Are you on the brink of taking your business to the next level but need an injection of cash? A business line of credit may be the right solution. Once approved, you’ll have access to funds that you can withdraw on an as-needed basis (up to your credit limit). Of course, you’ll eventually have to pay back everything you borrowed plus fees and interest. So how can you best use a business credit line and avoid getting in over your head? Sometimes it helps to know what NOT to do. Here are five unwise ways to use a business lines of credit that you should definitely avoid.
#1 Cover personal expenses
This is a big one, hence, the number one ranking. If you take out a business line of credit, you may be tempted to use some of the proceeds for personal reasons. Maybe you need a little bit to make ends meet or have been waiting for an opportunity to book a getaway? That’s usually not a good idea.
Most lenders of business credit lines prohibit borrowers from using the money for personal expenses. If your lender finds out that you broke the terms and conditions agreement and used the money for personal reasons, you could face undesirable consequences — such as the entire balance becoming due early.
Further, the purpose of the business credit line is to enable you to invest in your business so it grows, is more profitable, and is able to pay back the money you borrow. When you use the money for personal reasons, it’s not helping those causes. So when it comes to a business line of credit, be sure to keep it strictly business.
The best use of a business line of credit is to invest it into your business so it can grow. How? Buying inventory, launching a marketing campaign, and buying equipment are all great examples.
In all of these scenarios, the money you spend should have a good chance of increasing the amount of revenue you earn. In theory, this approach can help you get off the hamster wheel of not having surplus money which causes you to need loans in the first place.
On the other hand, if you are spending borrowed money (which comes with interest charges and fees) to pay routine expenses like rent or utility bills, they are costing you more without offering returns. This can be a slippery slope you want to avoid.
#3 Borrow more than you can repay
When taking out a business credit line, it’s important to consider how much you can reasonably afford to repay. It can be tempting to take as much as you can get and hope for the best. However, a better route is to look at your historical income alongside your projections to figure out what repayment amount you can comfortably afford. If you are expecting a revenue increase, it’s often best to base the amount you can repay on conservative ROI estimations to be sure you can afford the payments.
#4 Withdraw the funds before you need them
One of the biggest benefits of a business credit line over a loan is that you only pay interest once you withdraw money from the credit line. When you don’t need a lump sum all at once, you can save by withdrawing the funds as you need them.
For example, say that you need $10,000 to buy inventory but want to buy it in four stages that cost $2,500 each. You could potentially save by getting a credit line and withdrawing the funds as you need them versus getting the whole $10,000 upfront and paying interest from day one. However, you will have to compare the overall cost of the credit offerings available to you to see which is a better deal.
The bottom line? If you don’t need all the money upfront, don’t withdraw it until you need it!
When money becomes available to you, it can get the wheels of your imagination turning. You may start thinking about office upgrades, fancy dinners out with the team, or a new tailored suit. While all of these expenses are for the business, they are not necessary to grow and don’t provide a meaningful ROI. When the line of credit is fully withdrawn, you don’t want to be left regretful, wondering where it all went. Be sure to create a plan for how you will spend the money for strategic purposes that tie directly to growth.
Frequently asked questions about business lines of credit
Now, here are answers to frequently asked questions about business lines of credit.
What is the difference between a secured and an unsecured business line of credit?
Business lines of credit can be secured or unsecured. When secured, it means that you have to offer up some collateral in exchange for the loan. For example, you could provide assets such as inventory, equipment, or buildings. If you default when making repayments on the credit line, your lender can then seize your assets and sell them to pay off the loan.
With an unsecured business credit line, you are approved based on your credit and financial profiles. They trust that you will repay the loan. If you don’t, they can’t directly seize any of your property. However, defaulting on a loan will hurt your credit and can result in a lawsuit where they sue you to recover their losses.
Should I get a revolving line of credit?
A revolving line of credit enables you to borrow money from your credit line, pay it back, and then borrow it again (similar to a credit card). However, credit lines often have higher credit limits and lower interest rates than credit cards. If you need a larger amount of working capital on an ongoing basis, a revolving business line of credit can be a helpful solution.
If a business credit line sounds like the right move for your business, the next step is to get approved. What are the common business line of credit requirements? In most cases, you will need at least six months to a year in business and $25,000 in annual revenue. Additionally, you’ll likely need to have a “fair” personal credit score of 580 or higher. Some lenders will want to check your business credit, and if you don’t have any history, will require a higher personal credit score. Keep in mind that requirements and terms can vary from one lender to the next so it’s smart to shop around and compare offers!
Author bio: Jessica Walrack is a professional writer who specializes in business and personal finance. You can find her work featured on MSN Money, The Simple Dollar, Bankrate, and more.
Those who died in military service did so for our freedom. Part of that freedom is the ability to open a business. In fact, you can even get a government business loan to do so. However, that option will not work for everyone. How can you fund a startup when you can’t get a government business loan?
Discover Other Ways to Fund a Business When a Government Business Loan Isn’t An Option
First, you may not qualify. They typically require good credit and some sort of collateral. Likewise, even if you do qualify, a government business loan may not be enough. What are the other options?
1.The Credit Line Hybrid
The Credit Line Hybrid is a funding option that may offer an even better interest rate than a government business loan. Yet, you get the money faster and easier also. Furthermore, you don’t have to supply any bank statements or check stubs. You can get funding in a few days rather than weeks, without supplying any collateral or documents.
It is revolving, unsecured financing that allows you to fund your business without putting up collateral, and you only pay back what you use.
How to Qualify for the Credit Line Hybrid
Your personal credit score should be at least 680. In addition, you can’t have any liens, judgments, bankruptcies or late payments. Furthermore, in the past 6 months, you should have less than 6 credit inquiries. Also, you should have less than a 45% balance on all business and personal credit cards. You need to have at least two credit cards with limits of $2,000 or more and at least a year and a half of good payment history as well.
Yet, if you do not meet all of the requirements, you can still get this funding. You can take on a credit partner that meets each of these requirements. Many business owners work with a friend or relative to fund their business. If a relative or a friend meets all of these requirements, they can pair with you to allow you to tap into their credit to access funding.
Generally, approval is up to 5x that of the highest credit limit on your personal credit report. Sometimes, you can get interest rates as low as 0% for the first few months, allowing you to put that savings back into your business.
