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

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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 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



Apply Now 

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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Loans For Childcare Businesses

Like other small businesses, a childcare business has many expenses. Incoming cash flow should cover most of your expenses, in theory, but sometimes there’s a situation where you need a financial boost. Maybe it’s an emergency expense or a lack of cash flow due to a seasonal lull. On the other hand, business could be booming … so much so that you need to expand your facilities. All of these scenarios have one big factor in common: you need money.

To operate a successful childcare business, you have to cover all of your expenses, planned and unexpected. Whether your bank account is running a little low or you don’t want to tie up all of your funds in one huge expense, there are options available to you. Small business loans are the perfect way to expand your business or to help operations run smoothly through tough financial times.

Ready to learn more? Read on to find out more about loans for childcare businesses, including the types of loans available, how to choose a lender, and the steps you need to take before submitting your loan application.

Financing Need Best Loan Type Recommended Lender
Marketing & Advertising Short-Term Loans LoanBuilder
Supplies & Inventory Lines Of Credit OnDeck
Equipment Purchasing Equipment Loans Lendio
Working Capital Working Capital Loans Credibly
Covering Payroll Installment Loans Fundation
Emergency Funds Business Credit Cards Chase Ink Unlimited
Business Expansion/Remodeling SBA Loans SmartBiz
Cash Flow Shortages Cash Flow Loans BlueVine

Marketing & Advertising Loans

You know that your business is the best. Your current clients know that you run an exceptional child care facility. But how many people don’t know about your child care services?

The key to growing your child care business is to bring in new clients. The best way to do this is by marketing and advertising to parents in your area. Whether you go with old-school methods like business cards and flyers or pay for sponsored ads on social media, you have to advertise your business to maximize your client base. No matter which methods you choose, all marketing and advertising campaigns have associated costs.

Instead of draining your bank account, consider a loan option for your next ad campaign. One of the best options is a short-term loan that breaks down your expenses into smaller payments.

Short-Term Loans

With a short-term loan, you’ll receive a specific amount of money in one lump sum. You’ll then be able to pay back the loan (and fees charged by the lender) over a longer period of time. Many short-term loans have repayment terms of one year or less, although some lenders offer terms up to 3 years. Borrowers typically repay the loan via weekly or monthly payments.

Most short-term loans use a factor rate instead of an interest rate. The factor rate is a multiplier that is used to calculate a one-time fee that is added to the cost of the loan. Similar to interest rates, the lowest factor rates are typically reserved for the most creditworthy borrowers.

Short-term loans work for marketing and advertising expenses because this type of financing allows you to pay over time without paying all costs up front. Since a short-term loan must be for a specific amount, it’s important that you carefully plan out your campaign and research costs to determine how much money you need.

Recommended Option: LoanBuilder

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PayPal’s LoanBuilder provides short-term loans in amounts from $5,000 to $500,000. Repayment terms are set between 13 and 52 weeks based on the amount borrowed. Payments are withdrawn from the borrower’s business bank account on a weekly basis.

It’s easy to qualify for a LoanBuilder loan. Your business must be in operations for at least 9 months. A personal credit score of 550 is required, and you must have at least $42,000 in annual revenue.

Supplies & Inventory Loans

A child care center requires supplies and inventory to keep operations on track and to best serve customers. From office supplies to art supplies, diapers, and toys, your child care center always needs to be stocked, and these expenses can really add up.

When you need extra money to replenish stock and inventory, a line of credit can be a smart option.

Lines Of Credit

A line of credit is a type of revolving credit. With a line of credit, you can make multiple draws of funds up to the credit limit set by the lender.

Payments are typically made on a weekly or monthly basis and are applied toward the principal balance, as well as toward interest or fees charged by the lender. (Fees and interest only apply to borrowed funds.)

A line of credit allows you to have instant access to extra funding whenever it’s needed. If your business runs out of supplies, you can make a draw on your line of credit to purchase what you need. Money that you withdraw is typically transferred immediately and is available in your checking account the next business day.

Recommended Option: OnDeck

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OnDeck offers lines of credit up to $100,000. The most qualified borrowers can receive interest rates as low as 13.99%, although the average borrower receives an interest rate of 32.6%. Repayments are made through weekly automatic withdrawals from your business bank account.

To qualify, your time in business must be at least one year. Annual revenue of at least $100,000 is required, and your personal credit score must be at least 600.

Equipment Purchasing Loans

In addition to supplies, your business also requires long-term, more expensive equipment. This could include computers for your office area, a commercial van for afterschool pickups, furniture, appliances, or security systems.

With an equipment loan, you can get the equipment you need for your business and pay for it over time with affordable scheduled payments.

Equipment Loans

An equipment loan is a lump sum of money provided by a lender for the purchase of equipment. With a loan of this type, the total cost of your purchase will be spread out over time, providing you with an affordable way to purchase expensive equipment. Payments are typically made monthly and are applied to the total amount of the loan plus interest.

With this type of financing, a down payment may be required based on the amount of the loan and your creditworthiness. The equipment being financed is typically the only collateral required, and you’re able to take possession of and use the equipment immediately. Once the loan has been paid off, you become the owner of the equipment.

Recommended Option: Lendio

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Lendio is a business loan aggregator that connects you with multiple lenders with just one application. Lendio has many loan products available for small business owners, including equipment loans.

Equipment loans are available in amounts from $5,000 to $5 million. Loan terms of up to 5 years are available. Interest rates for the most qualified borrowers are as low as 7.5%. Repayment schedules, collateral, and down payment requirements vary by lender.

To qualify, your time in business must be at least 12 months. You need a minimum credit score of 650 and at least $50,000 in annual revenue. If your credit score falls below 650, you may be approved with proof of solid cash flow and revenue for the last 3 to 6 months.

Working Capital Loans

Working capital is needed to keep your business operational. Without working capital, you won’t be able to pay your day-to-day financial expenses.

While a business owner would typically pay these expenses from a checking account, a slow period or unexpected expenses may cause issues with cash flow. When this occurs, you can receive the financing you need with a working capital loan.

Working Capital Loans

A working capital loan can be used to cover the daily expenses of your business. With a working capital loan, you can keep up with your expenses without falling behind. There are many different types of working capital loans, from credit lines to P2P loans.

Depending on the type of loan you select, you will either receive a lump sum or revolving credit. After receiving funds, you will pay back the balance, along with any fees or interest charged by the lender.

Because there are so many options, borrowers with poor credit or a short time in business may qualify for these loans. Some lenders even consider the performance of the business as the most important factor.

Recommended Option: Credibly

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Credibly is a lender that provides working capital loans to businesses with steady revenue. Loans of up to $250,000 are available with repayment terms as long as 17 months. Factor rates start at 1.15. Payments are made daily or weekly.

Even borrowers with low credit scores can qualify for a loan from Credibly. To qualify, borrowers must have a credit score of at least 500, time in business of 6 months, and at least $15,000 in monthly bank deposits.

Payroll Loans

Employee payroll is one of your most important expenses. If a situation occurs and you’re unable to make payroll, this puts you in a bad position. Not only will your employee be unpaid for their hard work, but you’ve created a breach of trust.

For those times when making payroll is a struggle, consider applying for an installment loan to cover your expenses.

Installment Loans

With an installment loan, you receive a lump sum payment that you pay through regular installments. If you receive a loan of this type, you’ll receive the money you need for payroll or other expenses upfront, and you can pay it back over time.

Rates, terms, borrowing amounts, and requirements vary by lender. Depending on your credit history and the type of loans offered by your lender, you may be eligible for short-term or long-term options.

Recommended Option: Fundation

fundation logo

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Fundation provides term loans of $20,000 to $500,000 with repayment terms of 1 to 4 years. Interest rates are between 7.99% and 29.99%. These loans do not require collateral but do require a personal guarantee for all borrowers and a blanket lien for most.

Qualified borrowers must be in business for at least one year and have at least three employees. You must have at least $100,000 in annual revenue and a credit score of at least 660. Although qualifying for a Fundation loan is more difficult than qualifying for other options, it’s a more affordable option for borrowers with good credit than other products (such as short-term loans).

Emergency Loans

 

Your business is doing well. Money is coming in and all of your expenses are covered. Then, it happens: an unexpected emergency.

An emergency expense can completely throw a wrench in your business finances. When tapping into your emergency fund or shuffling around your finances to make everything work just isn’t enough, a business credit card can help you get through this tough situation.

Business Credit Cards

A business credit card is a type of revolving credit that is used to cover business expenses. When a lender approves you for a credit card, you’re given a set credit limit. You can use the card up to this limit for any business purpose.

The great thing about a business credit card is that you won’t have to wait to receive funding. Once you’ve been approved for the card, you can use it as needed to cover your emergency or other expenses.

You can even be rewarded for using your card. Sign up for a card with a rewards program and receive cash back and bonuses each time you use your card for qualifying purchases.

Recommended Option: Chase Ink Unlimited

Chase Ink Business Unlimited


chase ink business unlimited
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Annual Fee:


$0

 

Purchase APR:


15.24% – 21.24%, Variable

If you have good to excellent credit, the Chase Ink Unlimited card is a top pick in business credit cards. This credit card comes with an introductory APR of 0% for the first 12 months. After that period, the variable APR is 15.24% to 21.24%.

If you spend $3,000 or more within the first 3 months, you’ll receive $500 cash back. You can also receive unlimited 1.5% cash back rewards on every purchase. Employee cards are also available at no charge.

Business Expansion & Remodeling Loans

Your business is growing and flourishing, and it’s time for an upgrade. Whether you want to remodel your existing space, open a second location, or move your business into a new building, one thing’s for certain: it takes money to expand your business.

Most of us aren’t in a position to foot the bill to expand a business, but with Small Business Administration loans, you won’t have to tackle this financial hurdle alone.

Small Business Administration Loans

The Small Business Administration provides many useful resources to small business owners, including low-cost, flexible business loans.

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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The SBA offers several loan programs through intermediary lenders. The 7(a) program provides up to $5 million for 10 to 25 years at low interest rates for qualified borrowers. The drawback is that it can take weeks — or in some cases, months — to get funded.

With an SBA Express loan, you’ll receive an approval decision within 72 hours, but loan limits are capped at $350,000.

The SBA CDC/504 loan is used for commercial real estate purchases and improvements. The SBA will provide up to $5 million toward 40% of project costs. A traditional lender will provide 50%, while the borrower is responsible for the remaining 10%.

SBA loans require credit scores in the high 600s with no bankruptcies, foreclosures, or past defaults on government loans. All businesses must also meet the standards of a small business as defined by the SBA.

Recommended Option: SmartBiz

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SmartBiz makes applying for an SBA loan easier than ever. Through this lender, you can apply for commercial real estate loans and working capital loans.

