Get a Recession Business Credit Line – Here’s How

It’s Probably True: You Need a Recession Business Credit Line

As a small business owner, you probably can’t put your hand on enough capital, at least not immediately. And if you are new, then it’s even harder. There will always be more ramp up costs than you think. So if you have ever wondered where to establish business credit, and how to actually get a credit line, it comes from really two areas. Those are business credit cards and loans. Your business needs a recession business credit line: here is how to get one (or more!)

For both types of credit line, it helps to have good business credit. And if you do not have what is considered a good business credit score, or if your company is new and has not yet established its own credit, then creditors will look at your personal credit score.

You want them looking at your business credit score.

But let’s start with recession-era funding.

Recession Period Financing

The number of US financial institutions as well as thrifts has been decreasing slowly for 25 years. This is coming from consolidation in the market in addition to deregulation in the 1990s, reducing 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 ever‐larger banks is problematic for local business owners. Big financial institutions are much less likely to make small loans. Economic downturns imply financial institutions end up being a lot more careful with lending. Luckily, business credit does not rely on financial institutions.

Let’s go over credit lines.

Your Business Needs a Recession Business Credit Line – But What Are Credit Lines?

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

A borrower can access funds from their line of credit anytime, so long as they don’t go over the maximum set in the arrangement, and as long as they meet any other conditions of the financial institution or investor like making prompt payments.

Advantages

Your business needs a credit line because credit lines deliver many distinct advantages to borrowers including versatility. Borrowers can apply their line of credit and only pay interest on what they use, in contrast to loans where they pay interest on the sum total borrowed. Credit lines can be reused, so as you acquire a balance and pay that balance off, you can use that accessible credit again, and again.

Details

Credit lines are revolving accounts similar to credit cards, and contrast other forms of funding like installment loans. In many cases, lines of credit are unsecured, much the same as credit cards are. There are some credit lines which are secured, and thus easier to get approval for

Credit lines are the most frequently sought after loan type in the business world even though they are popular, true credit lines are unusual, and hard to find. Many are also very difficult to qualify for requiring good credit, good time in business, and good financials. But there are various other credit cards and lines which few know about that are attainable for startup companies, poor credit, or even if you have absolutely no financials.

Your Business Needs a Recession Business Credit Line from The SBA

The majority of credit line varieties that most entrepreneurs imagine come from standard banks and conventional banks use SBA loans as their principal loan product for small business owners. This is because SBA guarantees as much as 90% of the loan in the event of a default. These credit lines are the hardest to get approval for because you must qualify with SBA and the bank.

SBA Loans

There are two fundamental sorts of SBA loans you can normally obtain. One type is CAPLines. There are in fact 4 types of CAPLines that can work for your small business.

You can also get a smaller loan amount more quickly using the SBA Express program. The majority of these programs offer BOTH loans and revolving lines of credit.

From the SBA … “CAPLines is the umbrella program under which SBA helps business owners meet short-term and cyclical working capital needs”. Loan amounts are offered up to $5 million. Loan qualification criteria are the same as with other SBA programs.

Seasonal Line

This one advances against foreseen inventory and accounts receivables. It was designed to assist seasonal businesses. Loan or revolving are on offer.

Contract Line

This one finances the direct labor and material costs of performing assignable contracts. Loan or revolving types are available.

Builders Line

This one was made for general contractors or builders constructing or renovating industrial or residential buildings. This line is for fund direct labor-and material costs, where the building project functions as the collateral. Loan or revolving types are on offer.

Working Capital

Borrowers must use the loan proceeds for short term working capital/operating needs. If the proceeds are used to acquire fixed assets, lender must refinance the portion of the line used to acquire the fixed asset into an appropriate term facility no later than 90 days after lender discovers the line was used to finance a fixed asset.

Your Business Needs a Recession Business Credit Line from SBA Express

You can get approval for as much as $350,000. Interest rates vary, with SBA allowing banks to charge as much as 6.5% over their base rate. Loans in excess of $25,000 will need collateral.

Approval Details

To get approval you’ll need great personal and company credit. Plus the SBA says you should not have any blemishes on your report. An acceptable bank score demands you have at least $10,000 in your account over the most recent 90 days.

You’ll also need a resume showing you have business sector experience and a well put together business plan. You will need three years of company and personal tax returns, and your business returns should show a profit. And, you’ll need a recent balance sheet and income statement, thereby showing you have the cash to pay back the loan.

Collateral

To get approval you’ll need account receivables, but just if you have them. As for the collateral to offset the risk, often all company assets will function as collateral, and some personal assets which also include your home. It’s not unheard of to need collateral equivalent to 50% or more of the loan amount. You also need articles of incorporation, business licenses, and contracts with all third parties, and your lease.

Your Business Needs a Recession Business Credit Line from Private Investors and Alternative Lenders

Private investors and alternative lenders also offer credit lines. These are easier to qualify for than conventional SBA loans. They also necessitate much less documentation for approval. These alternative SBA credit lines ordinarily require good personal credit for approval.

Unlike with SBA, many of them don’t require good bank or business credit approval. Most of these sorts of programs call for two years’ of tax returns. Tax returns have to show a profit. Rates can vary from 7% or greater and loan amounts range from $25,000 into the millions.

Loan amounts are normally based on the revenues and/or profits on tax returns. In some cases lenders may ask for other financials such as a profit and loss statement, balance sheets, and income statements.

Your Business Needs a Recession Business Credit Line from Merchant Cash Advances

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

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

Details

Loan amounts are usually about $20,000. Lenders routinely do pull your business credit, so you ought to have some credit already and sometimes lenders will want to see tax returns.

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

Your Business Needs a Recession Business Credit Line from Securities as Collateral for Financing

You can get financing despite personal credit if you have some form of stocks or bonds. You can also get approval if you have somebody intending to use their stocks or bonds as collateral for financing.

Personal credit quality doesn’t matter as there are no consumer credit criteria for approval. You can get approval for as much as 90% of the value of your stocks or bonds. Rates are commonly lower than 2%, making this one of the lowest rate credit lines you’ll ever see. You can still earn interest as you typically do on your stocks and bonds.

Demolish your funding problems with our rock-solid guide about 27 killer ways to get cash for your business. Get money even during the worst of a recession.

Credit Cards and Lines are Very Similar

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

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

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

Your Business Needs a Recession Business Credit Line from Unsecured Business Credit Cards

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

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

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

Inquiries

Often, when you apply for a credit card you put an inquiry on your consumer report. When other lenders see these, they will not approve you for more credit since they have no idea how much other new credit you have lately obtained.

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

Your Business Needs a Recession Business Credit Line from Our Credit Line Hybrid

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

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

The end result of their services is that you oftentimes get up to five cards that mimic the credit limits of your highest limit accounts now. Multiple cards create competition, and this means they will raise your limits, frequently within 6 months or fewer of first approval.

Approvals

Approvals can go up to $150,000 per entity like a corporation. With a hybrid credit line they actually get you three to five business credit cards which report just to the business credit reporting agencies. This is significant, something most lenders don’t offer or advertise. Not only will you get funds, but you build your business credit as well so in three to four months, you can then use your new corporate credit to get even more money.

Rates

The lender can also get you low introductory rates, often 0% for 6-18 months. You’ll then pay normal rates after that, typically 5-21% APR with 20-25% APR for cash advances. And they’ll also get you the very best cards for points. So this means you get the very best rewards.

Just like with just about anything, there are HUGE benefits in dealing with a source who specializes in this area. The results will be much better than if you try to go at it alone.

Demolish your funding problems with our rock-solid guide about 27 killer ways to get cash for your business. Get money even during the worst of a recession.

Qualifications

You must have excellent personal credit right now, preferably 685 or better scores, the same as with all business credit cards. You shouldn’t have any negative credit on your report to get approval. And you must also have open revolving credit on your consumer reports now and you’ll need to have five inquiries or fewer in the most recent six months reported.

Fees

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

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

Benefits

They furnish similar benefits which include 0% intro annual percentage rates and five times the amount of approval of a single card but they’re a lot easier to get approval for.

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

With all previous cards above, you have to have good consumer credit to get approval but what happens if your personal credit is not good, and you do not have a guarantor?

This is the time when building corporate credit makes a great deal of sense even when you have good personal credit, setting up your company credit helps you get even more money, and without having a personal guarantee.

Demolish your funding problems with our rock-solid guide about 27 killer ways to get cash for your business. Get money even during the worst of a recession.

Your Business Needs a Recession Business Credit Line But You Can’t Get One? Then Start Building Better Business Credit

As with personal credit, it seems as if the companies which don’t need credit are the ones which are more likely to get it. But that is banks and creditors doing better and more responsible business for themselves – if your company is at risk of defaulting, they either want to give you more expensive terms, or not extend any credit at all.

Here are a few tips on building and improving better business credit.

Separate Your Company Credit From Your Personal Credit

One way is to change your business entity. That is, to either incorporate or become a limited liability company (LLC). Get a separate identification number from the IRS, too, in order to really demonstrate there is a difference.

Get a D-U-N-S Number from Dun & Bradstreet

A D-U-N-S number is necessary in order for D&B to start tracking your business’s credit. Dun & Bradstreet requires that you register on their site before they will give you a D-U-N-S number. Registration is simple and, once you have said yes to the Terms and Conditions, then the next screen is a dashboard. This is where you either ask for a D-U-N-S number or you can look up to see if your business is already in the listings. If your company is already in the listings, then click on your business name to make any needed changes.

Business Credit with a Personal Guarantee

Another means of establishing business credit is by going to your bank and establishing business credit lines or cards with personal guarantees. This means you are personally responsible in case the business defaults or any loans or bills go into collections. Hence if your company is in a high risk business or a seasonal one, you might find your car on the line.

Make sure when you get these kinds of business credit cards, they have the personal guarantee removal feature built right in. Keep your credit utilization at one third of your credit ceiling or less (that is, don’t use more than about one third of your total available credit). Make certain to pay on time every time.

Apply for Third Party Guaranteed Lending

You can use an SBA loan for funding. Repaying this kind of a loan will help you build your business credit score. Or you can apply for a business credit card from a specific store. Often, these store credit cards do not need a personal guarantee. Make sure to choose a store where your business makes a lot of purchases. And don’t forget about those timely payments!

Business Credit Cards and Loans

If your business credit score is good (or if it has improved), then go to your local bank and ask for a credit line. And if you use a particular bank for payroll, you can try that one. If not (or maybe you’re a one-person shop and you don’t really have payroll at all), then you can also take your request to the bank where you do all your personal banking.

Because they already know you, and if they have seen you pay your credit cards on time and keep a good balance in your accounts, they may be more interested in giving your small business a line of credit even without guarantees or a serious credit check. No matter which kind of lending institution you try, go in with good credit as that will make your terms more favorable and it can generally mean the difference between any credit line and none.

Your Business Needs a Recession Business Credit Line – Takeaways

Your business can get credit cards and financing, if you know where to look. Learn more here and get started toward establishing business credit. Keep your small business afloat with a credit line.

The post Get a Recession Business Credit Line – Here’s How appeared first on Credit Suite.

Get Business Credit Cards for 0% APR in a Recession

Yes, you can really get business credit cards for 0% APR in a recession! As our economy continues to change, it is still possible to get these cards.

Get Epic 0% APR Business Credit Cards in a Recession

Do you know how to get 0% APR Business Credit Cards in a recession? We break down the many choices out there to show you the best corporate credit cards with 0% APR.

Per the SBA, corporate credit card limits are often 10 – 100 times that of personal cards! This means you can get a lot more cash with business credit.

And this also means you can have personal credit cards at retail stores, and now have a second card at the same shops for your company. And you will not need collateral, cash flow, or financials to get small business credit.

0% APR Business Credit Cards in a Recession: Benefits

Features vary, so make certain to pick the perk you prefer from this selection of possibilities.

Dependable Credit Cards for Fair to Poor Credit, Not Calling for a Personal Guarantee

Brex Card for Startups

Check out the Brex Card for Startups. It has no yearly charge.

