7 Instagram Analytics Tools to Grow Your Audience

Instagram is known mostly for engagement. But how do you track it? Let’s cover some Instagram analytic tools you need to be using.

Here’s the deal: People love interacting with brands and other individuals. Without engagement, social media doesn’t exist, and engagement matters more on Instagram than most other platforms.

In fact, Instagram’s engagement has been measured anywhere from four to twelve times that of other social channels.

So while you can sell on Instagram, this channel is better known for its benefits at the top of your sales funnel.

The problem with that is your marketing efforts don’t always link back to sales.

That means you’ll have to develop other ways to measure performance to justify all of the time and money spent on Instagram.

So, how do you do it? Luckily, there are a few tools that can help.

I’m going to show you some of the best Instagram analytics tools and why they are worth your time.

1. Owlmetrics

Owlmetrics is basically a one-stop-shop for all things Instagram analytics.

This Instagram analytics tool tracks all of your Instagram account’s key data points, such as follower growth, engagement, hashtag activity, competitor accounts, and click-through rates, while giving you real-time insights in an easy-to-use dashboard.

But that’s not all it can do. It offers a wealth of data beyond Instagram Insights’ underwhelming offerings.

When it comes to tracking engagement, everybody knows that it’s the details that matter.

You’ll get insights on things like the most engaging photo and video filters, top tags by interactions, the best time to post, posts that have received the most engagement, sources of the most engagement, and so much more.

Plus, you’ll be able to keep close tabs on your hashtag performance. Hashtag usage is critical to a good Instagram strategy, so you’ll need to keep a close eye on how they’re benefiting (or hurting) your brand.

instagram analytic tools example

Altogether, their insights generate a goldmine of information for content strategizing. You’ll get daily data regarding your post engagement rates, top posts by engagement rate, and the best-performing types of posts.

With these real-time details at your disposal, you have all the information you need to post dynamite content every day.

You’ll also know exactly where your followers are spending the most time through click rates. You can find your total clicks, average clicks per post, and your clicks change rate.

Of course, the tool shows you these ultra-useful numbers in easily readable graphs, so if you’re not a numbers person, you’ll still be able to see areas of change.

instagram analytics tool clicks

As you can see from these visuals, there’s no shortage of details for your clicks. You’ll see clicks by language, clicks by browser, clicks that are referred from another source, and clicks by location.

All of this contributes to gaining a better, more complete view of your audience.

And since you need an excellent connection with your audience if you want to make it on Instagram, the Owlmetrics audience insights can help you achieve just that.

It gives you all the details regarding your followers, including their age, gender, language, city of origin, and other basic demographics that paint a clearer picture of your audience to help you form better posts.

You also get definitive numbers that help you set and track goals for follower growth. You’ll see your total followers and the growth of total followers.

There’s also info about the followers you’ve gained and lost, with insights into your top gained followers and top lost followers. This will help you better curate your content to keep your existing followers and attract even more.

instagram analytics tool gained lost

One of the most beloved Owlmetrics’ features is its competitor tracking. You can learn a great deal about executing a quality Instagram marketing strategy by spying on the strengths and weaknesses of multiple competitive Instagram accounts.

Instagram analytics tool competitor overview

As you can see, it gives you a detailed overview of the Instagram insights for competitors you choose in numbers and graph form.

These insights are updated in real-time, so you’re getting the most accurate numbers for high-performing businesses to compare to your own.

Instagram analytics tool overview graphs

To top it all off, you can schedule exports of any data to CSV, PPTX, and PDF for easier reporting, not to mention it integrates seamlessly into Slack so all your team members can be on the same page.

Your Instagram insights are clear, detailed, collaborative, and always in real-time.

2. Iconosquare

There’s going to be some analytics overlap in a few of these tools.

Iconosquare kicks off by helping you understand how your posting frequency relates to or drives either new followers or lost ones daily.

iconosquare instagram analtyics tools

Iconosquare also gives you a Buffer-like tool to manage how you post across several different accounts at one time.

