Starting a Business in New Hampshire

A new business in New Hampshire can be yours. So have you been wondering: how do I start a business in New Hampshire? And more importantly, can I do so no matter what the economic conditions are? Can I start a new business in New Hampshire during a recession?

A New Business in New Hampshire: Pros and Cons

New Hampshire is in the second highest set of ten states to start a new business in, per a 2016 article by Business Insider. But the state does have a poor startup activity score.

Still, the state does well with its business tax climate and the quality of possible employees.  In a recent GOBankingRates.com study, New Hampshire was the best state for families to live a richer life. This is also important when considering where people want to live.

Given its size and favorable location, New Hampshire business owners can hire people in Vermont, Massachusetts, and Maine. Plus a vital New Hampshire business resource comes from having no sales or income taxes. Corporate tax rates are also relatively low.

Recent Massive Surge

According to a 2018 article by Fit Small Business, New Hampshire clocks in at number one! But keep in mind, Fit Small Business and Business Insider are using different methodologies.

Why the change? According to Fit Small Business, it had the best labor market and the best small startup costs – for the entire country. It also had some of the best quality of life metrics and very good rankings in the tax category.

A New Business in New Hampshire: Initiatives

New Hampshire’s Business Finance Authority provides access to finance programs. These programs are meant to expand credit availability to small businesses. The authority’s Capital Access Program also helps banks to offer loans to startup companies.

R&D Credit Program

New Hampshire’s Research and Development (R&D) Credit program offers tax credits to businesses which conduct manufacturing R&D. This credit is based on wages paid to New Hampshire employees doing R&D.

There is up to a 10% credit to offset a company’s state taxes. However, this credit is capped at $50,000 per business in a fiscal year.

Community Development Investment Program

The state’s Community Development Investment Program is meant to encourage companies to support community development projects. Tax credits of up to 75% of a company’s donation can also be granted. This lets businesses invest property, cash, or securities into programs to improve their communities.

Working Capital Line of Credit

The state’s Working Capital Line of Credit Guarantee program provides banks offering lines of credit. These are for New Hampshire companies with a guarantee of up to 75%.

Guarantee Asset Program

Another New Hampshire business resource is the state’s Guarantee Asset Program. It guarantees up to 90% of a line of credit. The line of credit is from a participating New Hampshire bank to a qualified local company.

Start a New Business in New Hampshire – New Hampshire Top Industries

The biggest industries in New Hampshire include retail trade. Smart business owners can find new opportunities. Work with the bigger industries in the area. Offer goods or services such as trucking for any industry.

Here is how to start a new business in New Hampshire.

Start a New Business in New Hampshire – New Hampshire New Business Secretary of State Requirements

Register a Business Name

Perform a business name look up on the New Hampshire Secretary of State’s website.

Business Permits and Licenses

All professional and business licenses are at the New Hampshire Government online services page.

Local Permits and Licenses

Check with your local municipality, city or county office or website. There may be any local licensing or permit requirements.

For example, in Nashua, go to the Licenses & Permits page on the city of Nashua website.

Start a New Business in New Hampshire – Business Registration

The Secretary of State of New Hampshire offers an easy online registration system. Forms are also available.

Tax Registration

Be sure to visit the New Hampshire Department of Revenue.

Start a New Business in New Hampshire – Virtual Offices

Alliance offers New Hampshire virtual business office space in Bedford and Portsmouth.

Also, try Regus for New Hampshire virtual business offices in Concord or Manchester. Go to DaVinci for New Hampshire virtual offices in Manchester.

For Franconia and other parts of the state, ask local business owners. Or try computer user groups for possible help in this area.

More options may be to look for virtual business office space in neighboring states. They are Maine, Massachusetts, and also Vermont.

Start a New Business in New Hampshire – Establish Business Credit

Company credit is credit in a company’s name. It doesn’t link to a business owner’s personal credit, not even if the owner is a sole proprietor and the only employee of the business.

Consequently, an entrepreneur’s business and individual credit scores can be very different.

The Advantages

Considering that small business credit is distinct from personal, it helps to safeguard an entrepreneur’s personal assets, in case of a lawsuit or business insolvency.

Also, with two distinct credit scores, a small business owner can get two different cards from the same vendor. This effectively doubles purchasing power.

