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 isn’t doing that well these days, and yet more and more smart people want to start their own businesses right now. Why would they want to do that? The answer is simple: they have learned that with greater risks come much greater opportunities.

Don’t be tricked into thinking that this is a novel idea; it’s happened the same way during the Great Depression. In fact, many business owners have profited greatly during the Great Depression, either by having their rivals cut back, or simply by being able to profit better by offering what the market was demanding even during those hard times.

Think about this for a second: the people continue to spend money even during troubled economical times, be it for food, different products, various services, and so on. This means that if you’re able to offer what they’re looking for and you can get them a better deal, you can thrive even when your competitors fail. And by doing so I’d dare to say that you will definitely end up having lots of loyal consumers when the things return to normal. So now that we’ve got this out of the way, let’s return to our business credit cards advantages.

Business credit cards offer almost anyone the ability to start their company, because it allows them to access the needed funds right away, while at the same time separating business expenses from personal charges. Nevertheless, the advantages don’t stop here; making use of business credit cards also allows the company to be more organized and to grow faster.

Many wise companies take care of their expenditures through credit; this allows the company to keep track of its expenses much more easily, because the credit card companies keep track of each and every transaction that is done through those specific accounts, sending the business owner monthly statements that paint a clear picture of the company expenses and allowing them to monitor the transactions, evaluate the tax benefits in advance, and so on.

Here’s another advantage: through business credit cards usage, the company builds its business credit rating, thus creating a good image in the eyes of its customers, suppliers, potential investors, and so on. And on top of that, you can carry a business credit card and be able to make payments even if you are in foreign country, where carrying a bag full of cash wouldn’t be such a great idea.

Making use of a business credit card will allow your company to gain some time when it comes to paying for your company purchases, thus improving your cash flow; by using it, you can also get bonuses like airline mileage or even get some of the cash back.

It might sound surprising, but a good business credit card can make the difference between a strong and a struggling or even failing company; it might be just the needed push that helps you stay afloat now, while your competitors have to close their businesses because they lack the needed capital.

As a conclusion, using business credit cards offers many advantages: they are a source of funding for your business, allow you to keep the spending records in good order, boast your business’ credibility, and improve your cash flow.

Compound Profit offers MerchantCard, a business credit card that doesn’t require personal guarantees, fixed payment schedules or collateral. Contact us to learn more about this offer – our Profit Advisors offer 100% free consultations.

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Compound Profit designed to help small businesses get working capital

The Compound Profit Business Model requires a customer oriented Profit Advisor who is passionate about helping businesses get financing even in this tough economic climate.  The philosophy of founder James Penny is that small businesses must help themselves. 

Getting a small business loan has become harder and harder; the government is not going to help, and in many cases continues to pass laws that make it tougher to run a company and keep it in the black.   Here in Florida and around the country, we are seeing the decline of many businesses who are laying off employees just to stay alive with the hope that they can outlast the economic downturn and ongoing government interference.  Banks are finding it increasingly difficult to provide capital as regulatory guidelines tighten.

At Compound Profit, Franchise Owners such as myself want to provide assistance to businesses.  I have had the pleasure of meeting many hard working business owners who put in many long hours to provide services and products for their customers.  Some have already experienced success; others are just starting out, but have a dream and a passion.  Some were successful, but are now experiencing the impact of the economy.  Every one of those companies wants a way to increase their bottom line and / or have access to working capital.  At Compound Profit, we have services that can help increase revenue and decrease expenses as well as provide working capital. 

Here are some of our services that can provide or save working capital:

• Equipment Leasing
• Accounts Receivable Financing
• Purchase Order Financing
• Merchant Card
• Cash Equivalent Dollars (CEDA Program)
• Commercial Real Estate Mortgages

Here are services we provide that can increase revenue and / or decrease expenses:

• Accounts Receivable Financing
• Cash Equivalent Dollars (CEDA Program)
• Merchant Services
• Employee Leasing
• Collections Services
• Medical Billing

Each Profit Advisor / Franchise Owner has been trained in these services and can help the local business owners get small business loans and thus take their company to new levels.  Why not contact us today let us learn about your company, and let us offer creative, alternative methods to get the capital you need and grow your business?

Doug Linder, Compound Profit Tampa Bay, dlinder@cprofit.com

Phone: 877-386-3716 Ext 218, http://www.cprofit-tampabay.com

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Do you have the Working Capital Blues? 

