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Bad Credit Business Loan – Top 5 Solutions

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Bad Credit Business LoanDuring tough economic times many business owners are faced dealing with tough personal credit challenges.  As a result they have to resort to applying for bad credit business loans just to keep their businesses afloat regardless of the interest rate being charged.

 

Hard money lenders have no problem charging outrageous fees and interest rates for taking on the risk but there are alternatives to bad credit business loans.

 

Here are my Top 5 Solutions to Bad Credit Business Loans

 

Accounts Receivable Factoring

 Factoring is a form of finance used to finance commercial, consumer, and government accounts receivable. Typically, businesses factor their accounts receivable to improve and accelerate their cash flow. Businesses that factor their invoices (accounts receivable) sell their invoices to a factoring company, usually for anywhere between 95 to 99 cents on the dollar.

 

 Business Cash Advance

 An alternative to a traditional bad credit business loan, you can receive advance cash based off your future credit card sales (Visa, MasterCard, American Express, Discover, and Debit Cards). There are no personal guarantees or collateral attached to the business advance. This allows you to have the working capital you need within 3 business days or less. There are no restrictions on how to use the money allowing you to grow your business hassle free.

 

 Business Asset Liquidation

While liquidation usually means you’re closing your business forever this can be a viable strategy to raise capital without actually closing your business. You may have equipment that you no longer use or other assets that can be sold off that can generate substantial capital for your business.

 

Personal Credit Restoration 

It’s not a shame to have bad credit because everyone at one time goes through challenges but it is a shame to keep it. Start repairing your bad credit immediately by either fixing it yourself or enrolling in a solid, reputable, and legal credit repair service.

 

Increase Credit Scores

In addition to credit restoration another strategy for solving a bad credit challenge is in improving your debt to credit utilization. You accomplish this by establishing higher credit limits with lower balances typically below 30%. When you have larger credit limits on personal and business credit reports new lenders that you apply to will tend to extend even larger credit lines.

 

Bad credit business loans do exist but before you decide to commit be sure to consider these options. If you do choose to apply or you are already in a high interest rate loan because of bad credit be sure to start restoring your personal credit. Once you improve your credit you can apply for a loan and obtain a much better rate. This will allow you to pay off the high interest rate loan and saving you thousands in interest.

 

Remember – Improve your business, your life, your relationships, your finances and your health. When you do the whole world improves. ~ Mark Victor Hansen

 

Instead of jeopardizing your personal credit and assets every time your company requires financing, you can use the business’ credit rating to secure the financing you need with even more favorable terms and lower interest rates.

 

Start your business credit today!

 

To Your Success!

Marco Carbajo

About the Author

sp_image-435950341-1242740704.pjpegMarco Carbajo is a business credit specialist, author, speaker, and founder of the National Entrepreneur Club.  Click here to visit his blog and signup free to get strategies, resources, and credit building tips with blog updates, news, and more! To start building business credit join his business credit community today and Click Here.

Start Business Credit : Top 10 Reasons Why

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Corporation picEntrepreneurs 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 opportunity to start business credit by establishing a business credit profile that is completely separate from a personal credit profile. 

 

The main problem still facing today’s small business owner is fewer than 10 percent know about or truly understand how business credit is established and tracked-and how it affects their lives and businesses.

 

Statistics even 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 others continue to use the owner’s personal credit cards for business transactions.

 

Here’s what others are saying about the importance of starting business credit:

 

“The longer you delay establishing business credit,
the longer you delay taking advantage of business loans.”

~ Wells Fargo Bank

 

“You should differentiate your personal credit from your business credit.”

~ Entrepreneur Magazine

 

“Before you apply, you should examine your business credit reports.”

~ Inc Magazine

 

 

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 is the ‘Top 10 Reasons Why You Should Start Business Credit Now.’

 

  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. Improve the appearance of your businesses’ funding capacity and stability.
  8. Eliminate inquiries on personal credit when applying for business financing.
  9. Increase your businesses’ ability to obtain cash credit 10 to 100 times greater then you can obtain personally.
  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.

 

Some other benefits include:

 

  • Business credit cards have much higher limits than personal credit cards.
  • Having the larger cash lines available for unforeseen expenses like expansion, equipment, operations or fulfillment
  • Prevent the risk of damaging your personal credit
  • You can build business credit even if you have bad personal credit
  • Prevent the limits that lenders will impose on you for personal credit for you and your family’s needs
  • Reduce your tax burden and improve accounting

 

Still not convinced you need to start business credit?

