Business Loans For HVAC Companies

business loans for hvac companies

It’s hard to imagine modern life without the benefit of the work done by the HVAC industry. HVAC companies (HVAC refers to heating, ventilation and air conditioning) are tasked with keeping us warm in the winter, cool in the summer, and breathing safely as we live our lives in the archipelago of enclosed spaces that comprises our indoor universe.

With the economy in a period of expansion, demand for new construction has risen, and where the construction industry goes, so goes HVAC work. After all, these new offices, homes, and transportation systems aren’t going to keep themselves ventilated and comfortable.

As with any industry, HVAC companies have their own particular financing needs. There’s no shortage of loan products out there, offered by banks, online lenders, credit card issuers, and even the federal government. But you probably knew that already. The question most relevant to you is: Which types of loans best fit the specific financing needs you’re going to have in the course of operating your HVAC business?

That’s where Merchant Maverick comes in. We’ll help make sense of the lending market for you and direct you to the loan products that best fit your specific needs. Let’s get down to the nitty-gritty and delve into how to get a business loan for an HVAC company.

Financing Need Best Loan Type Recommended Lender
Marketing & Advertising Medium-Term Loan Fundation
Equipment Purchasing Equipment Loan Lendio
Business Expansion SBA Loan SmartBiz
Emergency Funds Business Credit Card Chase Ink Business Unlimited
Working Capital Short-Term Loan PayPal LoanBuilder
Covering Payroll Line Of Credit OnDeck

Loans For Marketing & Advertising

business loans for HVAC

Whether your HVAC company is just finding its legs and seeking to generate new leads or is established but working to expand, marketing and advertising are integral to an HVAC business’s success. Of course, such a campaign costs money, and the funds need to come from somewhere.

While we’re not here to tell you how to run your marketing campaign, here’s a quick tip: Reach out to people just before summer and winter begin. It’s when your services will be most in demand — for obvious reasons!

Medium-Term Loans

A medium-term loan is an installment loan (a loan that is repaid periodically over a defined period of time with interest) with a term length of between two and five years. You can typically borrow more with a medium-term loan, but if your anticipated marketing campaign won’t cost that much, a short-term loan would be appropriate.

A medium-term loan can obviously be used for any business purpose. However, since you should be able to more accurately estimate the cost of your marketing campaign than many other types of business expenses, a loan in which you borrow a specific amount of money is particularly appropriate here.

Recommended Option: Fundation

fundation logo

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Founded in 2011, Fundation has since become one of the leading “alternative” lenders, boasting competitive rates, a solid reputation, and fixed-rate pricing (the interest rate will not increase over the life of the loan). Fundation’s term loans max out at $500K; accordingly, Fundation’s borrower qualifications are stricter than those of many online lenders. Fundation also offers lines of credit of up to $100K.

Fundation’s installment loans are offered with terms of one to four years and are fixed-rate, meaning the assigned interest rate will remain unchanged over the life of the loan. Additionally, Fundation sports a rapid time-to-funding, typically between two and seven days.

Loans For Equipment Purchasing

business loans for hvac companies

The HVAC industry relies on heavy equipment — the bigger the building, the heavier the equipment. Of course, these heating and cooling systems don’t come cheap. While any loan products can be used to cover the cost of purchasing HVAC equipment, there’s one type of loan tailored for this purpose: Equipment loans.

Equipment Loans

In many ways, an equipment loan resembles a traditional installment loan — you’ll be paying down the principal plus interest with monthly payments. The advantage of the equipment loan is that the equipment you purchase with the funds serves as collateral. Equipment loans are therefore secured loans, and secured loans typically have better rates and terms than their unsecured counterparts.

With an equipment loan, the lender usually covers most of the cost of purchasing the equipment, leaving around 10% to 20% to be covered by you. On occasion, however, the lender might be willing to cover the entire cost.

Equipment Leases

An equipment lease is another means of equipment financing. Such leases fall into one of two categories: Capital leases and operating leases.

With a capital lease, you are considered to be the owner of the equipment in question, so the arrangement resembles a loan in many ways. You make your monthly payments throughout the course of the lease. Afterward, you pay a small residual to close your account.

An operating lease lets you essentially rent the equipment during the lease, making monthly payments. When the lease ends, you can either return the equipment or buy it at fair market value, giving you a nice degree of flexibility.

See our article on equipment loans vs equipment leases for more information.

Recommended Option: Lendio

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Lendio isn’t your typical lender. In fact, Lendio isn’t a direct lender at all. Lendio is a loan aggregator, which means that you submit a single loan application which Lendio then passes on to multiple lenders, saving you time and effort. Within about three days of submitting your application, you should be fielding multiple equipment financing offers.

Through Lendio, you can find an equipment loan as large as $5 million, with loan terms ranging from one to five years and interest rates as low as 7.5% for highly qualified borrowers.

Loans For Business Expansion

business loans for hvac companies

Let’s say your HVAC company has been thriving and is ready to expand to meet the challenges of our glorious future of relentless climate extremes. Without an infusion of cash, however, your expansion plans may not be feasible. If you’re looking for a sizable loan at a reasonable interest rate, consider an SBA loan.

SBA Loans

The Small Business Administration (SBA) is an agency of the federal government meant to assist small businesses in obtaining funding. For the most part, the SBA does not lend directly to businesses. Rather, it guarantees up to 85% of loans offered by SBA-approved lenders. These lenders are known as intermediaries.

While SBA loans feature competitive rates and terms, be warned that borrower requirements tend to be rather stringent.

Here’s a rundown of four of the main SBA loan programs with links to articles describing the programs in greater detail.

Loan Program Description More

7(a) Loans

Small business loans that can be used for many many business purchases, such as working capital, business expansion, and equipment, inventory, and real estate purchasing.

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Microloans

Small loans, with a maximum of $50,000, which can be used for working capital, inventory, equipment, or other business projects.

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CDC/504 Loans

Large loans used to acquire fixed assets such as real estate or equipment. 504 Loans are offered in partnership with Community Development Companies (CDCs) and banks.

Review

Disaster Loans

Loans used to rebuild or maintain business following a disaster. 

Review

Recommended Option: SmartBiz

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There is no shortage of SBA-approved lenders out there. However, if you’re looking to grow your HVAC business with an SBA loan, you might find the complex SBA application process to be intimidating and fraught with peril. The beauty of SmartBiz is that the company helps simplify and streamline the application process for you so that you can make sense of it all.

SmartBiz is not a lender. Describing themselves as the “white knight in small business lending,” SmartBiz will match you with an SBA-approved lender after helping you through the onerous application process. You’ll need to have at least two years of business history behind you and a personal credit score of at least 650, but if you meet these and other requirements, you can get an SBA-backed loan of up to $350,000 with interest rates between 8% and 9%. Not too shabby!

Loans For Emergency Funds

business loans for hvac

Let’s say the construction industry takes a downturn, leaving you with less business. You still have employees to pay and expenses to cover. How should a company in your position deal with unexpected cash flow problems? When you need a flexible funding solution you can draw from on an as-needed basis, consider a business credit card.

Business Credit Cards

As business credit cards tend to feature higher interest rates than business loans, they aren’t an ideal funding mechanism in many instances. But when unexpected situations arise and you need a stop-gap measure to temporarily plug some funding holes, there’s nothing like the ease and convenience of a business credit card. With the right card, you can cover emergencies while earning rewards and/or cash back along the way.

A good credit history will help you get lower interest rates and a higher credit limit. However, even with a less-than-stellar credit history, there are options available to you, including secured credit cards, which require a security deposit.

If you’re unsure of your credit score, whatever you do, don’t pay for a credit check. Here are some websites that let you check your credit score for free.

Recommended Option: Chase Ink Business Unlimited

Chase Ink Business Unlimited


chase ink business unlimited
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Annual Fee:


$0

 

Purchase APR:


15.24% – 21.24%, Variable

The Chase Ink Business Unlimited card is a great way to cover those unexpected expenses while earning 1.5% cash back to boot. If you’re using a credit card to cover emergencies, you’re probably not looking for a card with rotating cash back spending categories or lavish travel benefits. The Ink Business Unlimited comes without these extraneous distractions so you can focus on getting your HVAC business out of a jam while earning cash back on everything you buy.

Keep in mind that you’ll need good to excellent credit to qualify for the Ink Business Unlimited. If your credit doesn’t fit that description, check out these options for business owners with poor credit.

Loans For Working Capital

loans for hvac businesses

Working capital refers to the money you use to keep your business running on a day-to-day basis. When times are good, your cash flow should be sufficient to keep your company running smoothly. The problem is that without extraordinary luck, times will not always be good, particularly in a field prone to seasonal slow-downs like the HVAC industry.

When seeking a loan for this purpose, you’ll want something that affords you a high degree of flexibility in terms of what you can spend your funds on. For this reason, a short-term loan may be worth your consideration.

Short-Term Loans

A short-term loan is an installment loan that must be repaid within 12 months or less. Payments must be made on a weekly or even daily basis and are normally deducted automatically from your business account. If approved, you can usually get your funds within a few days. Short-term loans are all about fast money, both in terms of getting the money and paying it back.

Instead of charging interest on what you borrow, short-term lenders charge you a flat fee known as a factor rate. This factor rate is a multiplier that determines the lender’s fee. I’ll give an example: Take out a $50,000 loan at a 1.2 factor rate, and you’ll be paying $60K for the loan over the agreed-upon term length.

Recommended Option: PayPal LoanBuilder

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Check Eligibility

PayPal’s LoanBuilder is what the name suggests. You essentially build your own loan by customizing its elements to fit your particular situation. The loans offered range from $5K to $500K and term lengths run from 13 to 52 weeks.

LoanBuilder’s lender requirements aren’t terribly strict. Your business must have been running for at least 9 months. Your annual revenue must be at least $42,000 and your personal credit score must be at least 550. As ever, your credit history and your company’s overall health will determine your maximum borrowing amount and your rates.

Loans For Covering Payroll

 

Heating and cooling systems don’t install themselves. To ensure that our apartments, workplaces, and shopping centers don’t become unlivable nasty hellscapes, an HVAC business needs workers. Workers need to be hired, trained, and paid, all of which costs money.

If you need help hiring new employees (or paying the ones you already have), consider a line of credit.

Lines Of Credit

A line of credit operates on the same principle as a credit card. Instead of receiving a lump sum of dinero all at once, you’re given a credit line you can draw from whenever you feel the need. As with a credit card, you’ll have a credit limit to contend with, and you pay fees and interest only on the funds you use, not the total amount of the line of credit.

Recommended Option: OnDeck

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If you need funding quickly, consider a line of credit from OnDeck. Approval should come in a matter of days, and the credit requirements are not particularly strict. Your credit line can run anywhere from $6K to $100K.

One thing to keep in mind about OnDeck’s lines of credit is that they are a short-term funding mechanism, lasting only about 6 months.

What To Consider When Choosing A Lender

business loans for hvac businesses

For business owners seeking a loan, there has never been a wider array of funding options. To help narrow down your search, consider the following questions.

Why Do I Need A Loan?

Before you can even start looking at particular options, you need to be certain of the purpose of your loan. Whether you’re looking to expand your business or purchase new equipment, only by defining your precise need can you select a loan product that fits what you seek to accomplish. Otherwise, you’re flying blind without any point of reference.

No one lender or loan makes sense for every business need under the sun. Know what it is that you need and shop accordingly!

Am I Qualified?

There’s no need to examine a lender in detail if you won’t qualify for its loans in the first place. Try to find and examine a lender’s minimum qualifications before going through the terms and fees with a fine-toothed comb.

Vendors of business loans nearly always inquire about your time in business, credit rating, and revenue. On each of these measures, the lender may have a strict cutoff point where, if you don’t meet the benchmark, you don’t qualify. Alternately, they may just use this information to determine your rates. Either way, it’s information you’ll need to provide.

Do The Rates & Terms Meet My Needs?

It’s obviously important to consider a lender’s rates and terms when deciding on what loan to pursue. Make sure you can afford the funding; nothing will give you nightmares like taking out a loan you can’t repay. However, a lender’s reputation and business practices are equally important. To get a sense of just how a lender treats its customers, try to find user feedback on the company in question wherever you can. Read enough reviews (we do business loan reviews, you know!) and borrower feedback and you’ll get a pretty good idea as to whether the lender is an honest broker or a predator fixing to bleed you dry.

What You Need To Apply For HVAC Business Loans

The number of documents you’ll have to round up depends on the lender. Naturally, you’ll need the basics — name, business name, address, telephone number, email address, social security number, and federal tax ID number. Many lenders will require much more, however. Here are some documents you should be prepared to submit, depending on the lender:

  • Business & Personal Credit Reports/Score
  • Business & Personal Bank Statements
  • Business & Personal Tax Returns
  • Profit & Loss Statements
  • Balance Sheets
  • Income Statements
  • Business Licenses
  • Business Owner Resumes
  • A Business Plan

For a more thorough look at how to apply for a business loan, read our in-depth take on business loan requirements.

Final Thoughts

Now more than ever, we need the HVAC industry at the top of its game. As I write this, wind-driven fires have spread dangerously smoky air over large parts of my tinder-dry home state of California, and proper indoor ventilation is literally the last line of defense for many in the affected areas.

When seeking a loan for your HVAC company, do your due diligence, explore all your options, and get your documents in order. This should set you up nicely for getting the loan that paves the way for your success.

The post Business Loans For HVAC Companies appeared first on Merchant Maverick.

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19 Reasons To Get A Business Loan (And How To Get Started)

business loan reasons

There are so many good reasons to get a business loan that you probably haven’t even considered half of them. For example, have you ever thought about taking out a loan to hire a new employee or getting a loan for the sole purpose of building your business’s credit? Those are both valid reasons to apply for business financing, and there are many other reasons that might not have ever crossed your mind.

