Tag: During

Where to Establish Business Credit During a Recessionary Period

Learn Where to Establish Business Credit and Celebrate as Your Business Takes Off!

Do you know where to establish business credit during a recessionary period? When you are first beginning to establish company credit, your very first step should be vendor or trade credit. This is called starter vendor credit. It is an almost magical way to get started. We can show you how to build business credit step by step.

Where to Establish Business Credit During a Recessionary Period: It Starts with the Basics

No matter what, you want to enter into good credit practices. Hence this is everything from not borrowing too much, to paying your debts back promptly. And it also includes staying on good terms with your sources of credit. The absolute most vital thing you can possibly do, which will make the swiftest and greatest beneficial effect, is to pay off your invoices punctually or early. And develop a responsible and good payment record.

Are you asking, ‘do business credit cards build credit?’ They do! No doubt, this is the best way to build business credit. This even works during a recessionary period.

Where to Establish Business Credit During a Recessionary Period: Getting Started

You will have to launch a commercial credit profile and score with what are called starter vendors (also known as trade accounts or trade lines). Vendor credit merchants are ones who will give your small business initial credit. And they will do so even though your company has no credit, no score, or no trade lines.

Many of the more prominent and better known merchants will not extend to you initial starter credit. So do not even try starting a credit application with them.

Here are three vendor accounts which you can use to begin to develop your commercial credit. This is where to establish business credit. And bear in mind: if you are declined in the beginning, keep trying!

These are excellent vendors to build business credit!

Where to Establish Business Credit During a Recessionary Period: 1. Uline Shipping Supplies

Uline Shipping Supplies is a true starter vendor. You can find them online at www.uline.com.

This company offers for sale shipping, packing, and industrial supplies. These feature janitorial products and shipping boxes. And they also sell material handling products such as hand trucks and dollies. Most importantly, they report to Dun and Bradstreet.

This is the fastest way to build business credit. It’s a great way to get a build business credit card.

Where to Establish Business Credit During a Recessionary Period: 2. Quill

Quill is another true starter vendor. You can find them online at www.quill.com.

They market office, packaging, and cleaning products. Their product lines also feature toner, office furniture, and the like.

Quill reports to Dun and Bradstreet and Experian.

How do you build business credit fast? This is the way to know how long does it take to build business credit.

Where to Establish Business Credit During a Recessionary Period: Grainger Industrial Supply

Grainger Industrial Supply is also a true starter vendor. You can find them online at www.grainger.com. They sell safety equipment, plumbing supplies, and more, and they report to D&B.

It’s an awesome way to build business credit fast no personal guarantee.

These are some of our favorite companies that help build business credit.

Where to Establish Business Credit During a Recessionary Period: How to Do it

Need to know how to build your business credit?

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

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

This is how to build your business credit.

The Benefits

Considering that small business credit is independent from consumer, it helps to protect a small business owner’s personal assets, in case of a lawsuit or business insolvency.

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

Another benefit is that even startup ventures can do this. Visiting a bank for a business loan can be a recipe for disappointment. But building small business credit, when done the right way, is a plan for success.

Consumer credit scores are dependent on payments but also other elements like credit use percentages.

But for business credit, the scores really only hinge on if a small business pays its debts in a timely manner.

Hit the jackpot and weather any recession with our best webinar and its trustworthy list of seven vendors who can help you build business credit.

The Process

How do you build business credit?

Building small business credit is a process, and it does not happen without effort. A business will need to actively work to build business credit.

That being said, it can be done readily and quickly, and it is much more efficient than building individual credit scores.

Vendors are a big aspect of this process.

Performing the steps out of order will cause repetitive rejections. No one can start at the top with business credit. For instance, you can’t start with retail or cash credit from your bank. If you do, you’ll get a denial 100% of the time.

This is how you’re going to build business credit fast.

Business FundabilityBiz Credit Building During Depressions Credit Suite

A business needs to be fundable to lending institutions and merchants.

Therefore, a company will need a professional-looking web site and e-mail address. And it needs to have website hosting bought from a vendor like GoDaddy.

Also, business telephone and fax numbers ought to have a listing on 411.com.

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

A company will also need a bank account dedicated only to it, and it must have every one of the licenses essential for running.

This is how to build credit for your business.

Licenses

If you’re asking ‘how do I build my business credit?’ – this is how.

These licenses all have to be in the specific, accurate name of the small business. And they need to have the same business address and phone numbers.

So note, that this means not just state licenses, but potentially also city licenses.

Particularly during a recessionary period, you want to get this right.

Working with the Internal Revenue Service

Visit the IRS website and obtain an EIN for the business. You can build business credit for free, but at least they’re totally free. Select a business entity such as corporation, LLC, etc.

A small business can get started as a sole proprietor. But they will most likely want to switch to a form of corporation or an LLC.

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

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

This is how to build business credit for an LLC.

Sole Proprietors Take Note

Are you asking, ‘how to build my business credit?’ – here’s how.

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

If you do not, then your personal name is the same as the company name. Hence, you can end up being directly accountable for all business debts.

Plus, according to the IRS, using this arrangement there is a 1 in 7 probability of an IRS audit. There is a 1 in 50 chance for corporations! Prevent confusion and noticeably reduce the odds of an IRS audit at the same time.

