Category: entrepreneurship

How to Get a Business Line of Credit?

What is a business line of credit? What is the difference between a secured and unsecured business line of credit? How do you get a business line of credit and is this the right path for your business to take? Today we will answer all of your questions concerning a business line credit. Just keep reading below.

What is a Business Line of Credit?

What is a business line of credit? A business line of credit is similar to a business card or a business loan; however, what distinguishes a business line of credit is important. A business line of credit is able to provide flexibility that a regular business loan is not able to provide. It also grants businesses access to funds that can be used to address business expense. The way that a business line of credit works is that it allows you to borrow funds up to a certain limit, and requires to you pay interest only on the specific portion of the money that you have chosen to borrow. This grants you flexibility, are you are easily able to draw and repay funds in the way that you prefer, keeping in mind that you do not exceed your credit limit and that you make your payments on time. In essence, you are able to reuse and repay your business line of credit as often as you would like to. In fact, most lenders grant you the ability to repay your full balance way in advance, in order to help you save on interest costs.

A business line of credit does not require disbursement the way that a regular business loan does, and instead, works similarly to the way that a business credit card does. It is subject to annual review and similar to a business credit card, the amount that you pay after you draw funds is accessible to be borrowed again, as you pay your balance.

What is a Secured Business Line of Credit?

What is a secured business line of credit? A secured business line of credit is a type of revolving line of credit. A revolving line of credit refers to a merchant or a bank that offers an amount of credit that is “always available” to a business for a certain amount of time. In the case of a business line of credit, a secured business line of credit allows you to use a specific asset as collateral, in order to secure the loan. This asset could include a home, a stock, a bond, or a car, for example. The way that this works, is that the borrower can take a hold of the borrower’s specific asset if the business does not repay the business line of credit debt according to the signed terms.

On the other hand, an unsecured business line of credit does not require the borrower to place any collateral under the business’s name. We will talk about more about the unsecured business line of credit and the way that it works in our upcoming article sections.

A business can use the funds from their secured business line of credit for multiple business-related purposes, including and of course not limited to daily business-related financial needs or specific business-related equipment.

Think about it this way: a secured business line of credit works similar to the way that a business credit card works, minus the monthly business credit card bill that you are required to pay in the case of a business credit card.

When you use your secured business line of credit, you are only required to pay interest only on the funds that you draw.

What are the Benefits of a Secured Business Line of Credit?

Because your creditor has the right to seize your collateral, your lender will typically offer your business better terms than in the case with an unsecured business line of credit. These better terms could include being able to borrow a larger sum amount of money, higher spending limits, and lower interest rates.

A secured business line of credit is an especially great choice for a new business. The reason for this is that new business will typically not have a financial history or a proven track record since they were recently developed. Due to such circumstances, new businesses are usually not able to qualify for an unsecured business line of credit.

One of the greatest advantages that come with obtaining a business credit line is that you will only be required to pay interest on the specific amount of the loan you actually used, allowing you to pay back the funds at a later time. This also means that your business can get away with taking our new loans every time that the business is in need of financial funds. This potentially helps businesses to avoid any additional credit inquiries and will lead to overall better cash flow for a business. A secured business line of credit allows you to manage your expenses with ease, without needing to instantly pay back your business loan. By using a secured business line of credit, you will grant your business the chance to focus on company growth and steer clear of the possibility of over-borrowing financial funds.

What is an Unsecured Business Line of Credit?

What is an unsecured business line of credit? An unsecured business line of credit is a type of revolving line of credit, just like the way that a secured business line of credit is. In the case of the unsecured business line of credit, however, no collateral is required in order to secure the loan.

Unsecured business lines of credits are typically more wanted amongst businesses than secured business lines of credits are, because no collateral is necessary to secure it. This, however, is something that makes an unsecured business line more difficult to obtain. New businesses, for example, may not receive approval to borrow the funds that they need, since the creditor is posed with a greater chance of risk. This poses stricter eligibility requirements, for obtaining an unsecured business line of credit. These requirements for eligibility include having a business be existent for a good number of years and also qualifying for a specific sales minimum from the preceding year.

If you are a new business and do not qualify for an unsecured business line of credit, you can always try obtaining a secured business line of credit instead. The main difference between a secured and unsecured business line of credit is the collateral that is used as a backup for the lender, in cases where the business fails to pay back all of its dues. Since a secured business line of credit requires a collateral backup, it makes sense that it will typically have higher spending limits, and lower interest rates.

