Monday, July 22, 2019

Small Business Funding: What's the Best Type for Your Business? - Nav

Small Business Funding: What's the Best Type for Your Business? - Nav


Small Business Funding: What's the Best Type for Your Business? - Nav

Posted: 25 Jun 2019 12:00 AM PDT

Advertiser & Editorial Disclosure

Opportunities for growth arise, equipment breaks, inventory goes on sale, business slows, and operational expenses grow. Sometimes, all of those things happen at once. Regardless of what circumstance matches your experience, chances are you'll need working capital to make things happen.

While the ideal solution may be to tap into reserve funds to manage costs, that's not always possible. In fact, four out of ten business owners sought out some type of business funding in 2018.

If you're thinking about or in the process of securing small business funding, there are numerous options to consider, including small business loans, lines of credit, and business credit cards. Selecting the right funding will require you to take into consideration each option and how it does or does not meet your financial needs and credit profile, among other things. 

Not sure where to start?  Here are a few of the most common funding types:

Term Loans

A term loan is what most people think about when they hear the term "loan." When you take out a term loan, you receive a lump sum of money, which you're obligated to repay within a certain amount of time, or the term. 

Term loans come in a wide range of amounts and repayment terms. For instance, short-term loans are typically repaid within six to twelve months while long-term lines may have repayment terms as long as ten or twenty years. 

Both traditional lenders (like banks and credit unions) and alternative resources, like peer-to-peer lending or online lenders, offer term-loans. As such, rates, repayment terms, and fees (e.g., origination, application, etc.) will vary from lender to lender. However, most lenders will base each of those factors on a number of variables like your credit score, loan amount, and annual revenue. 

That doesn't suggest that you need to have good or excellent credit to secure a term loan. There are term loans designed to accommodate borrowers with poor credit, though many of these will be secured loans. In that case, the lender requires you to put up collateral (e.g., real estate property, equipment, automobiles) in the event you fail to pay off the loan. As well, certain types of funding can help you build business credit. You can check your business credit score for free with Nav.

Though there are many types of business term loans, many with their own set of requirements and restrictions, they are typically considered to be quite flexible and can help you manage a variety of business costs. This includes things like inventory or equipment purchases, payroll, debt consolidation, or simply a working capital boost. 

SBA Loans

Small Business Administration (SBA) loans, which can be approved for up to $5 million,  are guaranteed by the United States SBA and originated by approved lenders. Because SBA loans are federally backed, they are often offered with lower rates and more flexible terms, making them a prime solution for eligible small business owners. 

The SBA offers numerous loan programs, some of which have loan terms as long as 10 or 25 years. The 7(a) Loan and the 504 Loan, however, are considered two of the most popular options. 

Funds from a 7(a) Loan can be used to manage a variety of business-related expenses, including working capital, debt consolidation, inventory, and equipment. 

The 504 Loan, on the other hand, is limited to project costs associated with the purchase, construction, modernization, or remodeling of real estate property, or to consolidate debt accrued from those activities. 

To qualify for most SBA loans, including the two above, you must have what's considered good credit, typically a 680 or higher, and meet any additional requirements and standards as they apply to the SBA or the specific loan program, this includes size, and revenue standards. 

Business Line of Credit 

In many ways, a business line of credit is similar to a credit card. If approved, you will be granted access to a maximum amount of cash, similar to a credit card limit. However, instead of receiving it as a lump sum, as is the case with a loan, borrowers can draw from available funds as needed, only paying interest on what they use. 

At the end of the draw period, the line of credit will be closed and the account will enter into repayment status. During this time, you'll be required to make monthly payments on the total balance for the duration of the repayment term. 

When it comes to usage, a business line of credit is notably flexible. This makes them a good option for those looking to manage ebbs and flows in cash flow. 

In the past, approval often required the company to have been in business for at least six months and a minimum annual revenue of $25,000 to $50,000. And while that still may be true for some lenders, the rise of online lenders has made business lines more accessible, even applicants who don't meet traditional eligibility standards. 

Business Credit Cards

Like the personal equivalent, a business credit card gives you ongoing access to a revolving line of credit, up to your approved limit. When balances are paid in full by the due date, you can typically escape interest payments. When carrying a balance to the next billing cycle, you'll likely be charged an interest — unless, of course, the card carries a 0% intro APR offer.

There is a slew of business credit cards out there, each of which carries its own qualifications, rates, fees, and benefits. Rates are often closely tied to your credit score, with better credit earning lower interest rates as well as access to prime cards. 

If you're considering using a credit card as a form of small business funding, be sure to review all your options to find the best one based on your creditworthiness, financial needs, and preferred benefits and rewards. 

When used properly, a business credit card can be a great boost to your business — they can help you manage cash flow, pay for unexpected expenses, and build your business credit. Business credit cards also can give you access to rewards programs, added purchase protections, and other benefits, like travel perks. 

Equipment Financing

While many of the funding options above can be used for an array of business expenses, equipment financing, as the name suggests, is used to purchase or lease new or used business equipment. This includes things like commercial ranges, construction vehicles, and office equipment.

Overall, this type of small business funding offers borrowers access to equipment at a relatively low APR, though borrowers with average or below average credit will likely find higher rates and less flexible terms. 

Keep in mind that financing equipment, while certainly a valuable asset when needed, isn't always ideal. This is particularly true if you have a longer repayment term on equipment that quickly becomes outdated. 

Invoice Financing 

Invoice financing, and its cousin, invoice factoring, is a small business funding option that allows business owners to turn their outstanding invoices or accounts receivable into cash. Because it's based on invoices, this is only an option if your business offers goods and services in advance of payment. 

Under this type of agreement, an invoice financing company will give the borrower a percentage of the invoice value upfront, typically between 80% and 90%, though it varies. 

Once the customer pays the invoice, the financing company will give the borrower the remaining funds minus fees. 

This type of funding is often best if you need to free up cash flow as you wait for payment on net-30, net-60, or net-90 accounts. And, since the invoices act as collateral, you may be able to secure this type of funding even if your credit isn't ideal. 

Small Business Grants

Simply put, grants are free money. Therefore, small business grants, which may be issued by federal, state, or local governments as well as private entities, are the ideal funding solution. 

