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Need Business Funding? Do You Qualify with the 4 Cs?

Getting a loan for your business is simpler than you might think. You just need to show you're good for the money in one of four ways, often called the 4 Cs of business lending.

First off, there's Cash Flow.

If your business has money coming in regularly, showing you can keep the lights on and then some lenders will see you as a safe bet. 

It's like proving you've got a steady paycheck that can cover the bills, which could make you eligible for various funding programs.

But if cash isn't flowing freely, don't sweat it. Your next option is Collateral. This means you've got something of value, like equipment or inventory, that lenders can use as a safety net. It's akin to saying, "If I can't pay you back in cash, I've got something else you can use to make up for it."

Now, if your cash flow is more of a slow drip and you're light on assets, your Business Credit can come to the rescue. This is all about your business's track record with money. A solid business credit score tells lenders you're trustworthy, sort of like having a good reputation in the community.

Lastly, if you're just starting and the first three Cs are out of reach, there's still hope with your Personal Credit. This is where your own financial history comes into play. If you've been responsible with your money, lenders might be willing to take a chance on you based on your personal creditworthiness alone.

So, whether it's through your business's cash flow, your assets, how well you've handled money in the past, or even your personal financial history, you've got a shot at securing the funds you need. Just one of these four keys can unlock the door to the financing your business needs to grow.

About the Author

Robert Jackson is currently the CEO of Alln4fam Consulting Inc. 

At Alln4fam Consulting, he specializes in helping business owners establish excellent business credit scores and then leverage those scores to access cash and credit for their businesses.

For more information on business credit scoring, business credit, visit: https://alln4businesscredit.com/

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What's Your Business's Bank Rating?

When it comes to bank credit, consider it the amount of money your business can borrow from banks. 

To rate the creditworthiness of a business, banks use their own bank ratings. This is basically the bank's way of giving your business a grade on how trustworthy it is with money.

To get your business credit moving quickly, you'll want at least one bank to vouch for you and keep a pretty healthy chunk of change in your account—at least $10,000 on average over the last three months.

What banks are REALLY looking for is whether you can keep that $10,000 average. Hitting this mark gives your business what's called a Low-5 Bank Rating. This means you've got between $5,000 and $30,000 in the bank on any given day.

If your balance dips between $7,000 and $9,999, your rating drops to a High-4, making banks think twice before lending you money. It's like walking into a bank with a less shiny credit badge.

Here's a quick rundown of the bank rating scale to see where you stand:

High 5, account balance of $70,000 – 99,999

• High 5: Your account balances are between $70,000 and $99,999.

• Mid 5: You're rocking a balance of $40,000 to $69,999.

• Low 5: Your daily balance is $10,000 to $39,999.

• High 4: It's a bit lower here, with $7,000 to $9,999.

• Mid 4: You're at $4,000 to $6,999.

• Low 4: And the lowest tier, with $1,000 to $3,999.

Keeping your bank account healthy looks good on paper and sets you up for success when borrowing more money from the bank. It's like showing up to a marathon in shape—you're just more likely to get to the finish line or, in this case, get the financing you need.

About the Author

Robert Jackson is currently the CEO of Alln4fam Consulting Inc. 

At Alln4fam Consulting, he specializes in helping business owners establish excellent business credit scores and then leverage those scores to access cash and credit for their businesses.

For more information on business credit scoring, business credit, visit: https://alln4businesscredit.com/

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What Are Your Sources for Business Funding?

Finding the right funding for your business might seem like finding a needle in a haystack, but there are plenty of options out there if you know where to look.

Business charge and credit cards offer a straightforward and flexible solution for immediate financial needs. They act as a reliable financial toolkit for various business expenses, often with the advantage of approval for limits reaching $10,000 or more.

For those who find traditional banking routes less accessible, angel investors can be a beacon of support. These individuals are like the silent benefactors of the entrepreneurial world, funding upwards of 30,000 small businesses annually. 

With a substantial network of over 250,000 active angels, platforms like www.angelinvestmentnetwork.us or www.funded.com can help you connect with them. They are a good choice if you need more money than banks are willing to lend.

