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Business Credit Benefits You Should Know About

A Personal Guarantee is “by making a guarantee you are putting yourself - and your assets - on the hook, by acting as the loan's cosigner. If your business dissolves, you will be responsible for repayment. Creditors will go after you in the event that your business fails to repay the loan”

          Business credit solves the concern.  Business Credit is credit in a business name that’s linked to the business’s EIN number. This is credit a business owner can obtain that is not linked to their SSN. This credit can be obtained with no personal liability from the business owner.

·         Business credit has no impact on the business owner’s personal credit. When done properly, business credit is obtained without the SSN being supplied on the application.

·         This means there is no credit check from the business owner to get approved. This also means that anyone who has bad, even horrible personal credit can still be approved for business credit.

·         Business credit reports to the business credit reporting agencies, not the consumer reporting agencies. As business credit is used it has no adverse impact on the owner’s consumer credit because it’s not reported to consumer agencies.

·         This means utilizing the account, even over 30%, won’t have any adverse impact on the personal credit scores. And there are no inquires on the personal credit when you apply for business credit as long as you don’t supply your SSN.

           Another benefit of business credit is that it more than DOUBLES your borrowing ability. You already have consumer credit, now you can have a whole other credit profile with business credit also.

           Plus, per SBA business credit limits are 10-100 times that of consumer limits. Obtaining business credit radically increases your available credit.

           Business credit can be obtained VERY fast. You can get approved for initial vendor credit to help your business grow within one week. That credit will typically report within 30-90 days.

           Once reported, you will then have reported trade lines, which in turn give you an established business credit profile and score.

           Once your profile is established in 90 days or less, you can then start getting real useable revolving store credit cards. Within 120-180 days you can then get real cash credit such as Visa, MasterCard, Discover, and AMEX credit you can use anywhere.

           Business credit is perfect for startups and established companies. It’s also perfect for companies that don’t have collateral, which is required for all SBA 7a loans.

           Business credit is perfect for companies that have no cash flow to verify, no tax returns to supply, or ones that don’t want to verify this information even if they do have it.

           It truly provides a good way to get money for ANY business, big or small, new or established, regardless of the owner’s personal situation.

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Valley Credit Builders

A customer focused credit building, credit coaching and credit repair company, helping business owners and individuals build a proper credit profile. Get Free E-Book "5 Essential Steps to Obtaining Business Funding" CLICK HERE! https://valleycreditbuilders.leadpages.co/5-essential-steps/

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Business Funding Options

There are many sources that offer business funding today. Knowing the different options will help you find the best funding solution(s) for your business. Here are a few:

          Business Charge and Credit Cards are a fast and easy way to access cash for business. You can use the money for any purpose, and you can be approved for business credit with no personal guaranty or credit check. Many merchants will approve you for individual credit cards of $10,000 or higher. And if you manage these correctly...You’re looking at 0% money.

          Asset Based Funding is perfect if your company has collateral such as accounts receivable, inventory, equipment, purchase orders, or real estate. These assets can be used to secure the financing you need, and you can secure asset based funding even if your credit isn’t very good.

           Bank Loans are still available, although they have become harder to get approved for. Many large banks tend to be much more conservative in lending so you may want to consider a community bank or credit union for a SBA loan.

          Equipment Leasing helps when you want to lease expensive equipment, and some equipment leasing and financing also works for you to borrower against existing equipment you already own.

          Factoring is perfect if you have high amounts of account receivables. You can obtain funding up to 25 million and you can receive your advance within 24-48 hours in most cases. With factoring, you sell your company’s accounts receivables to a company (known as a factor) at a discount, in order to free up your cash. The company that purchases the receivables then assumes the responsibility for collecting them. This is a great option, as they absolutely don’t care about your own personal credit.

          Grants are a great way to get money for your business, especially government grants. Depending on your business types and intended use of funds, there are many options available for you to receive grant money that doesn’t need to be paid back.

          Lines of Credit are perfect sources of working capital. A line of credit works like a revolving credit card but with much lower interest rates and higher available credit limits. You can get credit lines over $150,000 and write checks from the account or use a debit card to withdrawal funds or use for purchases.

          Merchant Cash Advances and Merchant Lines of Credit are perfect for businesses who process credit card payments. This type of financing will advance you money against future credit card transactions. You can even get a debit card to use the funds you secure.

          Microfinance Loans are less difficult and time intensive to qualify for with loan amounts ranging from $500 to $35k. Many businesses use several micro loans to get money for their business versus applying for one larger loan due to the easier qualifying criteria.

