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Get a Credit Line for Your Business During a Business Contraction
So, you’re finally doing it. You took the plunge and you started your own small business. But there is so much you need! Whether it is renovations for your location or payroll or the ramp-up costs for getting manufacturing started, all of those things need money. You need to get a credit line for your business, even though we’re in the midst of a business contraction.
Because you are not made of money.
But your business is new, so its credit score is not so hot. As a result, you are probably wondering how to finance a business with bad credit.
But let’s step back a little, because you should also be thinking about where to establish business credit.
Fight the Business Contraction and Get a Credit Line For Your Business
Recession Period Financing
The number of United States banks as well as thrifts has been decreasing progressively for a quarter of a century. This is coming from consolidation in the market along with deregulation in the 1990s, lowering 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 focused in ever‐larger banks is problematic for local business owners. Big banks are much less likely to make small loans. Economic downturns indicate banks end up being a lot more mindful with financing. Luckily, business credit does not depend on banks. And it doesn’t matter what happens with COVID-19.
Get a Credit Line for Your Business: What a Credit Line Is
A credit line, or line of credit (LOC), is an arrangement between a borrower and a financial institution or private investor which sets a maximum loan balance that a borrower can access.
A borrower can access funds from their line of credit anytime, so long as they don’t go over the maximum set in the agreement, and as long as they meet any other requirements of the financial institution or investor for example, making on time payments. This is the same whether the economy is going through a business contraction or not.
The Advantages
Credit lines offer many unique benefits to borrowers including convenience. Borrowers can use their line of credit and only pay interest on what they use, unlike loans where they pay interest on the total amount borrowed. Credit lines can be reused, so as you acquire a balance and pay that balance off, you can use that accessible credit again, and again.
Details
Credit lines are revolving accounts similar to credit cards, and compare to other kinds of financing such as installment loans. In many cases, lines of credit are not secured, much the same as credit cards are. There are some credit lines which are secured, and thus easier to qualify for.
Credit lines are the most routinely requested loan type in the business world even though they are preferred, true credit lines are uncommon, and hard to find. Many are also very hard to qualify for, requiring good credit, good time in business, and good financials. But there are other credit cards and lines that few people know about that are available for start-ups, poor credit, as well as if you have absolutely no financials.
Try the SBA During a Business Contraction
A lot of credit line types that most business owners imagine come from conventional banks and traditional banks use SBA loans as their prime loan product for small business owners. This is because SBA guarantees as much as 90% of the loan in the event of a default. These credit lines are the most difficult to qualify for because you must qualify with SBA and the bank.
Get a Credit Line for Your Business with SBA Loans and CAPLines, Even During a Business Contraction
There are two fundamental sorts of SBA loans you can normally get. One form is CAPLines. There are actually 4 types of CAPLines that can work for your small business.
You can also get a lower loan amount more rapidly using the SBA Express program. A lot of these programs offer BOTH loans and revolving lines of credit.
From the SBA … “CAPLines is the umbrella program under which SBA helps business owners meet short-term and cyclical working capital needs”. Loan amounts are offered up to and including $5 million. Loan qualification prerequisites are the same as with other SBA programs.
Seasonal Line
This one advances against expected inventory and accounts receivables. It was developed in order to help seasonal businesses. Loan or revolving are available.
Contract Line
This one finances the direct labor and material costs of executing assignable contracts. Loan or revolving types are offered.
Builders Line
This one was made for general contractors or builders constructing or renovating commercial or residential buildings. This line is for finance direct labor-and material costs, where the building project serves as the collateral. Loan or revolving kinds are available.
Working Capital
Borrowers must use the loan proceeds for short term working capital/operating needs. If the proceeds are used to acquire fixed assets, lender must refinance the portion of the line used to acquire the fixed asset into an appropriate term facility no later than 90 days after lender discovers the line was used to finance a fixed asset.
SBA Express
You can get approval for as much as $350,000. Interest rates differ, with SBA enabling banks to charge as high as 6.5% over their base rate. Loans above $25,000 will need collateral.
Approval Details
To get approval you’ll need good personal and business credit. Plus the SBA states you should not have any blemishes on your report. An acceptable bank score requires you have at least $10,000 in your account over the very last 90 days.
You’ll likewise need a resume showing you have industry experience and a well put together business plan. You will need three years of business and personal tax returns, and your business returns should show a profit. And, you’ll need a recent balance sheet and income statement, therefore showing you have the cash to repay the loan.
Collateral
To get approval you’ll need account receivables, but only if you have them. As for the collateral to counterbalance the risk, usually all business assets will function as collateral, and some personal assets including your home. It’s not unusual to need collateral equivalent to 50% or more of the loan amount. You also need articles of incorporation, business licenses, and contracts with all third parties, and your lease.
Get a Credit Line for Your Business from Private Investors and Alternative Lenders During a Business Contraction
Private investors and alternative lenders also grant credit lines. These are a lot easier to qualify for than conventional SBA loans. They also call for much less documentation for approval. These alternative SBA credit lines ordinarily demand good personal credit for approval.
Unlike with SBA, many of them don’t demand good bank or business credit approval. Almost all of these types of programs call for two years’ of tax returns. Tax returns have to show a profit. Rates can vary from 7% or greater and loan amounts range from $25,000 into the millions. Loan amounts are generally based upon the revenues and/or profits on tax returns. At times lenders may ask for other financials including a profit and loss statement, balance sheets, and income statements.
Check out how our reliable process will help your business get the best business credit cards and lines, even during a recession.
Merchant Cash Advances in a Business Contraction
Merchant cash advances have quickly become the most popular way to get financing, in large part because of the effortless qualification process. Businesses with $10,000 in profits can get approval, with the business owner having scores as low as 500.
Some sources have now even begun to offer credit lines that accompany their loans. You must have at least $10,000 in revenue for approval. You ought to be in business for at minimum one year, however three years is better. Lenders commonly want to see a credit score of 650 or higher for approval.
Loan amounts are ordinarily around $20,000. Lenders frequently do pull your business credit, so you must have some credit already and sometimes lenders will want to see tax returns.
Rates vary, due to the risk for this program, and there aren’t a lot of funding sources who offer it.
Securities as Collateral for Financing
You can get financing regardless of personal credit if you have some type of stocks or bonds. You can also get approval if you have someone wishing to use their stocks or bonds as collateral for financing.
Personal credit quality doesn’t matter as there are no consumer credit criteria for approval. You can get approval for as much as 90% of the value of your stocks or bonds. Rates are commonly below 2%, making this one of the lowest rate credit lines you’ll ever see. You can still earn interest as you typically do on your stocks and bonds.
Credit Cards and Lines are Very Similar
Credit cards often offer 0% intro rates for up to two years. This is also extremely valuable for startups in particular. And credit lines let you take out more cash at a much cheaper rate than do cards. These are the main two differences that will affect you between credit cards and credit line.
Investopedia even says that “lines of credit are potentially useful hybrids of credit cards.”
Both cards and lines are revolving credit. Credit lines are harder to qualify for as card approvals are generally very quick, many times automated, while line require an in-depth underwriting review. Lines usually offer lower rates, per Bankrate card rates average 13% while lines average 4%.
Check out how our reliable process will help your business get the best business credit cards and lines, even during a recession.
Unsecured Business Credit Cards During a Business Contraction
A lot of these cards report to the consumer credit reporting agencies. They all call for a personal guarantee from you. You can get approval typically for one card max as they discontinue approving you when you have two or more inquiries on your report.
Most credit card companies furnish business credit cards including Capital One, Chase, and American Express. These have rates similar to consumer rates and limits are also similar.
Some of them report to the consumer reporting agencies, some report to the business bureaus. Approval requirements resemble consumer credit card accounts.
Inquiries
Typically, when you apply for a credit card you put an inquiry on your consumer report. When other lenders see these, they will not approve you for more credit since they have no idea how much other new credit you have recently obtained.
So they’ll only approve you if you have no more than two inquiries on your report within the most recent six months. Any more will get you declined.
Grab Our Hybrid Credit Line During a Business Contraction
Check out our credit line hybrid. It’s available for all business owners. Get the benefit of 0% rates cards offer, and the cash out capability of a credit line. Get approvals to $150,000. Pay 0% rates for 6 – 18 months, with normal card rates afterwards. No documentation, no tax returns or bank statements are necessary. This program is ideal for startups, high-risk industries, and those who desire low payments. It also works if you don’t want to supply financials.
Our credit line hybrid is a superb choice during this time of economic uncertainty.
With this form of business financing, you work with a lender who concentrates on securing business credit cards. This is a very unusual, very few know about program which few lending sources offer. They can in most cases get you three to five times the approvals that you can get on your own.
This is because they are familiar with the sources to apply for, the order to apply, and can time their applications so the card issuers won’t decline you for the other card inquiries. Individual approvals frequently range from $2,000 – 50,000.
The end result of their services is that you frequently get up to five cards that simulate the credit limits of your highest limit accounts now. Multiple cards create competition, and this means they will raise your limits, generally within 6 months or less of first approval.
Approvals
Approvals can go up to $150,000 per entity such as a corporation. They actually get you three to five business credit cards that report solely to the business credit reporting agencies. This is huge, something most lenders don’t offer or advertise. Not only will you get cash, but you build your business credit as well so in three to four months, you can then use your new company credit to get even more money.
