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Gas Credit Cards: Top Business And Personal Cards For Gas

best gas credit cards

If your business has you driving to and fro with any frequency — or if you simply do a lot of driving — you might want a credit card with a rewards system geared towards saving you money on gas purchases. Thankfully for you, many credit card issuers offer gas credit cards designed to get you earning points or cash back for the gas purchases you have to make anyway.

Let’s examine both the business cards and the personal cards that give you the best rewards for your gas purchases.

Credit Card Card Type Gas Rewards
BofA Business Advantage Cash Rewards MasterCard Business 3% cash back
US Bank Business Cash Rewards World Elite MasterCard Business 3% cash back
SimplyCash Plus Business Credit Card from Amex Business 3% cash back
Chase Ink Business Cash Business 2% cash back
Citi Premier Card Personal 3X points
Blue Cash Preferred Card from Amex Personal 3% cash back
Hilton Honors American Express Card Personal 5X Hilton Honors points
Sam’s Club MasterCard Personal 5% cash back

Best Gas Rewards For Business Credit Cards

Bank Of America Business Advantage Cash Rewards MasterCard

Bank of America Business Advantage Cash Rewards Mastercard

bofa business advantage cash rewards
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Annual Fee:

$0

 

Purchase APR:

13.49% to 23.49%, Variable

Required credit: Excellent

Bonus offer: $200 statement credit bonus after spending $500 on purchases in the first 60 days

Purchase intro APR: 0% for the first 9 months

Balance transfer intro APR: N/A

Foreign transaction fee: 3%

Rewards:

  • 3% cash back on purchases at gas stations and office supply stores (up to $250,000 annually, 1% after that)
  • 2% cash back on purchases at restaurants
  • 1% cash back on all other purchases

Notable perks & benefits:

  • 25% – 75% rewards bonus on the base earn of every purchase if you enroll in the Business Advantage Relationship Rewards program
  • Redeem your cash rewards as a statement credit, check, or have cash deposited into a Bank of America checking or savings account
  • Travel and emergency services
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There’s a lot for business owners to like about the Bank Of America Business Advantage Cash Rewards MasterCard. There’s the lack of an annual fee, the relatively low APR that applicants with sufficiently good credit can qualify for, and the intro 0% APR for nine months. The Business Advantage Cash Rewards MasterCard happens to be a great gas rewards card as well.

This card lets you earn 3% cash back on your first $250,000 per year in purchases at gas stations and office supply stores. Assuming you use this benefit entirely on gas purchases, that’s $7,500 in potential cash back you can earn each year on gas.

Combine that with membership in the Business Advantage Relationship Rewards program (which gives you an additional 25% – 75% rewards bonus on your purchases) and you can actually save up to 3.75% on your gas purchases. Not too shabby!

In addition to the above rewards, you’ll earn 2% cash back on purchases at restaurants and 1% cash back on all other purchases. If your spending on gas exceeds $250K a year, your remaining gas purchases that year will still earn you cash back, just at the 1% rate.

US Bank Business Cash Rewards World Elite MasterCard

US Bank Business Cash Rewards World Elite Mastercard

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Annual Fee:

$0

 

Purchase APR:

14.24% – 25.24%, Variable

Required credit: Excellent

Bonus offer: $200 cash back after you spend $1,000 on eligible purchases within the first 90 days

Purchase intro APR: 0% intro APR for 15 months

Balance transfer intro APR:0% intro APR for 15 months

Foreign transaction fee: 2% – 3%

Rewards:

  • Unlimited 3% cash back on eligible cellular, gas and office supply store purchases
  • Unlimited 1% cash back on all other eligible purchases

Notable perks & benefits:

  • Annual bonus equal to 25% of your prior year’s cash rewards (up to $250 dollars)
  • Zero fraud liability
  • 24/7 dedicated service
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The US Bank Business Cash Rewards World Elite MasterCard is another business card designed to reward companies with significant driving needs.

You’ll be earning 3% cash back on gas, cellular, and office supply store purchases. The best feature of this card is the fact that there are no limits on the amount of cash back you can earn at the 3% rate. So, if your business has you spending more than $250K a year on gas (and on cellular bills and office supplies), this card will be a better gas card for you than the BofA Business Advantage Cash Rewards MasterCard.

The US Bank Business Cash Rewards World Elite MasterCard also pays out 1% cash back on all purchases not covered by the 3% cash back categories. You can also get an annual 25% cash back bonus based on your previous year’s cash back rewards. This bonus maxes out at $250.

In addition, this card carries no annual fee and comes with a very generous 15-month introductory 0% APR period.

SimplyCash Plus Business Credit Card From American Express

SimplyCash Plus Business Credit Card from American Express


Compare

Annual Fee:

$0

 

Purchase APR:

14.49% – 21.49%, Variable

Required credit: Good, excellent

Bonus offer: None

Purchase intro APR: 0% for the first 9 months

Balance transfer intro APR: N/A

Foreign transaction fee: 2.7%

Rewards:

  • 5% cash back at U.S. office supply stores and on wireless telephone purchases, up to $50,000 per year
  • 3% cash back on a category of your choosing (airfare, hotel rooms, car rentals, gas stations, restaurants, advertising purchases, shipping, or computer hardware, software, and cloud computing), up to $50,000 per year
  • 1% cash back on all other purchases

Notable perks & benefits:

  • Expanded buying power — buy above your credit limit with no penalty fees
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Here’s another business credit card offering 3% cash back on gas: the SimplyCash Plus Business Credit Card from American Express. This is a solid gas card for businesses that spend a lot on gas but don’t spend so much that they stand to benefit from the high-to-nonexistent 3% cash back earning limits of the previous two cards discussed.

This Amex business card’s reward structure goes like this: You earn 5% cash back at US office supply stores and on wireless telephone services purchased directly from US service providers. Next, you earn 3% cash back on one of eight bonus spending categories of your choosing, and gas station purchases are one such category. You’ll earn 1% cash back on all other purchases.

The 5% and 3% cash back rates apply toward the first $50,000 in purchases in each category per calendar year with the 1% rate applying thereafter.

Beyond that, the card carries no annual fee, an introductory nine month 0% APR period, and the ability to buy above your credit limit provided you pay the amount above your credit limit in full each month.

Chase Ink Business Cash

Chase Ink Business Cash


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Annual Fee:

$0

 

Purchase APR:

15.49% – 21.49%, Variable

Required credit: Good, excellent

Bonus offer: $500 cash back if you spend at least $3,000 in the first three months of opening your account

Purchase intro APR: 0% for the first 12 months

Balance transfer intro APR: 0% for the first 12 months

Foreign transaction fee: 3%

Rewards:

  • 5% cash back on the first $25,000 spent in combined purchases at office supply stores and on internet, cable, and phone purchases each account anniversary year
  • 2% cash back on the first $25,000 spent in combined purchases at gas stations and restaurants each account anniversary year
  • 1% cash back on all other purchases

Notable Perks & Benefits: 

  • Employee cards at no additional cost
  • Travel and purchase coverage
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The Chase Ink Business Cash card is one of the best business cards out there for cash rewards — and it also happens to work well as a gas credit card.

With the Ink Business Cash, you’ll earn 5% cash back on the first $25,000 spent in combined purchases at office supply stores and on internet, cable, and phone services each year. You’ll also earn 2% cash back on your first $25,000 spent annually at gas stations and restaurants, and 1% cash back on all subsequent purchases in these categories and on all other spending. If you do a decent amount of driving for work, but not a huge amount, the Ink Business Cash should work well for you as a gas card.

The Ink Business Cash has no annual fee and a 12-month introductory 0% APR period. You can also redeem your cash back for more than just a statement credit. Through Chase Ultimate Rewards, you can redeem your cash back for cash, gift cards, booking travel, and more.

Best Gas Rewards For Personal Credit Cards

Citi Premier Card

City Premier Card

City Premier Card
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Annual Fee:

$95, Waived for the first year

 

Purchase APR:

16.74% – 25.74%, Variable

Suggested credit: Excellent

Bonus offer: 50,000 bonus points after you spend $4,000 on purchases in the first 3 months

Purchase intro APR:  N/A

Balance transfer intro APR: N/A

Foreign transaction fee: 0% 

Rewards:

  • 3X points on travel including gas stations
  • 2X points at restaurants and on entertainment
  • 1X points on all other purchases

Other Benefits: 

  • Citi Private Pass benefits
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The Citi Premier Card is a travel rewards card that offers 3X points on gas purchases. Let’s learn more!

With the Citi Premier Card, you can earn three points per dollar spent on travel including on gas purchases. There’s no limit to the amount of travel spending you can do per year while earning triple points. If either your business life or your personal life sees you doing lots of travel by both air and land, the Citi Premier Card should serve you well.

You’ll also earn 2X points at restaurants and on entertainment and 1X points on all other purchases. The card carries a $95 annual fee, though this fee is waived the first year.

While the card lacks an introductory 0% APR period, it does sport a nice bonus offer: 50,000 bonus points after you spend $4,000 on purchases within three months.

Blue Cash Preferred Card From American Express

Blue Cash Preferred Card from American Express

Blue Cash Preferred Card from American Express
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Annual Fee:

$95

 

Purchase APR:

15.24% – 26.24%, Variable

Suggested credit: Good, Excellent

Bonus offer: $200 cash back after you spend $1,000 on purchases in the first 3 months

Purchase intro APR:  0% intro APR for 12 months

Balance transfer intro APR: 0% intro APR for 12 months

Foreign transaction fee: 2.7% 

Rewards:

  • 6% cash back on your first $6,000 in annual purchases at US supermarkets
  • 3% cash back on all US gas station purchases
  • 1% cash back on all other purchases

Other Benefits: 

  • Earn rewards faster by adding additional cards for your family and friends
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With the Blue Cash Preferred Card from American Express, you’ll earn 6% cash back on your first $6,000 per year in purchases at US restaurants and an unlimited 3% cash back on all US gas station purchases. If you want a card that’s ideal for driving to the grocery store, the Amex Blue Cash Preferred card couldn’t be a better fit.

Along with the above cash back categories, you’ll earn 1% on all other purchases and on grocery purchases above the annual $6,000 high-earning limit. You’ll also get 12 months of 0% APR and a $200 statement credit if you spend $1,000 on purchases in your first three months.

Rewards can be redeemed for statement credits, gift cards, and merchandise from hundreds of retailers. On the downside, the card carries a $95 annual fee which is not waived for the first year.

Hilton Honors American Express Card

Hilton Honors American Express Card

Hilton Honors American Express Card
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Annual Fee:

$0

 

Purchase APR:

17.99% – 26.99%, Variable

Suggested credit: Good, Excellent

Bonus offer: 75,000 Hilton Honors points when you spend $1,000 on purchases in the first 3 months

Purchase intro APR:  N/A

Balance transfer intro APR: N/A

Foreign transaction fee: 0% 

Rewards:

  • 7X Hilton Honors points on all Hilton purchases
  • 5X points on all purchases at US gas stations, restaurants, and supermarkets
  • 3X points on all other purchases

Other Benefits: 

  • Complimentary Hilton Honors Silver status
  • Get Hilton Honors Gold status through the end of the next calendar year by spending $20,000 in a calendar year
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Do you spend a lot on gas? Are you a frequent guest at Hilton hotels (or would you like to be)? If you answered yes to these questions, check out the Hilton Honors American Express card.

This Amex Hilton travel card offers 7X Hilton Honors points on all spending at Hilton properties, 5X points on all US gas station purchases and on all US restaurant and supermarket purchases, and 3X points on all other purchases.

Now, the 5X points you’ll earn on gas is about the best rewards earning rate you’ll find for gas purchases with any credit card, anywhere. The downside, of course, is that the points you earn can only be used for Hilton-related travel. But if that’s your thing, consider the Hilton Honors Amex card.

When you get the card, you’ll get complimentary Silver status in the Hilton Honors program, thus increasing the value of your points. And if you spend $20,000 on eligible purchases in a calendar year, you can achieve Gold status through the end of the next calendar year.

The Hilton Honors Amex card carries no annual fee.

Sam’s Club MasterCard

Sam’s Club Mastercard

Sam's Club Mastercard

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Annual Fee:

$0

 

Purchase APR:

17.15% – 25.15%, Variable

Suggested credit: Good, Excellent

Bonus offer: $45 statement credit when you make a $45 purchase the same day you open your account

Purchase intro APR:  N/A

Balance transfer intro APR: N/A

Foreign transaction fee: 0% 

Rewards:

  • 5% cash back on gas on your first $6,000 in gas purchases each year
  • 3% cash back on dining and travel
  • 1% cash back on all other purchases

Other Benefits: 

  • Your Sam’s Club Mastercard doubles as your Sam’s Club membership card (Sam’s Club membership required to get the card; membership costs $45/year)
More card details (click to expand)
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The Sam’s Club MasterCard offers an impressive 5% cash back on gas purchases. Considering the fact that you’re earning cash back and not proprietary points, that’s an eye-opening earning rate for gas purchases. However, you’ll have to be a Sam’s Club member in order to apply, and you can’t earn 5% cash back on gas purchased at the gas stations of competing wholesalers like Costco.

You’ll also earn 3% cash back on dining and travel and 1% on all other purchases. What’s more, the card has no annual fee, though Sam’s Club membership — a requirement to get the card — costs $45 a year.

Final Thoughts

Credit cards can lead you down the wrong path if they simply encourage you to rack up charges in the pursuit of rewards. However, a sizable portion of the population spends heavily on gas as it is. By using a gas credit card to earn rewards on these gas purchases, you can earn rewards each time you fill up at the pump.

Still on the lookout for a credit card that makes sense for you? Not sure you’ll qualify for the kind of card you want? Let Merchant Maverick help you sort things out!

