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You are here: Home / Archives for build business credit

Start Business Credit: Business Line of Credit

August 29, 2009 By Marco Carbajo

Business Line of CreditA business line of credit is a financing tool offered by most business banks. In a nutshell it’s a source of capital that you can access at any time up to a certain amount agreed upon by you and the bank. Usually, there is no collateral required to get approved, and it’s an ideal tool for businesses that are at least 2 years old.

 

A business line of credit is typically revolving like a credit card and it has no fixed payment terms and is based on an adjustable market based interest rate. Some have a feature of only requiring monthly interest only payments to be made in order to keep the payments small while your business grows. In most cases you can elect to make the full monthly payment of both the principle and interest when you want to and can pay the full balance at any time without penalty prior to the maturity date.

 

The amount your business is able to receive from a business line of credit will depend on your business past gross annual revenues and projected annual cash flow.

 

HOT Tip: Most banks will not require business tax returns and profit and loss statements when you keep your credit line of request below $50k. 

 

A good test to see if your business will qualify is to examine your business bank rating to determine if there has been a sufficient average daily balance to adequately support the line of credit repayment. Typically a low 5 bank rating can grant you an approval so be sure to establish a good rating prior to applying.

 

Here’s what you need to apply for a business line of credit

 

Business Information

 

•Business name

•Business address (physical address, no P.O. Boxes)

•Business phone number

•Business fax number

•Business Taxpayer Identification Number(s) (TIN) or Social Security Number(s) (SSN)

•Business Duns Number

•Date the business was established

•Ownership type

•Number of owners

•Gross Annual revenue or sales

•Business banking account number(s) and balance(s)

 

Business Owner Information

 

•Name

•Home address

•Home phone number

•Social Security Number(s)

•Country of Citizenship if not United States

•Date of Birth

•Percentage of ownership

•Annual household income

•Personal savings and/or checking account number(s) and balance(s)

 

Contact Information

 

•Primary contact (must be an owner of the business)

•Primary contact phone number

•Primary contact email address 

 

One of my preferred banks for business lines of credit is Wells Fargo.

 

Other banks for business lines of credit that I recommend are:

Capital One

PNC

US Bank

 

For a complete list of our preferred lenders 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

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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: bank credit, bank credit line, bank history, bank loans, bank rating, banking credit, build business credit, build corporate credit, business credit, business credit loan, business credit strategy, business line of credit, business lines of credit, business loan, corporate credit, small business banking, small business finance, small business financing, start business, start business credit, wells fargo

Top 10 Business Credit Building Mistakes

August 17, 2009 By Marco Carbajo

Building Business Credit Mistakes

Business Credit Building

 

While many small business owners realize the benefits of starting business credit there are many mistakes that are made in the business credit building process. I felt that compiling a list of the most common mistakes I’ve seen throughout the industry can serve as a helpful guide to you. Here they are…

Choosing the wrong entity structure

Selecting the right entity structure for your business is the most important step you can make. Not just from a business credit standpoint but also from a tax and asset protection standpoint as well.  In addition there are state filing fees, franchise fees, licenses, resident agent service and a host of other important factors to consider.

Selecting the wrong SIC code 

There are certain codes that the business credit bureaus and lenders tend to stay away from. These industries include real estate investing, car sales, adult entertainment, travel, lending, restaurants, and dry cleaners. When you classify your business be sure to stay away from these classifications.

Selecting the wrong NAICS code

If you plan on investing in real estate then you will want to make sure that the company you build credit on is not “real estate investing”. Most banks will automatically turn you down because this is a high risk category. You still will be able to invest in real estate but you may have to set up a business that does business development, business consulting, marketing & advertising, training and development, etc. and then operate your real estate investments from a separate division or company that does something else.

Using a home or cell phone number as a business phone number

There’s nothing wrong with using these phone numbers but when it comes to business credit building it does matter. Your number has to be listed in the 411 national directories and cell phones and VOIP as well as call forwarding numbers do not work.

Having inconsistent information on business documents

When you start business credit you must pay close attention to details. The information used to open your credit file must match the information you use on applications, documents, and filings.

Applying for credit with the wrong vendors

There are 500,000 vendors in the U.S. that extend credit to businesses but less than 6,000 report to the business credit bureaus. Too many make the mistake of believing that simply doing business with a vendor will result in establishing business credit. Not true!

