The Top 3 Secured Business Credit Cards

Got Bad Personal Credit or No Business Credit? Secured Business Credit Cards Could be the Answer You’re Looking For

But be aware of what secured business credit cards really are – and what’s a much better alternative to kickstarting a business credit profile.

What Are Secured Business Credit Cards?

Secured business credit cards are for businesses with no credit or a less than perfect credit history. An initial security deposit is necessary. This deposit establishes your card’s credit limit. Often a minimum deposit of $500 is necessary. Once you start making purchases you get invoices like a regular credit card. But this begs the question: what does it mean when a business credit card is unsecured?

Unsecured Business Credit Cards

An unsecured business credit card works like an unsecured consumer credit card. Credit limits are calculated from many factors, this depends on the card issuer. Factors in deciding credit limit can include personal credit and/or your company’s business credit scores. They can also include time in business, annual revenues, etc. These credit cards can give your business the opportunity to earn incentives and rewards.

What Aren’t Secured Business Credit Cards?

There are a number of types of business credit cards. Some aren’t too different from secured cards. Or they may have some of the same results, where you can get credit when you normally couldn’t, and you may even have the opportunity to build business credit with such cards.

Prepaid Business Credit Cards

A prepaid business card works as a convenient alternative to carrying cash. In this way, it works a lot like a secured credit card. You add funds to your account. And then whatever amount you add is available for purchases. Sounds like a debit card, right?

Business Debit Cards

But, a business debit card is a card that works a lot like a business checkbook. The limit is the amount of funds you currently have in your business checking account. Every time you use it to make a purchase, the amount you charge comes from your account as a deduction

The Difference Between Prepaid and Debit Cards

Prepaid cards and debit cards are both widely accepted at merchants worldwide, but one is preloaded and the other is not. Debit cards are linked to a checking account, while prepaid cards aren’t and instead require you to load money onto the card

Prepaid Cards Versus Secured Credit Cards for Business

Not exactly. The salient difference between secured credit cards and prepaid debit cards has to do with whose money you’re spending when you use the card. With secured credit cards, you spend money borrowed from the credit card company. You pay that money back after the purchase. With prepaid debit cards, you’re spending your (or your business’s) own money. You load money onto the card before the purchase.

Because it involves borrowing and repaying money, a secured credit card can help someone (or a business) build their credit. It can also harm their credit if they don’t use the card responsibly. Prepaid debit cards have no effect on a credit score.

Business Charge Cards

Another, similar-sounding card is a business charge card. A business charge card has all the convenience of a credit card. But it’s without the high price of interest. When using this card you must pay your balance in full each billing cycle.

Since you can’t carry a balance, a charge card doesn’t have a periodic or annual percentage rate. Hence there is no rate for a charge card issuer to disclose. Let’s look at some secured cards for business.

FNBO Business Edition® Secured Visa® Card

With this card, you can, “take control of your credit history and help rebuild your credit”. Request your own credit limit between $2,000 and $100,000, in multiples of $50, when you apply. Your credit limit is subject to credit approval and a security deposit.

Your security deposit is 110% of the amount of your credit limit. And you will earn interest on your security deposit. But there is a $39 annual fee. Pay a variable 20.24% APR on purchases and balance transfers based on the Prime Rate.

Get it here: https://www.fnbo.com/small-business/credit-cards/

Union Bank® Business Secured Visa® Credit Card

With this card, you can, “start building credit for your business”. Get up to a $25,000 secured credit limit. You will pay a 13.99% variable APR on purchases and balance transfers. And pay a 5% balance transfer fee on each transfer, with a minimum of $10.

There is a 25.25% APR for cash advances. And there is a $30 annual fee. Also, Union Bank will demand immediate payment in full, if you use this business credit card for personal, family, or household purposes.

Get it here: https://www.unionbank.com/business/visa-credit-cards-all

Score the best business credit cards for your business. Check out our professional research.

Wells Fargo Business Secured Credit Card

A Wells Fargo business checking or savings account must be open before applying. Upon approval, your funds will be transferred from the deposit account to fund the credit line

Get a $500 to $25,000 credit line, based on the amount of funds deposited by you as security in a collateral account. Pay no annual fee, and no foreign transaction fee.

You can get up to 10 employee cards. Pay prime + 11.90% APR on purchases. And pay prime + 20.74% APR on cash advances. Cash advance or balance transfer fees may apply.

Perks

Choose between Cash Back or Rewards Points. There is no annual rewards program fee. And there are no required spending categories or caps. Earn 1.5% cash back for every $1 spent on net purchases. You can receive cash back automatically as a credit to your account or to your eligible checking or savings account each quarter.

If you choose rewards points, you will earn 1 point for every $1 spent on net purchases. Get 1,000 bonus points when your company spends $1,000 or more in any monthly billing period. Redeem points for gift cards, merchandise, airline tickets and more. Get a 10% points credit when you redeem points online. And you can earn extra bonus points or discounts from Earn More Mall® retailers.

Business Credit Building with the Wells Fargo Business Secured Credit Card

Wells Fargo reports your payment and usage behavior to the Small Business Financial Exchange. Payment and usage activity of the Wells Fargo Business Secured card is not reported to the consumer credit bureaus, therefore it will not help build or rebuild personal credit history.

Wells Fargo will periodically review your account and recent credit history for an opportunity to upgrade to an unsecured business credit card. You may become eligible with responsible use over time. Being able to upgrade to an unsecured business credit card also depends on your FICO score, payment history and ratio of credit card usage to credit limit.

Get it here: https://www.wellsfargo.com/biz/business-credit/credit-cards/secured-card/

Score the best business credit cards for your business. Check out our professional research.

Choosing the Best Secured Business Credit Cards for Your Circumstances

Wells Fargo is the best when it comes to annual fees (it’s hard to beat $0). For the highest possible credit limit, the FNBO Business Edition® Secured Visa® Card comes out on top,

with a $100,000 maximum.

For the best balance transfer rate, it looks like Union Bank® Business Secured Visa® Credit Card is the best. But keep in mind, they do charge a 5% balance transfer fee on each transfer,

with a minimum of $10.

Building Business Credit is a Viable Alternative to Getting Secured Credit Cards for Business

New businesses can get credit from starter vendors, and often there’s no need to pay money to secure a card. Consider CEO Creative and Grainger Industrial Supply. Neither of them require a deposit to secure a card.

Supply Works

Let’s focus on another starter vendor: Supply Works. They are a part of Home Depot, and offer integrated facility maintenance supplies. But they will not accept virtual addresses. They will report to Experian. Terms are Net 30. You can apply online or over the phone.

Qualifying for Supply Works

You will need:

An entity in good standing with Secretary of State
EIN number with IRS
Business address (matching everywhere)
D-U-N-S number
Business License (if applicable)
Business Bank account
Trade/Bank references

But at least there is no minimal time in business requirement.

Score the best business credit cards for your business. Check out our professional research.

Secured Business Credit Cards: Takeaways

For entrepreneurs just starting out, getting secured business credit cards may seem to be one of the only ways they feel they can get credit. But you can build business credit with starter vendors. Even if you start with lower limits, you often don’t have to secure those cards with a deposit. As a result, starter vendor credit is nearly always a superior alternative to getting secured business credit cards.

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The Top 7 Cash Back Business Credit Cards

Check Out the 7 Best Cash Back Business Credit Cards

Take advantage of our research and check out the seven best cash back business credit cards we could find.

Cash back usually comes in the form of a low percentage rebate, such as 1 – 5%. Some card issuers offer unlimited cash back. Others offer bonus amounts for chosen category spending or meeting a spending threshold within a certain amount of time after account opening, like $750 if you spend $7,500 in the first three months after account opening. Statement credits and signup bonuses are similar, the main difference is how you get the money – check, credit, points, or something else.

The Best Cash Back Business Credit Cards for You

There are differences among cash back business credit cards, and they go beyond the percentages. A high cash back credit card might require a very high spend in a short amount of time. Or a cashback credit card might not offer categories that work for you. Or cash back offers may come with too many strings attached. We sifted through over 100 business credit cards to find cashback credit cards to fit several different circumstances – including yours!

One Thing to Keep in Mind

Terms and rates for cash back business credit cards are subject to change. In particular, many annual percentage rates are tied directly to the Prime Rate. Banks and other credit providers sometimes add or drop features, or even credit cards. The best source for all credit card information is always directly on the provider’s website.

Let’s start with three honorable mention cash back business credit cards.

Honorable Mention: Get 3% Cash Back with High Credit Limits: Zions Bank Visa Amazing Cash® Business Credit Card

Get to know the Zions Bank Visa Amazing Cash® Business Credit Card. You get 3% cash back on select business purchases, including office supplies, cell services, internet, telecom, and cable TV. And get 2% cash back on select business travel purchases, including airlines and vehicle rentals. Get 1% cash back on everything else. Pay a 0% introductory APR on balance transfers for the 12 months after account opening, then pay a 14.24% variable APR afterwards. A 3% balance transfer fee for each transfer ($10 minimum) applies.

