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Maryland Small Business Loans

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How To Start And Fund A Coffee Shop


opening a coffee shop

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

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

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

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

Preparing To Start A New Coffee Shop Business

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

1. Decide Whether To Buy A Franchise

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

2. Determine What You’ll Sell

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

3. Choose A Name & Theme

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

4. Create A Business Plan

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

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

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

5. Find A Location

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

Funding Your Coffee Shop

business line of credit loan

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

1. Family & Friends

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

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

2. Short-Term Business Loan

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

Recommended Option: Lendio

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

Lendio Borrower Requirements:

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

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

3. Personal Loan

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

Recommended Option: LendingPoint

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

LendingPoint Borrower Qualifications:

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

4. Short-Term Line Of Credit

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

Recommended Option: Fundbox

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

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

Fundbox Direct Draw Borrower Qualifications: 

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

5. Startup Loan

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

Recommended Option: Upstart

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

Upstart Borrower Qualifications:

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

6. Vendor Financing

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

Recommended Option: Shopify Capital

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

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

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

Shopify Capital Borrower Requirements:

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

7. ROBS

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

Recommended Option: Benetrends

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

Benetrends Rainmaker Borrower Qualifications:

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

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

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

8. Purchase Financing

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

Recommended Option: Behalf

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

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

Behalf Borrower Requirements

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

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

9. Credit Card

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

Recommended Option: Chase Ink Unlimited

Chase Ink Business Unlimited

chase ink business unlimited
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Annual Fee:

$0

 

Purchase APR:

15.49% – 21.49%, Variable

Required credit: Good, excellent

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

Purchase intro APR: 0% for the first 12 months

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

Foreign transaction fee: 3%

Rewards: 

  • Unlimited 1.5% cash back rewards on all purchases

Notable perks & benefits:

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

Ink Business Unlimited℠ Eligibility

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

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

Opening Your Cafe

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

1. Assemble Your Professional Team

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

2. Begin Remodeling

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

3. Acquire Equipment & Materials

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

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

4. Create A Buzz With Marketing

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

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

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

5. Bolster Your Web Presence

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

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

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

6. Hire & Train Employees

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

7. Choose A POS System

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

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

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

Final Thoughts

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

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

Oh, and don’t forget the free WiFi!

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The Best Business Loan And Financing Resources For Michigan Small Businesses

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

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

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

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

Online Business Lenders For Michigan Businesses

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

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

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

Lendio

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

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

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

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

OnDeck

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

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

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

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

To qualify, you must meet these requirements:

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

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

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

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

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

IOU Financial

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

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

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

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

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

Credibly

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

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

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

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

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

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

To qualify for this financial product, you must have:

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

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

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

To qualify for an MCA, you must have:

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

Kabbage

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

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

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

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

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

LendingPoint

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

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

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

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

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

Banks, Credit Unions, & Nonprofit Lenders In Michigan

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

Comerica Bank

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

For small businesses, Comerica offers financial services including:

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

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

Lake Michigan Credit Union

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

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

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

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

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

Opportunity Resource Fund

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

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

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

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

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

Small Business Grants In Michigan

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

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

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

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

Community Ventures

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

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

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

NEIdeas

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

To qualify, businesses must meet the following requirements:

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

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

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

SCIP/TCA

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

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

Loans & Resources For Startups In Michigan

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

SCORE

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

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

Michigan Small Business Development Center

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

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

Michigan Women’s Foundation

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

What To Consider When Choosing A Lender

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

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

Application Process

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

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

Speed Of Approval

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

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

Loan Restrictions

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

Borrowing Limits

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

Rates & Terms

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

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

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

Borrower Requirements

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

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

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

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

Final Thoughts

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

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

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

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

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The Best Business Loan And Financing Resources For Colorado Small Businesses

Colorado is one of the fastest-growing states in the nation. Not only is its population burgeoning, but its economy is flourishing and only expected to grow into the future. Professional and business services, the tech industry, and agriculture are among the sectors that will continue to bring new jobs and contribute to the state’s economy.

It isn’t just big business that’s helping the economy grow, either. Small businesses play an extremely important role throughout the state. Unfortunately, these smaller businesses — businesses just like yours — may struggle to find the financing and resources they need to be successful.

The good news is that there are plenty of financing options available to small business owners. The key is knowing where to find them. Instead of spending hours wading through lenders, scratching your head over interest rates and terms, or struggling to get the capital you need, keep reading this post — we’ve taken the guesswork out of small business financing. From online and traditional lenders to grants and more, read on to learn about the resources available to Coloradans.

Online Business Lenders For Colorado Businesses

You probably already use the internet for business — from communicating with clients and suppliers via email to placing orders for inventory and paying utility bills. Why not use it to find financing for your business?

Online lenders make it more convenient than ever to apply for small business loans and financing. You can fill out your application, submit your documentation, and even receive funds in your bank account — all without ever leaving your home or office.

It’s possible to get the financing you need in as little as 24 hours by working with an online lender. Even if you’ve had trouble qualifying for financing in the past, there are online options available to you. Start by checking out these recommended lenders.

Lendio

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  • Time in business: 6 months
  • Business revenue: $10,000 per month
  • Personal credit score: 550
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Lendio makes shopping around for financing easier than ever. A single application connects you with over 75 lending partners, allowing you to compare rates and find the most affordable financing options in just minutes. Applying with Lendio is free, there’s no obligation, and your credit score isn’t affected by checking your offers.

No matter what type of small business financing you need, you can connect with the right lender through Lendio. Financial products available through Lendio include:

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

Rates, terms, and borrower requirements vary. You may receive your funds in as little as 24 hours based on the product you select.

SmartBiz

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  • Must be in business at least 2 years.
  • Must have a personal credit score of 650 or above.
  • Must have a business credit score of 150 or above.
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If you don’t qualify for a low-interest bank loan, there may be an alternative: Small Business Administration loans.
The SBA guarantees a portion of the loans provided through its various loan programs, so lenders feel more confident in financing small businesses. Meanwhile, you’ll get the benefit of a low-interest, long-term loan, even if you’ve been turned down by banks and traditional lenders in the past.

Navigating the SBA application process can be a challenge, but SmartBiz has simplified it through its online marketplace. You can prequalify in minutes, receive funds quickly, and easily move through the SBA loan process by working with SmartBiz.

Through SmartBiz, you can apply for a loan used for working capital or to refinance debt. Loans are available for $30,000 to $350,000 with interest rates of 8.25% to 9.25%. Repayment terms are up to 10 years.

Funds for these loans can be used to refinance existing debt, purchase inventory or equipment, launch a marketing campaign, hire new employees, or cover operating expenses. Loan funds can’t be used to pay unpaid taxes.

To qualify for this loan, you must meet these minimum requirements:

  • At least 2 years in business
  • U.S. citizen or legal permanent resident
  • Personal credit score of 640 or above
  • Cash flow to cover loan payments
  • No bankruptcies or foreclosures within 3 years
  • No defaults on government-backed loans
  • No outstanding tax liens

If you want to purchase, expand, or refinance your commercial property, you can apply for an SBA 7(a) commercial real estate loan. Through SmartBiz, you can apply to receive $500,000 to $5 million with interest rates of 7% to 8.25%. Repayment terms are up to 25 years.

These minimum requirements apply to all borrowers:

  • At least 51% of the property is occupied & used by your business
  • Time in business of at least 3 years
  • Personal credit score of 675 or above
  • Cash flow to cover loan payments
  • Purchase price exceeds $500,000
  • U.S. resident or legal permanent resident
  • No bankruptcies or foreclosures within the last 3 years
  • No outstanding tax liens
  • No defaults on government-backed loans

Funds from these loans can’t be used to purchase investment properties or to fund new construction costs.

OnDeck

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  • Time in business: 12 months
  • Business revenue: $100,000 per year
  • Business industry: Must not be in a restricted industry
  • Personal credit score: 600
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OnDeck offers two loan options for small business owners in Colorado: term loans and lines of credit. Let’s start off by looking at the options for OnDeck’s term loans.

With a term loan, you can receive a lump sum in amounts up to $500,000. OnDeck offers short-term loans with terms of 3 to 12 months and simple interest rates starting at 9%. This means that your interest rate is a percentage of your loan amount. If you borrow $20,000 at a simple interest rate of 9%, you’ll pay $1,800 in interest — or a total of $21,800 before any additional fees are applied.

Short-term loans are best for projects with an immediate return, such as seasonal hiring, inventory purchases, or launching a marketing campaign.

OnDeck also offers long-term loans. These loans have terms of 15 to 36 months with annual interest rates starting at 9.99%. Long-term loan funds are best for expanding your business, making large-scale inventory purchases, or buying equipment.

To qualify for a term loan, you must have:

  • Time in business of at least 1 year
  • At least $100,000 in annual revenue
  • Personal credit score of 500 or above

If you want a more flexible form of financing, apply for OnDeck’s line of credit. You can receive up to $100,000 with APRs starting at 13.99%. A line of credit is best for filling revenue gaps or paying unexpected expenses.

You only pay interest on borrowed funds, and payments are made each week through automatic deductions. A $20 monthly maintenance fee is required but will be waived for 6 months if you draw at least $5,000 within 5 days of opening your account. There are no draw fees for using your line of credit.

To qualify for a line of credit, you must meet these requirements:

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

Breakout Capital

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  • Must be in business at least 12 months with a revenue of $10,000 per month.
  • Must have a personal credit score of 600 or above.
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Breakout Capital provides qualified small business owners with up to $250,000 with its small business loans. Daily, weekly, and monthly repayment terms up to 2 years are available. Breakout Capital loans have a fee of 1.25% to 3.5% of the borrowing amount each month.

To qualify for a small business loan, you must have:

  • A time in business of at least 1 year
  • A personal credit score of 600 or above
  • At least $10,000 in monthly revenue

If you need more capital, you may want to consider FactorAdvantage. This service combines invoice factoring and a business loan to provide qualified borrowers with up to $500,000. Fees start at 1.25% of the borrowing amount per month, and repayment terms are available up to 2 years.

If neither of these options seem right for you, Breakout Capital’s lending experts can connect you with other financing options including:

  • SBA 7(a) Loans
  • Equipment Leases
  • Merchant Cash Advances
  • Lines Of Credit

Fundbox

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  • No time in business requirements, but must have used a compatible accounting or invoicing software for at least 2 months, or a compatible business bank account for at least 3 months.
  • Business revenue: $50,000 per year
  • No specific personal credit score requirement
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If you want a fast, flexible line of credit that you can access in just minutes, take a look at what Fundbox has to offer.
You can qualify for a line of credit up to $100,000 when you apply with Fundbox. Repayments are made over a 12- or 24-month period, and payments are automatically withdrawn from your business bank account each week.

Fees for using your Fundbox line of credit start at just 4.66% of the draw amount and are based on the performance of your business. If you don’t use your line of credit, you never pay any fees. As you repay your line of credit, funds are replenished and become available to use again.

Fundbox has a fast and easy application process with minimum borrower requirements. To qualify, you must have:

  • Business checking account
  • At least $50,000 in annual revenue
  • At least 3 months of transactions from your business bank account OR at least 2 months of activity in accounting software

Amex Merchant Financing

American Express OptBlue

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  • Time in business: 24 months
  • Business revenue: $50,000 per year
  • Personal credit score: Good to excellent
  • Other: Must accept Amex cards or have an Amex business credit card (depends on the type of financing you are applying for)
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If your small business accepts American Express, you may qualify for a business loan up to $2 million with American Express Merchant Financing.

One of the best things about Amex Merchant Financing is you don’t have to worry about confusing interest rates or fees. Instead, you pay one fixed fee for your loan. Fees are based on the terms you select and range from 1.75% to 20% of the borrowing amount. If you repay your loan early, you could receive a rebate of up to 25% of your fee.

Repayment terms of 6, 12, and 24 months are available. A fixed amount will be automatically deducted from your bank account each business day to repay your loan.

Borrowers must meet the following requirements to qualify:

  • Accept American Express Cards
  • Have at least $12,000 in annual credit & debit receivables
  • Have at least $50,000 in annual business revenue
  • Have a time in business of at least 2 years

Credibly

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  • Must be in business at least 6 months with a revenue of $15,000 per month.
  • Must have a personal credit score of 500 or above.
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Credibly is a lender that doesn’t have a one-size-fits-all solution for small businesses. Instead, this lender offers three products to give small business owners the capital they need: working capital loans, business expansion loans, and merchant cash advances.

A working capital loan is ideal for covering operational expenses and fueling business growth. Under this program, you may qualify for up to $400,000 that can be repaid over terms of 6 to 18 months. Automatic payments are withdrawn from your account daily or weekly.

Instead of a traditional interest rate, these loans come with factor rates that start at 1.15. Learn more about how factor rates affect the cost of your loan.

The requirements for a Credibly working capital loan are:

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

If you’re ready to expand your business, consider applying for Credibly’s business expansion loan. You can receive up to $250,000 with terms of 18 or 24 months. Repayments are automatically deducted each week. Interest rates for these loans start at 9.99%.

For Credibly’s business expansion loans, you must have:

  • A personal credit score of 600 or above
  • Time in business of at least 3 years
  • At least $15,000 in average monthly bank deposits
  • At least $3,000 in average daily balances

The final option that may work best for you is a merchant cash advance, or MCA. Credibly purchases a percentage of your future receivables. Daily remittances are made until your loan plus any applicable fees are repaid. The estimated duration of this type of financing is 3 to 18 months.

