Tag: Ways

Seven Ways You Can Destroy Your Recession Bank Credit

Your Recession Bank Credit Score – What’s it All About?

Did you know there are all kinds of ways you can wreck your recession bank credit score? It is, regrettably, pretty easy to run a power saw through your bank score.

However prior to going any further, do you know the distinction between recession bank credit scores and company credit?

Small business credit is the full and complete amount of cash that your company can obtain from all types of creditors. That means the banking system, credit unions, credit card companies, and also renting businesses. And it also means vendors, under what’s called trade credit or supplier credit or trade lines. That is, vendor credit.

But a recession bank credit score, on the other hand, is a measure of the full amount of borrowing capability which a business can receive from the banking system only.

Recession Era Financing

The number of American banks and thrifts has been decreasing gradually for 25 years. This is from consolidation in the market along with deregulation in the 1990s, decreasing obstacles to interstate banking. See: fundera.com/blog/happened-americas-small-businesses-financial-crisis-six-years-start-crisis-look-back-10-charts

Assets focused in ever‐larger banks is troublesome for small business owners. Big financial institutions are much less likely to make small loans. Economic declines imply banks become much more careful with lending. The good news is you can assure your bank by improving your recession bank credit score.

Recession Bank Credit Ratings Clarified

A small business can obtain more company credit promptly, so long as it has at the very least one bank reference and an average day-to-day account balance of at least $10,000 for the most recent three month time period. This setup will yield a bank credit score of a Low-5. So this means it is an Adjusted Debt Balance of from $5,000 to $30,000.

A lower score, like a High-4, or balance of $7,000 to $9,999 will not immediately decline the small company’s loan application. Nevertheless, it will slow down the approval process.

Have a look at our expert research on bank scores, the little-known reason you will – or won’t – get a bank loan for your small business.

What is a Recession Bank Credit Score?

A bank rating is a measure of the average minimum balance as kept in a business bank account over a 3 month long period. Therefore a $10,000 balance| will rate as a Low-5, a $5,000 balance will rate as a Mid-4, and a $999 balance will rank as a High-3, etc.

A business’s principal goal should always be to maintain a minimum Low-5 bank rating (or, an average $10,000 balance) for at the very least three months. This is because, without at least a Low-5 score, the majority of banks will operate under the assumption that the business has little to no capacity to pay off a loan or a business line of credit.

Yet there is one point to remember – you will never really see this number. The financial institution will simply keep this number in its back pocket.

It is vital, particularly in bad economic times, to do your best to raise your recession bank credit score.

Recession Bank Credit Score Ranges

The numbers work out to the following ranges:

To get a High-5 rating, your business will need to have an account balance of $70,000 to $99,999. For a Mid-5 score, your company must have an account balance of $40,000 to $69,999. And for a Low-5 rating, your company needs to keep an account balance of $10,000 to $39,000. So your small business needs this level bank score or better in order to get a bank loan.

For a High-4 score, your small business has to have an account balance of $7,000 to $9,999. And for a Mid-4 rating, your small business must maintain an account balance of $4,000 to $6,999. So for a Low-4 rating, your small business will need to have an account balance of $1,000 to $3,999.

Damaging Your Recession Bank Credit Rating

And now, without further ado, right here are 7 ways you can leave your bank rating in tatters.

7th Way to Destroy Your Bank Credit

Don’t keep a minimum balance for a minimum of three months. Because every bank score cycle is based upon the previous 3 months, a continuously seesawing balance should harm your bank rating.

6th Way to Ruin Your Bank Credit

Don’t bother to guarantee that your company bank accounts are reported precisely the same way as every one of your company documents are, and also with the exact same physical address (no post office box) and contact number. Sow confusion here by changing one and not another, or not fixing an error if there is one.

Have a look at our expert research on bank scores, the little-known reason you will – or won’t – get a bank loan for your small business.

5th Way to Destroy Your Bank Credit

To go along with # 6, do not make certain that each and every credit bureau and trade credit vendor likewise lists the business name and address the precise same way. This is every keeper of financial documents, earnings and sales taxes, web addresses as well as e-mail addresses, directory assistance, and so on.

No lending institution is going to think of the myriad ways that a business might be listed, when they check out the business’s creditworthiness. Thus if they are not able to locate what they need easily, they will either deny an application or it won’t be reported to a business credit reporting agency such as Experian, Equifax or Dun & Bradstreet.

For that reason, if they are not able to locate what they require conveniently, they will simply reject the application. So ensure your records are a mess!

Recession Bank Ratings

4th Way to Damage Your Bank Credit

Never handle your bank account responsibly. This means that your small company ought to not prevent writing non-sufficient funds (NSF) checks at all costs, since those annihilate bank ratings. Non-sufficient-funds checks are something which no small business can afford to let happen.

Balancing checkbooks and accounts is so boring anyway. You’ve got adequate cash without even making sure, right?

3rd Way to Ruin Your Bank Credit

To contribute to # 4, do not include overdraft protection to your bank account immediately, in order to avoid NSFs. Why bother thinking in advance or preparing for the future? Everything is going to| be excellent permanently, right?

Writing checks insufficient funds (NSFs) is a sure way to wreck your bank rating.

2nd Way to Destroy Your Bank Credit

Don’t let your business show a positive cash flow. The cash coming in and leaving your firm’s bank account must reflect a positive free cash flow.

A positive free cash flow is the quantity of income left over after a company has paid every one of its expenses. According to Investopedia, it “represents the cash a company can generate after required investment to maintain or expand its asset base. It is a measurement of a company’s financial performance and health.”

When an account shows a positive cash flow it suggests your company is producing more profits than is used to run the business. That means the financial institution will feel your small business can pay its costs.

So if you actually intend to ravage your bank score, purchase whatever’s expensive for your company so your costs outstrip your earnings. Doesn’t every factory deserve deluxe carpets in the loading dock?

Have a look at our expert research on bank scores, the little-known reason you will – or won’t – get a bank loan for your small business.

1st Way to Destroy Your Bank Credit

Banks are extremely motivated to lend to a business with consistent deposits. And a business owner needs to also make regular deposits in order to keep a positive bank rating. The business owner has to make several consistent deposits, more than the withdrawals they are making, in order to have and preserve a great bank score. If they can do that, then they will have an excellent bank credit score.

Consistency is the hobgoblin of little minds, right? So be a free spirit!

Damage Your Small Business’s Recession Bank Credit Rating – Despite The Fact That You Will Never See It

You, the entrepreneur must never make consistent deposits. And these deposits should never be more than the withdrawals you are making, in order to destroy your bank credit rating.

If you can do these things, then your business will have a horrible bank credit score. And, in turn, a bad bank credit rating means your company is far less likely to obtain business loans.

Just Kidding: Certainly We Do Not Actually Want You to Ruin Your Business’s Recession Bank Credit Score!

So, where do you go from here?

The First Great Way to Rescue Your Bank Credit

Perhaps the most convenient way to achieve and maintain a great bank credit is to deposit at least $10,000 into your business bank account and keep it there for as much as six months. While you will still need to make regular deposits, this one simple step will aid in three ways. One, you will have kept a great minimum balance for a minimum of three months. 2, you will probably not overdraw with such a great balance. And 3, you will get to the magic minimum for a Low-5 bank credit rating. Hence you will be taking care of our # 4 and # 7, above.

And you may even have the ability to get around our # 3. However we still highly recommend overdraft protection.

The Second Terrific Way to Rescue Your Bank Credit Rating

A 2nd requirement is to see to it your small business account information correspond across the board, all over. While it may take some work order to ensure everything is right, you will be taking care of our # 5 as well as # 6, above.

The Third Great Way to Rescue Your Bank Credit Rating

A 3rd necessity is to make regular deposits, and make sure they are greater than the quantities you are withdrawing every month. This will take care of our # 1 and also # 2 conveniently.

Your bank rating is not to be trifled with. Despite the fact that the banks maintain a secret regarding them, failing to keep your bank credit score high will make it a great deal tougher to be successful in business.

The post Seven Ways You Can Destroy Your Recession Bank Credit appeared first on Credit Suite.

3 Ways to Fix Business Credit in a Recession

Learn How to Fix Business Credit

Do you need to repair your business credit? Is your business credit score nothing to write home about? Was it good once but now, not so much? Here are three easy and effective ways to fix business credit and get back on track.

Recession Period Funding

The number of American financial institutions as well as thrifts has been decreasing progressively for 25 years. This is coming from consolidation in the marketplace in addition to deregulation in the 1990s, decreasing obstacles to interstate banking. See: https://www.fundera.com/blog/happened-americas-small-businesses-financial-crisis-six-years-start-crisis-look-back-10-charts

Assets concentrated in ever‐larger financial institutions is problematic for small business proprietors. Big financial institutions are much less likely to make small loans. Economic recessions mean financial institutions come to be a lot more mindful with financing. Thankfully, business credit does not rely on financial institutions.

Fix Business Credit: 1 – Make Sure Your Credit Scores Are Accurate

Perhaps the easiest way to repair business credit is to assure that all of the reporting on it is correct and complete. This can help you locate feasible issues and stay informed on your business credit profile. So the first thing you want to do is, request your reports.

Business Credit Reporting Agencies

FICO SBSS

FICO’s SBSS (Small Business Scoring Service) Score will be generated when you apply for a loan. The lender will send your company’s documents and information to FICO. Then FICO will collect more data from the credit reporting agencies (Equifax, Dun & Bradstreet, and Experian).

Dun & Bradstreet’s PAYDEX

A PAYDEX Score works as Dun & Bradstreet’s dollar-weighted numerical rating of how your company has paid the bills during the last 12 months. Get your PAYDEX report here and you can contact their Customer Service department here.

Equifax

Order your business’s Equifax report here.

Experian

Order your company’s Experian report here.

Monitor Your Business Credit

Know what is happening with your credit. Make certain it is being reported and attend to any errors as soon as possible. Get in the habit of checking credit reports and digging into the details, and not just the scores.

We can help you monitor business credit at Experian and D&B for 90% less.

At Equifax, you can monitor your account at: www.equifax.com/business/business-credit-monitor-small-business.

Update Your Information

Update the data if there are inaccuracies or the info is incomplete. At D&B, you can do this at: https://iupdate.dnb.com/iUpdate/viewiUpdateHome.htm. For Experian, go here: www.experian.com/small-business/business-credit-information.jsp. So for Equifax, go here: www.equifax.com/business/small-business.

Fix Business Credit

So, what’s all this monitoring for? It’s to dispute any mistakes in your records. Errors in your credit report(s) can be taken care of. But the CRAs normally want you to dispute in a particular way.

Get your small business’s PAYDEX report at: www.dnb.com/about-us/our-data.html. Get your company’s Experian report at: www.businesscreditfacts.com/pdp.aspx?pg=SearchForm. And get your Equifax business credit report at: www.equifax.com/business/credit-information.

Disputes

Disputing credit report errors generally means you send a paper letter with copies of any proofs of payment with it. These are documents like receipts and cancelled checks. Never mail the originals. Always mail copies and retain the originals.

Fixing credit report mistakes also means you specifically spell out any charges you challenge. Make your dispute letter as crystal clear as possible. Be specific about the problems with your report. Use certified mail so that you will have proof that you mailed in your dispute.

Dispute your or your small business’s Equifax report by following the instructions here: www.equifax.com/small-business-faqs/#Dispute-FAQs.

You can dispute errors on your or your company’s Experian report by following the instructions here: www.experian.com/small-business/business-credit-information.jsp.

