SBA Loans For Women: What You Need To Know

Being an entrepreneur is never easy. However, if you’re a female entrepreneur, you may face even more challenges when owning and operating your own business. After all, until the passage of H.R. 5050: Women’s Business Ownership Act in 1988, women in many states couldn’t even receive a business loan without having a male cosigner. Thanks to this legislation, more resources are available for women business owners. Unfortunately, though, women still face challenges when applying for business loans and financing.

If you’re a female business owner or you’re ready to start your own business, don’t lose hope. There are resources available to fund the launch or expansion of your business. One of the best resources? The Small Business Administration.

The Small Business Administration — or SBA — provides a variety of resources, including affordable loan programs, to female entrepreneurs. Ready to learn more? Read on to find out more about the SBA, growing your business with SBA loans, and additional resources available for women-owned businesses.

What Is The SBA?

The SBA was founded in 1953 to provide assistance to small business owners. The SBA provides various resources to help small business owners become successful entrepreneurs. This includes in-person and online counseling, low-cost training, and advocacy for small businesses. One of the SBA’s most significant resources is its low-interest loan programs.

Securing a traditional loan from a bank or credit union can be tough for any business owner. These financial institutions view small businesses as a risk, even when the business has established a track record of success. Because traditional lenders tend to avoid risky borrowers, many business owners have the door shut in their face.

At this point, there are a few options to consider. Alternative lenders have fewer requirements but much higher rates and less favorable terms. Low borrowing limits through these lenders may also prove to be a problem.

Instead of simply accepting a loan with less-than-desirable terms, many business owners look to the SBA to receive loans with competitive rates and terms, even when they’ve been turned down for other loans.

Overview Of SBA Loan Programs

Loan Program Description More

7(a) Loans

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

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Microloans

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

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CDC/504 Loans

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

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Disaster Loans

Loans used to rebuild or maintain business following a disaster. 

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How The SBA Helps Women-Owned Businesses

The SBA’s Office of Women Business Ownership was created to enable and empower female entrepreneurs. Training and counseling are available to all women through Women’s Business Centers, with over 100 educational centers open nationwide.

The Office of Women’s Business Ownership collaborates with other organizations to provide additional resources to women entrepreneurs. We’ll explore some of these resources a little later in this post.

The SBA also provides federal contracting opportunities for women through the Women-Owned Small Business Federal Contracting program. Through this program, certified women-owned businesses can compete for federal contracts.

The SBA does not discriminate when it comes to funding and resources. Women-owned businesses can take advantage of everything that the SBA has to offer. Female entrepreneurs can apply for all SBA loans provided they have a “small business” as defined by the SBA and meet all other requirements. These loans open up funding opportunities for women to launch or grow their small businesses.

One important thing to note here is that the SBA is not a lender. Instead, this organization has created guidelines that keep interest rates low and repayment terms flexible. Money is loaned through lenders known as intermediaries. An intermediary can be a bank, credit union, nonprofit organization, or another lender. The SBA takes the risk off of lenders by guaranteeing large percentages of most loans. This makes it easier for lenders to loan to small businesses, which can then take advantage of these affordable financing opportunities when other options aren’t available.

How To Qualify For An SBA Loan

One of the most valuable resources available through the SBA is access to low-cost loans. Female entrepreneurs that don’t qualify for traditional loans can receive competitive rates and terms through SBA programs.

Starting or expanding your small business takes capital … and sometimes, lots of it. Purchasing or leasing a commercial building, buying equipment, and even having working capital for daily expenses can be a financial burden that most entrepreneurs can’t handle alone. This is when an SBA loan can really be beneficial.

Women can apply for any SBA loan product, provided they meet the requirements. The first requirement is that the business must meet the SBA’s size standards for a small business. The SBA limits the number of employees, annual revenues, and net worth of the business.

To receive an SBA loan, your business must be based in the United States. Most loans are only available to for-profit businesses, although SBA Microloans are also open to nonprofit childcare centers. Businesses in certain industries are also ineligible to receive SBA loans. These industries include, but are not limited to:

  • Multi-Level Marketing Schemes
  • Real Estate Investment Firms
  • Religious Institutions
  • Lending Firms
  • Businesses In Illegal Industries
  • Government-Owned Businesses
  • Gambling Businesses

When applying for SBA loans, your personal credit score will be a factor for approval. Though credit requirements vary by lender, most SBA intermediaries require a solid credit score at least in the mid-600s. Of course, the higher your score, the higher your chances are to receive a loan. Your credit report must also be free of:

  • Recent Bankruptcies
  • Tax Liens
  • Defaults On Government Loans

Other negative items on your credit report will need to be explained to your lender, and depending on the severity, may disqualify you from receiving a loan.

You must also show sufficient revenue to cover your monthly loan payment. Your lender will evaluate your revenue and your current debts during the underwriting process to determine if you can afford the new loan.

Depending on the loan you apply for and the total borrowing amount, you may also be required to pay a down payment and/or put up collateral to secure the loan. You may also be required to pay fees to receive your loan including but not limited to:

  • Guarantee Fees
  • Origination Fees
  • Packaging Fees
  • Loan Service Fees
  • Closing Costs

To qualify for an SBA loan, you must have invested your own time and money into your business. You also must have exhausted all other financing options before applying.

Can I Get An SBA Loan If I Have Bad Credit?

To qualify for an SBA loan, a solid credit score is required. Credit score requirements are not set by the SBA, but this doesn’t mean that your score isn’t important. Your personal credit score is, in fact, an important factor considered by intermediary lenders.

Most lenders want to see a credit score of at least 620, while scores over 700 are preferred. If your credit score falls below 620 or your credit report has negative items such as bankruptcies, foreclosures, or collections, the chances of receiving an SBA loan are slim to none.

If your credit prevents you from receiving an SBA loan, there are a few options. The first is to work on your credit, build your score, and apply when you meet all requirements. Start by receiving your free credit score online, reviewing your credit report, disputing any errors, and paying your current debt obligations as agreed. Although this can be a lengthy process, building your credit score will open up many affordable financing opportunities for you, including SBA loans.

If your financing need is more urgent, you can apply for loans and other financing for bad credit borrowers. Be aware, however, that these loans have less favorable terms, higher interest rates, and are more expensive than SBA loans.

Types Of SBA Loans For Women-Owned Businesses

Now that you have a general understanding of SBA loans, which loans are best for women-owned businesses? While all SBA loans are available to female entrepreneurs, three loans stand out the most: SBA 7(a) loans, Microloans, and CDC/504 loans. Let’s delve into the details of each type of loan to help you determine which is best for your business.

SBA 7(a) Loans

The SBA 7(a) loan is one of the most popular loan options for small business owners. Through the 7(a) program, borrowers are eligible to receive up to $5 million that be used for nearly any business purpose, including the purchase or expansion of an existing business, refinancing existing debt, or to pay startup costs.

Repayment terms are based on the borrower’s ability to repay and are up to 10 years for loans used as working capital or up to 25 years for loans used for commercial real estate. Interest rates are based on the amount borrowed and the repayment terms. The maximum interest rates for a 7(a) loan is the prime rate plus a markup between 2.25% and 4.75%. Check out the current rates for SBA loans.

SBA 7(a) Loan Base Rates + Markups

Loan Amount Less Than Seven Years More Than 7 Years

Up to $25,000

Base rate + 4.25%

Base rate + 4.75%

$25,000 – $50,000

Base rate + 3.25%

Base rate + 3.75%

$50,000 or More

Base rate + 2.25%

Base rate + 2.75%

SBA 7(a) loans of $25,000 or less do not require collateral. Loans of more than $25,000 up to $350,000 may require collateral based on the lender’s policies. All loans that exceed $350,000 must be secured with collateral. Fixed assets of the business are used to collateralize the loan, although trading assets and personal real estate may be used as collateral if needed. A guarantee fee must be paid by the borrower for 7(a) loans over $150,000.

Women-owned businesses may also qualify to receive the SBA’s Community Advantage loan. Through this program, business owners can receive up to $250,000. Loan proceeds can be used for nearly any business purpose, just like with the 7(a) loan. Repayment terms are the same as the 7(a) program, and the maximum interest rate is the prime rate plus 6%.

What makes this loan different from the traditional 7(a) loan? The Community Advantage program is designed for small businesses in underserved markets. Women-owned businesses, businesses located in low-to-moderate income areas, businesses in rural areas, and businesses that are less than 2 years old qualify for funding through this program.

SBA Microloans

If you have smaller capital needs, the SBA Microloan program may be the right financing solution for your business. Women-owned businesses can apply for up to $50,000 through this program. The average loan amount distributed through this program is $13,000. These loans are distributed through nonprofit lenders.

SBA Microloan proceeds can be used as working capital, to purchase equipment or fixtures, or to cover improvements. Microloans can’t be used to repay existing debt.

Maximum repayment terms are set at 6 years. The interest rate is based on the lender’s cost of funds. The lender can add a maximum of 8.5% to its cost of funds when distributing loans. There is no guarantee fee required with these loans. Collateral and/or a personal guarantee may be required by the lender as a condition of receiving the loan.

SBA Microloan Rates & Terms

SBA 504 Loans

Borrowing Amount

$500 – $50,000

Term Lengths

Up to 6 years

Interest Rates

6.5% – 13%

Borrowing Fees

Possible fees from the loan issuer

Personal Guarantee

Guarantee required from anybody who owns at least 20% of the business

Collateral

Collateral normally required, but depends on the lender

Down Payment

  • No down payment for most businesses
  • Possible 20% down payment for startups
  • Possible 10% down payment for business acquisition loan

SBA CDC / 504 Loans

If you need to purchase commercial real estate or update your existing facilities, consider applying for an SBA CDC/504 loan. This program is a little bit different from other SBA programs because you work with two different lenders.

Proceeds from an SBA CDC/504 loan can be used to purchase buildings, land, or long-term equipment, to improve land or update facilities, to pay costs for new construction, or to refinance debt connected to purchasing or updating facilities or equipment.

This is how the SBA CDC/504 program works: a Certified Development Company that is licensed through the SBA provides 40% of your project costs up to $5 million. A private lender provides 50% of the project costs. You are responsible for paying the remaining 10%. If you’re a new business or purchase a special-use property, you may have to pay up to 10% more.

Your CDC loan comes with repayment terms of 10 or 20 years. Interest rates for the portion of the project funded by the CDC are based on the 5-year and 10-year U.S. Treasury issues. Interest rates and repayment terms funded by the private lender vary.

SBA 504 Loan Rates & Terms

SBA 504 Loans

Borrowing Amount

No maximum, but the SBA will only fund up to $5 million

Term Lengths

10 or 20 years

Interest Rates

Fixed rate based on US Treasury rates

Borrowing Fees

  • CDC servicing fee, CSA fee, guarantee fee, third party fees (however, most of these fees are rolled into the interest rate or cost of the loan)
  • Possible prepayment penalty

Personal Guarantee

Guarantee required from anybody who owns at least 20% of the business

Collateral

Collateral required; usually the real estate/equipment financed

Down Payment

10% – 30%

For these loans, additional collateral is not typically required. The assets being purchased act as the collateral. All owners of 20% or more of the business are required to sign personal guarantees to receive this loan.

How To Apply For An SBA Loan

If your business needs financing and you meet the requirements of the SBA, you can apply for an SBA loan. The steps that you take next are determined by the type of loan you select.

To apply for an SBA 7(a) loan, the first step is to find an intermediary lender. You can do this through the SBA’s Lender Match service, which connects you with a lender in your area. You can also get referrals through your existing financial institution.

If you’re applying for an SBA Microloan, you’ll need to find a nonprofit lender in your area. If you’re applying for an SBA CDC/504 loan, you will need to find a CDC that is licensed with the SBA, as well as a private lender that will loan money to cover 50% of your project costs.

Once you’ve found a lender, you’ll fill out an application for the loan of your choosing. In addition to providing details about your business, you may also be required to provide a breakdown of ownership, a summary of how loan proceeds will be used, and details surrounding how you plan to pay back your loan.

Documentation will also be submitted with your application. This documentation will be used to determine if your business qualifies for funding. While requirements may vary by lender, expect to present the following items:

  • Business & Personal Credit Scores/Reports
  • Business Licenses
  • Articles Of Incorporation
  • Business & Personal Income Tax Returns
  • Cash Flow Statement
  • Balance Sheet
  • Profit & Loss Statement
  • Business Plan
  • Financial Projections

Depending on the loan product you select, additional documentation may be required. For example, a letter of intent from a private lender is needed when applying for an SBA CDC/504 loan.

As you move through the application process, be prepared to provide information on the collateral being used to secure the loan (if required) and all owners should be ready to sign a personal guarantee.

Once all documentation and information are gathered, the lender will evaluate your application, taking into consideration factors including credit score, credit history, time in business, and your ability to repay the loan. Don’t be surprised if the lender has questions or requests more information throughout the process. Make sure that your contact information is up to date and you make yourself available to keep the process moving forward.

The underwriters may take several weeks to review your full loan application. With banks and traditional lenders, you may wait 2 to 3 months (or longer) from the application stage to funding. Some lenders offer expedited services to help you get the money you need fast, so if time is an issue, shop around for intermediary lenders that offer fast approvals and funding, like SmartBiz or Lendio.

SmartBiz

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Through SmartBiz, you can apply to receive anything from $30,000 to $5 million to finance your small business. If you want to expand your business, refinance debt, hire employees, purchase inventory or equipment, launch a marketing campaign, or just have funds to use as working capital, consider applying for SmartBiz’s SBA 7(a) Working Capital and Debt Refinancing Loans.

Qualified borrowers can receive up to $350,000 through this program and can be funded in as quickly as 7 days. To qualify, you must have a minimum credit score of 650, a time in business of at least 2 years, and a credit history free of bankruptcies, foreclosures, charge-offs, and settlements. Your credit report should also be free of defaults on government-backed loans and tax liens.

You can also apply for up to $5 million for a 7(a) Commercial Real Estate Loan through SmartBiz. You must have a credit score of at least 675, a time in business of at least 2 years, and no delinquencies or defaults on government loans. The property being financed with loan proceeds should be at least 51% owner-occupied. You must also show proof of sufficient income to cover your loan payment.

Lendio

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Through Lendio, you can apply for the SBA 7(a) loan, the SBA 504 loan, and the SBA Express loan. Loans are available for $50,000 up to $5 million.

To qualify, you must meet all the requirements for receiving an SBA loan. Documentation can be uploaded securely to Lendio’s platform, and if you encounter any trouble along the way, you can work with your personal funding manager.

The average time for funding SBA loans through Lendio’s platform is 30 to 90 days.

Other Business Resources For Women

As mentioned earlier in this article, the SBA offers more than just loans for women-owned small businesses. One program offered through the SBA is the Women-Owned Small Business Federal Contracting program.

Through this program, women-owned businesses can bid on federal contracts with less competition. Only businesses that are certified WOSBs are eligible to compete for these contracts. To qualify, a business must be a small business as defined by the SBA, be at least 51% owned and controlled by U.S. citizens that are female, and have women in charge of day-to-day operations and long-term decisions.

Women that operate economically disadvantaged businesses can bid on federal contracts with even less competition, provided they meet all requirements of the SBA.

Even though legislation has been leveling the playing field for female entrepreneurs, the Center for Women’s Business Research found that almost half of women business owners don’t seek outside sources of funding for their business. The SBA believes that one reason women may not seek financing is that they don’t understand the process and may be unsure of who to ask for more information. The SBA has online resources, Women’s Business Centers, and local SBA offices that provide counseling, training, and loan information to women business owners.

There are plenty of other resources for female entrepreneurs outside of the SBA. The National Women’s Business Council offers nearly 200 resources through the Grow Her Business initiative, including accelerators and incubators, business competitions, conferences, crowdfunding, and alternative lender programs.

The National Association of Women Business Owners also provides resources to help empower women business owners. This organization offers training, education, and virtual networking to female entrepreneurs.

Entrepreneurs can also take advantage of many funding opportunities outside of SBA loans. Learn more about grants and small business loans available for women-owned businesses.

Final Thoughts

Women have come a long way in recent years, especially when it comes to entrepreneurship. The great news is that there are plenty of resources available to female entrepreneurs — you simply need to know where to look. By taking advantage of resources like SBA small business loans, you’ll be able to start, build, or grow your business, taking it to new levels you never thought possible.

The post SBA Loans For Women: What You Need To Know appeared first on Merchant Maverick.

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Business Loans For Food Trucks: Best Financing Options

Food trucks are rolling out across cities and towns across the nation, bringing delicious dining options to businesses and events. These mobile businesses don’t just benefit hungry diners, though. Restaurants-on-wheels also open up new opportunities for entrepreneurs. With operating costs that are only a fraction of what it would be to open and maintain a traditional restaurant, food trucks are a more affordable way to bring your tasty food to the masses.

Even though your costs are cut, that doesn’t mean they’re nonexistent. You still have to consider the cost of supplies, equipment, POS software, and the truck itself. Whether you already own a food truck business and want to expand or you’re ready to launch your business, these expenses add up quickly … and if you’re like most business owners, you don’t have the funds just sitting in your checking account.

The good news is you don’t have to be a millionaire to start or expand your food truck business. There are plenty of financing options available for your business expenses, from purchasing a new food truck to upgrading equipment and hiring employees.

Ready to roll out your food truck business? Read on to learn more about the types of financing available to you, how to apply, and our recommended options.

Financing Need Best Loan Type Recommended Lender
Purchasing Or Renting A Food Truck Equipment Financing Lendio
Working Capital SBA Loan SmartBiz
Supplies & Inventory Line Of Credit Fundbox
Hiring & Covering Payroll Installment Loan StreetShares
Cash Flow Shortages Short-Term Loan OnDeck
Emergency Funds Business Credit Card Chase Ink Unlimited

Purchasing Or Renting A Food Truck

It’s no surprise that one of the most important pieces of your food truck business is the food truck itself. Your truck is your mobile restaurant, allowing you to peddle your tasty treats all over town. Without a food truck, you simply don’t have a business.

Unfortunately, the truck will also be one of your biggest expenses. A custom truck stocked with all of the equipment you need to make your edible creations could cost upwards of $200,000 — an expense that just isn’t financially feasible for most entrepreneurs.

Whether you’re investing in your first food truck or adding to your fleet, there are two options to consider: purchasing and renting/leasing. Let’s explore the differences between loans and leases to determine which option is best for your business.

Vehicle Loans VS Leasing

If you want to purchase a food truck, commercial auto loans or equipment loans are your best financing options. These loans can help you buy an expensive food truck without having to pay the full purchase price out of pocket.