While many small businesses are debt-averse — afraid to apply for financing because they don’t think they have good enough credit, or unsure if they can afford repayments — it’s a simple fact that you need money to make money. In some ways, living debt-free can actually hinder your business’s growth or even its ability to stay afloat. You might also be surprised at the wide variety of financing products available for almost any type of business pursuit.

Even if you’ve never applied for financing before, a business loan is definitely something to think about if you are short on funds or are considering a new opportunity or investment that could advance your business.

Read on for a look at 19 reasons you might want to take out a business loan.

Or, skip down to the “Types of Business Loans” section to see if what type of loan you should pursue for your particular business need.

1. Start A Business

Want to get your brand-new business off the ground with a running start? A startup loan can help you do just that. A few startup-friendly lenders will lend to brand-new businesses with no time in business, while others will want to see that you have 6 months’ worth of revenue.

However, startup loans are not by any means easy to get for spanking new businesses lacking in experience, especially if your business is still in the “idea stage.” If this sounds like you, you might consider a crowdfunded loan or small business grant in lieu of traditional financing.

2. Increase Working Capital

Working capital—the money required for day-to-day business operations—is a big reason businesses might need to apply for financing. For myriad reasons, your business may simply be short on cash. Sporadic cash flow, business growth spurts, and seasonal sales fluctuations are just a few reasons businesses apply for a working capital loan.

In many circumstances, you might not know exactly how much money you need, but expect you’ll need some extra working capital in the near future. In such cases, you might be wise to apply for a short-term business line of credit that you can draw from as needed.

3. Purchase Inventory

Businesses new and old, large and small, commonly apply for financing to cover the cost of purchasing inventory or raw materials to make products. A healthy inventory allows you to have enough product on-hand to meet demand and keep customers happy.

Retail businesses, in particular, often require financing to replenish stocks, particularly is your store sees a big sales up-tick during certain seasons. For example, a company that sells a popular holiday gift might take out a short-term loan to purchase product ahead of the holiday season, and then repay that loan with the proceeds of their seasonal sales.

4. Purchase Equipment

Almost all businesses require equipment of some sort — especially businesses involved in manufacturing, as well as those in the food and service industries. Whether you need professional gym equipment or even a business vehicle, such assets can represent a major expense to a new, struggling, or expanding business.

Purchasing equipment may necessitate a business loan, or perhaps you’d rather charge it on your business credit card if your credit limit is high enough. One popular way to buy business equipment is equipment financing, as this type of loan typically does not require any collateral other than the equipment itself.

5. Hire New Talent

According to the National Small Business Association, data going back as far back as 1993 shows a strong connection between businesses’ ability to hire employees and their ability to get financing. Indeed, payroll is a significant expense businesses must contend with, including not just wages, but healthcare and other benefits, as well as employee training. In some cases, businesses even have to reduce their number of employees or scale back employee benefits if they don’t have sufficient access to financing.

While taking out a loan to hire someone is always a risk, it’s true that employees are a business’s greatest asset; if the employee is worth their salt, they will eventually justify the expense of the loan.

6. Expand Products/Services

Businesses in the growth stage, as well as stable businesses trying to increase revenues and/or stay competitive with peers, will need to expand their offerings from time to time. Regardless of how you’re going to achieve a product or service expansion, an installment loan or another type of business loan can help you make the necessary investments to keep your offerings fresh and relevant.

7. Open A New Location

Your business is growing fast and you need to open a new location. Expanding to a new location is a major undertaking requiring a lot of capital, but one that can pay off tremendously in time.

If you have at least two years’ time in business, you may be eligible for a long-term business expansion loan with low interest rates. Businesses purchasing real estate to open a new location be eligible for a commercial real estate mortgage such as those offered by the SBA through the  SBA CDC/504 program. There is even such a thing as real estate crowdfunding for businesses.

Or, say you own an online business and want to establish your first physical location, you might consider a startup loan to help get your new operations up and running.

8. Pay Taxes

Ideally, you will set aside enough money throughout the year to pay your business taxes when the tax man comes a knockin’. But alas, life doesn’t always work out that way, which is why small businesses frequently take out loans to pay taxes.

Rather than get in trouble with the IRS for not paying your taxes, you are much better off using a business loan or even a cash advance to pay your taxes.

9. Create A Safety Net

A safety net is a cash or credit “cushion” you can use to fall back on during slim times. Perhaps you own a seasonal business or simply have cash-flow problems from time to time; even though you don’t require any extra working capital at the present moment, you feel good knowing it’s available if and when you need it.

You’re probably especially aware of the need for a safety net if you’ve been caught without one in the past, and had to pay overdraft bank fees or get an expensive short-term loan to cover unforeseen shortfalls.

A revolving line of credit, working capital loan, or even a business credit card can all help provide a safety net for a future rainy day. If there are no rainy days on the immediate horizon, you will have some peace of mind knowing you’re prepared for anything.

10. Refinance Another Loan

While it may seem strange to take out a loan to pay off another loan, debt refinancing is a popular and sometimes necessary reason to take out a business loan. You might choose to refinance your business debt because you are offered a loan with better rates and fees, or you might choose to consolidate multiple loans into one loan.

If you’re considering refinancing a loan you are currently paying on, check out our Complete Guide To Refinancing Small Business Debt.

11. Buy A Business

A business acquisition loan, or a loan to buy a business, is another popular category of business loans. You can take out this kind of loan to expand your current business’s offerings with the purchase of another business, or to buy a business even if you don’t have an existing business (in which case you will probably need a startup loan).

Depending on your business credentials, the health of the business you want to purchase, and other factors, you may be able to get a business acquisition loan through a bank or the SBA. You might also finance your business purchase through a business expansion loan or a startup loan from an online lender. There are also franchise loans available to individuals looking to purchase a new or existing franchise.

12. Buy Out A Partner

business loan vs personal loan

Sometimes it just doesn’t work out with a business partner. But just because your partner agrees to be bought out doesn’t mean you’ll necessarily have the money to do so. In these circumstances, you can get a business loan to execute a partner buyout.

There is not really a specific type of loan for partner buyouts but you can use many standard business loans for this purpose, including an SBA standard 7(a) loan.

13. Cover Construction Costs

Perhaps you want to expand or improve your physical business location(s) with renovations or improvements, or maybe you want to construct a brand-new building for your business. Either way, a commercial real estate loan—also called a commercial mortgage or commercial construction loan—is the type of financing you need.

You can use a commercial construction loan, typically obtained through a bank or credit union, to pay for construction costs such as labor, materials, and land development. Hard money loans are another option to pay for business construction.

14. Cover Unpaid Invoices

Businesses with a lot of outstanding invoices can free up pending earnings using a type of loan called invoice factoring.

The financer fronts you the money that your customers owe you, and then you repay them as the customers pay off their debts. With this type of financing, your business does not necessarily need to have good credit, as the invoice factor is more concerned with your customers’ credentials than with your business’s.

15. Buy Insurance

Insurance is a major business expense. Business insurance requirements vary by state and industry. Liability insurance, property insurance, employee healthcare insurance, malpractice insurance, and flood insurance are just a few types of insurance your business might need. For certain business loans, you even need insurance in order to get the loan in the first place. For example, you may need life insurance and various other types of insurance to qualify for an SBA loan.

While, ideally, insurance costs will be included in your budget as a percentage of your gross sales, a business loan or line of credit can help your business pay your insurance policy during times you cannot afford to do so.

16. Cover An Unexpected Expense

Remember that safety net we talked about earlier? Well if you don’t have it, you could have no choice but to take out a loan after-the-fact to cover an unexpected business expense that you didn’t budget for. This could be anything from replacing some expensive equipment that failed unexpectedly to making repairs after a natural disaster. Fortunately, an emergency business loan can help your business cover the expense of just about anything life can throw at ya.

17. Advertise Your Business

Marketing/advertising is a business expense that can cost a lot of money upfront but will hopefully pay off in the long run. SEO and online advertising, commercials, billboard advertising, radio ads, and promotional materials are all types of marketing for which you could need a loan, especially if you’re hiring a marketing agency to try to achieve big results.

18. Build Credit

A lot of small businesses don’t have much of a business credit history, even though the business owner herself might have good credit. Taking out a business loan is one way of establishing a business credit history rather than using your personal credit for your business. Building business credit will allow you to separate your personal and business credit profiles, and will also put you in a good position if you need to ask for a business loan in the future.

For more information on this and other ways to build your business credit history read my Ultimate Guide To Improving Your Business Credit Score.

19. Take Advantage Of A Business Opportunity

Every now and again, your business may be presented with an awesome opportunity that is just too good to pass by—even if you can’t afford the whole thing up front. Business success requires a lot of pragmatism and planning, but there is also some degree of risk-taking and, dare I say it, magic. Whatever that special something is, if you get a “spidey sense” that a certain opportunity will help take your business to the next level, it can pay off handsomely to trust your intuition and go out on a limb to make that investment.

Of course, going out on a limb in this case likely means taking out a business loan. Just make sure you’re not so focused on the opportunity that you rush things and say yes to the first loan offer you come across. It’s absolutely essential to compare multiple loan offers to make sure you are getting the best deal.

Types of Business Loans

I’ve discussed many types of business loans in this post, and it can be confusing to sort through all the different loan categories if you don’t know what you need. To help simplify things, I’ve made a chart with brief explanations of different loan types discussed, and below that, I included longer descriptions of some popular loans you should know about.

Resource Description

Startup Loan

Financing for businesses 6 months old or younger.

Crowdfunded Loan

Funds sourced from a network of backers or investors. 

Small Business Grant

Free funds granted to businesses, normally for a specific project. 

Working Capital Loan

Financing to cover daily operating expenses of running a business.

Business Line of Credit

A credit facility from which your business can borrow money at any time. 

Short-Term Loan

Usually a higher-interest loan that you pay back quickly, typically within a year. 

Business Credit Card

Credit card used for business expenses.

Equipment Financing

Self-securing loan to finance major equipment purchases.

Installment Loan

A standard type of business loan also called a term loan, repaid in regularly scheduled installments.

Long-Term Business Expansion Loan

Usually a large, low-interest loan, repaid over 5 or more years.

Real Estate Crowdfunding

Crowdfunded capital to purchase real estate for a business.

Merchant Cash Advance

Expensive but quick source of business financing for merchants who need fast funds.

Business Acquisition Loan

Loan to purchase a business.

Franchise Loan

Loan to open a new franchise or purchase an existing franchise.

SBA 7(a) Loan

Standard business loan backed by the U.S. Small Business Administration.

Commercial Real Estate Loan

Long-term loan to purchase commercial real estate for a business.

Hard Money Loan

Shorter-term real estate loan similar to a mortgage, requiring the property you’re purchasing as collateral. 

Invoice Factoring

Service which converts your small business’s outstanding invoices to cash.

Emergency Business Loan

Fast loans to cover business funding emergencies. 

Installment Loan

Term loans, also called “installment loans” are a broad category of business loans. This type of funding is paid back in periodic installments, with interest. It may be a short- or long-term loan. Higher-quality term loans typically give you a longer amount of time to repay the loan, and let you pay via monthly installments (vs. weekly or daily installments with short-term loans). However, you will need at least 2 years in business, plus good credit and strong revenues, to qualify for a long-term business loan, particularly if you borrow from a bank; online lenders have less strict requirements.

Long- and medium-term loans are useful for established businesses making long-term investments in fixed assets like property or renovations, though they can also be used for working capital.

You can get term loans from a bank or credit union, though the lenders below offer reasonably quick installment loans as well:

Lender Borrowing Amount Term Req. Time in Business Min. Credit Score Next Steps

smartbiz logo

$30K – $350K 10 – 25 years 2 years 650 Apply Now

$2K – $5M Varies 6 months 550 Apply Now

$25K – $500K 6 months – 5 years 2 years 620 Compare

lending club logo

$5K – $300K 1 – 5 years 12 months 600 Compare

Short-Term Loan

Short-term business loans—installment loans that are repaid in 3 years or less, or sometimes in a matter of months—usually come in smaller amounts with higher rates when compared to long-term loans. Short-term loans also tend to require weekly or daily repayments. Although they are more expensive and less desirable than long-term loans in a lot of ways, short-term loans are relatively fast and easy to get and don’t have as stringent borrower requirements in terms of credit score, income, or time in business.

Because they have such a short repayment schedule, short-term loans are good for short-term problems, such as one-time expenses/investments.

The following lenders offer good terms and reasonable rates if you need a short-term loan:

Lender Borrowing Amount Term Interest/Factor Rate Req. Time in Business Min. Credit Score Next Steps

$5K – $500K 13 – 52 weeks x1.029 – x1.1872 9 months 550 Apply Now

$5K – $300K 6, 9, 12, 15, or 18 months x1.15 – x1.31 1 year 600 Apply Now

$5K – $500K 3 – 36 months x1.003 – x1.04/mo 12 months 500 Apply Now

$2K – $5M Varies As low as 2% 6 months 550 Apply Now

Merchant Cash Advance

Merchant cash advances are not technically loans; rather, they are advances on your future sales or revenue. With a cash advance, you’ll receive a lump sum, which you’ll then begin repaying out of your daily credit card sales.  The interest charged on MCAs is usually calculated in terms of a factor rate rather than interest rate—for example, you might have a factor rate of 1.3, which means you’ll have to repay 1.3x the amount you borrowed. A typical factor rate for an MCA is between 1.2 and 1.4.

An MCA is good for an emergency situation where you need a large sum of money quickly and/or have bad credit, but you have a healthy daily cash flow. It does not help you build business credit because it’s not actually a loan and these lenders don’t usually report to credit agencies.

