Grants for Women Starting a Business and So Much More
Looking for grants for women starting a business? Money is always going to be an issue. What if you could get what is essentially free money? That’s what grants are – for the most part.
Grants for Women Starting a Business
But how do you find the best options for you? How do you know if you need to be looking for grants or business loans for women? We recommend that you explore every option. This is because it will probably take a combination of funding options to fully fund your business.
Plus, there are business loans. But they are often not just for women. But there are other funding choices out there. Loans, crowdfunding, and even angel investors are all viable options. More on those later.
Grants for Women Starting a Business: The Details
The government and private organizations want to GIVE you money! They’re highly competitive and rarely enough to fund a business on their own. Still, grants are a great way to supplement other business funding. And they are still worth the effort to apply. There really isn’t anything to lose except time – it’s free money. Here are a few you can start with.
Amber Grant
The Amber Grant awards one prize of $10,000 per month to a woman-owned business. One of the recipients also gets an additional $25,000 grant at the end of the year. Applicants only need to tell their story and turn it in with a $15 application fee. See ambergrantsforwomen.com/get-an-amber-grant/apply-now.
Cartier Women’s Initiative Award
Cartier has a lot of grants for women starting a business or keeping a company going. The Cartier Women’s Initiative Award has a regional category award and a science and technology award. And the regional award is $100,000 for first place. With $30,000 for second and third place.
The award goes to three women from each of seven international regions. This award is a grant to 21 female business owners from around the world each year. But women business owners who are just getting started may qualify. Look over the complete application for more information. See cartierwomensinitiative.com/about-us.
The Cartier Science and Technology Pioneer award is new as of 2021. Now three more women impact entrepreneurs at the forefront of scientific and technological innovation can get a new thematic award.
Open to women entrepreneurs from any country and sector. This award will highlight disruptive solutions built around unique, protected, or hard-to-reproduce technological or scientific advances. The laureate will get a $100,000 grant. Each of the two remaining finalists will get a $30,000 grant.
Cartier Women’s Fellowship
Cartier also offers a fellowship program. The fellowship is an educational program geared towards the 24 fellows selected each year. This fellowship program aims to equip the fellows with the necessary skills to grow their business.
It isn’t exactly a grant. But while it’s not a monetary award, the mentoring and networking opportunities could be worthwhile to apply for. Hence, see cartierwomensinitiative.com/fellowship-programme.
First Nations Development Institute Grants
The mission of this group is to offer grants that help Alaska Natives, Native Hawaiians, and Native Americans. These are not just grants for women starting a business. They are meant for any gender, so you would be competing against Native Hawaiian, Alaskan, and Native American men. They help in the application process in addition to funds.
First Nations also helps point individuals to appropriate grants offered by other organizations, including the US government. This includes help with writing grant proposals. Therefore, see firstnations.org/grantmaking.
National Black MBA Association Scale-Up Pitch Challenge
Also known as NBMBAA, the Scale-Up Pitch Challenge has cash prizes of $1,000 to $50,000. The association states its purpose is to help newer businesses with an African American ownership. This is a pitch competition for startup businesses. See nbmbaa.org/scale-up-pitch-challenge.
The Native American Business Development Institute (NABDI) Grant
The NABDI Grant is funded by the US Department of the Interior’s Bureau of Indian Affairs. It is not just for women. It provides funding to business owners of Native American or Alaskan Native descent. In 2019, the program provided more than $727,000 to 21 indigenous tribes. It was to support economic feasibility studies for specific economic development projects or business startups.
For 2020, NABDI planned to award 20-25 grants. There is no minimum or maximum amount of funding that can be requested. But most awards run from $25,000 to $75,000. They only fund projects for one year at a time, which is when they expect projects to be completed. To apply for a NABDI grant for your proposed economic development feasibility study, go to bia.gov/service/grants/tedc/apply-nabdi-grant.
There is more available via the Bureau of Indian Affairs. Businesses owned by Native Americans can get financing from the federal government through the Indian Affairs branch. These are not just for women. An individual can fill out an application for up to $500,000. But business entities and tribal enterprises may apply for more.
Potential borrowers can apply with any lending institution, they just have to use the application for Indian Affairs. Additional requirements are in place if the funds are used for construction, renovation, or refinancing. In general, a list of collateral, a credit report, and an analysis of business operations are required. See bia.gov/as-ia/ieed/loan-guaranty-insurance-and-interest-subsidy-program.
The Minority Business Development Agency
The Minority Business Development Agency (MBDA) is operated by the US Department of Commerce. It is dedicated to helping minority-owned businesses access the resources they need to grow and succeed. The MBDA is not just for women. But not: grant competitions are regularly changing.
Visit the MBDA’s website for information on all current opportunities. Currently, the MBDA helps its members apply for grants via Grants.gov. This involves help with how to apply for government grants. See mbda.gov/grants.
