by Derek G. Rowley, © 2009, All Rights Reserved

One of our most popular services is our BizCredit™ Accelerator program, that helps new businesses build and develop a business credit profile that is separate from the individual. The last 18 months has seen many dramatic changes to the way credit providers handle all aspects of credit, including eligibility, reporting, and more. Here are a number of items that we’ve seen pop up in the past month that reflect some of the most recent changes:

Stay away from Capital One. Capital One, a credit card company that aggressively markets small business credit cards (“what’s in your wallet?” ), has changed their credit reporting policy in a way that is having a huge negative impact on small business cardholders. Traditionally, small business credit cards don’t appear on the personal credit report of the business owner unless the card goes into default. This separation between business and personal credit works to the advantage of the business owner, especially if the business is carrying credit significant balances, or uses a business credit card heavily in order to maximize rewards. Now, Capital One is reporting small business credit cards on the owner’s personal credit report. This has resulted in plummeting credit scores, due to the fact that balances on Capital One small business cards are hurting the owners “utilization ration” - the amount of debt carried in relation to available credit.

Chase gets into business credit. While many credit companies are abandoning the business credit market entirely, Chase announced this month the introduction of four new business credit cards:

• Chase Ink - is their standard small business credit card that features “Blueprint”, which allows businesses to choose which purchases they want to pay in full, and which they want to spread over time.
• Chase Ink Bold - is a pay-in-full charge card, similar to American Express. This card comes with the Chase Ultimate Rewards program, with no expiration dates, no blackout dates, and no limits on how many rewards you can earn.
• Chase Ink Cash - is a small business credit card that offers a cash-back program.
• Chase Ink Plus - is a premium credit card with “Blueprint”, Ultimate Rewards, and bonus rewards and travel perks.

by Derek Rowley © 2009 All Rights Reserved

Although many of the nation’s banks are reporting an increase in small business lending, there is a growing sense of apprehension about the commercial lending markets that are keeping many lenders on the sidelines - and many small businesses without capital.

According the Wall Street Journal, JPMorgan Chase claims to have issued $1.5 billion in loans to over 4,000 small businesses during the second quarter of 2009 - an increase of 32% over the first quarter. The country’s top 22 banks that received capital injections from the U.S. government have all reported similar increases.

One of the factors in this increase in small business lending has been the Small Business Administration’s increase in it’s 7(a) loan guarantee from 75% to 90%. Unfortunately, the SBA also reports that it is running out of funds for the program that has been so successful.

Still, small business lending is not currently as vibrant as it once was, and may not return to previous levels soon. The Wall Street Journal quotes Bob Coleman, a small business banking analyst as saying, “We’re still in a recession. We’re not talking Armageddeon here, but it will likely remain tough for businesses to get loans.”

The problem appears to be rooted in a lack of solid private backing for small business loans - especially loans for commercial real estate and equipment. And, lending terms are still very tight. As many business owners have seen their credit scores slide, they have lost the ability to qualify for loans individually. This underscores the need for companies to establish, build and preserve an independent business credit profile and score for when the lending market returns.

The thing to remember is that we are seeing a business cycle. The lending market will return. The question is will small business owners be ready?

By Peyman Aleagha, RISMEDIA, Inc.
Despite all the doom and gloom talk surrounding economy, bailouts, foreclosures, soft real estate markets and the like, attaining a line of credit is still a viable option. According to Itamar Chalif, president of Atlantic Capital Solutions (ACS), the “score” on getting a line of credit for your business still may come down to one thing: your credit score.
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Tags: lines of credit, credit score

by Derek G. Rowley (c) 2009. All Rights Reserved

Disraeli once said that “there are three kinds of lies: lies, damned lies, and statistics.”

In business, some of the “statistics” that can tell such damning lies are the numbers found on company balance sheets and income statements. Too often, the reality is not accurately reflected in the numbers. Accounting is not intended to be a creative art, but in the hands of the right practitioner or aggressive entrepreneur, the accounting numbers can paint almost any type of picture.


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Tags: business funding