Many small businesses are growing, even in this economy.  While this is a great problem to have, sometimes having adequate cash flow can be an issue.  How do I keep my inventory at levels that meet the demand, take advantage of sales / discounts, add or replace equipment that I need?  As sales increase, so do the demands for sources of working capital.  Compound Profit may be able to help!

As an alternative financing source, Compound Profit offers several services geared to help growing businesses with these issues.  One option is a MerchantCard program which gives you access to cash advances based on your company’s credit card processing volume.  For the company that invoices for services or products, you can receive working capital based on your past due and ongoing invoices with the added bonus of Compound Profit taking on the collection of your accounts receivables. 

Additionally, lease financing options are available for your equipment needs.  Rather than a large capital purchase, Compound Profit may be able to assist you in structuring your purchases as equipment leases with your local vendors, benefiting you and your equipment vendor.

Local Arizona franchise owner Christy Giroux states: "unfortunately, many business owners are being turned down by banks for varied reasons and don’t know there are other options.  We are trying to get the word out that we can help them improve their cash flow and purchase equipment without taking on more debt or increasing capital expenditures".

Christy A. Giroux - cgiroux@cprofit.com

AZ Principal / Regional Director, Compound Profit of Arizona

Cell:  520-909-7146 / Office:  877-386-3716 ext. 249 / Fax:  888-200-3379

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As I meet business owners at networking or social events within the Washington DC Metro area and tell them about what we do, the first thing I state is that Compound Profit is an “Alternative Business Financing” solution provider to the small business community. The first question that usually follows is… ”What is Alternative Business Financing?”

So what is Alternative Business Financing? In today’s tight economical times when traditional banking institutions have stopped lending money to small businesses and have slashed lines of credit by 30-50%, the small business owners must look at “Alternative Business Financing” solutions or tools to stabilize and grow their business. That answer makes sense but usually does not make the proverbial “light bulb” go off. So these are examples of Alternative Financing Solutions that are available to the small business owner to help them grow and expand their business:

• Accounts Receivables Financing – Factoring, as it is most commonly referred to, is the practice of selling a company’s customer invoices (B2B invoices) to an authorized 3rd party (otherwise known as the Factor) and they will advance your company up to 90% of the invoice amount, collect the money from your customers, and then refund you the remaining 10% minus their processing fee. Unlike banks or other lending institutions, these companies do not lend based on your credit, but focus mostly on your customers' credit worthiness and / or strength in repayment. This is a great way for businesses to better manage their cash flow, purchase needed inventory, or cover operating expenses. There is no need to wait more than 30 days to be paid by your customers when you could take that capital and generate even more revenue for your business in only a few days. Our Smart Capital Advance program is an example of this type of solution.
• Friends & Family - If a bank is not willing to give you a loan, sometimes friends and family are more than willing to provide you the initial seed money or working capital for your business. Usually, friends and family can be the best source of financing because they know you well, and understand the social consequences of you failing to repay their investment.  However, sometimes it is best to keep business and personal relationships separate; otherwise, you risk to ruin those personal relationships. If you do move forward with getting financing from friends and family, make sure that you get all agreements in writing, even if your family members insist that it isn’t necessary.
• Purchase Order Factoring / Financing – Similar to Accounts Receivables Financing, Purchase Order Financing is the advance of funds to a company, based on the amount of the purchase order, so that the company can fulfill the purchase order. Purchase Order Financing is a solution that enables small businesses to go after and fulfill large orders. When used correctly, this can enable you to grow your company quickly. As opposed to bank financing, purchase order funding does not rely on your business credit profile, but rather on the financial strength of your customers. In other words, if you sell products to large companies or to government entities, purchase order funding can be a great way to finance those sales. To qualify for purchase order financing, your company must sell products. An ideal candidate for this type of financing would be a product reseller or distributor who is buying products from a supplier and then shipping the products to the client. Purchase Order Factoring is one of our core solution offerings as well.
• Angel Investors - Angel investors are private parties, and sometimes businesses, that invest their own funds into selected businesses. The angel investor becomes, in essence, a stockholder in your company, and is as concerned about your business' success as you. Each investor establishes his own guidelines, application methods and standards.  Angel Investors do require a fair amount of documentation (i.e. business plan, sales forecasts, sales and marketing plan) before they will invest any funds. In addition to that, the business owner must be willing to give some equity in the business to the angel investor.
• Merchant Cash Advance - Merchant Cash Advance programs grew from accounts receivable financing solutions. Merchant Cash Advance is a financing solution based upon the merchant’s future credit card sales. Specifically, the lender purchases a portion of the business' future credit card sales at a discount, the rate of which is generally based on the business' sales volume and history. In order to receive a cash advance, a business must be operating for a minimum of three to six months and must process a minimum amount of credit card sales (around $3,000 a month). Many lenders provide a short online application that can be reviewed within 24 hours. After approval, most lenders can send the money within a week. The merchant will receive all the money, while the lender collects a fixed daily percentage of the business' credit card sales until the debt is paid in full. Our Merchant Card program is an offshoot of Merchant Cash Advance programs within the industry.
• Peer-to-Peer Lending - With peer-to-peer (P2P) lending, the financial transaction occurs directly between individuals or "peers" without any involvement of a traditional lending institution. Companies such as Prosper.com monitor an online marketplace where borrowers post their loan requests and are connected with lenders who "bid" on the chance to finance the loan. P2P business loans are usually limited to $25,000, and if you default on your P2P loan payment it can negatively affect your business credit profile.
• Equipment Leasing – Leasing vs. Purchasing is a question that small businesses ask themselves every time they need equipment. Leasing offers many benefits over actually purchasing the equipment. For example, leasing does not require large down payments of cash, which can be put to better use inside the business to pay for current operating expenses. In addition, some leases allow customers to expense 100% of each monthly payment, thus resulting in a real tax benefit to the customer. We offer many types of leases: Small Ticket Leasing, Commercial Leases, and Municipal Leases but this is a discussion for another day.

