The Best Business Loan And Financing Resources For Michigan Small Businesses

The state of Michigan has one of the fastest growing economies in the nation, a welcome relief to residents following the fallout from the 2009 recession. Cities like Detroit are bouncing back from this bleak period, unemployment is lower than it was in the early 2000s, and more people are opening or moving their companies to Michigan.

Michigan is ranked top in the nation for auto manufacturing, and other industries are emerging throughout the state. This includes cybersecurity, defense, aerospace, and agribusiness. Michigan is earning a reputation as one of the most business-friendly states in the nation.

It isn’t just large companies that are headquartered in the state, either. More residents are opening their own small businesses to pave the path for a successful future. If you’re reading this, you’re one of those entrepreneurs … or the thought of business ownership has at least crossed your mind. One of the most important factors in owning and operating a successful business is having access to capital and resources. Fortunately, the state of Michigan has many opportunities for business owners — whether you’re just getting started or you own an established business.

In this post, we’ll take a look at the funding opportunities open to Michiganders. From national online lenders to local credit unions, nonprofit lenders, and startup resources, we’ll cover it all to help you get the capital you need to start or grow your small business.

Online Business Lenders For Michigan Businesses

The internet has made our personal and business lives easier than ever, so it should come as no surprise that you can get capital for your business straight from your computer. Online lenders make it quicker and easier to receive business financing.

Not only is the lending process so much more convenient, but online lenders typically have less stringent requirements for qualifying. For example, getting a bank loan is difficult, even for established businesses owned by people with high credit scores. But many online lenders will approve borrowers with less-than-perfect credit scores and histories, newer businesses, and businesses that aren’t bringing in high revenues just yet.

Many online lenders provide capital to small business owners in Michigan, but you can start your search for capital with these options:

Lendio

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The loan aggregator Lendio lets you shop your financing options without spending hours filling out applications. Lendio has over 75 lending partners in its network – lenders you can reach with just one application.

Through Lendio, you can apply for the financing you need for your business, including:

  • Small Business Administration (SBA) Loans: $50,000 to $5 million
  • Term Loans: $5,000 to $2 million
  • Short-Term Loans: $5,000 to $200,000
  • Lines Of Credit: $1,000 to $500,000
  • Credit Cards: $1,000 to $500,000
  • Equipment Financing: $5,000 to $5 million
  • Commercial Mortgages: $250,000 to $5 million
  • Accounts Receivable Financing: Up to 80% of receivables
  • Startup Loans: $500 to $750,000
  • Merchant Cash Advances: $5,000 to $200,000

Borrower requirements, rates, and terms are based on a number of factors, including the type of financing you receive, the lender you work with, and your creditworthiness and/or business performance. Turnaround times also vary, but you may be able to receive funding in as little as 24 hours. Filling out an application to receive offers through Lendio’s network has no impact on your credit score. However, a hard pull on your credit may be performed once you select a lender offer to pursue.

OnDeck

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OnDeck offers small business owners two financing options: term loans and lines of credit.

With an OnDeck term loan, you may apply for up to $500,000. With the short-term loan option, you have 3 to 12 months to repay your loan. This option is best for funding marketing campaigns, purchasing inventory, or hiring new employees. Short-term loans from OnDeck come with a simple interest rate that starts at 9%.

Long-term loan options are also available. These loans have repayment terms of 15 to 36 months. Long-term loans are best for larger projects, such as business expansion, opening a new location, or purchasing equipment. The annual interest rate for long-term loans starts at 9.99%.

Both short-term and long-term loans have an origination fee of 0% to 4% of the loan amount. Payments are made daily or weekly and are automatically deducted from your business bank account.

To qualify, you must meet these requirements:

  • Time in business of at least 1 year
  • At least $100,000 in annual revenue
  • Personal credit score of 600 or above

The other financing option available through OnDeck is a line of credit. You may qualify for up to $100,000 to use for any business purpose, including paying for unexpected expenses and managing gaps in revenue. The APR for OnDeck lines of credit starts at 13.99%. Payments are made weekly and are automatically deducted from your business bank account.

OnDeck lines of credit come with no draw fees. However, there is a $20 maintenance fee charged each month. This fee will be waived for 6 months if you make a draw of at least $5,000 within 5 days of opening your account.

To receive a line of credit from OnDeck, you must have:

  • Time in business of at least 1 year
  • At least $100,000 in annual revenue
  • A personal credit score of 600 or above

IOU Financial

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If you need up to $500,000 to fund your small business, try applying for a loan from IOU Financial. With IOU Financial, you can prequalify in just minutes. In fact, 85% of all applicants are pre-approved for funding, according to the lender. You can receive funding in as little as 24 hours through IOU Financial.

With this loan option, you can receive $10,000 to $500,000 with terms between 6 and 12 months. Fixed daily or weekly payments are automatically debited from your business bank account.

Once you’ve paid off 40% of your loan, you may qualify for a loan renewal for additional capital for your business. There are no prepayment penalties, and you can save money on interest by paying your loan off early.

To qualify for funding through IOU financial, you must meet these requirements:

  • Own at least 80% of your business
  • Time in business of at least 1 year
  • At least 10 monthly deposits in your business bank account
  • Annual revenue of at least $100,000
  • Average ending balance of at least $3,000 per day in your business bank account

Credibly

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Credibly is an online lender that offers three financing options for small business owners. You may qualify to receive a working capital loan, a business expansion loan, or a merchant cash advance (MCA).

Credibly’s working capital loans are available up to $400,000 with repayment terms of 6 to 18 months. Instead of your traditional interest rate, Credibly uses a factor rate to determine the cost of borrowing. Learn more about factor rates and how they affect the cost of your loan.

Daily or weekly payments are automatically deducted from your bank account to repay your loan. Despite its name, these loans don’t have to be used for just working capital and can be used for other business purposes.

To qualify for a working capital loan, you must have:

  • Time in business of at least 6 months
  • Personal credit score of 500 or above
  • An average of $15,000 or more in monthly deposits

If you’re ready to grow your business, consider applying for Credibly’s business expansion loan. This loan program provides up to $250,000 with terms of 18 or 24 months and interest rates starting at just 9.99%. Weekly payments are automatically deducted to repay your loan.

To qualify for this financial product, you must have:

  • Time in business of at least 3 years
  • Personal credit score of 600 or above
  • Average of $15,000 or more in monthly deposits
  • Average daily balance of at least $3,000

Finally, you may qualify for a merchant cash advance. This is a little different from a loan because the lender agrees to purchase a percentage of future receivables. Daily repayments are made from your bank account based on a percentage of your sales.

With this financing option, you can receive up to $400,000. Terms are typically 3 to 18 months and factor rates start at 1.15.

To qualify for an MCA, you must have:

  • Time in business of at least 6 months
  • Personal credit score of 500 or above
  • Average of $15,000 or more in monthly deposits

Kabbage

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If flexibility is the most important factor for your small business financing, consider applying for a Kabbage line of credit. Instead of one lump sum, you’ll have access to a revolving account you can draw from whenever you need capital. You can use your line of credit for emergency expenses, revenue gaps, working capital, or for any other business purpose.

Kabbage’s lines of credit are available up to $250,000 for qualified borrowers. Repayment terms are 6 months for draws under $10,000. For loans of $10,000 or above, you can choose from 6- or 12-month terms. Kabbage charges a monthly fee between 1.5% and 10% of your principal loan amount. If you pay your loan off early, you can save money on fees. If you haven’t made a draw on your line of credit, you won’t be required to pay any fees.

Kabbage bases its approval decisions on the performance of your business, so even business owners with credit challenges may be approved. You can be approved in just minutes for up to $100,000. Lines of credit exceeding $100,000 require manual approval by the lender.

To receive a line of credit from Kabbage, you must meet these minimum requirements:

  • A business that is at least 1 year old
  • At least $50,000 in annual revenue OR at least $4,200 per month for the last 3 months

LendingPoint

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Sometimes, you have to get a little creative with your small business funding. One option to consider is taking out a personal loan to use for business expenses.

Why choose a personal loan instead of a business loan? For starters, your time in business, business credit score and history, and annual revenues will not be a requirement to qualify. This is great if you’re a new business, have low revenues, or haven’t yet established business credit. Instead, lenders like LendingPoint will evaluate your personal credit history, income, and other factors when determining whether you qualify for funding.

LendingPoint has personal loans from $2,000 to $25,000 for qualified borrowers. You’ll have 24 to 48 months to repay your loan, with payments due twice per month. APRs start at 15.49%.

To qualify for a personal loan through LendingPoint, you must meet these requirements:

  • Be at least 18 years old
  • Have a U.S. ID and SSN
  • Have at least $20,000 in annual income
  • Have a verifiable personal bank account
  • Have a personal credit score of at least 585

Banks, Credit Unions, & Nonprofit Lenders In Michigan

Prefer to go the more traditional route? Banks, credit unions, and nonprofit lenders throughout the state of Michigan offer financial solutions for your small business. If you don’t have a relationship with a financial institution or you just want to shop around your options, try these lenders first.

Comerica Bank

Comerica Bank has provided financial services since 1849. Today, Comerica has over 400 banking centers nationwide. In the state of Michigan, banking centers can be found in cities including Dearborn, Detroit, and Battle Creek.

For small businesses, Comerica offers financial services including:

  • Lines Of Credit: $10,000 to $500,000
  • Term Loans: Up to $500,000
  • Commercial Real Estate Loans: Bridge loans, land acquisition loans, development loans, commercial construction loans
  • Equipment Leases: Up to 100% financing
  • SBA Loans: Up to 90% financing
  • Letters Of Credit

Comerica also offers corporate lending services for public and private companies, including working capital loans, asset-based loans, and acquisition financing.

Lake Michigan Credit Union

Lake Michigan Credit Union is one of the largest credit unions in the state with branches located in areas including Grand Rapids, Kent County, Kalamazoo County, and Saginaw County.

In addition to business checking and savings accounts, you can apply for financing options through LMCU, including:

  • SBA Loans
  • Lines Of Credit
  • Business Credit Cards
  • Commercial Real Estate Loans
  • Secured Term Loans
  • Letters Of Credit

To apply for financing, you must be an LMCU member. Members must meet one of the following requirements:

  • Live, work, or worship in the Lower Peninsula
  • An immediate family member is a member of LMCU

Opportunity Resource Fund

Opportunity Resource Fund is a nonprofit community development financial institution (CDFI) that provides financial support to small businesses throughout the entire state of Michigan.

Through Opportunity Resource Fund, qualified borrowers may receive funding for starting or growing a small business. Business loans are available in amounts from $10,000 to $250,000 with flexible terms and competitive interest rates.

This nonprofit lender considers several factors when approving loan applications. The first is collateral. All loans must be secured with collateral including real estate, inventory, accounts receivables, equipment, or a personal guarantee. Loans also require an equity investment of 10% to 15%.

Opportunity Resource Fund also requires borrowers to meet certain social criteria. This includes aspects such as demonstrating alternative business practices, providing employment to low-income individuals, and empowering woman- and minority-owned businesses.

Applications are available to download on the Opportunity Resource Fund website. If you’re interested, you can also fill out the online form to learn more about the application process and timelines for submissions and approvals.

Small Business Grants In Michigan

Reaching out to an online or local lender isn’t your only option when you need capital to start or expand your business. You can also look to small business grants to get the funding that you need.

Grants differ from small business loans and other types of financing because grant funds do not have to be repaid. Why, then, isn’t every small business owner leaning on grants?

The problem is that grants are few and far between. While you can search online and find multiple lenders in your area, finding grants is a bit more difficult. Even when you do come across grants, you’ll often find that you won’t qualify. Grants typically have very specific requirements, and many are only open to certain industries or women- or minority-owned businesses. There is also a lot of competition from other small businesses pursuing the same grants.

This isn’t meant to be discouraging. It’s simply a warning not to rely solely on receiving grants to fund your business. However, there’s no harm in applying for grants that you do qualify to receive. To kick off your search for a grant, check out these options that are open to small business owners in Michigan.

Community Ventures

The Community Ventures initiative is led by the Michigan Economic Development Corporation. Through this program, employers can receive wage reimbursements of up to $5,000 for each eligible “structurally unemployed” employee that is hired. A structurally unemployed employee is defined as:

  • Someone with a lack of education or functional literacy
  • Someone with a long-term disconnection from employment
  • Low income hires
  • Ex-offenders
  • At-risk youth

Reimbursements are given in monthly installments until the $5,000 per employee limit is reached. These funds are used to offset costs for training and hiring participants in the CV program. Businesses are required to report each month on hired and retained talent for up to one year. If you’re interested in learning more, you can contact the MEDC Customer Assistance Center by phone or email.

NEIdeas

If you live in Detroit, Hamtramck, or Highland Park, you could receive $10,000 for your small business through the NEIdeas $10k Challenge. A total of 26 winners are each awarded $10,000 for coming up with the best ideas for growth.

To qualify, businesses must meet the following requirements:

  • Be an existing, for-profit business
  • Majority owner must be a legal U.S. resident at least 18 years old
  • Business must be in good standing with the IRS
  • Businesses must be based in Detroit, Hamtramck, or Highland Park
  • Gross annual revenues should not exceed $750,000

Home-based businesses and regional businesses based in Southeast Michigan can also apply. Franchises are ineligible to enter.

Program guidelines can be found on the NEIdeas website. Applications can be submitted online, mailed, or turned in to an NEIdeas Ambassador.

SCIP/TCA

Michigan Corporate Relations Network’s Small Company Innovation Program Technology and Commercialization Assistance (SCIP/TCA) program is designed to help businesses grow through collaborations with local universities. Through this program, small businesses can receive matching grants up to $40,000 to fund the cost of research projects at any public university in Michigan.

Any existing, LARA-registered business in Michigan that plans to remain in the state is eligible to apply. Getting accepted into the program is not a guarantee of funding. All guidelines for the program can be found on the Michigan Corporate Relations Network website. Applications for the program are also available online.

Loans & Resources For Startups In Michigan

Taking the leap into entrepreneurship is an exciting time, but it can also be intimidating, especially if you have no prior experience running a business. Fortunately, there are many resources available to Michiganders, including educational materials, workshops, mentorships, and funding opportunities.

SCORE

SCORE, a resource partner of the SBA, is one of the leading resources for small business owners. There are hundreds of SCORE chapters across the nation that provide essential resources to small business owners for free or for a low fee. SCORE chapters are located throughout Michigan in cities including Kalamazoo, Grand Rapids, and Detroit.

Through your local SCORE chapter, you can receive free business mentoring from an expert. You can meet with your mentor face-to-face or connect through email or video chat. You can also pick up business tips through SCORE’s webinars that are held every week. If you miss a webinar, don’t worry — SCORE offers an on-demand library of recorded webinars. You can also educate yourself on a variety of business topics through SCORE’s on-demand online courses. Workshops, events, and educational materials are also offered through this organization.

Michigan Small Business Development Center

The Michigan Small Business Development Center offers great resources for startups and established businesses. There are multiple business resource centers, regional centers, and satellite offices throughout the state in cities including Hastings, Kalamazoo, Lansing, Dearborn, and Detroit.

All resources through the Michigan SBDC are free or low-cost. Services include business consultations, workshops, training sessions, templates, and educational materials.

Michigan Women’s Foundation

The Michigan Women’s Foundation provides capital and resources to women-owned businesses in the state of Michigan. Women that own startups or established businesses are eligible for the programs available through MWF.
Programs offered include business consulting, training and educational sessions, and portfolio management. The Michigan Women’s Microloan Fund also provides loans of $2,500 to $50,000 with 5-year terms and an 8% interest rate to qualified business owners.

What To Consider When Choosing A Lender

The good news is there are many lenders both online and in the state of Michigan that are ready to give your business the capital it needs. The bad news? You have to narrow your selection down to one, preferably the lender that offers the best, most affordable financing for your small business.

Sorting through your options to choose the right lender doesn’t have to be too difficult or time-consuming, though. When searching for your lender, keep the following points in mind.

Application Process

The application process varies across lenders. With some lenders, a little bit of business and personal information and a few bank statements are all it takes to get approved. Other lenders, however, may have more extensive documentation requirements and a lengthier, more complicated application process.

If time is of the essence and you don’t want to go through a difficult application process, choose an online lender with a more simplified process.

Speed Of Approval

You have an emergency that needs to be taken care of immediately. In this scenario, waiting weeks to get the capital you need could be damaging to your business. Or maybe your situation looks a little different. You don’t have an immediate need for funding, and you have time to shop around for the best rates and terms available to your business, so time to funding may not be as important.

Evaluate your situation to determine if time to funding is an important factor for you. If so, work with a lender that approves applications quickly. Some lenders can even have the funds in your bank account in as little as 24 hours.

Loan Restrictions

How do you plan to use your funds? This could be a determining factor in what lender you select. Let’s say you need capital to hire new employees. Lenders that offer equipment financing for fixed asset purchases could be crossed off your list.

Borrowing Limits

The type of financing and the lender you choose may be based on how much capital you need. For instance, if you need $500,000 to fund your new expansion or a new location, lenders that have $250,000 borrowing limits won’t be a good fit.

Rates & Terms

It’s always important to make sure you’re getting the best rates and terms for your situation. If you have credit challenges or you’re a new business, your options may be more limited. However, if you have a solid credit score, an established business, and a steady flow of revenue, you’ll have more lending options available to you.

No matter what options are available, always make sure you’re getting the best rates and terms. Think of the long term and not just the short term. Sure, you could have funds in your account in just one day with one lender, but high fees and interest rates and shorter repayment terms could spell trouble in just a few months.

Unsure if you’re able to afford a small business loan? Learn how to know if you’re ready to take on this financial responsibility.

Borrower Requirements

You may think a lender is right for you, but are you right for the lender? Every lender has different requirements for its borrowers, and you need to meet all of these to get approved for financing.

Before you start shopping lenders, start by getting your free credit score online and reviewing your credit history. Negative items like unpaid tax liens and recent bankruptcies may prohibit you from working with some lenders and qualifying for certain types of loans.

You’ll also need to know your time in business and annual revenues and have proof to present to the lender if needed. Also, be aware of documentation requirements and make sure that you have everything you need to be approved for a loan.

One last thing to remember is that meeting a lender’s minimum requirements does not guarantee that your application will be approved.

Final Thoughts

While no one is ever guaranteed success, having access to capital and the right resources can boost your chances of owning and operating a successful, profitable business. As you’ve read, there are plenty of opportunities available for Michiganders. Whether you’re in the planning stages of your startup or you want to take your small business to the next level, know and understand your financing options, evaluate the needs of your business, do your research, and move forward when you know that the return-on-investment will outweigh the risk of taking on debt.

If you didn’t find what you’re looking for in this post, check out some of our additional resources to help you find the right financial solution for your small business.

  • Minority Business Loans
  • Best Small Business Loans For Veterans
  • The Best Small Business Loans For Women
  • The 7 Best Business Loans For Bad Credit

The post The Best Business Loan And Financing Resources For Michigan Small Businesses appeared first on Merchant Maverick.

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The Step-By-Step Guide To Starting And Funding A Cleaning Business

Entropy is a powerful force. If there’s one thing you can rely on, it’s that everything gets dirty sooner or later. If it doesn’t get dirty, it gets cluttered. Add in the increasing prevalence of two-income households, the pace of modern work, and long commutes and it’s not surprising that more and more people are letting their chores slide. And that’s not even taking into consideration the huge messes businesses make. The fields are ripe for the harvest — why not cut yourself a piece of the action and start a cleaning business?

Luckily, the overhead costs of starting a cleaning business are fairly low (at least up until you start adding staff). Still, you’ll want to have a good sense of what you’re getting into before you dive into the cleaning industry. It’s vital to have a plan to tackle the expenses and challenges you’ll encounter along the way.

Not sure where to start? We’ll break starting and funding a cleaning business into a step-by-step process below.

Make A Business Plan

What separates a business from a side gig? Well, a lot of stuff, but one of the bigger points of delineation is whether or not you have a business plan and a clear strategy.

Creating a business plan can be an intimidating prospect, but you don’t need to have a business degree to write one. You don’t even need to have taken a class.

A business plan is, essentially, an outline documenting what your business is, what it does, how it’s organized, its financial means, and a strategy for how you intend to grow.

There are a lot of resources online that can give you an idea of what a business plan looks like, as well as templates to help you get organized, but a typical business plan has the following parts:

  • Executive Summary
  • Company Description
  • Market Overview
  • Sales & Marketing Strategy
  • Operating Plan
  • Organizations & Management Team
  • Financials

Calculate Startup Costs

The good news about launching a cleaning business is that it’s possible to start one with relatively little overhead.

At a bare minimum, you’ll need cleaning supplies. This assumes you’ll be doing the cleaning yourself and aren’t taking on any additional employees right away. If you’re cleaning residential homes, these supplies will more or less be the same ones you use to clean your own home. If you’re getting into commercial cleaning right away, you’ll likely have to invest in equipment (and possibly personnel) that can handle larger volume messes and expansive spaces.

If you plan on cleaning as more than a side gig, you’ll also need to pay fees to register your business. This isn’t a very big expense if you’re content with running a sole proprietorship (or partnership, if you’re starting it with someone else) –usually less than $50. You can also file a DBA, which allows you to legally do business under another name (the name of your company). We’ll get a bit deeper into it in the next section.

Additionally, you should factor in any initial advertising costs, as well as transportation costs for getting yourself or your employees to the work sites.

Register Your Business

Registering your business may sound intimidating, but it can actually be one of the easiest parts of starting a business.

Why should you register your business? At minimum, it protects the name you’re using to do business so that no one else in your area can (legally) use it. It can also help you qualify for business-to-business services and services that require an EIN number.

Incorporating, on the other hand, is a more complicated and expensive process that comes with its own advantages and disadvantages.

