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

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.

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.

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
Let me first thank you for all the information you provided, well I will go straight ahead with my question.
You see, I have struggle to get a DUNS number but it seems every time I get to the part of the application that asks me to insert a SIC number, I do it, but I doesn’t seem to respond. This has happed for about 3 days straight in a row and it won’t allow me to go on with the application without inserting that SIC number, I can’t even add it. What am I doing that its giving me a problem?

Leonard

2 Possible Ways to Obtain Your DUNS Number
So currently there are two ways to get your DUNS number:
So for the moment I am writing this post, there are 2 ways to obtaining your DUNS number:
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1. Apply for the DUNS number on their website.
This may seem like a no-brainer and the obvious answer to the problem, but DnB can be a pain to deal with if you do not know what you are doing. You can go to DnB.com and click on the D&B DUNS number tab at the top and apply for your number. You will be forwarded to the iUpdate web pages which will aks you for various information on your corporation which will allow you to register for the DUNS number. Sometimes they send it to you within a couple of days but in many cases you will receive a call from a DnB Rep claiming that youpaur file is not complete and you have to pay to complete your file and to acquire your DUNS number. Although much of what they tell you is not true, they basically control the business credit reporting industry so in some cases you have to submit to their requests. The unnecessary interaction with DnB is why I do not like this method of acquiring your DUNS number.
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2. Get one of the initial companies to report and then request your DUNS number online(my preferred option)
Using this method, you do not have to deal with a DnB rep. When you set up your company, get your phone number, address, tax id number and so on, you usually go for your DUNS number next before applying for credit. The truth is, you do not need your DUNS number to start applying for credit with some of the very first vendors. If you do not know what the initial vendors are I suggest you download the Business Credit Bible. But just to give me an example of a few of these initial accounts, we are talking about accounts like Uline, Reliable, Quill, RapidForms and so on. These guys are the very first net 30 accounts that you should apply for if you are just starting out. None of them require a DUNS number although some may ask you to pre-pay. Once you acquire some of these accounts, order something on net 30 terms and repay it on time. Once you pay them they will take a few weeks to report to DnB. If they report and you do not already have a DUNS number, a DUNS number will automatically be created. Once the number is created you can easily get it online. So let me get into finding out when the number is generated.
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Once you have followed the first instructions in getting an account and ordering and paying it off, you need to now go to the DnB home page. There is a little box in the center on the right of the home page where you can search for a business. You go to that box and fill out your company name, state and country and hit search. If one of the accounts reported and the number was generated, your company will now show up in the search results. Once it does show up in the search results, you can simple click “request DUNS number” and your number will be sent to you via email immediately. Once you have got the accounts and paid them off, I will check DnB at the end of every week for 4 – 5 weeks and it will be there. The more accounts you get the faster your company should show up in DnB as each company reports at different times.
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I hope this helps and feel free to email me with any questions or concerns.

Leaseback options have always existed but we are now seeing them showing up more and more in the business credit arena. A leaseback option is typically where the owner of a property(real estate, equipment ect.) sells the property, and leases it back from the buyer. Some leaseback options allow the seller, or lessee to buy back the property at a later date. If the seller files bankruptcy or is audited at anytime, the leaseback option can be deemed as fraudulent or a means of hiding assets by the seller and the leaseback will be reclassified accordingly.

In the business credit arena, we are seeing this term showing up more and more. What is happening is that consumers have limited options of acquiring large lines of cash credit and service providers are getting more and more creative in providing leaseback options. In this situation a leaseback option looks like this:

A client who has strong business credit and needs access to cash gets approved for a lease of equipment from a company that agrees to do a leaseback option. Lets call the client, ClientA and the company doing the leaseback option, CompanyB. ClientA goes to CompanyB with strong business credit and gets approved for; let’s say $50K; to purchase IT equipment. ClientA leases 50K worth of equipment from CompanyB and CompanyB buys back the equipment from ClientA for $45K. The financing for the 50K of equipment comes from an external source such as BankC.

