SBA Disaster Loans: Do I Qualify For One?

Whether your area was affected by a wildfire, tornado, record-setting hurricane or another catastrophic event, the next steps can feel daunting or overwhelming. Many homes and businesses find that insurance won’t cover as much as they thought—and that leaves a large gap between where they are now and the ability to move forward with everyday life as usual.

Thankfully, there is an option to finance the funds needed to rebuild—funds that can help not only business owners, but homeowners as well. Offering no upfront fees, no penalties for paying off the loan early, and low interest rates, an SBA disaster loan can help you begin to put the pieces back together after a life-altering event.

What Are SBA Disaster Loans?

While the primary mission of the Small Business Administration is to support entrepreneurs, with special programs focused on women, veterans, low-income, and minority business owners, this agency also offers low-interest loans to assist business owners, homeowners, and renters after a disaster. No matter where you fall in the insurance spectrum — whether you’re covered well, are underinsured, or have no protections — FEMA recommends applying for an SBA loan to cover gaps in insurance coverage or to provide bridge funding before the insurance check arrives.

Read on to find out more about the types of SBA disaster loans and to find the option that fit your situation best. It’s time to get the financing you need to recover your business and your life.

Business Economic Injury Disaster Loans

The Economic Injury Disaster Loan Program (EIDL) provides financial assistance to both small businesses and private, non-profit organizations that are located in a declared disaster area. Coverage depends on the amount of economic injury sustained but isn’t necessarily calculated by the actual physical damage to the business. Coverage for an economic injury disaster loan is capped at $2 million dollars, but the amount you can finance is based on the actual economic injury you’ve sustained after a disaster. So if sales have dipped because people simply can’t get to your storefront location, or the area was closed but your property isn’t damaged, for instance, an economic injury disaster loan may be able to help you cover costs associated with loss of business.

Am I Eligible For The Economic Injury Disaster Loan Program?

To be eligible for an economic injury disaster loan through the SBA, you’ll need to be located in a disaster-declared country or contiguous county. This type of loan is open to private organizations or small business owners who have sustained economic injury because of the declared disaster. In addition, repayment terms will be dependent on your ability to repay the loan.

Your first step in learning more is to visit the SBA’s Disaster Loan Assistance page where you can look up eligible disaster areas, apply online, and check your application status. Read on to learn more about the qualifications and other frequently asked questions in the proceeding sections below.

Business Physical Disaster Loans

If your business has sustained physical damage in a declared disaster area, you can apply for a physical disaster loan to receive the financial assistance you need to move ahead. There is no business too small or too large to apply—and most nonprofit organizations may also be eligible for an SBA loan to help rebuild after a disaster strikes.

Repayment terms can be flexible and will depend on your ability to repay the loan. Your repayment period can be up to 30 years with an interest rate that will not exceed 4% if you cannot obtain credit with another source and no more than 8% for those who have available credit options elsewhere.

How Can I Tell If My Area Is A Declared Disaster?

To check all currently declared disasters and determine if you can apply for disaster loan assistance, visit the U.S. Small Business Administration webpage for more information. You’ll find a listing of states, incidents, and affected incident periods.

If you know you are in a declared disaster area and you have sustained physical damage to your business, the next steps you need to take are to visit the SBA site and begin the application process for disaster loan assistance.

What Can An SBA Physical Disaster Loan Be Used For?

Business physical disaster loans from the SBA “must help return damaged property to its pre-disaster condition through repairs or replacements.” Funds can be used to purchase or repair machinery, equipment, fixtures, inventory, and of course, building improvements—anything at your physical location that was damaged by the disaster.

Home & Physical Property Disaster Loans

As mentioned at the beginning of the post, the SBA typically focuses on supporting the entrepreneur through small business growth. However, if you’re a homeowner or renter in a declared disaster area, you may also find help to rebuild from the U.S. Small Business Administration. The SBA offers home and property disaster loans—affordable financial assistance in the form of long-term, low-interest loans for any loss that isn’t covered by your insurance or other coverage means.

How Much Can I Borrow?

To repair your home to its pre-disaster state, you can borrow up to $200,000—but you won’t be able to use this as working capital to upgrade or make additions to your home unless these are required by a building authority or code update.

In addition to repairing structures, you also might be able to borrow up to $40,000 to replace your personal property such as clothes, furniture, or other contents in your home. You can’t use the funds to replace antiques, collections, a pleasure watercraft, or recreational vehicles, however.

If you are a homeowner or renter who needs to rebuild in a declared disaster area, this option from the SBA can be the boost needed to move ahead.

What Types Of Businesses Are Eligible For SBA Disaster Loans?

buying a franchise

Below are some of the more common questions relating to eligibility for an SBA disaster loan. While the SBA certainly has guidelines and eligibility requirements, there is hope even if you don’t have a lot of collateral or you have some past credit issues.

Is My Business Eligible For A Disaster Loan?

In addition to your business being located in an officially declared disaster area, there are some other guidelines to keep in mind when it comes to eligibility. Most of the qualifications to receive an SBA loan are covered in the answers to the most commonly asked questions below, but in a nutshell, it’s going to come down to your location, creditworthiness, ability to repay, and collateral.

More About The SBA Disaster Loan Process

Does The SBA (Or FEMA) Perform Credit Checks?

Yes, to obtain a disaster loan you will need to demonstrate a history of creditworthiness. The SBA will perform a credit check. If you’re worried that your lack of credit history will deter you from getting the funds you need, take heart –there’s another route to demonstrating your ability to pay. The SBA will examine your history of paying utilities, rent, or insurance as positive evidence that you can repay.

It’s a wise move to know your credit score before you apply, so you can be prepared. Take advantage of some of the best free places to check your credit and stay informed.

What About Disaster Relief Loans For Bad Credit?

As stated above, the SBA will perform a credit check on your accounts. While you need to show you have regularly made payments on accounts, you don’t need to be too concerned if you have a few negative marks on your credit report, as long as the majority of your accounts are in good standing with the reporting agencies.

Do I Need Collateral?

If you need more than $25,000, the SBA will likely require collateral to secure your loan. Typically, they will accept real estate or other assets to secure your loan, but don’t be too discouraged if you don’t have collateral. If you are otherwise eligible for an SBA economic injury loan and have no collateral to provide, for instance, you may simply be required to pledge what is available instead of being denied. The program is set up to be as accessible as possible, so you will be considered whether you have collateral or not.

How are Disasters Declared?

Only businesses located in an officially declared disaster area can access SBA disaster loans. Generally, there are seven ways a disaster can be declared:

  1. A Presidential Declaration for Individual Assistance is requested by the governor of a state. The presidential declaration activates FEMA and will automatically make SBA disaster loans accessible to businesses and private, non-profit organizations.
  2. An Administrative Agency Declaration can be made by the governor of the state to activate SBA’s disaster loan program available to businesses, homeowners, and renters alike.
  3. A Presidential Declaration for Public Assistance can also be requested by the governor. Once the President approves, business physical damage and economic injury loans are made available.
  4. The Secretary of Agriculture can declare a disaster area. The SBA will then also declare the availability of disaster loans relating to businesses engaged in agriculture.
  5. A Governor Certification Declaration occurs when a governor goes to the SBA directly and requests a declaration based on certification of the damages an area has.
  6. The Secretary of Commerce may determine that some eligible small businesses have economic injury directly related to commercial fishery failures or resource disasters.
  7. A Military Reservist Declaration can be made for individuals who are considered “essential employees” and are called up to active duty as military reservists during a period of military conflict. Working capital loans can be made available to businesses that aren’t able to meet ordinary and necessary operating expenses due to the absence of essential employees.

SBA Disaster Loan Terms & Rates

The table below will give you a quick peek of terms and rates for the two business-focused SBA disaster loans—the economic injury disaster loan and the business physical disaster loan.

SBA Disaster Loan Application Process

As mentioned above, your first step in the application process for an SBA disaster loan is to fill out an application at the Disaster Loan Assistance portal through the SBA. Here you will be able to verify whether you’re in a disaster area, apply online (or find the phone numbers you need), and check on your application once it’s been submitted.

When you’re trying to recover from a disaster and start rebuilding, time is of the essence. This is why it’s important to begin gathering the documents you’ll need to keep things moving forward:

  • Start making an itemized list of your losses
  • Include the estimate to repair or replace items
  • Obtain a copy of the necessary federal document (income tax information) that is referenced in the application
  • Provide a brief history and overview of your business
  • Gather business and personal financial statements

The good news is that, unlike a typical SBA loan, funding for a Disaster Loan can be completed in as little as 7-21 days. You may receive your funds in increments as you begin repairing to cover necessary costs.

Need An Alternative To Federal Disaster Loans?

If you’re forced to seek alternatives to an SBA loan, you’ll find you do have other options. Whether the SBA is denying disbursement or you simply want to shop around and find the best financing options for your particular situation, check out our Small Business Loans Comparison Page for more information. With an online loan, you may be able to get your funds faster, you’ll want to pay attention to rates and repayment terms; these will typically be less attractive than what the SBA can offer.

After a disaster, you may feel that you’re treading water for a while. Fortunately, with the help of disaster assistance loans, you do have hope and resources to make progress again. Follow the references listed above to learn more and start the healing and recovery process.

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SBA Loans For Veterans: Everything You Need To Know About VA SBA Loans

After serving their time in the military, many veterans choose to start their own businesses. In fact, military veterans own about 7.5% of the businesses in the United States. Just like any other small business owners, there comes a time when these entrepreneurs need funding, whether it’s for purchasing equipment, expanding the business, or funding a startup project. And like civilians, many veterans are looking for a business loan that will help them expand their business without forcing them to shoulder extra debt. For these business owners, an SBA VA loan could be the answer.

What Is The SBA?

Before going into the specifics of SBA loans for veterans, it’s important to first know what the SBA is and how it offers benefits to small businesses. SBA stands for Small Business Administration. This is a government organization that offers assistance to small businesses. Through the SBA, business owners have access to education, information, and training. The SBA serves as an advocate for small businesses and provides a critical piece of the entrepreneurial puzzle: business financing.

How Can The SBA Benefit Veterans?

Getting a business loan is tough for anyone, but it can be especially difficult for military veterans. This is because traditional loans require a strong financial history. Many veterans and servicemembers on active duty may find that they have gaps in their credit history. If they’ve been deployed for any length of time, they may not have credit cards, utility bills, mortgage payments, or other records credit unions use to judge creditworthiness. This can make obtaining a business loan very difficult, if not impossible.

This is where the SBA can be of service to veterans. While SBA loans require typical paperwork and items such as credit scores and income verification, lenders are able to work with military veterans’ unique situations to provide them with the funding they need. Because these loans are backed by the SBA, lenders are more willing to lend to qualified borrowers, while business owners enjoy VA SBA benefits including low interest rates and flexible terms. (This is ideal because veterans won’t be stuck getting subprime traditional loans that can push them into debt or even bankruptcy.)

Types Of SBA Loan Programs For Veterans

small business loans for veterans

The SBA offers multiple programs that provide money for veterans and servicemembers. SBA disabled veterans loans can also help inactive servicemembers that were injured in the line of duty. SBA loans are often difficult to obtain, but selecting the right product beforehand and knowing what to expect during the application process can help ease the path to obtaining funding.