There are hundreds, if not thousands, of grants available to businesses, many of which are designed with certain types of businesses in mind. For example, some grants may be geared towards minority or women-owned businesses while others may be awarded to startup companies, non-profit organizations, or businesses that meet environmental or community enrichment objectives. 

As you may assume, many business owners would prefer free money, and so the grant process is typically competitive. It's also important to note that applying for a grant often means meeting specific deadlines and eligibility standards and waiting through the review and notification process. 

You can find grants in numerous places, including the SBA website, Grants.gov, your state and local government websites, and local business development centers. 

While grants are terrific, securing them can be challenging and often use is restricted. Shoot for the stars and apply for the grants, but it helps to have a contingency plan. 

Alternative Small Business Funding Solutions

Though the aforementioned funding types represent some of the most popular options available to small business owners, there are a few others that you may want to consider along the way, particularly if you're looking for startup funding

Crowdfunding 

As the name suggests, "crowdfunding" is a fundraising effort that draws funds from a pool of investors, be they everyday consumers or entrepreneurs and professional investors. 

If you're considering different crowdfunding platforms, it's important to pay specific attention to your marketing efforts as much of your success will depend on your ability to make your product or services attractive to potential investors. 

Venture capitalists/Angel investors 

Though there are some differences between the two, both venture capitalists and angel investors offer access to funds in exchange for equity in the company. In addition to funding, these investment groups or individuals can also bring to the table valuable connections and industry expertise. 

Choosing the right small business funding companies

With so many options, where should you seek funding first? Here are a few questions you can ask to help you narrow the search:

  • How much funding do you need? Lenders typically set max and min funding limits. Determine how much you need and eliminate lenders who can't accommodate your request. 
  • How quickly do you need funding? Some lenders provide funds within 24 hours of approval; others may have a lengthy application process or release funds weeks later. Determine which lenders are capable of meeting your time-to-funding needs. 
  • Why do you need funding? Some lending options, like lines of credit, credit cards, and term loans may be flexible. Others, like equipment financing and 504 loans are limited in use. Other options, like invoice finances, are designed to meet certain needs, like gaps between payments. Keep that in mind as you narrow your choices. 
  • How is your credit? One of the biggest determining factors in your pursuit for funding is often your credit score. A good or excellent credit score can give you access to the best rates, flexible terms, and numerous options including prime business credit cards. 
  • Poor credit, on the other hand, may limit your options. For instance, a business owner with poor credit may find it's easier to secure funds through invoice financing as opposed to a business credit card. 
  • What's the total cost of the loan? It's easy to assume that interest rates are the biggest indicator of affordability, but the total cost of a loan also includes any fees. Origination fees, prepayment fees, and application fees can increase costs. Always find out what fees you'll need to pay and factor them into your decision. 

Best Small Business Funding Options

There are a lot of great funding options available to those who look, but finding them isn't always easy. We provide numerous funding reviews in our marketplace, as well as an in-depth look at how business financing works, but here are a few of our favorites. 

Business Credit Cards

American Express® Blue Business Cash Card

With the American Express® Blue Business Cash Card, you can earn Earn 2% cash back on all eligible purchases on up to $50,000 per calendar year, then 1%. Currently, the card also has an intro APR offer of 0% on purchases for 12 months, which can certainly help when it comes to financing business expenses. Plus, there's no annual fee, which makes this card a low-risk addition to your wallet. 

Earn 2% cash back on all eligible purchases on up to $50,000 per calendar year, then 1%. Cash Learn More
Capital One® Spark® Classic for Business

If you're just starting out and trying to build credit, getting approved for some of the prime business credit cards can be difficult — many of them require good to excellent credit. The Capital One® Spark® Classic for Business, which is designed for applicants with fair credit, is an exception. This card offers 1% Cash Back on every purchase. Also, there are no annual or foreign transaction fees. 

Capital One® Spark® Classic for Business
Enjoy no annual fee. Earn 1% cash back on every purchase. Build business credit with responsible Learn More

Small Business Term Loans

Kabbage

If you need access to cash quickly, you may want to consider Kabbage, which offers short-term business loans (6 – 12 months) from $500 to $250,000. The application process is quick, and funds can be available in as little as seven minutes. 

Learn more

SmartBiz

Need more time to repay your loan?  Smartbiz, offers term loans from $30,000 to $200,000, with repayment terms from 2 to 5 years and fixed interest rates between 6.99% and 26.99%. As an added perk, Smartbiz also is a marketplace for SBA loans, which means you may be able to do the bulk of your loan shopping in one spot. 

Learn more

Wells Fargo

With competitive rates, prime business resources, and a number of banking and lending solutions,  Wells Fargo has long been known as one of the primary players in small business financing. 

With a loan, you can typically borrower between $10,000 and $100,000 with terms between 1 and 6 years, depending on the product you choose. They also offer lines of credit and small business credit cards, in case you want to expand your funding search. 

Learn more

Crowdfunding

Kickstarter

Kickstarter has become synonymous with crowdfunding, and today it's likely one of the most popular platforms. The process is simple, set your funding goals and market your product, concept, or business to consumers and venture capitalists as you see fit. It's a good platform for a variety of business verticals and you can incentivize in a number of ways, including gifts, discounts, early access, and equity shares. 

Learn more

CircleUp

CirculeUp is an equity-based crowdfunding company, and as such, investors are rewarded with equity in the form of company stocks or shares. To use CircleUp, your business must be considered a consumer brand. And while businesses at various points in their journey can apply, you'll need to have at least $1 million in revenue to snag a spot on their site, so it's often best for established businesses as opposed to startups. 

Learn more

FAQ

Where can I find business funding for startups?

Funding a new or growing business isn't always easy. Some lenders prefer that borrowers meet revenue or time in business milestones, many of which are just out of reach for startups. There are, however, many options to those who seek them out. 

Invoice financing, equipment financing, some SBA loans, and business credit cards are all viable paths to startup funding. In addition, crowdfunding and grants can also provide you the capital you need to forge ahead. 

Is it possible to get small business funding with bad credit?

