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The Business Loan Credit Score and Fundability Connection

You how they say everything in life is connected?  It’s true.  One thing affects another and another and another and before you know it, all the dominos have fallen.  The same is true of the connection between getting a business loan, credit score, and fundability.

When it Comes to a Business Loan, Credit Score and Fundability Both Count

Most people only think about credit score when it comes to their ability to get a business loan.  The truth, however, is much bigger than that.  Credit score is important, but only in so much as it is a part of the bigger picture of fundability.

Business Loan Credit Score and Fundability: Understanding Fundability

What is fundability?  In short, it is the overall ability of a business to repay debt, as viewed by lenders.  If a lender sees your business as one that is fundable, they believe that you will be able to handle and repay the debt that they extend in a timely manner.  Your business is seen as one that will profitable for them to lender to.

The thing that few business owners understand is, there is so much more to fundability than credit score.  Lenders look at a number of things to determine whether or not they will approve a loan application. It’s true, when it comes to a business loan, credit score counts a lot.  It’s not everything though.

Check out our trustworthy list of seven vendors to help you build business credit.

How Business Credit Affects Fundability

To really understand the business loan credit score and fundability connection, it helps to think of fundability like a puzzle. Business credit is just one piece.  It’s a little more complicated than that however.  It is a very, very large piece, right in the middle, and it is made of little pieces all its own.  It’s like a puzzle within a puzzle.

So yes, though many other things affect fundability, when it comes to a business loan, credit score is hugely important.  This means it is vital to understand how to build business credit.

Establish Business Credit

Before you can build business credit, you have to first establish your business as a separate entity from you as the owner. This is a vital step in getting your business loan credit score where it needs to be.  It is all in how your business is set up.

Separate Contact Information

Your business needs it own phone number and address.  This doesn’t mean you need a separate building.  You do not even need a different phone.  You can get a phone number that works over the internet and will forward to the phone you are already using.  For an address, you can use a virtual office.  Some of these will even offer meeting spaces to hold face-to-face meetings.

EIN

The next thing you need to do is get an EIN for your business.  This is an identifying number for your business that works in a way similar to how your SSN works for you personally.  Some business owners used their SSN for their business. This is what a lot of sole proprietorships and partnerships do.  However, it really doesn’t look professional to lenders, and it can cause your personal and business credit to get all mixed up.  When you are looking to increase fundability, you need to apply for and use an EIN.  You can get one for free from the IRS.

Incorporate

This is the most important step in fundability thus far.  Incorporating your business as an LLC, S-corp, or corporation is necessary to fundability.  It lends credence to your business as one that is legitimate. It also offers some protection from liability.

Which option you choose does not matter as much for fundability as it does for your budget and needs for liability protection.  The best thing to do is talk to your attorney or a tax professional.  What is going to happen is that you are going to lose the time in business that you have.  When you incorporate, you become a new entity.  You basically have to start over.  You’ll also lose any positive payment history you may have accumulated as well.

This is why you have to incorporate as soon as possible.  Not only is it necessary for fundability and for building business credit, but so is time in business.  The longer you have been in business the more fundable you appear to be.  That starts on the date of incorporation, regardless of when you actually started doing business.

Business Bank Account

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

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

Check out our trustworthy list of seven vendors to help you build business credit.

Building Business Credit

To build business credit, you have to get accounts reporting.  This is how you get a business loan credit score that is strong. As you may imagine, getting someone to extend credit without first having strong credit can be quite difficult.  There are a few options however.  For example, you can talk to any vendors you may already be working with and ask if they will extend credit.  Since you already have a relationship with them, they may be willing.  Ask also if they will report your payments to the business credit reporting agencies.  Then, your score will start to grow.

You can also talk to those service providers you already pay monthly like landlords, utilities, and phone and internet providers.  They do not have to, but if you ask they may report your monthly payment to the business credit agencies.  This can only help you build credit faster.

Credit Line Hybrid

This is a type of unsecured business credit financing. That means there is no need for collateral.  Now, they will check your personal credit score, and it is best if you have established business credit.  However, you can still use this to build business credit, even if you do not have good personal credit or business credit.

If you do not qualify, you can take on a credit partner who does qualify.  Because the credit line hybrid will be in the business name, the payments will be reported to the business credit reporting agencies, and your business credit score will start to grow.

Vendor Credit

This is probably the easiest and fastest way to begin building business credit.  However, do not be fooled into thing that just because it is easier and faster than the other options that it is either easy, or fast.  All good things take time and effort and building business credit is no different.

Vendor credit comes from certain starter vendors that will offer net terms on invoices without a credit check. Of course, they will require other information to ensure they reduce their risk as much as possible.  They may want to see a certain average balance in a business bank account, or they might want to see you have been in business for a minimum amount of time.

However, once approved for net invoicing, they will report your invoice payments to the business credit reporting agency and you will be off to the races.  As your score grows, you will be able to qualify for more and more accounts with various creditors.  As long as you handle the credit responsibly, your score will continue to grow strong.

Business Loan Credit Score and Fundability: What Else Affects Fundabilitybiz loan credit score Credit Suite

Remember, business credit is only one piece of fundability, albeit a relatively large piece.  What else affects fundability?

Licenses

For a business to be legitimate it has to have all of the necessary licenses it needs to run.  If it doesn’t, red flags are going to fly up all over the place.

Website

These days, you do not exist if you do not have a website.  However, having a poorly put together website can be even worse.  It is the first impression you make on many, and if it appears to be unprofessional it will not bode well for you with consumers or potential lenders.