The process is pretty fast, especially with a qualified expert to walk you through it. Another benefit is, with the approval for multiple credit cards, there is competition. This makes it easier, and even likely if you handle the credit responsibly, that you can get interest rates lowered and limits raised every few months.
2. Retirement Account Financing
This Credit Suite program offers a flexible and powerful way for a startup to leverage assets that are in a 401(k) plan or IRA. It even has the blessing of the IRS. In fact, they have their own name for it. It’s called a Rollover for Business Startups (ROBS).
How to Qualify for Retirement Account Financing?
No financials have to be submitted, and you do not need good credit. In fact, all the lender will ask for is a copy of your two most recent 401(k) statements.
If the plan has a value of more than $35,000, you can get approval. This is true even if you have really bad personal credit. You can get however much of your 401(k) is “rollable.” Sometimes, you can secure a low-interest credit line or loan for 100% of your current 401(k) value.
The plan you use cannot be from a business where you currently work. It will have to be from previous employment. Also, you can’t still be contributing to it.
The cost is 5.25% (prime +2) and the term is 5 years. There is a $1,995 lender fee rolled in as well, which includes 5 years of management and consulting.
3. Line of Credit
The difference between a traditional loan and a traditional business line of credit is that the line of credit is revolving credit rather than a term loan. Like a credit card, you only pay back what you use. Also, lines of credit typically have lower interest rates than business credit cards. The trade off is, there are no rewards like cash back or air miles.
At Credit Suite, our funding partners offer an unsecured line of credit that has a minimum FICO score requirement of 600. You also must show business tax returns with net profits over $20,000 if you have been in business between 6 months and a year. If you have been in business for over a year, you need to show $10,000 in monthly revenue. These requirements are much easier to meet than those typically set forth by lenders.
Terms are 6 to 18 months and interest rates range from 12% to 25%. You can get up to $250,000.
4. Alternative Lenders
There are a number of non-bank lenders that will lend to startups. You do have to be careful, as there are a lot of predatory lenders out there. They also tend to have higher interest rates. However, they aren’t all bad. Here are a few decent options for startup loans if a government business loan isn’t available.
BlueVine
BlueVine requires that you be in business for at least 6 months. If you have at least $120,000 in annual revenue, you may qualify for a loan from them. The minimum credit score for a line of credit from BlueVine is 600. Furthermore, if you want invoice factoring, you can get approval with a score as low as 530, 3 months in business, and $10,000 in monthly revenue.
Kiva
Kiva is different. First, the interest rate is 0%. As a result, even though you have to pay it back, a loan from them is free money. There is no credit check at all. However, you have to get at least 5 family members or friends to donate to help fund your business as well. In addition, you have to pitch in a $25 loan to another business on the platform yourself.
Accion
Accion also may also be a good fit if a government business loan isn’t happening. It’s a nonprofit that offers microloans. The minimum credit score is 575. You don’t have to already be in business, but if you are not, you must have less than $500 in past due debt. In addition, your business needs to be home or incubator based.
Remember, details such as interest rates and loan requirements can change, so be sure to check lenders directly for the most up to date information.
5.Crowdfunding
This option for startup funding is growing in popularity. With crowdfunding, you get a lot of smaller investments from a lot of people, or a crowd if you will. It is different from getting the bulk of your small business funding from one or two larger investors.
First, you have to figure out which crowdfunding platform is best for your situation. Kickstarter and Indiegogo are two of the most popular. Be sure to take note of the rules each platform has for when you gain access to funds. They can vary greatly.
These are investors that are typically less formal than regular investors. An angel investor can be anyone. For example, it could be a family member or someone you met through networking.
The best way to find an angel investor is to ask people you know. Another option is an angel investors website or network. For example, Gust keeps a database of investors, companies, and programs.
Wait! Don’t Apply for Any Funding Before Your Read This
As you work on starting your business, you need to think about building business credit so that you can get the funding you need as your business grows. Unlike your personal credit score, you have to initially work to establish your business credit score. The best way to do this is to work with a business credit expert from the beginning. The process is not hard, but if you don’t know what you are doing, it can be difficult to navigate. A business credit expert can help you start off on the right food, and guide you through the process in the right order. This will save time and money, ensuring you build a strong business credit profile from the start. See for yourself with a free consultation.
Warriors forward Draymond Green said the team is “a ways away” from title contention after Friday’s play-in loss, but coach Steve Kerr said the season was “something to build on.”
When it comes to borrowing money for business growth and expansion, or even to start a business from the beginning, there are many options. So many in fact, that it can become overwhelming. All the ways to borrow money to start business growth, expansion, or from scratch vary. Factors like terms, rates, and amount available all make a difference. What’s the best option for your business?
Which Way to Borrow Money to Start a Business is Best for You
If you are considering borrowing money for business expansion, you need to to think about the following:
Where to apply for a small business loan
Terms of business loans
Business loan rates
What type of business loan is best for you? It depends on a number of factors. First, you have to know what’s available.
Borrow Money to Start Business Growth: SBA Loans
SBA loans are loans with a government guarantee through the Small Business Administration. Participating lenders handle the application process and distribution of the funds. They guarantee up to 85% of loans of $150,000 or less. Loans that are more than $150,000 they will guarantee up to 75%. The maximum loan amount they offer is $5 million.
Due to the government guarantee, financial institutions are able to offer them at lower interest rates.
Find out why so many companies use our proven methods to get business loans.
SBA 504 Loan Program
These loans are also available up to $5 million. You can buy machinery, facilities, or land, making them perfect for borrowing money to start business expansion. They work especially well for commercial real estate purchases .
Terms for 504 Loans range from 10 to 20 years. Funding can take from 30 to 90 days. You need a minimum credit score of 680. Also, collateral is the asset it is financing. There is also a down payment requirement of 10%, which can increase to 15% for a new business.
There is also a requirement you be in business at least 2 years, or that management has equivalent experience if the business is a startup.
7a SBA loan
This program also offers federally funded term loans up to $5 million. You can use the funds for expansion, purchasing equipment, working capital and more.
