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Building Business Credit – What To Look For When Building Business Credit

I first want to thank you for taking the time to read this free report about building business credit, we provide this report to anyone without requiring you to sign up for anything. No need to join our newsletter, no need to speak to a sales representative, no need to do anything. We feel that this information is so important that you should have it without condition. We hope this information will help you choose a company and more importantly stay away from companies that put your company and your hard earned money at risk.Before you choose a company we recommend that you do your homework. We did just that with several companies and we were shocked with the results.PANDERINGThe first issue that came up is that most of the companies in our opinion pander to their potential customer. This means that they will say anything in order to make the sale. For example; If you call some of the popular companies and tell them that you would like to build credit on your company and that your company operates from home would that be okay? A truthful answer would be that you can build credit but will be extremely limited in how much credit you will achieve. If you just take a moment to think about it, a bank will not give a home based business nearly as much credit as they would a company working out of an office or even a virtual office. These companies will pander to you and tell you “Yes, you can build business credit working from home” that’s it!! They leave out the limitations because they don’t want to scare you off.It is our opinion that our customers are seeking large credit lines and don’t want to be mislead into thinking they can have something when in fact they cannot. We feel that it is important for our customers to make educated decisions. We will never sugar coat our recommendations, we will give you our recommendations and provide you with other options that are available, we will then explain those options and what type of results you can expect from them. With us you will always have the ability to make an educated decision. We will not let you make an uneducated decision that can cause permanent harm to your companies long term goals.FRAUD, MISREPRESENTATION, and FALSE ADVERTISINGThe bigger and scarier issue that we uncovered while researching these companies is what we consider Fraud, misrepresentation, and false advertising.We found one company that charged about $20,000 to build a company with credit. We had some hope in them as they seemed to be the only company that utilized an advanced methodology when building business credit. Unfortunately, when we searched further we found that the owner of this company is a defendant in a $100,000,000 lawsuit and has had newspaper articles written in major newspapers that highlighted his companies questionable practices. These articles have caused major credit bureaus to key in on his business practices, will DnB be one of them? Do you really want to be associated with a company that can lose everything in a lawsuit who has a target on their back for questionable practices?We found another company that claimed to have a patent on building business credit. They even have a patent number on their website with a link to the US patent office. I followed the link and typed in the patent number they had touted all over their website and wouldn’t you know it the patent has been long denied. This company is actually counting on customers not checking the references they have on their website. If they are willing to blatantly lie about a patent what else are they willing to do?We also found several companies claiming to be partnered with the IRS, This seems like an endorsement but if you did a little research you will find that the IRS does have a partnership program. This “partnership” program allows the partner to link to tax educational articles on the IRS website. Yes this is a partnership but it is NOT an IRS endorsement in any way, shape or form which several of these companies seem to imply. They are betting on you being naive and not checking. To me this is misrepresentation and fraud.Good for the GooseI feel that this issue is the most amusing. There are several companies that offer to build your credit which means they should at least be able to get you set up with Dun and Bradstreet and ultimately get you credit on your company. Well, would you believe that many of these companies do not even have a DnB file in existence. That’s right they tell you how important it is to build business credit but they don’t even have a DnB file themselves. They also tell you to get your phone number listed in a national telephone directory and they are not listed, is it only important for you to look legitimate? You can go to http://www.dnb.com and search for our company and others and see who has a DnB file. You can also go to http://www.superpages.com and look up our company “TD Financial Products Inc.” Land O Lakes, Florida and see our listing as well as their’s, if they have one. This is most likely just an oversight on their part but I just find it amusing.Overview of Background informationWe ask that you do your homework on any company you are considering doing business with….including us!!To do your homework at least do the following1.Search the company name on Google and look for problems 2.Search the owner names on Google and look for problems 3.Search Dun and Bradstreet and see if they have a file 4.Search superpages and see if they have a listing 5.Look for unresolved complaints with the BBB (The BBB will keep records even if a company is not a member company) 6.Look for complains on fraud websites (eg. http://www.ripoffreport.com )Now that you have done some basic homework on a company now you can call them. When you call them have the following list of questions ready. But before you start asking them questions ask yourself some.What do I want in a business credit consultant? Do I want One on One Consultation or am I okay with just email communication and/or reading books and listening to CD’s? Do I want to pay a lot of upfront money? Do I want large “bank” credit lines or am I okay with just “trade” (store) credit Do I want someone to do all the work for me, ending up with a company that has good credit, but, not knowing exactly how it achieved good credit