When you receive an equipment or vehicle loan, you’ll be required to pay a percentage of the purchase price as a down payment. This is typically 10% to 20% of the total cost, although this can vary by lender. In most cases, the higher your credit score, the lower your down payment requirement will be. However, you may want to consider putting a larger amount of money down to reduce the amount of your loan and decrease your monthly payment.

After making the down payment, the lender will loan you the remaining balance so that you can take possession of the vehicle immediately. Then, you’ll repay the loan through monthly payments for a set period of time. Your monthly payment will be applied to the balance of your loan, as well as to interest charged by the lender. Once you’ve made all loan payments as agreed, you’re the owner of the food truck and can keep it, trade it in for a new truck, or sell it outright if you choose.

If you have an established food truck business, a loan may be the best option for you. Once you pay off your loan, you’ll own the vehicle free and clear and can use it in your business as long as you need.

If you don’t have collateral, it’s no problem. For most equipment and vehicle loans, the equipment being purchased — in this case, your food truck — will act as the collateral.

On the other side of the coin is food truck leasing. When you lease a food truck, you’re essentially renting it. A lease does have a few similarities to a vehicle or equipment loan. With a lease, you are required to pay a down payment. After paying your down payment, you can put the food truck into service.

When you sign a lease, you agree to make monthly payments over a period of time — usually 2 to 3 years. Once your lease ends, you can return the vehicle and sign a lease on a new truck. Some lenders may also give you the option to pay a lump sum at the end of your lease to purchase the truck.

When should you consider a lease over a loan? If you’re new to the industry, a lease may be the better option for you. If things go pear-shaped and you decide to not move forward with your business, you can simply return the truck at the end of your lease. A lease is a good option when you’re not yet sure if you’re in this business for the long haul.

If you’re short on funds for a down payment, a lease may also be the better choice. In many cases, leases have lower down payment requirements. You may also score lower monthly payments with a lease.

However, if you do plan to use your food truck for a longer period of time, purchasing your equipment with a loan is a wise move. While a lower down payment and lower monthly payments are more cost-efficient over the short-term, a lease is often more expensive over the long term.

Still stuck between a loan and a lease? Learn more about equipment loans and leases to make the right decision for your business.

Recommended Option: Lendio

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Lendio is an online loan aggregator that connects you with a network of lenders that best fit your financial needs. One of the options that you can apply for through Lendio is equipment financing.

With equipment financing, you can receive between $5,000 and $5 million for the purchase of your food truck. Interest rates through Lendio’s network start at 7.5% for the most creditworthy borrowers. The proceeds from your loan can be used to purchase a new or used food truck. You can also use equipment loans to purchase other equipment for your business, such as a new grill or a point-of-sale system.

To qualify, you must have a credit score of at least 650. If your score is lower, you may still be able to receive equipment financing through Lendio provided you can show proof of solid cash flow and revenue over the last 6 months. You must also have a minimum of $50,000 in annual revenue and a time in business of at least 12 months.

Working Capital

You just can’t operate a successful business without working capital — money that is used to cover your daily operating expenses. Even though the average daily expenses of a food truck — think fuel for your vehicle, payroll, and other operating expenses — are far less than the operating costs of running a restaurant, they can still pile up.

The money you make from selling your food should cover your daily operating costs and add to your profits, but what happens when you fall a little short? Unexpected expenses, a slow season, or other hurdles can pose a challenge to your business and leave you short of the working capital you need.

If you need working capital, there are a variety of financing options to consider, but one of the most affordable is a loan from the Small Business Administration.

SBA Loans

SBA loans come with low interest rates and favorable, flexible terms for small business owners. Even if you’ve been turned down for a traditional bank loan in the past, you may qualify for an SBA loan. The SBA guarantees portions of each loan. This takes the risk off SBA lenders — known as intermediaries — and opens up affordable business loan options for entrepreneurs.

SBA loans are a preferred choice for many small business owners because they have low interest rates, long repayment terms, high borrowing limits, and can be used for nearly any business purpose, including working capital.

Recommended Option: SmartBiz

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One of the drawbacks of applying for an SBA loan is how lengthy and difficult the process can be. Finding the right lender, gathering the required documentation, and waiting for approval can take weeks — or in some cases months.
If the challenge of receiving an SBA loan has held you back from applying, there’s an easier option to consider: SmartBiz. This online lender specializes in simplifying SBA loans from the prequalification stage to approval and funding.

Through SmartBiz, you can apply for SBA working capital loans from $30,000 up to $350,000. These loans have a variable interest rate — the base rate plus 2.75% to 3.75% –, making the total interest rate between 8% and 9%.
Your working capital loan can be used in many ways, whether you need to purchase inventory or equipment, hire staff, cover operating costs, or even refinance existing debt.

To qualify, you must be a U.S. citizen or permanent resident. You must also have a time in business of at least 2 years and show proof that you have sufficient cash flow to cover your monthly loan payment. All borrowers applying through SmartBiz must also have a credit score of at least 640. Your credit report should be free of bankruptcies or foreclosures within the last 3 years, defaults on government loans, and outstanding tax liens.

SmartBiz offers a prequalification tool that makes it easy to see if you’re eligible for an SBA loan. The form takes just 5 minutes and will automatically tell you if you qualify to apply. If you do, you can proceed with the application and receive funds as quickly as 7 days after completing your application. If you don’t qualify, SmartBiz can connect you with lenders that offer non-SBA loans that could help with your working capital challenges.

Supplies & Inventory

KDS Kitchen Display System

Running a food truck requires keeping supplies and inventory on-hand at all times. From paper products to food, there are a number of supplies that you need to keep your business operating smoothly. These expenses are recurring, and while your profits should be enough to pay for supplies and inventory, this isn’t always the case.

Whether you have a seasonal increase in sales that require more supplies and inventory or you have cash flow issues that have left your bank account lower than usual, sometimes you need a financial boost. If you need financing to cover the costs of supplies and inventory, a line of credit can help.

Lines Of Credit

A line of credit is a flexible financing option to cover business expenses. When you receive a line of credit, a lender will provide you with a credit limit — the maximum amount you can borrow. You can make multiple draws up to and including this credit limit. Once you initiate a draw from your line of credit, the funds are transferred to your bank account. Most lenders transfer funds immediately, and you can access them as soon as the next business day. Some lenders even have options that give you access to your funds within just minutes.

Once you’ve made a draw on your line of credit, you will make regularly scheduled payments to the lender, which will be used to pay off the balance as well as fees and/or interest charged by the lender. As you pay off your balance, funds will become available for you to use again.

You can use a line of credit to purchase your inventory and supplies as needed. Whether you’re facing a planned expense or a completely unexpected emergency, a line of credit gives you the flexibility you need to make sure you can continue to serve your customers without a hitch.

Recommended Option: FundBox

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Fundbox is a popular option for businesses seeking a line of credit because of its lenient requirements. Even if you’ve had credit challenges in the past, it doesn’t matter with Fundbox. This company takes the performance of your business into account when issuing lines of credit.

Through Fundbox, you can be approved for a line of credit up to $100,000 that can be used for any business purpose. If you have a low personal credit score, it isn’t a problem. There are no credit requirements to qualify for a Fundbox line of credit. However, you do need to have at least $50,000 in annual revenue, a business checking account, and a business that is based in the United States. Additionally, you must grant access to your accounting software so Fundbox can analyze the performance of your business. If you don’t use a supported accounting software, you can also submit business bank statements from the last 3 months.

Once you’ve been approved for a line of credit, you can initiate draws into your business checking account. With each draw, a fee will be charged. Fees start at 4.66% of the amount drawn. You will receive your funds in your account as quickly as the next business day. Repayment terms are 12 or 24 weeks, and payments are made weekly through ACH debits. If you repay your loan early, all remaining fees are waived.

Hiring & Covering Payroll

Hiring new employees means that your business is expanding, but this expansion comes at a cost. Or maybe you’re facing a completely different situation and you’re struggling to meet your current payroll. Whether you’re adding to your crew or just trying to overcome a financial hurdle to cover payroll, there are financing options to consider, including installment loans.

Installment Loans

An installment loan provides you with a lump sum of money that is paid back through regular payments over a set period of time. Each payment will be applied toward the balance of your loan, as well as toward fees and/or interest charged by the lender.

Your fees and/or interest will vary based on the lender you select and factors such as your personal credit score. The more creditworthy you are, the more affordable your loan will be. Repayment schedules may be daily, weekly, or monthly depending on the policies of your lender.

If you choose an installment loan to cover hiring or payroll costs, you need to run some calculations before you apply. Since you receive a lump sum, calculate how much you need to cover payroll or how much it will take to hire new employees to ensure you request enough money. If you’re unsure of how much money you need, consider applying for a line of credit or another form of flexible financing.

Recommended Option: StreetShares

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If you need an installment loan, you can apply for $2,000 to $250,000 through StreetShares. Repayment terms are between 3 and 36 months with APRs of 7% to 39.99%. A closing fee of 3.95% to 4.95% is added to the cost of your loan. Repayments on your loan are made weekly.

If you want a more flexible option, you can also receive a line of credit from StreetShares. You can receive between $5,000 and $250,000 with repayment terms between 3 and 36 months. A draw fee of 2.95% is charged for your loan, and APRs are between 7% to 39.99%.

To qualify for a term loan or line of credit with StreetShares, you must be in business for at least 1 year. A minimum revenue of $100,000 per year is required, as well as a personal credit score of at least 620.

Cash Flow Shortages

A cash flow shortage can negatively affect your entire business. Without sufficient cash flow, you’re unable to cover your daily operating expenses, pay your bills, or serve your customers. You lose profits, resulting in even more cash flow problems. Before you know it, your cash flow issue has spiraled out of control.

Cash flow shortages can occur at any time. In the food truck industry, for example, colder winter weather may affect the number of customers you have. Fewer customers mean less cash … and an increased chance of cash flow shortages.

Before you get to that point, take control of your finances by covering cash flow shortages with a short-term loan.

Short-Term Loans

With a short-term loan, you receive the cash that you need quickly and pay it back through regular payments over a set period of time. While some short-term loans come with repayment terms of 12 months or less, some lenders offer up to 3 years to repay your loan.

Many lenders do not use a traditional interest rate for short-term loans. Instead, these lenders opt to use a factor rate. This is a multiplier that determines the fixed fee added to your loan. Let’s say that you borrow $10,000. The factor rate is 1.3. Multiply the borrowing amount times the factor rate to find the total repayment. In this example, the total is $13,000. This means that your fixed fee for borrowing is $3,000. Learn more about factor rates and how they’re used to determine the cost of your loan.

A short-term loan is a good option when you know exactly how much money you need. If you need a more flexible option, consider applying for a line of credit or business credit card.

Recommended Option: OnDeck

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With OnDeck, you can apply for business loans up to $500,000. There are two different options to consider: short-term loans and long-term loans.

OnDeck’s short-term loans have repayment terms of 3 to 12 months with simple interest rates as low as 9%. This means that your interest rate is calculated as a percentage of your loan amount. For example, if your loan of $20,000 has 10% simple interest, you will pay $2,000 in interest.

OnDeck also has long-term loans with repayment terms of 15 to 36 months. Annual interest rates start at 9.99%.
An origination fee is also added to the cost of your loan. For your first loan, you will pay 2.5% to 4% of the total loan amount. Second and subsequent loans qualify for lower origination fees. All loans are repaid daily or weekly through automatic ACH withdrawals.

To qualify, your company must be in business for at least a year. You need at least $100,000 in annual revenue. Your personal credit score must be at least 500.

If you’re looking for a more flexible financing option, OnDeck also offers lines of credit up to $100,000 with APRs starting at 13.99%. To qualify, your company must be in business for at least a year and have $100,000 in annual revenue. You must also have a credit score of at least 600 to receive an OnDeck line of credit.

Emergency Funds

Your food truck is in need of repairs. Your equipment has suddenly given out and needs to be replaced. An unexpected expense has come out of nowhere and has turned your finances upside down. When an emergency arises, don’t panic. Know that there are emergency loans and other financing options available to help you overcome financial hurdles.

In an emergency, you need access to funds quickly. You don’t have days or weeks to wait for a loan approval. In these situations, a business credit card could help.

Business Credit Cards

Once you’re approved for a business credit card, you can put it into action immediately. You don’t have to wait for approval from the lender each time you use your card. If a sudden emergency pops up, your credit card is ready to use. You can use it to pay your suppliers or vendors, pay a bill, cover food truck repairs, or for other business expenses.

When you receive a credit card, the issuer will set a credit limit. You can spend up to and including this limit anywhere credit cards are accepted. Each month, you’ll make a payment that will be applied toward the principal balance and the interest charged by the lender. As you pay off your balance, your credit will become available to use again.

If you apply for a credit card for your business, make sure to compare interest rates and to read all of the fine print. Many cards come with introductory APRs that increase at a later date so make sure you’re aware of all terms for your card. You may also consider applying for a rewards card, which provides you with cash back or points to use for perks and benefits each time you use your card.

Recommended Option: Chase Ink Business Unlimited

Chase Ink Business Unlimited


chase ink business unlimited
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Annual Fee:


$0

 

Purchase APR:


15.24% – 21.24%, Variable

With Chase Ink Business Unlimited, you can earn unlimited 1.5% cash back with every business purchase. This card comes with a 0% introductory APR for the first 12 months, followed by a 15.24% to 21.24% variable APR. There’s no annual fee, and you can even receive $500 cash back after spending $3,000 within the first 3 months of opening your account.

To qualify for the Chase Ink Business Unlimited, you must have good to excellent personal credit. Unsure if the Chase Ink Business Unlimited is right for you? Check out other credit card options:

  • Compare Chase Ink Business Credit Cards
  • Best Business Credit Cards For Good Credit
  • Top Business Credit Cards For Fair Credit

When You Want To Start A Food Truck Business

The financing options previously discussed are great for established businesses, but what about food truck startups? Time in business requirements, annual revenues, and business credit scores are required for many loans, so what’s your next move if you fall short of these requirements?

New businesses and startups may not have as many financing options as established businesses, but there are options out there if you know where to look.

For example, you may not qualify for an SBA 7(a) loan, but you could get a smaller loan through the SBA Microloans program. Through nonprofit intermediary lenders, you could receive up to $50,000 to cover startup costs for your new food truck business. Although the maximum borrowing amount is $50,000, the average loan distributed through this program is $13,000, so this is an option that is best for startups with lower capital needs.

Sometimes, you may even have to get a little creative with your financing. Consider crowdfunding to raise money for your business. With crowdfunding, you’ll use an online platform to raise money to fund your startup costs. Investors will invest money in your food truck business in exchange for equity or a reward of your choosing. Your crowdfunding campaign can be a success if you effectively spread the word about your business through social media and other online outlets and offer equity or rewards that are enticing to investors.

If you have good credit, look beyond business loans and consider taking out a personal loan. Your personal income and credit score will be the main qualifying factors with a personal loan. With this option, you can receive very competitive interest rates and terms on a personal loan that can be used to fund your new food truck business. Learn more about using a personal loan for business.

Friends and family that are willing to invest may also be a financial option for your new business. If you receive a loan from your friend or family member, make sure that everything is in writing and that you pay as agreed, just as you would with any other lender.

Bad Credit? Your Best Food Truck Financing Options

Chart of Accounts

If you have a low personal credit score, your financing options are limited. Your low score will also result in higher interest rates and a higher overall cost of borrowing. Instead of being stuck with these higher costs and less desirable financing options, the smartest financial move is to build up your credit.

Know where you stand by applying for your free credit score and report online. Review your credit report for any errors and dispute any erroneous information to have it corrected or removed. Continue paying all loans, credit cards, and other debts as agreed. With a few easy steps, you can boost your credit score. With a higher score, you’ll be able to qualify for better, more affordable loans and financing.

If you’re in a hurry to receive money, waiting for months (or even longer) to build your credit score may not be an option for you. If you need financing quickly, there are options, but be aware that these options come at a higher cost.

If you have bad credit but your business is performing well, consider applying for a line of credit. Lenders like Fundbox and Kabbage consider the performance of your business — not your credit score — as the most important qualifying factor. With these lenders, simply fill out a short form with your personal information, then link your business accounts and/or accounting software to see how much you qualify to receive. Once approved, your line of credit is available to use immediately.

Another type of financing available to borrowers with bad credit is a merchant cash advance. When you receive a merchant cash advance, you receive a lump sum of money in exchange for future revenue. The merchant cash advance company uses a factor rate to add a fixed fee to the total amount borrowed. The money is then repaid through daily ACH withdrawals, although some providers offer weekly or monthly repayments.

With MCAs, you may have fixed or variable repayments. With some providers, the amount you pay never changes. With others, the amount you pay is based on a percentage of your sales. When you have higher sales, your payment is higher. When sales are down, your payment is lower. What you pay depends on the agreement you sign with your provider.

It’s important to proceed with caution when receiving an MCA. Financial experts advise against this type of financing due to the high costs and short repayment terms, which could lead to more debt. If you have a low credit score and no other financing options, carefully weigh out the pros and cons before signing a contract with an MCA provider.

There are also alternative lenders online that are willing to work with borrowers with credit challenges. Shop around, compare your options, and make sure that your return on investment justifies the cost of taking out an alternative loan.

What You Need To Apply For Food Truck Financing

When you apply for food truck financing, what you need to apply is based on the type of loan you’re applying for and the lender you’re working with. At the very least, you’ll need to fill out an application providing personal information including:

  • Full Legal Name
  • Legal Business Name
  • Contact Information: Phone number, email address, mailing address
  • Federal Tax ID
  • Social Security Number
  • Annual Revenue

For some types of financing, like lines of credit and business credit cards, little more is needed. However, loans such as equipment financing and SBA loans may require additional information and documentation, including:

  • Business & Personal Bank Statements
  • Business & Personal Income Tax Returns
  • Balance Sheet
  • Profit & Loss Statement
  • Business Plan
  • Financial Projections
  • Resumes For All Business Owners
  • Debt Schedules

Requirements vary and a complete list of all required information and documentation will be provided by your chosen lender.

Final Thoughts

Running a food truck can be extremely lucrative, but like any other business, you may encounter financial challenges. When this occurs, just know that there are loans and financing that can be used to cover unexpected expenses, expand your business, or even start a new business.

Understand the types of financing available to your business, shop around for the best rates, and make all payments as agreed to open up future financing opportunities and to prove yourself as a responsible borrower and business owner.

The post Business Loans For Food Trucks: Best Financing Options appeared first on Merchant Maverick.

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The Best Medical Practice Business Loans And Financing Options

Doctors are among the top-paid professionals in America, but the cost of doing business sure isn’t cheap. There’s the pricey medical equipment, medical licensing costs (not to mention the cost of medical school to earn those licenses!), malpractice insurance, practice management software, medical association fees … and the list goes on. On top of the steep expenses associated with running any type of medical clinic, the slow nature of insurance reimbursements means you are often not even paid for your services in a timely manner.