If your business has valuable assets like invoices, inventory, equipment, or real estate, you can use asset-based funding. This type of funding allows you to borrow money using these assets as Collateral, even if you don't have a high credit score.

Bank loans are another option, though they may be harder to get. Small community banks or credit unions might be more approachable for getting an SBA loan.

Equipment leasing is useful if you need expensive equipment but don't want to buy it outright. You can also borrow money against equipment you already own.

Factoring is a way to get quick cash if you have a lot of unpaid invoices. You sell these invoices to a factoring company at a discount, and they give you cash up front. This option is helpful because it doesn't depend on your personal credit score.

These options provide various ways to secure funding for your business, whether through credit, investors, leveraging assets, bank loans, leasing, or factoring.

Securing funding for your business is essential, and thankfully, there are several ways to do it.

Government grants stand out as an attractive choice because they offer money that doesn't need to be paid back. It's like receiving a gift to support your business. You can hunt for these grants on federal websites such as www.grants.gov and www.grantwatch.com, and it's wise to also check out what your state and city have to offer.

Lines of Credit are akin to a more powerful version of a business credit card but with the perks of lower interest rates and the ability to access substantial amounts, sometimes over $150,000. This option allows you to tap into funds as needed, whether for purchases or direct payments via checks or a debit card.

Merchant Cash Advances and Lines of Credit can be a game-changer for businesses that handle a lot of credit card transactions. This financing method advances money based on future sales, providing a flexible way to manage cash flow with the convenience of a debit card for accessing the funds.

Microfinance Loans are the underdogs of the financing world, offering a more straightforward and quicker route to funds. With loans ranging from $500 to $35,000, they are a practical option for businesses that might struggle to secure larger loans, allowing easier access to capital.

SBA-backed Loans are a cornerstone for small business financing. With the Small Business Administration backing a portion of these loans, it reduces the risk for lenders, making it more likely for businesses to get the financial support they need. This backing makes banks more inclined to extend credit, offering a lifeline to many small businesses.

Venture Capital is another avenue requiring more effort and time to secure. 

This option is suitable for businesses that need significant funding and are open to exchanging a portion of their company's equity. Venture capital can provide substantial financial backing, but it's important to be prepared for the potential trade-offs.

Knowing what you're looking for makes finding the right financing option easier. Each option offers a different approach to securing the funds you need for your business.

About the Author

Robert Jackson is currently the CEO of Alln4fam Consulting Inc. 

At Alln4fam Consulting, he specializes in helping business owners establish excellent business credit scores and then leverage those scores to access cash and credit for their businesses.

For more information on business credit scoring, business credit, visit: https://alln4businesscredit.com/

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3 Key Differences between Personal Credit Scores and Business Credit Scores

When it comes to understanding the differences between personal and business credit scores, there are a few key distinctions that really stand out.

First, the timeframe each score considers when evaluating the risk of default is different. 

A business credit score looks at the likelihood of a business being 90 days late on a payment within the upcoming year. 

On the other hand, a personal credit score extends that evaluation period to the next 24 months for an individual.

Then, there's what each score actually signifies.  A personal credit score is all about assessing an individual's chance of failing to meet their financial obligations. It's personal, tied directly to how you handle your finances. 

In contrast, a business credit score zeros in on the business's financial behavior, not the personal payment habits of the business owner. It's an important distinction because it means that a business's creditworthiness is judged on its own merit, separate from the owner's financial actions.

Another major key difference is the scoring range. 

Personal credit scores have a broader range, typically from 350 to 850, with 850 being the pinnacle of creditworthiness. 

Business credit scores, however, operate on a much narrower scale, from 0 to 100, where 100 represents the highest level of credit reliability.

These 3 key differences show how financial trustworthiness is measured in the personal and business scoring.

About the Author

Robert Jackson is currently the CEO of Alln4fam Consulting Inc. 

At Alln4fam Consulting, he specializes in helping business owners establish excellent business credit scores and then leverage those scores to access cash and credit for their businesses.