Beginning the Business Credit Reporting Process

Begin at the D&B website and get a totally free D-U-N-S number. A D-U-N-S number is how D&B gets a business in their system, to 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 accuracy and completeness. If there are no records with them, go to the next step in the process.

In this way, Experian and Equifax will have something to report on.

This is how you can tell yourself – build my business credit!

Starter Vendor Credit

First you need to establish trade lines that report. This is also called starter vendor credit. Then you’ll have an established credit profile, and you’ll build business credit score.

And with an established business credit profile and score you can begin to get credit from retailers. And you’ll be able to get more universal credit, like with MasterCard and Visa.

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

But to start with, what is trade credit? These trade lines are credit issuers who will give you starter credit when you have none now. Terms are usually Net 30, instead of revolving.

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

This is how to build business credit score.

Hit the jackpot and weather any recession with our best webinar and its trustworthy list of seven vendors who can help you build business credit.

Details

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

Start your business credit profile the right way and get vendor accounts reporting to the business credit reporting agencies. As soon as that’s done, you can then use the credit.

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

This is how to build business credit in 30 days.

Starter Vendor Credit  – It Helps

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

You want at least 3, better with 5 to 8 of these to move onto the next step, which is retail credit. But you may need to apply more than one time to these vendors. So, this is to validate you are responsible and will pay timely.

For three excellent starter vendors, check above – Uline, Quill, and Grainger.

Where to Establish Business Credit:  Accounts That Don’t Report

Non-Reporting Trade Accounts can also be helpful. While you do want trade accounts to report to at least one of the CRAs, a trade account which does not report can nonetheless be of some value.

You can always ask non-reporting accounts for trade references. Also credit accounts of any sort will help you to better even out business expenditures, therefore making financial planning easier. These are providers like PayPal Credit, T-Mobile, and Best Buy.

Retail Credit

Once there are maybe 5 to 8 or more vendor trade accounts reporting to at least one of the CRAs, then move to retail credit. These are service providers which are more likely to offer revolving rather than net terms.

If you can, just use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, use the business’s EIN on these credit applications. It’s how to build business credit without using personal credit.

It’s how to build credit for a small business.

Fleet Credit

Are there perhaps 8 to 10 accounts reporting? Then move onto fleet credit . These are cards for companies where you can use this credit to buy fuel, and to fix, and take care of vehicles. Only use your Social Security Number and date of birth on these applications for verification purposes. But that’s only if it’s possible. Federal law requires a Social Security number when applying with banks. So if a credit card ultimately comes from a bank, then your SSN is a requirement.

For credit checks and guarantees, make certain to apply using the small business’s EIN.

More Universal Credit

Have you been responsibly handling the credit you’ve up to this point? Then move to more universal credit for places such as Visa and MasterCard. If you can, only use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, use your EIN instead.

If you have 14 or so trade accounts reporting, then these are attainable.

It’s how to build small business credit.

Hit the jackpot and weather any recession with our best webinar and its trustworthy list of seven vendors who can help you build business credit.

Monitor Your Business Credit

Know what is happening with your credit. Make certain it is being reported and deal with any inaccuracies ASAP. Get in the habit of taking a look at credit reports and digging into the particulars, and not just the scores.

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

Update Your Records

Update the data if there are mistakes or the info is incomplete. At D&B, you can do this at: https://iupdate.dnb.com/iUpdate/viewiUpdateHome.htm. For Experian, go here: www.experian.com/small-business/business-credit-information.jsp. And for Equifax, go here: www.equifax.com/business/small-business.

This is another way how to build credit for business.

Fix Your Business Credit

So, what’s all this monitoring for? It’s to contest any problems in your records. Errors in your credit report(s) can be corrected. But the CRAs often want you to dispute in a particular way.

Get your company’s PAYDEX report at: www.dnb.com/about-us/our-data.html. Get your company’s Experian report at: www.businesscreditfacts.com/pdp.aspx?pg=SearchForm. And get your Equifax business credit report at: www.equifax.com/business/credit-information.

Disputes

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

Fixing credit report mistakes also means you precisely spell out any charges you contest. Make your dispute letter as understandable as possible. Be specific about the problems with your report. Use certified mail so that you will have proof that you sent in your dispute.

Dispute your or your company’s Equifax report by following the instructions here: www.equifax.com/small-business-faqs/#Dispute-FAQs.

You can dispute inaccuracies on your or your small business’s Experian report by following the instructions here: www.experian.com/small-business/business-credit-information.jsp.

And D&B’s PAYDEX Customer Service contact number is here: www.dandb.com/glossary/paydex.

This is another one of many ways to build business credit.

A Word about Business Credit Building During a Recessionary Period

Always use credit responsibly! Never borrow more than what you can pay back. Keep track of balances and deadlines for repayments. Paying off punctually and fully will do more to elevate business credit scores than pretty much anything else.

Growing company credit pays off. Good business credit scores help a business get loans. Your lender knows the small business can pay its financial obligations. They recognize the company is bona fide.

The company’s EIN attaches to high scores and lenders won’t feel the need to require a personal guarantee.

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

Where to Establish Business Credit During a Recessionary Period:  Takeaways

Getting merchant accounts for business credit signifies that you are on your way to obtaining great small business credit. Once you have more than five vendor accounts and they are all reporting with the bigger business credit bureaus, then you can begin to access retail credit. These three should quickly get you started.