And D&B’s PAYDEX Customer Service phone number is here: www.dandb.com/glossary/paydex.

Disputing Charges with Your Creditors

Much like you disputed the charges to the reporting agency, you may also need to dispute them to the creditor itself. Again, you will need to make your case in writing and enclose copies of any proof of payment. Be specific about what you are disputing.

Fix Business Credit: 2- Understand Your Scores

Understanding your scores is a great way to start to fix business credit. This way, you spend your time on activities which are most likely to help you. That is, you can get the best bang for your buck. Even in a recession, fixing business credit scores is easier if you understand your scores in the first place.

Dun & Bradstreet’s PAYDEX Business Credit Score

A PAYDEX Score from Dun & Bradstreet ranges from 0 to 100. This score has a basis in payment information which is on report to the agency. Or it is on report to data-gathering firms partnering with the CRA. https://creditreports.dnb.com/m/business-glossary/paydex-score.html

D & B uses this data, along with a credit score and Financial Stress Score, so as to advise just how much credit a lending institution should extend to your company.

Getting a PAYDEX Score

To get a PAYDEX score, you must file for a D-U-N-S number by using Dun & Bradstreet’s site. The number is at no cost. Plus the CRA will need to have reports of your payments with four or more merchants.

Your firm’s PAYDEX score reveals if your payments are usually made promptly or in advance of schedule. As you might expect, a higher number is better.

PAYDEX Score Details

The scores break down as follows:

  • 80 – 100: A low risk of late payments
  • 50 – 79: A medium risk of late payments
  • 0 – 49: A high risk of late payments

D&B Business Credit Scores

Your company’s credit score ranges from 1 to 5. 1 is the best score. This matches your firm with other companies with similar payment histories. The score demonstrates just how usually those business often tend to pay immediately.

This information can actually assist loan providers to acknowledge your business’s standing. But it does not really reflect all of the payment documents from your business.

Financial Stress Score

The Financial Stress Score also runs from 1 to 5. It matches your company with various other business sharing comparable financial and business characteristics.

These resemblances are in areas such as size or amount of time in business. This score shows how often those businesses have a tendency to pay on schedule. As before, 1 is the very best score. This score is a more thorough examination of the business landscape, versus an evaluation of your company’s actual payment history.

An awesome PAYDEX score for your business is 80 – 100.

Experian Credit Scores

Experian’s scoring system is called Intelliscore Plus. http://www.experian.com/business-information/credit-risk-management.html

What is the Intelliscore Plus Credit Score?

The Intelliscore Plus credit score is a statistically based credit-risk analysis. The key function of Intelliscore Plus is to aid companies, investors, and possible future loan providers make wise judgments about who they should or should not do business with.

Like an auto dealer uses a consumer’s FICO score to quickly figure out just how much of a credit risk a potential customer might be, the Intelliscore Plus credit score can provide understanding on just how much of a credit risk a company or business owner may be.

Intelliscore Plus Credit Score Range

The Intelliscore ratings vary from 1 to 100. So the higher your rating, the lower your risk class. The chart below details each Intelliscore Plus credit score range as well as its associated meaning.

Score Range/Risk Class

  • 76 – 100 Low
  • 51 – 752 Low – Medium
  • 26 – 503 Medium
  • 11 – 254 High – Medium
  • 1 – 105 High

Computing an Intelliscore Plus Credit Score

In the credit world, Intelliscore Plus is considered one of the most trusted tools in successfully forecasting risk. Among the ways Intelliscore Plus maintains this claim to fame is by acknowledging the major variables that reveal if a firm is likely to pay their debts.

Though there are over 800 industrial and owner variables constituting an Intelliscore Plus credit score, the variables can be broken down into these essential factors:

Payment History

The bureaus call this recency yet in the real world, it’s nothing more than your current payment status. This includes the number of times your accounts become delinquent, the number of accounts that are currently overdue, and your overall trade balance.

Frequency

Just like payment history, frequency accounts for the quantity of times your accounts have been sent out to collections, the amount of liens as well as judgments you may have, and any bankruptcies connecting with your business or personal accounts.

Frequency can likewise consist of information associating with your payment patterns. Were you regularly slow or late with payment? Did you start paying expenses late, yet over time, quit doing so? These elements will certainly all be considered.

Monetary

This particular aspect focuses on exactly how you use credit. As an example, just how much of your readily available credit is presently in operation? Do you have a high ratio of overdue balance in contrast with your credit limits?

If you will start a company or are fairly new to this game, the listing above may seem a bit overwhelming. If you haven’t begun or do not have a lengthy history of business-based deals, exactly how will Intelliscore Plus rate you?

Intelliscore Plus handles these scenarios by using a blended model to develop your score. This suggests that they consider your personal credit score when determining your business’s credit score.

Fix Business Credit in a Recession Credit Suite

Find out why so many companies are using our proven methods to improve their business credit scores, even during a recession.

Equifax Business Credit Scores

The Equifax Credit Risk Score comes from a model which they use to place specific risks. Equifax uses these information in its computations, consisting of the depth of the credit information Experian can get the length of your small business’s credit history, as well as your business’s payment delinquency history. http://www.equifax.com/business/equifax-risk-score

http://www.equifax.com/assets/USCIS/efx-00178_efx_risk_score.pdf

http://www.equifax.com/assets/USCIS/efx-00164-9-13_efx_bni.pdf

Equifax then segments some 5 different scorecards with each other, by using statistical analysis. In order to improve their accuracy, Equifax recommends combining their Credit Risk Score with their proprietary Equifax Bankruptcy Navigator Index.

The Bankruptcy Navigator Index helps forecast the likelihood of your company going bankrupt in the next 24 months. Equifax bases its predictive model on over 270 million separate accounts.

Equifax shows three separate business determinations on its commercial credit reports. These are the Equifax Payment Index, your company’s Credit Risk Score, and its Business Failure Score.

Equifax Payment Index

Comparable to the PAYDEX rating, Equifax’s Payment Index, which has its measurement on a range of 100, demonstrates how many of your company’s payments were made punctually. These consist of both data from credit companies and vendors.

However it’s not implied to anticipate future behavior. That is what the other two ratings are for.

Equifax Credit Risk Score

Equifax’s Credit Risk Score assesses how likely it is your business will come to be drastically delinquent on payments. Scores range from 101 to 992, and they review:

  • Available credit limit on revolving credit accounts, e. g. credit cards
  • Your business’s size
  • Evidence of any type of non-financial transactions (e. g. vendor billings) which are delinquent or were on charge off for two or more billing cycles
  • Length of time since the opening of the earliest financial account

Fix Business Credit in a Recession Credit Suite

Find out why so many companies are using our proven methods to improve their business credit scores, even during a recession.

Equifax Business Failure Score

Finally, Equifax’s Business Failure Score takes a look at the risk of your small business closing. It ranges from 1,000 to 1,600, reviewing these aspects:

  • Total balance to total current credit limit average utilization in the previous three months
  • How much time since the opening of the oldest financial account
  • Your company’s worst payment status on all trades in the previous 24 months
  • Documentation of any non-financial transactions (e. g. vendor billings) which are overdue or have gotten on cost off for two or more billing cycles.

Equifax Scoring Analysis

For the credit risk as well as business failure scores, a rating of 0 means bankruptcy.

An outstanding Equifax score for your firm is as follows:

  • Payment Index 0 – 10
  • Credit Score 892 – 992
  • Business Failure Score 1400 – 1600

FICO Business Credit Scores

FICO uses its SBSS (Small Business Scoring Service) Score to incorporate consumer bureau, monetary, application, and business bureau information. FICO then validates their SBSS models for purchases such as Credit line transactions, Term Loans, and Commercial Card obligations which go up to $1 million. Their idea is to evaluate how your business repays all kinds of loans. http://www.fico.com/en/node/8140?file=6045

Business credit providers make use of the FICO SBSS score as a device to make a decision whether they should authorize a loan to your small business at all.

The SBA employs this score as well, to authorize or approve company loans. It has a basis in your company and consumer credit history and not simply your company’s financial health.

The score factors in the examination of the risks inherent in your company’s credit applications. With SBSS, lending institutions make their determinations in a matter of hours, as opposed to days. Lenders are more confident in their lending judgments, and your business gets swifter decisions on your loan applications.

The SBA’s Participation

The FICO Small Business Score or SBSS score is the main figure that the SBA considers while establishing to approve a loan, especially when it involves the SBA’s 7(a) loans.

Computing a FICO SBSS Score

The FICO SBSS Score reveals the likelihood or possibility of you, the candidate, covering your month-to-month bills promptly. The score runs from 0 to 300. A higher score means reduced risks and typically creates more favorable credit terms. The score comes from your company and personal history of credit use along with your business’s financial data. Variables also involve your company’s age, as well as its years or complete time in business.

As of 2014, all SBA 7(a) loans must go through a business credit score pre-screen, as well as for SBA loans, you might perhaps not get an approval if you had a score less than 140. However the cutoff was generally set to 160, and frequently, a score under 160 meant a rejection. A lot of lending institutions will only approve scores above 160 or 180, to lend as much as $1 million. However a score lower than 160 or 180 can still qualify you for a smaller sized loan.

The formula for the FICO SBSS Score is as follows:

  • The last year of PAYDEX scores from Dun & Bradstreet
  • Amounts and types of any judgements against your firm
  • The amounts and kinds of any liens against your business’s real or personal property.
  • Your company’s available resources
  • Your company’s profit
  • And other, less distinct monetary information

If you have no record of company credit and had a small or quick time in your business, then the possible highest FICO SBSS score you can perhaps expect is 140.

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Find out why so many companies are using our proven methods to improve their business credit scores, even during a recession.

Usage and Sorts of SBSS Model Lenders

A FICO SBSS rating includes the choice to opt for particular models which are market-specific for enhanced and much better decision making. For instance, one model is an agricultural leasing and lending model. Another model was made especially for Canada. Additionally, the insights of the SBSS score provide support for the SBRI (Small Business Risk Insight, from Dun & Bradstreet) and the SBFE (Small Business Financial Exchange) data databases.

Confirming the SBSS models is necessary for credit lines, commercial cards, as well as term loans of as much as one million dollars. If you are requesting one million dollars or less from bank financing, then there are chances that your SBSS score will be under review.

The Kind of Information in the Score

The SBSS offers the credit issuers of businesses various information blends to guarantee that they can evaluate your company’s credit risks. For instance, a particular issuer of credit can choose only to examine a principle proprietor’s application information, or the credit provider can select to include one or multiple business bureaus’ data.

Or the credit issuer can only decide to prioritize one aspect over another. This intelligent score originates from various business bureaus on an automated basis, in any type of order or whatever priority the issuer of the credit likes. For that reason, if the loan provider selects the score of Dun & Bradstreet’s PAYDEX as its default, the SBSS will pull that set of information.

SBSS Credit Offer Index: Exactly How It Works and Why It Is Important

The Credit Index is an element of the FICO SBSS Credit Score for your business, made to help credit issuers understand your capacity. It works as the standards against all the businesses with similar profiles.

The SBSS Credit Offer Index includes economic application info, business credit bureau documents, and credit bureau information for consumer. It gives a percentile ranking of the present versus other smaller sized businesses with identical or comparable attributes and total requested money from all those companies.

The Updated SBSS

Reporting agencies like D&B power the newer FICO SBSS Score model. The SBFE information may be used to anticipate charge-offs, bankruptcy, or three plus cycles overdue or delinquency over a duration of two years.

