Top Unsecured Lines Of Credit For Business

Business financing is an expansive topic covering many types of financial products. Everyone’s got a pretty good idea of what a loan is, but less familiar is the line of credit, arguably one of the most useful types of financing a business can secure.

We’ll take a look at what lines of credit are, the difference between secured and unsecured lines of credit, why you might want one, and where you can find them.

What Is An Unsecured Business Line Of Credit?

Have you ever had a credit card? If so, you have already have some experience with how a line of credit works.

When you use a credit card, you’re drawing on an amount of potential funding extended to you by the card’s issuer. You can use it as often as you want so long as the total amount you’ve used doesn’t exceed your credit limit. Most credit cards are revolving lines of credit, which means that as you pay off your balance, your credit becomes available for you to use again. Most lines of credit are revolving; the exceptions tend to be lines of credit extended for specific purchases, in which case once you use the credit, it’s gone for good.

Credit cards aren’t the only lines of credit out there, however. Lender-issued lines of credit may be slightly less convenient for making retail purchases, but have far better interest rates for those times when you need to carry a balance from month-to-month. This makes a line of credit one of the most versatile ways to fund your business, acting a bit like an insurance policy you can draw on when you need to.

Unsecured Vs. Secured Business Lines Of Credit

So what does that “unsecured” part of the phrase mean? Essentially the same thing it does with any other type of loan.

An unsecured line of credit does not require you to put up collateral as a condition of securing it. This means the lender can’t immediately seize a particular asset should you default on your line of credit. By comparison, a secured line of credit might require you to make a cash deposit or put up an asset as collateral.

Generally speaking, unsecured financial products have higher rates of interest to make up for the increased amount of risk the lender is taking on. On the plus side, you don’t have to worry about coming up with collateral.

Note that “unsecured” does not mean the lender can’t come after you if you default. Many lenders will require you to sign blanket liens, for example.

Top Unsecured Business Lines Of Credit

The first step toward getting an unsecured business line of credit is finding a lender who offers one. If you have a good relationship with your local bank or credit union, it’s worth inquiring about what they offer and their terms.

If those lines of credit are unavailable or out of reach, you still have options available to you. Many online lenders offer unsecured lines of credit. Here are a few suggestions.

OnDeck

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OnDeck offers up to $100,000 credit limits on unsecured lines of credit to customers with a credit rating above 600 who have been in business at least a year and have over $100,000 in gross annual revenue. It’s a good fit for profitable companies that don’t have stellar credit.

There is, however, a $20/month fee for keeping your line of credit open, but OnDeck will waive it for 6 months if you draw at least $5,000 from it during the first five days after opening the account. There is no draw fee.

BlueVine

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If you’re looking for a line of credit with a higher credit limit, you may want to consider BlueVine. BlueVine offers unsecured lines of credit in two forms, one with a six-month interval, the other with a 12-month. The 12-month version has higher rates than the six-month.

Rather than charge an administrative fee, BlueVine charges 1.2 – 2.5 percent per draw. You can pay your balance off at any time during your term, but you will be charged interest at a rate of 0.3 – 1.5 percent per week for six-month lines of credit, or 1.5 – 6.5 percent per week for the 12-month.

Kabbage

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If you’re having a hard time getting your credit up over the 600 mark, you can still get an unsecured line of credit. One such option is through Kabbage, which offers a credit line of up to $250,000 to businesses with at least $50,000 in annual revenue.

Like BlueVine, Kabbage offers lines lasting six-months or 12-months. There’s no draw fee, however. The interest rate system is a little confusing, so be sure to check out their loan calculator to get a sense of what you’ll be charged, and at what month of your term (yes, really).

Fundbox

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Another way to make an end-run around a bad credit rating is through Fundbox. They offer lines of credit to businesses with annual revenues of $50,000 or more who have had an active account with Fundbox-supported accounting software (Quickbooks, for example).

Funbox charges by the amount drawn, starting at 4.66%. You’ll then make weekly, automated payments to pay it off.

Fundation

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If you’re looking for better interest rates, have decent credit, at least $100,000 in annual revenue, and three or more employees, you may qualify for an unsecured line of credit from Fundation.

At 18-month term lengths, Fundation’s lines of credit run a bit longer than the other options we’ve listed. Just be aware that there’s a $500 closing fee and a 2% draw fee. Payments are made monthly.

Top Unsecured Business Credit Cards

Remember, most credit cards are a type of unsecured line of credit. In comparison to the offerings above, a business credit card shines when it’s used to make purchases you can pay offer within the interest-free grace period. Even better, business credit cards offer reward programs you can take advantage of to actually save money.

Here are a couple of options:

Chase Ink Business Cash

Chase Ink Business Cash



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Annual Fee:


$0

 

Purchase APR:


15.49% – 21.49%, Variable

With no annual fee and a 5 percent top tier return on qualified purchases, Chase Ink Business Cash offers a lot of benefits with little risk. The card shines particularly brightly if you use it to buy office supplies or telecom services.

The only real downside is that the card caps the upper and middle tier rewards at $25,000, so if you’re spending more than that on office supplies or telecom purchases per year, you’ll only get 1 percent back after you’ve hit the cap.

Amex Blue Business Plus

Blue Business Plus Credit Card from American Express



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Annual Fee:


$0

 

Purchase APR:


13.49% – 21.49%, Variable

If your purchasing needs don’t fall neatly into any one reward category, you may want to consider American Express Blue Business Plus. You’ll get 2 percent back on all purchases for the first $50,000 you put on your card per year. After that, you’ll get a 1 percent return.

There’s no annual fee, so you won’t have to do any fancy math to figure out whether or not you’re saving money by having the card in your wallet.

Final Thoughts

Unsecured lines of credit can be extremely useful tools for financing your business, and they come in enough variations that you can probably find one that fits your specific needs. Remember to keep their variable fee structures in mind, though, so you know when you’re paying and for what.

Not sure what unsecured line of credit you might qualify for? You can check your credit before the lender does. Does an unsecured line of credit sound like more trouble than its worth? Unsecured business loans might be what you need.

The post Top Unsecured Lines Of Credit For Business appeared first on Merchant Maverick.

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No Credit? Here Are The Best Credit Cards To Improve Your Score

credit cards no credit

One of the primary ways for people to build up their credit scores and establish a healthy credit history is to make monthly credit card payments on time. Of course, this begs the question: How do you build up your credit when you don’t have a credit card in the first place?

Thankfully, there are a number of credit cards that can help those with bad credit — or even no credit — cover daily expenses while boosting their credit scores. Most of them require a security deposit, after which you’ll be extended a credit line equal to that of your deposit. Unfortunately, for those with no credit, unsecured credit cards are hard to come by, though they do exist, as you’ll see.

Let’s delve deeper into the world of credit cards for those without credit.

Petal Visa Credit Card

Petal Visa Credit Card


Petal Visa Credit Card
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Annual Fee:


$0

 

Purchase APR:


15.24% – 26.24%, Variable

The Petal Visa credit card, issued by Utah-based WebBank, is a rarity in the credit card industry in that a) it is marketed specifically as a credit card for people with no credit history at all, and b) it is an unsecured card. You won’t have to make a security deposit in order to use the card! What’s more, your payments will be reported to the three major credit bureaus, thus building your credit (assuming you make your payments on time).

When you apply for the Petal Visa card, your income and spending will be analyzed to determine your creditworthiness, and while you can get approved without having a credit score, having a somewhat decent credit score may help you secure a higher credit limit.

The card offers credit limits between $500 and $10,000, which is quite generous for a card of this sort. The card also offers a variable APR of 15.24% – 26.24%, which is lower than that of many credit-building cards. Remarkably, the card charges no fees whatsoever — no annual fee, no foreign transaction fees, no late fees, and no penalty APR. Simply put, the Petal Visa card is a consumer-friendly product in a field where such products are few and far between.

The card has no rewards, cash back, bonus offer, or introductory 0% APR.

OpenSky Secured Visa Credit Card

OpenSky® Secured Visa® Credit Card



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Annual Fee:


$35

 

Purchase APR:


19.64%, Variable

The OpenSky Secured Visa card is a rarity in that the company does not check your credit when you apply, making this card ideal for somebody with no credit history.

As this is a secured card, you’ll have to make a security deposit of at least $200 which will establish your credit line. And though there are no rewards to earn and no bonus offers, the card does report your spending to the big three credit bureaus, making the OpenSky Secured Visa a solid choice if you need to establish a credit history.

Unfortunately, the card sports a $35 annual fee and a 3% foreign transaction fee. However, the card’s APR comes in at just under 20%, which beats the APRs of many credit cards pitched to people with no credit or poor credit.

Discover it Secured

Discover it Secured


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Annual Fee:


$0

Purchase APR:


25.24%, Variable

The Discover it Secured card is a traditional credit-building card in that it requires a security deposit. Your deposit, which must be between $200 and $2500, will become your credit limit. And like the other cards featured in this article, the card reports to the three major credit bureaus.

The Discover it Secured card offers an impressive level of rewards for a card of this type. You’ll earn 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter and 1% cash back on all other purchases. What’s more, at the end of your first year, Discover will match all the cash back you’ve earned by that point. The card also carries no annual fee.

Secured Mastercard from Capital One

Secured Mastercard From Capital One



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Annual Fee:


$0

 

Purchase APR:


26.99%, Variable

The Secured Mastercard from Capital One offers an unusual benefit for a secured credit card: You may be able to get a credit limit higher than the amount of your security deposit. If you’re approved, you’ll get an initial $200 credit limit, but your required security deposit will be either $49, $99 or $200, depending on Capital One’s assessment of your creditworthiness. You can also get access to a higher credit line after making your first 5 monthly payments on time.

While the card has no annual fee and no foreign transaction fee, you won’t earn any rewards for your spending. The card’s APR (currently at 26.99% variable) is also rather high, so you won’t want to carry a monthly balance if you can avoid it.

Journey Student Credit Card from Capital One

Journey Student Credit Card from Capital One


Journey Student Credit Card from Capital One
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Annual Fee:


$0

 

Purchase APR:


26.99%, Variable

The Journey Student Credit Card from Capital One doesn’t require a security deposit and doesn’t require you to be a college student. Nonetheless, it offers some nice perks for students looking to build up their credit score. Sadly, you must have at least average credit to qualify.

The Journey Student Credit Card offers 1% cash back for all your purchases, but if you make your monthly payments on time, you’ll get 1.25% cash back for all your purchases each month you pay on time. It’s a nice inducement to pay on time if the prospect of boosting your credit score (the card reports to the credit bureaus, naturally) isn’t inducement enough!

The card carries no annual fee or foreign transaction fee, but like Capital One’s Secured Mastercard, the card features a high variable APR of 26.99%.

Spark Classic from Capital One

Spark Classic From Capital One


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Annual Fee:


$0

 

Purchase APR:


25.24%, Variable

The Spark Classic from Capital One is a business credit card for rebuilding credit. As such, the card comes with business perks such as free cards for your employees, all while helping you build your business credit score (the card reports to the business credit bureaus, not the personal ones).

One of the few cards available for business owners that requires only average personal credit, the card offers a modest cash back rate of 1% for all your purchases. It also features no annual fee and no foreign transaction fee.

The card’s high APR (25.24% variable) means that you should try to avoid carrying a significant balance from month to month.

Credit One Bank Platinum Visa for Rebuilding Credit

Credit One Bank Unsecured Platinum Visa


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Annual Fee:


$0 – $99 ($0 – $75 the first year)

 

Purchase APR:


20.24% – 26.24%, Variable

The Credit One Bank Platinum Visa for Rebuilding Credit (note that the issuer is Credit One, not Capital One) is a credit option for borrowers with bad/limited credit who can’t or won’t pay a security deposit. However, due to the fees involved, you might not want to make this card your first choice.

If you are approved to get this card, you’ll have to pay a $75 annual fee immediately, thus bringing your credit line down from $300 to $225. Unfortunately, after the first year, your annual fee may rise to $99/year. I say “might” because Credit One lists the post-1st-year annual fee as “$0 to $99”. The company also reserves the right to divide your annual fee by 12 and charge you on a monthly basis.

While the card offers 1% cash back on eligible gas and groceries plus mobile phone, internet, cable, and satellite TV services, only “qualified” Platinum Visa card members can receive 1% cash back rewards on all purchases. Credit One doesn’t explain how you can qualify for this.