The minimum credit score to qualify is 620. There is also a downpayment requirement of at least 10% for the purchase of a business, commercial real estate, or equipment. The minimum time in business is 2 years. In the case of startups, business experience equivalent to two years will suffice.
This option is also great for borrowing money to start a business from scratch.
Borrow Money to Start Business Growth: AR Financing
Borrowing against receivables is a way to borrow money to start business growth or expansion as well. Many businesses wait weeks, or even months, to get paid on outstanding invoices. These open invoices are accounts receivable.
It can create major cash flow issues, because they provide their goods and services and absorb those costs until they eventually get paid. Sometimes it can take 90 days or longer to collect.
Of course, there is something to be said for offering better terms to your clients. Allowing them to pay invoices later helps establish with clients. It’s an incentive for them to choose one business over the other.
If you have a lot of these open account receivable, AR financing can be a way to borrow money to start business expansion! You can get the funds in as little as 24 hours.
Monthly rates are between 8% and 12%, and you can get financing as high as $10,000,000. All of this is possible, even with severely challenged personal credit.
Find out why so many companies use our proven methods to get business loans.
Borrow Money to Start Business Growth: SME Loan
An SME loan (Small and Medium Enterprise Loan) is a good option as well. They are generally designed to help those small and medium businesses in underserved areas or with owners from underserved populations.
While interest rates and business loan terms vary, many business owners find luck in obtaining an SME loan to fund expansion or growth.
Borrow Money to Start Business Growth: Credit Line Hybrid
The Credit Line Hybrid allows you to fund your business without putting up collateral. It’s revolving credit, like a credit card or line of credit, so you only pay back what you use.
To qualify, your personal credit score has to be at least 680. In addition, you can’t have any liens, judgments, bankruptcies or late payments. Furthermore, in the past 6 months you should have 4 or less credit inquiries, and you should have less than a 45% balance on all business and personal credit cards. It’s also preferred that you have established business credit as well as personal credit.
If you don’t qualify on your own, you can take on a credit partner that meets each of these requirements. Many business owners work with a friend or relative to fund their business. If a relative or a friend meets all of these requirements, they can partner with you to allow you to tap into their credit to access funding.
What are the Benefits of a Credit Line Hybrid?
Not only is this unsecured business funding, meaning you do not have to have any collateral, but it is also no-doc. That means you do not have to provide any bank statements or financials.
Also, typical approval is up to 5x that of the highest credit limit on the personal credit report. Furthermore, often you can get interest rates as low as 0% for the first few months, allowing you to put that savings back into your business.
Find out why so many companies use our proven methods to get business loans.
The approval for multiple credit cards creates competition. This makes it easier, and likely even if you handle the credit responsibly, that you can get interest rates lowered and limits raised every few months.
The icing on the proverbial cake is, the Credit Line Hybrid reports to the business credit reporting agencies. That means it can boost your business credit score. The process is pretty fast, especially with a qualified expert to walk you through it.
Use a Business Credit Expert to Help You Borrow Money for Your Business
Did you even know there was such a thing as a business credit expert? There is, and the Credit Suite business credit experts are the best. A business credit expert can help you:
Find the best loans for your business
Analyze your overall business fundability
Walk you through the process of improving findability if needed
Help you find funding you qualify for now!
Help you build your business credit profile
Business credit experts are versed in who to call and who to talk to with lenders to find out what they are looking for. They can guide you through the tangled web that is fundability, make sure your business is set up in a way to make you as fundable as possible, and ensure you have every opportunity to get the business funding you need now and in the future.
Business credit is credit you get in the name of a business. It does not attach to the business owner’s SSN. It is not dependent on the entrepreneur’s ability to pay debts. But it does depend on whether the business can pay its bills. Better business credit means your business can get more funding when it needs it, at better rates and terms than if you don’t work to build your business credit. Here are 3 ways to build business credit.
Business Credit is Not Automatic
You have to actively work to build it. Did you know over 9 out of every 10 vendors do not report to the business credit reporting agencies, Dun & Bradstreet, Experian, and Equifax? Therefore, except for requesting a trade reference, those nonreporting vendors don’t help you build business credit. So, what do you do? The following actions will help you no matter which method you use to build your company’s business credit.
Check Out Ways to Build Business Credit
Improving business credit scores means paying your bills on time. It also means paying with credit rather than cash when you can. This increases the number of accounts and purchases on your reports. And use the credit you already have regularly, so those accounts are not eventually closed due to inactivity.
A business starts building a brand-new credit profile much the same as a consumer does. Both start with no credit profile. The business gets approval for new credit reporting to the business credit reporting agencies. The business uses the credit and pays the bill timely. This establishes a positive business credit profile. As the business continues using credit and pays bills timely it will qualify for more credit.
Check out our best webinar with its trustworthy list of seven vendors to help you build business credit.
The First of 3 Ways to Build Business Credit: Vendor Accounts
One of the three ways to build business credit is with starter vendor accounts. These are companies which will approve your business with little fuss. A vendor line of credit is when a company (vendor) extends a line of credit to your business on Net 15, 30, 60 or 90 day terms. Hence you can buy their products or services up to a maximum dollar amount. And you have 15, 30, 60 or 90 days to pay the bill in full.
Since vendor accounts generally don’t ultimately come from a bank, like major credit cards (Visa, etc.) do, you can try to apply without using your Social Security number. Always apply first without using your SSN. Some vendors will request it and some will even tell you on the phone they must have it. But try to submit first without it.
Starter Vendors and D&B
When your first Net 30 account reports your tradeline to Dun & Bradstreet, the D-U-N-S system will automatically activate your file if it isn’t active already. This is also true for Experian and Equifax. Applying without your SSN means the vendor won’t pull your personal credit. As a result, you will be building business credit and not personal credit!
You need at least 3 vendor accounts reporting to move on. It can take a billing cycle to get your payment to show up in D&B’s system. Some vendors may want you to prepay or may have a minimal order requirement before they reporting to a business CRA. They may have minimal FICO score requirements as well. But you can often get around a minimum FICO requirement by working with a guarantor with good personal credit.
One of the Ways to Build Business Credit is to Go Beyond Starter Vendor Accounts
As you continue to prove yourself and your business, it becomes possible to qualify for revolving store credit. You can also qualify for fleet credit to buy fuel or repair and maintain vehicles. And you can even qualify for more universal cash credit from Visa and MasterCard and the like. So don’t stop with starter vendor accounts!
