General Business and Finance Blog

Borrow More Money!
Small businesses can improve their credit rating by borrowing more money. You heard me right! Borrow money even when your business does not need it and pay it back on time or better still clear the loan early. Bizarrely, if you have never applied for a loan before then this will negatively impact on your credit score.
The clever way to improve your credit score is by taking advantage of offers that charge you zero percent interest if you pay by a certain date. Why pay the bank interest on a loan when you have money in the bank?
Some lenders offer some very low interest rate loans for asset purchases. Use their loans to buy cars, office equipment or machinery.
Use your cash in your bank to negotiate early payment discounts with your suppliers. Many suppliers with poor cash flow will even offer up to 2% extra discount if you pay their invoices within 7 days.
Lenders base your credit score on your payment history and the amounts of debts outstanding. If you have taken out many small loans and paid them back on time then this will stand you in good stead for when larger sums of monies are required.
Ask for a Quotation First.
When applying for credit make sure you get a quotation first before actually applying for the loan. Lenders will not do a credit search to give you a quotation. They will contact one or more credit reference agencies when you apply for a loan.
Every time you apply for a loan the search gets recorded. You want to keep this “credit footprint” as small as possible.
Do not Move House
Changing your house address can be disruptive to your credit score. Lenders like to see stability and moving house can add minus points to your credit score. If you are planning on moving house apply for your business loans before you move.
Know Your Credit Score
Lenders base their lending criteria based on reports from credit agencies and your businesses trading history. Sometimes credit agencies can get it wrong or still record a debt outstanding that was cleared years ago. For a small fee they will happily send you your businesses credit report. Make sure you examine it for errors and highlight them. They are obliged to change the report if you can prove that sums outstanding have been cleared.
You should check your credit score with the credit agencies at least every couple of years to make sure that there are no errors.
Do not Close Unused Accounts
If you have credit cards that you no longer need, destroy them every time a new one arrives. You credit scores benefits if you have credit facilities from many different lending institutions. Some lenders charge you a set annual fee for a credit card so make sure you cancel these.
Clean up Your Balance Sheet
Get rid of slow selling stock. Dispose of unwanted machinery. This will improve you balance sheet and enhance your credit score.
Boosting your credit score will not only improve your standing with the banks. Suppliers also check your credit score and some even offer better deals to companies that are less of a credit risk.

Most businesses which accept credit cards can obtain a business cash advance by using their future credit card processing activity. This strategy is also referred to as credit card financing and credit card receivables factoring. However, there are a number of critical business financing problems to avoid when using this strategy, and a merchant cash advance is not the only source to consider for additional working capital.

Business cash advance and credit card processing management is frequently one of the most overlooked sources of working capital for a business. This article will provide a concise and practical introduction to what a business needs to know about using this business finance strategy and how to obtain a merchant cash advance.

Businesses should not overlook the substantial working capital business loan benefits which will accrue to their business by effectively coordinating merchant cash advance and credit card processing programs. Key results from successfully coordinating these business financing services will include reduced costs and improved cash flow. Perhaps most importantly, a business cash advance based on credit card processing is one of the few viable options for reliably obtaining short-term commercial financing for many service and retail businesses.

Before we begin, there are two key points to keep in mind. First, business cash advance programs can be a source of confusion and problems, and proper anticipation of these potential difficulties is essential for a business owner considering this working capital strategy. Second, some additional descriptions for business cash advance programs are credit card receivables factoring, merchant cash advances and credit card financing.

Although this is a sound and viable strategy, there are pitfalls to anticipate and avoid. Below you will find our suggestions for simultaneously obtaining business cash advances and improving credit card processing.

Realize that the business cash advance strategy is not readily available until a business has been operational for at least one year. A further limitation is that the business must have been using credit cards as a form of payment by customers. It would be wise for new business owners to review this strategy in order to be better prepared for future business finance options needed in the future.

Determine how much additional working capital your business needs. In general a business cash advance is typically possible for amounts varying from $5000 to $300,000 and the amount will depend on the monthly credit card processing volume for a business.