SBA Credit Scoring

The SBA’s tool has a basis in FICO. Their idea is to accelerate their credit choices for loan approvals. The tool uses several data sources and over one hundred combinations of business and consumer analytical models. They use a designated cutoff. https://www.sba.gov/offices/district/mo/st-louis/resources/small-business-loan-credit-scoring

Their total stats on their over $60 billion profile show that companies with scores at, or over the assigned cut-off will have very good payment history. So when you fix business credit, you might just want to fix your personal credit as well.

Fix Business Credit: 3 – Improve Your Payment History

Fixing credit issues means you need to fix bad habits and not repeat them. Mostly importantly, this means paying your bills on time and as completely as possible. A bonus to paying on time and in full means you pay considerably less interest on your debts.

Your payment patterns and history are a driving force in your overall credit score. Over time, paying your invoices on schedule will help establish your company as one that pays their financial obligations. This will inevitably help push your score up as well as show other firms you are a low risk.

Fix Business Credit: Bonus – Keep Your Debt-to-Income Ratio in Check

The more debt you have on your plate, the more invoices you have, and the less disposable income you have. If your total debt approaches or surpasses your income level, then you’re probably to be seen as high-risk.

Keep your financial obligations in check and consistently pay them off to keep a healthy balance between what you make and what you owe.

Fix Business Credit: Bonus – Use Your Credit

Keeping your financial obligations low remains sound recommendations. Still, opening and sensibly capitalizing on business credit accounts can help you increase your available credit and fix business credit.

Bonus – Improve Your Personal Credit Score, Too

Why is your personal credit score important to your business credit score? Your personal credit is fair game when it pertains to your Intelliscore Plus score.

Running a company is difficult work, but don’t let your individual finances suffer. Stay on top of your personal monthly bills. Also, stay clear of unnecessary credit inquiries. And avoid compromising your personal credit for company demands.

Fix Business Credit: Takeaways

Check your business credit scores and stay on top of your bills. Dispute errors and monitor your profiles so you’re never caught unawares.

The post 3 Ways to Fix Business Credit in a Recession appeared first on Credit Suite.

Six Ways to Creatively Fund a Startup Without Using Equity During a Recession Cycle

Creative Recession Cycle Funding For New Businesses

As an entrepreneur, raising money for your new startup business can seem hard to execute. You’ve probably seen dozens of competition funds out there, so you have chances to secure funding. Ultimately, you want funding for your startup to come from investors. But getting investors can be impossible for a new startup. Recession cycle funding for startups can happen.

Using your equity might seem like the best idea to fund your business as you wait for investors to come. Most new startup business owners, fall prey to taking out the equity to fund the business before the revenue starts rolling in. You don’t have to take out equity to fund your startup. It’s not necessary. The success of your business solely comes from decisions you make as the business owner.

Here are some ways to creatively make money for your new startup without taking out of your equity.

Recession Era Funding

The number of United States financial institutions as well as thrifts has been decreasing progressively for a quarter of a century. This is from consolidation in the marketplace along with deregulation in the 1990s, decreasing barriers to interstate banking. See: https://www.fundera.com/blog/happened-americas-small-businesses-financial-crisis-six-years-start-crisis-look-back-10-charts

Assets focused in ever‐larger financial institutions is problematic for small business proprietors. Big banks are a lot less likely to make small loans. Economic recessions mean banks become extra mindful with lending. The good news is, business credit does not depend on financial institutions.

Recession Cycle Funding: Crowdfunding

Use Kickstarter. There’s a method to the madness in using Kickstart to fund your startup. First, do your research before pitching your idea to Kickstarter. Find out if there’s another project they have approved like your startup. So if they deny your idea, refer to similar projects they have approved. And when you ask for money from Kickstarter, be realistic and ask for money to help you survive for a few months. Don’t forget to spread the word to your friends and family asking them to help fund your start up.

Recession Cycle Funding: Bootstrap

Put your Money in First. When you first start out, tap into your own saving accounts, home equity, retirement accounts, etc. This might seem a bit risky, but you should invest in your own startup venture before you expect other investors to put money into it. Most investors will want to see the owners of the business have invested some of their own cash in the business to show confidence.

But there can be some issues with bootstrapping your business.

Still, here are some ways to bootstrap to build more financial resources.  

Share and Save on Services and Equipment

Share office services and equipment. You’ll probably need to get a co-work space where you can share the office space and equipment with other business owners. This will help you cut the cost of renting an office space and paying the high monthly rent.

Use the computers and servers you have. Don’t go out and buy new equipment when you start your startup. Use the computers, software, and desks, etc., you already have. Don’t spend extra money renting new equipment.

Recession Cycle Funding: Grants

Pursue non-dilutive capital. Look for government grants to get more money for your startup. Cities and states have grant programs offering low-interest rates on loans. Having access to these resources give startups the ability to qualify for large sums of money.

Recession Cycle Funding: Startup Business Credit Cards

Business credit cards can be a great way to get a startup off the ground.

We looked at a number of business credit cards, and did the research for you. So here are our picks.

Per the SBA, business credit card limits are a whopping 10 – 100 times that of personal cards!

You can get a lot more money with business credit. And you can still have personal credit cards at stores. So you would now have an added card at the same stores for your company.

You don’t need collateral, cash flow, or financials to get business credit. This is still true during a recession cycle.

Benefits can vary. So, make certain to choose the benefit you would prefer from this assortment of alternatives.

Dependable Credit Cards for Fair to Poor Credit, Not Calling for a Personal Guarantee

Brex Card for Startups

Look into the Brex Card for Startups. It has no annual fee.

You will not need to provide your Social Security number to apply. And you will not need to supply a personal guarantee. They will take your EIN.

Nonetheless, they do not accept every industry.

Likewise, there are some industries they will not work with, as well as others where they want added documentation. For a list, go here: https://brex.com/legal/prohibited_activities/.

To determine creditworthiness, Brex checks a business’s cash balance, spending patterns, and investors.

You can get 7x points on rideshare. Get 4x on Brex Travel. Also, get triple points on restaurants. And get double points on recurring software payments. Get 1x points on everything else.

You can have poor credit scores (even a 300 FICO) to qualify.

Find it here: https://brex.com/lp/startups-higher-limits/

Secure Business Credit Cards for Fair Credit

Capital One® Spark® Classic for Business

Take a look at the Capital One® Spark® Classic for Business. It has no yearly fee. There is no introductory APR offer. The regular APR is a variable 24.49%. You can earn unlimited 1% cash back on every purchase for your company, without any minimum to redeem.

While this card is within reach if you have fair credit scores, beware of the APR. But if you can pay on schedule, and in full, then it’s a bargain.

Find it here: https://www.capitalone.com/small-business/credit-cards/spark-classic/

Recession Cycle

Establish business credit fast and beat the recession with our research-backed guide to 12 business credit cards and lines.

Exceptional Business Credit Cards with No Yearly Fee

No Yearly Fee/Flat Rate Cash Back

Ink Business Unlimited℠ Credit Card

Check out the Ink Business Unlimited℠ Credit Card. Past no yearly fee, get an introductory 0% APR for the first one year. After that, the APR is a variable 14.74 – 20.74%.

You can get unlimited 1.5% Cash Back rewards on every purchase made for your company. And get $500 bonus cash back after spending $3,000 in the first 3 months from account opening. You can redeem your rewards for cash back, gift cards, travel and more through Chase Ultimate Rewards®. You will need excellent credit to get approval for this card.

Find it here: https://creditcards.chase.com/business-credit-cards/ink/unlimited

Recession Cycle

Establish business credit fast and beat the recession with our research-backed guide to 12 business credit cards and lines.

Company Credit Cards with a 0% Introductory APR – Pay Zero!

Blue Business® Plus Credit Card from American Express

Take a look at the Blue Business® Plus Credit Card from American Express. It has no yearly fee. There is a 0% introductory APR for the first 12 months. After that, the APR is a variable 14.74 – 20.74%.

Get double Membership Rewards® points on everyday company purchases like office supplies or client dinners for the first $50,000 spent annually. Get 1 point per dollar afterwards.

You will need great to outstanding credit scores to qualify.

Find it here: https://creditcard.americanexpress.com/d/bluebusinessplus-credit-card/

American Express® Blue Business Cash Card

Also have a look at the American Express® Blue Business Cash Card. Note: the American Express® Blue Business Cash Card is identical to the Blue Business® Plus Credit Card from American Express. But its rewards are in cash instead of points.

Get 2% cash back on all eligible purchases on up to $50,000 per calendar year. After that get 1%.

It has no yearly fee. There is a 0% introductory APR for the first one year. Afterwards, the APR is a variable 14.74 – 20.74%.

You will need good to excellent credit scores to qualify.

Find it here: https://creditcard.americanexpress.com/d/business-bluecash-credit-card/

Terrific Cards for Cash Back

Flat-Rate Rewards

Capital One ® Spark® Cash for Business

Check out the Capital One® Spark® Cash for Business. It has an introductory $0 yearly fee for the first year. After that, this card costs $95 each year. There is no introductory APR deal. The regular APR is a variable 18.49%.

You can get a $500 one-time cash bonus after spending $4,000 in the initial three months from account opening. Get unlimited 2% cash back. Redeem at any time without minimums.

You will need great to excellent credit scores to qualify.

Find it here: https://www.capitalone.com/small-business/credit-cards/spark-cash/

Flat-Rate Rewards and No Yearly Cost

Discover it® Business Card

Check out the Discover it® Business Card. It has no annual fee. There is an introductory APR of 0% on purchases for 12 months. After that the regular APR is a variable 14.49 – 22.49%.

Get unlimited 1.5% cash back on all purchases, with no category restrictions or bonuses. They double the 1.5% Cashback Match™ at the end of the first year. There is no minimal spend requirement.

You can download transactions| quickly to Quicken, QuickBooks, and Excel. Note: you will need great to superb credit to receive this card.

https://www.discover.com/credit-cards/business/

Bonus Categories

Ink Business Cash℠ Credit Card

Take a look at the Ink Business Cash℠ Credit Card. It has no annual fee. There is a 0% introductory APR for the first year. After that, the APR is a variable 14.74 – 20.74%. You can get a $500 one-time cash bonus after spending $3,000 in the initial 3 months from account opening.

You can get 5% cash back on the initial $25,000 spent in combined purchases at office supply stores and on net, cable, and phone services each account anniversary year.

Get 2% cash back on the first $25,000 spent in combined purchases at gasoline stations and restaurants each account anniversary year. Get 1% cash back on all other purchases. There is no limit to the amount you can earn.

You will need superb credit to get approval for this card.

Find it here: https://creditcards.chase.com/business-credit-cards/ink/cash?iCELL=61GF

Boosted Cash Back Categories

Bank of America® Business Advantage Cash Rewards MasterCard® credit card

Take a look at the Bank of America® Business Advantage Cash Rewards MasterCard® credit card. Get an 0% introductory APR for the first 9 billing cycles of the account. Afterwards, the APR is 13.74% – 23.74% variable. There is no yearly fee. You can get a $300 statement credit offer.

Get 3% cash back in the category of your choice. So these are gasoline stations (default), office supply stores, travel, TV/telecom & wireless, computer services or business consulting services. Earn 2% cash back on dining. So this is for the initial $50,000 in combined choice category/dining purchases each calendar year. After that get 1% after, with no limits.

You will need outstanding credit scores to qualify.