On the bright side, doctors and other medical professionals are prime candidates for business financing, as they have low default rates and plenty of business collateral in the event that they do default. Whether you decide to go through a bank or an alternative (online) lender will depend partly on your qualifications as a borrower and partly on what you need the loan for. In this post, I explore which types of loans and specific lenders are best suited for different medical practice loan purposes.

Financing Need Best Loan Type Recommended Lender
Building a new clinic Bank loan Lendio
Purchasing medical equipment Term loan or Equipment financing OnDeck
Working capital Term loan or Line of credit Fundation
Practice expansion SBA loan SmartBiz
Hiring & payroll Business line of credit Kabbage
Cash flow shortages Business credit card Ink Business Preferred From Chase
Emergency funds Short-term loan LoanBuilder

Best Loan For Building A New Medical Clinic

Private practices looking to open a new medical clinic will sometimes need a business loan to build and open their clinic, including both construction and other startup costs. In order to take on such an endeavor, you will likely need a large sum of money that will, in many cases, exceed the amount of capital you could feasibly borrow from an online lender (online lenders’ borrowing limits tend to max out around $500K). Even if you are moving into an existing building, you’ll need a sizable loan to outfit your new clinic with equipment, insurance, staff, etc.

Bank Loan

A bank loan is usually going to be the best option to open a brand-new medical clinic. Bank of America, US Bank, Wells Fargo, and many other banks and credit unions across the country offer specialized loans for medical practices, in large amounts that can cover the cost of a new construction.

This is a good option for doctors who can wait up to several months to get a long-term loan to finance their new office or clinic. To qualify for a bank loan, you’ll need strong business credentials and a down payment, but if you are in the position where opening your own medical clinic is the next logical step for you, you probably already have these qualifications.

Recommended Option: Lendio

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Although Lendio is technically an online lending service, they connect borrowers with bank loans as well. Their partners include both big banks and credit unions, making it easy to borrow as much as $5 million to build and open your new medical clinic. Lendio does not originate loans; rather, they serve as a one-stop shop for business financing by connecting borrowers with appropriate lenders in on online marketplace.

Lendio is a good option for medical practice construction loans, as Lendio will shop your request around and present the best loan offers, so you can easily compare offers and decide on the best loan for your business.

To learn more about commercial construction loan options, read Commercial Construction Loans: The Ultimate Guide.

Best Loan For Purchasing Medical Equipment

Often, medical practices need to purchase medical equipment but don’t have the capital to buy the equipment outright. Some reasons for needing a medical equipment loan could include replacing broken equipment, investing in new technologies, buying equipment to expand your services, replacing outdated equipment to meet new industry regulations, or buying equipment to outfit a new practice.

Term Loan Or Equipment Financing

There are various ways to finance a major equipment purchase, but two common financing types for this purpose are term loans and equipment financing. A term loan is a traditional installment loan wherein borrowers receive a lump sum that is repaid in installments over a period of several months to years, depending on the term length. You can obtain a term loan from either a bank or an alternative/online lender; if you are purchasing multiple pieces of equipment for a new practice, or a very costly item such as an MRI machine, you may need to pursue a bank loan.

Equipment financing is another way for medical businesses to purchase equipment and is also suitable for very large equipment purchases, such as a CAT scanner. This type of financing includes both leases and loans, and is typically self-securing, meaning it doesn’t require any collateral other than the equipment itself. Leases are a more expensive way to secure equipment, as you do not own the equipment at the end of the term—but if your borrower qualifications (credit score, time in business, etc.) are weak, this type of financing is easier to get than an equipment loan or term loan.

Recommended Option: OnDeck

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OnDeck offers fast, easy, short-term business loans that work great for one-time purchases such as medical equipment for a new or existing practice. This online lender originates loans of up to $500K, with term lengths of up to 3 years. To prequalify, you only need 12 months in business and $100K in revenue. Having poor credit may not be a problem, but more qualified applicants will receive lower interest rates.

With a time to funding of just a few days, an OnDeck loan is especially useful when you need to replace broken medical equipment ASAP and can’t wait a month or two for a bank loan to come through.

If you prefer to go the equipment financing route, check out our chart of the best equipment financing lenders.

Best Loan For Working Capital

Best Time Tracking Integrations

Working capital, i.e., money to run your day-to-day business operations, is the lifeblood of any business—especially for doctors, who might have to wait long stretches between insurance reimbursements. Whether you work as a surgeon, dentist, chiropractor, dermatologist, spider vein specialist, or any other type of doctor, you coffers need to be full even if your appointment book is also full.

Term Loan Or Line Of Credit

A term loan is always an option for working capital, and many online lenders offer loans with “working capital” right in the loan description. A term loan is suitable for short- or medium-term working capital needs. A working capital (term) loan is a good “general” type of business loan to have if you have various expenses you need to cover in the near-future.

A line of credit is another option, and one more suited for long-term working capital needs. With an LOC, you can withdraw cash only as needed and only need to repay what you borrow. You can think of a line of credit as a sort of “cash cushion” to tide you over during short times, even if you don’t know if or when those slim times will arise.

Recommended Option: Fundation

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Fundation offers installment loans up to $500K and lines of credit up to $100K to shore up your working capital funds. Term loans are repaid on a bi-weekly basis, while lines of credit are repaid monthly. You will need to have an established business with at least 3 full-time employees (including yourself) in order to apply, so not all businesses will qualify. But if you meet the qualifications, Fundation is one of the highest-quality loan/LOC providers online, with competitive terms, excellent customer service, no prepayment penalty, and a time to funding of only 2–7 days.

To learn about more working capital loan options, read Working Capital Loans: What They Are And Where To Find Them.

Best Loan For Medical Practice Expansion

When it’s time to expand your medical practice by opening a second clinic, it’s also likely time to take out another loan. Whether you are constructing or purchasing a new office space to see patients, you are likely a very qualified borrower at this point in terms of your revenues, time in business, collateral, etc. Thus, you can likely qualify for a high-quality loan from a bank or from the SBA (if you don’t yet exceed their size and income requirements).

SBA Loan

SBA loans have the best rates, and if your business has strong qualifications as most expanding medical practices do, the SBA will be keen to lend to you. According to 2016 SBA data, dentist offices and medical offices (excluding mental health specialists) are respectively the third and fifth top recipients of SBA loans in terms of number of loans. Medical practices have a low default rate and lots of collateral in the event that the borrower does default. Therefore, an established private practice that wants to expand to a second office is a prime candidate for an SBA loan, such as a general 7(a) business loan or a CDC/504 loan.

Depending on which type of SBA loan you apply for, you can use the proceeds to purchase an existing building or land or construct new facilities. You can also use the funds to buy equipment for your new offices or to renovate an existing building. However, it’s important that you’re not overqualified. For example, to qualify for an SBA CDC 504 loan (commercial construction loan), you must have a tangible net worth of less than $15 million and an average net income of less than $5 million. If your practice is larger than this, then you’ll need to secure a regular bank loan.

Recommended Option: SmartBiz

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SmartBiz is an online marketplace offering a fast and efficient way to get an SBA loan, including commercial real estate loans. Through SmartBiz, you can get an SBA loan of up to $5 million, without having to do as much paperwork or wait as long as you would for a standard SBA loan (several months). This online-SBA loan hybrid isn’t as quick as a lot of other online lenders, potentially taking about a month for funds to come through, but it’s still a lot faster and easier than applying for an SBA loan the traditional way.

If you want to know more about your options for getting an SBA loan to open a second doctor’s office, you can read up on SBA loans for real estate. If you are expanding your practice by acquiring another medical practice, I recommend you read my post on how to get a business acquisition loan.

Best Loan For Medical Clinic Hiring & Payroll

Medical clinic payroll loans are sometimes necessary when you’re in a pinch and need to pay your staff but don’t have enough cash on hand. Similarly, you might take out a loan to hire a doctor or specialist that will add considerable value to your practice. A loan may be especially crucial if a key staff member or practice partner quit abruptly and you need to hire a replacement fast.

Business Line Of Credit

As mentioned earlier, a business line of credit can act as a “cash cushion” to draw from when you’re short on funds. Even if business is slow, you still need to pay your staff, and an LOC lets you transfer funds to your business bank account immediately. Similarly, you can use this capital to take on a short-term or unexpected staffing expense such as hiring a new specialist. Even if you’re not currently having an issue funding the payroll, it’s important that you have a source of funds available to help fill any gaps that could arise.

A short-term loan is also an option for a payroll emergency, but an LOC is more appropriate for ongoing expenses such as payroll.

Recommended Option: Kabbage

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It’s wise to plan ahead a bit so that you already have the LOC in place before you need to draw from it to fund the payroll. However, life doesn’t always work out so neatly. If you’re having problems paying your staff, you’re likely in a desperate, if not dire, situation and need money ASAP if you want to keep your practice open. To help you out in such times, Kabbage has one of the fastest LOCs in the business; in many cases, medical practice owners can apply, receive a funding decision with personalized rates and fees, and start drawing funds within just a few minutes.

Kabbage can also be used for other working capital needs for your medical practice and is a terrific option if you don’t have great credit, as they consider your business performance in lieu of your credit history. However, the rates and fees can also be pretty high, so if you have strong credit and/or some time to wait for funds to come through, you might get cheaper capital through a lender like Fundation.

Best Loan For Cash-Flow Shortages

Cash-flow shortages can happen to any of us, but doctors are especially vulnerable to them due to slow insurance reimbursements. Usually, you know payments are coming through eventually, but you have gaps during the month or year when cashflow is not as strong as you need it to be to support various daily and periodic business expenses.

Business Credit Card

Credit cards work well for smoothing out cash shortages for a business’s day-to-day expenses, because you can charge both large and small expenses, and also earn reward points or cash-back while you’re at it. Even better, if you’re able to pay off your balance with each monthly statement, you aren’t charged any interest or fees at all except for a small annual fee. With timely payments, you’ll also help build your business’s credit profile.

Credit cards are also good for cashflow gaps because unlike most short-term loans where you have to make payments on a weekly or even daily basis, credit cards let you make monthly payments. If you’re looking to charge a large expense and don’t expect you’ll be able to pay it off in the near future, you might even be able to find a card with a 0% APR introductory rate for the first year.

Recommended Option: Ink Business Preferred From Chase

Chase Ink Business Preferred



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Annual Fee:


$95

 

Purchase APR:


17.99% – 22.99%, Variable

This is one of the most popular business cards on the market, and for good reason. Medical professionals and other business owners earn extra points (redeemed for cash or milage) for common business expenses such as internet, phone, advertising, and travel. Some other perks include a signup bonus, additional cards for employees at no extra cost, and cell phone protection.

Ink Business Preferred from Chase is particularly useful if you or your staff need to travel to medical conferences to learn about the latest treatments in your field or give presentations. But even if you don’t travel much, the card still rewards you for standard business purchases including online advertising, which most doctors and dentists spend a lot of money on. At the same time, you’ll also be able to solve your problem by covering cashflow gaps.

Note that you do need to have at least “good” credit to get this credit card. Check out our business credit card comparison page to compare Chase’s business credit cards and others. Or, if you need more money than you can access with a credit card, look at some cash flow loan options.

Best Loan For Emergency Funds

Lawsuits, acts of God, vandalism, and theft are just a few types of emergencies your medical practice could face. Malpractice lawsuits are an especial risk for doctors — particularly those in certain fields, such as cosmetic surgery. Malpractice insurance may not cover all of these costs, unfortunately, in which case you’ll need to take out a loan.

Short-Term Loan

Emergencies need fast solutions, and the fastest solution is a short-term loan. Though the borrowing rates are higher than a long-term loan, a short-term loan is easier to qualify for and you’ll get the money in just a few days. If your business was damaged physically or financially by a natural disaster, you might also be eligible for an SBA Natural Disaster Loan.

If you’re only getting the loan to protect yourself against a possible emergency in the future, a line of credit card or business credit card would be a more appropriate option than a short-term loan.

For further reading, check out Emergency Business Loans: 7 Ways To Get Business Funding Fast.

Recommended Option: LoanBuilder

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LoanBuilder stands out from most short-term lenders for a few key reasons: LoanBuilder loans are relatively inexpensive (for a short-term loan), there is no origination fee or any other up-front fees, and borrower requirements are low. LoanBuilder allows you to “build” your perfect loan, letting you adjust to your liking the loan amount and term length and seeing how those adjustments affect your loan’s total cost and weekly payment amount.

Note that voluntary health organizations (nonprofit medical centers) are among LoanBuilder’s restricted industries, so you’ll need to own a for-profit medical practice to apply for this loan.

We hope that your emergency does not exceed $500K, which is what LoanBuilder and most other short-term lenders max out at. For a big, BIG emergency, you can use a service like Lendio to search for loans of up to $5 million.

Do Banks Offer Medical Practice Business Loans?

Banks do, indeed, offer medical practice business loans. You can use a business loan from a bank or credit union to open a new practice, expand your current practice, buy equipment, access working capital, or cover just about any other medical business need. However, bank loans can be difficult to qualify for if you don’t have at least two years in business, on top of strong revenues and excellent credit. Thus, a bank loan is best for established medical practices that wish to borrow a large sum to expand their clinic or build a new one. As mentioned previously, it is possible for new practices to qualify for a bank loan (to build a new clinic, for example), but you’ll have to have strong business credentials and enough money for the down payment.

Some bank loans are SBA loans, which means the loan is guaranteed by the U.S. Small Business Administration. These loans are some of the best loans you can get, as they have both low rates and fair terms.

If you need a smaller amount of money, say $10K–$50K, or you don’t have the rock-solid borrower credentials banks like to see, it’ll be easier and faster to get a loan from an alternative/online lender.

Pros Of Bank Loans:

  • Lower interest rates and longer repayments terms (compared to an online lender), especially if you qualify for an SBA loan
  • Access to large amounts of capital for major investments such as building a new clinic or acquiring commercial real estate
  • Banks may be willing to overlook medical school debt
  • Some specialized medical practice loans are available

Cons Of Bank Loans:

  • Long application process involving lots of paperwork
  • Requires (likely multiple) in-person visits to the bank
  • Can take months for money to come through even after approval, due to a lengthy underwriting process
  • Can be difficult for newer practices to qualify for

On the other hand, an online lender can offer:

  • Quick and painless application process
  • Access to capital within the same business week
  • Only need fair credit, modest revenues, and 6 months-to-1-year in business to qualify
  • Can borrow small amounts of money, as little as $5K

Something else to consider when deciding between a bank business loan vs. an online business loan is that doctors tend to be well-qualified and have their pick of financing options. So, a medical professional taking out a loan will usually pay lower interest rates than would a borrower from another industry. This means that even though online loans tend to be more expensive in general, a doctor might pay only slightly higher rates for an online lender than they would for a bank loan, and without having to jump through all the extra hoops required to get a bank loan.

What To Consider When Choosing A Lender

Some important things you’ll need to consider when choosing a lender are as follows:

  • How much money you need
  • Which loans you qualify for
  • The loan’s fees and repayment terms
  • How much and how often your loan payments will be (and whether you can afford them)
  • Whether you’re willing to pay a little extra for the convenience of an online loan

In order to find out all the important information you need to make an informed decision, you will need to apply for multiple loans so you can compare their offers. It’s easy to prequalify for most online loans within minutes; if you are pre-approved, the lender will present you a loan offer with the rate they’re willing to give you based on the information you’ve supplied. In many cases, getting pre-qualified will not affect your credit score at all. (You’ll need to supply more information about your business and agree to a hard-pull on your credit only if you accept the offer.)

Like I mentioned earlier, you can use an online loan matchmaker service to save time and pre-apply to various loans at once. This is also a good way to figure which loans are appropriate for your financing needs if you have no clue where to start.

What You’ll Need To Apply For A Medical Practice Loan

Before you apply for any loan, you’ll first want to check your credit score to make sure there are no major issues. If you have a little time to improve your personal credit score and your business credit score (if you have one), polish up that credit to the best of your ability. Next, it’s time to start pre-applying!

When you pre-apply for a loan, you’ll usually just need to supply a few pieces of information, such as:

  • When you started your medical practice
  • How much money you need
  • How soon you need the money
  • What you need the loan for

The lender will generally check your credit at this time. In many cases, this will be a “soft pull,” which will not affect your credit score. However, if in doubt, ask customer service before applying if pre-qualifying will affect your score.

Some other key pieces of information and documentation you need, possibly a little later in the application process, are:

  • Your Tax ID number (EIN) and Social Security number
  • Documents to verify your identity
  • Recent personal and business federal tax returns
  • Average bank balance with recent business bank statements
  • Estimated annual gross revenues
  • Proof of business ownership
  • Copy of medical license and other relevant licenses and permits
  • Proof of insurance
  • Total outstanding business debts
  • Financial statements, such as P&L and balance sheet

The exact application requirements and documents vary from lender to lender, and as you might have guessed by now, you’ll need to supply a lot more information and documentation if you are applying for a bank loan or SBA loan. Online loans, by contrast, require a lot less. To qualify for a Kabbage online line of credit, for example, you’ll just need to give the lender read-only access to your business bank account.

Here are some useful references for further reading so you can learn more about applying for a business loan for your medical practice:

  • Small Business Loan Requirements: What You Need To Apply
  • 20 Tips To Improve Your Business Loan Application
  • How To Get A Small Business Loan: The Step-By-Step Guide

Final Thoughts

Most doctors who go into private practice will need a loan at some point in their career. With medical business financing, you can keep your practice as healthy as you keep your patients, even during slow or uncertain times. You can also use business financing to expand your growing medical practice, making timely investments that will take your practice to the next level.

In general, financial institutions love to lend to doctors, who typically have strong cash flow and are unlikely to default on their debts. Even if you have middling credit and medical school debt, you still probably have plenty of choices when it comes to financing your practice. The growing availability of alternative lenders in recent years provides even more choices, even for medical professionals with a tattered financial past.

The most important thing when obtaining a loan for your medical practice is to consider all of the financing options available and determine which is best for your particular needs. If you follow all the advice I’ve outlined for you in this article, you will be well on your way to securing a high-quality loan to help build your dream practice.

The post The Best Medical Practice Business Loans And Financing Options appeared first on Merchant Maverick.

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The Best eCommerce Platforms For Your Small Business

Selecting the best ecommerce platform for building your online store can be tough. I find it helpful to keep in mind that shopping for this type of software is similar to shopping for any other product (you just happen to be shopping for shopping cart software, which I’ll grant is slightly strange). You ultimately need your ecommerce software to do two primary things: to serve your particular online selling needs, and to accomplish this for an affordable price.

If you’ve heard of any ecommerce software up to this point, you’ve probably heard of a platform called Shopify. Shopify often receives top billing in this category, and with good reason. Still, it’s by no means the perfect solution for everyone. Along with Shopify, we’ve compiled a few other great options worth considering in your search for an online home for your store.

