Wells Fargo bank is up 25% today after a rocky few months of trading. I suppose this is largely do to the fact that their quarterly losses aren’t as bad as most analysts had predicted.

They lost $2.6 billion in Q4 and $11 billion overall in the period, largely due to the struggling Wachovia, which they purchased back in December.

They agreed in October to acquire Wachovia just days after federal regulators brokered a deal for the struggling bank to be acquired by Citigroup.

Wachovia has been weighed down by surging credit losses, which led them to deal with more “exotic-loans” in attempts to recoup some of these lossses. These exotic-loans have since been failing do to the housing market crisis and the overall turmoil of global economies.

Frequently banks make attempts to draw in new money by offering high yielding cd rates, however, WF’s rates have stayed relatively average.

It’s odd to see this bank’s shares surge on a day when so much negativity is surrounding the company, but some analysts were expecting a substantially larger Q4 loss than their $2.6 billion. However, WF raised almost $13 billion through a common-share offering to supplement their $25 billion in government funding that helped finalize its purchase of Wachovia.

Wells Fargo has also been able to stay afloat because of the risk management associated with their lending. Compared to other banks throughout the last few years Wells Fargo hasn’t underwritten nearly as many risky mortgages but has nevertheless succumbed slightly to California’s free falling housing market.

The bank posted a net loss of $2.55 billion, or 79 cents a share, compared with prior-year net income of $1.36 billion, or 41 cents a share. The latest results included $1.20 a share in charges related to credit reserve builds, a write-down on aged loans and merger costs.

Revenue decreased 3.8% to $9.82 billion.

Analysts surveyed by Thomson Reuters expected earnings of 33 cents on revenue of $11.65 billion.

Wachovia’s results were not included in Wells Fargo’s fourth-quarter results, since the deal closed at year’s end. But its $11 billion loss included $11.3 billion in tax-asset write-downs, credit-reserve builds and market disruption losses.

Asset quality again weakened during the quarter, with net charge-offs - loans banks think they won’t be able to collect - at Wells Fargo rising to 2.69% of average total assets from 1.28% a year earlier and 1.96% in the third quarter. Last year, the company made a policy change for only those loans in default for 180 days or more to be written off. Previously, those in default 120 days or more were.

Chief Credit Officer Mike Loughlin said declines in residential real estate values, higher unemployment rates and increased bankruptcies hurt the company’s credit performance.

Nonperforming assets - those near default - fell to 1.04% from 1.22% in the prior quarter.

Wells Fargo boosted its credit reserve by $5.6 billion during the quarter. Total loan-loss provisions were $21.7 billion for the combined company as of Dec. 31, up from $8 billion at Wells Fargo alone as of Sept. 30.

Loans delinquent 90 days or more as of Dec. 31 totaled $12.65 billion in the latest quarter for Wachovia and Wells Fargo combined, up from $6.39 billion for Wells Fargo alone a year earlier.

Average core deposits increased 10%, while loans rose 11%.

The company said it took $37.2 billion of credit write-downs Dec. 31 of high-risk loans in Wachovia’s loan portfolio in order to reduce the need for provisions in the future.

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The once almighty Morgan Stanley slid massively today by roughly 46%.  What makes this news even more substantial is that this comes on a day with remarkably positive trading (dow up 3.5%, Nasdaq up 4.5%)

Morgan Stanley’s History (as seen on website):

Since its founding in 1935, Morgan Stanley and its people have helped redefine the meaning of financial services. The firm has continually broken new ground in advising our clients on strategic transactions, in pioneering the global expansion of finance and capital markets, and in providing new opportunities for individual and institutional investors. Click below to see a timeline of Morgan Stanley’s growth, which parallels the history of modern finance.

This major dip in equity with Morgan Stanley has led some to believe they will raise CD rates in attempt to secure new capital.

In a nut shell… “Many small to medium sized businesses look to finance their working capital by debt or loan or overdraft from banks. Due to the deep rooted and vastly spread nature of sub-prime crisis, banks from all over the world facing an unprecedented situation of asset reduction and lack of liquidity. A lack of liquidity means banks are being more selective and cautious about lending money. Banks often see small businesses as more of a risk, and due to the current financial condition, the level of caution is increased rapidly, resulting into both increase in interest rate and a higher number of refusals. Due to this tightened lending standards for commercial and industrial loans to small firms the access to capital for SMEs is getting reduced significantly. Due to the same reason, option of financing through equity for SMEs are getting limited as private investors are also either affected by the financial crisis or taking precautionary conservative steps.” - IncSub.org

Discover Business Credit Card: 7.5/10

Perks for Small Business

• Free employee cards with customizable spending limits and monthly reports
• Categorized online quarterly and annual statements
• free travel benefits offered (depending on how much you spend)
• no-annual fee card

Conveniences:

• Live phone support within 60 seconds (they personally guarantee this) 
• Easy online account servicing (Quickbooks integration) — review charges, pay bills, redeem rewards, and download statements into QuickBooks®

Unique Feature to this Business Credit Card: PurchaseChecks

PurchaseChecks work just like your card. When you encounter a merchant that does not accept credit cards or the Discover Business Card you may write a check out to the merchant. Print the name of the merchant on the memo line of the check. The transaction will appear on your card statement with your other card and check purchases.