The MBDA oversees the Enterprising Women of Color (EWOC) Initiative. The initiative works to focus on the fast-expanding minority women entrepreneur population. This population is often a revenue generator for families, communities, and the nation. Minority women are the fastest growing population of entrepreneurs. While many women are making tremendous strides in the business world, they still face obstacles as entrepreneurs.
MBDA serves as an advocate for women’s economic empowerment. They support efforts to advance women’s equality and promote women economic advancement programming. The vision of EWOC is to ensure women worldwide to reach their economic potential. See mbda.gov.
If your business is in the arts, and you’re of South Asian descent, then check out this fund. The India Center Foundation runs the fund. It works to support US-based South Asian arts workers impacted by the COVID-19 pandemic.
The fund will disburse grants up to $2,000, depending on financial need to US-based arts workers of South Asian descent. This includes those in the performing arts, film, visual arts, and literature. You must have heritage from Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka. Initial funding for the program is $20,000. But the India Center Foundation is soliciting donations to expand the grant program.
To be eligible, applicants must be of South Asian descent. Plus they must work in the arts and demonstrate loss of income due to COVID-19. Additionally, applicants must be at least 21 years old. They cannot be enrolled in a degree program. And they must be able to receive taxable income in the US. Grant funding could be put toward any artistic project. But the project must be developed, created, and presented within four to six weeks of receiving funding. See theindiacenter.us/artsfund.
Grants.gov
The federal government’s Grants.gov is a running list of more than 1,000 available government grants, including minority business grants. The website compiles grants from over two dozen government agencies, like the SBA, the USDA, and the Department of Commerce. To find a grant that’s right for your business, use the Search Grants tool on the website. You can sort through the list of grants by keyword or opportunity number.
Once you find the grant you wish to apply for, click the hyperlinked opportunity number for more detail. There, you will find more info about the specific grant as well as any associated documentation you might need. To apply for a grant through Grants.gov, you must first register. Then, you can download an application package for the grant want to get. But be ready for a lengthy process. See grants.gov.
Crowdfunding
If you would rather not rely on grants so much to start and run your business, try crowdfunding. But not everyone with a campaign on a crowdfunding site is successful. More unique products and services tend to do better. Kickstarter and Indiegogo are two of the most popular crowdfunding platforms to use. Some platforms may have higher success rates for women than others.
Angel Investors
Angel investors are informal investors. Essentially, you are selling a part of your business to them. They tend to not want a huge percentage of your business. Plus they won’t pass by more conventional businesses, like happens with crowdfunding and venture capital. Hence they can be another supplement or replacement for grants.
Business Center for New Americans
If grants aren’t an option, loans might work for you. If you’re an immigrant, try the Business Center for New Americans. They offer a pilot program for microloans up to $75,000. They work with immigrants, refugees, women, and other minority entrepreneurs. The goal is to help minority business owners who have not been able to get traditional financing. Terms are 3% interest, and your loan repayment term goes up to a year. So see accompanycapital.org.
Grants for Women Starting a Business: Takeaways
There are several options for grants for women starting a business. Apply for whichever grants you feel you are most likely to get. Other options for funding include crowdfunding, angel investors, and loans. Credit Suite can help you get the funding you need.
With a number like this, small business owners need a competitive edge. If you are building a business, chances are you’re looking for ways to get your leg up on the competition. To accomplish this, you’ll need a good marketing strategy and access to the best digital marketing tools.
In this post, I’m going to outline 21 digital marketing tools you need when starting a business. You may be familiar with a marketing tool or two in here; others might be new to you.
From simplifying your social media marketing efforts and project management to finding freelancers, each of these tools will help you get the competitive edge you’re after.
Are you ready to grow your business with digital marketing?
This isn’t something you should wait on. Instead, you should implement an email marketing strategy on day one.
With more than 12 million customers, MailChimp has claimed its spot as one of the top email marketing providers and digital marketing tools in the world.
While there are alternatives, this tool remains one of the best, for many reasons:
History dating back to 2001, well before most companies began using email marketing
Self-service support options, ensuring that you can quickly find answers to all of your questions
Free plan for those with less than 2,000 subscribers and those who don’t send more than 12,000 emails per month
When starting a business, it’s not likely that you will have more than 2,000 subscribers. For this reason, you can get started with MailChimp early using the tool for free as you get your feet wet with email marketing and then move to a paid plan as you scale.
There is no stone left unturned, when you rely on HubSpot’s all-in-one marketing software.That’s why it’s a top choice for those who are starting a business.
With everything you need in one place, you don’t have to pull yourself in many different directions. This will help you to find success in the early days and help you as you grow.
Trello is a digital marketing tool that helps you to manage projects and stay on the same page as your team–a sound digital marketing practice if you want to save time and frustration.
For example, you can share blog posts on Trello before you publish them. This gives others on your team the opportunity to review the post, weigh in with their thoughts and make changes that could strengthen the piece before it goes live.
