Tag: Small

The Best Small Business Credit Card of 2019 for Any Situation

fwistAnd How to Be Sure You are Eligible for the Best Small Business Credit Card for Your Situation

When you start wondering what the best small business credit card is, you may be surprised to find out that answer actually can vary.  What may be the best credit card for one business may not necessarily be the best small business credit card for another.  It all depends on the business and the situation.  For example, a business owner that does a lot of travel for his or her business is going to need a different card than one that has a whole fleet of automobiles to manage but doesn’t travel much.

We have done some research to help you find the best small business credit card to fit your specific needs.

Best Small Business Credit Card When You Want 0% APR

Capital One® Quicksilver® Card

This card features flat-rate rewards of 1.5% on all purchases, and there are no limits on cash back rewards.  In addition, there is no yearly fee.

New cardholders have a 0% APR on purchases and balance transfers for the first 15 months after starting the account.  Afterwards, the rate increases to 14.74 to  24.74% (variable).  A cash bonus of $150 is available for those who make at least $500 on purchases within 3 months of account opening.

Also, cash back rewards do not expire for the life of the account. Other benefits include travel accident insurance and an auto rental collision damage waiver. Find out more by going here.

Best Small Business Credit Card When You Want No Annual Fee

Capital One® Spark® Classic for Business

Try the Capital One Spark Classic for Business. It earns an unlimited 1% cash back on all purchases, and you still get the benefits of an auto rental collision damage waiver and purchase security. You also get extended warranty coverage, as well as travel and emergency assistance services.

However, the ongoing APR is 24.74% variable. The penalty APR is even higher at 31.15%. Another drawback is that there is no sign-up bonus. Find out more here.

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

Best Small Business Credit Card for Students

Discover it® Student Cash Back

Okay, full disclosure.  The Discover it® Student Cash Back card is not a business credit card.  It’s a personal card, therefore your credit activity is reported on your personal credit and not your business credit.  However, as a student, building your FICO will be important to your future as a business owner.

There is a six-month introductory period of 0% APR on purchases. After that, there is an APR of 14.99 to 23.99% variable on all purchases.

One special feature is that it provides an incentive for students to maintain good grades with a $20 statement credit. If students earn a GPA of 3.0 or higher each school year, they get a $20 statement credit per year for up to five years.

You can get 5% cash back at different places each quarter like grocery stores, filling stations, restaurants or Amazon.com up to the quarterly maximum. After that, the credit card offers unlimited 1% cash back on all purchases.  Also, in the first year, all cash back rewards are matched 100%.

Although they waive the first late payment fee, a fee of up to $37 applies on all other late payments. There is also a returned payment fee of up to $37.  Find more information here.

Best Small Business Credit Card for Mileage Rewards

United MileagePlus Explorer Business Card

Earn 2 miles per dollar with United and at restaurants, filling stations, and office supply stores. All other purchases earn 1 mile per dollar. There is also a 50,000-mile sign-up bonus after spending $3,000 in the first three months from account opening.

Benefits include priority boarding, a free first checked bag for you and a companion on the same reservation.  Also, get two United Club passes annually. Hotel and resort perks, including upgrades, are available as well. Additionally, get early check-in and late checkout. An auto rental collision damage waiver is also a benefit.

After the first year, the card has an annual fee of $95. The APR is 17.99% to 24.99%, based on creditworthiness. Find out more here.

Best Small Business Credit Card if You Have Average Credit

Capital One® Spark® Classic for Business

For fair credit, we like the Capital One Spark Classic for Business. It has no yearly fee and cash-back rewards of unlimited 1% cash back on all purchases. Benefits include an auto rental collision damage waiver and purchase security. In addition, extended warranty coverage as well as travel and emergency assistance services are included. Find out more here.

Best Small Business Credit Card if Luxurious Travel is Your Thing

Chase Sapphire Preferred® Card

Earn two points per dollar spent on travel and dining at restaurants, and one point per dollar on all other purchases. Points can be redeemed for cash back, gift cards, or travel. Benefits include trip cancellation insurance, travel and emergency assistance services and an auto rental collision damage waiver. Purchase protection and extended warranty protection are also included.

When you spend $4,000 in the first 3 months from account opening, you will earn 50,000 bonus points. These points are worth $625 if you redeem them for travel through Chase Ultimate Rewards.

You can get an unlimited two points per dollar for travel and dining at restaurants. And then get one point per dollar for all other purchases. Points will transfer equally to 13 leading frequent travel programs with partners. These include British Airways, Southwest Airlines, United, and Marriott.

Unfortunately, there is no 0% introductory APR on purchases or balance transfers. The card’s standard APR is 17.74 to 24.74% variable. In addition, while there is no annual fee the first year, after that it is $95.  Go here for more information.

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

Best Small Business Credit Card if You Love Uber

Uber Visa Card

Uber is the first ride-sharing service to offer a credit card, in a partnership with Visa and Barclays. The card offers 4% back per dollar spent at restaurants, takeout, and bars.  That includes UberEATS orders. Also, earn 3% back on hotel, airfare and vacation home rentals. You can also earn 2% back on online purchases including retailers and subscription services like Uber and Netflix.

Additionally, you’ll earn 1% back on all other purchases. Every percent/point has a value of 1 cent. Redeem points for cash back, gift cards, or Uber credits directly within the app.

There is no yearly fee, and by spending at least $500 in the first 90 days, users can earn a $100 sign-up bonus. Cardholders spending a minimum of $5,000 yearly are eligible to get a $50 credit toward online subscription services.

Also, if you pay your cellphone bill with this card, you are insured up to $600 for cell phone damage or theft.

While they note cardholders have exclusive access to certain events and offers, Uber anticipates the majority of these offers will be available in major cities like New York, San Francisco, Los Angeles, Chicago and DC. If you aren’t in those cities, that perk may not be one you are interested in.

There is no introductory rate, and the APR is a variable 16.99%, 22.74%, or 25.74%, based on your creditworthiness. Cardholders with lower credit will be on the higher end of the range.

Also, there are restrictions on Uber credits. To redeem points as credits within the Uber app, you must have at least 500 points, or $5. Cardholders can convert a maximum of 50,000 points, or $500, in a given day.  Find out more here.

Best Small Business Credit Card for When You Want to Build Business Credit

This is where it gets a little tricky.  The thing is, the only way a card can help you build business credit is if you get it on the merits of your business credit.  That means you have to apply with your business information, not your own.  It also means you must already have some semblance of business credit to gain approval.  Any card in your business name that you handle responsibly will definitely help build existing credit even stronger.  However, you cannot get a card to build business credit without already having a business credit score.

How Do You Establish a Small Business Credit Score?

The truth is, any of these best small business credit card options will work to build business credit, but they will all want to see a business credit score before they grant approval.  How do you get a business credit score without having credit to begin with?  There is a very specific process, and  if you follow it, it works like a charm.

It starts with establishing your business as a separate entity from yourself that appears fundable to lenders.  How does that happen?  Well, first your business needs its own contact information.  It’s tempting in the beginning to just use your own address and phone number, but it isn’t wise.  Those are identifying factors related to you personally, so anything attached to them will end up on your personal credit report rather than your business credit report.

Other Ways to Make Your Business Appear Fundable to Lenders

  • Formally incorporate. You need to organize your business as a corporation, S-corp, or LLC.  Start at gov.
  • Get an EIN. It works like an SSN, but for your business.  You can get one for free on the IRS  Be sure to use it instead of your SSN when applying for business credit cards.
  • Get a separate business bank account.
  • Make sure you have a useable, professionally put together website. Pay for hosting, as the free hosting services make you look unprofessional.  Along the same lines, be sure your business email address has the same URL as your website.  Free email services such as Yahoo or Gmail are not appropriate for this purpose.
  • Get a D-U-N-S number. This is how you establish your record with Dun &  That’s important, because they are the largest and most commonly used business credit reporting agency.  If you do not have a D-U-N-S number, you cannot have a business credit score with them.  It is free to get one on the Dun & Bradstreet website.

Once these things are taken care of, it’s time to start building that business credit score.

Work Through the Credit Tiers

When it comes to building business credit, there are 4 tiers that you must work through.  Most often, whatever the best small business credit card is for your needs, it will be in the top tier, known as the cash credit tier.

Before you can qualify for credit in this tier however, you must work through the other tiers.  What are the other tiers?  I am so glad you asked.

Vendor Credit Tier

This tier is where you will find starter vendors that will extend invoices with net terms without a credit check.  You may have to place a few orders with them first, and there may be some minimum time in business or income requirements, but credit will not come into the picture.

