Commercial Mortgage Broker Commission Split. There has to be a better way.

Let me paint you a picture of the perfect world. A world
in which you'd have all the clients you could ever want.
You'd be able to pick and choose the clients you'd work
with. You don't have to work on every loan deal that comes
along just to make a buck. In this world, every loan
closes, your client is happy, and you take home 100% of the
commission. Did I mention they give you a referral the
very next week! Don't we wish it worked this way?

In reality, you work hard for every loan deal, and they are
far from perfect. Then there's the issue of who gets paid
what out of your commission. Usually you lose money every
day because of commission split, so you must charge your
clients more to make up the difference. The higher fees
offset the experience and knowledge a broker brings to the
deal and that makes it less beneficial for a borrower to
use a broker.

While there is no true "industry standard" for how
commissions are split, what we know is that it is industry
standard to split commission. The split may be 25%, 30%,
50%, or more. Maybe it's a point here or a point there.
The split may be with the lender, a referral agent, a
brokerage house, or a number of others. When it comes
right down to it, the split costs you money and therefore
costs your client money. There must be a way to provide
the best service with the best loan product and charge the
client a reasonable fee.

What does it look like when someone takes a percentage of
your commission? Most brokers know it all too well, but
take a look at the table below for a look at the hard
dollars lost from a potential commission split. In this
example, the loan value is $1,000,000, the commission is
3%, and the split is 50%.

LOAN VALUE- $1,000,000.00

ORIGINATION POINTS (3%)-$30,000.00

SPLIT (50%)-$15,000.00

BROKER COMMISSION-$15,000.00

HARD DOLLARS LOST-$15,000.00

If you didn't have to split your commission you would have
the opportunity to charge a little less commission and
still make more money. That would result in a happy client
and happy clients give referrals and I don't have to tell
you that referrals mean more money. On top of that, if we
make it cost effective, that client may just come back to
you for the refinancing and for the loan on their next
property. Sounds like a win-win for everyone.

The question is why do we split commissions? You remember
the guy in high school who didn't participate in group
projects and still got the A? How did it make you feel for
someone to do none of the work and still get the credit?
Commission split is the same thing. Trust me the people
you are splitting commissions with make a lot more money
from other sources. Your commission may be your only
source of income. It's how you feed your family and put
gas in your car. If you do the work, you should get the
reward. I remember my years waiting tables and bartending.
I would split my tips with the bus boy, but at least he
cleaned the tables. What are you paying for when you split
commission: referrals, overhead expenses, marketing? I
don't know about you, but I already split my paycheck with
someone and they take a big enough piece of the pie. That
is good ole Uncle Sam. The difference is that he provides
a service called freedom and the American Way of Life.

Examine your business and determine how much of your
earnings you're sharing with others. What can you do this
year retain more of your commissions? If we can minimize or
eliminate the need to split commissions we can better serve
our clients without being forced to charge a high
commission. The next time you have to give away your hard
earned dollars to a commission split, ask yourself what you
are getting for the money and how much more you have to
charge your client just to make an honest dollar. Being a
broker is about serving clients and providing solutions for
fair compensation. Without them I would be back waiting
tables.

----------------------------------------------------
Contributed by: Patrick Bedall, Vice President, VEC
Financial Group
The VEC Financial Group (VEC) was created to solve the
problems facing mortgage brokers and to provide the tools,
support, and clients required to be successful. Together
with the Commercial Real Estate Investors Network (CREI) we
are changing the commercial finance industry.
VEC FINANCIAL: VISION-EXECUTION-COMMITMENT
http://www.vecfinancial.com

What's the difference between Anticipation and Prediction?

There are lots of signal services, newsletters, and trading
rooms offering predictions for the coming days, weeks and
months ahead on what the market is going to do. It's a very
tempting proposition to give subscribers a peace of mind on
what the market is about to happen. Some believe it is
possible to see what the market will do and subscribers do
follow these services. Unfortunately, predictions don't
exist even if these advisors are seers. No one can make the
correct predictions even 50% of the time consistently,
market is either goes up or goes down.

