Tag: Business

5 Ways to Share the Love With an Air Miles Business Credit Card

There are so many options for business credit cards out there, it can be completely overwhelming to figure out which ones will work best for your business.  First, you have to figure out what you actually qualify to get.  Then, you have to determine if you need cash back rewards, dining rewards, an air miles business credit card, hotel rewards, or whatever other option you may have. 

Love Your Business and Yourself With an Air Miles Business Credit Card

If your credit is good, you are going to have lots of rewards options.  The thing is, you want to pick the card with the best rates and terms that has the most useful rewards option for you. Sometimes it’s a no brainer, and sometimes it’s not.  If you travel a lot for business, an air miles business credit card may be the perfect way to show your business some love. 

Here are 5 ways to love your business and share the love with air miles you earn from your business credit card. 

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

  1. Save on Business Travel

It seems obvious, but many business owners do not realize how much of a savings this can be if used properly.  If you use your card frequently and earn the most miles possible, you could feasibly save thousands of dollars a year in business travel.  Of course, you would need to determine if you travel enough to make this the most profitable choice when compared to whatever other choices you have.  If you do not travel for work frequently but you do frequent business dinners, dining rewards may work better. 

If you travel often though, the savings from an air miles business credit card could be significant.

  1. Save on Personal Travel

Here is an exciting truth.  You do not have to use air miles from a business credit card for business travel.  That means you can earn air miles on business purchases and then use them for personal travel.  

If you do a lot of personal travel, or if you want to travel, this is a way you can use an air miles business credit card to show yourself some love.  Business expenses are typically large enough to earn lots of miles, which can relate to major vacation savings for you.  So, even if you do not travel a lot for business, this could be a good option. 

  1.  Get New Clients

Here’s another tip.  You do not have to use miles earned from an air miles business credit card on yourself.  You can use them to purchase a ticket for someone else. Therefore, if you need to fly in a potential client or customer for a meeting, you can cover that expense with air miles. 

This can happen in a couple of ways.  You can transfer air miles to someone else, but there are usually limits on how many, and there are fees. You can also purchase a ticket for someone else directly through your air miles account.  This usually will be the option that offers the most savings, but do your research to be certain it works best in your situation. 

  1. Keep Current Clients

In danger of losing a current client? Need to show them some love to get them to stick around? Air miles and free travel can be a great incentive.  Or, if you just want to show some good will toward all your customers in general, you could do a giveaway.  Offer a round trip ticket for two for Valentine’s Day to a lucky winner!

  1. Reinvest

Now, what do you do with all that savings? Reinvest in your business!  Every penny you save is money you can put back into your business to grow and expand. 

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

What Are The Best Air Miles Credit Cards ? 

It’s hard to say.  There are tons to choose from. The one that will work best for you and your business will depend on a number of factors.  You need to research all of your options and make an informed decision.  Remember also that limits, fees, interest rates, bonuses,  and other details can change frequently, so be sure to check with your credit card company now and then to see where you stand. 

Here are some options to consider. 

Capital One ® Spark® Miles for Business

The Capital One ® Spark® Miles for Business card has an initial annual cost of $0 for the first year. After that, it rises to $95. The regular APR is 20.99%.  Of course, this is variable due to the prime rate. 

Amazingly, you can get unlimited double miles on all purchases, with no restrictions. Earn 5x miles on rental cars and hotels if you book via Capital One Travel.

Furthermore, you can get an introductory bonus of 50,000 miles. Of course, you do have to meet the minimum spend requirement of $4,500 in the first 3 months after opening the account.However, this is a fairly low hurdle compared with the spending that can be required from other credit cards.

Ink Business Preferred ℠ Credit Card

Another great option is the Ink Business Preferred ℠ Credit Card. You pay a yearly fee of $95, and the regular APR is 15.99- 20.499%, variable. Sadly, there is no introductory APR deal.

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

Also, get 3 points per dollar of the first $150,000 you spend with this card. That includes purchases on travel, shipping, internet, cable, and phone services. Plus, it includes marketing purchases made with social media sites and search engines. 

You can get 25% more in travel redemption when you redeem for travel via Chase Ultimate Rewards. 

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

For no yearly fee while still getting travel rewards, check out this card from Bank of America. It has no yearly fee and a 0% introductory APR for purchases throughout the first 9 billing cycles. Afterwards, its regular APR is 12.24- 22.24% variable.

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

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

Get unlimited 1.5 points for every $1 you spend on all purchases, anywhere, each time, no matter how much you spend.

Also earn 3 points per every dollar spent when you reserve your travel with the Bank of America ® Travel Center. There is no limit to the number of points you can get and points do not expire.

Even better, you can earn up to 75% more points on every purchase if you have a corporate checking account with Bank of America and qualify for Preferred Rewards for Business.

An Air Miles Business Credit Card Is a Great Way to Show Your Business, and Yourself, Some Love

If you qualify for an air miles business credit card, it can be a great tool.  It’s a way to handle business expenses and save money at the same time. However, this only works if you tend to travel frequently, either personally or for business.  Or, of course, if you can use the miles as an incentive of some sort. 

If you do not qualify, it may be time to do something about that. Try asking a business credit expert for help.  You will be glad you did. 

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6 Things You Need to Know About Alternative Business Lending

Alternative business lending rose from the ashes of the 2008 crash. This was a time when lenders were giving almost no one money.  It was virtually impossible to get a loan of any sort for any reason. Business loans were extremely hard to come by, and when you could get one, rates were terrible. 

Alternative Business Lending: Your Questions Answered

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

As a result, alternative lenders began to pop up. Funding Circle is credited with being the first, but others soon followed. That means this is a fairly new game.  It can be hard to figure out if it is one you should play. This should help. 

  1. What is alternative business lending? 

alternative biz lending Credit SuiteThis type of lending is offered through private companies, not traditional financial institutions like banks and credit unions. They can be an option for those who do not qualify or who do not have the time to wait for a bank loan. These lenders explore other ways of verifying creditworthiness and other forms of collateral. 

Collateral may include credit card transactions, open invoices, equipment, real estate and more. 

  1. How much is alternative business lending?

This is a question asked by many when they first start considering alternative lending options.  The truth is, it depends. That’s the case with any loan.  There are fees, and interest is a factor.  Typically interest is higher with alternative lending. But if you can’t get anything else, you can’t really compare.  

  1. What are the pros of alternative business lending? 

So, why choose alternative lending? Well, if you can’t get a traditional business loan you may need to consider this option. However, there are other reasons as well. For example, alternative lenders typically fund much faster. So, if you need fast cash, this could be the way to go. 

Also, the application process is usually faster and easier. Often you can apply online in a matter of minutes. Repayment terms are usually more flexible as well. 

  1. What are the cons of alternative lending?

As already mentioned, interest rates with alternative loans are usually higher. There is also a breeding ground for scammers in this industry.  It’s important to know how to recognize predatory lending practices to avoid being taken advantage of.