and how I could repeat the process and get even more credit on the next company Do I want a company to answer “Yes” to every inquiry I have even though the “Yes” really is a “Yes, but…..” Am I 100% confident that my personal credit score meets the underwriters guidelines (score is not all they look for)Now that you have answered what it is you want you can now ask the hard questions of your credit consultantAre you providing me with personal coaching or will I be reading books and listening to pre-recorded material?We used to provide you with the option of purchasing a book with audio CD’s but we have found that nearly 90% of people who purchase these items end up coming back to us for personal coaching. The figure is so high because, if you think about it, EVERY business is different and it is IMPOSSIBLE to account for every specific situation in a book. The process of establishing business credit is so specific to your company and your type of business that books and CD’s rarely answer all possible questions. Books and CD’s are very good at providing you with basic information but books get outdated as soon as they are published. Underwriting guidelines change weekly and it would be impossible to keep a book updated.Will your company ever call me to upsell me into a better business credit coaching product?Companies that are going to upsell you will not provide you with all the information you need with your first purchase. If you are comparing our pricing with a company that will ultimately upsell you make sure you compare pricing based on the highest level of coaching they provide. Our business credit coaching package is out best package available. We don’t sell any other coaching packages no less and no more, we provide all of our coaching in one package. Our belief is who wants to pay for a job halfway done. What if your doctor said he will only charge you $500 to start brain surgery and while you are on the table he says it will be another $50,000 to finish up. Do you really have a choice? Business credit consultants know that if you invested a certain amount in their basic course the chances of you leaving them for another company and “losing your investment” is very low. They take advantage of this and offer you an “option” to upgrade later.Can I build credit on a S Corp or as a Sole Proprietorship?This is a question that will let you know if the business credit consultant is being honest with you or just “pandering”. The answer to this question should be “Yes, BUT, you won’t be able to get any REAL credit or TOTAL CORPORATE SEPARATION”. Lenders look at S-Corps and Sole Proprietors as small time businesses and WILL NOT lend large amounts of money to these types of companies. Even with perfect personal credit you will rarely get credit lines in excess of $10,000 and you will never be able to waive a personal guarantee. If your “Consultant” tells you otherwise they are just trying to “SELL” you. We walk you through the process of analyzing your current profile to make sure there are no RED FLAGS that will stop you from getting the large credit lines you are seeking. If you have an S Corp or Sole Proprietorship we will show you how to convert it to the desired structure without losing the valuable age associated with it.How much credit can I get?You will have to listen to this answer very carefully. Most unscrupulous consultants will provide you with a large number like $250,000. What they “conveniently” leave out is that most, if not all, of the credit you get is TRADE credit. This means you will have $250,000 in credit but you have to buy products from specific vendors. Do you need access to $50,000 in office supplies? Trade credit does have its place but most of our customers are building credit so they can get unsecured “BANK” credit. Bank credit is a line of credit or credit card that you can use to purchase whatever you want. Don’t be fooled by high dollar promises. Our process of building credit includes trade credit so that we can quickly get you an 80 PayDex score. Once you have this score you will be ready to get unsecured bank credit.My company is not yet 2 years old, does that matter?This is another question that is usually answered unscrupulously. Most “BANK” credit requires you to be in business 2 years. You will be able to develop credit with a younger company but you won’t get the “Bank” credit you desire. Our program has 2 ways that will allow you meet the banks 2 year requirement. One is the use of optional aged shelf corporations and the other is by creating a company history.Does my personal credit score matter?The answer to this question is based on what you are trying to do. If you are trying to get unsecured bank credit you will need to have good personal credit. If you are okay with just trade credit then you can get hundreds of thousands in trade credit without a personal guarantee. Our programs will show you how to get the unsecured bank credit without your personal guarantee **Full Disclosure** You will need somebody to act as personal guarantor in the first several years of your business. We will also provide you with free personal credit coaching so you can bring your credit scores up if that is what you need.I have a 700 credit score, can you guarantee that I get $XX,XXX in cash credit lines?If a business credit consultant tell you yes to this question without further qualifying you they are lying. ALL loans rely on more than just your credit score. They rely on your debt to limit ratios on your existing credit and recent inquiries. They also rely on several other items and shouldn’t even be answered by a business credit consultant. These type of qualification questions should be only answered by a lender or a business loan brokerAre any of the trade references you help me get/provide large trade references?When most credit consultants work on your business credit they will provide you with a list of 25-50 companies and have you apply for as many as you can. The average credit line you will be approved for is $500 – $5,000. When you ultimately go to apply for a loan with a bank to get your large credit lines you will quickly find out that they will deny you because you have no history on your credit file of paying of a high credit loan. We have the availability to provide you with at least 3 unsecured trade references that will report a Trade line of up to $100,000What is your pricing?When