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Choosing A Business Credit Card That Fits Your Businesses Needs

Choosing the best credit card for business owners is sometimes not the easiest task to achieve. To find the right creditcard, business owners need to know whether or not the business card offers rewards such as cash back and a low interest-rate. Detailed expense reports are important for tracking each individual employees expenditures.

Business owners that constantly fly may find an airlines miles business credit card to be the best choice, while on the other hand, a company that has a sales force traveling on the road may benefit with a gas rebate business credit card. Business cards offer up to 5% cash back on expenses such as office supplies, gas purchases, and other business to business-related expenses.

Several corporatecards offer 0% intro APR, which allows business owners an opportunity to raise capital for their business that they currently may not have. With extensive reporting business owners can track individual spending from each employee. This enables business owners time to focus on their business, instead of tracking employee expenditures.

Three of the most popular business credit cards are offered by Advanta, American Express, and Citibank. Advanta offers a 0% intro APR for up to 15 months, while Citibank offers a 0% intro APR for up to 12 months and very competitive interest rates.

Business credit cards can be ideal for small businesses, entrepreneurs, and large businesses as well. Many small-business owners agree that having a business credit card versus using a personal credit card for expenses is the best choice. Due to the fact that using personal credit can adversely affect your personal credit score as business credit scores are kept separate from personal credit scores.

Get And Maintain Good Business Credit

Credit is important for business success & business image. Few entrepreneurs know about or really understand how business credit is established, how it’s tracked and how it affects their lives and their business. Personal credit is different from business credit. You don’t have to rely only on your personal credit to build, grow or maintain your business. That’s why it’s good to maintain good business credit.

You can build, acquire and maintain business credit and personal credit separate from each other. In business without interrupting your cash flow, borrowing can allow you to build your company in good times. In slow times credit can help maintain a company’s smooth operation. You need a strong company credit profile to increase your company’s borrowing potential.

A good company credit rating begins as soon as you start your company. A good way to start & maintain good company credit is by:

1. DEVELOP A BUSINESS PLAN

If you have a new company or already in business, this is an important first step, it helps you company start in a professional manner. Many business owners never develop a business plan or they wait until it’s too late. You should always have a business plan. A business plan is usually required by lenders. If you are past the start-up phase in your business, update your plan regularly to take into account its growth and future needs. If you don’t plan to borrow, you need to update your plan regularly throughout every year.

2. SELECT A BUSINESS STRUCTURE

This step is completed along with the business plan. If you plan to borrow & show lenders that you are operating in a professional manner, establish a proper business structure, in addition to facilitating your operation. From a credit standpoint, a corporation or LLC could be beneficial. A partnership or sole proprietorship, personal credit information could be included on your business credit report.

3. OPEN A BUSINESS BANK ACCOUNT

It is very unprofessional to mix business & personal accounts. Mixing the two could ruin or damage your personal credit if your company has a problem. A business-only bank account is a way to build business credit since banks offer debit, check or credit cards in connection to that account. Most people that you do business with (if you are exchanging funds) will look for that and it makes your business look more professional.

4. ESTABLISH BUSINESS CREDIT

Every business needs supplies. If you need to, check with major office supply store chains about setting up an account. Wholesale clubs are another good option to setting up credit accounts. If a credit card was not a part of your bank account, apply for one because you never know when you may need to use it. The main point to these credit options is to manage them wisely.

5. REVIEW YOUR CREDIT PROFILES

Regularly review the information collected by credit reporting agencies on your company. Make sure you business credit profile has up-to-date & accurate information. Dispute & report incorrect information in your credit file. Follow-up to ensure that mistakes or errors were corrected in your credit report.

There are specific business credit reporting agencies. Lenders & vendors rely on this information to determine if they want to do business with you. Business credit reports are different from personal reports. Personal credit reports are maintained by three different credit reporting bureaus: Experian, TransUnion & Equifax. Company creditors voluntarily send information to the agencies.

When you open a new account with a creditor, make sure that they report it and your positive payment history to the business credit bureaus to help build your profile. Business credit profiles include :

  • Payment histories
  • Information on legal actions involving your company
  • Business license and registrations
  • Corporate financial reports
  • Government contracts or grants
  • Media reports
  • Data from directory listings

Sometimes business credit bureaus conduct direct investigations, interviews with business executives and the companies that they do business with. The major business credit bureaus are:

DUN&BRADSTREET (also known as D&B)

A household name & a major company in business ratings. You should contact them to get a DUNS NUMBER, you may need it with most places that you may do business with. If you do business with the government it is a requirement to have a DUNS NUMBER. D&B creates a profile based on information provided by business owners with your DUNS NUMBER and their vendors, also they create a rating called a DUNS rating based on the financial statements of a business. They issue a PAYDEX score, it’s similar to a FICO score of a personal credit report from Fair Isaac & Company.

EXPERIAN BUSINESS

Experian tracks business credit just as well as personal credit. For businesses they only use information from vendors. Then they give what’s called an Intelliscore number.

EQUIFAX BUSINESS

Equifax tracks business credit and personal credit. They produce a variety of business scores based on banking & lease payment performance information provided by the Small Business Financial Exchange, INC. Some of the business scores come from the Small Business Financial Account Acquisition Score and the Small Business Financial Account Management Score.

FDIinsight

FDIinsight is a part of the Factual Data Corp, a business-to-business information service. They started out as a personal credit reporting agency for mortgage brokers. Their reports contain information supplied by the company itself or a third party. The staff of FDIinsight, verifies the information independently.

CREDIT.NET

They were formerly known as Business Credit USA, a subsidiary of INFOUSA. They get information from business owners & verify the data before putting it in the reports. Their ratings are based on a “grade” Scale A%2B (95 to 100 points ) to C ( 70 to 74 points).

CLIENT CHECKER

They provided credit about small businesses and only use information provided by vendors. They turn the information into a PAYQUO score which is based on payment histories.

It can take time to build a credit rating for your company, so maintain a good rating. A strong business credit profile will enhance your company’s creditworthiness, and also your professional reputation.