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Survival of the Fittest: The Essential Guide to Establish Business Credit in a Recession

It may seem that trying to establish business credit in a recession is too little too late. It is definitely better to have strong business credit before a recession hits.  However, if you are in the middle of hard economic times and trying to figure out how to survive and even thrive, all is not necessarily lost.  

Also, business credit is a huge part of fundability.  Strong fundability will benefit your business not only now, but long after the recession is over.  

Establish Business Credit in a Recession: Survival Skills and Tips to Ensure You are Make it Off of Recession Island Alive

Becoming a business owner during a recession can feel much like being dropped into an episode of a survival reality show.  Add in the COVID-19 pandemic and the illusion becomes even closer to reality. Everyone is struggling to hang on. The competition is fierce.  You can only hope you will not be voted off. If you do not already have strong business credit in place, you may think the situation is hopeless.  Yet, it is possible to establish business credit in a recession. It just may take a little more patience and creativity. Truly, nothing breeds creativity like hard times.

Whether you need it immediately or not, it is vitally important to have separate credit for your business.  This is regardless of your current situation. The need is even more pressing during a recession. 

The first step to establishing business credit in a recession is to set up your business as a separate entity from yourself.  Even if you have stellar personal credit, you do not want it tied up with your business. The reverse is true as well. 

If your personal credit goes south due to recession issues, you do not want your business to suffer.  On the flip side, if your business struggles, you want your personal credit protected as much as possible.  

Hit the jackpot and weather any recession with our best webinar and its trustworthy list of seven vendors who can help you build business credit.

Why Establish Business Credit in a Recession?

If you have found yourself on recession island without business credit, you may wonder how it could possibly help to establish it now.  Here’s the thing. No business credit is the same as bad business credit. There is no time like the present. If you do it right, establishing and building business credit during a recession can only help you.  

Business credit can help you access funding to get you through the hard times.  If you need to cover a cash gap brought on by slow-paying customers, business credit can open up options for that.  If you want to purchase inventory in bulk to take advantage of special pricing, business credit can help with that as well.  

These are just two examples of how having strong business credit during a recession can help your business survive.  It’s best to have a strong credit score in place before a recession hits. However, if you do not, you can establish business credit in a recession with these tips.

Separate from the Pack: Get Incorporated

While alliances are often formed on survival reality shows, the truth remains that you cannot trust anyone but yourself.  This is especially true in the beginning. Your business needs to stand on its own. 

The first step to separating your business from yourself and your personal credit is to incorporate.   While easiest done on the front end when you first start your business, it is never too late.

 You have a few options.

  • C Corp– This is the most definitive separation, but it is also the most complicated and expensive.  Before choosing this option, be certain there are reasons other than establishing business credit that it needs to be done.  If it isn’t necessary for some other reason, there are other, less complicated, and less costly options. 
  • S Corp– This option basically offers the same separation as the C Corp, but taxes are paid at the personal level, rather than requiring the business to be taxed as well, resulting in double taxation.  It is also cheaper than incorporating as a C Corp. If you aren’t required to file as a C corp, this is a good alternative. 
  • LLC– forming a Limited Liability Corporation results in less liability, thus the name, and offers enough separation to serve the purpose of establishing business credit.  If you are not required to be a C Corp or S Corp, this is the easiest and most cost-effective way to create the separation of business and personal credit needed. 

Throw off Your Old Self: Get Rid of the SSN

Apply for an EIN and stop using your Social Security Number as the identifying number for your business.  Your SSN is tied to you, personally. It is virtually guaranteed that anything connected to it credit-wise will end up on your personal credit reports.  

In fact, if you follow the other steps for establishing business credit and skip this one, it could end up on both reports.  You don’t want that. 

The process for applying for an EIN is easy.  The IRS has an online form. As soon as all the information is verified you receive your number.  Typically, this happens almost immediately. 

Separate but Equal: Do Not Mingle Personal and Business Finances

Do not buy into the falsehood that you can run your business expenses through the same bank account as your personal expenses.  When you want to establish business credit in a recession or at any other time, your business needs its own account. Separate finances are vital to separate credit.  

