Tag: Better

How to Use Google’s Disavow Tool For Better Rankings

Recently, I had a friend ask me for help because her website rankings were tanking.

Always willing to lend a helping hand, I asked her what she had been doing to build links and improve SEO.

Everything she was doing checked out OK. So, I fired up Ahrefs and took a look at her backlink profile. That’s when I saw it.

Tons of spammy links were pointing to her site. These links were killing her rankings.

Then I took a look at her Google Webmaster Tools account and saw that she had a manual actions report stating that her website had been penalized for low-quality links.

Here’s an example from linkresearchtools.com that shows what that report looks like.

manual action unnatural links to your site message google disavow tool

I asked her if she tried using the disavow tool to remove these spammy links. She looked at me like a deer in headlights.

Here’s the deal:

It’s no secret that spammy links can penalize your site’s rankings.

Knowing how to build links is a cornerstone of SEO. But the flip side is knowing how to avoid having harmful links point to your site.

If you don’t know how to protect yourself from bad backlinks, you could be setting your site up for epic failure.

The good news is that you can audit your link profile and use Google’s disavow tool to prevent or reverse any penalties.

If you use it the wrong way, you can do more harm to your site than good. You’ll want to make sure you’re careful when using the tool.

This article will teach you how to use the tool well.

What is Google’s Disavow Tool and When Should You Use It?

Before we go into using the tool, let’s dive into the concept of disavowing links.

Good backlinks can raise your Domain Authority (DA) and Page Authority (PA) scores, increase your visibility in search engines, and help you rank better.

Bad backlinks do just the opposite. They harm your SEO and cause you to lose ranking.

With that said, you shouldn’t go disavowing links left and right.

When you disavow a link, you’re telling the search engines not to factor in a specific link when crawling your site.

There are a few categories of bad backlinks you might consider disavowing:

  • Sites set up just for links
  • Obviously spam sites
  • Links in spam comments
  • Backlinks from sites in your non-target country/countries (e.g., a backlink from a German site when your audience is in the U.S.)

If you don’t have control over the spammy links, use the disavow tool so Google disregards them.

Google disavow tool screenshot

Google’s Disavow Tool Warning

According to Google, using this tool the wrong way can have a negative effect on your rankings.

google disavow tool warning

That sounds pretty intense, but don’t worry; Google just wants to make sure you’re not disavowing the wrong links. You should request removals first, and I’ll talk about that later.

Just make sure you use the tool when you have a lot of low-quality backlinks pointing to your site and when you’re sure they’re causing problems.

The good news is that if you use it the right way, you can improve your rankings.

Disavow Tool Best Practices

There are a few important rules of thumb you should follow when using the disavow tool.:

Try Removing Links Via Email First

Google prefers that you try removing links on your own before using the disavow tool.

You can do this with a link removal request.

A link removal request occurs when one site owner emails another to request the removal of a link.

Moz shows an example of a link removal request here.

link removal request email disavow tool

Unfortunately, link-removal requests get a bad rap. Oftentimes they’re ignored, missed, malicious, and even spammy. There’s an art to sending successful link-removal requests.

Use It When You Need It

Matt Cutts (former head of Google’s Webspam team) gives the green light on using the disavow tool:

pasted image 0 964

You may be worried about negative SEO or a bunch of spammy links pointing toward your site. In this case, it would be a good move to disavow. It’s OK to disavow links even if you don’t see a message in your webmaster console.

If your removal-request emails aren’t effective, feel free to use the disavow tool whenever you need.

Use It Like a Shotgun, Not a Rifle

Instead of picking out bad links one by one, you should instead use the domain operator to disavow all bad backlinks from a whole domain instead. This is also a faster method for improving rankings. It may take longer to see results if you handpick bad links one by one.

How to Use the Disavow Tool: A Step-by-Step Guide

Now it’s time to dive deep into how you can use the disavow tool — step by step

Create a List of Backlinks

There are lots of different tools that you can use to get a list of your backlinks.

These services often try to automate the auditing process. While it does save time, you won’t get as clean of a result as would if you manually reviewed each link.

To create your own backlink list manually, here’s what you do.

Download Your Links From All Sources

First, go to Google Webmaster tools. Click search traffic, and links to your site. Download both the latest links and sample links.

google webmaster tools links to your site disavow guide

If your site has a large number of domains linking to it (over 1,000), you can find more links by downloading the sample link list every day for a few days.

You can also download links from other sources:

  • Open Site Explorer: A great tool from Moz, one of the largest brands within the advanced SEO community.
  • Ahrefs: One of the most accurate and largest databases of live backlinks
  • Majestic SEO: Breaks down a lot of information into digestible, granular pieces. This tool is great at preventing overwhelm.
  • Ubersuggest: View your backlink profile, see content suggestions, and more.

