Absolutely. But be prepared: lenders are often wary of sole proprietorships. That’s because, legally speaking, only one person is accountable for the success or failure of your business. You may be savvy, talented, and industrious, but one misstep or stroke of bad luck—like an accident or an illness—could take you out of the game. This can leave your debts unpaid with nobody else to pick up the slack.
Here are a few ways you can help build business credit as the sole proprietor of a small business:
Avoid using personal credit cards. Many sole proprietors of small businesses use personal credit cards in the beginning. But doing so makes you personally liable for those debts. Plus, it can put your personal credit score in jeopardy and keep you from building business a business credit history.
Take out a business credit card. This is a pretty simple and accessible way to build your business credit score since you only have to make your payments on time and maintain a low (or no) balance.
Incorporate your business. Forming a corporate entity—like an S or C Corporation or a Limited Liability Company (LLC)—helps erect a legal and financial safeguard between your personal life and the life of your business. Having a distinct corporate identity will also help you set yourself up to establish an independent business credit history.