COVID-19’s destructive wake has damaged small businesses of all kinds, but those led by women have been disproportionately affected, based on a new report.
This report, released earlier this month by Facebook, found via a survey that 71% of women-led businesses in the US are operational or engaging in any sort of revenue-generating activity compared to 83% of those run by men. The survey, which Facebook jointly ran with the Organisation for Economic Co-operation and Development and the World Bank, considered the responses of more than 30,000 small business owners, managers, and employees from over 50 countries.
One reason for the disparity could be the cultural focus on gender roles in domestic settings.
According to the survey, female business leaders were more than twice as likely to spend at least six hours a day on domestic tasks when compared to their male counterparts — 23% to 11%. Facebook also noted that women were 10 percentage points more likely than men to have their work affected by caring for children, homeschooling, and doing household chores.
North America has also been the hardest hit region for closures of businesses run by women.
In the US and Canada, women were 14 percentage points more likely to close their businesses than men due to COVID-19. That’s compared to an 11 percentage point gap in Latin America and six percentage-point gaps in both Asia and Europe.
Micro-business — defined in the report as businesses with no employees — have also been hit hard. Based on the survey’s numbers, 30% of micro-businesses have closed compared to 25% of businesses with one or more employees. Of those surveyed, 37% of female-led businesses were considered “micro” while only 24% of male-led business fell under that category.
You can read Facebook’s Global State of Small Business Report in its entirety via PDF.
Women-Owned Businesses Are Struggling Worldwide
The Facebook report arrived shortly before the International Monetary Fund (IMF) called on governments to support women during the financial fallout caused by COVID-19.
“It is crucial that policymakers adopt measures to limit the scarring effects of the pandemic on women,” IMF director Kristalina Georgieva wrote in a blog post on July 21. “This could entail a focus on extending income support to the vulnerable, preserving employment linkages, providing incentives to balance work and family care responsibilities, improving access to health care and family planning, and expanding support for small businesses and the self-employed.”
The IMF’s blog post also noted the domestic discrepancy — according to previous research done by the organization, women spend 2.7 hours more per day on unpaid household work than men.
Facebook’s findings further echo similar data.
According to a June report commissioned by the National Bureau of Economic Research, the number of self-employed female business owners dropped 25% between February and April of this year. That pales in comparison to the 20% decline male-owned firms saw.
“The disproportionate losses in April 2020 to the number of female business owners will only further increase gender inequality in business ownership and perhaps broader economic inequality,” wrote Robert W. Fairlie, the UC-Santa Cruz professor who led the report’s research. Fairlie also called the number of lost women-run businesses “unprecedented.”
More globally, an impact report published this month by Women in Cloud and sponsored by Microsoft found that women entrepreneurs in the tech sector estimated their businesses will lose an average of $500,000 in revenue over the next year. It also revealed that 100% of the 57 executives surveyed reported that their businesses had lost income due to COVID-19.
Where Women-led Businesses Can Look For COVID-19 Support
Luckily, a number of organizations have stepped up to provide businesses owned by women with financial support during these coronavirus-infested times.
For instance, the Red Backpack Fund (run by The Spanx by Sara Blakely Foundation) will be giving out $5,000 grants to 1,000 female-owned businesses. The next application round is set to begin August 3.
There’s also the Moms as Entrepreneur’s COVID-19 fund, which is giving out grants of $500-$1,000 to mom-owned businesses financially impacted by the pandemic.
Microgrants can additionally be found for Black women who own businesses, such as through the Doonie Fund or Barefoot Wine’s COVID-19 recovery program.
For more general advice, check out Merchant Maverick’s guide to the best business grants for women. We also have an article covering the best business loans for women.
Do you have a story idea, tip, or press release for the Merchant Maverick news team? Shoot us an email: [email protected]
The post Women-led Businesses More Impacted By COVID-19, Survey Says appeared first on Merchant Maverick.
Everyone knows there’s no such thing as a free lunch. But is there a free solution for business owners looking to make money through a WordPress site?Â WooCommerce is a free shopping cart platform created specifically for WordPress. If you’re already using WordPress, or if you like the way WordPress looks and works, WooCommerce should be on your shortlist for eCommerce options.
However, although the software is free, there are numerous costs associated with running WooCommerce, some of which are unavoidable. Before you decide whether the plug-in is right for your needs, you must first understand exactly how much you’ll end up paying
How Much Does WooCommerce Cost?
Managed WordPress hosting for WooCommerce costs between $25 to $241 each month. WooCommerce pricing starts at $25 per month for the Startup plan and rises to $95 per month for the Growth plan. You can upgrade to the Scale plan for $241 per month. Those prices are based on annual payment.
Yes, WooCommerce is free software. But you’ll need more than the software to actually run a WooCommerce store. So how much can you expect to pay? Two costs are unavoidable whenever eCommerce is your goal: site hosting and domain fees. It should come as no surprise with a customizable platform like WooCommerce that you can find a plan that fits your budget.
WooCommerce costs depend on a range of options that you can choose to add or avoid. You can purchase a domain from your site host or from your preferred registrar; expect to pay at least $10 to $16 each year.
If you’d rather look outside WordPress for site hosting, you have a range of options, described below. All prices for hosting are based on a 12-month subscription and include a start-up discount. Prices will be higher if you choose to pay month-to-month, and you’ll pay more for your subscription after the first year ends.
Additional WooCommerce Fees
Outside of domain fees, the main cost you can’t avoid is site hosting. Again, you have a range of options, with a range of price tags. You can start by considering one of these WordPress-hosted plans for seamless integration with WooCommerce features.
Startup Plan: $25/Month & Up
For one site
25,000 visitors per month
10 GB storage
500 GB bandwidth/month
Automated SSL certificate and SSH gateway
Growth Plan: $95/Month & Up
10 sites included
100,000 visitors per month
20 GB storage
200 GB bandwidth per month
SSH gateway and imported SSL certificates
Scale Plan: $241/Month & Up
400,000 visits per month
50 GB storage
500 GB bandwidth per month
SSH gateway and imported SSL certificates
For more advanced users, WordPress offers two Premium plans as well, with options for up to 100 sites, up to one million visits per month, and up to 1,000 GB bandwidth per month. All WordPress hosted sites come with 24/7 support and a range of free available add-ons.
You’ll find that WooCommerce also integrates easily with a variety of partners offering service at different levels, based on your needs. Here are a few of the top hosts.
SiteGround: From $2.95/Month
Limited to a single site, though you can add more for an additional monthly cost
WordPress, WooCommerce, and the standard Storefront theme (or template) preinstalled
Includes SSL and PCI compliance
10 GB storage
10,000 visits per month
Bluehost: From $3.95/Month
Works best with single sites
Comes with WordPress, WooCommerce, and the standard Storefront theme (template)
Includes SSL certificate and Google verification
50 GB storage
Five email accounts
Dreamhost: From $16.95/Month
100,000 visits per month
30 GB storage
SSL certificate preinstalled
All prices above are based on a 12-month subscription. Prices will be higher if you choose to pay month-to-month, and you’ll pay more for your subscription after the year-end.
WooCommerce also asks you to choose between free and paid themes, or templates. You have multiple options for free and paid themes. Paid themes offer more ways to personalize your site and stand out from the competition, and paid sites are also better in terms of customer service. Expect to pay from $20 to $100 each year, depending on the theme you choose.
WooCommerce Integrations & Add-Ons
Once you pay for your domain and site hosting, the free WooCommerce plug-in is enough to get your store up and running. However, you’ll find many great apps you can integrate with your site. Although each integration will come with a cost, the price may be well worth it depending on your ultimate goals.
WooCommerce Payments, at $0, is designed by WooCommerce itself and allows you to process secure transactions via major credit and debit cards. You can easily view and manage your transaction from your WordPress dashboard. There are no monthly fees, and transaction fees start at 2.9% plus 30 cents per transaction.
PayPal’s Pro version will cost you $35 per month and a transaction fee of 2.9% plus 30 cents.
Stripe offers a WooCommerce extension with no monthly fee and the standard 2.9% plus 30 cents transaction fee. Stripe allows you to accept Apple Pay.
Amazon & eBay offer a plugin you can use to list and sell items on Amazon.com and on eBay. It’s free to download and use for 14 days. Plans include Flexi, which costs $29 per month, charges a 1.9% transaction fee, and allows unlimited orders; Starter, at $59 per month and no transaction fees for up to 250 orders per month; and Pro, which costs $99 per month, has no transaction fees, and allows up to 750 orders per month.