With this type of financing, you can qualify for up to $400,000. Factor rates start at 1.15.

Requirements for a Credibly MCA are:

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

Upstart

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  • Time in business: N/A
  • Personal credit score: Minimum 620
  • Business revenue: N/A
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Having trouble finding a low-interest loan option? Consider using your own personal credit score and income to qualify for a personal loan for business. Whether you’re operating a brand new business or you can’t meet the requirements of small business lenders, getting a personal loan could be the hassle-free, affordable option you’re looking for.

Upstart is an online lender that offers personal loans that you can use for your business expenses. You can borrow between $1,000 and $50,000 with APRs starting at 8.09% for the most qualified borrowers. Don’t have perfect credit? It’s no problem. You can still qualify for a loan with APRs up to 35.99%.

One of the unique things about Upstart is that the lender considers more than just your credit score when approving your loan. Upstart looks at overall credit history, area of study, job history, and education to determine if you qualify for a loan.

To qualify for an Upstart personal loan, you must meet the following minimum requirements:

  • A source of income
  • Personal credit score of 620 or above
  • No bankruptcies or public records
  • Less than 6 inquiries within the last 6 months on your credit report
  • A solid debt-to-income ratio

Banks, Credit Unions, & Nonprofit Lenders In Colorado

If you’d rather work with a traditional lender, there’s no shortage of them in Colorado. Work with your own bank or credit union, or consider one of these options for your business financing.

Bank Of Colorado

The Bank of Colorado has branches located all throughout the state, including cities like Akron, Colorado Springs, Fort Collins, and Denver. The Bank of Colorado offers multiple financial products for small business owners. In addition to business checking and savings accounts, you can apply for:

  • Business Credit Cards
  • Business Loans
  • Lines Of Credit
  • Agriculture Loans & Lines Of Credit
  • Equipment Loans
  • Real Estate Loans
  • Livestock Loans

Bank of Colorado also offers merchant card processing, employee benefits, and other small business services. Visit your local branch to apply for Bank of Colorado’s small business banking services.

Ent Credit Union

Ent Credit Union was founded in 1957 and has grown to over 30 branches throughout the state with more than 330,000 members. Service centers can be found in cities including Aurora, Denver, Colorado Springs, and Parker.

You can apply for small business checking, savings, and money market accounts. If you need extra capital for your business, you may also qualify for one of Ent’s financial products including:

  • Business Auto Loans
  • Business Credit Cards
  • Lines Of Credit
  • Commercial Real Estate Loans
  • Business Term Loans
  • Equipment Loans
  • SBA 504 Loans

To apply for any type of financing, you must be an Ent Credit Union member. To qualify for membership, you must meet one of the following requirements:

  • Live, work, attend school, or worship in one of the counties served by Ent
  • Be civilian or military personnel of the Colorado Air National Guard or Colorado Army National Guard
  • Be associated with Buckley Air Force Base
  • Have a family member that is a member of Ent

You can sign up for membership online, by phone, or through a service center.

Colorado Enterprise Fund

Colorado Enterprise Fund is a nonprofit lender that specializes in lending to small businesses that may not qualify for traditional financing. Since 1976, this lender has closed over 2,000 loans for small business owners in Colorado.

There are multiple financing options available through the Colorado Enterprise Fund, including:

  • Dream Big Microloans: Up to $50,000 with terms up to 7 years
  • Step Up Loans: Up to $500,000 with terms up to 10 years
  • Healthy Food Loans: Up to $500,000
  • Valor Loans For Veterans: Up to $500,000 with terms up to 10 years
  • SBA Community Advantage Loans: Up to $250,000 with terms up to 25 years
  • Just In Time Lines Of Credit: Up to $100,000 with terms up to 2 years
  • GAP Loans: Up to $500,000 with terms up to 25 years
  • Commercial Real Estate Loans: Up to $500,000 with terms up to 7 years

Startups and existing businesses may be eligible to receive funding. Colorado Enterprise Fund will evaluate several factors when determining whether to approve an application, including:

  • Personal Credit Score
  • Equity
  • Industry Experience
  • Payment History
  • Cash Flow & Profitability
  • Collateral

The online application and all requirements can be found on the Colorado Enterprise Fund website.

Small Business Grants In Colorado

startup grants

Nothing in life is free … or is it? If you qualify for a small business grant, you could get the financing your business needs without having to repay the funds. No interest rates, no debt, no problem, right?

Unfortunately, many small business owners find that the process of finding, qualifying for, and receiving a small business grant is extremely difficult. Even if you meet the stringent criteria, you’ll have to compete with many other small business owners.

This doesn’t mean that you should just forget about small business grants. If you qualify, you certainly should take the time to apply. However, just understand that you also need to consider other sources of capital for your business.
In the state of Colorado, there are several grant opportunities available to small business owners. Get started with these options.

LEADING EDGE For International Opportunities

Leading Edge for International Opportunities is a grant program administered by the Colorado Office of Economic Development and International Trade. The proceeds from these grants are used for covering the costs of export projects. Minority, veteran, and women-owned businesses are eligible to apply.

Through this program, grant recipients can receive up to $10,000 to pay for costs associated with international business development and marketing projects, including foreign trade show exhibition and conference costs, advertising in overseas industry trade publications, and foreign business-to-business matchmaking services.

To qualify, businesses must meet the following requirements:

  • Employ fewer than 100 employees globally
  • Headquarters in Colorado OR at least 50% of employees based in Colorado
  • Registered with the Colorado Secretary of State
  • At least 51% ownership by minorities, veterans, or women
  • Time in business of at least 1 year

All information and the online application are available through the Colorado Minority Business Office.

Colorado First & Existing Industry Customized Job Training Grant Program

The Colorado First & Existing Industry Customized Job Training Grant Program is open to new or existing Colorado businesses. Through this program, grant funds can be used for training permanent, full-time employees. Businesses can receive up to $1,400 per eligible employee.

There are several requirements a business must meet to receive this grant, including:

  • Contributions of at least 40% to the total costs of grant-funded training
  • Must pay at least $13 per hour in urban counties and at least minimum wage in rural counties
  • Must offer health insurance to employees

To learn more about this grant and to apply, you must contact a CFEI college representative through the Colorado Community College System website.

Colorado Creative Industries Grants

Colorado Creative Industries offers multiple grant opportunities for small businesses and entrepreneurs. One of the most notable grant programs is the Career Advancement Grant. Through this program, you can receive matching funds up to $2,500 to stimulate a commercial creative business.

To qualify for this grant, you must meet these requirements:

  • A resident of Colorado
  • At least 18 years old
  • Have a creative sector business
  • Received no funding from CCI within 12 months of the application deadline

An online application for this grant and information on additional funding programs is available on the Colorado Creative Industries website.

Loans & Resources For Startups In Colorado

You have your business plan in place, you’re motivated and focused, and you’re ready to launch your new business. There’s just one thing missing from the entrepreneurial equation: capital.

Getting a loan through your bank or even alternative lenders can be a challenge for startup businesses. But don’t let that get you down because there ARE options available to you if you know where to look.

Start your search for funding with these organizations. In addition to funding, you’ll also have access to loads of resources including business training, one-on-one consultations, and educational materials to help you start and operate a successful small business.

Colorado Small Business Development Center Network

If you need business consulting, look no further than the Colorado Small Business Development Center Network. There are more than 80 centers located throughout Colorado that offer free one-on-one consulting on topics including:

  • Marketing
  • Financial Assistance
  • QuickBooks
  • Business Plan Writing
  • Certifications
  • Social Media Strategies

Workshops, scholarships, strategic planning courses, eLearning videos, and special events are also offered through the Colorado SBDC Network. Visit the official website or your local center for more information on the resources available to small business owners.

SCORE

Whether you need help starting your own business or advice for your existing business, check out SCORE to connect with a business mentor. You’ll receive free advice online, over the phone, or at a SCORE office near you.

Mentorships aren’t all that SCORE has to offer. You can also sign up for workshops, classes, and webinars. SCORE also has a large library of business resources to access. All services are available for free or for a low fee.

In Colorado, there are several offices throughout the state in cities including Denver, Colorado Springs, and Pueblo. You can call or visit your local office or go online to request a mentor.

What To Consider When Choosing A Lender

As you can see, there are plenty of small business financing options and resources for Coloradans. However, narrowing down your choice to just one is still a daunting task. Whittle down your choices by considering the following:

Does The Lender’s Products Fit My Needs?

One of the first steps you should take before seeking financing is to determine what product works best for you. If you want capital that’s available when you need it, work with a lender that offers business credit cards or lines of credit. If you need a large amount of capital, find lenders that offer long-term, low-interest loan options. By determining what type of financing works for your business beforehand, you can eliminate lenders that don’t offer the financial products you need.

Do The Rates & Terms Work For Me?

Shop around to compare rates and terms of lenders that are at the top of your list. Would you rather make one monthly payment? Cross off the lenders that require weekly, daily, or bi-weekly payments. Have a good credit score? Avoid lenders that specialize in financing to less creditworthy borrowers, since interest rates will often be much higher.

Always take the full cost of financing into consideration, including additional fees charged by the lender. Then, analyze your other business debts. You should ensure that your business can comfortably afford to take on additional debt before signing on the dotted line.

Will The Funding Be Enough For My Business?

How much capital do you need for your business? Once you’ve determined the amount you’re seeking, you can narrow down your list of lenders. If you need $100,000 to purchase new equipment, a lender with loans that max out at $50,000 won’t cut it. Calculate how much you need to borrow, then select a lender that can meet your financial needs.

Do I Meet The Lender’s Requirements?

Before you apply for financing, check your credit score, understand any negative items on your credit report, and have a grasp of the financials of your business. Most lenders look at factors including personal and business credit scores, personal and business credit history, time in business, and annual revenue. If you fall short with one lender, find a lender with requirements you can meet.

One last thing to note is that if you’re unable to meet the criteria of multiple lenders, it may be time to evaluate if now is the right time for financing. Break down your finances, work to build up your credit score, and explore all financial options before signing on to a high-interest loan with unfavorable terms.

Final Thoughts

Building a business is never easy. However, with the many resources available to Coloradans, you can increase your chances for success whether you’re just getting started or you’re ready to expand your business. Always do your research, consider all options available to you, and take the time to determine what steps to take next to best benefit your business.

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The Best Business Loan And Financing Resources For Ohio Small Businesses

Finding financing and other business resources can be a challenge for any small business. Maybe you don’t know where to look, or maybe there are just too many options and you have no idea where to begin. If you’re a small business owner in Ohio that needs help finding the right resources for your business, you’re in the right place.

In this post, we’ll explore the different financing resources available to your small business. We’ll review our picks for online business lenders that make the loan process faster and easier than ever. We’ll take a look at local banks, credit unions, and nonprofit lenders that offer financing to Ohio businesses. We’ll even explore small business grants that can put free money into your business. Whether you’re just starting a business in Ohio or your established business is ready to grow, there’s an option out there for you. And after reading this post, you’ll know exactly where to find it!

Online Business Lenders For Ohio Businesses

Small business owners are often strapped for time. From managing day-to-day operations to planning an expansion or gearing up for an upcoming busy season, it’s difficult to find enough hours to tackle your daily tasks, much less pile anything else on your plate. You need capital, but you just don’t have the time to sit on a phone with a lender or head into a bank to pitch your business.

Or maybe you have the time to get a loan, but you fall short in another area. Your credit score is low. Your time in business is too short. Your annual revenues aren’t where they need to be to qualify for a bank loan.

Whether it’s time, borrowing requirements, or some other issue that’s keeping you from applying for a small business loan, there’s an alternative: an online business loan.

You probably already use the internet to perform tasks for your business: bookkeeping, communicating with clients and suppliers, or ordering inventory, just to name a few. Why not leverage the internet to find the capital you need to start your business, grow your brand, or overcome a financial hurdle?

With online lenders, you can apply for your loan without ever stepping foot into a bank or office. You can shop your options, learn about requirements, and compare lenders from your computer or smartphone. Some lenders can even give immediate approvals and send over your funds in as little as one business day.

In addition to ease and speed, online lenders are opening up more opportunities than ever for small business owners. Bad credit? No business credit? Low revenues? Startup? No problem — there’s an option out there for you.

Ready to find an online lender? Instead of weeding through thousands of search engine results to find legitimate options, start your search with these lenders.

Lendio

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  • Time in business: 6 months
  • Business revenue: $10,000 per month
  • Personal credit score: 550
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Lendio makes shopping for the best financial product easier than ever. This loan aggregator has over 75 financial partners that you can reach through one simple application. You can compare multiple lender offers to find the most affordable option for your Ohio small business. From long-term, low-interest Small Business Administration loans to merchant cash advances, Lendio has it all.

