How To Find Out If You Are Prequalified For A Credit Card

So you’ve decided your business needs a new credit card. Unfortunately, you’ve heard that the credit card application process can negatively impact your credit score, and since credit history can impact your business’s ability to make financial moves in the future, you don’t want to apply for a card unless you’re sure you’ll be approved.

Luckily, many issuers offer checks to see if you’re prequalified for their credit card offers. This will give you a chance to see if you should go through with applying for a card. Once you’re prequalified, you’ll have the confidence needed to go through the full-on application process.

For everything you need to know about prequalification, keep reading. We’ve got you covered!

What Does “Prequalified” Mean?

Prequalified means that you’ve been selected as potentially “qualified” by a credit card issuer for a particular card offer. Usually, the issuer has done a soft pull on your credit score and found that you’ve met the certain criteria necessary to qualify for the credit card. This soft pull should not affect your credit score.

In some cases, you may also be deemed prequalified because an issuer bought your information via a marketing list from a credit bureau. In this case, the issuer may check if you are on their list to see if you are prequalified.

If you are prequalified for a credit card, you have an 80% to 90% chance of actually qualifying for the card should you go through the application process. It’s worth adding that you don’t need to be prequalified in order to apply for a card—you can still be approved without prequalification. This process just gives you extra confidence before actually applying.

Note that by actually applying for a card, the issuer will likely perform a hard pull on your credit history. This will show up on your credit history. In most cases, a hard pull won’t be a problem long-term because having a credit card should only help your credit into the future (as long as you follow the best practices for a credit card). However, you’ll want to avoid applying for too many cards in quick succession as frequent hard pulls in a short span may lower your credit score.

How To Get Prequalified For A Credit Card

There are several ways to get prequalified for a credit card. Here are the most common:

  • Online: By far, the best option is to go to an issuer’s site and check for prequalification via their own checking tools. In most cases, this will take only a few minutes. Plus, you’ll be able to see if you qualify for a card offered by an issuer you already like. In addition, some of our favorite credit scoring-checking websites also have prequalification tools readily available for you to use.
  • By mail: Issuers frequently send out credit card offers to people who have met their prequalification criteria already. As such, if you’re looking for your next card, simply opening up your mail might be a quick and easy option. Of course, this method doesn’t offer much flexibility when it comes to what you’re preapproved for.
  • In-Person: Many physical bank branches offer prequalification checks. Note that you may already need to be a member of the bank beforehand, however. Additionally, you might be able to go to a retail store and find out during check-out if you’re prequalified for that store’s co-branded credit card.

Most major credit card issuers let anyone check online for prequalification:

  • American Express
  • Bank of America
  • Capital One
  • Chase
  • Citibank
  • Credit One
  • Discover
  • U.S. Bank

Other issuers—like Synchrony Bank, Wells Fargo, or USAA—either don’t have an online prequalification service or only let current members check online.

FAQs About Prequalified Credit Card Offers

Will getting prequalified hurt my credit score?

In almost all cases, no. This is because issuers do a soft pull on your credit history, which does not impact credit scores. Note that actually applying for a card (which causes a hard pull) will affect your credit history.

Can I get prequalified if I have bad credit?

Yes. Different issuers have different requirements when it comes to prequalifying someone for a credit card. So just because you weren’t prequalified for a particular card doesn’t mean you won’t be prequalified for another one.

Curious which credit cards are aimed towards people with bad credit? Merchant Maverick has your back.

Is there a difference between being pre-approved and prequalified?

Yes, although the difference is very slight. If you’ve been prequalified for an offer, it means that your credit score likely falls within the recommended range for a particular card. If you’ve been pre-approved, however, the issuer has targeted you more specifically for an offer.

Do I have to get prequalified before applying for a credit card?

No, becoming prequalified just gives you extra confidence before actually applying. You can still be approved for a credit card without being prequalified.

Final Thoughts

Prequalification processes can help give you peace of mind before applying for a credit card. They can potentially shield your credit score from an unnecessary hard pull and save you hassle, letting you focus on what matters—your business.

Did a check but didn’t get prequalified? Find out how to improve your credit score. Did get prequalified but want to know if that card is the right choice? Read up on our favorite business credit cards.

The post How To Find Out If You Are Prequalified For A Credit Card appeared first on Merchant Maverick.

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What Is A Card-Not-Present Transaction?

It’s safe to say that nothing is ever free in payment processing (and if it claims to be, you should be very suspicious). But trying to understand why some types of transactions cost more than others to process can be a confusing and sometimes overwhelming process. For example, why does Square charge 3.5% + $0.15 for keyed transactions and just 2.75% for swiped, dipped, and tapped transactions, even though they both go through the Point of Sale app? Why do invoices and online orders cost more than payments processed with a POS app and credit card reader? The answer is that it matters whether a transaction is deemed “card-present” or “card-not-present” (CNP)  — in fact, it is a critical factor in payment processing costs.

A card-not-present sale is any transaction where the cardholder does not present their card to the merchant. While that general definition may seem pretty cut and dry, the reality is a bit muddier. Here’s what I mean: Even if your customer takes out their physical credit card, the transaction is not considered a “card-present sale” unless they actually swipe, dip, or tap it. Manually entering a card number throws the transaction into card-not-present territory.

And when a customer taps a credit card terminal with their phone at a coffee shop? That transaction is actually considered a card-present sale even though the merchant technically never sees a physical credit card!

Confused? Don’t worry. Keep reading; below, we’ll break down some more examples of card-not-present transactions and help you understand why they cost more to process. We’ll also talk about what — if anything — you need to change in your payment processing setup to protect your business.

The reality is, whether you have a brick-and-mortar store or you run an eCommerce business, you need to understand how CNP transactions affect your business, your customers, and your bottom line. There’s much more than meets the eye when it comes to distinguishing from a card-not-present and a card-present transaction, including how much it costs you and the security risks involved. Let’s dive in!

Card-Present VS Card-Not-Present Transactions

Let’s start by talking about what a card-not-present sale actually entails. Once we do that, these transactions will be a little easier for you to identify (and help your sales team navigate the whole issue as well.) A card-not-present sale is any sale processed that does not capture the electronic data of the card at the time of the sale.  

It’s not always super cut and dry. Sometimes merchants don’t understand that being handed a credit card doesn’t automatically qualify the transaction as a card-present sale. It all depends on how it is processed. For instance, say you are at a festival and decide to buy one-of-a-kind art from a vendor. You hand her your card, and she breaks out a little manual machine and makes a carbon copy. Even though you physically handed the vendor your card, this still counts as a card-not-present transaction. No electronic data was captured.

Another example involves Visa and Apple Pay. You can consider any in-store purchase made with Apple Pay a card-present sale, but any payments made using Apple Pay in-app are considered card-not-present. That’s because when a customer uses a digital wallet by tapping or scanning a QR in the store, the electronic data of the card is captured in real time. In-app purchases do not capture the electronic data at the time of the sale.

For the most part, the main thing to understand is that transaction categorization ultimately boils down to whether electronic data was captured.

Common Card-Not-Present Transactions:

  • Invoicing a client
  • eCommerce / online shopping
  • Phone orders
  • Recurring payments that are automatically billed (subscriptions)

Common Card-Present Transactions:

  • Countertop credit card terminals
  • Tapping or scanning digital wallets
  • Swiping via a card reader on a tablet or smartphone (e.g., Square)

If your revenue depends on processing payments with anything other than a POS app and credit card terminal or mobile card reader, it is worth your time to understand how to keep your transactions safe. Processing credit cards costs money whether you process in person or online, but you will face slightly higher fees for processing card-not-present transactions. 

Understanding The Cost Of Card-Not-Present Transactions

 

Why are you charged more for card-not-present transactions? It’s pretty simple, actually. Card-not-present transactions cost more because there are simply more ways for them to fail. From chargebacks, friendly fraud, and malicious fraud, there is more vulnerability and subsequent cost when things go wrong.  Granted, all credit card processing poses some risk — that’s why businesses have contracts with processors, and why high-risk merchant accounts exist. It comes down to which methods of payment processing (and sometimes even which businesses) present the most risk. 

With a merchant account that offers interchange-plus pricing, you will pay a higher interchange rate for card-not-present transactions because the card networks want a return in exchange for accepting some of the risk. Even third-party processors, which don’t overtly pass interchange costs directly to you, still build the costs in by adding a markup to their base rate.

It’s also important to understand that not all card-not-present transactions pose the same risks. For instance, you are generally going to pay a higher cost for a keyed-in entry than for an online transaction because there are typically some built-in security measures (like address and CVV verification) for online purchases, whereas there are no security measures for keyed transactions.

Want to know more about how credit card processing works? Check out The Complete Guide to Credit Card Processing Rates & Fees for an in-depth look. 

Below we talk more about card-not-present fraud and what you can do to protect your business. 

The Cost Of Fraud

Unfortunately, when it comes to CNP sales, the industry is currently seeing an increased rate of fraud for online transactions. The rollout of chip cards and the EMV liability shift in the US for card-present sales actually plays a major role in the increase of card-not-present fraud, and it’s something that financial experts predicted would happen based on EMV adoption in other parts of the world.

While we certainly don’t want to strike fear or dread into any of our readers, the fact is that card-not-present transactions make you more vulnerable to fraud because the physical card data can’t be verified. Not only can a card data breach turn into an embarrassing public relations issue, but the business owner is ultimately responsible for absorbing the cost of any fraudulent charges in a card-not-present sale.

A recent press release from LexisNexis demonstrates that the cost of fraud is rising. Last year, every dollar ($1) of fraud cost a merchant $2.77. This year, it’s predicted to cost $2.94 on average. And if you are in the digital space, the cost is even a bit higher.

Small businesses need to stay on guard just as much as any medium or large business. The unfortunate fact is that fraudsters are looking for vulnerabilities like outdated data security practices, and small businesses are very likely to be targeted.

There are some very sobering statistics from UPS Capital:

  • Nearly 90% of small and medium-sized businesses in the U.S. don’t use data protection for company and customer information.
  • Less than half have secure company email processes to prevent phishing scams.
  • 60% of smaller businesses are out of business within six months of suffering a cyber attack.

It is vitally important to be aware of the risks and know how to protect yourself.

Read on to learn more about fraud and what you can do to protect your business if you accept card-not-present transactions.

Protecting Your Business From Fraud

Merchant’s Guide to Preventing Card-Present Fraud image

Taking a proactive approach to preventing fraud is a smart move. In this post, we focus on understanding the risks and cost of card-not-present transactions, but card-present sales are certainly not exempt from fraud. If your business processes both types, check out the Merchant’s Guide to Preventing Card-Present Fraud for a great breakdown of information on how to protect your business from card-present security issues.

Your first defense against fraud will always be PCI compliance. PCI DSS is an acronym for Payment Card Industry Data Security Standard, which dictates the industry-standard procedures and security measures a business needs to make to protect customer data.

The good news is that unless you are dealing with homegrown software for your payment processing system, you are likely operating with PCI compliant equipment and software. That’s because all payment processing software and equipment vendors go through a strict certification process to ensure their products meet industry standards for security. 

That being said, you still need to take the time to read your contract and understand if there are any steps you need to take to ensure continued compliance. Third-party payment processors such as Square are automatically PCI compliant and do not require you to do anything specific to maintain compliance — at least not as far as the contract is concerned. (As a general rule, you should keep yourself informed on PCI compliance and what constitutes a suspicious transaction that could get your account flagged for fraud.) 

With merchant accounts, PCI compliance is a lot more varied and partially depends on whether you use the provided software or integrate with a third-party. You may be obligated to complete a scan or assessments, or potentially much more depending on your payment processing setup.

The key takeaway is this: PCI compliance is never a one-time event. Assessment, remediation, and reporting is a continual process with best-practices changing each year. Even if your processor doesn’t require you to do anything to maintain compliance, it’s important to make sure you know what security best practices are.

According to the PCI DSS Quick Reference Guide, some habits can put you and your customers at risk for fraud. Within the guide, the PCI cites activities that are common across the board in all types of U.S. and European businesses (page 4):

  • 81% store payment card numbers
  • 73% store payment card expiration dates
  • 71% store payment verification codes
  • 57% store customer data from the payment card magnetic strip
  • 16% store other personal data

Let’s break down that first statistic. The majority of business owners store their customers’ credit card numbers. But where? Unless you’re using PCI compliant software with a secure credit card vault, you could be exposing yourself to risk and liability — big time. 

Following best practices and keeping yourself up-to-date with PCI compliance is one of the most important things you can do to prevent fraud. Another thing to remember is that it is up to you to ensure your team knows what not to do, too. A retail employee who keys in the majority of her transactions may be helping others commit fraud — or she may simply have trouble getting the credit card terminal’s card readers to work. But you won’t know until you check up on her. 

Once your bases are covered with PCI compliance, you can rest easy knowing that your legal and liability concerns have at least been reasonably mitigated.

Additional layers of security may be worth looking into as well, especially if your livelihood involves online sales

  • Address Verification System (AVS): This system checks to see if your customer’s address is the same as the person who owns the credit card. Verifying the billing address or zip code against Visa or MasterCard billing information of the cardholder can prevent misuse and protect your business from fraud.
  • CVV Checks: A CVV check requires your customers to enter in the additional three numbers at the back of the card (four digits for American Express). Since this information can be stored (and also stolen), it also makes sense to require customers to re-enter the card code whenever there is an unrecognized device or change to a shipping address.
  • 3-D Secure: This provides an extra layer of security for online transactions. If you have heard of MasterCard SecureCode, Verified by Visa, or American Express Safekey, then you are familiar with 3-D Secure. MasterCard SecureCode, for instance, requires a PIN code to be entered into an inline window that is securely hosted by the issuing bank. The code is never shared with you directly. This authentication step is designed to reduce your liability and improve security. Many processors that cater specifically to online businesses, such as Stripe, offer 3D Secure bundled with their services.

Final Thoughts

Fully grasping the nuances of credit card processing can be difficult. However, it’s definitely worth taking a bit of time to understand how and why card-not-present transactions are different from card-present payment processing.

Even merchants who run brick-and-mortar shops have to deal with the cost of CNP payments. If you have a storefront shop, taking the time to train your team to spot the difference between the two types of transactions and keeping up with the latest compliant software/EMV readers will go a long way towards keeping your costs down —and your payment security tighter.

If you run an online business, your focus should be on making sure you have the appropriate security measures enabled with a good payment processor — preferably one that does the bulk of the work for you! At the end of the day, you will take the hit from chargebacks and fraud if you don’t have the right protections. 

Shopping around for eCommerce businesses solutions? Read How To Choose An eCommerce Merchant Account.

The post What Is A Card-Not-Present Transaction? appeared first on Merchant Maverick.