What are the Benefits of an Unsecured Business Line of Credit?

What are the benefits of an unsecured business line of credit? There are several benefits that come with having an unsecured business line of credit.

The first benefit is that an unsecured business line of credit allows businesses to easily transfer money and cash necessary for business expenses. This transfer of money can be conducted in a number of course, online.

The second benefit is that an unsecured business line of credit grants businesses fast access to money. What this means, is that business owners can really use any amount of financial credit that they wish to use, whenever they choose to do so. This is especially advantageous in unexpected situations in which companies need an immediate financial resolution. With an unsecured business line of credit, businesses will have the opportunity to use the cash that is necessary, instantly.

The third benefit that comes with an unsecured business line of credit is that your business will be able to develop a strong credit history. When your business pays back the funds that are taken from an unsecured business line of credit at the due date, it will help the business to build a good credit score. This gives a business the advantage of being able to apply for future bank lines of credit, and the possibility of accessing much better terms in any future lines of credits, or loans.

The fourth advantage that is included in the benefits of an unsecured business line of credit is that businesses get to have flexible payments with substantial credit limits. This is one of the principal factors that distinguish an unsecured business line of credit from a regular business loan. A business is able to choose when the full amount that is owed is paid back, and schedule a payback date that can help the company to really focus on company growth.

How to Get a Business Line of Credit?

How can your company obtain a business line of credit? The first thing that your business has to do, is to figure out if it is eligible to qualify for a business line of credit in the first play. Qualifying for a business line of credit focuses on the following factors: your business history, your business credit score, and your business monthly and yearly revenue.

The first thing that a lender will do will be to inquire into your personal and your business score. Some lender will only look at your business credit score; however, most lenders will look into your personal credit score as well, in order to make sure that lending you the funds that you require will not pose a huge risk on the creditor. The stronger that your personal and business credit scores are, the more likely you are to get approved for a business line of credit, and the more options you will have concerning the process. A new business lacking a substantial business credit history will usually opt for a secured business line of credit since creditors in this situation will be more likely to approve them due to the collateral backup in circumstances in which your business fails to pay back its dues.

The best thing that you can do for your business is to apply for a business line of credit when your business is at its optimal best. This will grant your business higher chances of getting approved for the business line of credit that you prefer, and will also higher the chances of receiving a higher credit line amount.

To apply for a business line of credit, you will need your personal information, your bank statements, your financial statements, information about the stakeholders, tax returns, a debt schedule, and legal documents. Legal documents include your business formation document, your business license and registrations, any contracts that your business has with third parties, and lastly, your business tax ID. Once you apply, you must wait to see if you have been approved. If you are not approved, you can always look into other business line of credit options that are available to you at that moment.

Is a Business Line of Credit Right For You?

Do you need to manage your business cash flow? Does your business need funds to buy inventory? Do you suddenly have to pay for an unexpected business expense? If the answer to any of these questions is yes, then a business line of credit makes is definitely worth looking into.

If you are looking to cover your working capital expenses and finance your business in a flexible way, then a business line of credit is something that can prove to be especially convenient, helping your business to focus and finance on growth opportunities. Maybe your business is a startup and requires funds in order to cover payroll or pay for rent. Perhaps your business is undergoing new projects which are a must, or you need the necessary funds in order to purchase new equipment. If you are afraid that your company might have gaps in cash flow and you want to ensure the smooth running of your business, then the answer to “is a business line of credit right for you” is yes.

May 22, 2019
The New American Dream

Decades ago, the American dream was to get to the middle class, have a good job, build up some retirement and the crowning achievement was to own your own property and home. In the 1700’s and 1800’s, the dream was to have your own land that you could work, build up some crops, become self sufficient and raise a good family. For millions of immigrants leaving Europe and other parts of the world this was so much more than they could hope for when compared to the feudal system type life in their own country.

Fast forward a few decades and owning your home is far from the American dream, in fact owning a home is not really the investment that so many believe it is. If you pay cash for your home, you may feel great about owning your home free and clear, on the other hand if you were making 10% on that same money then you’d actually be making real progress and position yourself to build wealth and in that same time you’d “own your home free and clear,” then you’d be in a position to own 3 to 4 homes of the same value, that is the power of compounding investment income.

