Hard credit pull
If you want to successfully manage your business finances, you must manage your business credit. In order to do this, it is good to know how credit is calculated, what a soft versus hard credit pull is, and more. The following is a look at hard credit pulls, and what they mean for a business:
Important things to understand about financing through credit cards
Cash flow shortages are bound to happen from time to time. How will you deal with these cash flow shortages? Do you have anything that can help you to get by? Having some cash reserves set aside for your business will allow you to rely on them in times of financial hardship and need. With so many struggling small businesses out there, having something to fall back on has proven more important than ever. One of the ways in which you can help to finance your business for a time is to use small business credit cards. Credit cards give you a great opportunity to fall back on something and if you use the right credit cards you can get one that comes with rewards and 0% interest. This will easily help you run your business without worry and you can get back to focusing on brining in money.
How to determine if your customer is credit-worthy
One of the major steps in managing your business finances is determining your credit policy. Whether extended to new or existing customers, you need to have a credit policy in place. It is important to understand that the simplest customer credit policy has two basic points:
How to solve cash flow problems, with invoice factoring
Many businesses experience a number of cash flow problems as their customers do not pay on time and they end up struggling to pay their vendors as they have to money. Cash flow problems can lead to so many issues that it can be frustrating for small business owners to survive. If you are sick of struggling with your cash flow problems and you would like to feel comfortable with your business for a change, invoice factoring may be the solution you are seeking.
Accounts payables procedures
At the successful end of any business is a strong accounts payables and accounts receivables procedure. You need to be able to set up accounts payables in a manner that is easy for you to actually adhere to. Not all of the vendors out there are willing to negotiate better payment terms and many of them are not willing to extend payment terms so you must be able to collect the funds from your customers in a timely manner in order to actually have the money to pay your bills on time.
Your business credit profile
A good business credit profile is essential for any business that needs a loan or any other type of credit. This article discusses what a business credit profile is, how a business can establish one, and how a business owner can manage the business' credit profile.
Establishing good business credit
One of the best business finance tactics is for a business owner to establish good business credit. When a business establishes good business credit they are able to get the business loans and the credit they need to build a successful business. This article talks about six things that a business owner needs to do to establish good business credit.
Just say no to preapproved credit
Everybody has been a victim of preapproved credit offers, whether it is in the mail or over the phone. One of the worst things about preapproved credit offers is that they are something that an identity thief can use to steal your identity. All the identity thief has to do is steal the preapproved credit offer out of your mailbox, which you would never even notice because it is just junk mail.
Do you need credit card insurance?
Credit card insurance is called a variety of different things by credit card companies, but no matter what it is called, it is designed to do the same. Credit card insurance is there to provide you with a sense of security just in case something happens. For example, if you are suddenly unemployed and can no longer make the monthly payment on your credit card having credit card insurance can help you. What the credit card insurance does is put your credit card payments on hold for a certain period. The credit card insurance will also suspend the interest, which means you will not have to pay any more interest until the time period has expired. By allowing you to suspend payments, you can keep your credit intact during a rough time in your life.
What to do when you can't collect on your accounts receivable?
One of the major frustrations to running a business can be the collections process.If you have accounts receivables that you cannot collect on then what you have is money you cannot access.Small businesses especially cannot afford to have uncollected accounts receivables and often face the difficulty of collections.However financial experts advise that if you have a clear and concise system of managing your accounts receivables you can avoid many of the pitfalls and problems that lead to collections.
Business credit, ins and outs
Credit is what makes the business world go around and it's very important for you to run your small business well.Many people don't take advantage of the credit that they have available to them, and others don't use credit in the right ways.Understanding how to use credit as a business tool can really help you make the most of the opportunities available to you.Here is some more info about the ins and out of business credit to help you understand how to use credit to your best benefit.
Business credit card pros and cons
If you have a business, no doubt you have gotten business credit card offers in the mail or seen commercials advertising them on TV. Cash back, rewards, frequent flier miles, and low interest rates are all enticing offers designed to get small business owners to sign up for their business credit cards.
If you are seriously considering a business credit card, it is important that you know the advantages of one as well as the risks.
Some of the pros of a business credit card include:
Continue reading "Business credit card pros and cons"B2B credit
Credit is an important part of finances. A good credit score and credit history helps open doors to you and allows you to get more credit, but poor or no credit can be harmful and difficult to repair or obtain.
But it's not just consumers who need to establish and maintain good credit. Businesses need it as well.
Continue reading "B2B credit"Tips for extending or not extending credit to your customers
When you are deciding to extend credit to your customers, it is important to understand that you will be taking on additional risk. If you have a high credit screening process you may be able to limit your risk. When a customer demonstrates the ability to properly handle their credit, it is much easier to trust them with a line of credit.
Some companies offer lines of credit to everyone that walks in the door. This is a highly risky procedure because not everyone will pay you back in a timely manner. You need to be picky about the people you extend credit to because it can prevent bigger problems from occurring. Here are the 3 common ways to extend credit to your customers:
Continue reading "Tips for extending or not extending credit to your customers"How to take advantage of extending customers credit
Giving your customers that option of paying with credit can bring in a bigger customer base, but it can also be the death of many businesses.There are some ways that you can take advantage of extending customers credit, you just have to be smart about it.
A great idea for your business is to have the option of accepting major credit cards.Through your bank or through a merchant credit card processing company you can get the equipment you need.This gives customers the convenience of using plastic in your store, but you don't have to be the one the offers them the credit.
Continue reading "How to take advantage of extending customers credit"What criteria do credit companies use to rate credit worthiness?
Knowing your credit score is important, as it is what determines if you can get loans, and the much needed funding to run your business. Your credit worthiness is what determines your score. So, if your score needs improving, or you want to have an idea of how credit worth you are, you need to know what criteria credit companies use to rate credit worthiness.
What criteria do credit companies use to rate credit worthiness?