Here are the most common types of businesses you can register as:

  • Sole Proprietorship: By default, this is the type of business you’re running when you initially create one. You and your business are, for tax and liability purposes, considered the same entity. In fact, if you want to do business under a name other than your own, you’ll need to file a DBA (doing business as) with your local county clerk.
  • Partnership: Essentially the same as a sole proprietorship, except you started it with one or more other people. By default, you’re each considered to own an equal share of the business for tax and liability purposes.
  • Limited Liability Corporations (LLCs): If you’ve seen LLC after a corporation’s name, you’re dealing with this type of company. LLCs offer limited liability protection for their owners without the full complexity of a corporation. Each state has its own rules for how to start and maintain an LLC, and you don’t necessarily have to register your LLC in the state where you’re doing business (although you’ll generally want to). LLC owners report their business earnings and losses on their personal taxes.
  • C-Corp: This is the “basic,” default form of incorporation. Shareholders are considered the owner(s) of the company and receive limited liability protection; however, the business decisions are made by corporate officers who may or may not be shareholders. The corporation is taxed separately and shareholders pay income tax on dividends. To form a C-corp, you’ll file articles of incorporation with your state.
  • S-Corp: S-corps are similar to C-corps in most ways, but come with a few additional restrictions: you must have fewer than 100 shareholders and they have to all be U.S. citizens or residents. Unlike C-corps, profits and losses are reported on personal taxes, not unlike an LLC. In addition to filing articles of incorporation, you’ll also need to file IRS Form 2553.

Get Business Insurance

Depending on your local and state laws, business insurance may or may not be optional. However, given that cleaning involves a lot of physical contact with valuable items (not to mention the fact that you will be in the profession of making floors slippery), you may want to consider getting insurance even if you’re not required to have it.

General liability insurance can protect you in the case of lawsuits or accidents, including property damage and personal injury claims against your business. It can also make your business seem more professional to prospective clients.

Your own equipment is also subject to wear and tear, as well as accidents, so you may want to consider property insurance for any items that aren’t easily replaced.

While those are the big two worth considering, you may also want to consider other types of business insurance to help cover anything from worker’s comp claims to vehicle damage.

Seek Business Funding

Now that you have a sense of what your expenses will be, it’s time to see if you can cover them out of pocket and still pay your rent. If you can’t, and are unable to tighten your belt without sacrificing the tenets of your business plan, you may need to seek some source of external funding.

Where should you look?

Personal Savings

If you’ve saved up for a rainy day, the weather might start looking pretty stormy right about the time you’re starting a business. The nice thing about dipping into your savings is that you’re not taking on debt and all the expenses that go with it.

On the other hand, you are risking your own money, along with the lost-opportunity costs of not being able to invest that money in something else.

And, of course, you may not have been able to save enough to cover your expenses anyway.

Tap Your Support Network

If you don’t have the money handy, another option is to ask your family or friends for a small loan. Generally speaking, your support network will give you a better deal than even the most competitive bank will.

Asking your friends and family for money can be tacky and awkward if you don’t put their concerns at ease. You also may damage your relationships if you aren’t able to pay the money back within the expected period of time. It’s important to take a professional and organized approach.

If you do go this route, strongly consider formalizing any agreements you make so that all parties are fully aware of what they’re risking and stand to gain from the arrangement. Create and sign a contract, just as you would do with a traditional lender.

Credit Cards

For purchases you can pay off quickly, it’s hard to beat the convenience and incentives of credit cards.

Credit cards come in both personal and business varieties. You don’t actually have to own a business to get a business credit card, but their rewards programs are generally more geared towards business expenses.

If you’re going to use credit cards, be sure to use them wisely. That means paying them off within the interest-free grace period offered by your card’s provider. For personal credit cards, this is legally at least 21 days from the time you receive your bill. For business credit cards, there is no legal minimum, but most extend a similar one as a courtesy.

Just remember, if you fail to pay your card off with that window, carrying a balance on a credit card is an extremely expensive way to finance your business. And avoid taking out cash advances on your cards unless absolutely necessary.

Recommended Option: Capital One Spark Cash Select For Business

Capital One Spark Cash Select For Business


capital one spark cash select
Compare

Annual Fee:


$0

 

Purchase APR:


14.74% – 22.74%, Variable

Spark Cash Select for Business is great for businesses that don’t have their expenses concentrated in a single area, or that don’t want to worry about complex reward programs. You’ll simply earn 1.5% cash back on every purchase you make. There’s also no limit on the reward, so you don’t have to worry about exceeding a maximum threshold: whether you spend $20 or $500,000 in a year on your card, you’ll still get 1.5% back.

You will need to have excellent credit to qualify, however.

Recommended Option: Capital One Spark Classic

Capital One Spark Classic For Business


Compare

Annual Fee:


$0

 

Purchase APR:


24.74%, Variable

If you don’t qualify for Spark Cash Select for Business, Capital One offers an equally versatile card that’s much easier to qualify for. Spark Classic offers a similar cashback reward program, but the rate of return is 1% rather than 1.5%.

While not the most exciting card, it’s a good one for repairing your credit.

Loans

Business loans are frequently out of reach for brand new businesses–even the more risk-taking lenders generally want to see that you can keep your business together for at least six months before they’ll lend to you. That said, there are exceptions to the rule, with some lenders focusing on new businesses.

And remember, when you’re starting out you don’t necessarily need a “business” loan; personal loans can leverage your personal credit for an early cash infusion even you need it. If you’re buying a specific piece of equipment, you should also consider equipment financing.

Recommended Option: Lending Club Personal Loans

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Lending Club is a good option for individuals who may not have the strongest credit, but have a good debt-to-income ratio. The borrowing range is fairly narrow at $1k to $40k, but when you’re just starting out you don’t want to go too deeply into debt anyway. You’ll have three-to-five years to pay it off, which makes it fairly manageable while you’re building up your business.

Recommended Option: Lendio

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Lendio takes some of the frustration out of applying for a loan by allowing you to apply to their entire network of lenders all at once. If you’re thinking about tapping the alternative lending market for the first time, it’s a pretty good place to start.

They can’t necessarily help every business, but a shotgun approach can sometimes be easier than finding that one special lender.

Recommended Option: Upstart

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If you’re having trouble finding a lender who will work with you, take a look at Upstart. You’ll need to have at least fair credit and a regular source of income, but otherwise, Upstart’s way of evaluating potential borrowers is pretty unconventional (good news if you’re starting a business).

Better yet, Upstart’s rates are pretty reasonable and you’ll have three or five years (one or the other, not between) to pay your balance off. Unfortunately, they don’t currently lend within West Virginia or Iowa.

Need more options? Check out our feature on startup loans. Need a vehicle for the business? Read our auto loans guide.

Choose The Right Software

As your business grows and becomes more complex, managing the logistics of your company can become quite labor-intensive. If you don’t want to sink too many man-hours into keeping track of all that stuff, you’ll want to delegate it to a software program.

This doesn’t necessarily mean you have to enroll in a bunch of expensive SaaS platforms if it’s just you cleaning for a handful of clients, but it doesn’t hurt to know what kinds of options are available.

Types of software you may want to consider include:

Field Service Management 

This type of software centralizes processes and workflows for businesses that have employees who are dispatched to external sites for work. They often include features like scheduling, dispatching, and booking. Some also come with invoicing, payment processing, and customer notifications, so it’s quite possible to find an all-in-one service that meets your needs.

Scheduling Software

If field management software sounds like overkill, you can try scheduling software to manage your appointments and those of your employees.

Inventory Tracking

If your business is growing, and you no longer have time to run out to buy supplies every time you need them or use your clients’ stash, you may find it helpful to formally keep track of your inventory.

Accounting Software

It’s always a good idea to keep track of your expenses, accounts receivable, payroll and related issues, especially as your business grows and becomes more complex.

Data QuickBooks Online Xero Wave Zoho Books FreshBooks

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Bolster Your Web Presence

A cleaning business can get pretty far on word-of-mouth and savvy networking, but expanding your reach in the digital age usually means you’ll want to bolster your web presence.

A website is still a very important way for potential clients to find out information about your business and what services you offer. Happily, for a cleaning service, it doesn’t have to be all that complicated. If you don’t want to contract the job out, there are plenty of services online that make it easy to build your own decent-looking website.

A spiffy website is only one aspect of an online strategy, however. You still need to get people to visit it. You’ll want to consider factors like search engine optimization (SEO) so that, for example, the phrase “kitchen cleaning Rochester” will return your website in the top results.

You may also want to use social media to build brand recognition, steer traffic to your site, and announce specials or changes to your services.

Delegate Work

If it’s just you and a cart full of cleaning supplies, you can skip this part. However, if you’re planning to grow beyond what one mere mortal can clean in a day, you may be taking on more people.

Employees

Taking on additional people as employees come with many advantages: you’ll be able to get significantly more work done, have a larger pool of expertise to draw from, and be more flexible with scheduling. This does come with some additional costs, as you’ll be paying some of the taxes on their salary as well as offering benefits (at least in theory), so be sure to grow your staff wisely and at a pace that fits the amount of business your generating.

In exchange, you’re allowed greater control over the parameters of how your employee works, where, and at what time. Setting a wage that’s fair and not abusing this relationship will generally improve morale and help you avoid the costly process of employee turnover.

Contractors

If you aren’t quite ready to take on employees but need additional help, you can hire contractors. Contractors are free agents who work for themselves even though they may be regularly and continuously used by a particular client (that’s you). Since they’re self-employed, you don’t have to worry about additional expenses beyond paying their fee.

Beware that many businesses make the mistake of treating 1099 contractors as employees, which can get you into pretty serious trouble. If you want to have employees, you have to hire them. As a general rule, you have no say over what jobs a contractor decides to take, the methods they use to complete the job, or the precise time they choose to do it.

Advertise Your Business

A strong web presence and social media campaign can get help get your name out, but we aren’t quite at the point where advertising is obsolete.

Since a cleaning business is constrained by geography, you have to physically send someone out to do the job. That means you can use your modest advertising budget to buy ads in your local market, which is usually cheaper than trying to grab eyeballs from several states away. Ideally, you’ll want to seek ad platforms utilized by the types of people who are likely to buy your services. Cash-strapped kids at the local state college campus probably don’t have a budget for cleaning services, for example (although some fraternities or sororities may), while busy soccer moms might.

Once you know who you’re advertising to, you can select a medium that fits your target demographic. Once you start getting new customers, ask them where they heard about your business so you can get a sense of which ads are working and which aren’t.

Even if you don’t have money to spend on advertising right away, put the word out to your own social network that you’re offering cleaning services. Word can spread fast, especially if you have a reputation as a trustworthy person.

Final Thoughts

We still haven’t invented self-cleaning spaces, so you have a potentially bottomless demand for your services. With relatively low overhead, a housekeeping or cleaning business is one of the more accessible industries to jump into, so if you have the skills and the inclination, why not give it a try?

The post The Step-By-Step Guide To Starting And Funding A Cleaning Business appeared first on Merchant Maverick.

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The Best Business Loan And Financing Resources For Indiana Small Businesses

In past years, Indiana’s economy has mainly centered around steel production and manufacturing. However, since the 1990s, the state’s economy has become more diverse, expanding into sectors including banking, education, financial services, and information technology. Combined with a growing population — particularly in the Central Indiana region — this has opened up new opportunities for entrepreneurship.

In Indiana and across the nation, more people are leaving their 9-to-5s and setting out on their own entrepreneurial path. Maybe you’ve already taken this step, or perhaps you’re just waiting to take the leap. No matter where you are in your journey, though, one of the most important resources for a small business is capital. In order to operate a successful small business, you have to have access to capital. But a big question plaguing many small business owners and aspiring entrepreneurs is where to find this capital.

If you’re a small business owner in Indiana, this post is for you. In this post, we’ll review small business loans that Indiana entrepreneurs just like you can use for funding startups, paying operational costs, or growing their businesses. Read on to learn more about the financing opportunities and resources available to you.

Online Business Lenders For Indiana Businesses

As a small business owner, your plate is already loaded down with daily tasks. Managing your business, ordering inventory, hiring and training employees…the list goes on. When you’re in need of capital, finding the time to gather documentation and head over to your local bank may seem impossible. Fortunately, online business lenders have made it easier than ever to get the capital you need for your business.

With an online lender, you can apply for small business financing from your home or office on your computer or smartphone. You can submit documentation, communicate with the lender, and even sign your loan documents without ever stepping foot into a bank or financial institution.

Depending on the financial product you select and the lender you work with, borrower requirements may also be far less stringent. This means that startups, borrowers with personal credit challenges, or businesses with no credit history have options that wouldn’t be available through traditional lenders.

In some cases, you may even be able to complete the entire process from application to funding in as little as 24 hours — a great option for businesses that need cash immediately.

There are thousands of online lenders to choose from, but start your search with the following lenders, which provide financial solutions to small businesses in Indiana.

Fundera

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Unsure of which financial solution is right for your business? Fundera helps you find the best options for your business. With Fundera, you’ll be able to compare lender offers with just one application.

To get started, all you have to do is fill out a quick application. Submitting your application has no impact on your credit score. Once your application has been received, you’ll work one-on-one with a financial specialist to evaluate the financial needs of your business and review lender offers. Your financial specialist will help you select the product that’s the best fit for your business. Best of all, this service is absolutely free.

There is a wide array of financial products available to you through Fundera. This includes:

  • Small Business Administration (SBA) Loans:S $5,000 to $5 million
  • Lines Of Credit: $10,000 to $1 million+
  • Term Loans: $25,000 to $500,000
  • Startup Loans: Up to $150,000
  • Equipment Financing: Up to 100% of equipment value
  • Short-Term Loans: $2,500 to $250,000
  • Invoice Financing: Up to 100% of invoice value
  • Merchant Cash Advances: $2,500 to $250,000
  • Personal Loans For Business: Up to $35,000

Borrower requirements, rates, and terms vary based on the products you qualify to receive. Options such as short-term loans and merchant cash advances are easier to qualify for, but these come with less favorable rates and terms than SBA loans, which are more difficult to receive.

The good news is that your financial specialist will work with you to review the options you qualify for and help you choose the product that’s best for you.

SmartBiz

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Small Business Administration (SBA) loans are extremely popular with small business owners. This is because you receive low rates and very favorable terms, similar to bank loans. However, because SBA loans are backed by the government, lenders feel more secure in giving them to small business owners. Even if you’ve been turned down for a low-cost bank or credit union loan, you may still qualify for an SBA loan.

One of the drawbacks of SBA loans is the application and approval process. The process can seem overwhelming, especially if you’ve never applied for a loan before. Receiving an SBA loan can also take weeks. In some cases, getting the funds in your bank account may even take months.

Fortunately, there is a solution. SmartBiz simplifies and expedites the SBA loan process. You can prequalify for your loan in as little as 5 minutes. You may also receive your funds in just 7 days.

Through SmartBiz, you can qualify for an SBA working capital and debt refinancing loan. Funds can be used to refinance existing debt, hire employees, purchase equipment or inventory, or expand your business. These loans are available in amounts from $30,000 to $350,000. Interest rates are 8.25% to 9.25% with repayment terms up to 10 years.

To receive this loan, you must meet the following requirements:

  • At least 2 years in business
  • U.S. citizen or legal permanent resident
  • Personal credit score of 640 or above
  • Sufficient cash flow
  • No bankruptcies or foreclosures within the last 3 years
  • No outstanding tax liens
  • No past defaults on government-backed loans

If you’re looking to fund a major expansion, consider applying for an SBA 7(a) commercial real estate loan through SmartBiz. These loans provide funding from $500,000 to $5 million. Interest rates are 7% to 8.25% with repayment terms up to 25 years.

Fund from these loans can be used to refinance your commercial real estate mortgage or purchase commercial real estate. Funds can’t be used for new construction or for investment properties.

Borrower requirements for the SBA 7(a) commercial real estate loan are as follows:

  • At least 3 years in business
  • At least 51% of the property must be owner-occupied
  • U.S. citizen or legal resident
  • Personal credit score of 675 or above
  • Property must have a purchase price of $500,000 or more
  • No bankruptcies or foreclosures within the last 3 years
  • No outstanding tax liens
  • No past defaults on government-backed loans

LoanBuilder

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It’s your loan, so why does the lender get control of setting the rates and terms? Shouldn’t you have control? With LoanBuilder, you can “build” your own loan, creating a financial solution that’s best for your business.

You can apply for $5,000 to $500,000 through LoanBuilder. After filling out a quick questionnaire, you’ll be presented with a financing offer. You can adjust the amount of your loan and the duration to get the most affordable option for your business. Once you’ve customized your loan, you’ll finish the application and submit any required documentation. If approved, you could receive your funds in as little as 24 hours.

Prequalifying for a loan offer has no impact on your credit score. However, personal credit and public records will be assessed if you decide to proceed with a loan offer.

LoanBuilder loans have repayment terms of 13 to 52 weeks. Weekly payments are made toward your principal balance plus the fees charges by the lender. LoanBuilder charges a single fixed fee for its loans. Fees start at just 2.9% of the loan amount. LoanBuilder loans can be used for any business purpose.

To qualify for funding through LoanBuilder, you must have:

  • A time in business of at least 9 months
  • At least $42,000 in annual revenue
  • A personal credit score of 550 or above
  • No active bankruptcies

Fundation

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Whether you need a specific amount of money or a more flexible financing option, you can find both with Fundation. Through Fundation, you can apply to receive a term loan or line of credit to fund your business expenses.

Fundation offers term loans up to $500,000 for use on equipment, improvements, or business expansion. Loan terms are up to 4 years with repayments made twice per month. The APR for term loans starts at 7.99%.

If you need cash for working capital or short-term cash flow needs, consider Fundation’s lines of credit. You may qualify for as much as $150,000 with repayment terms up to 18 months. Your balance is repaid once per month. APRs start at 7.99%.

To qualify for Fundation’s financial products, you must have:

  • A time in business of at least 12 months
  • At least $100,000 in annual revenue
  • Personal credit score of 660 or above
  • At least 3 full-time employees

BlueVine

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If you need a line of credit to cover emergencies, operational costs, or other business expenses, you may qualify for a line of credit through BlueVine. This online lender provides lines of credit up to $250,000.

With a BlueVine line of credit, you can receive funding in just minutes. You’ll only pay for what you borrow, and you’ll have the option to repay the lender through monthly or weekly payments over 6 to 12 months. Rates start at 4.8%.

To qualify, you must meet these requirements:

  • At least 6 months in business
  • At least $100,000 in annual revenue
  • Personal credit score of 600 or above

If unpaid invoices are causing cash flow issues in your business, BlueVine also offers an invoice factoring service. You can receive up to $5 million for your unpaid invoices with rates starting at just 0.25% per week. BlueVine provides up to 90% of your invoice amount upfront. The remaining amount — minus fees ––will be given to you once the invoice is paid.

To qualify for invoice factoring, you must own a B2B business and meet these additional minimum requirements:

  • At least 3 months in business
  • At least $100,000 in annual revenue
  • Personal credit score of 530 or above

Amex Business Loans

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If you’re an American Express cardholder, you could qualify for a low-interest, fixed-rate business loan of $3,500 to $50,000. Your loan can be used for any business purpose, and you can receive funding in as little as 3 business days.

Your loan is repaid over terms of 12, 24, or 36 months. Interest rates range from 6.98% to 19.97%.

To qualify for American Express Business Loans, you must be a pre-approved Business Card Member. Additional minimum requirements are:

  • At least 18 years old
  • U.S. citizen or permanent resident
  • Be in good standing with American Express

Funds can’t be used for personal purposes. You also can’t use your Business Loan proceeds to pay off debts to American Express.

Amex Merchant Financing

American Express OptBlue

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Business loans aren’t the only type of financing offered through American Express. If your small business accepts American Express cards, you may qualify for a different financial solution: American Express Merchant Financing.

You could receive a business loan of $5,000 to $2 million. Your loan comes with a single fixed fee of 1.75% to 20% of the borrowing amount. If you repay your loan early, you may even receive a rebate of up to 25% of your fee.

Repayment terms are 6, 12, or 24 months. You can have a fixed amount debited from your business bank account each day. If you’d rather have a more flexible option, you can choose to have a percentage of your daily receivables deducted instead. You can use your receivables from American Express or from all credit and debit transactions if you go this route.

To qualify, you must meet these minimum requirements:

  • At least $12,000 in annual credit and debit receivables
  • At least $50,000 in annual business revenue
  • Time in business of at least 24 months
  • Must accept American Express

Prosper

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If time in business requirements are holding you back from getting the capital your business needs, consider applying for a personal loan. In most cases, you can use the funds from a personal loan for business purposes. This eliminates time in business, annual revenue, and business credit history requirements.

While you can certainly apply for a personal loan through your bank, online lenders make it quicker and easier than ever to access funding. One online option is Prosper, which has loaned $14 billion to nearly 900,000 borrowers.

With a Prosper loan, you’ll have fixed 3- or 5-year repayment terms. Personal loan APRs range from 6.95% to 35.99%. Loans are available in amounts from $2,000 to $40,000.

Borrowers must meet the following minimum requirements:

  • Debt-to-income ratio below 50%
  • A source of income
  • No bankruptcies within the last 12 months
  • Less than 5 credit bureau inquiries within the last 6 months
  • At least 3 open trade accounts

Banks, Credit Unions, & Nonprofit Lenders In Indiana

Of course, online business lenders aren’t your only option. You can get the financing you need from a bank, credit union, or nonprofit lender. Find out the options available through your own financial institution, or check out one of the following lenders in the state of Indiana.

1st Source Bank

1st Source Bank was founded in 1863 in South Bend. Since its founding, it has won multiple local awards and has received recognition from Forbes, BauerFinancial, and Bank Director Magazine. This financial institution now operates 80 banking centers located across 18 counties.

Through 1st Source Bank, you can apply for a variety of financing options including:

  • Commercial Mortgage Loans: Terms up to 15 years
  • Term Loans: Terms up to 10 years
  • Business Acquisition Loans: Terms up to 10 years
  • SBA Loans
  • Lines Of Credit
  • Leases
  • Equipment Financing
  • Farm Loans
  • Business Specialty Financing

You can also sign up for business checking accounts, business and commercial insurance, and retirement plan services. Visit your local branch for more information.