So stop doing something you hate, quit that job, and take action, the first step is to become an expert in a field that you know well and can provide a unique product or service for. Avoid trying to start a business or venture in an area that you do not have strong expertise in. One of the biggest mistakes I see is when people go start a restaurant and they have absolutely no experience in the realities of the restaurant industry.

All that said, it is not necessary to be the main business owner, maybe you should partner up with someone who brings different strengths and skills to the table or sometimes it is better to find an opportunity that you can join up in within the confines of a new startup and grow with that business. Bottom line, get started now and build your business or join a new business now!

September 24, 2018
The Entrepreneur’s Journey

As an entrepreneur, it can often at times be an up and down journey, one moment you are basking in success and profits and everyone loves you. The next moment, you’re failing, losing money and the haters are all in. That said, there are some keys that you can focus on and truly invest into so that your odds for success go up. The keys are to focus on developing a business idea, product or service that provides better value in a different way than anyone else in that market currently gives their customers. Persevering through adversity is a must and finding good people, read below for real stories of how to put this into practice.

As Mark Cuban says the great thing about being an entrepreneur is you only have to be right once. The Entrepreneur’s Journey is a lot like a roller coaster, the key to succeed is to maintain a laser focus on your end goals and then work towards them purposely each day, week, month and even year. Think about how incredible that fact is, in reality you could fail over and over again and if you can just get it right one time, then overall you will win and that one win will overcome and compensate for the failures you may have had previously. The ultra successful have all had failures, some of them big and some of them small, but they never looked at them as failures, just as part of their journey to success.

Look at the story of the Colonel, what an entrepreneur’s journey he had, that’s right our good ol boy from Kentucky, Colonel Sanders. For the majority of his life, he largely failed and had terrible timing. He opened up stores in different areas and events outside of his control like the great depression derailed his dreams. At the age of 60, he finally started to think about franchising his fried chicken recipe and concept. He went back to the one thing that he did better than anyone and that was to make some really good fried chicken. His spices that he put on chicken were unique and simply better than the competition. Because he only had to be right once, we all know about KFC. I’ve read that he nearly committed suicide, before starting up KFC, but fortunately he did not give up, he persevered and eventually succeeded.
Having gone through similar failures in business, I can tell you that maintaining that belief and that vision that you are going to persevere and figure out how to bring incredible value to the world with your product or service is what has kept me moving forward during tough times. This is what the Entrepreneur’s Journey is all about.

A year ago, we had a fledgling business with two employees doing 20k a month in sales and now fast forward a year later and we have 20 employees and we’re surpassing $200k a month in sales. I think the reason we’ve succeeded against the odds when we were working in my kitchen is that we created a product with more value than our competition provides. I think we also have been fortunate to find the best people. Human capital is the key to exponential growth, there’s no way you can do it by yourself, you need great people who are an extension of your business and idea. I truly love the people at our company. It especially takes great leaders, our executive team has been so dedicated, relentless and focused on finding solutions and making sure we are progressing each day. At the end of the day, there is nothing quite as powerful at growing a company like a positive company culture that is conducive to productivity. So fight like a Lion and make your dreams into the truth and never, ever give up!

March 13, 2017
Introducing the BUSINESS FUNDING FORMULA book

CHAPTER 1: WHAT IS THE BUSINESS FUNDING FORMULA?

