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Business Credit Cards – Financing Made Easy

Admin — Mon, 11 Jan 2010 14:47:27 +0000

It can be extremely difficult to finance a business, particularly when you are just starting out. Most of the time, traditional methods of funding are not overly excited about giving you money to start a new business because it’s a fact that over 80% of businesses fail within their first year of operation!

If you are hoping to start a business out of your home, you may have reduced costs as compared to financing a retail establishment, but you will still need some form of start up capital or access to money to get things rolling. Have you considered using a credit card to finance your business?

Many businesses have been completely financed with credit cards. It is best if you designate one card as your business credit card; and then use that for anything you can’t pay out of pocket for. Remember to keep up with your payments and pay as much of your balance as possible each time you get a statement in order to keep (or get) a strong credit history that will make it easier for you to get additional financing in the future- for both personal and business purposes.

Why would anyone want to use a credit card to finance their business? There are a number of advantages- first of all, the money is available when you want it once you get the card. You don’t have to apply for a loan and wait for approval; then wait for the funds to be available. Instead, you just take your credit card out of your wallet and swipe it when you need the extra cash flow. Another way that using a business credit card can speed things up for you is when dealing with vendors. Often, if you work with a supply vendor, you have to supply them with check payment forms as a new business. If you choose to pay with credit card, you just give them the details of your card one time, and then they can make each of your purchases automatically paid for using that card information.

Another advantage of using a credit card to finance business purchases is if you know what your grace period is (the time you are allowed to make payments interest free) and you know when your billing date is, you can make purchases right before the billing date and give yourself 25 days (or whatever your grace period is) to pay it back without paying interest or finance fees. This saves considerably and if you were to use a loan, the interest is included in the amount you pay back so you never get the option of paying it off without interest.

Another reason many people enjoy using a credit card as business financing is because of the option to select from rewards programs that earn you items or cash back from all of your purchases. Rewards programs include things from airline miles to a percentage of each purchase returned to your card, to the ability to purchase merchandise from the rewards points you’ve earned.

Finally, when you buy items on credit card, you are protected. Sometimes you receive an item that is damaged, or not what you expected. Sometimes, you could order something and never actually receive it. Most credit cards will cover you against these losses and offer you protection you wouldn’t otherwise have if you paid with cash or check.

Credit cards may not be the ideal way to finance your business expenses, but if you have difficulty obtaining a business loan, this is an alternative option for business financing that provides you with access to additional cash when needed and a variety of benefits that you wouldn’t otherwise have.

Factoring Financing. The Easy Way to Finance your Business

Admin — Sun, 06 Dec 2009 02:49:17 +0000

Waiting up to 60 days to get your invoices paid can really be a major source of stress for business owners. This can be especially painful if you have to pay rent, suppliers and meet payroll. This is even more painful when most of your money is tied up in slow paying invoices. Having money tied up in slow paying invoices can also prevent you from capitalizing on new opportunities. Why? Because few business owners can deliver large orders to new clients and then underwrite the transaction for up to 60 days.

If you cannot afford to wait to get paid by your clients there is a solution that can provide you with the necessary financing. It’s called factoring financing. With factoring you can accelerate the payment for your invoices and get funding to pay rent, pay your suppliers, meet payroll and take on new projects.

As opposed to bank financing, invoice factoring is easy to qualify for. The main requirement is that you have invoices from mid size and large commercial customers. Most factoring companies are comfortable working with new companies – even if they have no hard collateral – provided that they have good invoices and a solid business plan.

Another advantage of factoring is that your financing is not fixed on any specific amount, like a loan or line of credit. You can usually factor as many invoices as you can deliver on. As a tool, factoring allows you to tap into the power of your greatest asset – your roster of credit worthy customers. It allows you to grow and capitalize on new opportunities, while circumventing the restrictions and challenges of obtaining regular bank financing.

By: Marco Terry

Small Business Finance the Smart Way

Admin — Fri, 27 Nov 2009 06:04:12 +0000

Are you a small business owner? If you are, you’ll know that running a small business is one of the most difficult things you’ll ever do in your life. You’re the company’s spokesperson, owner, founder, advertiser and investor. You are its inspiration. It is your livelihood and your passion. And like all passions it is all consuming.

It has you crunching numbers when you should be sleeping. It has you sketching out ideas on napkins in restaurants when you should be eating. But like any love affair the irritations are worth it. You know that almost nothing in your life can match the highs that your business gives you. So stick with it! Give your business all your heart and soul. But be sensible when it comes to your cash.

Business Finance.

Starting your business can be incredibly costly. Buying the machinery, renting the premises, purchasing the advertising space… well you get the picture, you’ve been there. You are also probably aware that the cost of kicking your business into life is so high it can affect your businesses ability to grow later on down the line.

You’ve established yourself as a great business; you know you have the ability to expand and to grow. But you just don’t have the cash to do it. But what is the best way to get that much needed cash injection? You don’t want to be taken for a ride. This is why you need to know about business finance.

Small Business Cost.

The first thing to do when you start investigating small business finance is to look carefully at what you want to achieve. Having clear goals is one of the basic rules of success in business. If you are going to borrow money to support your business you must have a clear aim in mind. That way you can easily track the success of any investment and see how much, making your small business grow will cost. So, determine what you want. Are you purchasing assets, such as land or machinery, or stock? Or are you looking to improve your market position through advertising, or expand into new markets? Whatever you’re doing be clear about your goals.

Small Business Finance.

There are two types of small business finance available to you. The first is the more traditional and common form, known as ‘debt finance’. This involves your company lending money from a financial institution, usually your bank. There are up sides to this deal, you get your cash and you keep all your business. You do have to pay more back than you borrowed in the first place, with the onus on you to repay as soon as possible.

However, if you have clearly identified a use for your money this should present no problem to you and allow you to expand quickly. This is why it is the route taken by the majority of small businesses. If you fail to pay back the money you have borrowed however the consequences are severe, as part of the agreement will involve collateral. Often, this could be your house.

A less common option is that of ‘equity finance’. Ever seen the TV show Dragon’s Den? Then you’ll know what I’m talking about. Equity finance is when an investor gives you the cash you need and in return you give him a share, or a stake of your business. As the investor has no assurances, unlike the bank, he or she requires a much greater pay off if things go well. They want some of those profits! However if things don’t work out, you won’t be sleeping in the streets!

Your Future.

So there are plenty of ways you can offset your small business cost. Small business finance is easy to get if you pitch correctly and your business is heading in the right direction. Whichever mode of business finance you choose make sure you keep following the dream and your passion might end up making you millions.

By: George Butler