Surveys show that 94.7% of small business owners feel their only lending resources are local banks or personal credit cards. This common sense advice will help you avoid these common business loan mistakes, regardless of your personal credit history... and avoid pledging your personal property as collateral.
First of all, getting approved for a commercial loan is definitely easier than getting personal loans... regardless of your personal credit scores. Additionally, getting the right types of corporate credit is absolutely critical: if you want to protect your personal assets, minimize the risk of a personal lawsuit affecting your business, and to your ability to weather the economic changes that happen overnight.
All business owners must be much more proactive about developing relationships with the right types of lending institutions. You usually want to start your application process with out-of-state, national lenders... not your local or regional banking institutions. National lenders typically won't require a personal guarantee or your social security number.
Follow this simple roadmap to obtain a small business startup loan, a business debt consolidation loan, a bad credit business loan, or a government business loan... although I strongly recommend that you find a commercial loan expert who can help you through the process of building a strong corporate credit rating.
Finding a competent business loan expert will give you a head start on your competition & also let you focus on running your day-to-day activities... instead of dealing with the hassles of establishing a strong business credit rating. An excellent business credit score can help your company's image, overnight. And, finding a small business loan expert isn't that difficult. You just need to know where to look.
Now... let's get started... before you start applying for any business loans!
1. How is your business structured? Is it a sole proprietorship, C-corporation, S-Corporation, Limited-Liability Corporation (LLC), Partnership, or Trust?
2. How long has your business been recognized by your State & Local government?
3. Has your company ever had derogatory information reported against it to either of the two (2) most popular business credit reporting agencies, Dun & Bradstreet or Experian?
4. Are your commercial permits, licenses and registrations current?
5. Does your business have a physical address, or are you trying to use a U.S. Post Office Box instead?
6. Is your business telephone number recognized by directory assistance?
7. Are your incoming telephone calls professionally answered in your business name?
8. Have you established a business checking account?
9. Have you registered & asked for an Employer Identification Number (also known as an EIN) from the IRS?
If your answer to the first question was a sole proprietorship, partnership or trust; I urge you to re-establish your company as a corporation or LLC. I'm not going to provide you with legal advice, but many CPAs and attorneys highly recommend
LLCs (Limited Liability Corporations) as a way of protecting your personal assets & estate... in the event of any lawsuits being filed against your company.
As a sole proprietor, your personal assets are at direct risk of seizure or forfeiture when faced with most types of legal action. Additionally, if you are applying for business loans in a corporation's name... most lending institutions will not require you to provide any personal guarantee!
A corporation can still face difficulties applying for business credit, if it has been in business less than two (2) years or had previous credit problems reported against it. Here are some ways to fix these problems.
- Purchasing a "shelf corporation" or "aged corporation" that's been in good standing with your State government (for longer than 2 years) can drastically improve your chances for small business loan approval.
- You can attempt to repair your business credit rating by writing dispute letters to Experian or Dun & Bradstreet, which isn't always possible.
- Some corporate credit experts will help you find, select & purchase an established "shelf" or "aged" corporation, some of which already have strong credit ratings established... saving you alot of hassles!
I cannot stress this enough... you MUST have a physical address (not a PO Box) if you want to establish a solid business credit rating. The same thing is said for telephone numbers & the way incoming phone calls are handled. Would you lend
money to a company that does not appear to have a physical address or documented telephone number?
And, don't forget to always keep your commercial permits, licenses & registrations current... and always keep copies of these documents in case a potential lender asks for this information.
Business checking accounts are a must. Again, this proves stability to your potential lenders. Here are a couple of tips for you, in case you've had any checking accounts closed by a financial institution. Pay off the outstanding balance (if any) that's being reported by the bank, or open a checking account at a bank or credit union that doesn't use the ChexSystems credit reporting system. Most credit unions don't use ChexSystems, and you can always find a list of banking institutions in your area that don't use ChexSystems... by simply doing a search on Google, Yahoo or MSN.
Small business credit ratings are tracked using your business name, business address and employer identification number (EIN). You can apply for & receive an EIN at the IRS's website (irs.gov). You can also call the IRS, but be prepared for long waits.
Then you'll want to obtain a D-U-N-S number from Dun & Bradstreet, the largest business credit reporting agency. You can apply for this without any fees at Dun & Bradstreet's website (dnb.com), and you'll usually receive this number within
thirty (30) days. Do not apply for this number until you've prepared your self thoroughly, because any information you give to them... goes into your credit file... permanently.