Once you get net terms and start making payments, these starter vendors will report those payments to the credit reporting agencies, also knowns as CRAs.  If you have set up your business as a separate entity and set up your vendor account with your business information, they will report your payments to the business CRAs.  As more and more accounts are reporting, your business credit score will grow and you will be eligible to apply for credit in the other tiers.

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

The Retail Credit Tier

This is where you find store specific cards.  They like to see a minimum business credit score, which is why you apply for them after the vendor credit tier.  The vendor credit tier is how you establish that initial score.  You’ll need to get 8 or so of these accounts reporting your payments to the business CRAs before you can start applying for cards in the next tier.

The Fleet Credit Tier

These are the cards that help you manage fuel and auto maintenance and repair costs.  They come from companies like Fuelman and Shell.  You’ll need several of these reporting payments along with the cards from the retail credit tier before you can move on to the cash credit tier.

The Cash Credit Tier

This is where pretty much every best small business credit card mentioned above will be found.  As you work through the other tiers your credit score will build like a snowball rolling downhill.  If you manage your credit properly, you’ll have a strong score that will qualify for any of these cards.  It takes time, but if you want the best small business credit card for your business, you must build business credit.

Don’t Let the Best Small Business Card for You Slip Through Your Fingers

If you already qualify for cards in the cash credit tier, then use our research above as a starting point for your own research.  If you need to build business credit first, follow our proven process and you will be eligible for any of these cards when the time comes.

The post The Best Small Business Credit Card of 2019 for Any Situation appeared first on Credit Suite.

5 Up to the Minute Alternative Small Business Loans

And Why You Still Need Business Credit Even if You Already Qualify for Them

When a business owner is looking for funding, it can be a bit confusing.  There are way more options that most realize before the fact.  Many head straight to the bank and apply for a loan.  When they are denied, they are left with confusion and despair.  First, they do not know why they were denied, and next, they don’t know what to do if they can’t get a loan.  There are a few different options, but the next best thing for most business owners would be alternative small business loans.

What Are Alternative Small Business Loans?

These are loans that come through private lenders rather than banks.  The vast majority of these lenders operate online.  For the most part, the process is fast and simple. Borrowers fill out an application online, and generally receive approval in as little as a few hours.  Once approved, funds are often in the borrower’s account in as little as a day or two.

The fast, easy process makes these alternative small business loans an attractive option for business funding.  This is especially true for those who find they do not qualify for loans from traditional lenders.

Is There a Catch to Alternative Small Business Loans?

I know what you’re thinking.  If these alternative loans are so fast and easy, why even bother with traditional loans.  Do people just not know about them? There has to be some catch.  Well yeah, there kind of is.  The catch is, interest rates and terms are considerably less favorable than those you may get with a traditional lender.

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

That’s because, in an effort to extend credit to those that do not qualify with a bank, alternative lenders have to be a little more relaxed with their eligibility requirements. As a result, they are taking on significantly more risk with their loans.  To make up for this, they increase interest rates and loan terms to balance things out.

How do I choose the Right Alternative Loan for Me?

Once you know you are in a position to need alternative small business loans, you can start looking for the right one for your situation. How do you do this?  The key is to research, research, research.  Extensive research is absolutely necessary to ensure you find the best fit for your business.

While many of them function the same with similar requirements, there are some vastly different and innovative platforms for these types of loans as well.  Read all the reviews, but don’t forget to look at the actual lender websites too.  Only you know what your specific situation is.  Only you know your credit score, how long you have been in business, and how much debt you can handle.

How to Start Finding the Right Alternative Small Business Loans

Start by determining your eligibility factors.  You may not be able to anticipate what every single lender will require.  However, there are a few things that most lenders will want to know before approving a loan.  Things such as credit score, annual revenue, and length of time in business are pretty common.

If you know your score and what your annual revenue is before you begin looking for alternative small business loans, you will be able to weed out the ones you do not qualify for from the beginning. There are so many that you will definitely see the need to do this.  Just to show you a sampling of what’s available, we have chosen a few different ones to get you started.

5 Alternative Small Business Loans to Kickstart Your Research

Start here, but definitely do not stop with this list.  There are far too many options available, and new ones pop up regularly.

alternative small business loans Credit Suite2

Fundbox

If you start with a search for alternative small business loans, Fundbox is going to be one of the first to pop up.  It is a line of credit rather than a loan, but it is a great funding option because there is no minimum credit score requirement.

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

Loan amounts come as low as $100 and as high as up to $100,000, but the max initial draw is $50,000. Though there is no minimum credit score requirement, they do require at least 3 months in business, $50,000 or more in annual revenue, and a business checking account with a minimum balance of $500.

BlueVine

As you find with many alternative business loans, lenders often offer options more similar to invoice factoring and lines of credit, as these present less risk than straight term loans.  This is true of Fundbox as well as BlueVine.

The minimum loan amount available from BlueVine is $5,000 and the maximum is $100,000. Annual revenue must be $120,000 or more and the borrower must be in business for at least 6 months. Personal credit score has to be 600 or above. It is important to note also, that BlueVine does not offer a line of credit in all states.  You can find out more in our review here.

Upstart

Upstart is one of those that uses a completely innovative platform for alternative loans.  The company itself questions the ability of financial information and FICO on their own to truly determine the risk of lending to a specific borrower.  They choose to use a combination of artificial intelligence and machine learning to gather alternative data instead.  They then use this data to help them make credit decisions.

This alternative data can 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.  Typically, business loans are available ranging from $1,000 to $50,000.  Interest rates vary greatly, ranging from 7.5% to 35.99%.  Repayment terms can be either 3 -year or 5-year.

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

To be eligible for a loan with Upstart, you must meet the following qualifications:

  • Credit score of 620+
  • No bankruptcies or negative public records
  • No delinquent accounts
  • Meet debt to income standards (they only note they will check this ratio, not what their standards are.)
  • Have fewer than 6 inquiries in the past 6 months on your credit report, not including those related to student loans, vehicle loans, or mortgages

These are the requirements they list on their website.  One independent review said that the requirement for the debt to income ratio is a maximum of 45%. It also says that the minimum annual income has to be at least $12,000.  For more information on Upstart, see our in-depth review here.

Fora Financial

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

The minimum loan amount is $5,000 and the maximum is $500,000. The business must be at least 6 months in operation and the monthly revenue has to be $12,000 or more. There can be no open bankruptcies.

OnDeck

Obtaining financing from OnDeck is quick and easy. First, you apply online and receive your decision once application processing is complete. If you receive approval, your loan funds will go directly to your bank account. The minimum loan amount is $5,000 and the maximum is $500,000.

They do require a personal credit score of 600 or more, and you must be in business for at least one year. Annual revenue must be at or exceed $100,000. In addition, there can be no bankruptcy on file in the past 2 years and no unresolved liens or judgements.

Of course, these are just a few options available.  There are tons out there, and many lenders offer multiple types of alternative small business loans.  From term loans and lines of credit to invoice factoring, there are funding options for everyone.

You Still Need Business Credit

Though these lenders generally offer personal credit minimums for requirement standards, some will take business credit into account if you have it.  In addition, you can always get business credit cards with business credit.  The question is, do you have business credit?  If not, how do you get it?

Building business credit is a process that takes time, but it isn’t hard.  You just have to set up your business to appear fundable, and then work to get accounts reporting to your business credit report rather than your personal credit report.  That means applying for credit using your business information rather than your personal information.

Benefits of Business Credit

Business credit allows your business access to funds you never even knew you could get. You can bid on real estate, get new equipment, and cover payroll. This is particularly useful in seasonal companies, where you can go for months with only nominal sales.

These are just a few of the reasons to build business credit. You can’t do that however, unless you know what impacts your business credit score.  How do you even get business credit to begin with?  This is the part of lot of business owners miss.

Establish Business Credit

If you are simply operating as a sole proprietorship, as many small businesses are, you probably do not have business credit.  The reason being, your business transactions are likely being reported on your personal credit report.

To ensure you have a business credit report that is separate from your personal report, you need to separate your business from yourself.  The first step in doing this is to incorporate, no longer operating as a sole proprietor.  You can choose from organizing as a corporation, S-corp, or LLC.  Which one you choose will depend on a variety of factors including the level of liability protection you want and how much you are willing to spend.  However, for the purpose of establishing business credit, any of them will work.

You will also want to be sure you have separate contact information for your business listed in the directories, a dedicated business bank account, and a professional website.  Find out more about establishing your business as an entity separate from yourself for building business credit here.

How to Get Business Credit

After you establish your business as separate from yourself, you will need accounts reporting to the business credit reporting agencies in your business name.  That part is a little trickier, as most places will not extend credit to a business that does not have a credit score.  The key is to use starter vendors from the vendor credit tier.

These are vendors that will extend invoices with net terms even without a credit check and report your payments to the business credit reporting agencies like Dun &Bradstreet, Experian Business, and Equifax.  Find out more about starter vendors here.

