2 How to Get $100,000+ Worth of Low-Interest Business Loans, Leases, and Credit Lines Without the Risks of Personal Guarantees, and Without Using Or Damaging Your Personal Credit By David Gass, America s foremost authority on establishing credit worthiness for small businesses
3 3 CHAPTER ONE: What nobody ever told you about business credit If you re like 92% of small business owners, growing your business is damaging your personal credit score. This happens every time you: Apply for business credit with your social security number Run up balances on your credit cards or credit lines Make cash advances Get declined for credit Using your personal credit to apply for business loans, leases, or credit lines hurts you in two ways. 1) It damages your personal credit score. That makes it harder (and more expensive) to get loans, leases, and credit lines. 2) It keeps you from building a positive business credit profile -- which is the key to growing your business in the long run. In Chapter Two, we ll discuss this second consequence: failing to build a business credit profile. But right now, let s look at the first consequence. According to our studies, the typical entrepreneur has 10+ credit inquiries per year. How about you? Every time you apply for credit using your social security number, another inquiry shows up on your personal credit report and lowers your score. But that s not all. Every time you re declined, and every time you accumulate debt, your score drops again, making it harder and harder to get home loans, car loans, equity lines, and credit cards. And if you re approved at all You ll be treated as a subprime borrower stung by abovemarket interest rates. CASE STUDY: PHOENIX ENTREPRENUER For five years, a Phoenix entrepreneur had his personal and business checking accounts at his local bank, along with three business loans/lines of credit.
4 4 When he needed a loan for his son s college tuition, they declined him. Why? His business loans were in his personal name, so they were reported to his personal credit report. Because of his business debt, and too much credit in revolving accounts, the balances on his credit lines were considered too high, and his debt-toincome ratio too poor. So his personal credit score had dropped from 735 (before starting his company) to 650. If all this had been reported to his business credit report NOT his personal credit report his score wouldn't have dropped. With our help, he took the correct steps to build his business profile and get credit in his business name. We instructed his bank to report his new loans and lines of credit to the business credit bureaus, not the personal credit bureaus. And we succeeded: three months his personal credit score had rebounded to 756. Lack of capital: One of the top two small business killers The Small Business Administration (SBA) reports that 80% of small businesses fail within two years. And of the survivors (i.e. those still in business after two years), 90% fail within five years. The top two reasons? Poor management and lack of capital. This life-saving book will solve the second problem forever. With an abundance of business credit at your fingertips, you ll never again: Lose sleep because you can t pay your bills, or meet payroll Pay above-market interest rates because you don t have perfect credit Hit up your friends and relatives for loans Take a regular job to subsidize your business Make your spouse get a second job Lose favor with your vendors because you can t pay their invoices promptly Suffer from stress-related ailments such as migraines, heartburn, or back pain. Lose out on a lucrative contract, or time-sensitive opportunity, because you don t have the cash to take advantage of it That last bullet point is huge yet few entrepreneurs give it much thought. So let s take a look.
5 5 When time-sensitive opportunities come along, will your hands be tied by lack of capital? Before discovering our proprietary methods, a Denver entrepreneur was offered a major contract by CVS. His products could ve been flying off the shelves in CVS stores nationwide. But they re not. Why? He didn t have the cash to increase his production tenfold. So he couldn t turn on a dime and get his products on their shelves fast enough. Now imagine yourself in his shoes. You ve got the chance to land a major client. Your revenue potential is awesome. But they need fifty times more product than your regular clients do and they need it next week. Will you have to forfeit that contract because you can t meet their deadline? Or suppose you have the chance to buy stock in an IPO or real estate for 60 cents on the dollar. Will you lose out because you don t have the cash to take advantage of it? With an abundance of business credit, your company can seize time-sensitive opportunities. But before you can be approved for business loans of $50,000 - $250,000, you must complete a first, second, and third round of credit building steps. Applying for a business loan without completing all of the prelimi nary steps in the exact right order can permanently damage your business credit profile. Because there are so many pitfalls, because the risk of making mistakes is so great, attempting to build your company s credit without an experienced guide is like crossing a minefield. That s why it s crucial to follow our steps in the right order. The good news is this. Over the past eight years, 11,217 small business owners have used our proprietary methods to obtain business loans, leases, and credit lines totaling over $912,000,000. However, even with our proven methods, it takes nearly a year of establishing your company s credit worthiness before you can qualify for a business loan of $50,000 - $250,000. So it s crucial to start building your business credit now.