Other Business Data Agencies

In addition to the business credit reporting agencies that directly calculate and issue credit reports, there are other business data agencies that affect those reports indirectly.  Two examples of this are LexisNexis and The Small Business Finance Exchange. While you may not be able to access or change the data the agencies have on your business, you can ensure that any new information they receive is positive.  Enough positive information can help counteract any negative information from the past.

Identification Numbers

In addition to the EIN, there are identifying numbers that go along with your business credit reports.  Some of them are simply assigned by the agency, like the Experian BIN.  One, however, you have to apply to get.  It is absolutely necessary that you do this.

Dun & Bradstreet is the largest and most commonly used business credit reporting agency.  Every credit file in their database has a D-U-N-S number.  To get a D-U-N-S number, you have to apply for one through the D&B website.

Business Information

It may seem like a no brainer that all of your business information should be the same everywhere you use it.  However, when you start changing things by adding a business phone number and address or incorporating, you may find that things slip through the cracks.

This is a problem. Tons of loan applications are turned down each year because of fraud concerns.  When things don’t match up, lenders get nervous.  Maybe your business licenses have your personal address but now you have a business address.  Perhaps some of your credit accounts have a slightly different name or a different phone number listed than what is on your loan application. Do your insurances all have the correct information?  If you use an ampersand in one place, you can’t change it to the word “and” in another.  Everything has to be exactly the same everywhere.

Financial Statements

Both your personal and business tax returns need to be in order.  Not only that, but you need to be paying your taxes, both business and personal.

Business Financials

It is best to have an accounting professional prepare regular financial statements for your business. Having an accountant’s name on financial statements lends credence to the legitimacy of your business. If you cannot afford this monthly or quarterly, at least have professional statements prepared annually. Then, they are at the ready whenever you need to apply for a loan.

Personal Financials

Often tax returns for the previous three years will be enough.  Get a tax professional to prepare them.   This is the bare minimum you will need.  Other information lenders may ask for include check stubs and bank statements, among other things.

Bureaus

In addition to FICO reporting personal credit, you have ChexSystems.  In the simplest terms, this keeps up with bad check activity and makes a difference when it comes to your bank score.  If you have too many bad checks, you will not be able to open a bank account.  That will cause serious fundability issues.

Personal Credit History

Your personal credit score from Experian, Equifax, and Transunion all make a difference.  You have to have your personal credit in order because it will definitely affect the fundability of your business.  The best way to get a strong personal credit score or improve a weak one is to make payments consistently on time.

Application Process

You probably never considered this point.  Many don’t.  For example, think about the timing of your application.  Is your business currently fundable?  If not, do some work first to change that.  Next, make sure that your business name, business address, and ownership status are all verifiable.  Lenders will check into it.  Then, make sure you choose the right lending product for your business and your needs.  Do you need a traditional loan or a line of credit?  Would a working capital loan or expansion loan work best for your needs?  Choosing the right product to apply for can make all the difference.

Business Loan Credit Score and Fundability: It’s Not Too Late, Start Now

Wherever you stand with business loan, credit score, and fundability, its never to late to make a change.  Taking all of this into account, get started now so you can ensure the best chance for your business to get the funding it needs.

Check out our trustworthy list of seven vendors to help you build business credit.

The post The Business Loan Credit Score and Fundability Connection appeared first on Credit Suite.

Biden Learns to Love Brett Kavanaugh

Democrats suddenly adopt the theory of the unitary executive.

The post Biden Learns to Love Brett Kavanaugh appeared first on ROI Credit Builders.

House Flipper Financing

Looking for House Flipper Financing?

Fixing and flipping houses is expensive. You have to lay out a lot of cash for rehab, repairs, and improvements. Your payoff, if it comes, can be months or years later. But house flipper financing can help.

Flipping is a lot of physical and manual labor, because if you paid contractors, you wouldn’t make any money! High tax bills can come with flipping, due to short term capital gains. See flippingprosperity.com/why-flipping-houses-is-a-bad-idea.

You Need House Reseller Funding

There are several ways you can get money to fix and flip houses. These methods can help. You can smooth out the inevitable financial highs and lows that come with flipping. You won’t be dipping into your personal savings as much.

Try a Home Equity Loan for House Flipper Financing

Do you currently own a home beyond the house you intend to flip? A home equity line of credit (HELOC) is a potential source of funding. Home equity lines of credit are secured by your house, so you can get financing at a low interest rate.

HELOCs are based on the equity you have in your home. This is the value of your home minus what you owe on the mortgage. You can tap into a HELOC if you have at least 20% equity in your home, and you can borrow up to 85% of the home’s equity.

Demolish your funding problems with 27 killer ways to get cash for your business. Get money even during the worst of a recession.

Try an Investment Property Line of Credit for House Reseller Funding

If you own a rental property, you may be able to take advantage of an investment property line of credit. Like a HELOC, you can borrow against your investment property’s equity. Again, the property serves as collateral.

To qualify for an investment property line of credit, you often need good to excellent credit. Plus you need to have a history of successful real estate investments. In general, you must own the property for at least one year before you are eligible.

Try a Business Line of Credit for House Flipper FinancingHouse Flipper Lending Credit Suite

Speaking of lines of credit, if you’re an experienced flipper and have a history of completed deals and profits, another financing option is a business line of credit. With a business line of credit, you get access to a revolving credit line. You can use up to a set amount, but you only make payments and pay interest one the amount you actually use.