Get a credit limit up to $250,000. You will pay no annual fee. There are no rewards fees. 0% introductory APR for the first 6 months after account opening, then 14.24% variable APR afterwards. It is entirely possible that some of the other reviewed cards have better upper limits, you will need to check when you apply.

Honorable Mention: Get a Cash Back Bonus: PNC Bank Cash Rewards® Visa Signature® Business Credit Card

Check out the PNC Bank Cash Rewards® Visa Signature® Business Credit Card. Get a $200 bonus if you spend $3,000 in the first 3 billing cycles after account opening. Get 1.5% cash back on net purchases, with no cash back limits. Pay no annual fee. You will pay a 0% APR for the first 9 billing cycles after account opening, then 10.99-19.99% variable APR, based on creditworthiness. It boasts mostly lower interest rates and a fairly easy to meet minimum spend. To get a bonus, this card is decent if you can’t or won’t spend too in such a short amount of time after getting the card.

Honorable Mention: Get Cash Back and Qualify Even with Fair Credit: Capital One Spark Classic Business Credit Card (Visa)

The Capital One Spark Classic Business Credit Card (Visa) can work if you have fair credit. You can earn 1% cash back with every purchase, with no minimums. Pay no annual fee. You will pay 26.99% variable APR for both purchases and cash advances. The minimum credit line is $300.

The cash back percentage is low, and the interest rate is higher than for the other cards reviewed. But if your credit is only fair, or you don’t have a very long credit history, this card could be right for you.

#7: Get 3% Cash Back with an Annual Bonus: US Bank Business Cash Rewards World Elite Mastercard®

Check out the US Bank Business Cash Rewards World Elite Mastercard®. Earn to 3% cash back on eligible gas station, office supply store and cell phone/service provider net purchases. All other purchases earn 1% cash back. Purchases of gasoline greater than $200 will not be deemed to be a purchase of automotive gasoline, and as such will earn a reward of 1%.

Get $500 cash back if you spend $3,000 in the first 90 days from account opening. Earn a 25% annual bonus based on your prior year’s cash rewards, to $250. Pay no annual fee. You will have a 0% introductory APR for the first 12 billing cycles. After that, 13.99-22.99% based on creditworthiness.

To hit the bonus limit, you would have to have spent over $33,000 in the previous year. Still, the initial spend requirement isn’t too bad. You can meet it with purchases of computers or the like. The APR after the introductory period is acceptable. If your credit is such that you qualify for the lower APR, this card could turn out to be a better deal than our #6.

Score the best business credit cards for your business. Check out our professional research.

#6: Get 3% Cash Back in Limited Categories: First Hawaiian Bank MasterCard Cash Rewards Business Credit Card

Check out the First Hawaiian Bank MasterCard Cash Rewards Business Credit Card. You get 3% unlimited cash back on gas and dining. Get 2% unlimited cash back on utilities, and 1% unlimited cash back on everything else. There is no annual fee.

Pay a 15.49% APR. Earn a $200 credit with a $2,000 spend in the first 3 months from account opening. With its fairly low spend requirement, no annual fee, and decent (but not exceptional) APR, this can be a good card. In particular, it can work well if your business requires you to travel by car and entertain clients on the road.

#5: Get 4% Cash Back for a Limited Time: Citi Bank Costco Anywhere Visa® Business Card

With the Citi Bank Costco Anywhere Visa® Business Card, get 4% cash back on eligible gasoline purchases, including buying gas at Costco. But this is only for the first $7,000 per year. After that, get 1% cash back. Get 3% cash back on restaurant and eligible travel purchases. Earn 2% cashback on all other purchases from Costco and Costco.com. Get 1% cash back on everything else.

There is no annual fee. There are no foreign transaction fees. But you must be a Costco member before applying. Pay a 15.24% variable APR.

While the 4% cash back offer is limited to just the first $7,000 per year, you will have to buy over 2,000 gallons of gasoline if they average $3.50 per gallon to hit the limit. If you think it’s unlikely you would meet that limit, and you’re a Costco member, this could be a good card. It’s got an APR that is decent but not as good as our #4’s rate.

Score the best business credit cards for your business. Check out our professional research.

#4: Get 4% Cash Back Until You Hit a Spend Limit: Huntington Bank MasterCard Voice Business Credit Card

With the Huntington Bank MasterCard Voice business credit card, earn 4% cash back on the first $7,000 spent per quarter in one category of your choice. There is a choice of 10 categories.. Hence the annual spend limit for 4% cash back is $28,000. Earn 1% cashback on all other purchases.

There is no annual fee, and no foreign transaction fee. Pay a 10.99-21.99% APR based on creditworthiness, tied to the Prime Rate. If you know you won’t meet the spend limit, and your credit is already good so the APR is on the lower side, this could be an outstanding card.

#3: Get 5% Cash Back on Amazon Purchases Only: Amazon Prime Store Card

Get 5% cashback on Amazon purchases with the Amazon Prime Store Card. Pay no annual fee. You get a $60 Amazon gift card upon application approval. However, limits seem to be low. There are reviews on the Amazon website and you should check them before applying.

If your business makes a lot of Amazon purchases, this could be one of the best cash back business credit cards for you. If not, it likely has too many limitations.

#2: Get 5% Cash Back in 2 Categories: Bremer Bank Visa Max Cash Preferred

The Bremer Bank Visa Max Cash Preferred card is particularly good if you can pay your credit bills on time and avoid paying interest. Earn a $150 bonus reward if you spend $500 in the first 90 days from account opening. The spending threshold required for a bonus is comfortably low. You will probably meet it if you charge a decent computer on this card. Also get 2% for one everyday category, otherwise get 1% unlimited cash back. There is no annual fee.

All annual percentage rates for interest will vary with the Prime Rate. Pay a 14.49-23.49% APR for purchases based on creditworthiness. Pay a 0% introductory APR for the first 12 billing cycles for balance transfers, and then 14.49-23.49% APR based on creditworthiness.

Get 5% Cash Back in 2 Categories: Alternatives to Bremer Bank

Note: Busey Bank offers the identical credit card, with the exact same rates and fees. The main difference is Bremer is headquartered in Minnesota, whereas Busey is based in Illinois.

First American Bank also offers the identical credit card – they are also based in Illinois.

Since there are no differences among these three offers, your best bet is to choose based on convenience or bank specialty or the like.

Score the best business credit cards for your business. Check out our professional research.

#1: Get 5% Cash Back on Flat Spending: Chase Bank Ink Business Cash®

For good interest rates, and a high percentage in cash back, check out this card. Pay 0% APR on purchases for the first 12 months, and then 13.24-19.24%. Pay no annual fee.

With the Chase Bank Ink Business Cash® card, you get 5% cash back on the first $25,000 you spend on certain business products, i.e. office supply stores, internet, cable, and phone services. This works out to 4% additional cash back rewards on top of 1% cash back rewards earned on each purchase. The $25,000 flat spending limit resets every year. You can get $750 bonus cash back if spend $7,500 in the first 3 months after account opening.

But unlike with some other cards, it can be harder to hit the minimum spend amount. The agreement does not prohibit using your card to buy pricier items such as plane tickets, vehicle repairs, or even heavy equipment. Still, you may find that using other means, such as equipment financing or fleet credit, would make for a better deal for your business.

While we do feel this is the best of the cash back business credit cards we reviewed, if you cannot meet the spend minimum, our #2 choices are a lot better.

Takeaways for the Top 7 Cash Back Business Credit Cards

The business credit cards we reviewed offer cash back deals running from 1% to 5%. Annual percentage rates run from 10.99% t0 26.99%, with many cards offering a 0% introductory APR for a limited time. Some cards offer monetary bonuses, often dependent upon spending a minimum amount during a short window of time. Limits and qualifications were not easy to find online – so ask! And always check a provider’s website for the latest and most accurate details on any business credit card that interests you.

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7 Tips for Successful Small Business Content Marketing

If you own a small business, content marketing is a tactic you should consider to grow your audience base and increase your brand’s name recognition.

Content marketing refers to the creation and dissemination of online materials that grow traffic to your website. Content types can include blogs, infographics, and whitepapers that are geared toward creating interest in your products or offerings.

In this post, we’ll break down why business owners of every size should deploy a content marketing strategy and how to create one.

Why Should Your Small Business Do Content Marketing?

Serving up useful, timely content allows your business to become a thought leader in your industry, increasing your business’s recognition and building consumer trust, respect, and loyalty.

Content marketing also allows you to identify your consumer’s pain points and speak to how your products solve those issues. This can lead directly to sales.

