Your company’s image is a huge part of it’s credibility. There are actually creditors and vendors who will not finance your company if you don’t have a website or aren’t listed in the 411 directory. Yep, that’s right! It is equally important your company complies with both local and federal laws and ordinances, thus supporting the integrity of your business entity. The truth is lenders are not required to share their lending criteria or compliance formulas used to determine which businesses they approve or deny.
Does this sound familiar:
You need to borrow capital for inventory, new space, upgraded equipment, a new phone system, internet marketing, expansion, or simply to have an emergency cash cushion. You are confident in approaching a lender to request a business line of credit, after all, your business is profitable and you have your business checking account with this lender. They are familiar with your business. The process couldn’t get any easier, right? You can breath a sigh of relief.
Finally, you receive a letter in the mail from the lender, “Dear ABC Company, we regret to inform you that your request for credit has been denied.” There is usually no understandable explaination in the letter other than your business did not meet their lending criteria.
80% of small businesses are forced to close their doors forever because they could’nt get the capital they so desperately needed. Don’t become another statistic put your business in the hands of a Business Cash Flow Strategist that is familiar with compliance requirements so you can get the funding needed to grow a successful business.
Shameca Tankerson, is a Speaker, Trainer, Author, and Cash Flow Success Mentor to entrepreneurs and service professionals. Using a proven system, she opens a candid dialogue about money that teaches her clients how to breakthrough to their next income level, create consistent cash flow and expand into a cash flowing business with a new collaborative business model that is liberating, Inspiring and Powerful. To Get your F.R.E.E. “Spark Your Cash Flow Financial Success Kit” – Making Room For Money: 5 Financial Mistakes Entrepreneurs Make That Sabotage Their Cash Flow (And How To Avoid Them). Visit: http://www.MakingRoomForMoney.com
As the owner of a company the task of obtaining capital for your business can be quite intimidating. The reason most businesses are unsuccessful because they don’t have the slightest clue where to begin in the funding process. This is why seeking expert assistance is so important. Here are 5 compelling reasons your company needs a Cash Flow Strategist to obtain Capital.
1. Out of the 7 million businesses who apply for funding each year, 5.6 million don’t qualify at banks.
2. The Small Business Administration reports that 97% of business loan applications fail.
3. 80% of businesses fail in the first 5 years due to lack of capital
4. Lenders are placing more emphasis on business credit scores. The business MUST have three separat business credit scores.
5. Attempting to obtain business financing using personal credit can severely limit the amount of capital available to the business.
This is why many business owners turn to a Business Finance Consultant to help them create a funding plan, establish their business credit and navigate the business funding maze.
Shameca Tankerson, is a Speaker, Trainer, Author, and Cash Flow Success Mentor to entrepreneurs and service professionals. Using a proven system, she opens a candid dialogue about money that teaches her clients how to breakthrough to their next income level and expand into a cash flowing business with a new collaborative business model that is liberating, Inspiring and Powerful. To Get your F.R.E.E. “Spark Your Cash Flow Financial Success Kit” – Making Room For Money: 5 Financial Mistakes Entrepreneurs Make That Sabotage Their Cash Flow (And How To Avoid Them). Visit: http://www.MakingRoomForMoney.com
Costly Mistake #9: Trying the Do-It-Yourself method of Building Business Credit.
One of the biggest mistakes a business owner can make is trying to save on expenses by doing administrative task themselves. In theory, it sounds like a prudent idea. Right? Paying a consultant to reasearch financing options and complete loan applications can’t be financial feasible, right? It is so easy for a business owner to convince themselves they are saving money by setting up their own credit profile with D&B and applying for credit on their own.
On the surface it may appear to be cost effecient to “do-it-yourself” but bussiness owners ofter neglect to factor in the true cost of their time. The truth is as a CEO or Entreprenuer your time is best spent running your business! Not to mention making mistakes like inaccurately building the companies profile, missing compliance items, and prematurely applying for credit and loans can cost you much more than time.
Two things to remember:
Costly Mistake #8: Sticking with Traditional Financing Methods Because That’s The Way It’s Always Been Done!
The Definition of Insanity: Doing the same thing over and over again expecting different results! How many bank applications do you have to try before you figure out there has to be a better way? It’s time to stop doing what’s always been done because the way it’s always been done is no longer the model for success.
Consider the Facts:
- 80% of Small Businesses Faile within the first 5 years (Reason: LACK OF CAPITAL)!
- 70% Companies that apply for financing from Banks DO NOT QUALIFY!
- 90% of America’s Small Businesses have no idea what true business credit is!
It is time we get a real life MBA education and stop going to mom and dad for advice on business finances. It’s time to stop a continuing losing tradition. Learn the difference between traditional business credit (reported to your personal credit but in the business name) and “True” Business Credit.
Learn how business tycoons like Donald Trump can file bankruptcy twice and still get credit for million dollar projects. Learn the “secret set of business credit rules” the wealthy use everyday. Learn why using your personal credit to build a business perpetuates the insanity.
Costly Mistake #7: Thinking Your Personal Credit Score is the Same at All Credit Bureaus and Has No Effect on Your Ability to Secure Business Credit.
The algorithms that the credit scoring agencies use are the same. The distinction is what data gets reported. some creditors may only report to Transunion. The main reason is it cost to report to the credit agencies and they do not want to put in the labor or cost to report to Experian or Equifax.
Here is how it works: If you apply for a credit card at the bank and the bank only reports to Transunion. That revolving debt will show up on Transunion but not Equifax or Experian. This becomes a contributing factor in your score being higher at Transunion and lower with Equifax and Experian.