  1. Is alternative business lending right for you? 

If something is blocking you from being approved for a loan through a bank or credit union, then the answer to this question is probably yes. It is highly likely that this is a type of lending that can work well for your business. This is especially true if you have invoices, accept credit card payments, or need to finance equipment. Common types of alternative loans include: 

  • Merchant cash advances
  • Invoice financing
  • Equipment financing
  • And  real estate financing

There are other options as well, and they vary between lenders. These are some of the most 

common however. 

  1. A credit expert can help you find the best alternative business funding for your business. 

Now you need to figure out which lender and which products from that lender will work best for your specific business needs and goals.  The best choice is to work with a business credit expert.  This is someone that can help your maneuver through the process in the most effective and efficient way.  That will help immediately.  Beyond that, into the long-term, an expert in business credit can help you figure out why you are being denied funding, and help you fix the problem. 

Where should  you start when looking for alternative lenders? Here are some options to consider. 

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

Fundbox

Fundbox offers a line of credit rather than a loan.  Still, it is a great funding option because there is no minimum credit score requirement. 

 They offer an automated process that is super-fast. Repayments are automatic, meaning they draft them electronically, and they occur on a weekly basis.  One thing to remember is that you could have a repayment as high as 5 to 7% of the amount you have drawn currently, as the repayment period is comparatively short.  This means you need to be sure you have enough funds in whatever account you connect them to so that it can cover your payment to Fundbox  each week. 

 BlueVine 

You will find with most any online lender, they often offer options more similar to invoice factoring and lines of credit.  This is because those options present fewer risks than straight term loans.  BlueVine is no different. 

Upstart

Upstart is an online lender that uses a completely innovative platform for loans.  The company itself questions the ability of financial information and FICO on their own to truly determine the risk of lending to a specific borrower.  Instead, they choose to use a combination of artificial intelligence (AI) and machine learning to gather alternative data for use in making credit decisions.

This may include such things as mobile phone bills, rent, deposits, withdrawals, and even other information less directly tied to finances.  The software they use learns and improves on its own. You can use their online quote tool to play with different amounts and terms to see the various interest rate possibilities.  

Upstart’s innovative platform makes them one to research for sure. 

Fora Financial 

Founded in 2008 by college roommates, online lender Fora Financial now funds more than $1.3 million in working capital around the United States. There is no minimum credit score, and there is an early repayment discount if you qualify. 

 OnDeck 

Obtaining financing from OnDeck is quick and easy. First, you apply the OnDeck website and receive your decision once application processing is complete. If you receive approval, your loan funds will go directly to your bank account. The loan amounts range up to $500,000.

 Lending Club

Popular online lender Lending Club offers term loans.  You can get a quote in less than 5 minutes. Funds are available in as little as 48 hours if approved. There are no prepayment penalties.

Kiva 

Kiva is an online lender that is a little different. For example, the interest rate is 0%.  That means even though you have to pay it back, it is absolutely free money. They don’t even check your credit. However, there is one catch.  You have to get at least 5 family members or friends to throw some money in the pot as well. In addition, you have to pitch in a $25 loan to another business on the platform. 

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

Accion 

If your personal credit is okay, Accion may be a good fit for small business startup loans. It is a microlender, a nonprofit, that offers installment loans to both startups and already existing businesses. 

 Credibly 

Credibly is also a good option for business loans if you are already generating some revenue. They offer short term loans for both business expansion and working capital. You must be in business for at least 6 months to qualify, and Credibly will approve loans to those with credit scores as low as 500. 

Alternative Business Lending Is a Great Tool, but Not a Forever Answer

I mean, it could be a forever answer, but there is a better way.  If you work to build up your fundability, you can get a lot of perks offered by alternative business lending with the interest rates offered by traditional loans.  You could have the best of both worlds.  It takes time to get there however, and alternative loans are the best option for many in the meantime. 

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From Set Up to Business Start Up Loans: What You Need to Know About Starting a Business

If you are thinking about starting a business, there is a lot you need to know. Our business experts can walk you through the entire process to ensure you have the fundability you need to succeed. From how to set up your business as a fundable entity to making sure you have what lenders are looking for when it comes to approving start up business loans, here is what you need to know. 

How to Get Start Up Business Loans and Other Funding

If your business isn’t fundable, you will not get startup business loans, plain and simple. Of course, if you are a start up you aren’t going to have a ton or revenue or business credit history.  So, what can you do to ensure you have a fundable business that can get the money needed to get up and running? 

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

The Set Up, and Why it Matters

Fundability starts in the very beginning.  How you set your business up can make or break your ability to get business start up loans.  Here’s why. Lenders want to see that your business is a stand alone entity, fundable on its own apart from you as the owner. It lends credibility to your business as one that is strong and able to survive on its own merits.

start up loans Credit SuiteTo start this process, you need to make sure your business has its own name and contact information. Do not use your own phone number,  address, or email address. You also need to apply for an EIN. It’s free on the IRS website. This is an identifying number for your business that’s similar to an SSN for an individual.

After that, it is vital that you incorporate. Choose whichever options works best for your budget and liability needs, S-corp, LLC, or corporation.  But, you must do it. It makes all the difference when applying for business start up loans. 

Then, you need to have a separate, dedicated business bank account. It further lends credibility to your business as one that is legit, and there are a number of other benefits that will serve your business well in the future.  For now, just know it is preferred by lenders. 

Business Plan

If your business is properly set up, you will need a business plan. Most business loan applications have a place where you can just fill in the blanks for this part, but that is not what you want to do. You need a professional, well put together business plan that shows you know what you are doing with the money you are asking for. 

You can find templates online, including at SBA.gov.  However, it’s even better if you can hire a professional business plan writer. You will also likely have to hire other professionals to help you complete each part of the business plan. 

For example, you will need a marketing specialist to help you with the market research and an accountant to help with the forecast and other financial sections. The better your business plan presentation is, the better off you will be. 

Business Start Up Loans and Other Funding

Ok, so now for the nuts and bolts. You cannot start a business without money. If your business is properly set up and you have a solid, professional business plan, you have given yourself a great start. It’s time to find the money. 

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

Business Start Up Loans

There are a few different options when it comes to business start up loans. Traditional loans are the most common and typically the first on the list with new business owners. It’s just what everyone knows. If you want to start a business you go to the bank and get a loan.  That works for a lot of people. 

Generally these are all secured loans. That means you put up collateral. However, if you have fabulous personal credit, you might be able to get an unsecured business start up loan. The thing is, you may not want to. You are almost always going to get better rates and terms if you use collateral. 

SBA Loans

For most, SBA loans are going to be the way to go.  These are business loans that have a government guarantee. Because of this, lenders are able to offer them to business owners with lower credit scores than they would otherwise, and the interest rates tend to be better as well. 

Credit Line Hybrid

This is a great option for those needing business start up loans for a number of reasons. First, if security is an issue, this is totally unsecured business financing. You do not put up any collateral, and you can get up to $150,000. It is also no-doc financing, meaning you do not have to provide banks statements or financials of any kind. 

All you need is to have a personal credit score of at least 680 and meet a few other requirements. However, if you do not meet those requirements, you can take on a credit partner that does. You can use the credit of a friend or family member to apply for the credit line hybrid, and the payments will still report to your business credit report, thus building your business credit score. 

