Zoho Books VS Wave

ZohoBooks-vs-Wave

Zoho Books VS Wave

Accounting

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Features

Pricing

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Tie

Hardware & Software Requirements

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Users & Permissions

Ease of Use

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Mobile Apps

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Customer Service & Support

Tie

Negative Reviews & Complaints

Tie

Tie

Positive Reviews & Testimonials

Tie

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Integrations

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Security

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Final Verdict

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When you think of accounting software, you usually think of big names like Xero or QuickBooks. But what about the programs that are designed specifically with the small business owner in mind? In this post, we’re going to put two of the top small business accounting software programs face to face: Zoho Books and Wave.

Redesigned in 2014, Zoho Books is a scalable, full-featured accounting software that even gives QuickBooks Online a run for its money. The software has only improved over the years. It features beautiful invoicing, strong mobile apps, excellent customer support, and decent integrations. It also gives users the unique ability to send invoices in over 10 different languages.

Wave is free accounting software that has only gotten better as time goes on. The software has grown to support over 3.5 million users and offers a robust feature set with unique additions like lending, scheduling recurring invoices by timezone, and a brand-new light ecommerce tool. The software also offers professional bookkeeping services and supports personal and business accounting.

But which service comes out on top? And more importantly, which is right for your business?

Read on to find out.

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: Wave

Both Zoho Books and Wave offer strong accounting features. Each software uses double-entry accounting and offers both cash-basis and accrual accounting. Both support accounting reports, a customizable chart of accounts, journal entries, bank reconciliation, and fixed asset management.

The two are almost neck and neck in this area, although Wave sets itself apart by having recently added an additional bookkeeping service called Wave+ where users can purchase additional accounting help from professional bookkeepers. Wave also has built-in personal accounting tools.

Features

Winner: Zoho Books

Zoho Books Features Wave

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Invoicing

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Multiple Invoice Languages

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Estimates

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Expense Tracking

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Bank Reconciliation

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Chart Of Accounts

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Fixed Asset Management

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Contact Management

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Accounts Payable

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Time Tracking

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Project Management

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Inventory

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Reports

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eCommerce Checkouts

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Tracking Categories

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Multi-Currency Support

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Sales Tax

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Tax Support

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Importing & Exporting

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Lending

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Zoho Books and Wave have a lot of similar features. Both offer expense tracking, invoicing, contact management, and more. The difference is the depth and functionality of these features.

While Wave has a strong feature set and unique additions like a lightweight ecommerce tool and lending, Zoho Books’ features are far more advanced. Zoho Books offers some of the best invoicing on the market with 15 different templates and international invoicing. The software also offers project management (which Wave lacks entirely), better inventory, better time tracking, and better reporting, making it the clear winner here.

Pricing

Winner: Wave

Zoho Books offers three scalable pricing plans ranging from $9 – $29/month. Wave is completely free. The only additional costs are payroll, payment processing, and Wave+.

When it comes to pricing, you can’t beat free. And unlike most free software, Wave doesn’t put artificial limits on features like invoicing and estimates. You get complete access to fully-functioning features for $0/month. Another point in favor of Wave is that the software actually offers payroll. The service may cost extra, but in contrast, Zoho Books doesn’t have any payroll support or payroll integrations.

Hardware & Software Requirements

Winner: Zoho Books

As cloud-based software, both Zoho Books and Wave work with nearly any device so long as you have an internet connection.

Users & Permissions

Winner: Zoho Books

Depending on your plan, Zoho Books supports between 1 and 10 users, although you can purchase additional users for an extra cost. The software offers very basic user permissions. Wave is designed for the small business owner, meaning there are no additional users. You can technically invite “collaborators” who can have “view-only” or “view & edit” access to your Wave account, but the features they are able to access are limited, making Zoho Books the winner here.

Ease Of Use

Winner: Wave

Both Wave and Zoho Books are easy to use. They each have a modern UI that is well-organized, and setup is quick. However, because of Zoho Books’ sheer number of features, the software is a bit harder to navigate and get used to. Wave, on the other hand, is easy enough for anyone to use, no matter what their accounting background (or lack thereof) looks like.

Mobile Apps

Winner: Zoho Books

It’s no question that Zoho Books is the winner here. Zoho Books has always been known for strong, fully-featured mobile apps. Their Android and iPhone apps receive high ratings across the board, and the company supports smartwatch, Microsoft, and Kindle apps as well.

Wave’s mobile apps could stand improvement. Right now, there are two separate apps, one for invoices and one for receipts. Existing Wave users complain that they want one, full-featured app.

Customer Service & Support

Winner: Zoho Books

Zoho Books offers the most excellent customer support by far. Zoho Books’ phone support has hardly any wait times, and in my experience, representatives are friendly and helpful. The company also has an expansive help center, email, live chat, videos, and more.

While Wave does offer good resources like a well-developed help center and strong blog, you can only contact Wave support by email (unless you purchase payroll or credit card processing, in which case you get phone and chat support). Wave’s email response times often take over a day.

Negative Reviews & Complaints

Winner: Tie

Both Zoho Books and Wave receive mostly positive customer reviews from satisfied customers. They have a similar ratio of negative to positive reviews, resulting in a tie for this section.

The few complaints Zoho Books users have are about the lack of payroll and limited integrations. Complaints about Wave revolve around poor mobile apps, limited integrations, and limited features.

Positive Reviews & Testimonials

Winner: Tie

Both Zoho Books and Wave have many satisfied customers and high customer ratings. Zoho Books receives 4.5/5 stars on Capterra and 4.6/5 stars on G2Crowd, while Wave receives 4.4/5 stars on G2Crowd and 9/10 stars on TrustRadius.

Zoho Books users appreciate the software’s ease of use, strong mobile apps, affordable price plans, and constant updates. Wave users praise the software for its ease of use, free price, personal accounting, and feature selection.

Integrations

Winner: Tie

Zoho Books offers 33 integrations while Wave only has 3 integrations. However, both Zoho Books users and Wave users complain about a lack of integrations. Each software’s saving grace is that they both connect with Zapier, an integration that connects them to 1000+ other third-party apps.

Security

Winner: Zoho Books

Both Zoho Books and Wave offer strong security. Each uses 256-bit SSL encryption, regular data backups, and 24/7 data monitoring. We gave Zoho Books the victory in this section because Zoho Books is far more forthcoming about their security information so users can be 100% confident that their data is protected.

And The Winner Is…

Zoho Books VS Wave

Wave is powerful software that puts up quite the fight, but it just doesn’t have the features and capabilities of Zoho Books — at least not yet. A more robust feature set, strong mobile apps, more integrations, forthright security, and excellent customer service give Zoho Books the advantage.

Zoho Books is ideal for small to medium businesses in need of strong accounting that want the capabilities of QuickBooks Online without having to pay the price. Zoho Books is an affordable QBO alternative with a robust feature set and some of the best invoicing on the market, which is why we’ve named it the Best Accounting Software for Invoicing. Zoho Books’ invoicing features make it ideal for business in need of international invoicing. The only drawback is the lack of payroll, which could be a deal-breaker for some businesses.

If your business does need payroll or if you’re looking for free accounting software, Wave might be the better choice for your business. Wave is ideal for small business owners looking for easy bookkeeping software to manage their businesses with. There’s a reason we’ve named it the Best Free Accounting Software. Wave has an impressive features set — particularly for a free app — and offers a few key additions that Zoho Books lacks(payroll, lending, and the brand new eCommerce checkouts tool). It also has a strong Etsy integration, making it ideal for Etsy sellers.

Maybe after reading about Zoho Books and Wave, neither option seems like the perfect fit for your business. Don’t worry! Our comprehensive accounting reviews can help you find the best software 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 Wave reviews for more information. Take advantage of Zoho Books’ free trial or start a free account with Wave to get a feel for each software, and feel free to reach out with any questions you may have.

The post Zoho Books VS Wave appeared first on Merchant Maverick.

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GoDaddy WordPress Hosting Review: Pros & Cons of Using GoDaddy

GoDaddy WordPress Hosting Review_ Pros & Cons of Using GoDaddy

GoDaddy is one of the world’s largest “web services” companies. Although they were founded as a domain registrar, they provide a whole range of services from web hosting to website builders accounting to email to digital storage to online security and much more.

See GoDaddy’s Current Plans & Pricing…

Over the years, you’ve probably seen GoDaddy’s Super Bowl commercials, GoDaddy girls all around the Internet, and most recently their “Helping Small Business” commercials. They have brand recognition if nothing else.

With the popularity of using WordPress for setting up websites, GoDaddy has made a big product push for their “WordPress Hosting” product.

Like any product, there will be tradeoffs, advantages and disadvantages – depending on your particular goals, preferences, and resources. However, this product not only competes with other competitors but also with GoDaddy’s own regular web hosting product.

So. Here are GoDaddy’s WordPress Hosting pros, cons, how it compares to “regular” web hosting, and next steps.

Disclosure – I receive customer referral fees from companies mentioned on this website. All data and opinions are based on my experience as either a paying customer or a consultant to a paying customer.

GoDaddy Managed WordPress Hosting vs. Web or “Regular” Hosting

Here’s the thing. The entire industry move to “WordPress Hosting” services is kind of a weird, confusing, maddening mess. I’ve written an entire post on Web Hosting vs. WordPress Hosting, Explained – but here’s the short version.

  1. WordPress is simply software that can run on any Linux server with PHP (aka “regular shared hosting).
  2. Again – WordPress can (and does) run just fine on web hosting.
  3. WordPress does use some server resources at an above average rate and others at a lower rate.
  4. WordPress also has very predictable problems & needs. It needs to be regularly updated. Some plugins create temporary security vulnerabilities.
  5. So – hosting companies saw an opportunity to create whole clusters of servers with only WordPress websites.
  6. Since they were all together, they could also provide dedicated support and some add-on services at a cost-effective rate.
  7. Hence, “WordPress Hosting” plans were created – which added a further opportunity for marketers & pricing specialists.

For some companies, WordPress Hosting plans became a way to increase revenue and decrease costs with little value-added. For other companies, WordPress Hosting plans became a way to create a huge value-add to differentiate from competitors and pass the cost savings to customers. For other companies – it was a mix. And in the end, it’s been thoroughly confusing for everyone.

But – the key takeaway is to identify your own needs & goals rather than going right for a company’s “WordPress Hosting” plan.

These pros & cons of GoDaddy WordPress Hosting will look at the tradeoffs between both GoDaddy’s web hosting plans and direct competitors in the WordPress Hosting space.

7 Pros of GoDaddy WordPress Hosting

Here are the 7 big advantages that GoDaddy has with WordPress Hosting.

Sticker Pricing

Their plans start at $8.99/mo at renewal – and go up to $19.99/mo at renewal. Additionally, GoDaddy is always running sales & promotions, so you’re likely able to lock-in even cheaper pricing for over a year. Sometimes, you can even lock-in a $1/per month pricing.

