Shopify Payments Review: What Are The Pros And Cons Of Shopify’s Integrated Payment Processor?

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If you’ve spent any time on our blog, you know that Shopify (read our review) is one of our favorite shopping cart solutions, primarily because they provide an all-inclusive solution to a wide range of merchants. One monthly rate gives you access to Shopify’s hosting, security, administrative abilities, customer service features, inventory management features, web design tools, and more.

With the addition of Shopify Payments, an integrated payment processor, you can even access built-in payment processing features. Shopify Payments allows you to quickly begin accepting orders on your online store. You won’t have to worry about integrating a third-party processor, and Shopify will waive their shopping cart transaction fees.

However, despite its convenience, Shopify Payments is not a perfect solution. Customers often complain that they do not qualify to use the service. Others say that Shopify Payments has frozen their account or is holding payments.

Keep reading to learn if you qualify for Shopify Payments and if it’s right for your business.

In this article, we’ll be discussing payment service providers (PSPs). If you’re new to the world of payment processing, we’d love to help get you oriented. Download our free ebook, The Beginner’s Guide to Payment Processing, to get started.

Table of Contents

What Is Shopify Payments?

Shopify Payments is a payment processor that allows you to accept customers’ money securely on your account. Shopify is responsible for these transactions, although they are effectively processed through Stripe and Wells Fargo.

Shopify Payments is already integrated into your Shopify account, so it requires very little setup. There is no need to integrate a third-party processor or coordinate payments with a separate company. All you have to do is select Shopify Payments in your admin and add your banking information. Read Shopify’s setup instructions.

What’s more, Shopify Payments comes with a few additional features, including chargeback management and fraud prevention.

When you use Shopify Payments, Shopify will waive their usual shopping cart transaction fees. The only transaction fees you’ll need to pay are those associated with payment processing.

What Are The Rates?

Every PSP comes with its own processing rates and fees. Shopify Payments bases their rates on users’ subscription level. Users on higher Shopify plans benefit from lower rates. Take a look at the screenshot below for a breakdown of those rates.

Shopify states that they do not charge any monthly fees, hidden fees, or setup fees on their payments service.

Who Can Use Shopify Payments?

Perhaps the most obvious requirement is that you must be a Shopify customer to use Shopify Payments.

Shopify Payments is only available to merchants in the US, Canada, the UK, Ireland, Australia, New Zealand, and Singapore. Shopify Payments is not available to US territories, with the exception of Puerto Rico.

You must follow Shopify’s Acceptable Use Policy. Take a look at the extensive list of products and services Shopify does not support below:

If you do not comply with Shopify Payments’ Terms of Service, you will not be approved or the service may be revoked.

When Do I Get Paid?

Payday is on everyone’s mind. One of the most frequently-asked questions regarding Shopify Payments is how long you’ll have to wait to receive your customers’ payments.

This period — the time between when a customer places an order and when those funds are sent to your bank account — is called a pay period. You should keep in mind that this pay period does not include the amount of time it takes for your bank to process that deposit after it’s sent (typically between 24-72 hours).

Your pay period with Shopify Payments will depend on the country in which your company is based. You can view the full breakdown of pay periods in Shopify’s knowledgebase, or you can see my summary below:

  • US: 2 business days. Funds from Friday, Saturday, and Sunday are grouped and sent together as one payment.
  • Canada: 3 business days. Funds from Friday, Saturday, and Sunday are grouped and sent together as one payment.
  • Australia: 3 business days. Funds from Saturday, Sunday, and Monday are grouped and sent together as one payment.
  • New Zealand: 3 business days. Funds from Saturday, Sunday, and Monday are grouped and sent together as one payment.
  • UK & Ireland: 4 business days. Funds from Saturday, Sunday, and Monday are grouped and sent together as one payment.

Make sure you keep in mind this delay in payments as you plan your business. It might be worth setting up a business credit card so you always have funds on hand.

Pros & Positive Reviews

Customers choose Shopify Payments for a number of reasons. Here are the primary benefits of using Shopify Payments:

  • No Shopify Transaction Fees: While there will always be processing fees, when you use Shopify Payments, you’ll no longer have to pay that 1%-2% transaction fee associated with your Shopify plan. I assume Shopify instead takes their money from your payment processing. Either way, it’s savings for you.
  • Potentially Lower Processing Fees: As I’ve said before, higher-level Shopify merchants benefit from lower rates. You may find that Shopify’s rates are competitive with those of other major processors.
  • Already Integrated: You won’t need any developers to connect with Shopify Payments.
  • Integrated Fraud Prevention: Shopify Payments helps you reduce fraudulent transactions. You can choose to enable an address verification system and a card verification value upon checkout to ensure customers are real cardholders. Read more about fraud analysis.

Shopify Payments is a great solution if you meet the requirements and are looking for a processor that’s easy to integrate.

Cons & Complaints

While Shopify Payments is great for convenience, I’ve seen numerous reports blaming the service for being unreliable and difficult to contact. Here are a few of the most common complaints and disadvantages of using Shopify Payments:

  • Ineligibility: Shopify users often complain that they are not eligible for Shopify Payments. For some, this is because Shopify Payments is not available in their country. In some cases, Shopify has actually revoked payment services because, for one reason or another, their business was deemed “high-risk.” Shopify’s Terms of Service states: “We reserve the right to modify or terminate the Service for any reason, without notice at any time.”
  • Shopify Holds Funds: Merchants frequently complain of their funds being withheld for an extended period of time. Here’s what Shopify Payments’ Terms Of Service says about that: “Stripe, on behalf of Shopify and/or Wells Fargo reserves the right to change the Payout Schedule or suspend payouts to your Bank Account should we determine it is necessary due to pending disputes, excessive Chargebacks or refunds, or other suspicious activity associated with your use of the Service or it required by law or court order.”
  • Difficulties With Chargebacks: Chargebacks are an unfortunate and inevitable part of running an online business. If customers file too many chargebacks against you, Shopify may withhold your funds, further complicating the issue.

Make sure you read the Terms of Service for every solution you sign up with, including Shopify and Shopify Payments. It could save you a world of pain.

Final Thoughts

I’ve seen enough negative reports about Shopify Payments to be skeptical of the service. Many merchants have been denied payments or had the service revoked entirely.

However, without the specifics, it’s difficult to determine whether Shopify was justified or not in these actions. If merchants were not complying with Shopify Payments’ Terms of Service, Shopify was within their rights to cancel the service.

As you make your decision, read every word of Shopify Payments’ Terms of Service to ensure your business qualifies. There are some great benefits to integrated payments, and if your store follows all the rules, Shopify Payments could be the best choice for your store.