The answer to this question is simply that there are a number items, or in other words, financial information, that is used to rate credit worthiness. And it will vary from credit company to credit company, however, there are a few that each company uses. The following are a few of the most widely used types of information used to rate credit worthiness:
How to check (and fix) your company's credit rating
If you are a business seeking loans and customers then your credit rating is very important. It tells people a lot about your business. Banks and such will determine a lot by analyzing your credit report. They will determine whether or not they can trust you and want to give you money by reading your credit report.
If you have a good credit report then banks will want to lend you money. They will see that you are responsible with money and that you pay it back when you should. They will know that you can be trusted with money because they will be able to view your past creditors and see how well you paid them back. They will decide a lot off of your credit report.
Continue reading "How to check (and fix) your company's credit rating"How to Get a Line of Credit
For small businesses that are starting out and in the process of developingm it is important that they get a line of credit. The expenses for staring out a business can be huge and it is almost impossible to pull that from the pocket unless you are very wealthy and are bored with life so you started a small business because you had the urge to. This of course is rare.
There are tons of expenses from salaries and rent to advertising and utilities. There are countless things to consider and countless things that are not thought of until you already have your business up and running. Because there are so many expenses and it is hard to come by money with out working your tail off, and even then you may find it impossible at first to make ends meet. A line of credit could be a great idea for you.
Continue reading "How to Get a Line of Credit"Separating Business and Personal Credit Cards
If you have your own business you know that there are lots of expenses involved. There are a lot of things you need to buy besides the things that will actually be a part of the building your business runs in.
There are small things here and there that require you to put money on your credit card or out of your checkbook to pay for them, such as paper for a printer, or the snacks for a board meeting. If this is the case it would probably be a great idea for you to get a specific business credit card so that you can separate your business credit card from your personal credit card.
Continue reading "Separating Business and Personal Credit Cards"Financing your company on credit cards? There is a better way.
Financing your company in other ways than that with credit cards is very possible. Some options might be, factoring, mezzanine financing, asset based lending, purchase order financing last but not least family and friends.
Seeing first hand the challenges facing the small business community and knowing that entrepreneurs need more than just cash to grow their business, there have been many options come available to help businesses grow.
How do I decide whether to offer credit to a specific customer?
Having a standard policy that applies to all customers is a good idea for any business when deciding when to offer credit. But each customer's specific needs could influence your decision as well as your general policy.As always a decisions about offering credit must begin with a credit score and report. But what if your best customer, some one who loves your product and really wants it, has a lower score? Should you make exceptions to the standard rules?
This decision can get you in trouble with the Equal Credit Opportunity Act which prohibits the use of race, religion, gender, marital status, birthplace, or because an applicant receives income from a public assistance program in determining credit approval. If you start making exceptions to your standard rules you could find your self in a serious lawsuit for up to $500,000 or one percent of your business's net worth, whichever is less. It can get costly to make exceptions.
What criteria do credit companies use to rate credit worthiness
If you are interested in getting some kind of credit from a company, it is most likely that you will go under some kind of credit evaluation.There are a lot of different things that can be considered during the credit evaluation process.You will want to be aware of these criteria to help you get a better idea of if you have a good chance of obtaining credit.Here are some of the criteria that credit companies use to rate credit worthiness:
Extending credit what you need to know
There is a chance that you will need to extend credit to your clients and customers at times so that you can get good business.Extending credit can sometimes be a good thing, because it can forge a bond of trust between you and your clients, which can ensure that your clients will use you in the future again!However, there are a lot of things that you should know if you decide to extend credit.Here are some helpful things to know:
How to start a second separate credit file?
How to start a second credit file? You can legally start a second separate credit file, namely if you are operating a home business. There are some very important steps to follow however.
A second separate credit file would need to be a business credit file. Your own credit file that is the original file is created and identified by your social security number. When you start a business credit file, you use the business name and business assigned identification number.
You will be starting this business credit file as you would your own credit file. The main thing to remember is that you are still responsible for everything in this file.
Continue reading "How to start a second separate credit file?"How to evaluate and raise your credit score?
How to evaluate and raise your credit score? Your credit score determines many ways you receive credit. A credit card is one item, a car purchase is a second, a home mortgage is a third, debt consolidation loans fourth etc. Your credit score determines your interest rate also.
The American credit scores are basically the following:
499 and below is 1 percent
500-549 is5 percent
550-599 is 7 percent
600-649 is11 percent
650 -699 is16 percent
700-749 is20 percent
750-799 is29 percent
800 and above is31 percent
A score of 720 or higher will probably get the best interest rate for your loan,
Continue reading "How to evaluate and raise your credit score?"What you should know about small business credit cards
One of the biggest obstacles most people face when it comes to starting a business is funding. Starting a small business usually requires start-up costs in the thousands, and many people don't have the necessary funds already sitting in their bank accounts to start up a business.
The benefits of a business credit card
There are many benefits of why a business owner should have a credit card.Many do not have a business credit card for various reasons, but knowing the benefits will most likely change your mind if you are thinking about getting one.
A business credit card works like an individually-owned card but there are a few perks. They include a lower APR, more flexibility in the credit limit, and other benefits that individual bank card holders don't always get. Business establishments can benefit greatly from using these cards, here a few reasons why.
Continue reading "The benefits of a business credit card"A look at business lines of credit lenders
There are many lenders out there willing to give qualified businesses a business line of credit. Of course the rates, line amounts, and terms are going to vary from lender to lender, and will be based more on your company qualifications then on the lenders themselves.
If you want to get the best rates possible, and to get higher funding amounts, it is a good idea to use a business credit consultant before applying. They can help you get your business in a position to qualify, and can help you find the best lender possible.A business credit consultant can line you up with the best lender for you, and help you get in a position to receive the best line of credit possible. Different lenders are better for different companies than other lenders, so you need to find the lender best for you, and the best way to do this is to get help from someone who knows lenders.
