Does Bad Credit Signal Bad Business Management
Over the last two decades the statistics quantifying women owned companies has seen phenomenal growth. As more women get involved with operating their own businesses the more susceptible they become to the financial ups and downs that come with owning a company. Of course more and more women will realize success and all the accolades that come with that success, but along the way they will undoubtedly experience points of financial distress. It is during the difficult times when a person’s ability is truly defined so should we suggest that a woman that has bad credit is actually a poor business leader?
I am sure that any successful business women will recall points on the road to success that involved juggling creditors and maneuvering through unworkable budgets. Businesses inherently go through down cycles and when you are ambitious you often try to take on more than your business can handle. We all learn from our mistakes, but let’s face it, we have to make them first. With that said, operating a business often involves what may seem at times insurmountable debt.
Naturally as you incur more debt the higher the probability you will lose points on your credit score. Any score calculator would automatically deduct points from your score as your debt grows, so the algorithm these folks in the credit reporting industry created handicaps new and early business owners from the start. In a perfect world all your bills would get paid on time, but in reality, because you are not working and getting a set paycheck that you can manage accordingly, your risk for default grows exponentially.
Many of your outstanding invoices will not be paid on time, inventories will fluctuate dramatically, and certain creditors must be paid first for a business to continue. This is a chess game and not paying a creditor might actually be a good management decision. That is why bad credit does not mean bad management.
There are many stories behind a credit report and what we see on paper is not indicative of a business owner’s ability to manage their credit and overall business. That is also why credit is repairable and measured in periods of time. Even the guys in the credit reporting industry knew there should be a shelf life for derogatory posts.
There is almost no doubt that any successful business owner will tell you of a time where their credit history was in the toilet. Just consider the fact that every credit report starts off bad before it becomes good. This is the reason why many alternative financing companies offer business loans for women with bad credit. There are a lot of good companies out there with bad credit and there is no way a piece of paper can demonstrate the management abilities of the owner of that history.
Small Business Merchant Cash Advance
Many small businesses today are experiencing financial pressures due to the current state of the economy. When customers begin to tighten their wallets a domino effect results and small businesses typically are the ones that suffer the most. A small business does not have the cash reserves often seen with larger companies. Once the slow cycle begins, layoffs occur, inventories pile up, creditors do not get paid, and ultimately a business owner will close the doors on the business believing that there is no financing available for their company.
Although you may experience an enormous amount of stress relief from abandoning your small business, it is a critical mistake that continues to be pervasive in the business world. The reality is that most business owners simply need access to financing when they find themselves in this type of economic crunch. Most small businesses fail because they cannot maintain the budget requirements during slow business cycles. The sad part is that ALL small businesses will go through difficult times before an owner has the reserves to deal with such a crisis. It is finding a solution during these periods that will make your business and you as an owner successful.
The solution is a merchant cash advance. This type of business loan is the strategic tool that no small business can operate without. You do not need great credit or collateral to secure this type of financing. All you need is a business that exists for more than three months that receives some sort of revenues and you are eligible. You can secure this type of cash advance for your business and it can be paid back using a portion of your future receivables. Another great feature of this type of business loan is that you can use the cash however you wish, there are no restrictions.
Use the merchant cash advance to get creditors off your back, replace or upgrade existing equipment, hire employees, market your business, just about anything you can think of to advance your business through those difficult cycles. In fact, your competition is probably struggling as well so you will be one step ahead of them.
Small business owners can survive economic downturns by obtaining a merchant cash advance. There are many online merchant cash advance lenders who will be happy to get you the financing you need. There is no longer any reason to close your business, get the financing you need and apply for a merchant cash advance today.
Cash Advances: Settling The Confusion
With all the different types of immediate cash loans available in the financial lending industry how do you know which one is right for you? The financial services industry utilizes a wide variety of terms that can be very confusing to a new borrower. Some commonly confused terms are a merchant or business cash advance, a payday loan or cash advance, or one of the many other terms associated with these types of fast cash products. There are several distinctions among these terms that are highlighted below in an attempt to help the new borrower make an educated decision when requesting a cash loan.
What is a Payday Loan or Cash Advance
A payday loan, also known as a cash advance or payroll advance, is a short term loan usually secured by a personal check or an ACH (Automated Clearing House), an authorization on the borrower’s bank account similar to a direct deposit. Some online companies receive access to a borrower’s account to receive as well as repay the loan. Other companies may simply hold a personal check for the advance amount plus interest.
