by Michael Morriss on December 17, 2009
Why does anyone have to have Business credit?
If someone mixes corporate credit along with their private credit, it could ruin your personal life if your business experiences a slowdown. And, if you experience a need to use a lot of your personal credit for your own needs, you won’t have enough left to use for your business. So, having a solid business credit standing will help make your company keep a good credit record, and let you borrow when you need it.
What things are measured for a business trying to get corporate credit accounts?
The following things must be considered: how long you have had the company, can it afford additional installments, did you ever borrow that kind of cash, did you every borrow half as much as this kind of cash, does your business have references that are already established, and do you have enough security you can use against the loan. All those are items to be considered as to whether or not you will be allowed to get additional corporate credit. [click to continue...]
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by Michael Morriss on October 15, 2009
Corporate credit comes in many forms; corporate credit cards, vendor accounts, loans and lines of credit are the most popular. Some small business can get by with a corporate credit card and vendor credit, but sometimes your business just needs cash.
Here is a perfect example of how corporate credit in the form of cash helped me to grow my business. The town that I live in holds real estate auctions once a year. They sell both residential and commercial buildings on which the real estate taxes have not been paid. The buildings sell for the back taxes, plus a little more depending on who is bidding. The property owners can get the buildings back if they can pay the back taxes.
I knew of a great commercial building in town with no liens but the back taxes of $3,000. I knew the owners, there was no way they were going to be able to redeem the property. If I could buy it, I would have a $100,000 commercial building three times the size of my current building for $3,000.
I used business credit in the form of a bank line of credit to get cash and go bidding. The property went for $6,000 and I knew I got the deal of a lifetime. No one else had readily available corporate credit; they were using their personal savings only. Years ago I had paid a company to help me establish corporate credit. My business coach insisted I needed cash corporate credit and now I see why.
If I had not previously arranged corporate credit beforehand, I would have lost the chance to expand my business. These auctions only happen once a year and very few commercial properties are available. Without corporate credit, I could never have taken advantage of this once in a lifetime opportunity to expand my business for so little money.
