25. September 2017

Business counseling fees can be extremely expensive and not knowing where to turn for business advice can be a hassle. That is why there are 80 Business Information Centers (BICs) in the United States and over 1,100 Small Business Development Centers (SBDCs). Not only do they provide small business owners with free counseling, but they also have an extensive reference library of books, publications, and video tapes. Small Business Development centers and Business Information Centers help with start-up business planning or assist in expanding an existing business.  

BICs are partnered with the Service Corps of Retired Executives (SCORE) to provide you with free business counseling. Retired business men/women volunteer their expertise and experience to assist you with any issues that may be confronting your business.  They can also assist you in developing a customized business plan for your specific business needs. There are over 10,500 SCORE volunteers in 389 chapter locations who assist small businesses. SCORE also provides an online counseling initiative for businesses. 

Business Information Centers are constantly adding new resources to serve the needs in their local business community. Some BICs, such as the Sacramento Business Information Centers, offer bookkeeping, tax planning, budgeting, business financing and loan information, developing business plans, legal information, management skills, marketing techniques to name a few of the areas BICs specialize in.  

The Small Business Development centers are a training resource which is a cooperative effort of the private sector, the educational community and federal, state and local governments. It is the Small Business Administration’s (SBA’s) largest resource partner and an initiative that enhances economic development by providing small businesses with management and technical assistance. There are more than 1,100 SBDC lead and service centers located around the country. To locate the nearest development center visit the SBA.

The SBDCs, SCORE, and the Women’s Business Center all fit into the SBA’s Office of Entrepreneurial Development. 

Build Business Credit, Small Business Financing

24. September 2017

If you are a business owner the task of obtaining business capital can be very daunting. Most businesses fail because they have never been taught how to obtain financing and therefore they have no clue where to begin. The Small Business Administration reports that 97% of business loan applications fail.

The importance of seeking expert assistance when setting up business credit has many business owners turning to a business finance coach to help them establish their business credit. One of the biggest mistakes made by business owners is that they attempt to obtain business financing using their personal credit. You should never use your social security number to obtain business financing. Personal credit has to be separated from your business credit.

Until your business has three separate business credit scores, any financing that your business receives will be based solely on your personal credit scores and your personal assets. A good example of this would be if you wanted to buy a home, but you had no personal credit scores. You would get declined, and funding a business is no different. You need to have business credit scores established to even get looked at for a business loan. Having business credit scores established are just a start in the finance process. There are 20 other items that must be in place before you apply for business loans.

“Missing just one of the 20 items will get your business denied,”. “If you follow the steps in a good business finance coach you will make sure that you have all of the items completed.”

For example, Lenders will deny a business loan application if the business legal name is not listed properly with the 411 Directory Assistance. Another way financing can be denied is if your business has a bank rating below a low 5 or if your business doesn’t have credit files open with the three business credit reporting agencies. Most lenders now require businesses to have three good credit scores. These are only a few of the items that must all be in place first before seeking approval for funding.

The process of establishing business credit is much more complicated than setting up personal credit. There is one business credit agency that will try to charge you $500 just to open your credit file. You do not have to pay it, and a good business finance coach will show you why you don’t have to pay it. A good finance coach will set you up with all three reporting credit agencies as well.

A business finance coach instructs business owners in a step-by-step format on exactly what they must do to get their business ready to be approved for financing and how and why to build the business credit scores they need to get approved. A coach will show a business how to not only build business credit, but to build good business credit that the banks and other lending agencies will use to approve your loan request. A good finance coach will typically direct you to sources for business credit cards, vendor lines of credit and for other creative forms of financing.

Build Business Credit, Business Credit Scores, Small Business Financing

23. September 2017

Many business owners seeking financing for their business don't realize that without first having excellent business credit scores their business will never obtain significant financing. Business credit scores function exactly like personal credit scores, and so you have to build your business credit scores up properly before you can seek large amounts of capital for your business from any lending institution. It is nearly impossible to obtain capital from a lending institution without having first establishing excellent business credit scores. 

The question that businesses face is how do they go about establishing the business credit scores that are a prerequisite for financing their business. First, every business owner must make sure that all of their business lines of credit or any aspect of financing for their business is reporting to the major business credit bureaus. Unfortunately, less than ten percent (10%) of all business lending in the United States gets reported to the business credit agencies. This means that while your business may have existing financing, if that financing is not being reporting then your business will never build business credit scores up to where they need to be. 

To properly establish credit scores it often times can take three to six months to get a business credit score that is worthy of large amounts of financing in the eyes of the lender. A lender wants to make sure that their loan has the chance of being repaid, and one of the only ways they can justify that is to see if you have established a business credit history with a solid score. This is the same concept as when you attempt to get a personal loan or a car loan. They will pull your personal credit history, and if you have a poor credit history or no credit history you are either denied, or are forced to pay higher interest rates on the loans. 