And now you know where to establish business credit, even during a recessionary period.

The post Where to Establish Business Credit During a Recessionary Period appeared first on Credit Suite.

How to Adapt Your Marketing During the Coronavirus (COVID-19)

It’s been roughly a month now since the Coronavirus started to flip our lives upside down.

From having to practice social distancing and getting used to life without the outdoors to continually washing our hands and wearing masks and seeing loved ones and friends getting sick, the Coronavirus is something none of us expected.

Even our businesses are suffering. Just look at the Coronavirus marketing stats I shared a few weeks ago. The results are devastating.

It’s why I decided to change Ubersuggest and make it more free to help small businesses out.

Since then a lot has changed and there are new opportunities that have come around when it comes to your online business and marketing activities.

Opportunity #1: Help others selflessly

My ad agency has thousands of clients around the world. We lost a ton, but we still have enough to see trends in what’s happening.

When I saw businesses starting to lose a lot of money, I decided to give more of Ubersuggest’s premium features for free. That means it would take me much longer to break even, but that isn’t something I am worried about right now.

Take look at the image below… you’ll see something interesting.

The chart breaks down how many free-trial signups Ubersuggest has received throughout the past month.

Keep in mind, new customers means free trials… a large portion of free-trial users doesn’t convert into paying customers but still, the more trials you get in theory, the more paid customers you will eventually get.

As you can see, the chart is declining. That’s because I opened up more of Ubersuggest’s paid features and made them free.

What’s interesting is you (and other community members) helped support me.

The moment I blogged about more features being opened up for
free, many of you decided to purchase a paid subscription.

I received dozens of emails from the marketing community thanking me and letting me know that they appreciate everything that I was doing AND they purchased a paid plan to help me out.

Now granted, in general signups are down, but that’s what happens when you decide to give away more for free. I didn’t do it because I am trying to leverage Coronavirus or look good, instead, I am just trying to help people out just like I’ve been lucky enough to have had people help me out during my times of need.

But here is what’s interesting… my traffic started to go up
on Ubersuggest the moment I
told everyone that I am giving more away for free.

I’m not the only one who experienced this.

Eric Siu decided to give away a course that teaches people how to start a marketing agency for free (he normally charges $1,497) and a bit more than 250 people have taken Eric up on his offer.

This has led Eric to gain more social media fans and it’s
given him an opportunity to do a webinar about his product/services to a new
audience of 50,000 people.

Similar to me, Eric wasn’t trying to do this to gain
anything, he is just trying to help people out.

I also know someone in the health space who did something similar and one person in the employment space.

They all saw the indirect benefits of helping people out.

In all cases that I have seen, the result is more traffic.

With your website and business, consider what you can give away for free. Anything you can do to help people out is appreciated, especially during this difficult time. You’ll also find that it will drive you more visitors, which is a nice indirect benefit.

Opportunity #2: Paid ads are really, really cheap

The latest trend we are seeing is that paid ads are becoming cheaper.

It makes sense because the way these big ad networks make money is through an auction system. They need small businesses to drive up the cost per click (CPC) for ads so that way the big, billion-dollar corporations have to spend more money on ads.

If you don’t have as many small businesses advertising (like we are experiencing now) there isn’t as much competition for the inventory, so the cost per click decrease.

But the virus has been causing us to spend more time online, so much so that companies like Netflix have had to reduce their streaming quality to help.

In other words, traffic on the web is up and there are fewer advertisers. This means ads are cheaper.

Now we are also seeing conversions rates dropping in certain
industries, but nowhere near at the same rate as the CPCs.

When we average things out per industry and globally, we are seeing paid ads producing a much higher ROI than before the Coronavirus hit. Just look at the chart below.

Our clients, in general, have seen their ROI go from 31% to 53%. That’s a 71% increase in ROI.

If you haven’t tried paid ads yet, you should consider it. If you do, consider ramping up as there is more excess inventory than there has been in years.

Opportunity #3: Conversions are down, but there’s a
solution

For many industries, conversion rates are down. Here’s a
quick snapshot of what it looked like right after the first big week in the
United States.

Since then, things have changed. For some industries, it has gotten better, but for others like travel, it’s still terrible and will be for a while. Delta Airlines is currently burning $60 million a day.

But we found a solution that has boosted conversion rates by 12% on average.

If you are a store selling something online, consider offering payment plans through services like Affirm.

Payment plans reduce the financial burden your customers
will face in the short run.

And you don’t have to be an e-commerce company to leverage payment plans. If you are selling consulting services, you can accept money over a period of a year.

If you are selling ebooks or digital courses, you can also
have a monthly installment plan.

When I sold digital products on NeilPatel.com, I found that roughly 19% of people opted in for my payment plan.

It’s an easy way to boost your conversion rates, especially in a time where many people are looking to reduce their cash spend in the short term.

Opportunity #4: Offer educational based training

If you are looking for a good opportunity, consider selling
your audience educational based courses.

With unemployment
numbers reaching all-time highs, more people than ever are looking for new
opportunities.

Many of these opportunities are in fields like high-tech
that not everyone has experience in.