The Veterans Advantage Loan Program

The Veterans Advantage Loan Program is similar to the 7(a) Loan Program — the most popular option for SBA loans. This is a popular choice for veterans and civilians alike because the loan can be used for just about anything. This includes expanding a business, acquiring a new business, financing a franchise, renovations, construction, equipment, working capital, or even refinancing old debt.

The Veterans Advantage Loan Program offers the same great benefits with reduced guaranty fees for veteran-owned businesses. Under this program, veterans can borrow up to $5 million. SBA 7(a) Veterans Loan for business acquisitions and expansions have terms of up to 10 years; commercial real estate purchases have terms up to 25 years, while equipment financing loans can be paid back over a period of up to 15 years.

For 7(a) Loans less than $125,000, there is no guaranty fee. For loans between $125,001 and $150,000, the fee is just 1%. For loans up to $350,000, the fee is 1.5%. The maximum upfront guaranty under this program is 3.75% for loans from $700,001 up to and including $5 million. Interest rates vary on these loans from 7.25% to 9.75%. Find out more about the terms and rates of SBA 7(a) loans.

One of the biggest drawbacks to an SBA 7(a) Loan is the timeline for receiving the money. The application, approval, and funding process can take months in most cases. However, the SBA does offer SBA Express Loans for veterans, which can provide faster approval, although the timeline for receiving the funds varies from lender to lender. Through the Express program, the SBA guarantees that the application will be processed within 36 hours. SBA Express Loans for veterans are available in amounts up to $350,000, and there is never an upfront guaranty fee for veteran-owned businesses.

The Military Reservist Economic Injury Disaster Loan Program

Reservists and National Guard members have learned to expect the unexpected. Servicemembers know that a deployment could come at any time, forcing them to leave family, friends, and business responsibilities behind. Military reservists and members of the National Guard who face economic hardship during or after a deployment can get the financing they need for their business with an SBA loan.

The Military Reservist Economic Injury Disaster Loan Program is designed to help cover operating costs while a veteran is on active duty. These loans are available in amounts up to $2 million with maximum terms up to 30 years. The maturity of the loan is based on the applicant’s ability to repay the loan. For these loans, collateral is required for any amount over $50,000. It’s important to note that the SBA will not turn down a loan simply for lack of collateral, but the borrower will be required to put up any available collateral, including real estate.

These loans are very attractive to military veterans because of their repayment terms and their low interest rates. SBA Veteran Loan rates are currently set at 4%. These loans provide the working capital needed to pay necessary expenses; funds can not be used for income or profit loss, refinancing debt, or business expansion.

Does The SBA Offer Grants For Veterans?

Unfortunately, there are no SBA grants for veterans. However, the organization provides a variety of resources to give veterans the tools they need to succeed in business. These programs are funded by the SBA and are available to servicemembers, veterans, and in some cases, military spouses.

SBA training programs include Boots to Business, the Women Veteran Entrepreneurship Training Program, Service Disabled Veteran Entrepreneurship Training Program, and the Veteran Federal Procurement Entrepreneurship Training Program. More details on these training programs are available through the SBA website.

What About The SBA Patriot Express Loan Program?

The SBA Patriot Express Loan program was established in 2007. Under this program, veterans and eligible spouses were able to apply for up to $500,000 in business funding at rates that ranged between 2.25% and 4.75%. Unfortunately, this program was discontinued in 2013 and is no longer available. Veterans that wish to take advantage of a similar program can apply for the SBA Express Loan.

Who Qualifies For A VA SBA Loan?

To qualify for the Veterans Advantage Loan Program, the small business must be at least 51% owned and controlled by veterans, service-disabled veterans, active-duty military in the Transition Assistance Program, or a reservist or National Guard member. Spouses of veterans, active-duty service members, reservists, or National Guard members also qualify, as well as spouses who were widowed because of death during service or death from service-related disabilities. These requirements also apply to SBA Express Loans.

Non-servicemembers and civilians can apply for an SBA 7(a) loan under the traditional terms. They will not receive the discounted guaranty rates provided to veterans.

Veterans and servicemembers applying for the Veterans Advantage Loan Program must meet all requirements set forth for SBA 7(a) Loans. Requirements include a credit score of at least 680 (in most cases) as well as personal collateral. The business must not be delinquent on any debts to the government and should not have any foreclosures or bankruptcies on their credit report. All borrowers should be in business for at least 2 years, although startups are eligible with adequate industry experience and a solid business plan.

Applicants must also have fewer than 500 employees and less than $7.5 million in sales each year. The business must be for-profit and should have a qualifying need to receive funding. It’s also recommended that alternative resources are sought before applying for an SBA loan. Businesses that engage in investments, rentals, and lending are not qualified. Learn more about the requirements for obtaining this type of loan.

The Military Reservist Economic Injury Disaster Loan Program is available to servicemembers, reservists, or National Guard members who are on active duty. The servicemember must apply for the loan while on active duty or for a period of one year following the end of active service or discharge.

Any veteran that has been dishonorably discharged from their branch of service is not eligible to receive funding through the SBA Veteran Loan Programs.

How To Apply For SBA Loans For Veterans

After choosing which VA SBA Loan is right for you, the next step is to be prepared for the application process. Although the process can be tedious, taking the necessary steps and knowing what to expect will help everything go smoothly.

Credit scores do play a factor in receiving SBA loans. Generally, a credit score of 680 or higher is required. There are multiple online resources that can be used to check your score and obtain a free credit report so that any errors can be addressed. Please note that if there are any negative items on your report, the lender will require a valid explanation. Personal and business credit reports are reviewed by all lenders.

For the SBA Veterans Advantage Loan program, a potential borrower must choose a qualified lender. The SBA offers a Lender Match service that connects businesses with a lender in their area. While some applications can be completed online, lenders generally require a phone call or in-office visit by the applicant.

For the Military Reservist Economic Injury Disaster Loan Program, applications can be obtained by contacting the Disaster Assistance Customer Service Center via phone or email.

After getting in touch with a lender, it’s time to gather the required paperwork.

  • DD Form 214 is required for veterans, service-disabled veterans, or spouses of veterans.
  • Transitioning active-duty military members, reservists, and National Guard members must have a copy of DD Form 2.
  • DD Form 1173 is required for spouses of transitioning active-duty military members, reservists, or National Guard members.
  • Military widows are required to have documentation from the Department of Defense.

To obtain an SBA VA Loan, you must be prepared to show that you can repay the loan, operate your business successfully, and put up 10% to 25% equity. Other documentation will be required during the application process, including:

  • At least three years of business and personal income tax returns
  • Financial statements, projections, business certificates, and licenses
  • A business plan.

Requirements vary, so you can ask your selected lender about their requirements so you can gather the needed information.

Veterans who choose SBA Express Loans will receive notification of approval within 36 hours, although funding the loan will take weeks or months. On average, the application, approval, and funding process for SVA 7(a) Loans takes a minimum of 60 to 90 days. If this timeline doesn’t work for you or you don’t meet the qualifications of obtaining an SBA loan, find out more about other funding options for veterans.

Final Thoughts

Although the process of applying for an SBA loan isn’t easy, the competitive terms make it worth it for many servicemembers, veterans, and their families. SBA Veteran Loans allow those who serve their country to be able to truly live the American Dream through successful ownership of their own business.

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The Best Offshore Merchant Account Providers

Offshore Merchant Account Providers

Ordinary payment processing is complicated. But finding good offshore, international, or high-risk payment solutions can be a real nightmare. If you fall into one of these categories, you’ve likely had your merchant account applications denied at least a few times. Even worse, perhaps you’ve had your processing service terminated and your money withheld from you for months. We understand your struggle. We’ve seen hundreds of businesses go through the exact same thing, and we’re here to help you find the perfect offshore merchant account for your high-risk business.

If you’re just looking for a run-of-the-mill high-risk merchant account for your business, you’ll want to check out our article The Best High-Risk Merchant Account Providers. The high-risk category often includes business types that you wouldn’t normally associate with the term “high-risk,” such as airlines or online furniture sales. While these types of businesses are usually treated as high-risk by banks and processors, they can usually be approved for a domestic merchant account by working with a high-risk specialist.

For our purposes, we’ll use the terms offshore merchant account and international merchant account interchangeably, as they mean the same thing. Both terms refer to a merchant account that is underwritten by a bank or processor that is situated in a different country from the one where the business is located. The most common reasons for needing an offshore account include the following:

  • You do a significant amount of business in a foreign country and need to accept payments in the local currency.
  • Your business has offices in multiple countries, and you need separate merchant accounts for each location.
  • Your business is considered to be so risky that you cannot obtain a regular high-risk merchant account in your own country.

Below, we’ll discuss the factors to evaluate when considering an offshore merchant account and several special features that you’ll want to include in your service. We’ll also profile four offshore merchant account providers that we feel offer superior service and overall value in comparison to their competitors.

Factors To Consider When Selecting An Offshore Merchant Account

While many offshore merchant account providers also specialize in high-risk accounts more generally, not all high-risk processors work with international merchants or provide offshore accounts for domestic merchants. Many high-risk specialists only work with US-based businesses, and only provide accounts through US-based banks and processors. Before you apply for an offshore account, you’ll want to confirm that the company you’re considering works with businesses located in your country. This information might be spelled out explicitly on the provider’s website, or you might have to talk to their sales staff to get a confirmation.

Providers that specialize in setting up offshore merchant accounts can usually get you an account in just about any country around the world, though obviously, there are exceptions. As a US-based merchant, don’t expect to set up your offshore account in a place like Afghanistan or North Korea. It’s simply not going to happen. With the exception of countries limited by political considerations or a high level of instability, however, the possibilities are wide open.

In most cases, you should aim to get an account in a country where you expect to do a significant amount of business. On the other hand, if your business is going to operate exclusively in the United States, an offshore account serves mainly as a last resort for getting a merchant account when you simply can’t get approved for a domestic high-risk account. Banking regulations are more relaxed in certain other countries, and the willingness on the part of banks and processors to work with high-risk businesses is also more favorable. At the same time, you should be aware that setting up an offshore account under these circumstances, while it might be your only option for accepting credit cards, can present some serious risks to you as well. Your ability to pursue a legal remedy against a foreign bank or processor might be severely limited – or even nonexistent. At a minimum, you should consider legally registering your business in the country where your account will be located. Even with legal standing in the country, however, be aware that it might be extremely inconvenient and expensive to pursue a legal action outside of your own country.

There’s also an increased risk that you could become the victim of fraud or identity theft. Banks in other countries collect the same personal data about you and your business that US-based banks do, but they don’t always do as good a job of protecting it. You’ll want to keep an especially close eye on your merchant account, your business account, and any personal accounts about which you’ve released information to get approved for an offshore merchant account.

High-risk merchant accounts are notorious for including higher processing rates and account fees, and offshore accounts can be even worse. Providers know you’re particularly desperate and some, but not all, will take advantage of your situation by charging you as much as they think they can get away with. We recommend that you shop around and compare multiple quotes when looking for an offshore account. Don’t accept the first offer from a bank or processor just because they’re the first one that hasn’t rejected your application due to the nature of your business.