 

CLICK HERE to listen to a free Business Credit Seminar ($597 Value)

 

Every business will at one point require an influx of cash in order to cover operating expenses, expansion costs, legal fees, inventory or a range of other items the business may require in order to operate. The worst mistake you can make is seeking funding when your business needs it most. Lenders extend cash credit lines to businesses that don’t need the capital. Start digging your well before your business gets thirsty!

 

If you ask any business owner how they financed their business start up the answers usually are:

  • Personal credit cards
  • Tapped into home equity line
  • Personal loan from the bank
  • Personal loan from family & friends
  • Private investors

One of the many risks that business owners face is using their personal assets as collateral or guarantee for business loans and financing. If the business owner defaults on a loan then, valuable items like a car, house, or bank account can be vulnerable to creditors’ claims.

 

Instead of jeopardizing your personal credit and assets every time your company requires financing, you can use the business’ credit rating to secure the financing you need with even more favorable terms and lower interest rates.

 

Start your business credit today!

 

To Your Success!

Marco Carbajo

About the Author

sp_image-435950341-1242740704.pjpegMarco Carbajo is a business credit specialist, author, speaker, and founder of the National Entrepreneur Club.  Click here to visit his blog and signup free to get strategies, resources, and credit building tips with blog updates, news, and more! To start building business credit join his business credit community today and Click Here.

 

 

 

  

Instant Business Credit :Getting Started

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Instant Business Credit

 

Once you have an entity structure and obtained a Dun & Bradstreet number now it’s time to start building your business credit profile. One of the biggest mistakes made by entrepreneurs attempting to build instant business credit is applying for numerous vendor accounts.

While some may have a tendency to believe that the more the merrier is a sound strategy I tend to disagree. The reason is simply getting approved for vendor credit is one thing but what really matters is whether or not the vendor reports your payment history to the business credit bureaus.

There are over 500,000 vendors extending credit to businesses, but less than 6,000 of them report to the business credit bureaus! So to build your business credit you have to make sure you choose the right vendors to apply with.

Secondly, there are vendors who do report your payment history but only on a quarterly or even yearly basis. Time is of the essence so for establishing instant business credit you have to make sure the vendor you apply with also reports to the business credit bureaus on a monthly basis!

Here are some examples of instant business credit resources:

Instant Business Credit Vendor

Quill

Quill sells office supplies, cleaning supplies, packing and shipping supplies, school supplies, printing supplies, and more. From filing and storage to hand held computers, Quill has a wide range of discounted top name brand products.

Quill offers a net 30 account and reports to Dun and Bradstreet.  Best of all they report your payment history every 30 days. For small orders you can get approved with a listing on 411 directory and have a working website. New businesses can start out with smaller limits that will increase when you pay on time every month.

Instant Business Credit Membership

Business Credit Insiders Circle

BCIC is a business credit building membership for small business owners providing a step by step business credit builder system including vendor credit lines, business credit cards, funding sources and payment reporting.

BCIC offers a monthly membership account and reports to Dun and Bradstreet. Best of all they report your payment history every 30 days.

Instant Business Credit Card 

Visa® Business Platinum Card

Capital One by far provides the fastest response for business credit approval.  (60 seconds) This card is perfect for new or established business owners who want to build business credit history.

Capital One Small Business offers a 0% introductory APR on purchases until 2010 as well as balance transfers. There’s no annual fee and credit line approvals can be up to $10k.

While you can obtain instant business credit for your business the process of building a business credit profile and score does take some time.  As long as you keep your credit lines active and maintain a solid payment history with minimal balances (less than 30%) you can expect to see your credit lines increase over time.

New credit line approvals for your business will also be larger due to favorable business credit scores and existing credit line capacity.

Looking to access instant business credit with a step by step business credit building system? A system that provides you access to premium vendors, business credit cards, funding sources and lenders that report to all the major business credit bureaus? Become a member of my Business Credit Insiders Circle. Submit your name and email below for details and receive a free audio seminar ($597 value) =>

About the Author

sp_image-435950341-1242740704.pjpeg

Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. A business credit building membership helping business owners in establishing business credit. He is a weekly columnist for Dun & Bradstreet Small Business Solutions, a business credit blogger for All Business & American Express Small Business and author of “Eight Steps to Ultimate Business Credit” and “How to Build Business Credit with No Personal Guarantee.” His articles and blogs have also been featured in Business Week, The Washington Post, The San Francisco Tribune, Scotsman Guide, Alltop, Entrepreneur Connect, and Active Rain. 

