It really puts you in a predicament with only 2 ways out.  One, you can just continue to keep your business afloat, doing the minimum in areas of advertising and staffing.  Maybe you have to work 6-7 days a week because you cut an employee, maybe you don’t run that ad in the paper because you can’t really afford it.  

Option 2, which is the option smart companies are choosing, is to take advantage of the situation that EVERY business is in, and use it to your advantage.  Because you know that everyone is hurting why not do something different then the competition.  Use your business credit lines and loans from the bank to work on marketing to new customers.  Make the customers you have remember why they chose you in the first place by treating them like they are VIP’s because they really are.  A little goes a long way, especially when everyone else has stopped spending, your few dollar investment in a customer loyalty program, can go even further NOW.  

So how do you get a large credit line or a loan from the bank … with the help of your business credit.  Using guides like the Insiders Guide To Business Credit can help any business hone their business credit file so that they can get a bank loan or large credit card, without the need of using the owners credit file for approval.  Imagine using that business you have built as the leverage in every financial transaction you make.  It can happen if you start today.  

Visit http://InsidersGuideToBusinessCredit.com to find out more and to get a free copy of their small business credit guide.

Business credit cards, as you may know, are just like personal credit cards, but issued to your business, not to you. You don’t have personal liability and you don’t have to use your business credit.

Here on some tips:

1. Make sure that the “business” credit card you are considering reports your credit to a business credit agency, such as Experian Business, Equifax Business and Dun & Bradstreet. Cards that report to consumer credit agencies are not business credit cards, and will neither boost your business credit profile nor protect your personal credit profile. You need a real business credit card.

2. Check the rates and shop around. If your business credit is good, regardless of your personal credit, you should be able to get good terms, including a good interest rate and rewards, on a business credit card.

3. Business credit cards usually have very high credit limits in comparison to personal credit cards. You may see credit limits of over $50,000. If the first bank you apply to offers a low credit limit, shop around for a better limit, or ask them how you can get that increased.

4. When you do get a business credit card, make sure that you use it for business purposes ONLY. Do not mix personal and business purchases on your business credit card; this is one reason you have a business credit card.

5. Look for a business credit card that itemizes yours statements to show exactly where your money went. Your accountant will appreciate this when it comes time to itemize your expenses at tax time.

Getting a business credit card is one of the best things you can do to grow and expand your business. Knowing exactly what to look for and how to find a credit card for your business makes the process much easier. Keep in mind that most business credit cards have lower rates and higher credit limits than personal cards, so you should be able to find a good credit card for your business.

If you have difficulty finding a favorable rate and a high enough credit limit, keep shopping around. If you’re unable to get exactly the card you want, spend some time building your business credit profile and try again; you will probably find much better terms. Like anything you do in business, it can take some time and effort to build your business credit profile, but it’s well worth it.

Do not underestimate the importance of business credit to your business. You absolutely need credit that is not tied to your personal credit and that will reflect your business’s integrity. This is one of the most important things you can do for your business.

So exactly what is a merchant cash advance? It’s not unlike a payday cash advance. A lender gives you a loan based on your recent credit card sales, and takes a percentage of future credit card sales until the loan is repaid. These lenders will often lend to merchants with less than stellar credit, but they generally will not lend to new merchants or merchants without a proven record of significant credit card sales, because they rely on credit card payments for repayment of the loan.

There are definitely some advantages to the borrower with this type of loan. First, as mentioned, these lenders will often give cash advances to merchants with less than stellar credit, as long as they have a solid credit card sales record. Merchants who really need a loan and can’t get one otherwise can probably get a cash advance loan.

Many traditional small businesses with healthy financial statements have difficulty getting a traditional bank loan for various reasons, and these merchants, too, may find an MCA useful.

However, as with everything else, there are also disadvantages to merchant cash advances.

First, the charges vary widely from one loan to another, even with the same lender. Payback is calculated on a fixed daily percentage; you pay back the loan as you sell. The more credit cards sales you do each day, the faster you repay the loan. This can make your payoff higher, rather than lower, due to the fixed payback percentage.

In any case, the cost of borrowing money through a merchant cash advance is always going to be higher than getting a traditional loan.

Should you get a merchant cash advance? The answer really depends on your circumstances. If your business is bringing in steady credit card sales and you know you can repay a loan, make the effort to apply for a business line of credit or bank loan. If you are unable to get financing through traditional means, and you really need the extra cash flow, you can consider a merchant cash advance.

Be sure that your credit card sales are steady enough to repay the loan, and that you understand exactly how much the loan will cost you. Talk to several lenders and get quotes and terms in writing. If you have any doubts or questions, ask your accountant and/or attorney to go over the information and help you make a decision.

If you decide to get a merchant cash advance, keep in mind that you will pay more to borrow money this way, and it is not a perfect solution to your cashflow situation. However, it definitely is one solution.

