Common Pitfalls in Business Credit Cards and How to Avoid Them

December 17, 2018

By Linsey Knerl –

Almost every modern company runs on some form of credit these days. Even the most profitable businesses benefit from having a line of credit available for emergencies, well-planned purchases for perks, or improving their credit score. According to the Small Business Administration, 65 percent of small businesses rely on credit cards, but just 50 percent use business cards in the name of their company. This strategy can potentially harm a business owner’s personal credit, and it limits the opportunities to get business funding in the future.

If a business credit card is the wiser choice, why doesn’t everyone get one? For being a very astute business move, cards have their drawbacks. Here are some of the ways that business credit cards can do more harm than good and keep you from achieving the most important growth goals.

High Interest Rates

While all cards carry the risk of higher interest and APR terms, business cards are more often characterized by these more expensive fees. Rates range by credit-worthiness, amount of credit available, and bank, but expect to pay much more for the ability to borrow money than you would for a traditional business loan. If you expect to pay back the money in a timely manner – or, better yet, pay it all off every 30 days – this isn’t so much a concern. The average company carries a balance from statement to statement, however, and the interest rate is a major factor in what it costs for them to access funding.  (more…)

4 Benefits of Monitoring Your Business Credit

October 15, 2018

By Connor Wilson –

Monitoring business creditYou don’t need a new year to resolve to work on your credit. It’s a common goal, and as people look to buy a home or a new car or get out of debt, credit monitoring becomes a hot topic. If you’re a small business owner, you might be surprised to know that you don’t just have a personal credit score, you also have a business credit score to think about. In a Nav survey, 45% of responding small business owners did not realize they had a business credit score, 72% didn’t know where to find information on their business credit score, and 82% had no idea how to interpret their score. If you fall under any of those categories, it’s definitely time to learn more about your business credit score.

Running a business means time is at a premium, so why should you invest time in monitoring your business credit? Here are 4 benefits of keeping an eye on your business credit score.

1. More timely dispute incorrect information

Credit bureaus are far from perfect, and they make mistakes. This is true for personal credit, but almost more so for business credit. Having an incorrect tradeline on your credit report can wreak havoc if not taken care of promptly, and often they are left for months or even years, much to the surprise of the impacted individuals.  (more…)

This New Service Can Help You Build Business Credit Faster

September 17, 2018

By Gerri Detweiler –

ArrowsMany entrepreneurs find the process of building business credit frustrating. It’s not terribly difficult, but it does involve a few steps, the most important of which is to obtain accounts that report to commercial credit agencies. By paying those bills on time (or early) and keeping your debt in check, you can help build strong business credit. But because many small business bills aren’t reported to commercial credit reporting agencies, business owners may find themselves with little credit data on their reports.

But there’s a new simple solution that can help business owners build credit using accounts they already pay, and it’s fast and easy. Here’s how it works.

You set up an account with eCredable, a service designed to help small business owners build credit using bills they already pay. You can link specific types of bills (see below) to eCredable, which then reports that information to commercial credit reporting agencies. Those accounts, when reported and paid on time, can help build business credit. Currently eCredable works with Experian and Ansonia and expects to report to another major business credit reporting agency in the coming months.  (more…)

6 Confusing Small Business Loan Terms Defined

September 4, 2018

By Megan Tyler –

LoanGetting a business loan can be tough. You know the ins and outs of your own business, but you might not know how to get the funding you need. To make matters worse, small business lending is full of confusing financial lingo that you may not understand. If you need a crash course in business lending lingo, here’s a quick rundown of five confusing small business loan terms.

APR

You see APR everywhere when applying for financing, but you might not remember everything that goes into calculating the APR for different types of financing.

APR stands for Annual Percentage Rate, and it estimates the overall annual cost of a loan including fees and compounding interest. This means that when looking for business financing and credit cards, an APR is often a better point of comparison than the interest rate alone. If your loan doesn’t give you an estimated APR, you can always use an APR calculator to get an idea of how much your loan will cost.  (more…)

Where Can I Get My Dun & Bradstreet Rating?

July 23, 2018

By Megan Tyler –

FinanceWhether you’re competing for a government contract or trying to secure favorable terms for a loan, a solid Dun & Bradstreet Rating can help you take your business to the next level. As the oldest credit bureau in the U.S., Dun & Bradstreet (D&B) deals only in business credit and is often the go-to credit agency for the the federal government and other high volume lenders. But how do you get your D&B scores?

Business credit works differently from personal credit. Unlike with personal credit, you aren’t entitled to one free business credit report per year, and lenders aren’t required to tell you if they turned you down for a loan based on your business credit score or lack thereof. Many business owners may not know how to interpret their business credit, and that goes doubly for a multi-faceted rating like Dun & Bradstreet’s.

Dun & Bradstreet’s credit rating process can be separated into two ratings that lenders can use to evaluate a business’s creditworthiness: the D&B Rating and the D&B PAYDEX® score. These two factors work together to inform lenders about a business’s credit risk.  (more…)