Details
You get credit with no security, assets, or collateral. Lender has no collateral to collect in case of default. Because there is no collateral, and they don’t look or care about your cash flow, the only thing that matters is your personal credit.
With a 650 you will get just personal cards. But with a 680 credit score, you will get both company and personal cards.
Rates
The lender can also get you low introductory rates, usually 0% for 6-18 months. You’ll then pay normal rates after that, typically 5-21% APR with 20-25% APR for cash advances. And they’ll also get you the best cards for points. So this means you get the best rewards.
Like with anything, there are substantial benefits in working with a source who specializes in this area. The results will be far better than if you try to go at it on your own.
Check out how our reliable process will help your business get the best business credit cards and lines, even during a recession.
Qualifications
You need to have excellent personal credit now, ideally 685 or better scores, the same as with all business credit cards. You shouldn’t have any negative credit on your report to get approval. And you must also have open revolving credit on your consumer reports right now.
Balance/Limit Ratios
They consider your balance/limit ratios on existing revolving accounts. The lower the ratio, the higher the amount of approval. A 30% ratio is a requirement. This looks at overall percentage, and individual percentage on each account.
Credit inquiries are a big factor tying into approval. More than six inquires in six months will be too much. Lenders do not want to see the person is applying for new credit, especially no other revolving accounts.
Guarantors Welcome
Use a guarantor or a credit partner to boost the numbers. Generally these people want a piece of the business in trade for their help. Creditors want to know you’ll pay them back. Most sources will charge 9 to 12% success-based fees. Only pay the fee off what you secure.
Fees
All lenders in this space charge a 9-15% success based fee and you only pay the cost off of what you secure. Bear in mind, you get a number of additional benefits and about three to five times more cash using this program than you can get on your own, which is why there’s a fee, the same as all other lending programs.
You can get approval using a guarantor and you can even use a number of guarantors to get even more money. There are also other cards you can get making use of this very same program but these cards only report to the consumer reporting agencies, not the business reporting agencies. They are consumer credit cards versus business credit cards.
Benefits
They furnish similar benefits including 0% intro annual percentage rates and five times the amount of approval of a single card but they’re a lot easier to qualify for.
You can get approval with a 650 score and seven inquiries (or fewer) in the most recent six months and you can have a bankruptcy on your credit and other derogatory items. These are a lot easier to get approval for than company credit cards.
With all preceding cards above, you must have good consumer credit in order to get approval but what if your personal credit is not good, and you don’t have a guarantor?
This is when building company credit makes a ton of sense even when you have good personal credit, setting up your company credit helps you get even more money, and in the absence of a personal guarantee.
Establishing Company Credit During a Business Contraction
Business credit is credit in a business name, in association with the business’s EIN number, and not the owner’s Social Security Number. When carried out properly, you can obtain company credit without any personal credit check and no personal guarantee. This is a thing all other cards above can’t provide.
You can get three types of business credit cards. First is vendor credit, which offers net 30 terms to launch a business credit profile. Then is retail credit, where you will get credit cards with high limits at most shops.
Next is fleet credit. It’s credit to fuel, service, and maintain business vehicles. And then there’s cash credit, which includes Visa, MasterCard, and American Express cards that you can use anywhere. You can obtain these without any credit check or guarantee. Limits are regularly $5,000 – $10,000 to begin, and can exceed $50,000.
Credit Lines in a Business Contraction: Takeaways
You can get a credit line for your business, if you know where to look. Learn more here and get started toward building company credit, even during a business contraction. The COVID-19 situation will not last forever.
The post Get a Credit Line for Your Business During a Business Contraction appeared first on Credit Suite.
Check Out Our Fundation Group LLC Recession Funding Review and Make Your Best Business Financing Decision Today
Will Our Fundation Group LLC Recession Funding Review Help Satisfy Your Need for Business Funding? We Put It to the Test
Fundation Group LLC is one of many lending companies online. They provide term loans and lines of credit. Foundation confirmed the information we found about them online. We look at the specifics and drill down into the details. So check out our Fundation Group LLC recession funding review.
Fundation Group LLC Recession Funding Review: Background
Fundation Group LLC is located online here: http://www.fundation.com/. Their physical address is located in Reston, VA. Plus you can call them at: (888) 390-0064. So their contact page is here: https://fundation.com/about/.
Their capital base has come from Goldman Sachs; Garrison Investment Group; and Midcap Financial, LLC.
Fundation Group LLC Recession Funding Review: Term Loans
Funding as soon as one business day. Up to $500,000 is available; terms go up to 4 years. Payments are twice per month. No specific collateral is needed. They want a personal guarantee. Fundation will take out a UCC-1 blanket lien for most borrowers.
They do not seem to have a time in business requirement anymore. Fundation also does not seem to have an annual revenue or personal credit requirement anymore.
Fundation Group LLC Recession Funding Review: Fees
Rates are risk-based; the higher the risk, the higher the rate.
Interest rates are not listed; they will be determined based on several factors. There are no prepayment fees.
Cost of Loans
Several factors are considered when Fundation decides on the cost of a loan. These factors include time in business and seasonality. They also include financial metrics. So these metrics include profit margin and amount of debt.
Fundation Group LLC Recession Funding Review: Lines of Credit
Up to $150,000 is available. The new balance after each draw is amortized in equal installments over 18 months. Payments are monthly. No specific collateral is needed. They want a personal guarantee. Fundation will take out a UCC-1 blanket lien for most borrowers.
They do not seem to have a time in business requirement anymore. Fundation also does not seem to have an annual revenue or personal credit requirement anymore.
Fundation Group LLC Recession Funding Review: Fees
There are no prepayment fees. Just pay the outstanding balance plus accrued interest if you prepay
your loan or line of credit.
Keep your business protected with our professional business credit monitoring. It’s a worthwhile investment, saving you money even during a recession.
Fundation Group LLC Recession Funding Review: Advantages
Advantages include no apparent time in business requirement. Their maximum loan amount is fairly high.
Fundation Group LLC Recession Funding Review: Disadvantages
Disadvantages are they want personal guarantees for pretty much everything and will take out a UCC blanket lien.
A Fantastic Alternative – Establishing Business Credit
Business credit is credit in a small business’s name. It doesn’t attach to an owner’s individual credit, not even when the owner is a sole proprietor and the solitary employee of the small business.
As such, a business owner’s business and individual credit scores can be very different.
The Advantages
Because business credit is distinct from personal, it helps to protect a small business owner’s personal assets, in case of a lawsuit or business bankruptcy.
Also, with two distinct credit scores, a small business owner can get two different cards from the same merchant. This effectively doubles buying power.
Another benefit is that even startup ventures can do this. Visiting a bank for a business loan can be a formula for disappointment. But building small business credit, when done right, is a plan for success.
Personal credit scores depend upon payments but also other factors like credit utilization percentages.
But for small business credit, the scores actually only depend on whether a business pays its invoices punctually.
The Process
Establishing company credit is a process, and it does not occur without effort. A company has to actively work to establish company credit.
However, it can be done readily and quickly, and it is much quicker than establishing consumer credit scores.
Vendors are a big aspect of this process.
Performing the steps out of sequence will cause repetitive denials. Nobody can start at the top with small business credit. For example, you can’t start with retail or cash credit from your bank. If you do, you’ll get a rejection 100% of the time.
Business Fundability
A company must be fundable to credit issuers and vendors.
For that reason, a company will need a professional-looking web site and e-mail address. And it needs to have site hosting from a company like GoDaddy.
And, company phone and fax numbers must have a listing on ListYourself.net.
In addition, the company telephone number should be toll-free (800 exchange or the equivalent).
A small business will also need a bank account devoted strictly to it, and it needs to have all of the licenses essential for operation.
Licenses
These licenses all must be in the perfect, appropriate name of the company. And they must have the same business address and phone numbers.
So keep in mind, that this means not just state licenses, but potentially also city licenses.
Keep your business protected with our professional business credit monitoring. It’s a worthwhile investment, saving you money even during a recession.
Dealing with the Internal Revenue Service
Visit the IRS web site and acquire an EIN for the small business. They’re totally free. Select a business entity such as corporation, LLC, etc.
A company can get started as a sole proprietor. But they will most likely wish to switch to a kind of corporation or an LLC.
This is in order to minimize risk. And it will make best use of tax benefits.
A business entity will matter when it pertains to tax obligations and liability in case of litigation. A sole proprietorship means the business owner is it when it comes to liability and taxes. No one else is responsible.
Sole Proprietors Take Note
If you operate a company as a sole proprietor, then at least be sure to file for a DBA. This is ‘doing business as’ status.
If you do not, then your personal name is the same as the small business name. Therefore, you can end up being directly responsible for all small business debts.
Plus, according to the Internal Revenue Service, by having this arrangement there is a 1 in 7 probability of an IRS audit. There is a 1 in 50 probability for corporations! Prevent confusion and noticeably reduce the chances of an IRS audit at the same time.
Setting off the Business Credit Reporting Process
Begin at the D&B web site and obtain a totally free D-U-N-S number. A D-U-N-S number is how D&B gets a business into their system, to produce a PAYDEX score. If there is no D-U-N-S number, then there is no record and no PAYDEX score.
Once in D&B’s system, search Equifax and Experian’s websites for the company. You can do this at www.creditsuite.com/reports. If there is a record with them, check it for accuracy and completeness. If there are no records with them, go to the next step in the process.