That makes it a perfect tool for freelancers or agencies that want to save time when managing multiple clients (or even multiple departments within the same company) from the same dashboard.

instagram analytics tools

Iconosquare will even show you comments and interactions on each post so you can keep the conversation going without ever leaving.

But that’s not even the best part.

My favorite Iconosquare feature is that they offer a library of awesome content that you can pull from at the ready.

You can quickly search the media library and grab beautiful, high-resolution images to use within seconds.

iconosquare instagram analytics

Iconosquare also features an editorial calendar view so that you can schedule posts out ahead of time. It’s easier to manage social media when you plan out content in advance.

iconosquare instagram analytics editorial view

Next, you can use it to search for influencers who might help you get the word out about new campaigns and posts.

It will even let you compare influencers based on their own follower and engagement metrics, so you know what you’re dealing with before reaching out to them.
iconosquare instagram analytics, search for influencers

All of this sounds great, right?

But we haven’t even touched on their Instagram analytics yet.

You can measure tags and mentions and get access to in-depth engagement insights.

You can also see how your individual hashtags are performing, view the best days and times to post, and benchmark your engagement rates against the competition.

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Iconosquare has a 14-day, no credit-card-required free trial. Play around with the analytics before you commit to it with your cash.

3. Sprout Social

Sprout Social is similar to Iconosquare in that it combines Instagram analytics with content creation and management tools. They also have a powerful Instagram analytics platform.

It has a fully-featured editorial calendar for scheduling new content across multiple social account platforms (including Twitter and Facebook).

sprout social instagram calendar instagram analytics tool guide

Sprout Social is perfect for larger organizations with rigid guidelines, too, because it has a centralized media library to manage with built-in editing tools.

When a piece of content is ready, you can use the push notification tool to update the person responsible for taking the next step (like moving it from draft to preview and from scheduled to published).

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Sprout’s tool set includes a social CRM that will funnel conversations into a central ‘smart’ inbox. Gaining access to this feature can help you boost conversions over time.

You can also dive deeper into individual hashtag performance or even locations that have been geotagged. Pay careful attention to how your performance compares across each.

instagram analytics tool sprout social

Then you can compile all of this insight into “presentation-ready” reports that can be exported or downloaded by clients and bosses alike.

sprout social instagram analytics reports

You can also take a spin with the free trial to preview all of these features before paying a single cent.

4. Keyhole

Each Instagram analytics tool we’ve looked at so far will give you daily reporting features. You need those metrics to track your progress.

However, Keyhole prides itself on giving customers real-time feedback. For example, you can drop in a specific hashtag, keyword, or account to see what trends are starting to emerge.

instagram analytics tools keyhole

Keyhole will also help you figure out which of your own internal trends provide the best results, giving you at-a-glance data into what activities are driving the most follower growth over time.

instagram analytics tools keyhole

You can also create a feed that will automatically track your competitor’s Instagram accounts to see what’s working for them versus what’s not (then capitalizing on the former while avoiding the latter).

Plus, you can save time by selecting a few predefined KPIs to track. Keyhole will automatically report on those, organizing your data into an easy-to-read dashboard that you can share with team members.

5. SquareLovin

SquareLovin (spelled like McLovin) combines both aggregate data (like overall views and follower counts) with individual metrics on each post (by ‘scoring’ the overall engagement).

squarelovin instagram analytics tools

One of my favorite features, though, is the deep dive it gives you into the best-performing times to post.

Like some of the Instagram analytics tools on this list, Keyhole tells you the best time frames for posting based on metrics. However, this tool also explicitly lets you know when you shouldn’t post. This data can be just as valuable, especially if you’re posting all the time.

You might want to constantly test a few of the ‘best’ times to improve performance. However, this way, you’ll always know exactly what hours of the day to avoid like the plague.

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6. Minter.io

Many of the Instagram analytics tools already featured give you information about how your Instagram account or your individual posts perform based on your specific KPIs.

Minter.io takes the next step by providing tactical insight into the content decisions you’re making.

For example, this tool can help you figure out which photo filter performs best among your audience based on a comparison of multiple metrics. Instead of using a single piece of data to decide which filters to use, compare several data points.

