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

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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

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

The post The Best eCommerce Platforms For Your Small Business appeared first on Merchant Maverick.

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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

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

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Capital One Spark Miles VS Chase Ink Preferred

spark miles vs ink preferred

Business travel. Maybe you hate it, maybe you enjoy it. Either way, for certain types of businesses, work-related travel is an unavoidable expense. Get a business credit card with travel rewards, and you’ll be able to recoup a portion of your travel expenses in the form of points or miles, which can then be used to book more travel, among other things.

Capital One’s Spark Miles for Business and Chase’s Ink Business Preferred cards are two of the most prominent and popular business credit cards for travel rewards. They are similar to each other in many ways, but there are some pertinent differences in the way rewards are earned and used. These differences mean that the Spark Miles card will be a better fit for certain small business owners while Ink Business Preferred will provide more value for businessfolk with different spending priorities.

Let’s sort it all out to determine which of these travel rewards credit cards fits your business needs.

Capital One Spark Miles Chase Ink Business Preferred

$95 (waived the first year)

Annual Fee

$95

18.74%, Variable

Purchase APR

17.99% – 22.99%, Variable

  • 50,000 miles if you spend $5,000 within the first 3 months of opening your account
  • An additional 150,000 miles if you spend $50,000 in the first 6 months
Bonus Offer

80,000 points if you spend at least $5,000 within the first 3 months of opening your account

N/A

Purchase Intro APR

N/A

N/A

Balance Transfer Intro APR

N/A

None

Foreign Transaction Fee

None

2 miles per dollar spent on all purchases

Rewards

3 points per dollar spent on the first $150,000 in combined purchases on travel, shipping purchases, internet/cable/phone services, and advertising purchases made with social media and search engines each account anniversary year; 1 point per dollar on all other purchases

  • Employee cards at no additional cost
  • Points do not expire while your account is open
Other Benefits
  • Points are worth 25% more if redeemed for travel via Chase Ultimate Rewards
  • Points can be transferred to other travel programs on a 1:1 point basis
  • Points do not expire while your account is open
  • Employee cards at no additional cost

Compare

Apply Now

To learn about other business credit cards specializing in travel rewards, check out our recent piece on the best business credit cards for travel.

Image

Eligibility Requirements

Both the Ink Preferred and the Spark Miles cards require a credit score of at least 690 in order to qualify.

Fees & Interest Rates

Neither the Spark Miles card nor the Ink Business Preferred offers an introductory 0% APR period, so we’re starting off even on that front.

The Capital One Spark Miles card offers a variable APR of 18.74%, while the Chase Ink Business Preferred carries a variable APR of between 17.99% and 22.99%. While applicants with the best credit scores may get a better interest rate with Ink Preferred, Spark Miles will give a slightly better interest rate to everyone else, as the rate doesn’t change based on your credit.

While both cards carry a $95 annual fee, the Spark Miles card waives your fee for the first year. Chase Ink Preferred does not.

As for other fees, neither card charges a foreign transaction fee, and while the Spark Miles card charges no balance transfer fee, Ink Business Preferred charges a balance transfer fee of 5%. Overall, Spark Miles comes out ahead when it comes to minimizing fees.

Bonus Offer

Capital One’s Spark Miles card currently offers the most impressive bonus offer of the two cards, but you’ve got to spend a lot in order to get the full bonus. The card offers 50,000 miles if you spend $5,000 within the first 3 months of opening your account and an additional 150,000 miles if you spend $50,000 in the first 6 months. If you’re going to be charging a lot to your Spark Miles card in relatively short order, you stand to pick up 200,000 bonus miles. Not bad! (Keep in mind that this is a limited-time offer)

The Chase Ink Business Preferred card offers 80,000 bonus points after you spend $5,000 on purchases in the first 3 months after opening your account. If you’re going to spend at least $5,000 in your first 3 months of card use but not $50,000 within 6 months, Ink Preferred will give you a juicier bonus, but if you’re going to spend the higher amount, Spark Miles offers the better bonus.

Image

Earning Rewards

Capital One’s Spark business cards tend to have simple and straightforward rewards earning structures, and the Spark Miles card is no exception. You’ll get an unlimited 2 miles per dollar on all purchases. It’s nice to not have to concern yourself with spending categories and earning limits.

Chase Ink Preferred’s reward structure is more complex. You get 3 points per dollar on the first $150,000 per year you spend in combined purchases on travel, shipping purchases, Internet, cable and phone services, and on advertising purchases made with social media sites and search engines. All other purchases get you one point per dollar spent with no earning limits.

The takeaway here is clear: If your business spending falls largely into the Ink Preferred’s bonus categories, you stand to earn more rewards with the Ink Preferred. If your business spending is more varied or is concentrated in areas outside the Ink Preferred’s high earning categories, the Spark Miles card may better benefit your business.

Of course, the value you can extract from your miles/points is relevant to this discussion as it determines how valuable your earned rewards are in the first place. Let’s discuss!

Redeeming Rewards

The Ink Business Preferred card lets you use your points to book travel via Chase Ultimate Rewards. When you do this, your points are worth 25% more than they would be worth otherwise. That’s like having 25% more points at your disposal! The only drawback is that you have to use Chase’s booking portal to book travel and enjoy this 25% value boost. Your other points options? You can transfer your points to one of Chase’s travel partners on a 1:1 point basis or you can redeem for cash (1 cent per point).

With the Spark Miles card, you don’t have to use Capital One’s travel portal to use your miles, though you certainly can. You can just redeem your miles for statement credit after purchasing your tickets elsewhere. Unfortunately, whether you book your travel with Capital One or with someone else, your points won’t get a 25% value boost. And while you can redeem your miles for cash, you’ll only get a half-cent per mile for them, making your miles half as valuable when used on things other than travel. We don’t recommend doing this!

While the Spark Miles card allows for more flexibility in terms of how you can use your miles for travel, the 25% value boost you get with Ink Preferred when using Chase’s travel portal is a major plus. Additionally, the points you earn with the Ink Preferred are twice as good as your Spark Miles points if you want to redeem your points for cash. Slight edge goes to the Ink Business Preferred.

Benefits & Other Perks

Both cards offer a similar array of travel and shopping benefits, such as extended warranty protection, auto rental collision damage waivers, and travel/emergency assistance. Both cards also offer access to Visa SavingsEdge, a program that lets you save up to 15% off on certain purchases from participating merchants.

Again, neither card carries a foreign transaction fee, so you can make purchases when traveling abroad to your heart’s content.

Which Is Best For Your Business?

The Spark Miles card and the Ink Business Preferred card have some characteristics in common, but their main points of departure are their respective rewards programs and their bonus offers.

Choose Chase Ink Business Preferred If…

  • Your business spending largely aligns with the Ink Preferred’s high points earning categories (travel, shipping purchases, Internet/cable/phone services, advertising purchases made with social media sites and search engines)
  • You want to enjoy the 25% value bonus you’ll get for your points when booking travel (and you don’t mind sticking to Chase’s travel portal)
  • You have excellent credit and you want a potentially lower APR

Chase Ink Business Preferred



Apply Now 

Annual Fee:


$95

 

Purchase APR:


17.99% – 22.99%, Variable

Choose Capital One Spark Miles If…

  • Your business spending is varied and doesn’t align with the Ink Preferred’s high earning categories
  • You really don’t want to be restricted in how you redeem your miles for travel
  • You plan to spend enough within the first 6 months that you stand to benefit from the Spark Miles’s bonus offer of 200,000 miles

Capital One Spark Miles For Business


Compare

Annual Fee:


$95 ($0 the first year)

 

Purchase APR:


18.74%, Variable

Final Thoughts

It would be nice if I could give you a clear winner in this battle of the business credit card titans. The truth is, some small business owners will be better served by Chase Ink Business Preferred while others would do well to choose Capital One Spark Miles. Hopefully, this article will help you determine which group you fall into.

Unsure if you’ll qualify for one of these cards? Check out these links for help!

  • How To Improve Your Personal Credit Score
  • Best Free Credit Score Sites
What’s Next
    • Check out the top 8 small business startup loan options
    • Business loan options that don’t require a credit check
    • Your guide to low-cost SBA loans

The post Capital One Spark Miles VS Chase Ink Preferred appeared first on Merchant Maverick.

“”

The Best Airline Credit Cards For Businesses

One of the best ways a frequent flyer can save money is through a credit card designed specifically for air travel. These cards often give you bonus miles when you purchase airfare or spend money on other travel expenses. Plus, you can usually earn miles for making regular purchases, such as for gas or on meals at restaurants. Cards can also come with other perks, such as access to VIP lounges or free checked bags. All in all, having a good, airline-specific card can make your travel cheaper and more relaxing, allowing you to focus on what matters: making your business better.

As with many credit cards, there are numerous options with plenty of variables to consider. Don’t know which one might be the best fit for your business? Keep reading to get the full breakdown.

Best For Recommended Credit Card
American Airlines Barclays AAdvantage Aviator Business Mastercard
Delta Air Lines Delta Reserve Credit Card for Business from American Express
Southwest Airlines Southwest Rapid Rewards Premier Business Credit Card
United Airlines United MileagePlus Explorer Business Card
Alaska Airlines Alaska Airlines Visa Business Credit Card from Bank of America
JetBlue Airways JetBlue Business Card from Barclays
General Travel Capital One Spark Miles Select For Business
Bonus Offer Capital One Spark Miles For Business
No Annual Fee Bank of America Business Advantage Travel Rewards World Mastercard
Rewards Program Chase Ink Business Preferred

How Airline Credit Cards Work

Airline credit cards give you rewards for purchases on travel, usually with a specific airline and—in some cases—when booking at hotels or car rentals. They can give you additional rewards in other categories, too, including purchases on gas, at restaurants, or on cell phone services. Finally, it’s not uncommon to receive rewards for any charges made on the credit card, although your earn rate will often be relatively low.

How Much Are Airline Miles Worth?

This really depends on the airline and the rewards program that comes bundled with your card. As a general rule of thumb, one air mile equals one cent; however, it can frequently be worth more on an array of airlines.

How Can I Redeem Airline Miles?

You’ll be able to redeem your miles when booking flights with the specific airline tied to your card (unless you have a general travel card). Some redemption programs also let you use your miles on other travel-related purchases, such as on hotel rooms or car rentals.

Benefits & Drawbacks Of Airline Credit Cards

Airline credit cards provide frequent flyers with an excellent way to earn rewards simply by traveling. You can also use your card on regular purchases to earn miles, ultimately saving you money when it comes time to book flights. All in all, an airline credit card could be a great tool to add to your business’ money-saving arsenal, especially if there’s already an airline that you use frequently for air travel.

However, airline-specific cards often don’t always offer much flexibility. That’s because you’ll be tied down to one specific airline, both when it comes to how you earn and how you redeem rewards. If you need greater flexibility because you frequent multiple airlines but still want to earn extra rewards while traveling, you’ll likely want a general travel card that’s not connected to a single airline.

Best Credit Cards By Airline

Because many air travel cards are for specific air carriers, you may want something that fits your favorite airline. Here’s a look at the best cards offered by some of the major airlines:

American Airlines: Barclays AAdvantage Aviator Business Mastercard

Barclays AAdvantage Aviator Business Mastercard



Compare

Annual Fee:


$95

 

Purchase APR:


17.99% or 26.99%, Variable

This co-branded card from American Airlines and Barclays offers two AAdvantage miles for every dollar you spend on eligible American Airlines purchases. You’ll also keep that two miles per dollar clip when you make eligible purchases at office supply, telecom, and car rental merchants. Everything else will net you one mile per dollar spent.

Beyond base rewards, the welcome offer grants you 50,000 bonus miles once you make a purchase within your first 90 days. You’ll further nab a 5% AAdvantage mileage bonus on your account anniversary based on the total number of miles earned using your card.

Other benefits include a free checked bag for you and up to four companions on American Airline itineraries as well as a companion fare for one guest after you spend $30,000 during an account year. In addition, the AAdvantage Aviator Business Mastercard carries no foreign transaction fees and boasts preferred boarding.

Those that frequent American Airlines may also want to check out the AAdvantage Platinum Select World Mastercard from CitiBusiness. It packs in the same base rewards as the Aviator Mastercard; however, it lacks in terms of the extra perks and benefits.

