Compound Profit Blog

There is a lot more to a business credit card than simply providing available cash. It is very important to have credit cards in your business name in order to protect personal credit ratings. However, depending on your needs there are other things to consider when it comes to what makes the best business credit card for your business. 

There are things like frequent flier miles and hotel savings that the right business credit card can provide for those that have to travel often on business. These are just a couple of the incentives that business credit cards offer. If your business doesn’t require you to travel, however, those may not be the right business credit cards for you, but that doesn’t mean that there aren’t others that will give you the bonuses you can use.

Types of Incentives Available

• Cash Back: Many business credit cards give you a cash back bonus simply for using the card. These bonuses may be general cash back on all purchases, or they may stipulate certain types of purchases. In other cases there may be several types of cash back bonuses on a single business credit card. For instance, the bonus from “SimplyCash®” business card from American Express OPEN that offers 5% cash back on office supply purchases as well as on wireless services. It also gives 3% on gasoline purchases and 1% cash back on all other purchases.

• Bonus Miles: If you travel heavily for business, or just want to take a much needed vacation you can choose a card like Capitol One® Spark Miles for Business that gives you thousands of frequent flier miles with no limits. There are no blackout dates for traveling, or any airline restrictions and you can even use the miles for cash back or gift cards if you decide you aren’t going to travel. Capitol One® also has a Spark card for cash if you prefer bonuses rather than miles.

• Bonus Points: Another form of bonuses are given as “points” toward special purchases. InkBold with Ultimate Rewards gives you 50,000 bonus points if you spend $5,000 in 3 months. If you have a lot of large expenses, or use your credit card for regularly recurring expenses this can be a very beneficial type of bonus.

• Hotel Bonuses: If you travel on business or for pleasure this type of bonus can save you a lot of money. Marriott Rewards Business Card is one of these types of cards. It gives you 1 point for every $1.00 spent, plus 2 free nights at certain locations throughout the year, no limits on the amounts you can earn, plus if you use your card to pay for hotel accommodations at a Marriott you will get triple points for each dollar spent.

What You Should Consider when Choosing a Business Credit Card

Remember that along with helping you protect personal credit, your business credit card will help you build your company. However, it’s important to determine what you need your card for in order to pick a card properly. If you need a business credit card to finance big, long-term purchases look for a card with a lower interest rate rather than big bonuses. In the long-run, you will pay a lot less for the overall purchases even after you take bonuses into consideration.

If you are using your business credit card to finance monthly expenses and make accounting easier, you will be paying off the entire amount every month, so interest is not a concern. In those cases, get the most for your dollars by choosing a business credit card with the most useful bonuses for your needs.

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The economy today is not doing so well, but this doesn't mean that you cannot obtain financing for your business. Here are ten ways your company can obtain the capital it needs.

1. Ask Someone In Your Family

If you are starting your own company, you could always ask a friend or relative who might have some extra cash laying around.

2. Use Your Social Network

Have you ever heard of social lending? It is like asking a friend for a loan, but doing so online and with millions of friends to choose from.

3. Put Up Your Own Assets

A bank might not be willing to lend your business money unless it has a solid track record, but you can put your own personal credit on the line. A house or car as collateral helps greatly.

4. Look For Angel Investors

Angel investors are people who are looking to invest in companies with potential. This isn't a loan, but the investment is an equity one, so they will obtain some percentage of ownership.

5. Sell Stock

The sale of stock will raise capital quickly for your company. Remember that you will be accountable to your shareholders if you go this route. They have the right to expect a profit, so make sure you can deliver.

6. Take Pre-Orders

Allow customers to pre-order and ask that they pay in full. This will raise capital before having to buy or ship goods. Think of it as a short-term loan.

7. Get those A/R To Your Bank Account ASAP

If a customer was delivered goods, but has not yet paid up, ask that the customer do so. You can even offer incentives to get that cash in a little quicker.

8. Micro Loans

A Micro Loan is a small loan that carries a smaller interest rate. A credit card could be as much as 22 percent APR for a small 1,000 loan, but a Micro Loan averages around 8 percent interest.