These are just some examples of alternative financing solutions that are available to small business owners. By using these alternative sources of capital, many business owners will be able to grow their business to a point that they do become creditworthy in the eyes of their financial institutions. Compound Profit is the #1 Brand in Alternative Financing and we have a variety of solutions to help small businesses grow and expand their business.

Anuj Mehta, Regional Director/Principal Advisor

Phone: 877-386-3716 ext. 221

Fax: 877-490-4224

http://www.cprofitdc.com

amehta@cprofit.com

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MerchantCard - Get Working Capital

Ah, the good old days - the early part of this decade.  We were only worried about attacks from those who do not like us. Yes, after 9/11, the economy faltered a bit, but it came back, it seemed nothing was going to hold Wall Street or the economy back.  Then the house of cards that was the housing industry began to fall.  Some of us in certain parts of the nation felt the first effects in 2007, fueled by rising property taxes and insurance rates.  By 2008, much of the nation was feeling the sting as we watched our homes decline in value. 

Of course, oil prices shot up.  Unemployment did too. Then came the bailouts. What was happening to the small business owner - the backbone of our economy?  He / she was busy worrying about the family home, looking at declining revenue,  and trying to make a profit. 

Before they knew it, the Working Capital that was available to them from their friendly bankers to grow their business or get them through a roughe patch began to dry up. In addition to that, many companies had credit cards to pay for those business-related expenses we all have. These of course, helped with cash flow as well.

But banks began to reduce the limits for these business credit cards in 2008. The ripple effect to this move was that business owners had to pay down their balances to get within the new limits.  Banks often sent derrogatories to the credit agencies because the business was now over the (new) credit limit!

In 2010 businesses find themselves starved for cash.  Whether they need lines of credit or a simple loan to grow their business or see them through, the cash is just not there. A banker friend of mine, earlier this year said, “I am not having any fun anymore.  I can’t help anyone.”

Compound Profit (CPC) has answers for the Working Capital needs of small business.  Elsewhere, we have written much about Accounts Receivable Financing.  This option is one of CPC’s strongest programs.  But what about retailers and those who do not qualify for this type of working capital?

CPC has an option for companies that process credit card revenue: Compound Profit Merchant Card.  New businesses, businesses whose owners have some credit issues and businesses that need Working Capital can qualify for an advance on their monthly credit card processing of $1,000 to $250,000 depending on the volume.  And, as they pay down the advance they can request additional advances.

With CPC’s MerchantCard there is no qualifying paperwork, no waiting for months for an approval, no tying up assets as collateral, and no loan showing up on the balance sheet!  The process is pretty simple and funding can begin in as quickly as 10 business days. In addition, CPC will report the transactions to the credit agencies, which will enhance the Commercial Credit of the company, helping build credit in the company’s name, not the owner.

If this sounds like something you or someone you know can benefit from, give us a call or send an email.  Our advisors can help you solve a myriad of problems facing small business today.

Doug Linder - dlinder@cprofit.com
Advisor / Principal, Compound Profit – Tampa Bay
http://www.cprofit-tampabay.com
Phone: 877-386-3716 ext 218
Fax: 888-419-3222

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