Put Your Links into One Spreadsheet

Once you have gathered the spreadsheets from your sources, find the URL column of the sites that link to you and copy this column into a new spreadsheet. Feel free to use Google Docs or Excel — whichever you prefer.

Now you’ll have a master list of every link that leads to your site. You will see some duplicates, but don’t worry because we’ll fix that later.

Break the URLs into Subdomains

Make a new column that is to the immediate left of your URLs. At the top of the spreadsheet (A1), type this formula:

=left(B1,find(“/“,B1,9-1)

Now, highlight the entire column and hit CTRL+D on your keyboard. This will fill in each cell in the row with the formula.

pasted image 0 946

Once that’s done, highlight the whole column again and convert the results of the formula into values. This will allow you to copy and paste data into the column.

Do this by hitting CTRL+C to copy, then press Edit, Paste Special, and Paste Values Only.

Next, let’s use the Find & Replace tool to break everything down to its subdomain.

With column A highlighted, click edit, then find and replace. Type “HTTP://“ (without quotes), don’t put anything in the replace field, and hit “Replace All.”

sort links for disavow tool

Repeat the same steps with these two phrases

  • https://
  • www. (Remember the period after www)

After you’re done, column A will now have the subdomains or domains of each URL that points back to your site.

sort links disavow guide

Get Rid of Duplicate Links

You’ll likely have some domains with several links. What we want is to only have one link from each domain. Sort column A into alphabetic order and then insert a new column to the left of the domains. Put in this formula:

=if(B1=B2,”duplicate”,”unique”)

Copy this down the entire spreadsheet again (you can also click the little plus sign in the lower right-hand corner of a highlighted cell — also known as the “fill” button).

Next, filter this column to only show the duplicates. Finally, delete each duplicate URL.

Now you’ll have one URL for each domain that’s giving you a backlink.

Audit Your Backlinks

Now, click on each URL on your spreadsheet and decide if you want to keep all the links from each domain or disavow them.

audit backlinks example disavow tool guide

If you’re unsure, you can always mark links as “maybe” and come back to them later after you’ve looked at all your links.

Sometimes, you can pick up patterns after looking at all of your links that you wouldn’t have seen otherwise.

If you’re not sure whether or not you should disavow a link, think through these questions:

“Does this link help me?” i.e., “Could I actually get business and/or traffic from this link?”

“Was this link made 100% for SEO only?”

“If a Google employee saw this link, would I be worried?”

Remember that Google only penalizes sites that are trying to game the system. Every site has its share of unnatural links.

You’re not going to get hit with a penalty if you’re playing by the rules. So if you see some unnatural links, don’t sweat it.

Make a Disavow File

Once you’re done reviewing each link, filter the column so you only see the links that you want to disavow.

Next, make a new spreadsheet and copy and paste your domains into the new sheet.

filter your disavow file

Next, you want to add “domain:” (no quotation marks) in front of every domain name.

When you disavow on the domain level, you’re doing a clean sweep of all the bad links on that domain. When you disavow by URL, you’re more likely to miss bad links.

You’ll want to always disavow at the domain level.

Type the following formula into B1 to add “domain:” to the front of every domain name.

=“domain:”&A1

Use the fill button to paste the formula down the entire column. Once again, highlight the column and then select paste special, paste as values.

Now, column B will be full of disavow directives.

create a disavow file screen shot

Make a Text File

Your disavow file must be in 7-bit ASCII or UTF-8 format. You can do this a couple different ways.

On a Mac, open TextEdit, copy and paste column B into TextEdit, and then hit Format and make plain text.

On Google Docs, open a Google Doc, copy column B into a document and then click File, Download As, and Plain text.

Add Comments

Feel free to add comments to your disavow file by starting your comment with a #. But remember, Google employees don’t look at your disavow file.

The disavow tool is 100% automated. Any comment you add is for your own records. You can insert them to jog your memory on certain things when revisiting the file in the future.

google disavow file example

File Your Disavow

Go to the disavow tool and pick your file from the dropdown list. Click disavow links twice and then select “choose file”. Then you’ll want to upload the .txt file you made.

Here’s what a successful disavow looks like:

pasted image 0 974

Top Disavow Tool Mistakes

You may run into errors when you attempt to disavow links.

Luckily, it’s very common for an error to pop up when disavowing links. In this video, Matt Cutts talks about common mistakes that people run into when using the disavow tool.

  • You should only upload a regular text file. No sorting, fonts, or syntax should be added to this file. People try to upload spreadsheets, Word docs, and other file formats. Only upload a text (TXT) file.
disavow text example
  • Start out by using the domain: command when disavowing links so that you disavow all links from the entire site. Many times, users will try to disavow specific URLs with a fine-tooth comb. Don’t do this.
  • Incorrect syntax is another issue that pops up a lot. Make sure you use a TXT file with the proper syntax.
  • If you want to provide commentary on why Google should disavow certain links, save that for the reconsideration request. Don’t write it in the text file.
request review disavow guide
  • When you comment using the disavow tool, make sure that you use tags. If you don’t, it will cause syntax errors. In fact, it’s best to limit your commenting.
  • The disavow tool is not a magic wand that will fix every URL. You should clean up your link profile manually in addition to using the tool.