How to Business Plan: What you need to know

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business-planI’m sure you’ve heard about ‘business plans’ but do you know the real benefits to having one?

Not every entrepreneur who starts and runs an online or offline business begins with a business plan, but it definitely helps to have one. If you’re seeking funding from a venture capitalist, angel investor or other source of private capital then you will definitely need a comprehensive business plan that is well thought out and shows sound business reasoning.

However, too many entrepreneurs believe that business plans are only needed when you require business capital or financing to launch your business. When it comes to the internet many entrepreneurs can start their business on a shoe string budget so in their minds ‘business plans’ don’t apply to them right?

Nothing can be further from the truth. It’s like building a home without using any plans or blueprint. Imagine believing that because you have all the materials, laborers, and tools needed to build a home you figure why do we need the plans? Let’s just start building away!

A business plan is your blueprint that outlines every necessary component for the success of your business. Now for internet entrepreneurs how can you expect to build your business online without a plan? If you plan to build your business on the internet using social media marketing you’re going to need a plan?

You’ve probably heard me say this ‘A sign of no business plan is a sign of no business’.

Still not convinced?

If you ever decide to approach a banker for a loan for your business, your loan officer may suggest a Small Business Administration (SBA) loan, which will require a business plan. If you have an existing business and you are approaching a bank for capital to expand the business, they may not require a business plan, but it will look much more favorably on your application if you do have one.

Here are ’10 Reasons Why You Should Have a Business Plan’

  1. Supports a loan application
  2. To raise equity funding
  3. Define objectives and describe programs to achieve those objectives
  4. Compete in the marketplace (through an analysis of what your competition lacks)
  5. Make money from the start by devising an effective marketing strategy
  6. Provide a revenue estimate (by defining your market — who your customers will be — and the percentage of the market you can expect to reach)
  7. Define agreements between partners
  8. Set a value on a business for sale or legal purposes
  9. Evaluate a new product line, promotion, or expansion
  10. Determine whether your business has a chance of making a good profit

What’s in a business plan?

A business plan should prove that your business will generate enough money to cover your expenses, but a business plan may vary depending upon who your target audience is. If you are writing a plan for your associates and partners, for example, to expand an existing business, then the focus of that plan may be more on the operation side than it will be on the financial side. This plan would show your partners how the expansion will mean more revenues, but they are going to want to know the nuts and bolts of how this new venture is going to be implemented.

If you are writing a business plan for a bank, your bank manager will want to see that your ideas are well thought out, but the most important aspect to him or her will be your financials. Are your projections realistic? And will the cash flow of the business be enough to ensure that you can make the monthly payments for the loan that you have requested? If your business is making $1,000 a month and your payments are $1,200 a month, the bank is likely to reject your application.

When considering an investment opportunity, most venture capitalists will look at the obvious trends and market niches. The most important factor in a decision to invest in a company is the quality of the people. In real estate, the three biggest factors are “location, location and location.” The venture capital factors are “people, people and people.” VCs will ask, how experienced are the people that are going to run this business? Do they have knowledge of the industry? Have they started successful businesses in the past?

I know it’s quite a bit to digest but are you seeing all the benefits to having a business plan?

Excellent!

What makes a successful business plan?

  • Presents a well thought out idea
  • Contains clear and concise writing
  • Has a clear and logical structure
  • Illustrates management’s ability to make the business a success
  • Shows profitability

Lets bring it all together…

Your business plan is your business blueprint and like a calling card, it will get you in the door when you’ll have to convince investors and loan officers that you can put your plan into action. You want your calling card to look impressive, so make sure your business plan is printed out on good quality paper, you have checked the spelling and grammar and that your numbers add up. Anyone who sees errors while reading your plan will wonder whether you are going to make similar errors in running your business.

A great business plan accomplishes two main objectives:

1) It provides you a blueprint for building your business including but not limited to product development, target marketing, operations, and revenue projections

2) Show bankers, venture capitalists, and angel investors that you are worthy of financial support.

Make sure that your plan is clear, focused and realistic. Then show them that you have the tools, talent and team to make it happen.

Start your business plan today!