You have to separate expenses for tax purposes anyway.  Having a separate business banking account will only make it easier. 

Hit the jackpot and weather any recession with our best webinar and its trustworthy list of seven vendors who can help you build business credit.

Know Who You Report To: Get a Free DUNS Number

Dun and Bradstreet is the most widely used business credit reporting agency.  They issue each business on file a 9-digit D-U-N-S number.  The application is easy and free.  Once you have that number, you will be even closer to establishing credit for your business separate from your own. 

Be Easily Accessible: Set Up Separate Business Contact Information

Your business needs its own phone number.  It should be an 800 number or from some other toll-free exchange.  This way, when you apply for credit, you can enter contact information that is separate from your personal information.  When information is reported to agencies, sometimes the phone number is an identifying factor. If you and your business share a number, that just decreases the level of separation. 

The same is true for a separate business address, email address, and website.  Your business address should not be the same as your home address.  The business email address should contain the website URL. Do not use a free service such as Yahoo or Gmail. 

Make sure your website is professionally presented and put together.  A poorly put together website or broken links can do more damage than you may imagine.

Be sure you get your business phone number and address listed in the directories under the business name. 

Form Preliminary Alliances: Start with the Vendor Credit 

After you separate your business from yourself, it is time for the next step to establish business credit in a recession.  Do business with starter vendors that will extend invoices with net30 terms. Then, when you pay, they will report the payment to the business credit reporting agencies.  As a bonus, if you are finding yourself short on necessities due to the COVID-19 outbreak, these vendors may have what you need. Toilet paper, paper towels, and cleaning products are all available through some starter vendors. 

Typically, these vendors issue net terms without regard to either your personal or business credit score.  This makes them the perfect way to begin building your business credit score. While there are a lot of these types of vendors out there, some are better to start with than others.  

You want to start with those that offer products you will use in the daily course of business.  They also need to have minimal requirements for net30 terms. Though they do not check credit, some do have minimum time in business or annual revenue requirements.  Others only require that you make a few initial purchases before they will extend net terms.

Three of the most common starter vendors that work great at the beginning of the process include: 

  • Quill– offers office and cleaning supplies
  • Uline– sells packing supplies
  • Grainger– supplies for working outside including tools

Keep Building: Apply for Business Credit Cards 

Continuing to build business credit is the next step after you establish business credit in a recession.  Once you have your name, EIN, separate contact information, and 5 to 7 starter vendors reporting to the credit agencies, you can apply for credit from certain retailers. This step includes specific stores that issue credit to be used only in their stores or on their website.

Shoot for the highest limit, lowest interest, and most rewards options possible.  Perks like cash back and travel points can pay off. 

If you only qualify for a $200 limit and a higher-end interest rate, in the beginning, that is fine.  You may not be able to get the best rate with a business that has a shorter credit history. This is especially true during a recession. However,  if you pay consistently and on time, things should change quickly. 

After you have several store accounts reporting, you can apply for fleet cards.  These include cards from companies such as Shell and Fuelman that you can only use to pay for gasoline and automobile repairs. 

Once you have several accounts reporting from all three of these types of cards, you can apply for credit that isn’t restricted by retailer or purchase type.  These include well-known credit cards such as Visa and Mastercard that offer higher limits, lower rates, and better rewards. 

Look for Friends in Unlikely Places: Open Talks with Your Utility ProvidersEstablish Business Credit in a Recession Credit Suite

Sometimes utility companies are willing to report payments to credit agencies.  However, you almost always have to ask. The worst they can do is refuse. If they do, no harm no foul.  If they agree, you will only establish your business credit faster. 

Remember, if you are having trouble making utility payments right now due to reduced income related to coronavirus, you should probably wait to do this.  Instead, talk to the utilities about what options they are offering in these circumstances. Some are not counting missed payments against customers for a couple of months.  You have to discuss this with them however, do not assume anything. 

Talk to them all, including telephone, electric, gas, and even internet.  Before you do this, be certain that all of these utilities are in your company name under your separate business contact information. 