Investors and Crowdfunding

Even though business start up loans are where most new business owners head first for funding, they are far from being the only way.  Of course corporate investors are an option. Similar to a business plan, you need a pitch. Angel investors are an option as well. While debt free and effective, neither of these are particularly easy to come by. 

 Another option when it comes to looking for investors is Crowdfunding. It’s not a huge success rate, but there are some businesses that are able to get all they need from this form of funding. You’ll never know if you don’t try. 

Help Through the Weeds

The biggest issue when it comes to business start up loans, and really any other part of starting a business, is getting through the weeds. It can be overwhelming to try and figure out what you need to do to qualify for the funding you need, and then figure out what funding will actually work best for you. A business credit expert is vital to this process. While it is possible to do it alone, it is well worth any expense to get things done not only faster, but the right way to ensure nothing is missed. 

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

Business Start Up Loans: Fundability Matters

The truth is, fundability matters regardless of the type of start up funding you use. The reason is, you are likely going to need to access funding of some type throughout the life of your business. If your business is not fundable, you will not be able to get it. So, the best option is to work with a business credit expert now, to get you on the path to fundability while helping you find business start up loans and other types of start up funding to get you up and running. Building fundability and business credit takes knowledge and intentionality. Don’t try to do it alone. You don’t have to. 

The post From Set Up to Business Start Up Loans: What You Need to Know About Starting a Business appeared first on Credit Suite.

5 Steps to Get a Business Credit Card, Bad Credit or Not

If you have bad personal credit, you may find yourself struggling to get a business credit card. The key to getting a business credit card, bad credit or not, is business credit. 

You Can Get a Business Credit Card, Bad Credit Not Being an Issue

You’re likely aware business credit is a good thing.  You know you need it to help you fund your business.  But do you know how it helps you specifically get credit cards, even if you have bad personal credit? Furthermore, do you know how to get it? 

How Do You Get Business Credit? 

Business credit doesn’t just happen like personal credit does.  You have to work to build business credit intentionally. While not hard, it is a process, and a time consuming one at that. The sooner you start the better, especially if you need a business credit card, bad credit being an issue. 

Business Credit Card Bad Credit: Separation is Key

First thing’s first. You have to establish your business as an entity separate from yourself the owner. This means not using your own name or address. That doesn’t mean you have to get a separate phone line, or even a separate location.  

You do need separate contact information however.  You can get a business phone number pretty easily that will work over the internet instead of phone lines.  In addition, the phone number will forward to any phone you want it too so you can simply use your personal cell phone or landline if you want.  Whenever someone calls your business number it will ring straight to you. 

You can use a virtual office for a business address. This is a business that offers a physical address for a fee, and sometimes they even offer mail service and live receptionist services.  In addition, there are some that offer meeting spaces for those times you may need to meet a client or customer in person. 

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

Business Credit Card Bad Credit: EIN not SSN

The next thing you need to do is get an EIN for your business.  This is an identifying number for your business that works in a way similar to how your SSN works for you personally.  Some business owners used their SSN for their business. This is what a lot of sole proprietorships and partnerships do.  However, it really doesn’t look professional to lenders, and it can cause your personal and business credit to get all mixed up.   You can get one for free from the IRS.

This step is vital.  When you apply for a business credit card, bad credit can get in the way mainly because your SSN signals a look at your personal credit.  If you use your EIN instead of your SSN, the lender will only be seeing the credit attached to your business. 

Business Credit Card Bad Credit: Incorporation is Not Optional

Incorporating your business as an LLC, S-corp, or corporation is necessary for separation of business from the owner, and many other things. .  It lends credence to your business as one that is legitimate. It also offers some protection from liability. 

Which option you choose does not matter as much for these purposes as it does for your budget and needs for liability protection.  The best thing to do is talk to your attorney or a tax professional.  

Business Credit Card Bad Credit: Separate Bank Account

You have to open a separate, dedicated business bank account.  There are a few reasons for this.  First it helps solidify the separation between yourself and your business.  Also, it will help you keep track of business finances. This is important for tax purposes. 

There’s more to it however.  There are several types of funding you cannot get without a business bank account.  Many lenders and credit cards want to see one with a minimum average balance.  In addition, you cannot get a merchant account without a business account at a bank. That means, you cannot take credit card payments.  Studies show consumers tend to spend more when they can pay by credit card.

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

Business Credit Card Bad Credit: Starter Vendors

Now, once you have these things in place,  you need to get accounts that will report your payments to the business credit agencies. It sounds easy enough, but the catch is, you have to find vendors that will extend credit without you first having credit. 

We call these vendors starter vendors.  They will extend net terms on invoices with little requirement. They don’t check credit. Typically, they require a certain number of days in business, a minimum average balance in a business bank account, minimum annual revenue, or some combination of these things. 

Extending the credit isn’t enough however.  There are some that do this, but there are far fewer that will actually report those payments.  You need vendors to report payments to the business credit reporting agencies, thus building your business credit score. 

The Snowball Effect

Of course you are wondering what any of this has to do with applying for a business credit card, bad credit being in the way. Here’s how.  Once you have several of these starter vendor accounts reporting, your score will be strong enough to support store credit. 

A business store account is usually issued for that specific store or website specifically.  Their limits are usually on the lower side as well.  However, after you get a few of them and use them responsibly. Your score will grow even strong. These are cards from places like Home Depot, Staples, or Best Buy. 

Then, you should qualify for fleet credit. These are cards from places like Shell that are used specifically for gasoline and automotive repair and maintenance.  

After a few of those are reporting your consistent, on-time payments, you should have a strong business credit score and be able to apply for standard business credit cards that are not limited by where you use them or what you use them to buy. By using your EIN and not your SSN, you can get a business credit card, bad credit on your personal credit report and all. It’s all a big snowball effect. 

business credit card bad credit Credit Suite

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

In the Interim

In the meantime, you can give your business credit building efforts a kickstart with a card like the Brex card for startups.  It  is one of the few true options if you are looking for a business credit card, back credit not being an issue.  Even a FICO as low as 300 may qualify.  There is no annual fee, and you can apply with your EIN rather than your SSN.  There is no personal guarantee requirement. 

The only catch is, not all industries qualify, and some industries require more paperwork than others.

You could also try getting accounts that you already have a relationship with to report to the business credit reporting agencies. This could be vendors you work with already. Maybe ask them if they will consider net terms and reporting payments. If you already make your payments consistently on time, they may be willing to do so without a credit check. 

You could also consider asking utilities that you already pay regularly to report your payments.  They may say no. They don’t have to do it. But they might, and if they do it can only help your business credit grow faster. 

A credit line hybrid can be another great option to help speed things along. You have to have a 680 or better personal credit score, but you can take on a credit partner if you don’t meet that. The account still reports to your business credit, so you can keep building your score. And, you can get up to $150,000 unsecured financing for your business. 

An Expert Can Help You Through the Steps 

It sounds easy enough to do all of this on your own.  However,  there are some steps that are easier than others. Specifically, it can be very difficult to find starter vendors that will report to your business credit. For this and other difficult steps, it can be very helpful to have a business credit expert help you out. It’s definitely worth considering. 

