to sell to you
to lend you money
you are viable as a partner
to lease the equipment you need to grow your business
to increase your line of credit
to help you carry more inventory at competitive prices
to give you favorable financing rates and terms
you stack up favorably against other companies competing in your market space

Business credit includes a variety of data points about your business, such as the date it started, the skills and experience of your top leaders, number of employees and annual sales. This type of information is listed in your business credit profile, along with scores and ratings that are derived from your business’s past behavior to predict its future behavior. For example, your ability and willingness to pay your bills on time in the past is factored into your ability and likelihood of paying your bills in the future.

Most requests for bank finance are turned down not because clients are a poor credit risk but because they have approached their bank ill-prepared. Get ahead by communicating the right information the first time.

CASHFLOW
Provide data that shows you understand and can manage your working capital (debtors, creditors and stock) and that the cash in your business is sufficient to cover the bank’s interest (as well as other key costs such as tax, dividends and replacement capital). “Cash is king” and even profitable businesses can fail if cash is not managed. Understand your cash movements and you may even need to borrow less.

OUTLOOK
Present forecasts which communicate the amount required, payback period, risk and return to the bank. Figures should be more sophisticated than forecast sales and profit and should ideally show the relationship between profits, your balance sheet and cash flows. Sensitivity analysis is important to help the bank understand when they risk non-repayment. Forecasts should always be based upon the most up to date actual data.

MARKETS
Explain your market. Focus 20% of your efforts explaining what has happened and 80% on what you expect to happen and why. Do not worry, top economists sometimes get this wrong too. The point is you need to show the bank you have thought about it, considered the likely outcomes and that you have a clear action plan.

MIX AND QUALITY OF CLIENTS
Detail clients by name/industry/region/contract length. The strength of your clients and their ability to pay = the strength of your business. Building your business around one client is high business risk.

UPDATE
Give the bank up to date management information especially if annual accounts are dated. Information should be produced at least quarterly, split into division/region and include profit, balance sheet and cash flow breakdowns. Management information should be used to update forecast/budget data and any differences should be explained.

NEED FOR LIQUIDITY
Show the bank that your business is liquid and can survive. Tell them how quickly you get your hands on the cash and know your debt maturities, credit terms and what cash is tied up in assets. Think beyond a simple current assets/current liabilities ratio and consider your ideal liquidity position. Remember too much liquidity means assets could be generating a higher return elsewhere.

INCOME
Know your financial definitions. Are you talking about gross profit, operating profit, net profit or EBITDA (earnings before interest tax, depreciation and amortization)? All are common in the financial analysis of businesses. Also ensure you can discuss the seasonality and cyclicality of your industry.

COMPETITION
Tell the bank how you have you performed in comparison to your competitors? Be prepared to discuss your competitors’ strengths and weaknesses. This provides confidence that you are a proactive management team that really understand the business.

ACTIVITIES
Break your business down by activity/division and tell the bank which activities are performing well and which are a cash drain and why. Explain how divisions complement or overlap each other and the strategy for each. Be ready with forecasts if necessary.

TRACK RECORD
Unless starting up, provide at least 3 years accounts to a bank (5 years ideally if approaching a new bank) and up to date management accounts. A bank will need this data for the financial analysis of the trends in ratios and margins. It will also give them confidence in your management track record.

EQUITY, DEBT AND THE BALANCE SHEET
Communicate your risk (equity/directors’ loans) versus the risk to the bank. Know the real strength of your balance sheet by having current market values of assets to hand and full details of debt (including off-balance sheet exposure such as leases and guarantees). Be clear at the outset what security is and is not on offer.

Article Source: http://EzineArticles.com/?expert=Delphine_Paterson

In 2007, Anand Sanwal was managing a $50 million innovation fund for American Express. His job: to identify and incubate new business ideas–and that meant doing gobs of market research, much of it on small, closely held companies. One problem: Public information on private companies was scarce, and the data that did exist wasn’t in much of a structured, useful format.

