Business Credit; Why You Need It and How to Get It

A nonprofit is a business. And a part of running an effective business is leveraging the resources out there to help you manage cashflow. Learn why your nonprofit needs business credit and how to get it.

Episode 146 | Business Credit; Why You Need It and How to Get It

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🔦 NONPROFIT SPOTLIGHT 🙌🏿

Inland Empire Black Worker Center Pt. 2

👉🏿https://www.iebwc.org

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🚀 RESOURCES TO HELP YOU RUN A SUCCESSFUL NONPROFIT 🚀

Approved Life Solutions

https://approvedlifesolutions.net

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Learn more about my success with helping nonprofits

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Got Questions? "Ask Amber" on any of my social media platforms or email me at [email protected]

Speaker 1 (00:00):

A nonprofit is a business and every business needs business credit. Yes, every business needs business credit. In this episode, we're going to talk to you about nonprofit business credit, why you need it, and how to get it.

Speaker 2 (00:14):

Welcome to On Air With Amber Wynn. We, nonprofit leaders learn to fuse passion and commitment with proven business strategies to create long-term funding, impact and sustainability. And now here's your host and resident, Philanthrepreneur Amber Wynn.

Speaker 1 (00:38):

I'm a nonprofit is a business, and in this current economy, it's important that you have all the resources that you can to get your nonprofit through these uncertain economic times. So today I'm going to talk to you about business credit. Business credit is exactly what it says. It's the opportunity to leverage credit, to fill in those gaps, to help you cover some of those unforeseen expenses. And in a normal business, you would get a line of credit, you would have a business credit card. As a nonprofit, you need those same, I call them security blankets. You need those same security blankets because even more so, a nonprofit is more at risk of things going awry. For example, as a nonprofit organization, when you start getting contracts that are reimbursable, then sometimes things happen. The funding agency may not pay you on time. You've already expended all of this money, and so you need to be able to fill those gaps because you have payroll, because you have unforeseen costs like salaries.

(01:54):

So it's important that you're able to shore up your organization with a business credit. When we come back from the break, we're going to talk about how to get it and what is that process when we come back. If your grants aren't getting funded, it could be because the funder can't see how your programs are making an impact in your community. Get the How to demonstrate Impact Workbook to quantify the work you're doing in your community in a way that a funder can see a potential return on your investment. Funders need proof that your organization will use their grant dollars to improve your community. That proof is called impact, and impact is quantified through measurable outcomes. Leverage my 30 years of program development experience to help increase your chance of securing funding. Order your copy today. Welcome back to On Air with Amber Wynn. It's your girl.

(02:45):

And today we are talking about business credit. I want to share with you my story. I know it's kind of embarrassing, but hey, that's what I'm here for, right? Been there, done that, and I got the T-shirt. So business credit is important for any business. As a nonprofit consultant, I was challenged with getting business credit because for those of you who don't know, it is attached to your personal credit. As a nonprofit leader, it's important that your organization has access to a line of credit, but guess what? It starts with your personal business credit. So as a consultant trying to get my business up and running, hiring vendors, paying for software, all of the things I needed business credit at the time, my FICO score was about 440. It was down in the gutter, and that's because I was a single mom and I had to do what I had to do.

(03:44):

So every month there was a certain bill that got paid. What does that translate into? My bills were not getting paid on time and it tanked my FICO score. Fast forward to 2019 and I'm like, you know what, Amber? You got to get your life girl. So one of my colleagues introduced me to this company called Approved Life Solutions, and their guaranteed was that in 90 days, that would increase your FICO score. And it wasn't the type where you made these payments, and it took six months, and I knew it was true because it had happened with my colleague. And I was like, boo, your FICO was trash. Why are you able to qualify for, oh, let me hook you up with April over here at Approved Life Solutions. So long story short, in January, I paid my fee and in 90 days my FICO score literally went from a 540 to a 700.

(04:45):

Now here's what I'll tell you. You have to do the work when she asked you for certain documentation, all of the things, but I'm Type A. So I did it literally in 90 days. My score went from a 540 to a 700. Then I was like, alright, I'm going to apply for this credit because it's connected to your personal credit. Bam. I applied for four credit cards all on the same day. They tell you don't space it out because when you do it altogether, it's like one hit. So I applied, but I did not check. I was so used to being rejected that I was afraid, right? So I waited for quite some time, literally three months, and on my birthday I opened up and it says, congratulations, you've been approved for $10,000. Congratulations. You've been approved for $20,000. Congratulations. So I had all of this credit.

(05:44):

I'm not going to lie to you. It was very shocking. But what it has allowed me to do is to be able to withstand the storms that happen as a business. Things happen. Contracts have been canceled because of these economic times that have allowed me to float my business. What does that mean? That means when I have to pay for these subscriptions, you've got Calendly and you've got Active Campaign, all of the things that keep your organization automated, I can put them on my credit card until I'm able to bring in revenue to pay off the credit card. Now, it is important that you stay on top of that. You can tank your credit again, but as a nonprofit, your organization is even more volatile. So the very first thing you want to do is to clean up your personal credit because it is attached.

