Strong Business Credit

THE VIRTUAL LANDSCAPE

2010-01-12T09:59:00.000-05:00

In an age where email is indispensable and the entire world is just one click away, it might go without saying (but we’ll say it here so there’s no question): doing business via the internet is one of the smartest steps you can take to ensure the future and growth of your business. Not only will you have a new, easily expansive way to present your company, brand, product and services, but with the right maneuvers, you have an opportunity to gain an instant global audience. While promoting the company image you desire, a well designed website will allow your target audience to locate and contact you with a click. Simply put: web presence is vital to all businesses in all industries.

While a chapter on the importance of the internet may seem out of context and less specific to building strong business credit than previous chapters, it’s nonetheless extremely important. Web presence alone does not build business credit. However, a website can do much to add credibility to your business, and therefore, improve your business image and profile.

WEB BASICS

Typically, a simple 5-page website can cost between $400-750. This basic fee usually includes conceptualization (the basic look), design (how it will be set up), development (working out the kinks), and deployment (getting it up and running). Since a website is a physical presence on the internet (it works from a host computer), you’ll require an Internet Hosting company that specializes in delivering your website to the internet. These are easy to find on any websearch engine and typically charge between $5-50 per month for their services.

Once your website is active, you can begin taking some steps outlined in this chapter to ensure that your site can be searched for and found by users who are looking for your business, product, or service.

Ilya Bodner

Small Business Owner

National Corporation

EXITING GRACEFULLY

2010-01-06T08:44:00.001-05:00

Sometimes the business owner would like to retire the business. Sometimes, it’s the best decision. If you are in that position, there are a few steps to follow. You must first agree with others who may hold stock or have otherwise invested in your small business that the business should be closed. If your business partners disagree, you may be able to get out of the small business without going through all the trouble associated with closing it or selling it. Always explore the options. However, if everyone is in consensus that the small business should be closed, you must follow a few steps to ensure that, when closing the business, all the necessary bases are covered.

Your first step is to notify the government agencies that regulate your small business that you will be dissolving the business. Local, state and federal governments may need to be notified, so be sure you investigate who should be informed that your business is closing.

Next, your permits, licenses, and other business paperwork must be taken care of, canceled, or suspended as per legal regulation. After that, you must ensure all debts and taxes are paid and current. If you are unable to pay your debts, you must meet with your lending institution to agree upon a payment plan.

Lastly, notify all creditors, employees and customers. You do not want your business to simply disappear off the face of the earth. Your employees need to know that they'll have to seek employment elsewhere. Likewise, your customers will need to know that they’ll have to find another place to do business.

One of the most important parts of closing your small business is dealing with the taxation aspects of it. There are several things you must do to resolve your tax situation. If you omit one of these details, the IRS may be seeking restitution long after you thought your business was closed. (A detailed list of tax-related items and issues that you must take care of can be found at the IRS website.)

Ilya Bodner
Small Business Owner
National Corporation

CONTROLLING CHAOS DURING EXPANSION

2009-12-28T09:27:00.000-05:00

Chaos, confusion and catastrophe are what Michael Gerber of Entrepreneur Magazine calls “The Three C’s of Business Failure.” It is not uncommon for a small business to be plagued with chaos. The best advice is to take control before chaos becomes habit. “Most small businesses are a hopeless mess,” Gerber says. Disorganization and confusion are irritating, but worst of all, they cost your business money. Chaos eats away at productivity and, ultimately, profits. How can you steer your business clear of chaos?
There are some basic principles any small business owner can apply to control chaos at work and establish order when they are considering business expansion. Establishing office routines (and actually implementing them) can help a small business stay organized and running smoothly. Routines should be established for handling paperwork quickly and efficiently instead of haphazardly piling papers onto a desk. Also, employees should have clearly defined roles and know exactly what they are responsible for. When a problem arises, it’s much easier to hold someone accountable if roles are clearly defined. Accountability makes it easier to correct the problem.
One obvious point often overlooked by small business owners is keeping accurate and updated business records. The small business owner should make updating records routine: this usually only takes a minute. It’s simply a matter of making it habit at the office. Lastly, when business expansion is on the table, don’t overlook your office space. Are you tripping over boxes and chairs as you walk through your office? Make sure your office environment does not create a chaotic atmosphere.
Of course, no small business is ever completely free of chaos, nor should it be. A certain amount of chaos keeps a small business exciting and keeps creative juices flowing. The key is for business owners to learn how to transform the power of chaos into a creative and a positive force.

Ilya Bodner

Small Business Owner

National Corporation

Economic Turmoil

2009-12-21T10:52:00.002-05:00

In case you haven't seen this great article about 2010 small business start ups:

http://www.entrepreneur.com/trends/index.html

It's not the $700 billion bank bailout. And no, it's not the $787 billion American Recovery and Reinvestment Act of 2009. The real economic stimulus is ... wait for it ... the recession. That's right, the Great Recession. This upside-down economy is creating entrepreneurial opportunities aplenty, so long as you can deal with a situation about as stable as a lava flow.

Results from Challenger, Gray & Christmas' job market index revealed that 8.7 percent of job seekers gained employment by starting their own businesses in second quarter 2009--way, way up from the record low of 2.7 percent during the last quarter of 2008.

Even in finance, confidence and risk tolerance are on the rise. IbisWorld, an industry market research firm, expects that after a great purge, loan brokerage services will see 40 percent growth in 2010.

Sunwest Bank, a community bank that caters to entrepreneurs, upped its total assets by more than $150 million during the worst of the financial crisis--and that was before acquiring two failing banks in July and September. "We were picking up good clients left and right," says CEO Glenn Gray. "Business owners are still seeing opportunity."

Delve further into the numbers. It appears startup rates remain steady through recessions. "Ten, 15 years from now, there will be a slew of companies that we'll point to and say they started in the recession," Kauffman Foundation senior analyst Dane Stangler says. "You don't see them yet, but you can be sure they're out there." In fact, more than half of today's Fortune 500 companies were founded during a recession or bear market.

Austrian economist Joseph Schumpeter once described entrepreneurial innovation as a "perennial gale of creative destruction," forcing existing companies to adapt or fail. "Economic progress in capitalist society," he declared, "means turmoil."

Well then, we must be on the right track.

Ilya Bodner
Small Business Owner

TURNING CHAOS INTO ORDER

2009-12-14T11:04:00.000-05:00

When it comes to running a small business effectively, nothing is ever as it seems. From the outside, it may appear that a business, large or small, is doing very well for itself. The lights are on, customers are buying and the owner of that small business is lucky, or has an easy job. That may be the farthest thing from the truth.
Just because something looks like it’s operating smoothly and profitably on the outside, does not mean that things are smooth on the inside. Interior chaos can start with anything from disgruntled employees to delinquent customers to unmanageable vendors. This sort of chaos is not seen from the outside. Even worse is that the owner may not identify the problem until it is too late.
Knowing how to run a small business is a skill—acquired over time. If it were easy, we would have a business owner on every corner with no employees. Even the presumably simplest small business, such as selling hand-made quilts from your home, will have some inherent amount of chaos. Not only should the chaos be controlled, but actually harnessed in order to create a harmonious balance that allows the business to run smoothly. Properly done, it can make the casual onlooker think it's easy.
A part of managing these issues is knowing when you need help—whether it’s a CPA, a lawyer, an experienced employee or an advisor. It’s often the same dilemma: when to hire more employees or when not to hire more employees. How you manage these challenges and many more factors will determine if chaos will prevail and prevent smooth control and operation of your business.
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Ilya Bodner
Small Business Owner
Initial Underwriting Group

GIVE CUSTOMERS WHAT THEY WANT

2009-11-30T11:11:00.000-05:00

Finding out what customers want, and then setting out to meet their needs, provided it can be done at a profit, is what helps prevail in the marketplace. Demonstrating to customers how a product or service can satisfy their wants and desires will strengthen the holding glue between the customer and your business. The wise business owner is always aware of customer wants. Many businesses make the mistake of assuming that a customer’s number one priority is low price. But before price even becomes a factor, the customer wants other things. The customer is looking for ways to improve their quality of life, their productivity, to become more profitable, or to increase their competitive advantage. Meeting one or all of these fundamental wants will add value and move the customer forward.
Getting what the customer wants does not necessarily mean going out and changing your product or service. In most cases, adding value is about the delivery, the way the facts are presented and carried out.

THE EVER-CHANGING MARKET
Research from Harvard University highlights the fact that customers' needs are changing faster today than ever before. This definitely impacts small business expansion. Constant adjustment in supply must be made in order to meet the demand of the times. A small business owner should always be seeking out new opportunities in the marketplace and preparing for small business expansion.
The adjustment does not always mean changing existing practices. Has your small business reached out to a new demographic lately? Many small businesses are discovering that by reaching out to new markets, they are able to expand their business to new horizons. When Tiffani Kim noticed the customers of her spa bringing in their husbands and boyfriends, she started reaching out to the male market, which now constitutes 30% of her small business. Kim T. Gordon of Entrepreneur Magazine stresses not to forget minority markets, such as the growing Latino market. “The Latino market is an entrepreneur's dream,” she claims. “With economic clout expected to reach a whopping $926 billion by the end of 2007, the Latino market's buying power will soon outstrip that of all other ethnic groups in the United States.”
One market that many small business owners ignore is the public sector. The federal government, local and municipal governments, colleges and universities, school districts, nonprofit organizations and public utilities are great opportunities for small businesses. The federal government’s civilian agencies alone buy a range of products in more than 4,000 different categories. Furthermore, small businesses often have an edge in competing for procurement dollars because of government regulation designed to promote fair competition. The public sector is often required to give a certain amount of business to small, women- and minority-owned businesses.
The marketplace is a treasure hunt. The small business owner should constantly be searching for creative ways to reach out to new markets and customers.

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Ilya Bodner
Small Business Owner
Initial Underwriting Group

TIME TO MARKET

2009-11-16T13:25:00.000-05:00

Who is willing to dedicate the time and hard work necessary to properly market your small business to the right people? There are countless books, websites and newsletters readily available with small business marketing advice. It is one of the most well documented parts of operating a small business, simply because it is one of the most important parts. If you're willing to do the work yourself, you’ll need to do copious amounts of research and sort out the good advice from the bad, which isn’t always easy. The burdens of operating a business can leave you with little time to do all of this additional work.

Consider the possibility that you may be better off having a small business partner who is experienced in sales or marketing, or if your budget allows, hiring a professional to handle the marketing aspects of your business. Not even the best idea will find success if it is poorly marketed or not marketed at all. Moreover, if you don't sell your product, someone else will.

EXPANDING YOUR BUSINESS
When deciding to expand a business, there are a few key things to consider: time, cost and profitability. How long will it take to put in place the actions that will allow the expansion to be successful? How much will the expansion cost? Is the amount needed currently in the budget, or will it need to be borrowed? Will more staffing/resources be needed, and if so, at what cost?
If considering more than one method of expansion, the most important consideration to weigh is long-term profitability. Weigh the pros and cons of each method to decide on the most effective route.

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Ilya BodnerSmall Business OwnerInitial Underwriting Group

THE SPIRIT OF EXPANSION

2009-11-11T09:35:00.000-05:00

What exactly is an entrepreneur and how does it relate to small business expansion? There are many differing views on what makes someone worthy of this title.
Investorwords defines entrepreneur as “an individual who starts his/her own business.” In a general sense, the word applies to any person starting a new project or trying a new opportunity. However, this definition leaves out other essential characteristics of an entrepreneur.
Merriam-Webster Online defines entrepreneur as "one who organizes, manages, and assumes the risks of a business or enterprise.” This definition is definitely richer, but still lacks the sense of innovation and creativity that defines a true entrepreneur.
Dozens of definitions exist, but none are comprehensive. Entrepreneurship involves uncovering an opportunity to create value, transforming knowledge into new products, and bringing them to the market. It is an entrepreneurial mindset that will make the difference in small business expansion. Success in entrepreneurship requires not only knowledge, but an acquired skill in the process of creating something new. Starting with practically nothing, an entrepreneur is one who organizes a new venture, manages it, and also assumes the associated risk.

“an innovator of business enterprise who recognizes opportunities and is not afraid to act.”
- StrongBusinessCredit defines entrepreneur

Being an entrepreneur is about having a certain mindset, tendencies, and personality traits such as team building skills, persistence, selling skills and a very low tolerance for mediocrity. An entrepreneur won’t flinch while accepting financial risk and undertakes new ventures with a positive attitude. Entrepreneurs are spontaneous, creative, eager for continued learning, and willing to make difficult decisions in the absence of solid data.

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Ilya Bodner

Small Business Owner

Initial Underwriting Group

TRACKING SOFTWARE

2009-11-04T09:37:00.001-05:00

Smart businesses use computer-tracking software for just about everything. Digital tapes show employers the exact sequence of everything their employees are doing on the computer. It records emails, chats, IMs, websites, web searches, programs run, keystrokes typed, files transferred, screen snapshots and more. It offers chat and internet access blocking. Alerts notify whenever certain words or phrases are typed. Computer tracking surveillance allows companies to determine which employees spend the most time surfing websites, what they are searching for on the internet, who chats the most, who sends the most emails with attachments, and who is arriving late or leaving early.
Another key reason to have computer-tracking software is to monitor production and time management. By improving monitoring projects, companies can ensure they are on time and on budget. Employees become more productive with the visual aid of graphs, charts and reports. HR tracking systems eliminate manual time sheets, keep track of all billable time and prepare estimates on past projects. Once a company has the power of knowing where its time is spent, they also have the ability to make better-informed decisions. Managers can effectively prioritize their goals and tasks, and sales teams know if they are spending enough time selling. Programmers and analysts monitor their projects for improved planning.
When bidding on a job today, delivery is a priority. Job scheduling and tracking software prioritizes tasks to enable the job to be completed in the least time possible. Computer-tracking software is an effective tool in lead, sales, issue and project tracking, managing and coordinating projects, people and activities.

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Ilya Bodner
Small Business Owner
Initial Underwriting Group

Billable Hours

2009-10-27T14:10:00.001-04:00

While the term “billable hours” is most commonly associated with law professions, this concept should be used by all business owners. It’s important to set the minimal hourly rate you want to earn as a bottom line.
How much should you earn per hour (or day, week, month) as a business owner? Many books on time management recommend the practice of thinking of each hour of your time as being worth a specific quantity of money: the time is money concept. First, figure out what your hourly rate is, and if you want to earn more money, then you must mentally raise your hourly rate, so you can start concentrating on activities that are worth more. For example, if you currently earn $50/hour and want to earn $75/hour, then you have to do less $50/hour work as you shift to doing $75/hour work. This gives you a clear idea of what your time is worth and can help you focus your efforts.
Thinking in terms of an hourly rate will definitely help limit your downside as a business owner. However, be careful not to limit your upside. Of course, it would be foolish to miss out on a $1,000/hour opportunity simply because it doesn’t match your billable hourly rate. The key is to set a minimum hourly rate and not go below that rate. But be sure not to miss a truly lucrative opportunity to go above your minimum rate. Those kinds of opportunities may only come along so often.

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Ilya Bodner
Small Business Owner
Initial Underwriting Group

WORKING SMART VS. WORKING HARD

2009-09-28T09:05:00.002-04:00

Many people associate working long hours with working hard. As a business owner, you might pat yourself on the back after a long, hard day at work. But business owners should focus on working smart versus working long hours. Hard work has a new definition in our lives today.

“Hard work is about risk. It begins when you deal with the things that you'd rather not deal with: fear of failure, fear of standing out, fear of rejection. Hard work is about training yourself to leap over this barrier, tunnel under that barrier, drive through the other barrier. And, after you've done that, to do it again the next day.”
- Seth Godin, Labor Day of 2007 (Mr. Godin is still at work)

What does it mean to “work smart”? According to Harvard Business School, working smart means simply, “getting the same results in less time.” To do that, the business owner must change how they work. Changing speed and increasing focus and organization are crucial to working smart. Don’t waste time simply feeling productive. You might feel like you are being productive, for example, by emailing 100 potential clients; but if those emails don’t show the desired results, then you are wasting your time and aren’t working smart. Filling your time with busy work doesn’t mean you are being productive either.
Concentrate on higher-output work. What activity or activities do you perform during your work days that bring the most rewards or results? Once you focus your efforts on these high-output activities, you can spend less time working and still increase productivity. Streamlining activities will cut your working hours and allow you to concentrate on increasing productivity and working smart. Concentrate on constantly making your business processes more efficient and cutting processes that aren’t producing results.

Ilya Bodner
Small Business Owner

PLANNING FOR THE SLOW TIMES

2009-09-17T15:14:00.000-04:00

It’s important to remember that all businesses have downtime. There are periods when business is slow no matter how much you advertise. Your business may be operating seasonally, such as concession stands at sporting events or neighborhood ice cream trucks. It may also indirectly operate seasonally, by manufacturing a product that is only bought and used during a particular time of the year. For example, building materials may not be in high demand during winter, or antifreeze during summer. And still, there are times when even businesses that are viable year-round slow their pace. It is essential to plan for downtime, predicted or not, so that your company can survive financially while preparing for good business when it comes again.
Use the downtime to reorganize the business, clean up (either figuratively or physically,) and generally, get things in order. Jacqueline Edwards, Business Development Specialist for BusinessPipeline.com suggests several ways to tune up a business during downtime. These include checking annual goals, finding ways to cut costs, updating databases, refining marketing and business development strategies and rejuvenating yourself by taking a vacation or simply relaxing.
If your business is truly seasonal, however, and shuts down for planned downtime, there are things you can do to help ensure your business will be ready to go again when the season is right. Use the downtime to plan the next year's cash flow, find better financing and readjust the level of employment you need for your business. Marketing, even during downtime, can make sure your business is successful when you start up again. For example, billboards or other advertisements that better help people associate a certain season or time period with your business, can help ensure that customers are waiting for you (even literally) when you open your doors again.
At StrongBusinessCredit, we remind our clients that the true entrepreneur finds benefits in the slow season and works with business mentors and other professionals to prepare for the busy season.

Ilya Bodner
Small Business Owner
Initial Underwriting Group

PRUNING TIME

2009-09-01T12:44:00.001-04:00

Your small business is bound to yield fruit when you keep long-term goals in mind during daily operations. In this chapter, you will find tips that will help your company function with optimal impact and align the moment-to-moment operations with the overall vision and goals you’ve set forth in previous chapters. Constant examination of each department that has an integral role in the effectiveness of the business should be monitored for its contribution to the "bottom line."