Business lines of credit are especially useful for home flippers. This is because you can use it again and again if and when issues pop up. Another option is to tap into it when you tackle your flip. Most banks offer business lines of credit, but you generally need to have excellent credit and a stable history of flipping success to qualify.

Try Seller Financing for House Flipper Financing

With this approach, you work with the seller to come up with a payment plan, and to create a contract. You make payments directly to the seller on an agreed-upon schedule, based on a price you both set with interest. But it is not regularly available.

Seller financing poses more risk to the original property owner. As a result, you often pay a higher interest rate, and have a shorter repayment term than with other loans.

Try a Bridge Loan for House Flipper Financing

With a bridge loan you can cover the gap between when you want to buy a property, and when you can secure long-term financing. It can help you cover the cost of the down payment on your next flip, and then you can focus on finding another financing option, like a traditional mortgage, to pay for the rest.

Bridge loans are generally secured by collateral, so you can qualify for a loan with a lower interest rate, versus some other financing options. They are often easier to qualify for than other loans.

Try a Cash Out Refinance Loan for House Flipper Financing

This is a financing strategy where you refinance an existing property, to fund your flip’s purchase or renovations. Use your current home’s equity to take out a new loan and pay off the existing mortgage, and you can use anything left over to finance your flip.

For a cash out refinance loan to work best, you need to have 30% to 40% equity in your home. Otherwise, this approach is not cost-effective. So don’t bother unless you have that kind of equity in your home.

Try a Permanent Bank Loan/Online Mortgage for House Flipper Financing

If you want to buy a home that you can stay in for five years or more while you renovate it, then a regular mortgage with a fixed interest rate from a bank or credit union is likely the best idea. You qualify for lower interest rates than you’d get with other financing options and have up to 30 years to make payments on the loan.

You must have enough money saved for a down payment, and good to excellent credit, and a stable income, to qualify for a mortgage.

Demolish your funding problems with 27 killer ways to get cash for your business. Get money even during the worst of a recession.

Try a Hard Money Loan for House Reseller Financing

If you are an experienced investor who has completed a few flips before, or you have poor credit, or you having troubles other financing options, try a hard money loan.

With a hard money loan, you work with non-bank lenders, these can be individuals or online lenders, in order to get the money you need.

Hard money lenders often have less stringent eligibility requirements. So you can qualify for financing even if your credit score isn’t great. You can often get the money fast. But note hard money loans tend to have higher interest rates than other types of loans, and they often have shorter repayment terms. See nav.com/blog/fix-and-flip-loans-306111.

Did You Know that Credit Suite Offers House Flipper Financing?

Enjoy a quick closing and high loan-to-values with our rehabilitation loans. Rehab loans are tailored for the real estate investor who wants to purchase, rehab, and flip residential properties. Using the property as collateral, funds are available for short-term residential renovation projects that most traditional banks and credit unions won’t approve.

You can Get Approved for House Reseller Financing Through Credit Suite

There are three main elements lenders are looking at to approve you for this program. You should have prior and recent flipping experience. Lenders will ask you to list your recent projects verifying that you have recent experience of selling 2 homes or more. Lenders will verify that you have average credit. You can be approved with credit scores as low as 640 long as you don’t have any recent severe negative credit items on your report.

The last element lenders are looking at to approve you for this program is, you should be liquid. Lenders want to see that you have money in the bank, and you will be required to put funds into an escrow account for security. The amount of liquid funds varies based on project, but you should only apply if you have at least $30,000 in liquidity now. So you can be approved, even with average credit, as long as you have some flipping experience and money in the bank.

Demolish your funding problems with 27 killer ways to get cash for your business. Get money even during the worst of a recession.

Check Out These Terms for House Reseller Financing Through Credit Suite

Get approval for 100% of the financing you need to buy and rehab residential properties. Lenders will verify that the amount you are requesting is 65% or less of after-repair value of the property. You can be approved for a short-term loan of 6 months and can also get extended terms upon request. There is no prepayment penalty, so you can sell the home faster and pay off the entire loan without any cost to you whatsoever.

Check Out the Benefits of House Reseller Financing Through Credit Suite

Get 100% of funds to purchase and rehab property. Pay no application fees. A simple application is all that’s needed for approval. Get approved with average credit and enjoy 48-hour pre-approval.

Application to funding in 3 weeks or less. Pay rates of 8 – 18% based on risk. Get financing for multiple homes. Get loans starting at $25,000. Apartment rehab financing is available.

Here are Details of House Reseller Financing Through Credit Suite

Get approved for $25,000 – $2 million. Average credit is accepted. The property serves as the collateral. But note financials are required.

House Reseller Financing: Takeaways

House resellers have several options when it comes to getting funding. Option eligibility may depend on credit score, and often your experience with flipping. Credit Suite offers house reseller financing. Get money fast, and at great rates. Let’s take the next step together.

The post House Flipper Financing appeared first on Credit Suite.

How to Build Business Credit in 30 Days

Find Out How to Build Business Credit in 30 Days

You may have heard of business credit, which is credit in the name of a business and not its owner. It is an ongoing process and you must do it proactively. That is, it won’t just happen – you have to make it happen. Did you know that in 30 days, you can hit the ground running and build business credit?

How to Build Business Credit in 30 Days: You Need to Get Fundable

There are a number of things you can do to make your business more fundable. That is, more likely to get funding. Here are some acts you can take which are fast. They will give you quick bang for your buck.

Getting Fundable is About More than Building Business Credit

Yes, it will help you get business credit fast. But building fundability also bakes credibility right into your business. This will help you attract prospects, and it will help you convert more of them into customers.