Note that merchant account providers who market offshore accounts often downplay or fail to mention these risk factors, so it’s up to you to look out for yourself. Do your own independent research, compare multiple offers, and thoroughly review all contract documents before you sign up for an account.

Special Features Of Offshore Merchant Accounts

For the most part, you’ll want the same services and features for an offshore account that you would want for a traditional merchant account. This includes processing hardware such as credit card terminals and POS systems for retail merchants, and a robust payment gateway for eCommerce merchants. You’ll also want an online account dashboard of some kind that allows you to monitor your sales in real-time. While online account access is now a standard feature in the United States, you might not always find this feature with an offshore account. Mail-order and telephone-order (MOTO) businesses often find a virtual terminal to be the most cost-effective method for inputting transactions. Depending on the needs of your business, a smartphone- or tablet-based mobile processing system might also be important. Almost all providers offer some type of mobile processing system these days, either as a proprietary product or through a partnership with a third-party provider. Be aware that very few mobile processing systems have begun to offer EMV-compatible card readers, and you’ll often be stuck with a magstripe-only reader.

In addition to these basic merchant account features, there are several special features that your offshore merchant account might (or might not) include. How important these features are to your business will be determined by how you intend to use your account. Extra features to look for in an offshore merchant account include the following:

  • Multi-Currency Support: If you’re going to do business in a foreign country, it only makes sense that you’ll want your customers to be able to pay in their local currency. Multi-currency accounts allow you to maintain balances in multiple currencies and can save you a ton of money in currency conversion costs.
  • Currency Conversion Services: Having an offshore account will invariably require you to convert funds into your own local currency at some point. Most offshore account providers include built-in currency conversion services that allow you to convert foreign funds when it comes time to transfer them to your business account. While these services can sometimes offer you much lower conversion fees than what a bank would charge you, it still pays to shop around for the best deal on this service. You might save money by using an international transfer service such as TransferWise or OFX.
  • Expanded Anti-Fraud Features: Offshore merchant accounts invariably involve a higher degree of risk of fraud than their traditional counterparts, so you’ll want as many extra services to avoid it as you can get. Most offshore account providers offer a number of enhanced anti-fraud features as a standard part of their service. These features automatically detect suspicious activity, hopefully stopping any fraudulent activity before it can affect your business. Providers are increasingly turning to artificial intelligence (AI) features to improve their ability to detect potential fraud beyond what would be possible with a traditional algorithm.

With these considerations in mind, let’s take a brief look at four of our overall favorite offshore merchant account providers:

Durango Merchant Services

Durango Merchant Services is a small merchant account provider headquartered in Durango, Colorado. Established in 1999, the company specializes in providing high-risk and offshore merchant accounts to hard-to-place businesses. They work with a wide variety of banks and processors to find a suitable account for almost any business. While they can’t place 100% of the merchants who apply to them, their track record is very good, and their sales process is so transparent and honest that we’ve even seen praise for the company from merchants who’ve been turned down for an account.

If you need an offshore account, Durango has you covered. Their accounts include multicurrency support as well as enhanced anti-fraud features to keep you protected. They can set up accounts in countries as diverse as Germany, Panama, Spain, and many others.

Durango doesn’t try to set you up with expensive leases when it comes to processing equipment. Instead, they offer a variety of terminals for sale right on their website. Options include both wired and wireless models, with some offerings that support NFC payments. They also sell the iPS Mobile Card Terminal, which connects to a smartphone to provide mobile payments capability in conjunction with the iProcess mobile app. If you’re using a virtual terminal, they sell the MagTek DynaMag, a USB-connected magstripe card reader that attaches to your computer. Unfortunately, it’s Windows-only. Durango currently doesn’t offer any POS systems for sale.

The company supports eCommerce through its proprietary Durango Pay payment gateway, which integrates with the numerous processors the company uses and includes support for most of the popular online shopping carts. Durango’s gateway also features an Authorize.Net Emulator, which allows it to interface with any shopping cart that works with Authorize.Net (see our review).

Because Durango works with such a wide variety of third-party processors to set you up with an offshore merchant account, they don’t list rates or fees on their website. These will vary tremendously depending on which processor they set you up with. While we normally like to see more transparency from merchant account providers, in this case, it’s understandable. Depending on your qualifications, you can expect either an interchange-plus pricing plan or a tiered one. Merchant accounts through Durango don’t seem to have standardized fees. Again, these will depend on the terms that your backend processor imposes.

Durango assigns a dedicated account manager to every one of their merchants, which means you’ll be talking to the same person every time you have an issue. While this can sometimes be problematic outside of regular business hours and when your account manager isn’t available, overall it provides a much higher level of service than you’ll get from a random customer service representative.

Pros

  • Direct sales of processing equipment
  • Reasonable rates and fees based on your business and your backend processor
  • Dedicated account manager for customer service and support

Cons

  • No support for POS systems
  • USB card reader not compatible with Mac computers

For more information about Durango Merchant Services, read our complete review.

SMB Global

SMB Global logo

SMB Global is a new high-risk provider that was spun off from one of our favorite providers, Payline Data in 2016. Headquartered in South Jordan, Utah, the company specializes in providing merchant accounts to high-risk and offshore businesses. Using a variety of backend processors, they’re able to approve a merchant account for almost any high-risk business (including those selling CBD oils). They have an excellent reputation for fair prices and top-notch customer service.

As a newly-established business, SMB Global is still a little rough around the edges, lacking a mobile processing system and credit card terminals for retail merchants. At the same time, they offer a full range of services for eCommerce merchants, including a choice between the NMI Gateway and Authorize.Net.

Because they work with so many banks and processors to get you approved for an account, the company doesn’t offer any pricing information. Processing rates, account fees, and contract terms will all vary widely depending on which backend processor is handling your account. While we highly recommend that you request an interchange-plus pricing plan, be prepared to have to accept a tiered plan instead, particularly if you haven’t been in business for very long. Likewise, you can also expect to have a standard three-year contract with an automatic renewal clause and an early termination fee if you close your account early. As a high-risk merchant, you should be prepared to have a rolling reserve included in your account agreement.

SMB Global requires a minimum processing volume of $50,000 per month for an offshore merchant account, although they will occasionally waive this requirement if your business has a very strong financial history. Offshore accounts support multi-currency processing, allowing you to avoid cross-border fees. They also feature dynamic currency conversion, letting your customers pay in either their local currency or the currency in which you bill them.

Pros

  • Offers international merchant accounts to a wide variety of industries
  • Reasonable pricing and contract terms
  • Excellent customer service

Cons

  • No mobile app
  • No information available about credit card terminals or POS systems

For a more detailed look at SMB Global, be sure to check out our full review.

Host Merchant Services

Host Merchant Services is a relative newcomer to the merchant accounts business, first opening in 2009. The company is headquartered in Newark, Delaware and has a second office in Naples, Florida. While they primarily cater to traditional, low-risk businesses, they can accommodate several categories of high-risk businesses and also offer offshore accounts. Their interchange-plus-only pricing and a full range of products and services make them an excellent choice – if you can get approved. A former web hosting company, HMS is ideally suited for eCommerce merchants. They use TSYS as their primary backend processor, but can also work with several international banks and processors to get you an account.

For retail merchants, HMS offers a variety of Verifone and Equinox (formerly Hypercom) terminals. Terminals are offered for sale, and the company does not lease its equipment. While prices are not disclosed on the HMS website, you should be able to negotiate a very reasonable deal on terminals, especially if you need more than one. If you already have a compatible terminal, they’ll reprogram it for free.

HMS also offers a variety of POS systems that utilize either tablets or touchscreen displays. Choices range from an 8” tablet-based system up to a 17” touchscreen monitor. The company’s Starter, Plus, TouchStation Plus, and Custom POS options should meet the requirements of just about any business that needs or wants a POS system.

If you need a mobile processing capability for your business, HMS has you covered, offering the ProcessNow mobile payments system via a partnership with TSYS. ProcessNow works with either iOS or Android phones, but the current card reader is magstripe-only and requires a headphone jack to plug into.

As a tech-focused company, eCommerce is HMS’ specialty. The company has recently introduced their proprietary Transaction Express payment gateway, which includes a free virtual terminal. HMS also supports a large number of third-party gateways, including Authorize.Net.

HMS uses interchange-plus pricing exclusively for its low-risk merchants, but you might have to pay tiered rates if you have an offshore account. While they don’t disclose their rates on their website, they’re based primarily on monthly processing volume and are very competitive. Fees are not disclosed either, but include a $24.00 annual fee, a $14.99 monthly account fee (which includes PCI compliance), a variable payment gateway fee ($5.00 per month for Transaction Express, $7.50 per month plus $0.05 per transaction for Authorize.Net) and the usual incidental fees (i.e., chargebacks, voice authorizations, etc.). High-risk and offshore merchants should expect to pay higher fees than these, and possibly additional fees as well. In particular, be prepared to have a rolling reserve included as part of your account.

HMS provides customer service and support via 24/7 telephone and email. Chat is available via the HMS website during regular business hours. They also feature an extensive collection of articles and blog posts on their site for customer education. Support quality appears to be well-above-average, based on the almost complete absence of complaints about it on the BBB and other consumer protection websites. If your business falls into one of the categories of high-risk activities that the company can accommodate, HMS is an excellent choice for an offshore merchant account.

Pros

  • Full range of products and services for retail and eCommerce businesses
  • Exclusive interchange-plus pricing plans (for low-risk businesses)
  • Excellent customer service and support

Cons

  • Rates and fees not disclosed on website
  • Can only accommodate a small number of high-risk business categories
  • Mobile card reader not EMV-compliant

For more information, see our complete review.

Easy Pay Direct

Easy Pay Direct logo

Easy Pay Direct is headquartered in Austin, Texas and has been in business since 2000. The company’s primary product is their proprietary EPD Gateway, but they also provide full-service merchant accounts for international, high-risk, and traditional non-high-risk merchants. High-risk merchants will have to pay a premium in terms of processing rates and account fees, whether they’re partnered with a domestic or offshore bank or processor. However, the additional expense is entirely reasonable under the circumstances.

Like most offshore merchant account specialists, Easy Pay Direct works with a variety of banks and processors, both domestic and international, to find one that’s a match for the needs of your business. You’ll have to pay a $99 account setup fee to get started, but considering the extra effort required to underwrite a high-risk or offshore account, we feel the expense is justified in this case. Processing rates will be under a tiered pricing plan, but you should still have some room to negotiate your rates, especially if you have a high monthly processing volume. Contracts generally follow the industry standard, or a three-year initial term that automatically renews for one-year periods after that. One very positive feature about Easy Pay Direct’s contracts is that they do not have an early termination fee, even for high-risk businesses. While this isn’t quite the same thing as true month-to-month billing, it does make it much easier to close your account without penalty if you have to.

One helpful feature offered by Easy Pay Direct is called load balancing, where a business can divide its incoming funds among multiple merchant accounts. This is particularly helpful for high-risk businesses that often exceed the monthly processing volume limits imposed by the processor underwriting their account. Just be aware that you’ll usually have to pay separate monthly fees for each account, so it might not be cost-effective for some merchants. Also, be aware that you might not need this feature if you opt for an offshore account. Underwriting guidelines in some (but by no means all) foreign countries are more relaxed, and you might not have a monthly processing limit imposed on your account at all.