Sanwal knew he wasn’t the only one looking for that kind of information. So he and some partners launched Manhattan-based CB Information Systems to do just that. The company’s Web-based software, marketed under the name ChubbyBrain (www.chubbybrain.com), trolls the Web for data on private companies–what they do, who is buying and selling them and for how much. “We are all engineers who went to business school, so we thought we had what was an elegant, logical and robust plan,” says Sanwal, 35. “We were pretty happy with ourselves.”

But no matter what the textbooks say, having a great idea and a solid business plan often aren’t enough. To fund the software development, Sanwal was banking on income from a few consulting gigs inspired by a book he had written on corporate-resource allocation. Sanwal had gotten roughly $2 million in verbal agreements from CEOs or CFOs at three large financial-service companies. Then the stock market tanked and the deals were put on hold.

With no backup plan, Sanwal dipped into his savings and cobbled a bunch of smaller consulting engagements to keep his dream alive. Larger deals (the paying kind) followed. Now ChubbyBrain competes with Dow Jones and Thomson in tracking venture activity, and plans to roll out a line of new private-company data products in 2010. While stronger for the experience, Sanwal says the hard lesson still lingers: “A deal is not closed until the ink dries, no matter how many assurances you have from the other party.”

Eye Openers: 11 Myths Of Owning A Small Business

If only you knew then what you know now. … There are plenty of reasons that statement rings true for battle-tested small-business owners. We asked a bunch of them to share the most commonly misplaced assumptions about entrepreneurship. They just might spare you that familiar lament. For the full list, check out our slideshow.

Myth: Entrepreneurs are risk-taking visionaries.

Truth. Despite what some in the media would have you believe, you don’t have to be a swashbuckling risk taker to run your own show. “These glamorous stories serve to make entrepreneurship appear to be an exclusive art that’s relegated to a few people who exhibit a variety of specific traits,” says Len Schlesinger, president of Babson College in Babson Park, Mass. “Entrepreneurs are actually very good at avoiding risk rather than taking it on.”

Myth: The idea is more important than the details.

Truth: Whiz-bang new technologies and business models are sexy, but they aren’t a requirement. “A well-executed, decent idea is better than a poorly-executed, excellent idea,” says Gerald Shreiber, founder and chief executive of J&J Snack Foods. Shreiber’s secret to minding the details: a healthy dose of paranoia. “I have 2,600 people to worry about,” he says. “Somewhere, God or my parents and grandparents are watching over me.”

Myth: Jealously guard your idea, lest someone might steal it.

Truth: You may be onto something, but you surely don’t have all the answers (if you even knew to ask all the right questions). “While you don’t want to put your entire business plan on the Internet, entrepreneurs who do their homework look to a relatively large but select number of people to talk through their ideas,” says Reid Hoffman, founder and chief executive of LinkedIn.com.

Myth: Your business plan must be rock solid from the get-go.

Truth: Building a company is an iterative process, says Hoffman, and entrepreneurs must be willing to adapt–to changes in customer demand or the competitive landscape. “It’s not like chess where you have a pre-formulated, deterministic strategy and must get all the moves in exactly the right sequence,” he says. There should be a principal plan in place–see Ten Things All Good Business Plans Must Have–but it should be flexible and updated constantly. Says Hoffman: “No battle plan survives impact with the enemy.”

Myth: Passion will get you there.

Truth: Passion can ease the pain of 15-hour days. It can galvanize employees and win over customers. In some cases, it can even enthrall deep-pocketed investors. But it is no silver bullet. The most effective entrepreneurs learn to modulate their emotions, says Rich Gelfond, chief executive of IMAX. His mantra: “It’s never as good as it looks, or as bad as it seems.”

Myth: You can set your own schedule.

Truth: “I thought I’d be the boss and sit back and put my feet up,” says Mike Zaya, chief executive of Printrunner, an online printing and ink-cartridge company. Reality looked a bit different, including a several-night stretch of sleeping but two hours a night at the office. “You end up being the goalie of the company, and the goalie has to sacrifice their body,” adds Zaya. “You have to be the first man in and last man out on any given day.”

Myth: There’s glory in it.