You will not need to supply your Social Security number to use. And you will not need to supply a personal warranty. They will take your EIN. Nevertheless, they do not accept every industry. Additionally, there are some industries they will not work with, and others where they want added paperwork. For a list, go here: https://brex.com/legal/prohibited_activities/.

To determine creditworthiness, Brex checks a business’s cash balance, spending patterns, and investors.

You can get 7x points on rideshare. Get 4x on Brex Travel. Also, get triple points on dining establishments. And get double points on recurring software payments. Get 1x points on everything else.

You can have poor credit scores (even a 300 FICO) to qualify.

Find it here: https://brex.com/lp/startups-higher-limits/

Secure Company Credit Cards for Fair Credit Scores

Capital One® Spark® Classic for Business

Check out the Capital One® Spark® Classic for Business. It has no annual fee. There is no introductory APR offer. The regular APR is a variable 24.49%. You can get unlimited 1% cash back on every purchase for your company, without any minimum to redeem.

While this card is within reach if you have average credit scores, beware of the APR. But if you can pay on time, and in full, then it’s a bargain.

Find it here: https://www.capitalone.com/small-business/credit-cards/spark-classic/

Check out how our reliable process will help your business get the best business credit cards, even during a recession.

Business Credit Cards for 0% APR in a Recession – Pay a Zero Introductory Rate!

Blue Business® Plus Credit Card from American Express

Take a look at the Blue Business® Plus Credit Card from American Express. It has no annual fee. There is a 0% introductory APR for the first 12 months. After that, the APR is a variable 14.74 – 20.74%.

Get double Membership Rewards® points on day to day business purchases like office supplies or client suppers for the first $50,000 spent annually. Get 1 point per dollar afterwards.

You will need good to outstanding credit scores to qualify.

Find it here: https://creditcard.americanexpress.com/d/bluebusinessplus-credit-card/

American Express® Blue Business Cash Card

Also have a look at the American Express® Blue Business Cash Card. Keep in mind: the American Express® Blue Business Cash Card is identical to the Blue Business® Plus Credit Card from American Express. However its rewards are in cash rather than points.

Get 2% cash back on all qualified purchases on up to $50,000 per calendar year. After that get 1%.

It has no annual fee. There is a 0% introductory APR for the first year. After that, the APR is a variable 14.74 – 20.74%.

You will need great to outstanding credit scores to qualify.

Find it here: https://creditcard.americanexpress.com/d/business-bluecash-credit-card/

Alternatives to Business Credit Cards for 0% APR in a Recession: Outstanding Business Credit Cards with No Annual Fee

No Annual Fee/Flat Rate Cash Back

Ink Business Unlimited℠ Credit Card

Have a look at the Ink Business Unlimited℠ Credit Card. Beyond no yearly fee, get an introductory 0% APR for the first twelve months. After that, the APR is a variable 14.74 – 20.74%.

You can get unlimited 1.5% Cash Back rewards on every purchase made for your company. And get $500 bonus cash back after spending $3,000 in the first 3 months from account opening. You can redeem your rewards for cash back, gift cards, travel and more using Chase Ultimate Rewards®. You will need excellent credit to receive this card.

Find it here: https://creditcards.chase.com/business-credit-cards/ink/unlimited

Irresistible Cards for Jackpot Rewards That Never Expire

Capital One® Spark® Cash Select for Business

Take a look at the Capital One® Spark® Cash Select for Business. It has no yearly fee. You can get 1.5% cash back on every purchase. There is no limit on the cash back you can get. Also get a one-time $200 cash bonus when you spend $3,000 on purchases in the initial 3 months. Rewards never expire.

Pay a 0% introductory APR for 9 months. Then pay 14.49% – 22.49% variable APR afterwards.

You will need great to exceptional credit to qualify.

Find it here: https://www.capitalone.com/small-business/credit-cards/spark-cash-select/

Flexible Financing Credit Cards – Take A Look at Your Alternatives!

The Plum Card® from American Express

Have a look at the Plum Card® from American Express. It has an initial annual fee of $0 for the first year. Afterwards, pay $250 each year.

Get a 1.5% early pay discount cash back bonus when you pay within 10 days. You can take up to 60 days to pay without interest when you pay the minimum due by the payment due date.

You will need good to outstanding credit to qualify.

Find it here: https://creditcard.americanexpress.com/d/the-plum-card-business-charge-card/

Alternatives to Business Credit Cards for 0% APR in a Recession: Irresistible Cards for Jackpot Rewards That Never Expire

Capital One® Spark® Cash Select for Business

For a great example of 0% APR business credit cards in a recession, have a look at the Capital One® Spark® Cash Select for Business. It has no yearly cost. You can get 1.5% cash back on every purchase. There is no limitation on the cash back you can earn. And get a one-time $200 cash bonus when you spend $3,000 on purchases in the first three months. Rewards never run out.

Pay a 0% introductory APR for 9 months. Then pay 14.49% – 22.49% variable APR after that.

You will need good to excellent credit to qualify.

Find it here: https://www.capitalone.com/small-business/credit-cards/spark-cash-select/

Check out how our reliable process will help your business get the best business credit cards, even during a recession.

Alternatives to Business Credit Cards for 0% APR in a Recession: Company Credit Cards for Extravagant Travel Points

Flat-rate Travel Rewards

Capital One® Spark® Miles for Business

Have a look at the Capital One® Spark® Miles for Business. It has an introductory annual cost of $0 for the first year, which then rises to $95. The regular APR is 18.49%, variable due to the prime rate. There is no introductory annual percentage rate. Pay no transfer fees. Late fees go up to $39.

This card is excellent for travel if your expenditures don’t come under standard bonus categories. You can get unlimited double miles on all purchases, with no restrictions. Get 5x miles on rental cars and hotels if you book with Capital One Travel.

Get an introductory benefit of 50,000 miles. That’s the same as $500 in travel. But you only get it if you spend $4,500 in the first 3 months from account opening. There is no foreign transaction fee. You will need a great to superb FICO rating to qualify.

Find it here: https://www.capitalone.com/small-business/credit-cards/spark-miles/

Bonus Travel Categories with Sign-Up Offer

Ink Business Preferred℠ Credit Card

For a wonderful sign-up deal and bonus categories, look into the Ink Business Preferred℠ Credit Card.

Pay an annual cost of $95. Regular APR is 17.49 – 22.49%, variable. There is no introductory APR offer.

Get 100,000 bonus points after spending $15,000 in the initial 3 months after account opening. This works out to $1,250 towards travel rewards if you redeem using Chase Ultimate Rewards.

Get three points per dollar of the first $150,000 you spend with this card. So this is for purchases on travel, shipping, internet, cable, and phone services. Plus it includes advertising purchases made with social media sites and also search engines each account anniversary year.

You can get 25% more in travel redemption when you redeem for travel via Chase Ultimate Rewards. So you will need a good to superb FICO score to qualify.

Find it here: https://creditcards.chase.com/business-credit-cards/ink/business-preferred

No Yearly Fee

Bank of America® Business Advantage Travel Rewards World Mastercard® credit card

For a great example of 0% APR business credit cards in a recession, take a look at this card from Bank of America. It has no annual fee and a 0% introductory APR for purchases during the first 9 billing cycles. Afterwards, its regular APR is 13.74 – 23.74% variable.

You can earn 30,000 bonus points when you make at the very least $3,000 in net purchases. So this is within 90 days of your account opening. You can redeem these points for a $300 statement credit towards travel purchases.

Get unlimited 1.5 points for every $1 you spend on all purchases, everywhere, every time. And this is no matter how much you spend.

Likewise earn 3 points per every dollar spent when you book your travel (car, hotel, airline) through the Bank of America® Travel Center. There is no limit to the number of points you can earn and points do not expire.

So you will need outstanding credit scores to get this one (as in, 700s or better).

Find it here: https://www.bankofamerica.com/smallbusiness/credit-cards/products/travel-rewards-business-credit-card/

Hotel Credit Card

Marriott Bonvoy Business™ American Express® Card

Check out the Marriott Bonvoy Business™ Card from American Express. It has a yearly fee of $125. There is no introductory APR offer. The regular APR is a variable 17.24 – 26.24%. you will need good to superb credit scores to get this card.

Points

You can get 75,000 Marriott Bonvoy points after using your card to make purchases of $3,000 in the first 3 months. Get 6x the points for eligible purchases at participating Marriott Bonvoy hotels. You can get 4x the points at US restaurants and gasoline stations. And you can get 4x the points on wireless telephone services bought directly from US service providers and on US purchases for shipping.

Get double points on all other eligible purchases.

Rewards

And also, you get a free night each year after your card anniversary. And you can make an additional free night after you spend $60,000 on your card in a calendar year.

You get free of charge Marriott Bonvoy Silver Elite status with your Card. And also, spend $35,000 on qualified purchases in a calendar year and also make an upgrade to Marriott Bonvoy Gold Elite status through completion of the next calendar year.

And also, each calendar year you can get credit for 15 nights towards the next level of Marriott Bonvoy Elite status.

Find it here: https://creditcard.americanexpress.com/d/bonvoy-business/

Your Best Business Credit Cards for 0% APR in a Recession and More

Your absolute best 0% APR business credit cards in a recession will hinge upon your credit history and scores. Just you can determine which features you want and need, so make sure to do your research. And, as always, make certain to build business credit in the recommended order for the best, fastest benefits.

This is a strategy that can work for you and your business for years to come – no matter what the economy is doing. Get business credit cards for 0% APR in a recession – and afterwards.

Check out how our reliable process will help your business get the best business credit cards, even during a recession.

The post Get Business Credit Cards for 0% APR in a Recession appeared first on Credit Suite.

Get a Recession Business Loan the Smart Way

Get a Recession Business Loan the Reliable Way

Do you know how to get a recession business loan, even if your credit is less than stellar? We break down what’s out there, even if your personal credit is not so hot.

Poor credit does not need to be a dead weight around your company’s proverbial neck. Nevertheless, it does make it more difficult to get a small business loan. For a brand-new small business particularly, your business credit will be poor by definition.

This is because you just will not have the kind of background and seasoning which can make your commercial credit score go up.

And, for this reason, such seasoning would make lenders wish to loan your small business money.

As a result, lending institutions are not going to be too excited about granting your business a company loan. This is because they genuinely have no idea if your small business will be able to pay back the loan.

But you are still, not surprisingly pondering how to subsidize a company with bad credit.

Recession Era Financing

The number of United States banks and thrifts has been decreasing slowly for a quarter of a century. This is from consolidation in the marketplace in addition to deregulation in the 1990s, decreasing obstacles to interstate banking. See: https://www.fundera.com/blog/happened-americas-small-businesses-financial-crisis-six-years-start-crisis-look-back-10-charts

Assets concentrated in ever‐larger financial institutions is problematic for local business proprietors. Big financial institutions are much less likely to make small loans. Economic slumps mean financial institutions come to be more careful with financing. The good news is, business credit does not rely upon financial institutions.

Lenders May Take Out UCC Blanket Liens When You Get a Recession Business Loan

As a result of this, lenders will oftentimes obtain a UCC blanket lien in the event that they do give your company a loan. A UCC blanket lien is a note which is included with your credit report. It says that the creditor has an interest in all of your company’s assets until you pay off the loan completely. For that reason, there might be dire repercussions if you need to default.

Plus, many of these loans will also involve personal guarantees.

What is an Unsecured Recession Business Loan?

Having said that, if a loan does not require a personal guarantee, then your small business is typically going to be looking at unsecured business loans, and those are coupled with high interest rates.

These sorts of business loans can be short term. So, you must pay them back fast. Or they can be receivables financing. Hence this is where you are able to get a loan based on business you anticipate to be coming in. This is because you have pending bills which your own customers have not paid out to you yet. Or, it can be vendor cash advances.

These all come with lending rates which are often 40% or higher.

Get a Recession Business Loan: The Advantages of Unsecured Loans

The main advantage is that you do not need to provide a personal guarantee or allow a UCC blanket lien. If you end up defaulting on the loan, then your house and any other private assets will not be seized, and neither will your inventory. However, this also implies that you normally must have strong revenue or a substantial amount of time in business. Generally speaking, your personal credit must be fair or better.