9. Sell Or Rent Assets

Renting an unused room could be a great way to raise cash. Selling your old copy machine could also be a great way to get some extra money quickly.

10. Credit Cards

If no other loan option is available, a credit card is a last resort. Beware of high APR's, but it could be a bailout when you are in desperate need of capital.

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Most aspiring business owners are turned down by the lack of funding; most times, they have tried their best to save the needed money, but they didn’t manage to raise enough funds. Fortunately, there are several financing options at their disposal; this article will go through the most important ones.

Before I begin, though, let’s think at this process from the lenders’ point of view. As you can imagine, the lenders will be interested in learning as much as possible about your business’ history; this makes it easier for them to decide if they should invest their precious financial resources in your company or not. Having a good business credit score will help a great deal; nevertheless, if you had some credit-related problems at some point in the past, make sure to bring them to the lenders’ attention, letting them know how you got into that and out of it – don’t let them discover your mistakes, but tell them in advance about your mistakes!

Another key factor is your cash flow management experience; the lender will definitely want to make sure that you are able to cover all the monthly expenses and also take care of the additional debt. In fact, if your business is profitable, putting up some collateral is definitely a good idea, because it motivates the lenders and reduces their risk in case you default.

So what are the main financing sources that are available today? The banks were doing a great job helping the small business owners to get financing until a few years ago, when they have decided to avoid risk by all means, inventing tight rules and regulations. Another option is the government, which works with the traditional lenders through the Small Business Administration (SBA) loans, reducing the lenders’ risk in case that you are unable to repay the loan. There are various SBA loan types out there, because they were designed for various needs: companies that lack collateral, need the money fast, want to get the funds without going through a lot of paperwork, and so on.

You can also get financing through venture capital, funding from companies that are looking for profitable businesses in which they can invest their money. A related financing option comes from angel investors, individuals who are always trying to make a good investment. Nevertheless, with these types of funding, you are going to be forced to give away equity (and thus lose total control over your company) most of the time.

Finally, you can get financing from the alternative financing companies, who offer a variety of financing options for small business owners, no matter if they have managed to put up some collateral or not, no matter if their business credit history looks good or not, etc. Compound Profit can offer business funding options with interest rates that start at 0% (this is not a typo!) to the business owners, so contact us for a 100% free consultation.

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It’s sad, but true: most business owners will have to face cash flow problems at some point. And the math behind this is very simple: you’ll have more cash going out and less cash coming into your business. If this bad situation lasts for several months, this might be the end of your company, especially if your business needs to purchase goods in large quantities on a monthly basis.

So how do you prepare for such unpleasant events? Many entrepreneurs are using unsecured business credit lines as their financial safety nets. An unsecured credit line is a business financing method that allows you to have access to cash without using any collateral. As you can imagine, having access to a business credit line can help your company a lot, especially when you (temporarily) lack the needed funds that would allow your company to run its operations.

This financing instrument will definitely come in handy if your company needs to make large purchases in order to bring in profit, but lacks the needed working capital. Other business owners will be attracted by the idea of having access to funds without risking their company’s (or personal) assets. And as an added benefit, the interest rate is usually lower when compared with the financing offered by business credit cards.

In fact, some of the business owners choose to apply for unsecured credit lines even if their companies are in perfect shape; this gives them peace of mind, because they know that they’ve got a backing cash source that can be used if their company has to face unforeseen circumstances.

Getting an unsecured credit line isn’t an instant process; due to the special characteristics of this financing instrument, the lenders will want to check your business’ credit history – they take a greater risk by giving you the money, because you don’t offer them any collateral. If you plan to apply for an unsecured business credit line, the most important thing is to maintain a good business credit score, making all your payments in time.

While you can’t tell if / when your company will have cash flow problems, having access to an unsecured line of credit will lift quite a bit of pressure off your mind. Contact us for a free consultation; our highly trained Profit Advisors will help you get a custom funding solution that will act as a strong financial safety net.

