How You Can Separate Your Business Finances From Your Personal Money

Separating business funds from personal finances should be every business owner’s concern. Surprisingly, not many entrepreneurs take this matter into serious consideration. For instance, many small business owners and home based business entrepreneurs prefer to use their personal credit cards with their business expenses thinking that it makes no difference. But a wise business owner should think about the long term complications that combining personal and business funds in just one account could cause later on.

At the start, you may find that using your personal credit card is enough. But as your business begins to grow and accumulate expenses, having a separate business account is indispensable. It will make a big difference not only in managing your business finances, but also in making finance-related decisions. In this article, let’s talk about the advantages of using business credit cards for your business expenses.

Business Credit Cards Means Easy Management

Why would it be easier to manage business finances using business credit cards? Because all your expenses are automatically included in your summary of accounts so you can be assured that you won’t miss a single purchase no matter how big or small that purchase was. You will be provided with monthly billing statements, along with quarterly and yearly summaries of your account.

These account summaries contain a detailed list of all the purchases you’ve made during the past months or the entire year. Purchases are also categorized so you can use it as reference to your bookkeeping and accounting tasks. Filing your business taxes is definitely made easier with the help of business credit card account statements.

Add to this, many business credit cards include the option to access your account online. This is an enormous help for a busy business owner as it enables convenient tracking of business accounts at any time. Even as you work on your desk, you can simply log in to your online account and do your checking within just a few minutes. Account summaries are also downloadable so you can use them along with your accounting software.

Build Business Credit with the help of Business Credit Cards

Another important advantage of getting a business credit card is to build a separate credit history for your business. Don’t forget to register with a business credit bureau such as D&B or Experian to begin establishing your business credit immediately. By using your business credit card and keeping up with your payments on time, you can be assured that you will be building excellent credit history for your company.

Every business is confronted with financial challenges sooner or later. You may not need financial assistance at the moment but by the time you need to apply for a business loan to help you with your business projects, having a solid business credit history will help you secure an approval more easily. Aside form getting easy approval with your applications, having excellent business credit also guarantees that you’ll be offered better rates and terms by lenders.

In summary, getting a business credit card is beneficial in two ways- for separating personal from business finances and for building up a separate credit history for your business. If you’re a business owner or planning on starting up a business of your own, this matter is definitely worth the thought.

Unsecured Business Loans – Financial Support For Your Business

A business venture is an entrepreneur’s vision manifesting in a physical, tangible form and therefore, every business owner aims to make it a resounding success. However, it is not enough just to have a strong dedication and vision to make the business grow and it needs the additional inputs of various resources, in order be a profitable entity. Out of the various crucial resources, one of the most important ingredient in the success recipe for a business is finance. A business enterprise simply cannot survive without the financial backbone of fixed and working capital and an entrepreneur must have ready access to sufficient funds to supply this capital investment. In case a business owner does not have sufficient financial resources of his own, then the next best solution is to opt for a convenient loan. Now there are many lenders in the money market who are willing to extend financial loans to entrepreneurs and these loans could be either secured or unsecured business loans, depending on the borrower’s requirements.

The unsecured business loans are preferred by many business owners, who do not wish to take risks by putting up their business venture as collateral against the loan, as in the case of delayed payment or non repayment of the loan due to any reason, the owner may lose the collateral to the lender. However, the unsecured business loans are a high risk category for any lender who extends it to the business owner and hence, he secures his profit by charging a higher rate of interest on the loans. Hence, as a business owner, if you are considering the option of these unsecured loans, then it would be advisable to compare the loan plans offered by various lenders in the market and only then make an intelligent selection of the best financial deal possible.

Most of the lenders offering the unsecured business loans, have their own online websites on the internet. The websites are the best source of information about any and every aspect of these loans and a potential borrower could easily gather the required information from these websites. Once the business owner is sure about the plan which he intends to apply for, he can then simply fill up an online application form available at the lender’s website and send in his application for the loan. The lender will consider whether the borrower has a substantial plan for the prospects of the business, check the credibility and repayment ability of the borrower and once such details have been verified, the decision for the loan approval is instant.

The unsecured business loans often form the best source of finance for the much required working capital of any business. Be it payment to vendors, wages to workers or purchase of raw material, a business always has consistent need for cash for its day to day working. When a business owner applies for unsecured loans, the processing is simpler and much faster, as there are no collaterals to be verified and this enables the borrower to have instant access to cash as and when there is a requirement. So, if your business too is suffering due to lack of funds, maybe it is time that you opted for these loans and gave your business the much needed financial boost it needs.

Business Finance Through Your Business Plan

There has been numerous accounts of research into businesses and one result from this research clearly shows that there is a high failure rate as one in three businesses close within a year and only one in five make it past five years of being in business.

Some of the main reasons as to why businesses fail are down to aspects such as poor marketing, lack of financial awareness, unrealistic expectations. However successful businesses are more likely to succeed if they have prepared a business plan. There is a saying that states success comes to those who plan it and this is never truer than when it is applied to business.

A business plan is the process of charting a course for a business it is the act of defining the ambitions and objectives of a business as well as working out what is needed to achieve them in terms of actions and resources. Without your business plan you won’t know where your business is headed and you are unlikely to get to where you want to be. A completed business plan should keep customers. Capacity and cash in balance as your business grows. It is proof that your business is viable based on the assumptions that is made within it. The business planning process defines these assumptions and ensures that the business understands, and is prepared to take, the actions needed to deliver the results it needs.

One of the main uses of a business plan is to secure external finance from investors or lenders. Investors are people who will provide your business with the money it needs without you having to pay back a penny; however it will mean that the investor gains a percentage of the shares within your business. A lender is, for example a bank; they will lend you the money you need for your business on the condition that you will repay it plus interest. Without a well prepared and structured business plan no investors or lenders will be prepared to hand over money to your business. This is because without a business plan they have no proof that you will be able to repay the debts that you will owe them.

Financial planning is key to your business plan. Your financial planning should include your businesses financial forecasts for the next three, or even five years and the level of sophistication used should reflect the level of sophistication of your business; however, the first 12 months’ forecasts should have the most detail associated with them.

As well as enabling you to gain the finance that you need to start up your business, your business plan is also essential to help you spot potential pitfalls before they happen as well as a way of focusing your development efforts within the business and it also works to measure the success of your business.

It is also important to remember that your business plan is a living document that will need updating and changing as your business grows, this is regardless of whether you intend to use your business plan internally or externally, either way you should still take an objective and honest look at your business.