Business versus Personal Credit:Personal – Personal credit building starts when an individual provides their social security number and applies for their first credit card. At that point a credit profile is started with the personal credit reporting agencies in the region of the country in which they reside. This profile, also commonly known as a “credit report”, is built with every credit inquiry, credit application submitted, change of address and job change. The information contained in the report is usually reported to the credit bureaus by those businesses issuing credit. Eventually, the credit report is viewed as a statement or report of an individual’s ability to pay back a debt, and is the key tool to access and grant credit.Business – When a business issues another business credit, it is referred to as trade credit (credit from vendors or suppliers). Trade, or business, credit is the single largest source of lending in the world, but it typically not reported to the business credit agencies by most small businesses. The data regarding trade credit transactions must be submitted and then is accumulated by the business credit bureaus to create a business credit report using the business name, address and federal tax identification number (FIN). The credit bureaus use this data to generate a historical report about a company’s business credit transactions and payment history. Typically, the businesses issuing credit rely on the business credit report to determine the credit they are willing to grant and the amount of the credit limit. Additionally, many businesses (suppliers/vendors) will submit credit reference applications to the key suppliers of the business as a method to obtain payment patterns as part of the credit granting process.The major credit bureaus are:Dun & Bradstreet
Business Credit USA
Corporate Experian
Small Business Equifax
TransUnion (Personal)The information provided to the business credit bureaus (primarily D&B) is sent in voluntarily, as businesses are not required to report. Therefore, credit bureaus may never receive any information about the business transactions on credit and a business could go for years accumulating business history without being reported to the credit bureaus and establishing a positive business history of sound credit practices.Establishing Business Credit History:Business credit scores range on a scale from 0 to 100 with 75 or more considered an excellent rating. Personal credit scores, on the other hand, range from 300 to 850 with a score of 680 or higher considered excellent. With today’s tighter credit scrutiny the higher the credit score, the more likely an individual or business is to obtain credit and at more favorable terms (interest rate and contract length).While it is important to know that there are many factors http://www.myfico.com that affect a credit score; it’s based on more than just whether you pay your bills on time (still very important). The credit score will be affected by the amount of available credit you have on bank lines of credit and credit cards, the length of time you’ve had a credit profile, the number of inquiries made on your credit profile, paying the bills on time, bankruptcy, as well as other considerations.The typical American consumer credit report receives two to three credit inquiries per year and usually has 11 credit obligations – typically broken down as 7 credit cards and 4 installment loans. Business owners are not your typical consumer, because they carry both personal and business credit. This typically doubles the number of inquiries made to their personal credit profile and the number of credit obligations they carry at any given time, all of which negatively impact the personal credit score. Additionally, because business inquiries and personal inquiries are not separated on the personal credit report, the personal credit scores are negatively impacted. As mentioned earlier, using the personal credit history to get credit for their business, businesses are not able to build their business history/score, all of which could help attain critical business credit in the future.A critical mistake many business owners make is using their personal information to apply for business credit, leases and loans. This practice has the resultant impact of potentially lowering their personal credit score, while not building a business credit history and business credit score.A key to establishing credit for the business and a profile and score is to find companies (UPS, FEDEX, etc.) or your key supplier and vendors that will grant credit for your business without using your personal credit information and then report the payment experiences to the business credit bureaus. By reporting the information to the proper credit bureaus, those companies will help the business establish a business credit profile and score.The Seven Steps to Success:1. Company Legal Structure – The business must be a legal entity unto itself in order to establish business credit. Therefore, it is recommended to form a corporation (C Corp) or LLC (discuss with your CPA the advantage/disadvantages of a C Corp versus LLC) as opposed to structuring your business as a sole proprietorship or partnership. Formation of a sole proprietorship or partnership, dictates that personal credit information could be included on the business credit report. Additionally, as a sole proprietor or partner in a partnership, you are personally liable for the debts of the business and all your personal assets are at risk in the event of litigation.Corporations and LLC’s, on the other hand, provide the business owners liability protection, and can build a business credit profile that’s separate from the personal credit profile. Therefore, apply for credit under your business’s name and find businesses will to grant credit without a personal credit check or guarantee.2. Register with Business Credit Agencies – The best known business credit bureau is Dun & Bradstreet. Dun & Bradstreet has a process on their web site to establish a D-U-N-S number (a specific 9 digit number related to your business) and instructions how to establish a business credit rating. It is strongly recommended that you contact D&B and follow their process to establish business credit. The following is from the D&B web site:How do I get started with D&B? With our unsurpassed global data collection system, D&B continually gathers the data that initiates the creation of business credit profiles on new companies. Many kinds of activities can trigger a profile on a new company, such as incorporating your business, applying for a loan, getting a business telephone number, taking out a lease on office space – even just when another company seeks information from D&B about your business. Still, a new business may not have a complete business credit profile. Getting a D-U-N-S Number from D&B – the worldwide standard for business classification systems – is an essential part of helping you establish your business credit profile and will ensure that when a company looks you up in the D&B database they will find you. In some cases, a D&B D-U-N-S Number is so a requirement for doing business some entities, such as the US government.You should make sure you have a D&B business credit profile if:You are planning to obtain a business loan