Most companies that provide a cash advance or payday loan offer borrowers anywhere from $100 to several thousand dollars. A borrower does not require perfect credit to secure this loan. The amount borrowed plus interest is generally paid back in a week or two when the borrower receives his or her paycheck, but it can be extended for a fee. This loan product generally targets the individual looking for immediate cash to deal with everyday expenses. Although this loan product is often recognized as a cash advance, it is completely different from a merchant cash advance or business cash advance.
What is a Merchant Cash Advance/Business Cash Advance
A merchant cash advance also commonly referred to as business cash advance is a short term loan secured by a company’s future credit card sales. The two terms are often interchangeable. The lender establishes access to the borrowing company’s credit card processing institution and then electronically is repaid a portion of each credit card sale towards the advance. The processed payments end when the amount of the cash advance plus a set interest amount is paid back.
Most lenders that offer a merchant cash advance or business cash advance are targeting business owners as borrowers. As with payday loans the borrowing company does not require perfect credit. The loan amounts typically range anywhere from $1,000 all the way up to $500,000 and more. This type of loan plus the interest amount is usually paid back anywhere from a few months to a year or two depending on how the advance is structured. This product is considered alternative financing for businesses that cannot secure financing through traditional lending options.
If you are an individual looking to secure a small amount of financing for a very short term than a payday loan is likely the product you are looking for. However, if you are a business owner trying to secure a larger amount of capital for a longer term then a merchant cash advance or business cash advance is likely the product right for you. Although the names used to describe these products are similar there are very clear distinctions as to the type of loans they are and the type of borrower seeking financing.
Expanding Your Restaurant With A Merchant Cash Advance
There is no better time than the present to expand your restaurant. The economy is puttering along and there are serious deals available on mortgages and rental space, equipment and machinery, even silverware can be had at a really good price. Contractors are willing to take less just to keep working. There are business financing options you can use to finance your expansion and take your restaurant to the next level.
You might not be aware of it but your restaurant is eligible for a merchant cash advance. This is a business loan that is given to existing companies that process credit cards. It is an exchange of financing up-front against future revenue. The cash advance can be utilized however you see fit, there are no restrictions. With all of the bargains wasting away in our cash strapped society it is critical that you take the initiative today and advance your business. When you see a competitor building up his or her business and you are wondering how they can afford it during these difficult times, there is a good chance they are one step ahead of you and have already begun using the capital financing made available to them.
Many of our clients have began purchasing new and used equipment for their restaurants. If you look on Ebay you will see restaurant machinery and equipment with mark downs as much as 50 percent or more. This type of buyers market for all the equipment you can use to expand your restaurant will not last forever. It is not just the equipment that is available at rock bottom prices.
Many clients are choosing to use their merchant cash advance to purchase the buildings that they currently lease. You don’t know it but there is a good chance that your landlord is in foreclosure. Not only that, but real estate prices are fantastic and mortgages are at the lowest levels in 30 years. Real estate owners are willing to negotiate more than ever just to release some of their properties. It is time to take advantage of the situation.
You don’t have to buy a building to expand your restaurant, you can also do some construction and either add or utilize your space more effectively. That’s what makes a merchant cash advance such a good business tool, you can use the money wherever you think you can capitalize. Contractors have been struggling for several years now and they are willing to bid low on projects just to keep their teams working. Solicit 3 bids for any work you plan on doing, and you will be surprised how cheap it can be to expand or embellish your location.
Expanding your restaurant doesn’t always mean you have to buy more equipment or increase your space, many clients are using their merchant cash advance to advertise. The internet has made the advertising market very competitive, and television commercials and print ads are practically being given away. Expand your restaurant’s market share by reaching out to the customers that have not heard of you. Offer some incentives in your ads and before you know it you might see double digit increases in your market share.
There are so many ways you could use a merchant cash advance to expand your business. These are just some examples, but there are so many other ways you can use a cash advance to make your business grow. There are a long list of websites with free applications online where you can apply for a merchant cash advance without ever having to leave work. You can get approved within 24 hours and have the money in your account in less than 72 hours. Stay ahead of your competition and take your restaurant to the next level by securing a merchant cash advance for your restaurant today.
