10 Steps for Creating a Fundable Business Setup in 2022

It’s a new year. Whether you have a new business or you have been running your business for a while, these tips will help make sure you have a business setup for success in 2022 and beyond.

Why Does Your Business Setup Matter?

The way you set your business up affects its fundability. It cannot be fundable if it is not built on a foundation of fundability. What is fundability, and what are the building blocks of a fundable foundation?

Fundability is a business’s current ability to get funding. Of course, there are things you cannot control related to fundability.  Yet, there are plenty of factors you can control.  These are what you need to focus on.  They include setting your business up with a fundable foundation, and more.

Business Setup: a Fundable Foundation

Follow these steps to build a fundable foundation for your business.

Step 1: Don’t Neglect Your Business Name

This is more important than you may think. It includes a lot more than just choosing a name. First, check with your Secretary of State to find out if they require that a business name be unique.

Then, keep any indication of a high-risk or restricted industry out of your business name. Your business can be Rachel’s rather than Rachel’s Gas Station. This can help prevent an automatic or nearly automatic denial from a lender just because of the type of business. It can increase the chances that your business actually gets a chance at funding.

If your business is perceived as high risk from the beginning, the application may not even get to the underwriting process.

Step 2: Address Your Business Address

A fundable business setup includes a physical address where you can receive mail. Never use an UPS box or a P.O. Box. In fact, some lenders will not approve and fund unless this is the case. If you don’t want to use your home address, you can use a virtual address. In fact, it’s not a bad idea if you need to hold a meeting or an interview. Regus, Davinci, and Alliance Virtual Offices are all good options.  Still, keep in mind that there are credit providers that will not accept virtual addresses.

Step 3: Make the Right Call With Your Business Phone Number

Not surprisingly, toll-free phone numbers are best.  Lenders see them as a sign of business credibility. It’s very easy and inexpensive to set up a virtual local phone or a toll free number. If you want to avoid a separate phone, just have your business number forwarded to your personal phone.

Additionally, your business number needs to be listed with 411 for most credit issuers and lenders to approve you. Check for your record to see if you’re listed.  While you’re at it, make sure your information is accurate. No record? Then use ListYourself.net to get a listing.

Step 4: Jump in With An EIN

Now, get a free EIN for your business at IRS.gov. This is an identifying number for your business. It’s similar to your personal Social Security Number. You’ll use it on all of your business documents.

Step 5: Set Up an Incorporated Business Entity

Incorporating gives you more credibility in many cases.  It sets up your business as separate from you, its owner. Of course, by default incorporating reduces your personal liability. Other entities, like sole proprietorships and partnerships, do neither.

Step 6: Get Licensed

Contact State, County, and City Government offices to see if there are any required licenses and permits to operate your type of business. Licensing requirements differ depending on state, town, and industry. Always make sure you have the proper licensing for your corporation. Often, your Secretary of State will have this information.

Step 7: Open a Business Bank Account in the Business’s Name

You must have a separate, dedicated business bank account. Keep in mind, you have to keep business and personal funds separate for the IRS anyway. Having a separate business account makes that process easier and reduces the risk of audit at tax time.

More than that, many credit issuers require a business bank account before they will approve you for an account. In addition, the date you open your business bank account is the day that lenders consider your business to have started.

As a result, it doesn’t matter if you incorporated your business 10 years ago.  If you just opened the business bank account yesterday, then in the eyes of credit issuers your business started yesterday. Since there is a minimum time in business requirement on almost all business credit accounts, the sooner you open your business bank account, the better.

A business bank account is also required for getting a merchant account, so your business can accept credit cards. For years, studies have shown that customers spend more with plastic than with cash.

Step 8: Do Not Underestimate the Importance of a Business Web Domain and Professional Website

It’s highly likely that lenders and credit providers will research your business online. As you can imagine, it is best if they learn everything directly from your business website. Not having a company website can hurt your chances of getting business credit. Keep in mind though, an unprofessional website can do just as much damage.

You need it to be a professional website. That means it’s got to have helpful information for anyone who finds your company online. Additionally, it should be hosted professionally. Buy web hosting from a hosting company like GoDaddy or HostGator.  Try to avoid a free version of a hosting service like Weebly or Wix.

Your domain should be your business name, if possible. A free Wix or Weebly domain does not look professional. For example, www.yourbusiness.com appears much more professional than www.yourbusiness.wix.com.

Furthermore, you need a company email address for your business.  Guess what? It needs to be on the same domain as your website. It often comes with a website domain provider such as GoDaddy. Do not use Yahoo, AOL, Gmail, Hotmail, or other free email services. Again, owner@yourbusiness.com appears much more professional than yourbusiness@yahoo.com.

Beyond the Foundation

After you set your business up with a fundable foundation, the next business setup consideration is risk. For some businesses this isn’t an issue at all when it comes to funding.  Yet, for others, it can be tricky.

Step 9: Choose NAICS Codes Wisely

The North American Industry Classification System (NAICS) is the standard used by Federal statistical agencies. You choose your NAICS code on the IRS website.

There are inherent issues in every single industry.  However, those listed under certain NAICS codes are considered riskier than others. It doesn’t matter if the business is prospering, they are still considered a risky business. Usually higher risk comes from chances of injury or frequently engaging in cash transactions, or a low barrier to entry.

The IRS, lenders, banks, insurance companies, and business CRAs use NAICS codes. They are trying to determine if your business is in a high-risk industry classification. The NAICS puts out a list of high-risk and high-cash industries. Higher risk industries include casinos, pawn shops, and liquor stores but the NAICS list is old and has not been updated in years.

Why Risk Matters

When it comes to funding, risk matters big time. There are several industries where lending institutions are hesitant to do business. In those particular cases, there are stricter underwriting guidelines. In contrast, some industries are considered so risky they are automatically denied.

Those businesses are left looking for other business funding solutions.

These can include:

Using a Different NAICS Code

Of course you want to be impeccably honest when it comes to selecting your NAICS code. Still, if more than one can apply, you don’t have to choose the one that’s higher risk. It pays to check and be careful when making your selection.

If only high risk codes apply, there’s nothing at all wrong with changing your business to match a related but lower risk code.

Step 10: Be Consistent!

A big reason for many credit and loan denials is inconsistent business information.  This makes it hard for the  lender to locate a business offline or online. It also sets off fraud alarms in the minds of those making lending decisions.

To avoid this, make certain your business name and other information is the same everywhere. That includes incorporation papers, licenses, utility statements, and bank statements among other things.

If you change your business name, be sure to change it everywhere.

This means you change it in these places, among others:

  • Your website
  • 411 listing
  • Your records with the business CRAs (D&B, Experian, and Equifax)

Minor details such as using an ampersand in your name in one place and the word “and” in another can cause a lot of problems. Be careful and consistent with all business information.

First Funding Options

While you are working on setting up your business, you are going to need funding. If your business setup is not yet conducive to fundability, you’ll need to pursue some alternative options. One great possibility is the Credit Suite Credit Line Hybrid.

Credit Line Hybrid

A credit line hybrid is a form of unsecured funding. Our credit line hybrid has an even better interest rate than a secured loan. You can get 0% business credit cards with stated income, and many of these report to business CRAs.  That means you can build business credit at the same time.

This will get you access to even more cash with no personal guarantee.

Credit Line Hybrid: Terms and Qualifying

You need a credit score or a guarantor with a credit score of at least 680.  There is no requirement for financials, and you can often get up to $150,000.  Be aware, some cards may report on your personal credit.

Business Setup for Fundability

Honestly, you cannot build a fundable business without first having a fundable foundation. This is what the business setup is all about. All other aspects of fundability hinge on the foundation, so don’t neglect it. Don’t skip it. If your business is already operating and you need to backtrack to make this happen, do it now. The sooner the better.

The post 10 Steps for Creating a Fundable Business Setup in 2022 appeared first on Credit Suite.

2022 Guide to Fundability and a Fundable Definition

The new year is a great time to review fundability. To do that, it’s important to have a fundable definition that you understand. Essentially, fundability is the current ability of your business to get funding. There are 125 factors that affect fundability.  Some of them you can control, and some of them you can’t. Having a fundable business means you can get the funding you need for your business, when you need it.  

Fundable Definition: A Fundable Business Has a Foundation of Fundability

The way your business is set up lays down the foundation for fundability. This includes a number of factors. 

Business Name

First, keep the name of a high-risk industry out of your business name. Maybe try Bobby’s instead of Bobby’s Gas Station. This will help prevent early denial from a lender that only sees the “gas station” part. 

Another common reason for credit denials is that the lender can’t easily locate a business.  So, name your business in a way that makes it easy to find both online and offline. The name on your application should be exactly the same as what is online and on your Secretary of State paperwork. 

It also needs to be the same everywhere else. This includes corporation papers, licenses, utility statements, and bank statements. In fact, all business information needs to be consistent. That means, if you change your business name, you have to be sure to change it everywhere. 

Even the smallest details make a difference. If you use an ampersand in one place and the word “and” in another, you are going to run into issues.  If you hyphenate your last name on one document, then you do not on another, a red flag will go up.

Business Address

Next, your business address needs to be a physical address where you can receive mail. Do not use a UPS box or a PO Box. A virtual address may work if you need to hold a meeting or an interview.  In fact, it’s a lot more professional than meeting at your kitchen table. Still, not all credit providers will accept a virtual address. 

EIN

Get a free EIN for your business at IRS.gov.  This is an identifying number for your business similar to your personal SSN. Use your EIN to open a bank account and to build a business credit profile. 

Business Entity

It’s important to incorporate. Incorporating creates a separate business entity, thereby adding a layer of protection between your business’s debts and actions and you.  It doesn’t matter if you choose to do so as an S-corp, LLC, or C corporation when it comes to fundability.  Work with an attorney or tax professional to figure out which option will work best for your budget and need for liability protection.

Business Phone and 411 Listing

For fundability purposes, you need a separate, dedicated business phone number.  A separate number keeps your family from accidentally answering a business call, and it means your listing will have the name of your business and not your own. It should be listed with 411. Many credit providers actually require this. 

Toll-free phone numbers are best.  Lenders see them as a sign of business credibility. Thankfully, it’s very easy and inexpensive to set up a virtual local phone number or a toll free 800 number. Don’t use your personal cell or home number. Instead, have your business number forward to your personal number.  It’s also easy, and perfectly fine, to use VoIP.  

Business Licenses

Make sure you know what the licensing requirements are for your business at both the state and local levels. 

Web Domain and Professional Website

Lenders and credit providers will research your corporation on the internet. Consequently, it is best if they learn everything directly from your business website. Not having a website can hurt your chances of getting business credit. 

The website needs to be well put together and user friendly.  If you can’t make it look professional, pay to have it professionally designed.  It’s also important to pay for web hosting.  Do not use a free service. 

Along the same lines, you need a company email address for your business that has the same domain as your website.  This is more professional than a free service URL such as Gmail or Yahoo.  It also greatly helps your chances of getting approval from a credit provider.  

Business Bank Account

You must have a separate business bank account. The IRS frowns on mixing business funds and personal funds anyway. Separate accounts make it easier to keep funds separate. Beyond that, the date you open your business bank account is the day that lenders consider your first day of business.  

