Business Credit Success Blog

7 Ways to Lower Your Credit Card Interest

2008-02-15T13:17:00.000-08:00

Just in case you didn't see this story in BusinessWeek, be on your guard: credit card issuers are getting very aggressive about raising credit card rates. Very likely they are responding to the credit crunch and deciding to get what they can, while they can, before things get any worse. The problem is when they double interest rates, minimum payments rise, and consumers get backed into a corner -- with bankruptcy as the only solution they see.

If your credit card issuer has raised your rates, please let me know!

And in the meantime, here is a recent webcast I did for ABC-TV in Sarasota. You'll get seven strategies for cutting credit card costs.

A Great Stocking Stuffer

2007-11-06T10:51:00.000-08:00

I've talked before on this blog about how Gene Mark's Small Business Book of Lists is one of my absolute favorites. I've found it incredibly helpful and refer to it often. It's like a huge directory of the best business tips from the top experts all in one place. No fluff, no theory, just practical useful information.

Now Amazon has it on sale for an incredible price! I am planning on stocking up on extra copies and speaking of "stocking" this book is way too big to fit into a stocking but it would make a great, treasured holiday gift. Something your business clients would definitely use and appreciate.

Check out the Amazon deal!

Solution to Business Credit Cash Crunch

2007-10-30T09:27:00.001-07:00

An excellent article on SmartMoney.com's Small Business Site describes how the credit crunch is hitting entrepreneurs hard -- and right before the holiday season when many need to load up on inventory, hire additional staff, or find their business is in a lull until next year.

She also quotes Curtis Arnold, one of my trusted colleagues, and the provider of our best business credit card list.

The recommendations for dealing with this credit crunch are all good, but I would add that there are alternatives to factoring that don't require $1 million in receivables. We've recently been talking with an Inc. 500 company, for example, that can offer cash advances against your credit card receivables which does not affect your personal or business credit, because it is not a loan. This solution is popular with many businesses, including restaurants (which find financing difficult) and auto repair shops (as in the example in the story. We'll write more about this option soon, but in the meantime feel free to call us at 888-227-3158 if you'd like to learn more about business cash advances.

SmartMoney TV

2007-10-25T16:34:00.000-07:00

While in New York last week I had the opportunity to talk with SmartMoney TV Small Business Editor Colleen DeBaise about business credit. Click here to watch the interview.

Congrats to BusinessCreditSuccess Member Scott Walker!

2007-10-25T16:30:00.000-07:00

Congratulations to BusinessCreditSuccess.com member Scott Walker, co-founder of DigitalGolf.biz. You can read Scott's start up story on this blog. He was also featured today in a front page story about business credit on the very popular website Small Business Review! (If you don't get their newsletter, you should!) I was glad to be able to hook Scott up with reporter Gary Stern for the interview.

Business Credit Success Story

2007-09-28T07:12:00.000-07:00

Business Credit Success Story: DigitalGolf.TV

If you are an ESPN SportsCenter fan, the name Scott Walker should ring a bell. Scott was a reporter for the popular show for four years when he decided the travel was taking its toll. He wanted a career that would allow him to spend more time at home with his wife, Nicole Neal Walker, an attorney. Initially they started a television production business, but by the end of 2004 they had developed a bigger vision.

With their knowledge of television production, they decided to build the premier interactive golf website. With DigitalGolf.TV, golfers get access to exclusive content on top-ranked golf courses featuring 18-hole interactive views from every tee box, fairway and green, as well as an expansive library of popular video instructional tips to help golfers of all skill level improve their game.

With over 750,000 visitors a month, the Walkers have decided it’s time to turn it up a notch. They are introducing The Ultimate Test Drive(sm), which allows members to test drive a club -- brand new or like new -- for as long as they like.

“Golf equipment is so expensive,” explains Walker.” We want people to be able to have access very quickly to the best equipment. And if they don’t like it, they can send it back to us. We don’t want people to get stuck in a product that is not right for them.” Walker says it’s “like Netflix for golfers.”

With a membership of only $34.99 a month, golfers can check out a club and have it sent to their door with free shipping. Two clubs at a time are available for $54.99 per month and a full set is available with a monthly membership of $99.95. Members keep clubs as long as they like, and either purchase them or return them and try something else.

