Tips And Ideas For Corporate Credit

Introduction

According a report released by the Tower Group, 60% of small businesses use credit cards to meet their expenses. Even though the obvious advantages of using a credit card are many, it is always advisable to use them with caution so as to avoid sinking your company into debt. Here are some tips and ideas to guide on the proper method to use and manage your corporate credit.

Step 1

You should avoid co-mingling your personal transactions with your business transactions in order to avoid potential money management and tax problems. Learning to separate your corporate credit from your personal credit will let the IRS and everyone else know that you take your business seriously. Most business owners will find it difficult to keep track of their credit payments at the end of the year. However, most credit card companies will provide you with a year-end statement summary, detailed all of your business transactions in a categorized and itemized fashion.

Step 2

Due to the level of competition among credit card companies, some corporate credit card companies will offer reward and discount programs as a means to entice small business owners. The rewards and discounts offered will vary from one credit card Company to the next. Make sure to make full use of such programs to lower your credit card expenses.

Step 3

Corporate credit also provides the opportunity to extend credit cards to your employees. However, you should make sure to set limits and monitor their spending, so as to ensure credit costs are manageable and inline with company policies.

Step 4

Small business owners typically tend to apply for corporate credit from the Small Business Administration (SBA). This is because the SBA is able to provide loans at very little or no interest. Instead of paying back huge amounts of money in the form of interest payments, business owners should take advantage of SBA loans to minimize the cost of accessing credit.

Step 5

Business owners should avoid hopping from one credit card Company to the next. As attractive as those other credit card offers may be, it will only make it more difficult for you to manage your payments and as a result hurt your credit score in the process. Try the best you can to limit your corporate credit to a manageable level, so as to ensure a good credit history.

Tips

In order to get the best rate on your corporate credit, you should ensure to shop around for the best possible rate from corporate lenders. Even though it is possible for businesses with a bad credit score to successfully apply for loan, the interest rate charged under such circumstances is often very high as compared to companies with a god credit score. If your business has a poor credit rating, you should do your best to improve it, so as to obtain more favorable terms for your corporate loans.

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