  • Best free credit score sites
  • Ways to improve your credit score
  • Using personal credit cards for business

The post Gas Credit Cards: Top Business And Personal Cards For Gas appeared first on Merchant Maverick.

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How To Start And Fund A Coffee Shop


opening a coffee shop

Coffee shops are vital places. Not only do they sell brewed happiness, without which I could not function, but they are important for communities as well. A coffee shop is where people meet up, whether to catch up with friends, go on a first date, or conduct a casual business interview. Thanks to the WiFi revolution, coffee houses have also become destinations where remote workers and freelancers can connect from their laptops and students can study for exams.

Coffee shops these days even have significance in the culinary world. Ten or fifteen years ago, you could go to a coffee shop to get a coffee and a muffin. No one had heard of third-wave coffee, latte art, single-origin pour-overs, acai bowls, or even avocado toast, but today, these are probably standard fare at the most happening coffee shop near you.

The high customer demand for an enhanced coffee house experience means lucrative opportunities for local business owners who want to enter the coffee shop business. By opening a coffee shop, you have the potential to create a unique business that could become one of the hottest destinations in your city. But first, you’ll need to do your research on how to establish a successful coffee shop, and perhaps most importantly, figure out how you’ll fund your business venture.

In this post, I describe the main steps for opening a coffee shop. I also outline the best ways to finance a new coffee shop business, with suggestions for recommended lenders in each category.

Preparing To Start A New Coffee Shop Business

If you’ve decided you want to open your own coffee shop (or are at least pretty sure), here’s what you need to do to get started.

1. Decide Whether To Buy A Franchise

Becoming a franchisee isn’t for everyone, but it might be right for you. There are a lot of benefits to purchasing a turnkey business where most of the elements you need to run the business are already in place. You might want to at least consider which coffee shop franchises you could potentially open in your area, and the costs associated with franchise ownership vs. the costs of opening and operating an independent coffee shop.

2. Determine What You’ll Sell

What do you envision your coffee shop’s menu looking like? Do you want to sell only coffee/espresso drinks and pre-made pastries, or have a larger offering that would require a kitchen where food is prepared onsite? Will you serve lunch or just snacks? What about mugs, t-shirts, or other non-food merch? It’s important to have at least a general idea of what you’ll sell early on in the process because this will determine what type of business space you’ll need, as well as your overall vision for your business.

3. Choose A Name & Theme

Next to your menu, the overall vibe and branding of your coffee shop will play a huge part in determining your success. A lot of thought must go into your business’s name and logo, both of which should reflect your theme. If you want to set your business apart from other offerings in your area, it will need to have a unique appeal. In marketing, this is called your business’s “unique value proposition” or “unique selling proposition.” Determining your UVP now will also help you down the road when you’re applying for financing — and also when marketing your business with signage, on social media, etc.

4. Create A Business Plan

Your business plan is essential in guiding the development of your business. In fact, it’s a document that most lenders will require when you apply for financing. Your plan will describe your UVP, and will also have information about how you intend to run your coffee shop. The plan might include specific information about how much financing you need, projected profits, information about ownership and management, relevant market research, competitors in your area, and other details. You should be able to find some sample business plans for coffee shops online to help you get started.

Some more things to consider when creating your coffee shop business plan include:

  • Business hours
  • Floor plan, including the layout of outlets for laptops, whether you’ll have community tables, etc.
  • Decor—Will you go eclectic hodgepodge or streamlined/modern? Keep your theme in mind.
  • What type of music you’ll play
  • Whether you’ll appeal to kids with offerings such as board games and kids’ drinks
  • Community events you might host—For example, open mic night, family board game night, jazz night, etc.

5. Find A Location

An essential component of starting any business is finding a place to set up shop. Maybe there is a vacant business space in town that you’ve already been eyeing, or perhaps you aren’t sure where to look yet. The design of the space itself needs to meet your needs, while the location in relation to other places of interest is just as important. Foot traffic, proximity to competitors, and convenience for university students are all aspects to consider. You should also consider whether you want to have the sort of space where people can feel comfortable working all day, or if you’d rather have minimal seating so people will be on their way shortly after making their purchase. Depending on your budget and theme, you might consider choosing a former coffee shop or restaurant space so that you won’t have to do extensive remodeling.

Funding Your Coffee Shop

business line of credit loan

Assuming you don’t have personal savings to open your business, you’ll need to get creative in order to secure financing for your brand-new business—traditional lending institutions such as banks and credit unions will usually want to see that you have at least two years in business. However, once you have a solid business plan and prospective location for your coffee shop, it will be easier to find parties who are willing to lend to you. Prospective business owners with good credit and business experience will have the most options, but there are even options for startups with bad credit.

1. Family & Friends

While most of us aren’t blessed enough to have a wealthy aunt willing to fund our wildest dreams, if you do have such an aunt, now is the time to hit her up. You can even hire a lawyer to draw up a contract for a loan between you and your aunt (I’m starting to feel like I know her now—let’s call her Aunt Judy), or use a service like LoanBack that formalizes loan contracts between friends and family.

If you don’t have an Aunt Judy but have personal and/or business contacts that might be willing to invest smaller amounts in your business, you might consider using a platform like Kiva. Kiva lets you crowdfund a small business loan up to $10K, provided you meet their terms and have a certain number of friends/family members from your personal network willing to back your loan.

2. Short-Term Business Loan

Most traditional business loans, which are repaid in installments over a number of years, require you to have at least a couple of years in business. An alternative business lending option available to newer businesses (and sometimes even startups) is a short-term loan. These loans can potentially carry high interest rates and you could be required to repay your loan in a matter of months, or sometimes even weeks. However, STLs can be a viable lending option for businesses that don’t have much time in business or business revenue, and many such lenders don’t even require you to have good credit.

Recommended Option: Lendio

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  • Time in business: 6 months
  • Business revenue: $10,000 per month
  • Personal credit score: 550
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Lendio is an online loan marketplace where you can apply for and compare multiple business loans at once — including short-term loans — potentially up to $500,000. Lendio offers terms as long as 1–3 years, which is a more comfortable repayment frequency compared to many of the predatory short-term lenders you’ll find online. If you don’t have much business experience and aren’t sure what business loans you might qualify for, Lendio is a good place to start. When you can compare multiple loan offers as you can with Lendio, it is much easier to choose the best loan you qualify for.

Lendio Borrower Requirements:

Lendio’s borrower requirements vary depending on which of their lender partners you’re applying with, but the majority of loans in Lendio’s marketplace have these minimum requirements:

  • Time In Business: 6 months
  • Credit Score: 550
  • Business Revenue: $10K/month

3. Personal Loan

A personal loan can be used to fund a business startup such as a coffee shop, as long as the terms of the lender allow you to do so. Personal loans typically have an upper borrowing limit of $30K–$50K and carry higher interest rates than a business loan. You also usually need to have good personal credit. You do not need to have good business credit or any particular business credentials.

Recommended Option: LendingPoint

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  • Time in business: N/A
  • Business revenue: N/A
  • Personal credit score: 600 – 680
  • Personal income: $20,000
  • LendingPoint does not operate in Colorado, Connecticut, Iowa, Louisiana, Maine, Maryland, Massachusetts, Nevada, New York, North Dakota, Rhode Island, South Carolina, Vermont, West Virginia, Wisconsin, and Wyoming
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LendingPoint is a reputable online lender offering personal loans that can be used for business. These loans are quick and easy to apply for, and you can qualify even if you have a fair personal credit score in the 600s. These are smaller loans—the upper borrowing limit is $25K—but they are accessible to almost anyone with decent credit. You will have between 2–4 years to repay, which is pretty good for an online loan.

LendingPoint Borrower Qualifications:

  • Time In Business: N/A
  • Credit Score: 600
  • Business Revenue: N/A
  • Personal Income: At least $20K/year

4. Short-Term Line Of Credit

Like short-term loans, short-term lines of credit are also open to young businesses that are just getting started. With this type of business financing, you only have to repay what you borrow, similar to a credit card. The downsides are that you’ll have to pay back the principal pretty expediently, with potentially high interest rates and other fees. Nevertheless, a line of credit can be an important source of working capital or expansion funds for a new business. It’s also a smart choice if you don’t know exactly how much money you’ll need.

Recommended Option: Fundbox

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  • No time in business requirements, but must have used a compatible accounting or invoicing software for at least 2 months, or a compatible business bank account for at least 3 months.
  • Business revenue: $50,000 per year
  • No specific personal credit score requirement
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Fundbox is a short-term LOC you might want to consider once you’ve opened up shop and have at least a couple months of coffee-brewing under your belt.

Fundbox offers one of the quickest and easiest business lines of credit with Fundbox Direct Draw. The main requirement for this revolving line of credit is to have been using Fundbox-compatible accounting software for at least two months. Fundbox will use your software account information to evaluate the health of your business, but there are no time-in-business requirements or specific credit score requirements. They will want to see that you’re on course to make at least $50K/year, however. You can borrow up to $100K (depending on how much they approve you for) and will have 12–24 weeks to repay the principal.

Fundbox Direct Draw Borrower Qualifications: 

  • Time In Business: N/A
  • Credit Score: N/A
  • Business Revenue: $50K/year
  • Other: Use of compatible accounting software for 2+ months

5. Startup Loan

A startup loan is a loan specifically for startup businesses with 6 or fewer months in operation. Often, these loans do not have any time-in-business requirements. Similar to a personal loan, a startup lender will want to look at your personal track record as far as credit history, and may possibly even delve into your job history and education level. It is pretty difficult to get this type of loan from a bank, but there are several online lenders that cater to startups.

Recommended Option: Upstart

upstart logo

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  • Time in business: N/A
  • Personal credit score: Minimum 620
  • Business revenue: N/A
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Upstart is an online lender aimed at younger borrowers, though applicants of any age can apply. Upstart helps fund startup businesses, as well as personal expenses and debt refinancing. Through Upstart, you can borrow up to $50K to finance your coffee business, with up to 5 years to pay back the loan. The main criterion Upstart cares about is your personal credit score, but having a strong job history and/or a college degree will also help you secure a loan with a good interest rate.

Upstart Borrower Qualifications:

  • Time In Business: N/A
  • Credit Score: 620
  • Business Revenue: N/A

6. Vendor Financing

Some popular coffee shop POS systems offer vendor financing. That is, a POS vendor may offer users of their point of sale system or payment processing service a business loan. These financing products usually have a low barrier to entry and are suitable for coffee shops that have recently opened. Typically, the main requirement is that you are an active user of the vendor’s product.

Recommended Option: Shopify Capital

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Shopify monitors your account and extends a financing offer if your business is eligible. To qualify, you must:

  • Be located in the United States
  • Have Shopify Payments enabled
  • Have a profile that is considered low-risk
  • Process a certain amount of gross merchandise volume (GMV)
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If you use Shopify Payments at your coffee shop, you may be eligible to get a short-term loan or merchant cash advance through Shopify Capital. You cannot apply for this loan; rather, Shopify will let you know if you are eligible. You can borrow a maximum of $500K, and Shopify will deduct a portion of your sales each day until the cash advance is fully remitted (paid off). With a STL from Shopify Capital, you have up to a year to pay it off. We like Shopify POS system a lot, but if you use another POS system, you will not be eligible for Shopify financing.

If you use Square as your coffee shop POS, Square Capital is a similar financing product you may be eligible for. Or, if you let customers pay with PayPal, PayPal Working Capital is an option.

Shopify Capital Borrower Requirements:

  • Time In Business: N/A
  • Credit Score: N/A
  • Business Revenue: N/A
  • Other: Have a US-based Shopify Payments account, with a low-risk profile, and process a certain amount per month

7. ROBS

Rollovers As Business Startups (ROBS) is a strategy to leverage your retirement account to start a new business. Because this method is technically a rollover, you won’t be penalized for removing funds from your 401(k), IRA, or another retirement account prematurely. Also, since you’re not borrowing money, there is nothing to pay back and no borrowing fees. The downside is that if your business fails, you could lose your investment, and potentially your chance to retire comfortably if you don’t have any other savings. A ROBS is a somewhat complicated transaction, but a ROBS provider will help you set up the new account to fund your business in exchange for a setup fee and a monthly service fee.

Recommended Option: Benetrends

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  • Varies based on the type of financing you seek.
  • Must have a personal credit score of 660 or above.
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Benetrends’ financing options include ROBS as well as loans. Benetrends’ popular ROBS “Rainmaker” plan has financed more than 15,000 small business owners to date and is one of the top ROBS plans out there. Benetrends has clear, fair terms and excellent customer service. This ROBS provider charges a one-time $4,995 setup fee, and an ongoing monthly service fee of $130/month.

Benetrends Rainmaker Borrower Qualifications:

The only borrower requirement is that you have an eligible retirement account with at least $50,000. Eligible accounts include:

  • 401(k)
  • 403(b)
  • Traditional IRA
  • Thrift Savings Plan (TSP)
  • Simplified Employee Pension (SEP)
  • Keogh

Ineligible plans include Roth IRAs, 457 Plans for non-governmental agencies,  and distribution of death benefits from an IRA other than to the spouse.

8. Purchase Financing

Similar to purchase order financing, purchase financing is an alternative lending product that allows you to repay your vendors for business purchases in installments. The purchase financing company pays your invoices upfront, and then you repay the financing company in installments. Purchase financing lets newer businesses, such as a coffee shop startup, acquire the materials and equipment needed to open up shop, without having to pay for their supplies all at once. You can think of purchase financing as somewhere between a line of credit and a credit card.