Indiana Members Credit Union

Indiana Members Credit Union has 26 locations to serve residents in Indiana. This member-owned financial institution was first established in 1956 and has since grown to serve over 125,000 members throughout Central Indiana.

IMCU offers business checking, savings, CDs, and health savings accounts. You can also apply for financing, including:

  • Commercial Real Estate Loans
  • Lines Of Credit
  • Equipment & Inventory Financing
  • Business Credit Cards
  • Construction Loans

All borrowers must be IMCU members. To join the credit union, you must meet one of the following requirements:

  • Live or work in an eligible Central Indiana county
  • Work for an affiliated employer
  • Have a family member that is an IMCU member

Downloadable loan applications are available on the IMCU website. You can complete the loan application and send it with all required documentation to the IMCU Business Services & Lending Department, or you can drop your packet off at your local branch.

Indiana Statewide Certified Development Corporation

The Indiana Statewide Certified Development Corporation has assisted thousands of small businesses in the state in receiving funding through the Small Business Administration’s 504 loan program.

Under this program, you can qualify for financing for fixed asset purchases. This includes commercial real estate, machinery, and equipment. The Indiana Statewide CDC provides up to 40% of your project costs, while up to 50% is provided through a traditional lender. Then, you’re responsible for the remaining 10% of project costs.

SBA 504 loans come with fixed rates over terms of 20 years for real estate or 10 years for equipment.

Small Business Grants In Indiana

startup grants

If you don’t want to take on debt but need financing for your business, consider exploring small business grants. Small business grants provide the capital you need for your business without the requirement of repaying the funds. Yes, that means no monthly payments, no interest rates or fees, and no debt for your business.

However, scoring a small business grant isn’t as easy as filling out a quick online application, running your credit score, and getting financing. You’ll face a lot of competition to receive a small business grant. The application and approval process can often be quite extensive. You may even have to meet very specific requirements, such as being a veteran-owned business or operating within a certain industry.

In other words, there’s no guarantee that you will receive or even qualify for a small business grant. However, there are a few opportunities available to small business owners in Indiana that may be a fit for your business. Start with these options.

Elevate Ventures High Potential Startup Grant

Elevate Ventures is one of Indiana’s largest venture capital firms. This organization provides multiple financial opportunities for businesses, including High Potential Startup Grants. High-potential startups in communities throughout Indiana may qualify to receive awards of $5,000 to $25,000. Elevate Ventures also offers Small Business Innovation Research and Small Business Technology Transfer grant matches up to $150,000. To learn more about requirements and the funding application process, submit an inquiry through the Elevate Ventures website.

GoGlobal Grant Export Acceleration Program

The GoGlobal Grant Export Acceleration Program is a collaboration between the Indy Chamber and JPMorgan Chase. Through this program, matching grant funding of up to $5,000 is available to support export activities of qualifying businesses. Funds can be used for trade show attendance and conference costs, export plan development, and other company expenses related to export activities.

To qualify, you must:

  • Be in business for at least 2 years
  • Have primary operations based in the Indianapolis metro area
  • Participate in a one-on-one business coaching session

Priority is given to businesses with fewer than 250 employees and less than $20 million in annual revenue. You can learn more and apply for the grant by sending an email inquiry through the Indy Chamber website.

The Startup Ladies

Women-owned businesses can join The Startup Ladies for a small fee and have access to resources for starting and growing their businesses. Through The Startup Ladies, female entrepreneurs can attend events, access educational materials, and connect with potential clients and investors.

The Startup Ladies also offers funding opportunities. Members can apply for funding through The Startup Ladies Fund. The organization can also help members identify federal SBIR/STTR grant opportunities that are best for new businesses.

Loans & Resources For Startups In Indiana

Startups don’t always have access to the same financial opportunities as established businesses. Startups are seen as “risky” by lenders simply because they do not have a proven track record of success. A lack of revenue, business credit score, and history all spell big risk to lenders.

However, this doesn’t mean that there’s a lack of resources for startups. We’ve already reviewed a few lending options available to startups, such as personal loans for business. Now, let’s explore other resources available to startup businesses in Indiana, from mentorships to workshops and educational materials. Best of all, these resources are available to you for free or for a very low fee.

Indiana Small Business Development Center

The Indiana Small Business Development Center offers small business advising and services at no cost to small business owners in Indiana. There are 10 regional offices located throughout the state.

This organization can advise you on a variety of business topics including:

  • Market Research
  • Business Planning
  • Strategy
  • Exporting
  • Loan Assistance

The Indiana Small Business Development Center also offers workshops and events for small business owners for no cost or a small fee.

SCORE

If you need a business mentor, look no further than SCORE. Through one of the organization’s 300 chapters throughout the nation, you can connect with a business mentor at no cost. There are multiple chapters located in the state of Indiana.

SCORE’s business mentors can answer your questions and offer guidance in starting or growing your business. You can connect with your mentor through email, video chat, or face-to-face.

SCORE also offers educational opportunities and other free services to startups and established small businesses. This includes live and recorded webinars, online courses, and workshops.

Launch Indiana

Launch Indiana provides resources to help increase entrepreneurialism throughout the state. The organization’s goal is to foster innovation and growth for entrepreneurs and startup businesses.

Through Launch Indiana, you can take advantage of mentorships with coaches and experienced business owners. Other resources include videos, case studies, events, and other business tips and advice to help you grow your business and network with other entrepreneurs and businesses. Launch Indiana is also working to build co-working spaces and Internet of Things labs throughout the state to open up even more opportunities for business owners in Indiana.

What To Consider When Choosing A Lender

With thousands of lenders to wade through, which option is best for your business? Unfortunately, every business has different financial needs, so there’s no one-size-fits-all option when choosing a lender. The good news is that with a few factors in mind, you can more easily cut down your list of options to choose the lender that’s right for your business.

Type Of Financing

What type of financing do you need? Let’s say you don’t need money right now but would like an option for emergencies or expenses that arise in the future. In this case, you’d apply for a line of credit or business credit card. Seek out lenders that offer this type of financing. If you’re unsure of which type of financing is best for you, consider working with a lender that offers multiple financing options. These lenders can work with you to help find the best, most affordable solution for your business.

Borrowing Amount

How much do you need to borrow? If you need $250,000, not all lenders offer this amount. Others have much lower borrowing limits. These lenders can be crossed off your list.

Affordability

When you receive small business financing, you don’t just pay back the amount that you borrow. Instead, you’ll have to pay interest on borrowed funds and/or additional fees required by the lender. Make sure that you understand the cost of working with each lender on your list, and make sure that the rates, fees, and terms work for your business. Learn more about how to determine if your business can afford a small business loan.

Borrower Requirements

Do you meet all borrower requirements? Pull your free credit score online before you apply with any lender. Check your credit history to ensure there’s nothing that could prevent you from qualifying with a lender, such as a recent bankruptcy or a high number of credit inquiries. Run your financials to make sure you meet annual revenue requirements. If you don’t meet all requirements of one lender, move on to other options.

Final Thoughts

As a small business owner in Indiana, there are financial options open to you, whether you’re just getting started or you’re ready to expand your existing business. Unable to find an option that’s best for you? No problem. Check out our other resources to find the small business loan that’s best for your situation.

  • Best Small Business Loans For Veterans
  • Minority Business Loans
  • The Best Small Business Loans For Women
  • The 7 Best Small Business Loans For Bad Credit

The post The Best Business Loan And Financing Resources For Indiana Small Businesses appeared first on Merchant Maverick.

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How To Start And Fund A Catering Business: The Step-By-Step Guide

Does serving delicious food to a crowd of partygoers sound like a dream? Do you want to take your love of desserts to weddings and other special events? If so, becoming a professional caterer could be the right career path for you.

Sure, you could search your local job listings to find a catering position, but wouldn’t it be great to be your own boss? If creating your own menu and serving up delicious food and beverages at events interests you, why not start your own catering business?

Maybe it’s been a lifelong dream to operate your own catering business. Or maybe you just love to cook and want to turn it into a career. Whether you’ve already taken steps to launch your own business or you don’t know quite where to start, this post is for you.

In this article, we’re going to explore exactly what it takes to start and fund your own catering business. We’ll start by discussing how to create a business plan and why a plan is a necessity for a successful business. Then, we’ll delve into the expenses you’ll encounter and how you can cover those costs. We’ll also talk about choosing your business structure, building your web presence, and advertising methods that can bring in new customers.

Ready to go? Let’s get started on your path to entrepreneurship!

Create Your Business Plan

What Information to Bring Accountant for Small Business Taxes

Starting a business without a detailed business plan is similar to taking a cross-country trip without a GPS or a map. In short, it’s not a wise move. Your business plan should not only include details about your business in the present — your management team and your mission statement, for example– but it should also serve as an outline for how your business will hit future targets.

Your business plan acts as a blueprint, outlining how your company will become successful and profitable. For that reason, your business plan won’t look exactly like the plan of another business — even one within the same industry. However, even though details may vary, there are a few common sections that can be found in all business plans. Those include:

  • Executive Summary: Describes the content of the business plan
  • Overview: Includes background of the business, legal structure, and other key details
  • Industry Analysis: Overview of the industry, including the size, nature, and any current trends
  • Competitive Analysis: Overview of your competition
  • Marketing: An outline of your marketing strategy and how you’ll reach customers
  • Operations Plan: Description of the operations of your business
  • Management: Bios and skills of your management team
  • Financials: An overview of current and future revenues

Your business plan not only helps you hit your goals, but it’s also critical when it’s time to obtain financing. Banks, nonprofit lenders, and even some alternative lenders may require a business plan as part of a loan application, especially for startup loans.

Pick Your Niche

While it may be tempting to try to cater for every event in your area, you’re going to stretch yourself thin … and likely set yourself up for failure. Instead of trying to offer services to everyone, pick a niche.

You may already have an idea in mind. For example, maybe it’s always been your dream to be a wedding caterer. Be sure to also consider the type of food you like to make. If you prefer to make salads, sandwiches, and other lighter fare, consider catering for business or school functions, luncheons, and other daytime events. If you prefer to serve fancier entrees, consider catering for weddings and special events.

Another step to take before selecting your niche is to do some market research in your local area. Where are there gaps in catering availability? What niche is overcrowded with the competition? You may find that there a large number of wedding caterers already in your area. Unless you can bring something new to the table (being the only caterer to serve Southern-style barbecue, for example), you might want to consider filling a different customer need.

There are a wide variety of catering niches to consider, including:

  • Weddings
  • Corporate Events
  • Adult Parties
  • School Events
  • Children’s Parties
  • Festivals
  • Sports Events

With an idea of your niche and the type of food you need to prepare, you can move into the next step: planning your menu.

Create Your Menu

KDS Kitchen Display System

Once you have a niche in mind, you’ll be able to narrow down your menu choices. Let’s face it — if you’re planning to focus on children’s parties or school functions, you won’t exactly need filet mignon on the menu.

You also want to consider what type of food you’re experienced at making. While you can certainly test out new ideas in the future, you want to put your best foot forward when starting out. You also want to offer a variety of options while keeping your menu at a manageable size. Having a menu with too many items or items that contain ingredients that are difficult to source could cause unnecessary stress for you and your clients.

It’s also important to remember those with dietary restrictions. Consider adding a few options to your menu that are vegetarian, vegan, gluten-free, or dairy-free to help expand your customer base.

Performing a test run or two can help you further improve your menu. Once you have your menu in place, test it out on a few friends and family members. Get their honest feedback on where you excel, as well as where you fall flat. Tweak recipes as needed, change techniques to become more efficient, and be honest with yourself about what works and what doesn’t. Then, alter your menu accordingly.

Source Your Ingredients

After you create your menu, you’ll have a better idea of the ingredients needed to prepare your food. When you first get your business off the ground, you may be able to get the ingredients you need by purchasing from a wholesale club in your area. However, as your business grows larger and you have more events to cater, you’ll want to purchase your ingredients from other sources.

You can get fresh produce from local farmers. Start building these relationships by visiting your local farmers’ market. You can also build relationships with restaurant suppliers and food service vendors to purchase bulk ingredients at reduced prices.

Calculate Startup Costs

In many states, you will be unable to use a residential kitchen to prepare your food. If you plan to cater from home, you must contact the health department in your area to find out more about the regulations of home-based catering businesses, including inspection and permit requirements.

In most cases, you’ll need to rent space for your kitchen. There are two ways to go about this.

The first is renting your own commercial space. This is the more expensive option but is a necessity if you plan to cater full time.

If you only plan to cater events occasionally or on weekends, you may be able to rent a commercial kitchen for a few hours on the days when you need it. This is a more affordable option since you won’t have to invest in equipment, but it’s not ideal for full-time caterers.

If you aren’t renting space in a kitchen that’s already stocked, you’ll also need industrial equipment that is used to prepare your food. Some of the items you’ll need include:

  • Commercial Ovens
  • Stoves
  • Deep Fryers
  • Sinks
  • Refrigerators
  • Walk-In Freezers
  • Mixers & Blenders
  • Pots & Pans
  • Knives
  • Cooking Utensils & Tools
  • Storage Containers
  • Dishwasher

You’ll also need equipment that you’ll bring on-site for serving and keeping food at the optimum temperature, including:

  • Serving Dishes & Trays
  • Serving Utensils
  • Chafing Dishes
  • Carving Stations
  • Grills
  • Heat Lamps
  • Soup Kettles
  • Beverage Dispensers
  • Coffee Station

An additional cost to add to your list is a catering van. This van will be used to transport your food and equipment to venues. You may save money initially by purchasing a used vehicle. However, you need to ensure that you know the complete history of the vehicle. You may also incur additional costs if your used vehicle needs repairs soon after purchasing it.

Some caterers also provide table settings, glassware, and utensils, but this adds to your initial investment. You may also provide additional items for your events, including chairs and/or chair covers, tablecloths, and centerpieces, but again, this will add to your startup costs.

Before starting your business, sit down and make a list of your total expenses. You can tailor the list to your own business. For example, if you don’t serve fried food, you won’t have to invest in deep fryers. If you specialize in only desserts, you may have pastry tools, cake displays and stands, and bakeware sets on your list.

Once you’ve made your list, start shopping around to get an idea of costs. Check out prices online or visit local commercial kitchen equipment and supply stores. Once you have an idea of how much funding you need, it’s a smart idea to add about 30% to those costs to prepare for the unexpected. For example, if you’ve priced everything at $100,000, apply for a loan of $130,000 to make sure all of your bases are covered.

Register Your Business

Before you begin catering to clients, you need to register your business with federal, state, and local agencies.

First, you need to think of a business name. Brainstorm ideas to find a name that’s catchy and is a reflection of your brand. When you’ve come up with a great name, check your Secretary of State’s website to ensure that this name is not already being used by another business.

Next, you will need to select your business structure. This is an important step because your business structure determines how your business is taxed and your personal liability for debts incurred by the business. The types of business structures include:

Sole Proprietorship

This business is owned and operated by one person. This is the easiest business structure and does not require registration. Setting up a sole proprietorship is easy. However, this structure does not provide you with any protection against the debts and liabilities of your business.

General Partnership

This type of legal structure is made for businesses with two or more owners. These are the easiest to create, have a low cost of operation, and the fewest requirements. No state filing is required for a general partnership.

Limited Partnership

This is another type of structure for businesses with more than one owner. General partners in a limited partnership have unlimited liability. The remaining partners – limited partners – have limited liability. In most cases, the personal assets of limited partners are protected from being used to satisfy the liabilities and debts of the business.

Limited Liability Partnership

This type of structure is designed for professional service businesses. Personal assets of any partner can’t be used to cover the debts and liabilities of the business. However, all partners in an LLP are liable for their own acts, such as medical malpractice.

Limited Liability Company

An LLC is separate from its owners. This type of legal structure protects owners from personal liability without the higher tax rates and stricter requirements of corporations.

Corporation

Owners in a corporation are protected from personal liability for the debts of the business. Corporations are the most difficult to set up. However, it is necessary to choose this business structure if you plan to sell stock or raise large amounts of capital in the future.

The type of business structure you choose for your catering business will vary based on the number of owners and your plans for the future. Consult with an accountant or attorney to learn more about your options and which is best for you.

After you choose your business structure, you will need to register with the state where you will operate. You can register through your state’s Secretary of State website. Application and fee requirements vary by state. If you plan to offer services in more than one state, you will need to register with each state.

Another important step in registering your business is obtaining an Employer Identification Number (EIN) from the IRS. This is a necessary step if your business will have employees now or in the future.

Get Permits & Licenses

After registering your business, it’s time to apply for the permits that you need to legally operate your business. It’s necessary to do this early in the game, as it may take weeks or even months to receive your required permits.

State and local laws surrounding permit and license requirements vary. Some of the permits and licenses you may need to legally operate your business include:

  • Business Licenses
  • Health Permits
  • Food-Handling Licenses
  • Liquor Licenses

You can contact the local health department, the state Alcoholic Beverage Control board, and other state and local agencies to learn more about the licenses required in your area, how to apply, and any applicable fees.

When working with food, you also face inspections from your local health department. The temperature of prepared and stored food, waste disposal, and the safety and condition of your cooking equipment are just a few of the things that will be inspected periodically.

Get Business Insurance

Protecting your catering business is important, and there’s no better way to protect yourself and your business than with business insurance. As a caterer, there are multiple insurance options to consider.

General liability insurance protects you from lawsuits that occur during events. This type of insurance covers physical injuries, property damage, and even damage to your reputation.

Another type of insurance to consider is errors and omission insurance, also known as E&O insurance. This insurance protects you from lawsuits that may be filed if a mistake is made. For example, if a client warns of an allergen and you include an ingredient that triggers an allergic reaction, this insurance would protect you from a potential lawsuit.

Property insurance should also be a consideration. This insurance protects your equipment, fixtures, and other property from damage or theft.

If you have employees, you will also need worker’s compensation insurance. This covers medical costs and lost wages from employees when they are injured or become sick. This also protects your business from lawsuits as a result of injuries.

If your business serves alcohol, you may also be required to carry liquor liability insurance, which protects your company from alcohol-related lawsuits.

Insurance requirements vary by state. Talk to your local insurance agent to find out more about the laws in your state and to create a personalized insurance policy for your new catering business.

Seek Business Funding

We’ve already reviewed many of the costs you’ll encounter when opening your own catering business. Now, it’s time to determine how to pay for those costs. Whether you have money in the bank or your bank account is looking a little slim, there are financing options available for you. Start your search with these options.

Personal Savings

If you’ve been putting away money into a savings account, now may be the perfect time to withdraw your funds. The great thing about personal savings is that you won’t take on debt with a lender. This means no payments, fees, or interest. The downside, though, is that if your business goes downhill, it may take your savings with it.

Friends & Family

Consider taking a loan from a friend or family member that’s willing to invest in a potentially lucrative new opportunity. Prepare your presentation, have your business plan in hand, and explain why your opportunity is worth investing in.

If you come to a mutual agreement, make sure to get everything in writing. It also goes without saying that this friend or family member should be treated like any other lender. That means paying back your loan as scheduled.

Instead of a loan, you may consider equity financing. In this scenario, your friend or family member would own part of your business. The major benefit is that you wouldn’t have to immediately start making loan payments. However, you would give over some ownership (and a slice of your future profits) and control over your business if you go this route. Undecided? Learn more about the pros and cons of debt vs. equity financing.

ROBS

If you have a retirement account, you may be able to leverage these funds for your new venture. Normally, if you withdraw before you reach a certain age, an early withdrawal penalty and income tax penalties apply. However, you can avoid these costs through a rollover as business startups (ROBS) plan.

A ROBS plan allows you to use your retirement funds for starting or expanding your business. Four steps are required to access your funds. First, a C-corporation is created. The next step is to create a retirement plan for the new C-corp. Then, you can roll over funds from your existing retirement account into your newly created plan. Finally, you will use these funds to purchase stock in your C-corporation, giving you access to the capital you need for your new business.

The process isn’t complicated, but there are rules you have to follow to ensure you maintain compliance. To take the guesswork out of ROBS, many aspiring business owners work with a ROBS provider. For a fee, ROBS providers will set up your ROBS account for you and will maintain it to ensure everything is done by the book.

Using your ROBS is a great way to fund startup costs. Other than a setup fee and a monthly maintenance fee charged by your ROBS provider, you do not pay additional fees. After all, you’re using your own money. However, if your business fails, you put your retirement funds at risk.

Recommended Option: Guidant Financial

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Guidant Financial can help you roll over your retirement funds into capital you can use for your catering business. In about three weeks, you can have the funds you need to start or grow your business with Guidant Financial’s ROBS plans.

To qualify, you must have a retirement account worth at least $50,000. Most retirement plans qualify, including:

  • 401(k)
  • 403(b)
  • Traditional IRA
  • TSP
  • SEP
  • Keogh

There are no credit score, time in business, or annual revenue requirements to qualify. However, you must have a business to fund, and you also must be an employee of that business in order to set up your ROBS plan.

Since you’re using your own funds, you don’t have to worry about monthly loan payments. However, you will have to pay a one-time setup fee of $4,995 followed by a maintenance fee of $139 per month to maintain your account.

In addition to ROBS plans, Guidant Financial also offers additional small business loan options including Small Business Administration loans and unsecured business loans.

Equipment Financing

As we discussed earlier, there is a lot of expensive equipment needed to start your catering business, from a catering vehicle to commercial kitchen equipment. A financing option to consider when you need new equipment is equipment financing.

With equipment financing, you can take possession of the equipment you need without paying the full cost up front. Instead, you’ll pay a down payment (typically 10% to 20% of the purchase price), then repay a lender in smaller, more affordable payments over time.

There are two main types of equipment financing to consider: equipment loans and equipment leases. With a loan, you’ll make a small down payment, then put the equipment into use immediately. You’ll make regular payments to the lender that are applied to the principal balance as well as interest and fees. Once you’ve repaid the loan as agreed, the equipment is yours to keep, sell, or trade.

The other type of equipment financing is an equipment lease. You’ll also pay a down payment and regular payments. However, at the end of your lease, you return the equipment. At this time, you can sign another lease for new equipment. This is a better option if you plan to upgrade your equipment frequently, although this option can be more expensive over the long term.

