Compound Profit Blog

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Many people look forward to starting their own small business, but before doing that they should consider their financing options. If you plan to become a company owner, an idea would be to use your personal assets to finance the business; nevertheless, few people have access to all the needed financial resources – earning more money is one of the main reasons why they want to become entrepreneurs, after all!

Applying for a business loan is the preferred alternative then; nevertheless, if you choose this route you’re going to have to review your personal credit history carefully, because the business financing companies will review it anyway and this will be a decisive factor, making them accept your request (or not). The things don’t stop here, though; having a good credit history will help you get business loans with better terms and lower interest rates.

But what can you do if you have a poor credit score? Is there a surefire method to get business financing under these circumstances? The answer is a sound yes, because that’s the very reason why the bad debt credit loans were invented. If this is your case, you know that the lender has to take a greater risk, and this translates to higher interest rates, as well as higher closing costs and processing fees; nevertheless, your application will be accepted even if your credit score is bad most of the time.

If you plan to apply for a bad debt credit loan, you can increase the chances to get your application approved exponentially by applying for a secured loan. With secured loans, you pledge a type of security, thus minimizing the lender’s risk even if you default on your payments. Secured loans are definitely easier to obtain, even if you have a poor credit rating.

On the other hand, even if you have a bad credit history, you should start building credit before applying for a business loan, provided that you’ve got enough time at your disposal. The key strategies that must be employed in order to do this are very simple: keep your records in good order, making sure that they are error-free, and don’t ever default on your payments. Do this for a few months and you’ll send a strong signal to the lenders, showing them that you have learned to take care of your payments in a healthy way, and thus you will increase the chances to get a loan under great terms in a significant manner.

So what should you do after your loan request is accepted? Start by celebrating your success, but make sure to pay the lender without delay each and every month, thus taking another step in improving your business credit history. Compound Profit offers secured and unsecured business loans for companies of any size; contact us for a complimentary consultation and we will create together the customized financing solution that fits your business financing needs perfectly.

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Due to the economical turmoil, many people have bad credit scores these days, be them personal or business credit scores. And most of the time, they don’t even know how this has happened: they have forgotten to make a payment, maybe they have delayed another payment for a few days, they might have accumulated a bit of debt... nothing major, I admit, but all these things will dent your credit score for sure.

Sadly, even though these might look like minor incidents, their consequences are disastrous: most lenders will refuse to offer you or your business the needed finances. While damaging your personal credit score is a bad thing indeed, if your business credit score suffers, your entire business will suffer because you won’t be able to get the needed money in order to pay your employees, the rent, your suppliers, and so on. If this is your situation, there’s a financial instrument built exactly for your needs: the bad debt credit card.

The bad debt credit cards were created for people with a poor credit history, being very similar with the regular credit cards. The increased risk taken by the lender must be compensated, though, so these cards have higher interested rates, as well as stricter rules and terms, in order to encourage people to make the payments on time.

It might surprise you, but these rules are actually a good thing, because they will help your business recover much quickly, practically forcing you to increase your business credit score as you manage to make all your payments on time, covering the debt in a consistent, sustained manner.

Most of the time, the lenders will report about your current standing to the major credit reporting agencies; therefore, your business credit rating will improve over time. The most significant advantage, though, is the fact that you’ll have access to the funds that allow your business to continue to run, producing profit and thus giving you the means to pay back the accumulated debt.

Considering the financing offered by bad debt credit cards is definitely a good idea, especially if your personal credit score or business credit score is less than perfect; in addition to that, the tighter restrictions that are usually associated with them can set good business practices that will become useful for the business owners even when their credit scores are skyrocketing.

Compound Profit offers customized business financing solutions for companies, regardless of their size and business credit score. Contact us to discover how we can help your business grow.

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If you’ve just started a business (or you’re secretly planning to start one) there’s an important thing to consider: financing. Most people will go on and finance their company using their own funds, while others will try to get a business loan – in this case, their credit history plays a crucial role.

It’s sad, but true: each time you want to apply for a loan, your credit history will be reviewed, because the lender wants to determine if its money is in good hands or not. In addition to that, a good credit score will help you get a better loan, with lower rates, longer terms and (as a general rule) much better conditions.

Even with bad credit, there are alternatives: the bad credit loans, but due to the high risk factors, these have worse terms, like higher rates, higher closing costs, higher processing fees and so on. The solution is obvious: take the time to improve your credit score using a proven business credit builder program that works fast and won’t cost you an arm and a leg.

In addition to this, you can improve your business credit score by making sure that you are never defaulting your payments, ensuring that all your bank transactions and other papers are in good order, and so on. These are very good habits, so keep practicing them even after you get the loan, in order to constantly improve your business credit history, thus always being able to access good loans, and not bad credit loans.

Compound Profit offers a proven business credit builder program that was used by nearly 100,000 customers throughout the entire U.S.A. and offers great results after only 120 days – or you will get a full refund! Contact us today to benefit from a 100% free consultation with one of our friendly, highly trained Profit Advisors.

