Tag: Funding

How to Supplement Funding with Minority Business Grants

While it’s almost impossible to fully fund a business on grants alone, minority business grants are a great way to supplement other types of funding.  For example, if you win a grant, you can use it to reduce the amount of debt you need to take on. You could use the funds to reduce the amount of cash on hand you have to use.  In turn, this would reduce the need to take on debt in the future. Grants can be a great funding option for minority owned business.

Minority Business Grants are a Great Way to Supplement Funding

Of course, finding and winning minority business grants is easier said than done.  It takes considerable time and work to do so. First, you have to do the research to find the grants you qualify to apply for.  Then, you have to do the work of filing the grant application. In some cases, the application is just the first step in a long, competitive process. 

Why Bother with Minority Business Grants?

Some wonder what the point is in even bothering to try to get grants if they are so rare and competitive.  Is it worth it if they are so hard to get? The simple answer is, yes. Grants are free money. The funds never have to be repaid. If you win a grant, you get to keep the funds free and clear.  

However, there are sometimes compliance points that come into play.  There may be certain rules for the use of the funds you have to adhere to.  Still, when it comes to minority business grants, they are all designed to help you build a better business.  For free money, the compliance hassle is a small price to pay. 

Where Do Minority Business Grants Come From? 

They come from a variety of sources.  The government issues some grants from minority business owners.  Special agencies will sometimes have grant opportunities. Even private businesses will offer grants sometimes, including big names like FedEx. 

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Learn business loan secrets and get money for your business. 

Do You Qualify for Minority Business Grants?

Who knows?  Maybe? If your business is under more than 51% minority ownership, the answer is likely yes.  Other than the minority ownership piece, some minority business grants are designed for a specific minority group. It can take some time to seek out those grants for which you specifically qualify. 

Some Minority Business Grants to Try

Here are some minority grant options to consider.  There are certainly others out there however, and they are not always well advertised.  This means you need to be sure to do your own research also. 

Minority Business Grants: First Nations Development Institute Grants

The mission of this group is to offer grants that help Alaska Natives, Native Hawaiians, and Native Americans.  They offer assistance in the application process in addition to funds.

Not only that, but there are a wide range of opportunities from the First Nations Development Institute.  New ones initiate as old ones retire. There is a mailing list you can join to receive information about new opportunities as they become available.

Minority Business Grants:  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 associate states its purpose is to help newer businesses that have an African founder that maintains equal ownership.  

A business must be a member of the NBMBAA to compete.  There is a $10 monthly membership fee. After that, there is an online application.   If chosen, you must submit a three-minute pitch. Then, finalists go on to compete at the NBMBAA annual conference.

Non-Minority Specific Options

There are grants options that can work well even though they are not exclusively for minorities. Some examples include the following.

FedEx Small Business Grant

This grant is the company’s way of working to strengthen small business innovation.  There are 10 grants the company awards each year. They range from $15,000 to $50,000, and if you’re a minority owned business with a cutting-edge product, this could be the grant for you.

A business must use the FedEx website to submit entries. There are a few questions to answer about your business.  In addition, there is a requirement for an elevator pitch about what makes your business special.  Also, you have to explain how you would use the grant funds. A 90 second video submission is optional.

NASE Growth Grants

The National Association for the Self-Employed (NASE) has small business Growth Grants of up to $4,000. They are for micro-businesses, and proceeds can be used for a number of things.  They can be utilized for marketing, advertising, expansion, and even to hire employees. These grants are open to everyone. However, you do have to be an NASE member to apply. Membership fees vary based on the membership level chosen. 

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Learn business loan secrets and get money for your business. 

USDA Value Added Producer Grant

The USDA’s Value-Added Producer Grant (VAPG) program offers grants for small businesses.  It includes minority owned business. Grants range up to $250,000. They are specifically to help agricultural producers with activities that add value to their products. As a result, grants are open to those in rural areas.  They must be operating as one of the following: 

  • Cooperative
  • Farmer
  • Rancher
  • an independent agricultural producer
  • or an agricultural producer group 

What About Loans? 

As I said above, you can’t fund a business on grants alone.  They work better as a supplemental funding source. Likely, you will need to seek out business loans.  There aren’t a ton of loans specifically for minorities, but some options do work better for minority business owners than others. 