Continue reading "A look at business lines of credit lenders"Choosing the right unsecured credit cards
There are several unsecured loans available. Some of these loans come as lines of credit, others as straight loans, but an unsecured credit card is a whole different ball game. Basically an unsecured credit card is only issued to those who have a good credit history and have demonstrated an ability to repay the accrued debt on time. This means if you want an unsecured credit card for your business, your business better have some credit history.
Your credit limit on an unsecured credit card is determined in an individual basis and can be lowered or raised based on your performance.
Choosing an unsecured credit card that fits your needs takes time. An unsecured credit card is very similar to a pre-approved loan, but the rates will be higher, and you won't get as much funding, so you may want to consider other options for your business financing needs.
Continue reading "Choosing the right unsecured credit cards"Are business credit cards a good idea?
A business credit card is something every business should have. Why? Is it to fund your company needs? Is it to pay your payroll? No, a business credit card should be used for one thing, to establish legitimacy and credit for your business.
If you are going to use a credit card to finance any part of your business, a business credit card, not a personal credit card is the way to go. However, using a credit card to finance a business is a horrible idea. There are much better loan options out there that will cost you much less. Of course, they are harder to qualify for than a business credit card, but the savings are worth it.
Business credit cards are definitely an option as far as a way to secure cash and purchase necessary supplies for your company, and can be used if you are in a tight spot, but should not be used to buy things for your business unless you know you can pay them off. Why? The rates are insane, and will cost your business far too much.
Pros and cons of business unsecured lines of credit
Do you know what the pros and cons are of business unsecured lines of credit? Many businesses are unsure of the bank loans they are taking out and a bank is always ready to loan you money! What factors are taken into effect when you are looking at financing your business with an unsecured line of credit? Let's look at a few things you need to know aboutthe pros and cons of business unsecured lines of credit.
You need to be aware that unsecured credit loans need a decent credit score. An unsecured credit loan is given without any collateral so you need to be sure your credit score is worthy of obtaining enough money for your business and it is a good score so you can obtain a proper rate.
How to bolster your business credit score
If you are a business owner, chances are you should know about Paydex and your business credit score. The great thing about your business is it not only builds credit to you individually, but it builds credit to your business as well. Like a Paydex score, your business credit score will play an important role in obtaining loans, forming partnerships, and many other financial matters.
Business credit bureaus gather information about your credit transactions and compile the information to form your company's business credit report. This report will determine if banks want to grant your credit and just how much credit they will be willing to give you.
So how can you increase your business credit score? There are many different factors that can affect your business credit score. Your score is ranged from a 0 to 100 with anything above a 75 being a high score. Your business credit score can be affected by the amount of available credit you have on your bank loans and credit cards. As well as the length of time you have had a credit profile and the amount of inquiry's made on your account.
Continue reading "How to bolster your business credit score"The low down on unsecured lines of credit and unsecured loans for businesses
There are a number of things that you need to know about business financing and which type of loans that you are going to apply for, including the difference between unsecured and secured lines of credit and loans for your business.
One of the most basic decisions when it comes to taking out a new loan, is whether to opt of a secured or an unsecured loan. Before we discuss the advantages and disadvantages, you should know that a secured loan means that if you cannot meet the repayments, the lender has access to an agreed security, such as your home or car, to pay off the loan.
This is the huge draw back of secured loans. The asset they are secured over is usually very important to the borrower. For most people, the two most important assets they own, and are least willing to part with, are their home and their car. Your home can act as security whether it is currently mortgaged or not. The size of the loan will also depend on, among various other factors, the value of the asset. For example, if you home is worth £50,000 it is extremely unlikely that a lender will grant you a loan of £60,000. At the same time, just because you have significant assets to secure the loan, does not mean the lender will lend you the full value of the asset. Factors such as your income, your current indebtedness, and your repayment capacity will also be critical.
Continue reading "The low down on unsecured lines of credit and unsecured loans for businesses"How to get a business credit score
We've all heard about how a few years ago, Congress passed a law saying that all individuals are entitled to a free credit report once a year from each of the three major credit agencies.Now, once a year you can go online, put in your personal information, and get a free credit report so that you know just where your personal credit stands.However, what about your business?
Just like individuals, businesses also have credit ratings.It is important that you know what your business' credit score is so that you know how you will fare when you apply for loans or equipment rentals.Knowing your business credit score will also help you know how high or how low your rates will end up being.However, it's not quite as easy to get a business credit score as it is to get an individual's credit score, because there aren't any laws that have been passed for business credit scores like there have been for individual credit scores.
Continue reading "How to get a business credit score"Advantages of business credit cards for rates and terms
Business credit cards are easier to obtain than traditional lines of credit. Many companies have business credit cards as they can help the needs of the business to conserve cash while still purchasing necessary supplies that allow for growth in the company. Just like personal credit cards, business credit cards must be used cautiously.
Credit card rates tend to vary for business credit cards. Typically, there is an annual fee involved but it comes with many benefits such as:
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- Higher credit limits. Most business credit cards carry limits of $50,000 or more. This is great for businesses that need to make large purchases.
Using unsecured lines of credit to finance your business
For those of you who are considering unsecured lines of credit for financing your business you need to be aware of the fact that since these loans are going to be given without any kind of collateral then you are going to need to have a decent credit score for your business. So basically what this means is that you are not going to be able to get an unsecured line of credit to start up your business, but you can use it for financing an expansion or other things in the future.
Here are some tips that you should keep in mind when it comes to using unsecured lines of credit to finance your business.
Tip one:
The first thing that you need to keep in mind is that if you are using an unsecured line of credit to finance your business then that is what you need to use it for. Make sure that you do not use the unsecured line of credit for personal finances; you need to make sure that you keep your finances separate so that you don't accidentally use the unsecured line of credit for your personal finances. If you do use this unsecured line of credit for personal finances you can actually jeopardize the personal protection that is offered by having corporate status.
