Hope you had a great holiday and I wish all of you a prosperous new year.  I have not posted anything in a couple weeks since I have
been busy working with a number of clients.

The Business Credit Landscape of 2011

The business credit landscape of 2011 has been a pretty tame one in comparison to 2010. Most of the changes happened in the beginning of the year and this seems to be a trend. Although there has not been many game changing events this year, there are a few note worthy changes that we should be reminded of.

1. DnB discontinued eUpdate and has now renamed the program iUpdate. For those of you who do not know what this is, please read My article on the changes for detailed information. Although iUpdate was introduced in late 2010, eUpdate was actually finally completely discontinued in January of 2011.

2. A few of Citi backed Business Credit accounts have increased their requirements. In an attempt to reduce the number of defaults occuring with Citi’s business credit accounts, we have seen an increase in requirements on a couple of their accounts. Staples, BP and a few other accounts now require a 3 year old corporation and an annual stated income for $5 million in order to be approved for their revolving business credit account with no PG.

3. A few of the started accounts that we usually rely on have increased their initial order to $100 but there has been a number of new starter accounts that I covered in previous posts that have come on stream.

4. DnB has made is more difficult to get your DUNS number for free as they keep playing their games. Here is the new way to avoid their tricks that I covered at the end of last year.

5. With these increases in requirements of starter accounts, we have come to the conclusion that it is not worth wild to build business credit with a brand new corporation is you do not plan to use a PG.

CreditRich in 2011

In order to accommodate for various changes in the Business Credit landscape, CreditRich has also made a few changes to better service our clients. Some of the major changes are:

1. The Business Credit Bible is now free. Many people keep asking why I will  give away such valuable information and the bottom line is this. Business Credit is not going anywhere and it is not rocket science. I have used this knowledge to make a living and I am sharing this with you in hopes that you will do the same.

2. Shelf Corp Magic is now $47. This reduce in price does in hand with the fact that it is a little harder to acquire business credit now and we are making it attainable to anyone to achieve.

3. In line with the lowering of prices, Creditrich is now offering the lowest prices on Shelf Corporations on the market and they start at $350 for a 3 year old corporation.

4. A valuable lesson was learnt in depending on funding from a leaseback option in the beginning of the year and you can read about it here.

The Business Credit Landscape of 2012

It is hard to say exactly what we can expect for this coming year, but if we take any cue from the last four year, we should see the major
changes in the industry happen in the beginning of this year. Business Credit is something that will never go away, but the requirements will change. In following with 2010 and 2011 we do expect to see credit requirements to loosen a bit and to see a few more accounts come on stream.

CreditRich in 2012

CreditRich as a company will continue to tailor its service to the changes in the market. We did so in 2011 and we will do so again in 2012. I encourage all of you to start building business credit for 2012 even before you need it.

Which doesn’t mean they won’t be able to open a bank account. ‘Bad credit bank
accounts’ – also known as ‘basic bank accounts’ – are there to help people in that kind
of situation. They’re available to people who’ve had problems with their credit rating
and as a result can’t open the kind of bank account that comes with features like
overdrafts and cheque books.

They might be ‘basic’, but bad credit bank accounts still let people do the essentials,
like pay money in, arrange Direct Debits and withdraw money. A lot of them come
with a debit card as well, which can be extremely useful.

You can find out more about this kind of bank account on this website.

What if I’ve been made bankrupt?

If you’ve been made bankrupt recently and you’ve not yet been ‘discharged’ from
bankruptcy, you might find that even a lot of basic bank accounts are out of reach. If
this is the case, you’ll need to find one that’s open to undischarged bankrupts.

What if I want an overdraft?

If you can’t open an account with an overdraft, there’s probably not much you can do
about this – for the moment. Opening a basic bank account can really help you stay
on top of your finances and make sure your bills get paid on time, which can help
you improve your credit rating over time, so you can apply for an account with an
overdraft later on.

Having said that, do you really need an overdraft? If you’ve run into troubles with
your money in the past, having access to an overdraft might not be the best idea
anyway, if you’re trying to improve your money management skills. Many people find
that living without an overdraft makes it easier for them to stick to a strict budget -
and harder to get into debt.

