How to Create Your 5 Year Business Credit and Funding Blueprint

What’s YOUR Business Credit and Funding Blueprint? So it should be obvious – when considering business credit and funding, you need a blueprint. Because traveling without a map won’t get you anywhere. So, where do you see your business in five years or more? Do you double your revenue? Open a new office? Replace your … Continue reading How to Create Your 5 Year Business Credit and Funding Blueprint

How to Create Your 5 Year Business Credit and Funding Blueprint

What’s YOUR Business Credit and Funding Blueprint?

So it should be obvious – when considering business credit and funding, you need a blueprint. Because traveling without a map won’t get you anywhere.

So, where do you see your business in five years or more?

Do you double your revenue?
Open a new office?
Replace your equipment?
Hire more people?
Retire and pass your business along to a family member or sell the company?
Or something else?

Your Business Plans and Future

All of these scenarios require funding! Even going concerns with stable, steady revenue can experience emergencies, or need to seize a business opportunity quickly and before they have the funds. All businesses can use business credit to achieve their aims – whatever they are

Instead of year by year, let’s go phase by phase since some of these will overlap in time.

But even if you’ve already been there, done that, checking out the earlier phases could help you see if you missed anything. And if you’re just starting out, checking out the later phases could show you your business’s future so you can be ready.

Phase 1: Setup and Launch

You’re at the starting line and the race official has just yelled, “Go!”

Setting up a business is a task with a lot of moving parts. It’s a lot more than just hanging out a shingle. The way your business is set up can directly affect the ability of your business to succeed

This first phase covers your first six to twelve months of existence.

Fundability

Fundability is a business’s ability to get funding. A lot of the power to get business money is in your hands. A business starts with no credit profile. As a result, what’s on an application is all that’s reviewed for approvals. So your application must be very strong. Nearly half of all companies fail in their first 5 years, and about 2/3 in the first 10. As a result, new businesses don’t seem fundable to lenders. You can change that by building for fundability from the very start.

Business Name

Check with your Secretary of State –a business name may have to be unique. Make sure your SOS has all the necessary information for your company, and it’s up to date and correct. Make sure that you are in good standing with them and that your entity is active. You will have to file annual reports and pay an annual fee to stay active. Keep the name of a high-risk or restricted industry out of your business name. Your business can be Rachel’s rather than Rachel’s Gas Station. There is nothing underhanded about this – it is completely above board and honest

A common reason for loan and credit card application denials is the lender can’t easily locate a business offline or online. So make it painfully easy for lenders and credit providers to find your business. Make sure the business name is exactly the same on corporation papers, licenses, utility statements, and bank statements. Also make sure the business name and all other information is the same on every online listing you can find.

Business Address

This must be a real brick and mortar building, a deliverable physical address. This can never be a UPS box or a PO Box. Some lenders will not approve and fund unless this criterion is met

A virtual address can also be a good idea if you need to hold a meeting or an interview, and it’s a lot more professional than doing this at your kitchen table. We like Regus, Davinci, and Alliance Virtual Offices. But keep in mind that there are credit providers that will not accept virtual addresses.

Business Entity and EIN

Get a free EIN for your business and choose your business entity at IRS.gov. Use your EIN to open a bank account and to build a business credit profile. To truly separate business credit from personal credit your business must be a separate legal entity, not a sole proprietor or partnership. Only incorporating creates a new and separate entity which by default will reduce your personal liability. Other entities (like partnerships) don’t. File this with the Secretary of State for your state. Make sure your entity is set up in the same state as your business address.

NAICS Codes

The IRS website is also where you choose NAICS codes. These codes are for the purpose of collecting, analyzing, and publishing statistical data on the US business economy. Some businesses are considered to be risky by their very nature. Often higher risk comes from chances of injury or frequently engaging in cash transactions. Risk matters because there are several industries where lending institutions are hesitant to do business.

If more than one NAICS code can apply, you don’t have to choose the one that’s higher risk

And if only high risk codes apply, there’s nothing at all wrong with changing your business to match a related but lower risk code.

Business Licenses

Contact State, County, and City Government offices to see if there are any required licenses and permits to operate your type of business. Licensing requirements differ depending on state, town, and industry. Always make sure you have the proper licensing for your corporation

Having licensing builds credibility in your business, and that can help you get more customers.

Business Phone and 411 Listing

It’s very easy and inexpensive to set up a virtual local phone number or a toll free 800 number

A cell or home phone number as your main business line could get you flagged as un-established – but VOIP is okay. If you don’t want customers calling you at home all day, do not use a personal cell or residential phone as the business phone number. It also helps with fundability to have a dedicated business phone number. Your number must have a listing with 411 for most credit issuers and lenders to approve you. Check for your record to see if you’re listed and your information is accurate. No record? Then use ListYourself.net to get a listing.

Web Domain and Professional Website

Lenders and credit providers will research your corporation on the internet. It is best if they learned everything directly from your corporate website. Not having a professional website can hurt your chances of getting corporate credit. Buy web hosting from a hosting company like GoDaddy or HostGator. Your domain should be your business name, if possible. Add a company email address for your business on the same domain as your website. This often comes with a website domain provider. This is not just professional; it also greatly helps your chances of getting approval from a credit provider. Do not use Yahoo, AOL, Gmail, Hotmail, or similar kinds of email.

Business Bank Account in the Business’s Name

You must have a bank account devoted strictly to your business. The IRS does not want you commingling funds. Make accounting easier and reduce the risk of audit at tax time

Keep personal and business funds separate. Having a business-only bank account makes that easy.

Business Merchant Account

Getting a business merchant account is a smart way to help out your business. Now your business will be able to accept credit and debit cards. Studies show that customers will spend more if they can pay by card. This also increases your finance options and is generally more secure.

Get Set Up With the Business Credit Reporting Agencies

Go to D&B’s website and look for your business. Can’t find it? Then get a free D-U-N-S number on the D&B site. A D-U-N-S number plus 3 payment experiences leads to a PAYDEX score. You need a D-U-N-S number to start building business credit. Once you are in D&B’s system, search Experian and Equifax’s sites for your business.

Your Business Credit History

Get the most favorable funding by paying all bills on time, to get:

A PAYDEX score of 80
Equifax Credit Risk Score of 90 or better
A good FICO SBSS score, which is driven (in part) by on-time payments and business credit history
For Experian, historical behavior (payment history) is 5-10% of the total score

Business Credit Building from the Ground Up

Start with vendor accounts, a proven way to start building business credit. Vendor credit is generally not attached to a bank. So under federal law a Social Security number is not required. When not attached to a bank, there is no Social Security requirement for starter vendor credit

This is unlike bank loans and bank cards. You can legitimately leave the SSN field blank, which will force them to pull your business credit under your EIN.

Business Credit Building with Credit Cards with a PG

Every step and every credit provider is designed to help your business

It’s designed to help you qualify for business credit cards that you will actually use. As you continue building, your time in business will help. But to get started, you may need to give a personal guarantee. That’s okay; that’s a part of the strategy.

Good Personal Credit

If you already have good personal credit, then you’re all set. If not, you can work with a credit partner or guarantor. And never stop working on improving your personal credit, no matter what shape it’s in.

Phase 1 Funding Options

In Phase 1, it’s trickiest to get business credit and funding. But it’s not impossible! You will, though, need to think outside the box.

Our 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 so you can build business credit at the same time. This will get you access to even more cash with no personal guarantee. You need a FICO credit score of at least 680 or a guarantor with good credit to get an approval. No financials required.

We also have an option for getting just personal credit cards with our Credit Line Hybrid.

