I just wanted to take this time to say to everybody I hope that you have an AWESOME
Thanksgiving.
We will see you on the other side, a little heavier but still here.
Pat
www.opportunitycreator.com
Tuesday, November 25, 2008
Tuesday, September 30, 2008
Are You Listening?
I recently overheard a conversation between a salesmanand his prospect. It started off like many interactions.The salesman asked the prospect a few questions, undoubtedly with the intent of building rapport.
And fortunately, the prospect was more than happy to talk...sharing stories about his wants and needs.
But, after a few questions, it became apparent the salesmanwasn't truly listening. At one point, the salesman asked a question the prospect had just finished answering. Needlessto say, the sale was lost.
Successful products, services, companies, salesman, etc. come from listening to customers and prospects and adaptingto their needs and wants. But too many business owners and salespeople are inflexible and follow their own methods and ideas (whether they work or not).
If you want to improve your business, listen to your customersand prospects. They will tell you how to win and keep their business...if you give them a chance. You never know when your next big idea is one a customer passes on to you.
To Your Business Success
Pat Gage
www.10stepstomoney.com
And fortunately, the prospect was more than happy to talk...sharing stories about his wants and needs.
But, after a few questions, it became apparent the salesmanwasn't truly listening. At one point, the salesman asked a question the prospect had just finished answering. Needlessto say, the sale was lost.
Successful products, services, companies, salesman, etc. come from listening to customers and prospects and adaptingto their needs and wants. But too many business owners and salespeople are inflexible and follow their own methods and ideas (whether they work or not).
If you want to improve your business, listen to your customersand prospects. They will tell you how to win and keep their business...if you give them a chance. You never know when your next big idea is one a customer passes on to you.
To Your Business Success
Pat Gage
www.10stepstomoney.com
Wednesday, August 6, 2008
George Ross Talks about Credit Lines
Dear Friend:
Recently I had the pleasure of meeting Mr.
George Ross, who is Executive Vice
President and Senior Counsel of the
Trump Organization and co-star of the
"The Apprentice". He gave a great speech
.... What an amazing person he is.
First let me tell you that when George told
us that he was 87 years old I just about fell
off my chair. Here looks great for his age
and is a very entertaining speaker. I was
fortunate enough to chat with George for a
while about his experiences.
The message that George was stressing in his
speech was that everyone, no matter what your
financial situation is, needs to get lines of
credit. Especially when you don't need them.
You see, that's when the banks are more willing
to lend.
It's like when you're looking to find a companion
of the opposite sex and you go out with some
friends. Doesn't it always seem like the person
who is already attached gets all the attention?
It's the same idea here. The less the desperation,
the more attention you receive (from the banks,
that is).
Now, you'd think that the Trump Organization, with
all their money would just reach into their deep
pockets and pull out a wad of cash from "Hip Nation
Bank", wouldn't you?
NO way! According to George, they do exactly what
I've been teaching you. And that's getting Business
Lines of Credit. And doing it before you need it.
Now, do you think that if Trump, a billionaire,
uses lines of credit, that it might be a good idea for
you and your business to use lines of credit as well?
Do you think following the lead of a billionaire could
lead you down that same path?
As I always say, if you continue to do the same thing
over and over again, you will continue to get the same
results. Do you think you deserve to be rich? I think
you do. Do you want your business to be successful?
Then follow the leads of the big guys and take your
life and business to the next level.
To Your Business Success,
Pat Gage
www.10stepstomoney.com
Recently I had the pleasure of meeting Mr.
George Ross, who is Executive Vice
President and Senior Counsel of the
Trump Organization and co-star of the
"The Apprentice". He gave a great speech
.... What an amazing person he is.
First let me tell you that when George told
us that he was 87 years old I just about fell
off my chair. Here looks great for his age
and is a very entertaining speaker. I was
fortunate enough to chat with George for a
while about his experiences.
The message that George was stressing in his
speech was that everyone, no matter what your
financial situation is, needs to get lines of
credit. Especially when you don't need them.
You see, that's when the banks are more willing
to lend.