But in order to bring this popular program to its members, DigitalGolf.TV must invest in a lot of golf equipment, and the Walkers want to do it the right way – using business credit whenever possible.

To do that, the Walkers been following the BusinessCreditSuccess.com program and have been meticulous about following the steps in the program. “For us, the most important thing were the basics,” Walker explains. “From the business perspective, business credit is befuddling. But the time you’ve put into it really does save you a lot of heartaches.”

Success Steps

Like many entrepreneurs, the Walkers have used both personal and business credit cards to grow their business. Though very pleased with their success so far, they wish they had used more business credit. "I wasn't aware of some of the things that were available to me with business credit. I would have taken a little more time in building the business, and taking the steps that would provide a better foundation for success. What we have learned now through BusinessCreditSuccess.com has helped us improve our foundation."

Advice For Entrepreneurs

Scott Walker’s advice to other business owners?

“Work the steps (in the business credit building program) and don’t try to skip any. We just applied for the DUNS number in the end of July. We made sure we had walked through the steps first, such as getting the phone line in the name of the business and getting it listed with directory assistance.” It takes a little time, he points out, but is worth it. “All that work is coming to fruition and the bank is pleased.”

And no doubt many golfers, who now can virtually tour the best courses in the country, lower their handicaps and hit the links with their dream equipment, will be too.

Could Your Business Be At Risk for Identity Theft?

2007-09-25T07:39:00.000-07:00

We have all heard the statistics about identity theft and they are not pretty. But what is less well known is that your business could be an identity theft victim. Read this post on Creditbloggers for some important tips on how to spot it and what to do to protect yourself.

Monitoring your business credit reports is one essential, as is checking your corporate filings and monitoring your business bank accounts.

SBTV

2007-09-20T12:20:00.000-07:00

Congrats to Susan Wilson Solovic, CEO and Chairman of SBTV.com who has been honored with a national award
by Women Impacting Public Policy or WIPP. In addition to leading the first
and only video news and information destination site for American small
businesses, Solovic has worked tirelessly to expand opportunities for women
in business.

If you haven't been watching SBTV, you're missing out. There's a lot of fabulous information for small business owners (we've contributed some articles too!)

Congratulations Susan on the award and the terrific job you're doing with SBTV!

Must Have Resource for Growing Your Small Business

2007-09-05T09:08:00.000-07:00

On my bookshelf is a volume I refer to again and again: Gene Marks' Streetwise Small Business Book of Lists. Gene has gathered the best expert advice on all kinds of topics from financing, to small business management, to insurance for small businesses, sales marketing and much, more more. All of the information is summarized into straight to the point bulleted lists, so you can find the answer you need quickly.

It's one of the most valuable small biz books on my shelf. (And yours truly is a contributor to the small business financing section!) Pick it up at your local bookstore or online. (While I love my library, you're going to want this one on your shelf.)

Entrepreneur Hot 500 List

2007-08-31T11:49:00.000-07:00

I am reading the Entrepreneur Hot 500 issue. Like the Inc. 500 list (which also recently arrived), I love these issues with information about successful hot start-ups. They are inspiring, fascinating (you can make money doing that???) and I've even made some great business contacts like Priority Leasing from studying these lists.

Here's a couple of interesting and relevant facts listed under the "Entrepreneur Hot 500 List At A Glance" (page 72):

1. Credit cards were the 7th most popular form of financing (savings was #1 and friends and family was #2)

2. 61% of the companies in the list had turned a profit by year two and 56% had earned their first million!

Pick up this month's issue of Entrepreneur and Inc., then get inspired and get going!

Follow Up to Reader Questions on Building Business Credit

2007-08-03T11:02:00.000-07:00

Read the blog post that comes before this one. The reader replied with some additonal questions:

Thanks so much. I appreciate your quick response.

I do have a couple more questions again after reading through your FAQs again, so if you think all these issues below are covered in detail in your program, then please let me know.

You had said that for new businesses, the banks will want a personal guarantee, which I am understanding this to mean they look at your personal credit for all type of financial help (loans, line of credit or credit card), even if you have an LLC or corporation at the time.