As a result, if you opened a business bank account yesterday, your business started yesterday. That’s the case regardless of how long you have actually been in business.  Time in business is a major factor for credit providers when it comes to approvals, so this is important. 

A separate business bank account also means you can sign up for a merchant account, so you can take credit cards. Study upon study has shown that people will spend more if they are using credit rather than cash.

Get Set Up With the Business Credit Reporting Agencies

You’ll need a D-U-N-S number. You can get one for free on the Dun & Bradstreet website. You cannot have a business credit score with D&B without this number. Since they are the largest and most commonly used business credit reporting agency, a D-U-N-S number is essential.

Once you are in D&B’s system, search Experian and Equifax’s sites for your business as well. You’ll have an identification number from Experian as well.  It’s called a BIN, but Experian assigns that number. You do not have to apply.

The Foundation is What You Can Control

You can control the way your business is set up.  That’s good, because it is a huge piece of fundability.  In contrast, the rest of the factors that affect fundability are not quite as controllable. 

Still, you have to understand exactly what else affects the fundability of your business if you hope to get a handle on it.

Fundable Definition of Other Business Data Agencies

There are other business data agencies that affect reports indirectly. This is in addition to the business credit reporting agencies that directly calculate and issue credit reports. 

Two examples of this are LexisNexis and The Small Business Finance Exchange.  These agencies gather data from a variety of sources, including public records. They even have access to information relating to automobile accidents and liens. You cannot access or change the data the agencies have on your business.  However, you can ensure that any new information they receive is positive. Enough positive information can help counteract any negative information from the past.

Fundable Definition: Personal and Business Credit History 

Your credit history has everything to do with your credit score, a huge factor in fundability. Personal credit history consists of a number of things including: 

  • How many accounts are reporting payments?
  • How long have you had each account? 
  • What type of accounts are they?
  • How much credit are you using on each account versus how much is available?
  • Are you making your payments on these accounts consistently on-time?

But with business credit, the main issue is whether you’re paying your bills on time.

The point is, the more accounts you have reporting on-time payments to the business credit reporting agencies, the stronger your business credit score will be. 

Fundable Definition: Financial Statements

Both your personal and business tax returns need to be in order. It is best to have an accounting professional prepare regular financial statements for your business. Having an accountant’s name on financial statements lends credence to the legitimacy of your business. 

Often tax returns for the previous three years will suffice for personal financials. Honestly, it’s best to have a tax professional prepare them. Now, this is the bare minimum you will need. Other information lenders may ask for include check stubs and bank statements, among other things. 

Fundable Definition: Bureaus

There are other agencies with data relating to your personal finances as well. For example, FICO is where most traditional lenders will look for personal credit.  Your personal FICO score needs to be as strong as possible. 

ChexSystems is another example. They track bad check activity and their report makes a difference when it comes to your bank score. If you have too many bad checks, you will not be able to open a bank account. That will cause serious fundability issues. 

There are other bureaus with all sorts of information on you, like: 

  • Have you ever been convicted of a crime? 
  • Do you have a bankruptcy or short sale on your record?  
  • Do you have any liens or UCC filings? 

All of this can and will play into the fundability of your business. 

Personal Credit Scores and Reports

Your personal credit scores from Experian, Equifax, and Transunion affect fundability as well. If your scores aren’t great right now, work on them. The number one way to get a strong personal credit score or improve a weak one is to make payments consistently on time. 

Monitor personal credit reports frequently to make sure the information is correct and current.

Application Process

Did you know that even the process of applying for a loan can affect fundability? For example, consider the timing of the application. Maybe you paid off a large account recently.  The payoff will increase your score.  However,  that may not be reflected on your credit reports immediately. It may be best to wait to apply until after the account shows as paid.  

Also, your business name, business address, and ownership status need to be verifiable. Lastly, make sure you choose the right lending product for your business and your needs. For example, do you need a traditional loan or a line of credit?  Would a working capital loan or expansion loan work best for your needs? Choosing the right product to apply for can make all the difference. 

Get a Handle on a Fundable Definition

Obviously It can be difficult to get a handle on a fundable definition. This is mostly because the entire idea of fundability is so overwhelming. 

 Imagine, it is affected not only by the decisions you make today, but also decisions you made in the past. Not to mention, there are things that affect fundability that you do not have any control over. Understanding exactly what fundability is and what affects it is a great start to getting your business in a good position. 

The post 2022 Guide to Fundability and a Fundable Definition appeared first on Credit Suite.

Setting up a Business Email and Website to be More Fundable

When You’re Setting Up a Business, Did You Know You Need to Pay Attention to Your Company Email and Website?

Setting up a business means attending to what seems like a million little details. Your corporate email and website are two of those details. Don’t drop the ball on them!

But let’s start with business credit.

Business Credit

This is credit in a corporation’s name. It is not tied to the owner’s creditworthiness. Instead, biz credit scores depend on how well a company can pay its bills. Hence consumer and corporation credit scores can vary dramatically.

The Benefits

There are no demands for a personal guarantee. You can quickly get business credit regardless of personal credit quality. And there is no personal credit reporting of company accounts. Biz credit utilization won’t affect your consumer FICO score. Plus the owner isn’t personally liable for the debt the corporation incurs.

The Details

Getting corporate credit is not automatic. Building it requires some work. Some of the steps are intuitive, and some of them are not.

Fundability

Fundability is the current ability of a firm to get funding. Some factors are within your control. Others (like your time in business) aren’t. Your online presence and data are one area which is at or close to 100% with your control.

Business Credit, Fundability, and Business Funding Applications

The better your business credit and fundability are, the more likely you will get approval for financing. Today, let’s concentrate on your online presence, that is, your email address and your website.

Lenders Use Data to Decide on Your Application

They check information from a variety of sources, and they don’t tell you about any of them. Knowing what these secret sources measure can only help you. Understanding what matters the most makes getting a loan A LOT easier, because you know what to improve first. This information is the difference between getting an approval and getting a denial.

Lenders Use LexisNexis Information

LexisNexis is one source where many of the lenders reviewing loan applications get their information from. They offer information regarding likelihood to pay, or not. Lenders compare LexisNexis information to what you put on your loan application. If the application and LexisNexis don’t match, then, the loan providers will deny you a loan. They will see the inconsistency as fraud.

LexisNexis connects all of the data that pertains to you, both positive and negative. They have access to

  • criminal records
  • every email address you’ve ever used (these are your professional and personal email addresses)
  • your speeding tickets
  • any mortgage you have ever held

Keep your business protected with our professional business credit monitoring.

Lenders Use Online Information Including Your Business Email and Website

One place where lenders and vendors will be looking for your company is online. Even if they’re not specifically checking out your online presence, they may still need to know how to order your product or service, or where to send praise or complaints. Your online presence is where they will find that information, or not.

Your Business Email and Website: Your Website

What happens if your family member or a friend built your website? Maybe that person is talented, but corporate websites differ from personal ones. A business website needs to be easy to navigate. It needs to answer customers’ questions.

Styles differ. Wedding photographers and construction companies differ. They have dissimilar sites and design sensibilities, but they both have Contact and About pages, and information about what they do.

Make sure you own your domain, and not just your domain at Wix or WordPress or the like. You can do this by buying hosting. This is through hosting companies like GoDaddy or HostGator.

Your Business Email and Website: Your Email Address

Given that so much more of lending decisions is going on online these days, then your email address is an opportunity for your firm to puts its best foot forward. Don’t squander this easy and free opportunity! General email addresses like admin@yoursite.com tend to be best.

With a general email address, if someone leaves your employ, another employee can seamlessly take over that email address. A username like admin, webmaster, or even hello is far, far better than cutiepie or the like, even if you’re in a playful industry that caters to kids. After all, your bank and banker aren’t.

Your Business Email and Website: Records Congruency

Keep your records consistent! This includes your online records. LexisNexis and the SBFE (Small Business Financial Exchange) are looking at everything, so it had better match.

Inconsistent records will lead to a denial due to fraud because that’s how lenders interpret inconsistencies. This is a cause of denials which is in the owner’s hands. You have the ability to change and correct this.

This means your corporate name, address, phone number – everything! – must look the same in these places and more:

  • Every place you have an online presence (your website, Yelp, SoTellUs, etc.)
  • IRS records
  • Company records with Dun & Bradstreet, Experian, and Equifax
  • All licenses needed to run your business
  • Incorporation documents

Copy/paste this information; don’t chance it with retyping.

Keep your business protected with our professional business credit monitoring.

Build Fundability on Business Credit Applications to Avoid Denials

Keep your firm looking fundable (legit) with:

  • A professional website and email address
  • A toll-free phone number
  • List your phone number with 411
  • A business address (not a PO box or a UPS box)
  • Get all necessary licenses

Your Business Email and Website: Online Fundability

There are some aspects of fundability where you should pay particular attention to what’s going on online. They include:

  • Firm owners listed and listed ownership uniformity
  • Company name and address uniformity
  • Industry aligned
  • Company domain
  • Information uniform on all records

Online Fundability: Business Ownership Listings

Records consistency matters here, too. Your website should show who owns your company. And that information needs to be consistent. So if the owner is named Susan Johnson on your website’s About page, then she can’t be listed as Sue Johnson on your Contact page. If your ownership changes, you need to show that here.

Business Name and Address Uniformity

Abbreviations can be your downfall here, as can punctuation like hyphens, commas, and colons. If your Contact page says your main office is on Main Street, then your About page can’t say it’s on Main St.

If you move, or you add subsidiaries and other locations, then you need to update that information everywhere. This even means whether you use your 5-digit ZIP code, or a ZIP plus 4 code (9 digits).

Fundability: Industry Alignment

If your industry is over the road trucking, then it needs to be listed that way. Pro tip: when your industry can be called several different names, like long distance trucking, mention those other phrases on your website.

Your Business Email and Website: Company Domain

When your company domain matches your company name, it helps with fundability. Pro tip: try to match what people will be searching for online, so if (for example) the word ‘brothers’ is in your company name, then determine if ‘brothers’ or ‘bros’ will be used by people searching for your company and its goods and services online.

Keep your business protected with our professional business credit monitoring.

Bonus: What Your Website Needs

Good websites can help you get funding and convert prospects to customers. While websites differ, there are some things they all need. Such as:

  • Easy to use navigation – hiding important information won’t help
  • Speed – if visitors have to hang around and wait for pages to load, they’ll go elsewhere
  • Intuitive organization – keep your address and phone numbers on your About and Contact pages because people expect that data to be there

Your website also needs:

  • Branding – if your company is known for the color green, but it’s nowhere to be found on your website, you’re losing an opportunity for connection
  • Visual design – ugly websites, and those which haven’t had a design update in a decade are not conducive to enhancing your reputation or making sales
  • SEO – search engine optimization means making your site easier to find. Stuffing in keywords doesn’t help with this, but writing honestly about your biz and using the kinds of terms people search for? That does

One of the more vital items your website needs is content. This can mean blogging, and it certainly means creating pages which explain what you do and what sets your biz apart from its competition. It also means a page devoted to each product you sell or service you provide. Again, you’re making it easier for your prospects to find you.