When traders anticipate what the market will do, is it the
same as prediction? Prediction is declaring something will
happen exactly in the future with only one outcome while
anticipation is to give thought in advance to all possible
outcomes. Anticipation requires dealing with problems
before they arrive; prediction is expecting something to
happen without dealing with. Prediction tends to take a
bias or position while anticipate requires careful thought
of what might happen: good or bad.

An example of the anticipation is when the trader is
watching the prices rising and approaching an old
resistance level. He anticipates that the prices may either
continue or reverse. He has to make preparations to deal
with both scenarios. One is to prepare for the breakout and
continue to the upside, he has to determine at which price
he will go long and where the stop loss will be place. If
the prices reverse, he has to determine where the short
entry will be as well as the stop loss. These scenarios
prepare him for the next price movements, anticipating what
other traders will do when the prices get to the resistance
level. If he predicts what prices will do, say, has been
going up and continue to go up. He has no plans for the
possible reversal. He is focused only on the uptrend move
and no on the possible reversal or the consolidation. These
scenarios must be constantly considered and planned as the
markets continually evolve. This mentality makes a
tremendous difference between a successful trader and a
losing trader.

Predicting is a loser's game, feeding the need to be right
instead of the need to make money. The ego many times is
the culprit to show off to other traders how good he is at
predicting the market direction. In trading, ego and
profitability cannot co-exist. If it's not ego, most
traders will look for one direction and then use evidence
to support that bias ignoring the evidence that may support
the opposite direction. This bias is predicting the future.
It tends to carry the mindset until after the trade is
made. It may be a profitable trade, but eventually the
trader is so convinced of this bias that when trade fails,
he'll have no alternative in preparing for the loss.

One of the desired traits of a successful trader is his
ability to prepare of all possible outcomes, imagining the
scenarios the market may do, up or down, before the trade
is made. He knows he cannot predict but he can calculate
the probabilities of the market going one way or another.
In anticipating the outcome, he has a plan for one outcome
or another. What happens if the market goes against his
position, where will he exit? What happens if the market
goes in favor of his position, where should he exit to take
profit?

Anticipating is preparation for both outcomes, good or bad.
Calculating how much to lose just as important as how much
to expect to win. This means the trader will identify in
the chart where he'll see the entry point and two exit
points (stop loss and profit target). By having this
method, he can identify his risk-to-reward ratio as well as
the probability of the success of the trade.

So how do we overcome this dilemma? Probabilities can be
made found through rigorous testing historical data based
on strategies that the trader plans to trade with them.
Finding statistics to back his notion that the strategy
works will give him confidence in approaching the market
and give the mindset to anticipate and not predict the
outcomes. One way is the see the market as it is showing
us either by the price action or by indicator.

Recognize that prices or indicator can change direction at
anytime. By using statistics to make an educated guess, the
trader can find which direction the market will likely go.
But probability cannot guarantee the desired outcome. This
means a backup plan must be in place, i.e. a stop loss, in
case that desired outcome doesn't happen. This is the
reason why successful traders have stop loss in place. A
stop loss is a deciding factor that determines if the
outcome has worked or not. The trader must accept that the
market will always be right and trying to be right will
prevent the trader from being one with the market and go
with the flow.

----------------------------------------------------
Larry Swing is the President of the popular day and swing
trading site http://www.mrswing.com/ a place where you can
find free daily articles and videos covering education,
market analysis and picks from Larry and other well known
traders in the industry.

Portfolio Turnover - The Hidden Cost of Active Management

The activities undertaken by an active fund manager
normally result in higher annual management charges. This
is what you would expect as they must carry out more
research and analysis than a passive "manager". However,
what few clients fail to appreciate is, the buying and
selling of shares within a fund also incurs costs and these
subsequently impact detrimentally on performance.

This is known as the "performance drag".

