New Business Credit Score Do’s and Don’ts

Breathe Life into Your Business with Your New Business Credit Score

Are you trying to get a new business credit score? Looking to ditch an old one and get a bright, shiny new one? Maybe you don’t have one at all yet and you need to know how to get one. Never fear. We have all the dos and don’ts to help you build a business credit score either from scratch, or by improving old, dented one.

Why Do I Need a Business Credit Score at All?

This is actually a pretty common question. A surprising number of people do not realize that their business can have credit that is not related to their personal credit. The fact is, not only can your business have its own credit, but it should. The reasons for this are many. Most importantly, keeping your business credit and personal credit separate protects both your personal and your business finances from being affected by each other.

In addition, business credit cards often have higher limits, meaning they can handle the higher spending needs most businesses have. If you tried to finance all of your business expenses on personal credit cards, you would likely keep balances at or near your personal credit limits. This would increase your debt-to-credit ratio, which in turn has a negative affect on your personal credit score.

So, what are the major dos and don’ts for a new business credit score?

Discover our business credit and finance guide, jam-packed with new ways to finance your business without emptying your wallet.

Don’t Operate Under Personal Information

If you are running your business as a sole proprietorship, or a partnership, you are going to have a problem getting a business credit score. If your business has the same phone number, address, and email address as you, that’s even more of an issue.

Your business has to be separate from you, and here is why. If you do not ensure your business is recognized as a separate entity from yourself, all of your business transactions are just going to go straight to your personal credit report. Here is how to keep that from happening.

Get Incorporated

The first step is to incorporate. This is the first step to separating your business credit from your personal credit. You have a few options.

C Corp– This is the most definitive separation, but it is also the most complicated and expensive. Before choosing this option, be certain there are reasons other than establishing business credit that it needs to be done. If it isn’t necessary for some other reason, there are other, less complicated, and less costly options.
S Corp– This option basically offers the same separation as the C Corp, but taxes are paid at the personal level, rather than requiring the business to be taxed as well, resulting in double taxation. It is also cheaper than incorporating as a C Corp. If you aren’t required to file as a C corp, this is a good alternative.
LLC– forming a Limited Liability Corporation results in less liability, thus the name, and offers enough separation to serve the purpose of establishing business credit. If you are not required to be a C Corp or S Corp, this is the easiest and most cost-effective way to create the separation of business and personal credit that you need.

Separate Contact Information

Your business needs its own phone number. This way, when you apply for credit, you can enter contact information that is separate from your own. When information is reported to agencies, sometimes the phone number is an identifying factor. If you and your business share a number, that just decreases the level of separation. The business phone number should be from a toll-free exchange.

There also needs to be a separate business address and email address. They cannot be the same as your personal address and email address. Also, the business email address should not be from Yahoo, Gmail, or any other free email service. It should have the same URL as your professional website. Don’t have a professional website? You need to get one of those too.

Be sure your business contact information is listed in the directories under the business name.

Business Bank Account

If you are running all of your business transactions through your personal bank account, stop. You need a dedicated business bank account that you use for all business transactions. This helps with the separation of your business from yourself, but it will also help you keep business expenses separate from personal expenses for ease during tax time.

Don’t Use All of Your Available Credit

When building business credit, the first thing you do is work through the credit tiers. The goal is to get as many accounts reporting consistent, on-time payments from your business name as possible. This means you get 8 to 10 accounts in the vendor credit tier, move up and get 8 to 10 accounts in the retail credit tier, and so on through the fleet credit tier, and finally the cash credit tier. You can find out more about the credit tiers and how the business credit building process works here.

While this achieves the purpose of building business credit, it also means you have a lot of business credit out there. Resist the temptation to use it all at once. You have to pace yourself. You want to make payments on each account, but you cannot carry balances at or near the limit on all those cards. If you do, your debt-to-credit ratio will be extra high, resulting in a negative impact on your credit report.

Do Get and EIN and a DUNS Number

These are identifying numbers for your business. You must have both of them to get business credit.

EIN

This is an identifying number for your business that functions much as your SSN does for you personally. Once you have it, you will use it in place of your SSN when you apply for credit in the name of your business. Your SSN should only be used for identity verification for fraud prevention. You may have to provide your birthdate for this reason as well, but not for the purpose of checking credit.

If you follow the other steps for establishing business credit and skip this one, accounts could end up on both reports. You don’t want that.

The process of applying for and EIN is easy. The IRS has an online form, and as soon as all the information is verified you receive your number. It typically happens almost immediately.

Get a DUNS Number

Dun and Bradstreet (D&B) is the largest and most widely used business credit reporting agency. They issue each business on file a 9-digit DUNS number, and you will not have a business credit file with them until you have this number. Application is easy and free on their website. Beware, they will try to sell you a lot of different products, but you only need the DUNS number and it is definitely free.

Do Work with Members of the Small Business Finance Exchange

Working with SBFE members can do more than help you get a new business credit score. Here are 4 ways working with members of the Small Business Finance Exchange can help your business, including that credit score you are working on. Find out more about the Small Business Finance Exchange and what they do here.

Build Business Credit

When you do business with members of the Small Business Finance Exchange, you know your information is being reported. That builds business credit. How do you know if your lender or vendor is a member? Ask them. If they are not, considered mentioning that they become a member. There are enough members in the network however, that it should not be hard to find one.

Grow Your Business

By working with SBFE members, you know that when creditors receive your information, they get a complete credit picture. If you are making your payments and working to build strong business credit, the additional data they receive can only help you.

Discover our business credit and finance guide, jam-packed with new ways to finance your business without emptying your wallet.

Increase Funding Options

The data available about your business from the Small Business Finance Exchange could open up additional funding opportunities that may not be available to you otherwise.

Help Making Wise Credit Decisions

If you are a small business that lends money to other businesses and has the ability to report that information, you can join the SBFE yourself. You will gain access to information about borrowers that is available exclusively to members. This information can help you make better decisions about your own business lending.

Do Monitor Your New Business Credit Score

Once you have business credit, you need to watch it to ensure it stays strong. If you already have a score and want a newer, stronger score, that is even more reason to monitor your credit report. Make certain all accounts are reporting accurate information, and deal with any mistakes as soon as you can.

You can monitor your business credit by getting reports from the credit reporting agencies directly, but it’s pricey. To monitor with D&B go to: www.dandb.com/credit-builder. For monitoring with Experian, visit: www.smartbusinessreports.com/Landing/1217/. At Equifax, you can monitor your account at: www.equifax.com/business/business-credit-monitor-small-business. Experian and Equifax cost about $19.99; D&B ranges from $49.99 to $99.99.

Another option is to use a credit monitoring service like the one offered by CreditSuite. We can help you monitor business credit at Experian and D&B for only $24/month.