By doing this, Experian and Equifax will have something to report on.
Vendor Credit
First you must build trade lines that report. This is also referred to as vendor credit. Then you’ll have an established credit profile, and you’ll get a business credit score.
And with an established business credit profile and score you can begin to get retail and cash credit.
These sorts of accounts have the tendency to be for the things bought all the time, like marketing materials, shipping boxes, outdoor work wear, ink and toner, and office furniture.
But first off, what is trade credit? These trade lines are credit issuers who will give you initial credit when you have none now. Terms are often Net 30, rather than revolving.
So, if you get approval for $1,000 in vendor credit and use all of it, you must pay that money back in a set term, such as within 30 days on a Net 30 account.
Keep your business protected with our professional business credit monitoring. It’s a worthwhile investment, saving you money even during a recession.
Retail Credit
Once there are 3 or more vendor trade accounts reporting to at least one of the CRAs, then move onto retail credit. These are companies like Office Depot and Staples.
Just use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, use the business’s EIN on these credit applications.
Fleet Credit
Are there more accounts reporting? Then move to fleet credit. These are companies like BP and Conoco. Use this credit to buy fuel, and to fix and maintain vehicles. Just use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, make sure to apply using the company’s EIN.
Cash Credit
Have you been sensibly handling the credit you’ve up to this point? Then progress to more universal cash credit. These are companies such as Visa and MasterCard. Just use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, use your EIN instead.
These are frequently MasterCard credit cards. If you have more trade accounts reporting, then these are doable.
Monitor Your Business Credit
Know what is happening with your credit. Make certain it is being reported and deal with any mistakes ASAP. Get in the practice of taking a look at credit reports. Dig into the particulars, not just the scores.
We can help you monitor business credit at Experian and D&B for 90% less.
Update Your Data
Update the details if there are inaccuracies or the details is incomplete.
Fix Your Business Credit
So, what’s all this monitoring for? It’s to contest any mistakes in your records. Mistakes in your credit report(s) can be corrected. But the CRAs normally want you to dispute in a particular way.
Disputes
Disputing credit report errors typically means you send a paper letter with duplicates of any proofs of payment with it. These are documents like receipts and cancelled checks. Never send the originals. Always send copies and retain the original copies.
Fixing credit report inaccuracies also means you precisely itemize any charges you contest. Make your dispute letter as understandable as possible. Be specific about the issues with your report. Use certified mail so that you will have proof that you sent in your dispute.
A Word about Building Business Credit
Always use credit responsibly! Don’t borrow beyond what you can pay off. Track balances and deadlines for repayments. Paying punctually and fully will do more to boost business credit scores than pretty much anything else.
Building business credit pays. Great business credit scores help a business get loans. Your credit issuer knows the business can pay its financial obligations. They know the company is bona fide.
The business’s EIN attaches to high scores and loan providers won’t feel the need to demand a personal guarantee.
Business credit is an asset which can help your business for years to come. Learn more here and get started toward growing company credit.
Fundation Group LLC Recession Funding Review: Upshot
A company needing higher amounts will likely do better with Fundation. But there are negatives.
Entrepreneurs will find they have to give up a personal guarantee and, on top of that, have a UCC blanket lien held by Fundation. A company that fails and ends up going out of business could be particularly harsh for an entrepreneur – so companies which are unsure of the chances of their success would do well to seek out other types of funding, where they either hand over a personal guarantee or a UCC blanket lien but not both.
And finally, as with every other lending program, whether online or offline, always remember to read the fine print and do the math. Go over the details with a fine-toothed comb, and decide whether this option will be good for you and your company. In addition, consider alternative financing options that go beyond lending, including building business credit, in order to best decide how to get the money you need to help your business grow.
The post Check Out Our Fundation Group LLC Recession Funding Review and Make Your Best Business Financing Decision Today appeared first on Credit Suite.
Fund the Flip of Your Dreams with Lending One
If you are a real estate investor, then you need to know about Lending One. It is a direct real estate investing lender that has been around since 2014. They are newer, but they are quickly establishing themselves in the industry. Here is what you need to know to get a jump on deciding whether they are right for you, or not.
The company began as Crestar Funding, but changed its name in November 2016 to LendingOne. In the press release, they say that they realize the potential for this company was much larger than they originally thought.
Is Lending One a Good Option for You?
Bill Green (CEO) and Matthew Neisser (COO) joined forces in 2014 to open a private real estate lending company. The mission? To use technology to streamline and speed up the process of borrowing for real estate investment.
With Green’s skill and expertise in creating world class organizations and Neisser’s background in technology and finance, it did just that. As a result, we have the Lending One of today.. It provides a faster and easier way to apply for and receive approval for loans. Furthermore, it allows borrowers to more easily grow their real estate portfolios.
They make loans to citizens of the United States, Canadian citizens, and permanent resident aliens.
Check out our trustworthy list of seven vendors to help you build business credit. Conquer any recession!
What Types of Loans Do They Offer?
There are a range of options when it comes to loans with Lending One. They include:
Fix-and-Flip
For example, if your real estate game is to purchase homes to rehab and then sell for profit, then fix-and-flip loans are for you. Amazingly, rate quotes are available online in as little as 2 minutes.
They will loan up to 80% of the cost of the project, or LTC (Loan to Cost.) The minimum loan amount is $75,000. They do not list a maximum. Also, there is no interest charged on unused funds, and there is no penalty for early repayments. The minimum FICO required for a Fix-and-Flip loan is not noted on the website. They state only:
“We are much more flexible in the FICO score we accept and are happy to work with each client’s individual situations.”
Additionally, you will need to have the following documents on hand.
- Sales contract
- One month’s bank statement
- Construction budget
- List of properties currently owned
- 2 years tax returns
- LLC operating agreement, or Articles of Incorporation
Remember to send copies. Never send originals.
Rental Loans
Now, if your business is more “fix it up and rent it out” based, you will be more interested in the rental loans. With these, there are two options. The first, RentalOne, and then the Apartment Bridge loans.
Check out our trustworthy list of seven vendors to help you build business credit. Conquer any recession!
RentalOne
This option is available on either a 5 or 7-year ARM (adjustable rate mortgage.) Or, if you would rather, as a 30-year fixed loan. Loan amounts go up to $2 million.
The FICO requirement for the RentalOne loan is flexible, same as with the Fix and Flip loans. However, these requirements change without warning. The truth is, you really do not know until you try. You do not have to turn over income verification, not even a W-2. Instead, they consider the cash flow of the property itself in the decision-making process. It appears, however, that there is a prepayment penalty on this one.
Multifamily Bridge Loans
These are available for buildings with 5 to 200 rental units. There is no interest on funds that are not drawn, and the terms range from 12 to 36 months. The loan amount is up to $15 million.
There is a minimum FICO requirement of 650, but closing is super-fast, sometimes in as little as 20 business days.
New Construction Loans
Another product they offer is new construction loans. Amounts range up to $5 million. These loans are available in terms ranging from 12 to 24 months with fast approval. Eligible properties include single family, townhomes, condos, and multi-family buildings.
Rehab to Rent
If you want to rehab a home to rent for profit, you can do that as well. Here is how it works. First, you apply for a Fix-and-Flip loan. Then, when the rehab is complete, they will roll it into a 30-year fixed rental loan. As a bonus, since you are already a customer with the Fix-and-Flip, you will get a discount on the fees toward your rental loan.
Lending One Pre-Approval
There is an easy, fast pre-approval process, and it’s free. You can have your terms and rates in writing before you ever submit an offer. Honestly, the proof of funds provided with pre-approval makes submitting an offer easier than ever. Pre-approvals are available for amounts up to $5,000,000.
Lending One Partner Program
The company also offers a partner program. It’s a community of investors, realtors, real estate attorneys, and third parties. Potential partners have the opportunity through the program to earn compensation in exchange for client referrals. Interest parties are invited and encouraged to participate.
The following options exist:
- The Referral Partner Program is for real estate investors, real estate attorneys, and other third partners that want to refer business to Lending One.
- The Broker Partner Program is for mortgage brokers or loan origination consultants that wish to refer business.
- Finally, the corporate partner program is designed for businesses that provide goods or services to those that invest in real estate not occupied by the owner.
Partner consultants contact potential partners within 24 hours of application to the program.
Making Payments on Your Lending One Loan
They have a contract with FCI Lender Services. This company services and accepts payment for loans. Borrowers get a welcome package with directions directly from FCI about 2 to 3 weeks after the loan closes. Payments are made via ACH, and are due on the first of the month.
Lending One and the Better Business Bureau
It never hurts to seek out what type of online reputation a company has. Online reviews are huge these days. For this company we found the following.
The Better Business Bureau
As it turns out, not only do they have an A+ rating with the Better Business Bureau, but they are actually accredited since February 2017.
In that whole time, there has only been one complaint. The company addressed it and it was solved. There are only 3 reviews, and unfortunately the most recent one is negative. However, it is from someone who was in the middle of the loan process and the process was put on hold due to the COVID-19 pandemic. This is an extreme circumstance, of course.
Check out our trustworthy list of seven vendors to help you build business credit. Conquer any recession!
Benefits of Using Lending One
They use proprietary technology that allows them to streamline the underwriting process. As a result, application processing is much faster. Along with pre-approval and good reviews from previous customers, they sound like superstars. Yet, nothing’s perfect, right?
