Lideresm Business

Much like a real estate brokerage, a loan brokerage can assist you in securing a business line of credit. These firms, much like any other type of brokerage, receive a fee for securing a business LOC on your behalf. However, like any industry, there are some unscrupulous people that work in this industry. It is important to note that you should avoid any loan brokerage that requires excessive fees before attempting to secure credit for your business. While it is not unreasonable to have some upfront fees before providing you with this service, you should always know how these fees will be used in conjunction with securing you with a business line of credit. When dealing with a loan brokerage you should make sure that any upfront fees are for acquiring credit reports or producing a business plan that will be used to show to banks and finance companies. Additionally, you should always verify the legitimacy of a loan brokerage by checking not only with your local Better Business Bureau but also with your state’s banking/finance regulatory agency. Please note that not every state requires that loan brokerage firms carry a specific license in order to render this service.

The fees for firms that specialize in securing business LOC can vary significantly, but they are typically on par of those with mortgage brokerage firms. However, since this is a specialized type of finance, the fees (on a percentage of the loan/credit amount basis) may be slightly higher as there is significantly more work to do than if they were securing you with a mortgage. As with any brokerage firm, the broker does not always work in your best interest. It is important to remember that the more that you pay for a credit line or loan – the more your broker is compensated. However, the primary benefit of working with a loan brokerage is that that usually have hundreds, if not thousands, of contacts in the small business financing industry. They also often have personal relationships with banks and bankers that specifically cater to small business financing needs. As such, they can very quickly introduce you to a number of interested lenders that may be able to provide you with proposals for a business LOC very quickly.

Loan brokerages can also be an invaluable source of advice when it comes to organizing the paperwork involved with securing business loans or other types of business credit. This is especially true if you are applying for an SBA backed loan as these programs have substantial and complex documents involved.

As discussed in our previous article, we discussed the usage of a business loan and how you ultimately repay your lender for providing you with lump sum financing. In this article, we are going to focus on the mechanics of using a business line of credit. This was touched on previous in our first article that showcased the pros and cons of using a business line of credit versus a traditional business loan.

Again, a business line of credit operates very similarly to that of a large credit card. You are often provided with checks from which to draw down the principal. With a business LOC you are typically only required to pay interest on the outstanding principal balance due. Business lines of credit operate on a finite timeline, and more likely than not, you will be required to make regular principal payments or the LOC will convert to a standard loan after the term of the credit facility is complete.

As such, you can calculate your anticipated payments at the close of the credit facility term. This can be simply done by knowing what the interest rate will be on the outstanding principal balance. BusinessLOC. com has developed an expansive number of MS Excel spreadsheets that you can use to determine the monthly payment that you will owe on the credit line (a monthly basis), as well as what the payments will be if the credit line is converted to a standard business loan at the end of the facility’s term. As always, if you should have any questions regarding the mechanics of a business line of credit or any other type of business credit facility then you should consult with a certified public accountant or business advisor to assist you in this process.

In most instances, you will be required to put up significant collateral in order to obtain a business loc. This is because banks, finance companies, and private lenders do not want to take the risk of losing money. In the event that you do not repay the credit facility, the lender can take the collateral and sell it in order to recoup their investment. This is almost identical to the recoupment principles of taking out a mortgage.

If you are a startup business, you can acquire a business loc by using property that you already own to secure the credit line. This would be similar to a home equity line of credit. In many startup situations, the primary residence is used as the securing collateral. The alternative to this is method is if you have substantial assets or credit. In this case you can apply for an unsecured business loc. Again, you will need substantial assets and an extensive credit history to acquire an unsecured credit line.

In the event that you are an established small or medium sized business, you can use the assets held by the business to secure the credit facility. These assets can include accounts receivable, owned real estate, equipment, or the predictable income from your credit card acceptances. In lieu of tangible assets, you can use the highly predictable cash flows generated by your business to secure a business loc. However, in order to accomplish this – you must have an extensive business history that shows continued profitability and a positive cash flow over a number of years (usually the minimum is three years for this type of credit line).