Frequently-Asked Questions

Still got questions? Here’s a few of the most-asked questions

How Often Should I Use the Disavow Tool?

This all depends on your link profile. For example, if your site has a track record of unnatural links, you may need to do a monthly disavow.

In other cases, it’s best to do a link audit first and then a disavow.

By spacing out every disavow, you give yourself time to spot recurring problems and trends. This will help you make better decisions with your link-building strategies.

But if you have an average website that doesn’t have a history of low-quality links, and if you aren’t in a super competitive space where negative SEO isn’t much of a factor, you’re good with disavowing only once or twice per year.

When Should I Remove a Link Manually and When Should I Use the Disavow Tool?

Removing a link manually should always be your first option.

But, if you’re hit with an algorithm penalty, say from Penguin, there’s no need to go on a long, drawn-out process of emailing site owners to ask them to get rid of links.

In that case, you should disavow. But, if you’ve been hit with a manual penalty, you should definitely try to manually remove links first.

Can I Reavow a Link if I Make a Mistake?

pasted image 0 960

To reavow, modify your disavow file by removing the directive and re-upload it. Matt Cutts has stated that it takes “a lot longer” to reavow a link than to disavow it.

Google purposely builds in this lag time to discourage spammers from trying to game the system.

How Long Will It Take to See Better Traffic and Rankings?

Google applies your disavow directives to your links as soon as it crawls your site.

After you’ve uploaded your directives, Google applies an invisible nofollow tag to the disavowed links that point to your site.

This means that those links will be thrown out of the equation when the Google algorithm considers your website.

You’ll need to wait until Google needs to run the algorithm again, so you won’t see changes right away. Most links only take a month to be removed.

Quick Guide to Using the Disavow Tool

The Disavow tool is a powerful tool to clean up your link profile. Here’s how to use it.

  1. Download All Links From All Sources

    Head to Google Analytics, Ubersuggest, and Ahrefs to view all your links.

  2. Sort The Data

    Pull all the lists together, then remove duplicates and sort.

  3. Audit Your Backlinks

    Check to see which links are problematic, remove the ones that are okay.

  4. Attempt Manual Removal

    Send emails to sites asking them to remove the links.

  5. Create a Text File

    Your disavow file must be in 7-bit ASCII or UTF-8 format. You can do this a couple different ways.

  6. Add Comments

    Use # to add comments or notes as needed.

  7. Submit the File to Google

    Send your file over and wait for Google’s decision.

Conclusion

Whether it’s from hiring a shady SEO agency or being the victim of negative SEO, you’ll need to disavow bad links before you get penalized.

However, be careful and don’t abuse the tool. Disavowing the wrong links can hurt your rankings the same way bad backlinks can.

If you carelessly disavow links, your backlink profile may look unnatural and can cause you to get penalized.

You must review individual backlinks before you submit your disavow file. There’s no getting around it.

When you get things right, though, and your traffic and SEO will improve.

The disavow tool is not the end-all-be-all magic button that will send tons of traffic your way.

However, it is a great SEO tool to have in your arsenal and one that every site owner should be familiar with.

What results have you experienced from using the disavow tool?

Stop! Before You Borrow, Check Out Our Fundera Review for Better Recession Funding

Recession Age Funding The number of American banks as well as thrifts has been decreasing slowly for a quarter of a century. This is from consolidation in the marketplace in addition to deregulation in the 1990s, reducing barriers to interstate banking. See: fundera.com/blog/happened-americas-small-businesses-financial-crisis-six-years-start-crisis-look-back-10-charts. Assets concentrated in ever‐larger banks is problematic for small business proprietors. Big … Continue reading Stop! Before You Borrow, Check Out Our Fundera Review for Better Recession Funding

Stop! Before You Borrow, Check Out Our Fundera Review for Better Recession Funding

Recession Age Funding

The number of American banks as well as thrifts has been decreasing slowly for a quarter of a century. This is from consolidation in the marketplace in addition to deregulation in the 1990s, reducing barriers to interstate banking. See: fundera.com/blog/happened-americas-small-businesses-financial-crisis-six-years-start-crisis-look-back-10-charts. Assets concentrated in ever‐larger banks is problematic for small business proprietors. Big banks are much less likely to make small loans. Economic slumps indicate banks become more careful with lending. Luckily, business credit does not rely upon banks. That’s why we’re offering our Fundera review.

Looking for Funding? You Need to Read Our Fundera Review

Fundera is an online lending company. They offer small business loans with a variety of options. They also have SBA loans and equipment financing, among other financing options. We look at the specifics and drill down into the details of Fundera online lending.

