General Business and Finance Blog

Money is not everything. There are travelers’ checks, money orders, and credit cards. When you start your own business, there’s a way for you to obtain much-needed capital, too. This way is called small business financing credit card.
Small business financing credit card, also known as small business starter credit cards, is a great way to keep your personal and business finances separate. Personal Credit Card Versus Small Business Financing Credit Card
In the past and even at present, lots of entrepreneurs rely on their personal credit to get their business up and running. The problem with this is that they carry the debt from their business into their personal credit cards. Ultimately, they end up hurting their personal credit scores.
This is where small business financing credit cards come in. They offer higher credit limit. Additionally, they keep business and personal expense separate, thereby making it painless to track tax deductions. More importantly, you may write off your small business financing credit card’s finance charges and annual fees. Why Get a Small Business Financing Credit Card1. Build Credit
A small business financing credit card is a good way to build a financial history. Your business is a start-up; it’s unknown. This makes it difficult for your business to obtain loans. A small business financing credit card will remedy this. It will provide banks with the spending footprints they need to reassure themselves you’re a responsible borrower.2. Avoid Intermingling
When it comes to managing your expense, there’s one thing you should always do. Segregate, segregate, segregate. Do not mix business and personal transactions. This might later on create tax and money management problems. 3. Prevent Shoebox Accounting
It is always a nightmare to track business expenditures. With a small business financing credit card, however, you can turn the nightmare into one you can easily snap out of. Your credit card company will provide you with a year-end statement where you can find your transactions summarized, itemized, and categorized. With such a report available, there’s no need to keep a shoebox stacked with receipts. 4. Special Rewards
The credit card industry is so competitive providers fall over themselves to lure borrowers. Accordingly, a reward and discount program for small business credit card users was developed. Every time you use your small business financing credit card, you qualify for discounts and rewards, ranging from office supplies and plane tickets to phone services. How to Manage Your Small Business Financing Credit Card Effectively
Credit cards, whether personal or corporate, will always be open to potential abuse. Effectively manage your small business financing credit card by:1. Limiting card hopping
Sure, you qualify for multiple cards, but this does not mean you should sign up. You shouldn’t. This will only tempt you to overspend. It will hurt your credit rating, too.2. Steering clear of cash advances
Never use this credit card feature unless you need to bail yourself out of jail. It comes with whooping credit card fees and interest costs.3. Avoiding late payments
The more delinquent your payments are, the higher the fees and interest rates you would be saddled with. Moreover, late payments hurt your credit reputation.4. Using grace
Many companies offer a 21-day grace period to clients before asking them to pay for purchases. Turn this to your advantage by drawing up a schedule of your purchases and payments.
Use your small business financing credit card prudently. Remember, credit cards should be a financial safety net, not a trap.

Since the new FTC Franchise Rule became effective in 2007, many persons wonder what the major differences are between the old Uniform Franchise Offering Circular (UFOC) and the new FTC Franchise Disclosure Document (FDD). Of particular interest to franchise companies is how long it takes to convert an old UFOC to the new FDD format. Franchise buyers wonder if anything has changed about when an FDD must be given to them under the new regulations.

FDD vs. UFOC
In summary, what the FTC’s new Franchise Disclosure Document or FDD format does is take the prior Uniform Franchise Offering Circular disclosures, modify them in certain respects and rename the document. It’s now called a Franchise Disclosure Document or FDD. There are still 23 individual Items (chapters) and although the revisions are not that substantive, they are numerous. A franchise attorney familiar with the new FDD format should be able to convert the old UFOC to a new FDD within ten to twenty hours, plus or minus. The Table of Contents for an FDD can be found within the information at the franchise a business page of the Franchise Foundations website.

FDD Phase In Period
The phase in period for the FDD is now over. The new FDD format was permissive starting July 1, 2007. It became mandatory starting July 1, 2008. So franchise companies cannot make any offers or sales using or distributing the old UFOC. The new FDD is the required format in all states as of July 1, 2008.

New FTC Franchise Rule Transactional Changes
A transactional change with the new FDD rules and regulations relates to the time a prospective franchisee must have the document in their hands before contacts can be signed or any money paid. The former rule said the UFOC had to be delivered at the “first personal meeting” and in hand for at least ten business days. A seperate, completed franchise agreement also had to be delivered to the prospective franchisee for at least five business days. Under the new FTC franchise rule, the first personal meeting requirement is eliminated, replaced with a fourteen calendar day minimum review period that simplifies the complexity of completing franchise transactions. There’s another seven calendar day contract reiew period that kicks in if the franchise company makes unilateral and material changes to the franchise agreement (or other agreement) attached to the FDD.

Electronic Delivery of FDD
Stepping into the 21st century, the new FTC Rule permits delivery of the FDD by electronic means, such as email and downloading from a website. The cover page of the FDD now contains the franchise company’s website and email address.

Copyright 2008-2009 Kevin B. Murphy, B.S., M.B.A., J.D. – all rights reserved

For more informatiion, visit the Franchise Foundations website.