With equipment financing, you typically do not have to put up collateral. Instead, the equipment being financed is the collateral and can be seized by the lender if you don’t make your payments as agreed.

Recommended Option: Lendio

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Lendio’s network of over 75 lenders can provide you with up to $5 million to finance your equipment. Loan terms are between 1 to 5 years with rates starting at 7.5% for the most qualified borrowers. With some lenders, you can get your funding in as little as 24 hours. Some applicants may even qualify for 0% down financing.

To qualify for equipment financing, you must meet the following requirements:

  • At least $50,000 in annual revenue
  • Personal credit score of 650 or above
  • Time in business of at least 12 months

If you have credit challenges, you may still qualify provided you have proof of solid cash flow and revenue for at least 3 months.

The funds can be used to purchase the equipment you need for your catering business, including but not limited to commercial kitchen equipment, office furniture and fixtures, software, appliances, and commercial vehicles.

If you don’t qualify for equipment financing through Lendio’s network, you can shop around for other financing options. Through Lendio, you can apply for financial products including SBA loans, business credit cards, lines of credit, and startup loans.

Lines Of Credit

Running your own catering business comes with its challenges. Some challenges are expected — rushing around to cater a big wedding, for example — while others come when you least expect it. Whether it’s a slow season that has impacted your incoming cash flow, equipment that needs repairs, or an unforeseen emergency, even the most successful business face the unexpected.

For these times, it’s great to have a backup plan, like a flexible line of credit. A line of credit is different from a traditional loan because you don’t receive one lump sum that you immediately start repaying. Instead, a lender assigns you a credit limit — much like a credit card — and you can withdraw money from your line as needed.

Your line of credit is ready to use whenever you need it. You don’t have to immediately draw funds if there’s no need, and most lenders don’t charge fees if you don’t use your line of credit. When you do use your line of credit, you’ll repay your balance plus any fees and interest charged by the lender. Since this is a revolving form of credit, funds will be replenished and available to use again as you pay off your balance.

Recommended Option: Fundbox

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Fundbox offers lines of credit that can be used for any business purpose. One of the standout features of Fundbox is that the lender looks at the performance of your business — not just your credit score. Even if you’ve been turned down by other lenders in the past, you may still qualify for a Fundbox line of credit.

Through Fundbox, you may qualify for up to $100,000. Once approved, you can immediately make draws on your account. Repayment terms are 12 or 24 weeks, and rates start at just 4.66% of the draw amount. Weekly repayments are automatically deducted from your business checking account. There are no prepayment penalties, all remaining fees are waived if you pay off early, and there are never any fees if you don’t make a draw.

To qualify, you must meet the following minimum requirements:

  • At least $50,000 in annual revenue
  • Holder of a business checking account
  • At least 2 months of activity in accounting software OR at least 3 months of transactions in a business bank account

Business Credit Card

Another source of financing that’s great for covering unexpected expenses is a business credit card. A business credit card works just like your personal card. You can use your card online and in stores to make purchases anywhere credit cards are accepted. When you use your card, the lender charges interest on the borrowed portion of funds. If you don’t use your card, you aren’t required to pay interest. However, annual fees and other charges may apply.

Business credit cards are great for emergencies or for quickly resolving cash flow issues. You can also use your credit card for recurring expenses, such as gas for your catering van. If you go this route, apply for a low-interest rewards card that gives you cash back or other perks just for using your card.

Recommended Option: Chase Ink Business Cash

Chase Ink Business Cash



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Annual Fee:


$0

 

Purchase APR:


15.49% – 21.49%, Variable

With Chase Ink Business Cash, you can earn rewards just for using your card to pay for your business expenses. Using this card gets you 5% cash back on the first $25,000 spent at office supply stores and on internet, cable, and phone services. You can earn 2% cash back on the first $25,000 used at gas stations and restaurants. These offers renew each year on your account anniversary. For all other purchases, you can earn unlimited 1% cash back.

New cardmembers can take advantage of a $500 cash back bonus offer when $3,000 is spent within 3 months of opening an account. This card also comes with additional benefits including purchase protection, extended warranty protection, and free employee cards.

There is no annual fee for the Ink Business Cash credit card, and it comes with a 0% introductory APR for the first 12 months. After the introductory period, the card has a variable APR of 15.49% to 21.49%.

This card is recommended for borrowers with good to excellent credit scores.

Vendor Financing

As a caterer, you’ll establish relationships with vendors. You’ll purchase your ingredients, supplies, and other necessary items from these vendors. Many times, you’ll purchase these items up front. Other times, however, you may need a little help in the form of vendor financing.

With vendor financing, a lender will pay your vendors up front so you can get the supplies necessary for running your business. You’ll then be able to spread your purchase out over several smaller payments. Like other financial products, you’ll pay fees and/or interest for the convenience. While the cost of borrowing may be higher than making a purchase up front, the extra expense may be well worth the cost if you’re in a financial bind.

Recommended Option: Behalf

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You can pay your vendors immediately without putting up the money up front by working with Behalf. Through Behalf, you can get up to $50,000 to pay your vendors. Then, you have up to 6 months to repay the lender.

Monthly fees start at 1% of the borrowing amount and are based on your creditworthiness. There are no origination fees, membership fees, or other hidden costs to borrow from Behalf.

There are no time in business, annual revenue, or credit score requirements to qualify. However, Behalf will perform a hard pull on your credit once you submit your application.

Personal Loans For Business

You have a solid credit score, but small business lenders won’t even give you a second glance. What gives?

Many small business loans have time in business and annual revenue requirements. This is fine when your business is already operating, but what do you do when you need a loan before you even open your doors? Try applying for a personal loan for business.

As a startup, you may find it challenging to qualify for a small business loan. However, you can use your own personal credit score and income to qualify for a personal loan that is used for business expenses.

These loans don’t have time in business, annual revenue, or business credit score requirements, so you can qualify even if you’ve not yet catered a single event. Personal loans are available for a wide range of credit scores. However, having a high credit score can help you qualify for the best interest rates and terms.

Recommended Option: LendingPoint

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LendingPoint specializes in personal loans, offering qualified borrowers $2,000 to $25,000. Rates range from 9.99% to 35.99% with repayment terms of 24 to 48 months. An origination fee of 0% to 6% of the borrowing amount may apply. Payments are made twice per month.

You can quickly and easily qualify for a LendingPoint personal loan. To receive an offer in just minutes, you need:

  • Proof of employment & income
  • Bank statements
  • Voided check
  • Driver’s license or government-issued ID

To qualify for a loan, you must:

  • Be at least 18 years old
  • Have a social security number
  • Have at least $20,000 in annual income
  • Have a verifiable bank account
  • Live in a state serviced by LendingPoint
  • Have a credit score of at least 585

Choose The Right Software

pos with raw ingredient tracking

From keeping track of events to accepting credit cards, the right software can help you do it all. As a caterer, there are several types of software you should consider investing in to keep operations running efficiently.

Accounting Software

This software allows you to perform functions such as tracking expenses, sending invoices to clients, managing payroll, and keeping up with inventory. With accounting software, you can keep up with your financials and run reports, which is especially helpful when you’re seeking financing from a bank or traditional lender. Accounting software also makes it easier for your business when tax time rolls around.

New to accounting? Download our free eBook, The Beginner’s Guide to Accounting.

Catering Software

There are specific software programs designed to help caterers manage all aspects of their businesses. Features include invoicing, billing, employee scheduling, event bookings, and other tools to keep your catering business on track.

Payment Processing Software

Not all of your clients will have cash, especially when they’re paying off large bills for their catering expenses. To make payments easier for your clients, invest in payment processing software. This software acts as the communicator between your bank and your customer’s bank, allowing you to accept debit cards, credit cards, and other methods of payment. Most payment processing software comes with monthly subscription fees, and some companies even offer free hardware that makes it easier than ever to accept multiple forms of payment.

Hire Employees

When you first start your business, you may be a one-man operation until you start bringing in revenue. However, you will eventually need to hire employees if you want to grow and scale. If you’re like many caterers, you may opt to hire an employee or two right from the start.

Employees that you may hire for your business — either now or in the future — include:

  • Chef: Your chef will be in charge of preparing the food. For large events, consider hiring sou chefs for additional assistance.
  • Servers: Bring food and drinks to guests
  • Bartenders: Serve alcoholic beverages to guests
  • Busboys: Responsible for clearing off tables
  • Host/Hostess: Help guests find their seats
  • Event Planner: Meets with the client to discuss details about the event
  • Supervisor: Ensures that other staff members are doing their jobs efficiently

Until your business grows and brings in revenue, you may opt to hire just a few staff members, such as a chef and a server. As your business gains more customers and becomes profitable, you can add additional employees to your staff.

Do your research to get an idea of the average pay range in your area for each position. It’s also important to remember that other expenses come with hiring staff, including workman’s compensation insurance, training costs, and benefits.

To find employees for your business, ask friends, family members, and colleagues for referrals. You may also post a job advertisement on online job boards. You can even contact local temporary agencies to find the help you need.

Bolster Your Web Presence

Your plans for a catering business are coming together, so now it’s time to start thinking about how you’re going to bring in clients. There’s no better place to start than the internet.

Just think about it. If you’re looking for a local company to work with, where is one of the first places you look? The internet, of course.

You can quickly build your web presence with these easy steps.

Launch Your Social Media Profiles

Social media is a great way to reach new customers, and best of all, setting up your profiles is free! Create business pages on Facebook, Twitter, Instagram, and/or Pinterest. Make sure to include critical details such as your contact information, service areas, and types of events catered. You can build up your profiles to include information such as menus, pricing lists, and photos of your food and past events.

An added bonus on social media is that you can communicate with potential customers through comments or direct messaging.

As you begin to grow your business, you can later invest in social media ads, but in the beginning, focus on getting your profiles up and running.

Want to get the most out of your social media profiles? Check out our Guide to Social Media Marketing.

Build Your Website

In addition to your social media profiles, you also need to build a website. This doesn’t have to be overly complicated. In fact, there are lots of website builders that make it easy to choose a template, customize your font and colors, and drag and drop images, text boxes, and tools — no design experience required.

Make sure that the design of your website reflects your branding. You also want to include important details, including the name of your business and contact details. You can also add additional features and information, including a live chat option, photo galleries, and reviews and testimonials.

Advertise Your Business

Boosting your web presence is a great start to advertising your business, but make sure that you don’t stop there. There are several ways that you can advertise your business — both online and off.

Fliers

Pass out or hang flyers advertising your catering services throughout your area. Make sure that you understand the regulations in your area surrounding posting and/or distributing flyers.

Online Ads

Purchase ad space on Facebook, pay-per-click ads on search engines, or even post advertisements on local online forums and social media groups.

Newspaper Ads

This is an oldie but goodie: pay for ad space in your local newspaper.

Attend Wedding Shows

Many cities and towns have bridal shows where vendors can advertise their services. Research events in your area, rent booth space, and advertise your business in-person to newly engaged couples.

Wedding & Event Websites

Submit your business information to wedding and event websites to draw in new customers.

Word-Of-Mouth

Word-of-mouth advertising is the best form of advertising. Ask your past customers for testimonials and reviews, and always make sure to go above and beyond to provide exceptional service.

Final Thoughts

Starting your own catering business is exciting but venturing out on your own can also be a little scary, especially if you lack business experience. However, you can be on track to owning and operating a successful catering business with careful planning, preparation, and strategic borrowing. Good luck!

The post How To Start And Fund A Catering Business: The Step-By-Step Guide appeared first on Merchant Maverick.

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The Best Business Loan And Financing Resources For Colorado Small Businesses

Colorado is one of the fastest-growing states in the nation. Not only is its population burgeoning, but its economy is flourishing and only expected to grow into the future. Professional and business services, the tech industry, and agriculture are among the sectors that will continue to bring new jobs and contribute to the state’s economy.

It isn’t just big business that’s helping the economy grow, either. Small businesses play an extremely important role throughout the state. Unfortunately, these smaller businesses — businesses just like yours — may struggle to find the financing and resources they need to be successful.

The good news is that there are plenty of financing options available to small business owners. The key is knowing where to find them. Instead of spending hours wading through lenders, scratching your head over interest rates and terms, or struggling to get the capital you need, keep reading this post — we’ve taken the guesswork out of small business financing. From online and traditional lenders to grants and more, read on to learn about the resources available to Coloradans.

Online Business Lenders For Colorado Businesses

You probably already use the internet for business — from communicating with clients and suppliers via email to placing orders for inventory and paying utility bills. Why not use it to find financing for your business?

Online lenders make it more convenient than ever to apply for small business loans and financing. You can fill out your application, submit your documentation, and even receive funds in your bank account — all without ever leaving your home or office.

It’s possible to get the financing you need in as little as 24 hours by working with an online lender. Even if you’ve had trouble qualifying for financing in the past, there are online options available to you. Start by checking out these recommended lenders.

Lendio

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Lendio makes shopping around for financing easier than ever. A single application connects you with over 75 lending partners, allowing you to compare rates and find the most affordable financing options in just minutes. Applying with Lendio is free, there’s no obligation, and your credit score isn’t affected by checking your offers.

No matter what type of small business financing you need, you can connect with the right lender through Lendio. Financial products available through Lendio include:

  • Small Business Administration (SBA) Loans: $50,000 to $5 million
  • Term Loans: $5,000 to $2 million
  • Short-Term Loans: $2,500 to $500,000
  • Lines Of Credit: $1,000 to $500,000
  • Equipment Financing: $5,000 to $5 million
  • Commercial Mortgages: $250,000 to $5 million
  • Accounts Receivable Financing: Up to 80% of receivables
  • Startup Loans: $500 to $750,000
  • Business Credit Cards: $1,000 to $500,000
  • Merchant Cash Advances: $5,000 to $200,000

Rates, terms, and borrower requirements vary. You may receive your funds in as little as 24 hours based on the product you select.

SmartBiz

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If you don’t qualify for a low-interest bank loan, there may be an alternative: Small Business Administration loans.
The SBA guarantees a portion of the loans provided through its various loan programs, so lenders feel more confident in financing small businesses. Meanwhile, you’ll get the benefit of a low-interest, long-term loan, even if you’ve been turned down by banks and traditional lenders in the past.

Navigating the SBA application process can be a challenge, but SmartBiz has simplified it through its online marketplace. You can prequalify in minutes, receive funds quickly, and easily move through the SBA loan process by working with SmartBiz.

Through SmartBiz, you can apply for a loan used for working capital or to refinance debt. Loans are available for $30,000 to $350,000 with interest rates of 8.25% to 9.25%. Repayment terms are up to 10 years.

Funds for these loans can be used to refinance existing debt, purchase inventory or equipment, launch a marketing campaign, hire new employees, or cover operating expenses. Loan funds can’t be used to pay unpaid taxes.

To qualify for this loan, you must meet these minimum requirements:

  • At least 2 years in business
  • U.S. citizen or legal permanent resident
  • Personal credit score of 640 or above
  • Cash flow to cover loan payments
  • No bankruptcies or foreclosures within 3 years
  • No defaults on government-backed loans
  • No outstanding tax liens

If you want to purchase, expand, or refinance your commercial property, you can apply for an SBA 7(a) commercial real estate loan. Through SmartBiz, you can apply to receive $500,000 to $5 million with interest rates of 7% to 8.25%. Repayment terms are up to 25 years.

These minimum requirements apply to all borrowers:

  • At least 51% of the property is occupied & used by your business
  • Time in business of at least 3 years
  • Personal credit score of 675 or above
  • Cash flow to cover loan payments
  • Purchase price exceeds $500,000
  • U.S. resident or legal permanent resident
  • No bankruptcies or foreclosures within the last 3 years
  • No outstanding tax liens
  • No defaults on government-backed loans

Funds from these loans can’t be used to purchase investment properties or to fund new construction costs.

OnDeck

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OnDeck offers two loan options for small business owners in Colorado: term loans and lines of credit. Let’s start off by looking at the options for OnDeck’s term loans.

With a term loan, you can receive a lump sum in amounts up to $500,000. OnDeck offers short-term loans with terms of 3 to 12 months and simple interest rates starting at 9%. This means that your interest rate is a percentage of your loan amount. If you borrow $20,000 at a simple interest rate of 9%, you’ll pay $1,800 in interest — or a total of $21,800 before any additional fees are applied.

Short-term loans are best for projects with an immediate return, such as seasonal hiring, inventory purchases, or launching a marketing campaign.

OnDeck also offers long-term loans. These loans have terms of 15 to 36 months with annual interest rates starting at 9.99%. Long-term loan funds are best for expanding your business, making large-scale inventory purchases, or buying equipment.

To qualify for a term loan, you must have:

  • Time in business of at least 1 year
  • At least $100,000 in annual revenue
  • Personal credit score of 500 or above

If you want a more flexible form of financing, apply for OnDeck’s line of credit. You can receive up to $100,000 with APRs starting at 13.99%. A line of credit is best for filling revenue gaps or paying unexpected expenses.

You only pay interest on borrowed funds, and payments are made each week through automatic deductions. A $20 monthly maintenance fee is required but will be waived for 6 months if you draw at least $5,000 within 5 days of opening your account. There are no draw fees for using your line of credit.

To qualify for a line of credit, you must meet these requirements:

  • Time in business of at least 1 year
  • At least $100,000 in annual revenue
  • Personal credit score of 600 or above

Breakout Capital

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Breakout Capital provides qualified small business owners with up to $250,000 with its small business loans. Daily, weekly, and monthly repayment terms up to 2 years are available. Breakout Capital loans have a fee of 1.25% to 3.5% of the borrowing amount each month.

To qualify for a small business loan, you must have:

  • A time in business of at least 1 year
  • A personal credit score of 600 or above
  • At least $10,000 in monthly revenue

If you need more capital, you may want to consider FactorAdvantage. This service combines invoice factoring and a business loan to provide qualified borrowers with up to $500,000. Fees start at 1.25% of the borrowing amount per month, and repayment terms are available up to 2 years.

If neither of these options seem right for you, Breakout Capital’s lending experts can connect you with other financing options including:

  • SBA 7(a) Loans
  • Equipment Leases
  • Merchant Cash Advances
  • Lines Of Credit

Fundbox

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If you want a fast, flexible line of credit that you can access in just minutes, take a look at what Fundbox has to offer.
You can qualify for a line of credit up to $100,000 when you apply with Fundbox. Repayments are made over a 12- or 24-month period, and payments are automatically withdrawn from your business bank account each week.

Fees for using your Fundbox line of credit start at just 4.66% of the draw amount and are based on the performance of your business. If you don’t use your line of credit, you never pay any fees. As you repay your line of credit, funds are replenished and become available to use again.

Fundbox has a fast and easy application process with minimum borrower requirements. To qualify, you must have:

  • Business checking account
  • At least $50,000 in annual revenue
  • At least 3 months of transactions from your business bank account OR at least 2 months of activity in accounting software

Amex Merchant Financing

American Express OptBlue

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If your small business accepts American Express, you may qualify for a business loan up to $2 million with American Express Merchant Financing.

One of the best things about Amex Merchant Financing is you don’t have to worry about confusing interest rates or fees. Instead, you pay one fixed fee for your loan. Fees are based on the terms you select and range from 1.75% to 20% of the borrowing amount. If you repay your loan early, you could receive a rebate of up to 25% of your fee.

Repayment terms of 6, 12, and 24 months are available. A fixed amount will be automatically deducted from your bank account each business day to repay your loan.

Borrowers must meet the following requirements to qualify:

  • Accept American Express Cards
  • Have at least $12,000 in annual credit & debit receivables
  • Have at least $50,000 in annual business revenue
  • Have a time in business of at least 2 years

Credibly

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Credibly is a lender that doesn’t have a one-size-fits-all solution for small businesses. Instead, this lender offers three products to give small business owners the capital they need: working capital loans, business expansion loans, and merchant cash advances.

A working capital loan is ideal for covering operational expenses and fueling business growth. Under this program, you may qualify for up to $400,000 that can be repaid over terms of 6 to 18 months. Automatic payments are withdrawn from your account daily or weekly.

Instead of a traditional interest rate, these loans come with factor rates that start at 1.15. Learn more about how factor rates affect the cost of your loan.

The requirements for a Credibly working capital loan are:

  • Personal credit score of 500 or above
  • Time in business of at least 6 months
  • At least $15,000 in average monthly bank deposits

If you’re ready to expand your business, consider applying for Credibly’s business expansion loan. You can receive up to $250,000 with terms of 18 or 24 months. Repayments are automatically deducted each week. Interest rates for these loans start at 9.99%.

For Credibly’s business expansion loans, you must have:

  • A personal credit score of 600 or above
  • Time in business of at least 3 years
  • At least $15,000 in average monthly bank deposits
  • At least $3,000 in average daily balances

The final option that may work best for you is a merchant cash advance, or MCA. Credibly purchases a percentage of your future receivables. Daily remittances are made until your loan plus any applicable fees are repaid. The estimated duration of this type of financing is 3 to 18 months.

With this type of financing, you can qualify for up to $400,000. Factor rates start at 1.15.

Requirements for a Credibly MCA are:

  • Personal credit score of 500 or above
  • Time in business of at least 6 months
  • At least $15,000 in average monthly bank deposits

Upstart

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Having trouble finding a low-interest loan option? Consider using your own personal credit score and income to qualify for a personal loan for business. Whether you’re operating a brand new business or you can’t meet the requirements of small business lenders, getting a personal loan could be the hassle-free, affordable option you’re looking for.

Upstart is an online lender that offers personal loans that you can use for your business expenses. You can borrow between $1,000 and $50,000 with APRs starting at 8.09% for the most qualified borrowers. Don’t have perfect credit? It’s no problem. You can still qualify for a loan with APRs up to 35.99%.

One of the unique things about Upstart is that the lender considers more than just your credit score when approving your loan. Upstart looks at overall credit history, area of study, job history, and education to determine if you qualify for a loan.