Background

Fundera is located online here: https://www.fundera.com/. Their physical address is:

123 William Street, 21st Floor

New York NY 10038.

You can call them here: (800) 386-3372. You can email them at: support@fundera.com.  Fundera is financed by Khosla Ventures; SGE Susquehanna Growth Equity, LLC; Core Innovation Capital; First Round; and QED Investors.

Fundera Review: SBA Loans

Most companies approved had four or more years in business. Most business owners approved had 680 or better credit scores. And most companies approved had $180,000 in annual revenue. Loan amounts run from $5,000 – 5 million, with 5 – 25 year terms. You can get funding in as little as 2 weeks. However, they may require collateral.

Fees

Their interest rates start at 6%.

Fundera Review: Term Loans

Most companies approved had three or more years’ time in business. Most business owners approved had a credit score of 680 or better. And most companies approved had $300,000 or more in annual revenue. $25,000 – 500,000 is available. Terms are 1 – 5 years. It is as little as 2 days to approval.

Fees

Their interest rates range from 7 – 30%, and there are possible prepayment penalties.

Fundera Review: Equipment Financing

Most companies approved had been in business for two or more years. Most business owners approved had a credit score of 630 or better. And most companies approved had $130,000 or more in annual revenue. Your loan amount up is to 100% of equipment value. The term is the expected life of the equipment, and the equipment serves as the collateral. You can get approval in as little as 2 days.

Fees

Interest rates range from 8 – 30%. Equipment depreciation may be required; this cuts into tax deductions.

Fundera Review: Business Lines of Credit

Most companies approved had been in business for a year or more. Most business owners approved had a credit score of 630 or better. And most companies approved had  $180,000 or more in annual revenue. $10,000 to over $1 million in funding is available, with 6 months to 5 years terms. Approval is in as little as one day.

Fees

Interest rates range from 7 – 25%. However, they may require collateral. There are higher rates for lower credit scores.

Fundera Review: Invoice Financing

Most companies approved had been in business for one year or more. Most business owners approved had a credit score of 600 or better. And most companies approved had $130,000 or more in annual revenue. The maximum advance is equivalent to 100% of the total amount of invoice. Approval is in as little as one day.

Fees

Get a fast advance of about 85% of the value of invoices. Most of the other 15% is paid later. The factor fee is 3% + %/week outstanding. These fees are based on the time it takes for a customer to pay off the invoice.

Fundera Review: Advantages

Advantages include several flexible options. And some of them can get an approval with rather low minimum FICO scores. This choice makes Fundera an option for entrepreneurs who do not have stellar credit. You can also get some forms of funding with fairly low annual revenues. Companies with comparably low annual revenue could get approvals for startup loans and personal loans for business.

Fundera Review: Disadvantages

Disadvantages include your fees are based on how fast your customer pays, so any deadbeat customers will cost you.

An Alternative: Building Business Credit

Small business credit is credit in a small business’s name. It doesn’t attach to an entrepreneur’s personal credit, not even if the owner is a sole proprietor and the only employee of the business.

As a result, an entrepreneur’s business and individual credit scores can be very different. And it is vital in a poor economy.

The Benefits

Since small business credit is separate from personal, it helps to secure an entrepreneur’s personal assets, in case of a lawsuit or business bankruptcy.

Also, with two distinct credit scores, a business owner can get two different cards from the same merchant. This effectively doubles buying power.

Another advantage is that even startup businesses can do this. Going to a bank for a business loan can be a recipe for frustration. But building business credit, when done right, is a plan for success.

Consumer credit scores are dependent on payments but also additional factors like credit utilization percentages.

But for company credit, the scores really just hinge on whether a small business pays its debts in a timely manner.

Fundera Review for Better Recession Funding Credit Suite

Learn business loan secrets with our free, sure-fire guide. We can help you get money, even during a recession.

The Process

Growing small business credit is a process, and it does not occur without effort. A small business must proactively work to build business credit.

That being said, it can be done easily and quickly, and it is much quicker than establishing personal credit scores.

Vendors are a big aspect of this process.

Accomplishing the steps out of order will cause repetitive rejections. No one can start at the top with business credit. For instance, you can’t start with retail or cash credit from your bank. If you do, you’ll get a rejection 100% of the time.

Business Fundability

A business must be fundable to lenders and vendors.

That’s why, a small business will need a professional-looking website and e-mail address. And it needs to have website hosting bought from a supplier like GoDaddy.

In addition, company telephone  numbers must have a listing on ListYourself.com.

In addition, the business telephone number should be toll-free (800 exchange or the like).

A business will also need a bank account devoted strictly to it, and it has to have all of the licenses essential for operating.

Licenses

These licenses all must be in the identical, correct name of the small business. And they need to have the same business address and telephone numbers.

So keep in mind, that this means not just state licenses, but possibly also city licenses.