Some of the financial products offered to small businesses through Lendio’s network include:

  • SBA Loans: Up to $5 million with terms up to 25 years
  • Term Loans: Up to $2 million with terms up to 5 years
  • Commercial Mortgages: Up to $5 million with terms up to 25 years
  • Startup Loans: Up to $750,000 with terms up to 25 years
  • Lines Of Credit: Up to $150,000 with terms up to 2 years
  • Short-Term Loans: Up to $500,000 with terms up to 3 years
  • Equipment Financing: Up to $5 million with terms up to 5 years
  • Merchant Cash Advances: Up to $200,000 with terms up to 2 years
  • Accounts Receivable Financing: Up to 80% of receivables with terms up to 2 years
  • Business Acquisition Loans: Up to $5 million with terms up to 25 years
  • Business Credit Cards: Up to $500,000

Filling out the application is quick and easy, and there’s no impact to your credit until you accept an offer. Depending on the type of financing you select, you could have the capital you need in as little as 24 hours. Borrower requirements and required documentation vary based on the product selected. Rates and terms vary by lender.

SmartBiz

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  • Must be in business at least 2 years.
  • Must have a personal credit score of 650 or above.
  • Must have a business credit score of 150 or above.
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If you’ve been in business for some time, you’re probably at least aware of the Small Business Administration. If not, you’re missing out on a very important resource. The SBA is not just an advocate for small businesses but also provides competitive, long-term loan options.

The SBA is not a direct lender. Instead, this organization guarantees small business loans distributed through its programs. Nonprofit organizations, banks, credit unions, and other lenders can feel more secure in taking on the risk of small business lending. Meanwhile, this opens the door for low-cost loan options for small business owners in Ohio, just like you.

Navigating the SBA loan process can be tricky, but smart business owners lean on SmartBiz to do the heavy lifting. SmartBiz simplifies SBA loans, removing the stress of the application process while putting money in your bank account faster than ever.

SmartBiz offers two SBA loan options for you. If you need to refinance high-interest debt or need extra money for working capital, marketing campaigns, inventory, equipment purchases, or operating expenses, you can apply for $30,000 to $350,000. You’ll have up to 10 years to repay your loan, and you’ll receive competitive interest rates of 8.25% to 9.25%.

To qualify, you must meet the requirements below:

  • Time in business of at least 2 years
  • U.S. citizen or permanent resident
  • Credit score of 640 or above
  • Sufficient cash flow
  • No bankruptcies or foreclosures within the last 3 years
  • No prior defaults on government-backed loans
  • No outstanding tax liens

If you need to purchase commercial real estate or refinance a commercial real estate loan, apply for the SBA 7(a) commercial real estate loan. You can receive between $500,000 to $5 million with repayment terms up to 25 years and interest rates of 7% to 8.25%.

The borrower requirements for SBA 7(a) commercial real estate loans are as follows:

  • Property must be at least 51% owner occupied
  • Purchase price must be more than $500,000
  • Time in business of at least 3 years
  • U.S. citizen or permanent resident
  • Credit score of 675 or above
  • Sufficient cash flow
  • Funds can’t be used to purchase investment properties or fund construction
  • No bankruptcies or foreclosures within the last 3 years
  • No prior defaults on government-backed loans
  • No outstanding tax liens

Credibly

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  • Must be in business at least 6 months with a revenue of $15,000 per month.
  • Must have a personal credit score of 500 or above.
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Credibly is an online lender that offers multiple financing options for small business owners. Credibly can preapprove you for up to $400,000 with final approvals in as little as 24 hours.

One of the financial products offered through Credibly is a working capital loan. You can qualify for up to $400,000 with repayment terms up to 18 months. These loans do not have traditional interest rates. Instead, Credibly’s working capital loans have factor rates that start at 1.15. Repayments on your loan are made daily or weekly.

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

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

Need longer terms for your loan? Credibly’s business expansion loans have terms of up to 2 years. These loans are available in amounts up to $250,000 with interest rates starting at 9.99%. This loan is repaid through weekly payments.

To qualify for a business expansion loan, you must meet these requirements:

  • At least 3 years in business
  • Personal credit score of 600 or above
  • At least $3,000 in daily balances
  • At least $15,000 in monthly bank deposits

Another option to consider through Credibly is a merchant cash advance. With this financing, you’ll receive up to $400,000. The anticipated duration of Credibly’s MCAs are 3 to 18 months, and repayment is based upon your receivables. Factor rates for MCAs start at 1.15.

To qualify for this type of funding, you must:

  • Have a personal credit score of 500 or above
  • Be in business for at least 6 months
  • Have at least $15,000 in monthly bank deposits

Fundbox

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  • No time in business requirements, but must have used a compatible accounting or invoicing software for at least 2 months, or a compatible business bank account for at least 3 months.
  • Business revenue: $50,000 per year
  • No specific personal credit score requirement
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Wouldn’t it be a relief to have a source of funding available to you on-demand? If an emergency pops up, you’d have the funds to cover it. If you needed extra inventory or money to pay for operating expenses, you wouldn’t have to wait days (or weeks) for loan approval. If your Buckeye business would benefit from this type of funding, a line of credit from Fundbox may be just what you need.

Fundbox offers revolving lines of credit up to $100,000 for qualified businesses. You can make one or multiple draws on your line of credit up to your set limit. As you repay borrowed funds, they become available to draw again. You can select from 12- or 24-week terms, and fees start at just 4.66% of the draw amount. Weekly payments are automatically deducted from your business bank account.

Qualifying is simple, as Fundbox considers your business performance when approving lines of credit. To receive yours, you must have:

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

Prosper

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  • Time in business: N/A
  • Business revenue: N/A
  • Personal credit score: 640
  • Credit history: 2 years
  • Personal debt-to-income ratio: Below 50%
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If you’re a new business with no (or very low) revenue, how are you going to qualify for a small business loan? Unfortunately, there will be many small business financing options unavailable to you if your business is brand new or hasn’t yet opened its doors. If this sounds familiar, you may have to get a little creative with your financing. One of the best options? A personal loan for business.

With a personal loan for business, your personal credit score and income can help you qualify for the funding you need. This is a great way to pay for startup costs or to cover any business expense when you don’t qualify for small business financing.

One lender to consider for personal loans is Prosper. You may qualify for up to $40,000 with APRs of 6.95% to 35.99%. You can select from terms of 3 years or 5 years.

To qualify for a Prosper personal loan, you must meet the following minimum eligibility requirements:

  • Source of income
  • Debt-to-income ratio below 50%
  • No bankruptcies within the last 12 months
  • Less than 5 credit inquiries within the last 6 months
  • At least 3 open trade accounts on your credit report

Amex Merchant Financing

American Express OptBlue

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  • Time in business: 24 months
  • Business revenue: $50,000 per year, at least $12,000 per year from debit and credit card sales
  • Personal credit score: Good to excellent
  • Other: Must accept Amex cards
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If your business accepts American Express, you may qualify for Amex Merchant Financing. You can receive a loan of $5,000 up to $2 million for one fixed fee of 1.75% to 20%. A fixed amount is deducted daily, or you can opt to have a percentage of your daily receivables deducted.

Repayment terms are spread over 6, 12, or 24 months and automatic payments are deducted daily from your account. If you repay your loan early, you could get up to 25% of your fixed fee back, helping you save on the cost of your loan.

To qualify, you must:

  • Accept American Express cards
  • Have at least $50,000 in annual revenue
  • Have at least $12,000 in annual debit and credit receivables
  • Have been in business for at least 2 years

Banks, Credit Unions, & Nonprofit Lenders In Ohio

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Online lenders are convenient, but maybe you prefer working with more traditional lenders. Banks, credit unions, and nonprofit lenders throughout Ohio provide loans and other financial products at competitive rates. You can also sign up for other business services, such as checking and savings accounts, payroll services, or employee benefits.

Huntington Bank

Huntington Bank has branches located in hundreds of cities in Ohio, including Akron, Canton, Cincinnati, Cleveland, and Columbus. Small business owners can open a checking and savings account through this bank. If you need extra capital to start or grow your business, Huntington Bank offers multiple financial products tailored to small businesses including:

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

Huntington Bank is a particularly good choice for SBA loans, as it has been ranked the top SBA lender in the region for the last 10 years.

Rates, terms, and borrower requirements vary by product. If you’re interested in getting financing through Huntington Bank, call their toll-free number or visit a branch near you to learn more.

Wright-Patt Credit Union

If you prefer more personalized service when seeking your small business financing, consider joining a credit union. In Ohio, Wright-Patt Credit Union is one of the largest with over 30 locations throughout the state.

As a member of Wright-Patt Credit Union, you’ll be able to handle all of your finances in one place. In addition to traditional financial products including business checking, savings, and money market accounts, members can also apply to receive financing through:

  • Commercial Real Estate Loans: Terms up to 25 years
  • SBA Loans: 7(a), Express, and 504
  • Commercial Auto Loans: Terms up to 84 months
  • Term Loans: Terms up to 10 years
  • Business Credit Cards
  • Lines Of Credit

Rates, terms, and borrower requirements vary by financial product. Some financing options, including auto loans and business credit cards, have online applications available to Wright-Patt members.

To become a member, you must meet one of the following requirements:

  • Live, work, attend school, or worship in one of the Ohio counties serviced by the credit union
  • Be a military or civilian employee of Wright-Patterson Air Force Base
  • Live in the Fairborn area with no access to other credit unions
  • Be a student, faculty member, staff member, or alumnus of Wright State University
  • Have a family member that is a Wright-Patt member
  • Be in a group affiliated with Wright-Patt Credit Union

Finance Fund Capital Corporation

Finance Fund Capital Corporation (FCAP) is a nonprofit community development financial institution. Through FCAP, eligible Ohioans can apply for funding through the Small Business Loan Fund. Loans are available in amounts from $100,000 to $1 million. Funds can be used for the following business purposes:

  • Working Capital
  • Real Estate Acquisitions
  • Construction
  • Leasehold Improvements
  • Equipment

Loans come with terms up to 7 years. However, there are longer options for commercial real estate and fixed asset purchases. Rates are based on the creditworthiness of the borrower and the risk of the project being funded.

To qualify, a business must:

  • Be a for-profit sole proprietorship, partnership, or corporation
  • Provide vital services to the area
  • Operate in an underserved market
  • Have a viable business idea

Loans are also given through the SBA Community Advantage program. To learn more and to apply for the Small Business Loan Fund, call or email Finance Fund Capital Corporation.

Small Business Grants In Ohio

If your business needs capital, turning to a lender isn’t your only financing option. Your business may qualify for a small business grant. The best thing about small business grants is that funds don’t have to be repaid, so there’s no worrying about monthly payments, high interest rates, or fees.

On the flip side, scoring a small business grant isn’t just as simple as filling out an application, having a credit check performed, and getting the funds you requested. Small business grants are extremely competitive. You must also meet very specific requirements — such as operating in a certain industry, having a veteran-owned business, or being a woman business owner — for most grants.

In the state of Ohio, there are several grant programs to consider. Start with these options.

JobsOhio

JobsOhio is a nonprofit corporation that aims to create jobs and promote economic development in Ohio by attracting, retaining, and expanding businesses. Through JobsOhio, small business owners have access to grant and loan programs including:

  • Economic Development Grant: Focuses on fixed asset and infrastructure investment of companies, including site development, machinery and equipment, land, and buildings.
  • Revitalization Program: Provides funds for businesses, nonprofits, and governments for costs related to redevelopment projects, including demolition, building renovation, and site preparation.
  • Workforce Grant: Provides funding for company training costs including information technology, leadership skills, technical training, and on-the-job training.
  • Growth Loan Fund: While not a grant, the Growth Loan Fund provides low-cost loans for established businesses that have limited access to traditional funding sources. Loan funds can be used to purchase fixed assets including land, buildings, machinery, and equipment.

Ohio Development Services Agency

The Ohio Development Services Agency has multiple programs that are designed to help Ohio businesses grow and create jobs. These programs include small business grants, low-cost loans, tax credits, and bonds.

Programs available through the Ohio Development Services Agency include:

  • Alternative Fuel Transportation Program: Provides financial assistance to businesses that purchase and install alternative fuel facilities and terminals.
  • Energy Loan Fund: Provides low-cost financing to businesses and manufacturers for improvements that reduce fossil fuel emissions and energy usage.
  • Ohio Minority Business Direct Loan Program: Provides low-interest loans to minority-owned businesses

City Of Cleveland Green Technology Business Grant Program

New green technology businesses located or relocating to Cleveland, Ohio, may qualify for the Green Technology Business Grant Program. To qualify, a business must create at least five new jobs within its first year.

The grant provides up to 1% of new payroll for up to 3 years. An additional $5,000 is also available as a Moving Assistance Grant. Interested small business owners can apply online through the City of Cleveland Economic Development.

Loans & Resources For Startups In Ohio

Startup businesses may find it a challenge to get the capital and resources they need to grow. Fortunately, the state of Ohio offers multiple resources to help new businesses and startups succeed.

Minority Business Assistance Centers

The Ohio Development Services Agency offers assistance to minority-owned businesses through its Minority Business Assistance Centers. Through these centers, minority-owned and disadvantaged small businesses can receive services including accounting assistance, business management counseling, marketing plan development, and help identifying local resources.

SCORE

SCORE is one of the nation’s best resources for startup and small business owners. Through SCORE, you can receive free business counseling with an expert mentor. You can meet face-to-face with your mentor or you can receive counseling online.

SCORE also offers free and low-cost business training, workshops, and other resources such as business templates and guides.

SCORE chapters are located throughout the state of Ohio in cities including Mansfield, Columbus, Toledo, and Newark.

