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Are Credit Cards for Small Business on the Rise?

September 23, 2009 By Marco Carbajo

Business Credit offer

Many business owners across the country have experienced the cold shoulder from their banks and seen their credit lines reduced as a result of rising losses, the credit crisis, and economic uncertainty.  Are credit cards for small business on the rise or decline?

 

While major credit card issuers like Advanta have left the business earlier this year it’s refreshing to see that banks like J.P. Morgan Chase card services announced today that it plans to launch four more credit cards specifically targeted at small-business owners! Among them will be a credit card that requires the cardholder to pay their balance in full each month similiar to Amex’s card.

 

Richard Quigley, president of Chase Business Cards said “It’s really going to be small businesses that are going to help pull the U.S. out of the recession.” Now we have all known this from the very beginning of this financial mess but it’s about time that these national banks realize it and do something about it.

 

Even though this is good news for small business owners there are some that see this as a strategy that banks are pushing simply because business credit cards aren’t covered under the new regulations that restrict issuers from raising rates and fees on consumer credit cards. Whatever the reason is I believe that the more options small business owners have when it comes to credit cards the better. Hopefully Chase will roll out some true business credit cards but I do like that they are positioning themselves to compete with American Express.

 

Competition is a good thing and when it comes to small business credit cards the winner is the small business owner! For example, Chase’s Ink Bold card—the first charge card offered by a Visa or MasterCard issuer—is aimed at business owners who want to avoid paying interest charges. It comes with a variable credit line that automatically adjusts to the business owner’s spending patterns. Annual fees are $95, but the first year’s fee is waived.

 

Here are some other aspects to Chase’s new small business credit cards compared to Amex.

 

Chase’s Four New Small Business Credit Cards – Ink Bold, Ink, Ink Plus and Ink Cash

*They are accepted at twice as many locations worldwide as American Express

 

* InkSM Bold — Chase’s first pay-in-full  charge card with no interest
      charges 

– Ink Bold has no annual fee for the  first year and $95 thereafter

 

*InkSM — Developed for small business  owners seeking business-sized
      credit limits, flexible payment options  and online expense management
      tools with the ability to earn rewards  from business purchases with no
      limit on how many points may be earned  and the points do not expire.

-Ink has no annual fee.

 

*InkSM Plus — The solution for  small business owners seeking
      business-sized credit limits, flexible  payment options, online expense
      management tools and the ability to  earn rewards from business purchases
      including extra travel benefits  with no limit on how many points may be
      earned and the points do not  expire. Rewards points also are worth 25
      percent more when redeemed  for air travel through Ultimate RewardsSM and
      cardmembers  can earn an annual spend bonus of up to 25,000 points.

-Ink Plus has no  annual fee for the first year and $60 thereafter.

 

*InkSM Cash — Designed for small  business owners seeking unlimited cash
      back and accelerated earnings  on everyday business purchases: dining,
      fuel, home improvement and  office supplies. Ink Cash provides
      business-sized credit limits,  flexible payment options and online
      expense management tools.

-Ink Cash  has no annual fee.

 

Ouch! I’m sure Amex doesn’t like to see this!

 

If you like to stay informed and here about the latest news regarding business credit be sure to subscribe to my blog. 

 

Better yet CLICK HERE to become a business credit member and discover what business credit can do for you!

 

By the way, what would you like to see more of on this blog? Any questions? Let me know 🙂

 

To Your Success!

Marco Carbajo

About the Author

 marco-picture-2009-small-pic2

Marco Carbajo is a business credit specialist, author, speaker, and founder of http://www.startbusinesscredit.com . Want to learn more about how to build business credit and obtain unlimited financing for your business? Claim Marco’s popular FREE business credit seminar ($597 Value), available by simply submitting your email below To Your Success! =>

Filed Under: Business Credit Tagged With: business credit, business credit card, credit cards for business, credit cards for small business, credit for small business

What has Business Credit done for you lately?