The Scenario

I am currently working with a client out of Austin Texas who has a music studio and does a lot of visual and audio editing. When working with clients(as some of you may know) I try to get an idea of what business you are in so that we will know what vendor accounts will be more beneficial to obtain than others so we generally try to go for the appropriate accounts first rather than to just keep adding account to your file. He had a brand new corporation so we went ahead and acquired a 4 year old corporation for him for $150(which was part of our $199 per month service). Once we acquired the company, we built it up over a two month period where we get starter accounts, some gas cards and it currently has 11 tradelines with a high trade of $4200. So I was talking to the client about what he needs and he express his need for some new audio equipment and some Apple computers. (In a future post I will be writing about the various option we have for leasing all kinds of equipment, but this post will focus on my client’s need for Apple computers). So I felt that the company was definitely strong enough to get him financing with Apple.

The Approval Process

I have gotten approved for Apple financing on many occasions. Previously all Apple business financing was done through Bill Me Later Business. BML no longer does the financing for Apple. When getting financing for Apple I cureently use two options.

Option 1

Go directly to apply and apply for their business lease.

If you go to Apple’s page for commercial financing you will see that they have three options for leasing equipment. All three options have a minimum leasing value of $2500 for new leases and a term from 12 to 60 months. The three options that they give you simply give you various options of buying the equipment after, trading it in for new equipment and various monthly payment options which will help with your business cash flow. All three options offered by Apple are backed by Direct Capital and they will usually get back to you within 48 hours of the application via email to let you know if you were approved. The application does not require a pg or an SSN if your corporation is more than 2 years old. They do require a number of references. The application can be viewed on the website provided. With my client’s application, we requested a $7000 limit and was approved with a 36 month term with a $1 purchase option lease. The client was happy and this was a pretty straight forward application. I usually use the second option if a client needs more equipment leased from the same company. You must know though that Direct Capital has some negative review by various clients who have had issues with them but I have not had any issues personally. I also feel that if Apple trusts them then I can.

Option 2

Northern Star Leason Company

Northen Star is a leasing company that leases a wide range of equipment for businesses and does much of its leasing with No Pg. I usually use them an a second option for leasing Apple equipment as well as other leasing needs that myself or my clients may have. They are pretty easy to deal with and usually get back to clients within 4 hours of their application(which is amazing). The seem to have a good reputation with clients and are very flexible on  their financing terms.

In an upcoming post I will be writing about a number of leasing companies that do equipment leases without a PG and this company will be one of them. I hope that you too will have success in building business credit.

Marc

Damian’s Company Stats

So I have worked on a company for Damian about 4 years ago but he was working on another company on his own. The company that he is currently building business credit with is now 1 year and 7 months old with an 80 paydex and 6 tradelines and a high trade of $400. The companies that he had accounts with were Uline(net 30), Grainger(net 30), Nebs(net 30), Rapid Forms(net 30), AT&T land line, Sprint Wireless(2 lines but approved for 10), Quill(net 30), Reliable(net 30) and Seton(net 30). At this point he thought he was ready to apply for some revolving vendor accounts so about a month ago he applied to Staples and Office Depot and they both denied him. We know that Staples now requires a 3 year old corporation, but we both were not sure why Office Depot denied him.

A couple weeks past and he did not know what to do. He did not want to go and get any more of those starter net 30 accounts and he did not want to get denied by anymore revolving accounts. He considered purchasing some business credit tradelines but simply could not afford them at the time. With nothing to lose he decided to apply to of the companies that offered revolving accounts but applied for their net 30 accounts. In the last two weeks he was approved for Staples Net 30 for $1000, Office Depot Net 30 for $1000, Pep Boys net 30 for $5000, Amazon net 30 for $6000 and a Tech Depot Net 30 account for $2000. He also asked the rep with Staples and Office Depot if it will be possible to upgrade to the Revolving Accounts in the future and they both said sure. One rep suggested that he can apply in 3 months but if his business credit file get stronger within the next month he can go ahead and apply.

We know that the goal is to get to those revolving accounts, but this just shows you what perseverance and creativity can do. I have no doubt that in the next few months he will have all those accounts on revolving terms as well as some gas card and a few cash cards.

Marc

The Client’s Email

Hi Marc

I hope this helps and feel free to email or call me with any questions or concerns.

The Client’s Email

I’am very interested in shelf corp with established credit. I would like to get enough credit to buy a business. Tom Kish has a program that you pay him & he will have someone with excellent pg credit be your cfo, then he will get you lines of credit or borrow amounts of cash, then he will take 6 months of payments to payback loans then after 6 months he will not be your cfo anymore. Does this sound legit because I have heard negative feedback but there is always negative feedback it seems.. appreciate it.

