Business Funding Solutions / The Art Of Corporate Credit

BBB Alerts & News: "BBBTipsTM on Business Credit

WHEN You Need a Business Loan
Are you getting ready to establish your own business? Or is your business at the point where you need to upgrade equipment, hire more personnel or expand to new markets? Chances are you're going to need to borrow some money, a basic activity for most businesses. Basic doesn't always mean routine, however. The credit process can be a challenging one, particularly for new entrepreneurs"

To read more of this article click on the link above

A new innovative group on http://www.prosper.com called "Two Millionaires bid on high risk loans - help restore Credit" is helping people with high risk credit scores by providing a place for them to apply to people-to-people lenders for a series of small loans. In states where interest rate caps are not restrictive, the borrowers offer interest rates as high as 29% and their determination to never miss a monthly payment. Prosper provides an eBay type bidding platform to get borrowers and lenders together to make the deal and share the risk. The borrower's month to month payment progress is reported to credit bureaus and credit scores are on the way up. Prosper's CEO is Chris Larsen, former chairman and co-founder of E-Loan. Major backers include the founder of eBay. In effect, Prosper's pioneering program makes ordinary individuals the bank and the banker. Instead of swapping products and services for cash as is done on eBay, Prosper's product is cash. In less than one year Prosper has attracted 100,000 enthusiastic people. There's room for more, but everyone must be a USA resident at this time, and borrowers must be determined to never let the community down by being late with a monthly payment. Credit checks are done and other screening methods are applied to help keep Prosper a fun, safe, and profitable place for everyone. In their first 45 days on Prosper.com, the unique "Two Millionaires" groups attracted 600 members and placed 50 loans. They consistently run more than 100 active listings for lenders to browse at any give time. Many of the listings offer attractive interest rates for people-to-people lenders to choose from. Finally, ordinary people have a chance to earn income on their money that is much greater than money markets. Assuming of course, that the borrowers stay faithful to their community, and make their payments on time. It's not risk free, and this is not intended to be investment advice.The Two Millionaires webpage can be viewed at this link: https://www.prosper.com/public/groups/group_home.aspx?group_short_name=Mayans2

Why Set The Corporate Credit Card Policy?: "Businesses to be stabilized needs to procure a corporate credit card which will define the bounds of business operating expenditures from that of personal expenses in the company."

"A business credit card is not all that different from a personal credit card. Business credit cards generally have a credit limit, and minimum monthly payments to pay. When lenders are deciding whether or not to extend a business credit to a company, they will look at the business owner's credit as well as anyone else's credit who will have permission to use the account."As I consult with new business owners they often ask me how they can get a corporate credit card with out it hurting their personal credit. Many of them do not understand that even if they do have to give their SS# in truth it will only drop their personal credit score a few points and the monthly payments will not show up on their personal credit report.What this means is initially it will affect their personal FICO score, but in the long run will not hurt their FICO score.

I have been in the corporate credit business now for almost 10 years and in that time I have seen a lot of schemes and scams’. I have also seen a lot of bad advise posted in chat rooms and message boards. So I have opened this new topic to help people with the right and legal way of building corporate credit and business financing.

Things to know before building corporate credit:

The first thing you need to know is that corporate credit is for the needs of the corporation not for personal use. If the credit is used for personal proposes that person is committing fraud.

Second, there is a big difference between personally guaranteeing a line of credit and a unsecured line of credit. Unsecured does not mean you will not have to use the owners personal credit score to obtain the line of credit.

Third, prior to filling out that first application, Make sure the business is completely setup not just the legal documentation but also the physical location complete with having a business phone listed in 411/directory assistance.

Next some common scams’:

Setting up a corporation and then filling multiple divisions and applying for a new tax ID for each division. A corporation can have only one tax ID and any one how is using this as a credit building technique is doing so illegally.

Corporate credit programs that off an investment opportunity in to a business or real estate just using your good credit score. What will happen is that they will get your permission to fill out corporate credit applications on your behalf. This will destroy your personal credit if not done the right way. Usually they will not monitor how many applications and just apply for as many as they can. If you do not have control over what applications are applied for and how often then run.

Beware of companies offering to build your corporations credit for you. The truth is that the only people that can do so are the owners and officers of the company.

I hope that you have found this information helpful and please post any questions you may have about this subject mater.

Have a great day!

Advanta - Small Business Credit Cards and Services: "Credit card code security scam

Identity thieves are in search of your three-digit credit card security number.

The New York State Banking Department has issued a warning regarding a telephone scam designed to get consumers to reveal their three-digit security numbers found on the back of credit cards."

Express-News Archives : MySA.com: " Bad S.A. credit gets worse (May 16, 2006)
San Antonio Express-News (TX)
Business Page 01E (630 Words)

Here's a Top 10 ranking San Antonio could do without: Bexar County, along with four other South Texas counties, made the nation's list of places where residents have the lowest credit scores. The San Antonio, Brownsville, McAllen, Corpus Christi and Laredo areas had average credit scores below 600 in 2004, according to a study by the Brookings Institution. Lenders consider a sub-600 score the riskiest credit rating.. The dubious distinction stems from reasons..."

KnoxNews: Travel: "By LINDA LANGE, lange@knews.com
May 14, 2006 "

This is a quote By LINDA LANGE, lange@knews.com May 14, 2006. I agree with this statement. There has been a new revival in personal finance about being debt free. How ever when it comes to business credit is used much differently. Credit is used for cash flow and used properly, should not put a company in to debt.