Business Finance Tips Every Business Owner Should Know

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Business Finance Tips Every Business Owner Should
Know
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The Team at Midwest Corporate Credit Providing
modern day education and solutions for your
contemporary financing needs
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Business Finance Tips
Make credit card payments once a week rather than
once a month 
What is a UCC-1 financing statement and how is it
used?
Keep real estate and business operations in two
separate entities.
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Business Finance Tips
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Most business loan requests are declined because
they are submitted to the wrong bank
Know the Three Cs of business finance
Know thy business credit rating
Authorized user accounts and trade lines for
sale are slowly being phased out
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Make credit card payments once a week rather than
once a month 
Credit card issuers report balances to the credit
bureaus once a month.  By making weekly payments
rather than monthly payments, a lower credit card
balance will be reported on your credit report.
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What is a UCC-1 financing statement and how is it
used?
A UCC-1 (Universal Commercial Code-1) financing
statement is a legal document that a creditor
will file with the secretary of state to protect
his interest against any pledged collateral that
the debtor owns.  A UCC-1 is just like a mortgage
except its used for other assets that the
business owns instead of real estate.  Some
examples of collateral are receivables, vehicles,
equipment, etc.  Yes, its that simple!
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Keep real estate and business operations in two
separate entities
Keeping your business operations in a different
corporate entity than your real estate in which
the business runs out of will have multiple
benefits
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A business owner should know the difference
between a commercial bank and a retail bank.   In
general, commercial banks are business friendly
and will typically have underwriting guidelines
that are more liberal. 
Most business loan requests are declined because
they are submitted to the wrong bank
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Know the Three Cs of business finance
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Cash
Credit
Collateral
Cash Like the old saying goes cash is king.
Having liquid cash on hand sends a message to the
banker/ underwriter that the company is well
capitalized and risk of insolvency is
minimal. Credit  We believe that this is the
most important of all the Cs.  Credit gives the
banker/ underwriter a direct look at the business
and its owners financial habits and character. 
Past financial history is a good indication of
how the borrower will service the current loan
request if granted. Collateral  Having
collateral to pledge in exchange for a loan
lowers the lenders risk of loss.   If the loan
goes into default, the lender is entitled to
repossess the asset that was pledged and
liquidate it to recover the loan proceeds.
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Know thy business credit rating
Most business owners dont realize that their
business has a credit rating just like they have
a FICO score as an individual.  There are several
business specific credit bureaus that lenders use
to underwrite a business loan request.  Some
major bureaus are Dun Bradstreet, Corporate
Experian, and Commercial Equifax.
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Authorized user accounts and trade lines for
sale are slowly being phased out
What is an authorized user account?  It is simply
a credit account that a family member or a friend
owns that they add you on to. 
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