Why,Build,Business,Credit,Norm business, insurance Why Build Business Credit?

Small offices have unique needs, and thatincludes document shredding. Designed with the smaller business inmind, the Dahle 20314 is a cross-cut shredder that offers Level 3security and brings you into compliance with federal regulations. The As we all know to live in this world we have to perform some activity by which we can earn money. There are many activities by which we can earn money and meet the standards to live in this society. And from one of them is franchise.  Franc

Normal 0 false false false EN-US X-NONE X-NONE /* Style Definitions */ table.MsoNormalTable{mso-style-name:"Table Normal";mso-tstyle-rowband-size:0;mso-tstyle-colband-size:0;mso-style-noshow:yes;mso-style-priority:99;mso-style-qformat:yes;mso-style-parent:"";mso-padding-alt:0in 5.4pt 0in 5.4pt;mso-para-margin-top:0in;mso-para-margin-right:0in;mso-para-margin-bottom:10.0pt;mso-para-margin-left:0in;line-height:115%;mso-pagination:widow-orphan;font-size:11.0pt;font-family:"Calibri","sans-serif";mso-ascii-font-family:Calibri;mso-ascii-theme-font:minor-latin;mso-hansi-font-family:Calibri;mso-hansi-theme-font:minor-latin;}Cashflow is the lifeblood of any business, no matter the size. If your company doesnot have adequate operational cash flow (cash generated on a daily or weeklybasis from daily operation of your business), then you have to access cash fromselling assets (cash flow from investing) or from financing. To accessfinancing either you as the business owner or your business needs credit. Ifyou want to keep your personal finances COMPLETELY separate from your businessfinances, you will need to establish credit for your business that iscompletely separate from you. In other words, you will want to obtain supplierterms, bank loans, and equipment financing with only the company's performanceor assets as a guarantee of performance, not YOUR assets or signature as aguarantee. No personal guarantees.Imagine this scenario: Your businesshas been doing extremely well but two of your largest customers file forbankruptcy and you did not see it coming. That could wipe out your business cashflow overnight, especially if you had not been managing your receivablestightly and those customers owe you a large sum of money. But regardless, youwill need time to build relationships and replace those customers. Yourbusiness may encounter financial distress in the interim as a result. If thecompany subsequently cannot make its payments on loans or to suppliers, if youhave personal guarantees in place, those guarantees could be called upon.So in the case of a failing company, whether temporarily or permanently, youwould lose the income the business paid you as a salary PLUS you would have tomake loan repayments out of your personal assets. It just went from bad toworse! What if all you had was tied up in the business? Well, if the company hasto file for bankruptcy, you may have to also. If you had stand-alone businesscredit, your personal finances would not be an issue. You may CHOOSE to injectmoney into the company, but you would not HAVE to.In aless serious scenario, your company has encountered some difficulties due tothe current economic environment and now "recovering" recession. Youwould like to negotiate better terms on your loan or with your suppliers. Ifthe company is the sole guarantor and the company is struggling, assuming youhave a decent plan to weather the storm, your lender is highly likely tonegotiate with you. However, if you are a guarantor and have sizable assets,why should the lender negotiate when they can pursue your assets and be donewith it? (Of course, having a strong relationship with your lender ALWAYS helps.)On the opposite side, many business owners complain about how all the creditthey have for the business in their name drags their personal credit scoresdown. By separating and building your business’ credit profile, you, as thebusiness owner, can get business credit cards, equipment loans, etc. in thebusiness' name and tax identification number. Consequently, the business loans willnot be associated with the owner's social security number and thus, do notimpact his or her personal credit. Again, no personal guarantees.Okay, enough of the what if scenarios. You get the gist behind the reason forhaving a strong business credit profile. For emphasis one more time, here'swhat Wells Fargo Bank has said regarding separating business and personalcredit and financing: "The longer you delay establishing businesscredit, the longer you delay taking advantage of business loans."About the Author: Normal 0 false false false EN-US X-NONE X-NONE /* Style Definitions */ table.MsoNormalTable{mso-style-name:"Table Normal";mso-tstyle-rowband-size:0;mso-tstyle-colband-size:0;mso-style-noshow:yes;mso-style-priority:99;mso-style-qformat:yes;mso-style-parent:"";mso-padding-alt:0in 5.4pt 0in 5.4pt;mso-para-margin-top:0in;mso-para-margin-right:0in;mso-para-margin-bottom:10.0pt;mso-para-margin-left:0in;line-height:115%;mso-pagination:widow-orphan;font-size:11.0pt;font-family:"Calibri","sans-serif";mso-ascii-font-family:Calibri;mso-ascii-theme-font:minor-latin;mso-hansi-font-family:Calibri;mso-hansi-theme-font:minor-latin;}TiffanyC. Wright is an author, business advisor, and interim CFO and CEO who hashelped numerous small businesses obtain over $31 million in financing. To learnmore about how you can build your company’s business credit and remove personalguarantees and other hits to your personal credit, view this course.  If you would like to contact Ms. Wrightdirectly, you can email her at [email protected].