Though they aren't always easy to find, there are small business funding options for borrowers with bad credit. Secured business credit cards and term loans are designed specifically for borrowers with poor credit. Similarly, equipment financing, invoice factoring can be ideal for borrowers with bad credit. 

That said, your best bet at funding is to improve your credit score. So if you have time, you may want to take the steps to build your credit. You can start by requesting a credit report, addressing any errors, paying bills on time, and even opening and responsibly using a business credit card. 

Can you get business funding with no credit check? 

The answer to that depends on the type of funding you want. Long-term business loans and even most short-term loans require the borrower to undergo a credit check. The same is true for many credit cards and equipment financing options. 

If you have bad credit or would simply prefer to forgo a credit check, you may want to consider crowdfunding sites or one of the small business funding options listed here.

Where can I find small business funding review?

Small business funding is a common need, and so there are plenty of reviews available to those who look. You can find a plethora of reviews on our website, specifically in our marketplace, but that's not the only place you should look.

As you sift through your options, it's best to check numerous financial resource and review sites, including TrustPilot and BBB. It also may be helpful to check the lender's social media accounts and Google reviews before you sign off on a loan agreement. 

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Small business workshop in Berea focuses on census data: Community Voices - cleveland.com

Small business workshop in Berea focuses on census data: Community Voices - cleveland.com


Small business workshop in Berea focuses on census data: Community Voices - cleveland.com

Posted: 22 Jul 2019 07:21 AM PDT

BEREA, Ohio -- Powered by data from the U.S. Census Bureau, Census Business Builder is a free, web-based tool to help business owners access information about prospective customers and competitors.

A data specialist from the Census Bureau will facilitate a workshop for business owners from 10 to 11:30 a.m. Aug. 14 at Baldwin Wallace University's Kamm Hall, Room 132, at 191 E. Center St., Berea. The program is free.

The presentation, "Big Data for Small Biz: Census Business Builder Workshop," is part of the Berea Biz Talk series, which offers programs for local entrepreneurs and those interested in launching a business.

Participants should bring a laptop or tablet and use Census Building during the workshop to research opportunities for their businesses. The tool can access information on specific markets and locations.

This event is sponsored by the Ohio Small Business Development Center at Lorain County Community College, the City of Berea Economic Development Office and the Digital Marketing Clinic at BW.

To register, go to bit.ly/berea814.

For questions or more information, email lorainsbdc@lorainccc.edu or call 440-366-4370.

How Entrepreneurs Can Get Ready for Retirement - with Unretirement - Small Business Trends

Posted: 22 Jul 2019 04:30 AM PDT

Retirement is a word that for most first-time entrepreneurs seems very far away. But strikes panic in those people that are older than 55. However, no matter how you look retirement, it is now changing as the definition of work is evolving.

On this week's Small Business Radio Show, we talk to Chris Farrell, a senior economics editor to NPR's Marketplace. Farrell discusses what retirement looks like for small business owners. And how this picture is rapidly shifting. He explains that about 10,000 baby boomers will celebrate their 65th birthday every single day from today until 2030. In just over a decade, more than 21 percent of the U.S. population (about 73 million people) will be past the traditional retirement age. Additionally, by 2035 there will be more people 65 and older than 18 or younger. Because people are living much longer, it has become very difficult to save enough to live on for 25 more years without additional income.

Chris believes it is time to shift the conversation about aging away from Social Security, retirement, physical decline, and an economic crisis. He wants to focus on boosting the odds of healthy, active, and purposeful aging through working longer- including launching an entrepreneurial venture. He explains that active older minds who are involved in a community are happier.

Unretirement

Farrell says many baby boomers soon to retire are calling it "unretirement". Or a "sabbatical". They are breaking down the silos between traditional work and a permanent retirement. People start to think about what they want to do next. This still involves earning some money. He explores what  experienced workers can accomplish as entrepreneurs. And how so many have launched rewarding small businesses. These include starting a side hustle or going into business with their children.

The stunning statistic Chris shares is that now for the first time, 25% of all business are started by people are 55 to 64 years old. These older entrepreneurs are turning their passion into a business out of their home or a shared workspace. What is different for these people is that many of these new entrepreneurs start to focus on a business with a purpose rather than just earning more money.

In addition, Chris believes that older entrepreneurs should take the importance of lifelong learning seriously. Unlike post college degrees, earning a certification in a specialty rarely requires a large investment of time and money, but can open the door to new business opportunities.

Listen to the entire interview on the Small Business Radio Show.

Image: Depositphotos.com

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The most common mistake made by small business owners, according to former SBA head Karen Mills - Yahoo Finance

Posted: 19 Jul 2019 01:51 PM PDT

In 2016, the U.S. small business sector saw an increase of 1.8 million new jobs.

And with any new venture, problems arise when business owners don't manage their money properly for the future.

"The most common mistake that small business owners make is that they don't understand their cash forecast, and business can be going very well, but you can run out of money," Karen Mills, the former administrator of the U.S. Small Business Administration (SBA) during President Barack Obama's presidency, told Yahoo Finance (video above).

View photos
President Barack Obama and Small Business Administration (SBA) Administrator Karen Mills participate in a breakout session during the Winning the Future Forum on Small Business at Cleveland State University in Cleveland, Tuesday, Feb. 22, 2011. (AP Photo/Carolyn Kaster)

'They create a path to the American dream'

There are 30.7 million small businesses in the U.S. and approximately half of America's private workforce are employed at a small business–which is defined by the SBA as a company that employs 500 people or less.

"They create a path to the American dream, so it's not only part of the economy, but it's part of economic mobility," Mills said.

Mills idea of the American dream has its roots from a relative's journey in America.

Mills' grandfather, an immigrant from Russia, started a textile business with just two machines in the back of a Boston shoe shop. She worked for him during her college years and saw the business grow from one man taking care of his family in a new world to a company employing hundreds of people taking care of their families.

"I grew up with him, and he would say to me, 'Our family doesn't work for other people. Our family grows their own business,'" Mills said. "And to me, that's the American dream, the ability to come to this country without anything, without resources, without advantages, and have access and opportunity."

View photos
Karen Mills holds up her book, "Fintech, Small Business & the American Dream: How Technology Is Transforming Lending and Shaping a New Era of Small Business Opportunity" in Yahoo Finance's studio.

