Business Finance Tips Every Business Owner Should Know

The Team at Midwest Corporate Credit’ – Providing modern day education and

solutions for your contemporary financing needs

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.

Business Finance Tips

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

Most business loan requests are declined because they are

submitted to the wrong bank

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.

Make credit card payments once a week rather than once a month

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, it’s that simple!

What is a UCC-1 financing statement and how is it used?

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:

Most business loan requests are declined because they are submitted to the wrong bank

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.

Know the Three “Cs” of business finance

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 it’s owner’s 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 lender’s 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.

Cash

CreditCollateral

Know thy business credit ratingMost business owners don’t 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.

Authorized user accounts and “trade lines for sale” are slowly being phased outWhat 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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