Commercial real estate loans are available in amounts from $500,000 to $5 million and come with interest rates between 6.75% and 8%. Working capital loans are available for $30,000 to $350,000 with interest rates from 8% to 9%.

SmartBiz charges fees for SBA loans, including packaging fees, referral fees, guarantee fees, and closing costs.

To qualify for either loan, your business must be in operations for at least 2 years. Credit score requirements are at least 650 for working capital loans and 660 for commercial real estate loans. To qualify for a commercial real estate loan, your business must use at least 51% of the property that you’re purchasing.

Cash Flow Loans

monetize

Every business encounters situations where there’s a shortage of cash flow. Your child care center is no exception. From a slowdown in business after school begins to parents becoming stay-at-home moms and dads, there are many different scenarios that could lead to a cash flow shortage.

A lack of cash flow can cause financial troubles to pile up. Before a minor issue becomes a huge problem, look to a cash flow loan to help you push through.

Cash Flow Loans

A cash flow loan is used specifically to address gaps in cash flow. There isn’t just one type of cash flow loan. You can resolve cash flow shortages with short-term loans, installment loans, lines of credit, or invoice financing.

Because you have so many options, finding a cash flow loan isn’t too difficult, even if you’re a newer business or have a poor credit history. Loan options are available to business owners with scores as low as 500. Some lenders may approve you based on the strength of your business and not just your credit score. Revenue and time in business requirements vary by lender.

Recommended Option: BlueVine

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BlueVine provides lines of credit up to $250,000 that can be used to resolve cash flow shortages. The lender offers repayment terms of 6 or 12 months. BlueVine charges up to 1.5% interest per week, along with a draw fee up to 2.5% per draw.

To qualify, you must have a minimum credit score of 600. Your time in business must be at least 6 months, and you must bring in at least $100,000 in annual revenue. Payments are withdrawn from your business checking account on a weekly basis.

Financing Options For Starting A Child Care Business

All of these financial solutions address existing businesses, but what if you haven’t yet started your child care business? If you need money to start a new business, there are several loan options open to you.

One of the most popular options is the SBA Microloan. Through this program, you can receive up to $50,000 that can be repaid over 6 years. Rates are generally between 8% and 13%.

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 Microloans can be used for working capital, fixtures, furniture, inventory, supplies, equipment, or machinery. SBA Microloans can’t be used for the purchase of real estate.

Microloans are also available through non-profit organizations.

If you don’t qualify for an SBA microloan, you have other options. If you have a good credit score, you can receive a personal loan to cover startup costs. Crowdfunding, equipment loans, and business credit cards can also be used to pay expenses related to starting your business.

Can I Get Grants For Starting A Child Care Business?

It is possible to receive a grant to start your childcare business, but be aware that you will have to take the time to research your options. You can search startup grants in your local area, by niche, or even at the federal level. You may hit a few dead ends before you find a grant that you qualify for, and once you find one, competition can be stiff. Learn more about how to find startup grants.

If you don’t qualify for a startup grant, don’t give up hope. There are plenty of lending options available that can help you get your childcare business off of the ground.

What To Consider When Choosing A Lender

business loan reasons

With a better understanding of the types of loans available for your child care business, you’re one step closer to applying for financing. However, there’s one more critical step before you reach the application process: choosing your lender.

With so many lenders willing to give out small business loans, how do you decide which to choose? By asking yourself a few key questions, you can narrow down your choices and find the best lender for your financial needs.

Why Do I Need A Loan?

Before applying for a loan, you’ll need to know how you plan to use the loan proceeds. Not only will your lender want to know why you want the loan, but knowing this can help you determine what type of loan to pursue and what lender offers this loan.

For example, if you want a line of credit, you want to select a lender that offers a line of credit. If you want to expand your business with an SBA loan, you need to select an SBA intermediary that can help you through every step of the process.

How Much Money Do I Need?

To cover your expenses, how much money will you need? Again, this is information that your lender will also need to know. Determining the amount of money that you need will also help you select a lender. After all, if you need $250,000, a lender that has maximum borrowing limits of $100,000 does not offer the financing you need.

Unsure of how much money you need? If you don’t have a specific number in mind, you’ll want to work with a lender that offers flexible financing options such as lines of credit and business credit cards.

Am I Qualified?

Applying for a loan that you’re not even qualified to receive is a waste of time – and can put an unnecessary inquiry on your credit report. When choosing your lender, evaluate all requirements, including time in business, annual revenues, and how loan proceeds can be used. Pull your free credit score to make sure you meet credit requirements. Some lenders even put restrictions on what industries they lend to, so make sure that you meet all qualifications before submitting your application.

Do The Rates & Terms Meet My Needs?

When shopping around for loans, you want to make sure the rates and terms of the lender best fit your business needs. The purpose of a loan is to help you expand your business and keep it operating as smoothly as possible.

Getting a loan that will just drag your business into unmanageable debt could spell disaster. Make sure that you’re getting the best rates and terms that provide you with a loan payment your business can afford.

What You Need To Apply For Childcare Business Loans

Applying for childcare business loans is easier than ever now that lenders have made their applications available online. To apply for a loan, you’ll have to provide basic business and personal information, such as contact information, your federal tax ID, and your social security number.

Documentation requirements vary based on the type of loan you select and your selected lender’s policies. Documents and information that you can compile for your application include:

  • Child Care License Information
  • Personal & Business Credit Scores
  • Personal Financial Statements
  • Personal & Business Tax Returns
  • Profit & Loss Statements
  • Balance Sheets
  • Income Statements
  • Copy Of Driver’s License

Once you’ve filled out the application and have submitted all information, you may receive an instant approval decision depending on the type of loan. For other loans, the process may take several days or weeks. Make yourself available to your lender to provide additional information and documentation to move through the process and receive the loan you need. Learn more about small business loan requirements.

Final Thoughts

It’s completely normal to encounter financial challenges while operating your child care business. It’s simply the nature of the beast. The key to conquering these financial challenges is to know your financing options and to be a responsible borrower when the need arises.

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Small Business Loans For Beauty And Nail Salons

Whether you’re the owner of an established beauty salon or it’s your dream to open your own nail spa, one thing is clear: your business needs money. As the old saying goes, it takes money to make money, but what happens when the money’s just not there?

If you’re the owner of a beauty or nail salon and you need money to grow your business (or you’re ready to get your business off the ground), consider a small business loan as one of your best resources. With a small business loan, you can pay your business expenses, tackle that unexpected emergency, or expand your customer base with a new marketing campaign.

No matter what your needs, a small business loan has you covered. Before diving into the application process, know what to expect, the kinds of loans you’ll encounter, and which type of loan works best for your business. Read on to learn more about the options available to you to start or expand your beauty or nail salon.

Financing Need Best Loan Type Recommended Lender
Equipment Purchasing Equipment Financing Lendio
Business Expansion SBA 7(a) Loans SmartBiz
Supplies & Inventory Line Of Credit Fundbox
Emergency Funding Business Credit Cards Chase Ink Business Cash
Marketing & Advertising Short Term Loans Credibly
Cash Flow Cash Flow Loans StreetShares
Starting A Salon Startup Loans BlueVine

Equipment Purchasing

Your beauty salon equipment is outdated and desperately needs to be upgraded. Your nail salon is booming, and you need to purchase more stations and equipment to better serve your customers.

This equipment comes at a cost — a cost that your business may not be able to afford.

If you need to purchase equipment but don’t have the money to buy it outright, there’s a financing option. Instead of draining your bank account, consider equipment financing.

Equipment Financing

Equipment financing is a simple concept. A lender provides you with the money you need to purchase equipment. This allows you to take possession and put the equipment into use immediately. Because the lender provided the funds, you don’t have to pay the full equipment costs out-of-pocket. Instead, you’ll be able to pay back the loan through affordable scheduled payments.

Equipment financing can only be used toward the purchase of equipment for your business. For beauty and nail salons, this could include hair dryers, stylist chairs, or a point-of-sale system. Rates, terms, down payments, and loan amounts are based on creditworthiness. Most lenders look for credit scores in the high 600s, although some will accept lower credit scores. High-risk borrowers may be required to put more money down or pay higher interest rates.

Recommended Option: Lendio

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Lendio is a loan-matching service that connects you to over 75 business lenders. Through Lendio, you can receive offers from multiple lenders with just one application. This cuts down on the amount of time you’ll spend shopping for a loan while ensuring you receive the best offers.

Lendio offers equipment financing for business owners. Other loan products offered through Lendio’s network include term loans, SBA loans, lines of credit, and business credit cards.

For Lendio’s equipment financing programs, all borrowers must be in business for at least 12 months, bring in at least $10,000 per month in revenue, and have a credit score of 650.

Equipment loans of up to $5 million are available, with repayment terms between 1 and 5 years. Interest rates start at 7.5% for the most qualified borrowers. Fees vary by lender, and the equipment being financed typically serves as the collateral.

Business Expansion

Your business and customer base are growing so much, it’s time for your salon to expand. Maybe you want to build an addition to your existing salon, or you want to purchase commercial real estate to open a new location. While business expansion means that your business is growing, it also means additional expenses.

Most business owners don’t have the means to fund expansion expenses out-of-pocket. Even if they do, tying up such a large amount of their capital isn’t always the wisest move. Luckily, you don’t have to worry about taking on this burden by yourself. With a Small Business Administration loan, you’ll be able to break large expenses into smaller, more manageable monthly payments.

SBA 7(a) Loans

The Small Business Administration offers multiple loan programs, but the 7(a) loan is one of the most popular. With high loan limits, flexible repayment terms, and low interest rates, it’s easy to see why this is a top choice for qualified business owners.

The SBA 7(a) loan can be used for almost any business purpose, including business expansion. You can update your existing salon, purchase commercial real estate, or fund any other business expense with this loan.

SBA 7(a) loans are available in amounts up to $5 million. Repayment terms are 10 years for most purposes and maximum terms of 25 years are available for commercial real estate purchases. Interest rates are set at the prime rate plus a maximum of 4.75% based on the amount of your loan and repayment terms.

SBA 7(a) loans are typically reserved for the most qualified borrowers. To qualify for SBA loans, you must have a credit score in the high 600s and meet the SBA’s definition of a small business. Your credit report must be free of liens, collections, recent bankruptcies, and foreclosures. If you’ve previously defaulted on a government loan, you will not be eligible. Your business must be in an approved industry, based in the U.S., and have a time in business of at least 2 years.

Recommended Option: SmartBiz

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The process for receiving an SBA loan is notoriously long. Some borrowers wait months just to get the funding they need. SmartBiz is a lender that simplifies the process.

SmartBiz offers SBA commercial real estate loans from $500,000 up to $5 million. Interest rates are 6.75% to 8% with repayment terms up to 25 years. Working capital loans up to $350,000 are available with fees between 8% and 9% and repayment terms of 10 years.