Using credit consulting to help with business finance
When it comes to your business finances many people tend to think that just because they are business related there is a special way that you have to go about handling your finances. While this is true to a point, meaning you need to prepare financial statements, which is about the only difference. Many times when it comes to business or personal finance you can actually take some of the same steps to handle your finances. One thing that you can actually do to help with your business finances is to use credit consulting. This is something that people think of for their personal finances, but the truth of the matter is that using credit consulting can help regardless of what kind of finances you are dealing with.
Something else that you need to know about credit consulting is that it can be used in a variety of ways, what this means is that how you might be able to use it to help you with your business finances is not how the next person is going to use it. So before you decide on using credit consulting for business finances you should take a closer look at the things that they can do and then find the company that would work best for your needs.
Pros and cons of using credit cards for business finances
In our personal lives many of us actually think about using credit cards in order to help make ends meet, not to mention just paying for certain things because of how easy and convenient using credit cards can actually be. But the truth of the matter is you have probably never though to use a credit card for business finances. But regardless of if you have thought of using a credit card for your business finances you are probably already aware of the fact that using a credit card to help pay for things even in business has its pros and cons. So if you have thought about using a credit card for business finances then you should take the time to find out more about the pros and cons for using a credit card before you make your decision.
How to collect on credit
If you use your credit cards to make your purchases, borrowed money to buy a new house or start a business, you become a debtor. If you struggle financially and decide to skip a few monthly credit card payments, falling behind on your mortgage or business payments and you didn't try to work out your financial issues with your creditors, you may be contacted by a debt collector.
A debt collector is any individual who usually collects money from people that is owed to others. This individual can very well be an attorney who is an expert on collecting debts on a regular basis. There are many ways a debt collector can contact you depending on what information he has on you from the creditors. If your creditor provides him with your residential address, phone and fax number, then he will use any of this information to try to get in touch with you. However, a debt collector may not try to reach you at any times or places that are not acceptable or reasonable, such as before 8:00 am or after 9:00 p.m., unless you agree for him to do so.
Continue reading "How to collect on credit"Does your credit get hurt personally if your business declares bankruptcy?
People, who are having a very hard time paying their bills each month and are facing repossession or foreclosure, often consider declaring bankruptcy as a solution. Bankruptcy is a way to allow someone to help you to get out of your financial obligations. All your creditors will receive their money after all your assets are sold. Once you declare bankruptcy, your creditors are not allowed to try to collect their dues from you. Nevertheless, most creditors whose loans are secured by property are allowed to take possession of that property.
Financial institutions use your personal credit rating to decide whether or not you show great responsibility in paying your debts on time before providing you with your requested loan. Making sure that you have an excellent credit rating history is very important, especially if you are planning multiple large purchases such as a car, business equipment, building rental and so on. Once you start borrowing, you want to avoid bouncing checks, defaulting on your loan or even filing bankruptcy.
What you should know about extending credit, and how it can benefit and hurt your business
Knowledge is power, and if you are to determine whether or not extending credit would benefit or hurt your business then you need to know more about what types of laws and regulations that you would be subject to if you decided to extend credit to your customers.
First of all, it may not even be possible for you to obtain the information that you will need to issue credit depending on the state regulations pertaining to the kind of information that customers can be asked for when purchasing items with credit cards.Often, businesses cannot require customers to give personal information.Exceptions may apply if the needed information must be surrendered for other reasons such as the home delivery of a product.For information regarding the regulations in the state of your business contact your state Attorney General website.
A look at the business credit factoring finance loan
When your business takes on a credit factoring finance loan, basically what you are doing is selling your account receivable invoices for cash. Instead of having to wait 30 to 60 days for your customers to pay you part of their bill, you sell the customer's entire bill amount to a company and get the cash quickly, sometimes within hours. This type of loan is also known as accounts receivable financing. Small businesses may benefit more from a credit factoring finance loan rather than the traditional bank loan.
The differences between credit factoring finance loans and the traditional bank loans are:
- Banks look at your history when looking to give you a loan. The bank takes into consideration many factors which include debt to income ratios, collateral and your company's financial history.
With a credit factoring finance loan, companies look more at your customers history, how much they are paying monthly, and if those monthly payments are on time. These are factors companies look at to determine whether to buy your accounts receivable invoices.
A look at consolidating business credit card debt
Using your small business credit cards responsibly can help your business to grow and succeed but misuse of small business credit cards can destroy your business. There are several ways to effectively manage your small business credit cards.
1. Apply for a small business credit card at your existing financial institution. You will be further establishing a banking relationship that can help you if at some time you are in need of a line of credit or loan. The relationship already established with your lender can prove to be a big help with credit applications over $100,000 not using automated scoring systems.
2. Do not sign up for multiple credit cards to try and take advantage of deals. This can impact your credit score in a negative way and also make managing your cards more difficult. Try to keep business credit cards to a minimum.
How to deal with customers who bought on credit and aren't paying
Introduction
In business, you often have to extend credit to your customers.The problem with this is that if the customers don't pay you back, or even don't pay you back on time, it can create problems for you.Don't let yourself get into the position of not making payroll because of outstanding debts.Take care of these problems when they are small problems so that they don't evolve into large problems.
Instructions
Difficulty: hard
Steps
Continue reading "How to deal with customers who bought on credit and aren't paying"How to deal with customers who bought on credit and aren't paying
Introduction
In business, you often have to extend credit to your customers.The problem with this is that if the customers don't pay you back, or even don't pay you back on time, it can create problems for you.Don't let yourself get into the position of not making payroll because of outstanding debts.Take care of these problems when they are small problems so that they don't evolve into large problems.