Generally, we don’t recommend MCAs if you’re eligible for another type of financing, but the following cash advance providers are reputable:

Lender Borrowing Amount Min Credit Score Time To Funding Next Steps

$5K – $500K 550 1-3 Days Apply Now

$2K – $5M 550 1-2 Days Apply Now

$5K – $500K 500 2-5 Days Apply Now

$5K – $250K 500 2-5 Days Apply Now

Business Credit Card

Business credit cards are useful the same way personal credit cards are useful—they allow you to pay for large or small expenses even if you don’t have the cash on hand, while also earning you rewards and building your credit history. Of course, you can get yourself into trouble if you don’t pay off the balance in a reasonable amount of time. With that said, business credit cards are super handy for any type of business expense that doesn’t exceed your credit limit, particularly if you can find a card with a 0% introductory rate, like the ones below.

Credit Card 0% Introductory Period Next Steps
American Express Blue Business Plus 0% APR on purchases and balance transfers for the first 15 months Compare
Chase Ink Business Unlimited 0% APR on purchases and balance transfers for the first 12 months Apply Now
American Express SimplyCash Plus 0% APR on purchases for the first 9 months Compare
Capital One Spark Cash Select For Business 0% APR on purchases for the first 9 months Compare
Bank of America Business Advantage Cash Rewards Mastercard 0% APR on purchases and balance transfers for the first 9 months Compare

Even if you don’t have an expense looming on the immediate horizon, a business card is just good to have in case you need it.

Business Line of Credit

A business line of credit is an amount of money available for you to draw from as needed. You only have to pay back what you borrow (plus interest). Similar to term loans, you can get a line of credit from a bank or online lender. Not unlike a business credit card, a line of credit is useful to have just in case you need to make up for any type of shortfall or gap. An LOC can come in handy especially if you have a seasonal business or a business with occasional cash flow problems. Additionally, a line of credit, like the ones offered by the lenders below, can help you build business credit.

Lender Borrowing Amount Draw Term Draw Fee APR Next Steps

$6K – $100K 6 months None Starts at 13.99% Apply Now

$2K – $5M Varies Varies Varies Apply Now

$5K – $5M 6 months 1.50% per draw 21% – 65% Apply Now

$1K – $100K 12 weeks None 12% – 54% Apply Now

Invoice Factoring

Invoice financing, sometimes called invoice factoring, is when you sell your business’s unpaid invoices to a credit facility. The facility fronts you the amount of the unpaid invoice (minus a percentage they charge as a fee), and you then repay the lender as your customers repay you. Note that you do still need to repay the lender even if your customer never pays you.

Invoice financing is a useful type of financing for businesses with a lot of unpaid invoices that want to free up some cash. The borrower requirements are usually pretty relaxed, as invoice finance companies are more concerned with your customers’ creditworthiness rather than your business’s.

Equipment Financing

Equipment financing is useful for the purchase of any type of equipment or machinery your company needs but can’t afford outright. This type of “self-securing” financing does not require any collateral other than the equipment itself, and you usually don’t need to have excellent credit or much else in the way of borrower credentials. If you default on the loan you could lose the equipment, but if you make all your payments, you will eventually own the equipment.

We recommend the following equipment financers:

Lender Borrowing Amount Term Interest/Factor Rate Additional Fees Next Steps

$2K – $5M Varies As low as 2% Varies Visit Site

$5K – $500K 24 – 72 months Starts at 5% Yes Compare

Up to $250K 1 – 72 months Starts at 5.49% Varies Compare

Do You Need A Business Loan? Next Steps

If you’ve decided you need a business loan, it’s time to take the next steps to secure one.

1. Compare the different types of small business loans discussed above and determine which type of loan best suits your need. Or, read more about common types of business loans.

2. Take a look at our free guide to small business loans.

3. Calculate how much you can afford to borrow.

4. Take a look at our favorite lenders.

Once you complete your initial research by taking these steps, you should have a very good idea of what to look for in a loan and which type or types of financing are best for your situation. You’re now ready to start applying!

To save time applying to multiple loans, you might consider using a lending matchmaker service like Lendio, which allows you to compare multiple loans tailored to your needs.

Final Thoughts

Applying for business financing can be daunting, given all the myriad types of loan products out there, and the possibility of being rejected for financing. You might also be worried about your ability to make payments on the loan.

However, if you have a good reason to apply for a business loan, there is a very decent chance that there is a lender willing to lend to you with feasible, realistic terms. With those funds, you’ll be able to address whatever needs your business has while building up your business credit profile with each repayment.

Lender Borrowing Amount Term Interest/Factor Rate Req. Time in Business Min. Credit Score Next Steps

$5K – $500K 13 – 52 weeks x1.029 – x1.1872 9 months 550 Apply Now

$5K – $300K 6, 9, 12, 15, or 18 months x1.15 – x1.31 1 year 600 Apply Now

$5K – $500K 3 – 36 months x1.003 – x1.04/mo 12 months 500 Apply Now

$2K – $5M Varies As low as 2% 6 months 550 Apply Now

The post 19 Reasons To Get A Business Loan (And How To Get Started) appeared first on Merchant Maverick.

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Business Loans For Auto Repair Shops

Cars may be starting to look more like computers, but they still won’t stay on the road long without the help of a trusty local auto repair shop.

If you’re in the auto repair business, you know that the volume of work — as well as the types of problems you’ll encounter — can vary greatly by the day. Even the most prepared shop may run into emergencies where funds aren’t readily available. When that happens, you may need a quick loan to keep things running smoothly. Or you may just need a traditional loan for a large, planned expense.

No matter your need, navigating through the vast market of traditional and alternative lenders can be daunting. Read on and we’ll walk you through how to get business loans for auto repair shops.

Financing Need Best Loan Type Recommended Lender
Purchasing Equipment Equipment Financing Lendio
Supplies and Inventory Short-term Loans PayPal LoanBuilder
Working Capital Lines of Credit OnDeck
Marketing and Advertising Business Credit Card Chase Ink Business Preferred
Business Startup/Expansion/Remodeling SBA Loan SmartBiz

Loan For Equipment Purchasing

We’re not talking parts for your customers’ vehicles. A loan of this type can help you buy the bigger stuff you’ll be keeping in-house and using regularly — things like air compressors, vehicles lifts, brake lathes, and engine hoists.

In most cases, you won’t be purchasing heavy equipment on the fly; you’ll purchase it when you’re first opening your shop, or you’ll have a general idea of when an old piece of equipment needs to be replaced. In these cases, you’re probably less concerned about speed than you are about getting a good deal that fits the needs of your shop.

Equipment Loans

If you prefer to own your equipment, you may want to look into equipment loans. These resemble traditional installment loans in many ways: they’ll accrue interest over time, you’ll make monthly payments, etc. But these loans have a built-in advantage; the equipment you’re purchasing with them can serve as collateral. Collateral is an asset the borrower puts up as security when they take on debt. Secured loans generally have better rates and terms than comparable unsecured loans.

Traditionally, equipment loans cover around 85 percent of the equipment’s costs, but some lenders may cover the entire cost. In most cases, this does not include transportation costs.

Equipment Leases

These are not loans strictly speaking, but they are a popular way to finance heavy equipment. (Read more about equipment loans vs equipment leases.) Leases fall into two broad categories.

Capital leases are essentially an alternative way to buy your equipment. In most cases, you are considered the owner of the equipment under this type of lease. You’ll make monthly payments for the length of the lease, at the end of which you’ll pay a small residual (sometimes as low as $1) to close your account.

Operating leases are closer to the traditional definition of a lease. In this case, you’ll effectively “rent” the equipment over the course of the lease, making monthly payments. At the end, however, you’ll have the option to return the equipment or buy it at fair market value. This type of lease is useful for equipment that becomes obsolete quickly.

Recommended Option: Lendio

If you’re not working with a captive lessor or your preferred bank, it’s nice to be able to hit a bunch of potential equipment financers with one easy application. Lendio is a great way to do just that. Within 72 hours of your application, you should have multiple equipment financing offers on your screen. Funds are typically dispensed within a week of accepting an offer.

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Loans For Supplies & Inventory

You never want to be in a position where your auto body shop is suffering from too much business. Whether you’re facing a very high volume of customers, or an unusual number of customers all presenting with similar car problems, you may find your supplies depleted more quickly than you can collect on your invoices.

When this happens, you may want to consider a short-term loan.

Short-term Loans

Fast, streamlined, and (relatively) expensive, short-term loans are handy when you need a loan fast and want to pay it back quickly.

Short-term loans can usually get money into your hands within a day or two, which makes them a good choice for unplanned emergency financing. Rather than charge interest, short-term loans use a flat fee formula, or factor rate, to calculate the amount of money you’ll owe. For example, if you take out $10,000 at a 1.2 factor rate, you’ll need to pay back $12,000.

Short-term loans usually have terms shorter than a year, so their repayment schedule is much faster than those of medium and long-term loans. If you take out a short-term loan, you’ll be making weekly or daily payments, which, in most cases, will be automatically deducted from your business account.

Recommended Options: PayPal LoanBuilder

Because short-term loans are so fast and volatile, you’ll want some flexibility over the terms of your loan. PayPal’s LoanBuilder product is built around the idea of customization. You’ll be able to customize many elements of your loan to fit your need. Better yet, their rates are reasonable (as short-term loans go).

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Loans For Working Capital

merchant cash advance industry

Working capital is a wonky term for the money you have on hand for daily operational expenses. If everything’s going well, you probably don’t have to give it a lot of thought. But if emergency expenses have tapped into your reserves, you may find yourself unable to pay some small, recurring expense.

Working capital loans tend to be some of the most flexible when it comes to what you can spend your money on.

Lines Of Credit

Since working capital expenses come in many different forms and amounts, it’s nice to have a flexible financial cushion to fall back on. Rather than giving you a lump sum, a business line of credit pre-approves you for a certain amount of money, called your credit limit. While your account is active, you can draw on your credit line as much or as little as you want so long as the total amount you’ve borrowed doesn’t exceed your credit limit.

In most cases, you’ll only pay interest on the amount of money you’ve borrowed, though some lenders do charge administrative and access fees. Revolving credit lines let you reuse credit after you pay off your balance, similar to a credit card. Non-revolving lines of credit don’t have this feature and tend to be extended for specific expenses where the final cost is uncertain.

OnDeck

OnDeck offers quick and easy access to lines of credit, even for businesses with fairly poor credit. Depending on your revenue and other qualifications, you can get a credit limit between $6K and $100K with no draw fee. Just be aware that these are short-term credit lines lasting only about 6 months, but considering the approval process only takes a few days, you don’t need to plan too far ahead. The major downside is the $20/mo administrative fee, but OnDeck will waive that if you withdraw at least $5,000 within the first five days of opening your account.

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Loans For Marketing & Advertising

Word of mouth may be the ideal form of advertising, but sometimes you need to reach outside of your normal sphere of influence to draw in new customers. Or maybe you’re a new business that needs to establish a customer base.

Designing and running an effective advertising campaign is outside of the purview of this article, but most of the good ones require spending some money.

Business Credit Cards

Surprised? Business credit cards are often suggested as a way to smooth out your business’s cash flow, but they also have some other features that make them ideal for certain types of expenses. Namely, rewards programs that allow you to get a return on specific expenses — expenses like advertising.

Just be sure to pay off your balance within your business credit card’s grace period, or the cost in interest will exceed your rewards savings.

Recommended Option: Chase Ink Business Preferred

Chase’s Ink Business Preferred credit card is at the top of most business credit card lists, and for a good reason. It offers one of the most lucrative rewards programs out there. Advertising expenses spent on social media sites and search engines earn triple points (as do travel, shipping, and telecom expenses). Those points can be redeemed on travel, on Amazon, as gift cards, statement credit, or cash back.

The card has an annual fee of $95 and an APR between 17.99% and 22.99%.

Chase Ink Business Preferred



Apply Now 

Annual Fee:


$95

 

Purchase APR:


17.99% – 22.99%, Variable

Loans For Business Startups, Remodeling, Or Expansion

Like equipment purchases, business remodeling and expansion (or starting your business up in the first place) falls under the category of “large, planned expenses.” One of the bigger and more daunting business expenses occurs when you’ve outgrown your space.

If you need additional bays, or even a larger overflow lot, you’ll want a loan that can offer you a large sum of money at a low interest rate. Your best bet is probably an SBA loan.

SBA Loans

The Small Business Administration (SBA) is a government agency tasked with advising and assisting small businesses. The SBA doesn’t usually directly lend to businesses. Instead, it guarantees a portion of an SBA-approved lender’s loan. This guarantee allows you to access better rates and terms than your credit rating or business size might otherwise allow.

The two most common forms of SBA loan are the SBA 7(a) and the SBA 504.

SBA 7(a) Loans SBA 504 Loans
  • Working capital
  • Commercial real estate purchasing
  • Equipment purchasing
  • Purchasing a pre-existing business
  • Refinancing debt
  • Purchase an existing building
  • Purchase land and land improvements
  • Construct new facilities
  • Renovate existing facilities
  • Purchase machinery and equipment for long-term use
  • Refinance debt in connection with renovating facilities or equipment

The 7(a) offers the most flexibility in terms of what it can be used for. This can include anything from equipment to non-investment real estate, leasehold improvements, business acquisition, or start-up costs. Depending on your needs, however, you may want to look into the SBA 504 loan, which has a higher maximum borrowing amount. These loans can be used to purchase land and buildings, buy long-term equipment, or make improvements to your lot.

Be prepared to play the long game with an SBA loan, though. They take far longer to close than the other financial products we’ve discussed.

Recommended Option: SmartBiz

You have a lot of choices when it comes to SBA-approved lenders, which likely includes your preferred local bank or credit union. You don’t need our advice for that, right?

But if you need help navigating the complexity of the SBA application process and don’t have a lender specifically in mind, you may want to give SmartBiz a look. SmartBiz can’t do a full end-run around the massive amounts of paperwork required to get an SBA loan, but what they can do is keep the process as organized and streamlined as possible on your behalf. Most importantly, they’ll match you with a lender that fits your needs.