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Why Square Is A Great Free POS For Markets And Grocery Stores

As a small business owner who is launching a new shop or exploring your payment processing options, finding the right POS to accept payments is not a decision to be made lightly. You probably already know that the grocery industry has its own unique rewards and challenges. Keeping up with supply and demand, getting your name out there, competing with the bigger brands, and strengthening your own brand recognition takes time, energy, and a lot of know-how. Fortunately, Square offers a fantastic POS option for markets and grocery stores that goes way beyond just the swipe.

Read on to find out how Square payment processing tools can benefit your business whether you are opening a pop-up shop, have a brick-and-mortar store, or take your culinary delights on the go to farmer’s markets and trade shows.

Square’s Free Point-Of-Sale Reader & App

Square is best known for the free Square Point of Sale app and the free Square Reader. Square’s iconic white reader plugs into a smartphone or tablet to make mobile payments possible. The Square Point of Sale app allows you to “swipe, dip, or tap payments” whether or not you have an internet signal. If you run into a spotty WiFi connection or have a service interruption, you don’t have to worry about a line bottleneck because the app can securely save data offline.

For the smaller to mid-size shop, the Square Point of Sale app has everything you will need and then some. We dive into all of these features below, so keep reading for a closer look at how Square gives you better control over more parts of your business, from inventory management to sales, employees, and even more.

We’ll also take a look at how Square can also help you completely run or supplement your marketing campaigns with an all-in-one solution that can integrate a loyalty program and private customer feedback. Most of these perks (except for the loyalty program option) are all “in-the-box” features that you won’t pay anything more to use with your free POS Square reader.  Let’s dig in!

Reader eCommerce Retail Food Service
Free App & Reader Square eCommerce Square for Retail Square for Restaurants
Get Started Get Started Get Started Get Started
Free, general-purpose POS software and reader for iOS and Android Easy integration with popular platforms plus API for customization Specialized software for more complex retail stores Specialized software for full-service restaurants
$0/month $0/month $60/month $60/month
Always Free Always Free Free Trial Free Trial

Track Inventory

One thing will never change — people love to eat. However, keeping your supply up-to-date can be a challenge when it comes to balancing the ebb and flow of demand. Your customers come in for a specific product or ingredient; making sure it’s always there for them builds loyalty and trust. Managing inventory can be tricky if you don’t have the right tools.

Thankfully, Square builds inventory management right into their product, so you don’t ever have to think twice about shopping around for a suite of tools. It’s easy to set up your inventory — you can bulk import all of your products with a CSV spreadsheet and make any adjustments to name, prices, or quantities as needed. Once your inventory is saved, you can also set low-stock alerts so that Square will let you know if you’re running low on a product. The best part is that you can determine what constitutes “low stock,” whether that’s six of an item, or 100! You’ll also always be able to take a peek in real time at what — and how much — of your products are selling.

Square’s inventory also supports variants and modifiers. Variants are helpful if you carry a product that comes in different flavors or sizes — you can keep the item listing centralized, but still track quantities of each flavor or size and see which ones are most popular. You can even set different pricing for each variant, as appropriate. Modifiers are more applicable to restaurants and cafes, but if you run a small boutique store and want to upsell customers on special bundles or extra discounted products, you could add them as modifiers.

Square’s inventory system allows you to upload photos for each product, and on a tablet you can configure the layout of products. However, if you don’t like browsing for the right item, you can also attach a barcode scanner. While the free Point of Sale App doesn’t have native label printing, you can find several viable workarounds.

Also, if you sell products in bulk, it’s important to know that Square doesn’t currently support tracking partial increments of a product, or selling by weight. Again, you can find workarounds for this, one of them being the variable price point feature. With the variable price point, you can create an item and track sales, but the POS app will prompt you to enter an amount for the sale when you select the item.

Finally, if you have more than one shop, you can take advantage of the free multi-location inventory management tools. Square allows you to set up individual preferences for each location, including taxes. You can build your inventory from Square’s centralized item catalog and adjust pricing and availability as appropriate. Plus, you can run reports to see sales by location, POS device, or even by individual employee (you’ll need an Employee Management subscription for that last report.) 

The best part is that you can control all of this — every location, all of your inventory, all of your devices — from your Square Dashboard, which is a free web portal. Below we also cover a little bit more about the dashboard — including how it helps you keep track of employee sales, tips, peak sales times, and more.

Square Dashboard

The Square dashboard gives you an integrated look at many aspects of your store — and these reporting and analytics features are all free. You can view your stats in real time and see what is going on in your store — or stores — simply by visiting the Sales tab in the dashboard. Whether you want to dig into the data or you just want a quick visual representation of sales, you can find what you need, fast. You can access reports, view all types of transactions, and keep track of deposits all by quickly scanning the three tabs at the top of your dashboard.

The reports tab breaks all of your data down into simple graphs and data to view aspects of your shop, including:

  • Sales Summary: Your sales summary report is updated in real time and can be viewed by day, month, or year.
  • Sales Trends: See your sales performance in daily, weekly, or yearly views.
  • Payments Methods: This report displays how your customers pay and any fees associated with the transaction.
  • Item Sales: Allows you to find out how well any individual product is selling.
  • Category Sales: Get a quick pie-chart view of which categories are bringing in the most sales such as appetizers, side dishes, or drinks, for example.
  • Employee Sales: This report breaks down tips, hours worked, and when an employee’s sales peaked for the day. (Note: You need to subscribe to Square’s Employee Management to access these features)
  • Discounts: Running a promotion? This report tells you how often your customers use a discount, coupon, or another offer when they buy. (More about loyalty programs through Square later in the post.)
  • Taxes: This report breaks all of your tax information down by the type, amount, and records any non-taxable sales in one spot.

Square also allows you to create your own custom reports, so if you want to see certain pieces of information together, you can tell Square to compile that report for you, and even how often to send it.

Don’t forget that the Dashboard is also the centralized management hub for all of your other Square services, including invoicing, employee management or payroll, and any other tools you might be using.

Built-In Marketing Engagement

One of the interesting aspects of Square’s platform is its customer engagement tools, the foundation of which is the customer directory. With Square POS, you can keep a record of all your customers, with their name, phone number, email, purchase history, and even card details, if you prefer (and your customers agree to store the card on file). You don’t need to have Square’s loyalty program to activate this feature, and it comes at no charge. It’s a great way to keep notes on regular customers and their preferences, to see who your most loyal customers are and who spends the most money in your store. 

If you’d like to build marketing campaigns to reach out to your regulars, your new customers, or even lapsed customers, Square has the tools built right in, plus all of the data right at your fingertips. Square’s marketing services start at $15/month, which is a pretty reasonable price. The price will scale with your use of the marketing services.

With the marketing tools, you can segment your customer list and target people automatically with offers to get them in the door. So whether you are welcoming a new customer or re-engaging a customer you haven’t seen in a while with a with a special discount, Square lets you tailor your marketing message to people at different spots in the buying journey.

The email tools are simple — you don’t have to understand how to set up multiple campaigns because Square streamlines the creation process for you through prompts. They give you a lot of template designs to choose from and even have some holiday and special occasion suggestions. You can send out a one-time email for a birthday or set up recurring email campaigns that encourage more interaction and more opportunities to buy from you — it all depends on how you want to run your business. 

Finally, when it’s time to review the success of your email campaigns, Square reports show you how many opens and clicks you get, as well as how many people redeem your offer.

Receive & Manage Feedback Privately

The Feedback feature can be helpful if you want a way to take charge of the customer experience and try to eliminate the troubles they encounter. It allows you to personally engage your customers — while keeping everything private. When you enable feedback management, customers who receive digital receipts also receive an invite to provide private feedback about their experience.

You can then resolve any issues between just you and your customer and hopefully make them happier and engaged. The idea behind this is that it is much easier to respond to private feedback than having to keep track of and respond to negative public feedback. Most customers appreciate being acknowledged whether the experience was good or bad, and if you do have an unhappy customer, you can make it right with a full/partial refund or a coupon for a discount on their next purchase. You can check the customer database to see what their purchase history is like and make a determination of the best offer to send. 

Best of all, the feedback management feature is totally free to use!

Square Loyalty Program

Square encourages customer engagement and sales in yet another way — a loyalty program. The pricing structure of Square’s loyalty program is based on the number of loyalty visits, starting at $25/month. Costs automatically adjust with the participation of your customers, and you can always track the success of any program at your dashboard to see if you’re getting your money’s worth.

Square’s loyalty program is very flexible and allows you to tailor rewards to your business and your branding. You can opt for something as simple as a digital punch card, where customers earn a reward after so many purchases, or you can structure a more advanced reward system that allows your customers to collect points and cash in their rewards when they want. You can even let them choose from multiple tiers — they could opt for two lower-tier rewards, or spend all their points on a single higher-tiered reward. 

However you choose to structure your rewards program, you can track the performance on your dashboard. You can see how many customers enroll, how often customers redeem rewards, and how many subsequent repeat visits you’re getting. 

According to Square, customers who join their loyalty programs spend 37% more after they join it. Across the board, loyalty programs continue to work for businesses of every size to encourage repeat business, and we think that it’s definitely worth giving it a try for a while and seeing if it works for your business.

Fully PCI Compliant & Secure

When dealing with credit card processing companies, one of the biggest questions most business owners have has to do with safety and security. You want to know that your data is secure and your customer’s payment information isn’t going to be compromised, because when it all boils down, the burden is on you to make sure that you are PCI compliant. “PCI” is shorthand for the Payment Card Industry Data Security Standard (also sometimes called PCI DSS). No matter how big or small your business is, if you accept credit cards, you have to follow the best practices of the industry when it comes to security — and you can face penalties if you don’t.

To remain secure and compliant for each credit card you take, you have to follow the security guidelines when you swipe, key in, store, or transmit their card data. For starters, data must be encrypted properly at each stage of processing and storage, and each year the standards change.

The whole security and compliance issue can be expensive for the smaller to midsize business, and for some, the issue is intimidating enough that they avoid credit card payments altogether.

The great news is that when Square offers you their product or service, they are taking the burden of PCI compliance on themselves when it comes to their hardware and app. Square is an industry leader in security and compliance. Their team participates on the PCI board itself and has an inside view into the ever-changing world of data security. What that means for you is that when you use Square, you don’t have to jump through any other security hoops — Square maintains PCI compliance and does the work for you. You won’t even need to pay any PCI compliance fees. 

Cost Per Swipe & Getting Started With Square

Getting started with the Square POS app and the reader you will use to swipe your customer’s cards is entirely free. Square continues to remain a favorite among small business owners because they don’t charge sign-on or monthly fees for their free POS reader or app — and they don’t make you sign contracts and punish you with charges if you decide it’s not for you.

If you bring your own smartphone or tablet and combine it with one of Square’s mobile card readers, you’ll pay 2.75% for each swiped, dipped, or tapped transaction. If you opt for one of Square’s all-in-one hardware systems, such as Square Terminal or Square Register, you’ll pay slightly different rates. With Square Terminal, swiped, dipped, or tapped transactions process at 2.6% + $0.10 per transaction.  If you want to know more about all of Square’s different card readers and hardware, check out A Guide to Square’s Credit Card Readers and POS Bundles.

Considering that these are pretty low rates to begin with, and there are so many additional built-in features like dashboard analytics, invoicing, the customer database, and inventory management, we think that is a pretty sweet deal for any grocery store looking to expand.

If you are curious and want to dig even deeper, check out our Square review or visit the Square Point of Sale page and sign up for free to see how it all works for yourself!

Reader eCommerce Retail Food Service
Free App & Reader Square eCommerce Square for Retail Square for Restaurants
Get Started Get Started Get Started Get Started
Free, general-purpose POS software and reader for iOS and Android Easy integration with popular platforms plus API for customization Specialized software for more complex retail stores Specialized software for full-service restaurants
$0/month $0/month $60/month $60/month
Always Free Always Free Free Trial Free Trial

The post Why Square Is A Great Free POS For Markets And Grocery Stores appeared first on Merchant Maverick.

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How To Advertise on Quora Effectively

Quora Ads

Quora Ads are one of the myriad options for advertising online. Like eBay, Reddit, and LinkedIn, Quora is one of those Web 2.0 properties that feels like it should be dated, but remains surprisingly relevant.

In fact, while Quora is itself has been around since 2009, Quora’s self-serve Ad Platform only rolled out in 2016.

Quora has 300 million active users and some interesting reasons to advertise.

Why Use Quora Ads

First, you have access to both social data and search intent.

Like Pinterest and Reddit, you can reach people based on demographic and psychographic data AND you can reach people who are actively searching for answers OR you can layer both to run hyper-targeted campaigns to people who are both your target customer and actively researching.

Second, you have access to lots of qualified organic traffic. Quora has plenty of internal usage. But their organic search traffic is their secret weapon.

Due to their brand and enormous amount of content, they rank well in Google & Bing for highly qualified search terms. I’ve written how you can use Quora for “barnacle” SEO and content.

But – that approach requires work. With Quora Ads, you can pay to jump to the front of the line. Advertise on pages that rank well for target keywords.

Quora Ad Alternative

Third, you get to define best practices & deal with lower competition.

Every big brand and agency is on Google & Facebook. Best practices and budgets are well-defined. Quora requires more work and thought to succeed.

I’ll share my experience in this post, but my main takeaway is that there is no “right” answer. Quora is still wide-open and open for testing & experimentation. If you have more time / skills than budget, Quora is a great place to go.

How To Setup Quora Ads

Quora has done an excellent job with self-service. The platform is straightforward and comes with a surprisingly useful email course.

To get started, all you need is some basic business information.

Within your Ads Manager Dashboard, you can Manage Ads, setup a Quora Pixel, manage your retargeting audiences, and setup email reports.

Whether you setup an ad campaign or not, I highly suggest that you immediately implement your Pixel, dabble with Audiences and setup a couple curated Email Reports.

Quora has a the familiar menu of retargeting audiences. Standard setup is for Website Traffic.

In the next step, you’ll setup your Quora Pixel to tag visitors. You can pre-segment your Website Traffic to make retargeting a bit easier.

3 Quora Remarketing

If you have a lot of educational content on your site, I would start with that segment. Quora is a common research tool, especially with high-consideration purchases. If you can reach users doing intensive research across platforms, you’ll be less likely to lose them.

Additionally, once you’ve built an audience, you can create a Lookalike Audience.

This feature is huge because you can reasonably expand your reach across Quora to reach someone who you *know* is familiar with your brand.

Remember how I mentioned that Quora is hybrid social / search? This is where that power comes in.

For example, imagine you are recruiting entry-level engineers out of college.

You have the ability to tag visitors to your site, and then reach them throughout Quora whenever they are asking career related questions.

Plus – you’ll get insight into the types of questions that you your audience asks. This feeds back into a successful content strategy based on data that *only* you have access to.

Lastly, if you have permission, you can upload a list of current contacts to rebuild your existing customers within Quora.

It’s a lot of work, but for high consideration campaigns, it’s worthwhile.

Like any & all retargeting strategies – Audiences can be creepy, invasive, and sometimes illegal in the European Union without explicit consent.