comparing pricing you want to make sure you are comparing apples to apples – I can easily sell you books and materials for a few hundred dollars and compare it to full blown one on one coaching. Obviously the books and materials will seem cheaper. They, however, won’t get you the same results. We recommend deciding on the method of service you would like.Do you want books and materials only, personal one on one coaching, or a completed product handed to you? Once you decide on the general product then you can compare costs. Just make sure you add in the extras if they are applicable like aged corporations, large credit lines, personal credit coaching etc.Can I pay the bulk of your fees with the credit lines you will help me get?Most companies will not offer this option. Is it because they fail to provide actual “cash” credit lines? Will they not take your $10,000 Staples card as payment? We are so confident in our product that we let you pay the bulk of it only after you achieve success. We even finance the initial deposit for you. Is there another company that will do any one on one personal coaching (even using outdated basic methodology) with you and allow you to pay just $299.00 upfront? The short answer is NOAre there any other third party expenses?This is also another tricky one that most companies will try to avoid. We feel that some of these third party expenses can add up quickly and must be disclosed so you can make an informed decision. The types of expenses you will incur in the building credit process are as followsCompliance Costs – Sometimes you will have to pay state fees to get compliant (eg. Licenses, permits, corporation fees etc) Legitimacy Costs – Banks want you to be a legitimate business, you can’t be a legitimate business if you work out of the back of your truck. You will have expenses related to becoming “legitimate” Credit Building Costs – To build credit you typically have to buy stuff, buying stuff costs money. You also may have to pay third party fees to the credit bureaus so they can build your credit fileThe actual costs for these items range greatly based on your specific situation, type of business, state you are operating in, types of credit lines you want and items you buy. With every step we will offer you options that range from low cost and free to high cost. With each option we explain the positives and negatives and allow you to make an educated decision based on your needs and budget.Will you be my coach?Are you talking to a professional salesman or to the person who will be coaching you? Remember every company and situation is going to be different. How will someone who is not a coach be able to tell you that their coaching will work for you. These salesman do NOT know how to build credit, they are working on commission and their only goal is to “SELL” you. We talk to everyone before they decide to use our services. If we relied on salespeople that might “conveniently” leave things out we would be dealing with customer service issues all the time. Since our coaches are the ones that speak to you right from the start there will never be any broken promises and/or finger pointing.Shelf Corporations – If you are using another service to provide you with a shelf corporation make sure you ask this questionWill you guarantee that Dun and Bradstreet will not re-age this company when I try to build business credit on it and basically turn my aged shelf corporation into a brand new company?Dun and Bradstreet will re-age your aged shelf corporation if they see a transfer in ownership in the public records. We create our aged shelf corporations in a way that avoids re-aging. If you purchase an aged shelf corporation from us and let us help you build business credit on it we will warrant that if your company is re-aged by Dun and Bradstreet we will create a new company for you.Trade lines – If you are using another service to provide you with Trade lines make sure you ask these questionsWhat type of Trade line are you selling me?Authorized User – Authorized user accounts are temporary in nature, they usually last on your credit report for about 6 months and that is IF it ever makes it to your credit report to begin with. You must also be aware that many authorized user Trade line companies have gone out of business and there are several still out there selling a dream. You also want to keep in mind that lenders know about the authorized user loophole and have effectively closed it. If you are using the authorized user account to get credit you may be surprised to know that the lender will most likely rescore your credit file to remove the benefit you received from the authorized user trade line.Primary Account – A primary account is okay only if it is a NEW account and you are making payments, If you are added to an old “seasoned” account you are committing fraud if and when you apply for a loan. Worse yet the lenders have fraud departments that are looking for companies who provide “fake” credentials. One company in particular was opened by a ex-mortgage broker and is on the radar of the credit bureaus and underwriting departments. Imagine if you actually get a loan and have one of these “fraudulent” accounts on your credit and several years go by and you find yourself in financial distress and wind up defaulting on the loan. Do not think for a second that the lender you defaulted one will not come after you for fraud it happens everyday with people who provide fake paystubs, fake bank statements, and yes it can happen if you provide a fake trade reference. The company that is being sued for $100,000,000 issued and are still issuing seasoned primary trade lines.Our primary trade accounts are legit accounts. You are provided a NEW account, it is serviced my a fortune 100 servicing company, and you make monthly payments, if you are late you are reported late, if you are on time you are reported on time.Who do they report to?On personal credit you want your Trade line to report to at least 2 credit bureaus. In business credit you want it to report to at least Dun and Bradstreet. Our primary Trade lines report to 2 personal credit bureaus or 2 business credit bureausWe hope this information was found to be valuable to you and we hope you ultimately choose to do business with us. If you ultimately choose someone else and they fail you we will give you $100 off our service if you share your story with us.