Delta Air Lines: Delta Reserve Credit Card for Business from American Express

Delta Reserve Credit Card for Business from American Express



Compare

Annual Fee:


$450

 

Purchase APR:


17.74% – 26.74%, Variable

Frequent flyers of Delta will want to consider the Delta Reserve Credit Card for Business from American Express. Expect to snag two miles for every dollar you spend on Delta purchases. Everything else will earn one mile per dollar. It’s also worth noting that if you have SkyMiles membership, you’ll earn an additional five miles per dollar on Delta-marketed flights. That means you’ll rack in an impressive seven miles per dollar when you fly Delta.

Otherwise, this card offers 40,000 bonus miles and 10,000 Medallion Qualification Miles when you spend $3,000 in your first three months. Further perks include 15,000 bonus miles and 15,000 Medallion Qualification Miles each calendar year when you spend $30,000, plus you’ll be able to double those bonuses when you break $60,000 spent in a calendar year. There are also some other standard travel bonuses, such as a free checked bag, priority boarding, and complimentary access to Delta Sky Club.

Do be aware that there’s a rather hefty $450 annual fee bundled with this card. That means you’ll need to spend a decent amount to offset the fee.

Other options for Delta riders include the Gold Delta SkyMiles Business Credit Card and the Platinum Delta SkyMiles Business Credit Card, both from American Express. Both are bundled with the same base reward rate as the Delta Reserve card, but don’t pack the same punch when it comes to additional perks.

Southwest Airlines: Southwest Rapid Rewards Premier Business Credit Card

Southwest Rapid Rewards Premier Business Credit Card


southwest point value

Compare

Annual Fee:


$99

 

Purchase APR:


17.99% – 24.99%, Variable

If you fly Southwest regularly and are looking for a business credit card to pick up Southwest-specific rewards, the Southwest Rapid Rewards Premier Business Credit Card from Chase is your only option. It doles out two points per dollar on Southwest purchases and one point per dollar on everything else.

You’ll be able to check your first two bags for free and you won’t have to worry about change fees. If you make $3,000 in purchases during your first three months, you’ll be rewarded with 60,000 bonus points. You’ll pick up some more bonus points on your account anniversary, too, as this card dishes out 6,000 points.

Points also stick around as long as your account is open, so you won’t need to worry about spending points quickly. However, do note that this card does carry a $99 annual fee.

United Airlines: United MileagePlus Explorer Business Card

United MileagePlus Explorer Business Card


Compare

Annual Fee:


$95 ($0 the first year)

 

Purchase APR:


17.99% – 24.99%, Variable

Fly United? Your sole option is the United MileagePlus Explorer Business Card from Chase. Like most airline-specific cards, this card will give you two miles per dollar spent on tickets purchased from United. As an extra perk, you’ll also earn two miles per dollar when you buy at restaurants, gas stations, and office supply stores. For all other purchases, you’ll get the standard one miles per dollar.

Outside of those base rewards, United and Chase will reward you with 50,000 bonus miles when you spend $3,000 on purchases in the first three months your account is open. You can further nab 10,000 bonus miles after you spend $25,000 on purchases each calendar year. You’ll also get priority boarding and additional employee cards can be requested for free. As an extra bonus, the card’s $95 annual fee is waived the first year.

Alaska Airlines: Alaska Airlines Visa Business Credit Card from Bank of America

Alaska Airlines Visa Business Credit Card from Bank of America



Compare

Annual Fee:


$50

 

Purchase APR:


16.99% – 24.99%, Variable

Those that frequent Alaska Airlines will need to look no further than the airline’s Visa business card co-offered by Bank of America. This card grants you three miles per dollar spent when you make purchases directly with Alaska Airlines and one mile per dollar on everything else.

For extra perks, you’ll get a companion fare ($0 fare for a companion plus taxes and fees starting at $22) plus 30,000 bonus miles when you make $1,000 in purchases during your first three months. Additionally, you’ll get a companion fare every account anniversary. You also don’t need to worry about foreign transaction fees when traveling internationally or blackout dates when redeeming rewards. There is, however, a $50 annual fee (plus $25 per employee card).

JetBlue Airways: JetBlue Business Card from Barclays

JetBlue Business Card from Barclays



Compare

Annual Fee:


$99

 

Purchase APR:


17.99% to 26.99%, Variable

JetBlue regulars will want to look at the airline’s business card that’s offered in conjunction with Barclays. For this card, expect to earn six points per dollar spent on JetBlue purchases, two points per dollar at restaurants and office supply stores, and one point per dollar on all else.

You can also take advantage of JetBlue’s 50,000 bonus point welcome offer by spending $1,000 during your first 90 days. Other benefits include 5,000 points every account anniversary, one free checked bag for you and up to three companions, and 50% savings on eligible in-flight purchases. You also won’t need to worry about foreign transaction fees, and you can collect $100 in statement credit annually when you purchase a JetBlue Vacation package for $100 or more.

As for annual fees, this card will cost you $99 annually, but you won’t have to worry about points expiring for as long as your account is active and there are no blackout dates when redeeming rewards.

Best General Travel Card: Capital One Spark Miles Select For Business

Capital One Spark Miles Select For Business


Compare

Annual Fee:


$0

 

Purchase APR:


14.74% – 22.74%, Variable

Capital One’s Spark Miles Select For Business dishes out a simple (and unlimited) 1.5 miles for every dollar you spend—no dealing with categories or figuring out if something is eligible. On top of that, this card has no annual fee, which means that you won’t need to worry about spending a certain amount to make the card worth it.

Because this card isn’t connected to a specific airline, you can use your miles on a vast array of travel purchases, including flights, hotel rooms, and travel packages. Capital One simply requires that you book your trip through a travel website, travel agent, or other travel resource while using your card. You can then use the Capital One’s Rewards Center to redeem your miles and receive an account credit for the cost of your travel purchase.

Other perks include 20,000 miles if you spend $3,000 in purchases within your first three months. You can also request additional employee cards for free and there are no foreign transaction fees.

Best Bonus Offer: Capital One Spark Miles For Business

Capital One Spark Miles For Business


Compare

Annual Fee:


$95 ($0 the first year)

 

Purchase APR:


18.74%, Variable

Capital One also offers a second travel card in the form of Spark Miles For Business. This card is similar to the Select version with a simple rewards scheme. However, it grants an unlimited two points per dollar spent instead of 1.5. Do note that this card includes a $95 annual fee, so you’ll have to spend a decent amount to cover that cost with rewards.

With that in mind, Capital One bundles in a healthy bonus offer of 50,000 miles if you spend $5,000 in your first three months and 150,000 miles when you spend $50,000 in your first six months. Besides that, the annual fee is waived for the first year, meaning that you can really reap rewards throughout your first 12 months.

Like with the Select, you’re able to redeem your miles on a vast array of travel purchases, ranging from flights to hotel rooms to travel packages. You’ll simply need to book your trip through a travel website, travel agent, or other travel resource while using your card. You can then redeem your miles through the Capital One’s Rewards Center to receive an account credit for the cost of your travel purchase.

Best For No Annual Fee: Bank of America Business Advantage Travel Rewards World Mastercard

Bank of America Business Advantage Travel Rewards World Mastercard


bofa business advantage travel rewards
Compare

Annual Fee:


$0

 

Purchase APR:


13.24% – 23.24%, Variable

If you’re looking to snag some travel rewards without dealing with an annual fee, Bank of America has you covered with their Business Advantage Travel Rewards World Mastercard. This options nets you an unlimited 1.5 points per dollar spent on all purchases. Besides that, when you book travel through Bank of America’s Travel Center you’ll double your reward rate to three points per dollar.

There are also several other ways to earn more rewards. To start, Bank of America will hand you 25,000 bonus points when you spend $1,000 during your first 60 days. Additionally, if you enroll in the Business Advantage Relationship Rewards program, you can nab an additional 25% – 75% rewards boost to every purchase.

Bank of America includes a few more perks, too. This card requires no foreign transaction fees and you’ll get a 0% introductory APR period for the first nine months.

Best Rewards Program: Chase Ink Business Preferred

Chase Ink Business Preferred



Apply Now 

Annual Fee:


$95

 

Purchase APR:


17.99% – 22.99%, Variable

For the best overall rewards program, our pick goes to Chase’s Ink Business Preferred. This card, which works as a general travel card, doles out three points per dollar spent (up to $150,000) on travel, shipping purchases, Internet, cable and phone services, and on advertising purchases made with social media sites and search engines each account anniversary year. You then get one point per dollar spent on everything else.

The real advantage, however, comes in how you redeem points. If you redeem points through Chase Ultimate Rewards for travel, you’ll get 25% more value. On top of that, Chase allows you to transfer your points to an array of airline and hotel reward programs on a 1:1 basis.

Beyond its excellent options for redeeming points, the Ink Business Preferred also comes with no foreign transaction fees and employee cards can be requested for no additional cost. Chase also bundles in a welcome offer of 80,000 points when you spend $3,000 or more during your first three months. However, there is a $95 annual fee to keep in mind.

Final Thoughts

If you’re still looking for a credit card to suit your travel needs, check out our best business cards for travel. You can also use a personal card for business—an especially handy tactic if your favorite airline doesn’t feature a business credit card. Read our guide to using a personal credit card for business to learn more.

The post The Best Airline Credit Cards For Businesses appeared first on Merchant Maverick.

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Financing And Loan Options For Manufacturing Companies

Operating a manufacturing business is extremely rewarding. Whether you’re creating products that ship directly to retailers or you’re working with other manufacturers, the potential for profits is great. However, as you’ve likely already seen in your business, owning a manufacturing company isn’t all smooth sailing. In order to make those big profits, you have to invest in your business.

Once you have steady cash flow, it’s easy to cover day-to-day operating expenses. But what happens when your bank account is running a little low or a major expense poses a threat to your operations? From emergencies to expansions to cash flow shortages, there are multiple scenarios where you fall a little short financially.

Instead of worrying, take action. When your manufacturing business has an expense you can’t handle on your own, there are loan and financing options for any situation. Don’t panic if you’re unsure of where to start. In this post, we’ll cover the types of loans available for your business, how to choose the right lender, and what to expect when it’s time to apply.

Read on to learn more and take the next step to fund your manufacturing business.

Financing Need Best Loan Type Recommended Lender
Purchasing Equipment Equipment Financing Lendio
Purchasing Materials Line Of Credit FundBox
Business Expansion SBA Loan SmartBiz
Cash Shortages Invoice Factoring BlueVine
Hiring, Training & Covering Payroll Term Loan OnDeck
Marketing & Advertising Business Credit Card Chase Ink Preferred

How To Finance A Manufacturing Company

Your business is unique, and so are its financial needs. The type of loan or financial product you select is primarily centered on how you plan to use your funds. For example, if you want to purchase real estate, you should seek out long-term, low-interest options instead of a short-term loan. If you need to cover this month’s payroll, an equipment loan won’t help you out. The key is to identify why you need the money and select the right financial solution for your situation.

Purchasing Equipment

No matter what type of manufacturing business you operate, you need equipment to keep operations running efficiently. If you manufacture clothing or garments, sewing machines and pressing machines are essential equipment. If you operate a furniture manufacturing business, your business needs saws, planers, sanders, and other expensive tools and equipment.

Over time, your equipment may become old and outdated. Or maybe your equipment is still in good working order but you need to add more as part of an expansion. Either way, buying equipment doesn’t come cheap, and funding these expenses out-of-pocket can be tough, if not impossible. Instead of breaking the bank, you have a more affordable option: equipment financing.

Equipment Financing

When you receive an equipment loan, your lender will fund the full purchase price of your equipment. After paying a small down payment of 10% to 20%, you can take possession of the equipment and put it into use immediately. Then, you’ll simply make scheduled payments to your lender, which are applied to the balance of your loan (and toward any additional fees and interest charged for taking the loan).

With a high credit score, you may be able to qualify for $0 down financing. However, if at all possible, you should make a down payment to lower your scheduled payments and reduce the overall cost of borrowing.

Equipment loans can only be used to purchase equipment, including machinery, tools, furniture, fixtures, and vehicles. When you receive equipment financing, additional collateral is typically not required. Instead, the equipment being financed serves as the collateral and can be repossessed if payments are not made as agreed. Once your loan has been paid off, the equipment is yours to keep, sell, or trade.