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I have to admit it: despite the economical turmoil, the business financing industry is blooming. There are so many financing companies out there, and some of them offer great funding options. As an example, we at Compound Profit can finance restaurants that have started their activity today, as well as business owners who were hit hard by the recession and don’t have a good business credit score.

On the other hand, it is true that a good business credit score will help you get bigger loans with lower interest rates, and generally with much more flexible payment terms. Building business credit used to be a difficult, time consuming task in the past; many companies were struggling for years without being able to achieve good results. Things have changed now, so if your company has been in business for 1 or 2 years you can expect to achieve good results in less than 6 months, provided that you use the services of an advanced, modern generation business credit building program.

So what can you do if you’ve got a poor credit rating? Repairing it on your own isn’t impossible, but this is a time consuming process and since hiring a business credit building company isn’t expensive at all, you’d better do that and concentrate your energy on your company’s profit-producing activities.

Maybe you didn’t set up your credit identity yet; fortunately, you can do that easily by registering either as a corporation or as an LLC; this is the first thing to do if you want to accelerate the process. Then, you will need to create a credit record with one of the major credit reporting agencies, such as Dun and Bradstreet – these agencies will track the way in which your company is paying its bills, seeing if you manage to pay your suppliers and other creditors in time.

As an example, Dun and Bradstreet uses Paydex, a numerical value that can range from 0 (worst) to 100 (best); a Paydex score of 75 or better will send a strong, positive sign to the business financing companies and will definitely help you get a loan under good terms. Now that you’ve built your credit identity, the following step is to apply for a loan. These loans come in two flavors:

- Secured loans, where you have to use some property as collateral, but you can get a loan with a lower interest rate;

- Unsecured loans, where you don’t have to use any collateral, but since the lender’s risk is bigger, you will have to pay a higher interest rate for the loan.

Now that we’ve got these out of the way, what type of funding will your company use? You could start with business credit cards, such as CProfit's Merchantcard, which has great interest rates. Another option would be to use regular loans, which allow you to use the money as you want and come with payment terms that can go up to 10 years (and sometimes even more!). Finally, if you’ve been in business for several years you can have access to credit lines, which can be of great help if you need to make some unexpected payments.

No matter what type of funding you’re interested in, our highly trained Profit Advisors are here to help you make the best decision and help your company grow. Contact us for a complimentary consultation and you will find out why we are known as the best alternative financing company in the U.S.A.

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Starting a business is definitely an easy process nowadays; in fact, some of you might have started an entrepreneurial activity as kids, selling lemonade, cookies and so on. It might have been fun back then, but running your own business is definitely a much more rewarding task as an adult, because it allows you to set your own working schedule, make a lot of money, pursue your dream idea, etc.

It’s not an easy task, though. Starting a business isn’t a difficult process, but making sure that it runs successfully for many years takes a lot of hard word. It all starts with the planning phase: what would you like to do? And another immediate question would be: does the world need what you would like to offer? If the answer to both questions is a sound “Yes!” then you can move on to the following step.

It’s time to do some market research, figuring out what products and services you can offer. Then, ask yourself a few more questions. How does my competition do? What products and services are they offering? Do they struggle to survive? Is there enough room for another company (my company) in this industry? Can I offer additional products or services that they don’t have? Or at least can I offer the same products and services at a lower price and / or higher quality? How much money will I make from each product sale? Would buying a successful franchise work well in my area? Do I need to hire one or more employees from the very beginning? There are many more questions to ask, but I’ll let you do a little brainstorming by yourself; feel free to ponder on it because knowing the answers to these questions will maximize your chances to come up with a winning plan.

OK, so now you’ve got a great business idea, you have studied the market and you have written down a solid business plan. How do you intend to get the needed financing? If you plan to start a small business, the costs could be as low as 20$, enough to cover the costs for a domain name and a year of website hosting. Most viable business ideas will require more funds, though, so it might be a good thing to keep your current job until your business starts to produce a consistent income stream.