And that’s even in the absence of a personal guarantee requirement.

Get a Recession Business Loan: The Disadvantages of Unsecured Loans

It’s all about the interest. As reported by Nerd Wallet, Kabbage can deliver an unsecured business loan – yet the APR can possibly be as high as 99%! If you think that’s usury, think again. In Ohio, the usury laws don’t apply to unsecured loans.

Another drawback (although not everyone will see it in that way) is that unsecured business loans often demand that your business has been in operation for at least six months. Or they may require that you have no personal bankruptcies. Another possibility is your business needs to show a minimal yearly revenue amount.

And that means opening your books to your creditor. If any one of these demands has already been met by you, then you possibly won’t see this as a real disadvantage.

Having said that, you can have issues. They can arise if your company is brand-new, and you do not as of yet have a regular clientele and profits. Another problem is if you have had personal bankruptcy problems. Then you may be shut out of your few remaining alternatives.

For all these alternatives, you will usually have a preferable rate of interest (and you will probably have more alternatives, so you can shop around and compare plans) if your credit score is better than bad. If your business can sit tight till your credit – either small business or private or both – develops, then your options will significantly improve, too.

Let’s look at more options.

Learn business loan secrets with our free, sure-fire guide. We can help you get money, even during a recession.

Credit Lines

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

A borrower can access funds from their line of credit any time, as long as they don’t go beyond the maximum set in the agreement, and as long as they meet all other requirements of the finance institution or investor for instance, making prompt payments.

Advantages

Credit lines provide many one-of-a-kind benefits to borrowers including versatility. Borrowers can employ their line of credit and just pay interest on what they use, in contrast to loans where they pay interest on the total amount borrowed. Credit lines can be reused, so as you acquire a balance and pay that balance off, you can use that accessible credit again, and again.

Details

Credit lines are revolving accounts similar to credit cards, and compare to various other types of financing such as installment loans. In many cases, lines of credit are unsecured, much the same as credit cards are. There are some credit lines that are secured, and for this reason easier to get approval for

Credit lines are the most commonly requested loan type in the business world despite the fact that they are popular, legitimate credit lines are uncommon, and challenging to find. Many are also very hard to qualify for calling for good credit, good time in business, and good financials. But there are other credit cards and lines which few people know about that are available for start-ups, bad credit, as well as if you have absolutely no financials.

Get a Recession Business Loan from The SBA

Most credit line types that most business owners picture come from traditional banks and standard banks use SBA loans as their primary loan product for small business owners. This is due to the fact that SBA ensures as much as 90% of the loan in the event of a default. These credit lines are the most challenging to get approval for because you must qualify with SBA and the bank.

SBA Loans

There are two primary sorts of SBA loans you can normally obtain. One form is CAPLines. There are actually 4 types of CAPLines that can work for your company.

You can also acquire a smaller loan amount more quickly using the SBA Express program. The majority of these programs offer BOTH loans and revolving lines of credit.

From the SBA … “CAPLines is the umbrella program under which SBA helps business owners meet short-term and cyclical working capital needs”. Loan amounts are available up to and including $5 million. Loan qualification requirements are the same as for other SBA programs.

Seasonal Line

This one advances against anticipated inventory and accounts receivables. It was created to assist seasonal businesses. Loan or revolving are on offer.

Contract Line

This one finances the direct labor and material costs of performing assignable contracts. Loan or revolving kinds are available.

Builders Line

This one was made for general contractors or builders constructing or renovating industrial or residential buildings. This line is for pay for direct labor-and material costs, where the building project acts as the collateral. Loan or revolving kinds are on offer.

Working Capital

Get a Recession Business Loan from SBA Express

You can get approval for up to and including $350,000. Interest rates can be different, with SBA enabling banks to charge as high as 6.5% over their base rate. Loans above $25,000 will necessitate collateral.

Approval Details

To get approval you’ll need great personal and business credit. Plus the SBA specifies you must not have any blemishes on your report. An acceptable bank score requires you have at least $10,000 in your account over the last 90 days.

You’ll also need a resume showing you have market experience and a well put together business plan. You will need three years of company and personal tax returns, and your business returns should show a profit. And, you’ll need a current balance sheet and income statement, therefore showing you have the finances to pay back the loan.

Collateral

To get approval you’ll need account receivables, but only if you have them. As for the collateral to make up for the risk, often all business assets will function as collateral, and some personal assets which also include your residence. It’s not unheard of to need collateral equivalent to 50% or more of the loan amount. You also need articles of incorporation, business licenses, and contracts with all third parties, and your lease.

Get a Recession Business Loan from Private Investors and Alternative Lenders

Private investors and alternative lenders also offer credit lines. These are a lot easier to get approval for than conventional SBA loans. They also necessitate much less documentation for approval. These alternative SBA credit lines typically need good personal credit for approval.

Unlike with SBA, many of them don’t demand good bank or business credit approval. Nearly all of these sorts of programs require two years’ of tax returns. Tax returns need to show a profit. Rates can vary from 7% or higher and loan amounts extend from $25,000 into the millions. Loan amounts are typically based on the revenues and/or profits on tax returns. At times lenders may want other financials including a profit and loss statement, balance sheets, and income statements.

Learn business loan secrets with our free, sure-fire guide. We can help you get money, even during a recession.

Merchant Cash Advances

Merchant cash advances have rapidly become the most popular way to get financing, in large part due to the easy qualification process. Companies with $10,000 in revenue can get approval, with the business owner having scores as low as 500.

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

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

Rates vary, due to the risk for this program, and there usually are not a lot of funding sources who offer it.

Get a Recession Business Loan and Use Stocks/Bonds as Collateral for Financing

You can get financing irrespective of personal credit if you have some form of stocks or bonds. You can also get approval if you have someone wishing to use their stocks or bonds as collateral for financing.

Personal credit quality doesn’t matter as there are no consumer credit requirements for approval. You can get approval for as much as 90% of the value of your stocks or bonds. Rates are usually lower than 2%, making this one of the lowest rate credit lines you’ll ever see. You can still earn interest as you usually do on your stocks and bonds.

Credit Cards and Lines are Very Similar

Credit cards typically offer 0% intro rates for up to two years. This is also very handy for startups in particular. And credit lines let you take out more cash at a much cheaper rate than do cards. These are the principal two differences that will have an effect on you between credit cards and credit line.

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

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

Unsecured Business Credit Cards

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

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

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

Inquiries

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

So they’ll only approve you if you have less than two inquiries on your report within the last six months. Any more will get you refused.

Get a Recession Business Loan with our Credit Line Hybrid

With this form of business financing, you work with a lender who specializes in securing business credit cards. This is a very uncommon, only a few know about program which few lending sources offer. They can oftentimes get you three to five times the approvals that you can get on your own.

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

The end result of their services is that you generally get up to five cards that simulate the credit limits of your maximum limit accounts now. Multiple cards generate competition, and this means they will raise your limits, normally within 6 months or less of original approval.

Approvals

Approvals can go up to $150,000 per entity for instance, a corporation. With a hybrid credit line they actually get you three to five business credit cards which report only to the business credit reporting agencies. This is huge, something most lenders don’t offer or promote. Not only will you get money, but you build your business credit as well so within three to four months, you can then use your new company credit to get even more money.

Rates

The lender can also get you very low introductory rates, typically 0% for 6-18 months. You’ll then pay normal rates after that, typically 5-21% APR with 20-25% APR for cash advances. And they’ll also get you the very best cards for points. So this means you get the very best rewards.

Just like with just about anything, there are huge benefits in teaming up with a source who focuses on this area. The results will be much better than if you attempt to go at it alone.

Learn business loan secrets with our free, sure-fire guide. We can help you get money, even during a recession.

Qualifications

You have to have excellent personal credit right now, ideally 685 or better scores, the same as with all business credit cards. You shouldn’t have any negative credit on your report to get approval. And you must also have open revolving credit on your consumer reports right now and you’ll have to have five inquiries or less in the most recent six months reported.

Fees

All lenders in this space charge a 9-15% success based fee and you only pay the cost off of what you secure. Bear in mind, you get a number of added benefits and about three to five times more cash with this program than you could get on your own, which is why there’s a fee, the same as all other lending programs.

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

Benefits

They supply similar benefits which include 0% intro APRs and five times the amount of approval of a single card but they’re a lot easier to get approval for.

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

With all earlier cards above, you should have good consumer credit to get approval but what happens if your personal credit isn’t good, and you don’t have a guarantor?

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

Building Business Credit

Company credit is credit in a business name, in connection with the company’s EIN number, and not the owner’s Social Security Number. When carried out correctly, you can obtain business credit without a personal credit check and without a personal guarantee. This is something all other cards above can’t provide.

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

Next is fleet credit. It’s credit to fuel, service, and maintain business vehicles. And then there’s cash credit, which includes Visa, MasterCard, and American Express cards that you can use anywhere. You can get these with no credit check or guarantee. Limits are normally $5,000 – $10,000 to begin, and can exceed $50,000.

Get a Recession Business Loan: Takeaways

A little patience is a virtue when you want to get a recession business loan.

The post Get a Recession Business Loan the Smart Way appeared first on Credit Suite.

On the Hunt: Finding Elusive Recession Startup Business Loans

COVID-19 threw our country into a recession that no one really saw coming. The drastic turn in the economy was jarring to say the least. Starting a business now can be scary. Here’s what you need to know about recession startup business loans and other funding options.

How to Find Other Funding Options Besides Recession Startup Loans

Small businesses continue to report problems finding credit. About 45% do not apply, most likely due to the fact that they do not need to. Another 20% don’t apply because they are discouraged from doing so. They either feel they will not qualify or they believe the process is too hard, and therefore not worth the time.

Small business owners report that competition among banks for their business came to a head from 2001 to 2006, and that this competition has declined from 2006 to the present.

But Wait, There’s More to Recession Startup Business Loans and the Economy

Even more concerning, according to one report, the number of American banks and thrifts has been decreasing slowly for 25 years. This is coming from consolidation in the marketplace in addition to deregulation in the 1990s, reducing barriers to interstate banking. What does that mean in layman’s terms? In short, recession is coming. Will you be able to find funding?

Assets focused in ever‐larger financial institutions is a problem for small business owners. Big banks are a lot less likely to make small loans. Economic declines usually mean financial institutions will become more mindful with financing.

The good thing for small businesses is, business credit does not rely on traditional financial institutions. What about recession startup business loans? How do you find them? Does such a thing even exist?

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

In the strictest sense, yes. I mean, startup business loans do not just disappear during a recession. They are just harder to get. Startups are a big risk, and few lenders are willing to take such risks, especially during a recession.

That doesn’t mean you should lose all hope however. There are options that can make it easier for you to qualify, and if you are still not able to get startup business loans, other types of funding do exist.

The Credit Game?

Lenders check credit to help determine whether or not a borrower is likely to repay the loan. It is an effort to reduce risk. If you have great personal credit, you are home free. No need to hunt, the loans will come to you whether there is a recession or not.

While credit is a good indicator of likelihood to repay, it is far from perfect. The problem is, for business loans, most owners have to rely exclusively on their personal credit. This is because, as a startup, they likely do not have any business credit yet. It is possible to have not so great personal credit and still be able to meet business obligations.

What Else Can Lenders Use besides Credit to Approve Recession Startup Business Loans?

There are a ton of potential borrowers out there that could be great for lenders. Unfortunately, they will never get a second look because of a poor personal credit score or non-existent business credit score.

Some lenders are willing to take other factors into consideration when they determine whether to approve business loans. They may look at credit, but they look at income, current debt, and length of time in business as well.

Often a business can get approval based on length of time in business and annual revenue. It is important to remember that startups can be as young as a couple of years. It does not have to be a brand-new business to qualify as a startup.

Most loans that do not require a great credit score do require at least 6 months in business. Some will go with 3 months. Few and far between are the loans that do not have a minimum time in business requirement.

Some lenders will get as personal as to ask why your personal credit score is low. If there is a personal situation that caused a decline in credit, telling them about it may help. In addition, if your score is low but has increased significantly, you should bring that to their attention as well.

For example, if you can show them that your score went low as a result of a health problem, but has increased 100 points since that problem was resolved, it can only help.

