On this page are things you should know

They are very important to your success

They are even more critical to your clients

Separating personal credit from business credit is not what you have been "SOLD"

Your white label business success software system helps you provide

Are you aware that banks, credit unions, large cash fintech lenders, the SBA and cash type credit cards such as Visa, Mastercard, American Express and Discover do not use business credit alone to make approvals, correct? Keep reading ...

You were told that cash lenders use D&B Paydex, they do not (at least not directly)

Cash lenders such as the SBA, banks and credit unions do not use or in most cases even check a businesses Dun & Bradstreet Paydex business credit score at all. Business to business Net 30 credit lines want to see a Paycex of 80+ but those are not cash. Cash lenders don't use it.

You probably weren't even told about FICO FBSS

You were told an "80" score was everything, it is not. Cash type business lenders mostly use the FICO SBSS (Small Business Scoring System) which is 0 to 300 with 155 being the floor. But. even they do not approve on it alone. Instead they use it to decline or determine the amount, rate and term of the approval along with many other factors.

Completely separate your personal credit from your business credit? Not since 2015!

In 2012 that was true, since 2015 not the case. A large percentage of a business’s FICO SBSS is based upon the personal credit score of any owner having a 20% share or more of the business, making that "separation" you have been told about very difficult for any business below $5 million in annual revenue.

Consider FICO Dominance

You are aware of how FICO now dominates the credit scoring system for personal credit, correct? FICO was first invented in 1958 and wasn’t really used until starting in1989 with its market dominance beginning in the early 2000s. FICO SBSS was first introduced in 1993 but did not begin to gain wide underwriting use until 2015. Now, just like FICO dominates personal credit underwriting, FICO SBSS has become dominant in business cash lending underwriting. Your clients must have at least a 155 FICO SBSS or they will be declined. As much as 30% of FICO SBSS are the business owners personal credit scores.

Without A Personal Guarantee?

“Get thousands of dollars in business credit without a personal guarantee.” You have seen that all over, right? Well that might have been true in 2012 but not in 2024. If your client’s business has less than 3 years in business and less than one million in gross annual revenue, then in 2024 for almost all cash funding programs a personal guarantee will be required and all will check the owner’s personal credit. That is not yet the case for store credit cards or business to business Net 30 credit lines, but those are not cash. As FICO SBSS dominates more and more of the business lending underwriting market, the owner's personal credit will be a factor for store business cards as well.

CITI, Commenity, Synchrony, WEX and Elan are Consolidating The Market

These five major underwriters of store, gas, fleet along with smaller banks and credit unions are now doing almost all underwriting. What that means is your Home Depot, Best Buy, Staples, Walmart, Fleet, Gas and hundreds of other store business credit cards are now being underwritten and approved by one of these five major underwriters. These underwriters are moving all these credit card approvals to FICO SBSS which means very soon a “no personal guarantee” and not based on personal credit business store cards will be a thing of the past.

Low 5 Bank Rating

Your clients average daily bank balance for the prior 90 days in their general ledger bank account can now make up as much as 30% of their FICO SBSS. Factored in will also be any NSFs. If their bank rating is below a Low Five, which is maintaining at least a $10,000 average daily bank balance every day for the past 90 days, then they will have a difficult time reaching that 155 to 160 minimum FICO SBSS score needed to obtain bankable business financing.

Whoops, Your Client Just Committed Multiple Felonies!

You may have already done this. You sent your client out for credit card stacking. The service you used had them sign a power of attorney. First, to enhance your client’s credit reports the service added fraudulent tradelines to their personal credit reports to raise their scores by reporting loans they never had and never made a single payment on. Then that service impersonated your client which a power of attorney does not give them the right or power to do. That service then lied about your clients amount of income on credit applications to obtain credit cards from Federally Insured banks or credit unions. Then the service helped your client liquidate those credit cards for cash by paying invoices with those cards for products or services they never received and instead got the cash.

Felony #1 - Knowingly adding fraudulent tradelines to personal or business credit reports

Using a tradeline you've purchased to manipulate your personal or business credit history and then knowingly submitting that false information to federally insured banks or credit cards lenders when applying for credit is federal felony bank fraud punishable by up to 30 years in prison. Many of these services add fraudulent (aka completely fake) tradelines to personal and business credit reports. Your clients are now criminals.

Felony #2 - Impersonating a client under the false use of a power of attorney

Creating a fake profile, chatting on social media, over the phone or via email as someone else is a felony punishable by up to 10 years in prison and a penalty of $10,000 for each occurance. A power of attorney grants the ability to "represent" someone, but never to impersonate anyone.

Felony #3 - Lying on any federally insured institution loan application

According to 18 U.S.C. §1014, it is a crime for any person to knowingly make a false or misleading statement on any federally backed or provided loan program. Any person who violates this statute is guilty of a felony and can be sentenced to as many as 30 years in prison and be ordered to pay up to $1,000,000 in fines. These services submit applications "on behalf of" where they have openly lied about your clients' amount of income.

Felony #4 - Money Laundering & Interstate Wire Fraud

The act of using fake invoices to be paid with credit cards for products or services that are never received but for the sole purpose of liquidating credit card limits into cash is money laundering. These fraudulent invoices are sent by out-of-state vendors via the internet or email which is Interstate Wire Fraud a federal felony punishable by up to 20 years in prison. Fake vendors for phony products or services where you get the cash instead, does that sound legal?

And if you're the one that assisted, referred and got paid a commission for your clients committing four felonies. What does that make you?

Does Business Credit Matter?

Well sure it does. First, there are tens of thousands of business to business Net 30 credit lines out there which are using Dun & Bradstreet Paydex scores or Experian Inteliscores to approve, but those are not cash credit lines. They can however be a very effective offset for your working capital and be very valuable to your business operations. Also the Dun & Bradstreet, Experian and Equifax business credit scores each make up a small percentage of your client’s FICO SBSS where obtaining at least a 155 for the SBA and a minimum 160 for most banks is now critical to almost all cash lending programs.

Is There Money Available To Non-Bankable Businesses?

Yes! Billions of dollars are loaned to non-bankable businesses each year. The problem with non bankable business finance programs is that they are expensive, most often 25% interest and higher. They are short term, usually 24 for months repayment periods or less with the average being 12 months. And they are smaller amounts, with it being very difficult to string together more that $250,000, with most receiving less than $100,000. On the other hand when your clients become bankable, which takes 4 to 6 months to complete, the business cash loans are much lower interest rates, such as 9% to 12%. Much longer terms, out to 15 or 20 years and much larger amounts, up to five million dollars.

How Does A Business Become Bankable?

The process is fairly easy with most of it being simply knowing what is on the test. It is much easier to pass a test if you know what’s on it, right? Becoming bankable is just a matter of checking all the right boxes. It is completing all items of Lender Compliance, maintaining a low five bank rating, having no NSFs, paying the taxes, keeping a clean UCC file, establishing 12 to 15 business credit tradelines that are always paid early, having the business and owner’s financial statements in order, do not be in a restricted industry and establishing a valued relationship with a regional bank that is not a Wells Fargo or BofA or Chase where your client will just be a number.

What Happens When A Business Becomes Bankable?

First, less than 1% of the small businesses in the United States are bankable. This is businesses with less than one million in gross revenue and typically with 19 or less employees. Now, what happens to your personal mailbox when all the personal credit providers out there know that you earn more than $150,000 a year and that you have personal FICO scores of 760 or above? Mailbox gets flooded with credit offers, right? So what do you think happens when your business clients join the less than 1% of businesses that are bankable and they are known to have FICO SBSS of 160 or above? Right … They need a bigger mailbox!

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