Most people either consent or live in jurisdictions that do not require explicit consent. These tools do exist and are worthwhile for many businesses. Retargeting is here to stay. The key is to keep it classy. Time, thoughtfulness, and testing creates the best outcome for advertisers, publishers, and customers.

Email Reporting is straightforward. But I would set the settings you like so that you actually view the reports rather than automatically deleting them.

4 Quora Email Reports

Now you’ll need to set your Quora Pixel, which is the snippet that “fires” on your webpage to track website visitors.

The setup depends on your website, but you’ll need to place it wherever you have your Google Analytics tag.

5 Quora Pixel

Now you can get started on a campaign! Head to Manage Ads and select your objective.

6 Quora Ads Create Campaign

If you select Conversions, you’ll need to select a conversion type to pass to your Quora Pixel. You’ll also have to manually tag any actions (like Add to Cart).

Conversion Tracking is accurate and can be worthwhile. But unless you are running large campaigns, some of this Conversion Tracking might not be worth the effort.

8 Quora Ads Conversions

For my campaigns (and most advertisers), I use the Traffic objective. But I also tag all of my ads so that I can track conversions within my existing Google Analytics setup.

9 Quora Ads Objective

Once you’ve created your Campaign objectives, you’ll need to set up a new Ad Set.

Ad Sets each have their own targeting and bids. After setting up an Ad Set, you’ll write individual Ads for each ad set.

But Ad Sets are where the fun really happens.

You have 4 primary targeting methods. I’ll cover each below. But the short version is that you can do –

  • Topic Targeting – Target content that falls within a category regardless of user interest.
  • Question Targeting – Target specific questions on Quora regardless of topic or user.
  • Audience Targeting – Target your audiences everywhere on Quora (see above).
  • Interest Targeting – Target people who are interested in a topic regardless of content.

After that, you can choose several secondary targeting methods. You can focus your ads by Location or Device. You can also exclude specific questions or audiences (ie, people who have successfully purchased from your site).

10 Quora Ads Targeting

Topic and Question Targeting are my favorite options. They both target based on content not the user.

When you are looking to expand reach or target based on intent – this is the option that you should use. Topic Targeting lets you quickly target a bunch of questions quickly.

The key to Topic Targeting is to provide Quora with a relevant but broad set of keywords. There’s a bit of an art to it, but be sure to play around with different combinations before committing to a set of Topics.

Additionally, make sure you go and manually explore those Topics to vet the questions, the likely audience, and and related Topics that you are missing.

11 Quora Ads Topic Targeting

But if you have time, the best targeting option is Suggested Questions.

With this option, you can advertise with specific ads on specific questions.

From a purely data perspective, this targeting option is the only place to get Weekly Views stats for Quora questions, which can help your content marketing efforts separate from any paid campaigns.

13 Quora Question Ad Suggestions

Interest Targeting targets the user rather than the content that they are looking at. This option is great for casting a wide-net to reach your audience everywhere on Quora.

However, note that you’ll reach them even when they are looking at irrelevant questions. This option is great to layer with other options (like exclude questions). Be careful using it alone though.

12 Quora Ads Interest Targeting

There are also options for targeting an existing audience and also a Broad Topic option.

After selecting your targeting with exclusions and bids set, you’ll need to create your actual ads.

Quora provides lots of space and encourages “content-like” ads. They want complete sentences that are relevant to your targeting. They are not great for hard-sells, but pair *very* well with custom landing pages or educational content.

Be sure to add UTM parameters to your landing page URL to effectively track visits throughout Google Analytics.

 

14 Quora Ad CreationThat’s how you setup Quora ads. But keep in mind that the magic is in customized ads, landing pages, targeting and constantly improving each metric.

That said – how do Quora ads perform “out in the wild”? I’ve run a few campaigns for myself and for clients. Here’s the results of my most recent campaign.

My Experience with Quora Ads

Now – I almost exclusively use Question Targeting for my Quora ads. I also commit to spending probably too much time on research for my small campaigns (although some of that research gets re-used for content campaigns).

The campaign highlighted below was a fairly small content promotion campaign. I had a new piece of content that I wanted to promote without traditional, manual outreach.

I found several questions that aligned with the content. I devoted around $100 to promotion.

Quora Campaign Results

This campaign aligned with the common takeaways from my Quora campaigns.

  • The impressions were high for such a niche topic – and surprisingly consistent day to day.
  • The CTR was uncommonly high for online ads.
  • Conversions were solid.
  • Cost per click was a bit higher than expected, but nowhere near Google Ads territory.

Additionally, I did not have to filter or account for a lot of spam (I’m looking at you, Google Display and Facebook…).

My numbers in Google Analytics lined up perfectly with Quora. Engagement was high and as I’d hoped.

Quora Ads Experiment

All in all, this (and all my campaigns) go back to the same general takeaways for Quora Ads.

  • Quora Ads are hard to roll out “at scale” but are very effective with the right amount of time devoted to set up & research.
  • They are great for high consideration ads and great to reach new, smart audiences.
  • You have to have the right website content to provide good, engaging landing pages.
  • Often small campaigns are worthwhile simply for the data.

In many ways, they remind me of both Pinterest and Reddit Ads. They aren’t for everyone, but certainly a solid opportunity for the right advertisers.

Next Steps

Quora Ads are not for everyone. There’s not a ton of inventory. To do it well, you really need to spend some time on your research and ad setup.

However, in an increasingly crowded and expensive online ad market, the market represents a solid opportunity.

At the very least, you should go set up an account and grab the Quora Pixel to build an audience.

From there, you can reach you existing users on yet another platform. You can expand your reach based on small tests and the time you have to research interests.

If you found this article useful, please link, share or bookmark. Happy advertising!

The post How To Advertise on Quora Effectively appeared first on ShivarWeb.

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How To Finance A Medical Marijuana Dispensary

Financing any small business is a headache, but acquiring funding for a medical marijuana dispensary can be even more of a challenge. Medical — and recreational — marijuana is legalized in states across the nation, but it is still illegal under federal law. These laws make it more difficult for owners of medical marijuana dispensaries to apply for loans, open merchant accounts, or receive other types of financing to cover operating expenses or to scale their businesses.

However, even though financing may be limited, there are options out there. To fund your business, you have to know where to look and even get a little creative when other options don’t pan out. Whether you need money to expand your business or you’re seeking funding for your startup, we’ll review the financing options available to you and how to qualify. Read on to learn more and to move toward financing your medical marijuana dispensary.

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Medical Marijuana Dispensary Funding Challenges

Obtaining funding for any business is no easy task. You have to find a lender that offers the best rates and terms to receive the most affordable loan. Once you’ve identified your lender, you go through the underwriting process, making sure you have all of your paperwork in order to prove that your business is qualified to receive financing. Challenges may pop up throughout the process. Depending on the lender you work with, it may take weeks or even months to receive financing, from start to finish.

With a medical marijuana dispensary, there are even more hurdles you have to clear on the race to financing. Even though more states are legalizing medical marijuana, it remains illegal under federal law. Most lenders want to avoid the potential legal repercussions of working with businesses in the cannabis industry, as these businesses are considered high-risk. Even opening a checking, savings, or merchant account for most medical marijuana dispensaries is a hassle, while receiving financing through traditional lenders is nearly impossible.

And if you do find a financial institution that will allow you to open accounts, there are many associated costs, including fees for background checks and for regular reports to the Treasury Department’s Financial Crimes Enforcement Network. Businesses that don’t have merchant accounts and work with cash have additional business expenses to protect their earnings — think high-tech video surveillance systems and reinforced windows and doors.

In other words, medical marijuana dispensaries have the same expenses as regular businesses (utility bills, property leases, etc.) as well as additional expenses to keep their business protected. These expenses pile up quickly, but due to legal issues, traditional financing is often not an option. Therefore, medical marijuana dispensaries either have to make enough capital on their own to keep the business moving forward, or these business owners have to seek out other means of financing.

See our guide on best practices for using personal credit cards for business expenses

Can I Get A Dispensary Loan From A Bank?

Banks are insured by the Federal Deposit Insurance Corporation. A bank that works with companies that violate federal law will not be insured by the FDIC. This includes medical marijuana dispensaries. Instead of taking on this risk, most banks opt to simply avoid working with businesses in the cannabis industry.

There are also legal issues that a bank could potentially face when working with businesses in the cannabis industry. For example, a bank could be charged with money laundering for accepting deposits from a medical marijuana dispensary. Although the odds of this law being enforced are slim, lenders simply don’t want to take that risk.

For those reasons, most banks will not loan money to medical marijuana dispensaries or other businesses in the cannabis industry. While a FinCEN report showed that over 400 banks in the U.S. operated accounts with marijuana businesses in early 2018 — up 20% from early 2017 — marijuana businesses still do not have access to a full range of banking and financial services offered to other businesses, such as loans, credit cards, and merchant accounts.

When most business owners can’t receive funding from banks, they turn to another great resource: the Small Business Administration. The SBA provides educational materials, training, and low-interest, long-term loan options when small businesses can’t receive traditional loans. Do medical marijuana dispensaries receive access to these same loans?

Unfortunately, the SBA does not work with medical marijuana dispensaries. A policy went into effect on April 3, 2018, that prohibits SBA intermediary lenders from providing loans to businesses in the marijuana and hemp industries.

Though this news may be understandably frustrating if you’re seeking an affordable loan, there are financing options available to you. You just won’t find them at a bank or through the SBA.

Equity Financing For Medical Marijuana Dispensaries

business line of credit loan

One option that you may consider to fund your medical marijuana dispensary is equity financing. With equity financing, an investor or group of investors will provide you with the capital your company needs in exchange for ownership interest in your business.

Debt refinancing — traditional loans, lines of credit, and other financial products — requires you to make regular payments along with interest and fees. With equity financing, you’ll receive the money you need without having to make these regular payments. However, the tradeoff is that your investor will own a stake in your company. Once your business becomes profitable and successful, your investor will be able to take a percentage of your profits for the life of your business, unless you buy them out.

The benefit of equity financing is that you won’t have to worry about paying interest or regular payments right away. The drawback is that you are giving up ownership, and in some cases, the investor may be able to have a say in the operations of your business. For example, if later down the road you decide to make a large purchase to expand your business, the equity investor may disagree. With equity financing, you no longer have full control over your business.

The Best Loans For Marijuana Businesses

If equity financing isn’t for you and traditional bank financing and SBA loans are off the table, how do you get financing for your medical marijuana business? Alternative lenders have made it easier than ever to receive funding. While rates and terms may not be as favorable as traditional financing, solid revenues and a high credit score can help you score affordable loans to fund operations or expansion of your business.

While you may find alternative lenders are more willing to work with your business, just know ahead of time that some lenders may have restrictions on financing businesses in the cannabis industry. Before applying, do your research to find lenders that work with medical marijuana dispensaries and other high-risk businesses.

You also need to consider what type of financing you need for your business. Whether you need a flexible line of credit or financing to purchase new equipment, alternative lenders have options available for you.

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Short-Term Loans

When you receive a short-term loan, you’ll receive one lump sum that can be used for any business purpose. A short-term loan can be used as working capital, to purchase equipment, for hiring new employees, or for other business expenses.

Although some short-term loans are true to their name and have shorter terms of 12 months or less, some lenders have repayment terms up to 3 years. Depending on the lender you choose, you may have daily, weekly, or monthly payments.

One way that short-term loans differ from other loan options is that most do not have an interest rate. Instead, a multiplier known as a factor rate (or factor fee) is used by the lender. This factor rate is a one-time fee that is added to the cost of the loan and replaces traditional interest. Like interest rates, your factor rate is typically determined by a combination of factors such as the performance of your business and your personal and business credit histories.

One of the benefits of short-term loans is that you often receive money quickly. Some lenders provide funding in as little as 24 hours, while others may approve and fund your loan in 3 to 5 days.

Equipment Financing

If you need capital to purchase new equipment, equipment financing is an option that’s available to you. With equipment financing, you can purchase nearly any type of equipment for your business, from vehicles to point-of-sale systems to furniture and fixtures.

There are two types of equipment financing. The first is an equipment loan. When you receive an equipment loan, you’ll pay 10% to 20% of the total cost of the equipment. The lender will pay the rest of the costs so that you can take possession and put the equipment into use immediately. If you have good credit, you may qualify for $0 down financing. However, putting at least a small percentage down, even when it’s not required, helps lower the cost of borrowing and your payment amounts.

After you’ve received your equipment, you’ll pay the borrower on a scheduled basis — typically weekly or monthly. Your payments will go toward the balance of the loan as well as the interest charged by the lender. Once you have made all payments as scheduled, you take full ownership of the equipment.

The second type of equipment financing is an equipment lease. With an equipment lease, you may also have to pay a down payment. Once you make the down payment, you can use the equipment through your lease period. Once the lease period ends, you return the equipment and sign a new lease for updated equipment.

With an equipment lease, you never own the equipment unless you pay the remaining balance at the end of your lease. A lease may be a good idea if you plan to upgrade any of your equipment regularly. Equipment leases may also come with lower down payment requirements and lower monthly payments. However, you’re essentially renting the equipment and you may end up spending much more over the long term with leasing.

Lines Of Credit

If you need a flexible form of financing, a line of credit is an option to consider. With a line of credit, you don’t receive just one lump sum. Instead, the lender will set a credit limit for your account. You can make multiple draws from your line of credit up to and including the credit limit.

With a line of credit, interest or a fixed fee will only be charged on the borrowed amount. Fees and interest vary by lender and are usually based on your creditworthiness or business performance.

Even if you have credit challenges, you may qualify for a line of credit. Some lenders base their approvals solely on cash flow and other performance factors.

A line of credit is good for any small business because it is so flexible. Funds can be used for any business purpose, and you won’t have to wait for approval. Once you initiate the draw, the lender typically transfers the funds to your banking account immediately, and you can access your funds as soon as the next business day.

Lines of credit are also flexible in how they’re used. You can use funds to cover operating expenses, hire new employees, handle an emergency situation, or for any other business purpose.

Merchant Cash Advances

If you haven’t been in business long, have a low credit score, or don’t qualify for other loan options, you may consider applying for a merchant cash advance.

Even though you can receive funding quickly through a merchant cash advance, these loans often have high interest rates and short repayment terms. This is why it’s more important than ever to do your homework to find a lender with the best rates and terms.

When you take a merchant cash advance, you agree to sell future revenue to the lender. The lender pays you a lump sum amount, and a factoring fee is added to the amount of the loan. Other fees may also be added.

The lender will then withdraw money from your account on a regular basis. Most lenders take payments daily, while others may have weekly or monthly schedules. These withdrawals will be made until the loan balance and all fees have been repaid.

Some merchant cash advances have fixed payments. Others deduct a specific percentage of your sales. When sales are up, your payment is higher. When sales are down, your payments are lower.

The funds from merchant cash advances can be used for any business purpose, including the purchase of supplies, inventory, and equipment or for use as working capital.