The secret to building excellent business credit scores is a 1-3-5. That is starting with five vendor lines of credit, three business credit cards, and one business bank loan, all of which report to the business credit agencies and none of which are reporting against your personal credit.

There are many firms now that offer to build your business credit for you without you having to do a thing.  Ask yourself, “could that happen with my personal credit?” And you know the answer is NO! Beware of business credit building services that claim they will build your credit overnight. They charge exorbitant rates for their services, which will do you no good. A good rule of thumb to live by is that if it sounds too good to be true, than it probably is. Business credit building is a process that you must do yourself, just like you built (or destroyed) your own personal credit scores.  The best services are those that give you all the tools and guidelines to do it yourself, not those services that make false promises.

Make sure that as you go along the process of obtaining capital that you never submit a business loan request to lender that you are not pre-qualified for. Credit inquiries can kill any business credit scores that you already have. Make sure you avoid the practice of submitting a business loan application to multiple sources. 

Another thing to be cautious of are Internet businesses that allow you to store your business loan application information in one place. You may find that your application gets automatically submitted to hundreds of sources at once. This is business finance suicide, and all you will end up with will be a destroyed business credit scores and no funding. 

Financing your business is not simple, and to get approved there are other aspects beyond just having excellent business credit scores. It is highly recommended that you look into a good business finance coach to help guide you along the way.

Build Business Credit, Business Credit Scores, Business Loan Approvals, Lender Compliance Items

22. September 2017

Accounts payable financing should be considered by your business because staying in good standings with your suppliers and creditors is extremely important to the survival of a business. Accounts payables are best described as money owed by a business to suppliers or creditors. Often times a business starting out will be short on cash flow, so they run the risk of paying their bills late. 

Paying bills late can really harm your relationship with suppliers and creditors. These two groups are vital to your business because you need suppliers to have products to sell, and also you need creditors to have capital to expand your business and implement your business and marketing strategy. The other detrimental thing is that paying bills late can have a negative affect on business credit scores which means obtaining financing through a loan or other form down the road can prove to be extremely difficult. It is hard enough to get approved without business credit, but with negative business credit getting approved can be even more difficult.

It is wise to find some way to pay accounts payable on time. One option you may want to consider for your business is factoring. This is often times referred to accounts receivable factoring. This is basically where your business sells invoices or accounts receivables to a factor company who pays you a discounted rate for the invoices. By paying you for the invoices, your business would get access to immediate capital. This capital could be used to pay your suppliers and creditors either on time or early. It could even enable you to get discounts for paying early. The most important benefit is that it saves your business from any negative financial history. 

Other options for getting the capital necessary to cover bills is to have a principal or owner in the company personally guarantee the loan. This may be last resort, but it is much better to do this and be able to pay the bills on time, rather than not being able to pay them on time. Negative credit feedback for a business can not only affect future financial options, but it can also increase interest rates on future loans or lines of credit. 

Account payable financing is extremely important for your business, and should not be overlooked. One other thing to keep in mind is the importance of business credit, and how that relates to your business. You should look further into establishing positive business credit scores.

Alternative Business Financing, Business Loan Approvals, Small Business Financing

21. September 2017

Account receivables factoring gives a business the option to secure immediate capital which can be used to cover regular expenses such as inventory, payroll, or utility expenses. Many businesses have cash flow issues at some point, so being able to get capital quickly can be extremely important for a business. By selling off accounts receivables or invoices to a factor a business obtains money. 

The factor, or business that purchases account receivables for a discount, will collect all payments from the clients, and they will even process the payments as well. The business won't have to worry about getting the money from the client, as the factor does that. There is unlimited capital potential because the amount of capital available goes up as your sales and accounts receivables increase. 

The factor company will pay you in advance, and generally they will give you 70%-90% of the total invoice up front. They then take a small fee for their services starting at 2%. After the fee is taken they give you the remaining difference. For example if you have an invoice worth $10,000 you would sell it to a factor and they would give you 70% up front. So you would get $7,000 up front. They may charge a fee of 5% for their services, so they would take $500 as their cut, and they would pay you the remaining balance of $2,500 after the money has been collected from the client. 

Account receivables factoring makes for a win-win situation for all parties involved because you get your capital quickly without having to worry about not getting paid from the client, and the factor makes money by taking their fee. 

The best part of this whole process is that it is very simple for a business to get approved because the creditworthiness of the client is used to determine eligibility. The factor wants to make sure they get paid since they are taking on the risk. 

Other benefits to this sort of financing is that your business has peace of mind, they can take advantage of specials on inventory, take advantage of early payment discounts, and so forth. The owner also doesn't have to give up ownership like if they went after investment capital to stay afloat during the beginning months. 

There are many other options for financing a start-up business, but if your business is lacking collateral or if your business does not have business credit scores established obtaining funding in those ways can be extremely difficult.

Alternative Business Financing, Business Loan Approvals, Small Business Financing