 

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How to Recognize Predatory Practices in Business Loan Companies, and How to Get Help

The world of business loan companies is full of predatory lenders.  If you are desperate for business funding, it can be easy to take the bait and fall into their trap. You need to know how to tell predators from legit creditors, especially if you need to veer away from traditional financing.  You may think you know what to look for, but there are some predatory secrets that a lot of business owners are not privy to. 

How to Avoid Predatory Lenders When Looking for Business Loan Companies

It can be helpful to work with a business credit expert. Not only can they steer you toward responsible lenders, but they can also help you choose the type of funding that will work best for your needs.  A good one will help you build business credit at the same time.

Still, you need to know the signs of a predatory lender for yourself.  If you do not, you will not even be able to tell if you are working with a good business credit expert, or not.  

Signs of a Predatory Lender

Can you tell the difference between legit creditors and predatory lenders? 

According to Investopedia:

“Predatory lending benefits the lender and ignores or hinders the borrower’s ability to repay a debt. These lending tactics often try to take advantage of a borrower’s lack of understanding concerning loans, terms, or financial literacy.”

Predatory lending when it comes to business loans is becoming an increasingly prevalent problem

How do you keep yourself from wading off into shark infested waters?

business loan companies Credit Suite

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

Avoid Business Loan Companies That Focus on Monthly Payment Rather Than Actual Loan Amount

They may insist on one large payment at the end of the term with only interest payments being made each month until that point. This is known as a balloon payment. In business lending, this can be useful if you are waiting on large sums of money at the end of the contract to repay the loan, so it isn’t necessarily a deal breaker. However, you do need to know that your payments are only paying interest and not reducing principal.

Recognize if this is really the type of loan that you need. Lenders should always be willing to disclose your total loan amount and terms. You should not have to beg for this or search for it. Lenders that focus only on the payment may be sketchy.

There are many things they can do to make a monthly payment lower, like extending the loan period, adding a large payment at the end (a balloon payment), or making adjustments to loan terms. All of these things can make your monthly payments look low, while in reality you are getting stuck with a bad loan. 

Note that while a balloon payment should be an automatic deal breaker, insistence on a balloon payment is an extra red flag. 

Good Business Loan Companies Will Not Add Unnecessary Extras Without Your Knowledge

Another common practice of predatory lenders is adding extras onto the loan. These are usually things the borrower does not need. Furthermore, the borrower will not even know they are there. The most common “extra” seems to be insurance products that do not offer any benefit.

Business Loan Companies and Confessions of Judgement

New York plays a unique role in the world of predatory lending. Understanding this can help you understand if you are about to become the prey. It all comes down to a confession of judgement. If a borrower signs a confession of judgement, they are basically agreeing to lose in a court battle if there is a dispute about repayment.  Many cash-advance companies, which make up a large faction of predatory lenders, have their borrowers sign one of these.

New York state law is friendly to this type of contract. Regardless of where a loan takes place, it may include a “New York confession of judgement.” 

This could also mean you are agreeing that any lawsuits will be handled in New York state. That could greatly increase expenses if you do not live near there.  If you see one of these in your loan documents, do not sign it.  It is of no benefit to you. It only benefits the lender.

business loan companies Credit Suite

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

Don’t Accept Punishment for Early Payment

Prepayment penalties should definitely be a red flag.  Early payment is good, period.  Even though the lender may lose some interest, they should not be too opposed to early repayment. By itself, it should not be the reason you do not take a loan. But it should make you continue with caution and look for other red flags. 

Good Business Loan Companies Do Not Have to Seek the Weak 

Business loan companies that specifically seek out underserved populations, such as minorities and immigrants, and those with bad credit should be considered carefully. This may include contacting business owners that fit into these types of categories directly, or targeting them with marketing campaigns designed for them specifically.  If the focus is meant to make them think they are getting a great deal because they are in an underserved market, it could be sketchy.  While there are programs designed to help serve underserved populations, if something seems too good to be true, it likely is.

In fact, those that fall into these categories are more likely than others to fall prey, according to a 2015 Center for Responsible Lending Report.

A Good Business Loan Company Will Not Start With a Bad Deal

Some predatory lenders will try to earn trust by admitting they are offering a bad deal, then promising to fix it in the future. They claim they will allow for a refinance that will be a better option. Don’t fall for it. A bad deal is a bad deal.  Just walk away. 

Loan Flipping is a Classic Move for Predatory Business Loan Companies

This  is not the same as house flipping. Flipping a house can be very profitable. Loan flipping is actually a classic predatory lending tactic. When a predatory lender sees that you are struggling, they will offer a refinance. However, you end up paying points and fees again.  As a result, before it is over, you end up owing more than your original loan. Sometimes you may end up owing even more than your collateral is worth. It is a vicious cycle, and it can bury you quickly.

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

The Responsible Business Lending Coalition

This is a network of nonprofit and for-profit lenders, investors, and small business advocates. They have a common commitment to innovation in the small business lending industry. They also have serious concerns about the increase of irresponsible small business lending. 

In 2015 they drafted the Small Business Owners Bill of Rights.  When searching for a small business lender, look for those that have signed this.  There are many members of the Small Business Lending Coalition.

Here are a few examples: 

What is the Easiest Way to Avoid Predatory Business Loan Companies? 

Look for help when you can find it. Working with a company that specializes in helping small businesses find the funds they need can help you avoid predatory lenders. For example, Credit Suite works only with reputable lenders. With our Credit Line Hybrid and many other products, we connect businesses with lenders that we know to be safe to work with.  Not only that, but we help you assess your fundablity at the same time, and work with you to figure out how to best fill in your business’s fundability weaknesses. If business credit is an issue, we can help you build that too!  The time to take action is now, before you look for business loan companies. Don’t take the chance of falling prey.

The post How to Recognize Predatory Practices in Business Loan Companies, and How to Get Help appeared first on Credit Suite.

Think Outside the Box When Choosing Business Funding Companies

When you think of business funding companies, you are probably thinking about traditional financing institutions. Large banks, community banks, credit unions and such definitely do offer business loans.  However, if you are a small business, you may need to think outside of the traditional funding box a bit. 

Business Funding Companies Come in Many Forms

There are many different options when it comes to funding your business.  There are private lenders, which you may have heard referred to as alternative lenders. There are cash advance options which are bad news on all fronts, but especially for funding a business.  What you probably haven’t heard of however, is the small niche of business funding companies that do more than just offer business financing.  In addition, they offer help improving fundability. This may include consultation, coaching, educational opportunities, and more.  

These companies not only help you find the financing you need now, but they can also help you improve business credit and fundability so that you qualify for more and better funding throughout the life of your business. 

business funding companies Credit Suite

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

Business Funding  Companies: Credit Suite

This is exactly what Credit Suite does.  A business credit expert will consult with you to help determine where you currently stand in regards to fundability.  Then, they can not only help you find the best business funding for you now, but they can help you improve your fundability to ensure you qualify for even more funding, with better terms! 