Another advantage is that even startup ventures can do this. Heading to a bank for a business loan can be a recipe for frustration. But building company credit, when done right, is a plan for success.

Individual credit scores are dependent on payments but also other considerations like credit utilization percentages.

But for company credit, the scores actually only depend on whether a small business pays its debts timely.

Learn more here and get started toward building business credit attached to your company’s EIN and not your SSN.

The Process

Building company credit is a process, and it does not happen without effort. A business needs to actively work to develop company credit.

That being said, it can be done easily and quickly, and it is much quicker than building personal credit scores.

Merchants are a big part of this process.

Performing the steps out of sequence will result in repetitive rejections. Nobody can start at the top with small business credit. For instance, you can’t start with retail or cash credit from your bank. If you do, you’ll get a rejection 100% of the time.

Start a New Business in New Hampshire – Small Business Fundability

A small business must be fundable to credit issuers and merchants.

That’s why, a business will need a professional-looking web site and email address. And it needs to have website hosting bought from a company such as GoDaddy.

Plus, business phone and fax numbers ought to have a listing on ListYourself.net.

Likewise, the company phone number should be toll-free (800 exchange or comparable).

A business will also need a bank account devoted solely to it, and it must have every one of the licenses necessary for operation.

Learn more here and get started toward building business credit attached to your company’s EIN and not your SSN.

Dealing with the Internal Revenue Service

Visit the Internal Revenue Service website and obtain an EIN for the small business. They’re totally free. Pick a business entity like corporation, LLC, etc.

A small business can get started as a sole proprietor. But they will most likely wish to change to a sort of corporation or an LLC.

This is in order to lessen risk. And it will maximize tax benefits.

A business entity will matter when it concerns tax obligations and liability in case of litigation. A sole proprietorship means the entrepreneur is it when it comes to liability and tax obligations. Nobody else is responsible.

Sole Proprietors Take Note

If you run a small business as a sole proprietor, then at least be sure to file for a DBA. This is ‘doing business as’ status.

If you do not, then your personal name is the same as the company name. As a result, you can find yourself being directly accountable for all company debts.

Plus, according to the Internal Revenue Service, by having this arrangement there is a 1 in 7 chance of an IRS audit. There is a 1 in 50 possibility for corporations! Prevent confusion and substantially decrease the odds of an Internal Revenue Service audit as well.

Instigating the Business Credit Reporting Process

Start at the D&B web site and obtain a free D-U-N-S number. A D-U-N-S number is how D&B gets a small business into their system, to produce a PAYDEX score. If there is no D-U-N-S number, then there is no record and no PAYDEX score.

Once in D&B’s system, search Equifax and Experian’s websites for the business. You can do this at fastcs.wpengine.com/reports. If there is a record with them, check it for correctness and completeness. If there are no records with them, go to the next step in the process.

By doing so, Experian and Equifax will have something to report on.

Vendor Credit Tier

First you need to build trade lines that report. This is also known as the vendor credit tier. Then you’ll have an established credit profile, and you’ll get a business credit score.

And with an established business credit profile and score you can begin to acquire credit in the retail and cash credit tiers.

These kinds of accounts often tend to be for the things bought all the time, like marketing materials, shipping boxes, outdoor work wear, ink and toner, and office furniture.

But first of all, what is trade credit? These trade lines are credit issuers who will give you starter credit when you have none now. Terms are in most cases Net 30, rather than revolving.

So, if you get an approval for $1,000 in vendor credit and use all of it, you will need to pay that money back in a set term, like within 30 days on a Net 30 account.

Details

Net 30 accounts need to be paid in full within 30 days. 60 accounts have to be paid in full within 60 days. In contrast to with revolving accounts, you have a set time when you have to pay back what you borrowed or the credit you used.

To start your business credit profile properly, you need to get approval for vendor accounts that report to the business credit reporting bureaus. Once that’s done, you can then make use of the credit.

Then repay what you used, and the account is on report to Dun & Bradstreet, Experian, or Equifax.

Vendor Credit Tier – It Helps

Not every vendor can help like true starter credit can. These are merchants that will grant an approval with very little effort. You also want them to be reporting to one or more of the big three CRAs: Dun & Bradstreet, Equifax, and Experian.