Setting Up a Business Email and Website: Takeaways

More fundable companies can get more money, and they tend to get more prospects who decide to become customers. One area of fundability you have total or near total control over is your corporate online presence. Keep it professional, uniform. and appealing, and easy to use. We can help you with even more aspects of fundability.

The post Setting up a Business Email and Website to be More Fundable appeared first on Credit Suite.

How Being Fundable Helps You Get the Best Business Loans

Everyone wants the best of the best, and it should be no different when it comes to business loans.  However, you may need to change your thinking about what actually makes the best business loans the best.  Build Fundability So You Can Get the Best Business Loans For example, do great terms make a loan … Continue reading How Being Fundable Helps You Get the Best Business Loans

How Being Fundable Helps You Get the Best Business Loans

Everyone wants the best of the best, and it should be no different when it comes to business loans.  However, you may need to change your thinking about what actually makes the best business loans the best. 

Build Fundability So You Can Get the Best Business Loans

For example, do great terms make a loan one of the best?  Could it be low rates? These things are awesome. However, the best business loans are the loans you can get.  Of course, you can look at the cream of the crop. Still, if you cannot access them, they will not do you any good.  You need to know what the best business loans are that you can access. Furthermore, you need to know how to gain access to those that are even better.  

Find out why so many companies use our proven methods to get business loans

What Makes a Loan One of the Best? 

Fortunately, U.S. News helps us out by outlining the best business loans in various categories. When compiling their list, they consider such factors as product availability, terms, and service ratings. 

Best Business Loans for Borrowers with FICO Credit Scores as Low As 530

BlueVine takes the prize in this category. The minimum loan amount available from them is $5,000 and the maximum is $100,000. Annual revenue must be $120,000 or more and the borrower must be in business for at least 6 months. Personal credit score has to be at least 600. It is also important to know that BlueVine does not offer a line of credit in all states. 

They report to Experian.  They are one of the few invoice factoring companies that will report to any business credit bureau.  This helps build business credit and in turn, fundability.

Best Business Loans for Up to Five Year Loan Terms

The winner in this category is Funding Circle.  Honestly, if you’re looking for a low APR, then this is your go-to.  They have fixed rate term loans and require a credit score of 620 or above.  There is no minimum revenue requirement, but they do require you to be in business for at least 2 years.  

Best Business Loans With No Collateral Required

OnDeck offers lines of credit and term loans with fixed interest rates.  You can get up to $500,000 with a term loan.  The minimum FICO they require is 600. In addition, you must have $100,000 minimum annual revenue and be in business for at least one year.  

Best Small Business Loans for Up to $1 Million 

With a large selection of financing products that includes term loans, Rapid Finance can be a great option for larger amounts.  In addition to term loans, they offer bridge loans, healthcare cash advances, and lines of credit.  Terms are from three to six months. Amounts range from $5,000 to $1,000,000. Unfortunately, they do not make their minimum credit score readily available on their website.  However, you can use their quote tool to get an idea of what you qualify for. 

Best Business Loans for Borrowers In Business for 6 Months or More

StreetShares offers invoice financing, term loans, and lines of credit.  The number of years in business requirement is one.  They require less minimum annual revenue than the others at only $25,000.  The minimum credit score is 600.  

The key with each of these loans is, your ability to get them is dependent on the fundability of your business.  

What is Fundability? 

Fundability is, in short, the ability to get funding.  It is the complete picture of your business and personal financing and your ability to repay debt. If you think of fundability as a puzzle, there are hundreds of pieces that come together to complete it.  The problem is, a lot of business owners cannot see the complete picture because they are unaware of what additional pieces may be floating around out there.  

Also, unlike a puzzle, the pieces are not all the same size.  Some are very large, while others are smaller. If your large pieces are in great shape, the smaller ones may not matter so much. If, however, your large pieces, like credit history, are not so great, the smaller pieces can make a much bigger difference in your ability to get the best business loans. 

What Makes Up Fundability?

What are these puzzle pieces and how can you make sure they are in the best possible shape?  Hold on to your hats. Some of these may surprise you.

Contact Information

That’s right.  Even something as small as your contact information can affect the fundability of your business.  Your business needs to have its own phone number, fax number, and address.  

EIN

An EIN is an identifying number for your business that works in a way similar to how your SSN works for you personally.  You can get one for free from the IRS.

Incorporation

Incorporating your business as an LLC, S-corp, or corporation is necessary to fundability.  It lends credence to your business as one that is legitimate. It also offers some protection from liability. 

Business Bank Account

You have to open a separate, dedicated business bank account.  There are a few reasons for this.  First, it will help you keep track of business finances.  Also, it will help you keep them separate from personal finances for tax purposes. 

Additionally, there are several types of funding you cannot get without a business bank account.  Many lenders and credit cards want to see one with a minimum average balance.  Also, you cannot get a merchant account without a business account at a bank. As a result, you cannot take credit card payments.  Studies show consumers tend to spend more when they can pay by credit card.

Licenses

For a business to be legitimate and fundable it has to have all of the necessary licenses it needs to run.  If it doesn’t, warning signals are going to go off all over the place.  Do the research you need to do to ensure you have all of the licenses necessary to legitimately run your business at the federal, state, and local levels. 

Website

Your business website, or lack thereof, can affect your ability to get funding. In fact, these days, if you don’t have an online presence you may as well not even exist.  Still, a poorly put together website can be even worse.  Truly, it is the first impression you make on most. If it appears to be unprofessional, it will not look good to consumers or potential lenders. 

Spend the time and money necessary to ensure your website is professionally designed and works well.  Pay for hosting too. Don’t use a free hosting service.  Similarly, your business needs a dedicated business email address.  Make sure it has the same URL as your Website. Don’t use a free service such as Yahoo or Gmail.

Find out why so many companies use our proven methods to get business loans

Business Credit Reports

Much like your consumer credit report does for the individual, business credit reports detail the credit history of your business.  Basically, they are a tool to help lenders determine how credit worthy your business is.  

Where do business credit reports come from?  There are a lot of different places, but the main ones are Dun & Bradstreet, Experian, Equifax, and FICO SBSS.  You have no way of knowing which one your lender will choose.  So, you need to make sure all of these reports are up to date and accurate. 

Other Business Data Agencies 

In addition to the business credit reporting agencies that directly calculate and issue credit reports, there are other business data agencies that affect those reports indirectly.  Two examples of this are LexisNexis and The Small Business Finance Exchange. These two agencies gather data from a variety of sources, including public records.  This means they could even have access to information relating to automobile accidents and liens. While you may not be able to access or change the data these agencies have on your business, you can ensure that any new information they receive is positive.  Enough positive information can help counteract any negative information from the past. 

Identification Numbers Best Biz Loans Credit Suite

In addition to the EIN, there are identifying numbers that go along with your business credit reports.  You need to be aware that these numbers exist.  Some of them are assigned by the agency, like the Experian BIN.  One, however, you have to apply for. It is absolutely necessary that you do. 

Dun & Bradstreet is the largest and most commonly used business credit reporting agency.  Every credit file in their database has a D-U-N-S number.  To get a D-U-N-S number, you have to apply for one through the D&B website

Business Credit History

Your credit history is the crux of your credit score, which is a huge factor in the fundability of your business.  

It includes a number of things like: 

  • How many accounts are reporting payments?
  • How long have you had each account? 
  • What type of accounts are they?
  • How much credit are you using on each account versus how much is available?
  • Are you making your payments on these accounts consistently on-time?

The more accounts you have reporting on-time payments, the stronger your credit score will be. 

Business Information

On the surface, it seems obvious that all of your business information should be the same across the board everywhere you use it.  However, when you start changing things up like adding a business phone number and address or incorporating, you may find that some things slip through the cracks. 

This is a problem because a ton of loan applications are turned down each year due to fraud concerns simply because things do not match up.  Maybe your business licenses have your personal address but now you have a business address.  You have to change it. Perhaps some of your credit accounts have a slightly different name or a different phone number listed than what is on your loan application. Do your insurances all have the correct information?  

The key to this piece of the business fundability puzzle is to monitor your reports frequently.   

Financial Statements

First, there is the obvious. Both your personal and business tax returns need to be in order.  Not only that, but you need to be paying your taxes, both business and personal.  

Business Financials

It is best to have an accounting professional prepare regular financial statements for your business. Having an accountant’s name on financial statements lends credence to the legitimacy of your business. If you can’t afford this monthly or quarterly, at least have professional statements prepared annually. Then, they are ready whenever you need to apply for a loan. 

Personal Financials

Often tax returns for the previous three years will suffice.  Get a tax professional to prepare them.   This is the bare minimum you will need.  Other information lenders may ask for include check stubs and bank statements, among other things. 

Find out why so many companies use our proven methods to get business loans

Bureaus

There are several other agencies that hold information related to your personal finances that you need to know about.  Everyone knows about FICO.  Your personal FICO score needs to be as strong as possible. It really can affect business fundability and almost all traditional lenders will look at personal credit in addition to business credit. 

In addition to FICO reporting personal credit, you have ChexSystems.  In the simplest terms, this keeps up with bad check activity and makes a difference when it comes to your bank score.  If you have too many bad checks, you will not be able to open a bank account.  That will cause serious fundability issues. 

For this point, everything comes into play.  Have you ever been convicted of a crime? Do you have a bankruptcy or short sell on your record?  How about liens or UCC filings? All of this can and will play into the fundability of your business. 

Personal Credit History

Your personal credit score from Experian, Equifax, and Transunion all make a difference.  You have to have your personal credit in order because it will definitely affect the fundability of your business.  If it isn’t great right now, get to work on it.  The number one way to get a strong personal credit score or improve a weak one is to make payments consistently on time. 

Also, make sure you monitor your personal credit regularly to ensure mistakes are corrected and that there are no fraudulent accounts being reported. 

Even the Application Process Matters

Often this part isn’t even considered by those looking for the best business loans.  For example, consider the timing of your application.  Is your business currently fundable?  If not, do some work first to increase fundability.  

Then, are your business name, business address, and ownership status all verifiable.  Lenders will check into it.  Also, make sure you choose the right lending product for your business and your needs. Do you need a traditional loan or a line of credit?  Would a working capital loan or expansion loan work best for your needs?  Choosing the right product to apply for can make all the difference. 

Increase Fundability to Get the Best Business Loans

How do you get the best business loans?  You need to know how to find the best business loans for your specific business needs.  Make sure your fundability is as strong as possible. Pay bills on time, work on building business credit, and make sure to dot all your i’s and cross all your t’s. Do these things, and most all business loans will be yours for the taking. 

The post How Being Fundable Helps You Get the Best Business Loans appeared first on Credit Suite.

Get Business Credit Without SSN, and Other Tips for Becoming Fundable

Did you know you can apply for credit in your business name and it won’t hit your personal credit report?  You can, no matter what is happening with the economy!  There’s a trick to it though.  You have to set your business up properly, and you have to apply with the right information.  It is possible to get business credit without SSN being an issue.

Get Business Credit without SSN and Make Your Business More Fundable

When you get business credit without using your SSN, you take the first step in obtaining credit in the name of your business.  That is separate credit that only affects the credit score of your business, not your personal credit score. 