One area where WooCommerce shines is in the number of useful shipping extensions you can add to your site. Here is just a sampling:
Shippo allows you to sign up for free and easily imported orders, compare rates from a variety of carriers, print professional shipping labels, find tracking information, and sync info to WooCommerce. You’ll have access to discounted rates from carriers like USPS and DHL Express.
ShipStation‘s WooCommerce plugin, available for a free 30-day trial and starting at $9 per month, lets you make 50 shipments a month using branded labels and packing slips. Plans extending up to $159 per month add capacity all the way to 10,000 packages per month, with customized labels.
TradeGecko offers a free two-week trial, with subscriptions starting at $39 per month. TradeGecko includes inventory management tools and lets you create invoices and shipping documents. It also integrates with QuickBooks Online.
Accounting & Tracking
You have the option to add a plugin to help you sync orders and track payments through WooCommerce.
QuickBooks Sync for WooCommerce lets you automatically sync WooCommerce and QuickBooks. It’s compatible with QuickBooks Online, Desktop, and POS. The software is free but you’ll need a free or paid account with MyWorks. That’s free if you ship up to 20 orders per month, $39 per month for up to 1,000 orders per month, or $69 for unlimited orders.
Xero will cost you $79 per year to handle all your site’s accounting functions, including bank reconciliation and financial reporting â and even inventory tracking. You can set up automatic invoices for your eCommerce site, and Xero will sync with your WooCommerce store to keep everything straight.
Sales Analysis for WooCommerce, at $129 per year, has tools you can use to analyze your site’s performance and growth and to refine your sales strategy around best-selling products and profitable areas. Reports are easy to find on your WordPress Dashboard.
These are just a few of the many integrations that work with the WooCommerce platform. There are too many to list, but if you haven’t seen the right one here, or if you want to add marketing, subscriptions, or store management, check out the extension store on WooCommerce and you’re likely to find what you need for your site.
How To Save On WooCommerce
Choosing WooCommerce is a step in the direction of savings, since it’s hard to beat the free price tag. With so many options, though, it’s easy to see how you could add on…and add on…and add on â until your “free” eCommerce platform costs more than you intended it to. Fortunately, you don’t have to let that happen. Start with these money-saving tips.
Advertised fees for hosting and integrations almost always assume an annual subscription, not monthly. Choose the pay-by-month option for WordPress’s Startup hosting, for example, and you’ll pay $30 per month, or $360 per year. You can save almost 17%, or $5 per month, when you take the annual subscription. Yes, you’ll have to pay $300 upfront, but the savings add up over time, so if your budget allows, always choose the yearly price.
WooCommerce plugins and most outside integrations typically include a free trial period you definitely should take advantage of. Before you pay for a month or a year, test out the app and make sure it’s right for you. That’s especially important when you have a lot of options to choose from. You may discover that one of the more expensive options really is what you need, but you’re just as likely to avoid paying for some bells and whistles you’ll never use.
Choose Free For Now
WordPress and WooCommerce work together seamlessly and there are quite a few free (or very low cost) integrations available. There’s a built-in inventory management system, a shipping calculator for customers on the shopping cart page, built-in SEO tips, and more. It’s easy to start with a free option and upgrade later if you find it’s not meeting your needs.
Is WooCommerce Right For Me?
With a wide range of prices for hosting and integrations, WooCommerce is a good option for anyone who wants a personalized eCommerce site.
Choose WooCommerce If â¦
You already have a WordPress site or know how to use it
You want the ability to add on to your site and you learn and grow your sales
You’re new to eCommerce and will appreciate built-in support
You’re an experienced online seller and know how to add integrations to maximize your site
You want to sell physical and/or digital products
The Bottom Line: Calculating The Cost Of WooCommerce
WooCommerce doesn’t offer one-size-fits-all pricing, because your business needs are unique. With so many options, it’s easy to overload your site. Our advice? Set a budget for how much you want to spend upfront, then subtract the annual costs absolutely required to make your site hum. Use your remaining budget to have fun designing your eCommerce site with WooCommerce. Remember to create lines in your budget for these key items.
Integrations and add-ons
Don’t be afraid to take a chance with WooCommerce. With more than 3.3 million users â and counting â it’s a platform with broad appeal and versatility for all kinds of users. Build your site carefully, test-drive options for free whenever you can, and start with low-price choices and upgrade as needed. Your WooCommerce site won’t really be “free,” but when you start bringing in sales you’ll likely become convinced of its value.
The post The Complete Guide To WooCommerce Pricing appeared first on Merchant Maverick.
Over the last decade, business owners and entrepreneurs have increasingly turned to crowdfunders to raise funds. Having access to individual donors for business projects and creative endeavors has been a needed boon to businesses in the post-financial-crisis era.
Two of the names that often come up in the crowdfunding conversation are Indiegogo and GoFundMe. In this article, we’re going to examine these two crowdfunding platforms and compare their suitability for business fundraising.
Indiegogo VS GoFundMe
When evaluating Indiegogo vs. GoFundMe as crowdfunders, consider that while Indiegogo is for funding tech projects and creative works, GoFundMe’s crowdfunding is primarily for personal causes (such as medical emergencies). However, it can be used for business crowdfunding in certain circumstances.
Crowdfunding for tech products and creative works
Can launch a Patreon-style ongoing crowdfunding campaign (InDemand) after you reach your initial funding goal
Good customer support
Does not prescreen campaigns
5% platform fee
Limited communication between campaigners and backers
Can’t launch an InDemand campaign without having run a successful “traditional” crowdfunding campaign first
When Indiegogo launched in 2008, it was intended to be a financing platform for independent films â hence the name. However, Indiegogo’s mission soon expanded, and the platform now supports crowdfunding campaigns for tech gadgets, household products, and all manners of creative works (films, novels, music, podcast, tabletop games, and more).
While this article focuses on business crowdfunding, I should note that Indiegogo also permits fundraising campaigns for nonprofit organizations, though it disallows campaigns for personal causes and directs such campaigners to GoFundMe. Campaigns for nonprofit organizations are not subject to Indiegogo’s 5% platform fee.
If your crowdfunding campaign hits its funding goal, you then have the option of using Indiegogo’s InDemand service to crowdfund continuously (Ã Â la Patreon). InDemand lets you continue raising money for an indefinite period â and without fixed fundraising goals â after your initial campaign closes. Your initial campaign need not have been with Indiegogo â if your campaign was successful on Kickstarter or another service, you are still eligible to use InDemand. The one requirement is that your first campaign was successful in meeting its goals.
With Indiegogo campaigns, the platform takes a 5% fee from what you raise. This is typical of for-profit crowdfunding platforms.
GoFundMe is the world’s largest crowdfunder for personal causes and emergencies
No platform fee
You can keep your campaign open for an unlimited period
GoFundMe isn’t for most business projects
Some campaigners have trouble withdrawing funds
The platform doesn’t make it easy to offer rewards
Compared to Indiegogo, GoFundMe is a very different type of service. GoFundMe is used to campaign for funds to cover personal hardships, emergencies, and other compassionate causes. As such, GoFundMe no longer carries a platform fee, as the company decided that taking a cut from the crowdfunding campaigns of people in desperate situations was not a good look.
Here’s what you need to know: GoFundMe isn’t set up to be a business crowdfunder. GoFundMe’s brand is inextricably linked to charity, personal needs, and community support. While GoFundMe doesn’t disallow crowdfunding for business, the platform simply isn’t set up to support the sort of gadget-makers and podcasters that Indiegogo supports. Business campaigns without a compassionate component or social purpose may not succeed on GoFundMe and are likely to provoke the ire of people who see such campaigns as taking advantage of a platform intended for altruism and justice, not profit.
However, this is not to say that GoFundMe is never right for business crowdfunding. To get a sense of the circumstances that make a business crowdfunding campaign on GoFundMe appropriate, check out GoFundMe’s business fundraiser page and examine the campaigns that are succeeding. You’ll see lots of campaigns for local businesses struggling to recover from coronavirus-related hardship, riot damage, and other extenuating circumstances. You’ll also see campaigns from struggling longtime businesses seen as pillars of their respective communities, such as independent bookstores and theaters. Other GoFundMe business campaigns either highlight the personal challenges of the business owner or the socially-conscious purpose of the business â a store run by a veteran recovering from PTSD or a cafe devoted to hiring the formerly incarcerated would jibe with GoFundMe’s mission.
However, if you’re trying to raise money to create a video game or independent film, for example, and your campaign doesn’t have a social justice angle or a story of personal struggle, Indiegogo is the crowdfunder you’ll want to go with.