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What To Consider When Choosing A Lender

If you didn’t see a lender you liked above, you can always hunt for one on your own. Though it can be a time-intensive task, there are some ways to strategically narrow your search.

Why Do I Need A Loan?

Lenders serve a variety of needs, but not every lender can serve yours. Even if you don’t like the lenders we recommended, the type of financial products discussed above can be a guide for finding a lender.

A slow, traditional lender may not be able to help you get emergency funds, while a fast, expensive alternative lender may be a poor choice for financing an expensive renovation.

Am I Qualified?

One of the easiest ways to rule out a lender is to figure out if they’ll rule you out.

Most lenders have minimum qualifications for borrowers. The most common ones are:

  • Time In business: Lenders want to know you’ll be around long enough to pay them back.
  • Credit Rating: Some lenders use credit rating as a line in the sand, while others use it mainly to help determine rates.
  • Revenue: Lenders want to make sure you can pay off your debt. Sometimes this number is an absolute minimum (like $100,000/yr); other times it’s relative to the amount of money you want to borrow ($1.50 for every $1).

Additional factors may include the number of other loans you currently have, the industry or state you’re in, and whether you’ve had any recent bankruptcies.

Do The Terms & Rates Meet My Needs?

While it might seem that lenders have the upper hand, remember that you are ultimately the one who gets to decide whether or not the transaction happens.

If a lender charges usurious rates, if they pile on unnecessary fees, or if they demand repayment on a schedule you can’t accommodate, you’ll probably want to keep looking.

Try to get a sense of whether your prospective lender will be a flexible partner or a predatory animal looking to cash-in on any small mistake you make. Do they offer early payment incentives? Incentives for repeat business? Is customer service available and helpful?

Final Thoughts

When it comes to keeping your auto repair shop’s engines purring, you have a ton of potential financial solutions at your disposal. With a little patience, you can find a deal that fits your needs.

Didn’t find a lender you were looking for above? Here are some overviews of our contenders for loans, lines of credit, credit cards, and startup financing.

The post Business Loans For Auto Repair Shops appeared first on Merchant Maverick.

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The Best Business Loans For Trucking Companies

You’re the owner of a trucking company, and it’s time for expansion through the purchase of new equipment, hiring of new employees, or improvements to your facilities. The good news is that this means your business is growing. The bad news? That growth comes at a price, and the costs may be too much for your bank account.

Or maybe your situation is different. An unexpected emergency has cropped up, and you feel trapped. You’ve crunched the numbers, and it looks like you’re facing a major financial hurdle. How do you handle this financial crisis?

Whether you’re growing quickly or life has thrown a curveball your way, you need extra money. Instead of clearing out your checking account, it’s time to consider a financial option that many smart business owners take advantage of every day: a business loan.

A business loan is a great way to expand your trucking business or get you out of a financial bind. The key is to know what type of loan best fits your needs, is the most affordable, and provides the greatest return on investment. Whether you own a large trucking business with multiple drivers or you’re an owner-operator with one vehicle, read on to learn more about the loan options available for your business.

Loan Type What Is It?

SBA Loans

Low-cost loans offered by the Small Business Administration in partnership with financial institutions. Can be used for most business financing purposes.

Equipment Loans

Loans used to purchase equipment such as semi-trucks.

Medium-Term Installment Loans

Traditional term loans that can be used for most business financing purposes.

Business Lines of Credit

Credit lines from which the business can draw funds at any time, without going through an application process. Used for working capital or other short-term needs.

Short-Term Business Loans

Quick business loans used for working capital or other short-term needs.

Business Credit Cards

Small business credit lines used for everyday business expenses such as fuel and maintenance costs.

Small Business Administration (SBA) Loans

Best for…

Business owners with high credit scores who need to make a large purchase with affordable monthly payments.

Types Of Loans Offered By The SBA

The Small Business Administration offers several programs that provide funding for trucking companies. SBA loans are backed by the government, opening up new financing opportunities for small businesses that don’t qualify for conventional business loans.

The SBA 7(a) loan program is one of the SBA’s most popular offerings. With a 7(a) loan, borrowers can receive up to $5 million to be used for almost any business purpose, including the purchase of equipment or machinery, real estate or land purchases, or even acquiring another business.

If you run a smaller trucking operation or you’re an owner-operator and you have an expense that requires $50,000 or less, the SBA microloans program may be an option for you. The average loan distributed through this program is $13,000. Funds can be used toward the purchase of machinery or equipment, working capital, or supplies.

SBA Loan Terms & Fees

Interest rates for the 7(a) loan program are set at the prime rate plus a maximum markup of 4.75% based on the amount of the loan and the repayment terms. Currently, interest rates fall between 7.5% and 10%. Interest rates can be fixed or variable. Repayment terms are up to 10 years or 25 years for real estate purchases. A down payment of 10% to 20% is typically required.

Intermediary lenders can charge various fees for a 7(a) loan, including origination fees, loan packaging fees, and guarantee fees up to 3.5%. Veteran-owned small businesses can apply for the Veterans Advantage loan, which offers the same rates and terms as the 7(a) program but with reduced guarantee fees.

On average, interest rates for SBA Microloans fall between 8% and 13%. The maximum repayment term for this type of loan is 6 years. Lenders may charge fees for a microloan such as application fees, loan processing fees, and closing costs.

SBA Loan Borrower Eligibility

To qualify for an SBA loan, a borrower should have a credit score of at least 680. The borrower’s credit report should be free of bankruptcies, foreclosures, and past defaults on government loans.

The borrower must be an owner of a for-profit business that is based in the United States. All borrowers must also meet the guidelines for a small business as defined by the SBA. This limits the number of employees, net worth, and annual revenues of the business.

Borrowers must have a legitimate purpose for taking the loan, and they must have exhausted all other options before applying for an SBA loan. Both startups and established businesses are eligible for SBA loans. All borrowers will be required to sign a personal guarantee.

Where To Find SBA Loans

SBA 7(a) loans are available through SBA intermediary lenders. These lenders could be banks, credit unions, or private lenders. The SBA offers its Lender Match tool which matches you with a lender in your area. You can also apply online through a service like SmartBiz.

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Streamlines SBA loan process for:

  • Debt refinancing
  • Working capital
  • Commercial real-estate

Highlights:

  • Suited for small and large businesses
  • Excellent terms and fees
  • No prepayment penalty

SBA microloans are available through participating non-profit organizations.

Equipment Loans

Best for…

Businesses that need to purchase expensive equipment (including a new or used truck) but don’t have the money to buy it outright.

Equipment Loan Uses

An equipment loan is exactly what it sounds like: a loan that is used to purchase equipment. In the trucking industry, this could mean the purchase of a new or used truck, a trailer, or other long-term physical assets that are necessary for operations. This type of loan allows you to break down the cost of expensive equipment into smaller payments that are easier to manage.

Equipment Loan Terms, Fees, & Down Payment

Equipment loan terms and rates vary based on the lender selected, the amount of the loan, and the creditworthiness of the buyer. The most qualified buyers may be eligible for interest rates as low as 5%. However, applicants that face challenges, such as a low credit score, may be stuck with an interest rate of 24% or higher. The average repayment terms are between 3 and 7 years.

Fees that may be associated with taking out an equipment loan include origination fees and administrative fees. Down payment requirements also vary. Borrowers with very high credit scores and a long time in business may qualify for 100% financing with $0 down. Other borrowers may have to pay an average down payment of 10% to 20%.

Even if you qualify for 100% financing, it’s usually a smart move to put some money down for your loan. This will reduce your amount of debt immediately and can also help prevent a situation where the equipment becomes obsolete before you’ve fully repaid the loan.

There is typically no additional collateral required, as the equipment being purchased with the loan serves as the collateral.

Borrower Eligibility For Equipment Loans

One of the benefits of equipment loans is that there are options available for everyone, even if you have a low credit score or haven’t been in business for very long. It should be noted that borrowers with these challenges will face higher interest rates, increased down payments, and an overall more expensive loan.

Equipment loans are available to borrowers with credit scores as low as the mid-500s. Time in business requirements vary, but most lenders require at least 6 months in business, although there are other options for startups and new businesses.

Borrowers must use the loan funds to purchase eligible equipment. As previously discussed, a down payment may also be required in order to receive the loan.

Equipment Loans VS Leases

There are two types of equipment financing you may consider: equipment loans and equipment leases. The type you choose is based on the specific needs of your business.

With a loan, you’ll make scheduled payments that go toward the principal balance and interest. This is a smart option if you need equipment but don’t want to foot the entire bill immediately. Although this ultimately costs more than an outright purchase, it allows you to make lower, more affordable payments. Once all payments have been made, the equipment is yours. If you plan to keep your equipment for many years, this is the best option for you.

When you lease equipment, you’re essentially renting from the lender. You make payments each month to be able to use the equipment. Once your lease is over, you’ll return the equipment and can upgrade to the latest model. In some cases, you may be able to pay the remaining balance if you’d like to own the equipment outright.

With leases, monthly payments may be more affordable and it’s possible to find leases that don’t require a down payment. However, the total cost of the lease typically winds up being more expensive than loans due to higher interest rates.

Leases are a good choice for you if you need to upgrade your equipment frequently to have the latest and greatest model. It may also be an option if you don’t have the down payment required for an equipment loan.

Where To Find Equipment Loans

There are several options for finding equipment loans. Many banks and credit unions offer equipment financing programs. There are also lenders that specialize in equipment financing. Some equipment manufacturers even have their own finance programs in place. Check out our comparison of equipment financing to find the best rates and terms for your business. Or get the process started with one of the lenders below:

Lender Borrowing Amount Term Interest/Factor Rate Additional Fees Next Steps

$2K – $5M Varies As low as 2% Varies Visit Site

$5K – $500K 24 – 72 months Starts at 5% Yes Compare

Up to $250K 1 – 72 months Starts at 5.49% Varies Compare

Medium-Term Installment Loans

Best for…

Businesses that need funds to purchase equipment, refinancing existing debt, or use as working capital.

Medium-Term Installment Loan Uses

A medium-term installment loan is a loan that is paid off over a period of 1 to 5 years. With this type of loan, you can break down the cost of a purchase or receive working capital while repaying with low monthly payments.

Medium-term installment loans can be used for any business purpose. These loans can be used for the purchase of new equipment. You can use the funds for working capital. Loan proceeds can be used for business expansion or acquisitions. You can even use these loans to refinance existing debt.

Medium-Term Loan Terms & Fees

Loan terms and fees vary by lender and creditworthiness. Borrowers with the highest credit scores can receive loans with rates of about 6%. Borrowers with lower credit scores may receive interest rates up to 30%.

Typical fees you may be required to pay to receive a medium-term loan include application fees and origination fees. Collateral may be required based on your credit score and the amount of the loan. A personal guarantee or blanket lien is typically required.

Borrower Eligibility For Medium-Term Loans

Although medium-term loans may have higher interest rates and be more expensive than long-term options, qualifying is not as difficult. To qualify, you should have a minimum credit score of 600 with at least $100,000 in annual revenue, although these requirements may vary by lender.

Where To Find Medium-Term Loans

Some banks and credit unions offer medium-term loans, but these loans require high revenues and credit scores. If you don’t qualify, you can seek out an alternative lender that provides medium-term loans for less-qualified borrowers or try your luck with one of the online lenders below:

Lender Borrowing Amount Term Interest/Factor Rate Req. Time in Business Min. Credit Score Next Steps

$5K – $500K 13 – 52 weeks x1.029 – x1.1872 9 months 550 Apply Now

$5K – $500K 3 – 36 months x1.003 – x1.04/mo 12 months 500 Apply Now

$2K – $5M Varies As low as 2% 6 months 550 Apply Now

$20K – $500K 1 – 4 years 7.99% – 29.99% APR 2 years 660 Apply Now

Business Lines Of Credit

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Best for…

Businesses that want access to capital on demand.

Business Line Of Credit Uses

A business line of credit is similar to a credit card. A borrower has a credit limit set by the lender and can make multiple draws as needed up to and including the credit limit. The money can be used for any business expense, from unexpected emergencies to covering operational expenses or purchasing equipment.

Business Line Of Credit Terms & Fees

With a business line of credit, you only pay interest and fees on the borrowed amount. For example, if you have a total credit line of $200,000 but have only spent $50,000, you’ll only pay interest or fees on the $50,000. Fees and interest vary by lender and range from 1% to over 30%. The more creditworthy you are, the better rates you will receive.

Repayment terms also vary, but most lenders offer terms of 6 months or 12 months depending on the amount borrowed. Some lenders may offer longer repayment terms. However, it’s wise to pay off your balance as quickly as possible to avoid unnecessary fees and interest and lower the overall cost of your loan.

Borrower Eligibility For Business Lines Of Credit

Eligibility for lines of credit varies by lender. Some lenders, such as banks, may require credit scores in the 600s to qualify for a line of credit. Alternative lenders typically have much lower requirements. Some of these lenders do not have credit score requirements at all, and instead, look at the performance of the business to determine eligibility and maximum credit limits.

Time in business requirements may be as low as three months, while annual revenue requirements may be $50,000 or less, depending on the lender’s policies.

Where To Find Business Lines Of Credit

Some banks offer business lines of credit to borrowers with high credit scores. Alternative online lenders also have lines of credit available for borrowers with poor scores or who are looking for immediate funding. Read our full reviews of line of credit providers or get the ball rolling with one of the lenders below:

Lender Borrowing Amount Draw Term Draw Fee APR Next Steps

$6K – $100K 6 months None Starts at 13.99% Apply Now

$2K – $5M Varies Varies Varies Apply Now

$5K – $5M 6 months 1.50% per draw 21% – 65% Apply Now

$1K – $100K 12 weeks None 12% – 54% Apply Now

Short-Term Business Loans

Get your merchant funds fast. Image description: Clock with money underneath it

Best for…

Business owners that are forced to cover emergency expenses.