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

401(k) Financing

This is not a loan and 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 so you won’t lose your retirement funds. The IRS calls this a Rollover for Business Startups (ROBS), which 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. This financing isn’t a loan against, your 401(k), so there’s no interest to pay and does not use the 401(k) or stocks as collateral.

Instead, this is simply a movement or change of custodian. Your 401(k) must have more than $35,000 in it and cannot be from a business where you are currently employed. You can get 401(k) financing even with severely challenged personal credit.

Stocks Financing

Some lenders will make loans using securities as collateral. Securities-based lending provides ready access to capital. The only restrictions to this kind of lending are other securities-based transactions, like buying shares or repaying a margin loan. You continue to earn interest on stocks pledged as collateral. But you will have challenged personal credit.

Sell Part of Your Business’s Equity

Your business and its potential are assets. Talk to people you know about angel investing

Angels buy a smallish stake in your company. They usually don’t expect as big a return as venture capitalists do. VCs might also buy a stake, but they generally just want paradigm-changing businesses. Another way to sell a part of your equity is to take on another founder or partner.

Crowdfunding and Grants

Note: crowdfunding success isn’t guaranteed. Crowdfunding platforms like Kickstarter will take a percentage of any money you raise. But it can still be a way to get a cash infusion without having to give up equity. If you’re very good online and have a compelling product and story, then you’re more likely to succeed than most people. Grants can come from the government or private businesses. Expect a lot of competition, difficult entry requirements, and not a lot of money. But it’s another way to get some cash without having to sell a chunk of your business .

Phase 1 Goals for Business Credit and Funding

Right now, you have minimal Growth Monthly Revenue (GMR). This is a fast paced growth plan, throw it against the wall and take what you can get right now. Look at some short sighted daily and weekly goals for quick cash and growth. During this phase your focus is on the bare essentials to create a viable business. Your goal is to build your consistent revenue to $10,000 per month, and continue to work on improving your personal credit.

Phase 2 Development: $1,000 to $10,000 GMR

In Phase 2, you should start developing marketing. ow you’re at an aggressive sales pace adding nurture and longer sales cycles. Use medium term monthly growth planning (campaign to campaign). It’s time for software implementation and system development. You’re building the blocks of how your business is going to be, now and in the future. This phase should run somewhere between the first six to 24 months from launch.

Business credit and funding starts to get easier.

Phase 2 Credit Options

Your credit options will open up once you get to Phase 2, including:

Business Credit Cards (No PG)
Advanced Vendors
Vehicle Financing
Cash flow Management with providers like Brex and Divvy
Business Credit Cards With No Personal Guarantee

As you continue to build exceptional business credit and pay your bills on time, credit providers trust you more and more. You can get higher limits and better terms. And you can start to get business credit cards with no PG.

Advanced Vendors

There are many vendors that do not report to the business credit reporting agencies unless you default. They’re still a good idea, because credit can help you beyond business credit building

Not having to put up 100% of the costs of equipment or a building or anything else can help with budgeting. Credit can sometimes be the only way to take advantage of a limited time opportunity if you don’t have the money right now. And if your business credit cards offer rewards, cash back, or points, then using them is to your advantage.

Vehicle Financing

Vehicle financing is a great way to get a business vehicle without having to wait until you can just pay cash and drive it off the lot. Note: business owners may be required to personally guarantee vehicle loans. If you are a co-borrower the loan will most likely report to your personal credit report.

Some loans have a prepayment penalty and charge you for paying ahead. It is a good idea to have a loan proposal. A loan proposal should detail your business, loan needs, and financial statements.

Cash Flow Management

Managing small business finances can be overwhelming. There are a number of tools that can help streamline the process. Options like Brex, Divvy, Expensify, Lola, and more are growing in popularity. Which one is right for your business?

Brex

Brex is a business money management system that integrates with your accounting software

It allows you to track expenses and, depending on the level of service you choose, it can also help with paying bills and controlling spending. Brex has a partnership with the FDIC and your funds are secure. Everyone who opens a Brex cash account gets a corporate card. Brex reports any payments to Dun & Bradstreet

Divvy

One thing to know: Divvy is very similar to Brex. Divvy reports to the Small Business Finance Exchange, which in turn provides data to all SBFE partners, including business credit bureaus. As of April 2021, they also report to Dun & Bradstreet directly.

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

Phase 2 Funding Options

In Phase 2, your funding options also open up, to:

Merchant Cash Advances
Revenue Lending
Lines of Credit (Fundbox)
Equipment Financing/Leasing
Invoice Factoring

Merchant Cash Advances

An MCA technically isn’t a loan; it’s a cash advance based on 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. With an MCA you get funding based strictly on cash flow as verifiable per business bank statements. A lender mainly just wants to see consistent deposits.

Business Revenue Lending

You can technically qualify with only one year in business, but the annual revenue requirement is high enough that phase 2 may make more sense. You can raise capital from investors who get a percentage of the enterprise’s ongoing gross revenues in exchange for money invested until a predetermined amount is paid. Often this predetermined amount is between 3 – 5 times the original amount invested. Monthly payments will fluctuate with revenue highs and lows and will continue until you’ve paid back the loan in full.

Fundbox

Fundbox will connect directly to your online accounting software when deciding whether to fund your business. You can get revolving line of credit for up to $100,000. Fundbox will auto debit your weekly payment from your bank account. You don’t need to show a minimum personal credit score or a minimum time in business, but ideally you must have 6 months in business or more.

Equipment Financing

Use a loan or lease to purchase or borrow hard assets for your business. Physical assets can include items such as a restaurant oven or a company car. Pay predictable amounts every month. You can build business credit on a program like this.

Equipment Leasing

Or lease equipment, rather than buy it outright. You will often put down less money than you would if you were buying the equipment. You may be able to negotiate flexible terms with an equipment lease, and it’s easy to upgrade equipment after your lease ends. This is helpful if your equipment is something like a computer which quickly becomes obsolete.

Equipment Sale-Leaseback

If you already own your equipment free and clear you can use that as collateral for financing

Sell equipment to a lender for cash. Then lease it back from them. You can unlock Section 179 tax savings, and depreciate your entire equipment purchase in the first year. You’ll need at least one larger piece of higher value equipment to qualify.

Invoice Factoring

If you have open invoices and are extending credit to customers in some form, then you can get paid faster with factoring. Usually this involves invoices with net terms, like net 30, 60, or 90. To be paid faster, you turn those invoices over to a factoring company. They immediately give you an agreed upon percentage of the total of the invoices, like 80%. When your customer pays, the factoring company keeps their fee, and they send you the rest. But note – factoring only works if your customers pay.

Phase 2 Goals for Business Credit and Funding

Your goals should be:

Strong Business Credit (10 to 12 Accounts)
Good personal credit
Build consistent revenue to $10,000 or more a month

Always develop business connections in your community and with potential lenders.

Phase 3: Growth: $10,000 to $2 Million GMR

Successful growth…it’s working! It’s time to start optimizing systems and operations. You’ll be undergoing massive team and infrastructure development, and long term growth and planning for semi-annual to annual focus lifetime customer value. You’ll need to make some high level strategic hires (Managers, VP’s, Essential C levels). This phase will happen at about 24 months or more from launch.

Business credit and funding gets a lot easier now.

Phase 3 Credit Options

Your Phase 3 credit options put your Phase 1 and Phase 2 options on steroids, with:

Team access to vendors and cards
Continuing to grow your vehicle fleet with vehicle financing
Vendor portfolio growth

Phase 3 Funding Options

Phase 3 opens your funding options up to:

All Alternative options available
SBA Loans
Bank Loans

Alternative Loans (also called private lending)

Private lenders are generally funded by investors or by banks, or both. Private lenders are in the business of taking funds from private investors. They make private business purpose loans with those funds. This often involves real estate. These can be hard money loans with shorter terms.