But, don’t stop your research there. Take a look at our complete review of Shopify (and the real customer comments below) to learn more about the software, and be sure to read up on Shopify Payments in their knowledgebase. Best of luck!

Liz Hull

Liz is a recent college graduate living in Washington state. As of late, she can often be found haunting eCommerce forums and waiting on hold with customer service representatives. When she’s free, Liz loves to rock climb, watch Spanish dramas, and read poorly-written young adult novels.

Liz Hull

“”

4 Ways Businesses Can Use Hard Money Loans

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In an environment where debts are high and credit tight, non-traditional forms of funding start to fill in the gaps. Within the real estate development industry, one popular form of alternative lending is hard money.

Table of Contents

What Is A Hard Money Loan?

Hard money is a form of private lending secured by property. Since these private contracts largely evade the regulations that govern banking, the terms are governed more by the whims of the lender than anything. However, hard money loans have a few things in common:

  • Fast: A simplified underwriting process means you can get the money much more quickly.
  • Expensive: Expect interest rates in the mid-to-upper teens. You’ll also pay a larger origination fee (2 – 10 percent) than you would with a bank.
  • Short-term: It’s rare for a hard money loan to last longer than five years. Most will last less than one.
  • Negotiable: You have a bit more leeway to haggle with a private lender than you do with a financial institution.
  • Based On Prospective Value: Hard money loans rely on a calculation called loan-to-value ratio. This ratio is based on the potential value of the property. So while a hard money loan will usually only cover a percentage of the property’s cost, that percentage is based on the property’s prospective value, not its current value.

Below, we’ll take a look at how hard money is used by businesses in commercial development.

Buying Property

One of the most straightforward ways for businesses to use hard money is to buy land. As a general rule, hard money lenders are looking for borrowers who also view the property as an investment. While there are exceptions, many frown upon owner-occupier arrangments — for example, intending to build an apartment complex that you’ll also reside in. This usually isn’t a big deal for businesses, but it’s a good thing to keep in mind.

To get the most out of your hard money loan, you’ll want to select a property that you feel is undervalued with the intent of cleaning it up and/or building upon it.

Stop-Gap Funding

In some cases, businesses will use the speedy process offered by hard money to secure a property until they can refinance through less expensive, more traditional means. You’ll want to be pretty sure that your bank loan will come through so you don’t get stuck paying high-interest rates any longer than you have to.

New Construction

Whether you’re acquiring a new property or already own one, a common way of increasing its value is to build something people want on it. This can be residential, commercial, or mixed-use. You will, of course, need to be familiar with the municipality’s zoning laws.

In some cases, the property may already have an obsolete structure on it, in which case you’ll have to take into account the cost of tearing down that structure as well.

Many hard money borrowers will then sell the property at a profit, paying off their hard money loan in the process.

Rehabilitation

Sometimes there’s a serviceable structure already on the property, but it’s outdated or in disrepair. This is the iconic fix-and-flip scenario that was popular before the 2008 financial crash. The difference is you’re dealing with private investor money rather than subprime bank loans.

The fix-and-flip strategy tends to work best in “hot” real estate markets, where you can be relatively sure that your rehabilitated property will sell, and sell quickly.

Final Thoughts

Remember that the idea behind hard money is to get in quickly, increase the value of your purchase, and make your exit. It’s a high-risk, high-reward strategy for developers and renovators who can’t access the funds they need within a critical timeframe. You’ll want to approach hard money lender cautiously, with a good idea of what you’re getting into.

Not sure what other loans are available? Check out our guide.

Chris Motola

Chris Motola is an independent writer, journalist, programmer, and game designer who has mastered the art of using his laptop in no fewer than 541 positions, most of them unergonomic. When he’s not pushing keys or swiping screens, he’s probably out exploring urban or natural environs, experimenting in the kitchen, or delighting/annoying his friends with his ideas and theories.

Chris Motola

“”

Sales Tax Items VS Sales Tax Groups in QuickBooks Pro

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Sales Tax Item vs. Sales Tax Rates in QuickBooks Pro

Are you trying to add a sales tax rate to your QuickBooks Pro account but aren’t sure whether to use a sales tax item or sales tax rate? You’ve come to the right place.

Small business sales tax can be straight-up byzantine, and navigating QuickBooks Pro is equally disorienting at times. In this post, we’ll clearly explain the difference between sales tax items and sales tax groups in QuickBooks. We’ll also help you choose which method is right for your business using accounting advice from real CPAs. Because when it comes to small business sales tax, you simply can’t take chances.

Table of Contents

What’s The Difference Between A Sales Tax Item & A Sales Tax Group?

If you’ve read our Small Business Sales Tax Guide, you know that sales tax is a bit confusing–especially when different states, counties, and even cites charge different tax rates. We’ve contacted real CPAs for their expert advice on handling sales tax rates. But first, we’ll define sales tax item and sales tax group.

A sales tax item is a single tax rate; a sales tax group is a collection of individual sales tax rates that are added together to create a single rate.

Here’s an example. Say you are charging sales tax to a customer in King City, California. King City has a city tax of 0.75% and California has a state tax of 7.5%.

If you were to create a sales tax item, you would impose a blanket tax rate of 8.25%.

If you were to create a sales tax group, you would create one sales tax item for King City and another for California. Add 0.75% to 7.5% for a total group sales tax rate of 8.25%.

When Should You Use A Sales Tax Item?

Tiffany Powell, owner of Sapphire Bookkeeping & Accounting Inc, says:

We generally only recommend using a single tax rate when you are paying all parts of your sales tax to one entity.

Ultimately, it comes down to the individual state rules and whether or not the state requires you to report city, county, and state tax separately.

There’s one other case where you may want to use a single sales tax item in QuickBooks. According to Powell:

You can also use a single rate item when you are listing invoices for Resale or Non-taxable so that you can keep track of amounts excluded from sales tax.

Sally Balson of Balson Bookkeeping Company, LLC, gives the same advice to her clients:

I do also caution my clients to know the difference between non-taxable sales and exempt sales.  You can sell to a church, for example, who is exempt from sales tax but the items you sold are taxable items. Most states require you report sales to exempt organizations separate from non-taxable sales. Then also keep track of the sales tax you paid on item you resell or use to manufacture an item for sale. States allow you to deduct this cost from your sales tax obligation, so you are not double taxing the items.

When Should You Use A Sales Tax Group?

While there are cases where you may want to employ a sales tax item, most small businesses will generally use sales tax groups.