Although Easy Pay Direct doesn’t get as much attention as other, better-known processors, it’s a solid choice for merchants in the high-risk category or those who need an offshore account. We particularly recommend the company for high-risk eCommerce businesses due to the robust feature set of their EPD Gateway.

Pros

  • Load balancing feature for high-risk merchants
  • No equipment leases
  • No early termination fee

Cons

  • $99 account setup fee
  • Three-year contract with automatic renewal clause

Check out our full review of Easy Pay Direct for more information.

Final Thoughts

Having a hard-to-place business doesn’t mean you have to run your company through Bitcoin. You can accept credit card payments just like any other business by finding a payment processor that will set you up with the right acquiring banks. At the same time, you need to be fully aware that, for a US-based business, signing up for an offshore merchant account is a risky endeavor. You’ll want to be very cautious and carefully research any provider you consider, even the ones we’ve recommended above. Take extra care to protect your sensitive personal financial data and be sure your account includes additional fraud prevention features. You might also want to consider registering your business in the country where your merchant account is located – just in case. Having a merchant account in Panama might sound very tempting if you’ve been repeatedly turned down by domestic providers, but it will be very expensive to have to travel there in person if you later run into legal troubles with your account provider.

Of the four offshore merchant account providers we’ve reviewed above, Durango Merchant Services is undoubtedly the best all-around provider of the group. They disclose more detailed information about offshore accounts than any of the other providers. SMB Global is also an excellent choice. While the company itself is very new, they have an impressive track record from their days operating as the high-risk division of Payline Data. Finally, both Easy Pay Direct and Host Merchant Services offer a solid line-up of products and services for both eCommerce and retail merchants. If you need an offshore account to break into the world of accepting credit cards, they both have everything you need to get started.

Finally, we can’t caution you strongly enough that selecting and setting up an offshore merchant account involves a higher level of risk on your part, and you’ll need to be extra cautious in choosing a company to go with. Relaxed underwriting guidelines and a general lack of monthly processing limits make offshore accounts very tempting to merchants who’ve had a hard time getting their business approved for a traditional account, but these advantages come at a price. If anything goes wrong in your relationship with your provider, you might face some real challenges in pursuing a legal remedy. You should also be aware that if this happens, the US-based provider that brokered your account will not be able to help you in most cases.

Do your homework! Research your provider thoroughly and review all contract documents very carefully before signing up. While these steps won’t eliminate the chance of things going sideways somewhere down the road, they will shift the odds considerably in your favor.

The post The Best Offshore Merchant Account Providers appeared first on Merchant Maverick.

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Top 0% APR Introductory Rate Business Credit Cards

Getting your business a 0% APR introductory rate credit card could be helpful, especially if you’re planning to make a big purchase that you can’t pay back right away. Unfortunately, credit cards are packed with complicated rules and regulations, and with so many options available, it can be time-consuming to figure out what’s best for your business. A card that works well for Sammy’s Sandwich Shop down the street might not be the right option for you.

That’s where Merchant Maverick comes in! We’ve parsed through all your various options and come up with a list of the top 0% APR intro rate business credit cards. Besides offering that 0% APR introductory rate, these cards also provide savings via rewards and $0 annual fees, allowing you to stretch your dollar further.

So which one is right for you? Read on to find out!

American Express Blue Business Plus

This card leads the pack with a 0% APR introductory rate of 15 months. It also boasts a rewards program of two points per $1 on all purchases up to $50,000 per year, and one point per $1 on all purchases after $50,000. These points (which are worth $0.01 in many cases) can be redeemed via American Express’ Membership Rewards program in numerous ways, including at checkout for major retailers, gift cards, taxi fare in New York City, and booking travel through American Express Travel.

This card’s variable APR after those 15 months are up can run lower than average. It also grants you expanded buying power, which allows you to spend above your credit level without penalty.

However, Blue Business Plus doesn’t provide a welcome offer. Additionally, some redemptions dish out reward points at less than the standard $0.01. Rewards also start slowing down after spending $50,000 in a year, so this card might not be the best option if your business will break that threshold. International travelers should note that this card does carry a foreign transaction fee of 2.7%.

Want a full breakdown of Blue Business Plus? Check out Merchant Maverick’s comprehensive review to get the deets.

Chase Ink Business Unlimited

chase ink business unlimited

Ink Business Unlimited is a cash back card featuring a 0% APR intro rate for 12 months and no annual fee. Chase has set the cash back reward amount to 1.5% on all purchases—no cap whatsoever. Those rewards can be redeemed via deposit into your bank account or applied on Amazon purchases. Additionally, Ink Business Unlimited also provides a hefty welcome offer of $500 cash back after you spend $3,000 on purchases in the first three months.

Other benefits include additional employee cards at no extra cost, as well as travel and roadside assistance. Chase also provides purchase protection to cover new purchases for 120 days against damage or theft up to $10,000 per claim and $50,000 per account. Once the 12 months of 0% APR run dry, this card offers a variable APR that sits right around industry standard.

Marks against this card include a 3% foreign transaction fee, meaning businesses that require overseas travel may want to think twice before dipping into Ink Business Unlimited.

If you need a further breakdown on Chase’s Ink Business Unlimited, we’ve got you covered with our comprehensive review.

American Express SimplyCash Plus

SimplyCash Plus is another cash back card, although its 0% intro APR runs for nine months. It does feature a hefty rewards program for certain categories, however. Purchases at U.S. office supply stores and on wireless telephone earn 5% percent cash back, up to $50,000 per year. Additionally, you can early 3% back on a category of your choosing (airfare, hotel rooms, car rentals, gas stations, restaurants, advertising purchases, shipping, or computer hardware, software, and cloud computing), up to $50,000 per year. All other purchases will nab 1% back.

American Express’ SimplyCash Plus boasts a variable APR that can clock in at below industry standard. Additionally, its expanded buying power will let you buy above your credit limit with no penalty fees. Other benefits include extended warranty and purchase protection, as well as a range of travel benefits, from baggage insurance to a global assist hotline.

Unfortunately, rewards are redeemed through statement credit only—meaning this card won’t work for those wanting to receive cash back as a check. Besides this, SimplyCash Plus doesn’t provide a welcome offer and foreign purchases are subject to a 2.7% transaction fee.

Need more info on American Express SimplyCash Plus? Head on over to Merchant Maverick’s review.

Capital One Spark Cash Select For Business

capital one spark cash select

This is the second card on our list that runs with a 0% APR for the first nine months. Its cash back rewards program features an unlimited 1.5% back on all purchases. Cash back rewards can be applied to your account as statement credits or requested as a check. Those rewards won’t expire while your account is open and can be transferred between Capital One cards.

You can additionally collect a tidy $200 early spend bonus if you spend at least $3,000 within your first three months of opening your accounts. Spark Cash Select further provides extended warranty and purchase protection, as well as access to Visa SavingsEdge, which may offer up to 15% off on some purchases from participating merchants. You can also get employee cards at no extra cost and Capital One charges no foreign transaction fees.

Drawbacks of the Spark Cash Select include a variable APR that may sit a tad higher than industry standard once those nine months of 0% APR are up. Additionally, the flat rate rewards program may not fit within your business if you spend a lot within categories that can earn higher cash back rates with other cards.

Those who want to dig into the nitty-gritty on Spark Cash Select should take a gander at our in-depth review.

Bank Of America Business Advantage Cash Rewards Mastercard

To round out our list of 0% APR introductory rate business credit cards, we’ll look out our third entry with a 0% intro APR for nine months. This card boasts 3% cash back on purchases at gas stations and office supply stores, 2% back at restaurants, and 1% back for everything else. You’ll be able to redeem your cash rewards via a statement credit, check, or have cash deposited into a Bank of America checking or savings account.

Besides its reward program, this card’s other benefits include travel and emergency services, zero liability protection on unauthorized purchases, and overdraft protection. Clients of BofA’s Business Advantage Relationship Rewards program can get a 25% – 75% rewards bonus on the base cash back rate. This means you could earn up to 3.75% at gas stations and office supply stores, 2.75% at restaurants, and 1.75% everywhere else. There’s additionally a $200 statement credit bonus after spending $500 on purchases in the first 60 days.

On the negative side, there’s a $250,000 purchase cap for the 3% cash back categories, after which you’ll earn 1% back. Also, for businesses that require international travel, BofA’s card does carry a 3% foreign transaction fee.

Want to learn more about BofA’s Business Advantage Cash Rewards Mastercard? Visit the Merchant Maverick review of the card.

Final Thoughts

That ends our look at five of the top 0% APR introductory rate business credit cards! Still can’t decide on the best option for your business? Check out our small business credit comparison page to compare some of our favorite credit cards and learn more about picking the best card for you.

The post Top 0% APR Introductory Rate Business Credit Cards appeared first on Merchant Maverick.

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Zoho Books VS QuickBooks Online

Zoho Books VS QuickBooks Online

Tie

Accounting

Tie

Features

✓

✓

Pricing

✓

Hardware & Software Requirements

User Permissions

✓

✓

Ease of Use

✓

Mobile Apps

✓

Customer Service & Support

Negative Reviews & Complaints

✓

✓

Positive Reviews & Testimonials

Integrations

✓

Tie

Security

Tie

?

Final Verdict

?

Review Visit

Review Visit

We all love a good underdog story. But when underdog Zoho Books takes on one of the biggest names in accounting, QuickBooks Online, can this lesser-known software give QBO a run for its money? Well, that’s what we’re here to find out.

Redesigned and relaunched in 2014, Zoho Books continues to only get better. The software offers ample features, the most beautiful invoicing out there (including the ability to send invoices in multiple languages), excellent customer service, and strong mobile apps.

QuickBooks Online has been around since 2004. With advanced accounting, an impressive feature set, almost 280 integrations, and a brand new lending feature, it’s easy to see why QuickBooks Online is so popular.

But which accounting software is better, Zoho Books or QuickBooks?

At Merchant Maverick, our goal is to help you to find the best software for your small business needs. To make your decision easier, we’ve carefully researched and tested both products. We’ll compare Zoho Books and QuickBooks Online (QBO) based on features, pricing, customer experience, reputation, and more, so you don’t have to.

Don’t have time to read the whole post? Or looking for a different accounting option? Check out our top-rated accounting solutions to see our favorite recommendations.

Accounting

Winner: Tie

Both Zoho Books and QuickBooks offer strong accounting. Each uses double-entry accounting and supports both accrual and cash-basis accounting. In terms of accounting features, both offer a customizable chart of accounts, ample reports, journal entries, and bank reconciliation.

Features

Winner: QuickBooks Online

Zoho Books VS QuickBooks Online

✓

Invoicing

✓

✓

Multiple Invoice Languages

✘

✓

Estimates

✓

✓

Expense Tracking

✓

✓

Bank Reconciliation

✓

✓

Chart Of Accounts

✓

✓

Fixed Asset Management

✓

✘

Depreciation

✓

✓

Contact Management

✓

✓

Accounts Payable

✓

✓

Time Tracking

✓

✓

Project Management

✓

✓

Inventory

✓

✓

Reports

✓

✓

Tracking Categories

✓

✘

Budgeting

✓

✓

Print Checks

✓

✓

Multi-Currency Support

✓

✓

Sales Tax

✓

✓

Tax Support

✓

✓

Importing & Exporting

✓

✘

Lending

✓

Note: Feature availability varies by pricing plan.