Alternative Options

Alternative lending also means online lending. But for certain industries, online lending is one of the only ways to get money. So let’s look at the cannabis industry, for example. Medical cannabis is legal is most of the country, yet more traditional lenders are still less likely to approve a loan. But lenders that specialize in cannabis industry lending are out there.

SBA Loans

More time in business will make SBA loans a real possibility for your business. It’ll be easier to get an SBA loan in Phase 3 versus earlier. This is because you can more readily show your business is established and making money. Demonstrated profitability and responsible credit and bank account management will improve your chances of getting an approval for an SBA loan. Also – SBA loans have great terms! So there’s a reason why you should be striving to be eligible for one.

Bank Loans

Banks are often the first place we think of when we thinking of financing. But big banks only sign off on about 25% of the small business loan applications that come their way. Still, term loans often have lower interest rates than many other funding options. They also tend to be for higher loan amounts. But you will most likely have to undergo a personal credit check and/or provide collateral.

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

Phase 3 Goals for Business Credit and Funding

In Phase 3, your mission is to take your business to the next financial level, so your goals are:

Profitability (so as to calculate loans)
Maintaining good personal and business credit
Build up to $2,000,000 in annual gross revenue
Maximizing leverage of cash flow with vendors and business credit

Grow Your Vendor Portfolio with Retail Credit

Retail credit comes from major retailers like Staples. You can 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 can be revolving. You will need at least 3 (more would be better) accounts reporting to the business CRAs.

Grow Your Vendor Portfolio with Fleet Credit

Fleet credit is used to:

Buy fuel
Maintain vehicles of all sorts
Repair vehicles

These tend to be gas credit cards. But there may be a minimal time in business requirement.

Grow Your Vendor Portfolio with Business Credit Cards

Business credit cards are more universal-type credit cards, like MasterCard. So they can be used pretty much anywhere. These cards may even have rewards programs. Terms can be revolving. Often you will need to have at least 14 accounts reporting to the business CRAs. Also, there can be longer time in business requirements.

Phase 4: Maturity: $2M to 5M+ Annual Income

Consistent growth is key. You’re aiming for long term consistent and stable growth, and moving toward market domination (Competitor Buyouts and Acquisitions). Product development and expansion becomes critical for longevity. Because now it’s time for the big hire. You’re going to fill out C Level, Directors, and middle management. This phase will happen at around four to five years from launch.

It should be no problem to get business credit and funding when you’ve hit this stage.

Phase 4 Credit Options

By Phase 4, the sky is pretty much the limit! You should be able to get:

Most major credit cards with no PG
All vendors should be accessible

You should be able to leverage reports for specific vendors. This includes asking for a credit line.

Phase 4 Funding Options

In addition to everything we’ve already talked about, your business can take full advantage of:

Private equity

Investors
You might even sell shares in your corporation, or go public!
Phase 4 Goals for Credit and Funding

Now you’re playing the long game. Your mission is to look to the future and help your business for decades to come.

Therefore, you need to:

Balance your costs vs your cash flow vs your business’s profit
Leverage funding for expansions and buyouts

And you should be maximizing leverage of cash flow with vendors and business credit.

Phase 5: Exit

By this time, your business should be very well established. At this phase, you want to cash in on all the work you have invested. This is where the funding and credit has the long game return. A Business Credit Portfolio is transferable and increases the value of your business.

Your proven track record with merchant cash advances or revenue lending pays off big time, since it can keep business cash flow moving through the ups and downs. Having a proven track record with the SBA, and a profitable banking relationship, will improve the value of your business as well. People want to buy something they can lend against if they need to.

Phase 5 Business Credit and Funding Options

Selling can mean you’re retiring, or maybe you’re exchanging one form of entrepreneurship for another, and want to change industries yet remain an entrepreneur.

In Phase 5, you can:

Self-fund the sale in structured buy outs
Go to the SBA for acquisition money

In essence, you should be prepared to sign for your own buyout. Because a profitable, seasoned business can be an exceptionally valuable legacy.

Your Business Credit and Funding Blueprint: Takeaways

From startup to exit, your business credit and funding options will change. But navigating all the nuances can be tricky. Let’s walk that path together.

The post How to Create Your 5 Year Business Credit and Funding Blueprint appeared first on Credit Suite.

5 Alternative Funding Secrets Traditional Lenders Don’t Want You to Know

Traditional lenders are large banks and small community banks. They offer term loans based on your personal credit score. The problem is, if you do not meet their requirements, you can’t get a loan with them. Many small businesses do not meet the minimum credit score requirements to get terms they can afford, or sometimes any funding at all.

This is even true of SBA loans. They are typically processed through traditional lenders. If you cannot get one, you need to find SBA loan alternatives. This is where alternative funding options enter the scene.

Here’s What Traditional Lenders Don’t Want You to Know About Alternative Funding

There are plenty of alternative business financing options available. There are alternative business lenders that offer term loans and lines of credit similar to what traditional banks offer. However, they determine creditworthiness based factors other than credit score. This can make them a good option for those that do not have good credit.

Some of them even offer alternative types of financing that many business owners have not heard of. Due to this, most business owners can find options that will work for them.

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

1. Alternative Financing Options May Consider More than Just Credit Score

This is the crux of why many businesses do not qualify for financing at traditional banks. The credit score is the main indicator of creditworthiness. However, with alternative funding, often the lenders understand that a bad credit score does not necessarily mean that a borrower is a bad credit risk. They take other factors into consideration.

Fundbox

Fundbox is one such lender. At Fundbox, they consider business merit as opposed to personal credit. For application purposes, they will do a soft pull on your personal credit. This will not affect your credit score. When you make your first draw, they will do a one time hard pull that could affect your score, but the minimum is only 550.

2. Many Alternative Lenders for Small business Use Innovative Technology

There is really no reason for a lender to not use the technology available today to help them make better lending decisions. Some lenders believe they could miss out on some good borrowers if they look only at credit scores. They use technology to help them do better.

Upstart

Upstart uses a completely innovative platform for loans. 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.

3. Some Alternative Funding Options Can Help You Build Business Credit

A separate business credit profile can help you get more business funding, while at the same time protecting your personal credit from your business debt. However, there are not a lot of creditors that will report payments to you business credit profile. That makes it hard to build a score. Some alternative lenders will report, which is a huge bonus.

Grameen

Grameen offers microloans to women business owners. The loan amounts range from $2,000 to $15,000, and they also offer financial training and support. In addition, they do report payments are reported to Equifax and Experian, meaning these loans help borrowers build their credit.

4. Alternative Lenders Often Show Preference to Women, Minorities, Veterans, and Others

If you fall into a specific category as a business owner, you may have some special options available to you. Like Grameen, there are other lenders that focus on helping specific groups.

Streetshares

Streetshares offers a variety of financing and investment products with fast application processes and funds deposited almost immediately. Lending products never have a prepay penalty, and the credit check is a soft one. There is never any impact on your credit score for applying.

They lend to various types of businesses and business owners. Still, their early mission was to help veteran business owners, and they remain true to that mission today.

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

Accion

Accion is a nonprofit lending network dedicated to helping small businesses. They offer small business loans, some grant opportunities, and other resources designed to help both startups and established small businesses grow and thrive.

They lend to small business owners in general, from all backgrounds and most industries. However, they specialize in underserved populations like minorities.

5. Some Alternative Business Financing Options Offer 0% Interest

This is a secret that almost no one knows. It is actually possible to get 0% financing on alternative funding and it is not a scam.