Minority Specific Loans

Minority specific business loans are few and far between.  However, they do exist. Some only offer minority business loans to those in certain cities.  Some are only available if you are looking to land government contracts. Each have their own requirements, and it takes a ton of time and research to figure it all out.   With the information below though, you don’t have to start from scratch.

Business Consortium Fund, Inc.

This program is specifically for minority businesses.  It is certified by the US Department of the Treasury. Businesses can qualify for $75,000 to $500,000 after approval.  Also, amounts above $500,000 are available on a case by case basis.  

Allowable fund usage includes working capital, equipment financing, and contract financing. To apply, you have to certify your business through The National Minority Supplier Development Council. In addition, you must have a supplier relationship with the Council. 

National African American Small Business Loans

These loans are only available in Chicago, Los Angeles, and New York.  The NASBLF  provides capital to African American minority-owned businesses.  Specifically, those that are not eligible for more traditional forms of financing.  

Loans range from $35,000 to $250,000.  In addition, other services are available. These include technical assistance and financial consultation services. Business owners can use funds for expansion, equipment purchases, and cash flow. They only have $30 million total to loan out in a year, unless more grant funds become available to the program.

Accion

Accion offers loans in all states.  Funds are available to the following: 

  • minorities 
  • veterans
  • women
  • those with disabilities
  • and low to medium income business owners

Loan amounts start from $200,000 and go up to $300,000. Business owners can use them to help build businesses from the beginning.  Accion can also put owners in contact with other resources to help build a network of support.

The minimum credit score for these loans is 575.  In addition, you cannot be 30 days late on credit cards, loan payments, or bills.  Also, you will not qualify if you have any late rent or mortgage payments over the past year.

Community Development Financial Institutions Fund (CDFI)

This group lends to those communities that are traditionally underbanked, including business owners that are minorities.  Since the Community Reinvestment Act of 1977, banks are required to offer funding in communities that find it hard to qualify for traditional funding.  Big banks often fund minority business owners indirectly through their CDFI partners.  

To locate a CDFI, contact the local business development center or your local Small Business Development Center office.  They can hook you up.  

While the application process can be long, they do offer assistance to prepare for future bank loans.  Another benefit is that their rates are competitive within the U.S. 

Union Bank Business Diversity Lending Program

This program from Union Bank assists minority business owners with loans and lines of credit. To qualify as a minority for this program you must be Hispanic, American Indian, Latino, Asian, Alaskan Native, African American, Native Hawaiian, or other Pacific Islander.   

A business that has revenue of up to $20 million could qualify for a loan of up to $2.5 million.  However, you must be in business for at least 2 years, and the minority business owner must own at least 51 percent. 

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 my apply for more.  

Potential borrowers can apply with any lending institution, they just have to use the application for Indian Affairs.  Additional requirements are in place if the funds are used for construction, renovation, or refinancing. In general, a list of collateral, a credit report, and an analysis of business operations are required.

Camino Financial 

Camino Financial is an online lender that offers minority-owned businesses loans.  They also offer business solutions. They are an easy and convenient option.  Mostly because they offer the entire application process online. Microloans range from $5,000 to $50,000.  Also, they offer small business loans between $10,000 to $400,000. 

There is no requirement for security.  In addition, you can pay off the loan any time with no penalties or fees. Pre-qualification comes within 24 hours.  Since all documents are submitted online, you do not have to make unnecessary trips to turn in or sign papers either. 

Other Loans that Are a Good Option for Minority Businesses

While not specifically for minority business owners, these loans often work well for them.

Fundbox

Surprisingly, there is no minimum credit score.  Consequently, if you have at least $50,000 in annual revenue, you can qualify for a line of credit from Fundbox.  Additionally, you need to be in business for at least 3 months.  Amounts range from $1,000 to $100,000 with rates from 10.1% to 79.8%.  Terms are for 12 weeks, and funds are available as quickly as the next business day.  

Kabbage

Kabbage is another lender that will make loans to borrowers with credit scores as low as 500.  Terms are for 6, 12, or 18 months and amounts range from $2,000 to $250,000. Interest rates are higher, at 24% to 99%.  Funding can take several days, but sometimes happens in just a few minutes. 

QuarterSpot

Another option is QuarterSpot.  In fact, some prefer it due to terms that go up to 18 months.  Loans range from $5,000 to $250,000. However, rates are pretty high at 30% to 70%.  Still, approval can come in as little as 24 hours. 