None of It Matters If You Don’t Make Your Payments on Time

Whether you are starting from scratch or trying to do some repair work to get a new business credit score, none of it matters if you do not make your payments on time. This is an absolute necessity. If you are inconsistent or late with payments, you will not only undo any good, but you may actually end up in worse shape than before.

You have to have a plan in order to be successful with you new business credit score.

Here are some bonus Dos and Don’ts to help with this:

Do budget for credit payments. It is easy to forget this or let it get out of control quickly. As you grow your business credit score, you are going to have a lot of new credit available. You already know you do not have to use it all, but you have to be sure to budget and plan to pay for what you are using.
Do know how much you can handle in debt payment each month before taking on new debt. If you are considering taking on debt payments of $300 per month but you only have $200 per month in cash available for payments, you are going to have a problem.
Don’t use debt to pay debt. Of course, there could be times, such as 0% interest on balance transfer opportunities, that it may be useful. Make it an exception rather than the rule however. It isn’t a good habit to get into.

Discover our business credit and finance guide, jam-packed with new ways to finance your business without emptying your wallet.

Do use credit wisely. Yes, you need the accounts in the beginning for your new business credit score to grow, but there is no need to buy things you do not need. If what you are buying on credit will not grow or expand your business, leave it alone. It’s ridiculous to buy 7 boxes of latex gloves on credit if you will not use them in the course of your regular business.
Don’t stop monitoring your credit. Just once doesn’t do it. Credit monitoring needs to be an ongoing process, not just to catch mistakes, but so that you know what your credit score can handle at any given time.
Do consider automating payments. Most creditors offer some sort of direct draft option. Just be sure the funds are there!

Getting and Keeping a New Business Credit Score is Vital for Your Business

If you have bad business credit, or no business credit at all, you definitely need a new business credit score. It won’t happen on its own however. You have to be intentional. It isn’t hard, but there is a definite process that takes some time. If you are willing to put in the time and trust the process though, the resulting business credit score could open a world of possibilities for your business.

The post New Business Credit Score Do’s and Don’ts appeared first on Credit Suite.

Start Sparking Business Innovation –10 Brilliant Business Tips of the Week

The Hottest and Most Brilliant Business Tips for YOU – Start Sparking Business Innovation and More

Our research ninjas at Credit Suite smuggled out ten amazing business tips for you! Be fierce and score in business with the best tips around the web. You can use them today and see fast results. You can take that to the bank – these are foolproof! You can start sparking business innovation right now.

Stop making stupid decisions and start powering up your business. Demolish your business nightmares and start celebrating as your business fulfills its promise.

And these brilliant business tips are all here for free! So settle in and scoop up these tantalizing goodies before your competition does!

#10. Text Your Way to Marketing Success

Our first jaw-dropping tip is all about SMS Marketing. Opt In Monster says getting permission is vital, and so is providing clear instructions for how customers can opt out. This totally works for us. After all, if you can’t easily get rid of texts, they’re going to end up costing you in messaging and/or data.

Plus if you do any business at all in Europe, GDPR may very well require that you do both.

If nothing else, it’s good practice, particularly for avoiding annoying your customers and prospects.

Those are the last people you want to frustrate and annoy.

Do U Hate Slang? So Do I N U Shudnt Do It in SMS Mktg

Oh God, my writer/editor brain can’t take it.

Please don’t do this to your customers and prospects, not even if they’re teens and tweens. For the younger set, you’ll probably look truly inauthentic. For the older (ahem) among us, you’ll look unprofessional.

And so much slang and abbreviating can easily backfire as abbreviations and language evolve over time. You definitely don’t want to look and sound like yesterday’s news.

#9. New Brand, Who Dis?

The next awesome tip is about doing rebranding right. Word Stream notes you’ll even have to change and fix your online advertising campaigns. After all, let’s say Exxon changed its name from Esso this week, rather than in 1972.

They would need to update any ads. After all, it would be kind of embarrassing to have a great advertisement out there which touted the products sold by the old brand.

The article is great – so we suggest reading it in its entirety – and it gives detailed advice on how to fix things.

But then there’s another thing, not in the article.

Records Are Made to be Broken – and Updated

We talk about it all the time here. Congruency.

Your business name needs to be the same everywhere. Yelp, your business licenses, your phone listings, your IRS records – you name it.

Why?

Because lenders are going to hunt for your information online. And if they can’t find something, they’ll assume it doesn’t exist – and are far, far more likely to deny your loan application. And they’re not going to stop to consider the myriad ways your business could be listed online.

So change things in all of those places, too.

If you are as passionate about succeeding in business as we are, please help us spread the word about how to take the plunge and save time and money – and your sanity! From sparking business innovation to customer retention, this post has it all.

#8. Hello? Is There Anybody Out There? Just Nod If You Can Hear Me

Our following life-changing tip concerns increasing online survey response rates. G² lays it all out for us. We all know that responses to online surveys could be better. Even if yours are bona fide amazing, it never hurts to try to improve things.

So, how do you do that?

Skip Logic is Not Some Guy’s Stage Name (Although Maybe It Should Be)

Our absolute fave tip was using what’s called ‘skip logic’ (no, that’s not some guy’s name).

Skip logic is when an online survey can skip certain questions based upon previous answers.

For example, let’s say your survey is about people’s pets. Maybe you sell pet food or toys or the like. Probably one of your first questions, after demographics, will be which type of animal people have.

Hence, based on learning that a person has a goldfish, you wouldn’t ask them about leashes and walks, because you can’t take a goldfish for a walk. This is a truly terrific concept, because it reduces frustration immediately. How many times have you had to type ‘not applicable’ in the middle of a survey? And how many times have you just abandoned one because it didn’t appeal to you?

With skip logic, those frustrations should diminish if not downright go away entirely.

Branches Aren’t Just For Trees Anymore

A similar technique is branching, and it’s something many of us have seen in websites. That is, if you get a question with two or more answers and then if you click on one or the other, you get a different experience. There’s a similar vibe going on with branching for surveys.

The beauty of branching is you can lead your survey respondents down a progressive set of questions.

So let’s go back to our pets survey example for a moment. If the respondent says they have a dog, then the next logical question might be about the dog’s age or breed or level of training. If they say they have a cat, then questions could be about age or breed or whether this is an indoor or an outdoor cat.

For a big dog, the survey might go onto questions about how much of a chewer the dog is, or whether the dog is left outside for long time periods. For a smaller dog, the next set of questions might ask about how cold the dog gets at various temperatures (Italian greyhounds, for example, are really skinny and get cold a lot faster than Boston terriers generally do).

For an indoor cat, the next set of questions might be about how much scratching the cat does. Maybe for an outdoor cat, the next questions could be about if there are wild animals in the area that might steal cat food left out (raccoons do this a lot).

Either way, your survey respondent is bound to feel you’re asking about what matters the most to them.