Check out our best webinar with its trustworthy list of seven vendors to help you build business credit.
The Second of 3 Ways to Build Business Credit: Our Credit Line Hybrid
You can get a line of credit for up to $150,000. This is no doc financing. Pay 0% for up to 18 months. It helps build business credit because your payments are reported. You must have a 680 or better FICO score. For more information, surf on over to my.creditsuite.com/qualifier-form.
This program works to help clients get funding based strictly on personal credit quality. Our lenders will not ask for financials, bank statements, business plans, resumes, or any of the other burdensome document requests which most conventional lenders demand.
Our lenders will review your credit report to ensure there are no derogatory items on it. To get approval, you shouldn’t have any open collections, late payments, tax liens, judgments, or the like on your report.
To qualify you should also have fewer than 5 inquiries on your credit report, within the last 6 months. You should have established credit. This includes open revolving accounts now reported on your credit report, with balances below 40% of your limits.
The Third of 3 Ways to Build Business Credit: Using the D&BCreditBuilder
Dun & Bradstreet has their own credit builder. It can help you get better business credit, but only with D&B. Dun & Bradstreet is huge, so concentrating just on them could be an effective strategy.
D&B offers advice for building business credit. A lot of it should be familiar. Their seven steps are to establish your business as a separate entity, register for a D-U-N-S number, get an EIN from the IRS, open a bank account for your business, make on-time payments, ask vendors to supply trade references to Dun & Bradstreet, and monitor your business credit scores and ratings.
Check out our best webinar with its trustworthy list of seven vendors to help you build business credit.
D&B’s CreditBuilder Plus
CreditBuilder Plus is essentially a monitoring service exclusive to Dun & Bradstreet. One major advantage is getting a D-U-N-S number faster than most businesses do. You can use it to get alerts when others request your business credit report. And you can get a D-U-N-S Number and business credit file in 5 business days or less.
Plus you can get unlimited access to your D&B scores and ratings. And you can add 12 positive payment experiences to your business credit file and monitor your CreditBuilder account email address to know if it may have been compromised online.
3 Ways to Build Your Business Credit: Takeaways
Getting starter business credit means your business has more chances to get funding, and at the best terms and rates. Building business credit in any manner starts with fundability. Set up your business credibly to satisfy lender requirements. Working with starter vendors is a great way to get going. Starter vendors will approve you for lines of credit with little fuss.
Our credit line hybrid is the most excellent of these three ways to build business credit. Your payments are reported, and you won’t have to provide extensive documentation. Using the D&B CreditBuilder is another fine way to build your first business credit. One massive advantage to CreditBuilder is getting a D-U-N-S faster than other businesses.
But no matter which method(s) you choose, let’s take the next step together.
Whether you’re just starting out or are an old pro, who doesn’t want to be a more successful entrepreneur?
Owning a business gives you a sense of freedom and empowerment. You can build things and watch them grow.
Entrepreneurs make decisions for themselves, realize their creative visions, and develop lasting relationships with other entrepreneurs, customers, and vendors.
It’s a great way to live. That’s why I’ve founded so many companies — I can’t get enough.
I’ve put together these tips to help you to become more successful, too.
1. Get Gritty
Grit is perseverance. Grit is the go-get-’em attitude that we expect of entrepreneurs. Grit is the ability to keep working when everyone tells you that you should give up.
If you want to be a successful entrepreneur, you have to be gritty.
2. To Become a Successful Entrepreneur, You Must Challenge Yourself
If you want to be a successful entrepreneur, you have to challenge yourself. No one else is going to push you, so it’s up to you to do it.
Challenges keep entrepreneurs nimble and on their toes. If you’re constantly looking for the next challenge, you’ll always be prepared for what comes your way.
Consider this example:
You’re going to the gym to build your upper body strength. You start doing bicep curls with a 10-pound weight. It feels pretty heavy at first. As you build up your strength, it gets easier.
Would you stop there? No!
Then it’s time to do bicep curls with a 20-pound weight. Once you’ve done bicep curls with a 20-pound weight, going back to a 10-pound weight will feel easy.
Challenging yourself with new and difficult tasks will make your other tasks seem even simpler. As an entrepreneur, you always have to be looking for the next big challenge.
3. Successful Entrepreneurs Are Passionate about Their Work
If you don’t love what you do, don’t do it. I truly believe it’s as simple as that.
As an entrepreneur, you’re going to have to put in long hours and make sacrifices for your business.
If you’re not passionate about what you do, you’re not going to have the motivation to keep going when you’re stressed and tired.
Have you ever noticed those entrepreneurs who never seem to get tired? Those entrepreneurs who get that gleam in their eye when they talk about what they do? That’s passion.
If you’re passionate about what you do, being an entrepreneur gets just a little bit easier.
4. To Become a Successful Entrepreneur, You Must Take Risks
Humans are generally risk-averse, but part of being an entrepreneur is recognizing the risks that you should take.
Successful entrepreneurs also know which risks to take and which they shouldn’t. Learn to recognize the risks that will benefit your business and take them.
Taking risks has a dangerous side, but the opportunities they present often far outweigh the potential dangers.
Learn how to identify which risks are worth taking and you’ll likely become a more successful entrepreneur.
5. Trust Yourself
If you don’t believe in yourself, who will?
Being a successful entrepreneur means that you’ve learned to listen to your intuition and rely on your wisdom when making decisions.
Your ability to trust and believe in yourself will show your confidence. People are more likely to follow and trust confident leaders.
Trusting in your own skills will also take some of the pain of uncertainty out of being an entrepreneur.
When you feel uncertain, remember how much experience and knowledge you have. Most entrepreneurs start their business after years of experience working for someone else.
There’s nothing wrong with asking for help when you need it or turning to a mentor for advice, but you also have to learn to trust yourself and your own judgment without input from others.
Learn to trust yourself and you’re already starting down the path of entrepreneurial success.
6. Reduce Fear
Fear stops action. Entrepreneurs have to be able to pivot and quickly take action when they see an opportunity or recognize a mistake.