Note: This feature is unique, however, it was most likely created out of neccessity (due to large number of merchants not currently accepting this particular card)

Notables

Chase Business Credit Card: 5.5/10 (8/10 for construction industry)

Overview

The Chase Business Rebate Visa Card works best in hands of those who intend to pay the off the balance each month. After the expiration of the introductory rate, if you continue to carry a balance, you will have to pay higher rates of interest, which will most likely negate the best benefits offered through this business credit card.

There business credit card is ideal for anyone involved in a building/construction or handyman business (among other industries). With this card you can earn a three percent cash back rebate on qualifying purchases with participating home improvement businesses, hardware businesses, building supply businesses, gas stations, office supply centers, and restaurants. On top of this your are entitled to an additional 1% rebate on all other purchases.

Fee’s - some fee’s you will encounter with this card are out of the norm for most business credit cards (ie annual fees)

The Chase Business Rebate Visa Card allows business owners to take advantage of a low introductory APR during the first year on balance transfers and purchases made with their business credit card. However, when the introductory period is over, you will have an interest rate that is well above the average rate for business credit cards that apply to purchases and balance transfers made with the card.

Notables

• car insurance
• travel accident coverage
• 3% Cash Back for Purchases at Restaurants, Gas Stations, Office Supply Stores, Building Supply Stores, and Hardware and Home Improvement Stores
• 1% Cash Rebate on All Other Purchases
• 0% APR for Up To 12 Months on Purchases and Balance Transfers
• No Annual Fee
• Free Additional Cards for Your Employees
•  Free Quarterly Reports
• Online Account Management Tools to Help You Keep Track of Your Business Expenses

American Express’s Business Credit Card (SimplyCash): 7/10

Standard Benefits

 Earn 5% back on business necessities (ie gas, wireless services and office supplies) and benefit from 1% cash back on all other purchases made on your American Express SimplyCash Business Credit Card. These cash back rewards are applied to your monthly statement.  You may then carry the balance from month to month or you can pay your balance off in full each month with no annual fees.

Noteables

• Small business team Network from American Express which help link entrepreneurs with industry specific resources. (This is a unique feature with this business credit card but be sure to inquire about the types of resources they can connect you with)
• You can get as many additional cards to your account as necessary- and at no fee.
• Each of your employees may be entitled to an American Express SimplyCash Business Card to pay for qualified expenses with - you’ll earn cash back (1%) on each of those purchases, as well.
• Earn 5% cash back on office supplies and wireless services
• Earn 3% cash back on automobile gas purchases of up to $12,000 per year; 1% thereafter
• Earn 1% cash back on virtually all other purchases
• No limits to the cash back you can earn
• Automatic cash back every month

Advanta’s Platinum Business Credit Card Offer: 8/10

This business credit card is ideal for business owners that would prefer to consolidate their business expenses into a single credit card account while earning both rebates and rewards for their business related purchases (sort of a one size fits all business credit card). A 714 business credit score is recommended when applying for this card.

The rewards program offers a full 5% rebate on purchases including most necessary expenses such as gas, office supplies, online advertising and dining. Using this card online will net you a 1% rebate (not offered by most competitors). Plus, whenever your unpaid rewards reach $50 in a billing cycle, you’ll receive a $50 check.

This business credit card offers a point system reward program $1 spent = 1 point reward. The points are redeemable towards travel and pre-paid cards. The points you can earn are unlimited however, you must redeem them within 3 years or they become invalid.

Notables

• 0% APR for 15 Months on Balance Transfers, 7.99% APR Thereafter*
• 7.99% Variable APR (Based on Prime) on Purchases
• No Annual Fee and No Limit on the Points You Can Earn
• Get Employee Cards with No Fee and Set Monthly Spending Limits Per User
• $0 Fraud Liability
• Personalized Card — Your Company Name on the Top of The Card
• Recieve insurance when renting a car
• Itemized expense reports and online account access for monitoring your business expenses
• Extended warrenty options on certain purchases

Visa’s Business Credit Card Offer: 5/10

Overview: The Business Edition Visa Card offers a moderate interest rate and business perks for people with good to excellent credit scores (don’t bother with anything less than 750). 0% introductory rate and no annual fee. Higher than normal minimum finance charge and fees. Business expense management tools.

Notables

• 0% APR* on purchases for the first 12 billing cycles after account is opened
• No annual fee
• Separate business expenses for company travel, entertainment, supplies or other necessary purchases
• Online access to view transactions, pay your bill, view up to 7 years of prior statements for both individual cardholders and for companies with multiple cardholders

Rates and Terms

A business line of credit can be used to make cash available for the short term or for ongoing expenses. This business line of credit can be used to fund new business developments, to stimulate growth or to safeguard yourself from maxing out your company’s credit card(s). If you are using this line of credit to fund growth (ie. boost inventory, fund marketing campaigns or increase a sales force) it is essential that you establish goals and metrics to measure these goals. This ensures efficiency when spending your “borrowed money” and allows you to fully realize your ROI (return on invenstment). Also, keep in mind that there is a maximum to this funding and once you have reached this limit your access to funding ends. This option is better that simply putting expenses on your company’s credit card(s) because the interest rates you pay on your business line of credit is usually lower than that of a business credit card.

Is Collateral Needed to Obtain a Business Line of Credit?