Now that you’ve come across this book you’re probably wondering what exactly is the business funding formula and how will it help me? If you’re reading this, then you are either an entrepreneur or an aspiring entrepreneur and you have realized that if you simply had access to capital and funding you would have a real chance at building not only the business of your dreams, but the life of your dreams as well. The ability to secure capital can be the difference between success and failure in business, it is absolutely that important.
Before the recession of 2008 & 2009 it was not complicated to secure funding at your bank to launch or grow your business, but since then it has taken incredible creativity and knowledge to secure funding especially for a new business with unproven financials. Even for businesses with history and financials it is still difficult and even though several years have passed since the recession of 2008-09, banks and lenders still mostly lend to the top 5 to 10% of businesses and largely ignore the other 90% of small businesses who desperately need access to capital to have a chance to bring their products and services to market. To make matters worse the proliferation of many different high rate finance products and expensive lenders has made it even more confusing to find the best funding options to launch and grow your business.
The Business Funding Formula was created to give all business owners a step by step process to follow in order to secure the best funding possible to turn your entrepreneurial pursuits into the truth. The funding formula has existed for decades and has had tremendous effect on some well known businesses that you recognize and probably use on a weekly or even daily basis. Without these business owners’ understanding of the funding formula it is very likely that their businesses would not exist any where near the level they do or may not even have survived without the funding formula.
The business funding formula is the holy grail for jump starting your new or existing business. You’ve probably seen some studies done by ivy league schools and other organizations and many times one of the top reasons that new businesses fail is due to undercapitalization, a complicated term to describe running out of money. I don’t care if you are selling lemonade on a table outside of your house or a more complicated business model, it takes money to buy the cups, the lemonade, the table and the signs in the front yard to market your lemonade; so although it is popular to talk about starting a business without any type of up front money it is simply for the most part not part of the capitalistic world we live in. The business funding formula will break down the top funding options available for entrepreneurs including: SBA, unsecured loans, lines of credit, merchant cash advances, corporate credit, income and every funding option available on the planet today. Most importantly it will take all of this seemingly complicated BS and break it down into easily understandable steps to guide you to the best funding that you can possibly qualify for. It will also provide you with hacks and tactics to save thousands on any financing you need for the rest of your life. This book will also pull back the curtain to how your credit score is calculated and how lenders make lending decisions. The business funding formula is a tool that every entrepreneur needs in order to achieve massive growth for a business.

Buy the Book here!

February 6, 2017
Scarcity vs Abundance Mindset

So there is a mindset in the world that dominates most people it is known as the scarcity mindset vs the abundance mindset, unfortunately this type of thinking is what keeps us from starting or growing a business or from investing money into improving ourselves, it also leads us to believe that because someone else we know has succeeded that it is now less likely for me to succeed.

Probably 90% of the world subscribe to the scarcity mindset, while the other 10% believe in an abundant mindset, this video is all about finding those differences and becoming part of the abundant mindset. The 10% of those that believe in the abundant mindset oddly have these incredibly positive experiences that come their way. when they confront challenges or problems they do not allow those hurdles to keep them down for long, let’s look at why this is.

Unfortunately most of us were raised on a scarcity mindset. There isn’t enough success to go around if someone wins, then you have to lose, if the Jones are doing well financially then many people are not and therefore we are not doing well. Terms like we can’t afford it, just be grateful for what you have become the norm and this is downright depressing because we fight the thought of being ungrateful and also at the same time being satisfied with mediocrity. Neither of which is what we want. The good news is it is so possible to be grateful and yet not subscribe to accepting mediocrity, but believing in an abundant planet where there is infinite success. You’ve probably heard more people say we can’t afford it before. This terminology goes direct to the problem of scarcity mindset. Yes, right now you might not want to purchase that $50 steak, however when you focus on creating abundance in your life and realize it is possible and if you focus on doing so by starting a business or working at a startup with incredible opportunities now your mindset begins to change and so does your ability to create an abundant life. Enjoy the video and live an abundant life.

December 29, 2016
The Power of Belief

The last 6 months has been simply ludicrous in terms of the hoopla surrounding the 2016 presidential election between Hillary Clinton and Donald Trump and I think we can all agree that the results have been even more shocking. Even for those that supported Trump they were incredibly shocked at the results of the election on November 8th. That said and regardless of whether you support Trump or not there are some very important lessons to learn about the power of Belief.

Be Unreasonable

Whenever the media would ask Trump about the polls which showed he was losing substantially if he was worried or concerned his response would always be unreasonable in that he would not even entertain the thought, but would instead say things like we are doing very well in the polls or we’re going to win in Florida, Pennsylvania and make history. Even the most ardent of Trump supporters had a tough time agreeing with those predictions because nearly all of the news and polling showed Trump losing nationally and in each of those states. Due to the power of belief that Trump had in his mission to become president and the fact that he was completely unreasonable and nonobjective about his chances for winning there is no doubt that this connected with his voters in those rust belt states of Wisconsin, Iowa, Ohio and Pennsylvania.

Feed the Belief

Take an honest evaluation of your own belief in the goals and things you want to achieve with your life, when doubt creeps in to your mind or comes from those that love you and let’s be honest often times those that love us are the biggest naysayers and doubters of our goals and missions in life, so ask yourself do you entertain those doubts or are you unreasonable and do you feed your belief with consistently positive assertions that you WILL accomplish your goals? The power of belief becomes powerful when each day we review our goals and write them down and continue throughout every day for weeks, months and years we feed in to those beliefs with constant positive affirmation and of course massive action towards those goals. If you are a whiner, negative in any way or entertain doubt you will lose, if you refuse to give in to those doubts regardless of where they come from then success has a chance to enter your life!