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I also love how this tool can break down your post engagement into performance rates.

Here’s what I mean.

If you see that you have 1, 10, or even 100 comments on a post, you’re probably pleased with yourself. But when you stop to think about it, there’s not a lot of actionable insight to draw from comment numbers alone.

Let’s say one account has 100 followers, and another has 1,000 followers. Each account gets 10 comments on a single day.

Now, which one is performing better?

The first one, right? That’s because it’s getting a 10% engagement rate on that post instead of only a 1% engagement rate. That makes a huge difference at the end of the day!

Minter.io helps you track these performance metrics over time and create benchmarks to see if your audience’s quality is growing as quickly as the quantity.

instagram analytics tools engagement rate screenshot

All social platforms use internal algorithms to determine how many of your posts will be seen by your audience.

That means that, if your engagement is low, the social network might artificially ‘restrict’ how many of your own followers end up seeing your content on a given day.

That’s why we constantly talk about the importance of engagement in social media.

Minter.io will also help you pinpoint big players who are already part of your audience. It’s a great way to identify potential influencers who might amplify your brand message.

For example, followers are split down into several different ‘buckets,’ including:

  1. Mass Follower
  2. Potentially Normal
  3. Normal
  4. Popular
  5. Influencer

instagram analytics tools

Finally, this Instagram analytics tool also gives you insight into how active your followers are on the platform.

For example, you can see how many posts each of your followers push live each day so that you can mimic the frequency you know your followers are comfortable with.

If you’re only posting twice a day, but the bulk of your audience posts four times per day, you can easily start increasing your posting frequency without fearing any backlash from your community.

instagram analytics tool privacy of followers

7. SocialRank

SocialRank provides detailed audience metrics for both Instagram and Twitter.

Many of the other Instagram analytics tools listed above focus on hard data or your posts’ individual performance metrics.

SocialRank will do some of that, but it’s more concerned with identifying follower patterns so that you can better tailor your content updates to your audience.

That means it will provide details like the most popular words used in your followers’ bios and posts. You can even see the most popular emojis among your target market.

Let’s say you’re trying to find certain types of people, like bloggers or influencers. You can search prospects’ bios based on keywords.

You might also use it for local marketing. Filter your target users by location so you can reach out to potential candidates for local live events and other engagements.

instagram analytics tool screenshot

Follower filters help you narrow down the audience into small segments based on some criteria, including the number followers they might have, specific companies, gender, and any combination of those.

social rank instagram analytics tool screenshot

Once you pull up a segment, you can then rank or prioritize these people based on their own engagement with you or their own popularity (by follower count).

sort instagram analytics tool data

These filters come in handy when you’re trying to pull precise lists of followers.

For example, let’s say you’re opening a new location in a new city (or simply just visiting a new area for an upcoming conference).

You can overlay these filters together to find people who’re using certain hashtags (such as #craftbeer) and located within a specific city (like San Diego).

instagram analytics tool filter

Then you can pull these follower lists into an Excel or PDF document for easy sharing with your team.

instagram analytics tool save and export

It’s incredibly powerful but not among the cheaper options listed here. I’d recommend using it for larger influencer or PR campaigns. It works best when you need deep audience insight to build buzz around your latest launch.

Conclusion

Social media is fairly simple at the end of the day.

First, you need to understand what your audience wants and is looking for. Second, you need to give it to them consistently.

In reality, it’s a lot tougher than it sounds.

But not if you’re using the right Instagram analytics tools to tell you what your audience is already interested in, talking about publicly, and reacting online.

Instagram is a powerful marketing tool to reach new audiences, increase your brand visibility, and deepen relationships with the people you already know.

Unfortunately, you can’t always track those things back to new Goal completions inside Google Analytics.

They’re ‘soft’ goals used to move people along your sales funnel instead of ‘hard’ goals that result in a new lead or sale.

That doesn’t mean they’re any less important. It simply means that you need to look for different ways to measure progress and results.