Balson says:

If you operate in multiple counties and/or multiple states, then a Sales Tax Group is better. This allows you to track each collection.  Also, the Sales Tax Group allows you to reuse common Sales Tax Items; for example, you operate in 3 counties and 1 city with sales tax but you have to collect state tax for all those locations so you would set up a group with the state item in each group. On the report you will see a line totaling the state tax collected, each county tax collected, and the city tax collected including the amount of sales for each of those locations.

Many states require small businesses to show the separate sales tax collected from each city or county. But this isn’t the only reason to use sales tax groups. Sales tax groups often look cleaner on invoices.

CPA Timothy L. Shore shares:

Using the sales tax item could result in separate line items on an invoice for the state, county and local tax. Therefore,  it is better to use the sales tax group which is used to individually track the separate locales, but the customer only sees one sales tax [rate] on their invoice.

And according to Powell, there is another advantage to sales tax groups:

This is also helpful if a city changes their sales tax rate. You are then able to update just the item rate and it will then automatically update the group rate.

Final Thoughts

Now that you know the difference between sales tax items and sales tax groups, read How to Add Sales Tax Rates In QuickBooks Pro for step by step instructions on adding rates to your QuickBooks account. If you’re still not sure which method is right for your small business, read our Small Business Sales Tax Guide and/or consult your accountant for advice.

Chelsea Krause

Chelsea Krause is a writer, avid reader, and researcher. In addition to loving writing, she became interested in accounting software because of her constant desire to learn something new and understand how things work. When she’s not working or daydreaming about her newest story, she can be found drinking obscene amounts of coffee, reading anything written by C.S. Lewis or Ray Bradbury, kayaking and hiking, or watching The X-Files with her husband.

Chelsea Krause

“”

How To Add Sales Tax Rates In QuickBooks Pro

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How to Add Sales Tax in QuickBooks Pro

I’m sure you’re probably itching to send your first invoice with your new QuickBooks Pro software, but you can’t accurately charge your customers without sales tax. (And you can’t be on the good side of the government without having accurate sales tax records.)

In QuickBooks Pro, there are two different ways of creating sales tax rates within the software: sales tax items and sales tax groups. We’ll explain how to add both a sales tax item and a sales tax rate step by step.

If you need help deciding whether to use sales tax items or sales tax groups, read our post on Sales Tax Items vs. Sales Tax Groups in QuickBooks Pro, or continue on to learn how to start collecting sales tax in no time.

Table of Contents

Add A Sales Tax Item

Now that you know the difference between sales tax items and groups, we’ll teach you how to create them using your QuickBooks software.

To begin adding a sales tax item, go to Edit>Preferences>Sales Tax>My Customer.

Step 1: Enable Sales Tax

Before you can add a Sales Tax Item, you’ll need to make sure your company is set up to collect sales tax.

QuickBooks Pro will ask you the question, “Do you charge sales tax?” Make sure “Yes” is selected.

Step 2: Add A New Sales Tax Item

Click the “Add sales tax item…” box.

How To Add Sales Tax In QuickBooks Pro

You’ll be taken to a screen that looks like this:

How To Add Sales Tax In QuickBooks Pro

Make sure the “Sales Tax Item” is checked.

Step 3: Create A Sales Tax Name

Create a name for you Sales Tax Item.

How To Add Sales Tax In QuickBooks Pro

Step 4: Write A Sales Tax Description

Customize your sales tax description.

How To Add Sales Tax In QuickBooks Pro

Step 5: Add A Tax Rate

Add the appropriate sales tax percentage rate. If you need help determining what this rate should be, refer to our Small Business Sales Tax Guide.

How To Add Sales Tax In QuickBooks Pro

Step 6: Select The Tax Agency

Use the drop-down menu to select the appropriate sales tax agency. The sales tax agency is the legal entity for which you collect sales tax. If you need help finding the right sales tax agency, refer to our Small Business Sales Tax Guide.

How To Add Sales Tax In QuickBooks Pro

You most likely will need to create a brand new vendor for your tax agency. You can do so by clicking “.” Then, fill in the appropriate information and press “OK” to save your new tax agency.

How To Add Sales Tax In QuickBooks Pro

Step 7: Save Your Sales Tax Item

Click the blue “OK” button to save your sales tax item.

How To Add Sales Tax In QuickBooks Pro

Congratulations! You’ve created your first sales tax item. Repeat the process as many times as needed to get all of your sales tax rates added to QuickBooks.

Add A Sales Tax Group

Before you add a sales tax group, you’ll need to create the individual components of the sales tax group as sales tax items. Follow the “How To Add A Sales Item” instructions.

To begin adding a sales tax group, go to Edit>Preferences>Sales Tax>My Customer.

Step 1Add A New Sales Tax Group

Begin by clicking the “Add sales tax item…”

How To Add Sales Tax In QuickBooks Pro

You’ll be taken to a screen that looks like this:

How To Add Sales Tax In QuickBooks Pro

Click the “Sales Tax Group” option.

Step 2: Create A Group Name Or Number

Create a name for your Sales Tax Group.

How To Add Sales Tax In QuickBooks Pro

Step 3: Write A Description

Customize your sales tax group description.

How To Add Sales Tax In QuickBooks Pro

Step 4: Select The Appropriate Tax Items

Now, you’ll need to add all of the individual Sales Tax Items that make up your combined Sales Tax Group by using the drop-down menu under Tax Item. If you need help determining which rate you need to include, refer to our Small Business Sales Tax Guide.

How To Add Sales Tax In QuickBooks Pro

Step 5: Save Your Sales Tax Group

Click the blue “OK” button to save your sales tax group.

How To Add Sales Tax In QuickBooks Pro

Repeat this process until all of your sales tax rates are successfully created, and you’re in business (literally). Once you’ve added your sales tax rates you can begin creating invoices and running your business!

If you have any troubleshooting issues, check out the QuickBooks Community or call QuickBooks directly. Or, if you want to learn more about sales tax, read our complete Small Business Sales Tax Guide. And as always, if you have any further questions, leave a comment below and we’ll do our best to help you.

Chelsea Krause

Chelsea Krause is a writer, avid reader, and researcher. In addition to loving writing, she became interested in accounting software because of her constant desire to learn something new and understand how things work. When she’s not working or daydreaming about her newest story, she can be found drinking obscene amounts of coffee, reading anything written by C.S. Lewis or Ray Bradbury, kayaking and hiking, or watching The X-Files with her husband.

Chelsea Krause

“”

How To Create An Estimate In QuickBooks Pro

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How to Create an Estimate in QuickBooks Pro

As a small business owner, you are always looking for new business leads. One of the best parts about QuickBooks Pro is being able to easily send professional estimates to potential clients.

We’ve broken the process down into 13 easy-to-follow steps.