6 6 Business credit: The best kept secret of winning companies More money is lent to companies than to real estate investors, homeowners, car owners, and all other borrowers combined. Yet in a review of ten top-selling business start-up books, we found no mention of business credit (aka trade credit or corporate credit ). That s right: not one mention of the single largest source of lending in the entire world! No wonder startup companies and little guys rarely hear about business credit. They rarely understand how it s established or tracked, or how it affects their lives or businesses. For this reason... Our credit-building system will give you a huge competitive advantage, and put you in a league with well-funded companies that make it past the five year mark with flying colors. Nobody has let you in on this secret Because your Corporation or LLC is a separate legal entity from you personally, it can have its own credit profile separate from yours. It can qualify for business loans, leases, and credit lines without harming your personal credit score. And if you ve been held back by poor personal credit -- or even bankruptcy -- here s fantastic news: Your company can get business credit on its own merits, without lenders or vendors ever looking at your personal credit report, asking for your social security number, or asking for a personal guarantee. CASE STUDY: BANKRUPT TRUCKER While driving back and forth across the country, an Alabama trucker was unnerved by the amount of cash he had to keep in his pocket. However, he couldn t get any credit cards because he d filed for bankruptcy. After we formed a corporation for him and he worked with our business credit building system, his poor personal credit was no longer a factor. His company was approved for $8,000 worth of gas credit cards. He no longer has to worry about having cash lost or stolen. With our proprietary methods, you too can build a positive profile with the business credit bureaus, and establish your company s credit worthiness. Then you can:
7 7 Reverse the damage to your personal credit profile Protect your personal credit from being harmed by large running balances and inquiries in the future Stop being personally liable Qualify for lower interest rates in your business and personal life By the way, if have a credit card with your company name on it, you might think you already have business credit. Not necessarily so! If you applied for that card using your social security number, your payment history likely has been reported to your personal credit report. It s done nothing to establish your company s credit worthiness. Receive a $199 Business Credit Assessment free of charge. Call us today at with this code: SR2294. There are 15 mistakes most business owners make when attempting to establish and find business credit. Mistake #1: Mistake #2: Mistake #3: Mistake #4: Mistake #5: Mistake #6: Mistake #7: Mistake #8: Mistake #9: Using their personal credit to finance their business. Using a personal guarantee, which allows creditors to attach your personal assets. Applying for loans without first establishing payment history and a business credit score. Not incorporating their business. Not being in Compliance with the credit bureau require ments. Getting red flagged by the business credit bureaus. Believing they can repair their business credit. Thinking there must be federal laws protecting business owners from the business credit bureaus. (There aren t.) Believing they already have great business credit just because they have a business credit card. Mistake #10: Working with vendors who only report negative payment history. Mistake #11: Assuming they cannot get business credit because they have poor personal credit. Mistake #12: Spending years trying to build business credit without help. Mistake #13: Ruining their personal credit score. Mistake #14: Not being prepared with proper documentation when seek ing financing. Mistake #15: Not taking action today to establish and build business credit.
