Business Loans

Commercial loan borrowers are likely to feel that a traditional bank is their best source for commercial financing. However, because most traditional banks focus on a small number of established industries, non-traditional (non-bank) and non-local commercial lenders should be considered for most commercial loan situations. Therefore the recommended commercial loan strategy is to "Think Outside the Bank".

There are several commercial loan situations that commercial borrowers will frequently find that non-traditional commercial lenders are better positioned to provide terms that are more advantageous to the commercial borrower: (1) Business cash advance and credit card loan programs; (2) commercial mortgage loans; and (3) credit card processing programs. In some cases a traditional bank will offer to provide a commercial loan but will attach excessively stringent terms and covenants. In other cases a traditional bank will decline the commercial loan outright, perhaps because they do not even provide commercial financing to the commercial borrower’s particular industry. In either case, the commercial borrower is likely to benefit by "Thinking Outside the Bank".

COMMERCIAL LOAN EXAMPLE ONE – THINK OUTSIDE THE BANK
Business Cash Advance and Credit Card Loan Programs

Most businesses that accept credit cards in their business will qualify for a business cash advance with their credit card receivables. Traditional banks will typically be very poor candidates to consider if a business needs assistance with a credit card loan and business cash advances. Because even thriving businesses frequently need more cash than they can borrow from a bank, it can be of critical importance for a business to "Think Outside the Bank" and locate non-traditional lenders to assist with this business financing need.

COMMERCIAL LOAN EXAMPLE TWO – THINK OUTSIDE THE BANK
Commercial Mortgage Loans

Two of the most common commercial loan difficulties experienced by commercial borrowers can be avoided if they "Think Outside the Bank". The first commercial loan situation is the practice of traditional banks to avoid most special purpose properties (such as funeral homes and churches). The second commercial loan situation is the common practice of most commercial banks to attach balloon and/or recall provisions to their commercial loans (which means that the bank can require early repayment of the commercial loan under various conditions). Both of these undesirable commercial loan situations can usually and easily be avoided by considering a non-traditional and non-bank lender.

COMMERCIAL LOAN EXAMPLE THREE – THINK OUTSIDE THE BANK
Credit Card Processing Programs

The choice of an appropriate credit card processing service can be instrumental in improving the profitability of businesses with a high volume of credit card activity. The analysis of credit card processing providers can be effectively combined with the credit card factoring and credit card loan process described above. In assessing a business cash advance program, it is frequently possible to simultaneously arrange for a substantial improvement in the merchant’s credit card processing program. Because traditional banks are usually not competitive in providing assistance with credit card factoring, it is equally likely that a non-traditional lender will be the primary source of effective and competitive help with credit card processing.

A closing commercial loan thought: I have written an earlier commercial loan article about commercial lenders to avoid. It should be noted that there are in fact both traditional and non-traditional (non-bank) lenders which should be avoided. So when commercial borrowers "Think Outside the Bank", it is still of critical importance that they are prepared to avoid a wide variety of problematic non-traditional commercial lenders in their search for viable commercial financing, especially when it involves business cash advance (credit card loan and credit card factoring) programs, credit card processing services and commercial mortgage loans.

Copyright 2005-2007 AEX Commercial Financing Group, LLC. All Rights Reserved.

Author: Stephen Bush
Article Source: EzineArticles.com
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Nothing quite matches the convenience of business credit cards. When you are looking for a good alternative to cash, checks, and personal credit cards, it is probably a business credit card you want. With credit-when-you-need-it convenience, savings and discounts on purchases, and extremely helpful reporting facilities, business credit cards can be a good tool in your financial management tool kit.

You will find it easier to get a business credit card than to open a business line of credit. For this reason, business credit cards can do a lot to help you ease your cash requirements even as you are still gearing up with office supplies and equipment. It can never be repeated too often: use business credit cards with caution and afford it the same respect you would afford any other business line of credit!

The ability to borrow money, whether from a business line of credit or from business credit cards, is something that you need for your business. Like business credit cards, the line of credit is a revolving credit, and both charge interest only on the balances that are left outstanding. The credit limit on business credit cards may be lower than on lines of credit, but both do have a predetermined ceiling. There are however a few differences between these two forms of business credit:

Cost

Business credit cards generally have higher annual percentage rates and lower credit limits, than lines of credit. When it comes to cost-effectiveness therefore, the commercial lines of credit will beat business credit cards anytime.

However, if you manage business credit cards wisely, you can maximize the 21 to 25 days grace period or float on purchases. When the statement comes and you pay off the entire balance, you will actually avoid paying any interest. The crux of the matter is that you get a 25-day interest free loan! Not badand only from business credit cards.

