Author: Walter Mazzone

Help Your Children Build Business Credit with EIN

As a parent, you want to do everything you can to help your child succeed.  If they are running a business, you likely want to help them get funding. You probably realize that your help needs to go beyond simply providing funding yourself. Even if you can do that, you need to know how to help your children build business credit with EIN, apart from their social security number. 

Dos and Don’ts When Trying to Help Your Children Build Business Credit with EIN

When you have a credit score for your business that is attached to your EIN rather than your SSN, you have access to much more business financing that you otherwise would.  The thing is, a business credit score does not build passively like a personal credit score does. You have to intentionally work to establish and build a business credit profile. So, how can you as a parent help your children build business credit with EIN?  Here are some dos and don’ts. 

Credit Line Hybrid Financing: Get up to $150,000 in financing so your business can thrive.

Don’t Pay for Tradelines

There are many companies online which promise to sell ‘seasoned’ tradelines. If a company has poor or little credit, you can pay several hundred or several thousand dollars and have your child’s business piggybacked onto the account of someone with established excellent credit.  By doing this, new business owners can seem more creditworthy than they really are. Most consider this unethical.  Do not help your child buy tradelines to establish or build a business credit score.

Don’t Try Piggybacking Your Own Credit

In this scenario, a creditworthy borrower’s accounts  are used to improve the credit of an unrelated, or a related, third party, like a child. A creditworthy borrower adds the third party as an authorized user of his lines of credit. But he or she does not actually provide the third party with credit cards or account numbers to let the third party make charges against that account. As a result, the authorized user never actually uses the credit

The benefit to the third party is an improved credit rating . It ‘shows’ they are already approved for higher limit revolving accounts. In theory, showing you already have credit is supposed to make you more creditworthy for higher limit accounts. Many companies claim to be able to secure $100,000 – 250,000 credit lines once these accounts are reporting. This is dishonest as well, even if it is your own accounts your child is piggybacking on, and even if you authorize it. It is viewed negatively by the Federal Reserve, the FBI, and credit companies. 

Do Consider Signing as a Guarantor

A guarantor loan is a loan that you sign on to for someone else.  You guarantee that you will repay if they default.  Sometimes this is a better way to  help a family member with funding than providing cash. Of course, if they fail to meet their business obligations,  then you will bear the brunt of that – and lenders will likely come after you to make up for any losses they incur.

However, if they handle their obligations responsibility, this is a great way for someone to build a personal credit score.  Even though business credit accounts do not affect personal credit, some business credit score calculations take personal credit score into account. So, this could also help strengthen the business credit sore of your child. 

Do Consider the Credit Line Hybrid

This is a unique type of loan that you can help your child get by signing on as a guarantor.  If you have a personal credit score of at least 680, you can help your child get the Credit Line Hybrid. They can usually get a loan of five times the amount of your highest revolving credit limit account, up to $150,000. Honestly, this is more than what you could get when applying for credit cards. Furthermore, you can get cash out on this program.

Credit Line Hybrid Financing: Get up to $150,000 in financing so your business can thrive.

Here is the best part.  There is no impact on your personal credit with this type of financing. All payments report to the business credit profile, so your child  can build credit for their business associated with the business EIN without your personal credit being affected.  

Do Consider Helping Pay for a Business Credit Expert

Now, here is the number one best way to help your children build business credit with EIN. Help them work with a business credit expert.  There are very few things that are worth paying for when it comes to building credit, whether personal or business.  This is one thing that is definitely worth it.  Here is how a business credit expert can help your child. 

Learn How to Establish Business Credit for the First Time

Remember we said you have to be intentional about building a business credit profile.  It does not happen passively like with personal credit. A business credit expert can start this process.  They can review how things look right now, and help your child navigate the process of setting up their business to be a fundable entity separate from them as the owner.  

This is the first step in not only establishing a business credit score, but in building an overall foundation of fundaility.  

Learn How to Earn Business Credit With EIN Number

Establishing a business credit profile is just the first step.  Before you can build a business credit score, you  have to have accounts reporting on-time payments. It sounds simple enough. However, not all business accounts report payments.  In fact, very few do.  Even worse, those that do report do not make that information common knowledge. 