Another lasting benefit of content marketing is any evergreen content you create. This refers to assets that do not become outdated, like blog posts about the history of your industry or an infographic on how to complete a process that doesn’t change.

You can also find use in content marketing when you create assets that can be used across multiple channels and marketing campaigns. For example, if you write a blog post about the needs of a certain community, you can create a YouTube video on the topic and use the video in your blog post. Then you can link to the post and/or video on your social media channels. This saves you time and money, all while firmly establishing you in your field of expertise.

Small Business Content Marketing: 7 Steps for Success

The rest of this post will break down the seven steps every business owner should undertake to build a successful small business content marketing strategy.

1. Start a Blog

Blogging is a completely free way to market your services and capabilities, while simultaneously establishing yourself as an industry expert.

In fact, with 21-54 blogs on your website, you can drive 30 percent more traffic to your website.

In addition to driving traffic, blogs can help:

boost your search engine optimization (SEO) rankings
deliver increased value to your consumers
increase exposure
generate leads and increase conversion likelihood

Resources for Starting a Blog

To help you get started building your blog and giving a voice to your business, here are four resources to help make your blog dreams a reality:

2. Build a Social Media Presence on the Social Channels Your Audience Uses

If you’re actively involved in selling a product or service, you most likely have a social media presence of some variety.

Unfortunately, simply being present isn’t enough. You need to be active on platforms that your audience uses.

How do you choose which social media channels among the multitude of options are right for your brand?

Before you start posting anywhere, you need to identify your target audience. On social media, you’re not speaking to everyone; you’re speaking to a specific set of consumers with specific interests. After you’ve established who you’re speaking to, you must determine how to reach those individuals.

You can use a variety of strategies to determine where your audience is active.

Aggregate all existing consumer data to see where your audience is spending their online time.
Visit your competitors’ social profiles to see where they have the most active users
Use tools like Google Analytics to determine consumer online behavior.

These three steps can help you begin to identify where your target audience is active and begin delivering content to them on those particular platforms.

Resources for Building a Facebook Presence for Your Small Business

3. Start an Email Newsletter

Email newsletters are an excellent way for small businesses to wade into the world of email marketing. They alert your readers to new products, upcoming events, industry-related news, and any other notable business-adjacent happenings.

With historically high return on investment (ROI), for every dollar spent on email marketing, expect an average ROI of $42. Email marketing is an excellent tool for small businesses to use. In addition to sheer ROI, email newsletters can help small businesses:

build goodwill with your audience
promote sales, deals, and coupons
increase customer value

Resources for Starting an Email Newsletter

4. Create Content Corresponding to a Basic Customer Sales Funnel

Finding the right consent to correspond to your consumer’s needs is key to getting them to actually make a purchase.

With a basic customer sales funnel and an accompanying content strategy, you can identify which stage of the funnel your customer currently occupies and deliver them content that speaks toward that stage.

A marketing funnel is the process people go through to reach the conversion phase. The funnel includes everything from getting introduced to your brand until they convert. Most marketing funnels have four steps:

Attention: a would-be consumer sees your ad, social media post, or learns about you through word-of-mouth
Interest: consumer wants to learn more
Desire: consumer wants to convert
Action: consumer acts (buying your item, subscribing to your email newsletter, etc).

To align this four-step process with your content creation, be sure you’re targeting customers within the various stages of the funnel with relevant content. For example, you wouldn’t want to overburden a potential consumer in the attention phase with an in-depth content asset.

Resources for Creating a Basic Sales Funnel/Content Journey

5. Build a Content Calendar

While it’s important to do the work to establish your buyer personas and to deliver them the content they need during their respective buyer’s journey stage, it is also important to keep delivering relevant content in a cadenced fashion.

Instead of scrambling to create content in a reactionary manner, build monthly calendars that include social posts, blog posts, emails, and whatever other content you would like to create that month.

Not only does this strategy keep you organized, but it also allows your readers to get comfortable with a schedule of content and to build continued trust and familiarity with your brand.

Resources for Building a Content Calendar

6. Create a Variety of Content Types

In a competitive landscape, it’s important to stand out however you can. One way your small business can achieve this is through your content marketing strategy.

Do a deep dive into both your existing content and your competitors’ content. See what is resonating with audiences and what isn’t. Once you’ve established efficacy, it’s time to try to replicate that success with your upcoming content.

Then it’s time to get creative. Don’t be limited by what already exists. Take your latest blog post and turn it into an infographic. Take your infographic and turn it into a whitepaper. Take your white paper and make it a series of quote-centric social tiles.

The content creation possibilities are limitless.

Resources for Building a Diverse Content Library

7. Mine Customer Reviews and Testimonials

97 percent of local consumers use online media, including reviews, to search for local services. If you’re a small, local business, that means your reviews are driving your business.

Make those reviews work as hard as you do by bringing them to life through social posts and testimonials on your website and blog.

By sourcing the best quotes and ascribing a face to the name, you make that review much more personal, creating a consumer-generated ad that speaks for itself.

Resources for Building Effective Customer Testimonials

How to Create a Small Business Marketing Strategy

Fine-tune your buyer personas
Building buyer personas allows you to establish a better understanding of your audiences and their respective pain points. By determining who is purchasing your products, you can assess which content they need and when.
Identify valuable consumer content
Consumers don’t want content for content’s sake. They want content that can solve their problems. After you’ve identified buyer personas, work to identify what content assets can best serve your buyers’ unique needs.
Set business goals
Setting business goals that align with your marketing strategy can feel overwhelming at first. Use the principle of SMART goals to make your benchmarks reasonable and reachable.
Solidify distribution channels
You’ve got your content ready to go and your goals ready to measure. It’s finally time to start sharing your content. While it would be nice if every piece of content performed well on every channel, that’s sadly not the case. Determine which pieces of content are appropriate for which channel to ensure success and reach.
Establish cadence
It’s not good enough to deliver one piece of content and rest on your laurels. You must establish a cadence that regularly delivers quality content to your consumers.

Small Business Content Marketing Frequently Asked Questions

Why do small businesses need content marketing?

Even though you’re a small business, you most likely have big competition. To make your business stand out among the crowd and grow your audience, you need a content marketing strategy that allows you to demonstrate your value to future and current consumers.

What are some examles of content marketing?

Examples of content marketing include blog posts, infographics, social media campaigns, podcasts, white papers, ebooks, downloadable PDFs, and YouTube videos. Any type of media that is free to access and brings in leads to your website is content marketing.

What is the best content marketing strategy for a small business?

Having clearly delineated buyer personas is vital for a strong, small business content marketing strategy. Without these personas, your content won’t have clear direction or purpose, resulting in low audience interaction.

How should small businesses create content for their content marketing strategy?

Small business content marketing is all about solving for the buyer’s pain point. After you’ve identified personas, all created content should center both around the respective pain points and what point the buyer is within the funnel.

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Small Business Content Marketing Conclusion

While your small business content marketing may be minuscule, it doesn’t mean that you can’t undertake most, if not all, of the above eight strategies.

After successfully defining your buyer personas, you’re well on your way to developing a winning content marketing strategy that can grow your audience and increase overall sales.

What’s the most effective strategy you’ve seen for small business content marketing?

10 Kinds of Financing for a Small Business – Including Options You’ve Probably Never Heard Of

How Many Kinds of Financing for a Small Business Can YOU Name?

You may be surprised at the many kinds of financing for a small business there are.

Fundability

Any discussion of business financing has to start with fundability. Fundability is the ability of a business to get funding. It covers all the points a lender or credit provider will look at when they’re trying to figure out if you’ll pay back a loan or credit extended to you. These include factors you probably haven’t thought about or might think aren’t so important. Business details like address and entity all matter. But there’s more.

The 3 Cs Capital Acquisition Formula

When you think like a lender, you realize they just want to be sure that you’ll pay them back. Lenders look at one of three things for loan approval: cashflow, collateral and/or credit. The more of these “Cs” you have, the more funding options are available. For the forms of funding we’re showcasing today, we show you exactly what you need to have for approval.

Two More General Ways to Get Funding

If you have absolutely none of the 3 Cs, there are still two other options: selling a part of your business or grants and crowdfunding. Let’s look at types of funding covering all of these options. We’ll start with financing via your business’s cash flow.

#10. Financing for a Small Business with Cash flow: Cash Flow Financing

A loan made to a company is backed by a company’s expected cash flow. A company’s cash flow is the amount of cash that flows in and out of a business, in a specific period. Cash flow financing (or a cash flow loan) uses generated cash flow as a means to pay back the loan.

Cash flow: Cash Flow Financing: Terms and Qualifying

Often you will need to have a few years in business. You may need to meet a certain minimum credit score requirement. You will need to prove historical cash flow and present your accounts receivables and accounts payables. This way, the lender can determine how much to loan to your business.