Wells Fargo Business Secured Credit Card

Wells Fargo Business Secured Credit Card


business credit cards fair credit
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Annual Fee:


$25

 

Purchase APR:


Prime + 11.90%

The Wells Fargo Business Secured Credit Card is one of the few secured business credit cards out there. Let’s take a closer look.

With this card, you’ll get a $500 to $25,000 credit line based on the amount you deposit. As for spending rewards, you’re given the choice between getting cash back and getting reward points. Choose cash back and you’ll also get 1.5% cash back on all your purchases and your cash back will be credited quarterly to your account.

If you choose reward points, you’ll get 1 point for every $1 spent on net purchases and 1,000 bonus points when your company spends $1,000 or more in any monthly billing period. You can redeem points for gift cards, merchandise, airline tickets, and more.

The Wells Fargo Business Secured card comes with an annual fee of $25 per card, no foreign transaction fee, and a relatively competitive APR. And while Wells Fargo states that your card activity “is shared with major credit bureaus to help build credit history,” the company does not specify whether these bureaus are business credit bureaus or consumer credit bureaus.

Citi Secured Mastercard

Secured Mastercard From Citi


best secured credit cards
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Annual Fee:


$0

Purchase APR:


26.99%, Variable

The Citi Secured Mastercard is another secured credit card — one meant for people with no credit or a limited credit history.

The card requires a security deposit of between $200-$2,500 which will be the basis for your credit limit. Citi will report your credit activity to the major consumer credit bureaus.

There’s no annual fee, but the APR is relatively high and there are no rewards to accumulate or bonus offers to earn.

What You Need To Apply For A Credit Card

As you may not have applied for a credit card before, here’s what you’ll need to provide when you apply:

  • Your legal name
  • Your birth date
  • Your address
  • Your Social Security number (your Individual Taxpayer Identification Number (ITIN) may suffice if you don’t have a Social Security number
  • Your annual income

How To Use A Credit Card To Build Credit

free credit score monitoring service

The primary way that using a credit card helps you build credit is that when you make your monthly payments on time, most credit card issuers will report your activity to the major consumer credit bureaus, who will then take your payment activity into account when setting your FICO score.

However, there’s more to it than just that. Check out this article on using credit cards to build your credit for a more detailed look at the subject.

Final Thoughts

It’s a cruel catch-22: Having credit makes it easier to build credit. When it comes to the credit cards you can obtain with no credit history, the options are limited and imperfect.

Thankfully, as this article has demonstrated, you do have some viable credit card options when seeking to establish a healthy credit history. Of course, no matter what credit card you’re able to obtain, it won’t help your credit score if you can’t make your monthly payments on time. Use your new card wisely!

Here’s some additional information to help you on your credit journey!

  • How to improve your credit score
  • Using personal credit cards for business
  • How to build credit with a credit card

The post No Credit? Here Are The Best Credit Cards To Improve Your Score appeared first on Merchant Maverick.

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The Best Credit Cards Offered By American Airlines

best american airlines credit cards

Folks who travel regularly, both for business and for personal reasons, are likely to use frequent flyer programs to earn reward miles for their flights. As American Airlines is, by most metrics, the world’s largest airline, reward miles earned via American Airlines’s AAdvantage program are particularly useful.

One way to accelerate the rate at which you earn AAdvantage miles is to use an American Airlines co-branded credit card. Several such cards are available, so you might need a little guidance to find the card that makes sense for your particular needs. Thankfully, you can let us handle that part!

Here’s something you should know off the bat. All American Airlines credit cards offer the following rewards:

  • 2 AAdvantage miles for every dollar spent on eligible American Airlines purchases
  • 1 AAdvantage mile for every dollar spent on all other purchases
  • 25% savings on inflight food and beverage purchases

While each AA card shares these common features, the cards diverge from one another in other ways, such as fees charged, additional ways to earn miles, and travel perks. Let’s examine each American Airlines credit card and the primary selling point of each American Airlines credit card.

Credit Card Best For
AAdvantage MileUp Card No Annual Fee
CitiBusiness / AAdvantage Platinum Select World Mastercard Business Owners
Citi / AAdvantage Platinum Select World Elite Mastercard General Travel
Citi / AAdvantage Executive World Elite Mastercard High-End Travel Benefits
Barclays AAdvantage Aviator Red World Elite Mastercard Balance Transfers
Barclays AAdvantage Aviator Business Mastercard Bonus Offers

Best For No Annual Fee: AAdvantage MileUp Card

AAdvantage MileUp Card


AAdvantage MileUp Card
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Annual Fee:


$0

 

Purchase APR:


18.24% – 26.24%, Variable

The AAdvantage MileUp Card’s value for the average traveler is enhanced by the fact that the card carries no annual fee. With most credit cards that earn airline miles, you have to weigh the miles you earn against the annual fee to see if you’re coming out ahead. If you don’t travel all that often, you might find yourself on the wrong side of this particular Mendoza line.

However, since the AAdvantage MileUp card carries no annual fee, you won’t have to weigh your benefits against your fee. Plus, not only will you earn the same double miles from your AA purchases as with every other AA card, but you’ll also earn 2 miles for every $1 spent at grocery stores.

This card doesn’t offer the same free checked bag perk offered by other AA credit cards. It is aimed more at the casual traveler or the entrepreneur who takes occasional vacations rather than at the frequent business traveler — a distinction highlighted by the double miles that accrue to grocery store purchases.

Unfortunately, this card requires excellent credit in order to qualify. There’s also a 3% foreign transaction fee, no introductory 0% APR period, and a relatively high APR.

Best For Business Owners: CitiBusiness / AAdvantage Platinum Select World Mastercard

CitiBusiness / AAdvantage Platinum Select World Mastercard


credit cards for entrepreneurs
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Annual Fee:


$99 (waived for the first year)

 

Purchase APR:


17.99% to 25.99%, Variable

The CitiBusiness / AAdvantage Platinum Select World Mastercard is one of just two American Airlines co-branded cards currently being offered that is a business credit card. If you want to earn AAdvantage miles with your American Airlines travel and that of your employees, check out this card (or the Barclays AAdvantage Aviator Business Mastercard, which we’ll discuss later).

The card currently offers an impressive bonus offer of up to 60,000 AAdvantage miles: Earn 50,000 bonus miles after making $3,000 in purchases within the first 3 months and another 10,000 bonus miles after making a total of $10,000 in purchases within the first 12 months. You’ll also earn 2 miles for every dollar spent on gas, cable/satellite providers, select phone companies, and car rentals.

Along with the standard AAdvantage benefits, this CitiBusiness Mastercard offers additional perks befitting business travel, such as:

  • Preferred boarding on AA flights
  • 25% savings on American Airlines inflight Wi-Fi
  • First checked bag free on domestic American Airlines flights for you and up to four companions
  • Earn an American Airlines Companion Certificate worth $99 for domestic travel after $30,000 in purchases each cardmembership year (fees apply)
  • 24/7 personal business assistant to help with travel, hotel, and dining arrangements

The card does carry a $99 annual fee, though this is waived the first year. There is no introductory 0% APR period (boo!) and no foreign transaction fee (yay!).

Best For General Travel: Citi / AAdvantage Platinum Select World Elite Mastercard

Citi / AAdvantage Platinum Select World Elite Mastercard


Citi / AAdvantage Platinum Select World Elite Mastercard
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Annual Fee:


$99 ($0 the first year)

 

Purchase APR:


18.24% – 26.24%, Variable

The Citi / AAdvantage Platinum Select World Elite Mastercard is the personal counterpart to the CitiBusiness card listed above. It’s the most well-rounded of the bunch and makes for a solid travel credit card for frequent travelers.

With this card, along with the AAdvantage miles you’ll earn on AA flights, you’ll earn 2 miles per $1 spent at restaurants and gas stations with no cap on the amount of miles you can earn. You’ll also get a bonus offer of 50,000 bonus miles after you make $2,500 in purchases within the first 3 months.

Some handy travel perks come with the Citi / AAdvantage Platinum Select World Elite Mastercard (I’m sorry each of these cards has such an annoyingly long and similar name). You’ll get preferred boarding on all AA flights and one free checked bag on domestic AA flights. You’ll also get a $100 AA Flight Discount after you spend at least $20,000 on purchases during your cardmembership year and renew your card. What’s more, there’s no foreign transaction fee.

There’s also a $99 annual fee, waived for the first year. The APR also happens to be on the high side.

Best For High-End Travel Benefits: Citi / AAdvantage Executive World Elite Mastercard

Citi / AAdvantage Executive World Elite Mastercard



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Annual Fee:


$450

 

Purchase APR:


17.99% – 25.99%, Variable

The Citi / AAdvantage Executive World Elite Mastercard is the luxury option when it comes to American Airlines co-branded credit cards. This is apparent in the card’s whopping $450 annual fee!

As the most, well, “elite” of American Airlines’s credit cards, the Executive World Elite Mastercard comes with a host of great travel benefits:

  • 10,000 Elite Qualifying Miles after you spend $40,000 in purchases within the year
  • Automatic Admirals Club membership — access over 50 Admirals Club lounges and nearly 60 partner lounges worldwide
  • Global Entry or TSA PreCheck application fee credit
  • First checked bag free on domestic AA flights for you and up to 8 travel companions
  • Priority check-in, priority airport screening (where available), and priority boarding privileges for you and up to 8 travel companions
  • Dedicated concierge service

The card also comes with a bonus offer of 50,000 AAdvantage miles after you spend $5,000 on purchases within the first 3 months. And as you would expect of a luxury travel card, there’s no foreign transaction fee.

The card’s high annual fee means you’ll have to do quite a bit of traveling in order to fully reap the rewards of the card (or maybe you just really enjoy priority boarding and airport lounge access). If this is you and you don’t mind sticking to American Airlines for your air travel, check out the Citi / AAdvantage Executive World Elite Mastercard.

Best For Balance Transfers: Barclays AAdvantage Aviator Red World Elite Mastercard

Barclays AAdvantage Aviator Red World Elite Mastercard


Barclays AAdvantage Aviator Red World Elite Mastercard
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Annual Fee:


$95

 

Purchase APR:


18.24% – 27.24%, Variable

The AAdvantage Aviator Red World Elite Mastercard is an AA co-branded credit card issued by Barclays, unlike the cards above, which are all Citi-issued. It also comes with two unique and striking benefits.

First, unlike any other American Airlines credit card, this card offers an introductory 0% APR for 15 months on all balance transfers posted to your account within 45 days of your account opening. Second, this card offers a huge bonus of 60,000 miles, and all you have to do to get it is to make a single purchase on your card within 90 days. Of course, you’ll also have to pay the $95 annual fee, as it is not waived the first year.

The card comes loaded with great American Airlines-related perks. You’ll get preferred boarding and one free checked bag for you and up to four companions on your reservation, plus dedicated concierge service. You won’t have to pay any foreign transaction fees, either.

Best For Bonus Offers: Barclays AAdvantage Aviator Business Mastercard

Barclays AAdvantage Aviator Business Mastercard



Compare

Annual Fee:


$95

 

Purchase APR:


18.24% to 27.24%, Variable

The AAdvantage Aviator Business Mastercard is an American Airlines co-branded business credit card issued by Barclays.

Compared to the CitiBusiness card, this Barclays AA business credit card has a bonus offer that is quite easy to obtain. With just $1,000 in spending in your first 90 days, you’ll get 60,000 AAdvantage bonus miles. Most businesses in the market for a business travel card should be able to hit this threshold without much problem.

While the $95 annual fee is not waived for the first year, you’ll be accruing benefits that will exceed this if you do a significant amount of business travel. Not only will you earn double miles on all AA purchases, but you’ll also earn $3,000 Elite Qualifying Dollars after spending $25,000 on purchases each calendar year. These Elite Qualifying Dollars boost your status in the AAdvantage program when you earn them, entitling you to more and better travel perks.

Other card benefits include a 5% bonus on your miles earned every year after your account anniversary date based on the total number of miles earned using your card, a free checked bag + preferred boarding for you and four companions, complimentary employee cards, and a Companion Certificate for a guest, worth $99, which you’ll get each year after your account anniversary after spending $30,000 or more on eligible purchases.

Final Thoughts

To reiterate a point I made earlier, American Airlines is the world’s largest airline. Therefore, AAdvantage miles are going to be more useful for more people than just about any other airline’s proprietary miles. The American Airlines credit cards we’ve detailed here can help you a) earn AAdvantage points on your flights to go towards further AA travel and b) gain access to a variety of different travel benefits and points-earning spending categories.