It is absolutely essential to work with a business credit expert to find an initial net 30 account to build business credit. This is the fast way to build credit for a business.  If you try to do it alone, you could have a ton of accounts that are doing your business credit score no good, because they are not reporting.  You will also waste time applying for accounts and getting denied.  

A business credit expert knows not only which accounts report, but they can help you start with the ones that you actually qualify for and work up to the ones that take more time. 

This alone saves an enormous amount of time, and time is money. 

Helping Your Child Build Credit for Their Business is Likely a Different Process Than You Expect

While there is a right way to spend money to help your children build business credit with EIN, there is also a very wrong way.  Never pay for tradelines, and avoid allowing your child to piggyback off your own credit.  Both of these options are dishonest.  They are viewed negatively by experts.  Furthermore, they can only help with personal credit anyway.  There really is not a way to do this to help with a business credit score. 

Signing a loan as a guarantor is fine, but again, it really only helps with personal credit.  While this can have bearing on a business credit score, the better way is to sign as a guarantor on the Credit Line Hybrid.  Payments on this type of financing can directly impact the credit score of the business itself. 

Credit Line Hybrid Financing: Get up to $150,000 in financing so your business can thrive.

In the end, the number one best way to help your children build credit with EIN is to help them work with a business credit expert. This is someone who can not only help ensure their business is properly set up to build business credit, but that can also help them find accounts that report, and work on helping them build overall fundability.  Get started now with a free consultation.

The post Help Your Children Build Business Credit with EIN appeared first on Credit Suite.

Correct Errors in Your Public Credit Record

Your Credit Record Can Have Errors

Either a personal or a business credit record can have errors in it. There are all sorts of reasons why you or your business would not be able to get funding. Correcting mistakes is one way to make it easier for your business to get money.

Let’s look at errors in public records.

Correcting a Credit Record Means Enhancing Fundability

But what’s fundability? Fundability is the ability of a business to get funding. This is everything from getting credit to business loans. Because every business needs money, it quite literally pays to enhance your fundability whenever and wherever you can.

Public Records Matter to Your Credit Record

In addition to how well your business pays its bills, and your personal credit score, and whether your industry is felt to be a risky one, there’s the matter of public records.

Public records include bankruptcy (both personal and business), liens, judgments, and UCC filings. Errors in any of these kinds of public records will affect fundability, so correcting such mistakes will enhance your ability to get cash for your business.

Find out why so many companies use our proven methods to get business loans, even during a recession.

Bankruptcy on a Credit Record

Bankruptcy is a process a business goes through in federal court. The idea is to help a business eliminate or repay its debt under the guidance and protection of the bankruptcy court. Business bankruptcies are often liquidations or reorganizations. This depends on the type of bankruptcy an entrepreneur takes.

3 Types of Business Bankruptcy

There are three kinds of business bankruptcy. They are Chapter 7, Chapter 11, and Chapter 13. These types depend on organizational structure. See thebalancesmb.com/what-is-business-bankruptcy-393017.

Chapter 7 and Chapter 11

Corporations are legal business entities separate from their owners. They are more truly separate than partnerships. But in the event of a bankruptcy, either type of structure commonly will file of Chapter 7 (bankruptcy protection), or Chapter 11 (reorganization). The chapters refer to the US Bankruptcy Code.

Chapter 7: Liquidation

This one may be the best choice when the business has no viable future. It is often used when the debts of the business are so overwhelming that restructuring them is not feasible. Chapter 7 bankruptcy can be used for sole proprietorships, partnerships, or corporations. It is also appropriate when the business does not have any substantial assets. To read the full text of Chapter 7, go here: law.cornell.edu/uscode/text/11/chapter-7.

Chapter 7 Details

Public Record Corrections Credit SuiteIf a business is a sole proprietorship, and an extension of an owner’s skills, it often does not pay to reorganize it. Hence Chapter 7 would be appropriate.

Before a Chapter 7 bankruptcy gets approval,  the applicant is subject to a “means” test. If their income is over a certain level, their application does not get approval. But if a Chapter 7 bankruptcy gets approval, the business is dissolved.

In a Chapter 7 bankruptcy, a trustee is appointed by the bankruptcy court. The trustee’s job is to take possession of the assets of the business and distribute them among all of the creditors.

The order in which creditors are paid can depend on the type of debt (secured vs. unsecured). Collateral is what you use to secure a debt. With no collateral, a debt is unsecured. As a result, those types of debts are further down the line when it comes to decided who will be paid in a bankruptcy.