Ohio Small Business Development Centers

Whether you’re launching your business or taking your existing business to the next level, the Ohio Small Business Development Centers have resources for you. You can work with a Certified Business Advisor to get your business on the right track.

Services available through SBDC include business planning, one-on-one counseling, finding sources of capital, workshops, and training programs.

Offices are located throughout Ohio in cities including Akron, Cincinnati, Cleveland, and Columbus.

What To Consider When Choosing A Lender

Now that you know just a few of the options available to you, narrowing down your choices to just one lender can be tricky. However, there are a few factors to keep in mind to help you choose the right lender for your business.

Type Of Financing

What type of financing are you seeking? If you want a flexible line of credit, you can cross off any lenders that offer long-term loan options. Interested in SBA loans? Then don’t give short-term lenders a second glance. Determine what type of financing works best for your business, then select a lender that provides this type of funding.

Borrowing Amount

If you need $500,000 to purchase commercial real estate, a $10,000 loan isn’t going to get you very far. Consider the borrowing limits of each lender, then choose the lender that is able to provide the capital your business needs.

Affordability

When you receiving financing, you have to consider the overall cost of borrowing. Calculate the fees, interest, and other costs associated with each lender you’re considering. Working with one lender may be faster and easier, but the costs may be much higher … and could be too much of a burden for your business. Consider your options, don’t feel obligated to take the first offer, and know how much your business can afford. Remember, you want to grow your business, not slide into a cycle of debt.

Borrower Requirements

Do you meet all of the requirements of the lender? Lenders consider factors such as personal credit score, business credit score, past credit history, time in business, and annual revenue. If you don’t meet these requirements, you won’t get approved, so why waste your time? Grab your free credit score, read up on borrower requirements, and submit your application only when you know you meet all requirements. Also, please remember that meeting the minimum requirements of a lender is not a guarantee of approval.

Final Thoughts

Starting and operating a business is tough for even the most experienced entrepreneur. Luckily, you don’t have to go it alone. As a business owner in Ohio, there are multiple lending options and other resources available to you to keep your business on the path to success.

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How Much Does Business Insurance Cost?

How Much Does Business Insurance Cost?

Somewhere in that endless list of things-to-do and boxes to check, a small business owner needs to think about business insurance.

It might be easier to convince yourself that you’ll figure out insurance later or that maybe you won’t need it, but all businesses have risks and make mistakes. Business insurance should be a priority.

A quick search for business insurance on the internet might, however, create more questions than answers. What kind of insurance do you need, anyway? What is a reasonable amount to pay for coverage, and what is the average business similar to yours paying? Can you save money by buying different kinds of coverage from the same company?

It’s normal to feel overwhelmed about how much things will cost, but since business insurance is a must (and possibly even a legal requirement) for your small business, we will breakdown how much you can expect to spend to protect the business you love.

How Much Does Business Insurance Cost?

“So, how much will all this cost me?”

There is no pat answer that tells business owners how much they might spend to fully cover their business. The factors and choices can seem endless. Are you buying a business owner’s policy or opting only for worker’s compensation? Do you have a risky endeavor that might need a high ceiling on your general liability and professional liability? Would adding umbrella insurance help you sleep at night? What do you actually need and what is simply a scare-tactic up-sale from an industry that peddles you worst-case-scenarios?

In general, a larger business with more options for risk will end up paying more than a sole proprietor, but that doesn’t mean that insuring your business has to break your budget, either.

Average Cost of Business Insurance

merchant cash advance industry

According to Insureon, an insurance provider that specializes in commercial businesses, the average cost for business insurance among their customers in 2017 was $1,281 per year and the median cost was $584. (In this case, nearly 60% of the businesses inventoried only had one employee: the owner!)

However, with a plethora of individual factors involved, the pricing scale differs widely between businesses, their needs, their risks, and how much they will cost to insure. An automotive insurance adjuster takes everything about a driver and his/her car into account before calculating the cost to the insurance company, and business insurance operates the same way. If you’re a reckless driver with some tickets under your belt, that price tag for insurance is going to increase. If you’re running a risky business (resisting…Tom….Cruise…joke), expect the same.

A sole proprietor looking for a single general liability policy with a million dollars in coverage might only pay as little as $30 a month.

How Business Insurance Costs Are Calculated

If we take the time to peek behind the curtain and examine how costs are calculated, it can demystify the process and give business owners an idea of what to expect before they get a quote from their insurance company.

First, think about your small business and your industry’s potential risks and liabilities. How much risk is involved with all the facets of your business? Riskier, larger, and more profitable companies will require more comprehensive protection and will therefore pay more.

Your own insurance calculations will be completed by an actuary from an insurance company who will explore your space, your product, your financial numbers, and assess your own particular risk and loss. (Are you a paper company located within a high forest fire hazard zone? A glass company on an earthquake fault line? A pool builder in the middle of a drought? Okay, okay, you get the idea.)

After the actuary looks at the risk and loss, the size and revenue from your company will factor into the ultimate decision. When you ask for a quote, you will need to provide the actuary an ample amount of data with all your business numbers (square footage of space, payroll details, etc.), so arrive prepared.

Business Insurance Cost Factors

When the actuary (someone whose sole job is to manage risk and assess risk) arrives from the insurance company to sit down and plug all your risks, losses, and opportunities for income into the calculator, many factors can ultimately impact that final number. Knowing which factors might affect cost could help you plan ahead.

  • Your Business Size: What is the physical square footage of your business? What kind of space does it require? The larger the space, the larger the quote.
  • Location, Location, Location: Location is a key factor for multiple reasons. First, where you are located will affect your premiums because some states are more accommodating than others. Are you located in a state that is considered small business friendly or lawsuit friendly? Location also factors into other business risks like flooding, crime, and foot traffic. (More water, more thieves, more people in your storefront? More money.)
  • Business Sales Reports: How much money do you make? It’s pretty simple. The more money you make, the more insurance you’ll need. An actuary will look at your numbers and see how much you — or they — might stand to lose.
  • Your Business Industry: Offices require less capital to insure than, say, a traveling circus. Some industries are built with inherently more risk than others, and the insurance company will examine all the ins and outs of how your business operates to know the best ways to protect you.
  • Number Of Employees: More employees, more insurance. (Are we sensing a theme?)
  • Claim History: As with any insurer, the actuary will also look at your past business history and see if you have made any claims in the past.
  • Types Of Policies: The bigger your business, the bigger the policy. If you don’t have any employees and can stick with general liability, you will pay pennies next to a business that is working to protect employee incomes.

Ways To Save On Business Insurance

So, you want to protect your business but you don’t want to spend more than you need to? Maybe you can’t change where your business is located or your claim history, but here some tips on how to save on business insurance:

1. Bundle Policies

Bundling your insurance policies will often save you money. Consider a business owner’s policy which combines both general liability and commercial property insurance.

2. Shop Around

Insurance companies are in the business of sales and that lowest quote may not always be the best deal in the long run if the company can’t follow-through when you submit a claim. Your business is important enough to do the research. Five independent agencies (including Standard, Poor, and AM Best) rate the financial strength of an insurance company and you can use their services for free if you sign up for an account.

3. Choose A Higher Deductible

A deductible is the amount of money you will pay before your insurance kicks in. Choose a higher deductible and your premiums will go down.

4. Group Rates

Group rates might be available for your industry! If so, this route could save you the big bucks and possibly get you better coverage

5. Work With An Agent Who Specializes In Business

Go out and find an expert on small business insurance instead of settling for an agent who might not know the specifics of your industry.

6. Pay Your Premium In Full

It may be cheaper to pay your premiums for the year in one lump sum rather than spread them out in 12 monthly installments.

Where to Buy Business Insurance

According to Insureon, only 1 in 4 small businesses has adequate insurance and 80% of small businesses never recover after a disaster. Clearly, you need to protect your business, but where should you start?

All the major insurance companies carry commercial business insurance packages. So, places like Allstate, Farmers, Nationwide, and Chubb all offer competitive rates. Some companies, like Hartford and Hiscox, which specialize in small business insurance, have online quotes that walk a business owner through the process of optimizing their rate.

Again, it’s smart to check with the Better Business Bureau or your state’s department of insurance to examine the viability and strength of your insurer. Use the rating agencies and talk with business owners in your area. Ask around and shop around: this is your business baby and should the worst-case-scenario befall your company, you don’t want to end up in the 80% of businesses who have to close their doors after a disaster.

Comparing Business Insurance Quotes

Pre-internet days, a business owner might need to make an appointment with several insurance retailers and sit through long sales pitches before receiving a quote. Now, it’s easy to get an online quote from an insurance company in minutes over the internet. That isn’t to say that scheduling a face-to-face meeting with your top three insurers is a bad idea. Once you’ve narrowed down choices, talking to a real human being could help you make a final decision on what insurance company you trust the most.

Not all business insurance plans are created equally, so here are some things to consider as you compare:

  • Don’t just fixate on the premium number, but also look at the rate. As your company grows, the rate may increase as well and price you out of your own policy.
  • Cheaper isn’t always better. Carefully weigh the cost with the level of coverage you need and don’t skimp on the coverage you need just to pay less.
  • No insurance plan covers everything, so discuss and address exclusions to the policy to make sure there are no surprises.

Several websites also can do the initial aggregate work for you and compare all the major retail policies in one place. Check Bizinsure, Coverhound, and Insureon and have your company numbers ready to go (number of employees, sales data, business address, and square footage). You can grab comparison quotes from these websites in a matter of minutes.

After you’ve carefully researched and compared all of your options, pick the best one suited for your business. Consult an insurance professional for advice. Once you’ve found the right business insurance you can rest easy knowing that you got your business the coverage it needs — and without breaking the bank.

The post How Much Does Business Insurance Cost? appeared first on Merchant Maverick.

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How to Start And Fund An Online Boutique

For many aspiring entrepreneurs, opening a boutique seems like a dream. After all, how many people can say they’re making the world a little more stylish all while bringing in an income? In the past, boutique owners faced lots of challenges, such as finding retail space and acquiring necessary business licenses, but the internet has made opening a boutique easier than ever.

Of course, it still takes hard work and a little know-how to successfully set up, fund, and operate an online boutique. Whether you’ve delved into the world of online business before or you’re new to entrepreneurship, this post is for you. We’ll break down the critical steps to setting up an online boutique, explore how to secure funding for your new business, and give other tips for running your online store. Let’s dive in!

Decide What To Sell

In order for your online boutique to be a success, you have to make sales. Obviously. However, before you can start bringing in money, you need to first decide exactly what your boutique will sell. In other words, you need to find your niche.

It may be tempting to go overboard and carry a little something for everyone. However, especially in the early stages of starting an online boutique, it’s wise to start small and hone in on one particular area. If your focus is on designer clothes, plan to carry only women’s clothing or only children’s clothing. Or maybe you want your boutique to feature custom jewelry and accessories. In that case, don’t muddy the waters with random sweaters and leggings.

Once you’ve got a broad overview of the customers you want to attract, it’s time to narrow down your niche further. For instance, do you want to carry affordable yet trendy styles for the 13-18 crowd, or would you rather sell high-end, classic pieces for professional women? Remember, you want to start small. If your boutique becomes a success and you see a demand for other products, add them. For now, though, take the time to find out what’s a hit … and what’s a miss.

Deciding what to sell will not only help you determine what inventory to keep on hand and what products to promote, but it will also help you determine your branding strategy, from the colors you use on your website to the design of your logo.

Create A Business Plan

Whether you operate a traditional retail store or an online boutique, there’s one thing all businesses need: a good business plan. Think of a business plan as a map of your business, outlining your goals and the steps you’ll take to reach those goals. A solid business plan is critical for new businesses seeking financing from investors or traditional lenders like banks and credit unions.

Your business plan should include information such as:

  • Executive Summary
  • Company Description
  • Market Overview
  • Sales & Marketing Strategy
  • Operating Plan
  • Organization & Management Team
  • Financials

Source Inventory

With your niche selected and your business plan in place, you’re getting closer to opening your boutique. However, before you launch your website and begin to make sales, you have to find and purchase inventory that will be used to stock your online store.

There are a few ways to source inventory. One of the most common ways to source your inventory is by using a wholesaler. Through a wholesaler, you can purchase items in bulk at a reduced rate. Typically, the more you purchase, the more you save. Wholesale suppliers can easily be found in the U.S. and overseas with a quick online search.

Keeping your niche in mind, search online and create a list of possible wholesalers to use for your business. Keep an eye on available items, pricing, minimum order requirements, and shipping costs to determine which wholesaler will be the best partner for your business.

One of the biggest benefits of purchasing from a wholesaler is that you will have more control over shipping your products to customers. You’ll be able to control how products are shipped, as well as the packaging that your customers receive. This offers a better opportunity for branding your business.

However, purchasing your inventory through a wholesaler also has its drawbacks. This option may be more expensive based on minimum purchasing requirements. Packaging and shipping your own items could add on to your expenses. You may also incur additional overhead costs for the storage of your inventory.

If you don’t want to work with a wholesaler, dropshipping is another option to consider for your boutique. With dropshipping, a third-party supplier fulfills the orders of your customers. Your customer places an order, the order is manually or automatically sent to your supplier, and the supplier is responsible for packing and shipping the order to your customer.