Of course, there is way more to separating business credit from personal credit than knowing how to get business credit without SSN, but that is definitely a place to start.

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit, even in a recession.

Get Business Credit Without SSN

get biz credit without SSN Credit SuiteThere is really no amazing trick to this.  You can easily get business credit without SSN by simply using an EIN (Employer Identification Number) in place of the SSN on credit applications.  That one simple step will disconnect debt taken in the name of your business from your personal debt.  Again, there are a few more steps to keep it completely separate but, this is huge and very simple. 

You can get an EIN for free on the IRS website.  Just go to IRS.gov and apply.  The process is fast.  Once you have that number, you have taken the first step in building credit for your business separate from yourself.  This is the pivotal step getting business credit without your SSN.

It is important to note that you may have to provide your SSN for identification purposes to help prevent fraud.  However, this is different than getting credit using your SSN.  If you use your social security number for identification purposes only, the debt will still not be connected to it. 

Separate Your Bank Accounts

You have to open a separate, dedicated business bank account.  There are a few reasons for this.  First, it will help you keep track of business finances.  It will also help you keep them separate from personal finances for tax purposes. 

There’s more to it however.  There are several types of funding you cannot get without a business bank account.  Many lenders and credit cards want to see one with a minimum average balance.  In addition, you can’t get a merchant account without a business account at a bank. The result is, you cannot take credit card payments.  Studies show shoppers usually spend more when they can pay by credit card.

Kick Your Business Out of the Nest! Separate Contact Info Is a Must

Your business needs its own phone number, fax number, and address.  You can still run your business from your home or on your computer.  You don’t even have to have a fax machine.  

In fact, you can get a business phone number and fax number that will work over the internet instead of phone lines without a lot of trouble.  In addition, the phone number will forward to any phone you want it to.  You can simply use your personal cell phone or landline if you want.  Whenever someone calls your business number it will ring straight to you. 

Faxes can be sent to an online fax service, if anyone ever happens to actually fax you.  This part may seem outdated, but it does help your business appear legitimate to lenders. 

You can use a virtual office for a business address. How do you get a virtual office?  What is that?  It’s not what you may think.  This is a business that offers a physical address for a fee, and sometimes they even offer mail service and live receptionist services.  In addition, there are some that offer meeting spaces for those times you may need to meet a client or customer in person.

Make Sure Your Website and Email Address are In Synch

What does a website and email address have to do with business funding?  These days, you do not exist if you do not have a website.  However, having a poorly put together website can be even worse.  It is the first impression you make on many, and if it appears to be unprofessional it looks bad to lenders as well as customers. 

Spend the time and money necessary to make sure your website is professionally designed and works well.  Pay for hosting too. Don’t use a free hosting service.  Along these same lines, your business needs a dedicated business email address.  Make sure it has the same URL as your Website.  Don’t use a free service such as Yahoo or Gmail. 

Incorporate

Incorporating your business as an LLC, S-corp, or corporation is non-negotiable.  It lends credence to the legitimacy of your business. It also offers some protection from liability. 

Which option you choose does not matter as much for fundability as it does for your budget and needs for liability protection.  The best thing to do is talk to your attorney or a tax professional.  

Now, incorporation is important to business credit building.  However, so is time in business.  The longer you have been in business the more fundable you appear to be. Time in business starts on the date of incorporation, regardless of when you actually started doing business. That means, it is vital to incorporate as soon as possible.

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit, even in a recession

Where to Start to Get Business Credit without SSN

Once you have these things in place, you can start applying to get business credit without SSN, but with your EIN.  Don’t just jump into credit cards.  It helps to begin with starter vendors.  There are a few out there.  

Starter vendors are vendors that sell items you use everyday in the course of business.  They will extend credit in the form of net terms on invoices without a credit check.  Then, they will report payments on those invoices to the business credit reporting agencies.  

If you have followed the steps, then when they report those payments, they will be reporting in your business name to the business credit reporting agencies such as Dun & Bradstreet, Equifax, and Experian. This is how you start to build your business credit score. 

Get Business Credit Without SSN: What Next? 

After you get enough starter vendor accounts reporting, you’ll be able to apply for other types of cards and without your SSN.  The key is to apply for certain types of cards in a specific order.  For example, it is best to start with store cards.  These are cards that are issued with a specific store name.  Typically, you can only use them at that specific store or on that store’s website.  Examples include Office Depot and Best Buy. Some fleet cards fall into this category as well. 

Fleet cards are cards that you can only use for fuel or auto repair and maintenance.  It is usually easier to get approval for these cards after you have several starter vendors and store cards reporting.  Examples of fleet credit cards include Fuelman and Shell. 

After enough of these types of accounts are reporting to the business credit reporting agencies in your business name, with your EIN, then you can apply for general use credit cards.  Those are the credit cards you can use anytime, anywhere, on anything.  Usually, they have the best interest rates and rewards.  They also have the highest credit limits, meaning you have instant access to the funds you need to run your business day in and day out. 

Get Business Credit With SSN: A Warning

Here are a few key things to remember when you get business credit without SSN.  

First, the whole point is to separate your business credit from your personal credit.  Why do this?  There are a few reasons.  For example, you typically get a higher credit limit when you get credit related to your business with an EIN than you would with your SSN. 

Another reason, however, is so that your personal credit is not affected if you have problems on your business credit report.  However, you want your business credit to be strong also.  The only way to make this happen is to handle your credit responsibly.  Do not bite off more than you can chew. Make your payments regularly and on-time.  Bad business credit is just as harmful as no business credit. 

Keep and Eye on Your Business Credit

It’s important to keep an eye on your business credit while you are going through this process.  Once you get business credit without SSN, you’ll need to keep tabs on which accounts are reporting, how many accounts are reporting, and what your score looks like.  This is how you will know when it is time to apply for other types of cards. 

It is also how you will know when there is a mistake.  If you do see a mistake, you can contest it in writing to have it removed.  

When it comes to business credit monitoring, there are a few different credit reporting agencies. The main three we have already mentioned.  They include Dun & Bradstreet, Experian, and Equifax.  There are others as well, but if you know what your business credit score is with the main three, you can have a good idea of what it is with any credit reporting agency. 

Funding in the Meantime

It takes some time to get business credit without SSN.  If you need money to run your business quickly, while you work through the process, you might consider a credit line hybrid. This is revolving, unsecured financing that allows you to fund your business without putting up collateral.  Furthermore, you only pay back what you use.  

It’s easier than you may think to qualify.  You can do so with a personal credit score that is way below what you would need to get approval for a term loan or line of credit at a traditional bank.  The minimum is 685. Even if you did get approval at a traditional bank with this score, your interest rate would be much more than what is typical with a credit line hybrid. 

In addition to meeting the minimum credit score requirement, you can’t have any liens, judgments, bankruptcies or late payments.  Also, in the past 6 months, you should have less than 5 credit inquiries, and less than a 45% balance on all business and personal credit cards.  While it is preferred that you have established business credit as well as personal credit, it is possible to qualify without business credit. In fact, a credit line hybrid can help build business credit. 

What If I Don’t Qualify?   

If you do not meet all of the requirements, there is still a chance. You can take on a credit partner that meets each of these requirements.  Many business owners work with a friend or relative to fund their business.  If a relative or a friend meets all of these requirements, they can partner with you to allow you to tap into their credit to access funding. 

What Makes a Credit Line Hybrid A Good Option? 

There are many benefits to using a credit line hybrid.  First, it is unsecured, meaning you do not have to have any collateral to put up.  Next, you do not have to provide any bank statements or financials.  

Also, typical approval amounts are up to 5x that of the highest credit limit on the personal credit report. Additionally, interest rates can go as low as 0% for the first few months.  You can put that savings back into your business.

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit, even in a recession

The process is pretty fast, especially with a qualified expert to walk you through it.  One other benefit is this.  With the approval for multiple credit cards, competition is created.  This makes it easier to get interest rates lowered and limits raised every few months. 

Get Business Credit Without SSN and Have Access to Funding to Run and Grow Your Business

One of the largest parts of establishing business credit is to get business credit without SSN.  If you use your SSN to apply, that account is going to end up on your personal credit report.  This is the opposite of what you want.  However, using an EIN instead of an SSN is not enough.  You have to follow the other steps to create separation between you and your business. Then, you will be well on your way to building business credit separate from your personal credit. Now is a great time to get started.

The post Get Business Credit Without SSN, and Other Tips for Becoming Fundable appeared first on Credit Suite.

Being Fundable in a Recession

Do you know about being fundable in a recession? Fundability – or, not just the ability to be funded but how desirable an entity is for funding – means different things to banks, venture capitalists, angel investors, and informal investors. However, they all agree on a few basic principles when answering the question of: is your business fundable in a recession?

Is Your Business Fundable in a Recession? The True Meaning of Fundability, and Just How Your Business Can Get Fundable

So, what does it mean when we speak about fundability? What does it mean when we say a company is fundable? This fundable analysis ought to get you thinking of your corporation – and corporate credit in a whole new light.

But first, let’s talk recessions.

Recession Era Financing

The number of United States financial institutions and thrifts has been decreasing progressively for a quarter of a century. This is coming from consolidation in the marketplace along with deregulation in the 1990s, lowering barriers 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 everlarger financial institutions is problematic for local business owners. Big banks are much less likely to make small loans. Economic recessions imply financial institutions end up being extra cautious with financing. Thankfully, fundability does not depend on financial institutions alone.

Is Your Business Fundable in a Recession? What Does it Mean?

Let’s get that fundable meaning out of the way from the very start.

Fundable: of or capable of being funded; deserving of being funded.

Yet what is the fundable meaning in our context?

Is Your Business Fundable in a Recession? The Business Credit Context

Here, the meaning is just a little bit different.

While it’s still capable of being funded, it also indicates – able to be funded by a loan provider or a credit company.

With this fundable definition, we are looking more at what credit issuers and loan providers wish to see. But let’s go back for a moment.

Is Your Business Fundable in a Recession? Why Does It Matter?

You’re a business owner. And like every single other entrepreneur, since the beginning of time, your company needs cash.

There are a few means for companies to get cash. Without entering into the nitty gritty information, the main ways for companies to get money are to:

(1) Sell products or services

(2) Sell their assets such as land, vehicles, tools, or office space in buildings they have

(3) Acquire crowdfunding

(4) Get angel investing or venture capital payments, or

(5) Borrow cash.

For the purposes of our fundable investigation, we are just looking at # 5.

Loan providers and credit providers want to see if your company is a good credit risk. To firms which are fronting your corporation cash, they want to know that you can pay them back.

Fraud Runs Rampant

Complicating matters is the problem of scams. Per a 2009 Experian report, “fraud-related costs for U. S. businesses are more than $50 billion annually. This figure may understate the extent of the problem, as estimates show that up to 30 percent of all bad-debt commercial losses are due to ‘soft’ fraud, which primarily occurs from material misrepresentation on an application. Combined with the fact that business fraud is estimated to be three to 10 times more profitable than consumer fraud, business fraud has become a growing concern for organizations.”

As a result of so much fraud, lenders and credit providers inspect credit applications very thoroughly.

