Business Economics Finance

With the number of small and home businesses growing at such an incredible rate, it is no surprise that business credit cards are making more of a showing these days in the market place. It was not long ago that small business owners had to depend on small credit lines or business loans from banks to manage cash flow on a monthly basis, which could be tedious and costly. This meant spending more time doing paperwork for the bank, and less time managing the business.

The release of business credit cards has helped to alleviate these problems. About 65% of all small businesses are currently using business cards, and this number is only going to increase. Most major creditors now have a business credit card offering, and availability is increasing by the moment.

Business credit cards bring several powerful advantages to the table for the small business owner, including:

Cash Flow Management - The number one concern of almost every business owner is cash flow. A bad month can bring down an entire quarter is the business has no means to float itself through a rough time. Business credit cards can be a key element in making through a rough patch.

Credit Rating Increase - The credit rating of a business can mean more than just financing. Customers may not want to do business with a firm that has a poor credit history, and corporate growth will most certainly be delayed if not stopped entirely. Business credit cards used in a responsible way can help build the overall credit rating of the firm, as well as help open new avenues of financing down he road.

Spending Control – Giving employees the ability to make purchases for the company on the fly can help streamline day to day business. This of course can also open the door to inappropriate expenditures, or simply over spending on needed items. With a little management these problems can be easily overcome, and recording as well as reporting corporate spending will be all the better for it.

Business Taxes – For home based and small businesses credit cards offer the opportunity to consolidate all corporate spending. While a larger business would be hard pressed to do this, there is no reason every business expense incurred by a small business couldn’t be placed on a credit card. This means all corporate spending is managed through one sources, and when tax time comes around it is a simple matter to record.

Rewards Programs – Using a business credit card to manage all corporate spending is a good way to earn bonus packages from rewards cards. Air miles and cash back incentive programs really add up if you are routing your business spending through one card.

Business credit cards are an indirect way to help solidify your firm in the mind of your client. Take them to lunch and pay with the corporate card. This shows a certain level of stability and depth to a possibly new firm, and also helps to increase your credibility.

From cash flow to taxes, to a greater level of spending control, business credit cards provide a valuable service to any size firm. As with all credit cards, care must be taking when managing their usage. For all the good they can do for a business, they can also cause problems when mishandled. Use the business card wisely and reap the benefits.

About The Author

Jon Norwood is a founder and managing partner of

A rather disturbing feeling hit me today (and it wasn’t yesterday’s Chocolate Mud Cake that my daughter fed me – remind me to tell her that the cake should be made out of chocolate!)

No, my disturbing feeling emanated from a conversation I had with a business acquaintance of a family friend (some Aunt’s former lover’s first cousin, twice removed, who now runs a small sporting store – well you get the picture anyway).

Trevor (real name hidden to protect his stupidity) was in some financial distress as he had to pay GST to the Australian Government but had spent it all and was now trying to work out a repayment programme with the Australian Taxation Office.

“How did you spend it all?” I asked.

“Well, you know, the house renovations were costing more than I expected and I needed some quick cash, so I drew it out of the company. You know how it is” he replied.

“No, I don’t” I responded, “but surely you knew this would leave you in a pickle. Didn’t your cashflow forecasts show you this was coming-up?”

“Well, I did prepare those things but I don’t really look at them” he replied.

A number of suitable responses filled my mind at that stage but I contented myself with telling him he should try to repay the money as soon as possible to the ATO and get out of their bad books.

It constantly amazes me that some business people ignore the basic fundamentals of running a business. What’s more infuriating in this case is that Trevor had run his business for 12 years and had a constant turnover, so he should have known what were the critical “cashpoints” of his business.

“Cashpoints?” I hear you say, “What are they?”

“Cashpoints” are what I call those times of the year where your cash requirements are abnormal or extraordinary.

To give you an idea of what I mean, I have listed below the most common types of outgoings that people seem to forget about when planning for cash needs or would like to forget about.

1. Net GST payments (Remember, this is not your money, it is the government’s);

2. Quarterly PAYG/IAS payments (This is payment of your income tax obligations);

3. Depreciable equipment (This is replacement/upgrade of furniture and equipment, computers, faxes, printers, etc);

4. Professional fees (A biggie! In more ways than one. Having a new lease drafted? You need a lawyer. Getting your businesses tax return done? You need an accountant. Buying a business for about $200,000 or above? You’d better allow for a few thousand dollars in professional fees).

The biggest problem most businesspersons have is thinking solely about the direct inputs into their business and not looking at peripheral costs. Some businesspersons identify relevant costs but underestimate them, in the hope of making the cash budget “look good”. This is why those businesses experience cash flow difficulties and find themselves having to pull a rabbit out of the hat, down the track.

A cashflow forecast is not undertaken to make anything “look good”. It is undertaken to give YOU, the owner a realistic view of one aspect of how your business will perform.

If your cashflow forecast looks horrible, isn’t it better to know about it now rather than when your business hits financial difficulties?

As they say “cash is king” but you don’t want to make the lack of it turn you into a “joker”.

Craig Wood has been a business consultant for 20 years, assisting home based business owners to ensure theirs is one of the homebusinessknowledge.com” target=”_blank best home based businessess it can be.

See why home based business owners are rushing to receive Craig’s monthly tips and strategies by visiting homebusinessknowledge.com” target=”_blank homebusinessknowledge.com.

Every man tries to acquire and treasure some kind of asset, such as home, land, precious jewellery, valuable shares and stocks, etc. in his life. Valuable assets come to our rescue during the trying times of our financial life. Assets have some value attached to them that can be utilised by the asset owner to receive financial aid during the phase(s) of monetary shortfall.

Secured loans provide an opportunity to the asset owners to make use of the equity in their assets for raising the capital necessary to fulfil their needs and desires. A secured loan is offered against a collateral security, which may be any valuable asset owned by the potential borrower. Secured loans are known as homeowner loans or home equity loans when the loan is offered exclusively against home equity.

Secured Loans are useful when you require to borrow a large amount of funds to realize your ‘big’ dreams and desires. The homeowners can make use of secured loans to unlock the equity present in their homes and use the home equity for their needs. Home equity is the difference between current market value of your home and the outstanding mortgage amount against the home. A homeowner is free to use this home equity for raising capital during financial shortfall.

The interest rate on a secured loan is higher as compared to the mortgage rate. This is because the bank/lender offering a secured loan has a second claim on the home/property. This risk premium gets reflected as the increased rate in your home equity loan agreement (as compared to the mortgage rate).
However, the loan taken against home equity is much cheaper than an unsecured loan as the presence of security lowers the risk borne by the lender.
A secured loan is a cost-effective means to consolidate your high-interest debts, such as credit card balances, medical bills, higher education bills and so on.

So, make an intelligent use of your ‘material assets’ to add value to the ‘biggest asset’ bestowed by God…your life!

About The Author:
The author is a business writer specializing in finance and has written authoritative articles on the finance industry. He has done his masters in Business Administration and is currently assisting e-secured-loans.co.uk as a Finance specialist.

For more information visit: e-secured-loans.co.uk/secured-loans.html e-secured-loans.co.uk/secured-loans.html