How To Choose An Equipment Leasing Company

Selecting equipment
One of the most common expenses a business can encounter is the need to purchase or upgrade equipment, but choosing an equipment leasing company can be a challenge. Choosing one that will give you a good deal that fits the specific needs of your company can be downright daunting.

Don’t know a TRAC lease from a leaseback? A tax lease from a synthetic lease? Not sure where to start looking? The equipment leasing industry’s websites are notoriously full of opaque, specialized terms … and that’s when specific terms are offered at all.

We’ll try to demystify the process below, and hopefully put you on the right track.

Financing Need Best Product Type Recommended Lender
Financing Platform Any Currency Capital
Equipment Purchasing Loan Lendio
Renting Operating Lease Crest Capital
Big Ticket Items Any TCF Equipment Financing
Purchasing w/Lease Capital Lease CIT Direct Capital

Find A Lessor Who Will Work With You

The easiest way to rule out a potential lessor (the company that finances the lease) is to see if they serve your industry. Most lessors, particularly those that work with resales, specialize in specific industries. Even the least transparent lessors tend to be upfront about the industries they’re able to finance, so it’s not a bad place to start. If possible, you’ll also want to see if they finance the specific type of item you’re looking for.

Next, you’ll want to take stock of your own profile as an applicant. How good is your credit? How long have you been in business? What’s your revenue? How much debt have you taken on?

Lessors don’t always advertise their minimum qualifications. Since your time is limited and valuable, if you have reasonable doubts about your ability to qualify with a particular lender, I would recommend prioritizing more transparent lenders. You don’t want to waste time filling out a long application only to be rejected. To save yourself some headache, take advantage of online screening/pre-qualifying tools the lessor might offer.

Choose The Right Leasing Arrangement

This is where it gets a little complicated.

Because you’re dealing with a tangible asset, when making a deal with a lessor, you’ll need to be prepared to work through an enormous number of lease variations covering different possible ownership arrangements.

The simplest leases function as loan replacements. That is to say, the lessor finances your equipment, which you are considered to have ownership of either immediately or by the end of the lease. You’ll make regular payments, typically monthly, for the length of your lease, at the end of which you’ll pay a small residual fee to close it out. These are called capital leases.

Why would you want a capital lease instead of a straightforward loan? While the interest rate is usually higher than it would be with a comparable loan, a capital lease covers the full cost of the equipment you’re buying and, very often, associated transportation and installation costs as well. These leases also tend to be easier to get than traditional loans.

But what if you don’t want to own the equipment long-term?

In that case, you may want to look for an operating lease. Operating leases are more like rentals with the option to buy. The lessor will retain official ownership of the asset, but you’ll have possession of it for the length of the lease. At the end of the term, you’ll have the option to return the equipment to the lessor or purchase it for a residual — typically fair market value (FMV).

There are a huge number of variations on both operating and capital leases, as well as tax advantages and disadvantages to both which you should discuss with an accountant. But generally:

  • If the equipment you’re considering will not become obsolete quickly and you’d like to own it, choose some form of capital lease.
  • If the equipment you’re considering depreciates quickly or becomes obsolete within a couple years, you probably want an operating lease.

Once you know what type of lease you want, you can narrow down your list of eligible lessors.

What About Equipment Loans?

Nothing wrong with them! If you’re looking at capital leases, you should also consider getting an equipment loan.

Equipment loans usually cover around 85 percent of the cost of the item, so be prepared to make a downpayment unless your lender specifies that they cover the full price.

One nice thing about equipment loans is that the purchase itself can serve as collateral (or security) for the loan, which means you’ll generally see lower interest rates than you would with an equivalent unsecured loan.

Check out our equipment financing resources if that sounds interesting.

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

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While the ability to get financing is great, you don’t want to pay more than you have to for the pleasure. This is much easier when you’re dealing with transparent lenders who lay all their cards on the table.

What terms and fees should you be aware of when looking into an equipment lease?

  • Interest Rates: The biggest cost you’ll run into with financing should be the interest rate. Generally, lower is better, but make sure you know how often and in what way the interest rate is applied.
  • Origination Fee: Common with loans, but unusual with leases, this is a fee that’s applied upfront. In most cases, it is deducted from the amount of money you receive when you get your capital.
  • Administrative Fee: This can be rationalized in any number of ways by your equipment financer, but it is a fee charged for servicing your account. It may be charged once, or at specific intervals.
  • Downpayment: The percentage you’re expected to pay out of pocket towards the equipment you’re buying. Common with equipment loans. With leases, there generally isn’t a downpayment, but you may be expected to pony up the first and last month’s payment up front.
  • Monthly Payment: The amount of money you’re expected to pay each billing cycle, usually monthly. In the case of leases, the higher your payment, the lower your residual will be.
  • Residual: An amount leftover at the end of your lease that you pay if you decide you want own your equipment. The lower your residual, the higher your payments will be.

The Best Equipment Leasing Companies

Not ready to build a spreadsheet comparing every equipment leasing company on the market? No worries. We can get you started.

Note that you’ll also want to consider leasing from banks or credit unions with which you’ve already built a relationship, as many times they can offer you the best rates (assuming you make the credit cut). If you’re dealing with a major brand, you may also want to consider working with a captive lessor.

Lendio

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One of the most efficient ways to seek equipment financing is through an aggregator service like Lendio. With one application, you’ll effectively have access to Lendio’s 75+ affiliates.  One nice thing about this service is that it’s free on the borrower’s end, so you’ll only have to worry about fees charged by the company Lendio ultimately connects you with.

Be aware that, although Lendio can work with customers with credit as low as 550, for equipment financing you’ll usually need to have a credit rating over 650.

For those who successfully apply, Lendio’s partners will finance the full cost of your equipment.

Currency Capital

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Another aggregator option for equipment financing is Currency Capital.

While online lenders have taken great pains to streamline application processes for working capital loans, equipment financing tends to be more traditional. Currency set out to change that, developing an API they compare to Amazon’s 1-click shopping experience.

Getting setup with Currency is a bit more laborious than, say, working with Lendio, but if you’re thinking ahead to future purchases, it may be worth the investment.

Crest Capital

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Want to skip the middle men? Check out Crest Capital.

Crest deals in just about every kind of lease you could think of, whether you want to own your equipment or just operate it for a little while. Additionally, they’re able to work with a wide variety of industries including agriculture, manufacturing, automative, and medical, as well as office equipment and software.

You will need to have been in business for at least two years, however, and have a credit rating of 650 or better.

TCF Equipment Finance

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TCF Equipment Finance, as the name implies, is the equipment financing and resale wing of TCF Bank. As a bank, their lending practices are as conservative as their pockets are deep. That means TCF is a good solution for mature businesses with excellent credit.

TCF offers many variations on capital and operating leases and works with most industries.

CIT Direct Capital

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Another good option for those with solid credit ratings is CIT Direct Capital. Their equipment financing division doesn’t have quite as broad a variety of lease types of some of the other options here, but it’s easier to meet their qualifications than those of many banks.

Both capital and operating leases are offered.

Final Thoughts

Between the hundreds of equipment leasing companies out there and the often strict qualifications needed to get financing, it can be a challenge to find a lessor who meets your needs. Hopefully you now have a better sense of what to look for when choosing an equipment leasing company.

Having trouble meeting the high lending standards for equipment financing? Don’t panic! Many other types of financing can be used to purchase equipment. For smaller items you can pay off quickly, you may want to consider a business credit card. For larger items, check out installment loans.

The post How To Choose An Equipment Leasing Company appeared first on Merchant Maverick.

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Paypal’s Credit Cards VS PayPal’s Debit Cards

While PayPal may be best known for its online payment processing system, it also offers a range of credit and debit cards.

PayPal offers a rewards card and a couple of cards with cash back rewards, as well as a simple debit card and a prepaid card. Each offering in the PayPal stable provides a unique option, though only one of these is specifically aimed a business use. However, PayPal’s other options can certainly be used by businesses.

If you’re a business owner looking for a new credit or debit card, there’s a chance PayPal has what you’re looking for. But which one is right for your business? Find out below by reading our in-depth breakdown!

PayPal Cards Quick Comparison

Card Card Name Type Annual Fee Rewards

PayPal Extras Mastercard

Rewards $0
  • 3 points per $1 on gas and restaurant purchases
  • 2 points per $1 on PayPal and eBay purchases
  • 1 point per $1 on all other purchases

PayPal Cashback Mastercard

Cash Back $0
  • Unlimited 2% cash back on all purchases

PayPal Business Debit Mastercard

Debit $0
  • Unlimited 1% cash back on eligible purchases

PayPal Cash Card

Debit $0
  • None

PayPal Prepaid Mastercard

Prepaid $4.95 monthly fee
  • Occasional special offers and cash back rewards

PayPal Extras Mastercard: Credit Card For Earning Rewards Points

PayPal Extras Mastercard



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Annual Fee:


$0

 

Purchase APR:


21.99% – 28.99%, Variable

If you’re keen for a rewards-centric card, PayPal offers the Extras Mastercard. This card is aimed at those who frequently shop at PayPal-accepting merchants and on eBay and offers bonus rewards for gas station and restaurant purchases.

This personal credit credit features three reward tiers:

  • 3 points per dollar spent at gas stations and restaurants
  • 2 points per dollar spent on PayPal and eBay purchases
  • 1 point per dollar spent on everything else

When you get your points, you’ll be able to score some awards. Every 6,000 points, you can choose to redeem for a $50 credit to your PayPal balance. You can also redeem points for airfare, hotel stays, car rentals, vacation packages, gift cards, or merchandise.

As a bonus, this card carries no annual fees, although you will have to pay transaction fees when traveling abroad and the APR is higher than the industry standard.

Want all the details? Check out our full PayPal Extras Mastercard review.

PayPal Cashback Mastercard: Credit Card For Cash Back

PayPal Cashback Mastercard



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Annual Fee:


$0

 

Purchase APR:


21.99% – 28.99%, Variable

PayPal also boasts a card with a simple reward scheme in the form of the Cashback Mastercard. This card features a straight 2% cash back across all purchases. That’s it—there are no quarterly category rotations or awkward reward rates to worry about.

This is actually one of the few credit cards on the market to rock a 2% cash back rate. This flat rate can make it an appealing choice for businesses that shop across a wide array of categories.

You’ll be able to redeem your cash back at any time in the form of PayPal balance cash. This is especially handy if you shop anywhere that accepts PayPal; however, if you intend to use your rewards elsewhere, you will have to manually transfer the balance into your bank account.

Like with the Extras Mastercard, this card has no annual fee. It also lacks a foreign transaction fee — a bonus for businesses that require international travel. However, it does include a higher-than-average APR.

If you’re curious about all this card has to offer, visit our complete review of the PayPal Cashback Mastercard.

PayPal Business Debit Mastercard: Debit Card For Instant Access To Your Business PayPal Account

PayPal Business Debit Mastercard



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Annual Fee:


$0

 

Purchase APR:


N/A (this is a debit card)

Beyond regular credit cards, PayPal also offers debit cards. The first of these is designed specifically to work with your Business PayPal account.

Unlike a credit card, you don’t need a credit check to receive the debit card. You also don’t need to worry about potentially paying an APR because the card simply draws from your available PayPal balance. However, you won’t be able to build up credit when using this card.

As an added bonus, PayPal gives an unlimited 1% cash back every month on eligible purchases. Purchases eligible for cash back include (but aren’t limited to) those processed as credit transactions. PIN-based transactions won’t qualify.

When buying abroad, you will be subject to a 1% foreign transaction fee. When compared to some credit cards, this fee is relatively low. However, businesses with frequent overseas travel may want to look into travel-specific credit cards.

You’ll also be able to withdraw cash via ATMs worldwide, although there is a standard $1.50 withdrawal charge. PayPal lets users request additional cards — this is handy if you’re looking to give employees debit cards. In partnership with Mastercard, there’s a zero liability policy which will help you against fraud-related charges. On top of all this, there are no annual or monthly fees to bother with.

PayPal Cash Card: Debit Card For Instant Access To Your PayPal Account

PayPal Cash Card



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Annual Fee:


$0

 

Purchase APR:


N/A (this is a debit card)

If you don’t have a Business PayPal Account, PayPal offers a Cash Card for personal accounts.

Just like their business alternative, this is simply a debit card and is usable wherever Mastercard is accepted. You won’t need a credit pull while applying nor will you have to worry about paying interest. However, it won’t help you build credit.

Unlike their Business Debit Mastercard, PayPal’s Cash Card does not feature any sort of reward scheme. That means this card is just for paying and withdrawing cash—you won’t be saving money using it.

It’s not possible for extra cards to be requested on the same account. Because of this, you’ll need employees to have their own PayPal accounts or go a different route entirely.

Despite those negative points, you will have protection from fraudulent charges on this card thanks to PayPal and Mastercard’s zero liability program. You also won’t be subject to annual or monthly fees like you might with some credit cards. There is, however, a 2.5% foreign transaction fee and a $2.50 withdrawal fee for ATMs outside the MoneyPass ATM network.

PayPal Prepaid Mastercard: Prepaid Card For Controlled Spending

PayPal Prepaid Mastercard



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Monthly Fee:


$4.95

 

Purchase APR:


N/A (this is a prepaid card)

PayPal’s final offering comes in the form of their Prepaid Mastercard. This reloadable card is accepted anywhere a Debit Mastercard would be accepted. That includes in-store purchases and orders over the phone or Internet.

You’ll be able to request a card without needing a credit check. Because it’s prepaid, you also don’t have to worry about any sort of interest. However, just like with the PayPal debit cards, using this prepaid card won’t enable you to improve your credit score. There is also a $4.95 plan fee due monthly.

To reload this card, you can use your PayPal balance. You can also top up at over 130,000 NetSpend Reload Network locations across the country. Additionally, there’s a direct deposit option that enables users to have paychecks, government benefits, and tax refunds directly deposited to a card’s account.

Beyond the card’s standard features, PayPal provides occasional rewards for using the Prepaid Mastercard. These rewards come in the form of money-saving offers based on your shopping history. You can also open an optional tiered-rate Savings Account through The Bancorp Bank and earn up to 5% Annual Percentage Yield (APY) for balances up to $1,000.

As another reward bonus, the PayPal Prepaid Mastercard features a refer-a-friend program. This program will give you $5 for every friend you get to sign up for the card and load $10 onto it.

Alternatives To PayPal’s Credit Cards

Don’t like PayPal? There are a few other options available. Here are Merchant Maverick’s favorite alternatives to PayPal credit cards:

Chase Ink Business Preferred



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Annual Fee:


$95

 

Purchase APR:


18.24% – 23.24%, Variable

Chase’s premier business rewards card is their Ink Business Preferred offering. This card is geared towards businesses focused on travel, but it has plenty of other perks, too.

You’ll collect three points per dollar spent (up to $150,000 combined) 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. Everything else nets one point per dollar.

Points can be redeemed for 25% more value when you book travel through Chase Ultimate Rewards. There are also 80,000 bonus points handed out once you spend $5,000 in your first 3 months. Do note, however, that this card carries a $95 annual fee.

For more details, check out our complete Chase Ink Business Preferred review.