If you’re still looking around for the ideal credit card for your needs, check out these links!

  • Best airline credit cards for businesses
  • Best business credit cards for travel
  • Best free credit score sites

The post The Best Credit Cards Offered By American Airlines appeared first on Merchant Maverick.

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Everything You Need To Know About Small Business Property Insurance

Everything You Need To Know About Small Business Property Insurance

If you are a small business with a physical storefront, a location where you store your goods/supplies, or a strong inventory of vehicles and equipment, buying a commercial property insurance plan should be part of your risk management plan. Commercial property insurance is designed to protect your business from accidents, theft, fires, and some (but not all) Acts of God.

If the worst-case-scenarios for your property come to fruition, a solid commercial property insurance plan creates a way for your business to run and thrive despite the setbacks.

What Is Property Insurance?

Commercial property insurance is a policy of coverage that protects your business assets in the event of property damage. Accidents, fires, and vandalism are all covered by property insurance, and the policy not only provides compensation for damage to buildings but also damage done to products inside the building. Structures, fixtures, and equipment inside the building are protected under property insurance, but it’s best to check the policy and speak to an insurance expert to make sure your most important assets are included in the policy’s coverage.

When you file a claim, you can choose to receive the cash value of the destroyed items or the replacement value (how much it would cost to replace new). However, policies are often specific in what they’ll cover and what they won’t cover. Read on to see what is and isn’t covered in most policies.

What Property Insurance Covers

In general, the commercial policies will cover accidents, damage, and theft to your building and assets inside your building. In most cases, commercial property insurance policies will cover the following (although, as with any policy, ask questions about the coverage):

  • Damage and destruction from a fire
  • Losses and damage from theft and vandalism
  • Damage from tornados or a hurricane
  • Sinkholes
  • Smoke damage
  • Damage from aircraft or other vehicles crashing into your building
  • Damage from riots/civil unrest

What Property Insurance Doesn’t Cover

Most commercial property insurance policies will not cover everything and the list of things not covered is extensive. Most policies don’t cover flood, tsunamis earthquakes, and sewer backups among other things.

Sometimes the exact same damage is covered or not covered depending on how the damage occurred. For example, if your toilet backs up and sewage destroys your property, it isn’t covered. But if that same toilet backs-up because of vandalism, that is covered. Since policies vary by carrier, it’s important to learn exactly what is and isn’t covered by your insurance provider.

Who Needs Property Insurance?

Everything You Need To Know About Small Business Property Insurance

Most businesses need a basic type of commercial property insurance if they have a physical location for their business. The coverage will protect business assets in the event of damage to the property. Buildings, machinery, and some electronics are covered under the policy.

If your business is leasing or renting a commercial space, you will need to check with your landlord to see who is expected to carry the burden of insurance. Some landlords will still expect you to pay rent on a damaged building (and it is becoming more common that you will need to supply proof of insurance before signing a lease), so understanding your business insurance policy will help with surprises. Even if commercial property insurance is not required by a landlord, you don’t want to find yourself under-insured.

You should get commercial property insurance if you need to protect the following items:

  • A commercial space (that you either rent or own)
  • Computer and electronic equipment
  • Office furniture and supplies
  • Inventory and stock

Property Insurance VS. Business Owners Policy (BOP)

Everything You Need To Know About Small Business Property Insurance

Many business owners find that it is better to bundle their commercial property insurance policy with a general liability policy. This is known as a Business Owners Policy (BOP) and is often the most economical way to protect your business from the biggest claims for and against your business.

What Is A Business Owners Policy?

A Business Owners Policy (BOP) is a bundled policy that includes both property and liability insurance. Check with specific insurance providers about what their particular BOP entails. Under a BOP, many business owners can add extra insurance coverage that exceeds the basic coverage of a commercial property policy. (And if you have employees, a BOP can also negotiate worker’s compensation insurance into the bundle.)

What Does A Business Owners Policy Cover?

All Business Owners Policies (BOP) have general liability insurance and commercial property insurance bundled into one policy. General liability coverage protects your business from the cost of a lawsuit due to accident or injury to someone’s person or property. Additionally, a BOP includes commercial property insurance which provides protection to your assets in the event of damage to your property. Most BOPs also include business income insurance or additional coverage against theft through crime insurance. (Each policy is different and most can be tailored to fit your business risks.)

Additional Types Of Property Insurance

Everything You Need To Know About Small Business Property Insurance

When you start shopping for commercial property coverage, you’ll want to know what you can add to your policy to make sure it is the best fit for your business. Most commercial property policies don’t cover earthquake damage or flooding. Are you in an area where the fault lines aren’t predictable? You’ll want extra coverage. Is your business’s location prone to flooding? You’ll want additional flood insurance.

It’s important to ask about additional policies to cover the following possible situations if they are risks for your area/business type:

  • Water damage due to flooding/tsunamis
  • Damage from earthquakes
  • Mold damage
  • Acts of war
  • Debris removal
  • Employee theft
  • Sewage backups
  • Loss of business income from closure

Which Type Of Property Insurance Is Right For You?

Type of Insurance What It Covers Who It Is For

General Liability

Protects your business from the threat of a lawsuit

All businesses

Property Insurance

Protects your building and things inside your buildings from damage and accidents

Businesses with a physical property site and products located in those physical locations

Business Interruption

Provides resources if your business is forced to stop or relocate

Businesses located in riskier areas and businesses who might work with vendors in risky areas

Commercial Auto Insurance

Provides protection from accidents on your commercial vehicles

Businesses that rely on automobiles to do business

Workers Compensation

Provides protection to you and your employees should they become injured on the job

All businesses

Professional Liability (E&O)

Protects your business during a lawsuit if your business commits errors or malpractices

Any business that provides a service

Product Liability Insurance

Protects a business from a lawsuit related specifically to the product it sells

Any business that manufactures, sells, or distributes a product

Home-Based Business Insurance

Protects any business-related items inside your home not covered by home owner’s insurance

Any business owners running out of their own homes

Business Owners Policy

Includes both general liability and commercial property insurance

All businesses

Umbrella Insurance

Provides a bigger ceiling for the legal costs of a lawsuit that extends your liability coverage

All businesses

Whether you are buying a commercial property policy separately or as part of a business owner’s policy, knowing which types of insurance are available will help you make the most informed decision for your business. Here are the types of policies you can add to your general liability policy.

  • Direct Damage Property Insurance: This is your standard commercial property insurance. The policy covers any direct damage to your business location and damage to business property.
  • Business Interruption Insurance/Business Income Insurance: After a disaster, the business may need to close its doors for a bit. This insurance covers the lost income due to a closure and it also helps provide protection for expenses related to the closure (temporary locations, moving supplies, etc.).
  • Extra Expense Insurance: For businesses that cannot afford to close (a 7-day business like a clinic or a security center), in the event of a disaster or interruption to the business, this policy helps provide the finances to move to a new location or minimize the financial effects of a shutdown. It is similar to business interruption service but targeted specifically toward the extra expenses of moving a business to a new location.
  • Leasehold Interest Insurance: If a business loses its lease (especially if they had a nice lease, under market-value), this insurance covers the financial loss of losing the lease. It can also help pay back a business owner for betterments to the space that they are leaving.
  • Fine Arts Coverage: If you decorate your space with tapestries and rugs and paintings, you might need fine arts coverage if you’d want to replace it after a disaster. Because fine art needs a valuation, someone who purchases this floater coverage would want to itemize their art. However, this is specifically designed for people who use fine art as decoration and have no intention of selling it. (That would require a larger insurance policy.)
  • Contractors Equipment Coverage: This additional coverage specifically covers and replaces equipment and tools that are either damaged or goes missing on a job site. For contractors and construction businesses that might have expensive tools in a variety of locations, this floater will specifically insure machinery and tools.
  • Cyber Liability Coverage: If you are the victim of hacking or a data-breach, and your customer data is leaked (including social security or credit card numbers), it can cost your business a lot of money to comply with federal guidelines. This coverage helps pay legal fees and protects you from lawsuits arising because of the data breach. If your business is online or you collect information online, this is an important addition to your plan.
  • Electronic Data Processing Coverage: This insurance protects the equipment and the data that you collect. This is a policy that bridges a gap in your commercial policy between what electronic equipment is insured after an accident or disaster. With this add-on, your computer hardware, as well as software and data information, is all insured.
  • Employee Theft Insurance: If a dishonest employee steals equipment, money, or securities, the losses are covered under this additional policy added to your commercial property plan. This plan will even cover the losses if you don’t know which employee committed the crime, and it is part of the crime add-ons to a commercial property policy.
  • Inland Marine Insurance: A commercial property policy will only cover items at a specific business location, so what if your equipment and business materials travel from one place to another? This type of insurance covers things in transit or an instrument of transit or any equipment that is moveable.
  • Debris Removal Insurance: This section of property insurance covers the cost of removing debris after an accident or Act of God. While property insurance may cover the cost of repair, without this specific add-on to your policy, the cost to remove garbage and debris may fall on you as a business owner.

Buying Property Insurance

Once you’ve decided to invest in commercial property insurance, you’ll now need to decide what type of coverage is best suited for your business and make a list of assets you’d like to protect. After that, read our article on the steps needed to buy insurance. There are four quick steps to getting yourself secured with the right policy.

  1. Assess your risk and choose which insurance you need.
  2. Gather the necessary business information (in this case, you’ll need specific details about your commercial property including square footage).
  3. Comparison shop the costs. (You can use comparison sites like Coverwallet, Coverhound, and Insureon, or contact your local insurance provider to see what commercial plans are available.)
  4. Purchase your insurance!

Commercial property insurance is important to provide needed protection for your building and the assets inside your building. Whether it’s a fire or an unruly mob of people, if your property is damaged, don’t be left to pick up the pieces on your own. Find a policy that will give you peace-of-mind and adequate coverage to the things that matter most.

The post Everything You Need To Know About Small Business Property Insurance appeared first on Merchant Maverick.

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Best Fuel Cards For Truckers And Trucking Companies

best fuel cards for truckers

Fuel cards (also known as fleet cards) are unique payment instruments designed to help trucking companies save money on the cost of fuel and maintenance as well as monitor their workforce’s spending. These cards are accepted by fuel vendors that comprise the network of locations that accept the card in question. Generally, these networks will cover over 10,000 gas stations nationwide, though a few such networks feature hundreds of thousands of individual gas stations.

Let’s take a closer look at the fuel cards that best fit your trucking business.

Best for Fuel card
No monthly charges ExxonMobil Business Fleet Card
Small & mid-size companies WEX FlexCard
National coverage Shell Fleet Navigator Card
Rewards Fuelman Advantage Platinum Mastercard

Best For No Monthly Charges

ExxonMobil Business Fleet Card


ExxonMobil Business Fleet Card
Compare

Annual Fee:


$0

 

Purchase APR:


N/A (charge card)

The ExxonMobil Business Fleet card offers a rebate of up to 6 cents per gallon on your fleet’s fuel purchases depending on the total gallons purchased per billing period. Additionally, there are no monthly charges associated with the card and no setup fees.

The ExxonMobil Business Fleet card’s rebate structure is as follows:

  • Less than 500 gallons purchased during billing period =  1¢ per gallon
  • 500 to 3,999 gallons purchased = 3¢ per gallon
  • 4,000 to 6,999 gallons purchased = 4¢ per gallon
  • 7,000 to 9,999 gallons purchased = 5¢ per gallon
  • 10,000+ gallons purchased = 6¢ per gallon

The ExxonMobil Business Fleet Card is a charge card. As such, the card doesn’t carry an APR since you can’t carry a balance from month-to-month.

With the ExxonMobil Business Fleet card, you’ll be able to view all of the following from your online account:

  • Card and driver detail
  • Payment history
  • Available credit
  • Manage invoices and payments
  • Set restrictions on purchase types
  • Set limits for transactions, gallons, and dollar amounts
  • Set specific limits for time-of-day and day-of-week
  • Receive notifications when expenses fall outside your company policies

One word of caution: This card is only good at the 10,000 Exxon and Mobil stations in the US. These stations are most prevalent in the eastern US.