A Financial Services Authority (FSA) report* authored by
Kevin James undertook to quantify the costs of trading to
determine the performance drag. He concluded that the cost
of a "round trip" trade in the UK was 1.8%. A "round trip"
is the selling of one company's shares and replacing them
with another for the same value. For example selling
£10,000 worth of Barclays' shares and replacing them by
buying £10,000 worth of HSBC shares.

Let's look at a breakdown of the costs:

- Commission 0.3%

- Bid/Offer Spread 0.75%

- Price Impact 0.25%

- Stamp Duty 0.5%

Major studies elsewhere in the world have concluded similar
results**. The headline figures were lower but they did not
include Stamp Duty as Stamp Duty is only payable on UK
shares.

A Government commissioned report into retail investments by
Paul Myners estimates that portfolio turnover costs UK
investors £2.5 billion each year. The UK has only recently
fallen into step with the rest of the world in making it
compulsory for fund managers to disclose their portfolio
turnover. This revealed that many of the best selling UK
funds have portfolio turnover rates of between 100% and
200%.

If the portfolio turnover rate of a UK fund was 100% this
would "cost" the client 1.8% in Performance Drag.

The impact of charges has never been more important in
arranging an investment portfolio. If the explicit annual
fund management charges are 2% and the implicit costs of
portfolio turnover is a further 2% then this means 4% is
being wasted in charges. Charges of this level were masked
by the double digit returns of the eighties and nineties
but as the stockmarket returns to its long term average,
losing 4% per annum will have a significant impact on the
actual returns clients receive.

In addition, studies in the US*** concluded that the higher
charges associated with portfolio turnover were not
recovered by better performance.

*Financial Services Authority (FSA) Occasional Paper 6<br>
**Wilcox (1993) 1.2%, Carhart (1997) 0.95%, Orton (1999)
1%, James (2000) 1.3%<br> ***Performance of Mutual Funds, J
Chalmers, R Edelen & G Kadlec Nov 1999<br> <br> The
Financial Tips Bottom Line

As you are probably not aware what the turnover rate is on
your investment funds, the easy reaction could be to simply
ignore it.

The good news is that the information IS available, and you
can get hold of it by contacting your fund provider(s) and
asking them. The details are normally contained in their
fund prospectus.

You'll then be able to see the additional costs levied,
which will help you decide how to invest your money in the
future.

----------------------------------------------------
Ray Prince is an Independent Financial Planner with
Rutherford Wilkinson plc, and helps UK Resident Doctors and
Dentists get the best deals on mortgages, protection and
investments, as well as helping them achieve their
financial objectives. Just visit
http://www.medicaldentalfs.com to get your free retirement
planning guide. Rutherford Wilkinson plc is authorised and
regulated by the Financial Services Authority.

How To Stage A House For The Market

Faster Sale More Profit Stage It.

Staging is the process of getting a house ready to sell.

It is an important step; it is almost as important as
pricing. Many For Sale by Owners make a mistake; they just
put a sign in the yard and hope for a buyer. When you sell
by owner, it takes careful preparation and planning.
In this article I'll show you how to stage the house for
the market so you sell faster and make more money.

The overall condition and appearance of a house is
important in determining how fast it will sell and how much
the buyer will pay.

Curb appeal is make or break.

Many buyers won't view a house that doesn't have curb
appeal.
Others are unable to look beyond your belongings once
they're in the house.

Buyers start making buying decisions at the curb. If a
house doesn't have curb appeal, you've lost a buyer.

You Never Get A Second Chance To Make A First Impression.

Buyers have built in discount clocks that start ticking at
the curb.

They look for ways to reject your house and ways to
discount your price.
The buyer's discount clock is always ticking.

Tic, Tic, Tic . . .

• Is the driveway clear and clean?

• Is the side walk free from clutter?

• Is the lawn mowed and edged?

• Is the house inviting?

• Is the sidewalk clean and clear?

Tic, Tic, Tic . . .

• Is the mailbox painted?

• Are box numbers easy to read?

• Are house numbers easy to read?

• Would colorful floors at the front door add appeal?

• Is the front door clean, new or newly painted?