There are a few drawbacks associated with dropshipping. The supplier or manufacturer handles packaging and shipping, so you won’t be able to personalize the packaging and branding of your shipped orders. You may also encounter some issues with inventory. If you house your own inventory, you’ll be able to better account for what’s in stock. A miscommunication with your dropshipping supplier could result in canceled orders or backorders, which could lead to unsatisfied customers.

Also, you have to consider that if something goes wrong, you are ultimately the face of your brand and you will be liable. If the wrong item is sent or there’s another issue with an order, this reflects poorly on you, even if it’s the supplier’s fault.

No matter what route you take, it’s important to properly vet any supplier you’re using for your boutique. Request samples to check out the quality of products, find out if you’ll have a dedicated contact to reach when there is a problem, and work with reputable businesses with a history of success in their industry.

Register Your Business

Before you start peddling boutique items, you’ll need to register your business. For an online boutique, the process isn’t too difficult.

Choose Your Business Structure

When you start your business, you’ll need to select your business structure. For an online boutique, your best options are to operate as a sole proprietorship or limited liability company (LLC). An individual can operate as a sole proprietorship without having to file paperwork. However, it’s often wise to take a few extra steps to set up an LLC, which will protect you in most cases from being held liable for your business’ debt. You may also opt to operate as a corporation, which may be a good idea if you plan to bring on outside investors.

File State Paperwork

To form an LLC or corporation, you’ll file paperwork with the state. For most business owners, this will be the state where you live and the business is formed. You’ll not only file documents within this state but also pay a filing fee, which varies by state.

Take Care Of Finances

Before you start making money, you have to obtain a federal tax ID number from the Internal Revenue Service. If you’re a sole proprietor or single-member LLC, you can use your Social Security Number.

If you don’t have one already, you also need to open a business bank account to keep your business finances separate from your personal finances.

Meet Sales Tax & Licensing Requirements

As an online seller, you’ll have to collect and pay sales tax for transactions that occur within your state. You can learn more about the requirements in your area by calling your state tax department.

You should also consult with city or county authorities to find out about business license requirements in your area.

Choose An eCommerce Platform

To boost your odds of running a successful online boutique, it’s important to choose the right ecommerce platform. Your shopping cart software serves as a storefront for your customers while also providing you with the backend tools you need to keep your business operating smoothly.

Most entrepreneurs opt for a Software as a Service, or SaaS, platform. The benefits of a SaaS platform is that you don’t have to download, host, or install anything on your own server. Instead, you pay a monthly subscription fee that covers hosting and software updates.

There are multiple platforms to choose from, and you can narrow down your choices by considering what factors are most important to you, such as pricing, add-ons and features, ease of use, and design options.

Unsure of which ecommerce platform is right for you? Take a look at our picks for the best ecommerce platforms for your small business.

Shopify BigCommerce 3dcart Ecwid Wix

3dcart

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Monthly Cost

$9 – $299

$29.95 – $249.95

$19 – $229

Free – $99

$25 – $40

Core Features

Great

Excellent

Excellent

Good

Good

App Store

Very Large

Large

Moderate

Moderate

Small/Moderate

Ease Of Use

Very Easy

Easy

Moderate

Very Easy

Easy

Web Design

Great

Good

Good

OK

Excellent

Customer Support

Great

Great

Good

Good

Good

Build Your Website

What do you think when you walk into a brick-and-mortar store that’s cluttered and disorganized? Does it make you want to spend hours shopping there, or do you immediately run for the door? The same principle applies to your online boutique. No customer wants to browse a website that’s a complete mess.

The good news is you don’t have to be an experienced web designer to get a professional-looking website. There are plenty of great website builders available online.  You can even set up your store in just minutes with your ecommerce software.

Platforms like Shopify have tools that make it easy for anyone to build their online store, even if they have no design experience. With SaaS platforms, you can take advantage of features including drag-and-drop interfaces, mobile optimization, color and font customization, and your choice of store theme.

When building your website, keep in mind your branding and your audience. You want your website to reflect the type of items you sell in your boutique. If you cater to the professional male, a pink floral theme will completely miss the mark.

You want to make sure your website is user-friendly. Categorize your products so they’re easy to find. Add in high-quality photos of your products and detailed descriptions. In a brick-and-mortar store, customers are able to touch, try on, and inspect items before they purchase. With online shopping, customers have to rely on photos and descriptions to ensure they’re making the right purchase. Make sure your customers know exactly what they’re purchasing to keep customer satisfaction high.

Another important step in creating your website is selecting the right domain name. There are a few key points to remember here. First, you want to make sure your company name is front and center. You also want to keep your domain name as short as possible. Avoid adding numbers and hyphens. Keep it simple to make it easier for customers to find you.

When setting up your website, you’ll also need to determine how you’ll ship your orders. Will you offer only domestic shipping, or will you ship internationally? Do you plan to offer a flat rate, or will you charge by weight? Will customers be able to choose from several shipping options (such as next day), or will you offer just one option?

You also need to set up your payment processor. This allows your customers to pay for the products in their shopping carts. Many ecommerce platforms come equipped with tools for shipping and payments, including shipping calculators, built-in payment processors, and dropship integration.

Finally, make sure that your contact info is prominently featured on your website. If your customers have questions about your products or have a problem with an order, they need a way to get in touch with your business. Include your business phone number, email address, and links to your online boutique’s social media websites. You may even consider adding additional features such as a live chat option as your business grows.

Before you go live with your boutique website, test it out. Make sure all links are working and there are no broken images. Hire a proofreader (or take on the job yourself) to make sure there are no typos in your copy or product descriptions. Take the time to make sure your website looks professional and is easy to navigate. Now, it’s time to go live and unveil your boutique to the world!

Secure Funding

Starting an online boutique is more cost-effective than opening a brick-and-mortar store, but it doesn’t come without its costs. Sure, you don’t have to lease commercial space or purchase a point-of-sale system, but your business will have startup and operational costs.

Unfortunately, as a new online business, you’re going to run into some obstacles when it comes to loans and other financial products. Traditional financing routes like bank loans will be unavailable to you because of time in business and annual revenue requirements. This doesn’t mean you’re stuck funding everything out-of-pocket, though. Read on to learn more about the funding options for your online business.

Personal Savings

While you don’t have to pay for your startup costs out-of-pocket, you certainly can by tapping your personal savings. By going this route, you don’t have to worry about paying interest to a lender or being stuck on a repayment schedule. You also don’t risk going into default if you don’t pay back the loan. Using your personal savings isn’t without its risks, though. If your business fails, you’ve lost your savings.

Friends & Family

Pitch your online boutique to a friend or family member with money to invest in a new business. Just because you know this person, however, doesn’t mean that you should just casually ask for money. Instead, prepare your pitch and have your business plan ready. If you decide to move forward with a loan, make sure to have a contract with all details in writing. All parties need to agree to all terms of the contract before signing.

What stands out about this option is that you are able to work out the borrowing amount and repayment terms that work best for you. And, of course, it goes without saying that you treat your friend or family member as you would any other lender by following the terms of the contract and repaying your loan.

ROBS

If you don’t want to go the traditional loan route and want to bypass paying interest or making monthly payments, consider a Rollover for Business Startups plan, also known as a ROBS. If you have a qualifying retirement account, you could leverage these funds to finance your startup expenses.

Taking out your retirement savings early could result in financial penalties, but a ROBS offers a way to avoid paying these penalties. A ROBS can help you get the funding you need in just four easy steps:

  • Create a new C-corporation
  • Create a qualified retirement plan
  • Roll over the retirement funds into the new C-corp plan
  • Access your funds by purchasing stock in the corporation

Using a ROBS to fund your business is legal if done correctly. This is why business owners who choose this type of financing hire a ROBS provider to ensure everything is done by the book. With a ROBS provider, you typically have to pay a setup fee, as well as a monthly maintenance fee.

Be aware: You won’t have to repay a lender or worry about interest charges, but if your business is unsuccessful, you do risk losing your retirement savings. Think carefully before moving forward with this option.

Recommended Option: Benetrends

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  • Varies based on the type of financing you seek.
  • Must have a personal credit score of 660 or above.
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Benetrends is a ROBS pioneer, launching its innovative Rainmaker Plan in 1983. With this plan, you can cash in on your retirement plan to get the funding you need for your online boutique.

To qualify for a ROBS Rainmaker plan, you must have an eligible retirement account with at least $50,000. Most accounts qualify. However, Roth IRAs, 457 plans for non-governmental agencies, and distribution of death benefits from an IRA other than to the spouse do not qualify. There are no time in business, annual revenue, or credit score requirements.

Because this isn’t a loan, there are no interest rates or repayment terms. However, to set up a ROBS Rainmaker plan, a setup fee of $4,995 is required. You’ll also pay a monthly maintenance fee of $130, which covers audit protection, compliance, and other features.

Personal Loans

If you have at least a fair credit score, you may qualify for a personal loan that can be used to cover business expenses. Because this is a personal loan — not a business loan — you won’t have to worry about your business credit score, time in business, and annual revenue requirements. Instead, approval will be based on your personal income, credit score, and credit history.

Recommended Option: Lending Club Personal Loans

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  • Time in business: N/A
  • Business revenue: N/A
  • Personal credit score: 600
  • Credit history: 3 years
Borrower requirements for personal loans (click to expand)
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Through Lending Club, you can borrow $1,000 to $40,000 with repayment terms of 3 or 5 years. Interest rates start at 5.32% and go up to 30.99% based on your personal credit profile. An origination fee of 1% to 6% of the total borrowing amount is deducted from your loan. No collateral is required to receive a Lending Club personal loan.

To qualify for a Lending Club personal loan, you must:

  • Be at least 18 years old
  • Have a solid debt-to-income ratio
  • Have a credit history of at least 3 years
  • Have a credit score of 600 or above

You can receive funds as quickly as 3 days after applying. However, there may be delays if additional documentation or information is required during the application process.

Lines Of Credit

As you get your online boutique off the ground, you’ll encounter recurring expenses — think web hosting, SaaS subscriptions, and inventory. While your incoming cash flow should cover these expenses, it’s not uncommon to come up a little short. When this happens, having a flexible line of credit in place will give you a financial boost when you need it.

How does a line of credit work? It’s simple. A lender provides you with a set credit limit, similar to a credit card. When you need additional cash, you can make draws from this credit limit. When you initiate a draw, the money is deducted from your available funds and transferred to your business bank account. With many lenders, you can receive funds as quickly as the next business day. You’ll repay the loan each week or month, along with interest and/or fees. As you repay the loan, funds will become available to use again.

A line of credit is a good thing to have because you can initiate draws as needed. If an emergency expense pops up or you have a sudden influx of orders that deplete your inventory, you’ll have on-demand access to the cash you need for your business.

Recommended Option: Fundbox

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  • No time in business requirements, but must have used a compatible accounting or invoicing software for at least 2 months, or a compatible business bank account for at least 3 months.
  • Business revenue: $50,000 per year
  • No specific personal credit score requirement
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Through Fundbox, you can receive a line of credit up to $100,000. Repayment terms are 12 weeks or 24 weeks. Fees start at 4.66% of the draw amount. You only pay for the funds that you use, and remaining fees are waived when you pay your balance off early.

It’s easy to qualify for a Fundbox line of credit. All you need to be approved is:

  • A business checking account
  • Business bank statements from the last 3 months
  • At least $50,000 in annual revenue

You can be approved just minutes after filling out Funbox’s application, and you can initiate draws immediately once approved.

Purchase Financing

If you need extra time to pay your vendors, consider applying for purchase financing. With purchase financing, you can get the money you need to purchase inventory, equipment, or other business necessities immediately while breaking the total amount into smaller, flexible payments.

With this type of financing, the lender sends a payment directly to your vendor. You’ll then repay the lender the balance — plus any fees and/or interest — on a weekly or monthly repayment schedule. You won’t have to pay the total amount upfront, and paying over a longer period of time may be more financially feasible for your new business.

Recommended Option: Behalf

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  • No specific time in business, revenue, or credit score requirements.
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Through Behalf, you can pay your eligible vendors between $300 and $50,000. You will have up to 6 months to repay your loan, and you can make payments on a weekly or monthly basis. Monthly fees start at 1% and are based on your creditworthiness. There are no hidden fees, no maintenance fees, and no costs to apply.

To qualify for financing through Behalf, there are no time in business or annual revenue requirements. Although the lender does not have minimum personal credit score requirements, credit history is taken into account and a hard pull will be performed to determine your eligibility.

Vendor Financing

If you make sales on a platform like Shopify or PayPal, you may qualify for vendor financing. With vendor financing, the performance of your business is the most important qualifying factor. Often, there are very low or no personal credit score requirements, so this may be a good option if you don’t have a solid credit history.

With vendor financing, you’ll receive a lump sum of money based on the performance of your business. In exchange for receiving the loan right away, you’ll agree to give the lender a portion of your future sales until the loan plus fees and/or interest is repaid.

The only drawback to this option is that you must be making sales in order to qualify. If you need financing for startup costs and haven’t yet made any sales, you’ll need to explore one of the other options discussed in this article.