Getting fundable may even help to shorten your time to close. And it will do so long after the 30 day time period has expired. A lot of these steps will require a phone call to a provider or chatting online. To expedite matters, get someone to help you, so you can get the preliminaries done in a total of maybe 2 or 3 days.

Fast Business Credit Building starts with Your Business Name

Does your business contain the name of its industry? That can be problematic if you’re in what is considered to be a risky industry. Risk is usually defined as a higher chance of injury on the job and/or businesses which perform more cash transactions than most other companies. To become more fundable, don’t add the name of a risky industry to your business name. Deciding on your business name can take less than a day.

Demolish your funding problems with 27 killer ways to get cash for your business. Get money even during the worst of a recession.

How to Build Business Credit in 30 Days: Consider Your Business Phone Number

A cell phone or home phone number will get your business flagged. It will not be considered to be established. This will harm your business in your quest for fundability. But you can use VOIP (voice over internet protocol). This enables any phone number to ring any device. So you can still use your cell phone. Setting up a VOIP will take far less than a day.

Toll-free numbers are best. That is, 800 or an equivalent exchange, such as 877 or 888. You also want to have a 411 listing. You can get one via ListYourself.net. Lenders and credit providers will be looking for your phone numbers, so make them findable. You can a toll-free number fast through a provider like RingCentral.

How to Build Business Credit in 30 Days: Your Business Address

Working from a residence can be a red flag to lenders and credit providers. They will check your business address on Google Street View and flag it as residential, and you’ll be denied business credit. A virtual business address can address all these issues.

You get a deliverable address – not a PO box or UPS box, which would also be flagged and generate a denial. This means an actual brick and mortar address. Some plans give you access to clerical help, conference rooms, mail forwarding, and more. Three we really like are Alliance, Da Vinci, and Regus. You can contact any of these providers and get a fast live quote.

How to Build Business Credit in 30 Days: Your Business Website

You must have a professional-looking website and email address. Your domain needs to be yourcompany.com or .net if you can get that. Never use Wix or Weebly. You will need hosting through a hosting company like GoDaddy. You can buy a domain and set up a website (larger hosting companies will provide services to help if you’re inexperienced with this) in maybe a day.

Don’t Forget About Your Business Email

Your email address needs to be on the same domain as your website. Generic professional names work well, something like [email protected] or [email protected]. Don’t use Gmail, Yahoo, AOL, or the like. But don’t worry about checking yet another email address, you can have any email forward to any other email. You can set all of this up at the same time you set up hosting.

Fast Business Credit Building Means a Trip to The Secretary of State’s Office

The Secretary of State’s office has info on every license needed to run your business. They also have helpful information, like if you need to take continuing education to maintain your license. Processing time varies, in some states, it won’t be done in time.

But even if licensing will come past the 30 day mark, you can at least get started with getting your licensing. Even business credit providers which insist that you have your license(s), may make an allowance if you can prove you have put in your application. So be sure to print and keep copies of receipts and forms.

Demolish your funding problems with 27 killer ways to get cash for your business. Get money even during the worst of a recession.

Let’s Look at Your Business Bank Account

Many business credit providers will insist that you have a business bank account. It must be devoted to your business. This will also help to keep you from accidentally commingling funds. You can apply for a business bank online at many banks, even if the bank has brick and mortar locations.

In particular if you have a personal account with a bank, and you’ve managed it well, you can get a business bank account fast. You can often be approved within as little as 15 minutes online. But it may take longer for you to get a debit card or checks or the like in mail. So to save time, you may want to do this in person.

Don’t Forget about Your EIN and Business Entity

Visit the IRS website and get a free EIN for your business. Choose a business entity like corporation, LLC, etc. You can start off as a sole proprietor. But you will most likely want to change to a type of corporation. This is to minimize risk and maximize tax benefits. Note: a DBA is not a separate business entity.

Getting an EIN and choosing a business entity at IRS.gov are both fast. They will happen as quickly as your internet connection allows. Doing these things at this stage of the game means you’ve got a set business address, phone numbers, etc. So you wouldn’t have to change them later.

Take a Look at SIC and NAICS Codes

You will also choose codes at IRS.gov. SIC and NAICS codes classify your business. The IRS is moving from SIC to NAICS. But for now, consider both to be in play.

Codes show what your business does. For example, NAICS code 531312 means Nonresidential Property Managers. If your business could fit under one or more code, choose the less risky code

Lenders and credit providers are far less likely to approve a business if they consider it to be risky. Risky often means a higher chance of injury on the job or a business with more cash transactions than the average. You choose codes at the same time as you get your EIN and select a business entity. You can get all this done in less than an hour (internet permitting).

Incorporating Your Business

The amount of time it takes to incorporate will vary. It will depend on the state you’re incorporating in. It will also depend on the means you use. In general, online will be faster.

Even if you apply to incorporate online, you may still have to wait a few business days. In general, you will need Articles of Incorporation. If you want them drafted quickly and correctly, you’ll probably need to hire a corporate attorney to get this done. In the meantime, you can be working on some of the other things you need to get fundable and quickly build business credit

Fast Business Credit Building means getting Your D-U-N-S Number

Build Biz Credit in 30 Days Credit SuiteTo build business credit, you will need a D-U-N-S number from Dun & Bradstreet. A D-U-N-S number + 3 or more reported payment experiences will generate a business credit report. And, therefore, you’ll have built business credit.

Go here: dnb.com/duns-number/get-a-duns-number-product.html. The free product will send you a D-U-N-S number within 30 days. But with our time frame, you don’t have that kind of time to wait around. Hence, you’ll end up spending $229 to get an expedited D-U-N-S number in 5 business days or less.