It's like when you're looking to find a companion
of the opposite sex and you go out with some
friends. Doesn't it always seem like the person
who is already attached gets all the attention?
It's the same idea here. The less the desperation,
the more attention you receive (from the banks,
that is).
Now, you'd think that the Trump Organization, with
all their money would just reach into their deep
pockets and pull out a wad of cash from "Hip Nation
Bank", wouldn't you?
NO way! According to George, they do exactly what
I've been teaching you. And that's getting Business
Lines of Credit. And doing it before you need it.
Now, do you think that if Trump, a billionaire,
uses lines of credit, that it might be a good idea for
you and your business to use lines of credit as well?
Do you think following the lead of a billionaire could
lead you down that same path?
As I always say, if you continue to do the same thing
over and over again, you will continue to get the same
results. Do you think you deserve to be rich? I think
you do. Do you want your business to be successful?
Then follow the leads of the big guys and take your
life and business to the next level.
To Your Business Success,
Pat Gage
www.10stepstomoney.com
Thursday, July 31, 2008
Business Credit Cards.
To any business, either a start-up or established, business credit cards can be very valuable financial tools if managed properly. Remember also, that because they’re business credit cards, they are unsecured and don’t show up on the owners credit report.
The balances will not show up on your credit report and that won’t over leverage you. Unsecured means there is no collateral put up to get these business credit cards, no house, no car, no kids, wife etc. And did I say that these business credit cards don’t show up on your personal credit report! That is huge!
But if used improperly, it can have a devastating affect on your business’ credit profile, and hence, your business itself.
Managing your business credit cards doesn’t require an MBA from Harvard, or a financial specialist looking over your shoulder every time you plunk it down.
But it does require careful monitoring, and plain old common sense. Here are a few tips you can use to get the most from your business credit cards:
* Always apply at your primary bank first. Why? Because you’ve already established a banking relationship which can pave the way for an easy application process. In short – they know you. Once you get the business credit cards, and pay them in a timely manner, it will increase your credit worthiness in the eyes of the bank. This will be of significant help when you apply for
additional business loans later on.
* Never co-mingle your business credit cards with your personal credit cards. However, here’s a little secret to the game. If you have business debt on your personal credit cards, transfer balance the debt to your business credit cards and this will immediately improve your personal credit score by lowering your debt to income ratio. This is a huge benefit of being a business owner. This will also help you at tax time.
* Once your business credit is established, you’ll be deluged by special offers from credit card companies on a daily basis. When you’re invited to apply and the offer is good, then apply. Remember this: Just because you have applied and received several business credit cards, doesn’t mean you have to use them immediately.
It’s always a good idea to have extra “Rainy Day” money available. Every business goes through ups and downs and having the money available can be invaluable during one of those down times. It’s always easier to get money when you don’t need it.
By all means, use the grace period when paying your business credit cards. Most providers of business credit cards offer a 21-day grace period before payment is due. This can be a big help in improving your cash flow, and it’s built-in for you to use. Don’t abuse it, and don’t pay later than the grace period deadline, however.
Like many business transactions today, you can pay your business credit card bill online. This may not sound like such a big deal, but when you think of the time and effort it takes to write out and mail a check, it’s really a good deal. Especially since the mail can sometimes be unpredictable.
Knowing you can choose the exact date your bill is paid, is priceless. Do not pay your credit card bills late! Yes, take advantage of the grace period, but paying late, especially if it develops into a habit, will end up costing a lot more than the actual bill. Late fees will bring about higher interest rates.
But more importantly, late payments will go straight to your business’ credit profile – and you don’t want it there, especially if you plan on trying to get a line of credit from your bank or lender in the near future.
Pay the bills on time, if possible.
Finally, always remember that your business credit cards can be a very effective tool in managing your company’s finances. But like any tool, if handled improperly, it can cause irreparable harm – in this case, to your company’s business financial profile. Use it wisely! But don't be scared of them!
Any thoughts?