(06:38):

You're like the guarantor, right? It is attached to your business. Once you clean up your credit, get it up to about 700, 720, then you can apply for business credit. Once you have your business credit, it is established on your business, EIN number, nonprofit leaders. I'm telling you, you need to do this because what's the first thing that you do is you tap into your own personal finances, and I want you to stop doing that. So I'm going to put in the link the information from a girl over at Approved Life Solutions so that you can take advantage of this amazing system that can help you get your personal credit improved so that you can apply for business credit. All right, so now we're going to take a break, but when we come back, ask Amber. It's the time of the episode where you get to ask me your most pressing questions when we return, not sure how to price your programs or how to cover salaries.

(07:45):

Are you scared to increase your program fees? If you're struggling to fully cover the cost of running your program, then you need how to price your programs for profit. This workbook provides step-by-step instructions for how to develop programs funders love to fund, determine the cost to charge for your programs, and present salary costs in a way that funders will approve. Learn the secret formula I use as an executive director for how to fully cover program costs. Order your copy today. Welcome back. You're on air with your girl, Amber Wynn. Today we're talking about nonprofits business Credit, why you need it, how to get it. But now it's time for you to ask me your most pressing questions. Today's question comes from Giovanni. Giovanni is in Torrance, and he has a question about the TSE program. Let's listen.

Speaker 3 (08:37):

Hi, Amber. This is Giovanni from Torrance, California. I recently received my 501(c)3 and was told that I should look into a TSE program offered by the Workforce Development Department to help staff my nonprofit since I don't have any revenue to hire employees. Do you know anything about the program? Would you recommend it for a startup nonprofit?

Speaker 1 (09:01):

So Giovanni, the TSE program is the Transitional subsidized employment program. So whoever told you about the program we're kind of like, okay, here's the challenge. Transitional subsidized program is a program that is funded by the Employment Development Department or the South Bay Workforce Board or the Department of Social Services. The purpose of the program is to get people who were on public assistance, either experience on the job training or if they were laid off and they're trying to transition into another type of position. This program has been established so that employers will be more inclined to take on the client. So before they would just say to different employers, Hey, we've got these people. Would you give them on the job training? The subsidy is what they use to incentivize companies to try out these individuals. So what happens is they'll subsidize the salaries, the workers' comp, and the taxes on the salaries for the first two months.

(10:21):

So that gives you the opportunity to do a test run to see if they work. After those two months, the next three months, you as the employer, are expected to take on the salaries, the workers' comp insurance, the taxes on the payroll, and they will give you $550 a month for month three to six, so that you are encouraged to keep this individual on. If you know that you want to hire somebody and you have money for it, I think it's a great opportunity because you're saving money, right? You actually get the interviews. They don't just send you anybody. You get to give them your job description and you get to interview them. So it's not like they just send you whatever you get to see if it's a good fit. But for you, Giovanni, since you're just starting, I'm going to say it probably isn't a good fit for you because if you're just starting, you're probably not in a financial situation where you can carry workers' comp, where you can carry someone's salary.

(11:22):

You're probably not even getting paid. So I would recommend that you wait until you're a little bit further along in your development and you have more consistent revenue. But for those of you out there listening, it may be a great opportunity for you. It's called the transitional Subsidy program. So check it out. Thank you Giovanni, for bringing that to our attention. Next up, we have my favorite part of the show. When I get to put a light on the nonprofits out there doing the work, we're on part two of our conversation with Dr. Thomas of the Inland Empire Black Workers Center out in the Inland Empire, and he's talking to us about the work that they're doing out in the community. So let's jump into part two with Dr. Thomas.

Speaker 4 (12:21):

Another issue was community street cred, right? Well, we first started, what are you? And as we were doing our early recruitment and outreach, we were sharing with them, okay, in this program we're going to pay for your books. We're going to pay for your materials. We're going to pay for your enrollments in San Bernardino Valley College. We're going to pay for your trade memberships. We're going to pay for your uniform childcare. We're going to give you IRS reimbursement for your mileage. They say, this is too good to be true,

Speaker 1 (12:57):

Right? I would think so too. Wow,

Speaker 4 (13:02):

These folks are after this scheming. This is

Speaker 1 (13:06):

Right. What's going on?

Speaker 4 (13:08):

So we had to work through that and build credibility and just keep going to the barbershops and keep going to the churches and keep making ourselves known so folks would know that we are here to stay.

Speaker 4 (13:22):

And then we had to sometimes drop organizational names and individual names to show how we are connected. And that was a challenge early on. But now folks know us. We are a known quantity. We've got a website, we've got social media presence, and folks can look us up routinely, and they can see now this track record over time, and they could see us at the Capitol. They could see us on the street involved in protests, marching. They could see us in the classroom. They can see our affiliation with the major philanthropic organizations, and they know that there's something to this organization. But it was a little rocky starting,

Speaker 1 (14:16):

And we're back. If you are interested in listening to the full episode, run on over to my YouTube channel. Otherwise, we've got two more episodes where I'm in conversation with Dr. Thomas. Today. We have been talking about business credit. As a nonprofit, it is one of the most important resources you can have as a nonprofit leader. Business Credit allows you to be able to weather the storms and to make sure that you can fill in those financial gaps and not dip into your personal finances. So I'm going to drop in the the information for Approved Life Services just because I've had the personal experience as I shared my embarrassing experience with my FICO. But hey, that's life, right? We all go through it. If you have enjoyed anything that you've heard today, be sure to share this episode with people in your network. Be sure to like and subscribe, but most importantly, be sure to take care of yourself like you take care of your community. We'll see you next week.