After you've obtained your D-U-N-S number, you're probably ready to start establishing some vendor credit. Vendor credit is where many business owners start establishing business credit ratings. Simply go to staples.com, officemax.com or officedepot.com to get started. Then, you'll also need to fax your business telephone bill & the credit application to them... on your business letterhead (which you can create using your favorite word processing software if you don't have expensive stationery). They usually don't require any personal guarantees (if you've followed the outline above), and you'll usually receive a starting credit line of $750.
This is critical & I repeat... critical! Always pay your invoices before the grace periods begin... especially on unsecured credit cards or vendor credit lines. Dun & Bradstreet will lower your credit score for every day a creditor reports your bill as unpaid while you're within your grace period. Whereas, personal credit scores are not lowered unless you are 30+ days past your due date.
Dun & Bradstreet reports what's known as a Paydex score (your corporate credit score), and a score of 80 is very good... with 100 being the highest score you can achieve. Your Paydex score is issued once you've established a known
vendor/credit relationship with at least five (5) creditors.
There are shortcuts that will help you get much more than $750 alot faster. When using a business credit expert, most small business owners (even startups) can be approved for vendor credit lines of $25,000-$50,000 and open credit lines of
$50,000, $250,000, $500,000 or more... in as little as 45-60 days... by using their knowledge of the application process & "shelf" corporations.
Now, it's your choice. Are you going to go against the grain & try to establish business credit on your own (which could prove costly to your business health, growth & survival)? Or, will you choose to utilize a corporate credit expert... allowing you to remain focused on your daily business needs?
Most business owners make the mistake of trying to do this on their own... usually trying to find grants, investor "angel" money, or falling back onto the "personal credit card sword". Don't be a casualty like the rest. Learn more about how you can use the same tools that informed, educated millionaires have been using for decades.
Showing posts with label Credit Cards. Show all posts
Showing posts with label Credit Cards. Show all posts
Adverse Credit Debt Consolidation Loan to Mitigate Ills of Bad Credit
Loans are one of the best sources to finance your cash needs. UK loan market is filled with infinite number of loan options that aim to meet the diverse needs of borrowers. You too must have taken a number of loans or used credit cards at many occasions. It's good if you have used them wisely and paid them on time. But, if you have defaulted on loan or missed a credit card payment, then your credit report will reveal that you have an adverse credit. An adverse credit is an evil if you don't know how to get out of it. An adverse credit debt consolidation can help in managing your debts effectively and ensures freedom from debts.
First of all, you need to understand the fact that you are not the only one who has an adverse credit. It is estimated that one in four people in the UK would be turned down by a mainstream, high-street lender just because they have adverse credit. Accept the reality that you have an adverse credit but don't get drowned by the fact, try to find the solution. The best way to tackle a solution is to face it boldly and not to run away from it. In such cases, an adverse credit debt consolidation can do wonders for a debtor.
Adverse or bad credit with whatever name you may call it connotes a poor credit rating. The term adverse credit embrace mortgage arrears, defaults, County Court Judgments (CCJs), bankruptcy, Individual Voluntary Agreements (IVAs) and house repossession. A borrower can get his/her credit report from any of the credit rating agencies namely Experian, Equifax and Transunion. Credit report is a report containing details relating to the credit history and current status of a borrower's credit standing. A FICO score of 620 or below is considered to be bad by the lenders. There is risk involved in lending money to people with adverse credit history, because they may make default on payments in future too.
But, the increasing number of default and bankruptcy cases shows that more and more people are getting trapped in the vicious circle of adverse credit. Loan providers now understand the fact that to err is human; a person may miss to make a payment due to some personal financial crisis. Thus, keeping this in mind, lenders offer adverse credit debt consolidation loan to borrowers to keep them away from the stress involved in dealing with a number of lenders.
A borrower can apply for either a secured or an unsecured adverse credit debt consolidation loan. Usually, adverse credit debt consolidation loans are secured loans, which are secured by a borrower's collateral such as a property or a home.
An adverse credit debt consolidation loan works as an effective management tool; it is designed specifically for people with bad credit rating. An adverse credit debt consolidation loan will consolidate all your debts into one manageable and affordable loan at better rates. The lender will deal with all your creditors and you will be accountable to only one low monthly payment on the single loan. You can also look for debt consolidation help and debt counseling services offered by several adverse debt consolidation loan providers. Loan advisors can give you useful advice to help you get out of debts as soon as possible. A borrower with an adverse debt consolidation loan can borrow any amount ranging from £5,000 to £250,000.
Online lenders can offer you better deal than traditional lenders. The process of applying for an online loan is simple and fast. Borrower just needs to fill up a small application form and then the lenders analyse the application form to find the appropriate loan for the loan applicant.