Fundera Review for Better Recession Funding Credit Suite

Learn business loan secrets with our free, sure-fire guide. We can help you get money, even during a recession.

Working with the IRS

Visit the IRS web site and acquire an EIN for the business. They’re free. Choose a business entity like corporation, LLC, etc.

A small business can get started as a sole proprietor. But they will most likely want to change to a form of corporation or an LLC.

This is in order to decrease risk. And it will maximize tax benefits.

A business entity will matter when it pertains to tax obligations and liability in the event of a lawsuit. A sole proprietorship means the business owner is it when it comes to liability and taxes. Nobody else is responsible.

Sole Proprietors Take Note

If you operate a company as a sole proprietor, then at the very least be sure to file for a DBA. This is ‘doing business as’ status.

If you do not, then your personal name is the same as the small business name. Consequently, you can end up being personally responsible for all business financial obligations.

And also, per the IRS, using this arrangement there is a 1 in 7 probability of an IRS audit. There is a 1 in 50 chance for corporations! Prevent confusion and drastically decrease the odds of an Internal Revenue Service audit at the same time.

But never look at a DBA filing as ever being anything beyond a steppingstone to incorporating.

Instigating the Business Credit Reporting Process

Start at the D&B web site and get a totally free D-U-N-S number. A D-U-N-S number is how D&B gets a company in their system, to generate a PAYDEX score. If there is no D-U-N-S number, then there is no record and no PAYDEX score.

Once in D&B’s system, search Equifax and Experian’s websites for the business. You can do this at www.creditsuite.com/reports. If there is a record with them, check it for accuracy and completeness. If there are no records with them, go to the next step in the process.

By doing this, Experian and Equifax will have something to report on.

Vendor Credit Tier

First you should establish trade lines that report. This is also known as the vendor credit tier. Then you’ll have an established credit profile, and you’ll get a business credit score.

And with an established business credit profile and score you can begin to obtain credit in the retail and cash credit tiers.

These kinds of accounts often tend to be for the things bought all the time, like marketing materials, shipping boxes, outdoor work wear, ink and toner, and office furniture.

But first of all, what is trade credit? These trade lines are credit issuers who will give you preliminary credit when you have none now. Terms are often Net 30, versus revolving.

Therefore, if you get approval for $1,000 in vendor credit and use all of it, you will need to pay that money back in a set term, such as within 30 days on a Net 30 account.

Details

Net 30 accounts need to be paid in full within 30 days. 60 accounts have to be paid fully within 60 days. In contrast to with revolving accounts, you have a set time when you have to pay back what you borrowed or the credit you used.

To launch your business credit profile the proper way, you should get approval for vendor accounts that report to the business credit reporting agencies. When that’s done, you can then make use of the credit.

Then pay back what you used, and the account is on report to Dun & Bradstreet, Experian, or Equifax.

Vendor Credit Tier – It Makes Sense

Not every vendor can help like true starter credit can. These are vendors that will grant an approval with negligible effort. You also need them to be reporting to one or more of the big three CRAs: Dun & Bradstreet, Equifax, and Experian.

You want 5 to 8 of these to move onto the next step, which is the retail credit tier. But you may have to apply more than one time to these vendors. So, this is to demonstrate you are dependable and will pay in a timely manner.

Retail Credit Tier

Once there are 5 to 8 or more vendor trade accounts reporting to at least one of the CRAs, then move to the retail credit tier. These are companies like Office Depot and Staples.

Only use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, use the small business’s EIN on these credit applications.

One instance is Lowe’s. They report to D&B, Equifax and Business Experian. They need to see a D-U-N-S and a PAYDEX score of 78 or more.

Fleet Credit Tier

Are there 8 to 10 accounts reporting? Then move onto the fleet credit tier. These are companies such as BP and Conoco. Use this credit to purchase fuel, and to repair, and take care of vehicles. Just use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, make sure to apply using the company’s EIN.

One such example is Shell. They report to D&B and Business Experian. They want to see a PAYDEX Score of 78 or higher and a 411 business telephone listing.

Shell might claim they want a specific amount of time in business or profits. But if you already have adequate vendor accounts, that won’t be necessary. And you can still get approval.

Fundera Review for Better Recession Funding Credit Suite

Learn business loan secrets with our free, sure-fire guide. We can help you get money, even during a recession.

Cash Credit Tier

Have you been responsibly handling the credit you’ve up to this point? Then progress to the cash credit tier. These are businesses such as Visa and MasterCard. Only use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, use your EIN instead.

One such example is the Fuelman MasterCard. They report to D&B and Equifax Business. They need to see a PAYDEX Score of 78 or higher. And they also want you to have 10 trade lines reporting on your D&B report.

Plus, they want to see a $10,000 high credit limit reporting on your D&B report (other account reporting).

In addition, they want you to have an established small business.