#9. Financing for a Small Business with Cash flow: Merchant Cash Advances

An MCA technically isn’t a loan. Rather, it is a cash advance based upon the credit card sales of a business. A small business can apply for an MCA and have an advance deposited into its account fairly quickly. So you can offer Net 30 terms but not have to wait a month to get paid.

Merchant Cash Advances

A merchant financing program is ideal for business owners who accept credit cards and are looking for fast and easy business financing. An MCA program is designed to help you get funding based strictly on your cash flow, as verifiable per your business banks statements. Hence lenders in general will not ask for any burdensome document requests.

Terms and Qualifying

A lender will review 3 months of bank and merchant account statements. They are looking for is consistent deposits. And they want to see deposits showing revenue is $50,000 or higher per year. They will also verify time in business of 6 months or more.

Lenders are also looking to see that you don’t have a lot of Non-Sufficient-Funds (NSFs) showing on your bank statements. They want to see you don’t have a lot of chargebacks on your merchant statements. And they want to see that you have more than 10 deposits in a month going into your bank account. They want to see that you manage your bank and merchant accounts responsibly. And they want to see that have a decent number of consistent credit card transaction deposits each month.

Let’s move onto funding based upon collateral – either yours, or a credit partner’s, or from the business itself.

Demolish your funding problems with 27 killer ways to get cash for your business.

#8. Financing for a Small Business with Collateral: Inventory Financing

Inventory financing is a revolving line of credit or a short-term loan acquired by a company so it can purchase products for sale later. The products serve as the collateral for the loan. There may be restrictions on the type of inventory you can use. This can include not allowing cannabis, alcohol, firearms, etc., or perishable goods. There can be revenue requirements. And there may also be minimum FICO score requirements.

Terms and Qualifying

Get approved for a line of credit for 50% of inventory value, regardless of personal credit quality. Rates are usually 5 – 15% depending on type of inventory. You can get funding within 3 weeks or less. But it can’t be lumped together inventory, like office equipment.

#7. Financing for a Small Business with Collateral: Account Receivables Financing

You can use outstanding account receivables as collateral for financing. If you also have purchase orders, you can get financing to have those filled. You won’t need to use your cash flow to do so. Get an accounts receivable credit line with rates of less than 1% with no consumer credit requirement. Receivables should be with the government or another business.

Terms and Qualifying

Get as much as 80% of receivables advanced ongoing in less than 24 hours. Remainder of the accounts receivable are released once the invoice is paid in full. Factor rates are as low as 1.33%. You can get an accounts receivable credit line with rates of less than 1% with no consumer credit requirement.

Now it’s time to move onto funding with good personal credit (FICO) scores.

#6. Financing for a Small Business with Good Personal Credit: Credit Line Hybrid

A credit line hybrid is a form of unsecured funding. Our credit line hybrid has an even better interest rate than a secured loan. Get some of the highest loan amounts and credit lines for businesses. Get 0% business credit cards with stated income. These report to business CRAs. You can build business credit at the same time. This will get you access to even more cash with no personal guarantee.

Terms and Qualifying

You need a good credit score or a guarantor with good credit to get an approval (a FICO score of at least 680). There are no financials required. You can often get a loan of five times the amount of current highest revolving credit limit account. So this is up to $150,000.

#5. Financing for a Small Business with Good Personal Credit: Bridge Loans

A bridge loan is a short-term loan used until a person or company secures permanent financing or removes an existing obligation. It allows the user to meet current obligations by providing immediate cash flow. Bridge loans are short term, up to one year. They have relatively high interest rates. And they are often backed by some form of collateral, like real estate or inventory.

Bridge Loans via Our Credit Line Hybrid

The Credit Suite Credit Line Hybrid has a term loan program. This bridge loan works as either an add-on to, or in lieu of, the program, when the applicant meets eligibility and is agreeable to either a portion (or all) of their funding, supplied in the form of cash term loans. There is a fixed monthly repayment.

Terms and Qualifying

The Credit Suite program is an aggregate program requiring multiple accounts to meet our prequalification. Get $25,000 to $300,000 per applicant. The APR is 7 – 24% depending on creditworthiness and selected term. Terms are 3, 5, or 7 years. You must have a 680 FICO or better, and over $35,000 in adjusted gross income. Actual pre-qualification will depend on Debt-to-Income ratio.

#4. Financing for a Small Business with Good Business Credit: Start with Vendor Credit and Retail Credit

Starter vendors are open to working with most businesses, even startup ventures. Make sure vendors report to the CRAs – not all do. Vendors report to the business CRAs within 60 days. They help you build your business credit profile and score. Terms will vary depending on the vendor, but they tend to be Net 30. And you will not need collateral, good personal credit, or cash flow.

Move onto Retail Credit

Retail credit comes from major retailers. Buy everything from office supplies to power tools. Retailers will check whether your business information is uniform everywhere. They will also check whether your business is properly licensed

Terms and Qualifying

Qualifications will vary, and there can be a minimum time in business requirement. There may even be a minimum number of employees requirement, or a minimum annual sales requirement. Terms can be revolving. You will need at least 3 (5 is better) accounts reporting to the business CRAs.

#3. Financing for a Small Business with Good Business Credit: Fleet Credit and Bank Credit Cards

Fleet credit is used to buy fuel, maintain vehicles of all sorts, and repair vehicles. Even businesses which don’t have big fleets can still benefit. These are usually gas credit cards. Requirements will vary. There may be a minimal time in business requirement. If your business doesn’t make the time in business requirement, you may be able to instead offer a personal guarantee or give a deposit to secure the credit.

A Look at Bank Credit Cards

More bank credit cards are more universal, like MasterCard. So they can be used pretty much anywhere. These cards may even have rewards programs. Terms can be revolving. Usually, you will need to have at least 14 accounts reporting to the business CRAs. There can be longer time in business requirements. And there may also be minimum number of employee requirements.

Now let’s look at financing you can get if you’re all right with sharing the profits and ownership of your business.

Demolish your funding problems with 27 killer ways to get cash for your business.

#2. Financing for a Small Business via Selling Part of Your Business: Angel Investing

Angel investors invest in small startups or entrepreneurs. Often, angel investors are among an entrepreneur’s family and friends. The capital they provide may be a one-time investment to help the business get started, or an ongoing injection of money to support and carry the company through its early stages. Angels are not covered by the Securities Exchange Commission’s (SEC) standards for accredited investors.

Angels could be friends or colleagues sitting on home equity, or local professionals who are looking to invest. Consider people you know well and people you don’t know so well. But keep in mind, you’re giving up part of your ownership in your business.

Angel Investing: Terms and Qualifying

Angels are informal investors so there really aren’t any terms. Technically, there is nothing done for qualifying although investors may (probably should) insist on a valuation of your business. But no matter what, it’s always a good practice to get everything in writing.

#1. Financing for a Small Business via Selling Part of Your Business: Equity Crowdfunding

This is not the same as reward-based crowdfunding (like from Kickstarter). Equity crowdfunding is a stock offering from a company that is not listed on stock exchanges. Equity crowdfunding has been around for less than 10 years. Potential investors visit a funding portal website. There, they can explore different equity crowdfunding investment opportunities. Note: there are limits on how much capital an individual can invest based on their income and net worth. Equity crowdfunding gives investors a stake in your business.

Terms and Qualifying

Equity crowdfunding tends to be covered by complex federal law. It is best practices to consult with an attorney well-versed in federal law, specifically, securities and corporations when it comes to interpreting terms and qualifications. A lawyer will also be able to comprehend any changes that may be made to these aspects of the law in the future.

Let’s move onto kinds of funding you don’t need to pay back.

Bonus #1. Financing for a Small Business via Federal Grants

Federal grants generally do not have to be paid back. Try HUD (Housing and Urban Development) for urban projects. Try the USDA (Department of Agriculture) for rural projects. Federal funding means paperwork. You often must show experience in what you are proposing.

Terms and Qualifying

Grants have varying qualifications. They are very competitive. Be sure to check information thoroughly. This includes due dates and any necessary paperwork. Some grants may offer preferences to businesses with minority, female, veteran, or disabled ownership.

Bonus #2. Financing for a Small Business via Reward-Based Crowdfunding

You can get money from the crowd for your business. Start with a service like Kickstarter. But make sure you read the fine print (always a good idea!). Many crowdfunding platforms make you give all the funding back if you do not make your goal by the end of the campaign. But Indiegogo has a flexible funding option.

Reward-Based Crowdfunding

Crowdfunding platforms will take a percentage of the donations. That’s how they make their money. Crowdfunding platforms may push to have you deliver on your promises. So you’ll have to actually manufacture a product or do whatever else your business is supposed to be doing. Given how much social media we’re all bombarded with these days, it should come as no surprise that donors can become weary of crowdfunding pitches.