Credibility Capital

Credibility Capital loans range from $50,000 to $400,000.  Terms are for 1,2, or 3 years, with rates ranging from 10% to 25%.  Like most, funding usually takes around 7 days.  

SmartBiz

Lastly, SmartBiz offers low cost financing for expansion.  Unlike the others, these are SBA loans. However, with SmartBiz, funding happens a lot faster than with traditional financial institutions.  Truthfully, they can take as little as a few weeks instead of a few months. 

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Learn business loan secrets and get money for your business. 

Minority Business Grants and Loans Make a Winning Combination

A business with minority ownership has resources available to it that are not available to all business owners.  They come in the form of both loans and grants for minorities. Pursuing both allows you take advantage of as many resources as possible. 

If you still need more, you can apply for loans that are not specifically for minority owned businesses.  Even if you do not qualify for traditional financing due to a low credit score, there are options.  

Regardless of what combination of funding works best for you, remember to ensure your business is as fundable as possible.  Find out more about fundability and what affects it here. 

The post How to Supplement Funding with Minority Business Grants appeared first on Credit Suite.

Additional Minority Owned Business Funding Sources are Available if You Know Where to Look 

The United States is known as the melting pot for a reason.  It is full of people with roots stretching worldwide. Some countries are less represented than others however.  This means we have a lot of citizens in minority groups. In some areas of the country, the entire population is part of a minority group.   In 2016, there were 8 million minority owned businesses.  This was up 38% from 2007 data.  If you have a minority owned business, then you have some additional funding options. 

Additional Funding Options for Your Minority Owned Business

These options come in the form of loans and grants for minority owned business.  You need to know where to look. You also need to know eligibility requirements. This will help you prepare your application.  A great application will help to improve your chance of winning a grant or loan approval. 

Check out our professional research on bank ratings, the little-known reason why you will – or won’t – get a bank loan for your business. 

Minority Owned Business Grants

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Grants are basically free money. You never have to pay it back.  However, they are also highly competitive. In addition, they are rarely enough to completely fund a business.  Still, grant money can reduce the need to borrow money.  

Here are some minority grant options to consider.  There are certainly others out there though. They are not always well advertised.  This means you need to be sure to do your own research as well. 

First Nations Development Institute Grants

This group has a mission to offer grants to help Alaska Natives, Native Hawaiians, and Native Americans.  In addition to the funds, they offer assistance in the application process.

There is a wide range of opportunities from the First Nations Development Institute, with new ones rolling on as old ones roll off. Join the mailing list to be notified of new opportunities as they are posted.

National Black MBA Association Scale-Up Pitch Challenge

Also known as NBMBAA, their Scale-Up Pitch Challenge offers prizes in cash ranging from $1,000 to $50,000.  The purpose of the association is to help newer businesses that have an African founder that maintains equal ownership.  

A business must be an NBMBAA member to compete.  There is a $10 monthly membership fee. Then, there is an online application.   If chosen, a business must submit a three-minute pitch. Finalists will go on to compete at the NBMBAA annual conference.”

FedEx Small Business Grant

This grant is the FedEx way of working to strengthen small business innovation.  The company awards 10 grants. They range from $15,000 to $50,000 every year. If you’re a minority owned business owner with a cutting-edge product, this could be the grant for you.

You have to submit entry via the FedEx website. It requires that you answer a few questions about your business.  This includes providing an elevator pitch about what makes your business stand out.  In addition, you have to explain how you would use the grant funds. You can also submit an optional 90 second video.

NASE Growth Grants

The National Association for the Self-Employed (NASE) has small business Growth Grants that range up to $4,000. Grant recipients must be micro-businesses. Proceeds can be used to help your business market, advertise, expand, and hire employees. These grants are open to everyone.  However, you do have to be a NASE member to apply. Cost of membership depends on the member level you choose.

USDA Value Added Producer Grant

The USDA’s Value Added Producer Grant (VAPG) program offers grants for small businesses.  This includes minority owned business. Grants range up to $250,000. They are specifically to help agricultural producers with activities that add value to their products. Grants are open to those in rural areas.  They must be operating as cooperatives, farmers, ranchers, independent agricultural producers, or agricultural producer groups. 