Capital One Spark Cash For Business


capital one spark cash select
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Annual Fee:


$95 ($0 the first year)

 

Purchase APR:


18.74%, Variable

For cash back, it’s hard not to like Capital One’s Spark Cash for Business. Like the PayPal Cashback Mastercard, this card doles out an unlimited 2% cash back on all purchases.

It also features a welcome offer—something not included with either of PayPal’s cards. With Spark Cash, you’ll collect a $500 cash bonus after you spend $4,500 on purchases within your first 3 months. And because it’s aimed at businesses, employee cards can be requested for free.

There is a $95 annual fee to consider, but Capital One waives it your first year. If you’re looking for a cash back card with no annual fee, Capital One also offers their Spark Cash Select with an unlimited 1.5% back.

Want the complete Spark Cash breakdown? Read the full deets with the Merchant Maverick review.

Chase Ink Business Cash



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Annual Fee:


$0

 

Purchase APR:


15.49% – 21.49%, Variable

Chase also offers a cash back card with their Ink Business Cash. Unlike either the PayPal Cashback Mastercard or the Capital One Spark Cash for Business, this is a cash back card with a tiered reward scheme.

You can expect a whopping 5% back when you make purchases at office supply stores and on internet, cable and phone services (up to a combined $25,000). You’ll also nab 2% back when buying at gas stations and restaurants (also up to a combined $25,000). All other purchases collect 1% back.

The welcome offer grants you $500 bonus cash back after you break $3,000 on purchases in your first three months. You also won’t have to worry about interest for the first 12 months thanks to the card’s 0% introductory APR on purchases and balance transfers. Plus, there’s no annual fee to boot.

Get the full look at the Chase Ink Business Cash by reading our in-depth review.

Final Thoughts

For a business looking to get a new credit card, PayPal offers two good options. Their Extras Mastercard is a solid selection if your business frequently shops in one (or more) of the bonus categories. The Cashback Mastercard, on the other hand, is an excellent tool for businesses that don’t match up with the bonus categories of the Extras Mastercard.

If your business isn’t in the market for a credit card, but you still want to be able to swipe plastic with your PayPal account, the Business Debit Card is a great option. With easy access to PayPal funds, the ability to request additional cards, and 1% cash back, this debit card is a simple and obvious addition to any Business PayPal account.

The personal debit cards, meanwhile, might be best suited for employee personal accounts. They just don’t offer enough advantages compared to the Business Debit Mastercard. Instead, they might work best if an employee is looking for an alternative or something in addition to their bank account.

Regardless of whichever route you choose, PayPal has numerous card options for businesses looking to get more out of their PayPal account. Curious about using PayPal to accept payments? Check out our review of PayPal’s payment processing platform. If you’re considering a loan in the near future, learn more about PayPal’s Working Capital program.

The post Paypal’s Credit Cards VS PayPal’s Debit Cards appeared first on Merchant Maverick.

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Want To Open Your Own Bar? Top Tips To Get You Started

Have you ever looked around your local bar and thought, “I could run a place like this”? For many, it’s easy to get caught up in the excitement of potentially opening a bar, but for a select few, this is more than just a fleeting idea. These aspiring entrepreneurs want to make this dream a reality.

Opening your own bar or sports pub seems like a fun and exciting experience. After all, who doesn’t love gathering with friends and family to watch the big game with a cold drink in hand and appetizing snacks on the table? Behind-the-scenes, though, it’s a little different. While it may seem exciting to become a small business owner and call the shots, there’s also a lot of planning and work involved in starting a profitable business.

If opening a little corner pub sounds like a dream come true but you don’t know quite where to begin, you’re in the right place. In this article, we’ll share our top tips for starting the exhilarating and lucrative path to owning your own bar. We’ll go over what you need to legally open a bar, expenses to start and maintain your business, and the importance of a business plan. We’ll also help you decode one of the biggest pieces of the small business puzzle: getting financing for your new business.

If you’re ready to stop dreaming and start doing, keep reading!

Begin With Branding

bar nightclub pos systems

One of the first things you need to do before you take off running is to visualize a name, a theme, and an overarching concept for your bar. Do you picture yourself running a neighborhood pub where all of the locals gather? Or maybe you’d rather open a thriving nightclub where young club hoppers from around your city come to dance the night away?

Evaluate your different options, considering the type of patrons you’d like to attract as well as where you plan to open your bar. For example, if you want a younger crowd, a nightclub in a trendy part of town makes sense. If you want to attract an older, more sophisticated crowd, consider opening a wine bar, martini bar, or cigar bar in a thriving downtown area. You could also target sports fans by opening a sports bar or draw in foodies with a new gastropub.

Knowing what type of bar you want to open helps you plan out additional details. For example, if you’re opening a hot nightclub spinning the latest top 40 hits, country-western décor won’t fit your theme. If you want to draw in a sports crowd, loud music and fog machines probably won’t be on your list of supplies. Choosing the type of bar you want to open and nailing down your target audience first will help you accurately plan everything from the design and layout of your establishment to your name and logo.

Speaking of your bar’s name, it goes without saying that you’ll need one. Because it’s your bar, you’re free to name it anything you want. However, you want to make sure that you choose a name that reflects your concept. “John’s Neighborhood Bar” may incorporate your name, but it doesn’t stand out. When brainstorming ideas, think about the audience you want to bring in and pick a moniker that’s attention-grabbing — a name that lets customers know what to expect when walking through the doors of your bar.

Find A Location

One of the most important first steps in opening your own bar is choosing a location. There are a few options you have at this stage of the game:

  • Purchase an existing bar
  • Start from scratch
  • Buy a franchise

There are advantages and disadvantages for each option. If you purchase an existing bar, you inherit the existing clientele and may see immediate income. However, you could pay a steep premium if the bar is extremely successful at the time of sale. You may also rack up high costs if the bar doesn’t mesh with your vision and you have to pay for renovations.

If you start from scratch, you’ll be able to see your vision through from start to finish. However, it may take many months (or even a year or longer) to open your doors, and the costs can really rack up if you have to completely renovate a space or build a new bar from the ground up. With this option, careful planning, budgeting, and at least some knowledge of the bar and restaurant industry are needed for the highest chance of success.

Finally, you could purchase a franchise. This option could shield you from some of the mistakes you’d almost certainly encounter if you attempted to go it alone. However, you won’t be able to fully showcase your creativity with a franchise.

Finding a location takes planning and a dedicated eye on financials. Sure, putting your bar in a trendy and popular neighborhood could help your business become your city’s next hotspot, but real estate costs may be prohibitively high. Before you put down money on a location, make sure to do your market research and understand the costs.

Create A Business Plan

Every successful business starts with a solid business plan, and a bar is no exception. Not only will your business plan act as a blueprint for starting, operating, and growing your business, but it’s also a necessity if you plan to apply for business loans from a bank or other lender.

No two business plans are exactly alike, but there are some standard sections you should have in yours. This includes:

  • Executive Summary: Basic information about your business and why it will be a success
  • Company Details: Specific details about your business
  • Organizational Chart: Outline of your company structure
  • Marketing Strategy: How will you market your business?
  • Financial Projections: Show the financial outlook of your business

Your business plan should showcase the goals of your company and serve as a map for you to follow, keeping your business on the right path. Lenders will want to see a business plan that demonstrates thought, intelligence, research, and reasonable plans for success in the future.

Register Your Business

Before you open your bar and begin serving customers, you have to register your business. First things first: register the business’s name with your state. This can be completed via the county clerk’s office in the state where you’ll operate.

Next, you’ll need to determine your formal legal structure. Do you plan to be a limited liability company or a corporation? Your business structure will determine how much you pay in taxes, what paperwork needs to be filed with the government, and your personal liability. If you’re unsure of which structure is right for your new business, consult with an attorney, accountant, or business counselor.

Your business will also need to be registered with the state revenue office and the Internal Revenue Service. Because your business will have employees, you’ll be required to apply for an Employer Identification Number. You’ll also need a sales tax permit.

Finally, you’ll be required to obtain the proper licenses and permits to legally operate your business. Because your bar will serve alcohol, a liquor license is required. If your bar serves food, you’ll need a license from the health department. You can find out more about the requirements in your area by contacting your state Department of Commerce.

Obtain A Liquor License

In the previous section, we touched on acquiring the right permits and licenses. One of the most important things you need to open a bar — if not the most important thing — is a liquor license. This license makes it legal for you to sell alcohol in your business. This should be a top priority, as getting approval from your state’s Alcohol Beverage Control agency typically takes at least one month. In some cases, it may take up to six months to get approved.

The steps required to obtain your liquor license vary by state. In all states, though, you will be required to fill out an application. You may be required to submit additional documentation with your application, such as a certificate of incorporation, your proposed menu, and the certificate of title for your bar. You may also be required to pay a processing fee.

Once your application is reviewed and approved, you’ll have to pay for your license. Fees vary by state and range from a few hundred dollars to several thousand dollars. Your license will last for at least one year, and you must pay a fee when it’s time to renew.

Even though getting your liquor license is a hassle and can get very expensive depending on your state, this is a critical step that can’t be overlooked. To learn more about the process, fees, and type of license required for your business, contact your state ABC agency.

Seek Funding

Business licenses. A construction loan or lease. Renovations. You haven’t even stocked your bar, and the expenses are already piling up. Unless you’re already a successful entrepreneur with plenty of money in the bank, these expenses may seem completely overwhelming.

Very few small business owners have the resources to launch a business on their own. Instead, they turn to lenders for money to fund startup costs. Even after you launch your business, there will always be a need for more capital, whether an emergency has popped up, you need to expand, or a slow period has affected your day-to-day operations.

Even if your credit history is blemished, you’re a startup with no business history, or you face other challenges, there’s funding out there if you know where to look. Start with these options.

Personal Savings

Many new business owners have at least a little bit of money put away in their savings accounts. If you’ve been socking away pennies for a rainy day, now may be the opportunity to put these savings to use. By using your own money, you won’t be indebted to a lender (or at least not as much). You won’t have to worry about making scheduled payments, and there won’t be interest or fees to worry about. On the downside, if your business is unsuccessful, you lose part — or all — of your savings.

Loans From Friends & Family

If you have a friend or family member with extra money to invest, pitch them your business idea to see if they’re interested. But be careful! Even though you have a more personal relationship with this person, don’t just have a casual conversation asking to borrow funds. Instead, give them your business plan and present your pitch just as you would with a bank or other lender. Show them why you think your business will be a success, and give them a good reason to invest in you.

If you come to a loan agreement, get everything in writing, including the total borrowing amount, rates, and terms of the loan. Put your personal relationship aside and make sure you follow all terms of the loans just as a responsible borrower should.

Personal Loans For Business

Getting a startup loan from a bank or other lender can be tough. Sure, there are options, such as Small Business Administration loans, but these loans can be very difficult to receive — especially if you have a short time in business or low annual revenue. However, if you have a solid personal credit profile, more low-cost loan options are available to you.

Instead of going directly for a business loan, try applying for a personal loan for business. With a business loan, lenders consider your time in business, personal and business credit histories, and annual revenues. But with a personal loan, your personal credit score and income are used to determine if you qualify.

By going this route, you may be able to avoid many of the high fees and interest rates of alternative business loans. Depending on your credit history and the lender you select, your cost of borrowing could be much lower with a long-term, low-interest personal loan.

Recommended Option: Upstart

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You may qualify to receive a personal loan of between $1,000 and $50,000 through Upstart. These loans have competitive interest rates starting at 7.74% and going up to 35.99% based on your creditworthiness. Repayment terms of 36 or 60 months are available. The application process is quick, easy, and completely online.

To qualify for an Upstart personal loan, you must meet a few basic requirements, including having a valid email address, verifiable personal information, a source of income, and a U.S. checking account. You also have to meet the lender’s credit requirements, which include:

  • A credit score of 620 or above OR 580 or above for California residents
  • A solid debt-to-income ratio
  • No bankruptcies or public records
  • No delinquent accounts or accounts in collections
  • 6 or fewer inquiries on your credit report over the last 6 months

Lines Of Credit

A more traditional financing option is a flexible line of credit. The one drawback with a line of credit is that business performance is typically a qualifying factor. If you haven’t made any sales, you won’t qualify, so this isn’t a good financial option if you’re not in business yet.

As you build your business, though, a line of credit can be very useful. It can be used to purchase supplies, inventory, or cover that emergency that pops up when you least expect it. You can also use your line of credit to cover payroll or daily operational expenses.

When you receive a line of credit, a lender provides you with a credit limit. You can make as many draws as you need against the line of credit up to and including the credit limit. Once you initiate a draw, the lender will transfer the money directly to your bank account, giving you access to the money you need. Over time, you’ll make payments that are applied to the principal (the amount you’ve borrowed) and any fees and/or interest charged by the lender.

A line of credit is a revolving account, so as you repay the lender, money becomes available to draw again.

Recommended Option: Fundbox

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You may qualify to receive a line of credit of up to $100,000 through Fundbox. Fundbox lines of credit have no restrictions and can be used to cover any business expense. Once approved, you’ll be eligible to make draws immediately and receive funds as quickly as the next business day.

The Fundbox application process takes just minutes, and it’s easy to qualify. The lender focuses on the performance of your business — not your business or personal credit history — so even borrowers with credit challenges can qualify. You do, however, have to meet the following requirements:

  • Own a U.S.-based business
  • Have a business checking account
  • At least 3 months of transactions in your business bank account or at least 2 months of activity in a supported accounting software
  • At least $50,000 in annual revenue

Once you make a draw on your line of credit, automatic drafts are made weekly from your linked business checking account. If you do not use your funds, you do not pay. Repayment terms are 12 or 24 weeks and fees start at 4.66% of the total borrowing amount.

Business Credit Cards

Business credit cards work just like the personal credit cards in your wallet, only they’re used to pay business expenses. Business credit cards are great for emergency expenses or any time your cash flow is a little short. You can also make recurring payments, such as your utility bills, using a business credit card. This is especially beneficial if you have a rewards card that gives you cash back or other rewards simply for making qualified purchases.

When you apply for a credit card, your lender will set a credit limit if you’re approved. You may spend up to and including this credit limit with one or multiple transactions anywhere credit cards are accepted. Each month, you’ll make a payment that is applied to the principal, interest, and fees charged by the lender. As you pay down your balance, funds will become available to use again. If you don’t have a balance, you won’t pay any interest, although you may have to pay annual fees depending on the card you select.

Recommended Option: Chase Ink Business Unlimited

Chase Ink Business Unlimited


chase ink business unlimited
Apply Now 

Annual Fee:


$0

 

Purchase APR:


15.49% – 21.49%, Variable

If you have an excellent credit score of at least 740, you may qualify for the Chase Ink Business Unlimited credit card. This is a rewards card that provides you with unlimited 1.5% cash back on all purchases made for your business. As a new cardholder, you will also be eligible to receive a $500 cash back bonus if you spend $3,000 within 3 months of opening your account.

The Chase Ink Business Unlimited card comes with a 0% introductory APR for purchases and balance transfers for the first 12 months. After the introductory period, the card has a variable APR of 15.49% to 21.49%. This card comes with no annual fee. You can also receive additional cards for employees at no extra cost.