Things to Remember When Building Business Credit

Once you have the ball rolling on building business credit, whether to help you get business credit cards, alternative loans, or some other type of funding, keep these things in mind.

  • Paying on time is important

Late payments will affect your business credit score for a good seven years. If you pay your business bills off, as quickly as possible and as completely as possible, then you can make a very real difference when it comes to your credit scores. Be sure to pay in a timely manner and you will reap the rewards of

punctuality.

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

  • Your Personal Credit Isn’t Totally Off the Table

Experian Business actually offers lenders a blended score that includes your personal credit history.  While a great business credit score can help counteract a negative personal credit score when it comes to the business score, you should still take steps to improve your personal score.  Find out how here.

  • How much credit you use matters

Do not give in to the temptation to use every bit of credit you have at once.  That will mess with your credit utilization.  This is indicated by your debt-to-credit ratio.  That  indicates how much of your available credit you are using.  If you keep balances close to your limit, it can affect your score negatively.

You Still Need Business Credit, Even if You Can Get Alternative Small Business Loans Without It

If you need funding for your business and do not qualify for loans from a traditional lender, then alternative business loans could be for you.  Their requirements are less stringent than those of traditional lenders, so even if your personal credit score is not great, you could still get one.  However, regardless of whether you have good personal credit, you need to be building business credit.

This will not only extend the benefits already mentioned, but it can also help protect your personal finances.  Despite the fact that your personal credit can at times have a bearing on your business credit, the opposite is typically not true.  So, if there is an issue that affects your business credit, your personal credit should stay intact.

 

 

 

The post 5 Up to the Minute Alternative Small Business Loans appeared first on Credit Suite.

Keep a Competitive Small Business and More –10 Brilliant Business Tips of the Week

The Hottest and Most Brilliant Business Tips for YOU – Keep Up and Be a Competitive Small Business and More

Our research ninjas at Credit Suite smuggled out ten amazing business tips for you! Be fierce and score in business with the best tips around the web. You can use them today and see fast results. You can take that to the bank – these are foolproof! Become a more competitive small business and succeed today!

Stop making stupid decisions and start powering up your business. Demolish your business nightmares and start celebrating as your business fulfills its promise.

And these brilliant business tips are all here for free! So settle in and scoop up these tantalizing goodies before your competition does!

#10. Map Your Way to More Sales

Our first jaw-dropping tip is all about building a sales process map. Mail Shake says “a sales process map outlines how your organization interacts with your buyer from attraction, engagement, selling, closing, and retaining.”

So the concept is to have a blueprint for dealing with your sales and your buyer. It is not the details or the ‘how’. It is the ‘what’. So if your organization has a step for a demonstration, that should be listed. 

In fact, per the article, a lot of prospects get the demonstration too early within the process. How come? Because a lot of demonstrations are long and just plain not that interesting. So know when to make the demonstration. And then your buyer will actually be primed and ready. And interested. Talk about being a competitive small business!

But it all comes down to one thing. The bottom line is to have the process understood and written down. Because the last thing you want is for only one person to know it, and for that person to leave your company.

#9. Take Your Sales Efficiency to the Max

The next awesome tip is about achieving maximum sales efficiency. LinkedIn notes this comes down to two separate questions. In what way can you be more productive? And how can you make your time spent selling more efficient?

Essentially, the idea is not to work late – or at least, no later than you must. Rather, you need to spend the time you set aside as well as you can. Make it effective!

Say No and Own Your Time

This is perhaps the best takeaway from this article.  What’s sapping your time and strength and energy? Is it doing anything good for you?

If it isn’t, then jettison it from your life. 

And more importantly, learn how to recognize such piles of temporal quicksand, and steer around them in the first place.

We recommend checking out the last third or so of the article – the rest is more of an ad for a part of LinkedIn. You want to zero in on the quotes at the bottom.

Competitive Small Business Credit Suite

If you are as passionate about succeeding in business as we are, please help us spread the word about how to take the plunge and save time and money – and your sanity! Stay a competitive small business!

#8. Oops! These Digital Marketing Errors Are Costing You Money

Our following life-changing tip concerns avoiding digital marketing mistakes that are costing you sales. G2 lays it all out for us. There are any number of mistakes but we’re only going to concentrate on one in this blog post. We’ve covered a lot of the others before and fairly recently. So we’ll just look at one.

The Absence of a Mobile Marketing Strategy

We cannot emphasize enough just how vital a mobile marketing strategy is! Consider this. How many times have you gone to a website while on your phone and been frustrated with how hard it was to get around and find things? And how many times have you wondered why there’s no app for whatever it is that you’re looking for?

Plus, how many times have you downloaded an app and then suddenly everything is so much easier? And while that’s great and all, it ignores one basic issue. And that is that the website should still be responsive to mobile. Yes, even in the presence of an app.

Plus a responsive website design makes it so much easier to accommodate all of the new tech that’s coming our way in the future. What, you thought your version of an iPhone or Android was the last one ever going to be made?

Think again.

#7. Get to the Point!

For our next sensational tip, we looked at building a profitable audience with specificity. Copy Blogger says that ultra-specificity in copy will help you sell more. Kind of hard to argue with that.

In particular, specifics rock headlines. How? Consider some of the more exceptionally memorable news headlines of all time:

  • Ford to City: Drop Dead! (New York Post, 1975)
  • The Filth and the Fury! (The Daily Mirror, 1978, talking about the punk group, the Sex Pistols)
  • Ali Stings Joe, Wins Decision (New York Daily News, 1974)
  • War Over! (The Dayton Herald, 1945)

Every single one of these gets to the point fast. Although you can argue the one from the Daily Mirror is a touch tangential. But paired with an image, it’s obvious what they mean. All of these headlines do it in 5 words or less.

That’s an incredible economy of words. 

Four U’s

This section of the article is worth the price of admission all by itself. 

“The Four U’s of headline writing, as outlined by American Writers and Artists Inc. (AWAI), are a helpful guide when evaluating any piece of sales copy or content:

  1. Useful
  2. Ultra-specific
  3. Unique
  4. Urgent”

Without urgency, you have nothing. After all, if you don’t have an interest in the local news in Dubuque, then who cares how awesome my headline is? And the corollary is also true. If the local news in Dubuque is the thing you want to read about, then I had better get that across in my headline. Otherwise, you just might miss it.

And that doesn’t do either of us any good, now, does it?

So check out the article in its entirety. It is well worth it!

#6. You’re Hired! Or, Rather, You’re Hiring!

This tip is so cool, and it works! All Business tells us all about hiring. 

We highly recommend reading this article in its entirety as it makes some excellent points about, among other things, how good hiring can save your business a ton of money. So instead we’re going to concentrate on a point that they don’t quite make.

True Story Time

15 years ago (egad, it was that long ago?), your intrepid blog writer worked for a voice recognition company. The work was … okay. But the boss was terrific. And one day I asked her: how do you decide who to hire? And how did you decide to hire me? Keep in mind, I had absolutely no experience in voice recognition whatsoever when I was hired.

She said, “If all other things are equal, I hire the person who I feel is the most curious. Because they will learn new things and they will be diligent about finding mistakes and better ways of doing things.”

And so I leave you with this bit of wisdom. Hire the curious.

Thanks, Amy.

#5. Become and Stay a More Competitive Small BusinessCompeting Biz Credit Suite

Grab this mind-blowing tip while it’s hot! 

It’s all about being a competitive small business. So, can your business compete with the bigger companies out there? Or are you being left in the dust?

The Business Backer says a smaller business has some advantages, simply by virtual of its size. So use them!

Business Be Nimble, Business Be Quick!

It’s a great way to be a more competitive small business – and even a competitive small business versus a larger business. 

Very large businesses can be entrenched in bureaucracies and layers of management. With all of these cushions, these businesses can end up with a lot of hands touching even some of the smaller decisions. 

Committees can end up deciding on everything from the official company font to whether they’re going to start offering muffins for sale in the cafeteria. And that means they are also deciding on things such as how to change an approach to a prospect. It can be a hard, slow process for a large business to alter its advertising and marketing strategies.

You don’t have to do any of that. Rather, you’re quite possibly a committee of one. Your entire company can possibly meet in one room. 

True story – your intrepid blog writer once worked for a company which could and did meet in a compact car.

So you can be faster. This also means flexibility. With fewer stakeholders, people might not be so married to your color or advertising campaign choices. If something is better, there are a lot fewer people to convince of that fact.

Small businesses have flexibility that larger ones just plain do not have.

Scratch That Niche!

Here’s another place where being small helps you. You are a competitive small business when it comes to niche marketing. 