Review your monthly credit card volume as well as cash receipts from your customers during the past six months. It is not unusual for a business to experience cyclical variations in their monthly receipts, and these fluctuations are generally acceptable in calculating the potential for a business cash advance.

Avoid business finance sites which request that a business owner submit an online application for a business cash advance. To illustrate the problems associated with an online business financing application, we have prepared a separate business loan report entitled How and Why to Avoid the Online Business Loan Application Trap.

An experienced business cash advance advisor should be consulted. High-pressure representatives making unrealistic promises about the speed of the credit card financing process should always be avoided. A realistic expectation is that a merchant cash advance can be finalized in a period of two to four weeks. A knowledgeable working capital financing advisor will be able to provide an initial assessment of potential working capital advance options based on information referred to above.

Explore additional resources that will facilitate a better understanding of complex credit card factoring issues. You should look for sources which will provide relevant strategies and solutions for any business owner contemplating a future business cash advance.

Complete an initial business cash advance application once you are satisfied that you have identified a suitable advisor and provider for coordinating the credit card processing and credit card receivables factoring. Please remember our advice to avoid the online versions for this step. Faxing or emailing a completed application directly to the advisor-provider is the preferred method for submitting initial documentation. Please note that there should not be any up-front fees or closing costs to obtain a working capital advance.

How come some of the biggest businesses empires like Enron, Lehman Brothers, and many more have collapsed suddenly? Were they not being managed by professionals? Were they not able to hire all those success teaching mentors who have been minting money selling their lectures and books on tips to manage businesses successfully? These questions raise the doubt that there might be a very same rat creeping down your establishments, too. Similarly, this also supports the truth that you always need to learn new things to keep your business going and growing, too.For example, what do you now about cash flow in your business? Is it negative or positive? This is something you would not have considered so far because even a negative cash flow doesn’t show an immediate sign of loss in a big business, but it does nibbles at net worth. A business, with a negative cash flow has to fund each of its sales to some extent. For example if its negative cash flow is 10% of its gross revenue, it has to fund $0.10 on every sell of $1.00. Initially, in flow of business, one may keep it paying and not realize the impact by delaying creditors’ payment, increasing credit limits by bank, or some other means but eventually business runs out of cash and bursts like a bomb.Here are some tips to improve your business:1. Cross-sell to increase your prices – cross selling is a powerful way of increasing your overall transaction value and thereby increase profit. McDonalds has nourished it in its blood.2. Increase Your Prices – A good way to increase your sell is to increase prices. Businesses often fear that they would loose customers if they increase prices. But the fact is only a few of them leave that product and a new class of customers joins in exchange.3. Improve Your Yellow Page Ad – People in business often take this great instrument of success as trifle. They do not put as much efforts in their yellow ads as they should have. It does make a tremendous difference to your sales.4. Improve Marketing – ‘words-of-mouth’ has always been the most effective marketing tools. ‘Viral marketing’ is its new avatar. Exhaust it.5. Monitor Cash Flow – A negative cash flow might prove lethal to your business. Keep watch on it. Get your cash flow calculated by experts periodically. Even when you are making profits.6. Increase Profits Pay Taxes – A lot of the businesses keep from making profits to avoid paying more taxes, which is not right. Increase profit, pay taxes.7. Stay Open for New Ideas – People often are found to be happy revolving in a rut. Once they have set a successful business they keep it going that way. Stay open for new ideas from employees, customers and from anywhere.8. Count Customers – People often end up counting profits while they should concentrate on counting customers and keeping them. Your profit will naturally increase if your customers do.9. Hire Professionals – It is often a case with most of the business that they, in attempts to cut cost, compromise with the quality of some important investments, too. Save where you can but pay where you should.10. Rely on Workers’ Capacity – Small businesses take time to grow because their masters are afraid of accepting more load than their personal capacity to bear it. The truth is they should rely on their workers capacity which they can always increase to any extent.