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Small business owners: imagine that you need a small business loan from your local bank. What will you need to secure the loan? Your home? Your personal assets? It is always surprising to me the number of small businesses in Minnesota, no matter how long they’ve been around, do not have business credit. Small business owners are financing their business and securing credit through personal assets and never separating their personal credit from their business. Without help, there is really no way for small business owners to know the secrets of a business credit builder program.

The goal of every business owner should be to get your business strong enough that the business guarantees financing for itself. That means no more personal guarantees for business financing!

Answer the following questions:

- Did you sign a personal guarantee for your business credit card? (More than 95% of business cards require a personal guarantee.)

- Did you use (or are you still using) personal credit cards to finance your business?

- Do you have personal assets tied up in your business?

- Does the bank have a claim on equity in your home or other personal assets?

- Do you want your good, positive transactions to be reported to the credit bureaus?

If you answered yes to any of these questions, Compound Profit can help. We offer a business credit builder program that allows you as the business owner to take control of your future so you can separate your personal credit from your business credit forever!

Our program can help you qualify for lower financing rates on bank financing and equipment leasing and obtain better payment terms from suppliers. Don’t hesitate – call us today!

Compound Profit’s Business Credit Builder is available for a limited time for $19.95 per month. Don’t miss out on this opportunity to learn the secrets of building your business credit.  Enroll today!

Jeanine Hansen, owner of the Compound Profit Minnesota franchise, brings more than 20 years of financial experience behind her and has been instrumental in helping local companies get financing, especially when they can’t meet bank requirements. Compound Profit services include account receivable funding and purchase order factoring, equipment leasing, merchant line of credit and commercial credit builder. Hansen earned her MBA from the University of Minnesota Carlson School of Management and a BS in Business from St. Catherine University.

Jeanine Hansen, Regional Director, (877) 386-3716, ext. 216

jhansen@cprofit.com, http://www.cprofitmn.com

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How does the future look for the small business owner? Not too bright, according to a recent Gallup Small Business Index survey, which measures small business owners’ perception of their operating environment, as well as their future expectations. The survey has put into perspective a negative confidence score shift from -17 in April to -28 in July, the smallest value since its inception in August 2003.

It’s also the first time in the index's history that shows overall negative Future Expectations for small businesses; the owners are quite pessimistic about their operating environment, at least for this year and the first half of 2011. In fact, the Future Expectations Dimension of the index has seen the biggest decline – it’s the part of the survey that measures small business owners’ future expectations concerning business income, capital spending, new jobs creation, cash flow and the ease of obtaining financing.

The results of the survey are based on over 600 small business interviews in 50 states. More information about the survey can be found here: discouraged business owners.

It’s the worst score in 7 years, and there’s nothing complicated behind it: the consumer spending growth is quite slow and a snowball effect leads to less capital spending, fewer jobs, and so on. It is clear that small business in New Jersey and elsewhere is really struggling. We are talking about a lack of consumer confidence, as well as about very difficult credit conditions.

Yes, it is true: one out of three business owners considers that getting credit is difficult or very difficult these days, according to the survey. The recession has made the business owners spend their money with care, but the banks are now even more careful.

In a recent meeting with a bank officer, I explained how the use of our smart cash advance product for working capital only evaluated one of the 'four c's' of banking-the character of our customer (collateral, cash flow, character, credit).  He looked at me, and only half jokingly said, "Four c's?  We now have 21 c's! Banks can't make loans except to people who don't need money!"

So, as we get in touch with our markets, recognize they are hurting - can't get lines of credit. We seem to be uniquely positioned to make a seismic change.

Reynolds Dods, rdods@cprofit.com

Compound Profit - New Jersey and eastern Pennsylvania.

Phone: 877-386-3716 ext. 240 / Cell: 609-289-6256

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1. Business Credit Builder Programs – overview

If you are interested in expanding your business, you might already know that getting business credit without using your personal credit as a guarantee is a tricky matter, especially if your credit score is lower than ideal or if you have been in business for only a few years.

Fortunately, there is hope: the corporate credit builder programs allow you to get business loans, even if your business credit score isn’t very good. And the good news doesn’t stop here: if you used to work on a 100% cash basis, a good corporate credit score will allow you to make use of lines of credits with most of your suppliers, thus freeing your operating capital.

Use a corporate credit builder program to get working capital for your business. Here are just a few advantages when using Compound Profit’s Corporate Credit Builder program:

- Pay only $19.95 per month and get all the advantages that come with the much more expensive corporate credit builder programs: obtain business credit, credit cards, leases, line of credits and capital for your business fast! Our corporate credit builder program allows you to build strong commercial credit in only a few months;

- Get actual cash for your business (not just lines of credit with specific stores or vendors) and spend it the way you want to;

- Build your corporate credit profile without putting yourself and / or your family at risk;

- Benefit from tax deductions;

- Get financing and equipment leasing with lower rates and better terms. Get better prices from your suppliers;

- Get peace of mind knowing that your company is compliant with all the laws and regulations.