          Angel investors have been responsible for funding over 30,000 small businesses each and every year. With over 250,000 active angels in the country you may want to consider an angel investor network to simplify your search. These investors are a great source of funding when banks won’t approve you, and perfect for projects where you need a lot of money.

          SBA backed Loans are still one of the most popular financing options available today. SBA backs, or insures about 80% of the loan while the lender lending the money takes on about 20% or so of the risk.  Due to the lower risk to the bank, many major banks are more apt to lend money using SBA backed loans than regular loans.

          Venture capital is neither easy nor fast to be able to tap into but can be a viable source of funding. This is a great source when you need higher loan amounts, and don’t mind giving up a potential stake in your company. Plus you don’t have some of the headaches that come with conventional funding. Think Shark Tank. It’s always easiest to obtain financing when you know what you are looking for. Now you have a beginning understanding of some of the many financing options available to small business owners today.

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I helped several business owners build credit for their businesses without the use of their personal credit, and I look forward to helping even more. If you know of any business owners that need credit or cash for their business please pass my name along. If there is any assistance I can provide you, please don't hesitate to call or message.

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Free Credit Scores – Confusion and No Relevance

Everybody has seen the commercials for free credit scores. While these scores can be called credit scores, most creditors do not use them during the approval process.

The DOMINANT score, that 90% of all creditors use, is called FICO.  Named for the company who developed the scoring model, Fair Isaac and Company.

You see, a little rift developed between FICO and the credit bureaus and the credit bureaus are attempting to replace FICO with another credit scoring mechanism of their own.  I believe it is an effort of futility; and what the public is getting out of it is nothing but confusion.  There is absolutely no benefit to the consumer.

While these alternative scores can somewhat (?) give you a feel for where your credit score lies compared to other consumers out there, I’ve seen way too many discrepancies between these scores and FICO, in both directions.  Sometimes your FICO score is higher and sometimes lower.  There is no relevance between these alternative scores and FICO.  Therefore, in my view, these scores are not relevant in determining your credit score and do nothing but add confusion to the credit system.

My hat’s off to credit card companies that are now including your FICO credit score on monthly statements. This should help minimize the confusion. If your credit card company does not include your FICO score, the consumer can go to www.myfico.com and sign up for their monitoring service ($29.95 a month).  Once you sign up, you can download a FANTASTIC credit report with multiple, industry specific, FICO credit scores.  You can then cancel your subscription or continue with their monitoring service.

Bottom line, Free Credit Scores are nothing more than a marketing tool, by the credit bureaus, to trick the consumer into enrolling into one of their credit monitoring services. While, I do agree that everyone should have some sort of monitoring service, the end, is this scenario, does not justify the means.  If you are interested in credit monitoring, I can give you a few good choices to pick from.

[kimcarp-blog]

A customer focused credit building, credit coaching and credit repair company, helping business owners and individuals build a proper credit profile. I helped several business owners build credit for their businesses without the use of their personal credit. If you know of any business owners that need credit or cash for their business please pass my name along. If there is any assistance I can provide you, please don't hesitate to call or message.

[kimcarp-blog]

Experian's Intelliscore

           Experian’s most recent score system released in 2008 is known as Intelliscore Plus, which they boast is the next level in credit scoring.

           Intelliscore Plus takes into account hundreds of variables to offer a business score between 0-100, with 100 being the highest. Intelliscore actually predicts a business’s risk of going seriously delinquent, or over 91 days late, or having a major financial issue such as bankruptcy within the next 12 months.

           The 0-100 is a percentile score that reflects the percentage of businesses that score higher or lower than the specific business being looked at. For example, if the business has a score of 20, this means that company scores better than 19% of other businesses.  That also means that 80% of other businesses score higher than that business.

           More than 7.2 million businesses in Experian’s database have been assigned a score, and over 800 aggregates or factors affect each score. Many other factors tie into percentages of the overall Intelliscore.

           The Historical Behavior or payment history accounts for 5-10% of the total score while current payment status, trade balances, and percent of accounts delinquent account for 50-60% of the score makeup.

           The business’ credit utilization affects 10-15% of the total score.  This has to do with the amount of credit that has been extended to the business in relation to the balances they currently have on those accounts.

           The company profile, age of business, industry risk, and size of business assessed by number of employees accounts for 5-10% of the total score and 10-15% of the total score is determined based on the derogatory items, collections, liens, judgments, and bankruptcies that business has.

           Experian’s Intelliscore is one of the most popular credit scores in the business world today. Knowing how this score works empowers you with the ability to insure you have the highest score available, so you can obtain the greatest amount of business credit for your business.

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Why Are FICO Credit Scores Different?