Equipment leases are another option to consider. When you take out an equipment lease, you can use the equipment for a set period of time, such as 2 years. At the end of your lease, you have two options: pay a lump sum to purchase the equipment or return the equipment and sign another lease for new equipment. Unless you pay the remaining balance at the end of the lease, you will never take ownership of the equipment. This may be a good option for you if you update your equipment frequently or if you desire a lower down payment and lower monthly payments.

Recommended Option: Lendio

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Lendio isn’t a lender; rather, it is a loan aggregator that matches you with a lender that best fits your needs. One of the financial products offered through Lendio’s service is equipment loans.

Through Lendio, you can apply for $5,000 to $5 million to finance your equipment purchase. Repayment terms are available from 1 year to 5 years, with interest rates as low as 7.5%.

To qualify with a lender through Lendio’s network, a time in business of at least 12 months is required. You must also have at least $50,000 in annual revenue and a personal credit score of 650. If your credit score falls below this threshold, solid cash flow and revenue could still help you qualify for financing.

Purchasing Materials

Image of hands holding credit card and pressing a keys of keyboard

As a manufacturer, you need materials to manufacture your goods to sell to other manufacturers or retailers. When you don’t have the right materials, you can’t produce your goods, which negatively affects your revenue. If financial troubles prevent you from buying the materials you need, keep your business operating without a hitch by using a line of credit for your purchases.

Lines Of Credit

A line of credit is a flexible form of revolving credit. Instead of receiving a lump sum payment, your lender will assign a credit limit. You can make draws from your credit line as often as you need for any amount within your set limit. This is ideal when you need to make multiple purchases over a period of time or you’re unsure of the exact amount of money you need.

You can use your line of credit for any business expense, including purchasing supplies, materials, and inventory. Once you make a draw from your line of credit, the funds are typically transferred immediately and will be deposited in your business bank account as soon as the next business day. Interest or fees are charged only on the used portion of the credit line. As you pay down your balance, the funds will become available for you to use again.

It’s easy for most business owners to qualify for a line of credit. However, the best rates and terms and the highest credit limits are given to the most established, creditworthy businesses.

Recommended Option: FundBox

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FundBox provides revolving lines of credit up to $100,000. When you make a draw, payments are made over a period of 12 or 24 weeks. Equal payments are made weekly and are withdrawn directly from your checking account.

Fees for drawing from your Fundbox line of credit start at 4.66% of the total draw amount. Your fee will be based on the health of your business. If you repay early, any remaining fees are waived, helping you save money.

To qualify for a Fundbox line of credit, you must have a business checking account and at least $50,000 in annual revenue. You must show two months of activity in Fundbox-supported accounting software. If you don’t have activity in accounting software, bank statements from the last three months are acceptable.

Business Expansion

Your business is growing, and it’s time to expand. There’s just one problem: expansion costs money that you don’t have. Purchasing commercial real estate, funding improvements for your facility, building an addition, or constructing a new building all come at a price that even the most successful manufacturing companies can’t pay up front. When it’s time to expand your business, move forward with confidence with the help of a Small Business Administration loan.

SBA Loans

The Small Business Administration provides a variety of resources to help small business owners succeed. One of the best resources is the organization’s low-cost, flexible loan options. SBA loans are available through lenders known as intermediaries. This could be banks, credit unions, or nonprofit organizations.

If you’ve applied for a business loan through a traditional lender like a bank, you may have been turned down. With an SBA loan, your chances for approval are higher because these loans are guaranteed by the government in amounts up to 85%, so there’s less risk for the lender.

One of the most popular types of loans for large expenses like business expansion is the 7(a) loan. With a 7(a) loan, up to $5 million is available to qualified businesses for nearly any business purchase, including commercial real estate, land development, improvements and upgrades, equipment, and more. Loan terms are set at 10 years for most purposes, although real estate purchases have terms up to 25 years.

The cost of borrowing varies based on the type of loan you select and the amount borrowed. The SBA has a set of standards used by its intermediary lenders to keep interest rates low, making loans more affordable for business owners.

Recommended Option: SmartBiz

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Applying for an SBA loan doesn’t have to be difficult or stressful when you work with a lender like SmartBiz. SmartBiz simplifies the SBA application process, helping you get the money you need as quickly as possible.
There are two types of SBA loans available through SmartBiz: working capital and debt refinancing loans and SBA 7(a) commercial real estate loans.

With working capital and debt refinancing loans, you can apply for $30,000 to $350,000 to use for business expansion, marketing, hiring employees, purchasing inventory, or refinancing existing debt. Interest rates are between 8% and 9% with repayment terms of 10 years. To qualify, you must be in business for at least 2 years and have a personal credit score of at least 650.

SmartBiz also offers SBA 7(a) commercial real estate loans from $500,000 to $5 million. You can use these funds to purchase a new commercial property or refinance your existing property. Rates are between 6.75% and 8% with repayment terms of 25 years. To qualify for this loan, you must be in business for at least 2 years with a credit score of at least 675. Any property funded with loan proceeds must be at least 51% owner-occupied.

Additional requirements for SBA loans include no outstanding tax liens, recent charge-offs, or defaults on government loans. You must not have any bankruptcies or foreclosures within the last 3 years. You must also qualify as a small business based on the SBA’s definition, which limits your company’s net worth, number of employees, and annual revenues.

Cash Shortages

Cash shortages happen to everyone. A seasonal drop in sales, an unexpected emergency expense, or another situation could leave your bank account running a little short. Sometimes, the real problem is your unpaid invoices. For times when money is tight, invoice factoring can help make up for these shortages.

Invoice Factoring

Unpaid invoices can leave you in a financial bind. Instead of waiting weeks or months to receive payment, consider invoice factoring. If you’re a B2B business and you have unpaid invoices, you may qualify for this type of financing. With invoice factoring, a lender pays a large portion of an unpaid invoice directly to you. Once the invoice is paid by the customer, the remaining amount of the invoice is paid to you after the lender takes any fees charged for the service.

With invoice factoring, the invoices are the collateral for the loan. A high credit score is typically not needed to qualify. Your invoices are the most important factor in this type of financing. A lender will ensure that your invoices are a sufficient amount to cover any fees. Lenders will also make sure that your invoices are for customers who are likely to pay.

Recommended Option: BlueVine

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BlueVine has invoice factoring lines up to $5 million. Rates may be as low as 0.25% per week. You can receive approval in as little as 24 hours when working with BlueVine.

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

Hiring, Training & Covering Payroll

It’s time to expand your business, which means hiring and training new employees, but your funding falls short. Maybe you’re not ready for expansion, and your business is struggling just to cover your current payroll. No matter the situation, a term loan can help.

Term Loans

When you apply for a term loan, you’ll receive a lump sum of money that can be used for any purpose, including hiring, training, covering payroll, or for use as working capital. The terms of these loans vary. While some lenders provide loans for up to 12 months, other lenders may offer repayment terms of several years.

If you’re applying for a short-term loan, one difference you may notice is that a factor rate is used to calculate how much you owe. This multiplier is used to determine the one-time fee that is added to the cost of your loan, replacing a traditional interest rate. The factor rate is based on the lender’s policies, as well as the creditworthiness of the borrower.

Other term loans have a traditional interest rate. Your interest rate and repayment terms will be based upon your creditworthiness and ability to pay back the loan.

One thing to note is that some term loans, such as short-term loans with low borrowing requirements, come at a very high cost. As with any other type of financing, shop around to find the best rates and terms for your business.

Recommended Option: OnDeck

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OnDeck has loan options up to $500,000 for qualified borrowers. There are two different loan options available. Short-term loans come with repayment terms between 3 and 12 months. These loans have simple interest starting at 9%.

Loan options with longer terms are also available. These loans come with terms of 15 to 36 months with annual interest rates starting at 9.99%.

For all loans, origination fees are charged by the lender. For the first loan, fees are between 2.5% and 4% of the total loan amount. Subsequent loans have reduced fees.

To qualify, you must be in business for at least one year and have a gross annual revenue of $100,000. You must have a personal credit score of at least 500 to qualify. Daily or weekly payments are automatically deducted from your checking account.

If you’re looking for other financing options, OnDeck also has lines of credit up to $100,000.

Marketing & Advertising

You want to get the word out about your business to bring in more customers and increase your revenue. Word-of-mouth and free social media advertising may bring more customers your way, but you’re not going to scale at a higher level until you launch a paid marketing and advertising campaign.

Marketing and advertising can get expensive very quickly, although the return on investment is often high enough to justify this expense. But what happens when you just don’t have the extra funds to market and advertise your business and services? A business credit card can help, and you can even be rewarded just for using it.

Business Credit Cards

One of the best things about a business credit card is that it can be used any time for any business purpose. When you have marketing and advertising expenses that need to be covered, you won’t have to wait days or weeks to get financing approval. Instead, you’ll be able to use your credit card immediately to cover the expense.

A business credit card is great for marketing and advertising campaigns because you won’t have to request a specific amount. You can use your card as needed to cover any expense, whether it’s marketing and advertising costs or an emergency expense.

When you’re approved for a business credit card, your lender will provide you with a credit limit. Your purchases can’t exceed the credit limit assigned to your card. You can make multiple purchases with different vendors as needed provided you don’t exceed your credit limit. Each month, you’ll pay at least a minimum payment that will be applied to the borrowed balance and the interest charged on used funds.

Business credit cards can be a very expensive form of financing if you only make the minimum payment each month. Cut down on the amount of interest you pay and the overall cost of borrowing by using your credit card responsibly and paying all or a significant portion of your balance each month.

Business credit cards are available for all types of credit situations. Borrowers with the highest scores will receive the lowest rates and highest credit limits, in addition to the best rewards cards, introductory rates, and bonus offers. There are options available for fair credit scores that come with higher rates and lower limits. For bad credit borrowers, a secured card requires a cash deposit but helps you rebuild your credit and qualify for additional cards and financial products with responsible use.

Recommended Option: Chase Ink Business Preferred

Chase Ink Business Preferred



Apply Now 

Annual Fee:


$95

 

Purchase APR:


17.99% – 22.99%, Variable

If you have good to excellent credit and need a business credit card, consider applying for the Chase Ink Business Preferred card. This card has a variable APR of 17.99% to 22.99%. There is a $95 annual fee associated with this card.

This credit card is great for marketing and advertising expenses. You’ll earn 3 points for every $1 spent on advertising purchases with search engines and social media platforms. You’ll also earn 3 points for every $1 for shipping purchases, travel, cable, internet, and phone purchases. It’s important to note that this offer is only valid for the first $150,000 spent in combined purchases.

For all other purchases, you’ll receive 1 point for every $1 spent. If you redeem your points for travel through Chase Ultimate Rewards, they’re worth 25% more, giving you the most bang for your buck.

The Chase Ink Business Preferred Card also has a bonus offer of 80,000 points when you spend at least $5,000 within three months of opening the account.

Does The Government Offer Loans For Manufacturing Companies?

There are so many options when it comes to financing your manufacturing company. You have traditional lenders like banks and credit unions. You have alternative lenders that you can seek out online. You even have government loan options available to you.

One of the most popular government loan options has already been discussed in this post: SBA loans. These loans are backed by the government, so lenders feel more comfortable approving them since there’s less risk. In addition to the 7(a) loan that is open to any qualified small business owner, the SBA has programs for veterans, startups, and businesses operating in underserved areas.

Another option to consider is the United States Department of Agriculture’s Business & Industry Loan Program. This government-backed loan program allows lenders to provide affordable loans to businesses that don’t qualify for traditional financing. Any business that saves or creates jobs in a rural area is eligible to apply. This includes manufacturing businesses.

These loans can be used for almost any purpose, including acquiring a business, updating or constructing facilities, purchasing equipment and supplies, paying startup costs, or for use as working capital. Loan proceeds can also be used to refinance certain types of debt. These loans come with terms between 7 and 30 years. Most loans distributed through this program are between $200,000 and $5 million.

The Best Loan Options For Starting A Manufacturing Business

The options previously discussed work well for established businesses, but what happens when you need financing for a manufacturing business that hasn’t even been started yet? You need capital to fund your venture, but it seems impossible to receive a loan … or is it?