Best For Small & Mid-Size Companies

WEX FlexCard


WEX FlexCard
Compare

Annual Fee:


$24 per card

 

Purchase APR:


N/A

For a fuel card that will both help you save on fuel and cover fuel purchases nearly everywhere your fleet goes, check out the WEX FlexCard.

Like the ExxonMobil Business Fleet Card, the WEX FlexCard is a charge card — but unlike the ExxonMobil card, the WEX FlexCard allows you to carry a balance for up to 26 days. And while the FlexCard’s 3¢ rebate on every gallon of fuel purchased falls short of the maximum rate of the ExxonMobil card, it equals or exceeds said rate if you purchase less than 4,000 gallons of fuel per billing period. As such, it’s a great fuel card for small and mid-sized fleets.

The WEX FlexCard is accepted at over 90% of fuel stations nationwide. This comes out to over 160,000 US refueling locations and 45,000 US service locations.

The Wex FlexCard does carry a monthly fee of $2 per card, though this shouldn’t put that big of a dent in your profits.

In addition to the above features, WEX’s fleet management and fuel management services can, when used in tandem, help you save even more on fuel — up to 15% by the company’s estimation.

Best For National Coverage

Shell Fleet Navigator Card


Shell Fleet Navigator Card
Compare

Annual Fee:


Unspecified “limited fees”

 

Purchase APR:


23.00%, Variable

If you’re looking for the fuel card with the maximum possible coverage, you’d do well to investigate the Shell Fleet Navigator Card.

This fuel card is accepted at fully 95% of gas stations across the US, including all 14,000+ Shell and Jiffy Lube locations. You’re exceedingly unlikely to be left high and dry by the Shell Fleet Navigator Card.

The card comes with spending controls and expense management systems on par with every other fuel card out there. What’s more, the Shell Fleet Navigator card is not a charge card. Instead, the card is akin to a traditional credit card in that you can carry a balance from month-to-month.

The Shell Fleet Navigator Card also offers a rebate of up to 5 cents per gallon of fuel purchased each billing cycle depending on the amount spent. Unfortunately, Shell doesn’t disclose the amount of fuel per month you need to purchase before the 5 cent rate takes effect. Likewise, while the card doesn’t officially carry an annual fee, Shell states that the card may carry “limited fees” — though these fees are not detailed by the company.

Best For Rewards

Fuelman Advantage Platinum Mastercard


Fuelman Advantage Platinum Mastercard
Compare

Annual Fee:


$0

 

Purchase APR:


N/A

The Fuelman Advantage Platinum Mastercard is another card with near total US coverage — you can use this card at any location that accepts Mastercard. But that’s just the beginning of the benefits you’ll get from using this card. (I like to think these cards are named for someone who just happens to be named Fuelman)

With this Fuelman card, you’ll get up to 3¢ per gallon in rebates on your fuel purchases depending on the volume of fuel you purchase each month (sadly the exact volume/rate data is not provided by the company) and an additional 2-3¢ per gallon when you use gas stations that are a part of the Fuelman Discount Network.

This discount network will also get you a 3 5% rebate on purchases at Firestone and Tires Plus Retail Locations.

This card is a charge card and it carries no annual fee.

Best Prepaid Fuel Cards

Let’s change gears here (get it?) and discuss prepaid fuel cards. Now, a prepaid fuel card is not the same thing as an actual fuel card. Essentially, a prepaid fuel card is just a gift card that can be used at a gas station, and as such shares little in common with either fuel cards or credit cards. Nonetheless, prepaid fuel cards can be quite useful for the company whose operations involve a degree of road travel, and, as such, I thought I should mention them here. These cards aren’t for mid-size to large trucking companies.

Shell Refillable Card

The Shell Refillable Card can be used at all Shell locations. Up to $300 can be loaded onto the card at one time. You can track the balance and your spending online.

If your company’s driving needs are limited and you want to make sure only fuel is purchased on the company dime, consider using the Shell Refillable Card.

ARCO Prepaid Fuel Card

The ARCO Prepaid Fuel Card is nearly identical to the Shell Refillable Card, except you use it at ARCO stations. It is a good prepaid gas card to use on the west coast where most ARCO stations are located.

If you’re a west coast company with limited driving needs, you might want to give ARCO Prepaid Fuel cards a look.

Are Fuel Cards Worth It?

Let’s move on to the larger question of whether or not fuel cards are worth getting in the first place.

If your business uses two or more company vehicles for travel and your company purchases over 1,000 gallons of fuel each month, it may be worth it to get a fuel card. This is true for the following reasons:

  • Fuel cards come with in-depth purchasing controls to ensure your employees are using the company card for driving-related expenses only
  • Advanced analytics can improve your drivers’ efficiency
  • Monthly/annual fees tend to be small or nonexistent
  • Save money, both on gas purchases and on repair/maintenance costs
  • Advanced GPS apps that point the way toward in-network gas stations and service centers

Of course, the fact that fuel cards can only be used to purchase fuel and repair/maintenance services means that fuel cards are much less flexible than credit cards. Additionally, rewards programs associated with fuel cards tend to be more limited than those of credit cards, as only certain gas stations participate in said rewards programs.

Also, consider the fact that most fuel cards are charge cards. This means you won’t be able to carry a balance from month-to-month, giving you less leeway when paying your bills. Also, the fuel cards that do allow you to carry a balance never come with an introductory 0% APR offer. In fact, fuel cards just about never offer any signup bonuses.

What To Look For In A Fuel Card

Here’s what you need to keep in mind when looking for a fuel card:

  • Get a card that fits your location — Many fuel cards can only be used at certain gas station chains or within networks that cover certain regions of the country and not others. Look into exactly where a fuel card can be used before deciding on one.
  • Get a card that fits the amount of fuel you purchase each month — Many fuel cards offer rebates on fuel purchases, but these rebates are often tied to how much fuel your company buys each month. Try to determine how much fuel per month your company will be using before getting a fuel card. This way, you can find the card with a rebate program that best caters to your fuel “sweet spot.”
  • Understand how the fuel pricing works when considering a fuel card — Some fuel cards allow you to batch your fuel purchases after a certain length of time. This means you may be able to pay less than the price listed at the pump, but this pricing scheme can also come with its own fees and requirements. Be sure to understand how pricing works before obtaining your fuel card.

Final Thoughts

Trucking companies have their own particular financing needs, just like any specialty industry. The fuel card is one of the tools by which your business can save on the cost of fuel and keep employee spending under control.

To learn more about how to set up your trucking business for growth, let Merchant Maverick lend you a hand.

  • Best business loans for trucking companies
  • Best free credit score sites
  • How to improve your score

The post Best Fuel Cards For Truckers And Trucking Companies appeared first on Merchant Maverick.

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What Is Credit Card Tokenization?

Tokenizing Payments

While tokenization in the payment security space may be relatively new, evolving, and even somewhat complicated, the concept of substituting one bit of information for another to protect something is anything but new. Tokenizing protects sensitive or personal data by replacing it with a “token” — a code word, essentially, though that might be oversimplifying the matter. Because the token is a substitute for the actual data, it holds no value if intercepted by fraudsters. You would need a way to decode the token in order for it to have any value. 

In this post, we are going to focus on credit card tokenization, but you should also know that tokenizing other types of highly sensitive data like social security numbers and personal records may become commonplace across markets — and very soon.

But back to the payment industry. As of late, the idea of tokenization is typically linked to digital wallets like Apple Pay and Android Pay, and for good reason. But there are many implementations of tokenization technology including:

  • Card-on-file subscription billing
  • One-click checkouts on eCommerce sites
  • In-app payments
  • All NFC mobile wallets (contactless payments)

Whether you are a brick-and-mortar shop wanting to implement contactless payment options for your customers, you have an online shop, you use an app to support your business, or you have regulars you know and love, you could start taking advantage of credit card tokenization.

And if you’ve bought anything via those methods listed above (who hasn’t?) in the last couple of years, the chances pretty good that your data was tokenized. So what is tokenization?

Tokenization Defined

When we define tokenization, it’s worth mentioning that while the main crux of the matter is consistent, no one-size-fits-all definition is universally accepted among the big payment security organizations like PCI and EMV. However, here is a simplified version, as given by the PCI Council, that gets to the heart of the matter:

Tokenization is a process by which the Primary Account Number (PAN) is replaced with a surrogate value called a token.

When we look at the PAN, which is the actual account number on your credit card, remember that other sensitive pieces of data connect to it — including your personal information and expiration date of the card. When we tokenize, we place all of that information farther from merchants, cashiers, and other players in the payment process. And because the data is no longer recognizable in its token form, we protect it across the payment process. A token’s life can be for just one interaction to get coffee, or a store could tokenize payment data for a specific customer for a limited amount of time.

Also, notice in the definition I shared in bold above, that there is no defined “how,” because it depends on how you implement the tokenization process and what application your business needs. Here are a few examples to help shed some light on how sensitive data gets tokenized.

How The Account Number Gets Tokenized

There are two ways to tokenize data: partial or total. They each have their advantages but may not be right for all situations.

First up, let’s talk about partial tokenization. In some cases, the middle six digits of a customer’s credit card get replaced with a token. The first group of numbers doesn’t get tokenized so that the processor knows what type of card they are dealing with (Visa and MasterCard have unique identifying numbers). Additionally, the last four digits of the PAN also remain intact for customer reference. This type of partialized tokenization is also backward compatible, meaning the token has the same amount of numbers as the real PAN. It “looks like a real card and acts like a real card” when a merchant enters it into their own POS system. If a merchant wants to tokenize data and keep their legacy system, this is one way to do it.

The other way to tokenize the PAN is to completely randomize all of the numbers. All of this is done by a third-party, and may include vault storage to keep the payment card data. In either case, the same general thing happens in a sale; the tokenized number is de-tokenized and matched with the real card data. More on that below.

What Happens During A Tokenized Sale?

When it comes time to process a payment, whether that is through an eCommerce site, an app, or a mobile wallet, the payment processing steps are generally similar. Here is a simplified process for your perusal below.

  1. The customer initiates payment for a product or service.
  2. Next, the merchant sends the token to the acquirer.
  3. Acquirer routes the token to Visa’s network.
  4. Visa sends a token to the card issuer.
  5. Issuer returns token and authorization.
  6. Viola! A sale is complete.

Check out the screenshot below for a visual example of tokenization, courtesy of Visa’s Infographic, How Tokens Are Used.

Tokenization

As we’ve discussed, tokenization relies on a completely random, traceless value as the surrogate. This process is unlike encryption which relies on a mathematical algorithm. Let’s take a look at how tokenization and encryption compare.

Tokenization vs. Encryption

Tokenization and encryption are similar in that the data is “hidden” from would-be interceptors, but the process of each is totally different. In tokenization, the customer data gets replaced with a token — a completely random number. In tokenization, typically a vault stores all of the actual data on a “table.” After de-tokenization, this random string of digits (sometimes alphanumeric) are matched up with the real account. The main takeaway here is that the token gets passed to the merchant and eventually back to the table, without exposing the real payment card information to the merchant.

With encryption, the payment card information runs through an algorithm, a mathematical process, to transform the original data into something indecipherable until unlocked with the “key” during processing. Since the process isn’t randomized, the algorithm is somewhat vulnerable to hackers trying to crack the code.

In short, encryption is mathematically reversible, and tokenization is not. Additionally, encryption is not a complete, end-to-end security method, like tokenization. Payment processing costs can be a bit higher with encryption as it requires more computational power (e.g., rotation of “keys”) than tokenization throughout the payment processing cycle.

Considering The Pros & Cons

While tokenization can be cheaper to implement per transaction than encryption, and it isn’t mathematically reversible, there are some issues to consider. Because vaulted tokenization requires central management, there is a lot of pressure to maintain a wholly secured vault (however, sometimes the issuer (e.g., Visa) hosts the vault, too).

Additionally, tokenization does significantly reduce PCI scope for merchants, meaning there is less pressure on the merchant for payment security overall. That means less work for you to do in order to remain PCI compliant. While encryption is a generally accepted security measure, it does not do anything to reduce your PCI scope or lessen the work you must do to stay PCI compliant. 

However, tokenization is still a relatively young whippersnapper in the world of payment security. Encryption has been around for a while, and consumers regard it well. But tokenization has become more attractive to those who understand that the payment security industry must stay a step ahead.