Best in Class Finance Functions For Police Forces

Background

Police funding has risen by £4.8 billion and 77 per cent (39 per cent in real terms) since 1997. However the days where forces have enjoyed such levels of funding are over.

Chief Constables and senior management recognize that the annual cycle of looking for efficiencies year-on-year is not sustainable, and will not address the cash shortfall in years to come.
Facing slower funding growth and real cash deficits in their budgets, the Police Service must adopt innovative strategies which generate the productivity and efficiency gains needed to deliver high quality policing to the public.

The step-change in performance required to meet this challenge will only be achieved if the police service fully embraces effective resource management and makes efficient and productive use of its technology, partnerships and people.

The finance function has an essential role to play in addressing these challenges and supporting Forces’ objectives economically and efficiently.

Challenge

Police Forces tend to nurture a divisional and departmental culture rather than a corporate one, with individual procurement activities that do not exploit economies of scale. This is in part the result of over a decade of devolving functions from the center to the.divisions.

In order to reduce costs, improve efficiency and mitigate against the threat of “top down” mandatory, centrally-driven initiatives, Police Forces need to set up a corporate back office and induce behavioral change. This change must involve compliance with a corporate culture rather than a series of silos running through the organization.

Developing a Best in Class Finance Function

Traditionally finance functions within Police Forces have focused on transactional processing with only limited support for management information and business decision support. With a renewed focus on efficiencies, there is now a pressing need for finance departments to transform in order to add greater value to the force but with minimal costs.

1) Aligning to Force Strategy

As Police Forces need finance to function, it is imperative that finance and operations are closely aligned. This collaboration can be very powerful and help deliver significant improvements to a Force, but in order to achieve this model, there are many barriers to overcome. Finance Directors must look at whether their Force is ready for this collaboration, but more importantly, they must consider whether the Force itself can survive without it.

Finance requires a clear vision that centers around its role as a balanced business partner. However to achieve this vision a huge effort is required from the bottom up to understand the significant complexity in underlying systems and processes and to devise a way forward that can work for that particular organization.

The success of any change management program is dependent on its execution. Change is difficult and costly to execute correctly, and often, Police Forces lack the relevant experience to achieve such change. Although finance directors are required to hold appropriate professional qualifications (as opposed to being former police officers as was the case a few years ago) many have progressed within the Public Sector with limited opportunities for learning from and interaction with best in class methodologies. In addition cultural issues around self-preservation can present barriers to change.