Crowdfunding Your Medical Marijuana Dispensary

go fund me for business start up

Another option for financing your medical marijuana dispensary is crowdfunding. With the rapid growth of the internet, crowdfunding has become a popular option for many small businesses, even those in controversial industries.

Crowdfunding is a way to raise money from multiple investors in exchange for equity or rewards. With crowdfunding, you’ll promote your campaign online by sharing with friends and family and posting links to social media. Anyone can donate to help you reach your fundraising goal.

There are two types of crowdfunding campaigns. The first is equity crowdfunding, which is when you give up equity in your business in exchange for investments. The second is non-equity crowdfunding. With this type of campaign, you won’t give up ownership of your company but will instead offer a reward or benefit to investors.

The tricky part of crowdfunding is that medical marijuana dispensaries are prohibited from posting on many of the most popular crowdfunding platforms. However, there are a few platforms that allow businesses in the marijuana industry to launch and promote campaigns.

One crowdfunding platform to consider is Fundable. Through Fundable, you have the option of launching a rewards campaign, an equity campaign, or both. It’s important to note that equity campaigns on Fundable can take years to complete. There is no limitation on the length of your equity campaign. However, you must pay a hosting fee of $179 per month through the duration of your campaign.

The Best Financing Options For Startups

As we’ve already established, finding financing for your medical marijuana dispensary can be a challenge. While there are options available for established businesses, what if you’re brand new to the industry or haven’t even opened your doors yet?

If you need financing to get your business off the ground, there are funding options for startups. The first step is to determine what expenses you’ll have and how much money you’ll need before exploring your financing options.

The Costs Of Starting A Medical Marijuana Dispensary

A medical marijuana dispensary has many of the same expenses as any other startup business, with a few added expenses since this is still such a new and controversial industry.

Before you even get your business started, you will have to apply for licenses and permits. Application and licensing fees range from a few hundred dollars to several thousand. In the state of Colorado, for example, licensing fees are $20,000. One of the first things you should do before starting your business is to learn about the laws, requirements, and fees specific to your state.

Because you’ll operate a storefront, you’ll need to rent, lease, or purchase commercial space. If utilities aren’t included in your monthly rent, these additional expenses will add to your total startup costs. You may have to do some remodeling to make the space suitable for your business, which will add in more costs.

Even if you plan to run a very small dispensary, you’ll still need staff. Whether you’re hiring one person or ten, you’ll need to consider the costs of hiring and training staff members and managers.

Additional purchases for your dispensary include a POS system, furniture, fixtures, and a high-tech security system. One of the most important expenses is your inventory, which is a recurring cost you should consider when calculating your total business expenses.

When planning how to fund these expenses, there are a few financing options to explore. One option may work well to best fit your needs, or you may consider combining a few options to fully fund your startup business.

Crowdfunding

Crowdfunding is a way to raise funding for your startup business. For a medical marijuana dispensary, an equity-based campaign is typically the best option. Even so, it may take several months or longer to raise the money you need to start your business.

Unlike other businesses, you can’t just go to any crowdfunding site. Marijuana dispensaries are prohibited from using some of the most popular crowdfunding platforms. However, as I mentioned above, Fundable is one option to consider. You can also explore options that are centered solely on the cannabis industry, such as Fundanna and CannaFundr. These are relatively new options, so it’s important to do your research, explore all associated fees, and know what you’re getting into before signing up.

Alternative Lenders

Alternative online lenders could help you receive the money you need to fund your medical marijuana dispensary. These lenders are typically more flexible to work with than traditional lenders, although interest rates and fees may be higher and terms not as favorable. Alternative lenders provide a variety of financing options for you, including short-term loans and lines of credit.

Before applying, make sure that you choose a lender that works with businesses in the cannabis industry and other high-risk businesses. Some lenders have restrictions on lending to medical marijuana dispensaries, so make sure to choose a lender that is willing to work with you. There are even online lenders that specialize in financing businesses in the cannabis industry.

Personal Loans For Business

If you have a solid credit score and steady income, you may qualify for a personal loan that you can use to finance startup expenses.

This is an option that many startups choose because the revenue, time in business, and business credit score aren’t taken into consideration for loan approval. However, you do have to disclose how the funds will be used. Some lenders may not loan money due to the industry you’re in, so you may have to shop around for a lender willing to work with your situation.

Investors

One way to finance your startup is to find an investor. Seek out private equity firms, venture capitalists, or angel investors that will provide the funds you need in exchange for a stake in your company.

Credit Cards

A business credit card is a good option for any business. A credit card can be used to pay recurring expenses, cover an emergency, or pay for startup expenses. There are plenty of great credit card options for good and fair credit borrowers. If you have bad credit, you may also qualify for unsecured or secured credit cards, although your credit limit will be lower and interest rates higher.

What You Need To Qualify For Medical Marijuana Dispensary Business Financing

The requirements needed to qualify for medical marijuana dispensary financing are similar to requirements for any other type of business.

Your requirements will vary based on the lender you select, as well as the type of financing you seek. For example, applying for a business credit card may require basic information, such as your name, the name of your business, contact information, and annual revenue. Applying for a loan or line of credit may require additional information and documentation.

Before you gather your documents, though, there is some prep work that can be done on your end. Calculate how much money you need for your business. Then, figure out if your business is able to afford the loan.

Next, pull your free credit score online. If you have credit challenges, working to build your credit may help you qualify for more options at better rates. If you’re in a time crunch to receive your financing, there are bad credit loan options available, but you should expect higher fees and interest and a more expensive overall cost of borrowing.

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Once you’ve established how much money you need (and can afford) and where you stand in terms of credit, it’s time to start shopping for lenders. After you’ve narrowed down your selection, understand the requirements of each lender. Again, this varies but you should generally expect to present the following:

  • Personal Information: Name, Social Security Number, and contact information
  • Business Information: Business name, address, and Federal Tax ID
  • Business & Personal Credit Score
  • Personal Background Check
  • Business Licenses & Permits
  • Business & Personal Bank Statements
  • Profit & Loss Statement
  • Income Statement
  • Balance Sheet
  • Detailed Business Plan

Final Thoughts

Operating or opening a medical marijuana dispensary comes with its challenges. While many options available to other businesses aren’t open to you, this doesn’t mean that you won’t be able to find financing. With a little research and creativity, you can find a lender that is willing to work with you to help make your business a success.

Want to get started with a loan for your medical marijuana business right away? Try LoanBuilder.

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First Time Applying For A Business Loan? Here’s What You Need To Know

Whether you’re facing an emergency or have been planning to make a big purchase like commercial real estate, there comes a time when every business owner needs a loan. If you’ve reached this point in your entrepreneurial journey, it’s easy to feel overwhelmed. With so many lenders out there, how do you choose? Which loan best fits your needs – and which is the most affordable? What if you’re facing challenges such as a low personal credit score or you’re a brand new business?

Blindly applying for a loan can make the process daunting and confusing. However, by knowing what to expect (and what to avoid), you’ll be cruising through the process in no time. Get on your way to receiving the money your business needs. Read on for everything you need to know before applying for a business loan for the first time.

Before You Apply For Business Loans

free credit score monitoring service

Getting a business loan doesn’t start with filling out the loan application. Instead, the process should begin before you even talk to a lender. Before you hop online to fill out your application or head to your local bank branch, prepare ahead of time by taking the following steps:

Look Up Your Credit Score

Lenders want to make sure they’re working with low-risk borrowers who will pay their loans as scheduled. To assess risk, lenders look at a number of factors, including credit scores. Your credit score is one of the most important factors lenders consider when deciding whether to approve your loan application.

A low credit score indicates that a borrower is high-risk. If your credit score is too low, a lender may outright deny the loan application. In other cases, loan options may be available but at a higher price for the borrower  — think higher APRs, down payment requirements, and the need for collateral.

Instead of allowing your credit score to creep up and startle you during the loan process, know where you stand before you even apply for a business loan. The internet makes it easier than ever to get your credit score, and best of all, many sites allow you to view your score for free.

To receive the best loan offers, a score that is at least in the high 600s is required for many business loans, including loans from the Small Business Administration and banks. However, some alternative lenders will give loans to borrowers with scores as low as 500. A lower score may result in fewer options and higher costs over the life of the loan in most cases.

If your credit score is very low, you may choose to work on raising this score before applying for a loan. You can do this by reviewing your credit report, disputing any erroneous items, working to pay down outstanding debt, and always making your payments on time. If a loan is needed immediately and you don’t have time to boost your credit score, weigh out the costs of any loan offer provided to you. If you accept, make all payments on time as scheduled in order to help build your score to qualify for more options in the future.

Decide Why You Want The Loan & How Much You Need

Before taking on the debt of a loan, it’s important to establish why you need the loan. It’s easy to just grab for the money right in front of you, but you need to determine whether your reasons for taking the loan are sound.

Before applying for a loan, consider your return on investment. In other words, will taking out a loan and paying fees and interest be worth it? If the loan will benefit your business and outweigh the costs, proceed with the loan process. If there is no real benefit to receiving a loan, reconsider taking on this extra debt.

You’ll also need to decide how much money you need. Once you’ve determined how you’re going to spend the loan proceeds, this step shouldn’t be too difficult. If you’re buying a new piece of equipment, shop around to get price estimates. If you’re updating your facilities, get bids from vendors and contractors. If your goal is to purchase commercial real estate, look at comparable commercial properties in your area to get an idea of what you’ll spend.

Not only will knowing 1) why you want the money and 2) how you’re going to spend it help with your own planning, but lenders will need this information to determine if you qualify for one of their loans.

Calculate How Much You Can Borrow

You know how much you need to borrow. Now, you need to calculate how much you can afford to borrow.

Before applying for a loan and taking on debt, you’ll want to calculate your debt service coverage ratio or DSCR. This shows the relationship between the income and debt of your business.

Debt Service Coverage Ratio = Net Operating Income / Debt Obligations

To calculate DSCR, divide your net operating income by your debt obligations for the current year. Your net operating income will include all revenue minus operating expenses. Your debt obligations will include all debt, including interest and fees, for the next year.

After plugging your numbers into the formula, your DSCR should be at least 1.25. This shows you (and your lender) that you are bringing in enough income to cover your current debts and can take on additional debt, such as a business loan.

Let’s say that your business brings in $150,000 in net operating income. You have $110,000 in debt obligations for the current year. Plugging these numbers into the equation results in a DSCR of 1.36.

Now that you know that you can afford a loan, the next step is to calculate your borrowing amount. You can do this by dividing your net operating income by 1.25. Once you have your answer, subtract your current debt obligations from this number. This will provide you with the amount of additional debt you can take on.

This may seem confusing, so let’s take a look at the example from earlier. Your net operating income is $150,000. Divide this number by 1.25. This results in a total borrowing amount of $120,000. However, you already have $110,000 in debt obligations. Simply subtract this from the total borrowing amount, and the result is $10,000. This means that you can borrow a maximum of $10,000.

Not only will this help with your own budgeting purposes, but these numbers are used by lenders to determine if you will be able to afford the loan you are requesting. Read on to learn more about calculating how much you can borrow.

Bolster Your Online Presence

Lenders want to loan money to borrowers that are low-risk and will pay their loans back as agreed. This is why the loan process can be so tedious. Lenders evaluate your credit score, your business revenues, and … your social media?

Believe it or not, many lenders are now turning to the internet to learn more about loan applicants, especially small business owners. In fact, it’s been reported in the past that FICO is considering using social media as one of the factors to measure creditworthiness.

Before applying for a loan, consider bolstering your online presence. Make sure that any online resumes are completed updated. Reach out to your clients and customers and encourage them to review and rank your business through social media and review sites like Yelp For Business. You want to show lenders that you are a trusted, well-established business.

It’s also important to never complain about work or discuss financial challenges online. This doesn’t just look negative to lenders, but it’s a general best practice that will help you maintain a veneer of professionalism to your customers, clients, and anyone that searches for you or your business online.

Prepare Your Documents

There’s one thing that can never be avoided when applying for a loan: submitting your paperwork. Although requirements vary by lender, the amount of money you’re requesting, and the type of loan you’re applying for, there are a few basic documents you will need to prepare ahead of time to submit with your application.

For most loans, you will need to show your most recent income tax returns. Prepare a minimum of 2 years’ worth of returns to submit with your application. You may also be required to show bank statements. Although as few as three may be needed, plan ahead by having at least the last 6 or 12 months’ worth of business bank statements.

Additional documentation surrounding income and revenue may also be required. This includes profit and loss statements and balance sheets.

For many loans, you’ll also need to prove that you are the owner of the business. This can be done with business licenses, certifications, and other documents.

If you are purchasing real estate, a purchase agreement may be required. If you’re using the loan to refinance existing debt, you’ll need information related to your debt, including but not limited to account numbers and statements.

Clearly, if you’re a new business or startup, you may not have access to many of these documents. Instead, you’ll need to have a solid, detailed business plan as well as future income projections. You may be required to prove experience in the industry, so you will need to submit your resume with your application, as well as the resumes of any other owners of the business.

You should also know that going into the loan, collateral may be required. Collateral requirements vary by lender, and in some cases, specific collateral is not needed. However, most loans do require a personal guarantee to be signed by every owner of the business. This guarantee holds business owners personally liable for the loan and allows the lender to pursue legal action and even seize personal property if the loan goes into default.

How To Find the Right Lender

You’ve determined why you need a loan. You’ve figured out how much money you need, and this amount aligns with your calculations of how much you can borrow. You’ve gathered your paperwork, and now you’re one step closer to applying for a loan.

However, there are so many lending options out there, where do you even begin? The lender you use depends on various factors, including the amount of the loan, the type of the loan, your creditworthiness, and your time in business. Most business owners turn to three main types of lenders for their business loan needs: banks, the Small Business Administration, and alternative lenders.

When You Should Apply For A Bank Loan

When they need a business loan, many business owners turn to a source they already use for other financial purposes: the bank. Bank loans are popular with business owners because they have extremely low interest rates and excellent repayment terms. Banks offer some of the most affordable loan options on the market.

Banks can also provide high loan amounts, ideal for large expenses like acquiring a business, purchasing a franchise, buying real estate, or improving facilities.

Bank loans are best for applicants with strong credit histories. A credit score in the high 600s and sometimes even at least 700 is needed to qualify for these loans. There should be no bankruptcies, foreclosures, or other major negative items on an applicant’s credit report.

Banks also have extensive paperwork requirements, and collateral is typically required for larger loans. The loan process from banks can potentially take months from start to finish, so business owners with immediate loan needs should seek other lenders.

When You Should Apply For An SBA Loan

Small Business Administration loans are extremely competitive because of their low rates and flexible terms. Because these loans are backed by the government, lenders known as intermediaries have more incentive to loan to small businesses that have trouble qualifying for conventional loans.