In the past, before the days of Trello and similar programs, email was the best way to collaborate with your team. While this is still helpful, to a certain degree, it can lead to confusion, missed messages, and frustration.
With Trello, everything related to your online marketing strategy can be shared in the same place. It only takes a few minutes to set up a board. Even better, you can quickly invite your entire staff, all of whom can jump in on the action without delay.
Trello isn’t the only digital marketing tool of its kind, but it’s, by far, one of the best. When it comes to collaborating with others regarding marketing tasks, this tool is hard to beat.
Social media plays a big part in the success of any company, regardless of size, age, or industry. In fact, I’d argue that social media marketing is a must to thrive in this digital era.
Digital marketing tools like Hootsuite allow you to schedule social media posts in advance, thus saving you loads of time.
Hootsuite offers tons of features to help you grow your business. For example, you can:
Identify influencers for your marketing team and leads for your sales team
Reply to comments and mentions through the dashboard–there’s no reason to visit each individual platform
Take advantage of pre-written responses
Schedule posts when your audience is most active (even if you’re asleep!)
Social media marketing is not as difficult as it sounds, especially when you rely on tools like Hootsuite. With this particular tool, you can schedule and manage social media profiles for more than 30 platforms.
Imagine doing this by hand, without a central dashboard to guide you. It would be enough to frustrate even the most experienced entrepreneur, let alone a new business owner. Let Hootsuite take over like the social media marketing manager it is.
As one of the top free tools from Google, Analytics should be part of your digital marketing strategy from the very start. In fact, I’d argue it’s one of the most powerful digital marketing tools out there.
It only takes a couple of minutes to add the Analytics code to your website, giving you the ability to track every action by every visitor.
This is considered by many to be nothing more than a traffic tool, but it can actually have a big impact on your marketing strategy, if you know what you’re doing.
Take, for example, the ability to see where your traffic comes from:
Maybe you realize that a particular social media campaign is driving tons of traffic to your website. With this data, you can adjust your future strategy, in an attempt to capture the same results.
Or, maybe you find that a particular set of keywords is doing wonders for your organic traffic. Again, you can turn your attention to these keywords, ensuring that you keep these in mind as you create content down the road.
Google Analytics isn’t one of those digital marketing tools you can ignore. Installing this early on is a key decision, in regards to your digital marketing strategy. The data you can collect is extremely valuable.
The tagline of this digital marketing tool says it all:
Track, analyze and optimize your digital marketing performance. See what’s working and what’s not, across all campaigns, mobile and web.
It’s good that you want to spend so much time on digital marketing in the early days of your business. But, do you really want to make decisions that aren’t having an impact?
You need to track and analyze every move that you make, as this is the only way to focus on the tactics that are providing the best return on investment (ROI).
With KISSmetrics, you can easily see what’s working and what’s not, across all of your campaigns.
Take, for example, its Analytics products. With a funnel report, you can see if there are any “leaks” in your business. Here’s a screenshot of what to expect:
Starting at $120/month, KISSmetrics isn’t the cheapest digital marketing tool on this list. Even so, it’s one that you’ll want to think about, as your business gets up and running.
With a variety of products at your fingertips, the insights you receive will be invaluable to your company’s growth.
While this is a great way to engage your audience and send traffic to your website, it’ll only work in your favor if you have a solid plan in place.
Tools, such as Followerwonk, are designed to help you improve your social media marketing strategy, such as by digging into your Twitter analytics data.
I included this digital marketing tool on the list for two reasons: it’s easy to use and it’s extremely effective.
Followerwonk breaks down its service into three distinct categories:
Find: Use the tool to search Twitter bios and compare accounts.
Analyze: Breakdown your follower list by bio, location, who they follow, and many other criteria.
Optimize: match your strategy to follower gains and losses, to understand what type of content performs best.
The only downside of Followerwonk is that it can’t be used with other social media platforms, such as Facebook, Instagram and LinkedIn. However, if you have big plans for Twitter, this is a digital marketing tool you should use often.
Even though you may not use it on a daily basis, it can come in handy from time to time. After all, it’s imperative that you understand your audience.
If WordPress is your content management system (CMS) of choice, you shouldn’t hesitate to install the All in One SEO Pack plugin.
A big part of your digital marketing strategy should be based around search engine optimization (SEO) and this digital marketing tool will ensure that you always make good decisions regarding your content and its appeal to search engines.
Automatically notifies major search engines, including Google and Bing, of any site changes
Even though all of these features are exciting, it’s something else that has made it one of the most popular WordPress plugins of all time: its ease of use.
Here’s a screenshot, showing a small portion of the tool’s back end:
You don’t have to make many decisions in order to get started. And, if you’re ever confused as to what you should be doing, there is help to be had. All you have to do is click the “?” symbol and you’re provided with more information and advice.
The All in One SEO Pack plugin has more than a million active installs. You won’t have to look far to find competitors, but there’s a reason why so many people use this digital marketing tool.