Tokenization’s Protective Role In Payment Processing

Tokenization Vault Security

There are a few ways that tokenization protects information during payment processing. As mentioned before, customer data is made useless to a would-be interceptor because it’s no longer the actual information; it is a token that substitutes the actual data. The other way that tokenization protects data is that in the case of digital wallets, the credit card number isn’t stored on the customer’s device, either. That means thieves can’t retrieve credit card numbers from a phone, tablet, watch, or connected device when a customer and a merchant utilizes a digital wallet.

As the payment security industry evolves, we’ll continue to move further away from sharing a physical card and any identifying information that comes with it. Tokenization successfully separates our sensitive data from the transaction by taking the physical card out of the equation entirely, and it does this by tokenizing parts or all of the credit card number.

Because tokenization also removes the merchant from the equation when it comes to transmitting highly sensitive data, it also significantly reduces a merchant’s risk to fraud — from both internal and external threats. That being said, there are some things to consider depending on how you implement tokenization.

How Can Merchants Adopt Tokenization?

There are several ways that you can adopt tokenization into payment processing for your physical, eCommerce shop, or your mobile app! The simplest way for the brick-and-mortar shop to tokenize payments is to get a contactless, NFC-capable reader. Mobile wallets already tokenize the data so as long as you can accept payments from these mobile wallets without having to do anything yourself. As far as tokenizing other transactions, you can ask your existing payment processor about tokenization options for your POS. If you are an eCommerce shop or you have an app, MasterCard and Visa both offer solutions, too.

Mastercard offers a free, optional service called Digital Secure Remote Payment (DSRP), and all you need to do is contact your acquirer to see if they support DSRP, and then integrate the mobile app with the digital wallet partner. You can also look into the Visa Developer Platform — a program offered by Visa where their team works with you to create your mobile payment application with Visa Token Service SDK.  

Sometimes, there is more to the whole tokenization shift than patch-on solutions, however. If your business has a tremendous legacy system with other data to consider, a more complex, third-party solution may be necessary. While we won’t get into all the nitty gritty in this post, here are a few things to consider below.

Companies Specializing In Tokenization

If you inherently deal with sensitive information as a part of your business model and you need to create a custom solution, you will need to find a PCI compliant company with a trustworthy, highly secure tokenization method and vault. Here are some things to ask:

  • How are tokens randomized? How protected is the “key” that de-tokenizes?
  • Is a reversible algorithm used? If so, how protected is that software?
  • And ultimately, how protected is the table holding the data and the vault protecting it?

While it becomes a bit more tricky to ensure that all of the right security measures are in place, tokenization can still reduce your risk as a merchant and help protect data from a breach. However, you’ll need to ensure due diligence when it comes to new or legacy systems. The PCI Council says it best in the PCI DSS Tokenization Guidelines Document:

Tokenization solutions can vary greatly across different implementations, including differences in deployment models, tokenization and de-tokenization methods, technologies, and processes. Merchants considering the use of tokenization should perform a thorough evaluation and risk analysis to identify and document the unique characteristics of their particular implementation, including all interactions with payment card data and the particular tokenization systems and processes.

Do You Need Tokenization To Process Credit Cards?

Keep in mind that at this point, there are no hard and fast rules as to exactly how to implement tokenization, so if you are a merchant, the ball is in your court to make the best decision for your business needs. That being said, tokenization can significantly reduce the merchant’s liability when it comes to payment security. And keep in mind: You don’t have to carry the burden of tokenization yourself. There are ways to utilize the expertise of other companies and hardware to get the job done. If your business is just looking to improve payment processing and you don’t need or want to store sensitive payment card or personal data, using the solutions discussed in this post provide a much simpler way to navigate tokenization.

While it’s not mandatory — and is undoubtedly flexible in implementation –, tokenization remains one of the fastest growing ways to keep data more secure and shift the risk of fraud away from the merchant while protecting the transaction from end to end.

The post What Is Credit Card Tokenization? appeared first on Merchant Maverick.

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Lowe’s Credit Cards VS Home Depot Credit Cards – Which Is Right For Your Business?

Lowe’s and Home Depot are two of the biggest home improvement juggernauts. Like many big box stores, they both offer an array of co-branded credit cards.

These cards give you rewards or pay lower interest rates when you buy at either store. This makes them appealing options if you frequent either Lowe’s or Home Depot. Should you have both stores nearby, selecting the right card could ultimately save your business a decent amount of money.

Ready to find out the best Lowe’s or Home Depot options for your business? Read through to find out!

Best Standard Credit Card: 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

For businesses that shop frequently at either Lowe’s or Home Depot, but need a card that can be used elsewhere as well, there’s only one choice: Lowe’s Business Rewards Card From American Express. That’s because all of Home Depot’s cards can only be used in-store, and the rest of Lowe’s offerings can only be used in-store, too.

This Amex card features three points per dollar spent at restaurants and U.S.-based office supply stores, and on wireless telephone services purchased straight from U.S. service providers. You’ll then collect two points per dollar spent on Lowe’s purchases and one point per dollar on everything else. On top of those rewards, you’ll also get 5% off when buying at Lowe’s—effectively giving you 7% back when buying from the home improvement store.

Once you get your rewards, you’ll be able to redeem them for Lowe’s or American Express gift cards. Besides the base rewards scheme, this card lets you snag 5,000 bonus points after you spend $100 in your first 30 days.

You’ll also get access to standard credit card features. These include employee cards, an extended warranty of up to two years, purchase protection against theft and damage, and travel insurance. Additional bonuses include no annual fee, although there is a foreign transaction fee of 2.7%.

Best Store Card: Lowe’s Advantage Card

Lowe’s Advantage Card


Lowe’s Advantage Card
Compare

Annual Fee:


$0

 

Purchase APR:


26.99%, Variable

When it comes to a basic in-store card, Lowe’s takes the cake again. The Advantage Card nets you 5% off eligible Lowe’s purchases as its base rewards feature. This discount cannot be used in combination with coupons, price-matching, or various other discounts, including military and employee ones.

You can also opt out of the 5% discount and into two different special financing options. The first financing method scores you six months 0% APR on purchases above $299.

Lowe’s second option (called “project financing”) enables special financing on purchases above $2,000. Here’s its payment table:

  • 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 either financing option is selected, the 5% discount will be voided. With this in mind, the financing routes should only be used when necessary. Note that despite these special financing rates, the Advantage Card’s standard APR sits rather high.

Also, this is not marketed as a business-specific card; however, using a personal card for business can still be an excellent option.

Best Rewards Program: Lowe’s

Keeping with the theme, Lowe’s has the best overall rewards program. The reason for this is simple: every Lowe’s card features—at the bare minimum—5% off every purchase made with Lowe’s. Home Depot, meanwhile, either offers a convoluted gas discount with their Commercial Account Credit Card and Commercial Revolving Charge Card or no rewards at all.

Besides that 5% off, Lowe’s includes additional rewards with their American Express co-branded business card. This means that the Business Rewards Card can ultimately collect up to 7% cash back if you’re using it at Lowe’s. This rate is very impressive and is ultimately one of the best cash back rates across all credit cards.

Home Depot’s lone rewards program (bundled with the Commercial Account and Commercial Revolving cards) features a $0.10 per gallon savings when you fuel up at Shell and other select gas stations for every $100 purchased at Home Depot. Because you’re able to buy up to 20 gallons of gas with the savings in effect, you essentially get 2% cash back earmarked for gas.

Best For A Large Purchase: Home Depot Project Loan Card

Home Depot Project Loan Card


Home Depot Project Loan Card
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Annual Fee:


$0

 

Purchase APR:


7.99%, Fixed

While Lowe’s leads the way in most categories, Home Depot still has one trick up its sleeve. That trick comes in the form of their Project Loan Card.

Aimed at those working on large projects, this card is technically a loan. You’ll be able to receive a loan between $2,500 and $55,000. It offers a fixed APR of 7.99%. You’ll have 84 months to pay off the loan and can pay in-full early without penalty.

Once approved for the Project Loan Card, you’ll have a six-month window to buy products or installation services. There are no annual fees included with this card. However, because it is ultimately a loan, you won’t score any rewards like you might with a regular credit card.

Best APR: Lowe’s Advantage Card

Lowe’s Advantage Card


Lowe’s Advantage Card
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Annual Fee:


$0

 

Purchase APR:


26.99%, Variable

For the best APR, we come back to the Lowe’s Advantage Card. While its standard APR is higher than most cards, the special financing attached with this card sets it apart.

As mentioned earlier, you’re able to forgo the card’s 5% discount on Lowe’s purchases and instead choose one of two financing options. The initial option grants you six months 0% APR on purchases above $299.

For the second option, you can nab special financing on purchases at Lowe’s that are above $2,000. Its rates and time frames are as follows:

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

Other cards may offer better standard interest rates. However—because of its pair of options—the Lowe’s Advantage Card makes a great tool for those making a large hardware purchase and needing to carry a balance.

Final Thoughts

All told, Lowe’s generally offers the better cards. Between higher reward rates and more appealing APRs, Lowe’s cards are simply more appetizing. However, Home Depot still has an excellent option if you need a larger loan for a project.

Didn’t find a card you’re looking for? Get a bigger picture on all of Lowe’s credit cards. Or take a peek at Home Depot’s offerings.

The post Lowe’s Credit Cards VS Home Depot Credit Cards – Which Is Right For Your Business? appeared first on Merchant Maverick.

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What Is An SMS Payment And How Does It Work?

We all know and love our Short Messaging Service (SMS) — better known simply as the text message. But did you know that you can start taking SMS payments for your business? And that it is relatively easy to get started?

In the United States, we are just now warming up to the idea of sending and receiving payments by text, but businesses throughout the world have already adopted SMS payments for everything from mass transit tickets to lattes.

While Americans are less likely to pay by text for everyday purchases, text payments are still an undeniably growing trend. You may already be familiar with payments by text when it comes to charitable donations, but home service providers (e.g., AT&T) are starting to offer SMS payments for their customers as well.

Text payments offer potential growth for many other types of businesses, too. Pizza shops, salons, or any business that has ‘regulars’ could benefit from text payments. SMS payment services are probably not for everyone, however, so let’s take a look at how text-to-pay works and if it’s right for your business.

How Do SMS Payments Work?

SMS Ordering

When it comes to the nuts and bolts of how SMS payments work, it’s pretty simple, really. While there may be some variations with each company that offers text messaging payment services, generally you can expect the following elements when it comes time to pay:

  1. A business sends a text to their customer’s phone number or the customer texts a shortcode number to the business to initiate the sale.
  2. After communicating what product or service the customer wishes to purchase, the business sends the customer a link to a secure, mobile-friendly payment form.
  3. The customer enters their payment information and can typically approve saving the card on file for recurring payments or a future purchase.
  4. The customer may get a unique code to complete the purchase.

The customer may also get another verification text from the payment processing company to confirm their intent to buy. As stated above, the exact process may vary by company, but you can expect a similar procedure to complete the sale.

Mobile Carriers Vs. Payment Processors for Text Payments

Many people associate text message payments with charity donations (often the amount is added to their phone bill). What is lesser known is that phone carriers generally only allow organizations to accept donated amounts in $5 or $10 increments. By setting up these limits, phone carriers reduce their own risk from non-paying customers. While the phone carrier setup can work great for flash-giving campaigns and allow an organization to avoid paying some payment processing fees, it isn’t a viable solution for businesses.

Enter companies like Relay, Pagato, and Sonar. These companies, and those like them, support SMS payments by integrating their messaging services with secure, PCI-compliant payment processing.

What Do You Need to Accept SMS Payments?

To get started accepting SMS payments, you’ll need to choose the company with the services that fit your needs best. There are some differences between the ways companies like Relay, Pagato, and Sonar price their services. Let’s briefly take a look at each of these three examples.

Relay (formerly Rhombus):

Relay charges $50/month for 250 “tickets” which refers to completed conversations. With that, you also get 1000 free SMS texts. All plans include automated responses, unlimited contacts, customer segmentation, and other engagement tools. Don’t forget about the actual credit card processing fees, however! Relay integrates with Stripe, and you pay 2.9% + $0.30 per successful transaction. You can accept every major card at the same rate with Stripe processing. (If you aren’t familiar with Stripe, check out our Stripe Payments Review.)

SMS Payments Relay

Pagato:

Pagato integrates with Stripe, Braintree (read our review), and Quickbooks Payments (read our review). In addition to the payment processing fees of your merchant account, you’ll pay 1% per transaction with a minimum of $0.20 per transaction. With Pagato, you can accept payments through SMS and social media channels like Instagram and Facebook, too. You won’t have additional setup, monthly, or hidden fees.