Current pricing & promotion.

Even though GoDaddy’s specialty is not hosting (they started as a domain registrar) – they are using their capital and market presence to really push down on prices.

If you go with them, you won’t have to worry if you are paying too much. Their WordPress Hosting prices are somewhat fudged by total value pricing (see disadvantages) but if you are looking for the cheapest option to get started – you won’t find anyone cheaper in the short-term.

Key WordPress Hosting Features

One key pricing difference between regular web hosting plans and WordPress hosting plans is the pricing per visits vs pricing per features.

In other words, instead of looking at memory, databases, etc – companies simply promise to serve an estimated number of visitors.

GoDaddy Limitations

In other words – you are paying for results rather than features.

Like any subscription, you will be technically overpaying for the features you get…but that also assumes that you know how to use the features in the first place. There are tons of ways to speed up & make WordPress more efficient – but, there’s also a lot of value in letting someone else just do it for you.

For example, I once managed 10,000 visitors in a single day on my shared HostGator server with some heavy caching and lean plugin usage. I also routinely took this site past 50,000 monthly visitors on a regular shared InMotion Hosting server. I saved a ton of money using regular web hosting and adding a simple caching plugin like WP Super Cache or WP Fastest Cache…but I also like doing that kind of thing.

On the flip side, I have a client who cares exactly 0% about WordPress – but likes the platform and just wants to publish his content. He pays $$$ not just for WordPress Hosting but Managed WordPress Hosting at WP Engine – which charges a pretty penny.

Additionally, GoDaddy provides SFTP and staging areas on their upper plans. They also provide WordPress specific support. It’s nothing amazing (which I’ll cover in the disadvantages) – but they take care of the key features.

Backend & Usability

One of the *the* biggest hurdles for new website owners is the learning curve of a new setup. Running your own website can be daunting – and dealing with settings, drop-downs, and jargon only adds to the stress of actually running your website.

Backend design, usability, and “onboarding” help a ton with this problem. GoDaddy has made serious improvements in this area over the past 10 years. Even with a sprawling product line-up, they still make it pretty straightforward to shop, purchase and get on with your project.

Their WordPress Hosting product does away with some WordPress installation headaches on web hosting and provides a good setup to get on with your project.

The simplicity is a big advantage compared to their web hosting product and their design is a big advantage compared to their technically-oriented competitors.

Product Integration

Full disclosure, I’m a fan of buying your domain and email services separately from web hosting (ie, I use NameCheap for long-term domains & Google Apps for email hosting). It provides diversification – and allows you to choose providers that focus on a specific product.

But, having one company manage your domain name, email, and hosting can make things much more convenient. Several of my friends & clients do this – and it works well for them. Their domains are cheap and their email is straightforward. They have professional online security. GoDaddy even offers bookkeeping & accounting services nowadays.

GoDaddy offers the full gamut of services and ties them all in together well. There’s no pointing your DNS records or futzing with SMTP settings. It’s all there and it all works together. Big advantage to GoDaddy.

Scale & Resources

Like any large hosting company, they have issues with security. They represent a huge target to takedown…especially when political controversy erupts.

But – GoDaddy has the scale and resources to preemptively tackle security problems that smaller hosts simply can’t work with. This feature has to do with their huge scale (they have plenty of technology directed at thwarting spam and hackers), but also with GoDaddy’s restrictive policies (which will be a Con) but for now, it also keeps out spam and the attacks.

For example, when GoDaddy needed to beef up their online security product, they simply went and bought Sucuri – the go-to the web security company.

And scale has advantages too. When GoDaddy says that they can “increase your resources to deal with additional load” – yeah, they can actually do that. When a mass hack or DDoS attack happens – they actually have resources to throw at the problem.

For example, one of the largest exclusively Managed WordPress Hosting is WP Engine. They have 429 employees. They’ve been growing rapidly. GoDaddy has 6,000 employees and 17+ million customers. That can be a bad thing…but on the Internet, it can be a good thing.

Phone Support & Improved Down-Time

Some internet veterans will scoff at this (GoDaddy used to be absolutely notorious for support) but recently GoDaddy has greatly improved their customer service since the mid-2000s. They have improved even more so under their new CEO, and the new direction they set out in July of 2013.

And more importantly for many customers – they offer 24/7 phone support, which is not common among hosting companies – even those famous for customer service.

It’s not world-class, but for a huge corporate entity with super-discounted hosting… good support is a Pro in my book.

And they fulfill the *basic* duty of every web host… 99.9% uptime.

Brand Recognition & Stability

Yes. This is an advantage no matter what Internet hipsters say. Sometimes buying a big brand is an advantage even when a small upstart might be “better.” Big brands stick around and are stable. In an environment like the Internet where companies launch and fizzle daily, there’s an advantage to going with a company that has been around since the early days of the consumer Internet.

7 Cons of GoDaddy WordPress Hosting

Here are the 7 big disadvantages that GoDaddy has with WordPress Hosting.

Total Value Pricing

 

GoDaddy WP Pricing

Like I said about the advantages of pricing, WordPress Hosting plans are a little different in that you are basically paying for a recurring service rather than anything tangible. That might be what you are looking for but if you are trying to get full value for your money, WordPress Hosting and GoDaddy’s WordPress Hosting, in particular, is a very poor value.

On all of GoDaddy’s WordPress Hosting plans, you are severely limited on the number of websites and the storage space you’re getting – not to mention all the other freedoms you’re losing compared to a similarly priced web hosting plan.

For example, on my similarly priced InMotion Hosting Business Hosting (ie, regular web hosting plan) – I’ve got 6 small, but decently trafficked WordPress websites plus a self-hosted RSS reader plus I use it to triple-backup a few special family videos (ie, several gigabytes right there). When priced out by dollars per storage or by dollars per website – it’s an incredible value.

And that is ditto compared with GoDaddy’s regular web hosting plans.

Additionally, even in the world of WordPress Hosting plans – GoDaddy’s plans are cheap…but a seriously poor value when you look at the features that you actually get.

For example, HostGator provides unmetered storage space and unlimited email accounts on their WordPress Hosting plans. Not technically a “WordPress feature” – but still higher feature value.

And if you look at InMotion Hosting’s WordPress Hosting plans or SiteGround’s WordPress Hosting services – you’ll see that they both provide actual WordPress Hosting features that add value beyond their standard web hosting plans. They both provide built-in NGINX (a very advanced way to speed up WordPress) and built-in SSLs. InMotion even provides a staging environment at the lowest-priced tier.

Customer Protections & Politics

Remember the whole black out the Internet back in January of 2011 because of SOPA and PIPA? And remember when that same issue has come up again and again and again?

Yeah – everyone in favor of Internet Freedom was against those bills…except GoDaddy.

They eventually became against it…but only after customers transferred thousands of domains to competitors because of it.

Most of us will never forgive GoDaddy – especially because…

EDIT: This point is still true. GoDaddy is still exhibiting behavior that indicates they do not respect privacy or ethics (recent story here). They are a big brand that many argue can do things simply because they are the big brand. They are aware of this perception – which is why they recently took preemptive action on the Daily Stormer, but they don’t have a super-consistent protocol.

Branding, Marketing & Company Culture

GoDaddy has built their brand with odd market positioning and weird “talk about me” ad campaigns.

And weird in a bad way. For example, their CEO shoots elephants. And they use blatantly sexist advertising. All this among other just bad controversies.

GoDaddy has recently sanitized their site and said that their 2017 Super Bowl commercial would not revolve around sex. Their new campaign is to be the “champion of small business.”

However, they still want to maintain their “edgy” brand. That’s all an improvement, but I’m still wary of companies who do tons of interruption-style advertising over focusing on their product.

I don’t know how this brand & positioning transfers to their company culture but I personally don’t see it as a positive in the “doing business with companies that I love” category.

Hosting Feature Limitations

As mentioned in the Total Value Pricing section – GoDaddy’s WordPress Hosting plans have surprisingly tight limits on features – even compared to direct competitors in the WordPress Hosting space.

Then again, I’ve also noted how they have hard & low limits on their web hosting compared to both big brands like Bluehost – but also to independent brands like InMotion and SiteGround.

Additionally, they are notorious for their own proprietary setup which can lead to email & hosting issues that are unique to GoDaddy. They have plenty of seemingly random caps on databases and bandwidth that you never really encounter until you really need to break those caps.

Account Lock-in & Diversification

This con relates to #1 above…but deserves its own spot.

Mainly because when you choose a web host – it’s a pretty big time commitment. You’ll be investing a lot of energy into your website – assuming that the host is doing their job.

And even though moving web hosts should be simple…there’s a lot of little things that can make it go wrong. GoDaddy isn’t famous for helping its customers leave. That’s a con.

EDIT: Yes, as of 2018…this is still true. It’s a bit easier since it is WordPress after all, but their domain transfer is needlessly interrupted with annoying upsells and obstacles. I recently did a client site redesign and scoped the project to migrate to another host. But – since my client had had email, domains and hosting there for years, the move simply wasn’t worth the hassle.

Upsells & Cross-sells

I mentioned this in my comparison of both GoDaddy’s native website builder product and their domain registration services – but wow, they are masters of upsells and cross-sells.

On one hand, it’s fine. They do own and operate a ton of complementary products. And it is convenient to keep all your services under one umbrella. But at a certain point, you’re not sure what you’re being pitched and what you’ve bought – and wow, you just want to get on with it.

With their WordPress Hosting plan – they promise “thousands” of free themes…when those are WordPress.org themes available to anyone, anywhere – but then upsell premium themes and even custom web design packages. They build in security to your WordPress website…but then pitch their upsell online security product. They promise “free SEO plugins” (which BTW, I’ve done a tutorial on here) while upselling marketing services.

It’s a bit exhausting – especially compared to other competitors.

Conclusion & Next Steps

GoDaddy’s WordPress Hosting plans are an interesting option for anyone looking to build a WordPress powered website. They offer brand-name stability, core features, and affordable pricing.

If you are looking to build a single site, want to save money, and really only care about simplicity and results, then go get GoDaddy’s current WordPress discount here.

If you are looking for a WordPress Hosting plan with better support, features, and performance, then I’d recommend InMotion’s WordPress Hosting plans here.

If you aren’t sure, then check out my Buzzfeed-esque quiz on WordPress Hosting here.

And if you are simply looking for a guide to setup & install WordPress on a regular web hosting plan, check out my step by step guide here.

GoDaddy WordPress Hosting

GoDaddy WordPress Hosting is GoDaddy's hosting product focused exclusively on WordPress websites.
GoDaddy WordPress Hosting
Date Published: 10/22/2018
GoDaddy WordPress Hosting is an affordable, brand-name option for anyone with a single site who doesn't need advanced hosting features.
3 / 5 stars

The post GoDaddy WordPress Hosting Review: Pros & Cons of Using GoDaddy appeared first on ShivarWeb.