Not only is it free and simple, but it’s results can’t be denied. It will definitely help your website from an SEO perspective, which is something all new businesses need.
BuzzSumo is a big deal for people who need to learn more about their market.
When you start a business, it’s safe to say you know a thing or two about your industry and primary competitors. But, once you dig around more, you’ll find that there is tons of data you can use to your advantage.
If you want to better understand your competition or if you want to learn what type of content performs best with search engines and your audience, you don’t need any other digital marketing tool by your side.
A BuzzSumo search results page looks something like this:
Additionally, there is high level data associated with each result:
This information can come in handy at many times, such as when you are creating content for your blog.
Why guess as to what is performing best in your niche? You can use BuzzSumo to answer this question with 100 percent accuracy.
With this search, you see that the top result has approximately 20k social shares. You now know what to strive for, if you want to achieve the same level of success.
As a big fan of BuzzSumo, this is a ditial marketing tool that I use on a regular basis. Even if you don’t do much with the data at first, each search will help you to better understand your competition and target audience.
Do you ever find yourself asking this question: what’s working and what’s not about my website?
This is where Crazy Egg can step in and provide assistance.
There are two keys here:
You can use Crazy Egg to make website changes that generate better results.
You don’t need much, if any, IT help to get started.
When you’re new to your business, you don’t want to spend countless hours dealing with IT issues. Unfortunately, this often happens when it comes to split testing. Unless you use Crazy Egg, of course.
The tool is packed with features, such as:
heatmaps and mouse recording
analysis and reporting
platforms and integrations
targeting and personalization
research and user feedback
A tool that helps you understand what your website visitors like and don’t like, so you can maximize your sales and leads, means that you have to give Crazy Egg a try. It’s one of those digital marketing tools that you don’t know you need, until you use it one time.
Not only is keyword research a challenging task, but it can also get expensive with the price of premium keyword research tools. Your typical free software won’t offer you much but UberSuggest isn’t your typical free software.
As a whole, this digital marketing tool is easy for beginners because the dashboard is simple to navigate so you can quickly find the data you want. You’ll start by entering a root keyword or domain that you want to research. You get up to three free searches per day on the free version and you can upgrade to a paid software as well.
UberSuggest provides useful keyword information such as total search volume, difficulty, and paid difficulty if you’re thinking of running an ad campaign around that keyword.
As you work your way down you’ll see historical data that will show you how that keyword has trended over time. This is helpful for determining seasonal keywords or ones that are popular now but may die off over time.
You also get keyword ideas and suggestions that are relevant to the one you’re searching for so you can update older content or develop a content marketing plan.
Overall, UberSuggest is an amazing free keyword research tool that is a great choice for beginners and has enough value as a paid tool for those who are scaling as well.
CoFoundersLab is a great digital marketing tool for small businesses that are growing but need a little help to take things to the next level. It uses AI to help you find a cofounder, additional member, or advisor based on a certain set of criteria.
The best digital marketing tools make life easier. CoFoundersLab intends on helping to create a large ecosystem of business owners, entrepreneurs, consultants, and advisors so it’s that much easier to find whatever you need at the current stage in your business.
For example, you can search for someone with a specific skill and find them instantly without having to post on job boards, conduct interviews, and do onboarding. If you’re looking for an SEO content creator, you’ll simply fill out that set of criteria and be instantly connected to someone who can fill that role.
It’s similar to other freelancing platforms out there, but what separates CoFoundersLab is you can find someone who is on the same level. If you’re looking for someone to financially back your business or simply support you equally in your venture, this might be the place to do it.
When it comes to must-have digital marketing tools, Adobe Sign more than makes the cut. It’s a cloud-based e-signature service that helps you use less paper, save time, and get signatures using an automated signature system. You can send documents, sign, and manage the whole process via desktop or mobile device.
There are also integrations to keep records of all the signatures you’ve received so you can reference back if you lose something important.
This simple but useful tool solves a major problem that a lot of businesses have. More and more people are working remotely and may not have access to printers and scanners. This creates delays in your workflow and can frustrate customers if you’re unable to get them what they want because you’re waiting on signatures and approvals.
Adobe Sign is also usable from anywhere on any device. Someone can be on their way to a meeting in the car and sign on their mobile device using their fingertip. No need to print anything, scan, fax, anything. It’s completely digital, safe, and secure.
DropBox is an essential piece of the modern digital business. It allows all the working pieces of your business to come together in one place to eliminate clutter and save time looking for things.
Organization is the key to a successful business, and downloading and sharing files simply doesn’t cut it anymore. With people working from home, you can’t have everyone downloading personal company files onto their computers, misplacing them, or potentially abusing them.
DropBox prevents this from happening by being a totally cloud-based document sharing platform that allows you to set permission levels so certain people can only see what they need to.
