Converted: Uncover the Hidden Strategies You Need to Easily Achieve Massive Credit Score Success (Business Edition)

By Nathalie Noisette

Introducing: "Converted" - Access The Power of Personal Credit to Skyrocket Your Business Growth!

Are you a new entrepreneur looking to build a thriving business but held back by a less-than-perfect credit score? Do you dream of accessing the financial resources you need to make your entrepreneurial visions a reality? Look no f

• Language: English
• Publisher: Credit Conversion, LLC
• Release date: Mar 26, 2023
• ISBN: 9781737214885

Book preview

Preface

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Ioriginally wrote a version of this book to cater to single mothers. I still stand by single mothers being the portal to generational wealth. My intention was to help explain how having good credit would not only improve their lives, but also allow them to set up foundational steps to creating structure around their finances. It was also intended for them to have the knowledge they needed to pass on to their children.

I set my sights on single mothers because I made a promise to myself that I would support single mothers the way I know best (which means passing on everything I had to learn the hard way about personal finances and making it easier for you). I still have special services for the entrepreneurs who are single mothers because that group is dear and near to me.

Truth be told, there could be 20 editions to converted because there isn’t really a group that credit doesn’t impact.

For this edition, I wanted to just change a few pieces of information to build a case for credit as a business owner (Chapter 1), but the foundations remain the same.

If you’ve read the original book, only a few changes were made.

As we continue to grow on this entrepreneurial journey, my content will build on the steps you need to get your business right for the long haul, but this is the first step.

Get the money piece right and you are 50% of the way there.

Now let’s get to business (pun intended).

Chapter One:

A Case for Credit

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You finally found it, the business idea you believe is going to change you and your family’s life.

You begin to put all the pieces in place and then you slowly (but surely) realize this is going to cost you much more than you thought. Heck, it is going to take a lot more out of your energy wise than you thought as well.

In comes the case for credit.

What if you had a way to increase the chances of success in your business? What does credit have to do with that?

As you build your business, you will come across these foundational elements that will ring true for any business you plan on starting. The truth is Your personal finances will bleed into your business finances IF you don’t have a handle on it.

It may seem obvious but let’s make a case for credit.

In short, credit is where trust and risk meet. How much money you are trusted to manage depends on the bank’s perception of your risk to them.

The higher the risk (default risk usually) the lower the trust. They make up for this by charging you higher interest rates. The lower the risk, the higher the trust and they reward you with lower rates and the bonus of increasing your available spend.

As business owners that will also be true for you when you plan on building your business credit. It will also be true for your relationship with your clients. Risk and trust are an inherent part of being a business owner.

To measure the relationship between risk and trust, the lenders will use your credit score. These three numbers are a combination of an algorithm aggregating data and determining your financial fate.

Our goal is to take that fate into our own hands AND allow us to always have the risk and trust we need to get the capital we need when we need it.

Earlier we mentioned that your personal finances may bleed into your business finances if you don’t have a handle on it. Well, let’s discuss why you need to get a handle on your personal finances.

Financial stability

As exciting as business is, it is also challenging and risky. Having a handle on your personal finances allows you the room to understand your money in a way that can help to mitigate some of that risk. When we know what is coming in and coming out, where we can afford to make a few cuts, and get a handle on what’s not bringing us a solid return on our investments we are set up for success. You must do that on the personal end as well. This will offer financial stability in the sense that you get to make informed decisions. This is a muscle you get to flex personally and professionally.

It is a mistake to think that having more money is the only solution to this problem. In many cases, I’ve seen people be a poor steward of little and then get a lot and become a poor steward of a lot. The goal is to learn how to understand what you have and understand what you need. When you get more money (which is our objective), you can confidently plan for the funds.

Start-up leverage

You don’t have to build business credit, to build a business. I want to be clear on that, however, if you plan on starting a business and you don’t have any revenue to support getting funding or credit, lenders will lean on your personal credit as leverage. They essentially want to know that you are in a financial position to pay back any money borrowed in case your business is a bust. I mean someone must be held responsible. Until your business can stand alone (which is usually considered after two years or two tax returns), financially, you will be what’s called a personal guarantor for your businesses credit. Again, you don’t have to do this. The upside is that being a personal guarantor allows you to start building quicker than someone who must wait the two years to get some money in the door or have proof of business experience.

Buffer

While you wait for your business to generate some money, having your personal finances in order allow you to relieve the stress of having to juggle your personal life and your professional pursuits. If you don’t mind the juggle then fine, but why make life harder on yourself and add unnecessary stress.

The book will help you outline how to get your personal credit in order. I would add that you may want to consider implementing a budgeting system. When we get to some of the high-level credit tips in the resource section, you’ll see exactly why.

Compliance

If you find yourself in situation where you are profitable in your business and you are dipping into business money to manage your personal life, this is greatly frowned upon by the government. You will need to learn to keep your funds separate. Dipping into one or the other doesn’t have to happen or if you need to pay yourself, it must happen in a structured way. Having your finances in order keeps you from the temptation of mingling those funds with one another in a way that could get muddy or get you in trouble with the IRS.

Cash Flow Management

Cash flow will be a constant in your business. Having a handle on what’s coming in and what’s going out (in addition to your personal budget), will help determine the following:

If you need to raise your prices

Assess your expenses

Make informed decisions about spending, saving, and investing

In an ideal world, you will have enough money coming in to cover your expenses, save, invest, and to put towards marketing. Unfortunately, we do not live in a perfect world. This is where credit comes into play. When negative cashflow (less money coming in than going out) comes into effect, you can lean on credit to make up for negative cashflow until you can get back in the green. You would have to worry about if your clients can be serviced, if your employees will be paid, or if you’ll have money for inventory.