SmartBiz charges several fees for obtaining an SBA loan, including referral fees, packaging fees, guarantee fees, and closing costs. Collateral may be required to receive your loan. Loans can be funded in as quickly as seven days through SmartBiz.

Supplies & Inventory Purchasing

POS systems for spas

There are critical supplies you need for daily business operations, not to mention customer inventory — like shampoo, hair brushes, nail polish, etc. — that helps bring in additional revenue. When you don’t have the supplies you need, you’re unable to perform the services that customers seek. When your inventory is depleted, you’re missing out on this additional revenue stream.

Whether you’re running low on supplies and inventory or you forecast a seasonal increase in the near future, there comes a time when you need to replenish your stock. If you’re not in a financial position to pay cash for supplies and inventory, consider applying for a business line of credit.

Business Line Of Credit

A business line of credit is a type of revolving credit that can be accessed as needed. Once approved by a lender, you’ll be given a credit limit. You can make multiple draws on your account, so you can receive the money you need right when you need it.

With a business line of credit, interest or fees will be charged only on the used portion of funds. As you repay your loan through weekly or monthly payments, these funds will become available for you to use again.

Lines of credit are available for most salon owners, regardless of credit score. While some lenders have credit score requirements, others base their approval decision on the performance of the business. Most lenders have time in business limits typically between 6 and 12 months, but there are some lenders that do not have minimum requirements. Annual revenue requirements are between $50,000 and $100,000 to qualify for most business lines of credit, but again, certain lenders do not have requirements in place.

Recommended Option: Fundbox

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Fundbox is a lender that provides lines of credit up to $100,000. To qualify, a borrower must have at least two months of activity in an accounting software app supported by Fundbox. If the borrower is unable to meet this requirement, bank statements showing transactions over the last three months can be submitted.

There are no credit limit requirements to qualify for a Fundbox line of credit. The application process is quick and easy, and an approval can be given in just minutes. Once approved, funds are available for immediate withdrawal and are typically transferred as soon as the next business day.

Fees for using Fundbox begin at 4.66%. Repayment terms are set at 12 or 24 weeks, and there are no prepayment penalties.

Emergency Funding

It happens to the best of us: an unexpected expense. If an emergency arises, even the most financially responsible salon owner can be taken by surprise.

If you’re facing a financial emergency, don’t panic. Take a deep breath and know that there are options for getting over this financial hurdle. Read on to learn why a business credit card can be a critical resource in these stressful situations.

Business Credit Cards

A business credit card is just like a personal credit card, except it is used to cover business expenses. Once you’re approved for a credit card, the lender will set a credit limit. You can use the card as often as you wish anywhere credit cards are accepted, up to your assigned credit limit.

Credit card payments are due each month and will be applied toward the principal balance and the interest charged by the lender. As you pay back borrowed funds, they become available to use again.

A credit card is helpful during emergencies because you don’t have to wait for approval from the lender. If you’ve already received your card, you can use it as needed for any business expense, from covering operating costs to purchasing supplies. Credit cards can even be used for recurring expenses month after month.

With responsible use, a credit card can not only help you cover unexpected expenses but can also lead to great rewards. Many lenders offer rewards programs with their credit cards. Just by using your card, you can earn points with every qualified purchase that can be redeemed for cash or other perks.

Recommended Option: Chase Ink Business Cash

Chase Ink Business Cash



Apply Now

Annual Fee:


$0

 

Purchase APR:


15.24% – 21.24%, Variable

If you have good to excellent credit, you can qualify for the Chase Ink Business Cash card. This card comes with no annual fee, an introductory APR of 0% for the first year, and variable APRs of 15.24% to 21.24% after the introductory period.

With this card, you can receive 5% cash back on the first $25,000 spent toward internet, cable, and phone purchases, as well as office supply store purchases. You’ll receive 2% on the first $25,000 spent at restaurants and gas stations and 1% cash back for all other purchases.

When you sign up for this credit card, you can receive $500 cash back just by spending $3,000 or more within 3 months of opening your account.

Unsure if this is the right card for you? Learn more about other Chase Ink credit cards for your business.

Marketing & Advertising

Customers are critical to the success of your beauty or nail salon. Without customers, you don’t have a business. While you may already have clientele, a growing business always needs more customers. To bring in these customers, marketing and advertising is critical.

Sure, you could rely on your social media presence alone, but if you really want to expand your business, you’ll need to launch a marketing and advertising campaign. If the cost of marketing and advertising is holding you back from growing your business, consider applying for a short-term loan to make this expense more manageable.

Short-Term Loans

A short-term loan is a loan for a specific amount of money that is paid back through smaller scheduled payments over a set period of time. While most short-term loans have repayment terms of one year or less, some lenders offer terms up to three years.

Most short-term loans don’t have an interest rate. Instead, these loans have a fee known as a factor rate. This multiplier is used to determine a one-time cost that is added to your loan.

Because short-term loans are for a specific amount, it’s important that you plan out your expenses to make sure you receive enough money. Do your research, calculate pricing, and form a plan for your marketing and advertising campaign before applying for a short-term loan.

Short-term loan requirements for time in business and annual revenue vary by lender. Your personal credit score will be considered, but scores in the 500s are accepted by some lenders. Borrowers with the best credit scores will be approved for higher loan amounts with lower fees and rates and better terms.

Recommended Option: Credibly

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Credibly provides short-term loans of up to $250,000 for eligible borrowers. Repayment terms are available for 6 to 17 months. Factor rates for the most qualified borrowers are as low as 1.15. A one-time origination fee of 2.5% of the total loan amount is charged by the lender. Credibly payments are made daily or weekly.

To qualify, borrowers must have a minimum credit score of 500. All borrowers must have been in business for at least 6 months and have at least $15,000 per month deposited to their bank accounts.

In addition to its short-term working capital loans, Credibly also provides business expansion loans and merchant cash advances.

Cash Flow

As a salon owner, it’s not uncommon to experience periods where business is slower than usual. Even when your cash flow slows down, you still have expenses … and this can be a problem.

Fortunately, a cash flow loan can provide you with the money you need to fill in these gaps. Whether you need funds to meet payroll or money for daily operating expenses, a cash flow loan can provide you with the capital you need when business slows down.

Cash Flow Loans

A cash flow loan provides you with the money you need when your cash flow has slowed. These funds are used to pay your expenses to keep your business running as it should.

There are several types of cash flow loans available. If you know the specific amount of money that you need, a term loan is a good choice. With this type of financing, you receive a lump sum and repay the loan, plus interest, through regular installments.

A line of credit is another type of cash flow loan. These loans are best for businesses that may have recurring expenses that require multiple draws.

Qualifying for a cash flow loan requires a minimum credit score of 500. Time in business and annual revenue requirements vary by lender.

Recommended Option: StreetShares

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StreetShares is a lender that offers multiple loan options to small- and medium-sized businesses. Term loans and lines of credit are available in amounts up to $250,000 with repayment terms up to 36 months. Contract financing is also available.

To qualify for a StreetShares loan, a business must be in operations for at least one year with minimum revenue of $25,000 per year. A credit score of at least 620 is required for all borrowers.

Starting A Salon

While we’ve addressed common financial challenges you’ll face when expanding your salon, what if you aren’t yet at that point? What if you’re the new business on the block, and you need extra money to really get your endeavor off the ground?

If you’re looking for money to start your own beauty or nail salon, qualifying for business loans can be difficult. However, it’s not impossible to receive the money you need to open your own salon if you know where to look. The first place to start is with a startup loan.

Startup Loans

A startup loan is a loan that is used to pay the expenses associated with starting a business, such as hiring employees, buying or leasing real estate, or purchasing equipment like POS systems and software.

For most startup loans from alternative lenders, a minimum credit score of around 600 is required. Interest rates are based on the borrower’s personal creditworthiness.

Some lenders require a minimum time in business. If this is a requirement, another option that can be considered is a personal loan. A personal loan can be used to fund startup costs and may come with a lower interest rate for borrowers with a solid credit profile.

Recommended Option: BlueVine

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BlueVine is an alternative lender that provides lines of credit up to $5 million for new businesses. Repayment terms of 6 months are available through BlueVine. The APR for receiving this financing is 15% to 78%.

To qualify, borrowers must be in business for at least 6 months. A minimum credit score of 600 and $120,000 in annual revenue is required to receive BlueVine’s line of credit. The application process is easy, there are no hidden fees, and lines of credit are funded quickly.

Bad Credit? Your Best Financing Options

The best business loans require high credit scores, so does that mean you’re left out in the cold if your credit history isn’t where it needs to be? Actually, there are financing options available for you if you have bad credit, but you should be aware that these loans come with higher interest rates, lower borrowing amounts, and a possible need for collateral.

Before applying for a loan, you should always know your credit score. You can obtain your free credit score quickly and easily online. Once you have your score, you can get a better idea of the types of loans available to you.

The best options for borrowers with bad credit are lines of credit, equipment financing, and short-term loans. These financing options typically have lower borrower requirements — including credit scores — than other loans.

Business credit cards are also a great choice for borrowers with poor credit. There are unsecured options available to borrowers with lower scores. Anyone that doesn’t qualify for an unsecured card can receive a secured card backed by a security deposit. After making several on-time payments, the borrower can build their credit and qualify for better financing options.

Bad credit limits your lending options and results in a higher overall cost for loans. If your funding need isn’t immediate, your best move is to take steps to raise your personal credit score. Although this option takes time, you’ll receive better loan offers that are more affordable for your business.

If you need financing urgently before you can build up your credit, consider applying for the Capital One Spark Classic business credit card. This credit card is available to borrowers with scores as low as 580.

Capital One Spark Classic For Business


Compare

Annual Fee:


$0

 

Purchase APR:


24.74%, Variable

With this credit card, you’ll be able to receive unlimited 1% cash back rewards on all purchases. Because this card is designed for borrowers with lower credit scores, the APR is fairly high at 24.74%. However, there is no annual fee, and Capital One reports to multiple credit agencies, allowing you to build your credit (provided you make your payment on time each month). As your credit score rises, you’ll be qualified to apply for business credit cards and other loan options with lower interest rates and better terms.

What You Need To Apply For Beauty & Nail Salon Business Loans

What you need to apply for a beauty or nail salon business loan varies based on the lender you work with and the type of loan you’re seeking. For example, a business credit card application typically requires some basic information, including your business name, federal tax ID number, annual revenue, social security number, and contact information.

For other financial products, such as SBA loans and startup loans, more extensive documentation is required. This includes but is not limited to:

  • Personal Financial Statements
  • Business & Personal Tax Returns
  • Balance Sheets
  • Income Statements
  • Profit & Loss Statements
  • Bank Statements
  • Future Financial Projections
  • Owner Resumes
  • Business Licenses

Requirements vary by lender, so once you’ve chosen a lender, make sure you discuss what documentation and information are required. Make yourself available throughout the lending process to provide more information as needed. Learn more about small business loan requirements before you apply.