September 14, 2009 By Marco Carbajo

QuestionDuring the early stages of starting and operating a business, many small business owners have become accustom to using personal credit cards to finance purchases, equipment, and even payments to suppliers or vendors. What’s even more alarming is if you personally guarantee each and every credit card, credit line, or loan for your business then you are putting your personal assets and family at risk!

 

This leads me to ask you “What has business credit done for you lately?”

 

Statistics show that over 65% off all small businesses use credit cards on a regular basis; but the problem is less than half of those credit cards are actually in the business name.

 

The single greatest challenge facing small business owners is awareness. Less than ten percent of business owners in America know about let alone understand how business credit is established or how to even generate a business credit rating.

 

Business credit can do much more than personal credit can or ever should do for your business!

 

So what is business credit?

 

It’s the ability to obtain financing under the name of your business entity without using personal credit. Business credit should be separate and based on the corporation’s credit worthiness not yours! Recently Entrepreneur Magazine was quoted as saying “You should differentiate your personal credit from your business credit.”

 

Entrepreneurs and small business owners who have a separate legal entity for their business have a unique opportunity that no other individual or sole proprietor has. It’s the ability to establish a business credit profile that is completely separate from a personal credit profile.

 

If you think you’re business is doing just fine and you don’t need the credit think again! The reality is that every business will at one point require an influx of cash in order to cover unforeseen operating expenses, development, expansion, legal fees, inventory or a range of other items the business may require in order to grow. Adopting a ‘cash only’ strategy is a good plan but should never be the only plan.

 

After the recent economic downturn today’s small business owner is facing a new era when it comes to business financing. Banks, lenders, suppliers, leasing companies and others are making adjustments, adopting new rules, and facing new regulations in the lending arena.

 

Now more than ever you need to be pro active and establish a new level of financial preparation including a strong business credit profile, a favorable business credit rating, and a solid bank rating. Wells Fargo states “The longer you delay establishing business credit, the longer you delay taking advantage of business loans.”

 

One of the key advantages of having business credit is instead of putting your personal credit and assets at risk every time your company requires financing you would now be in a position to secure the financing you need with your businesses’ credit. Here are some other benefits of building business credit:

 

1. Any debt you accumulate for the business would only report to your business credit file not your personal credit file.

2. Eliminate the co-mingling of funds–and this includes the “co-mingling” of credit profiles so you won’t jeopardize the protection of the corporate veil.

3. Protect you and your family from personal liability when you get approved solely on your businesses’ credit file.

4. Improve your personal debt to credit limit ratios by transferring the balances of business debt used with your personal credit to your business credit.

5. Eliminate personal liability you have on your existing business debt by balance transfer from personal credit to your business credit.

6. Increase your personal credit limit availability for you and your family.

7. Increase your businesses’ ability to obtain cash credit 10 to 100 times greater than you can obtain personally.

8. Improve the appearance of your businesses’ funding capacity and stability.

9. Eliminate inquiries on personal credit when applying for business financing.

10. Last but not least you SAVE MONEY! For example, an individual might pay up to 13% interest on a $100,000 line of credit whereas a business could qualify for an interest rate of 7%. That would save you almost $40,000 in interest alone.

 

CLICK HERE to become a business credit member and discover what business credit can do for you!

 

To Your Success!

Marco Carbajo

About the Author

 marco-picture-2009-small-pic2

Marco Carbajo is a business credit specialist, author, speaker, and founder of http://www.startbusinesscredit.com . Want to learn more about how to build business credit and obtain unlimited financing for your business? Claim Marco’s popular FREE business credit seminar ($597 Value), available by simply submitting your email below =>

Filed Under: Business Credit Tagged With: build business credit, build corporate credit, building business credit, business credit, small business financing, start business credit

How to Build Bank Credit for Your Business

September 8, 2009 By Marco Carbajo

bank-creditRecently I shared the benefits of building business credit with each of the business credit agencies. Separation of personal and business credit is a must for small business owners in order to eliminate personal liability and protect the integrity of the corporate veil.