Essentially, they are trying to find all kinds of ways to tell you and your firm no when you come to them for cash. Their fundable meaning includes the component of fitting their requirements for not being scammers. For financial institutions and the like, business legitimacy makes all the difference in the world. No legitimacy, then no funds. It’s that simple.

As a result of their careful checks for fraud, lenders and credit providers are taking into consideration numerous different aspects of your credit or loan application. They are looking at many aspects of your company, as well, and even at facets of you, the owner’s existence.

Your mission is to ease their fears of frauds. And the way in which you do this is by eliminating every factor they can point to, to potentially say no to offering you money.

A Substantial Side Benefit to All This Fundability

There’s another reason fundability matters. Your leads and customers likewise want to feel that your corporation is the real deal. They don’t want to do business with what they view to be a fly by night operation. And could you blame them?

Developing and improving fundability to lenders and credit providers will have the added reward of giving off a reliability vibe to individuals and corporations aiming to buy your goods or services.

Is Your Business Fundable in a Recession? Data Details

Fundability starts with recognizing what lenders and credit issuers are looking for. Then we’ll have a look at exactly how to most effectively accomplish and supply what they want.

Fundability all begins with your industry.

Your Industry Can Make or Break If Your Business is Fundable in a Recession

Some industries are thought to be high risk or restricted. These industries, by definition, are most likely to have a harder time getting funding of any type. How fundable is your business should start with – how fundable is your industry?

Industry Selection High Risk or Restricted

Usually, restricted and high risk industries have some things in common. There may be high risks of injury at work. Or the industry might engage in a great deal of cash transactions. This is true regardless of the safety record of a particular firm, or the majority of its transaction types.

Consider Some High Risk Industries

Per the SIC, the following industries are high risk: travel agencies. The NAICS concurs.

A Look at Some Restricted Industries

Per the SIC, the following are restricted industries: pawn shops. The NAICS agrees.

Industry Aligned on All Records

This is the idea of congruency, and it is going to show up again and again. Business credit reporting bureaus and lenders will examine your firm diligently. Among the major ways they do this is by strictly checking for matching records.

Due to this, if your records do not all match, it will show up as if they are missing. Missing records will trigger a rejection, as a loan provider will assume fraud on its face.

As a result, it is crucial to make sure that every record, everything, is identical.

It goes beyond your industry. It’s also your corporate name, address, phone and fax numbers –everything! These must look the same all over, such as in IRS records; your company’s records with Dun & Bradstreet, Experian, and Equifax; all licenses needed to run your corporation; and incorporation documents.

Copy/paste this information; do not chance it with retyping.

Business Name

You can be innovative when naming your business.

Beyond crafting the perfect unforgettable name which is easy to spell and say, and also evokes your corporation’s mission statement, there’s also the matter of risk. Including a risky business type in your company name will trigger funding denials.

There is nothing misleading, illegal, or underhanded in keeping the name of a high risk or restricted industry out of your business name.

Listed ownership uniform

Congruency counts here, too. Your listed company ownership must be the same anywhere you provide it.

All corresponding pages list uniform business data

It is best practices to maintain a record of every place where your business has a listing.

A Professional Website Can Make a Difference When it Comes to Being Fundable in a Recession

A professional web site is a must. A business needs a professional-looking internet site. And it must have website hosting from a provider like GoDaddy. Don’t use Weebly or Wix. It needs to be your domain, not domain.wix.com. Use Upwork to employ people who can help you get set up. Get a professional logo from Fiverr.

Industry aligned

Consider the more successful competition you have in your market. What do they include? What do they leave out? And what do they highlight?

You do not need to copy another website, and it isn’t in your best interests to do so, anyway. But do not hesitate to crib from some of their better ideas. If those concepts benefit them, then they might help you, as well.

Business owners listed

Just like on the documents of the business, you need to display the owners of your business. 

Customers and potential customers want to know who they’re dealing with.

And do not forget to include your About Us web page on your checklist of locations with company details which must be consistent.

Business name and address uniform

Congruency is a requirement here too. 

Special characters

It’s the exclamation point in Yahoo! or the like. Don’t do this, if you can at all help it.

There are going to be people inputting your business name right into internet browser address bars. By adding special characters, you’ve just made it harder for them to do that.

Industry in name

Is it better to place the name of your industry into your company name, or not?

If your industry isn’t high risk or restricted, then it may be a good idea. Making things clearer for your potential customers and clients is usually beneficial.

But don’t place the name of a high risk or restricted industry in your business name! There is absolutely nothing deceptive or misleading about this.

Available with state

Is your corporate name available in your state? Check your name with your Secretary of State. They could require that a business name be unique.

Searchable

Any web site must be searchable.

Because if you make your customers and prospects go to another web site, they may not return.

A Business Address Can Help Decide If a Business is Fundable in a Recession

A corporate address must be an actual brick and mortar building. It must be a deliverable physical address. This can never be a home address or a PO Box. Do not use UPS mailing addresses. Some lenders will not approve and fund unless this criterion is met.

PO Box PBSA

A PO Box PBSA stands for a PO Box Post Box Street Address. Lenders and credit providers understand that these are really post office boxes. They will see these as being non-legitimate ‘addresses’, just like post office boxes.

Physical or virtual office (CMRA)

Many entrepreneurs, particularly startup owners, don’t have the cash for actual office space. But loan providers check USPS and places like Google Maps to see if you’re using a home address. If you are, you often get an immediate decline. Never use a home address on your application. Even if your business is only you.

Luckily, the good news is, virtual offices are available in all states and many cities.

A virtual address is a fantastic solution. We recommend Alliance Virtual Offices, Regus, and DaVinci.

Same state business is incorporated

Your virtual office, preferably, must be in the same state where your company is incorporated.

Mailing address vs. physical address

In the exact same vein as the caution against a PBSA, you need a real physical address versus a mailing address.

A Business Phone Number Helps Determine If a Business is Fundable in a Recession

Your corporation must have its own phone number. Do not give a personal cell or residential phone as a business telephone number. But VOIP (voice over internet protocol) is fine.

Also, your company telephone number must be toll-free. This is 800 exchange or such.

Uniform number

Again, congruency is an absolute requirement. This includes using the area code anywhere the number is provided.

Mobile, Home, and Business numbers

A cell number or home telephone number as your primary business line could get you flagged as un-established. Your company number must only be used for your corporation. It must not be an additional line for your family to use.

Voicemail content

Your voicemail greeting should, at an absolute minimum, inform the customer who they have reached and when you can return their phone call.

Business 411 Listing

You must list your corporate telephone number on 411. You can do so on ListYourself.net.

Your phone number needs to have a 411 listing for most credit issuers, lenders, vendors, and even insurance companies to approve you. Check your record to see if you’re listed. Make sure your info is accurate.

Business name and phone number uniform

As always, congruency is crucial here.

Fundable in a Recession Credit Suite

Demolish your funding problems with 27 killer ways to get cash for your business. Get money even during the worst of a recession.

Time in Business Can Help Make a Company Fundable in a Recession

The amount of time you have been in business is, of course, an indicator of reliability and as a result fundability to lenders and credit issuers.

Incorporation date

But what is the day when a corporation starts? It’s the day of incorporation. This is one reason why, the quicker you incorporate, the better.

Business license issue date

Does your company have every one of its necessary licenses to operate in your industry and area? When did you get your licenses? A lender or credit provider will not consider your business to genuinely be in business if you’re missing critical licenses. The faster you get licensing, the better.

With no license to work in your industry, your ability to attain fundability is cut off at the knees. The lender or credit provider will feel it’s more important to protect the public than to offer you money.

A Business Bank Account Helps Decide If a Business is Fundable in a Recession

An essential piece of the fundability puzzle is having a separate business bank account. You need a business bank account, to keep funds separate from your personal accounts. Commingling personal and company funds and expenses is a recipe for an audit from the IRS. The simplest way to keep these two universes distinct is to have separate bank accounts.

Bank account open date

The date you open your business bank account is a crucial one in the life of your corporation. The account opening date is the business’s opening date, far as lenders are concerned. A longer history is better.

It’s also the business’s opening day, so far as the business CRAs see it. This is because the business CRAs have seen some firms attempt to do an end-run around time in business requirements by buying shelf corporations.

A shelf corporation is a corporation with value just in its age and nothing else. CRAs see the practice of buying them as deceptive. As a result, entrepreneurs can end up spending hundreds if not thousands of dollars for a shelf corporation, only to see their money squandered when the age of the shelf corporation isn’t considered by the CRAs at all.

Actual business account (not personal)

There are some similarities between personal and business bank accounts. But to open a business bank account, the business owner must submit added documentation. This includes business registration paperwork. It can often (though not always) include proof of having an EIN.

A business bank account lists both the owner and the business. Such accounts may require a certain minimum balance to avoid maintenance fees. Fees in general tend to be higher than those for personal business bank accounts.

Business name, address, and ownership uniform

Congruency is a requirement here, as it is in all other areas.

Checking account history

Financial institutions keep credit scores which help them find out whether to loan your company money. Essentially, these are objective measures of fundability, per the lender. In part, these ratings are based upon the historical actions of you with reference to your company bank account.

A score of Low-5 is usually believed to be the minimum rating for getting financing.

Potentially the easiest way to accomplish and maintain a fantastic bank credit score is to deposit a minimum of $10,000 into your business bank account and maintain it there for as long as three months. In addition to that, make consistent deposits.

These actions will help in three ways. One, you will have kept a superb minimum balance for a minimum of three months. Two, you will most likely not overdraw with such an outstanding balance. And three, you will be at the magic minimum for a Low-5 bank credit rating.

NSFs and Negative Balances

Writing checks with insufficient funds (NSFs), or going into the red are surefire ways to spoil your bank rating.

By maintaining a minimum balance of $10,000 on a consistent basis, you will, generally, make NSFs and negative balances a distant memory.

Business Entity

A business entity defines issues of liability, and it makes a difference when it comes to taxes.

The best business entity for fundability is a corporation.

Corporations are legally distinct from their owners. This holds true even when a business has just one employee or only one owner. Or they are the same person. Whether you pick a C-corporation, an S-corporation, or an LLC is your choice. Speak with a lawyer or an experienced tax specialist to determine which is the best possible choice for you.

Sole proprietorship

A sole proprietorship means the business owner is it when it pertains to liability and tax obligations. No one else is responsible.

DBA

Any full company name must include any recorded DBA filing you use. This is a requirement for records congruency.

But no matter what, if you run a small business as a sole proprietor, the best thing to do is to incorporate. If you have already filed a DBA, you will still have to move onto a corporate business entity. You ought to only consider a DBA as an interim step on the way to incorporation.

Good standing

Check with your Secretary of State to ensure they have all the required info for your company. See to it that you are in good standing with them, and that your entity is active. You must file annual reports and pay a fee every year to remain active.

Foreign filing

A foreign LLC is a limited liability corporation formed in one state but registered in another state. It isn’t an LLC formed outside of the USA. A distinct registration is required because the laws between the states vary.

If your business operates outside of your state, it will strengthen fundability to foreign file.