Short-Term Business Loan Uses

Short-term business loans are loans that are paid back over a very short period of time. This period of time varies, but it will not exceed one year.

Short-term loans are one of the most expensive forms of credit, so it is best to only use these loans when absolutely necessary. Because funding is fast (potentially as short as 24 hours), a short-term loan is best for emergency situations when time is of the essence.

Borrowers that have not been in business long or have low personal or business credit scores may have no other options than to seek a short-term loan. If this is the case, the return on investment should be calculated to determine if the loan is worth the high cost.

Short-Term Loan Terms & Fees

Terms and fees for short-term loans vary by lender and creditworthiness. Most short-term loans come with a factor rate that determines the total amount that will be repaid. Learn more about factor rates for short-term loans and how to calculate repayments.

With other short-term options, borrowers with high credit scores may find short-term options with interest rates below 10%. However, borrowers that are viewed as “risky” by the lender may be hit with interest rates up to 80%.

Repayment terms vary. For some short-term loans, the full loan is repaid within a few weeks. For other loans, the amount is repaid up to a year. Repayment schedules may be daily, weekly, or monthly.

For short-term loans, some fees may be required, including origination fees and maintenance fees. A personal guarantee or blanket lien is typically required.

Borrower Eligibility For Short-Term Loans

Qualifying for a short-term loan isn’t difficult. There are loans available to borrowers with credit scores as low as 500. Some lenders also have very low monthly or annual revenue requirements, as well as shorter time in business requirements.

Where To Find Short-Term Loans

You can receive a short-term loan by applying with online alternative lenders or one of the lenders below:

Lender Borrowing Amount Term Interest/Factor Rate Req. Time in Business Min. Credit Score Next Steps

$5K – $500K 13 – 52 weeks x1.029 – x1.1872 9 months 550 Apply Now

$5K – $500K 3 – 36 months x1.003 – x1.04/mo 12 months 500 Apply Now

$2K – $5M Varies As low as 2% 6 months 550 Apply Now

$20K – $500K 1 – 4 years 7.99% – 29.99% APR 2 years 660 Apply Now

Business Credit Cards

Best for…

Covering emergencies that require immediate funding or for recurring expenses, like fuel purchases.

Business Credit Card Uses

When used responsibly, a business credit card can be an enormous asset to a trucking business. A business credit card offers a revolving line of credit that can be used any time it’s needed. This is especially helpful when an emergency arises.

Business credit cards can also be used to earn rewards on your business’s recurring expenses, such as gas to fuel your rigs.

However, even though you can use your credit card whenever you want doesn’t mean that you should. The interest rates on credit cards can really stack up, and you could end up paying hundreds (or thousands) of dollars in interest over time. Keeping high balances can even lower your credit score due to high credit utilization.

However, with responsible use that includes paying off (or paying down) your card each month, you’ll even be able to boost your credit score while having access to extra capital when you need it. In addition, many credit cards offer rewards programs that allow you to earn points or cash back after every qualifying purchase.

Business Credit Card Terms & Fees

Like other types of loans, terms and fees vary based on the lender and creditworthiness of the borrower. Interest rates typically start around 14% and rise to over 25%. Many cards have introductory APR offers of 0% for qualified borrowers.

You may have to pay fees based on the card that you select, including annual fees, foreign transaction fees, cash advance fees, and balance transfer fees. Some lenders may also charge fees to issue employee cards.

Borrower Eligibility For Business Credit Cards

To qualify for the best interest rates, borrowers should have a credit score at least in the high 600s. Lenders will evaluate your income and your business revenue to determine your credit limit. You will also need a federal tax ID. If you’re a sole proprietor, you will be required to give your social security number.

If you have bad credit or revenue challenges, you may qualify for a card with a higher APR or a secured card. A secured card will require a refundable cash deposit before it is issued. As you use your secured card responsibly, your credit limit will increase and you may become eligible for an unsecured card.

Where To Find Business Credit Cards

The first place to look for a business credit card is at your own bank or credit union. However, if your financial institution does not offer this product or you fail to qualify, you can apply online with other credit card issuers. Learn more about the top business credit cards or check out the cards below, which are perfect for new business owners.

Card Name Best For Next Steps

SimplyCash Plus Business Credit Card from American Express

Cash back

Compare

Chase Ink Business Preferred

Travel rewards

Apply Now

Chase Ink Business Cash

No annual fee

Apply Now

Blue Business Plus Credit Card from American Express

0% introductory rate

Compare

Capital One Spark Classic For Business

Fair credit

Compare

Wells Fargo Business Secured Credit Card

Bad credit

Compare

Trucking Business Loan FAQs

Can I get a trucking business loan if I have bad credit?

If you have a lower credit score due to past mistakes, there are still loan options available to you. While higher credit scores are required for SBA loans, borrowers with poor credit can qualify for other loans, including short-term options, lines of credit, and business credit cards.

In order to get the most affordable loan and the best repayment terms, it’s best to go into the application process with a solid credit score. If possible, take steps to rebuild your credit before applying to lower your financing costs.

I am an owner-operator. What are my best business loan options?

As an owner-operator, there are several business loan options available for you. For the purchase of a truck, you should consider equipment financing. You may also be able to qualify for the SBA Microloans program, which provides up to $50,000 in financing for expenses.

Short-term loans, lines of credit, and business credit cards are also available to you, but these typically come at a higher cost.

I’m starting a trucking company. Am I eligible for a trucking startup loan? What are my best options?

There are many options available for trucking startup companies. The best option for borrowers with credit scores in the high 600s are loans from the SBA. SBA loans provide low interest rates and flexible repayment terms for startups and established businesses.

Because you won’t have traditional documentation like business tax returns and financial statements, your application will need to include a detailed business plan and future financial projections. You’ll also need to prove that you have industry experience in order to qualify.

If you have a good credit score, you could also consider taking out a personal loan. With a personal loan, qualifying will be based on your own income and credit score, with no requirements for annual revenues, business credit score, or time in business. This is another affordable loan for borrowers that want to start their own business.

Can I get a grant for my trucking company?

Most businesses do not qualify for grants. If you find a grant that you are eligible for, it’s important to note that competition will be stiff. The process for receiving a grant also doesn’t happen overnight, so if you need money for your trucking company fast, you’ll want to explore other options, including the loans mentioned in this post or other options, such as P2P lending or crowdfunding.

Final Thoughts

No matter what your financial needs, there’s a loan available to help you start or expand your trucking business. The key is to understand your options, shop around, and determine if the return on investment exceeds the cost of the loan. Even if your funding needs are urgent, it’s critical to borrow responsibly to put your trucking business on the road to success.

The post The Best Business Loans For Trucking Companies appeared first on Merchant Maverick.

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Best Credit Cards For New Business Owners

If you’re a new business owner, getting a credit card sounds like an awesome idea. Credit cards help you build credit, save you money with rewards, and enable you to make large purchases without needing cash on hand.

But as a new business owner, you may be wary of applying for a credit card because your company lacks credit history. The good news? Many card issuers will take your personal credit history into account. This means that if you’ve maintained a good personal credit score, you have an excellent chance of qualifying for a business credit card. The even better news? There are plenty of options even for those with limited credit history or poor credit scores.

We’ve researched some of best credit card options for new business owners and listed them below. Read on through to determine which one is right for you!

Comparison Of The Best Credit Cards For New Business Owners

Best for Card
Cash back SimplyCash Plus Business Credit Card from American Express
Travel rewards Chase Ink Business PreferredSM
No annual fee Chase Ink Business CashSM
0% introductory rate Blue Business Plus Credit Card from American Express
Fair credit Capital One Spark Classic For Business
Bad credit Wells Fargo Business Secured Credit Card

Best Card For Cash Back Rewards: SimplyCash Plus Business Credit Card from American Express

SimplyCash Plus Business Credit Card from American Express



Compare

Annual Fee:


$0

 

Purchase APR:


14.24% – 21.24%, Variable

Offering up to 5% cash back on some purchases, the SimplyCash Business Credit Card from American Express is hard to beat. It also provides you with some choice when it comes to cash back categories, meaning that you can customize this card to fit your spending habits.

This nifty card gives you 5% back on purchase made at U.S. office supply stores and on wireless telephone services purchased directly from U.S. service providers (up to $50,000 spent per calendar year). You’ll then get to pick one category from the below list of eight options to earn 3% cash back:

  • Airfare purchased directly from airlines
  • Hotel rooms purchased directly from hotels
  • Car rentals purchased from select car rental companies
  • U.S. gas stations
  • U.S. restaurants
  • U.S. purchases for advertising in select media
  • U.S. purchases for shipping
  • U.S. computer hardware, software, and cloud computing purchases made directly from select providers

As with the 5% categories, you’ll earn the 3% cash back up until you spend $50,000 in a calendar year (after which you’ll receive 1% back). All other purchases will net you 1% cash back.

SimplyCash Plus gives you the ability to buy above your credit limit. There is no annual fee, and 0% intro APR for the first nine months.

Need a more detailed breakdown? Visit our full review.

Best Card For Travel Rewards: Chase Ink Business Preferred

Chase Ink Business Preferred



Apply Now 

Annual Fee:


$95

 

Purchase APR:


17.99% – 22.99%, Variable

While this card from Chase is simply a rewards card, it packs in a lot of bonuses for those that travel frequently.

To start, Ink Business Preferred users get three points per dollar spent on travel, shipping purchases, Internet, cable and phone services, and on advertising purchases made with social media sites and search engines each account anniversary year (up to $150,000 spent). All other purchases get one point per dollar spent. You’ll then be able to redeem your points for 25% more when you redeem them for travel through Chase Ultimate Rewards.

Beyond those basic rewards, Chase also lets you transfer your points on a 1:1 basis to nine airline and four hotel reward programs. If you need something other than travel rewards, you’ll also be able to redeem points for Amazon.com purchases, gift cards, and cash back, making this an extremely versatile card.

If you want more information on this card, check out Merchant Maverick’s complete review.

Best Card With No Annual Fee: Chase Ink Business Cash

Chase Ink Business Cash



Apply Now

Annual Fee:


$0

 

Purchase APR:


15.24% – 21.24%, Variable

This card from Chase lets you earn up to 5% cash back when you make purchases at office supply stores and on internet, cable, and phone services (up to the first $25,000 spent). You can also earn 2% back when spending at gas stations and restaurants (up to the first $25,000 spent). Everything else earns you 1% back.

The cherry on top of all those rewards is that you won’t have to worry about paying an annual fee—this means you’ll end up with savings no matter how much you spend yearly.

The Ink Business Cash also features a 0% intro APR rate for the first 12 months, a very generous offer. Chase is currently offering a welcome bonus of $500 cash back when you spend $3,000 within your first three months of opening an account.

If you want all the deets, read our full review.

Best Card With A 0% Introductory Rate: Blue Business Plus Credit Card from American Express

Blue Business Plus Credit Card from American Express



Compare

Annual Fee:


$0

 

Purchase APR:


12.99% – 20.99%, Variable

If you need to make a big purchase but can’t pay it all up front, having a card with 0% APR is very helpful because you won’t accrue interest. With a 0% intro APR for the first 15 months, the Blue Business Plus Credit Card from American Express has one of the longest 0% intro rates.

On top of that generous intro APR period, the Blue Business Plus also packs in some solid rewards. As a base, you’ll earn two points per dollar spent up to $50,000 yearly, and then one point per dollar thereafter.

Amex also grants you expanded buying power, which enables you to spend above your credit limit. Additionally, this card does not carry an annual fee.

Get the full breakdown on the Blue Business Plus with the complete review from Merchant Maverick.

Best Card For Fair Credit: Capital One Spark Classic for Business

Capital One Spark Classic For Business


Compare

Annual Fee:


$0

 

Purchase APR:


24.74%, Variable

One of the easiest small business credit cards to get, the Capital One Spark Classic for Business was made for those who want to build their credit. Despite being aimed at those with lower credit, this card still offers some decent perks.

To start, its base rewards dole out an unlimited 1% cash back without any sort of annual fee. This means you’ll be saving money no matter what your yearly spending rate is. Additionally, you’ll be able to add employee credit cards at no additional cost. Capital One requires no foreign transaction fees—great if your business needs overseas travel.

For the in-depth rundown on Spark Classic, head on over to our full review.

Best Card For Bad Credit: Wells Fargo Business Secured Credit Card

Wells Fargo Business Secured Credit Card


business credit cards fair credit
Compare

Annual Fee:


$25

 

Purchase APR:


Prime + 11.90%

One of the lone secured cards for business, the Wells Fargo Business Secured Credit Card is an appealing option for those looking to boost a low credit score. Wells Fargo targets this card for those just starting a business, businesses with little or no credit, and those with past credit problems.

You also have a couple of reward options: get 1.5% cash back or one point per dollar spent, which can be redeemed for gift cards, merchandise, airline tickets, and more. Besides the base bonuses, you won’t need to worry about paying program or foreign fees. However, you’ll need to fork over $25 annually, and you can add up to 10 employee cards.

Want more low credit options? Check out our breakdown of the best business credit cards for those with bad credit.

FAQs About New Business Credit Cards

Do I need business credit to get a business credit card?

No, when you apply for a business credit card, issuers will also consider your personal credit history, which can be used to guarantee repayment.

What business information do I need to supply to get a credit card?

When applying for a business card, issuers usually request your company’s business tax identification number. If you don’t have one, you can often supply your personal social security number instead. They’ll likely ask you for your business’s legal structure, its ownership type, and its age. It’s also not uncommon for issuers to request your annual revenue, how much you spend, and which country your business is located in.

Can I still get a business credit card if I’m not registered as a business?

Yes, you don’t need to be officially registered as a business to get a business credit card. Find out more with our guide to business cards for the self-employed.

