Credit Cards for Small Business

admin — Mon, 05 Apr 2010 20:18:46 +0000

When you decide to start a small business, you find out pretty quickly that it takes more than skills and dedication in your respective area of work. Besides being good at what you want to do, you also need to known your accounting and financing issues, no matter how annoying and boring these may be. And the credit card problem for small businesses needs careful handling, just like that of a regular, personal credit card.

Choosing the right type of credit card is vital for the success of a small business. Even if you don’t have access to a corporate credit card, a small business card can be a major tool on the path to success. When you apply for a small business credit card, lenders will analyze your request from a variety of points of views. While their evaluation of the risk may vary according to various local factors, they will all take into account the “five Cs”: capital, capacity to make the payments, collateral, conditions and character.

Capital, meaning your personal investment in the business, outlines not only the size of the business, but also how much risk you are willing to take. Balance risks carefully – too much means you will be rated reckless, too little, and the lenders may think you are not serious about this. The capacity to repay the loan is, of course, critical for the lender and will be carefully analyzed. The collateral or the guarantees will show that you have a backup plan for returning the loan, in case things go wrong. The conditions represent the general situation in your geographical area and your respective line of business – mostly things that you cannot control (but you can make them look better in carefully planned business plan). Last but not least, character is the impression you make on the lenders – how trustworthy and business-oriented you appear to them.

If you take all these into account, your application is more likely to be successful right from the start. Of course, you also need to consider, carefully, which type of business card suits your needs.

Many small businesses rely on cash flow to pay for suppliers or contractors, because they need to purchase materials and services before their own clients pay up. You need to calculate the difference between the date when you purchase the materials and the date when the clients pay you back. If this is shorter than 30 days, go for a card that doesn’t charge you interest for the respective period. If it is two, three months or longer, go for a low interest card.

Also, you should think of how often you will have to travel for business-related purposes, and how a special type of credit card can help you with this, or how you will handle unprepared emergency situations that hustle small businesses constantly.

Some of the offers for credit cards for small business include Blue for Business Card – no annual fee, 0% intro APR for the first 9 months, credit line of up to $50,000 or Blue Cash for Business Credit Card – up to 5% cash rebate, no annual fee, 0% APR for up to 15 months. Advanta Platinum with Rewards, featuring cash back bonus, offers 0% intro APR for balance transfers, up to 50,000 credit line and various types of rewards for the things you buy most often (gas, office supplies and so on), bonus miles or cash back.

The CitiBusiness card has 0% APR for purchases for the first 6 months, no annual fee, a generous credit line and additional cards for the employees, with a credit limit set by you. The Platinum Business Credit Card from American Express has no annual fee and 0% APR for the first nine months on purchases and balance transfers.

Other options include Business Green Rewards Cash – no fees for the first year and no pre-set spending limit, and the Business Cash Rebate from OPEN: the Small Business Network, with up to 5% cash rebate, no annual fee, 0% APR for the first six months, no limit for cash back and no minimum spending requirements.

By: Jeremy Zongker

Avoiding Business Fraud

admin — Sat, 06 Feb 2010 18:13:15 +0000

What is Business Fraud?

Depending on the size of their operations, company owners may have to deal with enormous number of employment and financial tribulations that they need to address on a daily basis. A single mistake in making decision may instigate a bigger problem that may affect the entire operation of the company.

Thus, they must make sure to avoid engaging with deceitful practices of other parties in order to lessen the risk of losing probable income due to credit extensions and over employment.

Business fraud is a deceitful act that aims to deprive an individual or an entity of their property or rights that may result to economic injuries. This type of illicit activities is considered as one of the primary causes why most small and medium scale businesses fall due to bankruptcy.

How to Avoid Being a Fraud Victim

Do not offer credits to individuals or companies that you still have no considerable acquaintance yet. Try to inquire with your references and obtain a credit report before transacting with other parties. Watch out for counterfeited statement of accounts. Many fake companies utilize misleading invoices to cheat on other firms practically making them pay for products and services that have not been provided. Ask your personnel not to divulge any information regarding your office equipment through a phone call. In some cases, fraudulent companies pretend to be the regular suppliers and provide you with over-priced company equipment. Be sure to implement a Privacy Policy in your company. This seeks to secure the identity of your customers and employees. Be careful with individuals who make large purchases through credit cards and demand for speedy services. Most of the times, these people cannot present their valid I.D. to prove their ownership of such credit cards. Never send checks or money through mail in paying an invoice. A lot of instances have been reported wherein mailed checks have been stolen and altered. Have monthly account verification with your bank. This will enable you to detect any stolen and altered checks and resolve this problem right away. Supervise your employees. Make sure that they are utilizing company assets, as they should be. Employees whom you have found guilty of theft should be reprimanded or should be punished depending to the extent of their violations. Be sure that your employees are competent on handling their jobs especially those who are assigned in doing financial matters and making company transactions. Consult a qualified business lawyer in drafting your company rules and policies. This is to make sure that certain provisions that tackle employment fraud will be included in your regulations.

By: Rainier Policarpio

Business Continuity Audit » Credit Cards

Credit Cards for Small Business

Avoiding Business Fraud