Shopify BigCommerce 3dcart Ecwid Wix

3dcart

Review Visit Site

Review Visit Site

Review Visit Site

Review Visit Site

Review Visit Site

Monthly Cost

$9 – $299

$29.95 – $249.95

$19 – $229

Free – $99

$25 – $40

Core Features

Great

Excellent

Excellent

Good

Good

App Store

Very Large

Large

Moderate

Moderate

Small/Moderate

Ease Of Use

Very Easy

Easy

Moderate

Very Easy

Easy

Web Design

Great

Good

Good

OK

Excellent

Customer Support

Great

Great

Good

Good

Good

From a bird’s-eye view, our main reasons for recommending these platforms are user-friendliness, a solid feature set, and an accessible price. Notice that they’re also all SaaS (Software as a Service) platforms, meaning you are not responsible for downloading, installing, and hosting the shopping cart on your own server. Instead, you subscribe to the service (most often for a monthly fee), and all the hosting and software updates that underpin your online store are automatically handled for you. Easy! eCommerce software has been trending in this direction over the past several years, and the available SaaS options have only become more robust and customizable over time.

What To Look For In An Ecommerce Platform

Before we discuss the individual recommendations further, here’s a quick overview of the key factors we consider when evaluating ecommerce software:

  • Pricing: How does the monthly subscription system work (what factors determine the different pricing levels), and what are the options/costs associated with accepting payments from shoppers?
  • Features & Add-ons: How strong is the core feature set of the software, and how well can these features be expanded upon using the platform’s associated app marketplace?
  • Ease Of Use: How steep is the learning curve for ecommerce beginners (particularly those without any coding experience)? What is the balance between user-friendliness and the capability of the platform to accomplish both basic and advanced tasks?
  • Web Design: How attractive, modern, and functional are the available theme templates for designing storefronts? What customization options are available, and how robust/flexible are these tools?
  • Customer Support: What is the availability and quality of email, live chat, and phone support for the software, along with any other self-help resources provided by the company and user community?

And, of course…

  • User Reviews: What are real store owners (like you!) saying about the software, both good and bad?

That’s our basic guideline. Now, we’ll take a closer look at each platform, highlighting the main benefits and drawbacks of each one, along with the types of online sellers we think the software typically suits best. We’d definitely recommend reading our full review of each platform before making your final choice. We’ve also posted one-on-one comparisons for several of the platforms if you’d like to check out those in-depth articles as well.

1. Shopify

As mentioned, Shopify is our most commonly recommended ecommerce platform. The combination of strong core features, an exhaustive app marketplace, and high ease-of-use put Shopify at or near the top of most SaaS ecommerce platform rankings.

Pricing

There are technically five Shopify plans, but the three subscription levels in the middle are considered the standard options for most SMB owners needing an online store. The price jumps between the three middle plans are based primarily on additional features and the ability to set up more staff accounts. Here are all five levels:

  • Shopify Lite: $9/mo. Embeddable cart, but no standalone store website.
  • Basic Shopify: $29/mo.
  • Shopify: $79/mo.
  • Advanced Shopify: 299/mo.
  • Shopify Plus: Custom pricing. Reserved for enterprise-level customers.

When it comes to accepting payment from your customers, you should note that this is the only platform on our list that charges an extra commission per sale. This goes above and beyond the normal processing fees you’ll need to pay to your credit card processor. Shopify’s commission decreases incrementally as you climb the subscription ladder: 2% on Basic, 1% on Shopify, 0.5% on Advanced.

You can avoid these extra Shopify transaction fees if you sign up for the in-house payment processor — Shopify Payments (powered by Stripe) — but this gateway is only available in 10 countries. In addition to eliminating the extra transaction fee, Shopify struck a deal with Stripe to offer lower payment processing fees with Shopify Payments than if you were to use Stripe (or a similar processor) by itself. These discounts apply to your processing if you’re on the Shopify Plan or the Advanced Shopify Plan.

Shopify does provide over 100 alternative gateway options. You’ll just be saddled with that extra percentage Shopify charges per sale when you stray from Shopify Payments.

Features & Add-Ons

Shopify is defined by a quality core feature set that works well for a wide variety of sellers. Moreover, Shopify has a very large app marketplace (of around 2500 apps) that will provide virtually any additional feature you might need. If there is one disadvantage to this system, it is that these integrations can add to your monthly operating costs. Meanwhile, merchants appreciate how many of Shopify’s third-party apps are fully-fledged software platforms that are commonly used to support ecommerce, rather than just simple extensions that add a small feature or two (the app store does have those as well, though!)

Here are a few Shopify features we like:

  • Abandoned cart recovery
  • Built-in shipping software (Shopify Shipping)
  • Real-time shipping calculations
  • Manual order creation (virtual terminal)
  • Automatic tax calculation
  • Shopify POS & other POS integrations
  • Extensive order fulfillment & dropshipping integrations
  • Coupons, discounts & gift cards

Ease Of Use

Shopify has one of the easiest learning curves in the ecommerce software market. Simplicity is the name of the game for Shopify — it’s clear they’d rather offer the ability to expand the platform’s capability with optional add-ons than to overwhelm the newbie with a complicated dashboard or intricate customization options from the get-go.

The Shopify dashboard is clear and well-organized, and any built-in feature can be manipulated easily with zero coding knowledge.

Web Design

Shopify offers 10 free themes (made by Shopify), as well as 67 paid themes (made by third-parties) that range in price from $140-$180. Technically, the total theme count is a bit higher, because each theme has multiple style variations that swap out colors and whatnot. Shopify themes are some of the more elegant and functional options we’ve seen. As a nice bonus, the theme marketplace can be searched by desired theme features.

While the Shopify theme editor may not be as flexible as that of a top-notch website builder (like Wix), the drag-and-drop editor makes it easy to stack and rearrange page elements, called “Sections.” (Perhaps don’t go quite as far as I did with awkward colors and fonts — just showing you what can be changed):

Beyond the theme editor, you also have the opportunity for more customization with a combination of HTML, CSS, and Shopify’s own theme templating language (called Liquid). Most novices won’t open that coding can of worms straight away, but it’s good to know it’s there.

Customer Support

Shopify offers 24/7 phone, email, and live chat support at all subscription levels. Although no customer support system is perfect, we’ve found Shopify’s responses helpful and timely in the grand scheme. On top of this, the strong community of users and developers currently working with Shopify makes finding resources, reviews, and feedback a breeze. The library of self-help articles, tutorials, courses, and videos produced by Shopify is also impressive.

Who Is Shopify Best For?

If this were a little kids’ recreational sports league, Shopify would receive the “Most Well-Rounded Player” award, if not the full MVP as well. Shopify is suited to the widest variety of store types and sizes. When Shopify works for merchants, it works really well. Store owners who benefit the most from Shopify will most likely be based in one of the 10 countries in which Shopify Payments is available, because that’s the only way Shopify’s extra commission per sale is avoided. However, the quality of Shopify’s platform is strong enough overall that many merchants are willing to accept those extra transaction fees, even if they can’t (or won’t) use Shopify Payments.

Of course, we can’t mention Shopify without also mentioning one type of merchant in particular: dropshippers. Shopify is definitely the dropshipper’s go-to platform.

2. BigCommerce

If you asked most experts at large, they’d probably tell you that BigCommerce is Shopify’s most direct ecommerce SaaS competitor. BigCommerce also has an enterprise solution (BigCommerce Enterprise) that’s comparable with Shopify Plus.

Pricing

Subscription levels with BigCommerce are organized by added features at each level, but also annual revenue caps. This means you’re automatically bumped to a higher subscription once you reach a cap. Here are the plans and their associated sales limits:

  • Standard: $29.95/month (sell up to $50K/yr.)
  • Plus: $79.95/month (sell up to $150K/yr.)
  • Pro: $249.95/month (sell up to $400K/yr.)
    • add $150/mo. for every additional $200K/yr. in sales, up to $3M
  • Enterprise: Custom pricing

Unlike Shopify, BigCommerce never charges an additional commission per sale. For payment processing gateways, you have about 60 options. One of these is Braintree (a division of PayPal), which gives access to discounted processing rates as you move up the BigCommerce subscription ladder.

Features & Add-Ons

BigCommerce has a particularly strong set of native features, while also maintaining a sizable app marketplace for optional add-ons (ballpark 600 in total). The balance of out-of-the-box features versus add-on apps leans more toward the former, especially when compared to Shopify. Offered features include:

  • Faceted (filtered) search
  • Single-page checkout
  • Customer groups & segmentation
  • Abandoned cart recovery
  • Real-time shipping calculations
  • Product ratings & reviews
  • Up to 600 product options/variants
  • Coupons, discounts, & gift certificates
  • Square POS integration

Ease Of Use

Some may argue that the balance toward more features included from the get-go can make BigCommerce harder to use at first. Personally, I wouldn’t let fears about user-friendliness stop a beginner from using this software. Extensive out-of-the-box features don’t complicate BigCommerce dashboard beyond reason, and the included features are intuitively configurable without any coding knowledge.

Web Design

BigCommerce offers around 125 themes, along with close to 500 total variations (or “styles”) of those themes. Seven of these themes (25 styles) are free; the rest are available for $145–$235. Quality of design is always subjective, but BigCommerce definitely has a wide variety of elegant templates from which to choose.

It’s a good thing this variety and quality of templates pre-exists, because customization options without coding knowledge or adding a separate integration are somewhat limited with BigCommerce. The theme editor lacks a drag-and-drop element, and you’ll be stuck with the theme’s fonts and colors for the most part.

Customer Support

Like Shopify, BigCommerce offers 24/7 phone, email, and live chat support at all plan levels. We’ve had mixed experiences with BigCommerce’s support, but find that more users praise the service than knock it. You can definitely make the argument (and we have) that BigCommerce support is just as good or better than Shopify’s. There are also active community forums and plenty of BigCommerce-produced support materials available online.

Who Is BigCommerce Best For?

The target market for BigCommerce overlaps significantly with Shopify’s. Much of your decision will come down to the appeal and specific fit-to-business of the extra features that come built-in with BigCommerce at your targeted subscription level. For example, I think B2B and wholesale merchants would do well to take close look at BigCommerce’s feature set. Support for more product variants or discount types will be interesting to other sellers. If you’re confident you’ll actually use most of the native features BigCommerce offers, you could definitely end up saving money and headaches. You’ll just need to be prepared for the automatic subscription bumps as your revenue grows.

Perhaps the most obvious appeal for BigCommerce is the freedom to choose your payment processor with no penalty of an extra transaction fee. That extra cut Shopify takes from your sales feels especially unfair if you’re not even based in one of the 10 countries where Shopify Payments is supported.

By the same token, maybe you already have a merchant account and/or payment processor that you like, or are looking for a specialized payment processor for your particular sales volume and/or risk profile. We often recommend merchants processing over around $100K per year look into credit card processors that offer your own dedicated merchant account with interchange-plus pricing. These accounts can provide more transparency and account stability (and often cost savings) than a standard flat-rate processor like Shopify Payments, PayPal or Square. With BigCommerce, your payment acceptance options are quite open.

3. 3dcart

3dcart

This platform has been around longer than any other on our list, and I’d actually heard of it before I’d even heard of Shopify. Over the years, 3dcart has developed a substantial and nuanced core feature set and continues to add and improve features at a steady clip. The software’s low monthly cost, extensive features, and plentiful payment gateway options make it worth a look when opening an online store.

Pricing

Subscription packages with 3dcart are delineated mainly by annual online revenue, number of staff accounts, and available features. You can sell up to 100 products on the Startup plan, while the other plans allow you to list unlimited items.

  • Startup: $19/month (sell up to $50K/yr.)
  • Basic: $29/month (sell up to $100K/yr.)
  • Plus: $79/month (sell up to $200K/yr.)
  • Pro: $229/month (sell up to $400K/yr.)
  • Enterprise: Custom

3dcart comes in at a lower starting price than BigCommerce or Shopify (if you exclude the Shopify Lite plan that doesn’t let you build a standalone store website). At the same time, the $29 plan level with 3dcart accommodates twice the annual store revenue of the $29.95 plan on BigCommerce.

On top of this, 3dcart never charges its own fee per sale, regardless which of the over 160 compatible payment gateways you select. For US merchants, there also are several “preferred” processor options (e.g., Square, Stripe, PayPal, and FattMerchant) that may give you access to discounted processing rates at the Plus and Pro subscription level.

Features & Add-Ons

3dcart prides itself on a rich supply of native, built-in features. We can vouch that the feature set is robust, especially for the price. And, while it’s true that 3dcart has managed to avoid some of the excessive “app creep” from which Shopify suffers, you can still connect with lots of useful third-party software via the app store.

We’ve mentioned that packed-in features can result in sacrificed user-friendliness. 3dcart keeps some of its complexity at bay by offering advanced features and modules that can simply be turned on and off depending on whether you need them.

Here are just a few of 3dcart’s noteworthy features:

  • Unlimited product options/variants
  • Single-page checkout
  • Robust discount/coupon engine
  • Real-time shipping calculations
  • Create/print shipping labels in-dashboard
  • Gift certificates on all plans
  • Wish lists & gift registries
  • Customer reviews & product Q&A
  • Abandoned cart recovery
  • Waiting list & pre-orders

Ease Of Use

When it comes to actually working with all of 3dcart’s plentiful features, we’re still looking at a user-friendly platform overall. You should just be aware that the learning curve you encounter may be slightly steeper than it is for Shopify (and perhaps BigCommerce as well) depending on your experience.

Like many worthwhile endeavors, 3dcart simply requires you put in a bit more effort in order to get more out of it in the end. The menus go a little deeper, the dashboard screens are more complex, and some advanced functions can be a little tricky to locate and use at first. Still, the basic setup and navigation are comparable to the ecommerce platforms we’ve discussed so far. You won’t need coding knowledge to operate your store.

Web Design

3dcart recently streamlined its entire theme marketplace, resulting in less quantity and more quality. The revamp brought 3dcart into better stylistic alignment with the ecommerce competitors we’ve discussed so far, but we’re still missing a bit of variety and uniqueness amongst the remaining options.

Of the 45 total themes available, about half are free, and more than half were created by 3dcart. Premium themes range from $149-$249.

With 3dcart, you get a very basic theme editor to change out photos and font colors, but you can’t rearrange any page elements:

Beyond these simple changes, you must use HTML and CSS inside the template editor:

Customer Support

Another key reason 3dcart makes our “best” list is the availability of 24/7 phone, live chat, email support. The only subscription that doesn’t offer phone support is the $19/month plan, but you still have the ability to talk to someone in real time with live chat. Support quality and responsiveness receive mixed reviews, but this is typical of all the software apps on our list. No ecommerce solution has cracked the code for keeping 100% of customers satisfied, but we’ll let you know if any of them do!

You’ll also have access to plenty of online resources produced by 3dcart, as well as an active community forum. Just note that while the knowledgebase articles are helpful, they’re sometimes low on screenshots and high on text.

Who Is 3dcart Best For?

We think 3dcart is a solid option for small-to-midsize businesses owners on a budget who still appreciate lots of built-in features. If you’ve experimented with Shopify or BigCommerce and felt a little boxed in when it came to flexibility and customization, and as long as you’re not intimidated by a relatively detail-oriented system, 3dcart opens up options for you. Or, if you’re skeptical of jumping on the Shopify bandwagon just because “everybody’s doing it,” and you balk at feeling hemmed into Shopify Payments lest you pay a penalty, 3dcart may be just the alternative you seek. Not to mention, we appreciate your Maverick spirit!

3dcart has a tried-and-true and even somewhat old school vibe, but without feeling clunky or inflexible. It has managed to stick around amongst an onslaught of newer competitors by quietly improving the quantity and quality of its core offerings over time. Meanwhile, you can still add on plenty of extra features via the app market, or do a bit of template tinkering on your own with basic coding knowledge.

4. Ecwid

Ecwid diverges the most from the software options we’ve discussed so far. At its core, Ecwid is an ecommerce shopping cart plugin (or “widget,” as the name implies) you can embed into an existing website. In this way, Ecwid is similar to WordPress’ WooCommerce, except you can add Ecwid to any website, not just WordPress sites. Ecwid also allows you to create a very basic standalone website and sell up to 10 products — for free! The company claims over 1.5 million users, which is significantly more than Shopify’s 600,ooo. The availability of a free plan likely has a lot to do with that!

Pricing

Subscription levels are organized by several aspects: available features, number of listed products, file storage, customer service access, and number of staff accounts. We’ve described the details of each level in our main Ecwid review, but here’s a quick summary:

  • Free: $0/mo. (10 Products)
  • Venture: $15/mo. (100 Products)
  • Business: $35/mo. (2500 Products)
  • Unlimited: $99/mo. (Unlimited products)

Happily, Ecwid does not charge an additional commission per sale. Along with offering around 50 payment gateway options for your store, Ecwid also has a special partnership with a payments provider called WePay. Together, they created Ecwid Payments, which offers discounted payment processing rates for merchants in the US, UK, and Canada. And, if you accept ACH or direct bank payments at your store (which is cheaper than accepting credit cards), you also qualify for discounted rates on those transactions with Ecwid Payments.

Features & Add-Ons

With Ecwid’s freemium pricing model, you can expect several new features unlocked at each subscription level. The free plan will definitely get you started with a small online store, but we don’t see most serious sellers staying on this plan for long. Fairly basic features such as inventory management, discounts, SEO tools, and access to the Ecwid app store require a paid plan. The Ecwid app store is on the smaller side, but you’ll still find several ecommerce staples in the shipping, tax, and accounting categories. And, don’t forget that if you’re embedding the Ecwid shop widget into another website, you’ll have access to that sitebuilder’s integrations as well.

Noteworthy Ecwid features include:

  • Create & edit orders
  • Several POS integration options, including mobile POS
  • Abandoned cart recovery
  • Branded shopping app for your store
  • Automatic tax calculations
  • Wholesale pricing groups
  • Mobile store management app

Ease Of Use

Intuitive dashboard navigation and foolproof feature manipulation make Ecwid an extremely user-friendly platform. Ecwid’s ease of use closely rivals Shopify’s. The Ecwid backend was clearly designed with the ecommerce beginner in mind.

Web Design

Remember that Ecwid’s main purpose is to act as a shopping cart plugin for an existing website that already has an established look and feel. That said, Ecwid does provide one theme template for a standalone online store. Here’s my in-progress edit of the starter template:

There aren’t a lot of customizations you can make to this starter website besides adding your own main image, your store name, and your 10 products. If your store is embedded into an existing website, you can purchase a third-party theme that helps your shop tie in with the rest of the site. Basically, unless you’re using the Ecwid Starter Site, web design for your storefront is largely dependent upon whatever existing sitebuilder you’re using.

