Do your clients run small businesses? 

Will an extra $30,000 to $1,000,000 help them in their business endeavors? [EDIT: the current max is $250,000, see This Post]

Contact me so we can find out if this program will benefit your clients.

New Affiliate Program for Helping People set up Business Lines of Credit


One of the companies that helps people set up business lines of credit is creating an affiliate program for me.

We are still putting it together but we've implemented enough to serve your needs.

The company issues an affiliate number and they send out your commission after a service contract is signed.  Actual timing for that is that they send out checks on the 5th and the 20th and it takes 8 days to process a payment and do their due diligence.  Completed contracts on the 12th get paid out on the 20th (the 5th depends on the end of the last month).

After you send in the signed affiliate agreement, I will set up a separate sign up page so you don't have to rely on the client to enter you as the referrer.  

Each client's situation is unique. They will be be giving me their personal information.  I will let you know that a conversation took place but I will not tell you what was said beyond whether we will be moving forward.  You may follow up with your client at your discretion.

If you are interested in an affiliate program for business lines of credit, Contact Me and we'll see if these programs would benefit your client base.

 

The main difference between business credit (also known as corporate credit) and personal credit is that personal credit is all based on the FICO of the owner of the business.  Business credit is based on both the PAYDEX score of the business and the FICO of the CFO of the business.

PAYDEX is like the FICO of a business it ranges from 1 to 100.  The optimum range is near 80. 

Personal Credit affects you FICO score.  Business Credit affects the business's PAYDEX score and has no effect on your FICO.

One of the common misconceptions is that you don't need to personally sign for a business line of credit.  Maybe 5-10 years ago when lenders were tossing money out the windows for businesses that might have been true.  Not any more.  The main difference is that the signer will be the CFO not the business owner.  Also, while the CFO has to sign for the line of credit to open it, if the company performs well then in about 18 months the CFO can generally be taken off the line of credit and the LoC will then be completely on the company.

The interest rates can be very different.  Most personal lines of credit have rates of prime plus 2% - 4%.  A properly set up and managed corporation or LLC can get rates under 6% even in today's market.

 

Here is one reason:

Most corporate credit costs Prime plus 2 - 4%.  In today's market that is between 8% and 12%.

However, if a corporation is set up correctly, you can get rates under 6%.  That can be a huge savings if business credit is going to be an active part of your business strategy.

 

The page Programs Available now appears in your navigation.

This is where I add programs as I find them and approve them.  So far, I have 4.  I'll let you know here when I add more programs.

 

They are in the business of collecting setup fees rather than helping you establish corporate credit.

One of my friends found one of these. They collected $5000 for each of two people that my friend was working with to establish corporate credit and it's been over a month with nothing happening except occasional "we're working on it" messages. That's $10,000 down the drain.

One thing that he did not do is check references of people who have established business credit through that company.

I won't publish their name here since I don't want to get sued but if anyone asks about a specific company, I'll let you know if I've heard of them and if I recommend them. If I've heard of them but don't recommend them, you have your answer (unless I give a specific reason why I don't).

Unfortunately, it is very hard to tell the good companies from the scams since the scams try very hard to sound like the good companies. So, always check references.

 

While every case will be different, there are several broad categories if things that must be done to get business lines of credit.  I'll outline those categories here and go into detail in further posts.

You need a CFO with a 720+ FICO score.

You need to start or buy a corporation of LLC.  You save a little bit of time if you buy but not as much as you could two years ago.

You need to acquire and use several small sources of business credit (credit cards, merchant accounts, etc.) and use them. In this step, you can acquire $50k - $300k in various small lines of credit (cash and trade credit).

You must show activity in the corporations bank accounts.

Once the corporation is 2 years old, showing activity and using your current business credit to raise your Paydex score to 80, you can start looking for the larger business lines of credit.

Check out the different Business Credit Programs I've found.

 

For business lines of credit, the key position seems to be the CFO. All of the lenders look at the CFO and the CFO has to sign for any credit (though after 18-24 months the CFO can usually be taken off).

This means that it doesn't really matter what your credit history is.  You just need to partner with someone who has good credit.  Note that the CFO will be responsible for the debts of the company so make sure that the CFO is comfortable with that risk and believes in the ability of the company.

As I stated above,  the CFO is only at risk for the first two years.  After that, if the business is doing well, the CFO can usually get his name off the loan.  That means that this will only be a 2 year risk for him.

 

I've been exploring methods of obtaining business credit for 1 year now. Until recently, I've run into nothing but roadblocks and scams. Fortunately, I haven't been taken in by any of the scams. Other's I know have not been so fortunate.

 

I will attempt to answer any questions you have about business credit.

Hit the contact me button above.

 

This site records my journey into the realm of corporate credit and business lines of credit.