To qualify for an Upstart personal loan, you must meet the following minimum requirements:

  • A source of income
  • Personal credit score of 620 or above
  • No bankruptcies or public records
  • Less than 6 inquiries within the last 6 months on your credit report
  • A solid debt-to-income ratio

Banks, Credit Unions, & Nonprofit Lenders In Colorado

If you’d rather work with a traditional lender, there’s no shortage of them in Colorado. Work with your own bank or credit union, or consider one of these options for your business financing.

Bank Of Colorado

The Bank of Colorado has branches located all throughout the state, including cities like Akron, Colorado Springs, Fort Collins, and Denver. The Bank of Colorado offers multiple financial products for small business owners. In addition to business checking and savings accounts, you can apply for:

  • Business Credit Cards
  • Business Loans
  • Lines Of Credit
  • Agriculture Loans & Lines Of Credit
  • Equipment Loans
  • Real Estate Loans
  • Livestock Loans

Bank of Colorado also offers merchant card processing, employee benefits, and other small business services. Visit your local branch to apply for Bank of Colorado’s small business banking services.

Ent Credit Union

Ent Credit Union was founded in 1957 and has grown to over 30 branches throughout the state with more than 330,000 members. Service centers can be found in cities including Aurora, Denver, Colorado Springs, and Parker.

You can apply for small business checking, savings, and money market accounts. If you need extra capital for your business, you may also qualify for one of Ent’s financial products including:

  • Business Auto Loans
  • Business Credit Cards
  • Lines Of Credit
  • Commercial Real Estate Loans
  • Business Term Loans
  • Equipment Loans
  • SBA 504 Loans

To apply for any type of financing, you must be an Ent Credit Union member. To qualify for membership, you must meet one of the following requirements:

  • Live, work, attend school, or worship in one of the counties served by Ent
  • Be civilian or military personnel of the Colorado Air National Guard or Colorado Army National Guard
  • Be associated with Buckley Air Force Base
  • Have a family member that is a member of Ent

You can sign up for membership online, by phone, or through a service center.

Colorado Enterprise Fund

Colorado Enterprise Fund is a nonprofit lender that specializes in lending to small businesses that may not qualify for traditional financing. Since 1976, this lender has closed over 2,000 loans for small business owners in Colorado.

There are multiple financing options available through the Colorado Enterprise Fund, including:

  • Dream Big Microloans: Up to $50,000 with terms up to 7 years
  • Step Up Loans: Up to $500,000 with terms up to 10 years
  • Healthy Food Loans: Up to $500,000
  • Valor Loans For Veterans: Up to $500,000 with terms up to 10 years
  • SBA Community Advantage Loans: Up to $250,000 with terms up to 25 years
  • Just In Time Lines Of Credit: Up to $100,000 with terms up to 2 years
  • GAP Loans: Up to $500,000 with terms up to 25 years
  • Commercial Real Estate Loans: Up to $500,000 with terms up to 7 years

Startups and existing businesses may be eligible to receive funding. Colorado Enterprise Fund will evaluate several factors when determining whether to approve an application, including:

  • Personal Credit Score
  • Equity
  • Industry Experience
  • Payment History
  • Cash Flow & Profitability
  • Collateral

The online application and all requirements can be found on the Colorado Enterprise Fund website.

Small Business Grants In Colorado

startup grants

Nothing in life is free … or is it? If you qualify for a small business grant, you could get the financing your business needs without having to repay the funds. No interest rates, no debt, no problem, right?

Unfortunately, many small business owners find that the process of finding, qualifying for, and receiving a small business grant is extremely difficult. Even if you meet the stringent criteria, you’ll have to compete with many other small business owners.

This doesn’t mean that you should just forget about small business grants. If you qualify, you certainly should take the time to apply. However, just understand that you also need to consider other sources of capital for your business.
In the state of Colorado, there are several grant opportunities available to small business owners. Get started with these options.

LEADING EDGE For International Opportunities

Leading Edge for International Opportunities is a grant program administered by the Colorado Office of Economic Development and International Trade. The proceeds from these grants are used for covering the costs of export projects. Minority, veteran, and women-owned businesses are eligible to apply.

Through this program, grant recipients can receive up to $10,000 to pay for costs associated with international business development and marketing projects, including foreign trade show exhibition and conference costs, advertising in overseas industry trade publications, and foreign business-to-business matchmaking services.

To qualify, businesses must meet the following requirements:

  • Employ fewer than 100 employees globally
  • Headquarters in Colorado OR at least 50% of employees based in Colorado
  • Registered with the Colorado Secretary of State
  • At least 51% ownership by minorities, veterans, or women
  • Time in business of at least 1 year

All information and the online application are available through the Colorado Minority Business Office.

Colorado First & Existing Industry Customized Job Training Grant Program

The Colorado First & Existing Industry Customized Job Training Grant Program is open to new or existing Colorado businesses. Through this program, grant funds can be used for training permanent, full-time employees. Businesses can receive up to $1,400 per eligible employee.

There are several requirements a business must meet to receive this grant, including:

  • Contributions of at least 40% to the total costs of grant-funded training
  • Must pay at least $13 per hour in urban counties and at least minimum wage in rural counties
  • Must offer health insurance to employees

To learn more about this grant and to apply, you must contact a CFEI college representative through the Colorado Community College System website.

Colorado Creative Industries Grants

Colorado Creative Industries offers multiple grant opportunities for small businesses and entrepreneurs. One of the most notable grant programs is the Career Advancement Grant. Through this program, you can receive matching funds up to $2,500 to stimulate a commercial creative business.

To qualify for this grant, you must meet these requirements:

  • A resident of Colorado
  • At least 18 years old
  • Have a creative sector business
  • Received no funding from CCI within 12 months of the application deadline

An online application for this grant and information on additional funding programs is available on the Colorado Creative Industries website.

Loans & Resources For Startups In Colorado

You have your business plan in place, you’re motivated and focused, and you’re ready to launch your new business. There’s just one thing missing from the entrepreneurial equation: capital.

Getting a loan through your bank or even alternative lenders can be a challenge for startup businesses. But don’t let that get you down because there ARE options available to you if you know where to look.

Start your search for funding with these organizations. In addition to funding, you’ll also have access to loads of resources including business training, one-on-one consultations, and educational materials to help you start and operate a successful small business.

Colorado Small Business Development Center Network

If you need business consulting, look no further than the Colorado Small Business Development Center Network. There are more than 80 centers located throughout Colorado that offer free one-on-one consulting on topics including:

  • Marketing
  • Financial Assistance
  • QuickBooks
  • Business Plan Writing
  • Certifications
  • Social Media Strategies

Workshops, scholarships, strategic planning courses, eLearning videos, and special events are also offered through the Colorado SBDC Network. Visit the official website or your local center for more information on the resources available to small business owners.

SCORE

Whether you need help starting your own business or advice for your existing business, check out SCORE to connect with a business mentor. You’ll receive free advice online, over the phone, or at a SCORE office near you.

Mentorships aren’t all that SCORE has to offer. You can also sign up for workshops, classes, and webinars. SCORE also has a large library of business resources to access. All services are available for free or for a low fee.

In Colorado, there are several offices throughout the state in cities including Denver, Colorado Springs, and Pueblo. You can call or visit your local office or go online to request a mentor.

What To Consider When Choosing A Lender

As you can see, there are plenty of small business financing options and resources for Coloradans. However, narrowing down your choice to just one is still a daunting task. Whittle down your choices by considering the following:

Does The Lender’s Products Fit My Needs?

One of the first steps you should take before seeking financing is to determine what product works best for you. If you want capital that’s available when you need it, work with a lender that offers business credit cards or lines of credit. If you need a large amount of capital, find lenders that offer long-term, low-interest loan options. By determining what type of financing works for your business beforehand, you can eliminate lenders that don’t offer the financial products you need.

Do The Rates & Terms Work For Me?

Shop around to compare rates and terms of lenders that are at the top of your list. Would you rather make one monthly payment? Cross off the lenders that require weekly, daily, or bi-weekly payments. Have a good credit score? Avoid lenders that specialize in financing to less creditworthy borrowers, since interest rates will often be much higher.

Always take the full cost of financing into consideration, including additional fees charged by the lender. Then, analyze your other business debts. You should ensure that your business can comfortably afford to take on additional debt before signing on the dotted line.

Will The Funding Be Enough For My Business?

How much capital do you need for your business? Once you’ve determined the amount you’re seeking, you can narrow down your list of lenders. If you need $100,000 to purchase new equipment, a lender with loans that max out at $50,000 won’t cut it. Calculate how much you need to borrow, then select a lender that can meet your financial needs.

Do I Meet The Lender’s Requirements?

Before you apply for financing, check your credit score, understand any negative items on your credit report, and have a grasp of the financials of your business. Most lenders look at factors including personal and business credit scores, personal and business credit history, time in business, and annual revenue. If you fall short with one lender, find a lender with requirements you can meet.

One last thing to note is that if you’re unable to meet the criteria of multiple lenders, it may be time to evaluate if now is the right time for financing. Break down your finances, work to build up your credit score, and explore all financial options before signing on to a high-interest loan with unfavorable terms.

Final Thoughts

Building a business is never easy. However, with the many resources available to Coloradans, you can increase your chances for success whether you’re just getting started or you’re ready to expand your business. Always do your research, consider all options available to you, and take the time to determine what steps to take next to best benefit your business.

The post The Best Business Loan And Financing Resources For Colorado Small Businesses appeared first on Merchant Maverick.

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The Step-By-Step Guide To Starting And Funding A Tutoring Business

The news cycle is full of hype about the “knowledge economy” but often light on details about how the average person can catch a piece of the tutoring action. Do you have a skill you’ve carefully honed over the years — or even one you have accidentally cultivated through repetition at your job? Don’t have state certification and six years of college handy? No worries; you don’t have to have an MA in education to be an effective teacher. One of the more accessible points of entry to a career in education is to teach those skills to other people via the increasingly lucrative tutoring industry.

Have you considered starting a tutoring business? Tutoring may be one of the easier avenues to make a little cash in the knowledge-selling economy, but expanding a part-time coaching gig to full-time, lucrative business can take a surprising amount of planning and resources. Not sure where to start? We’ll walk you through a step-by-step process for planning your tutoring business. We’ll also give you some ideas for where you can turn for funding when you need it.

Ready? Let’s go!

Pick A Tutoring Niche

Life is full of paradoxes, but one key part of thinking big is to narrow your focus. Creativity is as informed by limitation as it is by possibility.

As you would when starting any kind of business, think about where you can add value and what problems your skill set can solve. Are people in your area already doing what you’re planning to do? Is there an X-factor you could offer? A different spin on the familiar? Or is there a niche that’s unserved or under-served, particularly in your local area? For that matter, does your area have needs for specific skill sets?

Don’t have the skills or the local demand to create a flute tutoring business?

You can always fall back on subjects that are in high demand. Languages. Writing. Math. Science. And remember, each of these subjects can be broken down farther into sub-categories like algebra, chemistry, conversational Spanish, etc.

Another safe approach is to tutor students who are studying for standardized tests like the SATs, GREs, and LSATs or even trade certification tests like CompTIA A+ for IT technicians. The possibilities aren’t quite endless, but they are numerous.

Choose A Business Location

One of the great things about tutoring is that you can do it just about anywhere: at a dedicated business site, at a college library, at a coffee shop, at your home, or remotely over the internet.

Early on, your choice of location may not be critical–you can tailor your work environment to meet your own needs and the needs of your clients. Obviously, some of those options will disappear once your business gets large enough–your local coffee shop may or may not appreciate you using their space to run your business–so you’ll want to have a growth strategy in mind if you’re planning on turning your business into a tutoring empire down the road.

At the same time, you’ll want to avoid spending more on overhead than your business strategy requires. If you don’t need a brick and mortar space or a fancy interactive website right away, it may be best to hold off on those investments while you build your brand and reputation.

You’ll also want to consider the demographics of your clientele. Are they easily distracted teenagers who may have a hard time concentrating with a lot of background noise? Are they older adults who aren’t as tech-savvy as you are? Are they dependent on public transportation or parents to get to you? Does your subject matter require extra space for demonstrations? Are you working with clients with learning or physical disabilities? Are you going to need WiFi?

Keep all of these factors in mind when you’re considering a location for your tutoring business.

Create A Business Plan (If You’re Going Big)

If you’re going to be tutoring as a side gig, you can probably skip this part, but it’s not a bad exercise for anyone to try, even if they aren’t planning to incorporate anytime soon.

A business plan is simply a written, organized description of your planned business and business strategy. It’s your vision of how your business will develop, operate, and finance itself. It can also help show prospective financiers and grant-money sources that you’re organized and serious about your operation.

You can find a lot of guidance online about how to organize your business plan. Likewise, your local chamber of commerce and government economic development agencies (and similar organizations) often have resources you can tap.

A typical business plan includes the following:

  • Executive Summary
  • Company Description
  • Market Overview
  • Sales & Marketing Strategy
  • Operating Plan
  • Organizations & Management Team
  • Financials

Calculate Starting Costs

Once you have a basic idea of how your business will operate, it’s time to calculate your starting costs. Does your subject require materials, teaching aids, or similar items? Are you renting a workspace? Are you paying employees or subcontractors? Shelling out for a web host? Purchasing hardware or software? Buying insurance?

Some of these costs may be trivial enough to finance out of pocket, while others may require additional effort. As a new business owner, finding funding can be especially challenging. Many traditional sources of funding, bank loans in particular, usually aren’t available to businesses that are newer than two years old.

Funding Options For Tutoring Businesses

So what do you do if you need money? Here are some options:

Personal Savings

Obvious? Maybe, but tapping your personal savings has distinct advantages over going into debt. You may be accessing your rainy funds, but you won’t be losing additional money on interest payments.

Of course, you are taking a risk using your own money to finance your business. If your business fails, you’ve effectively lost that money. For that reason, and as a general best practice, it’s a good idea to separate your business finances from your personal ones.

Tap Your Support Network

Another option, especially if you don’t have much in personal savings, is to ask friends and family for a loan. Unlike a private lender, your support system probably isn’t trying to make a profit off of you.

Keep in mind that this comes with its own risks. You may stress your relationships, especially if you aren’t able to pay back these so-called friendly loans quickly. One way to avoid this is to formalize any agreements you make with friends and family so that everyone fully understands what they’re getting into and what the expectations are. You may even want to draw up a formal contract that outlines any expected payments and return on investment.

Credit Cards

One of the easier–and riskier–ways to fund your startup expenses is with personal or business credit cards (you don’t actually have to own a business to get a business credit card). Credit cards offer a lot of flexibility and convenience when it comes to making purchases. Even better, many credit cards offer reward programs that can actually save judicious users money.

However, keep in mind that credit cards carry very high interest rates on any balances you carry from month to month. Most business credit cards — and all personal credit cards — offer a grace period of at least 21 days. Purchases that you pay off within that window do not accrue interest. This makes credit cards ideal for purchases you can pay off quickly, and problematic for ones that you can’t.

Note: Avoid taking out cash advances on your cards unless absolutely necessary. They come at a very high cost.

Recommended Option: Chase Ink Business Cash

Chase Ink Business Cash



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Annual Fee:


$0

 

Purchase APR:


15.49% – 21.49%, Variable

Business credit cards often have aggressive rewards programs, but rarely will you find one that offers 5 percent cash back on qualified purchases. And since that includes office supplies, the card’s not a bad fit for tutoring.

There’s a $25,000 cap on the higher rates of return, but with no annual fee, it’s quite a bargain.

Recommended Option: Capital One Spark Classic

Capital One Spark Classic For Business


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Annual Fee:


$0

 

Purchase APR:


24.74%, Variable

If you don’t qualify for the Chase Ink Business Cash, Capital One’s Spark Classic is an easy-to-qualify-for, no-frills cash back card that can help you save money on purchases while building up your credit.

You’re only getting 1 percent back on purchases, but it’s not a bad place to start if you’re coming off a year or two of hard luck.

Personal Loans

Traditional business loans may not be an option for new businesses, but you can often use personal loans to cover some of your startup expenses. Since you don’t have to worry about business-oriented qualifying factors like the amount of time you’ve been in business, these loans can be easier to get when you’re first starting out.

The downside is you won’t have the liability protection you’d theoretically have if you applied as a business. You may also be more limited in terms of the amount of money you can take out.

Still, if you need a little money to get started and don’t have funds on hand, it’s not a bad option.

Recommended Option: Lending Club Personal Loans

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Lending Club is a good option for individuals who may not have the strongest credit, but have a good debt-to-income ratio. The borrowing range is fairly narrow at $1k to $40k, but when you’re just starting out you don’t want to go too deeply into debt anyway. You’ll have three-to-five years to pay it off, which makes it fairly manageable when you’re first starting out.

Recommended Option: Lendio

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If you’re just entering the alternative loan market for the first time, it can be pretty overwhelming. Lendio takes some of that burden off of you by allowing you to effectively apply to their whole network of lenders with one application.

Recommended Option: Upstart

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Another solid option for non-traditional borrowers is Upstart. So long as you have fair credit (620+), a stable source of income, and live in a state other than West Virginia or Iowa, there’s a pretty good chance Upstart will work with you.

Flexibility is the name of Upstart’s game. How so? They’ll use non-traditional means to get a picture of your credit worthiness and they’ll allow you to select between different payment schedules. And with three to five years to settle your loan, you won’t have to worry about paying it off right away.

Need more options? Check out our feature on startup loans.

Grants

Nothing’s better than “free” money, and grants might be the closest thing to that in the real world. Grants usually require a fairly involved application/writing process and, as you might expect, are often highly competitive. So while you may not have to worry about interest with grants, you do want to factor in the amount of time you have to spend trying to get a grant, especially considering there’s a high chance that you won’t be selected for the grant.

On the other hand, being awarded a grant comes with some prestige that you can then use in your marketing efforts. And it is “free” money, after all.

If you need some help figuring out where to look for grants, check out our feature on the topic.

ROBS

Not your neighbor-with-the-nice-car Rob, but Rollovers as Business Startups. If you haven’t heard of ROBS, don’t feel bad. They’re extremely niche products for entrepreneurs with retirement accounts like 401(k)s.

For a fee, a ROBS provider allows you to use money from your retirement account to pay for startup costs without incurring the tax penalty you normally would by tapping those funds early.

As is the case with personal savings, you are risking your own money.

ROBS will be overkill for most new tutoring businesses, but if your startup costs look like they’re going to pile up, keep them in mind.

Recommended Option: Guidant Financial

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If you’re in the market for a ROBS, it’s worth checking out Guidant Financial. If your retirement account has at least $40k in it, you can roll over up to 100 percent of your funds.

Register Your Business

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This part is technically optional, but if you’re planning to build your tutoring business into more than an occasional source of freelance income, you should probably register your business.

If you do nothing at all, your business will default to a sole proprietorship (or a partnership, if you’re starting it with someone else). This essentially means that you’ve started a business with your own name. Sole proprietorships have the advantage of being cheap and easy to start. Your taxes will also be easier to file (and lower) than they would generally be with other forms of incorporation. Keep in mind, however, that for liability purposes, sole proprietorships and the individuals behind them are essentially one and the same. While it won’t separate your personal and business finances, you should consider filing a DBA (Doing Business As) with your local county clerk. This will allow you to legally operate your business under its own name (Uber Math Works as opposed to Barry Holgram, for example).

Other forms of incorporation will require a bit more work and come with their own advantages and disadvantages. This is where the business plan we talked about earlier will come in handy, because you’ll need one if you’re going to incorporate. Keep in mind that incorporation comes with costs and additional responsibilities, so make sure you’re at the point where it makes sense for your business.

Here are the most popular ways to incorporate:

  • Limited Liability Corporations (LLCs): If you’ve seen LLC after a corporation’s name, you’re dealing with this type of company. LLCs offer limited liability protection for their owners without the full complexity of a corporation. Each state has its own rules for how to start and maintain an LLC, and you don’t necessarily have to register your LLC in the state where you’re doing business (although you’ll generally want to). LLC owners report their business earnings and losses on their personal taxes.
  • C-Corp: This is the “basic,” default form of incorporation. Shareholders are considered the owner(s) of the company and receive limited liability protection; however, the business decisions are made by corporate officers who may or may not be shareholders. The corporation is taxed separately and shareholders pay income tax on dividends. To form a C-corp, you’ll file articles of incorporation with your state.
  • S-Corp: S-corps are similar to C-corps in most ways, but come with a few additional restrictions: you have to have fewer than 100 shareholders and they have to all be U.S. citizens or residents. Unlike C-corps, profits and losses are reported on personal taxes, not unlike an LLC. In addition to filing articles of incorporation, you’ll also need to file IRS Form 2553.

Separate Personal And Business Finances

Even if you’re going to run your tutoring business as a sole proprietorship, you should take steps to separate your business finances from your personal ones. A separate business checking and/or savings account can save you a ton of headache when it’s time to pay your taxes. And even for your own edification, it will make your profits and losses much easier to track.

Choose An Hourly Rate

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Figuring out how much to charge for your tutoring services can be one of the more challenging parts of getting your business up and running.

A good place to start is to do some research on the prevailing rate for similar services in your area and then figure out a strategy for your business. Are you going to try to undersell the competition? Charge more but offer something your competitors don’t? You can glean this information often from your competitors’ websites or by checking out third-party sites that do regional salary comparisons for different industries. You may also want to speak to local colleges and schools about how they handle independent tutors.

It sounds obvious, but you don’t want to charge so little that you’re breaking even, or even losing money, on your gig. Take into account the transportation costs of meeting your clients, any money you’re spending on coffee, etc. And be sure to deduct those expenses when it comes time to pay your self-employment taxes!

Bolster Your Web Presence

Word of mouth can still go a long way in the tutoring business, but these days there’s really no way to avoid the necessity of building a strong digital presence.

It never hurts to have a sleek, attractive website. Indeed, it can make your operation look professional as well as help build hype for your services. Luckily there are user-friendly and cost-effective ways to build a website.

That said, a website is not the only way to use the internet to build up your tutoring business.

Remember that the web is, itself, a medium for instruction and tutoring. You may want to consider offering some freebies on YouTube, for example, to build up your reputation. In addition, free services can function as advertisements for your paid services. Just make sure you don’t make your paid services extraneous.