You want 5 to 8 of these to move onto the next step, which is the retail credit tier. But you may need to apply more than once to these vendors. So, this is to prove you are responsible and will pay on time.

Retail Credit Tier

Once there are 5 to 8 or more vendor trade accounts reporting to at least one of the CRAs, then progress to the retail credit tier. These are service providers which include Office Depot and Staples.

Only use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, use the company’s EIN on these credit applications.

One such example is Lowe’s. They report to D&B, Equifax and Business Experian. They need to see a D-U-N-S and a PAYDEX score of 78 or more.

Fleet Credit Tier

Are there 8 to 10 accounts reporting? Then move onto the fleet credit tier. These are companies such as BP and Conoco. Use this credit to purchase fuel, and to fix, and take care of vehicles. Just use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, make sure to apply using the small business’s EIN.

One such example is Shell. They report to D&B and Business Experian. They want to see a PAYDEX Score of 78 or more and a 411 company telephone listing.

Shell may claim they want a particular amount of time in business or profits. But if you already have enough vendor accounts, that won’t be necessary. And you can still get approval.

Learn more here and get started toward building business credit attached to your company’s EIN and not your SSN.

Cash Credit Tier

Have you been sensibly handling the credit you’ve gotten up to this point? Then move to the cash credit tier. These are businesses such as Visa and MasterCard. Only use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, use your EIN instead.

One example is the Fuelman MasterCard. They report to D&B and Equifax Business. They need to see a PAYDEX Score of 78 or better. And they also want you to have 10 trade lines reporting on your D&B report.

Plus, they want to see a $10,000 high credit limit reporting on your D&B report (other account reporting).

Plus, they want you to have an established business.

These are companies such as Walmart and Dell, and also Home Depot, BP, and Racetrac. These are commonly MasterCard credit cards. If you have 14 trade accounts reporting, then these are doable.

Start a New Business in New Hampshire – Monitor Your Business Credit

Know what is happening with your credit. Make certain it is being reported and deal with any mistakes as soon as possible. Get in the habit of checking credit reports and digging into the specifics, and not just the scores.

We can help you monitor business credit at Experian and D&B for 90% less than it would cost you at the CRAs. See: fastcs.wpengine.com/monitoring.

Update Your Data

Update the relevant information if there are inaccuracies or the data is incomplete.

Fix Your Business Credit

So, what’s all this monitoring for? It’s to dispute any mistakes in your records. Mistakes in your credit report(s) can be taken care of. But the CRAs often want you to dispute in a particular way.

Disputes

Disputing credit report errors usually means you send a paper letter with copies of any proofs of payment with it. These are documents like receipts and cancelled checks. Never mail the originals. Always send copies and retain the originals.

Fixing credit report inaccuracies also means you specifically spell out any charges you challenge. Make your dispute letter as crystal clear as possible. Be specific about the problems with your report. Use certified mail so that you will have proof that you sent in your dispute.

A Word about Building Business Credit

Always use credit sensibly! Don’t borrow more than what you can pay back. Keep track of balances and deadlines for payments. Paying in a timely manner and fully will do more to raise business credit scores than virtually anything else.

Growing business credit pays. Good business credit scores help a business get loans. Your lending institution knows the small business can pay its debts. They understand the company is authentic.

The small business’s EIN links to high scores and credit issuers won’t feel the need to ask for a personal guarantee.

Business credit is an asset which can help your small business in years to come.

Learn more here and get started toward opening a new business in New Hampshire.

Want to start a new business someplace else in America? Then check out our handy guide to starting a business in any state in the country.

New Hampshire’s Response to COVID-19 

Here’s what New Hampshire is doing about COVID-19. On March 17, Governor Chris Sununu banned all landlords from starting eviction proceedings and prohibited all foreclosures during the state of emergency initiated in response to COVID-19. 

The Governor also barred utilities (electric, gas, water, telephone, cable, fuel and internet providers) from disconnecting service for nonpayment. 

New Hampshire small businesses are eligible for disaster loans from the SBA. 

See: nhpr.org/post/soften-economic-blow-covid-19-sununu-expands-scope-unemployment-benefits#stream/0

See also: nhlra.com/covid-19-guidance–resources.html