My Thought on Thomas Kish and This CFO Program

So I have previously talked about Tom Kish and the fact that his information is misleading and offers more than can be delivered. In the past he has offered programs that claimed to acquired $150k in No PG credit with one corporation. This hasn’t been done since the good old days in 2005-2008. It seems that now the cat is out  the bag he has changed up. As the client said in his email, they are offering a program where someone with excellent credit will be added to your company as a CFO and they will use his/her credit to apply for business lines of credit. I have heard about this program before but as this client brought it up I decided to do some digging.

I could not find that specific program on any of his websites so I decided to call. From what you rep told me on the phone, if you have a two year old corporation, you can pay $3000 up front to have one of their”clients” added to your corporation and they will pg some business lines of credit. Tom’s company will keep 6 months of payments to ensure that the first 6 months are paid and then the pg is removed and you are responsible for the credit from that point. They also wanted a back end fee but that was dependent on how much credit was acquired.

In theory this all sounds awesome but there are a couple things I do not like about this program. The upfront fee of $3000 is a bit high and should be taken from the back end once he produces. If there is such a high upfront fee there should be no back end fee. The other issue I have is the fact that in a time where good personal credit is very hard to come by, I find it hard to believe that there are loads of people willing to pg corporations of people that they do not even know when they can do it themselves. I have seen one other similar program a couple years back and it turned out that they were using CPNs to pg all the corporations and not letting the client know. These are just two little problems that I have with this program but here comes the kicker.

A few years ago it would be possible to remove Pg’s from business lines of credit after a few months but this simply does not happen anymore. I have spoken to many underwriters and local bank managers and it is just too risky at this point. Many banks who previously did not report to personal credit(solely business credit) now reports to both. Banks are going the other direction now. The fact that this service simply is not available anymore makes me wonder what is really going on with the services that Tom is offering through his company.

Marc Augustine

The Cards

Chevron/Texaco – #1 Choice

Requirements: PG = No, Paydex = 75+/No, Age = 2 years,  Income = N/A

Details: Chevron/Texaco has 2 business credit cards thats can be acquired with No PG; Chevron and Texaco Universal Business Card and Chevron and Texaco Business Card. The C&T Universal card is a Master Card and can be used anywhere Master Card is accepted. Both cards can be revolving but the C&T Business Card can be acquired with Net 30 terms without a paydex.

Application: http://www.chevrontexacobusinesscard.com/index.aspx

BP

Requirements: PG = No, Paydex = 75+, Age = N/A

Details: BP has 3 business credit cards thats can be acquired with No PG. Two fuel cards and a MasterCard. When applying to BP, I usually go for the simplest card, to increase the chances of getting approved, and then go for the MasterCard. The BP Fuel cards are revolving accounts but the BP Master Card is usually a Net 30 account, but I have seen a few companies with really strong credit, get a revolving account.

Application: http://www.bpbusinesssolutions.com/Index.aspx

Shell

Requirements: PG = No, Paydex = 75+, Age = 3 years, Income = $1,000,000 per year

Details: Shell has 2 business credit cards thats can be acquired with No PG. Both are fuel cards but one has an additional option of also paying for oil and maintenance. The only negative about the Shell Fleet Plus compared to the Shell Fleet Credit Card is that the “Plus” is a net 30 account and the Shell Fleet can be revolving. Shell does require your corporation to be 3 years old and have $1,000,000 in stated income on your DnB file.

Application: http://www.citibank.com/us/cards/shell/compare-b.jsp

Conoco , Phillips 66 and Union 76

Requirements: PG = No, Paydex = 75+, Age =3 years,  Income = $1,000,000

Details: Conoco, Union 76 and Phillips 66 have three options for Business Credit Cards with No Pg.

There is the Conoco Fleet card, which is a Net 30 account. I have done some research to find out which company/bank backs this card but I was unsuccessful in finding this information. This account is also limited to paying for fuel at Conoco stations. It cannot be used for maintenance or oil changes. You need at least a 75 Paydex to be approved for this but you there is no age requirement for your corporation. This is a solid card which will help you build your business credit file.

The second card is the Conoco Universal Card. This card is backed by Wright Express and can be used at 90% of all fuel providers nation wide. Like other Wright Express cards, you can use this card at many locations that cover parts and maintenance on vehicles. The one downfall I see with this is the fact that it i sa net 30 account and you do also need a 75+ paydex to be approved.

The third and final card offered by these companies is a card that covers Conoco,Phillips 66 and 76. It is the best card offered by these companies. It is revolving and backed by Citi bank. You do need a 3 year old corporation, 75+ paydex and $1,000,000 in declared income on your business credit file. In my experience they usually start you off with a limit between $2000 and $5000 depednding on the strength of the business credit file.