The Downside of Using Lending One
The main drawback is, they are a young company. Of course, that will not always be the case. One can only hope they will continue the positive path they are on and continue to work to get rid of any bugs.
Another negative is that you would not be able to get enough money for larger projects due to the maximum loan amounts offered. With a max of $2 million for rehab and $5 million for new construction, commercial jobs are pretty much out the window. Lending One would not be an option for those looking to do commercial flips or flips on more expensive homes in higher income areas.
A Quick Review of Real Estate Investing
If you happen to be newer to the world of real estate investing, you may want to consider these tips before you go much further.
Formally Incorporate
Many real estate investment lenders will not lend to individuals. Form a legal business so that you have the best options available when it comes to funding. This is just one of many lenders that will only lend to companies. An S-corp, LLC, or corporation will work.
Tell the Truth
In real estate, there is even more importance placed on doing honest business. If you cut corners when working on a rehab, or if you are a bad landlord, word will get out. This will not only cause problems when you try to sell or rent in the future, but it can detour future funding efforts as well.
Location Matters
This is especially true in relation to flipping homes. A fabulous home in a terrible location is probably not going to yield a significant enough profit.
Watch the Markets
Pay attention to what is selling and where. Take note of trends in what people are willing to pay for, as well as what they are not. This will help you figure out how to best use your funds.
A Word About Credit
This lender is more flexible than many lenders when it comes to credit. However, they make it very clear credit history still counts. Consider these tips to raise your credit score if you need to.
- First, make sure you have separate business credit. This includes getting and using an EIN, and incorporating, which as noted above is something that needs to be done anyway. Also, you need to have separate contact information for your business and a dedicated business bank account.
- Next, get copies of all your credit reports.
- Look first at what is affecting your score in a negative way. Then you will know where to focus your efforts.
- After that, review the report for mistakes.
- Report mistakes to the issuing agency, in writing.
- Only send copies of backup documentation, not originals.
- Monitor your personal and business credit score continually using a credit monitoring service. This will help you stay on top of things. You can monitor your credit with both Dun and Bradstreet and Experian through Credit Suite for 90% less than it would cost you at the business credit reporting agencies. You can monitor your credit with Equifax through them directly.
Of course, none of this really matters if you are not making your payments on time. Make sure you are doing that regardless. Nothing helps a credit score like consistent, on time payments.
Is Lending One for You?
In the end, Lending One isn’t a bad option. It does have higher interest rates and lower maximum loan amounts than some. However, they are also more lenient with their credit score requirements. That means if you are not able to get the funding you need somewhere else, they could be just what you need. They have a good reputation and offer a variety of loan options.
As with any decision on a lender, do you own research. Things change frequently, and the COVID-19 pandemic changed a lot of things. You’ll want to double check details such as loan amounts and interest rates. It seems though, despite being a young company, Lending One is doing pretty well, not only for themselves, but for their customers as well.
Are There Other Options? 
If you want financing for commercial flips, CreditSuite might be a better option. Financing ranges up to 20,000,000 which is much more suited to that type of project.
Loan-to-values range from 55-65%. Which one you can get depends on the purpose of the loan. Funding programs are available that include conventional property financing, money for investment properties and hard money loans, bridge loans, and loans for the purchase of commercial real estate. SBA loans are also an option. For renovation, you can get a loan-to-value of up to 60%. They have many other loan programs as well, including some for residential flips.
In the end, you just need to find which option will work best for you. Lending One is definitely one to consider. I’d even give them four out of five stars. But don’t stop there. Be sure to explore all your options.
The post Fund the Flip of Your Dreams with Lending One appeared first on Credit Suite.
How to Get a Commercial Line of Credit Right Now
Covid-19 has turned the world topsy turvy. There is no way around it. Most businesses need a little extra financial cushion at the very least. Most need much more than that. What happens in this post COVID-19 economy is literally unfolding as we watch. A commercial line of credit could be just the thing to keep your business going during a recession.
Get a Commercial Line of Credit Fast
The thing is, most business owners need money right now. That means you need the fastest, most cost-effective commercial line of credit that you can get. Why a line of credit rather than a loan? There are a few reasons, but one main reason.
Commercial Line of Credit vs. Loan
The most basic definition of a commercial line of credit is that it is a revolving credit, similar to a credit card. You have a limit and continuous access to that limit while making payments only on the portion you use each month.
For example, if you have a $10,000 line of credit, you can use however much of those funds you need each month for whatever you want, unless your lender issues some sort of restriction. If you use $2,000, then when you get your statement you will have to pay $2,000 plus the interest, rather than a payment plus interest on the entire amount of the loan.
If you were to pay $1,000, then spend another $500, you would pay on the $1,500 balance the next month. Your payments change as your balance changes. Just like with a credit card.
What is the advantage of a line of credit over a term loan? Flexibility, hands down. With a line of credit, you do not have to repay or pay interest on any amount that you do not use. You have access to the funds as needed, but you do not have to repay the entire amount unless you use the entire amount.
Credit Line Hybrid Financing: Get up to $150,000 in financing so your business can thrive.
Commercial Line of Credit vs. Credit Cards
Now, you’re probably thinking that credit cards are super easy to get, and they work the same way. It’s revolving credit. You only use what you need. You only pay back what you need.
Why is one better than the other? In some cases, a credit card may be the better option. This is a choice to make based on several different factors.
The main difference between the two that most borrowers need to know is that a line of credit typically has a lower consistent interest rate. However, there are no perks like 0% interest or cash back that you sometimes see with credit cards.
Another benefit with a credit card is that it is typically unsecured credit, meaning you do not have to have collateral. Many credit lines do require security, or collateral.
Middle Ground: Credit Line Hybrid
There is middle ground between unsecured and secured credit, and between a commercial credit line and credit cards. It’s called a credit line hybrid. A credit line hybrid is revolving, unsecured financing that allows you to fund your business without putting up collateral, and you only pay back what you use. It’s quickly accessible, lower interest, and high limit. It’s the best of both worlds.
Who Qualifies for this Type of Commercial Line of Credit?
Who qualifies for a credit line hybrid? Well, if you have a personal credit score of at least 685, you’re off to a good start. In addition, you can’t have any liens, judgments, bankruptcies or late payments. Furthermore, 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, it’s okay. You can take on a credit partner that meets each of these requirements. Many business owners work with a friend or relative to fund their business. If a relative or a friend meets all of these requirements, they can partner with you to allow you to tap into their credit to access funding.
What are the Benefits of This Type of Commercial Line of Credit?
There are many benefits to using a credit line hybrid. First, as already mentioned, it is unsecured. That means you do not have to have any collateral to put up. Next, the funding is “no-doc.” 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. Furthermore, frequently 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. That means it’s likely if you handle the credit responsibly, that you can get interest rates lowered and limits raised every few months.
Private Lenders: Another Way to Get a Commercial Line of Credit Fast
Private lenders generally operate online. They typically offer lines of credit to those with credit scores that are lower than what is generally required by traditional banks. In addition, often you can get the funds within a few days of application, rather than a few weeks. Here are a few examples.
Kabbage
Kabbage offers a credit line of up to $150,000 with no credit score required. The catch is that the interest rate is between 32 and 108%. The business must have been in existence for at least one year and have revenue of at least $50,000.
Due to the extremely high interest rate, this is really only an option for those businesses that cannot get financing due to a low or nonexistent credit score and need something immediately.
StreetShares
The credit line that StreetShares offers goes up to $100,000 for those who have a business credit score of at least 600. You also have to have been in business for at least one year, and have at least $25,000 in revenue. It requires weekly repayment.
This is a good option for smaller businesses that are okay in the credit department but have trouble meeting higher revenue criteria. Also, the interest rate minimum is lower than some. The low end at 9%.
OnDeck
If you have a credit score of at least 600 you can get a credit line of up to $100,000 with OnDeck . The interest rate is a little higher than some that require a higher credit score minimum. It ranges from 13.99 to 39.99 percent.
Again, due to the higher interest rate, this should only be an option if you cannot meet the higher credit score requirement with a lender that offers a lower interest rate.
Credit Line Hybrid Financing: Get up to $150,000 in financing so your business can thrive.
Lending Club
The credit line at Lending Club goes up to $300,000. It requires a credit score of 600, at least one year in business, and $50,000 or more in revenue. The repayment term is 25 months. In addition, they require collateral for limits over $100,000.
This is a good option for those who meet the requirement as there is a higher limit available with collateral, and the interest rate can go as low as 6.25%. Also, the repayment terms are more manageable.
Credit Card Options
Of course, while not the perfect solution, credit cards are an option. You have to be careful, and you want to research to ensure you get the best rates and terms possible. Here are some to start with.
Brex Card for Startups
The Brex Card has no yearly fee. Also, you will not need a personal guarantee. However, this card does not work for every industry.
To determine creditworthiness, Brex checks a company’s cash balance, spending patterns, and investors. Rewards include 7x points on rideshare and 4x on Brex Travel. Also, you can get triple points on restaurants and get double points on recurring software payments. Get 1x points on everything else.
Capital One® Spark® Classic for Business
The Capital One® Spark® Classic for Business is another good one to consider. It has no annual fee, but there is also no introductory APR offer. The regular APR is a variable 24.49%. However, you can get unlimited 1% cash back on every purchase for your company and there is no minimum to redeem.
While this card is within reach if you have fair credit scores, beware of the APR. If you can pay promptly, and completely, it’s a good deal.