PayPal Working Capital

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  • Time in business: 3 months
  • Business revenue: Minimum $15,000 per year if you have a PayPal Business account, or $20,000 per year if you have a PayPal Premier account
  • Personal credit score: N/A
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If you accept PayPal payments, you may qualify for PayPal Working Capital. Through PayPal Working Capital, you can receive a loan of up to 35% of your annual PayPal sales. Repayments are based on a percentage of your future sales. Repayments are made daily when you have sales. If you don’t have sales, a payment will not be made.

However, you must pay a minimum of 5% or 10% of your loan amount every 90 days to remain in good standing.
You’ll pay just one fixed fee for receiving your loan. Your fee is determined by:

  • Amount of your loan
  • Repayment percentage
  • PayPal sales history of your business

PayPal Working Capital does not perform a credit check, and you can pay your loan off early with no prepayment penalties. You must be a PayPal seller to qualify for this loan program.

Recommended Option: Shopify Capital

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

  • Be located in the United States
  • Have Shopify Payments enabled
  • Have a profile that is considered low-risk
  • Process a certain amount of gross merchandise volume (GMV)
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Shopify users may qualify for the Shopify Capital program. Through Shopify Capital, you can receive a merchant cash advance (MCA).

Shopify Capital is available by invitation only to qualified Shopify users. Once you receive an invitation, you’ll be able to view your funding options. You can receive up to $500,000 through this loan program based on the performance of your business. Once you select the amount you’d like to borrow, you’ll receive the loan, which is repaid through a fixed percentage of your daily sales until the loan plus fees are repaid.

There are no minimum credit score, annual revenue, or time in business requirements, but you must receive an offer from Shopify in order to apply.

Business & Personal Credit Cards

A business credit card is a flexible financing option if you want access to financing without having to wait for a lender’s approval. Once you’re approved, you’ll receive a credit card with a set credit limit. You can then use your credit card anywhere it’s accepted to purchase inventory, software, or pay for other business expenses.

Once you’ve used your credit card, you’ll repay the borrowed portion of the funds, plus interest, on a monthly basis. As you pay down your balance, it will once again become available to use again. Some credit cards come with 0% introductory rates, bonus offers for new cardholders, and rewards programs, which can provide you with cash and other benefits just for using your card.

When applying for a business credit card, you’ll need to include information about your online boutique, including your business name, federal tax ID number, and annual revenue. If you’re just getting started or don’t yet have your business set up, you can apply for a personal credit card. With a personal credit card, you’ll sign up under your name using your own income — no business name or annual revenue required.

Recommended Option: Chase Ink Business Cash

Chase Ink Business Cash


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Annual Fee:

$0

 

Purchase APR:

15.49% – 21.49%, Variable

Required credit: Good, excellent

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

Purchase intro APR: 0% for the first 12 months

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

Foreign transaction fee: 3%

Rewards:

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

Notable Perks & Benefits: 

  • Employee cards at no additional cost
  • Travel and purchase coverage
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If you have excellent credit, Chase Ink Business Cash is a card you should consider. With Chase Ink Business Cash, you’ll receive 5% cash back for the first $25,000 spent on internet, cable, and phone services and office supply purchases each year. You’ll receive 2% cash back for the first $25,000 spent at gas stations and restaurants each year. You’ll also receive 1% cash back on all other purchases.

Chase Ink Business Cash has no annual fee and an introductory APR of 0% for the first 12 months. After the introductory period, the card has a variable APR of 15.24% to 21.24%.

Final Thoughts

With careful planning, strategic financing, and a little hard work, you can start and operate your own online boutique. Take the time to learn about local regulations, build your brand and website, and curate a collection of high-quality products, and you’ll soon be on the road to becoming a successful entrepreneur.

If you want to learn more about starting an online store, download our free ebook, The Beginner’s Guide to Starting an Online Store. Then, when you’re ready to scale your business, take some helpful tips from The Advanced Guide to Growing Your Online Store.

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SmartBiz VS National Business Capital

Smartbiz vs National Business Capital

SmartBiz National Business Capital

$30,000 – $5,000,000

Borrowing Amount

$10,000 – $5,000,000

Up to 25 years

Term Length

Up to 25 years

Up to 4%

Borrowing Fee

Unknown

While it’s nice to have choices, sometimes it can be difficult to narrow your search down to a single, best option. It’s no different when you’re looking for business financing. SmartBiz and National Business Capital both promise to save time and headaches by allowing you to effectively apply to multiple lenders with a single application. Note that neither directly originates loans.

But while they’re both loan aggregator services, there are some notable differences between the two that may help you decide between them.

SmartBiz is heavily specialized toward SBA loans. If you aren’t familiar, the Small Business Administration has a number of programs wherein they’ll guarantee a portion of a business loan for qualified applicants. This can help you access better rates and terms than you may otherwise be able to get without the SBA guarantee. The tradeoff is a longer and more complex application, as well as a longer time to funding. SmartBiz helps you navigate through the red tape while also connecting you to SBA-approved lenders.

National Business Capital can also connect you with SBA loans, but they’re a bit less specialized, also offering unsecured small business loans, lines of credit, merchant cash advances, equipment financing, and startup business funding.

So in this battle of depth vs. breadth, which lender is the better middle man?

SmartBiz National Business Capital

2 years

Time In Business

6 months

N/A

Minimum Sales

$15K per month

650 (personal)
150 (business)

Minimum Credit Score

N/A

Qualifying

Winner: National Business Capital

To qualify for an SBA loan through SmartBiz, you’ll need to have been in business for two years, and have a personal credit score over 650 and a business credit score of 150. You must be a US citizen or legal permanent resident. You also can’t have defaulted on any government-backed loans, have any tax liens, or had a bankruptcy or foreclosure within the last three years.

Since they aren’t dealing exclusively with SBA loans, it’s a lot easier to qualify for National Business Capital’s loans. You’ll only need to have been in business for 6 months and take in at least $15,000 per month in revenue. There are no explicit credit requirements. Even if you don’t meet that benchmark, National Business Capital may still be able to work with you through one of their alternative programs. National Business Capital can work with businesses in all 50 states, Puerto Rico, Canada, and the U.K.

Overall, it’s a lot easier to meet the minimum qualifications of National Business Capital, but if you’re looking for an SBA loan you’ll have to meet guidelines similar to those of SmartBiz.

Fees

Winner: SmartBiz

Since we’re talking about third parties, you’re going to want to know what the convenience they offer will cost you.

SmartBiz charges two fees, beyond those charged by those normally associated with an SBA loan (0 – 3.75 percent guarantee fee and around a $450 fee from the lender): a one-time referral fee, and a one-time packaging fee. Each can cost up to 2 percent of the loan’s amount.

National Business Capital doesn’t divulge much information about their fees, and it’s difficult to get a straight answer from a rep when you ask about them.

Loan Terms

Winner: Tie

The SBA itself sets the acceptable terms for SBA loans, so you won’t find a ton of variation between lenders. Since SmartBiz deals exclusively in SBA loans, there’s not much to compare here. If you’re looking for a non-SBA loan or other financial product, National Business Capital can offer that.

Application Process

Winner: SmartBiz

Both SmartBiz and National Business Capital promise an easy, simplified application process, and both companies deliver. I’m giving SmartBiz the nod here for one reason: their screening process will let you know ahead of time whether or not you’re qualified for their service. This saves you the time of filling out an application only to be rejected down the road. Since National Business Capital is less specialized, they’re more likely to be able to help you, but in rare cases, customers may be well into the process before they discover that NBC can’t help them.

Time To Funding

Winner: National Business Capital

SBA loans can only be funded so quickly. If you need money immediately, SmartBiz won’t be able to do much for you. On the other hand, National Business Capital’s versatility allows them to offer faster products, often within the span of a couple days.

Transparency

Winner: SmartBiz

When it comes to online lenders–and let’s be honest, the financial sector in general–transparency is in short supply. Signing up for a loan is risky. Even submitting your basic information can lead to a future full of annoying cold calls. If possible, you’ll want to know what you’re getting into before you even make contact.

SmartBiz lays out most of what you need to know in a convenient FAQ on an easily searchable website.

National Business Capital, on the other hand, throws around lot of general information about financial products but comes up short on actual rates and fees. There are some calculators you can play with, but they’re not necessarily representative of the terms you’ll be offered.

Customer Service

Winner: SmartBiz

Customer service is usually one of the most divisive topics when it comes to alternative lenders. Satisfied customers will usually be very happy with the service they received, while angry customers will describe it in the most uncharitable terms.

While both companies seem to suffer from some communication issues, overall SmartBiz’s customers have fewer beefs with customer service.

Negative Reviews & Complaints

Winner: Tie

Both SmartBiz and National Business Capital receive generally positive reviews from customers and other review sites, usually within a point or two of each other. Complaints about both companies are typical for alternative lenders, including fees, rejections, and communication problems.

Complaints specific to SmartBiz include unhappiness with the amount of paperwork customers had to fill out. For National Business Capital, a common theme was aggressive marketing calls.

Positive Reviews & Testimonials

Winner: Tie

You’ll find no shortage of satisfied customers for both companies.

Fans of SmartBiz liked the personal touch offered by their representative, the relative speed (for SBA loans) of funding, and the company’s transparency.

Happy National Business Capital customers appreciated the wide variety of options offered, the customer service, and the quick turnaround time on their loans.

And The Overall Winner Is…

smartbiz logo

Specialization has its advantages. When it comes to a third party service for SBA loans, it’s hard to do better than SmartBiz. They take a long, complex process and make it a little less grueling for small businesses while offering a refreshing level of transparency.

Of course, if you’re looking for something other than SBA loans, National Business Capital can help you in ways SmartBiz simply can’t. This is especially relevant if time is a factor.

If you want a deeper look at SmartBiz or National Business Capital, check out our comprehensive reviews.

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  • Must be in business at least 2 years.
  • Must have a personal credit score of 650 or above.
  • Must have a business credit score of 150 or above.
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How To Secure A $10,000 Loan Online For Your Business

Even the most prepared business owners will face a financial shortage from time to time, whether it takes the form of a holiday uptick in your retail business, a slow season for your construction business, or unpaid invoices that have brought your incoming cash flow to a screeching halt. Unexpected or emergency expenses can arise out of nowhere in any industry, and they have the potential to have a devastating financial impact your business.

If your cash flow begins to suffer from seasonal slumps, late-paying customers, or emergency expenses, know that there are options available to you. Online small business loans and financing products can help you overcome any financial hurdle.

On the other hand, maybe things are going well for your business, and you just need a little boost to help expand your facility, hire new employees, and take your business to the next level. Online business loans can help with that, too.

If you need $10,000 for your business — for whatever reason–, you’re in luck. There are many loan products available to you, from traditional installment loans to short-term loans, invoice financing, or lines of credit. Best of all, you don’t have to have a perfect credit score or high annual revenues to qualify. With some online lenders, you can be approved in just minutes, and in some cases, you may even receive the financing you need within 24 hours.

Many online lenders can fund your loan or financial product without the delays or heavy paperwork requirements imposed by banks or traditional lenders. You’ll pay higher rates and fees for this convenience, but if you need cash fast, an online loan is the way to go. Depending on the lender you select, you may get approved and funded simply by supplying basic information about yourself and your business and a few recent bank statements.

Ready to secure a $10,000 online business loan? Read on for our top lender picks.

1. BlueVine

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For invoice factoring:

  • Time in business: 3 months
  • Business revenue: $100,000 per year
  • Business type: Business-to-business
  • Personal credit score: 530

For business lines of credit:

  • Time in business: 6 months
  • Business revenue: $120,000 per year
  • Personal credit score: 600
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One lender that makes it easy to get $10,000 for your business is BlueVine. With two different financing options, you can receive up to $5 million to cover your business expenses.

The first financial product offered through BlueVine is a revolving line of credit. You can receive between $5,000 and $250,000 with simple interest rates starting at just 4.8%. Through BlueVine, the application process is simple, and you can be approved for an unsecured line of credit in just minutes. You’ll be able to make draws from your account as needed up to the credit limit assigned by the lender. Repayments are made weekly or monthly over 6 or 12 months. Interest is only charged on the borrowed amount, and your funds will be replenished as you make your payments.

To qualify for a BlueVine line of credit, you must have:

  • A minimum personal credit score of 600
  • A time in business of at least 6 months
  • At least $100,000 in annual revenue.

The application requires you to supply information about yourself and your business, as well as business bank statements from the last 3 months.

If unpaid invoices are dragging your business down, BlueVine also offers invoice factoring. You can receive up to $5 million for your qualifying invoices with rates starting at just 0.25% per week. You’ll receive up to 90% of the total balance of your invoices upfront and the remainder once the invoices are paid, minus fees charged by the lender.

To qualify for BlueVine’s invoice factoring, you must:

  • Operate a B2B business
  • Have a personal credit score of at least 530
  • Have a time in business of at least 3 months
  • Earn at least $100,000 in annual revenue

2. Credibly

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  • Must be in business at least 6 months with a revenue of $15,000 per month.
  • Must have a personal credit score of 500 or above.
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Credibly offers three financing options for business owners seeking $10,000 in capital. If you need a loan to cover daily operating expenses, Credibly offers a working capital loan. With this product, you can apply for up to $250,000. Instead of interest rates, these loans come with a factor rate. The most qualified borrowers can receive factor rates as low as 1.15. Working capital loans are repaid daily or weekly over a period of 6 to 17 months. An origination fee of 2.5% of the loan amount is deducted from your loan.