#7. We’re Just Trying to Keep Our Customers Satisfied

For our next sensational tip, we looked at customer retention. Small Business Bonfire says that retaining customers is vital for a number of reasons, not the least of which that it costs a lot less than drumming up new business.

Consider this – your current customers already know and trust you. And you already know they love and need your product and service, and they see the need for it. So why wouldn’t you want to make and keep them happy?

Our favorite tip was about responsiveness. Seriously. When a customer has a question for you, do you respond as soon as possible? And if you don’t know the answer, do you at least say you’re working on it? Yes, even with difficult customers.

Neglected customers won’t be your customers for very long.

#6. Put Your Blog to Work

This tip is so cool, and it works! Freelancers Union tells us all about turning your blog into a lead generator. Now, keep in mind, the article is written from the perspective of a freelancer. But the same principles still apply.

There’s great information on both SEO and user experience. We suggest you read the whole thing to get the full experience, as it were.

But the point to highlight is all about the essential pages. They make sense – your home and about pages are vital! Plus your services page, otherwise no one has any idea of what you do and offer. Similar idea for any business, even if your ‘services page’ is several pages, and it’s for sales of goods rather than services.

Make it painfully clear what you do, what it costs, and what it includes. Don’t make prospects hunt for this information. They’ll just go to a competitor who doesn’t make them jump through those sorts of hoops.

Ouch.

#5. Today is the Day to Start Sparking Business Innovation

Grab this mind-blowing tip while it’s hot!

And by hot, we mean you’ve got the tinder and the match – it’s time to start sparking business innovation in your company.

Small Biz Trends says when it comes to sparking business innovation and getting your employees to start creating, it all depends on the stage the business is in.

For Startups, it’s All About the Benjamins

Not surprisingly, startups need cash. Yesterday. And so this tip focuses on getting the funds to light that creativity fire and start sparking business innovation.

Their two ideas where crowdfunding and government funding, like from the Small Business Innovation Research Program (SBIR). We particularly love the idea of crowdfunding. If Kickstarter, GoFundMe, and other similar campaigns reward anything, it’s usually creativity.

So toss some of your startup’s ideas against GoFundMe’s wall, and see if they stick.

During the Growth Stage, Structure Matters

For companies which are past the startup stage, money is less of an urgent need. Hence for them, the way to be creative is to bake it into the company’s culture and structure. This will help not only now, but for years to come.

Knock wood – your business is around for a super-long time – you’ll need some long-term plans. It can be harder to get unstuck if your company is entrenched and set in its ways. Better to make those set ways into something that pushes creativity.

How? One idea is to empower employees with decision-making capabilities. And another is to reward innovation, maybe through perks or recognition plaques or whatever strikes your fancy.

Engineers get patents. Music makers get gold records. Writers get published works. What do your employees get when they’re creative?

Established Businesses Open Up Labs and Undergo Digital Transformations

Uh, what?

One tip which made a lot of sense was to create what are essentially creativity incubators within a company. These are places (not necessarily physical) where employees are free to express their ideas.

The other bit is actually kind of basic – change your physical assets to digital ones.

True story. Long before joining Credit Suite, your intrepid blog writer audited law firms for a major insurance company. Now, a part of this was to check for billing discrepancies. But another angle was to suggest innovation. And one firm had – no lie – about an entire office floor dedicated to file storage space. This was the late 1990s. Scanners already existed as a thing.

And the head of this firm complained about all of the rent it was costing him to keep all of the documentation that we required. To which I countered – why not buy a scanner or two and have clerical staff scan most of the documents and then shred the physical? You could have a college student do this, or a summer intern.

Oh no, we need to be able to make copies.

Well, but with digital, you can make infinite copies, and it doesn’t cost you a dime.

They had no idea.

But these days, we all know better. And one of the beauties of digital, beyond saving physical space, is it makes it far easier to change, manipulate, add to, and subtract from, your assets.

Talk about sparking business innovation.

If you are as passionate about succeeding in business as we are, please help us spread the word about how to take the plunge and save time and money – and your sanity! From sparking business innovation to customer retention, this post has it all.

#4. Keep an Eye on Your Cash and Manage it Right

Check out this spectacular tip, all about managing your business finances. Succeed As Your Own Boss notes that the first sensible thing to do is no great shocker – hire an accountant. But we loved some other grand ideas.

Consider the idea of opening a profit account. What’s a profit account? The idea is to skim off some of the payments to your business (say, 1 – 10%) for you. This isn’t an emergency account for the business (which is another excellent idea). It’s to make sure you, the big cheese, are actually getting paid.

And put it in an account that’s hard for you to tap into. Let it be a happy financial surprise, rather than a well you’re constantly dipping into.

#3. Productivity – To The Max!

It’s not your imagination: this winning tip can help you maximize employee productivity. Young Upstarts tells us there are great ways to up your employees’ productivity.

The first tip we really loved was about minimizing distractions. As a writer in particular, this speaks directly to me. Cutting cell phone use is helpful. But it’s also helpful to create what are almost office hours. Giving clear signals about when you’re available for meetings and impromptu discussions – and when you aren’t – can set reasonable expectations. And people will stop bugging you when you’re on a tight deadline.

And that just might start sparking business innovation, too!

Our other fave tip was to offer some incentives. These don’t have to be too costly, either. Consider what we did here at Credit Suite – we had a department video competition. The winners got movie tickets. And, ahem, Marketing won.

Then again, it’s easy (well, easier) when you’ve got so many talented folks who can create pretty graphics, smooth out any sound issues, and write a decent script. So we kinda had a few ringers in our department.

So far, we don’t know if Sales has vowed revenge….

#2. Keep Your Edge

Our second to last unbeatable tip can give you a new perspective on staying competitive. Under 30 CEO reveals all about maintaining your competitive edge.

Turns out it’s a group effort (who knew?).

The best tip (according to us) was the one about maintaining a network of people who will be honest with you and challenge you. That makes a great deal of sense.

Consider this. Let’s say you’re new to the business world. You have a great idea, people support it, and maybe you’re the recipient of enough crowdfunding cash or venture capital money infusions or angel investments.

But you have no idea how to do your books.

Would you wing it, or hire an expert?

Of course, you might not be able to afford an expert. But you’re flush with cash. So add it as a budget line item and hire one. Unless, of course, you think audits and possible lawsuits cost less.

Pro tip: they don’t.

So why should you hesitate in any other area where you aren’t quite sure of how to handle things?

Being the CEO doesn’t mean you also have to be the Lone Ranger.

#1. It’s All About the Search

We saved the best for last. For our favorite remarkable tip, we focused on upping your ecommerce SEO results. Fundera says you can improve your SEO in all aspects of ecommerce.

First off, for SEO in this area, as in every other, research is your first step! Consider every single way your product (or service, for that matter) can be described. Let’s say you’re a long haul trucker. The term ‘long distance trucker’ is the same thing, yes? So when you are putting together your website, you’re going to want to use both phrases throughout your content.

