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Stop Using Personal Credit Cards for Business: 5 Reasons Why

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Using Personal Credit Cards for Business

What do you use to pay for your business purchases?

Do you use a personal credit card?

If so, you’re not alone. using personal credit cards for business

In fact, over 65% of all small businesses use credit cards on a regular basis but less than 50% of those cards are actually in the company’s name.

In today’s post you’re about to learn why using personal credit cards for business purchases is dangerous and can cost you more than you think.

Here are five key reasons to stop using personal credit cards for business purchases:

1) Impacts Your Credit Utilization – Using a personal credit card for business purchases directly impacts your individual and overall credit utilization ratios. These ratios are one of the factors that make up your FICO® scores.

In fact, the second most important factor that impacts your credit scores is your debt.  The credit scoring system heavily weighs your debt usage. This is where a scoring model such as FICO® takes the size of the credit limit on each card and compares it to the balance owing being reported by the card issuer. (credit limit vs amount owing)
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5 Powerful Ways to Start Building Business Credit Fast

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Start Building Business Credit Fast

What’s the best way to start building business credit fast?

If you want to start off fast and build your business credit file as soon as possible then this post is for you. We are going to cover five proven ways to establish credit in your company’s name while protecting your personal credit at the same time. start building business credit fast

So, whether you need access to working capital, accept credit card payments, conserve cash flow or manage fuel costs; you can start building business credit fast with each one of these.

First, before you take action you will want to set up a separate legal entity for your business. Secondly, obtain an employer identification number (EIN) which is not only used for tax filing but also to establish a unique credit identity for your business.

It’s also crucial that your company is ‘credit ready’ meaning that it meets the standard requirements that banks, lenders, suppliers, retailers and vendors use as part of their credit decision making process.

By the way you can find more details on lender compliance in our post ‘How to Build Business Credit Step by Step’.

Here are 5 ways to start building business credit fast:
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How to Order a Tri Merge Credit Report for Pre Qualification

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How to Order a Tri Merge Credit Report

Did you know we can determine the amount of funding you qualify for with no hard inquiry?

We accomplish this by you submitting a tri merge credit report to us rather than us pulling it. how to order a tri merge credit report

When you personally order a tri merge credit report for yourself it does not trigger a hard inquiry.

Hard inquiries also known as “hard pulls” happen when a bank or lender checks your credit to make a lending decision. This happens when you directly apply for a loan, credit card or other type of financing.

In a nutshell a hard inquiry occurs when you give permission to a lender or other entity to view your credit report. Some actions that trigger a hard inquiry that you may not be aware of are actions such as getting new cell phone service, asking for a credit limit increase or submitting a rental application.

When you order a tri-merge credit report from a site such as CreditReportEngine, there is no hard inquiry to your credit. At Experian, you can check all 3 credit scores and credit reports from Equifax, Transunion & Experian without affecting your credit scores.
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Small Business Financial Advice: 3 Tips for Financial Health

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Small Business Financial Advice

Many of my acquaintances have attempted to start their own businesses over the years. At least 70% gave up within 12 months, because they failed to turn a profit. The biggest mistake most of them made was poor cash flow management. small business financial advice

My anecdotal observations are consistent with years of formal research.  A study from U.S. Bank found that 82% of all business failures are caused by inadequate cash flow management. If you want to run a successful company, addressing financial problems is your top priority. Here is some important small business financial advice you need to review.

1) Create 24-month projections for your expenses and use irregular cash inflows to cover them

A few years ago, an entrepreneur friend of mine received a substantial windfall from a new client. She invested that money in a green screen for a side project that she didn’t need. Three months later, she was unable to make a payment for the property she was leasing.

This is a very common mistake with small business owners. They get excited when they first get money, but fail to project their long-term expenses. They blow through their cash reserves and are unable to cover their expenses down the road.

You need to project your long-term expenses and set aside cash reserves to pay them. Don’t get overly confident if you get a large sum of money, because you can’t be sure that you will be getting another large influx of cash anytime soon.
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What is the Cost Setting Up an LLC? Breakdown of the Actual Costs

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Cost Setting Up an LLC

So, you’re ready to form an LLC.

First, I want to say congrats to you for taking advantage of the liability protection, potential tax advantages and ability to build business credit that come with setting up a separate legal entity for your business. cost setting up an llc

I’m sure you’ve been thinking; should I do it myself, hire a lawyer or use an online incorporation service?

In today’s post we’re going to breakdown all the costs for setting up an LLC so you can decide which option is best for you. When it comes to determining how much it costs to form an LLC, there are two costs to consider: 1. Formation costs, and 2. Maintenance costs.
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