        Most consumers wonder why their FICO credit scores are so different. If you apply for a car loan, your scores will be different than if you are applying for a mortgage. Many people wonder why these scores are so different. 

        There are many different scoring models available through Fair Isaac (FICO). Many of these are referred to as “industry option” scoring models.         These scoring models are industry specific. There are separate models for mortgages, cars, lines of credit, credit cards and other bank offered loan programs.         These different scoring models take certain things into account heavier than other scoring models.         For example, the auto industry-scoring model takes into account your car history heavier than everything else.         If you were ever late on a car payment or had a car loan that you defaulted on, a dealer using the auto industry option will pull a lower credit score than what you might pull for a mortgage.         Your negative car history would have a greater impact on your credit score than any other defaulted account.  If you have good car history, your score will be much higher. The same applies if you have bad car history.         FICO 08, FICO Bankcard, FICO Mortgage Industry Option, and the FICO Auto Industry scoring models are only a few of the many FICO credit scores that exist.

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You should use Business Credit Cards for business expenses.

A lot of small to medium-sized business owners use credit cards in course of business. The problem is, many make the mistake of their personal credit cards.

There are a couple of major problems with this:

First, if you use your personal credit cards for your business you are blurring the line between business and personal finances. The better separation you can achieve between your business finances and personal finances, the better off you will be. For this reason, a business credit card in your business name is the best route.

Second, using your personal credit cards for your business puts your personal credit at risk. If the debt belongs to the business, shouldn’t it be on the business’s credit?                                

           Most people don’t think this is a big deal until they run into problems and no longer have their personal credit to fall back on.

           The recession of 2008 put many business owners behind the proverbial “eight ball” with their personal credit and hopefully we’ve learned from our mistakes.

           Maybe you’re thinking that your business won’t struggle, or that you don’t use credit cards much anyways. What’s the point, then?

 Using a business credit card in your business does have some real advantages aside from the two big ones above. For example:

1.    Streamline operations and automate expense tracking. Paying expenses can be much easier to manage with a business credit card, and reports can be generated monthly or annually in many cases to help categorize and analyze expenses.

2.    Business cards have “rewards” programs too! If you have a lot of regular monthly expenses for your business that can be paid with a rewards card, you could easily get $500 to $1000 per year (or more) in cash rewards, or even free airline tickets if you use a travel rewards card.

3.    Manage employee spending. Business credit cards can be set up to have spending limits for employees, which can aid in managing expenses for in-the-field employees.

4.    Using business credit cards helps you build credit for your BUSINESS, which is of utmost importance in today’s economy.

           As you can see, there are several big advantages to using an actual business credit card for your business.

           A helpful hint for those wishing to establish business credit: 
Try to get approved based on your business’s creditworthiness rather than your personal creditworthiness.

           This means avoid providing your social security number on credit applications for your business credit card. If you don’t get approved based on your business credit alone, then you can try applying for a business secured credit card.  I know of circumstances where a business put down $300 and received a business secured credit card for $1,000. This card also reported to the business credit bureaus and helped the business owner establish business credit.

           There are a host of ways to start building business credit that is separate from your personal credit.  I’d be more than happy to discuss this topic with anyone interested.

[kimcarp-blog]

I helped several business owners build credit for their businesses without the use of their personal credit, and I look forward to helping even more. If you know of any business owners that need credit or cash for their business please pass my name along. If there is any assistance I can provide you, please don't hesitate to call or message.

[kimcarp-blog]

The Importance of Establishing a Good Business Credit Score.

Establishing a good Business Credit Score is sometimes the only by which a business can get credit. Many owners have been taken task, on their personal credit score, and building a good Business Credit Score presents a lifeline to access credit for their business.

Here is a breakdown of how the Paydex credit score is calculated: and steps you can take to build a good Business Credit Profile.

Score is based on how your BUSINESS pays it’s bills: Payment Expectation:

Expect payment may come early .....................        100

Payments generally come within early


payment discount period ....................................       90

Payment is prompt ...............................................     80

Payment comes 14 days beyond terms .............       70

Payment comes 21 days beyond terms .............       60

Payment comes 30 days beyond terms .............       50

Payment comes 60 days beyond terms .............       40

Payment comes 90 days beyond terms .............       30

Payment comes 120 days beyond terms ............      20 Unavailable.........................................................       UN

If you own a business, your Paydex score is essential in establishing new credit and continuing to build credit limits exceeding $100,000.

It only takes 60 days to establish a positive Paydex credit score.

To start you will first want to apply for a DUNS Number, a nine-digit business identifying number, with Dun and Bradstreet. Be cautious, D&B specializes in confusion, you just want a DUNS number…..nothing more.