Details

Crowdfunding tends to work best when donors can personally connect with a product or service. Straightforward businesses may not do so well. The kinds of businesses which do the best often associate with products not quite on the shelves yet, or artistic endeavors. But standard widgets will most likely not attract brand ambassadors. They probably won’t get donors too fired up. Because crowdfunding campaigns are time-consuming, it doesn’t make sense to try this form of funding unless you realistically feel your chance of success is better than 50%.

Terms and Qualifying

Terms will differ depending on which platform you use. Check and make sure your platform of choice will allow your industry to work with them. For example, even though recreational cannabis use is legal in Massachusetts, Kickstarter (for example) doesn’t allow fundraising for drugs, nicotine, tobacco, vaporizers, and related paraphernalia. Any major crowdfunding platform has a section for rules, a FAQ, or ‘how it works’. Be sure to read such a section thoroughly so you know exactly what you’re getting yourself into.

And now let’s look at funding via creative and different means you may not have considered or heard of before.

Demolish your funding problems with 27 killer ways to get cash for your business.

Bonus #3: Financing for a Small Business via 401(k) Financing

This is not a loan. You will not have to pay an early withdrawal fee or a tax penalty. You put the money back by contributing, just like with any 401(k) program. This means you won’t lose your retirement funds. This is a 401(k) Rollover for Working Capital program. The IRS calls it a Rollover for Business Startups (ROBS).

401(k) Financing

Per the IRS, a ROBS qualified plan is a separate entity with its own set of requirements. The plan, through its company stock investments, rather than the individual owns the trade or business. Therefore, some filing exceptions for individuals may not apply to such a plan. This type of financing isn’t a loan against, your 401(k), so there’s no interest to pay. It does not use the 401(k) or stocks as collateral. Instead, this is simply a movement or change of custodian.

Terms and Qualifying

Pay low rates, often less than 5%. Your 401(k) will need to have more than $35,000 in it. You can usually get up to 100% of what’s “rollable” within your 401(k). The lender will want to see a copy of your two most recent 401(k) statements. You can get 401(k) financing even with severely challenged personal credit. The 401(k) you use cannot be from a business where you are currently employed. You cannot be currently contributing to it.

Bonus #4: Financing for a Small Business with Microloans

Microloans are business loans with relatively low interest rates. Generally, these loans are offered to small or developing businesses with modest capital requirements and little to no revenue history. Microloans — as the name suggests — are smaller loans than a traditional bank loan. They generally offer anywhere from $500 to $50,000 in business financing.

Terms and Qualifying

Terms and requirements vary among providers. Kiva, for example, charges 0% interest. The Opportunity Fund provides loans to low- and moderate-income immigrants, women, and other underserved small business owners. Accion requires a cosigner. Check the specific requirements of any microloan program that interests you

Bonus #5: Financing for a Small Business via SBA 7(a) Loans

This the SBA’s most popular loan. The SBA guarantees 85% for loans up to $150,000. They guarantee 75% for loans greater than $150,000. The SBA makes the lending decision, but qualified lenders may be granted delegated authority to make credit decisions without SBA review.

Terms and Qualifying

The maximum amount on offer is $5 million. You will have to provide Articles of Organization, business licenses, documentation of lawsuits, judgments and bankruptcy or other pertinent documentation. Lenders are not required to take collateral for loans up to $25,000. For loans in excess of $350,000, the SBA requires that the lender collateralize the loan to the maximum extent possible up to the loan amount.

10 Kinds of Financing for a Small Business: Takeaways

There are all sorts of amazing ways to get business funding. You can find the one which fits your circumstances. This includes your strengths in areas like personal credit, collateral, cash flow, selling a part of your business, and getting grants or crowdfunding. Let us help!

The post 10 Kinds of Financing for a Small Business – Including Options You’ve Probably Never Heard Of appeared first on Credit Suite.

WARNING: Do Business Credit Cards Affect Personal Credit? They Can… UNLESS You Take These Important and Easy Steps …

Do business credit cards affect personal credit? They can, and in fact most do. But, they don’t have to. There are steps you can take to make sure they don’t. The key is to build your business credit score, and choose the right business credit cards.

Do Business Credit Cards Affect Personal Credit? It Depends

If you are asking yourself “Do business credit cards affect personal credit?” you are obviously trying to fund a business. And yes, most high limit business credit cards report to your consumer credit report. In fact, some report to both your personal credit and your consumer credit. There are even some business cards that will report negative payment information, but will not report anything if the account is in good standing. If you are trying to keep your business accounts from affecting your personal credit score, you need cards that will not report to personal credit bureaus.

Do Business Credit Cards Affect Personal Credit? Does it Even Matter?

Yes, it matters. Here’s why. You know that if an account, business or personal, is not in good standing, it can be detrimental to your personal credit if reported. Yet, did you know that even if an account is in good standing, it is possible that it may still damage personal credit.

Check out how our reliable process will help your business get the best business credit cards.

This is due to one of the fundamental differences in business credit vs. personal credit. Your personal credit score is affected by your debt-to-credit ratio. That’s a measure of how much debt you have, relative to how much credit you have available. A high debt-to-credit ratio can negatively impact your personal credit score. This is further complicated by the fact that many business credit cards stay at or near their limit, even if you are making regular payments. It is a function of the fact that business expenses are typically much higher than personal expenses.

As a result, if those accounts are on your personal report, they can bring your credit score down even if they are not delinquent. The question then becomes, how do you make sure this doesn’t happen? There are two key parts to this.

Do Business Credit Cards Affect Personal Credit? Make Sure They Don’t

First, if you are getting business credit cards with a personal guarantee, you have to make sure they will not report to your personal credit report. There are a handful that will not, even though they do ask for a personal guarantee. It is important to note that a personal guarantee means there will be a personal credit check. That will create an inquiry that may affect your personal credit for a bit. However, if the account does not report payment information to your personal credit report, the impact will be minimal.

A Few Examples of Business Credit Cards that Will Not Report to Personal Credit

If you have bad personal credit, the Wells Fargo Business Secured Credit Card is a good option.

You can get approved with a credit score as low as 580 currently, but that can change of course.

You do have to make at least a $500 deposit. Also, they do not report to consumer credit agencies, but they DO report to Dun & Bradstreet. That is, assuming you have your D-U-N-S number.

That means it can help you build business credit even with a bad personal credit score. They also report to the Small Business Finance Exchange. While the SBFE does not issue credit reports, they do share information with certain lenders, vendors, and credit agencies.

Wells Fargo will review your account periodically, and they may move you up to an unsecured account if you are eligible, based on a number of factors, including FICO.

If you have good credit, you have even more options for credit cards that will not report to personal credit. A few include:

CitiBusiness® / AAdvantage® Platinum Select® World Mastercard®

Costco Anywhere Visa® Business Card (have to be a Costco member)

Wells Fargo Business Platinum Credit Card

Remember, even though these cards do not report to your personal credit report, they do require a personal guarantee. That means they will do a personal credit check, and that inquiry will affect your score for a bit.

Do Business Credit Cards Affect Personal Credit? Business Credit Cards That Will Not Affect Personal Credit Scores Without a Personal Guarantee

Using a personal guarantee to begin building your credit portfolio is okay to start with. The goal, however, is to get as much as you can without a personal guarantee. To do this, you need to lay the groundwork before you apply for any cards. After all, they cannot report to your business credit profile if there is not one to report to.

Check out how our reliable process will help your business get the best business credit cards.

Do Business Credit Cards Affect Personal Credit? They Do if You Do Not Establish a Business Credit Profile

In contrast to a personal credit profile, you have to intentionally build a business credit profile. While a personal credit builds passively, business credit scores do not. With consumer credit, all you have to do is get credit accounts and they almost all end up on your consumer credit report.

How Do You Establish a Business Credit Profile?

First, you have your business up to be fundable. This includes a number of factors, some of which include:

A business name that does not indicate you are in a high risk industry
A physical business address, not a P.O. Box or UPS box
Business phone number listed with 411
A business bank account
An EIN and a D-U-N-S number

You can get your EIN on the IRS website for free, and apply for the D-U-N-S number on the Dun & Bradstreet website, also for free. This is vital, because if you do not have that D-U-N-S number, accounts will not be able to report your payments to Dun & Bradstreet, because you will not have a profile there for them to report to.

The EIN is what you will use when you apply for business credit instead of your social security number. You may have to provide your SSN for identification purposes, but it will not be used to determine approval. This is one way you ensure your business credit accounts are not reporting to your personal credit report.

Do Business Credit Cards Affect Personal Credit? How to Get Business Credit Cards That Do Not Affect Personal Credit

Once your business is set up in the right way so that you have a business credit profile, you need accounts that report to that profile. However, if you start applying for high limit credit cards using your business credit profile right away, you are going to get denied.