What Exactly Are You Hunting For?

Loans are hard to come by in a recession, period. Recession startup business loans may be some of the hardest to find. The key is to remember you are hunting more for the right lender, rather than the right loans. Not only that, but you may be better off looking for another type of funding all together. Here are some surprising alternatives to traditional lenders and loans.

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

Alternative Lenders

Alternative lenders are likely the best option when it comes to business loans in a recession. They are alternatives to the standard banks and credit unions. Many operate solely online. They often process applications in just a few days, and borrowers receive funds quickly.

The main difference in alternative and traditional lenders is that there are many occasions where they may not even do a credit check. Often, if you can show that you are generating sufficient revenue to repay the loan and interest, you are golden.

You do have to do your research still. Do not assume every loan an alternative lender offers is what you are looking for.

The interest rates with alternative lenders are generally higher, and the repayment terms are less liberal. They may also require a personal guarantee or collateral of some sort.

Despite the often less favorable interest rates and terms, these are a great option for those looking for recession startup business loans.

Crowdfunding as an Alternative to Recession Startup Business Loans

Crowdfunding is not technically a loan, though some crowdfunding sites offer a lending option. These are more in line with investments. This means you do not have to pay them back.

It won’t work for everyone. You have to set a goal for the amount of investment you want. With some sites, if you do not reach that amount, you do not get your funds. Other crowdfunding sites are more flexible, allowing you to take whatever you can get.

The main reason this doesn’t technically fall into the category of business loans is that the main product is not a loan. You do have to provide in depth information however, and most sites require you to offer backers an incentive for their investment. It is only fair to mention, also, that it may be harder to find those willing to participate in crowdfunding during a recession.

Angel Investors

Again, this isn’t a loan, but it is an option if finding recession startup business loans is proving difficult. The idea is very similar to that of crowdfunding, except you replace the crowd with one investor. Sometimes it is two or three investors. It is a few, and not a crowd, that provide the bulk of the funding.

It’s important to note that angel investing in your endeavor can be really informal. Even your mother can be an angel investor.

Invoice Factoring

If you have been in business long enough to have open invoices, invoice factoring could be an option. The lender is not concerned with your credit, because they will not be collecting from you.

They will pay you a discounted value for your open invoices and then attempt to collect the full amount from your customers. This is an excellent funding option, but it does not operate exactly the same as traditional loans.

Credit Line Hybrid

A credit line hybrid is the funding option many do not know about, and it is perfectly suited for business funding during an economic downturn. It allows you to fund your business without putting up collateral, and you only pay back what you use.

How hard is it to qualify? Not as hard as you may think. You do need good personal credit. That is, your personal credit score should be at least 685. In addition, you can’t have any liens, judgments, bankruptcies or late payments. Furthermore, in the past 6 months you should have less than 5 credit inquiries, and you should have less than a 45% balance on all business and personal credit cards. It’s also preferred that you have established business credit as well as personal credit.

If you do not meet all of the requirements, it’s okay. 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 are the Benefits of a Credit Line Hybrid?

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, the funding is “no-doc.” This means you do not have to provide any bank statements or financials.

Not only that, but typically approval is up to 5x that of the highest credit limit on the personal credit report. Additionally, often you can get interest rates as low as 0% for the first few months, allowing you to put that savings back into your business.

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, and likely even if you handle the credit responsibly, that you can get interest rates lowered and limits raised every few months.

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

Self-Funding with Friends and Family During a Recession

Your friends and family are often your best source of recession startup business loans. If they believe in your cause and have the funds, they may be willing. They may also be more flexible and generous in terms of interest rates and repayment terms. It never hurts to ask.

If you have savings or retirement funds available, there is no doubt you will have guaranteed approval with what’s called securities-based financing. An added bonus is that you can repay yourself, and if you choose to do so with interest, even a little, you could end up better off. If you need to take it more slowly, you can do that too. You can be as flexible as you want with yourself.

Avoid the Hunt for Recession Startup Business Loans

If you are weary of the hunt, start now working to establish and build business credit. Many times, this is an issue for the simple reason that business owners do not understand business credit and personal credit are not the same thing.

By working to establish a credit score for your business separate from your own, you make it easier to fund your business endeavors in the future.

First Things First

If you do not currently have business credit and need to get it established, there are some simple steps you can take to get started.

Incorporate your business as a corporation, S-corp, or LLC.

Get your business its own phone number and address separate from your own.

List this information under your business name in all the directories.

These steps establish your business as its own entity separate from you and your finances. This is the essential first step to establishing business credit.

Build Strong Business Credit

This should be the ultimate goal. Once your business is its own entity, you can work on building, or repairing, bad credit. When that part is complete, you no longer have to worry about finding funding based on your personal credit alone. You will just be able to apply for a loan and negotiate for the best terms and rates.

How do you get there? First, make sure you are doing business with vendors that report to the credit agencies. Then, get whatever credit you are eligible for.

Even if you don’t need credit at the moment, get something. Make your payments on time, consistently. This builds a credit score where there was none before, and it can begin to repair a poor credit score.

A Successful Hunt Many Not Even Include Recession Startup Business Loans

There is always an obstacle to overcome. There is always a problem of some sort. Don’t let the finding recession startup business loans be the thing that keeps you from starting and running a successful business.

You may be able to find a loan, but if you can’t, there is more than one way to bag the prize. The alternatives to business loans for startup funding are numerous. If the regular weapons are not available for whatever reason, find another way. Take a look at alternative lenders, invoice factoring, merchant cash advance options, Crowdfunding, Angel Investors, or even friends and family.

Recessions come and go. It is the nature of the economy. No matter what, it just happens. It can be counted on the same way as the sunrise and sunset. Thankfully, it doesn’t have to bring success or progress to a halt. Explore your options and be diligent to find the funding you need for your business. You have to get creative and seek out alternative methods, and that is okay. Having a strong business credit score can definitely help also. Find out more about that here.

Just don’t give up. Remember, the key is to put yourself in a better situation so that once you survive the battle, you can win the war.

The post On the Hunt: Finding Elusive Recession Startup Business Loans appeared first on Credit Suite.

Seven Ways You Can Destroy Your Recession Bank Credit

Your Recession Bank Credit Score – What’s it All About?

Did you know there are all kinds of ways you can wreck your recession bank credit score? It is, regrettably, pretty easy to run a power saw through your bank score.

However prior to going any further, do you know the distinction between recession bank credit scores and company credit?

Small business credit is the full and complete amount of cash that your company can obtain from all types of creditors. That means the banking system, credit unions, credit card companies, and also renting businesses. And it also means vendors, under what’s called trade credit or supplier credit or trade lines. That is, vendor credit.

But a recession bank credit score, on the other hand, is a measure of the full amount of borrowing capability which a business can receive from the banking system only.

Recession Era Financing

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

Assets focused in ever‐larger banks is troublesome for small business owners. Big financial institutions are much less likely to make small loans. Economic declines imply banks become much more careful with lending. The good news is you can assure your bank by improving your recession bank credit score.

Recession Bank Credit Ratings Clarified

A small business can obtain more company credit promptly, so long as it has at the very least one bank reference and an average day-to-day account balance of at least $10,000 for the most recent three month time period. This setup will yield a bank credit score of a Low-5. So this means it is an Adjusted Debt Balance of from $5,000 to $30,000.

A lower score, like a High-4, or balance of $7,000 to $9,999 will not immediately decline the small company’s loan application. Nevertheless, it will slow down the approval process.

Have a look at our expert research on bank scores, the little-known reason you will – or won’t – get a bank loan for your small business.

What is a Recession Bank Credit Score?

A bank rating is a measure of the average minimum balance as kept in a business bank account over a 3 month long period. Therefore a $10,000 balance| will rate as a Low-5, a $5,000 balance will rate as a Mid-4, and a $999 balance will rank as a High-3, etc.

A business’s principal goal should always be to maintain a minimum Low-5 bank rating (or, an average $10,000 balance) for at the very least three months. This is because, without at least a Low-5 score, the majority of banks will operate under the assumption that the business has little to no capacity to pay off a loan or a business line of credit.

Yet there is one point to remember – you will never really see this number. The financial institution will simply keep this number in its back pocket.

It is vital, particularly in bad economic times, to do your best to raise your recession bank credit score.

Recession Bank Credit Score Ranges

The numbers work out to the following ranges:

To get a High-5 rating, your business will need to have an account balance of $70,000 to $99,999. For a Mid-5 score, your company must have an account balance of $40,000 to $69,999. And for a Low-5 rating, your company needs to keep an account balance of $10,000 to $39,000. So your small business needs this level bank score or better in order to get a bank loan.

For a High-4 score, your small business has to have an account balance of $7,000 to $9,999. And for a Mid-4 rating, your small business must maintain an account balance of $4,000 to $6,999. So for a Low-4 rating, your small business will need to have an account balance of $1,000 to $3,999.

Damaging Your Recession Bank Credit Rating

And now, without further ado, right here are 7 ways you can leave your bank rating in tatters.

7th Way to Destroy Your Bank Credit

Don’t keep a minimum balance for a minimum of three months. Because every bank score cycle is based upon the previous 3 months, a continuously seesawing balance should harm your bank rating.

6th Way to Ruin Your Bank Credit

Don’t bother to guarantee that your company bank accounts are reported precisely the same way as every one of your company documents are, and also with the exact same physical address (no post office box) and contact number. Sow confusion here by changing one and not another, or not fixing an error if there is one.

Have a look at our expert research on bank scores, the little-known reason you will – or won’t – get a bank loan for your small business.

5th Way to Destroy Your Bank Credit

To go along with # 6, do not make certain that each and every credit bureau and trade credit vendor likewise lists the business name and address the precise same way. This is every keeper of financial documents, earnings and sales taxes, web addresses as well as e-mail addresses, directory assistance, and so on.

No lending institution is going to think of the myriad ways that a business might be listed, when they check out the business’s creditworthiness. Thus if they are not able to locate what they need easily, they will either deny an application or it won’t be reported to a business credit reporting agency such as Experian, Equifax or Dun & Bradstreet.

For that reason, if they are not able to locate what they require conveniently, they will simply reject the application. So ensure your records are a mess!

4th Way to Damage Your Bank Credit

Never handle your bank account responsibly. This means that your small company ought to not prevent writing non-sufficient funds (NSF) checks at all costs, since those annihilate bank ratings. Non-sufficient-funds checks are something which no small business can afford to let happen.

Balancing checkbooks and accounts is so boring anyway. You’ve got adequate cash without even making sure, right?

3rd Way to Ruin Your Bank Credit

To contribute to # 4, do not include overdraft protection to your bank account immediately, in order to avoid NSFs. Why bother thinking in advance or preparing for the future? Everything is going to| be excellent permanently, right?

Writing checks insufficient funds (NSFs) is a sure way to wreck your bank rating.

2nd Way to Destroy Your Bank Credit

Don’t let your business show a positive cash flow. The cash coming in and leaving your firm’s bank account must reflect a positive free cash flow.

A positive free cash flow is the quantity of income left over after a company has paid every one of its expenses. According to Investopedia, it “represents the cash a company can generate after required investment to maintain or expand its asset base. It is a measurement of a company’s financial performance and health.”

When an account shows a positive cash flow it suggests your company is producing more profits than is used to run the business. That means the financial institution will feel your small business can pay its costs.

So if you actually intend to ravage your bank score, purchase whatever’s expensive for your company so your costs outstrip your earnings. Doesn’t every factory deserve deluxe carpets in the loading dock?

Have a look at our expert research on bank scores, the little-known reason you will – or won’t – get a bank loan for your small business.

1st Way to Destroy Your Bank Credit

Banks are extremely motivated to lend to a business with consistent deposits. And a business owner needs to also make regular deposits in order to keep a positive bank rating. The business owner has to make several consistent deposits, more than the withdrawals they are making, in order to have and preserve a great bank score. If they can do that, then they will have an excellent bank credit score.

Consistency is the hobgoblin of little minds, right? So be a free spirit!