Find it here: https://promo.bankofamerica.com/smallbusinesscards2/

Flexible Financing Credit Cards – Take A Look at Your Alternatives!

The Plum Card® from American Express

Check out the Plum Card® from American Express. It has an introductory yearly fee of $0 for the first year. Afterwards, pay $250 per year.

Get a 1.5% early pay discount cash back bonus when you pay within 10 days. You can take up to 60 days to pay without interest when you pay the minimum due by the payment due date.

You will need good to exceptional credit scores to qualify.

Find it here: https://creditcard.americanexpress.com/d/the-plum-card-business-charge-card/

Unbeatable Cards for Jackpot Rewards That Never Expire

Capital One® Spark® Cash Select for Business

Have a look at the Capital One® Spark® Cash Select for Business. It has no annual fee. You can get 1.5% cash back on every purchase. There is no limit on the cash back you can get. Also earn a one-time $200 cash bonus when you spend $3,000 on purchases in the first 3 months. Rewards never expire.

Pay a 0% introductory APR for 9 months. Then pay 14.49% – 22.49% variable APR afterwards.

You will need good to outstanding credit to qualify.

Find it here: https://www.capitalone.com/small-business/credit-cards/spark-cash-select/

Recession Cycle

Establish business credit fast and beat the recession with our research-backed guide to 12 business credit cards and lines.

The Recession Cycle Funding for You

Your absolute best business credit cards hinge on your credit history and scores.

Only you can pick which features you want and need. So be sure to do your homework. What is outstanding for you could be catastrophic for somebody else.

And, as always, make sure to establish credit in the recommended order for the best, fastest benefits.

Recession Cycle Funding: Takeaways

Raising money during a recession cycle might feel a little overwhelming. It takes time to build up funds to start a new business. But you don’t have to feel you have to use your equity to fund your new business. There are so many other ways you can find money to help your business grow. Don’t get focused on making quick money. Think about the long-term growth of your company, and how your decisions today will affect its finances in the future. Develop a plan to find money from different resources before using company equity. And yes, you can even do this during a recession cycle.

The post Six Ways to Creatively Fund a Startup Without Using Equity During a Recession Cycle appeared first on Credit Suite.

Small Business Fundraising: Let Me Count the Ways

Most people only think of loans when they think about funding a business.  Financing is for sure the most common way to do it, but not all financing comes in the form a traditional term loan.  Furthermore, there are options that are not even considered financing because you do not have to repay the funds. The truth is, small business fundraising may not look the way you expect it to.

Small Business Fundraising Can Happen in More Ways than You Thin

Small business fundraising can include loans, but it can also include investors, grants, and more.  Beyond that, if you do go with financing of some sort, there are other options out there besides traditional banks and credit unions. 

Demolish your funding problems with 27 killer ways to get cash for your business. 

Small Business Fundraising: Loans

When you think of loans you probably think of traditional loans.  These are the most popular, but they are not an option for everyone.  There are other types as well. 

Traditional Loans 

These are loans from traditional banks and credit unions.  As a business, your business credit score can help you get some types of funds even if your personal score isn’t awesome.  That isn’t necessarily the case with this type of lending however. 

With a traditional lender term loan, you are almost always going to have to give a personal guarantee.  This means, personal credit will likely weigh heavy on their decision.  If your personal credit score isn’t in order, you’ll probably have trouble.

How high does your credit score have to be?  Typically, if you have at least a 750 you are in pretty good shape. Sometimes you can get approval with a score of 700+, but the terms will not be as favorable. 

If you have awesome business credit, your lender might be more flexible. However, your personal credit score will still play a large role when it comes to terms and interest rate. 

These are the most popular choice for small business fundraising because they typically have the best rates and terms. However, they are also the hardest to get.

SBA Loans

SBA loans are traditional bank loans, but they have a guarantee from the federal government. The Small Business Administration, works with lenders to offer small businesses financing solutions that owners may not be eligible for based on their own credit history. Because the government is offering a guarantee, lenders are able to be more flexible when it comes to the owner’s personal credit score. 

In fact, it is possible to get an SBA microloan with a personal credit score between 620 and 640. These are very small loans, up to $50,000.  They may also require personal collateral. 

The trade-off with SBA loans is that the application process is lengthy. There is a ton of paperwork connected with these types of loans. 

Here are some of the most popular SBA loan programs.

7(a) Loans 

These are federally funded term loans up to $5 million. The funds can be used for expansion, purchasing equipment, working capital and more. Banks, credit unions, and other specialized institutions in partnership with the SBA process these loans and disburse the funds. 

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

504 Loans 

These loans are also available up to $5 million.  Funds can buy machinery, facilities, or land. They are generally used for expansion, and private sector lenders or nonprofits process and disburse the money. They work well for commercial real estate purchases especially. 

Microloans 

Microloans are available in amounts up to $50,000. They work for starting a business, purchasing equipment, buying inventory, or for working capital. Community based nonprofits handle the administration of these programs as intermediaries.  Unlike most other SBA loan programs, financing comes directly from the Small Business Administration. 

Demolish your funding problems with 27 killer ways to get cash for your business.  

SBA Express loans 

These loans max out at $350,000.  The turnaround for express loans is much faster, with the SBA taking up to 36 hours to give a decision. The application process  is shorter also.  

SBA CAPLine 

There are 4 distinct CAPline programs.  The main difference between each is the types of  expenses they can fund. Each of them carries a maximum amount of $5 million and an interest rate that ranges from 7% to 10%. Funding can take 45 to 90 days. 

The four different programs are: 

  •  Seasonal CAPLines 

Financing for businesses preparing for a seasonal increase in sales.

  • Contract CAPLines 

Financing for businesses that need funding to fill a contract.

  • Builder’s CAPLines 

Financing for businesses taking on a real estate or construction project.

  • Working capital CAPLines 

Financing for businesses that are struggling with a short-term slump in sales.

SBA Community Advantage Loans 

This is a pilot program set to either expire or extend in 2020. It’s designed to promote economic growth in underserved areas and markets.  Those that make decisions about debt approval look over factors such as poor credit or low revenue if the business has the potential to stimulate the economy or create jobs in underserved areas. 

Private Non-Traditional Loans

These are loans from lenders other than traditional banks and credit unions that offer terms loans.  Usually they operate online.  The difference between these and traditional lenders is that the loans have looser approval requirements and a much faster application process. Most often you can simply apply online, get approval in as little as 24 hours, and the funds are in your account within 24 to 48 hours after approval. Here are just a few options for this type of small business fundraising.

Funding Circle

If you are looking for a  low APR, go with Funding Circle.  They have fixed rate term loans and require a credit score of 620 or above.  There is no minimum revenue requirement.  However, they do require you to be in business for at least 2 years.  

OnDeck

OnDeck offers lines of credit and term loans with fixed interest rates.  You can get up to $500,000 with a term loan.  The minimum FICO they require is 600.  In addition, you must have $100,000 minimum annual revenue and be in business for at least one year.  

Rapid Finance

With a large selection of financing products that includes term loans, Rapid Finance can be a great option for larger amounts.  In addition to term loans, they offer bridge loans, healthcare cash advances, and lines of credit.  Terms are from three to six months.  Amounts range from $5,000 to $1,000,000. Unfortunately, they do not make their minimum credit score readily available. Still, you can use their quote tool. It will give you an idea of what you qualify for. 

StreetShares

StreetShares offers invoice financing, term loans, and lines of credit.  There is only a one year time in business requirement.  Also, they require less minimum annual revenue than the others at only $25,000.  The minimum credit score is 600.  

Small Business Fundraising: Other FinancingSmall Biz Fundraising Credit Suite

In addition to term loans, there are other types of financing available for small business fundraising.  

Lines of Credit

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

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

Unlike credit cards, there are no cash back rewards or loyalty points with a line of credit.  As a result,  some business owners prefer business credit cards despite typically higher rates.   

Invoice Factoring

If you are an established business with accounts receivable, you have invoice factoring as an option. This is where the lender buys your outstanding invoices at a premium, and then collects the full amount themselves. You get cash right away, without waiting for your customers to pay the invoices.

This is a good option if you need cash fast, or if you do not qualify for other types of funds. The interest rate varies based on hold old the invoices are.  A merchant cash advance is a similar option, in which a lender lends cash based on average daily credit card sales. Repayment is made daily credit card sales as well. 

Small Business Fundraising: Crowdfunding

Crowdfunding is a newer option for finding investors. While the average Joe that wants to start a business needs funding, it is not always possible to find one or two large investors. With crowdfunding, you can literally have a “crowd” of investors fund your business $5 and $10 at the time. 

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

Kickstarter requires a preset goal, and you do not receive your funds until you reach your goal. For example, if you set a goal of $20,000 when you start your campaign, you will not receive any money that investors offer up until you reach that $20,000. 

Indiegogo also requires a goal.  In contrast to Kickstarter, they offer the option to receive funds as you go if you prefer. They also have an option called InDemand. This program allows you to continue raising funds after your original campaign is over without starting a whole new campaign. It is more of an extension of the first one.

There are other crowdfunding sites out there as well. Different ones work better for certain businesses and vendors. To determine which one you might have the most luck with, you will need to do some research. Keep in mind your type of business and the specific business each one appeals too. 

Small Business Fundraising: Angel Investors

These are informal investors that generally invest at the start of a company. They typically receive equity in exchange.

Demolish your funding problems with 27 killer ways to get cash for your business. 

Angel investing is risky.   If a startup fails early on, investors will lose their investments completely. As a result, professionals will look for a defined exit strategy, acquisitions, or initial public offerings (IPOs).

The best way to find angel investors is to ask around. You can also try an angel investors website or network. 

Small Business Fundraising: Grants

While grants are less commonly available than other options, they are more common that you probably think. Typically, they are offered by professional organizations. There are some government grants available also. There is stiff competition, but they are definitely worth a shot if you think you may qualify. 

While requirements vary from grant to grant, and most are only awarded to a certain number of recipients, they are definitely worth exploring.  This is especially true if you fall into one of these basic categories. 

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

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

Small Business Fundraising: Explore All Your Options

When you need to think about small business fundraising, be sure to consider all your options.  It may be that traditional loans will work best for you, but that may not be the case at all. Even if you do qualify for loans, why not consider grants and investors as well.  It’s free money. Any money you can get that will reduce the amount of debt you have to take on is a good thing. 

If you want to expand your opportunities even further, work on the overall fundability of your business. There are things affecting it that you probably don’t even realize can make a difference.  There is a lot more to it than just your credit score.  

How you set up your business, your business phone number, and even past speeding tickets can indirectly affect fundability.  If you work to reduce negative impact and increase positive impact on fundability, you can open the door to even more small business fundraising opportunities. 

The post Small Business Fundraising: Let Me Count the Ways appeared first on Credit Suite.

11 Proven Ways to Increase Dwell Time

Are you doing everything you can to rank for a specific keyword? Are you struggling to get on even the first page, much less the top?

Here’s the thing: there’s a good chance you are making a ton of mistakes that sends users back to the SERP.

After developing hundreds of high-ranking pages, I’m here to show you the role dwell time plays in ranking and how you can increase it.

Before I share 11 strategies to increase your dwell time, let’s look at what dwell time is and why it matters.

What is Dwell Time?

Dwell time is the length of time a user spends on your page before returning to SERP. Most SEOs consider dwell time to be a ranking signal, though Google hasn’t confirmed it.

As an example, let’s say you want to establish a better morning routine. So you Google “morning rituals.”