Being a small company means you can relate pretty directly to a small group of people. And that means a niche audience, almost by definition. If, say, you’re Marvel Comics, you pump out tons of comics and films all the time, to appeal to a myriad of tastes. But if you’re Mom and Pop Startup Comics, maybe you concentrate on just superheroes from Milwaukee.

If you can corner the market on people interested in your niche, your marketing, sales, and advertising will be easier and quite probably cheaper.

Don’t spray your shots!

Competitive Small Business Credit Suite

If you are as passionate about succeeding in business as we are, please help us spread the word about how to take the plunge and save time and money – and your sanity! Stay a competitive small business!

#4. Bring Order Out of Chaos

Check out this spectacular tip, all about keeping order in your office. EO Network notes that a messy work environment will often negatively impact your performance.

Preach.

Our favorite part of this is that it can work for a home office or if you actually – shudder – leave the building.

Reduce Your Stuff and Find Homes For All of It

It all really comes down to those two things. What needs to stay? And what needs to go? In addition, what needs to move or be transformed? 

Do you keep old drafts of writing? Do you have to? Consider this – you can probably get rid of nearly all of that or at least convert it to an electronic format. Even if you have to somehow prove you drafted a document or two or twelve, there can be ways of proving that without having to hang onto a ton of outdated drafts. Electronic signatures, anyone?

Photograph or scan anything which you know you’re going to need in an electronic format and recycle the rest of it. Good bye, chaos. Hello, space.

More space means you’ll find everything more quickly. And it also means you’re more likely to have the latest version of whatever you need – after all, you’ve stored or discarded the older versions, right?

Save your sanity and tame your office clutter!

#3. Brick By Brick, Build a Brand Strategy

It’s not your imagination: this winning tip can help you build a strategy from scratch. Young Upstarts tells us a brand strategy is a long-term plan to help you make your clearly defined goals and objectives. So this is, in a way, an expansion of our tip #10, going beyond a sales strategy and looking at everything in your business, from soup to nuts.

Discovering Your Business

As in, why does your business exist in the first place?

If you can’t answer that one easily, and explain it to others readily, then why should they trust you? Why should they do business with you? And why should they listen to anything you have to say.

Ouch.

Who Are You, Anyway?

What makes your brand and your business different from any other? Why should your customers and prospects choose you over any other business? What makes you a competitive small business?

So let’s consider an example from, of all things, the movies.

Moscow on the Hudson and the Confusing, Frightening World of Too Many Choices

This is a 1984 Robin Williams film, so if you have never seen it, don’t worry. The premise is that Williams plays a Soviet circus musician who defects. And life in the country where the streets are paved with gold is not so easy, he finds.

Here’s the only scene you need to worry about: 

It’s less than a minute long. I’ll wait.

In this scene, Williams’s character goes to a small supermarket to get coffee. And, he’s confronted with a rich array of choices. Now, keep in mind that people for real who lived during the Soviet Era were often lucky to get coffee at all if they went shopping for it. Most of the time, there was just one form of coffee and you either took it, or you left it.

Two things happen here. One is that he reads off the names of several brands and types of coffee – espresso, decaf, etc. And the other half is how overwhelmed he is by the embarrassment of choices.

Both parts of the scene work for our purposes.

Brand Strategy and Identity

In the first part, did you notice how much you know about each of the brands he mentions? You may even think of their tastes and aromas. Or you might consider their prices or whether they feel ‘premium’ or ‘basic’. 

All of these feelings and associations showcase the success of these various brands’ strategies. Their identities are well-known. But then there’s the other half of the scene.

It’s All the Same When You Don’t Know Anything About a Brand

And, that’s the character’s problem in a nutshell. For the character, no such associations have been made yet. And since that’s the case, unless it’s a generalized, obvious piece of information – such as price or caffeine amount – he knows absolutely nothing about any of the brands on display. 

What you want is for your customers and prospects to make those associations from the first half, rather than become confused and frustrated by the overwhelming pressure to decide on something, anything.

A lot of that comes from how you execute your brand strategy. If you’re Sanka, you emphasize how having little to no caffeine is relaxing. If you make espresso, you emphasize the elegance and associations with Italy and bolder flavors.

So, what flavor of business have you got?

#2. Get Your Startup Out of Your Dreams and into Reality

Our second to last unbeatable tip can give you a new perspective on moving from inspiration to business reality. Startup Professionals reveals all about how to avoid being one of the over 75% of all startups which fail.  

We’ll concentrate on three points.

Test and Test. Then Test Some More.

People aren’t just going to buy your stuff because of your good looks and charm. And testing with your family and friends is only going to get you a bunch of false positives. Instead, test with people with money to spend! 

Because otherwise, they can’t buy your stuff.

Get Ready to Tell Your Marketing Story to Anyone and Everything

The article talks about what is essentially an elevator pitch. This is a bit like our tips #3 and #10 – you need to be prepared. And in particular, you need to be ready to talk to just about anyone about your product or service. How’s the easiest way to do this? Build a strategy. Don’t just try to wing it. That never works out like it does in the movies.

Put Together a Strategy for Growth and Improvement

That is, plan for success! And just as importantly, get ready for change. For if there’s one constant these days, it’s change. Embrace it before it knocks you over.

#1. Leverage Your Website and Improve Your SEO

We saved the best for last. For our favorite remarkable tip, we focused on an SEO audit checklist. Main Street ROI says there are a number of basic mistakes they see over and over again.

Don’t let your website be one of those error-riddled sites.

Clarity FTW

A clear and easy to follow website will do you a lot of good. It doesn’t just make your readers happy. It also makes search engines happy. 

A well-organized website where the pages are easy to read and load fast will help out tremendously! 

Another tip we loved is to essentially use as much of the free real estate you’ve got that you can. What do we mean by that? Basically, the idea is to put your keyword phrase or at least your website name in all of the places where you can.

We do not mean keyword stuffing. Rather, there are places such as the alt tags for your images.  You know, the place where you tell a search engine what an image is about, to make it easier to index.

Are you using yours? Or did you not know what they were until this very moment? Or worse, had you never even heard the phrase until just now?

Organize your website and use the free spaces you’ve got to the max. 

So which one of our brilliant business tips was your favorite? And which one will you be implementing now? 

Competitive Small Business Credit Suite

If you are as passionate about succeeding in business as we are, please help us spread the word about how to take the plunge and save time and money – and your sanity! Stay a competitive small business!

The post Keep a Competitive Small Business and More –10 Brilliant Business Tips of the Week appeared first on Credit Suite.

Truths About Small Business

Realities About Small Business Every person settles on a wide degree that small companies are crucial to the American economic situation. Many individuals would certainly be shocked to understand simply exactly how crucial. The United States Small Business Administration maintains documents as well as stats on local business in the United States and also a …

The post Truths About Small Business appeared first on Buy It At A Bargain – Deals And Reviews.

Truths About Small Business

Realities About Small Business Every person settles on a wide degree that small companies are crucial to the American economic situation. Many individuals would certainly be shocked to understand simply exactly how crucial. The United States Small Business Administration maintains documents as well as stats on local business in the United States and also a …

4 Reasons Your Business Needs a Card to Build Small Business Credit History

What is Small Business Credit History and Why Do You Need It?

In the excitement of starting a business, and then the ensuing chaos of running a business, many business owners do not consider that they need to actively build small business credit history.  It is likely in fact, that if they stopped a minute to think about it, they would find that they imagine it is building on its own in the daily course of things.  After all, you do not have to do anything to establish a personal credit history.  You simply get credit, make payments (or not), and your personal credit history builds as a function of the financial choices you make.

This is not how it works with business credit.  In fact, unless you make some very active, purposeful choices, it is possible to own and run a business for years and never build business credit. It’s unfortunate as this can be a tragic mistake for your business.  The problem is, most business owners do not even realize it is something they need to be doing.  They do not know that to build small business credit history, they have to actively work toward it.  If they do know, they do not understand how important it is.

We are going to answer both questions.  First, why is it important? Next, how on earth do you do it?

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

4 Reasons Why You Need to Build Small Business Credit History

While it isn’t hard to imagine why credit history itself is important, it can be difficult to grasp why a business needs to build small business credit history separate from that of its owner.  Here are just four reasons why.

Protect Your Personal Finances

The greatest benefit to the business owner is that when a business has a credit history of its own, the owner’s personal finances are better protected.  You might think that if business debt is in the business name, you as the owner are not liable for it.  That is not the case, unless you follow some very specific steps.

The truth is, some lenders will hold you liable anyway.  There are a number of lenders however, especially credit card companies, that will extend debt to the  business alone if it is set up as a funable entity.  In these cases, the owner’s credit will not change in relation to what happens with that debt.  The account will only show up on the business credit report.