With fear riding on your shoulder, you won’t be a successful entrepreneur.
As an entrepreneur, if you let fear be your guide, you won’t be able to listen to your intuition, you’ll be afraid to take the necessary risks, and your judgment will be clouded by emotion.
If you can find ways to reduce and manage your fear and you’ll be a much more successful entrepreneur.
Keep in mind that fear has to do with your perspective. For example, studies have shown that the more true crime you consume, the more scared you are of crime.
My favorite tip for managing fear as an entrepreneur is to do confidence-building exercises.
For me, I like to take a few moments at night to think of the decisions I made that day that had a successful outcome.
Thinking each day about the decisions that you made that benefited you, others, or your business will help you to quickly build your confidence and reduce fear.
7. Successful Entrepreneurs Visualize their Goals
This tip is less abstract than you might think, so bear with me.
When I recommend that entrepreneurs visualize their goals, I don’t intend for them to close their eyes and see the goal in front of them.
What I want you to do to visualize your goal is to define it so clearly that it’s real and tangible.
For example, which of these is a more accomplishable:
I want to become a successful entrepreneur.
I will become a successful entrepreneur by starting a business that solves a problem for this specific niche of my audience.
The second one, right?
When you can clearly articulate and visualize your goal, it becomes more achievable.
You can tell someone, such as a friend or business partner, or take photographs that represent your goal. Go with your strengths.
When you ask a successful entrepreneur what their goal is, they can tell you in great detail what it is that they’re working to achieve.
8. Hire Great Partners to Help You Become a Successful Entrepreneur
I’ll admit that this one might be a little bit obvious.
Successful entrepreneurs aren’t successful within a vacuum. We all have a great team and support network behind us.
When I recommend hiring great partners, I don’t just mean someone who can do the job you’re hiring them for. You should seek partners who have great character and whom you like and respect.
You and your partners will be working long hours together and making stressful decisions. If you don’t respect your partner(s), your team won’t last long.
Fill your team with people who have great character and you’re well on your way to success.
When choosing your partners and team members, always remember that you can teach skills, but you can’t teach character.
9. To Become a Successful Entrepreneur, You Must ActFast
Talk only delays action.
Successful entrepreneurs act.
It’s easy to get wrapped up in planning, considering potential failures, discussing funding, and talking in meetings with board members. If all you do is talk, you’ll get nothing done.
At some point, you have to halt the talking and make something happen.
10. Successful Entrepreneurs Spend Time on Important Tasks and Are Patient to See Results
Do you think that there’s such a thing as an overnight success? I recommend that you take a closer look.
Upon examination, the people and businesses that became “overnight sensations and successes” actually worked really hard and long for their achievements.
When you think you’ve found an overnight success, check again and examine closely the hours, days, and years that went into their success.
Take a look at their life, the things they learned, and how many times they failed.
Successful entrepreneurs take the time that’s required to reach success. And many of them have failures along the way.
If you think it’s taking too long to find success, give yourself a break.
Keep plugging along, putting in the hours, and before long, you’ll be a successful entrepreneur.
Just imagine looking back at all the hard work and knowing it paid off. Keep that image in your head to motivate you forward through the long, slogging hours.
11. Plan Your Finances
Startups and entrepreneurial businesses need money. It’s just a part of the lifestyle.
Many entrepreneurs spend too much time looking for money and not enough acting, but that doesn’t mean that you can leap into the abyss without a plan.
Decide which is best for you, and plan out your finances in the beginning. Try to stick to your budget, but know that the plan will have to be adapted along the way.
12. Who’s Your Customer? Successful Entrepreneurs Know the Answer
One of the most common reasons that entrepreneurial businesses fail is that there isn’t a customer.
If you start a business or make a product but don’t know who will buy it, that person might not actually exist.
Before you make a financial plan, raise capital, or even choose a name, make sure that there’s a customer who would buy your product or use your services.
Without a customer, you don’t have a business.
Successful entrepreneurs know who their customers and target market are.
13. Successful Entrepreneurs Listen to Complaints
This is one of the tips that I think is the most important for entrepreneurs to learn.
Your customer’s complaints are how you identify your business’s weaknesses.
Similarly to the last tip, without customers, you can’t have a successful business. There’s another possible scenario, though.
You might have customers who are interested in your product or service, but if you don’t listen to their complaints, you soon will have no customers.
Take your customers seriously, treat their complaints with respect, and listen.
As an entrepreneur, you’ll be inundated with your business, needing to take care of it all the time. When you get home and have some leisure time, you might be tempted to read fiction or books for entertainment.
There’s always something to learn from those who have already done it.
I especially think it’s important to learn from the mistakes of others. If you learn from their mistakes, you won’t have to make those mistakes yourself.
The more you learn from their mistakes and successes, the faster you can grow your business and become a successful entrepreneur.
17. Successful Entrepreneurs Self-Promote
Many people don’t want to self-promote or talk about their business too much for fear of sounding like an egomaniac; but if you don’t promote your business, who will?
Egotistical self-promotion and self-promotion can be differentiated.
Know your business, know some key stats, and have your 15-second elevator pitch polished and ready to go. Then, when someone asks you about your business, you can promote it factually and quickly.
Another way to self-promote without sounding cocky is to know what your customers say about your business. When someone asks how your business is going, you can tell them your customer feedback.
Don’t forget to provide some of the bad as well as the good.
18. Successful Entrepreneurs Set and Oversee a Positive Company Culture
There may have been a time when company culture wasn’t important, but with social media and the 24-hour news cycle, your company and employees are always under scrutiny.
Set a positive company culture from day one and you’ll be more likely to work with people you enjoy and who inspire you as well as attract great customers.
Many entrepreneurs are working with family, from home, and even across borders. It’s important to set and know what you want your company culture to look like.
19. Network, Network, Network
There is no such thing as too much networking (well unless it’s getting in the way of building your business, of course).
What I mean to say is that you shouldn’t ever stop networking because you never know where your next lead will come from.
Chances are, if you network with enough people, you’ll bump into another entrepreneur who might have the ideas and connections you need.
You might find a new connection while grabbing a beer at the airport bar, you might meet your next business partner in an elevator on your way to a meeting, and you just never know who’s sitting next to you on the bus.