SERP screenshot example, how to increase dwell time

You click on the first result. But the page is hard to navigate, and the content’s not useful.

Within a few seconds, you hit back on your browser and click on the second result.

The second page has excellent content, and the website is easy to scroll through. You end up spending six minutes there and then go back to the SERP.

Now, if other people also spend more time on the second page, Google may factor that in their page rankings and demote the current first result. That will bump the #2 result up to #1.

Although Google hasn’t gone on the record to say dwell time is a ranking factor, the closest thing we’ve got so far is a Google engineer sharing this tidbit:

“So when search was invented… they wrote heuristics that had figure out what the relationship between a search and the best page for that search was. And those heuristics worked pretty well and continue to work pretty well.

But Google is now integrating machine learning into that process. So then training models on when someone clicks on a page and stays on that page, when they go back or when they and trying to figure out exactly on that relationship.”

Here’s another strong indicator that dwell time is at least a mild ranking factor: Google used to let you hide specific websites on the SERP after visiting them.

If you bounce fast from a page, you could block all results from a domain – because Google knew that if people left a page quickly, there was a good chance they didn’t like the content.

Over time, that feature was dropped, likely as Google better understood which sites were most useful.

Dwell Time Versus Time On Page

You may have heard of time on page, which is the amount of time a user is on a page until they go anywhere else.

dwell time versus time on page metrics for SEO

Time on page is based on two clicks:

1. A user visits your website.

2. The user then clicks on another page on your website.

time on page versus dwell time in SEO

The big difference between time on page and dwell time is whether or not the visitor went to another page on your website. With time on page, they have to visit a second page on your website for Google Analytics to take the session into account.

If a user only visits one page on your website, Google Analytics shows time on page for the session as zero.

Here are 11 strategies to increase your pages’ dwell time.

Hook Readers In

You have one shot at making a great first impression from the SERP. One web usability study found the first 10 seconds of a page visit are critical for determining if a visitor stays or goes.

Are your blog post introductions reeling in readers? To encourage dwell time, each introduction needs to be interesting and relevant to your target keywords.

Take this example from a recent post about spying on your competitor’s SEO.

competitor research example, how to increase your dwell time in SEO

The open-ended question is the hook. The follow-up sentence is brief and touches on a universal pain point. It also acts as a transition guiding the reader to the thesis.

This hook isn’t like a traditional university paper thesis, though. It’s a teaser of what readers can expect in your article.  

Divide Into Snackable Sections

Your introduction gets site visitors engaged and excited to continue reading.

Use H2’s to break content into sections, so it’s easy to read. It also makes it easier for folks to go back and reference your content later.

A good example is this article on defining your target audience.

Another way to make your content easier to consume is to turn succinct lists intobullet-pointt format. These make content easier to read and help users find the meat of the content faster.

Another way to engage readers is to use a ton of screenshots and other visuals to illustrate your points.

Create a Multimedia Experience

Infographics aren’t just great for referral traffic. Visuals can also help keep your site visitors engaged.

For example, check out this content layering infographic. It makes a complex topic easier to digest and understand.

Image source

Here are a few tools you can use to create visuals for your content quickly:

Video can also encourage visitors to stick around. 80% of marketers said in a Wyzowl survey video increased the dwell time on their website. Embedding videos in your content can too.

Here are a few different strategies to increase the effectiveness of video:

  • Use an eye-catching video thumbnail so users will click and watch.
  • Customer testimonial videos and product videos can be a powerful way to push conversions.
  • Embed video explaining a specific strategy or concept you touch on within your content. Use the video for diving deeper into the strategy.
  • Share a video from a popular YouTube channel in your content. Then reach out to the producers, as there may be opportunities for social referral traffic.
  • Insert a video containing information with related content.

Match Search Intent

If you’re looking to rank #1 for a keyword on Google, you need to be the most relevant query. In other words, the content on your page needs to reflect a searcher’s intent, the reason for the search.

Let’s say you’re trying to rank for “best spa” in NYC.

Spas in NYC example in how to increase dwell time

Google knows the most relevant results from millions of searchers who have either bounced or stuck around pages. In this case, spa options based on a searcher’s location and the best spas worldwide are the top results.  

A landing page spotlighting a specific spa won’t work. However, charts showing different destination spa’s amenities and price comparison tools may be effective.  

The four most common types of search intent are:

Information

A searcher is looking for general information (“How can I interpret my dreams?”)  or an answer to a specific question (“How old is Elon Musk?”)

More examples of information searches:

  • “When is NBA draft”
  • “LAX Terminal 4 to 5 directions”
  • “Howard Schultz”

Brand

The searcher is looking for a specific website or brand. They may forget the URL or find it easier to Google a brand than type out the site’s address.

Examples of brand searches:

  • “Instagram login”
  • “Ubersuggest”
  • “Neil Patel guide to Local SEO”

Inquiry

With an inquiry search, a searcher shows interest in an item or solution but is still researching and comparing their options.

Examples of inquiry searches:

  • “best spas”
  • “United versus Delta”
  • “Ubersuggest reviews”

Transaction

In a transaction search, the searcher is ready to buy. They are either looking for the best price or trying to find a specific item or service.

Examples of transaction searches:

  • “Chipotles near me”
  • “buy iPad pro”
  • “athletic greens coupon”

Now let’s say a spa decides to target “corporate wellness retreats.” Here are the steps they can take to do competitive research on Ubersuggest:

First, review search volume and keyword difficulty under “Keyword Ideas.”

keyword ideas in how to increase your dwell time

Next, analyze the top SERP results for that keyword.

keyword overview example on how to increase dwell time

Are the top results product pages, blog posts, or another format? For a search of “corporate wellness retreat,” we can see most of the top 10 results are landing pages.

As you review each page, take notes on the page’s content to see how you can improve.

You can also review on-page optimizations, such as the use of keywords in headlines and subheadings and any other factors encouraging dwell time.

Then review the top results off-page SEO strategy. Copy the URL of any result into Ubersuggest and select overview to see more about the domain, including:

  • The number of backlinks pointing to their domain
  • Domain score; the higher the number, the more authoritative a site is, and the higher it will rank in Google
  • The number of unique domains linking back to their domain
domain overview example in How to increase dwell time

Craft In-depth Content

In most cases, longer content gets more traffic. Since it takes more time to read, more robust content boosts dwell time.

Help encourage visitors to stick around by providing the go-to resource for a specific query using the Skyscraper technique (a term initially coined by Brian Dean of Backlinko). 

All skyscraper content has one or more of the following elements:

  • Useful: Does it provide step-by-step instructions where possible? Are you providing your reader with clear takeaways?
  • Entertaining: Does your content draw in your reader either through a compelling narrative, hook, or funny bits?
  • User Experience: Is your content easy to navigate and skim? Does content logically flow? Is the content accessible in tone and style? In particular, it doesn’t read like a post-graduate paper or use larger words than needed.

Each of the eight steps in this article on monetizing your blog shows you don’t need a massive amount of traffic to start making money. Readers can also see a ton of examples where they can draw inspiration.

how to increase dwell time through great content

By creating thorough content it ranks #1 for highly competitive keywords and readers spend an average of over 4 minutes on the page.

Enable Comments

Open up your blog to questions and discussion in the comments. Just like here, where I try to reply to all comments.

People want to read others’ comments. Other readers likely have the same questions and can contain additional valuable responses from the author.

As people read or add in their own comments, their dwell time goes up.

Plus, you can get a ton of great feedback with your site visitors, like the comment below.

comment example

Create Interactive Elements

Interactive content not only keeps users on your page longer, it can also improve the user experience.

Quizzes, polls, downloadable assessments, and calculators are all features that can help site visitors work through the specific issue they came to your site to solve.

Establish Next Steps

If someone wants to learn more about a specific topic you’ve covered, make it easy to access with an internal link.

Internal links not only help keep users on your site, but are another key feature for on-page optimization.

Your internal links can also guide users to take the next step along your inbound funnel.

As you may know, a pillar page is a central piece on a website covering a topic in-depth.  

Let’s say you’re looking to target a keyword with significant volume like “camper living.”

pillar page research, how to increase dwell time

Once you create a pillar page targeting the keyword, you may develop a blog post reviewing an RV essential like a mobile hotspot. Then link to this piece on your pillar page.

Increase Your Site Speed

Part of making a great first impression — and preventing people from hitting the back button on your site — is ensuring your pages load fast.

47% of consumers expect a page to load in two seconds or less.

A few tools to help speed up your site:

Mobile First

More than half of worldwide traffic comes from mobile devices, which means you need to provide a mobile-first experience on your website.

What does that mean? Your site needs to perform well on mobile devices, not just desktop.

Here’s how you can double-check your pages are optimized for mobile:

  1. Visit Google Search Console.
  2. Click “Mobile Usability.”
  3. If any errors show in Search Console, click the error for details on how to fix the issue on your site.

Google’s support documentation that is linked in the results also provides more info on specific errors.

Level Up the Copy

You can have the best content but still fail to resonate with your readers.

Are all the sentences in your content the same length? Do paragraphs begin the same way? It will get boring.

Copywriting techniques are the ace up your sleeve. Here are a few strategies to keep your writing engaging you can take from copy masters:

Make it simple. Make it memorable. Make it inviting to look at. Make it fun to read. 

-Leo Burnett

Can you say the same thing in fewer words? Are their compelling stories or statistics you can use to draw in a reader?

Copy is a direct conversation with the consumer.

– Shirley Polykoff

Keep the conversation going by mirroring your customers. Not sure what your audience is thinking? Survey your current and existing customers.

Have sections where readers may get overwhelmed or bored? Use Bucket Brigades, a term penned by Brian Dean. These phrases that help bridge two sentences and lead readers through content.

These phrases are instant attention grabbers and keep readers from bouncing:

  • Pro-tip:
  • Here’s the deal:
  • Now:
  • What’s the bottom line?
  • You might be wondering:
  • This is crazy:
  • It gets better/worse:
  • But here’s the kicker:
  • Want to know the best part?

Conclusion

All of these techniques can help increase dwell time. But let your rankings and analytics reveal the most effective elements for your content. Start at the top of the list and try each strategy. For example, you might find that your users respond to interactive elements or that they prefer lists.

Once you see what works, you can fine-tune your strategy.

Which strategy will you try first?

The post 11 Proven Ways to Increase Dwell Time appeared first on Neil Patel.

Brutal! 5 Ways You Can Get Denied for a Business Loan in a Recession –Your Banker Won’t Tell You About These!

Need a business loan in a recession? Beyond the SBA’s PPP program, you should also be looking at lenders outside the SBA’s purview. And you need to make it easier for them to approve your application.

We Smuggled out these Secrets: The 5 Ways You Can Get Denied for a Business Loan in a Recession – Your Banker Will Never Tell You About These

Did you know there are 5 ways you can get denied for a business loan in a recession? And let’s face it, your banker won’t tell you about ANY of them. It is, unfortunately, pretty easy to get a bank loan denial. This is particularly true in recessions. Bank loan money is always tighter.

And not everyone knows how it happens. So read on, and learn the secrets!

A Look at Bank Credit vs. Business Credit

Before going any further, do you know the difference between bank credit and business credit? Business credit is the full and complete amount of money that your small business can get from creditors. This includes leasing companies. It is also suppliers, under what’s called vendor credit.

Bank credit is the full amount of borrowing capacity which a small business can get from the banking system only.

What are Bank Credit Scores?

Even during a recession, a small business can get more business credit quickly, so long as it has two things.