Recommended Option: Behalf

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  • No specific time in business, revenue, or credit score requirements.
Borrower requirements (click to expand)
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Behalf is a purchase financing company that offers financing for business purchases, at interest rates of 1%–3% per month. Behalf pays your merchants, and then you repay Behalf in weekly or monthly installments over a period as long as 6 months. This service has a very simple application, with transparent terms and no hidden fees. You can borrow up to $50K, depending on how much you are approved for.

You can use Behalf to fund purchases for most inventory or services, such as coffee beans or business consultant fees, but you cannot use the service for things like paying off existing debt or covering payroll.

Behalf Borrower Requirements

  • Time In Business: N/A
  • Credit Score: N/A
  • Business Revenue: N/A

Note that even though there is no stated credit score minimum, Behalf does do a hard pull on your credit during the application score, and will evaluate your business finances as well.

9. Credit Card

A business or personal credit card has its limitations, as your credit limit probably won’t be high enough to pay for all your startup costs. However, a credit card is a lot easier to get than a business loan, and if you play your cards right (ha ha) you might not have to pay any financing fees at all. Credit cards offer more cash-back and other rewards than ever before, particularly for business cards, and many cards also offer a 0% introductory APR for the first year. Moreover, opening a business credit card will help your new businesses establish and build your business credit profile.

Recommended Option: Chase Ink Unlimited

Chase Ink Business Unlimited

chase ink business unlimited
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Annual Fee:

$0

 

Purchase APR:

15.49% – 21.49%, Variable

Required credit: Good, excellent

Bonus offer: $500 cash back if you spend at least $3,000 on purchases in the first 3 months

Purchase intro APR: 0% for the first 12 months

Balance transfer intro APR: 0% for the first 12 months

Foreign transaction fee: 3%

Rewards: 

  • Unlimited 1.5% cash back rewards on all purchases

Notable perks & benefits:

  • Employee cards at no additional cost
  • Travel and purchase coverage
More card details (click to expand)
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There’s a lot to like about Chase’s newest business card, Ink Business Unlimited℠. This card offers unlimited 1.5% cash-back on all purchases, combined with no annual fee, a $500 credit if you spend $3K in the first 3 months, and a 12-month 0% introductory APR. This card also carries other useful benefits such as purchase protection against damage and theft, and additional employee cards at no extra cost.

Ink Business Unlimited℠ Eligibility

To be eligible for this card, you need to have good to excellent credit.

If your credit score isn’t your strong suit, no worries. Check out this list of Business Credit Cards For People With Bad Credit.

Opening Your Cafe

Now that you have your business vision, location, and funding in place, it’s time to get ready to open to the public. If you take all of these steps, you should have everything you need to run a successful business, including a demand for your product.

1. Assemble Your Professional Team

Starting a business usually requires you to hire professionals such as accountants, attorneys, architects, and business consultants. At the very least, you will want to have an accountant you trust, as this person can also act as your business consultant in many ways. Professional fees can be high, but can save you a lot of money and headaches down the road.

2. Begin Remodeling

Unless you are building from scratch, you will most likely need to do at least some remodeling to your coffee shop business space to make it fit your needs and vision. At the very least, you’ll need to add signage and repaint. Be thoughtful when choosing the decor, from floor to ceiling. If you need to do extensive remodeling, an SBA 504 Commercial Construction loan might help you finance the renovations. Of course, if you are renting, there will likely be limitations on what changes you can make to your business space.

3. Acquire Equipment & Materials

Before you can start brewing, baking, and all that, you’ll need the proper equipment and raw ingredients. This will require careful consideration, particularly when choosing vendors for coffee beans and other food and drink materials. Make sure you do your research and do plenty of taste tests, because the worst thing a coffee shop can have is yucky-tasting coffee. When selecting vendors for your coffee beans and other raw ingredients, be sure to consider things that your customers might care about, such as whether the coffee comes from sustainable farms or is organic.

In terms of coffee shop equipment, you may have the option to lease or buy. Equipment financing is one way a lot of restauranteurs acquire kitchen equipment, and one you might consider also. Proceeds from SBA 504 loans can also be used to purchase kitchen equipment.

4. Create A Buzz With Marketing

There are so many innovative ways to start creating a buzz around town before your coffee shop even opens. Some of these include:

  • Giving out samples of your coffee at local events
  • Updating your building’s exterior with signage and other eye-catching improvements
  • Setting up a direct mail campaign in targeted regions
  • Alerting the media to your grand opening
  • Social media marketing (more on that in a minute)

Essentially, you want people to be excited about your coffee shop before it even opens. Fortunately, social media and the internet makes this easier than ever.

5. Bolster Your Web Presence

Your business website and social media profiles need to be in place before your coffee shop opens. If you don’t have the time or budget to hire a web designer, you can still create a functional and attractive website using a website builder such as Squarespace or Wix. Posting to Instagram and other social sites before the grand opening will also help you create a buzz and establish an online presence.

Here are a couple of resources that will help you build your online presence for your coffee shop:

  • Guide to creating/maintaining a web presence
  • Guide to social media marketing

6. Hire & Train Employees

Your employees and the level of customer service they provide will ultimately make or break your coffee shop. You will need to be smart and careful in your hiring process, and train the employees thoroughly so they know not only your processes but also the atmosphere you are trying to create. It’s important to value your employees and offer competitive wages and perks, even if that means cutting costs somewhere else; if you pay minimum wage, employees will ultimately be grumpy with one foot out the door. By establishing a positive corporate culture and showing employees you value them, you will create an awesome team that will take your business to the next level.

7. Choose A POS System

Your point of sale is where you make all your money, so it’s super important that you choose a good one! You do not want a system that is unreliable or only pairs with a crappy merchant service provider that charges exorbitant swipe fees. Thus, you will need to test out multiple systems and read reviews before selecting a system. You’ll also need to figure out which features you need and which you can live without. Many modern cloud-based POS systems are essentially complete business management software programs, with built-in inventory management, employee management, accounting integration, loyalty software, and even more functions. You also have the choice to go all out with POS hardware add-ons such as digital menu boards and self-order kiosks, or keep it simple with a single iPad register.

More important than having a POS with all the bells and whistles, it is essential that the POS system you select integrates with a high-quality merchant services provider (or choice of merchant service providers). Your merchant service provider will determine what percentage of your credit card sales you’ll hand over, how issues such as chargebacks are handled, and how much you’ll pay to exit the contract if you’re not happy with the level of service.

To start your POS research, I recommend reading our article on the best POS systems for coffee shops.

Final Thoughts

There are so many things to consider when starting any business, particularly a business in the restaurant industry. However, as long as you have a solid business plan and financing in place, the rest is really just details. Opening a coffee shop is a practical choice for a lot of prospective business owners, as there will always be demand for good coffee and a place to drink it. Not only that, but it’s also a choice that will allow you to express your individuality and become a vibrant part of the local community in a way that many business types aren’t suited for.

If all this sounds good to you, I encourage you to get started so you can open the go-to coffee shop in your city before someone else does.

Oh, and don’t forget the free WiFi!

The post How To Start And Fund A Coffee Shop appeared first on Merchant Maverick.

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Vistaprint Website Builder Review: Pros, Cons, and Alternatives

When you think of Vistaprint, you probably think of business cards — which is what the company is known for and has been since their founding in 1995. But did you know Vistaprint offers other marketing materials for small business owners — like a website builder?

Actually…

You probably do know that, because you are likely in the middle of checking out and got their website builder offer. And you thought “is the Vistaprint website builder actually good?” And so, you stumbled on this post.

Well I thought the same thing while buying a few business cards. So, I went ahead and gave Vistaprint a try for a small project for a full Vistaprint Website Builder Review.

But before I get into the pros and cons of my review, let’s get a bit of background on building a website in general.

Check out Vistaprint’s Current Plans & Pricing

There are so many considerations to take into account when choosing a website builder — and really, there are a thousand ways to get what you want in the end in terms of functionality, convenience, pricing, etc.

The thing to remember is: whether you’re building a simple personal website or running a business, the way you build your site has a lot of consequences.

In the long-term, it affects your versatility, functionality, and, of course, your brand. In the short-term, it can certainly add/take away a lot of headaches. That said, just like choosing a physical house or office, there is no such thing as an absolute “best” or “top” choice. There’s only the right choice relative to your goals, experience, and circumstances.

What Is Vistaprint Website Builder?

On the wide spectrum of website building solutions, VistaPrint lives on the end that is all-inclusive and provides everything you need to get started and grow your website. It contrasts with solutions where you buy, install, and manage all the “pieces” of your website (ie, domain, hosting, software) separately. I wrote a post on Website Builders, Explained for more background.

Using Vistaprint is sort of like leasing and customizing an apartment in a really classy development instead of buying and owning your own house. You’re still in control of decor, cleaning, and everything living-wise – but you leave the construction, plumbing, security, and infrastructure to the property owner. That point is key because there’s usually a direct tradeoff between convenience and control with all software, but especially with website builders.

Everything may fit together just right with a website builder like Vistaprint, but that may or may not be what you’re looking for.

As far as competition, Vistaprint competes with all-inclusive hosted website builders like GoDaddy, Site123, Weebly, Wix, Squarespace, Gator, WordPress.com, and others.

Compared to their direct competition, they focus on speed and ease-of-use to cater to small business owners with little website experience, and rely heavily on their existing customer base when promoting their website builder product through customized marketing (more on that in a bit!).

Instead of operating like a traditional drag-and-drop website builder, Vistaprint uses website “blocks” that you can drag and drop into your template to customize it.  They also offer a “done-for-you” service where they’ll handle creating your website for you. It’s an incredibly intuitive platform, making it a great choice for DIYers who need to create a website quickly without having any website experience.

Continue reading “Vistaprint Website Builder Review: Pros, Cons, and Alternatives”

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Duda Website Builder Review: Pros, Cons, and Alternatives

Duda Website Builder Review_ Pros, Cons, and Alternatives

Duda is known as an all-inclusive website builder that was originally created as an easy-to-use mobile website platform for DIYers. It has sinced evolved to help agencies, digital publishers, and hosting companies scale with an quick and easy website platform that helps their clients get up and running ASAP.

Duda is also known for making responsive websites, which means the site fits on any device (i.e. a tablet, phone, computer).

See Duda’s Current Plans & Pricing

Recently, I gave Duda a try for a full Duda review. But before I get into the pros and cons of my Duda review, let’s dive into an overview about tools to build a website.

There are so many considerations to take into account when choosing a website builder — and really, there are a thousand ways to get what you want in the end in terms of functionality, convenience, pricing, etc. The thing to remember is: whether you’re building a simple personal website or running a business, the way you build your site has a lot of consequences.

In the long-term, it affects your versatility, functionality, and, of course, your brand. In the short-term, it can certainly add/take away a lot of headaches. That said, just like choosing a physical house or office, there is no such thing as an absolute “best” or “top” choice. There’s only the right choice relative to your goals, experience, and circumstances.

What Is Duda?

On the wide spectrum of website building solutions, Duda lives on the end that is all-inclusive and provides everything you need to get started and grow your website. It contrasts with solutions where you buy, install, and manage all the “pieces” of your website (ie, domain name, hosting, software) separately.

Using Duda is sort of like leasing and customizing an apartment in a really classy development instead of buying and owning your own house. You’re still in control of decor, cleaning, and everything living-wise – but you leave the construction, plumbing, security, and infrastructure to the property owner. That point is key because there’s usually a direct tradeoff between convenience and control.

Everything may fit together just right with a website builder like Duda, but that may or may not be what you’re looking for.

As far as competition, Duda competes with all-inclusive website builders like Weebly, Wix, Squarespace, Gator, GoCentral, Jimdo, and WordPress.com.

Compared to their direct competition, they focus on speed, ease of use, and responsive design (again, web jargon for making your website mobile device-friendly). Duda offers several website templates you can customize, but it also allows you to build your own sections from scratch, making it a solid solution for both DIYers with zero website experience and those who consider themselves a bit more advanced.

Duda also skews its marketing toward agencies, digital publishers, and hosting companies with features like content import, PageSpeed optimization, site personalization, and more (but we’ll get to that later!).

One other quick aside – a disclosure – I receive referral fees from all the companies mentioned in this post. My opinions & research are based on my experiences as either a paying customer or consultant to a paying customer.

Pros of Using Duda Website Builder

Here’s what I found to be the pros of using Duda website builder — not just in comparison to popular builders like Weebly and Wix, but as an overall website solution.

Free Trial Plan

One of Duda’s biggest pros is that they let you try the platform, risk-free, for 30 days. You don’t even have to put a credit card when signing up — you just create an account and get building.

Duda Free Trial

Duda doesn’t restrict your access to any of the features they offer when using the free trial option — it’s as if you’ve bought a plan and are already up and running with them.

This is a great feature if you’re looking to test out a website builder before committing. The thing to keep in mind here though is that the free trial gives you the features of Duda’s mid-tier plan, which includes things like team functionality, content import functionality, etc.

Duda Free Trial Functionality

If you were to downgrade after your 30 days, you would lose those features. Not a big deal if you’re not using them, but could also be time wasted if you do use them and then have to make drastic changes to accommodate the new plan.

Straightforward Sign Up Process

Another pro of using Duda is how easy it is to get up and running on the platform. It’s basically just one step — enter your information to create your account, and you’re in! Again, if you’re using the free trial, you don’t even have to pull out a credit card.

This is great for DIYers who want to get up and running as quickly as possible without the hassle of creating a detailed account, selecting a niche, etc.

Simplicity + Flexibility

Duda is also seriously simple to use, which makes it hard to mess up your website design. Once you choose a template, entering your own content is super straightforward.

Duda Website Editor

But Duda also combines ease-of-use with flexibility by offering pretty extensive design options. For example, by clicking the “plus” sign, you can add new, pre-made sections to the templated pages you’ve selected.