My comment: Yes, most banks want to see personal credit, especially for younger and smaller businesses. I had a very interesting conversation yesterday about this very subject with Steve Edwards at PaynetOnline. His company is a specialized business credit reporting agency with an emphasis on construction and transportation, and a robust database of business credit information, especially when it comes to leasing. They are also working on trying to get more business credit card issuers to report to their database, and to rely on business credit data in extending credit card lines. Steve agreed that the business credit lending model has evolved from personal credit, and needs to "mature" so that better decisions can be made from business credit data.

The upshot is that a lot of business credit decisions are made relying on personal credit.

However, you had said in a later post that there are credit cards, I am assuming the same ones that want a personal guarantee, that will keep this debt off your personal credit report. So my first question is - Is this also the case if you were to get a line of credit or loan (they would keep the debt off your personal credit report)? And besides credit cards, does your program discuss which banks, that offer lines of credit or loans(SBA, ect), would not report this debt to your personal credit? Or is this just something you ask the bank when you apply for a loan?

You always have to ask. We do list that information whenever it is available in our program. We do list business-friendly banks, but we don't list how they report. You'll want to double check -- but most lenders don't report business lines of credit on your personal credit unless you default.

Additionally, if your business went broke and you defaulted on your loan, then would any of the above financial options you had (either credit cards, lines of credit, or loans) report this to your personal credit at this time, even though the debt was never on your personal credit report to begin with? Or would they report the default to your business credit report only, or maybe both (personal and business?)

Most will report a default on your personal credit if there was a personal guarantee. You are correct that a default could affect both your business and personal credit reports and scores. We do not specifically cover SBA loans in our program.

Sorry to be so long winded. I just was wondering if your program covers the above questions.

Thanks for the great questions!

What Business Structure Is Best for Building Business Credit?

2007-08-02T07:09:00.001-07:00

Another question from a reader:

From my understanding of what I read on your website, if you want to build business credit, you need to form a corporation or LLC. And that business credit cards help establish your corporate credit. I am considering starting an LLC instead of a corporation. Therefore, I am wondering if your program is more geared towards corporations, or does it equally apply to LLCs as well? When you say establishing corporate credit, do you also include LLCs in regards to this statement?

Lastly, does your program go into any detail about when it might be best for a particular type of business or situation to form a corporation (c or s corps) versus an LLC? For instance, if one wants to do an online business only, or if one wanted to sell products wholesale to other retailers, ect.

Answer:

You can build business credit with any type of corporate structure, though it can be easier with an S or C Corporation. But business credit should not drive your choice of entities. We do discuss the different types of structures in our program, and our program also includes an audio interview with Garrett Sutton on the pros and cons of different entities. However, this is an important choice for your business.

To choose the right entity, I recommend you should talk with both a firm that specializes in setting up corporate structures, as well as your tax advisor.

Watch our for "one size fits all" solutions. There are some advisors, for example, who say "Everyone can use an LLC" but the wrong structure can be costly in the long run. The same thing is true of the companies that will help you incorporate for a very cheap fee. If you aren't in compliance, and don't stay in compliance, the benefits of having a corporate structure are lost.

I'd recommend you take advantage of the free 15-minute consultation offered by Corporate Direct to discuss which structure is right for the type of business you are planning on starting. Don't worry, you won't get a high pressure sales pitch.

If you do decide to join the Business Credit Success program, you'll enjoy a discount on their services.

2007-07-30T08:21:00.000-07:00

Business Credit Building Process -- Reader Question

2007-07-27T09:33:00.000-07:00

Here is a question from a prospective BusinessCreditSuccess.com member:

1:What is the ideal number of business credit cards to apply for at level 2?

2:How much corporate credit can I realistically expect to build over a 1 to 2 year time frame?

Answers:

Thanks for the great questions! First, many of the business credit cards don't report to the business credit reporting agencies such as Experian and D&B. If they don't report, they don't benefit your business credit rating. Just as with personal credit, you'll want to build a mix of credit references that report in order to build a solid business credit rating. These may include vendors, specialty cards (office supply or gasoline cards etc.) as well as a business card that does report.

Secondly, there are no magic numbers in this process. Every lender is different, and the amount of credit you will get depends on your business track record, credit history, the industry you are in, as well as your personal credit score. For a business that is only one to two years old, you can expect to have your personal credit reviewed for most loans. However, you may easily be able to get trade credit in the name of your business, and the less business debt that appears on your personal credit report, the better.