One, it must have at least one bank reference. And two, it has to have an average daily account balance of at least $10,000. And that has to be for the most recent three month time period.

This set up will yield a bank rating of a Low-5. And that means it is an Adjusted Debt Balance of from $5,000 to $30,000.

Lower Ratings

A lower rating, like a High-4, or balance of $7,000 to $9,999 will not necessarily reject the small business’s loan application. However, it will slow down the approval process (in a recession, it could grind to a screeching halt). And a Low-5, we know, is far more likely to be necessary for an approval.

A bank credit rating is the average minimum balance a company maintains in a business bank account over a three month long period.

Hence a $10,000 balance will rate as a Low-5. And a $5,000 balance will rate as a Mid-4. By the same token, a $999 balance will rate as a High-3, etc.

A small business’s chief goal should always be to maintain a minimum Low-5 bank rating. So that means an average $10,000 balance. And they will need to do so for at least three months.

This is because, without at least a Low-5 rating, the majority of banks will operate under the assumption that the business has little to no ability to repay a loan or a business line of credit.

But here is one thing to keep in mind. You will never actually see this number. The bank will just keep this number in its back pocket.

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

The Rating Ranges

The numbers work out to the following ranges:

  • High-5 – account balance of $70,000 to $99,999
  • Mid-5 –$40,000 to $69,999
  • Low-5 –$10,000 to $39,000 (your small business needs this level bank score or better to get loans)
  • High-4 – $7,000 to 9,999
  • Mid-4 – $4,000 to $6,999
  • Low-4 – $1,000 to $-3,999

Bank Credit Problems that can Get Your Business a Denial

There are several ways to get a denial when you want a business loan. Here are the top five.

#1 Way You Can Get Denied for a Business Loan in a Recession

You’ll get a denial if you don’t maintain a minimum balance for at least three months. Since every bank credit cycle is based on the previous three months, a continually seesawing balance should damage your bank credit.

How You Can Fix It

So, what is the remedy? Keep cash in your account, by any means you can. This can be tough in a recession, but it is not impossible.

#2 Way You Can Get Denied for a Business Loan in a Recession

Looking to get a denial? Then don’t bother to assure that your business bank accounts are reported exactly the same way all of your business records are. And they would also have to be with the exact same physical address and phone number.

Sow confusion in this area by changing one and not another, or not correcting an error if there is one. And use a post office box!

Wrong.

How You Can Fix It

So, what is the remedy? Keep your records consistent. Copy and paste whatever you can. Do not chance it by retyping. And as for your location, if you do not want or need a physical office, go with a virtual one. We particularly like Regus and Alliance.

Can’t find any virtual office space nearby or within your budget? Then talk to other area business owners. And find out who they work with.

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

#3 Way You Can Get Denied for a Business Loan in a Recession

To go along with #2, you’ll get a denial if you don’t keep consistent, congruent records. That is, to make sure that every credit agency and trade credit vendor, every record keeper, lists the business name and address the exact same way.

These include record keepers for financial records, income tax, web addresses and e-mail addresses, directory assistance, etc.

No lender is going to stop to consider all of the ways that a business might be listed. That will not happen when they look into the business’ creditworthiness.

Therefore, if they are unable to find what they need easily, they will just deny the application. Or your carefully cultivated credit won’t report to the business credit reporting agencies. So if you want a denial, make sure your records are a mess!

No. Don’t do this.

How You Can Fix It

So, what is the remedy? Again, keep your records as consistent as possible. And if you need to hire someone to help you with this, then be sure to do so. It will be well worth it to get some peace of mind this area.

#4 Way You Can Get Denied for a Business Loan in a Recession

This one happens if you never manage your bank account responsibly. It means that your small business should not avoid writing non-sufficient funds (NSF) checks at all costs.

NSFs will decimate bank ratings.

Non-sufficient-funds checks are something which no business can afford to let happen.

But balancing checkbooks and accounts is so dull anyway. And you’ve got enough money without even making sure, right?

Wrong!

How You Can Fix It

So, what is the remedy? Carefully balance your books and make sure you have enough funds for your transactions.

So this might mean you hire someone with a bookkeeping or accounting background to help you. And that’s a great idea!

Beyond taking care of your business bank accounts, such an employee should be able to help you with the tax implications of pretty much everything that you do. All businesses will have to pay taxes. There are no exceptions to this rule! So why not legally and ethically pay less?

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

#5 Way You Can Get Denied for a Business Loan in a Recession

To add to #4, you’ll get a denial if you don’t add overdraft protection to your bank account as soon as possible, in order to avoid NSFs. But why bother thinking ahead or planning for the future? Everything is going to be great forever, right?

Wrong.

How You Can Fix It

So, what is the remedy? Overdraft protection is a valuable feature. So make sure you can get it. That might mean going to a bank that isn’t right around the corner from you. Or it might mean maintaining a specific minimum balance.

And if it does, then that’s even better. You’ll kill two birds with one stone and also address #1, above.

Bonus: #6 Way You Can Get Denied for a Business Loan in a Recession

Want to get a denial? Then don’t let your business show a positive cash flow. A positive free cash flow is the amount of revenue left over after your company has paid all of its expenses.

So if you really want to get a loan denial from your bank credit, go ahead and treat yourself. And buy whatever’s expensive for your business. And make sure your expenses outstrip your profits.

Because doesn’t every factory deserve plush carpeting in the loading dock?

Wrong.COVID-19 and biz lending in a Recession Credit Suite

How You Can Fix It

So, what is the remedy? The cash coming in and leaving your company’s bank account should reflect a positive free cash flow.

When an account shows a positive cash flow it indicates your business is generating more revenue than is used to run the company. That means the bank will feel your business can pay its bills.

Can’t afford to add a lot at a time? That’s okay – long as you are adding something.

In a recession, it’s obviously harder to keep adding to a business bank account. Just … try.

Bonus: #7 Way You Can Get Denied for a Business Loan in a Recession

Banks are highly motivated to lend to a business with consistent deposits. And a business owner must also make regular deposits. So this is in order to maintain a positive bank rating.

The business owner must make a lot of consistent deposits, more than the withdrawals they are making. This is the best way to have and maintain a good bank rating.

If they can do that, then they will have a good bank credit score.

But consistency is the hobgoblin of little minds, right?

Hence depositing whatever, whenever has got to be the best way to handle your company’s bank deposits, right?

Wrong.

How You Can Fix It

So, what is the remedy? Consistency! Showing your bank is dependably and regularly adding funds will go a long way to assuring your bank that your business is credible.

And it’ll assure them that if they loan you money, that you’ll be able to pay them back.

And you’ll maintain your ethics and do so.

There are Many Ways You Can Get Denied for a Business Loan in a Recession

Yes, you can wreck your bank credit these five seven ways. So don’t! If you wreck your bank credit, then you may as well throw in the towel. And in a recession, you just plain can’t afford that.

This is because you’ll also tank your business. And no one wants to see that happen.

Particularly now, in the age of COVID-19, you need to help your business in any way you can.

The post Brutal! 5 Ways You Can Get Denied for a Business Loan in a Recession –Your Banker Won’t Tell You About These! appeared first on Credit Suite.

Brutal! 5 Ways You Can Get Denied for a Business Loan in a Recession –Your Banker Won’t Tell You About These!

Need a business loan in a recession? Beyond the SBA’s PPP program, you should also be looking at lenders outside the SBA’s purview. And you need to make it easier for them to approve your application. We Smuggled out these Secrets: The 5 Ways You Can Get Denied for a Business Loan in a Recession … Continue reading Brutal! 5 Ways You Can Get Denied for a Business Loan in a Recession –Your Banker Won’t Tell You About These!

9 Ways to Improve Organic Reach and Beat the YouTube Algorithm

As the most-viewed site globally, YouTube is a must-visit destination for marketers and content creators looking to increase audience reach.

While it is possible to optimize YouTube SEO to score top results, without an understanding of the YouTube algorithm, SEO alone won’t manifest videos on a potential viewer’s suggested video list.

YouTube’s product chief underlined the reality of the impact of suggested-to-watch videos in an interview, noting 70% of a user’s time spent on the platform was dictated by the company’s suggested video algorithm.

70%. That number is huge.

To truly execute a successful YouTube marketing strategy, improve organic reach, and take advantage of that massive percentage, you need in-depth familiarity with the unique YouTube algorithm. Here are nine ways to increase your organic reach on YouTube.

The YouTube Algorithm’s Evolution

What began as a venture capital-funded technology startup in 2006 is now our go-to spot for all things video.

Although YouTube itself has undergone significant changes over the past fifteen years, its algorithm has, by far, been its most dynamic feature.

Before 2012, YouTube charted video success by the number of views alone, regardless of the length of viewing. This singular YouTube algorithm led to a profusion of clickbait videos that relied upon misrepresentative headlines and thumbnails to earn views, with most audience members jumping ship immediately.

Later the same year, YouTube began measuring success through view duration, a metric that rewarded longer-viewed videos with increased search promotion.

Today, we still see the roots of the platform’s infancy in the current YouTube algorithm, which draws heavily on view duration as a component of a video’s ranking.

How Does the YouTube Algorithm Work?

While YouTube’s stated mission is to give everyone a voice and a window to explore the world, one of YouTube’s lower-ranking goals is to engage viewers for extended amounts of time, maximizing the number of advertisement interactions.

Why does this secondary goal matter? Because YouTube suggests videos that satisfy this goal of increased exposure to advertiser content.

YouTube uses an algorithm based on three main qualifiers: relevance, engagement, and quality.

To benchmark relevance, YouTube explores the pairing of title, description, tags, and content with an individualized search query.

Engagement aggregates the number of responses from users, including watch time, engagement, and frequency.

Quality rating is determined by a channel’s ability to demonstrate trustable authority.

In addition to these three qualifiers, YouTube’s algorithm also draws on a user’s historical views and a video-specific assigned score, one that weighs both novelty and frequency of channel uploads, among other attributes.

This combination of statistics allows YouTube to recommend videos that speak directly to a viewer’s interests, continuing a narratively static viewing material chain.

These videos will appear in six different locations on the YouTube platform:

  1. Search results
  2.  Recommended Streams (as shown in the screenshot on the right side in the below screenshot)
  3. Notifications
  4. Channel Subscriptions
  5. Trending Streams
  6. YouTube Home Page
9 Ways to Improve Organic Reach via the YouTube Algorithm

Much like any search algorithm, YouTube’s ranking system is in constant flux, evolving and adapting in an ongoing attempt to better define and satisfy user engagement.

How do I Improve my Organic Reach on YouTube?

Armed with a concrete understanding of how the YouTube algorithm works, it’s time to break down how you can harness your newfound knowledge to increase your organic reach.

1. Keywords and Metadata

YouTube made it explicitly clear in their algorithm explanation that content-relevant keywords, descriptions, captions, and tags all matter when you’re optimizing videos for search. Make sure you do your keyword researching using a tool like Ubersuggest to make sure you’re mentioning terms users are looking for.

By writing compelling, keyword-rich titles and descriptions, you increase your chances of attracting audience members’ attention and increasing your video’s search visibility.

Check out this post if you need to brush up on SEO basics.

2. Optimized Description

The quote “you never get a second chance to make a first impression” is true of YouTube just as much as life.

Ensure audience engagement by crafting attention-getting copy that not only attracts your potential audience but also harnesses your keywords’ power.

9 Ways to Improve Organic Reach via the YouTube Algorithm -- video description optimization

YouTube slants toward the verbose, advocating long descriptions, so don’t be afraid to go the extra wordy mile with them.