These are companies like Walmart and Dell, and also Home Depot, BP, and Racetrac. These are often MasterCard credit cards. If you have 14 trade accounts reporting, then these are in reach.

Monitor Your Business Credit

Know what is happening with your credit. Make certain it is being reported and deal with any inaccuracies as soon as possible. Get in the habit of taking a look at credit reports and digging into the particulars, and not just the scores.

We can help you monitor business credit at Experian and D&B for 90% less than it would cost you at the CRAs. See: www.creditsuite.com/monitoring.

Update Your Data

Update the information if there are inaccuracies or the data is incomplete.

Fix Your Business Credit

So, what’s all this monitoring for? It’s to dispute any mistakes in your records. Mistakes in your credit report(s) can be taken care of. But the CRAs normally want you to dispute in a particular way.

Disputes

Disputing credit report mistakes typically means you mail a paper letter with copies of any proofs of payment with it. These are documents like receipts and cancelled checks. Never mail the original copies. Always mail copies and retain the original copies.

Fixing credit report errors also means you specifically itemize any charges you challenge. Make your dispute letter as understandable as possible. Be specific about the problems with your report. Use certified mail so that you will have proof that you sent in your dispute.

A Word about Building Business Credit

Always use credit responsibly! Don’t borrow more than what you can pay off. Monitor balances and deadlines for repayments. Paying punctually and in full will do more to increase business credit scores than just about anything else.

Building small business credit pays. Excellent business credit scores help a company get loans. Your lending institution knows the small business can pay its financial obligations. They know the company is bona fide.

The small business’s EIN attaches to high scores and credit issuers won’t feel the need to request a personal guarantee.

Business credit is an asset which can help your company for years to come.

Upshot

With fairly low annual revenue and minimum FICO score requirements, the Fundera online lender program is a good choice for newer businesses that haven’t quite gotten up to speed yet. However, because your company will be charged for deadbeat clients, even a startup will need to be certain their customers will pay on time.

And finally, as with every other lending program, whether online or offline, remember to read the fine print and do the math. Go over the details with care. Only you can decide if this option will be good for you and your company.

In addition, consider alternative financing options that go beyond lending. This includes building business credit. In a recession, you need to best decide how to get the money you need to help your business grow.

Today, we want to hear from our audience! Share your voice with us about your experiences with online lenders.

The post Stop! Before You Borrow, Check Out Our Fundera Review for Better Recession Funding appeared first on Credit Suite.

Get Better Financing with Funding Circle Reviews

Looking for Funding Circle reviews? We took a look at this alternative lender to see if the information we had on them is still true. Welcome to Funding Circle reviews.

Funding Circle is one of several lending companies in the online space. They have loaned over $11.7 billion, with over 4.9 million loans under management. They work as a peer to peer lender.

In the US, Funding Circle leads the Marketplace Lending Association, along with LendingClub, Prosper, and Sofi.

Funding Circle Reviews: Background

Funding Circle is online here: www.fundingcircle.com/us/. Their physical addresses are in San Francisco, Denver, London, and Berlin. You can call them here: (855) 385-5356. Their contact page is here: www.fundingcircle.com/us/about/contact/. They have been in business since 2010.

Funding Circle Reviews: Their Borrower’s Bill of Rights

Funding Circle has a business borrowers’ Bill of Rights, here: www.fundingcircle.com/us/business-borrower-bill-of-rights/

It says:

  1. The Right to Transparent Pricing and Terms 

You have a right to see the cost and terms of any financing you are offered in writing and in a form that is clear, complete, and easy to compare with other options, so that you can make the best decision for your business.

  1. The Right to Non-Abusive Products 

You have a right to loan products that will not trap you in expensive cycles of re-borrowing. Lenders’ profitability should come from your success, not from your failure to repay the loan according to its original terms.

Borrower’s Bill of Rights Continued

  1. The Right to Responsible Underwriting 

You have a right to work with lenders who will set you up for success, not failure. High loss rates should not be accepted by lenders simply as a cost of business to be passed on to you in the form of high rates or fees.

  1. The Right to Inclusive Credit Access 

You have a right to fair and equal treatment when seeking a loan.

  1. The Right to Fair Collection Practices 

If you are unable to repay a loan, you have a right to be treated fairly and respectfully throughout the collections process. Collections on defaulted loans should not be used by lenders as a primary source of repayment.

Funding Circle Reviews: SBA 7(a) Loans

At Funding Circle, you can borrow anywhere from $20,000 to $5 million from the SBA. Loan terms run for up to 10 years. Pay an interest rate of prime +2.75%. as of the writing of this blog post, that is 6%.

There are no prepayment penalties. 

Fees

Funding Circle will charge a one-time origination fee on each loan they fund. This amount ranges from 3.49% to 6.99% of the approved loan amount.