Truth: For all its rewards, entrepreneurship can also feel like a thankless job. “No one tells me that I did really well, it’s always me telling everyone else that,” says Amir Korangy, owner of the Real Deal, a real-estate focused publishing company in New York City. Korangy says entrepreneurs need internal motivation and reassurance because it rarely comes from outside. “After a few years, you want someone to say you’re doing good work,” he adds. “But the only way to tell yourself you’re doing a good job is to see an increase in revenues.”

Eye Openers: 11 Myths Of Owning A Small Business

By MEENA THIRUVENGADAM

U.S. Treasury Secretary Timothy Geithner on Wednesday called on banks that received government aid during the financial crisis to boost lending, saying limitations on credit availability for small businesses may slow the nation’s recovery.

“We need banks to be working with us, not against recovery,” he said, kicking off a day long Obama administration summit aimed at devising ways to strengthen the flow of credit to small businesses.

Associated Press

Treasury Secretary Timothy Geithner at the Small Business Financing Forum, with SBA Administrator Karen Mills, left, and Kevin Watters of JP Morgan.

“The recovery in earnings across the banking system . . . is not because the surviving banks are particularly smart and clever,” Geithner said. “It’s because the taxpayers of the United States and their elected representatives decided that to save the economy, we had to save the financial system.”

Geithner, however, defended the rebound in bank earnings, suggesting the more positive figures are necessary for the economy to rebound. Meanwhile, Federal Deposit Insurance Corp. Chairman Sheila Bair said she expects “credit losses will continue to hold down” earnings in the banking sector.

Geithner said banks bear at least some responsibility for the financial crisis and, therefore, are obligated to help communities recover. He said the Obama administration is committed to doing more to help small businesses access the credit they need and would move as quickly as possible.

“We cannot wait until next year to see these aggressive actions,” Sen. Mark Warner (D., Va.) said.

Small businesses are typically more reliant on bank financing than their larger counterparts. “When banks pull back, small businesses take the hardest hit,” Geithner said.

Treasury’s latest monthly survey of bank lending shows the 22 largest banks receiving government capital during the crisis tightened lending for the fifth time in the past six months, with total outstanding loan balances falling 1% in September.

Small business lending also dipped 1%, as did originations of new small business loans. Small business loans outstanding have slid by $10 billion since April, down to $259 billion in September, the report showed.

“This credit crunch is not over,” Geithner said. “It may feel dramatically better for a large business, but it is not over for small businesses across the country.”

Write to Meena Thiruvengadam at meena.thiruvengadam@dowjones.com

Subject: RE: Feedback Form

Date: Fri, 21 Aug 2009 13:35:49 -0700

Patricia,

Your email came to us mistakenly.  We are CMI as in Credit Management Inc.  We are a private business credit consulting group.  We are not CMI the collection Agency.  We get emails like this all the time.  The CMI you are looking for is the collection agency for Time Warner and Comcast among other things.  They are incredibly difficult to deal with but below are a few links and a phone number to help you.

Also, here’s the deal with credit reports.  The 3 Credit Bureaus tend not to help you remove things if they deem them “accurately reported”.  They have a responsibility to report “accurately”.  So they’ll call CMI/Time Warner/Comcast and ask them if what they reported is true.  They’ll of course say it is.  So the only thing you can do is write all 3 credit bureaus with your statement that this is an “inaccurate reporting” and back it up with whatever proof you have.  Your dispute will therefore always be noted on your credit report and they just might remove it all together.  The 3 agencies will send your dispute back to Comcast and Comcast will have 30 days to answer it–often times they don’t answer it and therefore the agencies must remove it.  But also, worst case, if they don’t remove it all together, the fact that the derogatory says “paid collection” means that the issue is settled.  This is much better than “uncollected”.  And since the issue is so old–many years, I would doubt that it has any meaningful ding to your credit score.  Hope that helps–good luck.

http://ficoforums.myfico.com/fico/board/print?board.id=rebuildingcredit&message.id=73803&page=1&format=page

http://help.twcable.com/html/twc_privacy_notice.html

The number for the CMI you’re looking for is is 972-732-9100 or 800-377-7724

Will your business thrive, or will it join thousands of others that have faltered along the way? Here are ten rules to make sure your business grows and prospers:

1. Find a Niche. For small businessesit is best to find a niche. A small company with limited resources can efficiently serve niche markets. Concentrate your efforts on a fairly narrow market offering. This entails sticking to what you do best, and becoming an expert in that field. Realize that it is not possible to be good at everything. By concentrating on a fairly narrow market niche, you may be able to avoid head-on collision with bigger competitors. If you are a hardware store selling everything from paints to lumber, the entry of giant retailers like Home Depot in your area can spell the end for your business. However, you can try to limit your offering, for example, to construction of porches and decks and be the best retailer for this segment.