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Small Business Loan Requirements: What You Need To Apply

We’ve all heard the old saying, “It takes money to make money.” Chances are, if you’re reading this, you’ve reached that point in your small business venture, the point where you can’t make any more money until you have some money to spend. Maybe you’re ready to expand your business or maybe you need to hire more help — but whatever it is that’s holding you back, money is what will make things happen. This is where a small business loan can really come in handy.

Applying for a small business loan can be daunting and time-consuming. However, if you go into the process knowing what to expect, applying for a loan doesn’t have to be intimidating.

In this post, we’ll explore how lenders evaluate your eligibility and discuss what documentation you need to gather so you can navigate the process like a pro and receive the funding your business needs.

How Lenders Evaluate Eligibility: The 5 C’s Of Credit

Before applying for a loan, you need to understand how lenders evaluate both you and your business to determine if you qualify for a loan. With each loan distributed, the lender is taking on a risk. To mitigate as much of that risk as possible, lenders use a system known as the 5 Cs of Credit.

The first C is character, which measures how trustworthy you are. One of the primary ways lenders evaluate your character is through your credit report and score. A lender may also set up a personal interview or contact your references in order to fully evaluate your character.

The next C stands for capacity. In other words, is your business going to be able to pay back the loan? In addition to evaluating your submitted documentation, lenders also use formulas including the debt service coverage ratio (DSCR) and debt-to-income ratio (DTI) to determine whether to lend to your business. If the lender decides to move forward, this information also helps determine the amount of the loan.

Capital, the third C, measures how much money you have invested in your business. Investing your own money in your business shows that you have “skin in the game” and demonstrates that you have something to lose if your business fails. This proves to lenders that you’re willing to do what it takes — including making your loan payments — to ensure your business succeeds.

The next C is collateral: business or personal assets used to secure your loan. If you default on your loan, the lender can seize the property and sell it to get their investment back. The more collateral there is to secure a loan, the less risk there is to the lender – and the higher your odds for approval.

Finally, lenders consider conditions. Conditions need to be favorable in order for the lender to approve your loan. The lender will evaluate interest, principal, and the overall state of the economy. Your industry and your competitors will also be a consideration. Remember, it’s all about risk. The more things that indicate that lending to you is a risk, the less likely you are to be approved.

Information & Documents Required On A Business Loan Application

With an understanding of what lenders evaluate during the loan process, you should have a better idea of whether to move forward with your loan request. If all looks favorable, you’ll need to gather some documentation before meeting with a lender or filling out an application. While requirements vary by lender, there are a few key items and documents you’ll need when applying for a small business loan.

Loan Amount

When applying for a loan, you’ll need to request a specific amount. This will require a few calculations on your part.
If there is something specific you plan to purchase with loan proceeds, shop around to get an idea of how much you’ll need to spend. For example, if you’re purchasing new equipment, talk with vendors to compare costs. If you plan to improve your business, get quotes and bids from contractors.

You also need to make sure that your business will be able to afford the loan payments for the amount you’re requesting. You can figure this out by using the same calculations used by lenders for DTI and DSCR.

Loan Purpose

The purpose of your loan may seem like a no-brainer to you, but it’s very important to your lender. Why do you need the loan? There could be a number of answers to this question, from needing new equipment to purchasing commercial real estate or acquiring a business.

Depending on the lender you choose and the type of loan you pursue, there may be some restrictions on how you use the loan proceeds. For example, some loans can’t be used to refinance old debt. You and your lender should both know how you plan to use the money so that you can apply for the loan product that best fits the needs of your business.

Personal Credit Score

Lenders use your personal credit score to qualify you for a loan. Not only will this help determine if you are approved for the loan, but it is also a factor used to calculate your interest and repayment terms.

Borrowers with a solid credit score will receive the lowest interest rates and best terms, while borrowers with credit challenges may see higher rates, less favorable terms, and a loan that has a higher overall cost.

Before you start applying for loans, it’s critical to know where you stand in terms of your personal credit. The internet has made this easier than ever, as many websites allow you to pull your personal credit report and score at no cost.

Once you’ve pulled your report, go over it carefully to make sure that there are no erroneous items that are dragging down your score. If this is the case, these items can be disputed with the major credit bureaus and will be corrected or removed if they are truly incorrect.

If your score isn’t where it needs to be to get approved for the loan you’re seeking, consider why. Do you carry high balances on your credit cards? Have you made any late payments, or do you have any accounts in collections? If you have a low credit score, identify any problem areas and work to resolve these issues before applying for a loan. There are also a number of small business loan options available for borrowers with low credit scores, a short time in business, or low revenues.

You should also be aware that your score isn’t all that the lender considers. For some loans (such as Small Business Administration and bank loans), current bankruptcies, defaults on past loans, and other negative items could immediately disqualify you.

Business Start Date

When applying for a loan, you’ll need to provide the lender with the date your business started. This is important because most lenders like to work with established businesses — that is, businesses that have been in operations for more than 2 years.

Startups and new businesses often have more difficulties qualifying for traditional loans. Not only will you be more limited in the types of loans you qualify for, but when you do find a loan, you’ll need additional documentation, which we’ll explore a little later in this post.

Monthly Revenue

In order to receive a loan, you have to be able to repay the loan. You will need to prove your monthly revenue to show the lender that you have sufficient cash flow to make your loan payment.

Multiple financial documents showing your monthly revenue will be required by many lenders, including monthly bank statements as well as profit and loss statements. Additional documentation may be needed depending on the type of loan you’re requesting, the total amount of the loan, and the policies of the lender.

Annual Revenue

In addition to proving your monthly revenues, you’ll need to give an overall view of your business’ annual revenue. In order to prove this to a lender, you’ll need to gather various documents, including your federal tax returns. Most lenders will require business and personal tax returns from borrowers for at least the last two years.

Other documents that may be required by your lender include balance sheets and year-to-date profit and loss statements.

Bank Statements

An important part of qualifying borrowers for loans is knowing that they have the means to repay the loan. One of the easiest ways lenders can do this is through your bank statements.

Bank statements provide lenders with the financial information they need to see if you can afford a business loan. Bank statements give an overall picture of the financial situation of your business. In addition to being able to see your balance and how much money goes through your account, bank statements also give the lender a view of how you manage your finances. Lenders can look at your bank statements to see your average balance and how you handle your income to determine if you will be a responsible borrower.

At a minimum, expect to provide your lender with at least 3 months’ worth of business bank statements. However, some lenders (such as Small Business Administration intermediaries and banks) may require bank statements from the last 6 months or longer.

Business Debt Schedule

For many loans, you will need to provide a business debt schedule. This breaks down what you pay each month for all of the current debt obligations of your business. This information is used to determine if adding a new loan payment makes sense for the lender and your business.

Proof Of Ownership

When applying for a loan, you’ll need to prove to the lender that you are the owner of the company. This is why most lenders will require a business license.

Depending on your industry and state laws, you may also be required to have business permits. If so, have these ready to present to your lender.

Other Business Loan Requirements By Loan Type

The information and documentation you’ll need when applying for a business loan will vary based on a number of factors, including the loan type. While most loans have the same basic requirements, such as bank statements and your federal tax ID, additional documentation and information may be required for certain types of loans.

Small Business Administration (SBA) Loan Requirements

The Small Business Administration has put loan programs into place that benefit small business owners. These loans are not issued directly by the SBA. Instead, loans are provided through intermediary lenders. The SBA guarantees a portion of the loans, allowing these intermediaries to provide low-cost loans to business owners.

Because of the favorable terms and rates of SBA loans, the application process is lengthy with a lot of requirements. Applicants will need to provide all of the income and credit documentation previously discussed. Applicants will also need to meet the SBA’s definition of a small business. This limits the number of employees, annual revenue, and business net worth needed to qualify for SBA loan programs.

For the SBA 504/CDC loan, which provides funding for the improvements or purchase of commercial real estate or land, the intermediary lender may require proof that the real estate will be at least 51% owner-occupied. A letter of intent from the lender that’s paying 50% of the project costs, along with an explanation of why the lender will not fully fund the project, is also required. For business expansions or improvements, quotes and bids from vendors and contractors will need to be submitted.

For the SBA Veterans Advantage program, all applicants must prove that they are a veteran, service member, or qualifying spouse in order to receive this loan with reduced fees.

Additional information may be needed based on the type of SBA loan you select. Learn more about the requirements for SBA loans.

Bank & Credit Union Business Loan Requirements

Bank and credit union loans for businesses are typically the most difficult to receive. These loans are usually reserved for only low-risk borrowers with solid credit scores. The application and underwriting process can take weeks or longer, and there are many documentation requirements.

Bank statements, business and personal tax returns, personal financial information and credit scores, balance sheets, revenue statements, and a business plan are all typically needed when applying for a bank or credit union loan. Depending on the loan amount, collateral will also need to be put up in order to qualify.

Startup & New Business Loan Requirements

Startups and new businesses may not have many of the documents required to qualify for a loan, including several years’ worth of tax returns and income statements. In order to receive a loan, lenders will require businesses that have been in operations for less than 2 years to supply additional documentation.

The resumes for all owners of the business will need to be submitted with the loan application. This is because new business and startup owners will need to prove that they have industry experience since they do not yet have an established reputation.

New businesses and startups will not have documentation proving their success. To show that the business will be able to pay off its debts, a detailed business plan and financial projections should be provided to the lender during the application process.

Business Line Of Credit Requirements

Business lines of credit often come with fewer requirements than other types of loans. Some alternative lenders require little more than personal and business contact information, a federal tax ID number, a copy of your driver’s license, and a few bank statements.

Lines of credit from banks and credit unions may have more requirements, but nothing outside of the ordinary. Bank statements, balance sheets, profit and loss statements, and tax returns are standard for these types of loans.

Equipment Loan Requirements

An equipment loan is a type of loan that is used to finance equipment, including vehicles and machinery. Equipment loans usually have fewer requirements and are easier to qualify for than other types of loans.

Requirements vary by lender, but the most basic requirements include business and personal information, bank statements from the last 2 months, and an invoice for the equipment being financed. In some cases, additional information including tax returns, profit and loss statements, and balance sheets may be required.

Invoice Factoring Requirements

Invoice factoring is a type of loan that is used to resolve cash flow issues due to unpaid invoices. Requirements for these loans are much less strict than for other loans. In some cases, lenders are more focused on the unpaid invoices (and the likelihood of those invoices being paid) than credit scores or the financials of your business.

To qualify, you must own a B2B company. The invoices must also be of an amount large enough to cover any fees required by the lender. A soft credit inquiry is also required, but again, some lenders aren’t as concerned with credit scores for invoice financing. Lenders will also consider the number of invoices you have, as well as evaluate the likelihood that customers will pay the invoices.

Final Thoughts

business loan vs personal loan

Applying for a business loan doesn’t have to be complicated or intimidating. While the process can be long, the best way to expedite the process is being prepared in advance. Know how much you need and why you need it. Understand what your business can afford and have the documentation and information needed to back up this up. With careful preparation, you’ll soon be on your way to successfully receiving a loan to boost your business.