Zoho Books and QuickBooks Online are mostly on par in terms of features. Each offers beautiful invoicing templates and invoicing automation, as well as inventory, contact management, expense tracking, accounts payable, and project management. While Zoho Books puts up a great effort, QuickBooks Online edges out the competition — but just barely.

QuickBooks Online offers several features that Zoho doesn’t, including budgeting and small business lending. In addition, QuickBooks Online has a much more developed time tracking feature and more tax support. QuickBooks Online gives users the option to add payroll to their software (for an extra cost), whereas Zoho Books has no payroll support.

One place where Zoho Books actually trumps QuickBooks is international invoicing. QuickBooks doesn’t allow you to send invoices in multiple languages whereas Zoho Books does. However, this unique touch isn’t enough to make up for the lack of budgeting and limited time tracking.

Pricing

Winner: Zoho Books

QuickBooks Online offers three pricing plans ranging from $15 – $50/month, with payroll support costing an extra $39 – $99/month (plus $2/month per employee). Zoho Books offers three pricing plans as well ranging from $9 – $29/month.

Zoho Books takes the cake as far a pricing goes, especially considering that you get nearly all of the same features as QuickBooks Online for almost half the cost.

Hardware & Software Requirements

Winner: Zoho Books

As cloud-based software, QuickBooks Online works with nearly any device so long as you have an internet connection and are using one of the following browsers:

  • Google Chrome
  • Mozilla Firefox
  • Internet Explorer 10+
  • Safari 6.1+

Similarly, Zoho Books is also cloud-based and compatible with nearly any device and works with these browsers:

  • Internet Explorer
  • Mozilla Firefox
  • Safari
  • Google Chrome
  • Opera

Both also offer mobile apps available for Apple products and Androids, although Zoho takes it up a level by offering mobile apps for Microsoft phones and Kindles as well. This, along with supporting Opera, is why Zoho Books wins in terms of hardware and software requirements.

Users & Permissions

Winner: QuickBooks Online

Zoho Books’ largest plan offers 9 users plus one accountant; QuickBooks Online’s largest plan offers 5 users plus two accountants. Additional users can be added to each plan.

Zoho Books offers very limited users permissions, making QuickBooks Online the clear winner here. With QuickBooks Online you can set multiple user roles and control each user’s access to certain features. Because of this important distinction, QBO wins this category despite offering few users.

Ease Of Use

Winner: Zoho Books

Both Zoho Books and QuickBooks Online are relatively easy to use. Both have modern UIs that are well-organized and easy to learn. However, each software suffers from the occasional navigational difficulty. That being said, Zoho Books has far better customer support and fewer bugs and glitches making it easier to learn and navigate.

Mobile Apps

Winner: Zoho Books

Both Zoho Books and QuickBooks Online offer strong mobile apps. Zoho Books receives 4.8/5 stars on iTunes and 4.5/5 stars on the Google Play Store. QuickBooks Online receives 4.7/5 stars on iTunes and 4.3/5 stars on the Google Play Store.

While both company’s apps are fairly close in ratings, Zoho Books’ mobile apps are full-featured and compatible with Microsoft phones and Kindles in addition to iPhone and Androids, making it the winner here.

Customer Service & Support

Winner: Zoho Books

Zoho Books has the better customer support by far. In my experience, representatives respond quickly to emails and I have hardly ever been put on hold when calling their support team. Representatives are generally kind and informative. Additionally, Zoho Books has a well-developed knowledge base with tons of articles, videos, guides, and more — and it all can be accessed directly from within the software to boot.

In the past, QuickBooks Online had notoriously poor customer support and extremely long phone wait times. While the company has been remedying this over the last year or so, QBO still has a ways to go if they want to top Zoho Books in the customer service arena.

Negative Reviews & Complaints

Winner: QuickBooks Online

This is one category QuickBooks Online should not want to win. QuickBooks Online has received many complaints. Most complaints revolve around poor customer service experiences, bugs, limited apps, and even a few unauthorized charges.

Zoho Books, on the other hand, has received far fewer customer complaints (granted Zoho Books has far fewer customer reviews in general, but the ratio of negative to positive reviews is smaller). The complaints that do exist revolve around the lack of payroll and limited integrations.

Positive Reviews & Testimonials

Winner: Zoho Books

While QuickBooks Online has a higher number of positive reviews overall, Zoho Books has a higher percentage of positive reviews, which is why it wins this category. Zoho Books receives 4.5/5 stars on Capterra and 4.6/5 stars on G2Crowd. Users love that the software is easy to use, affordable, and updated frequently. They also like the mobile apps.

Integrations

Winner: QuickBooks Online

There’s no question here. QuickBooks Online offers around 280 integrations as opposed to Zoho Books’ 33.

Security

Winner: Tie

Both Zoho Books and QuickBooks Online implement strong security measures. Each uses data encryption, redundancy, routing testing, and physical security measures to protect their data centers.

To learn more about cloud security read our posts Is My Accounting Safe In The Cloud? and What Is SSL? A First Look At Online Security.

And The Winner Is…

Zoho Books VS QuickBooks Online

Zoho Books definitely gives QBO a run for its money. However, there a few areas where QuickBooks Online beats out its opponent. QuickBooks Online offers more integrations, more advanced features, better tax support, and payroll. The lack of payroll, or any payroll integrations, seriously rules Zoho Books as an option for many businesses, solidifying QuickBooks Online’s place as the winner.

QuickBooks Online is ideal for small to medium-sized businesses in need of strong accounting, so much so that we’ve named it the Best Accounting Software for Small Businesses. The software offers strong accounting, decent mobile apps, ample integrations, and beautiful invoicing. QuickBooks Online also has a unique new lending feature, QuickBooks Capital, so you can potentially have your small business accounting and financing all in one place.

However, just because we named QuickBooks Online the winner, doesn’t mean that Zoho Books isn’t the better choice for your business. Zoho Books is ideal for small businesses looking for an easy-to-use accounting software with strong mobile apps and plenty of features. It’s also a great choice if you need international invoicing. If you don’t require payroll or budgeting, you could save a chunk of change by going with Zoho Books instead of QuickBooks — plus, you’ll get much better customer support.

Or, maybe after reading this post, neither option seems right for you. Don’t worry! Our comprehensive accounting software reviews can help you find the perfect bookkeeping solution for your business. If you need extra help deciding, read our Complete Guide To Choose Online Accounting Software.

Check out our full Zoho Books and QuickBooks Online reviews for more information. Be sure to take advantage of the free trials each software provides and feel free to reach out with any questions you might have.

The post Zoho Books VS QuickBooks Online appeared first on Merchant Maverick.

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SBA Microloans: A Comprehensive Guide To Terms, Rates, And Eligibility

As a small business owner, you know the importance of financing in order to expand your business — particularly if you’re running a startup, and you know that you need funding in order to start your next project. While there are many options available to provide you with the capital you need to start a new business or grow an existing business, one of the best options is a loan through the Small Business Administration.

For smaller capital requirements, SBA Microloans offer many benefits that make them more desirable than other loan products on the market. Is an SBA Microloan the right choice for your business? Read on to find out more.

What Is The SBA Microloan Program?

Before getting into the details of the SBA Microloan programs, let’s first understand what a microloan is. Microloans are small amounts of money loaned to businesses at low interest rates.

The SBA Microloan program is designed to offer small loans of up to $50,000 to small businesses and startups. A microloan can be the ideal choice for a business that doesn’t require a lot of capital and wants a low-interest loan with great repayment terms. Home-based businesses and even self-employed individuals can obtain microloans through the SBA lending program.

How Do SBA Microloans Work?

While many SBA loan products are available through traditional financial outlets (banks, private lenders, and credit unions), the Microloan program is different in that funds are provided through non-profit or community-based organizations.

A non-profit organization can receive funding of up to $750,000 from the SBA during its first year in the Microloan program. After the first year, up to $1,250,000 can be borrowed annually, with a cap of $5 million at any one time. The nonprofit organization then acts as an intermediary, providing loans to small business owners.

Small business owners and startups can apply for up to $50,000 through a nonprofit’s loan program. The minimum microloan amount available is $500. On average, businesses obtain loans of $13,000 to $14,000 through the Microloan program.

One thing that is different about the SBA Microloan program when compared to other SBA funding programs is that rates and terms are not set by the SBA. The $50,000 borrowing cap is set by the Small Business Administration, but further details — including terms, rates, and eligibility requirements — are set by the intermediary organization.

Funds from the SBA Microloan program can only be used for certain purposes. This includes the purchase of inventory, supplies, fixtures, furniture, or equipment, or for use as working capital or startup capital.

SBA Microloan Eligibility

The SBA Microloan program is designed for established small businesses and for-profit startups. It is a great option for small businesses that need only a small amount of funding but still want to enjoy the benefits of an SBA loan product, including competitive interest rates and longer payment terms.

Because the loan amounts are small, the Microloan program is great for home-based businesses and the self-employed. Nonprofit day care centers are also eligible to receive these loans. In fact, all small businesses and startups are eligible to apply for an SBA Microloan. However, companies that need larger funding amounts (up to $5 million) or would like to purchase a business or refinance debt should consider other SBA options, such as the 7(a) loan. All businesses receiving an SBA Microloan should have a minimum of two years of industry experience and must be able to show sufficient income for repayment of the loan.

Since the terms of micro-funding for small businesses are set by the lender, SBA Microloan credit requirements vary. On average, though, an applicant should have a credit score of at least 640 when applying for one of these loans. Some lenders may be more flexible in determining the creditworthiness of applicants, so it’s important for interested business owners to speak with their local nonprofit lender to find out more specific details.

Any derogatory entries on a credit report will need to be explained to potential lenders. In some cases, a co-signer with sufficient credit and income to repay the loan may be required. It’s also important to note that there must be no bankruptcies or foreclosures listed on a credit report from the last one to two years, in most cases.

Some lenders will provide SBA Microloan bad-credit funding for those with less-than-desirable credit scores. Personal credit scores as low as 575 have been approved on occasion when all other requirements for SBA Microloans are met. To know where you stand in terms of credit, you can easily obtain your free credit score online. From there, you can determine what you need to do in order to clean up your credit and raise your score, if necessary.

Most lenders also require some form of collateral, but again, this is at the discretion of the lender. A lien on personal property, such as a vehicle or house, may be required. A personal guarantee from all owners with a 20% stake in the business is typically required as a condition of obtaining one of these loans.

In addition to having a good credit score, collateral, and a personal guarantee, applicants for SBA Microloans should be able to show a positive financial outlook for the future of their business. This is why it is important to have a solid business plan prepared to show to potential lenders, especially for startups.

Cleaning up your credit score, creating a professional and solid business plan, and being prepared to offer up collateral or a personal guarantee are all ways that you can boost your odds for receiving an SBA Microloans.

SBA Microloan Terms & Rates

Unlike with other SBA loan products, Microloan terms and rates vary from lender to lender. This is because the SBA does not set these standards. However, there are some averages across lenders to give you a better idea of what you should expect when it comes to repaying your loan.