And, of course, going back to school can be expensive and is time-consuming. Plus, let’s face it… you can probably learn more applicable knowledge on YouTube than sitting in a college class for 4 years (at least for most professions).

So, where do people go to learn? Any online education
website offering very specific, niche advice and courses.

Whether that is Udemy or you are selling your own courses, people are looking for help.

If you don’t know how to sell online courses in mass quantity, follow this. I break it down step by step and even give you the templates you need to be successful. It’s the same ones I used to reach over $381,722 a month in sales.

Opportunity #5: Geography diversification

COVID-19 is a global issue. But it is affecting some
countries worse than others.

For example, South Korea has had better luck controlling the spread of the virus compared to many other countries.

And countries like the United States and Italy have exploded
in daily cases.

With over 84,000 new cases a day and growing quickly, the spread of the virus or the slowdown of the virus can affect your traffic drastically.

For that reason, you should consider diversifying the
regions you get your traffic from.

Through international SEO, you can quickly gain more traffic and be less reliant on one country’s economy.

For example, here is my traffic swing for my SEO traffic in
the United States over the last few months.

The US traffic is slowly starting to climb back. It’s still not back to where it was during my all-time highs, but it’s not as low as when the Coronavirus first hit the United States.

On the flip side, our traffic in Brazil has been going through the roof.

We haven’t changed our strategy, it’s not algorithm related… we haven’t produced more content than usual… we’ve just seen an increase.

We are also starting to see a nice increase in India.

By translating your content for other regions and leveraging international SEO, you can quickly grow your traffic.

Sure, it may take 6 months to a year to start seeing results in the United States, but that isn’t the case with regions like Brazil where there isn’t as much competition.

If you want to achieve similar results to me, follow my global SEO strategy.
It works well… just look at the images above.

Conclusion

Sadly, the next few months are going to get worse. The daily
count of new Coronavirus victims is growing.

From a personal standpoint, all you can do is stay indoors and practice social distancing.

But from a marketing, business, and career perspective, you can make a change.

You should have more time now (sadly), so use it to your
advantage. Put in the effort so you can grow, that way you’ll come out of the
Coronavirus stronger.

So which one of the above opportunities are you going to implement first?

The post How to Adapt Your Marketing During the Coronavirus (COVID-19) appeared first on Neil Patel.

Fund Your Business With Bad Credit During National Recessions

The world has changed. Right now, business owners are more scared than ever before. Many are unsure of what to do. It’s a time to be wondering about how to get the capital you need to grow, and if it’s possible to grow at all, let alone thrive. But you can! You can even get business loans for bad credit in a recession.

Conditions Are Changing on the Fly

Several states have already closed restaurants. Others are limiting gatherings. Stores are having trouble keeping stock on the shelves. Customers and prospects are jittery.

Interest Rates

Interest rates are at an all-time low. There has never been a better time to borrow. Banks are still lending. You can still get money within 24 hours. Such low rates mean business owners can get money at very cheap rates. You really can get business loans for bad credit in a recession.

A National Recession Won’t Stop You from Getting Business Loans for Bad Credit in a Recession

Starting a new business for some entrepreneurs can be hard when times are rough. This is especially for business owners looking to get their business off the ground. But it can be even tougher for business with bad credit. So you need funding! And you need financing for small business with bad credit, even during national recessions.

National Recessions and Business Loans for Bad Credit in a Recession

The number of US financial institutions and thrifts has been decreasing gradually for 25 years. This is coming from consolidation in the marketplace along with deregulation in the 1990s, reducing obstacles to interstate banking. See: https://www.fundera.com/blog/happened-americas-small-businesses-financial-crisis-six-years-start-crisis-look-back-10-charts 

Assets concentrated in ever‐larger financial institutions is problematic for local business owners. Big financial institutions are much less likely to make small loans. Economic downturns indicate banks come to be much more mindful with lending. Fortunately, business credit does not depend on banks.

What’s Bad Credit?

Business owners with bad credit have credit scores of 300 – 629. A score in this range can be a huge obstacle for any business owner looking to fund a new business. Still, having bad credit shouldn’t stop new business owners from looking for money.

Business Loans for Bad Credit in a Recession – Nonprofit and Micro Lenders

Nonprofit and Micro Lenders. If you’re a business owner with bad credit, consider a nonprofit or microlender. Nonprofits and microlenders typically establish loans with bad credit borrowers in mind. Most nonprofit and microlenders loans are to help women and minority entrepreneurs. They also help people from lower income and economically disadvantage communities.

A microloan is what it sounds like – not a lot of money.

You can’t get a microloan from a regular bank. Rather, you get a microloan from a microlender. Try the Association for Enterprise Opportunity to find a local microlender. A microloan is just what it sounds like; it’s not a great deal of cash. Still, if your business only needs something like $500 – $35,000, then a microloan could work.

Business Loans for Bad Credit in a Recession – Online and Offline

Need much more than a microloan? Then apply for a loan from a bank or an online lender. Prepare to provide collateral, which might be stock or real estate or the like. Pay back on time or your company’s credit rating will take a hit.

Because of your bad credit, banks often take out a UCC blanket lien if they give your small business a loan. Online lenders may or may not do so as well.

A UCC blanket lien is a note which goes on your credit report. It says the creditor has an interest in all your company assets until you pay off the loan completely. Hence, there may be unfortunate consequences if you have to default.