Damage Your Small Business’s Recession Bank Credit Rating – Despite The Fact That You Will Never See It

You, the entrepreneur must never make consistent deposits. And these deposits should never be more than the withdrawals you are making, in order to destroy your bank credit rating.

If you can do these things, then your business will have a horrible bank credit score. And, in turn, a bad bank credit rating means your company is far less likely to obtain business loans.

Just Kidding: Certainly We Do Not Actually Want You to Ruin Your Business’s Recession Bank Credit Score!

So, where do you go from here?

The First Great Way to Rescue Your Bank Credit

Perhaps the most convenient way to achieve and maintain a great bank credit is to deposit at least $10,000 into your business bank account and keep it there for as much as six months. While you will still need to make regular deposits, this one simple step will aid in three ways. One, you will have kept a great minimum balance for a minimum of three months. 2, you will probably not overdraw with such a great balance. And 3, you will get to the magic minimum for a Low-5 bank credit rating. Hence you will be taking care of our # 4 and # 7, above.

And you may even have the ability to get around our # 3. However we still highly recommend overdraft protection.

The Second Terrific Way to Rescue Your Bank Credit Rating

A 2nd requirement is to see to it your small business account information correspond across the board, all over. While it may take some work order to ensure everything is right, you will be taking care of our # 5 as well as # 6, above.

The Third Great Way to Rescue Your Bank Credit Rating

A 3rd necessity is to make regular deposits, and make sure they are greater than the quantities you are withdrawing every month. This will take care of our # 1 and also # 2 conveniently.

Your bank rating is not to be trifled with. Despite the fact that the banks maintain a secret regarding them, failing to keep your bank credit score high will make it a great deal tougher to be successful in business.

The post Seven Ways You Can Destroy Your Recession Bank Credit appeared first on Credit Suite.

Build Credit with No Credit in a Recession

Is the novel coronavirus getting you down? Life is on pause – and it looks like we are heading right into a recession. Still, it can be the perfect time to improve your business. Yes, you can build credit with no credit in a recession. Here’s how.

Learn How to Build Credit with No Credit in a Recession – We Show You How!

Can you build credit with no credit in a recession? It’s admittedly not easy but it’s far from impossible. Patience and creativity are your best friends.

Build Credit with No Credit in a Recession

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

Consequently, a business owner’s business and individual credit scores can be very different.

Build Credit with No Credit in a Recession: The Advantages

Since business credit is independent from individual, it helps to safeguard a small business owner’s personal assets, in case of court action or business bankruptcy.

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

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

Consumer credit scores are dependent on payments but also additional considerations like credit usage percentages.

But for small business credit, the scores really just depend on whether a small business pays its bills punctually.

Build Credit with No Credit in a Recession: The Process

Growing company credit is a process, and it does not happen without effort. A small business must actively work to build business credit.

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

Vendors are a big component of this process.

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

Build Credit with No Credit in a Recession: Start with Company Fundability

A small business has to be fundable to lenders and vendors.

For this reason, a company will need a professional-looking website and email address. And it needs to have website hosting from a merchant like GoDaddy.

Also, company telephone and fax numbers need to have a listing on ListYourself.net.

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

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

Licenses

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

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

Learn more here and get started toward growing company credit. Get money even in a recession!

Build Credit with No Credit in a Recession and Deal with the IRS

Visit the Internal Revenue Service web site and get an EIN for the company. They’re free. Select a business entity like corporation, LLC, etc.

A business may get started as a sole proprietor. But they absolutely need to switch to a variety of corporation or an LLC.

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

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

The best thing to do is to incorporate. You should only look at a DBA as an interim step on the way to incorporation.

Build Credit with No Credit in a Recession: Getting Started

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

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

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

Starter Vendor Credit

First you must build tradelines that report. Then you’ll have an established credit profile, and you’ll get a business credit score.

And with an established business credit profile and score you can begin to get credit for numerous purposes, and from all sorts of places.

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

But first off, what is trade credit? These trade lines are credit issuers who give you starter credit when you have none now. Terms are ordinarily Net 30, versus revolving.

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

Details

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

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

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

Vendor Credit – It Helps

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

As you get starter credit, you can also start to get credit from retailers. This is to continue to verify you are responsible and pay in a timely manner. Here are some stellar choices from us: https://www.creditsuite.com/blog/5-vendor-accounts-that-build-your-business-credit/

Uline

Uline is a true starter vendor. You can find them online at www.uline.com. They offer shipping, packing, and industrial supplies, and they report to D&B and Experian. You MUST have a D-U-N-S number and an EIN before starting with them. They will ask for your business bank information. Your business address must be uniform everywhere. You need for an order to be $50 or more before they’ll report it. Your first few orders may need to be prepaid initially so your company can get approval for Net 30 terms.

How to apply with them:
Add an item to your shopping cart
Go to checkout
Select to Open an Account
Select to be invoiced

Quill

Quill is another true starter vendor. You can find them online at www.quill.com. They sell office, packaging, and cleaning supplies. And they also sell toner, office furniture, and even shipping and school supplies. They report to Dun and Bradstreet every quarter.

To apply, you MUST have a D&B PAYDEX score. If not given a Net 30 they will ask you to do prepaid orders of $100.00. Normally any prepaid order won’t report but you would need them to have given you a Net 30 account. Net 30 accounts require $50.00 purchase to report.

New business or businesses with no credit history may need to prepay purchases until Net 30 approval. Terms are Net 30.

Here’s how to qualify:
Your business entity must be in good standing with the applicable Secretary of State
You must have an EIN and a D-U-N-S number
Business address (it has to match everywhere)
Business license (if applicable)
A business bank account

Apply online or over the phone.

Grainger Industrial Supply

Grainger Industrial Supply is likewise a true starter vendor. You can find them online at www.grainger.com. They sell hardware, power tools, pumps and more. They also do fleet maintenance. And they report to D&B. You need a business license, EIN, and a D-U-N-S number.

To qualify, you need the following:
A business license (if applicable)
An EIN number
A company address matching everywhere
A business bank account
A D-U-N-S number from Dun & Bradstreet

Your corporate entity must be in good standing with the applicable Secretary of State. If your company does not have established credit, they will require additional documents. So, these are items like accounts payable, income statement, balance sheets, and the like.

Apply online or over the phone.

Accounts That Don’t Report

Non-reporting trade accounts can also be helpful. While you do want trade accounts to report to at the very least one of the CRAs, a trade account which does not report can still be of some worth.

You can always ask non-reporting accounts for trade references. Also, credit accounts of any sort should help you to better even out business expenditures, consequently making financial planning easier.

Store Credit

Store credit comes from a variety of retail companies.

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

Fleet Credit

Fleet credit is from service providers where you can purchase fuel, and fix and take care of vehicles. You must use your Social Security Number and date of birth on these applications for verification purposes. For credit checks and guarantees, make sure to apply using the company’s EIN.

Learn more here and get started toward growing company credit. Get money even in a recession!

Cash Credit

These are businesses such as Visa and MasterCard. You must use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, use your EIN instead.

These are frequently MasterCard credit cards.

Learn more here and get started toward growing company credit. Get money even in a recession!

Build Credit with No Credit in a Recession and Monitor Your Business Credit

Know what is happening with your credit. Make sure it is being reported and attend to any inaccuracies as soon as possible. Get in the practice of checking credit reports. Dig into the particulars, not just the scores.

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

At Equifax, you can monitor your account at: www.equifax.com/business/business-credit-monitor-small-business.

Update Your Data

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

Build Credit with No Credit in a Recession and Fix Your Business Credit

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

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

Disputes

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

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

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

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

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

A Word about How to Build Credit with No Credit in a Recession

Always use credit responsibly! Don’t borrow beyond what you can pay back. Keep track of balances and deadlines for repayments. Paying on schedule and fully will do more to raise business credit scores than virtually anything else.

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

The company’s EIN connects to high scores and loan providers won’t feel the need to request a personal guarantee.

Build Credit with No Credit in a Recession: Takeaways

Business credit is an asset which can help your business for many years to come. Learn more here and get started toward establishing small business credit. The COVID-19 situation is not going to last forever.

The post Build Credit with No Credit in a Recession appeared first on Credit Suite.

Best Recession Business Credit Cards for Average Credit

Are you looking for recession business credit cards for average credit? It may seem harder with the novel coronavirus changing our society. But it can still be done! Average personal credit does not have to be an obstacle to getting credit. Yes, you can get funding even now, and it does not have to come from the Small Business Administration.

Check out how – we can show you how.

Get the Recession Best Business Credit Cards for Average Credit

Are you searching for the best recession business credit cards for average credit? Then look no further, for we have done the research on cards and a number of different perks, too!

Per the SBA, business credit card limits are a whopping 10 – 100 times that of consumer cards!

This demonstrates you can get a lot more money with small business credit. And it also means you can have personal credit cards at retailers. So you would now have an extra card at the same stores for your company.

And you will not need collateral, cash flow, or financial data in order to get business credit.

Business Credit Card Benefits

Benefits can differ. So, make certain to pick the perk you like from this selection of options.

Secure Recession Business Credit Cards for Fair to Poor Credit, Not Requiring a Personal Guarantee

Brex Card for Startups

Have a look at the Brex Card for Startups. It has no annual fee.

You will not need to provide your Social Security number to apply. And you will not need to supply a personal guarantee. They will take your EIN.

Nevertheless, they do not accept every industry.

Likewise, there are some industries they will not work with, as well as others where they want more paperwork. For a list, go here: https://brex.com/legal/prohibited_activities/.

To determine creditworthiness, Brex checks a business’s cash balance, spending patterns, and investors.

You can get 7x points on rideshare. Get 4x on Brex Travel. Likewise, get triple points on restaurants. And get double points on recurring software payments. Get 1x points on everything else.

You can have bad credit (even a 300 FICO) to qualify.

Find it here: https://brex.com/lp/startups-higher-limits/

Establish business credit fast and beat the recession with our research-backed guide to 12 business credit cards and lines. Improve your average credit!

Recession Business Credit Cards with a 0% Introductory APR – Pay Zero!

Blue Business® Plus Credit Card from American Express

Check out the Blue Business® Plus Credit Card from American Express. It has no yearly fee. There is a 0% introductory APR for the first 12 months. Afterwards, the APR is a variable 14.74 – 20.74%.

Get double Membership Rewards® points on day to day business purchases like office supplies or client dinners for the initial $50,000 spent per year. Get 1 point per dollar afterwards.

You will need great to superb credit scores to qualify.

Find it here: https://creditcard.americanexpress.com/d/bluebusinessplus-credit-card/

American Express® Blue Business Cash Card

Also take a look at the American Express® Blue Business Cash Card. Note: the American Express® Blue Business Cash Card is identical to the Blue Business® Plus Credit Card from American Express. Yet its rewards are in cash rather than points.

Get 2% cash back on all qualified purchases on up to $50,000 per calendar year. After that get 1%.

It has no yearly fee. There is a 0% introductory APR for the initial one year. Afterwards, the APR is a variable 14.74 – 20.74%.

You will need great to exceptional credit to qualify.

Find it here: https://creditcard.americanexpress.com/d/business-bluecash-credit-card/

Establish business credit fast and beat the recession with our research-backed guide to 12 business credit cards and lines. Improve your average credit!

Recession Business Credit Cards for Average Credit for Low APR/Balance Transfers

+Discover it® Cash Back

Take a look at the Discover it® Cash Back card. There is a 10.99% introductory APR for six months from date of first transfer. So, this is for transfers under this offer which post to your account by January 10, 2019.

After the introductory APR expires, your APR will be 14.99% to 23.99%. So, this is based on your creditworthiness. Your APR will vary with the market, which is based upon the Prime Rate.

Details

You can earn 5% cash back at different places every quarter. So, these are establishments like gas stations, grocery stores, restaurants, Amazon.com, or wholesale clubs. But this is up to the quarterly maximum each time you activate. Plus, automatically earn unlimited 1% cash back on all other purchases.

You will get an unlimited dollar-for-dollar match of all the cash back you have gotten at the end of your first year, automatically.