Building business credit is a process that occurs over time and the sooner you get started the better!

BusinessCreditSuccess.com Interviewed in Wall Street Journal Today

2007-07-24T10:48:00.001-07:00

BusinessCreditSuccess.com was mentioned today in an article about the use of business credit cards for small business funding in the Wall Street Journal.

The article included some examples of entrepreneurs who successfully - and not so successfully - used credit cards to help fund their businesses.

If you have a small business, I'd love to hear about your experience using credit cards as a source of capital. Feel free to weigh in here!

Understanding How to Build Business Credit

2007-07-17T09:09:00.000-07:00

Here's a great question we received from a subscriber to our alerts:

I've formed my corporate structure, got an active DUNS # and have a few vendors for a PayDex score.I'm having trouble finding a web hosting company and other needed vendors that bill Net 30 and report to DNB.Do you have CURRENT lists of vendors that report?

This seems like the only part of any corporate credit building program that's really worth it, a UP TO DATE database. Also, does your database have actual credit pulls, the limits granted or denied by those vendors?

Answer: Our list of vendors that report to DNB, Experian and SBFE are updated frequently and we are always looking for more. But it is no easy task. DNB does not publish those lists and, in fact, if you order a DNB report you won't see the individual creditors listed by name.

Unlike personal credit, where the lenders seem to automatically agree to report if they pull credit, the reporting for business credit is much more fragmented.

However, when our members alert us to a vendor they would like to report, we do everything we can to help them understand the value in doing so, and connect them with the business credit reporting agencies. We have found it to be a much easier process with Experian than with DNB, but as long as the vendor has enough references to report, it is achievable.

Keep in mind that while D&B is the granddaddy in the business credit reporting world, Experian and the SBFE (administered by Equifax) have also made significant process and, based on our experience, we believe that trend will continue. In addition, in our program we list numerous business credit reporting agencies that may influence your ability to get the loans and terms you need.

As for getting the specific details from lenders in terms of whom they approve or deny for credit and the size of the credit lines I don't hold out a lot of hope for obtaining that information. It's proprietary and competitive and I can't see lenders providing it.

We hope you'll find our Business Credit Success program useful, but if you don't, we offer a full money back guarantee. We hope you will join us!

PS: Our members will be joining us this month for a special teleclass with a credit reporting expert and insider. We hope you'll join us!

New Nevada Corporate Laws -- If You Own A Nevada Corp.

2007-07-06T07:48:00.000-07:00

If you have incorporated in Nevada or are thinking about it, you must be aware of the new Nevada Corporate Laws and how they will affect you. There are some important changes which go into effect July 1, 2007. In particular, they affect:

Bearer shares -- which have now been made illegal.

New disclosure rules for the ownership of Nevada corporations.

New rules regarding charging orders for Nevada corporations.

Most of the changes are positive, and I strongly recommend you read the article posted by the Sutton Law Center that explains them in more detail.

Mommy Millionaire: The Best Business Book I've Read In a Long Time

2007-07-05T12:58:00.000-07:00

Mommy Millionaire, the story of Kim Lavine's roller coaster ride from stay at home mom to successful business owner, is undoubtedly the best small business start-up book I've read in a long time. If you have a small business, and wonder whether you are going to lose your mind, your life savings, or everything in between, you absolutely must read this book.

If you haven't seen Kim's story on television or in magazines, she's the inventor of a unique heating pad called the Wuvit. She appears to be an overnight success, but the truth is that her business took her family to the verge of bankruptcy before she made it big.

One reason I loved reading Mommy Millionaire was Kim's brutally honest descriptions of the ups and downs of her business, combined with smart, detailed advice on the various steps involved in getting a venture off the ground. I've taken pages of notes and quotes, and to tempt you, here are just a few excerpts:

"Here’s what I learned from four years at Harvard Business School and a Wharton MBA:

1. Cash is Kind
2. Sell your mother for Cash if you can."
Page 201

"Constantly dealing with a cash shortage at the beginning is not a personal reflection of your inability to run a business; it’s just part of business."
Page 202

"There is nothing more dangerous than a person with…" Read page 264 to find out the answer.

When Kim had a terribly difficult year, ending up in debt and wondering if it was the worst thing that ever happened to her business, she found out it was the best thing that ever happened to her business. Read page 268 to find out why.