COMPETITIVE ADVANTAGE
Developing a strategic asset, similar to a trademark or brand name, creates a competitive advantage over other companies, which raises barriers to entry in your marketplace. If there were no barriers, competitors could walk in and take over. No one would have a competitive advantage over another. All would be equal, with regular, dull profit margins.

“In business, I look for economic castles protected by unbreachable ‘moats.’”
—Warren Buffett, Berkshire Hathaway Annual Report (1995)

In order to achieve and maintain a competitive advantage over your rivals for any invention, service or product, it is wise to develop some line of defense. Just as in sports, a team must have a defensive plan against the competition. If it is a strong line of defense, your opponents will eventually give up. The more competitive the market is, the more barriers are recommended to maintain a competitive advantage. It is worth the effort, as rewards are high.
With a trademark in effect, as a strategic asset, that product becomes recognized over others in the industry, and will hold against strong competition, sustaining prices and profit margins. Another strategic asset is establishing a brand name. This deters competitive companies in the beginning stages. Brand names take more time to establish.
A company definitely would command a stronger presence with more barriers, such as a patent or copyright, and would lead the pricing in their industry. The more strategic assets a company attains, the more successful that company will be.

Ilya Bodner

Small Business Owner

STRATEGIC ALLIANCES

2009-08-21T11:04:00.000-04:00

Strategic Alliances are a strategy for getting what you need for your small business without necessarily incurring further debt. This happens when two or more companies form an alliance while retaining their own identity; in certain cases, a separate legal entity or “joint venture” can be formed to accomplish the same purpose. Each company agrees to commit resources for common business objectives.

Through strategic alliance, the joint venture can penetrate the markets it chooses without a loan. Sometimes referred to as a reverse-loan, a strategic alliance helps two or more companies’ revenues share on a mutual or multi-component product and/or service.

For example, StrongBusinessCredit takes advantage of and benefits from such alliances. Perhaps the most valuable alliance for SBC has been with Initial Underwriting Group (IUG), who’s enhanced our ability to reach out to more lenders. Prior to IUG, StrongBusinessCredit was considerably limited with its brokers and lenders. With IUG, we have been able to broker out to more lenders and larger networks.

This strategic alliance has opened doors for our clients. Previously, StrongBusinessCredit had three account types which it could service: scratch startup (SSU), overextended startup (OSU), and business credit only (BCO) businesses. That meant that if you are already in business we could not help our clients to our satisfaction due to the focus on business credit building only. With a strategic alliance with IUG, we have been able to extend our expertise advice to two more account types. Now, no matter what stage business owners find themselves at, IUG and StrongBusinessCredit are now able to accommodate. The power of a strong strategic alliance can’t be denied.

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Ilya Bodner
Small Business Owner
Initial Underwriting Group

BROKERS & DEALERS

2009-08-12T12:27:00.000-04:00

A broker is defined as anyone who makes securities transactions for others. (The exception to this is a bank.) A dealer is defined as someone who buys and sells securities for their own account, through a broker or otherwise.
Most entrepreneurs are looking for start-up capital and for someone else to raise capital for them on a straight commission, with no up-front fees. Only registered broker dealers, and Bona Fide employees, can legally solicit/sell securities for a company on straight commission, with no up-front fees. They always charge an up-front retainer, sometimes called due-diligence fees, before commencing. This fluctuates depending on the complexity of the transactions. Most brokers/dealers avoid startup and early stage companies. A Bona Fide employee cannot be paid commission from the sale of securities.
A statistical report which gathered data from electronic filings by registered investment advisers with the Securities and Exchange Commission (SEC) as of April 7, 2006, showed more than 75% of clients are hedge funds, dealing with 1,336 hedge fund firms, an increase from 1,092 firms previously registered. This leaves little room for the small businesses. Total assets managed (AUM) by SEC registered investment advisers totaled $31.4 trillion, increased by 17.2% over 2005.

PRIVATE LENDERS & VENTURE CAPITAL
Although we have touched on this topic in Chapter 6, Venture Capitalists are worth a second glance in the context of alternative financing. Venture capitalists are private loan lenders that have relatively high standards for loaning money to small businesses.
Generally, venture capitalists shy away from start-up businesses in most industries, unless the owner has a history of success. They tend to be private loan lenders that focus on small business financing for high-tech companies. They expect a company they fund to have experienced and diverse management that will drive a fast-paced growth model. Venture capitalists expect a very high return on their investment. For these reasons, venture capitalists, like “angel investors,” are only a reality for the most well-planned business owners.

Ilya Bodner
Small Business Owner
Initial Underwriting Group

SECURED CREDIT CARDS

2009-08-10T11:07:00.000-04:00

A great way to get in the door with some alternative financing institutions is to take out secured cards. The concept is the same as any other secured credit card. A secured credit card requires a specific amount down, securing liquidity, in exchange for a revolving line of credit. Spending is treated just like any other business credit card. The initial deposit made on the account is not used to pay the balance unless defaulted on the payments. The payment is tracked and, after longevity of the account, other lending options become a possibility.
Secured credit cards are not a form of alternative financing but are included in this chapter to remind the small business owner that long-term planning is needed to keep financing options open.

PEER-TO-PEER LENDING
Peer-to-Peer Small Business Lending is a system used to connect a private lender and small business owner. The borrower posts the details of the business loan he or she is requesting at sites like prosper.com and our own site at www.strongbusinesscredit.com. Emerging sites like these give business owners the ability to customize their own loan options including the amount, term, and maximum preferred interest rate. Private loan lenders have the option to bid on the small business loan, and the best offer(s) will be accepted. The key to handling the risk factor is in the social aspect underlying this type of lending. The borrower’s payment habits are made public information on networking sites, available to one’s peers. This encourages the borrower to honor their obligation and can be damaging to their business image and brand if they do not.

Ilya Bodner

Small Business Owner

UNIFORM COMMERCIAL CODE

2009-08-05T10:47:00.000-04:00

The Uniform Commercial Code, or UCC, is an excellent tool for business owners to protect themselves with small business laws as both creditors and as debtors. Using UCC filings to your advantage can stretch your credit with both lenders and vendors. Likewise, as a creditor, if you keep active UCC filings on your biggest customers, you can protect your business against a client's nonpayment. For example, if you have a nonpaying customer and bring a lawsuit against them, you may wait months for a judgment; and you might not be adequately compensated even if the lawsuit rules in your favor. As a small business owner, you could have a UCC filing from the beginning and prove the debt.
UCC Filing Articles
· General Provisions
· Sales
· Leases
· Negotiable Instruments
· Bank Deposits
· Funds Transfers
· Letters of Credit
· Bulk Transfers and Bulk Sales
· Warehouse Receipts
· Investment Securities
· Secured Transactions A UCC-1 form is the best way you can insure your receivables. In a nutshell, a UCC places a lien against a particular business asset. As a debtor, negotiating a UCC or security agreement with a key vendor will probably get you a larger credit line. However, you should minimize that vendor's claim on your asset(s) on which the UCC is placed. It is important to negotiate very clear terms within each UCC filing or security agreement. Be very careful to make sure the credit line you are getting from the vendor is worth the asset(s) you are putting at risk. Remember: if you allow the lender to specify all of your business assets, you are giving that creditor the ability to seize everything you’ve got.
As a creditor, a UCC filing means that you have an additional advantage over other creditors for the purpose of collecting on the debt. However, you want to check that your customers do not already have a UCC on that particular asset. It's usually the Secretary of State that records the UCC, but in some states you may have to file with the county recorder. Laws vary slightly from state to state, so speak with your attorney before wrapping yourself up in a UCC filing as either the creditor or the borrower.

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Ilya BodnerSmall Business OwnerInitial Underwriting Group

ADVANTAGES OF LEASING EQUIPMENT, AUTOMOBILES & MACHINERY

2009-07-29T12:06:00.000-04:00

Leasing equipment can become very advantageous to a small business owner. The company which finances the equipment retains ownership, while the business owner has the right to use it in exchange for monthly payments. Each lease will have specific terms, but in general, your small business can trade the equipment if it fails, or even switch it for a better model. The lease payment can be used as a tax deduction for the small business, yet it can be reported on your balance sheet as a footnote. This denotes that it is not included in your total debt burden. A down payment is not usually required on a lease, so you can get the equipment your business needs without hindering your cash flow.
If you have no small business credit or even bad business credit, leases are easier to get than loans. You can exchange your leased equipment for state-of-the-art models. Furthermore, you can choose to purchase the equipment or lease new equipment once the lease expires.
Additionally, leasing equipment can be of immeasurable value to a small business without access to immediate operating funds, because it can be a valuable strategy in building strong business credit. Leasing vendors generally report payment activity more frequently than other types of lenders and treat credit reporting with more careful consideration due to the nature of the industry.
Each leasing agent will have particular standards for accepting your small business for a lease, but there are 4 main factors that are commonly reviewed:

ü The leasing agent will request at least 3 trade references or companies that you have dealt with via your business, in which you had payment obligations.
ü The leasing agent will review your small business bank account and note your average bank account balance. It is favorable if the amount of your monthly lease payments is reasonable compared with your average account balance.
ü Your corporate filings with the state—including articles of incorporation and financial statements—play a role in the outcome of acceptance for a lease.
ü Dun and Bradstreet’s Paydex score for your business can positively or negatively affect the results of your lease application.
http://www.24-7pressrelease.com/press-release/no-loans-when-you-need-them-96395.php
Ilya Bodner
Small Business Owner
Initial Underwriting Group

FACTORING

2009-07-24T09:56:00.001-04:00

Factoring is an effective business-to-business transaction that allows a small business to get the necessary loan when working capital is tied up in equipment, unpaid invoices or accounts receivable. Normally, a factoring loan is issued to clients who have a strong track record and/or a solid balance sheet. A typical factoring situation would be where the company granting the loan would lend a percentage of the value of the invoices, usually 70-80%, and then the debt would be satisfied in full when invoices are paid. The lender covers the cost of the raw materials for the manufacturer. Also, the lender assumes the risk of collection for payment and the manufacturing of goods. In some cases, the supplier of the raw materials will guarantee the delivery of the raw materials by acting as the third-party lender. This is a very common method of financing a small business. Another alternative, cash-flow factoring, is where an upfront fee would be charged—2% to 4% for 30-day invoices, and 3% to 6% for 60-day invoices.

Example. A clothing retailer needs a short-term inventory loan to purchase a shipment of spring wear for the upcoming season. With 60% of the clothing already sold online, a factoring loan would be issued to purchase all necessary inventories. All invoices would be factored, and the debt would be paid off in 30 to 60 days. This solution would allow for all orders to be filled in a timely manner and would ensure sustainability through the seasonal transition.

Some of the deciding factors for a typical bank loan would be the company’s cash flow, profitability, equity, and years in business. This can mean crisis for many smaller businesses or ones that have only been operating for a few years. In comparison, a factoring loan is granted on the basis of the strength of a company’s client base and/or its accounts receivable.

EQUIPMENT FINANCING
Another common reason for getting a small business loan is equipment financing. Equipment financing is borrowing to purchase machinery or equipment, while using that equipment as collateral. Think of it as you would buying a new car: you apply for financing for the car, usually without any collateral. Instead, the car itself is used as collateral. In that way, the loan is secured with a tangible item requiring less personal risk to you, because you don't have to use any of your belongings as collateral. However, it also means that the car can be repossessed should you fail to make payments.
The same is true of equipment financing. For instance, let's say that your small business is in need of a printing press. You apply for business financing for the machine, and the machine itself is used as collateral on the loan. Again, this means that you don't have to put anything you already have at risk (other than your business credit rating) and the loan is secured by the printing press itself.
Often, small business owners don’t realize that equipment financing is what they really need. Buying tools to do a job, or a service, is all that the business owner requires. Equipment financing loans are overall lower in interest rates and are preferred by StrongBusinessCredit above all other methods of financing. The sheer simplicity and the clean-cut approach allow quick turnaround and lower default rates. It’s often difficult to recognize just how useful this kind of loan can be.

CREDIT CARD ADVANCE FINANCING

2009-07-21T09:20:00.000-04:00

For many businesses owners, borrowing money during tough times can be difficult. There is a new alternative to conventional lending practices that is becoming extremely popular. Credit card advance loans are often called many different names, but essentially all do the same thing: provide loans based on the business’s average monthly credit card generated sales. The advancing company looks at the averages of 3-6 months of credit card generated sales and issues a loan based on averages and guidelines, typically a percentage of the highest month (i.e. 80% of January’s $15,000 sales done through credit cards). In return, the advancing company asks the small business to change their credit card processing terminal to the advancing company account. Thus all future credit card sales received are processed through a controlled terminal source.
There are no dangers running the transactions through the advancing companies terminal because all of the transactions are run the same, with uninterrupted service. The catch is that a percentage of the daily batch is held back by the advancing company as agreed. Usually the advancing companies hold 10-20% of the daily transactions. Thus, the payback varies each month based on the volume of the credit card sales.
To get approved for this form of financing is very simple, all you need is a verified credit card processing statement for a minimum of $5,000 for the past 6 months and a copy of bank statements to verify the deposits. In return, the small business owner gets financing quickly without the bureaucracy.
StrongBusinessCredit encourages you to beware of the extremely high cost of utilizing credit card advance loans. On an average for every $10,000 borrowed for 6 months the payback is $13,000 in total. On a month-to-month basis, this may be a great solution for a business owner since the payback is structured as new sales accrued, but if you consider the scenario in terms of interest rates, it adds up high and above many other options. Often, the tradeoff is the amount of time it takes to get the loan versus the cost of the money being borrowed. Broker commissions are usually 1-3% of the face value of the accounts receivable factored.

http://www.24-7pressrelease.com/press-release/no-loans-when-you-need-them-96395.php
Ilya Bodner
Small Business Owner
Initial Underwriting Group

CANADIAN ALTERNATIVE FINANCING

2009-07-16T10:26:00.000-04:00

Setting up shop in Canada comes with its own set of obstacles and benefits. Statistics Canada reports that 75% of job creation is through small businesses. Getting a conventional loan is one of the biggest challenges. Canada’s major banks have big profits yet are not supportive of small businesses. Venture capital is scarce.
Working Ventures, sponsored by the Canadian Federation of Labor, is the first national, labor-sponsored investment fund in the world. Its goal is long-term capital appreciation for shareholders, providing risk capital (between $250,000 and $10 million) to high-growth and medium-sized Canadian businesses. All Canadians who invest in Working Fund receive tax credits.
Therefore, in Canada, alternative funding is easier to obtain. From customers and suppliers to corporate lenders and government programs, customer financing has minimal paperwork.
Human Resources Development Canada offers self-employment assistance to employment insurance recipients who want to start their own businesses. There are even Community Loan Associations in each province.
Canadian Alternative Investment Co-operative in Toronto, Ontario, was formed in the early 1980’s by a number of religious communities pooling resources to make investments towards positive social change. CAIC offers loans, mortgages, and equity investments for community-based projects.

BRIDGE LOANS
Bridge loans are loans that are generally very short term, easier to acquire and with quick approval times. Their main advantage is speed and the ability to quickly close, save property from foreclosure or other situations which generally come on short notice and require fast money. Bridge loans are extremely convenient and useful when you absolutely can’t wait for a standard loan. Other names for bridge loans include "interim financing," "gap financing," and "swing loans."

“If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem.”
—Paul Getty

As the terms "interim financing" and "gap financing" imply, bridge loans are also used to fill in the gaps during cash-flow shortages or to finance businesses or business operations in the interim between larger loans. They also come in handy between business startup financing and more permanent financing. Bridge loans are often used on short notice for real estate purposes. The range can stretch from two weeks to three years, and the amount of the loan and interest rates are only really limited by the customer's credit. However, the amount of the loan generally won't be as high as long-term loans would be, and interest rates generally run several percentage points higher.

REAL ESTATE BACKED FINANCING

2009-07-13T12:05:00.000-04:00

Many private investors or alternative lenders will issue financing without any security or collateral, justified through risk mitigation of higher interest rates. However, collateral is not ruled out altogether in alternative financing. On the contrary, many alternative financing options include collateral to strengthen the deal and increase the loan amount. Real estate backed loans are among the greatest in volume and figures, having real estate to use as collateral has many advantages and its own set of limitations.
In order for property or for real estate to qualify for secured funding, there must be a substantial amount of equity available. Usually, private business lenders look for a minimum of 20-30% (70-80% Loan-to-Value or LTV) equity available in a property in order to qualify as collateral. If the borrower doesn’t live up to his end of the loan agreement, then the lender can take steps to acquire the property or use it as a bargaining tool to collect the outstanding payments. Among many benefits, real estate loans bare lower interest rates.
StrongBusinessCredit is witness to both good and bad real estate transactions. Most shortcomings are the result of poor presentation, unprepared financials and/or absence of an execution strategy (covered in the business plan). Our clients are asked to revisit projections and business planning. Some minor yet effective tools include a Power Point presentation, demographic study of the surrounding properties, brochure outlining the highlights and—a business plan.

NO GUARANTEES

2009-06-09T09:34:00.001-04:00

No Guarantees is one of the cornerstones of Free Market Economics. There are no guarantees. Business success happens through methodical, daily efforts. Healthy competition in all sectors ensures that even the greatest company on earth can be quickly humbled by the next small, innovative enterprise to come along. The same goes with business financing. Many business owners are in the hot pursuit of a guaranteed loan. As surprising as it may seem, almost everyone who owns a business has been in this situation: wanting a guarantee—in writing—assuring the loan. In essence, everyone wants to know that their efforts are going to be worth the battle. Understandable as this impulse is, it is simply unrealistic.
In most cases, the loan amount issued by the lender is based on careful analysis of the borrower company’s financials (often verified through tax returns and projections), sales figures, and overall stability. Refer back to the 5 C’s of Lending for a better understanding of lender criteria. Other tangents can alter the loan process, such as unexpected discoveries of credit problems. Many entrepreneurs have a series of small business startups in their pasts; each of these past ventures will be subject to scrutiny during the loan process.