If your business still does not have a merchant account that allows you to offer full credit card services, you are turning your back on profits. Just take a look at all of your competitors. All of those that pose serious competition accept credit card payments. Those that do not have credit card services do not have great sales figures to show, either. Even statistics point to the fact that companies that have credit card services earn much more than companies that do not have credit card services. The average credit card sale is $40 while the average cash sale is only $9. That means you are losing potentially $31 per sale.

You may also be spending more by accepting only cash and check payments in your business. The processing of cash and checks has been found to be more costly, requiring more manpower in handling. Studies have shown that the average processing cost of credit card payments is only 2. 7% of a transaction while the average processing cost of checks is 4% of a transaction and the average processing cost of cash is 4. 8% of a transaction. Once again, you are leaking profits by refusing to accept credit card payments.

So how do you accept credit card payments in your business? This is where credit card services come in. The old route is to apply for a merchant account in a bank. You will then have to lease the software and equipment necessary to actually process payments and send the data to your account. If you want to accept credit card payments online, you need to apply to a payment gateway that allows real time credit card authorization for online transactions. You should ensure that your payment gateway is compatible with the bank or financial institution where you have your merchant account, and with the software and equipment you have leased.

In choosing the bank or financial institution for your merchant account, consider their expertise in combating fraud and reducing chargebacks. Also make sure that they are experienced in handling merchant accounts with online transactions.

If you are a small business owner, stick to a bank or financial institution that caters to small businesses rather than large companies. You may be able to get better rates and packages designed for your specific niche.

There are options for credit card services that offer everything you need in one easy package. You will not have to deal with various entities or go through various procedures. Often, these options also have added benefits, among them, quick reporting on your credit card sales figures. They may also offer interest on your credit card sales income, even up to money market rates.

One very important feature of your credit card services that you may not know of is that it can automatically qualify you to avail of small business loans. Once you have established a record of sales through credit, most credit card services will allow you to make cash advances that are practically like getting previously approved small business loans without having to put up any required collateral. The credit card services consider your future income through credit card sales as your collateral. This can go a long way in further growing your business.

Payment will not be a problem, either. For as long as you have sales through credit payments, you automatically get to pay your small business loans. It does not matter how much your sales are. Your payments are automatically deducted as a percentage of your sales. You are always covered.

Now do you still need further convincing on the benefits of credit card services for your business?

What Do You Think A Business Card Is For?

The use of business cards, or calling cards as they were more popularly known, is still widely prevalent today, even in this age of electronic communications. Technologies of instant communications such as Bluetooth and infrared connectivity are easier and much handier ways of sending and receiving data and information, including those contained in a business card. Yet people —and particularly businessmen— still carry around small stacks of business cards, giving them away at every chance they get and at the slightest provocation. Don’t ever tell a businessman you’ll call and he will give you his card, faster than you can say “Jack Robinson”, whoever he is, regardless of whether he has given you one earlier.

This only proves business cards still play a vital role in business or even everyday life, because even those not in business, such as students, have calling cards in their names. Why so? A number of reasons have been advanced as to the business card’s functions, and they range from as a source of personal pride to a business tool.

The functions of a business card

As a business advertising tool. A business card will normally contain the owner’s name, form or list of business or service rendered, phone or contact number/s, and some sort of catchphrase or slogan for the business. In this way the holder will immediately see in the card if the card owner is the appropriate solution to his immediate needs. So actually the card acts as a kind of ‘sleeper’ or inactive advertising for the owner, accessed when needed.

As a social link. Many people accept other people’s business cards and promptly forget both the card and the person right afterwards. Then the card is remembered when the holder needs to contact the card owner socially, and so the card is dredged up from the dustbin of ‘where-did-I-place-it’ questions. Or, you may not care what the guy sells, but he is so hunky…

As a travelling reference. If you know a friend who requires his boat engine serviced and you bump into someone who does that, you may wish to request his card to pass to your friend, who might later pass it on to another with similar needs. Without the card, neither potential customer will remember the boat engine service provider when the service is required. With it, the card owner may well capture a whole boating association.

As a personal affectation. It is simply classy to give away business cards, even if the owner has no business. It gives the owner a feeling of ‘superiority’ -for lack of a more appropriate term-over others. It is also a lot easier to just hand a receptionist, say, your business card instead of explaining who you are.

So, the card

Different people have different uses for a business card and if you think one reason is enough, then you’re wrong. A business card does all of the above, and often, more.