Instructions
Difficulty: hard
Continue reading "How to deal with customers who bought on credit and aren't paying"How to keep your employees honest when they have company credit cards
I'll admit right away that this is a depressing subject to pontificate on. "How to keep your employees honest when they have company credit cards." It's as if we're assuming here that once an employee has a credit card in his hands, off he goes to Wal-Mart to stock up on deck furniture and DVDs. Now, it's not true that all employees are that way. It's not even true that most employees are that way. Most of us have pretty active consciences when it comes to stealing big things such as deck furniture. The problem is when we get down to the small things that people might not notice. That's what we're really dealing with here, regarding the question of how to keep your employees honest when they have company credit cards.
Let's look at some way to keep your employees honest when they have company credit cards.
What you should know about using the American Express business credit card
There are a number of things that you should know when it comes to using the American Express business credit card.The American Express business card is especially popular because it offers frequent flyer miles that are awarded with your purchases.Depending on the business where you use your card, then you can earn even more points for each purchase.
The American Express business card is one of the most heavily advertised small business credit cards.It is overall rated a 3 out of 5 points by consumers, which means that it is essentially a pretty good credit card for small business owners.
Financing a small business with a credit card
Using a small business credit card to finance your small business is a good idea-to a point.Using a small business credit can improve your credit rating, improve your standing, help you get the supplies that you need, and more.However, financing your entire business with a small business credit card can get you in over your head when it comes to high interest level debt.
There are a number of small business credit cards that are specifically tailored for small business owners.In fact, over two-thirds of small business owners use a small business credit card.Using a small business credit card can be a great idea for your small business, as long as you use it wisely and don't fall into common credit card traps.
Financing a small business with a credit card
Using a small business credit card to finance your small business is a good idea-to a point.Using a small business credit can improve your credit rating, improve your standing, help you get the supplies that you need, and more.However, financing your entire business with a small business credit card can get you in over your head when it comes to high interest level debt.
There are a number of small business credit cards that are specifically tailored for small business owners.In fact, over two-thirds of small business owners use a small business credit card.Using a small business credit card can be a great idea for your small business, as long as you use it wisely and don't fall into common credit card traps.
How to take advantage of extending customers credit
Wondering how you can take advantage of extending credit to customers?Here are guidelines that can help you maximize your profits and expand your customer base by offering and extending credit to new customers and to current customers.
Guidelines and benefits to extending credit to customers
1.Benefits to extending credit to customers
Extending credit, what you need to know
There are a number of things that you need to know about extending credit as a company to your customers.
Extending credit to customers is one of the most effective ways that you can actually increase your sales output, particularly when you are trying to break into new markets, whether geographically or demographically. How does extending credit get you new business?Think of it this way.You know that a number of potential clients would purchase your products or your services; however, these clients might not have the money at this point in time.So you advertise that clients can buy now, and pay later.Clients come in, and you extend credit to them so that you can have their business right now, and the hope is that they will make their payments on time so that you can also have their money in the future.
However, extending credit can be a complicated and a risky proposition.There are a number of things that you need to know before you begin extending credit.
How to use rewards credit cards to make your capital go further:
It is very important for businesses to spread their money as far as they can. When businesses are working out their finances they need to use as many techniques as they can to help them. Money is a very important part of business. If you do not manage your money well your business will not go very far. You should sit down and learn some good financial techniques. One such technique is to use rewards credit cards. These credit cards can help your business in ways that may not be so apparent to you.
Some reward credit cards will offer you a certain percent of your money back yearly. Some may be as little as one percent. Others will offer five percent or more back. Let's say that you have a rewards credit card that offers five percent back. In a given year you spend approximately two hundred thousand dollars. At the end of that year you would receive a check for ten thousand dollars. That is a small portion compared to what you spent but it is still ten thousand dollars more that you would normally receive at the end of the year. It would help your capital go further because you could use it to pay off certain things so that you could use your other money for different purposes.
Continue reading "How to use rewards credit cards to make your capital go further:"5 tips to get business financing with bad credit
People with bad credit are considered high risk lenders and not many banks or lenders want to take a chance on loaning people money with bad credit, regardless of if it's for a business. Most lenders who give business loans will also look at your personal credit score when determining if they are going to lend you credit. The good news is you can fiancé a business with bad credit, but the process is a bit more difficult. Here are some tips to help you get business financing with bad credit.
Tip one:
First you will need to separate your personal credit from your business credit. If your personal credit is bad then you do not want to have it tied into your business credit because you will never be able to get financing. To separate the two you are going to have to obtain a Tax ID number so that you can being building your business credit score. You will want to start off small and build your credit up slowly. Once you have a credit history for your business you can obtain better financing with lenders and secure larger loans, but do not over extend yourself.
What criteria do credit companies use to rate credit worthiness?
Knowing your credit score is important, as it is what determines if you can get loans, and the much needed funding to run your business. Your credit worthiness is what determines your score. So, if your score needs improving, or you want to have an idea of how credit worth you are, you need to know what criteria credit companies use to rate credit worthiness.
What criteria do credit companies use to rate credit worthiness?
The answer to this question is simply that there are a number items, or in other words, financial information, that is used to rate credit worthiness. And it will vary from credit company to credit company, however, there are a few that each company uses. The following are a few of the most widely used types of information used to rate credit worthiness:
What criteria do credit companies use to rate credit worthiness?
Knowing your credit score is important, as it is what determines if you can get loans, and the much needed funding to run your business. Your credit worthiness is what determines your score. So, if your score needs improving, or you want to have an idea of how credit worth you are, you need to know what criteria credit companies use to rate credit worthiness.
What criteria do credit companies use to rate credit worthiness?
The answer to this question is simply that there are a number items, or in other words, financial information, that is used to rate credit worthiness. And it will vary from credit company to credit company, however, there are a few that each company uses. The following are a few of the most widely used types of information used to rate credit worthiness:
How To Improve Your Business Credit Score
Your business credit score is important. Don't believe me? Ask any business owner who tried to get a business loan that had poor credit. A credit score of 700 or better is needed to be approved for business loans. Thus, if you do not have this credit score, you should make your goal to improve your credit, and start working towards that now!