Pat Gage
http://www.10stepstomoney.com
The balances will not show up on your credit report and that won’t over leverage you. Unsecured means there is no collateral put up to get these business credit cards, no house, no car, no kids, wife etc. And did I say that these business credit cards don’t show up on your personal credit report! That is huge!
But if used improperly, it can have a devastating affect on your business’ credit profile, and hence, your business itself.
Managing your business credit cards doesn’t require an MBA from Harvard, or a financial specialist looking over your shoulder every time you plunk it down.
But it does require careful monitoring, and plain old common sense. Here are a few tips you can use to get the most from your business credit cards:
* Always apply at your primary bank first. Why? Because you’ve already established a banking relationship which can pave the way for an easy application process. In short – they know you. Once you get the business credit cards, and pay them in a timely manner, it will increase your credit worthiness in the eyes of the bank. This will be of significant help when you apply for
additional business loans later on.
* Never co-mingle your business credit cards with your personal credit cards. However, here’s a little secret to the game. If you have business debt on your personal credit cards, transfer balance the debt to your business credit cards and this will immediately improve your personal credit score by lowering your debt to income ratio. This is a huge benefit of being a business owner. This will also help you at tax time.
* Once your business credit is established, you’ll be deluged by special offers from credit card companies on a daily basis. When you’re invited to apply and the offer is good, then apply. Remember this: Just because you have applied and received several business credit cards, doesn’t mean you have to use them immediately.
It’s always a good idea to have extra “Rainy Day” money available. Every business goes through ups and downs and having the money available can be invaluable during one of those down times. It’s always easier to get money when you don’t need it.
By all means, use the grace period when paying your business credit cards. Most providers of business credit cards offer a 21-day grace period before payment is due. This can be a big help in improving your cash flow, and it’s built-in for you to use. Don’t abuse it, and don’t pay later than the grace period deadline, however.
Like many business transactions today, you can pay your business credit card bill online. This may not sound like such a big deal, but when you think of the time and effort it takes to write out and mail a check, it’s really a good deal. Especially since the mail can sometimes be unpredictable.
Knowing you can choose the exact date your bill is paid, is priceless. Do not pay your credit card bills late! Yes, take advantage of the grace period, but paying late, especially if it develops into a habit, will end up costing a lot more than the actual bill. Late fees will bring about higher interest rates.
But more importantly, late payments will go straight to your business’ credit profile – and you don’t want it there, especially if you plan on trying to get a line of credit from your bank or lender in the near future.
Pay the bills on time, if possible.
Finally, always remember that your business credit cards can be a very effective tool in managing your company’s finances. But like any tool, if handled improperly, it can cause irreparable harm – in this case, to your company’s business financial profile. Use it wisely! But don't be scared of them!
Any thoughts?
Pat Gage
http://www.10stepstomoney.com
Wednesday, July 30, 2008
What Banks Want For Business Credit Lines
Getting a business credit line from a bank isn’t the easiest thing to do – especially if you’re a start-up. Seed money, working capital, and other forms of loans, require that you pass a series of credit related checks.
So what do banks look for and what can you expect?
We’re going to tell you.
High on the list of establishing business credit is, of course, your personal credit history. No surprise there. If you’re a start-up, lenders will be looking at your personal credit. Banks won’t want to see late payments, missed payments, liens or a bankruptcy. The negative impact of these and other credit deficiencies could have a substantial impact on your loan request. A late payment, here or there, won’t kill your chances, but if there’s a pattern of late payments, it very well could. If, however, you have a good explanation as to why these credit deficiencies exist, your chances of approval could increase. It’s probably a good idea to check your personal credit reports to clear up any possible discrepancies that could adversely affect your application. If your business is a start up, you may need to use your personal credit in the beginning, and while you’re doing that you can begin to establish your business credit profile as well.
But let’s say you’re already in business, and haven’t established a business credit history yet. Now it’s your business’ credit that comes into play. Dun and Bradstreet, Experian, and Equifax are often the sources the banks will turn to when reviewing your business credit reports, including history, public record information, company background and supplier payment history. Whether you’ve been in business one day or 10 years, if you haven’t established a business credit profile, then your business is still at Day One. But it’s never too late to get started. If you’re a start-up, the bank is going to look for some solid financial projections. Remember the projections you use, are based on the assumption that you’re going to get the financing needed. Work with a financial specialist to put your numbers together. The money you spend on a financial consultant will be well worth it, and the bank will appreciate your professionalism.