The SBA has many loan programs available for business owners. This includes the 7(a) program, which provides up to $5 million for almost any purpose. The 504 program is best for the purchase or improvements of real estate. Microloans are smaller loans of $50,000 or less that are a great choice for startups and businesses that don’t require a large amount of capital. The SBA also has the Veterans Advantage program for military veterans and service members, as well as the Community Advantage program for businesses in underserved areas.

SBA loans require a strong credit history with no previous defaults on government loans, foreclosures, or bankruptcies. Credit scores should be in the high 600s to qualify. For higher loan amounts, collateral is required. Startups may qualify for some programs. Applicants must also fall under the SBA’s definition of a small business, which limits the number of employees, annual revenue, and the company’s net worth.

Because there are so many different programs available through the SBA, these loans are great for just about any business expense. Qualified business owners can apply for these loans through SBA-approved banks, credit unions, non-profit organizations, and Certified Development Companies. SBA loans have similar documentation requirements as banks, as well as similar timelines for approval and funding.

When You Should Apply For An Alternative Loan

More businesses are turning to alternative loans for a number of reasons. Difficulties qualifying for conventional loans and the need for fast financing are two of the biggest reasons alternative lenders are becoming more popular in the small business world.

Alternative loans typically have requirements that are less strict than bank and SBA loans. This means that businesses with lower credit scores, startups and new businesses, or businesses that don’t have a lot of revenue can qualify.

The process for getting approved and funded is also much quicker and easier. There are usually fewer paperwork requirements, and in most cases, the entire process can be completed online. Depending on the type of loan selected, the loan amount, and the lender’s policies, some loans may be funded in just 24 hours.

Credit requirements for alternative loans are not as strict, although higher credit scores yield lower interest rates and better repayment terms. Scores as low as 500 may be approved for certain types of alternative loans. In some cases, collateral will be required for loans, particularly for larger loan amounts or for applicants with lower credit scores.
It is important to note that these loans often come with higher interest rates. Because alternative loans are more expensive, qualified business owners with high credit scores should consider more affordable options.

Business Loan Application Best Practices

You’re almost ready to apply for your loan, but before you do, it’s important to understand a few best practices. While it’s easy to focus solely on the money, it’s also critical to present yourself as a professional, trustworthy business owner to lenders.

Be Thorough

To expedite the process as much as possible, make sure that you’re thorough in every step of the way. From performing your calculations to determine how much money you need and how much you qualify for to gathering your paperwork, your preparations should start even before you apply for your loan.

Do your research and shop around with lenders to ensure you’re getting the most affordable option. When actually applying for the loan, make sure that you’re prepared as well: know what you want to say and how you want to present your business, and have everything you need to back it up.

Be Honest

Lenders want to work with trustworthy, low-risk borrowers. Lenders don’t want to work with anyone that’s dishonest. Be upfront with your lender about everything, from how you plan to use the money to your current financial situation. Outright lying or even just hiding relevant information will not just make you look unprofessional — it will get your loan application rejected.

In addition to being honest with the lender, be honest with yourself. For example, when calculating how much you can borrow, take a good hard look at the numbers. Lying to yourself will only hurt your business in the long term, leading to unnecessary debt and the potential consequences that come with it.

Be Available For Follow-Up Questions

Once you’ve submitted your application, you’re in the clear and it’s just time to wait for your approval, right?

Not necessarily.

The lender may require more documentation or have more questions for you. Minor delays are common, but these minor delays can become major if you’re unavailable to your lender. Always show respect to your lender by answering phone calls or emails as soon as you’re available.

Final Thoughts

Applying for a business loan can be intimidating, but with careful planning and a little knowledge, you can move through the loan process like a pro. Be prepared, know your numbers, keep in contact with your lender, and stay professional, and you’ll soon be on your way to securing your first business loan.

The post First Time Applying For A Business Loan? Here’s What You Need To Know appeared first on Merchant Maverick.

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SBA Loans For Startups: Types, Terms, and How To Apply

Your startup is off the ground and you’re ready to make your next move, but you need funding — or maybe you have a fantastic idea that will completely shake up your industry, and you’re anxious to get your project rolling. Whether you’re in the early stages of setting up a new business or you need a boost to get started, financing is a necessity. However, when lenders look at you, they don’t see the “next big thing.” Instead, they see just one other big thing: risk.

Startups are viewed by lenders as bigger risks than established small businesses, but don’t give up just because you think funding isn’t available. Although it may be more difficult to obtain startup unsecured business loans, it isn’t impossible. With SBA loans for startups, you’ll have access to the financing you need without high interest rates and unfavorable terms.

Ready to grow your business or find government loans to start a business? Read on to learn more about the loan options that can take your startup to the next level.

How Can The SBA Help My Startup?

The Small Business Administration was established to provide small business owners with the resources they need to successfully operate their own businesses. In addition to training and advocacy, the SBA offers loan programs that give business owners the money they need for anything from acquiring a business or franchise to hiring new employees to funding equipment purchases.

The SBA helps all small businesses, including startups. It’s no secret that startups are viewed as riskier endeavors. Whereas established businesses have proof of their success in the form of financial statements, tax returns, and other documents, startup owners are reliant on their business plans and industry experience. After all, the idea behind a startup may be a game-changer, but it isn’t yet proven—at least not in the eyes of a lender.

The SBA offers different loan programs than you’ll see elsewhere. In fact, funding isn’t distributed directly through the SBA. Instead, they have established several loan programs targeted at small businesses and startups through intermediaries — think banks, private lenders, and even non-profit organizations. The SBA has outlined a set of standards for each program; because the administration backs these loans, there’s less risk for lenders – and more funding opportunities for you.

These standards keep interest rates low and terms flexible. SBA loans are designed to help businesses grow and/or stay above water (as opposed to drowning in debt).

Types Of SBA Funding For Startups

The SBA doesn’t offer funding that is specific to just startups. Instead, new businesses can qualify for many of the programs that are used by established businesses. Most of the SBA loan programs don’t have a requirement for time in business. However, it is important to note that you will have to find an intermediary that works with startups once you’ve evaluated your options and selected the type of loan that works for your business.

Microloans

The first resource for startups that need smaller loans should be the SBA Microloan program. Under this program, small businesses can receive up to $50,000 from a non-profit intermediary. On average, the typical amount funded through the Microloan program is $13,500.

Microloans are available to startups provided that they are for-profit businesses and have a solid business plan. Interest rates vary by lender, ranging from 6.5% to 13%. The average typically falls on the lower side at approximately 7.5%. The maximum maturity for a microloan through the SBA is 6 years.

Fees may be required by the intermediary to receive a microloan. Intermediaries can charge between 2% to 3% of the loan amount for packaging fees. Additional fees to close the loan, including recording fees, collateral appraisals, and credit reports, may also be passed on to the borrower.

The SBA limits how the funds from microloans are used by the borrower. Loan disbursements can be used to purchase materials, furniture, supplies, inventory, and other necessary items for the startup. The money can also be used as working capital. Funds can not be used to purchase real estate or to pay off or refinance existing debt.

The SBA Microloan program is a great choice for any startup that needs working capital or to purchase equipment that will help expand the business or get a project off the ground. However, startups that need more capital or don’t want as many limitations on how they spend their funding will be better served by another SBA loan product. If microloans seem to fit your needs, learn more before connecting with a lender.

Standard 7(a) Loans

The SBA 7(a) program is the most popular choice for most startups and small businesses because of the flexibility it offers.

Startups can receive up to $5 million in funding through the 7(a) loan program. In addition to having access to higher loan amounts, borrowers will also have more flexibility in how they can use the funds. Standard 7(a) loans can be used for equipment or inventory, the purchase of property, refinancing debt, renovations, or other purposes.

Under this program, payment terms vary depending on how the loan proceeds are used and the borrower’s ability to repay the loan. For real estate purchases, the maximum repayment term is 25 years. If the proceeds are used for equipment financing, inventory, or working capital, repayment terms are set for a maximum of 10 years. Interest rates vary but remain very competitive at 7.25% to 9.75%. Borrowers can also expect to pay up to 3.5% for guaranty fees, and a down payment may be required with the purchase of real estate or equipment. Find out more about the terms, rates, and eligibility of SBA 7(a) loans.

The long repayment terms, low interest rates, and overall flexibility make this a top choice for many startups and small businesses. That said, 7(a) loans can take a while to be processed and funded — a potentially major drawback for business owners who need cash fast. Potential borrowers can expect to wait a minimum of 30 to 90 days to get through the entire process from application to funding. Startups that require money sooner should consider other options, such as peer-to-peer lending or another source of funding.

SBA Community Advantage Loans

A startup that doesn’t meet the eligibility criteria for the standard SBA 7(a) loan should consider applying for the SBA Community Advantage program. This program offers very similar rates and terms to the traditional 7(a) program with just a few minor differences.

One of the most significant differences is the maximum amount that can be borrowed through this program. Borrowers can receive up to $250,000 with an SBA Community Advantage loan. The identical guidelines from the 7(a) program apply for how the money is spent. It can be used to purchase another business, finance equipment, or for just about any business purpose. Interest rates for these loans are comparable to those set forth by the lender based on SBA guidelines.

While the lowered maximum loan amount is a drawback, this program can be extremely beneficial for startups. This is because Community Advantage loans are designed for underserved communities, such as low-income areas. However, startups are also qualified to receive these loans. Businesses that have been operating for two years or less that have been disqualified from other loans may receive a Community Advantage loan if all requirements set by the SBA have been met.

SBA Express Loans

Another SBA product similar to the standard 7(a) loan is the SBA Express Loan program. This loan program offers benefits including low interest rates and long repayment terms. However, there are two main differences between the 7(a) and the Express programs: the maximum loan amount and the approval turnaround.

Applicants for the SBA Express loan can receive up to $350,000 through the program. This could be a drawback for anyone seeking more capital. However, this program’s biggest advantage is that it comes with expedited turnaround times. After the application is submitted, an approval decision is guaranteed within 36 hours. Although the time it takes to complete the process and receive funding could add weeks to the timeline, getting an approval quickly means that small business and startup owners no longer have to shop around and can rest assured that the money they need will soon be on the way.

Because only a maximum of 50% of the loan is backed by the SBA, interest rates may be slightly higher than the standard 7(a) loans. However, all interest rates must fall within the SBA’s guidelines, so borrowers won’t get slapped with ridiculously high interest rates.

If this sounds like it’s the right type of loan for your startup, learn more about SBA Express loans.

SBA CDC/504 Loans

The SBA CDC/504 loan program is designed for small business owners who want to make a fixed asset purchase to expand or update their business. This loan provides funding for the purchase or upgrade of commercial space or land, the purchase of long-term equipment, or refinancing debt related to the upgrading or expansion of the business.

This loan program is different because it requires the borrower to work with two partners to finance 90% of the costs of the project. A bank or other lender will loan a maximum of 50% toward the project cost. A Certified Development Company, or CDC, will provide up to 40% of the cost of the project. 504/CDC loans are backed by the SBA. The borrower is responsible for paying the remaining 10% of the project cost.

The interest rates for these loans are determined by the 5-year and 10-year U.S. Treasury issues market rates. Currently, maximum interest rates are just above 5%. Terms of 10 and 20 years are available under the 504 loan program.

This program is a good choice for startups looking to expand or improve their commercial space. With fixed interest rates, longer terms, and up to 90% financing, this is a very competitive product. However, business owners seeking capital or funds to use for other purposes will be better off applying for other SBA loans. Potential borrowers will also have to take the time to find a lender and a CDC to work with under this program, which could be time-consuming.

SBA Startup Loan Borrower Requirements

Who can qualify for a startup SBA loan? Restaurant startups, tech companies, or any other businesses that have been in business for two years or less (and meet the requirements of the SBA) are eligible.

It’s important to note that because these loans have such favorable rates and terms, they can be difficult to obtain. In order to get an SBA startup business loan, you’ll have to find an intermediary that works with startups. You’ll also need to come prepared with the right credit score and documentation to qualify.

For all of the SBA sources of funding for startups mentioned here, there are a few basic requirements across the board. Qualified businesses must be for-profit operations. They must do business in the United States, and they must have an adequate amount of owner equity. SBA loans should also be pursued after all other means of funding have been exhausted. The business must also demonstrate a reasonable need for requesting the loan.

Businesses that invest in real estate, engage in illegal operations, operate as non-profits, or specialize in loaning money are disqualified from applying for these programs.

To qualify for an SBA loan, one of the most important things to remember is that a good credit score is required. Generally, scores should not fall below 680, but this can vary by lender. Credit reports should reflect a good payment history, and any negative items must be explained to the lender. There should be no recent bankruptcies, foreclosures, or tax liens on the report. Personal credit history and business history (if applicable) will be considered by the lender.

If loan proceeds are to be used to acquire a business or to purchase property or equipment, equity or a down payment of 10% or more may be required based on the lender. Ready to learn more? Read on for more information about the requirements of SBA loans.

Do SBA Startup Loans Require Collateral?

Another potential requirement of receiving an SBA startup loan is collateral. In short, collateral is something of value that is pledged in the event that a borrower defaults on the loan. Collateral can be real estate, equipment, vehicles, or other items of value.

Because startups are seen as riskier investments by lenders, it’s very common to have to put up collateral in order to receive funding. The one exception to this rule is when the loan does not exceed $25,000. Through the 7(a) standard, Express, and Community Advantage programs, no collateral is required under SBA guidelines for any loan up to $25,000. Loans exceeding this amount will require collateral potentially valued up to the total amount of the loan. For CDC/504 loans, the project being financed often serves as the collateral.

For microloans, the SBA does not require collateral but does advise lenders to follow lending best practices and collect collateral or equity if deemed necessary.

Personal guarantees are also required to obtain SBA loans. This means that a borrower agrees to put up personal assets if they default on the loan. In the event that a startup does not have enough business property, personal assets will be used to back the loan.

One important thing to note is that while startups will not necessarily be disqualified from SBA loans by a lack of collateral (if all other conditions are met), your chances of being funded will improve if you have at least some collateral.

How To Get An SBA Loan For A Startup

Now that you’re familiar with the options the SBA has to offer and you’ve found a product that fits your needs, it’s time to get the application process rolling. The first step is to find an SBA-approved lender that operates in your area. If you have a working relationship with a financial institution, you can ask for recommendations. You can also be connected with a lender through the SBA’s Lender Match service.

In addition to finding a lender that offers SBA loans, it’s also important to inquire as to whether they work with startups. Some lenders see startup companies as too much of a risk, so it’s important to ask before devoting too much time to the process. You’ll also want to ensure that they work with startups on the specific loan that’s grabbed your interest.

Once you’ve connected with a lender, you’ll have to speak with them on the phone or, in many cases, meet with them face-to-face. While each lender has its own requirements, there are a few things you’ll always need to have on hand when applying for an SBA loan.

Because startups don’t have the history of a more established business, documentation — like three years of business income tax returns or several years of business financial statements — won’t be available. Instead, you can provide a few other standard documents, as well as a couple of additional items required from new businesses.