Get it here: https://www.discover.com/credit-cards/cash-back/it-card.html

Terrific Recession Business Credit Cards for Cash Back

Flat-Rate Rewards

Capital One ® Spark® Cash for Business

Take a look at the Capital One® Spark® Cash for Business. It has an introductory $0 annual fee for the first year. After that, this card costs $95 annually. There is no introductory APR deal. The regular APR is a variable 18.49%.

You can get a $500 one-time cash bonus after spending $4,000 in the first three months from account opening. Get unlimited 2% cash back. Redeem any time without any minimums.

You will need good to exceptional credit scores to qualify.

Find it here: https://www.capitalone.com/small-business/credit-cards/spark-cash/

Flat-Rate Rewards and No Annual Fee

Discover it® Business Card

Check out the Discover it® Business Card. It has no annual fee. There is an introductory APR of 0% on purchases for year. After that the regular APR is a variable 14.49 – 22.49%.

Get unlimited 1.5% cash back on all purchases, with no category restrictions or bonuses. They double the 1.5% Cashback Match™ at the end of the first year. There is no minimum spend requirement.

You can download transactions| quickly to Quicken, QuickBooks, and Excel. Note: you will need good to superb credit scores to get approval for this card.

https://www.discover.com/credit-cards/business/

Boosted Cash Back Categories

Bank of America® Business Advantage Cash Rewards MasterCard® credit card

Check out the Bank of America® Business Advantage Cash Rewards MasterCard® credit card. Get an 0% introductory APR for the first 9 billing cycles of the account. Afterwards, the APR is 13.74% – 23.74% variable. There is no annual fee. You can get a $300 statement credit offer.

Get 3% cash back in the category of your choice. So these are filling stations (default), office supply stores, travel, TV/telecom & wireless, computer services or business consulting services. Get 2% cash back on dining. So this is for the initial $50,000 in combined choice category/dining purchases each calendar year. Then earn 1% after, with no limits.

You will need excellent credit to qualify.

Find it here: https://promo.bankofamerica.com/smallbusinesscards2/

Recession Business Credit Cards for Fair Credit Scores

Capital One® Spark® Classic for Business

Have a look at the Capital One® Spark® Classic for Business. It has no annual fee. There is no introductory APR offer. The regular APR is a variable 24.49%. You can get unlimited 1% cash back on every purchase for your company, without any minimum to redeem.

While this card is within reach if you have fair credit scores, beware of the APR. But if you can pay on schedule, and in full, then it’s a bargain.

Find it here: https://www.capitalone.com/small-business/credit-cards/spark-classic/

https://creditsuite.wistia.com/medias/uuuwo1uzgy

Recession Business Credit Cards for Average Credit for Jackpot Rewards That Never Expire

Capital One® Spark® Cash Select for Business

Have a look at the Capital One® Spark® Cash Select for Business. It has no yearly fee. You can get 1.5% cash back on every purchase. There is no limit on the cash back you can get. And earn a one-time $200 cash bonus as soon as you spend $3,000 on purchases in the first 3 months. Rewards never expire.

Pay a 0% introductory APR for 9 months. Then pay 14.49% – 22.49% variable APR after that.

You will need good to excellent credit scores to qualify.

Find it here: https://www.capitalone.com/small-business/credit-cards/spark-cash-select/

Recession Business Credit Cards for Average Credit with No Annual Fee

No Annual Fee/Flat Rate Cash Back

Ink Business Unlimited℠ Credit Card

Have a look at the Ink Business Unlimited℠ Credit Card. Beyond no yearly fee, get an introductory 0% APR for the first 12 months. After that, the APR is a variable 14.74 – 20.74%.

You can earn unlimited 1.5% Cash Back rewards on every purchase made for your business. And get $500 bonus cash back after spending $3,000 in the first three months from account opening. You can redeem your rewards for cash back, gift cards, travel and more using Chase Ultimate Rewards®. You will need superb credit scores to qualify for this card.

Find it here: https://creditcards.chase.com/business-credit-cards/ink/unlimited

Establish business credit fast and beat the recession with our research-backed guide to 12 business credit cards and lines. Improve your average credit!

Flexible Recession Business Credit Cards – Check Out Your Options!

The Plum Card® from American Express

Have a look at the Plum Card® from American Express. It has an initial annual fee of $0 for the first year. Afterwards, pay $250 per year.

Get a 1.5% early pay discount cash back bonus when you pay within 10 days. You can take up to 60 days to pay without interest when you pay the minimum due by the payment due date.

You will need great to exceptional credit scores to qualify.

Find it here: https://creditcard.americanexpress.com/d/the-plum-card-business-charge-card/

Your Best Recession Business Credit Cards for Average Credit

Your outright best recession business credit cards for average credit will hinge on your credit history and scores.

Only you can select which features you want and need. So make sure to do your homework. What is outstanding for you could be disastrous for another person.

And, as always, be sure to develop credit in the recommended order for the best, quickest benefits. The COVID-19 situation will not last forever.

The post Best Recession Business Credit Cards for Average Credit appeared first on Credit Suite.

Fundbox Recession Funding – Check Out Our Research on This Rock Solid Way to Get Financing Even in a Recession

Itching for Business Financing? Then Check out Our Review of Fundbox Recession Funding

Fundbox is one of several lending companies online. They offer Invoice Financing (which is not the same as Invoice Factoring). Our Fundbox recession funding review can help you make the best decision for your business.

Fundbox has raised more than $100 million in capital from Silicon Valley investors such as General Catalyst Partners, Khosla Ventures, Blumberg Capital, Entrée Capital, and Spark Capital. They count Jeff Bezos of Amazon as one of their investors.

We look at the specifics and drill down into the details.

Fundbox Recession Funding Review: Background

Fundbox is located online here: https://fundbox.com/. Their physical address is:

300 Montgomery St.
San Francisco, CA 94104.

You can call them at: (855) 572-7707. Their contact page is here: https://fundbox.com/company/contact-us/. You can email them at: support@fundbox.com. The company has been in business since 2013.

Invoice Financing

Rather than purchasing your accounts receivables for a percentage of the money owed to you, they will instead finance the full amount in the form of what is essentially a loan. And then you will pay it back as your customers pay their invoices. Fundbox does not communicate directly with your customers; you will continue to do so.

Payment plans are either 12 or 24 weeks. There is no penalty for repaying early. If you repay early, Fundbox will waive all remaining fees. If you finance your invoices with Fundbox, the fees are flat.

To qualify, you must have at least 6 months invoicing history in your accounting software. And you must have at least $50,000 in annual revenue.

Fees

Fundbox’s fees can vary, depending on customer and over time. You will pay the same amount each week. See: https://fundbox.com/pricing/.

Determine if you can meet a regular payment schedule during an economic downturn.

Demolish your funding problems with our rock-solid guide about 27 killer ways to get cash for your business. Get money even during the worst of a recession.

Revolving Business Lines of Credit

They also offer revolving business lines of credit. You can get line of credit up to $100,000. You will need to allow Fundbox to connect with your accounting software, such as QuickBooks. Fundbox would like to see at least two months of activity in any supported accounting software or three months of transactions in a business bank account.

Your business should be based in one of the 50 United States or one of their supported US territories. Their approved territories are Guam, American Samoa, Northern Mariana Islands, Puerto Rico, and the US Virgin Islands.

Fundbox Pay

Fundbox has a B2B payment system (in a way, like Square or PayPal). This enables merchants to get paid faster on Net 60 accounts. It also allows buyers to qualify for net terms wherever Fundbox is accepted. Applying will not affect your personal credit. See: https://fundboxpay.com.

Accounting Software they Support

Fundbox Pay supports several types of accounting software, including:

Clio
Ebility
FreshBooks
Harvest
InvoiceASAP

They also support:

Jobber
Kashoo
PayPal
QuickBooks Desktop and Online
Zoho

Fundbox Recession Funding Review: Advantages

Advantages to Fundbox recession funding include their exceptional flexibility in connecting to your business bank account, and fast approval. Another advantage is that Fundbox stays out of your relationship with your clients. Your clients need never know that you are working with Fundbox.

Fundbox Recession Funding Review: Disadvantages

The main disadvantage is less than fully transparent fee information. However, if you sign up for Fundbox, they will let you know what your fees are.

Fundbox Recession Funding Review: The Bottom Line

The businesses which do best with Fundbox will be those which can pay back their debts on time or even early. But this is the case with virtually all online lenders, of course.

In addition, entrepreneurs with poor credit will be able to turn to Fundbox. This is vital as most other online lenders will not do the same. And it is even more important during a recession.

Companies without a long time in business might also do well. While neither a minimal time in business nor a minimal annual or monthly revenue requirement is spelled out on the site, there has got to be some sort of minimum in both areas.

As might be expected, companies which miss payments will not do so well with Fundbox recession funding – but that is the case with all online lenders.

Demolish your funding problems with our rock-solid guide about 27 killer ways to get cash for your business. Get money even during the worst of a recession.

Fundbox Recession Funding Review: Alternative Funding

Of course we recommend business credit building as a reasonable alternative to Fundbox.

The Advantages

Since small business credit is separate from personal, it helps to safeguard a business owner’s personal assets, in the event of legal action or business bankruptcy. Also, with two separate credit scores, a small business owner can get two separate cards from the same vendor. This effectively doubles buying power.

Another benefit is that even start-ups can do this. Heading to a bank for a business loan can be a recipe for disappointment. But building business credit, when done right, is a plan for success.

Individual credit scores depend upon payments but also other elements like credit usage percentages. But for business credit, the scores truly just hinge on if a business pays its invoices on a timely basis.

The Process

Growing business credit is a process, and it does not happen without effort. A business needs to actively work to build company credit. Nonetheless, it can be done readily and quickly, and it is much faster than establishing personal credit scores. Vendors are a big part of this process.

Carrying out the steps out of order will lead to repetitive rejections. Nobody can start at the top with business credit. For example, you can’t start with retail or cash credit from your bank. If you do, you’ll get a rejection 100% of the time.

Small Business Fundability

A business has to be fundable to lending institutions and vendors. For this reason, a small business will need a professional-looking web site and e-mail address, with website hosting from a company like GoDaddy. Plus business phone and fax numbers ought to have a listing on ListYourself.net.

Additionally the business telephone number should be toll-free (800 exchange or the equivalent).

A company will also need a bank account devoted strictly to it, and it has to have all of the licenses essential for operation. These licenses all have to be in the accurate, appropriate name of the small business, with the same business address and phone numbers. Note that this means not just state licenses, but potentially also city licenses.

Working with the Internal Revenue Service

Visit the Internal Revenue Service website and get an EIN for your business. They’re free of charge. Select a business entity such as corporation, LLC, etc. A business can begin as a sole proprietor but will most likely wish to switch to a form of corporation or LLC to limit risk and make best use of tax benefits.

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

If you operate a business as a sole proprietor at least file for a DBA (‘doing business as’) status. If you do not, then your personal name is the same as the business name. As a result, you can wind up being directly responsible for all business debts.

In addition, per the Internal Revenue Service, by having this arrangement there is a 1 in 7 possibility of an IRS audit. There is a 1 in 50 chance for corporations! Avoid confusion and dramatically reduce the odds of an IRS audit as well.

Demolish your funding problems with our rock-solid guide about 27 killer ways to get cash for your business. Get money even during the worst of a recession.

Instigating the Business Credit Reporting Process

Start at the D&B web site and obtain a free DUNS number. A DUNS number is how D&B gets a corporation into their system, to produce a PAYDEX score. If there is no DUNS number, then there is no record and no PAYDEX score.

Once in D&B’s system, search Equifax and Experian’s web sites for the company. You can do this at https://www.creditsuite.com/reports. If there is a record with them, check it for correctness and completeness. If there are no records with them, go to the next step in the process. In this manner, Experian and Equifax will have activity to report on.

Vendor Credit

First you must establish trade lines that report. This is vendor credit.

And with an established business credit profile and score you can start getting retail and cash credit.

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

But first off, what is trade credit? These trade lines are credit issuers who will give you preliminary credit when you have none now. Terms are generally Net 30, instead of revolving.

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

Details

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

To kick off your business credit profile the right way, you should get approval for vendor accounts that report to the business credit reporting agencies. As soon as that’s done, you can then make use of the credit.