But do your research, and determine which is more popular. Of course, you want to concentrate on that one!

The idea of using keywords in the product pages and their URLs was terrific! Again, this is an article which is best appreciated in its entirety.

So which one of our brilliant business tips was your favorite? And which one will you be implementing now?

If you are as passionate about succeeding in business as we are, please help us spread the word about how to take the plunge and save time and money – and your sanity! From sparking business innovation to customer retention, this post has it all.

The post Start Sparking Business Innovation –10 Brilliant Business Tips of the Week appeared first on Credit Suite.

Leading Five Reasons to Establish Business Credit!

Way too many entrepreneur are utilizing their individual credit history to fund the launch, development or development of their service A bulk of entrepreneur have no suggestion what organisation is or exactly how to develop it. By adhering to a couple of easy actions any kind of local business owner can developing organisation credit scores, for that reason, dividing their individual credit report from their organisation credit scores.

When local business owner make use of individual bank card to spend for overhead, the financial obligation of business reports back to their individual credit score records which reduces their ratings since their service financial debts harm their individual financial obligation to earnings proportion.

To aid avoid local business owner from harming their individual credit report, every entrepreneur ought to adhere to the easy actions of developing company credit rating. By developing company credit rating the financial debt of business will certainly report to business debt data as well as not the individual credit rating documents. Developing company credit history will certainly likewise aid business construct a solid company credit rating documents so fundings, credit lines wont call for business proprietor to authorize an individual warranty.

Below are simply a couple of reasons every entrepreneur must develop company debt.

You angle anticipate to stroll right into a financial institution as well as ask for an organisation financing with no service credit history or service background. By developing an excellent service credit score account you will certainly be able to safeguard the funding your service requirements.

2. You would certainly still be lawfully accountable if you utilized your individual credit score to fund your company if your company ought to fall short.

Thats right, service credit scores prices are generally reduced than individual credit rating prices. A couple of portion factors in rate of interest mean thousands of bucks in the lengthy run

Drift your service via hard times. By developing service credit rating you will certainly be prepared for the down time.

Allows face it, without the loan you require to fund the launch or growth of your service you actually wont be in company at all. Do not make the blunder of utilizing your individual financial resources to fund you organisation.

The are numerous, a lot more reasons you ought to develop service credit report. We have all listened to the claiming, “maintain organisation expenditures different from individual expenditures,”? The only method to do that is to establish your service appropriately to begin with by developing service debt.

If you want discovering …

-What civil liberties does an entrepreneur have if there is inaccurate details on a credit score record?
-How do I get an organisation credit report?
-What work lending institutions take a look at in order to expand organisation credit scores?
-Where do you locate firms that approve credit report?
-Which business report to business credit rating bureaus?
-What bank card business do not need individual assurances?

I recommend you begin the education and learning procedure of learing exactly how to develop service credit report!

By complying with a couple of straightforward actions any type of company proprietor can developing company credit scores, as a result, dividing their individual credit score from their service credit history.

To assist protect against service proprietors from harming their individual credit score, every service proprietor must adhere to the straightforward actions of developing company credit report. By developing company credit rating the financial obligation of the company will certainly report to the company credit score data as well as not the individual credit scores documents. Developing service credit rating will certainly additionally aid the organisation develop a solid service credit rating documents so fundings, lines of credit scores wont call for the company proprietor to authorize an individual warranty.

You angle anticipate to stroll right into a financial institution as well as ask for an organisation car loan with no company credit report or organisation background.

The post Leading Five Reasons to Establish Business Credit! appeared first on ROI Credit Builders.

Leading Five Reasons to Establish Business Credit!

Below are simply a couple of reasons every entrepreneur must develop company debt.

2. You would certainly still be lawfully accountable if you utilized your individual credit score to fund your company if your company ought to fall short.

Thats right, service credit scores prices are generally reduced than individual credit rating prices. A couple of portion factors in rate of interest mean thousands of bucks in the lengthy run

Drift your service via hard times. By developing service credit rating you will certainly be prepared for the down time.

If you want discovering …

I recommend you begin the education and learning procedure of learing exactly how to develop service credit report!

You angle anticipate to stroll right into a financial institution as well as ask for an organisation car loan with no company credit report or organisation background.

The post Leading Five Reasons to Establish Business Credit! appeared first on ROI Credit Builders.

Online Business Loans Versus Factoring

Which one is Best for You, and Tips for Finding More Options

There are so many more options for funding a business than most business owners realize. Everyone knows about loans and investors. The thing is, not only are there dozens more options, but just within those two categories there are a ton of options. Figuring out which one will work best for you and your business can be a daunting task. Do you go with traditional or online business loans? Crowdfunding or invoice factoring?

Before you can truly know the best answer, you must have a deep, in-depth understanding of each option. You cannot understand which option is best for your without knowing everything about each one and how they compare to each other.

In addition, the choice is dependent upon a number of variables that will be unique to your situation. Why do you need the money? How soon do you need it? What does your credit look like? How long have you been in business? All of this culminates to an arrow pointing you in the right direction.

To keep things from being too overwhelming, it is sometimes best to consider and compare just a couple of options at a time. For example, which is the best for you between online business loans and factoring invoices?

Share our foolproof business credit building checklist and tell your friends about how you’re building business credit the quick and easy way.

What Are Online Business Loans?

Of course, this sounds like a dumb question. They are business loans that you get online, right? It’s self-explanatory. Maybe the better question is, what is the difference between online business loans and other business loans.

There are many differences actually. Online business loans:

Have an application process that takes place exclusively online
Have a much faster application and approval process
Offer less strict qualifications guidelines
Sometimes utilize alternative methods of determining qualification
Get money into your account much faster, sometimes within as little as a day or two
Often have higher interest rates than traditional loans

What does all of this mean? It means that if you have trouble qualifying for a traditional loan, an online loan can be a good alternative. This is also true if you need funds quickly, or do not want to have to wade through the lengthy application process that traditional lenders are known for.

However, all this good does have a negative thrown in the mix. Online business loans generally have higher interest rates and less favorable terms. If eligibility and time are not an issue, traditional loans are the most cost effective.

So Then, what is Factoring?

This is more specifically referring to invoice factoring. That of course, means that you must have open invoices to qualify. Consequently, you must be extending credit to customers in some form. Usually this involves invoices with net terms, such as net 30, 60, or 90.

Then, you turn those invoices over to a factoring company. They give you an agreed upon percentage of the total of the invoices, such as 80%. You get this amount of money immediately. When your customer pays, the factoring company keeps their agreed upon fee, and they send you the rest.

This is different from selling invoices, in which you sell your invoices at a premium and do not collect anything else. The buyer then tries to collect the full price from the customer and keeps it, profiting from the premium they were sold at. This is more typical with severely delinquent invoices.