Can I get a new business credit card without signing a personal guarantee?

Usually, no. If you’re a new small business owner, you’ll most likely have to sign a personal guarantee.

Can I use personal credit cards for business?

Yes, there are a number of reasons why you might prefer a personal card, from better legal protection to better potential rewards. We go into more depth on the subject in our personal credit card guide.

Comparison Of The Best Credit Cards For New Business Owners

Card Name Best For Next Steps

SimplyCash Plus Business Credit Card from American Express

Cash back

Compare

Chase Ink Business Preferred

Travel rewards

Apply Now

Chase Ink Business Cash

No annual fee

Apply Now

Blue Business Plus Credit Card from American Express

0% introductory rate

Compare

Capital One Spark Classic For Business

Fair credit

Compare

Wells Fargo Business Secured Credit Card

Bad credit

Compare

The post Best Credit Cards For New Business Owners appeared first on Merchant Maverick.

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Top Business Credit Cards For Fair Credit

business credit cards fair credit

A business needs a degree of spending flexibility in order to survive and thrive. However, when it comes time to apply for a business credit card to help keep your business running smoothly, you may be disappointed to discover that your ability to get a business credit card is determined not only by the financial history and health of your business, but by your personal credit score as well. (If you don’t know your credit score, here’s an article detailing how you can check your credit score for free)

If you’re running a business while having less-than-stellar personal credit, you may find your credit score to be a hindrance when looking for a business credit card that fits your spending needs; many business credit cards require the applicant to have good-to-excellent personal credit.

Here at Merchant Maverick, we don’t believe that an imperfect credit history should stand in the way of your entrepreneurial dreams. That’s why we’ve gathered together a list of business cards specifically marketed to business owners and entrepreneurs with fair credit. And if you’re looking for more guidance, read our article on how to use business credit cards to your advantage.

What Is Fair Credit?

The inherent problem with calling certain credit cards good for people with “fair” credit is that terms like “fair” and “good” credit are not standardized, so financial products and review sites have differing definitions of what constitutes “fair” credit. We define fair credit as a credit score between 600 and 669, but other sources may differ somewhat. Note that “fair” credit is often called “average” credit — the terms are used interchangeably.

Why Do Card Issuers Check Your Credit Score?

Because credit card issuers are jerks.

I kid, I kid. The real reason is that your personal credit score is just another data point for business credit card issuers to consider when evaluating the credit risk of a prospective card user. Your business revenue will also be evaluated, but your personal credit comes into play as well. For the card issuers, it’s all about whether or not you’re likely to be able to make your payments on time, and your personal credit score affects that likelihood.

Best Unsecured Business Card For Fair Credit

Nearly every business credit card that’s marketed towards folks with fair credit is a secured credit card, meaning that you pay a security deposit that establishes the amount of your credit line. This way, if you default on your payments, the issuer can just claim your security deposit (and thus takes on less risk). With a secured card, you’re essentially borrowing money from yourself. This may sound absurd, but it is a great way to build up your business and personal credit (assuming the card issuer reports to the business and personal credit bureaus) so long as you make your monthly payments.

However, there’s an exception to this general rule. The Capital One® Spark® Classic for Business is an unsecured business credit card for business owners with fair credit. An unsecured card is a “typical” credit card in that you do not have to make a cash deposit or post any other physical collateral in order to obtain it.

Capital One® Spark® Classic for Business

Capital One Spark Classic For Business



Compare

Annual Fee:


$0

 

Purchase APR:


24.74%, Variable

Spark Classic is an ideal business card for the business owner seeking to build up their business credit. That’s because Capital One will report your card activity to both personal and business credit bureaus (not all cards do this). Just by making your payments on time, you’ll be improving your credit. This is particularly important when your business is just getting off the ground and hasn’t built up much of a credit history.

Credit cards that are available to those with fair/average credit typically aren’t big on bonus offers and rewards — and the Spark Classic is no exception. There’s no bonus offer or introductory 0% APR period, though you will earn an unlimited 1% cash back on all purchases. Not bad for a fair credit business card. The card carries a relatively high APR, but this, too, is to be expected with this sort of business credit card. Cards with lower APRs are typically harder to qualify for.

Best Secured Business Cards For Fair Credit

Now, let’s delve into the secured business credit card scene. (To learn more about secured business credit cards, have a look at our article on the subject, What Is A Secured Business Credit Card?)

Wells Fargo Business Secured Credit Card

Wells Fargo Business Secured Credit Card


business credit cards fair credit
Compare

Annual Fee:


$25

 

Purchase APR:


Prime + 11.90% on purchases

There’s a lot to like about the Wells Fargo Business Secured credit card. It’s a secured business card that’s available to business owners with fair or even bad credit. You can establish a credit line of between $500 to $25,000 depending on the amount of your secured deposit. Enroll in the rewards program and you’ll earn 1.5% cash back on every purchase, which is surprising for a “fair credit” credit card, most of which either have no rewards program or give 1% cash back. Additionally, the APR is quite reasonable and is lower than that of most of the business credit cards competing for this segment of the market.

As for the downsides: There’s a $25 annual fee attached to each card you get, so while you can get up to 10 cards for your employees, this could cost you up to $250 a year. Furthermore, to apply for the card, you must first establish a savings and/or checking account with Wells Fargo, and given Wells Fargo’s tainted reputation (deservedly so) owing to recent ethical lapses, you may not be eager to do this. This also means you’ll have to apply in person at a Wells Fargo branch to set up an account (you can’t do this online), and some areas have no Wells Fargo banking locations. For instance, most of New England is, for better or worse, devoid of Wells Fargo branches.

Additionally, while the rewards program currently carries no annual fee, this wasn’t always the case, and that fee could always return at some point in the future.

BBVA Compass Secured Visa® Business Credit Card

BBVA Compass Secured Visa® Business Credit Card


business credit cards fair credit
Compare

Annual Fee:


$0 the first year, $40 each subsequent year

 

Purchase APR:


18.24%, Variable

The BBVA Compass Secured Visa® Business credit card is another secured credit card option for business owners. Unfortunately, it is currently only available in California, Texas, Florida, Alabama, Arizona, Colorado, and New Mexico. You’ll also have to apply for the card in person at a BBVA Compass branch.

With the BBVA Compass Secured card, you’ll make a secured deposit of at least $500 (no maximum amount is listed). You earn 1% cash back with every purchase, and the APR, while higher than that of the Wells Fargo Business Secured, is still lower than that of many cards in this market space. You can also get additional cards for your employees at no additional cost. This can be quite important when your business is just starting out!

Unfortunately, the card carries a $40 annual fee, though this fee is waived for the first year. There’s also a 3% foreign transaction fee, though many up-market credit cards feature this fee as well.

The BBVA Compass Secured Visa is a very solid secured business credit card, hampered only by its limited availability.

Business Edition Secured Visa Credit Card

Business Edition Secured Visa Credit Card


business credit cards fair credit
Compare

Annual Fee:


$39

 

Purchase APR:


19.74%, Variable

The Business Edition Secured Visa® credit card is offered through multiple banks (First National Bank and Cathay Bank are two examples), so the features offered may vary slightly; however, the card carries most of the following features in common regardless of the issuer.

The Business Edition Secured Visa card requires you to make a security deposit of at least $2,000, so if you wanted to make a smaller security deposit, you’ll have to apply for one of the other cards listed here. If, on the other hand, you’re prepared to make a large security deposit, you’re in luck, as you can deposit as much as $100,000. Your credit line will be 110% of your security deposit, meaning you’ll be able to borrow slightly more than the amount you deposited, which is nice.

The card typically carries a variable APR of 19.74%, though this may vary a bit depending on the issuing bank. Sadly, there’s a $39 annual fee that is not waived for the first year.

While there is no cash back to earn through purchases on this card, you will be able to enroll in the Visa Savings Edge program, which can earn you rebates at a number of different retailers, gas stations, and restaurants.

Best Secured Personal Cards For Fair Credit

For most business owners, a secured business card is preferable to a secured personal card. A business card issuer reports to the business credit bureaus, thus helping you build business credit (the free employee cards you can get with some issuers is a helpful bonus as well). However, a secured personal card can help you fund your business as well, often while helping to build your personal credit, which can be important in helping you secure other forms of business funding in the future.

Let’s discuss a few of the best secured personal credit card options out there.

Green Dot primor® Visa® Gold Secured Credit Card

Green Dot primor Visa Gold Secured Credit Card



Compare

Annual Fee:


$49

 

Purchase APR:


9.99%, Fixed

The Green Dot primor® Visa® Gold Secured credit card may have a convoluted name, but it’s a very simple credit card. The card is fairly unique in that there are no credit score requirements to apply for this card. They won’t even perform a credit check.

There are no rewards or cash back to earn, and the only benefits attached to the card are auto rental insurance and zero fraud liability. So what does the Green Dot primor® Visa® Gold Secured provide?

The card’s minimum security deposit is just $200 while the maximum is $5,000, and it features an enticingly low fixed APR of just 9.99% — one of the lowest APRs you’ll find in any credit card. The card also carries a grace period of 25 days until interest on purchases will start to accrue, so paying off your card in full before the payment due date each month will result in you avoiding interest charges.

The card’s primary downside? The $49 annual fee, which is decidedly on the high side for this type of credit card.

OpenSky® Secured Visa® Credit Card

OpenSky® Secured Visa® Credit Card



Compare

Annual Fee:


$35

 

Purchase APR:


19.14%, Variable

The OpenSky® Secured Visa® Credit Card is another personal credit card you can get without even having your credit score checked. In fact, you don’t even need a bank account to get this card!

The OpenSky Secured Visa requires a security deposit of between $200 and $3,000. The APR is a variable 19.14% — a bit on the high side, though you can do worse with a card of this sort. There’s also a $35 annual fee, and there are no rewards to earn; no cash back to rack up with your purchases. On the plus side, your card activity is reported to all three credit bureaus, helping you build up your credit history.

FAQs About Business Credit Cards For Fair Credit

Can I Get A Business Credit Card With No Credit Check?

Not exactly. While the business cards I’ve listed here are very unlikely to reject anyone for having a low personal credit score (with the exception of the Spark Classic, which requires a personal credit score of at least 550), they will generally perform a credit check. However, some secured personal cards (like the two I mentioned in this article) will approve your application without performing a credit check.

How Can I Improve My Credit Score?

The most important thing you can do is to pay your bills on time — not just your credit card bills, but any other bills you have, as late payments can negatively impact your credit score for seven years.

Another factor to consider is your credit utilization ratio. Your credit utilization ratio is the sum of your total credit card balances divided by your total available credit. Basically, it’s a measure of how much of your total available credit you’re actually using. If lenders see that you’re not maxing out your credit cards, they’ll view you as less of a lending risk. A credit utilization ratio of 30% or less is ideal.

Beyond that, try not to apply for credit willy-nilly. When you apply for a credit card, assuming the issuer performs a credit check, a hard inquiry will be created on your credit report, which will impact your score for two years. With too many hard inquiries, your credit score will suffer.

For more on how to improve your credit score, check out 5 Ways To Improve Your Personal Credit Score.

The post Top Business Credit Cards For Fair Credit appeared first on Merchant Maverick.

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Best Business Credit Card Signup Bonus Offers

Finding a credit card with a great welcome offer is an easy way to earn some extra cash or bonus travel miles. If you’re a small business owner, finding places to save an extra buck is always important.

Of course, there are numerous credit cards and many different types of bonus offers. Figuring out your best option can be tricky. Our list below aims to help you sift through all your options—helping you find what you’re looking for faster!

Best Signup Bonus For Rewards Points: Chase Ink Business Preferred

Chase Ink Business Preferred



Apply Now 

Annual Fee:


$95

 

Purchase APR:


17.74% – 22.74%, Variable

This card from Chase comes with a hefty points reward for new accounts. Simply spend $5,000 within the first three months of opening your account and you’ll receive 80,000 bonus points. When you redeem those points through Chase Ultimate Rewards, you can receive the equivalent of $1,000 towards travel. If travel rewards aren’t for you, Chase Ultimate Rewards also lets you redeem points for gift cards, cash back, and Amazon shopping.

Those points can be transferred on a 1:1 basis to an array of airline and hotel reward programs as well. For general rewards with Chase’s Ink Business Preferred, you earn three points per $1 spent on travel, shipping purchases, Internet, cable and phone services, and on online advertising purchases. You then get one point per dollar on everything else.

Chase also runs a referral program that nets you 20,000 bonus points (up to 100,000 per year) when a business owner you invite signs up for a Chase Ink Business Preferred card.

Check out the full details with our in-depth review.

Best Signup Bonus For Cash Back: Capital One Spark Cash For Business

Capital One Spark Cash For Business


capital one spark cash select
Compare

Annual Fee:


$95 ($0 the first year)

 

Purchase APR:


18.74%, Variable

If you simply want cash back as a bonus offer, it’s hard to beat Capital One’s Spark Cash For Business card. This card rewards you with $500 if you spend at least $4,500 within the first three months of opening your account.

Because Capital One bundles in unlimited 2% cash back on all purchases, you’ll also be receiving some of the best cash back rewards a credit card can offer. The $95 annual fee is also waived for your first year.

Get the complete run-down on the Spark Cash For Business by reading Merchant Maverick’s review.

There are a few other business cards with $500 cash back welcome offers. We’ve listed them below in alphabetical order:

  • Chase Ink Business Cash: $500 cash back if you spend $3,000 in your first three months.
  • Chase Ink Business Unlimited: $500 cash back if you spend $3,000 in your first three months.
  • Wells Fargo Business Platinum Card: $500 cash back if you spend $5,000 in your first three months.