In many cases a small amount of equipment is left with the seller but in some situations, no equipment ever changes hands. The legality of this has to be examined from various angles. The financing agreement from the Banks may or may not allow the seller to sell the leased equipment. Every case is different, but this is the basic drift of a leaseback option in the business credit world.

We have seen various deals come up like this that require and PG and some simply require very strong business credit. I suggest that when doing this kind of deal, you should work with parties that have experience and know exactly what they are doing.

About a week ago an administrator at Inter-tech emailed me clearing things up on what they have to offer. This company offers IT services but they also offer Net 30 account from $5k -$30k and they report the size of the account to DNB. You do not need a paydex but you do need a DUNS number and you need to be registered with DnB. This is a really good occasion to get a fairly big tradeline which is certainly needed in the modern business credit climate.

I checked their website today and it is currently going through maintenance but the Operations Manager assured me that they are good to go. I have tried them out with one of my clients and it worked out pretty well. After you are approved you have to make an initial purchase and then they will report it to you business credit file.

There website is http://www.itc123.com/

This is a NECESSITY if you are in the process of building business credit.

So why all out of nowhere I am saying that shelf corporations are necessary?Sears, Office Depot, and Staples have recently altered their requirements. What was once starter accounts in business credit have become complex to attain, as there revolving lines of credit now REQUIRE a 3 year old corporation, or you are required to provide a pg. Yes, check their online application. I have had success with applying to office depot by getting  their paper application and faxing it in without a pg, but when an account like staples is requiring a 3 year old corporation, it is time to take notice. There is still cash out there and now there are some of these lease cash back deals that are helping us by being creative with their structuring of their funding. Do not mistake me, it is not impossible to get business credit without a shelf corporation, but it is increasingly difficult. Now is the time to go the shelf corporation route as there is more financing becoming available in 2011; but that business credit funding is going to be for those guys who are doing it correctly.

When building business credit is a plus to do and we should :

1. Get a Business License – I know that many states do not require a business license to operate certain types of businesses. If acquiring a business license is not a HUGE pain in the butt, my suggestion is to get one. newly, more than one financier has requested one from a couple clients of mine. The ones that did not have it had to make available a utility bill, but in my view it does help. We had one bank that required it, so in this climate it is now an obligation.
2. Get a Website – Having a webpage may not seem like a must in business credit building, but as getting approved is a little more difficult we must have all our chicken in a row. DnB now shows and lists your websites on your credit file and I know of two banks in particular that uses the fact that you have a website as a factor in determining how credit worthy a company is. Getting a website can cost as little as $50, so do not take any short cuts with this one.
3. Get an actual phone line – It is a moment in time to do things the right way, and if you want to get credit like a real company; and you’re not; at the very minimum you should appear like an actual company. Remote call forwarding is out the door now. Although they do work, I do not suggest it. Many creditors want you to call back from the number you applied with. Vumber.com is an options but my suggestions is to sacrifice and get a basic business phone line. It will act as a tradeline as well as ensure that you are listed in 411 and you can be called and can call back from that number.
4. Get one of the DnB products – Yes, you read it right. Yes DnB has their scams, and it is not “necessary” for you to purchase from them but it is becoming harder and harder to get credit. If you are claiming that your company will do or is doing over $1,000,000 per year in revenue, paying $39 / month will no hurt you. If you are serious about getting business credit, suck it up and do what you need to do.

• There are a couple basic things that we should not do when building business credit, and as much as I talk about it, readers still mak ethe basic mistakes. Some of them are:

1. Do Not Use a UPS Box – I have said this over and over and I get calls about the same thing.
2. Do Not Apply for more than 3 accounts in one week – Although inquiries do not hurt your score on DnB, it does hurt your score on Experian business. Consistent applying will lower your intelliscore. A consistant increase in inquiries on DnB can quickly raise eyebrows and they will look closely at your company. Most of the time they will try to sell you a new product that you do not need and when you do not agree they can block your file. The hassle is not worth it. Simply take your time when building business credit.

• Those are just a couple of useful tips that are important in building business credit in these times…