While Indiegogo and GoFundMe have divergent missions and are geared towards different kinds of crowdfunding campaigns, neither platform is very restrictive as to the kinds of projects that can start a campaign. Indiegogo explicitly allows five different types of crowdfunding campaigns:
Campaigns benefitting nonprofit organizations or nonprofit beneficiaries
Campaigns for products
Anything within “Community Projects” that is not a personal cause
Educational campaigns in the Tech and Innovation category
GoFundMe does not have strict guidelines as to who is allowed to use the platform, though the company states the following in its fundraising FAQ page:
We see people use GoFundMe to raise money for themselves, friends and family, or even complete strangers in random acts of kindness. People raise money for just about everything, includingÂ medical expenses,Â education costs,Â volunteer programs,Â youth sports,Â funerals & memorials,Â and evenÂ animals & pets.
Terms & Fees
Indiegogo’s terms and fees are pretty straightforward:
Your campaign can last up to 60 days
Indiegogo’s platform fee is 5%
The payment processing fee varies by country but is 2.9% + $0.30 in the US
An Indiegogo InDemand campaign has no duration limits, but the fees are the same.
As for GoFundMe, the terms and fees are thus:
Your campaign can last for however long you want it to last
GoFundMe does not charge a platform fee
The payment processing fee varies by country but is 2.9% + $0.30 in the US
The Campaign Process
The campaign process is quite similar for both of these crowdfunding platforms. While your campaign is open, you give people the option of contributing to your campaign on your project page. Both Indiegogo and GoFundMe provide you with access to promotional tools to bolster your campaign, and both platforms encourage you to use your existing social media channels to solicit support.
One aspect of running a campaign that differs between the two platforms is that with Indiegogo, the platform makes it easy to offer perks to your backers (such as a product, branded merchandise, tickets to a showing of your film, etc.) in exchange for a certain level of financial support. With GoFundMe, while you can offer rewards to your donors, you have to contact the donor and offer a reward yourself with no automated process to facilitate reward-giving.
Customer Service & Technical Support
Indiegogo offers an extensive help section to answer any questions you might have. For direct support, there’s a contact form you can use to get in touch with the company. There’s no live chat option, nor is there any phone support.
GoFundMe also offers a Help Center for support along with a contact form for questions. GoFundMe also provides live chat support from Saturday to Wednesday, 6 AM to 7 PM Pacific Time, though the company warns that “These hours are subject to change based on how many agents we have available.” Like Indiegogo, GoFundMe does not offer phone support.
Reviews, Criticisms, & Complaints
Both companies receive a high volume of complaints, which isn’t out of the ordinary for such widely-used services.
With Indiegogo, most reviewers have been largely positive about the company, and many campaigners have found the platform to be intuitive and flexible. Reviewers are also generally positive about Indiegogo’s customer support. Most Indiegogo complaints stem from miffed backers who never receive their promised rewards from failed and/or unscrupulous campaigns. Due to this, Indiegogo campaigners would be well-advised to advertise their responsibility and trustworthiness to reassure potential supporters.
While GoFundMe has its satisfied users as well, the company gets an even higher volume of complaints than does Indiegogo, many of which have to do with campaigners being unable to withdraw funds that were pledged to their campaigns. While GoFundMe campaigns are not pre-vetted, the company does closely examine campaigns before allowing the campaigner to withdraw funds, and sadly, this process catches a lot of needy folks at the worst possible time, resulting in a high volume of complaints. GoFundMe’s policy of requiring campaigners to give their full SSN before withdrawing funds comes in for a lot of criticism too.
Which Is Best For Your Crowdfunding Needs?
Generally, if you intend to crowdfund for a business project, the Indiegogo vs. GoFundMe question is pretty clear, considering Indiegogo is geared towards business projects while GoFundMe, for the most part, is not. However, there are some exceptions to this general rule.
Choose Indiegogo Ifâ¦
You’re crowdfunding to bring a consumer product to market
You’re crowdfunding for a creative project, such as a movie or book or podcast
You’ve already run a successful crowdfunding campaign, and you now want to raise funds continuously
Choose GoFundMe Ifâ¦
You run a business that has been impacted by a disaster or personal misfortune
You run a struggling business that is recognized as important to your community
Your business has a charitable/socially-conscious mission
The post Indiegogo VS GoFundMe: Which Is Right For Your Next Crowdfunding Campaign? appeared first on Merchant Maverick.
If you had “Coin Shortage because of COVID” on your 2020 bingo sheet, you can check that box and keep on hunting for other unique or unexpected consequences of this year’s coronavirus pandemic. A perfect storm between closed coin production and a decrease in moving coins through the banking systems has resulted in a coin shortage, and some small businesses are already feeling the impact.
Last month, the Federal Reserve issued a statement on the coin shortage, with Jerome Powell telling Congress: “What’s happened is — with the partial closure of the economy — the flow of coins through the economy has … kind of stopped. The places where you’d go to your coins and get credit … those have not been working.”
Coins Are Stuck In A Stopped System
Treasury Secretary Steve Mnuchin said in a virtual investment summit, “As it relates to coins, so many businesses shut down, a lot of coins got stuck in the system, so we are a little bit far behind on coins.”
There are several reasons why the COVID-19 pandemic has resulted in coins becoming stuck in the system. One is that on advice from the Centers for Disease Control (CDC), many small businesses stopped accepting cash in an attempt to slow the spread of the virus. The shift to cashless transactions and contactless payment systems resulted in fewer coins moving through the system.
With fewer coins going to the bank, banks cannot move coins back out into circulation. The Federal Reserve Task Force, started June 30, is expected to report on their suggestions to mitigate the shortage in early August. According to the Task Force:
“The primary issue with coin is a dramatic deceleration of coin circulation through the supply chain … While there is adequate coin in the economy, the slowed pace of circulation has meant that sufficient quantities of coin are not readily available where needed.”
Decreased circulation has been accompanied by decreased coin output, as the U.S. Mint has dramatically slowed output in an attempt to protect its employees from contracting the virus.
Coin Shortage Impact On Small Business
Grocery stores, car washes, laundromats, convenience stores, dispensaries, vending machines, and gas stations are all businesses that depend on coins. Some of those businesses are still running as cash-only businesses in a credit world. Underbanked and smaller businesses are most at risk of being disproportionately affected by a cash shortage.
This also affects underbanked households who primarily pay with cash. According to an FDIC survey in 2017, 8.4 million households in the United States do not have a banking account of any type. If places are not accepting cash or offering change, or if businesses lose their ability to give change, the impact is greater among these households and cash-only businesses.
In non-COVID days, small businesses could easily receive change from their local banks. However, as some businesses stopped accepting cash and the U.S. Mint slowed production, fewer coins have found their way back to banks. (Third-party coin systems like Coinstar — which banks depend on for coin circulation — have also experienced fewer deposits since March.)
Many small businesses have resorted to rationing their coins. Jeff Lenard from the National Association of Convenience stores told CBS News that, “Right now cash is a problem. [Small businesses] are only being given a fraction of what they normally get in terms of coin.”
Part of the Federal Reserve’s coin task force mission is to safely increase production, but even that might not mean a quick-fix. According to an interview with the Las Vegas Review Journal, Ted Rossman, an industry analyst with CreditCards.com said, “The mint … is working overtime to try to pump more coins into the system … Iâve seen some projections as far out as November.â Rossman, however, thinks that things will look better sooner than that.
In the meantime, some small businesses are asking for coins from customers, and other places are buying coins. Whether those coins actually get into the hands of the small business owners that need them, however, is a different issue.
Yiming Ma, an assistant professor of finance at Columbia Business School, said in an interview with Forbes that the Federal Reserve can’t just flood the economy with coins and hope for the best.
“It’s not a one day and everything is solved type of problem. We should be thinking about how to allocate distribution so it’s taken back in a way to help communities and businesses that are in the most need of coins. It’s easier said than done.”
How Your Small Business Can Respond To The Coin Shortage
If your small business doesn’t need coins to survive, you should help distribute the coins you receive back to your local banks or into local cash-only businesses.
If you are a small business that relies on coins, however, don’t hesitate to put out a “Coin APB” into the world and on your social media feeds. Most of the coins that typically run through our economy are languishing in piggy banks and sofa cushions. Skip the bank and go straight to the community to see if you can nudge some of those coins back into circulation.
For other COVID-19 related coverage, check out Merchant Maverick’s Coronavirus Hub for more articles about how to navigate the pandemic.
Do you have a story idea, tip, or press release for the Merchant Maverick news team? Shoot us an email: [email protected].
The post The Great Coin Shortage Of 2020 Threatens Small Businesses Across America appeared first on Merchant Maverick.