As previously mentioned, credit scores and reports are extremely important. Even if you haven’t yet established business credit, your personal score and report will be evaluated by a lender. If you aren’t sure of where you stand, check out these resources for getting your free credit report online. Dispute any inaccuracies with the credit bureaus and be prepared to explain any black marks on your report.

Additional SBA startup loan requirements include your personal financial statement, personal income tax returns for the last three years, resumes for each principal of the business, and your business certificate and licenses.

Because you are seen as a risky borrower, you will need a solid business plan that includes details about the current status of your business, as well as future plans. You will also need business projections. A projection of at least one year is the minimum, but more may be required by your lender. You must also be prepared to prove that you have several years of experience in the industry. A minimum of 2 years is generally preferred.

The lender will evaluate your personal credit, your business plan, and your ability to repay the loan. Once the SBA startup loan application process is completed and all paperwork has been submitted, you’ll simply need to wait for final approval. This could take weeks or even months if a challenge arises. With an SBA Express loan, you’ll receive your decision within 36 hours. Once approved, you’ll work with the lender to close your loan and receive your funds.

Final Thoughts

The process for obtaining an SBA loan is daunting for any business. As a startup, the process can be even more complicated. However, with a solid business plan in place and a good credit score, it’s possible to obtain the funding you need with competitive rates and terms and put your new business on the path to success. Good luck!

The post SBA Loans For Startups: Types, Terms, and How To Apply appeared first on Merchant Maverick.

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How To Advertise On Pinterest Effectively

How to Advertise on Pinterest Effectively

Pinterest was launched in 2010 and has grown to at least 200 monthly active users in 2017. The social sharing platform is designed to help people discover information on the internet. Therefore, just creating an account on Pinterest can draw viewers to your brand.

Pinning content from your own website puts it in front of a new audience. Even pinning other people’s content can draw followers to your Pinterest account. You can get more data from your account. Optimizing the SEO of your Pinterest boards can boost their organic search rankings in Google. All of these strategies are free.

The platform began experimenting with monetizing certain pins in 2014, initiating an effective way for companies to advertise. Nowadays, advertisers can create Promoted Pins, which show up alongside all of the other pins on the page. In this image, you can see that the pin that says “Get 500% more traffic” indicates that it’s promoted by Pinterest in the description below it:

In this case, Pinterest is using its platform to advertise tips for businesses. It’s always encouraging to see a company using its own advertising services. That’s one way to know that the system works.

What Is Pinterest?

First, let’s discuss Pinterest and how it works. Some people say that Pinterest is a social network. Others refer to it as a search engine. Through Pinterest, you create a profile and then “pin” visual content onto different “boards.”

It’s like a collection of virtual bulletin boards. Instead of cutting out paper images from magazines, though, you save images that you find on the internet. You can write a description or include a link with those images so that you can refer back to the website from which they came.

You can create several boards and label them however you’d like. Most people set up boards for different categories. For example, you might have boards that are labeled:

  • Home décor
  • Fun summer activities
  • Dessert recipes
  • Knitting and crochet
  • Boho style

If you’re looking for inspiration for a project, a shopping venture or content that falls in line with your interests, you can search for it on Pinterest. Your search results appear as visual pins with short descriptions underneath them. This is what came up when we searched for “watercolor tutorials”:

To find out more about each search result, you can click on it. From here, you can see the full description, the URL from which the image came, when it was published and any comments that other users have left.

Here’s where things get social. You can leave a comment or ask a question. You can also follow the original poster’s account. Therefore, simply pinning items that interest you can drive traffic back to your Pinterest page and potentially to your website.

Emarketer says that there are 2 billion monthly searches on Pinterest. The platform drives about 5 percent of referral traffic to websites.

When you log onto Pinterest, you’ll see your feed, which shows the pins that the platform thinks that you’ll be interested in. You might see pins from people you follow or a combination of content that you might care about, based on other items that you’ve pinned.

However, Pinterest prefers to show content from trusted sources in users’ feeds. Therefore, if you’re using Pinterest for your business without advertising, you need to make sure that you pin high-quality content and that your pins are receiving engagement in the form of click-throughs, saves and comments.

Why Pinterest Advertising Works

While Facebook is the largest social media platform, Pinterest is competitive with Instagram, LinkedIn, Reddit, and Twitter, according to Pew Research. Twenty-six percent of all American adults use Pinterest, and most of them are women. Pinterest reports that 40 percent of people who actively pin have a household income of at least $100K. If you sell products targeted toward women who want to shop, you’re in the right place.

Here are some other statistics about Pinterest users and their purchasing power:

  • Millenials use Pinterest as much as Instagram.
  • People who use Pinterest are ready to make a purchase.
  • 93% of active pinners use the platform to plan future purchases.
  • 73% of pinners say that brand content makes the platform more useful.
  • 61% of pinners have bought something after viewing a promoted pin.
  • 75% of saved pins are initiated by businesses.
  • People who use Pinterest spend 29% more on retail than non-users.

People search the platform for information that they can use to fuel upcoming purchases for things like home renovations, weddings, parties, vacations or having a baby. This is the place where people are looking for new information, ideas and brands. If you can provide these new ideas, you can make connections with a new audience.

Pinterest advertising looks natural. It fits into place with the other pins in your feed, and it doesn’t detract from or interrupt the user experience. Promoting your pins puts you in front of a receptive audience who is looking for products and ideas that will help them make their next move.

Types Of Pinterest Advertising

There are several types of Pinterest ads, including:

  • Promoted pins
  • Promoted video pins
  • One-tap pins
  • Promoted app pins
  • Cinematic pins

Promoted pins look just like a regular pin, except that they have the word “Promoted” at the bottom of the pin. Businesses pay Pinterest to give these priority over non-promoted pins. Once someone saves your promoted pin, it’s considered an organic find, and that person will no longer see the word “Promoted.” Other people who follow these pinners may find and save these pins, bringing you added traffic for free.

If your promoted pin contains a video, it will appear in search results, news feeds and a “More Like This” section that comes up below a clicked pin and shows similar content. The video will play automatically.

One-tap pins bypass the close-up image and “more details” page that normally shows up when you click on a pin in your feed. When a user clicks on these ads, they go straight to a landing page that you designate. You might think that this is a great way to get your audience in your lap, but some users are surprised by the change in the normal process and click off of your website quickly to get back to Pinterest.

If you are promoting an app, you can use a promoted app ad to get people to install it. The ad will include an app icon and install button so that users don’t have to leave Pinterest to sign up for your app.

Cinematic pins contain animation that moves when a user scrolls. This captures users’ attention and makes them feel like they’re in control without missing the end of the video.

5 Things To Do Before Advertising On Pinterest

Paying to promote pins can be an effective marketing strategy. However, there are a few steps that you should take before you set up your first advertisement on Pinterest.

1. Register For A Business Account

If you haven’t used Pinterest before, you’ll need to create a new account. It’s free to set up, and it takes less than a minute. Start by going to Pinterest’s Business Account page and clicking “Sign Up.”

Enter your email address, password and business name, select your business category from the drop-down menu and click “Create account.”

Follow the next steps, which are self-explanatory. These include selecting your language and country, adding your website URL and picking at least five categories in which you’re interested.

If you already have a Pinterest account, log in and click on Settings. It will say “Business Account Basics” on the top left if it’s a business account. If it’s a personal account, you can convert it to a business account by going to this link.

2. Claim Your Website

When you set up your business account, you should have added your business website URL to your profile. If you didn’t do that yet, go to your settings by clicking on the profile image on the top right when you’re logged into your account. Scroll down until you see the “Claim Website” section.

After you claim your website, you can utilize features such as:

  • Website analytics – Track traffic to pins from your site.
  • Featured logo – Add your profile picture to any content that’s pinned from your site.
  • Early access to tools – Be the first to hear about new business tools that Pinterest rolls out.

To claim your website, you’ll need to either add a bit of code to the <head> section of your website’s index.html file or download a file from Pinterest and upload it to your site’s root directory. After you do that, you can submit your website to Pinterest for review.

3. Install A Conversion Tag

You can add another Pinterest code to every page that you want to track on your website. The code is the same for every page, but you can use it to retarget people who have visited specific pages on your website.

To do this, click on “Ads” on the top left of your account, and then select “Conversion Tracking.”

Choose “Generate Pinterest Tag.” You’ll get code that you can insert between the <head> and </head> elements in the HTML of every page on your website for which you want to track visitors.

4. Upload Your List

If you have amassed a list for your newsletter, you can upload it to Pinterest so that you can target the same users with your Pinterest ads**. Just create a .csv file with the email addresses that you’ve collected over the years. Log into your Pinterest account.

**If you go this route – you need to have your audience’s consent. If you are in the EU, because it’s the law. If you are outside the EU, because you need to be cool, not creepy.

Click on Ads > Audiences.

Then, click on “Create Audience.” Choose “A list of customers that you upload” from the window that appears. Name your audience, and include the date so that you can update it a few months from now.

Pinterest will match up the email addresses from your list with those of its users so that you can show ads to the same people. In the future, you can also create “an actalike audience that behaves similarly to the one you already have.” This will choose people with similar demographics and interests as the people on your email list.

5. Pin Some Content

You can’t promote a pin unless you’ve pinned it publicly. Therefore, if you have created a new Pinterest account in hopes of setting up some ads, you should take some time to create boards and pin content for free before you put money into it.

Make sure that all of your pins contain high-quality images. The visuals are going to grab people’s attention before anything else. Therefore, they need to be top-notch.

Vertical Pins

Pinterest displays images vertically. Therefore, you need to use the correct aspect ratio to get the most out of your pins’ appearance. For years, Pinterest has claimed that a 2:3 aspect ratio is ideal. However, some pinners said that posts with these dimensions didn’t perform well. Some people even created extra-long posts to capture people’s attention.

As of June 2018, however, Pinterest said that those “giraffe pins” may be cropped and won’t show up as frequently in people’s feeds. The ideal aspect ratio is 600 pixels wide by 900 pixels high (720 x 1080 works well too). Square images look good, and they are easy to import from Instagram.

An aspect ratio of 600 x 1260 (with 1260 being the height in pixels) won’t be cropped. Anything taller will.

If you’re creating long giraffe pins, make sure that they add value. Infographics and step-by-step tutorials are ideal for these space-hogging pins.

Rich Pins

Creating Rich Pins can help people learn more about your products. Rich pins contain additional information, including:

  • App – Takes viewers to the app store for download
  • Article – Includes a headline, author and story description
  • Product – Includes pricing, availability and purchase location
  • Recipe – Includes title, ingredients, cooking times, serving information and ratings

By adding the metadata directly to the pin, brands can increase engagement. Picture a recipe that contains a gorgeous picture of the food that you’re eating with the recipe itself below it. The pins pull from the metadata on your website.

Creating Rich Pins is a two-step process. First, you must add metadata to the articles, products and recipes on your site. If you have a WordPress site, you can do this easily with a plugin like Yoast. Then, you need to verify your Rich Pins with Pinterest. Once you validate one URL with a Rich Pin on your site, you’re all set. You don’t need to validate all of the URLs with Rich Pins.

Buyable Pins

Pinterest rolled out Buyable Pins in 2015 to make it easier for its audience to shop directly from a pin. These pins list the price in blue and contain a Buy It button so that people can make a purchase right from the app. When someone clicks Buy It, they go directly to the checkout, where they can pay with a credit card or Apple Pay.

If you’re a retailer or sell your own products, you’ll need to have a Shopify store that’s linked with the Pinterest sales channel to take advantage of Buyable Pins. As long as you point a pin’s URL to the product detail page on your Shopify store, it will activate as shoppable.

Pinterest automatically matches your product feed with your pins and generates Buyable Pins for any products that you have already pinned. For any other product, you should create pins from scratch. These can include additional images so that more people can discover your products.

Buyable Pins are similar to Rich Pins in that they display additional information. Rich Pins, however, don’t send you to the checkout when you click on them.

How To Set Up A Pinterest Ad

If you’ve decided to spend money on advertising, you might wonder how to advertise on Pinterest. This is a step-by-step tutorial that teaches you how to do it.

1. Create The Ad

When you’re ready to start advertising, click on the + sign that appears toward the top right, and then select “Create Ad.”

This brings you to your Ads Manager, where you can create your campaign.

2. Set Your Goals

You’ll begin by selecting your campaign objective.

Then, you’ll enter your campaign details. You’ll have to come up with a name for your campaign if it’s new, or you can select an existing campaign from the drop-down menu. You’ll also designate your daily and lifetime budget for the campaign here.

Then, decide on your campaign placement, which includes whether you want to make your ads one-tap. This feature can’t be edited once your campaign starts running.

If you’re creating an app install ad, you will have the option to select whether to optimize the campaign for completed installs or visits to the app download page. Both are charged on a cost-per-click basis. Pinterest also has direct integrations with mobile measurement partners, or MMPs, which help you track the install performance.

Finally, click “Create campaign and continue.”

3. Set Up An Ad Group

An ad group is a set of promoted pins that fall under the same campaign. You can have multiple ad groups for one campaign, which means that you will have a separate budget for your ad groups than you do for the campaign as a whole.

Understanding Ad Groups

Each ad group can have multiple promoted pins within it. You can assign different budgets and targets to each ad group, though. Therefore, you can use ad groups to set up unique budgets for different marketing areas, such as regions, demographics or products. You can also use ad groups to test the design, placement and objectives of your advertisements without building separate campaigns.

For example, you could create separate ad groups with maximum daily budgets to target:

  • Your email list
  • People who have visited related pages on your website
  • Actalike audiences

To keep everything straight, you should name your ad group based on its organizational structure, such as who you’re targeting or what promoted pins are showing up within that group.

4. Create A Target Audience

On the ad group page, you’ll be asked to create a target audience. This helps you get your ads in front of the right people. You can target viewers based on the following criteria:

You’ll need to give this audience a name and description. If you choose to retarget people who have visited your website, you’ll have to create a Pinterest tag to track them. If you choose to target individuals from an email list, you’ll be asked to upload the list.

You’ll be able to further clarify your audience by interests, such as boards and pins that they’ve interacted with in the past, keywords, languages, locations, devices and genders.

5. Create Your Maximum CPC Bid

On the page where you create your ad group, you’ll be asked to set a maximum CPC bid. This is the maximum amount that you want to pay per audience action, whether that’s impressions, clicks, engagement or app download. You won’t be charged the full bid unless it’s necessary to beat out the next-highest bidder.

6. Select Your Promoted Pin

Now, you can select the pin that you want to promote. You can only choose from items that you’ve publicly pinned. The pin doesn’t have to be one that you have initiated through your own website, although it would probably be a good idea to use an image that you’ve created.

Next, you’ll give the promoted pin a name (optional) and set the URL of the landing page that you want visitors to end up on when they click on it.