Handle Your Business: Make Payments on Time

Of course, the most important part of establishing business credit is making on-time payments.  If this doesn’t happen, then you will not like the credit you establish. It’s equally important whether you are trying to establish business credit in a recession or in a strong economic climate.  Admittedly, it can be much harder during a recession, especially one induced by a global pandemic. Be sure you take advantage of all the resources available to help you stay current. 

Planning is an important part of this.  Do not overspend, and try not to use credit that you cannot pay back in a timely manner. It doesn’t have to be paid off all at once.  You need to make payments to build credit, but be sure you can actually make the payments.

Hit the jackpot and weather any recession with our best webinar and its trustworthy list of seven vendors who can help you build business credit.

You Can Establish Business Credit in a Recession

If you follow these steps, it is possible to establish business credit in a recession.  For new businesses, it can fall into place easily in the normal course of creating a business.  If you have been around a while, it may require some backtracking. A recession may mean it takes longer, but it is more than doable if you follow the steps and trust the process. 

The post Survival of the Fittest: The Essential Guide to Establish Business Credit in a Recession appeared first on Credit Suite.

New comment by ramix in "Ask HN: Who wants to be hired? (July 2020)"

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Survival of the Fittest: The Essential Guide to Establish Business Credit in a Recession

It may seem that trying to establish business credit in a recession is too little too late. It is definitely better to have strong business credit before a recession hits.  However, if you are in the middle of hard economic times and trying to figure out how to survive and even thrive, all is not … Continue reading Survival of the Fittest: The Essential Guide to Establish Business Credit in a Recession

New comment by marc-tres-2 in "Ask HN: Who is hiring? (July 2020)"

Tres Solutions | https://tressolutions.com/ | Software Engineer | Houston, TX | Full-Time We’re a rapidly growing maritime analytics start-up, focused on providing smart digital solutions to disruptively change how shipping companies assess and improve performance. Our mission is to enable shipping companies across the globe to reduce fuel consumption, minimize emissions and increase operational efficiency. …

New comment by joepo in "Ask HN: Who is hiring? (July 2020)"

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Comments URL: https://news.ycombinator.com/item?id=23931643

Points: 1

# Comments: 0

Globe Savings Bank– recalling at its background

Globe Savings Bank– recalling at its background

With so numerous monetary establishments bordering individuals today, one would certainly locate a tough time going to the ideal one. Individuals are really certain on an economic establishment or a financial institution’s background, solutions, items, and so on, that’s why, with such market competitors, the even more acknowledged the financial institution is, the far better.

Among the moving companies in the economic sector is the World Savings Bank. Remaining in this market for nearly a century currently, with greater than US$ 130 billion in properties, and also an expanding variety of items, one can undoubtedly claim that it has actually progressed to coming to be a tale by itself.

In 1959, the World Savings of California came to be a subsidiary of Trans-World Financial Corporation, a cost savings as well as financing holding business; in this very same year, Trans-World gets Colorado’s Guardian Savings as well as Loan, and also later on relabelled it to World Savings Colorado. In 1990, World Savings financial institution got in New Jersey by buying Community Federal Savings. Globe Savings financial institution broadened to Arizona with its acquisition of the Security Federal Savings.

With its vibrant background, one can state that they weren’t simply not doing anything; they really did not simply wait in the sidelines, they benefited it. Not surprising that they’ve broadened and also offered customers in 10 states with over 285 financial savings branches.

It looks like World Savings Bank is right here to remain since of its abundant background and also existing condition in the sector. If it remains to enhance its items and also solutions, it is highly likely that the World Savings Bank will certainly remain to broaden, spread out, as well as dominate America as well as also the globe. It simply reveals that in this service, when the business simply makes the customers and also clients the very first concern, after that it will certainly go a lengthy method.

In 1959, the World Savings of California came to be a subsidiary of Trans-World Financial Corporation, a financial savings and also finance holding firm; in this exact same year, Trans-World obtains Colorado’s Guardian Savings and also Loan, as well as later on relabelled it to World Savings Colorado. Via its procurement of the Bell Savings Banc in 1985 that World Savings financial institution has actually gone into Texas. In 1990, World Savings financial institution got in New Jersey by acquiring Community Federal Savings. Globe Savings financial institution broadened to Arizona with its acquisition of the Security Federal Savings.