8 8 Avoid becoming a subprime borrower and paying above-market interest rates Imagine this. Two entrepreneurs go to the same bank and apply for a $100,000 business loan. The first has no business credit profile, but his personal credit score is 650. On this basis, he gets approved -- but with a subprime interest rate of 13%. The second entrepreneur has completed the first, second, and third round of steps necessary to establish his company s credit worthiness. He too has a 650 personal score. But he has established a positive business credit profile. His company gets approved with a rate of 7%. Which of these two entrepreneurs do you want to be? Over a 10 year period, here s what you could save by having a positive business credit profile: Loan Amount $100,000 $100,000 Interest Rate 13% 7% Term of Loan 10 years 10 years Monthly Payment $1, $1, Total Payments $179, $139, Total Savings: $39,843.60
9 9 CHAPTER TWO Establish your credit worthiness correctly and never get turned down for a loan To qualify for business credit, your company has to "stand on its own two feet. So before you start applying for business loans, leases, and credit lines Prepare your company with a Business Credit Assessment The phrase business credit market refers to the business credit bureaus and all of the vendors/lenders that offer business credit. When your company applies for loans, leases, or lines of credit, the business credit market does hundreds (or thousands) of secret Compliance checks. In other words, they scrutinize your company to see if it meets standard lending requirements. Dun & Bradstreet is one of these credit bureaus, and when you apply for credit, they do over 2,000 Compliance checks. We call them secret Compliance checks because nobody wants to tell you what s being checked. Nor are there any laws giving you a right to know. That s why so many entrepreneurs get blacklisted. CASE STUDY: POSITIVE MARKETING SYSTEMS, INC. Without getting in Compliance, Positive Marketing Systems, Inc. started applying for business credit with a list they found in an online forum. The got approvals from ten companies without a personal credit check or guarantee. They were thrilled and thought they d found The System. Eight months after getting those credit lines, the owner went to Office Depot to buy some office supplies. His Office Depot card was declined. After calling the financing department, he discovered that Dun & Bradstreet had flagged his company HIGH RISK. Why? After ordering an investigation, one vendor found that Positive Marketing Systems wasn t in Compliance. After flagging his company HIGH RISK, Dun & Bradstreet sent an update to everyone who d purchased a credit report or inquired about
10 10 Positive Marketing Systems in the past. Most of the company s creditors canceled their credit cards. This damage couldn t be reversed. So we exercised the only remaining option. We worked with this client over 12 months to restructure their entire company. It was complex and expensive, but we did it. Within 12 months, we d obtained $108,000 in trade credit for his company. And three months after that, we got them $300,000 in unsecured credit lines from Tier Three vendors. This story had a happy ending. But don t miss the key point. Entrepreneurs without our proven roadmap are doomed to end up on a NO CREDIT or HIGH RISK list. Without our roadmap, you might get some approvals. But sooner or later, one of your vendors will buy a credit report and order an investigation. If you fail any of the secret Compliance checks, your company can be added to the HIGH RISK or NO CREDIT list, crippling its ability to borrow forever. That s not an exaggeration. If your company gets blacklisted, there s only one way to recover. You have to restructure your entire company, and that s a complex, expensive process. We know this from experience. In 2000, we set out to crack the code on building business credit. But because of mistakes we made during our learning curve, we ruined the borrowing ability of 16 companies. With each mistake, we had to throw that company away and form a new one from scratch, with none of the original officers. In the seven years since, we ve gone to great lengths uncovering these secret Compliance checks. Here are some of the basics: a. Have a real business not a shell company just to build credit b. Form a Corporation or L.L.C. to operate your business under c. Get a Federal Tax ID Number with the I.R.S. in order to separate your business activities and credit from your personal (and social security number) d. Have a business address and phone line that are easier for creditors to find e. Have all licenses, permits and fees paid to the appropriate government agencies
11 11 There are many other Compliance checks. To find out what they are, and how to get your company in Compliance, call us today at By the way, if your company is new but you meet Compliance, you ll have plenty of options. Many vendors/lenders issue credit to new companies. But almost none will issue credit to companies that fail Compliance. Differences between personal and business credit While having too much personal debt hurts your personal credit score, the opposite is true in business. The size of your company s debts has no impact on its credit score. But that s not all. Having many loans, leases, and credit lines positively influences vendors/lenders who review your company s credit applications. Why? It shows that other credit granters consider your company a good risk. Another difference is this. All of your personal creditors report to the credit bureaus. But not all of your company s vendors/lenders report to the business credit bureaus. So the process of establishing credit is hit and miss You see, many vendors never report to the business credit bureaus. And others report only your late payments not your on-time payments. So if you don t have business credit lines with the right vendors/lenders, years can pass and your on-time payments will still never be reported to the business credit bureaus. As you can see, applying for business credit is a much more complicated process than applying for personal credit. It requires careful preparation. That s why we re offering you a complimentary Business Credit Assessment... Receive a $199 Business Credit Assessment free of charge. Call us today at with this code: SR2294. Understand the Four Tiers Of Vendors/Lenders There are four Tiers of vendors/lenders, ranked by how discriminating they are. The lower the Tier, the lower their approval standards; the higher the Tier, the more discriminating.