Rollover For Business Startups (ROBS)

Do you have a retirement account? If so, you can legally leverage these funds to pay your startup costs without facing tax or early withdrawal penalties. With a Rollover for Business Startups (ROBS) plan, you can put your retirement account to work for your new business.

It’s possible to access your retirement account funds with no penalties in just a few easy steps. First, create a new C-corporation. Next, create a qualified retirement plan for the corporation. Then, the funds from your qualified retirement account are rolled over into the new retirement plan. Finally, the funds that were rolled over can be used to purchase stock in the corporation, giving you access to the capital you need to start or grow your business.

Throughout the process, you do have to remain compliant and follow legal guidelines. For most new business owners, the process can get confusing, which is why ROBS providers are available to help. A ROBS provider will set up your ROBS plan to ensure everything is by the book. To get started, you’ll need to pay a setup fee, then pay a monthly maintenance fee for maintaining your account.

The great thing about ROBS plans is that you are using your own money, so you won’t have to pay interest on a loan. You will, however, have to pay a monthly fee to maintain your account. You also risk losing your retirement funds if your business is unsuccessful.

Recommended Option: Benetrends

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Benetrends is a pioneer of ROBS, launching its Rainmaker Plan in the 1980s. This visionary-plan is the longest-running ROBS plan, and Benetrends offers many benefits that outshine its competitors.

With just four easy steps, Benetrends can get the capital you need from your qualified retirement plan. With the Rainmaker Plan, you can have your funding is as little as 10 days.

To qualify, you must have an eligible retirement plan with at least $50,000. Most retirement plans are eligible, with the exception of Roth IRAs, 457 plans for non-governmental agencies, and distribution of death benefits from an IRA other than to the spouse. There are no time in business, annual revenue, or personal credit score requirements.

To get started with Benetrends, you’ll be required to pay a setup fee of $4,995. After paying this fee, your C-corporation and ROBS plan will be set up. After your plan is set up, you’ll be required to pay a monthly maintenance fee of $130. This fee covers ongoing support and services including legal support, audit protection, and compliance.

Purchase Financing

Paying your vendors will be an ongoing expense for your business. You have multiple options available to pay your vendors. You can pay out-of-pocket, you can use a credit card or line of credit, or you can take advantage of purchase financing.

With this type of financing, your vendors are paid immediately, while you get more time to pay. A lender pays your vendors up front, then you repay the lender over a set period of time. The lender will add fees and/or interest to your loan balance for paying your expenses upfront.

By using purchase financing, you’re able to pay your vendors immediately to receive the supplies, inventory, or services you need for your bar. Then, you can spread out your payments over time to make these purchases more affordable for your business.

Recommended Option: Behalf

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Behalf offers purchase financing of up to $50,000 for qualified borrowers. Repayment terms of up to 180 days are available. Behalf charges fees of 1% to 3% of the borrowed amount per month for using this service. There are no additional fees. You can repay on a weekly or monthly schedule.

Behalf’s financing can be used to pay merchants for inventory or services. However, there are some restrictions. You can’t pay bills, cover payroll, or pay other existing debt through Behalf.

Behalf analyzes the performance of your business when making its approval decisions. There are no time in business or business revenue requirements. Behalf does not have a minimum personal credit score for approval, although your credit history will be considered during the application process.

Create Your Menu

Before you open your bar, you need to know what food and drinks you plan to serve and what equipment is needed to properly prepare each menu item.

When planning your menu, think about your theme and the type of customers you plan to attract while also keeping your budget in mind.

Decide what type of drinks you’ll serve. Most bars serve a variety of wines, beers, liquors, and mixed drinks, but what you serve may be different based on the theme of your bar. For example, in a sports bar, your drink menu may feature a wide selection of beers. If you open a nightclub, you want to have a variety of liquors and mixers on hand to create many different types of drinks. If you have a cigar bar, wines and craft beers may make up the bulk of your menu. Again, the type of bar you want, the theme, and your target audience can help you determine what you serve.

If your bar will serve food, think about the types of food you’ll serve. In a neighborhood bar, appetizers like fried cheese sticks or nachos may be enough to keep your customers happy. If you have a gastropub, meals made with high-quality ingredients should make up your menu. Remember, creating the perfect menu takes careful planning, so take the time to brainstorm your ideas.

It’s also wise to start off small and add new items as your business grows. If you have a huge menu that features every type of food and beverage you could think of, your bar will require more equipment. More equipment equals more expenses. Working with a smaller menu can also ensure that your bartenders and kitchen staff aren’t overwhelmed and can focus on creating high-quality food and drinks. As you draw in customers to your bar, you can tweak your menu based on what customers are ordering, what gets rave reviews, and what falls flat.

Once you’ve determined what your bar will be serving, you’ll need to talk with suppliers to get estimates of costs. As you approach opening day, you’ll place your order with your selected suppliers.

Still stuck on your menu? Check out our tips for creating a great menu.

Purchase Your Equipment

Once you’ve secured a location and have moved further into the process of building your bar, it’s time to think about the equipment and fixtures that you need. What your bar needs depends on the theme you’ve selected and what you’ll be serving, but some items you may consider include:

  • Bar & barstools
  • Benches
  • Tables & chairs
  • Industrial ovens & other kitchen equipment
  • Coolers, refrigerators & ice bins
  • Blenders & other bar equipment
  • Big-screen TVs
  • Sound system
  • Microphones & other audio equipment
  • Beer taps

After you’ve leased, purchased, or built your building, it’s important to create a detailed layout of your business. You want to ensure that you have enough room for everything required to run your bar, while also leaving enough space for seating, a dance floor, and other features that will be important to your customers. As you grow your business and need to add or update equipment, consider equipment financing to make these expenses more manageable.

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

Select Your POS System

ipad POS

Gone are the days when most businesses just needed a cash register or two for their customers. With the rising use of credit cards, debit cards, and mobile payments, businesses — especially bars — need a more advanced system for accepting payments.

A point of sale (POS) system is one of the most important pieces of equipment you’ll need for your new bar. A POS system combines software and hardware to create a centralized point for business operations. Through this system, you’ll be able to take orders and accept payments, but that’s not all.

Some of the most advanced POS systems come with features beneficial to bars. This includes built-in tipping systems, inventory management that allows you to track your stock levels, and an open ticket system for creating bar tabs.

Your POS system plays an important role in your business, so it’s important that you know what to look for before making your purchase. Check out our top picks for POS systems for bars and nightclubs.

Lightspeed Restaurant ShopKeep Toast

Lightspeed Restaurant

ShopKeep

Toast

TouchBistro

Breadcrumb POS by Upserve

ShopKeep alternatives for restaurants

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Review

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Review

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Review

Compare 

Review

Monthly fee

$69+

Get a quote

$79+

$69+

$99+

Cloud-based or Locally Installed

Cloud-based

Hybrid

Cloud-based

Locally installed

Cloud-based

Compatible credit card processors

Cayan or Mercury in US; iZettle in Europe

Shopkeep Payments & some others; contact your processor to see if they are supported

Toast only

TouchBistro Payments, Square, PayPal, Moneris, Cayan, Chase Paymentech & more

Upserve Payments only

Business size

Small to medium

Small to medium

Small to large

Small to medium

Small to large

Hire Employees

To make sure your bar is a success, you need to have the right employees working for you. If you haven’t done so already, you need to apply for an Employer Identification Number for tax purposes. Next, you need to determine how many employees you need and what their roles will be in your business.

You’ll need at least one bartender that prepares and serves drinks in your bar. You will need to add additional bartenders based on the number of bar areas you have in your business, as well as the number of customers you have to serve.

If your bar will serve any type of food, you will also need a kitchen staff. This includes at least one cook, but you may also need prep cooks, dishwashers, and other staff as your business grows.

You’ll also need servers to distribute food or pass out drinks to customers not seated at the bar. The number of servers you have is based on the size of your bar and how busy it gets.

While your servers may be able to handle cleaning tables at first, as your business grows, you may want to add a busser or two, who are responsible for cleaning off tables for new customers.

You may also require additional staff. For example, you may hire a doorman that checks IDs before customers enter the door. A security guard may also be a staff member you hire to handle tempers that flare from customers who’ve had one too many.

You also need at least one manager to oversee the staff. A manager’s role may include hiring employees, firing employees, training, making schedules, and making sure that all staff members are doing their jobs properly.

Before you start seeking job applicants, make sure to create an in-house organizational chart to know exactly who you need to hire. You also need to do your research to figure out what salaries you will offer, as well as any benefits.

Unsure of where to hire new employees? You have a few options. First, post a job ad on online job boards or classified ads to find potential employees. This is an inexpensive (or even free) way to find candidates.

You can also ask for referrals. If you know someone in the industry, ask if they have any new hires to recommend. Don’t know anyone in the industry? Ask other colleagues, family, and friends for recommendations.

Bolster Your Web Presence

After completing all of these steps, you’ll be that much closer to opening your bar. However, you want to make sure to spread the word about your business, and there’s no better way to do that than with the internet.

One of the easiest ways to get the word out about your business is through social media. Facebook, Instagram, and Twitter are just a few of the ways you can reach your target audience, and Yelp For Business is a must. Best of all, these accounts are free to use. As you grow, you may consider moving past the free advertising you get through your posts and pictures and invest in advertising on these social platforms.

You also need a good website. Keep your bar’s theme in mind when you design your site. Make sure that your website reflects the image you want to project. There are many small business website builders you can look into if you want to create your website yourself. These make it easy for you to create a professional website with no prior web design experience required.

Service Pricing Hosted or Licensed Templates & Themes Compatible Credit Card Processors Next Steps

$14 – $179/month Hosted Excellent Many

Go to Site

Free – $29.90/month Web-Hosted Excellent Many

Go to Site

Free – $25/month Web-Hosted Average Many

Go to Site

$0/month Hosted Good Square Payments

Go to Site

Make sure that you include your address and phone number on your website. Information about your bar including dress code and hours of operation are also extremely useful for customers. You can also include your menu, photos of your establishment and patrons, and news and updates on your website.

Also, remember that word-of-mouth is one of the best forms of advertising for a bar. If your customers love your drinks, food, service, and atmosphere, they’ll tell others. If they dislike your bar, they’ll also tell others … who will make sure to avoid your establishment. Whether your bar is brand new on the block or you’ve been in business for some time, keep customer satisfaction high so that customers online and off will have nothing but positive reviews for your business.

Final Thoughts

As you can see, creating a bar where everyone gathers to have a great time takes a lot of hard work. But just as Theodore Roosevelt said, “Nothing in the world is worth having or worth doing unless it means effort, pain, difficulty.” Running your own bar means planning, budgeting, and always being ready for growth. While your bar won’t make you an overnight millionaire, you can become a successful entrepreneur with this potentially-lucrative venture if you put in the work.

The post Want To Open Your Own Bar? Top Tips To Get You Started appeared first on Merchant Maverick.

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11+ GoDaddy Website Builder Examples for Inspiration

11+ GoDaddy Website Builder Examples for Inspiration

So you’re considering using GoDaddy as your website builder, and you’re looking for GoDaddy website builder examples for inspiration and confirmation that you’re making the right choice.

See GoDaddy’s Current Website Builder Pricing here…

GoDaddy is the big brand in the website services industry. From their Super Bowl ads to TV ads to online advertising, they are by far the most well-known choice for domains, hosting, website builders, and productivity products for small businesses.

And when it comes to their website builder (known as “GoCentral”), GoDaddy is known for its raw simplicity. The setup is extremely straightforward (fill-in-the-blank style), which makes it extremely appealing to DIY-ers with limited website building experience.

And while simple is great, there are some major tradeoffs, particularly in terms of functionality.

As we dive into examples of what GoDaddy websites look like in the wild, there is one thing to keep in mind when you’re evaluating a website platform: it’s not just about how the websites look. How they operate matters too. That’s the main consideration for all my website builder reviews & my guide to choosing the best website builder.

Think of it like buying a car. You have a make / model in mind, and you’re probably looking to see them drive by on the road to see how they actually look. However, you also care about how they operate. Does it accelerate well? Does it have the hauling capabilities you need? How is the gas mileage?

Looking at a website platform should be done in the same way. We collected the following GoDaddy GoCentral (their website builder brand name) examples not just to show you how they look, but how GoDaddy websites can function so you can be sure you have a website that fits both the style you want and the functionality you need.

Disclosure – I receive customer referral fees from companies mentioned on this website. All data & opinions are based on my professional judgement as a paying customer or consultant to a paying customer.

General Website Examples

Let’s start with a general round up of solid GoDaddy website builder examples. We’ve pulled these examples based on functionality, design, and usability. Again,GoDaddy works well for DIY-ers who want an easy-to-use website that they can throw up on their own without having to worry about the inner-workings. However, be aware that with this comes trade-offs (i.e. you give up control, functionality, customization, etc.)

Citizen Restaurant

If you’re looking for a straightforward website where you can post content (like menus), this GoDaddy website builder example is a great place to start for inspiration. The homepage is straightforward, with a simple call to action to sign up for the email list. The navigation is also clear, with the Dine and Drink tabs bringing visitors to pages where they can download a PDF version of the dining and drinks menus.

Augusta Blues Company

Augusta Blues Company

What stood out to us about this GoDaddy website was how it makes the most of its simplicity. By using a custom graphic on the homepage for the header image, Augusta Blues Company has added some custom flair to this straightforward template. We also found the navigation to be straightforward and easy to use, which is a key hallmark of a good website!

And for those who need to provide directions on their website, this GoDaddy website builder example showcases how you can integrate a map on the homepage. We particularly liked how August Blues Company paired the map with other contact information.

Augusta Blues Company Contact

Explore Similar GoDaddy Templates!

Wedding Website Example

Wedding websites are a great way to give guests information about the big day, show off your personality, and post updates / pictures / anything else you may want to share with those who are involved with your wedding. Given this website has a shorter lifespan than say, a business website, you’ll want something that’s easy to customize, edit, and manage. Here’s a great example of what you can do with a GoDaddy GoCentral wedding website:

Dave and Nuria

Dave & Nuria

If you’re looking for a simple, polished, easy-to-use wedding website, this example from Dave and Nuria is a great place to start for inspiration. It has all of the necessary information, from the itinerary for the weekend to how to plan your trip, and the RSVP is a simple contact form. It’s a great example of a plug and play website template that saves you time and money, which is especially useful for a site that doesn’t have a long lifespan!

Explore Similar GoDaddy Templates!

Photography Website Example

Photography websites are all about the portfolio of work. When looking for a GoDaddy website builder example to serve as inspiration for your photography, pay special attention to the layout options for your work. You want to be sure you’re showing off your photos in a creative way without sacrificing the user experience (AKA fast photo load speed, easy to navigate, high quality images, etc). Here are a few examples of GoDaddy photography websites we liked:

Anthony Friend 

Anthony Friend

What makes this GoDaddy website a great example for photographers is the layout of the portfolio page. The grid style makes it easy to get an overview of the photographer’s work without overloading the functionality or making it too difficult for visitors to get an idea of their style.