Duda Add Section

Or, you can create your own section from scratch.

Duda Section Design

This makes Duda a great option for both DIY-ers who want something that’s easy to customize and those who want to add their own design elements without having to hire an experienced designer and developer to make it happen.

Product Integration + Functionality

Another benefit of Duda is their integrations. First, Duda offers hosting on AWS (Amazon Web Services), which can be both a pro and a con depending on where you fall on Amazon.

The pros are that your site can and will still go down (it’s inevitable), but if you’re down, then big brands like Uber, AirBnB, Amazon, Reddit, etc. are down too… which means whatever is causing the downtime is likely to be fixed very quickly. Your site also has access to the best security and storage and speed people in the world.

But the cons are that since your hosting is bundled with Duda, you can’t actually access your files except through Duda (*although Duda does provide a data export). There’s also a chance that pricing changes on the AWS side will affect pricing with Duda. And of course, there’s some people who just don’t want to buy from Amazon… so if you’re in that boat, Duda probably isn’t for you.

Aside from offering DNS and hosting services, Duda also offers some pretty advanced functionality built in to its platform, like access to your website’s HTML and CSS, eCommerce functionality, content import, etc.

Duda Customization

This additional functionality gives Duda a unique edge, because it builds in more control while still giving customers the convenience of an all-in-one platform. Typically, these types of website builders see a tradeoff between convenience and control, but Duda does a good job of giving you a decent dose of both.

Just remember that not all of these features are available with all plans, so make sure you do your research.

Team Integration

While this pro is only available with the mid-tier plan and higher, it’s a pretty solid benefit. Duda features the ability to work with your team on your website, which means you can leave comments on the design of the website for your team to review.

Duda Team Functionality

This is functionality is pretty nifty if you’re a small agency, business owner with a team, or even a solopreneur who wants a designer to build your site in Duda but YOU want an easy way to leave comments.

Cons of Using Duda

But of course, no review would be complete without looking at the downsides. Every piece of software will have complaints. Let’s look at the specific cons I found with using Duda as your website builder.

Pricing + Plans

While Duda has a lot of amazing features, they are on the pricier side, especially when you start comparing features across their plans. For example, if you wanted a basic plan, you only have access to email support, and if you were creating an ecommerce store with a basic plan, you could only have ten products.

Duda Pricing

When you dig a bit deeper, you can see that a good bit of functionality is reserved for Team and Agency plans, especially when it comes to Team Collaboration. And when it comes to Duda’s features that give you the most control over your website, like widget builder, website export, and API, those are reserved only for the Agency plan.

Free Trial

Related to pricing, another con of Duda is its free 30-day trial. Don’t get me wrong — having the ability to use Duda’s awesome features for 30 whole days is great! But as I mentioned above, the trial uses the Team plan… which means if you don’t want to pay a higher price point, you’re going to lose a few features and functionality when you move your website to the basic plan.

There also isn’t a free plan for those who just want a basic, short-term website that uses a subdomain. This isn’t a make-or-break con, but it just depends on what you’re looking for. If you need an ultra basic website builder for a short project, you may be better off with a different website builder that’s either less expensive or offers a free plan, no strings attached.

Company Structure

My team, my clients and I have seen and worked with a lot of different software companies. One thing that I’ve noticed over the years is that companies have to follow not only the demands of their current customers, but also the demands of their business model. A company might be “good” or “bad” right now, but to know how they’ll be in a few years, it pays to spend a couple minutes thinking about their business model and how they’ll evolve to meet customer and market demands.

For example, anyone who understands that Facebook’s customers are their advertisers, not their users, can understand how & why they do the things they do. There is no inherently “bad” or “good” business model. Every model has tradeoffs. It just pays to know where you, the customer, fit in the picture, especially when you are building something as critical to your business as your website.

Duda is a private, venture funded company. They are based in Silicon Valley with venture capital partners. They’ve done several fundraising rounds since 2010.

Duda Financials

Venture-funded companies typically want 1 thing – growth. Sure, they want to make money at some point, but that will usually be at the “liquidity event” (ie, a stock market IPO or company purchase) – not with quarter by quarter profits.

In fact, most venture-funded firms will deliberately lose money if that means growing their customer base. So what are the tradeoffs?

The huge upside is that Duda’s customers will probably get more features, better support, and cheaper pricing than they would otherwise get. The venture capitalists are subsidizing your awesome product.

The huge downside is that Duda’s business model could change (e.g., “pivot”) at any moment. They want customers and revenue – but they want to follow the growth of customers more than anything else.

A publicly traded  is solidly committed to their market strategy. A non-investor funded but private builder like InMotion’s Website Creator is responsive to the founder’s vision and customer demands.

Right now, Duda is serving all markets, including DIYers. But they say right on their homepage who they *really* want to serve –

Duda Market

If you are an agency or hosting company – this is great. And if you are building a short-term project, it’s great. But if you are planning a long-term site, you should keep in mind that their product development might shift away from DIY features and more to project management features.

Duda Review Conclusion

Duda certainly makes getting a website up and running easy, and when you factor in their advanced features that give you more control, it makes the platform a pretty solid website builder for small agencies and even DIYers who need something that’s easy-to-use but can also scale.

Check out Duda’s plans here.

However, like most all-inclusive website builders, there does come a point where there’s a tradeoff between convenience and control, especially when you factor in price. Duda’s pricing (and market positioning) leaves something to be desired, especially when you get into the higher priced plans.

If you’re looking for a website platform that has that many advanced features that allow you to control more of your site, you’d probably be better off with something like Wix for a drag & drop builder or using a self-hosted website builder like Website Creator or Weebly if you want an ecommerce component.

Not sure Duda fits your needs? Check out my quiz to find what the best website builder is for you based on your preferences.

The post Duda Website Builder Review: Pros, Cons, and Alternatives appeared first on ShivarWeb.

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Business Insurance For Startups: How Much It Costs And Why You Need It

Business Insurance For Startups: How Much It Costs And Why You Need It

If you are a startup business, you obviously have a lot to juggle. That said, business insurance should be a top priority as you move forward. Go ahead and Google “lawsuit and startup” (or maybe don’t if you’re panic-prone) and the news will run the gamut.

Even if you aren’t a doomsday type of buyer, there are many other reasons to be insured. Maybe you need to show insurance to your investors and clients before they’ll join you on your venture, or maybe you need to secure commercial property insurance to set up shop in a physical space.

Bottom line: You need insurance.

Even if your startup is a sole proprietorship or a limited liability company, the financial impact of a mistake or a lawsuit could cripple your startup or create a situation where your personal assets could be at risk. Why toss the dice?

Read further to see why you need insurance, what kind of insurance you might need, and the most cost-effective ways to secure insurance for your startup.

Why Startups Need Insurance

Business Insurance For Startups: How Much It Costs And Why You Need It

Startups need insurance for the same reasons that any business needs insurance: there are risks involved with starting and running a business, and a mistake or accident could permanently cripple your finances and your chances for success. Since startups, by nature, are new and innovative and often work with up-and-coming technologies, you may not even be able to imagine all the ways you could put yourself at risk. You need business insurance precisely because you’re wandering around in unfamiliar territory. Time spent worrying about potential pitfalls is time you could be using to build your business: insurance buys you fewer things to worry about.

Also, in some instances, business insurance might be legally required. (If you have even one employee, depending on where your business is located, you’ll need worker’s compensation as a minimum.) Lawsuits and angry customers — and perhaps even upset investors — may be part of your startup’s journey, and the best way to gain some confidence and assurance is to protect yourself.

You might need business insurance if you:

  • Have a physical storefront/location for your business
  • Rent business equipment or property
  • Use a car or a fleet of cars
  • Advertise or have an online social media presence
  • Employ people
  • Work with customers
  • Provide professional advice
  • Want to protect personal assets
  • Have investors in your company

In the discovery stage of your startup, you may not need as much insurance as you will later on when you are gaining momentum and adding employees and partners; however, it’s never to early to understand what you need and why.

8 Types of Business Insurance Startups Might Need

Business Insurance For Startups: How Much It Costs And Why You Need It

For a startup business, the types of business insurance to choose from can be long and tedious to understand. Each type of insurance protects a different aspect of your business and could be required based on business demographics like where you are located, how many employees you have, and what type of risk is involved in your startup.

While individual needs will vary, here are the basic types of business insurance startups should consider.

General Liability Insurance

General liability insurance covers your expenses should you go to court to defend an accident, an injury, or damage to property. Typically, your policy will pay for legal representation, litigation fees, out-of-court settlements, and judgments set by the court. Sometimes called “Slip and Fall Insurance,” general liability will also cover medical bills if a client is injured due to an accident at work. This is the foundational insurance policy that every business should have. Accidents happen and this basic coverage makes sure you won’t lose your business when they do. 

Commercial Property Insurance Or Business Owners Policy

If you own a commercial property, have a storefront, or have a physical location for your office, then you will need a commercial property insurance policy. This policy covers theft and damage done to your property through vandalism or wind, rain, snow. General liability insurance covers people and commercial property insurance covers things. There is also a Business Owner’s Policy (BOP) that joins commercial property and liability together in a bundle for extra savings.

Commercial Auto

Sometimes a startup will make the mistake of assuming that their personal auto insurance is enough to protect a car driven for work. However, it’s a known fact that even reputable insurance companies look for ways to avoid paying a claim. If you use your car for business or have employees out driving around for your business (especially if you have a commercial fleet of vehicles), you will need commercial auto insurance. Don’t assume your personal insurance is enough to cover a vehicle involved in an accident during business hours.

Professional Liability

This type of insurance policy is sometimes called malpractice insurance or errors and omissions insurance (E&O). If someone in your company makes a professional mistake (an error of judgment) or omits key information that impacts someone financially (an omission), people can sue you.

Startup businesses are in a state of flux as they establish themselves and might be more likely to inadvertently make a professional mistake. If your company is in the business of giving advice, professional liability protects you in the event that someone feels your advice was harmful, either to them personally or to their company. Thinking of professional liability insurance as malpractice insurance is the best way to understand the various ways people might try to find your company liable.

Cyber Liability

Twenty years ago, cyber insurance protection wasn’t even on the radar of business owners. But if your business has any type of online presence or if you use a database to store customer information, this provides an added layer of protection in the event that your website or database is hacked and personal information is leaked. When a hack occurs, there are many legal requirements related to communicating with customers and securing their identities in the aftermath. A cyber liability policy covers the financial fallout of a data breach.

Worker’s Compensation Insurance

If you have employees, you’ll need worker’s compensation insurance to cover you and your business in the event that an employee is injured on the job. General liability insurance will cover an injured customer or client, but an injured employee falls under a different umbrella of insurance — one that is a legal requirement. (As with most insurance policies, however, the legal requirements are state specific.) Workers compensation pays for medical and legal fees if your employees are injured at work.

Employment Practices Liability Insurance

Employment practices liability insurance protects you against a discrimination or wrongful termination lawsuit. Even if you can’t imagine one of your employees or startup partners making a claim of discrimination, it could happen, and the costs to defend yourself could become crippling.

The Equal Employment Opportunity Commission (EEOC) defines eleven different types of possible workplace discrimination: age, disability, equal pay, genetic background, nationality, pregnancy, race, religion, retaliation, sex, and sexual harassment. Employment Practices Liability Insurance helps protect your business in the case of a discrimination lawsuit.

Key Person Insurance

Key person insurance is a life insurance policy on the key person/owner of a business. If you die and your startup can’t function without you, what happens? (Insurance is fun to talk about at parties: Hey, let’s talk about all the accidents that could happen or the different ways people might sue you. Also, what if you die?) But also: what if you die? If someone’s brain and personhood is a big part of a startup’s success, then the startup may be able to insure that person’s life with the company as the beneficiary. If a key person in your startup passes, that insurance money can be used to pay off investors or keep the company from bankruptcy.

How Much Does Startup Insurance Cost?

Business Insurance For Startups: How Much It Costs And Why You Need It

Insurance costs will vary depending on the financial makeup of your company. Insureon analyzed its 18,000 policies of business insurance for companies with 10 employees or fewer and came up with the following numbers: the average cost for business insurance is $1281 annually with the median at $584.

What will affect your insurance costs the most? Well, not everything is in your control: you may need workers compensation as a legal requirement and general liability to work with contractors, but what else could lower or raise the average cost?

  • Your Business Size: What is the physical square footage of your business? What kind of space does it require? A larger space will require a larger policy.
  • Your Business Location: Where you are located will affect your premiums because some states are more accommodating than others toward small businesses and startups. Are you located in a state that is considered small business friendly or lawsuit friendly? Location also factors into other business risks like flooding, crime, and foot traffic.
  • Business Sales Reports: How much money do you make? The more money you make, the more insurance you’ll need. An actuary (someone who assesses your company’s risks) will look at your numbers and see how much you — or they — might stand to lose.
  • Your Business Industry: Some industries are built with more risk than others, and the insurance company will examine all the ins and outs of how your business operates to know the best ways to protect you.
  • Number Of Employees: More employees, more insurance costs.
  • Claim History: As with any insurer, the actuary will also look at your past business history and see if you have made any claims in the past.
  • Types Of Policies: The bigger your business, the bigger the policy. If you don’t have any employees and can stick with general liability, you will pay pennies next to a business that is working to protect employee incomes.

With so many factors specific to your own business, it’s important to check with an insurance professional to itemize your needs and the costs associated with each policy.

Ways To Save On Startup Insurance

As with all things in business, finding a cost-effective way to provide services is always at the forefront of a startup owner’s thoughts. Let’s be honest; money is on your mind. As a startup, you might be juggling how to finance your company and are noticing that sometimes loans require insurance. (Your lender wants to know you will be able to fund this asset; insurance gives confidence to lenders if you financing through loans or through grant money.) Maybe your investors require insurance or maybe you already understand its necessity for your peace of mind, and you want to get the cheapest insurance possible.