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

  • A credit score of at least 500
  • A time in business of at least 6 months
  • An average of at least $15,000 per month in deposits to your business bank account.

If you need $10,000 to expand your business, consider a business expansion loan from Credibly. You can apply for up to $250,000 to be repaid weekly over 18 or 24 months. Interest rates for the most qualified borrowers start at 9.99%. An origination fee of 2.5% of the total loan amount will be deducted from your loan proceeds.

To qualify for a business expansion loan from Credibly, you must have:

  • A credit score of at least 600
  • A time in business of at least 3 years
  • Average monthly bank deposits of at least $15,000
  • An average daily balance of $3,000

If you don’t meet the revenue or credit score requirements of Credibly’s other financial products, consider applying for a merchant cash advance. With this type of financing, you sell a percentage of your future receivables. Credibly will take a set percentage of your sales each day until your loan plus any fees are repaid. Factor rates start at just 1.15 and repayment schedules are available up to 14 months. Through this type of financing, you can apply for up to $150,000. A one-time 2.5% origination fee is added to your loan balance, and Credibly also charges a $50 monthly admin fee.

To receive a merchant cash advance, you must have a credit score of at least 500 and at least $15,000 in average monthly bank deposits. Your business must also be in operations for at least 6 months to qualify. You can be approved for your loan in as quickly as 24 hours.

3. Fora Financial

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  • Time in business: 6 months
  • Business revenue: $5,000 monthly in debit and credit card sales (for a merchant cash advance) OR $12,000 monthly in gross sales (for a short-term loan)
  • Personal credit score: Unknown
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For quick working capital loans, consider applying for financing through Fora Financial. If you want a flexible working capital loan with no restrictions, this lender offers small business loans in amounts from $5,000 to $500,000. Repayment terms are available up to 15 months.

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

  • A time in business for at least 6 months
  • At least $12,000 in gross sales
  • No open bankruptcies on your credit report

You can also apply for a merchant cash advance of up to $500,000 through Fora Financial. There are no set terms and no restrictions. Payment amounts are based on the revenue of your business.

To qualify, you must be in business for at least 6 months and have no open bankruptcies. You also must have at least $5,000 in credit card sales to be eligible.

4. Fundbox

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  • No time in business requirements, but must have used a compatible accounting or invoicing software for at least 2 months, or a compatible business bank account for at least 3 months.
  • Business revenue: $50,000 per year
  • No specific personal credit score requirement
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Another flexible line of credit comes from Fundbox, where you can receive up to $100,000. You’ll make equal weekly payments for 12 or 24 weeks to pay off the loan, plus the flat fee charged by the lender. Fees start at just 4.66% of the draw amount.

To qualify for a line of credit from Fundbox, you must have:

  • A business checking account
  • At least $50,000 in annual revenue
  • A connected business bank account

There are no minimum credit score requirements.

Fundbox Credit is another option to explore if you have unpaid invoices. This is an invoice financing product that provides you with up to $100,000 for qualifying invoices. Advance fees start at 4.66% with repayment terms up to 24 months.

To qualify, there are no minimum credit score or time in business requirements. You must also connect your accounting software that shows activity from at least the last 2 months.

5. IOU Financial

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  • Must be in business at least 12 months. 
  • Must make at least $120,000 per year and have an average daily balance of $3,000 over a 3-month period.
  • Must have a personal credit score of 600 or above.
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With IOU Financial’s core small business loan, you can receive between $5,000 and $150,000 in extra capital for your business. These loans come with terms of 6, 9, or 12 months, and fixed payments are made daily.

To qualify for a small business loan from IOU Financial, you must:

  • Be in business for at least 1 year
  • Own at least 80% of your business (this requirement drops to 50% if you own your business with your spouse)
  • Make at least 10 deposits per month into your business bank account
  • Bring in annual revenue of $100,000

If you need more capital at a later time, IOU Financial also offers a mid-market loan of $70,000 to $300,000. Terms for these loans are 12, 15, or 18 months, and payments are made on a daily or weekly schedule.

6. Kabbage

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  • Must be in business at least 12 months and make at least $50,000 annually (or $4,500 for the last 3 months).
  • No specific credit score requirements.
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Kabbage offers flexible lines of credit that can be used to cover any business expense. If you’d like access to money on-demand, Kabbage’s lines of credit allow you to make draws as needed up to your credit limit.

Through Kabbage, you can be approved for a line of credit up to $250,000. With each draw, you’ll receive terms of 6 or 12 months, with payments made monthly. Kabbage charges fee rates between 1.5% and 10% based on the performance of your business.

If you have a low personal credit score but your business is doing well, Kabbage may be the right option for you. There are no minimum credit score requirements to receive a Kabbage line of credit.

However, to get a line of credit from Kabbage, you must:

  • Be in business for at least 1 year
  • Bring in annual revenue of at least $50,000

If you don’t meet this revenue requirement, you must show that you’ve brought in at least $4,200 per month for the last 3 months.

What makes Kabbage stand out from other lenders is that it offers the Kabbage Card. Typically, with a line of credit, you initiate the draw and receive your funds in your business bank account as quickly as the next business day. With the Kabbage Card, however, you have instant access to your funds. Use this card wherever Visa is accepted without having to wait for funds. Kabbage will then create a new loan with the same rates and terms as its traditional draws.

7. LoanBuilder

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  • Time in business: 9 months
  • Business revenue: $42,000 per year
  • Personal credit score: 550
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If you want a business loan with one fixed fee and terms that are easy to understand, consider Paypal’s LoanBuilder. Through this lender, you can customize your loan to get the payments that are right for you. You can apply for anywhere from $5,000 to $500,000 and receive your funds as quickly as the next business day. Repayment terms of up to 52 weeks are available and are based on the amount of the loan. Payments are made weekly until your loan plus the lender’s fee are repaid. Fees range from 2.9% to 18.72% of the borrowing amount.

To qualify for a LoanBuilder loan, you must have:

  • A personal credit score of at least 550
  • A time in business of at least 9 months
  • At least $42,000 in annual revenue
  • No active bankruptcies on your credit report

8. OnDeck

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  • Time in business: 12 months
  • Business revenue: $100,000 per year
  • Business industry: Must not be in a restricted industry
  • Personal credit score: 550
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OnDeck offers several financing options if you need $10,000 for your business. With a short-term loan, you can receive up to $500,000 with repayment terms of 3 to 12 months. The lender charges a simple interest rate starting at just 9% for the most qualified borrowers. Long-term loans are also available with repayment terms of 15 to 36 months with annual interest rates starting at 9.99%. Daily or weekly payments are automatically deducted from your bank account with both loan options.

To qualify for a term loan from OnDeck, you must:

  • Be in business for at least 1 year
  • Have a minimum of $100,000 in annual revenue
  • Have a credit score of at least 500

An origination fee up to 4% of the borrowing amount will be charged to service and process your loan.

If you want a more flexible financing option, OnDeck provides lines of credit to qualified borrowers. Lines of credit from $5,000 to $100,000 are available, with APRs starting at 13.99%. Automatic payments are deducted weekly from your business bank account.

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

  • A time in business of at least 1 year
  • $100,000 or more in gross annual revenue
  • A personal credit score of at least 600

You must also be the majority owner of your business.

9. QuarterSpot

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  • Time in business: 12 months
  • Business revenue: $200,000 per year
  • Average daily balance: $2,000 or above
  • Bank account activity: At least 10 revenue-producing deposits per month
  • Personal credit score: 550 or above
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Through Quarterspot, you can receive up to $250,000 in funding for your business in as quickly as 24 hours. Repayment terms of 9, 12, and 18 months are available with factor fees starting at 12.5 cents per dollar borrowed. With a Quarterspot loan, you can repay early to save on interest and fees.

To qualify for a loan from Quarterspot, you must have:

  • A credit score of at least 550
  • A time in business of at least 1 year
  • Monthly revenue of $16,000 or more
  • At least 10 sales every month
  • An average daily bank account balance of $2,000

You must also live in the United States, although applicants located in the states of North Dakota, Rhode Island, South Dakota, and Vermont are ineligible to receive funding through QuarterSpot.

Online Loans For Business Startups

You’ve reviewed all of your options, and there’s one major problem standing in your way: you’re running a brand-new business or startup. Most online lenders require your business to be in operations for at least one to two years in order to qualify for a business loan. While getting the capital you need for a new business may be more challenging, it certainly isn’t impossible. In some cases, you may even have to get a little creative with your financing options.

One option to consider is a personal loan for business. If your personal credit score is solid and you meet income requirements, you can receive a personal loan to use for business expenses. The lenders below offer personal loans for business with reasonable rates and fee:

Lender Borrowing Amount Term Min. Credit Score Next Steps

$2K – $25K 2 – 4 years 15.49% to 30% 600 Apply Now

$1K – $50K 3 or 5 years 8.16% – 27.99% 620 Apply Now

$2K – $35K 3 or 5 years 6.95% – 35.99% APR 640 Apply Now

lending club logo

 $1K – $40K 3 or 5 years 5.32% – 30.99% 640 Check Rate

Another way to get $10,000 online to grow your new business is with crowdfunding. Through crowdfunding, you have a platform to pitch your business in front of multiple investors. Whether you want to expand your business or bring a new product to market, you can launch a campaign to raise the capital you need. One such platform to consider is Kiva US.

Kiva US

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  • No requirements for time in business, revenue, or credit scores.
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Through Kiva US, you can receive up to $10,000 for your business. The best part is that you’ll be charged 0% interest on your loan. However, financing through Kiva doesn’t work like a traditional loan. With a traditional loan, you submit your application, the lender considers your business history and credit profile, and if you’re approved you’ll receive your payment.

With Kiva US, you’ll fill out an application once you’re pre-qualified. Then, for 15 days, you use the platform to get friends and family members to lend money to you. Once you’ve raised money from people you know, your campaign will go public to over 1.6 million people for 30 days. After you’ve raised the funds you need, you have up to 36 months to pay back your interest-free loan.

Unlike other loans, there are no credit score, time in business, or annual revenue requirements. To qualify, you must live in the United States, be at least 18 years old, and use the loan for business purposes.

What To Do If You Have Bad Credit

Let’s be honest: securing a loan with bad credit can be a challenge. Traditional options like bank loans and SBA loans are typically completely off the table with a poor credit score, even if your business is successful.

Before you apply for a business loan, it’s always important to know where you stand credit-wise, even if you know you have a great score. The internet makes this easier than ever, and there are multiple sites that allow you to view your credit score at no cost. If you have credit challenges, review your report for any errors that can be disputed with the credit bureaus.

Once you know your score, you’ll be able to better gauge what types of loans and which lenders you can work with. If you have a score that is in the low 600s or even lower, know that your financing options may be more limited.

Before you apply, also understand the cost of borrowing. A low credit score shows lenders that you’re a risky borrower, so not only are your financing options limited, but you’ll face higher fees and interest rates than more creditworthy borrowers. When you do apply for a loan or other financing, make sure to evaluate the full cost of the loan to ensure it makes sense for your business. Your loan should help your business — not drag you into uncontrollable debt.

The wisest financial move is to take steps to boost your score before applying. However, if you need a loan immediately, improving your score over months (or even years) may not make sense for your business. If this is the case, short-term loans, business credit cards, invoice financing, and lines of credit may be your best options. Some of the lenders on this list, such as OnDeck and Kabbage, work with borrowers with all credit types. Crowdfunding is a low-interest option you can also explore if you’re facing credit challenges.

Final Thoughts

Getting $10,000 for your business is easy when you know where to look, even if you have past credit challenges, operate a new business, or have annual revenue that falls below traditional lending requirements. However, having access to quick loans also makes it easier to push your business further into debt.

Be smart. Shop around with lenders, evaluate all of your options, and calculate the return-on-investment to ensure you’re making a sound, responsible financial decision for your business.

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Where To Find Fast $5,000 Loans For Your Business

When most people hear the term “business loan,” they immediately think about the large amounts of capital used to purchase real estate, buy bulk inventory, or hire a new team of employees. But even though business loans can be used to cover big expenses, sometimes all you need a small loan to assist with day-to-day cash flow, deal with an unexpected emergency, cover payroll for a few weeks, or help you get through a seasonal slow-down.

If you need $5,000 fast, a small business loan can help you clear your financial hurdles. The good news is that with a loan this small, you have your pick of online lenders that can get you funded as soon as the next business day. Paperwork requirements are also minimal for these smaller loans. With some lenders, a little basic information and a few bank statements are all you need to get approved.

However, not all online lenders issue $5,000 loans. Some lenders have much higher minimum borrowing amounts. Instead of spending hours weeding through search engine results, kick off the loan process with one of our picks. The following lenders offer loans, lines of credit, and other financial products that can help you get the $5,000 you need fast.

Ready to learn more? Let’s dive in!

1. LoanBuilder

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  • Time in business: 9 months
  • Business revenue: $42,000 per year
  • Personal credit score: 550
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If you want to “build” a loan that’s customized to your business, consider applying with PayPal’s LoanBuilder. Thanks to the LoanBuilder Configurator, you can get a quick overview of your financing options and pick the borrowing amount, terms, and payments that work best for your business.