'This is actually a terrific time to start a small business'

Something smaller businesses lose sight of — especially when they have to contend with with bigger corporations such as Amazon — is not being prepared for obstacles to arise with their starting investment, like stocking up their inventory and being ready for late payments from customers or shipments.

"It's very important for a small business owner to understand where their business is going, what's the customer need that they're going to meet, and how are they going to survive financially," Mills said. "What are going to be the resources that they're going to use to start the business? How are they going to generate the resources they need to stay in business and pay their employees?"

She noted that in the era of FinTech, small businesses have more tools than ever to establish their foundation.

"This is actually a terrific time to start a small business because the resources that you need to begin are getting more and more identifiable and cheap because of technology," said Mills.

READ MORE:

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube, and reddit.

Side Hustle or Full-Time Business - Pros and Cons - Small Business Trends

Posted: 21 Jul 2019 12:00 PM PDT

Do you dream of giving up your job and being your own boss? Making the jump from employee to entrepreneur and business owner can prove daunting, as well as rewarding.

Some people find getting a 'happy balance' by remaining in employment but embarking on a side hustle. As a result, they run their own business on the side while working full time. Others want the challenge and rewards of running their own full-time business.



Side Hustle or Full-Time Business

If you're deliberating whether to start a side hustle or full-time business venture, take a look at the following pros and cons of side hustles and full-time businesses to help you decide.

Side Hustle Pros

Diversify Your Business

You might already run a business and are thinking about starting a side business. Side hustles can be the perfect way to diversify your business. By varying its range of products or services, you can increase the profitability of the business.

One example of a business embarking on a side hustle is the multinational furniture retailer, IKEA. In 2017, IKEA announced it was considering opening a chain of standalone restaurants.

Peace of Mind

We can never be sure that any kind of business will be successful. By starting a side hustle and remaining in employment, you can have peace of mind that if your business doesn't work out, you'll still have work and be generating an income.

Give You a Competitive Advantage in Your Career

Starting a business requires you to learn new skills. Such skills can be used to develop your own career and give you a competitive advantage.

Nurture Creativity

Starting a side hustle can be the perfect way to unleashing the creativity inside you.

Be a Better Problem Solver

No-one said running a small business wasn't without its problems. Starting any kind of side hustle is bound to create some kind of problems. By overcoming such problems, you'll become a better problem solver, something you can use to help you in your career and on a personal level.

Side Hustle Cons

Your Employer Might Not Approve

Not all employers approve of their employees starting any side business and might even put an outright prohibition on side hustle ventures, as they want their employees' full attention. Your employer's views on side hustles should therefore be considered before starting your venture.

Assignment of Intellectual Property

Companies that create significant amounts of intellectual property might require their employees to sign an agreement that states intellectual property produced while you are employed at their company is owned by the employer. Again, this is something to consider before you devote time, energy and resources into creating an invention.

Insufficient Time to Devote to the Side Hustle

Being employed and operating a business on the side might not leave you with much spare time to spend with family and friends. Juggling the two will also mean you will have less time to dedicate to getting your side hustle up and running and thriving.

Little Down Time

Working in a job and running a side business naturally requires a lot of time, energy and commitment, meaning you aren't left with any down time.

You Neglect Your Regular Job

Spending time and energy on your side hustle could result in your neglecting your regular job.

Full-Time Business Pros

You'll Have the Time to Devote to Your Business

Without having a 'job' to go to, you'll have the time and energy to put into really making a go of your full-time business.

You Have Faith in Your Venture

By quitting your job, you are telling yourself that you know your business idea can and will work.

Build Confidence

Without having to go to a '9 to 5' job, running a business full-time can help build confidence, self-esteem and help you develop both professionally and personally.

Better Work/Life Balance

You might be managing a business on a full-time scale, but by being your own boss all the time, you can enjoy a greater amount of flexibility, which can improve your work/life balance.

You'll Experience a Steeper Learning Curve

Plunging straight into a full-time business will put you onto a steep learning curve about the complex world of entrepreneurship. Being forced to learn the skills of running a business from the offset, is likely to make your stronger and more proficient in business.

Full-Time Business Cons

No 'Plan B' to fall back on

Of course, not all business ventures work. By putting 'all your eggs in one basket' and quitting your job, you won't have anything in terms of work and income to fall back on if your venture isn't as successful as you hope it will be.

Harder to Walk Away From

If you're working on your business 24/7, it can be more difficult to walk away from if the business isn't going the way you want it to.

Too Much Pressure

From paying employees to marketing your business and sorting out admin duties, running a business full-time can be stressful and could put a lot of pressure on you to be profitable.

Less Time to Learn Essential Skills

By diving into a business full-time, you'll have less time to pick up and learn those essential business skills compared to if you were running a business as a part-time venture.

Harder to Budget

Without an income coming in from regular employment, managing cashflow and budgeting can be more challenging with a full-time business.

Image: Depositphotos.com

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The most common mistake made by small business owners, according to former SBA head Karen Mills - Yahoo Finance

The most common mistake made by small business owners, according to former SBA head Karen Mills - Yahoo Finance


The most common mistake made by small business owners, according to former SBA head Karen Mills - Yahoo Finance

Posted: 19 Jul 2019 01:51 PM PDT

In 2016, the U.S. small business sector saw an increase of 1.8 million new jobs.

And with any new venture, problems arise when business owners don't manage their money properly for the future.

"The most common mistake that small business owners make is that they don't understand their cash forecast, and business can be going very well, but you can run out of money," Karen Mills, the former administrator of the U.S. Small Business Administration (SBA) during President Barack Obama's presidency, told Yahoo Finance (video above).

View photos
President Barack Obama and Small Business Administration (SBA) Administrator Karen Mills participate in a breakout session during the Winning the Future Forum on Small Business at Cleveland State University in Cleveland, Tuesday, Feb. 22, 2011. (AP Photo/Carolyn Kaster)

'They create a path to the American dream'

There are 30.7 million small businesses in the U.S. and approximately half of America's private workforce are employed at a small business–which is defined by the SBA as a company that employs 500 people or less.