You can also connect other tools like Slack and Zoom to DropBox so you have everything in one place. All company data stays in one place so it’s organized, safe, and accounted for.
If you’re still manually downloading files to your computer, attaching them to emails, and sending them off into space, you’ll find DropBox is a much more efficient and safer way to keep track of documents and document sharing in your business.
I don’t know where I would be without the full line of Gmail products. There used to be a time when we’d create pieces of content in Word platform, download it, and then attach it to an email and send it off.
The next person would mark it up with notes and adjustments, send it back, and the process would start over.
Thankfully, those days are long gone.
With Google Docs and Sheets, you can share documents in real-time and actually mark them up with the writer looking at them so you can see what they’re doing. There’s a chat feature and a suggestion area, too where you can ask questions and provide responses as to why a certain adjustment was made.
There’s a level of security and protection here, as well. Different permission levels ranging from “view” to “edit” give you complete control over your documents. If you’re sending a document off as a reference to something, you might not want that person to make any changes to it without making a copy for themselves, the Gmail Suite of products can do that.
Plus, everything syncs with your Google Calendar. If you’re talking in an email about setting up a call in three days, you can instantly set that appointment on your calendar and you’ll receive reminders across all your devices.
oDeskWork is a freelancer platform that connects you with the right virtual assistant or freelancer to support your business. At some point, every business needs to start hiring. No matter what business you’re in, to grow and scale, you need a support system because you can’t do everything.
This is where digital marketing tools like oDeskWork come into play. You can upload current projects that you need completed, browse profiles, and start communicating with potential candidates.
The platform also offers payment protection, so you ensure you get the services you anticipated. Payments are only released to the freelancer when you’re satisfied with the work they completed.
oDeskWork has experts and freelancers in all different kinds of niches including digital marketing, virtual assisting, transcribing, proofreading, writing, editing, SEO, WordPress, and more.
Upwork is a freelancer platform that connects you with qualified candidates who can help your business grow, making it a must-have digital marketing tool. What I like most about Upwork is the transparency you get and the fact that you can see all types of work that the freelancers have completed.
For example, if you’re browsing for someone to build you a WordPress website, you wouldn’t hire someone without first seeing what type of work they do, right?
The platform will show you examples of their work, their job success rating, a description of their skills, their rate per hour, as well as any badges they’ve earned for continuous performance.
When you’re searching for tools for digital marketing agencies, the last thing you need is to waste time with people who can’t deliver. Upwork ensures that doesn’t happen with their escrow protection as well. None of the money you pay for a job will be released until you are happy with it.
I also find that Upwork is a great place to find long-term working relationships with freelancers that you can use on an ongoing basis versus a one-off job.
I like to think of Fiverr as Upwork’s little brother. When you’re looking to create long-term working relationships and hire someone who can really provide you with a premium service, you should turn to Upwork.
Sometimes though, you’re just looking for a quick job that someone can turn around fast for an affordable price. For example, if you need someone to do up a quick logo for an affiliate site for five dollars, Fiverr is the way to go.
One thing I really like about Fiverr is you can quickly sift through freelancers using the search feature. Type in the service you’re interested in, and you’ll find information such as overall rating and average starting cost.
Fiverr also provides certain freelancers with titles like “top-rated seller” and “level 2 seller.” These will help you determine what level of experience you’re looking for in the job you need to be completed. The best digital marketing tools offer this kind of trust.
This tool is best for one-off jobs that are lower budget and not as difficult, but I wouldn’t recommend hiring off Fiverr for anything too involved such as link building or content creation.
Need to stay on task? This digital marketing tool can help.
OmniFocus is a task management tool that helps you manage all your operations in one place. You can keep track of everything that’s going on all from your browser or mobile device.
You can tag certain projects, assign them to the individual you want to complete them, and set due dates so you can lay out your week in the most productive way possible. As work comes in, you can assign support workers to handle the task and close it out when it’s complete.
One of my favorite things about OmniFocus is the forecast feature where you can get an overall snapshot of what you have coming up in the future including recurring tasks that might only happen once per quarter, bi-annually, or even every few years. This ensures that no one forgets anything.
The main downside is that this tool is only available for Apple users at this point. For all the Windows and Android people out there, you’ll have to go with something else like Trello or ClickUp for now.
We all know Zoom as the video conferencing software used to bring people together no matter where they are on the planet. We’re all facing our own unique remote working situation but we still need to connect sometimes and Zoom allows that to happen. The best digital marketing tools help bring businesses together.
You can share your screen, draw on the screen, record meetings, and invite others to join in as well. Zoom offers free video conferencing for up to 100 participants for up to 40 minutes.
If you’re holding a one-on-one meeting that runs longer than 40 minutes, I’ve found in the past that Zoom will often extend the meeting for free with no time limit.
Toggl helps bring this list of digital marketing tools together. For all the work you’re doing, freelancers you’re managing, and documents you’re sharing; you need to have an idea of how long everything takes.