SMS Payments Pagato

Sonar:

Sonar offers packages starting at $24.67/month and $0.025 per SMS message. You can send automated messages, track customer data, set up campaigns and even A/B test them as well. Sonar integrates with Stripe, and your payment processing fees are 2.9% + $0.30 per transaction.

SMS Sonar

These are examples of some lesser-known companies, but the more prominent players like Square and PayPal allow you to send a text with a link to pay individual customers, too. The Square Cash App and PayPal don’t have the muscle to do much beyond sending a link to pay, however. You can’t A/B test marketing campaigns for an offer that you send out with Square or PayPal, for instance.

Keep in mind that most of the SMS messaging platforms mentioned above offer a free trial period and a demo to learn more about the exact features. So don’t hesitate to ask a lot of questions to get the information you need. It’s also a good idea to meet with your team and discuss the benefits of each platform, and of course, determine if your sales team has the bandwidth to have multiple open text conversations with customers. Text can be a powerful way to connect to your customers, but it is definitely not suited for every business model.

Which Types of Businesses Benefit Most From SMS Payments?

mobile-card-payment-app-service

Without a doubt, there is value in using SMS messaging to build a marketing campaign and nurture those ongoing relationships with your customers. When you consider that the global average open rate on a text is more than 90%, it makes sense to start building your phone list and reaching out that way.

As far as what businesses benefit from adding SMS payments to the mix, consider this:

If your business model provides delivery, your revenue depends on recurring payments, or you target a “repeat” customer base, SMS payments can make a lot of business sense. However, you need to have the staff and time to support the nurturing of customers via text. Text conversations can be a bit longer than a phone call if there is a specific issue, so training your team on escalation procedures can help you both save time and money with SMS texts.

All this connection can be great, but not all customers are going to love texting or getting “salesy” texts from you. While SMS texting and payments can help your sales team if you use it the right way, some may find automated sales messages impersonal. Keep in mind who your customers are and what supports their journey with you when you set up your SMS services.

Another significant benefit to SMS payments is the secure and compliant payment processing services that you can integrate with, such as Stripe. Because you don’t transmit the credit card data or store it on your servers, you can significantly reduce your liability when it comes to fraud risks. Not to mention that your customer has a fast and easy way to pay you, and all of it happens from their phone!

Are SMS Payments Right For You?

Being able to take payments by text offers potential — as long as the benefits outweigh the costs. Features vary by company, so do compare service packages before making a decision. One company may find a lot of value in the extra capabilities to target and segment lists, while another may be more focused on cutting down telephone orders. What services you choose mainly depends on your business model. Because text messaging offers a clear path to your customers’ hands, it may be worth finding the right balance to connect, engage, and encourage your customers to pay by text, too.

If you are discovering what else is out there in payment processing, be sure to check out our resources here at Merchant Maverick. Our Merchant Account Comparison Chart is a great starting point for payment providers! 

Paymentcloud Durango Soar Payments Host Merchant Services

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General Purpose High-Risk, eCommerce, CBD Oil, Firearms & Ammunition, Adult, Credit Repair, Bad Credit, Vape/E-cigarettes, Airlines

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The post What Is An SMS Payment And How Does It Work? appeared first on Merchant Maverick.

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How To Start And Fund A Consulting Business: The Step-By-Step Guide

Do you have a tendency to share your knowledge and experience with others? Do you enjoy giving advice that helps others better their businesses … or their lives? Did you know that you could get paid just for sharing your expertise?

While it may sound too good to be true, that’s exactly what a consultant does. A consultant is an expert that provides knowledge, expertise, and training to others for a fee. Consultants advise their clients on a variety of topics, from how to implement the latest technology to how to create a successful marketing campaign.

Becoming a consultant does not require special training, credentials, or education. You simply need to be an expert in your field. You also need to have passion — not just for your industry but for helping others truly find the right solutions for their problems.

Consultants are organized, know how to network, and are always willing to learn more about their field to provide the best services to their clients.

If this sounds like you, becoming a consultant may be your new career path. The great thing about consulting is that anyone with knowledge and expertise can do it. Starting your own consulting business has low overhead costs and doesn’t require a lot of capital from the get-go. In fact, you can even start your own business from your home office.

But maybe your goals are much bigger. Maybe you want to have the top consulting firm in your area. It doesn’t matter if you want to simply be your own boss and make a decent income or if you want to grow your business to epic proportions — this guide is for you.

We’ll explore the steps you need to take to get your business off the ground. From finding your niche to funding expenses and spreading the word about your business, this guide explores what it takes to open and operate a successful consulting business. Let’s jump in and get started!

Pick Your Niche

business loan reasons

We’ve all heard the saying, “Jack of all trades, master of none.” When clients are seeking a consultant, they don’t want someone that knows a little bit about everything. Instead, they want to work with a consultant that knows everything about one thing. This is why it’s so important to pick your niche.

To get started, consider your skills and knowledge. What industry are you familiar with? Clients are looking for an expert in their field, so identifying the industries you already know is important when selecting your niche.

Next, you need to consider what problems and pain points your chosen industry is facing. You can do online research to find out what challenges are common in this industry. Check out blogs and industry forums to get an idea of common complaints and problems. You can even talk directly with people in the industry to find out what obstacles and setbacks they face.

Once armed with this information, you need to identify your own skills and knowledge that could be applied to this field. For example, let’s say you’re knowledgeable about the construction industry. One of the common pain points in this industry is a lack of communications. Are you familiar with mobile and cloud-based software? Great! You could use this knowledge to help businesses streamline communications and improve efficiency.

When you start your consulting business, your goal shouldn’t just be something generic like, “I want to help other business owners.” Instead, you should have a more specific purpose in mind. “I help businesses in this industry find and implement the newest and best software solutions to grow their business in just 3 months.” This also serves as your value proposition. In other words, this is the value you offer; something that sets you apart from other consultants. Remember to effectively communicate to your clients what you can do for them.

Still unsure of where to get started? Consider one of these niches for your consulting businesses:

  • Biotech
  • Cannabis Business
  • College
  • Construction
  • Customer Service
  • Dental
  • Financial
  • Food Safety
  • Grant Writing
  • Human Resources (HR)
  • Information Technology
  • Leadership
  • Management
  • Marketing
  • Medical
  • Nutrition
  • Project Management
  • Real Estate
  • Safety
  • Sales
  • Security
  • SEO
  • Social Media
  • Supply Chain
  • Technology

After you’ve selected your niche, do your research to find out what certifications and licenses you need to legally operate your business. In most instances, you’ll find that a business license in your state of operations is all that you need to open your consulting business.

One last thing to remember is that even if you’re knowledgeable about your niche right now, industry trends and changes can occur in an instant. Make sure you stay up-to-date on what’s happening in the industry to ensure you’re always qualified to assist your clients.

Make Your Business Plan

Even if your consulting business seems pretty straightforward, it’s still necessary to have a business plan. There are a few reasons you need a business plan. The first is that your plan maps out your goals and how you plan to reach those goals. A business plan is also necessary when you seek funding through banks or other lenders.

Because every business has a different vision, no two business plans are exactly alike. However, there are a few common components that should be included in all business plans. Those components are:

  • Executive Summary: Highlights what will be discussed in your plan and summarizes what your business hopes to accomplish
  • Company Description: Includes key information about your business and the customers that you will serve
  • Competitive Analysis: Who are your competitors, and what are their strengths and weaknesses?
  • Organization & Management: An outline of the setup of your organization and names and summaries of the job responsibilities of your management team
  • Market Analysis: An analysis of your industry now and in the future
  • Marketing Plan: An outline of the marketing strategies you will use to draw clients to your business
  • Financial Projections: Your expectations for future revenue based on market research

Register Your Business

Before you launch your business, you have to register with federal, state, and local agencies. You will need to register your business name with the state in which you operate. In addition, you must register with the Internal Revenue Service to get an Employer Identification Number (EIN) if you ever plan to hire employees. It’s imperative to obtain licenses and permits to operate your business based on state and local regulations. You must register your business if you plan to seek business funding now or in the future — or if want to open a business bank account. Establishing a business is legally required, but it also makes you look more professional and legitimate to your clients.

One important step to take when registering your business is choosing your business structure. Your business structure will be important in determining what you’ll pay in taxes. Your business structure may also offer protection from personal liability for the debts and obligations of your business. The different types of business entities include:

Sole Proprietorships

This structure is the easiest to form and does not require filing with the state. With a sole proprietorship, profits and losses from the business are reported on the business owner’s personal tax return. The major drawback of this business structure is that the business owner – you – are held personally liable for the debts and obligations of the business.

Partnerships

A partnership is established by businesses with two or more owners. There are three common types of partnerships: general partnerships, limited partnerships, and limited liability partnerships.

  • General Partnership (GP): This type of partnership has the fewest ongoing requirements. These are also the easiest to form and don’t require state filing. The drawback is that partners in a GP are personally liable for the debts and obligations of the business.
  • Limited Partnership (LP): In a limited partnership, only the general partner(s) has unlimited liability. The other partners — known as limited partners – have limited liability. This simply means that personal assets can’t be used to cover the debts and liabilities of the business.
  • Limited Liability Partnership (LLP): In a limited liability partnership, all partners have limited liability. However, partners may be held liable for their personal actions. This structure is reserved for professional service businesses.

Limited Liability Companies

A limited liability company, or LLC, is independent of its owners. The personal assets of the owners are kept separate from business debts. An LLC is taxed similarly to sole proprietorships and partnerships.

Corporations

If a corporation is the right structure for your business, there are two options to consider: C corporations and S corporations.

  • C-Corporations: C-corporations are independent of their owners. There is no limit on the number of shareholders in a C-corporation. C-corporations are taxed on shareholder dividends and corporate profits.
  • S-Corporations: An S-corporation is also independent of its owners. Owners report their share of the profits and losses on their own personal income tax returns. There are limitations to the number of shareholders with this structure.

When choosing your business structure, you need to keep a few considerations in mind. If you have multiple owners, a partnership is a good route to take. If you want to protect your personal assets but don’t want a higher tax rate, consider establishing an LLC. If you plan to raise large amounts of capital in the future, a corporation might work best for you. You can learn more about what business structure best fits your needs by consulting with an attorney or accountant.

Get Business Insurance

Do I need business interruption insurance

Business insurance is critical for the protection of your business. From property insurance that protects your office building to liability insurance that safeguards you from lawsuits, there are a few different types of business insurance to consider for your consulting business.

General Liability Insurance

If you operate a brick-and-mortar business, you need general liability insurance. This protects your business in the event that something happens to a client on your property. For example, if a client slips and falls in your office, they could file a lawsuit against you. With general liability insurance, you won’t have to pay all associated costs out-of-pocket.

Professional Liability Insurance

Professional liability insurance is also known as errors and omissions (E&O) insurance. This type of insurance protects you from lawsuits that may be filed by clients. Let’s say that you consult with a client on a project, and the project ultimately ends up failing. The client believes that the failure of the project was your fault and files a lawsuit. If you have E&O insurance, attorney’s fees, settlement expenses, and court costs will be covered up to the full amount of your policy.

Worker’s Compensation

If you have employees, worker’s compensation is another type of insurance your business needs. Worker’s compensation covers the medical expenses, wages, and legal fees of an employee that is injured on the job or suffers a work-related ailment. Most states require all W2 employees to be covered under worker’s compensation insurance, but laws vary by state.

Commercial Property Insurance

If you have a commercial property for your consulting business, consider getting commercial property insurance to protect your assets. This type of insurance protects you from losses that may occur from burglary, fire, or natural disasters.

Separate Personal & Business Expenses

It may be tempting to simply use your own personal bank account and credit cards for your business. Since the business is yours, there’s no harm in mixing your business and personal finances, right?

Actually, the wisest move is to keep your business and personal finances separate. One of the most important reasons for doing this is because it will make filing your taxes much easier. Imagine that the deadline is ticking to file your return with the IRS, and you (or your accountant) are stuck spending hours separating business and personal records. If you’re audited after filing, having separate records for business and personal income/expenses will make the process go much more smoothly.

Keeping your business and personal finances separate is also helpful in limiting your liabilities from creditors. If there is no clear separation between you and the business, creditors could potentially use your personal assets for unpaid debts and obligations, even if your business is structured as a corporation or LLC.