 

 

While this strategy creates a Paydex, Small Business Credit Risk Score, and Intelliscore for your business it’s not the only rating you should pay close attention to.

 

Your business will also need to establish effective ‘Bank Credit’.

 

Bank credit is totally separate from building business credit and in no way affects your ability to build strong business credit scores.

 

“Bank Credit” makes your business more credible in the eyes of lenders.  In this post, I want to share with you the ‘3 Main Components of Building Bank Credit’ which are:

 

  • Business Bank Account & History
  • Bank Rating Number
  • Obtaining Your First Business Bank Loan

 

So let’s get started!

 

Business Bank Account


The first step in establishing positive bank credit is to make sure that your business name and mailing address, as listed on your business bank account, matches exactly how your business name and address appear on any legal paperwork that’s been filed with the State. It must also match exactly with the name and address that appear on your Federal EIN paperwork. If it doesn’t match you’ll have to correct it immediately!

 

Business Bank History


Most lenders also determine the age of your business by the date you first opened your business bank account and not the date that appears on your Incorporation, LLC, or EIN paperwork.  However, in some instances banks may also require 24 months seasoning from the start date of your business as well.

Your business banking history is vital to your ability of being able to secure larger business loans with banks. Lenders will look to see how long that relationship has been established, so once you get your account set-up don’t change banks!

 

The longer your business banking history, the better the borrowing potential you have.

 

Bank Rating Number

 

 Your business bank account reflects how you manage your cash flow. Lenders want to know that your business cash flow is capable of handling the business debt and expenses on a consistent basis. Bank accounts with low average daily balances, or that show many NSF returned checks, can get your business loan applications declined right away.

 

If a loan amount requires a $1,000 month payments then lenders need to see at least a “Low 5” bank rating. Your “Bank Rating” is based on your average daily minimum balance over the last 3 months.

 

Bank Rating

Account Balance

 

Bank Rating

Account Balance

Low 4

$1,000 – $3,999

 

Low 5

$10,000 – $39,999

Mid 4

$4,000 – $6,999

 

Mid 5

$40,000 – $69,999

High 4

$7,000 – $9,999

 

High 5

$70,000 – $99,999

 
 
 
 
 Bank ratings consist of three factors…

 

 

1.  The first factor is your balance rating. This rating is your average minimum balance maintained in your account over a three (3) month period. $10,000 will rate as “Low 5”, $5,000 rates as “Mid 4”, $999 rates as “High 3”, and so on.  You need to maintain a minimum “Low 5” bank rating ($10,000) for at least 3 months. Unfortunately, without at least a “low 5” rating, most lenders will assume your business has little ability to repay.

 

2.  The second factor is the bank rating cycle which is three (3) months. You’ll want to have at least a low 5 for the three months prior to applying for larger loans.

 

3.  The third and final factor has to do with how you manage the account.  NSF (bounced) checks destroy bank ratings.  From this point forward, NSF checks are something you can’t let happen. I would suggest that you add overdraft protection to your account as soon as possible.

 

Obtaining Your First Business Bank Loan

 

Getting your first business loan from a bank can seem like an impossible task. The majority of the business loan applications at banks get declined because banks won’t lend to just anybody … or will they?

 

This one business bank loan strategy provides a powerful boost to building business credit fast. The business bank loan needs to be in the exact name of your company. It should be under your Federal EIN and report to the business credit agencies, specifically Equifax Small Business and Corporate Experian.*

 

So how do you accomplish this? Under this Bank Loan Program you will be securing a business loan with a certificate of deposit (CD) at the bank that is extending the business loan.  You’ll make a deposit into a CD account at an SBA preferred lending bank. Then, you receive a business loan for 100% of the value of the CD.