Don't choose the very first loan offer you get. Search for the various lenders and collect loan quotes from them which are available for free or for nominal charges. Loan quotes can be compared on the basis of interest rate, loan term, repayment options, loan amount and the fees charged by the lenders. Thus, predefine the features you are looking for in the loan, this will help you in making smart decision which will prove to be fruitful in the future.
A financial crisis can happen in anybody's life. One may fail to make loan repayments in such circumstances and this may lead to your name getting listed in the books of bad credit. An adverse credit debt consolidation can help you get out of the debt trap. But, what is important is to learn from past mistakes otherwise you will remain ensnared in the vicious circle of debts your whole life.
First of all, you need to understand the fact that you are not the only one who has an adverse credit. It is estimated that one in four people in the UK would be turned down by a mainstream, high-street lender just because they have adverse credit. Accept the reality that you have an adverse credit but don't get drowned by the fact, try to find the solution. The best way to tackle a solution is to face it boldly and not to run away from it. In such cases, an adverse credit debt consolidation can do wonders for a debtor.
Adverse or bad credit with whatever name you may call it connotes a poor credit rating. The term adverse credit embrace mortgage arrears, defaults, County Court Judgments (CCJs), bankruptcy, Individual Voluntary Agreements (IVAs) and house repossession. A borrower can get his/her credit report from any of the credit rating agencies namely Experian, Equifax and Transunion. Credit report is a report containing details relating to the credit history and current status of a borrower's credit standing. A FICO score of 620 or below is considered to be bad by the lenders. There is risk involved in lending money to people with adverse credit history, because they may make default on payments in future too.
But, the increasing number of default and bankruptcy cases shows that more and more people are getting trapped in the vicious circle of adverse credit. Loan providers now understand the fact that to err is human; a person may miss to make a payment due to some personal financial crisis. Thus, keeping this in mind, lenders offer adverse credit debt consolidation loan to borrowers to keep them away from the stress involved in dealing with a number of lenders.
A borrower can apply for either a secured or an unsecured adverse credit debt consolidation loan. Usually, adverse credit debt consolidation loans are secured loans, which are secured by a borrower's collateral such as a property or a home.
An adverse credit debt consolidation loan works as an effective management tool; it is designed specifically for people with bad credit rating. An adverse credit debt consolidation loan will consolidate all your debts into one manageable and affordable loan at better rates. The lender will deal with all your creditors and you will be accountable to only one low monthly payment on the single loan. You can also look for debt consolidation help and debt counseling services offered by several adverse debt consolidation loan providers. Loan advisors can give you useful advice to help you get out of debts as soon as possible. A borrower with an adverse debt consolidation loan can borrow any amount ranging from £5,000 to £250,000.
Online lenders can offer you better deal than traditional lenders. The process of applying for an online loan is simple and fast. Borrower just needs to fill up a small application form and then the lenders analyse the application form to find the appropriate loan for the loan applicant.
Don't choose the very first loan offer you get. Search for the various lenders and collect loan quotes from them which are available for free or for nominal charges. Loan quotes can be compared on the basis of interest rate, loan term, repayment options, loan amount and the fees charged by the lenders. Thus, predefine the features you are looking for in the loan, this will help you in making smart decision which will prove to be fruitful in the future.
A financial crisis can happen in anybody's life. One may fail to make loan repayments in such circumstances and this may lead to your name getting listed in the books of bad credit. An adverse credit debt consolidation can help you get out of the debt trap. But, what is important is to learn from past mistakes otherwise you will remain ensnared in the vicious circle of debts your whole life.
Beating Debt with a Stick
Debt is a Product in America
The #1 sickness in America concerning finances right now is debt. Debt is a product in our culture and it is vigorously aimed at you and me everyday, everywhere. As a society, we borrow more money than the last two generations times two and your online credit report reflects these habits! Some companies like Sears make more profit from their credit department than from all the physical products they sell.
The #1 sickness in America concerning finances right now is debt. Debt is a product in our culture and it is vigorously aimed at you and me everyday, everywhere. As a society, we borrow more money than the last two generations times two and your online credit report reflects these habits! Some companies like Sears make more profit from their credit department than from all the physical products they sell.
But It's the Norm Isn't It?
We are programmed from childhood to make automatic decisions regarding our personal spending habits thus negatively affecting our online credit report. A few 'real world' examples are listed below:
We are programmed from childhood to make automatic decisions regarding our personal spending habits thus negatively affecting our online credit report. A few 'real world' examples are listed below:
- leasing a car instead of paying for it in cash (unheard of right?)