Separation of personal and business expenses is also important for building your business credit. If you’re using your own personal credit cards, you may increase your personal credit score. However, this won’t affect your business credit history. If you plan on applying for business loans in the future, boosting your business credit profile is critical to qualifying for higher loan amounts and the best rates and terms.

The first step to separating your business and personal finances is to open a business checking account. This bank account can be used for depositing money, writing checks to vendors, making online payments, and keeping an eye on the expenses and income of your business. To open an account, you will need your EIN, Social Security Number, business address, and business license. You may also need other documentation, such as a copy of the articles of incorporation on file with your state.

Even though you can keep an eye on your finances through your business bank account, it’s also important to set up a dedicated accounting system for your business. This will allow you to closely keep track of the money coming in and going out of your business. You may opt to hire a bookkeeper for this task, or you can use accounting software to track everything yourself. We’ll go into more details on this type of software a little later.

Finally, you can apply for a business credit card to cover recurring expenses for your business, such as your lease or utility payments. Using and paying off your business credit card responsibly will help strengthen your business credit profile.

Unsure of which card is right for you? Start with these recommendations.

Chase Ink Business Cash

Chase Ink Business Cash



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Annual Fee:


$0

 

Purchase APR:


15.49% – 21.49%, Variable

The Chase Ink Business Cash card rewards you just for using your card on business expenses. You can receive 5% cash back on internet, cable, phone services, and purchases from office supply stores. However, this is capped at the first $25,000 spent each anniversary year.

You can also earn 2% back on purchases at gas stations and restaurants. This is also capped at the first $25,000 spent per anniversary year.

For the rest of your purchases, you can take advantage of unlimited 1% cash back rewards. As a new cardholder, you can receive a bonus of $500 cash back if you spend $3,000 within 3 months of opening your account.

This credit card has a 0% introductory APR for the first 12 months. After the introductory period, interest rates are 15.49% to 21.49% based on creditworthiness. There is no annual fee associated with this card.

Additional benefits for Chase Ink Business Cash cardholders include free employee cards, purchase protection, and extended warranty protection. You must have excellent credit to qualify for this credit card.

Spark Cash Select For Business

Spark Cash Select From Capital One


capital one spark cash select
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Annual Fee:


$0

 

Purchase APR:


15.24% – 23.24%, Variable

Capital One’s Spark Cash Select for Business is designed for borrowers with excellent credit scores. One of the standout features of this card is the unlimited 1.5% cash back you receive just by using your card. You can cash out your rewards at any time.

If you become a new cardmember and spend $3,0000 within the first 3 months of opening your account, you’ll receive a $200 cash bonus.

You’ll also be able to enjoy a 0% introductory APR for the first 9 months. After the introductory period, your APR will be from 15.24% to 23.24% based on creditworthiness. This card does not have an annual fee, and you can receive employee cards at no cost.

Seek Business Funding

One of the best things about setting up your consulting business is that you may be able to get started with very little capital. Ultimately, though, this depends on the goals of your business. For example, if you plan to only consult with clients online, you can work right out of your home office. This eliminates the need for a dedicated commercial office, which comes with expenses such as monthly rent and utility payments.

On the other hand, you might want to open a brick-and-mortar business immediately. This would require more capital from the start. Even if you start small, you may later expand your business by purchasing or leasing a larger building and hiring employees.

Whether you start off big or you plan to grow in the future, you’ll need capital. In some cases, you may be able to use your revenue to fund your expenses and growth. In other instances, you’ll need a financial boost from a business lender.

Fortunately, there are many financing options out there if you know where to look. Let’s explore the types of funding available to you, along with our lender recommendations.

Personal Savings

If you would prefer to not work with a lender, using personal savings is an option available to you. If you use your own money, you don’t have to worry about making payments to a lender. You’ll also save money because you won’t pay interest or fees that are charged by a lender. On the downside, if your business isn’t successful, you risk losing your savings.

Friends & Family

Have a friend or family member with cash to invest? Pitch them your business idea and let them know why investing in you is a great idea. Have your business plan in hand and present your ideas to them just as you would any other lender. If they decide you’re worth the investment, make sure to get everything in writing to protect all parties.

There are two ways to get loans from someone you know. You can choose debt financing, which means that you’ll make payments toward your principal balance plus interest on a regularly scheduled basis, just like a traditional loan. Or you can receive money in exchange for ownership in your business – also known as equity financing. While you won’t have to repay immediately, your friend or family member will collect a share of the profits over time. Depending on your agreement, they may also have some level of control in the decision-making process of your business.

Unsure of which route to take? Learn more about debt vs. equity financing to determine which option is best for your business.

Rollovers As Business Startups (ROBS)

What if there was a way to get the capital you need to start or grow your business without taking on debt? Sounds too good to be true, doesn’t it? But with a rollovers as business startups (ROBS) plan, you can do just that. The only catch? You have to have a qualifying retirement plan.

Early withdrawal of your retirement funds results in penalties. However, a ROBS plan allows you to leverage your funds without having to pay these penalties.

With a ROBS plan, you set up a new C-corporation. Then, you create a retirement plan for your newly created corporation. Next, you roll over funds from your existing retirement plan. These funds can be used to purchase stock in your new business, providing you with the capital you need to start or expand your business.

The best part of a ROBS plan is that you’re using your own funds. This means no debt, no interest or fees, and no repayments to a lender. However, you are putting your retirement funds at risk if your business fails.

Recommended Option: Guidant Financial

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Pre-qualify

Many small business owners that get capital through a ROBS plan hire a ROBS provider to do the heavy lifting. Guidant Financial is a ROBS provider that can help you get started.

To set up a ROBS plan with Guidant Financial, you need to have a retirement plan or pension account with at least $50,000. Most plans qualify, including:

  • 401(k)
  • 403(b)
  • Traditional IRA
  • Keogh
  • TSP
  • SEP

Guidant Financial can help you roll over up to 100% of your account balance. In addition to having a qualifying plan, you must also meet these requirements:

  • Must be an employee of the business
  • Must have a business to fund

You can use your funds for any business purpose, whether you’re buying an existing business, funding startup costs, or paying expenses related to expansion.

To get started, you must pay a $4,995 startup fee. Since this isn’t a loan, you won’t have to make debt repayments. However, you will have to pay a monthly administration fee.

If you don’t qualify for a ROBS plan or you’re seeking other types of funding, Guidant Financial offers other options including Small Business Administration (SBA) loans, unsecured business loans, and equipment leases.

Lines Of Credit

A line of credit is one of the most flexible forms of financing. This is a type of revolving credit (similar to a credit card) that allows you to make multiple draws. As you repay your principal balance (plus fees and interest), funds will become available to use again. Fees and interest are only charged on the borrowed portion of funds.

With your line of credit, you can initiate draws as needed. Once you draw funds, they’ll be transferred to your bank account and are available to use in 1 to 3 business days in most cases.

You can spend up to and including the credit limit set by your lender. Most lines of credit can be used for any business purpose but are particularly useful for unexpected expenses, filling revenue gaps, or covering extra expenses due to a seasonal increase in business.

Recommended Option: Fundbox

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Fundbox is a lender that has lines of credit up to $100,000 for qualified small business owners. The lender charges set draw fees starting at 4.66% of the borrowing amount. You can choose to repay Fundbox over terms of 12 or 24 weeks, and payments are automatically deducted from your linked business checking account.

You can be approved instantly and put your line of credit to work for you immediately. Once you initiate a draw from your account, funds will hit your bank account within 1 to 3 business days.

Qualifying for a Fundbox line of credit is easy. The minimum requirements are:

  • Must have a business checking account
  • Must have a U.S.-based business
  • At least 2 months of activity in accounting software or at least 3 months of transactions in your business bank account
  • At least $50,000 in annual revenue

Your credit limit will be based on the performance of your business.

Equipment Loans

Whether your consulting business is home-based or you operate out of a commercial property, you will need some equipment to get started. Some equipment you may need for your business includes a computer, printer, office furniture, and computer software. If you don’t have the funds available in your bank account, consider applying for equipment financing.

Equipment financing is a type of funding used to purchase equipment, furniture, and fixtures for your business. Equipment loans can also be used to purchase a commercial vehicle if one is needed to drive to meet your clients if you don’t want to take out an auto loan. There are two types of equipment financing available: equipment loans and equipment leases.

With an equipment loan, you’ll make regularly scheduled payments to a lender over a set period of time, such as five years. Each payment will be applied to the principal – the amount you borrowed – as well as fees and interest charged by the lender. Once you’ve made all payments as scheduled, the equipment belongs to you. You can continue to put the equipment into use or sell it.

With equipment leases, you also make scheduled payments to a lender. However, your lease terms are typically a few years shorter. Once you’ve made all scheduled payments, you return the equipment and sign a new lease for new equipment. You never truly own the equipment, but this is a good option for anyone that wants to update their equipment every few years.

Recommended Option: Lendio

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Lendio isn’t a direct lender. Instead, it’s a loan aggregator that can connect you with its financing partners to help you get the best financing offer for your situation.

One of the financial products offered through Lendio is equipment financing. You may qualify for funding of $5,000 to $5 million for the purchase of your equipment. Loan terms are 1 to 5 years with interest rates starting at 7.5%.

Your funds can be used for almost any equipment purchase, including software, furniture and fixtures, and even appliances and HVAC units for your office.

To qualify, you must meet these minimum requirements:

  • Time in business of at least 12 months
  • At least $50,000 in annual revenue
  • Personal credit score of 650 or above

If you don’t meet these requirements, Lendio may still have an option for you. Just fill out a quick application to find out what you can qualify to receive. Lendio also offers additional financial solutions, including SBA loans, lines of credit, term loans, and startup loans.

Personal Loans For Business

If you’re a brand-new business, you may not qualify for other financing options. This is because lenders look at annual revenue, business credit profile, and your time in business to determine if you’re a risky borrower. If you don’t meet these qualifications, you won’t be able to get affordable small business funding.

However, there is an alternative solution. You can apply for a personal loan to use for business purposes. With this type of financing, a lender considers your personal credit history and income to determine if you qualify.

In most cases, you can use a personal loan for business for any purpose, from purchasing needed equipment to hiring new employees, using as working capital, or paying startup costs.

Recommended Option: Upstart

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Upstart personal loans are available in amounts from $1,000 to $50,000. APRs range from 7.54% to 35.99%. Repayment terms are 3 or 5 years.

Upstart’s lending partners consider more than just your credit score when determining whether to approve your loan. Your years of credit, education, area of study, and job history are also considered during the application process.

To qualify for an Upstart personal loan, you must have:

  • Personal credit score of 620 or above
  • Solid debt-to-income ratio
  • No bankruptcies or public records
  • No delinquent accounts or accounts in collections
  • Less than 6 inquiries in the last 6 months

Business Credit Cards

We’ve already discussed business credit cards earlier as part of keeping your business and personal accounts separate. Business credit cards are great to have on-hand for unexpected expenses or recurring expenses for your business.

You can even score rewards just for using your credit card. Look for a rewards card that offers cash back or points to use toward perks like travel to get the most out of your card.

Recommended Option: Spark Classic

Spark Classic From Capital One


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Annual Fee:


$0

 

Purchase APR:


25.24%, Variable

Capital One’s Spark Classic for Business card is available to business owners with average credit. This card offers a 25.24% variable APR and no annual fee. Using your card responsibly helps build your business credit profile so you can qualify for other cards and financing offers in the future.

You can earn unlimited 1% cash back on all purchases with no minimum required to redeem. Other benefits include fraud coverage and alerts and employee cards at no additional cost.

Choose Business Software

card-not-present online shopping

Choosing the right business software can help you run your consulting business more efficiently. The first type of software you should invest in is accounting software or an online bookkeeping system. This allows you to keep track of your income and expenses, run financial reports, send invoices, and access your financials for tax purposes. As your business grows, you may opt to hire a bookkeeper or accountant, but in the beginning, you may be able to tackle this task yourself using the right accounting software.

New to accounting? Download our free ebook, The Beginner’s Guide to Accounting, to get a handle on the basics.

You’ll also need software that’s used for managing clients — from keeping updated contact information all in one place to setting and tracking appointments. There are programs designed specifically for consultants that offer client management, project management, tasks, and other features.