Whilst it is relatively easy to get the message of finance transformation across, securing commitment to embark on bold change can be tough. Business cases often lack the quality required to drive through change and even where they are of exceptional quality senior police officers often lack the commercial awareness to trust them.

2) Supporting Force Decisions

Many Finance Directors are keen to develop their finance functions. The challenge they face is convincing the rest of the Force that the finance function can add value – by devoting more time and effort to financial analysis and providing senior management with the tools to understand the financial implications of major strategic decisions.

Maintaining Financial Controls and Managing Risk

Sarbanes Oxley, International Financial Reporting Standards (IFRS), Basel II and Individual Capital Assessments (ICA) have all put financial controls and reporting under the spotlight in the private sector. This in turn is increasing the spotlight on financial controls in the public sector.

A ‘Best in Class’ Police Force finance function will not just have the minimum controls to meet the regulatory requirements but will evaluate how the legislation and regulations that the finance function are required to comply with, can be leveraged to provide value to the organization. Providing strategic information that will enable the force to meet its objectives is a key task for a leading finance function.

3) Value to the Force

The drive for development over the last decade or so, has moved decision making to the Divisions and has led to an increase in costs in the finance function. Through utilizing a number of initiatives in a program of transformation, a Force can leverage up to 40% of savings on the cost of finance together with improving the responsiveness of finance teams and the quality of financial information. These initiatives include:

Centralization

By centralizing the finance function, a Police Force can create centers of excellence where industry best practice can be developed and shared. This will not only re-empower the department, creating greater independence and objectivity in assessing projects and performance, but also lead to more consistent management information and a higher degree of control. A Police Force can also develop a business partner group to act as strategic liaisons to departments and divisions. The business partners would, for example, advise on how the departmental and divisional commanders can meet the budget in future months instead of merely advising that the budget has been missed for the previous month.

With the mundane number crunching being performed in a shared service center, finance professionals will find they now have time to act as business partners to divisions and departments and focus on the strategic issues.

The cultural impact on the departments and divisional commanders should not be underestimated. Commanders will be concerned that:

o Their budgets will be centralized
o Workloads would increase
o There will be limited access to finance individuals
o There will not be on site support

However, if the centralized shared service center is designed appropriately none of the above should apply. In fact from centralization under a best practice model, leaders should accrue the following benefits:

o Strategic advice provided by business partners
o Increased flexibility
o Improved management information
o Faster transactions
o Reduced number of unresolved queries
o Greater clarity on service and cost of provision
o Forum for finance to be strategically aligned to the needs of the Force

A Force that moves from a de-centralized to a centralized system should try and ensure that the finance function does not lose touch with the Chief Constable and Divisional Commanders. Forces need to have a robust business case for finance transformation combined with a governance structure that spans operational, tactical and strategic requirements. There is a risk that potential benefits of implementing such a change may not be realized if the program is not carefully managed. Investment is needed to create a successful centralized finance function. Typically the future potential benefits of greater visibility and control, consistent processes, standardized management information, economies of scale, long-term cost savings and an empowered group of proud finance professionals, should outweigh those initial costs.

To reduce the commercial, operational and capability risks, the finance functions can be completely outsourced or partially outsourced to third parties. This will provide guaranteed cost benefits and may provide the opportunity to leverage relationships with vendors that provide best practice processes.

Process Efficiencies

Typically for Police Forces the focus on development has developed a silo based culture with disparate processes. As a result significant opportunities exist for standardization and simplification of processes which provide scalability, reduce manual effort and deliver business benefit. From simply rationalizing processes, a force can typically accrue a 40% reduction in the number of processes. An example of this is the use of electronic bank statements instead of using the manual bank statement for bank reconciliation and accounts receivable processes. This would save considerable effort that is involved in analyzing the data, moving the data onto different spreadsheet and inputting the data into the financial systems.

Organizations that possess a silo operating model tend to have significant inefficiencies and duplication in their processes, for example in HR and Payroll. This is largely due to the teams involved meeting their own goals but not aligning to the corporate objectives of an organization. Police Forces have a number of independent teams that are reliant on one another for data with finance in departments, divisions and headquarters sending and receiving information from each other as well as from the rest of the Force. The silo model leads to ineffective data being received by the teams that then have to carry out additional work to obtain the information required.