For more information on business credit scoring, business credit, visit: https://alln4businesscredit.com/

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What are the Benefits of Having a Good Business Credit Profile?

Building a solid business credit profile opens the door to securing up to $50,000 or more. This capability significantly expands your financial resources, enabling strategic investments and operations.

Now, think about the big players, the Fortune 500 companies. They don't use business credit because they're short on cash.

No, they use it as a strategic tool, a bit like a chess piece that you move to get an advantage on the board to push the business forward and solidify its presence in the market.

Business credit is often overlooked, yet it's incredibly useful.  Surprisingly, over 90% of business owners are unaware of its benefits and how business credit scores work.

When you start using business credit, it's straightforward to get funding for your company. This is because lenders look at your business's credit instead of your personal credit. 

If you've had personal credit issues, you can still get business loans. Even with good personal credit, using business credit means you can borrow more money.

One key advantage is that some business loans don't require you to provide a personal guarantee if you can't pay back the loan. This protects your personal assets like your home or savings if your business can't pay its debts.

Strong business credit also makes your business look more reliable to others, such as partners, investors, or potential buyers. This can make your business more attractive to work with or invest in.

In essence, business credit makes getting money for your business easier, allows you to borrow more, and protects your personal assets from business debts. It also improves how others see your business.

Your business's creditworthiness is evaluated independently of your personal finances.

Lastly, knowing you can access working capital when needed brings peace of mind. And that’s priceless. It allows you to focus on confidently running your business, knowing you're prepared for whatever comes your way.

About the Author

Robert Jackson is currently the CEO of Alln4fam Consulting Inc. 

At Alln4fam Consulting, he specializes in helping business owners establish excellent business credit scores and then leverage those scores to access cash and credit for their businesses.

For more information on business credit scoring, business credit, visit: https://alln4businesscredit.com/

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Secure Your Business Credit with these 5 Cs

When getting a business loan, lenders look at the "5 Cs" of business credit. Let's explain them so you can understand how to use them to your advantage:

• Character

• Capital

• Capacity

• Collateral

• Conditions

Character: This is basically what lenders think about you. Do you have a history of paying bills? 

on time? Are you someone they can trust? It's not just about numbers; it's about your reputation. 

That's why having a good relationship with your bank helps. They know you better, and that can work in your favor.

Capital: This is about how much money you've put into your business from your own pocket. Lenders like to see that you've invested your own cash because it shows you really believe in your business. It's like saying, "I believe in this so much that I put my own money on the line." That kind of confidence can make lenders more willing to invest in you, too.

Capacity: This is about your business's ability to repay the loan. Lenders will examine your business's income and expenses to ensure you can handle the loan payments. They want to see that you're making enough money to cover your costs and still pay them back.

Collateral: Think of collateral as a safety net for the lender. You agree the lender can take something of value—like equipment, inventory, or even your house—if you can't pay back the loan. Having collateral can make it easier to get a loan because it lowers the risk for the lender.

Conditions: This is about the big picture—things like the economy, how well your industry is doing, and what you plan to use the loan for. Some things might be out of your control, like a downturn in the economy. But lenders will consider these conditions to decide how risky your loan might be.

The 5 Cs formula is simple. Lenders want to know who they're lending to (Character), that you're committed to your business (Capital), that your business can pay back the loan (Capacity), that there's a backup plan if things don't go as expected (Collateral), and that external factors won't make it hard for you to repay (Conditions).

Understanding these 5 Cs can help you see what lenders are looking for and improve your chances of getting approval.

About the Author

Robert Jackson is currently the CEO of Alln4fam Consulting Inc. 

At Alln4fam Consulting, he specializes in helping business owners establish excellent business credit scores and then leverage those scores to access cash and credit for their businesses.

For more information on business credit scoring, business credit, visit: https://alln4businesscredit.com/

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Turn Business Credit Denials into Approvals

If your business loan application was denied, you're not alone—about one-third of applications are rejected. But there's hope and steps you can take to improve your chances next time. 

Here's how to turn things around in your favor:

• Analyze your business profits. Higher profits increase your chances of loan approval. Therefore, look for ways to boost profits by cutting unnecessary expenses and streamlining operations. This will make your business more attractive to lenders, minimizing the chances of denial.