Final Thoughts

It’s common to encounter financial hurdles while growing your salon, which is when taking out a loan just makes sense. By doing your research and becoming a responsible borrower, you’ll be able to boost and expand your business without clearing out your checking account. That’s the beauty of small business loans.

The post Small Business Loans For Beauty And Nail Salons 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

lending club logo

$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.

The post Retail Business Loans And Financing Options appeared first on Merchant Maverick.

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Best Credit Cards For New Business Owners

If you’re a new business owner, getting a credit card sounds like an awesome idea. Credit cards help you build credit, save you money with rewards, and enable you to make large purchases without needing cash on hand.

But as a new business owner, you may be wary of applying for a credit card because your company lacks credit history. The good news? Many card issuers will take your personal credit history into account. This means that if you’ve maintained a good personal credit score, you have an excellent chance of qualifying for a business credit card. The even better news? There are plenty of options even for those with limited credit history or poor credit scores.

We’ve researched some of best credit card options for new business owners and listed them below. Read on through to determine which one is right for you!

Comparison Of The Best Credit Cards For New Business Owners

Best for Card
Cash back SimplyCash Plus Business Credit Card from American Express
Travel rewards Chase Ink Business PreferredSM
No annual fee Chase Ink Business CashSM
0% introductory rate Blue Business Plus Credit Card from American Express
Fair credit Capital One Spark Classic For Business
Bad credit Wells Fargo Business Secured Credit Card

Best Card For Cash Back Rewards: SimplyCash Plus Business Credit Card from American Express

SimplyCash Plus Business Credit Card from American Express



Compare

Annual Fee:


$0

 

Purchase APR:


14.24% – 21.24%, Variable

Offering up to 5% cash back on some purchases, the SimplyCash Business Credit Card from American Express is hard to beat. It also provides you with some choice when it comes to cash back categories, meaning that you can customize this card to fit your spending habits.

This nifty card gives you 5% back on purchase made at U.S. office supply stores and on wireless telephone services purchased directly from U.S. service providers (up to $50,000 spent per calendar year). You’ll then get to pick one category from the below list of eight options to earn 3% cash back:

  • Airfare purchased directly from airlines
  • Hotel rooms purchased directly from hotels
  • Car rentals purchased from select car rental companies
  • U.S. gas stations
  • U.S. restaurants
  • U.S. purchases for advertising in select media
  • U.S. purchases for shipping
  • U.S. computer hardware, software, and cloud computing purchases made directly from select providers

As with the 5% categories, you’ll earn the 3% cash back up until you spend $50,000 in a calendar year (after which you’ll receive 1% back). All other purchases will net you 1% cash back.

SimplyCash Plus gives you the ability to buy above your credit limit. There is no annual fee, and 0% intro APR for the first nine months.

Need a more detailed breakdown? Visit our full review.

Best Card For Travel Rewards: Chase Ink Business Preferred

Chase Ink Business Preferred



Apply Now 

Annual Fee:


$95

 

Purchase APR:


17.99% – 22.99%, Variable

While this card from Chase is simply a rewards card, it packs in a lot of bonuses for those that travel frequently.

To start, Ink Business Preferred users get three points per dollar spent 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 (up to $150,000 spent). All other purchases get one point per dollar spent. You’ll then be able to redeem your points for 25% more when you redeem them for travel through Chase Ultimate Rewards.

Beyond those basic rewards, Chase also lets you transfer your points on a 1:1 basis to nine airline and four hotel reward programs. If you need something other than travel rewards, you’ll also be able to redeem points for Amazon.com purchases, gift cards, and cash back, making this an extremely versatile card.

If you want more information on this card, check out Merchant Maverick’s complete review.

Best Card With No Annual Fee: Chase Ink Business Cash

Chase Ink Business Cash



Apply Now

Annual Fee:


$0

 

Purchase APR:


15.24% – 21.24%, Variable

This card from Chase lets you earn up to 5% cash back when you make purchases at office supply stores and on internet, cable, and phone services (up to the first $25,000 spent). You can also earn 2% back when spending at gas stations and restaurants (up to the first $25,000 spent). Everything else earns you 1% back.

The cherry on top of all those rewards is that you won’t have to worry about paying an annual fee—this means you’ll end up with savings no matter how much you spend yearly.

The Ink Business Cash also features a 0% intro APR rate for the first 12 months, a very generous offer. Chase is currently offering a welcome bonus of $500 cash back when you spend $3,000 within your first three months of opening an account.

If you want all the deets, read our full review.

Best Card With A 0% Introductory Rate: Blue Business Plus Credit Card from American Express

Blue Business Plus Credit Card from American Express



Compare

Annual Fee:


$0

 

Purchase APR:


12.99% – 20.99%, Variable

If you need to make a big purchase but can’t pay it all up front, having a card with 0% APR is very helpful because you won’t accrue interest. With a 0% intro APR for the first 15 months, the Blue Business Plus Credit Card from American Express has one of the longest 0% intro rates.

On top of that generous intro APR period, the Blue Business Plus also packs in some solid rewards. As a base, you’ll earn two points per dollar spent up to $50,000 yearly, and then one point per dollar thereafter.

Amex also grants you expanded buying power, which enables you to spend above your credit limit. Additionally, this card does not carry an annual fee.

Get the full breakdown on the Blue Business Plus with the complete review from Merchant Maverick.

Best Card For Fair Credit: Capital One Spark Classic for Business

Capital One Spark Classic For Business


Compare

Annual Fee:


$0

 

Purchase APR:


24.74%, Variable

One of the easiest small business credit cards to get, the Capital One Spark Classic for Business was made for those who want to build their credit. Despite being aimed at those with lower credit, this card still offers some decent perks.

To start, its base rewards dole out an unlimited 1% cash back without any sort of annual fee. This means you’ll be saving money no matter what your yearly spending rate is. Additionally, you’ll be able to add employee credit cards at no additional cost. Capital One requires no foreign transaction fees—great if your business needs overseas travel.

For the in-depth rundown on Spark Classic, head on over to our full review.

Best Card For Bad Credit: Wells Fargo Business Secured Credit Card

Wells Fargo Business Secured Credit Card


business credit cards fair credit
Compare

Annual Fee:


$25

 

Purchase APR:


Prime + 11.90%

One of the lone secured cards for business, the Wells Fargo Business Secured Credit Card is an appealing option for those looking to boost a low credit score. Wells Fargo targets this card for those just starting a business, businesses with little or no credit, and those with past credit problems.

You also have a couple of reward options: get 1.5% cash back or one point per dollar spent, which can be redeemed for gift cards, merchandise, airline tickets, and more. Besides the base bonuses, you won’t need to worry about paying program or foreign fees. However, you’ll need to fork over $25 annually, and you can add up to 10 employee cards.

Want more low credit options? Check out our breakdown of the best business credit cards for those with bad credit.

FAQs About New Business Credit Cards

Do I need business credit to get a business credit card?

No, when you apply for a business credit card, issuers will also consider your personal credit history, which can be used to guarantee repayment.

What business information do I need to supply to get a credit card?

When applying for a business card, issuers usually request your company’s business tax identification number. If you don’t have one, you can often supply your personal social security number instead. They’ll likely ask you for your business’s legal structure, its ownership type, and its age. It’s also not uncommon for issuers to request your annual revenue, how much you spend, and which country your business is located in.

Can I still get a business credit card if I’m not registered as a business?

Yes, you don’t need to be officially registered as a business to get a business credit card. Find out more with our guide to business cards for the self-employed.

Can I get a new business credit card without signing a personal guarantee?

Usually, no. If you’re a new small business owner, you’ll most likely have to sign a personal guarantee.

Can I use personal credit cards for business?

Yes, there are a number of reasons why you might prefer a personal card, from better legal protection to better potential rewards. We go into more depth on the subject in our personal credit card guide.

Comparison Of The Best Credit Cards For New Business Owners

Card Name Best For Next Steps

SimplyCash Plus Business Credit Card from American Express

Cash back

Compare

Chase Ink Business Preferred

Travel rewards

Apply Now

Chase Ink Business Cash

No annual fee

Apply Now

Blue Business Plus Credit Card from American Express

0% introductory rate

Compare

Capital One Spark Classic For Business

Fair credit

Compare

Wells Fargo Business Secured Credit Card

Bad credit

Compare

The post Best Credit Cards For New Business Owners appeared first on Merchant Maverick.

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Small Business Startup Loans: Your 8 Best Options

Getting a small business loan can be tough. As a business owner, you have to prove to a lender that you’re worth taking an investment risk. You have to demonstrate that both you and your business are creditworthy and provide evidence that your business is bringing in enough revenue to cover the cost of the loan. For an established business, the process is time-consuming but not too difficult. For startups, however, this can be more than a little tricky.

Unless you’re independently wealthy, you need capital to get your startup business off the ground. Chances are, though, you keep hitting brick wall after brick wall when it comes to financing. You don’t have the required time in business to work with this lender, and you don’t have the documentation required by that one. You need money for your startup, but you can’t seem to find it.

Don’t worry — there are loan options for startup businesses. In this post, we’ll review eight of the best options, including the benefits, drawbacks, and what to know before you apply.

Loan Type What Are They?
Microloans Installment loans of $50,000 or less.
Personal Loans Loans in which the borrower’s eligibility is based on their personal profile, not the business profile.
Equipment Loans Loans used to purchase equipment.
Business Credit Cards Credit lines for everyday business expenses.
SBA Loans Low-cost loans offered by the Small Business Administration and its partners.
Crowdfunding Financing in which the funds are sourced from a pool of investors or backers.
Invoice Financing Financing in which the business’s unpaid invoices are leveraged to obtain working capital.
Friends & Family Financing sourced from the borrowers friends and family.

1) Microloans

Microloans are smaller loans that provide up to $50,000 for small businesses and startups. This type of financing is best for companies with smaller capital needs.

Microloans can generally be used for any business purpose, although specific lenders may have their own restrictions in place. Generally, microloans can be used to purchase supplies or inventory, equipment, or can be used as working capital.

The Small Business Administration’s Microloans program is a very popular choice for small business owners. This program is open to any startup or business that fits the definition of a small business set by the SBA, which limits the number of employees, annual revenues, and net worth of a business. For-profit businesses and non-profit childcare centers located in the U.S. are eligible to apply. Loans of up to $50,000 with repayment terms of up to 6 years are available through non-profit intermediary lenders. The average microloan given by SBA intermediaries is $13,000.

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 non-profit organizations also offer microloans. Repayment terms and maximum borrowing amounts vary by lender.