Registered agent

A corporation will also need to pick a registered agent that they show on the Articles of Incorporation. A registered agent receives service of process and legal and tax papers on behalf of the corporation.

Business name, address, owners, and listed ownership uniform

Congruency is necessary here, as in all other areas. This includes if you were in business prior to incorporating, as generally states will require a firm to use a term like ‘incorporated’ or ‘LLC’ in its name.

Date acquired

If you purchased your company from another person, when was that? It will count towards time in business. The longer, the more fundable your company is.

EIN #

Visit the IRS website and get a free EIN for your business. This is also where you pick a business entity like corporation, LLC, and so on

To open a business bank account, you need an EIN, so get this out of the way first. The IRS has a form for everything, including getting an EIN, the Federal tax ID number. This is form SS-4. When you have filled it out, either mail or fax it to the appropriate office. The form includes this info.

EIN issue date

You must get your EIN ASAP, so you have it for filing tax returns and making bank deposits. Per the IRS, if you do not have an EIN by the time your corporate tax return is due, write ‘Applied For’ and the application date in the space where you’re supposed to add the EIN. Do not put your Social Security Number there.

Being behind in filing your taxes will not do your company any favors regarding fundability.

Business name, address, owners, industry, contact information, and listed ownership uniform

Congruency is a requirement on your EIN application, as in all other areas.

Email

Corporate e-mail addresses must be professional. This means something like admin@yoursite or info@yoursite.

Company domain

Your corporate e-mail must be on the exact same domain as your company. Do not use generic free e-mail services likes Gmail, yahoo, or msn.

Uniform on all records

As anywhere else, congruency is a necessity for email records.

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Business Licenses

A corporation must have all of the licenses essential for running.

These licenses all must be in the perfect, accurate name of the business. And they must have the same corporate address and telephone numbers.

This means not just state licenses, but potentially also city licenses. Check with your Secretary of State’s office.

Business name and listed owners uniform

Congruency is a requirement on your business licenses, as in all other areas.

License obtained when required (not always required)

Your state and industry can have their own licensing requirements, if any. The best place to find the specifics is with the Secretary of State’s office for the state where your business is incorporated. If you do business in more than one state, then check their Secretary of State offices as well.

Business Credit Reports

Fundability commonly depends on corporate credit.

Bureaus

The most significant and best-known business credit reporting agencies (also called CRAs or bureaus) are D&B, Experian, and Equifax.

D&B report

This is the only bureau for credit monitoring strictly concentrated on company credit. It looks into your company’s interactions with suppliers and vendors. Many potential suppliers check the Dun & Bradstreet report on your company prior to offering credit terms. This means it is critical for you to keep the D&B report of your company updated and accurate.

Experian report

Like Dun & Bradstreet and Equifax, Experian also gathers details available in various public records together with info from collection agencies, credit card companies and various other data sources.

Equifax report

This bureau likewise gathers all trade credit information and information from various public records to examine your company’s creditworthiness. However, their report depends heavily on how your corporation interacts with various banks as well as different traditional lenders like credit card providers.

Business Data Agencies

These businesses collect data and supply it to the business CRAs.

CreditSafe Helps Determine If Your Business is Fundable in a Recession

CreditSafe offers business and consumer reports. They also offer monitoring, collection services, and financial statements.

CreditSafe also provides alternative credit, where they base some of their scoring on utility and rent payments. These payments are typically not considered by other CRAs unless they’re late. CreditSafe reports these payments whether positive or negative.

Utility payments on your CreditSafe report can include power, cable, internet, and phone. Other third-party payments like Credit Suite, CRM, and software can be included.

LexisNexis Report

LexisNexis is a source where a number of the lenders denying funding applications get their information from. They provide info regarding likelihood to pay, or not.

Lenders compare LexisNexis information to what you put on your loan application. If the application and LexisNexis do not match, then loan providers will deny you a loan. They will see the variance as fraud.

SBFE

The SBFE gathers data on small businesses from its members, which are lending institutions. Lenders use this info to make credit decisions.

FICO SBSS

FICO uses its SBSS (Small Business Scoring Service) Score to combine consumer bureau, monetary, application, and business bureau information. FICO then validates their SBSS models for deals like Line of credit transactions, term loans, and commercial card obligations up to $1 million. The idea is to assess just how your small business pays off all sorts of loans.

Business credit providers and the SBA use the FICO SBSS score as a tool to decide whether they ought to authorize a loan to your company.

Identification Numbers

The CRAs use identification numbers to designate your corporation.

BIN # (Business Identification Number)

Experian’s BizSource assigns a BIN.

D-U-N-S #

Begin at the D&B website and get a free D-U-N-S number. If there is no D-U-N-S number, then there is no record and no PAYDEX score. Your D-U-N-S + 3 payment experiences gets you a PAYDEX score.

Business Credit History is Vital for Being Fundable in a Recession

Your business credit history is the single most important driver of your business credit scores. In turn, this influences fundability profoundly.

Late repayments will impact your business credit score for years. If you pay your corporate financial obligations off, as rapidly as possible and as completely as possible, you can make a very real difference in your credit scores. No other aspect of business management more directly impacts your business credit scores.

Make certain to pay on schedule and you will directly and positively impact fundability.

UCC Filings

If the business owner has poor personal credit, lenders will typically secure a UCC blanket lien if they give your business a loan.

A UCC blanket lien is a note which goes on your credit report. It states that the creditor has an interest in all your business’s assets till you pay off the loan in full. Hence, there may be dire consequences if you default.

These UCC filings are a matter of public record. Lenders and credit providers take them into consideration when determining if your business is fundable.

Judgments, Liens, and Bankruptcies

These are all a matter of public record, and they can all negatively impact fundability.

In addition to UCC blanket liens are any other kinds of liens as against your business assets. A lien is a credit provider’s right to retain possession of property belonging to till the debt owned by that person or company is discharged.

A lien isn’t quite the same thing as collateral. Rather, it’s the property which is subject to the lien is the collateral.

Total number of trade accounts and highest credit limit

These come from credit issuers which give you starter credit when you have none. Terms are frequently Net 30, versus revolving.

The more trade accounts, the better. In general, at least five to eight are necessary before moving onto credit cards which are harder to get. But pay attention to your highest credit limit.

Your highest credit limit is an important figure for credit issuers and lenders. For example, unsecured financing can result in a loan of 5 – 8 times the amount of your highest revolving credit limit account. So, by definition, the higher your highest credit limit, the more you can get from this form of financing.

In addition, some credit issuers want to see a particular high credit limit before they issue credit to your business. In general, a few high credit limit accounts do more to enhance business fundability than a large number of very low credit limit accounts.

Age of trade accounts

How long have your trade accounts been open? This should correlate more or less directly with your time in business. By getting trade credit ASAP, your trade accounts are as aged as they can be.

Don’t buy business tradelines, to artificially inflate the age of your trade account. The FBI has found that the trade line company can be a fake and the primary card holder can be a stolen identity in these kinds of scams. Business CRAs are well aware of these scams. If you or your business are caught, you will be blacklisted by CRAs like D&B and your fundability will likely never recover.

Financial data

Lenders and credit providers want to see your business’s financial data. Without this info, they will wonder if they can trust your statements about your business’s financial solvency. Increase fundability by providing this information when requested.

Open accounts

Opening and responsibly using company credit accounts can help you boost your available credit and enhance your credit rating. The key is to use your credit. Simply opening a lot of accounts and never using them is not going to do anywhere near as much to improve fundability.

Closed accounts

Closing accounts has a direct effect on overall credit history. If a card is closed and is in good standing, it will fall off a credit report eventually. And as soon as it’s gone, the history which went along with it is gone, too. A card in good standing can be closed by the card owner or by the credit provider if the card owner hasn’t been using the credit. This is different from a card closed in poor standing, where that information stays on your credit report for longer.

By closing accounts, you are tanking the average age of your accounts. It’s a part of fundability over which you have control. Simply use your credit and pay it back without delay. This way, your providers will not feel the need to close accounts for non-use.

Business Information to Make Your Business More Fundable in a Recession

The most crucial issue with your company info is to be absolutely certain it is consistent from document to document.

Business name and address, listed ownership, and contact information uniform

Congruency is a requirement in your company CRA records, as in all other areas.

Financial Statements

Many credit providers and lenders not surprisingly want to see your company’s financial statements.

Business Financials

Corporate financials include if your business is making a profit, as well as your financial estimates for the coming quarters.

Business tax returns

Some alternative lenders now offer credit lines for $50 – 150,000. They will typically only want tax returns versus all income documentation. For over $100,000, you must provide a P&L and a balance sheet.

The approval amount is commonly 10% of yearly sales per company tax returns.

Business financial statements (company/accountant prepared or audited)

Standard corporate financial statements include your income statement, a statement of retained earnings (AKA the statement of owners’ equity), company balance sheet, and a statement of cash flows.

It will considerably and favorably affect your fundability if you have them prepared or at least audited by an accountant or an accounting firm.

# of years tax returns filed

How long has your business been operating? And how many years has it been filing tax returns? Those numbers must be the same, even for years your company loses money.

Reported income and expenses

What is your company’s reported income? Do your reported expenses surpass your reported income? Are they commensurate with those anticipated from a business of your size, age, and industry?

Taxes up to date

Are your corporation’s taxes up to date? If payments to the IRS are slow and late, then lenders and credit providers will think your payments to them will follow the very same pattern. 

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Personal Financials Can Decide If a Business is Fundable in a Recession

In particular for newer corporations, credit issuers and lenders will want to see your personal financials.

Personal financial statements

Can your personal financials be located? Do they show responsible financial stewardship? 

Personal tax returns and how many tax returns can be offered

Are your personal tax returns in order? Can you put your hands on all or a minimum of the majority of your tax returns and supply them if requested? Do you file on time? If you need to pay, do you pay on time? If the answer to any one of these questions is no, then fundability is damaged.

Reported income and expenses

Are they proportionate with the kind of income and expenses anticipated from the owner of a corporation of your size, age, and industry? 

Debt to income

This ratio is all of your monthly debt payments, divided by gross monthly income. This number is how lenders and credit providers measure your ability to pay back whatever you borrow. It is a vital part of the answer to their question – is your business fundable in a recession?

Child support and Criminal record Both Affect If a Business is Fundable in a Recession

Both affect fundability. Are you up to date on child support payments if you do not live with one or more of your minor children? Do you have a criminal record? 

Bureaus and How They Help Determine If Your Business is Fundable in a Recession

Just like there are business credit reporting agencies, there are CRAs for personal credit.

Experian and Equifax

In addition to reporting on business credit, Experian and Equifax also report on personal credit.

TransUnion

TransUnion only reports on personal credit. A TransUnion credit report can include your personal mortgage account, even if you completely paid your mortgage off. Your TransUnion report will also show any public records about you, such as judgments against you.

Data Agencies and How They Determine If Your Business is Fundable in a Recession

There are companies which collect data and provide it to the personal credit reporting agencies.

ChexSystems

Some banks and other credit issuers use ChexSystems to get more information on your personal credit habits. They also report on insufficient funds, closed accounts, and overdrafts.