The interest rates for SBA Microloans vary from 6.5% to 13%, making them competitive with other types of business loan products. The repayment terms are set by the lender, so this value varies, but the maximum repayment term for any SBA Microloan is 6 years. As mentioned earlier, the maximum loan amount that can be obtained through this program is $50,000, although the average loan given is less than half this amount.

A down payment is not always necessary for obtaining an SBA Microloan. For startup micro-funding, an average of 20% of the project will be required as a down payment. Business acquisitions may require 10% down payment. However, in many cases, 100% financing is available with no required down payment from the borrower, assuming that all other conditions are met.

How To Apply For SBA Microloans

Before getting into the specifics of the application process, it’s important to remember that the entire process for receiving funding through the SBA Microloan program generally takes between 30 to 90 days. To avoid potential delays, it’s important to gather all the information you’ll need to submit ahead of time.

To begin the application process, the first step is to find an SBA microloan intermediary that lends in your area.  To do this, you can get referrals from any financial institution where you have an established relationship. You can also use the Small Business Administration’s Lender Match tool, which can help you find lenders for Microloans and other SBA loan products.

Some nonprofit intermediaries will allow you to apply online, but most will require you to appear in person or speak to a lending specialist over the phone. While the lender you work with will provide you with the details of their requirements and all documents needed for processing, there are a few items you can prepare in advance, including:

  • Minimum of two years of business and personal income tax returns
  • Balance sheets
  • Profit and loss statements
  • Personal financial statements
  • Personal credit report
  • Business plan and financial projections
  • Business licenses and permits

Please note that this is not a comprehensive list and because there are no set requirements by the SBA for microloans, necessary documentation will vary by lender.

Once you have gathered all the information required by the lender, your application will be complete. As previously noted, the entire application and funding process generally takes between 30 to 90 days, although some loans may be processed, approved and funded within two to three weeks depending on the lender. Some lenders may require classes, workshops, or other training as part of the application process. Others offer these programs but may not require them to disperse funding. This training offers great opportunities for startups and small businesses and should be taken advantage of whenever possible.

Is An SBA Microloan The Right Choice For Me?

While an SBA Microloan offers a great funding opportunity for many small businesses and startups, it may not always be the right choice for your particular situation. If you’re looking for more than $50,000 in funding or need faster funding, an SBA Microloan may not be the best choice for you.

Some other options to consider include:

Business Credit Cards

If you want more flexibility with your funds, a business credit card may be a more attractive option. Business credit cards can be spent any way you want without the limitations you may encounter with an SBA Microloans. Business credit cards are quickly obtainable and can be put into use immediately, making them an ideal choice for those who need funding fast. Many credit cards offer high credit limits close to or even exceeding the $50,000 limit of SBA Microloans.

It’s important if you go this route to shop around for the best rates. Some business credit cards offer 0% introductory APRs followed by interest rates that are similar to SBA Microloan rates. Some cards also offer extra benefits to the borrower—think airline miles, cash bonuses, and other perks just for using the card.

Equipment Financing

If you need to purchase equipment for your business, equipment financing may be an option. Equipment financing typically doesn’t have as many stringent requirements as obtaining an SBA loan, and funding can be acquired much faster. This can be a great option for someone who needs equipment immediately or who may not have the credit score or other requirements needed for the SBA Microloan program.

If you decide to get financing for equipment, you have two options: equipment loans and equipment leases. Equipment loans typically require a higher payment, but when the load is paid off, you own the equipment free and clear. With leases, monthly payments may be lower, but you’re only borrowing the equipment. If what you are purchasing is something that is needed for your business at all times, a loan may be the better option.

Peer-To-Peer Lending

If you have a decent credit score and you want to receive funding fast, peer-to-peer lending is an option you can explore. The typical credit score requirement for this type of loan is 670, but will vary by lender. With this option, you can receive comparable interest rates and payment terms to SBA Microloans without having to wait weeks for the approval and release of funding. There are no limitations on how peer-to-peer loan funds are used.

Invoice Factoring

If you have unpaid invoices that are affecting your cash flow, invoice factoring is something you may consider. With invoice factoring, you work with a lender who pays money on your unpaid invoices in exchange for a fee, which varies by lender. This immediately gives you the capital you need for any business expense without having to wait for payment on outstanding invoices. There are typically very few requirements for this type of loan, making it an appealing option for anyone with fair or poor credit. Usually, a business must be in operation for at least three months to qualify for this type of loan. Once the money is received, it can be used for any purpose with no limitations.

If you’re still unsure of which business loan is right for you, do some research online before signing on the dotted line. You can compare the different types of small business loans to find out which offer the terms, rates, and other details that will best benefit you and your small business.

Final Thoughts on SBA Microloans

SBA Microloans can provide startups and small businesses with the capital they need to further grow their business. The low-interest rates and repayment terms up to 6 years make it an appealing funding option for the business that doesn’t want to take on piles of debt. With the right paperwork, a decent credit score, and a solid business plan in place, many businesses won’t have any problem obtaining competitive financing through this program.

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SBA Loan Requirements: What You Need To Know About Qualifying For SBA Loans

There are many reasons why a business owner might be in need of the extra support provided by an SBA (small business administration) loan. Whether you’re looking to expand your business across your state, you need equipment to begin operations, or you’re facing an unexpected setback, it’s always nice to have access to additional cash to keep moving ahead. SBA loans are backed by the government—and that means that the lenders who participate in the program have a guarantee on some portion of the loan. This guarantee by the Small Business Administration represents less risk for the lender and that means greater accessibility to business funds for you. With any type of SBA financing, you will enjoy lower rates and longer repayment terms with a variety of loan sizes.

There are several financing options available to entrepreneurs and small business owners via special programs backed by the Small Business Association. Below you’ll find out what to expect when it comes to SBA loan requirements, as well as an overview of each type of SBA loan.

Types Of SBA Loans

SBA 7(a)

The SBA 7(a) loan is the most common SBA loan. It can be used for nearly any business-related expense and is an excellent way to get the working capital you need to buy property, boost inventory, or even purchase another business. The versatile SBA 7(a) loan covers the broad needs most business owners face, including refinancing business debt. The maximum loan amount for the SBA 7(a) is $5 million. The SBA guarantees a whopping 75% – 85% of a traditional 7(a) loan, making it one of the most desirable SBA loan types. Loan terms vary depending on your loan, but generally, you’ll have up to 25 years for real estate loans and 10 years for all other loan types. Loan approval can take several weeks, so if you’re in a hurry, you’re better off with an SBA Express Loan.

SBA Express Loan

Just like a 7(a), an SBA Express loan can give you the capital you need — but with fewer hoops to jump through. Boasting a fraction of the turnaround time you’d get with a typical SBA 7(a) loan, an SBA express loan can be approved in less than a week. If time is of the essence, this may be the right choice for you. The structure of the loan, and the purposes for which the loan can be used, for are nearly the same for 7(a) and Express Loan products. However, SBA Express Loans max out at $350,000 — and are only backed by the Small Business Administration by 50%. Due to the speed and accessibility of Express Loans, and the higher risk involved for the loan issuer, interest rates are higher. SBA 7(a) loans have better rates but more stringent qualifications, so if you have an investment deal that’s too good to pass up or you just need working capital sooner rather than later, the SBA Express is a good option to have.

CAPLines

A CAPLine loan is an SBA loan that can supplement your revenue cycle with revolving lines of credit. Use this loan for a builders line of credit, contract financing, general working capital needs, and/or any seasonal needs you face. According to SBA regional District Director, Terri Dennison, “Firms with significant fluctuations in cash flow over the course of the business cycle can benefit as well.” For a business with sales that ebb and flow through the year, this type of loan can keep things running smoothly.

504 Certified Development Company Loan Program

For the business owner who has trouble obtaining traditional mortgage financing, the 504 Certified Development Company Loan Program offers a beacon of hope. You can still enjoy a competitive, fixed-rate mortgage financing option with the help of an SBA lender and a certified development company. A 504 Loan allows you to not only buy the land you need but also renovate real estate and purchase needed heavy equipment for your operations. You can get a loan amount of up to 40% of the total project cost, with a cap of $5 to $5.5 million, depending on your business type.

SBA Microlenders

If you’re almost at your financial goal and don’t require a larger loan, an SBA Microlender can help! Business owners who need $500 to $50,000 can get funds to purchase equipment, furniture, supplies, and working capital. Not only that, you can enjoy free business consulting from the SBA microlenders to help you focus on the right goals for financial success.

Disaster Loan Assistance

Regardless of business size, the SBA provides loans to those who require immediate access to funds after a disaster. Whether you need funds to repair or replace damaged items, for machinery or equipment, inventory, business assets, or other types of business expenses, business owners can get low-interest loans to meet these pressing needs when disaster strikes.

Basic SBA Loan Requirements

For the most part, you’ll find that SBA loan requirements are going to be similar across the spectrum of loan products. There are certain umbrella guidelines that cover most SBA loans — for example, most SBA loan products will require businesses to be for-profit, and meet certain size requirements (to be considered a “small business”). Below are some notes to keep in mind when it comes to navigating the different types of SBA loan options.

SBA 7(a) Loan Requirements

The SBA 7(a) may be the most popular of all the SBA loans, but that isn’t to say it’s the fastest or easiest—especially if your business is a startup. However, if you understand that the process can take several weeks and have a good working knowledge of the steps involved, you can avoid some setbacks (and frustrations) along the way.

The first thing to know about SBA 7(a) loan requirements is that you must demonstrate good to excellent credit (at least 600, in general), adequate collateral, and solid cash flow right off the bat. All of this can be accomplished by providing cash flow statements, balance sheets, and income statements with your application. Detailed accounting practices and a solid business plan are your best assets here. If numbers simply aren’t your strong point, get support from a consultant or accountant to help you build a stronger case for your business.

You’ll need to also do the work and prove you have the business management experience over the long haul—after all, this is a long-term business loan. The business plan you present will need to have detailed analysis and projections for the next several years. Utilizing charts and graphs to create a visual case of success will be to your advantage.

SBA 7(a) loans of less than $25,000 do not require collateral. However, to obtain a bigger loan, putting up business collateral will definitely strengthen your case. If you don’t have any collateral, there are other ways to show you are a good candidate, like providing a solid business plan and having excellent credit, as outlined above.

A down payment is an SBA 7(a) loan requirement in certain cases. If you are going to use the loan to buy another business, equipment, or real estate, you’ll need to put at least 10-20% down to qualify.

SBA Express Loan Requirements

The requirements for an SBA Express Loan are significantly less strict than they are for a traditional SBA 7(a) loan, though the tradeoff is higher rates. The things that are going to ultimately matter the most when qualifying for an Express loan are your cash flow (or projected cash flow) as well as your prowess in managing your business. Also up for consideration are things like your credit score and how long you’ve been in business. In general, you’ll need a credit score of 680 or higher to qualify for an Express Loan.

As far as the documents you’ll need to fill out in order to qualify for your loan, you’ll work through a checklist of required forms, including a Borrower Information Form, a Statement of Personal History, and an Agreement of Compliance (if more than $10,000 in loan funds are being used for construction).