2. Be small, yet think big. The most common question of small businesses start-ups is “How can I compete with my big competitors?“

have inherent advantages over big businesses, including flexibility, ability to respond quickly, able to provide a more personalized service. Make sure that your business takes maximum advantage of those areas that represent the strengths of small companies.

3. Differentiate your products. Present the benefits of your products and services to your customers, highlighting the unique solutions it offers to their problems. Avoid being a copycat; rarely do imitators succeed in the market. Study, but do not copy your competitors, and package your products distinctly.

4. First impression counts. Strive for accuracy and quality the first time around. You often do not have a second chance to make a good first impression. This entails a well-laid out store, courteous staff, and personable voice over the phone, etc. However, if you are a one-person business working in a home office, remember that you are the center of your business and marketing efforts. Everyone you come in touch with is potentially a client or a referral to another client because they are either impressed with you as a person, impressed with your skill at providing a certain service or product. Make sure that you are always presentable, professional in your ways and knowledgeable about your business.

5. Good reputation. Your business hinges on its reputation. It is imperative that you build a good reputation for the quality of your products and support services. Remember that two things guarantee success: high quality goods and superior service. Always aim for quality. If you are a tax consultant, strive to prepare a totally accurate, perfectly done tax returns for your clients.

6. Constant improvement. Entrepreneurs know that they should not be rigid in their ways of thinking in their quest to improve their best products and services. You risk being left behind by the fast-paced competition if you cling to the “this is how we’ve always done it” kind of thinking. The business environment today demands that you need to come up with new solutions ­ fast!

7. Listen to your customers. Be market driven: listen and react to your customer’s needs. Customers need to feel that they are important to you ­ because they are! When you focus on your customers and gain their trust, they will not only recommend you but they will also remain loyal to you. Remember, personal recommendation and word-of-mouth are the least costly yet most effective marketing strategy for your business.

8. Plan for success. An entrepreneur should understand the power of planning. A good plan helps you increase your chances of succeeding and can help you define your business concepts, estimate costs, predict sales and control your risks. It tells you where you are going and how to get there. Going into business without a plan is like driving into a foreign land without a road map.

9. Be innovative. Innovate your offerings constantly, keeping pace with technological changes. Use change as a springboard to improve your products, procedures or reputation. Innovation should also cover your operations ­ from pricing, promotion, customer service, distribution, etc. Keep your eyes for new ways of doing things, and apply those that can improve the quality of your products and efficiency of your operations.

10. Work smart. As an entrepreneur, you need to possess self-confidence, plus a never-ending sense of urgency to develop your ideas. Studies have shown that the individuals who succeed in entrepreneurship are far-sighted and can accept things as they are and deal with them accordingly. They know how to manage their time, realizing the importance of leisure in as much as work. These people are oftentimes quick to change directions when they see their plans are not working. More importantly, they recognize their weak points and move on to nurture alliances and acquire the skills they need to put their business on the right track. They realize the importance of working smart, knowing that it is not the quantity of work you do, but what you do and how well you do it.

The current upheaval in the financial sector has many of us longing for the days when we were worrying only about an impending recession. As the U.S. economy continues its spiral to rock bottom and as the stock market remains highly unstable despite the passing of the $700 billion “rescue” plan, our situation is drawing comparisons to the Great Depression. If you’re a small business owner, you are likely wondering if you’ll become a casualty of these economic end times. Ed Hess and Charles Goetz say you do have a fighting chance-but you need to stop the handwringing and start taking aggressive action to safeguard your business.