Allow for Better Rates and Terms

As I said before, some check personal credit no matter what.  However, if you do not have great personal credit, but your business credit is good, you may be able to negotiate for better terms and rates despite a lower personal credit score.  It will not protect your personal credit completely, but it can still do you some good.

build small business credit history Credit Suite2

Increased Borrowing Capacity

Businesses have a greater credit capacity than individuals for a number of reasons.  The main reason is the increased income from business activities.  This is important, as the credit needs of a business are significantly higher than those of individuals.

Trying to finance a business on personal credit capacity is dangerous.  Business spending is much higher than personal spending by nature, and personal credit limits are much lower than business credit limits.  Often, personal credit can’t hold up to business spending.  If it can, then balances hover at or near credit limits, causing a high debt-to-credit ratio and thus a lower personal credit score even if you make payments on time.

Increase the Value of Your Company

Even if you are not thinking of selling your company, ever, you never know what can happen.  If you build your  business credit score now, it will go with your company even if the business changes owners.  Anyone who buys your company will also get its credit history and benefit from the hard work you put into building it.

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

How Do You Build Small Business Credit History?

Now that you understand why you need to do it, you need to know how to build  business credit.  It takes time.  It’s a process.  The first step is to separate your business from yourself.  This will ensure your business accounts are reporting to your business credit history and not your personal credit history.

Business credit is credit in a business’s name. It doesn’t link to a business owner’s individual credit, not even when the owner is a sole proprietor and the only employee of the company.

Build Small Business Credit History: Incorporate Your Business

The best place to start is at the beginning.  However, if you are already up and running, it’s never too late.  The first thing you must do is formally incorporate your business.  This means organizing as a corporation, S-corp, or LLC.

The option you choose will depend on a number of variables specific to you and your business.  The two main questions to ask yourself are:

  • How much personal liability protection do you want or need?
  • How much do you want to spend to incorporate?

Each option offers different levels of protection and expense, so it just depends on which one works best for you and your business.  They each offer the separation you need to build small business credit history.

Build Small Business Credit History: Separate Contact Information

Your business absolutely must have an address, phone number, and email address that is different from yours as the owner. The phone number should be through a toll-free exchange and listed in the 411 directories.  Do that here. Your email address cannot be from a free service.  That will not work. You need to have an email address that has the same URL as the business website.

Speaking of websites, yes, you need one for your business.  Not only that, but it needs to be a good one.  If it looks sloppy or unprofessional, it could do more harm that good.  Hire a professional to ensure it is done properly, and spring for paid hosting with someone like GoDaddy.  Free hosting does not look professional.

Build Small Business Credit History:  Separate Bank Account

Your business needs a business bank account.  Running business income and expenses through your personal accounts can cause a host of problems.  Tax time can be especially daunting when you have to separate business expenses from personal ones.  Beyond that however, many vendors and credit card companies require a business bank account before they will extend business credit.

Build Small Business Credit History: Identifying Numbers

There are two identifying numbers that your business will need to build business credit history.  The first is an EIN.  This is an identifying number for your business similar to how social security numbers function for individuals.   Get it for free on the IRS website.

Next, your business needs a D-U-N-S number.  This one comes from Dun & Bradstreet.  It is free as well, but they will try to sell you a ton of other services while you on their site.  You do not need anything else.  Just get the free number.

Without this number you cannot have a credit file with Dun & Bradstreet.  Since they are the largest and most commonly used business credit reporting agency, you definitely need to have the number.

Build Small Business Credit History: Get Accounts Reporting

The next obstacle to overcome is how to get accounts reporting.  This one seems hard on the front end, but truly it isn’t once you know the secret.  That secret is the vendor credit tier.

Vendor Credit Tier

First you must build tradelines that report. This is also called the vendor credit tier. Then you’ll have an established credit profile, and you’ll get a business credit score. And with an established business credit profile and score you can start to acquire credit in the retail and cash credit tiers.

These vendors sell the things you already buy all the time, like marketing materials, shipping boxes, outdoor workwear, ink and toner, and office furniture. Many of them will extend net terms on invoices without a credit check, and then report those payments to the business credit reporting agencies.

These are merchants that grant an approval with very little effort. You want 5 to 8 of these to move onto the next step, which is the retail credit tier. But you may have to apply more than one time to these vendors. This is to prove you are responsible and pay on time. Here are some of the most commonly known and easiest  vendors to get started with  in the vendor credit tier.  They are known as starter vendors.

Uline

This is a true starter vendor that sells shipping, packing, and industrial supplies.  You have to have a D-U-N-S number. So Uline will ask for 2 references and a bank reference. The initial few orders may have to be prepaid to first get approval for Net 30 terms.

Quill

This is another starter vendor. They sell office, packaging, and cleaning supplies.  So they also report to D&B and Experian.

Since Quill reports to two separate credit reporting agencies, you get two credit experiences with them. Place an initial order first unless the D&B score is developed.  In most cases they put you on a 90-day prepayment schedule. If you order items monthly for 3 months, they usually approve you for a Net 30 Account.

Grainger Industrial Supply

Grainger sells safety equipment, plumbing supplies, and tools.  They report to D&B, and you need a business license, EIN, and a D-U-N-S number.

For less than a $1000 credit limit they approve almost anyone with a business license.

Retail Credit Tier

Once there are 5 to 8 or more vendor trade accounts reporting to at least one of the business credit agencies, then move onto the retail credit tier. These are credit cards connected to specific businesses like Office Depot and Lowes.

Fleet Credit Tier

After the retail credit tier comes the fleet credit tier. These are businesses such as BP and Conoco. Use this credit to buy fuel, as well as to fix and maintain vehicles.

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

Cash Credit Tier

After the fleet credit tier comes the cash credit tier.  These are service providers like Visa and MasterCard that are not attached to a specific store.

The thing about trade accounts in the vendor credit tier and the credit cards in the retail, fleet, and cash credit tiers is that they report to the business credit reporting agencies (CRAs).  Not all lenders will do that.  You definitely need to work through the tiers with the credit card companies if you are going to build small business credit history.  This is the only way to do it.

Keep an Eye on Your Credit History

You’ll want to watch both your business credit reports and your personal reports to make sure accounts are reporting on the right one.  While you are at it, keep an eye out for mistakes, and keep information updated.

We can help you monitor business credit at Experian and D&B for 90% less than it would cost you at the CRAs. So see: www.creditsuite.com/monitoring.

Your Business Needs a Card to Build Small Business Credit History

Now you understand what business credit is and why you need it.  Why though, do you need a credit card to build small business credit history?  Here’s why.  First, it will build faster with a credit card.  Building business credit with vendor accounts only would be extremely slow.

Term loans rarely help build business credit as most lenders do not report to business credit agencies.  They typically only pay attention to the owner’s personal credit, though they may take business credit into account if it can help secure the loan.

Some alternative lenders will report to the business credit agencies, but they will not extend credit unless you already have a solid business credit score.  That makes it hard to use them to build business credit.  The key to being able to build business credit history lies with the vendor credit tier and business credit cards.

The post 4 Reasons Your Business Needs a Card to Build Small Business Credit History appeared first on Credit Suite.

How to Get a New Small Business Loan  and Why It’s Better Than Crowdfunding   

Why It’s Better Than Crowdfunding

When you own a business there is only one thing for certain.  You are going to need funding.  Where you get that funding is another story.  There are a ton of options, and choosing the one that will work best for your needs is sometimes the most difficult part.  Two of the most common options are small business loans and crowdfunding. For most, a new small business loan is going to be the best bet.  We’re going to tell you how to get a new small business loan, and why it’s a better choice than some other funding options, specifically crowdfunding.

How to Get a New Small Business Loan: Business Funding Options

First, it can be helpful to know what your options are.  There are many, but all are not created equal. Complicating things even more, there are multiple subtypes within many of the different available types of funding. Here is a quick overview.

Loans

This is money that you borrow and pay back over time, plus interest.  The rate of interest, time you have to pay back the money, and the requirements to qualify for the loan vary widely between loan types and lenders. All of the variance is why many are so unsure of how to get a new small business loan.

Demolish your funding problems with our rock-solid guide about 27 killer ways to get cash for your business.

Lines of Credit

If you are trying to figure out how to get a new small business loan, there is no doubt you are going to start wondering about lines of credit also.  A line of credit is similar to a loan in many ways.  You apply for it the same way, generally through the same type of lender.  The difference is that this is revolving credit, similar to a credit card. You only pay back what you use, and you use only what you need.  The funds are there to draw from. But you do not have to pay back the full amount.   Typically, the interest rates and terms are better than that of a credit card.

Factoring

Invoice factoring, or receivables factoring, is sort of a cash advance on outstanding accounts.  If you need cash and have a ton of outstanding invoices or receivables, you can factor them and collect a portion of the cash.