While Instagram’s built-in analytics are helpful, the Instagram analytics tools listed here go far beyond those metrics. You’ll be able to quickly identify your target customers, figure out what they’re interested in, and learn how to better serve them with new stuff.

After all, that’s what Instagram analytics tools are for, anyway. Not long, in-depth reporting that takes you hours to compile. You’re often better off with quick insights so that you can take action, update your marketing campaign, and grow faster.

What are your favorite Instagram analytics tools to track metrics?

The post 7 Instagram Analytics Tools to Grow Your Audience appeared first on Neil Patel.

How Does Your Garden Grow? Best Business Line of Credit in a Recession

The COVID-19 pandemic caught the world by surprise and turned the economy upside down.  If you are a business trying to make it during this time, we can help.  The Federal government has approved funding through  The CARES Act, including the Paycheck Protection Plan.  In addition, many states and local organizations are offering their own COVID-19 relief options.  Beyond that, we can help you find the best business line of credit in a recession.

A Business Line of Credit is Like Miracle Grow for Your Business

A business line of credit can be an incredible tool for your business, even in a recession. You don’t want just any line of credit however. You want the best one for your business needs.

Not all businesses are the same, and not all lines of credit are best for all businesses. Different limits, rates, and terms work better for some than others. How do you ensure you are getting the best business line of credit in a recession?

What’s a Line of Credit?

It can help to get a quick rundown of exactly what a line of credit is. The most basic definition is that it is a revolving line of credit, similar to a credit card. You have a limit and continuous access to that limit while making payments only on the portion you use each month.

For example, if you have a $10,000 line of credit, you can use however much of those funds you need each month for whatever you want, unless your lender issues some sort of restriction. If you use $2,000, then when you get your statement your payment will be based on $2,000 plus the interest, rather than a payment plus interest on the entire credit line.

If you were to pay $1,000, then spend another $500, you would pay on the $1,500 balance the next month. Your payments change as your balance changes. Just like with a credit card.

Access is most typically granted through checks or a card connected to the line of credit account.  Electronic draws and transfers are also popular.

Learn bank rating secrets with our free, sure-fire guide which can even help during a recession.

Line of Credit vs. Credit Cards

The question is always asked what the difference is between a line of credit and a credit card, and why is one better than the other? The truth is that in some cases, a credit card may be the better option. There is a choice to make based on several different factors.

The main difference between the two that most borrowers need to know is that a line of credit typically has a consistently lower interest rate.  Also, there are no perks like 0% interest or cash back that you sometimes see with credit cards.

What Signifies the Best Business Line of Credit in a Recession?

The best business line of credit in a recession is going to be the one with the best rates and terms that your business can qualify for.  That makes finding it a little more involved. You have to know where you stand and what various lenders offer and require.

It will take some leg work on your part to pull together the information needed for application.  You will also need to understand that the best business line of credit in a recession may not come from the same place you would have gotten a business line of credit pre-recession.  You might have better luck with online lenders or smaller banks over larger traditional banks during an economic downturn.

A Word of Warning

Before you apply for the best business line of credit in a recession, remember that balance is important.  Recession times are by default, hard.  A line of credit can ease some of the burden, but be careful not to let the credit line itself become a burden.  Know your limits as far as what you can pay.

If you do not make payments on-time, you could end up with more trouble than you already had.

How to Find the Best Business Line of Credit in a Recession?

There are several steps to this process.

1. Why do you need a business line of credit in a recession?

Figuring this out could be the most vital step in finding the best business line of credit for your needs. You have to understand why you need a credit line in the first place. Here are some examples of how a business may use a line of credit.

  • Take advantage of a sale on inventory, raw materials, or supplies. This can reduce the cost of goods sold and consequently, increase the bottom line.
  • Purchase or repair minor equipment when needed. This would be like a new printer or laptop. It would not include items like an industrial oven or delivery truck. Larger equipment would best be purchased with an equipment loan.
  • Bridge temporary cash gaps or continuous, known cash gaps due to timing issues. An example of this would be several bills that are due at the beginning of the month when you know your largest contracts pay at the end of the month. The money is coming, but the bills come due before the money gets there. You can pay the bills with the line of credit, then pay off the line of credit when the contracts pay.