Minority Owned Business Resources

These resources do not offer grants or any type of funding directly.  Still, they can be a great help and support in finding funding. They can also help with other issues that come with being a minority business owner. 

Check out our professional research on bank ratings, the little-known reason why you will – or won’t – get a bank loan for your business. 

Minority Business Development Agency (MBDA)

This agency is under the direction of the United States Department of Commerce.  It helps minority business owners and minorities that want to become business owners. They have business centers all around the country.  They offer help finding grants that could be a good fit. In addition, they offer help with the application process. 

USA.gov

While not minority specific, this website offers a list of government resources.  This includes resources for any minority owned business. It also provides links to many federal government agencies that offer loans and grants for minority small business. 

Grants.Gov

This is another resource to help find grants for your minority owned business.  In addition to a list of grant opportunities, it has information that can help you create a winning grant application package. 

There are over 1,000 grants to dig through.  Most of them are for research and development purposes.  You should still take the time to look at them, as you may find one that will work well for your business. 

Loans for Minority Owned Business

Loans for minority business owners can come from several different sources.   Some only offer minority business loans to those in certain cities. Some are only available if you are looking to land government contracts.  Each have their own requirements. It takes a lot of research to line everything out and see what is available. We have a list of some of the best options to help you get started. 

Business Consortium Fund, Inc.

This program is through the US Department of the Treasury.  Typically, businesses can qualify for $75,000 to $500,000 after approval.  Amounts above $500,000 are possible. However, they are on a case by case basis only.  

Businesses can use funds for working capital, equipment financing, and contract financing. To apply, you have to certify your business through The National Minority Supplier Development Council. In addition, a business must have a supplier relationship with the Council to be eligible. 

National African American Small Business Loans

These loans are only available in Chicago, Los Angeles, and New York.  They go to communities with low to medium incomes. The NASBLF  provides capital to African American owned businesses that are not eligible for traditional financing options.  

The range for loans is $35,000 to $250,000. Borrowers can use funds to help with cash flow, expansion, and equipment purchases. Thirty million dollars total are available each year.  

Accion

Accion offers loans in all states for minority owned business.  They also serve veterans, women, and those with disabilities.  Low to medium income business owners may also be eligible. Loan amounts range from $200,000 to $300,000. They work to help build businesses from square one.  They can also put owners in contact with other banks, non-profits, and government resources to help build a network of support.

The minimum credit score for these loans is 575.  In addition, you cannot be 30 days late on credit cards, loan payments, or bills.  Late rent or mortgage payments over the past year will also disqualify you.

Community Development Financial Institutions Fund 

CDFI lends to communities that typically lack banking options.  This includes minorities. Since the Community Reinvestment Act of 1977, banks must offer funding in communities that find it hard to get traditional funding.  Big banks often fund minority business owners indirectly through their CDFI partners.  

To locate a CDFI, contact the local business development center.  Your local Small Business Development Center office should also be able to help.  

The application process can be long.  Thankfully, they do offer assistance to prepare for future bank loans as well.  

Union Bank Business Diversity Lending Program

This program from Union Bank assists minority business owners with loans and lines of credit. To qualify as a minority for the program, you must be Latinx, American Indian, Asian, Alaskan Native, African American, Native Hawaiian, or other Pacific Islander.   

Other requirements must be met as well.  For example, you must be in business for at least 2 years, and the minority business owner must own at least 51 percent. 

Indian Affairs

Native American business owners can get loans from the federal government.  These come through the Indian Affairs branch. You apply with any lending institution.  You just have to use the Indian Affairs application.  If the funds are for construction, renovation, or refinancing, there will be additional requirements.  Generally, a list of collateral, a credit report, and an analysis of business operations are necessary.

Camino Financial 

Camino is an online lender that offers minority business owners loans and business solutions.  All processes take place online, making it an easy option. Their microloans range from $5,000 to $50,000.  They also offer small business loans between $10,000 to $400,000. There is no collateral requirement. As a benefit, you can pay off the loan any time with no penalties or fees. 

Check out our professional research on bank ratings, the little-known reason why you will – or won’t – get a bank loan for your business. 

SBA Options for Minority Owned Business

In addition to these options, the Small Business Administration has some programs that may work well, though they are not for minorities only.