Table of Contents

Create An Estimate

It’s a good idea to customize your estimate templates before you start sending them to clients. If you need help doing this, you can use the same process outlined in our post: How to Customize Invoice Templates In QuickBooks Pro.

Once the template is to your liking, start creating an estimate by going to Customer>Create Estimates.

Step 1: Select A Customer

Begin by selecting the customer you want to send an estimate to from the drop-down menu. If you can’t find the customer, you can click “Small Business Sales Tax Guide.

Step 9: Write A Customer Message

While this field is technically optional, we highly recommend adding a customer message.

QuickBooks makes it easy. You can select one of five preset customer messages using the drop-down menu, or you can click “QuickBooks Community or call QuickBooks directly. If you have any further questions, leave a comment below and we’ll do our best to help you.

Chelsea Krause

Chelsea Krause is a writer, avid reader, and researcher. In addition to loving writing, she became interested in accounting software because of her constant desire to learn something new and understand how things work. When she’s not working or daydreaming about her newest story, she can be found drinking obscene amounts of coffee, reading anything written by C.S. Lewis or Ray Bradbury, kayaking and hiking, or watching The X-Files with her husband.

Chelsea Krause

“”

How To Customize Invoice Templates In QuickBooks Pro

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How to Customize Invoices in QuickBooks Pro

QuickBooks Pro has many strengths, but invoice template creation just isn’t one of them. And the last thing you want is to send your clients unattractive invoices.

In this post, I’ll teach you how to take your invoices from this…

How to Customize Invoices in QuickBooks Pro

to this…

How to Customize Invoices in QuickBooks Pro

…without having to pay extra for a customized invoice template. Using eight simple steps and a bit of TLC, you can impress your customers with attractive, professional invoices in no time.

Table of Contents

Step 1: Select A Default Template

Choose a default template. QuickBooks gives you four choices:

  • Intuit Packing Slip
  • Intuit Product Invoice Slip
  • Intuit Professional Invoice
  • Intuit Service Invoice

How to Customize Invoices in QuickBooks Pro

Once you’ve made your selection, click the blue “OK” button on the bottom of the screen. You should be taken to a screen that looks like this:

How to Customize Invoices in QuickBooks Pro

There are a ton of invoice customizations available. Most of these steps can be done in any order you please, so we’re just going to make our way down the Basic Customization screen.

To start, if you want to add a business logo, check the “Use logo” box. Then click “Select Logo…”

How to Customize Invoices in QuickBooks Pro

Browse your files to find the appropriate logo. Click on the file, then click “Open.”

How to Customize Invoices in QuickBooks Pro

Step 3: Select A Color Scheme

Select a color scheme using the drop-down menu. You can choose between:

  • Black
  • Gray
  • Maroon
  • Green
  • Beige

How to Customize Invoices in QuickBooks Pro

If you change the color scheme, your invoice will look something like this:

How to Customize Invoices in QuickBooks Pro

Click the “Apply Color Scheme” button to see your color scheme choice in action.

Step 4: Choose A Font

To alter the font, use the scroll bar menu to choose what you want to change.

How to Customize Invoice in QuickBooks Pro

At this point, you can choose specific fonts for these sections (there are further font customizations later):

  • Invoice title
  • Company name
  • Company Address
  • Labels
  • Data
  • Subtotals label
  • Total label

Once you make your selection, click “Change font.” QuickBooks uses the Microsoft Word font bank on your computer to offer font selections. You can change the font, color, and size.

How to Customize Invoices in QuickBooks Pro

Once your font looks right, click the “OK ” button in the top right-hand corner.

Step 5: Display the Appropriate Contact Information

Choose what business contact information you want to appear on your invoices. We recommend including your company name, company address, and phone number (at the very least). Check the boxes next to the information you want to include.

How to Customize Invoices in QuickBooks Pro

You’ll most likely receive a message that says:

How to Customize Invoices in QuickBooks Pro

Don’t worry. We’ll address that in step 7, so you can click “OK” and ignore that message for now.

If you need to update any of the company information included on your invoice, click the “Update Information” button. Enter the proper information and click the blue “OK” button when done.

How to Customize Invoices in QuickBooks Pro

Step 6: Decide What Information To Include

To change what information is and isn’t seen on your invoice, click the “Additional Customizations” button on the bottom of the screen. You’ll be taken to a screen that looks like this:

How to Customize Invoices in QuickBooks Pro

You can customize the invoice header, columns, footer, and print defaults. Simply check the boxes for the information you want to include and change the title if needed. Don’t click the blue “OK” button quite yet (unless you want to save a copy of your progress and continue customizing the invoice later).

Step 7: Customize With Layout Designer

Next, click the “Layout Designer…” button on the bottom of the screen. You should then be taken to a screen that looks like this.

How to Customize Invoices in QuickBooks Pro

Note: The green boxes on the screen indicate envelope windows.

Here’s where the fun begins. In the layout designer, you can change the size and position of all the information on your invoice. When you select a box, you can resize it, drag it to a new location, or click the “Properties” button for more customization options (like fonts, font colors, borders, fill colors, and more).

How to Customize Invoices in QuickBooks Pro

You can add images and backgrounds to your invoices as well. The only thing you can’t customize is the fill colors of certain headers (Item Cost, Description, Price, Amount).

We added color to our invoice and an image which we used as a header. We also rearranged the placement of our data to make it more appealing. We also took time to make the invoice due date and total due clear for customers.

How to Customize Invoices in QuickBooks Pro

Tip: Use the “Copy Format” button at the top of the screen so you don’t have to reenter the same design formatting for every single box.

When you’re done editing your invoice, click the blue “OK” button on the bottom of the screen.

Step 8: Save Your Invoice Template

Take on final look at your invoice preview. If you invoice looks correct, click the blue “OK” button.

You’ve officially customized your invoices; now you can start sending them and getting paid! Follow these same eight steps to customize your estimate templates (simply go to List>Templates to find your estimate templates).

Keep watching our QuickBooks Desktop Pro 101 Series for more tips, including how to send invoices and estimates.

If you have any troubleshooting issues, check out the QuickBooks Community or call QuickBooks directly. If you have any further questions, leave a comment below and we’ll do our best to help you.

Chelsea Krause

Chelsea Krause is a writer, avid reader, and researcher. In addition to loving writing, she became interested in accounting software because of her constant desire to learn something new and understand how things work. When she’s not working or daydreaming about her newest story, she can be found drinking obscene amounts of coffee, reading anything written by C.S. Lewis or Ray Bradbury, kayaking and hiking, or watching The X-Files with her husband.