Funding Circle Reviews: Qualifying for an SBA 7(a) Loan with Funding Circle

Small businesses which meet the below criteria are eligible to apply for an SBA 7(a) loan:

  • In business for more than 3 years
  • At least $500,000 in annual revenue
  • No federal tax liens
  • 680 FICO for personal Guarantor
  • Positive book value (assets > liabilities)

Qualified Industries

Because these are SBA loans, Funding Circle must conform to the SBA’s requirements when it comes to industries. Therefore, they cannot lend to these industries:

  • Speculative real estate
  • Nonprofit organizations
  • Weapons manufacturers
  • Gambling businesses
  • Marijuana dispensaries
  • Pornography

Funding Circle Reviews: COVID-19 Relief

As a part of working with the Small Business Administration, Funding Circle offers their COVID-19 relief, in the form of the Paycheck Protection Program.

Funding Circle Reviews Credit Suite

What frustrates you the most about funding your business during a recession? Check out how our guide can help.

Funding Circle Reviews: More Information

Apply online, and a personal account manager will reach out to you within one hour. They will ask about your business and request and collect documentation. They will decide on your loan in as little as 24 hours. 

If you accept a loan offer, you can get funding in as little as one business day. You can return for more funding in as little as six months.

If your monthly payment is more than 10 days late, they may charge a late fee of up to 5% of each missed payment amount. The late fee will be payable immediately and is in addition to the missed payment.

They will place your loan into default if you miss three or more consecutive payments, four out of six monthly payments or do not comply with your loan agreement.

Funding Circle Reviews: Advantages

So the advantages include no prepayment penalty. There are also relatively fast decisions and funding. In addition, the Borrowers’ Bill of Rights is encouraging. The maximum rates you could pay are within reason.

Funding Circle Reviews: Disadvantages

So what are Funding Circle’s disadvantages? It should be obvious: fees, fees, and more fees. They are for origination, missing payments, and also for insufficient funds. 

An Alternative to Funding Circle

Of course one great alternative to Funding Circle is to build business credit. But how do you do that? Fortunately, we have the method right here. And we’re more than happy to let you in on the secret.

Corporate credit is credit in a small business’s name. It doesn’t connect to a business owner’s personal credit, not even if the owner is a sole proprietor and the only employee of the business. Accordingly, an entrepreneur’s business and personal credit scores can be quite different.

The Advantages

Because small business credit is separate from individual, it helps to protect a small business owner’s personal assets, in the event of legal action or business insolvency. Also, with two separate credit scores, an entrepreneur can get two different cards from the same vendor. This effectively doubles buying power.

Another benefit is that even startups can do this. Visiting a bank for a business loan can be a formula for disappointment. But building business credit, when done the right way, is a plan for success.

Individual credit scores rely on payments but also other components like credit usage percentages. But for company credit, the scores actually only hinge on whether a company pays its bills in a timely manner.

The Process

Growing small business credit is a process, and it does not happen automatically. A corporation must proactively work to establish corporate credit. Having said that, it can be accomplished readily and quickly, and it is much more efficient than establishing individual credit scores. Merchants are a big part of this process.

Performing the steps out of order will cause repetitive denials. No one can start at the top with company credit. For instance, you can’t start with store or cash credit from your bank. If you do, you’ll get a denial 100% of the time.

Company Fundability

A business needs to be fundable to loan providers and vendors. For this reason, a business will need a professional-looking website and e-mail address, with website hosting bought from a supplier like GoDaddy. And company phone and fax numbers need to have a listing on ListYourself.net.

In addition the business telephone number should be toll-free (800 exchange or the like).

A corporation will also need a bank account devoted strictly to it, and it must have all of the licenses necessary for running. These licenses all must be in the specific, correct name of the company, with the same company address and telephone numbers. Bear in mind that this means not just state licenses, but possibly also city licenses.

Funding Circle Reviews Credit Suite

What frustrates you the most about funding your business during a recession? Check out how our guide can help.

Working with the Internal Revenue Service

Visit the IRS website and acquire an EIN for the small business. They’re totally free. Choose a business entity such as corporation, LLC, etc. A business can start off as a sole proprietor but will probably want to change to a kind of corporation or partnership to decrease risk and maximize tax benefits.

A business entity will matter when it concerns tax obligations and liability in the event of litigation. A sole proprietorship means the entrepreneur is it when it comes to liability and tax obligations. Nobody else is responsible.

If you operate a business as a sole proprietor at least file for a DBA (‘doing business as’) status. If you do not, then your personal name is the same as the corporate name. Hence, you can find yourself being personally responsible for all small business debts.

In addition, per the Internal Revenue Service, with this structure there is a 1 in 7 possibility of an IRS audit. There is a 1 in 50 possibility for corporations! Avoid confusion and significantly decrease the odds of an IRS audit at the same time.

Note: any DBA filing should be a steppingstone to incorporating, which is best for building business credit.