SBA Community Advantage Loans

Community advantage loans are for underserved communities that need less than $250,000.  Likewise, you can find lenders that work with the SBA on this program using the SBA Lender Match tool. 

SBA Microloans

They also have microloans available of up to $50,000.  Unlike others, these are offered through nonprofit organizations. With interest rates ranging from 8% to 13% and maximum repayment terms of six years, they can work well for minority business owners.

One of the SBA’s partners in this program is The Opportunity Fund.   According to them, 90% of its borrowers are minority business owners. 

SBA 7 (a) Loans

Like other SBA programs, these are not specifically for minorities.  Still, they are available to minorities the same as everyone else. They are 10-year loans of $30,000 to $350,000.  Rates range from 9.7% to 11.04%, and they can turn around in as little as 7 days. More often they take up to several weeks. 

Private Lender Options for Minority Owned Business

Again, these are not necessarily only for minorities.  However, many alternative lenders offer loans that work well.  Specifically, minority owned businesses sometimes struggle with meeting credit score requirements.  The following loans are available with a lower credit score than what most traditional lenders require. 

Fundbox

Surprisingly, there is no minimum credit score.  In fact, if you have at least $50,000 in annual revenue you can qualify for a line of credit from Fundbox.  Additionally, you also need to be in business for at least 3 months.  Amounts range from $1,000 to $100,000 with rates from 10.1% to 79.8%. Terms are for 12 weeks, and you can have your funds as quickly as the next business day.  

Kabbage

Another lender that will make loans on credit scores as low as 500 is Kabbage.  Terms are for 6, 12, or 18 months and amounts range from $2,000 to $250,000.  So interest rates are higher, at 24% to 99%. Funding can take several days, but sometimes happens in just a few minutes. 

QuarterSpot

QuarterSpot is another option.  Many prefer it, due to terms that go up to 18 months.  Loans range from $5,000 to $250,000, but rates are pretty high at 30% to 70%.  Nevertheless, approval can happen in as little as 24 hours. 

Credibility Capital

Loans with Credibility Capital range from $50,000 to $400,000.  Terms are for 1, 2, or 3 years, and rates range from 10% to 25%.  So like most, funding usually takes around 7 days.  

SmartBiz

SmartBiz offers low cost financing for expansion.  Unlike the others, these are SBA loans. However, with SmartBiz funding happens a lot faster than with traditional banks.  In fact, they can take a few weeks rather than a few months. 

A Minority Owned Business Has Additional Funding Options Available

It’s true.  In addition to the traditional options, there are other funding resources available to help minority business owners. While many of them, like grants, will not fully fund a business, they can all reduce the need for debt. The key is knowing where to find them and how to qualify.  The list above is a great starting point, but there is so much more. It’s worth the time it takes to dig in and see what is available. 

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Get Schooled: The ABCs of Business Funding 

Everything You Need to Know About Business Funding that You Didn’t Learn in Kindergarten

Whether you are a new entrepreneur or a seasoned business owner, there are likely things you do not know about business funding.  What are your options? How do you get it? What is the best option for you? 

These are not easy questions to answer.  There are a lot of variables, and it can take some time to figure things out.  Don’t worry though. We’ve got you covered. We are going to take you back to school and cover everything you need to know about business funding. 

A is for Application Ready

Not all business funding is a form of debt.  The vast majority however, is. Crowdfunding, grants, and independent wealth are pretty much the only exceptions.  For this reason, it is vitally important to be certain your business is application ready. That means having a stellar credit score, all documents prepped and ready, and collateral available. 

Discover our business credit and finance guide, jam-packed with new ways to finance your business without emptying your wallet.

You can’t do it overnight, but there is never a better time to start than right now. It may take some prep work that you have thought about.  For example, did you know that for your business to appear fundable to lenders, it is important to have separate contact information, an EIN, a D-U-N-S number, and even to have a professional, user friendly website? 

Not only are these things important for appearing fundable, but they are necessary to start building business credit.  Business credit is important. Here’s why. Most of the time personal credit cannot handle the spending necessary to run a business.  If you try to run a business solely on the merits of your personal credit, you could end up destroying your personal credit score even if you make every payment on time. 

How to Make Your Business Appear Fundable 

Get Incorporated

It is important to incorporate.  You have a few options. The one you choose will depend on your budget and the level of liability protection you need.