Social media strategy is too complex to go into in great depth here, but making posts that are fun to read and interact with is a good place to start.

Advertise Your Business

In addition to what we covered above in web presence, you’ll also want to get your name out there in other ways. If you’re just starting out, you’re probably not looking at expensive media buys on TV, radio, or even your local newspaper.

Let your network know what you’re up to so they can spread the word about your new tutoring. Make a Facebook page. Get yourself a Twitter account. Offer free consultations with curious parties. Even cheap, low-tech solution like flyers with tear-off tags can be powerful if you post them in the right places.

Final Thoughts

Does helping someone grow and learn while earning money sound like a dream job? Tutoring can be one of the more rewarding and flexible businesses you can get into. But while the demand for expertise is often high, you’ll still want to approach the industry with a strategic mindset. Take your time, narrow down your niche, and build your reputation and tutoring can turn into so much more than just a side gig.

The post The Step-By-Step Guide To Starting And Funding A Tutoring Business appeared first on Merchant Maverick.

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Deferred Interest: What You Need To Know

 

When hunting for a credit card, a loan, or another financing arrangement, you may come across offers advertising “no interest for 12 months” or “same as cash” financing. Take care, because often times, this arrangement will entail deferred interest. Deferred interest financing carries risks that are typically not well understood and often not explained clearly by the lender.

In this article, we’re going to tackle the murky subject of deferred interest.

What Is Deferred Interest?

Deferred interest is defined by Investopedia in the following way:

Deferred interest is the amount of interest added to the principal balance of a loan when the contractual terms of the loan allow for a scheduled payment to be made that is less than the interest due.

That’s the textbook definition of the deferred interest — interest that has accrued on a loan but hasn’t been paid. But how does deferred interest actually work in the real world? Let’s explore.

How Deferred Interest Works

Let’s say you purchased some exercise equipment with a store credit card offering deferred interest for 12 months in order to avoid having to pay the full cost up front. As the months go by without your balance being paid in full, interest will accrue on your card, but you won’t be responsible for paying it off — yet.

Now, if you pay off your balance within 12 months, this accumulated interest will not come due, and you will have paid for your purchase with what is essentially an interest-free loan. However, if you don’t pay off your purchase in its entirety within that 12 months, all the interest accumulated over that 12-month period (not just the interest on the portion of the balance you have yet to pay) is then added to the amount you owe.

One insidious aspect of this arrangement is that the kind of store credit cards that typically offer deferred interest financing normally have high APRs, thus increasing the interest charges you’ll be hit with if you don’t pay the balance in full within 12 months.

Deferred Interest VS 0% APR Introductory Rate

A credit card offering deferred interest financing under the sophistry of “no interest for 12 months” is not the same thing as a credit card offering an introductory 0% APR. I explained how deferred interest works in this particular context with the above example, but let’s say that instead, you purchased the exercise equipment with a newly-obtained credit card that sports a 12-month intro 0% APR period.

You’ll be able to pay off your balance over the course of your first 12 months without being responsible for any interest payments, just as with the deferred interest card. The difference comes after your first 12 months are up. After this point, you’ll become responsible for any interest that accumulates on the remaining balance of your card, but not for the interest you didn’t pay during your initial 12 months with the card.

If that sounds like a better, fairer, and safer arrangement, that’s because it is.

Pros & Cons of Deferred Interest

If everything goes right and you’re able to pay back the principal of a deferred interest loan in full before the period of deferred interest ends, congratulations! Your deferred interest loan has worked out for you and has not caused you any harm.

However, lenders bank (literally) on the increasingly high likelihood that everything will not go right for you during this period. Americans, particularly working-class families, face constant unexpected financial “challenges” from which they enjoy little to no protection. So if you lose your job or your child gets sick and you can’t pay your balance in full before the end of your deferred interest period, your lender will reap the financial benefits of your misfortune and you will be left high and dry.

Best Practices When Using Deferred Interest

Before signing up for a deferred interest loan or credit card, seek out all possible alternative financing arrangements first. If you’ve exhausted these alternatives and find yourself in the unenviable position of having to rely on a deferred interest loan to pay for an expense, make absolutely sure you can pay off the purchase before the deferred interest period ends to avoid being hit with retroactively-applied interest charges.

Additionally, if you use a deferred interest credit card to finance a purchase, avoid charging anything else to this card if you possibly can. That’s because if you ring up additional charges on your card after your initial purchase, the standard purchase APR may apply to those additional charges, and under the terms of the CARD Act (legislation meant to protect consumers in other contexts), any payments you make on your debt will apply first to these additional charges, not to your initial purchase (the purchase on which the unpaid deferred interest is accumulating). That’s because the CARD Act mandates that when you make a payment on your card greater than the minimum due, the amount beyond the minimum due must be applied to the balance with the highest interest rate first.

So while you might assume that your payments will first apply to your initial balance, this is not the case. To go back to my example, you might think that you’ve paid off that exercise equipment you purchased once you’ve made payments on your card equal to the amount of said purchase. But if you’ve made any subsequent purchases on that card, a portion of what you’ve paid will go towards those balances first, leaving a portion of your initial balance unpaid.

And remember, even if you have just one dollar of that initial purchase left outstanding at the end of your deferred interest period, you’ll become responsible for paying all the interest that has accumulated over 12 months on that entire purchase, not just on that one dollar left unpaid.

In short, if you make a purchase on a deferred interest card, don’t use that card to make any further purchases. It can only get you in trouble.

Final Thoughts

The parasitic purveyors of deferred interest loans know that the consumers their products are aimed at are overworked, harried, and dealing with an unholy myriad of escalating financial demands — housing, education, health care, etc. These consumers often don’t have the financial literacy required to make sense of deferred interest offers and can easily find themselves hit with large interest charges on purchases they believed to be interest-free, leaving the most vulnerable people in our society open to being fleeced by unscrupulous lenders.

As a result, the cosseted 1% benefits at the expense of the beleaguered 99%. It’s as if a familiar pattern were at play here.

The most direct advice I can give on the subject of deferred interest financial products: Get a traditional credit card with a 0% introductory APR offer instead. Many popular credit cards (both business and personal) are offered with a 0% intro APR period of 9-12 months, though there are other cards offering 15 or even 21-month 0% APR periods. With these cards, you’ll never have to pay retroactive interest, only interest that accumulates on your card’s balance after your 0% APR period ends.

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

If such a credit card appeals to you, let Merchant Maverick help you out in your search!

  • Best Business Credit Cards For 2019
  • APR VS Interest Rate: Know The Difference
  • Top Business Credit Card Balance Transfer Offers
  • Credit Card Balance Transfers Demystified

The post Deferred Interest: What You Need To Know appeared first on Merchant Maverick.

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The Best Business Loan And Financing Resources For North Carolina Small Businesses

North Carolina is one of the fastest-growing states in the nation and has posted significant economic growth over the last 30 years in cities such as Greensboro, Raleigh, and Charlotte. The city of Charlotte is one of the largest banking centers in the United States and the information and biotechnology industries are thriving thanks in part to the Research Triangle Park, Gateway University Research Park, and the Piedmont Triad Research Park. In 2018, North Carolina was ranked in the top ten on CNBC’s Top States for Business list.

With all this growth and opportunity, it’s no surprise that more people are considering entrepreneurship. Maybe you’ve thought about starting your own small business, or maybe you’ve already opened your doors. Either way, you’re here because you want to learn more about financing opportunities and resources for new and established businesses in North Carolina.

In this post, we’re going to look at the best opportunities for small business owners in North Carolina. From easy online loans to small business grants for new and innovative businesses, we’ll explore the many options available to North Carolinians. Let’s get started.

Online Business Lenders For North Carolina Businesses

online loan companies

If you need an easy and convenient small business loan, look no further than your computer. You can secure a business loan without even leaving your home or office by working with an online lender. Not being stuck in a bank for hours isn’t the only benefit to online lending, either. If you don’t qualify for a traditional loan for any reason (low credit score, new business, or low revenues, for example), you can find a lender that’s willing to work with your specific situation.

Finding an online lender isn’t difficult. Just typing search terms like “small business loan” in a search engine brings up thousands of hits. Unfortunately, though, not all lenders are cut from the same cloth. In your search for an online business loan, you’ll encounter lenders that aren’t reputable, charge ridiculously high fees, or have poor reviews from their borrowers. It’s easy to get caught up for hours just finding a lender, so save time and start with one of these options.

Fundera

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You want to shop around when it comes to financing options, but you don’t want to submit application after application. You also want to avoid having multiple hard inquiries on your credit — a move that could bring your score down or even disqualify you from receiving a loan. By working with Fundera, you can avoid these hassles.

Fundera allows you to fill out one easy application to see what financial products you qualify to receive. Fundera uses a combination of technology and experienced lending specialists to find the best financing options for your business. You’ll work with your lending specialist to evaluate all offers to determine which is best for you. Then, you select your funding and receive the money in your bank account. Your lending specialist will even continue to work with you to determine how you can receive even better options in the future.

Working with Fundera is free, and there’s no impact to your credit score just to shop around your options. However, it should be noted that once you accept an offer, a hard pull will likely be performed on your credit.

Fundera offers several financial products for small businesses, including:

  • Small Business Administration (SBA) Loans: Up to $5 million with terms up to 25 years
  • Lines Of Credit: Starting at $10,000 with terms up to 5 years
  • Term Loans: Up to $500,000 with terms up to 5 years
  • Startup Loans: Up to $150,000 with terms up to 4 years
  • Equipment Financing: Up to 100% of equipment value
  • Invoice Financing: Up to 100% of invoice value
  • Short-Term Loans: Up to $250,000 with terms up to 18 months
  • Personal Loans For Business: Up to $35,000 with terms up to 5 years
  • Merchant Cash Advances: Up to $250,000

Rates, terms, and borrower requirements vary based on the financial product selected.

Lendio

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If you want to compare lender offers, Lendio is another option to consider. This loan aggregator has over 75 financing partners you can reach through just one application. There’s no fee to apply, and submitting your application won’t affect your credit.

The application process takes just minutes, and you could receive funding in as little as 24 hours depending on the product you select. Lendio has a variety of financial options available to small businesses including:

  • SBA Loans: Up to $5 million with terms up to 25 years
  • Term Loans: Up to $2 million with terms up to 5 years
  • Lines Of Credit: Up to $500,000 with terms up to 2 years
  • Equipment Financing: Up to $5 million with terms up to 5 years
  • Commercial Mortgages: Up to $5 million with terms up to 25 years
  • Business Acquisition Loans: Up to $5 million with terms up to 25 years
  • Startup Loans: Up to $750,000 with terms up to 25 years
  • Short-Term Loans: Up to $500,000 with terms up to 3 years
  • Business Credit Cards: Up to $500,000
  • Accounts Receivable Financing: Up to 80% of receivables with terms up to 1 year
  • Merchant Cash Advances: Up to $200,000 with terms up to 2 years

Rates, terms, and borrower requirements vary by financial product.

BlueVine

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If you don’t want to work with a loan aggregator and want to dive in immediately with a direct lender, BlueVine is a reputable lender to consider. BlueVine offers two financial products for small businesses: lines of credit and invoice factoring.

If you want a flexible financing option, a line of credit could be the right choice for you. Instead of receiving one lump sum payment, you’ll have access to a revolving line of credit to use whenever you need it.

You may qualify for as much as $250,000 with BlueVine. You don’t pay if you don’t use your line of credit. When you do make a draw, rates start at just 4.8%. Payments are made monthly or weekly over 6 or 12 months. As you make payments on your line of credit, funds become available for you to use again for unexpected expenses, emergencies, purchasing inventory, or filling revenue gaps.

To qualify for a BlueVine line of credit, you must meet these minimum requirements:

  • Personal credit score of 600 or above
  • At least 6 months in business
  • At least $100,000 in annual revenue

With BlueVine’s online application, you can be approved for a line of credit in as little as 20 minutes.

If unpaid invoices are plaguing your business, BlueVine offers a solution with its invoice factoring service. You can qualify for a line of credit up to $5 million using your unpaid invoices. You can receive up to 90% of the money upfront for your invoices. Fees start at 0.25% per week, and you can be approved for financing in as quickly as 24 hours.

To qualify for invoice factoring, you must have:

  • A personal credit score of 530 or above
  • A time in business of at least 3 months
  • At least $100,000 in annual revenue
  • A B2B business

Amex Business Loans

American Express OptBlue

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If you have an American Express Business Card, you may qualify for a small business loan. Not only will you receive a loan with competitive interest rates, but applying has no impact on your credit since the lender uses your information that’s already on file.

With an American Express loan, you can receive $3,500 to $50,000 to use for your business expenses. Interest rates are 6.98% to 19.97% with repayment terms of 1 to 3 years. You can be approved in just seconds and receive funds in your bank account in as little as 3 business days.

The only drawback to this product is that you must be a preapproved American Express Business Card member to receive the offer. You can find out if you’re preapproved by logging into your American Express account. To receive an offer, you must be a Basic Card Member in good standing, a U.S. citizen or permanent resident, and at least 18 years old. Please note that meeting these minimum requirements does not guarantee an offer.

IOU Financial

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IOU Financial offers flexible business financing that can be delivered to your bank account in as little as 24 hours. Through IOU Financial, you can receive up to $500,000 for growing your business. Even if you’ve faced challenges receiving funding in the past, you may qualify for an IOU Financial product, as the lender preapproves 85% of all applications.

IOU Financial offers financing with terms up to 18 months. Fixed daily or weekly payments are automatically taken from your business bank account. There is no early payment penalty if you pay off your loan early. If you need more capital, you may qualify for renewal once you’ve paid 40% of your loan. The lender doesn’t use a traditional interest rate but instead uses a factor rate between 1.15 and 1.31. Learn more about factor rates and how they affect the cost of your loan.

To qualify for a loan through IOU Financial, you must meet the following minimum requirements:

  • Own at least 80% of your business OR at least 50% if owned with a spouse
  • Time in business of at least 1 year
  • At least 10 daily deposits
  • Annual revenue of at least $100,000
  • Average ending balance of at least $3,000 per day in a business bank account

P2Binvestor

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If you need access to a large amount of capital, look to a lender like P2Binvestor. You can qualify for asset-backed lines of credit from $500,000 to over $10 million. These funds are unrestricted and can be used for any business purpose, from purchasing commercial property to covering payroll. P2Bi’s lines of credit have 1-year revolving terms with interest rates in the high teens.

According to the lender, the ideal candidate for a line of credit should:

  • Have time in business of at least 1 year
  • Have at least 10 employees
  • Have an experienced management team
  • Be a B2B business
  • Have at least $10 million in revenue
  • Have at least 10% annual revenue growth
  • Have accounts receivables that pay within 90 days

Businesses in the construction, real estate, medical insurance billing, and cannabis industries do not qualify for funding through P2Bi.

Kabbage

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If you want a flexible line of credit without having to jump through hoops to get it, apply with Kabbage. This lender offers a quick, easy application process that can give you access to capital in just minutes.

Kabbage specializes in small business lines of credit up to $250,000. Repayment terms are 6 months or 12 months and are based on how much you borrow. Fees are between 1.5% and 10% of your loan balance. If you pay off your loan early, no prepayment penalties are charged and you can save on your monthly fees. Payments are made monthly and are automatically withdrawn from your business bank account. No fees are charged until you use your line of credit.

One thing unique to Kabbage is the Kabbage Card. You have the option to make a traditional draw on your line of credit. Your funds will hit your account typically within 1 to 3 business days. Or you can use the Kabbage Card anywhere Visa is accepted to immediately access your funds. If you go this route, a new loan with the same rates and terms will be created on your Kabbage Dashboard.

To qualify, you must meet the following minimum requirements:

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

There are no credit score requirements, as Kabbage bases its approval decisions on the performance of your business. However, a credit check for the business owner is performed.

LendingPoint

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If time in business requirements are holding you back, consider getting a personal loan for business. By going this route, you can qualify for funds using your own personal income and credit score.

LendingPoint is one option to consider for personal loans. This lender provides up to $25,000 for qualified borrowers. APRs start at 15.49% and go up to 35.99%. Repayment terms are 2 to 4 years with payments due twice per month.

To qualify for a LendingPoint personal loan, you must meet these requirements:

  • Be at least 18 years old
  • Have a valid ID and Social Security Number
  • Have a verifiable bank account
  • Have an annual income of at least $20,000

Banks, Credit Unions, & Nonprofit Lenders In North Carolina

If going a more traditional route makes more sense for you and your business, there are plenty of banks, credit unions, and nonprofit lenders that serve business owners in North Carolina. If you have a business or personal checking account, you can check out the services available through your own bank. Or if you are shopping around for a specific product or lower rate, consider these picks.

BB&T

BB&T is one of the largest banks in North Carolina with branches in nearly 200 cities including Asheville, Charlotte, Chapel Hill, and Greensboro. In addition to business checking and savings accounts, BB&T offers multiple borrowing options including:

  • Small Business & Startup Loans
  • Lines Of Credit
  • SBA Loans
  • Business Credit Card

You can also take advantage of other business services provided through BB&T including merchant services, payroll services, and employee benefits such as retirement solutions. You can learn more about opening an account and the services provided by calling BB&T’s toll-free number or visiting a local branch.

Truliant Federal Credit Union

Truliant Federal Credit Union was first chartered in Winston-Salem, Burlington, and Greensboro in 1952. Since then, the credit union has grown to serve over 200,000 members in cities throughout North Carolina, South Carolina, and Virginia. Truliant branches are located all throughout North Carolina in cities including Charlotte, Asheboro, Greensboro, and Winston-Salem.

In addition to business checking and savings, you can apply for:

  • Commercial Real Estate Loans
  • Commercial Auto Loans
  • Lines Of Credit
  • Construction Loans
  • SBA Loans
  • USDA Business & Industry Programs
  • Equipment Financing

You can begin the process online by downloading and completing a business loan application. Once complete, bring the application, your business debt schedule, and a personal financial statement to your local financial center.

Business accounts and financial products are available to Truliant members. To become a member, you must meet one of the following requirements:

  • Live, work, attend school, or worship in an area served by Truliant
  • Work at one of Truliant’s partner companies
  • Have an immediate family that is a Truliant member
  • Be a member of the American Consumer Council that lives in North Carolina, South Carolina, Virginia, Georgia, or Tennessee

Self-Help Credit Union

Self-Help is an organization made up of two credit unions, an advocacy group, and a nonprofit loan fund. Self-Help is a designated community development financial institution that provides opportunities to underserved communities.

Self-Help Credit Union provides financial services including checking and savings accounts to North Carolina residents. Self-Help also offers funding opportunities for small businesses, nonprofits, child care centers, and faith-based organizations.

Loan options available through Self-Help include:

  • Small Business Loans: Up to $250,000
  • Commercial Loans: $250,000 and up
  • SBA 504 Loans
  • New Markets Tax Credit Loans
  • Commercial Real Estate Loans
  • Environmental Loans
  • USDA Rural Development Loans
  • Specialty Loan Funds: NC Rural Center Small Business Loan Program and Golden LEAF Loan Program
  • Small Business Recovery Loans
  • Food System Finance Loans
  • Child Care Loans
  • Charter School Loans
  • Multifamily Housing Loans
  • Neighborhood Stabilization Program Loans

To apply for any of these loan programs, you must be a Self-Help member. To qualify, you must meet one of the following requirements:

  • Live, work, attend school, or worship in an eligible county
  • Meet family or employer affiliation criteria
  • Member of the Center for Community Self-Help

Carolina Small Business Development Fund

The Carolina Small Business Development Fund is a nonprofit Community Development Financial Institution that has served communities in North Carolina since 1990. This organization provides business loans and training to community-based organizations, startups, and existing businesses.

Through Carolina Small Business, you can apply for loans and lines of credit up to $250,000. Rates are typically 8% to 12%.

To apply for a loan, you must complete the online application. Along with the application, you must upload documentation including:

  • Personal & Federal Tax Returns
  • Business Plan
  • Resumes Of Managers
  • Financial Statements

Additional information may be requested by a loan officer throughout the application process. Businesses requesting less than $50,000 will receive a loan decision within 10 business days. If the loan exceeds $50,000, a decision will be given within 15 business days.

Small Business Grants In North Carolina

You’ve probably seen the advertisements while watching late night TV: “Access the secret to millions of dollars in business grants for the low, low price of $99.95!” Unfortunately, obtaining a business grant isn’t exactly easy — or even possible — for most small businesses.

This doesn’t mean that grants (financing you don’t have to repay) don’t exist. They do. But most are open only to specific industries and applicants, like veterans, women, or minorities. Even if you do qualify for a grant, competition is often fierce.

If you want to explore all financing options, here are a few grants that may be a good fit for your business.

NC IDEA

NC Idea is a private foundation that provides grants and other resources to entrepreneurs in North Carolina. Opportunities include:

  • NC IDEA MICRO: Up to $10,000 for the advancement of new business ideas
  • NC IDEA SEED: Up to $50,000 for innovative startups with a proven concept

Additional resources include leadership training through NC IDEA LEAD and mentorships for female entrepreneurs through NC IDEA SOAR.

Deadlines and requirements vary. Applicants can learn more by visiting the NC IDEA website.

City Of Raleigh Office Of Economic Development Grants

If your business is located in Raleigh, North Carolina, there are several grants available to small businesses. These grants include:

  • Business Investment Grant
  • Building Up-Fit Grant
  • JobsRaleigh Grant
  • Façade Grant Program
  • Downtown Raleigh Retail Up-Fit Grant
  • Impact Partner Grant

These grants are designed to help encourage growth, development, and job creation in the City of Raleigh. Requirements and deadlines vary by program.

National Association For The Self-Employed

Through the National Association for the Self-Employed, you could receive $4,000 through the NASE Growth Grant. Grant funds can be used to expand your business through advertising, marketing, hiring employees, or expanding your facilities.

To qualify for the grant, you must be an NASE member. Annual memberships are $120 for most entrepreneurs. Students can become members for just $25 per year, while veterans pay only $99 annually. A monthly membership plan is also available.