12 12 To demonstrate, here are a few vendors/lenders that represent each of the four Tiers: Tier Credit lines available Example vendor/lender 1 $500 - $5,000 Office Depot 2 $5,000 - $50,000 Dell Computers 3 $50,000 - $250,000 Washington Mutual 4 $250,000+ Investment companies and angel investors Once your company meets Compliance (discussed earlier), it s safe to apply for credit from Tier One vendors. But not all Tier One vendors are equal. As mentioned before, many don t report your on-time payments to the business credit bureaus. So make it a point to choose vendors/lenders that will: 1) Give your company credit without checking your personal credit report. 2) Report your on-time payments to the Business credit bureaus. Tier One vendors like this are rare, because almost no one wants to be the first to issue business credit to unknown borrowers. So qualifying for your first six credit lines (of $500 - $5,000 each) can be the most difficult step in this whole process. One of the Tier One vendors willing to take this risk is Office Depot. So we recommend starting with them. Now you might think, But I don t buy a lot of office supplies. Or, What I really need is cash, not trade credit. Here s the key point. Obtaining credit lines from Tier One vendors (like Office Depot) isn t the end goal. It s a stepping stone towards your ultimate goal, unlimited financing for your business. The business credit bureaus will use your payment history with these Tier One vendors to generate your business credit profile. So establishing good payment histories with Tier One vendors will set the stage for bigger credit lines and loans. Unlike a personal credit score (which is based on a complex formula), your business credit score is based on one factor only: how your company pays its bills. Paying on time increases your score; paying late damages your score.
13 13 Having a high business credit score multiplies your chance of approval, and the size of the credit lines you ll receive. Before graduating to Tier Two, you ll need at least six Tier One vendors to report your company s on-time payments to the business credit bureaus (not your personal credit report). Then -- and only then -- you can safely apply to Tier Two lenders like Dell Computers. Next: larger credit lines from Tier Two vendors/lenders Flash forward two months. Six Tier One vendors have reported your on-time payments to the business credit bureaus. So now you re eligible for thousands of Tier Two credit lines, trade credit accounts, and business credit cards -- many without a personal guarantee or personal credit check. Why? Your on-time payments from Tier One have been reported. Your company is now an established borrower, so the risk to lenders is far less. In Tier Two, your company will receive credit lines in the $5,000 to $50,000 range. As before, always choose vendors/lenders that report on-time payments to the business credit bureaus. Take a quantum leap forward with cash credit with Tier Three vendors/lenders Tier Three is where you ll find unsecured cash credit from banks and other lenders, typically in the $50,000 - $250,000 range. And none of these banks require business plans. Tier Three also includes equipment leasing and many other financing solutions. WARNING: Only approach a bank after establishing good credit with several Tier Two vendors. Typically, Tier Three lenders do require a personal credit check and guarantee. However, you can still protect your personal credit score by choosing lenders that report exclusively to the business credit bureaus. Then you ll be building your business credit, not hurting your personal credit. Each source has different criteria to approve a loan. So we recommend working with our experienced experts. Otherwise, you risk shooting yourself in the foot.