Chelsea Krause

“”

How To Create An Invoice In QuickBooks Pro

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How to Create an Invoice in QuickBooks Pro

Invoices equal money for your business, so it’s important to know how to send an invoice using QuickBooks Pro.

Here are 15 simple steps for invoicing customers with QuickBooks.

Table of Contents

Create An Invoice

You’ll want to customize your invoice templates before you start sending them to clients. If you need help customizing your invoice, check out our post: How to Customize Invoice Templates in QuickBooks Pro.

Once the invoice template is to your liking, start creating an invoice by going to Customer>Create Invoices (or click Ctrl+I).

Step 1: Select A Customer

Begin by selecting the customer you want to invoice from the drop-down menu. If you can’t find the customer, you can click “Small Business Sales Tax Guide.

Step 11: Write A Customer Message

While this field is technically optional, we highly recommend adding a customer message.

QuickBooks makes it easy. You can select one of five preset customer messages using the drop-down menu, or you can click “QuickBooks Community or call QuickBooks directly. If you have any further questions, leave a comment below and we’ll do our best to help you.

Chelsea Krause

Chelsea Krause is a writer, avid reader, and researcher. In addition to loving writing, she became interested in accounting software because of her constant desire to learn something new and understand how things work. When she’s not working or daydreaming about her newest story, she can be found drinking obscene amounts of coffee, reading anything written by C.S. Lewis or Ray Bradbury, kayaking and hiking, or watching The X-Files with her husband.

Chelsea Krause

“”

Do I Qualify For A Startup Grant?

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startup grants

Free money to start your business – isn’t that every entrepreneur’s wildest dream? It’s too bad that startup grants are so hard to come by. You can think of business grants sort of like scholarships for adults. Just as with a scholarship, you have to convince the grant-issuer that a) you will put the funds to really good use and b) you are more deserving of the money than other applicants.

There are many types of business grants offered by myriad organizations, both public and private. As you might figure, there are different eligibility requirements for different grants. In general, though, only certain types of businesses are eligible for grants. These include businesses belonging to economically disadvantaged demographics such as Native American Indian tribe members, single mothers, and veterans returning to civilian life. There are also grants for innovative businesses breaking new frontiers that benefit society  – think tech startups, doctors, and scientists.

In this post, I’ll talk about the types of businesses that might qualify for a startup grant, and give a few examples of organizations that offer grants to these businesses.

If you belong to any of the following business categories, you might eligible for a startup grant.

Table of Contents

Innovators

Many startup grants are for innovators and businesses which contribute valuable creations to society. These grants are generally for entrepreneurs in the fields of technology, medicine, science, agriculture, education, and research and development. Here are some grants you might qualify for if your business falls into this category.

Grants.gov 

While this is the one-stop shop for all U.S. government grants, the majority of these grants go toward businesses and nonprofits in science, medicine, and R&D.

Search for grants on Grants.gov or check your eligibility to apply for a grant from the federal government.

SBIR 

From The Small Business Innovation Research (SBIR) website:

The SBIR program is a highly competitive program that encourages domestic small businesses to engage in Federal Research/Research and Development (R/R&D) that has the potential for commercialization.

This US government-funded program awards grants of up to $150K in Phase I of funding. Depending on the results achieved after six months, recipients may receive up to $1 million over the next two years (Phase II).

NC IDEA 

This is a private foundation offering up to $50K for high-tech companies in the state of North Carolina.

Green Businesses

There are some public and private grants for green businesses, including startups. Generally, these grants cover the cost of installing sustainable infrastructure and/or energy systems.

Rural Energy For America Program 

As part of the USDA (U.S. Department of Agriculture), this program awards renewable energy systems and energy efficiency improvement grants. Grants are awarded to agricultural producers and rural small businesses for renewable energy systems or to make energy efficiency improvements.

Green Technology Business Grant Program 

This grant is designed to attract new green technology businesses or to expand existing green technology businesses in the City of Cleveland, Ohio. Eligible applicants may receive grants of up to 0.5% of new payroll to the city for up to five years and may also qualify for an additional $5,000 Moving Assistance Grant.

Rural Businesses

Various grants aim to stimulate the economy in rural and economically distressed areas. These grants serve to attract new businesses to struggling regions. Depending on where you are opening your business or nonprofit and the specifics of your organization’s goals, you might eligible for some of this grant money.

Rural Business Development

This grant is specifically for nonprofit and public entities. From their website:

This program is a competitive grant designed to support targeted technical assistance, training and other activities leading to the development or expansion of small and emerging private businesses in rural areas which will employ 50 or fewer new employees and has less than $1 million in gross revenue.

From the same agency, rural farmers/agricultural producers might be eligible for the Value Added Producer grant, while for-profit businesses that provide education or health care to rural areas through telecommunications might be eligible for the Distance Learning and Telemedicine grant.

U.S. Economic Development Assistance Grants

From their website:

EDA supports development in economically distressed areas of the United States by fostering job creation and attracting private investment. Specifically, under the Economic Development Assistance programs (EDAP) Notice of Funding Availability (NOFA), EDA will make construction, non-construction, and revolving loan fund investments under the Public Works and Economic Adjustment Assistance (EAA) Programs.

Interested? Check out the EDA’s grantee resources.

Women-Owned Businesses

There are many business grants you might be eligible for if you are a female entrepreneur. Additionally, some grant money goes to businesses that create solutions that benefit women and families.

InnovateHER Grant 

Sponsored by SBA’s Office of Women’s Business Ownership, the InnovateHER grant competition is an opportunity for entrepreneurs who create commercially viable products and services that benefit women and families. The first place prize awarded in 2017 was $40,000. There were also grants awarded in the amounts of $20,000, $15,000, and $10,000.

Chicago Foundation For Women

Women living in the Chicago metropolitan area are eligible to apply for a grant to start a new business through this nonprofit fund. Grants range from $15,000 to $150,000. These grants are very competitive and are only available to businesses that benefit women’s economic security, freedom from violence, and/or access to health care.

Nonprofit Organizations

Nonprofit startups that have 501(c)(3) status with the IRS are eligible for some government and private grant money. In fact, you’re much more likely to be awarded a grant if you run a nonprofit organization, as opposed to a for-profit business. While there are tons of nonprofit grants, I won’t spend too much time on this section, assuming this audience is mostly for-profit entrepreneurs.

These grants, which you can apply for year-round, are mainly for nonprofits and educational programs, though some small businesses may be eligible as well.

As mentioned, Grants.gov is the main stop for government grants, many of which go to nonprofit causes.

Veteran-Related Businesses

Veteran business grant money includes retraining grants for veterans returning to civilian life and grants to nonprofits providing services to veterans. Below are a couple examples.