Earlier this week, the American Institute of Certified Public Accountants (AICPA) and Biz2Credit announced the launch of PPPForgivenessTool.com, a web platform that aims to help automate the forgiveness process for small business owners who took out Paycheck Protection Program (PPP) loans.
The tool — which is powered by technology developed by Biz2Credit — was revealed via an AICPA press release on Monday. CPA.com, the technology arm of AICPA, also helped launch the tool.
“We are now incorporating our PPP calculation and process recommendations into a dynamic PPP Forgiveness Tool to help drive a simple and effective forgiveness process,” CPA.com president and CEO Erik Asgeirsson said in a statement. “Our broader goal with this tool is to […] help drive a common approach to this process with the payroll and lender communities.”
PPPForgivenessTool.com incorporates the PPP calculator previously released by the AICPA in May. It takes into account all current SBA and Treasury guidance covering PPP forgiveness. Biz2Credit developed the tool using its proprietary Biz2X Platform, which was designed so financial institutions could serve business customers.
This latest effort by AICPA has the potential to become popular; the accounting organization claims that “tens of thousands of firms” have downloaded its loan amount and PPP calculators since April.
A Free PPP Loan Forgiveness Tool For Businesses
Any business approved for a PPP loan can use PPPForgivenessTool.com free of charge.
Borrowers can log into the site’s platform to fill out the PPP forgiveness application. An offshoot site is available for accountants filling out forms on a business’s behalf. According to AICPA, this tool will automatically generate all government-mandated forms related to PPP forgiveness.
After filling out the necessary information, the Small Business Association’s (SBA) 3508 or 3508 EZ forms can be signed by applicants electronically. All other required documents will be bundled into a downloadable file the borrower can submit to their lender.
AICPA promises that the tool will be updated based on final forgiveness guidance from the SBA and Treasury, so borrowers should wait before generating their final and signed form 3508. There’s also the possibility of automatic forgiveness for firms that received a PPP loan of less than $150,000, furthering evidence that businesses burdened by PPP loans may want to wait before going through with the current forgiveness process.
AICPA claims this new tool “will likely save hours of manual work” for those applying for PPP forgiveness.
“This online platform will produce a finalized forgiveness application that a borrower can take right to their lender for submission without any extra work,” Biz2Credit CEO Rohit Arora said in a statement.
Arora also highlighted the tool’s open architecture, which allows AICPA coalition members to integrate data into PPPForgivenessTool.com.
“It is extremely important right now for companies that serve small businesses to come together to help these business owners benefit from the Paycheck Protection Program,” he said. “An open architecture platform like this is an invitation to any company that works with small businesses, including PPP lenders.”
How To Apply For PPP Forgiveness
The PPP has undoubtedly provided much-needed aid for some impacted by COVID-19 — almost 5 million businesses have received its government-backed aid, after all — but the program has been plagued by plenty of problems since introduction. The forgiveness process is no different, although the SBA did release a simpler EZ forgiveness form last month.
Besides filling out paperwork and filing it with their PPP lender, businesses will need to hit a number of requirements to be eligible for forgiveness. Among these stipulations are:
Using funds for qualifying purposes, such as payroll or rent
Spending the loan within 24 weeks of disbursement
Maintaining full-time staff and payroll expenses
To dig deeper into the program’s rules, take a peek at Merchant Maverick’s in-depth guide to PPP forgiveness.
It’s worth noting that most borrowers may not be able to apply for forgiveness, even if they want to. That’s because many banks involved with the PPP simply aren’t ready — as Politico recently reported on July 20, only 20% of banks surveyed by the CBA are currently accepting forgiveness applications, with the SBA’s slowness to provide forgiveness guidance being chalked up as the primary reason for the delay.
Yesterday, the SBA did announce that its forgiveness portal for lenders would go live on August 10 (subject to Congressional amendments), potentially hastening banks’ desires to start accepting forgiveness applications.
Do you have a story idea, tip, or press release for the Merchant Maverick news team? Shoot us an email: [email protected]
The post A New PPP Loan Forgiveness Tool Aims To Makes Things Simple appeared first on Merchant Maverick.
In a recent installment of her Pivoteers & Pioneers series, Yulia Ovchinnikova invited the founder of Silicon Harlem, Clayton Banks, to speak to a business audience an hour and change north of Manhattan. Banks has been developing Harlem’s technology hub since 1994, a feat Ovchinnikova has been trying to replicate in her area through her business, the OpenHub Project.
Before Silicon Valley came to dominate the industry, another valley on the opposite coast was home to the nation’s burgeoning tech industry. At its peak, IBM employed over 7,000 workers at its plant in Kingston, a small city in New York’s Hudson Valley about halfway between New York City and Albany. Twenty miles down the Hudson River in the City of Poughkeepsie, IBM established laboratories for research and development. While not all of that infrastructure is gone — reports of IBM’s demise have been greatly exaggerated and, in fact, they’re doing some intriguing work on quantum computing in the region — the Hudson Valley’s reputation as a technology corridor has largely been consigned to the past. But it won’t remain there long. Not if Ovchinnikova, who operates out of Newburgh, has anything to say about it.
Ovchinnikova, who holds a Ph.D. in Economics from the Russian Academy of Science and an MA in Applied Mathematics and Computer Science from Moscow State Technical University of Electronics & Mathematics, has made a mission of revitalizing her adopted home’s tech industry. Since 2017, OpenHub, in collaboration with SUNY Ulster, has offered web development boot camps, an afterschool coding program for girls in the City of Newburgh, IT professional certifications, and frequent special events designed to bring existing tech workers together. The group’s mission? Building a strong, accessible technology hub for the region’s businesses, schools, and governments.
In October 2019, with the help of local sponsors, OpenHub held its inaugural HVTechFest, a two-day event that featured talks, panels, and a hackathon (an event where attendees are given a problem to solve, typically with hardware and/or software). The event turned out to be well-received, and spirits were running high.
Along Came COVID
Ovchinnikova and her team were well into the process of developing the second annual HVTechfest when New York became ground zero for the coronavirus outbreak in the US in March. While the Hudson Valley wasn’t hit quite as hard as New York City, it still had some of the highest infection rates in the state. The lockdown lasted longer here than in most of the country, putting significant strain on local businesses. Though the festival wasn’t to have been held until October 2020, the likelihood of being able to hold a successful mass gathering of that kind in 2020 appeared less and less likely. OpenHub needed to pivot.
But as it turned out, so did most other businesses.
OpenHub began to take notice of the other businesses in the area that were not only adapting to a new normal of restricted indoor occupancy but were actually thriving in it. The main difference between the restaurants and companies that were doing well and those that weren’t? How well they applied technology in their day-to-day processes.
Pivoteers & Pioneers
“Forcing people to go remote revealed differences in the availability of tech and readiness,” Ovchinnikova observes. “Addressing that digital divide is very important.”
With that in mind, the Pivoteers & Pioneers series was born. Conceived of as a free five-part webisode series for the age of social distancing, the program has focused on different aspects of the lockdown economy, ranging from restaurants, to banking, to telehealth, to tech groups like Digital Harlem. The fifth webisode, which debuted on July 10th, focused on education and how various school districts tackled the challenge of having to teach students remotely.
“During our 5 biweekly webisode series we reviewed important topics related to our current moment with COVID and closures,” explains Ovchinnikova, “These topics were actively engaging more than 500 Hudson Valley influencers, businesses, and educators.”
Watching these events, it becomes immediately clear that businesses and institutions have reluctantly entered a period of experimentation and rapid adaptation. The cost of failing to adapt to the “new normal” can mean a devastating loss of profits, but those who adapt successfully often uncover better ways of doing things. Many of these new methods and niches will persist long after the coronavirus crisis has ended.
Different school districts, for example, have wildly different ideas about how much remote school work to give children for optimal results. Similarly, viewpoints varied — sometimes strongly — on the potential of free municipal wireless internet to bridge the digital divide in those communities. Banks and credit unions discussed their strategies to make remote banking more effective by offering apps that eliminate the need to physically enter their brick-and-mortar branches to do things like deposit checks.
“These webinars were interactive and allowed people to share their experience and get actionable insights from participants working in the same area or industry,” explains Ovchinnikova. “We tried to define pioneers and pivoteers — those who were finding new approaches, or new ways of doing things in their business, serving their customers, finding new offerings, or discover a new niche.”
While the webinars are regionally focused, the topics they cover will likely be useful to businesses in any area that is struggling to maintain something close to normal operations during a full or partial lockdown. Interested business owners, or anyone else, can register for webinars on OpenHub’s site or view past ones on YouTube. Ovchinnikova encourages anyone interested in future content to subscribe to the YouTube channel.