One of the biggest benefits of microloans is that they typically come with very low interest rates and are more affordable than other startup loans. Non-profit organizations and SBA intermediary lenders that offer microloans may also provide additional resources for small businesses owners, including training, workshops, and mentorships.

The biggest drawback of microloans is the low maximum borrowing amount, which could be limiting for businesses that have larger expenses, like the need to purchase commercial real estate. Another drawback is the length of time it takes to receive a loan. From application to funding, getting a microloan can take several weeks or longer.

The availability of microloans may also be limited. Many non-profit organizations get their money through government grant programs, limiting the number of new borrowers that are accepted.

2) Personal Loans

When applying for a business loan through a bank or other conventional lender, both personal and business information will be considered, including personal credit score, business credit score, and annual business revenues. For new businesses that don’t meet these qualifications, getting a bank loan is out of the question, right?

Not necessarily. Business owners with high personal credit scores can apply for a personal loan from a bank or credit union. The credit history and income of the applicant — not the business — will be considered when applying for a personal loan.

Even businesses that don’t meet the credit and income qualifications of banks and credit unions can get a personal loan to use for business expenses. This can be accomplished through alternative lenders that have fewer requirements for qualifying for a loan.

A personal loan is a good choice for a startup business because the history of the business is not a consideration for approval. For personal loans, the borrower will just need to prove their personal creditworthiness and show that they are financially able to pay back the loan.

Many personal loans can be used for most business purposes, but some may have restrictions on how the proceeds are used based on the lender’s specific policies.

Banks and credit unions offer low interest rates and long repayment terms, resulting in a more affordable loan. Of course, these low-cost loans are reserved for the most qualified borrowers with credit scores at least in the low 700s.
Applicants with a low personal credit score will face higher interest rates and a higher overall cost of borrowing. In some instances, applicants with credit or income challenges will need to seek out alternative lenders for a personal loan.

Maximum loan amounts may be lower for personal loans than business loans. Depending on the amount needed, a business loan with higher limits may be a better choice for business owners with higher capital needs.

Be aware that, at tax time, business owners with a business loan can write off interest payments. With personal loans, business owners are unable to write off these payments, therefore missing out on these tax benefits.

3) Equipment Loans

An equipment loan is a loan that is used to finance long-term equipment, such as machinery, industrial kitchen appliances, or a commercial vehicle. This type of financing allows business owners to purchase expensive equipment through affordable monthly payments instead of paying the full cost up front.

One of the great things about equipment loans is that many businesses, including startups, can qualify. Revenue, time in business, and credit requirements are not as strict, with most lenders requiring a score in the low 600s to qualify. Approvals can be given within just days of applying, although timelines vary based on the lender.

Equipment financing isn’t for everyone, though. This type of loan can only be used for the purchase of equipment. The equipment purchased could also become obsolete and may need to be replaced again before the loan is fully repaid.

Ready to apply for equipment financing? We recommend the following lenders:

Lender Borrowing Amount Term Interest/Factor Rate Additional Fees Next Steps

$2K – $5M Varies As low as 2% Varies Visit Site

$5K – $500K 24 – 72 months Starts at 5% Yes Compare

Up to $250K 1 – 72 months Starts at 5.49% Varies Compare

4) Business Credit Cards

Business credit cards work just like personal credit cards. The lender provides a set credit limit, and you can use your card up to and including that credit limit to pay merchants, vendors, suppliers, and for other business expenses.

Since there are fewer requirements to qualify for a business credit card than there are for other types of loans, many startups go this route when they need extra capital. Unsecured cards are available to business owners with scores in the low 600s, although higher scores get higher credit limits and lower interest rates. Borrowers with bad credit scores may qualify for a secured card, which requires a deposit or collateral and helps rebuild credit.

One of the perks of business credit cards is that many have rewards programs. When the card is used for qualifying business purchases, points can be racked up to redeem toward airline miles, cash back, and other rewards.
The downside of business credit cards is high interest rates, which can really add up over time. Keeping a high balance for a long period of time will result in a loan that is more expensive than other options. This is why it’s recommended to pay down debt as quickly as possible to avoid potentially paying thousands of dollars in interest.

5) Small Business Administration (SBA) Loans

The Small Business Administration doesn’t just offer microloans. In fact, the SBA has several programs to help startups get the funding they need.

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.

Review

Microloans

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

Review

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.

Review

Disaster Loans

Loans used to rebuild or maintain business following a disaster. 

Review

The SBA 7(a) program offers up to $5 million for almost any business purpose, from refinancing existing debt to purchasing real estate or acquiring a new business. The Veteran’s Advantage program offers the same benefits with reduced fees for military veterans, while the Community Advantage program provides funding options for businesses and startups in underserved communities.

The SBA also has the CDC/504 loan that funds 40% of project costs for the purchase or improvement of commercial real estate.

For all programs, applicants must be a small business as defined by the SBA and can apply for these loans through an SBA intermediary lender. Applicants should have a solid credit score in the high 600s and no bankruptcies, foreclosures, or past defaults on government loans.

SBA loans are popular with small businesses and startups because of their low interest rates and long repayment terms of up to 10 or 25 years. SBA loans are some of the most affordable loans available.

Because large portions of SBA loans are guaranteed by the government, lenders are more willing to lend to small businesses. Many businesses qualify for SBA loans when banks and other lenders have turned them down.

However, SBA loans aren’t without their drawbacks. The application and approval process can take weeks (or, in some cases, months), so these loans aren’t ideal for startups that need funding immediately.

The application process is also time-consuming and qualifying can be difficult. Business owners must have a strong credit history and meet all qualifications of the SBA to apply for these loans.

6) Crowdfunding

startup crowdfunding

Crowdfunding is a relatively new type of business financing, but it’s really growing in popularity, especially among startups.

With this type of loan, you pitch your idea on a crowdfunding platform. Through this platform, you can reach investors and others that believe in your business and are willing to invest their money to help you get your idea off the ground.

Crowdfunding gives you access to thousands of investors. A successful campaign can yield the funds you need in a very short amount of time without the fees and interest that come along with other loan options. In exchange for their investment, most businesses offer rewards and perks like first access to a new product.

One of the benefits of crowdfunding is that anyone can do it, even if you have poor credit or other challenges that make you ineligible for other types of loans.

Even though anyone can make a campaign, not everyone can be successful. In order to get the money you need through crowdfunding, you have to put in the work, which includes sharing your campaign on social media, websites, and blogs, marketing effectively to potential investors, and offering incentives that make donors want to give.

7) Invoice Financing

If your new business has a shortage of capital due to unpaid invoices, invoice financing may be an option to consider. With invoice financing, you receive a payment for your unpaid invoices to resolve short-term cash flow issues.

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

There aren’t strict requirements on credit scores, time in business, or annual revenues with invoice financing. The quantity and quality of the invoices are typically the most important factor. In other words, are the invoices enough to cover the lender’s fees, and are the customers likely to pay? If so, you have a good chance of qualifying for invoice financing.

While invoice financing is quick and easy, this type of loan doesn’t come without its drawbacks. Fees could be as high as 30% of the invoice total, making this a very expensive form of financing.

This is also a loan that fills a very specific niche: businesses that have cash flow issues because of customers that are slow to pay. If you don’t have unpaid invoices or the quantity or quality are not up to par based on the lender’s standards, another loan option will need to be explored.

8) Friends & Family

To get your startup off the ground, you may turn to an investor you already know: a friend or family member. Just because you know them, though, doesn’t mean that you should just expect them to lend to you. Instead, you should be prepared with a presentation similar to what you would give a bank to let your friend or family member know why they should place their bets on your business.

When working with friends and family, you’ll need to create a payment schedule and sign an agreement. Remember, everything should be in writing. There are even online platforms that help you create and sign agreements and set up a repayment schedule.

You can negotiate a deal with friends and family that works for both of you, which is something you can’t do with other lenders. However, business — especially a deal gone bad — has the potential to destroy relationships, so make sure everything is in writing and treat the business relationship just as you would with a formal lender.

Are You Prepared For A Startup Loan? What You Need To Do Before Applying

Once you’ve selected the type of loan you’d like to receive, you may be tempted to visit a lender or jump online to begin filling out your application. However, before you apply, there are a few steps you should take to ensure you’re ready to receive your funds.

Register Your Business

Before getting started, you’ll need to register your business. How you do this depends on your business structure. For most startups, naming your business, registering in your state, and getting a federal tax ID are the basic steps you need to take.

You’ll also need to find a registered agent in your state, file all state documents, and pay any applicable fees.

Get A Business Bank Account

Before applying for a loan, you’ll need to open a business bank account. A business bank account will be where any funds are direct deposited. A business bank account also makes it easy for bookkeeping purposes by keeping your personal expenses separate from business expenses.

Opening a business bank account will also help you establish a relationship with a bank or credit union. As your business expands, you can open additional accounts, such as a business credit card or loan, with your financial institution.

Check Your Credit Score

Credit score plays a huge role in most loans, so it’s always important to know your score before filling out an application. To see where your credit stands, go online to pull your free credit report and score.

To qualify for the best rates and terms, your score should be in the 700s. Scores in the high 600s still qualify for SBA loans and other affordable options. Scores that are in the low 600s and below will have more limited options with higher interest rates and terms that are not so favorable.

While you can still get a loan with a low credit score, it’s wise to boost your credit before applying to get a more affordable loan. You can do this by making your payments on time every month, avoiding hard inquiries, and paying down your debt to lower credit utilization. Find out more about how you can raise your credit score.

Make A Business Plan

One of the main challenges a startup will face is proving to the lender that their business will be successful. Since this won’t be documented by historical success, a startup will have to prove themselves in a different way: with a solid business plan.

To create a business plan, remember to have a few key elements including:

  • Executive Summary: An introduction to your business that summarizes your plan.
  • Business Outline: How does your business stand apart from the competition? What problem does your business solve?
  • Marketing Plan: How will you reach your target market and bring in customers?
  • Operations Details: An overview of your operations, including your location, available space, and equipment.
  • Financial Projections: How much profit you expect to make over a set period of time.

Prepare Financial Documents

When applying for a business loan, your lender will require personal and business documentation. Although requirements vary based on the type of loan and the lender’s requirements, you should be prepared with the following documents:

  • Personal tax returns
  • Personal financial statements for all owners
  • Balance sheet
  • Income statement
  • Business financial statements
  • Profit and loss statement
  • Business licenses and registrations

Decide How Much You Need

You should know how much money you want to borrow before applying for a loan. To do this, you’ll need to perform a few calculations. For example, if you need money to purchase inventory, get estimates from suppliers. If you’re purchasing new equipment, get a few quotes for the equipment you need.