  • C Corp

This is the most complicated and expensive option.  Before you choose it, be sure there are other reasons.  The other options work fine for business fundability.

  • S Corp

This option basically offers the same separation as the C Corp, but taxes are paid at the personal level, rather than requiring the business to be taxed as well. It is also cheaper than incorporating as a C Corp.  If you aren’t required to file as a C corp, this is a good alternative. 

  • LLC

Forming a Limited Liability Corporation results in less liability as well.  It also offers enough separation to serve the purpose of establishing business fundability.  If you are not required to be a C Corp or S Corp, this is the easiest and most cost-effective way to go.

Get an EIN

You need to apply for an EIN.  It acts like your SSN, but for your business.  It allows you to apply for business funding without using your SSN in some cases.  

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

You Need a D-U-N-S Number

Dun and Bradstreet (D&B) is the most business credit reporting agency that is most commonly used.  They issue each business on file a 9-digit D-U-N-S number. Application is easy and free. This is essential to building business credit, which is necessary to be application ready.

Separate Contact Information

As already mentioned, your business needs its own phone number.  This way, when you apply for credit, you can enter contact information that is separate from your own.  When information is reported to agencies, sometimes the phone number is an identifying factor. This is just another way for lenders to see your business as a separate, fundable entity.  Some non-traditional lenders and credit cards require you to have a business number listed in the directories as part of the approval process. 

Along with a separate phone number, your business needs it own physical address and email address. 

Discover our business credit and finance guide, jam-packed with new ways to finance your business without emptying your wallet.

If You Aren’t Online, Are You Even a Business? 

In today’s business world, you absolutely must have a website.  You can’t just throw one together though. A poorly put together website is just as bad as no website, if not worse.  Go ahead and spring for someone who knows what they are doing. It needs to be professional. Pay for hosting too. A free hosting service will not cut it.  Remember your business email needs to have the same URL as the website, so a free email service such as Yahoo or Gmail is no go as well. 

Business Bank Account

Get your business its own bank account.  It will help your business appear fundable when applying for business funding, but it will also help keep personal and business expenses separate for tax purposes.  In addition, some business credit cards and tradelines like to see a certain balance in a dedicated business bank account.

Establish Credit Lines with Vendors

New businesses just getting started should  look for vendors that will extend credit and report to the top credit agencies.  

If you have been around for a while and do not have credit with your existing vendors, ask for it.  If they comply, ask if they currently report to the credit agencies, or if they will. Not all vendors do because it is not required, and not all are willing.  If your current vendors do not want to cooperate in this endeavor, consider switching to vendors that will. 

Talk to the Utility Companies

Sometimes utility companies are willing to report payments to credit agencies, which can help you build business credit for applications as well.  That’s just one more step to appearing fundable. When the time comes to apply for business funding, you’ll be ready.

B is for the Best Options for Your Business Funding

There are so many options for business funding available it can be completely overwhelming to determine which ones are best for your business.  The best one may even change from circumstance to circumstance. Variables such as why you need the funds and your businesses’ ability to qualify for funds all make a difference. Here is a quick rundown of what is out there. 

Traditional Loans

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

biz money Credit Suite2

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

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

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

Of all of the available business funding options, this is the hardest to get. It is usually worth the trouble though if possible, because it often has the best rates and terms. 

Non-Traditional Lenders

These are private lenders. Usually they operate online.   The difference between these and traditional lenders is that the loans have looser approval requirement and a much faster application process. Most often you can simply apply online.  Most offer approval in as little as 24 hours, and the funds are in your account within 24 to 48 hours after that. 

These are an option if your personal credit isn’t terrible and you need funding fast. 

Lines of Credit

Lines of credit are basically the traditional lender’s version of a business credit card. It’s revolving credit.  That means you only pay back what you use, just like a credit card. Rates are typically much better than a credit card however.  The application and approval process is similar to that of a traditional term loan. 

If you need revolving credit and can qualify for a term loan, this is the best of the available business funding types for you. It is great for bridging cash gaps and covering short term expenses without high credit card interest rates. 

The lack of loyalty points and rewards however, makes some business owners prefer credit cards despite higher interest rates.

Invoice Financing

If you are an established business with accounts receivable, invoice factoring is one of the available business funding types that you have access to. This is where a factoring company advances you funds based on your invoice quality.  When you collect, you pay them a factoring fee. You get cash right away without waiting for your customers to pay the invoices.