This tool does that with time tracking, reporting, and project planning. You can use Toggl to get an accurate representation of how long a task or project will take so you can know how many resources you need to allot for next time.
Toggl offers a few different tools for time tracking, project planning, and candidate-screening so it’s an all-inclusive tool for businesses that manage a remote team.
Conclusion
Starting or growing a business isn’t easy, but it doesn’t have to be overwhelming, either.
The first step is to create a strong digital marketing strategy–one that incorporates social media marketing, search engine optimization, email marketing, and consistent, valuable content that truly speaks to your audience.
Ensuring your business succeeds means using the right digital marketing tools at the right time. It’s my hope that this list will help you in your digital marketing efforts and bring you the success you seek.
Would you add any other tools to this list? Did you use any of these as you launched your small business? Share your thoughts in the comment section below.
If you are thinking about starting a business, there is a lot you need to know. Our business experts can walk you through the entire process to ensure you have the fundability you need to succeed. From how to set up your business as a fundable entity to making sure you have what lenders are looking for when it comes to approving start up business loans, here is what you need to know.
How to Get Start Up Business Loans and Other Funding
If your business isn’t fundable, you will not get startup business loans, plain and simple. Of course, if you are a start up you aren’t going to have a ton or revenue or business credit history. So, what can you do to ensure you have a fundable business that can get the money needed to get up and running?
Fundability starts in the very beginning. How you set your business up can make or break your ability to get business start up loans. Here’s why. Lenders want to see that your business is a stand alone entity, fundable on its own apart from you as the owner. It lends credibility to your business as one that is strong and able to survive on its own merits.
To start this process, you need to make sure your business has its own name and contact information. Do not use your own phone number, address, or email address. You also need to apply for an EIN. It’s free on the IRS website. This is an identifying number for your business that’s similar to an SSN for an individual.
After that, it is vital that you incorporate. Choose whichever options works best for your budget and liability needs, S-corp, LLC, or corporation. But, you must do it. It makes all the difference when applying for business start up loans.
Then, you need to have a separate, dedicated business bank account. It further lends credibility to your business as one that is legit, and there are a number of other benefits that will serve your business well in the future. For now, just know it is preferred by lenders.
Business Plan
If your business is properly set up, you will need a business plan. Most business loan applications have a place where you can just fill in the blanks for this part, but that is not what you want to do. You need a professional, well put together business plan that shows you know what you are doing with the money you are asking for.
You can find templates online, including at SBA.gov. However, it’s even better if you can hire a professional business plan writer. You will also likely have to hire other professionals to help you complete each part of the business plan.
For example, you will need a marketing specialist to help you with the market research and an accountant to help with the forecast and other financial sections. The better your business plan presentation is, the better off you will be.
Business Start Up Loans and Other Funding
Ok, so now for the nuts and bolts. You cannot start a business without money. If your business is properly set up and you have a solid, professional business plan, you have given yourself a great start. It’s time to find the money.
There are a few different options when it comes to business start up loans. Traditional loans are the most common and typically the first on the list with new business owners. It’s just what everyone knows. If you want to start a business you go to the bank and get a loan. That works for a lot of people.
Generally these are all secured loans. That means you put up collateral. However, if you have fabulous personal credit, you might be able to get an unsecured business start up loan. The thing is, you may not want to. You are almost always going to get better rates and terms if you use collateral.
SBA Loans
For most, SBA loans are going to be the way to go. These are business loans that have a government guarantee. Because of this, lenders are able to offer them to business owners with lower credit scores than they would otherwise, and the interest rates tend to be better as well.
Credit Line Hybrid
This is a great option for those needing business start up loans for a number of reasons. First, if security is an issue, this is totally unsecured business financing. You do not put up any collateral, and you can get up to $150,000. It is also no-doc financing, meaning you do not have to provide banks statements or financials of any kind.
All you need is to have a personal credit score of at least 680 and meet a few other requirements. However, if you do not meet those requirements, you can take on a credit partner that does. You can use the credit of a friend or family member to apply for the credit line hybrid, and the payments will still report to your business credit report, thus building your business credit score.
Investors and Crowdfunding
Even though business start up loans are where most new business owners head first for funding, they are far from being the only way. Of course corporate investors are an option. Similar to a business plan, you need a pitch. Angel investors are an option as well. While debt free and effective, neither of these are particularly easy to come by.
Another option when it comes to looking for investors is Crowdfunding. It’s not a huge success rate, but there are some businesses that are able to get all they need from this form of funding. You’ll never know if you don’t try.
Help Through the Weeds
The biggest issue when it comes to business start up loans, and really any other part of starting a business, is getting through the weeds. It can be overwhelming to try and figure out what you need to do to qualify for the funding you need, and then figure out what funding will actually work best for you. A business credit expert is vital to this process. While it is possible to do it alone, it is well worth any expense to get things done not only faster, but the right way to ensure nothing is missed.