THE RISK OF ALTERNATIVE FINANCING
To anyone who has been denied a bank loan for a small business, it may seem that the proverbial door of opportunity has closed. Many choose to continue looking for a solution. For most that are determined to start a small business, alternative business financing can be a feasible solution.
There are several types of alternative small business financing available to entrepreneurs, but it’s important to understand the risks involved. Some financing alternatives include factoring, commercial credit lines, advance-pay programs, purchase-order financing and supplier-guaranteed lines of credit. Even these widely accepted alternatives have risks including higher interest rates attached to private and commercial finance lines, and reduced realized profits—primarily with factoring loans and cash advances paid against Visa or MasterCard merchant account receipts.
As every situation is different, it is important to weigh these risks and how they can affect your small business’s bottom line. In the case of credit card advances, if the 7%-15% that the lender requires for each card swipe still nets your business the revenue it needs to remain profitable, then accepting a loan to get you through a rough spot could be a viable answer. Similarly, if receiving a loan for 70% - 80% of your accounts receivable balance will bring your books out of the red, then the ‘risk’ may not seem high.
There are 3 primary factors to consider when seeking alternative small business financing.
The first is the overall cost of the type of small business financing you are seeking to obtain. Beware of hidden fees and other costs that may not be disclosed by the lenders early in the application process. Fees typically appear during the closing, added to the total amount financed upfront.
The second factor to examine is how will affect your taxes. It’s often overlooked but a crucial part of consideration. If realized when it’s too late a business owner may be able to save on taxes through appropriate deductions and annual renewals.
Third and finally, be aware of how your small business credit score will be affected. Think about how much the small business loan will actually cost over time, with the other implications excluding the monetary expenses.

StrongBusinessCredit continues to deal with clients who have already taken out alternative financing and those who are ready to do so. What we find constant and true is that no matter at which point we assume the process, the business owner always has room for improvement. Through lack of time and know-how, the business owner always benefits from the assistance of a professional. In almost all cases, the situation comes down to one fundamental—planning. Revisit your business plan. Even if it seems completely redundant to you and exceptionally unnecessary, it’s absolutely crucial to keep revisiting the business plan and projections. Again and again.

http://www.24-7pressrelease.com/press-release/no-loans-when-you-need-them-96395.php
Ilya Bodner

Small Business Owner

Initial Underwriting Group

Social Entrepreneurship

2009-06-02T10:06:00.001-04:00

There is a movement across the globe today that says solutions to society's most pressing social issues cannot be left up to the government to determine. Social entrepreneurs are business owners that decide to take on the work of engaging with social problems implementing systems that offer broad-scale change.

Business People That Change the World
A social entrepreneur uses the principles of entrepreneurialism to develop a business venture that brings about social changes. The performance of a business is normally measured by profit and return on investment. Social entrepreneurs frequently do their work through non-profit organizations, but this does not preclude them from being profitable. These businesses go the further step of adding a social value component.
Fast Company Magazine publishes an annual list of the best social entrepreneurs that fit their definition: "using the disciplines of the corporate world to tackle daunting social problems." These are a few of the winners:
ACCION International. This is a nonprofit organization that provides business services and microenterprise loans to men and women in Asia, Africa, Latin America and the U.S.
City Year. This nonprofit organization takes young people from various backgrounds in the U.S. and South Africa and engages them in a year of full-time service and gives them leadership skills they can use to change the world.
College Summit. This is a national college access program in the U.S. that gives schools and districts the means to increase the college enrollment rate, especially from students with low-income backgrounds.
Mercy Corps. This organization takes places in the world afflicted by conflict, poverty and oppression and helps to transform them in peaceful, productive, prosperous communities.
Social entrepreneurs typically are completely committed to transforming their area of concern and it is the driving force behind their business. They have the skill to carry a vision to the ultimate in practical manifestation. They have they uncanny knack for enrolling masses of people in their strategy, which is decidedly user-friendly and easy to implement.
Are You a Social Entrepreneur?
If you are the kind of business person that can see solutions where others can only see problems and you have the creativity and drive to develop a venture that resolves the issues, you may be a social entrepreneur. You will be driven to affect social change while using your business skills to generate the revenue to make it happen. Like any other small business, with the right business plan and startup funding, you can become profitable while creating long-term change where it matter the most.

ALTERNATIVE ENRICHMENT

2009-06-01T09:21:00.001-04:00

Alternative financing may be the perfect solution for companies looking for additional means of securing adequate business funding. This form of financing may be used to carry a new venture through its early phases of development, restructure existing debts, or take the business to its next level. Conventional lenders such as banks and private lenders may shy away from riskier businesses and not focus on business credit. Furthermore, an established company may find itself needing additional capital, yet for various reasons is ineligible for a loan.
Alternative financing is provided through a non-conventional source. In this chapter, you’ll discover your options. Topics of discussion include factoring, commercial finance lines, advance pay programs, lease financing, purchase-order and supplier-guarantee financing, peer-to-peer business lending, strategic alliances and venture capital. The dangers of alternative loans are also discussed, as it is imperative to understand the consequences of your choices. As there are no guarantees in personal affairs, the same applies to business.

ALTERNATIVE FINANCING FROM A DIFFERENT PERSPECTIVE
When a business owner or new entrepreneur seeks financing, many decision factors remain constant across the various types of financing, including the 5 C’s of Lending. With alternative business financing the lender can be a private investor, equity firm, or angel investor. Required additional documentation on the business is inevitable. Be prepared to include a thorough business plan for newer businesses, prior tax returns, and projected financials for multiple years of operation.
A personal loan, or personally guaranteed loan, is mostly driven by the business owner’s personal credit. On the other hand, alternative business financing is valuated by the strength of the business, or business model. Many times, the creditworthiness of the business is determined by a Paydex Score through Dun & Bradstreet or similar scoring by other business credit reporting agencies. Like any other loan process, when the requirements are met to the lender’s satisfaction, the business is then funded. Instating higher interest rates justifies the alternative lender’s risk, a process important to understand about these lenders.

Diamonds Are A Cereal Marketer's Best Friend

2009-05-18T10:45:00.000-04:00

When C.W. Post started a small business in 1895 with his first batch of "Postum" (breakfast cereal) he probably did not foresee his company getting into the diamond business. The cereal company has "followed a path of delicious innovation, creating cereals that have defined the breakfast experience for generations of families" and now it has literally put a twist on its "Shreddies" product by offering the cereal in the shape of diamonds rather than squares.

Something New from Something Old
It's a playful, yet brilliant marketing scheme that is reaping the cereal a lot of consumer attention. The breakfast cereal, produced by Post Cereals and General Mills has been a favorite for years in the U.K., Ireland, New Zealand and Canada. It looks like small squares made of malted, interwoven whole grain wheat. Believe it or not the name of the cereal is the slang term used to describe men's undershorts. (This is a not a piece of trivia used in marketing campaigns for the cereal.) The last time it got this much attention was during the "Wayne Gretzky" Shreddies cereal box era.
If you were thinking Post didn't actually do anything different to the humble square other than tip it on its corner to produce the diamond shape you are absolutely correct. The point is that the company has offered a new perspective on a product that has been around for years and it's making an impact on the public awareness of the food. It's all about putting a new spin on an old thing.
Post has come up with a promotional campaign that is getting consumers involved by voting on either the square or the diamond version of the Shreddie. A cereal box design is offered for each version while the official Diamond Shreddies website allows you to vote for your pick and download printable posters to put up around the office promoting the options. A ticker tape constantly scrolls across the face of the website revealing the latest voter news such as "Square predicted to gain support in Northern B.C." and "Diamond predicted to lead in the West."
Something New to Promote Your Products
Excitement over the new shape, which isn't really a new shape at all, has increased sales by 18%. Shreddies have been around for about 70 years. If you are struggling with your sales for a product that is tried and true, maybe it's time to come up with a new slant on promoting your product. The large corporations are doing it, so there's a good chance it will work for your small business.
Initial Underwriting Group *Breaking Down the Barriers to Small Business Financing*www.initialunderwriting.org www.strongbusinesscredit.com

CREDIT BASED VS NON-CREDIT BASED FINANCING

2009-05-12T14:22:00.000-04:00

When it comes to non-credit based small business financing, the benefits are evident. There is a very good chance you will be able to take advantage of great interest rates as long as your established business credit is favorable. Non-credit based small business financing comes in many different forms and is an excellent way to begin building your relationships with vendors. Many vendors will extend credit without a credit check if you have your Tax-ID number and a few other solidifying factors. In turn, when you make your payments to these particular vendors, they’ll report favorably to the credit bureaus—and you’ll be well on your way to building strong business credit. This can be true for the reverse situation as well. If you are unable to make your payments on time, these vendors may report late or slow payments to the credit bureaus and damage your small business credit before you ever get it off the ground. Be careful with non-credit based financing, because it’s not a loophole for lending terms. Many businesses have come to StrongBusinessCredit because they have been crippled through mischievous actions taken by owners on non-credit based payments.

GETTING RID OF BUSINESS DEBT
To ensure that your business continues to be successful and profitable, it may be advantageous to get rid of short term debt. Below are some helpful hints for staying most productive:
ü Focus on one debt at a time. If you can afford to put more money into one debt than any others without incurring late fees or bad marks on your business credit, it will be easier to rid the business of debt.
ü Avoid new debt. Taking out a new loan, for example, is counterproductive to paying off business debts—it only creates more.
ü Increase your Business Profit Margin. Higher profits should first be spent on reducing debt. If higher profits are maintained, they will soon end up in the owner’s pockets.
ü Strategize on YOUR plan. As discussed throughout this book, thorough planning is essential. Paying down a debt is no different. Have a plan that works for you, and follow your own directions relentlessly.

The bottom line: these tips are merely guideposts; your success relies on your business plan. Always plan for the worst! StrongBusinessCredit suggests referring back to the chapter 1, dealing with business plans and proper projection planning. Within your original business plan, the bad times you may encounter should be predicted and mitigated. Without such precautions, your business is vulnerable to failure.

UNDERSTANDING FINANCING

2009-05-06T15:46:00.001-04:00

New small business leaders and managers have to develop at least basic skills in financial management. Expecting others in the organization to manage small business finances is clearly asking for trouble. Basic skills in financial management start with the critical areas of cash management and bookkeeping, which should be done according to certain financial controls to ensure integrity in the bookkeeping process. Small business owners should learn as soon as possible how to generate small business financial statements and how to analyze those statements to really understand the financial condition of the business. Financial analysis shows the "reality" of the situation. Financial management is one of the most important practices in business. This topic will help you understand basic practices in small business financial management, and build the basic systems and practices needed to help your small business thrive. StrongBusinessCredit is a huge fan of professional mentoring. If you are inexperienced in small business financial management, then you should acquire an accountant to help you set up your bookkeeping system, generate financial statements and do some basic financial analysis. But don’t count on an accountant to completely take over your responsibility for financial management. The accountant can help you set up a bookkeeping system, generate small business financial statements and analyze them, but you must understand financial data to the extent that you can understand the effects of your management decisions, the current condition of your small business and how decisions will affect the financial condition of your small business in the future.

Starbucks Used To Be A Small Business

2009-04-28T10:19:00.000-04:00

When our forefathers arrived on this continent they brought with them a vision of a new world with thriving commerce and raucous marketplaces. No matter what the media may be pushing on us about the economy, the vision of our predecessors is just as alive today as it was a couple centuries ago. If you don't believe it, then kick yourself next time you're standing in line at Starbuck's waiting to pay $4 for a cup of coffee.

Creating a Market with a Cup of Coffee

Howard Shultz was a poor Brooklyn kid struggling to make his way through college, and because he believed he could create a need for caramel macchiatos and chai lattes, he is now the head of a 30-something billion dollar multinational string of coffee shops. After interviewing Shultz, 60 Minutes reporter, Scott Pelley decided the entrepreneur is "creating his own subculture and intends to take the whole world along."
Shultz first became interested in Starbuck's when as a plastic salesman he was intrigued by the volume of plastic drip-brewing thermoses it was buying from the plastics manufacturer that employed him. Shortly after coming on board with Starbuck's he found himself in a love affair with the pulsating coffee culture of Italy. He suddenly was struck with the idea that U.S. patrons would be receptive to elegant gathering places with a spirit of community exchange, all the while sipping on connoisseur coffees to their heart's content.
In 1987 when Starbuck's when up for sale, his inspiration swayed investors to fork over $3.8 billion and he eventually exceeded his goal of 125 outlets in 5 years with 165 stores by 1992. By 2008 there were approximately 11,000 stores in the U.S., with another 4,000 - 5,000 in foreign countries. With fiscal 2009 Q1 net earnings down to $63.3 million, the hot beverage mogul will be making some changes to streamline the operation and increase profitability.
Shultz is a firm believer that the success his empire is based on the philosophy behind the operations - that he created a place for humanity to meet and make human connections. It's an alternative environment to work and home. He says the reason Starbuck's stores are opened across the street from each other is to cut back on the lines where something like 40 million people a week wait to imbibe 300 million plus gallons of brew each day..
Find Your Niche and Make It Happen

Pretty much everyone in this country comes from pioneering stock or from people that knew how to gather the right resources to make something happen. Find your "niche" and build a company around it that offers an alternative solution for a need that's waiting to be filled. The resources, technology, information, financing and business mentoring are all available to support your efforts. This is one of the greatest times in history to launch a business.

DEBT-TO-INCOME RATIO

2009-04-24T10:55:00.001-04:00

A small business’s debt-to-income ratio (DIR) is most easily explained as the ratio of a borrower's total debt as a portion of their total gross income. This ratio, more commonly expressed as DIR or simply “debt ratio,” measures how much you can borrow based on your expenses in relation to your total monthly income. Lenders’ experience shows that you may borrow from 33% to 40% of your monthly income, on average. To find your small business’s DIR, simply divide the total of monthly debt payments to gross monthly income. Typically, the lower your ratio, the better handle you have on debt.
Whether you're preparing to apply for small business credit based financing or simply need to know where your small business stands financially, regularly monitoring your DIR is one step towards understanding your financial position. It’s a good idea to recalculate your DIR at least once a year, or before any important turning points in the business.

THE REAL RISK OF BORROWING
Collateralizing your car…selling your most valued items…second mortgaging your already overvalued home…. The list goes on and on. Recently, StrongBusinessCredit heard from a musician who sold his equipment to raise more capital for business advertising. What’s not right with that picture? Desperate times for business funding leads to outrageous actions.
Perhaps your situation is not as horrific as selling the very equipment that you may rely on to run your business, but tying in any personal items to get through a rough spot is a definite move in the wrong direction. Unsecured personal loans are not tied to any asset; another horror story we hear often. With this type of loan, you are typically going to pay an extremely high interest rate, have a less-than desirable line of credit, and personally guarantee the outcome. Unsecured lines of credit are secured by the most important factor—you! Essentially, by taking out an unsecured line of credit, the business owner is more responsible for the debt than any other lending option.

WIRE TRANSFER & WESTERN UNION FRAUD

2009-04-20T11:27:00.001-04:00

Founded in 1851 as a telegram company, Western Union is one of the oldest businesses in operation today, and one of the leaders in person-to-person money transfers. Western Union is a legitimate company, with a legitimate service that is almost entirely utilized by legitimate people and businesses. There is no way you can lose money through Western Union, so long as the person you are sending money to is a known, trusted individual. However, certain people have been exploiting Western Union's services to trick unknowing victims in to wiring money for goods and services that are poorly rendered, if received at all.
There are many different scams using Western Union as a medium to get money from the victim to the scammer. The Better Business Bureau's Tom Joyce recently published a report about a relatively old scam that has been seeing more and more activity: The Lottery Scam. In this setup, the victim is informed that they have won some sort of a prize. For example, lottery winnings. A check may come with these letters for a large sum of money. The receiver will typically be asked to send back a relatively small portion of it via Western Union wire transfer; $300 from a $5000 check, for example. However, the check is a forgery.
The most important thing to remember is never, under any circumstances, send money via Western Union to companies that you do not know. So long as you exercise caution, awareness and skepticism when dealing with anyone asking for a Western Union or any other person-to-person wire transfer of money, you will not fall victim to these scams.

PERSONAL VS. BUSINESS CREDIT

2009-04-16T11:02:00.001-04:00

Just like you a company has a credit score. Your score is your personal credit score why the company acquires a business credit score. There is no need to intermingle the two, and with proper development a business owner will have a completely separate score individual from the business. A business credit score is tracked through the payment history of the business. This is not to be confused with the bills that the owner pays out as “business expenses”. (Cell phone used for work signed under personal social security is a great example of what is NOT considered to be applicable towards business credit scoring).
A business credit score is just as equally important to protect as any other business asset. It takes patience and detail to be able to completely separate the personal expenses from the bills, especially in a small one or two person company. It is recommended to start with utility bills which are for the most part a fixed expense for the business. If this step is already covered go on to eliminating the use of any revolving accounts which carry the owners’ social security on file.
The difference between personal credit and business credit should be treated just like it sounds. Personal credit should be used for your car, house, children’s college, and others. Business credit needs to focus on serious business purchases and expenses. Without the separation what happens when the business fails and personal credit is involved? Down goes the captain of the ship.
Regardless of an owner’s personal credit score, corporations acquire their own credit rating, and build a separate credit history. Credit ratings assess credit worthiness of individuals or corporations based on financial history, current assets and liabilities. They reflect the ability to pay back a loan and have been used for insurance premiums and sometimes pre-employment verification. The higher the risk, the higher the interest rates will be.

NO LOANS WHEN YOU NEED THEM

2009-04-13T08:59:00.001-04:00

Have you heard the saying "A bank is a place where they lend you an umbrella in fair weather and ask for it back when it begins to rain?”
Consider the ideal scenario for the enthusiastic entrepreneur who wants to obtain a start-up loan and believes banks are there to loan money when it's needed. They have the impression they can explain their reasons for doing the business, show a financial projection of how much money they expect to make, along with how much they need. The banker then loans them money, based on those projections. The new business assets and projections will be the collateral for the loan. What is the problem with this scenario?
First of all, loans must be completely collateralized by personal assets; i.e. cash, stocks, real estate equity and any other semi-liquid assets that can be easily tapped to repay the loan if the business defaults. Bank loans are simply not feasible for most businesses that lack collateral. Even worse, if money is required simply to finance salaries, rent and marketing, bank loans aren’t viable.

PERSONAL VS. BUSINESS CREDIT
Just like you a company has a credit score. Your score is your personal credit score why the company acquires a business credit score. There is no need to intermingle the two, and with proper development a business owner will have a completely separate score individual from the business. A business credit score is tracked through the payment history of the business. This is not to be confused with the bills that the owner pays out as “business expenses”. (Cell phone used for work signed under personal social security is a great example of what is NOT considered to be applicable towards business credit scoring).
A business credit score is just as equally important to protect as any other business asset. It takes patience and detail to be able to completely separate the personal expenses from the bills, especially in a small one or two person company. It is recommended to start with utility bills which are for the most part a fixed expense for the business. If this step is already covered go on to eliminating the use of any revolving accounts which carry the owners’ social security on file.
The difference between personal credit and business credit should be treated just like it sounds. Personal credit should be used for your car, house, children’s college, and others. Business credit needs to focus on serious business purchases and expenses. Without the separation what happens when the business fails and personal credit is involved? Down goes the captain of the ship.
Regardless of an owner’s personal credit score, corporations acquire their own credit rating, and build a separate credit history. Credit ratings assess credit worthiness of individuals or corporations based on financial history, current assets and liabilities. They reflect the ability to pay back a loan and have been used for insurance premiums and sometimes pre-employment verification. The higher the risk, the higher the interest rates will be.