Richard Eads

Richard Eads Photography

Richard’s site provides another photography inspiration example, specifically in how the work is displayed. Notice how this GoDaddy website uses a carousel to feature photos, with a bar underneath that changes as the photos move. It’s a unique way to showcase Richard’s work in a way that’s interactive without being overwhelming.

Explore Similar GoDaddy Templates!

Ecommerce Website Example

Ecommerce websites are all about their products. A good ecommerce website should have high-quality product images, be easy to navigate, and keep the focus on what you have to offer your shoppers! You’ll also want to include strong product descriptions and an easy check out process. Here are a few of our favorite GoDaddy ecommerce website examples:

Popcorn Willy

Popcorn Willy

What stood out to us about this GoDaddy ecommerce website was the product page organization. The categories help visitors sort through what they’re looking for easily, and the ratings provide another layer of “trust factor” that’s key for ecommerce websites. If you’re looking for a simple way to list products, this website could be a great place to start for inspiration.

Better Living Market

Better Living Market

If you’re looking for a bit more “design flair”, check out Better Market Living. This ecommerce website uses a high-quality header image to spruce up the homepage, but still keeps navigation ultra-simple with the shop now button.

Something to note about GoDaddy website builder websites in general: while GoDaddy is known for its simplicity, that does mean limited design customization and functionality. For example, most websites have a similar, block layout. For e-commerce websites specific, the product pages don’t vary much beyond this layout.

Better Living Market Products

Again, you should choose your website builder not just on design, but on the functionality and levels of customization you need. If you’re looking for a more customized ecommerce shop, there could be better options for you.

Explore Similar GoDaddy Templates!

Artist Website Example

Need to showcase your art? An artist website is a great way to create a digital portfolio of your work. These websites should be easy to navigate, keep the focus on your artwork, and allow prospective clients / commissioners to contact you easily. Here’s an example of a great artist GoDaddy website:

Jules Art & Design

Jules Art and Design

Sometimes, less is more… and that’s exactly what makes Jule’s website so effective. The clean layout draws your eye right to her artwork, and the simple navigation at the top of the page makes it easy to find exactly what you need on her website. This is another example of a GoDaddy portfolio website that is a good fit for a DIY-er who just needs a place to showcase their work in an easily digestible format.

Explore Similar GoDaddy Templates!

Music Website Example

Similar to artist websites, music websites are all about the music. Which means if you’re creating a music website, you’ll need a player so visitors can listen to your work on your site. You’ll also want to give people the opportunity to connect with you by listing social media channels, tour dates, and places they can buy your albums! Here’s an example of a music website created with GoDaddy:

Telekinetic Yeti

Telekinetic Yeti

This GoDaddy music website keeps the focus solely on the music. In fact, the music page is a simple, embedded music player where visitors can listen to the band’s most recent album. While it could be more sophisticated, it doesn’t necessarily need to be. Again, it all comes down to your needs. If you wanted some advanced functionality on your music website (like full discography, Spotify integrations, Ticketmaster and Eventbrite integrations, etc.), GoDaddy may not be the best option for you.

Here’s how I’d recommend building a long-term music website with WordPress. Wix also provides a good drag & drop option.

Business Website Example

A strong business website showcases your services, gives customers the opportunity to contact you, and builds social proof. Visitors should be able to know exactly who you are and what you do when they land on their site, and should be able to easily navigate to what they’re looking for from your homepage. Here are a few examples of strong GoDaddy Website Builder business website examples:

Women Working in Technology

Women Working in Technology

Women Working in Technology has a fairly robust navigation, which goes to show just how much content you can have on your GoDaddy business website. However, the navigation keeps it organized with sub-menus, which means despite the large amount of content on the site, it’s easy to find your way around.

We also liked how Women Working in Technology used a video on their homepage to tell visitors what they’re all about.

WWIT-About

It provides a great way to make the site more interactive without having to build something completely custom!

Crescent Flight Ops

Crescent Flight Ops

Again, GoDaddy tends to skew towards block-style website templates, and while this business site by Crescent Flight Ops is a bit blocky, their color palette and use of different media types help with the flow. We included this website to show how if you wanted the simplicity, you could still make your theme look different by customizing the colors and actual content on the page.

Explore Similar GoDaddy Templates!

Personal Website Examples

Personal websites are exactly what they sound like… personal! Whether it’s a resume / portfolio website you use to get booked or a blog you use to create content, this type of site is all about getting your personal brand online and owning your space on the Internet. Personal website should be easy to edit, manage, and customize. Here’s an example of a GoDaddy personal website to use for inspiration:

Marc Whisnant

Marc Whisnant

It’s easy to get caught up in showcasing your personality and creativity on your personal website. And while adding in some flair is fine, you don’t want to sacrifice clarity in the name of creativity. Marc’s website includes the right balance of both. We loved how his work stands out in contrast to the black background, but isn’t overwhelming in its grid format.

We also liked how Marc included a downloadable version of his resume on the homepage. This is a great way to share your qualifications with those who may be looking to hire you.

marc resume

Explore Similar GoDaddy Templates! Or explore how I like to build personal websites.

Next Steps

At the end of the day, choosing your website platform goes far beyond design. Why? Because all web pages are made of HTML & CSS with a few scripts thrown in. This means that any website template can exist on any good web platform.

What YOU want to focus on is the design elements and functionality that are available on the platform you’re choosing.

If you feel like GoDaddy fits the design and functionality needs you have for your website, you can explore more GoDaddy templates here.

Not sure if GoDaddy is a right fit? Explore other website builder options here or see how GoDaddy stacks up against popular brands like Wix & Weebly.

The post 11+ GoDaddy Website Builder Examples for Inspiration appeared first on ShivarWeb.

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What Are Verified By Visa And 3D Secure?

If you’ve heard about Verified by Visa through the grapevine — or more than likely in your checkout process — and you’ve got some questions, you are in the right place. Come along as we take a look at the good, bad, and the ugly when it comes to the evolution of Verified by Visa and 3D Secure.

What is Verified by Visa? Simply put, it’s a program to help ensure that cards are used only by the owner of the Visa account, thereby making online purchases more secure. 

The premise may be simple, but the details can be a little complex. Buckle up for a bit of a bumpy ride. In this post, we’ll look at where the industry used to be in terms of security protocols and talk about how far we have come thanks to solutions like Verified by Visa and its companion, 3D Secure.

3D Secure stands for 3-Domain Secure, which reflects the fact that the checkout process involves three separate domains to protect cardholders and merchants. 3D Secure encompasses both Visa and MasterCard’s security programs, as well as programs offered by JCB and American Express in select parts of the world. Merchants can add 3D Secure authentication on their site as an additional way to prevent card fraud. 

As we dig in the post, we are also going to explore some sobering realities that every eCommerce business must face when it comes to fraud — and discuss how 3D Secure technologies can protect you as a merchant.

What Is Verified By Visa?

Verified by Visa 3-D Secure 2.0

As we mentioned above, Verified by Visa is a program designed to reduce fraud and make online purchases more secure, but that definition is fairly ambiguous. The truth is that Verified by Visa is always evolving to adapt to how it accomplishes the goal of security, and this program will likely continue to change to stay one step ahead of online fraud. A shopper’s experience with Verified by Visa will largely depend on who issued their card as well as the merchant’s online security protocols. For example, a shopper with one particular Verified by Visa card may be prompted to enter in a personal PIN every time they buy at their favorite eCommerce shop. Another shopper with a Verified by Visa card issued from a different bank may go through the checkout seamlessly and not be aware that there are layers of risk assessment happening with data in the background to ensure the order is legitimate. 

This difference in shopping experiences is because there are two versions of Verified by Visa with varying levels of participation from issuing banks. This variance is in part due to the rollout of the new protocol 3D Secure 2.0. The update addressed some of the significant problems with the original 3D Secure, version 1.0. In the light of the risks presented by card-not-present transactions, most merchants (and shoppers!) would agree that adding layers of security is a good thing. But as I mentioned above, there were some big complaints with the original version of Verified by Visa when it rolled off the lot.

Verified by Visa and 3-D Secure 1.0

Screenshot of “Online Shopping is Easy and Secure With Visa” Video

3D Secure 1.0

Before we dig in, let me first say that it is completely normal to experience a certain to amount of negativity bias when we experience something new. As humans, we tend to focus on the negative and often approach new situations with suspicion. That can be a good thing or bad thing, depending on the situation.

Unfortunately, some shoppers who were initially exposed to Verified by Visa and 3D Secure version 1.0 mistakenly thought the pop-up authentication screen prompting them to enter their secure personal PIN was a malicious attempt at gathering their credit card data, and they jumped ship. These customers abandoned their carts or were locked out, resulting in lost sales for merchants. The situation was not good for shoppers, and certainly not good for businesses.

Verified by Visa spoof

Third-party pop-up screens demanding passwords or other sensitive information are a red flag, for obvious reasons. And as predicted by naysayers, several reported malware pop-ups spoofed the whole scheme. Verified by Visa and the banks soon worked out these kinds, fortunately. Now, the authentication step for Verified by Visa 1.0 (yes, that version still exists) happens in an in-line window. Pop-ups are a thing of the past.

But this improvement still doesn’t change the fact that many people don’t like having to remember yet another PIN number, code, or password for every purchase they make, big or small. There’s always a delicate balance between payment security and user experience in the world of payment security. Shoppers expect convenience and ease while also needing a high level of trust.

The newer 3D Secure technology utilized by Verified by Visa continues rolling out to eCommerce shops, and it does an exceptional job of addressing payment security and usability. 

3D Secure 2.0

3-D Secure 2.0 Verified by Visa

Just like 3D Secure 1.0, the newer 3D Secure 2.0 provides an additional layer of security for online transactions before final authorization. However, the updated version of Verified by Visa included in 3D Secure 2.0 uses a data stream to provide more robust risk assessments instead of relying on a PIN or passcode for authentication.

Verified by Visa and the original 3D Secure technology came on the market 15 years ago, but Version 2.0 is being managed and implemented by EMVCo, the same organization responsible for certifying hardware and software to accept chip card payments.

The important thing to note for any merchant considering Verified by Visa and 3D Secure is this: 3D Secure 2.0 represents the latest global standard in payment security.

The touted improvements are:

  • Cross-Device Support: 3D Secure 2.0 brings better usability and support for transactions across several types of devices.
  • Better Risk Analysis: Enhanced risk-based, decision-making for issuers utilizes 10X the data (e.g., time zone, device ID, purchase history, and geo-location data).
  • Improved Usability: A faster behind-the-scenes makes for happier customers.
  • Less Customer Intrusion: Authentication is only required directly from a shopper if the transaction is flagged high risk.

Visa says it best:

The new 2.0 version of the technology enables a real-time, secure, information-sharing pipeline that merchants can use to send an unprecedented number of transaction attributes that the issuer can use to authenticate customers more accurately without asking for a static password or slowing down commerce.

One of the best improvements from a shopper’s standpoint is that they won’t be asked for additional information unless the transaction waves some red flags. Data powers the risk assessment behind the scenes to more accurately identify a genuine vs. fraudulent transaction. As touched on above, 3D Secure 2.0 uses different types of data to analyze the purchase and protect shoppers and merchants from fraud, including but not limited to:

  • Purchase history
  • Device ID
  • Purchase amount
  • Geo location
  • Email address
  • Merchant history
  • Time of day
  • Unusual IP address
  • Unknown device
  • First time purchase of merchant
  • Excessively large purchase amount

And unlike Verified by Visa’s 3D Secure 1.0, users are not required to opt-in or register. If a cardholder’s issuing bank makes use of 3D Secure 2.0, the bank automatically enrolls the card at no charge to the customer.

Verified by Visa Registration

Fewer passwords and no need for registration means that most cardholders will not even necessarily be aware of all the fraud protection happening behind the scenes.

But what about merchants? What does a merchant do if they want to utilize 3D Secure technology in their checkout process? Read on for merchant information and some sobering fraud statistics that fueled the race to better technology.

How Verified By Visa & 3D Secure 2.0 Protect Merchants

Everyone understands that fraud is costly, but many may not know how the EMV chip protections for card-present transactions have caused fraudsters to focus more on eCommerce fraud. After the rollout of EMV, it was harder than ever to clone a user’s card or steal their credit card data. So the target has changed.

Fraudsters identify vulnerabilities in the payment security landscape, and that’s why we see eCommerce businesses hit harder than ever. When companies don’t understand how to protect themselves, they open themselves up to data breaches and big problems ensue. According to UPS Capital, 60% of small businesses are out of business within six months of suffering a cyber attack.

Every ecommerce merchant should do what they can to provide more protection for these transactions. We cover more about the risks of online payments and how you can protect your business in What Is A Card-Not-Present Transaction?, but 3D Secure technology is one excellent way you can defend your eCommerce business.

Here’s how it works in a nutshell:

How 3-D Secure Verified by Visa works

Instead of asking every customer for extra information, Verified by Visa and 3D Secure 2.0 use multiple layers of data to identify a high-risk transaction. Your shoppers are only asked to complete an extra step (e.g., entering in a verification number delivered via text) if there is a high risk of fraud.

All of this is important because merchants not only need to protect themselves from fraud, they need to protect themselves from lost sales due to frustrated customers. A behind-the-scenes risk-management approach means that convenience and user experience remain intact.

EMVCo reports that the data-driven authentication of 3D Secure 2.0 leads to a 70% reduction in cart abandonment. So as a savvy merchant, making it easier for your customers to complete a purchase while reducing the risk of fraud to your business is a no-brainer! 

Verified by Visa 3-D Secure 2.0

How Merchants Can Implement 3D Secure Technology

As mentioned earlier, Visa recommends that issuers and merchants support both the 1.0 and the 2.0 specifications. If you currently have a merchant account, give your provider a call to find out if they offer 3D Secure and how to start utilizing it in your online shop.

If you are in the market to find a high-quality, affordable processor that offers built-in excellent security tools (including 3D Secure) for eCommerce business, check out our other post, How to Choose an eCommerce Merchant Account.

Best Online Credit Card Processing Companies

Heading CDGcommerce Shopify Square Fattmerchant Payline
 
Review
Visit Site
ReviewVisit Site Review
Visit Site
Review
Visit Site
ReviewVisit Site
Key Features Free Gateway Included Advanced Shopping Cart Basic Webstore, All-in-one Advanced Billing & Invoicing Versatile Service
Shopping Cart Compatibility Many Shopify Only Many Many Many
Gateway Compatibility Many Many Square Only Many Many
Pricing Model Cost-Plus Flat Rate Flat Rate Subscription Cost-Plus
Standard eCommerce Rates 0.30% + $0.10 markup 2.90% + $0.30 2.90% + $0.30 0.00% + $0.10 markup 0.50 + $0.10 markup
Entry-Level Monthly Fee $10 $29 $0 $99 $0

Final Thoughts

The Verified by Visa experience for both shoppers and merchants has come a long way since it was first introduced more than fifteen years ago. Because the threat of fraud is continually evolving, we are likely to see this technology continue to get smarter as well.  That’s because eCommerce businesses today face increasing threats from fraudsters who target vulnerabilities in the digital space.

Staying up-to-date with the latest payment security technology is crucial to protect your business and the shoppers who buy from you. Verified by Visa and 3D Secure 2.0 work behind the scenes to authenticate a sale without a lot of intrusive requests to the shopper, making it an excellent way to combat fraud.