Applying for credit with vendors that report slow

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

Applying for personal credit cards disguised as business credit cards

Pay special attention to what a credit card application requires and what the terms and conditions are.  A credit card that reports only to your personal credit is not a true business credit card

Applying for business credit cards that do not report to the business credit bureaus

There are over 500 business credit cards available in the marketplace but less than 70 report your payment history to the business credit bureaus.

Not establishing an effective bank rating

A minimum of a low 5 bank rating is a must if you plan to apply for a line of credit or loan. You can achieve a low 5 rating with a $10k balance in your account.

To access a complete step by step business credit building system with insider secrets, premium vendors, leasing companies, business credit cards, and lenders that report to all the major business credit bureaus become a member of my Business Credit Insider’s Circle. Submit your name and email below for details and receive a free audio seminar ($597 value) =>

To Your Success!

 Marco Carbajo

About the Author

Marco Carbajo is a business credit specialist, author, speaker, and founder of the Business Credit Insider’s Circle. He is a weekly columnist for Dun & Bradstreet Small Business Solutions, a corporate 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.  

Filed Under: Business Credit Tagged With: build business credit, building business credit, business credit, business credit builder, business credit building, how to build business credit, how to business credit, how to business credit building, start business credit

Top 4 Reasons Not to Use Personal Credit for Business

August 13, 2009 By Marco Carbajo

Business Credit Card picStatistics 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.

Using your personal credit, also known as you’re “Consumer Credit Profile,” instead of establishing Business Credit is a bad idea on many fronts.

 

Here are my ‘Top 4 Reasons Why You Should Not Use Personal Credit for Business.’

 

Reason 1

It impacts your personal debt to credit limit ratios, credit scores, and personal finance capacity for you and your family.

 

This reason alone has caused severe personal credit damage and liability to small business owners across the country who have lost their businesses due to the recession and have used personal credit and personal guarantees for all their business financing. Just ask Kirk Brown, owner of Buck’s Shoes in Fremont, who knows firsthand what using personal credit for business can do.

 

When you properly separate your personal credit from business credit the debt you accumulate for your business should only report to your business credit file not your personal credit file. More importantly you protect you and your family from personal liability when you get approved solely on your businesses’ credit file.

 
Reason 2

When you use your personal credit for the benefit or operation of the company it can lead to an “alter-ego” decision by regulatory or a financial organization, and a piercing of the corporate veil.

 

This would directly endanger the owner’s personal assets and make the owner or owners directly liable for the penalties or repayment of any debts incurred by the business or corporation.

 

It’s always a good idea to build business credit rather than abandon it through the co-mingling of funds–and this includes the “co-mingling” of credit profiles.

 

Many entrepreneurs believe that a corporation protects them because corporations are viewed as separate legal entities but you can jeopardize that protection when you use personal credit for the benefit or operation of your corporation!

 

Reason 3

Another disadvantage of using your personal credit in place of proper business credit is the fact that the use of personal credit for the operation of a company can make your company appear improperly funded or operated, or may incorrectly establish that your business credit is unstable, unreliable, or overextended.

 

Reason 4

Last but not least what might be perfectly normal and acceptable for a business credit profile, such as submitting multiple applications for business credit, can have a serious negative impact on personal credit because of what’s called excessive inquiries.

 

Solution:

Start building business credit for your corporation separate from your personal credit and improve your company’s image, protect you and your family’s assets, credit capacity, and personal liability.

 

Remember – To be prepared is half the victory. ~ Miguel De Cervantes

 

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 the National Entrepreneur Club.  Click here to visit his blog and signup free to get strategies, resources, and response-boosting tips with blog updates, news, and more! To start building business credit join his business credit community today and Click Here.

Filed Under: Business Credit Tagged With: build business credit, build corporate credit, building corporate credit, business credit, business credit card, business credit help, business credit strategy, business finance, business finance articles, businesscreditnopersonalguarantee, businesscreditvspersonalcredit, corporate banks, corporate credit, corporate credit program, corporate visa, establish corporate credit, financecorporate, general business credit, get corporate credit, home finance business, homefinancebusiness, how to business credit, instant business credit, obtain business credit, personalcredit, start business credit

Business Structures to Avoid for Building Business Credit

July 21, 2009 By Marco Carbajo

Business EntityI get asked this question quite often and thought I would clear the air on what business entity selection is best for building business credit.  This step by far is the most important because it’s the foundation of your business credit.  Not to mention all the other important areas that entity selection affects such as taxes, liability, asset protection and so on.