CAPLine Loan Requirements

As outlined above, the low rates of CAPLines can help you with your cyclical financing needs. Some of the minimum requirements of an SBA CapLine Loan requirements are below:

  • You must have a credit score of 660
  • You’ll have to pledge future or current accounts receivable, contracts, inventories, purchase orders, or more as collateral for your loan
  • Your business must be at least one year old
  • You need to be able to identify an accurate seasonal pattern of revenue

As with the other types of SBA loans, keeping organized records of all of your finances and monitoring your credit score will support your efforts in qualifying for a CAPLine loan from the SBA.

504 Loan Requirements

If you are looking to finance land or heavy equipment, and are considering the SBA 504 loan, here are some additional requirements you need to be aware of when it comes to getting approved:

  • As the owner, 51% of your building must be occupied by your business
  • Your credit score will need to be over 660
  • Your business’s net worth must be less than $15 million
  • You must be able to pay 10% or more of the project costs for the down payment

Additionally, you’ll need to show your ability to repay the loan, on time, from your operating cash flow. This means that you need to have your business plan and projected cash flow all clearly mapped out for your lender.

It’s also a good idea to check your credit score before getting the process started to address any inconsistencies that may ding your credit. Make sure all of your accounts are current and that you haven’t defaulted on any loans.

SBA Microloan Loan Requirements

As you would to qualify for any SBA loan, you’ll need to share a solid business plan and have a clear map to fiscal victory. The requirements for a microloan, however, differ in a few key ways to requirements for other SBA loans. Because SBA Microloans cap out at much smaller amounts, the maximum repayment time you’ll have is around six years, significantly less time than you’ll have with other types of loans—keep that in mind when you’re considering your options. Additionally, the loan may be on a smaller scale, but you’ll still need to show you have good credit. Collateral is also generally required.

The good news is that both established companies and startups are eligible for SBA Microloans, and though you need to show you have good personal credit, a limited credit history will not be a roadblock for you. If your credit is less than stellar, having a cosigner will strengthen your qualifications.

Disaster Loan Requirements

To receive a disaster loan that’s backed by the SBA, a business must have physical or economic damage that’s caused by an identified disaster. This means that your area will have to be officially designated a declared disaster area by the SBA. If your business is in recovery mode and you need assistance in rebuilding, you’ll also need to meet minimum requirements.

Like you would with any other SBA loans, you’ll need to have good credit. Though there is no specific hard-and-fast score requirement here, you must show you have an acceptable history free of bankruptcy, tax liens, and foreclosures. If you have suffered economic or physical loss from the SBA-identified event, additional qualifications will also be guided by the actual damage to your business.

Ready To Get An SBA Loan?

If you meet the qualifications outlined above, you can begin the application process on the SBA website. That said, we recommend applying to SmartBiz, an online lender that can expedite the SBA loan process, which is traditionally slow.

If you don’t qualify for an SBA loan, or just want to compare business loans, visit this handy comparison chart to learn about more options available to you. The takeaway here is that you have options—use the above resources to move ahead with your business goals this upcoming year.

Before you get started, make sure to check out the current SBA loan rates.

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SBA 7(a) Loans: Your Complete Guide To Terms, Rates, And Eligibility

The SBA 7(a) Loan Program provides some of the most popular and most elementary loans a small business owner can procure. 7(a) loans are backed by the Small Business Administration in amounts up to 85%, mitigating much of the risk a lender would typically take on and thereby giving many small businesses an opportunity to receive funds for which they would traditionally be ineligible. With nine types of 7(a) loans to choose from, most small businesses will qualify for at least one.

Businesses in need of long-term loans, favorable rates, and flexibility should consider applying for an SBA 7(a) loan. Here’s everything you need to know about the SBA 7(a) Loan Program:

What Is An SBA 7(a) Loan?

An SBA 7(a) Loan is a finance option offered to small businesses, backed (or guaranteed) by the Small Business Administration to reduce the risk involved on the part of the lender. 7(a) products are intended for businesses that may be unable to procure other, more traditional, loans. The loan guarantee provided by the SBA gives business owners a chance to fund their small business needs.

These small business loans can be used for business start-ups, cash flow for an existing business, and countless other purposes. So whether you’re just starting out or keeping your existing business running, there’s probably a 7(a) loan that can help.

Types Of SBA 7(a) Loans

As the SBA program’s primary form for providing funding for small businesses, there are many variations of the 7(a) loan. The following are the nine types of SBA 7(a) Loans, as well as their individual borrowing amounts, turnaround times, SBA guarantees, and term lengths:

7(a) Standard Loan

This is the most common and straightforward of the available 7(a) options. It’s the standard option for the majority of businesses.

  • Turnaround: 5—10 days
  • Loan Amount: Up to $5 million
  • Maximum SBA Guarantee: 75—85%

7(a) Small Loan

The 7(a) Small Loan is similar to the Standard Loan, but used for smaller loans amounts.

  • Turnaround: 5—10 days
  • Loan Amount: Up to $350,000
  • Maximum SBA Guarantee: 85% for loans smaller than $150,000, 75% for greater

7(a) Express Loan

If you have a more urgent need for capital, this 7(a) loan provides an accelerated response time from the SBA.

  • Turnaround: Within 36 hours
  • Loan Amount: Less than $350,000
  • Maximum SBA Guarantee: 50%

7(a) CAPLines Loan

Allows borrowers to procure funds for short-term loans or cyclical needs, including:

  • Seasonal: Intended for borrowers that need financing during a
    seasonal increase in accounts receivable, inventory, or labor costs.
  • Contract: Intended for financing labor and material cost for assignable
    contracts.
  • Builder: Intended for small general contractors and builders. Financing
    available for those working on a project, which serves as collateral.
  • Working: Intended for businesses unable to qualify for long-term credit. (Asset-based financing.)

Export Working Capital

For businesses that need cash flow to support export sales.

  • Turnaround: 5—10 days
  • Loan Amount: Up to $5 million

Export Express

Financing offered for exporters that require loans to operate.

  • Turnaround: SBA will respond to application within 24 hours.
  • Loan Amount: Up to $500,000

International Trade

For growing businesses with long-term financing needs. Intended for businesses that have foreign competition. Can be used for fixed assets, construction, real estate equipment, and working capital for exports.

  • Turnaround: 5—10 days
  • Loan Amount: Up to $5 million
  • Maximum SBA Guarantee: 90%

Preferred Lender

Allows SBA lenders more autonomy to process, close, service, and liquidate loans.

Veterans Advantage

Loans specifically for establishments that are 51% owned by veterans. Offers lower rates.

SBA 7(a) Loan Pros & Cons

Cheaper alternatives to Shopify

There are, of course, advantages and disadvantages to taking out a 7(a) loan. For some borrowers, the positives outweigh any negatives. See if the advantages are worth the process for your business:

Pros

Borrowers that procure 7(a) loans often enjoy more flexibility, personalized guidance, and lower down payments. Loan interest rates for 7(a) vary, depending on the loan maturity and amount loaned, but are usually much lower than their traditional commercial counterparts. 7(a) loans rates typically vary from 2.25%–4.75%.

As for fees, the SBA prohibits financial institutions from tacking on certain unnecessary fees, such as fees for services, add-on interest, fees for legal services, commissions, bonuses, and broker fees. With a 7(a) loan, you can receive financing for projects (sometimes without collateral), avoid balloon payments, and cover soft costs. You can use a 7(a) loan for your business’s versatile needs and keep them for longer terms.

Cons

Although the list of “pros” is quite long, there are a few disadvantages to receiving a 7(a) loan. You must meet the SBA size guidelines to qualify for a loan, which vary depending on what type of business you own. Basically, your business must qualify as “small.” There is no 7(a) funding available for mid-sized businesses that do not meet the size guidelines.

The application process can also be long and detailed, requiring extensive documentation. 7(a) loans require personal guarantees from owners who have an interest of 20 percent or more in the business entity.

If you’re still interested in the process, it’s time to start working. Since the application can be time-consuming and response times from lenders can vary, the sooner you start, the better.

What Is Needed To Qualify For An SBA 7(a) Loan?

There are a few SBA 7(a) loan requirements that determine the suitability of a potential borrower. While not all of these qualifiers are necessary for all loans, they will instill confidence in potential lenders and increase your likelihood of receiving funds.

Most lenders will require a business plan to show that you have specific financial goals and are a reliable borrower. For this same reason, you will need to provide an exact plan of how you intend to use potential funds, as well as financial projections.

You will need also need a good credit history. The SBA will use your credit score to evaluate risk and determine interest rates. Don’t worry if your history isn’t outstanding; the SBA does help guarantee some loans that you may not qualify for otherwise. If you want to check your score, you can use one of Merchant Maverick’s preferred free credit score services to do so. In general, to obtain an SBA loan, you’ll need a credit score of 660 or higher.

Some SBA 7(a) loans may require you to put up collateral such as property, inventory, or even your personal home or car. Industry experience is also preferred by many lenders. SBA lenders like to know that you have personal experience and knowledge in your industry.

While not all the above qualifications are necessary for every type of 7(a) loan, meeting these guidelines will increase your credibility as a borrower and increase the likelihood that you will receive a guaranteed loan.

SBA 7(a) Loan Terms: Rates, Fees, and Collateral Requirements

Rates, fees, and collateral for the 7(a) loan program vary depending on the lender and type of loan. You can check out our SBA Loan Calculator if you want to more fully understand the rates and fees of your specific loan. To gather specific information on collateral requirements, speak with any potential lenders.

Current SBA 7(a) Loan Rates

We keep track of current SBA loan rates here. This page is regularly updated with current interest rates for most SBA 7(a) business loans and other important information about SBA financing.

SBA 7(a) Loan Fees

The SBA prohibits partner lenders from charging fees for services, add-on interest, fees for legal services, commissions, bonuses, and broker fees. However, the SBA does allow lenders to charge reasonable and necessary fees that vary depending on the loan type, amount, etc.

The SBA also collects loan guarantee fees from borrowers. These fees are due within 90 days of loan approval and can be financed with the proceeds of the loan received. For example, the following are approximate SBA up-front guarantee fees for a 7(a) Standard Loan with loan terms less than twelve months:

  • Up to $125,000: No Fee
  • $125,001 to $150,000: 2.0%
  • $150,001 to $700,000: 3.0%

These fees, however, are much lower for a 7(a) Veterans Loan, also for terms of less than twelve months:

  • Up to $125,000: No Fee
  • $125,001 to $350,000: 0.125% of the gty amt.
  • $350,001 to $5 M: 0.25%: of the gty amt.

These amounts are indicative of the vast differences in fees depending on the type of loan, amount, length, and lender. When matched with potential lenders, you can discuss rates and fees to find out which loan is best for your business.

SBA 7(a) Loan Collateral Requirements

Depending on your lender, you may be asked to provide collateral. This ensures that the lender has a second resource for repayment.

Collateral can include commercial real estate, inventory, machinery, equipment, accounts receivable, or personal assets of the business owner. When applying for an SBA 7(a) loan, everything your business owns will be considered collateral. Any assets purchased with financing will be considered “primary” collateral.