However, it’s important to understand that a cheaper policy may not be cheaper in the long run. If you start with a higher deductible and a lower limit, your monthly premiums may seem manageable, but one claim could put those entire savings at risk. At that point, you are banking on the best-case-scenario and still not effectively planning for the worst-case-scenario: a business risk.

Without going light on the coverage you need, here are a few ways you can try to save a few dollars:

  • Bundle Policies: Bundling your insurance policies will often save you money. Consider a business owner’s policy which combines both general liability and commercial property insurance.
  • Shop Around: The lowest quote may not always be the best deal in the long run if the company wouldn’t support you when you submit a claim. Research the carriers and their ratings. Five independent agencies (including Standard, Poor, and AM Best) rate the financial strength of an insurance company and you can use their services for free if you sign up for an account.
  • Choose A Higher Deductible: A deductible is the amount of money you will pay before your insurance kicks in. Choose a higher deductible and your premiums will go down. (Understand that one lawsuit or claim could eat up that whole deductible and may not be cost-effective in the long run; so be prepared to pay that deductible and crunch the numbers.)
  • Find Group Rates: Group rates might be available for your industry and if you can purchase insurance as part of a group, your premiums will go down.
  • Work With An Agent Who Specializes In Business: Not all insurance agents, brokers, or companies are created equally. And certainly, not all of them will understand the specifics of your industry. Go out and find someone who knows your business and can help you understand the
  • Pay Your Premium In Full: It may be cheaper to pay your premiums for the year in one lump sum rather than spread them out in 12 monthly installments.

Getting Started

Okay. Your startup needs insurance, that’s a given. You now have a general understanding of what policies you might need and how to save a few dollars insuring your business. What next?

There are many ways to get started. Check with your current insurance company to see if they offer commercial business plans. If so, see if it is cost effective to bundle your personal and business insurance policies. If not, go shopping. Many sites like Coverwallet, Coverhound, and Insureon will comparison shop for you and walk you through the steps required to make an insurance purchase.

Your startup needs protection. Don’t make the mistake of leaving yourself vulnerable for an attack when your company isn’t ready to handle the pressure or the financial fallout.

The post Business Insurance For Startups: How Much It Costs And Why You Need It appeared first on Merchant Maverick.

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How Long Does It Take To Improve My Credit Score?

A low credit score can be the bane of any business owner. Without a solid credit score, your business may be unable to qualify for competitive loans or good credit cards, ultimately costing you money in the long term. Unfortunately, it isn’t always clear how long it will take for you to rebuild your score after something damaging has happened.

Thankfully, two of the largest companies that calculate credit scores (VantageScore and FICO) have discussed timeframes for credit score recovery. Because these companies offer slightly different ways to tabulate your credit score, their statements about the timeframe for recovery from a negative action are also different.

Want to know how long it may take your credit score to recover from various negative actions? Our guide below has you covered!

Credit Score Recovery Timeframes

Determining how long your credit score will be negatively threatened by an action depends on the severity of the action. Based on information from VantageScore, a company that produces a credit score model, minimal negative actions will pose a 10% to 30% impact on your score, while moderate ones impact up to 50%. Major actions can affect up to 90% of your score.

Several actions cause minimal impacts to your credit score. These are—in order of most to least severe—maxing out a credit card, closing an account, and obtaining a new line of credit. According to VantageScore, any of these actions will take around three months to recover.

However, if you miss a payment or default on a loan, the impact to your credit score will be moderate. It will require roughly a year-and-a-half before you recover.

The worst action that can impact your credit is filing for bankruptcy. Doing so has a major negative impact on your score. It will take between seven and 10 years to fully recover.

FICO, another analytics company that calculates credit scores, offers slightly different information. Their recovery timeframes depend on the user’s starting credit score.

For instance, for someone starting with a credit score of 680, it will take nine months to recover from a missed mortgage payment. Someone else with a score of 720 may need around three years, while a person with a score of 780 will not recover that score for three to seven years.

For a short sale, deed-in-lieu, settlement, or foreclosure, those with a score of around 680 will take three years to recover. Those with higher scores will take around seven years.

When it comes to bankruptcy, a starting score of 680 will take approximately five years. Those with higher scores will take between seven and 10 years to recover.

Changing A Credit Score Quickly

free credit score monitoring service

While it usually takes a while for your credit score to change for the better, there are a few things you can do to improve it rapidly.

If you find yourself with a hefty credit card balance, paying it off can give your credit score a boost. Similarly, receiving a credit line increase can also improve your score. Both these actions directly impact your credit utilization—one of the key components of your credit score. Credit utilization, which is the ratio between the amount of credit you’re using and the amount you have available, makes up 30% of your overall credit score so freeing up space can give your credit a much-needed shot in the arm.

Additionally, if you notice an error on your credit report history, it may be worth disputing it. Should you win your dispute, you could receive a quick bump to your credit score. Of course, the entire dispute process might take well over a month before everything is all said and done. If you want to find out more about disputing a credit report, check out the Merchant Maverick guide.

Monitoring Credit Scores

When you’re working on improving your credit score, knowing how to monitor changes is crucial. Luckily, there are several websites that make it both easy and free to do so.

Some of the best names in the business include Credit Karma, Discover Credit Scorecard, and WalletHub. Each of these sites will provide you with a basic credit score. However, because each site pulls its information and calculation models from different sources, you may find it’s best to check your scores across multiple sites.

You’re also able to request a free credit history report from each of the three major credit bureaus every year. While these reports won’t give you a simple credit score, they will show your complete credit history. This can be helpful in spotting errors, and you can also better understand what potential creditors might be looking at in the future.

To find out more about credit score tracking, visit our article on the best credit score websites.

Final Thoughts

For the most part, improving your credit score is about patience. You may not be able to turn it around overnight, but through smart planning and diligent credit use, you’ll be well on the road to increasing your score. Once your score rises, you’ll be able to apply for better credit cards and lower-interest rate loans, letting your business build at a faster pace.

If you’re looking at a less-than-stellar credit score, check out this guide to improving personal credit. For those wanting to use a credit card to boost their credit, we’ve got a guide for that, too.

The post How Long Does It Take To Improve My Credit Score? appeared first on Merchant Maverick.

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Top Credit Cards For Subprime Borrowers

When you’re stuck with a subprime credit history, getting out of the rut can be difficult. You might wind up having to apply for loans or credit cards. As a business owner, both these tools can be crucial to running and improving your company.

Luckily, many credit card issuers have designed specific cards for subprime borrowers. These cards provide the chance to rebuild your credit and get your business back on track — and if you lack a credit history entirely, you’ll be able to develop your credit from scratch.

We’ve broken down our favorite subprime credit cards, both for business and personal use. Get the full picture below!

Credit Card Card Type Required Credit
Wells Fargo Business Secured Credit Card Secured/Rewards Bad
BBVA Compass Business Secured Credit Card Secured/Rewards Bad
Capital One Spark Classic for Business Cash back Fair
Credit One Bank Platinum Visa for Rebuilding Credit Cash back Bad
Discover it Secured Secured/Rewards Bad
Green Dot primor Visa Gold Secured Credit Card Secured Bad

What Are Subprime Credit Cards?

Subprime is a term used to describe the credit of a consumer who either lacks a credit history or has damaged their credit in some way. Subprime credit cards are aimed at users who have subprime credit histories. (A prime credit status is assigned to those with a good credit history, while superprime is reserved only for people with excellent credit.)

In many—although not all—cases, subprime credit cards are also secured cards. Secured cards require that users place down a deposit before using the card. As a general rule of thumb, the amount deposited will equal the amount of available credit.

Average Interest Rate On Subprime Credit Cards

Because subprime credit cards are targeted towards potentially riskier users, the interest rates (also known as APR) are usually higher than on a standard card. The average APR for a credit card aimed at those with bad credit will often sit around 20% or above. This rate will vary depending on the current prime rate published in the Wall Street Journal.

Penalty APRs for late payments on subprime cards vary, although it’s not uncommon to see rates above 30%. A few cards, however, actually feature no penalty APR, something that could be beneficial for a business stuck in a financial hole.

Depending on the situation, you may be able to qualify for a lower APR, though this might be out of reach if you already have a bad credit history. If you qualify for a better rate, you may want to check out credit cards for those with good credit instead.

Advantages & Disadvantages of Subprime Credit Cards

By signing up for a subprime credit card, you’ll be able to help build up your credit—as long as you follow good credit card practices. Once you build up enough credit, you’ll be able to eventually graduate to better cards. You can also use a subprime card to get in the habit of paying off a monthly balance.

However, there are plenty of negatives to subprime credit cards. To start, many of them offer minimal or no rewards. They also frequently lack bonus offers or zero interest rate periods. This means that you won’t be able to earn money by using your card.

These cards may also include higher-than-average APRs. A high APR can be especially problematic if you need extra time to pay off an expensive balance. As long as you pay your bill on time and in full, however, you won’t need to worry about a high APR.

In many cases, subprime users may only be able to qualify for a secured card. Secured cards can be especially annoying because you’ll need to place down a security deposit before using the card.

It’s worth noting that these negatives exist because subprime users are marked as risky candidates. As such, issuers will attempt to minimize their losses by making penalties higher and/or rewards lower. The good news is that once you’ve successfully improved your credit history with a subprime card, you’ll be considered a less risky user—letting you apply for cards with better rewards and lower rates.

Top Business Credit Cards For Subprime Borrowers

Business-specific cards can be an excellent choice for businesses. These cards often offer features not included in personal cards, including employee cards and reward schemes built around how most businesses spend money. While there aren’t many business cards targeted at subprime borrowers, there are a few that can help improve or build your credit history.

Here are our top subprime credit cards for business borrowers:

Wells Fargo Business Secured Credit Card

Wells Fargo Business Secured Credit Card

business credit cards fair credit
Compare

Annual Fee:

$25

 

Purchase APR:

Prime + 11.90%

Required credit: Poor

Bonus offer: None

Purchase intro APR: N/A

Balance transfer intro APR: N/A

Foreign transaction fee: None

Rewards:

If you choose cash back rewards:

  • Unlimited 1.5% cash back on net purchases
  • Receive cash back automatically as a credit to your account or to an eligible checking or savings account each quarter

If you choose reward points:

  • 1 point for every dollar spent on net purchases
  • 1,000 bonus points when your company spends $1,000 in a billing period
  • Redeem points for gift cards, merchandise, airline tickets, and more
  • 10% bonus if you redeem points online
  • Extra bonus points or discounts from Earn More Mall retailers

Notable perks & benefits:

  • Up to 10 employee cards
  • Zero liability on unauthorized card usage
  • Purchase assurance coverage against theft
More card details (click to expand)
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Because this is a secured card, you’ll need to place down a deposit in order to use Wells Fargo’s subprime card. Your deposit must be at least $500 and you can place down up to $25,000, a higher cap than most secured cards on this list.

This card features an interesting rewards scheme: you can choose to either earn one point for every $1 spent or get 1.5% cash back. If you select the points option, you’ll get a bonus 1,000 points once you break the $1,000 spending mark every month. This means that if you spend under $1,000 or over $2,000 monthly, the cash back option might be best; otherwise, the points option will be the best bang for your buck.

Note that while Wells Fargo advertises that the card does not come with an annual fee for the rewards program, every card costs $25 per year. However, there are no foreign transaction fees and the APR is relatively low compared to other secured cards on this list.

Want to learn more about the Wells Fargo Business Secured Card? Check out Merchant Maverick’s complete review.

BBVA Compass Business Secured Credit Card

BBVA Compass Secured Visa Business Credit Card

business credit cards fair credit
Compare

Annual Fee:

$40 ($0 the first year)

 

Purchase APR:

18.49%, Variable

Required credit: Bad, Fair

Bonus offer: None

Purchase intro APR: N/A

Balance transfer intro APR: N/A

Foreign transaction fee: 3%

Rewards:

  • 1% cash back on all purchases

Notable perks & benefits:

  • Free employee cards
  • Travel and emergency service
  • Option to enroll in Visa SavingsEdge and save up to 15% off  purchases at participating merchants

Note: This card is only available in Alabama, Florida, Texas, Arizona, Colorado, California, and New Mexico

More card details (click to expand)
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Another secured card, BBVA offers a second solution for struggling businesses. Unfortunately, this card is only available in Alabama, Florida, Texas, Arizona, Colorado, California, and New Mexico, which could eliminate many potential applicants. Additionally, you’ll need to apply in-person in order to sign up for this card.

Like Wells Fargo’s offering, BBVA’s card requires a minimum deposit of $500. You’ll then be able to make deposits at any time in $100 increments. Additionally, you’ll need to pay a $40 annual fee, although that’s waived the first year.

This card does feature a basic rewards program that dishes out one point per $1 spent on every purchase. You’ll then get two-times points on gas station and restaurant purchases and three-times value on office supply purchases.

As a plus, employee cards are free — and the APR for the BBVA card is right around average for secured cards. You’ll also be entitled to Visa’s business benefits program, which covers a damage waiver for car rentals, purchase security to protect against theft or damage, extended warranty, and emergency travel services.

Capital One Spark Classic for Business

Spark Classic From Capital One

Compare

Annual Fee:

$0

 

Purchase APR:

25.24%, Variable

Required credit: Fair

Bonus offer: None

Purchase intro APR: N/A

Balance transfer intro APR: N/A

Foreign transaction fee: None

Rewards:

  • Unlimited 1% cash back on all purchases

Notable perks & benefits:

  • Free employee cards
  • Fraud coverage and alerts
  • Capital One and Visa business benefits
More card details (click to expand)
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This cashback card from Capital One could be a great option for businesses operating with average credit. With the promise of 1% back on every purchase and no annual fee, you will be earning money with this card from the get-go. Plus, unlike the above two cards, this is not a secured card so you won’t need to worry about putting down a deposit.