The lender will pay you the value of the invoices, less a premium, and then collect cash on those accounts from the customers directly.  The older the account is, the higher the premium is because there is a greater risk they will not collect. Therefore, if most of your accounts are 60 days or less, you may want to increase collection efforts on your own first and see what you can get.

Credit Cards

Most everyone knows how credit cards function.  They are revolving credit, just like a line of credit.  The difference is generally a higher interest rate, and sometimes there is an annual fee.  One point that team credit card gets, though, is that some of them offer rewards such as cash back or airline miles.

how to get a new small business loan Credit Suite2

Crowdfunding

Crowdfunding is a way to raise money for your business through investors.  These are not your standard investors though.  You choose a platform, like Kickstarter or Indiegogo, and create a campaign for your business.  Platform users can then choose campaigns they wish to contribute to.  Contributions range from $5 to $5,000 or even more. This is completely free money that you do not have to pay back, though you may need to offer an incentive or profit sharing of some sort to your investors.

Angel investors

These are investors, but they often function differently that regular investors as well.  There are angel investment firms, where you can present a pitch and see what happens, but also a friend or family member can be an angel investor.

Grants

Grants for small business are just like grants for school.  They are free money that you do not have to pay back.  Sometimes they come in the form of an award for some type of contest. Competition can be fierce when it comes to grant funds.  There is only so much money to go around and everyone wants it.

Grant funds are also often reserved for specific types of businesses based on who the owner is or the mission of the business.  For example, a grant may be specifically for businesses that are environmentally minded, or for those businesses run by veterans, minorities, or women.

Which Funding Option is Best?

If you were wondering how to get a new small business loan, you may not be wondering if crowdfunding is better.  Upon first glance it can appear that this is the case. Free money is always best. And if all you have to do is convince people to give, that’s even better, right? Crowdfunding offers seemingly unlimited free funds.  You can collect whatever the people will give.  In theory, this is true.  If you look just a little deeper however, below the surface, there are some details that may surprise you.

First, you need to know that all crowdfunding platforms are different. The rules for how long a campaign can run and when you can collect your money vary from platform to platform.  For example, Kickstarter will not allow you to collect your money until your reach your goal.  If you do not reach your goal, you do not get any money.  Indiegogo, on the other hand, allows you to choose if you collect as you go, or after you meet your goal.

The problem then becomes predictability.  If you have time to sit back and leisurely raise money, this may work.  Still, most people who need business funding need it like, yesterday.  Waiting around for a campaign to reach its goal, or even collecting small amounts here and there will probably not cut it.

Another issue is the incentive that is often required.  While incentives can range from a free product or some bauble like a keychain or even a thank you note, the most successful ones are substantial.  More than one business has found itself in trouble trying to make good on crowdfund campaign promises.

What You Need to Know

Loans are truly a better option for most, so you do need to know how to get a new small business loan when the time comes.  They are  predictable and, while you do have to repay with interest, you have some control over the terms and rates.

Not only that, but those payments can help you build credit.  That, in turn, will allow you to get better terms and rates, as well as potentially more money in the future. In addition, an institution where you already have a loan will be more likely to approve you for additional loans, assuming you consistently pay on time.  Running a second crowdfunding campaign may not be as fruitful, even if you have success with the first one.

How to Get a New Small Business Loan

The process of getting business loans can be overwhelming.  We break it down for you so you can get the funds you need to start or grow your business as soon as possible.

Shop Around

The first step when considering how to get a new small business loan is to shop around.  Find a lender that has the loan product that best fits your needs.  Find the loans with the best terms and interest rates, then check their eligibility requirements to see if you apply.  There are a few different types of lenders you can choose from.

  • Large banks
  • Smaller community banks
  • Credit Unions
  • Online Lenders

Which one you choose will depend on a number of factors.  Large banks do not typically work well with small businesses. But that does not mean you shouldn’t see what they have to offer.  In general, small banks and credit unions will have the best terms and rates, in that order, but the process can still be lengthy.

Demolish your funding problems with our rock-solid guide about 27 killer ways to get cash for your business.

If credit or timing is an issue, online lenders may be the best bet. While their interest rates are not typically as low, they are often more flexible on minimum credit score than traditional lenders.  The option with most to do the entire application online means you can get your funds quicker as well.  In some cases you can get funds in as little as a few days with approval in as little as 24 hours.

The Small Business Administration

It is impossible to figure out how to get a new small business loan without a discussion about The Small Business Administration, or SBA.  This is a government agency that offers support and resources to small businesses.  Though they do not directly lend funds, they do work with local lenders to help small businesses get the money they need.

When you are looking at how to get a new business loan, you definitely need to consider researching lenders that work with the SBA.  While not all small businesses will benefit from an SBA program, many will.  Their programs are meant to make it easier for businesses that may not qualify for loans on their own to get the funds they need.

Pay Attention to SBA Loan Programs

You can’t figure out how to get a new small business loan without knowing what programs the SBA offers.  There are those meant specifically for working capital, as well as those designed more for equipment and real estate purchases. Following is a breakdown of a few of the most popular SBA loan options.

7(a) Loans

This is the Small Business Administration’s main loan program. It offers federally funded term loans up to $5 million. The funds can be used for a number of things including:  expansion, purchasing equipment, working capital and more. Banks, credit unions, and other specialized institutions in partnership with the SBA process these loans and disburse the funds.

There is a minimum credit score requirement of 680 to qualify.  In addition, they also require a down payment of at least 10% for the purchase of a business, commercial real estate, or equipment. A business must have been in operation for 2 years to qualify. In the case of startups, business experience equivalent to two years will work.

This is the most popular of the SBA loan programs. Funds are available for a broad spectrum of projects, from working capital to refinancing debt, and even buying a new business or real estate.

504 Loans

504 loans are available for up to $5 million.  Funds from these loans can buy machinery, facilities, or land. They are generally used for expansion, and private sector lenders or nonprofits process them. 504 loans work especially well for commercial real estate purchases.

Terms range from 10 to 20 years, and funding can take from 30 to 90 days. The minimum credit score is 680, and collateral is the asset the funds are financing. There is also a down payment requirement of 10%, which can increase to 15% for a new business.

This loan requires you to be in business for at least 2 years, the same as the 7(a) program, or management has to have equivalent experience if the business is a startup.

Microloans

Microloans are available in amounts up to $50,000. They are best for starting business purchases such as equipment, inventory, or just general working capital. Community based non-profits administer microloan programs as intermediaries, with financing coming directly from the Small Business Administration.

Interest rates on these loans are 7.75% to 8% over the lender’s cost to fund.  Terms go out to 6 years. They can take 90 days or more to fund. The minimum credit score is 640, and the collateral and down payment requirements vary by lender.

SBA disaster loans

Available in amounts up to $2 million, these loans are actually processed directly through the SBA. They are available to small-business owners that have been affected by natural disasters.  Terms go up to 30 years. The maximum interest rate is 4%. You can apply for disaster loans directly at SBA.gov.

Demolish your funding problems with our rock-solid guide about 27 killer ways to get cash for your business.

The minimum credit score for disaster loans is 660. Collateral is necessary if the loan goes over a certain amount, usually $25,000.  If collateral is not available at the time, then it is can wait until it becomes available. For a military economic injury disaster, the amount at which collateral is necessary increases to $50,000. A down payment is not a requirement either way.

SBA Express loans

Express loans from the SBA max out at $350,000.  Interest rates are capped at 11.50%. Terms range from 5 to 25 years.  The SBA guarantee is less than with their other loan programs at 50%. You must have a credit score of at least 680 to qualify.  If your debt-to-service ratio is less than 1:1, you will not be eligible. Depending on the lender, there may be a collateral requirement for loans over $25,000.

They are not called express loans for nothing.  The turnaround time is substantially faster than others, with the SBA taking up to 36 hours to give a decision. There is less paperwork with the application process as well, making express loans a great option for working capital, among other things, if you qualify.

SBA CAPLine

There are 4 different CAPLine programs that vary mostly in the expenses they can fund. Each allows a maximum amount of $5 million and an interest rate that ranges from 7% to 10%. It can take 45 to 90 days to get funding.

The four different programs are:

  • Seasonal CAPLines – Financing for businesses preparing for a seasonal increase in sales.
  • Contract CAPLines – Financing for business that need funding to fill a contract.
  • Builder’s CAPLines – Financing for businesses taking on a real estate or construction project.
  • Working capital CAPLines – Financing for businesses that are struggling with a short-term slump in sales.

You must have at least a 680      credit score to apply. But there is no minimum time in business requirement unless you are getting a seasonal CAPLine, which carries a one year in business requirement.