Also, most of these loans also require personal guarantees.

Business Loans for Bad Credit in a Recession – Unsecured Business Loans

If you can get a loan which does not require a personal guarantee, then it’s often an unsecured business loan. And those come along with excessive interest rates. These kind of company loans are either short term or vendor cash advances. 

Or they can be receivables financing. That’s where you can get a loan based on expected business because you have pending unpaid statements. These all come with rates of interest often 40% or higher.

Advantages of Unsecured Business Loans for Bad Credit in a Recession

You do not have to put up a personal guarantee or allow a UCC blanket lien. If you default on the loan, then your home and other individual assets will not be confiscated. Neither will your inventory. Still, this also shows you often need to have strong revenue or a substantial amount of time in business. Generally, your personal credit must be fair or better. This is even without a demand for a personal guarantee.

Disadvantages of Unsecured Business Loans for Bad Credit in a Recession

Interest, interest, interest. Per Nerd Wallet, Kabbage can provide an unsecured business loan. Yet the annual percentage rate can run as high as 99%! If you think that’s usury, think again. In Ohio, for example, usury laws don’t apply to unsecured loans.

Unsecured business loans often require at least six months in business. Or they may demand you have no personal bankruptcies. It’s possible your small business would have to demonstrate minimal annual revenues. 

If the business is new, with no regular clientele and profits yet, and you have had personal bankruptcy troubles, then this option is off the table.

Funding During National Recessions: Crowdfunding

Get funding from a crowdfunding site like kickstarter.com or indiegogo.com. But read the small print. Many crowdfunding platforms want all the money back if you do not make your goal by the end of your campaign. Note: Indiegogo has a flexible funding option. Also, crowdfunding websites take a percentage of the contributions.

Straightforward companies may not do so well. Crowdfunding tends to work best when donors can directly connect with the service or product. So product lines not quite in stock yet, or artistic undertakings, may do well. But conventional gizmos not about to really change are not going to attract brand ambassadors. And by extension, they probably won’t get contributors too excited.

Business Loans for Bad Credit in a Recession – Factoring

Another option is invoice factoring, where your company gets a percentage of the cash from outstanding invoices fronted by the factoring company. The factoring company then goes directly after any business which owed you cash, and collects on it themselves. 

Hence if a merchant owes your business $1,000 on a twelve month payment basis, you might give an invoice to the factoring company. Then you may get something like $950 in a week. The factoring company then collects the total from the retailer. This lets you extend credit or negotiate longer term payment plans in exchange for other, more favorable terms. And you can do so without holding a bunch of what are effectively IOUs for months at a time.

Funding During National Recessions: Angel Investors and Venture Capitalists

These may or may not work for you. They won’t work for most businesses. Both types of investors are often looking for a high growth opportunity. 

Angel investors often invest in early stage or startup companies in exchange for a 20 – 25% profit on their investment. Angel investing is more informal. Yes, your mom can be an angel investor.

Venture capitalists are different. In contrast, they give money to help build new startups which the VCs believe have both high growth and high risk potential. These can be fast growth businesses with an exit strategy already in place. They can get up to tens of millions of dollars for investment, networking, and building their business. 

Essentially, this is a gamble on prospective profits. Also, venture capitalists often plan to recoup their investment in 3 – 5 years. They also, normally, want a part of your business if not a controlling stake.

Go Beyond Business Loans for Bad Credit in a Recession with Business Credit

 

Don’t have cash, collateral, time in business, a guarantor, or good personal credit? Then build business credit.

Business credit is credit in a small business’s name. It doesn’t connect to a business owner’s consumer credit, not even if the owner is a sole proprietor and the sole employee of the company. 

Because of this, an entrepreneur’s business and consumer credit scores can be very different.

The Advantages

Since business credit is independent from personal, it helps to secure a small business owner’s personal assets, in case of litigation or business bankruptcy. Even new ventures can do this. 

Personal credit scores rely on payments but also additional components like credit usage percentages. 

But for business credit, the scores just depend on if a business pays its invoices punctually.

The Process

Building business credit does not occur automatically. A small business needs to proactively work to develop business credit. 

However, it can be done readily and quickly, and it is much more efficient than developing consumer credit scores. 

Merchants are a big component.

Doing the steps out of order causes repetitive denials. Nobody can start at the top with business credit. For instance, you can’t start with retail or cash credit from your bank. If you do, you’ll get a denial 100% of the time.

Company Fundability

A small business must be fundable to loan providers and vendors. 

A small business needs a professional web site and email address. And must have website hosting bought from a merchant like GoDaddy. 

Also, business phone and fax numbers must have a listing on 411. Do so here: http://www.listyourself.net. 

In addition, the business phone number should be toll free (800 exchange or comparable).

A company also needs a bank account dedicated solely to it. 

Licenses

A business must have all the licenses necessary for operation. These licenses all must be in the correct, accurate name of the small business. And they need to have the same business address and telephone numbers. 

So keep in mind, this means not just state licenses, but potentially also city licenses.

National Recessions Credit Suite

Learn more here and get started toward building business credit attached to your company’s EIN and not your SSN. Get money even in a recession!

Dealing with the IRS

Visit the IRS web site and get an EIN for the business. They’re free. Choose a business entity like corporation, LLC, etc. 