The $229 (DUNSFile + CreditSignal) will also get you monitoring, but it’s only monitoring of D&B business credit scores. You will also get alerts when your score changes. And you will get a full basic D&B business credit file.

How to Build Business Credit in 30 Days: Establish Payment Experiences

Lenders consider your credit history as one of the chief factors when determining creditworthiness. Making timely payments will demonstrate to anyone looking to do business with your company that you’re low risk. You can open most credit accounts online in just a few minutes. But it will take longer to see the impact on your credit report. To save time, you only want vendors which will report to the business credit reporting agencies.

Demolish your funding problems with 27 killer ways to get cash for your business. Get money even during the worst of a recession.

It’s Vital to Work with Vendors Which Report

Most vendors don’t report. But here are three that do: Uline at uline.com, Crown Office Supplies at crownofficesupplies.com, and Strategic Network Solutions at stntsol.com.

Even vendors which report may need you to reach a certain minimum before they will report. Crown Office Supplies requires an annual membership (for a fee). So check the fine print and call or chat online with a representative to get information fast, which you know will be correct. And keep in mind, it can take over 30 days for reported purchases to show up on your business credit report.

How to Build Business Credit in 30 Days: Takeaways

When all is said and done, it may take over 30 days to build business credit. But if your business is already set up, that will save time. You may need to pay to get everything done faster, and correctly the first time (which will also save time). But no matter what, once the 30 days have elapsed, your business will be set up well and will exude fundability.

A highly fundable business setup will only help you in the years to come. We can help you get started. And we can help you get everything done a lot more quickly. Let’s work together to build your business credit as fast as possible.

The post How to Build Business Credit in 30 Days appeared first on Credit Suite.

Lawn Love (YC S14) Is Hiring a Head of SEO (Remote)

Article URL: https://apply.workable.com/lawn-love/j/434A86963B/ Comments URL: https://news.ycombinator.com/item?id=25848779 Points: 1 # Comments: 0

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The post Lawn Love (YC S14) Is Hiring a Head of SEO (Remote) appeared first on ROI Credit Builders.

Is an SBA Startup Loan Right for You?

Whether you are thinking of starting a business in recession chaos or during economic Shangri-La, an SBA startup loan could be just what you need to get up and going.

All You Need to Know About Getting an SBA Startup Loan, and Other Options for Right Now

The Small Business Administration is in the news big time right now in relation to COVID-19 relief for businesses.  However, if you are looking to start a business, their SBA startup loan programs are still available.

SBA Startup Loans: Why SBA Loans?

SBA loans are small-business loans guaranteed by the Small Business Administration.  The loans are issued by participating lenders, mostly banks. The  guarantee can go up to 85% of a loan of $150,000 or less, and loans that are more than $150,000 they will guarantee up to 75%.

Find out why so many companies use our proven methods to get business loans, even during a recession.

Who Qualifies for an SBA Startup Loan?

To be eligible for SBA Loans, you must meet certain qualifications. These include:

  • Your business must be for profit.
  • Your business must be inside the US.
  • Business owners must invest equity.
  • You must have exhausted all other financing options.
  • Your business must qualify as a small business.
  • Your business must be in an eligible industry.

Repaying an SBA Startup Loan

One perk of an SBA loan is that you get more time to pay it back than you would otherwise. According to the SBA, the terms depend on how you intend to use the funds.

For example, working capital loans, or funds you intend to use for daily operation, have a repayment term of seven years. However, funds for new equipment purchase have a term of 10 years, and real estate loan terms extend even longer to 25 years. Of course, the longer the term the lower the interest, which means lower regular payments.

How to Apply for an SBA Startup Loan

One of the downsides to SBA government loans is that they have a lengthy and somewhat complicated application process. There is a lot of red tape involved, but understandably so considering it is the federal government and they are guaranteeing a huge chunk of the loan.

Get Your Eggs in a Row

The first thing you have to do is gather the information you will need. This includes:

  • The SBA borrower loan information form
  • Statement of personal history
  • Personal financial statement
  • Personal income tax returns for the previous 3 years
  • Tax returns for the business for the previous 3 years
  • Business certificate or license
  • Business lease
  • Loan application history

This list, along with links to forms and templates, is available at SBA.gov. Once you have this information, you can start looking for a lender.

There may be more requirements based on your specific lender and what they deem necessary for your individual case. However, this is a general list to get you started.

Find out why so many companies use our proven methods to get business loans, even during a recession.

Find an SBA Partner Lender

There is more than one way to go about this. The first way is to contact your SBA district office. You can find contact information through the website. Another option is to use the SBA lender match option on the website.

All you have to do is enter some basic information about your business and how you plan to use the funds.  The tool then matches you with a list of potential lenders that could meet your needs.

Which Program Works Best for an SBA Startup Loan

Not all SBA loan programs work for startups.  These are your best options.

SBA Startup Loan: 7(a) Loans

This is a cornerstone program for the SBA.   It 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.

The minimum credit score to qualify is 680.  There is also a required down payment of at least 10% for the purchase of a business, commercial real estate, or equipment. The minimum time in business is 2 years. If you are a startup, business experience equivalent to two years will serve this purpose.

SBA Startup Loan: 504 Loans

SBA loan Credit SuiteThese loans are also available up to $5 million.  Funds can be used to purchase machinery, facilities, or land. They are generally used for expansion.  Private sector lenders or nonprofits process and disburse funds. They work well for commercial real estate purchases especially.