Ovchinnikova says there’s been a lot of demand to bring the series back for another run, which she is considering, along with how to align OpenHub’s own COVID-related pivot with her longer-term goals of breathing new life into the Hudson Valley’s tech industry. At the moment, she still plans to hold HVTechFest 2020 in some capacity, even if the event ends up needing to be conducted remotely. In that sense, the web series has served as a test drive for how tech-related seminars and information could be presented to the community if an in-person event proves to be impossible by October.
“We saw a need, and we plan to continue with the webinar format,” says Ovchinnikova.
The post Pivoteers & Pioneers: How Technology Is Adapting To The Post-Covid World appeared first on Merchant Maverick.
If lawmakers, small business advocates, and financial institutions get their way, small businesses that have become saddled with Paycheck Protection Program (PPP) loan debt may be able to receive automatic forgiveness soon.
That’s the heart of the Paycheck Protection Small Business Forgiveness Act, a bipartisan bill introduced last month by Sens. Kevin Cramer, R-N.D., Bob Menendez, D-N.J., Thom Tillis R-N.C., and Kyrsten Sinema, D-Ariz. This piece of legislation provides automatic loan forgiveness for PPP loans under $150,000. Qualifying businesses would only need to fill out a one-page form to become eligible for forgiveness.
According to data from the Small Business Administration (SBA), the $150k cutoff represents 86% of the over 4.9 million businesses that took out loans via the PPP. However, those businesses under the $150k threshold only received 27% of the total money administered through the PPP.
Proponents of the bill argue that it would be a time saver for small businesses, as their paperwork needs would drop. Some also suggest that blanketed forgiveness could alleviate the workload for the banks that have processed PPP applications.
In their announcement introducing the Forgiveness Act, the sponsoring senators specifically estimated that automatic forgiveness could retain $2,000 for each affected small business and $500 per loan for the lenders — ultimately saving roughly $9.4 billion in total.
“We can avoid the burdensome cost of superfluous bureaucracy required to arrive at the foregone conclusion of loan forgiveness by implementing a few commonsense changes,” Cramer said in a statement. “The Paycheck Protection Small Business Forgiveness Act would give small businesses peace of mind by eliminating unnecessary bureaucratic requirements and simplifying the process for forgiving smaller loans.”
The PPP Automatic Forgiveness Bill Has Backers
The bill — or variants of it, at least — has received support from numerous parties beyond Capitol Hill.
Perhaps most notably is Steven Mnuchin, the Secretary of the Treasury. While Mnuchin hasn’t thrown his weight behind the introduced bill specifically, he has suggested the need for automatic forgiveness.
“One of the things weâll talk about is should we just have forgiveness for all the small loans? I think thatâs something we should consider,” Mnuchin said during a House Small Business Committee hearing on July 17.
Organizations have also chimed in their support. For instance, over 130 trade associations sent a letter to Congress on July 9 urging for passage of the bill. Among the letter’s cosigners included the US Chamber of Commerce, the International Franchise Association, and the National Restaurant Association.
In a July 17 letter, the American Bankers Association, the Bank Policy Institute, and the Consumer Bankers Association pleaded with Mnuchin and SBA head Jovita Carranza for automatic PPP loan forgiveness of up to at least $150,000 and as much as $350,000.
Most recently, the online payments giant PayPal — which has been processing PPP applications for the SBA — joined the throng of voices urging for forgiveness on PPP loans under $150k.
“As Congress considers proposals for automatic loan forgiveness for PPP loans below a certain dollar amount, we feel it is in our small business customersâ best interest to ensure their voices are heard with their representatives regarding the loan forgiveness process,” PayPal’s Senior Vice President of Global Credit Doug Bland told the Washington Business Journal via email.
Opponents Fear Fraud, Lack Of Data
However, not everyone is on board with a blanket forgiveness bill.
A chief concern is fraud. Currently, the SBA has refused to reveal the companies that received PPP loans under $150k. Instead, the SBA has only shared the names of those businesses that took out larger PPP loans.
Rep. Katie Porter (D-Calif.), a member of the Financial Services and Oversight committees, told Politico:
“Thus, there is absolutely the potential for waste and fraud when awarding and later forgiving these loans — businesses that donât need assistance receiving essentially free taxpayer money, but more importantly, our smallest, most vulnerable businesses being prevented from getting the help they need.”
Liz Hempowicz, the director of public policy for The Project on Government Oversight, added (per Politico) that “we should see the names of [the smaller] borrowers before we talk about automatic loan forgiveness.”
Another critique stems from the idea that automatic forgiveness goes beyond the original intent of the PPP.
“The program is the Paycheck Protection Act to protect payroll and to protect workers,” Sen. Ben Cardin, D-Md., said in an interview with the Washington Business Journal. “To give a blanket forgiveness without even requiring the verification of how the money was spent, to me, goes beyond the extent of the bill.”
How PPP Forgiveness Works Right Now
Currently, PPP forgiveness is a wonky mess. And, according to a survey by the Consumer Bankers Association, only 20% of banks have begun accepting forgiveness applications.
At the time of writing, all businesses that received PPP funding must hit a number of requirements before receiving forgiveness. These requirements include:
Funds must be used for qualifying purposes, such as payroll or rent
The loan must be spent within 24 weeks of disbursement
Borrowers must maintain their full-time staff and payroll expenses
For a more detailed look at the PPP’s forgiveness rules, read Merchant Maverick’s in-depth article on the topic.
Do you have a story idea, tip, or press release for the Merchant Maverick news team? Shoot us an email: [email protected]
The post Automatic Forgiveness For PPP Loans? Idea Is Building Steam appeared first on Merchant Maverick.
When you think about small business lending, what comes to mind? If you’re like most people, you probably think of the typical — banks, credit unions, online lenders. Unfortunately though, many business owners are unable to obtain the funding they need through these traditional lending institutions. Banks and credit unions, for example, may require high credit scores, a lengthy time in business, or other criteria that a borrower just does not meet. The same can be said of online lenders — those with competitive rates may have strict borrowing requirements, leaving business owners with options that are short term, expensive, and could lead to escalating debt — and eventual closure of the business.
Unfortunately, businesses in underserved communities probably know this all too well. Not only does a lack of funding opportunities impact businesses, but it also has a negative effect on the community as a whole: A lack of jobs, less access to products and services, and fewer opportunities for entrepreneurship.
There is good news, though. There are lenders and institutions that offer funding opportunities to businesses and entrepreneurs that don’t have other options. One option many are unfamiliar with is minority depository institutions, or MDIs. These institutions provide funding opportunities to many business owners who don’t have access to affordable funding elsewhere.
Sound like something that might be a good fit for your business?
Keep reading to learn more about MDIs, how they help businesses like yours, and how to determine which one is the right fit for your business.
What Are Minority Depository Institutions?
A minority depository institution (MDI) is defined in one of two ways:
At least 51% of voting stock is owned by minorities OR
A majority of the board members are minorities AND the institution primarily serves communities whose populations are predominantly minority based.
Under the Financial Institutions Reform, Recovery and Enforcement Act of 1989, a minority is defined as “Black American, Asian American, Hispanic American, or Native American.”
MDIs are similar to other banks, credit unions, and financial institutions by offering consumer and business services such as checking and savings accounts, business and personal credit cards, mortgages, and small business loans and lines of credit.
What Is The Minority Depository Institution Program?
The Minority Depository Institution Program is a program launched under the Federal Deposit Insurance Company (FDIC). Goals of this program include preserving, promoting, and building capacity of MDIs for the benefit of low- and moderate-income communities.
The FDIC also oversees the Minority Depository Institutions (MDI) Subcommittee of FDIC’s Advisory Committee on Community Banking (CBAC) as a way of preserving and promoting the importance of MDIs in communities around the nation. This subcommittee serves as a platform for MDIs to collaborate, form partnerships, and promote best practices.
In order to become classified as an MDI, an institution must take steps by applying for deposit insurance and also meet the criteria discussed earlier in this post. The FDIC provides a number of resources outlining the application process, rules, regulations, and other critical information that financial institutions need to know about MDI designation.
How Minority Depository Institutions Help Small Businesses
There are a number of ways that minority deposit institutions help small businesses. One of the most important ways that these financial institutions help small businesses is by providing financial products that may otherwise be unavailable to low-income, moderate-income, and other underserved communities. By having access to funding opportunities, business owners are able to expand their businesses, receive funding to keep their business in operations, and start new businesses. This, in turn, leads to new job opportunities and access to products and services to everyone within that community.