When your DUNS number is established you will next want to find a merchant who will extend you credit and then report that credit to Dun and Bradstreet.

Once you have positive business credit reporting to Dun and Bradstreet, you will have a positive Paydex score established.

You will want to then apply for more business credit and use it regularly.

Make sure you pay all payments early to raise your scores to 80 or higher.

You can easily and quickly establish a positive Paydex credit score.

As you continue to pay your bills timely your scores will continue to rise, giving you the ability to qualify for credit in your business name.

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Types of available Small Business Credit.

It’s all about Cash Flow!.....Most Small Business Owners do not realize that there is a massive amount of financing options currently available for small businesses to help them enhance their cash flow. Business credit is one financing type that works perfect for many businesses. The business can build its own credit score and profile and use that to qualify for business credit cards, in the business name, which require no personal credit check or personal guarantee to qualify 

Here are some other options that if used properly, can protect your cash flow. The key statement is “IF USED PROPERLY”.

Over 80% of US businesses use Equipment financing to obtain equipment.  Business owners can get financing, even leasing to help with the purchase of equipment, even heavy equipment. And business owners can also use equipment, they already own, as collateral and get cash back through an equipment sale-lease-back.

Vehicle wrap financing is a specialized niche type of financing that gets business owners funding to put a graphic wrap on their vehicle.

Commercial signage financing is another nice program that business owners can use to obtain signage for their business.

Stocks and securities can be used as collateral for a business owner to obtain a line-of-credit up to 90% of the value of the stocks. Rates on these programs are the lowest of all type of business financing.

Business owners with a 401k can use that 401k as collateral and get financing for up to 200% of the 401k value. Plus, rates are typically less than 2% for 401k financing.

Merchant advances are another type of financing business owners can qualify for if they accept credit cards now. These are not loans, but actual cash advances against future credit card sales.

Revenue lending is a similar program that uses future cash flow as collateral for financing. Even business owners with bad personal credit can qualify, and get approved within 72 hours or less in most cases.

Business owners with account receivables can get financing within 24 hours at rates less than 2%, even if they have flawed credit. Account receivable financing is perfect for many industries including the medical. government contractors, construction industries, and any others that has receivables with their customers.

Companies can also get purchase order financing to obtain letters-of-credit to fulfill purchase orders.

Inventory financing can be obtained to purchase inventory, or borrower against inventory a business owner already has and get a working capital line-of-credit.

SBA offers two main programs that can really help business owners. Loans can be obtained up to 12 million dollars.  SBA 7a loans are great for working capital, while 504 loans are perfect for real estate purchases.

There are many private investors, crowd sourcing groups, and angel investors who also have money to lend. If a business owner has a project, that makes sense and needs funds, sometimes, private money is the best way to go when lenders say no.

Business owners can also qualify for commercial real estate financing. Money can be obtained to purchase real estate, and cash-out refinances are also readily available.

Business owners can even obtain auto vehicle leasing in their business name through many types of business leasing programs.

Real estate flippers can take advantage of a very special program known as a house reseller program. With this financing can be obtained for 100% of the purchase and rehab costs of properties.

Bottom Line: There are a multitude of financing options a business owner has access to if they know what to look for. If you need any assistance determining what your company could qualify for, please feel free to contact me.

[kimcarp-blog]

I helped several business owners build credit for their businesses without the use of their personal credit, and I look forward to helping even more. If you know of any business owners that need credit or cash for their business please pass my name along. If there is any assistance I can provide you, please don't hesitate to call or message.

[kimcarp-blog]

Apply for an Instant 20% off - NAGI!

Every major retailer is offering an additional instant discount if you are willing to apply for their branded credit card. On the surface, it sounds like a great idea….I buy $100 worth of stuff and they give me an instant 20% off.  Twenty bucks and I had to do was apply for a credit card…..This is GREAT!

Not so fast!

NAGI! (Not A Good Idea)

 Let’s look at what happens in the background to my credit report and credit score. There are two major negative impacts that will result:

 “Hard” inquiries are any credit      inquiry used to justify the giving of credit.

 “Soft” inquiries are credit      reports pulled directly by the consumer.

2.    Length of credit history - is how long you have had credit. At face value, this seems like something you couldn't really do anything to fix. However, there are ways you can hurt yourself here. Applying for, and being approved for, new credit is the quickest way to negatively affect this ratio.  If I have 2 cards with 6 years of history on them and then acquire a new card, my average length of credit history moves from 6 years to 4 years. This recalculation could again result in a lowering of my credit score.

