I’m commonly asked which corporate entities can build business credit. The answer is simple, ALL entities can build business credit. You can build business credit with almost any corporate entity type.
But if you truly want to separate business credit from personal credit your business must be a separate legal entity not a sole proprietor or partnership When you own a corporation or LLC, you are not part of the corporation, you and the corporation are separate. Once you are separate from your corporation, then you can truly separate your legal liability. So even though any corporate entity can build business credit, only LLCs and corporations can get business credit with no personal guarantee and no personal liability, all because with those entitles the business owner is truly separate from the business. We can help you obtain money and credit for your business by offering the Business Finance Suite, while radically increasing your company revenue in the process. Let us know how we can help.
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When you are trying to get funding for your business through loans or investors, there are quite a few variables to think about. Today we'll cover a few of the big ones here and now.
Funding Tip #1: Funding needs should be clear, well planned, and thoroughly detailed. The meaning here is quite simple. If you are vague and unclear about what it is you need funding for, your chances of getting the funding are close to nil. For the sake of your business, and for the sake of getting funding, it's important to know exactly how you plan to use the money and how using the money will benefit your business. Also, it is important to know clearly how the bank or investor will get a return on their investment. Funding Tip #2: Collateral is Required. Banks can't lend money to startups that don't have anything to pledge as collateral. Collateral could be inventory, equipment, or other business assets. Funding Tip #3: Lenders like personal guarantees. A personal guarantee is like a secondary collateral for a loan in the bank's eyes. Providing a personal guarantee is required for many loans, and will improve your chances of getting many others. Funding Tip #4: Outside investors aren't always the best answer. A lot of people think about angel investors and venture capitalists with high hopes, but getting funding from outside investors has drawbacks too. For one thing, by using "equity funding" you are selling part of your business. In other words, you don't own the whole thing anymore. A lot of people fail to realize this, and it has important implications that you shouldn't ignore. For this and other reasons, funding through debt can sometimes be favorable for small businesses. Obviously caution must be taken when using debt as funding, too, but the big advantage is that you maintain control and ownership of your own company. Funding Tip #5: The most common funding sources for startups are "inside" jobs. When starting out, most new businesses rely on personal savings and personal credit. Some startups start with personal credit cards, others with home equity loans or home equity lines of credit. In any of these cases, the person starting the business is taking on substantial risk. This isn't necessarily bad in and of itself, but do remember this: STARTING with personal credit is one thing, CONTINUING with it when you no longer need to is something else entirely. It's one thing if you have to lean on your personal credit when you are just starting out, but once your business begins to stand on its own two feet it should start depending on its own credit too. Opening a business is a huge undertaking, but once you have built a successful, thriving company, you may be itching to take things to the next level. If you have already opened your own small business, you’re probably familiar with the application and repayment process for a business loan. Congratulations if you may have completely paid back your original loan already! However, some business owners don’t realize that loans aren’t only for people launching their first business. Indeed, commercial financing can also help successful business owners grow their business by expanding to new markets, hiring more employees, or upgrading their current equipment or retail space commercial financing and business loans can help you reach higher goals. It’s important to keep your customers happy, and a loan could provide the immediate capital you need for purchasing additional inventory or enhanced marketing. If you are successful and you’re outgrowing your current space, a loan could allow you to move to a better location or construct an expansion to your current property. A loan could also help launch a second location, possibly leading to franchising opportunities in the future.
If your business is starting to slow down or plateau, a small business loan could be just the financial boost you need to breathe fresh life into your company. With a little extra money, you could give your store a makeover or invest in cutting-edge technology to keep your company in the public eye. Many small businesses fail because they get stuck in a rut and refuse to change with the times. Stagnation is never healthy, so it’s important to continually update and enhance your business. Even successful small businesses rarely have enough extra funds to cover large purchases or investments. If you’re a savvy business owner faced with a great financial opportunity, taking out a loan could be the right move for the growth of your company. You may only need to take out a small amount for a specific purchase, or you may need to take out a larger amount for significant financial investments. If you’re confident that the new purchase or investment will increase your revenue, a loan may be the best option for your financial future. If you’ve just finished paying off your original business loan, it may be difficult to consider taking out money again. Fortunately, many of these loans offer short-term repayment options, so you don’t need to commit to a long-term loan if it’s not necessary. A loan may give you the freedom and opportunity to grow your small business responsibly, so small business owners should be aware of their options and open to the idea of investing a new sum of money into their company. But Banks Will Start to Raise Rates Soon.Economists expect the Bank Rate to rise in early to mid 2015 – but economists’ predictions have consistently missed the mark.