THE SMALL BUSINESS ADMINISTRATION

2009-04-08T10:54:00.000-04:00

The Small Business Administration (SBA) is an independent agency of the federal government designed to counsel, assist and protect the interests of small businesses. They offer a wide range of services, from assisting in the direction of your small business plan to linking you with lenders for small business loans. Through an extensive network of field offices and partnerships with public and private organizations, the SBA delivers their services to business owners throughout the United States, Puerto Rico, U.S. Virgin Islands and Guam. Most notably, they provide a few different types of loans for small businesses which are unable to secure financing on reasonable terms from traditional institutions, such as banks. They do not directly lend their own funds to small businesses, but rather, operate through a series of lenders that are guaranteed by the SBA.

The SBA puts forth many different loan variations, each with its own pros and cons. Some of the cons of SBA loans include potentially high interest rates on smaller loans, though actual rates will depend on the lender. Generally, the lower the sum of the loan, the higher the interest rate will be. Another pitfall is the minimal loan amounts. To most business owners the options are limited to several hundred thousand (though exceptions do exist) while the largest SBA loan can go up to $2,000,000. Though rarely does the SBA extend this amount. Finally, SBA loans can be very difficult to acquire. Hefty bureaucracy and paperwork requirements are both complex and time consuming.
Sometimes, advantages of SBA loans make it worth the wait. A definite plus is that they are usually made available to most traditional industries. Also, although the interest rates have a high ceiling, it is rarely reached. Other pro-business terms include that the SBA not allow banks to charge commitment or prepayment fees on loans under 15 years.

All in all, small business loan amounts and interest rates are a fluid entity and tend to change frequently depending on where the small business loan is established and on the state of the economy. These changes can be both large and small, and depending on whether you have a fixed or variable interest rate, can benefit or harm your finances.
StrongBusinessCredit motivates small business owners, new and old, to explore alternative financing through corporate credit-building models; however, this does not exclude the use of SBA and bank offered loans. Each business situation is unique and we encounter new combinations of circumstances pointing in different directions every single day. In some instances, an SBA loan may become more lucrative for a business model. We often come across counterexamples to our own principals and teachings; the beauty of business is that it is an everyday learning experience—and should be for you, too.

Start Now

2009-04-02T09:17:00.000-04:00

Don’t wait around. Start now. Lack of inertia is the #1 killer of great ideas. According to a survey performed by Yahoo! Small Business, 66% of Americans over the age of 18 have considered starting a business, but many never take the leap.

“There's a way to do it better - find it.” – Thomas Edison.

If you have a great idea for a business, act on it! Don't put off writing a business plan, or at the very least, putting your ideas down on paper. Business writer Tim Berry offers valuable advice on the topic: “Don't wait until you have enough time, don't wait until you have the right people, and definitely don't wait until there's an urgent reason. Instead, just do it now.”
Writing your ideas down is the first step to actually getting your business up and running. We suggest that you take time throughout this book to jot down ideas as they occur and spend time to answer the questions we pose, but don’t be quick to answer! Make sure the answers are thoughtful and truthful to your situation. Because every business is unique, many of these questions are ones only you can answer.

BE PREPARED
Ask yourself why you want to own your own business. The reasons may vary from wanting to be your own boss; to wanting freedom from your present job; to wanting to improve your standard of living; to wanting the option to do what you want to do when you want to do it—and of course, to wanting to create a product or service for which you feel there is a considerable demand. There are also costs of starting and running your own business far beyond the obvious. Spend the time to prepare yourself, your finances, and your future business.
Once you understand how to start the engine of your business, you’ll realize that some of the negative aspects of running it will include working 12-16 hours a day, dealing with difficult employees and vendors, collecting on past-due invoices, and a whole slew of other time-consuming issues. At StrongBusinessCredit, we emphasize the word “will” because you will without a doubt find yourself dealing with many of these challenges.
Ask yourself if you have the physical stamina to handle the workload and schedule, along with the emotional strength to withstand the stress. It may also be necessary for you to temporarily lower your standard of living until your business is firmly established and while you are depending on a small business loan for your cash flow. This is just one of many sacrifices you will likely be asked to make.

AVOIDING LOAN SCAMS

2009-03-31T10:29:00.001-04:00

There are a handful of companies across the U.S. and in Canada that advertise to offer a business credit building package or are “verified lenders.” Some are legitimate. Some are not. In part, the internet has created a breeding ground for scammers to collect money from people looking to start new businesses, then offer nothing, or very little in exchange. These scams involve collecting an upfront fee in order to get the business owner the funding or credit service that was advertised.
Loan scams most commonly require an upfront fee to pay for alleged loan insurance required. Often, this is a scam tactic. In some cases, once the consumer pays the fee, the “company” is never heard from again. In other instances, empty promises are made and the ‘company’ drags the process on and eventually stops corresponding with the client.

PREPARING FOR STRONG BUSINESS CREDIT
Anyone who has worked in construction or around it will know that prep work can be deceiving. At first, it seems that prep work is the easiest and the fastest stage, for the most difficult tasks are yet to come. On the contrary, prep work is the most crucial part in assuring accuracy and results in the near future. Similar to construction, prep work for stronger business credit is what can take the greatest amount of time. It is beneficial for a small business owner to have access to the information necessary for building a business credit score, or to work in association with trusted resources with experience in the field of business credit.
If you have ever applied for anything from a small business loan to a business credit card for your business, then you already know that without good business credit, the prospects are bleak. Take the time to build your business credit and do it the right way—from the ground up. The long-term rewards are exponential.

Shelf Corporations – What are they and how do they benefit?

2009-03-23T13:40:00.001-04:00

Common Names for Shelf Corporations:
-Aged Companies
-Shell Corps

Definitions:

Shelf Corporation – literally a company (LLC, Inc, partnership) that was filed with the state a long time ago and sat on a “shelf” ever since. The company has been doing nothing, getting dusty on a “shelf” while the years go by.

Aged Company – aged refers to it being incorporated a long time ago. Sometimes an aged company is a “shelf”, other times it was actually used to conduct business. Unlike a true “shelf corporation”, an aged company had financials running through it in the past, nothing recent.

Shell Corps – holding company for other business endeavors; a “shell” to cover present and past activities under one roof. Typically a “shell” is filed in a consumer friendly state (Nevada, Wyoming) and incorporated with undisclosed/private information. Shell Corps are not aged, but a combination of both has become popular (i.e. buy an aged shell corp)

Pro’s Cons

Shelf Corporations are good to buy because you can show that the company has been in business for more than 2 years. Often lenders, and business credibility is gained after showing that the business has been established for more than a year. 20, 30 year old shelf corps are also bought to show “have been doing business for 30 years!” – typically the very old ones are used for marketing, not any type of lending gain.
The downside to shelf corporations is that they are very transparent. Everyone knows that you really haven’t been in business for that long. Often the registered person’s name doesn’t match any key figure of the buyer. No financials exist for the company in the “shelving” period and that losses credibility.

Aged Companies, are a good idea because they really existed and operated in the past. An aged company can be a shelf corp if only during its birth there were financials, and since then it was left on the shelf to get old. Otherwise, aged companies have financial proof of existence and favorable to banks and show the strength.
The bad side to aged companies is that they are very expensive, and come with a lot of liability. Aged companies were used to conduct business in the past, and if anything bad happened the new owner is responsible for the past.

Shell corps are a great idea to keep the owners information private, and can blanket a lot of different activities under one roof. It is also great because in a different state there are tax benefits and as long as done right, can be very advantageous savings reasons.
Shell companies are very hard to maintain because it only works if Everything is done by the book. It doesn’t make sense to invest in a shell company and not buy a shelf or aged, but combining it all can be very costly.

The Test of a Small Business Startup

2009-03-19T16:24:00.001-04:00

The first couple years of a startup business is when you will be tested the most. You spent months pulling all the pieces together and finally got your door open. You popped the champagne cork when you made your first sale and now you're down the road a few miles getting slammed with all the little surprises you had not considered when you first put your plan together.

Are You Ready To Take On The Challenges?

Now is when you are at a turning point - are you a real entrepreneur with the intestinal fortitude to make it over the hurdles or will you tuck tail and run for cover behind the safety of a 9 to 5 job again? When your business bank account starts to run low is when you will be forced to stretch the most. If you are truly an entrepreneur you will welcome every challenge as an opportunity to hone your skills and get better at running your business.
When your cash flow starts to get tight, consider the following tips - it might be the difference between making it or not:
· Are you selling the right product? You may need to survey your target market and previous customers again and find out if what you are selling is really what they want. It could be that a minor adjustment will make all the difference in your sales.
· Stop spending money. Call for an immediate halt on all spending and only pay for the necessities. Absolutely no large expenditures at this time.
· Promote like crazy. Review all the promotional campaigns you have done in the past that were successful and do them again. Use the ones that gave you the best results.
· Cut back on your payroll. Sorry, but if you are spending more money on paying your staff than they are producing it's time to outsource for the services you need and look for ways to automate certain operational functions.
· Make your business credit payments. Do not ever miss a credit card payment, a line of credit payment or a business loan payment. Your business credit score is more valuable than gold.
· Obtain payments up front. If you have been offering some form of term payment from you customers, stop doing it. If at all possible get the payment in your hands before you give them the service.
Stop giving in to the words "not now". You created a product that will improve the quality of a person's life or business. They need your product so don't be a pushover when they tell you why they can't buy it now.

Be the Example for Your Team

You will also need to look at where you can tighten your own belt. Public transportation may be the answer to paying too much money for parking for a while. It could be time to pitch in and start doing sales calls yourself. This will inspire your sales team. You may need to wait a few months before you can buy the new dream gadget you really want. Brown bag it and save your restaurant luncheons for closing a sale with a prospect. Talk your business up everywhere you go. Don't quit. Go for the wall with everything you've got.

HSBC Lending Update

2009-03-10T09:48:00.001-04:00

Every time we turn on the TV, all we see are gloomy things about our economy. Debt is out of control and no one is paying it back!
Lesson learned - people can't be trusted to manage their finances and debts. Banks learned that the hard way. All credit cards and other forms of consumer finance businesses are experiencing extraordinary losses - peole are in debt, and they can't pay it back.
Small business owners are concerned because they think that they are unable to get credit at all. That is partially a myth, a hysteria embedded into the chaotic daily news. In fact, even giants like HSBC realize that business lending is strong and necessary for all future profits.
HSBC is a major player for Initial Underwriting Group and its customers. More than 50% of financing is related to the London based bank. "In light of this, we have taken the difficult decision that, with the exception of credit cards, we will write no further consumer finance business through the HFC and Beneficial brands in the U.S. and close the majority of the network."(1) An official bank statement said on March 4th.
All small business owners are reminded to read the fine print, and avoid listening to the doomsday sayers on CNN and FOX News. Sure the lending institutions are more careful about their investments, but consumer finance news should not be mixed with business news.
"Brendan McDonagh, the chief executive of HSBC's North American operations, said it would continue to expand" its U.S. banking business, even though the finance company offices would close.(2)

1. http://www.thestreet.com/story/10466944/1/hsbc-trims-us-lending-as-net-plunges.html?cm_ven=GOOGLEFI
2. http://www.iht.com/articles/2009/03/05/business/norris06.php

Do-It-Yourself Small Business Loans

2009-03-06T15:23:00.001-05:00

There is a tendency for people to think when bad news about the economy strikes the worst thing they could do is attempt to start a small business. This could not be farther from the truth. There is no such thing as a bad time to start a business, provided you go about it the right way. Check the news again. When large corporations are failing and looking for bailouts, small businesses keep on ticking. A small business owner that keeps a tight rein on operations and serves the public with products or services valuable enough to be taken in exchange for money will survive a bumpy ride.

Start Looking for a Lender Right Away

Any "grey beard" entrepreneur that has made it through the economic swings that seem to part of a natural cycle will tell you not to invest every personal cent you have in your business when starting out. You need to protect your personal assets and savings to take care of yourself and your family while you are building your business income. Nobody will stop you from investing some of your own money, but include acquiring a business loan as part of your start up strategy. There are some steps you will need to take to prepare for applying for a loan, and if you have already been rejected by the bank for a loan you have no choice but to pursuit another avenue.

Do your market research and be certain the product/service you are about to put on the market is viable. Survey everything you are planning to do and make the adjustments as necessary. Give the market what it is willing to pay to have. Make a very detailed business plan.

Choose the correct corporate structure for you business and register with the state. Get all your paper work in order and establish a proper bookkeeping system right off the bat. Find out exactly what your responsibilities are for paying taxes and retaining employees. Get your Employer Identification Number (EIN).

Register with Dun & Bradstreet (D&B) for the purpose of getting a Paydex score. Look for all the ways you can get accounts under your business name and out of your personal name. Set up vendor reporting with D&B. Eventually you will need to get your hands on a list of businesses that extend lines of credit to small business owners and use those to start building your business credit score. You can get as much as $35k through business credit. Get a credit card in your business name and use it wisely.

Money Available Regardless of the Economic Times

If you were expecting a magic formula to get an instant business loan, this is it. But it will take a little time. Depending on your diligence it could be a few weeks to a few months. No traditional banker or alternative lender will give you a loan with a decent interest rate without you doing these steps. You must build up your credit profile and business credit score first. It is the only way you can get money for your business that is not based on your personal credit and will not put your personal assets at risk. In the meantime you can use your business lines of credit from the list mentioned earlier to help get your business started.

Sincerely,

Ilya Bodner
Small Business Owner
Initial Underwriting Group

THE RISK OF ALTERNATIVE FINANCING

2009-03-04T14:18:00.001-05:00

To anyone who has been denied a bank loan for a small business, it may seem that the proverbial door of opportunity has closed. Many choose to continue looking for a solution. For most that are determined to start a small business, alternative business financing can be a feasible solution.

There are several types of alternative small business financing available to entrepreneurs, but it’s important to understand the risks involved. Some financing alternatives include factoring, commercial credit lines, advance-pay programs, purchase-order financing and supplier-guaranteed lines of credit. Even these widely accepted alternatives have risks including higher interest rates attached to private and commercial finance lines, and reduced realized profits—primarily with factoring loans and cash advances paid against Visa or MasterCard merchant account receipts.

As every situation is different, it is important to weigh these risks and how they can affect your small business’s bottom line. In the case of credit card advances, if the 7%-15% that the lender requires for each card swipe still nets your business the revenue it needs to remain profitable, then accepting a loan to get you through a rough spot could be a viable answer. Similarly, if receiving a loan for 70% - 80% of your accounts receivable balance will bring your books out of the red, then the ‘risk’ may not seem high.

There are 3 primary factors to consider when seeking alternative small business financing.

- The first is the overall cost of the type of small business financing you are seeking to obtain. Beware of hidden fees and other costs that may not be disclosed by the lenders early in the application process. Fees typically appear during the closing, added to the total amount financed upfront.
- The second factor to examine is how will affect your taxes. It’s often overlooked but a crucial part of consideration. If realized when it’s too late a business owner may be able to save on taxes through appropriate deductions and annual renewals.
- Third and finally, be aware of how your small business credit score will be affected. Think about how much the small business loan will actually cost over time, with the other implications excluding the monetary expenses.

Sincerely,

Ilya Bodner
small Business Owner
Initial Underwriting Group

Metal Suitcase with Lots of Cash

2009-02-25T15:58:00.001-05:00

Oddly enough when I talk to small business owners they all expect the bailout to be in a form of a metal suitcase full of cash dropped on their doorstep.

Unfortunately, Obama is not a money tree - you can't just shake him and expect suitcases stuffed with cash to fly out. We must earn it; get in line, everyone deserves it right now.

The notion of federal officials coming in with newly printed money is something that a lot of small business owners dream about. I doubt that will happen.

Yes, the President delivered a great speech last night. Yes, it was very inspiring. But No, you still won't have a wad of cash in a metal suitcase at your doorstep.

Small business owners need to be reminded that the going will get tough, but the strong will survive. So keep your head up and be logical. The tough economy can’t keep all the business owners down, step above the rest and keep on pushing through the tough time.

My favorite quote comes from a book a lot of us know about. Think and Grow Rich by Napoleon Hill. In the first few chapters he explains a scene that happens right after the Great Chicago Fire. All small business owners gather around and decide they need to get out of Chicago; it would be too costly to rebuild. But one man, quotes Mr. Hill, decides to stay and put up a store. Decades later Marshall Fields stands strong.

Sincerely,

Ilya Bodner
Small Business Owner
Initial Underwriting Group

Start Now

2009-02-23T13:12:00.001-05:00

Don't wait around. Start now. Lack of inertia is the #1 killer of great ideas. According to a survey performed by Yahoo! Small Business, 66% of Americans over the age of 18 have considered starting a business, but many never take the leap.

"There's a way to do it better - find it." – Thomas Edison.

If you have a great idea for a business, act on it! Don't put off writing a business plan, or at the very least, putting your ideas down on paper. Business writer Tim Berry offers valuable advice on the topic: "Don't wait until you have enough time, don't wait until you have the right people, and definitely don't wait until there's an urgent reason. Instead, just do it now."
Writing your ideas down is the first step to actually getting your business up and running. We suggest that you take time throughout this article to jot down ideas as they occur and spend time answering the questions we pose, but don't be quick to answer! Make sure the answers are thoughtful and truthful to your situation. Because every business is unique, many of these questions are ones only you can answer.

BE PREPARED
Ask yourself why you want to own your own business. The reasons may be: wanting to be your own boss, freedom from your present job, improved standard of living, having the option to do what you want to do when you want to do it, or most importantly wanting to create a product or service for which you feel there is a considerable demand. There are also costs of starting and running your own business far beyond the obvious. Spend the time necessary to prepare yourself, your finances, and your future business.
Once you understand how to start the engine of your business, you will realize that some of the negative aspects of running it will include working 12-16 hours a day, dealing with difficult employees and vendors, collecting on past-due invoices, and a whole slew of other time-consuming issues. At StrongBusinessCredit, we emphasize the word "will" because you will without a doubt find yourself dealing with many of these challenges.
Ask yourself if you have the physical stamina to handle the workload and schedule, along with the emotional strength to withstand the stress. It may also be necessary for you to temporarily lower your standard of living until your business is firmly established and while you are depending on a small business loan for your cash flow. This is just one of many sacrifices you will make.

