastic. So thank you so much for being here.

Lashanta Witherspoon:
Thank you.

Dayna Thomas, Esq.:
You taught me a lot and I’m sure our viewers as well.

Lashanta Witherspoon:
Yes ma’am, thank you so much, Dayna, for having me. It’s been a pleasure.

Dayna Thomas, Esq.:
Well, I hope today’s show help to educate and inspire you as you pursue your business goals. Be sure to share today’s show with someone who can benefit and visit MyASBN.com and subscribe. If you have any questions or comments about today’s show, I would love to hear from you, send me a message or comment on Instagram at @daynathomaslaw. Remember to tune in next week and every week to make sure your business is launched and legal.


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