Grants are awarded each month, and you can apply through the NASE website.

Loans & Resources For Startups In North Carolina

Getting the capital you need to grow your business is difficult, but getting the financing you need to launch your business can be even tougher. Many of the loan options already discussed may be unavailable to you if you don’t have revenue or haven’t been in business for a specific period of time.

This doesn’t mean you’re down and out. There are plenty of business financing options and resources for startups if you know where to look. Unsure of where to start? We’ve rounded up some great options that can help you get your business off the ground.

SCORE

SCORE is one of the nation’s leading resources for startups and small businesses. Through its 300 chapters, it has helped more than 11 million entrepreneurs since it was launched in 1964. SCORE offices are located all throughout the nation, including the state of North Carolina and cities including Raleigh, Charlotte, and Greensboro.

You can contact SCORE to be connected with a business mentor. There is no cost for this service. You can also lean on SCORE’s other business resources, including live and recorded webinars, online courses, and workshops.

Thread Capital

Thread Capital is a program launched by the NC Rural Center. This organization offers custom financing solutions for small businesses. Thread Capital also emphasizes helping underserved business owners, including women, minorities, low-income borrowers, and businesses located in rural areas.

Thread Capital offers small business loans from $500 to $50,000. Startup businesses with less than one year of documented revenue are eligible to receive up to $20,000. Established businesses with more than 12 months of documented revenue may be eligible to receive up to $50,000.

Loan terms are up to 72 months and interest rates start at 12.99% based on a number of risk factors. There are no prepayment penalties if your loan is paid off early.

To qualify for a startup loan through Thread Capital, you must:

  • Have at least 1 employee, which may include the owner
  • Have a business located in North Carolina
  • Put up all available assets as collateral
  • Have all individuals with more than 20% ownership co-sign the loan

As you become more established, Thread Capital offers additional loan options through its lending partners. Loans up to $5 million are available through these lenders.

Small Business and Technology Development Center

Since 1984, the Small Business and Technology Development Center has provided North Carolina small business owners with resources to help them grow and create jobs.

Whether you’re a brand new business or you’re an established business that has stalled on the path to growth, SBTDC offers business counseling and educational services to benefit you. These include:

  • Business & Management Advice
  • Financial Analysis
  • Marketing Assistance
  • Research
  • Financial Assistance
  • Strategy Development & Implementation
  • Leadership & Employee Performance

Most services are free and are always confidential. There are multiple SBTDC locations located throughout the state of North Carolina, serving areas including Boone, Chapel Hill, Charlotte, Greensboro, Raleigh, and Wilmington. You can visit the SBTDC website to learn more about the services offered and to submit an online request for counseling.

Small Business Center Network

The Small Business Center Network has 58 centers located throughout the state of North Carolina to support the growth and development of new and existing businesses.

Through the SBCN, business owners can receive confidential business counseling, access to resource libraries, seminars, and workshops. All services are available at no cost or for a minimal fee.

Business counseling is available on a variety of topics, including:

  • Business Plan Development
  • Marketing Assistance
  • Management & Human Resources
  • Sources Of Capital & Loan Preparation

Business Link North Carolina

If you’re ready to start a small business in North Carolina, check out the resources offered through Business Link North Carolina. Through this partnership with the NC Department of Commerce, you can receive free one-on-one phone consultations with a business counselor.

Business counselors can answer your questions on multiple business topics such as:

  • Regulatory Requirements
  • Licensing
  • Training

The toll-free hotline is available Monday through Friday. You can also submit an online request to have a counselor get in touch with you.

What To Consider When Choosing A Lender

Now that you’re aware of the financing options available to you, you’re one step closer to choosing a lender. There’s one problem, though: which lender is right for you?

Whether you’re spinning your wheels trying to narrow down your choices or you’re making the final decision between two lenders, ask yourself:

Do I Qualify?

This is an easy question that may immediately eliminate multiple lenders. Do you meet all the requirements of the lender? Is your credit score where it needs to be? Do you have enough revenue? Is your credit report free of anything that would disqualify you from receiving a loan?

If you don’t meet all minimum requirements, move on to another lender. If you find it difficult to qualify with most lenders, evaluate where you’re falling short. Get your free credit score, evaluate your credit report, and look at the financials of your business. If your funding need isn’t urgent, consider taking steps to resolve any issues that prevent you from qualifying for affordable loan options before submitting applications to lenders.

Does The Loan Amount Fit My Needs?

Before you seek funding, you should know how much capital you need. Maybe you need just a few thousand dollars to purchase new equipment. Maybe your financial needs are greater, and you need hundreds of thousands to renovate your commercial space. No matter how much capital you need, it’s important to find a lender that offers loans and financial products that have borrowing limits large enough to fund your project.

Can I Afford This Financing?

Before you submit applications and accept a loan offer, you need to make sure your business can afford to take on new debt. After determining whether your business can afford a loan, shop around to make sure you’re getting the best rates and terms for your business. High fees and interest rates, daily or weekly payments, or very short-term options could equal very expensive financing that could hurt — not help — your business.

Final Thoughts

Whether you apply for an online loan, a traditional bank loan, or a small business grant, there are plenty of financing options available to small businesses in North Carolina. Do your research, compare your options, and determine what opportunities are best to start or grow your business successfully.

The post The Best Business Loan And Financing Resources For North Carolina Small Businesses appeared first on Merchant Maverick.

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How To Start And Finance An Auto Body Shop Business

You’re an experienced mechanic that’s been working for someone else for your entire career. You’re ready to spread your wings and fly (or drive) right to your own auto body shop. Sound like you? If you’ve been bitten by the entrepreneurial bug, then maybe it’s time to set out on your own.

Even if you’re the best at what you do, venturing out into the small business world can be scary. If you’re an employee at a collision center, you probably feel like you have some stability. Why risk a “sure thing” to start your own shop, especially if you don’t have any previous experience running your own business?

Starting your own business is risky and it takes hard work (and a lot of it). But opening your own auto collision shop can be an extremely lucrative venture. The automotive collision repair market brings in billions of dollars in revenue each year, and studies show that revenue will only continue to grow in the years ahead. Isn’t it time you got your share?

If you’re thinking about starting your own auto body shop, this guide is for you. We’ll go through all of the steps of starting your own business, from creating a business plan to finding the right lender. We’ll review potential costs, hiring employees, and other critical steps to building a successful business. If you’re ready to take the next step into entrepreneurship, read on to find out how to get started.

Create A Business Plan

You’ve made up your mind: you’re ready to open your own collision or auto body center and you have an idea of how to do it. That’s good enough, right? Actually, you need to be more prepared before you even begin to move on to other steps in building your business. The best way to be prepared? Create a detailed business plan.

Let’s illustrate the importance of a business plan with an example. You’re going on a hike in the woods. There are lots of paths to choose from. Some of these paths may bring you out of the woods — your end goal — but there may be additional challenges along the way, like steep terrain. Some paths may be wrong altogether … and you’ll have to backtrack to right your course. In short, you can enter the woods without a map and risk getting lost. Or you can get a map ahead of time, plot out your course, and set out only after you’ve planned your route and know what to expect.

A business plan works in the same way. A good business plan outlines how to get from your starting point (launching your business) to your goal. Every entrepreneur has a different goal. Maybe yours is to run a successful local business that sets your family up for life. Maybe you have bigger goals — starting your own chain of auto body shops, for example. The most important thing is to set a concrete goal and create a map of how to get there.

Not only will a business plan keep you on the right track, but you must have a plan to present to investors or lenders when you’re seeking capital.

New to writing a business plan? At a minimum, here’s what you should include:

  • Executive Summary: A concise summary detailing each section of your business plan
  • Overview: A description of your business, including the legal structure, location, and type of business
  • Market Analysis: An overview of your market and a definition of your target market
  • Competitive Analysis: Strength and weaknesses of your competition
  • Management Team: The members of your management team and their responsibilities within your organization
  • Financial Projections: A forecast of the financial future of your business

Find A Location

As realtors say, “Location, location, location!” As you plan your own body shop, location is key, but there are a few other considerations to weigh before you put your name on that lease or mortgage.

You want to make sure that you purchase or lease the best location you can afford. Sure, that commercial property on the outskirts of town is much cheaper, but your customers have to be able to find you. Find a property that’s convenient for your customers and is located in a high-traffic area or at least off of a major road.

Another consideration is whether you’re going to buy an existing business or start from scratch. Buying an existing business comes with definite perks, including an established clientele, equipment, and even licenses and permits. However, there are a few drawbacks. This is one of the most expensive options, especially if the business is successful. You may also have to put additional costs into the business for renovations, like replacing outdated equipment.

If you start from scratch, you’ll rack up costs with the price of equipment, licenses, and building renovations.
Unsure of which to choose? Build a business plan looking at both options, calculate costs, and determine which makes the most sense financially, both in the short- and long-term.

Another option to consider is opening a franchise. With a franchise, you have less flexibility in terms of designing your brand and shop. However, you’ll have a working business model that takes a lot of the guesswork out of owning your own business.

Register Your Business

Before you open your auto body shop to the public, you need to register your business. Not only will you be seen as a legitimate business by your customers, but registering is also required when you want to hire employees, protect your assets, or seek capital from investors.

To register your business, you need to first determine what form of business entity to establish. There are several structures to choose from, including:

Sole Proprietorship

A sole proprietorship is the simplest business structure. This is best for businesses with just one owner. Sole proprietors can file their business profits and losses on their personal income tax returns. No paperwork is required to register as a sole proprietorship. However, this structure isn’t without its drawbacks. Raising money as a sole proprietorship is difficult, and you are personally responsible for the liabilities of your business.

Partnership

A partnership is a good choice for companies that will be owned and operated by two or more people. There are several different partnership types to consider:

  • General Partnership: Doesn’t require filing with the state and has few requirements
  • Limited Partnership (LP): One partner has unlimited liability and the others have limited liability. The personal assets of the limited partners can’t be used to satisfy the debts and liabilities of the business.
  • Limited Liability Partnership (LLP): Used by professional service businesses, this type of partnership offers personal asset protection for all partners.

Limited Liability Company (LLC)

An LLC has several benefits for business owners. With an LLC, a business owner will receive liability protection without paying the high tax requirements of corporations.

Corporation

This is the most complex and expensive business structure. More regulations and tax requirements are put in place for corporations. This structure is best for businesses that plan to raise capital through the sale of stock.

The type of structure you select for your business varies by the number of owners that you have and the future plans for your business. In most cases, however, single owners of auto body shops lean toward LLCs, while businesses with more than one partner select the partnership business structure. Before choosing your business structure, talk to your accountant and/or lawyer to find out which makes the most sense for your business.

Once you’ve determined your business structure, you’ll need to select a name for your business. Choose a name that reflects your brand and the services you offer. You also want to choose something that’s catchy and/or easy for customers to remember.

Your business will need to be registered with city, state, and federal governments. You’ll need to sign up for an employer ID number through the Internal Revenue Service if you plan to hire employees. To learn about the specific business license and permit requirements in your area, contact your local Chamber of Commerce, Department of Revenue, or Small Business Administration office to learn more.

Calculate Your Startup Costs

Every new business has one thing in common: the need for capital. In order to start your own collision center, you need money. The big question, though, is how much do you need?

One of the first steps to starting your own business is to calculate your startup costs. In order to do that, begin by making a list of everything you need for your business.

One of the biggest expenses for your new business will be equipment and tools. While your list may look a little different, some of the most common equipment and tools in this industry include:

  • Hydraulic Lifts
  • Hand Tools
  • Pneumatic Tools (Air Tools)
  • Air Compressors
  • Diagnostic Machines
  • Wheel Balancers
  • Paint Guns

Additional startup costs to consider include your business licenses and certifications, insurance, hiring employees, and shop rental or mortgage fees. You should expect to spend at least $50,000 to get your shop up and running. However, as you make a list of your costs and research pricing, this number could potentially rise.

Before you seek funding for your business, a good rule of thumb is to always overestimate your costs by about 30 percent. For example, if you calculate that your expenses will be $200,000, plan to seek $260,000 in funding. In other words, always plan for the unexpected.

Seek Funding

Now that you’ve calculated your startup costs, it’s time to figure out how to pay for it all. If your bank account looks a little low, don’t worry. Most entrepreneurs don’t have the funds to cover these costs out-of-pocket. Instead, they turn to a lender to get the financing they need. Consider these loans and other funding options when you need capital to start your new body shop.

And if you can’t find the option you’re looking for here? Check out more recommendations in the post, Business Loans For Auto Repair Shops.

Personal Savings

If you have money in a savings account, consider using these funds to pay your startup costs. There are several benefits to using your own money. You won’t be indebted to a lender, so there are no monthly or weekly payments to worry about. You also won’t have to pay interest or fees. On the downside, though, if your business fails, you risk losing your savings.

Friends & Family

If you have a friend or family member with extra money to invest, consider pitching your business to them. Present your business plan and tell them why they should invest in you.

There are two ways to go about this. You can stick with traditional debt financing. This means that you would take a loan from your friend, family member, or colleague and pay it back over a set period of time, along with interest and fees.

You may also consider equity financing. Instead of taking out a loan, you’d receive capital in exchange for ownership in your business. The investor would get their money back over time through a share of your profits. While the risk falls on the investor and you wouldn’t have to begin paying back money immediately, you would have to share your profits and lose some control over your business.

Unsure of which option is right for you? Learn more about debt financing vs. equity financing.

Personal Loans For Business

One of the biggest challenges a new business owner faces is meeting the requirements for a business loan. Many lenders – especially the ones with the lowest rates and best terms – want to work with established businesses with high revenues and solid business and personal credit histories. If you haven’t even opened your doors to a single customer, meeting these requirements is impossible.

However, if you have a high personal credit score, you can take out a personal loan to use for your startup costs. Time in business, annual revenue, and business credit history aren’t required to qualify for personal loans. Instead, you use your personal credit score and your own income to qualify.

If you choose this option, it’s important to make sure that your lender doesn’t have any restrictions prohibiting you from using funds to pay startup costs or other business expenses. Most personal loans don’t have restrictions and can be used to purchase equipment, hire employees, pay operating costs, or use as working capital.

Recommended Option: Lending Club Personal Loans

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Lending Club is a peer-to-peer lender that provides personal loans up to $40,000 to qualified borrowers. Repayment terms are 3 years or 5 years with APRs starting at 6.95% for the most creditworthy applicants. APRs for less creditworthy borrowers go up to 35.89%.

To qualify for a Lending Club personal loan, you must meet these minimum requirements:

  • Be at least 18 years old
  • Be a U.S. citizen, permanent resident, or live in the U.S. on a long-term visa
  • Have a verifiable bank account
  • Have a personal credit score of at least 600

In some cases, Lending Club may recommend adding a co-borrower to increase your chances for approval. If you meet all requirements, you can get funded in as little as 7 days.

As you grow a more established business, you can later take advantage of Lending Club’s business loans. Lending Club offers up to $300,000 in business funding with terms of up to 5 years and fixed monthly payments.

Lines Of Credit

A line of credit is a form of financing you should consider if you want instant access to cash without having to wait for lender approvals. Once you’ve been approved for a line of credit, you can make draws as needed to inject cash into your business.

Here’s how it works. You apply for a line of credit with a lender. The lender looks at a number of factors, such as your personal credit score or business performance, when determining whether to approve your application. These factors will also be considered when setting your credit limit.

Once you’ve been approved, you can initiate as many draws as you’d like from your line of credit up to and including the credit limit. Funds are typically transferred to your bank account immediately, and you can access the money in 1 to 3 business days with most lenders.

As you repay the borrowed funds plus fees and interest charged by the lender, the funds replenish and become available to use again.

Lines of credit are useful for unexpected expenses, emergencies, or to fill revenue gaps. Having a line of credit allows you to access money when you need it without having to go through the application and approval process over and over again.

Recommended Option: Fundbox

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Fundbox offers lines of credit up to $100,000 for qualified businesses. The lender charges a one-time fee for each draw that starts at just 4.66% of the draw amount. Terms of 12 weeks or 24 weeks are available, and automatic payments are drawn from your bank account each week. You can save by paying your loan off early, as Fundbox will waive all remaining fees.

There are two ways to qualify for a Fundbox line of credit. The first is by linking your business bank account or submitting bank statements. These will be used by the lender to evaluate the performance of your business. If you have unpaid accounts receivables, you can use these to qualify. All you have to do is link your supported accounting software.

Minimum requirements to receive a Fundbox line of credit are:

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

Once you’ve filled out Fundbox’s quick application and have linked your accounts or submitted documentation, you can be approved in just minutes. Then, you can instantly put your line of credit to work for your business.

Business Credit Cards

Another option for fast funding is a business credit card. Once you’ve been approved for a business credit card, you can use it any time. You can use your card as often as you wish provided you stay within your set credit limit.

Business credit cards can be used anywhere credit cards are accepted. You can make purchases online or in-person. You can also use your card for recurring payments, such as utility bills, which is even smarter when you use a rewards card that gives cash back or other perks.

Like lines of credit, business credit cards are revolving forms of credit. This means that as you pay down your principal balance and interest, funds will become available to use again. Once you’re approved for a business credit card, your card is ready to use immediately whenever you need it. This makes it a great payment option for emergency expenses, purchasing supplies or inventory, or for paying recurring expenses.

Recommended Option: Chase Ink Preferred

Chase Ink Business Preferred



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Annual Fee:


$95

 

Purchase APR:


18.24% – 23.24%, Variable

If you have excellent credit, consider applying for the Chase Ink Preferred card. With this rewards card, you can receive 3 points for every dollar spent on combined purchases in travel, shipping, cable, internet, phone services, and advertising. Even though earning three points on these purchases is capped at $150,000 per year, you can still earn one point per dollar spent with no limitations on all purchases.

If you’re approved for the Chase Ink Preferred card and spend $5,000 within 3 months of opening your account, you’ll receive an additional 80,000 bonus points. Points can be redeemed for rewards including vacation packages, gift cards, Amazon purchases, and cash back.

This credit card comes with a variable APR of 18.24% to 23.24%. A $95 annual membership fee is required.

To qualify for Chase Ink Business Preferred, you must have good to excellent personal credit.

Rollovers As Business Startups (ROBS)

Withdrawing retirement funds may be tempting, but who wants to pay penalties and taxes for early withdrawal? Luckily, there’s a way that you can leverage these funds to put capital into your new business. This method is known as rollovers as business startups, or ROBS.

How does ROBS work? The first step is to create a C-corporation. Then, a new retirement plan is created for the C-corp. Next, the funds from your existing retirement plan are rolled over into the new plan. These funds are used to purchase stock in the new C-corp, giving you access to the capital you need to get your business running.

Sound too complicated for you? Then consider working with a ROBS provider. A ROBS provider will get everything set up for you legally and ensure you maintain compliance. In exchange, you’ll pay a one-time setup fee and a monthly maintenance fee with most ROBS providers.

When you use this type of financing to fuel your business, you don’t have to worry about repaying a lender. After all, you’re using your own funds. However, be aware that if your business is unsuccessful, you risk losing your retirement funds.

Recommended Option: Guidant Financial

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Guidant Financial is a ROBS provider that can help you leverage your retirement funds. All you need is a qualifying retirement or pension account. Qualifying accounts include:

  • 401(k)
  • 403(b)
  • Traditional IRA
  • TSP
  • SEP
  • Keogh

Qualifying accounts must have a minimum of $50,000. You must also be an employee of the business.
By working with Guidant Financial, you can receive funds in as little as 3 weeks. The setup fee is $4,995. You must also pay a Plan Administration fee of $139 per month.

Unsure if a ROBS plan is right for you? Don’t worry — Guidant Financial offers other business financing options including:

  • SBA 7(a) Loans
  • SBA Working Capital Loans
  • Unsecured Business Loans
  • Equipment Leases

Purchase Financing

If you’re looking for a way to pay your vendors that frees up some of your cash flow, purchase financing might be the solution you’re looking for. With purchase financing, your vendor gets paid immediately for your purchases – think tools, fluids, and other critical shop supplies. In the meantime, you’ll get additional time to pay. Instead of paying off the full balance of your purchase up front, you’ll be able to split it into more affordable regular payments.

Purchase financing gives you more control over your cash flow, freeing up funds and allowing you to pay back on a schedule that works best for your business. Of course, like with other financing, you do have to pay interest and fees for this service.

Recommended Option: Behalf

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Behalf offers purchase financing of $300 up to $50,000. You’ll receive up to 6 months to repay the lender and can choose between weekly or monthly payments.

Monthly fees for the service start at 1% and are based on creditworthiness. There are no additional fees for using Behalf’s financing.

There are no time in business or revenue requirements to qualify. However, Behalf performs a hard pull on your credit, considers business credit history, and looks at other business performance factors to determine if you are eligible for financing.

Choose Business Software

Small Business Online Accounting Software

To keep operations flowing smoothly, you need to pick the right business software for your repair shop. Business software helps you more efficiently run your business, from keeping up with customers to tracking your finances for tax purposes.

Accounting Software

Accounting software allows you to perform various accounting functions so that you can track and record all financial transactions. With accounting software, you can track accounts receivable and accounts payable. Most modern accounting software also offers additional tools including bill payment, payroll, and invoicing. You can purchase accounting software or pay a fee to subscribe to an online service.

Accounting software not only allows you to keep track of your finances at any time, but it also can be used to run financial reports that may be required to receive financing. These reports will also serve you well when it comes time to do your taxes.

No experience in accounting? Don’t worry — we have you covered. Check out our free eBook “The Beginner’s Guide to Accounting” that breaks complicated accounting concepts into ones that are easy to understand.

Auto Repair Invoice Software

Accounting software often has a feature that allows you to create and send invoices. However, you might want to invest in specialty software for auto body repair shops.

Auto repair invoice software includes a variety of tools that can be used to track service requests, create invoices and estimates, track leads, and manage inventory and orders.

Payment Processing Software

No longer do we live in a cash-only world. Now, customers almost always make their purchases using debit cards, credit cards, and even smartphones.