Whilst the argument for development has been well made in the context of moving decision making closer to operational service delivery, the added cost in terms of resources, duplication and misaligned processes has rarely featured in the debate. In the current financial climate these costs need to be recognized.

Culture

Within transactional processes, a leading finance function will set up targets for staff members on a daily basis. This target setting is an element of the metric based culture that leading finance functions develop. If the appropriate metrics of productivity and quality are applied and when these targets are challenging but not impossible, this is proven to result in improvements to productivity and quality.

A ‘Best in Class’ finance function in Police Forces will have a service focused culture, with the primary objectives of providing a high level of satisfaction for its customers (departments, divisions, employees & suppliers). A ‘Best in Class’ finance function will measure customer satisfaction on a timely basis through a metric based approach. This will be combined with a team wide focus on process improvement, with process owners, that will not necessarily be the team leads, owning force-wide improvement to each of the finance processes.

Organizational Improvements

Organizational structures within Police Forces are typically made up of supervisors leading teams of one to four team members. Through centralizing and consolidating the finance function, an opportunity exists to increase the span of control to best practice levels of 6 to 8 team members to one team lead / supervisor. By adjusting the organizational structure and increasing the span of control, Police Forces can accrue significant cashable benefit from a reduction in the number of team leads and team leads can accrue better management experience from managing larger teams.

Technology Enabled Improvements

There are a significant number of technology improvements that a Police Force could implement to help develop a ‘Best in Class’ finance function.

These include:

A) Scanning and workflow

Through adopting a scanning and workflow solution to replace manual processes, improved visibility, transparency and efficiencies can be reaped.

B) Call logging, tracking and workflow tool

Police Forces generally have a number of individuals responding to internal and supplier queries. These queries are neither logged nor tracked. The consequence of this is dual:

o Queries consume considerable effort within a particular finance team. There is a high risk of duplicated effort from the lack of logging of queries. For example, a query could be responded to for 30 minutes by person A in the finance team. Due to this query not being logged, if the individual that raised the query called up again and spoke to a different person then just for one additional question, this could take up to 20 minutes to ensure that the background was appropriately explained.

o Queries can have numerous interfaces with the business. An unresolved query can be responded against by up to four separate teams with considerable delay in providing a clear answer for the supplier.

The implementation of a call logging, tracking and workflow tool to document, measure and close internal and supplier queries combined with the set up of a central queries team, would significantly reduce the effort involved in responding to queries within the finance departments and divisions, as well as within the actual divisions and departments, and procurement.

C) Database solution

Throughout finance departments there are a significant number of spreadsheets utilized prior to input into the financial system. There is a tendency to transfer information manually from one spreadsheet to another to meet the needs of different teams.

Replacing the spreadsheets with a database solution would rationalize the number of inputs and lead to effort savings for the front line Police Officers as well as Police Staff.

D) Customize reports

In obtaining management information from the financial systems, police staff run a series of reports, import these into excel, use lookups to match the data and implement pivots to illustrate the data as required. There is significant manual effort that is involved in carrying out this work. Through customizing reports the outputs from the financial system can be set up to provide the data in the formats required through the click of a button. This would have the benefit of reduced effort and improved motivation for team members that previously carried out these mundane tasks.

In designing, procuring and implementing new technology enabling tools, a Police Force will face a number of challenges including investment approval; IT capacity; capability; and procurement.

These challenges can be mitigated through partnering with a third party service company with whom the investment can be shared, the skills can be provided and the procurement cycle can be minimized.

Conclusion

It is clear that cultural, process and technology change is required if police forces are to deliver both sustainable efficiencies and high quality services. In an environment where for the first time forces face real cash deficits and face having to reduce police officer and support staff numbers whilst maintaining current performance levels the current finance delivery models requires new thinking.

While there a number of barriers to be overcome in achieving a best in class finance function, it won’t be long before such a decision becomes mandatory. Those who are ahead of the curve will inevitably find themselves in a stronger position.