"They create a path to the American dream, so it's not only part of the economy, but it's part of economic mobility," Mills said.

Mills idea of the American dream has its roots from a relative's journey in America.

Mills' grandfather, an immigrant from Russia, started a textile business with just two machines in the back of a Boston shoe shop. She worked for him during her college years and saw the business grow from one man taking care of his family in a new world to a company employing hundreds of people taking care of their families.

"I grew up with him, and he would say to me, 'Our family doesn't work for other people. Our family grows their own business,'" Mills said. "And to me, that's the American dream, the ability to come to this country without anything, without resources, without advantages, and have access and opportunity."

View photos
Karen Mills holds up her book, "Fintech, Small Business & the American Dream: How Technology Is Transforming Lending and Shaping a New Era of Small Business Opportunity" in Yahoo Finance's studio.

'This is actually a terrific time to start a small business'

Something smaller businesses lose sight of — especially when they have to contend with with bigger corporations such as Amazon — is not being prepared for obstacles to arise with their starting investment, like stocking up their inventory and being ready for late payments from customers or shipments.

"It's very important for a small business owner to understand where their business is going, what's the customer need that they're going to meet, and how are they going to survive financially," Mills said. "What are going to be the resources that they're going to use to start the business? How are they going to generate the resources they need to stay in business and pay their employees?"

She noted that in the era of FinTech, small businesses have more tools than ever to establish their foundation.

"This is actually a terrific time to start a small business because the resources that you need to begin are getting more and more identifiable and cheap because of technology," said Mills.

READ MORE:

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube, and reddit.

Side Hustle or Full-Time Business - Pros and Cons - Small Business Trends

Posted: 21 Jul 2019 12:00 PM PDT

Do you dream of giving up your job and being your own boss? Making the jump from employee to entrepreneur and business owner can prove daunting, as well as rewarding.

Some people find getting a 'happy balance' by remaining in employment but embarking on a side hustle. As a result, they run their own business on the side while working full time. Others want the challenge and rewards of running their own full-time business.



Side Hustle or Full-Time Business

If you're deliberating whether to start a side hustle or full-time business venture, take a look at the following pros and cons of side hustles and full-time businesses to help you decide.

Side Hustle Pros

Diversify Your Business

You might already run a business and are thinking about starting a side business. Side hustles can be the perfect way to diversify your business. By varying its range of products or services, you can increase the profitability of the business.

One example of a business embarking on a side hustle is the multinational furniture retailer, IKEA. In 2017, IKEA announced it was considering opening a chain of standalone restaurants.

Peace of Mind

We can never be sure that any kind of business will be successful. By starting a side hustle and remaining in employment, you can have peace of mind that if your business doesn't work out, you'll still have work and be generating an income.

Give You a Competitive Advantage in Your Career

Starting a business requires you to learn new skills. Such skills can be used to develop your own career and give you a competitive advantage.

Nurture Creativity

Starting a side hustle can be the perfect way to unleashing the creativity inside you.

Be a Better Problem Solver

No-one said running a small business wasn't without its problems. Starting any kind of side hustle is bound to create some kind of problems. By overcoming such problems, you'll become a better problem solver, something you can use to help you in your career and on a personal level.

Side Hustle Cons

Your Employer Might Not Approve

Not all employers approve of their employees starting any side business and might even put an outright prohibition on side hustle ventures, as they want their employees' full attention. Your employer's views on side hustles should therefore be considered before starting your venture.

Assignment of Intellectual Property

Companies that create significant amounts of intellectual property might require their employees to sign an agreement that states intellectual property produced while you are employed at their company is owned by the employer. Again, this is something to consider before you devote time, energy and resources into creating an invention.

Insufficient Time to Devote to the Side Hustle

Being employed and operating a business on the side might not leave you with much spare time to spend with family and friends. Juggling the two will also mean you will have less time to dedicate to getting your side hustle up and running and thriving.

Little Down Time

Working in a job and running a side business naturally requires a lot of time, energy and commitment, meaning you aren't left with any down time.

You Neglect Your Regular Job

Spending time and energy on your side hustle could result in your neglecting your regular job.

Full-Time Business Pros

You'll Have the Time to Devote to Your Business

Without having a 'job' to go to, you'll have the time and energy to put into really making a go of your full-time business.

You Have Faith in Your Venture

By quitting your job, you are telling yourself that you know your business idea can and will work.

Build Confidence

Without having to go to a '9 to 5' job, running a business full-time can help build confidence, self-esteem and help you develop both professionally and personally.

Better Work/Life Balance

You might be managing a business on a full-time scale, but by being your own boss all the time, you can enjoy a greater amount of flexibility, which can improve your work/life balance.

You'll Experience a Steeper Learning Curve

Plunging straight into a full-time business will put you onto a steep learning curve about the complex world of entrepreneurship. Being forced to learn the skills of running a business from the offset, is likely to make your stronger and more proficient in business.

Full-Time Business Cons

No 'Plan B' to fall back on

Of course, not all business ventures work. By putting 'all your eggs in one basket' and quitting your job, you won't have anything in terms of work and income to fall back on if your venture isn't as successful as you hope it will be.

Harder to Walk Away From

If you're working on your business 24/7, it can be more difficult to walk away from if the business isn't going the way you want it to.

Too Much Pressure

From paying employees to marketing your business and sorting out admin duties, running a business full-time can be stressful and could put a lot of pressure on you to be profitable.

Less Time to Learn Essential Skills

By diving into a business full-time, you'll have less time to pick up and learn those essential business skills compared to if you were running a business as a part-time venture.

Harder to Budget

Without an income coming in from regular employment, managing cashflow and budgeting can be more challenging with a full-time business.

Image: Depositphotos.com

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Small Business Funding: What's the Best Type for Your Business? - Nav

Small Business Funding: What's the Best Type for Your Business? - Nav


Small Business Funding: What's the Best Type for Your Business? - Nav

Posted: 25 Jun 2019 12:00 AM PDT

Advertiser & Editorial Disclosure

Opportunities for growth arise, equipment breaks, inventory goes on sale, business slows, and operational expenses grow. Sometimes, all of those things happen at once. Regardless of what circumstance matches your experience, chances are you'll need working capital to make things happen.

