Businesses are built like pyramids: there are more employees working on the lower ranks, with all of them supporting the few big bosses at the top. Many major decisions, however, are made by those who govern, so that requests have to be taken through several divisions to be approved. From the bottom down, department after department hears requests for money, until finally, an approval is made and the person who needs the money receives it.

Although seemingly bureaucratic, such a system can save a company money, and can ensure that company money is spent only on things that the company needs. Emergencies, however, cannot be avoided. If a virus or malware suddenly enters the business computer network, all computers will be affected, and important documents may be lost if computers are not fixed immediately. Employees traveling on a business trip for the company may suddenly need paper at the last minute, to print out contracts. They may need to transfer to another country or state to catch up with a client at the last crucial moment. They may need to close a deal, buy equipment, or conduct business while away from the office.

With emergencies such as these, you may need a business credit card to cater to your emergency needs. A business credit card can ensure that your computers will be speedily repaired, and your network will be up and running in time for you to finish your reports. If your employees carry business credit cards while they are out on company-sponsored trips, they can make their emergency purchases, print out their reports, buy important equipment, and close their deals without worry. A corporate credit card, moreover, will keep your employees safe, as it can be dangerous to travel with large amounts of cash on hand.

There are now several business credit card packages available, all of them with rewards that you can use for your company. For instance, some business credit card packages allow airline miles to be added every time a purchase is made. Such a privilege can be useful for employee travel. Other business credit card packages can give you discounts at partner establishments, such as office supply stores, bookstores, and computer shops. Most business credit cards, moreover, have higher credit limits in order to meet the purchase needs of businesses. Moreover, if your business is in good credit standing, the credit card company can waive its obligatory annual fee.

With all these incentives, it can be difficult to track purchases made by business credit card holders. If you are interested in purchasing business credit cards for your employees, you must formulate strict rules and regulations on the use of these cards. Business credit cards should be used to purchase items, goods, and services that will be used for the company. If possible, purchases should be justified if the user is called upon for questioning.

Employees should be required to keep all their receipts from their business credit card purchases, and to present these receipts to your finance department for filing and checking. Such rules should also be printed out and posted for all your employees to see, and in order for your business credit card to not be abused.

If you are interested in a business credit card for your company, then inquire with your local credit card company on what packages are available for your needs. Examine each business credit card package in detail, and make sure that you get only what you need and afford. You can enjoy the privileges offered by your business credit card if your company’s purchases are made wisely and carefully.

Mario Churchill
http://www.articlesbase.com/finance-articles/rewards-for-big-jobs-the-business-credit-card-111035.html

If my business is constantly applying for credit. Do all the inquiries get recorded and lower my business’s credit score? Assume I am signed up with D&B, have an LLC with a separate TIN.

Yes, all credit inquiry is embedded on your total score. Every credit search, even if you search on yourself to check your status will show.

What exactly do I have to bring with me?

Credit card records do not provide enough details, since that only shows where you spend money, not what you spent it on. So as mentioned you should have actual invoices or receipts for any business expenses.

And if you pay anyone over $600 for contract work, you should either get a W-9 from them or deduct default withholding from payment, and file a 1099 for them with the IRS.

American Express not only looks at your FICO score, but your debt to income ratio when making credit decisions. If someone has a few credit cards even if they are not using them then they have the ability to charge and carry a balance. All of these things are taken into consideration when and if a person gets approved for an Amex card.

If you are looking for other types of business credit, like a line of credit at the bank, you will need a whole lot of documentation on your business and if it’s new, you will probably still need your personal guarantee.

You can work at setting up credit with vendors and suppliers. Those that carry their own accounts will usually give you some kind of terms after the first pay on delivery order. You can also list your company with D&B but that will require financial documents.

I would like to lease a vehicle in the name of my small business and am curious if my business credit score would be too low?

Does anyone know a general guideline on how quickly a line of credit is established for a small business?

Dun and Bradstreet has a service that monitors small businesses. You can look into having them evaluate your business. However, in almost all cases, you will be using your personal credit to secure funding or credit for your small business. I’ve owned a small business for 15 years and every bank account, credit card, auto lease, etc. I have ever acquired I did using my personal information and credit score.

Vendor lines of credit serve two important roles for businesses seeking capital. They first give a business access to products and services based on “net terms” ranging from 15 to 60 days. Secondly, vendor lines of credit can help businesses build their credit scores. In order to build a solid foundation for business credit, businesses must have one bank loan, three business credit cards, and five vendor lines of credit established to build proper business credit.

Another benefit of vendor lines of credit is that they are a lot easier to obtain, than a conventional business loan. Most vendor lines of credit are not secured because collateral is not required to obtain the line of credit. Credit lines are available for all products and services imaginable including office equipment, computers, and even gas for company vehicles. There are more than 500,000 businesses that offer credit lines to other businesses. Out of these though, only 6,000 report your payment history. This means that approximately 1.2% of all of the vendor lines of credit available actually help you build your business credit scores. It goes one step further, and out of the 6,000 that report to the credit agencies roughly 1,000 will allow you to obtain the vendor credit line without using your personal credit history.

You are probably wondering what is so special about business credit scores, and why is it so important to build them up. Many business owners and other entrepreneurs don’t realize that business credit works exactly like personal credit. Without personal credit you can’t purchase a car or house. You have to have a history of paying on your open accounts in a timely manner. The same principal needs to be applied to your business that you would apply to your personal credit. You also want to separate your personal credit from your business credit. This is essential for anyone that wants to properly establish and grow business credit.

If you have vendor lines of credit open with the other 98.8% of businesses out there you will only gain the credit given to you. This does you no good for the future because you aren’t building your credit score while you are using that vendor credit line. The most efficient way to build your business credit history is to have credit accounts open with companies that will report your payment history. This will help you get closer to your goal of being able to borrow the money you need to really grow your business. You have to remember to build your credit first, and then attempt to get the large business loan you desire.

Another benefit of always ensuring that you build your business credit is that after your initial launch you will have the credit backing you to obtain more money for rapid expansion. You can grow your business quicker than your competition with the access to the cash you need. This creates an ease of mind for the business owner and the business itself.

Just knowing the importance of building your business credit using such things as vendor lines of credit won’t be enough on it’s own to get you the capital you want. There are many other aspects to obtaining financing. If you follow all of the steps you will be in a position to get the capital you need and deserve.

Corey Pierce
http://www.articlesbase.com/non-fiction-articles/vendor-credit-lines-are-essential-to-any-business-seeking-financing-54145.html

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