Nov 16, 2023
Building Commercial Credit
w/ Chris Owen of J. Galt
AZ TRT S04 EP45 (208) 11-12-2023
Things We Learned This Week
- J. Galt Helps Small Businesses Optimize Cashflow & Manage Growth
- Helping Business Owners Access Loans & Credit ๐ช๐๐ง๐๐ข๐จ๐ง Endangering Their Personal Credit & Family Assets
- Small Business is the backbone of a community, when it thrives, so does the community
- 3 Types of Credit - Personal, Business & Commercial Credit - Business need to build their Commercial Credit
Guest: Chris Owen
LKIN: HERE
Helping Business Owners Access Loans & Credit ๐ช๐๐ง๐๐ข๐จ๐ง Endangering Their Personal Credit & Family Assets
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When small businesses prosper,
then the community also thrives. The passion I have for helping
fellow entrepreneurs succeed is something Iโve fostered my entire
life. As an advocate and advisor for small businesses I have seen
the challenges they face firsthand.
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And yet,
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When businesses fail, they leave
an average of $๐ด๐ฏ๐ธ
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for the business owner and their family. Knowing these daunting stats, it has become my
lifeโs mission to help protect these incredible small businesses
that are the bedrock of our economy.
Can you imagine what your small
business would look like in 12 months
ifโฆ
โ
You didnโt get turned down for the loan, credit card, or line of
credit you needed?
โ
Your access to loans and credit didnโt impact your personal credit
or put your family home at risk?
โ
You had the money you needed to expand and meet new
opportunities?
J. Galt: https://www.jgalt.io/cowen
We Help Small Businesses Optimize Cashflow and Manage Growth
Our Proven Business Credit Building System
J. Galt Finance Suite continues to strengthen the small business community by allowing Main St. to build business credit like Wall St.
Member Journey
Our mission is to get your business credit worthiness to a place to have access to the capital you need, when you need it.
First, we ensure your business information matches Secretary of State, IRS, and Credit Agencies. Next, we verify all proper registrations are in place and cross reference data points on your credit reports. Then, we take your business credit through the vendor tiers to get you access toโฆ
$50,000 of credit within your first year and beyond.
Notes:
Seg 1
All business owners know, access to capital is critical. Often you need money to grow your business, or help you in emergency. Cashflow is life line of a business. When itโs not strong, this could cause big problems in the business.
Your credit capacity is your ability to borrow money, especially on good terms or a lower interest rate. It is always good to have cash on hand, access to both business loans and credit lines when needed.
Understanding credit, loan terms and how to raise money is crucial to a business. You also need to understand that when you borrow money (whether it is from a bank or an investor), you a partner with your lender. They will check in on you and maybe even have a say in how your business is run.
Clip from:
You Need to Control 3 Things in Investing โ Taxes, Capital & Assets
- BRT S03 EP34 (133) 7-22-2022 โ Wealth for Life
Things We Learned This Week
- Control Taxes - Tax Protection, move $ to Tax Free position, must reduce taxes to grow wealth, every $1 lost to taxes = $8 lost wealth
- Control Capital - Access to Capital, use w/ Leverage of 4:1 to grow Capital, & Protect Principal, Lock in Gains, grow wealth efficiently
- Control Assets โ Acquire Assets like real estate, or stocks, or pull $ from biz income, & redeploy for passive investing to Grow Wealth more - then Repeat
- FED Stimulus Money $ props up Zombie Cos (weak debt ridden coโs) in S&P Index, drags good biz down
- Business Owners concentrate on Earning $, need Good Advisors to Protect & Grow wealth after, reduce taxes, structure LLC right
Denver Nowicz, President - Wealth For Life
https://wealthforlife.net/brt/
https://twitter.com/denvernowicz
Denver is an advisor with nearly 20 years experience working with clients in investments and insurance, designing retirement plans with a combo of both. He takes us through different strategies for clients to get the best allocations for their money over the long term. It is the Combo Strategy of both Offense and Defense, the synergy of the mix, not โAll or Nothingโ.
Full Show: HERE
Seg 2.
Chris Owen of J. Galt
Chris works with small businesses to build their commercial credit and grow their business. They work with many different industries, with construction as a common client.