LexisNexis

Lenders use LexisNexis information to cross-check loan applications. They want to see if their loan criteria are being met. They want to determine if what you claim on your application jibes with the records. And they want to know if it’s likely your business will fail.

FICO

Your FICO score comes from your payment history, amounts of owed, length of credit history, credit mix, and new credit. Together, the first three elements comprise over 3/4 of your FICO score. Responsible financial management, over time, will enhance fundability the most effectively.

Personal Credit History

Much like your business credit history matters for calculating fundability, so does personal credit history.

Accounts over limit

If the number of accounts over limit is more than zero, it can tank your fundability.

Authorized users

Are the authorized users on your accounts strangers you’re getting to pay you to piggyback on your credit? This is just barely this side of legal and often a prelude to fraud. Most credit issuers and lenders will see it as proof of intent to commit bank fraud.

Short sales

In a short sale, you try to sell your home for less than you owe. But this can only happen if the lender agrees. If the house sells, lender keeps the proceeds. Not all lenders agree to a short sale. Often, homeowners must be 90 or more days late for a lender to so much as consider the idea.

Some lenders may not forgive the unpaid balance on the mortgage. Some state laws let lenders seek deficiency judgments forcing you to repay the difference between the sale price and the balance due on the mortgage.

Lenders report a short sale to TransUnion, Experian, and Equifax as a charge off, settlement, deed-in-lieu of foreclosure, or loan settled for less than the amount due. How a lender reports the short sale can significantly impact the damage to your credit score.

Any late mortgage payments made before sale will further undermine your score. If lender gets a deficiency judgment to collect the mortgage balance, that also will damage your score, as will the amount of the deficiency.

A short sale will drop a personal credit score by up to 100-150 points. The higher your credit score to start, the more it will plummet.

Short sales can stay on your credit report for as long as seven years. But it isn’t as bad as a foreclosure or a bankruptcy.

Settled debt

Settled debt is a plus for fundability. It’s a huge part of the answer to the question of whether your business is fundable in a recession.

Foreclosures and late payments

Just like a bankruptcy, foreclosures negatively impact your fundability. And the larger and later your late payments are, and the more of them there are, the more they harm fundability.

Opened accounts

With fewer than five, your file may be seen as “thin” and it will negatively impact your fundability.

Financing facilities reported and history length

In general, major retailers and banks on a report correlate with a longer and more favorable personal credit history. But a shorter credit history is generally not seen as favorably as a longer one.

Inquiries

More than two recent inquiries will be seen as proof of credit shopping.

Utilization per credit card/line

Credit Utilization Rate is credit in use, divided by total available credit. Keep this ratio at about 30% or less. Experian checks utilization rate both overall and per credit card.

Bankruptcy

This is a court proceeding where a judge and a court trustee check your assets and liabilities. Personal bankruptcy tends to be conflated with a lack of personal financial responsibility.

Will an explanation to a credit provider or lender help with fundability? It’s worth the effort.

Application Process

Even the process of applying can have an impact on your fundability.

Application Submission

How are you submitting your application? What does your lender or credit provider prefer?

Timing

Your most recent three months’ worth of bank account management loom large. This is due to a number which banks keep but don’t publicize, the bank rating.

A bank rating measures the average minimum balance as kept in a business bank account over a three-month period. Therefore a $10,000 balance ranks as a Low-5, a $5,000 balance rates as a Mid-4, etc.

A small business’s chief goal ought to always be to keep a minimum Low-5 bank score (or, an average $10,000 balance) for at least three months. Without a minimum of a Low-5 score, most banks assume the business has little to no ability to pay off a loan or a business line of credit.

Lender negotiations and online, paper or in personal application

In particular, an application presented in person allows for a dialogue and negotiations. This is seen as the most serious and generally the most fundable. In person, a lender can directly assess the answer to their inquiry: how fundable is your business?

Lending product selected

Are you trying for a very large loan the first time around? You probably won’t get it. By proving your financial responsibility, lenders will be more likely to loan to you, and to loan you more.

Lender

Many lending institutions prefer working with certain industries. If the bank is more comfortable with your industry, then it will help your fundability cause.

Business ownership, name, and address verifiable

Ownership documents will prove your business ownership, name, and address and bolster your fundability.

Is Your Business Fundable in a Recession? On Balance

Keep all records consistent to your business can be fundable in a recession. Set up your business legitimately, with a domain, phone numbers, an address, and more. Get all ID numbers and register with the IRS. Set up your business bank account for fundability. Keep all business financials organized and have them prepared by a competent professional. Get your personal credit ‘house’ in order.

Being fundable means your business can get financing from a credit provider or lender. So, is your business fundable in a recession?

The post Being Fundable in a Recession appeared first on Credit Suite.

Is Your Business Fundable: An Analysis of Fundability

Many of us analyze ourselves mercilessly in the mirror.  We pick apart every flaw and consider how we might change or improve each one. While that may or may not be a positive activity, in the same way, you can improve the success of your business by reflecting on what is working and what is not. An analysis of fundability is one way to do this.

How to Analyze the Fundability of Your Business and Make Positive Changes

Take a step back and look at your business in terms of fundability.  Does your business appear fundable to lenders? What does that even mean?  It means your business appears to lenders to be one that they can lend to with little risk.  Risk of what? The risk of you not paying back your debt. They don’t make money if you don’t pay, and they are definitely in it for the money.

How do you make sure that’s the case for you?  You need to analyze the fundability of your business.  There are hundreds of factors that can affect fundability.  The fact that they all interconnect and affect each other further complicates things.  As with all things, the best place to start is at the beginning, the foundation, if you will. 

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit. 

The Foundation of Fundability

The first thing you need to look at during this analysis is how your business is set up.  It makes a difference. In fact, it makes a big difference. 

Dedicated Contact Information 

For example, you cannot share a phone number and address with your business.  A business has to have a dedicated business phone number and address. 

This can happen in a couple of ways. First, you can get a separate phone line and have a separate business location.  This is pretty standard. However, it can cause issues if you run your business online out of your home. 

In this case, you can get a virtual office address and a VoIP (Voice over Internet Protocol) business phone number.  Basically, it allows you to speak on the phone via the internet instead of phone lines. A virtual address service will often offer other services as well, such as live receptionists.  VoIP phone numbers can typically be forwarded to any number you want, meaning you do not have to get a dedicated line to have a dedicated number. 

Why does your business contact information need to be separate from your own?  There are a number of reasons, but for fundability there are two. First, it makes your business seem more professional.  In a lender’s eyes, this lends itself to appearing more fundable.  

Next, it creates the separation needed between business and owner to ensure the business can build credit separate from the owner’s personal credit. While this isn’t the only step necessary for separation, it is a necessary step. 

EIN

Another thing to look at in your analysis of fundability is whether your business has an EIN.  A lot of business owners, especially those running their business as a sole proprietorship, tend to use their social security number on business documents.  However, an EIN is a much better option. 

This not only further separates the business from the owner, but appears more professional, and therefore fundable, to lenders as well.  In addition, it helps ensure that business credit accounts stay off your personal credit report.  

You can get an EIN for free from the IRS.  The process is fast and easy. 

Incorporation

As mentioned before, many small businesses run as a sole proprietorship because it is easiest and cheapest.  However, when this comes up in your fundability analysis, you are going to need to change it. Incorporation is a vital part of fundability.  

There are several reasons for this.  Again, incorporating creates the separation from owner necessary for building business credit and appearing fundable to lenders.  However, it also helps protect your personal assets should the business struggle. 

What does not matter, is which option for incorporation you choose.  Whether you incorporate as an LLC, an S-corp, or a corporation does not make a difference when it comes to creating separation and fundability.  

Each option comes at a different cost and with varying levels of liability protection.  Choose which one is best for you based on your budget and the level of liability protection you need.  Usually, it is best to talk to an attorney or tax professional, when making this determination. 

Note that it is abundantly better to incorporate from the first day of operations.  This is because, whenever you do incorporate, you lose time in business and payment history from when you were in operation as a sole proprietorship or a partnership.  This means the longer you wait, the more backtracking you will have to do. Not incorporated yet? Now is definitely the time. 

Separate Business Bank Account 

The next step in your analysis of fundability is to take stock of your business bank account.  Is it the same as your personal account? That won’t work. You need a separate, dedicated business bank account.  

For one thing, this again creates the separation necessary to build business credit, which is a huge piece of being fundable.  However, there are also a few different types of financing that are only available if you have a business bank account. 

For example, you cannot get a merchant cash advance without a business bank account, and you cannot get a merchant account to accept credit card payments.  Studies show that customers spend more when they can pay with a credit card. Also, several business credit cards want to see a business bank account. These are both in addition to lenders that may want to see a business bank account with a minimum average balance before approving a loan.

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Analysis of Fundability: Consistent and Professional Public Presence

This part of fundability can get pretty complicated because it has so many interconnecting pieces.  The consistency part can be especially daunting because it goes all the way back to the start of your business.  If it has been in operation for a while, you can see how that could be an issue.

The thing is, most business financing applications are denied due to fraud concerns.  This can be an issue for you if you have different information across various records.  All names, contact information, etc. needs to be consistent when it comes to public records, accounts, websites, social media, licenses, and anything else you can think of. 

In addition, you need to pay careful attention to your online reputation.  If you have poor reviews or a ton of complaints, you could run into fundability problems.  This includes both online review sites and the Better Business Bureau. 

Another important piece here is your company website.  First, you have to have one. However, it can’t just be something you throw together.  It needs to be professionally designed, and you need to pay for hosting. Your business email address needs to have the same URL as your website also.  You shouldn’t use a free email service such as Yahoo or Gmail. 

Analysis of Fundability: Business Credit

The next thing you have to consider when you do an analysis of fundability for your business is your business credit score.  First, do you even have one? If your business isn’t set up to be fundable as discussed above, probably not. That’s your first step. Once that is done, you have to get accounts reporting to the business credit reporting agencies to start building your credit score.  

Get a D-U-N-S Number

Dun & Bradstreet is the largest and most commonly used business credit reporting agency.  Each business in their database has a D-U-N-S number. If you do not have one, they will not recognize you and any accounts reporting will be discarded.  You must have this number. You can get one for free on their website here. 

Experian has a similar number known as the BIN.  Find out more about that here

Other Agencies

Other agencies can affect your fundability as well.  For example, there are two other main business credit reporting agencies.  They are Experian and Equifax. Your record with these and other agencies can affect your ability to get funding.  

Other credit agencies do exist and some lenders do use them.  CreditSafe and FICO SBSS are just a couple of examples. In addition, your file with LexisNexis and The Small Business Finance Exchange can  affect your business credit score, and thus your fundability. 

Work with Starter Vendors in the Vendor Credit Tier

The vendor credit tier is the best place to get started when it comes to building business credit.  Many of the vendors in this tier will extend net terms and report payments, without doing a credit check.  Instead, they will rely on length of time in business and income to determine eligibility. 

Monitor Your Business Credit

The last step in building business credit for fundability is to monitor your business credit.  This should be an ongoing step in your analysis of fundability as well. You need to stay on top of which accounts are being reported for one thing.  This is how you will know you can move on to the next tier. Even after this though, you need to know where things stand.  