Convenience

Business credit cards may lose on cost, but they are miles ahead when it comes to convenience. If your checking account is running low and you need to buy some supplies, you no longer have to call the bank to transfer funds from your credit line. You could easily charge the whole transaction to your business credit card, get out of the store and back to running your business. Business credit cards also offer you the convenience of easy bookkeeping and quick cost analysis.

Whats more, business credit cards are heavily loaded with perks like frequent flyer miles, purchase protection and warranty extensions, discounts and cash backs on hotel stays, car rentals, gas purchases, and more. These business credit card incentives can be valuable to a business, not only for the sake of convenience but also for the cost savings that you get.

Business credit cards and lines of credit are two financial tools that you can use together. Business credit cards are perfect for very short-term borrowings were talking 30 days at the most. You should pay off the bulk of the balance when it falls due, to save on interest. You may want to carry 20% of the balance forward to the next month to make your business credit card issuer happy, otherwise theyre never going to earn any interest income from your business credit card account.

Lines of credit are perfect for larger purchases, particularly those that would exceed your business credit card limit, as well as for reserve funds when cash flow becomes irregular over a period. Lines of credit help you to shore up your working capital, such as payroll, paying off merchant credit and payables, or settling the quarterly taxes.

Author: Richard Gilliland
Article Source: EzineArticles.com
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When you apply for credit card processing capability for your website, there are a multitude of factors that underwriters take into consideration when deciding whether or not to accept your application. These factors include:

* The type of business you own

* How long you have owned your business

* Trends in your business earnings

* Trends in your industry

* Your collateral: machinery, equipment, property

* Your personal credit report

When a merchant’s credit card processing application is evaluated, their personal credit rating is assessed and significantly affects the outcome of the decision. A poor credit rating may preclude an application from being accepted. But what does your personal history have to do with your business potential?

As far as your credit card processing application is concerned, everything. How you run your personal life is indicative of how you will run your business, helping the underwriters of your credit card processing application to determine whether or not you should be considered a risk. Everything that is included in your credit report is relevant information for the credit card processing underwriters. This information includes:

* Whether or not you made personal credit card payments on time or at all, over drafted your accounts, or filed for bankruptcy may indicate your ability to repay future creditors.

* Whether or not you have enough credit for your credit card processing underwriters to be able to satisfactorily discern your ability to repay debts.

* If you have multiple inquiries into your credit rating by potential creditors, this shows negatively as well. This means that others have decided you are a risk, which may indicate to your current credit card processing underwriters that they should decide the same way.

Research Your Credit Report

One way to make sure that your personal credit is an asset to your credit card processing application is to make sure that it is as high as possible before you send in your application. It is free for you to check your credit report with the three major credit agencies in the country Experian, TransUnion, and Equifax once every year. Staying up to date with your credit reports will let you know right away if there are mistakes due to inaccurate reports or identity theft. The sooner you find out, the sooner you can get started getting these things corrected and removed from your credit reports.

How To Raise Your Credit Rating

There are many ways for you to raise your credit rating if you feel that it is inadequate to get the credit card processing application results that you need. Some credit report improvement techniques take a great deal of time before they affect your credit rating. Others begin to improve your score immediately.

* Make sure that all your information is updated. Everything listed has an expiration date of seven years. It’s up to you to make sure that seven year old issues are removed at that time. Also, just because you paid off a bill doesn’t mean that the company reported this update to the credit reporting agency. This may be up to you.

* Pay your bills on time, every time. Every single late payment is listed on your credit report and negatively affects your credit score. This will directly affect your credit card processing application; it’s a 1:1 correlation as far as how underwriters will predict your future repayment efforts when weighing the merits of your application.

* Don’t apply for credit every time it’s offered to you. If you are constantly applying for credit, most credit card processing application underwriters will assume that you are not managing your finances well. Keep enough credit cards to establish credit, but not so many that it’s too much to handle. Three to five cards is plenty.

* Don’t avoid credit cards and loans. You need a credit history to have a good credit history. Start early, make all your minimum payments and stay on top of your balances. If you go beyond your means, fix the situation as soon as possible.

The bottom line is that your personal credit reports and rating will directly affect the outcome of your credit card processing application. Maintaining the best credit possible will help you make the most of your business when it comes time to apply for credit card processing capability. And if worse comes to worst, there is an alternative solution. Many credit card processing companies allow a merchant to use a cosigner. Choosing someone with a favorable credit rating score may help you offset the negative effects of your own credit rating.

Copyright 2006 William Hamilton

Author: William Hamilton
Article Source: EzineArticles.com
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