According to the Federal Reserve, a little more than one third of small businesses used business credit cards in 1998, whereas that rate currently stands at about 64 percent, indicating that the use of business credit cards has significantly increased. Banks and issuers are aggressively marketing credit cards to small businesses, having mailed out 46 million professional credit card offers in the first quarter of the year.  This is a 256 percent increase from the 13.2 million offers mailed out during the first quarter of last year, according to Synovate. Meanwhile, total credit card mail solicitations increased only 29 percent. Obviously there is an emphasis on the business sector, and many small-business owners are questioning why their corporate credit cards don't get the same protections as consumer cards.

Business debt that appears on personal credit cards can negatively affect your credit score. An important factor in a FICO score is amount of debt you have as a percentage of your available credit -- ideally about 30 percent. If business debt is put on your personal card, it increases this debt-to-available-credit percentage, which usually lowers your credit score.

The terms and conditions of professional credit cards are a bruising step backward for consumers finally benefiting from almost all of the CARD Act protections. Signing up for a small-business card returns consumers to the less-protected loans with penalty rates and immediate interest rate increases.

The National Small Business Association has lobbied for legislation to include small-business cards in CARD Act protections, but for now small business are stuck. It may be tempting to use personal cards for business for CARD Act protections, but that may not be wise. Interest payments on a consumer credit card are not a business expense tax write-off. Separating business expenses from personal expenses can also create an accounting nightmare.

Rather than build up debt on personal credit cards which can negatively affect your credit score in business, why not use invoice factoring by leveraging your current clients.  Invoice factoring provides cash most of the time in less than 24 hours.

Today, U.S. Transportation Secretary Ray LaHood announced $11.6 million in grants to help disadvantaged business enterprises (DBEs) compete for federal highway contracts in 30 states and Puerto Rico. Providing federal aid to DBE firms to improve their ability to compete for and fulfill federal highway contracts, these grants are from the Federal Highway Administration's Disadvantaged Business Enterprise/Supportive Services (DBE/SS) program.

The Federal Highway Administration (FHWA) has been promoting the participation of DBEs in federal-aid highway contracts through state-managed programs since 1982. DBE/SS grants are part of an ongoing federal effort to help state departments of transportation train certified DBE firms on a wide range of business management practices, including procurement assistance and guidance on securing bonding. The goal of the program is to help DBEs successfully compete for federal highway projects.

Another business management practicebeing used has to do with invoice factoring. Many real estate developers and construction companies are also facing economic slumps thanks to the economy, and many are only barely getting by and are using construction factoring to survive from one job to the next.  Many  factoring companies are educating small businesses on how to use their services.

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Many business owners have turned to alternative funding methods such as factoring, otherwise known as accounts receivable factoring, because it offers clients a "use it as you need it" funding option. Therefore every invoice purchase is a separate transaction and does not form part of a portfolio lending approach. The transaction is modeled as a buy-sell transaction. 

A  factoring company undertakes a thorough due diligence program that usually takes about 24 to 48 hours. Once the due diligence is completed, the client is at liberty to offer invoices to IFG for purchase. After receipt of the invoices, the factor will check the credit of the debtor named on each invoice and make sure the sale represented by each invoice has been satisfactorily complete.

Once credit has been verified, each debtor is notified of the purchase by IFG and the client is paid for the invoices. At the end of the credit period the debtor will make payment directly to the factor.

Factoring is also known to be called debt factoring, and it basically involves selling your invoices to a third party, or a factoring company. In exchange,  they will process the invoices, alowing you to draw funds against the money owed to your business. Essentially, these companies provide a finance, debt collection and ledger management service.

Factoring iscommonly used by businesses to improve their cashflow but can also be used to reduce administration overheads. Businesses that supply this service are called factors or debt factoring companies.

Further, invoice discounting is an alternative way of drawing money against your invoices. However, your business retains control over the administration of your sales ledger. As well as providing finance, it offers valuable support services and credit insurance.

Factoring provides a fast prepayment against your sales ledger. It allows you, at a cost, to flexibly increase your working capital and improve cashflow.

Factoring is offered to businesses trading with other businesses on credit terms. It is not normally available to retailers or to cash traders.