“Nothing is more stressful for a small business owner than talk of economic catastrophe,” says Ed Hess, professor of Business Administration and Batten Executive-in-Residence at the Darden School of Business at the University of Virginia and coauthor along with Goetz of the book “So, You Want to Start a Business? 8 Steps to Take Before Making the Leap” (FT Press, September 2008, ISBN: 978-0-13-712667-5, $18.99). “You start thinking about everything hanging in the balance, and if you aren’t careful you let your worries overwhelm your common sense. Rather than taking steps to safeguard your business, you find yourself paralyzed by anxiety.”

The authors stress that financial doom and gloom does not mean certain death for your small business. Once you accept that you’re going to have to work very, very hard-and that no one is coming to your rescue with a taxpayer-funded bailout package-you’ll be ready to come out swinging.

“You have to remember who’s in control,” says Goetz, who is a Distinguished Lecturer in Entrepreneurship at Goizueta Business School, Emory University. “It’s you. And only you. As a small business owner, you should certainly know what’s going on in the economy, but remember that you are the captain of your ship. And if you take the proper action, you can steer your business around this economic mess.”

Hess and Goetz provide a few small business safeguarding tips based on their decades of experience teaching and advising entrepreneurs:

1. Obey the Golden Rule of Small Business: Protect your credit. As the credit crunch worsens, it is critical that you make sure your business has the best credit possible to ensure you can get a loan if you need one. Make absolutely certain you are paying your bills on time. Don’t let anything fall through the cracks. If you are having trouble making a payment, let the company or bank know why. If there is a dispute on a payment, get something in writing that says you aren’t to blame. Being turned in to a collection agency will tank your credit score, something you absolutely can’t risk.

2. You can’t show your employees the money, but you can show ‘em the love. You need your employees to be on your side now more than ever. Show them every day how much you appreciate them. You’ll be surprised how much goodwill a handwritten thank you note can create. And while you can’t give raises to show your appreciation, there are other ways-for example, have lunch catered once a month or show up with doughnuts and coffee one morning.

“Your employees know that money is tight, so they shouldn’t be expecting raises or bonuses,” says Hess. “But you can pull them together and let them know how much their hard work means to you. You can say, ‘Thanks for a great job!’ when an employee goes the extra mile. Small gestures like these will let them know that you care about them and appreciate their hard work. Showing your thanks will help you build a better relationship with them, which makes it more likely that they will stick with you through thick and thin. Great employees are often the best defense in tough times.”

3. Make outstanding service your “secret weapon.” One area in which a small business should always excel is customer service-good economy or bad. But when times are tough and customers have less money to spend, they really care that they’re getting a lot of bang for their buck. They’ll be looking to cut out those businesses that aren’t meeting their needs. As a smaller company, you’ll have an advantage over any larger competitors because you are better positioned to provide consistent, outstanding service. Small businesses just tend to be more flexible and can “turn on a dime” to meet client needs as they arise. Talk to your customers frequently-see how you can help them in these tough times. The closer you stay to them the better!

4. Figure out where you can cut expenses. Do a line item check of your expenses and really think about what you could do without. Some cuts may be obvious. For example, if you have cable TV set up in your office that might be the first thing to go. But to figure out the less obvious expenses, be sure to involve your employees. Because they are on the front lines every day, they may have a better idea of what can be cut. For example, maybe they’ve noticed that you have an incoming paper supply that could be reduced. If you’re paying an expensive lease for office or warehouse space and your lease is up, you might want to consider moving to a smaller, cheaper space. Who knows? You could be able to get a good deal on an office lease or storage space. The real estate market is suffering right now, so more and more property owners are looking to make money on their properties any way they can. If your current lease isn’t up and you are having trouble making ends meet, you might want to discuss a temporary renegotiation of your lease with your landlord that would allow you to pay less rent now and make up for it when your business improves.

5. Keep abreast of the news in your sector or industry. Depending on what kind of business you have, different economic events will affect you in different ways. Find a reputable website for your business sector where you can get free news about your industry. Staying informed will help you know which way to navigate your business.