If you’re already in business, the same applies. But now you have real figures to present to the bank. Assuming that they’re good, that should be it, right? Wrong. The bank is going to want to see what you want the loan for. Working capital, expansion, new equipment are always good. A loan to take your top producers for a rewards week in the Caribbean is not.
Collateral doesn’t have to come into play when you apply for business credit. Why is this? Because the banks lend business lines of credit without it. They’re called unsecured credit cards and unsecured lines of credit. These are great avenues for any business that perhaps doesn’t have the business collateral. It’s never a good idea to use personal collateral to fund your business. The banks will generally lend up to $50,000 without collateral on these types of loans. The banks do require a strong business credit profile and sometimes a good personal credit profile and these can be easily established and obtained. Lenders know that there’s a strong correlation between your commitment to your business and the loan being repaid.
In the end, getting business credit is all about the figures. Do they or don’t they work. If they do, and if you present your case in a straightforward manner, you’ll put your business in the best light, and in all probability, get the loan. Always remember that the bank wants to lend you money. It’s up to you to show that you can repay the loan.
Pat Gage, The Opportunity Creator, and a leading expert in the field of business credit has helped a number of clients target his specialty, starting, expanding, and growing their businesses through his trademarked 10 Steps to Money System. The Opportunity Creator is not only a sought after business credit coach but also a national speaker. For more information on any topic discussed, visit Gage’s site at www.10stepstomoney.com
So what do banks look for and what can you expect?
We’re going to tell you.
High on the list of establishing business credit is, of course, your personal credit history. No surprise there. If you’re a start-up, lenders will be looking at your personal credit. Banks won’t want to see late payments, missed payments, liens or a bankruptcy. The negative impact of these and other credit deficiencies could have a substantial impact on your loan request. A late payment, here or there, won’t kill your chances, but if there’s a pattern of late payments, it very well could. If, however, you have a good explanation as to why these credit deficiencies exist, your chances of approval could increase. It’s probably a good idea to check your personal credit reports to clear up any possible discrepancies that could adversely affect your application. If your business is a start up, you may need to use your personal credit in the beginning, and while you’re doing that you can begin to establish your business credit profile as well.
But let’s say you’re already in business, and haven’t established a business credit history yet. Now it’s your business’ credit that comes into play. Dun and Bradstreet, Experian, and Equifax are often the sources the banks will turn to when reviewing your business credit reports, including history, public record information, company background and supplier payment history. Whether you’ve been in business one day or 10 years, if you haven’t established a business credit profile, then your business is still at Day One. But it’s never too late to get started. If you’re a start-up, the bank is going to look for some solid financial projections. Remember the projections you use, are based on the assumption that you’re going to get the financing needed. Work with a financial specialist to put your numbers together. The money you spend on a financial consultant will be well worth it, and the bank will appreciate your professionalism.
If you’re already in business, the same applies. But now you have real figures to present to the bank. Assuming that they’re good, that should be it, right? Wrong. The bank is going to want to see what you want the loan for. Working capital, expansion, new equipment are always good. A loan to take your top producers for a rewards week in the Caribbean is not.
Collateral doesn’t have to come into play when you apply for business credit. Why is this? Because the banks lend business lines of credit without it. They’re called unsecured credit cards and unsecured lines of credit. These are great avenues for any business that perhaps doesn’t have the business collateral. It’s never a good idea to use personal collateral to fund your business. The banks will generally lend up to $50,000 without collateral on these types of loans. The banks do require a strong business credit profile and sometimes a good personal credit profile and these can be easily established and obtained. Lenders know that there’s a strong correlation between your commitment to your business and the loan being repaid.
In the end, getting business credit is all about the figures. Do they or don’t they work. If they do, and if you present your case in a straightforward manner, you’ll put your business in the best light, and in all probability, get the loan. Always remember that the bank wants to lend you money. It’s up to you to show that you can repay the loan.