Some of the ways that MDIs help business owners include:
Small Business Loans
Affordable loans with favorable terms are difficult for many businesses to score, but it can be nearly impossible for businesses in underserved communities. Fortunately, MDIs have financing opportunities for small businesses that find it difficult to get low-cost funding elsewhere.
Depending on the institution, there are a number of loan products available. This includes commercial real estate loans, equipment financing, or other loans that provide businesses with a lump sum of capital that’s repaid over time.
Many MDIs offer loans backed by the Small Business Administration. SBA loans are known for their high borrowing limits, long repayment terms, and competitive interest rates. Some MDIs may also offer financial products for startup businesses that don’t have the revenue or business credit score required for other loans.
Lines Of Credit
Businesses that want a more flexible financing option may qualify for a line of credit through an MDI. Instead of a lump sum, businesses are given a credit limit that can be used to pay employees, purchase supplies or inventory, or cover operational costs. As the line of credit is repaid, funds become available to use again, much like a credit card. A business line of credit is great to have to cover unexpected expenses or to manage cash flow issues.
Business Credit Cards
Many MDIs offer business credit cards to qualified borrowers. Like a line of credit, this is a flexible form of funding that can be used for anything from emergency expenses to recurring costs like utility bills or gas for a company vehicle.
Merchant Card Services
Businesses that want to accept credit cards, debit cards, and other forms of payment will need to find a merchant services provider. Some MDIs provide these services for their customers.
Businesses with employees have to run payroll, and many business owners opt to leave this task to the professionals. Many MDIs — like traditional banks and credit unions — offer payroll services for its small business customers.
Checking & Savings Accounts
Business owners should understand the importance of separating business and personal expenses. The easiest way to do this is by keeping funds in separate accounts. An MDI provides personal and business bank accounts, so you can keep your money separate. Not only will you (or your accountant) be grateful for separate accounts come tax time, but many lenders require you to have a business bank account before disbursing loans or other funding.
Personal Banking Services
Looking for a new financial institution for your personal accounts? Consider working with an MDI. Not only can you take advantage of these consumer financial products, but so can others in your community. What does that mean for your business? It means that consumers have access to bank accounts, credit cards, and loans — in other words, all types of funding that they may spend in your business.
Popular Minority Depository Institutions
Now that you have a general idea of what MDIs offer, let’s take a closer look into what to expect when working with an MDI. These are just a handful of the 150+ MDIs throughout the nation, and they were chosen for this post because of their years of success, an array of financial products and services, and the work they have done within their respective communities.
First Independence Bank
First Independence Bank is a Black-owned MDI that provides financial products and services to individuals and businesses in the Detroit Metropolitan area. This institution was launched in 1970 and has helped businesses of all sizes meet their financial goals with products such as commercial real estate loans, term loans, SBA loans, and secured lines of credit.
First Independence Bank is also the majority owner of MAC Leasing, a certified minority-owned equipment leasing company. In addition to its MDI status, First Independence Bank also meets the requirements for classification as a Community Development Financial Institution (CDFI). It is also a certified Minority Business Enterprise (MBE). First Independence Bank has won numerous Bank Enterprise Awards throughout the years for its role in providing financial products and services to distressed communities.
American First National Bank
American First National Bank is an Asian American-owned MDI that serves businesses and consumers throughout communities in Texas, Nevada, and California. Launched in 1998, this financial institution has grown to have total assets of nearly $2 billion.
In addition to being Asian American-owned, most employees within American First National Bank are also Asian American. Many employees speak multiple languages, giving them the ability to serve a variety of different customers in their native languages. American First National Bank has numerous financial products geared toward small businesses, including working capital loans, startup loans, and equipment loans.
This MDI is also very active within its communities, even offering speakers to speak about the bank and its services at schools, local businesses, and civic organizations.
Golden Bank, National Association
Golden Bank was established in 1985 and was the first minority-owned bank in the Greater Houston area. Today, the bank has expanded to serve customers in cities in Texas and California. This Asian-owned financial institution offers a number of business services, including business loans, deposits, cash management, and trade finance. Golden Bank even offers payment processing with no startup fees and a free terminal.
Golden Bank in recent years has been named a Five-Star Bank by Bauer Financial. This is the highest ranking in banking industries.
How To Find The Right Minority Depository Institution For Your Small Business
Is your business located in an underserved community? Do you need help with funds for starting your business, or perhaps you’re already in business and need capital for expansion? If your business is located in an underserved, distressed, low-income, or moderate-income community, you may benefit from the products and services offered by an MDI. Or maybe you just want to bypass the big-name banks and get a more personalized experience with a smaller, local institution — in which case, an MDI fits the bill.
Now, the next step is to find the right MDI for your business. Your business is unique and so are its financial needs. What works for one business may be a total mismatch for yours. To determine what MDI is the right fit for you, consider the following:
Location: Unlike major financial institutions that have hundreds (or thousands!) of branches nationwide, MDIs have far fewer branches and serve a more targeted area. Make sure that the MDI you select has branches and surcharge-free ATMs that are convenient to your business.
Eligibility: Some MDIs are credit unions that have membership requirements. This could be anything from a small monetary donation to living, working, or attending school in a specific area. Make sure that you meet all requirements before signing up.
Products & Services: Do you need industry-specific financial products? Is there a specific type of loan or borrowing limit that you need for your business? If so, make sure that the MDI you select offers the products you need, plus other products and services your business may require in the future.
Up-to-Date Technology: Most business owners don’t have hours to step into a branch or sit in a drive-through line for every single transaction. Look for MDIs that offer online banking services like access to your accounts, mobile services, bill pay, and online loan applications.
Also, FDIC-insured MDIs offer you protection you need in the event that the institution fails. You’ll have up to $250,000 insured, so you won’t have to worry about losing your hard-earned money.
Unsure of where to start your search? Check out the FDIC website, or review the list of MDIs supervised by the Office of the Comptroller of Currency (OCC) to get started.
Learn About Other Financing Resources For Businesses
Smaller financial institutions like MDIs aren’t for everyone, and it’s important to always explore your options first before diving headfirst into small business financing. While MDIs may be on your list, make sure to compare and weigh your other options. This includes working with a traditional bank or credit union, comparing rates with online lenders, or working with an SBA-approved lender to get a low-cost SBA loan. You can even use your personal credit profile and income to qualify for a personal loan for business. Regardless of which choice you make, take your time, do your research, and make the choice that’s best for your business. Good luck!
The post How A Minority Depository Institution Could Help Your Small Business Get Loans, Financing, & Other Services appeared first on Merchant Maverick.
This post originally appeared at Liquid Web WordPress Hosting Review: Pros, Cons & Alternatives via ShivarWeb
Liquid Web is one of the largest hosting companies in the world. They were founded in 1997 and have data centers in Michigan, Arizona, and The Netherlands.
See Liquid Web’s Current Plans & Pricing
They have traditionally focused on dedicated, VPS, and cloud hosting. However, in their recent growth push, they have expanded to offer a wide variety of products, including Managed WordPress Hosting.
What is Liquid Web Hosting Managed WordPress Hosting?
Liquid Web is a large, privately-owned hosting company. They grew with a focus on enterprise and dedicated hosting. They have traditionally offered a wide range of specialized hosting products for agencies, mid-size, and growing businesses.
In 2019, they acquired Nexcess Hosting, which expanded their hosting products to include more affordable, consumer-grade plans, including Managed WordPress Hosting.
Additionally, they acquired iThemes, a WordPress theme & plugin maker, in 2018. They offer shared WordPress hosting under the iThemes brand.
Before looking at Liquid Web’s pros & cons, let’s look at a bit of background so that we can compare apples to oranges to limes.
To begin, I’ve written about how WordPress Hosting is different than Web Hosting here.
The short version is that WordPress is simply software that can run on any Linux-powered web hosting server (aka shared hosting). But many companies have customized web hosting servers to optimize for WordPress’ typical resource usage.
They call these “WordPress Hosting Plans” – even though one company’s WordPress Hosting plan can be wildly different than another company’s.
At one end of the industry are specialist WordPress Hosting companies like WP Engine and Kinsta. They *only* do hosting for WordPress with costs to affordability and versatility. On the other end are shared hosting companies that tweak their shared servers for WordPress, but still focus on affordability and versatility.
Liquid Web’s tries to split the difference with their Managed WordPress Hosting product. They want to be more affordable & versatile than specialist WordPress hosts, while also providing unique & more robust product than many shared hosting companies offer.
If most shared hosting companies are selling Toyotas, Honda & Fords; and specialist companies are selling Porsches or Teslas, then Liquid Web is trying to sell a Mercedes or BMW.
Ok, let’s outline how that plays out with pros, cons & use cases.