Another example of this is a seasonal line of credit for a business that does the majority of its sales during a certain time of the year.  A florist does a large percentage of sales during Valentines day, so a seasonal line of credit can come in handy to bridge the cash gap during other times of the year.

2. Determine your options.

Shop around with various financial institutions to determine which ones offer the best business lines of credit in a recession. You will want to look at factors such as interest rate and credit limit in relation to what you need and can afford.

Check with various types of lenders to get a feel for which ones offer what you need.  Check with larger commercial banks, small local institutions and credit unions, and alternative lenders such as those that operate exclusively online.

Pay specific attention to eligibility requirements to avoid wasting your time with those you do not qualify for.

Learn bank rating secrets with our free, sure-fire guide which can even help during a recession.

3. Know where you stand.

Your ability to get approval for the best business line of credit in a recession will be directly related to your business credit. Traditional banks pay more attention to personal credit, but they crack down a lot on lending when there is a recession.  Non-traditional lenders may also consider income and cash flow. They may, in addition, rely heavily on your business credit score when making an approval decision about a line of credit.

A lower business credit score does not necessarily mean you can’t get approval.  It could greatly affect your interest rate and credit limit however.

Consider signing up for a credit monitoring service that lets you keep tabs on your business credit and what is affecting it each month. The one offered by CreditSuite.com is easy to use and cost effective.

Once you have a handle on why you need a business line of credit, what is available, and what you may actually be eligible for, you can make a decision as to where you are going to apply and which product you are going to apply for.

Determining which of these lenders has the best business line of credit in a recession for you goes back to knowing what you need, who has it, and who will approve you for it.

When Is a Line of Credit Better than a Credit Card?

If you are going to need to make payments, a line of credit is a better option. The reason is pretty simple. The credit rate is almost always lower. The few exceptions are those cards that offer 0% APR for a short period of time.

If you are going to use a credit card to make regular purchases you intend to pay off immediately, that’s another story.  Especially if you qualify for a card with perks such as cash back.  In that case, you may find that you can benefit from using a credit card over a line of credit.

An example would be if you wanted to use your business credit card to make your monthly supplies purchase each month and then pay it off in the following month. You could take advantage of the cash back and reduce your overall cost.

To float a cash flow gap or make significant purchases that you will need to pay out over a short amount of time, a line of credit is almost always the best choice.

Where to Find the Best Business Line of Credit in a Recession

Some small businesses will have a hard time getting approval from a traditional lender due to poor credit or a lack of sufficient credit history.  We found examples of what alternative lenders are offering currently. Keep in mind these offerings can change, so make sure to visit the lender and verify.

Kabbage

Kabbage offers a credit line of up to $150,000 with no credit score required. The catch is that the interest rate is between 32% and 108%. The business must have been in existence for at least one year and have revenue of at least $50,000.

The interest rate is very high. This is really only an option for those businesses that cannot get financing due to a low or nonexistent credit score and need funding immediately.

Best Business Line of Credit in a Recession Credit Suite2

StreetShares

There is a credit line available here of up to $100,000.  A business must have what they consider to have “reasonable credit.”  It also must be in business for at least one year and have more than $25,000 in revenue. Repayment is weekly.

Due to the lower revenue requirement, this is a good option for smaller businesses with okay credit scores but lower annual revenue. Also, the interest rate minimum is lower, with the low end at 9%.

OnDeck

If you have a credit score of at least 600 you can get a credit line of up to $100,000 with OnDeck. There is a $20 per month maintenance fee and weekly repayment. The interest rate is a little higher here than with those that require a higher credit score minimum. It ranges from 13.99% to 39.99%.

Again, due to the higher interest rate, this should only be an option if you cannot meet the higher credit score requirement.

Lending Club

The credit line offered by lending club goes up to a limit of $300,000. It requires a credit score of 600.  In addition, at least one year in business and at least $50,000 in revenue are necessary. The repayment term is 25 months, and they require collateral for limits over $100,000.