You can factor invoices on an ongoing basis to help with cash flow, or you can do it to aid in a one-time cash crunch. It is quick, but it can be costly. If you are an established business that has little problem collecting on invoices however, this is a funding option that is easy to qualify for. Since the funds are secured with the invoices, there is little worry about credit rating.

Online Business Loans vs. Factoring: Which One Should You Choose?

Even knowing everything you can about each option, it can still be difficult to differentiate between which one would work best for you and your situation. The truth is, one could be best this time, and in the future, the other one will work better.

Take the following factors into consideration:

Why do you need funds?
How often do you need funds?
What does your credit score look like?
How long have you been in business?
Do you have open invoices?
Do you have trouble collecting on open invoices?

If your credit is not terrible, and you only need funds this one time for something specific, it might be best to go with online business loans. You do not have to have a credit score that is up to standards with what traditional lenders require, fund will come fairly quickly, and your interest rate will likely be lower than the factoring fee you would pay.

Share our foolproof business credit building checklist and tell your friends about how you’re building business credit the quick and easy way.

Of course, if you do not qualify for invoice factoring, that is another reason to choose online business loans.

If you need fast cash or an ongoing cash flow to cover a collections gap, you may want to look into factoring. You can set it up to where your invoices are automatically factored and you get a portion of the funds right away. Be sure you are not covering up a bigger issue however. Factoring only works if your customers pay.

Building Business Credit Can Open Up Online Business Loans and Other Options

Of course, you shouldn’t feel that these two are your only options, even if your credit history disqualifies you for other types of financing. If you work on building business credit, you can increase your options for funding, and even open up new options for online business loans.

What is Business Credit?

Glad you asked! Business credit is a credit report and score that is based solely on the financial history of your business. In some cases, it does not take your personal credit score into account at all. Even if your personal score is considered, in most cases a strong business credit score will prevail when it comes to business financing.

Why Do You Need Business Credit?

Since business credit is distinct from individual credit, it can help secure an entrepreneur’s personal assets if there is litigation or business insolvency. Also, with two distinct credit scores, a business owner can get two different cards from the same merchant. This effectively doubles purchasing power.

How Do You Get Business Credit?

Establishing small business credit is a process, and it does not occur automatically. A company will need to proactively work to establish business credit. The goal is to make the business appear fundable to lending institutions and merchants. Here is how to make that happen.

Contact Information

Your business needs a professional-looking website and email address. Remember, the site needs to have site hosting bought from a company such as GoDaddy. A free web hosting service or free email service will not work for these purposes.

The business needs a separate phone number as well. It should be from a free exchange and be listed along with the fax number on 411. You can do that here: http://www.listyourself.net.

Business Bank Account

A dedicated business bank account is also necessary. This will not only aid in making your business appear fundable, but it will also help keep business expenses separate for tax purposes.

Incorporation and EIN

Visit the Internal Revenue Service web site and acquire an EIN for the small business. They’re free. You also need to select a business entity like a corporation, LLC, etc. Formally incorporating helps to separate your business from yourself, and as an added bonus, it offers more protection to your personal assets.

Get a D-U-N-S Number

Go to the Dun & Bradstreet website and get a D-U-N-S number. This is a number that D&B assigns to a business when it goes into their system. It is necessary to have this number before the system will generate 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 company. You can do this at www.creditsuite.com/reports. If there is a record with them, check it for correctness and completeness. If there are no records with them, that will be handled with the next step.

What’s that Next Step?

The next step is to work your way through the credit tiers, adding more cards in higher tiers as you gain accounts in the one you are currently in. Start with the vendor credit tier.

Vendor Credit Tier

First, build tradelines that report. This is also called the vendor credit tier. Then you’ll have an established credit profile, and you’ll get a business credit score.

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

These trade lines are with vendors who will give you starter credit when there is none already. Terms are typically Net 30, rather than revolving. That means if you get an approval for $1,000 in vendor credit and use all of it, you must pay that money back in within the net terms.

Not all vendors work for starter credit. Find some great options here.

Retail Credit Tier

Once there are 5 to 8 or more vendor trade accounts reporting to at least one of the credit reporting agencies, then move onto the retail credit tier. These are companies such as Lowes and Staples.

In fact, Lowes works really well because they report to D&B, Equifax and Business Experian. They will need to see a D-U-N-S and a PAYDEX score of 78 or more though, so be sure to work that vendor credit tier the right way.

Fleet Credit Tier

Once enough accounts are reporting from retail credit, you can apply for cards in the fleet credit tier. This tier includes businesses such as BP and Conoco. Use this credit to buy fuel, as well as to repair and maintain vehicles.

Shell is an example in this tier. They report to D&B and Business Experian. A PAYDEX Score of 78 or higher and a 411 small business telephone listing are required for approval. They might say they want a specific amount of time in business or revenue. However, that will not be necessary if you already have enough vendor accounts.

Cash Credit Tier

If you are responsible with the credit you earn in these three tiers you will be able to move on to the cash credit tier. It includes service providers such as Visa and MasterCard not attached to a retail store.

Share our foolproof business credit building checklist and tell your friends about how you’re building business credit the quick and easy way.

Qualify for Online Business Loans and Monitor Your Business Credit

Keep tabs on what is happening with your credit. Make sure it is being reported and take care of any errors ASAP. Get in the practice of checking credit reports and digging into the particulars, not just the scores. We can help you monitor business credit at Experian and D&B for only $24/month. See: www.creditsuite.com/monitoring.

At D&B you can monitor at: www.dandb.com/credit-builder. At Experian, you can monitor your account at: www.smartbusinessreports.com/Landing/1217/. And at Equifax, you can monitor your account at: www.equifax.com/business/business-credit-monitor-small-business. Experian and Equifax cost about $19.99; D&B ranges from $49.99 to $99.99.

Monitoring your credit not only allows you to keep an eye on mistakes and work to get them corrected, but it also lets you see your progress. You can see how many accounts are reporting and what your score is. This will give you an idea of what you can do with it.

How Does Business Credit Affect the Online Business Loans vs. Factoring Question?

While both online business loans and factoring are legitimate funding options for a business, neither are ideal. There are better options out there, with lower interest rates and better terms. The problem is, those options are not available to many business owners for a number of reasons. Building business credit opens up a number of other possibilities for funding your business, and the more options you have, the better.

The post Online Business Loans Versus Factoring appeared first on Credit Suite.

Achievement in Tavares FL… $10,300.00 in Business Revenue financing!

The Treasure Hunt for Low Rate Small Business Loans

How to Hunt down and Capture Low Rate Small Business Loans

When Indiana Jones was on the hunt for a rare artifact, he always knew everything he possibly could about it before he got started. His treasures were always surrounded by mystery, but he was able to find them based on the information he learned. The same is true of low rate small business loans. By learning as much as you can about them, you empower yourself to not only find them, but to bring them home.