 Bottom Line: The quick application for a credit card could cost you a lot more money on your next major purchase i.e.: Mortgages, Refinancing you present mortgage, auto purchase.   The negative effect on your credit score could end up knocking you out of the “special” financing offers on vehicles and mortgages costing you a whole lot more than the initial $20 we saved.

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Re-negotiate Your Credit Card %.

Many credit card issuers charge interest rates as high as 30% interest (APR) or higher. And most people do not realize that you can negotiate with your credit card company for a lower rate, especially if you've had any of your credit cards for a long time.

To do this, all a consumer needs to do is to call their credit card issuer and insist on a lower rate.  Even lowering the rate to 12% should save a consumer a lot of money.  And the key to getting the lower rate is just to ask for it to be lowered. After all, you never know what you are going to get unless you ask!

Here's how you can check with your issuer for a lower rate:

           1). Start with a credit card that you've had for a long time and that you have never been late on with payments.

           2). Look on the back of the card and dial the customer service number.

           3). Start negotiating. Here's a sample script:

Sample Script:

Consumer: (Upbeat and polite) "I just got an offer in the mail for a new credit card that has an introductory interest rate of only 6.9%! I don't really want to switch cards, because your service has been wonderful. But even though I've had your card for five years, I'm still paying a 19% rate on my balance. I'm going to have to transfer my balance unless you can lower the interest rate."

Them: (Over the sound of keyboard keys being tapped as your credit and payment history are being examined.) "Hmmm ... well, that is the standard rate ... but let me see...”

Consumer: "Of course, I understand that, but I can pay a lot less in interest if I transfer my balance. I really need you to reduce the rate to 9% or so."

Them: "Hold on while I check with my supervisor ... OK, how about 9.9%?"

Consumer: "No problem." (Now pat yourself on the back for saving some bucks!)

           This may not work as well if you have been frequently late on your payments and over your head in debt. But it can't hurt to at least ask for an interest rate reduction.

            If you have a solid track record, handle your obligations, and are generally polite, credit card issuers should be willing to offer you a lower rate to keep from losing you to their competition.

4). Keep trying. If you get what you want the first time, try to get another customer service rep or a supervisor on the line. They still won't lower the APR? Try again in a few months.

5). DO NOT get angry. I have found that I am far more successful in all financial endeavors when being polite.  These financial "gatekeepers" have angry people calling them all day long. Imagine what that must be like.  If you're nice and treat them with extra respect, they often return the favor and give you a little extra care.

[kimcarp-blog]

I helped several business owners build credit for their businesses without the use of their personal credit, and I look forward to helping even more. If you know of any business owners that need credit or cash for their business please pass my name along. If there is any assistance I can provide you, please don't hesitate to call or message.

[kimcarp-blog]

Review your Credit Card Statement!

You should review your credit card statements for several reasons: to verify transactions and payments; pay attention to the due date; look for fees and penalties; and note credit line/ limit and credit available.

Transactions and payments                                                                     Verify the transactions on your bill including items charged by matching them to your receipts or at least review the list for anything you don’t recognize. Whatever you can’t verify, contact the credit card company to get more information to determine if you need to dispute it or if you have been a victim of Identity Theft. Confirm the payment on the statement with the amount you sent either by check or online bill pay.

 Due date, amount due and minimum payment –

            Hint…the due date is not a suggestion!

Make sure to allow enough time for your payments to be received, processed and clear the bank. If you are mailing your payment you have to allow additional time for it to be received, which is at least a minimum of 7 business days.  Online bill pay usually takes about two days to be posted. The amount due is listed along with the minimum payment. If you pay the minimum or a portion of the balance due, you will incur interest charges. There is a fairly new section on the statement, thanks to the CARD Act, that includes how long it will take to pay off the card balance, if you only make the minimum payments.

 Fees and penalties                                                                                           Look for fees charged by the credit card company such as late fees, interest, and additional penalties. You need to understand the reason you were billed for these and how to avoid them in the future. For example, late fees can added to your bill each time you are late. In addition, the interest rate can increase and possibly double, because you have paid late. The fine print explains how your balance is calculated and how payments are posted.

 Credit line/credit limit and credit available                                                     The bill also lists the credit line/limit that is the maximum you can charge on the card. It also lists the credit available or how much you can charge. This is the difference of your credit limit and the amount you owe. You don’t want surprises on your bill and you need to be aware of the penalties. Your bill contains lots of information, which is mainly in fine print that can be intimidating. Most importantly, don’t ignore you bill; pay it on time and in full if possible.

With the recent explosion of major retailers being hacked for their customers' credit card information, we ALL need to review our statements religiously.