Terms for 504 Loans range from 10 to 20 years, and funding can take from 30 to 90 days. They require a minimum credit score of 680.  Collateral is the asset the funds are financing. There is also a down payment requirement of 10%, which can increase to 15% for a new business.

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.

SBA Startup Loan: 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 non-profits administer microloan programs as intermediaries, with financing coming directly from the Small Business Administration.

Interest rates on these loans are 7.75% to 8% above the lender’s cost to fund, and the terms go up to 6 years. They can take upwards of 90 days to fund. The minimum credit score is 640, and the collateral and down payment requirements vary by lender.

What If an SBA Startup Loan will Not Work?

What if, for some reason, an SBA startup loan will not work.  Maybe you need collateral and do not have it? Perhaps you would rather not deal with down payment requirements.  What if you need more funding? Here are some other options.

Alternative loans

These are loans that come through private lenders rather than banks.  Most  of these lenders operate online.  The process is fast and simple. Typically, borrowers fill out an application online.  Generally, they receive approval in as little as a few hours.  Once approved, funds are often in the borrower’s account in as little as a day or two.

This fast, easy process makes these alternative loans attractive for business funding.

Is There a Catch to Alternative Small Business Loans?

If these alternative loans are so fast and easy, why even bother with traditional loans or even an SBA startup loan?  There has to be some catch, right?.  The catch is, interest rates and terms are considerably less favorable than those you may get with a traditional lender.

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

How do I Choose the Right Alternative Loan for Me?

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

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

How to Start Finding the Right Alternative Small Business Loans

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

If you know your score and what your annual revenue is before you begin looking for alternative small business loans, you will be able to weed out the ones you do not qualify for from the beginning. There are so many that you will definitely see the need to do this.

Find out why so many companies use our proven methods to get business loans, even during a recession.

Credit Line Hybrid

What if there were an option that allowed you to have an even better interest rate than a secured loan, and yet get the money faster and easier than any type of traditional funding.  What if you could get business funding without having to supply any bank statements or credit stubs? Imagine that you could get funding in a few days rather than weeks without supplying any collateral or documents? This is exactly the credit line hybrid allows you to do.

What is a Credit Line Hybrid?

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

What are the Qualifications?

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

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

What are the Benefits of a Credit Line Hybrid?

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

Not only that, but typically approval is up to 5x that of the highest credit limit on the personal credit report. Additionally, often you can get interest rates as low as 0% for the first few months, allowing you to put that savings back into your business.

The process is pretty fast, especially with a qualified expert to walk you through it.  One other benefit is this.  With the approval for multiple credit cards, competition is created.  This makes it easier, and likely even if you handle the credit responsibly, that you can get interest rates lowered and limits raised every few months.

Make Sure You’re Eligible for SBA Startup Loans and All Other Financing Options

The key to ensuring you can get the funding you need for your business when you need it is to make sure your business is fundable.  Most people think of credit score when they think of fundability, but there is so much more to it than that. Fundability is made of many pieces, and they all have to be in place for things to work the way you need them too.  If your fundability is in order, getting an SBA startup loan, or any other kind of loan, will likely never be a problem.

The post Is an SBA Startup Loan Right for You? appeared first on Credit Suite.

5 Credit Myths Debunked

There are a ton of myths out there related to both personal credit and business credit.  Credit myths have been around for as long as the idea of credit itself.  Knowing what’s real and what’s not can make all the difference in how you are able to run your business. 

These Credit Myths Aren’t What They Appear

We’ve all heard these credit myths.  Even if we haven’t, it’s likely we’ve believed them without knowing why.  While there are plenty more out there, here are some of the most common, and the truth about what you really need to know. 

Credit Myths Debunked: Personal Credit Is All You Need to Run a Business

The smidge of truth behind this is, you actually can run a business on your personal credit alone.  Many a business owner has done it.  Most, however, would agree it isn’t ideal.  In fact, I’d say it’s likely if they had known about business credit earlier, they wouldn’t even have attempted it. If your business goes bankrupt you could lose your house and your car.   Since, according to Forbes, at least 70% of small businesses do not make it even 10 years, it’s a terrible idea to fund your business with your personal credit only. 

Is There Even Such a Thing as Business Credit? 

 The answer is, yes.  There is absolutely such a thing as business credit.   It is credit based solely on the merits of your business’s ability to repay business debt.  It is totally separate from personal credit. When set up properly, the accounts that report to your business credit do not affect your personal credit, and vice versa. 

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit.

Why Do You Need Business Credit? 

First, if your business goes south and you are not able to make good on your business accounts, your personal credit will not suffer.  You will still be able to buy a home or car without the fear of your business troubles affecting it. 

Consequently, if your personal credit takes a dive, you will still be able to get the funding you need for your business.   That’s not all though.  Even if you make your payments as you should, running a business on personal credit can cause problems. 

Part of what makes up your personal credit score is the debt-to-credit ratio.  This is how much of your available credit you are using versus how much total credit you have available to you.  The higher this ratio is, the lower your credit score.  So, if you have $10,000 in available credit, but you have a balance on your cards totaling $8,000, your debt to credit ratio is .8.  However, if your total balance is $2,000, your debt to credit ratio is .2.  That looks a lot better to lenders. 

Now, considering that business accounts are typically much larger than personal accounts, if you are funding them with personal credit you are much more likely to stay at or near your total credit limit.  That means, even if you are regularly paying off your balance, you are likely going to keep a debt to credit ratio near 1, resulting in a lower personal credit score. 

How Does Business Credit Help?