Why? Your credit score should be taken seriously, as to lenders it is your financial snapshot, it shows your financial health at a given moment. So if your score is not where you want it to be, you better work to improve it.
Continue reading "How To Improve Your Business Credit Score"Obtaining a Letter of Credit for International Business
A letter of credit, or LC, is a way to reduce risk when performing international business transactions that has gained many loyal followers over the years. Because international trade can be a gamble at best, a letter of credit is a binding legal document that works by promising the seller that he will receive payment for the goods or services he sells. In order to receive payment in accordance with the guidelines of a letter of credit, the seller presents the bank with the shipping documents that confirm the products were actually delivered within a certain amount of time.
There are a number of different types of letters of credit, and each one serves a different purpose:
Continue reading "Obtaining a Letter of Credit for International Business"How to build a small company using credit cards.
Using Credit cards to build a small company can be sufficient, and convenient. If you take the time to shop for a fair interest rate, understand and avoid fees, carefully manage your credit score and create a solid payment plan, you could be well on your way to entrepreneurial success.
There have been many companies started and maintained in the beginning by using credit cards. There have also been many companies sunk literally by the weight of the credit card fees and interest rates.
Continue reading "How to build a small company using credit cards."How much interest can a lender charge?
How much interest can a lender charge? Interest is the money a lender charges to borrow their money. The amount of interest a lender can charge is governed by federal and state laws. There is a special law called Usury law that prevents lenders from charging too much for interest. There are many exceptions to this Usury law. Each state and each lending situation has its own laws governing the amount of interest that can be charged.
As you have probably noticed usually a home mortgage is the lowest interest rate at least in recent years. It is common to find interest rates for 30 year mortgages as low as 7%. Credit cards usually charge the most interest from 9-25% interest. These are called "retail installment transactions" and included department store cards, Visas, and MasterCard's.
Continue reading "How much interest can a lender charge?"How do lenders decide what interest rate to charge?
How do lenders decide what interest rate to charge? As with most things a lender is just a person trying to make money so just like gas prices are determined by many factors including state and federal laws. Interest is determined by many factors.Some of those factors include what price people will pay. Obviously if a lender has enough competition charging less than him he will bring his interest down. Also if there are no borrowers looking for loans than the lender will bring his interest rates down to attract more borrowers or have a great starting interest rate to get you hooked. Some less scrupulous lenders will also have hidden fees that don't show up on their initial disclosure of the interest rate.
The Congress enacted a law called the Truth in Lending Act and it helps us have an equal way to measure different loan offers. Every lender must give you a truth in lending statement which is where the accurate comparison numbers can be found. This document must include 4 key points of information.
Continue reading "How do lenders decide what interest rate to charge?"There is a better way than financing your company on credit cards?
Financing your company in other ways than that with credit cards is very possible. Some options might be, factoring, mezzanine financing, asset based lending, purchase order financing last but not least family and friends.
Seeing first hand the challenges facing the small business community and knowing that entrepreneurs need more than just cash to grow their business, there have been many options come available to help businesses grow.
How do I decide whether to offer credit to a specific customer?
Having a standard policy that applies to all customers is a good idea for any business when deciding when to offer credit. But each customer's specific needs could influence your decision as well as your general policy.As always a decisions about offering credit must begin with a credit score and report. But what if your best customer, some one who loves your product and really wants it, has a lower score? Should you make exceptions to the standard rules?
This decision can get you in trouble with the Equal Credit Opportunity Act which prohibits the use of race, religion, gender, marital status, birthplace, or because an applicant receives income from a public assistance program in determining credit approval. If you start making exceptions to your standard rules you could find your self in a serious lawsuit for up to $500,000 or one percent of your business's net worth, whichever is less. It can get costly to make exceptions.
Continue reading "How do I decide whether to offer credit to a specific customer?"How do I decide whether to offer credit to a specific customer?
Having a standard policy that applies to all customers is a good idea for any business when deciding when to offer credit. But each customer's specific needs could influence your decision as well as your general policy.As always a decisions about offering credit must begin with a credit score and report. But what if your best customer, some one who loves your product and really wants it, has a lower score? Should you make exceptions to the standard rules?
This decision can get you in trouble with the Equal Credit Opportunity Act which prohibits the use of race, religion, gender, marital status, birthplace, or because an applicant receives income from a public assistance program in determining credit approval. If you start making exceptions to your standard rules you could find your self in a serious lawsuit for up to $500,000 or one percent of your business's net worth, whichever is less. It can get costly to make exceptions.
Continue reading "How do I decide whether to offer credit to a specific customer?"How do I decide whether to offer my customers credit?
Everyone knows that offering credit can increase sales. People spend more when it is on credit and also it can establish a business relationship with that customer who will shop with you more often if they have a credit account for convenience. But offering credit is also a risk if your customer doesn't pay. This can cost you not only the amount borrowed but also any fees used to collect the money from them later.
So it is important to establish a policy in your company determining when to offer credit to your customers. Here are some things to look for in a potentially good credit customer and ways to help them stay good credit risks.
Continue reading "How do I decide whether to offer my customers credit?"How do I decide whether to offer my customers credit?
Everyone knows that offering credit can increase sales. People spend more when it is on credit and also it can establish a business relationship with that customer who will shop with you more often if they have a credit account for convenience. But offering credit is also a risk if your customer doesn't pay. This can cost you not only the amount borrowed but also any fees used to collect the money from them later.
So it is important to establish a policy in your company determining when to offer credit to your customers. Here are some things to look for in a potentially good credit customer and ways to help them stay good credit risks.