You have to find accounts that will extend credit to your business without any sort of credit check. You don’t yet have a business credit score, and you are trying to avoid personal credit all together. To do this, you start with starter vendors.

These are accounts that will extend net terms and report payments, but they will approve you based on factors other than your credit score. These factors may include time in business, revenue, average balance in your business bank account, or other factors.

How to Find Starter Vendors

The trick is, these types of vendors are not easy to find. They do not advertise themselves as “starter vendors.” They do not make it easy to find out whether or not they report payments to business credit profiles. Business owners need help finding this information.

Here are a few options to get you started:

Grainger

Uline

Marathon

Still, you need more accounts than this reporting before you can build a strong enough business credit score to apply for higher limit accounts.

Check out how our reliable process will help your business get the best business credit cards.

Do Business Credit Cards Affect Personal Credit? They Don’t Have To

How to Build a Strong Business Credit Portfolio With Minimal Effect on Personal Credit

The secret to building a strong business credit profile as fast as possible and with minimal effect on your personal credit, is to work with a business credit expert. A business credit expert makes this whole process faster and easier.

They can help ensure you have your business set up the right way, and guide you toward those starter vendor accounts that will help you initially build your business credit score. They will help you know when you have enough accounts reporting to start applying for higher limit accounts and be approved.

In addition, our business credit experts have the knowledge and expertise to help you find the best accounts to flesh out your business credit portfolio. There is more to this than just building strong business credit with accounts that report. An expert can guide you toward the best vendor accounts for your specific business, whether they report or not.

The best way to start this process with no risk is to have a free consultation with a business credit expert. They can help you figure out where you stand now, and where you need to start so that you can build your business credit portfolio in the most effective and efficient way possible.

The post WARNING: Do Business Credit Cards Affect Personal Credit? They Can… UNLESS You Take These Important and Easy Steps … appeared first on Credit Suite.

Top 5 Tips for How to Get a Startup Business Loan

Are you trying to start a business and wondering how to get a startup business loan? Maybe you think you don’t qualify. Maybe you have been trying but keep getting denied. These tips, including one that almost no one knows about, will help you obtain the funds you need to get your business off the ground.

How to Qualify for a Startup Business Loan No Matter What

Usually, to get a traditional business loan you need good credit, strong cash flow, and collateral. If you are a startup, you may not have cash flow yet. You may have good personal credit, which can help, but it’s unlikely that you have established business credit. Honestly, you may have collateral, or you may not.

However, there are some loan options you can qualify for with just one of these three things.

5.What Are Your Options for a Startup Business Loan?

Tip number one for how to get a startup business loan is to know your options. This is the hardest part. It can be easy to get overwhelmed when you start looking at loan requirements. Most traditional loan options require collateral, cash, and good credit even if you are a startup.

Credit Line Hybrid Financing: Get up to $150,000 in financing so your business can thrive.

The first step in knowing how to get a startup business loan is understanding what your options are based on your specific qualifications. Here are a few ideas to get you started.

Options for Small Business Startup Loans if You Have Collateral

If you are looking for a straight business startup loan, collateral-based loans are going to be the easiest to get. You use your assets as security. As a result, rates are lower, and your personal credit doesn’t have as much of an impact. Of course, collateral can be anything. Still, here are some outside-of-the-box ideas you may not have considered.

Securities-Based Financing

For example, you can use stocks as security to get business financing. In fact, you can borrow as much as 90% of their value. Furthermore, you continue to earn interest on the stocks even as they are pledged as collateral.

401(k) Financing

Your existing 401(k) or IRA can help fund your business as well. This is a unique funding tool known by the IRS as a Rollover for Business Startups, or ROBS. There are no tax penalties, and you still earn interest on your 401(k).

Equipment Financing

Equipment financing is a great way for a startup to get financing to buy or lease new equipment. Use your first and last month’s payments to get approved. However, rates vary widely based on risk factors. The lender will undervalue equipment by perhaps up to 50%. Also, this only works for major equipment. Lenders won’t combine a lot of small equipment.

SBA Loans for Startups

There are a few different SBA programs that can work for startups that have collateral.

7(a) Loans

The Small Business Administration’s 7(a) loan program offers federally funded term loans up to $5 million. Generally, these loans can be used for expansion, purchasing equipment, working capital and more. Banks, credit unions, and other specialized institutions process these loans and disburse the funds.

504 Loans

In addition, 504 loans are available up to $5 million. These funds can buy machinery, facilities, or land. Typically, they are used for expansion, and they work especially well for commercial real estate purchases.

Microloans

In contrast, microloan amounts are smaller, only going up to $50,000. Use them to start a business, purchase equipment, buy inventory, or for working capital. Community based non-profits administer microloan programs as intermediaries, with financing coming directly from the Small Business Administration. Banks do not handle these loans. As a result, many entrepreneurs do not even know they exist.

How to Get a Startup Business Loan Without Collateral?

What if you do not have collateral. In the absence of cash flow or good credit, how can you get the funds you need?

Credit Line Hybrid Financing: Get up to $150,000 in financing so your business can thrive.

You may have to use a guarantor. Simply put, a guarantor is someone who signs the loan with you and agrees to repay the debt if you do not. While traditional guarantor loans are fine, there is an even better option. In fact, with this little known-option for business funding, you can get funds up to $150,000 with 0% interest for up to 18-months!

The best part is, you either need good personal credit (above 680) or a guarantor, not both!

Credit Line Hybrid

The Credit Line Hybrid allows you to fund your business with no collateral and typically very low interest rates. No financials are required. You can usually get a loan of 5x the amount of your highest revolving credit limit account, up to $150,000. You do not have to use a guarantor, but you do need a 680+ credit score to qualify without one.

4. Learn How to Set Your Business Up the Right Way

Have you ever heard the term “fundability?” Fundability refers to a business’s current ability to get financing. For a business to be fundable, it has to have a fundable foundation. This means the way you set up your business is a big piece of how to get a startup business loan.

A fundable foundation includes:

Separate business contact information
EIN
Incorporating
A D-U-N-S Number
Dedicated business bank account
A professional business website with an email address that shares the URL

Infographic

The foundation includes only a fraction of the over 100 factors that affect the fundability of a business. However, none of it matters without the foundation.

3. Do Not Underestimate Business Plan Importance

You need a strong business plan that will grab the attention of the lender. They need to see what you plan to do with the money. They need to know you have a strategy, that you’ve done your market research, and that you have some skin in the game.

Many business loan applications are denied because the business plan is poorly put together or non-existent.

2. Don’t Ignore Your Business Credit Score

Many business owners either do not know that there is such a thing as a separate business credit score, or they grossly misunderstand it. Your business credit score reflects the creditworthiness of your business separate from you as the owner. Unlike personal credit, it does not build passively. You have to be intentional about building business credit.

The first step is building the fundable foundation. That will establish your business credit profile. Then, you have to get accounts reporting your payments to that profile before you will start to build a business credit score.

That is easier said than done, because unlike consumer credit where pretty much all accounts report your payment history, only about 7% of accounts that use business credit to make approval decisions will report payment history to your business credit profile.

There are a few ways to get accounts reporting. One of them is the Credit Line Hybrid.

Credit Line Hybrid Financing: Get up to $150,000 in financing so your business can thrive.

1. Secret Expert Tip…

This tip for how to get a startup business loan is one that very few people know about and even fewer talk about. The best way to get a startup business loan, or any business loan for that matter, is to work with a business credit expert.

How can a business credit expert help? First, they can help you find the funding you need right now. But more than that, they can analyze the current fundability of your business and your business credit profile, and walk you through the steps necessary to establish or improve. Since there are over 100 factors that can impact fundability, this is a huge timesaver. Not only that, but it is helpful to ensure you don’t miss anything. They know what they are doing.

Now that You Know How to Get a Startup Business Loan, Here’s What to Do Next

Why not start at the top and get things off to the best start possible? A free consultation with a business credit expert can point you in the right direction. With an expert guiding you the entire way, you’ll save both time and money, and you will know without a doubt that you are on the right track.

The post Top 5 Tips for How to Get a Startup Business Loan appeared first on Credit Suite.

How to Start a Franchise Business

Starting a business is a major endeavor. You need to perform market research, file for a license, create a marketing plan, and build your brand. One way to shorten the process is to become a franchise business owner.

As a franchise business owner, you can tap into the resources and branding of a large brand—while still maintaining the autonomy to run your own business.

If you’re considering starting a franchise business, there are a few things you should know. First, let’s talk about what a franchise business is.

How Does a Franchise Business Work?