• Evaluate your assets and liabilities. A balanced sheet is essential. If you carry too much debt compared to your assets, it's time to address this imbalance to make your business more appealing to lenders. Lenders might see your business as a risk if you owe more than what you have in assets. Work on balancing or reducing your debts.

• Review your payment history and credit profile. Lenders consider how you've managed past obligations. If you've been denied credit, closely examine your business credit score and payment history. Remember, most credit information is reported for only 2-3 years, so past mistakes can be mitigated by maintaining a positive payment track record and ensuring your credit information is accurate.

• Lenders look at how you've managed your debts. If you've been denied, check your credit score and history. Since credit bureaus typically report for only 2-3 years, a few positive changes can improve your standing.

• Maintain healthy bank balances—your business bank account balance matters. Low balances can be a red flag for lenders. Aim to keep at least $10,000 in your business accounts to demonstrate financial stability.

In a nutshell, a denial indicates that lenders view your business as risky. However, it isn't the end of the road.

Understanding where the concerns lie and taking corrective action can improve your business's financial health and creditworthiness.

If a lack of credit history is an issue, build a solid credit profile. 

Identifying and correcting these issues can improve your business's financial health and increase your chances of getting approved.

About the Author

Robert Jackson is currently the CEO of Alln4fam Consulting Inc. 

At Alln4fam Consulting, he specializes in helping business owners establish excellent business credit scores and then leverage those scores to access cash and credit for their businesses.

For more information on business credit scoring, business credit, visit: https://alln4businesscredit.com/

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5 Key Factors Affecting Your Business Credit

What exactly influences your business credit score? And how can you improve your chances of securing a loan? Let's break down the five key factors that impact your business credit so you can optimize them for your benefit:

• PaymentHistory:This is a cornerstone of your business credit profile, especially your D&B PAYDEX score. What can you do? Pay your bills on time or even early to show lenders you're reliable. This positive payment history reassures vendors and lenders about your creditworthiness. So, to improve your chances of getting credit, consistently pay your bills on time or ahead of schedule.

• BlanketUCCFilings:When you take out certain loans, lenders might file a UCC (Uniform Commercial Code) filing against your assets. A blanket UCC filing means a lender claims an interest in all your assets, which can limit your ability to secure more credit. What can you do? Plan your credit strategy carefully. If possible, negotiate with lenders to exclude specific assets from blanket UCC filings if you need them as collateral for future loans. Alternatively, consider securing loans or accounts that require specific UCC filings simultaneously to avoid one having precedence over the others. 

• CompanyFinancials:Keeping your financial information current on your D&B credit file is vital. This is because the outdated financials can negatively impact your business when lenders review your data. What can you do? Regularly update your financial statements to reflect your current situation accurately. This transparency ensures lenders have the most up-to-date picture of your business's financial health, increasing your credibility.

• Company Legal Structure: The structure of your business (LLC, corporation, partnership, sole proprietorship) influences your ability to secure credit. Lenders prefer working with corporations and limited liability companies (LLCs) over sole proprietorships and partnerships. What can you do? If you are not already incorporated, you should be. This way, it will be easier to obtain credit and benefits, such as liability protection and potential tax advantages. 

• Debt and Investment Levels: The amount of debt your business carries and how much you're financially invested in your company also affect your creditworthiness. Lenders will look at your debt-to-income ratio and your equity in the business to assess risk. What can you do? Maintain a healthy balance between debt and investment to show lenders that you manage your finances responsibly. Optimize these five key factors to enhance your business credit score and improve your likelihood of approval. 

About the Author

Robert Jackson is currently the CEO of Alln4fam Consulting Inc. 

At Alln4fam Consulting, he specializes in helping business owners establish excellent business credit scores and then leverage those scores to access cash and credit for their businesses.

For more information on business credit scoring, business credit, visit: https://alln4businesscredit.com/

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Are You Falling for These Business Credit Myths? 