Consider the URL carefully. Ideally, you’ll send people who click on your ad to a page dedicated to your Pinterest audience. The landing page should have something to do with the pin that led people to it. If you’ve added Pinterest tag code to your website, you’ll be able to track the success of each promoted pin.

Click “Promote Pin” when you’re finished. The ad will go to Pinterest for review, which can take 24 hours. At this time, add your billing details so that you can pay for your ad once it’s approved.

The Quick Way To Promote A Pin

Pinterest also provides a way to promote your pins in about 10 seconds. Go to your profile and hover over a pin that you want to advertise. Click on the Promote button.

A window will open up where you can add all of the promotional details, including the URL, daily budget, campaign duration, target audience and keywords.

Tips And Tricks For Optimizing Your Pinterest Advertising

Just putting yourself out there isn’t always enough to gain an audience. Instead of wasting your dollars by advertising blindly, follow this advice to get the most out of your budget.

Promote The Best Pins

You might wonder what pins to promote when you advertise on Pinterest. Those with strong visuals do best. Making multiple pins for the same product is a good idea. You can show different angles, styles and descriptions to pull in different customers. Adding your brand name or logo to the image improves credibility.

If you sell products, Pinterest says that photographing them in lifestyle shots is more effective than displaying the product on its own. For example, a fashion pin should show someone wearing the clothing in a real-world setting. Home décor pins do better when they concentrate on the product instead of people. Hair and beauty products get great engagement when the items are displayed against a plain, contrasting background.

Most experts recommend promoting pins that are already doing well. Even though you might figure that boosting a low-performing pin could help it get in front of your audience, promoting a high-performing pin is more likely to give you results. Wouldn’t you want to pay for results as opposed to a lackluster reception to your ad?

When you’re picking a pin in step 3 of the ad creation process, you have the option of choosing from all pins, 30-day most clicked pins or 30-day most saved pins. Use this to your advantage to promote your most engaging content.

Add Text To Your Pins

Even though Pinterest relies on photos, it doesn’t hurt to add a little text to your images. The text overlay should clarify what viewers are looking at without detracting from the design as a whole. The words shouldn’t detract from the aesthetic. A simple overlay works wonderfully.

Make sure that you’re using the description wisely too. A call-to-action helps users stay engaged. You can ask people a question or give an instruction, such as “Learn more” or “Buy now.” You might even try having your call-to-action say, “Pin this for later” to remove the urgent sales quality but encourage people to save your pin.

Consistently Monitor And Analyze Your Ads

It’s hard to predict what’s going to resonate with viewers. Pinterest is a visual platform, and some images may capture more attention than others. When you’re just starting out, test everything, including the:

  • Image
  • Description
  • Call-to-action
  • Keywords
  • Bids
  • Audiences

After doing this consistently for a while, you’ll begin to notice which combinations are more effective.

Focus Your Keywords

Although you’re allowed to include up to 150 keywords with a promoted pin, you don’t have to use all of them. If you’re all over the place, you won’t get many click-throughs. Think about the way that your audience interacts with Pinterest.

The keywords should match the way that your target audience uses the platform (similar to how you “theme” keywords for SEO). Make sure that the keywords are also consistent with the information in the pin and the landing page to which they’re directed.

Because Pinterest is a search engine, keywords are crucial to your pins’ visibility. Create your descriptions the way that you would create meta tags for a web page’s title and description. Using trending keywords earlier in the text will help your pins get noticed.

When you place pinnable images on your website, make sure that you include keywords in the alt text. Your boards should contain long-tail keywords. Use Pinterest Analytics to track which pins get the most impressions and experiment with the keywords that you use.

Add Value

The best practices for advertising on some other platforms involve using a call-to-action to send people to a lead page. However, people who search using Pinterest are looking for information. They might get annoyed if they come across your promoted pin, click on it to investigate it further and reach a page that simply asks them for their email address.

An effective way to use Pinterest for advertising is to send people to a landing page where they can explore what you offer. You can certainly include a lead generation form on this page, but don’t make it the only asset at that URL.

Group Boards

Group boards are sometimes referred to as shared, community, collaborative or contributor boards. Using them can lead to significant increases in traffic.

More than one person can add pins to a group board. Therefore, when anyone adds pins to the board, those pins may appear in the home feed of anyone who follows any of the board members. This exponentially increases your reach.

If you focus on sharing your own content to group boards, you’ll gain exposure for your brand. Keep the content relevant, however.

Because Pinterest rewards high-quality pins with exposure, make sure that you join the right group boards. Those that are targeted to a specific theme usually have more traction with an audience and get more engagement. Click on several of the pins on a group board that you’re thinking of joining to make sure that the links aren’t broken or redirect to a spammy or inappropriate site.

Pinterest is an opportune way to expose your brand to a new audience. The platform isn’t just used by crafty people, DIY-ers and foodies. Travel, fashion, design, hobbies, health and beauty, entertainment, accessories and sporting goods are commonly searched categories on Pinterest. Creating a business account for your brand is free, and you can play around with promoting your pins at a low cost to determine whether it works well for your business.

Next Steps

Pinterest holds a lot of opportunity for businesses of all sizes. It’s also straightforward and fairly risk-less to experiment there.

You’ll learn more from running a single experiment than any blog post – so go for it!

If you want to know other ways to use Pinterest for marketing, check out Nate’s post on Pinterest & SEO research in addition to Using Pinterest Analytics.

The post How To Advertise On Pinterest Effectively appeared first on ShivarWeb.

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How To Advertise On Spotify Effectively

How to Advertise on Spotify Effectively

People don’t just listen to music anymore; they experience it. Advertising on a platform like Spotify can expose listeners to your brand in an engaging, involved way.

Spotify can be used to market your business similarly as a radio ad. You can also sponsor streaming sessions and playlists to get in front of the people who are most likely to resonate with your message.

Why Advertise On Spotify?

Statista reports that there were 70 million paying Spotify subscribers in January 2018. However, it’s really the people who listen for free that get to hear your ads. In March 2017, there were about 90 million people who took advantage of the service for free, according to the Verge.

If Spotify is trying to push listeners to its premium version, which doesn’t play or show advertisements, why would you want to advertise on the platform? Sure, Spotify is trying to make money from premium memberships. However, it isn’t writing off the free offering. In fact, a recent statement by Spotify’s vice president of product, Jason Richman, confirmed that the company views its free version as a separate service that it wants people to use.

The Wall Street Journal reported in 2017 that Spotify was slated to become the third-largest advertiser in the world, following the footsteps of Facebook and Google. Spotify started out offering a free, advertisement-sponsored subscription service to help music fans connect with the songs and artists that they love. They quickly realized the opportunity that advertising could provide them.

Business Insider said that because of its global scale and huge collection of data, Spotify is trying to be a primary advertising solution for just about everyone, including small and medium-sized businesses. The company launched Spotify Ad Studio, a self-serve advertising platform, in 2017. This allows smaller and mid-sized companies to advertise.

Plus, Spotify uses its advertising platform to convert users to the premium product, as you can see in the image below, which shows a mobile takeover ad that appeared while we were navigating to our Discover Weekly playlist. The fact that the company believes in the power of its own advertising gives us faith.

If Spotify can’t sell ad space, it will lose quite a bit of revenue. The free platform isn’t going anywhere.

And if you think that people get annoyed by ads on Spotify, think again. Acquisio reports that 75 percent of listeners expect advertisements on a free streaming service. Almost 50 percent say that commercials are less disruptive on Spotify than on regular radio.

Part of the appeal of Spotify is its ability to connect users. Those who register their Spotify account through Facebook can share playlists with their friends. Spotify is largely about discovery. Check out what your friends are listening to, and you might learn about an artist that you’ve never heard before.

Even if users don’t connect to Spotify through social media, the platform incorporates a similar connective quality. Users can follow other Spotify users on the platform. When they search for a particular song, artist or album, they can view playlists that other people have created using that song.

So why should you advertise on this platform? Because people are using it to stay up-to-date with the world. If people are using Spotify to learn about new music, they might also learn a little about what you have to offer when they hear your advertisement.

If you want to target a hip audience that’s interested in staying in the know about current trends, you might want to advertise on Spotify. If you’re a musician, advertising on the platform is a no-brainer.

Plus, Spotify collects data from all of its logged-in users. According to Smart Insights, this means that marketers can take advantage of unique intelligence, such as users’:

  • Moods
  • Preferences
  • Listening habits
  • Activities

Over time, companies can learn more about the people they wish to target, gaining insights into platform behaviors, routine activities and wider interests. This allows brands to create tailored experiences that aren’t possible on other platforms.

Because Spotify requires users to log in, it has extensive data about what people are listening to and how they listen. The company also compiles real-time information about lifestyle, entertainment preferences, family status and technology use.

How Do Ads Work On Spotify?

If you have used Spotify for free, you probably know how often advertisements are played. When you start a streaming session, you can listen to one sponsored advertisement to get a 30-minute session of uninterrupted music. After that, Spotify will play an advertisement about every 15 minutes.

Users can’t skip or fast-forward the ads. They can choose to watch a video from an advertiser to get another 30-minutes of ad-free music from time to time. If they’re listening via a laptop or computer, a branded overlay hangs out on the screen at almost all times. It’s not disruptive—it can be closed so that the user can navigate the site—but it will reappear.

Audio and display ads aren’t the only way to market a brand using Spotify. Businesses can sponsor listening sessions, providing videos that users watch in exchange for uninterrupted listening.

Marketing on Spotify can be even more creative, though. Businesses can put together branded playlists. These can include a logo and a link to the company’s landing page. Even President Barack Obama used a branded playlist to help bring awareness to his brand in 2016.

In sum, there are three main paid advertisement types with which marketers can experiment:

  • Audio – Plays between songs during active listening sessions. Accompanied by a clickable display that can take users to a specific URL or landing page.
  • Video – Sponsored sessions, video takeovers or branded moments video advertising that rewards viewers with 30 minutes of uninterrupted music after watching.
  • Display – Homepage banners, homepage takeovers.

What Can You Advertise On Spotify?

You can use Spotify to raise awareness for any brand, company or organization. You can also use it to promote music-related content or an event, such as a concert.

If your target audience uses the platform, it makes sense to try it out. Using multiple channels for advertising can lead to steady growth for your brand.

One of the benefits of using an audio ad instead of a video or image is that users can access it when they’re not watching a screen. For example, many people listen to Spotify while driving or in the shower. Reaching them with a DIY audio ad using Spotify’s DIY Ad Studio can help you influence them in a way that you might not have tried before.

In fact, Nielsen analyzed Spotify audio ads and found that listeners are more likely to enjoy and recall audio ads through streaming services than display ads. Audio ads are also more apt to increase purchase intent.

How Much Does Advertising On Spotify Cost?

Using Spotify’s self-serve advertising platform is the way to go if you don’t have a huge ad budget, although the service is available to companies and budgets of all sizes. The minimum is $250, with each ad served costing marketers about $0.015 to $0.025. The price varies depending on your targeting choices. Aiming at a larger target market will typically cost you more per ad.

You can target your audience based on the following:

  • Age
  • Gender
  • Location
  • Activity
  • Music taste/listening behavior
  • Mobile
  • Desktop

When you initially set up an ad using the DIY Ad Studio, you can choose from a range of options for your total campaign budget. As we describe in more detail below, you have to select a custom option to enter the minimum of $250. If you launch your ad and realize that it’s not bringing you the results that you want, you can stop the ad.

That means that you’re technically not committed to the $250 budget minimum if you find that the platform isn’t working for you. If you stop an ad after paying only $30, you won’t be billed for the unused portion.

You can also purchase advertising programmatically and through Spotify’s direct sales department. These options usually cost more than using Spotify Ad Studio.

What Spotify Ad Studio Can And Cannot Do

Spotify Ad Studio makes it simple for anyone to set up, track, manage and analyze audio ads. Some of the other things that you can do with Spotify Ad Studio include:

  • Creating and record your own audio ad
  • Reaching free Spotify users
  • Retarget people who have engaged with your ads
  • Create successive ads to share an extended story
  • Track your campaign, including clicks and cost

If you are an approved advertiser for a specific artist, such as the label or a promoter, you can target people who follow that artist. For example, if you’re promoting a concert, you can reach out to the people who follow the performer on Spotify.

You won’t be able to target fans of particular musicians if you’re not an approved advertiser, but you can still target by genre or playlist. Genre targeting lets you deliver your ad after a user has listened to a specific type of music. This is helpful if you know that the majority of your target audience listens to smooth jazz, for example.

Playlist targeting lets you deliver your message to people who are listening to tunes that are associated with certain activities or moods. Spotify categorizes different playlists and refreshes its inputs every day.

You can’t target fans by zip code, but you can select a country, region or U.S. state. As of the time of this writing, Spotify didn’t offer a feature to exclude certain people. That might come in handy if you’re promoting a concert but don’t want to waste money marketing to people who have already bought tickets.

How To Create Spotify Ads Using Ad Studio

To start creating your own Spotify ads, head over to Spotify Ad Studio and click Sign Up. The platform is still in beta, and it’s currently only accepting advertisers from the U.S., U.K. and Canada. You’ll also need a Spotify account. The system will set you up with one when you sign up for Ad Studio if you don’t have one already.

Once you have registered, you can start creating an ad. Click on Your Ads on the top right corner of the screen. Then, click Build Ad on the top left corner to begin working on your ad.

There are three steps to building an ad:

  • Set Up
  • Budget & Audience
  • Ad Creative

1. Set Up

In the set-up phase of ad creation, you get to choose your objective and name your ad. This step is easy; unless you’re an authorized promoter for a particular musician, you’ll choose “Raise awareness for a brand, business, or organization.”

Next, give your ad a name. This will only be visible internally and serves as a good way to organize your ads if you’re creating more than one.

2. Audience & Budget

In this step, you’ll select your audience and budget. Start by choosing a location, gender and age range for your target listener.

You can choose listeners in a particular country, state (Australia and U.S.), city (Australia, Canada and U.K.) or DMA (U.S). The DMA, or designated market area, includes a metropolitan area as well as its suburbs.

Next, narrow down your audience by listening behavior.

Targeting by genre delivers your ad right after someone has listened to the type of music that you selected. You can choose more than one genre.

Targeting by playlist uses Spotify’s ability to categorize playlists by mood and activity. After someone listens to a playlist that matches the playlist categories that you choose, they’ll hear your ad.

You can also target by fans of a particular artist if you’re a record label or promoter. You can’t target by all of these options; you must choose All Music, Genre, Playlist Category or Fans.

Next, you’ll need to choose the platform or device on which you want your ad to display. Choose all of them unless your ad is platform-specific.

At this point, you can also choose when you want your ad to display. For example, Spotify says that moms are 25% more likely to listen at 5 or 6 am. If mothers are in your target market, you might want to set your ads earlier than a brand that caters to college students. You don’t have to fill this in if you want your ads to play throughout the day.