• Is the entry porch clean and clear of stuff?

Does it sound like a pain, tending to all the details?

You do want top dollar don't you?

Once inside the house ask yourself:

• Is the entry inviting?

• Is it well lit? Consider using full spectrum lighting.

• Is it clean and free of clutter?

• Would mirrors make the space seem larger?

You have to detach from the house.

The house is a property, not your "home." Refer to it as a
house, not your home. You are preparing the house, not your
home, for the market. Make the distinction, it will help
you stage the house.
Is the buyer mentally moving in?

It's imperative that a buyer sees himself/herself as living
in the house. If they like the house, they'll mentally move
in.

You want the buyer to start thinking of it as their home.

You have to get rid of family portraits that line the
stairs and halls.
Too many personal memories can actually make the buyer feel
guilty about taking you away from your home.
Memory lanes are psychological turn offs for the buyer. You
don't want distractions.

You plan to move after you sell right?

• Start packing before you put the house on the market.

• Box up nicknacks, photos and stuff.

• Thin out.

• Box it.

• Store it.

• Have a garage sale.

• Streamline.

• Less clutter creates a sense of space.

• Less stuff makes a house inviting.

Come on, you can do it.

Consider storing or selling some of your furniture. Create
wide walking spaces. Recliners and sofas, are great for
living, but terrible for showing. Clear walking areas. Make
the rooms appear larger.

Visit model homes. Notice how sparsely they're furnished.
This creates a sense of spaciousness. Go home and start
weeding out your excess furniture and clutter.

Lots of lights.

Be sure there are working bulbs in all light fixtures.
Consider full spectrum lighting as it gives a nice natural
light without starkness. Turn on lights for showings.

Clear counters:

Goodbye toasters and kitchen appliances. Make the kitchen
sparkle. Clean stove, broiler and oven. Clean the back
splash. Buyers notice.

Bathrooms must sparkle:

• No wet towels.

• No toilet articles left out.

• Clean mirrors and shower doors.

Bedrooms:

• Beds made.

• Neat closets.

• Pick up clothes.

• Pack most of your clothes.

• Remove excess furniture.

• Create a sense of roominess.

If buyers are thinking move in, help them.

Open blinds and drapes and put a bouquet of cheery flowers
on the table.

The garage counts too:

Clean the garage floor. Grease spots are a turn off.
Get rid of tools. Pack, hang or store them.

Would you buy this house? in its present condition, for
the price you're asking?

If your answer is not a resounding YES; then reconsider
your price or improve conditions.

Consider hiring a professional decorator.

The Final List

• All Guns and jewelry put in a safe deposit box.

• Put away dog and children's toys.

• Professionally clean all windows.

• Fresh paint pays for itself.

• Heat cinnamon in the oven - not necessary but nice.

• Dresser drawers orderly.

• Music - I vote no, buyers may hate your selection.

In summary you'll want to:

• Create Openness try to make the house bright and cheery.

• Create spacious walking areas. Make everything shine.

• Approximate the look of a model home.

• Make a guest book.

• Make a flyer.

Good Luck Selling Your House.

----------------------------------------------------
Wee Dilts created the original for sale by owner flat fee
MLS program, authored the best selling "How to Sell Real
Estate by Owner" book, and has assisted FSBOS since 1983.
Colorado For Sale by Owners can register for MLS, purchase
her book, or download Free FSBO tips at
http://www.fsbofriend.com
Have a FSBO questions? Send it to fsbofriend@msn.com

Your Credit Score: FICO Plans to Eliminate Authorized Credit Card User Accounts - Part 3

Do you realize that in our country you are penalized for
practicing good money management habits? Think about it.

If you paid for your own college education and refused to
fall into the credit card trap that uses lenders to
purposely suck the financial life out of naïve students,
you might graduate debt free and have no credit history.

When you want to buy a vehicle on credit or a home with a
mortgage, you could not get a loan without a credit
repayment history and a decent FICO credit score.

