Marco Carbajo is a veteran of the business credit and funding industry, having blogged and advised clients on their credit for over 20 years. As founder of Business Credit Insiders Circle, he provides a proprietary step-by-step business credit building system and works to connect business owners with unsecured lines of credit, bank lines of credit, vendor lines of credit, and more.
A prolific writer, Marco is also acutely interested in sharing his expertise. He’s written about business credit for Dun and Bradstreet, SBA.gov, Business.com, About.com and AllBusiness.com, as well as his own highly-rated blog, BusinessCreditBlogger.com. We caught up with Marco recently to hear from him about his experience working with Fundbox, and what he loves most about helping small business owners get the credit they need to thrive.
Marco Carbajo of Business Credit Insiders Circle
Tell us a bit about yourself and your business.
Marco Carbajo: I’ve been in the business credit and funding industry for over 23 years and originally started as a credit consultant. When I started my own business, I was using my personal credit for everything: I used my personal credit for setting up company accounts, company credit cards, and the company vehicle.
I just knew there had to be a better way. I wondered, “Why is my personal credit being used for everything that relates to my business?”
That prompted me to do some research, and I realized that there’s this whole different aspect to credit for companies. That led me to this epiphany. If I didn’t know these things, having been a professional credit consultant, how many other business owners didn’t know this information?
That got me started working on my blog (businesscreditblogger.com). I’m passionate about educating entrepreneurs, small business owners and real estate investors about building business credit. Next, I started an online business credit building platform, an education-based system where people have access to all the research and credit sources that I’ve done and that we continue to do.
Since then, we’ve scaled the business and now we provide assistance with funding. We’re really excited about where technology is taking us with all the new alternative lenders. That just gives us all so much more opportunity.
Tell us more about your funding programs.
We’re a business credit and funding solutions company. What we’re most known for is our online business credit building system. It’s where start-ups, small business owners, and real estate investors can gain access to a responsive site that caters to the entire process of starting, establishing, and building business credit for their company.
Our system is comprehensive, with video, text tutorials, and access to credit sources so they can start creating valuable separation between their personal credit and business credit. At the same time, they can maximize their company’s funding ability.
When you work with your small business owner clients, how do you help them overcome their challenges?
It all starts with the consultation. We do a free consultation for them with no obligation. The biggest challenge facing every business owner that we come across is that, often, they don’t know where to go. They don’t know what is available to them or where they should start.
Whether they’re a startup or an existing small business, they may realize they haven’t built business credit. They’ve used their personal credit for everything. So, their first question is, “How do I get started with business credit?”
During the consultation, we do an analysis of their business. We ask several key questions: Is the business seeing strong revenues? What’s their personal credit look like? Have they established any credit for the business? The consultation allows us to gauge where they’re at in the entire process and what needs to be done to get them on track [for acquiring business credit].
The next step is understanding their needs. Do they need funding right now? Do they need access to capital for a specific project? At this stage, we conduct a pre-qualification review. They supply us a recent copy of their personal credit report. We don’t do a hard credit pull, so we save them from the hard inquiry for the review and we do a free funding analysis along with projections. Our underwriting team reviews their scores and report, so we’re able to show them what type of funding is likely available. In 24 to 48 hours, we present a funding projection.
This allows them to see what’s available to them before we start the funding process. This process alone saves them from getting a whole bunch of inquiries, and possibly getting declined.
What seems to be most important to your clients? Any trends you’re seeing?
The most important thing is speed. The new trend is time plus technology.
People don’t want to wait. They want their money now! Business owners want convenience. The timing of getting access to funding and the simplicity of it is important. They don’t want to go through a long, drawn-out process.
People want things to be as automated as possible. That’s where Fundbox really plays a nice role for businesses that come to us: Fundbox literally caters to that particular demand for speed.
There are many lenders who do a similar type of funding [as Fundbox] but they require you to submit six months bank statements and more. You have to go and print it out, fax it, et cetera. That’s one of the things that really attracted me to Fundbox: the fact that business data can be analyzed right there, online.
A lot of it is enabled by data, too. That’s where I think a lot of the traditional brick and mortar banks are missing out. Now, you have companies that are analyzing other data points besides just revenue and credit scores, such as your social profiles, Amazon or PayPal sales… [Some alternative lenders] are measuring all these other points of data that allows them to get a much broader and comprehensive look at the business.
You mentioned separating your business from your personal credit. Why is that so important for business owners?
If you’re running a company and everything’s tied to your personal credit, that has a big impact on your personal life. It can affect your ability to get a personal mortgage or get a personal credit card, or a student loan, or an automobile. The debt on your business could actually have an impact on your personal credit rating and credit utilization.
There should be that clear separation because when you incorporate your business and you have an employer identification number; your business is treated as a separate legal entity. The government looks at it as a separate legal entity, separate from you as an individual. So, that’s one reason why it’s equally important to also treat your credit file the same way as a business.
Also, the credit capacity that you can receive as a business is much greater than you can ever get as an individual. In fact, a business has 10 to 100 times greater credit capacity compared to an individual person.
Learn more about how (and why) to separate your business and personal credit.
Are there any other pieces of advice that you want to give to business owners?
Yes. The most important thing I encourage every business owner to do is to start digging your well before you get thirsty.
Business may be booming right now, the economy is great and maybe you really don’t need credit, you have money in the bank. That’s the best time for you to start setting up your credit sources. Start building your business credit now, because when things do get tight, that’s when banks or lenders constrict. It’s important for you to set up multiple credit lines your business can have access to. This includes suppliers, vendors, card issuers, banks, etc.
The other important thing is to diversify, don’t limit your access to capital to one bank. You may have a line of credit at your bank for the business, thinking I’m all set. But when we experience a huge recession [like in 2008], banks were closing credit lines for companies that they’ve had a relationship with for years. So, if you only have one credit line, imagine what would happen if your bank closes your line or reduces your credit limit. Businesses were forced to close because of that very reason [back in the last recession].
Another thing to know: when you’re seeking a funding company like ours when it comes to acquiring lines of credit or loans for the business, never pay upfront. You should pay for performance. But if someone wants you to pay them a large sum of money to get funding for you, run the other direction.
Finally, when it comes to dealing with business credit building companies, remember, it’s a process. Don’t expect to get large amounts of credit overnight, especially if you’re a startup. If you’re seeing unrealistic projections and numbers, then that’s something to be cautious about.
Great advice, Marco. How has it been to work with Fundbox as a partner?
My relationship with Fundbox has been absolutely fantastic. I’ve worked with Fundbox for a couple of years now, and every client I referred has just been elated with the results.
We’ve really helped all types of businesses from various industries that experienced a cash flow crunch and needed funding right away. One example that comes to mind is an electric company we worked with. They had a big project coming up and they didn’t want to wait. It was going to take them weeks to get funding from their bank so they called us.
Their demands were that they needed funds within a week, and they had good, solid revenues. We referred them to Fundbox. They got a $22,000 line of credit in less than a day. As a result, they got their money and were able to do that project. That’s a perfect example of someone who had a problem, we could provide the solution, and Fundbox was the answer. That’s just one of the many examples where we’re able to help companies that are strapped for cash and just need a line of credit as Fundbox provides.
We love to be part of success stories like that for your clients. To wrap up today, tell us, what do you like most about working with small businesses?
We are helping them build a creditworthy business and obtain the funding they need without having to put personal credit or personal assets at risk every time.
I love working with the entrepreneur and small business community, they are the lifeblood of the economy. It’s a blessing to be able to support them and provide the business credit and funding solutions they need.