Starting Off the Business Credit Reporting Process

Begin at the D&B web site and obtain a free D-U-N-S number. A D-U-N-S number is how D&B gets a business in their system, to generate a PAYDEX score. If there is no D-U-N-S number, then there is no record and no PAYDEX score.

Once in D&B’s system, search Equifax and Experian’s websites for the corporation. You can do this at https://www.creditsuite.com/reports/. If there is a record with them, check it for accuracy and completeness. If there are no records with them, go to the next step in the process. By doing this, Experian and Equifax will have activity to report on.

Trade Lines

First you must establish trade lines that report. This is also called vendor accounts. Then you’ll have an established credit profile, and you’ll get a business credit score.

And with an established business credit profile and score you can begin getting revolving store and cash credit.

These varieties of accounts have the tendency to be for the things bought all the time, like shipping boxes, outdoor work wear, ink and toner, and office furniture.

But first of all, what is trade credit? These trade lines are creditors who will give you initial credit when you have none now. Terms are often Net 30, versus revolving.

Hence if you get approval for $1,000 in vendor credit and use all of it, you will need to pay that money back in a set term, such as within 30 days on a Net 30 account.

Details

Net 30 accounts must be paid in full within 30 days. 60 accounts must be paid in full within 60 days. Compared to with revolving accounts, you have a set time when you have to pay back what you borrowed or the credit you made use of.

To launch your business credit profile properly, you need to get approval for vendor accounts that report to the business credit reporting agencies. Once that’s done, you can then make use of the credit.

Then pay back what you used, and the account is on report to Dun & Bradstreet, Experian, or Equifax.

Not every vendor can help like true starter credit can. These are vendors that will grant an approval with minimal effort. You also need them to be reporting to one or more of the big three CRAs: Dun & Bradstreet, Equifax, and Experian.

You want 3 of these to move onto the next step, which is revolving store credit. 

Accounts That Don’t Report

Non-Reporting trade accounts can also be helpful. While you do want trade accounts to report to at least one of the CRAs, a trade account which does not report can yet be of some worth. You can always ask non-reporting accounts for trade references. And credit accounts of any sort ought to help you to better even out business expenses, thus making financial planning simpler. These are providers like PayPal Credit, T-Mobile, and Best Buy.

Revolving Store Credit

Once there are 3 more vendor trade accounts reporting to at least one of the CRAs, move onto revolving store credit. These are businesses which include Office Depot and Staples.

Use the business’s EIN on these credit applications.

Fleet Credit

Are there more accounts reporting? Then move to fleet credit. These are companies such as BP and Conoco. Use this credit to buy fuel, and to repair and maintain vehicles. Make certain to apply using the small business’s EIN.

Cash Credit

Have you been sensibly managing the credit you’ve up to this point? Then move onto more universal cash credit. These tend to be MasterCard credit cards. Keep your SSN off these applications; use your EIN instead.

If you have more trade accounts reporting, then these are in reach.

Funding Circle Reviews Credit Suite

What frustrates you the most about funding your business during a recession? Check out how our guide can help.

Monitor Your Business Credit

Know what is happening with your credit. Make sure it is being reported and deal with any mistakes ASAP. Get in the habit of checking credit reports and digging into the specifics, and not just the scores.

We can help you monitor business credit at Experian and D&B for 90% less. Update the relevant information if there are errors or the data is incomplete.

Disputing Errors

So, what’s all this monitoring for? It’s to challenge any mistakes in your records. Mistakes in your credit report(s) can be corrected. But the CRAs usually want you to dispute in a particular way.

Disputing credit report errors typically means you send a paper letter with copies of any evidence of payment with it. These are documents like receipts and cancelled checks. Never mail the original copies. Always send copies and retain the original copies.

Disputing credit report errors also means you precisely spell out any charges you contest. Make your dispute letter as clear as possible. Be specific about the issues with your report. Use certified mail so that you will have proof that you sent in your dispute.

A Word about Building Business Credit

Always use credit smartly! Never borrow beyond what you can pay off. Track balances and deadlines for repayments. Paying off punctually and in full will do more to elevate business credit scores than almost anything else.

Growing business credit pays off. Excellent business credit scores help a business get loans. Your creditor knows the business can pay its financial obligations. They recognize the small business is for real. The small business’s EIN attaches to high scores, and creditors won’t feel the need to require a personal guarantee.

Business credit is an asset which can help your small business for years to come.

Funding Circle Reviews: Takeaways

Fees are high at Funding Circle, but at least they’re being transparent about them. Plus, there is no prepayment penalty – but there are late fees. Hence Funding Circle is best for companies which do not need to borrow much and can pay it all back not only on time, but early. Borrowers which need more time to pay a loan back would probably do better elsewhere.

Finally, read the fine print and do the math. Therefore, go over details carefully. And decide if this option will be good for you and your company. In addition, consider alternative financing options beyond lending. This includes building business credit, to best get the money you need. Funding Circle reviews should be just the beginning.

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