For years young adults with no credit history, limited
credit history or blemished credit history have worked
around the problem by having someone with good
credit-usually a parent, spouse or good friend-added as an
authorized user to their credit card.

Once the authorized user is added, his or her credit card
payment history is added to the account, giving the
original card holder a higher credit score and access to
loans and better loan terms.

All of this is about to end as Fair Isaac (the developer of
the FICO credit score) will create a new scoring formula to
eliminate the authorized user tactic. Learn what you can do
to protect yourself.

Fair Isaac is taking the action because it estimates that
30% of the 165 million consumers with credit cards have
authorized users on their accounts.

Once the new system is implemented in mid-2008, millions of
authorized users will see their credit scores decline or go
into free fall. Authorized users with no credit history of
their own will see their credit scores disappear. Those
hurt the most may be young adults and married women.

Here are some tactics these two population groups can use
to fight back:

1) If married and listed on your spouse's account apply for
a credit card in your own name.

2) Apply for a revolving credit card from a department
store or other retailer as they are easier to get because
they generally have lower credit limits and higher interest
rates.

3) Apply for a secured credit card because you put money
into an account in advance to cover your card transactions.
If you default on your payment, the lender debits your
account to cover the payment.

Sometimes secured credit cards become unsecured credit
cards when you pay timely over a period of time. In some
cases, you may even get back the initial deposit in the
secured account plus interest.

4) Try to keep your balance below 30% of your available
credit as this credit utilization will improve your credit
score.

You can research fees and other features of credit cards at

http://www.bankrate.com

(Note: This is the last of a 3-Part Series.)

----------------------------------------------------
Ed Bagley's Blog Publishes Original Articles on Current and
Past Events with Analysis and Commentary on Movie Reviews,
Sports, Lessons in Life, News and Comment, Jobs and Careers
and Internet Marketing intended to Delight, Inform, Educate
and Motivate You the Reader. Find Ed's Blog at:
http://www.edbagleyblog.com
http://www.edbagleyblog.com/MovieReviewArticles.html
http://www.edbagleyblog.com/LessonsinLifeArticles.html

Montenegro property a home for all

International real estate buyers considering buying
property abroad need to consider Montenegro. This Adriatic
State has witnessed a flurry of activity from those keen to
get a foothold on a relatively new market. Investors
looking for a quick Buck and those who like renovation
projects are now being replaced by buyers who want a home
of their own in the region. Resale property market is as
yet untested brand new off plan properties are a great way
to enter this soon to explode property hotspot

Montenegro it is one of the most southern European states
and faces the south part of the Adriatic Sea. About 500km
from Rome, 1.500 km from Paris, and Berlin, and about
2.000km west from Moscow, Montenegro lies on the Balkan
Peninsula in the very heart of Europe.

So what is the attraction of owning a property in
Montenegro? The regions natural unspoilt beauty that
includes beaches, mountains, and fjords makes this place a
visitor's paradise.

History has seen that where tourism thrives so does the
overseas property market. It makes sense that those who
fall in love with a place whilst on holiday will want to
have a more permanent place their. Potential buyers will
also see that other tourist love the region and this fact
may mean that a property bought in Montenegro could provide
an income. The World Travel and Tourism Council reports
that Montenegro visitor numbers are anticipated to rise on
average 9.9 per cent each year until 2015

My top tips when buying a property in Montenegro all
revolve around using a truly independent and reputable law
firm to conduct the buying process. Title can be an issue
and the last thing you want is someone claiming it's their
land after you have paid your money. Your lawyer will
examine the title deeds this is hugely important with land
being taken from its owners in communist times and split up
into parcels of land for the poor. The original owners may
want to stake a claim to what was threes.

Overseas buyers should familiarise themselves with popular
regions including one of Montenegro property hot spots in
Kotor Bay and the town of Kotor.

The relatively new market is proving to be a great place
for all types of international buyers and all indications
point to the continuing success in the region. A word of
warning is that this region is attracting the wealthy and
in a few years time property may only be the t is easy to
see why.