The post Globe Savings Bank– recalling at its background appeared first on ROI Credit Builders.

Get the Best Visa Cards for Your Business

We’ve got the best Visa cards for your business right here! You can get great perks – these are, after all, the best Visa cards.

Check out the Best Visa Cards for Business

We looked into the best Visa cards for you – and more. So, here are our favorites.

Per the SBA, company credit card limits are a massive 10 – 100 times that of personal credit cards!

This shows you can get a lot more financing with corporate credit cards. And it likewise reveals you can have personal credit cards at stores. So, you would now have an extra card at the very same stores for your business.

And you will not need collateral, cash flow, or financials to get small business credit.

The Best Visa Cards: Benefits

Benefits can vary. So, make certain to choose the benefit you would prefer from this selection of alternatives.

The Best Visa Cards with No Yearly Fee

No Annual Fee/Flat Rate Cash Back

Ink Business Unlimited℠ Credit Card

Have a look at the Ink Business Unlimited℠ Credit Card. It is one of the best Visa cards. Past no yearly fee, get an introductory 0% APR for the first one year. After that, the APR is a variable 14.74 – 20.74%. 

You can earn unlimited 1.5% Cash Back rewards on every purchase made for your company. And get $500 bonus cash back after spending $3,000 in the initial 3 months from account opening. You can redeem your rewards for cash back, gift cards, travel and more via Chase Ultimate Rewards®. You will need superb credit to receive this card.

Find it here: https://creditcards.chase.com/business-credit-cards/ink/unlimited 

Best Visa Cards Credit Suite

Establish business credit fast with our research-backed guide to 12 business credit cards and lines.

The Best Visa Cards for Cash Back

Bonus Categories

Ink Business Cash℠ Credit Card

Have a look at the Ink Business Cash℠ Credit Card. It is one of the best Visa cards and has no yearly fee. There is a 0% introductory APR for the initial year. Afterwards, the APR is a variable 14.74 – 20.74%. You can get a $500 one-time cash bonus after spending $3,000 in the initial 3 months from account opening.

You can earn 5% cash back on the initial $25,000 spent in combined purchases at office supply stores and on net, cable, and phone services each account anniversary year.

Get 2% cash back on the first $25,000 spent in combined purchases at gas stations and restaurants each account anniversary year. Get 1% cash back on all other purchases. There is no limit to the amount you can earn.

You will need excellent credit to receive this Visa card.

Find it here: https://creditcards.chase.com/business-credit-cards/ink/cash?iCELL=61GF

Compare to the next few similar cards and see which one you prefer.

Flat-Rate Rewards

Capital One ® Spark® Cash for Business 

Take a look at the Capital One® Spark® Cash for Business. It has an introductory $0 annual fee for the initial year. Afterwards, this card costs $95 each year. There is no introductory APR deal. The regular APR is a variable 18.49%.

You can get a $500 one-time cash bonus after spending $4,000 in the initial three months from account opening. Get unlimited 2% cash back. Redeem any time without any minimums.

You will need good to exceptional credit scores to qualify.

Find it here: https://www.capitalone.com/small-business/credit-cards/spark-cash/ 

Best Visa Cards Credit Suite

Establish business credit fast with our research-backed guide to 12 business credit cards and lines.

Flat-Rate Rewards and No Annual Cost

Discover it® Business Card

Have a look at the Discover it® Business Card. It has no yearly fee. There is an introductory APR of 0% on purchases for year. After that the regular APR is a variable 14.49 – 22.49%.

Get unlimited 1.5% cash back on all purchases, with no category restrictions or bonuses. They double the 1.5% Cashback Match™ at the end of the first year. There is no minimum spend requirement.