You need to purchase or lease equipment
Your cash flow is tight
You want to ensure you are getting a fair deal from lenders compared to your competition
You want to pay net 30 days instead of COD (Cash On Delivery)
You are paying interest at prime plus 1, or even higher
You plan to do business with entities that require a D-U-N-S Number, e.g. the US GovernmentThese issues and dozens other like them can be addressed by having a strong business credit profile. A good rating provides you with the financial freedom to take the steps you need to grow, and is a straightforward, unbiased method for other companies to assess your level of risk when considering taking you on as a creditor. A poor credit rating is a certain barrier to growth and success, preventing you from getting adequate funding on fair terms.Communicating directly with D&B will help establish your business credit in less time. If you are a new company, D&B can help you build a complete business credit profile from the ground up; if you have been in operation for a while, you will want to improve and/or protect your business credit profile. Find out more about how to establish, monitor, improve, or protect your business credit.3. Credit Market Requirements – Businesses must meet all the requirements of the credit market in order to have a higher probability of credit approval, as not being in compliance with the credit market can “send up signal flares” with both credit bureaus and potential grantors of credit.Some of the “signal flares” include:not having a business license,
not being registered with the Secretary of State for a certificate of good standing,
operating under your social security number rather than a FIN or EIN,
not having a phone line (land line) that is listed in the phone directory in the exact business legal name,
no web site, or
not having a business email address (not AOL or gmail, but a specific URL for your company).4. Small Business Credit Lines – Investigate and locate a minimum of five businesses (vendors/suppliers) willing to grant a small business credit without personal guarantees and will report the payment experiences to the business credit bureaus. This will assist your business to establish a credit report and build a financial credit foundation for the company. Find companies willing to grant credit that report to the credit bureaus such as marketingoncredit.com, UPS, FEDEX5. Business Credit Cards – Obtain three business credit cards (Sam’s Club Discover Business card), that are not linked to you personally and that report the business credit to the reporting agencies. Then be sure to always pay your bills on time!6. Financial Statements, Business Plans and Loan Packages – These documents are often required by many credit grantors as part of their loan application process. CxO To GO is a national professional services firm that has assisted many business with their financial statement preparation and business plans. Additionally, CxO To Go has packages such as PowerPlan and PowerPlan2 for business plans, PowerPuncher for executive summaries, CFOCast for financial projections and BankSell for bank proposals so lenders and bankers will take action. It is important to note that 61% of all businesses are turned down for a loan due to a poor loan package, however with BankSell the lender loan package gets results and moves the applicant to the top of the list for review and credit committee approval.7. Debt management – Be a smart money manager and manage the debt levels to ensure they are not too burdensome and can be paid back with current cash flow. Do not incur debt that will over leverage the company and cause missed or late payments.
Establishing Business Credit – The Seven Steps to Success
S&P 500 Rallies As U.S. Dollar Pulls Back Towards Weekly Lows
Key Insights
The strong pullback in the U.S. dollar provided significant support to stocks.
Treasury yields have pulled back after touching new highs, which served as an additional positive catalyst for S&P 500.
A move above 3730 will push S&P 500 towards the resistance level at 3760.
Advertisement
Pfizer Rallies After Announcing A Huge Price Hike For Its COVID-19 Vaccines
S&P 500 is currently trying to settle above 3730 as traders’ appetite for risk is growing. The U.S. dollar has recently gained strong downside momentum as the BoJ intervened to stop the rally in USD/JPY. Weaker U.S. dollar is bullish for stocks as it increases profits of multinational companies and makes U.S. equities cheaper for foreign investors.
The leading oil services company Schlumberger is up by 9% after beating analyst estimates on both earnings and revenue. Schlumberger’s peers Baker Hughes and Halliburton have also enjoyed strong support today.
Vaccine makers Pfizer and Moderna gained strong upside momentum after Pfizer announced that it will raise the price of its coronavirus vaccine to $110 – $130 per shot.
Biggest losers today include Verizon and Twitter. Verizon is down by 5% despite beating analyst estimates on both earnings and revenue. Subscriber numbers missed estimates, and traders pushed the stock to multi-year lows.
Twitter stock moved towards the $50 level as the U.S. may conduct a security review of Musk’s purchase of the company.
From a big picture point of view, today’s rebound is broad, and most market segments are moving higher. Treasury yields have started to move lower after testing new highs, providing additional support to S&P 500. It looks that some traders are ready to bet that Fed will be less hawkish than previously expected.
S&P 500 Tests Resistance At 3730
S&P 500 has recently managed to get above the 20 EMA and is trying to settle above the resistance at 3730. RSI is in the moderate territory, and there is plenty of room to gain additional upside momentum in case the right catalysts emerge.