The post What Are Verified By Visa And 3D Secure? appeared first on Merchant Maverick.

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LoanBuilder VS Kabbage: Which Lender Is Best For Your Business?

We all know that running a small business requires capital. While it would be great to cover all of our expenses out-of-pocket, for most small business owners, this just isn’t a reality. For times when money is tight, a small business loan makes expansions or simply covering day-to-day operations possible.

But what happens when your revenues are too low, your time in business too short, or your credit score doesn’t meet bank requirements for a traditional loan? Instead of giving up, turn to an alternative lender like LoanBuilder or Kabbage.

LoanBuilder and Kabbage have emerged as frontrunners among small business lenders. Online applications eliminate the need for face-to-face visits with your local banker, to begin with. Borrower requirements are also more relaxed, and you can get the money you need in days — no more waiting weeks for approval.

You want to make the best financial decision for your business, so which lender do you choose? In this post, we’ll compare these two lenders to help you make the right choice. We’ll take an in-depth look at the application process, break down terms and fees, and help guide you on your path to small business financing.

Ready to get started? Let’s dive in.

Services Offered

Winner: Kabbage

LoanBuilder provides capital to small business owners through short-term loans. When you apply for a LoanBuilder loan, you can receive between $5,000 and $500,000 for your business. Once approved, you’ll receive one lump sum of cash that can be used as working capital, for an emergency, to expand your business, or for any other business purpose.

One of the benefits of a LoanBuilder loan is that you can “build” your own loan. With the LoanBuilder Configurator, it’s possible to check out different options to find the financing solution that’s best for your business. You can easily adjust the borrowing amount and terms to compare your options. For example, if you want low monthly payments, select a longer repayment term and lower borrowing amount. If you’d rather reduce your fixed fee, opt for a shorter term.

If you want more flexible financing, Kabbage is the better choice for your business. Through Kabbage, you can receive a line of credit with a limit of $2,000 to $250,000.

A Kabbage line of credit is significantly different from a traditional loan. Loans — like the ones available through LoanBuilder — are sent to your bank account in one lump sum. Once you’ve paid off the loan, you’ll have to reapply to receive more money. With Kabbage’s line of credit, you’ll be assigned a credit limit, and you can make one or more draws up to and including that credit limit. Each payment is applied to your balance plus fees. As you repay borrowed funds, they’ll become available for you to use again — no additional approvals needed.

One of the best things about a Kabbage line of credit is that you don’t have to use it immediately. With a traditional loan, you are still required to make regular payments, even if the funds sit untouched in your bank account. With a line of credit, though, you won’t have to make payments until you request a transfer of funds. This makes it a much better option for those “what if” scenarios you can’t predict. It is this flexibility that gives Kabbage a slight advantage over LoanBuilder.

Borrower Qualifications

Winner: Kabbage

LoanBuilder Kabbage

9 months

Time In Business

12 months

$42,000 per year

Minimum Sales

$50,000 per year

550

Minimum Credit Score

N/A

Even if you’ve been turned down for a small business loan in the past, you may still qualify for funding through LoanBuilder. Unlike traditional lenders, LoanBuilder has more flexible criteria for receiving one of its loans.

To qualify for a LoanBuilder loan, you must meet the following minimum requirements:

  • U.S.-based business in a qualifying industry
  • Time in business of at least 9 months
  • At least $42,000 in annual revenue
  • No active bankruptcies
  • Personal credit score of 550 or above

Please note that these are minimum requirements and that meeting these minimum requirements does not guarantee your approval.

During the application process, you can review your offers with no impact to your credit score. If you decide to move forward with applying for and accepting a loan, a hard credit pull will be initiated by LoanBuilder, which may have a small impact on your credit score.

While the requirements for a LoanBuilder loan are pretty simple, it’s even easier to qualify for a line of credit through Kabbage.

To qualify, the minimum requirements of Kabbage are:

  • In business for at least 1 year
  • At least $50,000 in annual revenue OR at least $4,200/month for the last 3 months

Kabbage looks at the performance of your business when determining whether to approve your line of credit. However, a hard pull will be performed to check your personal credit, although the lender has no credit score minimums to qualify.

Having no minimum credit score requirements really makes Kabbage stand out from other lenders. If you’ve had personal credit challenges, such as an active bankruptcy or a credit score that falls below 550, Kabbage is the better financial product for your business. However, if you have a shorter time in business or lower revenues but meet all credit requirements, you may want to consider giving LoanBuilder a shot.

Terms & Fees

Winner: LoanBuilder

LoanBuilder Kabbage

$5,000 – $500,000

Borrowing Amount

Up to $250,000

13 – 52 weeks

Term Length

6 or 12 months per draw

One-time fee of 2.9% – 18.72% of the borrowing amount

Borrowing Fee

1.5% – 10% of the borrowing amount per month

None

Other Fees

None

Now, it’s time to look at one of the most important factors to consider when borrowing money from any lender: how much is it going to cost? Before we break down the costs between LoanBuilder and Kabbage, note that these are alternative lenders that provide funds to borrowers with less-than-perfect credit. As such, these financial products have a higher cost of borrowing than traditional loans you’d receive from your bank or credit union.

A great feature about LoanBuilder loans is that just one fixed fee is charged, making it easy to understand the cost of borrowing. Fees range from 2.9% to 18.72% of the borrowing amount. The most creditworthy borrowers will be rewarded with the lowest fees. There are no origination fees or additional costs added to your loan.

LoanBuilder loans have terms between 13 to 52 weeks. Terms are based on the amount of your loan. Each week, payments are automatically withdrawn from your business bank account.

Kabbage’s fee structure is a little different. A fee is charged each month when there is a balance. Fees range from 1.5% to 10% and are based on the performance of your business. Your fees may change throughout your repayment period. For example, you may pay a 3% rate for the first 6 months, then pay just 1.25% for the remaining 6 months. This is just an example, and your actual fees may vary.

Kabbage has repayment terms of 6 or 12 months and are based on the amount you borrow. If you borrow less than $10,000, your repayment terms will be set at 6 months. If you borrow $10,000 or more, you can choose between terms of 6 or 12 months. Payments are withdrawn monthly through automatic drafts of your business bank account.

If you prefer to make weekly payments, LoanBuilder is the better choice between the two lenders. If you want a loan with a single fixed fee structure that’s easy to understand, LoanBuilder is also the better option. However, if you’d prefer to make one monthly payment, consider applying for a Kabbage line of credit.

The Application Process

Winner: Kabbage

Now that you know more about the features of LoanBuilder and Kabbage, you’re getting one step closer to choosing and applying for a financial product. Before you start filling out your personal information, though, let’s explore what to expect during the application process.

The first step to receiving a LoanBuilder loan is to fill out the online questionnaire. This questionnaire should only take about 5 to 10 minutes to complete. During this step, you will provide contact information, personal information, business details, and verify your identity.

Once you’ve completed the questionnaire, one of two things will occur: your application will be declined or you’ll receive an offer. If your application is turned down, LoanBuilder will provide you with further details and you’ll be eligible to reapply in 30 days. At this point, you’ll need to pursue other financing options. However, if you’ve received an offer, you’ll be able to adjust the duration of your loan and the borrowing amount to compare costs and select the terms that work best for your business.

At this point, your offer is just a pre-qualification. At any point in the process your application may be declined, and receiving an offer is not a guarantee of approval.

After you’ve selected your terms, you’ll be required to fill out a more comprehensive application. You’ll provide more information to the lender, and you’ll be required to submit documentation such as business bank statements. During this process, a hard check will be performed on your credit.

Once LoanBuilder has analyzed your business financials and personal credit history, your application will be approved or declined. If you’re approved, you’ll electronically sign a contract and the funds will typically be deposited into your business bank account the next business day.

You can also bypass the online system and contact a LoanBuilder Business Funding Expert through the lender’s toll-free number. This may be the best option if you have additional questions about LoanBuilder’s loans. However, the online process is typically much faster and easier for most business owners.

While it is possible to receive your funds just one business day after applying, most small business owners will receive funding within 2 to 7 days.

Kabbage’s application is also available online and can be completed in just minutes. When applying for a Kabbage line of credit, you’ll start by providing information about your business, such as your business name and phone number. During the first step, you’ll also input an email address and create a password. This information will serve as your login credentials for the Kabbage website and app.

Next, you’ll link your business accounts so Kabbage can evaluate your business revenue. You can connect your business bank account from institutions including PNC, TD Bank, Chase, and Bank of America, or you can link business services such as PayPal, Square, Etsy, or Amazon. After you’ve been approved, you can link multiple services and accounts to maximize your credit limit.

Finally, Kabbage will request personal information. This is very basic information including your legal name and home address. You’ll also provide your Social Security Number. At this stage, Kabbage will initiate a hard inquiry on your personal credit.

Once you’ve completed this step, you’ll receive an approval decision. If you’ve been approved, you’ll be taken to the Kabbage Dashboard. Through this dashboard, you can view your credit limit and immediately initiate your first transfer. You can withdraw your full credit limit, a portion of your credit limit, or wait until a later date to make a draw. On this dashboard, you’ll also be able to select your repayment terms and view your payment schedule.

After you make your first draw, funds will be sent to your business bank account immediately. You should then receive the funds within 1 to 3 business days.

Once you’re approved for a Kabbage line of credit, you can also request the Kabbage Card. You can use the Kabbage Card anywhere Visa cards are accepted. Simply swipe your card, and Kabbage will create a new loan with 6-month terms and the same fees as your other loans.

Both LoanBuilder and Kabbage simplify the loan application process. However, Kabbage is the clear winner in this round. Kabbage’s simple application process is hassle-free and has no documentation requirements. With Kabbage, you can receive an approval decision in just minutes and put your line of credit to work for your business immediately.

And The Winner Is …

LoanBuilder and Kabbage each offer benefits to small business owners. LoanBuilder loans provide short-term financing options for business owners that wouldn’t qualify for financing through traditional lenders. However, Kabbage stands out for a number of reasons.

The simple application process, flexibility, easy borrowing requirements, and lightning fast approvals are just a few of the benefits Kabbage offers to small business owners.

Which Is Best For Your Business?

LoanBuilder and Kabbage are similar in that they offer alternative financial solutions for business owners that may not qualify for other loans or financial products. However, there are distinct differences between the two. Determine how much you need to borrow, nail down how you plan to use the funds, and make your decision from there.

Choose LoanBuilder If…

  • You prefer to make smaller weekly payments rather than a larger monthly payment
  • You want one lump sum of money that can be repaid over time
  • You need to borrow more than $250,000

Review

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Choose Kabbage If…

  • You’d rather make monthly payments
  • You want a flexible line of credit that you can use when you need it
  • You want an instant approval with no hassles or paperwork

Review

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Final Thoughts

Kabbage and LoanBuilder both provide quick financial solutions for small business owners. However, don’t forget that this speed and convenience may come at a high cost. These are short-term options that may have higher fees than other financial products. Shop around with lenders, compare any offers you’ve received, consider other loans such as accounts receivable financing, and evaluate the cost of any loan you choose to accept.

By doing your homework, you can better ensure you’re making the most financially-savvy move for your small business.

If you’re still undecided, check out our other resources, including How To Get A Small Business Line Of Credit and The Business Owner’s Guide to Getting A Short-Term Loan.

The post LoanBuilder VS Kabbage: Which Lender Is Best For Your Business? appeared first on Merchant Maverick.

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WooCommerce VS Shopify

WooCommerce VS Shopify

✓

Pricing

Tie

Cloud-Based Or Locally-Installed

Tie

Tie

Specific Size Of Business

Tie

Hardware & Software Requirements

✓

Ease Of Use

✓

Tie

Features

Tie

Tie

Web Design

Tie
✓

Integrations & Add-Ons

✓

Payment Processing

Customer Service & Technical Support

✓

Tie

User Reviews

Tie

Security

✓

?

Final Verdict

?

Review

Visit Site

Review

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WooCommerce and Shopify are both wildly popular software systems that can help you build a thriving online store. Behind-the-scenes, however, the two platforms work quite differently from one another. Before we jump into comparing these juggernauts of the ecommerce software realm, let’s quickly get oriented on the basics of each.

At its core, Shopify (read our review) is a SaaS (software as a service) online shopping cart platform. Starting at just $9/month, you can upload products to an online catalog and sell them on Facebook, or post them on an existing website of your own via embeddable “buy” buttons. You can even sell your products in-person with the Shopify POS app. Then, beginning at $29/month, Shopify facilitates the creation and hosting of a fully-fledged ecommerce website.

By contrast, WooCommerce (read our review), is a free and open-source ecommerce shopping cart plugin that was created specifically for installation inside the WordPress dashboard. The WooCommerce plugin turns a WordPress website or blog into an ecommerce storefront. In other words, WooCommerce has no actual website-building capabilities of its own — WordPress handles that part.

To understand WooCommerce and how it works, you need a little familiarity with WordPress itself. To put it simply, WordPress is a website builder/CMS (content management system) that exists in two forms: WordPress.org and WordPress.com. WordPress.org is the self-hosted version, whereas WordPress.com uses the same basic software as WordPress.org, but provides web hosting for your site as part of its services. Either WordPress version can actually be combined with WooCommerce, but each setup has different implications for cost, site maintenance, etc.

For the purposes of our Shopify versus WooCommerce comparison, we’ll focus on combining WooCommerce with WordPress.org, the self-hosted option. Most ecommerce sellers are attracted to WooCommerce because they already use WordPress.org for their websites, and/or they like the WooCommerce plugin’s “free” price tag in conjunction with WordPress.org. While the WooCommerce plugin itself is always free, you can only add plugins to the dot-com version of WordPress if you’re on the $25/month WordPress.com subscription.

Now that you know the basics, we’ll break down the two platforms into their various components — usability, features, comprehensive cost, and more. It’s basically the same old compare-and-contrast essay we were all forced to write in middle school. The stakes are a bit higher with this particular essay, however. By the time we’re done, you’ll hopefully have a good sense of which ecommerce platform (if either) is best for your online business.

Pricing

Winner: WooCommerce

You might be tempted to think WooCommerce immediately takes this category without contest. After all, both the WooCommerce plugin and the WordPress.org software download are free, whereas Shopify automatically involves a monthly subscription. In reality, you need to invest in a few services (e.g., web hosting) to get a WooCommerce + WordPress.org ecommerce store off the ground. The bottom line is, WooCommerce may be a bit cheaper at the outset, but it’s not 100% free. Just wanted to clear that up first!

Before we run a more detailed cost comparison of the two platforms, here’s a quick look at why WooCommerce wins this category:

  • You can launch an online storefront up for well under $29/month, which is the starting price for a full online store with Shopify.
  • All WooCommerce features are included with the free plugin. You don’t automatically need to jump to higher subscription levels for additional features or staff accounts (you just may need some add-ons as time goes on). In other words, you pay only for exactly what you need.
  • Neither WordPress nor WooCommerce charge any additional transaction fees per sale, beyond those charged by your credit card processor. Shopify only waives its extra transaction fees (that start at 2%) if you use Shopify Payments as your credit card processor, and not everyone is eligible for Shopify Payments.

