Embark on a journey through the financial landscape with “Conquering Financial Frontiers: A Roadmap to $10 Million in Business Credit.” This article unravels the complexities of banking mechanics and unveils a strategic blueprint designed for ambitious entrepreneurs aiming to leverage business credit to its fullest potential. Discover how to navigate beyond traditional loans, harness the power of diverse financial products, and strategically reinvest profits to fuel your business growth. With expert insights and a visionary approach, this guide is your compass to financial mastery and the gateway to unlocking unparalleled business success.
In an era where financial acumen is not just an advantage but a necessity, understanding the intricacies of how banks operate opens up a world of opportunities for entrepreneurs. I’ve been teaching Entrepreneurs this strategy for years now and I currently have a dozens of clients who are in my portfolio, along for the journey. This article draws insights from a thought-provoking discussion on banking 101, offering a strategic roadmap for entrepreneurs eager to harness the potential of business credit and stack an impressive $10 million.
#Understanding the Banking Mechanics
At its core, banking is about the flow of money: banks borrow from depositors (like you and me), lend to those in need of credit (businesses and individuals), and make profits on the interest rate differential. The cycle is fundamental yet profound—depositors’ money is transformed into loans that fuel business ventures, driving economic growth and prosperity. But at the core of economics and how we do business daily, (and you’ve heard this plenty of times before): “it takes money to make money.”
Leveraging Business Credit: The Strategy
1. Establish a Solid Foundation: Your journey to amassing business credit begins with a strong business plan and a robust financial foundation. Ensure your business is properly structured (LLC, S-Corp, etc.) and has all the necessary licenses and a clear credit pathway. But there’s more to that; structure also includes compliance is like having a business phone number that’s listed with 411 directories assistance, also having a website even if it’s just a webpage but along with your webpage or website you should have plenty of online evidence of your corporation so that if someone mainly an underwriter does a search they will see that you are an operable business with connections in the community. Also you should have social media in place for your business that speaks to what you do and how you do it. Mainly how do you make money? Naturally if you have a website you will also have an connected to the domain. Also it wouldn’t hurt to sign up for some of the traditional spaces in business such as NAV such as Dun & Bradstreet, and if your business is aged enough you can at least go get a Sam’s Club card. Now Sam’s is under written by synchrony Bank and synchrony is one of those underwriters that is well-known in business. So even though I’m going to explain to you how to overcome tear building I still need for you to know that having synchrony as an underwriter already established with your company is very substantial in your intent on accessing greater funding. However even if you’re doing business from home and you have these simple Compliance is in place by the end of this article I’m going to explain how you don’t need to go through any of this to your building that my comrades out in cyberspace are selling you. And I’m not throwing Shade on them because I used to be and I used to do what they do Ware every week I would go on clubhouse and speak to hundreds of people mostly entrepreneurs and I would teach them to your building since I had done that for my own company from 2015 through 2021. It is only when I discovered how to get to the money faster that I have decided to step away from that low and pattern of establishing store credit and company credit. My only desire at this point is to establish corporate credit and to stack business credit cards for no less than $50,000 on each piece of plastic.
2. Build a Relationship with Your Bank: Understand that banks are more than just money lenders; they’re partners in your business growth. Start by opening a business checking account and engaging with your bank regularly. This establishes trust and positions your business as a credible borrower. We currently hold mini business accounts at a number of banks and we have multiple accounts at individual banks so every time we approach our current banks with new corporations it affords us new opportunities for funding in theory every corporation that we bring to our banks will be able to fund us a quarter of $1 million and as we grow those numbers will be greater. This is all about growth so growth will be detailed on ledger sheets and bank statements revealing our revenue streams and our revenue streams will substantiate our ask for funding. However it’s not just our company being set up that matters it’s also about the CEO and how the CEO is set up in their personal credit journey. And that speaks to my next point…
3. Understand the Importance of Creditworthiness: Your business’s credit score is akin to a financial fingerprint, crucial for securing loans. Focus on building a strong business credit history by using credit lines responsibly, paying debts on time, and maintaining a good debt-to-income ratio. And as you get access to greater credit lines keep the lines of credit that you have open but move most of your spending 21 or two credit cards things that are easy to manage and maintain. Just because you have 100 credit cards does it mean you have to have 100 bills you can put a lot of those cards on auto pay and you can use the larger credit cards to take care of it the lion share of your bills and then as needed you can take from Peter to pay Paul and use your capitalization for whatever investments are presented.4. Utilize Credit Lines Wisely: Once you have access to credit lines, use them to fund revenue-generating projects. This isn’t about buying unnecessary assets but investing in ventures that will yield returns above the cost of the credit. And when I say ventures I don’t mean risky investments I’m talking about traditional reasonable expectations. One of those expectations is obviously real estate; you can rent a house today and you can sublet that house to four professionals who will gladly pay consistently for the peace of mind and the experience that you present in said house. However considering that I have done this for many years I will say that you can jump ahead by first of all getting access to the funding and second of all hiring the professionals necessary to run your operation. The best of all worlds is to have a co-opted living experience that is infused with the resources that it takes to run a business. For instance having a coffee maker having bottled water having a recording studio for a live streams Etcetera having a business center with computers and printers and such. All of those conveniences add up to comfort and those comforts add up to revenue and that revenue adds up to bank account deposits and those bank account deposits speak to the point of the importance of credit worthiness. Because let’s be clear even though we know many people take from Peter to pay Paul and live 100% on credit that is the exception to the rule. The state of mind should always be to make more revenue to pay creditors before due dates and to amass more credit during the journey.5. Reinvest Profits: The key to exponential growth lies in reinvesting profits back into the business. This increases your equity and improves your borrowing capacity, enabling you to secure larger lines of credit. So what is working for you? Is your food chain making money? or is it a sponge? Is your nightclub floundering? Or is it blossoming? Yes there’s also a certain amount of passion and purpose and intention where it relates to your business but passion purpose and intention without capitalization is just a good try. For the people who watch me and learn from me and use what I teach I want you to know that your intention should be greater than just a mere “try.” Everything that you’re about has to be a “must” not a “should” or a would or a could. I’m talking no excuses. So begin your list of investments or revenue streams that leaves no room for excuses.