Wealthy Business Owners Use OPM

2009-02-19T15:22:00.001-05:00

Statistics show that the majority of affluent business owners and successful entrepreneurs in the U.S. started out by using other people's money, generally in the form of a business loan. Despite the economic news there are prolific numbers of private lenders and venture capitalists that will lend you money for business.

The OPM principle in business is a commonly accepted practice and is viewed as a savvy technique for starting or expanding a business, investing in high-yield programs or asset-producing affairs or income generating real estate. It allows you to have money to make more money for your business. As long as you are operating as a corporation the debt is assigned to your business and debtors can make no personal claims against you.

Any smart business owner will separate all their business activities from their personal assets by incorporating with the state. Following this is registering with Dun & Bradstreet to obtain a business credit score that has no relationship to their personal credit.

The disadvantage of using OPM is that if your business initiative fails, you end up with a huge strain your corporate coffers repaying the loan. You will want to put your deals together wisely and have precise control over your costs and the daily tactics that amount to the income you expect. For example, leveraging the foreclosure market to buy properties below market value is an excellent investment provided you are educated in the reality of doing real estate deals and handling the properties once you own them.

Using OPM is Win-Win

Lenders are like investors. They invest their money in your business for a period of time and you give them more in return in the form of interest than the amount you borrowed. In the well-planned scenario, you leverage the loan to create profit for your business as well as a profit for the lender. It's a winning situation for everyone, and you didn't have to come up with all the cash up front. You can turn an idea into a profitable venture without using up everything in your bank account.

Sincerely,Ilya BodnerSmall Business OwnerInitial Underwriting Group

Sex, Drugs, and Alcohol

2009-02-18T14:49:00.001-05:00

Think about it….Dating websites are packed. Professional matchmakers are showing profits greater than landowners. Michael Phelps is getting more publicity with paraphernalia around his neck than 8 gold metals. Local corner liquor stores are packed every night. The economy may be struggling, but these industries continue to flourish.

Sure, not all of us are in such lucrative businesses but we still have customers and show potential for future earnings. Lending institutions realize this. Banks make up less than 1/3 of the US lending market, the rest of the investments are not on hold – you are!

Consumers are still spending. Good employees still have their jobs, and the bailout is getting signed. What else do we need to get things moving again? We need to invest more cash flow into the economy, immediately.

Everyone that is reading this email - please - do your part and turn off the TV. Be careful, but spend like you have been. If you are a business owner, start moving and shaking again. Get business financing if you need it! Hiding in a cave, afraid of spending and getting credit, is only going to isolate us even further. Business credit lenders are fully aware of the risks they take in lending money to small business start ups. You can use this to your advantage – they will insist on seeing a viable business plan before they fork over the cash you want and with a well-constructed plan you are much more likely to succeed.

Sincerely,

Ilya Bodner
Small Business Owner
Initial Underwriting Group

Taxes and Business Credit

2009-02-13T10:17:00.001-05:00

Posted February 3rd, 2009 by admin There are 4 general types of small business taxes: income tax, self-employment tax, employment taxes and excise tax. All small businesses are required to file annual income tax returns, with the exception of partnerships, which file an information return. A small business is required to pay small business tax as it receives income throughout the year, and may have to do this by making estimated tax payments. Small business owners that work for themselves pay self-employment tax. Employers have taxes to pay and forms to file for employees other than themselves. Excise taxes must also be paid for certain types of activities conducted, equipment used or products or services sold by the small business. A potential lender will review your tax return history as part of your business credit profile.
Business Credit and Tax Deductions
A part of a person’s or business‘ expenses that reduces income subject to tax. In some cases the interest on a business credit loan can be claimed as a tax deduction. Consult with your tax attorney or the IRS to find out if you are eligible.
According to Investopedia:
Investopedia explains Line Of Credit - LOCThe advantage of a line of credit over a regular (business credit) loan is that interest is not usually charged on the part of the line of credit that is unused, and the borrower can draw on the line of credit at any time that he or she needs to. Depending on the agreement with the financial institution, the line of credit may be classified as a demand (business credit) loan, which means that any outstanding balance will have to be paid immediately at the financial institution’s request.

Good luck and remember that business credit and small businesses mix well together. Consider doing that!

Sincerely,

Ilya BodnerSmall Business OwnerInitial Underwriting Group

Magic Johnson: Superstar in the Business Arena

2009-02-11T10:37:00.001-05:00

What does a former L.A. Lakers point guard and five-time NBA champ do when he retires from pro sports? Why he gets an office with an assistant and a $700 portfolio of companies of course!

It Takes Dedication

49-year old Earvin “Magic” Johnson says it’s all about dreaming. “If you can’t dream it you can’t live it.” The star basketball player admits that he never really thought a lot about playing college ball or getting drafted by the NBA when he was younger, but he did spend time acting out his fantasies about being the CEO of a successful company one day.

As the CEO of Magic Johnson Enterprises he does plenty of public speaking events, posturing himself as an authority on doing business. His book Thirty-Two Ways to Be a Champion in Business is scheduled to be released in late 2009. Naturally, he used his sports success as a launch pad for his business career but he does not use his fame as an excuse to rest on his laurels. The philosophy behind his entrepreneurialism reflects the dedication and commitment he held while on the basketball court.

“If somebody says no to you, or if you get cut, Michael Jordan was cut his first year, but he came back and he was the best ever. That is what you have to have. The attitude that I’m going to show everybody, I’m going to work hard to get better and better.”

Johnson’s company holds ownership of several fitness clubs and restaurant franchises, including Starbucks, T.G.I Fridays and Burger King locations. He owns a few AMC Magic Johnson Theatres and has various deals going on with companies such as Best Buy. Much of his wealth is channeled into the Magic Johnson Foundation that addresses education, health and social needs. The company motto is to the point – “We are the communities we serve.”

Johnson knows the value of company branding and has put extensive effort into contributing to the community and getting his business name known above and beyond his past fame. He targets communities that need economic revitalization urgently and he becomes an invaluable resource for them.

Get Up and Do It!

Johnson’s upcoming book promises to be a winner. However, if you were to ask him, he would advise you to get off the sidelines and start your business now. Don't wait to read his book before starting or expanding your business.

“Research your idea. See if there’s a demand. A lot of people have great ideas, but they don’t know if there’s a need for it. You also have to research your competition.”
Any entrepreneur with the commitment to do what it takes can make it happen. Yes, after his sports career, Johnson had money to invest but venture capital need not be an issue.

Building business credit comes in all sorts of shapes and forms. For different levels, there are different options.

Sincerely,

Ilya Bodner
Small Business Owner
Initial Underwriting Group

IRS Tax Information for Business Vehicles

2009-02-06T11:11:00.000-05:00

The Internal Revenue Service (IRS) offers a section on its website (http://www.irs.gov/) for business with valuable information on how to prepare for and file business taxes. The website provides articles on the latest updates in the tax laws that can make a difference in what you can claim as a business deduction.

Changes in Tax Laws

The changes in the tax laws tend to reflect the current economic situation and impact how much money you will get back on your business tax refund. For example, some of the changes beginning 2009 are as follows:
The standard mileage rate for the use of a car, van, pickup or panel truck is 55 cents for business miles driven. The 2009 mileage rates are intended to cover generally higher transportation costs compared to 2008 and the reversal of the spike in gasoline prices. Taxpayers have the option of calculating the actual costs of operating the vehicle rather than using the standard mileage rates. The business standard mileage rates cannot be applied when:
Claiming any depreciation method under the Modified Accelerated Cost Recovery System (MACRS)Claiming a Section 179 deduction for the vehicleThe vehicle is used for hire There are more than four vehicles used simultaneously
Individuals and businesses with 25 or more tractors, trucks or other vehicles used on highways need to take note of the change in how they make their excise tax filings. They must now make these filings electronically with the IRS electronically, rather than by paper. The form that is used is called the Heavy Vehicle Use Tax Return, Form 2290. It is used to make a report and payment on highway-use excise taxes. In 2008 trucking companies filed more than 700,000 of these forms and paid out more than $1 billion in federal highway use taxes.
Using the electronic filing system means gives taxpayers the advantage of not needing to wait for a stamped paper version of the Schedule of Heavy Highway Vehicles since they receive an electronic equivalent instantly. Truckers won't have to wait any more to register their vehicles with the state.

Choose an Approved Provider

Taxpayers need to be aware of the fact they must chose an approved transmitter/software provider for Form 2290. A list of approved providers can be obtained from the IRS website. Many of the other forms used for business vehicles can also be filed electronically, saving time and money for business owners.

Thousands are getting fired; What are people doing in tough times?

2009-02-05T14:31:00.000-05:00

The nation is being hit with unemployment. We all know someone who has been affected. What are those people doing about it? What is everyone really searching for right now?

According to Alexa.com, the leader in online traffic statistics, 2009 looks like the year of dreams and hopes. The most searched keywords were horoscopes, and the most visited sites have been related to diets.

http://shine.yahoo.com/page/2009-chinese-horoscope/ has been the hottest search so far. Is a link between the financially strapped and horoscopes?

At the time of such uncertainty, the segment of our population who are hurt the most is the small business owners. Not only are banks closing, but consumers are no longer spending. Being hit from both sides, small business owners are shutting down and adding to the problems in our service driven economy.

If you are a small business owner, there are small things that you can do. First, cut down on all the “cushion” expenses. You don’t have to close the doors, just be very conscious about your spending. Keep in mind that there are still alternatives when it comes to financing. Deal with your vendors, negotiate with the lenders, and build business credit for the brighter future.

Do whatever it takes to keep your doors open!

Sincerely,

Ilya Bodner
Small Business Owner
Initial Underwriting Group

Turning An Idea Into Profit: Sergey Brin

2009-01-28T15:59:00.001-05:00

"As we go forward, I hope we're going to continue to use technology to make really big differences in how people live and work." - Sergey Brin, Google Co-founder

How many business owners know that Sergey Brin, and his cohort, Larry Page quit their college studies to start the infamous Google in a friend's garage? It's inspiring to know that a couple of college guys with the right idea can achieve that kind of success. Lesson #1 – Build Business Credit and Expand the Business Image!

From the Garage to Billions

Brin, the head of technology at Google, is #13 on the 2009 Forbes Richest Americans list with a net worth of $15.9 billion. He was born in Russia in 1973 and later moved to the U.S. where his father taught math at the University of Maryland and his mother worked as a specialist at NASA.
As a young man, Sergey demonstrated a natural talent for mathematics and computing. He received his Bachelor of Science with high honors in 1993 from University of Maryland and later continued his studies in Computer Science at Stanford University. He met his future business partner, Larry Page at Stanford with whom he found a common interest in retrieving data from large data sets.
Eventually the pair began working on the project that later became Google and dropped out of their PhD program to pursue their plans in earnest. The duo used the principle of other people's money (OPM) to launch their venture, raising $1 billion from angel investors to get out of the garage. The company grew so quickly they were forced to move several times to accommodate their ever increasing staff, which was close to 5,000 by 2006. The young men built their company with the idea that they could do something unique that would change the world for the better.
"Obviously everyone wants to be successful, but I want to be looked back on as being very innovative, very trusted and ethical and ultimately making a big difference in the world." - Sergey Brin

Record Revenues
Sergey and Larry settled at their current headquarters at Mountain View, California and worked hard to add to Google's list of products. In 2001 tech exec, Eric Schmidt came on board to take the company public. In October 2004, the fast-growing company announced its first quarterly results as a public offered company; record revenues of $805.9 million.
"We are currently not planning on conquering the world." - Sergey Brin

Financial Leadership and Collective Thinking

2009-01-21T16:11:00.000-05:00

As a business owner how many times have you experienced an increase in company profit followed by a sudden request for additional expenditures from one or more of your organizational divisions? The underlying reason for this is the people that staff your company will always tend toward spending every dollar that comes through the door. You may even have this tendency yourself. This is the biggest reason why small business owners are in need of financing at this time. It’s time to save America!

Tendency to Spend Everything

There is a kind of group mentality that takes place in any organization when it comes to producing income. It is like an unspoken agreement among the staff members to produce enough money to cover what they believe they need to spend. The agreement does not include producing a surplus of income. The group wants to spend everything it has. It will only strive to increase its productivity if it sees the need to have more money to spend.
The problem with this collective way of thinking is you'll never have a surplus account to cover expansion of the business, emergency situations, investing or unusual expenditures such as paying off a loan. An organization is wise to have a financial cushion to cover expenses associated with these events. The goal of the group being to spend everything that comes in right now; it is not the least bit interested in budgeting any of it for future needs.

To be successful at building up a surplus account you have to create the perception the money you are setting aside for these purposes is money being spent. You can't wait to see what's left over at the end of the week and plan to transfer that to your surplus account. There won't be anything left over. The various divisions in your company will find legitimate reasons to spend it. Productions costs will suddenly go up, equipment will suddenly fail, or a department may suddenly find a sale on material or parts they must order in bulk this week to get the discount. These are all vague examples, but I think you get the point.

The head of your financial planning department has to be a person that can think beyond the groups' collective determinations. That leader must be able to remove their focus on the details of daily operations and give their attention to the overall viability of your company. If that person is you, the small business owner, think of it as the Two Face villain in the Batman movies. They must be able to establish a system where the surplus money is taken away from the total income before anyone else gets to see it. It must be perceived by all the divisions as an expense or they will find another way to spend it.

Take Charge of Your Financial Planning

The other day, a friend of mine called with a question about a new tenant he just took on. “How much risk did I just take on?” was his first question. I thought about that all night, why is that question so troubling? It’s simple, we as small business owners already realize that it’s a doomed joint venture; so it’s now about how long will it survive before the tenant bails.

If you, as the business owner cannot lead your financial planning in this way, then find a more objective person to fill the position. Don't allow your staff to spend everything. Implement strategies that ensure your staff will increase the company income to meet the demand for money they believe they need to spend. That is how you can maintain the viability of your business and accommodate future expansion.

California, Small Business Financing, Bailout, Citi, Auto Industry and more

2008-12-17T15:35:00.001-05:00

Everywhere you look people are talking about layoffs, bailouts, and the horrible economy that we are in. Is this going to stop?

The bigger question is whether the bailout proposals are going to work?!

For that we put up a blog, for regular people like you and I to put up our opinions on this bailout situation - www.bailoutopinion.com.

Take a look at www.bailoutopinion.com and put up your story, let's see if we have similar views or not.

Just this morning I heard that Best Buy is offering buyout settlements to their employees.
Best Buy? What? How is the electronics retailer king being hit as bad as the auto industry, what in the world is happening?!

GM and Ford are not getting what they want, and are we officially done with the $700 billion and Citi Group?

I don't know about everyone else, but my head is spinning with the amount of bailouts that are going on. Auto industry, California, small businesses, big businesses, banks, and more to come I'm sure.

The worst thing is that this is the holiday season and people are being laid off.
Solutions....let's talk about what can be done - will Obama pull off the next FDR? We all hope so, and now more than ever he has everyones support - just solve the problem!

From a small business owners point of view, small business financing is essential. Smaller banks and other lending institutions are still out to do business financing, some confidence needs to be reinstilled back into the small business owners. The real uncertainty is with the consumers,
will anyone start spending and stop worrying? 2009 is not looking to be a great year, but if we all gain some confidence and get back to borrowing and spending things should pick back up, right? Stay tuned.

Sincerely,
Ilya BodnerSmall Business OwnerInitial Underwriting Group

Winning the Ohio Lottery or Obtaining a Business Loan, What is harder?

2008-12-10T13:38:00.000-05:00

According to Google Trends the top 20 most searched words in December include:

Michigan Lottery
Mega Millions Winning Numbers
Ohio Lottery
Georgia Lottery
Megamillions.com
Russian Roulette (currently 32, but is this a bad sign?)

Just last month the hottest search was Britney Spears, or some sort of a football game. It is evident that the mega millions are more important during the holiday season. What about our small business owners? Where do they turn to get financing for their business?

There seems to be a quest for the hidden treasure right now. Small business owners are looking everywhere for the business financing, business loans, or any type of business credit cards to get them through the harsh winter. 2008 is coming to an end, and on top of all small business owners’ minds – Where to obtain business financing in 2009?

President-elect Barrack Obama has promised bridges and roads, while the Treasury assured that lending will continue with joint efforts from Citi Group. Hopes are high, but the question still remains – where to obtain business financing in 2009?

For most of you that are reading this blog, hitting the Ohio Lottery sounds like a more feasible option; I’m not going to lie, that sounds better to me too. But the reality is that there are plenty of smaller lenders that are trying to grab the market share, you just have to know where to look. So if you are on the quest to find the hidden treasure, why don’t you start with an online search? Try “strong business credit” as a keyword (just like that, in quotes), and see where the journey will take you from there.

Sincerely,

Ilya Bodner
Small Business Owner
Initial Underwriting Group

Strike While the Iron is Hot; Using the Recession to Your Advantage

2008-12-03T13:34:00.000-05:00

These last few weeks of our economic downturn got everyone wound up. From business owners to CEO’s and back to the consumers – everyone is in a panic about the recession and the bailout plans. But what is a recession, really? How are the bailouts impacting your life?

As consumers we are all hurt. The price increases on all goods and services for which President-Elect Obama is preparing already, will be upon us soon.

However, as small business owners should we think of this as a gain or a loss?

In what turned out to be a chaotic world of lending, those who survived see the current economic situation as advantageous. As Citi Group, WaMu and NationalCity drop out of the market, the lenders that remain standing have already stepped in to help.

Small business owners – the time to expand is now, right now! Not next month and not next year. As Christmas approaches, get ready to take advantage of the incredibly low prices while they last. It is only a matter of time before they hike back up. Business financing is at its lowest rates. The trick now is to find the companies which are still financing small businesses and take advantage.

Begin your research online for business loans and business financing options. Having strong business credit is a plus, but alternative financing is not limited to just the banks that look at credit. Peer-to-Peer lending sites, merchant circles, and other social media outlets offer plenty of opportunities to find the money you need to expand your business.

Knowing that the weak companies will fall and small business loans are at their lowest – what can a small business owner do? Start by checking www.prosper.com or www.allbusiness.com for some ideas. At Initial Underwriting Group we have heard that many small business owners simply conduct a Google® search for “small business loans” and that gets the job done. Whatever it takes, get out there and make connections with the lenders, underwriters, brokers to help with your financing needs..

Sincerely,

Ilya Bodner
Small Business Owner
Initial Underwriting Group

Get your finances in order for 2009

2008-11-26T09:28:00.000-05:00

Over the past 30 days our economy went on a series of “oohs” and “awhhs”. The media is to blame for this massive panic. Everyone is encouraged to turn off the TV and focus on their small business finances for the next quarter – Q1 of 2009 is rapidly approaching, are you going to have the finances to get into the groove?