StreetShares Commander’s Call Veteran Business Award

This StreetShares program awards annual grants to veterans and spouses of veterans who own small businesses. The first place award is $5K, the second is $3,000, and third is $2,000.

StreetShares also offers conventional business loans to some small businesses, veteran-owned or otherwise. Head over to our StreetShares Review for a rundown on their loan services.

Wisconsin Department Of Veterans Affairs Retraining Grants

This program awards up to $3,000 per year for up to two years to veterans receiving job-related training. Most “startups” probably wouldn’t be eligible for this program, but hey, it’s possible.

2501 Program

These grants, awarded through the USDA, go to veteran and minority farmers and ranchers. You might think that most startups aren’t in the farming sector, and you’d be right, but ag-tech startups are gaining prominence – think sustainable farming and other “smart” farming practices now possible with the help of new technology.

Minority-Owned Businesses

While there are grants designed to benefit various non-white business owner demographics – Hispanic Americans, African Americans, Asian Americans, and others – most government grants for minority businesses are specifically for members of federally recognized Native American Tribes. Here are a couple grants that may help fund minority-owned startups.

Healthcare-related small businesses can use this grant for programs that provide health services to minorities.

Native Arts Capacity Building Initiative

Offered through the American Indian First Nations institute, this initiative awards six grants of up to $30,000 each year to Native American institutions that support arts and culture.

Note that while the Minority Business Development Agency offers various resources designed to help minority business owners, this program does not include grants.

Just Plain Amazing Small Businesses

There are a few general small business grants available to any kind of business, but they are very competitive, so you will need a super impressive story to wow the judges. An impressive track record is a particular challenge for a startup business, which is usually defined as a business that’s been around for less than six months. But hey, if you’ve achieved a lot in just a few months or you have an especially amazing idea, you might want to apply to one of these highly competitive small business grant contests.

FedEx Small Business Grant Contest

Any type of small business may apply. To give you an idea of what kind of competition you’d be facing, in 2017 there were 4,500 applicants and 10 winners. The grand prize is $25,000, and the other winners in the top ten get $5,000.

Miller Lite Tap The Future

This grant is one of the few that’s actually specifically geared toward startups. With this Shark Tank-style entrepreneurship grant contest, participants have the opportunity to pitch their business ideas and compete for the grand prize of over $100K.

Visa’s Everywhere Initiative

This contest awards startups with innovative IT solutions, awarding $50,000 to the top three finalists.

Startup Grant Alternatives

Very few private businesses are actually eligible for a business grant. Unless your business or startup is highly innovative and provides a demonstrable benefit to your community or the world at large, unfortunately, you are probably not grant-recipient material. Even if you are eligible for some grant money and you make it through the lengthy proposal process, you may only land a few hundred to a few thousand dollars.

Furthermore, startup grants are particularly hard to come by, as grantees will generally want to see what kind of results you’ve achieved on other projects carried out by your organization. Don’t fall for government grant scams that will have you believe there are piles of free grant money out there for the taking – this is not the case at all.

So, rather than hoping to be among the fortunate few who are granted free money, you might want to look into grant alternatives for your business.

Startup grant alternatives include crowdfunding, P2P lending, online loans, equipment financing, and others. Some examples might include:

For more ideas on how to get the seed money for your new business endeavor, check out our article on the best ways to finance a business startup.

Shannon Vissers

Shannon is a freelance writer and editor based in San Diego, CA. Shannon has a three-year-old daughter named Izzy. Shannon likes to unwind by watching trashy reality television and reading literary fiction during the commercial breaks.

Shannon Vissers

Shannon Vissers

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Shopify vs. Squarespace: Online Store Options Compared

Shopify vs. Squarespace – they are two of the most well-known brands in the online store / website builder industry. I’ve written a Shopify review here and Squarespace review here. But how do they compare directly to each other?

First, a bit of background. Over the past few years, online store software costs have plummeted, and the technology to get a website from idea to reality has blossomed.

Whether you’re using a text editor and uploading to the Amazon cloud, hosting your own site powered by WordPress + WooCommerce or using a drag and drop website builder, there’s never been an easier time to create an online store. It’s no longer 2002 where every storeowner had to know PHP, HTML, CSS and a bit of Javascript.

All-inclusive ecommerce builders have been particularly interesting. Companies like Squarespace, Weebly, Wix, Shopify, and BigCommerce – not to mention platforms like Etsy, eBay, and Amazon – have brought ecommerce to everyone regardless of their coding skills.

On the wide spectrum of ecommerce store building solutions, they all live on the end that is all-inclusive and provides everything you need to get started and grow your website.

That is in contrast to solutions where you buy, install, and manage all the “pieces” of your website separately. That’s not a good or bad thing. But it is something to be aware of when you’re choosing one of them as a solution since it affects your website both long and short term.

In the long-term, it affects your versatility, functionality, and, of course, your brand. In the short term, it can certainly add/take away a lot of headaches. That said, just like choosing a physical house or office, there is no such thing as an absolute “best” or “top” choice. There’s only the right choice relative to your goals, experience, and circumstances.

Using an online store builder is like leasing and customizing an apartment in a really classy development instead of buying and owning your own house. You’re still in control of decor, cleaning, and everything living-wise – but you leave the construction, plumbing, security, and infrastructure to the property owner. That point is key because there’s usually a direct tradeoff between convenience and control.

Ecommerce Real Estate Tradeoffs

Shopify, Squarespace and other options like BigCommerce and Weebly as a group compete with options like WordPress (which provides the free software to build a website that you own & control – see my WordPress setup guide here) all the way to options like typing actual HTML code into a text file.

The last preface I’ll mention is that Squarespace is an all-around website builder with ecommerce capability.

Shopify, in contrast, is strictly an ecommerce platform.

This focus puts Squarespace behind as an advanced ecommerce tool and Shopify behind as a general website builder tool. With their respective free trials, you can quickly see the differences.

Try Shopify for Free

Try Squarespace for Free

Make sense? Awesome – let’s dive into the comparison.

Side note – if you want this comparison in a BuzzFeed-style quiz, you can take my online store builder quiz here…

You can also look at my posts on –

Otherwise, we’ll look specifically at pricing, onboarding/user experience, design features, technical features, ecommerce features, marketing features, and customer support.

Disclosure – I receive referral fees from all the companies mentioned in this post. My opinions & research are based on my professional experiences as either a paying customer or consultant to a paying customer.

Pricing

Comparing pricing between Shopify and Squarespace is fairly straightforward if you have a clear idea of your needs. This comes from the fact that Shopify focuses on *only* online store owners whereas Squarespace markets to everyone.

The short version is that Shopify is more expensive. But there’s a few caveats to look at.