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

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

Retail Credit

Once there are 3 or more vendor trade accounts reporting to at least one of the CRAs, move onto retail credit. These are companies such as Office Depot and Staples.

Use the business’s EIN on these credit applications.

Fleet Credit

Are there more accounts reporting? Then progress to fleet credit. These are companies such as BP and Conoco. Use this credit to buy fuel and fix and take care of vehicles. Make sure to apply using the small business’s EIN.

Cash Credit

Have you been responsibly handling the credit you’ve up to this point? Then move to more universal cash credit. These are companies like Visa and MasterCard. Use your EIN to apply.

These are often MasterCard credit cards. If you have more trade accounts reporting, then these are feasible.

Monitor Your Business Credit

Know what is happening with your credit. Make certain it is being reported and deal with any errors ASAP. Get in the habit of checking credit reports. Dig into the specifics, not just the scores.

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

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

Challenging Mistakes

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

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

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

A Word about Business Credit Building

Always use credit sensibly! Never borrow more than what you can pay back. Keep an eye on balances and deadlines for payments. Paying promptly and fully will do more to boost business credit scores than nearly anything else.

Building business credit pays. Good business credit scores help a small business get loans. Your loan provider knows the small business can pay its debts. They understand the business is bona fide. The company’s EIN connects to high scores, and credit issuers won’t feel the need to ask for a personal guarantee.

Business credit is an asset which can help your small business for years to come. And you can even build it during a recession.

Fundbox Recession Funding Review: Some Final Thoughts

And finally, as with every other lending program, whether online or offline, always remember to read the fine print and do the math. Go over the details with care. And decide if this option will be good for you and your company.

In addition, consider alternative financing options that go beyond lending, including building business credit. Recession funding exists but it is harder to get. So make sure to try Fundbox recession funding.

Only you can best decide how to get the money you need to help your business grow. Today, we want to hear from our audience! Share your voice with us about your experiences with online lenders. And let us know your opinion of our Fundbox review.

The post Fundbox Recession Funding – Check Out Our Research on This Rock Solid Way to Get Financing Even in a Recession appeared first on Credit Suite.

Be Amazing– Use Recession Crowdfunding to Finance Your Business

Use Recession Crowdfunding to Finance Your Business and Tap into the Noble Spirit of Human Kindness

If you have ever wondered how to use recession crowdfunding to finance your business, then this one is for you! But before you commit to numbers, perks, a pitch, or anything of the sort, be sure to read this first. And, in particular, be sure to read this if that last sentence made no sense to you. Seriously!

And don’t despair – even in a bad economy, crowdfunding is still possible. People still want to believe in your dreams. But you will probably need to lower your expectations on funding totals when everyone is feeling the pinch.

Use Recession Crowdfunding to Finance Your Business: What Matters

Crowdfunding has become all the rage and there is no wonder. It is (usually) free money which you do not have to pay back. And you can get these funds without having to give up any ownership or control over your small business.

Plus it can help you to gauge the popularity of an idea or a prototype or invention. Because there is no sense in continuing if there is no interest in your handiwork.

Use Recession Crowdfunding to Finance Your Business: History

Before delving into how to do it, let’s first look at when and how crowdfunding came to be.

A History of Angels

In a way, crowdfunding is the child of angel investing. But what is an angel investor?

According to Investopedia: “Angel investors invest in small startups or entrepreneurs. Often, angel investors are among an entrepreneur’s family and friends. The capital angel investors provide may be a one-time investment to help the business propel or an ongoing injection of money to support and carry the company through its difficult early stages.”

The term comes from Broadway theater. Angels were originally the investors who backed plays, and they still do so. Those people are also called patrons of the arts.

But it Goes Back Even Earlier

The Statue of Liberty was essentially a crowdfunded endeavor. And that was in 1885. But it goes back more than that, as war bonds are a species of crowdfunding. Plus in the 1730s, the London mercantile community saved the Bank of England by supporting the currency. This averted a confidence disaster.

Heck, even the bank scenes in It’s a Wonderful Life show a form of nascent crowdfunding, because the citizens of the town forego full payments to help each other out.

Back to the Present

And then we get to crowdfunding on the internet. Kickstarter, for example, was started in 2009. And ArtistShare goes back to 2003. Today, there are several crowdfunding platforms. They handle everything from inventions to artistic endeavors to medical bills.

Use Recession Crowdfunding to Finance Your Business: Decisions, Decisions

So let’s get started. But you will have to make a lot of choices before you even start a business crowdfunding campaign.

Use Recession Crowdfunding to Finance Your Business: How much?

Your first decision should be: how much do I need to crowdfund? If you need $1 million, you are going to have to crowdfund more than that.

Why? Because that is how crowdfunding platforms make their money. They take a percentage of whatever money you can raise. Therefore, you will need to take that into consideration. Crowdfunding percentage charges range from 4% to 10%.

Use Recession Crowdfunding to Finance Your Business: Will I succeed?

Another decision is about how successful you believe your campaign is going to be. If you are super confident that you will be 100% funded at the end of your campaign, then traditional funding will be for you.

But if you are not sure, then try something like GoFundMe’s flexible funding. With flexible funding, you, the campaign runner, can keep your donations even if your campaign fails. But for this privilege, you will have to pay a higher fee to GoFundMe.

Other crowdfunding platforms like Kickstarter do not offer this option.

Use Recession Crowdfunding to Finance Your Business: What should I offer for perks?

Yes, you will have to offer perks to your donors. Perks can take several forms. Consider buttons, tee shirts, book marks – all of those are possible physical perks.

Think about a perk format which can dovetail with your business. If you sell homemade jam, then maybe create a special flavor just for the campaign. And offer bigger and bigger-sized jars depending on donation amount. If you are a horseback riding stable, offer a free lesson or a postcard with a favorite horse’s picture on it, or the like. Does your business flip houses? Then consider offering a coupon to a local home supply company or the like. But do work with them beforehand, of course.

Physical versus Virtual Perks

Pro tip: physical perks are a pain! A lot of people love them, and they will attract attention. But physical perks also need to be shipped. International shipping is extremely expensive, even for small items. So if you offer physical perks, specify if you will allow international donor addresses.

And even if everything has to be shipped in America, you are still left with dealing with a database of names and addresses. And some of which might have typos or be incomplete.

Plus you often have to deal with a variety of available perks. Did Jane want the stuffed teddy bear or the bookmark? Did Alan want the pennant or the tee shirt? Do Jane and Alan live at the same address so maybe you can combine their perks?

What happens if a perk is lost or damaged in the mail?

Therefore, if you can do it, try for virtual perks. For a house flipping company, you might record videos about home decorating or repairs. Or for a bakery, you could offer downloads of recipes. And for a health club, maybe offer electronic coupons for a free month of membership.

Give the People what they (think they) Want

There is absolutely nothing wrong with just going ahead and asking your potential donors about what they might like for perks. They might surprise you. Of course, the final decision will be your own.

But this is an excellent means of investing your donors and potential donors in the process. This is far more vital than you may think. That is because, when the donors are invested in your process, they will be invested in you. And they will want very badly for you to succeed. This will stand you in good stead if you have delays. And it will also help you out, big time, when your company is up and running.

Furthermore, if you ever crowdfund again, treating your donors right and giving them a seat at the table will assure that they just might follow you to your next campaign.

Use Recession Crowdfunding to Finance Your Business: Your Campaign

Your campaign’s success will be far from guaranteed. But you can take advantage of a few known strategies. First of all consider these four feelings that you want to engender in donors. Use one or more of them as the centerpiece of your campaign as a starting point. We will start with two today and the other two in the next post.

Urgency

The first two and last two days of a crowdfunding campaign are nearly always the days with the biggest payoffs. Often, dragging out the campaign does not make you significantly more money.

So why not open a campaign for just a week? Do not let donors think they can contribute any old time they feel like it. If you give them the feeling that they had better act now, or else lose out, you will get more people to donate.

The fear of missing out is a very real thing.

Demolish your funding problems with our rock-solid guide about 27 killer ways to get cash for your business. Get money even during the worst of a recession.

Scarcity

If you have thousands of something or other to offer as a perk, it will not be as desirable to your donors. But if you only have one or two of a particular perk, that will create a feeling in some people that they just have to have it. Scarcity can create a bit of anxiety in your donors. And you do want that.

So do this with your higher donation levels only. Therefore, you might want to set up a perk/donation level scheme which looks something like this:

Donation Level	Number of Perks
Lowest	1,000
Second lowest	500 (this reward also includes the lowest level reward)
Middle	100 (this reward also includes the two lower level rewards)
Second highest	50 (this reward also includes the three lower level rewards)
Highest	10 (this reward also includes all of the other level rewards)

But be sure to remember: a lot of variation in physical perks will make fulfillment a lot harder. So do not work with more than maybe five separate types of physical perks. And even that is pushing it. After all, look at the complexity already inherent in five tiers (see the table, above).

Multiply that by all of the donors you get to your campaign. Larger platforms offer software for fulfillment purposes. It will nearly always be best to work with it.

But if you have to do it all yourself, then seriously consider no more than three tiers. Trust me. You will thank me later.

Novelty

If you are offering the same thing as a thousand other places, no one will want to make a donation. Your widget has to be lighter, hotter, cheaper, or more durable. Your food has to be lower in calories or higher in nutrition. Or at least it should be better-tasting.

Or your services have to be delivered better, by friendlier and more knowledgeable people. And they should come with a money back guarantee your competitors just plain do not offer.

Think about how services or goods can differentiate themselves. Why do some people prefer Macs? Why do others prefer PCs? And why do some people want to get their insurance from Progressive? But others want theirs from Liberty Mutual.

Consumer choice, particularly in the United States these days, is huge! So offering true novelty can be a way to try to get beyond all of that clutter. And it is a lot of clutter indeed. Have you been to a toothpaste aisle in a drug store lately? Yeah. It is just like that.

Cool factor

Is your product a form of art? Is it a new, gadget-like invention?

Then it might have a coolness factor. And then you can build your campaign around that. But do not be discouraged if it is not! These days, some of the most memorable ad campaigns are based around a product most people found dull not ten years ago – insurance.

Now is the time for us to get back into the nitty gritty of the crowdfunding campaign itself.

Use Recession Crowdfunding to Finance Your Business: Strategy

Here are a few words on strategy.

There’s the Windup and here’s the Pitch!

You will not get anywhere without a pitch video. Yes, even you, you camera shy business owner, you!

Your pitch video needs to be good. Use a professional to film it and write the script. Can’t afford professionals? Then try schools, both students and teachers. Your script does not have to be word for word. But you should have points you want to make and not ramble. A script will help you to focus on exactly what you need to say. This is absolutely not the time to wing it.

Taking time with a script will show in every frame of the finished product. And your professional film maker? They might be charging you by the hour. So it is a really good idea to spend some time on a script or at least an outline of one. Do this before your professional film maker goes on the clock.

Evidence, Your Honor

If you have physical evidence of your project, show it in your campaign video and on your campaign page. This means a picture of your health club’s sign. Or it could be a short video of your prototype robot.

A lot of people are understandably skeptical about crowdfunding. A picture and a tangible thing will go a long way to assuring them that your project is not vaporware.

Demolish your funding problems with our rock-solid guide about 27 killer ways to get cash for your business. Get money even during the worst of a recession.

Your Mother Was Right

Manners matter. ALWAYS. Say please, thank you, and you’re welcome to everyone. Use these magic words in your pitch and in your communications with your donors. And even use them in the cover letters you send with your perks. This is because even virtual perks can come with a cover email. And they should, as that is another chance to connect with your donors.

Greed is Not Good

Do not get greedy! If you need $250,000 for your campaign, but you ask for $1,000,000, that does not do anyone any good. You will just look like you want to freeload off others’ generosity.

Instead, work hard to account for your expenses as clearly and transparently as possible. And by the way, if you misuse your funds, you might find yourself in an uncomfortable meeting with your state’s attorney general. So always, always, ALWAYS be honest!

If you need help, then hire an accountant or at least a bookkeeper. Much like with your pitch video, if you are low on cash, you can then try a local school.