While the ideal solution may be to tap into reserve funds to manage costs, that's not always possible. In fact, four out of ten business owners sought out some type of business funding in 2018.

If you're thinking about or in the process of securing small business funding, there are numerous options to consider, including small business loans, lines of credit, and business credit cards. Selecting the right funding will require you to take into consideration each option and how it does or does not meet your financial needs and credit profile, among other things. 

Not sure where to start?  Here are a few of the most common funding types:

Term Loans

A term loan is what most people think about when they hear the term "loan." When you take out a term loan, you receive a lump sum of money, which you're obligated to repay within a certain amount of time, or the term. 

Term loans come in a wide range of amounts and repayment terms. For instance, short-term loans are typically repaid within six to twelve months while long-term lines may have repayment terms as long as ten or twenty years. 

Both traditional lenders (like banks and credit unions) and alternative resources, like peer-to-peer lending or online lenders, offer term-loans. As such, rates, repayment terms, and fees (e.g., origination, application, etc.) will vary from lender to lender. However, most lenders will base each of those factors on a number of variables like your credit score, loan amount, and annual revenue. 

That doesn't suggest that you need to have good or excellent credit to secure a term loan. There are term loans designed to accommodate borrowers with poor credit, though many of these will be secured loans. In that case, the lender requires you to put up collateral (e.g., real estate property, equipment, automobiles) in the event you fail to pay off the loan. As well, certain types of funding can help you build business credit. You can check your business credit score for free with Nav.

Though there are many types of business term loans, many with their own set of requirements and restrictions, they are typically considered to be quite flexible and can help you manage a variety of business costs. This includes things like inventory or equipment purchases, payroll, debt consolidation, or simply a working capital boost. 

SBA Loans

Small Business Administration (SBA) loans, which can be approved for up to $5 million,  are guaranteed by the United States SBA and originated by approved lenders. Because SBA loans are federally backed, they are often offered with lower rates and more flexible terms, making them a prime solution for eligible small business owners. 

The SBA offers numerous loan programs, some of which have loan terms as long as 10 or 25 years. The 7(a) Loan and the 504 Loan, however, are considered two of the most popular options. 

Funds from a 7(a) Loan can be used to manage a variety of business-related expenses, including working capital, debt consolidation, inventory, and equipment. 

The 504 Loan, on the other hand, is limited to project costs associated with the purchase, construction, modernization, or remodeling of real estate property, or to consolidate debt accrued from those activities. 

To qualify for most SBA loans, including the two above, you must have what's considered good credit, typically a 680 or higher, and meet any additional requirements and standards as they apply to the SBA or the specific loan program, this includes size, and revenue standards. 

Business Line of Credit 

In many ways, a business line of credit is similar to a credit card. If approved, you will be granted access to a maximum amount of cash, similar to a credit card limit. However, instead of receiving it as a lump sum, as is the case with a loan, borrowers can draw from available funds as needed, only paying interest on what they use. 

At the end of the draw period, the line of credit will be closed and the account will enter into repayment status. During this time, you'll be required to make monthly payments on the total balance for the duration of the repayment term. 

When it comes to usage, a business line of credit is notably flexible. This makes them a good option for those looking to manage ebbs and flows in cash flow. 

In the past, approval often required the company to have been in business for at least six months and a minimum annual revenue of $25,000 to $50,000. And while that still may be true for some lenders, the rise of online lenders has made business lines more accessible, even applicants who don't meet traditional eligibility standards. 

Business Credit Cards

Like the personal equivalent, a business credit card gives you ongoing access to a revolving line of credit, up to your approved limit. When balances are paid in full by the due date, you can typically escape interest payments. When carrying a balance to the next billing cycle, you'll likely be charged an interest — unless, of course, the card carries a 0% intro APR offer.

There is a slew of business credit cards out there, each of which carries its own qualifications, rates, fees, and benefits. Rates are often closely tied to your credit score, with better credit earning lower interest rates as well as access to prime cards. 

If you're considering using a credit card as a form of small business funding, be sure to review all your options to find the best one based on your creditworthiness, financial needs, and preferred benefits and rewards. 

When used properly, a business credit card can be a great boost to your business — they can help you manage cash flow, pay for unexpected expenses, and build your business credit. Business credit cards also can give you access to rewards programs, added purchase protections, and other benefits, like travel perks. 

Equipment Financing

While many of the funding options above can be used for an array of business expenses, equipment financing, as the name suggests, is used to purchase or lease new or used business equipment. This includes things like commercial ranges, construction vehicles, and office equipment.

Overall, this type of small business funding offers borrowers access to equipment at a relatively low APR, though borrowers with average or below average credit will likely find higher rates and less flexible terms. 

Keep in mind that financing equipment, while certainly a valuable asset when needed, isn't always ideal. This is particularly true if you have a longer repayment term on equipment that quickly becomes outdated. 

Invoice Financing 

Invoice financing, and its cousin, invoice factoring, is a small business funding option that allows business owners to turn their outstanding invoices or accounts receivable into cash. Because it's based on invoices, this is only an option if your business offers goods and services in advance of payment. 

Under this type of agreement, an invoice financing company will give the borrower a percentage of the invoice value upfront, typically between 80% and 90%, though it varies. 

Once the customer pays the invoice, the financing company will give the borrower the remaining funds minus fees. 

This type of funding is often best if you need to free up cash flow as you wait for payment on net-30, net-60, or net-90 accounts. And, since the invoices act as collateral, you may be able to secure this type of funding even if your credit isn't ideal. 

Small Business Grants

Simply put, grants are free money. Therefore, small business grants, which may be issued by federal, state, or local governments as well as private entities, are the ideal funding solution. 

There are hundreds, if not thousands, of grants available to businesses, many of which are designed with certain types of businesses in mind. For example, some grants may be geared towards minority or women-owned businesses while others may be awarded to startup companies, non-profit organizations, or businesses that meet environmental or community enrichment objectives. 

As you may assume, many business owners would prefer free money, and so the grant process is typically competitive. It's also important to note that applying for a grant often means meeting specific deadlines and eligibility standards and waiting through the review and notification process. 