Business credit can be confusing, especially when you compare it to personal credit, which most of us are more familiar with. This article debunks some prevalent myths surrounding business credit so you can get a clearer picture of it. Here's the real deal on some myths you might have heard.

Myth#1:Business Credit and Personal Credit Are the Same 

You might think business credit works like your credit score, but that's not entirely true. Yes, both types of credit keep track of how reliable you are with money, but there are significant differences in how they're managed and corrected when there's a mistake. For example, fixing an error on your credit report can be a real headache and sometimes unfair. 

There have been cases where credit bureaus didn't fix errors even after being told to by a court. Business credit, on the other hand, is a bit friendlier. Mistakes are less common and more accessible to fix when they do happen. The business credit system is designed to be more equitable, not inherently biased against businesses or consumers. It generally exhibits a lower incidence of errors, and when mistakes do occur, rectifying them tends to be a more straightforward process.

Myth#2: Using Personal Credit for Business Purposes is Harmless 

Some people think using their credit cards or loans for their business is no big deal. But this can lead to trouble. If you use your personal credit for business expenses, you might max out your credit lines and not have enough credit available for personal use or emergencies. Plus, you could be stuck if your business needs more credit than you can get personally. Mixing personal and business credit can make things messy for your personal finances and your business's growth, which is not a good idea.

Myth#3:Business Credit and Personal Credit Are Not Related

While keeping your business and personal credit separate is best, they're not entirely unrelated. Particularly in the early stages of establishing business credit, it's not uncommon for business owners to provide personal guarantees for business loans or credit lines. This means that if your business can't pay back the loan, you're on the hook, and it could hurt your personal credit. Even though the business loan doesn't show up on your personal credit report, any problems with paying it back can affect your personal credit score. Therefore, careful planning and wise use of business credit can help you avoid this scenario.

About the Author

Robert Jackson is currently the CEO of Alln4fam Consulting Inc. 

At Alln4fam Consulting, he specializes in helping business owners establish excellent business credit scores and then leverage those scores to access cash and credit for their businesses.

For more information on business credit scoring, business credit, visit: https://alln4businesscredit.com/

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The Dun and Bradstreet PAYDEX Business Credit Score

The PAYDEX score, created by Dun and Bradstreet, is a critical business credit score. 

It measures how risky it is to lend money to a business, similar to how a personal credit score evaluates the risk of lending money to an individual.

According to Dun & Bradstreet, the PAYDEX Score is a unique numerical indicator that weighs how promptly a firm pays its bills over the past year based on trade experiences reported by various vendors. It essentially serves as the business equivalent of a personal credit score.

There are significant distinctions between a business PAYDEX credit score and an individual FICO consumer credit score. 

While consumer FICO scores range from 350 to 850, the PAYDEX Score ranges from 0 to 100, with 100 being the highest achievable score.

Individual credit scores consider various factors.

However, the PAYDEX score is solely based on whether a business makes timely payments to its suppliers and creditors within agreed-upon terms.

Most lenders and suppliers prefer a PAYDEX score of 70 or higher, with scores of 80 or above considered very good. 

Maintaining a positive PAYDEX score is crucial for establishing new credit and increasing credit limits beyond $100,000 for business owners.

Establishing a positive PAYDEX credit score can be accomplished within 60 days. 

Firstly, apply for a DUNS Number—a nine-digit business identifier with Dun and Bradstreet. 

Once you have a DUNS number, seek out merchants willing to extend credit and report it to Dun and Bradstreet.

First, make sure you have a good credit report with Dun and Bradstreet to improve your business credit. This will give you a good PAYDEX score. 

Next, get more credit for your business and use it regularly. 

Always pay your bills before they are due to increase your score to 80 or above. Doing this can help you quickly get a good PAYDEX score. 

Keep paying your bills on time, and your score will increase. This will help you get more credit in your business's name.

About the Author

Robert Jackson is currently the CEO of Alln4fam Consulting Inc. 

At Alln4fam Consulting, he specializes in helping business owners establish excellent business credit scores and then leverage those scores to access cash and credit for their businesses.

For more information on business credit scoring,businesscredit, visit: https://alln4businesscredit.com/