A business credit expert can help you in ways you probably do not even realize. They have an inside track to what lenders are actually looking for. They can also help you steer clear of predatory lenders, which are all too prevalent in the world of business funding companies.  These experts are also aware of which lenders report to business credit reports to help build business credit, which ones do not require a person credit check or guarantee, and more.  

Working with a business credit expert will save you time, and in the long-term, money. The cost far outweighs the benefit, and you definitely get a bigger bank for your buck. 

Business Funding Companies: Alternative (Private) Lenders

The vast sea of alternative lenders is hard to swim in.  It is full of sharks that are searching for easy prey in the form of small businesses that need money.  If you aren’t careful, you will get swallowed up quickly.  Unfortunately, the industry is wrought with predatory lending practices.   

The key is to find a legitimate business funding company that fits your current needs.  A business credit expert is the best way to do this, but here are some good options from U.S. News and World Report to give you an idea of what is out there. 

As with all loans, rate, fees, minimums, maximums, terms, and other details can change without notice Be sure to check with the lender directly for the most up to date information.

BlueVine 

Loans are available from BlueVine  up to $100,000. Annual revenue must be $120,000 or more and the borrower must be in business for at least 6 months. Your personal credit score has to be 600 or above. It is important to note also, that BlueVine does not offer a line of credit in all states.  

Funding Circle

At Funding Circle, borrow up to$500,000. Decisions come in as little as 24 hours, and you can get funding in as little as 5 days. Repay on terms from 6 months to 5 years.

Funding Circle’s rates start at 4.99% per year. There are no prepayment penalties, there are also relatively fast decisions and funding. 

They do have a ton of fees, including for origination, missing payments, and insufficient funds. Also, some maximum rates are high!

OnDeck 

Obtaining financing from OnDeck is quick and easy. First, you apply online and receive your decision once application processing is complete. If you receive approval, your loan funds will go directly to your bank account. The minimum loan can be up to $500,000.
business funding companies Credit Suite

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

 Just like any other online lender, they do have certain requirements to qualify for a loan.  For example, a personal credit score of 600 or more.  Also, you must be in business for at least one year. Annual revenue must be at or exceed $100,000. In addition, there can be no bankruptcy on file in the past 2 years and no unresolved liens or judgements. 

Rapid Finance

Rapid Finance offers a couple of different options.  Which one is right for you will depend on a number of variables. 

Small Business Term Loans

These range up to $1 million in funding, with terms from 3 to 60 months. Your business needs to be generating revenue to qualify. 

You will need to supply a government-issued ID (like a driver’s license), a void check from your business banking account, and the last three statements from your business bank account.

Merchant Cash Advances 

You can get up to $500,000 in funding. In a merchant cash advance.  This is funding based on your average daily credit card sales.  

You will need to supply a government-issued ID (like a driver’s license), a void check from your business banking account, your last three credit card processing statements, and the last three statements from your business bank account to apply for this.

Bad credit is no problem with this type of funding because typically, repayment is taken directly from credit card sales. 

Credit Line Hybrid: Out of the Box Business Funding

In addition to the lines of credit, merchant cash advances, and invoice funding that many alternative lenders offer, you might also try a credit line hybrid.  This is unsecured business financing.  It is also no-doc financing.  That means you need no collateral and you do not have to turn in any financial statement documents like bank statements or check stubs to qualify.  
business funding companies Credit Suite

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

You do need a 680+ credit score and there are a few other requirements.  However, if you don’t meet them all you can choose to use a credit partner. This could be a friend, family member, or partner that does meet the requirements.  You can use their good credit to apply for the credit line hybrid, but the payments would still be reported in the name of the business thus building business credit. 

Business Funding Companies Are Not Always What You Think

It’s not always about a bank or a credit union.  You may need to think outside the box for a number of reasons.  Maybe you want an option without collateral.  Maybe you want to use non-traditional types of collateral such as invoices.  Perhaps you do not qualify for a loan at a traditional bank. 

Whatever the reason, there are a number of options, and sometimes alternative lenders are the answer.  However, this industry has a fair share of predatory lenders.  The best ways to avoid the sharks is to work with one of the business funding companies that can help with more than funding. 

The business credit experts at a company like this offer not only help finding the perfect funding for your needs right now, but also can help assess and improve business credit and overall fundability.  

The post Think Outside the Box When Choosing Business Funding Companies appeared first on Credit Suite.

5 Ways to Get a Business Loan to Buy a Business

Getting a loan to buy and existing business is a somewhat different animal than getting a regular business loan.  There are plenty of options, but it can take some careful consideration and research to figure out which option will work best for you.  What’s your best option for a business loan to buy a business?  … Continue reading 5 Ways to Get a Business Loan to Buy a Business

5 Ways to Get a Business Loan to Buy a Business

Getting a loan to buy and existing business is a somewhat different animal than getting a regular business loan.  There are plenty of options, but it can take some careful consideration and research to figure out which option will work best for you.  What’s your best option for a business loan to buy a business? 

How to Get a Business Loan to Buy a Business Regardless of Credit

It’s also important to know that, even if your credit isn’t the best, you can still get a business loan to buy a business.  It may not be the traditional term loan you probably expect, but you can most likely still get the fund you need. Sometimes, it takes combining a couple of options to get the best funding for your specific needs. 

Business Loan to Buy a Business: Traditional Loans

Traditional loans are a decent first stop when you are trying to figure out how to get a loan to buy a business. If you have good personal credit, you’ll have no problem here.  Furthermore, if your credit is good, you will get the best interest rates and loan terms from a traditional loan. 

business loan to buy a business Credit Suite

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

Collateral-based Loans

These are loans that are secured by some asset that you own.  Rates are lower, and your personal credit doesn’t have as much of an impact. The bank is taking on less risk due to the fact they can take possession of the asset if you default.  The business you are purchasing can be used as collateral for the loan. However, there are other, outside of the box options, that you can use if needed.  We’ll talk about this more later. 

Guarantor Loans

Here’s another idea if you do not have or want to use assets as security for a loan, but your personal credit score isn’t quite up to par. Ask a friend or family member who has these kinds of assets or a good credit score. They may let you leverage their asset in exchange for a percent of your business. They usually want less of a percent of your company than a venture capitalist would.  

If you are going to get help from friends and family to buy a business, asking them to sign on as a guarantor may be a better option than borrowing from them directly.  That can cause a lot of drama. 

SBA Loans

Qualified borrowers may be eligible for SBA loans.  These are loans guaranteed by the federal government. Yet, funds are distributed through banks. The application process is more involved. However, interest rates are often better.  Typically, minimum credit score requirements are lower than what banks would offer without the government guarantee as well. 

7(a) Loans 

This program offers federally funded term loans up to $5 million. Banks, credit unions, and other specialized institutions, in partnership with the SBA, process these loans and disburse the funds. 

The minimum credit score to qualify is 680.  There is also a required down payment of at least 10% for the purchase of a business, commercial real estate, or equipment. The minimum time in business is 2 years. In the case of startups, business experience equivalent to two years will suffice. 