The post Small Business Loan Requirements: What You Need To Apply appeared first on Merchant Maverick.

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Best Business Credit Card Signup Bonus Offers

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

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

Best Signup Bonus For Rewards Points: Chase Ink Business Preferred

Chase Ink Business Preferred



Apply Now 

Annual Fee:


$95

 

Purchase APR:


17.74% – 22.74%, Variable

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

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

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

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

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

Capital One Spark Cash For Business


capital one spark cash select
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Annual Fee:


$95 ($0 the first year)

 

Purchase APR:


18.74%, Variable

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

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

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

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

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

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

Chase Ink Business Unlimited


chase ink business unlimited
Apply Now 

Annual Fee:


$0

 

Purchase APR:


14.99% – 20.99%, Variable

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

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

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

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

Best Signup Bonuses For Travel

Best Signup Bonus For General Travel: Capital One Spark Miles For Business

Capital One Spark Miles For Business


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Annual Fee:


$95 ($0 the first year)

 

Purchase APR:


18.74%, Variable

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

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

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

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

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

Delta Reserve Credit Card for Business from American Express



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Annual Fee:


$450

 

Purchase APR:


17.74% – 26.74%, Variable

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

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

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

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

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

Hilton Honors American Express Business Card



Compare

Annual Fee:


$95

 

Purchase APR:


17.74% – 26.74%, Variable

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

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

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

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

Comparison of the Best Business Credit Card Signup Bonus Offers

Card Name Best For Bonus Offer Requirements Next Steps

Chase Ink Business Preferred

Reward points

80,000 points

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

Apply Now

Capital One Spark Cash For Business

Cash back

$500 cash back

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

Compare

Chase Ink Business Unlimited

No annual fee

$500 cash back

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

Apply Now

Capital One Spark Miles For Business

General travel rewards

50,000 miles

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

Compare

Barclays AAdvantage Aviator Business Mastercard

Airline points

60,000 points

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

Compare

Hilton Honors American Express Business Card

Hotel rewards

125,000 points

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

Compare

The post Best Business Credit Card Signup Bonus Offers appeared first on Merchant Maverick.

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SBA Loan Default: What Happens When You Default And What You Can Do About It

A small business owner may be passionate and committed to their ideas, but things don’t always go according to plan. If you lack funds or are worried about making payments for your SBA loan, it may be time to start learning about delinquency and defaulting on loans.

From Delinquent To Default

A loan will go into default when a borrower repeatedly fails to meet the legal conditions of the loan. Before you default on a loan, chances are the loan will first be deemed delinquent. Although they aren’t exactly the same problem, both loan delinquency and default can do serious damage to your credit score. A loan becomes delinquent as soon as you have missed or are late making a payment, even if only by one day. If your loan becomes delinquent, your lender may charge you late fees or increase your interest rate. If you don’t take care of a delinquent loan quickly, it can easily lead to a default.

When Is My SBA Loan In Default?

Depending on the specifics of your loan agreement, a delinquent loan will fall into default status after a certain amount of time has passed and no action has been taken on the outstanding balance. Lenders will usually wait anywhere from 90–120 days before considering a delinquent loan to be in default.

Tips To Avoid Defaulting On Your Loan

Communicate With Your Lender

If you’re struggling to make payments on your loan, you should first contact your lender to discuss your position. This is always preferable to waiting until the problem worsens. You may find a better way to fix your temporary financial issues by speaking with your lender transparently, rather than waiting for the loan to default.

Create A Modified Repayment Plan

If you communicate honestly with your lender, they may be open to helping you create a more feasible payment plan or reducing the overall cost of your loan. SBA partner lenders are almost always willing to work with borrowers since they lose money when they have to chase down someone in SBA loan default. You can expect any proposed repayment plan to be largely in favor of the lender, but it will most likely be a better option than defaulting.

What Happens If You Default On An SBA Loan

Seizure Of Collateral & SBA Guarantee

If no alternative options are possible, or you have no ability to make payments, your lender may force you to default on the loan. They will then begin standard loan collection procedures, as outlined on your SBA loan agreement.

First, your lender will contact you via phone and email. You should know that FTC guidelines that restrict how often, when, and how collectors may contact you don’t apply to business loans, so any restrictions on this communication will depend on which state your business operates.

The bank will then be able to seize any collateral you put up on the loan, first business assets and then personal, per your agreement. If your business has failed and there are no remaining assets to fulfill repayment, your personal guarantee will be invoked. Alternatively, they may force you to sell your assets, or obtain a court order demanding any money in your business accounts.

If the loan is still not repaid in full, the lender will then file with the SBA for the guaranteed portion of the loan, minus any amount they were able to collect through alternative means.

Transfer To The Treasury Department

Although the loan will have been fully paid back to the lender at this point, the process is unfortunately not over. The SBA will then contact you for repayment of the funds they gave to the bank as part of your SBA loan agreement. This communication will come in the form of a 60-day demand letter.

This letter states that your case has been transferred to the Treasury Department, which will demand you either settle the debt, or provide an “offer in compromise.” The Treasury Department has the ability to garnish wages, withhold future tax refunds, or file suit against you in a civil court. They will collect the debt by any means necessary if you have not resolved by the given deadline. While it is still possible to settle with the SBA at this point, it is much more difficult.

An “offer in compromise” is a proposed payment plan (or smaller lump sum) than what is being demanded by the Treasury Department. It is only a viable option if your business has completely ceased all operations and been liquidated. This compromise will open a dialogue and allow the Treasury to determine your ability for repayment.

When creating an appeal, you will need documentation of tax returns, business and personal assets, income statements, expense reports, and more. These documents should serve as proof that you cannot repay the borrowed funds to the SBA in a reasonable time period, and show you are in need of a more lenient payment option. If your argument is convincing, the Treasury will opt to work on an offer in compromise so they can recover some of the funds lost on your case.

Final Thoughts

Above all else, remember that defaulting on an SBA loan is serious, but it is not the end of the world. Although it can be a stressful time, it is possible to recover after you’ve settled the debt. Do what you can to avoid defaulting, but if you must, just keep moving forward, and keep improving your financial health!

The post SBA Loan Default: What Happens When You Default And What You Can Do About It appeared first on Merchant Maverick.

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Long-Term Business Loans: Eligibility And How To Find The Best

You’re a business owner, and you’ve encountered a financial hurdle in the form of a large business expense. This expense could be completely unexpected, such as the sudden breakdown of equipment, or it could be planned, like a business expansion through the improvement of facilities or the purchase of commercial real estate.

No matter what it is, a big expense can be difficult to pay up front. When it’s an unexpected or emergency expense, the situation can be even worse. However, many smart business owners have found a solution for these large expenses: long-term business loans.

If spreading out the cost of a large expense over a longer period of time sounds appealing to you, this financing option may be the right choice for your business. However, you don’t want to rush to fill out an application with a lender just yet. Instead, do your research and boost your knowledge. Read on to learn more about the rates, terms, benefits, and drawbacks of long-term business loans.

How Do Long-Term Business Loans Work?

A long-term business loan is a type of loan that is paid back over a longer period of time. The lender loans the borrower a set amount of money for business expenses, such as purchasing a commercial vehicle or real estate, buying equipment, or hiring new employees.

With the help of a long-term loan, the business does not have to pay a large sum out-of-pocket. Instead, a lender will provide the needed funding, which the business will pay back in fixed amounts over several years, along with interest and fees.

What Term Lengths Can I Get With A Long-Term Loan?

The term lengths of a long-term loan vary based on a number of factors, including the amount of the loan, the policies of the lender, and how the funds will be used. In general, most long-term business loans have terms between three and 10 years. However, some long-term loans, such as those used to purchase commercial real estate, may have repayment terms of 20 years or more.

What Kind of Interest Rates Can I Expect From A Long-Term Loan?

Like other business loans, long-term loans do not come with set interest rates. Interest rates vary by lender, the creditworthiness of the borrower, and the amount of the loan. The most qualified borrowers with the best credit histories can often receive interest rates below 5% from a conventional lender like a bank. Startup businesses or businesses with a poor credit history may receive interest rates of 30% or more from alternative lenders.

Who Qualifies For Long-Term Business Loans?

project management software

Requirements to qualify for a long-term business loan vary by lender. However, there are a few general requirements set by most lenders.

Anyone applying for a long-term business loan must have a legitimate business expense that will be paid using the loan proceeds. The borrower must own at least 20% of the business. All borrowers must have a minimum credit score of 600, although higher scores are required to receive the best terms and interest rates. Most conventional lenders also require a business to be in operations for a minimum of 2 years.

There are also annual revenue requirements that must be met. For most larger loans exceeding $100,000, collateral is typically required. Even when specific collateral is not required, a personal guarantee or blanket lien will usually be part of the loan contract.

Can I Qualify For A Long-Term Business Loan If I Have Bad Credit?

Banks and other conventional lenders often have high credit score requirements, lending only to borrowers with scores in the high 600s or above.

Many lenders will also look at credit history and not just the credit score. Bankruptcies, foreclosures, or defaults on past loans can all disqualify borrowers from receiving long-term loans.

For borrowers with bad credit, alternative lenders may be an option. These lenders will approve borrowers with scores as low as 600. However, interest rates will often be much higher for these borrowers. Borrowers with scores below 600, or who want to lock in the best rates and terms, should pull their free credit report and score, work to pay off current debt, and take additional steps to boost their scores before applying for a long-term business loan.

Looking for a lender that works with bad credit?

Lender Borrowing Amount Min Credit Score Time To Funding Next Steps

$2K – $5M 550 1-2 Days Apply Now

$5K – $500K 550 1-3 Days Apply Now

$5K – $500K 500 2-5 Days Apply Now

$5K – $250K 500 2-5 Days Apply Now

Are Startups Eligible For Long-Term Loans?

Most conventional lenders want to work with businesses that have been in operations for more than two years. For startups and new businesses, getting long-term funding can be a challenge but isn’t impossible.

While new businesses may not qualify for traditional bank loans, there are other options. Small Business Administration programs, for example, provide funding opportunities for startups. Alternative lenders are also less stringent with their time in business requirements.

Applicants should be prepared to show that the business will be able to pay back the loan. Instead of providing traditional documentation (like income tax returns), business plans and future projections may be required by the lender during the application process.

When Would A Business Need A Long-Term Loan?

business line of credit loan

There are many situations where a business might need a long-term loan. In fact, just about any large business expense could be covered via a long-term loan, including:

  • Business expansion
  • Improvement or remodel of existing facilities
  • Purchase of commercial real estate
  • Business acquisition
  • Purchase of commercial vehicle or vehicles
  • Purchase of expensive equipment
  • Purchase of inventory or supplies
  • Hire new employees
  • Refinance existing debt 

The important thing to remember here is that long-term business loans can be used for just about any business purpose. However, the overall cost of the loan (including fees and interest) should always be taken into consideration. The return on investment should always outweigh the cost of the loan, and a long-term loan should only be accepted if the extra funding will help the business grow and be successful.

