A Free-Reprint Article Written by: K. MacKillop Article Title: Business Startups with Bad Credit
See TERMS OF REPRINT to the end of the article. Article Description: Bad personal credit is a common stumbling block for entrepreneurs. Working for your self is the best opportunity for building wealth. While bad personal credit can make the startup process slightly more challenging, it is not a total barrier to business ownership and business success. Additional Article Information: =============================== 734 Words; formatted to 65 Characters per Line Distribution Date and Time: 2010-01-26 12:15:00 Written By: K. MacKillop Copyright: 2010 Contact Email: mailto:[email protected] For more free-reprint articles by K. MacKillop, please visit: http://www.launchx.com/article-index.html AND http://www.thePhantomWriters.com/recent/author/k_-mackillop.html ============================================= Special Notice For Publishers and Webmasters: ============================================= HTML Copy-and-Paste and TEXT Copy-and-Paste Versions Of Article Are Available at: http://thePhantomWriters.com/free_content/db/m/bad-credit-business-startups.shtml#get_code --------------------------------------------------------------------- Business Startups with Bad Credit Copyright (c) 2010 K. MacKillop LaunchX http://www.launchx.com/ Bad personal credit is a common stumbling block for first-time entrepreneurs. Often, the motivation for going into business is to make more money, indicating that they are not making enough money working for others, thus, bad credit. Working for yourself is the best opportunity for building wealth, and the sooner you get started, the better. Bad credit among entrepreneurs is more common than you think and can make the startup process slightly more difficult, but is not a total barrier in itself. If your credit is pretty good but with some negative entries, it may be worth the effort to dispute inaccurate information and negotiate with creditors about removing negative entries. If you have several delinquent accounts or other derogatory information on your credit report, it takes months (at least) to bring your score up, even if you do everything right. Do not even consider the "credit repair" services -- the FTC has yet to find a single legitimate firm. The trickery they attempt to clean your credit report is bogus and at most will remove negative entries temporarily. If the information on your credit report is accurate, it is probably going to stay there for the seven years the law allows. You are better served spending your time finding creative ways to get your business off the ground than trying to "fix" the unfixable. The primary complication of launching a startup with bad personal credit is funding the business. Banks rarely finance startups anyway, but bad credit will make it impossible to obtain a bank loan for your business. Same with the SBA loan guarantees -- because the SBA programs ultimately rely on you qualifying for a bank loan, excellent credit is required to get in the door. Even local economic development not-for-profits generally include credit score limits to qualify for government funded microloans. Generally, your credit score must be over 680 to even be considered, and anything below 620 will likely torpedo your chances. Not to worry, most businesses are launched without bank loans, and if you are driven to open the doors, you will find a way to finance your idea. The other downside of starting up with bad credit is that some things will be more expensive and some necessities may be more difficult to secure. First, most businesses will need merchant services, the ability to take payments from credit and ATM cards. Your personal credit is a major factor in securing these services, and the regular banks are quite strict about who they approve. Fortunately, there are alternative merchant services firms that specialize in "high-risk" applicants. You will pay higher per transaction and percentage of sales rates, but you will at least have the ability to accept credit cards. If your business can be conducted over the internet, you can also obtain a Paypal account without a credit check...they accept both major credit cards and checking account drafts and their rates are usually better than the high-risk merchant services. Being flexible can overcome many of the issues associated with less than perfect credit. Some suppliers request a personal guarantee and credit check before providing terms. If you don't qualify, you may be required to pre-pay your business's orders or pay more for terms. In most cases, you will have multiple vendors to choose from and there may be some who do not require a credit check. If you don't need to purchase on credit, making your first few orders prepaid can avoid the personal credit issue completely. Shop around for the best deals, but avoid having multiple vendors run a credit check -- believe it or not, inquiries lower your score even more. Register your business with Dun and Bradstreet (under the EIN) as soon as possible to begin building business credit, and use the EIN on contracts and to apply for terms whenever possible. It takes time to build business credit, but eventually you want to be sure that the business liabilities are completely independent of your personal assets. Don't let negative credit stop you from pursuing your dream of owning a business. While some things may be more difficult, there is no hard and fast rule that bad credit means you can't succeed in your own business. If anything, it will force you to be more conscientious about how you spend your startup capital and keep you focused on building your business with an eye on profitability. --------------------------------------------------------------------- K. MacKillop, a serial entrepreneur with a J.D. from Duke University, is founder of LaunchX and authors a blog focused on starting a business (http://www.blog.launchx.com/). The LaunchX System's comprehensive, step-by-step approach to starting a business will help you develop the knowledge and skills you need to make your business startup a success. Visit http://www.LaunchX.com/ and take our Business Readiness Assessment and learn what to do next for your business startup (http://www.launchx.com/are-you-ready.html) --- END ARTICLE --- Get HTML or TEXT Copy-and-Paste Versions Of This Article at: http://thePhantomWriters.com/free_content/db/m/bad-credit-business-startups.shtml#get_code ..................................... TERMS OF REPRINT - Publication Rules (Last Updated: May 11, 2006) Our TERMS OF REPRINT are fully enforcable under the terms of: The Digital Millennium Copyright Act http://thomas.loc.gov/cgi-bin/query/z?c105:H.R.2281.ENR: ..................................... *** Digital Reprint Rights *** * If you publish this article in a website/forum/blog, You Must Set All URL's or Mailto Addresses in the body of the article AND in the Author's Resource Box as Hyperlinks (clickable links). * Links must remain in the form that we published them. Clean links should point to the Author's links without redirects having been inserted into the copy. * You are not allowed to Change or Delete any Words or Links in the Article or Resource Box. Paragraph breaks must be retained with articles. You can change where the paragraph breaks fall, but you cannot eliminate all paragraph breaks as some have chosen to do. * Email Distribution of this article Must be done through Opt-in Email Only. No Unsolicited Commercial Email. * You Are Allowed to format the layout of the article for proper display of the article in your website or in your ezine, so long as you can maintain the author's interests within the article. * You may not use sentences from this article as an input for any software that steals sentences from others in order to build an article with software. The copyright on this article applies to the "WHOLE" article. *** Author Notification *** We ask that you notify the author of publication of his or her work. K. MacKillop can be reached at: [email protected] *** Print Publication Reprint Rights *** If you desire to publish this article in a PRINT publication, you must contact the author directly for Print Permission at: mailto:[email protected] ..................................... If you need help converting this text article for proper hyperlinked placement in your webpage, please use this free tool: http://thephantomwriters.com/link-builder.pl Would you like to learn how to improve the performance of your article marketing campaigns? Download our F.R.E.E. 108-page Article Marketing Ebook at: http://thephantomwriters.com/ebooks/advanced-article-marketing.html ***************************************************************** * * This email is being delivered directly to members of the group: * * [email protected] * ***************************************************************** ===================================================================== ABOUT THIS ARTICLE SUBMISSION http://thePhantomWriters.com/ is a paid article distribution service. thePhantomWriters.com and Article-Distribution.com are owned and operated by: Bill Platt 3010 E Raintree Stillwater, Oklahoma USA 74074 Learn more about our article distribution services by visiting: http://thephantomwriters.com/x.pl/tpw/info/article-distribution/index.html The content of this article is solely the property and opinion of its author, K. MacKillop http://www.launchx.com/ --------------------------------------------------------------------- XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX ---------------------------------------------------------------------