 

This process works very well and works every time as long as you’re personal credit scores are not in the low 500 range. If your scores are in the low 500’s, it’s best to try smaller business banks and talk to an individual banker first.

 

The Benefits of a Secured Bank Loan

 

  • It will appear on your business credit report just like any other loan.
  • There will be no note in the file, or on credit reports, that show it as “secured”.
  • It will make your business credit report stand out to other lenders and creditors who obviously know how difficult it is to get a business bank loan.

 

If you’re personal credit is a large issue and you just can’t find a business bank to do the CD program for you … don’t worry. You can still build your business credit without the bank loan; the bank loan just makes it faster. 

 
 

 *N.E.C. members are provided access to our list of banks who have done the CD-Secured Business Loan program

 

  

Remember – The secret of business is to know something that nobody else knows. ~ Aristotle Onassis

 

 
To Your Success!

Marco Carbajo

About the Author

sp_image-435950341-1242740704.pjpeg

Marco Carbajo is a business credit specialist, author, speaker, and founder of http://www.startbusinesscredit.com . Want to learn more about how to build business credit and obtain unlimited financing for your business? Claim Marco’s popular FREE business credit seminar ($597 Value), available by simply submitting your email below =>

Filed Under: Business Credit Tagged With: bank credit, bank history, bank loan, bank loans, bank rating, banking credit, build business credit, build corporate credit, business credit agencies, business credit card, business credit loan, business credit strategy, business finance, business loan, business plan, business planning, business plans, corporate credit card, credit education, intelliscore, paydex, personal credit repair, personalcredit, small business banking, small business finance, small business financing

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September 3, 2009 By Marco Carbajo

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Filed Under: Business Credit

How To Build Business Credit With Bad Personal Credit

September 1, 2009 By Marco Carbajo

Credit ReportAfter presenting to REIA of Macomb last week it was clear to me that building business credit was a HOT topic for real estate investors. It was interesting to find that small business owners and real estate investors have similiar questions when it comes to business credit.

 

As a result of the economic downturn many find themselves being faced with less than perfect credit.  While credit repair companies are springing up all over the country there are few like United Credit that can truly deliver.

 

But in the meantime can you start building business credit with bad personal credit?

 

Absolutely!

 

There are vendors, suppliers, leasing companies, and even cash credit issuers that will extend credit to your business solely based on your businesses credit rating.  In order for you to obtain cash credit without a personal guarantee first requires you to start establishing strong business credit with vendors & suppliers.

 

The key is identifying which vendors & suppliers offer the following:

  • Credit with no personal credit checks
  • Credit with no personal guarantee
  • Credit for start ups (great for new entities)
  • Monthly payment reporting to business credit bureaus

 

If this part leaves you scratching your head don’t worry we have all this work already done for you if you’re interested. As long as you understand the fact that cash credit without a personal guarantee can only happen once you have established a strong business credit profile.

 

Here’s a quick comparison on personal credit vs. business credit.

Business Credit Comparison.png.jpg

As you can see there are HUGE differences and the one in particular that should get you really excited is the unlimited amount of business credit files you can establish! 

 

For a complete list of our preferred business credit sources join my business credit community today!

 

Remember – Abundance is not something we acquire. It is something we tune into. ~ Wayne Dyer

 

To Your Success!

Marco Carbajo

About the Author

sp_image-435950341-1242740704.pjpeg

Marco Carbajo is a business credit specialist, author, speaker, and founder of http://www.startbusinesscredit.com . Want to learn more about how to build business credit and obtain unlimited financing for your business? Claim Marco’s popular FREE business credit seminar ($597 Value), available by simply submitting your email below =>

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Submit Your Email and Receive ‘8 Steps to Building Ultimate Business Credit’ audio FREE ($597 Value)


Filed Under: Business Credit Tagged With: build business credit, build corporate credit, building business credit, business credit, business credit building, business credit help, business credit strategy, business credit without a personal guarantee, how to business credit, start business credit

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