Pros of Using Liquid Web for WordPress
There are many Liquid Web Hosting reviews online – usually with user-generated reviews based on anecdotes and personal experience.
That’s fine, but I take a different approach. Like I mention in all my hosting reviews, there is no such thing as a “best” web host. It’s all about the right fit for your project based on your goals, budget, experience & expertise. Here are the pros (advantages) for considering Liquid Web Hosting.
Performance & Speed
The number one job of any web host is to safely & securely store your website, and quickly deliver those files to any visitor who requests them.
There is a lot that goes into website speed. Using Liquid Web will not instantly make your website fast, but they take care of everything in their control.
Liquid Web’s Managed WordPress Hosting plans are built & managed with WordPress in mind. They aren’t just re-hashed web hosting plans.
While they do have some limits (see cons section), within those limits, Liquid Web runs WordPress well. Here’s an example speed test that I ran with no optimization or caching installed.
Note the Time to First Byte (TTFB). While it’s best measured as a trend, it is the most straightforward & most accessible metric that you can use to measure a hosting company. Liquid Web excels on that measurement.
Additionally, Liquid Web seems to excel with large, memory-hungry plugins like WooCommerce. They allocate the right resources and provided servers that are configured & prepared for high-use ecommerce stores.
Support & Onboarding
Liquid Web’s customer support & customer onboarding is reliable. For a large company, they have still maintained a “human” approach to marketing.
Their Net Promoter Score (a standard measurement of customer satisfaction) has been consistently high for years.
Additionally, they consistently invest across multiple support channels, including phone, chat, ticket, knowledgebase, and support forum. This investment level is my usual “proxy” for judging a company’s commitment to customer service.
Additionally, Liquid Web has an great onboarding sequence for moving a new signup to a consistent customer.
When I started my account, I had no issues and no confusion about what to expect or what to do next.
Hosting Features & Extras
Liquid Web’s Managed WordPress Hosting has excellent features plus extras that they don’t really promote.
Their resource allocation is solid, with no visitor caps. They have multiple data centers across the US & Europe.
They compete well with both shared hosting companies and specialist companies on raw features and allocations. But they add in a few different features as well.
They have a clean, accessible backend with both staging & development environments.
They also provide an interesting “Visual Comparison” tool that allows you to quickly preview any WordPress plugin / theme changes without rolling it out to the staging or live server.
They also have a unique cloud autoscaling feature so that your WordPress site will never crash under user pressure.
This feature is especially useful for high memory usage plugins like WooCommerce, BuddyPress, and bbPress that can come under high concurrent user pressure (i.e., lots of people trying to refresh their cart / feed / thread at the same time).
Comprehensive Hosting Products
Liquid Web has been a leader in the enterprise & dedicated hosting industry for quite some time. This history means that they have a whole suite of specialist hosting products for rapidly growing or unique sites.
No matter how your business changes, you can almost certainly stay with Liquid Web to solve your hosting needs. This point is especially important for web design firms or freelancers looking to find a long-term hosting partner.
My podcast co-host recently switched his marketing agency to Liquid Web for this very reason. Liquid Web’s support removed the agency’s dev maintenance workload so that they could focus on client work, while still getting the same performance as self-managed cloud hosting.
WordPress-specific Product Bundles
In addition to their Nexcess Hosting acquisition, Liquid Web also acquired iThemes – a popular WordPress plugin & theme provider.
With the iThemes brand, Liquid Web can bundle several “must-have” WordPress plugins. iThemes has always made high-quality plugins. Using Liquid Web allows WordPress users to get those otherwise paid plugins for free.
It’s a nice upside that enables customers to compare “apples to apples” with other companies such as WP Engine, InMotion, WPMU Dev, and Bluehost, who have all bundled similar premium plugins with their WordPress hosting product.
Cons / Disadvantages of Using Liquid Web for WordPress
Like any web host, Liquid Web has disadvantages. There are plenty of Liquid Web complaints online. But remember, that like the pros, these are all in the context of your goals & priorities. With that said, here are the cons that I found while using Liquid Web Hosting.
Liquid Web Pricing
Liquid Web’s pricing hits that classic “middle choice” problem.
On one hand, their pricing is great. It’s a great value. On the other hand, it’s neither affordable enough nor valuable enough.
Let’s go back to thinking about my car analogy. Imagine you just need a solid, reliable car to commute around your city. Do you need a Mercedes, or would a Honda do just fine?
Imagine you have the budget & needs for a luxury car. Do you really want a Mercedes, or would you prefer a Porsche or even a Bentley instead?
For solid, customized WordPress Hosting, there are companies with solid service, solid specs, and higher limits that are much cheaper than Liquid Web (e.g., this site uses InMotion Hosting’s WordPress Hosting).
There are WordPress services that WP Engine and Kinsta offer that Liquid Web is unlikely to roll out – because WordPress is not their main focus.
Liquid Web also limits some of their plans, especially on bandwidth, in a way that reduces their overall value.
Liquid Web provides its own custom backend to manage your server instead of the standard cPanel.
It does provide some upsides like other companies with a custom backend (SiteGround, DreamHost, and GoDaddy). It saves cPanel licensing fees, streamlines some tasks, and allows for a more uniform product.
However, a custom backend also creates additional problems for anyone who has developed a cPanel-based workflow, multisite management, or likes to search to solve server management issues.
In other words, Liquid Web’s backend issues are unique to Liquid Web and require Liquid Web’s support and expertise. There are no quick Googling fixes. And if you are managing multiple client sites, you’ll have to use Liquid Web’s tools rather than industry-standard cPanel tools.
Liquid Web’s WordPress plans start at $19/mo for a single site. They don’t have anything cheaper. Even iTheme’s old $4/mo beginner tier no longer exists.
$19/mo is well and fine for a growing site that needs solid resources and support. But what happens if you need to downgrade due to a loss in traffic? There’s no cheap tier to downgrade to.
The lower tier is a customer segment that Liquid Web does not work with. That’s great, but also something to consider if you are shopping around.
For example, I manage several smaller sites that I have high hopes for, but are also young & fragile. I’ve had to upgrade but also downgrade those sites to stay in budget. Liquid Web’s plans would not allow the downgrade option.
Liquid Web does a good job “humanizing” their support & onboarding channels. Their product & support language is friendly & welcoming. But it’s also decidedly focused on people who understand hosting jargon.
Some of their best hosting features are undersold because they are explained with hosting jargon. Part of this comes from their positioning & price point.
They are best for agencies or website owners who know what they are looking for in website hosting. However, it’s something to keep in mind if you are looking at moving from a hosting company that you’re familiar with – or are just starting.
Bundled WordPress Products
Liquid Web’s iThemes plugin / theme bundle is a solid pro, but it’s also a bit of a downside if you prefer other premium plugins.
iThemes comes as a suite of tools that work best together, especially their backup & security plugins. They are fine, but they aren’t what I prefer (I use JetPack and WPMU Dev).
If you choose to use a different suite of plugins / themes, you aren’t going to get as much value out of your plan as you normally would. It’s not a huge deal, but it’s something to keep in mind when comparison shopping.
Liquid Web Use Cases
Liquid Web is a solid host, but they work particularly well for certain customer segments. Here’s a few cases where they are the best / better choice over competitors.
Profitable, Growing Website
If you have a profitable, rapidly growing WordPress website with lots of resource usage and dependable support needs, then Liquid Web would be a good choice. Their plans have more immediate value than specialist hosts while also providing more resources than shared hosting companies. Be sure to consider the downgrade downside, and look at other WordPress hosting companies.
Web Design & Development Agency
If you have a web design / development agency, the Liquid Web would be a solid choice to consider. They have consistent hosting with helpful performance for you & your clients. You can maintain a profitable maintenance retainer by shifting support needs from your development team to Liquid Web. Be sure to consider the cPanel downside, and what hosting price you are trying to pass along to your clients.
WooCommerce Store Owner
If you are running an ecommerce store on WooCommerce, then Liquid Web would be an excellent choice. They brought in a lot of ecommerce expertise with the Nexcess acquisition (both for Magento and WooCommerce). Their plans & support team has familiarity with WooCommerce’s needs since they have such a large base of WooCommerce customers.
Is Liquid Web Managed WordPress Hosting Good?
Liquid Web is a solid hosting company with an excellent managed WordPress hosting plan. They aren’t the right choice for every customer.
But if you value support, performance, and a solid price point for manage WordPress hosting, they are a good choice.
See Liquid Web’s Current Plans & Pricing
For other Liquid Web alternatives, explore my Best WordPress Hosting post.