Kiva

Kiva is an online lender that is a little different. The interest rate is 0%. That means even though you have to pay it back, it is absolutely free money. They do not check credit at all. Here’s the catch. You have to get at least 5 family members or friends to give to the cause.Furthermore, you have to pitch in a $25 loan to another business on the platform.

Credit Line Hybrid

This is a form of alternative business financing rather than a specific alternative lender. The Credit Line Hybrid is a flexible product that can serve your business needs in many ways. First, you can fund your business without putting up collateral. Then, you only pay back what you use.

Your personal credit score needs to be at least 680. In addition, you can’t have any liens, judgments, bankruptcies or late payments. Also, in the past 6 months you should have less than 6 credit inquiries, and you should have less than a 45% balance on all business and personal credit cards. There are some other requirements as well.

However, If you do not meet all of the requirements you can take on a credit partner that does meet 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.

Other Types of Alternative Funding for Small Business

In addition to the Credit Line Hybrid program, here are some other alternative funding options that Credit Suite can help you with.

Retirement Account Financing

This Credit Suite program offers a unique and powerful way for a new or existing business to leverage assets that are in a 401(k) plan or IRA.

In as little as 3 weeks you can invest a portion of these funds into your own business. Then, you not only have more control over the performance of your retirement plan assets, but you also have the working capital you need.

It has to be a plan that you are no longer contributing to, and you can no longer work for the employer that it was opened with. Lastly, it has to have at least a $35,000 balance.

Business Revenue Lending

If a business has revenue of at least $120,000 per year, it may qualify for this type of funding. Lenders verify revenue using bank statements. There can be no recent bankruptcies, but the minimum credit score to qualify is 500.

The business must also be in operation for a year or more, and it must do over 5 small transactions each month to get business revenue financing.

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

AR Financing

Outstanding account receivables can be a source of funding for your business.You can get as much as 80% of receivables advanced. Not only that, but you can have the funds in less than 24 hours. You get the rest of the accounts receivable amount once you collect full payment for the invoice. Closing takes 2 weeks or less.

Receivables should be with the government or another business.

Merchant Cash Advance

A business that accepts credit card payments and has at least a 500 FICO can get up to $750,000 in a merchant cash advance. There must be $100,000 or more per year in credit card sales, and typical approval equals one month’s credit card financing volume.

Wait! Don’t Apply With an Alternative Lender Before You Read This

Nothing is perfect. That includes financing alternatives for small businesses. Even top alternative lending companies sometimes get a bad rap because of the prevalence of predatory lenders in the industry. Do your research and make sure you are working with a company that is trustworthy.

The best way to do this is to work with a business credit expert like the ones at Credit Suite. This is someone who has a relationship with many reputable lenders and can help not only find the best lender for you, but also the best funding options for your business right now. They specialize in options like the Credit LIne Hybrid, lines of credit, merchant cash advances, accounts receivable Financing and more.

In addition, they can help you analyze your current fundability, and walk you through the process of improving it so that you can qualify for even more funding and better terms in the future.

The post 5 Alternative Funding Secrets Traditional Lenders Don’t Want You to Know appeared first on Credit Suite.

9 Funding Options to Fit Any Business

What are the business funding options? There are a ton. For example, a startup may choose to seek a business loan, find an angel investor, pitch to a venture capital investo r, or try crowdfunding. An established business might look to traditional loans or credit cards. But, what if these options will not work? What if you do not qualify? What if you can’t wait for the cash?

Find the Right Funding Options for Your Business Right Now

There are options for funding that will work for most businesses right where they are. Some require collateral, some do not. Some require good credit, while others look at alternative factors to determine the business’s ability to repay. Here are 9 funding options to help you get the money you need for your business right now.

Learn business loan secrets and get money for your business.

Funding Options With No Collateral

If you are looking for fast, flexible funding options that do not require collateral, you need one of these.

9. Credit Line Hybrid

The credit line hybrid is unsecured business financing. It is available to pretty much anyone for any type of business expense. You can use it for real estate, equipment, working capital, and even startup expenses. There is no down payment, and you do not have to provide income documentation. It is completely no-doc financing.

You do need to have personal credit of 680 or above. Also, there cannot be any late payments in the past 24 months, there can be no open collections or bankruptcies, and there should be less than 6 inquiries in the past 6 months on your consumer credit report. In addition, you need at least 2 open credit cards with a $2,000 limit or higher and 2 years of good payment history on those cards.

If you do not meet these requirements, you can still get this funding. You have the option to take on a credit partner that does meet them. The payments will still be reported on the business’s credit report. That means you will build business credit whether you get the financing on your own or with a credit partner.

You can get up to $150,000, and often interest rates are as low as 0% for the first 6 to 18 months.

8. Business Line of Credit

A traditional business line of credit is like a cross between a traditional loan and a business credit card. You go through a traditional bank and apply just like you would a loan. It may be collateral based or not, depending on your lender’s requirements. You may also use a guarantor to help reduce rates and get better terms if needed.

The difference between a traditional loan and a traditional business line of credit is that the line of credit is revolving credit rather than a term loan. Like a credit card, you only pay back what you use. Also, lines of credit typically have lower interest rates than business credit cards. The trade off is, there are no rewards like cash back or air miles.

At Credit Suite, our funding partners offer an unsecured line of credit that has a minimum FICO score requirements of 600. You also must show business tax returns with net profits over $20,000 if you have been in business between 6 months and a year. If you have been in business for over a year, you need to show $10,000 in monthly revenue. These requirements are much easier to meet than those typically set forth by lenders.

Terms are 6 to 18 months and interest rates range from 12% to 25%. You can get up to $250,000.

Learn business loan secrets and get money for your business.

Funding Options for Bad Credit

If your credit isn’t exactly good, you still have options. The following funding options are available with a minimum credit score of 500.

7. Business Revenue Lending

A business that has consistent revenue of $120,000 per year or more may qualify for this type of funding. Lenders verify revenue using bank statements. There can be no recent bankruptcies, but the minimum credit score to qualify is 500.

The business must also be in operation for a year or more, and it must do over 5 small transactions each month to get business revenue financing.

6. Merchant Cash Advance

A business that accepts credit card payments and has at least a 500 FICO can get up to $750,000 in a merchant cash advance. Credit rates are usually lower compared to traditional financing as well.

There must be $100,000 or more per year in credit card sales, and typical approval equals one month’s credit card financing volume.

5. Accounts Receivable Financing

Outstanding account receivables can also be a source of funding for your business. Get as much as 80% of receivables advanced in less than 24 hours. You get the rest of the accounts receivable amount once you collect full payment for the invoice. Closing takes 2 weeks or less.

Receivables should be with the government or another business. Getting financing with receivables from individuals is not as easy.

4. Retirement Account Financing (Rollover for Business Startup, or ROBS)

This Credit Suite program offers a flexible and powerful way for a new or existing business or franchise to leverage assets that are in a 401(k) plan or IRA.

It doesn’t take long either. In as little as 3 weeks you can actually invest a portion of these funds into your own business. Then, you not only have more control over the performance of your retirement plan assets, but you also have the working capital you need.

According to the IRS, a ROBS qualified plan is a separate entity. It has its own set of requirements. The plan technically owns the business, not the individual. That means some filing exceptions for individuals might not apply to the plan. That said, always check with a tax expert when it comes to tax matters.

Learn business loan secrets and get money for your business.

Do You Qualify for a ROBS?

You do not have to submit financials or have good credit to get approval. In fact, all the lender will ask for is a copy of your two most recent 401(k) statements.