Ink Business Unlimited℠ Credit Card
The Ink Business Unlimited℠ Credit Card has no annual fee and a 0% introductory APR. After that expires, the APR is a variable 14.74 to 20.74%.
Earn 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 initial 3 months from account opening. Rewards rewards for cash back, gift cards, travel and more using Chase Ultimate Rewards®. You will need superb credit to get approval for this card.
Blue Business® Plus Credit Card from American Express
The Blue Business® Plus Credit Card from American Express has no no annual fee and either, and it also has a 0% introductory APR for the first year. After that, the APR is a variable 14.74 to 20.74%.
Get double Membership Rewards® points on everyday business purchases like office supplies or client dinners. This applies to the first $50,000 spent each year. You get 1 point per dollar after that. Your credit has to be really good to qualify.
American Express® Blue Business Cash Card
Another one to check out is the American Express® Blue Business Cash Card. It is identical to the Blue Business® Plus Credit Card from American Express. However its rewards are in cash instead of points. You get 2% cash back on all eligible purchases up to $50,000 per calendar year. After that, it’s 1%.
There is no yearly fee, and there is a 0% introductory APR for the first one year. Afterwards, the APR is a variable 14.74 to 20.74%. You will need awesome credit to qualify for this card.
Credit Line Hybrid Financing: Get up to $150,000 in financing so your business can thrive.
Capital One ® Spark® Cash for Business
The Capital One® Spark® Cash for Business card is another great option. It has an introductory $0 annual fee for the first year. After that, it costs $95 per 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 first 3 months from account opening. Also, you get unlimited 2% cash back. YOu can rRedeem any time without any minimums. You will need fabulous credit scores to qualify.
Discover it® Business Card
Another good one is the Discover it® Business Card. It has no yearly fee. There is an introductory APR of 0% on purchases for twelve months. Then, the regular APR is a variable 14.49 to 22.49%.
You get unlimited 1.5% cash back on all purchases, with no category restrictions or bonuses. Also, they double the 1.5% Cashback Match™ at the end of the first year. There is no minimum spend requirement either.
You can download transactions easily to Quicken, QuickBooks, and Excel. This one also requires great credit scores.
The thing with credit cards is, you have to be so careful. As with all debt, payments must be made on time. However, the higher interest rates make this a little harder than it typically is with a commercial line of credit.
A Commercial Line of Credit Can Help You Right Now
In this post COVID world, most business owners need money fast. A commercial line of credit is the best way for that to happen, especially if you can get a credit line hybrid. Truly, with the ability to use a credit partner, virtually everyone can access this type of funding. It’s low interest, high limit, fast access to the funds you need to make sure your business thrives regardless of the state of the economy.
The post How to Get a Commercial Line of Credit Right Now appeared first on Credit Suite.
Stunning! It’s the Best Business Credit Cards for Bad Credit
The Best Business Credit Cards for Bad Credit in a Recession Can Be Yours
Want the best business credit cards for bad credit in a recession? Then look no further, for we have got you covered!
Per the SBA, corporate credit card limits are 10 – 100 times those of personal cards! Hence you can get a lot more cash with business credit.
It also means you can have personal charge cards at stores. You can also, now, have a second card at the same stores for your business.
And you will not have to put up collateral, cash flow, or financial information to get small business credit.
Get the Best Business Credit Cards for Bad Credit in a Recession
Brex Card for Startups
Check out the Brex Card for Startups. It has no annual fee.
You will not need to supply your Social Security number to apply. And you will not need to supply a personal guarantee. They will take your EIN.
However, they do not accept every industry.
Also, there are some industries they will not work with, and others where they want more 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.
So you can have poor credit (even a 300 FICO) to qualify.
Find it here: https://brex.com/lp/startups-higher-limits/
Check out how our reliable process will help your business get the best business credit cards, even during a recession.
The Best Business Credit Cards for Bad Credit in a Recession and Pay No Annual Fee
No Yearly Fee/Flat Rate Cash Back
Ink Business Unlimited℠ Credit Card
Have a look at the Ink Business Unlimited℠ Credit Card. Beyond no annual fee, get an introductory 0% APR for the initial 12 months. Afterwards, the APR is a variable 14.74 – 20.74%.
You can earn 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 initial 3 months from account opening. You can redeem your rewards for cash back, gift cards, travel and more using Chase Ultimate Rewards®. You will need excellent credit scores to receive this card.
Find it here: https://creditcards.chase.com/business-credit-cards/ink/unlimited
The Best Business Credit Cards for Bad Credit in a Recession and Get a 0% Introductory APR – Pay Absolutely Nothing!
Blue Business® Plus Credit Card from American Express
Have 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 suppers for the first $50,000 spent each year. Get 1 point per dollar afterwards.
You will need great to excellent credit scores to qualify.
Find it here: https://creditcard.americanexpress.com/d/bluebusinessplus-credit-card/
American Express® Blue Business Cash Card
Also take 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 as opposed to points.
Get 2% cash back on all qualified purchases on up to $50,000 per calendar year. Then get 1%.
It has no yearly fee. There is a 0% introductory APR for the first twelve months. After that, the 
APR is a variable 14.74 – 20.74%.
So you will need great to superb credit scores to qualify.
Find it here: https://creditcard.americanexpress.com/d/business-bluecash-credit-card/
The Best Business Credit Cards for Bad Credit in a Recession and Get Secure Company Credit Cards for Fair Credit
Capital One® Spark® Classic for Business
Check out 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, with no minimum to redeem.
While this card is within reach if you have fair credit, beware of the APR. Yet if you can pay on schedule, and completely, then it’s a bargain.
Find it here: https://www.capitalone.com/small-business/credit-cards/spark-classic/
The Best Business Credit Cards for Bad Credit in a Recession and Get Flexible Financing
The Plum Card® from American Express
Take a look at the Plum Card® from American Express. It has an introductory yearly fee of $0 for the first year. After that, pay $250 each 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 outstanding credit to qualify.
Find it here: https://creditcard.americanexpress.com/d/the-plum-card-business-charge-card/
The Best Business Credit Cards for Bad Credit in a Recession and Earn Unbeatable Cards for Jackpot Rewards That Never Expire
Capital One® Spark® Cash Select for Business
Check out 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 get a one-time $200 cash bonus when you spend $3,000 on purchases in the first three months. Rewards never expire.
Pay a 0% introductory APR for 9 months. Then pay 14.49% – 22.49% variable APR afterwards.
So you will need great to outstanding credit to qualify.
Find it here: https://www.capitalone.com/small-business/credit-cards/spark-cash-select/
Check out how our reliable process will help your business get the best business credit cards, even during a recession.
The Best Business Credit Cards for Bad Credit in a Recession and Get Cash Back
Flat-Rate Rewards
Capital One ® Spark® Cash for Business
Take a look at the Capital One® Spark® Cash for Business. It has an introductory $0 yearly fee for the first year. Afterwards, this card costs $95 annually. 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 first three months from account opening. Get unlimited 2% cash back. Redeem at any time with no minimums.
So you will need good to superb 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
Have a look at the Discover it® Business Card. It has no annual fee. There is an introductory APR of 0% on purchases for 12 months. Then 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| easily to Quicken, QuickBooks, and Excel. Note: you will need great to superb credit scores to get approval for this card.
https://www.discover.com/credit-cards/business/
Bonus Categories
Ink Business Cash℠ Credit Card
Have a look at the Ink Business Cash℠ Credit Card. It has no yearly fee. There is a 0% introductory APR for the first twelve months. Afterwards, 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 three months from account opening.
You can get 5% cash back on the first $25,000 spent in combined purchases at office supply stores and on internet, cable, and phone services each account anniversary year.
Get 2% cash back on the first $25,000 spent in combined purchases at filling stations and restaurants each account anniversary year. Get 1% cash back on all other purchases. There is no limitation to the amount you can get.
So you will need outstanding credit scores 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 initial 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 gas stations (default), office supply stores, travel, TV/telecom & wireless, computer services or business consulting services. Get 2% cash back on dining. So this is for the first $50,000 in combined choice category/dining purchases each calendar year. Then get 1% after, with no limits.
You will need exceptional credit to qualify.
Find it here: https://promo.bankofamerica.com/smallbusinesscards2/
Check out how our reliable process will help your business get the best business credit cards, even during a recession.
Your Choice: The Best Business Credit Cards for Bad Credit in a Recession
Your absolute best way to get the business credit cards for bad credit in a recession will hinge on your credit history and scores.
Only you can select which features you want and need. So make sure to do your homework. What is excellent for you could be catastrophic for others.
And, as always, make sure to develop credit in the recommended order for the best, speediest benefits. So you can get the best business credit cards for bad credit in a recession – and beyond. The economy is not going to be in trouble forever.
The post Stunning! It’s the Best Business Credit Cards for Bad Credit appeared first on Credit Suite.
It’s Science-backed With Our Foolproof Research: How to Build a Business Credit Score in a Recession
We Smuggled Out Hidden Information on How to Build a Business Credit Score in a Recession
Our research dynamos can teach YOU how to build a business credit score in a recession! The economy doesn’t have to be perfect to build business credit quickly and effectively.
Building better business credit means that your small business attains opportunities you never assumed it would.
You can get new equipment, bid on real property, and deal with the company payroll. And you can do so even when times are a bit lean. This is specifically helpful in holiday businesses, where you can go for calendar months with simply negligible sales.