Pros & Cons of Long-Term Business Loans

When there’s a need for a loan, it’s easy to get blinded by the prospect of money without really thinking about the benefits and drawbacks of borrowing. Smart borrowers look at the long-term pros and cons of taking out the loan to determine if it will truly benefit the business.

Pros

  • Small Monthly Payments: Large expenses can be broken down into affordable monthly payments by taking out a long-term business loan.
  • Low Interest Rates: Borrowers with the highest credit scores can take advantage of interest rates of less than 5%, making this one of the most affordable loan options.
  • Debt Consolidation: Borrowers that use long-term loans to consolidate or pay off high-interest debt can save thousands of dollars over the course of the loan.

Cons

  • Variable Interest Rates: Some long-term loans come with variable interest rates, so be cautious. While a variable rate may help you save money when market rates fall, there is always the possibility that rates could increase, leading to a more expensive loan.
  • Overall Costs: The overall cost of a loan over its lifetime can be quite expensive, especially for any borrower without a stellar credit rating. Even for the most qualified buyers, fees and interest can really tack on extra money to the loan, so it’s important to fully understand the total cost of the loan before signing the contract.
  • Collateral Requirements: For most long-term loans, collateral is required. In some cases, the collateral will be the item being purchased with the loan proceeds, such as equipment, a vehicle, or real estate. In other instances, borrowers will need to put up business assets, personal assets, sign a personal guarantee, or agree to a blanket lien before the loan is disbursed.
  • High Credit Score Requirements: A long-term loan can be one of the most difficult loans to obtain. To get the most affordable funding, a great credit score (with no negative items on the credit history) is required. While some lenders may work with borrowers with lower scores, interest may be much higher and terms not as favorable.
  • Documentation Requirements: Because long-term loans are often for very large amounts of money, lenders want to ensure that all borrowers are able to pay back the loan. This means that there is a lot of paperwork involved in the application process. Borrowers must come prepared to take the time needed to provide the lender with all documentation to qualify for the loan.
  • Long Approval Process: Depending on the lender, getting an approval for a long-term business loan could take months — not ideal for a business that needs funding immediately.

Where To Find Long-Term Business Loans

Once a business decides to take the leap to obtain a long-term loan, the next step is to apply with a lender. Fortunately, it isn’t difficult to find a lender that specializes in long-term business loans. Most business owners turn to three main sources for their long-term financing needs: the Small Business Administration, banks and credit unions, and alternative lenders.

The Small Business Administration (SBA)

The Small Business Administration provides lending programs that are a hit with business owners. The SBA sets guidelines that keep interest rates low for borrowers, while also providing a guarantee to lenders. Because of this guarantee, SBA-approved lenders, or intermediaries, are more willing to loan money to small businesses.

The SBA offers several long-term loan programs. The most popular is the 7(a) program, which offers up to $5 million for almost any purpose with a maximum repayment term of 10 years. Falling under the 7(a) umbrella is the Community Advantage Loan that offers the same competitive rates and terms for businesses in underserved communities, while the Veterans Advantage program offers long-term loan options for military veterans and service members.

The SBA Microloans program is another option for smaller financing needs. These loans provide up to $50,000 that can be repaid over a maximum term of 6 years.

For businesses that want to improve their facilities or purchase real estate, 504 loans provide 40% of funding toward these projects. A maximum of $5 million can be distributed through this program, with repayment terms set at a maximum of 25 years.

SBA loans can be obtained from intermediary lenders including SBA-approved banks, credit unions, non-profit agencies, and Commercial Development Companies. Learn more about the rates, terms, and requirements of SBA loan programs.

Loan Program Description More

7(a) Loans

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

Review

Microloans

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

Review

CDC/504 Loans

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

Review

Disaster Loans

Loans used to rebuild or maintain business following a disaster. 

Review

Banks & Credit Unions

Banks are a very popular source for obtaining long-term business loans because of low interest rates and favorable terms. However, qualifying for these loans can be difficult. Credit scores must be very high, the application and approval process can be lengthy, and banks often have strict requirements in terms of time in business and annual revenues. Businesses that do qualify, however, will find bank loans are easily one of the most affordable loans on the market.

Credit unions also offer very competitive rates and terms, and many businesses prefer to work with these lenders because of the more personalized service they receive. Credit unions may have a bit of flexibility in terms of their requirements, but all borrowers should come to the table with a high credit score and a stable business history.

Businesses pursuing these types of loans can start with the financial institutions where they have already established accounts. Businesses that would rather shop around for the best rates and terms can check out our top banks for business loans to get started.

Alternative Lenders

Alternative lenders offer some benefits that banks, credit unions, and SBA intermediaries do not, including fast approval and funding and lower credit score requirements. However, there are also several drawbacks to working with alternative lenders. Higher interest rates are one of the biggest drawbacks. Lower maximum loan amounts are another. Learn more about the benefits and drawbacks of alternative loans.

Most alternative lenders set their maximum repayment terms at just 5 years. Depending on the amount borrowed, this could mean higher monthly payments, especially with higher interest rates that can even exceed 30% in some cases.

However, the return on investment may be enough for a business to move forward with one of these loans. These loans are best for businesses that don’t meet the qualifications of other lenders, including but not limited to credit score, time in business, or annual revenue.

Long-Term Business Loan Calculator

It is absolutely critical to understand the full cost of a long-term business loan prior to signing your loan contract. Before borrowing, use our long-term business loan calculator to get an overview of what to expect from your loan. This calculator provides estimates of monthly payments, the total amount of interest that will be paid, and the total cost of the loan. Knowing the numbers before applying for a loan is a key step for any financially-savvy business owner.

Learn more about the loan calculator and how to best use it before you apply for a long-term business loan.

Final Thoughts

A long-term business loan can be a smart and affordable way to fund large expenses. However, to get the most out of this type of financing, it’s important to do your research to find the lowest interest rates and best terms. Evaluate why you need the money and the return on investment, then find the lender that offers a loan that best fits your needs.

Looking for an online lender that provides long-term business loans? We recommend starting with the following:

Lender Borrowing Amount Term Req. Time in Business Min. Credit Score Next Steps

smartbiz logo

$30K – $350K 10 – 25 years 2 years 650 Apply Now

$2K – $5M Varies 6 months 550 Apply Now

$25K – $500K 6 months – 5 years 2 years 620 Compare

lending club logo

$5K – $300K 1 – 5 years 12 months 600 Compare

The post Long-Term Business Loans: Eligibility And How To Find The Best appeared first on Merchant Maverick.

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FreshBooks VS Wave

Freshbooks-vs-Wave

FreshBooks VS Wave

Accounting

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Features

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Pricing

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Tie

Hardware & Software Requirements

Tie

Tie

Users & Permissions

Tie

✓

Ease of Use

✓

Mobile Apps

✓

Customer Service & Support

Tie

Negative Reviews & Complaints

Tie

Tie

Positive Reviews & Testimonials

Tie

✓

Integrations

Tie

Security

Tie

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Final Verdict

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ReviewVisit

ReviewVisit

Choosing the right software for your business isn’t easy, especially when you have two great choices to pick from like FreshBooks and Wave.

FreshBooks has been helping small business owners with their invoices and expenses since 2003. The software offers strong mobile apps, excellent customer service, and good customer reviews. A recent redesign has made the software easier to use than ever.

Wave is completely free accounting software that has grown to support over 3 million users. The app offers strong accounting with ample features including project management, invoicing, and a basic ecommerce tool. Wave is also the only accounting software besides QuickBooks Online to offer lending services.

But which software is better? That’s what we’re here to tell you.

At Merchant Maverick, our goal is to help you to find the best software for your small business needs. So to make your decision easier, we’ve carefully researched and tested both products. We’ll put FreshBooks and Wave head to head by comparing features, pricing, customer experience, reputation, and more, so you don’t have to. Read on to see which software is best for your business.

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: Wave

This one’s easy. Wave wins by default because FreshBooks is not accounting software. While FreshBooks does offer a few basic bookkeeping tools, it does not use double-entry accounting. It also has no bank reconciliation features, no accounts payable, and no customizable chart of accounts.

Wave, on the other hand, uses double-entry accounting and offers both accrual and cash-basis accounting. The software offers bank reconciliation, journal entries, a detailed chart of accounts, and basic reporting,

Features

Winner: Wave 

FreshBooks Features Wave

✓

Invoicing

✓

✓

Estimates

✓

✓

Client Portal

✓

✓

Expense Tracking

✓

✘

Bank Reconciliation

✓

✓

Chart of Accounts

✓

✘

Accounts Payable

✓

✘

Inventory

✓

✓

Time Tracking

✓

✓

Project Management

✓

✓

Reports

✓

✘

Journal Entries

✓

✓

Sales Tax

✓

✓

Multi-Currency

✓

✘

Lending

✓

The two programs are pretty on par in terms of invoice template choices, time tracking, importing/exporting, and multi-currency support. However, Wave’s features are more developed than those of FreshBooks. Wave offers 5 more reports than FreshBooks, better project management, and better inventory. Wave also offers key features that FreshBooks is missing like bank reconciliation, vendor management, accounts payable, and a brand new ecommerce tool called Checkouts.

Pricing

Winner: Wave

You can’t beat free. Wave costs $0/month — no gimmicks, no tricks, no limitations. The only thing you have to pay for is adding payroll, payment processing, or bookkeeping help from a professional Wave advisor. FreshBooks costs $15/month – $50/month. FreshBooks is more expensive and offers fewer features, so businesses get a lot more bang for their buck with Wave.

Hardware & Software Requirements

Winner: Tie

As cloud-based software, both FreshBooks and Wave are compatible with nearly any device so long as you have an internet connection.

Users & Permissions

Winner: Tie

Neither FreshBooks nor Wave shines in the “additional users” department. With FreshBooks, each pricing plan only comes with one user. You can add additional users for $10/month each, but you can’t set any user permissions. Wave was designed for the small business owner, meaning it’s not possible to have additional users. You can add “collaborators” who can view or view and edit your Wave account, but there are no permissions available here either.

If you’re looking for multiple users and strong users permissions, take a look at Zoho Books, QuickBooks Online, or Xero instead.

Ease Of Use

Winner: FreshBooks

Both Wave and FreshBooks have attractive interfaces that are well-organized and easy to use. However, FreshBooks has better customer support which helps you learn to navigate the software faster.

Mobile Apps

Winner: FreshBooks

FreshBooks is well-known for its strong, full-featured mobile apps. Wave, on the other hand, has separated its apps into Receipts by Wave and Invoices by Wave. Neither app is full-featured and many users complain that they want a single, all-encompassing Wave app instead.