A company can start as a sole proprietor. But they will more than likely want to switch to a form of corporation or an LLC. 

This is to decrease liability in the event of a lawsuit. And it optimizes tax benefits.

Sole Proprietors Take Note

If you run a company as a sole proprietor, then at least file for a DBA. 

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

Also, per the IRS, with this structure there is a 1 in 7 probability of an IRS audit. There is a 1 in 50 probability for corporations! Avoid confusion and noticeably reduce the odds of an audit simultaneously.

Kicking Off the Business Credit Reporting Process

Start at the D&B website and get a free D-U-N-S number. This is how D&B gets a company in their system, to produce a PAYDEX score. If there is no D-U-N-S number, then there is no record and no PAYDEX score.

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

This way, Experian and Equifax have activity to report on.

Starter Vendor Credit

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

And with an established business credit profile and score you can start to get revolving credit and the more universal credit you see with MasterCard and Visa.

These kinds of accounts often tend to be for the things bought all the time, like marketing materials and office furniture.

But first of all, what is trade credit? These trade lines are credit issuers who give you starter credit when you have none now. Terms are usually Net 30, instead of revolving. 

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

Details

Unlike with revolving accounts, you have a set time when you must pay back what you borrowed or the credit you used. 

To start your business credit profile the proper way, get approval for vendor accounts that report to the business credit reporting agencies. Then use the credit. 

Repay what you used, and the account is on report to D&B, Experian, or Equifax.

Starter Vendor Credit – It Helps

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

You want 3 of these to move onto the next step, revolving store credit. Here are some stellar choices from us: https://www.creditsuite.com/blog/5-vendor-accounts-that-build-your-business-credit/ 

Revolving Store Credit

Once there are 3 or more vendor trade accounts reporting to at least one CRA, then progress to revolving store credit. These are businesses like Office Depot and Staples. 

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

For credit cards which are ultimately issued by a bank, you will need to supply your Social Security Number. This is a federal law to prevent money laundering. There is no way around it.

Fleet Credit

Are there more accounts reporting? Then progress to fleet credit. These are service providers like BP and Conoco. Use this credit to buy fuel, and to fix and maintain vehicles. Only use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, apply using the small business’s EIN.

For credit cards ultimately issued by a bank, you will need to supply your Social Security Number. This is a federal law to prevent money laundering. There is no way around it.

National Recessions Credit Suite

Learn more here and get started toward building business credit attached to your company’s EIN and not your SSN. Get money even in a recession!

More Universal Credit

Have you been sensibly managing the credit you’ve up to this point? Then move onto more universal credit. These are companies like Visa and MasterCard. Just use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, use your EIN.

For credit cards which are ultimately issued by a bank, you must supply your Social Security Number. This is a federal law to prevent money laundering. There is no way around it.

These are often MasterCard credit cards. With several trade accounts reporting, then these are doable.

National Recessions Credit Suite

Learn more here and get started toward building business credit attached to your company’s EIN and not your SSN. Get money even in a recession!

Monitor Your Business Credit

Know what is happening with your credit. Make certain it is showing up on your reports. Address any mistakes as soon as possible. Get in the habit of taking a look at credit reports and digging into the details, not just the scores.

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

At Equifax, monitor your account at: www.equifax.com/business/business-credit-monitor-small-business. Equifax costs about $19.99.

Update Your Information

Update the data if there are errors or the relevant information is incomplete. At D&B, go here: https://iupdate.dnb.com/iUpdate/viewiUpdateHome.htm. For Experian, go here: www.experian.com/small-business/business-credit-information.jsp. So for Equifax, go here: www.equifax.com/business/small-business.

Fix Your Business Credit

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

Disputes

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

Fixing credit report mistakes also means you specifically detail any charges you dispute. Make your dispute letter as clear as possible. Be specific about problems with your report. Use certified mail so you have proof you mailed in your dispute.

A Word about Business Credit Building

Always use credit smartly! Never borrow more than what you can pay back. Keep an eye on balances and deadlines for repayments. Paying off on time and in full does more to raise business credit scores than almost anything else.

Growing small business credit pays. Good business credit scores help a small business get loans. Your loan provider knows the business can pay its financial obligations. They recognize the company is authentic. 

The small business’s EIN connects to high scores and banks won’t feel the need to demand a personal guarantee. And you won’t need business loans for bad credit in a recession.

Business Loans for Bad Credit in a Recession –Takeaways

Looking for money, loans, credit cards, etc., to start a business can be a tricky task, especially if you have bad business credit. It may look impossible to start your business with bad credit, but it’s not anything you can’t work through. There are a number of choices. You’re not out of luck, not even during national recessions.

The post Fund Your Business With Bad Credit During National Recessions appeared first on Credit Suite.

Fundability and How it Helps During Recession 2020

Get through recession 2020 even though loan risk factors abound. But you can fix a lot of them with assuring fundability. The easiest way to do this is via building business credit. but first, let’s look at what a bank is going to want to know. they want to assess what sorts of small business loan risk factors you bring to the table.

Get By Recession 2020 and Answer Lender Questions and Address Small Business Loan Risk Factors With Fundability

Fundability – or, not just the ability to become funded but how desirable a company is for funding – means different things to banks, venture capitalists, angel investors, and informal investors. That being said, they all agree on a few fundamental principles.