November 19, 2016
To be Self Aware is to Be Successful

One of the biggest epidemics is that we constantly lie to ourselves. ‘Excucitis’ is a little disease that lives inside each of us. 90 percent of the country are not making six figures. Being self aware is being honest with your shortcomings.

Be aware of your weaknesses and bring in other experts that fill the gap in those areas and always be learning from those around you. Don’t be afraid to take honest constructive criticism. The majority of the population live with excuses to make themselves feel better.

Being self aware is vital to having a successful business. Find the weak areas and make them strong! Remember, it’s okay to fail and make mistakes. Pick yourself up and learn from what went wrong. You really only ever fail if you give up.

Look for mentors and those who have already crossed the peaks that you are looking to climb. Be self aware of new skills that you must learn. We often have this idea that being humble is about staying quiet and acting somewhat introverted and from what I have constantly seen from incredibly successful people is that they were bold in looking for mentors and books to teach them to accomplish what they want to do. Yet they were humble enough to look for the answers by digging deep to find mentors and in particular information online and hidden in key books that will guide them to success. That means you must be self aware of your strengths and the knowledge you are missing so that you can find it in a mentor or books.

For example, let’s say you have a teenager or two that is becoming difficult for you to manage and guide to success. IF you are humble that means you will dig into great books of experts who have figured out some simple keys that lead to success with raising teenagers. This is true really with any topic that you wish to gain mastery over so don’t hold back, go for it, make it happen, be aggressive in searching for others who have succeeded where you want to. Be opportunistic in looking for mentors. Today in church I came across a big time real estate developer and you can bet that I will bring value to his life so that I can earn time and wisdom from him. Life is that simple, find mentors, tell yourself the truth and know your strengths and weaknesses and you will rise above it all!

September 19, 2016
Who are the top 1% in the US?

So when we think of wealth (the top 1%) in this country often we think of movie stars and professional athletes, sometimes we think of tech founders and often we think of wall street. Wikipedia and government reports show that the top 1.5% of US households earn about $250,000 per year which according to many politicians is supposedly rich or on a path towards wealth. So with that as the backdrop to the definition let’s jump in to what the top 1% of earners in the US are doing in order to earn that amount of income so as to join the well known 1%.

An article from the Wall Street states this about the top 1%, “We know from other research that, by rough estimates, 90 out of 100 men and women reaching this income level are self-made with little to no inheritance. Almost all have college degrees. Men dominate the field, and almost all own or started their own business or work as an executive for a large business.” So 90% of them are self made and almost all own or started their own business which of course is no surprise to me, often we think of celebrities and others well known in the media, but the vast majority of the top 1% of earners in this country are entrepreneurial business owners.

In this world of value creation we are all compensated fairly or unfairly on how big of a problem we solve, for example: if I’m hungry and go to a restaurant to find food, the restaurant employees may be compensated a small hourly wage because many people are able to solve that problem. On the other hand if I need hernia surgery there are many fewer humans capable and instructed to be able to successfully perform such a surgery. So if we want to join the top 1% then we need to be able to solve big problems. The good news is that there are plenty of problems that you can solve without having to go to 8 to 10 years of college and another 4 years of 80 hour per week residency training. In fact with the technology and spread of the internet it has never been easier to create a product or service that can be sold online to 1,000’s of potential customers and earn sufficient income to join the top 1% of earners in America.

Bottom line if you wish to join the top 1% of earners in the US you need to create businesses that solve problems, those businesses can provide a product or service that solves problems, just to give you an idea of how easy it can be, a few years ago, in the early 2,000’s a guy was asked by his best friend who was getting married, to give a best man speech at his wedding celebration. He had no idea what he was going to say, so he read some books and did a lot of thinking on the subject and gave an incredible speech. Then he took everything he learned and put together an e-book for $19.99 and put it on a simple website. He literally sold 1,000’s of that e-book, then he did one for the bride’s maids, mom’s, dad’s and others who had to give speeches at weddings, he did all of this with very little technical knowledge and even today continues to earn incredible money from this one e-book. That one creation put him in the top 1% of earners. So go and create!

July 4, 2016