Customer Support

Availability of customer support with Ecwid depends on which plan you have:

  • Free: Email only
  • Venture: Email & live chat
  • Business: Email, live chat, & phone; 2 hours of custom development (annual plan)
  • Unlimited: Email, live chat, & priority phone support; 12 hours of custom development (annual plan)

Also, note that email and live chat are not open on the weekends, and phone support is on a callback system. Despite these limitations, most users rate the actual quality of Ecwid’s support quite highly. Knowledgebase articles and video tutorials are also good quality.

Who Is Ecwid Best For?

Generally, we think Ecwid is a great option for small-to-midsize sellers. We highly recommend Ecwid for newcomers to online selling — particularly those with an established online presence who simply need to add a store component. If you love the platform your current website is built upon, and you’re already nailing your brand’s image and following, there may be no need to rush off and migrate to an all-in-one “website + ecommerce” system like the ones we’ve covered so far.

If you don’t have a website but would like to dabble in selling a few products online, you could also get an Ecwid starter site going for free while you develop a full-blown website on the side. It’s hard to argue with free! If you’re really on a shoestring budget or you’re just starting out with ecommerce, I’d encourage you to compare Ecwid’s free plan to Shopify Lite (at $9/mo.) to see which system might work best for your needs.

5. Wix

So, Ecwid built an ecommerce shopping cart widget that goes inside other website builders, but Wix is a website builder that actually built its own ecommerce widget (called Wix Stores) to go inside itself. I know, it’s a bit confusing! The point is that Wix began as a traditional sitebuilder, but now has ecommerce capability built in as well. Combining new ecommerce tools with its existing popularity in the no-coding-required-website-design niche, Wix presents quite an attractive (both figuratively and literally) option for online sellers.

Pricing

You may have heard that Wix lets you create a website for free. While this is true, you need a paid plan to use Wix’s ecommerce features. Below are your ecommerce subscription options, defined by file storage, customer support, and whether or not email marketing campaigns are included:

  • Business Basic: $25/month (20GB storage)
  • Business Unlimited: $30/month (35GB storage)
  • Business VIP: $40/month (50GB storage)

We’ve listed the true month-to-month price here, even though Wix advertises its monthly price if you pay for a full year. This drops the prices to $20, $30, and $35, respectively. All of the other platforms we’ve highlighted also offer discounts when paying annually — Wix just leads with these discounted figures in its advertising.

Regardless of which payment processor you choose (there are currently close to 20 options), Wix never charges an extra commission per sale.

Features & Add-Ons

If you choose to build an ecommerce website with Wix from scratch, the core of your site will be built upon the Wix Stores app. If, however, you already have a different type of Wix website (e.g., restaurant, hotel, photography site, etc.) and want to add an online shop, you simply switch to a Business subscription plan and add the Wix Stores app to your dashboard.

Wix is still working on adding some features that are becoming more standard amongst ecommerce platforms (like abandoned cart recovery), but we like a lot of what it has on offer so far:

  • Email marketing
  • Integrate with Square POS
  • Mobile app for store management
  • Send & manage invoices
  • Checkout on your own domain
  • SEO Tools
  • Create discounts & coupons
  • Inventory & order management
  • Library of stock photos for your site

The Wix app marketplace includes hundreds of apps, but not all are ecommerce-specific. You may also notice limited pre-built connections to third-party integrations (shipping and accounting software, for example). These sorts of apps become more indispensable as a store grows, but are not as critical for a store that manages fewer products and orders.

Ease Of Use

Wix Stores integrates seamlessly with the rest of the Wix dashboard. eCommerce features and settings are simply added to the left sidebar menu, like in any other ecommerce platform. Further dashboards open as you explore each individual feature (like adding a product or creating a coupon). Wix is defined in the DIY web design market by its ease-of-use, and this extends to its ecommerce functionality as well.

Web Design

There are actually two ways to design an ecommerce storefront in Wix. The first begins in a familiar fashion — selecting a template.

Wix offers over 500 templates to choose from, with over 70 of these already built upon the Wix Stores app (although you can easily add the app to any template). A nice perk of Wix’s template system is that all are included free with a Business subscription to Wix. The only tricky part is that you can’t switch templates once get your store up and running!

Wix provides the most flexible no-coding-required theme editor of any ecommerce platform we’ve covered here. Rather than simply dragging and dropping elements up and down your pages, you can adjust and place page elements virtually anywhere.

The second (and even easier) method of creating an ecommerce website with Wix is via Wix ADI (Artificial Design Intelligence). If you choose this option, you’ll be asked a series of detailed questions about your business, and Wix will use this information to draft a storefront for you.

Sites created with Wix ADI also have a theme editor available, but this editor’s flexibility is more limited than the standard WIX editor. Nevertheless, it’s comparable to Shopify’s drag-and-drop editor. You can stack and arrange elements up and down your pages.

If you decide you’d like to micromanage your design a bit more after creating your Wix ADI site, you’re welcome to switch over to the more advanced theme editor. You just can’t switch back to Wix ADI without losing your changes.

Customer Support

Here’s a quick rundown of Wix’s customer support channels:

  • Phone: Callback service open Monday-Friday, 5AM-5PM Pacific
  • Email: 24/7
  • Live Chat: None

As you can see, the phone channel is somewhat limited, but we like that you have access to this channel of support on all plans. The Business VIP plan also offers priority support, meaning your emails and callback requests jump to the front of the queue. Wix doesn’t have as thorough a set of self-help resources specifically for ecommerce as some of the other platforms, but the resources it does maintain are well done and useful.

Who is Wix Best For?

Wix may differ from the other ecommerce platforms we’ve discussed, but we see this variety as a very good thing. This platform is a great option for merchants who need a multifunctional (but still user-friendly) website — not just an online store. The way native apps like Wix Stores, Wix Bookings, Wix Restaurants, Wix Hotels, and others weave together to form a seamless dashboard on the backend, plus an elegant web presence on the front end, is really slick.

Speaking of elegance, the other (sometimes overlapping) group of store owners Wix works nicely for are those with a smaller number of visually-detailed products. You’re probably not going to want to run a massive fulfillment and shipping operation with Wix, but small shops with aesthetic priorities are perfect for Wix.

Quick Pricing Comparison

We’ve covered a lot of ground in our comparison of these five good options for building an online store. Before we wrap this baby up, let’s recap the subscription plans for each one, along with the main ways the levels are distinguished from one another. As you’ve clearly seen, pricing is just one component of your final choice, but it’s usually where people start.

eCommerce Platforms Pricing Summary

Pricing Levels Differences Btwn. Levels

Shopify

Lite: $9/mo.

Basic: $29/mo.

Shopify: $79/mo.

Advanced $299/mo.

Plus: Custom

  • Available features
  • Number of staff accounts
  • Payment processing discounts
  • Shopify’s commission per sale

BigCommerce

Standard: $29.95/mo.

Plus: $79.95/mo.

Pro: 249.95/mo.

Enterprise: Custom

  • Available features
  • Annual store revenue

3dcart

Startup: $19/mo.

Basic: $29/mo.

Plus: $79/mo.

Pro: $229/mo.

Enterprise: Custom

  • Available features
  • Annual store revenue
  • Number of products
  • Number of staff accounts

Ecwid

Free: $0/mo.

Venture: $15/mo.

Business: $35/mo.

Unlimited: $99/mo.

  • Available features
  • Number of products
  • Storage
  • Number of staff accounts
  • Customer service

Wix

Business Basic: $25/mo.

Business Unlimited: $30/mo.

Business VIP: $40/mo.

  • Storage
  • Customer service
  • Available features

Final Thoughts

Did you find your ecommerce match? We know it’s a lot to take in at once. The great news is that all of these platforms allow you to test the software before you buy. We’d suggest narrowing down our five suggestions to a couple that look like strong candidates for your store and starting a free trial of each. Test drive all the features you possibly can, work on customizing your storefront, and pepper customer support with questions at all hours. That’s the only way you’ll know which is the best fit, even with our attempts to simplify the decision-making process for you.

Generally speaking, the first three platforms we mentioned (Shopify, BigCommerce, and 3dcart) are quite similar and will work for a lot of the same types and sizes of stores. 3dcart is probably the most complicated and detailed of the three out-of-the-box, and typically requires a bit more out of the user. This is not necessarily bad, though. BigCommerce may be a good middle ground between 3dcart and Shopify, combining ease-of-use with a dense set of out-of-the-box features. And, even with Shopify’s super annoying transaction fees (if you don’t use Shopify Payments), Shopify is still a very solid recommendation — it’s just good software.

Ecwid and Wix each have their own advantages as well, especially for smaller stores. Both are well-designed and user-friendly. Ecwid has an enticing free plan and can be embedded in any existing website, while Wix allows you to develop a particularly elegant and multifunctional storefront using your choice of not one, but two different methods.

We think most small business owners will find a good solution from among these five options. And, we’ll let you in on a rather little-known secret: it’s not the end of the world if you end up needing to migrate platforms. That goes for right now if you’re looking to make a switch, or later if you decide your software isn’t working for you anymore. Nevertheless, you can still head into your decision with the confidence that you’ve done your research and tested the software thoroughly before handing over your credit card. (You’re going to test them first, right? Promise? Good.)

Do you have experience with one or more of these ecommerce platforms? Let us know how you think they compare in the comments. We love feedback from real users like you!

Shopify BigCommerce 3dcart Ecwid Wix

3dcart

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Monthly Cost

$9 – $299

$29.95 – $249.95

$19 – $229

Free – $99

$25 – $40

Core Features

Great

Excellent

Excellent

Good

Good

App Store

Very Large

Large

Moderate

Moderate

Small/Moderate

Ease Of Use

Very Easy

Easy

Moderate

Very Easy

Easy

Web Design

Great

Good

Good

OK

Excellent

Customer Support

Great

Great

Good

Good

Good

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Differences Between Invoice Financing And Invoice Factoring

Unpaid invoices can be a burden for any business. While you know that the money from the invoices will come eventually, slow-paying customers or long repayment terms could have a negative impact on your incoming cash flow — and this could be a problem for your business.

Instead of waiting for weeks (or months) to receive the money owed to your business, how can you get the funding your business needs immediately? What if you could put your unpaid invoices to work for you? What if you could sell your unpaid invoices or use those invoices as collateral to receive the money you need to cover an emergency or to use as working capital?

If outstanding invoices are creating cash flow problems for your business, there are lending options available for you. In this post, we’ll explore invoice financing, invoice factoring, and invoice discounting. We’ll discuss the differences, how they can benefit your business, associated costs, and most importantly, how to make the right choice for your business. Read on to learn more.

What Is Invoice Factoring?

With invoice factoring — also known as accounts receivable factoring — a business owner sells unpaid invoices to a lender. This lender is known as a factoring company or simply a “factor.” When you sell your invoice, the factor gives you an upfront payment that is typically 85% to 95% of the invoice total.

The factor will then proceed with collecting payment from the customer. Once the customer has paid the invoice, the factor will pay the remaining balance to you, less an agreed-upon factoring fee. Factor fees vary by lender but typically add up to between 1% and 6% per month. Factors charge daily, weekly, or monthly fees, so the longer it takes for the invoice to be paid, the higher your fee will be.

Obviously, the factoring fee reduces the amount that you receive from the invoice. This is why it’s important to always weigh out the return on investment before agreeing to sell your invoices. If there isn’t an immediate financial need, waiting for your customer to pay the invoice is the wisest decision, but if an unpaid invoice is causing financial challenges in your business, receiving immediate cash may be worth the cost.

Invoice factoring offers a financial solution for businesses that need funds quickly but may not qualify for other loan options. Most business loans require a certain time in business and minimum annual revenues, and many lenders also take personal credit scores into account. But even if your annual revenues are low, your business is new, or you have personal credit challenges, you may qualify for invoice factoring — provided you have qualifying invoices.

Think invoice factoring is right for you? Learn more about how to determine if invoice factoring is a smart financial choice for your business. Once you’ve decided to move forward, check out our comparisons of top invoice factoring companies.

Financing VS Factoring: What’s The Difference?

Invoice Financing Invoice Factoring

Uses invoices as collateral for a line of credit

Sell invoices for immediate cash

You are granted a credit facility based on the value of your unpaid invoices, and can draw from your available funds at any time

Factor gives you an advance when the invoice is sent and sends you the rest once the customer pays (minus a factoring fee)

You are responsible for collecting invoice payments

Factor is responsible for collecting invoice payments

Two terms that are often used interchangeably are invoice financing and invoice factoring. Invoice factoring is a type of invoice financing. However, when most people use the term “invoice financing,” they are referring to accounts receivable financing.

Accounts receivable financing — or invoice financing — is similar to invoice factoring. However, with this type of loan, your unpaid invoices act as the collateral to secure a line of credit. The amount of your line of credit is determined by the value of your invoices.

With invoice factoring, you receive a lump sum payment from the factor based on the value of the invoice. In other words, the factor purchases your invoices. Therefore, the factor is responsible for collecting payments from your customers. With invoice financing, the invoices still belong to you and are only being used as collateral. This means that collecting payments from customers is your responsibility.

What About Invoice Discounting?

Another form of lending based on unpaid invoices is invoice discounting. Like invoice factoring and invoice financing, this is an option for qualifying B2B and B2G businesses that need extra capital. Let’s explore what invoice discounting is and how it differs from invoice factoring.

Invoice Factoring VS Discounting

Invoice discounting is similar to invoice factoring in that you use your unpaid accounts receivable as collateral. As with invoice factoring, new companies and startups, business owners with low credit scores, and businesses with low annual revenues that do not qualify for traditional financing may also qualify for invoice discounting.

What makes invoice discounting distinct from invoice financing different is who collects the payment. With invoice factoring, the factor collects payment from the customer. With invoice discounting, your business is responsible for collecting the payment. After submitting qualified invoices, you will receive a lump sum payment of up to 95% of the invoice value. You will collect payment from your customer as usual and pass the money onto the lender, plus fees charged for the service.

How To Choose An Invoice Financing Solution

Even though invoice factoring, invoice financing, and invoice discounting have similarities, there are situations when you should select one option over the others. Before you submit your invoices, keep the following considerations in mind:

Notification VS Non-Notification

If a third-party lender purchases your invoices through invoice factoring, your customers will be notified since the factor will be collecting payment.

With invoice financing and invoice discounting, you are collecting payment as usual, so your customers will be unaware of a lender’s involvement.

If you don’t want your customers to be notified by a third-party, choose invoice financing or invoice discounting.

Collecting Payments

If you’re a smaller company, you may not have the manpower to chase down customers for unpaid invoices. If you would rather the lender collect payment, invoice factoring is the option that would work best for you.

It is important to note that invoice factoring often has higher fees. However, the additional costs may be worth it if you do not have the time or resources to track down customers and collect payment.

If you use invoice factoring and the factor collects payments, remember that your customers will be notified of third-party involvement. If this is something you wish to avoid, consider your other financing options.

Asset-Backed Line Of Credit VS Lump Sum

If you want to receive a lump sum payment for your invoices, choose invoice factoring or invoice discounting. With these options, you can receive up to 95% of your invoice value upfront.

If you prefer a more flexible option, consider applying for invoice financing. You’ll receive a line of credit that is backed by your unpaid invoices.

Final Thoughts

If unpaid invoices are dragging your business down, put your accounts receivable to work for you. With invoice factoring, financing, and discounting, you can receive the money you need even when you don’t qualify for a traditional loan. Consider what type of financing would work best for you, shop around for the most affordable fees, and select a lender based on the financial needs of your business.

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The Best Business Loan And Financing Resources For Utah Small Businesses

You’re a business owner in Utah, and you need extra cash for your business. Whether you need capital to get a new business off the ground or you need a financial boost for your established business, there are financing options out there — you just have to know where to look.

If you’ve done some online research and you keep getting the same generic list of lenders, you’re in luck. We’ve compiled a list of the best lenders that serve businesses in Utah. Read on to learn more about the best loan and financing resources for small businesses in your state.

The Best Online Business Lenders For Utah Businesses

Technology has made life easier than ever. Our smartphones keep us connected anywhere in the world, our TVs are smarter, and even our businesses can benefit from technology. The internet allows us to do more than ever when growing our businesses, from employing new advertising techniques to applying for an online loan.

An online business loan is a loan that you apply for and receive online. Online loans eliminate the need for face-to-face meetings at a financial institution. Instead, you can compare, research, and even apply for and receive a loan from the comfort of your home or office.

With an online business loan, you submit your application securely online. For underwriting purposes, you also submit your documentation such as bank statements and tax returns through email or a secure online portal. Your lender can prequalify you, approve your loan, and even disperse loans online.

Even though online lending has opened up new financing opportunities for business owners, it does raise the question: which lender do I choose? Having so many options can be overwhelming, but you can start your research with one of these top picks.

Lendio

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When you’re shopping for loans online, make Lendio one of your first stops. Lendio itself isn’t a lender. Instead, this is a loan aggregation site that connects you with a network of over 75 lenders. With one application, you’ll receive multiple offers from lenders including Bank of America, American Express, and BlueVine. The service is free to use and applying does not affect your credit score.

No matter what type of business loan you need, you can find it on Lendio. Some of the loan options available include:

  • Business Line Of Credit: Up to $500,000 with 1 – 2-year terms
  • Small Business Administration Loans: Up to $5 million with 10 – 25-year terms
  • Equipment Financing: Up to $5 million with 1 – 5-year terms
  • Merchant Cash Advances: Up to $200,000 with terms up to 2 years
  • Term Loans: Up to $2 million with 1 – 5-year terms
  • Business Credit Cards

Through Lendio, you can also apply for invoice financing, acquisition loans, startup loans, and commercial mortgages.

Rates, terms, and fees are determined by each lender that makes an offer and may be based upon your time in business, annual revenue, personal and/or business credit score, and other factors.

SmartBiz

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If you have solid credit and revenue, a Small Business Administration loan is an affordable financing option to consider. However, the application process for an SBA loan is notoriously long and difficult … that is until SmartBiz changed the financing game.

SmartBiz is an online marketplace that specializes in SBA loans. Through SmartBiz, you can apply for 7(a) commercial real estate loans up to $5 million. Rates are between 6.75% and 8%, with repayment terms up to 25 years. Loan proceeds can be used to purchase commercial space or refinance an existing commercial mortgage.

To qualify, the property must be at least 51% owner-occupied. You must be in business for at least 2 years and have a personal credit score of at least 675. You must also be able to show sufficient cash flow to make your monthly loan payment.

SmartBiz also provides SBA debt refinancing and working capital loans with rates of 8% to 9%. With these loans, you can borrow up to $350,000. There are 10-year repayment terms associated with these loans. Funds from your loan can be used to purchase equipment, pay for marketing and advertising costs, cover operating expenses, buy inventory, hire and train employees, or refinance existing debt.