If you need capital to start a manufacturing business, you have to know where to look. At times, you may even have to get a little creative. Since traditional lenders like banks prefer to work with low-risk borrowers, you won’t be able to receive a loan, right? Not exactly. If you have a high personal credit score, you can apply for a personal loan through your bank, credit union, or another lender for money to start your business. Since it’s a personal loan and not a business loan, your business information — or lack thereof — won’t be a consideration for approval. You will, however, need a solid credit score and income that is sufficient to pay back the loan.

Lender Borrowing Amount Term Interest Rate Min. Credit Score Next Steps

$2K – $25K 2 – 4 years 15.49% to 30% 600 Apply Now

$1K – $50K 3 or 5 years 8.16% – 27.99% 620 Apply Now

$2K – $35K 3 or 5 years 6.95% – 35.99% APR 640 Apply Now

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$1K – $40K 3 or 5 years 5.32% – 30.99% 640 Compare

If you don’t want to go that route, there are additional options. Microloans are perfect for startups and new businesses. The SBA Microloans program provides up to $50,000 for startups, new businesses, and established companies. These loans are available through nonprofit intermediary lenders. Other nonprofit organizations also provide microloans to eligible business and startup owners.

You can also look to private investors. Peer-to-peer loans have less stringent requirements than traditional loans and may be an option to explore. You can also spread the word about your business and appeal to investors with crowdfunding. If you have a family member or friend that believes in your business and has money to invest, a loan from that person is a possibility. Just remember, no matter who gives you the money, borrow responsibly, read and understand all contracts, and pay your loan as agreed to start your business off on the right foot.

What To Consider When Choosing A Lender

5 C's of Credit: What Lenders Look For

Now that you’re familiar with the types of loans available for your manufacturing business, you may be tempted to jump online and start an application. Before you apply, you still need to choose a lender. The internet gives us access to more lenders than ever, so you may be tempted to just pick and choose based on what your search engine pulls up. However, a smart business owner knows the importance of shopping around for the best rates and terms.

Before you choose a lender, consider these factors to help narrow down your choices so you can feel confident that you’ve selected the most affordable financing option for your situation.

What Is The Loan Used For?

This question should be easy to answer. Why do you need money? Once you know how you’re using the money, you can choose the type of loan that’s best for the situation. For example, if you need a more flexible option for making purchases or in case of an emergency, apply for a line of credit or credit card. If you want to make an expensive real estate purchase, you don’t want a high-cost, short-term option. Instead, an SBA loan would be the best choice.

Once you know which type of loan you need, you can narrow your search to include only those lenders offering these products. You won’t apply with a short-term lender for an SBA loan or a lender that specializes in equipment loans when you need a flexible line of credit. Choose your loan, then narrow down your pool of lenders based on your business needs.

How Much Money Do I Need?

This is another simple question. How much money do you need? If you want to purchase equipment that costs $150,000, a lender that has maximum loan amounts of $100,000 won’t be a match. Before you fill out an application, calculate how much you need, how much you can afford, and find a lender that offers that amount.

Do I Qualify?

Applying for loans you won’t qualify for is simply a waste of time. If a lender has annual revenue, time in business, or credit requirements you just don’t meet, move on to another option. If you have challenges in these areas, find a lender that works with your specific situation. For example, if your credit score is low, consider loan options that are based on the performance of your business. If you have a new business, apply for loan options that work for startups and new businesses, like microloans. Also, take collateral and down payment requirements into account when selecting your lender and applying for a loan.

One important step to take before you apply for a loan is to know your credit score. Pull your free credit score online and review your credit report for errors. If your financing need isn’t immediate, take steps to raise your score if it’s low. With an improved credit score, you’ll qualify for more financing options that are more affordable and come with more favorable terms.

Do The Rates & Terms Work For My Business?

A loan may help you out right now, but you have to consider whether it will benefit your business over the long term. You want to select a lender that offers loans with the lowest rates and best terms you are qualified to receive. A short-term loan may be funded fast, but daily payments and a high factor rate could become a burden. In this situation, you could save hundreds or even thousands of dollars by waiting for a long-term option with better rates and terms.

Of course, in some situations, getting a loan quickly is important. Even so, shop around to make sure that you get a loan that you’ll be able to afford that has payment terms that are best for your business.

What You’ll Need To Apply For A Loan

Some types of financing for your manufacturing business require very little information about yourself and your business. For example, your name, business name, federal tax ID, social security number, contact information, and annual revenue may be all that’s required to qualify for a business credit card. However, there are other loans that require much more information and documentation before you’re approved.

Before you apply, you can get the specific requirements from your lender. However, you may want to go ahead and gather a few documents, including:

  • Business & Personal Tax Returns
  • Business & Personal Credit Scores/Reports
  • Business & Personal Bank Statements
  • Profit & Loss Statements
  • Balance Sheets
  • Licenses & Articles Of Incorporation
  • Business Plan
  • Future Projections
  • Account Numbers & Balances If Refinancing Debt

Your requirements may vary based on the lender you select, the type of loan you’re applying to receive, and the amount of your loan. Sometimes, a lender may even require additional information after you’ve submitted your application and documentation. Be prepared to offer this additional information promptly to move one step closer to approval and funding.

Final Thoughts

You need money just to keep your manufacturing business operating each day. This amount increases even more when you face a challenging situation, from growth and expansion to emergency expenses.

When you need money, it’s important to not stress yourself out over the situation and remember that you have financial options. Take a deep breath, run some calculations, pick your lender, and apply for the financing you need. You’ll be out of your financial rut and heading toward success again in no time.

The post Financing And Loan Options For Manufacturing Companies appeared first on Merchant Maverick.

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Business Loans And Other Financing Options For Wholesale Distribution Companies

Wholesale distributors play a critical role in the retail supply chain. It is crucial for a wholesale distributing business to be a well-oiled machine: storing manufacturers’ products, then shipping them as needed to retailers, which then sell these products to customers. If the wholesale distributor fails in its critical tasks, retailers won’t have the products they need, leading to many unhappy customers.

Like it is for other businesses, one of the most important resources for the success of a wholesale distribution company is capital. Heavy equipment, warehouse space, and inventory requirements are just a few of the big expenses these companies face. Incoming cash flows certainly help fund day-to-day operations, but what happens when more capital is needed than is readily available in your checking account?

If you’re running short on funds, a business loan can help. Before signing the dotted line for a loan, read on to explore the different types of financing available to you, which options are best for your situation, and how to kick-off the application process.

Financing Need Best Loan Type Recommended Lender
Purchasing Equipment Equipment Financing Lendio
Business Expansion SBA Loan SmartBiz
Purchasing Inventory Line Of Credit Kabbage
Cash Shortages Invoice Financing BlueVine
Emergency Funding Business Credit Card Chase Ink Business Unlimited

Why Take Out A Loan For A Wholesale Distribution Business?

If you’re in the wholesale distribution business, you may be familiar with situations where you’re running a little short on cash. Whether your business is booming and you need to expand your facilities or your bank account is too low to purchase inventory for a seasonal uptick, there will be times when you need extra money.

With a business loan, you’ll receive the money you need right away with the benefit of being able to pay it back over time. Since there are many different types of loans, the type you choose should be based on the unique financial needs of your business.

Purchasing Equipment

As a wholesale distribution company, your business is reliant upon heavy equipment. From forklifts and pallet jacks that are used in your warehouse to delivery vehicles, software, and mailing systems, your business requires equipment to be efficient. Unfortunately, this equipment doesn’t come cheap.

Whether you’re updating your equipment or adding new equipment as part of your expansion, make these large purchases more affordable for your business by applying for equipment financing.

Equipment Financing

Equipment financing is a type of funding that is used for the purchase of equipment. Instead of paying the full cost up front, you’ll pay a smaller down payment — typically 10% to 20% of the equipment’s cost — and be able to put the equipment into use immediately. You’ll make payments on a scheduled basis to your lender on the balance of the loan. Interest is also charged by the lender for providing the service. The equipment purchased with loan proceeds is the collateral for this type of financing.

There are two main types of equipment financing to consider: equipment loans and equipment leases. With an equipment loan, you’ll make a down payment, followed by regularly scheduled payments. At the end of the repayment term, you take ownership of the equipment. At this time, the equipment is yours to keep, sell, or trade. You own it free and clear.

With an equipment lease, you may also pay a down payment, although it’s typically lower than the down payment required with an equipment loan. You’ll make regular payments for the duration of the lease, which is typically around 2 years. Once your lease is over, you return the equipment and upgrade with a new lease, or you may have the option to pay a lump sum to take ownership of the equipment. While you’re essentially “renting” the equipment, a lease may be a consideration if you want a lower down payment or if you upgrade your equipment frequently.

Credit and revenue requirements vary by lender, but borrowers with solid credit histories and strong businesses qualify for the lowest rates, best terms, and lower down payments.

Recommended Option: Lendio

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Lendio isn’t a direct lender. This loan aggregator allows you to submit just one application to connect with multiple lenders, so you can shop for a loan more efficiently. Through Lendio, you’ll find the most affordable equipment loan for your situation.

Lendio offers access to equipment loans from $5,000 to $5 million. Loan terms are spread out over 1 to 5 years, with interest rates as low as 7.5% for the most qualified borrowers.

To qualify, you must be in business for at least 1 year, have a minimum annual revenue of $50,000, and a personal credit score of at least 650. If your credit score doesn’t meet the minimum requirements, you may qualify based on your cash flow and revenue over the last 3 to 6 months.

Business Expansion

Expansion is a good sign — it means that your business is growing. The drawback, however, is that expanding your business takes money, and you may be stalling because you don’t have the funds. When your business is ready to grow, follow the lead of other smart business owners by applying for a Small Business Administration loan.

SBA Loans

The Small Business Administration, or SBA, has loan programs to provide affordable, flexible financing for businesses that encounter difficulties when applying for loans from traditional lenders.

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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SBA loans are backed by the government in amounts up to 85%, so there’s less risk for lenders and higher rates of approval when compared to bank or credit union loans.

There are several programs offered by the SBA. One of the most popular is the 7(a) program. SBA 7(a) loans can be used for almost any business purpose, from real estate purchases to working capital. With a 7(a) loan, you receive up to $5 million with repayment terms up to 25 years. Interest rates are set by the SBA, so these loans are extremely competitive and affordable. SBA 7(a) loans are available through SBA-approved lenders known as intermediaries.

When you’re expanding your business, 7(a) loan funds can be used to purchase land or real estate, pay for improvements in your facilities, or purchase equipment. High borrowing amounts, low interest rates, and flexible usage make 7(a) loans a popular choice among business owners.

For business expansion, another SBA loan to consider is the CDC/504 loan. Through this program, up to 40% of your project costs are funded by an SBA-approved Certified Development Company. A traditional lender provides 50% of the project costs, while you’re responsible for the remaining 10%.

Recommended Option: SmartBiz

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If you’re familiar with SBA loans, you’ve probably heard that the application process is difficult and time-consuming. If the process is intimidating to you, SmartBiz has made it easier for business owners to receive the capital they need.
SmartBiz offers SBA commercial real estate loans for $500,000 to $5 million for qualified borrowers. The interest rate is set at the base rate plus up to 2.75%. As of November 2018, rates are between 6.75% and 8%. Repayment terms are available up to 25 years.

With a commercial real estate loan, you can refinance your commercial mortgage, purchase the property you’re currently occupying, or buy a new commercial property.

SmartBiz also offers working capital and debt refinancing loans between $30,000 and $350,000 with rates between 8% and 9%. Repayment terms for these loans are 10 to 25 years. Loans can be used to purchase equipment, hire new employees, or for other business expansion plans.

To qualify for SBA working capital loans, a minimum credit score of 650 is required. Commercial real estate loans require a credit score of at least 660. The time in business requirement is at least 2 years. No bankruptcies or foreclosures within the last 3 years, open tax liens, and outstanding collections should appear on your credit report.

Anyone who has been delinquent or defaulted on a government loan in the past is not eligible to receive an SBA loan. If real estate is being purchased, the property must be at least 51% owner-occupied. Your business must also be considered a “small business” as defined by the SBA. Depending on the amount of the loan and your credit history, collateral may be required.