Because of this, you ought to tackle building your company credit. Enhance and maintain your scores and you will have these possibilities. Do not, and either you do not get these opportunities, or they will cost you a lot more. And no company owner wants that.
So you need to know what affects your business credit before you can make it better.
How to Build a Business Credit Score in a Recession: Credit History Length Is Vital
This is essentially the length of time your business has been using business credit. Obviously newer businesses will have short credit histories. While there is not too much you can particularly do about that, do not despair.
Credit reporting agencies will also consider your personal credit score and your own history of payments. If your consumer credit is good, and particularly if you have a fairly extensive credit history, then your individual credit can come to the rescue of your company.
So that is, you did not just get your first credit card recently.
Normally the converse is also right. Hence if your individual credit history is poor, then it will have a bearing on your business credit scores. And it will do so until your small business and personal credit can be split up.
How to Build a Business Credit Score in a Recession: Don’t Allow Your Credit Utilization Rate to Harm Your Small business
Your credit utilization rate is just the amount of cash you have on credit. So it is then divided by your total available credit. Lenders in general do not wish to see this exceed 30%. Hence for every $100 in credit, do not borrow more than $30 of that.
If this percent is climbing, you’ll have to spend down and pay off your debts prior to borrowing more.
How to Build a Business Credit Score in a Recession: Your Payment History Truly Matters
Late repayments will affect your company credit score for a good seven years. If you pay your company debts off, as fast as possible, then you can make a very real difference when it relates to your credit scores.
Ensure that you pay promptly. And you will enjoy the rewards of promptness.
Learn more here and get started toward building business credit attached to your company’s EIN and not your SSN. Get money even in a recession!
How to Build a Business Credit Score in a Recession: Your Personal Credit Can Bear upon Your Business Credit
A substandard business year could end up on your personal credit score. And in case your business has not been around for too long, it will directly influence your company credit.
But don’t worry, you can separate them easily. Do so by taking measures to unlink them.
For instance, get credit cards exclusively for your firm. Or open business checking accounts and other bank accounts (or perhaps get a business loan). And then the credit reporting bureaus will begin to address your personal and small business credit independently.
Also, make sure to incorporate. Or at least file a DBA (doing business as) status. You can also pay for your company’s debts with your firm credit card or checking account. And make certain it is the company’s full name on the bill and not your own.
How to Build a Business Credit Score in a Recession: The Credit Reporting Bureaus Can Just Plain Get It Wrong
Just like each organization out there, credit reporting agencies like Equifax and Experian are only as good as their information. If your firm’s name is like another’s, there can possibly be some errors.
So check those reports, and your company report at Dun & Bradstreet, PAYDEX. Remain on top of these reports and contest charges with documentation and clear communications. Do not just let them stay incorrect! You can fix this!
And while you’re at, it you should also be overseeing the credit reporting agency which solely handles personal and not business credit, TransUnion. If you do not know how to pull a credit report, do not fret. It’s easy.
An Alternative – Business Credit!
Business credit is credit in a small business’s name. It doesn’t attach to an owner’s consumer credit, not even if the owner is a sole proprietor and the only employee of the company. Consequently, a business owner’s business and consumer credit scores can be very different.
The Benefits
Since small business credit is independent from individual, it helps to secure a business owner’s personal assets, in the event of a lawsuit or business bankruptcy. Also, with two separate credit scores, a small business owner can get two different cards from the same merchant. This effectively doubles buying power.
Another advantage is that even new ventures can do this. Visiting a bank for a business loan can be a recipe for disappointment. But building business credit, when done the right way, is a plan for success.
Personal credit scores depend upon payments but also additional factors like credit usage percentages. But for business credit, the scores truly only hinge on whether a company pays its bills on time.
Learn more here and get started toward building business credit attached to your company’s EIN and not your SSN. Get money even in a recession!
The Process
Growing business credit is a process, and it does not happen automatically. A business needs to actively work to establish business credit. Nevertheless, it can be done easily and quickly, and it is much more rapid than establishing personal credit scores.
Merchants are a big part of this process.
Doing the steps out of order will result in repetitive denials. No one can start at the top with company credit. For instance, you can’t start with store or cash credit from your bank. If you do you’ll get a rejection 100% of the time.
Business Fundability
A business has to be genuine to lenders and merchants. For that reason, a business will need a professional-looking web site and email address, with site hosting bought from a merchant such as GoDaddy.
And company telephone and fax numbers ought to have a listing on ListYourself.net.
Likewise the company telephone number should be toll-free (800 exchange or comparable).
A business will also need a bank account dedicated solely to it, and it has to have all of the licenses essential for running. These licenses all have to be in the correct, correct name of the small business, with the same business address and phone numbers.
So bear in mind that this means not just state licenses, but possibly also city licenses.
Learn more here and get started toward building business credit attached to your company’s EIN and not your SSN. Get money even in a recession!
Dealing with the Internal Revenue Service
Visit the Internal Revenue Service web site and acquire an EIN for the company. They’re totally free. Select a business entity like corporation, LLC, etc.
A company can get started as a sole proprietor. But they will more than likely wish to change to a kind of corporation or partnership to decrease risk and maximize tax benefits.
A business entity will matter when it comes to taxes and liability in case of a lawsuit. A sole proprietorship means the entrepreneur is it when it comes to liability and taxes. No one else is responsible.
If you operate a small business as a sole proprietor, then at the very least be sure to file for a DBA (‘doing business as’) status.
If you do not, then your personal name is the same as the business name. As a result, you can wind up being directly responsible for all company debts.
Additionally, according to the IRS, by having this structure there is a 1 in 7 possibility of an IRS audit. There is a 1 in 50 chance for corporations! Steer clear of confusion and significantly decrease the chances of an IRS audit at the same time.
Starting Off the Business Credit Reporting Process
Begin at the D&B website and get a cost-free DUNS number. A DUNS number is how D&B gets a company in their system, to produce a PAYDEX score. If there is no DUNS number, then there is no record and no PAYDEX score.
Once in D&B’s system, search Equifax and Experian’s websites for the company. You can do this here. If there is a record with them, check it for correctness and completeness. If there are no records with them, go to the next step in the process.
By doing this, Experian and Equifax will have something to report on.
Trade Lines
First you must establish trade lines that report. This is also called vendor accounts. Then you’ll have an established credit profile, and you’ll get a business credit score.
And with an established business credit profile and score you can start getting revolving store and cash credit.
These types of accounts have the tendency to be for the things bought all the time, like coffee, shipping boxes, outdoor work wear, ink and toner, and office furniture.
But first off, what is trade credit? These trade lines are credit issuers who will give you initial credit when you have none now. Terms are commonly Net 30, instead of revolving.
Hence if you get approval for $1,000 in vendor credit and use all of it, you must pay that money back in a set term, like within 30 days on a Net 30 account.
Details
Net 30 accounts have to be paid in full within 30 days. 60 accounts have to be paid in full within 60 days. In contrast to with revolving accounts, you have a set time when you must pay back what you borrowed or the credit you made use of.
To kick off your business credit profile the right way, you should get approval for vendor accounts that report to the business credit reporting bureaus. As soon as that’s done, you can then use the credit.
Then pay back what you used, and the account is on report to Dun & Bradstreet, Experian, or Equifax.
Not every vendor can help like true starter credit can. These are vendors that will grant an approval with hardly any effort. You also need them to be reporting to one or more of the big three CRAs: Dun & Bradstreet, Equifax, and Experian.
But you may have to apply more than one time to these vendors, and you may need to purchase some things you don’t need, to confirm you are responsible and will pay promptly. Consider giving nonessential things to charitable organizations.
Revolving Store Credit
Once there are 3 or more vendor trade accounts reporting to at least one of the CRAs, progress to revolving store credit. These are service providers such as Office Depot and Staples.
Use the small business’s EIN on these credit applications.
Fleet Credit
Are there more accounts reporting? Then move onto fleet credit. These are businesses like BP and Conoco. Use this credit to purchase fuel, and to repair and take care of vehicles. Make sure to apply using the small business’s EIN.
Cash Credit
Have you been sensibly handling the credit you’ve gotten up to this point? Then move onto more universal cash credit. Keep your SSN off these applications; use your EIN instead.
These are usually MasterCard credit cards. If you have more trade accounts reporting, then these are feasible.
Monitor Your Business Credit
Know what is happening with your credit. Make sure it is being reported and deal with any mistakes ASAP. Get in the practice of checking credit reports. Dig into the specifics, not just the scores.
We can help you monitor business credit at Experian and D&B for 90% less. Update the information if there are errors or the info is incomplete.
Disputing Errors
So, what’s all this monitoring for? It’s to dispute any errors in your records. Errors in your credit report(s) can be corrected. But the CRAs normally want you to dispute in a particular way.
Disputing credit report inaccuracies usually 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 original copies.
Disputing credit report mistakes also means you specifically spell out any charges you challenge. Make your dispute letter as 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.
A Word about Building Business Credit
Always use credit sensibly! Don’t borrow more than what you can pay off. Keep an eye on balances and deadlines for repayments. Paying in a timely manner and in full will do more to raise business credit scores than pretty much anything else.
Establishing business credit pays. Great business credit scores help a business get loans. Your lending institution knows the business can pay its debts. They know the business is bona fide.
The small business’s EIN attaches to high scores, and lending institutions won’t feel the need to demand a personal guarantee.