Meet everyone you come into contact with and have a short chat. You never know who you’re sitting next to and what connections or resources they might be able to offer you.
20. Learn and Create
The successful entrepreneur mindset is that of learning and creation. As an entrepreneur, you always want to be taking in new information and creating.
To stay in the learner and creator mindset, stay away from TV, social media, and movies. These types of entertainment cause us to be passive and just take in information.
Pursue everything in moderation, but in general, these activities are time-wasters for entrepreneurs. Limiting your entertainment time is a sacrifice that must be made to become a successful entrepreneur.
Instead of watching TV and movies, read case studies and meditate. Take care of your mind and body in constructive, healing ways.
It may “feel good” to watch TV, but it’s not actually a rejuvenating way to relax.
To be a successful entrepreneur, find relaxing activities that help to restore your learner and creator mindset.
21. Successful Entrepreneurs Deliver, Not Sell
Honestly, no one likes to be sold to. I mean seriously, who enjoys going to the car lot and buying a new car? We all know what we’re getting ourselves into and dread it.
Instead of selling to your potential customers, deliver. Offer them a free trial and deliver a great product.
When your company delivers a great product or service, you’ll build customer loyalty faster than you can say, “successful entrepreneur.”
22. Take Baby Steps to Become a Successful Entrepreneur
Building a successful entrepreneurial business can seem daunting, and that’s okay. Building a business from the ground up is a massive undertaking.
Luckily I have a foolproof tactic: break it down.
Any problem that seems insurmountable, break it down into baby steps.
Once you’ve broken it down into baby steps, take them one at a time. Before you know it, just by placing one foot in front of the other, you’ll be halfway up the mountain.
With grit and perseverance, baby steps will get you far toward becoming a successful entrepreneur.
Think something doesn’t need to be on your calendar? It does.
Put your meetings, quiet work periods, time with friends, happy-hour business meetings, kids’ soccer games, workouts, meal times, and anything else that you do on your calendar.
Once something is on your calendar, then everyone who needs to meet with you knows that time isn’t available.
An additional benefit is that once everything is on your calendar, there aren’t excuses for not getting things done.
I want to also draw your attention to one of the items I included: quiet work time. That is time when you can work, solve problems, or think creatively without being interrupted.
Everyone needs these periods of time. To be a successful entrepreneur, guard your quiet work times with your life. The success of your business may depend upon them.
24. Exercise to Become a More Successful Entrepreneur
Did you know that sitting down all day long is bad for your health? It is.
Being a successful entrepreneur doesn’t just mean running a profitable business. Run yourself too ragged managing that business and you might not be around to enjoy its success.
Learn to focus and take time to do just one task. Giving one task your full attention will mean that you’re more likely to get it done and do it well.
It’s also important to know that too many tasks on your to-do list can make you ineffective and distracted.
Learn to focus your to-do list on the tasks that you’re capable of finishing in the amount of time you’ve allotted for them.
For example, each night, set the three tasks that you’ll complete the following day. Each month, set the overarching goal for your company that you want to achieve in the next 30 days.
These techniques can help you to learn how to focus and more effectively manage your business.
26. Take Time Off
We finally made it to the tip that I think it the toughest for successful entrepreneurs to put into practice.
You might not need time off every day or every week, but you do need to take time off. If all you do is work, you’ll burn out. Fast.
I think this is the most challenging for entrepreneurs because they often see themselves as invincible or believe that they must be invincible. This just isn’t true; we’re all humans and we need time off.
Time off allows your brain to roam, to rest, and to think. Ever wonder why you think of so many ideas in the shower? It’s because your brain has free range to just think and roam.
Even the most successful entrepreneurs don’t work all the time. Everyone needs time off, so don’t shame yourself for being human and normal.
When you do take time off, notify your staff ahead of time and let them know why it’s important to you.
Teaching your staff the importance of time off will help them to respect your time away and to recognize when they need time off.
Take time off before you need it and recognize that it’s important for healing, creating, and becoming a more successful entrepreneur.
27. Successful Entrepreneurs Ask Questions
You don’t know everything. No one does.
You should ask for help, advice, mentors, and everything else you need as you get your business set up and running. Asking questions is a valuable skill to have as an entrepreneur.
The more information you have, the more you will know and be able to take into consideration.
Asking questions also helps you to remain in a learner mindset, ready to accept advice and information.
Learners and those who ask questions are more likely to become successful entrepreneurs.
Better to accept it now then later. You will fail at some point. It’s how you adjust to these failures that will make or break your business.
Failure is an aspect of becoming a successful entrepreneur, so you’d better get used to it now.
If your first business does fail, keep in mind that you can create another with the lessons you learned from your first.
29. Get Inspired
Being an entrepreneur is a creative pursuit. As an entrepreneur, you have to make connections, solve problems, and create new things that no one has thought of before.
Creators and creatives need to be inspired.
Successful entrepreneurs take time for the things that inspire them.
Maybe your inspiration comes from being in an art museum, maybe it’s reading books, maybe it’s doodling —whatever it is that inspires you, do it. It’s good for your business.
Successful entrepreneurs are inspired. Don’t let that magic slip for too long. Whenever you can, and definitely when you’re feeling burned out, get out there and get inspired.
Inspiration is the spark for ideas. Ideas make successful entrepreneurs.
30. Successful Entrepreneurs Lend a Helping Hand
Entrepreneurs are busy, so this tip sometimes trips them up. It’s easy to think, “I don’t have time to help anyone else! I’m so busy already!”
However, helping others can be inspiring and massively beneficial. It makes you feel good.
Furthermore, as an entrepreneur, you have a network with whom you can share your expertise and jobs you can hire people for. Why wouldn’t you help out when you can?
When you help someone, they will likely find a way to help you. It might not be today or tomorrow, but somewhere in the future, they will be there to help you when you need it.
Helping others is also a great way to build a loyal and supportive network around you.
Conclusion
Succeeding in business doesn’t come overnight. It takes a lot of planning, preparation, creativity, grit, and patience to become a successful entrepreneur.
The 30 tips I provided in this guide will help you with a long-term strategy and build it in baby steps until your business becomes a success.
If you need help defining and implementing a digital strategy as you start to build your business, let us know if we can assist you. We even offer custom packages for businesses on a strict budget!