After the distribution of the assets and paying the trustee, a sole proprietor gets a “discharge” at the end of the case. It means that the owner of the business is released from any obligation for the debts. But partnerships and corporations do not receive a discharge.

Chapter 11: Business Reorganization

Chapter 11 may be a better choice for businesses with a realistic chance to turn it all around. It is often used for partnerships and corporations.  It can also be used by sole proprietorships if their income level is too high to qualify for Chapter 13 bankruptcy. For the full text of Chapter 11 go to: cornell.edu/uscode/text/11/chapter-11.

Chapter 11 Details

Chapter 11 is a plan where a company reorganizes and continues in business under a court-appointed trustee. The company files a detailed plan of reorganization. Such a plan explains how it will deal with its creditors. The company can terminate contracts and leases, recover assets, and repay some of its debts, while discharging others to return to profitability.

The business presents the plan to its creditors who will vote on the plan. If the court finds the plan is fair and equitable, it will approve it. Reorganization plans provide for payments to creditors over some time. Chapter 11 bankruptcies are rather complex and not all of them succeed. It usually takes over a year to confirm a plan.

Chapter 11 and the Small Business Reorganization Act of 2019

The Small Business Reorganization Act of 2019 enacted a new subchapter V of Chapter 11. This subchapter of Chapter 11 seems to favor the side of the applicant for business bankruptcy. But it only applies if the applicant wants it to apply. See cornell.edu/uscode/text/11/chapter-11/subchapter-V.

For example, subchapter V does not require that a committee of creditors be appointed, or that creditors have to approve a court plan.

Per the U.S. Department of Justice, the act: “imposes shorter deadlines for completing the bankruptcy process, allows for greater flexibility in negotiating restructuring plans with creditors, and provides for a private trustee who will work with the small business debtor and its creditors to facilitate the development of a consensual plan of reorganization.” See justice.gov/opa/pr/us-trustee-program-ready-implement-small-business-reorganization-act-2019.

Chapter 13: Adjustment of Debts for Individuals with Regular Income

Chapter 13 bankruptcy is a form of bankruptcy for individuals. Since a sole proprietorship is an extension of its one owner, the owner is responsible for all assets and liabilities of the firm. It is most common for a sole proprietorship to take bankruptcy via Chapter 13. This is a reorganization bankruptcy. For the full text of Chapter 13, go to: law.cornell.edu/uscode/text/11/chapter-13.

Chapter 13 Details

Use Chapter 13 small businesses when a reorganization is the goal instead of liquidation. The entrepreneur files a repayment plan with the bankruptcy court. This details how they will repay their debts. Note: Chapter 13 and Chapter 7 bankruptcies are very different for businesses.

Chapter 13 is vital for individuals whose personal assets are tied up with their business assets, because they can avoid problems like losing a home if they file Chapter 13 versus Chapter 7. Chapter 13 lets a business stay in business and pay its debts. But Chapter 7 does not.

Chapters 12 and 15

There are two other forms of individual bankruptcy. These are less common. Chapter 12 is bankruptcy protection for family farmers and family fisherman. See uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-12-bankruptcy-basics.

Chapter 15 is bankruptcy protection when a bankruptcy matter involves people from another country. See uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-15-bankruptcy-basics.

Correcting Bankruptcy Errors

In general, to correct bankruptcy issues, all you or your lawyer will need to do is file an amendment to your bankruptcy petition. These can be errors like forgetting to list an item of property. Or it can be disclosing an incorrect property value or forgetting a creditor or income from a side business. See alllaw.com/articles/nolo/bankruptcy/bankruptcy-petition-mistake.html.

Liens in a Credit Record

What’s a lien?

Per Investopedia: “A lien is a claim or legal right against assets that are typically used as collateral to satisfy a debt. A lien could be established by a creditor or a legal judgement. A lien serves to guarantee an underlying obligation, such as the repayment of a loan. If the underlying obligation is not satisfied, the creditor may be able to seize the asset that is the subject of the lien. There are many types of liens that are used to secure assets.”