You can find grants in numerous places, including the SBA website, Grants.gov, your state and local government websites, and local business development centers. 

While grants are terrific, securing them can be challenging and often use is restricted. Shoot for the stars and apply for the grants, but it helps to have a contingency plan. 

Alternative Small Business Funding Solutions

Though the aforementioned funding types represent some of the most popular options available to small business owners, there are a few others that you may want to consider along the way, particularly if you're looking for startup funding

Crowdfunding 

As the name suggests, "crowdfunding" is a fundraising effort that draws funds from a pool of investors, be they everyday consumers or entrepreneurs and professional investors. 

If you're considering different crowdfunding platforms, it's important to pay specific attention to your marketing efforts as much of your success will depend on your ability to make your product or services attractive to potential investors. 

Venture capitalists/Angel investors 

Though there are some differences between the two, both venture capitalists and angel investors offer access to funds in exchange for equity in the company. In addition to funding, these investment groups or individuals can also bring to the table valuable connections and industry expertise. 

Choosing the right small business funding companies

With so many options, where should you seek funding first? Here are a few questions you can ask to help you narrow the search:

  • How much funding do you need? Lenders typically set max and min funding limits. Determine how much you need and eliminate lenders who can't accommodate your request. 
  • How quickly do you need funding? Some lenders provide funds within 24 hours of approval; others may have a lengthy application process or release funds weeks later. Determine which lenders are capable of meeting your time-to-funding needs. 
  • Why do you need funding? Some lending options, like lines of credit, credit cards, and term loans may be flexible. Others, like equipment financing and 504 loans are limited in use. Other options, like invoice finances, are designed to meet certain needs, like gaps between payments. Keep that in mind as you narrow your choices. 
  • How is your credit? One of the biggest determining factors in your pursuit for funding is often your credit score. A good or excellent credit score can give you access to the best rates, flexible terms, and numerous options including prime business credit cards. 
  • Poor credit, on the other hand, may limit your options. For instance, a business owner with poor credit may find it's easier to secure funds through invoice financing as opposed to a business credit card. 
  • What's the total cost of the loan? It's easy to assume that interest rates are the biggest indicator of affordability, but the total cost of a loan also includes any fees. Origination fees, prepayment fees, and application fees can increase costs. Always find out what fees you'll need to pay and factor them into your decision. 

Best Small Business Funding Options

There are a lot of great funding options available to those who look, but finding them isn't always easy. We provide numerous funding reviews in our marketplace, as well as an in-depth look at how business financing works, but here are a few of our favorites. 

Business Credit Cards

American Express® Blue Business Cash Card

With the American Express® Blue Business Cash Card, you can earn Earn 2% cash back on all eligible purchases on up to $50,000 per calendar year, then 1%. Currently, the card also has an intro APR offer of 0% on purchases for 12 months, which can certainly help when it comes to financing business expenses. Plus, there's no annual fee, which makes this card a low-risk addition to your wallet. 

Earn 2% cash back on all eligible purchases on up to $50,000 per calendar year, then 1%. Cash Learn More
Capital One® Spark® Classic for Business

If you're just starting out and trying to build credit, getting approved for some of the prime business credit cards can be difficult — many of them require good to excellent credit. The Capital One® Spark® Classic for Business, which is designed for applicants with fair credit, is an exception. This card offers 1% Cash Back on every purchase. Also, there are no annual or foreign transaction fees. 

Capital One® Spark® Classic for Business
Enjoy no annual fee. Earn 1% cash back on every purchase. Build business credit with responsible Learn More

Small Business Term Loans

Kabbage

If you need access to cash quickly, you may want to consider Kabbage, which offers short-term business loans (6 – 12 months) from $500 to $250,000. The application process is quick, and funds can be available in as little as seven minutes. 

Learn more

SmartBiz

Need more time to repay your loan?  Smartbiz, offers term loans from $30,000 to $200,000, with repayment terms from 2 to 5 years and fixed interest rates between 6.99% and 26.99%. As an added perk, Smartbiz also is a marketplace for SBA loans, which means you may be able to do the bulk of your loan shopping in one spot. 

Learn more

Wells Fargo

With competitive rates, prime business resources, and a number of banking and lending solutions,  Wells Fargo has long been known as one of the primary players in small business financing. 

With a loan, you can typically borrower between $10,000 and $100,000 with terms between 1 and 6 years, depending on the product you choose. They also offer lines of credit and small business credit cards, in case you want to expand your funding search. 

Learn more

Crowdfunding

Kickstarter

Kickstarter has become synonymous with crowdfunding, and today it's likely one of the most popular platforms. The process is simple, set your funding goals and market your product, concept, or business to consumers and venture capitalists as you see fit. It's a good platform for a variety of business verticals and you can incentivize in a number of ways, including gifts, discounts, early access, and equity shares. 

Learn more

CircleUp

CirculeUp is an equity-based crowdfunding company, and as such, investors are rewarded with equity in the form of company stocks or shares. To use CircleUp, your business must be considered a consumer brand. And while businesses at various points in their journey can apply, you'll need to have at least $1 million in revenue to snag a spot on their site, so it's often best for established businesses as opposed to startups. 

Learn more

FAQ

Where can I find business funding for startups?

Funding a new or growing business isn't always easy. Some lenders prefer that borrowers meet revenue or time in business milestones, many of which are just out of reach for startups. There are, however, many options to those who seek them out. 

Invoice financing, equipment financing, some SBA loans, and business credit cards are all viable paths to startup funding. In addition, crowdfunding and grants can also provide you the capital you need to forge ahead. 

Is it possible to get small business funding with bad credit?

Though they aren't always easy to find, there are small business funding options for borrowers with bad credit. Secured business credit cards and term loans are designed specifically for borrowers with poor credit. Similarly, equipment financing, invoice factoring can be ideal for borrowers with bad credit. 

That said, your best bet at funding is to improve your credit score. So if you have time, you may want to take the steps to build your credit. You can start by requesting a credit report, addressing any errors, paying bills on time, and even opening and responsibly using a business credit card. 

Can you get business funding with no credit check? 

The answer to that depends on the type of funding you want. Long-term business loans and even most short-term loans require the borrower to undergo a credit check. The same is true for many credit cards and equipment financing options. 