Spark Classic’s APR is unfortunately high compared to the other cards on this list, but it comes with no foreign transaction fees. You’ll also gain access to Visa’s business benefits program, which includes a damage waiver for car rentals, purchase security to protect against theft or damage, extended warranty, and emergency travel services.

Do note, however, that this card is aimed at users with fair or average credit. As such, if you have poor or bad credit, this card may not be for you. It still makes an excellent choice, though, if your business is in the process of rebuilding credit and can’t quite score one of those top-tier cards yet.

Take a deep dive into the Capital One Spark Classic for Business with our full-on review.

Top Personal Credit Cards For Subprime Borrowers

If none of the business credit cards work for you, using a personal card for business purchases is also an option. You won’t always be able to obtain employee cards if you go this route, nor will you be likely to earn rewards targeted at business use. However, personal credit cards can still help you build up your credit history.

Here are our top picks for subprime personal credit cards:

Credit One Bank Platinum Visa for Rebuilding Credit

Credit One Bank Unsecured Platinum Visa

Compare

Annual Fee:

$0 – $99 ($0 – $75 the first year)

 

Purchase APR:

20.24% – 26.24%, Variable

Required credit: Poor

Bonus offer: None

Purchase intro APR: N/A

Balance transfer intro APR: N/A

Foreign transaction fee: $1 or 3% (whichever is higher)

Rewards:

Based on your credit worthiness, you will receive:

  • 1% cash back on eligible gas, groceries, cell phone services, Internet services, and cable and satellite TV service; or
  • 1% cash back on eligible gas, groceries, restaurant purchases, mobile phone services, Internet services, and cable and satellite TV services; or
  • 1.1% cash back on eligible restaurant purchases and 1% cash back on other eligible purchases; or
  • 1% cash back on eligible purchases

Notable perks & benefits:

  • Free online access to your monthly Experian credit score and credit report summary
  • Automatic account reviews for credit line increase opportunities
  • $0 fraud liability on unauthorized purchases
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If your business is looking to rebuild credit card without resorting to a secured card, this option from Credit One Bank could work. It features a simple 1% cash back rewards scheme that dishes out money for eligible purchases.

You can also take advantage of viewing your Experian ScoreX credit score every month—a great tool while you’re still improving your credit history. You’ll further be able to take advantage of various Visa benefits, including $0 fraud liability, travel insurance, and shopping discounts. Credit One Bank will monitor your credit report to automatically boost your line of credit, although a fee may apply.

Do note that this card’s APR sits towards the upper end when considering the other cards listed. You may also have to pay an annual fee. During the first year, the potential annual fee ranges from $0 to $75; the range for later years goes from $0 to $99 per year. Foreign transaction fees aren’t waived and you’ll need to pay either $1 or 3% of each purchase.

Visit the Merchant Maverick review for the full picture on the Credit One Platinum Visa.

Discover it Secured

Discover it Secured

Compare

Annual Fee:

$0

Purchase APR:

24.99%, Variable

Required credit: Poor

Bonus offer: All the cash back you earn during your first year will be matched by Discover, automatically and without a limit

Purchase intro APR: N/A

Balance transfer intro APR: 10.99% for the first 6 months

Foreign transaction fee: None

Rewards:

  • 2% cash back at gas stations and restaurants (up to $1,000 in combined purchases each quarter)
  • 1% cash back on all other purchases

Notable perks & benefits:

  • Free Social Security number alerts
  • Access to your FICO Credit Score for free
  • $0 fraud liability on unauthorized purchases
More card details (click to expand)
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In terms of personal secured credit cards, it’s hard to beat the Discover it. This card packs in an excellent rewards scheme when compared to other secured cards: you’ll net 2% cash back for every gas station and restaurant purchase and then 1% back everywhere else. On top of those base rewards, Discover will match your cash back total at the end of your first year, effectively giving you 4% back at gas stations and restaurants, and 2% back everywhere else.

Discover does offset that excellent rewards scheme with a hefty APR, however. Of course, if you are successfully using the card to boost your credit history, the APR rate shouldn’t really matter to you. You’ll also want to note that the card requires a minimum $200 deposit with a maximum of $2,500. This deposit is refundable.

Back on the plus side of things, there is no annual fee, nor is there one for foreign transactions. Additionally, you’ll be able to see your FICO credit score on every monthly statement for free. There are additional security benefits, including $0 fraud liability, free notifications if your Social Security number shows up on a risky website and free overnight shipping for a replacement card to any U.S. street address.

Green Dot primor Visa Gold Secured Credit Card

Green Dot primor Visa Gold Secured Credit Card


Compare

Annual Fee:

$49

 

Purchase APR:

9.99%, Fixed

Required credit: No credit score requirements

Bonus offer: None

Purchase intro APR: N/A

Balance transfer intro APR: N/A

Foreign transaction fee: 3%

Rewards: None

Notable perks & benefits:

  • Auto rental insurance
  • Zero fraud liability
More card details (click to expand)
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This card from Green Dot Bank is a basic secured card with no rewards scheme. However, it still includes a few nifty benefits. The highlight is the card’s low APR of 9.99%. This is far lower than any other card on this list and it’s also one of the lowest rates you can get on any card—secured or not.

Green Dot Bank enforces no minimum credit score requirement. This makes the card an excellent choice if you lack a credit history, or if your score is incredibly low. Your activity on this card will be reported to all three credit bureaus, helpful for making sure your credit history is properly documented so it can improve. Plus, depending on how much you deposit, your credit line has a wide range of variance, from $200 to $5,000.

However, this card will cost you $49 every year due to its annual fee. You’ll also be charged 3% for each foreign transaction.

Final Thoughts

Trying to rebuild broken credit or create a credit history from scratch can be frustrating. Thankfully, though, there are credit cards out there that can help you out. By staying on top of payments and utilizing your credit properly, you’ll be well on your way to improving your credit score.

If credit cards won’t help you in your current situation, a small business loan might help. You can also look at loans that work for startups.

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How To Find Your Business EIN Number

EIN

Tax season is upon us, and if you are a small business owner, there is a good chance that you will need your Employer Identification Number (EIN) to file business taxes. For example, if you have an EIN for the first time this year, or are using a new CPA or service to file your business taxes, you will need to bring your EIN and other information to your accountant when you file your business taxes. There are also various other reasons you might need your EIN, such as to open a business bank account, open an online store, or apply for business financing. If you have misplaced your EIN, or aren’t sure if you even have one, you have come to the right place! Read on to learn what an EIN is, how you can find your EIN, and how you can apply for an EIN if you don’t already have one.

What Is An EIN?

An EIN (also sometimes called a “business tax ID number”) is a unique 9-digit number that identifies your company, similar to the way your social security number represents your personal identity. Specifically, your EIN identifies your business to the IRS. However, in addition to IRS-related filings such as business taxes, you might also need your EIN to apply for a business license, apply for a business loan, or open a business bank account.

The IRS requires most, but not all business types to have an EIN. For example, most sole proprietors and LLCs with no employees are not required to have an EIN and can instead use their social security number as their taxpayer identification number. As the name indicates, employer ID numbers are required for companies that employ people; if you have employees, then you need an EIN. Even if you are not required to have an EIN, you may opt to get one in order to establish your business as its own entity, separate from your personal identity. For example, having an EIN can help you establish your business credit profile so you won’t have to use your personal credit for your business.

How To Find Your EIN

If you have applied for and received an EIN in the past, then it shouldn’t be too difficult to find it. You’ll just have to do a little digging.

Method 1: Check Your Business Documents

Your EIN can be found on many of your important business documents, whether you have physical or virtual copies of these items. You should have the easiest time finding your EIN on your EIN confirmation letter from the IRS, and on your previous business tax returns.

Here are some documents where you can find your EIN:

  • Your EIN Confirmation Letter — The document the IRS issued when you originally applied for the EIN
  • Previously filed business tax returns — Your EIN should appear prominently at the top of your federal return
  • Your business credit report
  • Business licenses or permits
  • Business bank statements
  • Other tax filings, such as 1099 forms issued to independent contractors
  • Old business loan applications
  • Any tax notices from the IRS

Method 2: Run Your Business Credit Report

Okay, so let’s say you don’t have any copies of the above documents on-hand and you need your EIN, ASAP. Another option is to run your business credit report online and get your EIN that way. This is not free, but it’s a quick and easy way to get your EIN (or another company’s EIN), and it’s a good idea to check your business credit report from time to time anyway.

The three major business credit scoring agencies are Dun & Bradstreet, Equifax, and Experian. Equifax and Experian are more appropriate for smaller, less-established companies, and Experian offers the cheapest business credit report at $39.95.

Method 3: Call The IRS

You can also get your EIN by simply calling the IRS and asking them for it. Just keep in mind that they might have you on hold for a long time. From the IRS’s website:

Ask the IRS to search for your EIN by calling the Business & Specialty Tax Line at 800-829-4933. The hours of operation are 7:00 a.m. – 7:00 p.m. local time, Monday through Friday. An assistor will ask you for identifying information and provide the number to you over the telephone, as long as you are a person who is  authorized to receive it. Examples of an authorized person include, but are not limited to, a sole proprietor, a partner in a partnership, a corporate officer, a trustee of a trust, or an executor of an estate.

Method 4: Ask Someone Else

IRS hold times too long? Call someone else who might know your EIN.

Here are some people who should be able to look up your EIN and give it to you over the phone:

  • Your account manager at the bank where you do your business banking
  • Your accountant (or you can consult your accounting software)
  • Your CPA
  • Any organization that you have a business license or permit from

Method 5: Use Other EIN Lookup Options

There are a few other places where you should be able to look up your EIN online:

  • Your online account with the bank where you do business
  • For publicly traded companies, the SEC’s online database
  • For nonprofits, the free Melissa database

As a last resort, you could also try a paid EIN database, but I would only recommend this if you’ve exhausted all other options. And if you’ve gone through all the other options and still can’t find your EIN, well … are you sure you even have an EIN?

Don’t Have An EIN? Here’s How To Get One

If you’ve read all the way to the end of this post without finding your EIN, odds are that you probably don’t have one. Or, you may have discovered that although you have an EIN, you need to apply for a new one. This may be the case if your ownership or business structure has changed, or you are subject to a business bankruptcy proceeding.

Fortunately, an EIN is actually pretty easy to apply for and obtain.

As long as your company is located inside the United States or a U.S.-owned territory and you have a taxpayer ID number such as your SSN or ITIN (Individual Taxpayer Identification Number), you can apply for an EIN on the IRS’s website.  The application is short and sweet, and you will receive an EIN immediately upon successful form completion and validation of your information.

Note that while you will receive your EIN immediately online, it will take up to two weeks before your EIN becomes part of the IRS’s permanent records. You will have to wait until this happens before you can use your EIN to file an electronic tax return, make an electronic payment, or pass the IRS Taxpayer Identification Number matching program.

The IRS’s online EIN assistant is secure, but if you’re not comfortable submitting sensitive info online, you can download a PDF of Form SS-4 (also from the IRS’s website) and apply via snail mail.

Final Thoughts

For just about any business owner, an Employer Identification Number, or EIN, is a very useful thing to have. It’s useful for completing various legal tasks related to your business, such as filing taxes. You also need an EIN to build your business credit profile or apply for a business loan.

If you already have an EIN and need it in a hurry, don’t panic; it shouldn’t be too difficult to find. If you need to apply for an EIN, either for the first time or because you need a new EIN, this is also a quick and easy process. Once you have an EIN or have rediscovered it after doing some digging, please keep track of it because it will likely only be a matter of time before you need to retrieve it again.

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Lowe’s Credit Card Review: All The Business And Personal Credit Cards Offered By Lowe’s

Does your business buy at Lowe’s frequently? Or perhaps you require a lot of hardware store shopping? Then one of the home improvement store’s branded credit cards may work for you.

With five options — all sharing the promise of discounted purchases — Lowe’s has built a strong stable of cards. Depending on your business, one may be right for you while other owners might pick something different.

Curious which Lowe’s card is right for you? Keep reading to find out!

Card Name Best For
Lowe’s Advantage Card Businesses that don’t need employee cards
Lowe’s Business Account Credit Card Small businesses
Lowe’s Accounts Receivable Business Credit Card Medium to large businesses
Lowe’s Business Rewards Card Businesses looking for a full credit card
Lowe’s PreLoad Card Businesses that don’t want to undergo a credit check

Lowe’s Advantage Card

Lowe’s Advantage Card

Lowe’s Advantage Card
Compare

Annual Fee:

$0

 

Purchase APR:

26.99%, Variable

Suggested credit: Fair

Bonus offer: None

Purchase intro APR:  N/A

Balance transfer intro APR: N/A

Foreign transaction fee: None 

Rewards:

  • 5% off eligible Lowe’s purchases

Other Benefits: 

  • Special, 6-month financing on purchases above $299
  • Reduced financing options on purchases above $2,000
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Technically a personal card, the Lowe’s Advantage Card is a simple store-branded card offered in conjunction with Synchrony Bank. This no-annual-fee card features a 5% discount on eligible purchases at Lowe’s. Note that the 5% discount cannot be used in tandem with coupons, price-matching, or various discounts, including military and employee.

If you’d rather have special financing instead of the 5% discount, Lowe’s offers two ways to opt out of the discount and into special financing. The first way lets you nab six months 0% APR on purchases above $299.