Business credit limits are typically much higher than personal credit limits.  In addition, the debt to credit ratio does not really affect business credit scores the same way it does personal credit scores.  Therefore, if you establish separate business credit for your business, you can protect your personal credit from your business expenses and more efficiently fund your business. 

Credit Myths Debunked: Personal Credit Doesn’t Affect Your Ability to Get Business FundingCredit Score Myths Credit Suite

On the flip side, you shouldn’t think that your personal credit cannot affect your ability to get business funding at all.  While, in the strictest sense it does not affect your business credit report or score, it can still have an impact on your lender’s overall funding decision.  

ome business credit reporting agencies use your personal credit in the calculation of your business credit score.  Sometimes, if a business hasn’t been around long enough, a combined personal and business credit report will be issued. 

For many lenders, personal credit score is a key piece of overall fundability. This is the total ability of a business to handle all debts.  It is a puzzle made of many pieces, and while business credit is the largest piece, personal credit still has its place.  So, don’t think if you have business credit that personal credit doesn’t matter.  You can’t just ignore it. 

Credit Myths Debunked: Business Credit is All that Matters When Funding a Business

Not only does personal credit have an impact on overall fundability, but so do a number of other things.  In addition to business credit and personal credit, your business’s overall fundability is affected by the following things. 

How Your Business is Set Up

The way your business is set up can affect fundability.  Consider the following: 

  • Contact Information

Does your business have its own phone number and address?  It should. 

  • EIN

Do you have an EIN for your business?   This is an identifying number for your business that works in a way similar to how your SSN works for you personally.  You can get one for free from the IRS.

  • Incorporate

Incorporating your business as an LLC, S-corp, or corporation is necessary to fundability.  It lends credence to your business as one that is legitimate. It also offers some protection from liability. It also truly separates your business from you and your personal assets.

  • Business Bank Account

You have to open a separate, dedicated business bank account.  There are many reasons for this, but for fundability you need to know two things.  First, it helps establish your business as an entity separate from you the owner.  Next, time in business matters to lenders.  Many lenders consider the date the business bank account was opened to be the start of business. 

Another thing to consider is, you cannot get a merchant account without a business bank account.  Without a merchant account you cannot accept credit card payments.  Since studies show people are much more likely to spend if they can use a credit card, you need to be able to accept them as a form of payment. 

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit

  • Licenses

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

  • Website

These days, you do not exist if you do not have a website.  However, having a poorly put together website can be even worse.  It is the first impression you make on many. If it appears to be unprofessional, it will not bode well for you with consumers or potential lenders. 

Business Information

On the surface, it seems obvious that all of your business information should be the same across the board everywhere you use it.  However, when you start changing things up like adding a business phone number and address or incorporating, you may find that some things slip through the cracks. Non-uniform business information can cause fraud concerns. 

Other Business Data Agencies 

In addition to the business credit reporting agencies that directly calculate and issue credit reports, there are other business data agencies that affect those reports indirectly.  Two examples of this are LexisNexis and The Small Business Finance Exchange. These two agencies gather data from a variety of sources, including public records.  

The Application Process

Even the application process can affect overall fundability.  First, consider the timing of the application.  Is your business currently fundable?  If not, do some work first to increase fundability.  Next, ensure that your business name, business address, and ownership status are all verifiable.  Lenders will check into it.  Lastly, make sure you choose the right lending product for your business and your needs.  Do you need a traditional loan or a line of credit?  Would a working capital loan or expansion loan work best for your needs?  Choosing the right product to apply for can make all the difference. 

So, while it is true that business credit is a big part of what lenders look at when it comes to approving funding, maybe even the biggest part, there is more to it. 

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit.

Credit Myths Debunked: You Must Have Credit to Get Credit

This is true in a sense.  We’ve all heard and even seen it. You apply for financing but are turned down because you don’t have any credit.  But, how do you ever build credit without getting credit?  There’s a trick that few know, and it’s called starter vendors

These are vendors that will issue net terms on invoices without a credit check. Then, they will report your payments on those invoices to the business credit reporting agencies.  As a result, your business credit score starts to grow and you can eventually apply for types of financing. 

Credit Myths Debunked: Making Payments on Time is All that Matters

Of course, making payments on time definitely matters.  If you do not make payments on-time, there isn’t much you can do other than to start making them on time.  However, you can make every payment on time, and if your overall fundability isn’t in order you may still get denied. 

For example, if all of your business information isn’t uniform across the board, a lender may deny your application due to fraud concerns.  If your business doesn’t have its own contact information or separate bank account, a lender may not take it seriously as a legitimate business.  When it comes to fundability and getting approval for financing, everything counts. 

Don’t Let These Credit Myths Keep You from Getting Funding for Your Business

There are other credit score myths out there, but these seem to be some of the most common misconceptions about credit.  Don’t let them keep you from getting the funding you need to run and grow your business.  Do your own research. Understand where you are in terms of fundability. Then, you can give yourself the best chance as approval for whatever type of funding you need. 

 

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There's as Much to Learn From Trump's Success as His Disgrace

Responsible leaders made his election possible by creating a vacuum that a demagogue could fill.

The post There's as Much to Learn From Trump's Success as His Disgrace appeared first on ROI Credit Builders.

401(k) Plan Financing

What is 401(k) Plan Financing?

You already know that your retirement funds are an asset. But did you know that you can use them right now? Do you have a 401(k) or an IRA or stocks? Did you know that you can tap that source of funding now? And you can do so without losing interest. You will not get in trouble tax-wise, either. Yes, it is possible to get 401(k) plan financing for your small business.