Factoring companies can be subsidiaries of major banks and financial institutions, or independent businesses.  Regardless,  they will want to talk with you to learn more about your business, review your financial situation and study your business plan.  This is how they evaluate your suitability for a factoring facility. Credit limits might be required - if so, you must agree how they will operate.

After signing an agreement, the factoring company will typically agree to a percent of the approved invoices, and typically payment is usually made available within 24 to 48 hours.

Check the notice period to the end of the service because many factors require three months' notice, but some require longer. Negotiate if you are not agree with the notice period.

IFG was founded in 1972 to provide short-term working capital to help small to medium sized businesses grow. The IFG is organized and operates on a local level, providing clients with local knowledge, experience and business expertise in numerous diverse areas including accounting, finance, law, marketing and banking.

The company is headquartered at 7910 Woodmont Avenue, Suite 1430, Bethesda, MD  20814; Toll Free: USA – 877.210.9748; Canada – 877.340.6893; or visit: www.ifgnetwork.com.

Last Thursday President Obama made remarks in a press conference about the state of small business. Then it was followed more bad economic news as  jobless claims have risen again -- it is the fourth rise in jobless claims in the past five weeks and reaches the highest level since last November 2009.

Then the Federal Reserve in Philadelphia reported that manufacturing in the mid-Atlantic states has dropped, and this is just after they had also reported from a new survey that banks have eased their lending standards for small business  the first time in  four years. The survey was of bank lending practices, and the Fed found that the easing in loan standards was occurring primarily at the country's largest domestic banks, finding  that it's the first time it had found easier lending standards being imposed on small businesses since late 2006.

President Obama said that 60 percent of job losses are coming from small businesses, defined as those with less than $50 million in annual sales.For those small businesses that are  losing ground, but still in business factoring just might be the answer. Many businesses are experiencing unpredictable cash flow.  But it is tough to make incoming cash stretch to cover short-term obligations. One way to regain your financial balance is to work with a factoring company, which can provide you with working capital when conventional funding is not available.

Factoring is also known as debt factoring, and involves selling your invoices to a third party, then in return the factoring company such as IFG will process the invoices and allow you to draw funds against the money owed to your business. Factoring is basically a finance, ledger management and debt collection service industry. Commonly used by businesses to improve cash flow, factoring can also be used to reduce administration overheads. 

1. Make a budget and stick to it – For both your personal life and business, it is important to budget. Set spending and saving goals and stick to these goals.

2. Spend less money than you earn -- It does not matter how much or little you earn personally, or how much the business makes, simply spend less and earn more. Take a look at those areas where you can cut corners which will usually result in big savings.

3. Make a plan for saving -- Save first, because if you wait until you've met all your other financial obligations before seeing what's left over to save, chances are you'll never save. Put aside a minimum of five to ten percent of your income for savings each month before you pay bills or spend money.

4. Maximize any benefits -- 401(k) plans, medical and dental insurance, or even flexible spending accounts are worth a lot. Make sure you're maximizing these programs and take advantage of the ones that can save you money.

5. Think about accounts receivable factoring -- If your company's invoices are being paid 60 to 90 days out, and often times these are late, invoice factoring is an excellent solution to get paid right away.

Lately thanks to the economic circumstances globally, many businesses are experiencing unpredictable cash flow.  But it is tough to make incoming cash stretch to cover your short-term obligations. One way to regain your financial balance is to work with a factoring company, which can provide you with working capital when conventional funding is not available.

Once your are set up with a factor, you'll be advanced a large percentage of the face value of the invoice. Credit worthy accounts receivablea xan  be traded in or cashed in for immediate cash that is available to you in less than 24 to 48 hours with The Interface Financial Group (IFG)

If you are waiting for the invoice to be paid in the next 30-45 days, or longer, the cost of doing business with a factor is the discount fee. These fees from an invoice factoring company  range from one to ten percent, depending on volume, creditworthiness of the customer being invoiced and risk.

Today the Federal Reserve reported between April and July banks eased lending standards and terms to small businesses. This means the beginning signs of loosening up the tightening that occurred over the past few years.