- 90 days same as cash (NOT... really the same in more than 75% of the cases)
- rent-to-own (translation = paying 2, 3, 4 times the actual value of the product)
- 30 year vs. 15 year mortgages (an accepted lengthy and very costly way of purchasing a house)
Penny Pinching is Boring!
Most people today think that to be frugal one must live out of a shack and only make purchases when they are on clearance (or if it's life or death). Well they're only half right. Have you heard the expression "It's the little things that count"? This holds very true when dealing with financial decisions. While large purchases definitely have great effect on one's online credit report as well as their overall situation, it is often the everyday spending habits that accumulate and hold them back from attaining wealth of any sort. What many people fail to realize is that the majority of true millionaires in America (those with net worths exceeding 1 million dollars) got rich from thinking outside the box and not following the crowd. Try thinking a little more about how you handle your money and you might find that you know more than you think you do.
Most people today think that to be frugal one must live out of a shack and only make purchases when they are on clearance (or if it's life or death). Well they're only half right. Have you heard the expression "It's the little things that count"? This holds very true when dealing with financial decisions. While large purchases definitely have great effect on one's online credit report as well as their overall situation, it is often the everyday spending habits that accumulate and hold them back from attaining wealth of any sort. What many people fail to realize is that the majority of true millionaires in America (those with net worths exceeding 1 million dollars) got rich from thinking outside the box and not following the crowd. Try thinking a little more about how you handle your money and you might find that you know more than you think you do.
Summing Up the Debt Sickness Fiasco
A decision as simple as using a debit credit card instead of a credit card shows discipline. Report that paying with cash instead of credit shows that you have properly budgeted your money and it just feels better to own something the day you walk away with it. Your credit report will also reflect these positive actions. Since the average consumer has little control over their own spending habits, the credit report picks up the slack and in turn there are more negative items to show for it. Even statistics show that using cash when making purchases will greatly reduce spending thus causing you to think harder as a consumer before swiping that credit card. Get off to a good start by seeing what is on your online credit report. By removing negative items from your online credit report you can improve your credit rating.
A decision as simple as using a debit credit card instead of a credit card shows discipline. Report that paying with cash instead of credit shows that you have properly budgeted your money and it just feels better to own something the day you walk away with it. Your credit report will also reflect these positive actions. Since the average consumer has little control over their own spending habits, the credit report picks up the slack and in turn there are more negative items to show for it. Even statistics show that using cash when making purchases will greatly reduce spending thus causing you to think harder as a consumer before swiping that credit card. Get off to a good start by seeing what is on your online credit report. By removing negative items from your online credit report you can improve your credit rating.
Acting Smart With Your Credit Card
Whether you own a credit card that offers reward points, a credit card with a low ongoing APR or one with a 0% APR intro rate, it helps - and pays - to act smart with your credit card usage. If and when you own a credit card, it's not just simply a matter of swiping and paying off bills. There are ways to maximize the promotional offers and rewards of your credit card and we're here to teach you how to be a smart credit card owner.
The Zero Percent (0%) APR Intro Rate Credit Card - So, you've been approached by a credit card representative offering you this type of credit card, have you? He made it all sound so simple and wonderful, didn't he? Or maybe, you accidentally came across a credit card website and you found yourself mesmerized with the words zero percent.
Whatever the case, here's the truth about 0% APR intro rate credit cards - it's not what everybody needs. That's right. Even if it does promises to give you 0% APR on your credit card purchases, keep in mind that this is an intro rate we're talking about.
And this means that if the introductory period is over - and the coverage is usually between three to fifteen months, tops - then say bye-bye to your beloved 0% APR and say hello once more to the normal APR for credit cards.
A 0% APR intro rate credit card is best for people who want to transfer their balance from old credit cards and people who are planning to make expensive purchases and are able to pay them off before the introductory offer expires. When shopping for 0% APR intro rate credit cards, remember to ask about the duration of the introductory period, what the APR's going to be after the intro period and if there are any additional fees to be paid.
The Low Ongoing APR Credit Card - If you just want a credit card with a low or lower interest rate but you're not in the mood to buy a Tiffany jewelry set or a yacht then yes, you're better off with a low ongoing APR credit card.
Credit Card Offering Rewards / Reward Points - This is the most popular type of credit card. Although they have higher interest rates compared to other credit card types, if you don't mind paying more on finance charges in the hopes of winning something else later on then this type of credit card is the ideal one for you!
The Zero Percent (0%) APR Intro Rate Credit Card - So, you've been approached by a credit card representative offering you this type of credit card, have you? He made it all sound so simple and wonderful, didn't he? Or maybe, you accidentally came across a credit card website and you found yourself mesmerized with the words zero percent.