The truth is, fundability matters regardless of the type of start up funding you use. The reason is, you are likely going to need to access funding of some type throughout the life of your business. If your business is not fundable, you will not be able to get it. So, the best option is to work with a business credit expert now, to get you on the path to fundability while helping you find business start up loans and other types of start up funding to get you up and running. Building fundability and business credit takes knowledge and intentionality. Don’t try to do it alone. You don’t have to.
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Did you know that your business address matters when it comes to starting business credit? Your address matters. And there are other things that can make a difference. Here’s how you can start off on the right foot when it comes to business credit. Your Business Address, and 5 Other Things You Didn’t Know Make … Continue reading Starting Business Credit – Why Your Business Address Matters
Did you know that your business address matters when it comes to starting business credit? Your address matters. And there are other things that can make a difference. Here’s how you can start off on the right foot when it comes to business credit.
Your Business Address, and 5 Other Things You Didn’t Know Make a Difference When Starting Business Credit
When you first start a business, you may not be thinking about anything other than how to pay for it and how to get customers. Many businesses start small from home. They operate in either an extremely intimate area, or they work mostly online. Social media-based businesses have exploded in recent years.
That being the case, new business owners often simply use their home address as their business address. It’s the easiest thing to do, and makes sense after all. I mean, if you are running your business out of your house, why wouldn’t you use your home address?
What frustrates you the most about funding your business? Check out how our free guide can help.
Looking into the future however, you are going to need to build business credit. For that, your business needs its own address, separate from your personal address.
Why Is Starting Business Credit Important?
If you have great personal credit, business credit probably never even crossed your mind. You just figure you can get all the funding you need based on the merits of your personal credit score. If your personal score isn’t the best, you may have explored other options and realize that business credit is a thing.
Here is what you may not know, either way. You cannot just apply for credit in your business name and assume that any credit you get is business credit. Unless you set up your business in a very specific way and follow a very intentional process, those accounts are going to report to your personal credit. This is true even if you apply with your business name.
Why does this matter? There are a few reasons actually. First, personal credit simply cannot handle the spending necessary to run a business. You will either exceed your limits continually or consistently hover near them. Even if you pay off your cards each month, staying near limits can affect your score negatively. It results in a high debt-to-credit ratio, and that will cause your personal score to drop.
Conversely, cards obtained on the merits of your business credit will usually have higher limits. That means more spending power. Not only that, but if there is and issue with your business debt, your personal credit will be protected because those accounts will not be on your personal credit report.
How to Get a Business Address
Now that you know why you need business credit, you need to know how to get it. Like I said, there is more to it than just applying for credit using your business name. Your business has to be set up a certain way. You also have to be intentional about getting accounts that report to business credit rather than personal credit.
For your business to be set up in a way that is conducive to building business credit, it needs to be easily recognizable as a fundable entity separate from the owner. One of the first steps toward accomplishing that is for the business to have an address different than the owner’s personal address.
The question that most business owners ask about this is, how do you get a business address that isn’t your home address if your business is in your house? Well, the obvious first option is to get a P.O. Box. That works for some things, but some lenders want to see a physical address.
Of course, if you are running a business online or from your home, you are wondering how you can do that. The answer is a virtual office.
What frustrates you the most about funding your business? Check out how our free guide can help.
What is a Virtual Office and How Does it Work?
According to Investopedia, “A virtual office gives businesses a physical address and office-related services without the overhead of a long lease and administrative staff. With a virtual office, employees can work from anywhere but still have things like a mailing address, phone answering services, meeting rooms, and videoconferencing.”
Basically, virtual offices operate as a single unit. Sometimes there is a physical location that has meeting rooms and such available as needed. However, more often it is operated solely online with a physical mailing address and other services you can use, as mentioned above. These services are ideal for those that need a physical address but do not need an actual office.
3 Stellar Options for Virtual Offices
If You think a virtual office space is best for your business, here are three top options to help get you started.
Davinci
Davinci offers a prime business address with options to hire a receptionist, book meeting space, and live chat. Prices are variable. Call for a quote or go here to learn more.
Alliance Virtual Offices
Alliance offers a physical address, office space, mail services, and phone answering services starting at $125. Go here to learn more.
Regus
In addition to virtual office services, Regus has options for meeting rooms and more. Find out more here.
What Else Matters: 5 Other Things You Didn’t Know Make a different When Starting Business Credit
Separating your business from yourself for the purpose of starting business credit takes more than having a separate business address. Here are some other steps that you must take to make your business appear fundable on its own to lenders.
You Need a Business Phone Number Before Starting Business Credit
This is for pretty much the same reason that you need a business address that is different from your own. Your address and phone number are both identifying factors that point back to your personal credit report. If you associate them with your business, you run the risk of business accounts reporting on personal credit.