Everyone wants low rate loans, but not everyone can get them. It takes a special type of lender and borrower. We can tell you how to be the right borrower and how to find the right lender. Let’s start with the basics.

What is the Interest Rate?

Lenders don’t let you borrow money out of the kindness of their hearts. Unless they are specifically designed as a non-profit entity, lenders are in it for the money. The main way they make money is by lending you money, and requiring you pay back what you borrowed, plus some. The amount of the plus some is dependent on the interest rate. It is a percentage of the amount you borrowed that you must pay the lender in return for allowing you to borrow the money. In short, it is the cost of the loan.

It’s important to remember that there are often other costs associated with loans in the form of various fees. The interest rate however, is how the bread is buttered.

Learn business loan secrets with our free, sure-fire guide.

What’s Qualifies as a Low Rate?

The next logical question that comes to mind when thinking about low rate small business loans may be, what qualifies as a low rate? I mean, you have to know exactly what it is you are looking for. When talking about business loans, an interest rate lower than 10% is low. There are not a ton of these out there, and they are hard to get, but they do exist. That’s what makes them a treasure worth hunting.

Who Gets Low Rate Small Business Loans?

Not only are low rate small business loans rare, but the borrowers that can obtain them are even more rare. The thing is, it takes a borrower with a good credit score, solid revenue, and an established business to get this kind of treasure.

Why is this? Well, higher interest rates are a way to balance out perceived risk. If a lender sees you as a potential risk, they want to ensure they get as much of their money as they can. They raise the interest rate so that they get more profit with each payment you make. If they think that you are a low risk borrower, they will be willing to lend more money at a lower rate. That’s because they are not as concerned that you will default on the loan.

Which Types of Lenders Offer the Lowest Rates?

The other thing that makes low rate small business loans a rare treasure is that you can’t get them from just any lender. As a general rule, the lowest rates come from traditional lenders. These are the big banks, community banks, and credit unions.

These lenders all lend directly, but some also partner with the Small Business Administration to offer lower rates to those that would otherwise not qualify for them. Find out more about the Small Business Administration here.

Small Business Administration Low Rate Small Business Loans

The SBA offers a number of loan programs through partners lenders. They vary in uses and eligibility requirements. Some of the most popular include:

7(a) Loans

This is the Small Business Administration’s main loan program. It offers federally funded term loans up to $5 million. Funds are allowed to be used for expansion, purchasing equipment, working capital and more.

The minimum credit score to qualify is 680, and there is also a required down payment of at least 10% for the purchase of a business, commercial real estate, or equipment. The minimum time in business is 2 years. They’ll accept experience equal to two years in the case of startups.

504 Loans

These loans are also available up to $5 million and can buy a number of things includings land, facilities, and even machinery. Terms range from 10 to 20 years, and funding can take from 30 to 90 days. They require a minimum credit score of 680. They consider the asset that the funds are used for to be collateral. There is also a down payment requirement of 10%, which can increase to 15% for a new business. You must be in business for two years or have equivalent management experience if you are a startup.

Learn business loan secrets with our free, sure-fire guide.

Microloans

Microloans are available in amounts up to $50,000. They are are good for starting a business, purchasing equipment, buying inventory, or for working capital. Community based nonprofits handle microloan programs as intermediaries. Financing comes directly from the Small Business Administration.

Interest rates run 7.75% to 8% above the lender’s cost to fund, and the terms go up to 6 years. Funding may take up to 90 days, and the minimum credit score is 640. Collateral and down payment requirements vary by lender.

SBA disaster loans

Available in amounts up to $2 million, these are actually processed directly through the SBA. They are available to small-business owners that have been affected by natural disasters. Terms go up to 30 years, and the maximum interest rate is 4%.

The minimum credit score for disaster loans is 660. Collateral is necessary if the loan goes over a certain amount, usually $25,000, if it is available or when it becomes available. For a military economic injury disaster that amount is $50,000. There is no down payment requirement regardless.

SBA Express loans

These loans max out at $350,000 and have a maximum interest rate of 11.50%. Terms range from 5 to 25 years, and the SBA guarantee is less than with their other loan programs at 50%. To qualify, your credit score must be above 680, and you must have a debt to service ratio of 1.1 or higher. If the loan is greater than $25,000, collateral may be necessary depending on the lender.

The turnaround for express loans is much faster, with the SBA taking up to 36 hours to give a decision. Necessary paperwork for application is less also, making express loans a great option for working capital as well as other things.

Low Rate Small Business Loans from Alternative Lenders

There is no way around the fact that alternative lenders have higher interest rates. They cater to those that do not qualify for loans from traditional lenders. Consequently, they are catering to borrowers that are innately higher risk. They do the same as any lender, and increase interest rates to balance out the risk.

Far and away SBA loans are the best bet for most when it comes to low rate small business loans. If your business is strong but you don’t quite hit the mark for a standard loan, they are a great option. The application process is much longer and way more involved that others however.

There are a couple of alternative lenders than have streamlined the process.

SmartBiz

This lender offers loans backed by the SBA that borrowers can use for a variety of purposes. Examples of acceptable uses include working capital, inventory, expansion and debt consolidation. If you want $150,000 or less, they require a credit score of at least 600, $50,000 annual revenue, and a minimum of 2 years in business. For amounts higher than $150,000, the requirements are the same except the credit score minimum increase to 650.

Live Oak Bank

This is another option for a faster SBA loan process if your business is part of one of 17 specific industries. These industries include:

accounting and tax firms
Agriculture/poultry
Automotive
Educational services
Family entertainment
Funeral service
Government contracting
Healthcare and dental
Hotel
Insurance
Investment advisory
Pharmacy
Renewable energy
Self-storage
Senior care
Veterinary
Wine/craft beverage

The minimum credit score for these loans is 650, but the other requirements are pretty lose. For income, they only require that cash flow can support the debt. There is no minimum time in business requirement.

How to Turn the Tide of Low Rate Small Business Loans in Your Favor

Once you understand how things work, you can get a handle on why these loans seem to stay just out of your reach. The thing is, there is no way around the fact that a higher credit score translates to lower interest rates. The thing to do then, would be to increase your credit score. It won’t seal the deal, but it will take you almost all the way.

When you are a business however, you have two scores to worry about. You need to ensure your personal credit score stays up to par for a number of reasons, but you also need to be concerned with your business credit.

Here’s the thing. In general, you need your business credit to be completely separate from your personal credit. All of your business financing should ideally be based on your business credit. Practically however, it doesn’t work this way. Most traditional lenders, the ones with those low rate small business loans, look at your personal credit score.

In addition, a couple of the business credit reporting agencies use your personal credit score in your business score calculation. That means that even though you definitely need the scores to be separate, you cannot forget about your personal score, even when it comes to business financing.

How Do You Improve your Personal Credit Score?