If the plan has a value of more than $35,000, you can get approval. This is true even if you have really bad personal credit. You can get however much of your 401(k) is “rollable.” Sometimes, you can secure a low-interest credit line or loan for 100% of your current 401(k) value.

The plan you use cannot be from a business where you currently work. It will have to be from previous employment. Also, you can’t still be contributing to it.

The cost is 5.25% prime + 2, and the term is 5 years. There is a $1995 lender fee. This includes 5 years worth of management and consulting.

Funding Options for Equipment or Real Estate

If your credit is lacking but you do have equipment or real estate to use as collateral, you may find these options to work well.

3. Equipment Financing

You can secure this type of financing by using existing equipment or new equipment you want to purchase as collateral. Funding is available up to $10 million. Terms range from 5 to 60 months, and you need a minimum 550 FICO.

The equipment must be new, and most types of equipment are acceptable, including software.

You’ll need to provide details on the equipment to be financed and, depending on the loan amount and certain risk factors, you may need to show 2 years corporate and personal tax returns.

2. Commercial Real Estate Financing

As you might expect, this is a loan that is secured by commercial real estate. You can get up to $10 million with terms from 6 to 60 months and interest rates ranging from 6% to 22%. The minimum credit requirement is 500, so this can be a good option if you don’t have great credit as well.

Funding Options with Good Credit and Collateral

SBA loans are an option if you are close to meeting the requirements for a traditional loan but not quite there. They offer the highest dollar amounts and typically the best terms.

1. SBA Enterprise Loans

You need to have collateral worth up to at least 50% of the loan amount, but you only need a FICO of 620. There also can be no bankruptcies in the past 4 years. Only for profit companies qualify, and they must have positive trends in sales growth. Generally amounts are available of up to $12 million with terms up to 25 years.

Which Funding Options Are Best For You?

If you only qualify for one type, this is a no brainer. But, what if more than one option will work? You need to weigh the cost vs. the benefit. For example, is not having to use collateral worth a higher interest rate? Can you get the amount that you need? Will one option get cash in your hands faster than the other? Do you need the money faster, or can you wait a bit to take advantage of better terms or rates?

When it comes to any of these funding options, it is best to work with a business credit expert. This is someone that can listen, take what you need, apply it to what is available to you, and help you choose the best option that you can get.

Not only that, but they can help you evaluate the fundability of your business and make changes if necessary to ensure you can get the best funding options available far into the future.

Start the process now with a free consultation.

The post 9 Funding Options to Fit Any Business appeared first on Credit Suite.

Use This Secret Weapon to Slay Your Funding Foes and Find the Best Sources of Alternative Loans for Businesses

Are you struggling to get funding for your business? Never fear, alternative loans for businesses are here. They tend to get a bad rap. This is mostly due to the fact that predatory lending runs rampant in today’s world, and it’s hard to know who to trust and who is scamming you. However, not all sources of alternative business financing are created equal.

10 Alternative Loans for Businesses to Help Your Business Soar

Nothing is guaranteed and things change every day. Still, at the moment, these 10 alternative lenders for small business tend to work well for many. They also offer a wide range of alternative business financing options to fit a variety of needs.

Learn business loan secrets and get money for your business.

Fundation

When it comes to alternative loans for businesses, Fundation provides both term business loans and lines of credit. It is most known for its working capital financing options. These are funds meant to help cover the day-to-day costs of running a business rather than larger projects.

StreetShares

StreetShares has its roots in lending to veterans. They still hold true to that mission, but now offer term loans, lines of credit, and contract financing to all types of business owners. The maximum loan amount is $250,000, and preapproval only takes a few minutes. They use a soft pull on your credit so it doesn’t affect your score.

BlueVine

There are two options for small business financing with BlueVine. They include lines of credit and invoice factoring. Minimum loan amount is $5,000 and maximum loan amount is $100,000. Annual revenue must be $120,000 or more and the borrower must be in business at least 6 months. Personal credit score has to be 600 or above.

Fundbox

With Fundbox, you get an online lender that offers a super-fast automated process. Originally, they only had invoice financing. Yet, now they offer a line of credit service as well. Repayments are automatic on a weekly basis. So,be sure you have enough funds in whatever account you let them draft from to cover your payment each week.

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. There is one catch though. 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.

Learn business loan secrets and get money for your business.

Fora Financial

Fora Financial was founded in 2008 by college roommates. It 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 online. If you receive approval, your loan funds will go directly to your bank account.

Lendio

The secret to Lendio’s success is excellent customer service and a short, easy application process. The loan-connections service it offers slashes the time it takes to find the right alternative loans for businesses. This is due to its heavily vetted network of lenders.

Credibly

Credibly is a specialized lender offering unsecured business loans online. The application process and funding can be complete in as little as two days, sometimes less. They offer daily and weekly repayment options.

Upstart

Learn business loan secrets and get money for your business.

Warning: Alternative Loans for Businesses Aren’t for Everyone

Despite the fact that these alternative lending companies tend to offer alternative loans for businesses with less stringent requirements, they won’t work for everyone. Alternative financing methods are just not always a good fit. Here is another other option. Keep reading to the end for a sure-fire way to ensure you can always qualify for the business funding you need when you need it.

The Credit Line Hybrid

What if there were alternative financing options that allowed you to have an even better interest rate than a secured loan, and yet get the money faster and easier than any type of traditional funding. What if you could get business funding without having to supply bank statements or check stubs? This is exactly what the Credit Line Hybrid offers.

This is alternative funding for small business that allows you to fund your business without putting up collateral. You only pay back what you use. You do need good personal credit however. 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 6 credit inquiries. Also, you should have less than a 45% balance on all business and personal credit cards. In addition, you need at least 2 credit cards with at least 2 years credit history.

If you don’t meet all those requirements, you can still qualify. 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.

Use This Secret Weapon and Always Get the Business Funding You Need

To be eligible for the highest limits and best rates when it comes to business credit, your business has to be fundable. There are over 100 factors that impact the fundability of a business. It is a complicated web to weave through. Things from decades ago, long before you ever imagined owning a business, can affect fundability.

The key to having a strong, fundable business that can qualify for any funding is to work with a business credit expert. What can a business credit expert do for you?

Help you assess the current fundability of your business
Guide you to the most effective and efficient ways to improve fundability if necessary
Help you find the best funding options for your business right now
Guide you in what specific, actionable steps you need to take to qualify for more funding with better rates
Leverage lender relationships to cut through a lot of the red tape and bureaucracy that can keep borrowers from getting the information they need, when they need it

It’s common for a borrower to call a lender or vendor credit department directly and not be able to find out if they report to the business credit reporting agencies, or exactly what they are looking for when it comes to credit approval.

A business credit expert already knows a lot of this information, and what they don’t know, they know how to get. They also know their way around alternative sources of financing for business, so they can offer guidance in this area as well.

This is your number one top-secret weapon to getting your business to a point where you know you can get funding when you need it. Try a free consultation with a Credit Suite business credit expert to get started now.

The post Use This Secret Weapon to Slay Your Funding Foes and Find the Best Sources of Alternative Loans for Businesses appeared first on Credit Suite.

Use This Secret Weapon to Slay Your Funding Foes and Find the Best Sources of Alternative Loans for Businesses

Are you struggling to get funding for your business? Never fear, alternative loans for businesses are here. They tend to get a bad rap. This is mostly due to the fact that predatory lending runs rampant in today’s world, and it’s hard to know who to trust and who is scamming you. However, not all … Continue reading Use This Secret Weapon to Slay Your Funding Foes and Find the Best Sources of Alternative Loans for Businesses

How to Get Funding for Women Owned Companies

Women owned companies are exploding onto the scene. In fact, you may be surprised to learn that companies such as Cisco, Liquid Paper, The Body Shop, Spanx, and Proactive are all owned by women.