Most (if not all) companies will need to establish a good business credit score sooner or later; therefore, it is a wise decision to start using a corporate credit builder program today, before the actual need arises. And if you have been in business for several years, you have great chances to get big loans and leases without using any personal guarantees.

No matter what your personal credit score value is, our Corporate Credit Builder program can help you get the business credit you need, without affecting your personal credit or forcing you to use other guarantees. Don’t use your personal credit to finance your business; check out our powerful, inexpensive Business Credit Builder program today.

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Bankers hate to say no to their business clients that are seeking a loan or a line of credit.  But, because of the turmoil in the economy and the subsequent constraints on the banks, they are now forced to decline micro-loans requests that they used to accept prior to the credit crunch that began in 2008.

Many small business owners no longer qualify for these micro-loans given the current financial climate and the bank’s more stringent borrowing parameters.  However, bankers know better than anyone that all business owners need cash flow to keep their business viable.  Liquid cash is needed for payroll, taxes, inventory, supplies, equipment, etc. 

Bankers hear these scenarios every day from their business clients…

1. My sales activity is good, but cash is locked up in receivables.
2. My customers are slow in paying my invoices.
3. I have more cash in receivables than in my bank account.
4. I need to use cash for growth, for payroll, for taxes, for additional staff, for equipment / supply purchases, for vendor cash discounts, etc.
5. I could pursue more lucrative contracts, but lack the ready cash for needed materials.

But the bank had to say no to the client’s loan request.

A solution to this cash flow crunch for business owners and for the banker’s plight of having to say NO can be Purchase Order Factoring.

This is a little known and little used solution to getting needed working capital for the small business owner.  It is not collateral-based, a guaranteed that all the banks require in order to secure a needed working capital line of credit.  Factoring is not a loan so it does not burden the business owner’s financials with further debt.  It is off-balance sheet financing, so it can help build business credit and eventually help the business owner qualify for a bank line of credit.

Benefits of Invoice Factoring for the Bank and the Business Owner

1. Factoring invoices will provide the business the immediate cash that is needed for the survival of the business.
2. As Factors will deposit the cash for the factored invoices directly into the checking account of the bank’s client, the bank will immediately improve their Average Daily Deposit metric.
3. The decision to factor invoices for the business is not based on the owner’s credit, but on the credit-worthiness of his / her customers.  As such, the bank does not have to be concerned about their business client taking on more debt.
4. The end result is that the business client becomes bankable and eventually qualifies for more bank products.

Conclusion.  If you are a small to medium size business owner that is short of working capital, or if you are a banker that would like to improve the Average Daily Deposit metric and eventually expand the financial products for your business clients, consider invoice factoring as a solution to both problems.  It is a financing facility that can solve the business owners’ cash flow problems by unlocking cash tied up in receivables.  It is a very effective means of accelerating cash flow for companies in a growth mode or could be growing if access to ready cash was available… and it is a very effective way for bankers to improve an important bank metric.

Robert Jacobs is an Account Executive with Compound Profit.  Mr. Jacobs helps small to medium size business owners get capital for growth and cash for operating expenses… when the bank has to say no. Visit his web site at http://www.cprofitrj.com/  for more information.  He can also be reached at (877) 386-3716, ext 134.  Learn more about Compound Profit’s SMART CAPITAL ADVANCE solution for business owners and for bankers at http://smartcapitaladvance.com/jacobs/

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MerchantCard is the first and only Ongoing Access to Cash Card that provides immediate funds to business owners whenever they need it.  There is no traditional personal guarantee and because this is not a loan, there is no fixed payment schedule or collateral required.


- Over 95% of applicants are approved;
- Approvals are based on sales volume, not personal credit;
- Account availability ranges from $1,000 to $250,000 per location;
- New businesses qualify for instant access of $1,000;
- Funds can be accessed anywhere credit cards are accepted, at any ATM or transferred to any bank account;
- Simple and Automatic payback process through future sales;
- Availability increases every time payments are made;
- MerchantCard is Your Ongoing Access to Cash.

Along with a MerchantCard, you will be set up with a merchant account to facilitate the payback process, while enabling your business to accept credit cards as a form of payment.  If you already accept credit cards, your rates and fees will remain the same while MerchantCard will provide you with the financing and security you need to grow and support your business.       

MerchantCard is essential for every business owner who wants to build business credit by reporting positive payback to Dun & Bradstreet, Experian, and Nexus Lexus. We highly recommend that you apply for one now – here’s why:
- Reports only positive payments (Not Availability) to: D&B, Experian and Lexus Nexus.
- Having a MerchantCard will not affect your ability to get a loan or another credit card;
- It can be used worldwide, at any location that accepts VISA / MasterCard or any ATM;
- Simple approval process for availability of $1,000 - $250,000 per location;
- Approval is based on your monthly sales volume, not personal credit.

New and  Existing Businesses? Good or Bad Credit? If your business can use Ongoing Access to Cash (similar to a Line of Credit), a MerchantCard is for you! Apply here for your MerchantCard.

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