WooCommerce is the budget option of the two, but only if you have the skills to run your own website and don’t need to hire extra help for web development, site maintenance, security, backups, etc. If you do need lots of extra help, you could still end up paying more with WooCommerce + WordPress in the long run. Fair warning.

That’s the summary explanation. Now, here’s a more detailed pricing breakdown if you’re interested:

Shopify Pricing

  • Monthly Subscription Fee: $9 (no standalone storefront), $29, $79 or $299/month.
  • Domain: Unless you want your store URLs to end in “myshopify.com” (and you probably don’t), you’ll need to purchase or connect a custom domain. Domains from Shopify start at $11/year, or there are lots of third-party options.
  • Web Hosting: Included
  • SSL/TLS Certificate: Included
  • Additional Transaction Fees: 0.5%-2.0% depending on your Shopify subscription — unless you use the in-house payment processor (Shopify Payments), in which case these extra fees are waived. Note: these transaction fees are on top of regular credit card processing fees you must pay per sale with any processor.
  • Additional Cost: Primarily add-ons from the marketplace, and perhaps a one-time purchase of a premium theme.

WooCommerce + WordPress.org Pricing

  • Monthly Subscription Fee: None if you set up a free WordPress.org site. The WooCommerce plugin itself is always free.
  • Domain: Varies, but can start at less than a dollar per month from third-parties.
  • Web Hosting: Rock-bottom hosting can cost as low as around $3/month, but most people end up paying at least $10 per month, depending on the size and traffic levels of their stores.
  • SSL/TLS Certificate: Often included with your hosting or domain provider, but may need to be purchased separately. Basic certificates cost just a few dollars per month.
  • Additional Transaction Fees: None. Neither WooCommerce or WordPress charge a commission per sale.
  • Additional Cost: Add-ons, themes, and any web development and ongoing site maintenance if you’re not taking care of all that yourself.

Sample WooCommerce + WordPress.org hosting

Cloud-Based Or Locally-Installed

Winner: Tie

As we’ve mentioned, a major difference between Shopify and WooCommerce is that your Shopify subscription includes web hosting. No downloads or installations are required. To use WooCommerce, however, you first must download the WordPress.org software and install it on a web hosting server. Then, you add the WooCommerce plugin to that setup. Some web hosts do offer preloaded WordPress + WooCommerce packages or “one-click” installations.

Is the Shopify or WooCommerce method better? This one really comes down to personal preference and ability. The self-hosted setup of WooCommerce requires more hands-on involvement and skill from the user, but you may be just fine with that.

Specific Size Of Business

Winner: Tie

Both WooCommerce and Shopify are scalable, working for small to enterprise-level businesses.

Shopify has predetermined subscription brackets. While none of these put hard limits on your revenue, number of products, bandwidth, or storage, the implication is that you’ll increase your subscription as your store grows. The exception is the jump to Shopify Plus, which is required if your revenue reaches over $1 million per year. These plans cost a couple thousand a month to start, but it can be worth the investment in return for a service that’s tailored specifically for enterprise-level merchants.

You will also need to change your Shopify subscription as you add more staff accounts to your store. For example, the $29/month plan accommodates two admin seats in addition to the owner’s account, while the $299/month plan gives you 15 spots.

WooCommerce also has the potential to grow with your store, but the system is much more fluid. You have 100% flexibility to expand your operation (and perhaps employ more help with your site) in a piecemeal fashion, exactly when and how you see fit. As your site traffic increases, for example, you’ll want to adjust your hosting service accordingly to accommodate more bandwidth.

Hardware & Software Requirements

Winner: Shopify

As a fully-hosted, SaaS platform, Shopify takes care of nearly all technology requirements on your behalf. All you really need is an internet connection and an up-to-date web browser.

With WooCommerce and WordPress.org, most of the hardware and software requirements are functions of your hosting environment. Your server needs to support specific versions of PHP and MYSQL, for example. You’re responsible for staying on top of the evolving requirements for both WooCommerce and WordPress.org when you set up a WooCommerce store. This includes installing updates of both the Worpress.org and WooCommerce software as they are released. Plugins are available to help automate some of these steps for you, but you’re still ultimately responsible for finding and updating those plugins!

Because dealing with hardware and software issues with WooCommerce is more nuanced and requires more vigilance from the user than Shopify’s arrangement, we award Shopify the win.

Ease Of Use

Winner: Shopify

It’s hard to beat Shopify in terms of user-friendliness. Even compared with other all-in-one SaaS platforms designed with the complete ecommerce novice in mind, Shopify usually comes out on top. Open-source software like WooCommerce, on the other hand, is not generally known for its ease of use. You’re trading some degree of ease and simplicity for increased flexibility and customization.

It should be noted, however, that WooCommerce actually isn’t all that bad when it comes to ease of use, especially compared with most open-source solutions. For starters, many folks are already somewhat familiar with WordPress, which gives them a head start in navigating WooCommerce. (Keep in mind that the reverse will apply if you’re not already familiar with WordPress — you’ll be learning two systems at once.)  Once you get everything installed and up and running, day-to-day operations and manipulation of features are all pretty straightforward with WooCommerce.

Still, as we’ve already touched on, it can be quite overwhelming to stay on top of updates, extension compatibility, security issues, and the various tertiary systems underpinning your WooCommerce store. The cliché I’ve often read about WooCommerce is true — you have to be willing to get your hands dirty. Shopify is a much more plug-and-play, hands-free system.

WooCommerce offers to install some additional free plugins (like Jetpack and WooCommerce Services) from the get-go that help bring the system more in line with a fully-hosted solution like Shopify, but you still end up with a sort of cobbled-together setup that is more difficult to manage than an all-inclusive platform.

Have a look at our full Shopify and WooCommerce reviews if you’d like more information on the topic of ease-of-use, but I’ve included just a quick peek at the dashboards of each platform, as well as what it’s like to add a product.

Shopify Dashboard:

After signing up for a free 14-day trial, you’re taken to a clean and easy-to-navigate dashboard, with all your major functions in the left menu, and a few tips to get started in the center:

Shopify — Add A Product:

Shopify has a super-simple product interface. All fields are completed simply by scrolling down the page.

WooCommerce Dashboard:

Below I’ve shown a WordPress dashboard with WooCommerce already installed. If you look closely at the left menu, you’ll see that WooCommerce is just one item of many. I haven’t even expanded its own menu yet, nor the “Products” menu right below. In the center of the dashboard, I’m faced with additional suggested configurations and plugin choices. Do I need them all? Should I set them up now? Just “Dismiss?” It’s certainly all doable, but I find it bit cluttered and overwhelming to get started. Plus, this is all after I completed the setup wizard.

WooCommerce — Add A Product:

Once you scroll past the plugin suggestions, adding a product is quite straightforward with WooCommerce. If you’ve ever used WordPress, it’s a lot like creating a blog post. You’ll just need to configure ecommerce settings like price and inventory levels.

Another aspect to consider is that you won’t be able to test WooCommerce (like you can test Shopify with its free trial) unless you have a host and server already set up to install WordPress.org. Ease of use is always a bit subjective, and it’s hard to get a good feel for usability without testing the software yourself.

Features

Winner: Tie

Although one is software-as-a-service and the other is open-source, both Shopify and WooCommerce actually take a similar approach to features. The basic components to get a store launched and managed on a day-to-day basis are included with the software, but you’re expected to add a few extensions and integrations to either platform in order to tailor your store to your exact specifications.

With Shopify, this occasionally even means bumping up your subscription level, whereas with WooCommerce, features are always expanded through separate add-ons. WooCommerce has also been known to test new features by treating them as extensions first, and then eventually incorporating the features into the core offering once all the kinks are worked out by users. It’s really a community effort with Woo.

However you slice it, a common complaint about both platforms is that extra plugins can cause extra cost and extra headaches. Each system is kept as simple (yet functional) as can be from the outset, so that new users are not immediately overwhelmed by all that’s ultimately possible with these powerful software programs.

Let’s do a couple of quick sample feature comparisons. WooCommerce lets you add unlimited product variations, sell digital products, and incorporate product reviews without separate extensions, while Shopify requires (free) add-ons for each of these functions. Meanwhile, Shopify already includes abandoned cart recovery, invoice creation, and pre-integrated shipping software (Shopify Shipping). You’ll need extensions for these features in WooCommerce.

I’m tempted to give Shopify the win because I feel it comes with a slightly more well-rounded ecommerce feature set out-of-the-box without any plugins. And yet I also don’t want to overlook the enormous capability that comes with an entire WordPress.org ecosystem at your fingertips, nor dismiss the potential to customize each feature to your liking in an open-source environment. There are just too many factors at play to declare a clear winner here. The best advice I can give is to check for the features you need, as well as how they are obtained with each platform.

Web Design

Winner: Tie

I know this makes our compare-and-contrast essay less exciting, but it’s difficult to call a winner in this category as well. Each platform has advantages and disadvantages, and your own perception of what actually qualifies as an advantage or disadvantage will differ depending on your situation.

Below is a quick summary of each system’s approach to the design and customization of your storefront, along with some screenshots to help illustrate.

Shopify Overview:

  • 67 total templates, most with 2-4 style variations
  • 10 templates are free and supported by Shopify developers
  • Remaining third-party themes cost $140-$180
  • Built-in theme editor with drag-and-drop capability
  • Additional customization available with HTML, CSS, and Shopify’s own theme coding language (Liquid)

Shopify Theme Marketplace:

Shopify Theme Editor:

The Shopify theme editor consists of two elements: “Theme Settings” (for changing fonts, colors, etc.) and “Sections” (for dragging and dropping widget blocks up and down your pages).

WooCommerce Overview:

  • Access to thousands of free and commercial/supported WordPress.org themes (over 900 show up when filtering for “ecommerce” in the marketplace)
  • WooCommerce recommends its free “Storefront” theme for foolproof compatibility and web ticket support
  • 14 Storefront “child” themes available (two free, premium are $39 each)
  • Theme editor allows color changes and placement of widgets (but without drag-and-drop)
  • Storefront expansion bundle ($69) allows further customization without coding
  • Theme modification also possible with HTML and CSS (no proprietary coding language involved)
  • Add a free plugin (such as Elementor) for drag-and-drop design editing of WordPress.org pages without code
  • WordPress.org’s new Gutenberg editor provides additional non-coding customization for your overall WordPress site

WooCommerce Storefront Themes:

WooCommerce Theme Editor:

Below, I’ve shown the portion of the built-in theme editor where you can choose widget blocks for various spots within your pages.

So, how do WooCommerce and Shopify stack up when it comes to web design? Does Shopify win for having a drag-and-drop theme editor and font tweaking built-in, or does it lose for making you learn a proprietary coding language if you want to do further template customizations? The new Gutenberg block editor for WordPress enhances your theme editing capabilities without code, and lets you easily place WooCommerce products wherever you’d like within your larger WordPress site — so that’s another factor to consider going forward. It’s issues like these that make this category a toss-up depending on your point of view.

Integrations & Add-Ons

Winner: WooCommerce

Even though I’ve already spoiled the winner of this category, we need to highlight the fact that Shopify also has an amazing app marketplace with around 2500 integrations at your disposal. With Shopify, you have the opportunity to connect with many of the most popular third-party software platforms associated with ecommerce (think shipping, marketing, accounting, and the like). Thousands of developers have invested in creations for the Shopify extension ecosystem. In most ecommerce software battles, Shopify easily wins this category.

All that said, open-source systems like WooCommerce + WordPress.org typically offer more integration possibilities than even the most well-connected SaaS platforms. The whole point of an open-source platform is for users at large to jump head-on into the codebase to customize and build connections. In the open-source world, WordPress has a particularly enormous and active community of developers extending the platform. As a WooCommerce user, not only do you benefit from hundreds of WooCommerce-specific extensions, but also from the over 50,000 plugins available in the WordPress.org marketplace. Even Shopify can’t fully compete.

Some argue that because many WooCommerce integrations are one-time installations, it works out cheaper in the long run, or point out that more WooCommerce plugins are free. In truth, integrations can add to your monthly cost with either Shopify or WooCommerce — especially if your integrations are to third-party software platforms with their own monthly subscription fees (and not just one-off feature installs). Be cognizant of the potential for ballooning add-on costs with either system.

Payment Processing

Winner: WooCommerce

The complete freedom WooCommerce offers to choose a payment processor and associated pricing model that best suits your particular store’s needs is the reason we award the open-source plugin the win in this category.

While Shopify technically offers more pre-built payment integrations than WooCommerce in its respective marketplace, you are actually penalized with an extra 0.5% to 2.0% Shopify commission on every sale if you don’t select the in-house Shopify Payments option. This percentage — 2% for most merchants starting out — is applied on top of the fees charged by your payment gateway itself. Trust me, that extra 2% adds up fast.

Shopify Payments has its own advantages and disadvantages, but for starters, some merchants don’t even qualify to use this processor in the first place. While Shopify Payments definitely works well when it works, a lot of merchants end up stuck in no-man’s land when it comes to payment processing with Shopify. Caught between an extra fee and a hard place, as it were. (Insert your own, better metaphor here.)

While you may need to pay a one-time fee to integrate your favorite processor with WooCommerce (Stripe and PayPal come as free, built-in options), you can ultimately select an option that fits perfectly with your risk level, sales volume, and transaction size. You can also select for any customer support and feature requirements you may have for your payments system.

Customer Service & Technical Support

Winner: Shopify                                  

Both WooCommerce and WordPress have produced a plethora of self-help resources and documentation. Moreover, both boast thriving communities of developers and merchants working with the software who readily share problem-solving advice via forums. This is all very good and helpful.

WooCommerce can’t compete with Shopify when it comes to personalized support, however. A “help desk” is offered with WooCommerce from which you can submit a web ticket for specific purchased items, but a personal response is not always guaranteed.

Meanwhile, along with great self-help resources and community forums of its own, Shopify offers 24/7 phone, email, and chat avenues for contacting live representatives in real time. This is part of the all-inclusive nature of the Shopify platform, and part of the reason you pay that monthly subscription fee.

Now, this is not to say you couldn’t potentially receive personalized assistance from your hosting provider if your site goes down, for example. The quality and availability of this sort of third-party tech support will vary widely by company, though. Not to mention, things can get complicated very quickly regarding exactly who holds responsibility for whatever’s gone horribly wrong with your online store in the middle of the night. Once again, our point is that neither WooCommerce nor WordPress.org has a team of service reps standing by waiting for your distress call. You’re largely on your own.

User Reviews

Winner: Tie

Shopify and WooCommerce each have devoted followings of satisfied users, and both platforms tend to score very highly on user review websites. Shopify merchants love the user-friendliness of a powerful SaaS platform where most things are taken care of for you, while WooCommerce devotees appreciate that most things are not taken care of for you — it gives these users the flexibility and control they desire.

Of course, neither ecommerce platform is perfect. Here are a few of the complaints that arise most often:

Shopify

  • Extra transaction fees when not using Shopify Payments
  • Costly add-ons
  • Poor customer support
  • Frustration with Shopify Payments

WooCommerce

  • Costly add-ons
  • Lack of personal customer support
  • Steep learning curve
  • Technical difficulties (i.e., extensions, themes, updates, etc.)