Best Signup Bonus With No Annual Fee: Chase Ink Business Unlimited

Chase Ink Business Unlimited


chase ink business unlimited
Apply Now 

Annual Fee:


$0

 

Purchase APR:


14.99% – 20.99%, Variable

Want a nice signup bonus but don’t want to deal with a pesky annual fee? The Chase Ink Business Unlimited card might just be for you. Spend over $3,000 in your first three months and you’ll get $500 cash back without needing to worry about an annual fee.

For base rewards, Chase offers unlimited 1.5% cash back on all purchases. You also won’t have to worry about paying interest for your first year—this card carries a 0% intro APR for the first 12 months.

If you need more details on the Ink Business Unlimited, check out Merchant Maverick’s full review.

It’s also worth a mention that if you spend a lot on specific categories, you may prefer Chase’s Ink Business Cash card. It features the same welcome offer of $500 after spending $3,000 within the first three months. However, purchases within the office supply store, Internet, cable, and phone categories net you up to 5% cash back. You also get up to 2% cash back on money spent at gas stations and restaurants. For a holistic report, read our Ink Business Cash card review.

Best Signup Bonuses For Travel

Best Signup Bonus For General Travel: Capital One Spark Miles For Business

Capital One Spark Miles For Business


Compare

Annual Fee:


$95 ($0 the first year)

 

Purchase APR:


18.74%, Variable

Those that want a solid welcome offer aimed at travel without being locked into a particular airline or hotel brand should consider Capital One’s travel business card. Spark Miles For Business dishes out 50,000 miles if you spend $4,500 within your first three months. You’ll be able to use those miles for tickets on any airline, booking any hotel, purchasing travel packages, and more.

It does come with a $95 annual fee, although this is waived your first year. For general rewards, you get an unlimited two miles per dollar spent. When it comes to redeeming your rewards, there are no blackout dates and no minimum points requirement.

Visit Merchant Maverick’s complete review to get in in-depth look at Capital One’s Spark Miles card.

Chase’s Ink Business Preferred (mentioned above) is also a nifty card for travelers because points are worth 25% more when redeemed for travel through Chase Ultimate Rewards. You can also transfer your points on a 1:1 basis to a selection of airline and hotel rewards programs. Our full review has all the details.

Best Signup Bonus For Airline Points: Delta Reserve for Business Credit Card from American Express

Delta Reserve Credit Card for Business from American Express



Compare

Annual Fee:


$450

 

Purchase APR:


17.74% – 26.74%, Variable

For those looking at welcome offers of airline-specific cards, your best option will usually come down to which airline you use the most. However, when it comes to picking one airline-specific travel credit card, our choice goes to American Express’s Delta Reserve for Business Credit Card. This card will reward you with 70,000 miles and 10,000 Medallion Qualification Miles once you spend $5,000 within your first three months. Note that this offer expires 11/07/2018.

Its base rewards include two miles per dollar spent on Delta purchases. Everything else you buy gets one mile per $1 spent. You also get a free checked bag, priority boarding, and Delta Sky Club access. There’s an additional bonus offer handing out 15,000 miles and 15,000 Medallion Qualification Miles if you spend $30,000 or more during a calendar year.

Of course, there’s plenty of other airline-specific offerings with excellent welcome offers. Here’s a non-exhaustive list, ordered alphabetically:

  • AAdvantage Aviator Business Mastercard from Barclays: 60,000 miles once you make your first purchase within 90 days.
  • Alaska Business Card from Bank of America: Buy one ticket, get one for only taxes and fees plus 30,000 miles if you spend $1,000 or more within 90 days of opening your account.
  • CitiBusiness / AAdvantage Platinum Select World Mastercard: 70,000 AAdvantage miles if you spend $4,000 in your first four months.
  • Gold Delta SkyMiles Business Credit Card from American Express: 30,000 miles if you spend $1,000 in your first three months and a $50 statement credit once you make a Delta purchase in your first three months.
  • JetBlue Business Card from Barclays: 50,000 points if you spend $1,000 in the first 90 days.
  • Platinum Delta SkyMiles Business Credit Card from American Express: 50,000 miles and 10,000 Medallion Qualification Miles if you spend $3,000 in your first three months and a $100 statement credit once you make a Delta purchase in your first three months.
  • Southwest Rapid Rewards Premier Business Credit Card from Chase: 60,000 points if you spend $3,000 in your first three months.

Best Signup Bonus For Hotel Rewards: Hilton Honors American Express Business Card

Hilton Honors American Express Business Card



Compare

Annual Fee:


$95

 

Purchase APR:


17.74% – 26.74%, Variable

Like with airline-specific cards, your best option for welcome offers from hotel rewards cards really comes down to where you stay the most. The best all-around welcome offer, however, hails from the Hilton Honors American Express Business Card. This rewards card packs in a bonus of 125,000 points if you spend $3,000 within the first three months of opening your account.

For regular rewards, you’ll get 12 points per dollar when you make purchases at hotels and resorts within the Hilton brand. You’ll also snag six points per $1 spent when making U.S.-based purchases at gas stations, wireless telephone service providers, shipping merchants, and restaurants. You can also pick up six points per dollar when booking travel through American Express’s travel website or on car rentals booked directly from specific car rental companies. All other purchases will nab you three points per $1 spent.

Don’t frequent Hilton branded hotels? Here’s a couple more bonus offers from hotel rewards cards to glance over:

  • Starwood Preferred Guest Business Credit Card from American Express: 100,000 points if you spend $5,000 in your first three months.
  • Marriott Rewards Premier Plus Business credit card from Chase: 75,000 points if you spend $3,000 in your first three months.

Comparison of the Best Business Credit Card Signup Bonus Offers

Card Name Best For Bonus Offer Requirements Next Steps

Chase Ink Business Preferred

Reward points

80,000 points

Spend at least $5,000 within the first 3 months of opening an account

Apply Now

Capital One Spark Cash For Business

Cash back

$500 cash back

Spend at least $4,500 within the first 3 months of opening an account

Compare

Chase Ink Business Unlimited

No annual fee

$500 cash back

Spend at least $3,000 within the first 3 months of opening an account

Apply Now

Capital One Spark Miles For Business

General travel rewards

50,000 miles

Spend at least $4,500 within the first 3 months of opening an account

Compare

Barclays AAdvantage Aviator Business Mastercard

Airline points

60,000 points

Make at least one purchase within the first 90 days of opening an account

Compare

Hilton Honors American Express Business Card

Hotel rewards

125,000 points

Spend at least $3,000 within the first 3 months of opening an account

Compare

The post Best Business Credit Card Signup Bonus Offers appeared first on Merchant Maverick.

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Self-Employed? You May Qualify For A Business Credit Card

Being self-employed brings great freedom and flexibility when it comes to scheduling, determining work flow, and setting pay rates. But there’s one more benefit that you might not immediately think about: getting a business credit card. Even though you may not run your work as a “business,” you still could be eligible for a business credit card. There are plenty of benefits to having a business credit card, so perhaps it makes perfect sense for you to apply for one.

Is a business credit card right for you? Read on through to find out!

Do I Need An “Established Business” To Get A Business Credit Card?

blogging

Not necessarily. You might qualify as a business owner as long as you sell goods or services outside of a traditional employment situation, enabling you to get a business credit card.

You may qualify if you sell items via online storefronts such as Amazon or eBay or offer lessons for activities like music or art. You may even qualify if you provide freelance services such as writing, photographing, or writing code. Do a maintenance side gig for friends and neighbors? That could qualify you, too.

Essentially, if you make profit doing something outside your day job or personal life, you could qualify as a business owner.

What Are The Perks Of A Business Credit Card For The Self-Employed?

There are numerous benefits to maintaining a business credit card while self-employed.

The primary reason you might want to apply for a business card is so that you can separate your professional expenses from your personal ones. This means you can keep easier track of business-related spending—something that’s important for both budgeting and filing taxes.

Reward programs are also structured for business expenses. For instance, some business-specific cards offer rewards geared towards travel, which might be beneficial if you spend time flying for work. Some cards also bundle in perks like access to airport lounges or free wifi.

Additional business credit card benefits can include excellent sign-up bonuses, higher potential credit limits, and free employee cards.

Are There Any Drawbacks To Watch Out For?

As with any credit card, it’s important to always pay off your balance on time. Doing so limits interest while potentially improving your credit score.

You’ll also want to avoid applying for too many cards in a short space of time. That’s because applying for a credit card results in a hard pull on your credit score. Too many hard pulls in quick succession could drop your credit score.

How Do I Apply For A Business Card?

You’ll want to first do proper research to find the best card for you. Not all cards are equally good for everyone. Some cards look snazzy up front, but they may not mesh with your professional pursuits. With that in mind, you’ll want to look for a card that has rewards that align with your business expenses while also allowing you to make the most of the card’s other benefits.

Because you’re self-employed, you might not have a history of business income or a business tax identification number. In most cases, card issuers will do a pull on your personal credit and your personal income to guarantee your credit history. Additionally, your social security number can often be used in place of a tax ID number. During the application process, you can also usually list yourself as a sole proprietor when filling out what kind of business you own.

And most importantly, never lie on a credit card application. Lying about your business or making up business income will only bring about a world of hurt in the future—even if you somehow manage to get approved.

How Can I Improve My Chances Of Being Approved For A Business Credit Card?

As with any credit card, it always helps to have a good credit score. Ultimately, though, issuers have their own criteria when deciding who gets approved and who doesn’t. As such, you’ll want to double-check that you meet the requirements of a card before applying.

Top Business Credit Card Pick For The Self-Employed

Chase Ink Business Preferred



Apply Now 

Annual Fee:


$95

 

Purchase APR:


17.74% – 22.74%, Variable

The best option for many small businesses, Chase Ink Preferred is a great choice for those who are self-employed, too. This card from Chase is simply a solid, well-rounded offering.

It packs in three points per $1 on the first $150,000 spent in combined purchases on travel, shipping, internet/cable/phone services, and advertising on social media and search engines each account anniversary year. For all other purchases, you’ll get one point per dollar spent.

On top of that, you’ll get a bonus 80,000 points after you spend at least $5,000 in the first three months of opening your account. Because points usually equal $0.01, that’s the equivalent of $800 cash back. Chase also bundles in cell phone protection and employee cards at no extra cost.

You can also reap plenty of travel benefits, too. To start, points are worth 25% extra when redeemed through Chase Ultimate Rewards. You can further transfer points on a 1:1 basis with other travel programs, including United MileagePlus and Marriott Rewards. Finally, there is no fee on foreign transactions, a plus if you travel overseas frequently.

Final Thoughts

Want more business card options? Check out our comprehensive breakdown of the best business cards of 2018. Decided to stick with a personal credit card? We’ve got you covered with a list of the best personal credit cards for business expenses.

The post Self-Employed? You May Qualify For A Business Credit Card appeared first on Merchant Maverick.

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Emergency Business Loans: 7 Ways To Get Business Funding Fast

No matter how good you are at planning, it’s impossible to prepare for every possible emergency that may affect your business. Acts of God like hurricanes, floods, and fires aside, invoice payments might be late. You may have experienced a fluke sales slump. Or maybe you just need to restock before a big event next week to maximize your sales.

You’ve already shaken out your pants for loose change, so now what do you do? Where do you look for an emergency business loan?

Read on and we’ll try to help you out. Here are seven ways to get business funding fast.

1. Get A Short-Term Loan

fast business loans

If it has been a while since you last looked for financing, you’re probably imagining long, drawn-out loan applications with high credit restrictions.

Those traditionally-structured loans still exist–and tend to have excellent rates–but they’re not much help when you need money fast. An easier way for most businesses to get a lump sum of cash quickly is to get a short-term loan.

Short-term loans usually last less than a year, feature simplified (and usually online) applications, and can get cash into your account within 24 to 72 hours. Most of them don’t even require collateral in the traditional sense.

So what’s the catch? Well, you’ll probably be going through an alternative lender. That means higher rates and fewer regulatory protections than you’d find with a bank.

Because the repayment schedule is accelerated, these loans charge a flat fee instead of instead of interest. This fee is a percentage of the amount you borrowed ($10,000 x 20% = $2,000, so you’ll be on the hook for $12,000). You’ll also be paying it back much more quickly. Repayment intervals are weekly or even daily, with fixed payments automatically withdrawn from your business bank account.

Think a short-term loan is right for you? Check out the following short-term lenders:

Lender Borrowing Amount Min Credit Score Time To Funding Next Steps

$2K – $5M 550 1-2 Days Apply Now

$5K – $500K 550 1-3 Days Apply Now

$5K – $500K 500 2-5 Days Apply Now

$5K – $250K 500 2-5 Days Apply Now

2. Get A Merchant Cash Advance

how to get a merchant cash advance

I know we’re technically talking about “loans,” but if you need money quickly, you’re probably not that concerned with semantics. For the pedantic, a merchant cash advance (MCA) is the purchase of your future credit/debit card sales. So you’re technically selling something, not taking on debt. Confusing, right?

An MCA fulfills a similar niche to a short-term loan and shares a few characteristics with it. MCAs also feature simplified applications and qualifications; they’re even less governed by financial regulations than short-term loans. You’ll also usually have your money in a day or two. MCAs and short-term loans even share a flat fee approach, where the amount you owe is the amount you “borrowed” plus a percentage of that amount ($10,000 x 20% = $2,000, for a total of $12,000).

But wait, didn’t I say the MCA company was actually buying a percentage of your future receivables? How does that work? Rather than making payments, the MCA company will collect a percentage of your daily credit- and debt-based sales until they’ve collected the lump sum they gave you, plus their flat fee. Because your sales may vary from day to day, MCAs don’t have exact term lengths. If your sales are good, you’ll pay the debt off more quickly; if they’re poor, it will take longer to pay off.

Be aware, however, that MCAs are one of the most expensive ways to borrow money.