Pat Gage, The Opportunity Creator, and a leading expert in the field of business credit has helped a number of clients target his specialty, starting, expanding, and growing their businesses through his trademarked 10 Steps to Money System. The Opportunity Creator is not only a sought after business credit coach but also a national speaker. For more information on any topic discussed, visit Gage’s site at www.10stepstomoney.com
Start A Business With Lousy Credit
You may be trying to start a business, or have one that’s in its initial stages. Your idea is great, your plan is flawless, and your product or service is ready for the fast lane. Only problem is, that super-charged, can’t-miss-small-business of yours is sitting by the side of the road. It’s stuck, and it’s out of gas.
The analogy may not be great, but if you’re in that type of situation, you know what it’s all about. Your personal credit rating is less than stellar. You found out just how bad, when the bank’s Business Loan Officer gave you a look of horror when you told him what you wanted to borrow, and why.
Let’s face it, he probably couldn’t wait to get you out of his office fast enough. Is there anything you can do to jump-start this situation? Yes there is. In fact, there a number of avenues you need to explore.
First things first. There are three credit reporting agencies, Equifax, Experian and TransUnion. You want to get your tri-merge credit report, which is a report from all 3 credit bureaus. Once you get them in hand, you’ll have a clear idea of exactly where you stand – and just as importantly, why.
Review each and every report. Look for errors, because (guess what), the credit bureaus do make them. Maybe a bill they’re reporting as unpaid, involved a dispute. Maybe a credit card purchase wasn’t yours. If you find any glitches, report them immediately to the credit bureau involved. You can also enlist the services of an established credit repair company, if you’re not sure how to handle the disputes yourself.
Creating a business credit profile can also be an answer to your credit issue. By creating a business credit profile, you can start establishing credit for your business, which is separate than your personal FICO score. Establishing a business credit profile can help you get your business started while working to improve your personal FICO score. Once you establish your business credit profile your business can start applying for business credit cards and other types of business financing.
But, when you get business credit cards, keep your personal and business credit separate – very separate. Many folks fall prey to the temptation of using business credit cards for personal expenses. This is more than a red flag to business lenders, it’s a giant red balloon. Commingling your funds can cause many problems for your accountant and attorney. When you commingle your personal and business funds, you open the door to lawsuits and your bookkeeping becomes a nightmare.
Business credit cards can be a great source of financing. One misconception is that business credit cards have a high interest rate. This just isn’t true. Many business credit cards fall in the interest rate range of 8-14%. But more importantly remember this; it’s not always the cost of money that’s important, but the availability of money. Wouldn’t you like to have an extra $30,000, $50,000, or even $100,000 right now to start or expand your business? Make sure you are diligent about making payments on time and, two things will happen: First, the credit card company will court your business, and probably offer you a credit line increase. Second, your credit standing will improve with the bank. Bank’s love it when you’ve demonstrated the ability to pay off a loan – even if it’s not theirs.
Finally, make certain that you use your credit wisely, and strictly for the business. And more importantly, to improve the business – new equipment or hiring employees, marketing, whatever it takes. This will show a Loan Officer that you’re serious about what you’re doing, and will make you a more attractive loan candidate.
Pat Gage, The Opportunity Creator, and a leading expert in the field of business credit has helped a number of clients target his specialty, starting, expanding, and growing their businesses through his trademarked 10 Steps to Money System. The Opportunity Creator is not only a sought after business credit coach but also a national speaker. For more information on any topic discussed, visit Gage’s site at www.10stepstomoney.com
The analogy may not be great, but if you’re in that type of situation, you know what it’s all about. Your personal credit rating is less than stellar. You found out just how bad, when the bank’s Business Loan Officer gave you a look of horror when you told him what you wanted to borrow, and why.
Let’s face it, he probably couldn’t wait to get you out of his office fast enough. Is there anything you can do to jump-start this situation? Yes there is. In fact, there a number of avenues you need to explore.