Purchasing Inventory

Your retailers depend on you to ship the inventory they need for their brick-and-mortar and online shops. If you don’t have the inventory in stock, you can’t make your shipments. If you don’t make your shipments, you lose business and the revenue that comes with it.

It’s not uncommon to face financial burdens that make purchasing inventory more difficult. A seasonal increase in orders that brings higher expenses, an unexpected emergency, or another situation could prevent you from purchasing needed inventory. Fortunately, there’s a solution: a line of credit that can help you through these tough financial times.

Lines Of Credit

A line of credit works like a credit card. However, instead of using a card to make purchases, you make draws from your line of credit. With every draw, the money is sent directly to your checking account. These funds can be used for any business expense, including the purchase of inventory.

A line of credit is a flexible financing option. Instead of receiving a lump sum for a specific amount, your lender will provide you with a credit limit. You can make multiple draws as needed up to this credit limit. You only pay fees or interest on the portion of the credit that has been used. Most lenders initiate transfers immediately, so you can have funds as soon as the next business day.

Rates, repayment terms, and credit limits vary. With most lenders, a solid credit score yields the best interest rates and terms. If you have a low personal credit score, there are lenders that evaluate the performance of your business to approve your line of credit and set your credit limit.

Recommended Option: Kabbage

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Kabbage provides lines of credit up to $250,000. Depending on the amount borrowed, repayment terms are set at 6 or 12 months. Kabbage charges a monthly fee with rates between 1.5% and 10% on the borrowed portion of funds. If you pay your balance off early, you’ll save money on monthly fees.

To qualify, you must be in business for at least one year. Revenue requirements are as follows: $50,000 in annual revenue or $4,200 in monthly revenues for each of the last three months. When you apply for a line of credit, you’ll link your business accounts — including PayPal, QuickBooks, eBay, and your business checking — so that the lender can assess the health of your business and issue your approval and credit limit. There are no personal credit requirements to qualify.

The application process takes fewer than 10 minutes, and you can be approved immediately. When making draws, transfers are immediate and you can receive your funds as soon as the next business day. However, Kabbage also offers the Kabbage card, which gives you instant access to the funding you need. When using your Kabbage card, a new loan will be taken out with the same rates and terms as traditional draws.

Cash Shortages

Cash shortages happen in any business. In the distribution industry, there are a number of reasons this can occur, including slow-paying customers. It’s not uncommon to have unpaid invoices that have impacted your incoming cash flow. If you’re facing this problem and waiting for payments is affecting your operations, why not use invoice financing to help fill in the gaps?

Invoice Financing

Invoice financing is available for B2B business (like distributors) that are suffering from unpaid invoices and need money immediately to cover business expenses.

The invoices serve as the collateral, and with many lenders, you don’t need a high personal credit score to receive a loan. Instead, the lender will consider the quality and quantity of your unpaid invoices. Your invoices should be of a sufficient amount to cover any fees or interest associated with a loan, and your invoices must be for customers who are likely to pay.

Invoice factoring is one type of invoice financing. The lender pays a portion of the unpaid invoice directly to you. After the lender collects payment from your customer, you’ll receive the remaining balance after fees and interest have been taken out.

With invoice discounting, you’ll receive most of the balance up front. After you collect payment from your customers, you’ll repay the loan along with interest and fees to the lender.

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

Recommended Option: BlueVine

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BlueVine is a lender that provides invoice factoring lines up to $5 million. The factoring fees for receiving the line of credit start at 0.25% per week. BlueVine pays 85% to 90% of your invoice amount up front, and pays the remainder, minus fees, after the invoice is paid.

To qualify, you must have a minimum personal credit score of 530 and a time in business of at least 3 months. You must be a B2B business with qualifying invoices and at least $100,000 in annual revenue. The application process takes about 10 minutes, and you can be approved for financing as quickly as 24 hours after applying.

Emergency Funding

Emergencies happen, and often, these emergencies come with unexpected expenses. When these emergencies occur, time is of the essence. A flexible form of financing, like a business credit card, can help you get over these financial hurdles and even reward you for responsible borrowing.

Business Credit Cards

A business credit card is a great resource to have if an emergency arises. Once you’ve been approved for a business credit card, you can put it into use immediately. You won’t need additional approval to use your card, and you won’t have to wait on money transfers.

Once you’re approved for a business credit card, your lender will set a credit limit. You can make multiple purchases as needed up to this credit limit, so you can cover your emergency, purchase supplies and inventory, or tackle other business expenses. The borrowed portion of funds will incur interest based on the rate assigned by the lender. The sooner you pay down or pay off your balance, the more affordable this financing becomes. As you pay down your balance, funds become available to use again.

With a solid credit history, you’ll receive lower interest rates and a higher credit limit. There are options available for high-risk borrowers with low credit scores, including secured cards, which require a deposit and can help build credit.

Some of the best business credit cards have rewards programs. With every purchase, you’ll receive points to redeem for perks or cash back offers as a reward for responsible use.

Recommended Option: Chase Ink Business Unlimited

Chase Ink Business Unlimited


chase ink business unlimited
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Annual Fee:


$0

 

Purchase APR:


15.24% – 21.24%, Variable

The Chase Ink Business Unlimited card is targeted at borrowers with good to excellent credit. This card comes with no annual fee and an introductory APR of 0% for the first 12 months. After the introductory period, the Chase Ink Business Unlimited has variable APR of 15.24% to 21.24%.

In addition to competitive rates, the Chase Ink Business Unlimited card gives 1.5% cash back on all purchases. The card also has a bonus offer of $500 cash back after spending $3,000 within the first 3 months of opening your account.

If you don’t qualify for the Chase Ink Business Unlimited card due to your credit score, check out other business credit card options for fair credit and bad credit.

The Best Loan Options For Starting A Distribution Business

If you’re an established business with proof of solid performance, getting a business loan isn’t difficult. However, what if your financial needs are different? What do you do when you need money to get your business started?

Getting a loan to start a distribution business can be a challenge. After all, traditional lenders like banks and credit unions want to work with established, low-risk businesses. Because your business is non-existent or very new, you haven’t yet proven yourself to these lenders. But that doesn’t mean you’re completely out of options. You may just have to get a little more creative and dig a little deeper to find a lender that will work with your situation.

In addition to the SBA loans we’ve already discussed, the SBA has a Microloans program that’s suitable for new businesses and startups.

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-approved nonprofit lenders can provide up to $50,000, although the typical loan is around $13,000. Loan proceeds can be used to purchase inventory, supplies, fixtures, furniture, or equipment. Funds can also be used as working capital. Rates can’t exceed the limits set by the SBA and are generally between 8% and 13%. Borrower requirements include a credit score in the high 600s and qualifying as a small business based on the SBA’s definition.

If you don’t qualify for an SBA Microloan, other nonprofit organizations have microloan programs available. Credit requirements, maximum borrowing amounts, rates, and terms vary by lender. In addition to microloans, many nonprofits offer additional resources for new business owners, including training, classes, and mentorships. Looking for a microlender? Check out the options below.

Lender Max. Borrowing Amount Rates Req. Credit Score Next Steps

$500,000

2.9% – 18.72% factor rate

550

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$250,000

9% – 36% factor rate

500

Apply Now

$500,000

9.4% – 99.7% APR

500

Apply Now

Another financing option to cover startup expenses is a personal loan. If you have a high credit score, you may be able to obtain a personal loan with low rates that can be used to fund your business. Approval for a personal loan will be based on your personal credit score and history, as well as your personal income. The following lenders offer reasonable rates for personal loans that can be used for business:

Lender Borrowing Amount Term Interest Rate Min. Credit Score Next Steps

$2K – $25K 2 – 4 years 15.49% to 30% 600 Apply Now

$1K – $50K 3 or 5 years 8.16% – 27.99% 620 Apply Now

$2K – $35K 3 or 5 years 6.95% – 35.99% APR 640 Apply Now

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$1K – $40K 3 or 5 years 5.32% – 30.99% 640 Compare

You can also jump online and look into peer-to-peer lending options and crowdfunding. Peer-to-peer loans are often easier to qualify for than traditional bank loans, while crowdfunding allows you to use a platform to raise money from investors.

Finally, loans from a friend or family member could be an option that works for you. Make sure that any loan agreement is on paper and signed by all parties involved. Be careful to treat the loan just as you would any other by paying it back on time as scheduled.

What To Consider When Choosing A Lender

In order to receive a loan, you have to choose a lender that is willing to work with you. In the past, most business loans were obtained from a bank, credit union, or another traditional lender. Today, there are more options than ever thanks to online lending.

The good news is that with so many lenders, it’s easy to find at least one willing to work with you – even if you have credit challenges, a short time in business, low annual revenues, or other factors that would disqualify you from traditional loans. The bad news is that finding the right lender can be overwhelming. With so many choices, which is best for you? To narrow down the lender pool, ask yourself these key questions to find the best loan for your financial situation.

How Will I Use The Loan?

This should be an easy question to answer. Why do you need a loan? Did an emergency expense pop up out of the blue? Have you been planning an expansion for the last 6 months and you’re ready to take action? By knowing how you plan to use the loan, you’ll be able to select the loan product best for that situation and can narrow down your selection of lenders.

Let’s say you want to expand your business and need a commercial real estate loan. In this case, lenders that offer short-term loans or lines of credit with low limits wouldn’t be the right choice. Instead, you’d want to find lenders that offer long-term loans with low interest rates, like SBA loans.

How Much Money Do I Need?

You should never apply for a loan without an idea of how much you need and how much you can afford to borrow. Taking money just because a lender offers it is can lead to unnecessary debt that can negatively impact your business. Instead, run some calculations and borrow only what you truly need.

Once you’ve figured out how you’re going to use the loan, take the time to figure out what amount would cover that financial need. Going back to the commercial real estate example, you could begin looking at properties online comparable to what you’d like to purchase to get an idea of the market values in your area. If your loan is going to be used to purchase equipment, shop around, get bids and quotes, and have an idea of the total cost of your purchase.

Not only will this help you prevent unnecessary debt, but it can also help whittle down the number of lenders you’re considering. If your loan needs are $500,000, a lender that has maximum borrowing limits of $100,000 can be crossed off of your list.

Do I Meet All Borrower Requirements?

Before you apply for a loan, make yourself familiar with the lender’s borrowing requirements. Time in business, annual revenue, and credit scores are factors considered by most lenders. If you don’t meet the requirements of the lender, you won’t qualify for a loan.

Most lenders perform a soft credit pull when prequalifying you for a loan. A hard credit pull — the kind that shows up on your credit report — is performed further along in the process for most financial products. However, some lenders do perform a hard pull once you hit “Submit” on your application. Avoid an unnecessary inquiry by ensuring that you meet all credit requirements. Before you apply, make sure to check your free credit score online.

Remember, there are many financing options available to business owners, regardless of credit score, time in business, or revenues. Take the time to find the loans that you’re qualified to receive.

Does The Lender Offer Rates & Terms That Work For My Business?

When you select your lender, you want to work with one that will offer you the best rates and terms for your particular situation. A short-term loan that’s funded almost immediately may seem appealing, but a high overall cost of borrowing could put a burden on your business. If you have a solid credit score and a healthy business profile, you should be able to shop around to find rates and terms that are most affordable for you.

If you have credit challenges, there are options available for you. However, there are some drawbacks to these high-risk financial products, like high interest rates and fees or daily payment requirements. If you don’t need the money immediately, you can take steps to boost your credit score so you can apply for a more affordable loan in the future.

What You’ll Need To Apply For A Wholesale Distribution Loan

You’ve decided what type of loan best fits your needs, and you’ve calculated how much you need and can afford. You’ve selected a lender. Now, it’s time to begin the application process. Before you start, there are a few key items the lender will require to approve and fund your loan.

For all loans, you’ll be required to provide basic information about yourself and your business. This includes the name of your business, contact information, your social security number, and your federal tax ID. For some loans, such as business credit cards, this may be the only information you need.

For other loan options, you’ll be required to submit documentation. This documentation will allow the lender to see how your business is performing and if you’ll be able to afford a loan. Documentation requirements vary by lender, but commonly requested documents include:

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

If you’re a new business, you may be required to submit the resumes of all business owners, a detailed business plan, and financial projections. If your loan requires collateral, you’ll submit information about the collateral you’re putting up to back the loan. If no collateral is required, you may still be required to sign a personal guarantee or agree to a blanket lien before receiving your loan. Learn more about business loan requirements.