Shopify Pricing

Squarespace Ecommerce Pricing

The first caveat is credit card fees.

Squarespace syncs with Stripe and PayPal. Their fees are 2.9% + $.30 per transaction.

Shopify has their own payments gateway that charges lower per transaction fees. But – if you use a non-Shopify gateway, Shopify charges an additional transaction fee that Squarespace does not have.

So why is this important? If you already have a gateway (ie, Authorize.net for your physical pop-up shop) and you want to use them with Shopify – then Shopify’s transaction fee kicks in. But – if you want to use Shopify Payment’s for your online store – you can save a bit of money on transaction fees. Those fees add up. If you have revenues of $100000 – a 0.4% reduction in fees could equal $500 per month.

The second caveat is value pricing.

On front-end features alone – Squarespace is significantly cheaper than Shopify, especially on their Advanced plan, which compares almost directly with Shopify’s Standard plan.

See Shopify’s Plans here.

See Squarespace’s Plans here.

But – like I mentioned in the introduction, it’s hard to compare their pricing tables directly since they are really different products for different audiences.

It’s a bit like comparing the pricing of a motorcycle vs. an SUV.

Sure, the motorcycle is much cheaper and it gets you from A to B. It has wheels, an engine, and it drives on the road just fine. But it’s also meant for a certain type of driving.

It all really comes down to what you need for you project – two wheels that will get you where you need to go or a vehicle that has plenty of room along with lots of features. So let’s look at other differences.

Aside – if you’re curious, Shopify’s $9/mo Lite plan isn’t applicable since it’s more of an inventory/payments software than an online store builder software. You can upload products, manage them, and accept payments, but you can only sell them via other platforms such as a Facebook plugin or a button on an existing website. Same goes with Squarespace’s Business Plan. It’s meant to do a website that happens to have a couple things for sale – not really a full online store solution. I’ll set both those options to the side for the moment.

Onboarding & User Experience

No matter how intuitive and simple a piece of technology is, there’s always that moment of “what am I looking at and what do I do now?”

Onboarding is the process of guiding you past that point. In theory, a huge selling point of online website / store builders is that they have a near-zero learning curve. They have a straightforward process from website concept to website reality.

On this point, Squarespace and Shopify both do alright but in different ways.

Shopify has a quick path from free trial signup to site launch. They have guided tours and a very straightforward setup. They also have customer support outreach focused on getting you up and running quickly.

Shopify Backend

However, Shopify also has many more features, apps, and technical options available that can present a challenge. The most daunting hurdle is linking your domain name to your store. It’s not difficult but is daunting at the mention of “setting your CNAME” (in fairness, you don’t have to direct your domain if you purchase via Shopify for a bit more per year than via a 3rd party).

Since Shopify functions as a platform for payments, offline inventory and more – their website store setup is actually on the second menu of their main dashboard rather than front and center.

Squarespace has a ridiculously fast sign up to live site process. Their backend is fairly intuitive for basic websites. However, they to have a “Squarespace jargon” to get used to. They like to appeal to developers and freelance designers – so there are advanced tools that can clutter simply launching a site.

SquareSpace Onboarding

Their support emails and tours are structured well. But since their software is made for all types of websites, the ecommerce features are a bit buried (and limited) from the perspective of an online store owner.

I would not rule either provider out on onboarding/user experience. But their differences are sort of like a restaurant with a waiter (Shopify) vs. a fast casual restaurant with a menu above the cashier (Squarespace).

If you want more help and more customization, then Shopify is your choice. If you want to quickly see and order from the features, then Squarespace is less daunting.

Design Features

Part of the overall value of website builders is simple, straightforward design – no web designers necessary.

But good design is hard. And it matters – a lot. A lot of people can spot a good looking website but have a harder time figuring out how to get there. Using a template for a foundation and then customizing it is a good way to get the site you want without paying for a custom design.

Both Shopify and Squarespace use templates (aka “themes”) for design. But they are very different in customization options.

Shopify has a solid drag and drop design feature. You can create any layout element you’d like and drag it into place. You can click and edit any portion of any web page – including both content and design.

But – Shopify does not combine design and content. You have to get your design right – and then add content in a separate area (ie, it’s a template).

Since you can edit HTML/CSS with Shopify, you can build any design possible. There are few, if any, limits to any design that you see on the Internet. Additionally, Shopify has a drag and drop template editor.

Shopify Drag Drop

Squarespace has a hybrid approach. They famously have beautiful pre-built designs.

Squarespace Designs

They also have drag and drop – and pretty intuitive editing.

But – they also combine design and content with their editor. This approach has tradeoffs. On one hand, you can edit the design for specific pages. On the other hand, your design can go “off-base” pretty quickly – especially with content for hundreds of products.

The other drawback with Squarespace is that their off-the-shelf themes require *a lot* of really good imagery. If you don’t have access to high-quality photography, their themes are not going to work well. Many of Shopify’s designs are fine and functional regardless of product imagery.

They both have large marketplaces for premium designs (in addition to professional designers).

If you are a fan of raw functionality – then you’ll appreciate Shopify’s approach to design. If you want your site to look amazing off the shelf, love to edit details, and have access to good imagery – then you’ll appreciate Squarespace.

Ecommerce Features

The absolute core features of an ecommerce store are a –

  • product database
  • shopping cart
  • checkout page
  • payment processor
  • order database

That is it.

But, especially in 2017 (and 2018 and beyond), there is a *lot* more than can (and should) go into an ecommerce store. There’s everything from selling via Facebook Messenger to syncing with Amazon FBA to integrating with eBay – not to mention features for executing on marketing fundamentals.

Even for advertising products, there’s selling via Buyable Pins, Google Merchant, Twitter cards, and more. There’s remarketing and coupon codes. There’s A/B testing. There’s inventory synchronization with vendors like AliExpress. And there’s order synchronization with shippers like UPS and USPS.

And that’s all a drop in the bucket.

Obviously, not every store needs every feature. If you are trying to sell a couple T-shirts or a couple specialty products – you certainly don’t need them all. But if you want to grow and expand, you’ll need your options open.

For ecommerce features, Shopify wins hands down, though Squarespace does make it simple to sell your product. Squarespace has a few advanced features (like abandoned cart recovery), but it’s nothing like Shopify.

Shopify not only has more features directly integrated into their platform, but they also have a well-established app store that includes free and paid apps to extend your store with every feature you could possibly need.

Shopify Integrations

That said, this section is a bit unfair to Squarespace, because, again, they are a general website builder that includes ecommerce. Shopify is strictly an ecommerce platform.