14 14 NOTE: A small handful of banks provide credit lines of up to $50, in the form of business credit cards -- without personal credit checks or guarantees. Our clients receive this valuable list. The SBA recently reported that 97% of applicants for a small business loan are declined. Why? Entrepreneurs who go directly to their banks inevitably fail to meet Compliance. And most have zero payment history with Tier One and Tier Two vendors. (Or the history they do have is insufficient.) Achieve financing of $250,000+ from Tier Four lenders Tier Four lenders are the ultimate level of financing: investment companies and angel investors. But before they ll even consider loaning your company $250,000+, they ll need to thoroughly understand your business and why you need financing. They look for companies with strong sales, or at least strong potential in the form of a business plan. At this stage, you ll need more than a positive business credit profile. You ll need a professionally written business plan that clearly states: The purpose of the loan Exactly how the money will be used The amount of money your company needs and for how long How your company will repay it and when Your Loan Request must be presented the way lenders like to see it. It should include the following: Business Summary Personal Profile Loan Proposal Business Plan (With financials) Loan Repayment Plan Support Documentation Quick Tip - Business Credit Services offers complete professionally written business plans. Call for more details and mention code BCS201 to receive a $500 discount. This Chapter has outlined steps you can take to establish your company s credit worthiness. However, these steps are a small portion of the entire process
15 15 required to build, maintain and grow your business credit. Our company, Business Credit Services, offers a full-service credit building program THE CAPITAL ACCESS PROGRAM. In the next Chapter, you ll learn how we can take your company through all the right steps to establish its credit worthiness, and win bigger and bigger lines of credit. We ve helped 11,217 clients obtain over $912,000,000 worth of credit lines, business credit, and equipment leases. And after they re capitalized for growth, many become far bigger than they ever imagined. For example: CASE STUDY: SNOWELL CONSULTING, INC. About a year ago, I signed up for your credit building service. Right away, I received a gas card and credit lines worth $4,000 from Office Depot, Office Max, and Staples. Then the first major victory I was able to obtain $7,000 from Dell. (I bought a PC and Laptop as well as an electronic organizer.) Last month, it was time to bat in the big league. We applied for several lines of credit and credit cards we now have $103,400 in lines of credit. In one day I was able to secure my financial future. Now there is nothing that I can not get, nothing that can happen to my business that I can not afford. Your benefit statement should really read, "We build wealth for our clients with business credit as the tool". I am not joking. I started Snowell Consulting Inc. with the vision of providing training solutions to corporate clients. But your team of coaches have been giving me "millionaire advice". Now, my vision for my business is to acquire real estate and invest in cash flow businesses that will make me a millionaire. Jeffrey Snowell, Snowell Consulting, Inc. Philadelphia, Pennsylvania By hiring us, you eliminate the risk of overlooking crucial steps -- or making mistakes that can t be reversed. So before you put your company at risk, call us for a Business Credit Assessment:
16 16 Receive a $199 Business Credit Assessment free of charge. Call us today at with this code: SR2294. Once you ve established your company s credit worthiness, you will: Be offered lower interest rates Enjoy doing business on credit instead of cash Improve your cash flow by using credit instead of working capital Improve your credibility with vendors Improve your business image, increasing your loan approvals and even government contracts Use other people s money to grow your business
17 17 CHAPTER THREE Survive The Business Credit Minefield Without Damaging Your Company s Credit Profile Let s review the key reasons why there so many mysteries surrounding business credit: #1: There are no Laws Protecting the Business Rights from inaccurate information on the credit report #2: There is a severe lack of information provided by business and the government #3: No one wants to tell you the "secret" Compliance checks #4: Its up to YOU to research companies that offer credit #5: Its up to YOU to research companies that report trade experiences #6: Its up to YOU to research companies that don t require a personal guarantee #7: Its up to YOU to research companies that don t require a personal credit check Because there are so many pitfalls, because the risk of making mistakes is so great, attempting to build your company s credit without an experienced guide is like crossing a minefield. To the rescue: Our revolutionary Capital Access Program. This full service program puts our team of experts in your corner, establishing your company s credit worthiness in record time. What can normally take 4-5 years we can do in just 3-4 months. But before I go into detail, you have a right to ask this question: What makes us qualified to guide your company through this complicated process? In October 2000, I published a revolutionary book called Building Business Credit for Business Owners. Through word of mouth recommendations, 10,000 copies sold during the first 6 months.