504 Loans

These loans are also available up to $5 million.  Terms range from 10 to 20 years. Funding can take from 30 to 90 days. They require a minimum credit score of 680.  The asset you are financing is the collateral for the loan. In addition, there is a down payment requirement of 10%.  This can increase to 15% for a new business. 

There is also a 2 years in business requirement, or management must have equivalent experience if the business is a startup.

business loan to buy a business Credit Suite

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

Business Loan to Buy a Business: Alternative Lenders

Alternative lenders are lenders that are not traditional banks or credit unions.  These are typically private or peer-to-peer lenders that operate online, though not all operate online. They work better than banks for some because they will usually use other information besides credit score.  As a result, they will often approve loans to borrowers with a lower minimum credit score if they meet other criteria. 

These other criteria could include annual revenue, time in business, average balance in business bank account, and more. 

One popular online lender that works well for funding to buy a business is Lending Club. You can get a quote in less than 5 minutes, and funds are available in as little as 48 hours if approved. There are no prepayment penalties. Loans go up to $300,000 and you need a minimum credit score of 620.  Of course, details like this change frequently, so be sure to check with any lender directly for the most up-to-date information on rates and fees. 

Lending Club is only one option. There are many out there, but you have to be careful.  There are some great lenders, but there are also some predatory lenders in this industry. It can be hard to tell the difference. To ensure you are working with a reputable lender, consider working with a business credit expert. They can help you find the best lender with the best products for your needs. They can also help you figure out what you can improve to get the best rates and terms possible.  This may include building business credit, or improving fundability some other way. 

Business Loan to Buy a Business: Rollover for Business Startups

This is a form of collateralized business loan to buy a business that uses your existing 401(k) or IRA.  This program uses IRS proven strategies. You will pay no tax penalties, and you still earn interest on your 401(k). Rates are low, and this option usually has a quick closing and funding process as well. 

Credit Suite offers excellent options for this type of 401(k) financing.  You can get up to  100% of current retirement

account value that’s “rollable” from a previous employer.  Terms can be up to 5 years, and rates as low as 5.25% (Prime + 2) + $1995 rolled in lender fee. 

There are no credit requirements. If bad credit is blocking you from getting the funding you need to buy a business, this is your chance. 

For the retirement account to qualify, you must no longer be contributing, no longer be employed by the issuing company, and you must have a minimum of $35,000 in the account. Typically all that is required is a copy of the retirement account statement. 

Business Loan to Buy a Business: Seller Financing

If you have trouble getting all the funding you need to purchase a business,  you may be able to get help from the seller. Some sellers are willing to help buyers by bridging the gap with seller financing. Sometimes a seller will sell a business solely on seller financing.  

Typically in these transactions, you pay at least one-third of the sale price up front. Then, the buyer makes payments for the rest directly to the seller, plus interest.  Sometimes, a bank may be willing to lend this lesser amount, the amount of the down payment only, when they will not lend the entire selling price.  

The reason for this is twofold. First, the lower amount means less risk for the bank.  However, banks also see that if a seller is willing to finance, then they have faith that the business will continue to produce a profit into the future.  This is seen as a positive. 

business loan to buy a business Credit Suite

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

Using the Credit Line Hybrid to Help Fund a Business Purchase

That said, here is another option to get funding to buy a business.  The Credit Line Hybrid offers no-doc, unsecured business financing.  You can get  up to $150,000.  In some circumstances,  interest rates can be as low 0% for a limited amount of time. This can be used as some or all of the down payment required for an SBA loan or  seller financing.  The interest rate could be substantially lower than using a bank loan.  Furthermore, you can take on a credit partner.  This is helpful  if you do not meet the 680 minimum credit score or some of the other requirements.   Even better, the Credit Line Hybrid reports to the business credit reporting agencies. That means you build business credit and fund your business purchase at the same time. A business credit expert can walk you through the process. 

Business Loan to Buy a Business: Heloc and HEL

Borrowers who have a minimum credit score of at least 620 and at least 20% equity in their home can usually get a home equity  loan (HEL) or home equity line of credit (HELOC). You can use funds from this type of loan to buy a business, but your house will be on the line.  If you have the option of 401(k) financing or seller financing combined with the Credit Line Hybrid, that may be better.  

You Can Get a Business Loan to Buy a Business Even With Bad Credit

If  you  have great credit you probably are not worried about how to get a business loan to buy a business. However, if your credit is less than desirable, you have probably been wondering how you could ever make it work.  The fact is, there are options, and Credit Suite can help.

The post 5 Ways to Get a Business Loan to Buy a Business appeared first on Credit Suite.

What is Equity Crowdfunding and How Can You Use it For Your Business?

Creating a successful startup is hard; it’s even harder without access to startup funds. However, if you’ve got a great business plan and the ability to create a buzz around your brand, equity crowdfunding could be the perfect option for your business.

New legislation is opening up this crowdfunding option and making it a more viable method of raising capital for thousands of businesses.

An Overview of Equity Crowdfunding

Equity crowdfunding enables members of the public to invest in a privately-owned company. An entrepreneur or a business, generally a startup, will use an equity crowdfunding platform to offer securities in return for an investment from members of the public.

Most commonly, that security will be in the form of shares, and as the company grows and prospers, the value of those shares increases, offering the investor a return on their investment.

Why is this important for businesses?

If you’ve ever started a business, then you know it’s not straightforward, and one of the biggest challenges is raising funds to get your company off the ground. In the past, if you wanted to raise funds through members of the public, then you would need to find a venture capitalist or angel investor (people with a net worth of at least $1 million, or with an annual income of at least $200k).

However, the introduction of the JOBS Act in 2012 opened the door for privately-owned companies to raise capital through regular members of the public.

On the other side of the equation, equity crowdfunding allows regular investors to get in on the ground floor of a business opportunity. Even the biggest companies in the world like Google and Amazon started off life as startups, and with equity crowdfunding, regular people have the opportunity to invest right at the beginning of a future Google’s journey.

For every Google or Amazon though, there are endless examples of startups that fail. In fact, the 2019 failure rate for startups was 90 percent, so investing through equity crowdfunding is a risk.

Trends in Equity Crowdfunding

Many of the trends in equity crowdfunding stem from a need for consumer protection. When you invest in publicly-traded companies, you’re investing in an established, highly-regulated business, but it’s not necessarily the same story with equity crowdfunding.

It takes vast resources to become a publicly-traded company though, so it’s out of reach for startups and small businesses. Instead, they turn to alternative means of raising capital, such as equity crowdfunding, and while this offers regular investors great opportunities, it can also open them up to great risk.

This is why investing in startups was previously reserved for venture capitalists and angel investors because they were seen as having the means and experience to manage that risk. However, cutting the regular investor out of these options also created a two-tier system, where savvy investors couldn’t get in on enterprising startups.

JOBS Act 2012

While protecting investors is important, it meant that regular investors were missing out on promising opportunities, and startups were finding it hard to raise the capital needed to get their businesses off the ground.

This changed with the Jumpstart Our Business Startups (JOBS) Act, which set out legislation to open up the equity crowdfunding market.