IUG has been quoted by the Los Angeles Times for having the lenders, but no clients to redeem the financing!

The time to focus on things like a business credit report is now. It only makes sense to plan for more lending in the near future.
Unfortunately, most of you that are reading this article realize one thing – our opinion on the state of the economy is going to go as far as the Thanksgiving turkey carving Thursday night. With the holiday of giving thanks coming up in a few days, the reality of the situation is that we can only sit on the side lines and watch the president-elect Obama piece together his troops for D-Day next year. This is why the recommendation is to enjoy your feast, try not to fall asleep before 10pm on Thanksgiving night and wake up motivated to focus on things that matter – getting your business credit and finances setup for a solid start in 2009.

Sincerely,

Ilya Bodner
Small Business Owner
Initial Underwriting Group

PS – Would you like to listen to an audio version of these articles? Similar to a podcast, CLICK HERE

CHOOSING AMONG FINANCING OPTIONS

2008-11-19T11:41:00.000-05:00

You have a million dollar idea for a small business, enough motivation and drive to launch an effective marketing and advertising campaign, and logistic channels established to get your product or service to the masses. Now the only thing missing is the funding to get your new company up and running through new business financing. If unsuccessful attempts to acquire a traditional bank loan have left you stranded, where do you go? How do you get the funding for your new venture?
Today many small business owners are turning to private consulting firms. Utilizing such a service not only saves a business owner from headaches but also finds favorable financing! There are currently a handful of companies in the U.S. and Canada that offer services such as these. One should be careful and do the research to ensure the company of choice has the necessary lending networks.
The internet has become a good meeting ground. Take a minute and just try it – type “business loans” or “strong business credit” or “business financing” into Google. You will get 100’s of companies to facilitate your different loan need. Become creative but be aware that there are Scams! To utilize the internet you must know how to take advantage of the strengths of your business (collateral, business credit, equity, tangible take-away), but don’t confuse that with potential. Often, especially those lending networks that you find online, won’t give you a dime based on the potential – the current results speak louder than any promise you may make.
All services will require a fee of some kind, either upfront, or at the time of closing the loan. Be sure that the fees make sense and are reasonable.

Good luck to all with your online search for business financing.

Ilya Bodner
Small Business Owner
Initial Underwriting Group

Michael Jordan's Advice For Entrepreneurs

2008-11-12T14:12:00.001-05:00

When it comes to being successful, some people simply have what it takes. It seems no matter what they put their hands on, they succeed beyond their wildest dreams. Michael Jordan is one of those people. From the basketball court to the boardroom, it seems that everything he touches turns to gold.

Drive and Determination

Today's entrepreneurs can learn from the stellar example that Jordan has set, both on the court and in his business dealings. Although to the casual observer, Jordan appears to lead something of a charmed life, he has overcome his fair share of obstacles in order to achieve such great success. In his personal life, he has faced setbacks that would cause many to give up on everything, from the 1993 murder of his father, which was a contributing factor to his first retirement, to the breakup of his 17-year marriage in 2006.

"If you're trying to achieve, there will be roadblocks. I've had them; everybody has had them. But obstacles don't have to stop you," Jordan says," If you run into a wall, don't turn around and give up. Figure out how to climb it, go through it, or work around it. "
This drive and determination has been a huge factor in his success as an entrepreneur. His Air Jordan line at Nike has grown to a 500 million dollar a year empire, due to his own direction and guidance. Jordan encourages others to take chances and not to be afraid of failure in order to achieve success.

"I've failed over and over and over again in my life and that is why I succeed," Michael says. "I've always believed that if you put in the work, the results will come. I don't do things half-heartedly. Because I know if I do, then I can expect half-hearted results."

Become a Savvy Entrepreneur

Michael certainly puts in the work, between overseeing his Nike line, running his restaurant in Chicago, working with basketball players of all ages at his Flight Schools and endorsing several products. The hard work and determination that he pours into all of his ventures, along with the competitive edge that he still carries from his days ruling the court, are the things that have helped to build the Michael Jordan empire. Though it may look like luck to some, every savvy entrepreneur knows that in order to be successful, you truly have to be like Mike.

Sincerely,

Ilya Bodner
Small Business Owner
Initial Underwriting Group

Hurricane Ike…vicious storm; A blog inspired by the “Bob”

2008-09-18T10:08:00.000-04:00

It is 8:03am and I'm in the office alone, this is the best time of the day for me. I can gather my thoughts as an average small business owner. Only this time there is a small problem – the Columbus, Ohio office is without power for 6 days. Who would have ever thought that out of multiple offices in Ohio and Florida – OHIO would be the one down due to a weather disaster?!
Strange…and unpredictable but "Bob" was partially right. [Some of you that know me personally remember that my partnership with "Bob" was professional. Occasionally him and I would open a bottle of bubbly to celebrate our victories.]
Why was "Bob" right? Redundancy is what he preached. Ohio went down, but Florida locations stayed opened and active, covering the downtime experienced during Hurricane Ike related weather.
"Bob" is having a hard time right now because his disaster plan led to backup offsite servers, files, etc – but the problem is that geographically the redundant backups are still in the same area. Although Ohio has unpredictable weather sometimes, the odds of being affected by Hurricane Ike would have greater in Florida, rather than Ohio! Hurricane Ike demonstrated his wrath throughout Ohio and no matter how disaster redundant a business can be in a city – if the internet goes down citywide, you are down for good.
The supremacy of Hurricane Ike showed that having backup generators does not always solve problems, but geographical positioning is important.

Sincerely,

Ilya Bodner
Small Business Owner
Initial Underwriting Group

Millions of Dollars through Shelf-Corporations

2008-09-02T10:50:00.001-04:00

This question has always been on our client's minds – can I really raise more money through Shelf-Corporations?

The internet offers a lot of propaganda to suggest that buying shelf-corporations will make you an instant millionaire. Some sites, and information found, even hints that when you buy a shelf-corp you can immediately use it to raise money just because of the age of the company.

While it is true that a shelf-corp is beneficial due to its longevity, do not be fooled by the commotion that is built around it. Shelf-corporations are a tool which only particular craftsmen can use. Without a proper method of use, the money spent on a shelf-corporation is unjustifiable. Needless to say that a 5-10 year shelf-corp out of any state won't “raise money instantly” or “immediately make you more favorable in the eyes of the money lenders”, as some suggest.

Here at IUG we ask you to be careful before considering this option. It is always recommended to build your business credit from scratch, or from an existing company. Lenders see through the smoked mirrors and the distortion created – sure you can squeeze by a few gains on smaller loans, but how long can it really last until someone asks you…..why did you buy an existing shelf-corp?

“One step at a time is good walking” – Chinese Proverb

First Step - Establish business credit for a corporation you run
Second Step – Open new commercial credit line account each month
Third Step – Use newly opened credit lines and monitor their reporting
Fourth Step – Repeat steps 2 and 3 until you have six accounts reporting to DNB aggregate credit of $15k+

***To build a business credit profile you must actively open new accounts, click here to get the full list.

Sincerely,

Initial Underwriting Group

*Breaking Down The Barriers To Small Business Financing*

www.initialunderwriting.org

www.strongbusinesscredit.com

For Real Business Owners, Real Success Stories = www.initialunderwriting.org/testimonialrec.html

$1 million in new accounts in less than 90 days!

2008-08-27T13:46:00.000-04:00

Our Concierge Team did it again!

We have been able to provide you with accounts that you may have not have had otherwise.

In a matter of 6 months our Concierge Team grew from an idea into a full stream backbone of IUG. More than 30% enrolled clients received $10,000+ per account within the first 30 days; on an average, 3 new accounts are per client.

Everyone is invited to try out the Concierge Service for free! We will be more than happy to waive the first month of service. Give us a call or send a request to your Processor directly. We now have the man power and the resources to customize each Concierge program to your specific needs.

Congratulation to everyone that is currently signed up on our Concierge Service!

and�Way to go team!

Sincerely,

Initial Underwriting Processing Team
Headed By Jaime Cardinal, DNB Expert
614.231.4300
www.initialunderwriting.org
www.strongbusinesscredit.com

Stop using your personal credit so much!

2008-08-22T15:19:00.000-04:00

If you already have a well-established business with a good track record and are in need of a loan for expansion or any other reason, you will want to avoid using personal credit to secure that loan and, instead, use the business and its credit as collateral. This is a good idea for several reasons. Number one, if your personal credit isn't as good as it could be, using your business as collateral could give you a much better chance of being approved for a loan, or a better chance at being approved for a loan for a higher amount.
In addition, establishing and building a good corporate credit history in this manner will help your business in the long-run. However, if you use your business credit to apply for a loan and cannot repay it, it will reflect upon your business credit, leaving your personal credit unharmed. Therefore, it's a good idea to use the business as collateral rather than your personal credit whether your personal credit history is good or bad - either to protect your good personal credit, or to improve your chances of being improved for a loan if your personal credit is bad. Not only is it good to use your business for personal credit protection and to help build up your business credit history even more, it's also helpful in maximizing the amount you'll be approved for in a business loan. With good personal credit, you may not be able to get as much out of a loan as you would with good business credit.
You can build business credit by contacting professional services. Begin by searching the web for “strong business credit” (just like that in quotes), type this into google and/or yahoo.

Good Luck!

Sincerely,

Ilya Bodner
Small Business Owner
For Real Business Owners, Real Success Stories = www.initialunderwriting.org/testimonialrec.html

KEEPING YOUR FINGER ON THE PULSE

2008-07-09T11:29:00.001-04:00

It is crucial for a small business owner to be involved in every level of the operation. Many businesses will contain areas that pose certain revenue losses—like a restaurant with food waste costs, or a convenience store with a high theft rate—and the owner must be aware of every possible cause for loss of profit and productivity.

Many owners follow the impulse to hire a manager to manage the staff and spend too much time out of the office, away from “the rank and file.” Not only does this take the owner away from his or her responsibility to work in the business in the beginning, but it can also create a gap between ownership and management, which can be devastating for a small business.

By continuing to work in the business rather than running it, the small business owner can keep in touch with the crucial, day-to-day issues that affect the business’s bottom line. As the business progresses, the small owner can assign these tasks to department heads that are held accountable for the statistics and productivity.

Sincerely,

Ilya Bodner

Small Business Owner

Initial Underwriting Group

*Breaking Down The Barriers To Small Business Financing*

www.initialunderwriting.org

www.strongbusinesscredit.com

For Real Business Owners, Real Success Stories = www.initialunderwriting.org/testimonialrec.html

A business is more than JUST an idea

2008-06-13T08:50:00.002-04:00

Do a keyword search on the internet for “small business loans” and you’ll be swamped with results offering you hundreds of ways to get the funding you need for your small business. The same applies to "strong business credit" (just like that in quotes), if searched thousands of results come up. If you have time to wade through page after page of information, you’ll get an idea of what you need to do. However, if you have been rejected by the bank for a small business loan due to bad credit or no credit and want to apply with alternative or hard money lenders--- bottom line, here’s what you need to be prepared:

Create a business plan and put it on paper
Write down your financial projections
Register your business with the state
Get a Federal Tax ID or EIN
Get current & stay current on your business taxes
Get your past 2 – 5 years of tax returns
Obtain all the appropriate licenses & certificates
Get your bookkeeping in order
Set up a debt repayment program for past debts
Pay your business bills on time
Register with Dun & Bradstreet to build a Paydex score
Acquire vendors that report to Dun & Bradstreet
Get a brick & mortar business address
Get a business phone number with a live person that answers it
If your personal credit sucks, take action to repair it
Find an underwriter that will introduce you to several legitimate lenders

This looks like a lot of effort and it is, but if you want to get a business loan, accomplishing these items is what it takes. A potential alternative lender or hard money lender will take all of this into consideration.

Begin your search for the appropriate structure online. Google or Yahoo "strong business credit" (just like that in quotes) to find companies that can help with all corners of a business. Remember that the consulting may cost up to $1,000.

Sincerely,

Ilya Bodner
Small Business Owner
Initial Underwriting Group

A True Business Credit Card

2008-06-05T14:43:00.001-04:00

A true business credit card is a line of credit that is taken in the name of the business, under the business' credit. Activity, whether good or bad, is reflected on your business' credit report through D&B and other financial institutions, and the liability for any debts incurred and bills owed is with the business.However, some companies out there offer "business" credit cards which they require a person guarantee for. These institutions will often ask for a personal guarantee, and will almost always ask for a social security number from the person applying for the card. If this is the case, the credit card is not a business credit card, but is simply a personal credit card which is used for the business. The business is not liable for bills and debts - you are.When applying for a credit card for your business, watch out for areas asking for your SSN (and not your TaxID or EIN) and be wary of any credit card that asks for a personal guarantee. By ensuring that your credit card is in the name of your business, you can help to build your business' credit, while avoiding creating problems with your own.

Many companies offer a list of credit cards that are issued under the business name only. Those lists typically run $300-$900, depending on the quality of the information inquiring. I would suggest starting your search online via google or yahoo. Search for "strong business credit" (just like that in quotes) to find services that sell the information.

Good luck,

Ilya Bodner
Small Business Owner
Initial Underwriting Group

Tolerance for PERSONAL failure

2008-05-30T15:03:00.001-04:00

One important characteristic all business owners should possess is tolerance for failure. Failure is negative only when you take it for what it is, a failure. But if you learn from one failed project or venture in order to create a new and improved one the next time around, failure can be the best thing that ever happens to you. That might sound crazy, but running a successful business is a learning process, and part of that process is failing from time to time. The wise business owner will learn from this failure rather than simply be frustrated by it.

Wayne Root, author of the book “The Joy of Failure”, claims he failed his way to the top. “Every time I fail, I know I'm that much closer to the success I want. Don't kid yourself - if you want to win big in business, you will lose big along the way." says Root. Root emphasizes that failure can lead to great things: Steve Jobs, Sly Stallone and Bill Clinton have all suffered big failures, although they definitely aren’t described as failures today. Furthermore, in entrepreneurial hotbeds like Silicon Valley or Boston, failing is viewed as understandable.

A positive attitude is essential if you plan to start or run a business. "A lot of people identify with the results they produce, and think if their business is failing, they're failing," says Nicholas Hall, founder of startupfailures.com. "The only true failure is never trying,” he says. “Having that attitude makes it easier to bounce back."

As always...take some time to educate yourself on the topic of business credit. Search for "strong business credit" (just like that in quotes) via google and/or yahoo (soon to be msn).

--
Sincerely,

Ilya Bodner
Small Business Owner
Initial Underwriting Group

www.initialunderwriting.org
www.strongbusinesscredit.com

614.231.3519
877.752.4300 FAX

How much do you need?

2008-05-22T11:03:00.000-04:00

Careful consideration should be taken concerning startup and/or expansion capital. Some common reasons for financing are debt consolidation, purchase/lease of inventory and equipment. Obviously, it isn’t a good idea to borrow more capital than necessary, but it is important to ensure the financing amount will be sufficient.
Whether your business is just starting up or has been in operation for years, often overlooked, is the question of: How much should you get? And the answer is important; simply having an answer is significant. Many business owners apply for the sake of applying and never take the time to analyze how much they really need. Time after time, StrongBusinessCredit hears clients answer “the most I can get” or “whatever I can get approved for,” and most commonly “$100,000 for working capital of some sort.” Those types of answers don’t get the owner anywhere and will most likely scare lenders away.
Another reason to know the amount of a loan needed is for avoiding over-extension. A strong business plan, as outlined earlier, will help avoid this. In a successful business plan, the owner should outline the maximum budget calculated for a loan repayment. StrongBusinessCredit reviews hundreds of business loan projections and the most commonly omitted expense is the loan repayment. Consider going back and recalculating the expenses again and don’t forget to increase or decrease the loan payment amount in accordance to the loan itself.

Sincerely,

Ilya Bodner
Small Business Owner
www.initialunderwriting.org

The market place is like a treasure hunt

2008-05-01T08:11:00.000-04:00

Research from Harvard University highlights the fact that customers' needs are changing faster today than ever before. Businesses need to better understand what it is that customers are really looking for, which may call for altering their current position.

Many small businesses are discovering that by reaching out to new markets, they are able to expand their business in ways they never imagined. When Tiffany Kim of Detroit Spa noticed the customers of her spa bringing in their husbands and boyfriends, she started reaching out to the male market, which now constitutes 30% of her business. Kim T. Gordon of Entrepreneur Magazine stresses not to forget minority markets, such as the growing Latino sector. “The Latino market is an entrepreneur's dream,” she claims. “With economic clout expected to reach a whopping $926 billion by the end of 2007, the Latino market's buying power will soon outstrip that of all other ethnic groups in the United States.”

One market many business owners ignore is the public sector. The federal government, local and municipal governments, colleges and universities, school districts, nonprofit organizations, public utilities are great opportunities for small business. The federal government’s civilian agencies alone buy a range of products in more than 4,000 different categories. Furthermore, small businesses often have an edge in competing for procurement dollars because of government regulation designed to promote fair competition. The public sector is often required to give a certain amount of business to small, women-owned, and minority-owned business.

The market place is a treasure hunt. The business owner should not neglect to constantly be searching for new and creative markets to reach out to.

As always, to find out more about business credit and alternative financing remember to search for “strong business credit” (just like that in quotes) via google or yahoo.

Sincerely,

Ilya Bodner
Small Business Owner
Initial Underwriting Group
*Breaking Down The Barriers To Small Business Financing*

www.initialunderwriting.org
www.strongbusinesscredit.com

614.231.3519
877.752.4300 FAX

Sales - Turn a No into a Yes

2008-04-29T18:53:00.002-04:00

What is a “No” in Sales? It is one of two things. 1.) It can be a sincere one-word sentence with real intent that this is the end of the discussion. This can easily be detected by the tone of voice a person uses. Let this person go and do not waste any more time with them. 2.) The other “No” is an early buying signal and it needs to be treated as such. It may take a little finesse to turn this “No” to a “Yes”.

The first and foremost thing you want to do at this point is to listen. The person will tell you why it is a no. Find out why so you can understand their specific situation and what they are looking for. Your product or service may or may not meet their need.

If it does not meet their needs then you have found out now and you need to ask them for a referral, the name of someone else they know who may need your product or service. This will turn their temporary “no” to an eventual “yes”.

If it does meet their needs then it is simply a matter of explaining that to them after you have listened.

Do not rush in to tell them how it does this. The initial “No” indicates that you have not established enough affinity and rapport with them. They are not hearing what you have to say and they are not trusting you. Do not let this affect you emotionally. All really “good” sales people want to become “great” sales people. Do not react to them. Pursue your personal success.