First things first. There are three credit reporting agencies, Equifax, Experian and TransUnion. You want to get your tri-merge credit report, which is a report from all 3 credit bureaus. Once you get them in hand, you’ll have a clear idea of exactly where you stand – and just as importantly, why.
Review each and every report. Look for errors, because (guess what), the credit bureaus do make them. Maybe a bill they’re reporting as unpaid, involved a dispute. Maybe a credit card purchase wasn’t yours. If you find any glitches, report them immediately to the credit bureau involved. You can also enlist the services of an established credit repair company, if you’re not sure how to handle the disputes yourself.
Creating a business credit profile can also be an answer to your credit issue. By creating a business credit profile, you can start establishing credit for your business, which is separate than your personal FICO score. Establishing a business credit profile can help you get your business started while working to improve your personal FICO score. Once you establish your business credit profile your business can start applying for business credit cards and other types of business financing.
But, when you get business credit cards, keep your personal and business credit separate – very separate. Many folks fall prey to the temptation of using business credit cards for personal expenses. This is more than a red flag to business lenders, it’s a giant red balloon. Commingling your funds can cause many problems for your accountant and attorney. When you commingle your personal and business funds, you open the door to lawsuits and your bookkeeping becomes a nightmare.
Business credit cards can be a great source of financing. One misconception is that business credit cards have a high interest rate. This just isn’t true. Many business credit cards fall in the interest rate range of 8-14%. But more importantly remember this; it’s not always the cost of money that’s important, but the availability of money. Wouldn’t you like to have an extra $30,000, $50,000, or even $100,000 right now to start or expand your business? Make sure you are diligent about making payments on time and, two things will happen: First, the credit card company will court your business, and probably offer you a credit line increase. Second, your credit standing will improve with the bank. Bank’s love it when you’ve demonstrated the ability to pay off a loan – even if it’s not theirs.
Finally, make certain that you use your credit wisely, and strictly for the business. And more importantly, to improve the business – new equipment or hiring employees, marketing, whatever it takes. This will show a Loan Officer that you’re serious about what you’re doing, and will make you a more attractive loan candidate.
Pat Gage, The Opportunity Creator, and a leading expert in the field of business credit has helped a number of clients target his specialty, starting, expanding, and growing their businesses through his trademarked 10 Steps to Money System. The Opportunity Creator is not only a sought after business credit coach but also a national speaker. For more information on any topic discussed, visit Gage’s site at www.10stepstomoney.com
Getting Credit To Finance Your Business
Let’s say your business needs a capital infusion. Things are going well, but you need extra cash to expand, hire new employees, make improvements, increase marketing – whatever. Where do you turn to get the cash you need? Can you leverage your business to fund your goals? And how do you do it? Actually, there are more ways of getting funding than you probably thought.
Assuming your business is in good shape, pays its bills promptly, has a good cash flow, and is professionally managed, you have a lot of options. You can probably narrow down the list by scratching off Venture Capitalists and Angels. The former are only interested in lending you money if you plan to go public at some point. Angels (not the celestial kind!), might be interested if you have a lock on the, “next big thing,” but only if the payoff is calculated in the tens-of-millions of $$. You may not be quite there yet.
What does that leave? One valuable option is to start creating a business credit profile for your business. Creating a business credit profile can be done easily and can offer any number of business loans, from Working Capital, to Lines of Credit, to Construction, to Term Loans, to even business credit cards. If you already have a good working relationship with your Business Loan Officer, this is probably the first place to look, once you have your business credit profile in place. They know you, and you’ll be able to skip much of the red tape. This makes sense a lot of the time. But hold on! You have quite a few other options available.
Business credit cards, for example. All major business credit card companies have branched into commercial lending. Obtaining cash from this method is usually easier than other sources. However, this method of financing still needs an established business credit profile. Because lending institutions don’t lend money to sole proprietors. That’s called a personal loan. This is one option to be considered. Business credit cards can be useful in many ways and have reasonable interest rates as well.