If you find mistakes, you can contact the reporting agency in writing and have them corrected.  Be sure to send copies of backup documentation, not originals.  

We can help you monitor your business credit for a fraction of what it will cost with the CRAs. 

Analysis of Fundability: Your Financials Matter, Both Business and Personal

If you are a very small business, you may not give much thought to your financial statements.  When you are doing an analysis of fundability, you have to however. You need to know how to read them, and how to understand what they are telling you.  

Details such as whether you are turning a profit and what assets you have available for collateral will make a difference to lenders when they are making fundability decisions. They will need to see that your business is able to pay back the funds they lend.  

In truth, any reports on your personal finances can make a difference as well.  For example, if you are flagged in the ChexSystems system for bad checks, that could come back to haunt you.

Pay Your Bills, Both Business and Personal 

This is the single most important thing when it comes to an analysis of fundability.  Are you paying your bills consistently and on-time? If so, can you continue to do so into the future?  If not, what’s the problem? What changes can you make to ensure that you get back on track with making payments? 

It all boils down to making good decisions.  This is especially true when building business credit by working through the credit tiers.  During that process, you are adding a lot of new accounts in an effort to move on to the next tier.  Be sure to keep tabs on what you can pay, and do not over do it. Also, only buy thing you can actually use for your business.  There is no need to buy things you do not need to build credit.  

Analysis of Fundability: The Application Process

This is where all the pieces come together.  The lender will look at your foundation closely.  Your business name, address, and ownership information has to be verifiable.  You also have to make sure the timing is right for borrowing, and that you have selected a lending product that is a good fit for your business. 

This is where issues with consistency will come to light.  Any red flags due to identity can cause problems. This is also where any liens or judgements can begin to hinder your chances. 

If you make sure your have a foundation for fundability, work on making sure you have strong business credit, and keep your finances in order, the application process should be pretty smooth.

analysis of fundability Credit Suite

Mirror Mirror On the Wall, How To Become the Most Fundable Business of All

You need to know if your business is fundable.  If it isn’t, you need to fix it. The only way to find out is to do an analysis of fundability.  Take stock. What do your foundation, business credit, and financial situation look like? Figure out what you are doing well and what you need to work on to ensure your business can get the funding it needs to grow and thrive long into the future. 

 

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How to Get a Business Phone Number to Build a Fundable Business

Why Do You Need a Business Phone Number to Be Fundable?

When you start a new business, it is vitally important for that business to have separate contact information from yourself.  This includes a dedicated business address, phone number, and email address.  When you first tell a new business owner this, there are a ton of questions.  Why does it matter?  Why can’t I just use my own contact information?  If I need separate contact data, how do I do that?  How do I get a business phone number and address anyway?  Do I have to have a separate phone line and location for my business? I mean, I was going to run my business out of my home.  How does this all work?

We are going to try to answer each of these questions right now.  The first question to answer is the one about how to get a business phone number and address if you are running your business out of your home or virtually.  Many new small businesses are run from anywhere the owner can access the internet.  Local coffee shops, libraries, etc. can all act as a business location if the business is run online.

Even if you never meet a customer in person, your business has to have a dedicated business address and phone number.   The question of how to do this becomes much more complicated however, when your business exists solely on your cell phone and computer.  The answer to your question is no, you do not have to have a separate cell phone, a land line, or even a building to get a business phone number.

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What Are My Options to Get a Business Phone Number?

When it comes time to get a business phone number, you have a few options and many decisions to make.  For example, you’ll need to decide first if you are going to use a landline or a cell phone.  Next, you’ll need to determine if you want a local number, a toll-free number, a vanity number, or a regular number.  How do you choose?

Get a Business Phone Number: Landline vs. Cell Phone

If you get a traditional landline with a business number, the process is as simple as calling out the telephone company.  That’s where the simplicity ends however.  A business landline is considerably more expensive than a residential one.  It is also a kind of invasive process to have a landline installed.

You are probably thinking it is much more expensive to get an extra cell phone.  The truth is, however, that you do not even have to do that.  There are many services now that will offer a business number and forward it to any number you want using the internet.

They offer other services as well, including transfers, multiple numbers, vanity numbers and even live receptionist.  Of course, the more bells and whistles you choose the more they cost, but generally speaking these services are super easy to get started with.  Some even offer base packages for free.

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Local vs. Traditional Toll-Free vs. Vanity

Usually, you need a toll-free number regardless.  If you cater to a local market as well, having a local number could also be useful.  A vanity number can be nice for ease of remembering.  What’s a vanity number? Those are the numbers that go along with your business, for example, 1-800-55-Pizza for a pizza joint.  This type of number is not necessary, but it can help with branding.  They are easy to acquire with the new virtual business telephone companies out there. You simply request your number, if it is available, it’s yours!

Is it Better to Get a Business Phone Number Online?

It seems like new options are popping up daily for getting a business phone number using the internet.  Known as VoIP, these services are gaining popularity for business phone service.  Here are just a few reasons why.

First, they are by far the best value.  You can get all the features you need for a fraction of what it would cost with a traditional landline.

Most small businesses simply do not have the budget to set up and handle on an ongoing basis a complicated PBX system with a receptionist and extensions for each desk. When you choose the right VoIP package, you have all of this and more built right in to a low flat rate each month. The following are just a few of the features you will find available with most VoIP companies.

  • Internet Faxingjust in case you need to deal with someone who is still faxing.
  • Automatic Call Recordingso you can have a record of all calls coming in and going out, if needed.
  • Conferencingallows you to give clients a number to call that will allow everyone to be on the same conference line.
  • Call Forwardingallows calls to ring on all your devices, and even more than one phone, at once.  In addition, you can set for calls to forward only during certain hours.
  • Auto-Receptionistscan make your business sound more professional.
  • Extensionslet you use a single main number to reach everybody.
  • Voicemail and voice to textwill send you emails with the voicemail, and can even put them into text form if needed.

Where to Get a Business Phone Number Online

While there are many companies that offer VoIP telephone services for business, and new ones are coming into the picture each day, these are a few of the most popular currently.

Grasshopper

Grasshopper is a business service that uses the mobile phone you have already.  Many others use an office VoIP setup. You can get a business phone number, receive calls from that number using your phone, and set up as many users as you want with custom extensions.

In addition, service from Grasshopper includes:

  • Queuing of calls
  • Call scheduling
  • Conference calls
  • Call routing/ auto-assistant
  • Voicemail to email

Because it is mobile, it provides more features than other VoIP providers.  Be aware however, that some users say the quality isn’t that great. For each one that is unhappy it seems, there are many that have been very pleased, so don’t let that be your sole decision maker.  Also, like most VoIP mobile apps, minutes are charged not only by Grasshopper, but also by your mobile carrier.

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If you do a lot of conference calls, you need to know that you are charged for minutes for each caller on the conference.  Meaning if a call only lasts 5 minutes, but you have 5 callers on, then you are charged for 25 minutes. There are other carriers that offer a conference call bridge, meaning you are only charged for the one call.

Phone.com

Phone.com is a great in-between option for multiple users.  It provides a VoIP solution without the requirement of a traditional phone, and has solid basic features.  You can make and receive calls from your business number as well as view call logs and your address book when you have an internet connection. From your computer you can:

  • Que calls
  • Set up auto-receptionist
  • Schedule calls
  • Send and receive faxes

Ring Central

RingCentral has all of the features you would expect or need, and plans start at one $20 a month.  They also offer a free trial, but so do a few others.  It does require an upgrade to get a 1-800 number.  They also offer upgrades that will allow you to integrate with Dropbox, Zendesk, Salesforce and more.

As I said, these are the only players in a relatively new game, but they are some of the most popular at the moment.  The thing you need to remember is, do your research.  Try to consider not only what you need right now, but what you may end up needing in the future.  You need to find a service that will offer everything you could need going forward.

If you simply go with the free or cheapest service for right now and do not consider future needs, you could end up having to change in the future.  That’s not only a pain, but it could mean changing your number, which means printing all new materials and updating directories.  That is all doable, but much easier to avoid if possible.

What Types of Things Should You Consider when You Get a Business Phone Number?

So when you are choosing a company to go with, what should you consider?  Well first, current budget is obviously important.  If you cannot pay for it, it won’t do you any good.  After that, consider what you need currently.  Once you have a few options narrowed down based on these needs, narrow it down further based on what you think you may need in the future.

For example, are you going to remain small, with any other employees being local?  You may not ever need conference calling ability. Is it possible you could need to add extensions or need a live receptionist option in the future?  Then be sure you get a business phone number with a company that offers these options.

What Does a Business Phone Number Have to Do with Being Fundable?

There’s the big question, right?  What does having a business phone number have to do with fundability?  Well, it can help to understand what fundability is and why it matters. To get business funding, your business needs to appear to be a separate, fundable entity to lenders.  For this to be the case, a business has to stand on its own apart from its owner.  This means it:

  • Is formally incorporated as a Corporation, S-corp, or LLC
  • Has an EIN
  • Already has a dedicated business telephone number, address, and email address
  • Has a dedicated business bank account
  • Uses a professionally put together, user friendly, business website
  • Has a D-U-N-S number

In addition to helping a business appear fundable to lenders, having these things in place provides the separation from owner necessary to start building business credit. When you think of it that way, not having a business phone number can do a lot of damage.

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How Does a Business Phone Number Help You Build Business Credit?

Before you ever make it to a lender that wants to see your business as fundable before giving you money, you have to build business credit.  It is virtually impossible to do this without a business telephone number or any of the other things mentioned above.  Here’s why.  To establish business credit where there is none, or to begin to repair poor business credit, you are going to have to establish tradelines with starter vendors.

These are vendors in the vendor credit tier that will extend net terms on invoices without a credit check.  They do, however, check other information before they will extend these terms.  This includes several different things, and many like to see a business number listed in the directories.

To find out more about starter vendors in vendor credit tier and how the business credit building process works, go here.

What Else Do You Need to Do to Build Business Credit?

After you have set your business up to appear fundable to lenders, and after you establish trade lines with starter vendors, you need to continue the process. After enough tradelines are reporting to your business credit report, you can begin to apply for credit cards in the subsequent credit tiers. These include the retail credit tier, the fleet credit tier, and the cash credit tier.

The retail credit tier is made up of those cards that are directly tied to a store, such as Home Depot or Best Buy.  The fleet credit tier includes cards from companies like Fuelman and Shell that can help manage fuel costs, as well as costs related to fuel and auto maintenance.  The cash credit tier is the main goal, and includes cards that are not related to specific retailers or costs.

The key is to get enough accounts reporting from each tier to sufficiently build your score so that you can move on to the next tier.  The vendor credit tier is the beginning.  Some vendors will not extend net terms if there is no business number.  If you do you use your personal number, you run the risk of payments being reported to your personal credit rather than your business credit, which defeats the whole purpose.

You Need to Get a Business Phone Number, Start Now!

If you do not already have a business number, start by considering exactly what your budget is and what you need. Then, do some research.  Find out who has what you need for what you can afford right now, with the option to add on anything you may need in the future.  That should narrow now your choices significantly.  Whatever you do, do not use your personal number.  That will not help you when it comes to running and growing your  .

Looks great, nice job!

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