If Shopify didn’t “win” on ecommerce features it would be a surprise. Technically, Squarespace competes more with the likes of Weebly and Wix or WordPress who are also website builders that provide core ecommerce features.

In short – if you need core ecommerce features integrated in a simple, straightforward way, then Squarespace is fine. If you actually need a full suite of ecommerce features to grow, then Shopify is hands-down better.

Technical Features

Technical features are all the web development best practices that don’t really “matter”…until they matter a lot. I’m talking about generating clean URLs, editable metadata, allowing page-level redirects, etc.

On this point, Shopify does very well – and not just compared to Squarespace, but compared to any hosted platform.

Traditionally, hosted platforms presented a risk for web designers, developers, and marketers who wanted to work on the technical aspects of the site.

I know that I flinch anytime a prospective client tells me they are on a hosted platform of any kind.

But Shopify and Squarespace perform well in general. Many skeptics of hosted platforms note that they actually take care of the technical features well. You still don’t have FTP access to your server, but you do have access to change things via their Liquid editor (Shopify) or Developer Mode (Squarespace).

Where they differ (especially for me) is in their potential for technical features. And again, here, Shopify’s app store is their “killer” feature. Even if a feature is not native to Shopify, a non-developer can usually add it.

On the flip side, Squarespace has a lot of native features that simply “work” – and a process of continually adding & revising existing features.

Both Squarespace and Shopify have inherent limitations as hosted platforms (ie, when you leave, you a lot of your data), but Shopify does a bit more to eliminate the weaknesses and capitalize on strengths as a hosted platform.

Marketing Features

In Field of Dreams, Kevin Costner’s character says “if you build it, they will come.” Sadly, that is not true about websites. Like any business, you have to actively promote and market your online store for anyone to show up.

Marketing features like custom metadata, open graph information, Schema markups, email signups, share buttons, landing pages, etc all make marketing your site a lot easier.

For marketing features, both Shopify and Squarespace both do really well. They support header scripts. They integrate with many products. They add meta data, product schema and open graph tags automatically.

But like design & ecommerce features, there’s the same catch. For an ecommerce store owner, Shopify has many more (and higher quality) built-in features plus a better, more developed app store.

Squarespace has core marketing features built-in, but with more limits.

Support & Service

Customer support and service are difficult to judge. Like I’ve said in most of my reviews, a single customer can never really know if they happened upon a disgruntled rookie or if the company is really that bad.

That said, there are ways to look at a company’s investment in both customer services and support.

For Shopify vs. Squarespace, I think the clear “winner” is Shopify. Shopify not only provides more channels for customer service (phone, chat, email, forums, social media, etc), they also have an incredibly extensive help center.

The help center not only tackles technical issues, it also tackles customer success issues (aka problems with making money).

Squarespace has email support, and limited chat support – but no phone. Their knowledgebase does not have the attention or the depth that Shopify has.

Comparison Conclusion

So Shopify vs. Squarespace – which one is a better fit for your project?

If you plan on running a growing online store and want all the features possible, then you should go try Shopify.

Go try Shopify for free here.

If you want a simple store – or a general site with a beautiful look, then Squarespace might be a good fit for you.

Also – bookmark my post on creating an ecommerce marketing strategy here.

Good luck!

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Is Hard Money The Answer When You Have Declared Bankruptcy?

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Businesses that have declared bankruptcy can face a challenging road back to the regularly lending scene. If you search online for loan alternatives, sooner or later you’re going to run into the concept of hard money.

Hard money is a direct loan from an investor to an individual or business for the purpose of buying and developing real estate. The terms of a hard money loan are usually very specific to the investor extending the offer.

We’ll take a look at whether hard money is a good loan of last resort.

Table of Contents

Can You Get Hard Money With A Bankruptcy On Your Record?

In theory, yes. Whether the hard money lender is willing to take a risk on a borrower with a bankruptcy on their record will depend on a number of factors, including the lender’s appetite for risk. Usually, hard money lenders are more concerned with the opportunity presented by the property than they are with your credit. You should, however, expect this type of lender to check your credit even if they weigh other factors more highly.

In most cases you’ll have to wait until your bankruptcy discharges before hard money lenders want to touch you; this will happen more quickly if you filed Chapter 7 than Chapter 13. In some cases, you may be able to be able to convince your Chapter 13 trustee and a hard money lender to work with you, but don’t count on the lender wanting to take on that kind of risk.

One of the bigger challenges of getting hard money is finding hard money lenders. Because you’re dealing with real estate, you’ll generally have to work with investors who have an interest in developing property in your area. Your local real estate association might be able to help you find hard money lenders in your region.

What Are The Limitations?

A hard money loan is a non-traditional loan made by regular investors to (effectively) real estate investors. Since the loan is secured by the property you’re buying or developing, there are practical limitations on how you can use the money.

Here are the things hard money is typically used for:

  • Purchasing Real Estate: Hard money is often used to buy real estate in situations where traditional lending would be too slow.
  • Improvements And Renovations: A hard money lender who is more interested in the potential of the property rather than its existing state may write a loan for a developer interested in making capital improvements.
  • Construction: Hard money can be used to build new projects. As in the case of renovations, the lender will be interested in the potential value of the property.

There are a number of other potential uses, though most involve either improving or stabilizing the value of a property or circumventing the restrictions that come with bank lending. Since hard money loans don’t have the complex underwriting process of bank loans, some developers find them useful for quickly closing time-sensitive deals.

Should You Get Hard Money If You Can?

If you were recently underwater with debt, you may want to think twice about getting a hard money loan. You’re looking at double-digit interest rates and significantly higher origination fees to get your project off the ground.

These loans aren’t meant to be long-term financial solutions. The ideal use for hard money is to increase the value of the property in question, then flip it or refinance it. You don’t want to get bogged down by hard money’s high-interest rates over the long haul, or you could easily find yourself back where you were before.

Final Thoughts

Even if you’ve had a bankruptcy, you can dive back into the borrowing scene almost immediately after it resolves. Hard money is just one of your options. It’s costly, fast, and has narrow applications. If, however, you’re in a situation where you have a good investment opportunity and a well-developed exit-strategy, hard money can be a road back to solvency after a bankruptcy. If you’ve had experience with hard money, especially after a bankruptcy, we’d love to hear about it.

Not sure where else to look for loans? Our guide can be a good place to start.

Chris Motola

Chris Motola is an independent writer, journalist, programmer, and game designer who has mastered the art of using his laptop in no fewer than 541 positions, most of them unergonomic. When he’s not pushing keys or swiping screens, he’s probably out exploring urban or natural environs, experimenting in the kitchen, or delighting/annoying his friends with his ideas and theories.

Chris Motola

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