You can download transactions| quickly to Quicken, QuickBooks, and Excel. Note: you will need great to outstanding credit to get approval for this card.

https://www.discover.com/credit-cards/business/

Boosted Cash Back Categories

Bank of America® Business Advantage Cash Rewards MasterCard® credit card

Check out the Bank of America® Business Advantage Cash Rewards MasterCard® credit card. Get an 0% introductory APR for the first 9 billing cycles of the account. Afterwards, the APR is 13.74% – 23.74% variable. There is no yearly fee. You can get a $300 statement credit offer.

Get 3% cash back in the category of your choice. So these are gasoline stations (default), office supply stores, travel, TV/telecom & wireless, computer services or business consulting services. Get 2% cash back on dining. So this is for the first $50,000 in combined choice category/dining purchases each calendar year. Then get 1% after, with no limits.

You will need outstanding credit scores to qualify.

Find it here: https://promo.bankofamerica.com/smallbusinesscards2/ 

Irresistible Cards for Jackpot Rewards That Never Expire

Capital One® Spark® Cash Select for Business

Check out the Capital One® Spark® Cash Select for Business. It has no yearly fee. You can get 1.5% cash back on every purchase. There is no limit on the cash back you can get. Also earn a one-time $200 cash bonus once you spend $3,000 on purchases in the first 3 months. Rewards never expire.

Pay a 0% introductory APR for 9 months. Then pay 14.49% – 22.49% variable APR after that.

You will need great to excellent credit scores to qualify.

Find it here: https://www.capitalone.com/small-business/credit-cards/spark-cash-select/ 

The Best Visa Cards for Lavish Travel Points

Bonus Travel Categories with a Sign-Up Offer

Ink Business Preferred℠ Credit Card

For a wonderful sign-up offer and bonus categories, check out the Ink Business Preferred℠ Credit Card. It is one of the best Visa cards out there!

Pay a yearly fee of $95. Regular APR is 17.49 – 22.49%, variable. There is no introductory APR offer.

Get 100,000 bonus points after spending $15,000 in the initial three months after account opening. This works out to $1,250 toward travel rewards if you redeem through Chase Ultimate Rewards.

Get 3 points per dollar of the first $150,000 you spend with this card. So this is for purchases on travel, shipping, internet, cable, and phone services. Plus it includes advertising purchases made with social media sites and search engines each account anniversary year.

You can get 25% more in travel redemption when you redeem for travel with Chase Ultimate Rewards. You will need a good to superb FICO score to qualify.

Find it here: https://creditcards.chase.com/business-credit-cards/ink/business-preferred 

Compare this Visa to the next cards and see which you prefer.

Flat-rate Travel Rewards

Capital One® Spark® Miles for Business

Have a look at the Capital One® Spark® Miles for Business. It has an introductory annual fee of $0 for the first year, which then rises to $95. The regular APR is 18.49%, variable due to the prime rate. There is no introductory annual percentage rate. Pay no transfer fees. Late fees go up to $39.

This card is wonderful for travel if your expenditures don’t fall into common bonus categories. You can get unlimited double miles on all purchases, with no limits. Get 5x miles on rental cars and hotels if you book via Capital One Travel.

Get an initial bonus of 50,000 miles. That’s the same as $500 in travel. Yet you only get it if you spend $4,500 in the first 3 months from account opening. There is no foreign transaction fee. You will need a good to superb FICO rating to qualify.

Find it here: https://www.capitalone.com/small-business/credit-cards/spark-miles/

great Visa Credit Suite

Establish business credit fast with our research-backed guide to 12 business credit cards and lines.

No Annual Fee

Bank of America® Business Advantage Travel Rewards World MasterCard® credit card

For no annual fee while still getting travel rewards, check out this card from Bank of America. It has no yearly fee and a 0% introductory APR for purchases during the first nine billing cycles. After that, its regular APR is 13.74 – 23.74% variable.

You can get 30,000 bonus points when you make at least $3,000 in net purchases. So this is within 90 days of your account opening. You can redeem these points for a $300 statement credit towards travel purchases.

Get unlimited 1.5 points for every $1 you spend on all purchases, everywhere, every time. And this is despite how much you spend.