Customer Service & Support

Winner: FreshBooks

When it comes to customer support, FreshBooks can’t be beaten. FreshBooks offers great phone support with hardly any wait times. Representatives are generally friendly, helpful, and well-informed. In addition, FreshBooks offers a detailed help center, email support, and a comprehensive blog. Wave only offers phone support for payroll and payment processing users, leaving regular users a well-developed help center and email support. Most emails are responded to within a day, but it’s harder to get a quick response than with FreshBooks.

Negative Reviews & Complaints

Winner: Tie

Both FreshBooks and Wave are loved by customers. Each software receives mostly positive reviews, with a few negative complaints thrown in. For FreshBooks, users call for more features, better invoice templates, and true accounting. Wave users complain of limited mobile apps, lack of integrations, and occasionally slow servers.

Positive Reviews & Complaints

Winner: Tie

FreshBooks and Wave have a similar ration of positive to negative complaints. Most users seemed thrilled with both programs and each software receives high marks across popular review sites. FreshBooks users love that the software is easy to use, offers professional invoicing, and has great customer service. Wave users love the software’s features, ease of use, and, of course, its price.

Integrations

Winner: FreshBooks

FreshBooks offers 70+ integrations as opposed to Wave’s four, so if add-ons are important to your business, FreshBooks is clearly the way to go.

Security

Winner: Tie

Both FreshBooks and Wave offer strong security. They each use 256-bit SSL encryption, redundancy, and regular backups, and they each host their servers with trusted security providers.

And The Winner Is…

While FreshBooks reputation for ease of use is well-earned, the software doesn’t always live up to these high expectations. First of all, despite its advertising, FreshBooks isn’t true cloud accounting software.

Wave, on the other hand, offers true accounting software and an incredible number of features for $0/month. In addition to the basic tools you’d expect from an accounting software, features like lending and Checkouts set the software apart and allow Wave to give even QuickBooks Online a run for its money. For small businesses looking to save money, you can’t beat Wave. The software is also ideal for Etsy users and ecommerce businesses.

That being said, businesses that don’t need the accounting capabilities or a large number of features may find FreshBooks to be a good choice. The software has better mobile apps and customer service than Wave. However, FreshBooks is far more expensive than Wave and your money only goes a short way with the software.

Perhaps, after reading this, neither option seems like the right choice for you. Our comprehensive accounting reviews can help you explore all of your options so you can choose the perfect software for your business.

Check out our full FreshBooks and Wave reviews for more information.

The post FreshBooks VS Wave appeared first on Merchant Maverick.

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The Complete Guide to PayPal’s Fees, Rates, and Pricing

As a consumer mobile wallet, PayPal is darn-near ubiquitous. But with more than 17 million merchants worldwide calling PayPal their payments processor, it’s also a massive force in the merchant services industry. So if you’re looking for a quick and easy way to get set up with credit card payments, whether for a POS system or online, PayPal is probably going to be on your radar, and with good reason.

But should you choose PayPal as your payments processor, and what will it cost? The good news is that PayPal offers transparent, pay-as-you-go pricing with no monthly fees, no account termination fees, or other hidden costs. You can predict fairly well what you’ll pay with PayPal, and all payment processing fees are deducted before PayPal deposits funds in your account.

The one major drawback is that PayPal is a third-party processor, also referred to as an aggregator. That means the company essentially onboards merchants as sub-users of one, giant merchant account that includes the entirety of PayPal’s merchant base. This means that the company does minimal underwriting before approving an account. You don’t need to provide much info beyond confirming your identity to open an account. However, this does mean you face a greater amount of scrutiny after opening an account, and PayPal can terminate your account or place a hold on funds with no notice to you.

That sounds worrisome, but the reality is it only happens to a small percentage of merchants. You can also take steps to protect yourself by recognizing the common red flags that processors look for and avoiding them. Check out our article on how to avoid merchant accounts holds and terminations to learn more.

PayPal obviously isn’t the right choice for everyone. There are restrictions on the types of products merchants can offer, and it doesn’t support certain business models. High-risk businesses should look somewhere else for a merchant account. However, most merchants should be fine with a PayPal account for payment processing.

Read on for a closer look at what you can expect to pay with PayPal as your business’ credit card processor! You can also check out our PayPal and PayPal Here reviews for a focused look at the products and services.

Payment Processing Fees

The major concern for most merchants who use (or are considering using) PayPal are the payment processing costs, so we’ll start there. PayPal offers predictable, flat-rate pricing for all merchants. You don’t have to worry about higher interchange for American Express cards, or MCCs, or qualified vs non-qualified transactions. Your exact rate will depend on the type of transaction.

Merchants who use PayPal’s mPOS app, PayPal Here, or integrate with one of PayPal’s POS partners (such as Vend), will pay the following for in-person transactions:

  • 2.7% per swiped, dipped or tapped transaction
  • 3.5 + $0.15 per keyed transaction

For online transactions, including monthly subscription charges, donations, and digital invoices, PayPal charges the following:

  • 2.9% + $0.30 per online transaction

That’s it. Really. The simplicity of PayPal’s pricing is one of the biggest draws for merchants. You can predict fairly easily what your pricing will be and, because PayPal deducts its fees before depositing funds in your account, you don’t have to worry about an end-of-the-month invoice or going over a limit and incurring additional fees.

What About Alternative Payment Processing Rates?

If you’re wondering whether PayPal offers any sort of alternative payment plans, the answer is yes. Merchants with an average transaction size under $10 can opt for the micropayments plan. PayPal also offers a nonprofit discount for online transactions to qualified 501(c)(3) nonprofits.

  • Micropayments Plan: 5% + $0.05 per transaction. (Note: This rate applies to all transactions, even those above $10)
  • Nonprofit Discount (Online Only): 2.2% + $0.30 per transaction

If you integrate with one of PayPal’s partner POS systems, such as Vend or TouchBistro, you may be eligible for special discounts  (presumably volume-based) or other promotions. However, these offers aren’t clearly disclosed, just advertised on the POS software sites.

Other PayPal Fees For Payment Processing

While PayPal does charge a few extra fees relating to payment processing, they aren’t many. But these are what you might come across:

  • 1.5% Cross-Border Transaction Fee: For US merchants who accept online payments from buyers out of the country, or in-person transactions involving a card from outside the US, PayPal charges a 1.5% cross-border fee. That means, for example, that a US merchant accepting a Canadian card at a POS terminal will pay 4% of the transaction value to PayPal.
  • 2.5% Currency Conversion Fee:  If PayPal has to convert the currency before it deposits the funds in your account, you’ll pay another 2.5% conversion fee. Whether you have to pay the conversion fee depends on the customer’s bank and whether it will handle the currency conversion (usually at a cost to the customer).
  • $20 Chargeback Fee: Chargeback fees are pretty standard, and if a customer files a chargeback against you, PayPal will assess a $20 fee in addition to withdrawing the funds to cover the transaction amount.
  • Refund Fee: In the event of a refund, PayPal will refund the percentage-based fee from the transaction to you, but keep the fixed fee. For most in-person transactions that means you’ll pay nothing. However, refunds on keyed transactions mean you’ll pay $0.15. Refunds on online or invoiced transactions will cost $0.30. PayPal can be a bit confusing about how this works in its transaction summaries, but be aware that you will pay a fee for most refunded transactions, albeit a small one.
  • 1% Instant Transfer Fee: If you’d like to move your PayPal balance to a bank account immediately, you can do that — for a fee. PayPal charges merchants 1% of the transfer value, capped at $10 per transfer, but your funds will be available typically within 30 minutes (s0 long as your bank’s system isn’t incredibly slow). You’ll have to connect an eligible debit card to support instant transfers as well. However, if you prefer to have instant access to funds without paying a fee, don’t forget that PayPal offers a business debit card that’s linked to your PayPal balance, too.

Software Fees

One of the big draws for PayPal is the lack of software fees. Instead of paying a monthly fee for PayPal’s ecommerce features, you pay only the payment transaction costs (in most circumstances — but we’ll come back to this in a moment). While you’ll need to arrange for your own domain and web hosting, you can implement PayPal’s “buy” and “donate” buttons with no additional costs. You can send digital invoices for free and only pay the transaction cost when the invoice is paid.

Likewise, access to PayPal’s mPOS app, PayPal Here (read our review) is also free. However, if you opt to integrate PayPal into a POS app, invoicing software, or another platform, you’ll be responsible for those software costs. PayPal doesn’t charge anything for use of the integration.

Also, take note: PayPal doesn’t charge merchants any PCI compliance fees, account maintenance fees, customer service fees, or termination/account closure fees.

However, PayPal does offer a couple of advanced software options that come with additional costs:

  • PayPal Payments Pro: The “Pro” plan from PayPal has two advantages. One, it includes a virtual terminal to accept payments over the phone by keying in a card from a browser window.  Two, it allows merchants to keep the checkout process on their own website rather than redirecting to PayPal to complete a transaction. This does come with a couple of concerns. For one, you’re not automatically PCI compliant and you’ll need to take additional steps to handle your PCI compliance. Two, $30/month for a virtual terminal is pretty pricey considering you’ll still pay higher rates than swiped/dipped/tapped transactions. Square and Shopify both offer free virtual terminals. Also, opting for PayPal Payments Pro and the Virtual Terminal will mean a few different transaction fees to worry about:
    • 3.5% American Express Fee: Any Amex cards will process at the higher 3.5% rate if you’re on the Pro plan.
    • 3.1% + $0.30 Virtual Terminal Fee: Any transactions processed through PayPal’s Virtual Terminal process at 3.1% + $0.30, plus the international transaction fee if applicable.
  • Recurring Billing: If you’d like to sell subscriptions (software, gift boxes, etc.), PayPal does offer a set of recurring billing tools. Recurring payments are available with PayPal’s Express Checkout Option at no additional charge, but if you have PayPal Payments Pro and want advanced tools, they’ll cost you $10/month. This doesn’t apply to “Donate” buttons, which have their own option for donors to choose between a one-time or recurring donation.

  • Mass Payouts: If you need to distribute funds to multiple parties, PayPal’s Mass Payouts feature might be an appealing option. You have two options here: using PayPal’s API to handle the command, or uploading a spreadsheet. Which method you choose affects how much you pay — if you opt to upload a spreadsheet through PayPal’s website, you’ll pay 2% per transaction, capped at a maximum $1 USD, which is pretty reasonable. If you opt for the API, you’ll pay a flat fee of $0.25 USD per payment. This is a great way to distribute payments to contractors, for example, or manage marketplace payments if you use PayPal’s platform.