Once you have established your business entity, you will be receiving numerous offers from business credit card companies to apply. This is a great way to have access to capital. Remember that your business credit cards do not show up on your personal credit report. So any business debt that appears on your personal credit can be transferred to your business credit card, freeing up your personal debt to income ratio. This will increase your personal credit score almost immediately. Many times the credit card companies will offer 0% interest for a limited time (I’ve seen up to one year), then have a reasonable interest rate afterwards (anywhere from 8-14%). That’s far better than a hard money lender or private lender.
Then there’s unsecured lines of credit. The objective is to stimulate micro-enterprises and provide unsecured loans of up to $50,000 to small businesses. You can apply for unsecured lines of credit through your bank or many other institutions that offer them. Once again your business credit profile will need to be in place. Typically, an unsecured line of credit has an interest rate of Prime plus one or two points, depending on some factors that are taken into account. But the bonus here is that the money is unsecured which means you don’t have to put up any collateral for it. This type of lending does not require any financial statements as well. This gives you flexibility especially if your business doesn’t have a great cash flow yet. This is a great method for obtaining capital for your business whether it’s to expand, advertise, or market a new idea.
Pat Gage, The Opportunity Creator, and a leading expert in the field of business credit has helped a number of clients target his specialty, starting, expanding, and growing their businesses through his trademarked 10 Steps to Money System. The Opportunity Creator is not only a sought after business credit coach but also a national speaker. For more information on any topic discussed, visit Gage’s site at www.10stepstomoney.com
Assuming your business is in good shape, pays its bills promptly, has a good cash flow, and is professionally managed, you have a lot of options. You can probably narrow down the list by scratching off Venture Capitalists and Angels. The former are only interested in lending you money if you plan to go public at some point. Angels (not the celestial kind!), might be interested if you have a lock on the, “next big thing,” but only if the payoff is calculated in the tens-of-millions of $$. You may not be quite there yet.
What does that leave? One valuable option is to start creating a business credit profile for your business. Creating a business credit profile can be done easily and can offer any number of business loans, from Working Capital, to Lines of Credit, to Construction, to Term Loans, to even business credit cards. If you already have a good working relationship with your Business Loan Officer, this is probably the first place to look, once you have your business credit profile in place. They know you, and you’ll be able to skip much of the red tape. This makes sense a lot of the time. But hold on! You have quite a few other options available.
Business credit cards, for example. All major business credit card companies have branched into commercial lending. Obtaining cash from this method is usually easier than other sources. However, this method of financing still needs an established business credit profile. Because lending institutions don’t lend money to sole proprietors. That’s called a personal loan. This is one option to be considered. Business credit cards can be useful in many ways and have reasonable interest rates as well.
Once you have established your business entity, you will be receiving numerous offers from business credit card companies to apply. This is a great way to have access to capital. Remember that your business credit cards do not show up on your personal credit report. So any business debt that appears on your personal credit can be transferred to your business credit card, freeing up your personal debt to income ratio. This will increase your personal credit score almost immediately. Many times the credit card companies will offer 0% interest for a limited time (I’ve seen up to one year), then have a reasonable interest rate afterwards (anywhere from 8-14%). That’s far better than a hard money lender or private lender.
Then there’s unsecured lines of credit. The objective is to stimulate micro-enterprises and provide unsecured loans of up to $50,000 to small businesses. You can apply for unsecured lines of credit through your bank or many other institutions that offer them. Once again your business credit profile will need to be in place. Typically, an unsecured line of credit has an interest rate of Prime plus one or two points, depending on some factors that are taken into account. But the bonus here is that the money is unsecured which means you don’t have to put up any collateral for it. This type of lending does not require any financial statements as well. This gives you flexibility especially if your business doesn’t have a great cash flow yet. This is a great method for obtaining capital for your business whether it’s to expand, advertise, or market a new idea.
Pat Gage, The Opportunity Creator, and a leading expert in the field of business credit has helped a number of clients target his specialty, starting, expanding, and growing their businesses through his trademarked 10 Steps to Money System. The Opportunity Creator is not only a sought after business credit coach but also a national speaker. For more information on any topic discussed, visit Gage’s site at www.10stepstomoney.com
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