Mark Carney, governor of the Bank of England, has indicated repeatedly that interest rates will not rise until people and businesses begin to share in the economic recovery. This has not helped bring clarity, either. But there are signs that banks are already starting to price a rate rise into their deals, particularly fixed-rate mortgages. There are two main reasons for this. Firstly, cheap loans through the Government's Funding for Lending scheme (FLS) can no longer be used for mortgages. Secondly, the pricing of fixed rate mortgages is influenced by markets that reflect future interest rates, and today they price in a greater chance of rate rises than they did a few months ago. Five-year fixed rate mortgages have edged up from their record lows of 2.44pc in July 2013, to just under 3pc now. Savings rates are also slowly edging higher, although so far by disappointingly little. Savers have a long way to go before rates return to pre-crisis levels. Capital Economics believe rates will remain fixed at 0.5pc for at least a year. It is a forecaster worth listening to: most economists took years to grasp that the era of low rates was with us, repeatedly since 2009 predicting "rates to rise next year", but Capital Economics was far more dovish than the rest. Samuel Tombs, Capital's UK economist, said: "The MPC’s decision to leave interest rates on hold, marking five years since they reached their record low, is likely to be repeated many more times. With recent news suggesting the MPC’s estimate of spare capacity is too conservative, we think the sixth anniversary of 0.5pc rates will be marked next year. "While we do not like to blow our own trumpet too often, forgive us for recalling that we argued in 2009 interest rates could stay at 0.5pc for as long as five years in response to prolonged fiscal tightening, weak bank lending and a sluggish recovery. Indeed, we are one of the very few forecasters that never predicted a rate rise in this period. For instance, at the start of 2010 we were one of only two forecasters predicting that rates would still be at 0.5pc at the end of 2011." He says divisions are emerging on the Monetary Policy Committee with Martin Weale, a member, wondering whether pay growth may return meaning the need for a rate rise in the next year. But Mr Tombs says the recent rise in unemployment and the fall in inflation to 1.9pc are meaningful ammo for rate doves. He concluded: "The case for thinking that the recovery can continue for some time without prompting inflationary pressures to build has been strengthened by recent news. As a result, we continue to think that the MPC will be able to leave interest rates on hold until late next year." The fact that national parks are closed during the federal government shutdown might inconvenience some travelers, but it doesn’t threaten their livelihoods. But what if your small business relies on tourism near a park?
Several small businesses near Yosemite National Park fear they may have to shut down, NBC Bay Area says. Wildfires, and now the shutdown, have cut deeply into the number of available customers. Dori Jones, owner of a cafe, told the station she lost 75 percent of her business in peak tourism months because of the Rim Fire, and now she has to deal with the shutdown’s impact. “During the 1995 government shutdown when there was an 80 percent drop in lodging in and around Yosemite, the park lost roughly $300,000 a day, while surrounding communities lost hundreds of thousands more,” the website says. Even in areas without rampant wildfires, the shutdown could have dire consequences. Bicycle shop owner Fred Pagles, in Springdale, Utah, near Zion National Park, told NBC News his store could last only about a month if the shutdown continues, and he expects to lose several thousand dollars in the process. Another business owner in the area said he expects to lay off several employees in order to survive that long. It’s not just businesses dependent on national park tourism, either. Some companies that were in the process of seeking government loans are in trouble, The Wall Street Journal says. Even when the government starts back up, there will be a backlog of applications to process — and desperate businesses may have to turn to higher-interest loans in the meantime. Meanwhile, companies that contracted to provide services to the federal government are left with workers sitting on their hands. A survey of 100 small-business owners shows nearly half of them have already been hurt by the shutdown because of cancellations or reduced business, CNNMoney says. “And if the shutdown drags on, they said it could hurt 20 percent of their business.” The time for a small business to seek financing is not when they need it and are most desperate, but when their financials are looking the best and they appear not to need funding. September 27, 2013