Likewise get 3 points per every dollar spent when you book your travel (car, hotel, airline) via the Bank of America® Travel Center. There is no limit to the number of points you can get and points don’t expire.

You will need superb credit scores to get this one (as in, 700s or better).

Find it here: https://www.bankofamerica.com/smallbusiness/credit-cards/products/travel-rewards-business-credit-card/

Hotel Credit Card

Marriott Bonvoy Business™ American Express® Card

Have a look at the Marriott Bonvoy Business™ Card from American Express. It has a yearly fee of $125. There is no introductory APR offer. The regular APR is a variable 17.24 – 26.24%. You will need good to exceptional credit scores to get this card.

Points

You can get 75,000 Marriott Bonvoy points after using your card to make purchases of $3,000 in the initial three months. Get 6x the points for eligible purchases at participating Marriott Bonvoy hotels. You can get 4x the points at US restaurants and filling stations. And you can get 4x the points on wireless telephone services bought straight from American providers and on American purchases for shipping.

Get double points on all other qualified purchases.

Rewards

Plus, you get a free night every year after your card anniversary. And you can earn another free night after you spend $60,000 on your card in a calendar year.

You get free Marriott Bonvoy Silver Elite status with your Card. Also, spend $35,000 on qualified purchases in a calendar year and get an upgrade to Marriott Bonvoy Gold Elite status through the end of the next calendar year.

Also, each calendar year you can get credit for 15 nights towards the next level of Marriott Bonvoy Elite status.

Find it here: https://creditcard.americanexpress.com/d/bonvoy-business/

The Very Best Small Business Credit Cards for You

Your outright best Visa cards for your business will always depend upon your credit report and scores. And you may find these similar cards we found end up being better for your needs.

Just you can choose which features you want and need. So, ensure to do your homework. What is outstanding for you could be catastrophic for another person.

And, as always, make certain to develop credit in the advised order for the best, fastest benefits.

The post Get the Best Visa Cards for Your Business appeared first on Credit Suite.

Startup Crowdfunding: Top Tips to Make it Work

Startup crowdfunding is an awesome way to start a business for a few reasons. The top reason is likely the hope of starting a business without any debt.  It rarely works out that way, but there have been a few lucky ducks that have blown goals out of the water and been able to use crowdfunding to totally fund their startup.

Try These Hot Tips to Make Startup Crowdfunding Work for You

The problem comes in when you are not one of those lucky ducks.  Of course, that doesn’t mean you shouldn’t try startup crowdfunding.  It just meant that you need to have a plan, execute it, and have a backup plan in case it doesn’t work out exactly like you hope.  

What is Startup Crowdfunding? 

Crowdfunding sites allow you to pitch your business to thousands of micro investors. Anyone who wants can donate, if you will, to the cause.

Investors pledge amounts on a broad spectrum depending on the campaign and the platform in use. They may give $80, they may give $150, or they may give over $500. It might just be $5, but any amount helps.

Though not always necessary, most entrepreneurs offer rewards to investors for their generosity. Most often, this comes in the form of the product the business will be selling. Different levels of giving  result in different rewards. For example, a $50 gift may get your product A, and a $100 gift will get you an upgraded version of product A.

Startup Crowdfunding Credit Suite

Find out why so many companies use our proven methods to get business loans.

Set Your Goal

This is not something that should be taken lightly. If you set your goal low, it won’t matter if you meet it or not.  You still won’t have enough. If you set it too high, you may not get your money at all. That’s because some platforms will not release your funds until you meet your goal.  There is a fine line you have to walk, and balance is necessary. 

If you aren’t great with numbers, find someone who is to do some professional projections of how much you actually need to start your business. 

Choose Your Platform

There are a few different startup crowdfunding platforms out there.  Some are more popular than others. The key is to find the one with the audience that best fits your business. 

Kickstarter

They are the largest crowdfunding platform. They have over 14 million backers and over 130,000 funded projects. Campaigns are for products and services such as:

  • Publishing
  • The arts and film
  • Comics and illustration
  • Design and tech

A prototype is necessary. Projects cannot be for charity, although nonprofits can use Kickstarter. Equity cannot be offered as an incentive.