“I do have one caveat in regard to staying informed,” says Hess. “Don’t get so bogged down in the news that you are back to your worrying again. Know enough that you are able to steer your company down the right path, but don’t get so obsessed with reading every breaking news item that you get distracted from actually running your business.”

6. Re-examine your credit terms. You are running a business, not a charity. When times get tough you need to let your late-paying or no-paying customers know that it is time for them to pay up.

“Tell them you’ll work with them to set up a payment plan that they are comfortable with,” says Goetz. “But hold them to it. Knowing the state of the economy, most of your customers will understand the situation you are in and will do whatever they can to pay you on time, especially if you’ve served them well.”

7. Manage your inventory. Keeping a close eye on your inventory will help you conserve cash and clean up your balance sheet. That way when credit loosens you will be among the strong firms that banks are willing to lend to.

8. Keep an eye on your competitors. There’s no better time to know exactly what your competition is doing. If your competition seems to be thriving, figure out why. You might want to copy some of their techniques. If they’re not doing well, you need to know that too, for other (obvious) reasons.

“If your competitors are struggling, they may well go out of business,” says Hess. “Be there to snatch up their customers. Taking advantage of failing competition provides you with the unique opportunity to grow your business during a slow economic period.”

9. Get feedback from your customers. Keep communication lines open between you and your customers. Make sure you know how the bad economy is affecting them. Use surveys, comment cards, and one-on-one conversations to find out how you can better assist them during these tough times.

“When you’ve gotten feedback from your customers, show immediate action in the areas they’ve complained about,” says Goetz. “This will show them just how serious you are about great customer service. And if you take their suggestions and put them to action, they will feel like they have a hand in shaping your business so that it better meets their needs.”

10. Create an online presence if you haven’t already. A great way to stay in front of your customers and attract new ones is by maximizing your presence on the Web. Make sure you have a great website that is easy to navigate and that makes it easy for visitors to purchase your products or contact you to discuss what your business can do for them.

“Online marketing can also be a big help,” says Hess. “It’s cheap and allows you to send information about your business to a large number of people easily. For example, sending a marketing e-mail is an easy way to get in front of new customers. Just make sure your message is on point and that you are sending your marketing messages to people who would legitimately benefit from your business.”

“The economy is getting a lot of blame these days for sinking businesses,” says Hess. “I’m not saying it’s not making things harder for some companies-it certainly is-but it isn’t a deal breaker by any means. Sometimes it’s just a convenient scapegoat. When you have a business with a good foundation and you take the necessary steps to protect your company, a small business can survive tough times.”

For more information, visit www.edhltd.com or www.ftpress.com.

One of the first decisions you will need to make is how you want to organize your
business. This is an important decision with long-term implications. Consult with an
accountant or attorney to help determine what form is best for you. In making your
decision, you should consider the following:
Your vision for the nature and size of your business.
The level of control you want to have.
Your business’s susceptibility to lawsuits.
Tax implications of various structures.
Need for reinvesting earnings into business.
The level of structure you want to have.

SOLE PROPRIETORSHIPS
The majority of small businesses start as sole proprietorships. Sole proprietorships are
owned by a single person, who is usually also the person responsible for running the
business. All assets are owned by the sole proprietor and also all profits earned. Sole
proprietors are also responsible for all liabilities and debts. To the law, and for tax
purposes, the owner and the company are the same.

Advantages of a Sole Proprietorship

Easy and inexpensive to organize.
Owner is in complete control.
Owners decide whether to keep profits earned or reinvest them in the company.
Profits go directly to the owner’s personal tax return.
Easily dissolved.

Disadvantages of a Sole Proprietorship

Owners have unlimited liability and are solely responsible for debts and liabilities.
This means that their business and personal assets are at risk.
Sole proprietorships are at a disadvantage in raising funds and are usually limited to
using consumer loans or personal savings.
Potential employees may be discouraged by the fact that they cannot own part of
the business.
Some employee benefits are only partially deductible from business income.

PARTNERSHIPS
A partnership is a company owned by two or more partners. Like a sole proprietorship,
the law does not distinguish between the owners and the business. Partners should set
forth legal agreements as to how decisions will be made, how profits will be shared, etc.
There are also three types of partnerships that can be formed:

1. General Partnership
Management responsibilities, profits and/or losses, and liability are shared equally
among partners according to an internal agreement.