This is a copy from the MoneyTalkNews Blog I found that is just too important to not pass on. By Trisha Sherven0 · The sales pitch on Fair Isaac’s myFICO website is simple enough: The FICO® Score is a number that summarizes your credit risk. Lenders use it to make credit decisions, such as the interest rate you get when you apply for a loan. Being able to see what potential lenders see: That’s why so many Americans are willing to pony up $19.95 to see their credit score. And if you want to see it from each of the big three credit reporting agencies, you’ll pay three times, shelling out nearly $60. When it comes to credit, the stakes are high. According to FICO, a low score — say, 620 — means paying 5.7 percent on a 30-year mortgage loan. A great score — say, 760 or higher — could qualify you for a much lower rate of 4.1 percent. Borrow $200,000, and over the life of the loan, the lower interest rate will save $52,000 in interest — enough to put your kids through college. So paying to see your credit score seems like money well spent. Until, that is, you discover you’re paying for a false sense of security, because the score you’re buying may not resemble the one potential lenders see. How FICO scores work FICO uses a proprietary formula to calculate your three-digit credit score, which ranges from 300 to a perfect 850. It will tell you the basics of how your credit score is determined (you can read about it here) but in the end it’s kind of like the original KFC recipe: You can figure out the basic ingredients, but you couldn’t duplicate it yourself. FICO isn’t just selling credit scores to consumers. It’s also marketing them to lenders. But when your potential lender buys a FICO score, the lender has a lot of industry-specific scores to choose from. For example, there are scores customized for mortgage lenders, car dealers, credit card issuers and many others. According to Consumer Reports, FICO serves up 49 different scores to lenders, but only two to consumers. So when you apply for a loan, it’s likely your lender will be looking at a score that’s different from the one you buy. In short, you might be paying for original recipe and your lender might be ordering extra crispy. Why you should be mad The Consumer Financial Protection Bureau studied 200,000 credit files from each of the three major credit reporting agencies. One finding: In 19 percent to 24 percent of cases, consumer scores differed from lender scores sufficiently to land the consumer in an entirely different credit category. Result? You could think you’re in the highest category, only to find you’re not. And as we pointed out above, a lower score could cost you thousands in extra interest, especially on large loans. We contacted FICO to ask how a consumer could rely on a FICO score, given the government findings. Here’s part of their response: It’s true that there are multiple versions of the FICO Score, including versions for different types of credit products such as mortgages, credit cards and auto loans. But these versions are all based on the same underlying mathematical blueprint as the score sold to consumers on myFICO.com. So while a person’s FICO Score can vary depending on which version the lender is using to make a decision, it’s by far the most reliable and accurate depiction of a person’s credit health they can find anywhere, and is the best way to help gauge how lenders will view a consumer’s creditworthiness. That’s not the entire response, but nothing they provided acknowledged the problem: People are being sold FICO credit scores under the assumption they’re identical to those being used by lenders, and they’re not. Furthermore, FICO knows this and isn’t disclosing it. This is why many consumer advocates, including Money Talks News and Consumer Reports, are calling for changes. Here’s what Consumer Reports said in a recent article called ”Don’t Buy Useless Credit Scores“: We see no point in buying any consumer credit scores, given that they’re not the same ones used by lenders. But if you do, and a lender or insurer later tells you your real score is lower or higher, do what you’d do with any product that doesn’t deliver: Demand a refund. Consumer advocates aren’t the only ones complaining. So are lawmakers. The Fair Access to Credit Scores Act of 2013 is a bill now in Congress that would amend the Fair Credit Reporting Act to allow consumers a free, accurate credit score once a year, along with their free annual credit report from AnnualCreditReport.com. Right now, federal law requires that you can see the actual credit score a lender sees and not be charged: · If you were turned down for credit. · If you got a higher interest rate on a loan because of your score. · If you received unfavorable terms on a credit card. Here’s what the proposed law would do, according to a press release from the bill’s sponsors: This bill would expand upon that provision to provide all consumers with an annual credit score to complement their free annual credit report. Also, this measure would ensure that the free annual credit score received by consumers is a reliable score actually used by lenders, rather than an “informational score” of unknown reliability. It would give consumers access to all scores generated in the