You will be seeking a “bad credit commercial loan,” and you should be aware that these loans are a little more expensive than normal commercial loans. But when this is what you need, it’s what you need.

First, look for lenders who specialize in, or at least deal with a lot of, bad credit commercial loans. They will understand what you’re asking for and be more likely to loan you money than lenders who don’t issue a lot of bad credit business loans.

You will likely have to borrow a minimum amount of money. This may seem strange on a bad credit loan, but lenders want to make sure they lend enough to get a substantial profit back on the interest. In most cases, the lower limit is $5,000. The upper limit, of course, will be determined by your lender and will vary based on your situation.

You may have to have the loan payment paid automatically by credit card monthly. This is not a problem if you have a credit card with a sufficient available balance and you can make the monthly payment. It could be a problem if your credit card cannot absorb the payments and you do not pay off the payment on your credit card each month. Consider how you will repay before you apply for a loan.

You may also have a very short time to repay the loan. Often, for a loan of $5,000, the lender will expect complete repayment in one year. If this is going to be too difficult for you, you should not apply for the loan. Once you take out a bad credit loan, if you default on that, your credit will be well and truly ruined.

Watch for additional charges, as well, such as fees of various kinds. Understand exactly what you’re going to be paying on your loan. Expect high interest rates because of your credit situation, and understand exactly what you’re getting. Shop around and compare loans from two or three lenders to get the best terms.

In a perfect world, you would be able to get a commercial loan without all these inconveniences just by proving that you’ve overcome your prior difficulties. You wouldn’t need a bad credit business loan. Unfortunately, in this world, you will have to apply for a bad credit commercial loan under certain circumstances. The good news is that once you’ve repaid this loan, you will be in a much better position the next time you need access to business capital.

Q. Will business credit cards be on my personal credit?

A. If you have established a business as a separate entity, such as a DBA, partnership, LLC or corporation, you can set up a business credit profile separate from your business credit. This does take time and diligence in using credit well, but it’s usually worth it. Otherwise, you can get business credit using your personal credit profile.

Q. Do business credit cards have annual fees?

A. Yes, business credit cards do charge an annual fee, and those fees are often much higher than personal credit cards. Cards with higher annual fees usually offer more features, such as detailed statements and rewards. Shop around to find a card that fits your needs.

Q. Do business credit cards have late fees?

A. Like personal credit cards, business credit cards charge a late fee if your payment is not received by the payment due date. You absolutely must get your payment to the card company by that date, or risk paying a $35 or more late fee.

Q. What is the difference between fixed APR and variable?

A. If you have a variable rate APR on your credit card, the card company can adjust your rate at any time. They never adjust down, so your interest rate and payments could go up unexpectedly. The most common reason is chronic late payments, but the lender might also adjust rates on all cardholders because of a change in the prime rate, for example. With a fixed rate APR, your rate remains the same. The company can raise it for certain reasons, but you will have warning, so you can budget for the increase in credit card payments.

Q. Can I get cash from my business credit card?

A. You can get cash advances on your business credit card, and this is one reason to have a card, especially during low cash flow periods. But you should be very careful to use this feature wisely. Take out only what you need and repay it as soon as possible. You can get in trouble with cash advances, so be very cautious about this type of credit card spending. Use it when you need it, but use it wisely.

Q. What kind of support do credit card companies offer business cardholders?

A. Support varies by credit card company, so make sure that you know what to expect from the company you choose. If you want to talk to a live person, you should make sure that’s available. If you prefer to get answers from a website and by email, check the online support your card company offers.

Business credit cards are a very important tool in operating your business, but like any other tool, they can be misused, so make sure that you understand all the terms of your credit card and use it well.

Business credit cards also allow business owners to cover expenses during low cash-flow times. You may find yourself with an urgent need for supplies or equipment to complete a big project, but without the cash to cover the expense. Using your business credit card lets you pay for what you need without using the cash you currently have and need for other purposes.

If you have employees, issuing them business credit cards allows them to cover expenses related to work, without having to get reimbursement later. Of course, you’ll need to have employees you trust, and keep a close eye on their expenditures, but this is not a major problem for most businesses and most employees.

If your business credit card has a rewards program attached, you can get cash, points or other rewards that you can use for business travel, equipment or supplies, just by using your business credit card to pay for business expenses.

Another important reason for getting a good business credit card is that you may be able to transfer your balance to the card, and get a better interest rate. If you have a personal card you’ve used only for business expenses, you can transfer the balance and generally do better.

Business credit cards usually have a higher credit limit, sometimes upwards of $50,000, which will give you more flexibility in purchasing necessities for your business. You can even take a cash advance, if necessary, though the rates on this may be high and you will want to repay the advance as soon as possible.

In general, business credit cards have better terms, including lower interest, than personal credit cards, so using a dedicated business credit card can save you money on transactions you would make anyway.