Application, underwriting, approval, and funding times vary based on the type of loan you’re trying to receive. SBA loans take at least several weeks, while lines of credit and business credit cards may be approved on the spot. During the application process, your lender may need to speak with you to ask questions about information and documentation you’ve submitted or to request additional information. Make sure your lender has current contact information on file and that you make yourself available for calls or emails as needed to continue moving through the loan process.

Final Thoughts

Running a distribution business takes organization, hard work, and capital. As a business owner, it’s your job to bring these things to the table, but it’s understandable when money becomes an issue. A business loan can be an excellent resource to keep operations running smoothly or to grow your business provided you do your planning, shop around for the best rates, and understand what your business can afford.

What’s Next
    • Check out the top 8 small business startup loan options
    • Business loan options that don’t require a credit check
    • Your guide to low-cost SBA loans

The post Business Loans And Other Financing Options For Wholesale Distribution Companies appeared first on Merchant Maverick.

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Business Loans For Auto Repair Shops

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

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

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

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

Loan For Equipment Purchasing

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

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

Equipment Loans

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

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

Equipment Leases

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

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

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

Recommended Option: Lendio

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

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Loans For Supplies & Inventory

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

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

Short-term Loans

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

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

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

Recommended Options: PayPal LoanBuilder

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

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Loans For Working Capital

merchant cash advance industry

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

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

Lines Of Credit

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

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

OnDeck

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

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Loans For Marketing & Advertising

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

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

Business Credit Cards

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

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

Recommended Option: Chase Ink Business Preferred

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

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

Chase Ink Business Preferred



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Annual Fee:


$95

 

Purchase APR:


17.99% – 22.99%, Variable

Loans For Business Startups, Remodeling, Or Expansion

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

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

SBA Loans

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

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

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

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

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

Recommended Option: SmartBiz

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

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

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What To Consider When Choosing A Lender

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

Why Do I Need A Loan?

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

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

Am I Qualified?

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

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

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

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

Do The Terms & Rates Meet My Needs?

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

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

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

Final Thoughts

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

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

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

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Shopify VS Squarespace

Shopify VS Squarespace

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Right away, Shopify and Squarespace both score points in my book for their names. Shopify is all about helping you build an online store where customers can shop — “shop-ify-ing” a regular website, as it were. Squarespace, by comparison, is a more traditional website builder, allowing you to create a literal “square space” (or series of square spaces) where people can view your content and images on the internet.

Thank you, Shopify and Squarespace. Your names actually make sense.

Indeed, Shopify is a household name in the world of shopping cart software, whereas Squarespace is well-known for its attractive and modern site design capabilities. Squarespace is more than just a pretty face, though. In the last few years, this platform has added ecommerce functionality at a surprising level of sophistication.

If you’re here for an epic cage match between Squarespace and Shopify, I’m guessing you’re thinking about both of these platforms in terms of ecommerce. You’re in luck, because this is the precise focus of our comparison. How does Squarespace’s ecommerce functionality and design measure up to the ecommerce powerhouse that is Shopify? How do they compare in terms of pricing, customer service, and payment processing? Keep reading for our take on these and other key facets of Shopify and Squarespace.

Don’t have time to read an entire article? Take a look at our top-rated eCommerce solutions for a few quick recommendations. Every option we present here offers excellent customer support, superb web templates, and easy-to-use software, all for a reasonable price.

 

Pricing

Winner: Squarespace

Both Shopify and Squarespace offer free 14-day trials with no credit card required, and neither charge setup or cancellation fees. From there, the two platforms begin to diverge. Here’s how the differences play out:

Shopify

  • Price Range: Choose from $29/month (Basic), $79/month (Shopify), or $299/month (Advanced) plans. There’s also a $9/month plan (Lite) for selling in-person, for embedding little “buy” buttons on other sites, and for selling on Facebook — but you don’t get an actual online store at all, so we’re leaving this plan out of our comparison for the most part.
  • Annual Subscription Discount: Save 10% when your subscription is paid annually upfront, or 20% if you pony up for two full years. For example, the Basic Plan becomes $26 or $23/month, and the Shopify Plan becomes $71 or $63/month.
  • Subscription Structure: All Basic ($29/month) plans and above include unlimited storage, products, and bandwidth. Higher subscription levels add a few features and additional staff accounts. Subscription levels also affect your Shopify transaction fees and your payment processing fees. Which leads us to…
  • Additional Transaction Fees: If you choose Shopify Payments (powered by Stripe) as your payment gateway, you are not charged any separate transaction fees. As an added bonus, you also see a gradual decrease in your payment processing fees with Shopify Payments as you climb the subscription ladder. However, if you use an alternative payment processor and not Shopify Payments, Shopify does charge extra transaction fees, beginning at 2.0% on the Basic plan. Thankfully, these fees gradually decrease to 1.0% and 0.5% as you increase your subscription.

Squarespace

  • Price Range: For ecommerce capability, you must skip over the $16/month plan and start at the $26/month (Business) level. However, merchants who’d really want to take advantage of Squarespace’s ecommerce features in a manner that’s comparable to Shopify are likely opting for the $30/month (Commerce Basic) or $46/month (Commerce Advanced) plans.
  • Annual Subscription Discount: The Business plan drops to $18, Commerce Basic to $26, and Commerce Advanced to $40 per month when paid upfront in one annual lump sum. You also qualify for a free domain registration for one year when you pay your main subscription annually.
  • Subscription Structure: Similar to Shopify, features are added as you increase your Squarespace subscription level. Bumping up to Commerce Basic or Advanced will eliminate separate Squarespace transaction fees.
  • Additional Transaction Fees: A 3.0% fee (above your gateway fees) is incurred by Squarespace on every purchase if you’re on the Business Plan. This additional transaction fee is eliminated, however, on Commerce Basic and Advanced.

For a direct comparison with Shopify, use the smaller print, month-to-month figures for Squarespace (Commerce Basic $30 and Commerce Advanced $46). Shopify promotes month-to-month figures ($29, $79, or $299).

Confusing enough for you? With all these pricing components, you can’t actually perform a true apples-to-apples comparison of cost. In truth, both Shopify and Squarespace offer a fair market price for their services. I will say that the transaction fee issue is problematic with both companies, especially since many competing platforms have eliminated these extra charges altogether. The good news is that each platform at least offers some way out of these fees.

In the end, I’m primarily basing my pricing verdict on one key factor: Squarespace offers its complete arsenal of features for only $46/month ($40/month if paid annually). In contrast, Shopify reserves its premium features for sellers with much deeper pockets (six and a half times deeper, to be exact). The big question is: does Squarespace offer enough ecommerce features at that $46/month level? The answer will depend on your business needs, but you can keep reading to develop a clearer picture of each platform.

Cloud-Based Or Locally-Installed

Winner: Tie

Your Shopify or Squarespace store will be fully-hosted. No need to download and install either one locally.

Specific Size Of Business

Winner: Shopify

Both platforms allow unlimited bandwidth and products, but Shopify is better at accommodating a wider range of business sizes and product catalogs. In addition, Shopify provides a natural growth option via Shopify Plus, whereas Squarespace offers no enterprise-level plan at this time. On the other hand, if you happen to sell a handful of very expensive products (and that’s what makes your business “big”), Squarespace could still work swimmingly for you.

Hardware & Software Requirements

Winner: Tie

Since Squarespace and Shopify are both SaaS (Software as a Service) platforms, you only need a computer, an internet connection, and an up-to-date browser to use either service. Both also provide Android and iOS apps for managing and editing your store.

Regarding supported browsers, Squarespace edges out Shopify by offering Chrome and Safari support on Linux operating systems, while Shopify only works with Windows and Mac. Meanwhile, Shopify stores are optimized for Samsung Internet in addition to Chrome and Safari browsers when viewed on mobile. Depending on your point of view, these finer points may or may not make a difference, so I’m still calling it a draw in this category.

Ease Of Use

Winner: Shopify

With both platforms specializing in general ease of use, we really need to examine Squarespace and Shopify in terms of usability for ecommerce.

Neither platform has a dedicated setup tutorial inside the dashboard, but both have documentation and instructional videos handy. If you’re accustomed to using or testing popular ecommerce platforms like Shopify, Squarespace will definitely have its own learning curve. Once I got the hang of it, though, I could operate the backend quite smoothly.

When you create a trial account with Shopify, you’re taken to the main admin panel. Shopify’s admin is structured like most ecommerce dashboards I’ve seen. Although you can preview your storefront at any time, your backend functions are kept separate from the storefront.

Shopify Dashboard:

With Squarespace, however, you must choose a theme (you can change it later) before you even get to see your admin panel. Once the admin opens, your dashboard is actually a combination of your backend control panel on the left, and your storefront preview on the right.

Squarespace Dashboard:

Although I can vouch that both platforms are very easy to use in the grand scheme, I find navigation of Squarespace’s backend to be slightly trickier than Shopify’s. The Squarespace UI is structured so that there are more dashboard layers to dig through — and then dig back out of again. Additionally, the left control panel menu changes (or even disappears) depending on what layer you happen to be in at the moment, which can be disorienting. This is in contrast to Shopify’s menu, which remains a fixed anchor point for admin navigation.

Take a quick look at the following screens from each platform to see what I mean:

Add A Product — Shopify:

You can see above that my main menu remains fixed on the left side of the dashboard as I enter my product details.

Add A Product — Squarespace:

With Squarespace, I’m already a couple of dashboard layers in, my left sidebar is gone, and I must dive one more screen deep from here to even enter my price. Also, what is not shown above is that you can’t just jump right in and start adding products with Squarespace like you can with Shopify and other online store builders. Even with Squarespace’s ecommerce-friendly templates, you must create a separate product page for your website first. I admit I had to resort to Squarespace’s documentation to figure this out, since I’m accustomed to ecommerce dashboards that make adding your first product a completely frictionless process.

Adding and managing inventory is just one piece of running an online store, but it remains a reliable ease of use test case. While you can list unlimited products with Squarespace, I think the backend interface is better designed for sellers offering a relatively small number of aesthetically-oriented products. Merchants with a large inventory will appreciate Shopify’s clear menus, efficient navigation, and the way in which product data is ultimately organized.

Features

Winner: Shopify

Shopify is the deserving winner in the features category. With solid out-of-the-box functionality and a rich add-on ecosystem, the blunt truth is that Shopify has spent much more time and resources cultivating features specifically for online sellers.

That said, there are a few features Squarespace offers that even Shopify lacks. Another thing to keep in mind is that Squarespace’s comparatively small feature set may still be just right for certain sizes and types of companies.

Key features of both platforms include:

  • Unlimited products, bandwidth, and storage
  • Free SSL certificate
  • Sell physical or digital products
  • Shipping & accounting integrations
  • Inventory & order management
  • Offer gift cards
  • Create discounts and coupons
  • Checkout on your domain
  • Abandoned cart recovery
  • Guest checkout & customer accounts
  • Real-time, carrier-calculated shipping
  • Analytics & reports
  • SEO tools

I’d say the Shopify versions of some of the above features are stronger or more versatile than the Squarespace versions. For example, the discount engine is much more flexible with Shopify.

Now, here are a few features that differentiate the two platforms:

Shopify

  • App store with thousands of integrations
  • Point of sale integration (Shopify POS or third-party POS)
  • Manual order creation (virtual terminal)
  • Proprietary shipping platform (Shopify Shipping) for carrier discounts and label printing
  • Extensive dropshipping capability
  • Enterprise expansion available via Shopify Plus
  • Abandoned cart recovery at cheaper plan level

Squarespace

  • Unlimited staff contributors on all ecommerce plans
  • G Suite integration (full year free)
  • $100 Google AdWords voucher
  • Free domain for a year if you pay annually
  • Customizable checkout forms
  • In-dashboard product image editing
  • Third-party calculated shipping rates at cheaper plan level

Web Design

Winner: Squarespace

Both platforms offer elegant, modern templates that are fully mobile responsive. Here’s a quick comparison of template stats:

Shopify Themes

  • 67 total templates, most with 2-4 style variations
  • 10 templates are free and supported by Shopify developers
  • Remaining third-party themes cost $140-$180

Squarespace Themes

  • 90 templates organized into 21 template families
  • All templates are free and supported by Squarespace developers

Within these themes, both platforms facilitate the adjustment of fonts, colors, and layouts without any coding experience. In fact, I’d say both services offer more flexibility in this area than the average ecommerce store builder. If you still run into design limitations or simply want to alter the code, each site builder makes it relatively easy to customize your store with HTML, CSS, and Javascript.