To qualify, you must be in business for at least 2 years and have a minimum credit score of 640. You must also demonstrate sufficient cash flow to cover the monthly payment of your loan.

If you don’t qualify for an SBA loan or you want to pursue another financing option, SmartBiz has bank partners for equipment financing, working capital, and debt refinancing. You can receive up to $200,000 with repayment terms between 2 and 5 years. Fixed interest rates on non-SBA loans are between 7.99% and 24.99%.

To qualify for a non-SBA loan, you must be in business for at least 2 years and have a credit score of at least 640. You must have sufficient cash flow to make your monthly loan payment.

StreetShares

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StreetShares is an online lender that has three financial products to choose from: the Patriot Express line of credit, term loans, and contract financing.

With a Patriot Express line of credit, you can receive up to $250,000 with terms between 3 and 36 months. Interest rates are between 6% and 14% with a draw fee of 2.95%.

StreetShares has installment loans up to $250,000 with terms between 3 and 36 months. The interest rate is between 6% and 14% with a closing fee of 3.95% to 4.95%. If you qualify, you’ll be able to borrow up to 20% of your annual revenue. If you have $100,000 in annual revenue, you’ll be able to borrow up to $20,000.

To qualify for either an installment loan or line of credit, your company must be in business for at least 1 year. Your personal credit score should be at least 620, and you must have a minimum annual revenue of $25,000.

Contract financing with StreetShares is similar to invoice financing. You submit an invoice to the lender for your unpaid contract and receive up to 90% of the invoice amount. Once the invoice is paid, you’ll receive the remaining balance, less lender fees. Rates start as low as 1% for 30-day invoice advances, and there are no limits to the invoices being financed. Federal, state, and commercial contracts are eligible for contract financing. There is no minimum credit score required to qualify.

Kabbage

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To qualify for many business loans and financial products, a minimum of 2 years in business and a good to excellent credit score is required, but what if you don’t meet these requirements? If this sounds familiar, lenders like Kabbage can help.

Borrowers may receive lines of credit with maximum limits up to $250,000 through Kabbage. Repayment terms are set at 6 months or 12 months based on the amount of the draw. A monthly fee is charged for every month you carry a balance, with fees ranging between 1.5% to 10% based on the performance of your business.

To qualify for a Kabbage line of credit, you must be in business for at least 1 year. Revenue requirements are either: $50,000 annually or $4,200 monthly for the last 3 months. There are no credit score requirements.

Kabbage looks at the performance of your business to determine your eligibility and your credit limit. Kabbage analyzes your business performance through your linked business accounts, including your business checking account, PayPal, Amazon, and accounting software.

Prosper

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If you’re a new business or you haven’t yet opened your doors, getting a business loan can be a major challenge. If you have a good personal credit score, why not consider a personal loan for business?

When you apply for a personal loan for business, the lender will only evaluate your personal credit score and income. Your time in business, business credit score, and business revenues won’t be factors in your approval.

One lender that offers personal loans for business in Utah is Prosper. Through Prosper, you can apply for loans from $2,000 to $40,000. Funds can be used for any business purpose, including purchasing equipment, paying operating costs, or covering an emergency expense. APRs for Prosper loans range from 6.95% for the most creditworthy borrowers to 35.99%. An origination fee of 2.41% to 5% of the total loan amount is added to your loan.

To qualify for a Prosper loan, you must have a personal credit score of at least 640 and a credit history of at least 2 years. Your debt-to-income ratio must be below 50% to be approved for a Prosper loan.

Banks & Credit Unions In Utah

A traditional loan from a bank or credit union is one of the most affordable options for your business. If you have a good credit score, high annual revenue, and a solid time in business, you may qualify for a bank or credit union loan with favorable terms and low interest rates.

Even if you face some challenges that disqualify you from receiving a traditional loan, banks and credit unions have other financing options, such as lines of credit, credit cards, and SBA loans. If you’re a business owner in Utah looking for a financial institution, consider one of these top options

Chase Bank

Chase Bank is one of the nation’s leading financial institutions. There are multiple Chase branch and ATM locations throughout the state of Utah in cities including but not limited to Salt Lake City, Providence, Saratoga Springs, and South Ogden.

Chase Bank offers multiple financial products for business owners. As a Chase Bank customer, you can apply for a business checking or savings account, term loans, equipment loans, and lines of credit. Chase Bank also provides commercial real estate financing and is an intermediary lender of Small Business Administration loans.

You can also apply for business credit cards with some of the best rewards programs in the industry. Qualified borrowers can apply for products including the Chase Ink Business Unlimited card and the Chase Ink Business Preferred card.

Card Card Name Annual Fee Introductory Rate Rewards Next Steps

Chase Ink Business Preferred℠

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

Chase Ink Business Cash℠

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

Chase Ink Business Unlimited℠

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

Zions Bank

Zions First National Bank was originally founded in 1873 in Salt Lake City. Since its founding, the financial institution has expanded to 122 banking centers across the states of Utah, Wyoming, and Idaho.

Zions Bank is a one-stop financial shop for business owners in Utah. Zions Bank offers many services including business checking accounts and credit cards. Zions Bank also has lines of credit up to $50,000, business term loans up to $100,000, and equipment loans and leases. Commercial real estate loans, equity lines of credit, SBA 7(a) loans, and invoice factoring are also available to qualified borrowers.

America First Credit Union

If you’d rather be a credit union member than a bank customer (read about the reasons why a credit union loan may be better), one of the top credit unions in Utah is America First Credit Union. This financial institution was founded in 1939 and since that time has grown to 130 full-service branches. America First Credit Union is ranked as one of the top credit unions by assets and memberships in the United States.

Business owners in Utah can take advantage of the many financial products America First Credit Union has to offer. In addition to checking and savings accounts, members can apply for business credit cards, unsecured lines of credit up to $50,000, and secured lines of credit with 7-year repayment terms in amounts up to $100,000.

Additional products and services include commercial vehicle loans, equipment loans, term loans up to $15,000, business acquisition and franchise loans, commercial real estate loans, and SBA loans.

To be eligible for membership, you must live, work, attend school, or worship in one of the five counties in Utah that are served by the financial institution. You also qualify if you are an owner, employee, or supplier for the foodservice industry in Utah, are employed by Select Employer Group, are employed by America First Credit Union, or have an immediate family member or household member that meets eligibility requirements.

Utah Non-Profit Lenders

Best Nonprofit Integrations For QuickBooks Online

If you don’t qualify for traditional loans, you may find the financing you need through a non-profit lender. From startups to businesses in underserved communities, these non-profit lenders in Utah can help you get the money you need to start or expand your business.

Utah Microloan Fund

The Utah Microloan Fund — also known as the UMLF — has provided entrepreneurs and business owners with low-interest loans since 1991. The UMLF focuses on distributing funds to new businesses and startups, businesses that lack collateral for traditional loans, and businesses that have credit challenges.

The UMLF has several different loan programs available to business owners in Utah. The traditional UMLF loan has maximum borrowing limits of $50,000 with terms up to 72 months. Interest rates are set at the prime rate plus 4% to 7%. An origination fee of 3% to 6% is added to the cost of the loan.

There are two different options for UMLF’s Seed Funding Loan: an unsecured loan and a loan secured with collateral or a cosigner. When secured with collateral or a cosigner, the maximum borrowing amount is $10,000. With no collateral or cosigner, the maximum amount is $7,500. Both loans have terms up to 36 months and interest set at the prime rate plus 7.5% to 8.5%. Each loan has an origination fee of 3% of the loan amount.

To qualify for a loan, all interested business owners must complete loan orientation and the loan application packet. Once submitted, the borrower will be contacted if the application is approved. Once approved, borrowers will work with the organization to refine business plans and cash flow statements. Business plans and cash flow statements will be presented in front of the organization’s loan committee, who will determine if the loan is approved.

Kiva

Kiva is an online non-profit organization that helps entrepreneurs and businesses around the nation get the capital they need when traditional loans aren’t an option. Through Kiva, you can receive up to $10,000 with 0% interest.

To receive a loan, start by filling out the 20-minute application with Kiva. Once approved, invite your friends and family to lend to you through the online platform to prove your creditworthiness. Then, your loan can be viewed by lenders for up to 30 days. Once you receive the money you need, you’ll have up to 36 months to repay your loan.

To qualify, you must live in the US, be at least 18 years old, and use the loan proceeds for business purposes. Your business must be based in the U.S. You must not have any active foreclosures, bankruptcies, or liens on your credit report. Businesses engaged in direct sales, MLM, illegal activities, and financial investing are disqualified. There are no minimum credit score requirements to apply.

Grants For Utah Businesses

startup grants

There are a few grants available for Utah businesses centered on research and development and technology. It’s important to note that there is a lot of competition for these grants, which are awarded to the most innovative small businesses.

Technology Commercialization & Innovation Program

One grant program is the Utah Governor’s Office of Economic Development’s Technology Commercialization & Innovation Program, or TCIP. Through this program, early-stage companies can receive grants to commercialize cutting-edge technology and bring it to the market.

Grants are awarded in amounts from $50,000 to $200,000 to qualifying small businesses. First-time recipients can request up to $100,000. Companies that have received a TCIP grant in the past can request the maximum $200,000. Past recipients have worked in industries including information technology, outdoor products, and energy and natural resources.

To qualify, businesses must submit an application along with documentation and information. All application packets must include a 10-page PowerPoint, a line item budget, financial projections for the next 5 years, a project overview video, a capitalization table, and current financials.

SBIR-STTR Federal Grants

Business owners in Utah can also consider federal grant programs, such as the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) grants. About $2.5 billion in grants are awarded annually to fund small business research and development. Small businesses that receive these grants can use funds to pay for salaries and benefits, overhead costs, supplies and materials, and consultants and subcontractors.

Money is distributed in phases. In Phase I, businesses receive an average of $150,000 to fund a 6-month project to prove the feasibility and technical merit of their ideas and technology. In Phase II, businesses must receive an average of $1 million to spend on a 24-month project to expand on the results from the previous phase and evaluate the commercial potential of the idea or technology. The third and final phase is not funded through grants, but some federal agencies may offer contracts to commercialize the product.

To qualify for these federal grants, all applicants must have 51% ownership in an American-owned business. All businesses must be for-profit and have no more than 500 employees.

A good resource for business owners in Utah is the Utah Science Technology and Research Initiative SBIR-STTR Assistance Center. This center provides training, workshops, seminars, and resources, as well as proposal evaluation and submission assistance.

What To Consider When Choosing A Lender

business loan reasons

You have an idea of the lenders out there and the loan options available to your business. Maybe you’ve even explored a few options on your own. Before you start sending out applications or head out to your local bank branch, ask yourself the following questions to find the best lender for your financial needs.

Why Do I Need A Loan?

This one is a no-brainer for most people, but the answer to this question could help you narrow down your list of potential lenders. Let’s say that you need a loan to purchase a new commercial property. A lender that specializes in short-term loans, lines of credit, or loans with low borrowing amounts can be crossed off your list. Once you determine how you plan to spend your loan proceeds, you can focus on the lenders that best match your needs.

How Much Money Do I Need?

You can narrow your list down further by calculating the total amount you want to borrow. Let’s say that you need $500,000. A lender that loans no more than $50,000 won’t be a match for you. Remember to also calculate how much you can afford. Not only will this help you avoid taking on too much debt, but this is also a factor lenders consider when deciding whether to approve your loan.

Do I Qualify?

Your credit score is 620, so it doesn’t make sense to apply with a lender that won’t even consider a score below 680. Understand a lender’s requirements and make sure that you meet all of them before applying. Do you have enough annual revenue? Does your time in business align with the lender’s requirements? Do you live in a state that is serviced by the lender? If you don’t meet the requirements of one lender, move on to the next.

Final Thoughts

If you’re a business owner in Utah, there are plenty of financing options for your small business. Determine what type of loan you need, how much money you need (and can afford) to borrow, and evaluate your lending options. Remember, the goal of your loan is to better your business — not add to your financial burden — so take the time to find the right loan to overcome your financial challenge.

What’s Next
    • Learn what you can write off as small business tax deductions
    • Business loan options that don’t require a credit check
    • See which business credit cards topped this year’s list

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The Best Business Loans For Good Credit

As a business owner with good credit, you’re in a great position when it comes to loans and other financing options. A good credit score is one of the most important factors lenders consider when assessing risk. In fact, a solid credit score is one factor that puts you in the “low risk” category. That means you’re more likely to qualify for loan and financing options with lower rates and better terms.

However, having good credit isn’t the only piece to the financing puzzle. Before applying for a business loan, it’s important to go into the process knowing more about lender requirements, types of loans available, and what you need to apply for a loan. Read on to learn more about the business loans available for borrowers with good credit and which options are best for your financial situation.

What Is Good Credit?

free credit score monitoring service

If you’ve ever applied for a personal or business loan or any kind of financing, you know how important credit scores are to lenders. Your credit score is a measure of your risk. A good credit score shows that you’re low risk. You pay your debts on time each month, your credit history is free of major blemishes like bankruptcies, charge-offs, and defaults, and you’re a reliable borrower. Because of that, more creditors are willing to work with you.

So, what makes a good credit score? Generally, a score of 700 or above is considered “good” on a scale of 300 to 850, although some lenders may view a score in the high 600s as a good score.

Having a high credit score helps you qualify for more financing options with lower rates, improved terms, and a lower overall cost of borrowing. As a business owner, having a good credit score is extremely important. Whether you want to hire more employees, acquire a business, build new facilities, or receive cash for an unexpected emergency, you’ll have more options with a good credit score.

In this article, we’ll focus on the best loan options for business owners with good credit scores. If your score is holding you back from receiving these loans, however, you still have options. Check out loan options for bad credit to find financing that’s the right fit for you.

Best Loans For Purchasing Equipment

equipment financing

No matter what type of industry you’re in, there typically comes a time when you need equipment. Whether you need tools to manufacture your products, require a delivery or company vehicle, need new appliances, or must purchase a point-of-sale system, all equipment has one thing in common: it costs money. If you need to purchase equipment to expand your business or to replace outdated or broken equipment, and you don’t have the cash up front, there’s a funding option for you: equipment financing.

If you apply for an equipment loan, a lender provides you with the cash needed to purchase equipment. All you have to pay is a reasonable down payment. With good credit, you may even qualify for $0 down financing. After receiving your loan and making your purchase, you can put the equipment into use for your business immediately. Then, you simply pay your lender back through fixed installments that are applied toward the loan principal and the lender’s interest and fees. Once you make all payments as scheduled, the equipment belongs to you.

If you need to upgrade equipment frequently, you may consider another type of equipment financing. With an equipment lease, you sign a lease for a period of time — on average about two years. You agree to make scheduled payments to the lender through the duration of the lease. Once the lease period ends, you can return the equipment and choose a new model. You’ll then sign another lease. You’ll never take ownership of the equipment unless you pay a lump sum at the end of your lease.

Recommended Lender: Lendio

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Lendio is a loan aggregator that connects borrowers with equipment loans from $5,000 to $5 million. Repayment terms for equipment loans are from 1 to 5 years, and interest rates for the most creditworthy borrowers start as low as 7.5%.

Equipment financing can be used to purchase any type of equipment, including software, furniture and fixtures, commercial vehicles, and even solar panels for your facilities. To qualify for equipment financing, you must be in business for at least 1 year, have a credit score of at least 650, and have at least $50,000 in annual revenue.

Best Loans For Business Expansion

Expansion is a huge milestone for your business. Expansion means that you’re growing bigger and getting better at what you do. Unfortunately, opening another office, upgrading your existing facilities, or purchasing a new commercial building doesn’t come cheap. Instead of cleaning out your bank account, fund your expansion with a Small Business Administration loan.

The Small Business Administration has made it easier for businesses to get affordable loans. Even if you’ve been turned down for a traditional loan, you may be eligible to receive a loan through an SBA intermediary lender. Portions of SBA loans are backed by the government, taking some of the risk off of lenders and opening up more low-interest financing options for small businesses.

Recommended Lender: SmartBiz

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Through SmartBiz, you can receive SBA 7(a) commercial real estate loans from $500,000 to $5 million. Your loan can be used to purchase a commercial property or refinance your existing property.

If you’re expanding your business in other ways, SmartBiz also offers working capital and debt refinancing loans from $30,000 to $350,000. These funds can be used for hiring employees, purchasing inventory or equipment, marketing, and other business expansion plans. Interest rates for SmartBiz’s SBA loans are between 6.75% and 9% with repayment terms from 10 to 25 years.

To qualify, you must be an eligible business based in the US and must meet the requirements of a small business as defined by the SBA. You must be in business for at least 2 years. To qualify for a 7(a) commercial real estate loan, your credit score must be at least 675. For working capital and debt refinancing loans, a minimum credit score of 650 is required. Your credit report must be free of recent bankruptcies, foreclosures, settlements, charge-offs, and defaults on government loans. For commercial real estate loans, the real estate that’s purchased must be at least 51% owner-occupied.

Recommended Lender: Fundera

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You can also apply for SBA loans through Fundera. With Fundera, you can receive between $5,000 and $5 million with repayment terms between 5 and 25 years. Interest rates begin at 6.75%, and you can receive funding as fast as 3 weeks after applying.

Most borrowers that are approved for an SBA loan through Fundera have a credit score of 680, annual revenue of at least $180,000, and a time in business of over 4 years. When applying for an SBA loan through Fundera, the lender will walk you through the process and help you select the SBA program that’s right for you, including 7(a) loans, CDC/504 loans, or Microloans.

Best Loans For Working Capital

merchant cash advance industry

You can’t operate a successful business without working capital. While your incoming cash flow should cover daily expenses in theory, sometimes you may fall a little short. This is when a working capital loan can help.

A working capital loan gives you the money you need to cover your operating expenses, from payroll to debt payments. These short-term loans give you access to the money you need right away and are paid back through regularly scheduled payments.

Recommended Lender: BlueVine

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BlueVine offers two financing options for business owners. The first is a line of credit from $5,000 to $250,000. Proceeds from your line of credit can be used as working capital or to fund any business expense. Repayment terms are set at 6 months or 12 months with rates as low as 4.8%. Monthly or weekly payment options are available.

To qualify for a BlueVine line of credit, you must have a credit score of at least 600. You must be in business for at least 6 months and have at least $100,000 in annual revenue.

Another financing option available through BlueVine is invoice factoring. If your working capital has been affected by unpaid invoices, invoice factoring offers a solution. BlueVine has factoring lines up to $5 million with rates starting at 0.25% per week. The lender provides 85% to 90% of the total of your unpaid invoice up front. Once the invoice is paid, you receive the remaining amount, minus the lender’s fees.