How To Become Eligible For Business Loans If You Have Bad Credit
A very important prerequisite when applying for a business loan is your credit status. Your history usually dictates the amount of financing available to you and the rate at which you will pay off the loan. There are many resources for business loans with bad credit but if business loan rates and the amount of financing available are a concern then making yourself a high quality candidate requires some work.
Repairing Bad Credit
Naturally the first step you can take to ensure quality financing in your name is to improve your credit history. Repairing your credit is not as difficult as it may seem. You would be surprised how many companies no longer choose to pursue your failed payments. It just doesn’t make economic sense for creditors to pay a nickel of effort towards your old debt. That is just one of the advantages you have to start repairing your credit and securing a high quality loan.
The first step is to get a FREE CREDIT REPORT at annualcreditreport.com, or by calling 1-877-322-8228. This is a free service set up by the three major reporting agencies and by law you are entitled to one credit report annually from each agency. The website is very convenient and you can go to all three agencies via one website and obtain reports, print a copy for your records, and save the reports to your computer. You should make sure to check the box that makes the report available for thirty days so that you may go to the website and challenge the negative history once you have gathered all of your information; otherwise you will have to do it in writing.
If you have already obtained a report within a year you may still be eligible to receive a free report. If you have recently been denied on a credit application within a two month period based on information obtained from your credit history you are eligible. The denial notice will have the agency information that reported the credit history and you will be able to request a report.
Now that you have your credit reports in order the next step will be removing as much of the negative history as possible. You can create an online dispute for any negative information on your credit report the moment you receive the report or any time after. If you have any information to support the removal of the negative history you can provide it with your challenge, but don’t be discouraged if you don’t because you can still challenge any negative data. Simply check one of the available reasons they offer because most people will not have old paperwork lying around.
There is a lot of work required by the reporting agencies and the companies who have posted the negative information once you challenge something. The investigation requires the credit agency to send a letter to the company who posted the negative report. That company now has a thirty day window to respond. Often these companies have either sold the unwanted debt to a collector at a discount or they have written it off already so they are no longer interested in wasting any time or money fighting your challenge. This will often result in an immediate removal of the negative post.
If a collection agency has the debt you can be sure they bought it at a steep discount. That means they are willing to accept pennies on the dollar amount of the debt, especially considering the debt is over inflated with attorney costs and other exaggerated legal expenses. You can call the collection agency and negotiate a very large discount. Make sure you receive the correct paperwork from the collection agency so you can remove the negative credit data with the satisfaction paperwork they send you.
There is also the time element which favors the person in debt. According to the Federal Trade Commission “A credit reporting company can report most accurate negative information for seven years and bankruptcy information for 10 years”. This means that there might be some negative information on your report that you can remove simply because it has passed the statute of limitations.
The law is on your side and there are several acts that you can also use in your defense. The Fair and Accurate Credit Transactions Act, the Fair Credit Billing Act, and the Fair Credit Reporting Act are just some of the laws you can utilize if you do your research. Because there are so many points where a creditor can go wrong with even one piece of paperwork by an uninterested employee, a little bit of research and you can clean up the worst credit reports. For more information about the laws that apply to credit reporting and the legal strategies see Building Your Credit by the Federal Trade Commission.
Improving Your Credit Score
Now that you have cleaned up your report for negative data, it is time for some positive data. One of the most underutilized weapons is secured credit cards. You can start off with as little as a couple of hundred dollars and get a credit card. Get between three and four cards and begin using them for daily expenses. DO NOT make one late payment as you build your reputation. After a year of good work the credit card available balances will start to increase. All along the way your credit score will also start to increase.
Any opportunity you have to build your credit take advantage of it. Whether that means making purchases for friends and family that they would otherwise have to pay anyway, or just finding opportunities along the way to build solid accounts and credit history. You will often make purchases that you can secure with cash and still pay off. For instance, you can secure a business loan with cash and make payments as if you are a regular borrower. This will give you all kinds of credit juice even though you actually secured the debt. Credit agencies do not put the secured terms on a report, it simply will show you took a business loan or credit and paid it off.
Whether or not you have good credit there are many options for business loans. A merchant cash advance is a very useful tool for business owners seeking working capital with poor credit. However, if you are looking for a significant amount of capital at the lowest rates then improving your credit is paramount.
In just a few months you can have a person with no credit and turn them into someone who can go apply for a business loan anywhere. Good credit will often allow you to receive the amount you apply for as well as receiving it at a very low rate. The law regarding credit is always in favor of the individual so use it to your benefit.