The most important thing here is to build the relationship not the product knowledge! When you have the relationship then they will hear what you have to say and will understand how your product or service can benefit them. To build the relationship ask questions. This demonstrates a real interest in them. It will also give you an appreciation of their situation. When all this is in place they will trust you and they will say “Yes” to purchasing your product or service. You turned it around by caring and they sensed your genuine concern.

In case you didn't know, business loan lenders will check out your sales history.

Michael Gerber on Dreaming in Small Business

2008-04-29T18:25:00.003-04:00

In this short video clip, Michael Gerber, author of E-Myth, gives his perspective on excellence and dreaming for small business owners.

What Business Loan Lenders are Looking for in Your Business Plan

2008-04-29T09:30:00.002-04:00

One of the first items a potential lender will request from you is a business plan for your small business. Regardless if you are going the traditional route of an institutional loan or applying for alternative business financing, you will need a solid business plan. Business loan underwriters receive hundreds to thousands of requests from startup entrepreneurs and established small business owners looking for financing each month. Your business may be achieving a measure of success, but if you cannot show that you have carefully thought out the details of your plan of action on paper, the lenders will quickly lose interest in you.
According to business plan writers, Scribes Unlimited, lenders look for specific data to be presented in a business plan. This includes:

Details of how much you and the other founders have already invested.
How well you know your market demographics and your competition.
Your understanding of market trends in your industry.
Your long term projections for your business.
How realistic you are being with your financial projections.
The appearance and professional demeanor of the business plan.
The qualifications of the management team.
The exit strategy for your business.
The amount of funding you need and how it will be used.
How you intend to repay the loan.
The SWOT for your business -- strengths, weaknesses, opportunities, threats.
The relevancy of your business to society.

Most small business owners and startup entrepreneurs have particular strengths that qualify them to be in business but typically, not everyone knows every aspect of starting and operating a company. The most successful companies in the world have a management team comprised of individuals that are authorities in their specific field. If you don't know how to write a business plan that will get you the funding you need, take the time to educate yourself or find an expert that can help you accomplish this.

GETTING RID OF BUSINESS DEBT (Same applies to personal debt)

2008-04-22T11:33:00.000-04:00

To ensure that your business continues to be successful and profitable, it may be advantageous to get rid of short term debt. Below are a few pointers to follow to stay most productive:

ü Focus on one debt at a time - If you can afford to put more money into one debt than any others without incurring late fees or bad marks on your business credit, it will be easier to rid the business of debt.

ü Avoid new debt - Taking out a new loan, for example, is counterproductive to paying off business debts—it only creates more.

ü Increase Business Profit Margin – Higher profits should be first spent on reducing the debt and if higher profits are maintained they will soon end up in the owners pockets.

ü Strategize on YOUR plan – Planning is preached from the start. Paying down a debt is no different. Have a plan that works for you and follow your own directions precisely.

The bottom line is that all of these tips are very basic and almost too simple; it all comes down to your business plan. Always plan for the worst! Within your original business plan, the bad times you may encounter are predicted and mitigated so plan wisely. Without such precautions your business is vulnerable to failure. Try by contacting a business consultant, begin by searching on google or yahoo for “strong business credit” (just like that in quotes).

Sincerely,

Ilya Bodner
Small Business Owner
Initial Underwriting Group
*Breaking Down The Barriers To Small Business Financing*

www.initialunderwriting.org
www.strongbusinesscredit.com

614.231.3519
877.752.4300 FAX

Don't want to show up to work....

2008-04-12T15:09:00.002-04:00

Picture this: You're running a successful business on your own. It's small, but productive, and you're providing a valuable service to two or three small clients, who are all paying you regularly and on time. You don't feel a need to expand, and so you don't hire other employees to work for you. You wake up in the morning sick - there's no way you can make it to work today, but you have work to do for all of your clients with a deadline. You have nobody to call, so you either have to suck it up and go to work, sick and unfocused, or put off the work for another day, possibly losing clients for being late.

Hiring employees is a big step in running a business. It's a boost to your business' reliability, productivity and capacity. You can handle more work, do that work faster and more efficiently. When looking for potential employees, there are several factors that should be taken in to account to ensure you hire the best, most reliable person for the job. In a small business, if you don't make it to work, this person is effectively going to be acting in your place. For this reason, your first employees are going to have a profound effect on your business and you'll want to pay extra attention to who you hire at this point.

So, how can you tell that the person you hire is the best one for the job? Some common hiring advice includes looking at more than skill and talent - but at the person. Someone may be a highly skilled accountant, but may have poor work ethic or may misrepresent the company when left to his own devices. Also, don't rely too much on the person's references. Often, they're misconstrued for a variety of different reasons. The best way to get to know a person is through interviewing. Talking to the person, asking meaningful and appropriate questions to get to know them and spending time conversing with the person is key to hiring the right person for the job. As long as you're attentive to the interviewee's responses and personality, the right person for the job should be easy to spot.

Sincerely,

Ilya Bodner

Small Business Owner

Initial Underwriting Group

*Breaking Down The Barriers To Small Business Financing*

www.initialunderwriting.org

www.strongbusinesscredit.com

614.231.3519

877.752.4300 FAX

17. Why using credit cards to finance your business is a bad idea

2008-04-03T17:40:00.003-04:00

The first and foremost reason why using credit cards to finance a business is a bad idea is because these credit cards are almost always personal lines of credit. Even though financial institutions will market so-called "business credit cards" or a "business line of credit," they are almost always, in fact, personal lines of credit. You are personally liable for these lines of credit, and not your business. Not only is your personal credit rating at risk for using these lines of credit, but since the issuer requires a personal guarantee, your own assets and money are at risk, as well.

Although it is possible to finance your business with personal lines of credit, it is a risky and difficult thing to do properly. Without the right planning, you could find your personal credit, your financial situation and your business in jeopardy and find yourself in a much worse position than the one you started in.

Not only is it a substantial risk to yourself, but it may be a risk to any shareholders or business partners you may have. An article at Entrepreneur.com sates that "most banks require shareholders with significant ownership in corporations to guarantee business lines of credit - typically owners with more than 25-percent stake that are required to sign guarantee forms when credit lines are more than $5,000." This means that they can be sued, individually or jointly, by the bank, should you end up owing money to your credit card issuer. This can make it incredibly difficult to obtain a business line of credit, if only because you will have to convince any shareholders or partners you have that the payoff will be worth the risk they will be taking on.

Financing your business the right way would be through the use of business credit. Begin your research online by typing in "strong business credit" (just like that in quotes) at google or yahoo. Expect to pay $300-$900 for the mentoring service.

Sincerely,

Ilya Bodner
Small Business Owner
Initial Underwriting Group
*Breaking Down The Barriers To Small Business Financing*

www.initialunderwriting.org
www.strongbusinesscredit.com

614.231.3519
877.752.4300 FAX

Who Will Loan Money?

2008-03-26T15:02:00.001-04:00

Hard money loans are essentially loans that are offered by private lenders instead of banks and other financial entities. The people and organizations that offer these loans are referred to as hard-money lenders. Hard-money loans are typically offered to borrowers who do not qualify for traditional mortgages and financing through banks and financial institutions. They may also be employed by people or businesses that are looking to close quickly or are unable to provide sufficient income tax information. They are generally more willing to take on risks, but typically charge higher interest rates than traditional mortgages.

Some of the advantages of taking a hard money loan include the ability to negotiate the interest rate and other terms and conditions more easily than with a financial institution. You also save money on title insurance premiums and legal fees normally charged by traditional lenders. In addition, the closing time is generally shorter because the borrower does not have to wait for mortgage approvals.

The sources of commercial hard-money loans are usually private individuals, mortgage companies, federal banks and SBA lenders. Each individual lender has its own benefits and downfalls, so you may want to ensure you research as many different lenders as possible before making your final decision. Investing website, reiclub.com, provides a listing of several dozen hard-money lenders.

Sincerely,

Ilya Bodner
Small Business Owner
Initial Underwriting Group

*Breaking Down The Barriers To Small Business Financing*
www.initialunderwriting.org
www.strongbusinesscredit.com

614.231.3519
877.752.4300 FAX

Is Steve Jobs a Narcissistic Jerk Billionaire?

2008-03-18T07:01:00.007-04:00

According to Forbes list of the World’s Billionaires, Steve Jobs ranks as #189. His net worth is $5.4 billion. The entrepreneur was a Reed College dropout, so how did he get to be so fabulously rich? Primarily, through Apple Computer and Pixar. His life has not been all peaches and cream, but hard knocks did not deter him from forging ahead.

About Steve Jobs:

Adopted by working class parents
Started Apple in his “garage”
Fired from Apple in 1985
Called a narcissistic jerk by a Forbes writer in novel “Options”
Bought Pixar from George Lucas for $10 million
Sold Pixar to Disney for $7.4 billion
Had a resurrection at Apple in 1996
Called the “igod” of the “iPhone”
Flopped big with Apple TV
Largest individual Disney shareholder

Over the course of his entrepreneurial life, Jobs has earned the wrath of a few other business people and stirred up plenty of controversy. We can't deny the fact that the business mogul started out in his garage and is now #189 in the entire world of billionaires. Fortune Magazine named him the most powerful Businessman of 2007. He might not be an angel, but his impact on the world of business cannot be ignored, especially by up and coming small business owners that have the courage to dream big.

"People in the company had very mixed feelings about it, everyone had been terrorized by Steve Jobs at some point or another, and so there was a certain relief that the terrorist would be gone. And on the other hand I think there was incredible respect for Steve Jobs by the very same people, and we were all very worried what would happen to this company without the visionary, without the founder, without the charisma. ” —Larry Tesler

DO NOT WAIT AROUND, Have an idea? Start NOW

2008-03-12T16:46:00.002-04:00

If you have a great idea for a business, don't put off writing a business plan, or at the very least, putting your ideas down on paper. Business writer Tim Berry offers valuable advice on the topic: “Don't wait until you have enough time, don't wait until you have the right people, and definitely don't wait until there's an urgent reason. Instead, just do it now.”

Writing your ideas down is the first step to actually getting your business up and running. We suggest that you take time throughout this book to jot down ideas as they occur and spend time to answer the questions we pose both thoughtfully and honestly. Because every business is unique, many of these questions are ones only you can answer.

To get financing for your business is another story. Begin your search online for "strong business credit" (just like that in quotes) to find mentoring services that can help you with business based financing. Expect to pay around $1000 for the service.

Sincerely,

Ilya Bodner

Small Business Owner

Initial Underwriting Group

*Breaking Down The Barriers To Small Business Financing*

www.initialunderwriting.org

www.strongbusinesscredit.com

614.231.3519

877.752.4300 FAX

Loans for Trucking Companies

2008-03-11T06:24:00.002-04:00

Business equipment loans are not very different from car loans. Just as in a car loan, the vehicle is the collateral, the equipment is the collateral in an equipment loan. Equipment being purchased for business use may be financed for a term that meets the business’ needs, based on the useful life of the equipment. When equipment loans go into default, repossession on the equipment can occur. Unless a business has been operating for many years and has cash flow to enable the purchase of large equipment and trucks of any size, an equipment loan will most likely be needed at some point. For start-ups, the cost of equipment alone can be the largest need for start-up capital.

The keys to getting affordable rates on equipment loans are good credit, reasonable debt ratio, and a solid operating history for your company. For start-ups, a solid track record isn’t always available to help secure loans, which provide the small business owner with a way to get the equipment he or she needs without tying up vital capital or credit lines.

Billionaire Richard Branson Marketing Advice for Business

2008-03-03T11:49:00.003-05:00

Sir Richard Branson is the billionaire CEO of Virgin Companies (travel, media, music, entertainment) and he has advice for small business owners. In this video clip, Sir Richard talks about extreme marketing techniques to draw big attention to you business, how tough it is to start a business without financial backing and the importance of having fun with your business.

Using Business Credit versus Personal Credit

2008-03-01T15:49:00.002-05:00

If you already have a well-established business with a good track record and are in need of a loan for expansion or any other reason, you will want to avoid using personal credit to secure that loan and, instead, use the business and its credit as collateral. This is a good idea for several reasons. Number one, if your personal credit isn't as good as it could be, using your business as collateral could give you a much better chance of being approved for a loan, or a better chance at being approved for a loan for a higher amount.

In addition, establishing and building a good corporate credit history in this manner will help your business in the long-run. However, if you use your business credit to apply for a loan and cannot repay it, it will reflect upon your business credit, leaving your personal credit unharmed. Therefore, it's a good idea to use the business as collateral rather than your personal credit whether your personal credit history is good or bad - either to protect your good personal credit, or to improve your chances of being improved for a loan if your personal credit is bad.

To find out more begin your search online. Look for "strong business credit" (just like that in quotes) via google or yahoo.

Good luck.

Ilya Bodner
Small Business Owner
Initial Underwriting Group

www.initialunderwriting.org
www.strongbusinesscredit.com

614.231.3519
877.752.4300 FAX

What is a Paydex Score?

2008-02-27T19:14:00.002-05:00

The Paydex Score is the business credit score equivalent to your personal FICO score, or personal credit score. As a small business owner you need to know what this number is. You also need to be aware of how to increase your Paydex Score. This will make the difference when seeking to obtain the financing needed to start or expand your business. If you do not manage your Paydex Score effectively, this can cost your business.

The Paydex Score definition from Dunn & Bradstreet, or D&B is: "The D&B PAYDEX Score is D&B's unique dollar-weighted numerical indicator of how a firm paid its bills over the past year, based on trade experiences reported to D&B by various vendors. The D&B PAYDEX Score ranges from 1 to 100, with higher scores indicating better payment performance."The higher the score the better. Lenders consider a score above 75 to reflect a confortable business to lend to. To get to a Paydex Score above 75 most business owners have six vendors reporting with at least $15,000 in revolving credit. A business loan underwriter can tell you how to accomplish the minimal requirements.

Receiving Grants and Budgeting Finances

2008-02-26T08:46:00.002-05:00

If your business has received thousands of dollars in grants and financing—or your business is several years old and the money is coming in steadily—do you know what to do with it?

(For financing options based on business credit begin your search online by typing “strong business credit” (just like that in quotes) via google or yahoo.)

Budgeting is one of the more intricate aspects of running a business. It not only involves deciding where the money you have is going to go, but where money is going to come from. To successfully budget your finances, you have to be willing to adapt and learn as you go. Not only should you be prepared to deal with money as it comes in, but also changes and the possibilities of missing your budget estimates. Proper planning and adaptation will ensure that the budget comes together successfully.

Things you'll want to do include checking the budget monthly—or even more frequently, if necessary. Be flexible and adaptive with your budget based on your observations. Create a "cushion" of sorts—a savings for those times when you're over budget and need a little extra cash. Be conservative. Planning on spending too much on an expense and having extra cash is better than planning to spend too little and owing more than you have.
Most important of all, pay attention to your business's finances and don't let the budget get away from you. If absolutely necessary, hiring another employee or even an accountant to take care of the budget for you may cost more than doing it yourself, but it will help to ensure cash flow.

Sincerely,

Ilya Bodner
Small Business Owner

4. Who should be in charge of marketing at the office?

2008-02-18T06:59:00.001-05:00

Whoever is willing to dedicate the time and hard work necessary to properly market your business to the right people? There are countless books, websites and newsletters out there with marketing advice. It is one of the well-documented parts of running a business, simply because it is one of the most important parts. If you're willing to do the work yourself, do all of the research and sort out the good advice from the bad advice, the only person you'll need is yourself.However, the burdens of running a business can leave one with little time to do all of this additional work. You may be better off having a business partner who is experienced in sales or marketing, or if your budget allows, hiring a professional to handle the marketing aspects of your business. No matter how you do it, the most important thing is to know that it must be done. Not even the best idea will find success if it is poorly marketed or not marketed at all.

Finding marketing advice and information is as easy as searching for marketing tips on your favorite search engine, or looking in the business section of a local bookstore. Whether you choose to do all of the work and research yourself or appoint someone else to do it, be prepared to ensure that your business is being properly marketed. If you don't sell your product, someone else will.

If the cost of a marketing arm is too much this is where business credit can come handy. Most of the time you are able to open up a vendor account and pay on terms. This is possible to do so through the use of business credit. Begin your search online for "strong business credit" through yahoo and google (just like that in quotes).

Ilya Bodner
Small Business Owner
Initial Underwriting Group

Warren Buffet Worries About His Employees' Taxes

2008-02-16T15:20:00.006-05:00

NBC Nightly News interview, featuring Tom Brokaw and Warren Buffett; October 2007. In this interview, the 3rd richest man in the world presents his case that working people are paying too much in taxes compared with wealthy investors like himself.

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EIN, Federal Tax ID & Business Loans

2008-02-16T15:04:00.003-05:00

EIN, Federal Tax ID and Business Credit
One of the primary goals of building business credit is to separate your business credit from your personal credit. If you are operating your business as a sole proprietor, these cannot be separated because all your business paperwork is filed using your social security number. In this case, you are personally liable for risks incurred by your business and you also risk your personal assets against business loans. For you to obtain a business loan based entirely on your business, it must have a formal corporate structure, such as a corporation or limited liability company. All your business information is filed under your Employee Identification Number (EIN), otherwise known as your Federal Tax.

EIN and Applying for Business Loans
It is of the utmost importance that you understand how an EIN is used when applying for a business loan. Of itself, your EIN cannot be used to apply for a loan. An EIN can only be used for business identification purposes and filing Federal taxes. It does not substitute for a social security number on a loan application. The identification number that your business needs to have in order to begin the process of building business credit and obtaining financing is the DUNS Number, through registration with Dun & Bradstreet. This is the only way you will be eligible for any type of business credit without a personal guarantee.

Business Credit and Personal Credit
The Dun & Bradstreet Paydex score is the most important score for your business when it comes to any type of application for business credit or business financing. Dun & Bradstreet will assign a Paydex score to your business that ranges from 1 – 100. A good Paydex score is considered to be 80 and above. There are specific steps that can be taken to improve your business Paydex score. Although your personal credit history is separate from your business credit, once you have registered a corporate structure with the state, have obtained an EIN and a DUNS number, it is beneficial in the long run for you to repair your personal credit while you are building your business credit. Every so often, a lender will insist on a personal guarantee, regardless of your business credit, especially for vehicle and equipment leasing and sometimes for lines of credit.

Building Business Credit

2008-02-07T14:30:00.000-05:00

We are often asked why it is important to build a strong business image and credit. There are two answers to that question. The first and the most obvious answer is that it is important to build strong business credit in order to Secure Business Financing. However, not all businesses require external financing; often entrepreneurs will refer to family and friends for startup capital. This is where the second reason, Emergency Financing takes precedence.