CLICK HERE for 500 sample business plans

Here’s a free course on‘How to Write A Business Plan‘from the SBA

Looking to build your business credit? Become a member of my Business Credit Insiders Circle and gain access to a proven step-by-step business credit building system. A system that provides you access to vendor lines of credit, fleet cards, business credit cards with and without a PG, funding sources and lenders that report to all the major business credit bureaus. Submit your name and email below for details and receive a free business credit building audio seminar ($597 value) =>

To Your Success In Business and in Life!

Did This Blog Help You? If so, I would greatly appreciate if you like and shared this on Facebook and Twitter.

About the author

Marco CarbajoMarco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. He is a business credit blogger for Dun and Bradstreet Credibility Corp, the SBA.gov Community, About.com and All Business.com. His articles and blog; Business Credit Blogger.com,  have been featured in ‘Fox Small Business’,’American Express Small Business’, ‘Business Week’, ‘The Washington Post’, ‘The New York Times’, ‘The San Francisco Tribune’,‘Alltop’, and ‘Entrepreneur Connect’.

Business Loan Finance: How to Get Approved

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Business CreditLending institutions want to lend money because it’s the way they make money. However, they only want to lend money to a borrower who is able to repay the loan on time and in full.

When lending small amounts of money under $50,000 typically the qualification depends solely on personal and business credit scores. Depending on the personal and business credit scores, they either will or will not approve the loan.

When deciding to extend credit to a business lenders use the ‘Four Factors for Lending Approval’:

Capacity

Collateral

Conditions

Character

Each of these areas helps the lender to determine the overall risk of the loan. While each of the C’s is reviewed, none of them on their own will prevent or guarantee access to financing. There are really no automatic formulas or guaranteed percentages that are used with the Five C’s. They are only a variety of factors lenders use to evaluate and decide how much of a risk the potential borrower is.

Let’s cover these 4 Factors in greater detail.

Capacity

This is an evaluation of your ability to repay the loan. Capacity is evaluated by several components including cash flow, payment history, and additional cash sources. The best way to show your capacity is with a strong business credit profile, a strong bank rating (typically a low 5), a well designed business plan and/or prior year(s) financials that show you can produce enough cash to repay the loan.

If your loan is under $50k most banks will grant an approval if you have a strong business credit rating, a favorable personal credit score, and a low 5 bank rating.

CLICK HERE for a free business plan course

Collateral

Heavy machinery, inventory, equipment, stocks and bonds, and other expensive business assets that can be sold if a borrower fails to repay the loan are considered collateral. One of the easiest ways to obtain a business loan for building business credit and bank credit is using the CD-Secured loan strategy.

*There are specific banks that do these types of loans that can allow you to grow your access to capital at a much faster rate.

Conditions

Be prepared to prove that the conditions are right for your business. Make sure there’s a market, an industry, positioning, competitiveness, and experience to back up your plan.

Character

Lenders have to believe that a business owner is a reliable individual who can be depended on to repay the loan. Some areas they look into include personal credit history, education, and work experience.

When applying for a small business loan, don’t forget the importance of personal relationships. Apply for a loan at a bank where you already have a positive business relationship. Also, make an attempt to meet with the person who will be evaluating your application, such as a bank’s lending officer, rather than the teller who handles your day-to-day banking transactions.

If you want to succeed in getting a loan, be sure to also check out Elements of a Successful Small Business Loan Application.

*Gain access to my private list of banks that do CD-Secured loans when you join our business credit building system.

Remember – To succeed in business, to reach the top, an individual must know all it is possible to know about that business. ~ J. Paul Getty

Looking to rebuild your business credit? Become a member of my Business Credit Insiders Circle and gain access to a proven step-by-step business credit building system. A system that provides you access to vendor lines of credit, fleet cards, business credit cards with and without a PG, funding sources and lenders that report to all the major business credit bureaus. Submit your name and email below for details and receive a free business credit building audio seminar ($497 value) =>

To Your Success in Business and in Life!

Did This Blog Help You? If so, I would greatly appreciate if you like and shared this on Facebook and Twitter.

About the Author

 Marco Carbajo                                                                                                

Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. He is a business credit blogger for Dun and Bradstreet Credibility Corp, the SBA.gov Community, Business.com, About.com and All Business.com. His articles and blog; Business Credit Blogger.com, have been featured in ‘Fox Small Business’,’American Express Small Business’, ‘Business Week’, ‘The Washington Post’, ‘The New York Times’, ‘The San Francisco Tribune’,‘Alltop’, and ‘Entrepreneur Connect’.

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