Finally, when a company has no business credit profile in place the creditors can place a lot of wheight on the personal credit profile of the owners. The factors they consider are the personal debt to income ratio, the length of credit history, the mix of credit accounts, as well as your FICO Score. In this case most banks are looking for a FICO Score of 680 or higher.
Costly Mistake #6: Thinking that a Strong Business Credit Score Has No Effect on Successful Business Negotiations
Many entreprenuers don’t realize that companies and agencies that want to do business with you (government contracts, joint ventures, or any kind of bidding, may check the Dun and Bradstreet Profile and Score of your company. This may be the deciding factor on whether they choose to do business, partner, or even recommend you.
The Real Importance of Your Dun and Bradstreet Profile!
Before the current economic crisis, 100 people could go into a bank to get a business loan and 90 would get approved (shameca’s statistical model). The point is if you were breathing five years ago and had a half decent business idea you could get capital. If you were turned down for a straight forward business loan the bank employee would steer you into something else, a second on their house, a personal loan ect.
Today there are more than 20 million small businesses in America. Each Year more than 8 million seek funding and more than 5 million of the companies seeking funding DO NOT QUALIFY with banks. Here me on this: THERE IS MONEY TO LEND IN THIS ECONOMY!
Costly Mistake #2: Giving up Ownereship of Your Company to Ventrue Capitalist as the Only Way to Raise Money!
When you go to a venture capitalist to get funding, 6 months later they could own your entire company. This option is not a favorable option for most Entreprenuers. A good merchant account cash advance or micro lending company is similar to a venture capitalist in that you receive money according to the strenght of the cashflow (ability to make money) of the business, but with venture capitalist there is always the possibility of being bought out. Merchant account cash advance companies and micro lenders invest in their customer’s success without the possibility of take over.
Case Study: A customer with a Restaurant and he wants to attach a patio area restaurant. It is going to cost him around $50,000 and he qualifies cash advance for $50,000. He will pay back $65,000 for the money recieved, but once that $65,000 is paid, he still owns the entire restaurant.
The hottest sources in lending today are based on cash-flow. The types of businesses who are succesful at getting $50k to $150k in business capital have distinct characteristics. Businesses in these targeted industries can expect to easily get bank loans, unsecured business lines of credit, working capital, and trade credit.
- Small, Growing businesses on Main Street
- Have Walk-in customers, many transactions
- Steady cash flow and a small cushion for unplanned needs
- A desire to grow, and a plan on how to do it.
You can achieve a 90% probability of getting a $20k loan with:
- $25,000 per month in credit card volume
- $10,000 average daily bank balance
- FICO Score 640 or higher
- Revenue of at least $300k
Industries that Can Get up to $150k in as Little as 2 Weeks:
Restaurants, Medical & Dental Offices, Retail Stores, Franchises, Consultants, Warehouse/Distribution, Manufacturing, Small Grocery, Contractors, Commercial Janitorial, Staffing, Automotive Parts Shops, Automotive Repair Shops, Florist, Dry Cleaners, Pharmacies, Salons and Spas, Pet Care, Apparel, Furniture Stores, Gift or Novelty Store, Small Gas Stations
Costly Mistake #2: Destroying Your D&B File by Checking it Yourself!
Can you go to Dun and Bradstreet and check out your own profile or check to see if you even have one? Yes, You Can!
But here’s the problem, if you go to Dun and Bradstreet too early and pay them to set up a credit profile, they’ll give you a number and access to log in to see if you have a credit profile. That won’t help you if you do not have a profile with D&B.
Depending on what package you get. The package can cost anywhere from free to $700. With the purchase of some of those packages they say they will build a credit profile for you. They really won’t do it. They’ll just get a number for you and they’ll see if there are any vendors you currently work with that will report.
Then when they start to check your corporate compliance, if everything isn’t in order, they will redflag you or put comments on your file. “Secretary of State lists this persona as a CEO. This person from the company listed somebody different as its CEO.” They will start putting things in your file that is potentially negative information. (insider information from a former Dun and Bradstreet employee)
In this economy credit can be difficult to come by. What would it mean to your business if you had another 30-360 days to pay the companies bills? The truth is NO lender will give you a loan specifically to make payroll (with no assets as collateral).
BUT, the company could use TRADE CREDIT to preserve cash flow. This means use business credit with vendors for office supply items, computers, printers, envelopes, gas, etc, and free up the CASH you need for things your business can not get on trade credit – like payroll!
Here are 5 steps to securing Trade and Cash Lines of Credit for Your Business.
1. Understand the Role of Personal Credit
Although your personal credit score is not the deciding factor on whether or not your company gets business credit, it is part of the equation for determining what type of credit your company qualifies for.
2. Register a Business Entity
Sole proprietors CAN NOT build “true” business credit. In order to build a business credit profile the company must me an LLC, S-Corp or C-Corp.
3. Create a Strong Business Image with a Paydex Score
Establishing an image of stablity for your small business or start up business is essential. Companies where you do business, as well as lending agencies and customers will scrutinize your business profile carefully. Strong business credit happens by building business credit with a Paydex score.
4. Hire a Professional
An expert in the area of business credit has already done the research, knows how to accurately build a companies business credit profile and have built an extensive list of funding and credit sources that are lending money is this economy. Don’t risk being turned down or red flagged.
5. Manage Your Companies Image
Your business image is developed through organized administration and implementation of systems in all departments. It is also influenced by your ability to manage your finances and the strength of your business credit Paydex score. Pay your credit accounts on time.