There are so many options for business credit cards out there, it can be completely overwhelming to figure out which ones will work best for your business. First, you have to figure out what you actually qualify to get. Then, you have to determine if you need cash back rewards, dining rewards, an air miles business credit card, hotel rewards, or whatever other option you may have.
Love Your Business and Yourself With an Air Miles Business Credit Card
If your credit is good, you are going to have lots of rewards options. The thing is, you want to pick the card with the best rates and terms that has the most useful rewards option for you. Sometimes it’s a no brainer, and sometimes it’s not. If you travel a lot for business, an air miles business credit card may be the perfect way to show your business some love.
Here are 5 ways to love your business and share the love with air miles you earn from your business credit card.
Learn more here and get started with building business credit with your company’s EIN and not your SSN.
Save on Business Travel
It seems obvious, but many business owners do not realize how much of a savings this can be if used properly. If you use your card frequently and earn the most miles possible, you could feasibly save thousands of dollars a year in business travel. Of course, you would need to determine if you travel enough to make this the most profitable choice when compared to whatever other choices you have. If you do not travel for work frequently but you do frequent business dinners, dining rewards may work better.
If you travel often though, the savings from an air miles business credit card could be significant.
Save on Personal Travel
Here is an exciting truth. You do not have to use air miles from a business credit card for business travel. That means you can earn air miles on business purchases and then use them for personal travel.
If you do a lot of personal travel, or if you want to travel, this is a way you can use an air miles business credit card to show yourself some love. Business expenses are typically large enough to earn lots of miles, which can relate to major vacation savings for you. So, even if you do not travel a lot for business, this could be a good option.
Get New Clients
Here’s another tip. You do not have to use miles earned from an air miles business credit card on yourself. You can use them to purchase a ticket for someone else. Therefore, if you need to fly in a potential client or customer for a meeting, you can cover that expense with air miles.
This can happen in a couple of ways. You can transfer air miles to someone else, but there are usually limits on how many, and there are fees. You can also purchase a ticket for someone else directly through your air miles account. This usually will be the option that offers the most savings, but do your research to be certain it works best in your situation.
Keep Current Clients
In dangerof losing a current client? Need to show them some love to get them to stick around? Air miles and free travel can be a great incentive. Or, if you just want to show some good will toward all your customers in general, you could do a giveaway. Offer a round trip ticket for two for Valentine’s Day to a lucky winner!
Reinvest
Now, what do you do with all that savings? Reinvest in your business! Every penny you save is money you can put back into your business to grow and expand.
Learn more here and get started with building business credit with your company’s EIN and not your SSN.
What Are The Best Air Miles Credit Cards ?
It’s hard to say. There are tons to choose from. The one that will work best for you and your business will depend on a number of factors. You need to research all of your options and make an informed decision. Remember also that limits, fees, interest rates, bonuses, and other details can change frequently, so be sure to check with your credit card company now and then to see where you stand.
Here are some options to consider.
Capital One ® Spark® Miles for Business
The Capital One ® Spark® Miles for Business card has an initial annual cost of $0 for the first year. After that, it rises to $95. The regular APR is 20.99%. Of course, this is variable due to the prime rate.
Amazingly, you can get unlimited double miles on all purchases, with no restrictions. Earn 5x miles on rental cars and hotels if you book via Capital One Travel.
Furthermore, you can get an introductory bonus of 50,000 miles. Of course, you do have to meet the minimum spend requirement of $4,500 in the first 3 months after opening the account.However, this is a fairly low hurdle compared with the spending that can be required from other credit cards.
Ink Business Preferred ℠ Credit Card
Another great option is the Ink Business Preferred ℠ Credit Card. You pay a yearly fee of $95, and the regular APR is 15.99- 20.499%, variable. Sadly, there is no introductory APR deal.
Get 100,000 bonus points after spending $15,000 in the first three months after account opening. This works out to $1,250 toward travel rewards if you redeem through Chase Ultimate Rewards.
Also, get 3 points per dollar of the first $150,000 you spend with this card. That includes purchases on travel, shipping, internet, cable, and phone services. Plus, it includes marketing purchases made with social media sites and search engines.
You can get 25% more in travel redemption when you redeem for travel via Chase Ultimate Rewards.
Bank of America ® Business Advantage Travel Rewards World MasterCard® credit card
For no yearly fee while still getting travel rewards, check out this card from Bank of America. It has no yearly fee and a 0% introductory APR for purchases throughout the first 9 billing cycles. Afterwards, its regular APR is 12.24- 22.24% variable.
You can get 30,000 bonus points when you make a minimum of $3,000 in internet purchases within 90 days of your account opening. You can redeem these points for a $300 statement credit towards travel purchases.
Learn more here and get started with building business credit with your company’s EIN and not your SSN.
Get unlimited 1.5 points for every $1 you spend on all purchases, anywhere, each time, no matter how much you spend.
Also earn 3 points per every dollar spent when you reserve your travel with the Bank of America ® Travel Center. There is no limit to the number of points you can get and points do not expire.
Even better, you can earn up to 75% more points on every purchase if you have a corporate checking account with Bank of America and qualify for Preferred Rewards for Business.
An Air Miles Business Credit Card Is a Great Way to Show Your Business, and Yourself, Some Love
If you qualify for an air miles business credit card, it can be a great tool. It’s a way to handle business expenses and save money at the same time. However, this only works if you tend to travel frequently, either personally or for business. Or, of course, if you can use the miles as an incentive of some sort.
If you do not qualify, it may be time to do something about that. Try asking a business credit expert for help. You will be glad you did.
Getting a loan to buy and existing business is a somewhat different animal than getting a regular business loan. There are plenty of options, but it can take some careful consideration and research to figure out which option will work best for you. What’s your best option for a business loan to buy a business? … Continue reading 5 Ways to Get a Business Loan to Buy a Business
Getting a loan to buy and existing business is a somewhat different animal than getting a regular business loan. There are plenty of options, but it can take some careful consideration and research to figure out which option will work best for you. What’s your best option for a business loan to buy a business?