1. Do You Have Positive Cash Flow?

Lenders aren’t in the business of giving you gifts. Instead, they would like to see a profit on their investment. For that reason, if you are bleeding funds, they are not going to want to pay for a piece of what, to their minds, is an unsatisfactory financial commitment.

How do you turn it around? Do some economic triage. Perhaps your firm will not need to have an alternative site. Perhaps you don’t need to have a full-time assistant when part-time will do. Maybe you should be leaning harder on your customers with pending invoices. This is one of the biggest small business loan risk factors.

Start-ups will get a different question – see # 2.

2. Do You Have a Great Product or Service?

For startup companies, the concern is more like: do you have a fantastic product or service? A concept in itself is not going to be sufficient, so you also will want to have a comprehensive business system in place. Investors are going to want to see what you can do with your amazing idea, and how it can be successfully monetized. 

For a brand-new company this is the biggest of all loan risk factors. Otherwise, why bother making a company at all? Particularly during Recession 2020.

3. What Will You Use the Cash For?

If your reply is an unclear, “general fund”, investors are not going to be showing an interest. First of all, they want you to demonstrate you will be responsible with their money. In addition, they also want to know that your business is organized. You can be the most innovative and the very least business-oriented man or woman out there, so long as anyone in your organization is dealing with the financial heavy lifting. Somebody must make sure that the taxes are paid and the invoices go out to your clients.

Investors don’t actually want to see you using the funds for daily operations. If your business is functioning profitably (see # 1), then investors will expect that you can manage those expenses. Rather, they want to see if you are going to employ their funding for something new and different. In general, this implies you must be using their funds for improvement – a new piece of essential machinery; a new shop; a second facility; a new product line – these are just a few plans which would fit the bill for progress. 

See # 4 for the similar question for startups. This is another one of the bigger loan risk factors. Lenders want to know their money isn’t being thrown away. After all, they make a lot more money if you pay your loan off and pay interest. Getting their money back through collections is a lot less profitable for them. And they are going to be looking to maximize their returns during Recession 2020.

4. How Much Funding Do You Need to Reach Positive Cash Flow?

For startups, a similar question is: just how much funding will you need to get to positive cash flow and profitability? In this case, your use for the money is still a distinct one – it’s to bring your new business to profitability.

5. How Much Revenue Yearly Can Your Business Generate After Three Years?

This question is the same whether you are presently in business or you are aiming to get a startup business funded. This will separate the lifestyle businesses (designed to make their owners glad but not develop into bigger players) from the scalable businesses. A lifestyle business normally won’t get this sort of funding. Instead, it will be funded by virtue of secured debt or bootstrapping or secured debt.

A scalable business can still be modest and not expect explosive growth, but still be fundable. Your new widget warehouse might begin small. Investors would expect it to have more moderate funding needs.

6. What Number of Your Existing Clients, Channels, and Partners Will Support Your New Business Growth and Volume?

Introducing new markets (or going for new customers or trying to market new products) will be viewed as riskier, unless you have an established history of financial success via pioneering. See # 7 for the semi-comparable question for startup ventures.

7. How Do You Know That Anybody Will Buy Your Product or Service?

If you do not know your market, then you will not know how to target to those customers. If your clients are middle-aged women, they will most likely respond to different techniques than if your customers are teen boys. Merely making a product and flinging it out to the ether, praying someone will buy it, is not going to sit well with investors. Instead, they want you to have scouted out your prospective clientele prior to you coming knocking and asking for funding.

The rest of the questions are only for startups.

8. How Much Funding Can You Get From Friends and Family to Launch Your Business?

Oftentimes these are your most important investors, or they might be your only investors. Treat them well. This goes double in Recession 2020.

9. How Much Funding Can You Personally Add?

Investors would like to know this amount because it indicates a commitment to the startup. If you want to keep your life savings, you’ll be a lot more careful with funds than if you’re just playing around with other people’s money. Of course you should be even more careful during Recession 2020.

10. Who Comprises Your Team?

Your team does not have to be employees of your business. It can also be consultants and mentors. Contact your school. There might be an educator interested in your new business, even if you never took a class with that person. Not a college alum? Try your nearby community college just the same. A professor might even want to use your company experience and story in a lecture.

Recession 2020 Credit Suite

Learn more here and get started with building business credit with your company’s EIN and not your SSN. Get money even in Recession 2020!

But How Do You Best Address These Risk Factors During Recession 2020? Build Business Credit!

Small business credit is credit in a business’s name. It doesn’t connect to an entrepreneur’s consumer credit, not even if the owner is a sole proprietor and the only employee of the business. 

Because of this, a business owner’s business and personal credit scores can be very different.

Consumer credit scores depend upon payments but also other elements like credit usage percentages. 

But for small business credit, the scores truly only hinge on whether a business pays its debts promptly.

The Process

Building company credit is a process. It does not occur automatically. A company has to proactively work to develop small business credit. 

Having said that, it can be done readily and quickly, and it is much quicker than building personal credit scores. 

Vendors are a big component of this process.

Doing the steps out of order leads to repetitive denials. Nobody can start at the top with small business credit. For instance, you can’t start with retail or cash credit from your bank. If you do, you’ll get a denial 100% of the time.