Continue reading "How do I decide whether to offer my customers credit?"How to check the credit status of your customers
For banks or business, customers are a crucial part. Without customers there is not business. It would be a one sided liability. You would buy a bunch of stuff you do not need and through a lot of money away. But because customers need things and consume a lot of things these days, businesses stay in business pretty well.
Some customers are ordinary people that go about day-to-day and buy things like groceries. Some customers are businesses that are looking for supplies in bulk. Some customers are businesses looking for loans. A customer is simply a person who comes to your business and buys your products. They are a customer to your store.
How to check (and fix) your company's credit rating
If you are a business seeking loans and customers then your credit rating is very important. It tells people a lot about your business. Banks and such will determine a lot by analyzing your credit report. They will determine whether or not they can trust you and want to give you money by reading your credit report.
If you have a good credit report then banks will want to lend you money. They will see that you are responsible with money and that you pay it back when you should. They will know that you can be trusted with money because they will be able to view your past creditors and see how well you paid them back. They will decide a lot off of your credit report.
Continue reading "How to check (and fix) your company's credit rating"How To Get a Line of Credit
For small businesses that are starting out and in the process of developing it is important that they get a line of credit. The expenses for staring out a business can be huge and it is almost impossible to pull that from the pocket unless you are very wealthy and are bored with life so you started a small business because you had the urge to. This of course is rare.
There are tons of expenses from salaries and rent to advertising and utilities. There are countless things to consider and countless things that are not thought of until you already have your business up and running. Because there are so many expenses and it is hard to come by money with out working your tail off, and even then you may find it impossible at first to make ends meet. A line of credit could be a great idea for you.
Separating Business and Personal Credit Cards:
If you have your own business you know that there are lots of expenses involved. There are a lot of things you need to buy besides the things that will actually be a part of the building your business runs in.
There are small things here and there that require you to put money on your credit card or out of your checkbook to pay for them, such as paper for a printer, or the snacks for a board meeting. If this is the case it would probably be a great idea for you to get a specific business credit card so that you can separate your business credit card from your personal credit card.
Continue reading "Separating Business and Personal Credit Cards:"How to Evaluate and Raise Your Credit Score
Why do some people get offers for pre-approved credit cards and others don't? What do car dealers know about your financial health that you don't know? The answer is your credit score.
Your credit score is a number generated by a mathematical formula to estimate how likely you are to pay your bills. Based on the information in your credit reports from the three credit bureaus, Equifax, Experian, and TransUnion, your credit score has been a factor in your ability to qualify for loans and good interest rates for more than twenty years. Lenders compare your credit report with millions of others to determine your score.
While there are a variety of credit scoring methods available to lenders, the most widely used is the FICO score. Based on a scoring system developed by Fair, Isaac and Co., FICO scores range from approximately 300 to 800 points and are provided to lenders by the three credit bureaus. You also have access to your FICO scores but will be charged a fee by each credit agency providing your report.
According to Fair Isaac, the credit scores of the American public are divided as follows:
- 499 and below 1 percent
- 500-549 5 percent
- 550-599 7 percent
- 600-649 11 percent
- 650-699 16 percent
- 700-749 20 percent
- 749-799 29 percent
- 800 and above 11 percent
Why Does FACTA Matter to Me?
FACTA stands for Fair and Accurate Credit Transaction Act. FACTA is the law which allows any American access to their credit report once per year. The law went into effect Jan. 1, 2005. So what does that mean for you as an employer?
On June 1, 2005, a new provision of FACTA goes into effect. It says that any employer (even if you only employ one person, and you have their personal information so that you can pay social security taxes,) whose action or inaction results in the loss of employee information, can be fined by federal and state government, and sued in civil court.
A USA Today article on FACTA from Jan. 14. 2005, stated "Bet you didn't know that." But you need to know, and need to know what you can do to protect yourself.
Small Businesses affected the most
"A small businessman who makes a mistake could bear the brunt of a regulation like this," says James Plummer, policy analyst at Consumer Alert, a non-profit group that focuses on a free-market approach to consumer regulations."
Continue reading "Why Does FACTA Matter to Me?"Top 5 Reasons To Check Your Credit Report Regularly
#1 Make sure mistakes aren't hurting your credit.
Reviewing your credit report can help you avoid costly errors. In one recent study, more than 50% of the credit reports checked contained errors. Other studies have shown similar results with as high as a 70% error rate. The most common error occurs when the information of another person, with a similar name or account number, is recorded in your credit profile.
#2 Track your history of payments.
Potential lenders want to see a history of timely payments before they'll consider offering you a loan or credit. Check your report to see that your payments are being reported accurately to the credit reporting agency (CRA). A history of late payments will result in higher interest rates being charged or having your credit application or a loan denied. Late payments will also lower your FICO score.
#3 Protect against potential identity theft.
Identity theft has become the fastest growing crime in our nation. Identity theft complaints jumped 75% from last year according to a recent Federal Trade Commission report. The monetary loss from identity theft crimes skyrocketed to a combined $53 billion in 2002! Accounts that appear on your credit report that weren't opened by you could be a sign of identity theft. Report any such occurrences to all three major credit bureaus immediately and have them place a fraud alert on your account. The three bureaus can be reached at:
Continue reading "Top 5 Reasons To Check Your Credit Report Regularly"Do You Need A Financial Planner?
No matter how much money you make, it pays to keep on top of money coming in and going out. Even if you do a good job of that, there are important times in your life when talking with a professional adviser makes sense.
Almost every major life event - finding or losing a job, getting married or divorced, having a baby, buying a home -- is likely to have a major impact on your finances. A new job may mean you are making more money -- no problem there as long as you know the best way to invest it. Getting married may mean you have a second income to count on, but now you have someone counting on yours as well. Buying a house means you have to come up with a hefty sum of cash for a down payment, get used to monthly mortgage payments and meet the expense of house repairs.