previous year and stored in their credit files – information that lenders have accessed about the consumer’s individual creditworthiness – instead of consumers seeing only those scores that resulted in “adverse actions,” as provided by current law. What you can do In addition to contacting your elected representatives, there are ways you can fight back: · Avoid buying scores, and don’t rely too heavily on those you pay for. · As Consumer Reports suggests, demand a refund if the score you bought varies widely from the one your lender uses. · Before you agree to a loan or insurance rate, ask to see the score the lender used. · Check your credit in other ways, like the free annual credit reports you can get at AnnualCreditReport.com. Get a picture of your credit throughout the year by choosing a different credit bureau report every four months. · Support the Fair Access to Credit Scores Act of 2013 by clicking here to sign a petition. Do you think we should get free, accurate credit scores? How do you feel about paying for a score that may not be reliable? Sound off on our Facebook page. Read more at http://www.moneytalksnews.com/2013/09/27/that-20-fico-credit-score-isnt-just-expensive-it-may-be-useless/#sgcgwLxEYBhisZDX.99 Dun & Bradstreet is the primary company used to evaluate business credit and issue a credit score known as Paydex. There are also other companies that provide similar credit evaluation services to businesses based on their independent databases.
One of them is Equifax who offers a business scoring credit model knows as Equifax Small Business Enterprise/ Equifax Small Business Credit Risk Score. Equifax, one of the three major consumer credit rating bureaus, is now providing business credit evaluations for over 22,000,000 small businesses and corporations to detect early signs of trouble by monitoring key customers, suppliers & partners. Equifax's model is designed for companies that provide goods and services to small businesses. The score was created to enhance risk assessment throughout the account lifecycle by predicting the probability of a new or existing small business customer becoming seriously delinquent on supplier accounts, or bankrupt, within a 12 month period. Credit scores range from 101-816 with a lower score indicating a higher risk for serious delinquency. There are also four reason codes which indicate top factors that impact the credit score for a better understanding of risk. Equifax does provide both consumer and business credit risk models, but there are considerable differences between the two. You can get setup with Equifax credit monitoring through our Business Finance Suite. There is a cost for enrolling with them, although you can get free access to your Experian Smart Business data in our Business Finance Suite. Contact me today to get access to your very own Business Finance Suite and start getting all the money you need for your business while building an exceptional business credit profile.. Get approved for up to one-hundred and fifty thousand dollars in funding for your business with our business revenue financing program.
Our Unsecured business revenue financing is perfect for a business that has consistent revenue that is verifiable through business bank statements. You do not need good credit to be approved. Nor do you need to have any collateral to qualify. If your business has steady revenue, you might qualify right now. Approval amounts range from fifty-thousand dollars to one-hundred and fifty thousand dollars and are based on the amount of annual revenue your business has now. You can typically be approved for revenue financing for as much as 4-8% of your total annual income. Most payback terms range from 3-18 months, and your interest rate and payments are fixed, helping insure your payments are predictable from month to month. You can also renew your loan and secure even more money once your initial loan is paid down by 45%. Business revenue financing is much easier to qualify for than conventional loans. You can easily be approved if your business has been open for more than one year and if your business earns over $150,000 in annual revenue. Our business revenue financing program is much more affordable than high risk merchant advances. And unlike merchant advances, with our revenue financing you will not need to switch your merchant accounts. And the interest you pay is 100% tax deductible. This makes it even more affordable for you to access the money you want and need to grow your business. You can qualify for our business revenue financing program even if you have challenged personal credit now. Unlike SBA loans which require a 620 credit score to qualify, with revenue financing you can be approved with a FICO credit score as low as 500. Business revenue financing is a perfect way for you to obtain business financing quickly and with little hassles, even if you have challenged personal credit now. Our Inventory Financing is a perfect way for you to get money for your business if you own more than $150,000 in inventory now.