Company Fundability

A business needs to be fundable to credit issuers and vendors. This is the best way to address any small business loan risk factors.

Hence, a business needs a professional-looking website and e-mail address. And it needs to have site hosting bought from a vendor like GoDaddy. 

Additionally, company telephone and fax numbers need to have a listing on 411. You can do that here: http://www.listyourself.net.  

In addition, the business phone number should be toll-free (800 exchange or similar).

A business also needs a bank account dedicated solely to it, and it has to have all of the licenses essential for running. 

Licenses

These licenses all must be in the perfect, accurate name of the company. And they need to have the same small business address and phone numbers. 

So note, that this means not just state licenses, but possibly also city licenses.

Recession 2020 Credit Suite

Learn more here and get started with building business credit with your company’s EIN and not your SSN. Get money even in Recession 2020!

Working with the Internal Revenue Service

Visit the IRS web site and get an EIN for the business. They’re totally free. Choose a business entity like corporation, LLC, etc. 

A company can start off as a sole proprietor. But they more than likely want to change to a variety of corporation or an LLC. 

This is to decrease risk. And it will make best use of tax benefits.

A business entity matters when it pertains to taxes and liability in case of litigation. A sole proprietorship means the entrepreneur is it when it comes to liability and taxes. Nobody else is responsible.

Incorporating is a great way to address small business loan risk factors.

Kicking Off the Business Credit Reporting Process

Begin at the D&B website and get a free D-U-N-S number. A D-U-N-S number is how D&B gets a business into their system, to 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 sites for the business. You can do this at www.creditsuite.com/reports. If there is a record with them, check it for accuracy and completeness. If there are no records with them, go to the next step in the process. 

In this manner, Experian and Equifax have something to report on.

Starter Vendor Credit

First you ought to build trade lines that report. This is also called starter vendor credit. Then you’ll have an established credit profile, and you’ll get a business credit score. 

And with an established business credit profile and score you can begin to get credit at even more establishments.

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

But to start with, what is trade credit? These trade lines are credit issuers who give you starter credit when you have none now. Terms are commonly Net 30, rather than revolving. 

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

Details

Net 30 accounts have to be paid in full within 30 days. 60 accounts need to be paid completely within 60 days. Compared to with revolving accounts, you have a set time when you have to pay back what you borrowed or the credit you made use of. 

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

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

You want at least 3, preferably 5 to 8 of these to move onto the next step, retail credit. Here are some stellar choices from us: https://www.creditsuite.com/blog/5-vendor-accounts-that-build-your-business-credit/ 

Note: it can often be possible to apply for starter vendor credit without your Social Security number. Try it by leaving that section blank, or applying over the phone.

Retail Credit

Once there are at least 3 vendor trade accounts reporting to at least one of the CRAs, then move onto retail credit. These are stores, and they can be either net accounts or revolving.

Just use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, use the small business’s EIN on these credit applications – if you can.

Fleet Credit

Are there something like 8 to 10 accounts reporting? Then move onto fleet credit. These are businesses such as BP and Conoco. Use this credit to buy fuel, and to repair, and take care of vehicles. Only use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, make sure to apply using the business’s EIN. But that is only if that’s possible. It isn’t always possible. So, this is because federal law requires SSNs on anything to do with banks. If a card ultimately comes from a bank, then a Social Security number is necessary, no matter what.

Recession 2020 Credit Suite

Learn more here and get started with building business credit with your company’s EIN and not your SSN. Get money even in Recession 2020!

More Universal Credit

Have you been sensibly managing the credit you’ve up to this point? Then move onto service providers like Visa and MasterCard. Only use your Social Security Number and date of birth on these applications for verification purposes. This is a federal law requirement. For credit checks and guarantees, see if you can use your EIN instead.

These are commonly MasterCard credit cards. If you have 14 trade accounts reporting, then these are more likely to be attainable.

Monitor Your Business Credit

Know what is happening with your credit. Make certain it is being reported and address any mistakes as soon as possible. Get in the practice of checking credit reports and digging into the particulars, and 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 Equifax, you can monitor your account at: www.equifax.com/business/business-credit-monitor-small-business. That will cost about $19.99.

Update Your Information

Update the details if there are inaccuracies or the details is incomplete.

Fix Your Business Credit

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

Disputes

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

Fixing credit report inaccuracies also means you specifically spell out any charges you dispute. Make your dispute letter as understandable as possible. Be specific about the issues with your report. Use certified mail to have proof that you sent in your dispute.

Taking the initiative and handling any errors as fast as possible will also help address any small business loan risk factors.

A Word about Building Business Credit

Always use credit sensibly! Don’t borrow beyond what you can pay back. Track balances and deadlines for payments. Paying off promptly and completely does more to boost business credit scores than just about anything else. And beyond that, responsible account management will counter any small business loan risk factors.

Establishing company credit pays. Great business credit scores help a small business get loans. Your loan provider knows the business can pay its debts. They know the business is for real. 

The company’s EIN links to high scores and lending institutions won’t feel the need to call for a personal guarantee.

Getting Through Recession 2020: Takeaways

Business credit is an asset which can help your business in years to come. Learn more here and get started toward establishing company credit. And stop worrying about Recession 2020!

The post Fundability and How it Helps During Recession 2020 appeared first on Credit Suite.