Taboo projects and perks include anything to do with:

  • Contests and raffles
  • Cures and medicines
  • Credit services
  • Live animals
  • Alcohol
  • Weapons

There is a 5% fee on all funds which creators collect. Stripe, their payments processor, will also apply payment processing fees, which are roughly 3-5%. Campaigns that don’t make it don’t pay a fee. There are also fees of 3% + $0.20 per pledge. Pledges under $10 have to pay a discounted micropledge fee of 5% + $0.05 per pledge.

Indiegogo

Indiegogo has over 9 million backers. Their minimum goal amount is $500. They charge 5% platform fees and 3% + 30¢ third-party credit card fees. Fees are deducted from the amount raised, not the goal. As a result, if you raise more than your goal, you will pay more in fees. They do not accept PayPal.

Indiegogo is notable because they offer both fixed and flexible funding. This means, if you don’t hit your goal and you chose the flexible funding option, you can at least hold onto what you have. It’s actually  the opposite of how crowdfunding normally works.

You cannot change your fundraising structure once the campaign starts. They recommend fixed funding if you need a minimum amount for your project. In addition,  regular communications with donors is recommended if you choose fixed funding.

RocketHub

RocketHub is more for entrepreneurs who want venture capital. They give you an ELEQUITY Funding Room. This is where you can pitch your idea and see if it stimulates any interest from donors.

The platform is specifically for business owners working on projects in these categories: 

  • Art
  • Business
  • Science
  • Social

If you reach your fundraising goal, you will pay a fee of 4%. In addition, you’ll pay a 4% credit card handling fee. But if you do not reach your goal, that fee jumps up to 8% plus the credit card handling fee. Of course, that means RocketHub is best for companies that are more confident they will make their goals.

Startup Crowdfunding Credit Suite

Find out why so many companies use our proven methods to get business loans.

CircleUp

CircleUp is only for businesses. Their aim is to help emerging brands and companies raise capital to grow. However, companies must apply and show revenue of at least $1 million to get a listing on the site. Still, they will sometimes make exceptions.

Due to its more thorough process, CircleUp can be good for entrepreneurs who already have a somewhat established business. These are business owners who want both funding and guidance in order to take their businesses to the next level.

If your business gets approval for listing on CircleUp, the fee percentage comes from the total amount you raise. 

CircleUp says (in its FAQ): “Our commission is intended to be generally consistent with what companies pay to investment bankers in the offline world for similar size fundraising rounds.”

GoFundMe

We can’t leave this one out because it is so well known.  Truly, it’s probably not the best choice out there.

In general, GoFundMe is for individuals. Therefore, you might conceivably use it at the very beginning for startup crowdfunding. You will need to meet your fundraising goal in order to collect. The service charges 5% as a platform fee outside the United States. But there are no specific platform fees in America. Yet, there are payment processing charges of between 2 and 5%.

GoFundMe is often for personal causes, like people looking to cover their medical bills. Hence it may not be best for business funding. In addition, considering the large numbers of people who use GoFundMe for personal expenses, a business plea might get lost in the shuffle.

Work your Campaign

You’ve heard the adage “Plan to work and work your plan,” right? Well, it fits here perfectly.  You have to have a campaign plan. Videos are popular but not necessary. Whatever ace you have up your sleeve, it has to make people want to support your business. They need to get excited.  

Remember, your campaign has to match the personality of your audience.  Does your main market fit in a certain generation? Maybe they are mostly 80s babies. Market to that with popular music and catch phrases from that era.  

Are they an audience that loves campy, cheesy spoofs?  Use that to your advantage!  Specifically right now, if your business is going to help those affected by the pandemic, or the resulting economic downturn, play to that in your campaign!

Set Up Incentives

Of course, no one really ever wants to give something for nothing.  Those who are excited about your business are going to be more likely to show their excitement monetarily if you offer great incentives. 

Physical incentives are a pain in the neck. However, people love them and they will stand out. Plus, if a perk is used frequently, it will help to keep your company relevant.