LoanBuilder small business loans are available in amounts from $5,000 to $500,000 and have a single fixed-fee structure, with fees starting at 2.9%. Weekly payments are made over 13 to 52 weeks depending on the amount borrowed. In some cases, you can receive your funding as quickly as the next business day.

To qualify, you must be in business for at least 9 months, have at least $42,000 in annual revenue, and operate in an eligible industry.

2. Accion

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To qualify, you must:

  • Have a credit score of 575 or above (550 in some places)
  • Be no later than 30 days overdue on any bills
  • Have had no bankruptcies in the past 12 months
  • Have had no late rent or mortgage payments in the last 12 months
  • Have no foreclosures for the past 24 months
  • Have no mortgage adjustments during the length of the loan

Startups also must:

  • Have less than $500 in past-due debt
  • Have a business plan with a 12-month cash flow projection
  • Have a partner referral (like SCORE or SBDC)
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Accion specializes in term loans in amounts from $300 to $1 million. Term lengths vary based on the loan products you are qualified to receive. Typical APRs are between 7% and 34%. An origination fee of 3% to 5% is required.

To qualify, you must have a credit score of at least 575. Depending on the state you’re in, credit score requirements may be as low as 550. There are no time in business requirements, but you must have sufficient cash flow to repay your loan. You must also be no more than 30 days overdue on any bill, have no bankruptcies within the last year, no late rent or mortgage payments within the last year, and no foreclosures within the last 2 years.

If your business is a startup, you must have less than $500 in debt that is past due, have a referral, and provide a business plan with future cash flow projections.

3. Credibly

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  • Must be in business at least 6 months with a revenue of $15,000 per month.
  • Must have a personal credit score of 500 or above.
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Credibly offers three business financing options: working capital loans, business expansion loans, and merchant cash advances (MCAs). With Credibly’s working capital loans, you can receive up to $250,000 that is repaid over 6 to 17 months. Instead of interest rates, Credibly uses factor rates that start at 1.15. Learn more about factor rates and how they affect the cost of borrowing. Payments on working capital loans are automatically deducted daily or weekly.

Requirements for Credibly’s working capital loans are at least 6 months in business, a credit score of at least 500, and at least $15,000 in monthly bank deposits.

If you need money to grow your business, consider Credibly’s business expansion loans. These loans are available in amounts up to $250,000 with term lengths of 18 or 24 months. Interest rates are as low as 9.99% and payments are made weekly.

Qualifying for a business expansion loan is a bit more difficult. To receive this product, you must have a time in business of at least 3 years and a personal credit score of at least 600. You must also have an average of $15,000 in monthly deposits to your bank, as well as an average daily balance of at least $3,000.

If you don’t qualify for Credibly’s working capital or business expansion loans, a merchant cash advance may help you get the extra capital you need for your business. You can receive up to $150,000 through the purchase of your future receivables. This means that Credibly will deduct a percentage of your sales daily from your credit card processor or bank account until the cash advance plus fees are paid off. With an MCA, repayment terms are set at 3 to 14 months and factor rates start at 1.15.

To qualify, you must have at least $15,000 in monthly bank deposits. Your business must be in operations for at least 6 months, and you must have a personal credit score of at least 500.

4. QuarterSpot

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  • Time in business: 12 months
  • Business revenue: $200,000 per year
  • Average daily balance: $2,000 or above
  • Bank account activity: At least 10 revenue-producing deposits per month
  • Personal credit score: 550 or above
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Through QuarterSpot, you can receive small business loans up to $250,000. Repayment terms are 9, 12, or 18 months. With interest and fees, you may pay as little as 12.5 cents on the dollar to receive your loan. You can also save on interest and fees when you pay off your loan early.

To qualify for a QuarterSpot loan, you must meet several requirements. First, you must be in business for at least 1 year. You must also have a credit score of 550. Your business must make at least 10 sales per month and bring in monthly revenues of $16,000. Your average daily balance must be $2,000 to receive a QuarterSpot loan.

5. Fora Financial

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  • Time in business: 6 months
  • Business revenue: $5,000 monthly in debit and credit card sales (for a merchant cash advance) OR $12,000 monthly in gross sales (for a short-term loan)
  • Personal credit score: Unknown
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Like other lenders on our list, Fora Financial offers more than one way to get extra capital for your business. First, this lender offers small business loans from $5,000 to $500,000 with terms up to 15 months.

Fora Financial also offers MCAs for qualified borrowers. There are no set terms, and payments are remitted based on the revenue of your business. You can borrow between $5,000 and $500,000 with this product.

Fora Financial’s small business loans and MCAs both have factor rates between 1.1 and 1.3 and origination fees between 1% and 4%.

To qualify for a small business loan, you must have no open bankruptcies, a time in business of at least 6 months, and at least $12,000 in gross sales.

To qualify for Fora Financial’s MCAs, you must have no open bankruptcies, a time in business of at least 6 months, and at least $5,000 in credit card sales.

6. IOU Financial

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  • Must be in business at least 12 months. 
  • Must make at least $120,000 per year and have an average daily balance of $3,000 over a 3-month period.
  • Must have a personal credit score of 600 or above.
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IOU Financial’s core small business loan allows you to receive anywhere from $5,000 up to $150,000 for any business expense. With this loan, you’ll have repayment terms of 6, 9, or 12 months. Repayments are fixed and are made on a daily schedule. For larger capital needs, IOU Financial also offers loans of $70,000 to $300,000 with repayment terms up to 18 months.

To receive an IOU Financial loan, you must own at least 80% of your business. If you co-own your business with your spouse, you must own 50% of the business. You must have a time in business of at least 1 year, at least 10 deposits per month in your business bank account, annual revenue of at least $100,000, and an average ending balance of $3,000 in your business bank account.

7. BlueVine

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For invoice factoring:

  • Time in business: 3 months
  • Business revenue: $100,000 per year
  • Business type: Business-to-business
  • Personal credit score: 530

For business lines of credit:

  • Time in business: 6 months
  • Business revenue: $120,000 per year
  • Personal credit score: 600
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If a flexible line of credit would better fit your business needs, BlueVine has an option for you. Through this lender, you can receive a line of credit of $5,000 up to $250,000 with rates starting at 4.8%. There are no prepayment penalties or monthly maintenance fees.

With your line of credit, you can make multiple draws up to your total credit limit. You only pay fees on the borrowed amount, and your account will be replenished as you repay. Payments are made weekly or monthly over a period of 6 to 12 months.

To qualify for a BlueVine line of credit, you must have a personal credit score of at least 600, $100,000 in annual revenue, and a time in business of at least 6 months.

If unpaid invoices are affecting your incoming cash flow, consider applying for BlueVine’s invoice factoring service. You can receive a factoring line up to $5 million with rates starting at 0.25% per week.

To qualify, you must have unpaid invoices, a credit score of 530, and $100,000 in annual revenue. You must also have a B2B business that has been in operations for at least 3 months.

8. Kabbage

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  • Must be in business at least 12 months and make at least $50,000 annually (or $4,500 for the last 3 months).
  • No specific credit score requirements.
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Another option for flexible lines of credit is Kabbage, which offers up to $250,000 to qualified small business owners. With Kabbage, you can make draws (up to your credit limit) as needed to use as working capital for your business. You only pay for what you’ve used, and fees range from 1.5% to 10%. With Kabbage, you can select from 6-month and 12-month terms based on the amount you withdraw.

Kabbage looks at the performance of your business to determine if you qualify. There are no minimum personal credit score requirements. To qualify, however, you must be in business for at least a year and have at least $50,000 in annual revenue. (If you fail to meet this revenue requirement, you can still qualify if you’ve had $4,200 in revenue per month for the last three months.)

The application process with Kabbage is easy and requires you to provide some basic information about yourself and your business. You will also link your business accounts to get the maximum line of credit based on your business performance.

You can also use the Kabbage card. This works just like a credit card and can be used anywhere Visa is accepted. With this card, you can make instant purchases, and Kabbage will create a new loan with the same rates and terms as its traditional draws.

9. Fundbox

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  • No time in business requirements, but must have used a compatible accounting or invoicing software for at least 2 months, or a compatible business bank account for at least 3 months.
  • Business revenue: $50,000 per year
  • No specific personal credit score requirement
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Through Fundbox, you can receive a line of credit up to $100,000 based on the performance of your business. Payments are spread out over a 12- or 24-week schedule and include Fundbox’s flat fee. Fees start at just 4.66%.

To be approved for a Fundbox line of credit, you must have a business checking account, at least $50,000 in annual revenue, and a business based in the United States. You must also provide business bank account statements from the last 3 months.

In addition to its lines of credit, Fundbox also offers invoice financing to qualified businesses. You can receive up to $100,000 with your unpaid invoices with fees starting at 4.66%. You must have qualifying invoices to receive this product, and you also must link your accounting software with activity from the last 2 months.

10. OnDeck

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  • Time in business: 12 months
  • Business revenue: $100,000 per year
  • Business industry: Must not be in a restricted industry
  • Personal credit score: 550
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With OnDeck, you can receive a line of credit up to $100,000 to use for any business purpose. APRs start at 13.99% for the most qualified borrowers, and payments are automatically deducted each week. There’s a $20 monthly maintenance fee, but this fee is waived if you draw at least $5,000 within 5 days of opening your account.

To qualify for an OnDeck line of credit, you must be in business for at least 1 year, have at least $100,000 in annual revenue, and a personal credit score of 600.

If you don’t meet the requirements for a line of credit, or you’re interested in another option, OnDeck also has fixed term business loans. You can receive up to $500,000 with annual interest rates starting at 9.99%. OnDeck has two different options for its loans: short-term loans with terms up to 12 months and long-term loans with terms up to 36 months. Repayments are made daily or weekly.

To qualify, you must be in business for at least 1 year and have $100,000 in annual revenue. Your credit score must be at least 500 to qualify for OnDeck’s term loans.

11. Kiva US

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  • No requirements for time in business, revenue, or credit scores.
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If you want to bypass traditional and alternative lenders and avoid high interest rates, give Kiva US a try. This crowdfunding platform allows you to borrow up to $10,000 at a 0% interest rate.

Sounds great, doesn’t it? However, getting funded through Kiva US isn’t quite as easy as other loan options. But with a little extra work, you can receive an affordable loan for your business. Here’s how it works.

First, you fill out the application on the Kiva US website, just as you would any other loan application. Once you’ve submitted your application, you’ll prove that you’re creditworthy by getting your friends and family members to loan money to you through the platform over the next 15 days. Once you’ve passed this stage, you’ll be able to use the public Kiva platform to reach over 1.6 million people worldwide to raise your funds over the next 30 days. Once you’ve reached your goal, you’ll receive your money and up to 36 months to repay your loan.

To qualify, you must live in the United States and be at least 18 years old. You must also use your loan for business purposes. There are no time in business, personal credit score, or annual revenue requirements to qualify.

How Fast Can I Get A Business Loan?

The time it takes to receive your business loan varies by lender. For small loans of just $5,000, you could be approved in just minutes and receive your funds as quickly as the next business day. For lines of credit through lenders such as Kabbage and Fundbox, you can make draws immediately after being approved, with funds typically reaching your business bank account within 1 to 3 days.

The key to getting your business loan as quickly as possible is to make sure that you provide accurate information and upload all requested documentation. In some cases, your lender may require additional information or documentation to approve your loan. Make yourself available to answer any questions from the lender and provide the required documentation needed to approve and fund your loan.

What To Do If You Have Bad Credit

If you have bad credit, there are business loan options open to you. Some of the lenders previously mentioned, such as Kabbage and Fundbox, do not have minimum credit score requirements and consider the performance of the business when approving loans. Therefore, if you have steady revenue, you may still qualify for funding.

Business credit cards often have less stringent requirements, so these may be an option if you have a low credit score. Depending on your score, you may be able to qualify for an unsecured card. However, if your credit score is very low or you haven’t yet established credit, you may qualify for a secured card which is backed by a cash deposit. As you make on-time payments, you’ll build your credit score and qualify for unsecured cards and other financial products in the future.

Crowdfunding has also grown in popularity among small business owners. Sites such as Kiva US allow business owners to raise the capital they need without paying high interest rates. Crowdfunding is also a great resource for new businesses and startups that don’t meet time in business or annual revenue requirements of other lenders.

If you have bad credit, it’s inevitable that you’ll hit roadblocks on the path to funding. Not only will your options be more limited, but you’ll miss out on low-interest, long-term loans. To qualify for the best funding opportunities, you must have a solid credit score. Go online to pull your free score, review your credit report, and take steps to build your credit. Pay off all debt obligations as agreed, keep your credit utilization down, and dispute erroneous items on your credit report. Though this method takes time, boosting your credit score opens the door for more affordable loans and financial products in the future. Learn more about how you can raise your personal credit score.

Final Thoughts

Finding a $5,000 loan for your business shouldn’t be too difficult. However, you should go into the process knowing that smaller loans come with shorter repayment terms and may also be accompanied by high fees and interest rates.

Calculate the affordability of the loan to ensure that taking out a loan is a smart financial move. If you’re new to applying for small business loans, educate yourself before you start submitting applications to lenders. Finally, be sure to shop around to ensure you get the most affordable financing products that work best for your business.

The post Where To Find Fast $5,000 Loans For Your Business appeared first on Merchant Maverick.

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