In order to be able to accept these forms of payment, you’re going to need a payment processing service. The payment processor serves as the communicator between your customer’s bank and your own bank, allowing you to process credit, debit, and other forms of payment.

For your auto collision business, you might want to consider getting a point-of-sale system. With POS software, you’ll be able to process credit cards, scan barcodes, print receipts, track inventory, run reports, and perform other functions. For a fee, your business can receive the software and hardware needed to best serve your customers.

Hire Employees

While you may start your collision center as a one-man operation, you have to hire employees if you want to grow.

One of the first hires you’ll make is a mechanic that will work on repairing vehicles. According to the Bureau of Labor Statistics, mechanics make approximately $39,550 per year. An auto body and glass repairer averages around $40,580 annually.

As you bring in more employees, you’ll also want to hire a manager to oversee them all. Salaries for managers vary widely based on experience and how many employees they will be overseeing. Managers may bring in anywhere from $45,000 upwards of $60,000 per year.

Eventually, you may also want to hire a front-desk receptionist. The role of the receptionist is to greet customers, answer the phone, and make appointments. This employee may also take payments from customers and handle some of the company’s bookkeeping. The average salary of a receptionist is around $27,000 per year.

Do some research to find out more about salaries in your area, as these numbers can vary. You also need to take into consideration that there are additional expenses associated with hiring employees including:

  • Onboarding & Training
  • Background Checks
  • Drug Testing
  • Taxes
  • Benefits

When you’re ready to hire an employee, there are a few ways you can find quality candidates. The first is to ask for referrals. If you know someone in the industry, ask if they know of any potential employees. Even if you don’t have connections with anyone in the industry, ask around among your friends, family members, and colleagues.

You can also post your jobs on online job boards. Make sure that your job listing has an overview of responsibilities and requirements for all candidates. As resumes hit your inbox, you can set up interviews and hire new employees for your business.

Bolster Your Web Presence

Before you even hold your grand opening, you need to start your marketing efforts. The best place to start is the internet. When researching new businesses, most people use their laptops or smartphones. If you don’t have a web presence, how will your customers find you?

Getting your business online is easy. Start with these simple steps.

Create Social Media Profiles

It seems like everyone’s on social media these days, from your teenage nephew to your grandmother. Social media doesn’t just connect friends and family members, either. It’s also a great place for users to find new brands and businesses.

Setting up your social media profiles is free and easy. Consider starting with Facebook, Twitter, and Instagram. Add your logo, contact details, and important information like services provided and hours of operation. As you build your business, you can update your profiles with specials, coupons, photos of your completed work, and other information.

Create A Website

You also want to make sure that you have a website that provides important details to your customers such as your shop hours, specials, and services provided.

No web design experience? No problem. These days, any small business owner can create a professional website with easy web builders that feature templates, drag-and-drop design, and other tools to create a website in just minutes.

Your website should be a reflection of your brand, so make sure to choose templates, photos, and colors that best represent your shop. Your domain name should also represent your brand, so make sure it’s easy to remember and avoid numbers, symbols, or very long URLs.

Your website shouldn’t be overly complicated, and it should be easy to navigate. You don’t have to load down your site with lots of information. Start off by including key info such as hours of operation, services performed, and contact information. Also make sure to highlight any features that make your shop stand out, such as certifications, free estimates, or rental car/shuttle services offered to your customers. In the future, you can add additional features such as a signup option for email newsletters or online scheduling.

This is all just the tip of the iceberg. Learn more about creating and maintaining an online web presence for your business.

Advertise Your Business

Your website and social media profiles are a great way to start advertising your business, but in order to grow and scale, you can’t stop there. You need to plan a marketing and advertising campaign to get the word out about your business.

Consider paying for social media ads or pay-per-click ads on search engines, or sign up with Yelp For Business. These options can be affordable for new businesses and are easy to set up.

You can also look beyond the internet to advertise your business. Consider placing flyers or door hangers in the area around your business to bring in new customers. Before you take this route, though, make sure to understand the local laws in your area regarding the posting of flyers on public and private property.

As your business grows and becomes more successful, you can explore options including radio and TV advertisements and mailers. However, these ads are typically quite expensive, so hold off on these options until your business is bringing in steady revenue.

One of the most important things to remember here is that word-of-mouth advertising is one of the best forms of advertising. If you perform a great service, your customers will tell others about your business. Keep customer satisfaction high to increase those referrals and draw in more revenue for your body shop.

Final Thoughts

While you may be itching to get your auto body shop off the ground immediately, a business isn’t born overnight. Take the time to plan out your business, and you’ll increase your chances for success. The hard work doesn’t stop after your grand opening, either. You’ll need to continue working hard to bring in customers, increase your revenue, and become a successful entrepreneur.

The post How To Start And Finance An Auto Body Shop Business appeared first on Merchant Maverick.

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The Best Business Loan And Financing Resources For Ohio Small Businesses

Finding financing and other business resources can be a challenge for any small business. Maybe you don’t know where to look, or maybe there are just too many options and you have no idea where to begin. If you’re a small business owner in Ohio that needs help finding the right resources for your business, you’re in the right place.

In this post, we’ll explore the different financing resources available to your small business. We’ll review our picks for online business lenders that make the loan process faster and easier than ever. We’ll take a look at local banks, credit unions, and nonprofit lenders that offer financing to Ohio businesses. We’ll even explore small business grants that can put free money into your business. Whether you’re just starting a business in Ohio or your established business is ready to grow, there’s an option out there for you. And after reading this post, you’ll know exactly where to find it!

Online Business Lenders For Ohio Businesses

Small business owners are often strapped for time. From managing day-to-day operations to planning an expansion or gearing up for an upcoming busy season, it’s difficult to find enough hours to tackle your daily tasks, much less pile anything else on your plate. You need capital, but you just don’t have the time to sit on a phone with a lender or head into a bank to pitch your business.

Or maybe you have the time to get a loan, but you fall short in another area. Your credit score is low. Your time in business is too short. Your annual revenues aren’t where they need to be to qualify for a bank loan.

Whether it’s time, borrowing requirements, or some other issue that’s keeping you from applying for a small business loan, there’s an alternative: an online business loan.

You probably already use the internet to perform tasks for your business: bookkeeping, communicating with clients and suppliers, or ordering inventory, just to name a few. Why not leverage the internet to find the capital you need to start your business, grow your brand, or overcome a financial hurdle?

With online lenders, you can apply for your loan without ever stepping foot into a bank or office. You can shop your options, learn about requirements, and compare lenders from your computer or smartphone. Some lenders can even give immediate approvals and send over your funds in as little as one business day.

In addition to ease and speed, online lenders are opening up more opportunities than ever for small business owners. Bad credit? No business credit? Low revenues? Startup? No problem — there’s an option out there for you.

Ready to find an online lender? Instead of weeding through thousands of search engine results to find legitimate options, start your search with these lenders.

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Lendio makes shopping for the best financial product easier than ever. This loan aggregator has over 75 financial partners that you can reach through one simple application. You can compare multiple lender offers to find the most affordable option for your Ohio small business. From long-term, low-interest Small Business Administration loans to merchant cash advances, Lendio has it all.

Some of the financial products offered to small businesses through Lendio’s network include:

  • SBA Loans: Up to $5 million with terms up to 25 years
  • Term Loans: Up to $2 million with terms up to 5 years
  • Commercial Mortgages: Up to $5 million with terms up to 25 years
  • Startup Loans: Up to $750,000 with terms up to 25 years
  • Lines Of Credit: Up to $150,000 with terms up to 2 years
  • Short-Term Loans: Up to $500,000 with terms up to 3 years
  • Equipment Financing: Up to $5 million with terms up to 5 years
  • Merchant Cash Advances: Up to $200,000 with terms up to 2 years
  • Accounts Receivable Financing: Up to 80% of receivables with terms up to 2 years
  • Business Acquisition Loans: Up to $5 million with terms up to 25 years
  • Business Credit Cards: Up to $500,000

Filling out the application is quick and easy, and there’s no impact to your credit until you accept an offer. Depending on the type of financing you select, you could have the capital you need in as little as 24 hours. Borrower requirements and required documentation vary based on the product selected. Rates and terms vary by lender.

SmartBiz

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If you’ve been in business for some time, you’re probably at least aware of the Small Business Administration. If not, you’re missing out on a very important resource. The SBA is not just an advocate for small businesses but also provides competitive, long-term loan options.

The SBA is not a direct lender. Instead, this organization guarantees small business loans distributed through its programs. Nonprofit organizations, banks, credit unions, and other lenders can feel more secure in taking on the risk of small business lending. Meanwhile, this opens the door for low-cost loan options for small business owners in Ohio, just like you.

Navigating the SBA loan process can be tricky, but smart business owners lean on SmartBiz to do the heavy lifting. SmartBiz simplifies SBA loans, removing the stress of the application process while putting money in your bank account faster than ever.

SmartBiz offers two SBA loan options for you. If you need to refinance high-interest debt or need extra money for working capital, marketing campaigns, inventory, equipment purchases, or operating expenses, you can apply for $30,000 to $350,000. You’ll have up to 10 years to repay your loan, and you’ll receive competitive interest rates of 8.25% to 9.25%.

To qualify, you must meet the requirements below:

  • Time in business of at least 2 years
  • U.S. citizen or permanent resident
  • Credit score of 640 or above
  • Sufficient cash flow
  • No bankruptcies or foreclosures within the last 3 years
  • No prior defaults on government-backed loans
  • No outstanding tax liens

If you need to purchase commercial real estate or refinance a commercial real estate loan, apply for the SBA 7(a) commercial real estate loan. You can receive between $500,000 to $5 million with repayment terms up to 25 years and interest rates of 7% to 8.25%.

The borrower requirements for SBA 7(a) commercial real estate loans are as follows:

  • Property must be at least 51% owner occupied
  • Purchase price must be more than $500,000
  • Time in business of at least 3 years
  • U.S. citizen or permanent resident
  • Credit score of 675 or above
  • Sufficient cash flow
  • Funds can’t be used to purchase investment properties or fund construction
  • No bankruptcies or foreclosures within the last 3 years
  • No prior defaults on government-backed loans
  • No outstanding tax liens

Credibly

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Credibly is an online lender that offers multiple financing options for small business owners. Credibly can preapprove you for up to $400,000 with final approvals in as little as 24 hours.

One of the financial products offered through Credibly is a working capital loan. You can qualify for up to $400,000 with repayment terms up to 18 months. These loans do not have traditional interest rates. Instead, Credibly’s working capital loans have factor rates that start at 1.15. Repayments on your loan are made daily or weekly.

To qualify for a working capital loan, you must have:

  • Time in business of at least 6 months
  • Personal credit score of 500 or above
  • At least $15,000 in monthly bank deposits

Need longer terms for your loan? Credibly’s business expansion loans have terms of up to 2 years. These loans are available in amounts up to $250,000 with interest rates starting at 9.99%. This loan is repaid through weekly payments.

To qualify for a business expansion loan, you must meet these requirements:

  • At least 3 years in business
  • Personal credit score of 600 or above
  • At least $3,000 in daily balances
  • At least $15,000 in monthly bank deposits

Another option to consider through Credibly is a merchant cash advance. With this financing, you’ll receive up to $400,000. The anticipated duration of Credibly’s MCAs are 3 to 18 months, and repayment is based upon your receivables. Factor rates for MCAs start at 1.15.

To qualify for this type of funding, you must:

  • Have a personal credit score of 500 or above
  • Be in business for at least 6 months
  • Have at least $15,000 in monthly bank deposits

Fundbox

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Wouldn’t it be a relief to have a source of funding available to you on-demand? If an emergency pops up, you’d have the funds to cover it. If you needed extra inventory or money to pay for operating expenses, you wouldn’t have to wait days (or weeks) for loan approval. If your Buckeye business would benefit from this type of funding, a line of credit from Fundbox may be just what you need.

Fundbox offers revolving lines of credit up to $100,000 for qualified businesses. You can make one or multiple draws on your line of credit up to your set limit. As you repay borrowed funds, they become available to draw again. You can select from 12- or 24-week terms, and fees start at just 4.66% of the draw amount. Weekly payments are automatically deducted from your business bank account.

Qualifying is simple, as Fundbox considers your business performance when approving lines of credit. To receive yours, you must have:

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

Prosper

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If you’re a new business with no (or very low) revenue, how are you going to qualify for a small business loan? Unfortunately, there will be many small business financing options unavailable to you if your business is brand new or hasn’t yet opened its doors. If this sounds familiar, you may have to get a little creative with your financing. One of the best options? A personal loan for business.

With a personal loan for business, your personal credit score and income can help you qualify for the funding you need. This is a great way to pay for startup costs or to cover any business expense when you don’t qualify for small business financing.

One lender to consider for personal loans is Prosper. You may qualify for up to $40,000 with APRs of 6.95% to 35.99%. You can select from terms of 3 years or 5 years.

To qualify for a Prosper personal loan, you must meet the following minimum eligibility requirements:

  • Source of income
  • Debt-to-income ratio below 50%
  • No bankruptcies within the last 12 months
  • Less than 5 credit inquiries within the last 6 months
  • At least 3 open trade accounts on your credit report

Amex Merchant Financing

American Express OptBlue

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If your business accepts American Express, you may qualify for Amex Merchant Financing. You can receive a loan of $5,000 up to $2 million for one fixed fee of 1.75% to 20%. A fixed amount is deducted daily, or you can opt to have a percentage of your daily receivables deducted.

Repayment terms are spread over 6, 12, or 24 months and automatic payments are deducted daily from your account. If you repay your loan early, you could get up to 25% of your fixed fee back, helping you save on the cost of your loan.

To qualify, you must:

  • Accept American Express cards
  • Have at least $50,000 in annual revenue
  • Have at least $12,000 in annual debit and credit receivables
  • Have been in business for at least 2 years

Banks, Credit Unions, & Nonprofit Lenders In Ohio

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Online lenders are convenient, but maybe you prefer working with more traditional lenders. Banks, credit unions, and nonprofit lenders throughout Ohio provide loans and other financial products at competitive rates. You can also sign up for other business services, such as checking and savings accounts, payroll services, or employee benefits.

Huntington Bank

Huntington Bank has branches located in hundreds of cities in Ohio, including Akron, Canton, Cincinnati, Cleveland, and Columbus. Small business owners can open a checking and savings account through this bank. If you need extra capital to start or grow your business, Huntington Bank offers multiple financial products tailored to small businesses including:

  • Term Loans
  • Commercial Real Estate Loans
  • Lines Of Credit
  • Business Credit Cards
  • SBA Loans

Huntington Bank is a particularly good choice for SBA loans, as it has been ranked the top SBA lender in the region for the last 10 years.

Rates, terms, and borrower requirements vary by product. If you’re interested in getting financing through Huntington Bank, call their toll-free number or visit a branch near you to learn more.

Wright-Patt Credit Union

If you prefer more personalized service when seeking your small business financing, consider joining a credit union. In Ohio, Wright-Patt Credit Union is one of the largest with over 30 locations throughout the state.

As a member of Wright-Patt Credit Union, you’ll be able to handle all of your finances in one place. In addition to traditional financial products including business checking, savings, and money market accounts, members can also apply to receive financing through:

  • Commercial Real Estate Loans: Terms up to 25 years
  • SBA Loans: 7(a), Express, and 504
  • Commercial Auto Loans: Terms up to 84 months
  • Term Loans: Terms up to 10 years
  • Business Credit Cards
  • Lines Of Credit

Rates, terms, and borrower requirements vary by financial product. Some financing options, including auto loans and business credit cards, have online applications available to Wright-Patt members.

To become a member, you must meet one of the following requirements:

  • Live, work, attend school, or worship in one of the Ohio counties serviced by the credit union
  • Be a military or civilian employee of Wright-Patterson Air Force Base
  • Live in the Fairborn area with no access to other credit unions
  • Be a student, faculty member, staff member, or alumnus of Wright State University
  • Have a family member that is a Wright-Patt member
  • Be in a group affiliated with Wright-Patt Credit Union

Finance Fund Capital Corporation

Finance Fund Capital Corporation (FCAP) is a nonprofit community development financial institution. Through FCAP, eligible Ohioans can apply for funding through the Small Business Loan Fund. Loans are available in amounts from $100,000 to $1 million. Funds can be used for the following business purposes:

  • Working Capital
  • Real Estate Acquisitions
  • Construction
  • Leasehold Improvements
  • Equipment

Loans come with terms up to 7 years. However, there are longer options for commercial real estate and fixed asset purchases. Rates are based on the creditworthiness of the borrower and the risk of the project being funded.

To qualify, a business must:

  • Be a for-profit sole proprietorship, partnership, or corporation
  • Provide vital services to the area
  • Operate in an underserved market
  • Have a viable business idea

Loans are also given through the SBA Community Advantage program. To learn more and to apply for the Small Business Loan Fund, call or email Finance Fund Capital Corporation.

Small Business Grants In Ohio

If your business needs capital, turning to a lender isn’t your only financing option. Your business may qualify for a small business grant. The best thing about small business grants is that funds don’t have to be repaid, so there’s no worrying about monthly payments, high interest rates, or fees.

On the flip side, scoring a small business grant isn’t just as simple as filling out an application, having a credit check performed, and getting the funds you requested. Small business grants are extremely competitive. You must also meet very specific requirements — such as operating in a certain industry, having a veteran-owned business, or being a woman business owner — for most grants.

In the state of Ohio, there are several grant programs to consider. Start with these options.

JobsOhio

JobsOhio is a nonprofit corporation that aims to create jobs and promote economic development in Ohio by attracting, retaining, and expanding businesses. Through JobsOhio, small business owners have access to grant and loan programs including:

  • Economic Development Grant: Focuses on fixed asset and infrastructure investment of companies, including site development, machinery and equipment, land, and buildings.
  • Revitalization Program: Provides funds for businesses, nonprofits, and governments for costs related to redevelopment projects, including demolition, building renovation, and site preparation.
  • Workforce Grant: Provides funding for company training costs including information technology, leadership skills, technical training, and on-the-job training.
  • Growth Loan Fund: While not a grant, the Growth Loan Fund provides low-cost loans for established businesses that have limited access to traditional funding sources. Loan funds can be used to purchase fixed assets including land, buildings, machinery, and equipment.

Ohio Development Services Agency

The Ohio Development Services Agency has multiple programs that are designed to help Ohio businesses grow and create jobs. These programs include small business grants, low-cost loans, tax credits, and bonds.

Programs available through the Ohio Development Services Agency include:

  • Alternative Fuel Transportation Program: Provides financial assistance to businesses that purchase and install alternative fuel facilities and terminals.
  • Energy Loan Fund: Provides low-cost financing to businesses and manufacturers for improvements that reduce fossil fuel emissions and energy usage.
  • Ohio Minority Business Direct Loan Program: Provides low-interest loans to minority-owned businesses

City Of Cleveland Green Technology Business Grant Program

New green technology businesses located or relocating to Cleveland, Ohio, may qualify for the Green Technology Business Grant Program. To qualify, a business must create at least five new jobs within its first year.

The grant provides up to 1% of new payroll for up to 3 years. An additional $5,000 is also available as a Moving Assistance Grant. Interested small business owners can apply online through the City of Cleveland Economic Development.

Loans & Resources For Startups In Ohio

Startup businesses may find it a challenge to get the capital and resources they need to grow. Fortunately, the state of Ohio offers multiple resources to help new businesses and startups succeed.

Minority Business Assistance Centers

The Ohio Development Services Agency offers assistance to minority-owned businesses through its Minority Business Assistance Centers. Through these centers, minority-owned and disadvantaged small businesses can receive services including accounting assistance, business management counseling, marketing plan development, and help identifying local resources.

SCORE

SCORE is one of the nation’s best resources for startup and small business owners. Through SCORE, you can receive free business counseling with an expert mentor. You can meet face-to-face with your mentor or you can receive counseling online.

SCORE also offers free and low-cost business training, workshops, and other resources such as business templates and guides.

SCORE chapters are located throughout the state of Ohio in cities including Mansfield, Columbus, Toledo, and Newark.

Ohio Small Business Development Centers

Whether you’re launching your business or taking your existing business to the next level, the Ohio Small Business Development Centers have resources for you. You can work with a Certified Business Advisor to get your business on the right track.

Services available through SBDC include business planning, one-on-one counseling, finding sources of capital, workshops, and training programs.

Offices are located throughout Ohio in cities including Akron, Cincinnati, Cleveland, and Columbus.

What To Consider When Choosing A Lender

Now that you know just a few of the options available to you, narrowing down your choices to just one lender can be tricky. However, there are a few factors to keep in mind to help you choose the right lender for your business.

Type Of Financing

What type of financing are you seeking? If you want a flexible line of credit, you can cross off any lenders that offer long-term loan options. Interested in SBA loans? Then don’t give short-term lenders a second glance. Determine what type of financing works best for your business, then select a lender that provides this type of funding.

Borrowing Amount

If you need $500,000 to purchase commercial real estate, a $10,000 loan isn’t going to get you very far. Consider the borrowing limits of each lender, then choose the lender that is able to provide the capital your business needs.

Affordability

When you receiving financing, you have to consider the overall cost of borrowing. Calculate the fees, interest, and other costs associated with each lender you’re considering. Working with one lender may be faster and easier, but the costs may be much higher … and could be too much of a burden for your business. Consider your options, don’t feel obligated to take the first offer, and know how much your business can afford. Remember, you want to grow your business, not slide into a cycle of debt.

Borrower Requirements

Do you meet all of the requirements of the lender? Lenders consider factors such as personal credit score, business credit score, past credit history, time in business, and annual revenue. If you don’t meet these requirements, you won’t get approved, so why waste your time? Grab your free credit score, read up on borrower requirements, and submit your application only when you know you meet all requirements. Also, please remember that meeting the minimum requirements of a lender is not a guarantee of approval.

Final Thoughts

Starting and operating a business is tough for even the most experienced entrepreneur. Luckily, you don’t have to go it alone. As a business owner in Ohio, there are multiple lending options and other resources available to you to keep your business on the path to success.

The post The Best Business Loan And Financing Resources For Ohio Small Businesses appeared first on Merchant Maverick.

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