Errors in Liens

Some of the worst errors when it comes to liens can involve real estate if using land to secure a debt. Minor or typographical errors are called Scrivener’s errors. You can often correct them by rerecording the deed of trust or by recording an instrument explaining and correcting the error. But you cannot cure more substantial errors except by a Reformation lawsuit. This type of lawsuit asks a court to correct the deed of trust to reflect the parties’ intent.

Find out why so many companies use our proven methods to get business loans, even during a recession.

Legal Judgments in a Credit Record

Businesses of all sizes can be on the defense end of a lawsuit. Lawsuits can be for everything from a customer slipping on ice in your parking lot to a supplier suing to get you to pay them.

The main ways you can lose in court are if you default at the start and never answer a summons and complaint. Or you could lose a motion for summary judgment brought by the other side. Another way to lose is to lose a bench or jury trial. Or you could exhaust all appeals and end up on the losing end.

If you or your business lose in court, then a judgment may be entered against you. Judgments generally take the form of paying damages, which is money. Or the judgment could be for specific performance where you’re required to do (or not do) something. Another option is an injunction is entered and you may be prevented from doing something. A civil judgment can’t send you to jail. That’s criminal, which is rather different.

Errors in Legal Judgments

Errors often take the form of a judgment entered against the wrong person and/or company, or a typo in the amount of money damages listed in the court’s records. Or the judgment is entered but it’s already been satisfied (paid). Another kind of error is fraud or other misrepresentation on the part of one of the parties. Plus there could be excusable neglect. For example, a city recovering from a major hurricane might not make the proper clerical entry of judgments a priority.

Correcting these errors can take several forms. Different states have differing rules. But every state wants their records to be correct. They just have different ways you need to go about correcting the record.

Correcting Errors in Legal Judgments

You or your lawyer will need to look up how to correct mistakes in a legal judgment in your state (or the District of Columbia or a US territory, like Puerto Rico).

For example, in Massachusetts, you or your lawyer will need to make a motion before the court under Rule 60(a). See mass.gov/rules-of-civil-procedure/civil-procedure-rule-60-relief-from-judgment-or-order. But in Texas, you or your lawyer would need to file a motion for judgment nunc pro tunc. This is a motion to correct the judgment. See texaslawhelp.org/article/correcting-clerical-error-court-order-answers-common-questions#toc-9.

In Georgia, correcting a judgment comes under the general umbrella of relief from judgments. See law.justia.com/codes/georgia/2010/title-9/chapter-11/article-7/9-11-60. In Louisiana, it falls under an Amendment of Judgment, and you can fix calculation or language errors ia motion. See law.justia.com/codes/louisiana/2015/code-codeofcivilprocedure/ccp-1951/.

Like with most things, the faster you work to correct a legal judgment, the less it will cost you. In particular if the wrong person (you) is the defendant, acting as quickly as possible will save you in legal fees. Ignoring these problems will not make them go away.

Find out why so many companies use our proven methods to get business loans, even during a recession.

UCC Filings in a Credit Record

When you secure a loan with property, creditors can tell other creditors about any of your assets in use as collateral for the secured transaction. UCC liens filed with Secretary of State offices act as a creditor’s public notice of their interest in the property.

It’s in a creditor’s best interests to check for UCC filings. This is so they can make sure they’re the only creditor with a claim on that collateral.

Errors in UCC Filings

Like anything else, there can be typographical errors in UCC filings. But the law says that, unless the errors “make the financing statement seriously misleading”, the UCC filing is still in effect. Are you depending on a typo to get out of a UCC filing? You might want to rethink that strategy. See law.cornell.edu/ucc/9/9-506.

Correcting Errors in UCC Filings

For the most part, unless the errors are seriously misleading, the UCC says you don’t have to fix them. This is because of the policy behind the law governing secured transactions under the UCC. Essentially, financing statements exist to provide notice of a transaction. And they are also meant to give enough information to later potential creditors that the debtor’s property may be covered by an earlier creditor’s security interest.

Hence, a financing statement exists as a starting point in a later creditor’s due diligence process, not the conclusion. See jdsupra.com/legalnews/it-may-be-foul-but-there-is-no-harm-not-11403/.

Correcting the Public Document Errors in Your Credit Record: Takeaways

Your personal credit record can directly impact your business credit record. Both need to be right. And correct records are more likely to get your business money.