What Women Owned Companies Need to Succeed

Women owned companies are definitely becoming a force in the entrepreneurial world. According to Fundera, 40% of US businesses are owned by women. If you are ready to join the ranks, here is what you need to know.

Women Owned Companies: Start Off On the Right Foot

All businesses, including women owned companies, need strong fundability. This starts with how your business is set up. The first part of this is separating the business from yourself. This starts with having separate contact information, meaning you do not use your personal address or telephone number as your business address or telephone number.

That sounds easy enough. However, many entrepreneurs, especially women, choose to start their business from their residence. It makes sense. In theory, a female business owner could better manage a home and children if running a business from home. Even a woman, or a man for that matter, without a family could find benefit in the flexibility of running their own business from home. There is no commute, you cut the cost of buying lunch out, and you can work in your pajamas.

Foundation of Fundability

While some would argue these things are not all they’re cracked up to be, one thing is for sure. It is definitely tempting to use your personal contact information as your business information if you work from home. There are two things you need to know about this.

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

Contact Information

First, regardless of where you run your business from, you do not need to use your personal contact information as your business contact information. Second, you can still run your business from your home and still have separate contact information for your business.

The phone number part is easy. You could get a separate phone, but it isn’t necessary. It is easy enough to get a number that works through the internet. You can then forward it to your regular phone, and whenever someone calls your business number it will ring to your personal phone.

An address is a little trickier, but not impossible. Whatever you do, don’t use a P.O. Box or an UPS box. Many types of funding will not accept this type of address. They want to see a physical address.

Other Setup Information

This is not the only issue with setting up your business to be fundable. But it is the first step. After that you need an EIN, you need to incorporate, and you absolutely must get a D-U-N-S number. You also have to open a dedicated business bank account.

The whole point in setting up your business to be fundable is so that you can get funding for your business. There is a huge catch 22 here, as if you are already running a business and are not yet set up to be fundable, you may need money before you can get it done. The set up is only one piece of the fundability puzzle. There are over 100 different fundability factors that lenders consider. Building business fundability takes time.

Best Funding for Women Owned Companies Right Now

The problem is, the longer you wait, the hard it gets to build fundability. Not only that, you need money now, right? How do women owned companies get the funds they need to grow and thrive, or just survive, in the meantime? We have a few suggestions.

Credit Line Hybrid

The credit line hybrid is unsecured business financing. It is available to pretty much anyone for any type of business expense. You can use it for real estate, equipment, working capital, and even startup expenses. Not only that, but there is no security required. Furthermore, there is no down payment, and you do not have to provide income documentation. It is completely no-doc financing.

You do need to have personal credit of 680 or above. Also, there cannot be any late payments in the past 12 months, there can be no open collections or bankruptcies, and there should be less than 4 inquiries in the past 6 months on your consumer credit report. There also has to be at least 2 open credit cards with a $2,000 limit or higher with 2 years of good payment history.

If you do not meet these requirements, you can take on a credit partner that does meet them. The payments will still be reported on the business’s credit report, so business credit will build whether you get the financing yourself or through a credit partner.

You can get up to $150,000, and often interest rates are as low as 0% for the first 6 to 18 months.

Business Revenue Lending

If your business has consistent revenue of $120,000 per year or more, you may qualify for this type of funding. Lenders verify revenue using bank statements. There can be no recent bankruptcies, but the minimum credit score to qualify is as low as 500.

A business must also be in operation for a year or more, and they must do over 5 small transactions each month to get business revenue financing.

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

Merchant Cash Advance

If your business accepts credit card payments and you have at least a 500 FICO, you could get up to $750,000 in a merchant cash advance. Credit rates are usually lower compared to traditional financing as well.

Your business must bring in $100,000 or more per year in credit card sales, and typically you can get approval equal to one months credit card financing volume.

Account Receivable Financing

Receivables should be with the government or another business. Getting financing with receivables from individuals is not as easy. If you also have purchase orders, then you can get financing to have those filled. You won’t need to use your cash flow to do so.

Equipment Financing

The equipment must be new, and most types of equipment are acceptable, including software.

You’ll need to provide details on the equipment to be financed and, depending on the loan amount and certain risk factors, you may need to show 2 years corporate and personal tax returns.

Enterprise SBA Loans

For these loans you have to have collateral worth up to at least 50% of the loan amount, but you only need a FICO of 620. There also can be no bankruptcies in the past 4 years. Only for profit companies qualify, and they must have positive trends in sales growth. Generally amounts are available of up to $12 million with terms up to 25-years.

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

Women Owned Companies Can Get the Funding They Need

While there are some women business grant opportunities out there, they are highly competitive and rarely enough to fully fund business needs. These funding options are great for immediate cash needs, and you can work on building your fundability in the meantime. Once your business has strong fundability, you can have pretty much any business funding you need.

The absolute best way to build fundability is with the help of a business credit expert. They can walk you through the complicated web of the many factors that affect fundability, including helping you find accounts that will report to your business credit profile. That is the only way to build a business credit score.

The post How to Get Funding for Women Owned Companies appeared first on Credit Suite.

How to Get Funding for Women Owned Companies

Women owned companies are exploding onto the scene. In fact, you may be surprised to learn that companies such as Cisco, Liquid Paper, The Body Shop, Spanx, and Proactive are all owned by women.

What Women Owned Companies Need to Succeed

Women Owned Companies: Start Off On the Right Foot

Foundation of Fundability

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

Contact Information

Other Setup Information

Best Funding for Women Owned Companies Right Now

Credit Line Hybrid

The credit line hybrid is unsecured business financing. It is available to pretty much anyone for any type of business expense. You can use it for real estate, equipment, working capital, and even startup expenses. Not only that, but there is no security required. Furthermore, there is no down payment, and you do not have to provide income documentation. It is completely no-doc financing.

You can get up to $150,000, and often interest rates are as low as 0% for the first 6 to 18 months.

Business Revenue Lending

A business must also be in operation for a year or more, and they must do over 5 small transactions each month to get business revenue financing.

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

Merchant Cash Advance

Your business must bring in $100,000 or more per year in credit card sales, and typically you can get approval equal to one months credit card financing volume.

Account Receivable Financing

Equipment Financing

The equipment must be new, and most types of equipment are acceptable, including software.

You’ll need to provide details on the equipment to be financed and, depending on the loan amount and certain risk factors, you may need to show 2 years corporate and personal tax returns.

Enterprise SBA Loans

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

Women Owned Companies Can Get the Funding They Need

The post How to Get Funding for Women Owned Companies appeared first on Credit Suite.

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There are Terrific Grant Funding Opportunities Out There for Small Businesses

Check Out Exceptional Grant Funding Opportunities

Are you looking for grant funding opportunities? Grants are exceptionally competitive, and they often require filling out a lot of paperwork. Still, if you can get them, they are essentially free money. So, if you feel you have a better than 50% chance, then it makes sense to go after appropriate grants.

It tends to help if you are a member of a minority or a protected class. Also, it can help if you are bringing in something new to an area that needs it. For example, rural electrification grants seem to always be available.

Let’s start with entrepreneurs who are members of minorities and protected classes.

Business Grant Funding Opportunities for Women

As female entrepreneurs continue to come into their own, the government and private ventures offer more grant funding opportunities. Here are a few to get you going.