With inventory financing you can use your inventory as collateral and quickly be approved even if you have personal credit challenges now. Plus you get to enjoy generous payback terms and loan amounts, insuring your payments are affordable. You can be approved for one hundred and fifty thousand or more in inventory financing with us. Your approval amount will be based on the actual value of your inventory. You can typically be approved for financing up to 50% of the value of your actual inventory. And interest rates on this program are very low, typically as low as 2% monthly on the outstanding loan balance. Plus you can be approved in 3 weeks or less. To be approved you should have at least $300,000 in inventory. No jewelry, apparel, highly seasonal items, or high tech items subject to rapid obsolescence will be accepted. Our Inventory Financing is a perfect way for you to get money for your business if you own more than $150,000 in inventory now. Your money is waiting, contact me directly so we can get you access to your own finance suite and start putting $$$ in your pocket today. With 30 core programs and thousands of participating lending sources we have or possibly can create a program that fits your needs. This is a re-blog. It was written by Dan Danner, Published June 17, 2013 |
FoxNews.com During National Small Business Week, politicians and bureaucrats give a lot of lip service to small business. But you might wonder what the small-business community itself might say if they themselves had the podium this week. Here’s what I think they would say: I’m a risk taker — but my risks are purposeful. I’m different from a lot of folks, because I take the risks and I accept the consequences. Scientists who study risk-takers include “people who start a business” in a category that includes mountain climbers, Navy SEALs and explorers. We aren’t adrenaline junkies, but we’re brave enough to risk everything we own to start a business that we think will serve our community and allow us to be our own boss. I work seven days a week. There is no such thing as a day off for a small business owner. Especially when the business is really small — i.e. just a few or no employees. If we want to take a day off or go on vacation, the business itself must temporarily close, and that can be more costly than we can afford. My employees are my family. There are an estimated 2.5 million true “family businesses” in the United States. That estimate includes all employing businesses that have two or more family members as owners, and two or more adult family members who actively participate as manager, employee, or as-needed volunteer. As for the non-blood relatives who work for me? I’ll put it this way: I know the names of my employees’ spouses and kids. I care about their lives. It’s personal. When money is tight, I get paid last; employee payroll comes first. Don’t ever assume that a business owner is “rich.” You may be talking to someone who hasn’t cut herself a paycheck in months because that’s what has to be done to make sure employees get paid. You call it ‘income;’ I call it ‘cash flow.’ Yes, small-business owners pay their taxes like individuals (versus like big corporations who get a lot of tax breaks), but there is a big difference between our business income and your paycheck. Our income feeds our families, yes, but it also needs to be managed carefully for those times when sales are slow, the economy is dragging, or to re-invest in the business and create new jobs. My business is the future of my family My business is my retirement and it is my legacy to my kids; I hope to pass it on to them. I create about two-thirds of net new jobs, and more… Historically, small firms create the lion’s share of net new jobs in the U.S. Collectively, they are responsible for almost half of the non-farm GDP and employ nearly half of the private-sector workforce. All of this means I should be more than just a talking point, but politicians can make me sound more like a message and less like the economic powerhouse that I am. I’m an innovator. According to the Small Business Administration’s Office of Advocacy, of high patenting firms (15 or more in a 4-year period), small businesses produce 16 times more patents per employee than large patenting firms. I’m a philanthropist. In any given year, over ninety percent of small employers contribute to their community through volunteering, in-kind contributions, and/or direct cash donations. I give to the Little League, buy uniforms for the high school band and advertise in the yearbook every year. I’m a good neighbor. According to Gallup, only the U.S. military outranks small business when it comes to groups of people they trust Congress, for example, is in last place on that list). The cost of health insurance is crushing me. Buying health insurance for myself and my employees has been difficult, literally, for decades. Obamacare promises to make the cost much, much higher. When I see premium quotes these days, I’m beyond saying “uncle!” and feeling more like saying “I quit!” Fortunately, it’s not in my nature to quit. I love what I do and I wouldn’t have it any other way. Being my own boss, doing it the way I want to, providing jobs and contributing to my community…this the very definition of freedom, and it is the American dream. Is it hard work? You bet it is. But I love it. Once you get to know the people behind the small businesses in your community, you’ve taken the first step toward supporting these brave men and women. Dan Danner is president and CEO of the National Federation of Independent Business (NFIB). |
Dan GarciaTrevana Properties is a placement company working with a variety of hedge funds, REIT's, commercial banks, specialty boutique lenders, private investors and other funding sources not widely known to the general public. Archives
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