I’m still calling this one a draw. One platform does not dramatically outshine the other when it comes to real user feedback.

Security

Winner: Shopify

Shopify wins this category because all Shopify stores are automatically PCI compliant out-of-the-box and come with a built-in SSL certificate. With WooCommerce, your store’s security falls more directly upon your own shoulders. You’re ultimately responsible for choosing a secure and PCI-compliant web host and payment gateway, obtaining an SSL certificate, performing Woodpress.org and WooCommerce plugin updates, and staying on top of the latest security patches. As WooCommerce reminds you in its own documentation, “a given WooCommerce site is overall exactly as secure as the WordPress installation itself.”

There’s no doubt that a WooCommerce store can be just as secure in as a Shopify store, as long as all the right pieces are in place and carefully managed. There’s just a higher chance for site security to go (horribly) awry due to mismanagement or innocent mistakes.

Final Verdict

Winner: Shopify

 

This was a tight race, folks. Shopify and WooCommerce have both earned their popularity in the ecommerce world, even if for different reasons and for different segments of online sellers. Based on our experience, as well as our sense of the needs of our Merchant Maverick readership overall, we’re still more likely to recommend Shopify over WooCommerce.

The majority of online sellers will have an easier time with Shopify right out-of-the-box. Shopify is much more “foolproof” and all-inclusive than WooCommerce, with technical aspects like installation, hosting, updates, and security all handled on your behalf. This allows you to expand your focus beyond just building and maintaining your store, even as an absolute web-beginner. The opportunity for 24/7 personalized customer support with Shopify is also a huge factor in our verdict.

All Shopify gushing aside, we firmly maintain that this SaaS platform is not a magic bullet solution for all online merchants, and WooCommerce may be just the alternative you seek. As an open-source software plugin combined with WordPress.org’s vast ecosystem, WooCommerce offers a degree of ownership, control, and flexibility that isn’t possible with Shopify. It’s the perfect platform for the technically-inclined among us who have the time and skill to tinker with code, updates, and integrations to customize their stores at a finely-tuned pace. The freedom to select your own web host, as well as a payment processor that works best for your specific country and risk level without financial penalty (hello, Shopify’s extra transaction fees) is also a big draw for a lot of business owners using WooCommerce. The power truly is in your hands if you go this route.

As the old adage goes, however: with great power comes great responsibility. If you choose an open-source platform like WooCommerce, you should definitely heed this nugget of graphic novel-based wisdom.

Have you worked with Shopify or WooCommerce? Let us know if the comments — particularly if you have experience with both!

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MasterCard SecureCode: What It Is And How To Use It

You may have seen mentions of “SecureCode” around, on TV and elsewhere. After all, when Hugh Jackman (aka Wolverine) stands on a scenic rooftop and asks if we know that SecureCode is a more secure way to pay, it’s hard to ignore.

Mastercard SecureCode

But what the heck is SecureCode?

Simple! MasterCard’s SecureCode is a private code known only to the account holder that provides an additional layer of security for online purchases. The program is free for consumers as well as merchants. 

The Claim:

MasterCard SecureCode ostensibly comes with these benefits:

  • Reducing fraud
  • Guaranteeing e-commerce payments
  • Reduced chargeback risk to merchant
  • Improved cardholder confidence 

With online payment security an ever-present concerns for both online shoppers and merchants alike, these Mastercard SecureCode claims deserve a closer look. Keep in mind that both the merchant and the cardholder need to opt into the program for either party to benefit from it. 

Whether you are a cardholder who is thinking about setting up a SecureCode yourself, or you are a curious business owner who wants to know how you can improve security for online purchases, read on for an explanation of how SecureCard works and whether it’s right for you!

How SecureCode Works For Online Shoppers

no annual fee credit card

The basic concept of MasterCard SecureCode is very similar to using a PIN to process a debit payment at the checkout. Just like during a debit transaction, where the PIN is kept private, the SecureCode should always remain private to the account holder.

When your customer fills their cart with your wares and begins the checkout process, they will also enter their MasterCard SecureCode to verify their identity as the cardholder. But there is one major caveat. Instead of sharing their SecureCode directly with you, the merchant, an issuer-provided inline window appears with a personal greeting that is only known by the cardholder. If the customer recognizes their personal greeting, they enter their SecureCode. In just a few seconds, the issuer verifies that the true cardholder is making the transaction and the checkout process continues. 

How Can Cardholder Enroll?

MasterCard customers who have cards issued from participating financial institutions can enroll in SecureCard and register any of their debit or credit cards. To find out if you can enroll, can contact your institution or view the list of participating financial institutions updated by MasterCard. 

MasterCard SecureCode For Businesses

If you are a merchant wondering why you should bother offering SecureCode, it makes sense to take the time to understand more about it. From a merchant standpoint, MasterCard SecureCode can give your current and future customers greater confidence and security while shopping online with you. This extra layer of authentication and security also protects you from fraudulent use and some types of chargebacks (more on that below).

It is important to note that if you decide to go with SecureCode, it’s not mandatory for all of your customers to enter in a code to finish the sale with you. Authentication with a personal code is only required for customers who have already signed up for SecureCode. Whenever a customer connects a card with SecureCode and the merchant is also signed up, the SecureCode is required, however. But if you decide to offer SecureCode and your customer isn’t signed up, they’ll enter their credit card information just like they would with any other sale, and it is processed as usual. 

For SecureCode transactions, merchants can gain protection from unauthorized cardholder chargebacks, and customers who have activated SecureCode get more protection, too.

How To Offer MasterCard SecureCode

If you are a business owner who is ready to get this new layer of security live on your site, here is what you need to know: Your transaction processor may already support the MasterCard SecureCode program, so give them a call first and see if they can get you started.

The setup process is fairly simple if you’re used to maintaining your website yourself, and involves installing a plug-in to your site. After everything is up and running successfully, MasterCard also provides you with a logo you can put on your site to identify your program involvement.

It’s also worth mentioning that many processing companies, including Stripe, offer an extra layer of authentication through 3D Secure  (sometimes abbreviated as 3DS). 3D Secure is a security protocol that bundles MasterCard SecureCode with the Visa equivalent, Verified by Visa. It gets its name from the fact that a third party, the card network, is involved in verifying the credit card purchase. In some regions, 3D Secure authentication also includes American Express SafeKey. Your merchant account provider may offer 3DS authentication as part of its service, though you might also need to configure this option in your payment options if it isn’t enabled by default.

How SecureCode Reduces Fraud & Guarantee eCommerce Payments

image of man in a hoodie in front of a laptop, overlaid with lines of code

MasterCard claims that SecureCode helps reduce fraud and guarantees ecommerce payments. Let’s say a hacker manages to lift someone’s card number from a skimming device or a compromised website and they post it on the Dark Web. Another scammer buys it and then tries to make a purchase with the card details. A CVV check (another common ecommerce security feature) might stop some transactions, but CVV checks aren’t universally used in ecommerce. Plus, we often give away our CVVs when we place an order over the phone (Chinese takeout, anyone?) — if that business has a shady employee who lifts customers’ numbers, they now also have your CVV. And of course, if a fraudster does get a physical card, they have everything they need to start making purchases.

SecureCode prevents unauthorized use in these types of situations because unlike a credit card number, SecureCode isn’t entered on a business’ site or shared over the phone. The SecureCode acts like a PIN between the issuing credit card company and the customer. If the person using the card doesn’t provide the correct code, or doesn’t enter any code, the transaction can’t go through. 

Keep in mind that SecureCode doesn’t take the place of authorization approval; it is simply an additional authentication step. Every card-not-present transaction, no matter how small, will be authorized by the issuing bank.

How SecureCode Reduces Chargebacks

The Complete Guide to Preventing and Winning Chargebacks

We’ve already talked about how SecureCode protects against unauthorized card use. It also provides protection against friendly fraud via chargebacks. 

For a business owner, a chargeback is a loss of revenue (both in terms of the money refunded to the customer and the fees charged by the processor for the chargeback), and too many chargebacks can negatively affect your standing with your credit card processing company. In essence, a chargeback happens whenever a customer files a dispute with their bank, saying that a charge was not authorized by the customer. 

Despite the somewhat innocent-sounding name, friendly fraud can cause a lot of grief. Friendly fraud refers to a type of chargeback that happens when a customer falsely claims they didn’t make a purchase in order to get their money back. They may have changed their mind or filed a chargeback claim directly with their credit card company instead of returning the product to you. Whether the customer’s intent was purposely malicious or not, these types of chargeback claims can be a big problem for any online retailer. They actually account for the majority of chargebacks.

If you’re a merchant, the great thing about SecureCode’s extra authentication step is that it’s much harder for a customer to claim they never ordered from you if they authenticated their purchase with their private code. You can make a stronger case when it comes to proving your customer actually made the purchase, so much of the liability in these types of “friendly fraud” or chargeback cases shifts away from you and to the user and their bank — which means you don’t lose out on the money from that purchase. 

If you want to read up a little bit more on chargebacks and what you can do as an online merchant, visit our post, The Complete Guide to Preventing and Winning Chargebacks.

How SecureCode Improves Cardholder Confidence

blogging

In the past, MasterCard cardholders and merchants alike had some issues with the user experience because SecureCode used a pop-up window. Business owners were rightfully concerned because customers are naturally suspicious of pop-ups. The last thing any business owner wants when they try to improve security is also to increase cart abandonment. MasterCard took these concerns to heart and improved the experience by switching to an inline window rather than a pop-up for the SecureCode authentication. 

Now, the streamlined experience ensures that the entire checkout and verification process is embedded directly in the merchant site. When you offer SecureCode on your site, it gives your shoppers an added layer of security, too. Especially for smaller businesses, having this added layer of security helps to legitimize your site and improve overall confidence. 

More International Buying & Selling Opportunities

As if adding security in an insecure world wasn’t enough, the MasterCard SecureCode program may help you expand your business internationally! When you add SecureCode to your website checkout, you can start processing payments from customers overseas who use  Maestro cards (owned by MasterCard). This factor can potentially help you expand to Europe and other countries abroad where shoppers use debit cards much more frequently than credit. In countries like Germany, Maestro has replaced the Eurocheque system. All of this gives you extra reach when it comes to processing payments.  

Should I Use SecureCode On My Site?

Now more than ever, payment security is the subject of much focus and debate. While customers expect things to be streamlined and convenient, the truth is that they also expect their data to be secure. In a world where the cost of fraud continues to increase, adding solutions to protect everyone involved makes sense— especially when they involve no extra costs for you or your customers. While it may take a few extra moments for a customer to enter in their personal code, authenticating their identity can prevent fraud and save everyone a lot of heartaches (and headaches).

The truth is that merchants are the ones that shoulder the cost of chargebacks and fraud, so finding better solutions to protect yourself, your time, and your sanity is a very smart business move. However, not all eCommerce processors are the same. Some have robust solutions that keep up with the current threats, and some lag behind. I encourage you to take the time to find out what your merchant account is doing for you in regards to security, and if you don’t love it, find something that is better. We have a plethora of resources for you here at Merchant Maverick.

If you want to find a better payment processor that specializes in online businesses, we recommend checking out our post, How To Choose An eCommerce Merchant Account.

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What Is PayPal Credit & How Does It Work?

It can be a challenge to keep up with all the different payment services PayPal offers because there are so dang many, and new ones seem to come out all the time. PayPal services also frequently change names as they are rebranded or acquired from other companies.

One PayPal service you might be curious about, as it has generated some buzz lately, is PayPal Credit, formerly Bill Me Later. Read on to learn about this PayPal payment option.

What Is PayPal Credit?

paypal credit logo

PayPal Credit is a line of credit issued by Synchrony Bank. This virtual line of credit functions similarly to a credit card, letting you pay for online purchases in installments, rather than upfront in-full.  Approved PayPal users can use PayPal Credit as a payment option whenever they check out using PayPal, either from a website or at a brick-and-mortar store that accepts PayPal.

Note that PayPal Credit is not the same thing as a PayPal debit or credit card.

How PayPal Credit Works

Best PayPal Alternatives Image

PayPal Credit is easy to apply for and start using. But it’s important that you understand a little bit about how PayPal Credit works before you start using this service.

Applying For PayPal Credit

Any PayPal user can apply for PayPal Credit. If you don’t have a PayPal account already, you will be prompted to create one when applying for PayPal Credit. The application is quick and simple: you only have to supply your date of birth, your income after taxes, and the last 4 digits of your Social Security number. Be warned that PayPal will do a hard credit pull, which might ding your credit score a few points. Typically within seconds, you’ll have your approval answer.

PayPal doesn’t have any clearly stated applicant criteria, but applicants with poor credit or limited credit history may be declined.

Once you have been approved and accept the terms of use, PayPal will give you a credit limit of at least $250. PayPal will periodically review your account and may increase or decrease your credit limit.

Note that PayPal Credit is the new name for Bill Me Later, which has been around for more than 10 years. If you already had a Bill Me Later account, you now have a PayPal Credit account.

Using PayPal Credit

Once you have your PayPal Credit account set up, you can use PayPal Credit in conjunction with your PayPal account anywhere PayPal is accepted. You simply need to set up PayPal Credit as your default “preferred” payment option for PayPal, or select PayPal Credit as your payment option when checking out. Some merchants may also prompt you to pay using PayPal Credit instead of your regular PayPal preferred payment option (which is usually linked to a credit or debit card, or your bank account).

You can manage your PayPal Credit settings using a web browser or with the PayPal app. You can also make payments on your balance and see your current credit limit — just like you would for any credit card app you might already use.

As part of its “Cash Advance” feature, it’s possible to use PayPal Credit to send money to someone online using the Send Money tab, the same way you can with any other PayPal Wallet option. You cannot use this feature to send a cash advance to yourself. However, you can receive a cash advance directly from PayPal Credit if you are a furloughed federal government worker: in January 2019, PayPal announced a program whereby PayPal will extend a one-time 0%-interest cash advance of up to $500 to furloughed federal workers via PayPal Credit.

PayPal Credit Terms & Conditions

PayPal Credit requires monthly payments on your balance. You can make the minimum payment at the end of the month, make payments in any other amount whenever you like, or pay your balance in full at any time, similar to a credit card. For new accounts, PayPal Credit has a variable APR of 25.99% on standard purchases and cash advances (at the time of publishing). Being variable, the APR will fluctuate with the Prime interest rate.

PayPal Credit is currently promoting a 6-months special financing offer, in which you won’t have to pay any interest on purchases of $99 or higher for 6 months. You will be charged interest if you don’t pay the balance in full within 6 months.

To send money (Cash Advance) with PayPal Credit, PayPal will charge a flat fee of 2.9% + $.30 US dollars per transaction. This is the same fee you pay when you use a debit or credit card to send money through PayPal.

To qualify for the 0%-interest cash advance for federal government workers, you’ll need to be a U.S. federal government employee with a PayPal Credit account in good standing. This promotion will end once the government reopens and furloughed workers receive their first paycheck, or the $25 million PayPal has set aside for the program has been exhausted.