This is a good option for those that meet the requirement as there is a higher limit available with collateral, and the interest rate can go as low as 6.25%. The repayment terms are much friendlier as well.

Credit Line Hybrid: Another Option

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

What are the Qualifications?

How hard is it to qualify?  It’s probably easier than you think.  You do need good personal credit.  That is, your personal credit score should be at least 685.  In addition, you can’t have any liens, judgments, bankruptcies or late payments.  Also, in the past 6 months, you should have less than 5 credit inquiries, and you should have less than a 45% balance on all business and personal credit cards.  It’s also preferred that you have established business credit as well as personal credit.

If you do not meet all of the requirements, all is not lost. 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.

Business Credit in a Recession

When you apply for the best business line of credit in a recession, consider using your business credit rather than personal credit.  Some lenders will require you to use both.  If you can get a credit line on your business credit only, that is best. If not, strong business credit can help negotiate better terms and rates.

Learn bank rating secrets with our free, sure-fire guide which can even help during a recession.

Not sure what business credit is, if you have it, or how to get it?  Here’s a quick rundown.  Business credit is similar to your personal FICO, but it is for your business only.  It is not attached to your name or social security number, but rather to your business name and EIN.

The most commonly used business credit reporting agency is Dun & Bradstreet, but there are others.  With Dun & Bradstreet however, you must have a DUNS number to have a record with them.  If you do not have one, you don’t have a D&B business credit report.

You can get a free DUNS number on the D&B website.  Before you do, your business must be incorporated.  It also must have dedicated, separate contact information that is not your personal contact information.  You can find out more about incorporation options and how to get a free EIN on the IRS website.

It is Possible to Find the Best Business Line of Credit in a Recession

A business line of credit is a great financing option. It offers flexibility that isn’t always available with a term loan. Interest rates are often better than those offered by business credit cards.  With alternative lenders in the mix, a line of credit is an option for most small businesses even during a recession.

The post How Does Your Garden Grow? Best Business Line of Credit in a Recession appeared first on Credit Suite.

How to Grow and Connect with Your Online Network

Unquestionably, businesses, entrepreneurs, professionals, CEO’s, school teachers, NGO’s and any person looking to provide services or influence others, must invest time into growing their social channels. After all, that’s were everyone is these days! Looking at the numbers, these are the largest social channels: Facebook ((largest social media network in the world) with 2.45 billion monthly… …

How to Grow and Connect with Your Online Network

Unquestionably, businesses, entrepreneurs, professionals, CEO’s, school teachers, NGO’s and any person looking to provide services or influence others, must invest time into growing their social channels. After all, that’s were everyone is these days! Looking at the numbers, these are the largest social channels: Facebook ((largest social media network in the world) with 2.45 billion monthly… Read more »

The post How to Grow and Connect with Your Online Network appeared first on Paper.li blog.

An Unsecured Business Loan Can Help A Startup Grow. Personal Loans Won’t

How an Unsecured Business Loan Can Be the Dynamite that Helps Your Business Explode

When you are trying to grow a business, you have plenty of funding options.  The first one most think of is a loan. What most don’t realize is that there are many different types of loans.  The most basic options are secured loans and unsecured loans.  However, you also have to choose between business loans and personal loans.  For helping a business grow, you are better off to choose business loans every time.  Securing a business loan will help your business grow long term, even if it is an unsecured business loan.  Personal loans do not carry the same advantage.

Here’s why.  Payments on personal loans, whether secured or unsecured, are going to be reported to your personal credit. That is great for your personal finances, but it doesn’t really help your business credit at all.  If you have business loans, even an unsecured business loan, those payments will be reported on your business credit report.  When this happens, your business credit grows, which will absolutely help you grow your business in the future.

Hit the jackpot with our best webinar and its trustworthy list of seven vendors who can help you build business credit.

Why Personal Loans Aren’t a Good Idea

If you finance your business on personal loans, a number of things can happen.  The first is that you can completely mess up your debt-to-credit ratio.  This is a problem regardless of whether you are making your payments on time.