Application: http://www.conoco.com/creditcards.aspx

Sunoco

Requirements: PG = No, Paydex = 75+, Age =3 years,  Income = $1,000,000

Details: Like the previous company, Sunoco has has three options for Business Credit Cards with No Pg which are backed by the same banks.

There is the Suntrak Fleet card, which is a Net 30 account. This account is to paying for fuel at Conoco stations. It cannot be used for maintenance or oil changes. You need at least a 75 Paydex to be approved for this but you there is no age requirement for your corporation.

The second card is the Sunoco Universal Card. This card is backed by Wright Express and can be used at 90% of all fuel providers ntion wide. Like other Wright Express cards, you can use this card as many locations that cover parts and maintenance on vehicles. The one downfall I see with this is the fact that it i sa net 30 account. You do also need a 75+ paydex to be approved.

The third and final card offered by Sunoco is the Sunoco Corporate Fleet Card. It is the best card offered by Sunoco companies and it is revolving and backed by Citi bank. You do need a 3 year old corporation, 75+ paydex and $1,000,000 in declared income on your business credit file(like other Citi backed cards).

Application: http://www.sunocofleetcards.com/fleet-card-comparison.php

Exxon Mobil

Requirements: PG = No, Paydex = 75+, Age =3 years,  Income = $1,000,000

Details: Exxon offers an ExxonMobil Business Card that is backed by Citi and is revolving. It is one of the first Revolving Fuel Accounts that you will get in your business credit building process. You do need a 3 year old corporation, 75+ paydex and $1,000,000 in declared income on your business credit file.

Application: https://www.citibank.com/us/cards/exmbl/index.jsp

Arco

Requirements: PG = No, Paydex = 75+, Age =2 years,  Income = N/A

Details: Arco offers two cards, the Arco Business Solutions Fuel Card and the Arco Business Solutions Mastercard.

The Arco Business Solutions Fuel card can be used at any Arco station nation wide. This card can be revolving or Net 30, depending on teh strength of your company.

The Arco Business Solutions MasterCard can also be Net 30 or Revolving. I usually acquire the fuel card first and then upgrade to the MasterCard after a few months of use.

Application: http://www.arcobusinesssolutions.com/

Marc

Why is this Stage the Hardest?

Before reading this, you should already have an idea of the process and various stages involved in building business credit. If you do not have a clear idea, I earge you to download the business credit bible for free.

The beginning stage of building business credit is the most difficult for many reasons.

1. You Really Have No Idea What you are doing.

Although you may have all the information that you need to build business credit, if you have never actually done it before, you really do not have any confirmation that it works. You will have your doubts and you will not want to waste any time, and this will add to your inaction. If you get this feeling, understand that there is nothing advantageous in doing nothing, so just pick yourself up and get to work.

2. DnB

Dun and Bradstreet is the major player amoungst the business credit bureaus. The sad thing is, because they are not regulated, they tend to do what ever it takes to get you to spend money with them in times when you do not need to and this usually entails slowing down the process in building business credit. In some cases they will simply lie to you to make a sale. In dealing with DnB you have two options. You can either just give in and pay for their services(which may be easier and help not to waste time) or you can seriously educate yourself about the business credit building process and DnB and their tactics.

Here are 5 articles that I have wrote in the past about DnB and their Tactics. Read them to get an idea what to expect from Dun and Bradstreet. When dealing with them keep what you have read in mind

1.DnB Slowing Down Business Credit Building

2. DnB and their Tricks

3. More of DnB’s Sales Tactics

4. Your DnB Report – a Business Credit Problem

5. Get DnB Credit Builder for Free

3. Starter Accounts can be the Hardest to Get

This may seem stupid, but in many cases, a basic net 30 starter account can be harder to get than some cash accounts. The reason for this is that these starter accounts have nothing to go on for your credit worthiness and they also do not have set approval procedures. A few years ago, getting starter accounts and getting to that 80 paydex was a piece of cake. No one asked for prepayment and everyone seemed to be giving away net 30 accounts and even revolving accounts in some cases. Times have changed. There are still companies that offer net 30 accounts and report quickly, but they are less now than there were a couple years ago.

So What Should I Do to Get to the Next Stage?

So now you have all these reasons why building business credit is difficult to get in the beginning. So what do you do from here?

1. When you encounter these obsticles, keep in mind of your goal and keep going.

2. Educate yourself as much as possible in building business credit.

3. You have the option of using our Business Credit Coaching Service. Many people stay with us for a long time and some simply stay with us to get over that first month or two months of tedious work.

Marc Augustine