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Posts Tagged ‘Credit’
Steps in Setting-Up a Home-Based Business and Using Small Business Loans from Credit Card Services
Posted by admin in Home Based business Thursday, 10 December 2009 19:10 No Comments
Setting up a home-based business may be a more cost-effective alternative to setting up a major company, but it may still drain the limited resources of a small business owner. To keep the business going, small business loans will definitely be necessary. These can be availed of through credit card services. This article will show you how.
First, you need to set up your home based business. Do your research on the type of business you want to establish. Find out what licensing and zoning requirements you need to meet and ensure that you meet them all. Do not attempt to cut corners here.
Get the services of an accountant, even if only on a consultancy basis, to help you set up your books and records correctly from the start. Ask for help in determining deductions so that you can plan on your business expenses. Establish a routine for keeping strict records of all income and expenses right from day one. Keep all business related receipts, invoices, client records, bank statements, bank deposit slips and canceled checks.
Being home-based, you need to set aside a particular place in your home just for your business. Make sure it can accommodate all the necessary equipment. Check that you have the appropriate electrical outlets and have them installed if needed to avoid overloading your system. Set up rules to keep the area insulated from household noise and disturbances.
Have a business phone installed that is separate from your residential line. Avoid having your children answer the business line. Install an answering machine to take calls when you are out or occupied.
Get a post office box so that you can use that address in your official stationery and other documents, keeping your business profile professional. Hold client meetings in rented conference rooms or set business meetings in good restaurants.
One of the most important steps in setting up your home-based business is to acquire credit card services that will enable you to accept credit card payments and debit card payments. These credit card services provide all the necessary software and hardware for you to be able to process payments in person, online or by phone. This step alone already expands the customer base that you can access.
Credit card services will also serve you well once your home-based business begins to feel the need for additional capital. When you need to get small business loans, you will not have to approach banks which are most likely not sympathetic to small home-based businesses.
The need for small business loans usually comes when the home-based business is already at least a year old. At such time, your home-based business would have created an average monthly credit card sales record with your credit card services company. You can refer to that when you approach your credit card services company for small business loans, sometimes called cash advances.
Credit card services do offer small business loans to their clients based on average monthly credit card sales, without the need for any collateral. The aforementioned average monthly credit card sales guarantee your company’s capability to pay the small business loans. Payments will be automatically deducted as a percentage of future credit card sales. This arrangement frees you from worrying about the amortization for your small business loans, too.
As soon as you pay up your small business loans completely, you are automatically eligible for new small business loans for as long as your home-based business is getting a good monthly average in credit card sales. With the help of credit card services, you can continue to expand and grow your home-based business.
Top 10 Reasons to Start Business Credit in 2009
Posted by admin in startbusiness Thursday, 10 December 2009 06:45 No Comments
Copyright (c) 2009 Marco Carbajo
Entrepreneurs and small business owners who have a separate legal entity for their business have a unique opportunity that no other individual or sole proprietor has. It’s the opportunity to start business credit by establishing a business credit profile that is completely separate from a personal credit profile.
The main problem still facing today’s small business owner is fewer than 10 percent know about or truly understand how business credit is established and tracked-and how it affects their lives and businesses. Statistics even show that over 65% off all small businesses use credit cards on a regular basis; but the problem is less than half of those credit cards are actually in the business name. The others continue to use the owner’s personal credit cards for business transactions.
One of the key advantages of having business credit is instead of putting your personal credit and assets at risk every time your company requires financing you would now be in a position to secure the financing you need with your businesses’ credit. Here is the ‘Top 10 Reasons Why You Should Start Business Credit Now.’
1.Any debt you accumulate for the business would only report to your business credit file not your personal credit file.
2.Eliminate the co-mingling of funds’ and this includes the “co-mingling” of credit profiles so you won’t jeopardize the protection of the corporate veil.
3.Protect your personal assets and liability when you get approved strictly using your businesses’ credit profile.
4.Improve your personal debt to credit limit ratios by transferring the balances of business debt used with your personal credit to your business credit.
5.Eliminate personal liability you have on your existing business debt by balance transfer from personal credit to your business credit.
6.Increase the credit limit capacity for you and your family.
7.Improve the appearance of your businesses’ funding capacity and stability.
8.Eliminate inquiries on personal credit when applying for business financing.
9.Increase your businesses’ ability to obtain cash credit 10 to 100 times greater then you can obtain personally.
10.Last but not least you SAVE MONEY! For example, an individual might pay up to 13% interest on a $100,000 line of credit whereas a business could qualify for an interest rate of 7%. That would save you almost $40,000 in interest alone.
Some other benefits include:
◦Business credit cards have much higher limits than personal credit cards.
◦Having the larger cash lines available for unforeseen expenses like expansion,equipment, operations or fulfillment
◦Prevent the risk of damaging your personal credit
◦You can build business credit even if you have bad personal credit
◦Prevent the limits that lenders will impose on you for personal credit for you and your family’s needs
◦Reduce your tax burden and improve accounting
Still not convinced you need to start business credit? Every business will at one point require an influx of cash in order to cover operating expenses, expansion costs, legal fees, inventory or a range of other items the business may require in order to operate. The worst mistake you can make is seeking funding when your business needs it most. Lenders extend cash credit lines to businesses that don’t need the capital. Start digging your well before your business gets thirsty!
When you ask a small business owner how they funded their start up the answers usually are:
◦Personal credit cards
◦Tapped into home equity line
◦Personal loan from the bank
◦Personal loan from family & friends
◦Private investors
One of the many risks that business owners face is using their personal assets as collateral or guarantee for business loans and financing. If the business owner defaults on a loan then, valuable items like a car, house, or bank account can be vulnerable to creditors’ claims.Instead of jeopardizing your personal credit and assets every time your company requires financing, you can use the business’ credit rating to secure the financing you need with even more favorable terms and lower interest rates.
About the Author
Marco Carbajo is a business credit specialist that shows entrepreneurs, small business owners, and real estate investors how to separate personal credit from business credit. Want to learn more about how to start building business credit and obtain unlimited financing for your business? Claim Marco’s popular FREE business credit seminar ($597 Value),available at:=>
http://www.businesscreditblogger.com