PayPal Hardware Costs

Unless you’re integrating PayPal with a POS system or using the free mPOS, PayPal Here, you won’t have to worry about hardware costs. But if you do, you’ll have a few options for card readers:

  • Chip & Swipe Reader: PayPal’s entry-level chip reader sells for $24.99. In addition to EMV capabilities it supports magstripe transactions, but no contactless payments. However, it does connect to phones and tablets via Bluetooth and comes with a convenient mounting clip.
  • Chip & Tap Reader: To get a credit card reader that supports magstripe, EMV, and contactless payments, you’ll need the Chip and Tap reader, which sells for $59.99. We’ve already reviewed this reader as well as the optional charging dock ($30 separately, or bundled for $79.99), with a very positive rating. Again, the Chip and Tap reader connects via Bluetooth. In addition to the charging dock, it comes with a convenient mounting clip.
  • Chip Card Reader: The Chip Card Reader was the first EMV-enabled card reader PayPal offered, and it’s still the only hardware option for merchants who want to integrate with one of PayPal’s POS partners. It sells for $99 on the PayPal site, with an optional charging dock. Given the price point, it shouldn’t surprise you to learn that this all-in-one reader connects via Bluetooth.

  • Mobile Card Reader: PayPal used to offer its entry-level swipe-only reader for free, but now it sells for $15 because PayPal, like most processors, really wants you to start accepting EMV. Use of the mobile reader comes with limitations on accounts, so if you do a decent volume of credit card transactions and don’t want to encounter any holds on your funds, you should avoid the mobile reader at all costs:

*Key-in transactions and sales over $500 in a 7-day period made with the Mobile Card Reader are subject to an automatic 30-day reserve where funds are held in your PayPal account to cover the high risk associated with these types of transactions. For increased protection from fraudulent transactions, we recommend using a chip card reader. All PayPal accounts are subject to policies that can lead to account restrictions in the form of holds, limitations, or reserves. Additional information about these policies can be found in the PayPal User Agreement.

Apart from the cardreaders, PayPal doesn’t offer any proprietary hardware. If you need a countertop register setup, you can choose from an array of tablet stands, receipt printers, and cash drawers. A few select models are confirmed to work, while many others are “unofficially supported” in that they’re likely to work in most cases. The PayPal Here app doesn’t officially support any external barcode scanners (it supports in-app scanning using the device’s camera), but Bluetooth-enabled scanners may work with your setup.

Is PayPal Actually a Good Value?

We’ve talked pretty extensively about the cost of using PayPal, but we haven’t really talked about value. Because value is so much more than just the actual, physical cost. Value encompasses convenience, customer service, and other extra factors that could easily justify paying more than the absolute lowest prices.

PayPal isn’t the absolute cheapest processor out there — especially not for businesses that handle more than $10,000/month in credit card transactions. Larger businesses may be eligible for merchant accounts with volume discounts. For low-volume businesses, PayPal often does offer more competitive pricing because of the lack of monthly fees. The flat-rate pricing, especially for in-person transactions, can mean cost savings over interchange-plus.

But the real value in PayPal is the massive consumer trust and convenience. Just about everyone recognizes the PayPal name, and with 200+ million consumer users around the world, it’s safe to say a lot of people have PayPal accounts. The barriers to entry are minimal — you don’t need a huge amount of technological experience to implement PayPal for in-person or online payments. As long as you aren’t using PayPal Payments Pro, you don’t even have to worry about PCI compliance. PayPal handles it for you, at no additional cost.

Apart from the issue of account terminations or funding holds, the only other consistent complaint about PayPal is its customer service, and reports vary. Some merchants say they’ve never had a problem with customer service. Others say that their support reps have been downright unhelpful when they’ve called in. Fortunately, PayPal offers extensive self-help resources so you should be able to deal with most technical issues without having to contact PayPal directly.

I can’t say unequivocally that PayPal is right for everyone. It’s not. But it is a really good option for a lot of merchants, especially low-volume businesses that are just starting out. For a closer look at PayPal and all its services, we recommend checking out our PayPal and PayPal Here reviews.

If you’re not sure PayPal is right for you, I suggest looking at our Square vs. PayPal article, as the two companies are fairly similar in their business models and offerings.

Thanks for reading! If you have any questions or comments, we’d love to hear from you, so please drop us a comment!

The post The Complete Guide to PayPal’s Fees, Rates, and Pricing appeared first on Merchant Maverick.

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FreshBooks VS Classic FreshBooks

 

FreshBooks review

FreshBooks VS FreshBooks Classic

Tie

Accounting

Tie

Features

✓

Pricing

✓

Tie

Hardware & Software Requirements

Tie

✓

Mobile Apps

Tie

Customer Service & Support 

Tie

Tie

Negative Reviews & Complaints

Tie

Tie

Positive Reviews & Testimonials

Tie

✓

Integrations

Tie

Security

Tie

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Final Verdict

?

Visit

Visit

FreshBooks has been a part of the accounting scene since 2003 and is one of the biggest names in the invoicing and accounting industry. In 2017, the company launched a completely new version of the software, but unlike most companies, FreshBooks didn’t simply eradicate the older version — users can choose between FreshBooks or Classic FreshBooks.

But which version is better? How does new FreshBooks stack up to the tried and true Classic FreshBooks? What’s the difference between each version, and — most importantly — which version of FreshBooks is right for you?

That’s exactly what we’re here to answer. We’ll give you the complete lowdown on both FreshBooks and Classic FreshBooks, and only one can come out on top.

At Merchant Maverick, our goal is to help you to find the best software for your small business needs. So to make your decision easier, we’ve carefully researched and tested both products. We’ll put FreshBooks and Classic head to head by comparing features, pricing, customer experience, reputation, and more, so you don’t have to. Read on to see which software is best for your business.

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

Despite the company’s name — “FreshBooks Cloud Accounting” — neither FreshBooks nor Classic FreshBooks is actually a true accounting software program. The apps don’t use double-entry accounting and don’t support key accounting features like accounts payable and bank reconciliation. The latest version of FreshBooks does offer a chart of accounts, which is a step in the right direction, but you can’t customize or edit the accounts.

My main beef with FreshBooks as a company isn’t that the apps lacks these features, but that FreshBooks advertises itself as a cloud accounting software when it’s really more of an invoicing and light bookkeeping tool.

For small business owners who aren’t looking for a full accounting package and just want a few tools to manage their income and expenses, FreshBooks or Classic FreshBooks could both be good choices.

Features

Winner: Classic FreshBooks

FreshBooks Features Classic FreshBooks

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Invoicing

✓

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Estimates

✓

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Client Portal

✓

✓

Contact Management

✓

✓

Expense Tracking

✓

✘

Inventory

✓

✓

Project Management

✓

✓

Time Tracking

✓

✓

Reports

✓

✘

Default Email Messages

✓

✘

Request Customer Review

✓

✓

Sales Tax

✓

✓

Multi-Currency

✓

✓

Importing/Exporting

✓

On paper, the programs look pretty similar in terms of features, but the depth of Classic FreshBooks’ offerings far surpasses the newer version of FreshBooks.

Classic FreshBooks offers a full inventory feature, the ability to create default email messages, the ability to request customers reviews, more advanced time tracking, and nearly 20 more reports than FreshBooks. The one feature FreshBooks has over Classic FreshBooks is a built-in communication feature for you to talk with customers and your employees.

While the company is constantly updating FreshBooks, the new version has a long way to go before it can stand up to the robust, developed feature set of Classic FreshBooks.

Pricing

Winner: Classic FreshBooks

FreshBooks offers three pricing plans ranging from $15 – $50/month. Classic FreshBooks offers four pricing plans ranging from $12.95 – $39.95/month plus a fifth custom plan for larger businesses. You can receive a small discount for purchasing a yearly subscription instead of a monthly subscription of either version of the software.

Classic FreshBooks takes the cake here because it’s more scalable and gives you more bang for your buck in terms of features.

Hardware & Software Requirements

Winner: Tie

As cloud-based software, both FreshBooks and Classic FreshBooks are compatible on nearly any device so long as you have an internet connection.

Users & Permissions

Winner: Classic FreshBooks

Neither FreshBooks nor FreshBooks Classic is particularly well-suited for companies with multiple users. FreshBooks only offers a single user for each price plan, although you can purchase additional users for $10/month each. Classic FreshBooks offers 1 – 2 users depending on the pricing plan, and additional users can be purchased for $10/month each.

Classic FreshBooks requires extra users to log in with your same login, though you can set user permissions, whereas FreshBooks has no user permissions at this time. Classic FreshBooks wins by a hair in this category.

Ease Of Use

Winner: FreshBooks

Here is where the new design shines. The current version of FreshBooks worked out some of Classic FreshBooks’ navigational difficulties, making FreshBooks easier to use than ever. Both apps share the same great customer service so it’s easy to get help if you want some extra assistance learning and using the latest software.

Mobile Apps

Winner: Tie

FreshBooks has always been known for strong mobile apps, and the latest version is no exception. Both FreshBooks and Classic FreshBooks offer fully-featured mobile apps that make it easy to run your small business on the go.

Customer Service & Support

Winner: Tie

FreshBooks, as a company, offers some of the best customer support around. Both FreshBooks and Classic FreshBooks offer phone support, email support, in-software help, and well-developed help centers. Phone wait times are almost non-existent and representatives are friendly and helpful. The company also maintains an active FreshBooks blog with tons of information on how to succeed as a small business.

Negative Reviews & Complaints

Winner: Tie

For as long as we’ve been following FreshBooks, the software has been much-loved by users and received only a small handful of complaints. Today this is still the case. The tricky part about FreshBooks reviews is that it’s nigh impossible to tell which reviews refer to New FreshBooks and which refer to Classic FreshBooks.

Some users complain that they don’t like the new update and miss Classic FreshBooks, while others praise the new version and say they like it more than the original. The verdict is still out on which version users will end up likely best, which is why we’ve left this category as a tie.

Positive Reviews & Testimonials

Winner: Tie

Both Classic FreshBooks and FreshBooks have received positive praise from customers and high marks as far as customer ratings go. While it is again difficult to tell which version customers are referencing in reviews, it’s easy to see this pattern: users love that FreshBooks is easy to use, has excellent customer service, and offers great invoicing with strong mobile apps.

Integrations

Winner: FreshBooks

When the new version of FreshBooks first launched, integrations were a big issue. Now FreshBooks offers 70+ integrations, which beats out Classic FreshBooks’ 40+ integrations.

Security

Winner: Tie

FreshBooks uses the same security measures for both of version of the software. The company uses 256-bit SSL encryption, Cisco-powered firewalls, and regular intrusion detection and vulnerability testing. Data is backed up onto two Rackspace-hosted servers in undisclosed locations.

And The Winner Is…

Classic FreshBooks!

I’m a firm believer in the “if it ain’t broke, don’t fix it philosophy.” There are certain aspects of Classic FreshBooks that could be improved, but instead of adding more features, FreshBooks sacrificed looks for functionality with the release of New FreshBooks. While New FreshBooks is slightly easy to navigate and has a nice UI, FreshBooks already had a nice UI and user experience — plus, what FreshBooks users were crying out for were more features, not less. FreshBooks doesn’t have an inventory feature and is missing key automations like default email messages that were available with Classic FreshBooks but are no missing.