The debt-to-credit ratio shows how much of your available credit you are using. As a general rule of thumb, personal credit limits are lower than business credit limits.  Conversely, business expenses are typically much higher than personal expenses.  This is the perfect recipe for balances that stay at or near limits, even when you are making payments.

The other reason it isn’t a good idea to use your personal credit to finance your business is this.  If your business finances hit hard times, your personal finances will go down too.  There would be no protection.

What is an Unsecured Loan?

unsecured business loan Credit Suite2

Now that we’ve established why you need to use business credit for your business and not personal credit, let’s talk about business financing.  Specifically, let’s talk about an unsecured business loan. It is important to understand what an unsecured business loan is before you can understand how it can help you grow your business.

Basically, this is a loan that you get solely on the merits of your business credit.  There is no collateral or personal security put up to help you get the loan. The only risk mitigation by the lender is the reliance on your business credit score. While some may check your personal credit score also, applying with your business information ensures that the payment history will be on your business credit report.

As you can imagine, this means that you need  a pretty stellar business score to get an unsecured business loan. The thing is, once you are there, you can use the funds to do whatever you need to to grow your business without having to worry about using any part of your business as security.

The question then becomes, how on earth do you get the strong business credit you need to qualify for an unsecured business loan?

How to Get Business Credit

Business credit is vastly different from personal credit in many ways.  Perhaps the most glaring difference is that while personal credit kind of just happens based on your spending and paying habits, business credit has to be initiated and built intentionally.  How do you start?

  • Incorporate your business as a corporation, S-corp, or LLC
  • List separate business contact information in directories
  • Obtain an EIN and a DUNS number
  • Open a bank account in your business’s name and run all business expenses through that account.

These steps will help you establish your business as an entity with finances separate from your own. That means vendors will report credit information in your business name. Thus, your business credit will be born.

What’s the Next Step?

Next, you have to do business with starter vendors from the vendor credit tier.  They are vendors that will offer net 30 or higher invoices and report your payments to the business credit reporting agencies. As this continues, your business credit score will grow to the point that you can apply for credit cards from the retail credit tier.

The retail credit tier includes those credit cards that are linked to a specific retail store.  This might include, for example, Staples, Lowes, or Best Buy credit cards.  You need several of these reporting positive payment history.  When that happens, you can begin to apply for cards in the fleet credit tier.

Fleet cards are those that can be used for fuel and automobile maintenance from companies such as Fuelman and Shell.  After enough of these are reporting you can apply for cards in the retail credit tier.

The retail credit tier is the top tier.  Once you are here, you can apply for those standard Mastercards and Visa cards that are not linked to a specific retail store or fuel company.  Get a few of these reporting and handle the credit responsibly.  Then, you will have a strong business score that should allow you to qualify for an unsecured business loan.  This means, you will not have to put up collateral or personal security, and your personal credit should not be affected by your business credit.

Other Types of Small Business Financing

It’s probably wise at this point to discuss the various types of small business financing available.  There are options between business credit cards and unsecured small business loans.  It isn’t all or nothing, and each one can play a part in helping your business grow.

Hit the jackpot with our best webinar and its trustworthy list of seven vendors who can help you build business credit.

Types of Loans

There are various types of loans including:

●        Traditional

These are the standard loans that disperse a set amount of funds, with the borrower repaying over a certain period of time.  The payment is the same each month, and they can be either secured or unsecured.  Unsecured small business loan options usually have higher interest rates.

●        Line of Credit

This is revolving debt similar to credit cards.  Borrowers are given a maximum limit of the amount of funds they can use, but only pay back the amount that they actually use.  For example, a borrower may have a $5,000 line of credit and use $2,000 to buy a new printer.  They will only pay back to $2,000, until the time comes that they choose to use more. Lines of credit can also be secured or unsecured.

●        Invoice Factoring

Factoring invoices is an option if you have receivables.   The lender basically buys unpaid invoices from you at a premium.  This means you do not get full value.  You then have immediate cash however, for those open invoices.  The lender collects from the consumer directly at full value.  The older the invoice, the higher the premium. That’s because the likelihood of collecting on the invoice goes down the older the invoice gets.