It’s possible to fix errors in public documents like judgments and UCC filings. But the mechanism for doing so will differ. This depends on the error, the type of record, and the jurisdiction. The more quickly you act, the better and cheaper it will be for you. Ignoring these mistakes will not make them go away. Correcting mistakes can make your business more fundable.

For more information on fundability and getting business credit, contact us today.

The post Correct Errors in Your Public Credit Record appeared first on Credit Suite.

Bank card financial obligation loan consolidation financing

Bank card financial debt combination car loan

Bank card financial obligation loan consolidation financing

Credit scores card financial debt loan consolidation car loan is one of the means of settling credit report card financial obligation. Some individuals kind of fail to remember regarding credit score card financial obligation loan consolidation finance being offered as a technique of credit score card financial debt loan consolidation. Credit report card financial debt combination finance as well is essential to think about when going for credit history card financial debt loan consolidation.

What do we imply by credit scores card financial debt loan consolidation car loan?

In other words, bank card financial debt combination finance is a reduced passion financing that you look for with a financial institution or banks in order to erase your high passion bank card financial debt. Credit rating card financial debt loan consolidation car loan also is based on very same concept as equilibrium transfers i.e. relocating from one or even more high rate of interest financial obligations to a reduced rate of interest one. The charge card financial obligation loan consolidation car loan needs to be repaid in regular monthly instalments and also based on the problems and also terms concurred in between you and also the dispenser of bank card financial debt loan consolidation funding.

If you have a truly poor credit score background as well as you desire go for credit history card financial debt negotiation making use of credit score card financial obligation loan consolidation funding, the debt card financial debt combination lending will certainly take the kind of a safeguarded credit scores card financial debt combination car loan. Even worse the credit scores ranking, the a lot more tough it is to obtain a credit scores card financial obligation loan consolidation car loan.

Equilibrium transfers as well as credit report card financial obligation loan consolidation lendings have the very same goal behind them, the credit report card financial obligation combination finances are occasionally thought about much better since you finish up shutting many of your credit report card accounts which have actually been the primary perpetrator in touchdown you in this challenging scenario. Equilibrium transfers have their very own benefits which are not readily available with credit scores card financial obligation combination financings. Selecting in between charge card financial debt loan consolidation funding and also equilibrium transfer is truly an issue of individual option.

Debt card financial debt combination funding also is essential to take into consideration when going for credit history card financial obligation loan consolidation.

The credit report card financial obligation loan consolidation funding has actually to be paid back in regular monthly instalments and also as per the problems as well as terms concurred in between you as well as the dispenser of credit rating card financial debt combination finance.

If you have a truly negative credit rating background as well as you desire go for debt card financial debt negotiation utilizing credit report card financial debt combination funding, the credit report card financial debt combination financing will certainly take the kind of a protected credit scores card financial debt loan consolidation car loan. Equilibrium transfers as well as credit rating card financial obligation loan consolidation finances have the exact same goal behind them, the credit rating card financial obligation combination lendings are occasionally taken into consideration far better since you finish up shutting many of your credit rating card accounts which have actually been the primary perpetrator in touchdown you in this challenging circumstance.

The post Bank card financial obligation loan consolidation financing appeared first on ROI Credit Builders.

Popular Articles

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Where to Get Your Online Finance Degree

Where to Get Your Online Finance Degree

An online money level is a fantastic choice for people that desire to go to university, however for whatever factor like an on the internet discussion forum as opposed to a conventional class. No issue why you desire an online financing level, there are lots of choices out there for you to pick from.
The online financing level is an incredibly popular significant, as well as a result of this mostly all of the on the internet colleges provide the online financing level. The online financing level is not just readily available in bachelors, however likewise in masters and also in some situations PhD. No issue if you desire simply a bachelor’s online financing level or desire to obtain an online financing level at ever before degree, the option is absolutely your own.
Spending for your online money level is not as tough as it ahs remained in the past, either, since currently you can obtain trainee financings as well as pick various layaway plan for your online money level. Spending for your online money level has actually never ever been simpler.
You will certainly require to make a decision precisely what you are looking for in the college where you will certainly get your online financing level. The factor for this is due to the fact that there are many on-line college alternatives that vary in certification, appeal and also price, that you will certainly require to figure out which ones use the most effective online money level for your spending plan.
Make certain, nonetheless, prior to you start examining for your online money level that you recognize your college is recognized and also has numerous effective grads with their online money level.

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