Although your prospective viewer will only interact with the first few lines of the description unless they select the “show more” option, those few short lines are valuable real estate when it comes to attracting your audience.

3. Video Transcription

Closed captions not only help those with accessibility needs, but allows users to watch videos in silence.

To make the most of closed captions, upload self-created subtitles. By uploading these yourself, you ensure that, when these captions are indexed for search, they are more accurate than automatically-generated ones, in many cases.

4. Whole-Video Views

Because YouTube ranks videos by engagement, longer watch times mean more opportunities to earn the coveted suggested video inclusion.

If you’re struggling with viewer attrition rates, you’re going to want to tighten focus on your videos’ first few seconds and ensure you:

  • match the description with the first few seconds of video content, and
  • snag a viewer with an impossible-to-ignore hook.  

Don’t forget to study your audience retention graphs and pay attention to what those metrics are telling you.

These quick fixes help you further engage your audience, extending watch time, and earning your video a higher score via the YouTube algorithm.

5. Conversational Conclusions

Rather than simply ending your video, use various tactics to influence your audience’s next view.

By directing viewers to another video on your channel, you increase interaction and likelihood that they’ll return to interact with future content, both of which satisfy the YouTube algorithm’s engagement portion.

To direct your audience, use watermarks, end screens, and cards, all of which can be clicked and linked to your next video, ensuring continued viewing of your channel and content.   

6. Subscriptions

When viewers subscribe to your channel, you automatically increase your organic reach. To increase your number of subscribers, consistently create great content, videos viewers are dying to see.

While consistently creating great content may be easier said than done, it’s essential to building your channel. Create a channel trailer, reach out to influencers, and engage with all comments left on your videos.

If you’re looking for additional strategies to increase your subscribers, check out our YouTube Marketing Guide.

7. Serial Viewers

By crafting videos that continue a conversation, viewers are helpless to resist watching the next in the series.

To keep viewers on your channel, you can create playlists of videos with similar content: these are collections that will attract and sustain viewership.

8. Cross-Promote Content

Social channels are free advertising for your YouTube channel. Promote your videos on all your social accounts, website, and in your email marketing—anywhere you have an audience.

9 Ways to Improve Organic Reach via the YouTube Algorithm
An example of a recent YouTube video shared on this blog.

 You can also publish a blog post with the video and a summary or transcription.

9. Actionable Analytics

These numbers don’t just exist to make you feel good; they tell you what’s working well and when, and to identify who is watching what and when.

Conversely, these numbers also tell you what isn’t working, which is inarguably the more influential insight. By identifying what isn’t working, you can try new strategies and content, attempting to delight your audience and improve your reach through different approaches.

By digging deep into YouTube analytics, you can unearth realities about your videos and your audience, allowing you to tailor your creation process to suit the needs of the audience you’re trying to reach.

Conclusion

With over one billion hours of video watched per day on YouTube, it’s undeniable content creators and marketers need to take advantage of the platform to curate and grow their audiences.

By understanding how YouTube suggests videos, content creators and marketers can make their videos work harder and use its nuances to your benefit.

How you changed how you upload videos to satisfy the YouTube algorithm? 

The post 9 Ways to Improve Organic Reach and Beat the YouTube Algorithm appeared first on Neil Patel.

Top 10 Brilliant Ways to Find Recession Startup Funding

The COVID-19 pandemic caught the world by surprise and turned the economy on its head.  If you are a business trying to stay afloat during this time, we can help.  The Federal government has approved funding through  The CARES Act, including the Paycheck Protection Plan.  In addition, many states and local organizations are offering their own unique funding options.  If you are thinking of starting a business during this time, keep reading for recession startup funding options.

It is Possible to Find Recession Startup Funding, but You Have to Get Creative

During a recession, prices go up, employment goes down, and lenders tend to hold on to funds much tighter. This can make funding a startup very difficult.  The truth is, startup funding during a recession is not easy to come by.  In fact, many of the traditional option will not work for the majority.  Recession startup funding takes a little more creativity.

You may even wonder why anyone would start a new business during a recession.  It’s all in your perspective.  The fact is, a recession could be the perfect opportunity to start your own business.

For example, if you are one of the many who find themselves unemployed during a recession, you are no longer tied down.  You have nothing to lose, and you can use that freedom to start brainstorming ways to find startup funding. The recession can actually be a catalyst! 

Despite the fact that there are many, many ways to get startup funding, it is still one of the greatest roadblocks to business ownership. It the first stumbling block most come across, and a recession makes it even bigger.  Recession startup funding can even seem like a mirage to some, but it is a real thing.  It just takes a little creativity to bring it out of hiding.

Some sources of funding for your startup will not work during a recession.  You need to know what your options are, what works for startup funding, and what will work best in your situation.  Then you can start looking.

Why Small Business Loans Do Not Always Work, Especially for Recession Startup Funding

With this startup funding source, recession is a huge issue.  It can work for some, but the traditional lenders tend to really hold on to their funds tighter during an economic downturn.  Since this is the source that most people immediately look to when they want to start a business, you can see why they get discouraged early on. They get turned down for traditional financing and just give up.  It can look like that is the end of the line.

Note as well: business lending tends to reduce if not dry up altogether during economic downturns.

There is more than one place to get a business loan however, and some people do not realize that.

SBA loans

These loans are still offered through traditional lenders such as banks and credit unions, but the federal government guarantees them. Since they are not completely reliant on the credit score of the borrower to reduce risk, the required credit score is slightly lower to qualify.

There is a lot of red tape related to applying for SBA loans however, and it does take a significant amount of time. If you do not qualify for traditional loans and do qualify for SBA loans however, it is definitely worth the time it takes.

If you are looking to traditional lenders for small business loans as recession startup funding, you will most likely need to consider SBA Loans. 

Learn business loan secrets with our free, sure-fire guide. We can help you get money, even during a recession.

Alternative Lenders: The Super Heroes of Recession Startup Funding

These are lenders that, as a general rule, operate online. Most of the time borrowers can apply online or over the phone and know about approval within minutes. Funds usually only take 24 to 48 hours to hit their account. Though this timeline does vary among lenders, the point is the process is fast and easy.

They also will sometimes take other factors into consideration if the credit score isn’t fabulous. Length of time in business and annual revenue can play a role as well. This makes it a more accessible source of funding for startups than traditional lenders for many. In addition, repayment terms are often more flexible and manageable.

These types of lenders are easier to work with even during a recession, though an economic downturn may slow them down some, recession startup funds from these lenders will still be more accessible to most than those from traditional banks and credit unions.

Downfall of Small Business Loans for Small Business Funding

Any small business loan is going to require strict repayment and interest.  This is harder to manage for anyone during a recession, so keep that in mind when forming your plan of action.

Credit Line Hybrid

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

What are the Qualifications?

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

If you do not meet all of the requirements, all is not lost. You can take on a credit partner that meets each of these requirements.  Many business owners work with a friend or relative to fund their business. If a relative or a friend meets all of these requirements, they can partner with you to allow you to tap into their credit to access funding.

The Downside?

If you don’t have a decent personal credit score, you’ll need to take on a credit partner.

Bootstrapping: The Ultimate in Recession Startup Funding

You know what bootstrapping is right? Pulling yourself up by your bootstraps and all of that. Basically, it’s when you figure out how to use what you already have as startup funding. This could include a number of options:

  • · Savings
  • · Retirement
  • · Credit cards
  • · Additional mortgage on a home
  • · Home equity line of credit

If you use retirement or savings, then you can rest easy knowing you don’t have to pay anyone back but yourself.  

The Downside to Using Your Own Funds for Recession Startup Funding

The downside to this option is either the loss of retirement or savings, or significant personal debt. If your business is successful, it is not a problem.  However, if your business does not do well, you could find yourself with some pretty major financial issues.

If you happen to have access to the amount of personal funds it would take to fund a startup during a recession, you are likely going to struggle with letting go of those funds.  It is a definite risk, especially in economically tough times.  However, it may be less of a risk than extensive debt.  It could also be the only option available.

Learn business loan secrets with our free, sure-fire guide. We can help you get money, even during a recession.

Crowdfunding

Crowdfunding is a much more viable option during economically stable times.  People that do not normally have disposable income may find that they have a little, and would like to help support a startup in return for a piece of the action.

This is still a possible source of recession startup funding, but much less likely.  There is simply less “extra” money in the pockets of consumers.  It is still worth a shot however.  

Popular Crowdfunding Platforms

There are a lot of crowdfunding platforms, but the two most popular are Kickstarter and Indiegogo. While they are very similar in most ways, they do differ in one major way.

For each, you have to set a funding goal. Kickstarter requires the campaign to reach the goal before you can access any of the funds. Indiegogo allows you to choose whether you want to receive funds as they come in, or wait until you reach the goal.

Indiegogo also offers an option to keep accepting funds on the same campaign even after you reach the original goal, rather than having to launch a new campaign to raise more funds.

The Downside of Crowdfunding

A very small percentage of crowdfunding campaigns are successful during the best of times. This shouldn’t deter anyone from trying, but there needs to be a realistic realization that a backup plan may be necessary, especially during a recession.

Small Business Grants

There are small business grants available if you qualify. Most often these are available to certain demographics including:

  • · Women
  • · Minorities
  • · Veterans
  • · Businesses in low-income areas

If you fall into one of these categories, a quick search could be very fruitful. There are grants available to those that do not fall into these categories, but they are not as common.

There are some grants offered by the government, but most often they are not awarded directly to businesses. Rather local governments and nonprofits disburse the funds. This may involve nothing more than accepting applications and awarding funds based on eligibility until money is gone.

Corporations and professional organizations also sometimes offer private grants as well based on their own application criteria and eligibility requirements.

During a recession there may actually be more options like this available, as the government is looking to help shore up the economy and increase circulation.

The Downside

Grants are an awesome source of recession startup funding if you can get one. However, they are highly competitive and therefore not guaranteed.

Do the Hustle: A Side Hustle Could Be the Answer to Recession Startup Funding

This one is a personal favorite. It could fall under bootstrapping, but in my opinion, it deserves its own category. While you are technically self-funding, this option requires you to work to raise funds rather than using funds you already have available or taking on more debt.

It also, in most cases, requires keeping your day job. When you use a side-hustle to create your own recession startup funding, the process is pretty slow. This is why most do not care to use this option. There are many benefits however.

Benefits of the Side Hustle

The first is that you can gauge the market a little. If you use your business idea as your side hustle, you can get a feel for what kind of demand might be out there. For example, if you want to open a bakery, you could bake breads, cookies, cupcakes, or whatever your specialty may be on the side and sell it. As you do so, you can save any funds you earn to go toward growing your business, and in the meantime, you are gaining a following and making a name for yourself and your product.

Your side hustle does not have to be your business idea at all. It can be as simple as cleaning or babysitting around your day job hours. The point is that you put every penny you earn back for funding your startup.

The Downside

This is a slower option, and some people do not want to wait that long. In addition, with unemployment down during a recession, it may be hard to find one job, let alone a second to use as a side hustle. Even simply things like cleaning houses and cutting grass may be hard, because a lot of people will be trying to save money by doing these things themselves.

Investors: One of the Oldest Forms of Startup Funding

One of the most obvious options, other than small business loans, is to find investors. This would be significant investment from one or a few different people, rather than small investments from a large number of people like in crowdfunding. In addition, investors most definitely invest in exchange for profit sharing, usually in proportion to their investment or a percentage they agree upon from the beginning.