How to Build a Business Credit Score in a Recession: The Takeaways
Once you find out what influences your small business credit score, you are that much nearer to being able to build a business credit in a recession.
Learn more here and get started on how to build a business credit score in a recession.
The post It’s Science-backed With Our Foolproof Research: How to Build a Business Credit Score in a Recession 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.
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Contract CAPLines
Financing for businesses that need funding to fill a contract.
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Builder’s CAPLines
Financing for businesses taking on a real estate or construction project.
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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 Financing
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.
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/
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
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/
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.
How Business Credit Can Help With Effective Hiring
Effective hiring should be on every business owner’s list.
Here’s What You Need to Know About Effective Hiring and Business Credit
I once spoke with a small business owner who had recently won a multi-million dollar consulting contract with the U.S. government. This contract required him to seriously ramp up his operation with more employees and the additional infrastructure that he would need to accommodate the increase in headcount. A problem most small business owners would like to face, right?
He had a lot of experience working with government contracts. And he was familiar with the payment cycle for the invoices he regularly sent for payment. He knew he would be paid. But he also knew it would take over 30 days. This made it difficult to float all the ramp-up costs with his cash flow.
This is a common challenge faced by many small businesses that need to ramp up to service a new client or meet the demands of a new contract. Fortunately, this business owner could access borrowed capital to meet this short-term need. Fueling growth is a good use case for borrowed capital. His credit profile allowed him to meet the demands of his new government contract without the insurmountable cash flow burden that would have otherwise been required.
Proactively approaching your credit profile today, to turn it into a tool that you can strategically leverage to foster growth when needed—which often means hiring more employees—should be top of mind for every small business owner.
Learn more here and get started with building business credit with your company’s EIN and not your SSN. Get money even in a recession and put it toward more effective hiring!
Building Your Credit Profile into a Strategic Tool
Building a strong credit profile isn’t rocket science. But it isn’t something that just happens either. What’s more, if you have a less than perfect credit profile, it isn’t going to change overnight. Slow and steady wins this race.
For most small business owners in the United States, your personal credit score will be a part of every business creditworthiness conversation so it’s important to understand what lenders see when they look at your personal score. Fortunately, so far as personal credit is concerned, your score is easy to translate. Here is what it means:
Above 800 (excellent)
A credit score of 800 or better puts you in pretty elite company. Borrowers in this range are considered consistently responsible when it comes to managing debt. They have a long history of no late payments. Plus they carry low balances on their personal credit cards. They are considered at low risk of default.
740-799 (very good)
This is considered a very good score and tells lenders you are generally financially responsible when it comes to money and managing your personal credit. Although you may have an occasional late payment, most of the time you make timely payments on your personal loans, credit cards, utility payments, and mortgage. It also indicates that the balances you carry on your personal credit cards are generally low (below 30% of available credit).
670-739 (Good)
If your score falls in the upper part of this range, you are a little better than the average U.S. consumer whose FICO score is around 704. Although this borrower shouldn’t have too much trouble obtaining financing, there will be some options unavailable to them. Although they are unlikely to be offered the same low rates and favorable terms of those with Very Good or Excellent credit.
580-669 (Fair)
Borrowers in this range may have a few dings on their credit history, but no serious delinquencies. It’s still possible to get financing. But it will not be at very competitive rates. There will be limited options.
Under 580 (Poor)
This score represents what could be multiple defaults on different loans from different lenders. It could also represent a bankruptcy, which will remain on your credit report for 10 years. Borrowers with scores this low will have very limited business loan options. They should expect to pay some of the highest rates on business financing if approved. Borrowers with a score in this range should focus on repairing and rebuilding their score.
No Credit
Although there is a difference between Poor Credit and No Credit, the results are similar. When building a personal credit history, don’t be afraid to start small. Make sure you pay your utility bills and meet your other personal financial obligations in a timely manner.
Now that you know what your personal credit score means, you need to know how it’s calculated so you can take the right steps to build or improve your score.
How is My Personal Credit Score Calculated?
Most of the personal credit reporting bureaus base their credit scores on the FICO score. Although if you check your score with different reporting agencies there might be some slight differences, the basis for those scores is all the same. Here is the formula:
35% Comes from Your Payment History
In other words, the single most important thing you can do is to make each and every periodic payment in a timely fashion. Most creditors understand the difficulties people are facing right now. But that doesn’t mean you’ll get a pass. It’s important to stay current. Do not let a debt obligation go 60-, 90-, or 120-days past due.
30% Comes from Your Debt to Credit Ratio
In other words, the ratio of debt you use compared to the amount of credit you have. The credit bureaus don’t like to see maxed out credit accounts. A good rule of thumb is to keep that ratio below 30% (lower is even better). But anything over 50% is a big red flag that will keep your personal credit score in the basement.
15% Comes from the Length of Your Credit History
Lenders are trying to make decisions about what you will do in the future based on what you’ve done in the past. So a longer track record is better than a shorter track record. You’ll probably get some allowance for the first half of 2020. But if you have chronic credit problems dating from before the crisis, you need to get to work on making improvements to your credit habits.
10% Comes from the Type of Credit You Use
For example, credit bureaus look at mortgages, auto loans, credit cards and other revolving debt through a different lens. Creditors want to see a mix of credit. So if the only credit account you have is your mortgage, a little diversification will help your credit score.
10% Comes from New Credit Inquiries
While it’s true that new inquiries can impact your score, the amount of impact is relatively small. That is particularly true if you are consistently current with your payments and aren’t maxing out the limit on your credit cards every month.
Before we talk about how to improve your credit to maximize your ability to access borrowed capital to hire new employees or otherwise ramp up for a new contract, we need to address business credit. What makes it different from personal credit and some of the synergies created by a strong personal credit score and a robust business credit history.
Learn more here and get started with building business credit with your company’s EIN and not your SSN. Get money even in a recession and put it toward more effective hiring!
How is My Business’s Credit Profile Reported?
Like the credit bureaus that report on your personal credit history, there are business credit bureaus that report on your business credit history. They consider how you pay your suppliers, your landlord, your utilities, your business credit cards, and how you may payments on any other business loan or business debt you might have.
With the exception of the FICO SBSS credit score, which is a composite of your personal and business credit used by the SBA to evaluate a loan application, you should consider your business credit as typically a collection of scores, rather than one universal score like your personal score. Every business credit bureau creates this profile differently. So no two business credit reports will look exactly the same. Regardless of how long you’ve been in business, you have a business credit profile that includes detailed information about your business and your business credit history.
Your Business Credit Score is Different
Although your personal score is considered private, your business profile is public to anyone who wants to see it. The basis of your business profile is whether or not the majority of your credit interactions are positive or negative. The goal here is to meet all your business obligations as agreed upon.
Additionally, your credit history is a measurement against other businesses in your industry. And this includes if they are considered more or less risky from a credit perspective. Your history is also compared to other businesses in your region, of your size, and annual revenues. This is to make a recommendation to creditors on your business’s potential creditworthiness.
Improving Your Business Credit Score
Irrespective of personal or business credit, the single most important thing you can do to build a positive profile is to make your periodic payments in a timely manner. If you want to build your credit into a strategic tool you can use to fuel growth, here are 4 things you should start doing today:
Make Sure Your Profile is Accurate
There is a lot of negative credit activity going on right now. Plus, it’s easy to confuse businesses with similar names or addresses. So it’s more important than ever to make sure the things reported about your business are accurate and reflect your credit practices. If you find an error, all the major business credit bureaus have mechanisms to correct the mistakes you can verify.
Keep Your Personal and Business Credit Separate
This can be hard for young businesses that don’t have a lot of business credit yet. But using your personal credit for business credit purposes not only doesn’t help your business profile, it could actually hurt your personal credit score. Since 30% of your personal score comes from how much credit you use compared to how much you have, the higher balances often associated with business expenses can negatively impact your ratios. If you want to keep your personal score as strong as possible, while building your business profile, avoid the temptation to use your personal credit to pay for a business expense.
Establish Trade Credit Accounts with Your Suppliers
This is one of the most underrated ways to build a strong business profile. Most vendors are willing to offer payment terms to their good customers. Although it’s not a business loan, if they report your good credit behavior to the appropriate credit bureaus, this valuable credit will help you build a strong business credit history. This will enable you to borrow when you really need to.
Use the Credit You Need and Stay Current
Businesses large and small leverage borrowed capital to fuel growth and fund other business initiatives like effective hiring of new employees. The biggest thing you can do to build a strong profile is to use the credit you need and make sure you make every periodic payment. Lenders look at your history because they want some assurance that you will make timely payments to them. It helps if they can see you’ve done so in the past.
Learn more here and get started with building business credit with your company’s EIN and not your SSN. Get money even in a recession and put it toward more effective hiring!
Effective Hiring of New Employees Can be Expensive
Effective hiring of new employees often includes expense beyond the addition of another paycheck. For some companies it might be a new computer and workstation. For others it could be something else. Most of these upfront expenses are relatively short term. So many small business owners opt to finance them with either a business credit card or even a small business loan depending on the cost. The business owner I described at the beginning of this article opted for a small business loan.
He had worked to build his credit profile so he could use business financing as a strategic tool when he needed it. So he could borrow the money he needed to ramp up employees and infrastructure to service the new contract. And he could repay the loan once he started to get regular payments from his government contract.
