Why & How to Build Business Credit

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www.Cash4Impact.com, narrated Powerpoint presentation, Why and How to Build Business Credit, discusses why business owners should completely separate their personal and business credit. It then explains how to build the business credit. info@tocafamilyservices.com, 404-642-0509

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  • Why & How to Build Business Credit

    1. 1. Building Business Credit Separate Yourself from Your Business: Build Business Credit 1. Approach 2. The Whys 3. Example 4. The Hows
    2. 2. Financing Perspective Innovative Approach <ul><li>View Your Business As </li></ul><ul><li>A marketable asset </li></ul><ul><li>A source of long-term wealth </li></ul><ul><li>A creator of jobs </li></ul><ul><li>A source of investment income </li></ul><ul><ul><li>Yourself </li></ul></ul><ul><ul><li>Others who believe </li></ul></ul>www.Cash4Impact.com
    3. 3. Business Cash Flow & Business Credit <ul><li>Cash flow is lifeblood of business. Cash comes from: </li></ul><ul><ul><ul><li>Operations (sales – expenses) </li></ul></ul></ul><ul><ul><ul><li>Investing (selling assets) </li></ul></ul></ul><ul><ul><ul><li>Financing (banks, investors, etc.) </li></ul></ul></ul><ul><ul><li>Need credit for most financing </li></ul></ul>
    4. 4. Example I <ul><li>Scenario: </li></ul><ul><li>Your business was doing well. </li></ul><ul><li>Largest customer filed for bankruptcy. </li></ul><ul><li>Cash flow plummets. </li></ul><ul><li>Personal guarantees called upon. </li></ul><ul><li>Lose salary from business. </li></ul>www.Cash4Impact.com
    5. 5. Example II <ul><li>Scenario (less serious): </li></ul><ul><li>Company encountered recession-related difficulties. </li></ul><ul><li>Want to negotiate better terms. </li></ul><ul><li>Business sole guarantor? Negotiate. Owner also guarantor? Negotiation less likely. </li></ul><ul><li>(Remember, strong banking relationships ALWAYS help.) </li></ul>www.Cash4Impact.com
    6. 6. The Whys Why Build Business Credit <ul><li>Position your company as a standalone, saleable asset independent of you as owner. </li></ul><ul><li>Shelter your personal assets from a business downturn, failure, or bankruptcy. </li></ul><ul><li>Stronger negotiating position with banks. </li></ul><ul><li>Business credit inquiries, etc. can drag down owner’s personal credit profile. </li></ul>www.Cash4Impact.com
    7. 7. Wells Fargo Statement <ul><li>“ The longer you delay establishing business credit, the longer you delay taking advantage of business loans.” </li></ul>www.Cash4Impact.com
    8. 8. Seven Steps to Building Credit The Hows <ul><ul><li>Register with D&B (Dun & Bradstreet). </li></ul></ul><ul><ul><li>Obtain credit cards from Staples, Office Depot, Home Depot, etc. </li></ul></ul><ul><ul><ul><li>Use them regularly and wisely. </li></ul></ul></ul><ul><ul><li>Ensure your vendors & suppliers report your credit line to D&B. </li></ul></ul><ul><ul><ul><li>If you don’t have a credit line, get one. </li></ul></ul></ul>www.Cash4Impact.com
    9. 9. Seven Steps to Building Credit The Hows <ul><li>Make sure ALL business loans are under the business’ tax id. </li></ul><ul><ul><ul><li>Even loans based on your credit or guaranteed by the owner. </li></ul></ul></ul><ul><li>Check D&B report quarterly, but no less than annually. </li></ul>www.Cash4Impact.com
    10. 10. Seven Steps to Building Credit The Hows <ul><li>Pay suppliers within specified terms. </li></ul><ul><ul><ul><li>Make sure suppliers/vendors report to D&B and Experian. </li></ul></ul></ul><ul><ul><ul><li>If they don’t report, request a Letter of Payment History and submit to D&B. </li></ul></ul></ul><ul><li>Provide reviewed or audited financial statements to D&B. </li></ul>www.Cash4Impact.com
    11. 11. <ul><li>Additional Information: </li></ul><ul><li>Solving the Capital Equation: Financing Solutions for Small Businesses </li></ul><ul><li>Available on Amazon </li></ul>Getting Started
    12. 12. <ul><li>Thank You! </li></ul>Contact Us Tiffany C. Wright Follow my blog, Small Business Finance Forum: http://www.Cash4Impact.com The Resourceful CEO Toca Family Business Services

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