If S&P 500 manages to settle above 3730, it will head towards the next resistance level at 3760. A successful test of this level will push S&P 500 towards the next resistance at October highs at 3805. The 50 EMA is located in the nearby, so S&P 500 will likely face strong resistance above the 3800 level.
On the support side, the previous resistance at 3700 will likely serve as the first support level for S&P 500. In case S&P 500 declines below this level, it will move towards the next support level at 3675. A move below 3675 will push S&P 500 towards the support at 3640.
Marketing Your E-commerce Business Through Social Media Networks
The goal with social network marketing is twofold:1. You are trying to enhance your site’s community by establishing outposts on social networking sites so people who share your interests, or are interested in your products and services, find you and your site.2. Getting involved in social networking multiplies the number of places that your site and your products can be found by search engines, which is critically important to the success of your e-commerce business.How To Leverage Social Media Networks To Our Advantage?Simply, we are trying to spread the word about your e-commerce business. You can take your product reviews or blog posts and spread them as far as possible online enlisting the help of these sites. It’s important to make sure the content you’re promoting is interesting and helpful to the audience you’re trying to reach. Remember, people like to do business with their friends if they’ve never met you offline. By being reasonable and participating in social networking, you’ll expand your credibility and potential customer base in many important and helpful ways.It’s also important to recognize that these social media outlets were designed to serve as conversation platforms, and not as overt marketing channels. Sending messages that are overly promotional or commercial is often compared to shouting at a party where everyone else is chatting quietly, and the backlash can overwhelm the benefits of participation. As an ecommerce business owner I recommend taking a couple of weeks to monitor the various sites to get a sense of the patterns and informal rules before posting anything.Which Sites Do You Need To Target?Here’s a brief overview of the important sites you need to target:Digg.com: Digg is a popular social news website in which community members vote articles up and down, with the most popular articles appearing on the front page. Users submit articles on topics including technology, world & business, science, gaming, lifestyle, entertainment, sports and offbeat. Having an article reach the home page can generate a tremendous amount of traffic to your e-commerce venture very quickly, but a Digg link can be helpful even if you don’t make the front page. Your link will be archived and available to search engines, as well as being available to users who search within the Digg archives directly.Twitter.com: Twitter is generating a ton of online buzz, and for good reason. The short messaging service is evolving into a communication and news platform that e-commerce ventures can’t afford to ignore anymore. Twitter allows users to exchange short messages that are limited to 140 characters, which is roughly about 25 words or so. Many sites have found good success posting (“tweeting,” in Twitter lingo) short summaries of new blog posts or product reviews, highlighting interesting articles or trends in their area of expertise, or just reaching out and seeing who might be interested in the same things they are.Twitter’s ‘hashtag’ (#) function, for instance, makes it very easy for users to search on specific events or topics other users have marked with hashtag function. Many attendees at popular conferences, for instance, use hashtag searches to find and meet each other. Check Twitter’s search page (search.twitter.com) to see popular topics generating user interest.Facebook.com: Facebook has long been popular with college-aged students, but since it opened its doors to a general audience, the site has been growing rapidly, with most new users coming from an adult audience that’s over 30. To reach this growing audience, e-commerce venture owners can create positive marketing relationships on Facebook in two ways. The first and most obvious way is to invite customers to “friend” you on the site. You may not want customers to share the same details or photos you’re sharing with friends and family members, but you can create limited profiles that allow people to get a bit of a behind-the-scenes look into your business without revealing too many personal details.In addition, while Facebook is best known for its personal “profiles,” it does let organizations create pages that allow Facebook members to become fans of your e-commerce venture. While they may be more likely to become fans of a football team or a Bollywood star, Facebook fan pages give your venture another opportunity to highlight interesting content related to your business and, almost more importantly, provide search engines with another place to discover content about, and related to, your e-commerce venture and your market niche.If you do not have a personal Facebook account, you can create a specific account for your business. According to Facebook, a business account can add information, photos or videos just as a personal account can, but can’t see information about visitors and can’t explore other areas of Facebook, so this might not be the best option for your e-commerce venture.MySpace.com: Similarly, MySpace is a popular site especially with younger consumers, that’s becoming an important marketing tool for e-commerce businesses (and a critical outlet for bands to reach their audience). As with Facebook, you can reach this growing audience by forming relationships with customers and other people. In addition to setting up a profile, MySpace lets users join and create groups that attract people who share your interests or hobbies. If you’re trying to sell guitar accessories online, joining groups that serve guitar players would give you great insights into their interests and equipment needs, and allows you to share content and create relationships with other members of the guitar-playing community.Does Social Media Networks Really Help?If you want your e-commerce business to stand out amongst the crowd it’s becoming necessary to have these tools on your website. Your business will not survive over the long term if you are not connected with the audiences within these networks. Furthermore you can achieve great success simply by offering something of value and your e-commerce business can go viral very quickly.Take the time to understand how these social media outlets fit into your e-commerce business and over time you will start to see the benefits.