Liquid Web WordPress Hosting
Liquid Web is a longstanding, respected hosting company. Their new Managed WordPress Hosting product is well-executed and worthwhile, if it’s within budget & meets your website’s needs.
Crowdfunding has risen in prominence over the past decade to become a major source of business financing for companies and entrepreneurs around the world. However, while services such as Kickstarter and Patreon garner the lion’s share of attention, there’s another type of crowdfunding available â one that applies crowdfunding principles to traditional forms of lending. This hybrid method of raising capital is becoming known as debt crowdfunding.
Perhaps you’re already considering debt crowdfunding as an option for your business, startup, or creative project, or you’re simply curious about the concept. Either way, it’s important to understand what debt crowdfunding is, how it differs from other forms of crowdfunding, and how you can use it to raise funds for your business.
What Is Debt Crowdfunding?
Debt crowdfunding is sometimes referred to as “peer-to-peer (P2P) lending” and “crowdlending,” as it combines the concepts of crowdfunding and lending. A crowdfunded loan works similarly to a traditional business loan from a bank or other lending institution in that money is sent to the borrower by a lending institution. In exchange, the borrower repays the loan with interest over a specified period.
However, there are some key differences between traditional loans and crowdfunded loans. With the latter, your borrowed funds are disbursed by a debt crowdfunding platform, not a bank or other financial institution. And while the crowdfunding platform sends you the funds, the money comes from individual investors who pledge to provide a portion of your loan funds. When you repay the crowdfunding site with interest, the funds are then distributed back to the individual investors.
Considering how difficult it has become to qualify for a bank loan since the financial collapse of 2008, it’s little wonder that businesses have been turning to debt crowdfunding in greater numbers. Debt crowdfunding allows you to market your funding campaign to individual investors rather than relying on the hope that a large, opaque institution finds your business worthy of support.
How Debt Crowdfunding Works
With debt crowdfunding, potential borrowers submit a loan proposal to a crowdlending website. The platform assesses your proposal to judge its suitability. If your application is approved, the platform then offers you rates and fees that correlate with the degree of risk your loan poses to potential investors. The riskier the investment, the more money the peer lenders will want in return, leading to higher interest rates for your loan.
As we explain in our piece on P2P lenders, the primary advantages of P2P loans over traditional business loans provided by a bank or credit union are thus:
Application Process Is Simpler & More Convenient:Â Unlike a bank loan, which typically involves a lengthy application process and may require such things as business visits, debt crowdfunders let you apply online, usually without requiring even a phone conversation.
Quicker Approval & Funding:Â Ordinary small business term loans take much longer to get funded than the average P2P loan, making debt crowdfunding a good funding option for businesses needing funding relatively quickly.
While operating on the same basic principles, debt crowdfunding sites vary greatly in terms of the types of businesses to which they cater. For instance, Funding Circle lends to small businesses with at least two years of business history, while StreetShares requires less time in business and has a particular focus on veteran-owned business. Meanwhile, Kiva US is devoted to startups with no business history at all and offers loans with no interest whatsoever, but it has a lengthy application process and a long wait to get funded (one to three months). Point being, no two P2P lenders are the same, so do your due diligence before applying for a crowdfunded loan.
Check out our explainer article on debt crowdfunding for an in-depth analysis.
Debt VS Equity Crowdfunding
Equity crowdfunding bears considerable resemblance to debt crowdfunding. Both types of fundraising involve the solicitation of investments in the security of your business. The difference is that a P2P loan is just that â a loan. You pay the lender back on a fixed schedule with interest, and that’s that.
With equity crowdfunding, the investor receives an ownership stake in your business. This sort of fundraising was only recently legalized when the JOBS Act was signed into law in 2012 (the provisions took some time to go into effect). It legalized the advertising and solicitation of securities, thereby allowing businesses to launch equity crowdfunding campaigns.
Investors seeking hot equity investments often look for early-stage ventures with exponential growth potential to get in on the next big thing. Debt investors, on the other hand, simply expect to be paid back plus interest. For this reason, debt crowdfunding is a viable option for a greater proportion of small businesses out there than equity crowdfunding. To plenty of small business owners, this is probably just as well, considering debt crowdfunding doesn’t require you to relinquish any control over your business and forfeit a portion of all your future profits.
Debt VS Rewards Crowdfunding
Rewards crowdfunding Ã la Kickstarter, Indiegogo, and Patreon is a beast of a different nature. Legally, rewards crowdfunding isn’t investing, so it’s not regulated as such, making it a less complicated and more straightforward prospect overall.
With rewards crowdfunding, you invite backers to contribute financially to your venture, and in exchange, you offer them rewards. A reward could be a prototype of a new consumer product you’re manufacturing, tickets to a viewing of your film, access to exclusive episodes of your podcast, etc. It’s a way to get your potential customer base excited about contributing to your success.
Since it doesn’t entail you taking on debt, rewards crowdfunding looks pretty good as an alternative to a loan. However, keep in mind that with rewards crowdfunding, your ability to raise funds is dependent on your ability to make your funding campaign go viral. It’s a very competitive arena, and in some cases, you’ll be competing for attention with campaigns backed by crowdfunding agencies. What’s more, funding is anything but rapid â your typical rewards crowdfunding campaign is open for 30-60 days. (Patreon-style ongoing campaigns are different, as you’re essentially selling subscriptions.) And with Kickstarter, in particular, if you don’t meet your funding goal within the time frame you initially set, you don’t get any of the funds pledged to you â it’s all or nothing.
For the right kind of business venture, rewards crowdfunding can work swimmingly while keeping you out of debt. Just know that it isn’t well-suited to many types of small businesses, requires thoughtful promotion, and is not quick.
When Debt Crowdfunding Is The Right Choice For Your Business
Making debt crowdfunding work for your small business requires that you have a) a defined need for money, b) a strategy for what to do with it, and c) a plan to pay it back. Compared to other forms of crowdfunding, debt crowdfunding is both likelier to succeed and (generally) a swifter method of funding. Furthermore, you’ll probably get more flexible terms and a lower interest rate on a P2P loan than you would with a bank loan (along with an easier application process and a quicker time to funding).
If you’ve got a great working relationship with your bank, you might consider trying to get a loan from them instead. And if you’re involved in an exciting project or cause with lots of potential for viral success, one of the sexier forms of crowdfunding might ultimately prove more lucrative for your business. However, that still leaves a wide swath of small businesses that stand to benefit from debt crowdfunding.
For more information on debt crowdfunding and how it compares to rewards- and equity-based crowdfunding, check out our article on the different types of business crowdfunding.
Not The Right Fit? Your Best Alternatives
Let’s look at some other funding alternatives and see how they measure up with P2P loans.
Don’t have enough business history to qualify for a crowdfunded business loan? Consider a personal loan instead.
With good credit, you may be eligible for a lower interest rate with a personal loan than with a business loan. However, borrowing amounts tend to be smaller, too. Still, if you need fast financing for business expenses, personal loans are definitely an option you should consider.
If you like this idea, check out our piece, How To Get A Personal Loan For Your Business.
Business Credit Cards
If you have a good credit score, a business credit card is probably the easiest way to secure business funding. Business credit cards give you access to a revolving line of credit to use on business expenses.
Just as with most P2P lenders, business credit card issuers report your payments to the credit bureaus, thus building your business credit. This may increase the odds that you’ll qualify for business loans in the future.
In terms of convenience, there are few easier funding options than business credit cards. And unlike P2P loans, using a business credit card can earn you rewards or cash back. Just keep in mind that you might pay a higher APR with a business credit card than with a P2P loan.
Interested? Check out The Best Business Credit Cards for the rundown on your best options.
Merchant Cash Advances
Let’s say your poor credit score and/or lack of business history make you unable to qualify for either a loan or a business credit card. You may still be able to get a merchant cash advance, which is a sales agreement that will have you selling your future revenue at a discount to a merchant cash advance company.
A merchant cash advance should not be an option of first resort, as the fees are very high, and the repayment periods are quite short. An MCA can easily send you into a debt spiral if you’re not prepared to handle it. However, if your business is capable of generating the revenue necessary to pay it back, an MCA might be just the thing to keep your business going.
Read our piece on merchant cash advances for more information.
Final Thoughts On Debt Crowdfunding
Debt crowdfunding has become increasingly prevalent in a world where bank loans are harder than ever to come by. If you think a P2P loan makes sense for your business, do your due diligence and compare your available options.
If you’ve ever taken out a crowdfunded loan, drop us a comment and let us know about your experience!
The post What Is Debt Crowdfunding & When Is It The Right Choice For My Small Business? appeared first on Merchant Maverick.