PayPal Credit Pros & Cons

Pros of PayPal Credit

  • Fast & Convenient: You can use PayPal Credit to make a purchase as soon as you’re approved (usually within seconds). In comparison, you might have to wait a week or longer for a credit card you’ve applied for to come in the mail.
  • Use Anywhere PayPal Is Accepted: This includes thousands of websites and a growing number of brick-and-mortar stores as well.
  • PayPal Purchase Protection: If your online purchase doesn’t match the description or doesn’t arrive, PayPal will refund the full purchase price plus original shipping costs.

Cons of PayPal Credit

  • Low Credit Limit: Unlike a traditional line of credit, PayPal Credit limits are comparable to or even lower than most credit card limits, with most users’ limits ranging from just $250 to a few thousand dollars.
  • Hard Credit Inquiry: The hard credit pull during the application process will likely ding your score several points.
  • Won’t Help You Build Credit: Unlike a credit card company, PayPal Credit does not report your payment activity (positive or negative) to credit agencies.
  • High APR: You can probably get a better APR with a credit card, especially if you have good credit.
  • Risk Of Overspending: You may be tempted to spend more with PayPal Credit than you would with regular PayPal.*

*Note that this pro/con list is from a PayPal Credit user’s point of view. From a merchant’s point of view, there are no major downsides to PayPal Credit, other than the downsides of using PayPal in general (namely, the high transaction fees). However, a potential upside of advertising promotional financing with PayPal Credit as a merchant that already offers PayPal as a checkout option is that PayPal users typically spend more and make larger purchases with PayPal Credit.

FAQ

Can Businesses Use PayPal Credit?

Short Answer:

Yes, your customers can pay using PayPal Credit as long as your business accepts PayPal payments. But when it comes to using PayPal Credit for business purchases, there are better options available.

Long answer:

Businesses that accept PayPal at checkout can offer customers the option to pay with PayPal Credit, either online or in-store. If you accept PayPal as a payment form, PayPal Credit is already available to customers who check out with PayPal at no additional cost to your business.

When a customer makes a purchase using PayPal Credit, PayPal deposits the full amount of the purchase into your account just as with any other PayPal transaction, so there is no added risk to you as a PayPal merchant; accepting a PayPal Credit payment is the same as accepting any other PayPal payment. However, if you make PayPal sales online, you can promote PayPal Credit financing options on your website, which might be of added benefit to businesses that sell large-ticket items online.

How Do You Get Paid With PayPal Credit?

There are multiple ways you can allow customers to pay with PayPal Credit:

  • PayPal Credit At POS: Some, but not all, point of sale systems allow you to accept in-person PayPal payments. Some examples of PayPal-friendly point of sales include Shopkeep, Vend, and of course PayPal’s own PayPal Here.
  • PayPal Credit On Your Website: If you allow customers to check out with PayPal on your website, PayPal will give you promotional banners that let you advertise financing options to your customers. You can also include a PayPal Credit button to prompt customers who don’t have PPC set up as their preferred PayPal payment method to pay using PayPal Credit.
  • PayPal Credit With Mobile Payments: If you accept Google Pay or Apple Pay at your point of sale, and the customer has PayPal with PayPal Credit set up as their default payment method, customers might pay using PayPal Credit using their smartphone.
  • PayPal Credit With PayPal Invoice: When you send a customer a PayPal Invoice, your customer may use PayPal Credit to pay that invoice.

Of course, only customers who have been approved by PayPal Credit may pay with PayPal Credit, and then only up to the amount of their credit limit. Customers who have set up PayPal Credit as their preferred PayPal payment option will automatically pay for all their PayPal purchases using Credit; customers can also choose PayPal Credit in their PayPal Wallet for individual transactions when presented with this option at checkout.

How Can You Use PayPal Credit For Business Purchases?

Businesses might also potentially use PayPal Credit to make business purchases from merchants or vendors that accept PayPal. However, because it is geared toward consumers, credit limits on this line of credit are on the low side and APRs are on the high side. Unless you have a very small enterprise, you are better off getting a traditional line of credit or business credit card to make business purchases.

As another alternative to making business purchases with PayPal Credit, PayPal also offers small business loans ranging from $5,000 to $500,000 with LoanBuilder: A PayPal Service.

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Final Thoughts

PayPal Credit can be a convenient option to have in your virtual wallet if you want to the ability to make purchases with PayPal even when you don’t yet have the funds to do so—for example, eBay businesses frequently make purchases using PayPal. Or, you might use PayPal Credit to finance a large one-time purchase such as a refrigerator.

You can also use PayPal Credit to send someone money, even if you don’t have that money in your account. If you own a business and already accept PayPal, promoting PayPal Credit as an online checkout option could result in higher purchases.

However, using PayPal Credit not an effective way to build credit, as PayPal doesn’t report your payments to credit agencies. Plus, you will be charged heavy fees if you don’t pay off your balance at the end of each month (or the end of the 6-month promotional financing period). If you are looking for a larger line of credit to use for your business, you might want to look at our top-rated business line of credit providers. Or if you’re looking for a more flexible credit option with a lower APR, check out this comparison of our favorite credit cards.

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Kabbage VS Fundbox: Which Lender Is Best For Your Small Business?

In the past, getting a business loan was a hassle. Strict requirements, in-person visits to a bank or lending institution, and weeks of waiting could result in a low-cost, long-term loan option … or you could go through the process only to receive a big fat “NO.”

With the rise of the internet has come the emergence of alternative lenders – lenders with easy online application processes, fast approvals, and low requirements.

Kabbage and Fundbox are two leading alternative lenders, providing small business owners with the funding they need to operate or expand their businesses. While the two have similar product offerings, there are a few significant differences. In this post, we’ll compare the two side-by-side, breaking down the features of each to help you decide which is best for your business.

Services Offered

Winner: Fundbox

Through Kabbage, you can receive a flexible line of credit to cover business expenses. Kabbage has one of the highest borrowing limits among alternative lenders that offer lines of credit, providing qualified borrowers with $2,000 to $250,000. Your line is determined by the performance of your business.

Fundbox also offers lines of credit but with lower borrowing limits. With Fundbox Direct Draw, the lender’s traditional line of credit, you can be approved for a maximum of $100,000. Like Kabbage, Fundbox’s lines of credits are based on the performance of your business.

If you have unpaid invoices, you can take advantage of Fundbox Credit, the lender’s accounts receivables financing service. You can receive a line of credit up to $100,000 based on your unpaid invoices. You can only get one financial product through Fundbox, so you can qualify using either your unpaid invoices or your bank statements. We’ll go into borrower qualifications and the application process in more detail later in this article.

With both lenders, there are no restrictions on how you use your funds. You can use your lines of credit to purchase inventory or supplies, cover payroll, pay operational expenses, expand your business, or take care of an emergency.

While both lenders offer similar products, Fundbox comes out on top because you can also use your accounts receivables to qualify for a line of credit.

Borrower Qualifications

Winner: Fundbox

Kabbage Fundbox

12 months

Time In Business

N/A

$50,000 per year

Minimum Sales

$50,000 per year

N/A

Minimum Credit Score

N/A

N/A

Other

At least 2-3 months using compatible software/services

Qualifying for Kabbage is easy for most small business owners. To qualify, you must meet two minimum requirements:

  • At least 12 months in business
  • At least $50,000 in annual revenue OR at least $4,200/month for the last 3 months

Your personal credit score is not a consideration, as Kabbage bases approvals on business performance. However, a hard pull on your credit will be initiated during the application process.

Qualification for Fundbox is based on the product you select. For the Fundbox Direct Draw line of credit, you must meet the following requirements:

  • A business checking account
  • At least $50,000 in annual revenue
  • At least 3 months of transactions in a business bank account

To qualify for Fundbox Credit invoice financing, requirements are similar. You must have:

  • A business checking account
  • At least $50,000 in annual revenue
  • At least 2 months of activity in supported accounting software

With Fundbox’s invoice financing, you’ll link your accounting software to determine if you qualify. Fundbox currently supports 10 accounting software programs including QuickBooks Desktop, QuickBooks Online, Ebility, Harvest, InvoiceASAP, Jobber, Kashoo, FreshBooks, Zoho, and Xero.

It’s easy to see that both Kabbage and Fundbox have more lenient requirements than other lenders. However, Fundbox has the edge in this round because it doesn’t have time in business requirement. With Kabbage, you must be in business for at least a year. With Fundbox, newer businesses can qualify for funding provided they meet all other requirements.

Terms & Fees

Winner: Fundbox

Kabbage Fundbox

Up to $250,000

Borrowing Amount

Up to $100,000

6 or 12 months

Draw Term Length

12 or 24 weeks

1.5% – 10% of the borrowing amount per month

Borrowing Fee

Starts at 4.66%

None

Other Fees

None

Now, let’s explore one of the most important factors of small business financing: how much does it cost? One area where both Kabbage and Fundbox are similar is that both lenders offer transparent fee structures. However, when you break down the terms and fees of each, there are several notable differences.

Kabbage offers terms of 6 months for draws under $10,000. For draws of $10,000 or more, you can select from terms of 6 or 12 months. Through Kabbage, you make monthly payments that apply to your principal plus fees.

Kabbage charges a monthly fee each month you have a balance. Fees range from 1.5% to 10% of the total amount of the loan and are based on the performance of your business. Your fee rate may be lower as you pay off your loan. For example, if you have a 12-month loan, you may pay 3% for the first six months and 1.25% for the last six months. Of course, this is just an example, and you won’t know what rates you’ll receive until you apply for a line of credit.

If you pay your loan off early, there are no prepayment penalties and you will eliminate any remaining fees, so this is a good way to save money.

With each draw, you will receive a breakdown of your loan, including the total amount of fees and the amount of each monthly payment. Your loan documents will include the SmartBox Capital Comparison Tool that will provide information including the disbursement amount, repayment amount, terms, and APR.

Other than the monthly fee, there are no hidden fees or additional costs to make a draw from your line of credit. If you do not use your funds, you will not pay any fees.

Fundbox has repayment terms of 12 weeks or 24 weeks. Weekly payments are applied to your principal plus fees.

Fees and terms are the same for Fundbox Credit and Direct Draw. Fees start at 4.66% of the draw amount and are based on the performance of your business. If you pay your balance off early, all remaining fees are waived.

You will be able to view your fees and repayment schedule after you’re approved for a Fundbox line of credit and initiate a draw. Your borrowing amount plus fees are equally distributed, so you will pay the same amount each week.

Breaking down the APR of each lender makes it a little easier to compare. Fundbox APRs are between 13% to 60%, while Kabbage’s APRs are between 20% and 80%. Based on these numbers, Fundbox appears to be the less expensive option, but you may find Kabbage to be more affordable (your own personalized rates are based on the performance of your business).

The Application Process

Winner: Kabbage

Kabbage and Fundbox have similar application processes, but let’s break down each so you know exactly what to expect.

It’s possible to apply for and receive a Kabbage line of credit in just minutes with the lender’s easy online application. Once you’ve determined that you meet all minimum requirements, you can start the application. This requires basic information about your business including your business name, address, and phone number. At the beginning of the application process, you’ll also enter your email address and create a password that you’ll use to log into your account.

Next, you’ll connect your business accounts to determine 1) if you qualify for a line of credit and 2) your credit limit if you’re approved. You can securely link your bank account from institutions including US Bank, Citi, USAA, PNC, Chase, and Bank of America. You can also link to other business services with revenue transactions, such as PayPal, Square, eBay, Stripe, or Sage.

Finally, you will be required to provide Kabbage with personal information, including your Social Security Number. At this point in the process, a hard pull on your credit will be performed.

Once you’ve submitted your information, you’ll receive a notification of your approval status in just minutes. If approved, you’ll be taken to your Kabbage Dashboard, where you can view your available credit facility and initiate draws. You can make a draw up to and including your credit limit immediately, but there is no obligation to withdraw funds at this time.

After you’re approved, you can also link additional business bank accounts and services to qualify for a higher line of credit. Your linked business bank account will be used for automatic drafts once you have taken funds.

One final thing to note about Kabbage is that you can be approved for a line of credit of up to $150,000 on the spot. Qualifying for funding up to $250,000 requires a manual review.

After you’ve been approved for a Kabbage line of credit, you can request the Kabbage Card. If you request funds to be sent to your bank account, you’ll see the money in 1 to 3 business days. However, the Kabbage Card gives you immediate access to your line of credit.

The Kabbage Card can be used anywhere Visa cards are accepted. Simply swipe your card to make your purchase, and Kabbage will create a loan with the same rates and terms as a traditional line of credit draw. There are no additional fees, and anyone that qualifies for a line of credit can request a Kabbage Card at no cost.

Fundbox has a very similar application process. Start by signing up on the website with your name, business email, phone number, and a password. You will also be required to select the annual revenue of your business.

The next step involves linking an account so that the lender can analyze the performance of your business. If you have invoices, you can link your accounting software. If you do not invoice customers, you can qualify for a line of credit by linking your business bank account.

During the application process, a soft pull on your credit is performed. This will not affect your credit score. However, if you are approved for a line of credit and take funds, a hard pull may be performed.

Most borrowers will know within minutes if they are approved and the amount of the credit line. Once approved, you’ll be able to request funds immediately. Those funds will hit your bank account within 1 to 3 business days. Your linked bank account will be used for automatic drafts of your weekly payments.

Kabbage and Fundbox have similar application processes. Both are automated, easy, and can provide you with instant approvals. In this category, the win came down to the Kabbage Card. The ability to easily sign up for the Kabbage Card, which gives you access to your credit line anywhere Visa is accepted, gives Kabbage the edge.

And The Overall Winner Is …

Although Kabbage and Fundbox have similar product offerings, Fundbox comes out on top. Its relaxed borrower qualifications, invoice financing service, and competitive rates and terms make it a top choice for many small business owners.

However, you may find that Kabbage’s monthly payments, longer repayment terms, and access to fast cash with the Kabbage Card are more suitable for your small business.

Which Is Best For Your Business?

While Kabbage and Fundbox appear similar on the surface, there are a few clear differences that can help you make your choice between the two. The biggest differences to note include:

  • Kabbage payments are made monthly, while Fundbox has a weekly repayment schedule
  • Maximum borrowing limits
  • Time in business requirements
  • You can use your unpaid invoices to qualify for a line of credit through Fundbox

Choose Kabbage If…

  • You need a line of credit that exceeds $100,000
  • You feel more comfortable making monthly payments
  • You’ve been in business for at least one year
  • You want payment terms up to 12 months
  • You want to make instant purchases using the Kabbage Card

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Choose Fundbox If…

  • You’d prefer to make weekly payments instead of one larger monthly payment
  • You’ve been in business for less than one year
  • You want to use your unpaid invoices to receive a line of credit

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Final Thoughts

Kabbage and Fundbox both offer value to small business owners that may not qualify for traditional business financing options. Although the cost of borrowing may be higher than other financial products, the speed of approvals and transfers, the ease of application, and the low borrowing requirements may be worth the extra expense for the business owner seeking fast funding.

Still on the fence? Learn more about lines of credit and accounts receivable financing to determine which — if either — is the best financial option for your business.

The post Kabbage VS Fundbox: Which Lender Is Best For Your Small Business? appeared first on Merchant Maverick.

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