The overall web design winner is a tough one to call, because that decision really depends on the type and number of products you intend to sell, with Squarespace catering to smaller catalogs with visual interest. If we were deciding strictly based on the variety of pre-made templates designed for stores selling lots of stuff, Shopify would snag the win.

That said, here are some ways Squarespace stands out when it comes to design:

  • All templates are free, and all are created and supported by Squarespace.
  • Offers a more versatile drag-and-drop editor for page layout customization.
  • Allows you to edit your product images from within your dashboard.
  • Uses a common templating language (JSON), versus Shopify’s own invented language (Liquid).

Was this category too close to call? Share your thoughts in the comments!

Integrations & Add-Ons

Winner: Shopify

Shopify has an impressive app store with around 2500 integrations — more than the vast majority of SaaS ecommerce platforms at large. While add-ons can certainly increase your monthly expenditure with Shopify, there’s no denying that your choices are plentiful. Plus, since a huge community of developers and merchants interact with Shopify apps, you also have access to thousands upon thousands of detailed user reviews.

Squarespace takes a completely different approach to integrations. No app store is offered, but Squarespace spins this as an advantage. Any pre-built integrations (about 70 in total) are already incorporated into your dashboard and fully tech-supported by Squarespace. Aside from payment providers (Stripe, PayPal, Apple Pay) and shipping carriers (UPS, USPS, and FedEx), there are just a small handful of official Squarespace integrations specifically related to ecommerce. Here are a few key add-ons:

  • ShipStation: Order fulfillment
  • Xero: Accounting
  • MailChimp: Email marketing
  • Zapier: Workflow automation, multi-app connector

Just like many Shopify apps, several Squarespace apps have monthly subscription fees of their own. And, just like with Shopify, you can always build custom integrations if you have those skills or can hire someone who does. To put things in quick perspective, however, Squarespace has one official shipping/fulfillment app in ShipStation. Shopify has over 280 choices in its “Orders & Shipping” category, and over 600 results pop up if I simply type “shipping” in the app store’s search bar.

The win in this category goes to Shopify, the reigning monarch of ecommerce integrations. Besides keeping decision-making overload at bay, the trick with Shopify add-ons is to always check the quality (including quality of developer support) and ongoing cost of each integration.

Payment Processing

Winner: Shopify

Shopify wins at payment processing for one primary reason: flexibility. Consider the sheer number of gateway options with Shopify — over 100. With Squarespace, Stripe and PayPal are your only choices. More gateway options means availability in more countries and currencies, more ways for your customers to pay, better odds of finding the perfect processor for your specific needs, and even the opportunity to customize your own pricing model and rates in some cases. With Shopify, you can also accept cryptocurrencies or set up manual payment methods like cash on delivery, money orders, and bank transfers.

This is not the end of the story, however. Factor in the additional transaction fees that may be charged by either platform depending on your situation, as well as Shopify’s payment processing discounts with Shopify Payments (powered by Stripe), and the comparison becomes more nuanced.

As we examine these complications further, keep in mind that the going rate to process ecommerce transactions with most gateways these days is 2.9% + $0.30.

Here’s how your processing will work with Squarespace according to your subscription level:

Squarespace + PayPal and/or Stripe

  • Business ($26/mo.): 2.9% + $0.30, + 3.0% Squarespace fee = 5.9% + $0.30 per transaction
  • Commerce Basic ($30/mo.): 2.9% + $0.30
  • Commerce Advanced ($46/mo.): 2.9% + $0.30

Those are the only potential processing costs you’re looking at with Squarespace. That additional 3.0% Squarespace fee on the Business plan is pretty brutal, but as soon as you upgrade to Commerce Basic for an extra $4/month, it disappears. For this reason, I don’t think the Business plan is a sustainable option for most ecommerce stores.

Now, let’s take a quick look at Shopify, remembering that using Shopify Payments as your gateway provides two perks: 1) no extra Shopify transaction fee on any plan, and 2) decreased payment processing fees as you upgrade your overall Shopify subscription.

Shopify + Shopify Payments

  • Basic ($29/mo.): 2.9% + $0.30
  • Shopify ($79/mo.): 2.6% + $0.30
  • Advanced ($299/mo.): 2.4% + $0.30

Shopify + Alternative Gateway (Generic Example)

  • Basic ($29/mo.): 2.9% + $0.30, + 2.0% Shopify fee = 4.9% + $0.30
  • Shopify ($79/mo.): 2.9% + $0.30, + 1.0% Shopify fee = 3.9% + $0.30
  • Advanced ($299/mo.): 2.9% + 0.30, + 0.5% Shopify fee = 3.4% + $0.30

Another twist is that Shopify Payments is currently only available for businesses located in 10 countries, so you’re stuck with an alternative gateway and that pesky Shopify transaction fee if your country isn’t included. (Squarespace at least doesn’t punish you for something you can’t control — your location.) On the flip side, if you are in one of the supported countries, you could opt to use Shopify Payments in addition to any of the other gateways Shopify offers to increase your customers’ payment options.

In a perfect world, both platforms would let you pick your own processor from among many, and never penalize you with extra transaction fees for any reason! Both Shopify and Squarespace have their own flaws in this regard.

So, what does this all mean for your business? The short answer is math. To determine the real winner in this category for your own company, you must consider your monthly subscription cost to either platform, your average number of transactions per month, and your average transaction size — not to mention the countries and currencies involved. Because the best platform and subscription level for your business depends on these and other factors, I award Shopify the payment processing win for at least making things interesting!

Customer Service & Technical Support

Winner: Shopify

In terms of overall quality of customer support, both Shopify and Squarespace receive mixed user reviews. That said, Merchant Maverick’s own experiences with customer service and technical support would award Shopify the victory in this category. We’ve had better luck contacting the Shopify support team through the available channels — even when they’ve been unaware that we are software reviewers on the prowl.

Shopify also has more available support channels and more open-hours. Take a look:

Shopify

  • Phone: 24/7
  • Email: 24/7
  • Live Chat: 24/7

Squarespace

  • Phone: None
  • Email: 24/7
  • Live Chat: Monday-Friday, 4AM-8PM

Squarespace publishes a whole manifesto on its website explaining why no phone support is offered if you’d like to read it for yourself. Although they don’t come right out and say it, the bottom line is that this helps keep overall costs down. Meanwhile, not being able to contact a live person (even via live chat) after 5pm Pacific time is pretty brutal if you’re running an online store. Squarespace should know better — ecommerce never sleeps:

One final note in this category: both platforms provide several self-help resources — community forums, blogs, video tutorials, webinars, knowledgebase articles, and the like. However, note that Shopify resources are 100% geared toward ecommerce, whereas you’ll have to wade through other topics to find ecommerce resources at the Squarespace site.

Negative Reviews & Complaints

Winner: Squarespace

When comparing user reviews for these platforms, it’s important to keep in mind the difficulty in teasing out feedback on Squarespace that is specifically related to ecommerce. Despite its growing ecommerce capability, Squarespace typically ends up in the generic website builder category on most review sites, with users discussing traditional website building issues.

Those caveats aside, here are some of the most common issues that come up for each platform:

Shopify

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

Squarespace

  • Glitches & bugs
  • Poor/limited customer support
  • Limited theme customization

Of course, traditional website builders tend to get raked over the coals for the slightest theme customization limitations. We’ve already said Squarespace’s design capability is quite good overall, particularly when compared to a lot of shopping cart builders. When customers do criticize Squarespace specifically on ecommerce, there are no consistent patterns emerging so far. For this reason, I award this category to Squarespace based on a “no news is good news” argument. We’ll keep checking back for patterns.

Positive Reviews & Testimonials

Winner: Tie

Both Shopify and Squarespace tend to rate highly for overall customer satisfaction on user review websites. On top of that, both platforms are known for their ease of use and elegant templates. And, along with all the negative review of customer support both software programs have received, users of both platforms have been known to also sing praises for customer support. The combination of these factors led me to call this one a draw.

Once again, we’re faced with the dilemma that there’s not a whole lot of feedback about Squarespace’s ecommerce offerings. I have definitely seen several generic comments, such as “good for ecommerce!” Honestly, I think people are mostly pleased (and perhaps a bit surprised) that there’s some solid ecommerce capability available with Squarespace at all. I haven’t come across many users directly comparing their experiences with the two platforms.

Security

Winner: Shopify

Our combatants are quite close in this category. Both offer PCI (Payment Card Industry) compliance, a free SSL (Secure Socket Layer) certificate for your site, two-factor authentication for logging in to your account, a CDN (Content Delivery Network), and even provide methods for complying with the GDPR (General Data Protection Regulation) laws implemented by the EU in 2018.

The main difference I can see is that Shopify’s checkout pages are covered by an industry-standard, 256-bit shared SSL certificate. Squarespace’s checkout pages are covered by a less-robust, 128-bit certificate. My understanding is that while 128-bit encryption may end up working slightly faster, it’s technically less secure.

Final Verdict

Winner: Shopify

Squarespace put up a good fight in several categories, but Shopify emerges victorious as the better ecommerce website builder. Shopify’s pricing, core feature set, and vast app store can serve budding sellers on the Lite plan, all the way up to enterprise clients using Shopify Plus. Meanwhile, ecommerce was quite literally an afterthought for Squarespace. The platform’s developers have done an admirable job adding features for online selling, but they just can’t compete with Shopify’s dominance here.

As we’ve said time and again in this comparison, Squarespace still provides an interesting option for sellers who’d like to feature a small number of products with aesthetic appeal. Especially if you’ve already been using Squarespace to develop your company story and brand, I’d definitely recommend fully exploring the ecommerce feature set — perhaps by bumping up your subscription for just month or two — before completely abandoning ship for Shopify or another dedicated shopping cart builder.

I’ll offer one more interesting twist before you head off to test Shopify and/or Squarespace for yourself. Some users have actually used the two services in combination. How? By integrating those “buy now” buttons from a $9/month Shopify Lite plan into an existing Squarespace website. It’s a roundabout option, to be sure, but it also gives you access to in-person selling with the Shopify POS app. At any rate, take that as some final food for thought, and best of luck in your search for the perfect ecommerce platform.

The post Shopify VS Squarespace appeared first on Merchant Maverick.

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Retail Business Loans And Financing Options

Owning a retail business isn’t without its challenges. Whether you’re growing rapidly and need extra money for expansion or you’re in the middle of a slow season that’s impacted your cash flow, one thing is clear: you need money for your business to operate smoothly.

Sure, pulling the money you need from your own bank account is ideal, but this isn’t always possible. Maybe the money’s not there … or maybe you don’t want to put yourself in a bind by tying up your funds. In these situations, what do you do when you need a financial helping hand? Take a cue from other smart retailers and find a retail business loan that’s right for you.

There comes a time when most small businesses have to take out a loan, and retail businesses are no exception. The key is to understand your options to find the best, most affordable loan that you can use to take your store to the next level, cover an unexpected emergency, or even get your business off the ground. Read on to learn more about the retail business loan and financing options available for any situation.

The Best Loans For Retail Businesses

Financing Need Best Loan Type Recommended Lender
Business Expansion SBA Loan SmartBiz
Purchasing Equipment Equipment Financing Lendio
Emergency Funding Short-Term Loan LoanBuilder & IOU Financial
Cash Flow Shortages Business Credit Cards Ink Business Preferred from Chase
Purchasing Inventory Line of Credit OnDeck
Purchasing a Point of Sale System POS Financing CDGcommerce

1. Business Expansion

Business is booming, and you’re ready for an expansion. Maybe you’re an online retailer and you’ve decided it’s time to open your first brick-and-mortar store. Perhaps you want to open an additional location, or you want to do a complete overhaul of your facilities. No matter what the situation, your retail business is growing, which is exciting … but also very expensive.

Instead of hindering your growth by draining your checking account, consider applying for a loan that provides the funds you need, but spread out into affordable monthly payments.