SBA Community Advantage Loans

This is a pilot program set to either expire or extend in 2020. It’s designed to promote economic growth in underserved markets. Credit decision makers overlook factors such as poor credit or low revenue if the business has the potential to stimulate the economy or create jobs in underserved areas.

Loan amounts range from $50,000 to $250,000 with a maximum interest rate of 11%, while terms range up to 25 years.

How to Get a New Small Business Loan with Other Programs

The SBA also offers these additional programs that may be helpful.

  • Veterans Advantage– General-use business loans with no guarantee fee for majority veteran-owned small businesses.
  • International Trade– General-use financing for businesses actively involved in international trade or hurt by competition from imports.
  • Export Working Capital Program– Short-term working capital for exporters backed by invoices or other business assets.

How to Get a New Small Business Loan: Be Prepared

After you choose which loan or loan program will work best for your business, it’s time to dig in.  Unless you are using an online lender where the entire application process takes place online, you are likely going to spend a significant amount of time on this process.

Regardless of the lender, preparation is key to time savings and success.  While all lenders are different, some information is pretty standard across the board. You almost always need to have ready information related to:

  • Past 3 years tax returns (business and personal)
  • Business financial statements for the past 3 years, or 3 years’ of projections for startups.
  • A professional business plan.
  • A budget for the loan funds.

Of course, this is not an exhaustive list, but having these things ready to go will save you significant time during the application process.

Keys to How to Get a New Small Business Loan: Shop Around

There is no doubt that, for many reasons, a business loan works better than crowdfunding in almost every case.  It is both more reliable and more predictable.  Very few crowdfunding campaigns work out, while there are lenders with loan products for almost every situation.

Rather than creating elaborate crowdfunding campaigns, spend your time researching lenders and loan programs that best fit your needs.  Once you find what you are looking for, gather the information you know they will need, and be prepared to provide anything else they may ask for.  This is a great place to start when trying to figure out how to get a new small business loan.

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5 Small Business Loan Options (Some of Which You’ve Probably Never Heard of) 

What Small Business Loan Options are Out There and Which Ones Are Best for You

Funding a small business is no easy task.  There are an overwhelming number of funding options.  From small business loans to crowdfunding, and a seemingly infinite number of possibilities in between, it can be hard to choose.  For most, it will take some combination of these to get the job done.  It can help to know your small business loan options.  There may be more than you think.

Small Business Loan Options: Lenders

The first decision to make is what type of lender to use. A lot of business owners think that it’s a bank or bust.  There are a few different types of lenders to consider when looking at your small business loan options however.

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Big Banks

These are those nation-wide institutions like J.P. Morgan Chase and Wells Fargo.  As a general rule, they are not a friend to small business.  There is nothing specific that they hold against smaller businesses.  It is simply that these businesses do not generally meet their lending requirements.  It’s all numbers.  If you don’t have the numbers, you don’t get the funding.

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Community Banks

Community banks are the smaller, local financial institutions.  They are the “hometown” banks, if you will.  These guys are friendlier toward small businesses.  They are able to look a little deeper and see a tad bit more than the numbers. Their small business loan options may have slightly less strict eligibility requirements.  However, it is still a numbers game.  Whatever those numbers are, whether credit score, annual income, years in business, or some combination, you will have to have them to be eligible.

Credit Union

Credit unions come in large and small sizes as well.  The main thing to remember is that you must be a member to get a loan from a credit union.  They do usually offer more favorable interest rates however. If you are a member of one, be sure not to count them out when shopping around for loans.

Alternative Lenders

Alternative lenders generally function online, though some do have brick and mortar locations.  Their main draw is that they offer small business loan options to those that may not qualify with traditional lenders.  Their credit score requirements are lower.  They may or may not require a certain amount of time in business or minimum revenue amounts.  The main drawback is that their small business loan options typically have higher interest rates.

Small Business Loan Options: Types of Loans

In addition to the types of lenders, 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 $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, meaning 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. This is due to the fact that the likelihood of collecting on the invoice goes down the older the invoice gets.

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●        Merchant Cash Advance

If you accept credit card payments, a merchant cash advance can help you out in a cash pinch.  It is basically just what is says.  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.

Small Business Loan Options: The Small Business Administration

No discussion of small business loan options would be complete without mentioning the SBA.  While they do not lend funds themselves, they do administer a number of loan programs that help small businesses get the funds they need through partner lenders.

7(a) Loans

This is the Small Business Administration’s most known program.  It provides federally funded term loans up to $5 million. The funds can be used for a number of purposes.  These include expansion, purchasing equipment, working capital and more. Banks, credit unions, and other specialized institutions, in partnership with the SBA, process these loans and disburse the funds.

504 Loans

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

Microloans

These are $50,000 or less. They are good for starting a business, purchasing equipment, buying inventory, or general working capital.

SBA disaster loans

This is a program available to businesses that have fallen victim to natural disasters.  These loans are different because, unlike the others, the SBA actually processes them directly rather than using partner lenders.

SBA Express Loans

The turnaround for express loans is much faster, with the SBA taking up to 36 hours to give a decision. There is less paper work as well, making express loans a great option if you qualify.

SBA CAPLines

There are 4 different CAPLine programs.  They differ mostly in how the funds can be used. The maximum on each is $5 million.  It can take 45 to 90 days for the funding on CAPLines to come through.

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SBA Community Advantage Loans

This is a pilot program.  It will either expire, or the SBA will extend it in 2020. Its purpose is to promote economic growth in underserved areas and markets. Decision makers look past such things as poor credit or low revenue if the business has the potential to create jobs or promote economic growth in underserved areas.

These are some of their most popular programs. The Small Business Administration does so much more for small businesses in addition to these.  Get more details on the SBA, these loan programs, and additional resources offered by the Small Business Administration here.

5 Specific Small Business Loan Options

Now, you are probably here because you need to know specifically where to go to get a small business loan.  As you have seen, the possibilities are endless.  However, here are some of our favorite online lenders for those that may be having trouble qualifying for loans.

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.  Instead, they are using a combination of artificial intelligence and machine learning to gather alternative data.  They then use this data in the credit decision making process.

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 uses this data, then learns and improves on its own.

They offer various types of financing products to fit a broad range of needs. From credit card refinancing to student loans, and pretty much anything in-between, there is something for everyone.  Debt consolidation and personal loans are included, in addition to business loans.

You can get a quote on a loan to start or expand a business.  Quotes are available online in a matter of 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 with higher earnings happening 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 quickly. 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, or $4,200 or more per month in the previous 3 month period.

They are great if you need cash quickly. Also, their non-traditional approach puts less weight on your credit score, so they may work better for some borrowers than other lenders.

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, these funds come in the form of a line-of-credit.

Their 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.  That number can include yourself.  Business owners cannot live or operate their business in North Dakota, South Dakota, or Nevada.

SmartBiz

If you want the convenience of online lending but need to look toward products offered by the SBA, then SmartBiz is for you.

With the help of the Small Business Administration, SmartBiz offers loans that are government backed. While SBA loans typically take a lot of time and paperwork, SmartBiz found a way to speed things up.  This makes getting loans through the Small Business Administration easier than ever. The minimum loan amount is $30,000 and the maximum is $5,000,000.

As stated, SBA loans are government-backed business term loans for business owners who’ve had difficulty qualifying for other types of financing.  As such, the requirements are a little stricter. Your credit score has to be 650, and you have to be in business for 2 years or more. In addition, annual revenue has to be $50,000 at least, and there can be no outstanding liens, bankruptcies, or foreclosures in the past 3 years.

Knowing Your Small Business Loan Options Can Help You Make the Best Decisions

Of course, a lot of the choosing will be done for you based on your qualifications.  Your credit score, length of time in business, and annual revenue will make a difference.  Still, knowing where to start based on what you have to work with is a huge first step.

If you are eligible for a loan with a traditional lender, you may find the lowest interest rates there.  They tend to have the most favorable terms and rates.  Their online counterparts typically have higher interest rates, but the loans are easier to qualify for.

However, if you are struggling with credit or just starting out, one of these 5 options for alternative lenders could be great.  In addition, there is the option of traditional loans with the SBA programs, if you fall somewhere in between.  Whatever you do, don’t jump in without doing your research.

Shop around with a variety of lenders to compare what they offer, what their requirements are, and figure out which lenders and loans will work best for your specific business. A little time spent on the front end doing this can save you a lot of time and money after the fact.

 

 

 

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5 Disastrous Blunders to Avoid When Applying for a Small Business Loan

And What to Do Instead When it comes to applying for a small business loan, there is a right way and a wrong way to do things.  The problem is, no one really tells you the wrong ways.  There is not a class that tells you what not to do.  There are directions given, sure.  … Continue reading 5 Disastrous Blunders to Avoid When Applying for a Small Business Loan

5 Disastrous Blunders to Avoid When Applying for a Small Business Loan

And What to Do Instead

When it comes to applying for a small business loan, there is a right way and a wrong way to do things.  The problem is, no one really tells you the wrong ways.  There is not a class that tells you what not to do.  There are directions given, sure.  However, there is much room left for mistakes when someone is only telling you what you should do.