The second way enables you to receive special financing on purchases above $2,000. The APR changes based on how many payments you plan to make:

  • 36 fixed monthly payments at 3.99% APR
  • 60 fixed monthly payments at 5.99% APR
  • 84 fixed monthly payments at 7.99% APR

If you choose either financing option, the 5% discount will be voided. That means you’ll want to use a financing route only when necessary.

Beyond its benefits, this card can only be used at Lowe’s; you won’t be able to buy items from other stores. Additionally, its base APR is relatively high, which could be something to watch out for.

Lowe’s Business Account Credit Card

Lowe’s Business Account

Lowe’s Business Account
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Annual Fee:

$0

 

Purchase APR:

16.99%* or 21.99%**, Variable

*Georgia & North Carolina, **Everywhere else

Suggested credit: Fair

Bonus offer: None

Purchase intro APR:  N/A

Balance transfer intro APR: N/A

Foreign transaction fee: None 

Rewards:

  • 5% off eligible Lowe’s purchases

Other Benefits: 

  • Exclusive cardholder promotions
  • Discounted delivery in-store and online
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Just like with the Advantage Card, Lowe’s Business Account Credit Card offers 5% off every eligible purchase you make at Lowe’s. However, unlike the Advantage Card, there are no financing options.

On the flip side, you do gain access to various cardholder promotions. There are also discounted delivery options for both in-store and online orders. As an additional bonus, you won’t need to worry about an annual fee.

Lowe’s further offers an online portal to view details about your account. This portal will let you pay online and view both prior statements and past activity. You’ll also be able to request credit line increases and download up to six months of account activity to Excel, CSV, QuickBooks, or Quicken.

Lowe’s Accounts Receivable Business Credit Card

Lowe’s Accounts Receivable

Lowe’s Accounts Receivable
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Annual Fee:

$0

 

Purchase APR:

5% – 18%*, Variable

*APR depends on state of residence

Suggested credit: Fair

Bonus offer: None

Purchase intro APR:  N/A

Balance transfer intro APR: N/A

Foreign transaction fee: None 

Rewards:

  • 5% off eligible Lowe’s purchases

Other Benefits: 

  • Request cards for authorized buyers
  • Exclusive cardholder promotions
  • Discounted delivery in-store and online
  • Purchase protection against theft or damage
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Lowe’s Accounts Receivable Business Credit Card is very similar to the Business Account card; you’ll collect 5% off every eligible Lowe’s purchase without any special financing options. You’ll get some of the same benefits, too. These include cardholder promotions and discounted delivery on both in-store and online purchases. There’s also no annual fee.

Beyond the 5% discount, however, it does include a few more features. You’ll be able to establish and link accounts to one another in a secondary-parent relationship. You’ll further be able to request and manage authorized buyers, a solid extra for businesses looking to give cards to employees.

Lowe’s also sets you up with in-depth billing features. You’ll be able to track payments, view the details of transactions, and consolidate all statements for all linked accounts. The online portal further lets you request credit line increases and download up to six months of activity to Excel, CSV, Quickbooks, or Quicken.

Lowe’s Business Rewards Card From American Express

Lowe’s Business Rewards Card from American Express


Compare

Annual Fee:

$0

 

Purchase APR:

17.99% – 26.99%, Variable

Suggested credit: Good, Excellent

Bonus offer: 5,000 Lowe’s Business Rewards Points after you spend $100 in purchases within your first 30 days


Purchase intro APR: 0% APR for the first 6 months

Balance transfer intro APR: N/A

Foreign transaction fee: 2.7%

Rewards:

  • 3 points per $1 spent at U.S. restaurants and office supply store, and on wireless telephone services purchased directly from U.S. service providers
  • 2 points per $1 on Lowe’s purchases
  • 1 point per $1 on all other purchases
  • 5% off eligible Lowe’s purchases

Other benefits:

  • Employee cards
  • Discounted delivery and bulk rate pricing
  • Extended warranty up to 2 additional years
  • Purchase protection against theft or damage
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The only fully-fledged credit card on the list, Lowe’s Business Rewards Card from American Express offers a way to earn while spending at Lowe’s, as well as with other merchants. You’ll net three points per dollar spent at US restaurants and office supply stores, and on wireless telephone services purchased from US-based service providers. Lowe’s purchases collect two points per dollar while everything else scores one point per dollar.

Points earned with this card can be redeemed for either Lowe’s or American Express gift cards.

On top of the points scheme, you’ll still get the 5% discount when shopping at Lowe’s, discounted delivery, and bulk rate pricing. You’ll also net 5,000 bonus points when you spend $100 in your first 30 days. The card further offers no interest on purchases during your first six months.

There are standard credit card benefits, too. These include employee cards, extended warranty for up to two years, purchase protection against theft and damage, and travel insurance. This card comes with no annual fee, although foreign transactions tack on a 2.7% charge.

Lowe’s PreLoad Card

Lowe’s PreLoad Card

Lowe’s PreLoad Card
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Annual Fee:

$0

 

Purchase APR:

N/A (this is a pre-loaded card)

Suggested credit: N/A (no credit check required)

Bonus offer: None

Purchase intro APR:  N/A

Balance transfer intro APR: N/A

Foreign transaction fee: None 

Rewards:

  • 5% off eligible Lowe’s purchases

Other Benefits: 

  • Employee cards
  • Access to budget control software
  • Zero liability for unauthorized purchases
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If you’re worried about a credit check, Lowe’s offers their PreLoad Card. This card requires no credit check when signing up. Note that this means it is not an actual credit card; instead, it’s a preloaded card that you top up by adding money to it via a debit, a credit, or a checking account.

Even though it’s not a credit card, you’ll still receive the 5% discount when you shop at Lowe’s. You can also issue cards to employees or subcontractors at any time. Money can be added to employee cards via an online tool that also tracks and allows you to budget employee spending.

While it doesn’t come with many of the standard credit card features, you will have access to Discover’s zero liability policy. This protects you against unauthorized charges when reported promptly.

How To Qualify For A Lowe’s Credit Card

For three basic store cards, you’ll likely want to have fair (also known as “average”) credit or better before applying. That means you’ll need to aim for a credit score of 580 or higher. The Rewards Card from American Express, meanwhile, likely requires a good score or better. For this card, shoot for a score of 680 or higher. The PreLoad card does not require a credit score.

Unsure of your credit score? Find out by visiting one of our favorite (and free!) credit-score-checking sites.

You’ll also need to be a US resident and at least 18 years of age. You can apply online and in-store.

Which Card Should I Get?

Lowe’s aims their cards at different types of customers. As such, what works for one business may not work for yours. Here’s a quick rule of thumb to help you decide:

  • If you are a very small business with no employees, then go with the Lowe’s Advantage Card.
  • If your business is slightly larger but doesn’t require your employees to have a store card, the Lowe’s Business Account Credit Card should be enough.
  • If your business is large enough that your employees need cards, then the Lowe’s Accounts Receivable Business Credit Card should work for you.
  • Businesses that are looking for a card that not only earns Lowe’s rewards but can also be used elsewhere will need to apply for the Lowe’s Business Rewards Card from American Express because that’s the only full-fledged card Lowe’s offers.
  • Businesses that want to avoid a credit check will need to sign up for the Lowe’s PreLoad Card.

The post Lowe’s Credit Card Review: All The Business And Personal Credit Cards Offered By Lowe’s appeared first on Merchant Maverick.

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The Best Business Loan And Financing Resources For Michigan Small Businesses

The state of Michigan has one of the fastest growing economies in the nation, a welcome relief to residents following the fallout from the 2009 recession. Cities like Detroit are bouncing back from this bleak period, unemployment is lower than it was in the early 2000s, and more people are opening or moving their companies to Michigan.

Michigan is ranked top in the nation for auto manufacturing, and other industries are emerging throughout the state. This includes cybersecurity, defense, aerospace, and agribusiness. Michigan is earning a reputation as one of the most business-friendly states in the nation.

It isn’t just large companies that are headquartered in the state, either. More residents are opening their own small businesses to pave the path for a successful future. If you’re reading this, you’re one of those entrepreneurs … or the thought of business ownership has at least crossed your mind. One of the most important factors in owning and operating a successful business is having access to capital and resources. Fortunately, the state of Michigan has many opportunities for business owners — whether you’re just getting started or you own an established business.

In this post, we’ll take a look at the funding opportunities open to Michiganders. From national online lenders to local credit unions, nonprofit lenders, and startup resources, we’ll cover it all to help you get the capital you need to start or grow your small business.

Online Business Lenders For Michigan Businesses

The internet has made our personal and business lives easier than ever, so it should come as no surprise that you can get capital for your business straight from your computer. Online lenders make it quicker and easier to receive business financing.

Not only is the lending process so much more convenient, but online lenders typically have less stringent requirements for qualifying. For example, getting a bank loan is difficult, even for established businesses owned by people with high credit scores. But many online lenders will approve borrowers with less-than-perfect credit scores and histories, newer businesses, and businesses that aren’t bringing in high revenues just yet.

Many online lenders provide capital to small business owners in Michigan, but you can start your search for capital with these options:

Lendio

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  • Time in business: 6 months
  • Business revenue: $10,000 per month
  • Personal credit score: 550
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The loan aggregator Lendio lets you shop your financing options without spending hours filling out applications. Lendio has over 75 lending partners in its network – lenders you can reach with just one application.

Through Lendio, you can apply for the financing you need for your business, including:

  • Small Business Administration (SBA) Loans: $50,000 to $5 million
  • Term Loans: $5,000 to $2 million
  • Short-Term Loans: $5,000 to $200,000
  • Lines Of Credit: $1,000 to $500,000
  • Credit Cards: $1,000 to $500,000
  • Equipment Financing: $5,000 to $5 million
  • Commercial Mortgages: $250,000 to $5 million
  • Accounts Receivable Financing: Up to 80% of receivables
  • Startup Loans: $500 to $750,000
  • Merchant Cash Advances: $5,000 to $200,000

Borrower requirements, rates, and terms are based on a number of factors, including the type of financing you receive, the lender you work with, and your creditworthiness and/or business performance. Turnaround times also vary, but you may be able to receive funding in as little as 24 hours. Filling out an application to receive offers through Lendio’s network has no impact on your credit score. However, a hard pull on your credit may be performed once you select a lender offer to pursue.

OnDeck

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  • Time in business: 12 months
  • Business revenue: $100,000 per year
  • Business industry: Must not be in a restricted industry
  • Personal credit score: 600
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OnDeck offers small business owners two financing options: term loans and lines of credit.

With an OnDeck term loan, you may apply for up to $500,000. With the short-term loan option, you have 3 to 12 months to repay your loan. This option is best for funding marketing campaigns, purchasing inventory, or hiring new employees. Short-term loans from OnDeck come with a simple interest rate that starts at 9%.

Long-term loan options are also available. These loans have repayment terms of 15 to 36 months. Long-term loans are best for larger projects, such as business expansion, opening a new location, or purchasing equipment. The annual interest rate for long-term loans starts at 9.99%.

Both short-term and long-term loans have an origination fee of 0% to 4% of the loan amount. Payments are made daily or weekly and are automatically deducted from your business bank account.

To qualify, you must meet these requirements:

  • Time in business of at least 1 year
  • At least $100,000 in annual revenue
  • Personal credit score of 600 or above

The other financing option available through OnDeck is a line of credit. You may qualify for up to $100,000 to use for any business purpose, including paying for unexpected expenses and managing gaps in revenue. The APR for OnDeck lines of credit starts at 13.99%. Payments are made weekly and are automatically deducted from your business bank account.

OnDeck lines of credit come with no draw fees. However, there is a $20 maintenance fee charged each month. This fee will be waived for 6 months if you make a draw of at least $5,000 within 5 days of opening your account.

To receive a line of credit from OnDeck, you must have:

  • Time in business of at least 1 year
  • At least $100,000 in annual revenue
  • A personal credit score of 600 or above

IOU Financial

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  • Must be in business at least 12 months. 
  • Must make at least $120,000 per year and have an average daily balance of $3,000 over a 3-month period.
  • Must have a personal credit score of 600 or above.
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If you need up to $500,000 to fund your small business, try applying for a loan from IOU Financial. With IOU Financial, you can prequalify in just minutes. In fact, 85% of all applicants are pre-approved for funding, according to the lender. You can receive funding in as little as 24 hours through IOU Financial.

With this loan option, you can receive $10,000 to $500,000 with terms between 6 and 12 months. Fixed daily or weekly payments are automatically debited from your business bank account.

Once you’ve paid off 40% of your loan, you may qualify for a loan renewal for additional capital for your business. There are no prepayment penalties, and you can save money on interest by paying your loan off early.

To qualify for funding through IOU financial, you must meet these requirements:

  • Own at least 80% of your business
  • Time in business of at least 1 year
  • At least 10 monthly deposits in your business bank account
  • Annual revenue of at least $100,000
  • Average ending balance of at least $3,000 per day in your business bank account

Credibly

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  • Must be in business at least 6 months with a revenue of $15,000 per month.
  • Must have a personal credit score of 500 or above.
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Credibly is an online lender that offers three financing options for small business owners. You may qualify to receive a working capital loan, a business expansion loan, or a merchant cash advance (MCA).

Credibly’s working capital loans are available up to $400,000 with repayment terms of 6 to 18 months. Instead of your traditional interest rate, Credibly uses a factor rate to determine the cost of borrowing. Learn more about factor rates and how they affect the cost of your loan.

Daily or weekly payments are automatically deducted from your bank account to repay your loan. Despite its name, these loans don’t have to be used for just working capital and can be used for other business purposes.