Small Business Administration 7(a) Loans

The Small Business Administration is a government organization that provides resources to small business owners just like you. One of the most popular resources the SBA offers small business owners is low-cost loan options. Although there are several great programs to consider, the SBA 7(a) loan is one of the most popular among small business owners.

The SBA 7(a) loan is a loan that can be used for essentially any business purpose. This includes business expansion, the purchase of equipment, to use as working capital, or to even save money by paying off high-interest debt.

Through the 7(a) program, you can receive up to $5 million. Because up to 85% of the loan proceeds are backed by the government, SBA-approved lenders (known as intermediaries) are more willing to give these loans out. This is ideal if you’ve been unable to qualify for traditional loan options.

SBA 7(a) loans have low interest rates capped at a maximum of 4.75% — added to the prime rate — based on the loan amount and your repayment terms. Repayment terms are available up to 10 years for most uses, while loan proceeds being used for commercial real estate come with maximum terms of 25 years. SBA 7(a) loans are available to qualified borrowers with a credit score in the high 600s.

Recommended Option: SmartBiz

The SBA 7(a) loan sounds pretty great, doesn’t it? If you’re interested in this loan, you could visit an intermediary lender in your area, such as a bank or credit union. However, this process can often be a hassle for the busy retail business owner. Simplify the process of applying for an SBA 7(a) loan by working with SmartBiz.

With SmartBiz, you can fill out an easy online questionnaire to find out if you’re qualified for an SBA loan. Once you’re prequalified, the service will match you with a lender and assign a relationship manager to help you through the application process.

Getting approved and funded takes several weeks for most applicants. Other times, the process may drag out over several months if more information is needed by your lender. Even though the waiting time to receive this type of loan exceeds that of other financing options, the low overall cost and the flexibility that comes with the 7(a) loan is often worth the wait for many small business owners.

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2. Purchasing Equipment

Your technology and equipment are seriously outdated. Or maybe your business is growing so fast that your problem is not replacing equipment, but adding more. Instead of spending thousands out of pocket, there’s a more affordable solution when you need to replace or purchase long-term equipment: equipment financing.

Equipment Financing

Equipment financing is a type of business financing used to purchase new equipment for your business. With equipment financing, you’ll be able to take possession of much-needed new equipment immediately without paying the entire cost up front.

With an equipment loan, you’ll pay a down payment that is usually 10% to 20% of the total cost of the equipment. The remaining amount, along with interest and fees charged by the lender, will be loaned to you and is paid back through scheduled payments over a longer period of time. At the end of your repayment period, you will own the equipment. This makes the purchase of new or replacement equipment much more affordable.

Equipment leases are another form of equipment financing. With equipment leasing, you’re essentially paying to use the equipment. At the end of your lease, you can return the equipment and take out another lease on the latest model. Unlike a loan, you will never own the equipment unless you pay a lump sum at the end of the lease. However, if you upgrade equipment frequently or want a lower down payment, a lease may be the right option for you.

Recommended Option: Lendio

If equipment financing sounds like the right loan option for your business, find a lender using Lendio. Lendio is a loan-matching service that connects you with the right lender that offers loans to best fit your needs.

Equipment financing through Lendio lenders is available in amounts from $5,000 up to $5 million. Terms of up to 5 years are available. Interest rates for the most qualified buyers start at 7.5%.

Column Heading Data

Credit limit:

$5,000 – $5,000,000

Term length:

1 – 5 years

Interest rate:

7.5%+

Origination fee:

By lender

Collateral:

Usually the equipment being financed

When using Lendio, you’ll fill out an application and within 72 hours, you’ll receive loan offers from multiple lenders. This allows you to review your options to find the most affordable loan with the best repayment terms.

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3. Emergency Funding

Even if you’re on top of your business and finances, there may come a time when an unexpected emergency arises. It happens to the best of us, usually when we are least prepared for it. If an emergency pops up and you need extra cash immediately, a short-term loan could offer just what you’re looking for.

Short-Term Loans

A short-term loan is exactly what the name suggests: a loan that comes with short terms of 1 year or less. These loans have their benefits for small business owners. Borrowers with low credit scores, a short time in business, or with low annual revenues often qualify. However, the biggest benefit is how quickly you can receive the money with a short-term loan. With some lenders, you can apply, be approved, and have the money in your bank account in just 24 hours.

However, short-term loans don’t come without their drawbacks. This fast form of financing comes at a cost. Short-term loans do not have interest rates, but instead, use something called a factor rate. This fee is paid back along with the principal balance over a short period of time. Often, this factor fee, along with other costs such as origination fees, can make these loans more expensive than long-term options. However, when you’re in a financial bind and need money quickly to keep your retail business running smoothly, a short-term loan may be your best option.

Recommended Options: PayPal LoanBuilder & IOU Financial

PayPal’s LoanBuilder provides short-term funding up to $500,000, which can be repaid over a period of 13 to 52 weeks based on the amount of the loan received. The LoanBuilder application takes just 10 minutes to complete. Once approved, you can receive your funds as soon as the next business day.

Qualified borrowers must be in business for 9 months and have at least $42,000 in annual revenue. All borrowers must have a minimum credit score of 550.

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Another short-term loan option is IOU Financial. This lender offers loans up to $300,000. Requirements include being in business for a minimum of one year, bringing in revenue of at least $100,000, and making at least 10 deposits per month into your business bank account.

Repayment terms are available from 6 to 18 months, and once your loan is 40% paid off, you can renew if additional funding is needed. Repayments are made through fixed daily or weekly payments.

4. Cash Flow Shortages

From time to time, a retail business may face cash flow shortages due to a slow season or other challenges. When this happens, daily operations may be affected. You have the same expenses, but your revenues are down, posing a financial challenge for your business. You don’t have to sit back and let these situations drag your business down. Instead, a business credit card can help you fill in these gaps.

Business Credit Cards

A business credit card provides you with a revolving line of credit that you can use to pay your suppliers, vendors, and other expenses. The issuer of the credit card will provide you with a credit limit. You can spend up to and including that limit, using the card as often as you need.

A business credit card allows you to make an instant purchase without having to wait for approval from the lender. You’ll only pay interest on the amount of the credit line that has been used. Payments are made monthly and are applied to the interest and the balance on your card.

One great feature about business credit cards is that many offer rewards programs. With qualifying business purchases, you can earn cash back or points that can be redeemed toward rewards.

Recommended Option: Ink Business Preferred from Chase

The Chase Ink Business Preferred credit card is a top choice among retailers and other business owners because of its great rewards program. If you spend $5,000 within three months of opening your account, you receive 80,000 bonus points. For every purchase, you’ll continue to rack up points.

This credit card also offers additional benefits not offered by other credit card issuers, such as cell phone protection. This card comes with a variable APR of 17.99% to 22.99% with a $95 annual fee.

This credit card is reserved for borrowers with good to excellent credit. Check out our other top picks in business credit cards.

Chase Ink Business Preferred



Apply Now 

Annual Fee:


$95

 

Purchase APR:


17.99% – 22.99%, Variable

5. Purchasing Inventory

You need inventory, and you need it now. If you need to purchase inventory to keep your business running and time is of the essence, a business line of credit may be just what you need out of a small business loan.

Line Of Credit

With a line of credit, a lender issues you a credit limit. You can make multiple draws up to and including this limit whenever you want. The funds will typically be in your account within a few business days, although some lenders offer immediate transfers.

Interest is only applied to the portion of the funds that have been withdrawn. Interest rates vary by creditworthiness, with the most qualified borrowers receiving rates around 6% while high-risk borrowers may see rates of 20% or more.

Payments are made on a scheduled basis and are applied toward the principal and interest. Repayment terms and schedules vary by lender.

Recommended Option: OnDeck

OnDeck is an alternative lender that provides lines of credit to business owners. Lines of credit up to $100,000 are available to eligible borrowers. Repayment terms up to 12 months are available. Rates are as low as 13.99%, and weekly payments are automatically deducted from your business bank account.

OnDeck is known for its fast application process and low borrower requirements. Borrowers of this loan must have a credit score of at least 600, have been in business for at least 1 year, and have a minimum revenue of $100,000 per year.

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6. Purchasing A Point Of Sale System

POS hardware

 

If you own a retail business, you already know the importance of a point of sale system. This centralized system allows you to keep track of inventory, receive payments, and provide receipts for purchases.

Whether you’ve opened a new store or you want to upgrade your outdated system, you can receive a new POS system without paying a lot of money up front with POS financing options.

POS Financing

POS financing allows you to purchase or lease a POS system without paying the full amount up front. Depending on the company you work with, full financing options for all hardware and software may be available.

In addition to POS financing, you may also consider a credit card processing app. These are usually more affordable, are less complicated, and don’t require lengthy contracts. This option is best for smaller retail businesses, while larger businesses should stick with a full POS system.

Recommended Option: CDGcommerce

CDGCommerce is a retail credit card processing company that offers affordable point of sale systems. The company offers the Harbortouch Echo featuring the CDG POS+ app that can be rented for just $49.00 per month. An annual equipment insurance fee is also required at a cost of $79.00, but compared to the costs of purchasing a system, these fees are quite affordable.

Ready to upgrade but unsure of which POS is right for you? Read on to learn more about choosing the right retail POS system for your business.

When You Want To Start A Retail Business

All of these options are great for established retail businesses, but what if you haven’t even gotten your business off the ground yet? For most aspiring business owners, financing is the barrier that is holding them back.

It may be difficult to qualify for a startup loan. After all, you don’t have the sales, revenues, and financial documents to back up your success. When you want to start a business, you have to get creative with your funding options.

If you want to apply for a business loan, you can look to options such as the SBA Microloan program, which provides up to $50,000 to small business owners. These low-cost loans aren’t easy to obtain, though. You’ll need to make sure that you’re prepared for the lengthy application process by preparing your personal financial documents, creating a detailed business plan, and outlining future projections. Your score must be in the high 600s to qualify.

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

Other startup loan options are available, such as online lenders like Fundwise Capital. For borrowers with a poor credit history, there are other alternative loan options but these often come at a much higher cost.

If you have a high personal credit score, you can also consider taking out a personal loan to fund your startup costs. With a personal loan, your income and personal credit score will be considered. This could potentially help you score a lower cost loan that can be used to start your retail business.

Lender Borrowing Amount Term Interest Rate Min. Credit Score Next Steps

$2K – $25K 2 – 4 years 15.49% to 30% 600 Apply Now

$1K – $50K 3 or 5 years 8.16% – 27.99% 620 Apply Now

$2K – $35K 3 or 5 years 6.95% – 35.99% APR 640 Apply Now

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$1K – $40K 3 or 5 years 5.32% – 30.99% 640 Compare

Ways To Improve Your Chances Of A Successful Application

Improve Business Loan Application

Once you’re ready to apply for your business loan, you can do some prep work in advance to expedite the process. Before you even start filling out an application, the first step is to know your credit score and determine whether it is high enough to qualify for the loan you’re seeking.

You can receive your free credit score online to find out where you stand. Review your credit report carefully for any errors. If there are any negative items on your report, be prepared to explain those to your lender.

If your credit score is low and your funding need isn’t urgent, you may consider taking a few easy steps to raise your credit score. You’ll be rewarded with lower interest rates, better terms, and more financing options.

You can also prepare your paperwork and documentation in advance. Although requirements vary by lender and the type of loan you’ve selected, you’ll generally need a few items, including:

  • Bank Statements
  • Personal Financial Statements
  • Business Balance Sheet
  • Profit & Loss Statement
  • Income Statements
  • Business Licenses
  • Articles Of Incorporation

When the time comes to apply for your loan, you’ll need to know exactly how much you need and why you need the loan. It’s also important to remember that most loans require a blanket lien or personal guarantee. Most lenders require a personal guarantee to be signed by anyone with at least 20% ownership in the business, so be prepared to have all owners ready to sign the contract as needed.

Finally, when you do apply for your loan, be sure to make yourself available to the lender. Sometimes, lenders require additional documentation or have questions about your application. Taking the time to work with your lender will help you finish the process smoothly.

Final Thoughts

Getting a business loan can be tough, whether you’re an established retail business owner or just getting started. However, there are plenty of options available if you take the time to do your research, go into the application process prepared, and have a good reason for taking out the loan which will improve the return on investment for your business.

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