And to top it off, not only does FreshBooks offers fewer features than Classic FreshBooks, but it’s also more expensive and supports fewer users (with no accountant access either).

To be fair, the company is constantly releasing updates for FreshBooks and the new version offers far more integrations than Classic FreshBooks.

In this case, choosing which program is right for you will highly depend on the features your business needs. New users who haven’t used FreshBooks Classic may find the newer version suits their needs well. Veteran FreshBooks users might want to switch back to Classic until the latest version goes through a few more round of updates.

Or, maybe after reading this review you want to find a less expensive invoicing solution or a full-fledged accounting solution. Our invoicing reviews and accounting reviews can help!

If you’re an existing FreshBooks user, we’d love to hear from you! Let us know which version you like best in the comments below.

The post FreshBooks VS Classic FreshBooks appeared first on Merchant Maverick.

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Slow-Paying Customers? 10 Tips To Get Your Invoices Paid Faster

Slow Paying Customers? 10 Tips To Get Your Invoices Paid Faster

If your company relies on invoices, you’re probably all too familiar with slow-paying customers. According to the popular accounting software Xero, “More than a third of small business invoices are paid late.”

Late invoices seem like an inevitable part of running a business, but they don’t have to be. That’s why we’ve created a list of practical steps you can take to increase your chances of getting paid on time.

Here are our top ten tips to get your invoices paid faster.

Send Online Invoices

If you’re still mailing invoices manually, now is the time to start saving time and money by switching to e-invoices. Sending invoices online is easy, cost-effective and best of all — fast.

Instead of spending time printing invoices, stuffing envelopes, and waiting on the mailman, you can send your invoices to customers instantly. Your customers get their invoices faster, which means you get paid quicker. And you won’t need to worry any longer about whether your invoice got lost in the mail or sent to the wrong address. Most invoicing software programs offer invoice tracking so you can see exactly when your customer receives and views their online invoice.

When it comes to small businesses, time is money. But money is also money. With e-invoices, you’ll save both. While you may need to spend a small monthly fee on invoicing or accounting software, you won’t have to purchase envelopes, ink, paper, stamps, etc., and you can use your newfound free time for managing other more important aspects of your business.

Take a look at some of our favorite online invoicing options or continue reading to learn all of the perks invoicing software offers.

Offer Online Payments Options

Slow-Paying Customers? 10 Tips To Get Your Invoices Paid Faster

One of the other great perks of using online invoices is the ability to accept online payments. When it comes to getting invoices paid fast, the key is to make it as easy as possible for customers to pay you.

That’s why payment processors are so important. They’re quick, convenient, and available with almost all invoicing and accounting programs offers multiple payment processing options.

According to the popular invoicing software FreshBooks, offering an online payment option significantly increases your chances of being paid on time; and according to Xero, companies that accept both online credit card payments and Paypal payments get paid 20 days faster than those that don’t.

To learn more about accepting online payments, download our free Beginner’s Guide to Payment Processing. If you’re already sending online invoices but aren’t yet accepting online payments, read our post The Best Payment Processors For Accounting Software.

Choose The Right Invoice Template

Believe it or not, choosing the right invoice template can play a role in getting your invoices paid on time.

Most invoicing software programs offer multiple templates options. You want to pick a template that is attractive, simple, and clear to read. This includes choosing a legible, easy-to-read font like Arial or Helvetica (I usually shy away from serif fonts, like Times New Roman, as they are harder to read and often make the invoice look outdated and cluttered).

According to Invoice Ninja:

[An invoice] that’s colorful, distinctive, and attractive in appearance will stand our in their minds. This can help clients to remember your invoice and nudge them towards paying promptly.

Not only do you want an attractive invoice, but you also want an invoice that clearly shows:

  • The invoice due date
  • The invoice amount
  • Your company’s contact and payment information
  • The products or services the customer is paying for
  • The invoice’s terms and conditions

Clarifying and highlighting this information makes it easier for your customers to know when and how to pay you, which can speed up the payment process.

Here are a few examples of strong, attractive invoice templates:



Pick The Right Date

Choosing an invoice template with a clear due date is a definite step in the right direction, but you also want to make sure you choose the right due date.

Oftentimes, you’ll see invoices that say “due upon receipt.” This is a perfect example of what not to do. It doesn’t give a clear due date, which encourages late payments. Another term you often see is a “Net 30” due date. This means that the invoice payment is due 30 days after the invoice is sent. Some customers may not be familiar with this notation. Instead, be clear and specific. If an invoice is due 30 days after it’s sent and it was sent on September 1st, just say that the invoice is due September 30th. When customers have a set-in-stone deadline, they are more likely to pay on time.

If you want your invoices to be paid faster, also consider moving up your due date. If you typically have invoices due 30 days after they’re sent, try moving that up to 15 days. This way you are spending less time waiting on cash.

Give Discounts

merchant cash advance industry

 

You catch more flies with honey than vinegar, and invoicing is no exception. A great way to get your invoices paid fast is to offer a small discount for customers who pay early. Maybe consider offering a 5% or 10% discount for customers who pay their invoices in the first ten days. Everyone likes saving money, so those customers who are looking for savings will jump on the deal and pay their invoice quickly. While you may lose a small amount of your sale, you’ll receive cash faster, which may be more than worth it.

This option may not be for everyone or every type of business, but is definitely worth considering if your business is struggling with cash flow due to late invoice payments.

Enforce Late Fees

If incentives don’t work, you can also consider charging a late fee or interest for late payments. While no one likes to be the bad cop, sometimes you have to take drastic measures to receive your hard-earned money.

If you do go this route, be sure to clearly state your late fee policy on your invoice’s terms and conditions and send reminders to inform your customers that you will begin calculating interest or charging a fee if you don’t receive your invoice in time.

Send Invoices Right Away

Get your merchant funds fast. Image description: Clock with money underneath it

Your customers can’t pay you if they haven’t been sent an invoice. That’s why staying on top of invoicing is one of the most important things a business owner can do. The sooner you send your invoice the sooner you can get paid. Plus, customers are more likely to pay quickly for items or services that they just received.

It can be easy to become overwhelmed and fall behind on invoices. Luckily, there are tons of great invoicing tools out there to help automize your invoicing process. Nearly every invoicing software allows you to send recurring invoices to repeat customers. Apps like Zoho Invoice and QuickBooks Online allow you to auto schedule invoices in advance to help save time. And programs like Invoice2go offer great mobile apps so you can send invoices on straight from your phone.

Send Payment Reminders

Slow-Paying Customers? 10 Tips To Get Your Invoices Paid Faster

Another way to avoid late-paying customers is to send regular invoice payment reminders. Sometimes people simply forget and need a nudge in the right direction toward payment. Send invoice reminders a few days before the invoice is due, the day the invoice is due, and a few days after the invoice is missed.

Hopefully, the first reminder will be enough to get you your payment. If not, continue sending email reminders and calling them on the phone. No one likes to chase down payments or be a nag, but it’s your responsibility to follow up with slow-paying customers.

One of the perks of invoicing software is that most programs allow you to create automatic payment reminders, which saves a lot of time. These programs almost always have an Accounts Payable report as well so you can view your customer’s outstanding balances without having to manually track who hasn’t paid yet.

Invoice In Phases

If you run a project-based business, consider invoicing in phases. Instead of sending one giant invoice at the end of the job, maybe try invoicing once certain phases of the tasks are complete. Or, consider charging a deposit for your work to discourage customers from avoiding payment altogether. This way, you can even out your cash flow.

Use Invoicing Software

When it comes to getting your invoices paid on time, invoicing software is integral. With it, you can send invoices quickly, automize your invoicing process, and encourage customers to pay quickly with online payments.

Here at Merchant Maverick, we highly recommend that small businesses use invoicing software at the very least, or purchase full-fledged accounting software to send online invoices and balance the books. In this post, we’ve already mentioned several of the great perks of e-invoicing and invoicing software.

Here is a full list of the reasons you should use invoicing software:

  • To automate your invoicing process
  • To send online invoices to customers
  • To accept invoice payments from customers directly online
  • To see when your customers have received and viewed their invoices
  • To send automatic payment reminders to late-paying customers
  • To construct default terms and conditions that automatically appear on every invoice
  • To create default invoice email messages to make sending invoices faster
  • To run helpful reports like Accounts Receivable and Sales by Customer
  • To send invoices on the go with mobile apps
  • To save on paper, ink, and time

If you’re ready to start getting faster invoice payments by using invoicing software, here is a comparison of the top invoicing software options that have the best offerings:

Zoho Invoice Invoice Ninja Invoicera FreshBooks

Review Visit

Review Visit

Review Visit

Review Visit

Pricing

$0 – $29/month

$0 -$12/month

$0 – $15/month

$0 – $50/month

Customer Support

Very Good

Very Good

Good

Very Good

Ease of Use

Very Easy

Easy

Very Easy

Very Easy

Business Size

Small – Medium

Small

Small – Medium

Small

Number of Invoice Templates

16

10

7

2

Autoschedule Invoices

✓

✘

✓

✘

Payment Reminders

✓

✓

✓

✘

International Invoicing

✓

✘

✘

✘

Number of Payment Processors

11

35

30

2 – 6

If you want the same great invoicing features but with added bookkeeping functionality, here are the four best accounting programs for invoicing:

Zoho Books QuickBooks Online Wave Zipbooks

ReviewVisit

ReviewVisit

ReviewVisit

ReviewVisit

Pricing

$0 – $29/month

$15 – $50/month

$0

$0 – $125/month

Customer Support

Very Good

Poor

Good

Good

Ease of Use

Very Easy

Easy

Very Easy

Easy

Business Size

Small

Small – Medium

Small

Small

Number of Invoice Templates

15

5

3

1

Autoschedule Invoices

✓

✓

✘

✘

Payment Reminders

✓

✓

✓

✓

International Invoicing

✓

✘

✘

✘

Invoice Strength Score

✘

✘

✘

✓

Number of Payment Processors

12

15

2

2

If you need help deciding which software is right for you, check out our comprehensive invoicing software reviews, take a look at our post How To Choose Invoicing Software, or leave us a comment below.

What If My Customers Still Don’t Pay Their Invoices On Time?

So what happens if you try all 10 of these tips and you still have late-paying customers? That’s where invoice financing comes in.

With invoice financing, you can sell your unpaid invoices to a factoring company in exchange for immediate cash or you can use your invoices as collateral for a line of credit.

If you’re suffering from inconsistent or poor cash flow due to slow-paying customers, invoicing financing might be the perfect solution for you. Read our Merchant’s Guide To Invoice Financing to learn more or compare the invoice financing options.

Instead of feeling powerless against late invoices, you now have ten tricks under your sleeve to help get those invoices paid faster (eleven if you count invoice financing!) Take action against slow-paying customers and start getting your invoices paid faster today.

The post Slow-Paying Customers? 10 Tips To Get Your Invoices Paid Faster appeared first on Merchant Maverick.

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