2. Limited Partnership/Partnership with Limited Liability
Some partners have limited liability (equal to their investment) and limited input to
management decisions. More complex and formal than a general partnership.

3. Joint Venture
Acts like a partnership for a limited time period or a single project.

Advantages of a Partnership

Easy to establish.
Multiple owners mean that partners can be found with complimenting skills.
Employees may be attracted to the idea of joining a company in which they can
become a partner.
Profits go directly to partners’ personal tax returns.
The ability to raise funds may increase with multiple owners.

Disadvantages of a Partnership

Partners are liable for not only their own decisions, but also those of their partners.
Profits are shared between partners.
Disagreements may arise between partners when making decisions.
Partnership may end at the withdrawal or death of a partner.
Some employee benefits are not tax deductible.

CORPORATIONS
A corporation is filed in the state in which it is headquartered and is recognized as a
legal entity separate from its owners. The owners of a corporation are shareholders and
elect a board of directors to make decisions for the company. A corporation can be
taxed, sued, and enter into contracts. A corporation does not dissolve when its
ownership changes and has an unlimited life.

Advantages of a Corporation

Shareholders have limited liability for the corporation’s debt or in the case of legal
judgments made against the corporation.
Can raise money by selling stock.
Benefits offered to employees are tax deductible.

Disadvantages of a Corporation

Requires more time and money to organize.
May result in higher overall taxes.
Monitored by government agencies and may have to complete paperwork to
comply with regulations.

LIMITED LIABILITY COMPANY (LLC)
A limited liability company, or LLC, is a new form of business ownership unlike a
partnership or corporation. LLCs combine the corporate advantages of limited liability
with the tax efficiencies of a partnership. Thus, formation of an LLC is more complex
than that of a general partnership. An LLC is owned by members whose ownership is
represented by their “interests”. “Interest” in an LLC is similar to “interest” in a
partnership or stock ownership in a corporation. Depending on how an LLC is managed,
its members may resemble partners in a partnership or shareholders in a corporation. If
members choose to have managers manage their company, they will act more like
shareholders. If they manage their company, they will be similar to partners.

Advantages of a Limited Liability Company

LLCs allow pass-through taxation, meaning that earnings are taxed only once.
The LLC owner’s liability is limited to what they have invested in the LLC.
LLCs are allowed to establish any organizational structure, allowing them to
separate profit and voting interests.

Disadvantages of a Limited Liability Company

More paperwork is required to form an LLC and documents must be filed at the
state level.
Some states require a dissolution date to be included in the articles of organization.
Unlike a corporation, which has unlimited life, certain events can be dissolution
events for an LLC, such as death of a partner or bankruptcy.
LLCs are a relatively new form of ownership and thus less familiar.

Credit Granters

There are literally millions of companies across the globe that offer business credit.  Some may ask for nothing more than a credit application and check that you have a phone number and will then grant you a credit line.  Others will want to see that you have a good business credit score to grant a credit line.  Others will want to look at your personal credit, but then issue the credit line in the business name.  Others will require a personal guarantee.

The key in finding companies that grant business credit is determining where they report your payment experiences.  If the credit grantor reports your information to the personal credit bureaus, regardless if you pay the bill through your business or the name on the account is in your business it’s still personal credit.  If the vendor doesn’t report anything to either a personal or business bureau it may help your personal credit but it doesn’t help the business, so you don’t want to work with these companies either.

You want to work with the companies that report your payment experiences to the various business credit bureaus.  You will typically find that trade credit or corporate credit is reported to bureaus such as D&B, Experian and several of the smaller boutique bureaus where as the bank lines of credit are reported to Equifax Business and Experian Business.

Large companies such as Dell, Office Depot, and Chevron all offer business credit as well as even the small mom and pop businesses. You will typically find that some of the easiest credit you can get is from the companies with the lowest and highest sales volumes in their industry.  For example, Sears and a local hardware store may be very easy to obtain credit from, whereas a regional store may be very difficult.