If your business is experiencing strong growth such as a need to expand warehouse space, inventory, or work force, and the financing of such operation is beyond that which is available from friends and family, a strong business image and a strong business credit profile can aide in securing financing with lower rates and quicker approval times.

Begin your search by typing "strong business credit" (just like that in quotes) into google or yahoo. That should give you a head start on the companies that specialize in this field.

Ilya Bodner
Small Business Owner
Initial Underwriting Group

*Breaking Down The Barriers To Small Business Financing*

www.initialunderwriting.org
www.strongbusinesscredit.com

614.231.3519
877.752.4300 FAX

10 Ways Business Lunches will Grow Your Business

2008-02-06T13:30:00.000-05:00

As a small business owner, you might be inclined to think that brown-bagging it in your office at lunchtime while catching up on paperwork is a good idea. It could actually cost your company potential future business. In business, missing opportunities is one of the worst mistakes you can make. The following are 10 ways business lunches can help you grow your small business:

» Face-to-face relationship marketing will create trust in you and your company.

» Luncheon meetings with local business organizations will get you and your products known in the community.

» Frequently, business deals are sealed during informal meetings with clients or associates.

» Employee morale and subsequently, productivity goes up due to lunching out with staff.

» You have the opportunity to network and expand your contacts.

» You can run informal surveys and keep up with the business interests of people in your field.

» A pending sale can actually be closed in a relaxed environment.

» Topics of discussion come up that lead you to information or support that will help your business.

» Investors or lenders are more apt to provide the financial support you need once they get to know you.

» You will increase your database of leads for prospective clients.

“Relationship marketing” is one of the most important public relations activities that you can do as a small business owner. In this marketing model, you reach out to your public to discover their needs and use the information to create suitable products and services. Establishing schedule of lunch meetings with people you contact through your business will have a beneficial effect for everyone included.

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Trump & Kiyosaki on "Failing Forward"

2008-01-29T11:49:00.000-05:00

This is promotional video clip for the latest book, Why We Want You ro Be Rich, authored by entrepreneurs, Donald Trump and Robert Kiyosaki. In the interview, the two billionaires comment on their respect for business owners that have the courgage to make a comeback after failing.

Sometimes an entrepreneur with a great idea can be discouraged by not having the start up financing they need to get their new small business going. Trump and Kiyosaki say that in the face of any obstacle, the most impressive action a business owner can take is to find a way to make it happen, no matter how far down they may have fallen.

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6 Reasons Why You Don't Wannabe a Franchise Owner

2008-01-24T14:32:00.000-05:00

If you need business credit so that you can get a business loan to buy a franchise, consider your options carefully. Yes, there are fantastic advantages to owning a franchise, but on the other hand, consider these 6 points....

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Credit Crunch in 2008: How Do Business Owners Get Loans?

2008-01-17T12:54:00.000-05:00

This year is starting off in a very rough way for many small business owners. Mid-size and large companies are all dropping proposed projects. The credit squeeze is on!

Companies can't get the financing that they were relying on, deals aren't getting done, and the ones that really suffer are the small business owners that rely on the economics of the larger corporations. Citi Bank just reported a $10 billion dollar loss. Other banks are in similar situations. Deals are just not going to be done the same way they were. (By the way, a $10 billion dollar loss is the equivalent to the ENTIRE economy of Iceland, or Jamaica. A $10 billion dollar loss is the equivalent to both the Republic of Congo and the West Bank being wiped out simultaneously.

So what are the small business owners doing to get out of this miserable downward spiral? How do you expand a business? Even hotter is the question on everyone's mind: how do you start a project or a venture? More and more, eyes and ears are turning to business credit. Not only the small business owners desperate for loans, but the financing companies themselves are turning to business credit. Dell Financial, for example, is the largest lender of custom computers to small business owners and they have started a major push in 2008 towards business credit based loans. Dell.com/bizcredit has published education material to help small business owners understand the importance of business credit and how to obtain credit lines under the business name. Other major lending institutions are following Dell's footsteps and are joining alternative financing lenders in business credit based loans. If you are a business owner without a business credit profile, start now! This is the future to all lending, short term and long term.

Begin your search online for a business credit and business credit building service. Search for "strong business credit" (including quotation marks) via Google or Yahoo to find a company that is right for you. Expect to spend around $1,000.

Sincerely,

Ilya Bodner
Small Business Owner
Initial Underwriting Group
*Breaking Down The Barriers To Small Business Financing*
www.initialunderwriting.org
www.strongbusinesscredit.com

The Easiest Way to Organize Your Business Production

2008-01-15T13:33:00.000-05:00

If your small business is in the state of chaos or confusion, it’s not likely that you are producing, selling and making financial progress. In business, “organization” should be used as a verb, not a noun. There are basic steps to get your business out of confusion into a normal state of operation. It may appear over-simplified, but it works.

Start by determining who is in charge of each department.

The task of the person in charge is to sort out the components of the company’s final product that are handled only in his department. He routes the components to the various stations in his department for them to be processed. Once the components are processed, he routes them to the other departments required for the next steps of production.

The person in charge at the end of the production line sends the product to the shipping department to be shipped to the customer, and the accounting department collects the money for the sale.

In your small business, develop a pattern for the components of your product to move through the production line. Remember that it is the product components that move, not the production stations. The production stations remain stable, so that when the product component is ready to move, the station where it goes to next is right where it’s supposed to be. Picture a ball team for a moment. If a particular play is called, but the players are not in position, the ball gets dropped. Product components that flow through stable production stations effectively removes confusion.

FYI, a potential business loan lender will consider your company’s ability to produce and move your products as part of your credit-worthiness.

How to get HIGHER credit lines and More Financing

2008-01-12T16:14:00.000-05:00

Lenders make all financing decisions based on the risk involved. The longevity of the business, location, industry, size of the company, and business credit are just some of the risks that a lender evaluates before writing a business loan. One of the greatest risks considered is available credit.

Looking at a personal credit report one may observe “open lines of credit” being its own category. The same holds true for business credit. Dun & Bradstreet, the largest business credit reporting agency, reports the open credit – otherwise known as availability to additional credit.

The higher the amount of available credit the lower the risk; and the lower the risk the lower the rates. Not only are the rates favorable but also the amount of the business loan. Lenders often jump on the bandwagon (the bandwagon also caused the current crash in the real estate market, but that’s another story). Before a loan is originated the lender may look to the previous decision (credit line extended) and the one before that. ***Of course this is only in the cases where income can support additional financing.

Having a business credit profile which reports all of the available lines of credit is becoming more important each day. For several hundred dollars a professional service can do the job right; a small price to pay for a great rewards. Begin your search for a strong business credit mentor by going to google or yahoo and typing in “strong business credit” (just like that in quotes) to find the company right for you.

Sincerely,

Ilya Bodner
Small Business Owner
Initial Underwriting Group
*Breaking Down The Barriers To Small Business Financing*
www.initialunderwriting.org
www.strongbusinesscredit.com

Small Business Owner Personality Quiz

2008-01-10T21:43:00.000-05:00

According to the Missouri Business Development Program, there are specific
personal characteristics necessary for starting a small business. Considering
where you stand in relation to these charateristics bodes for some serious
thought. These qualities after all, can be what makes or breaks the success of
your business.

The following questions are recommended to review as a potential small business owner:

Are you a leader?
Do you like to make your own decisions?
Do others turn to you for help in making decisions?
Do you enjoy competition?
Do you have will power and self-discipline?
Do you plan ahead?
Do you like people?
Do you get along well with others?

These are questions that every small business could consider at whatever point they are in their business. Practising this type self-analysis will help you determine where you can improve as a small business owner.

Hard Money Lenders and Alternative Financing

2008-01-04T18:17:00.001-05:00

Alternative financing is offered by private lenders and/or equity firms. The people and organizations that offer these loans are referred to, by some business owners, as hard-money lenders. Hard-money loans are typically offered to borrowers who do not qualify for traditional mortgages and financing. They may also be employed by people or small businesses that are seeking to close quickly, or who are unable to provide sufficient information. Alternative financing is generally more willing to take higher risks, and therefore charge higher interest rates.
Some advantages of taking a hard money loan include the ability to negotiate interest rates and other terms. Closing costs may be lower and loan insurance avoided entirely. In addition, the closing time is generally shorter because the borrower does not have to deal with delays due to paperwork approvals.

Sources of commercial hard-money loans are usually private individuals, mortgage companies, federal banks and SBA lenders. There are pros and cons to each type of individual lender. We recommend that you do your own extensive research on as many different types of lenders as possible, prior to making your final decision.

Begin your search online by looking for “strong business credit” (just like that in quotes) through google or yahoo. This will help you find companies that specialize in alternative financing based off of business credit.

Sincerely,

Ilya Bodner
Small Business Owner
Initial Underwriting Group

EIN, Employees and Business Loans

2008-01-03T18:57:00.000-05:00

All small businesses seeking business financing need an Employer Identification Number (EIN). This is a requirement of the Internal Revenue Service(IRS) and Dun and Bradstreet (D&B). A small business needs to register with Dun & Bradstreet to obtain a business credit score called a "Paydex" score before a lender will consider it for a business loan. An Employer Identification Number (EIN) is also known as a Federal Tax Identification Number, and is used to identify a business entity. Small businesses must obtain an EIN from the
IRS.

The IRS, D&B and subsequently business loan lenders want to know the status of the employees working for your business. A general guideline for determining who is considered an employee is this: anyone who performs services for your business and you can control what will they do and how they do it. This is in effect even when you give the employee the authority to make "management" decisions. Ultimately, you have the right to control the details of how the services are performed.

Once you have an EIN, and hire employees, Keep all records of employment taxes filed through your EIN for at least four years. Keep your payroll records up to date for your business throughout the year. This will help you keep track of deductible expenses when you are preparing your tax returns for the IRS. Your diligence in managing your business taxes associated with your EIN will impact your credit-worthiness when you apply for a small business loan.

Sufficient Funding - The First Business Startup Challenge

2007-12-28T13:56:00.000-05:00

Starting the business is the hardest barrier to overcome in the entire business cycle. Lack of confidence, lack of experience, and lack of control are just some of the uncertainties that small business owner face prior to the deployment date.

According to Dun & Bradstreet, the largest credit reporting agency, most businesses fail in the first 3 years. The primary reason is not any of the uncertainties listed above – it is the lack of funding. Most fail to properly fund the business. That issue has a deeper origin. Using savings or SBA loans business owners start a business but that alone is not enough. To stay afloat the small business owner must start out building strong business credit, or at least start out using the business credit established day one.

Ilya Bodner
Small Business Owner
Initial Underwriting Group

*Breaking Down The Barriers To Small Business Financing*

Entrepreneurial Seizure

2007-12-28T10:38:00.000-05:00

Entrepreneurial seizure, as defined by E-Myth's Hasan Luongo, is a phrase that describes the belief that because an employee understands the technical work of a small business, he or she is qualified to run a small business that does that particular kind of work. For example, a plumber who's been working for 20 years who decides that he no longer wants to work for someone else, and wants to go into business for himself. As anyone who runs a small business quickly finds out, there is a lot more to doing the work of a small business owner than knowing the technical details of how to do the job. Part of small business expansion is expanding business knowledge. While previous experience in the field can be one of the greatest attributes you can have, you should never rely only on what you already know to influence your decision to start your own small business. Not only do you stand to lose your job if you quit, thinking you can run things better our way, but you may lose a lot of money and time in the process. What is truly important in deciding whether to start your own business is what you learn, or are willing to learn, in order to do it. Businesses don't just materialize out of nowhere - they are formed by individuals with the knowledge, tools and motivation to persevere. Someone with no experience as a plumber but a lot of experience running a small business can start a successful plumbing business; however, someone with a lot of experience as a plumber and no experience as a business owner cannot necessarily start a small business on his own. Preparations required before starting your small business or considering business expansion are things like research, legal advice, paperwork, developing a solid business plan, securing your financing and, most importantly, asking yourself if you are ready and able to run the business. Don't think about being a plumber, think about owning a business. It's easy to get lost in the complexity of it all, but with hard work, the right people backing you up, persistence and patience, you can apply your job experience to your business. Your experience in the field your business serves should be used to enhance your small business, not to run it.

Begin by searching the web for a professional mentoring service via google or yahoo. Start out by searching for "strong business credit" (just like that in quotes) to see what is out there.

Sincerely,

Ilya Bodner
Small Business Owner
Initial Underwriting Group
*Breaking Down The Barriers To Small Business Financing*

Thinking Globally while Acting Locally

2007-12-26T20:56:00.000-05:00

When it comes to the distribution of a product or providing a service it is always wise to incorporate ideas and trends evident in the global economy. Global logistical models are sometimes more efficient; when applied locally they can help us channel goods to our clients more effectively, which, as any business owner knows, is paramount. From the local restaurant owner looking to get the best quality food at the best possible price to the operations of a local steel mill, the application of global concepts and channels is recommended. One should explore the opportunities that exist in booming markets such as China, India, and Latin America. These markets will offer the adept business owner an edge over his competitors by allowing him to buy goods more inexpensively and in some cases will give him access to new products.

Business owners are reminded never to forget the fundamental requirements. A business must be incorporated, have a Tax-ID, and it is recommended that it has a business credit rating. Dun & Bradstreet is the largest credit reporting agency with centers all over Asia and now Europe as well. Thus, it is recommended that businesses track credit through DNB. As always it is recommended to search for "strong business credit" (just like that in quotes) to find companies which can assist in obtaining the minimal requirements. However, if a business owner chooses to undertake the tasks independently, then he should consult an attorney or another professional service.

-- Sincerely,
Ilya Bodner
Small Business Owner
Initial Underwriting Group
*Breaking Down The Barriers To Small Business Financing*
http://www.initialunderwriting.org/
http://www.strongbusinesscredit.com/
614.231.3519
877.752.4300 FAX

Which Marketing Works, Attract More Customers at a Lower Cost

2007-12-26T08:46:00.000-05:00

How does a small business owner know which advertising efforts work? The answer to this question saves money for the small business owner. Every time a customer purchases a product it is because of some sort of advertisement. The advertisement could be the job well done (quality of the product), a referral(word of mouth), or paid-for marketing (newspaper, radio, mailer, etc). A successful business owner tracks what works and quickly capitalizing on them. Whether a newspaper ad or a small billboard sign, whatever brings the sale in the doors is where most energy should be concentrated on.
So far this is very straight forward– find out how the clients hears about your business and use that tactic over and over. The challenge is properly identifying the effective source. For instance, if you own a store and someone happens to stroll in to purchase a medium price ranged product you may have no clue of what drove the client to your store. At this point all it takes is a question “how did you hear about us?”, and that is it. There is no need for clever surveys or feedback questioners, just ask how the client heard about the business. Keep track of the answers and at the end of each week draw your conclusions.

A tour guide one man shop has recently implemented this strategy and increased his monthly sales while lowering his costs. At the end of each sale as he signed up groups to take a day tour he asked how they have heard about his company. Throughout the months he kept on hearing that the local guide book was the main reason why people came to him. Within months he dropped the other forms of advertisement, moved his office to a small location with cheaper rent, and continued to take on more groups on grander trips. Greater profits for him were possible by simply asking “how did you hear about us?”

Finding out which marketing works and which doesn’t is only a portion of a business profile. Business credit, legal requirements, strategic tactics and basic fundamentals are other areas that must be established as well. It is recommended to search on Google or Yahoo for “strong business credit” (just like that in quotes) for more information about building a business profile.

Sincerely,

Ilya Bodner
Small Business Owner
Initial Underwriting Group
*Breaking Down The Barriers To Small Business Financing*
www.initialunderwriting.org
www.strongbusinesscredit.com

Outsourcing Is Important To Each and Every Small Business

2007-12-26T08:39:00.000-05:00

Outsourcing is critical for making money. Most small business owners are unable to identify the parts that need to be outsourced and thus suffer financially. Recently, a small business owner from Austin Texas had an interesting revelation that is applicable to all other businesses.

Let’s call the small business owner Mr. B to remain confidential. Mr. B has a custom motorcycle trailer shop in Texas. For $289 Mr. B manufactured a custom trailer for racing bikes and for over 2 years he did it himself. Along with many other duties Mr. B did his own accounting, went scouting for more clients, and built out the trailers himself. This year he decided to outsource the manufacturing. He was skeptical at first, for many reasons. Primarily Mr. B thought that it would be too hard to work with a third party and that it would have to be a large bulk order which he could not afford. All small business owners experience this type of stage-fright. During the slow season he finally decided to take the leap and find a source. Turned out it was not as hard as he thought and to his surprise things worked. The key for Mr. B was his business credit. He was able to use his newly established business credit profile to open an account with the third party vendor. Dozens of trailers were ordered as they were needed and delayed payback to the manufacturer was tolerated. The cost of the trailers has gone down to $249 while the profit margins have not slipped. It turns out that everyone benefited from the discovery, both the clients and the small business owner. Mr. B has the time to focus on other parts of his business due to the manufacturing move out.

Outsourcing is much recommended for evident reasons. For more information about business credit it is suggested to contact a professional service, start by searching for “strong business credit” (just like that in quotes) through google or yahoo. Remember that has he done this earlier he could have had more satisfied clients and more likely quicker growth.

Sincerely,

Ilya Bodner
Small Business Owner
Initial Underwriting Group
*Breaking Down The Barriers To Small Business Financing*
www.initialunderwriting.org
www.strongbusinesscredit.com

How Social Media Marketing Helps You Get a Business Loan

2007-12-18T13:56:00.000-05:00

If you have not heard about Social Media Marketing (SMM), then you are missing one of the greatest marketing opportunities on the planet right now. This type of marketing takes a chunk of the power away from the search engine monopolies, and returns it to the hands of people like you and I. We rely on the internet to do business, and now SMM gives us the right to add our vote to website content that we like.

All small business owners seeking small business loans or any form of business credit or financing absolutely must use this marketing strategy. Why? To increase sales, of course! No matter how valid your need is for financing, a lender will shy away from handling your loan if your business does not show growth through increasing sales. After all, how can you make your monthly loan payments if you don’t have money coming in?

Social media voting is a sure-fire way to increase the amount of qualified traffic to your website. Here’s how to do it:

Write an exciting/interesting/attention-grabbing article, relevant to your business and post it on your website.
Get a username & password for popular social media sites such as Stumbleupon.com or Digg.com.
Submit links to your article on the social media sites.
Send the new link on the social media site to everyone in your network with a request for them to vote.
Add a bookmark button (get 1 from Addthis.com) and place it on the original article on your site.
Get everyone in your network to go to the article on your site and click on the bookmark button to vote.