6. Expand Your Financial Toolkit: Moving beyond conventional loans is essential. Delve into a variety of financial instruments, including business credit cards and lines of credit. While merchant cash advances are available, they should be approached with caution, reserved for situations where other options are exhausted. These advances, though readily accessible, require regular withdrawals from your bank account, which could disrupt your cash flow if your business experiences temporary setbacks. It’s important to note the surge of financial technology companies (“fin-techs”) in the market, offering seemingly easy funding solutions. However, the key is to select the most strategic and sustainable option for your business needs, prioritizing those with favorable terms and minimal impact on your operations.
Expand Your Financial Toolkit: Moving beyond conventional loans is essential. Delve into a variety of financial instruments, including business credit cards and lines of credit. While merchant cash advances are available, they should be approached with caution, reserved for situations where other options are exhausted. These advances, though readily accessible, require regular withdrawals from your bank account, which could disrupt your cash flow if your business experiences temporary setbacks. It’s important to note the surge of financial technology companies (“fin-techs”) in the market, offering seemingly easy funding solutions. However, the key is to select the most strategic and sustainable option for your business needs, prioritizing those with favorable terms and minimal impact on your operations.
7. Leverage the Power of Compound Interest: Understand that the real power lies not just in making money but in making money work for you. Reinvesting profits and efficiently using credit can set off a compounding effect, significantly accelerating your journey to $10 million. For instance if you only put $75 per week away and don’t touch it for 8 years, it will have compounded interest for all that time and you will wake up in eight years and you’ll have close to $2 million especially if you put it in a mutual fund that has been performing for decades. But I say think Strong and I say go for the $75 per week until you can get to 80 and 90 and 100 and keep doubling down on the ways you make money so that you can inevitably put $200 per week away. That kind of savings will get you to a point of $5 million over the course of eight years.
8. Strategic Debt Management: Borrowing is an art. It’s about knowing when to leverage debt for growth and when to consolidate or pay it down to minimize interest expenses. A strategic approach to debt management will ensure your business remains financially healthy and poised for growth. The banking industry relies on doing business with credible individuals that’s been going on forever and it won’t stop. If you are going to get into this money game you must change your mindset to think bigger. I understand totally the conscious consumers mindset and being frugal and taking baby steps. But to use this example, if your credit score is north of 7:50 annual are not used that power to a mass millions of dollars in credit then my friend you are failure. Just being honest having access to capital and not using it wisely to get access to more capital is a smack in the face to all of those people these entrepreneurs with ideas and dreams who cannot get that capital and who do not qualify for that funding. So look at this capital as food you have a whole Buffay of food in front of you fruits and vegetables and meats and instead of sharing it with the people at the table you instead decide to throw it in the freezer or to throw it in the garbage and not make use of it. And what sorts of thoughts do you have about a person who does that? Be honest. As the last note I will say I understand if you don’t know how to create a strategy and to manage credit; I get that because we only know what we know. However if you are already a great steward to your credit and if you are looking to create increase in your life and if you’re looking to create legacy and wealth in your family then this is the way you need to think. Unless your grandparents trademarked the paper clip. And I know that’s highly unlikely. The only other alternative here is to manage your money correctly use it to build access to more money and wait your turn or learn what’s necessary or practice was necessary so that you master some thing that people want to buy into consistently. That could even be your voice as a coach or a mentor. That could even be a carpenter who just loves to make cabinets or a fashion designer who just loves to design clothes. ,But in this day and age of technology of artificial intelligence of all things Digital there’s no excuse for not knowing how to amass wealth there’s no excuse for not knowing how to create multiple streams of revenue and because you know me—and the information I share– there’s no excuse for you not to have access to hundreds of thousands of dollars to help your purpose your passion and your gifts.
9. Network and Collaborate: Expand your financial knowledge and opportunities by networking with other successful entrepreneurs. Learn from their experiences in leveraging credit for business expansion. That means you’re local Chamber of Commerce meetings that means you’re a local breakfast club for businesses meetings that means you donating to local charities whether it’s money or time you must be involved in your community because that’s where the money comes first. Money is distributed to these CDFIs, and those are the local banking institutions that distribute funding to small businesses nearby, especially if you are a small business minority on business a woman owned business.
10. Stay Informed and Adapt: The financial landscape is ever-changing. Stay informed about economic trends, interest rates, and new financial products. Being adaptable allows you to make the most of emerging opportunities. Hey Banks are now giving out zero interest business credit cards for the first year and who knows how long that will last. But basically they’re saying use our money for a year flip that money and come on back for more we will watch how you manage it we will watch how you make payments and we will determine based on your practices if you are credible for more money at the end of the yearLet’s Tie This Up:
Amassing $10 million in business credit is not a mere fantasy but a tangible goal with the right strategy, discipline, and financial acumen. It’s about understanding the flow of money, building relationships with financial institutions, wisely managing debt, and strategically reinvesting profits. In the grand chessboard of business, credit is your queen—versatile, powerful, and game-changing. Leverage it wisely, and the path to financial freedom and business success is yours for the taking.