This is a good option if you need cash fast, or you do not qualify for other business funding options. The interest rate varies based on the age of the receivables.

Crowdfunding

Crowdfunding is a newer option for finding investors. With crowdfunding, you can literally have a crowd of investors fund your business $5 and $10 at the time. 

There are many crowdfunding sites, but the most popular are Kickstarter and Indiegogo. They are similar, but there are some important differences. The most obvious is the timing of when you actually receive the funds that others invest in your company.

There are other crowdfunding sites out there as well. Different ones work better for certain businesses than others. Do some research. Keep in mind your type of business and the specific business each one appeals too. 

Credit Cards

These get a bad rap, but they can actually be a good option. They are available much more readily, even with a poor credit score.   Lower the credit scores get higher interest rates however, and there are limits on how low they will go with a credit score. 

This is one funding types that most of the general public are eligible for at any given time.  The downside is that they typically have a high interest rate. The upside is that many of them offer rewards in the form of cash or points that can be helpful. 

Grants

There are not a lot of grants for businesses out there.  Typically, they are offered by professional organizations. There are some government grants available also. Competition can be fierce, but they are definitely worth a shot if you think you may qualify. 

Requirements vary from grant to grant.  Most are only awarded to a certain number of recipients.  They are worth looking into if you fall into one of these basic categories. 

  • Minority owned business
  • Businesses run by veterans
  • Businesses in low income areas

 There are also some corporations that offer grants in a contest format that do not require much other than that you meet the corporation’s definition of a small business and win the contest. 

Discover our business credit and finance guide, jam-packed with new ways to finance your business without emptying your wallet.

C is for Connection

When it comes to business funding, everything it connected.  Sometimes things that you never even think about can affect your ability to get funding.  For example, if you are applying for funding from the same bank that holds your business account, they are going to have access to that account activity.  They will be able to see if your account continually goes into the red. Something like that could throw a red flag. If you habitually bounce checks on your personal account, they may see that too. 

Imagine if you were the recipient of a business grant.  Now imagine you are asking a lender for funding. It is likely they will be able to find out through social media or some other means that you were the recipient of the grant.   They may ask you how you used the funds and what you have to show for it. If you cannot show that you managed grant funds in a profitable way, they are going to be less likely to award you with business funding from their institution. 

Even things such as your business’s online reputation can affect your ability to get funding.  If a lender happens to check the business social media and takes note of bad reviews, that will not be a good thing.

Consider These ABCs before You Need Business Funding

While you may not be sure what the best funding options are for your business until a specific need arises, you can definitely work on being application ready and recognizing potential connections on a continual basis.  Doing so now will likely make getting business funding much less of a hassle when the time comes. 

The post Get Schooled: The ABCs of Business Funding  appeared first on Credit Suite.

Achievement in funding… $29,554.00 in Accounts Receivable financing!

Cheetah Distributor received $29,554.00 in accounts receivable financing, allowing them to grow their business and achieve their objectives.

This helped unlock new opportunities of growth and will assist in increased revenue.

Congratulations to the team at Cheetah Distributors!

Click Here to see how much funding you can get for your business.

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Achievement in funding… $21,000.00 in Artesia, CA with 401K financing

Devera Group, Inc. obtained $21,000.00 in 401K financing. This allowed them to move forward on business growth goals.

Provided help when needed and became a great solution.

We are excited to be a part of your success!

Click Here to see how much funding you can get for your business.

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Achievement in funding in Durham, NC… $100,000.00 in Private Equity!

This financing allowed our client to grow their business and achieve their objectives.

This helped unlock opportunities of growth and our client was very pleased.

We take great pride in our client’s success!

Click Here to see how much funding you can get for your business.

The post Achievement in funding in Durham, NC… $100,000.00 in Private Equity! appeared first on ROI Credit Builders.

Achievement in funding… $29,554.00 in Accounts Receivable financing!

Cheetah Distributor received $29,554.00 in accounts receivable financing, allowing them to grow their business and achieve their objectives.

This helped unlock new opportunities of growth and will assist in increased revenue.

Congratulations to the team at Cheetah Distributors!

Click Here to see how much funding you can get for your business.

The post Achievement in funding… $29,554.00 in Accounts Receivable financing! appeared first on ROI Credit Builders.