●        Merchant Cash Advance

If you accept credit card payments, a merchant cash advance can help you out in a pinch.  It is  just what its name says it is.  It’s a cash advance on predicted credit card sales.  They base the amount of the loan off of average daily credit card sales, and then take payment from future credit card sales. This usually happens electronically. Most often, the process is automatic.  The draw is that you get the funds fast, and there are usually more flexible options for repayment terms depending on your eligibility.

Where Can I Find an Unsecured Business Loan and Other Small Business Financing Options?

It really does no good to discuss small business financing if we don’t tell you where to find it.  Here are a few options to consider.  Remember though, even if you are applying based on business credit, some lenders still want to see your personal credit score. Also, these guys aren’t the only game in town.  Be sure to do your research to find the best lender for your needs.

Upstart

Upstart is a fairly new online lender that is using cutting edge technology.  They question whether financial information and FICO alone can really determine the risk associated with a specific borrower.  Rather, they are using a combination of artificial intelligence and machine learning to gather alternative data.  They then use this data to aid credit decisions.

Alternative data includes such things as mobile phone bills, rent, deposits, withdrawals, and even other information less directly tied to finances.  Software from the company learns and improves on its own.

They offer various types of financing products to fit a broad range of needs. There is something for everyone.  Debt consolidation and personal loans are included, in addition to business loans.

Quotes are available online in minutes.  Learn more in this comprehensive review.

StreetShares

StreetShares started as a service to veterans.  Now, they offer term loans, lines of credit, and contract financing. They also offer small business loan investment options. The maximum loan amount is $250,000.  Pre Approval only takes a few minutes. They use a soft pull on your credit so it doesn’t affect your score.

To be eligible, you must be in business for at least 12 months with annual revenue of $25,000. Exceptions are possible, with loans to companies in business for at least 6 months but with higher earnings being approved on a case by case basis. The borrower’s credit score must be at least 620. For more on StreetShares, see our in-depth review.

Kabbage

Kabbage is a well know online lender. They offer a small business line of credit that can help businesses accomplish business goals. The minimum loan amount is $500 and the maximum is $250,000. They require you to be in business for at least one year and have $50,000 or more in annual revenue.  They will also accept $4,200 or more in monthly revenue over the most recent three month period.

Kabbage is a great option if you need cash quickly. Also, their non-traditional approach puts less weight on your credit score, so they may work well for borrowers that still have some work to do in that department.

Fundation

Fundation provides both term business loans online and lines of credit. It is most known for its working capital funding options. These are funds meant to help cover the day-to-day costs of running a business rather than larger projects. Typically, funds come in the form of a line-of-credit.

The minimum loan amount is $20,000, while the maximum loan amount they offer is $500,000. They require you to be in business for at least 12 months and have annual revenue of at least $100,000. To be eligible, your personal credit score must be no less than 600. Additionally, you must have at least 3 full time employees, but this can include yourself. Owners that live or operate their business in North Dakota, South Dakota, or Nevada are not eligible.

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Why is an Unsecured Business Loan Better Than a Personal Loan?

When you take out an unsecured business loan, you not only protect your business from the bank in case of default, but you ensure your personal assets are protected as well.  In addition, as you continue to build your business credit score by making payments on-time, you guarantee yourself the ability to access the funding you need to grow in the future.

Whether you need to add equipment, open a new location, or simply buy more inventory to supply the demand, you can rest easy knowing you will be able to get the funding you need.

An Unsecured Business Loan Can Help Your Business Grow

Many businesses are started on the merits of the owner’s personal credit.  It certainly isn’t unheard of, and in fact, it is likely the norm.  Before your business starts, it can’t exactly have credit, can it? However, once you are up and running, it is important to start building business credit.  Then, when the time comes to grow and expand, you are more likely to have access to an unsecured business loan.  This will be much more effective at helping your business grow than a personal loan ever could be.

The post An Unsecured Business Loan Can Help A Startup Grow. Personal Loans Won’t appeared first on Credit Suite.