Regulation remained strict, particularly compared with some other countries, but crucially, businesses could now reach out to “the crowd” for funding. With Regulation crowdfunding allowing companies to raise up to $1.07 million annually, and Regulation A permitting up to $50 million of funding each year, this offered businesses a viable option to raise capital.

JOBS Act Update 2020

In 2020, the Securities and Exchange Commission made some adjustments to the JOBS Act, raising the amount of capital businesses could crowdfund each year. Under the new regulations, businesses could raise up to $5 million annually through Regulation Crowdfunding and up to $75 million annually through Regulation A.

Since the average seed round in 2020 was $2.2 million, this made equity crowdfunding a much more feasible option for startups, allowing them to secure the funds they need to succeed in their business.

A Growing Market

Equity crowdfunding is a relatively new market, and although it’s valued at over $10 billion, that’s a tiny drop in the ocean compared with the $282 billion raised through venture capital in just a year.

However, equity crowdfunding is growing quickly, and when you look to the markets in other countries, there are signs that this fundraising option could grow exponentially in the coming years.

Over in the U.K., equity crowdfunding is much more established. This is largely due to more favorable legislation that has allowed equity crowdfunding companies to grow much more quickly. However, with the update to the JOBS Act, it’s likely we might see a similar uptick in the U.S. startup market.

How to Get Equity Crowdfunding for Your Startup

As you might expect with a growing market like equity crowdfunding, there are plenty of platforms to choose from. Each has its unique selling points, so it’s important to do your research and find the platform that’s going to represent the best deal for your business.

Once you’ve decided on a platform, you’ve got to apply, and this is a very important step. These platforms are extremely invested in protecting their investors, so they’re going to vet your application exhaustively. You’ll have to portray your business in a strong light, and offer up a business plan that represents value to the platform’s many investors.

If you’re accepted onto a platform, you can then decide on your terms (what type of security you want to sell, how much you want to raise, etc.). This is one of the big bonuses about equity crowdfunding because you’re in control of your terms.

You’re not negotiating with one single angel investor who might be able to negotiate you down. Instead, you’re putting your offer out to the crowd, and it’s up to each individual as to whether or not they take it up.

The last step is taking care of compliance by ensuring you have all the legal documents and pass the financial tests. For Regulation Crowdfunding (up to $5 million), you will need an independent financial review, but for Regulation A+ Crowdfunding (up to $75 million), you will need a full financial audit, which will take a bit longer.

If your business is found to be in good shape, then according to StartEngine you can be ready to raise funds through Regulation Crowdfunding in four to six weeks with very few costs, or through Regulation A Crowdfunding in about six months for a cost of roughly $50,000-$75,000.

Successful Equity Crowdfunding Case Studies

Equity crowdfunding might be relatively new in the financial world, but plenty of companies have had huge success with it.

BrewDog

When we think of startups, our minds are generally drawn toward tech, but one of the greatest examples of equity crowdfunding comes from the world of beer.

Starting life in 2007 as two guys with a love of beer, BrewDog has developed into a $2-billion company, and equity crowdfunding has a lot to do with it. The privately-owned company is 22 percent owned by a collection of 120,000 investors who have put in around $95 million as of 2020.

Successful Equity Crowdfunding Case Studies - BrewDog

In a world dominated by a handful of major brewers, this has allowed BrewDog to expand well beyond the reach of your average craft brewery, and they continue to use equity crowdfunding to invest in their green credentials.

Paradox Interactive

Gaming company Paradox Interactive was able to raise $3 million in the first 8 minutes of its offer going live. This goes to show the power of crowdfunding and the ability it offers businesses to raise capital quickly.

Later that year, Paradox Interactive went public, listing on NASDAQ at a value of $420 million. This demonstrates that equity crowdfunding is more than just a tool for raising money, it’s also an opportunity to create a huge buzz around your business.

When someone invests in you, they’re going to become a brand advocate, and when you’ve got thousands of these people around the world, it can catapult your brand into the public consciousness.

Knightscope

Security technology company, Knightscope is a perfect example of the flexibility equity crowdfunding offers. Initially raising $150k in just 7 days, Knightscope used this to scale, and then came back to the table 6 months later to raise $1.1 million.

This was nothing compared to the $20 million they would raise just two years later.

CEO, William Santana Li specifically noted the effect equity crowdfunding had on amplifying the Knightscope brand. This, combined with the capital raised has allowed the company to grow, reaching an estimated value of over $320 million, and leading to speculation that the business might go public.

This is another example of how good equity crowdfunding can give a start-up an excellent platform to go on to much bigger things.

Equity Crowdfunding Companies

The U.S. equity crowdfunding market is largely dominated by three companies: WeFunder, StartEngine, and Republic.

The top 10 platforms raised $209 million in 2020 and over $177 million of that was raised by these three companies.

WeFunder

WeFunder played a big part in lobbying the government over the JOBS Act and has been at the forefront of equity crowdfunding since its beginning. It has the biggest market share in terms of capital raised and can give your business excellent exposure.

Equity Crowdfunding Companies - WeFunder

One of the most appealing aspects of WeFunder’s offerings is the ability to sign up with no fees until you’ve successfully raised money.

This means you can dip your toe into the world of crowdfunding and focus on marketing your business as an investment opportunity before you have to worry about paying out.

StartEngine

StartEngine boasts a community of over 300,000 investors, which means it’s a great platform to get your startup noticed.

With over 375 successful raises, totaling over $250 million for its clients, StartEngine is one of the first places to look when it comes to equity crowdfunding.

Equity Crowdfunding Companies - StartEngine

StartEngine prides itself on helping you every step of the way, with a full-service plan that gives you complete control over your offer. It’s focused on keeping the power in the hands of the entrepreneur and allowing them to tailor their offer to suit their business needs.

Republic

Republic focuses on the ability of its platform to do more than just raise capital for your business. With over 350,000 investors, it touts its ability to create “true fans and engage supporters” all around the world.

Equity Crowdfunding Companies - Republic

This is certainly an underestimated part of equity crowdfunding, and it’s important to remember that it’s about more than just money. The exposure a successful crowdfunding campaign can bring you is a great source of marketing in its own right, and Republic is quick to highlight this.

Crowdfunding, VC Capital, or Angel Investments: Which is Right for Your Business?

On the face of it, crowdfunding sounds great, but as with anything, it has its drawbacks. When you’re weighing up how to get investment in your startup, you’ve got to look at the positives and negatives, and focus on how they fit in with your business plan.

Benefits of Equity Crowdfunding

  • Create thousands of brand advocates around the world.
  • Gain public validation from a successful crowdfund.
  • Boost brand awareness.
  • Maintain control over your business (you’re not offering investors a say in how the business is run).

Drawbacks of Equity Crowdfunding

  • You have to be in the right stage of your business development.
  • You’ve got to create a buzz around your brand.
  • It often takes prealigned investment to get people interested in your offer.
  • It can be a time-consuming process.

When you compare crowdfunding with venture capital or angel investments, it’s clear where crowdfunding triumphs, though: control.