401(k) plan financing is not a loan. You will not have to pay an early withdrawal fee. And you will not have to pay a tax penalty.

You will put the money back, by contributing, just like you do with any 401(k) program. This means you will not lose your retirement funds.

What are Some of the Details of 401(k) Plan Financing? 

Our 401(k) plan financing offers a powerful and flexible way for new or existing businesses and franchises to leverage assets that are currently in a 401(k) plan or IRA. Or these are assets which are tied up in stocks. In as little as 3 weeks you can invest a portion of your retirement funds into your business. This gives you more control over the performance of your retirement plan assets. And it gives you the working capital you need for business growth.

Is the IRS Happy with 401(k) Plan Financing?

Absolutely! This is a 401(k) Rollover for Working Capital program. It is also known as a Rollover for Business Startups (ROBS), as the IRS calls it.

Demolish your funding problems with 27 killer ways to get cash for your business. Get money even during the worst of a recession.

What Are the Tax Implications of 401(k) Plan Financing? 

Per the IRS, a ROBS qualified plan is a separate entity with its own set of requirements. The plan, through its company stock investments, rather than the individual, owns the trade or business. Therefore some filing exceptions for individuals, may not apply to such a plan. As always, it is going to be best to check with an expert.

What are the Specifics? 

This type of financing is not a loan against, your 401(k), so there is no interest to pay. It does not use the 401(k) or stocks as collateral. Instead, this is simply a movement or change of custodian.

How Do You Qualify? 401k Plan Funding Credit Suite

401(k) financing is quite easy to qualify for. You will not need financials or good credit to get approval. To qualify for 401(k) financing, all the lender will require is a copy of your two most recent 401(k) statements.

If your 401(k) has a value of more than $35,000 you can get approval. This is even with severely challenged personal credit. You can receive whichever percent of your 401(k) is “rollable” as financing.  In many cases, you can secure a low-interest credit line or loan for 100% of your current 401(k) value.

Keep in Mind…

The 401(k) you use cannot be from a business where you are currently working. So it will have to be from older employment. You cannot be currently contributing to it. Your 401(k) must have at least $35,000 in it.

Demolish your funding problems with 27 killer ways to get cash for your business. Get money even during the worst of a recession.

What if a Business Owner Has Credit Issues Now? 

Our 401(k) financing program is perfect for business owners with credit issues. Because lenders are not looking for, nor do they require good credit to qualify. Approval can happen regardless of personal credit quality. You can get approval even if you have recent derogatory items and major collections on your credit report. This is one of the best and easiest business financing programs in existence. You can qualify for and get really good terms even if you have severe personal credit problems.

How Soon Can You Get 401(k) Funding? 

The only documents the lender wants to see are your 401(k) statements. The last full statement should be one of them. After the lender reviews your 401(k) statements, you can receive your initial approval and funding in 3 weeks or less. You can get a working capital credit line to use for whatever purposes you want.

What are the Benefits? 

You can get 24-hour preapproval. And you pay no penalties for the roll-over. It is just an easy 401(k) review for approval. Plus you pay no application fees.

You can get approval with poor credit. Go from application to funding in 3 weeks or less. This form of financing reports to the business credit reporting agencies. Therefore you can build business credit while you pay back your 401(k) financing!

Set up a 401(k) plan in your company, and then invest your 401(k) in it. Your company becomes cash rich, and debt-free.

You will work with a CPA. They will help you roll over a non-contributing and qualifying account. This allows for cash out of half, or $50,000, whichever is lower.

If applicable, the CPA you work with will structure a self-directing IRA for the remaining funds. You will get a 5 year management and consulting service for your corporation.

What are the Terms? 

The terms are 5 years, and the cost is 1%. You will pay $4995 for a lender fee for the 401(k) option. So this includes 5 years’ worth of management and consulting.

But is it Legal? 

Absolutely! Under ERISA (the Employee Retirement Income Security Act), the burden of building retirement assets has undergone a shift from the employer to the employee. As a result, you can be younger than 59 ½, and you will not have to pay an early withdrawal fee.

401(k) financing is an excellent opportunity to invest in yourself. By using 401(k) plan financing, you are investing in a company you control. Its fortunes are in your hands. Your employees can use the new 401(k) plan, too. So you can help them take care of their own retirements.

With 401(k) financing, you will be able to enjoy the success of your small business today. And you will be able to enjoy it again in the future when you retire.

Demolish your funding problems with 27 killer ways to get cash for your business. Get money even during the worst of a recession.

Why is 401(k) Financing Better than a Distribution? 

Unless you are 59 ½ years old, you will be paying an early withdrawal penalty. Yes, you would be paying to use your own money. So, you never want to get a distribution!

Why is 401(k) Financing Better than a Loan from Your 401(k)? 

But if your plan allows for loans, the IRS will only let you borrow up to 50%, up to $50,000, before you have to start paying taxes.

Of course with a loan, that means you would be paying interest. Again, you would be paying to use your own money. Plus, not every 401(k) plan so much as allows for loans.

So the bottom line is that 401(k) financing is a unique program. This program allows you to tap into your existing retirement account, with no penalties or taxable distributions. You can use those funds for business. This financing option avoids loans, banks, or credit checks.

401(k) Plan Financing: Takeaways

Investing your 401(k) or IRA money or stocks in your business can be a smart way to fund a company. You pay no interest and create a retirement plan in your business at the same time. This setup is perfectly legal and the IRS definitely allows it. We can help you use your 401(k) to fund your business. Just ask us how.

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