One Major Mistake Business Owners Make When

Funding Their Business

The Panelists

Seth PerlmanBusiness Credit ManagerAnderson Advisors LLCAndersonAdvisors.com

Corey PiercePresident & CTOLevel4Finance LLCLevel4Finance.com

One Major Mistake

One Major Mistake Business Owners Make When Funding Their Business is co-mingling their personal credit and finances with their business credit and finances.

Let’s take a look a few examples of this:

Example #1

• You start your business.• You open a business bank account.• You collect whatever resources you can.• You deposit money into that account.

BIG MISTAKE!

Here Is A Better Way

• You start your business.• You open a business bank account.• You open a certificate of deposit.• You use the CD to secure a business loan.• You get the same amount of cash to work with.

Why Do That?

When your business loan reports it does not report as secured. It does alert other potential business lenders that your business was worthy of getting approval for a bank business loan.

Your business is now on other business lenders radar.

You must check with your bank to see if they will do this. Then you have to make sure that your bank will report your new business loan to the business credit reporting agencies. Inside the system we provide you with a list of banks that do both.

Example #2

You personally have good credit scores.

You believe you can use your scores to secure business financing. In many cases you are correct.

But you haven’t taken the time to know if your business is in lender compliance.

Instead you just apply.

Unfortunately You Get Declined.

You got declined because the address you provided was a residential address and you didn’t know that business lender declines all home based businesses.

By not being ready to apply you have now damaged both your personal credit and business credit.

The solution to this is to know that you and your business are truly pre-qualified and ready to apply before you actually apply.

Example #3

You are operating your business as a sole proprietor or partnership.

While these are viable forms of business, you are “in” business but you are not “a” business.

This means is that you do not have a business entity and everything you do in that business comes back to you personally.

Personal Liability or Lack Thereof

Not having an entity means any debt or liability the business might have you are now personally liable for, which is a major risk for your personal credit and finances.

The solution is to have a separate business legal entity that can be responsible for the business liabilities and that can develop its own credit scores that are separate from you personally.

Business Finance Pre-Qualification Test

Let’s take a moment to look at how our business finance pre-qualification test and business finance system can help you to get ready to apply for financing, build a business credit asset, and secure business financing.

The first step is to take the business finance pre-qualification test. This will show you where your business stands right now.

Completing the test provides you with your pre-qualification results and gives you a User ID and Password to the system.

Your Test Results

This is what the test results page looks like.

Business Finance SystemWhen you login you will start at this dashboard view. The dashboard has panels which represent the main sections of the Business Finance System.

Business Credit Reports Panel

This panel provides a quick summary of your existing Experian Business Credit Report status. From here you can see if your business currently has an Experian business credit file, how many trade-lines are reporting a credit history, and if your business already has a credit score.

Business Finance Progress Panel

Here you to see where you are in the system, what you have completed, and what you have left. Clicking this button is the place to start and will always take you back to where you left off.

Business Finance Pre-Qualification Test DataThis panel allows you to view and update your business finance pre-qualification test. So as things change in this system you can update your test answers which will update your available business finance programs.

Accessing The Finance ProgramsThe system begins with a review of the available finance programs. It walks you through each program. If you already pre-qualify, you can submit your applications. If you do not yet pre-qualify, this lets you see what it takes to pre-qualify for each program.

Finance Program Tracking

This panel tracks the programs you have qualified for and applied for. You will see the qualifications for each funding program with a detailed explanation of their features and benefits. You can see the status of your applications and if there are action items you need to address.

Lender Compliance Panel

We track if your business is in lender compliance. If your business is not yet in compliance, that means there are items still need to be addressed.

Example of Lender Compliance Item

Most business lenders will not approve home based businesses. The system checks to see if the address you provided is listed by the U.S. Postal Service as being a business or residential location.

If it is residential then the lender’s computers will most likely decline your application even if you are credit qualified. There is a simple and inexpensive fix for that.

Nationwide Virtual Office

• Provides a U.S. Postal Service business listed address• Can provide a local (your area code) business phone• Phone number verifies as “business” in the FCC database• Mailing forwarding service • Phone forwarding service• Addresses available in all 50 States

Using a residential address, PO box, cell phone, or residential phone for your business will most likely result in you getting declined. The nationwide virtual office program solves that.

Other Lender Compliance Items

• Entity in good standing• FCC business registered phone number• Business email address• National 411 directory assistance listing• Active Federal EIN• Exact business legal name• Business web site

Knowing Who Reports

• Estimated over 500,000 companies are extending credit• Less than 5,000 report business credit payment history• Many report only in the event of late payment or default• Know who reports and what they require before you apply

We maintain a database of lenders, credit card providers, vendor lines of credit, equipment lessors, banks, credit unions, and more. If they report or not, who they report to, and what their approval guidelines are.

Personal & Business Credit Not The Same

With your personal credit you can pay every bill you have 29 days late and still have great personal credit scores.

With business credit every day counts. They track if you pay how many days you pay either early or late. Pay all your bills 10 days early and your scores go up. Pay them all 10 days late and scores go down.

Goal of the system is to help you obtain and maintain business credit scores of around 80.

Maintaining Your Entity

• To maintain entity protection, treat it as a business.• Stay current with annual corporate compliance filings.• Keep the required meeting minutes and resolutions.• Remember to file all foreign entity status requirements

It is easier to have someone on your team that is responsible for making sure that all of the required filings are completed to maintain the protections that your business entity provides.

Free Consultation Services

• New business structure, having the right entity type• Bookkeeping, tax planning, and tax filing services• Update to date, credible, third party prepared financials• Provide a reporting business credit trade line account

Having the combination of the business finance pre-qualification test, the business finance system, along with the Anderson consultation services, provides strong tools for your business.

Business Credit Asset

One of the main goals of our system is to build a business credit asset that you can use over and over again, not only to access credit and financing, but to also enhance the value of your business.

How? Well, unlike your personal credit, which goes with you when you leave your business, your business credit asset remains attached only to your business.

Your business having its own strong business credit scores creates an asset. This asset is valuable because it can be transferred to the new owners and is immediately available for their use.

Business Credit Asset Section You are shown the right way to set up your business credit profiles with Experian Business Information Services, Dun & Bradstreet, and Equifax Business, and how to manage and protect your business credit profiles.

Business Credit Building

Building strong business credit scores is all about having reporting trade lines that you use regularly and that you pay on time.

To optimize your business credit scores your business will need at least 10 positive reporting trade lines which show a pattern of month in and month out usage with good payment histories.

The Business Finance system maintains the largest database of its kind for obtaining vendor credit lines and business credit cards. Included with each provider, is what they require to extend credit terms to your business and which business credit agencies they report to.

Accessing Credit Providers

Here you have access to the largest list of available vendor credit lines and business credit cards, complete with what they require for approval and which business credit agency they report to.

Your Virtual & Live AdvisorsThroughout the system you have a virtual advisor that provides detailed instructions for the particular section or page you are on and covers the most common questions that arise.

The system also has live advisors that are available to assist with any questions you have about finance programs, lender compliance, building your business credit asset, & managing your credit providers.

What To Do Now?

Those of you who complete the Business Finance Qualification Test will receive a free trial of the Business Finance System.

If you have questions and would like a free business finance and credit consultation before you take the pre-qualification test please call 800-561-5854.

Now let’s get your questions answered …

Question & Answer Part of Webinar

• Take the free Business Finance Qualification test • Get a free trial of the Business Finance System.• Receive a free small business consultation • Call 800-561-5854 before or after you take the test.

• Get all your business finance, credit, structure, and planning questions answered … it doesn’t get easier than that.