18 18 Thousands of entrepreneurs woke up to the fact that building a company s credit worthiness is complicated and time-consuming. As a result, we received hundreds of calls from people asking (and often begging) us to do the work for them. I spent the next nine months creating a foolproof system to free entrepreneurs from being limited by their personal credit. Next I trained ten experts in this field, creating the first full-service business credit building program in the nation. Since then: Our team of experts has put 11,217 small businesses in Compliance and propelled them into the major leagues. All of them have obtained $100,000+ of credit based on the merits of their companies, and not the credit of the individual owners or officers. Altogether, our clients have obtained over $912 Million in loans, equipment leases, and credit lines, as of December Vendors/lenders rarely look at our clients personal credit reports, and rarely require personal guarantees. Because this proprietary system is so valuable, we filed a federal patent on it in June That means none of our competitors can offer you this system. I quickly became regarded as the authority on establishing credit for small businesses. As a result, I ve been asked to write articles for publications and websites such as: Business Week - Small Business Wells Fargo Small Business Magazine Home Business Magazine Forbes Online Yahoo Business Entrepreneur.com AOL.com - Small Business BuildYourOwnBusiness.biz Score.com Partners page IRS.com Partners page Our company has even received the following awards: Las Vegas Business Press Rising Star 2006 Inc Fastest Growing Companies in America 2007
19 19 Here are six definitive reasons to put our credit building experts in your corner Reason #1: We do 90% of the work for you. We don t just give our database, books, and tapes and say Good luck, you re on your own. Why? The risk of making mistakes is too great. Instead, our team of experts does the work for you, taking your company through each step of our foolproof system. You get unlimited access to these business credit experts for a full year, and you ll be looked after by our team of experts. There will also be scheduled calls to discuss the assistance we need from you. For example, if you don t have a business license or separate business phone number yet, we ll address those items on our first scheduled call. And after we ve put your company in Compliance and set up your initial credit lines, we ll use the scheduled calls to give you updates and ask for further assistance. For example, we may ask you to make more consistent purchases from your Tier One vendors -- to establish sufficient credit history for Tier Two. Reason #2: You won t damage your business credit profile. You probably don t try keeping up with the constantly changing U.S. tax codes. You hire a CPA because he s an expert. Well, establishing your company s credit worthiness is equally complicated. Just like your CPA is an expert on tax codes, we re experts on establishing credit worthiness for your company. That s why 11,217 small business owners have outsourced the job to us. When you hire us to establish your company s credit worthiness, you can rest assured that you ll: Never wind up on the HIGH RISK or NO CREDIT list. Never cause permanent damage to your business credit profile. Never have to start over and form a new corporation from scratch. Reason #3: We make sure you re fully qualified BEFORE submitting your credit applications. To help you understand this benefit, let s look at two situations with similar risks: an IRS audit and a home loan application.
20 20 If the IRS audited you, your CPA could protect you by meeting the auditor on your behalf. This would eliminate the chance of you shooting yourself in the foot. Likewise, if you needed a home loan, but your tax returns didn t show enough income to support the loan payments, a good mortgage broker could present you in the best possible light. And if the bank wanted a written explanation, your mortgage broker could help you choose the right words. Hiring us is the same: we act as your representative and protector. Before we ever submit a credit application, we put your company in the best possible light. We make absolutely sure that: 1) You re in Compliance with the lending market. 2) There are no holes in your application. 3) You apply for credit lines in the right order. And if a vendor/lender ever has questions during the review process, we can provide the right answers to ensure your approval. Reason #4: It ll be done right the first time. As I mentioned earlier, Office Depot is one of those rare vendors willing to issue credit to unestablished companies (i.e. those with no business credit history). Because they re one of the least discriminating vendors, they approve more companies than the vast majority of lenders/vendors. Yet they recently gave us this statistic: Only 32% of companies referred by the Las Vegas Chamber of Commerce are approved for an Office Depot credit line. By contrast, the approval rate for our clients is 96%. Why the dramatic difference? Most companies fail the secret Compliance checks. We build your credit worthiness correctly, first by putting your company in Compliance, and then by establishing your credit in the right order. Reason #5: You get access to our proprietary database of 3,000+ vendors/lenders that issue business loans, leases, and credit lines. It s taken us seven years to compile this proprietary database. Since none of these vendors/lenders report to the personal credit bureaus, you can pile up unlimited business debt without damaging your personal credit score. This is crucial.