Business credit scoring is based on how you pay your bills. If you pay the majority of reported accounts on time or early, you will have a good score. Most business owners have little to no credit reporting. So, even one negative account can have a BIG impact on their business credit score.

It is essential that you continuously build your business credit profile just as you do with your consumer credit. One of the best ways to battle negative information on your report is to offset it with LOTS of positive information. So continuously build your business credit profile just as you do with your consumer credit

Crowdfunding is another great financing option for small businesses. With Crowdfunding, you use the collection of finance from backers—the “crowd”—to fund an initiative. Crowdfunding models involve a variety of participants including the people or organizations that propose the ideas and/or projects to be funded, and the crowd of people who support the proposals. Crowdfunding is then supported by an organization (the “platform”) that brings together the project initiator and the crowd. Crowdfunding allows good ideas that do not fit the pattern required by conventional financiers to break through and attract cash through the wisdom of the crowd. If it does achieve “traction” in this way, not only can the enterprise secure seed funding to begin its project, but it may also secure evidence of backing from potential customers and benefit from word of mouth promotion in order to reach the fundraising goal.

A Limited Liability Company (LLC) is a form of business whose owners enjoy limited liability, but which is not a corporation. A limited liability company is a flexible form of enterprise that blends elements of partnership and corporate structures. An LLC is not a corporation; it is a legal form of company that provides limited liability to its owners. LLCs do not need to be organized for profit. In certain US states, businesses that provide professional services requiring a state professional license, such as legal or medical services, may not be allowed to form an LLC but required to form a very similar entity called a Professional Limited Liability Company (PLLC). A Limited Liability Company (LLC) is a hybrid business entity having certain characteristics of both a corporation and a partnership or sole proprietorship (depending on how many owners there are). An LLC, although a business entity, is a type of unincorporated association and is not a corporation.

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You may be facing a choice between applying for an unsecured working capital loan or a conventional bank loan, and weighing the pros and cons. If so, then one of the key aspects you definitely want to analyze is collateral.

Why Banks Demand Collateral

As you may know, banks offset the risk of lending onto borrowers by demanding that they collateralize the loan with assets such as property, vehicles, equipment, securities and so on.

However, an extremely important point that some business owners aren’t aware of when they apply for a collateralized small business loan from their bank, is that they might not see eye-to-eye on certain aspects. Specifically, there are 3 common stumbling blocks that many business owners trip over -- and often through no fault of their own:

1. Disagreements on an asset value.

If you’ve ever shopped for a home, a used car (or even sometimes a new one!), or any other “big ticket” item, you’re aware that prices can vary; and...

One of the most shocking things that small and mid-sized business owners discover – as with talk with them on a daily basis – is that the bank business loan application process is excessively long. We’re talking several months here, not weeks.

What’s behind the massive delay? It’s that banks frankly don’t want to give business loans to small and mid-sized business owners. They want to focus on larger businesses with deep pockets, and of course, boosting commercial and residential mortgages, selling mutual funds and other investments, and promoting their beloved HELOCs. 

Of course, banks don’t want to come out and tell small and mid-sized business owners to take a hike. It’s not good public relations. And so they’ve made their business loan application process excessively, and in many cases prohibitively long. At the same time, they’ve dramatically hiked their business loan requirement criteria, and the due...

Business Credit Building Step 4: Getting Revolving Credit

After 5 trade lines are established using vendor accounts, obtaining revolving accounts is the next step. Revolving accounts are cards a business owner can use and not be required to pay the full balance owed each month. Revolving account approvals will begin coming from stores. Store revolving credit must be obtained before the business owner starts getting Visa, MC, Amex, type cards. Most stores will NOT approve a business owner for business credit unless the owner has an established credit profile and score, just like in the consumer world. Vendor accounts must be used first to establish a profile and score, then store credit can be obtained. It usually takes only 90 days or less to establish a score and profile with trade lines. Most major retail stores offer business credit accounts, although they don’t promote that they do. Major retailers including Walmart, Target, Best Buy, Amazon, Sam’s Club, Costco,...

Business Credit Building Step 2: Getting Your Business Credit Reports

Business Credit reports are offered by Experian, Dun & Bradstreet, and Equifax. You will first want to get a copy of your business credit reports to see what is being reported before you start your business credit building. You can visit www.creditsuite.com/reports to access your business credit reports with Experian, Equifax, and Dun & Bradstreet. You won’t need to get reports with all three, but you should at least have monitoring setup with Dun & Bradstreet, and possibly Experian. Smart Business credit reports from Experian cost $37-175. With these reports you can find out how many trade lines are reporting, see if you have a business credit score assigned, see if you have an active Experian Business Profile, and check on recent inquiries.

It typically takes more time to create a file with Equifax Small Business than D&B and Experian. This is because not a lot of vendors and...

Business Credit Building Step 1: Building Your Business Credibility

The perception lenders, vendors, and creditors have of your business are critical to your ability to build strong business credit. Before applying for business credit a business must ensure it meets or exceeds all lender credibility standards. There are over 20 credibility points that are necessary for a business to have a strong, credible foundation. It is very important that you use your exact business legal name. Your full business name should include any recorded DBA filing you will be using. Ensure your business name is exactly the same on your corporation papers, licenses, and bank statements. You can build business credit with almost any corporate entity type. If you truly want to separate business credit from personal credit your business must be a separate legal entity, not a sole proprietor or partnership. Unless you have a separate business entity (Corporation or LLC) you might be "doing business"...

Business Credit is a credit that is obtained in a Business Name. With business credit the Business builds its own credit profile and credit score. With an established credit profile and score, the business will then qualify for credit. This credit is in the business name and based on the business’s ability to pay, not the business owners. Since the business qualifies for the credit, in some cases there is no personal credit check required from the business owner. There are a ton of benefits that business credit provide including that a credit profile can be built for a business that is completely separate from the business owner’s personal credit profile. This gives business owners DOUBLE the borrowing power as they have both Personal and Business credit profiles built. Business credit scores are based only on whether the business pays its bills on time. A business owner can obtain credit much faster using their business credit profile versus their personal credit...

Today we’re continuing our look at some of the most frequently asked questions that we’ve received over the years, by answering an inquiry that comes up many times throughout the day: “What do I need for a business loan?”

What the Banks Require for a Business Loan

If you apply for a business loan from your bank -- which is certainly your choice if you decide that’s the right decision for you -- then you should be prepared to submit many official documents, including: 

• P/L statements for at least the last two years (though in some cases longer will be required).
• Your personal and business credit scores, which will need to be very high and virtually flawless -- any dings, even if they occurred years ago, will likely lead to your application being rejected.
• Your strategic business plan, which must be include comprehensive financial projections, marketplace and competitor analysis, and so on.
• A detailed, up-to-date resume for every key staff member in...