Want to explore your options? Check out the following providers of merchant cash advances:

Lender Borrowing Amount Min Credit Score Time To Funding Next Steps

$2K – $5M 550 1-2 Days Apply Now

$5K – $500K 550 1-3 Days Apply Now

$5K – $500K 500 2-5 Days Apply Now

$5K – $250K 500 2-5 Days Apply Now

3. Get An Express Bank Loan

What’s an express loan? The definition varies by lender, but in general, this is an option offered by many traditional banks. Thanks, in part, to pressure from alternative lenders, banks have made efforts to speed up the application processes of some of their products. If you need a small amount of money relatively quickly, it may be the way to go.

These loans typically aren’t short-term loans, but medium-term installment loans. That means monthly payments and interest accruing over time.

Compared to short-term loans, express loans will often have better rates but aren’t as easy to qualify for. Depending on the bank, the speed with which you can get funding may be competitive with those of alternative lenders, while others might be a little bit slower. Note that SBA Express loans, while quicker than other SBA loans, probably aren’t going to be fast enough to cover an emergency expense. On the other hand, if your emergency is the result of a regional disaster, you may want to check out SBA disaster loans.

4. Get An Installment Loan From An Alternative Lender

installment loans

Wait, aren’t installment loans–express loans notwithstanding–too slow to be much help in an emergency?

Alternative lenders don’t only deal in short-term loans and merchant cash advances. Some offer products that more closely resemble traditional installment loans. These loans feature longer-terms and regular monthly (sometimes weekly) payments.

Installment loans, even those from alternative lenders, don’t necessarily promise the 24-48 hour turnarounds that are common with short-term loans and merchant cash advances. Some do, however. And even the ones that don’t may still be fast enough to help resolve your emergency.

These alternative lenders offer loan products that might work for your situation:

Lender Borrowing Amount Term Interest/Factor Rate Req. Time in Business Min. Credit Score Next Steps

$5K – $500K 3 – 36 months x1.003 – x1.04/mo 12 months 500 Apply Now

$5K – $500K 13 – 52 weeks x1.029 – x1.1872 9 months 550 Apply Now

$2K – $5M Varies As low as 2% 6 months 550 Apply Now

$20K – $500K 1 – 4 years 7.99% – 29.99% APR 2 years 660 Apply Now

5. Use A Business Credit Card

Best merchant online credit card processing companies image

Another way to handle emergency expenses is to have lines of credit in place ahead of time. The easiest to use are probably business credit cards.

Business credit cards can be a convenient way to pay for emergencies, provided the emergency costs are on the smaller side and can be paid with plastic. A balance that sits on your card month after month will quickly become more expensive than a loan. On the other hand, if you’re able to pay your business credit card off in full within your grace period (usually 20-25 days after you make the purchase), you won’t owe any interest at all. Better yet, you can take advantage of the rewards programs most of these cards offered.

Avoid taking out a cash advance with your credit card, though, as the fees and interest rates on those transactions make them a very expensive way to bail your business out.

Looking for a business credit card? Chase Bank offers some of the best options for small business:

Card Card Name Annual Fee Introductory Rate Rewards Next Steps

Chase Ink Business Preferred℠

$95 None
  • 3 points per $1 on travel, shipping, internet/cable/phone, and internet advertising (max $150,000 per year)
  • 1 point per $1 on all other purchases
Apply Now

Chase Ink Business Cash℠

$0 0% APR for the first 12 months
  • 5% cash back on internet/phone/cable and purchases at office supply stores (max $25,000 per year)
  • 2% cash back at restaurants and gas stations (max $25,000 per year)
  • 1% cash back on all other purchases
Apply Now

Chase Ink Business Unlimited℠

$0 0% APR for the first 12 months
  • 1.5% cash back on all purchases
Apply Now

6. Set Up A Line Of Credit

Business credit cards aren’t the only way to set up an “insurance policy” against unplanned expenses. In fact, they may not even be the best way, especially if you encounter expenses you can’t easily pay for with a card.

Banks and some alternative lenders offer business lines of credit. A revolving line of credit is a lot like a credit card (technically a credit card is a revolving line of credit, but not all revolving lines of credit are credit cards. Make sense?). Your lender will approve your business for a certain amount of credit, for a certain period of time, typically a year. During that time, you can draw upon your line of credit in any increments you want so long as the total amount you’ve drawn doesn’t exceed your credit limit. You only make payments and owe interest on the amount of credit you’re using. As you pay off your balance, that credit becomes available to use again. A non-revolving line of credit works the same way, except that once you use your credit, it does not become available again after you pay it off.

Some lines of credit are easier to use than others. Depending on your lender, you may have to pay a draw fee each time you withdraw cash. Some lenders charge annual, or even monthly, fees to maintain your line of credit. It’s not uncommon for banks to link a line of credit to a Visa or Mastercard, allowing you to use it almost exactly like a credit card. Some lenders may let you write checks against your line, while others will necessitate a cash transfer from your line to, say, a checking account.

The following lenders offer lines of credit to businesses at reasonable rates:

Lender Borrowing Amount Draw Term Draw Fee APR Next Steps

$6K – $100K 6 months None Starts at 13.99% Apply Now

$2K – $5M Varies Varies Varies Apply Now

$5K – $5M 6 months 1.50% per draw 21% – 65% Apply Now

$1K – $100K 12 weeks None 12% – 54% Apply Now

7. Use Invoice Factoring

Do what now? A quick and unorthodox way to get emergency financing without putting yourself at too much risk is invoice factoring. Factoring companies will purchase your unpaid invoices for around 80 percent of their face value, minus a small fee. It’s essentially getting an advance on your invoices by signing them over to a third party.

What about the remaining 20 percent? The factoring company will pay you that balance when the invoice is paid by your customer.

The catch is that you’ll need to have unpaid invoices in hand for invoice factoring to be of any use to you.

If you think invoice factoring might be the right choice for your business emergency, we recommend starting with a reputable company like BlueVine.

Get Started With BlueVine

Final Thoughts

It’s easier than ever to get emergency funding for your business. The trick is making sure you get it on the schedule you need, at a rate you can afford.

Not sure where to start looking?

We can help you out.

Loan Type What Is It? Typical Time To Funding

Short-Term Business Loans

Loans disbursed in one lump sum and repaid in periodic, fixed installments. Fees for borrowing are determined by a factor rate.

2 – 5 days

Online Lines of Credit

Credit lines from which the business can draw funds at any time, without going through an application process.

2 – 7 days for the initial application; 1 – 2 days for funds when the credit line is secured

Invoice Financing

Financing in which the business’s unpaid invoices are leveraged to access business funds.

2 – 5 days

Bridge Loans

Fast business loans used to fulfill funding needs until slower financing comes in.

2 – 7 days

Traditional Installment Loans

Loans disbursed in one lump sum and repaid in periodic, fixed installments. Borrowing fees are determined by an interest rate.

1 – 3 weeks

Business Credit Cards

Credit lines for everyday business expenses.

About 7 days

SBA Disaster Loans

Loans offered by the SBA to businesses that have been affected by a disaster.

7 – 21 days

The post Emergency Business Loans: 7 Ways To Get Business Funding Fast appeared first on Merchant Maverick.

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Business Credit Cards With The Best Reward Programs

In many cases, a good rewards program sets a credit card apart from its peers. Businesses can then take advantage of a rewards program to save money and earn bonuses. Depending on how much a business spends, it could net thousands of dollars in rewards every year.

However, not every rewards program fits every business. For instance, some rewards programs grant more points at hotels—a boon for businesses that require frequent travel. Meanwhile, others give extra rewards for purchasing office supplies—a great fit for businesses that are always improving their workspaces. There is simply so much variety.

After noticing this complexity, we at Merchant Maverick decided to do a thorough breakdown of the business credit cards with the best rewards programs. Read on through below!

Best For Cash Back Rewards: American Express SimplyCash Plus

American Express SimplyCash Plus



Compare

Annual Fee:


$0

 

Purchase APR:


13.99% – 20.99%, Variable

Put plainly, cash back business cards are an easy and convenient way to save money. With a cash back card, you earn back a certain percentage of what you spent each time you make a purchase. Cash back cards have the added bonus of usually being less complicated than points reward structures.

Why It’s Our Pick:

If you make frequent purchases at office supply stores and on wireless telephones, the American Express SimplyCash Plus is a no-brainer. That’s because this card features 5% cash back via statement credit for purchases within both categories (up to $50,000).

On top of that, American Express lets you pick one category on which to get 3% cash back (up to $50,000), allowing you to tailor the card to fit your business. Available categories in the 3% range include airfare, hotel rooms, car rentals, gas stations, restaurants, advertising, shipping, computer hardware, software, and cloud computing.

Besides those tiers, SimplyCash Plus offers 1% on all other purchases. In addition, there’s no annual fee and 0% APR for the first nine months. To get full details, visit Merchant Maverick’s in-depth review.

Honorable Mention: Chase Ink Business Cash

Chase Ink Business Cash



Apply Now

Annual Fee:


$0

 

Purchase APR:


14.99% – 20.99%, Variable

Like SimplyCash Plus, Chase Ink Business Cash offers 5% on purchases at office supply stores. Instead of just wireless telephones, this card also features 5% on internet, cable, and phone purchases. However, the rewards cap out at $25,000 instead of $50,000. Additionally, Chase has set the second reward tier at 2% cash back (up to $25,000) and it’s only for gas stations and restaurants. All other purchases receive 1% cash back.

Still, this is a solid option if you’re looking for something different than what American Express is offering. Plus, it features no annual fee and a 0% APR for 12 months. Check out our complete review for all the details.

For more cash back cards, check out our best picks.

Best Airlines & Travel Rewards Program: Chase Ink Business Preferred

Chase Ink Business Preferred



Apply Now 

Annual Fee:


$95

 

Purchase APR:


17.74% – 22.74%, Variable

If your business requires lots of travel you may want to get a business credit card that includes benefits for airlines and travel. Getting a card with specific travel benefits could reap greater rewards than you’d get from just a standard cash back card.

Chase Ink Business Preferred gets our top pick for travel business credit card because you earn three points per $1 spent on travel (as well as on shipping, internet/cable/phone services, and online advertising). On top of that, points are worth 25% more if you redeem them for travel through Chase Ultimate Rewards. Additionally, you can transfer your points on a 1:1 basis to other travel programs, such as United MileagePlus and Marriott Rewards. Get the full picture via Merchant Maverick’s review.

To compare more travel cards, we’ve got you covered with our list of the best business travel cards.

Best Hotel Rewards Program: Starwood Preferred Guest American Express Luxury Card

Starwood Preferred Guest American Express Luxury Card


starwood luxury amex
Compare

Annual Fee:


$450

 

Purchase APR:


17.49% – 26.49%, Variable

Businesses that spend a decent chunk of change on hotels may want to look for something even more specific than a generic travel rewards card. That’s because a card geared toward hotel rewards can offer you better rewards when used properly.

The Starwood Preferred Guest American Express Luxury Card is our top pick because it doles out six points per $1 spent at participating SPG and Marriott Rewards hotels. Beyond that, you can earn three points per $1 spent at restaurants and airlines. Points can then be redeemed for free nights at SPG and Marriott Rewards hotels, as well as for flights and car rentals. Learn more by reading our review.

Best Rewards Points Program: American Express OPEN Business Gold Rewards

American Express Business Gold Rewards


amex business gold rewards review
Compare

Annual Fee:


$0 the first year, then $175

 

Purchase APR:


N/A (This is a charge card)

Going with a points-based system (instead of one that gives cash back) can be an excellent option should the points be redeemable for a service you frequently use. For instance, if you have a card that allows you to redeem your points on a specific hotel, you could be able to save money on bookings or get free room upgrades.

The American OPEN Business Gold Rewards charge card features an enticing and well-rounded points program. You get three points per $1 spent on the category of your choosing (out of airfare, advertising, gas stations, shipping, and computer hardware, software, and cloud computing), two points per $1 for each the four categories you didn’t choose, and one point per $1 on everything else. Points can be redeemed at an array of airlines, hotels, and merchants. Do note, however, that because this is a charge card, you’ll have to pay off your balance every month. Read Merchant Maverick’s review for more info.

Best Overall Rewards Program With No Annual Fee: American Express Blue Business Plus

American Express Blue Business Plus



Compare

Annual Fee:


$0

 

Purchase APR:


12.99% – 20.99%, Variable

If you’re looking for a well-rounded rewards program with no annual fee, it’s hard to go wrong with the American Express Blue Business Plus. This card packs in two points per $1 spent (up to $50,000) on all purchases, making it very attractive to businesses that buy from a range of categories. After you pass the $50,000 threshold, you earn one point per $1. Beyond rewards, it features 0% APR for the first 15 months. Get squared away with all the facts in our review.

Frequently Asked Questions:

Is my personal credit score used to determine approval?

Yes, almost all issuers check with consumer credit bureaus when you apply for a business card.

How can I build my business credit fast?

Unfortunately, it’s difficult to build credit fast. As long as you pay off your debts and keep your accounts from running delinquent, your credit score should rise. Find out more by reading the Merchant Maverick guide to building business credit.

Do I lose rewards on returned purchases?

In most cases, you will lose your rewards on returned purchases. However, you may be able to keep rewards points if you accept in-store credit for the returned item.

Will I lose rewards points if I pay my credit card balance early?

In most situations, you earn your points based on when you bought an item or service. It doesn’t matter when you pay your balance; you should still earn your reward points when paying the balance early.

How do I redeem my credit card rewards?

It depends on the rewards program. Some allow you to request cash back via statement credit or check. Others offer points you can redeem for gift cards, physical items, flights, car rentals, or hotel rooms.

Now What?

If you want to compare more credit cards for small businesses, visit our comparison page. Those with good credit may also want to check out the best business cards for good credit. Making a big purchase? Read up on our list of the best 0% intro APR cards.

The post Business Credit Cards With The Best Reward Programs appeared first on Merchant Maverick.

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