Amber Grant

Women have some great grants open to them. The Amber Grant awards one prize of $10,000 per month to a woman-owned business. One of the recipients also receives an additional $25,000 grant at the end of the year. Applicants only need to tell their story and turn it in with a $15 application fee. See ambergrantsforwomen.com/get-an-amber-grant/apply-now

Cartier Women’s Initiative Award

Businesswomen can also try for a Cartier award. This award is for women of all classes and groups. The Cartier Women’s Initiative Award has a regional category award and a science and technology award. The regional award is $100,000 for first place, with $30,000 for second and third place.

The award goes to three women from each of seven international regions. This award is a grant to 21 female business owners from around the world each year. Women business owners who are just getting started may qualify. Look over the complete application for more information. See cartierwomensinitiative.com/about-us

Cartier Science and Technology Pioneer Award and Fellowship

The Cartier Science and Technology Pioneer award is new as of 2021. With this award, three more women impact entrepreneurs at the forefront of scientific and technological innovation will be recognized for a new thematic award. Open to women entrepreneurs from any country and sector, this award will highlight disruptive solutions built around unique, protected, or hard-to-reproduce technological or scientific advances.

The laureate will be awarded a $100,000 grant. Each of the two remaining finalists will receive a $30,000 grant.

Cartier also offers a fellowship program. The fellowship is an educational program geared towards the 24 fellows selected each year. This program aims to equip the fellows with the necessary skills to grow their business. Also, it helps them to build their leadership capacity by drawing upon the experience and expertise of an array of academics, practitioners, industry experts, and entrepreneurs.

The fellowship isn’t exactly a grant. But while it’s not a monetary award, the mentoring and networking opportunities could be worthwhile to apply for. See cartierwomensinitiative.com/fellowship-programme.

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

Grant Funding Opportunities for Black Business Owners

Entrepreneurs who are African American have other choices when it comes to grants. And for persons who are members of more than one minority – such as black women or people who are both Asian and Native American – there are more choices.

National Black MBA Association Scale-Up Pitch Challenge

Also known as NBMBAA, the Scale-Up Pitch Challenge has cash prizes ranging from $1,000 to $50,000. The association states its purpose is to help newer businesses that have an African American ownership. This is a pitch competition for startup businesses. See nbmbaa.org/scale-up-pitch-challenge.

The Minority Business Development Agency

The Minority Business Development Agency (MBDA) is operated by the US Department of Commerce. It is dedicated to helping minority-owned businesses access the resources they need to grow and succeed. The MBDA is for both men and women. Grant competitions are regularly changing.

Visit the MBDA’s website for information on all current opportunities. Currently, the MBDA helps its members apply for grants via Grants.gov. This involves help with how to apply for government grants. See mbda.gov/grants.

Enterprising Women of Color Initiative

The MBDA oversees the Enterprising Women of Color (EWOC) Initiative. The initiative works to focus on the fast-expanding minority women entrepreneur population as a revenue generators for families, communities, and the nation. Minority women are the fastest growing population of entrepreneurs. While many women are making tremendous strides in the business world, they still face obstacles as entrepreneurs.

MBDA serves as an advocate for women’s economic empowerment, by supporting efforts to advance women’s equality and promote women economic advancement programming. The vision of EWOC is to ensure women worldwide to reach their economic potential. See mbda.gov.

Grant Funding Opportunities for Native American Entrepreneurs

The Native American Business Development Institute (NABDI) Grant

Are you all or part Native American? Then check out this grant.

The NABDI Grant is funded by the US Department of the Interior’s Bureau of Indian Affairs. It provides funding to business owners of Native American or Alaskan Native descent. In 2019, the program provided more than $727,000 to 21 indigenous tribes, to support economic feasibility studies for specific economic development projects or business startups.

For 2020, NABDI planned to award 20-25 grants. There is no minimum or maximum amount of funding that can be requested, but most awards range in value from $25,000 to $75,000. They only fund projects for one year at a time, which is when they expect projects to be completed. To apply for a NABDI grant for your proposed economic development feasibility study, go to bia.gov/service/grants/tedc/apply-nabdi-grant.

Indian Affairs

For business owners with Native American heritage, there is more available via the Bureau of Indian Affairs. Businesses owned by Native Americans can get financing from the federal government through the Indian Affairs branch. An individual can fill out an application for up to $500,000, but business entities and tribal enterprises may apply for more.

Potential borrowers can apply with any lending institution, they just have to use the application for Indian Affairs. There are additional requirements if you use the funds for construction, renovation, or refinancing. In general, you must supply a list of collateral, a credit report, and an analysis of business operations. See bia.gov/as-ia/ieed/loan-guaranty-insurance-and-interest-subsidy-program.

First Nations Development Institute Grants

The mission of this group is to offer grants that help Alaska Natives, Native Hawaiians, and Native Americans. They help in the application process in addition to funds. First Nations also helps point individuals to appropriate grants offered by other organizations, including the US government. This includes help with writing grant proposals. See firstnations.org/grantmaking.

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

Grant Funding Opportunities for South Asian Entrepreneurs

The South Asian Arts Resiliency Fund

If your business is in the arts, and you’re also of South Asian descent, then check out this fund. The fund is run by the India Center Foundation. It supports US-based South Asian arts workers impacted by the COVID-19 pandemic.

The fund will disburse grants up to $2,000, depending on financial need to US-based arts workers of South Asian descent. This includes those in the performing arts, film, visual arts, and literature with heritage from Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka. Initial funding for the program is $20,000, but the India Center Foundation is soliciting donations to expand the grant program.

Eligibility for The South Asian Arts Resiliency Fund

To be eligible, applicants must be of South Asian descent. Also, they must work in the arts and demonstrate loss of income due to COVID-19. Also, applicants must be:

at least 21 years old
not enrolled in a degree program, and
able to receive taxable income in the US

You can put grant funding toward any artistic project you can develop, create, and present. It must be within four to six weeks of getting funding. See theindiacenter.us/artsfund.

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

Grant Funding Opportunities for Science-Based Businesses

The National Science Foundation supports small businesses with contracts and grants. They award nearly $190 million annually to startups and small businesses. This is through the Small Business Innovation Research (SBIR)/Small Business Technology Transfer (STTR) program.

The idea is to support transforming scientific discovery into products and services with commercial and societal impact. These grants support R&D across almost all areas of science and technology. To learn more about SBIR/STTR, visit https://seedfund.nsf.gov. See also nsf.gov/funding/smallbusiness.jsp.

Grant Funding Opportunities in Response to the Pandemic

The Verizon Small Business Recovery Fund

The Verizon Small Business Recovery Fund is new. It was established in response to the COVID-19 pandemic. The fund offers $10,000 to successful applicants. The fund is specifically focused on providing grants to business owners of color, women-owned businesses, and other underrepresented entrepreneurs. See lisc.org/covid-19/small-business-assistance/small-business-relief-grants/verizon-small-business-recovery-fund

Grant Funding Opportunities from the US Government

Grants.gov

Grants.gov is a running list of more than 1,000 available federal government grants. The website compiles grants from over two dozen government agencies. Such as the SBA, USDA, and the US Department of Commerce. To find a grant right for your business, use the Search Grants tool on the website. You can sort through the list of grants by keyword or opportunity number.

The USDA is where those rural electrification grants are.

Once you have located the grant you wish to apply for, click the opportunity number for more detail. There, you will find more information about the specific grant as well as any associated documentation you may need. To apply for a grant through Grants.gov, you must first register. Then, you can download an application package for the grant you want to get. Be ready for a lengthy process. See grants.gov.

Alternatives to Grants: Crowdfunding

If you would rather not rely on grants so much to fund your business, crowdfunding is a viable option. Keep in mind, not everyone with a campaign on a crowdfunding site is successful. More unique products and services tend to do better. Kickstarter and Indiegogo are two of the most popular crowdfunding platforms to use. Some platforms may have higher success rates than others.