 

As a business owner, you have four real choices when it comes to business structures for building business credit, and two bad choices:

 

    * C Corporation

    * S Corporation

    * Limited Liability Company

    * Limited Partnership

    * Sole Proprietorship

    * General Partnership

 

You can learn more about your four good choices by listening to my FREE Business Corporations Seminar.

 

CLICK HERE to listen

 

To learn why Sole Proprietorships and General Partnerships are so dangerous to you and your family, read on.

 

A Sole Proprietorship is bad…

 

Have you heard the saying “You get what you pay for?” Well, you normally don’t pay anything to start either a Sole Proprietorship or a General Partnership. Of course you don’t get anything, either. Unless you count the following as valuable business assets:

 

    * Lots of personal liability

    * No protection from your business creditors

    * An increased risk of being audited

    * Problems with valuation for a subsequent sale of the business

 

The reason for this lack of protection is because neither of these structures is considered a separate legal structure. Instead, they are considered personal extensions of you, if you are operating as a Sole Proprietorship, or you and your partners, if you’re operating as a General Partnership.

 

And, because these business types are considered personal extensions of you, you don’t have any protection from them.

 

But a General Partnership is Downright Ugly!

 

It gets even worse if you are operating with a partner as a General Partnership. That’s because not only are you responsible for all debts and agreements you enter into in the name of your business, you’re also on the hook for all of your partner’s actions in the name of your business as well. This can be devastating if your partner is financially irresponsible, and, because either of you can bind the partnership; you have zero protection from your partner.

 

If You Don’t Choose a Good Entity, the Government Will Choose a Bad One for You!

 

If you’ve been doing business up to now without a business structure, both the IRS and your state government have defaulted your business into either a Sole Proprietorship or a General Partnership.

 

And that means you’re exposed.

 

Use a Proper Business Structure – If you want to build business credit and you want to protect yourself from personal liabilities.

 

CLICK HERE to join my business credit community today and discover what cash credit and financing opportunites you can obtain for your business entity. 

 

Remember – There is one thing stronger than all the armies in the world and that’s an idea whose time has come ~ Victor Hugo

 

 

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.

Filed Under: Business Credit Tagged With: build business credit, building business credit, business credit, business credit blog, business credit blogger, business credit builder, business credit building, business credit coach, business credit help, business credit information, business credit service, getting business credit, how to build business credit, marco carbajo

Business Credit Help that Can Make or Break You

July 12, 2009 By Marco Carbajo

Business Credit Help

 

One of the mistakes that I see business owners make when attempting to build business credit is not paying attention to details. I want to provide you a business credit tip that can help improve your chances of getting approved for loans, credit cards, and  lines of credit for your business.

One small detail like choosing an SIC code in a high risk classification can mean your business being flagged as a high risk with the business credit bureaus. As a result every lender, creditor, or company that pulls your business credit report will see that you’re business is in a high risk classification.

As a result many lenders will automatically decline your application! In addition, Dun & Bradstreet will minimize the credit limit recommendation for your company on your DNB file which lenders take a close look at prior to extending credit to your business.

This short video will give you these high risk categories to stay away from so you can prevent your business from being placed in a high risk classification. If you haven’t selected an SIC code or NAICS code for your entity you will need to prior to setting up your Dun & Bradstreet file.

Don’t let a simple detail like this hurt your chances for obtaining the cash credit and financing your business needs and deserves.

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 it may require in order to operate. 

Another major benefit for building business credit is you’re ability to have access to capital which provides the leverage you need to purchase additional income producing assets like other businesses, real estate, equipment and so on.

The worst mistake you can make is seeking funding when your business needs it most. Lenders extend cash credit lines to businesses that are not in high risk industries, don’t need the capital and have strong business credit ratings. Start digging your well before your business gets thirsty!

Ready to start building 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 premium vendors, business credit cards, 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 audio seminar ($597 value) => 

About the Author

Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. A business credit builder system helping business owners establish business credit with no personal guarantee. 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. 

Filed Under: Business Credit Tagged With: build business credit, build corporate credit, business credit, business credit blog, business credit blogger, business credit community, business credit help, business credit information, business credit strategy, corporate credit, corporate credit help, corporate credit information, marco carbajo, small business finance, small business financing, start business credit

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