Business Credit – How to Obtain Business Loans Without Using Personal Credit Or Assets
Business and potential business owners have good ideas and need funding, but in this tightening credit market, they are finding it virtually impossible to locate the financing they need for their venture.
Small Business Owners especially want to know where to go for the money and what they need. The answer is to GET BUSINESS CREDIT. Having credit for your business enhances your credibility by taking the perception from mom and pop shop to established professional enterprise. You are opened to more financing options and gain preference to Lenders that are carefully picking where to invest their money. With business credit it is even possible to obtain financing for your business without any personal guarantees or personal credit. This is especially helpful for those that have had more success in managing their business then their personal finances.
Besides the obvious benefit of credit and loans for your business another very beneficial aspect of building business credit is that you can separate your personal credit and assets from your business.
Larger companies of course have the credit they need and don’t rely on personal credit or assets to get the loans they need. If it is your intent, think about your business as the future larger corporation, and begin obtaining the business credit you need to get you there, so that you to can build your business while maintaining your personal financial independence.
Knowledge of how to correctly get credit and obtain loans for a business, and where to look is often the biggest hurdle. Business credit has been some what of a mystery for most where as personal credit has exploded so that you can hardly make it through the day without seeing an add about your personal credit score. Getting business credit is not difficult you just need to start now. At the bottom of this article is a resource that will help you to get started so that you can begin to get the loans you need for your business now!
Business Insurance – Today’s Business Lifeboat
Do you run a small business? Is your business insured? If not you could be risking your and your business’ future.
Learn about business insurance, and see why its today’s business lifeboat.
Expensive if You Don’t Use It – Cheap if You Do
The cost of doing business today is rising all the time, its true. Salaries and worker’s benefits are taking a bigger chunk of your profits.
Taxes are always a key consideration, and material costs are rising as well. Add to this insurance, and you have a real significant number on your cost of doing business column (on your profit and loss statement).
When looking at insurance you will be amazed as the amount of risks you are obliged to cover.
There are the obvious accidents or acts of nature risks, worker’s compensation, health and retirement plans, but then there are a host of other risks that can, and many should be insured.
It’s a maximum that all insurance is expensive if you don’t use it, but very cheap if you do.
The “Got To Have” Business Insurance Risks
Here is a list of basic insurance risks that every business should cover;
o Fire, Theft, Water Damage, and Malicious Damage to your business location
o All required worker insurance obligations, and for good worker relations, some perk insurance for employees, like some group private health plan, and retirement fund.
o Product liability if you are producing a product
o Transportation insurance for all your vehicles (full Casco advised)
o Fidelity insurance if your employees handle money. This may be a really indispensable pre-paid asset to your business.
The “Nice to Have” Business Insurance Risks
o Business interruption insurance
o 3rd Party Liability if you are producing a product for wide distribution
o Litigation insurance
o Damage due to civil disobedience and terrorist activity
o Business specific items
Buying Insurance
The choice of buying insurance is becoming a tiresome activity with so many options and prices (and insurance terms), that finding and using a good broker may be your best bet
The insurance broker has some advantages over using one company exclusively.
The broker can shop around, negotiate directly with underwriters (which you cannot do), and tailor make some policies for you.
The cost of using a broker may be easily absorbed by the lower cost of the insurance he provides you and your business.
You must make very sure of the broker’s qualifications, and demand a list of companies and underwriters he deals with.
Ask for a client list, and his inclusion in professional insurance societies. A search on the internet is also helpful. When you are satisfied, start using the broker to plan your business insurance risk profile and coverage plan.
Business Credit: Every Small Business Owner and Entrepreneur Should Know This
America prides itself on the entrepreneurial spirit. Consequently, small business owners are increasingly becoming major key economic stimulators. When a small business owner decides to incorporate his or her business, that small business owner has just begun the process of creating a brand new and separate entity. Basic business law dictates that a corporation is a “separate and distinct legal entity having its own privileges and liabilities distinct from those of its member.”
Given this information, it then becomes essential and relevant that small business owners develop and maintain a unique and separate business profile. Every small business can and should establish their business credit. Just as it is important to maintain a personal credit profile, the same care, if not more, is needed to maintain a business profile.
The rules and regulations that govern business credit are totally different that the rules that govern your personal credit. Furthermore, the advantages as well as the necessities are apparent to some and not to others.
With the opportunities provided by government agencies, whether local or national, small business owners should be aware that an established business profile is valuable and necessary when partnering with the government for contracts and other ventures.
Additionally, limiting or avoiding personal liability is another key factor why a small business owner needs to be aware of and develop his or her business profile history. Purchasing goods or services under the name of a properly structured business entity can possibly afford the owner or owners some personal protection if the business finds itself in a position of litigation or debt.
The long term gain of a properly maintained business credit profile can afford the small business owner with better financing terms. A financial institution today will usually take into consideration a company’s business credit profile when making business loan decisions. This can also assist in receiving S.B.A. backed loans. Additionally, retailers and vendors can offer great revolving terms or net terms all based on your company’s business credit history.
As a result, when possible, attempt to do business with companies that report your payments to the business credit agencies. This can be a huge plus in developing your corporate credit profile.
Another aspect associated with establishing and maintaining a business credit profile comes in the form of creditability. As well as appearing legitimate to the banks, suppliers or vendors that you do business with, your business credibility can be scrutinized and looked over by individuals as well.
More and more individuals are willing to explore a small businesses’ credibility by actually reviewing the company’s business credit history. This gives information such as – How long has the company been in business. Are they paying their bills on time? Does this company have any judgments or liens against them that the individual should be made aware of?
For example, Joe Smith can take a look at ABC Roof and Repair Inc, and find out if any judgments or liens were ever placed against the company for possible faulty work. This can be a valuable tool when deciding to choose a contractor for major projects.
Business credit can be understood and achieved by any properly structured organization. Whether you are a mobile business, storefront, street vendor, personal trainer, stylist, personal barber, eBay seller, home business or consultant, it is beneficial to you as a business owner to understand the basics creating and maintaining your business credit profile.