When applying for a loan, you’ll need to tell the lender the exact amount you’re seeking, as well as an explanation of how the funds will be used. It’s also important to remember that just because you need it doesn’t mean you can afford it. Learn more about calculating the affordability of your loan.

Startup Business Loan FAQs

Do startup business loans require a down payment?

A down payment may be required based on the type of loan and the amount selected. A down payment shows a lender that you’re serious about your business and you have something to lose if the business is not successful.

Some SBA loans and personal loans require down payments. Other types of funding, such as invoice financing, do not have down payment requirements.

Can I get a startup business loan if I have bad credit?

There are small business loans available for borrowers with bad credit. However, you should be aware that the interest rates for these loans are often much higher and your options are more limited.

If you have bad credit, loans such as equipment financing, business credit cards, lines of credit, and invoice financing are available. Term loans may also be available through alternative lenders.

To open up more options and get better rates, it’s best to work on boosting your credit before applying. However, if your financial needs are urgent, make sure to shop around for the most affordable option. Taking out a high-cost loan that doesn’t offer a good return on investment can throw you further into debt and drag your credit score down with it.

Can I get a startup business loan with no credit check?

Almost every lender will at least perform a soft pull of your credit to get an idea of where you stand in terms of credit. However, depending on the type of loan you select and the lender you choose to work with, other factors — such as the performance of your business — may play a larger role in approval than your credit score.

Conventional lenders like banks will always require a credit check, but there are a few alternative options available that do not have this requirement.

Do banks offer business loans to startups?

Banks have very strict lending requirements for business loans. Startups are seen as risky investments from a lender’s standpoint. While it isn’t completely impossible to receive a loan from a bank, it will be extremely difficult.

To qualify, a borrower must have a very high personal credit score, extensive industry experience, and very detailed business plans. Financial projections will also be required, in addition to other documentation proving that the business has a high chance for success — and paying back the loan.

Because it is so difficult for startups to qualify for bank loans, many startup owners turn to SBA programs for their funding needs. A government guarantee on loans takes some of the risk off of lenders while providing startup and small business owners with rates and terms that are competitive with bank loans.

What is the quickest way to get a loan for my startup?

There are several ways to get quick funding for your startup. Financing options like lines of credit, business credit cards, and short-term loans from alternative lenders can be approved in just minutes, giving you access to funding almost immediately.

However, a speedy loan comes at a price. These loans come with high interest rates, extra fees, and are much more expensive over the long term.

What type of startup business loan has the lowest interest rates?

SBA loans have among the most competitive interest rates among all business loans. If you have a high credit score, personal loans from banks and credit unions also have very low interest rates.

Final Thoughts

Getting a business loan for your startup may take research and a few additional steps, but don’t let a closed door leave you feeling defeated. Understand the types of loans to pursue, what you need to do before applying, and how to present your business, and you’ll soon be on your way to receiving the business loan you need.

The post Small Business Startup Loans: Your 8 Best Options appeared first on Merchant Maverick.

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Best Business Credit Card Signup Bonus Offers

Finding a credit card with a great welcome offer is an easy way to earn some extra cash or bonus travel miles. If you’re a small business owner, finding places to save an extra buck is always important.

Of course, there are numerous credit cards and many different types of bonus offers. Figuring out your best option can be tricky. Our list below aims to help you sift through all your options—helping you find what you’re looking for faster!

Best Signup Bonus For Rewards Points: Chase Ink Business Preferred

Chase Ink Business Preferred



Apply Now 

Annual Fee:


$95

 

Purchase APR:


17.74% – 22.74%, Variable

This card from Chase comes with a hefty points reward for new accounts. Simply spend $5,000 within the first three months of opening your account and you’ll receive 80,000 bonus points. When you redeem those points through Chase Ultimate Rewards, you can receive the equivalent of $1,000 towards travel. If travel rewards aren’t for you, Chase Ultimate Rewards also lets you redeem points for gift cards, cash back, and Amazon shopping.

Those points can be transferred on a 1:1 basis to an array of airline and hotel reward programs as well. For general rewards with Chase’s Ink Business Preferred, you earn three points per $1 spent on travel, shipping purchases, Internet, cable and phone services, and on online advertising purchases. You then get one point per dollar on everything else.

Chase also runs a referral program that nets you 20,000 bonus points (up to 100,000 per year) when a business owner you invite signs up for a Chase Ink Business Preferred card.

Check out the full details with our in-depth review.

Best Signup Bonus For Cash Back: Capital One Spark Cash For Business

Capital One Spark Cash For Business


capital one spark cash select
Compare

Annual Fee:


$95 ($0 the first year)

 

Purchase APR:


18.74%, Variable

If you simply want cash back as a bonus offer, it’s hard to beat Capital One’s Spark Cash For Business card. This card rewards you with $500 if you spend at least $4,500 within the first three months of opening your account.

Because Capital One bundles in unlimited 2% cash back on all purchases, you’ll also be receiving some of the best cash back rewards a credit card can offer. The $95 annual fee is also waived for your first year.

Get the complete run-down on the Spark Cash For Business by reading Merchant Maverick’s review.

There are a few other business cards with $500 cash back welcome offers. We’ve listed them below in alphabetical order:

  • Chase Ink Business Cash: $500 cash back if you spend $3,000 in your first three months.
  • Chase Ink Business Unlimited: $500 cash back if you spend $3,000 in your first three months.
  • Wells Fargo Business Platinum Card: $500 cash back if you spend $5,000 in your first three months.

Best Signup Bonus With No Annual Fee: Chase Ink Business Unlimited

Chase Ink Business Unlimited


chase ink business unlimited
Apply Now 

Annual Fee:


$0

 

Purchase APR:


14.99% – 20.99%, Variable

Want a nice signup bonus but don’t want to deal with a pesky annual fee? The Chase Ink Business Unlimited card might just be for you. Spend over $3,000 in your first three months and you’ll get $500 cash back without needing to worry about an annual fee.

For base rewards, Chase offers unlimited 1.5% cash back on all purchases. You also won’t have to worry about paying interest for your first year—this card carries a 0% intro APR for the first 12 months.

If you need more details on the Ink Business Unlimited, check out Merchant Maverick’s full review.

It’s also worth a mention that if you spend a lot on specific categories, you may prefer Chase’s Ink Business Cash card. It features the same welcome offer of $500 after spending $3,000 within the first three months. However, purchases within the office supply store, Internet, cable, and phone categories net you up to 5% cash back. You also get up to 2% cash back on money spent at gas stations and restaurants. For a holistic report, read our Ink Business Cash card review.

Best Signup Bonuses For Travel

Best Signup Bonus For General Travel: 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

Those that want a solid welcome offer aimed at travel without being locked into a particular airline or hotel brand should consider Capital One’s travel business card. Spark Miles For Business dishes out 50,000 miles if you spend $4,500 within your first three months. You’ll be able to use those miles for tickets on any airline, booking any hotel, purchasing travel packages, and more.

It does come with a $95 annual fee, although this is waived your first year. For general rewards, you get an unlimited two miles per dollar spent. When it comes to redeeming your rewards, there are no blackout dates and no minimum points requirement.

Visit Merchant Maverick’s complete review to get in in-depth look at Capital One’s Spark Miles card.

Chase’s Ink Business Preferred (mentioned above) is also a nifty card for travelers because points are worth 25% more when redeemed for travel through Chase Ultimate Rewards. You can also transfer your points on a 1:1 basis to a selection of airline and hotel rewards programs. Our full review has all the details.

Best Signup Bonus For Airline Points: Delta Reserve for Business Credit Card from American Express

Delta Reserve Credit Card for Business from American Express



Compare

Annual Fee:


$450

 

Purchase APR:


17.74% – 26.74%, Variable

For those looking at welcome offers of airline-specific cards, your best option will usually come down to which airline you use the most. However, when it comes to picking one airline-specific travel credit card, our choice goes to American Express’s Delta Reserve for Business Credit Card. This card will reward you with 70,000 miles and 10,000 Medallion Qualification Miles once you spend $5,000 within your first three months. Note that this offer expires 11/07/2018.

Its base rewards include two miles per dollar spent on Delta purchases. Everything else you buy gets one mile per $1 spent. You also get a free checked bag, priority boarding, and Delta Sky Club access. There’s an additional bonus offer handing out 15,000 miles and 15,000 Medallion Qualification Miles if you spend $30,000 or more during a calendar year.

Of course, there’s plenty of other airline-specific offerings with excellent welcome offers. Here’s a non-exhaustive list, ordered alphabetically:

  • AAdvantage Aviator Business Mastercard from Barclays: 60,000 miles once you make your first purchase within 90 days.
  • Alaska Business Card from Bank of America: Buy one ticket, get one for only taxes and fees plus 30,000 miles if you spend $1,000 or more within 90 days of opening your account.
  • CitiBusiness / AAdvantage Platinum Select World Mastercard: 70,000 AAdvantage miles if you spend $4,000 in your first four months.
  • Gold Delta SkyMiles Business Credit Card from American Express: 30,000 miles if you spend $1,000 in your first three months and a $50 statement credit once you make a Delta purchase in your first three months.
  • JetBlue Business Card from Barclays: 50,000 points if you spend $1,000 in the first 90 days.
  • Platinum Delta SkyMiles Business Credit Card from American Express: 50,000 miles and 10,000 Medallion Qualification Miles if you spend $3,000 in your first three months and a $100 statement credit once you make a Delta purchase in your first three months.
  • Southwest Rapid Rewards Premier Business Credit Card from Chase: 60,000 points if you spend $3,000 in your first three months.

Best Signup Bonus For Hotel Rewards: Hilton Honors American Express Business Card

Hilton Honors American Express Business Card



Compare

Annual Fee:


$95

 

Purchase APR:


17.74% – 26.74%, Variable

Like with airline-specific cards, your best option for welcome offers from hotel rewards cards really comes down to where you stay the most. The best all-around welcome offer, however, hails from the Hilton Honors American Express Business Card. This rewards card packs in a bonus of 125,000 points if you spend $3,000 within the first three months of opening your account.

For regular rewards, you’ll get 12 points per dollar when you make purchases at hotels and resorts within the Hilton brand. You’ll also snag six points per $1 spent when making U.S.-based purchases at gas stations, wireless telephone service providers, shipping merchants, and restaurants. You can also pick up six points per dollar when booking travel through American Express’s travel website or on car rentals booked directly from specific car rental companies. All other purchases will nab you three points per $1 spent.

Don’t frequent Hilton branded hotels? Here’s a couple more bonus offers from hotel rewards cards to glance over:

  • Starwood Preferred Guest Business Credit Card from American Express: 100,000 points if you spend $5,000 in your first three months.
  • Marriott Rewards Premier Plus Business credit card from Chase: 75,000 points if you spend $3,000 in your first three months.