One point that came through several times in her book is that every self-made millionaire walks through fire to get to where they are. "Instant success" stories rarely reflect the sleepless nights, the cash flow crunches, the credit messes and the insane craziness of being self-employed.

The only quibble I have is with her advice on page 37 that you should close accounts you don't use to raise your credit score. For the newer Vantage credit scores that may be true, but for FICO credit scores, the most widely used, the advice is the opposite -- leave them alone.

Again, I can't recommend Mommy Millionaire highly enough as a great read for entrepreneurs as well as those who want to start their own business. Once you've read it, let me know if you agree!

Free Teleseminar The Corporate Advantage

2007-05-30T07:57:00.000-07:00

Last night Garrett Sutton and I presented our teleseminar, The Corporate Advantage, to Caroline Melberg's Small Business Mavericks clients. (We love her amazing free guide to Advertising Your Local Business On the Web! Make sure you go to her site to download it.)

The teleseminar covered important small business topics, such as:

Why should I incorporate?
What's the difference between an LLC, S Corporation, General Partnership?
The truth about Family Limited Partnerships
Why you should not use a personal credit card for your business
How to build a separate business credit rating
And much more...

You can download the mp3 recording for the teleseminar here.

Let us know what you think!

Can I max out my business credit line?

2007-05-29T10:48:00.000-07:00

Q: Just a quick question. My husband and I are expanding our business and we have business credit. We want to know if business credit like personal credit. If we have a 25,000 limit should we only do 12,500 or can we do more with business credit?

A: I assume your first concern is that maxxing out your business credit line will hurt your business credit score in the way that maxxing out a personal credit card will hurt your FICO score. However, the two are calculated much differently. At the same time you should double check to make sure your business line of credit isn't reported on your personal credit rating. In the member's area, we show you which business credit cards are advantageous that way.

Obviously, any time you can avoid debt it's good to do so. Depending on your capital needs, you may want to consider whether leasing can help you achieve your goals without taking on additional debt. In addition, you may want to line up additional credit before you take on more debt. It's always best to build credit before you really need it.

Good luck in your business!

Cool Tool for Overwhelmed Business Owners

2007-04-13T10:32:00.000-07:00

If you have a touch of entrepreneurial ADD like me, and you're always working on too many projects at once, here is a nifty free tool to help you keep organized: TaDaList.com. You can create online To Do lists, check off items as they get finished, share your lists, and email them to yourself.

More productivity hopefully means more income -- and that's what it's about!

Check it out and let me know what you think.

2007-01-22T07:07:00.000-08:00

Experian Study Highlight Small Business Benefits

2006-10-03T08:31:00.000-07:00

Owners of incorporated businesses have average incomes 35 percent higher than the overall population, according to a study by Experian. The global information solutions company recently analyzed more than 1.2 million small businesses and found that:

· Incorporated business owners have incomes 35 percent higher than the overall population. Comparatively, unincorporated owners’ incomes are 24 percent higher.
· Incorporated owners are 56 percent more likely to have completed college, whereas unincorporated owners are 29 percent more likely.
· Incorporated business owners are 94 percent more likely to exhibit “work hard, play hard” attitudes than unincorporated owners and the overall population.

I've recommended incorporating your business for a long time and this study is even more evidence of the benefit.

Welcome to the Business Credit Blog!

2006-09-25T10:19:00.000-07:00

I recently poured over the Sept. 2006 issue of Inc. magazine, intrigued by the profiles of entpreneurs who have made the prestigious Inc. 500 fastest-growing companies list. More than one mentioned maxxing out personal credit cards to get their venture off the ground, or pledging personal assets as collateral for their business loans.

That's great when it works, but I also talk to a lot of entpreneurs who relied on personal credit and didn't achieve success as quickly as they wanted. Now they are panicking as the creditors start calling.

Most small businesses will borrow at some point if the plan to grow. Building business credit so you can avoid using personal credit as much as possible is crucial. That's what this blog is about. I'll share business credit building strategies, and would love to hear yours as well.

And, while you're at it, pick up the Sept. 2006 issue of Inc. It's very inspirational and educational. I'm also glad to be quoted in the article on small business credit cards (page 42) -- and welcome your comments!