----------------------------------------------------
Nicholas Marr is CEO of Marr International Ltd a UK based
property marketing company who are responsible for the
overseas property website at http://www.homesgofast.com

Tips to keep in mind while investing in Costa Del Sol property

Costa Del Sol is an ideal place for property investment
because of the scenic beauty, excellent transportation and
good resale value for the properties. Although land prices
are high here, one can obtain low priced homes and plots
before construction work begins. Things to look out for
while buying property in Costa Del Sol

The prospect of a Costa Del Sol property is enticing to
many visitors and they may get quickly enamored by the vast
choices and lucrative options available.

However, there are certain things one needs to keep in mind
while investing in the place:

Various taxes to be paid – Before you purchase any Costa
Del Sol property, you need to understand what are the
various taxes to be paid.

VAT and Stamp duty: These need to be paid if you are
purchasing a new house or property from a developer. The
VAT usually ranges between 7 to 16 percent, while stamp
duty is around 1 percent of the property value. If you make
an initial deposit before the purchase, then also VAT and
stamp duty will apply to this deposit.

Transfer tax: This needs to be paid if you are purchasing a
property or a home from an individual owner who is
reselling the home or plot. This tax ranges from 6 to 7
percent, is inclusive of stamp tax and if you are making an
initial deposit this deposit won't be subject to transfer
tax.

Income tax: This will be applicable if you are purchasing
from a non Spanish person, residing in Spain. Then you will
need to keep aside 5% of the value of the property or home,
to pay to Income Tax department.

Property evaluation – It is strongly recommended that you
get the Costa Del Sol property evaluated from a recognized
property inspector. This helps to ascertain the true value
of the property and prevents any kind of loss from the
buyer's perspective. This also is a prerequisite to qualify
for a mortgage loan.

Mortgage loans – You need to apply for a mortgage loan to
meet the expenses of the Costa Del Sol property. To do
this, you will firstly need to qualify for the loan and
also meet associated costs once the loan gets funded. There
may be a deposit of 10 to 15 percent depending on the
mortgage lender and the type of property.

Ownership costs – If you are planning to buy a property or
a house in Costa Del Sol, there will be many associated
costs such as property ownership tax, annual wealth tax and
personal income tax.

Seek legal assistance – This is essential if you are
planning to purchase any Costa Del Sol property. The reason
being hiring a lawyer can help you save a lot of the
hassles in reviewing contracts, performing all due
diligence checks etc. A lawyer will also assist you in
negotiating the terms of the contract between you and the
seller. The fees charged by a lawyer will differ based on
the services you require and the reputation of the lawyer
as well.

----------------------------------------------------
Steve Magill is the author of numerous articles on the
topic of Spanish real estate. He is a partner in
http://www.buyspain.co.uk and a Fellow in the British
Association of Entrepreneurs (FBAE). He is also an
internationally renowned Spanish property expert.

Stock Research – Another Hedge Fund Warns- Basis Capital – This is just the Beginning!!!!

Wow, it's just starting and it's not going to stop. Basis
Capital is an Australian hedge fund. They run about a
billion dollars under management. What you have to keep in
mind however is that hedge funds use LEVERAGE, big
leverage. The average hedge fund manager in the United
States is using 6 times the capital base of the money he is
managing, as leverage. In the race for performance or the
elusive alpha, some hedge fund managers are pushing the
envelope and using as much as 10 times leverage. This can
cause serious problems because when leverage goes against
you, it's DEADLY.

An example is now the latest announcements coming out of
Basis Capital. Apparently this hedge fund was invested in
the US home loans to investors are less than creditworthy.
The hedge fund claims that the collateral in their
portfolio is sound, but sound is a matter of judgment.
Unfortunately for Basis Capital, the prime broker clearing
for the hedge fund doesn't agree with them. The prime
broker has re-priced this so-called sound collateral.

What does it mean?