Comparison of the Best Business Credit Card Signup Bonus Offers

Card Name Best For Bonus Offer Requirements Next Steps

Chase Ink Business Preferred

Reward points

80,000 points

Spend at least $5,000 within the first 3 months of opening an account

Apply Now

Capital One Spark Cash For Business

Cash back

$500 cash back

Spend at least $4,500 within the first 3 months of opening an account

Compare

Chase Ink Business Unlimited

No annual fee

$500 cash back

Spend at least $3,000 within the first 3 months of opening an account

Apply Now

Capital One Spark Miles For Business

General travel rewards

50,000 miles

Spend at least $4,500 within the first 3 months of opening an account

Compare

Barclays AAdvantage Aviator Business Mastercard

Airline points

60,000 points

Make at least one purchase within the first 90 days of opening an account

Compare

Hilton Honors American Express Business Card

Hotel rewards

125,000 points

Spend at least $3,000 within the first 3 months of opening an account

Compare

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Self-Employed? You May Qualify For A Business Credit Card

Being self-employed brings great freedom and flexibility when it comes to scheduling, determining work flow, and setting pay rates. But there’s one more benefit that you might not immediately think about: getting a business credit card. Even though you may not run your work as a “business,” you still could be eligible for a business credit card. There are plenty of benefits to having a business credit card, so perhaps it makes perfect sense for you to apply for one.

Is a business credit card right for you? Read on through to find out!

Do I Need An “Established Business” To Get A Business Credit Card?

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Not necessarily. You might qualify as a business owner as long as you sell goods or services outside of a traditional employment situation, enabling you to get a business credit card.

You may qualify if you sell items via online storefronts such as Amazon or eBay or offer lessons for activities like music or art. You may even qualify if you provide freelance services such as writing, photographing, or writing code. Do a maintenance side gig for friends and neighbors? That could qualify you, too.

Essentially, if you make profit doing something outside your day job or personal life, you could qualify as a business owner.

What Are The Perks Of A Business Credit Card For The Self-Employed?

There are numerous benefits to maintaining a business credit card while self-employed.

The primary reason you might want to apply for a business card is so that you can separate your professional expenses from your personal ones. This means you can keep easier track of business-related spending—something that’s important for both budgeting and filing taxes.

Reward programs are also structured for business expenses. For instance, some business-specific cards offer rewards geared towards travel, which might be beneficial if you spend time flying for work. Some cards also bundle in perks like access to airport lounges or free wifi.

Additional business credit card benefits can include excellent sign-up bonuses, higher potential credit limits, and free employee cards.

Are There Any Drawbacks To Watch Out For?

As with any credit card, it’s important to always pay off your balance on time. Doing so limits interest while potentially improving your credit score.

You’ll also want to avoid applying for too many cards in a short space of time. That’s because applying for a credit card results in a hard pull on your credit score. Too many hard pulls in quick succession could drop your credit score.

How Do I Apply For A Business Card?

You’ll want to first do proper research to find the best card for you. Not all cards are equally good for everyone. Some cards look snazzy up front, but they may not mesh with your professional pursuits. With that in mind, you’ll want to look for a card that has rewards that align with your business expenses while also allowing you to make the most of the card’s other benefits.

Because you’re self-employed, you might not have a history of business income or a business tax identification number. In most cases, card issuers will do a pull on your personal credit and your personal income to guarantee your credit history. Additionally, your social security number can often be used in place of a tax ID number. During the application process, you can also usually list yourself as a sole proprietor when filling out what kind of business you own.

And most importantly, never lie on a credit card application. Lying about your business or making up business income will only bring about a world of hurt in the future—even if you somehow manage to get approved.

How Can I Improve My Chances Of Being Approved For A Business Credit Card?

As with any credit card, it always helps to have a good credit score. Ultimately, though, issuers have their own criteria when deciding who gets approved and who doesn’t. As such, you’ll want to double-check that you meet the requirements of a card before applying.

Top Business Credit Card Pick For The Self-Employed

Chase Ink Business Preferred



Apply Now 

Annual Fee:


$95

 

Purchase APR:


17.74% – 22.74%, Variable

The best option for many small businesses, Chase Ink Preferred is a great choice for those who are self-employed, too. This card from Chase is simply a solid, well-rounded offering.

It packs in three points per $1 on the first $150,000 spent in combined purchases on travel, shipping, internet/cable/phone services, and advertising on social media and search engines each account anniversary year. For all other purchases, you’ll get one point per dollar spent.

On top of that, you’ll get a bonus 80,000 points after you spend at least $5,000 in the first three months of opening your account. Because points usually equal $0.01, that’s the equivalent of $800 cash back. Chase also bundles in cell phone protection and employee cards at no extra cost.

You can also reap plenty of travel benefits, too. To start, points are worth 25% extra when redeemed through Chase Ultimate Rewards. You can further transfer points on a 1:1 basis with other travel programs, including United MileagePlus and Marriott Rewards. Finally, there is no fee on foreign transactions, a plus if you travel overseas frequently.

Final Thoughts

Want more business card options? Check out our comprehensive breakdown of the best business cards of 2018. Decided to stick with a personal credit card? We’ve got you covered with a list of the best personal credit cards for business expenses.

The post Self-Employed? You May Qualify For A Business Credit Card appeared first on Merchant Maverick.

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The 10 Best Restaurant Management Software Apps

It’s almost 2019, if you can believe it, and more than fall leaves or pumpkin spice lattes, tech fans like myself relish the smell of a freshly unboxed smartphone (thanks to Apple’s annual September unveiling). But it’s not just consumers who love mobile tech; businesses do too.  As mobile technology becomes more powerful, businesses — including restaurants — enjoy increasingly robust mobile hardware which can handle more powerful and nuanced software functions.

Indeed, restaurant managers, in particular, have an increasing number of mobile management applications at their disposal. From tablet-based POS systems that accept mobile payments to online reservation services that let customers reserve a table with an app, more restaurant management functions are being conducted online and on mobile devices. But with all the restaurant apps out there, how do you know which ones you should use? Think of it kind of like cooking: if you use too much or too little of an ingredient, it ruins the dish. Similarly, if you use too many management apps, there’s too much overlap in services (not to mention the fact that you’ll run out of bandwidth and money), and if you use just one or two services, you may miss out on critical features.

To help you out, I’ve put together this list of the top restaurant management apps in terms of both quality and popularity. From employee management to accounting to raw ingredient tracking, modern mobile restaurant software can help you with every restaurant management task you can imagine.

I’ve divided these top 10 best restaurant management apps into restaurant point of sale (POS) software apps—which are often complete restaurant management systems with few if any third-party add-ons required— and other restaurant management apps which offer more specific, targeted functionality.

Restaurant POS Systems

Toast TouchBistro Breadcrumb ShopKeep Lightspeed Restaurant

Toast

TouchBistro

Breadcrumb POS by Upserve

ShopKeep

Lightspeed Restaurant

ShopKeep alternatives for restaurants

Visit Site 

Review

Visit Site 

Review

Compare 

Review

Visit Site 

Review

Visit Site 

Review

Monthly fee

$79+

$69+

$99+

Get a quote

$69+

Cloud-based or Locally Installed

Cloud-based

Locally installed

Cloud-based

Hybrid

Cloud-based

Compatible credit card processors

Toast only

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

Upserve Payments only

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

Cayan or Mercury in US; iZettle in Europe

Business size

Small to large

Small to medium

Small to large

Small to medium

Small to medium

The awesome thing about today’s app-based restaurant point of sale systems is that they are often complete restaurant management systems. Or if they do not include essential restaurant management functions, they will typically have integrations that work together with other restaurant management apps (for accounting, staff scheduling, inventory management, etc.). As such, your restaurant POS system is a good basis on which to build any other add-ons to your restaurant application suite.

1. Toast

Review Visit Site

Highlights

  • Android-based restaurant POS
  • All-in-one restaurant management system
  • Advanced inventory management
  • Add-ons for kitchen display system, kiosk POS, online ordering, delivery management, and more

Try it out: Schedule a Toast demo

Toast is a complete, Android-based restaurant point of sale system and restaurant management system for restaurants of any size. With strong front-end and back-end features, Toast not only takes payments with integrated payment processing, but also tracks your sales, labor, and inventory, organizing that information into useful, internet-accessible reports.

With mobile POS tablets, servers can send orders directly to the kitchen and even process payments right from the table. Kitchen display system and kiosk ordering are some other high-tech add-ons available for purchase from Toast.

Useful Features:

  • Customer data management system
  • Menu creation with comprehensive modifier system
  • Labor management including employee time tracking
  • Inventory management system that includes a recipe costing tool, food cost calculator, and menu engineering chart that shows you your best-selling and most profitable menu items
  • 24/7 customer support
  • Online ordering (extra monthly charge)
  • Delivery management system (extra monthly charge)
  • Customer loyalty program (extra monthly charge)
  • Gift cards (extra monthly charge)

Integrations With Other Restaurant Software:

  • Compeat
  • PeachWorks
  • CTUIT
  • CrunchTime
  • PayTronix
  • Bevager
  • GrubHub (online ordering and delivery)
  • Samsung Pay
  • Kitchensync

Toast also has an open API which lets you create your own applications, should you be so inclined.

The Quick & Dirty:

Pricing for this complete POS and restaurant management system starts at $79/month. Overall, Toast is a good option for restaurants that want a complete restaurant POS and management system and prefer a non-iPad POS.

2. TouchBistro

ShopKeep alternatives for restaurants

 

Review Visit Site

Highlights

  • iPad POS system for restaurants
  • Affordable
  • Locally installed
  • Compatible with multiple payment processors
  • Table management with reservations add-on

Get started with TouchBistro: Get a custom quote

TouchBistro is a bestselling iPad POS app for restaurants. While it isn’t an “all-in-one” restaurant management system like Toast, it’s cost-effective, easy to use, and very good at what it does. TouchBistro runs as an app on via one or more iPads, with multi-iPad setups keeping in sync via a local Apple server.

TouchBistro does have some online reports allowing you to view your restaurant metrics anywhere with an internet connection, but it does not require a WiFi connection to operate, other than to process credit card payments. TouchBistro integrates with multiple payment processors.

Useful Features:

  • Tableside ordering
  • Table management with visual layout
  • Menu management
  • Kiosk option
  • Employee management
  • Loyalty program (extra monthly charge)
  • Reservations function with TouchBistro Pro

Integrations With Other Restaurant Management Software:

  • 7Shifts
  • Xero
  • Shogo
  • Square
  • Quickbooks
  • JUST EAT (for online ordering)

The Quick & Dirty:

In summation, TouchBistro a very capable iPad POS for small-to-medium restaurants that are budget-conscious and may not have a powerful internet connection. Pricing starts at $69/month.