The truth is, it can be just as useful to know what not to do.  Knowing what the common mistakes are and how to avoid them is vital.  Here are 5 common mistakes that can mean disaster for your application approval odds.

1.      Not Having a Complete and Professional Business Plan Before Applying for a Small Business Loan

Any traditional lender is going to need to see a business plan as part of the loan application process.  The problem is, many business owners have no clue what this should look like.  There is so much more to it than just filling out a few lines to answer questions on the application.  It is much more than writing answers in a template.

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A complete business plan is really a combination of a number of reports that need to be researched and written.  It is rare that a business owner has all of the knowledge and skill needed to sufficiently put together an entire business plan on their own.

A complete business plan should include the following:

Introduction

  • An Executive Summary

This is a complete summary of the business idea.

  • Description

The description goes into further detail than the summary, describing the business. What type of business is it? What product or service will it offer? This is where you work to get others excited about your business. Note that this is important even if your business is already operating.  It will just be in the present rather than the future tense.

  • Strategies

Layout your plan for getting started. Do you have a marketing plan, area in mind for location, or idea of how many employees you will start with? What is your ramp up plan? Again, already operating businesses will state the current operating strategy.

Market Research

  • Market Analysis

 This actually includes two parts:

o             Analysis of audience:

What need will your business fill, and for who? Explain the need you see in your market and how your business will fill that need.

o             Competitive Analysis

Is there already a business working to fill this need? Is there room for more? How do you plan to compete with them?

If you are not a new business, this will be a market analysis that supports your need for funding, or that shows your business is strong and growing.

Plan and Financial Information

  • Plan for Design and Development

How is all of this going to play out, from start to finish. What steps are you going to take? This part should be more detailed than your strategies section.

  • Plan for Operation and Management

Who will own or does own the business and who will run or currently runs it from day to day. This could be as simple as stating that you are the sole owner and operator.  It could be as complicated as laying out a complete partnership plan or board or directors’ chart. It just depends on how your business works.

  • Financial Information

This section includes current financials, projections, and a budget plan for the loan funds you are applying for.  Lenders need to see that you know how to handle any funds they may give you, including paying them back.

2.      Trying to Put Together Your Own Financials When Applying for a Small Business loan

While it may be possible for a business owner to handle writing a budget for loan funds, it is unlikely that a business owner can provide sufficient financial statements and tax returns on their own.  It is much better to have an accountant prepare all financial statements to be included with the business plan, and any others that lenders may ask for, to ensure completion and accuracy.

The same is true for tax returns.  A professional tax preparer will be better able to ensure accuracy and answer any questions the lender may have.

3.      Not Being Willing to Pledge Collateral When Applying for a Small Business Loan

While it is often not a requirement, it is always helpful to pledge collateral.  Loan terms will be better, interest will be lower, and you will likely end up being eligible for more money. In addition, not being

Learn business loan secrets with our free, sure-fire guide.

willing or able to pledge collateral sends up a red flag from the beginning.  If you aren’t willing to take a risk for your business, why should a lender be willing?

4.      Not Knowing or Understanding Your Credit Scores Before Applying for a Small Business Loan

Before you begin applying for a small business loan, you need to know your credit scores.  Where do they come from?  What do they mean?  If you do not know what your credit score is telling your lender about you, you are going in blind.

Most understand their personal credit scores and where they come from.  Fewer understand their business credit score, where it comes from, and what it tells lenders.

It is way more involved that personal credit, and much less cut and dry.  There are many more options for reports and scores, and each business credit reporting agency calculates the scores a little differently. Furthermore, some business credit reporting agencies allow the lenders to weight certain information.  This means two lenders could end up with a totally different credit report with a different score on the same borrower based on how they asked for the information to be weighted.  It definitely much harder to get a grip on your business credit score.  Let’s break it down to gain a better understanding.

Business Credit Report from Dun & Bradstreet

Dun & Bradstreet offers a number of business credit report options. In fact, there are 6 various reporting alternatives in all. They all supply various info relating to business credit history and credit worthiness. The result is, it takes all of them for a lender to get the complete picture.

However, some lenders only use Dun & Bradstreet to get the PAYDEX. This is probably because it is the easiest to comprehend.  It is the most like the consumer FICO rating, determining how promptly a consumer makes payments on a scale from 1 to 100. Ratings of 70 or higher are good. For more information on Dun & Bradstreet and their other business credit scores and reporting options go here.

Experian Business Credit Scores

Experian uses what it calls Intelliscore. There are greater than 800 different variables that they make use of to forecast a company’s credit risk. With Intelliscore, a score of 76 or greater indicates a reduced risk of default or late payment. If a score drops between 51 to 75, it indicates a reduced to medium threat. Scores from 26 to 50 are medium threat. Lastly, from 25 down to 1 is average high to high risk.  Find out more about Experian credit scores here.

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Equifax Business Credit Score When Applying for a Small Business Loan

Equifax gets its business credit report information in methods comparable to D&B as well as Experian. Like D&B, they have a sharing contract with the Small Business Finance Exchange.

They combine monetary information with industry  information, and they include utility and telephone payment data as well. Public records are also a source of information. Find out more about Equifax business credit scores here.

How Can You Know Your Score Before Applying for a Business Loan?

Just understanding your business credit score is not enough.  You need to know what you can do about it if it isn’t helping you get funding.  That’s where monitoring comes in.  Unfortunately, you cannot get a free copy of your business credit reports like you can with your personal credit reports.  It costs money to see your business credit score.

For example, the big three charge close to $50 or more for each report:

  • Dun & Bradstreet reports range in price from $61 to $229 per report.
  • Experian reports are $49.95 per report.
  • Equifax is $99.95 per report.

You can monitor your credit with D&B and Experian at a fraction of these costs by going to https://www.creditsuite.com/monitoring/.

Don’t forget personal scores  matter as well, for a couple of reasons.  First, most if not all traditional lenders will check your personal credit score before they even consider business credit.  If your personal credit isn’t the best, then good business credit can help you get the loan anyway.  If your personal credit is okay but not top notch, good business credit can help you when it comes to rates and terms.  However, another reason personal credit  is still important is this.  Some of the business credit reporting agencies use your personal credit score in their business credit score calculation.

5.      Not Considering Other Types of Financing Before Applying for a Small Business Loan

Sometimes, applying for a small business loan isn’t the best option.  There are other options, and in some situations, they may be best. Some other options include:

SBA loans

While these are loans still disbursed by traditional lenders, they are guaranteed by the federal government.  This means two things.  First, some business owners may be eligible for SBA loans even if they are not eligible for other loans from a specific lender.  Next, it means that these loans have a much more involved and lengthy application process.

However, if your credit score is on the cusp of what is needed and you meet the other eligibility requirements, then an SBA loan may very well be what works best for you.  Don’t forget to research this option when applying for a small business loan.

Alternative lenders

These are lenders other than banks and credit unions.  They typically operate online.  Due to this, they usually have a faster application process.  These lenders also tend to have less stringent eligibility requirements.  What’s the catch? They generally have higher interest rates.  However, if you are aware of where your credit scores are, you can know on the front end to just skip applying for a small business loan with a traditional lender and head straight to these types of lenders.  It could save you a lot of time and hassle.

Invoice Factoring

If you need money fast, invoice factoring might be a better option than a traditional loan.  Lenders that factor invoices will pay you a portion of what they are worth immediately.  Then, when the funds come in, they will send you the difference less their factoring fee.  You don’t end up with all the funds from the invoices, but you definitely get fast cash.

Merchant Cash Advance

This is an advance against future credit card sales.  The lender averages your daily credit card sales and lends funds against what is expected in the future, at a premium.  This is another way to get cash fast, and while the premium may be higher than the interest rates on some loans, it is a much more convenient option in some cases.

Learn business loan secrets with our free, sure-fire guide.

How Do You Avoid These Blunders When Applying for a Small Business Loan?

So the best first step is to check your credit.  That can help you avoid a lot of mistakes by simply guiding you toward the right type of lender. Once you decide between a traditional lender, an alternative lender, or some other type of financing, you can determine what the requirements are.  If you need a business plan or financials, you can find a professional to help with these items before you even start the process.

Don’t forget to consider collateral. Take everything into consideration.  Your business is the first and most obvious option.  You could also use any land that you or the business owns.  Even company automobiles can be used as collateral.  Explore all your options. It can make a huge difference in terms of interest rate and the amount of money you are eligible for.

 

 

 

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