Your business phone number should be toll-free, and it needs to be listed in the business directories. You can handle this at: http://www.listyourself.net/ListYourself/
You Need a Professional Business Website Before Starting Business Credit
Think about it. In today’s world, if you aren’t online do you really even exist? The first place anyone looks for anything is online. Having a business website is a must. You can’t just throw something together though. It is essential that the website be user friendly and well put together. It is almost always worth it to pay a professional to handle this. Oh, and don’t use a free hosting service. That does not look professional. Pay for hosting through a service like GoDaddy.
You Need a Dedicated Business Email Address Before Starting Business Credit
This goes along with the other separate business contact information. Don’t use your personal email address as your business email. Also, make sure your business email has the same URL as your website. A free email service such as Yahoo or Gmail will not serve you as well.
Your Business Needs to Formally Incorporate Before Building Business Credit
If you operate as a sole proprietor or a partnership, there will never be enough separation between you and your business to build separate business credit. You need to formally incorporate as either a corporation, an S-corp, or an LLC. Here is a little more information about each of these options.
Corporation
This is the most expensive option, but it also offers the most protection from liability. There is a double taxation caveat with this option that is a turn off for most. Owners pay tax at both the business level and the shareholder level. In some cases, this is the best option anyway.
S-Corp
S-Corps are very similar to corporations, but double taxation isn’t an issue. There are also limits on the number of shareholders allowed among other restrictions set forth by the IRS.
LLC
An LLC, or a limited liability corporation, is the least expensive option. It still offers some liability protection, and has fewer restrictions than an S-corp.
Each of these options serves the purpose of further separating the business from the owner when you are looking to start a business credit profile. The option you choose should be the one that best suits your needs for tax purposes.
You Need a Business Bank Account to Start Business Credit Building
Another common practice of small business owners is to use their personal bank account for business funds. While in the beginning this seems like the best option simply because it is easy, it further mingles your personal information with your business information. Not only that, but it makes separating business expenses from personal expenses at tax time very hard.
You need a separate business account. When it comes to starting business credit, this helps in two ways. First, it helps to separate the business from the owner. Also, so lenders want to see a certain balance in a business bank account before approving credit.
Other Things You Need to Know Before Starting Business Credit
In addition to the things mentioned above, there are a few other steps you need to take to set up your business for starting business credit.
The EIN Wins in the Battle of EIN vs. SSN When Starting Business Credit
And EIN is the business equivalent of a social security number. If you use your SSN to apply for credit for your business, your personal credit will get involved. By using a unique identification number specifically for the business, you ensure that your business is separate from your SSN. You can get an EIN for free here.
You Have to Have a D-U-N-S Number to Have Business Credit
Here’s why. Dun & Bradstreet is the largest and most commonly used business credit reporting agency. If you do no have a D-U-N-S number, you cannot have a business credit file with them. You definitely need a business credit profile with D & B.
Choose Creditors that Work with the SBFE
The SBFE is a not-for-profit entity that gathers data on small businesses from its members. The data is then used to compile comprehensive credit information. Lenders that are SBFE members have access to this information. They use this information to make credit decisions.
The Small Business Finance Exchange does not lend money. It also does not create or distribute credit reports. What is does do is collect information from lender members on their borrowers. That information is then passed to D&B and Equifax. This means if you are doing business with SBFE members, you know your credit information is being reported, at least to those lenders that are members of the SBFE. Find out more about the SBFE here.
What frustrates you the most about funding your business? Check out how our free guide can help.
Other Ways to Get Accounts Reporting To Your Business Credit Report
Once you have your business set up properly, you can start to build business credit. If you do not already have strong business credit, you will have to start at the bottom credit tier, known as the vendor credit tier. These are starter vendors that will offer net terms on invoices without checking your credit. Then they will report your payments to the credit reporting agencies. However, they will often want to see an EIN, business bank account, or a listing in the business directories along with a certain amount of time in business or annual revenue. This is just one reason why setting up your business properly is so important.
After you get a few of these accounts reporting, you can apply for credit in the next tier, which is the retail credit tier. These are cards that you can only use in the stores that issue them, like a Best Buy card or an Office Depot card.
Once you have several of these accounts reporting positive payment history, you can apply for cards in the fleet credit tier. Those are cards from companies like Shell or Fuelman that can only be used for fuel and auto repair and maintenance.
Get enough cards from the fleet credit tier, and you can move on up to the cash credit tier. These are the cards that do not have limits on where you can use them or what types of expenses you can use them to pay. This is the top tier, and once you hit it you will see your business credit score start to grow like a snowball rolling downhill. That is, of course, if you handle your credit responsibly.
Not Having a Business Address can Kill Your Chances of Starting Business Credit
There is so much more to getting business credit than having a separate business address. However, if you have everything you need and you do not have a business address, that lack could definitely throw a kink in the process. Remember, you don’t have to have a separate location, just a separate address. Then make sure everything else is set up to separate your business from yourself. After that, you can start building strong business credit. The funding you need to run and grow your business will be right there when you need it.
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