3. BreadCrumb POS By Upserve

Review

Highlights

  • All-in-one restaurant POS and restaurant management system
  • iPad-based
  • Fully cloud-based
  • Fully integrated online ordering
  • Must use Upserve for payment processing

Compare: Compare Breadcrumb with other top-rated iPad POS software

Breadcrumb is an all-in-one restaurant management and iPad POS system which could perhaps be considered the iPad-based answer to Toast. Comprehensive restaurant-centric management features that let you manage tables, employees, and menu items with a few finger taps make this restaurant software application suitable for any full-service or quick-service restaurant, no matter the size.

Breadcrumb is fully cloud-based and requires no on-premise server. In-house payment processing is provided exclusively by Breadcrumb’s parent company, Upserve.

Useful Features:

  • Customizable interface
  • “Offline” mode allows you to continue using POS and taking payments if internet goes down
  • Table management with color coding and meal progression graphic
  • Choice between “Server” mode with table view and “Quickserve” mode for bartenders and other quick orders
  • Fully-integrated online ordering system
  • Detailed online reporting suite
  • 24/7 support

Integrations With Other Restaurant Software:

  • Grubhub
  • Shogo
  • Restaurant 365
  • CTUIT
  • Peachworks
  • 7Shifts

The Quick & Dirty:

Breadcrumb pricing starts at $99/month. Again, it’s a solid all-in-one restaurant POS system for iPad with an array of restaurant features. When compared to Toast, however, Breadcrumb might come up slightly short in some respects, such as inventory management. However, Breadcrumb offers integrations with third-party restaurant apps to help fill in any functionality gaps.

4. ShopKeep

Review Visit Site

Highlights

  • Powerful retail and restaurant tools
  • Available on iPad (Analytics app on iOS)
  • Multiple hardware options available
  • Pricing based on custom quotes 
  • Loyalty program only as add-on

Excellent all-around POS: Get your custom quote

While it can be used for either restaurant or retail environments, ShopKeep is a great all-around POS software system that’s reasonably priced and extremely easy to use. Aimed at small businesses in particular, this iPad POS software has a pleasant, Apple-centric interface with convenient register buttons for the most popular menu items. ShopKeep uses a “hybrid” data storage system in which data is stored locally on your restaurant’s iPads, and then syncs back to the cloud when there is an internet connection.

As with the other restaurant POS apps on this list, ShopKeep has integrations to make up for any restaurant management features it doesn’t have, such as advanced inventory management and online ordering.

Useful Features:

  • Integrated ShopKeep Payments payment processing
  • Comprehensive register functionality
  • Extensive back-office reporting suite
  • Raw ingredient inventory management
  • 24/7 customer support
  • Staff management tools
  • ShopKeep Pocket App to track restaurant metrics from iPhone or Android

Integrations With Other Restaurant Software:

  • MailChimp
  • ChowBot (online ordering and delivery)
  • Quickbooks
  • AppCard

The Quick & Dirty:

ShopKeep is an affordable and capable iPad POS that works well for small restaurants of any type. ShopKeep pricing is customized based on your individual business’s needs and is comparable to TouchBistro or Lightspeed Restaurant. Note that while Shopkeep does provide fairly priced in-house payment processing via Shopkeep Payments, you can also use an outside payment processor.

5. Lightspeed Restaurant 

Review Visit Site

Highlights

  • Affordable iPad POS for restaurants
  • Fully cloud-based
  • Also works on iPhone and iPod touch
  • Best for small-to-medium restaurants

Try out Lightspeed Restaurant: Free trial offer

Lightspeed Restaurant is an app-based iPad POS system built specifically for—you guessed it—restaurants. Lightspeed is not the most complete restaurant POS out there, but it is highly mobile-friendly and certainly delivers a lot of bang for your buck.

The Lightspeed Restaurant app requires iOS 9.3 or later to operate and you can access the backend via any internet-connected web browser. In addition to iPads, Lightspeed can even be used on an iPhone or iPod touch, though using the app on those two devices is best for basic features such as clocking in and quick orders.

Useful Features:

  • Intricate employee management
  • Raw ingredient tracking
  • Tableside ordering lets servers show pictures of menu items to customers
  • Floor planner
  • 24/7 phone support excluding holidays
  • Ability to set up timed promotions
  • In-depth reports

Integrations With Other Restaurant Management Software:

  • Resengo
  • Orderlord
  • QuickBooks
  • Xero
  • MarketMan
  • AppCard
  • Multiple online ordering services

The Quick & Dirty:

Lightspeed Restaurant pricing starts at $69/month. This cloud-based iPad POS app is perfect for small-to-medium restaurants of any type.

Other Restaurant Management Apps

What follows are some more restaurant management apps. Rather than the complete restaurant management tool that POS systems provide, these apps have a limited, specific function — like reservations or email marketing — and may integrate with your POS system or be used separately.

opentable

6. OpenTable

OpenTable is an online reservation and waitlist system that’s convenient to use for both restaurateurs and customers. You can access the app on your smartphone or tablet to view or change reservations, and to see your waitlist in real time. OpenTable is a highly useful tool for restaurant managers and waitstaff alike.

Useful Features:

  • Guests can make online reservations from your website, the OpenTable app or website, or third-party
  • Monitor status of each table in your restaurant
  • Shift management tool

POS Integrations:

  • Aloha
  • Micros
  • POSitouch
  • Heartland Dinerware
  • Squirrel Systems
  • Toast (coming soon)

The Quick & Dirty:

OpenTable is online reservation software for restaurants of any type, especially favored by trendy, upscale bars and eateries. OpenTable’s “Connect” option has limited features but only costs between $0.25 and $2.50 for each booked guest. The “GuestCenter” option with more advanced restaurant management features and POS integration is $249/month + $1 per reservation.

7. Fivestars

fivestars logo

Fivestars is a mobile rewards program for local businesses such as restaurants. Customers sign up for Fivestars’ loyalty program either at your restaurant or via the Fivestars mobile app and start earning rewards and receiving promotional offers via text, email, or push notification. Your staff then redeems your customers’ rewards and offers from your POS or a mobile device.

Fivestars also has a lot of cool marketing features that vary depending on which plan you choose. Whether you want to encourage repeat business or gain a competitive edge on other restaurants in your area, Fivestars will help you do both.

Useful Features:

  • Automated rewards and promotions
  • Send one-time offer anytime your sales need a boost
  • Multiple options for setting up rewards system, e.g., customers could earn points per-dollar, per-visit, etc.
  • Social media integration
  • Customer data collection

POS Integrations:

  • Clover Station
  • Clover Mini
  • QuickBooks POS
  • Harbortouch
  • Aloha
  • Aldelo
  • Windows POS

The Quick & Dirty:

Fivestars online loyalty software is especially popular among cafes and coffee shops, but it’s also used by full-service restaurants, bars, bakeries, smoothie shops, and every other type of brick-and-mortar eatery. Fivestars’ starter plan—which includes two customer-facing tablets, POS integration, the Autopilot program, onboarding and three training sessions—is $279 per month.

Best Accounting Mobile Apps

8. QuickBooks Online

QuickBooks is essential accounting software for small businesses, and restaurants are no exception. In recent years, this quintessential business software has become has become more online and mobile-friendly, with the introduction of QuickBooks Online and excellent mobile apps for iOS and Android.

Besides making accounting tasks simple and affordable for independently owned restaurants, cloud-based Quickbooks Online also integrates with most modern restaurant POS systems.

Useful Features:

  • True double-entry accounting
  • Live bank feeds for easy bank reconciliation
  • Unlimited estimates and invoices
  • Accounts payable with ability to create purchase orders and convert them to bills
  • Easy-to-use payroll and other employee management features (for additional cost)

POS Integrations:

Quickbooks Online integrates with most restaurant POS systems. Usually, the question is not whether Quickbooks integrates with your POS, but rather, the quality of the Quickbooks/POS integration. A direct, seamless integration is ideal. Here you can read about 7 POS system that have direct integrations with Quickbooks.

The Quick & Dirty:

QuickBooks online is cloud-based accounting software for any internet connected device. Depending on which features you need, QuickBooks online will set you back between $15 and $50/month.

Xero logo

9. Xero

Xero is a QuickBooks alternative which many restauranteurs around the world use every day to manage their restaurant’s accounting tasks. Just like QB Online, Xero has both iOS and Android apps and can be accessed via any internet-connected device. Xero also integrates with many cloud-based restaurant point of sale systems.

Xero doesn’t have as many features as QuickBooks; for example, payroll support is limited to only 37 states and there is no job-costing feature. However, Xero also costs a lot less than QuickBooks.

Useful Features:

  • Accounts payable feature with recurring bills and purchase orders
  • Unlimited users with extensive user permissions controls
  • Double-entry accounting
  • Excellent customer service
  • Easier to use than QuickBooks (in most respects)
  • 500+ integrations

POS Integrations:

While Quickbooks is the most popular accounting software system, Xero is catching up and most major POS systems integrate with Xero as well as Quickbooks. Some of these systems include:

  • Square for Restaurants
  • Nobly POS
  • TouchBistro
  • Lightspeed
  • Vend
  • Shopify POS

The Quick & Dirty:

With pricing starting at just $9/month, online accounting app Xero is a more affordable QB alternative for restaurants that don’t need every advanced accounting feature.

10. MailChimp mailchimp logo

MailChimp is email marketing software you can use to boost the online marketing efforts of your restaurant. While most POS apps include some email features, they are usually somewhat lacking. With a fully featured email marketing program like MailChimp, you can set up automated email campaigns to build customer loyalty, advertise promotions, and grow your social media following.

MailChimp is entirely cloud-based; the company also offers a mobile app for iOS and Android devices.

Useful Features:

  • 23 basic templates and hundreds of theme templates
  • Easy list segmentation
  • Advanced email campaign reporting
  • Robust free plan includes up to 2,000 subscribers and sends up to 12,000 emails per month.

POS Integrations:

  • Revel Systems
  • Shopkeep
  • Lightspeed
  • Epos Now

The Quick & Dirty:

MailChimp has a very decent free plan and paid plans start at $25/month, scaling up depending on how large your list is (and how many features you want). This easy-to-use ESP supports both small start-ups and large corporations.

Final Thoughts

A successful restaurant business has the same basic ingredients it did 20 years ago or even 200 years ago: delicious food, happy customers, excellent service, and organized behind-the-scenes processes to keep everything running smoothly. However, the tools used to achieve restaurant success have changed with advances in technology. Everything from taking payments, to advertising, to bookkeeping, to employee management has been digitized.

One important job of restaurant management that can’t be replaced with automation is the restaurant manager herself. Being awesome at your job, I’m sure you will do a great job selecting the management apps that work for your unique restaurant business. Have fun with the selection process and make sure you utilize free trials of all of these apps so you can be sure the restaurant management software you choose works great for your needs before you commit.

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