If you have bad credit or would simply prefer to forgo a credit check, you may want to consider crowdfunding sites or one of the small business funding options listed here.

Where can I find small business funding review?

Small business funding is a common need, and so there are plenty of reviews available to those who look. You can find a plethora of reviews on our website, specifically in our marketplace, but that's not the only place you should look.

As you sift through your options, it's best to check numerous financial resource and review sites, including TrustPilot and BBB. It also may be helpful to check the lender's social media accounts and Google reviews before you sign off on a loan agreement. 

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Norton vs McAfee: Which Antivirus software is best for your small business? - Digital Trends

Posted: 19 Jul 2019 11:50 AM PDT

norton vs mcafee antivirus for small business hispanic businessman working at desk

You wouldn't leave your shop or office door unlocked, and neither should you leave your business PC or Mac unsecured against anti-virus threats and other problems. Norton and McAfee offer extensive options for small business owners, and it's important you pick the right software package or subscription for your company's needs. Both companies have made our short list of the best antivirus solutions for small businesses.

A competent antivirus solution is the first line of defense against potential hacks or virus attacks, so you need it to work effectively for you.

Here's a deep dive into the different options available from McAfee and Norton, and what's best for your firm.

What to buy for the solo business

Working as a freelancer or a sole proprietor? In that case, a basic antivirus package should be more than comprehensive enough for you. You don't need to worry about software tools that have remote access or allow for multiple users, and you're likely to want to keep costs down.

McAfee Total Protection is the company's best option for sole proprietors. It costs $35 per year for one device. For the price, you get comprehensive antivirus protection backed up by cloud-based threat analysis so that McAfee can spot anything that appears to be acting like a virus or malware. As a preventative measure, it also offers safe web browsing, warning you of risky websites, links, or files before you load them.

Further features include password management facilities, encrypted storage options, and a comprehensive firewall for keeping your network safe and well monitored. However, there's no VPN service which is a useful extra if you want to remain anonymous throughout your browsing experience, especially if you travel frequently for business.

Norton's best software for a freelancer or sole trader is Norton 360 Standard. We've discussed it before and it's a great piece of software, but it's also more expensive than McAfee Total Protection, and is priced at $50 per year.

For the price, you get comprehensive threat protection and virus monitoring. Norton 360 Standard is able to spot previously known threats as well as spot any patterns that suggest an emerging malware issue. Alongside that is a password manager, webcam access detection, dark web monitoring, and a no-log VPN. The latter is particularly useful, allowing you to browse anonymously wherever you are.

The best option for the sole trader: McAfee Total Protection

If your budget is tight, you can't go wrong with McAfee Total Protection. It's inexpensive but has most of the features you could need. Want a VPN bundled in? Well, then it makes sense to upgrade to Norton 360 Standard. An extra $15 a year for a VPN is a bargain compared to a dedicated VPN client.

What to buy for a small business

When dealing with multiple users and multiple devices, it's worthwhile purchasing a Small Business package. Both McAfee and Norton offer dedicated solutions for a small business with multiple users that require support.

McAfee Small Business Security is $80 for 1-5 users with that price increasing $16 per additional user. The product is essentially McAfee Total Protection spread over multiple devices. It offers comprehensive antivirus protection, cloud-based threat analysis, as well as a firewall for blocking any malicious network access attempts. Its safe web browsing involves a color-coded rating system that alerts your employees of any potentially nefarious website they may be trying to access.

Unlike McAfee Total Protection, it's possible to access and manage your McAfee Small Business Security settings from one central source via a remote management page, making maintenance easy to conduct. It's also easy to add new devices to the account via email, as well as locate, lock, or remotely wipe mobile devices from it.

Norton Small Business offers a similar service to McAfee Small Business Security, albeit at a different price. $100 per year gets you access for 5 devices (slightly more than McAfee's option) but that price rises to $150 for 10 devices, making it lower in cost than its competition.

As before, there's protection against viruses, spyware, malware, and other attacks. Additionally, there's firewall functionality which automatically blocks unsafe incoming traffic. Also, its internet protection system keeps an eye out for suspicious links or content with behavioral learning detecting if a file could be dangerous.

Norton Small Business also allows you to easily locate lost or stolen smartphones with it possible for you to wipe them remotely. There's cloud-based setup and management, too, so that all maintenance can be conducted remotely.

The best option for a small business: Either McAfee Small Business Security for the smallest business and Norton Small Business for larger requirements

Both services are very similar in terms of features, so what should you do? Look to which one is slightly lower in price. If you only require antivirus software for up to 5 users then McAfee Small Business Security is ideal at its low price. Its price rises steadily when dealing with more devices, however, which is where Norton Small Business becomes much more attractive.

What to buy for a growing small business

Advanced small businesses need security software that grows with them. McAfee Endpoint Security and Symantec Endpoint Protection Cloud are the respective options from McAfee and Norton.

In both cases, they offer very similar features to previous antivirus software solutions, but they're designed in a way that makes it easy to deploy them on multiple devices at once. Once installed, management of the users and devices is controlled remotely via a cloud-based setup.

So, what's the difference here? Again, price, mostly. Both services offer a personalized price scheme depending on what you require. Expect McAfee Endpoint Security to cost about $36 per year per user, with Symantec Endpoint Protection Cloud priced at about $28 per year per user.

The best option for a growing small business: Either McAfee Endpoint Security or Symantec Endpoint Protection Cloud

This time around, both services are very closely matched. Symantec Endpoint Protection Cloud is cheaper up until a certain point before McAfee Endpoint Security turns into the more inexpensive option. If the amount of users and devices you require is low, stick with Symantec Endpoint Protection Cloud. Otherwise, switch to McAfee Endpoint Security.

Whichever you choose, you won't be disappointed.

Conclusion

McAfee and Norton offer fairly similar products for small businesses. The key to knowing what's best for your firm is to consider how many users and devices you plan to use antivirus software across. For anyone other than a sole trader, you need a dedicated small business solution. One that offers a plan that grows with you. Both McAfee and Norton offer products with similarly good specifications, with McAfee working out more inexpensive for larger businesses.

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