Still, you also have to ship anything physical that you promise. You may be an American company, but that doesn’t mean all of your investors will be in the United States. International shipping is costly, even for small items. Therefore, if you offer physical perks, be clear about whether you will allow international donor addresses. 

Yet, even if everything has to be shipped in the US, you are still left with a database of names and addresses, and some of them might have misprints or be incomplete.

Also, most campaigns offer more than one option. Then you have to remember what each person wanted.  What if it is lost or damaged in the mail? These are all reasons to consider digital incentives. For example, for a house flipping campaign you could record video footage about home design or repair. For a long-haul trucking company, you could offer PDFs with personal recommendations on what to see and do in certain cities you service. A nail salon could send digital coupons for a free month of manicure touch ups.

The options are endless, especially when you consider all the possibilities for digital gift cards.

Have a Backup Plan 

Regardless of how awesome your campaign is and how fabulous your incentives are, you need a backup plan.  Tons of great businesses fail to reach their crowdfunding goal each year. Even if you follow all of these tips, that is still a possibility. Especially in this time of economic uncertainty, you need a backup plan. 

If startup crowdfunding doesn’t work out, or only partially works out, your next step will likely be a business loan.  There are a few options, but for startup business loans, you are likely going to be choosing between only a couple.  

Traditional Term Loans

These are the loans that you go to the bank to get.  As a business, your business credit score can help you get some types of funding even if your personal score isn’t awesome.  That isn’t necessarily the case with this type of funding however. 

With a traditional lender term loan, you are almost always going to have to give a personal guarantee.  This means they will check your personal credit.  If your personal credit score isn’t in order, you will likely not get approval.

What kind of personal credit score do you need to have in order to qualify for a traditional term loan? If you have at least a 750 you are in pretty good shape. Sometimes you can get approval with a score of 700+, but the terms will not be as favorable. 

If you have really great business credit, your lender might be more inclined to be a little more flexible. However, your personal credit score will still weigh heavily on the terms and interest rate. 

Of all of the loan types, this is the hardest to get. It is usually worth the trouble though if possible, because it typically offers the best rates and terms. 

SBA Loans

 These are traditional bank loans, but they have a guarantee from the federal government. The Small Business Administration, or SBA, works with lenders to offer small businesses funding solutions that they may not be able to get otherwise for a number of reasons. Because of the government guarantee, lenders are able to relax a little on certain requirements. 

In fact, it is possible to get an SBA microloan with a personal credit score between 620 and 640. These are very small loans, up to $50,000.  They may require personal collateral as well. 

The trade-off with SBA loans is that the application progress is lengthy. There is a ton of red tape connected with these types of loans. 

Startup Crowdfunding Credit Suite

Find out why so many companies use our proven methods to get business loans.

Bonus Tip: Go Ahead and Build Fundability While Working On Your Startup Crowdfunding Campaign

Here’s a bonus for you.  Startup crowdfunding is just one of many business funding options.  The truth is, you are almost certainly going to need to use another option at some point.  While your startup crowdfunding campaign is going, regardless of how successful it seems to be, work on fundability.  This is the ability of your business to get funding.  Even if you meet your goal, you are likely to need financing at some point in the future.  By starting the work to make your business fundable, you help ensure you can get the financing your need to run and grow your business far into the future. 

Startup Crowdfunding:  It May Not Work, But These Tips Will Increase Your Chances

Startup crowdfunding is a legit option. However, it is impossible to tell if it will work or not.  There are some things to do to increase the probability of a successful campaign. Still, it is best to know your options in case it doesn’t work. In the meantime, work on building fundability so that whatever type of funding you end up needing, you’ll be more likely to get it.

The post Startup Crowdfunding: Top Tips to Make it Work appeared first on Credit Suite.

How to Successfully Reinvent Your Career & Personal Growth During and Post-Pandemic

With unemployment rates soaring in the US, the fallout from the pandemic has left many families struggling with the question: What do we do next? Both moms and dads lie awake at night, wondering what …

The post How to Successfully Reinvent Your Career & Personal Growth During and Post-Pandemic appeared first on Paper.li blog.