Finally, you’ll set your schedule and budget. To set your schedule, enter the start and end dates and times that you want the ad to run. Campaigns run from midnight to midnight in your local time zone by default, but you can enter different start and end times.

Remember that it takes time for an ad to be approved. If your ad is approved after the start time, it will begin immediately once it is accepted.

To choose your budget, either pick from the given options or select Custom. You cannot enter an amount lower than $250.

3. Ad Creative

Now, you get to choose what your ad will look like. Every audio ad has a corresponding display to go along with it. This includes a companion image, headline and link to a URL that users will go to when they click on the ad image.

The image must be a JPG or PNG image that’s 640 x 640 pixels and no more than 200KB in size. You can preview the way this will look on a mobile or desktop. If you have a call to action, it must be included on the image. A directive like “Click here” or “Learn more” will help users understand that they can drill down on the picture to explore your brand further.

Finally, you get to set up the audio creative for your ad. If you already have a sound recording, that’s great. Upload it here.

The audio specs are as follows:

  • Length – 30 seconds or less
  • File types – WAV, MP3, OGG
  • Max file size – 1MB
  • Audio – WAV – 16-bit 44.1 kHz MP3, at least 192 kbps RMS normalized to -14dBFS Peak normalized to -0.2 dBFS

You can also provide Spotify with a script, and the platform will create a voiceover for your ad at no additional cost. If you do this, you can choose the profile of the voice that you’d like based on age, gender, dialect, etc.

When you write the script, you’ll need to make sure that it’s the perfect length to sound natural in a 30-second time slot. A script of about 50 to 75 words is perfect. If it’s longer, the actor will speak too quickly, and if it’s shorter, it might sound like it drags on.

If you’re uploading your own audio and you want background music, it will need to be incorporated into the audio file. If you’re asking Spotify to record the voiceover, you can select your background track separately from a library of pre-selected genres or upload your own.

4. Review Your Order Summary

Before you submit your order for processing and approval, Spotify will show you a summary of all of the options that you chose. If you need to edit anything here, you can go back and do so. Once you click Place Order, your ad will be reviewed by Spotify.

This typically takes 48 hours, according to Spotify’s FAQs. However, you should provide your creative materials at least five days before you want the campaign to start if you don’t want to be rushed.

If you request a voiceover, Spotify will send you the final recording for your approval. If you want to change something, you can request a revision at that time.

5. Editing Your Ad

You can stop or pause your ad at any time. You might want to pause it to change your targeting selection. You can change any target demographics except for fans. If you want to edit Fan Targeting, budget or start/end date, you have to email Spotify, and they’ll recommend the best solution for you.

You may even want to stop an ad that doesn’t seem to be converting. If you do that, you’ll only be charged for the number of ads that were displayed during the run.

6. What If Your Ad Isn’t Approved?

If your ad doesn’t meet the terms of Spotify’s Advertising Terms and Conditions, it will be rejected. An ad that’s longer than 30 seconds or promotes a Spotify competitor will not be approved. You can always reach out to Spotify if you’re not sure why your ad wasn’t approved.

Can You Create Other Types Of Ads Using Ad Studio?

If you’ve ever used Spotify’s free streaming service, you’ve probably seen ads that aren’t just audio with companion displays. You have the option of working with Spotify through direct sales or programmatic ads. This will give you the option of delivering your message through different types of ads on the platform.

Some advertising options besides audio include the following.

Sponsored Session

When users start streaming on Spotify mobile, they’re usually asked if they’d like to watch a short video to get 30 minutes of uninterrupted listening. After the video runs, an image with a link will appear if the user wants to learn more about your brand. This type of ad is available on mobile devices or tablets.

Video Takeover

Video Takeover ads are presented to logged-in users when they’re engaged with the app in between songs or during commercial breaks. They’re available on mobile devices or desktops. Videos are less than 30 minutes long and contain a call to action as well as a link to the brand’s URL.

Display

There are a few display options that can be purchased through direct sale or programmatic marketing.

The Overlay welcomes users back when they return to the Spotify app. Your brand message covers the screen while users listen to music. They can click through to a URL or click to close the image.

The Homepage Takeover shows up on Spotify’s desktop Browse page for 24 hours. This option can include interactive elements to engage your audience further.

The Leaderboard is shown as a smaller banner on the bottom of the desktop or web app. It’s served when Spotify is the top app on the screen, and it appears exclusive of any other messages for 30 seconds.

Sponsored Playlists

Spotify’s top real estate includes the playlists that the company owns and operates. Brands can sponsor these playlists based on the categories that their target market listens to. This is available on mobile and desktop.

Tips And Best Practices For Creating Spotify Ads

Spotify ads run between songs and are an interruption for users. If you want people to pay attention to what you have to say, it’s probably best to resonate with their listening preferences and interests.

Stay Within The Context

If you’re marketing a brand that will be used by energetic party-goers, like an alcoholic beverage, you might not want to place your ad on a yoga music playlist. On the other hand, an ad for a relaxing product might not be what people tune into when they’re listening to upbeat electronica. If your ad feels like it fits in with the music your target audience is listening to without creating a disturbance, it’s more likely to resonate with the listener.

Know Your Target Audience

In order to keep your ads relevant, you’ll need to understand your target audience. Age, gender and language are important when selecting your target. One way to choose the right demographics is to analyze ads that you’ve run in the past. If people from a particular age range, location or gender convert more than others, choose those when setting up your Spotify ad.

If you don’t have data from other ads, accept the fact that you’ll need to experiment to find what works best for you on this platform. You might wonder what someone’s music interests have to do with your non-music-based brand. Spotify compiles data based on the mood and emotion elicited by certain songs, and users choose to listen to certain playlists based on their current state of mind.

If you can tap into that, you can drive conversions.

Personalize The Location

You can target users who live in specific areas when setting up an ad. If your audience lives in London, you might want to start your ad with, “Hello, London.” The personalization and association with their location might grab their attention.

Create A Story

What makes you get emotional when you listen to a particular song? It’s likely the story behind the music. You can touch your audience’s emotions when you incorporate a story into your advertisement too.

People are more likely to tune in when they’re being told a story than being sold a product or service. You can do this with words, but you can also build a story with a playlist.

Fox promoted its TV show Star by developing a branded playlist to share the inspiration behind the show’s music. Between songs, the cast offered some commentary.

Creating a playlist as part of your narrative can capture your audience. People will tend to listen to the playlist even after your advertising campaign is over.

Use Music

Your audience uses Spotify to listen to music. Therefore, if you use the perfect soundtrack for your ad, you’re going to fall in line with the platform’s mission and design. You can use music in the background of your ad or create a branded playlist to keep listeners involved.

The music that you use must do two things:

  • Resonate with your audience
  • Reflect your brand

Create A Specific Call To Action

When creating an ad, think about what you want users to do, and then instruct them to do this. Most of the time, this will involve clicking on the ad image for more information.

This Google Home Max ad that appeared on Spotify mobile has a clear “Buy Now” button that takes you to the Google store when you click on it:

Free Advertising On Spotify?

If you don’t want to pay for advertising fees, you can get creative with Spotify’s playlist options. Any user can create a playlist, and it’s free. Brand it by adding an image, and you have a new way of connecting with your audience.

Some ideas for creating engaging playlists include:

  • Making holiday playlists to get consumers in the mood to buy your products
  • Putting together workout playlists for companies geared toward sports and fitness
  • Compiling comforting and enthusiastic music for a restaurant

Once you’ve created some playlists, you need followers. If you’re serious about marketing, this involves strategy, not just asking your grandmother and best friends to follow you.

The strategy begins when you set up your playlists. They should match your listeners’ moods and interests. If you are trying to appeal to yogis, you might not want heavy metal on your playlists. Also, playlists should be curated and short. Split up the 500 songs that you want to share into several different playlists.

You can collaborate on playlists to allow your followers to add their own tracks. This is a great way to make some friends on the platform and gain visibility. If you choose to do this, you’ll need to keep tabs on the list so that it doesn’t get out of hand.

Once you’ve created a few playlists, share them. You can do this on social media or your blog. Ask questions, such as “Which is your favorite track?” to boost engagement. Add a Spotify Follow Button to your website so that new followers are only a click away.

Remember, Spotify is a social platform. You’ll need to keep up with it the same way you do with your Facebook and Twitter accounts. Follow artists that are appropriate for your brand so that others can learn what you’re listening to. Network by asking others what they’re listening to.

If your target audience listens to music, they’re likely to be on Spotify at some point. Harness this powerful platform by using it socially, creating your own ads for it or working with Spotify’s advertising sales team to dream up a campaign that will engage listeners and increase your brand’s exposure.

Next Steps

Advertising on Spotify is not quite as easy as setting up a Google or Facebook ad. But, that barrier to entry provides a unique opportunity for brands and businesses of all sizes looking to reach an audience in a personal and memorable way.

The post How To Advertise On Spotify Effectively appeared first on ShivarWeb.

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How To Advertise on Nextdoor Effectively

How To Advertise on Nextdoor

Astute marketers are constantly looking for new platforms to connect with their audience in useful and meaningful ways, and Nextdoor is one of the most promising social platforms for local business marketing to look towards as we approach 2019.

As a platform designed to connect neighborhoods and the people who live there, Nextdoor seems to have that special sauce that’s so appealing to marketers of all sizes. Over 75% of neighborhoods in the United States are already part of the platform, the user base is constantly growing, and it provides neighbors with the tools they need to connect on a local level to the businesses in their area.

As with any new social network, there’s a learning curve associated with it. If you’re wondering how to advertise on Nextdoor, and you’re hoping you’ll be able to jump right in, you’ll need to cool your jets, unfortunately. But, this helpful guide will provide you with everything you need to know about this exciting new local social network and how you can leverage it to the advantage of your business.

From your Nextdoor homepage, click the tab at the right for recommendations. Then, click the link that says “claim my business” on the right side of the page.

From there, you’ll just fill out some brief information about yourself and your business. Once you’ve completed the forms, your business page is ready to go, and you can begin sponsoring real estate listings in your area.

From your business page, you’ll want to click the Sponsorship button on the left of your business page. Then, you’ll enter the first zip code you’d like to sponsor.

You can enter as many neighborhoods as you like. Depending on the number of neighbors who are currently using Nextdoor, you’ll be charged a set monthly fee that varies depending on how active the real estate listings are, how many other sponsors are in the area, and how many neighbors are currently using Nextdoor.

You’ll also be charged a prorated rate for the current month that covers the remainder of the current month. That amount is shown next to “total billed today.”

The way this program is set up can be especially helpful to smaller realtors, or anyone who’s skeptical about the return they’ll receive on their Nextdoor investment. Since you’re able to pick and choose the neighborhoods your ad appears in, you’re able to get started at little cost. If your advertising on Nextdoor is driving you leads, you’ll be able to expand your reach and sponsor more neighborhoods.

After you’ve defined the area you’d like to sponsor, just input your payment information, and shortly after that you’ll be sponsoring the real estate section on Nextdoor in the neighborhoods you’ve chosen.

Considering that there’s limited competition on the platform at this point and that real estate listings are one of the areas of strength for Nextdoor, advertising now may be a great way to achieve maximum exposure at a low price.

As Nextdoor continues to grow, and more realtors take advantage of the platform, you can expect that the cost of sponsoring neighborhoods will become increasingly more expensive.

this page. From there, you’ll fill out a brief form with your contact information and projected advertising budget. After that, a representative from Nextdoor’s sales team will contact you to discuss advertising.

Smaller businesses interested in advertising on Nextdoor should also fill out the advertising contact form, as someone from Nextdoor will reach out to you as soon as advertising opportunities for your business become available.

Presently, the advertising opportunities available for larger businesses are limited to sponsored content posts, and there’s no way to target the posts. A single sponsored post will appear in the feed of each neighbor, and each neighbor will see the same sponsored post. This is far from ideal from a targeting perspective, but keep in mind that this is still part of a pilot program and additional functionality will be rolled out soon.

Presently, this type of advertising makes a lot of sense for home improvement stores and products, which is why brands like Nest, Ring, Lowe’s and Slomin’s have become early adopters of the platform.

Even if your business is large enough to enter Nextdoor’s pilot program, it may be best to proceed with caution. Considering how limited the targeting potential currently is, it can be difficult to track the return you’re receiving from your ads, and since Nextdoor is only working with companies with sizable advertising budget, it’s an easy way to burn through your ad dollars.

business set up page on Nextdoor.

You’ll need first to decide which type of business you are. Click business if you’re operating under a business name, or individual if you’re a one-person show that provides services using your own name.

Assuming you’re operating under a business name, you’ll need to search for it to see if your page has already been created, thanks to recommendations from other users. If your page already exists, you’ll be able to claim the page and begin updating it. If not, you’ll create the page from scratch.

If your page doesn’t exist yet, you can either sign in to your personal Nextdoor account, or you can create a new business account to manage the page from. This is a matter of personal preference. Some people prefer to keep their business and personal profiles separate, while others like the simplicity of being able to manage both business and personal from a single account.

When filling out this form, you’ll want to check the box for “public” as it will provide you with maximum reach for your new business page. Once you click the “add your page” button, you’ll be transported to your new profile page. There, you’ll add content to make your page helpful and inviting for the people in your area.

To increase your reach, allowing your page to be seen by more and more of the people in the neighborhood, you’ll need to garner some recommendations. This is a unique feature in that it limits to reach of businesses based on their reputation. This eliminates fly-by-night businesses from taking advantage of the platform, and it helps to keep the focus on the neighborhood.

To grow your reach, you’ll need members of the neighborhood to recommend your business. You can click the “get recommendations” button and Nextdoor will provide you with a pre-written email, Facebook post, or tweet that you can share with your followers on other social networks.

All it takes to increase your reach is a single recommendation. As you garner more recommendations from people in your neighborhood, your reach will increase, allowing more and more people to see your business’ page.

billion dollars a year from advertising by 2020. To accomplish that lofty goal, they’ll need ad products to sell to the different businesses interested in advertising on the platform.

According to Tolia, Nextdoor is receiving over 1,000 requests for more information on advertising each month. If that’s true, it’s easy to see why he expects Nextdoor to become social media’s next advertising giant.

In the meantime, there’s still plenty of potential to grow your business locally by using Nextdoor. Make use of the best practices we’ve discussed above. Not only will this help to increase your organic reach on the platform today, but it will provide you with a framework of content and neighborhood recommendations to build off of when Nextdoor finally rolls out advertising products for more businesses.

When setting up your business profile, be mindful of the fact that this social network exists to serve the needs of your neighborhood first. Make sure that anything you post falls within the guidelines set forth by Nextdoor, and do your best to position your business as an established pillar of the community.

So, while the question of how to advertise on Nextdoor may not have an easy answer as of yet, there’s still tons of potential for the platform. Take some time to set up your profile today so you can reap the rewards of this powerful social network tomorrow.

The post How To Advertise on Nextdoor Effectively appeared first on ShivarWeb.

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