Small Business Blog

B2B Credit Source claims to be able to do many things. One of their main services, however, is “Unsecured Business Lines of Credit.”

One of the most interesting things here is that it says the following right on the B2B Credit Source Web site:

“B2B Credit Source is not a lender of money or a broker of loans. All services are provided on a consulting basis only.”

When I read this, I think what they’re really saying is, “If things don’t work out for you, we were just a consultant. We don’t actually make or broker loans, so if you don’t get one, it’s out of our hands. We just provide a consulting service. If you don’t get your loan, it’s your fault.”

Let’s look at this “unsecured business lines of credit” service and see if everything checks out.

Unsecured Business Lines of Credit
If you read their Web site, B2B Credit Source explains that they are not offering a loan or line of credit. Rather, they are offering you the opportunity to buy a corporation that presumably already exists but that has (hopefully) never been used. In addition, they offer to help you build that corporation’s business credit score, or PAYDEX [definition].

The premise behind this is that if you go to the bank looking for a small business loan, the bank will look upon your request more favorably if your business has existed for more than two years. They are careful to state, however, that these things don’t guarantee that you’ll get a loan or line of credit. Instead, they say, “This gives you a much greater chance of getting approved.”

That’s a stretch.

First of all, no lender cares that the corporation, as an entity, has existed for two years — or two decades, for that matter. What happens when a lender asks to see the corporate tax return for the last two years? Assuming that it’s been filed at all, it’s going to be zeroes across the board, with no revenue or earnings to be shown.

And what happens when you are asked to produce your own tax returns, and you haven’t claimed any earnings or dividends from this corporation (because there aren’t any)?

The bottom line here is that you’re not helping yourself at all just because your corporation is two years old. Not at all.

And what does B2B Credit Source charge for this service? $15,000! (Yes, fifteen thousand dollars!)

The truth is that you can form your own corporation on your own for less than a couple hundred dollars. If you are really determined to use an attorney, then you should not pay more than $1,000. But $15,000? That’s an insult to your intelligence.

And yes, I understand that this $15,000 includes helping out with the business credit and the PAYDEX, etc. But establishing credit in your business name is not all that complicated. It’s certainly not worth $15,000.

Moreover, just having a good PAYDEX is by no means a guarantee that your business will get a loan. It’s also highly unlikely (oh, let’s just call it impossible, shall we?) that you’ll get a business loan without a personal guarantee. You’re going to need good personal credit and some collateral to get a business loan, especially in the current economy. Having a two-year-old corporation with no assets, no revenue, and a PAYDEX, is not going to cut it by itself.

Having said all of this, is it my opinion that B2B Credit Source is a scam? I suppose that depends on your definition of the word.

It’s not a scam in the sense that they are relatively clear about what they are offering: a shell corporation and assistance with building a credit score for that business. If you understand that this is all you’re going to get, and if you feel that’s worth paying $15,000 for, then go ahead. As they say, “Caveat emptor.”

In my opinion, though, it’s misleading in the sense that B2B Credit Source makes it sounds as if doing these two things (buying the shell corporation and then building its credit profile) will ensure that your business will qualify for an unsecured line of credit. It’s misleading at best, dishonest at worst. You’ll have to be the judge.

B2B Credit Source: A Look at the Company
If for some reason you still think that B2B Credit Source is solid, here are a few things to think about:

The domain name “b2bcreditsource.com” was registered in either June or July of 2008. That’s only a few months ago. While not all new business are bad, you have to take this into account before blindly sending in $15,000.

In addition, it makes you wonder how there could be a copyright dated 2002 on the Web site (it’s at the bottom), when the domain name itself is not even a few months old. Is the copyright date supposed to make us think that the business has been around since 2002? Seems odd to me.

Also, B2B Credit Source lists three locations on its Web site: San Francisco, Las Vegas, and Atlanta.

When I Googled the San Francisco address, the first search result given was ”First Capital Business Solutions, Inc.” at this same address. Thing is, the Web site for this business (fcbsconnect.com) has been taken down. A cached version of one of the pages, however, indicates that this company’s business was helping clients gets business loans by building up their business credit.

Sound familiar? Wonder where they went…

As for the Atlanta address, I Googled that, too, and found the company that handles leasing for this office. The fifth floor of that particular building is available on a shared basis, meaning that tenants rent small office spaces. This by itself is not a red flag, as many legitimate small companies operate this way. (Although I don’t get the impression that B2B Credit Source wants you to think it’s a little business with a 300 square foot office space.)

Here’s a link to a description of the office space in Atlanta.

No, the real red flag is that the people who manage this space have never heard of B2B Credit Source. I sent the contact for the property manager an email, and very quickly I received the following reply:

“I have checked with our Midtown center and with our billing department and neither have heard of this company.

Unfortunately I have had companies do this in the past, use our address without paying for a service, but there is not a lot we can do about it.”

Yikes.

If you’re thinking about doing business with B2B Credit Source, please remember to check all the facts, do your homework, and be sure that you understand what you’re getting.
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If you’ve ever done business or thought about doing business with B2B Credit Source, please share your experience with me. And if you are an executive with B2B Credit Source (not an affiliate) and you’d like to offer a response, I will publish it as long as it is based on verifiable facts.