JJplace Computer & eBusiness

Business Finance

 

Sole Proprietor Entity Type

Included in Business Finances, one must consider Business Credit.  Business Credit is affected differently by the way that your business is configured (AKA, "Business Entity") .

 

In the U.S.A. , If you are a Sole Proprietor (and some other Entities. Check with http://www.irs.gov for Entity Structures),  your Business Credit is your Personal Credit. Thus, whenever you use credit for personal or business related spending, you are creating a credit report action of yourself. The far reaching implications here is, under current credit philosophy, the more activity a person has, the higher the risks to a lender!

Some Business interactions include:

  • You may need bulk supplies and a line of credit or term payment for your business Assets and/or Inventory.
  • You may be using a 'formal Business Plan' to acquire Capital finances for your business.
  • You may have a personally weak credit background.
  • Over-active Personal Credit may be interpreted as irresponsible and reckless business financial habits.

For the above mentioned reasons, a Business should have a Business Line of Credit and a Business Credit card dedicated for business.  The Business owner(s) may need additional Business Credit but, definitely maintain a separate Personal Line of Credit.  There are financial solutions from companies that can accommodate both Business and Personal from one (1) company.  Remember- Business or not, it still reflects on your personal credit power!

 
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Shareholder Entity Type

If your Business is a Corporation type (or other similar Entity), The Business Entity may establish a Line of Credit and Credit Profile of it's own.  That is to say,  if your company is "ABC, Inc.", and it is a corporation or similar type of Entity, and you are a 'shareholder' or 'corporate officer', then ABC, Inc. may have credit of it's own just like a person- in addition to whatever credit you personally have (or don't have).  (Note: Some states, like Delaware, allow for single ownership of 100% of a Business Corporation shares, thus effectively creating a 1 owner-separate Business Entity.  The financial issues are the same as multiple shareholder Entities.  For more information, Click Here to compare or Incorporate or form and LLC- today! )   

Accept Credit Cards

Additionally, lending institutions and Wholesale Business-to-Business (B2B) vendors, view active Business Entity credit use as a positive financial asset and lowers the Risks fears.  In personal credit, a lender looks to see if one has too many open accounts or too many attempts to get credit as evidence of debt problems.  

In Business Entity credit, a lender looks to see if the Entity is doing trade/business/transactions with anyone.  The more, activity the lender sees, the more it appears the Entity has an ongoing business worthy of investing in (giving a loan, purchase order, Term accounts, etc).

Business Entity or Not, both Business concept structures have Accounting and Financial benefits and weaknesses. Solution providers like Electronic Transfer, Inc. (Accept Credit Cards - Free Credit Card Processing Set Up), can provide immense help in your financial needs.  Additionally, a business, regardless of it's structure should be registered with Dun & Bradstreet (http://www.dnb.com/us/). 

Repair Your Credit Report

JJplace's very, overly, simplified D&B explanation:   Dun & Bradstreet  provides to Businesses and vendors, a place to measure the credit and trade health of a Business.   If your business has no credit (regardless of Entity), bad credit, or great credit, D&B can be of assistance in helping your financial goals.  D&B has much, much more to offer than what we have mentioned here.

Every business can benefit from having a "Dun number".  Dun & Bradstreet will issue a number to it's registered members.  This number is used in many ways including as a credit 'lookup id' of a Business Entity.  It is fairly common, for example: ABC, Inc wishes to bid on a  government contract; The governing agency may require on the bid that ABC, Inc supply it's "Dun Number".  

You should be cognizant that currently,  to obtain a 'Dun Number" is a free registration.  D&B has wonderful additional services that may or may not require fees.  Please visit, www.dnb.com/us/ to obtain more information on Dun & Bradstreet.

 

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