As you can see, having a business credit card can help your business run more smoothly, run more economically, and afford the important equipment and supplies you need to take care of your obligations.

Can you run your business without a business credit card? Certainly. Many businesses operate without any credit cards or business credit at all. But if you want to avoid personal liability and build your business, a business credit card is a good idea. It will help you grow your business effectively and economically, and give you freedom you do not currently have.

Talk to your bank about a business credit card, or do a search online for business credit cards. Most major credit card companies, including American Express and Chase, offer business credit cards at competitive rates and with good terms.

1. Build Your Business Credit Profile

If you intend to lease equipment or finance big-ticket items with a line of credit from a vendor, you will need to create and maintain a business credit profile. By using a business credit card wisely, you can establish business credit, and you can work on building your credit over time.

2. Manage Business Expenses

Many business credit cards offer very detailed statements that make it easy to itemize your business expenses at tax time. Whether you do your own business taxes or pay a bookkeeper or accountant, the time savings will give you more resources to spend on other parts of your business.

3. Separate Business and Personal Spending

If you are a sole proprietor or an incorporated one-person shop, you may sometimes buy business items on your regular shopping trips. With a business credit card, you can pay for business purchases separately and keep your spending separate. This is particularly important if you have a corporation and need to protect the corporate purse. Separating purchases can be very difficult otherwise, but with your business credit card it becomes quite simple.

4. Survive Low-Cash-Flow Situations

Every business goes through peaks and troughs as far as income and cash flow. Unfortunately, quite often during the troughs you find that you need operating capital to get back onto a peak. This can be difficult, but having a business credit card can keep you up and running during low cash flow situations and help you weather slow times.

5. Cut Down on Reimbursement Paperwork

If you have employees, or if you were often spending money and having the business reimburse you, a business credit card removes the need for that. You can simply use a business credit card, and have your employees use one, for business expenses. The credit card statement will itemize your expenses, and you’ll have a much simpler time figuring out where the money went.

You can run a business well without a business credit card, but it is not exactly easy. Using a business credit card to manage expenses makes everything easier, and allows you to keep your expenses separate and keep track of them.

While business credit cards are not right for everyone, there are advantages to using one well, and if you have a business credit card, even if you only use it during slow periods to finance operations for a while, you will be surprised how helpful it is in taking care of business until things pick up a little. Just the access to business funding that a business credit card provides can make your business run much more smoothly, even if you don’t use the card often or at all.

It’s not your fault, the cards are stacked against you.

In fact, many lenders and loan officers would rather you make these mistakes when building credit for your business, because it puts them at an advantage over you.

Here’s some common mistakes that owners of small companies make when attempting to build corporate credit.

Getting Misled With Applications

Applying for loan or financing applications that aren’t really corporate credit applications at all. It’s deceiving, but many so-called corporate credit cards, are nothing more than a personal card account disguised as a corporate credit card. You can always tell by looking at the application to see if it asks for your company’s Tax ID number or not. If it doesn’t ask for it, then it’s definitely a personal credit account that you get to have your company’s name printed on it as well.

Taking On Company Debt Personally

Supplying a “Personal Guarantee” for a credit line or loan for business. The purpose for building corporate credit is so that your company’s ability to pay and credit-worthiness is evaluated separately from your personal credit. This is vital to making sure that your personal finances do not become tangled with your business finances.

Going Too Fast

Applying for too many new accounts and lines of credit for your business within too short a period of time. It’s generally frowned upon to apply for many new credit accounts all within a short time frame to one another because it looks like you are in financial distress to lenders. It’s always best to spread your applications out over a larger amount of time when possible.

Even if you’ve made these mistakes, don’t be frustrated. Building and establishing credit for a business can be a challenge and rewarding all at the same time. Keep track of your progress as you go, and you’ll be on your way to success.

There are 3 critical things that any small business can do to make sure they are building business credit.

Watch Out For “Business” Credit Cards 

Don’t apply for credit cards that say they are “business credit” cards, if the application asks for your personal information such as your social security number. This is a dead give-away that it’s a personal credit card in disguise as a business credit card.

Prepare Your Company’s Documents 

Make sure your small business is setup properly from the beginning. That means having your articles of corporation filed properly with the secretary of state in the state you do business in, as well as filing with the IRS for a Tax ID number (sometimes called an EIN number). These pieces of information are critical to filling out a true business credit application.

Get Your Company Listed Properly 

Make sure your company is listed with business credit reporting agencies such as Dun and Bradstreet. You can visit them at dnb.com and see if your company is already listed in their system.

Establishing and building business credit is the most important thing you can do to help grow your business. Following these critical steps will help ensure you are able to properly build business credit.

Having these things in place for your small business prior to applying for a business loan or line of credit can mean the difference between being approved or being denied.