To qualify, you must be a B2B business with a minimum credit score of 530 and $100,000 in annual revenue. You must also be in business for at least 3 months to qualify.

Recommended Lender: Breakout Capital

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Another financing option to boost your working capital is a business loan from Breakout Capital. This lender issues loans up to $250,000 with repayment terms up to 24 months. Rates start at 1.25% per month, and you can select from daily, weekly, or monthly repayment schedules. A one-time origination fee of 2.5% of the total loan is charged by the lender. Prepayment rebates are also available if you choose to pay off your loan early.

To qualify, you must be in business for at least 1 year and have a personal credit score of at least 600. Monthly revenue of at least $10,000 is required to receive a Breakout Capital loan.

Breakout Capital also offers FactorAdvantage, an invoice factoring service. Through this service, you can receive up to $500,000 for your unpaid invoices. There are no time in business, personal credit score, or monthly revenue requirements to qualify.

Best Loans For Marketing & Advertising

You have an existing client base, but in order to scale your business and boost your profits, you need more customers. The best way to draw in new customers and clients is with a marketing and advertising campaign.

Unfortunately, effective marketing and advertising cost money — money that may not be in your budget. Instead of putting off marketing your business, consider a term loan to help you fund your marketing and advertising expenses.

A term loan is a loan that provides you with a set amount of money up front which is later paid back through regular installments. Repayment terms are typically spread out over a few years, and payments are made daily, weekly, or monthly toward the principal loan amount and fees and interest charged by the lender.

Since a term loan is for a specific amount of money, it’s important that you know exactly how much you need before applying. Take the time to calculate your marketing and advertising costs to ensure you receive the money you need for your campaign.

Recommended Lender: OnDeck

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OnDeck offers several financing options for your marketing and advertising needs. This lender has short-term and long-term loans available up to $500,000. Short-term loans are repaid within 3 to 12 months and have simple interest rates as low as 9%. Long-term options are available with repayment terms from 15 to 36 months with annual interest rates as low as 9.99%.

To qualify for OnDeck term loans, you must be in business for at least 1 year. A personal credit score of 500 and $100,000 in annual revenue are also needed to qualify. Origination fees of up to 4% are added to your loan, and you can sign up for fixed daily or weekly payments.

If you want a more flexible financing option, OnDeck also has lines of credit up to $100,000 with APRs starting at 13.99%. To qualify for a line of credit, you must be in business for at least 1 year, bring in $100,000 in annual revenue, and have a personal credit score of at least 600.

Best Loans For Cash Flow Problems

No business is immune to cash flow problems. Maybe it’s a slow season or an emergency expense affected your incoming cash flow. Regardless of your financial challenges, you need cash flow to keep your business operating as it should.

If temporary cash flow issues are impacting your operations, consider a financing option such as a merchant cash advance (MCA) a short-term loan to receive the money you need quickly. Merchant cash advances have a reputation for being one of the most expensive forms of financing. However, a financial product like American Express Merchant Financing can provide the benefits of MCAs without the notoriously high fees.

Recommended Lender: American Express Merchant Financing

American Express OptBlue

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Through American Express Merchant Financing, you can receive between $5,000 and $2 million that is repaid over 6, 12, or 24 months. A fixed fee between 1.75% and 20% is charged based on your creditworthiness and other factors, including term length. Your loan is repaid through daily debits or through your receivables, including American Express transactions.

To qualify for American Express Merchant Financing, you must have at least $50,000 in annual revenue and at least $12,000 in annual credit and debit receivables. Your business must accept American Express cards, and you must be in business for at least 2 years.

Recommended Lender: IOU Financial

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If you don’t qualify for American Express Merchant Financing, another short-term option to consider for resolving cash flow problems is a small business loan from IOU Financial. You can apply for $5,000 to $300,000 with repayment terms between 6 and 18 months. A factor rate of 1.15 to 1.31 is charged by the lender.

To qualify, you must sign a personal guarantee. You also need at least 10 deposits each month in your business checking account. A personal credit score of 600, a time in business of at least 12 months, and annual revenue of $120,000 are requirements to qualify for IOU Financial’s short-term business funding.

Best Loans For Cash Shortages

You need to make payroll, but your business banking account is running low. You have upcoming expenses, but the cash just isn’t there. If you’re facing cash shortages in your business, a line of credit can fill in the gaps.

A line of credit is a flexible form of revolving credit. Once approved, your lender will set a credit limit. You can make multiple draws up to and including your credit limit. Most lenders initiate transfers immediately, so you’ll receive the cash you need in your account as quickly as the next business day. You won’t have to wait for approval with each draw, so you’ll quickly and easily receive the money your business needs.

Fees and interest are only charged on the used portion of your credit line. As you make payments, funds will become available to withdraw again as needed.

Recommended Lender: Kabbage

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Kabbage issues lines of credit up to $250,000. Repayment terms are 6 months or 12 months, and your payment is automatically withdrawn each month. Kabbage charges fee rates between 1.5% to 10% for each month you carry a balance.

To qualify for a Kabbage line of credit, you must be in business for at least 1 year. Revenue requirements are: $50,000 annually or $4,200 per month for the last 3 months. There is no minimum credit score required to qualify. Loan approval and your credit limit are based on the performance of your business.

One standout feature of this lender is the Kabbage Card. In addition to taking traditional draws, you can use your Kabbage Card for instant access to capital. Once you use your Kabbage Card, a new loan will be added to your account with the same rates and terms as traditional draws.

Best Loans For Supplies & Inventory

Supplies and inventory are critical for the success of your business. Without your required supplies, your business won’t run efficiently. Without inventory, you won’t be able to service your customers. Your operations may slow down … or even come to a screeching halt.

While your incoming cash flow will often cover the costs of supplies and inventory, there may be times when this just isn’t enough. An emergency expense that comes at the wrong time or a seasonal uptick in sales are just two scenarios where it becomes difficult to handle the burden of purchasing supplies and inventory alone. When this occurs, consider the benefits of inventory financing.

Inventory financing is a loan or line of credit that is used to purchase supplies or inventory to keep your business operating as it should. You’ll receive the upfront cash you need to make your purchase, then repay the loan through regularly scheduled payments. This is an affordable way to purchase your supplies and inventory when your bank account is running low or you don’t want to tie up all your funds.

Recommended Lender: StreetShares

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StreetShares offers several financing solutions for the purchase of supplies and inventory. Through StreetShares, you can receive a Patriot Express line of credit between $5,000 and $250,000 with repayment terms of 3 to 36 months. Interest rates are between 6% and 14%, with a draw fee of 2.95%. Your line of credit is repaid weekly.

Installment loans between $2,000 and $250,000 are also available through StreetShares. You can borrow up to 20% of your annual revenue. These loans come with terms of 3 to 36 months. Interest rates are between 6% and 15% with closing fees up to 4.95%.

To qualify for a StreetShares installment loan or line of credit, you must be in business for at least 1 year and have annual revenue of at least $25,000. A personal credit score of at least 620 is required to receive a StreetShares line of credit.

Best Loans For Emergency Funds

Chart of Accounts

An emergency always strikes when we least expect it and brings with it expenses that just aren’t in our budgets. Emergency funding needs can put a dent in your bank account and temporarily derail your operations.

If you’re stuck without an emergency fund and shuffling around your finances isn’t a viable option, it’s time to consider a business loan. There are multiple financing options that will work for you  — such as credit cards, lines of credit, and short-term loans — but regardless of what you choose, you need financing and you need it fast.

Recommended Lender: American Express Business Loans

American Express OptBlue

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With an American Express business loan, you can receive $3,500 up to $50,000 with repayment terms of 12, 24, or 36 months. Amex loans come with fixed interest rates starting at 6.98% up to 19.97%. Amex loans can be approved within seconds and funds sent within 3 to 5 business days.

To qualify, you must be the cardholder on an eligible American Express Business Card and be a US citizen that’s at least 18 years old. You must also be pre-approved in order to apply.

Recommended Lender: FundBox

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If you don’t qualify for an American Express business loan, another fast financing option for small business owners is Fundbox. You’ll receive a credit decision for a Fundbox line of credit in just minutes. Once approved, you can make your first draw instantly and receive a deposit as soon as the next business day.

Through Fundbox, you can apply for flexible lines of credit up to $100,000. The lender charges fees starting at 4.66% of the draw amount. Repayment terms are set at 12 or 24 weeks.

To qualify, you must have an active business checking account and at least two months of activity in Fundbox-supported accounting software. If you don’t work with accounting software, you can supply bank statements from the last three months. You should also have a minimum annual revenue of $50,000, and your business must be based in the US.

Best Loans For Starting A Business

All of these financing solutions work well for established businesses, but what if you need money to get your business up and running? Time in business and annual revenue requirements could hold you back from receiving a loan, even if you have a high credit score.

Put your good credit to use by applying for a personal loan to use for business. Because it’s a personal loan, factors such as your time in business or revenues won’t be a factor for approval. Instead, the lender will consider your own personal credit history and income when approving your loan. If you have good credit and enough income to support a loan payment, you can receive a very affordable loan that can be used to launch your business or cover startup costs.

Recommended Lender: LendingPoint

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You can receive up to $25,000 with a LendingPoint personal loan. Repayment terms are 24 to 48 months. APRs for LendingPoint personal loans range from 15.49% to 35.99%. Lending Point charges origination fees between 0% and 6% of the total loan amount.

To qualify for a loan, you must reside in one of the 43 states where LendingPoint operates. Applicants in Washington D.C. are also eligible to apply. Additional requirements include a minimum income of $20,000, a verifiable bank account in your name, and a credit score in the 600s.

Recommended Lender: Prosper

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Prosper personal loans are available in amounts from $2,000 to $40,000. APRs range from 6.95% to 35.99%. Repayment terms are 3 years or 5 years.

To qualify for a Prosper loan, you must have a credit score of at least 640. You must also have a debt-to-income ratio below 50%. You must have a source of income, although there are no minimum income requirements. Your credit report must have less than five credit bureau inquiries within the last 5 months, no bankruptcies within the last 12 months, and at least three open trades.

Recommended Lender: Upstart

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Upstart personal loans are available from $1,000 to $50,000. Repayment terms are 3 years or 5 years with fixed rates between 8.89% and 35.99%.

To apply for an Upstart loan, you must be at least 18 years old. Applicants in Iowa or West Virginia are ineligible to apply. You must have a personal bank account with an institution located in the US, and you must have a full-time job, a job offer within the next 6 months, a part-time job, or another source of income. A minimum personal credit score of 620 is required to qualify.

Further credit requirements include no delinquent accounts, bankruptcies, or public reports. You must have less than 6 credit inquiries from the last 6 months, although student loans, mortgages, and vehicle loans are excluded. Upstart will also consider your DTI when approving your loan.

What To Consider When Choosing A Lender

Now that you have an idea of the types of loans available for your business, the next step — if you choose to move forward — is to find your lender. Maybe you’re torn between a few lenders, or you want to do your own research to find the most affordable loan option. When you’re searching for a lender, ask yourself the following questions.

How Much Money Do I Need?

This simple question will help you narrow down the playing field. If you need $100,000 but a lender has maximum loan amounts of $10,000, move on to the next option. Before you apply, know the amount that you need — and make sure it coincides with the amount that you can afford.

Do I Meet All Requirements?

Even if you meet the credit score requirements of the lender, make sure you meet all other requirements as well. Get the most up-to-date view of your credit score by receiving your free credit score online. Most lenders have basic requirement for age and citizenship. However, others have minimum requirements for your annual income and revenues, time in business, and DTI ratio.

How Will I Use The Loan?

Some lenders have restrictions on how loan proceeds are used. For example, an equipment loan can’t be used as working capital. It can only be used to purchase equipment. Plan how you will use the loan to determine which type of loan best fits your financial needs. Then, find a lender that offers this type of loan.

What You Need To Apply For A Business Loan

Improve Business Loan Application

By this point, you should know the amount of money you need (and can afford) and the type of loan that’s best for your business. You may even have a list of lenders that you’re considering. Before you apply, know what to expect before heading into the application process.

For all loans, you’ll need basic information about yourself and your business. This includes:

  • Business Name
  • Legal Name
  • Contact Information: Email address, phone numbers, address
  • Annual Income
  • Annual Revenue
  • Federal Tax ID
  • Social Security Number

Depending on the type of loan and the amount you’re seeking, you may have to provide additional information and documentation, including:

  • Business & Personal Income Tax Returns
  • Profit & Loss Statements
  • Balance Sheets
  • Debt Schedules
  • Voided Check
  • Business Plan
  • Driver’s License

Requirements vary by lender, so make sure to review and submit all documentation requested during the application process. Also, be sure to keep in contact with your lender to provide additional information and documentation as needed until your loan is approved and funded.

Final Thoughts

Having a high credit score will help you obtain a business loan, but don’t lean solely on your solid credit. Research your lenders, know your options, and find products suitable for your financial needs to ensure you get the low-interest, affordable loan your business deserves.

The post The Best Business Loans For Good Credit appeared first on Merchant Maverick.

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Fast Approval Business Credit Cards For Small Business Owners

instant approval business credit cards

When you run a small business, funding needs can arise out of nowhere, leaving you scrambling for the fastest cash possible. This is clearly shown by the frequency with which people search for terms like “instant approval credit cards.” So, how quickly can you really get a new business credit card in your hands, and what can you do to ensure the process goes as rapidly as possible?

What Are Fast Approval Credit Cards?

The terms “fast approval credit cards” and “instant approval credit cards” are used interchangeably to refer to the same kinds of credit cards. Of course, “instant” is an appealing word to use from a marketing perspective. Just remember: if it sounds too good to be true, it most likely is.

Are Instant Approval Credit Cards Really Instant?

In a word: No.

You’ve probably received credit card mailers marked as “preapproved offers,” or, similarly, as offers with “preliminary approval.” Does this mean that if you accept the offer, you get a card to use immediately? Sadly, no, it does not.

When you get that “preapproved” credit card offer, all that means is that the credit card issuer has done a soft pull of your credit score and found that you’re likely to be in the card’s target demographic. However, if you respond favorably to the offer, the card issuer will continue with the underwriting process. Only after the successful completion of this process will you be sent a card — a process which is, of course, not instant, as snail mail is not instant!

Now, there are certain instances where you can get instant (or near-instant) approval for a business credit card and get issued an instant card number after approval. However, keep in mind that most credit card issuers either won’t do this or will only do this with particular cards. American Express is one of the few big players in the industry offering instant card numbers for all its credit cards, yet some consumers still report being unable to get an instant card number after getting approved.

While it may be possible for you to get an instant card number with your fast approval credit card, don’t count on being able to do so. It’s one of the more opaque aspects of the credit card industry, and you might not get an instant number despite getting instant approval for a card that putatively offers this feature. Plus, the instant card number is of limited utility anyway — you won’t be able to use it for in-person purchases.

If My Application Is Approved Instantly, Can I Start Using My Card Immediately?

No matter how quickly you’re approved for a business credit card, you’ll still have to wait for your card to arrive in the mail. Just as there is no such thing as a free lunch, there is no such thing as a truly “instant” business credit card, unless you’re able to obtain an instant card number.

Who Qualifies For Fast Approval Credit Cards?

Fast approval credit cards don’t work similarly for all applicants. The truth is, whether the card you apply for is a “fast approval” card or not, you’re going to be approved more quickly if you have good-to-excellent credit. It’s quite the catch-22, as those most likely to require a credit card in as little time as possible are largely not those with the best credit.

With good or excellent credit, you may well be approved nearly instantly upon meeting the card issuer’s credit and income requirements. When an applicant has less impressive credit, a credit card issuer has more work to do to determine the applicant’s financial worthiness. This results in a process that is less instant than many business applicants would prefer.

To see how credit card approval typically plays out, have a look at the following (taken from Capital One’s application FAQ):

Capital One will attempt to provide a decision in 60 seconds or less. Sometimes system availability affects our ability to make a credit decision or, in some cases, we need to collect additional information. If so, you will receive further details either via email or letter within 7-10 business days.

If your credit isn’t so hot, card issuers are more likely to require “additional information” of you.

Timeline For A Typical Business Credit Card Application

instant approval business credit cards

When you’re seeking to get a business credit card in as little time as possible, there are some simple things you can do to ensure that you don’t end up waiting any longer than is absolutely necessary.

How To Increase Application Speed

If everything goes right, you can often be approved for a new business credit card in less than a minute. Let’s go through what you can do to make this happen.

Check Your Credit Score

When you know your credit score, you can apply for the business credit cards you know you’ll be likely to qualify for. Remember, the more your credit score exceeds the card issuer’s minimum requirements, the more likely it is that you’ll be approved quickly.

Not sure what your credit score is? Don’t pay the credit bureaus just to learn your own credit status! Instead, read our piece on the best free credit score sites and check your credit score without giving a dime to anybody.

Gather Your Business & Financial Information

Be sure to have the following information ready before you apply for a business credit card.

  • Business Name (if you’re a sole proprietor, use your name)
  • Business Address
  • Type Of Business (corporation, partnership, LLC, etc.)
  • Your Business Role
  • Tax ID Number (use your Social Security number if you’re a sole proprietor; use your Employer Identification Number (EIN) for other business types)
  • Years In Business
  • Number Of Employees
  • Annual Business Revenue
  • Estimated Monthly Spending

Head To The Internet

Getting approved for a credit card online is quicker than getting approved via phone or snail mail. Take advantage of that big beautiful Information Superhighway when applying for that business credit card.

Best Overall Fast Approval Business Credit Card

Capital One Spark Classic For Business


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Annual Fee:


$0

 

Purchase APR:


24.74%, Variable

The Capital One Spark Classic For Business is a very solid business credit card — one that offers fast approval to business owners with at least fair (or average) credit.

Spark Classic is the most egalitarian of Captial One’s triumvirate of business credit cards. The card’s minimum credit score is 580, making Spark Classic the only Capital One business card available to entrepreneurs with fair credit. Meet the credit requirements, and you’re likely to get that elusive Instant Approval.

The card’s APR is relatively high and the rewards program is rather modest (you get 1% cash back on all purchases), but the card’s true value lies in its ability to build your credit. Capital One will report your credit activity to multiple credit bureaus (not all issuers of business credit cards do this), which means that with every monthly payment you make on time, you improve your credit score. With enough use, the Spark Classic can help boost your credit score to the point where you’ll be eligible for business cards with lower APRs and better rewards programs.

Best Fast Approval Credit Card With 0% Intro Rate

Chase Ink Business Unlimited


chase ink business unlimited
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Annual Fee:


$0

 

Purchase APR:


15.24% – 21.24%, Variable

Chase Ink Business Unlimited — Chase’s newest business credit card — may have a higher standard for instant approval than the Spark Classic (the Ink Business Unlimited requires an applicant to have good or excellent credit), but if you meet this threshold and are able to get instant approval, the Ink Business Unlimited is an excellent choice for business use, particularly if you have some large purchases to make within a year.