The Downside

You give up some of your earnings. That’s not fun, but it could be worth it for the right investor.  Also, during a recession, investors tend to hold on to funds similar to the way lenders do.  It is a much greater risk to invest during a recession because of the economic uncertainty that exists.

Learn business loan secrets with our free, sure-fire guide. We can help you get money, even during a recession.

Partner Up: Two Heads are Better Than One 

You could also take on a partner. Sometimes the power of two is way stronger when it comes to startup funding. Where your credit score lacks, your partner’s may be strong. In most cases in life in general, two are better than one.

The Downside

Depending on how the partnership is structured, you may give up some of the managerial control.  Just like with investors, you will definitely give up a portion of the profits.

Contests: The Longest Shot Option for Recession Startup Funding

There are contests out there that offer startup funding as a prize. Think “Shark Tank.” You could try to get in on that specific contest, but there are smaller scale contests out there also. Similar to crowdfunding and grants, they are not guaranteed. They are certainly worth a shot however.

Some of them simply award prize money, while others, like “Shark Tank,” award investment funds. Either way, it is money you can use for startup funding that you do not have to pay back.

The Downside

Like grants and crowdfunding, winning a contest is not guaranteed.  It could end up being a lot of work for little to no payoff. During a recession, it is likely even fewer contests are available.  If you find one however, definitely take advantage.

Bartering

 It is difficult to fund a whole business by bartering, but in conjunction with one or more other sources of startup funding, it could be just the burst of energy you need to get you over the hurdle. Basically, it can make the funds you already have from other sources go further.  

What does this look like? Maybe you are great at keeping books, and you have a friend that is great at social media. You may offer to do his books in exchange for his creating and managing your online presence.

Maybe your buddy is adept at designing websites, or has a space that will work as a location for your business. You could offer equity in the business in exchange for a website or use of the space.

This is one source of recession startup funding that may actually help be more of a possibility during a recession than in a booming economy.  With people holding to funds tightly, they may be more likely to help you out for something in return other than money, as it will help them keep more money in their own pockets as well.

The Downside

There isn’t really a downside to this.  It may not fully fund a business, but it could definitely reduce the financial need and help you stretch the funds you do have further.  If you can find someone willing, this is a great option.

You Might Have to Get Creative, but You Can Find Recession Startup Funding

Sometimes the traditional ways work, and sometimes they do not. In a recession, the traditional ideas are sometimes even less useful. Creativity can be your best friend. You may have to use a few different sources of startup funding, recession or not. It can take longer than you originally anticipated, but slow and steady wins the race as they say.

If you work on winning grants or running a side hustle, it may feel like you will never finish the race, let alone win. Maybe you applied for loans but could not get approval. Now you are shaking yourself off and wondering if it is worth it. It is. Just keep trying. Consider the recession, though a challenge, to be an opportunity to do something not only different, but bigger and better in the long term.  The rain doesn’t last forever, and neither does a recession.  By starting your business now, you can be positioned for ultimate growth when the clouds finally roll away.

The post Top 10 Brilliant Ways to Find Recession Startup Funding appeared first on Credit Suite.

5 Ways to Raise Money for Business You May Not Think About

Even with the world going crazy due to the COVID-19 pandemic and the resulting economic downslide, it is possible to raise money for business.  The key is to think outside the box and get creative.

Raise Money for Business: Beyond Traditional Loans and Investors

Most often people turn to traditional loans, including SBA loans, and standard investors when they need to raise money for business.  In times like these however, those options may not work so well. That means it will be necessary to seek out ways to fund your business you may not have thought of already.

Raise Money for Business: Angel Investors

Angel investors  are usually only in for a one-time deal. Many choose to spread their risk out over a lot of people and businesses to be certain they get a safe return on their investment.

Angels tend to be a lot more informal than most types of funding. They can be people you know, or people you connect with through networking or other means.

Angels are not covered by the Securities Exchange Commission’s (SEC) standards for accredited investors. Still, a lot of them are accredited investors anyway.

To become an accredited investor, a person has to have a minimal net worth of $1 million and an annual income of $200,000.

There are a number of angels who aren’t millionaires. They could be friends or colleagues with home equity, or local professionals who are looking to invest.

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What frustrates you the most about funding your business during a recession? Check out how our guide can help.

How Do You Find Angel Investors?

The best way to find these kinds of investors is to ask. You can also try an angel investors website or network. Try Gust, which used to be called Angel Soft. They keep a database of investors, companies, and programs. Startups can also search for business plan competitions and more.

Another option is to look at the biggest angel investor groups. Be aware, however, that these meetings are really only going to happen if you can get an introduction.

According to Entrepreneur, in order from smallest to largest the top 10 Angel Investor groups are:

  1. New York Angels Inc.
  2. Alliance of Angels (Seattle)
  3. Pasadena Angels
  4. Hyde Park Angel Network (Chicago)
  5. Band of Angels (Menlo Park, CA)
  6. North Coast Angel Fund (Cleveland)
  7. Golden Seeds LLC (NYC)
  8. Investors’ Circle (San Francisco)
  9. Tech Coast Angels (Los Angeles) and
  10. Ohio Tech Angel Funds (Columbus, OH)

Focus and requirements may vary from group to group.  For example, some concentrate on local startups only. Do your research so you don’t waste yours and the angels’ time if it isn’t a good fit.

Raise Money for Business: Crowdfunding

Crowdfunding sites allow you to pitch your business to thousands of micro investors. Anyone who wants a piece of the action can buy in.

Investors pledge amounts ranging from as low as $5 to as high as they want. They may give $5, $80, $150, or even over $500. As a general rule, they can give as much or as little as they want.

Though not always necessary, most business owners offer rewards for investment. Typically, this comes in the form of the product the business will be selling. Different levels of giving result in different rewards.

Raise Money for Business: Credit Cards

You have to be careful with this one.  Many would consider it the easy way out.  This is because even with credit that isn’t stellar, credit cards aren’t all that hard to get.  They also are not hard to get in trouble with. If you have established business credit, it’s best to use that to get credit cards to raise money for business.

If you do not have business credit, it’s time to fix that.  Regardless of the state of the economy, you need business credit to access funding for capital, growth, and expansion. Building business credit can happen even in a recession.

Raise Money for Business: Credit Line Hybrid

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

What Does it Take to Qualify?

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

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What frustrates you the most about funding your business during a recession? Check out how our guide can help.

If you do not meet all of the requirements, all is not lost. You can take on a credit partner that meets each of these requirements.  Many business owners work with a friend or relative to fund their business.  If a relative or a friend meets all of these requirements, they can partner with you to allow you to tap into their credit to access funding.

Why Is It Such a Great Option?

There are many benefits to using a credit line hybrid.  First, it is unsecured, meaning you do not have to have any collateral to put up.  Next, the funding is “no-doc.”  This means you do not have to provide any bank statements or financials.

Not only that, but typically approval is up to 5x that of the highest credit limit on the personal credit report. Additionally, 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.

The process is pretty fast, especially with a qualified expert to walk you through it.  One other benefit is this.  With the approval for multiple credit cards, competition is created.  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.

Build Business Credit with a Credit Line Hybrid

The key is the approval of multiple business credit cards at once.  If your business is set up properly, they will report your on-time payments to the business credit reporting agencies.  These include Dun & Bradstreet, Experian, and Equifax mostly, though there are others. Not all of them report to all of the CRAs, but some of them report to at least one.  Each account reporting consistent on-time payments helps you build strong business credit.

The Connection Between Business Credit and Fundability

Here is how it works.  The fundability of your business is like a huge puzzle.  All the pieces fit together, and you have to have all the pieces to see the complete picture.  Unlike a puzzle, some pieces are bigger than others, meaning if you are missing those pieces, the impact on your complete fundability picture is bigger. Business credit is the biggest piece of the fundability puzzle.

To begin building business credit, and thus fundability, you first have to set your business up to be a fundability entity apart from yourself.

How to Set Up Your Business to Build Business Credit and Be Fundable

There are a few things you have to do to be sure that your business debts are reported to the business credit reporting agencies and thus your business credit report, not your personal credit report.

Make Sure You Have Separate Contact Information

Your business has to have its own phone number, fax number, and address.  You can still run your business from your home or on your computer if that is what you want.  There is no need to even have a fax machine.

You can get a business phone number and fax number that will work over the internet instead of phone lines.  Also, the phone number will forward to any phone you want.  As a result, you can simply use your personal cell phone or landline.  Whenever someone calls your business number it will ring straight through.

Faxes can be sent to an online fax service, if anyone ever happens to actually fax you.  This part may seem outdated, but it does help your business appear legitimate to lenders.

You can use a virtual office for a business address. How do you get a virtual office?  What is that?  It’s not what you may think.  This is a business that offers a physical address for a fee, and sometimes they even offer mail service and live receptionist services.  In addition, there are some that offer meeting spaces for those times you may need to have an in person meeting.

You Need an EIN

Next, get an EIN for your business.  This is an identifying number that works for your business the same way your SSN works for you personally. By using an EIN for business transactions, you help ensure your SSN is not associated with your business.  That makes it more likely your account will report to your personal credit rather than your business credit. You can get an EIN for free from the IRS.

You Have to Incorporate

Incorporating your business as an LLC, S-corp, or corporation is non-negotiable.  First, it lends credence to your business as one that is legitimate. Also, it offers some protection from liability.

Which option you choose does not matter as much for fundability as it does for other things.  Your budget and need for liability protection play more into that decision.   The best thing to do is talk to your attorney or a tax professional.  You will lose the time in business that you already have.  When you incorporate, you become a new entity. That means, you basically have to start over.  You’ll also lose any positive payment history you may have accumulated.

This is why you have to incorporate as soon as possible.  Time in business is also important to building business credit and fundability.  The longer you have been in business the more fundable you appear to be. That starts on the date of incorporation, not the date you started doing business.

You Must Open a Separate Business Bank Account

You have to open a separate, dedicated business bank account.  There are a few reasons for this.  First, it will help you keep track of business finances.  It will also help you keep them separate from personal finances for tax purposes.

raise money for business Credit Suite

What frustrates you the most about funding your business during a recession? Check out how our guide can help.

There’s more to it however.  There are several types of funding you cannot get without a business bank account.  Many lenders and credit cards want to see one with a minimum average balance.  In addition, you cannot get a merchant account without a business account at a bank. That means, you cannot take credit card payments.  Studies show consumers tend to spend more when they can pay by credit card.

Licenses

For a business to be legitimate it has to have all of the necessary licenses it needs to run.  If it doesn’t, red flags are going to fly up all over the place.  Do the research you need to do to ensure you have all of the licenses necessary to legitimately run your business at the federal, state, and local levels.

No Matter What the Economy Looks Like, You Will Always Need to Raise Money for Business

As you can see, there are a few ways to raise money for business.  The need to do this is not something that comes along just with a recession.  With or without the COVID-19 pandemic and resulting economic crash, you would still need funding for your business at some point.  If your business is suffering due to the pandemic and needs for social distancing, be sure you take advantage of all that is available.  This includes the Paycheck Protection Plan, as well as relief options from the Federal and State governments.  Even some businesses and professional organizations are offering help.

The first options mentioned however, including the credit line hybrid, are always available.  Be sure you work now to get your fundability and business credit in order. It will serve you well not only in hard economic times, but when the dust settles as well.

The post 5 Ways to Raise Money for Business You May Not Think About appeared first on Credit Suite.