The needed funding can come from several sources: your own savings, your relatives’ savings, credit cards or business financing companies. Try to estimate your business’ monthly running costs as precise as possible, and then add 50% to that figure – you will definitely forget some things, and it’s always better to overestimate your needs, instead of underestimating them, and then trying to come up with the additional money out of thin air. Compound Profit offers financing for startups and established businesses at great rates, so make sure to contact us for a complimentary consultation.

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We’ve discussed about the many benefits that arise from making use of a good business credit card a few weeks ago; these financing instruments can be very useful, especially nowadays, when the traditional banking institutions don’t seem to like the small business owners that much.

Nevertheless, I have to admit that some of the entrepreneurs didn’t manage to be that successful when using business credit cards either, so let’s examine some of the issues that they have faced and our solutions that fix these problems for good.

The most frequent problem we’ve encountered when it comes to poor business credit card management is a lack of strategy. One of the smartest things that you can do with a credit card is to use it wisely, preferably on profit-producing tools and services. It’s not as easy as it sounds, though, because some of the business owners, as soon as they get access this new financing source, are unable to fight the shiny-new-object syndrome, buying equipment that they can’t actually afford to purchase, and thus affecting their credit score and practically closing the door that would allow them to get good business loans in the future. Setting limits on the amount of purchases that can be made is a wise idea, then; this will allow the owner to save some of the money, having access to an emergency fund if he or she has to face unpredictable events.

Other business owners neglect to pay their bills on time; this is a very simple, very important and yet very often overlooked task that can have devastating effects on your business credit score, not to mention the penalty charges and interests that build up, making you pay much more money as penalties, instead of investing them in your company.

We didn’t see this happening very often, but sometimes the employees might use the company cards for their personal purchases. Setting a fixed credit limit for each employee and requesting account reports on a regular basis will allow you to see if your money is being spent as you expect it to be (or not).

Not having a strategy in place, and thus spending the money on things that don’t bring in substantial profit, giving in to the shiny-new-object syndrome, not setting limits on the amount of purchases, not paying the bills on time and not examining the account reports on a regular basis are the main mistakes that are made by some of the small business owners.

If you take care of these matters, though, then you should be comfortable knowing that a good business credit card can literally save your business, offering you the capital you need in order to survive through tougher times, and then to grow your company at full speed. Contact us to get a complimentary consultation with one of our highly trained Profit Advisors.

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If you’re read my previous articles you already know the importance of having a strong business credit. It all ties in directly with the ability to have access to a good credit line, thus getting the needed funds that are required for your company’s growth, by purchasing new equipment and generally improving your business’ capital flow.

As your business grows, you might need larger and larger funds, so bigger and bigger credit lines might be necessary. We have discussed about the advantages of using business credit cards (some of the most used instruments when it comes to business financing) in a previous article, and there are quite a few advantages that arise from using them:

- They can be obtained easily and give the owners instant access to cash;

- They offer flexible payback terms;

- They allow the company to keep track of their expenses easily, thus allowing them to keep their financial records in good order;

- They help you build up a strong business credit.

Another important financial instrument that should be taken into account is the unsecured business line of credit, which might come in handy especially if you have larger expenses, because it offers a bigger credit limit, a flexibility that’s similar with the one given by a business credit card and usually a lower interest rate.

Getting access to an unsecured line of credit is easier when compared with the process that’s necessary for getting a regular business loan; nevertheless, having a strong business credit score is mandatory no matter what option you choose, and opening a business credit card account on your company’s name is the very first step that must be taken in order to get access to an unsecured line of credit.

So just to summarize, an unsecured line of credit:

- Gives you access to larger funds;

- Offers a business credit card-like flexibility;

- Has a lower interest rate;

- Can be obtained easily, provided that you’ve got a good business credit score.

Compound Profit has developed an affordable, powerful business credit builder program that brings in results almost instantly, trimming down the long, painful process of obtaining a strong business credit score from 2... 4 years to only 4 months. Contact us for your complimentary consultation and discover even more benefits.

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