Chase Ink Business Unlimted offers a 0% introductory APR for the first 12 months. This means that if you need to make a large emergency purchase, you can do so without the added pressure of having to pay off your entire balance right away to avoid being hit with interest charges.

The Ink Business Unlimited also offers 1.5% cash back on all purchases, as well as a $500 cash back bonus after you spend $3,000 within the first three months.

Best Fast Approval Credit Card For Cash Back

Capital One Spark Cash Select For Business


capital one spark cash select
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Annual Fee:


$0

 

Purchase APR:


14.74% – 22.74%, Variable

Capital One Spark Cash Select For Business is a business credit card offering instant approval only to those with excellent credit. But if you make the grade, you stand to be handsomely rewarded with a generous cash back program.

Spark Cash Select offers a flat 2% cash back on all purchases. It’s a higher cash back earning rate than you’ll find with most competitors offering a flat cash back rate, and as such is an excellent choice for entrepreneurs with excellent credit looking for a fast approval card with great cash back earning potential. You won’t have to bother tracking spending categories — just earn 2% cash back on all purchases.

As nice as that unlimited 2% cash back is, the card does carry a $95 annual fee after the first year. If you’re dead-set against paying an annual fee, consider Capital One’s Spark Cash card instead.

Capital One Spark Cash For Business


capital one spark cash select
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Annual Fee:


$95 ($0 the first year)

 

Purchase APR:


18.74%, Variable

You’ll earn unlimited 1.5% cash back instead of 2% and your card won’t have Select in the name, but on the plus side, the Spark Cash carries no annual fee.

Best Fast Approval Credit Card For Travel Rewards

Blue Business Plus Credit Card from American Express



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Annual Fee:


$0

 

Purchase APR:


12.99% – 20.99%, Variable

The Amex Blue Business Plus card is a great business card for those looking for travel rewards value. Furthermore, as I mentioned, American Express is one of the few card issuers that will, in many cases, issue you an instant card number after you get approved.

With the Blue Business Plus, you’ll earn 2x rewards on all purchases up to $50,000 each calendar year. Your points can be used to book travel via American Express Travel, a well-regarded travel rewards program. Your points can even be spent on taxi fare in New York City!

An Alternative To Fast Approval Credit Cards: Online Business Lines Of Credit

If you need funding for your business ASAP but are not enthused about the fast approval business credit cards currently available, consider a business line of credit. Lines of credit work more like credit cards than term loans. You borrow funds up to a certain limit and you only pay interest on what you borrow.

Some lenders offer instant approval, in which case the only waiting you’ll need to do will be for the funds to arrive in your account. Let’s take a look at a few business lines of credit offering instant approval.

Kabbage

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Kabbage is well-known for its remarkably quick application process. With Kabbage’s streamlined approval process, you may well be able to start drawing funds within a few minutes of getting approved. Want fast money? Kabbage can deliver.

However, that doesn’t mean Kabbage is all sweetness and light. The costs associated with a Kabbage line of credit are relatively high. You may end up paying 10% of your borrowing amount each month in fees. Your effective APR ranges from 24% to a whopping 99%.

With rapid approval and a maximum borrowing amount of $250,000, Kabbage’s lines of credit hold significant appeal for the entrepreneur in need of fast cash, despite the drawbacks. Now, let’s check out another online lender offering business lines of credit.

Fundbox

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Fundbox’s business lines of credit are easier to qualify for than those of Kabbage — you only need to have a compatible business bank account for at least six months or compatible accounting/invoicing software for at least three months. There are no time-in-business requirements and there’s no strict credit score requirement to meet.

You can establish a maximum credit line of $100,000 with Fundbox, so larger businesses might find Kabbage’s lines of credit more fitting of their needs.

Final Thoughts

It always helps to be aware of your full range of options when looking for expedited business funding. If your poor credit score and/or lack of business track record puts you out of the range of most of the products listed here, you can always consider a secured business card. They don’t typically offer instant approval, but secured business cards are among the easiest business cards to obtain due to the requirement that you post collateral. The arrangement means you’re essentially borrowing from yourself. Read our piece on secured business credit cards for more information.

Want to learn even more about business funding? Check out the following resources.

  • How To Get A Small Business Line Of Credit
  • Business Credit Cards For People With Bad Credit
  • Merchant Maverick’s Small Business Loan Comparison Chart

The post Fast Approval Business Credit Cards For Small Business Owners appeared first on Merchant Maverick.

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How To Finance A Medical Marijuana Dispensary

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

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

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Check Eligibility

Medical Marijuana Dispensary Funding Challenges

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

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

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

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

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

Can I Get A Dispensary Loan From A Bank?

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

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

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

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

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

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

Equity Financing For Medical Marijuana Dispensaries

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

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

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

The Best Loans For Marijuana Businesses

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

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

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

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Short-Term Loans

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

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

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

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

Equipment Financing

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

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

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

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

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

Lines Of Credit

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

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

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

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

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

Merchant Cash Advances

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

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

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

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

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

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

Crowdfunding Your Medical Marijuana Dispensary

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

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

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

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

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

The Best Financing Options For Startups

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

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

The Costs Of Starting A Medical Marijuana Dispensary

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

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

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

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

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

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

Crowdfunding

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

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

Alternative Lenders

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

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

Personal Loans For Business

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

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

Investors

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

Credit Cards

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

What You Need To Qualify For Medical Marijuana Dispensary Business Financing

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

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

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

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

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

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

Final Thoughts

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

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

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The post How To Finance A Medical Marijuana Dispensary appeared first on Merchant Maverick.

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Low Interest Rate Loans: Top Options This Month

Imagine this scenario: You’re a business owner. You’ve been in business for a year or two, and your business is thriving. Until this point, you’ve not taken out a loan. However, your growing business is at a point where it needs extra capital. Maybe it’s time to hire new employees, purchase equipment, or relocate to a larger building.

Now, picture this: You’re ambitious, you have a solid business plan, and you’re ready to launch your business. You need capital to fund your startup costs, but banks won’t even give your business plan a second glance.

Do either of these situations sound familiar? Business loans are notoriously difficult to receive. In addition to a high personal credit score, your business must have a solid credit score, your annual revenue must hit a certain threshold, and most loans require a time in business of at least two years.

If you don’t meet these requirements, what do you do? Do you have any funding options? Are you stuck with business loans that cost an arm and a leg after high interest and fees? Do you wait months — or years — until you can qualify?

Actually, there’s a better solution. If you have at least a fair credit score, you can apply for a low interest personal loan that can be used to fund your startup, cover your operating expenses, or pay for your expansion.

Ready to learn more? Read on to find out more about personal loans, what you need to qualify, and our picks for the best loans for your credit score.

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8.16% – 35.99% APR

620

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6.95% – 35.99% APR

640

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15.49% – 35.99% APR

600

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9.95% – 35.99% APR

580

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discover personal loans

6.99% – 24.99% APR

660

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6.95% – 35.89% APR

600

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6.26% – 14.87% APR

660

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What Is A Personal Loan?

When you receive a personal loan, a bank, credit union, or online lender will provide you with a lump sum of money. The total borrowing amount is based on the amount you request, your credit score and history, and your ability to pay back the loan. You may qualify for an unsecured loan, which is not backed with collateral. If you have a low credit score or request a high borrowing amount, you may receive a secured loan that is backed by collateral,  an asset of value used to guarantee the loan.

In addition to the amount you borrow, fees and the interest charged by the lender will be added onto the loan. You’ll then repay the loan, plus interest and fees, over a set period of time (typically 2 years or longer). The loan is paid back in installments until the balance, fees, and interest have been repaid.

Personal loans can be used for a variety of purposes. Some borrowers may use the loan to consolidate debt, pay off credit cards or high-interest loans, cover an emergency expense, or for other personal financial needs. However, personal loans can also be used for startup costs and small business expenses.

Receiving an affordable business loan can be extremely difficult. Lenders review your business credit score, personal credit score, time in business, and annual revenues. If you’ve only been in business for a short time or you haven’t yet built a business credit history, your options may be limited  — and expensive.

However, if you have a solid credit score, you can receive an affordable personal loan with great rates and terms. Your personal loan can be used to pay startup costs, purchase equipment, hire new employees, or for working capital.

Personal loans are based on your personal credit score, credit history, and income. Your business will not be a consideration for approval, so taking out a personal loan could be a smart financial move if you face challenges that make it difficult to receive a small business loan.

It is important to remember that not all personal loans can be used for business expenses. If you plan to use a personal loan for business purposes, make sure that the lender has not placed limitations prohibiting loan proceeds to be used for this purpose. The recommended options in this article can all be used for business purposes.

Typical Interest Rates & Fees

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When you receive a personal loan, you not only pay back the amount that you’ve borrowed, but you also pay interest to the lender. Banks, credit unions, and other lenders want to work with low-risk borrowers. These lenders evaluate multiple factors to determine the risk level of each loan applicant.

A low-risk borrower would be someone with a high credit score, a solid credit history free of major blemishes, an annual income large enough to cover the cost of the loan, and a low debt-to-income ratio. A high-risk borrower would be an applicant with a low credit score, a spotty credit history, income challenges, and a high DTI.

Being a high-risk borrower comes at a price, in the form of interest. If a high-risk borrower is approved for a loan, the interest rate will be much higher – think 30% or more for personal loans. On the other hand, if you’re a low-risk borrower, you’ll receive a lower interest rate, which means a lower overall cost of your loan.

Borrowers with excellent credit scores can expect to receive an interest rate of around 6%. Based on your creditworthiness and the interest rates of your lender, this number may rise.

That’s why it’s so important to shop around for options. Many lenders offer a prequalification tool that you can use before applying for your loan. This will give you an idea of whether you’re approved and how much you can expect to pay. We’ll discuss this in more detail later in this article.

Another step you can take before you apply for a personal loan is to find out your credit score. There are multiple websites that allow you to access your credit score at no cost. Pull your score, look over your report, and make sure you have a good understanding of your credit history. If you have some credit challenges, you can take a few easy steps to boost your score before applying if you want to receive the best interest rates. While there are loan options available for borrowers with fair or poor credit, you may pay hundreds (or even thousands) more for your loan than a low-risk borrower.

Other costs may include fees charged by the lender. Some loans, such as Discover Personal Loans, come with no additional fees. However, other options may include fees such as:

  • Origination Fees
  • Application Fees
  • Late Payment Fees
  • Credit Insurance Fees
  • Prepayment Fees

Lenders are required to disclose all fees associated with their financial products, so make sure that you review all paperwork and fee schedules carefully to ensure you’re getting the most affordable option.

The Best Loans For Excellent Credit

Discover Personal Loans

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Discover has moved beyond just credit cards to provide qualified borrowers with affordable personal loans. With Discover, you can receive between $2,500 and $35,000 with fixed rates of 6.99% to 24.99% based on creditworthiness. Repayment terms of 36, 48, 60, 72, and 84 months are available so you can build a loan that best fits your financial needs.

One of the biggest benefits of Discover Personal Loans is that there are no origination fees. In fact, if you pay your loan on time each month, there are no additional fees. With Discover, you can receive a same-day decision, although approvals for some borrowers may take additional time. If you decide that you don’t want to take the loan after acceptance, you can return all funds within 30 days without having to pay any interest.

To qualify for a loan, you must be at least 18 years old and a U.S. citizen or permanent resident. A minimum household income of $25,000 is required. Applicants must have a credit score of 660; however, the average credit score of borrowers of a Discover personal loan is reported as 750.

SoFi

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SoFi is a popular lender for personal loans because of its high borrowing limits. You can apply for a loan between $5,000 and $100,000 through SoFi. The fixed rate APR range is between 6.99% and 14.99%. There are no origination fees, prepayment penalties, late fees, or hidden fees with a SoFi loan. Repayment terms are between 3 and 7 years.

To qualify for a SoFi personal loan, you must live in a state serviced by the lender. You must be employed, have sufficient income, or have an offer for employment that begins within the next 90 days. While there is no hard cut-off for credit score requirements, borrowers must have a solid credit history with a credit score in the high 600s.

The Best Loans For Good Credit

Prosper

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With Prosper, you can apply for personal loans of between $2,000 and $40,000. Repayment terms are set at 3 or 5 years. APRs range between 6.95% and 35.99% and are based on creditworthiness of the borrower. Origination fees (between 2.41% and 5%) apply when accepting a Prosper loan.

To qualify for a Prosper loan, you must have a personal credit score of at least 640. Other credit requirements include a DTI below 50%, no bankruptcies within the last year, fewer than five inquiries over the last 6 months, and at least three open trades on your credit report. If you’ve borrowed from Prosper before, you must meet all of the previous conditions, as well as no previous charge-offs of Prosper loans. If you’re a repeat borrower, you must not have been declined for a loan from Prosper within the last four months as a result of delinquency or returned payments on a Prosper loan.

The underwriting and loan verification process may take up to 7 business days. Once approved, funds are transferred to your bank account and should be received within 1 to 3 business days.

Upstart

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Upstart offers loans of $1,000 to $50,000. Interest rates are between 8.89% and 35.99% for qualified borrowers. Repayment terms are 3 years and 5 years. According to Upstart, 99% of approved applicants receive their funding in just one business day after accepting their loans. A one-time origination fee of 0% to 8% of the loan amount will be deducted from the loan before it is issued. There are no prepayment penalties if you choose to pay your loan off early.

What’s unique about Upstart is that your credit score isn’t the only factor used to approve your loan. This lender looks at your credit score, years of credit history, your education and area of study, and job history to determine if you qualify.

However, this lender still has credit requirements. All applicants must have a FICO or Vantage score of at least 620 to qualify, although Upstart will work with borrowers with limited credit histories. Credit reports should be free of bankruptcies, public records, and delinquent accounts. You must have fewer than 6 credit inquiries on your report within the last 6 months, although vehicle loans, mortgages, and student loans are exempt from this requirement. Upstart will also consider your debt-to-income ratio (DTI) before your loan is approved.

You can be prequalified with Upstart within minutes of submitting your application. The underwriting process generally takes 24 to 48 hours. Once you’re approved, you should receive your loan proceeds within 2 business days.

Lending Club

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Through Lending Club, you can apply for personal loans between $1,000 and $40,000. Your loan can be repaid over 3 years or 5 years. Lending Club’s APRs are between 6.95% and 35.89%. The annual interest rate and a one-time origination fee of 1% to 6% of the loan balance are included in the APR. There are no additional fees when you receive a Lending Club personal loan.

To qualify for a Lending Club personal loan, you must have a credit score of at least 600. As with other personal loans, a higher credit score yields a lower interest rate, APR, and overall cost of borrowing. The entire process from application to approval takes about 7 days, while funding may add an additional few days to the timeline.

The Best Loans For Fair Credit

Lending Point

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Lending Point offers personal loans of $2,000 to $25,000. Interest rates are between 15.49% and 30%. Origination fees are between 0% and 6% when taking out a Lending Point personal loan.

While the interest rate may seem high, Lending Point loans are aimed at borrowers with fair credit scores. To qualify for a loan, all borrowers must have a credit score in the 600s. Borrowers must have a minimum annual income of $20,000. All borrowers must be located in one of the 34 states where Lending Point does business. Applicants in Washington, D.C. are also eligible to apply.

Lending Point loans can be approved immediately. Once approved, additional information and documentation are required for underwriting. In most cases, the underwriting process can be completed and the loan approved within hours. After approval, you may receive your funds in your bank account as soon as the next business day.

Avant

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Avant loans are available in amounts from $2,000 to $35,000, although limits vary by state. Term lengths are between 2 years and 5 years, with APRs of 9.95% to 36.99%. An administration fee of 0.95% to 4.75% is applied to your loan.

To qualify, you must have a minimum credit score of at least 580, although most borrowers have a credit score between 600 and 700. Avant loans are available to borrowers in all states except for Colorado, Iowa, Vermont, and West Virginia.

After applying for an Avant loan, you may receive an immediate loan offer. Verification, underwriting, and funding your loan takes only a few business days.

What You Need To Qualify For A Loan

The great thing about all of the loan options discussed in this article is that you can receive them all from the comfort of your home or office. You don’t have to spend hours in a bank with a huge folder full of documents. Instead, you’ll be able to apply for your loan, complete the underwriting and verification process, and receive loan proceeds online.

The information and documentation needed to receive your loan vary by lender. For all the loans mentioned above, you must be a citizen or permanent resident of the U.S. All applicants must be at least 18 years old. You must reside in a state where your lender conducts business. You must also have verifiable income, although limits vary by lender. A checking account is also required for direct deposit of your funds.

No matter what lender you apply with, some basic personal information is always required. This includes your full legal name, date of birth, Social Security Number, and contact information. You will also need to provide information about your annual income and employment.

While this information may be sufficient to prequalify you for a loan, additional information and documentation are typically required during the underwriting process. Some of the most common requirements include:

  • Copy Of Driver’s License
  • Personal Bank Statements
  • Personal Tax Returns
  • Personal Credit Score & Report
  • Proof Of Address: Lease agreement, voter registration, utility bill, etc.

How To Check Your Eligibility

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You’re shopping around for lenders, and you’re ready to make a commitment. Before you dive into the application process, first find out if you qualify for the loan. Lenders have made this easier than ever by offering ways to prequalify directly from their websites.

You should have an idea what types of loans you qualify for before even taking this step by reviewing your credit score and report. If your credit score is in the low 600s and a lender requires a score of 680 to qualify, you’ll know to look at other lending options.

Once you’ve reviewed your score and report and have an understanding of a lender’s requirements, you can fill out a prequalification form on each lender’s website. On this form, you enter basic data such as your name, birthdate, and Social Security Number. You may also need to input the total loan amount you seek, as well as your annual income. Once you’ve submitted the form, you may receive an approval instantly and can proceed with the full application. In some cases, you may be declined for a loan, while other lenders may require additional information.

When you’re shopping around for loans in this way, most lenders only perform a soft credit pull. Make sure this is the case each time you submit a prequalification form. Multiple hard inquiries can not only lower your credit score but can also disqualify you from receiving loans due to a high number of credit inquiries.

Once you’ve been prequalified, most lenders provide you with a tentative loan amount and interest rate. It may be wise to shop around to find the most affordable loan option, also taking into account any additional fees added to the cost of the loan. Once you’ve found the best option for your financial situation, proceed with applying for the loan.

Final Thoughts

Finding a loan for your small business can be tricky. But even when one lender shuts the door, there’s probably another way in (even if it takes a little creativity). With a solid personal credit history, you can find an affordable loan option for your small business via a personal lender — if you take the time to research your options. Good luck and happy borrowing!

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