Whatever the case, here's the truth about 0% APR intro rate credit cards - it's not what everybody needs. That's right. Even if it does promises to give you 0% APR on your credit card purchases, keep in mind that this is an intro rate we're talking about.
And this means that if the introductory period is over - and the coverage is usually between three to fifteen months, tops - then say bye-bye to your beloved 0% APR and say hello once more to the normal APR for credit cards.
A 0% APR intro rate credit card is best for people who want to transfer their balance from old credit cards and people who are planning to make expensive purchases and are able to pay them off before the introductory offer expires. When shopping for 0% APR intro rate credit cards, remember to ask about the duration of the introductory period, what the APR's going to be after the intro period and if there are any additional fees to be paid.
The Low Ongoing APR Credit Card - If you just want a credit card with a low or lower interest rate but you're not in the mood to buy a Tiffany jewelry set or a yacht then yes, you're better off with a low ongoing APR credit card.
Credit Card Offering Rewards / Reward Points - This is the most popular type of credit card. Although they have higher interest rates compared to other credit card types, if you don't mind paying more on finance charges in the hopes of winning something else later on then this type of credit card is the ideal one for you!
Essential Tips on How to Get a Credit Card
Banks and their marketing associates and divisions are vying with one another to capture a thick slice of the "credit card pie." Offers by phone and mail of free credit cards, pre-approved credit cards, cards with special bonanzas, money back schemes, low introductory rates, and umpteen other perks pour in tempting you everyday.
A credit card is just a form of borrowing that does not come free. Credit terms, interest rates, fees and more can lay a stress on your bank balance. Credit cards are a temptation to spend now and pay later. What invariably happens is that people spend more than they can handle.
Informed consumers must always weigh carefully the pros and cons and compare different options before deciding on a credit card.
Before you decide find out
The advantages of a credit card are that it is a safe alternative to cash. Prevents loss as well as theft of cash. Using a card wisely can build a good credit history which helps when you need a loan or subsidy. It is useful in emergencies like accidents, urgent hospitalization, and unavoidable circumstances like natural calamities and so on. It grants a breather and gives you time to pay the bill. Some memberships offer travel or accident insurance to the card owners at no cost. They also offer privileges like discounts at restaurants, shopping malls, and holiday packages.
The other side is that you can get carried away and live beyond your means, ultimately falling into debt.
To be eligible you need:
A credit card is just a form of borrowing that does not come free. Credit terms, interest rates, fees and more can lay a stress on your bank balance. Credit cards are a temptation to spend now and pay later. What invariably happens is that people spend more than they can handle.
Informed consumers must always weigh carefully the pros and cons and compare different options before deciding on a credit card.
Before you decide find out
The advantages of a credit card are that it is a safe alternative to cash. Prevents loss as well as theft of cash. Using a card wisely can build a good credit history which helps when you need a loan or subsidy. It is useful in emergencies like accidents, urgent hospitalization, and unavoidable circumstances like natural calamities and so on. It grants a breather and gives you time to pay the bill. Some memberships offer travel or accident insurance to the card owners at no cost. They also offer privileges like discounts at restaurants, shopping malls, and holiday packages.
The other side is that you can get carried away and live beyond your means, ultimately falling into debt.
To be eligible you need:
- To be at least 18 years old.
- Have some income or the backing of credit worthy parents.
- Have an operational bank account.
- A telephone.
- A good credit rating. Your monthly expenses must not equal or exceed your income. Ideal expenses must account for approximately 50% of your income.
- To get a Visa or Master card your income must exceed US$ 12,000 a year. Or, you need to apply for a secured credit card where you pay upfront a certain amount of money as security deposit.
Here are a few links that will give information and opportunities to apply for cards online:
- Visa at www.usa.visa.com/?country=us&ep=v_gg_new provides information, gives tips, and has listed a number of financial institutions that offer Visa cards and a wide range of services. One can apply for a card online.
- MasterCard International at www.mastercard.com/index.html is comprehensive with information, advice, and options of choosing and applying for a card online. They have an online form which when filled will give information of which card would be ideal and a channel which provides instant comparison of various card options.
- CreditCards.com at http://www.creditcards.com/ has articles, FAQs, a site map, and online application channels.
- Pick a card because it has the lowest APR.
- Pick a card because all its terms and conditions have been carefully vetted by you. Read the fine print.
- Never pick a card because it is free for a year or life.
- Do not choose a card because it offers a low introductory rate.
- Do not choose a card because it has a cash back policy or great rewards programs.
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