In a franchise business, a franchise owner pays a fee to essentially “rent” a brand name. The franchisee runs the business themselves (or hires someone to run it) and must follow the rules and regulations related to how the brand is used.

For example, many McDonald’s restaurants are franchises, meaning an owner (or group of owners, in some cases) pays McDonald’s to use their brand name, menus, logos, and other business assets.

They run their location, pay McDonald’s to use the name, and keep the remaining profits.

A franchise business is a popular business model because it offers owners the best of both worlds: the support of a large brand and the benefits of owning a business.

A few businesses that offer franchising options include:

7-Eleven
Taco Bell
Great Clips
Ace Hardware

Starting a franchise business should not be taken lightly. There are pros and cons to consider before deciding whether to become a franchisee.

4 Benefits of Starting a Franchise Business

Starting a business gives you more control over your life and income. Unlike starting your own business, however, there are specific benefits to buying into a franchise.

More Support

Starting a franchise business is sort of like playing video games on easy mode. The franchisor offers support in the form of training, materials, process flows, and branding to make it easier to get your business off the ground.

For example, starting a taco shop could require months for menu development, taste testing, logo design, product sourcing, etc. As a Taco Bell franchise owner, however, much of that work is already completed.

Lower Failure Rate

Franchise businesses often have a lower failure rate. When you buy into a franchise, you join a proven business model that works. You also have additional support and business resources that can make a difference in your success.

Built-In Brand Awareness

Building a brand is one of the best things you can do for your business. However, it often takes time and resources. When you buy into a franchise, the branding is already complete. People already know who your brand is and what it represents. This saves you time and creates a built-in customer base you can tap into.

Better Buying Power

In some cases, you may purchase goods at a lower rate. Many franchisors negotiate contracts with vendors for the entire network, allowing you to spend less on goods and services by purchasing in bulk. However, the flip side of these benefits is you may not choose your vendors, and sometimes the costs are higher.

While there are many benefits to starting a franchise business, there are some drawbacks to keep in mind. You’ll pay licensing fees to corporations, which can eat into profits. You’ll also have less control over some aspects of your business. For example, if you own a franchise restaurant, you may have little to say on the menu or which vendors you use.

How to Start a Franchise Business

Now that you understand the pros (and the cons) of starting a franchise business, let’s get down to the details. How do you get started? Here’s what you need to know.

1. Identify a Business Opportunity

The first step in starting a franchise business is deciding which business you want to join. Hundreds of companies offer franchise opportunities: which one is right for you? Here are a few questions to ask yourself.

Do you want an online or in-person business?
What industry are you interested in? There are franchise businesses in travel, restaurant, convenience stores, websites, health and wellness, business, and much more.
How much money do you have to invest? Before selecting a business, consider the cost.

Once you answer those questions, start looking for franchise opportunities. For example, if I am interested in a restaurant franchise and like sports bars, I might Google “best sports bar franchises.” As you can see, there’s plenty of options.

Here are a few other searches you can try. Feel free to swap out key terms to find an opportunity that works for you.

online franchise businesses
travel franchise businesses
senior care franchise
cheap franchise businesses

Make a list of your top five franchise businesses, then compare what they offer. How much are licensing fees? Is it a flat fee or a portion of your sales? What resources do they offer? Do they offer financing? What happens if you don’t end up keeping the franchise?

Compare all the features and consider all the drawbacks before making a decision.

2. Research Current Owners and Potential Competitors

By now, you should have one or two top franchise choices. It’s time to dig deeper. How many current franchise owners are there? What are their annual revenue and profits?

What competition will you face? Consider both online and in-person competition. For example, suppose you want to franchise a tax company. In that case, you need to consider how you’ll stand out from online companies like TurboTax and in-person accounting firms in your physical location.

3. Determine Market Interest

Sometimes buying into a franchise provides a false sense of security. You see how much other franchise owners make and think that is the norm. Keep in mind markets can vary by location and the franchisor has a vested interest in highlighting their most successful franchisees.

Whether you are looking to purchase an online or in-person franchise, make sure there is enough room in the market for additional businesses. If the market is saturated, you may struggle to make sales no matter how much people trust the brand.

4. Research Startup Costs

The cost to start a franchise business can range drastically from a few hundred bucks to set up a website to millions to pay franchise fees and build a store. Usually, franchisors will list the average cost on their website.

However, sometimes there are hidden fees you’ll need to keep in mind:

Travel costs: Most companies require you to come to their headquarters and learn more about their brand and company culture. Generally, you’ll foot this bill.
Training costs: You may be required to train on location in a store for several weeks. This can cost time and money, since you won’t have a paycheck.
Local fees and taxes: Your city or state might charge fees to start a business, get approvals, acquire building permits, etc.
The initial fee: Most franchisees pay a yearly fee (called the royalty fee) based on sales. However, there is likely a one-time initial fee that might range from $500 to $50,000.

5. Create a Business Plan

You’ve researched all your options and have decided on a business to join. Congrats! Now it’s time to create a business plan. This is one of the most crucial steps, so take the time to create a solid business plan that covers all the bases.

According to the Small Business Association, a business plan should include:

Executive summary: What your company is and what makes it different.
Company description: Provide detailed information about the problem your company solves and who you plan to serve.
Market analysis: Who your target audience is and how your business stands out from the competition.
Management plan: How your business will be structured and who will be in charge of what facets of the business.
What you offer: Are you offering products or services? What is your product life cycle and how will you handle things like intellectual property?
Funding: How will you pay for the franchise fees, labor costs, and the equipment or products you need to get started?
Financial projections: Estimate the revenue for your business. Include a prospective outlook for the next five years. If you plan to take out loans, how will you pay them off?
Marketing and sales plans: How will you market your business? Do you have a website? How will you increase sales over time? You can also get help from a digital marketing agency like NP Digital.

6. Form an LLC or Corporation

The next step is to create your business entity. The type of business you create might depend on the franchisor you work with. Some might require an LLC or corporation. An LLC protects your personal assets from liability, while a corporation is a tax structure.

You might also choose sole proprietorship; however, that can leave your home and other assets at risk. This guide will walk you through the different options, but I suggest meeting with a tax or legal professional to decide if the structure is right for you.

Keep in mind city and state laws may impact which structure is right for you.

7. Choose an Initial Location

The final step is to find a location for your franchise business. If you are online, the location will likely be a website, but you might elect to have office space as well. If your franchise business has a physical location, make sure to compare sites to find an affordable one that gets plenty of foot traffic.

Don’t just consider the location’s current pros and cons. Research future developments as well. An ideal location today might not be if a bypass is installed right next to you directing traffic away.

On the other hand, a location that is just OK today might gain attention if a large shopping center is built next door. (Just remember that sometimes development plans fall through, so don’t choose a terrible location based on possible plans.)

Frequently Asked Questions About Starting a Franchise

How much money do I need to start a franchise business?

The cost to start a franchise business varies by business. Some only cost a few hundred dollars, while starting a McDonald’s franchise costs between $1 and $2 million.

How much do franchise owners make per year?

It varies by business. The average is usually between $50,000 and $70,000 per year.

Can I start a franchise business for free?

Not entirely, no. The franchisor generally requires an initial payment before you can open your business. If you don’t have capital, consider bringing in an investment partner.

How do you start a franchise business?

1) Identify a business you want to work with. 2) Research current owners and the competition. 3) Determine market interest. 4) Research startup costs 5) Create a business plan. 6) Form an LLC or corporation. 7) Choose a location. 8) Create a marketing plan.

What is the most profitable franchise?

According to Entrepreneur, the most profitable franchises are Taco Bell, Dunkin’, and The UPS Store.

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Summary of Franchise Business Guide

Starting a franchise business is not without risks. However, the added support and access to a built-in customer base make it a tempting model for many business owners.

If you are comfortable working with a team and appreciate the support and other benefits of being a franchise owner, it can be an ideal way to build your own business.

Remember online marketing is crucial to the success of any business in 2021. Understand the benefits of SEO and social media. Study up on practices like paid advertising that can help you reach a wider customer base.

Finally, don’t be afraid to hire a professional to handle your marketing. They can put their expertise to work while you focus on building your franchise business.

Are you considering starting a franchise? What challenges are you facing?

The post How to Start a Franchise Business appeared first on #1 SEO FOR SMALL BUSINESSES.

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How to Start a Franchise Business

As a franchise business owner, you can tap into the resources and branding of a large brand—while still maintaining the autonomy to run your own business.

If you’re considering starting a franchise business, there are a few things you should know. First, let’s talk about what a franchise business is.

How Does a Franchise Business Work?

For example, many McDonald’s restaurants are franchises, meaning an owner (or group of owners, in some cases) pays McDonald’s to use their brand name, menus, logos, and other business assets.

They run their location, pay McDonald’s to use the name, and keep the remaining profits.