The first thing you do is get a free copy of your credit report. You can get one each year. Take a look at it and review what it on it. If you see mistakes, dispute them with the credit agencies in writing. Then, look at what may be negatively affecting your score. Are you making late payments? Stop that. Paying on time is non-negotiable for improving credit.

Look at your balances in relation to your limits. Are you close to your limits? Pay those balances down as soon as possible. That has a definite negative affect on your score. Another issue is the average age of accounts. If all of your accounts are relatively new, that is going to bring your score down. There isn’t a lot you can do about that other than just wait, but be aware that each time you add a new account, the average age of your accounts decreases.

Build and Improve Business Credit

Business credit is credit in a business’s name. It doesn’t attach to a business owner’s individual credit. When you have business credit, business transactions do not affect your personal credit at all. Consequently, an entrepreneur’s business and individual credit scores can be very different.

How to Get Business Credit

Establishing small business credit does not happen automatically. A business must work intentionally to make it happen. The first step is to appear fundable to lenders and vendors. This begins with how you organize your business. Sole proprietorship may be the easiest option, but it is also the most sure-fire way to ensure your business accounts end up on your personal credit report.

You need to choose to operate as either an LLC, S-corp, or a corporation. For business credit purposes it doesn’t matter which one. Choose the option that best fits your tax needs. You’ll also need an EIN. It is an identifying number for your business similar to how an SSN is a personal identifying number. Get an EIN and start the incorporation process at IRS.gov.

A professional-looking website and email address are also important. Web hosting should be bought from a merchant like GoDaddy, not from a free service. A free email account will not work either. It needs to have the same URL as your website.

A dedicated business telephone number and address that are not the same as yours are necessary as well. Be sure there is a business listing on 411. You can do that here.

In addition, you need a business bank account. Be sure it is in the business name and that only business transactions run through it.

Learn business loan secrets with our free, sure-fire guide.

Once you have all this in place, go ahead and apply for a D-U-Ns number. Just go to the D&B website. A D-U-N-S number is how D&B gets a business in their system. Therefore, if you do not have one, you do not have a business credit score with Dun & Bradstreet. Since they are the largest and most commonly used business credit reporting agency, you need a D-U-Ns number to have business credit.

What Next? Building and Improving Business Credit

After all of this is set, you have to get accounts reporting. If you already have business credit but need to improve it, you will follow this same process.

Start with establishing trade lines that report. Do this with vendors that are in the vendor credit tier. Then you’ll have an established credit profile, and you’ll get a business credit score. With an established business credit profile and score you can begin to acquire credit in the retail and cash credit tiers.

The vendor credit tier including those vendors that will extend net 30 terms without checking your credit, and then they will report your payments to the business credit reporting agencies. Find out more about the business credit building process here.

Monitor Your Business Credit

You can’t stop there. You will not know what kind of credit you have or if you can move on in the tiers without monitoring your credit. Go to www.creditsuite.com/monitoring to do so at a fraction of what it costs with the credit agencies directly. There is no option for a free business credit report like there is with personal credit reports.

Low Rate Small Business Loans Exists and Your Business Credit Can Help You Get Them

Now the big question. Low rate small business loans generally come from traditional lenders. Traditional lenders look at your personal credit score. How can business credit help you get low rate loans?

If your personal business score isn’t quite up to par, but you have an established business with a strong business credit score that meets the other requirements, they may be willing to give a little. There is no guarantee, but it does happen. Either way, a strong business credit score means you can access the business funding your need through another channel, even if the traditional ones don’t pan out. It’s a virtual guarantee you can get the funding your need to grow your business.

The post The Treasure Hunt for Low Rate Small Business Loans appeared first on Credit Suite.

Success again… $7800.00 in Business Revenue financing!

Our client in Tennessee was able to get quick financing for his additional needs.

This allowed him to move forward on obtaining his business goals to see his company expand.

Click Here to see how much funding you can get for your business.

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Get Business Credit Lines Unsecured by Collateral

You Can Get Business Credit Lines Unsecured by Collateral

Do you need business funding? But maybe you don’t have good collateral? Not to worry – you can still get money. So let’s look at business credit lines unsecured by collateral.

Get Business Credit Lines Unsecured by Collateral: Credit Lines

A credit line, or line of credit (LOC), is an arrangement between a borrower and a bank or private investor which establishes a maximum loan balance that a borrower can access.

A borrower can get access to funds from their line of credit at any time, so long as they don’t go beyond the maximum set in the arrangement, and as long as they meet any other conditions of the finance institution or investor for example, making timely payments.

And business credit lines unsecured by collateral give lenders very little security in case of default. While business credit lines unsecured ed by collateral exist, they can be harder to get.

Advantages

Credit lines offer many distinct advantages to borrowers which include convenience. Borrowers can utilize their line of credit and merely pay interest on what they use, unlike loans where they pay interest on the total borrowed. Credit lines can be reused, so as you acquire a balance and pay that balance off, you can use that accessible credit again, and again.

Details

Credit lines are revolving accounts similar to credit cards, and contrast other kinds of financing such as installment loans. In many cases, lines of credit are unsecured, much the same as credit cards are. There are some credit lines that are secured, and for that reason easier to get approval for. But we’re looking for business credit lines unsecured by collateral!

Credit lines are the most routinely sought after loan type in the business world despite the fact that they are preferred, real credit lines are rare, and difficult to find. Many are also very hard to qualify for, requiring good credit, good time in business, and good financials. But there are other credit cards and lines that few people know about that are attainable for startup companies, bad credit, and even if you have no financials.

Get Business Credit Lines Unsecured by Collateral: Unsecured Business Financing

With this form of business financing, you partner with a lender who concentrates on securing business credit cards. This is a very unusual, very few know of program which few lending sources offer. They can normally get you three to five times the approvals that you can get on your own.

This is because they know the sources to apply for, the order to apply, and can time their applications so the card issuers won’t decline you for the other card inquiries. Individual approvals commonly range from $2,000 – 50,000.

The result of their services is that you commonly get up to five cards that simulate the credit limits of your highest limit accounts now. Multiple cards generate competition, and this means they will raise your limits, more often than not within 6 months or less of first approval.

While these aren’t business credit lines unsecured by collateral per se, they are rather similar. And the differences between and unsecured business credit cards are probably not going to be noticeable to most.

Approvals

Approvals can go up to $150,000 per entity like a corporation. With UBF they actually get you three to five business credit cards which report just to the business credit reporting agencies. This is huge, something the majority of lenders don’t offer or advertise. Not only will you get cash, but you build your business credit also so within three to four months, you can then use your new company credit to get even more money.

Details

You can get credit with no security, assets, or collateral. The lender has no collateral to collect in case of default. Because there is no collateral, and they don’t look or care about your cash flow, the only thing that matters is your personal credit.

With a 650 you will get only personal cards. But with a 680 credit score, you will get both company and personal cards.