Effective Hiring and Business Credit: Takeaways
As a small business owner accessing borrowed capital has always required a good personal and business credit history. But especially now, many lenders are tightening their qualification requirements tighter than ever. So it will be important to make sure your profile shows you in the best light possible. Of course, it’s no guarantee you’ll get the financing you want. But it will give your business more options to choose from—as well as put your application on the top of the pile.
Ty Kiisel for Credit Suite
The post How Business Credit Can Help With Effective Hiring appeared first on Credit Suite.
Beyond a Simple Crowdfunding Definition: What You need to Know Now
Funding for businesses is needed now more than ever. Funding that does not have to be repaid is always in high demand, as is funding that does not require a stellar credit score. In the eyes of most, and rightly so, that is exactly what crowdfunding is. That is not the crowdfunding definition however. There is so much more to the whole crowdfunding scene.
Crowdfunding Definition: What It Is, What It Is Not, and What Your Other Options Are
According to Dictionary.com, the crowdfunding definition is:
“the activity or process of raising money from a large number of people, typically through a website, as for a project or small business.”
It sounds like a great plan, right? It is, until you know that the average success rate of crowdfunding campaigns is 50%. That said, 78% of crowdfunding campaigns reach their goal. Of course, that sounds better. Still, reaching your goal doesn’t guarantee success.
Check out our trustworthy list of seven vendors to help you build business credit. Conquer any recession!
Crowdfunding Definition: What Crowdfunding Is
The thing is, crowdfunding is definitely a viable option, but it is too risky to depend upon as your sole source of funding. For some, it works out to where you can get a whole business off the ground without any other funding source. For most, crowdfunding simply reduces the amount of debt you must take on. Yet, for many, there are not even enough funds raised from such campaigns to get started.
Crowdfunding Definition: What Crowdfunding is Not
Whether crowdfunding for startups or for an already existing business, it is not a legitimate only option. There needs to be a backup plan for either supplemental funds or full funding. If your credit score is good, there is no worry here as financing options abound. However, a not so great credit score can make a backup plan more difficult.
Crowdfunding Definition: Crowdfunding Platforms
While not an exhaustive list, these are some of the most popular crowdfunding platforms.
- Kickckstarter
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- Indiegogo
- RocketHub
- CircleUp
- GoGetFunding
- Crowdfunder
- Fundable
- Fundly
Whichever platform you choose, whether one of these or one not on this list, remember there are a number of crowdfunding resources available to help you on this journey. You just have to look for them.
Crowdfunding Definition: Behind the Scenes
Now, the best way to find out about crowdfunding is to take a look at some actual campaigns. Here are some of the most notable, the good, the bad, and the ugly.
Pebble SmartWatch
Pebble actually has several of the top 10 campaigns ever on Kickstarter. Their 2nd campaign is the highest funded campaign to date, reaching over $20,000,000. That’s not too shabby for a goal of only $500,000. They blew it out of the water!
Are they still successful? Well, yeah, but not in the way you may think. They actually sold to FitBit.
FlowHive
This one is not one that most would expect to explode onto the scene the way it did. The FlowHive Indiegogo campaign definitely generated some major buzz. The idea was to find a way to get the honey from bees without harming the bees.
Traditionally, hives are simply broken open to obtain the honey. This process can kill the bees. FlowHive developed a fake hive of sorts, made from reusable plastic. Bees make honey in it, and the honey flows through a spout out into the world. The bees are safe and fresh honey is ours for the taking.
Apparently, beekeeping is growing in interest. This campaign raised $14,000,000. Though they won’t disclose exact numbers, the queen bees claim they are still buzzing and in the black.
CoolestCooler
The coolest cooler was a super cool Kickstarter campaign that came in at over $13.000,000 raised. The cooler boasted bluetooth and a blender among other things. Investors received a cooler for their donation toward the cause.
This one had some trouble when it wasn’t able to deliver investment rewards as quickly as promised and there was actually a lawsuit. In the end, everything worked out and everyone got their rewards.
BauBox Travel Jacket
This jacket has 10 different elements, including a drink holder and a neck pillow. They raised over $11,000,000 across 2 campaigns. It was a bumpy start, partially because the jacket was available on retail sites before investors even got theirs, but it is still selling today.
As you can see, while mostly successful, even these top campaigns had some pretty serious bumps along the way. You need to be prepared for the same, even if you reach your fundraising goals.
Crowdfunding Definition: The Backup Plan
Here are some options for financing. The one that will work best for your business will depend on your credit score, your business fundability, and how much you are able to raise through crowdfunding and other debt-free options.
Check out our trustworthy list of seven vendors to help you build business credit. Conquer any recession!
Traditional/ SBA Loans
These are lumped together because they each require working with a traditional lender and a decent credit score. However, it is important to remember that SBA loans typically require a lower credit score, although still good, as they are government backed business loans. A few examples of SBA loans that work great for starting a business include:
7(a) Loans
This one offers federally funded term loans of up to $5 million. Funds can be used for expansion, purchasing equipment, and working capital, in addition to startup. Banks, credit unions, and other specialized institutions, in partnership with the SBA, process these loans and disburse the funds.
504 Loans
The funds work well to purchase machinery, facilities, or land. They are generally used for expansion. Private sector lenders or nonprofits process and disburse funds. They are also good for commercial real estate purchases especially.
There is also a requirement you be in business at least 2 years, or that management has equivalent experience if the business is a startup.
Microloans
Microloans work for starting a business, purchasing equipment, buying inventory, or for working capital. Community based non-profits administer microloan programs as intermediaries. Financing comes directly from the Small Business Administration.
Credit Line Hybrid
A credit line hybrid is a form of unsecured business funding. With it, you can fund your business without putting up collateral. You only pay back what you use.
It is not as hard to qualify as you may think. Your personal credit needs to be good, as in at least 680. In addition, you can’t have any liens, judgments, bankruptcies or late payments. Furthermore, in the past 6 months you should have no more than 4 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.
However, if you do not meet all of the requirements, the credit line hybrid is still accessible. 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. This makes a credit line hybrid an excellent option for bad credit business funding.
Credit Line Hybrid Benefits
There are many benefits to using a credit line hybrid. For example, it is unsecured, meaning you do not have to have any collateral to put up. Next, it is no-doc funding. This means you don’t have to provide any bank statements or financials.
Not only that, but typical approval is up to 5x that of the highest credit limit on the personal credit report. Also, it is possible to get interest rates as low as 0% for the first few months. That allows you to put that savings back into your business.
The process is usually 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.
Alternative Lenders
These are also an option if your credit score is lacking. Remember, lenders change details such as requirements and rates frequently. Be sure to check with the specific lender for the most up to date information.
BlueVine
The minimum loan amount available from BlueVine is $5,000 and the maximum is $100,000. Annual revenue must be $120,000 or more and the borrower must be in business for at least 6 months. Your personal credit score has to be 600 or above.
Upstart
Upstart is an online lender unlike any other. It uses a completely innovative platform for loans. The company itself questions the ability of financial information and FICO, on their own, to truly determine the risk of lending to a specific borrower. Instead, they use a combination of artificial intelligence (AI) and machine learning to gather alternative data. Then, they use this data to help them make credit decisions.
This alternative data can include such things as mobile phone bills, rent, deposits, withdrawals, and even other information less directly tied to finances. The software they use learns and improves on its own. To be eligible for a loan with Upstart, you must meet the following qualifications:
- Credit score of 620+
- No bankruptcies or negative public records
- No delinquent accounts
- Meet debt to income standards (they only note they will check this ratio, not what their standards are.)
- Have fewer than 6 inquiries in the past 6 months on your credit report, not including those related to student loans, vehicle loans, or mortgages
These are the requirements they list on their website. One independent review said that the requirement for the debt to income ratio is a maximum of 45%. It also says that the minimum annual income has to be at least $12,000.
Check out our trustworthy list of seven vendors to help you build business credit. Conquer any recession!
Fora Financial
Founded in 2008 by college roommates, online lender Fora Financial now funds more than $1.3 million in working capital around the United States. There is no minimum credit score, and there is an early repayment discount if you qualify.
The minimum loan amount is $5,000 and the maximum is $500,000. The business must be at least 6 months in operation and the monthly revenue has to be $12,000 or more. There can be no open bankruptcies.
OnDeck
Obtaining financing from OnDeck is quick and easy. First, you apply online and receive your decision once application processing is complete. If you receive approval, your loan funds will go directly to your bank account. The minimum loan amount is $5,000 and the maximum is $500,000.
Just like any other online lender, they do have certain requirements to qualify for a loan. For example, a personal credit score of 600 or more. Also, you must be in business for at least 3 years. Annual revenue must be at or exceed $100,000. In addition, there can be no bankruptcy on file in the past 2 years and no unresolved liens or judgements.
Crowdfunding Definition: The Down and Dirty Truth
Knowing the crowdfunding definition is just the first step. As with most else in the world, a definition isn’t enough. Once you know the crowdfunding definition, the hard part starts. You have to figure out if it is right for you and your business. It may work great, or it may not. Plan for the best and hope for the worst is a great motto to live by here. Do your research on how to run a great campaign, and spend the time necessary to thoroughly research platforms and determine which one will work best for your needs.
Then formulate your backup plan. Do you need loans, a credit line hybrid, or some combination? The time to figure that out is on the front end, before you need it. By the time you see the need is a reality, it could be too late.
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