A franchise business is a popular business model because it offers owners the best of both worlds: the support of a large brand and the benefits of owning a business.

A few businesses that offer franchising options include:

7-Eleven
Taco Bell
Great Clips
Ace Hardware

Starting a franchise business should not be taken lightly. There are pros and cons to consider before deciding whether to become a franchisee.

4 Benefits of Starting a Franchise Business

Starting a business gives you more control over your life and income. Unlike starting your own business, however, there are specific benefits to buying into a franchise.

More Support

Lower Failure Rate

Built-In Brand Awareness

Better Buying Power

How to Start a Franchise Business

Now that you understand the pros (and the cons) of starting a franchise business, let’s get down to the details. How do you get started? Here’s what you need to know.

1. Identify a Business Opportunity

Do you want an online or in-person business?
What industry are you interested in? There are franchise businesses in travel, restaurant, convenience stores, websites, health and wellness, business, and much more.
How much money do you have to invest? Before selecting a business, consider the cost.

How to Start a Franchise Business - Start looking for franchise opportunities

Here are a few other searches you can try. Feel free to swap out key terms to find an opportunity that works for you.

online franchise businesses
travel franchise businesses
senior care franchise
cheap franchise businesses

Compare all the features and consider all the drawbacks before making a decision.

2. Research Current Owners and Potential Competitors

By now, you should have one or two top franchise choices. It’s time to dig deeper. How many current franchise owners are there? What are their annual revenue and profits?

3. Determine Market Interest

4. Research Startup Costs

However, sometimes there are hidden fees you’ll need to keep in mind:

Travel costs: Most companies require you to come to their headquarters and learn more about their brand and company culture. Generally, you’ll foot this bill.
Training costs: You may be required to train on location in a store for several weeks. This can cost time and money, since you won’t have a paycheck.
Local fees and taxes: Your city or state might charge fees to start a business, get approvals, acquire building permits, etc.
The initial fee: Most franchisees pay a yearly fee (called the royalty fee) based on sales. However, there is likely a one-time initial fee that might range from $500 to $50,000.

5. Create a Business Plan

According to the Small Business Association, a business plan should include:

Executive summary: What your company is and what makes it different.
Company description: Provide detailed information about the problem your company solves and who you plan to serve.
Market analysis: Who your target audience is and how your business stands out from the competition.
Management plan: How your business will be structured and who will be in charge of what facets of the business.
What you offer: Are you offering products or services? What is your product life cycle and how will you handle things like intellectual property?
Funding: How will you pay for the franchise fees, labor costs, and the equipment or products you need to get started?
Financial projections: Estimate the revenue for your business. Include a prospective outlook for the next five years. If you plan to take out loans, how will you pay them off?
Marketing and sales plans: How will you market your business? Do you have a website? How will you increase sales over time? You can also get help from a digital marketing agency like NP Digital.

6. Form an LLC or Corporation

Keep in mind city and state laws may impact which structure is right for you.

7. Choose an Initial Location

Frequently Asked Questions About Starting a Franchise

How much money do I need to start a franchise business?

The cost to start a franchise business varies by business. Some only cost a few hundred dollars, while starting a McDonald’s franchise costs between $1 and $2 million.

How much do franchise owners make per year?

It varies by business. The average is usually between $50,000 and $70,000 per year.

Can I start a franchise business for free?

Not entirely, no. The franchisor generally requires an initial payment before you can open your business. If you don’t have capital, consider bringing in an investment partner.

How do you start a franchise business?

What is the most profitable franchise?

According to Entrepreneur, the most profitable franchises are Taco Bell, Dunkin’, and The UPS Store.

Summary of Franchise Business Guide

Starting a franchise business is not without risks. However, the added support and access to a built-in customer base make it a tempting model for many business owners.

If you are comfortable working with a team and appreciate the support and other benefits of being a franchise owner, it can be an ideal way to build your own business.

Finally, don’t be afraid to hire a professional to handle your marketing. They can put their expertise to work while you focus on building your franchise business.

Are you considering starting a franchise? What challenges are you facing?

Substack Is Hiring Engineers to Build a Better Business Model for Writing

Article URL: https://substack.com/jobs?utm_source=hn&utm_content=eng

Comments URL: https://news.ycombinator.com/item?id=27950812

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The Disadvantages of Working from Home: 5 Things to Consider When Using Your Home Address for Your Business

Working from home has many advantages. One of the easiest ways to start a business is to start it from your own home. It’s the most natural way to start for many. Whether you are baking, woodworking, offering a service, or anything else, doing so out of your house has many advantages. What isn’t discussed as often are the disadvantages of working from home.

5 Surprising Disadvantages of Working from Home

Most business owners just assume that if they are running their business from home, their home address and their business address will be one and the same. That’s fine, but what if you decide to move out of your home? Changing business address can cause issues. This is just one of many surprising disadvantages of working from home.

Disadvantages of Working from Home #1: Your Home May Not Be Conducive to Productive Work

A home may not necessarily be well equipped to handle working. You need a workspace that will help you be productive. This will be different for everyone. But, consider that you at least need a room with a door you can close. Drawing boundaries between home life and work life can be hard.

Learn more here and get started with building business credit with your company’s EIN and not your SSN.

Managing time can be harder when working from home as well. It can be easy to work all day when you are at home, or not work enough due to “home” distractions. It’s hard to get people to respect your time and boundaries. Also, isolation and depression are not uncommon.

Disadvantages of Working from Home #2: You May Not Be Allowed to Run Your Business From Your Home

In some situations, you may not be allowed to run your business from your home. If you rent, you will need to check your lease to make sure there are no issues. Whether you rent or own, you need to check zoning requirements. Also, agencies like the Health Department and the FDA have guidelines related to running certain types of businesses from your home.

Disadvantages of Working from Home #3: Home Address on Public Record

Many people worry about their home address as their business address. They feel it is unsafe, so they turn to a PO Box or an UPS Box. However, that can make it difficult to get funding. Lenders require a physical address.

This is a unique disadvantage of home-based businesses. Even home based businesses need funding for a number of things:

Supplies
Inventory
Equipment (for jewelry making, woodworking, computer/ office equipment, etc.)
Even working capital

One option is to use a virtual address. Be aware however, that some lenders will not accept those either. The truth is, if someone wants to find your home address, it’s easy enough regardless of whether you use it as your business address or not. In the end, to get funding for your business you are going to need to use a physical business address where you an receive mail.

Learn more here and get started with building business credit with your company’s EIN and not your SSN.

Disadvantages of Working from Home #4: Changing Your Business Address Later Can Cause Problems

You may think you can get by with using your personal address now, and just change it later. That’s not a good idea. If you think about it, your business address goes everywhere. For example:

All legal documents
Licences
Marketing materials
Your website
Insurance papers
Everywhere!

The longer you wait, the more places you will have to remember to change it. It is a bigger deal than you may think if you miss one. If lenders start looking into your business and see your business address is listed differently in different places, it can cause unnecessary issues. It brings up fraud concerns.

A bank will not take the time to try to figure out all the different ways a business may be listed. Even something as simple as using Street vs St, or using an ampersand in one spot and the word “and” in another can cause issues. So you can imagine using your home address in one spot and a separate business address in another will definitely cause problems.

That doesn’t mean that if you move your business out of your home you have to keep your home address. Just be aware that you will need to make sure the address is changed everywhere.

Disadvantages of Working from Home #5: Legal Issues

There are a number of legal considerations that you have to think about when it comes to running a home based business. For example, even if zoning laws allow you to run your business from your home. You need to check out what requirements those laws lay out. Some cities have regulations regarding foot traffic. Some even regulate yard sign use for advertising. And if you have an Homeowners Association (HOA) you may need their permission as well.

Learn more here and get started with building business credit with your company’s EIN and not your SSN.

Some cities limit the number of employees a home based business can have. Some even regulate the number of customers that can come to your door. You’ll need to check with your local city officials to determine what if any regulations apply to you. And figure out what licences and permits you need to operate.

Consider the tax issues as well. While you can deduct some expenses when it comes to home-based businesses, it can get complicated. You need to make sure you thoroughly understand the home business deduction on the front end and plan accordingly.

Insurance needs to be considered as well. If you have employees or customers coming in and out, you need to think about what would happen if they were injured. Will homeowners’ insurance cover it? Often you will need to purchase a separate policy or a rider. All insurance needs to be in place on the front end. Be sure it has the proper business address on it!

Avoid Many Disadvantages of Working From Home

Nothing is perfect. Running a business from your home is no different. However, you can avoid many of the disadvantages of working from home by building fundability from the beginning. Not only will it help with legal issues, but it makes a bigger difference than you may think when it comes to funding.

The best way to start building fundability, whether you own a home-based business or run a business from a different location, is to work with a business credit expert. Contact us today for a free consultation.

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