Let's look at what happens if a baby comes into your financial picture. First, medical bills need to be paid, so having good medical insurance is important. Few insurance plans cover everything, so you'll need to have a cash reserve to cover deductibles and extras, not to mention the furniture, clothing and sundries you'll need when the newborn comes home.
With a new addition to the family, you'll want to make sure that the entire family (baby, too) is protected if something should happened to you -- that means reviewing life and disability insurance to be sure it's adequate for your new responsibilities.
Continue reading "Do You Need A Financial Planner?"Get Your Credit Score To Soar In The Twinkling of An Eye
Ever wonder how a creditor decides whether to grant you credit? For years, creditors have been using credit scoring systems to determine if you'd be a good risk for credit cards and auto loans. More recently, credit scoring has been used to help creditors evaluate your ability to repay home mortgage loans. Here's how credit scoring works in helping decide who gets credit -- and why.
What is credit scoring?
Credit scoring is a system creditors use to help determine whether to give you credit.
Information about you and your credit experiences, such as your bill-paying history, the number and type of accounts you have, late payments, collection actions, outstanding debt, and the age of your accounts, is collected from your credit application and your credit report. Using a statistical program, creditors compare this information to the credit performance of consumers with similar profiles.
A credit scoring system awards points for each factor that helps predict who is most likely to repay a debt. A total number of points -- a credit score -- helps predict how creditworthy you are, that is, how likely it is that you will repay a loan and make the payments when due.
Continue reading "Get Your Credit Score To Soar In The Twinkling of An Eye"Beware of Bogus Credit Repair Companies!
So-called "credit repair" companies claim they can remove negative information from credit reports. Advertising as "Credit Advisors," "Credit Rating Correction Services" or "Credit Consultants," they trumpet variations on this message: "Turned down because of bad credit? We can help!" Many of these companies charge hundreds if not thousands of dollars for the promise to "clean up" bad credit reports. But the truth is, these companies can only do what you could do yourself--at no charge.
Nobody can remove negative information that is accurate from your credit report. No company has a "secret" ability to remove all negative information.
But this doesn't stop their claims. This deceptive quote is from a credit repair company brochure: "Charged-off accounts, collection accounts, judgments, tax liens, repossessions, and even bankruptcies can be removed from your credit records in less than one year (five to seven month average)."
One tactic is to bombard credit reporting agencies with requests to verify information. If a credit reporting agency cannot verify an entry within 60 days, it will remove the information from the report. But if the information is later verified to be accurate, it will go back in the report.
Before you even consider signing a contract with a company that promises to repair your credit, remember these facts:
Continue reading "Beware of Bogus Credit Repair Companies!"How To Start A Second SEPERATE Credit File!
Your personal credit file is separated from those with the same or similar names by several factors, including a driver's license number, birth date, or spouse's name. Although these are three important identifying marks, the number one identifying mark on your credit report is your social security number. Since there is no one else in the United States with your number, your file is easily identified. The chances are very small that the social security office in your area will issue a second number just because somewhere down the road you messed up your credit. However, it is impossible that a second personal file would be created.
The second kind of credit file is the business credit file. Business credit files are identified by the business name and by a computer generated and assigned identification number. Your business file is listed with credit bureaus like Dun and Bradstreet and Stanley and Porous, etc. A Company credit record can be built and used just like a personal one. The idea is to take a hobby or trade that you possess, and start a new small business for which you can create a name and a new credit file. There are hundreds of small businesses that can be run from your home. These small businesses have the potential to generate high part-time or full time earnings. I suggest visiting your nearest bookstore or library to obtain a book on the numerous business opportunities available.
Continue reading "How To Start A Second SEPERATE Credit File!"Hidden Dangers to Credit Cards
The hidden dangers that comes with those credit cards. Oh yes, we all get it in the mail, all those offers to get a credit card.
So tempting 0% financing for a year, no payment for 3 months, $10,000 credit line, and the most dangerous, YOU ARE APPROVED!
We have all had a credit card in our possession at one time or another. Whether it is a department store, or gas card, or the most dangerous of all the MasterCard or Visa! Good at most places in the world.
Let's talk about the MC/Visa cards for a moment. These you can use everywhere, even at McDonalds. These cards tempt you with there low rates, big credit lines, and the ease of applying for one of these.
Now why do I call the credit cards a disease? Well you begin paying for that dinner out on the town, next thing you are doing is picking up a few items at your local Wal-Mart or other discount store.
You get the bill in the mail and you pay it off. Next month you put a little bit more on it, when the bill comes you pay it in full. Well this goes on for a few months, and you think, I am in control of this situation.
Continue reading "Hidden Dangers to Credit Cards"Building Good Business Credit After Bad Credit
Can you establish good business credit if you have bad personal credit? The answer is yes...but with a few caveats.
Business credit reports and personal credit reports are generally completely separate databases for legal reasons. However, there are some exceptions in terms of how independent that information may be:
-- If you are operating as a sole proprietor or Limited Liability Company, it is difficult to separate your personal and business credit. A corporation is a much better structure to build a completely independent business credit report.
-- Experian sells a credit score that is a combination of the business owner's personal credit history and the businesses' credit history.
In the early years of a business, the owner will almost certainly be required to personally guarantee loans. However, as you establish a strong business credit rating for your enterprise, you'll have more leverage to negotiate for a loan without your personal guarantee.
A warning: some people try to use business credit file to repeat bad credit habits. "I've seen people who ruined their own credit go out and start a business, enlist the help of people with good personal credit to be executives in the company, and get major credit cards. They didn't have a real product or service, and the objective was to just get credit. They would inevitably default on the corporate credit lines," says Erik Salmon, Director of Business Credit Services for Innovative Business Services (IBS) and an experienced business credit coach. If that's your intention in establishing a business credit rating, you're better of taking some personal finance courses to learn how to manage your money.
Continue reading "Building Good Business Credit After Bad Credit"