What To Expect From the Application Process

So, how do SBA 7(a) loans work? The process can be lengthy, but is mostly straightforward. First, you must fill out an online form describing your business’s needs. The SBA will then match you with lenders that can help. From there, you can speak with lenders to find the right fit and formally apply for their specific loan.

What Documents are Needed for an SBA Loan?

Necessary documents may vary depending on what your needs are. It’s a good idea to go through the SBA Lender Match site and follow their instructions to get matched.

Having these documents available when applying for a 7(a) loan will make you more credible in the eyes of potential lenders:

  • Borrower Information Form
  • Statement of Personal History
  • Personal Financial Statement
  • Business Financial Statements:
    • Profit and Loss Statement: Current within 180 days of application
    • Projected Financial Statements: One-year projection of income and finances
  • Ownership and Affiliations
  • Business Certificate/License
  • Loan Application History
  • Income Tax Returns
  • Résumé
  • Business Overview and History
  • Business Lease

Final Thoughts

7(a) loans can be great options for small businesses that need versatility and longevity, but they aren’t always the cure-all for every business’s capital needs. If you meet the qualifications outlined above, you can begin the application process on the SBA website. That said, we recommend applying to SmartBiz, an online lender that can expedite the SBA loan process, which is traditionally slow. Before you get started, make sure to check out the current SBA loan rates.

If you don’t qualify for an SBA loan, or just want to compare business loans, visit this handy comparison chart to learn about more choices available to you. Receiving a small business loan is a tremendous responsibility, but can also be a necessary step toward success. Consider what’s right for your individual business and happy borrowing!

Still wondering whether a small business loan is right for you? Read our article “Can I Afford a Small Business Loan?”

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What’s The Best Chase Ink Business Credit Card? Compare Cards Here!

Chase ink business credit card comparison

Chase’s lineup of Ink Business credit cards is well-regarded in the business credit card industry and by reviewers. After having done the math and the research, we here at Merchant Maverick concur with this assessment. However, that doesn’t answer the question you may be asking: Which Chase business credit card should I get?

We thought we’d explore this question so that you know which of Chase’s small business offerings suits your particular goals. Our Chase Ink business credit card comparison will cover four cards. Let’s take a look at the Chase Ink Business CashSM, the Chase Ink Business UnlimitedSM, and the Chase Ink Business PreferredSM.

Chase Ink Business CashSM

  • Annual Fee: $0
  • Bonus Offer: $500 cash back when you spend at least $3,000 within 3 months of opening your account
  • APR: 14.99% – 20.99%, Variable
  • Introductory APR: 0% APR for the first 12 months
  • Foreign Transaction Fee: 3%
  • Rewards:
    • 5% cash back on the first $25,000 spent in combined purchases at office supply stores and on internet, cable, and phone purchases each year
    • 2% cash back on the first $25,000 spent in combined purchases at gas stations and restaurants each year
    • 1% cash back on all other purchases

The main selling point of the Chase Ink Business CashSM credit card is the 5% cash back earning potential — it’s one of the few business cards available to offer such a high cash back rate. You stand to earn 5% cash back on the first $25,000 spent on the purchase categories listed above each year — a potential $1,250 value. Max out the 2% cash back tier, and you’ll be sitting pretty with $1,750 cash back each year. You can continue to earn cash back on your purchases in these categories after spending $25,000 in a year, but at a 1% rate. It’s a great deal for the business owner whose spending is concentrated in these high-earning categories, but if your spending on said categories is significantly above this $25,000 limit, you might want to consider a card offering unlimited cash back.

The Chase Ink Business CashSM has no annual fee. Combine that with the $500 cash back you stand to earn if you spend $3K or more within 3 months — a bar most businesses will clear –and you’ll be rewarded nicely for your card use right off the bat.

When you go to redeem your rewards, you’ll find that your cash back rewards are technically counted as points. 5% cash back is counted as five points per $1 spent, 2% back is two points per $1, etc. Your points will never expire so long as your account is open, and you can redeem your points not only for cash back, but for rewards like gift cards and travel. You can also transfer your points over to other cards with Chase Ultimate Rewards, which could then be transferred over to one of 13 different airline travel partners.

Additional benefits of the Ink Cash card include:

  • Fraud protection
  • Zero liability protection
  • Purchase protection
  • Extended warranty
  • Travel and emergency assistance services
  • Auto rental collision damage waiver

Read Our Full Chase Ink Business Cash Review

Apply For Chase Ink Business Cash 

Chase Ink Business UnlimitedSM

  • Annual Fee: $0
  • Bonus Offer: $500 cash back after you spend $3,000 on purchases in the first 3 months
  • APR: 14.99%–20.99% variable APR
  • Introductory Rate: 0% APR on purchases and balance transfers in the first 12 months
  • Foreign Transaction Fee: 3%
  • Rewards: 
    • Earn unlimited 1.5% Cash Back rewards on all purchases

chase ink business unlimitedLaunched in May 2018, the Chase Ink Business Unlimited℠ card is Chase’s newest business credit card. Like the Ink Cash, the Ink Business Unlimited is a cash back business card. However, with the Unlimited card, there are no purchase categories, and you earn 1.5% cash back on all purchases with no limits on the amount of cash back you can earn. As this card will always draw comparisons with the similar Ink Cash card, let’s take a closer look at the similarities and differences between the two cards.

Chase Ink Business Cash vs Ink Business Unlimited

If you want a Chase Ink business credit card with no annual fee, you’ll have to go with one of these two cards, as the Chase Ink Business PreferredSM carries a $95 annual fee. To compare these two cards, let’s take note of where the Ink Cash and the Ink Business Unlimited don’t differ at all. Neither card carries an annual fee. Both cards offer the same welcome offer ($500 cash back after you spend $3,000 on purchases within 3 months), the same variable APR, the same 12-month introductory 0% APR period, the same 3% foreign transaction fee, and the same package of travel/shopping benefits.

The difference between the two cards lies entirely in their respective cash back reward structures. The Ink Cash offers 5% and 2% cash back spending categories along with 1% cash back on all other purchases, but the amount of annual spending in the 5% and 2% categories that will earn you this extra cash back is limited to $25,000 each. By contrast, the Ink Business Unlimited offers 1.5% cash back on all purchases with no limits — very simple indeed. If your business spending is diffuse and variable, the Business Unlimited is clearly a better deal, while the business owner whose spending is concentrated in the Ink Cash’s high earning categories will obviously find the Ink Cash to be a better deal. This is true only up to a point, however. Due to the fact that only your first $25,000 in annual purchases in these high-earning categories earns you cash back at these enhanced rates, the Ink Business Unlimited may earn you more cash back even if your spending is concentrated in the Ink Cash’s bonus categories. If you spend over $83,333.33 annually on the Ink Cash’s 5% cash back categories, you’ll actually earn more cash back by charging these same purchases to an Ink Business Unlimited card. Likewise, spend over $33,333.33 annually on the Ink Cash’s 2% cash back categories, and the Ink Business Unlimited starts earning you more cash back.

Essentially, the choice between the Ink Cash and the Ink Business Unlimited comes down to what your business expenses are and the total volume of said business expenses. Spend a light-to-moderate amount on the Ink Cash’s high-earning categories, and the Ink Cash is a better deal. Spend a large amount on these categories (or on other things entirely), and the Ink Business Unlimited will earn you more cash back.

Read Our Full Chase Ink Business Unlimited Review

Apply For Chase Ink Business Unlimited

Chase Ink Business PreferredSM

  • Annual Fee: $95
  • Bonus Offer: 80,000 points (if you spend at least $5,000 within the first three months of opening your account)
  • APR: 17.74% – 22.74%, Variable
  • Introductory Rate: None
  • Foreign Transaction Fee: None
  • Rewards:
    • 3 points per $1 on the first $150,000 spent in combined purchases on travel, shipping purchases, internet/cable/phone services, and advertising purchases made with social media and search engines each account anniversary year
    • 1 point per $1 on all other purchases
    • Points are worth 25% more if redeemed for travel via Chase Ultimate Rewards

The Chase Ink Business PreferredSM card was introduced by Chase in 2016 as a replacement for the now-discontinued Ink Business PlusSM. Being Chase’s flagship business card, the Ink Business Preferred offers an eye-watering rewards package: 3 points for every dollar spent on the first $150,000 in purchases in the categories listed above, and 1 point per $1 spent on everything else. Plus, your points will be worth 25% more when you redeem them for travel via Chase Ultimate Rewards. Let’s compare this card with the first two Chase Ink cards I’ve discussed.

Chase Business Ink Preferred vs Chase Ink Cash vs Chase Ink Unlimited

You’ll notice some significant differences between the Ink Business Preferred and the other two Ink business cards mentioned in this article. Obviously, the reward structure is different, as is the fact that your rewards will be worth 25% more when redeemed for travel. There’s also a more valuable bonus offer (the 80,000 points you’ll earn if you spend over $5K within 3 months are worth $800 or more, depending on what you use them for), and the 3% foreign transaction fee borne by Ink Cash and Ink Unlimited is absent in the Ink Business Preferred. Furthermore, along with all the same travel and shopping benefits of the Cash and Unlimited cards, you’ll get cell phone protection of up to $600 per claim, trip cancellation insurance, and trip delay coverage.

All these extra benefits aren’t free, however. The Ink Business Preferred carries a $95 annual fee. Its variable APR is a bit higher than that of the Ink Cash and Ink Unlimited, and unlike those two cards, the Ink Preferred has no introductory 0% APR period. But if you spend heavily on business travel, the Chase Ink Business PreferredSM should provide you the most value of all the Ink Business cards. And if you already have the Ink Cash or Ink Unlimited, pairing the Ink Preferred with either of them will get you extra points, an 80,000-point signup bonus, cell phone protection, and additional travel benefits you won’t get with Chase’s other two Ink Business cards. If you’re a frequent business traveler, such a pairing may work in your favor. Just bear in mind Chase’s infamous 5/24 rule: if you have opened five or more credit cards (from any bank) within the last 24 months, you won’t be approved for a new Chase card.

Read Our Full Chase Ink Business Preferred Review

Apply For Chase Ink Business Preferred 

An Alternative To Chase’s Ink Business Cards

capital one spark cash selectIf you’re looking for a good cash back business card but aren’t convinced by Chase’s Ink Business offerings, the Capital One Spark® Cash for Business card is a flat-rate cash back business card that lets you earn an unlimited 2% cash back — even more than the Chase Ink Business Unlimited℠. It’s a simple yet attractive advantage, made somewhat less appealing by the $95 annual fee (a fee the Ink Cash and Ink Unlimited do not carry) and the fact that you can’t transfer your rewards to travel rewards programs like you can with Chase’s business offerings. Still, Spark Cash for Business is an attractive proposition for the business owner who can’t be bothered with keeping track of spending categories and wants the highest universal cash back earning rate possible.

Check out our Spark® Cash for Business review to learn more.

Final Thoughts

So, which is the best Chase credit card for business? That depends on the amount and nature of your business spending. I hope the information given here has given you some guidance as to what options make the most sense for your particular business needs.

To compare high-ranking business credit cards in more detail, check out our credit card comparison chart or read the Best Business Credit Cards for 2018.

The post What’s The Best Chase Ink Business Credit Card? Compare Cards Here! appeared first on Merchant Maverick.

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