Keep Your Feet on the Ground, and Your Head in the Clouds

Your stretch goals should be a mix of easily attainable and pie in the sky. If you are crowdfunding for $100,000, a fairly easy to attain stretch goal could be $125,000. Pie in the sky could be $300,000. Only you know your donors, or at least you know some of them. Be realistic about your prospects when it comes to your base. But for stretch goals, feel free to go just a little bit wild.

Make it abundantly clear what you will do with any extra cash if you are fortunate enough to get it. Will you buy the building your business is in? Hire five more people? Replace your old equipment? Open up a new market on another continent? Let your donors know what you are striving for.

This is also an excellent way to help get your donors to feel more invested in your project.

Grace is Amazing

Be gracious if your campaign fails. Even if you use GoFundMe’s flexible funding option, you still might not get enough to make a dent in your funding needs. And of course with most forms of crowdfunding, you have to give everything back no matter what.

But let’s look at how to handle this kind of a situation if you took advantage of the flexible funding option.

Make an executive decision about the funds. If you wanted $100,000 and you only got $500, then your best bet is to just return the money. This kind of a shortfall should also give you a reason to take a good, hard look at your pitch, your campaign, and even your idea. Maybe you are being overly optimistic. A bad failure in crowdfunding can have a way of throwing a bucket of cold water on your dream, yes. But sometimes, that is exactly what you need.

If you almost made it with $95,000, then thank everyone who donated. And see what you can do, even though you have a shortfall. But also tell them what you are doing! Maybe you really will buy your building next year, or hire four people instead of five. Once again, get your donors invested in what you are doing. It will make an enormous difference.

Timing is everything

Line up the biggest donors you can before you get started. Talk to your mother or your brother in law or your former high school football coach. And ask them to hold off on handing over their $1,000 or $10,000 donation until you start your campaign.

Also ask them (nicely!) to release their funds at a very specific time. Which time? The best times will always be the first or last day of the campaign.

Take advantage of the novelty factor of the first day of the campaign. Or take advantage of the urgency factor on the last day of your campaign.

Think about the busker (street musician) with a few of her own dollars in her hat, to encourage people to throw a few bucks for a song. Taking your cue from her, you want your biggest donors to show other donors that they have confidence in you and in your project.

Demolish your funding problems with our rock-solid guide about 27 killer ways to get cash for your business. Get money even during the worst of a recession.

When You Care, You Share

Make sure to share your campaign on social media. And always ask your friends and family to do so, too. Tweet the link. Add it as a Facebook status. Make it a Tumblr post or a snap on Snapchat. Or write a blog post about it. Be proud of what you are doing! Tell the world!

Also, ask your network to circulate the link. The best way to get your network to help you out is by helping them in return. So if your cousin’s band is on Facebook, share their page, or tweet about it.

Be a cooperative member of your own personal community. And then your network will be far more likely to help you out when you ask.

Use Recession Crowdfunding to Finance Your Business: Takeaways

Finally, if your small business recession crowdfunding campaign is successful, consider donating a few bucks to others’ campaigns. Or at least donate a few dollars to charity. And this is because business goodwill and a good reputation are going to be priceless. Karma in crowdfunding matters.

The post Be Amazing– Use Recession Crowdfunding to Finance Your Business appeared first on Credit Suite.

How the Small Business Finance Exchange Can Affect Your Business in a Recession: 4 Things You Need to Know

As the novel coronavirus continues to affect our economy, the SBFE remains committed to its mission. Let’s take a look at the Small Business Finance Exchange in a recession – because the chances of our economy going into a recession look rather high right now.

The Small Business Finance Exchange Affects the Way Lenders Do Business

The Small Business Finance Exchange, in a recession, can change the face of business credit. You need to know how. Solid business credit is necessary to business growth always, whether there is a recession going on or not. It is also important to the protection of your personal finances. Without a strong business credit profile, you will have to rely on your personal credit when it comes to business financing.

This is bad is so many ways. It may not seem so if you have great personal credit. The problem comes when you do not have separate business credit. Then anything that affects your business affects your personal score. If something doesn’t work out with the business, your personal credit score suffers.

It can work the opposite way also. A bad personal credit score can affect your ability to get business financing.

The remedy is to ensure your business has its own credit score, and to be certain that score is complete and accurate.

The Small Business Finance Exchange, also known as the SBFE, helps with that. Certain lenders and agencies have access to their data. How do they get your information? Does it affect your business credit? How can it affect your ability to get financing for your business?

What is the Small Business Finance Exchange?

To fully understand the role of the Small Business Finance Exchange in a recession, you need to understand what it is. The SBFE is a not-for-profit entity that gathers data on small businesses from its members. The data is then used to compile comprehensive credit information. Lenders use this information to make credit decisions.

The Small Business Finance Exchange does not lend money. It also does not create or distribute credit reports.

How Does the Small Business Finance Exchange in a Recession Work?

Generally speaking, it works the same way in recession as it does in solid economic times. The impact however, can change. The model they use is self-dubbed a “give-to-get” model. Members provide information about their borrowers. In return they can receive information from the exchange. This information can help them make future lending decisions.

Small Business Finance Exchange in a Recession

Keep your business protected with our professional business credit monitoring. It’s a worthwhile investment, saving you money even during a recession.

The process starts with members. The members report credit data from those companies that they do business with. This data will include payment history, among other things. This is one reason it is important to make payments on time. When businesses use the Small Business Finance Exchange in a recession, your payment history prior to the recession can affect your business even more.

Next, the SBFE normalizes the raw data into usable information. It then distributes this data to certified vendors. These include credit agencies that have a partnership with the SBFE. The distribution to certified vendors is step three.

Certified Vendors use the information to create comprehensive credit products for distribution to SBFE members only.

What Do Members Get?

Members can request data on any small business to whom they may extend credit, making the Small Business Finance Exchange in a recession hugely impactful. Since they gave information, they have information available to them. That means if you work with member lenders, they have access to even more information that can affect their decision than what is on a standard credit report.

Practically, it looks like this. A lender reports credit information about its current borrowers to the Small Business Finance Exchange. When a new potential borrower comes along, they request a credit report. This report does not come from the SBFE. The request is to one of the credit reporting agencies such as Dun & Bradstreet or Equifax. Because of their membership with the SBFE, they receive an extended report that includes the data received from the SBFE as well as that from D&B.

How Does Using the Small Business Finance Exchange in a Recession Affects Your Business?

There is so much more to a business than how and when they make payments. Making consistent, on-time payments is essential. However, not doing so for a period of time does not always tell the whole story. The Small Business Finance Exchange uses its data to paint a more complete picture so that creditors can be better informed.

The result is that even if your payment history is not pristine, the use of information from the Small Business Finance Exchange in a recession can be a good thing for your business. Their mission is to be an advocate for the safe and secure growth of small business. They know that lenders need the most complete and accurate information available to make a viable credit decision.

The Small Business Finance Exchange in a Recession Can Help Your Business in 4 Ways

1. It Can Help You Build Business Credit.

Strive to do business with SBFE members. When you do, you know your information is being reported, which means you are building business credit. How do you know if your lender or vendor is a member?

Small Business Finance Exchange in a Recession

Keep your business protected with our professional business credit monitoring. It’s a worthwhile investment, saving you money even during a recession.

Ask them. If they are not, considered mentioning that they become a member. However, there are enough members in the network that it should not be hard to find one.

2. They Can Help You Grow Your Business.

By working with members, you ensure your complete information is being reported. When creditors receive your information, you know they get a complete credit picture and not just one piece of it. If you are making your payments and working to build strong business credit, this can only help you.

3. You May Have Increased Funding Options.

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

4. They Can Help You Make Wise Credit Decisions.

Small Business Finance Exchange in a Recession

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

Who Can Become a Member?

Anyone who has the ability to report their small business lending information to the SBFE can become a member. The only way to gain access to the information that the exchange has in their Data Warehouse is to join.

Members include all types of lending institutions including banks, credit unions, and alternative lenders.

Certified Vendors

Certified vendors are agencies that have a partnership with the Small Business Finance Exchange. They distribute the data they receive from the SBFE. They do this by creating credit analysis products using the information that the Small Business Finance Exchange provides. Then they report the data to members who request a credit report on a business that is included.

Certified Vendors include Equifax, Dun & Bradstreet, and most recently, LexisNexis Risk Solutions. Of course, Equifax and Dun & Bradstreet are credit reporting agencies. LexisNexis sells lending risk insurance products.

While other credit agencies are available to lenders, when they are a member of the Small Business Finance Exchange, in a recession especially, they can get a double shot. If they utilize one of these certified vendors, they get the benefit of the vendor’s own information plus data received from the Small Business Finance Exchange. In a recession, this can be an essential link to risk mitigation and solid decision making.

What Goes Around Comes Around

As much as doing business with members of the exchange can help you, it can hurt you if you do not do things properly.

If you are doing business with SBFE members you eliminate the potential to not have any business credit. By default, members are reporting your information and therefore, you have business credit.

However, if you do not handle your business properly, the report members are getting about your business may not be favorable.

Members contract to report both positive and negative information.

How Do You Know If Data Related to Your Business is In the Warehouse?

If you are doing business with member entities, your data is there. How do you know if the companies you do business with are members? Ask them.

What Kind of Data do They Have on My Business?

They have identifying information related to your business. This would include your business name, DUNS number, EIN, address, and NAICS code.

They also have both positive and negative payment information. Bills paid to vendors, suppliers and business partners on time or early are all included. It also includes bills paid late, or not at all, to suppliers, business partners, and vendors.

The limits on your credit accounts, payment information on lease payments, and credit card payment history are also included.

What Action Do I need to Take?

The Small Business Finance Exchange, in a recession, can benefit small businesses. They want to see these businesses thrive and grow, and one way they do that is by offering comprehensive credit information to those who lend them money to do so.

As a small business, you are responsible for your business credit. You control what information ends up on your credit report. What can you do?

Pay your bills consistently on time
Do business with SBFE members.
If the businesses you currently work with are not members, encourage them to join.
Join the SBFE if you are eligible. (Remember you cannot self-report your own information, but by joining, you can make better credit decisions for your business.)
Monitor your credit information

Small Business Finance Exchange in a Recession

Keep your business protected with our professional business credit monitoring. It’s a worthwhile investment, saving you money even during a recession.

A Word on Credit Monitoring

There are a couple of ways to monitor credit. Remember though, that the Small Business Finance Exchange does not create or distribute any type of credit report.

You can request a report from one of the credit agencies such as Dun & and Bradstreet or Equifax. Even though they are members of the SBFE however, you cannot see that information specific to the exchange unless you are a member as well. You cannot be a member unless you extend credit to small businesses.

Working with members of the Small Business Finance Exchange in a recession is still beneficial, but it doesn’t really help with credit monitoring.

You can also join a credit monitoring service. This will give you continuous access to the information on your report, including your credit score and what is affecting it.

Use the information. Look for ways to build your business credit and report any mistakes. Send the agency a detailed explanation of what is incorrect, what the correct information is, and copies of all supporting documents available.

How to Take Advantage of the Small Business Finance Exchange in a Recession

It is a good idea to work with SBFE members regardless of the economic client. In a recession however, it can be even more beneficial for all the reasons already stated. The most prominent reason is that, by doing business with SBFE member, you ensure lenders see the most complete picture of your credit possible.

If the recession has been hard on you and you have missed a payment or two, those negative marks could have a reduced impact. This is based on information lenders receive from the SBFE. It may not make the bad things go away, but it can definitely add in other information that can help.

The Small Business Finance Exchanges in a Recession – Exists to Help Small Businesses

By offering a more complete credit picture to lenders, the SBFE ensures that more businesses have the financing available that they need to grow. As businesses grow, more businesses can be born. This is how we come out of a recession. Successful business begets successful business. And before you know it the economy is thriving again. It’s a win/win for everyone and the Small Business Finance Exchange, in a recession and out, is a superhero to all. Make your payments, do business with SBFE members, and your business can survive and even thrive during the recession.

The post How the Small Business Finance Exchange Can Affect Your Business in a Recession: 4 Things You Need to Know appeared first on Credit Suite.