There are 3 Types of Credit - Personal, Business, and Commercial.
Personal Credit is the common credit for car loans, credit cards or mortgages. This credit score could be reflected on the interest rate for your mortgage or it could affect your insurance. Typically at 18 you get your first credit card and you start building your credit, you may even need your parents to cosign and be a guarantor on a car loan
Business Credit which is usually the type of credit carried by small businesses is an extension of your personal credit. The owner of the business would cosign on to a business loan and give a personal guarantee.
Anytime you give a personal guarantee whether on a personal loan or a business loan it affects your credit. So if the business has issues and goes down, you still owe the loan personally. Average debt of a business owner who lost their business is $80K.
Basics of Business 101 - you have 3 financial statements - a profit and loss, balance sheet and the cash flow report. Very important to understand cash flow and what type of access you have to capital.
Businesses use an EIN as an identifier, which is like a Social Security number for the business. This number keeps your score and is your access to corporate credit. When a business pays taxes they file their return with an EIN number.
Your Corporate Credit (or Commercial Credit) profile gets billed off your EIN number, not your personal credit. This is what big corporations use to get access to capital.
Fortune 500 companies like Apple, Home depot or Nike have corporate credit. It is not widely known in the business industry. You can improve your cash flow and use corporate credit to expand and grow your business.
Seg 3
Building commercial credit is not widely known or discussed in business. You must be intentional about building it.
Business credit and personal credit are tied together. Business credit can leverage off of personal credit. The credit can grow together or be hurt if one goes down.
It is important to know the major credit agencies and what type of credit they report. The 3 big agencies are Equifax, Experian, and Dunn and Bradstreet (D&B)
The average business does not have corporate credit, just business credit. 93% of the agencies do not report positive payment history so there is no regulation of this. You need to know all reports. Often the agencies are not reporting what is needed to build corporate credit.
When you build a house you start with the foundation. This is no different with credit. J. Galt has 125 checkpoints to review the credit foundation.
Some of the checkpoints deal with the spelling of your full legal name on all your business documents. Somewhat of an alpha numeric check. Your business name, the LLC checking if your name has your middle initial or if itโs spelled differently with different agencies.
Something as simple as your name being spelled differently can deny your credit, and then you wonโt know the reason why. If denied, it could take 6 to 12 months to re-apply. It is crucial that all your banking information is correct and consistent.
Access to credit can be the lifeline of a business loan. If you apply for loans and get denied this could be very damaging.
Seg 4
If you can build true corporate credit you can get 10x the lending credit. You also can get lower interest rates of 1 to 5% which is much better than a personal or business loan.
Helping small businesses get access to credit helps the economy. 1.3 million businesses have closed in the last 2 years, most because of cash flow issues leaving an average of $80K in debt.
J. Galt has a 7 Point System to build credit checkpoints 125 credit reporting get started with the 7% who you need to report to then for two years of credit open lines of credit get the best terms financing and get a credit score of 80+
J. Galt can assist with lenders contacts on when and how to apply so you achieve corporate credit. Now you can get loans for real estate, vehicles, buildings or construction, credit cards, fuel cards, etc.
Credit builds to the amount of expenses you were working with. For example it could go from $50K up to $500K.
The success goal is to have true tier for corporate credit and a credit score of 80+ based on a 0 to 100 score. This is the equivalent of a 720 credit score for personal credit.
No. 1 killer of business is bad cash flow and a lack of capital. Business either grows or dies.
OT
Financial stress is real.
J. Galt - Case Study
Client: Trucking / Transport Company.
Client went from $6900 in credit per month up to $65,000 access to capital very quickly
J. Galt recommends to put half the amount of the cash access in an emergency fund
Client was able to get credit scores of 96+ and total access to credit of $724,000 in under 1 year.
Now the business has less stress and access to credit and can grow.
Client now has access to numerous credit lines โ
ex: fuel credit, Home Depot, Best Buy, Roof Plus, Ford ($200K)
Business Topic: HERE
Investing Topic: https://brt-show.libsyn.com/category/investing
More - BRT Best of: https://brt-show.libsyn.com/category/Best+Of
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