When you have thousands of small investors rather than a handful of large investors, the external pressures and potential influence of your investors are much smaller.

Thousands of small investors aren’t there telling you how to run your business, but they are going out into their communities and spreading the word about your business, which can have a huge impact.

Conclusion

Building a thriving startup isn’t easy, but when you don’t have access to capital, it’s a lot harder. In the past, private companies had limited options for raising funds, but with changes to legislation, equity crowdfunding gives startups access to thousands of investors who are looking for the next big thing.

Not only is this an opportunity to raise a large amount of capital, but it can also supercharge your marketing by creating a huge buzz around your brand.

When you raise millions of dollars from investors worldwide, people will start talking about your business and become brand advocates, which is almost as valuable as the money you raise.

What’s holding your startup back?

The post What is Equity Crowdfunding and How Can You Use it For Your Business? appeared first on Neil Patel.

Alternatives to Business Credit Cards for Poor Credit

Business credit cards for poor credit are hard to find. They exist, but there are not many of them. If you have bad credit, you need to fix it. Still, that doesn’t change the fact that you need funding options in the meantime. 

Options for Funding Other Than Business Credit Cards for Poor Credit

What are your options for funding your business other than business credit cards for poor credit? There are a few. The best thing to do is choose those that will help you build business credit, so that your bad credit no longer dictates which funding options you choose. Rather, the door will be wide open and you will be able to choose the options with the best rates and terms regardless of credit requirements. 

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

Let’s start with a couple of actual business cards for bad credit. 

Brex Card for Startups

The Brex card for startups is one of the few true options if you are looking for business credit cards for poor credit. Even a FICO as low as 300 may qualify.  There is no annual fee, and you can apply with your EIN rather than your SSN.  There is no personal guarantee requirement. 

The only catch is, not all industries qualify, and some industries require more paperwork than others.
Wondering how they are able to verify creditworthiness if a business has bad credit? They look at the business’s cash balance, spending patterns, and investors.  

Not only can you get this card with bad credit, but they even offer rewards. For example you can get 7x points on rideshare and 4x on travel. Likewise, get triple points on restaurants and double points on recurring software costs. Get 1x points on everything else.

Capital One Spark Classic for Business

If you have fair credit, you may be able to get the Capital One® Spark® Classic for Business.  It also has no annual fee, but there is no introductory APR deal. The regular APR is a variable 26.99%. In addition, you can earn unlimited 1% cash back on every purchase for your company, with no minimum to redeem.

While this card is available if you have fair credit scores, beware of the APR. If you can’t pay on time and in full, skip it. 

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

You Need More

So, business credit cards for poor credit do exist.  They just aren’t enough. It would be highly unlikely that you would be able to reach your business goals using solely the funding offered through one or two cards. 

They are still a good option, because they offer some funding and can help you build your credit.  But, you need more. Here are some other funding options that you can use as alternatives to business credit cards for poor credit, or in addition to them. 

Credit Line Hybrid

A credit line hybrid is unsecured business financing.  It allows you to fund your business without putting up collateral, and you only pay back what you use.  

It is not as hard to qualify as you may think.  You do need good personal credit.  That is, your personal credit score should be at least 680.  In addition, you can’t have any liens, judgments, bankruptcies or late payments.  Furthermore, in the past 6 months you should have less than 4 credit inquiries, and you should have less than a 45% balance on all business and personal credit cards.  It’s also preferred that you have established business credit as well as personal credit. 

How does this relate to getting business funding with bad credit? Here’s the secret.  If you do not meet all of the requirements, you can take on a credit partner that meets each of these requirements.  Many business owners work with a friend or relative to fund their business.  If a relative or a friend meets all of these requirements, they can partner with you to allow you to tap into their credit to access funding. 

The best part of this type of funding is that it reports to your business credit report, regardless of whether you use your personal credit to apply or that of a credit partner. That means, you get your funding and build your business credit at the same time.

If this still isn’t enough funding, there may be even more options for accessing funding funds with bad credit, depending on your specific business.

Account Receivable Financing

To get this type of funding, you have to have open receivables from another business or government agency, not individuals.  In addition, you need to have been in business for at least one year. The minimum credit score is just 500.

You can get up to 80% of receivables advanced in as little as 24 hours.

Merchant Cash Advance

If you accept credit cards as payment, you may qualify for a merchant cash advance.  You only need a credit score of at least 500.  To qualify, your business must bring in $100,000 or more per year in credit card sales.  Typical approval amounts equal one months’ credit processing volume.  In addition to the application, you’ll need 3-6 months bank and merchant statements. 

Equipment Financing

If you need equipment, it might be better to consider equipment financing.  You will put up your existing equipment or the new equipment you want to purchase as collateral.  Amounts are available up to $10 million with terms ranging up to 60 months. You will  need a credit score of at least 550. 

Why would you choose this over a 0 interest business credit card if you could pay it off during the 0 interest period?  Well, the short answer is, you wouldn’t.  That is, unless you cannot get a high enough credit limit to cover the cost of the equipment. However, if you need longer than a year to pay it out, you may very well end up with a better rate going this route. 

Real Estate Financing

Likewise, you probably will not be financing real estate with business credit cards, even if it is 0 interest. You can get real estate financing in amounts up to $10 million with terms from 6 to 60 months and interest rates as low as 6%.  You will need a 500 minimum credit score, and there are a few other requirements. 

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

Business Revenue Lending

Another option is business revenue lending.  Again, the minimum credit score is 500.  Your business must earn annual revenue of $120,000 or more, and it must do more than 5 small transactions each month.  If your business brings in at least $15,000 monthly, then 6 months in business is acceptable.  You will have to fill out an application and provide 6 months worth of bank statements. 

An Expert Can Helpbusiness cards with poor credit Credit Suite

Of course you could seek out each of these options and apply yourself. However, you are going to have an issue in that it takes time to research lenders, find the ones that offer funding that you qualify to get, and avoid scammers.  Not to mention, it doesn’t really do any good if you can’t find lenders that help you build credit for your business as well.  

Also, getting approval for business credit cards is a little different than getting approval for personal credit cards.  You need to have your business set up properly, and it has to be fundable.  An expert can help walk you through this. 

Working with a business credit expert offers a number of benefits.  Not only will a reputable expert already work with reputable lenders, but they will know more quickly which ones will work best specifically for your business. This will save you time and money in the long run. They will be able to guide you to the options that will be most effective for your needs, help you build credit, and offer the best rates and terms. 

If you do all of this yourself, not only do you risk making poor decisions due to simple lack of knowledge, but you could waste valuable time in which your business will still need funding. 

Business Credit Cards for Poor Credit are Out There, But They Aren’t Your Only Option

Many business owners operate under the assumption that if they do not have good credit, their only funding option is credit cards.  Bad credit takes most loans off the table, and without that, many only know about credit cards. 

While business credit cards for poor credit can be a tool to help fund your business, they are far from your only option, even if you have bad credit.  There are alternatives that you can use in place of or in conjunction with credit cards to meet your business goals.  A business credit expert can help you find the options that will work most effectively and efficiently for your business needs. 

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