To accept payments other than cash, you’ll also need payment processing software. This software communicates between your bank and the bank of your client, allowing you to accept debit cards, credit cards, and other forms of payment. If your business is going to be based solely online, you can sign up for an online payment solution.

Finally, if you plan to do online consulting, you must invest in video conferencing software. There are multiple options available — some at no cost and others that charge a monthly fee.

Set Your Rates

In order for your business to be successful, you have to have revenue. Without revenue, you won’t be able to pay your expenses or the salaries of yourself or your employees. Without revenue, you also won’t be able to grow your business.

To make sure your business is successful and profitable, you need to set your rates. This can be a balancing act for most consultants. If you set your rates too high, it may scare away potential clients. If you shortchange yourself and set your rates too low, clients may not take you seriously or you might not bring in enough revenue to cover your expenses.

To set your rates, first decide how your pay structure will look. You have three options: per project, hourly rates, and retainers.

If you charge per project, you will need to figure out how long the project will be, what expenses may be incurred, and other factors. You may choose to bill for the entire project or break it down into monthly payments.

You can also charge an hourly rate. Take a look at your expenses and determine how much you would need to charge to be profitable. Also, be aware that the higher your rate is, the more your clients will expect from you. If you have the credentials, training, and education to justify charging $500 per hour, your clients will have high expectations of what you’ll provide.

Finally, you can also work on a retainer basis. With a retainer, you will work a specific number of hours for one set monthly fee.

When calculating your rates, make sure to list all of the expenses of your business. You will need to make at least enough revenue to cover these costs.

You also need to find out what your competitors are charging for their services. You can do this by going online to their websites, checking out their brochures, or making a quick phone call. Unless you have an obvious advantage over other consultants in your area, you want to make sure that your fees are competitive.

Bolster Your Web Presence

webbased

Prospective clients are going to have a difficult time finding you if you don’t have a web presence. This doesn’t mean that you have to invest thousands of dollars in setting up a fancy new website. However, you do need to have at least a basic website and social media profiles to provide clients with critical information about your business.

You can get started by setting up free social media pages on sites including Facebook and Twitter. Your pages should include your contact information, the services you offer, and office hours. As your business grows, you can post news and updates, videos, photos, and other media to draw in clients.

You also need to set up a company website. You could pay a web designer, but at this stage, you can certainly tackle the task yourself. Easy website builders make it simple to set up your website in just minutes, even if you’ve never created a website before. Make sure that you include your contact information, areas served, and the services you offer. If you have any credentials or training, add that information to your website, as well.

Later, you can add additional features to your website, such as videos, online appointment scheduling, and client testimonials.

If you want to learn more tips and tricks, check out our article on creating and maintaining your online presence.

Market Your Business

business loans for HVAC

Building your web presence is one way to get your name out to the public, but you should also implement a marketing and advertising campaign to further boost your business. The strategy you choose is based on a number of factors, including your marketing budget and your goals for the campaign.

One great way to market your business is through Facebook ads. You can easily set your budget and select your target audience. It only takes a few minutes to get your Facebook ads up and running. Learn more about social media marketing for your business.

Another advertising method you can use is a newsletter. Your newsletter doesn’t need an over-the-top design. Instead, a simple newsletter with important information is most effective. Use your newsletter to discuss current industry trends, current news about your business, and other relevant information. You can send a physical newsletter by mail, but this comes with costs including paper and envelopes, printing, and postage. A more affordable option is to offer an email newsletter. Make sure to include a sign-up option on your website and social media pages.

Another idea is to print up brochures for your business. Your brochure should include your services, your value proposition, the industries you serve, and biographical information, such as your credentials or training.

You can also take your knowledge and leverage it as a guest speaker at an event. You can speak at dinners, luncheons, and other functions for industry events or service organizations. If you don’t want to be a public speaker, you can attend industry events and network with potential clients. Networking is key to running a successful consulting business.

Cold-calling is also a way to attract new clients. Prepare your script before calling local businesses that could use your services. The goal of cold-calling is to get a meeting with the decisionmaker to sell yourself and your services to gain a new client.

Finally, word-of-mouth advertising is one of the easiest ways to bring in business. Satisfied clients that tell their friends, family, and colleagues about you or who take the time to write a referral or testimonial that you can use on your website can help drive more clients to your business.

Final Thoughts

Sharing your knowledge and expertise with others can be extremely lucrative if you know how to set up your consulting business. With careful planning — selecting your niche, setting your fees, and effectively marketing your business — you’ll have a better chance of reaching new clients and meeting your financial goals. Good luck!

The post How To Start And Fund A Consulting Business: The Step-By-Step Guide appeared first on Merchant Maverick.

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Do I Need Insurance For My Home-Based Business?

Do I Need Insurance For My Home-Based Business?

As a home-based business owner, you may think that your homeowner’s insurance is enough to protect your business in the event of an accident or a disaster, but it might not provide the coverage you need. According to the National Bureau of Labor Statistics, nearly 30% of homeowners run a business out of their home and up to 44% of small business owners (sole-proprietors, freelancers, and home-based businesses included) are not protected with proper insurance. Some homeowners insurance plans only cover up to $2,500 of business equipment loss and some plans do not cover a home-based business at all.

Most home insurance policies are there to protect the house and the homeowners — not a business. If you run a small business out of your home, you should consider adding business insurance as an endorsement to your plan or invest in business insurance separately. Your small business is your baby and one disaster could shutter those dreams. Why roll the dice?

Read on to see how to prepare your home-based business from future risks.

What is Homeowners Insurance?

Do I Need Insurance For My Home-Based Business?

Homeowners insurance is there to protect your house and your assets from disaster and destruction. In homeowners insurance language, there are various “perils” your policy will protect you from. A basic HO-1 plan protects you from 10 perils; a more comprehensive plan will protect you from 18 listed perils (or perils you and an insurance agent itemize.) The basic perils are:

  • Fire/lightning
  • Hail/windstorms
  • Explosions
  • Riots or civil commotion
  • Damage from flying aircrafts
  • Damage from vehicles (but not the insured’s vehicles; only other people’s)
  • Smoke damage
  • Vandalism
  • Theft
  • Volcanic eruptions

Notable exceptions to the most basic homeowners plans are earthquakes, flood protection, and sinkholes. These must be added as additional endorsements to any plan.

If you have a mortgage and are borrowing from a lender, it is usually a requirement of your loan to show you have a homeowners insurance policy. A basic homeowners insurance policy might protect up to $2,500 of business-related equipment stored inside a house at the time of a disaster, and that’s all. For businesses with more than $2,500 of equipment or which could be seriously affected by property damage, a homeowners policy is not enough coverage.

Does Homeowners Insurance Cover My Business?

A homeowners insurance policy will not specifically cover your business or your business assets in the case of an accident, disaster, or lawsuit. While your policy may cover up to $2,500 of business property stored inside your home, your policy will likely not cover more than that, and unless business items are listed specifically as covered in an expanded homeowners policy, you could see your business assets go up in smoke (or walk out in an act of theft, etc.). If you want to pay an additional $50 a month, you may be able to get an extended ceiling of protection on business-related items, but even that may not cover all the disasters or accidents your business might encounter.

True small business side-story: My mom, who taught childbirth and Lamaze classes as an independent contractor, kept all her teaching supplies in our garage. In 1996, Portland flooded, my house included. A box of my mother’s childbirth teaching tools washed away and, thankfully in an era before viral-videos, somehow our neighbor captured some pictures of plastic pelvises and laminated birth photos just floating down the street…

Why risk it? Right? Additional coverage will make sure that any business supplies (plastic pelvises included) are protected.

Most small business owners don’t think about insuring their businesses until an accident or disaster has already occurred. Don’t let insurance be an afterthought until it’s too late.

When To Buy Business Insurance Instead

If you are a home-based business owner and you are contemplating business insurance, it’s important to understand the benefits. Even minimal coverage could save thousands of dollars and grant you peace of mind. Homeowners insurance won’t protect your business from a potential lawsuit — or help if your business information is hacked online. Statistics from insurance giant Insureon show that 1 in 3 businesses go bankrupt because they are under-insured.

Do not rely on your homeowner’s insurance to cover you or your business assets in the case of an emergency, accident, or disaster. If you can say yes to any of the following, then you should consider looking into business insurance. Do you:

  • Work with clients/customers?
  • Keep work equipment at your house?
  • Store customer data on your computer?
  • Drive places to meet clients?
  • Drive around with business supplies in your car?
  • Give advice as part of your business?
  • Have a home located in a high-risk-zone for natural disasters?
  • Employ others?
  • Have clients visit you at your house?
  • Have inventory at your house or somewhere off-site?

5 Types Of Insurance For Home-Based Business

home-based business insurance

Once you’ve decided to take the step to insure your home-based business, you’ll have to choose which plan and policy will be the right fit. Allow your mind to temporarily wander to the dark list of worst-case-scenarios, and find the policies that will match with how best to protect yourself. Every business has risks and there are no risk-free guarantees, but you also don’t need to insure yourself for things that aren’t a risk for your particular business.

Here are the top five most common home-based business insurance policies worth looking into:

1. Home-Based Business Insurance

Many insurance providers have a home-based business insurance plan that bundles several of the most common types of insurance freelancers, sole-proprietors, and home-based business owners might need. Each insurer’s plan and policy is different, so check with providers to get a list of what their current home-based business insurance covers. Most home-based business plans include general liability and commercial property coverage, and also have business interruption service and business data-protection.

2. General Liability Insurance

General liability insurance protects you in the event of a lawsuit or an accident. Claims against a business can arrive in the form of bodily injury, property damage, personal injury to a customer (including slander or libel), or false advertisement. General liability insurance guards a business against financial ruin if a client slips and falls or if someone is offended by a social media post and decides to sue you.

3. Commercial Property Insurance

This type of insurance protects all of the property needed to run your business. Even if you run a home-based business, this coverage would be a way to protect the cost of your home office and the equipment stored at your house. A commercial property policy covers business products inside your house — and other people’s property while it’s in your care. Property damage due to theft also falls into this policy. Property insurance is the policy that will cover your home and your business property when it’s away from your home.

4. Business Interruption Service

If a business needs to close its doors due to a disaster — natural or otherwise — business interruption service will repay the costs of lost revenue and business expenses accrued during the interruption. For example, if your house catches fire, your property insurance will get you back up and running in terms of damage, but if you had to close your business for a few weeks, business interruption service will help offset the financial loss.

5. Professional Liability (E&O)

Professional liability insurance (commonly referred to as errors and omissions or E&O) covers the cost of defending your company in a lawsuit where the claim is that your business caused a financial loss for a client (error) or did not perform a service as required (omission). This type of insurance may be required for medical and legal businesses, but it is generally an add-on to liability insurance and can be an important addition for home-based businesses. If you give advice as part of your business plan, you’ll want professional liability to protect you from lawsuits.

Some other options to consider: If you drive a lot as part of your business model, you might want to consider commercial auto insurance and make sure to check and see if extra endorsements are needed to add flood and earthquake protection.

A good rule is: If you use it for your business, insure it properly. No business is exactly the same and but your unique needs can be met.

Finding The Best Insurance For Your Home-Based Business

Do I Need Insurance For My Home-Based Business?

You’ve decided to insure your home-based business: Great! If anything happens to your home, to your supplies away from home, or to the things you need to run your business, you won’t have to be one of the 33% of businesses that has to close after a disaster or accident.

Whether you’ve decided on hunting for an insurance company that offers home-based business insurance specifically or you want to work with an insurance professional to piece together a plan that covers your unique needs, the hunt for business insurance doesn’t have to be arduous. You can buy business insurance in 4 easy steps:

  1. Choose the insurance you need
  2. Gather business documents (square footage of your office space, how much income you earn, equipment you’d like insured)
  3. Compare costs (some sites like Coverwallet, Coverhound, and Insureon compare multiple agencies at once for you)
  4. Make your purchase

How much does business insurance cost? The answer is simple: It depends. The size of your business and the endorsements you might add will determine the amount you pay. Basic coverage will run between $300-$1000 dollars a year on average. (Rates also depend on deductibles and whether or not you have other policies with the company.)

All businesses will have hiccups and accidents, but only some businesses will have coverage for those moments. Don’t put off thinking about protection until it’s too late. The question a business needs to ask itself is: Can I afford not to buy insurance?

The post Do I Need Insurance For My Home-Based Business? appeared first on Merchant Maverick.

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