Alternatives to Grants: Angel Investors

Angel investors are informal investors. Essentially, you are selling a part of your business to them. They tend to not want a huge percentage of your business. Also, they won’t pass by more conventional businesses, like with crowdfunding and venture capital. Hence they can be another supplement or replacement for grants.

Alternatives to Grants: Loans

If grants aren’t an option, loans might work for you.

Business Center for New Americans

If you’re an immigrant, try the Business Center for New Americans. They offer a pilot program for microloans up to $75,000. They work with immigrants, refugees, women, and other minority entrepreneurs. The goal is to help minority business owners who have not been able to get traditional financing. Terms are 3% interest. Loan repayment term goes up to a year. See accompanycapital.org.

Grant Funding Opportunities: Takeaways

The government and private organizations want to GIVE you money! Grants are a great way to supplement other business funding. And they are still worth the effort to apply. So there really isn’t anything to lose except time – it’s free money.

There are several grant funding opportunities out there for entrepreneurs. Members of minorities and protected classes tend to get some preference. But all entrepreneurs should apply for whichever grants they feel they are most likely to get. Also, other options for funding include crowdfunding, angel investors, and loans. Credit Suite can help you get the funding you need.

The post There are Terrific Grant Funding Opportunities Out There for Small Businesses appeared first on Credit Suite.

Can the Best Hard Money Lenders Make this Form of Business Funding Worthwhile?

What are the Best Hard Money Lenders, and is Hard Money Lending Worth It?

Even the best hard money lenders can be problematic. Read on to find out more.

Hard Money Lenders and Hard Money Funding

If you’re looking to flip houses, you may have heard these terms. But what is hard money funding, and can it work for you?

Hard Money Funding: What Is It?

Hard money loans are asset-based loans that can fund any real estate investment. These loans are based on the property value. There is no need for background checks or credit scores. Some lenders even offer hard money loans based on the after-repair value of a building. Hard money lenders make finance house flipping with their asset-based loans.

Hard Money Funding: Positives

Since it’s based on the real estate value (before or after repair), a borrower with poor credit can get these loans. Hard money loans are fast, sometimes even within 24 hours of application.

Hard Money Funding: Negatives

Interest rates can be very high, as in three times that of banks. Terms can be very short, as in 6 – 18 months, versus a standard 30-year mortgage.

Plus a hard money lender wants you to have some skin in the game, typically at least 10% of your own money. That way the lender knows their interests are protected, because you don’t want to lose your money. Hard money loans also tend to not be subject to consumer lending regulations. So, caveat emptor.

How is Hard Money Funding Used?

If you go ahead with hard money funding, its use is virtually always for real estate projects. These are either house flipping, or real estate investments.

Fix and Flip Loans

House flipping consists of buying a property, repairing it, and selling it for a profit. Fix and Flip loans are one of the most common types of hard money loans. For house flippers, having fast funds for their flips is a necessity. These hard money loans are made for house flippers looking to flip a property by making some upgrades and selling it for a profit.

Fix and flip loans are short term loans (6 – 12 months) covering almost all the house flipping costs. Hard money funding is not only used to cover the property value of the building. It also pays for a portion of the repairs needed to flip. For example, some hard money lenders even offer to base the loan on the after-repair value of the flip. This gives the house flipper more funds to flip with from fix and flip lenders.

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

Long Term Rentals

House flippers don’t always sell the buildings they repair. Many make passive income by renting their properties. For those looking to acquire and upgrade large rentals, hard money funding is essential. This type of flipper financing lends on the underlying asset of the property.

To make the most of long-term rentals, upgrading and repairing the property is necessary. Here, hard money loans are based on the after-repair value of the property. House flipper funding for large one-time repairs to a property helps improve the property for higher rents. It also helps to offset the cost of the repairs.

Vacation Rental Flips

With alternative rental sites like Airbnb becoming more and more popular, house flippers are looking into flipping vacation rentals with hard money loan lenders. Vacation rentals can turn over large profits but many will require large repairs to get more bookings. These repairs and modern upgrades are necessary to ensure solid bookings throughout the year. Using hard money funding to make upgrades is faster than using a traditional lender. Like all flipper financing, the loan is based on property value and not the applicant’s credit history.

Home Rehabs

Paying cash for a property is a great way to lower costs for a property. But it leaves gaps for funding repairs. Home rehabs are ideal for one-time large repairs. This can be for a flip that they bought in cash, a rental, or anything in between.

Often when looking to charge more in rent, house flippers will add amenities and upgrades to their properties. Home rehabs can also be for investors looking to sell off property and maximize their return by adding a few upgrades. With only using flipper financing for the repairs, the house flipper can save money on down payments. This means a larger profit margin via hard money lending. Hard money funding can be a way to make sure projects finish on time.

Hard Money and Bridge Loans

Sometimes house flippers need to refinance properties to prevent foreclosures, get better rates, or get more cash to finish their flip. Bridge loans, a special type of flipper funding, can help flippers complete their projects to save them from foreclosure. Bridge loans work to ‘bridge’ cash gaps for a property. This cash is used to finish the flip, sell the property, or prevent foreclosure.

Hard Money, Bridge Loans, and Foreclosures

Sometimes, house flippers will use hard money loans to buy foreclosed properties. This makes them a great option for someone looking to pounce on a great deal in the fast-moving real estate market. Sometimes bridge loans fund short sale loans, or even the acquisition of off-market properties. They can help you get a hard money loan for auction property.

Hard Money and Refinancing

Reasons for refinancing include to prevent foreclosure, fill in cash flow, or make sure a project is done on time. Hard money funding can help with all of these issues. This type of funding works for house flippers who need a one-time influx of capital.

Hard Money Funding: Beyond the Flip

Hard money funding can be used for more than flips. It can also be used for commercial real estate financing. This is for commercial properties such as retail stores. Note: hard money loan rates will vary.

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

Options Beyond Hard Money Lenders and Funding

Flippers and commercial real estate investors have choices beyond hard money loans. They can try a home equity loan for flipping, or an investment property line of credit for real estate investments. Another option is a business line of credit.

Yet another option is a cash out refinance loan, or a permanent bank loan/online mortgage. Rates and terms will vary. But for great rates, have you checked out what Credit Suite has to offer?

Check Out Commercial Real Estate Financing from Credit Suite and Connect to Hard Money Lenders

Amounts range from $100,000 – $20,000,000. This financing can be used for refinancing a property, even if you are doing a cash-out refinance. Maximum LTV 70%.

Loan-to-values range from 55 – 65%, depending on the purpose of the loan. Plus your clients can also get SBA loans. Renovations get loan to value of up to 60%.

Credit Suite has funding programs available including conventional property financing, money for investment properties and hard money loans, bridge loans and loans for the purchase of commercial real estate.

Commercial Real Estate Financing for All Types of Buildings

Credit Suite offers financing for many different, even unique property types. Get funding for industrial offices (general or medical/dental), light manufacturing buildings, self-storage facilities, and more.

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

Details on Credit Suite’s Commercial Real Estate Financing Program

Approval amounts go up to $20,000,000. Bad credit is accepted. Use the real estate as collateral. You will need to provide bank statements. House reseller financing or a commercial real estate loan can be a big step, let’s take it together.

The Best Hard Money Lenders? The Jury is Still Out on Whether This Form of Funding is the Best Idea

Hard money funding can be a good choice for house flippers and commercial real estate investors who have bad credit or want/need to get money fast. But interest rates can be high, and terms can be short. Plus there is little regulation. Credit Suite can help you get funding for commercial real estate or house flipping, with better rates and terms than you would expect.

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