To qualify for a working capital loan, you must have:

  • Time in business of at least 6 months
  • Personal credit score of 500 or above
  • An average of $15,000 or more in monthly deposits

If you’re ready to grow your business, consider applying for Credibly’s business expansion loan. This loan program provides up to $250,000 with terms of 18 or 24 months and interest rates starting at just 9.99%. Weekly payments are automatically deducted to repay your loan.

To qualify for this financial product, you must have:

  • Time in business of at least 3 years
  • Personal credit score of 600 or above
  • Average of $15,000 or more in monthly deposits
  • Average daily balance of at least $3,000

Finally, you may qualify for a merchant cash advance. This is a little different from a loan because the lender agrees to purchase a percentage of future receivables. Daily repayments are made from your bank account based on a percentage of your sales.

With this financing option, you can receive up to $400,000. Terms are typically 3 to 18 months and factor rates start at 1.15.

To qualify for an MCA, you must have:

  • Time in business of at least 6 months
  • Personal credit score of 500 or above
  • Average of $15,000 or more in monthly deposits

Kabbage

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  • Must be in business at least 12 months and make at least $50,000 annually (or $4,500 for the last 3 months).
  • No specific credit score requirements.
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If flexibility is the most important factor for your small business financing, consider applying for a Kabbage line of credit. Instead of one lump sum, you’ll have access to a revolving account you can draw from whenever you need capital. You can use your line of credit for emergency expenses, revenue gaps, working capital, or for any other business purpose.

Kabbage’s lines of credit are available up to $250,000 for qualified borrowers. Repayment terms are 6 months for draws under $10,000. For loans of $10,000 or above, you can choose from 6- or 12-month terms. Kabbage charges a monthly fee between 1.5% and 10% of your principal loan amount. If you pay your loan off early, you can save money on fees. If you haven’t made a draw on your line of credit, you won’t be required to pay any fees.

Kabbage bases its approval decisions on the performance of your business, so even business owners with credit challenges may be approved. You can be approved in just minutes for up to $100,000. Lines of credit exceeding $100,000 require manual approval by the lender.

To receive a line of credit from Kabbage, you must meet these minimum requirements:

  • A business that is at least 1 year old
  • At least $50,000 in annual revenue OR at least $4,200 per month for the last 3 months

LendingPoint

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  • Time in business: N/A
  • Business revenue: N/A
  • Personal credit score: 600 – 680
  • Personal income: $20,000
  • LendingPoint does not operate in Colorado, Connecticut, Iowa, Louisiana, Maine, Maryland, Massachusetts, Nevada, New York, North Dakota, Rhode Island, South Carolina, Vermont, West Virginia, Wisconsin, and Wyoming
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Sometimes, you have to get a little creative with your small business funding. One option to consider is taking out a personal loan to use for business expenses.

Why choose a personal loan instead of a business loan? For starters, your time in business, business credit score and history, and annual revenues will not be a requirement to qualify. This is great if you’re a new business, have low revenues, or haven’t yet established business credit. Instead, lenders like LendingPoint will evaluate your personal credit history, income, and other factors when determining whether you qualify for funding.

LendingPoint has personal loans from $2,000 to $25,000 for qualified borrowers. You’ll have 24 to 48 months to repay your loan, with payments due twice per month. APRs start at 15.49%.

To qualify for a personal loan through LendingPoint, you must meet these requirements:

  • Be at least 18 years old
  • Have a U.S. ID and SSN
  • Have at least $20,000 in annual income
  • Have a verifiable personal bank account
  • Have a personal credit score of at least 585

Banks, Credit Unions, & Nonprofit Lenders In Michigan

Prefer to go the more traditional route? Banks, credit unions, and nonprofit lenders throughout the state of Michigan offer financial solutions for your small business. If you don’t have a relationship with a financial institution or you just want to shop around your options, try these lenders first.

Comerica Bank

Comerica Bank has provided financial services since 1849. Today, Comerica has over 400 banking centers nationwide. In the state of Michigan, banking centers can be found in cities including Dearborn, Detroit, and Battle Creek.

For small businesses, Comerica offers financial services including:

  • Lines Of Credit: $10,000 to $500,000
  • Term Loans: Up to $500,000
  • Commercial Real Estate Loans: Bridge loans, land acquisition loans, development loans, commercial construction loans
  • Equipment Leases: Up to 100% financing
  • SBA Loans: Up to 90% financing
  • Letters Of Credit

Comerica also offers corporate lending services for public and private companies, including working capital loans, asset-based loans, and acquisition financing.

Lake Michigan Credit Union

Lake Michigan Credit Union is one of the largest credit unions in the state with branches located in areas including Grand Rapids, Kent County, Kalamazoo County, and Saginaw County.

In addition to business checking and savings accounts, you can apply for financing options through LMCU, including:

  • SBA Loans
  • Lines Of Credit
  • Business Credit Cards
  • Commercial Real Estate Loans
  • Secured Term Loans
  • Letters Of Credit

To apply for financing, you must be an LMCU member. Members must meet one of the following requirements:

  • Live, work, or worship in the Lower Peninsula
  • An immediate family member is a member of LMCU

Opportunity Resource Fund

Opportunity Resource Fund is a nonprofit community development financial institution (CDFI) that provides financial support to small businesses throughout the entire state of Michigan.

Through Opportunity Resource Fund, qualified borrowers may receive funding for starting or growing a small business. Business loans are available in amounts from $10,000 to $250,000 with flexible terms and competitive interest rates.

This nonprofit lender considers several factors when approving loan applications. The first is collateral. All loans must be secured with collateral including real estate, inventory, accounts receivables, equipment, or a personal guarantee. Loans also require an equity investment of 10% to 15%.

Opportunity Resource Fund also requires borrowers to meet certain social criteria. This includes aspects such as demonstrating alternative business practices, providing employment to low-income individuals, and empowering woman- and minority-owned businesses.

Applications are available to download on the Opportunity Resource Fund website. If you’re interested, you can also fill out the online form to learn more about the application process and timelines for submissions and approvals.

Small Business Grants In Michigan

Reaching out to an online or local lender isn’t your only option when you need capital to start or expand your business. You can also look to small business grants to get the funding that you need.

Grants differ from small business loans and other types of financing because grant funds do not have to be repaid. Why, then, isn’t every small business owner leaning on grants?

The problem is that grants are few and far between. While you can search online and find multiple lenders in your area, finding grants is a bit more difficult. Even when you do come across grants, you’ll often find that you won’t qualify. Grants typically have very specific requirements, and many are only open to certain industries or women- or minority-owned businesses. There is also a lot of competition from other small businesses pursuing the same grants.

This isn’t meant to be discouraging. It’s simply a warning not to rely solely on receiving grants to fund your business. However, there’s no harm in applying for grants that you do qualify to receive. To kick off your search for a grant, check out these options that are open to small business owners in Michigan.

Community Ventures

The Community Ventures initiative is led by the Michigan Economic Development Corporation. Through this program, employers can receive wage reimbursements of up to $5,000 for each eligible “structurally unemployed” employee that is hired. A structurally unemployed employee is defined as:

  • Someone with a lack of education or functional literacy
  • Someone with a long-term disconnection from employment
  • Low income hires
  • Ex-offenders
  • At-risk youth

Reimbursements are given in monthly installments until the $5,000 per employee limit is reached. These funds are used to offset costs for training and hiring participants in the CV program. Businesses are required to report each month on hired and retained talent for up to one year. If you’re interested in learning more, you can contact the MEDC Customer Assistance Center by phone or email.

NEIdeas

If you live in Detroit, Hamtramck, or Highland Park, you could receive $10,000 for your small business through the NEIdeas $10k Challenge. A total of 26 winners are each awarded $10,000 for coming up with the best ideas for growth.

To qualify, businesses must meet the following requirements:

  • Be an existing, for-profit business
  • Majority owner must be a legal U.S. resident at least 18 years old
  • Business must be in good standing with the IRS
  • Businesses must be based in Detroit, Hamtramck, or Highland Park
  • Gross annual revenues should not exceed $750,000

Home-based businesses and regional businesses based in Southeast Michigan can also apply. Franchises are ineligible to enter.

Program guidelines can be found on the NEIdeas website. Applications can be submitted online, mailed, or turned in to an NEIdeas Ambassador.

SCIP/TCA

Michigan Corporate Relations Network’s Small Company Innovation Program Technology and Commercialization Assistance (SCIP/TCA) program is designed to help businesses grow through collaborations with local universities. Through this program, small businesses can receive matching grants up to $40,000 to fund the cost of research projects at any public university in Michigan.

Any existing, LARA-registered business in Michigan that plans to remain in the state is eligible to apply. Getting accepted into the program is not a guarantee of funding. All guidelines for the program can be found on the Michigan Corporate Relations Network website. Applications for the program are also available online.

Loans & Resources For Startups In Michigan

Taking the leap into entrepreneurship is an exciting time, but it can also be intimidating, especially if you have no prior experience running a business. Fortunately, there are many resources available to Michiganders, including educational materials, workshops, mentorships, and funding opportunities.

SCORE

SCORE, a resource partner of the SBA, is one of the leading resources for small business owners. There are hundreds of SCORE chapters across the nation that provide essential resources to small business owners for free or for a low fee. SCORE chapters are located throughout Michigan in cities including Kalamazoo, Grand Rapids, and Detroit.

Through your local SCORE chapter, you can receive free business mentoring from an expert. You can meet with your mentor face-to-face or connect through email or video chat. You can also pick up business tips through SCORE’s webinars that are held every week. If you miss a webinar, don’t worry — SCORE offers an on-demand library of recorded webinars. You can also educate yourself on a variety of business topics through SCORE’s on-demand online courses. Workshops, events, and educational materials are also offered through this organization.

Michigan Small Business Development Center

The Michigan Small Business Development Center offers great resources for startups and established businesses. There are multiple business resource centers, regional centers, and satellite offices throughout the state in cities including Hastings, Kalamazoo, Lansing, Dearborn, and Detroit.

All resources through the Michigan SBDC are free or low-cost. Services include business consultations, workshops, training sessions, templates, and educational materials.

Michigan Women’s Foundation

The Michigan Women’s Foundation provides capital and resources to women-owned businesses in the state of Michigan. Women that own startups or established businesses are eligible for the programs available through MWF.
Programs offered include business consulting, training and educational sessions, and portfolio management. The Michigan Women’s Microloan Fund also provides loans of $2,500 to $50,000 with 5-year terms and an 8% interest rate to qualified business owners.

What To Consider When Choosing A Lender

The good news is there are many lenders both online and in the state of Michigan that are ready to give your business the capital it needs. The bad news? You have to narrow your selection down to one, preferably the lender that offers the best, most affordable financing for your small business.

Sorting through your options to choose the right lender doesn’t have to be too difficult or time-consuming, though. When searching for your lender, keep the following points in mind.

Application Process

The application process varies across lenders. With some lenders, a little bit of business and personal information and a few bank statements are all it takes to get approved. Other lenders, however, may have more extensive documentation requirements and a lengthier, more complicated application process.

If time is of the essence and you don’t want to go through a difficult application process, choose an online lender with a more simplified process.

Speed Of Approval

You have an emergency that needs to be taken care of immediately. In this scenario, waiting weeks to get the capital you need could be damaging to your business. Or maybe your situation looks a little different. You don’t have an immediate need for funding, and you have time to shop around for the best rates and terms available to your business, so time to funding may not be as important.

Evaluate your situation to determine if time to funding is an important factor for you. If so, work with a lender that approves applications quickly. Some lenders can even have the funds in your bank account in as little as 24 hours.

Loan Restrictions

How do you plan to use your funds? This could be a determining factor in what lender you select. Let’s say you need capital to hire new employees. Lenders that offer equipment financing for fixed asset purchases could be crossed off your list.

Borrowing Limits

The type of financing and the lender you choose may be based on how much capital you need. For instance, if you need $500,000 to fund your new expansion or a new location, lenders that have $250,000 borrowing limits won’t be a good fit.

Rates & Terms

It’s always important to make sure you’re getting the best rates and terms for your situation. If you have credit challenges or you’re a new business, your options may be more limited. However, if you have a solid credit score, an established business, and a steady flow of revenue, you’ll have more lending options available to you.

No matter what options are available, always make sure you’re getting the best rates and terms. Think of the long term and not just the short term. Sure, you could have funds in your account in just one day with one lender, but high fees and interest rates and shorter repayment terms could spell trouble in just a few months.

Unsure if you’re able to afford a small business loan? Learn how to know if you’re ready to take on this financial responsibility.

Borrower Requirements

You may think a lender is right for you, but are you right for the lender? Every lender has different requirements for its borrowers, and you need to meet all of these to get approved for financing.

Before you start shopping lenders, start by getting your free credit score online and reviewing your credit history. Negative items like unpaid tax liens and recent bankruptcies may prohibit you from working with some lenders and qualifying for certain types of loans.

You’ll also need to know your time in business and annual revenues and have proof to present to the lender if needed. Also, be aware of documentation requirements and make sure that you have everything you need to be approved for a loan.

One last thing to remember is that meeting a lender’s minimum requirements does not guarantee that your application will be approved.

Final Thoughts

While no one is ever guaranteed success, having access to capital and the right resources can boost your chances of owning and operating a successful, profitable business. As you’ve read, there are plenty of opportunities available for Michiganders. Whether you’re in the planning stages of your startup or you want to take your small business to the next level, know and understand your financing options, evaluate the needs of your business, do your research, and move forward when you know that the return-on-investment will outweigh the risk of taking on debt.

If you didn’t find what you’re looking for in this post, check out some of our additional resources to help you find the right financial solution for your small business.

  • Minority Business Loans
  • Best Small Business Loans For Veterans
  • The Best Small Business Loans For Women
  • The 7 Best Business Loans For Bad Credit

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

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