The hedge fund now has to go into a crisis mode to survive.
Immediately many investors will ask for their money back.
This is the step that kills off the hedge fund. In order to
prevent a run on the bank, as they like to say, the hedge
fund has announced that they may restrict redemptions,
which is the right of the investor to withdraw their money
at, will. If investors are allowed to withdraw their funds,
the collateral securing the underlying investments usually
collapses because other smart money knows that that
collateral has to be sold in order to fund the redemptions.

Prior to originating a hedge fund, most hedge funds will
install restrictive covenants in their investor agreement
that build in what are called gates. These gates limit by
quarter what can be withdrawn from the fund. It's about
self-preservation. In this case Basis Capital and its two
hedge funds require 90 days notice before capital can be
withdrawn. Once again this policy attempts to prevent a
forced liquidation of the underlying collateral securing
the hedge funds' investments.

Basis Capital has warned that the true extent of their
problems might not become evident until September. What
does that mean? These people mark to market every day.
They have the finest computer pricing systems in the world.
PhD's in mathematical modeling are a dime a dozen in the
hedge fund industry, and yet this hedge fund doesn't know
where it stands financially. This is a breakdown in the
system, and it has great meaning to the rest of the hedge
fund industry.

What happened to Basis Capital is very simple. In the range
of assumptions they used to make their bets they determined
normal risk parameters. They did not give any consideration
to the possibility that the investments they were making
might, just might move outside their normal variability
ranges. In other words they excluded worst-case
possibilities from their consideration. The melt down of
the sub prime lending market is such a possibility and it
has HAPPENED. For an elaboration of this article, please
see our website.

----------------------------------------------------
Richard Stoyeck's background includes being a limited
partner at Bear Stearns, Senior VP at Lehman Brothers, Kuhn
Loeb, Arthur Andersen, and KPMG. Educated at NYU, and
Harvard University, today he runs Rockefeller Capital
Partners and StocksAtBottom.com
http://www.stocksatbottom.com/
For an elaboration of this article, please see our website

Should You Consider a Secured Business Credit Card?

If you've recently started your own business, you may want
to consider a secured business credit card. Most businesses
nowadays can't operate without credit and mixing your
personal credit with your business credit can be a big
mistake. Unfortunately, most new businesses don't qualify
for unsecured business credit cards, especially if the
business owner has had credit problems in the past. That's
when a secured business credit card can come to the rescue.

What's a Secured Business Credit Card?

Unlike traditional, unsecured business credit cards,
secured business credit cards are guaranteed with a
security deposit. When you open up your secured business
credit card account, you place a specific dollar amount
into a savings account and that savings account is held by
the credit card issuer. The card issuer then sends you your
secured business credit card.

The amount of your credit line depends on how much money
you deposit into the savings account. If you deposit $300,
your secured business credit card will have a credit limit
of $300. If, for some reason, you don't pay your credit
card statement and default on your account, the bank takes
your security deposit to satisfy your debt.

What To Look For In a Secured Business Credit Card

If your business doesn't qualify for an unsecured credit
card, a secured business credit card is the perfect way to
establish credit. However, not all business credit cards
are created equal.

When looking for a secured business credit card, make sure
you apply for one that has reasonable annual fees ($59 or
less) and a reasonable interest rate (less than 12
percent). Because you are securing your line of credit with
a deposit, the bank is assuming minimal risk and that
should be reflected in a lower interest rate.

It is also important that you earn interest on the security
deposit that serves as collateral for the card. Someone is
going to be earning money from the interest your deposit
earns. It should be you rather than the bank issuing your
secured business credit card.

Building Your Credit

When you begin using your secured business credit card,
make sure you make your payments on time, every time.
Because you are just now establishing your business's
credit history, every payment counts and being late even
once can do harm to your company's credit rating.

By using your secured business credit card and managing it
wisely you'll be well on your way to creating a solid
credit history for your company and putting your business
on the right financial path.

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For more tips on business credit cards, saving money and
avoiding getting taken, check out CreditCardTipsEtc.com, a
website that specializes in providing credit card tips,
advice and resources.
http://www.creditcardtipsetc.com/business_credit_cards