Rates

The lender can also get you low introductory rates, more often than not 0% for 6-18 months. You’ll then pay normal rates after that, typically 5-21% APR with 20-25% APR for cash advances. And they’ll also get you the best cards for points. So this means you get the very best rewards.

Just like with just about anything, there are significant benefits in partnering with a source who focuses on this area. The results will be far better than if you attempt to go at it by yourself.

Learn business loan secrets with our free, sure-fire guide.

Qualifications

You must have excellent personal credit right now, ideally 685 or better scores, the same as with all business credit cards. You shouldn’t have any derogatory credit on your report to get approval. And you must also have open revolving credit on your consumer reports right now.

Balance/Limit Ratios

They consider your balance/limit ratios on existing revolving accounts. The lower the ratio, the higher the amount of the approval. A 30% ratio is a requirement. This looks at overall percentage, and individual percentage on each account.

Credit inquiries are a big factor tying into approval. More than six inquires in six months will be too much. Lenders do not want to see the person is applying for new credit, especially no other revolving accounts.

Learn business loan secrets with our free, sure-fire guide.

Guarantors Welcome

Use a guarantor or a credit partner to boost the numbers. Usually these people want a piece of the business in trade for their assistance. Creditors want to know you’ll pay them back. Most sources will charge 9 to 12% success-based fees. Only pay the fee off what you secure.

Fees

All lenders within this space charge a 9-15% success based fee and you only pay the fee off of what you secure. Keep in mind, you get a lot of extra rewards and about three to five times more money in this program than you’d get on your own, which is why there’s a fee, the same as all other lending programs.

You can get approval with a guarantor and you can even use a wide range of guarantors to get even more money. There are also other cards you can get making use of this very same program but these cards only report to the consumer reporting agencies, not the business reporting agencies. They are consumer credit cards versus business credit cards.

Benefits

They deliver similar benefits including 0% intro annual percentage rates and five times the amount of approval of a solitary card but they’re much easier to qualify for.

You can get approval with a 650 score and seven inquiries (or fewer) in the most recent six months and you can have a BK on your credit and other negative items. These are a lot easier to get approval for than UBF business cards.

With all earlier cards above, you must have good consumer credit in order to get approval but what happens if your personal credit is not good, and you don’t have a guarantor?

This is the time when building company credit makes a lot of sense even if you have good personal credit, building your business credit helps you get even more money, and without having a personal guarantee.

Private Investors and Alternative Lenders

Private investors and alternative lenders also grant credit lines. These are easier to get approval for than conventional SBA loans. They also require much less documentation for approval. These alternative SBA credit lines generally demand good personal credit for approval.

Unlike with SBA, many of them don’t necessitate good bank or business credit approval. Nearly all of these sorts of programs call for two years’ of tax returns. Tax returns need to demonstrate a profit. Rates can vary from 7% or greater and loan amounts range from $25,000 into the millions. Loan amounts are typically based upon the revenues and/or profits on tax returns. Sometimes lenders may ask for other financials including a profit and loss statement, balance sheets, and income statements.

Merchant Cash Advances

Merchant cash advances have quickly become the most popular way to get financing, in large part because of the effortless qualification process. Businesses with $10,000 in earnings can get approval, with the business owner having scores as low as 500.

Some sources have now even begun to offer credit lines that accompany their loans. You must have at least $10,000 in revenue for approval. You should be in business for at least one year, however three years is better. Lenders typically want to see a credit score of 650 or better for approval.

Loan amounts are typically around $20,000. Lenders routinely do pull your business credit, so you need to have some credit already and in some cases lenders will want to see tax returns.

Rates vary, due to the risk for this program, and there aren’t a lot of funding sources who offer it.

These can be – in a way – business credit lines unsecured by collateral. This is because the lender gets something better than collateral – a percentage of your incoming revenue.

Get Business Credit Lines Unsecured by Collateral: Credit Cards and Lines are Very Similar

Credit cards frequently offer 0% intro rates for up to two years. This is also extremely useful for startups in particular. And credit lines let you take out more cash at a more affordable rate than do cards. These are the primary two differences which will have an effect on you between credit cards and credit line.

Investopedia even says that “lines of credit are potentially useful hybrids of credit cards.”

Both cards and lines are revolving credit. Credit lines are tougher to qualify for as card approvals are usually very quick, many times automated, while at the same time line require an in-depth underwriting review. Lines usually offer lower rates, per Bankrate card rates average 13% while lines average 4%.

And no matter what, business credit lines unsecured by collateral are going to be even harder to qualify for.

Learn business loan secrets with our free, sure-fire guide.

Unsecured Business Credit Cards

Many of these cards report to the consumer credit reporting agencies. They all demand a personal guarantee from you. You can get approval typically for one card max as they stop approving you when you have two or more inquiries on your report.

Most credit card providers feature business credit cards including Capital One, Chase, and American Express. These have rates similar to consumer rates and limits are also similar.

Some of them report to the consumer reporting agencies, some report to the business bureaus. Approval requirements are similar to consumer credit card accounts.

They are pretty similar to business credit lines unsecured by collateral.

Inquiries

Normally, when you apply for a credit card you put an inquiry on your consumer report. When other lenders see these, they won’t approve you for more credit for the reason that they aren’t sure how much other new credit you have recently obtained.

So they’ll only approve you if you have no more than two inquiries on your report within the most recent six months. Any more than that will get you refused.

Establishing Business Credit

Business credit is credit in a company name, in association with the business’s EIN number, and not the owner’s Social Security Number. When undertaken properly, you can acquire business credit without a personal credit check and no personal guarantee. This is a thing all other cards above can’t deliver.

You can get three types of business credit cards. First is vendor credit, which offers net 30 terms to start a business credit profile. Then is retail credit, where you will get credit cards with high limits at most establishments.

Next is fleet credit. It’s credit to fuel, service, and maintain company vehicles. And then there’s cash credit, which includes Visa, MasterCard, and American Express cards that you can use anywhere. You can acquire these without any credit check or guarantee. Limits are oftentimes $5,000 – $10,000 to start, and can exceed $50,000.

While these types of credit aren’t business credit lines unsecured by collateral, they can often be better. They are often easier to qualify for.

But What About The SBA?

The majority of credit line types that most entrepreneurs think of come from standard banks and traditional banks use SBA loans as their principal loan product for small business owners. This is due to the fact that SBA guarantees as much as 90% of the loan in the case of default. These credit lines are the most challenging to qualify for because you must qualify with SBA and the bank.

Furthermore, you are nearly always going to need some form of collateral. So, by definition, they won’t be business credit lines unsecured by collateral.

Business Credit Lines Unsecured by Collateral: Takeaways

Your business can get business credit lines unsecured by collateral, if you know where to look. Learn more here and get started toward establishing business credit.

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Success again… $7800.00 in Business Revenue financing!