How to Get a Business Loan to Buy a Business Regardless of Credit
It’s also important to know that, even if your credit isn’t the best, you can still get a business loan to buy a business. It may not be the traditional term loan you probably expect, but you can most likely still get the fund you need. Sometimes, it takes combining a couple of options to get the best funding for your specific needs.
Business Loan to Buy a Business: Traditional Loans
Traditional loans are a decent first stop when you are trying to figure out how to get a loan to buy a business. If you have good personal credit, you’ll have no problem here. Furthermore, if your credit is good, you will get the best interest rates and loan terms from a traditional loan.
These are loans that are secured by some asset that you own. Rates are lower, and your personal credit doesn’t have as much of an impact. The bank is taking on less risk due to the fact they can take possession of the asset if you default. The business you are purchasing can be used as collateral for the loan. However, there are other, outside of the box options, that you can use if needed. We’ll talk about this more later.
Guarantor Loans
Here’s another idea if you do not have or want to use assets as security for a loan, but your personal credit score isn’t quite up to par. Ask a friend or family member who has these kinds of assets or a good credit score. They may let you leverage their asset in exchange for a percent of your business. They usually want less of a percent of your company than a venture capitalist would.
If you are going to get help from friends and family to buy a business, asking them to sign on as a guarantor may be a better option than borrowing from them directly. That can cause a lot of drama.
SBA Loans
Qualified borrowers may be eligible for SBA loans. These are loans guaranteed by the federal government. Yet, funds are distributed through banks. The application process is more involved. However, interest rates are often better. Typically, minimum credit score requirements are lower than what banks would offer without the government guarantee as well.
7(a) Loans
This program offers federally funded term loans up to $5 million. Banks, credit unions, and other specialized institutions, in partnership with the SBA, process these loans and disburse the funds.
The minimum credit score to qualify is 680. There is also a required down payment of at least 10% for the purchase of a business, commercial real estate, or equipment. The minimum time in business is 2 years. In the case of startups, business experience equivalent to two years will suffice.
504 Loans
These loans are also available up to $5 million. Terms range from 10 to 20 years. Funding can take from 30 to 90 days. They require a minimum credit score of 680. The asset you are financing is the collateral for the loan. In addition, there is a down payment requirement of 10%. This can increase to 15% for a new business.
There is also a 2 years in business requirement, or management must have equivalent experience if the business is a startup.
Business Loan to Buy a Business: Alternative Lenders
Alternative lenders are lenders that are not traditional banks or credit unions. These are typically private or peer-to-peer lenders that operate online, though not all operate online. They work better than banks for some because they will usually use other information besides credit score. As a result, they will often approve loans to borrowers with a lower minimum credit score if they meet other criteria.
These other criteria could include annual revenue, time in business, average balance in business bank account, and more.
One popular online lender that works well for funding to buy a business isLending Club. You can get a quote in less than 5 minutes, and funds are available in as little as 48 hours if approved. There are no prepayment penalties. Loans go up to $300,000 and you need a minimum credit score of 620. Of course, details like this change frequently, so be sure to check with any lender directly for the most up-to-date information on rates and fees.
Lending Club is only one option. There are many out there, but you have to be careful. There are some great lenders, but there are also some predatory lenders in this industry. It can be hard to tell the difference. To ensure you are working with a reputable lender, consider working with a business credit expert. They can help you find the best lender with the best products for your needs. They can also help you figure out what you can improve to get the best rates and terms possible. This may include building business credit, or improving fundability some other way.
Business Loan to Buy a Business: Rollover for Business Startups
This is a form of collateralized business loan to buy a business that uses your existing 401(k) or IRA. This program uses IRS proven strategies. You will pay no tax penalties, and you still earn interest on your 401(k). Rates are low, and this option usually has a quick closing and funding process as well.
account value that’s “rollable” from a previous employer. Terms can be up to 5 years, and rates as low as 5.25% (Prime + 2) + $1995 rolled in lender fee.
There are no credit requirements. If bad credit is blocking you from getting the funding you need to buy a business, this is your chance.
For the retirement account to qualify, you must no longer be contributing, no longer be employed by the issuing company, and you must have a minimum of $35,000 in the account. Typically all that is required is a copy of the retirement account statement.
Business Loan to Buy a Business: Seller Financing
If you have trouble getting all the funding you need to purchase a business, you may be able to get help from the seller. Some sellers are willing to help buyers by bridging the gap with seller financing. Sometimes a seller will sell a business solely on seller financing.
Typically in these transactions, you pay at least one-third of the sale price up front. Then, the buyer makes payments for the rest directly to the seller, plus interest. Sometimes, a bank may be willing to lend this lesser amount, the amount of the down payment only, when they will not lend the entire selling price.
The reason for this is twofold. First, the lower amount means less risk for the bank. However, banks also see that if a seller is willing to finance, then they have faith that the business will continue to produce a profit into the future. This is seen as a positive.
Using the Credit Line Hybrid to Help Fund a Business Purchase
That said, here is another option to get funding to buy a business. The Credit Line Hybrid offers no-doc, unsecured business financing. You can get up to $150,000. In some circumstances, interest rates can be as low 0% for a limited amount of time. This can be used as some or all of the down payment required for an SBA loan or seller financing. The interest rate could be substantially lower than using a bank loan. Furthermore, you can take on a credit partner. This is helpful if you do not meet the 680 minimum credit score or some of the other requirements. Even better, the Credit Line Hybrid reports to the business credit reporting agencies. That means you build business credit and fund your business purchase at the same time. A business credit expert can walk you through the process.
Business Loan to Buy a Business: Heloc and HEL
Borrowers who have a minimum credit score of at least 620 and at least 20% equity in their home can usually get a home equity loan (HEL) or home equity line of credit (HELOC). You can use funds from this type of loan to buy a business, but your house will be on the line. If you have the option of 401(k) financing or seller financing combined with the Credit Line Hybrid, that may be better.
You Can Get a Business Loan to Buy a Business Even With Bad Credit
If you have great credit you probably are not worried about how to get a business loan to buy a business. However, if your credit is less than desirable, you have probably been wondering how you could ever make it work. The fact is, there are options, and Credit Suite can help.
So you have worked hard to build your own personal brand. Is there any way to turn that effort into a source of income? Yes! Here my three favorite ways to monetize your brand: 1. …
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