Monthly Archives: April 2017

Business Loans Tips

As a small business owner, every dollar you save on interest and fees paid for a small business loan is a dollar back into your business. That’s why it’s so important to make sure you’re getting the best deal that your business can qualify for and fulfills your business’s needs.

But with over 44 different financing options, the research involved in finding that best deal and how to get it could take days, if not weeks. That’s not easy, especially when you’ve got a business to run.

To save you time, we’ve put together a list of what we think are the best small business loans for business owners. Check out the list below and sign up for a free Nav account to find out if you qualify.

Funding Circle sits at the top of our list as one of the only online lenders as a lender that has consistenly improved their loan offerings by lowering costs for the best borrowers and expanding what they can offer. Their loans range $25,000 – $500,000 with 1 – 5 year repayment terms. Funding Circle’s interest rates range from 5.49% – 22.79%. Their origination fees range from 0.99% – 4.99%. If you miss a payment, there is a missed payment fee charged at 10% of the total missed payment, and if your payment bounces, there is a  $35 insufficient funds fee.

Businesses can be funded in under two weeks. Funding Circle requires collateral on their loans in the form of a lien on your business assets and a personal guarantee from the primary business owners.

Requirements to qualify:

  • 2 years in business (or qualified franchises)
  • $150,000+ in annual revenue
  • Owner must have a personal FICO score of 620 or above
  • Owner must have a history free of bankruptcies, current tax liens, judgments or criminal activity.

Able has introduced a new lending model to the marketplace, which allows borrowers to crowdfund a percentage of their loan from friends and family in order to receive a lower interest rate. On average, they ask borrowers to find backers to fund 25% of the loan.

They offer loans from $25,000 – $500,000 with interest rates between 6% – 16% plus a 3 – 5% origination fee. Loans can be paid back over 1 to 5 years, and payments are made monthly and equally amortized over the term of the loan. The average APR on an Able loan is 10.9%.

Requirements to qualify:

  • 6 months or more in business
  • $50,000 or more in annual revenue

SmartBiz is an SBA loan provider whose entire application process is online, making it much more flexible process for business owners than many other SBA loan providers. They offer 7(a) loans with interest rates starting at 6% (Prime Rate + 2.75% – 4.75%). The total financing cost or Annual Percentage Rate (APR), will include associated fees: referral fees, packaging and guarantee fees, and estimated closing costs. SmartBiz boasts that their APR ranges from 6.96% to 9.06%.

SmartBiz loans are available up to $350,000. If you need a larger loan, Celtic Bank is another great option that offers SBA 7(a) loans $350,000 – $5M.

Requirements to qualify:

  • FICO SBSS score of 160 or above (get your FICO SBSS score with a Nav Premium Plus account).
  • Must have 2+ years of tax returns filed for the business
  • The SBA has a few additional requirements, including:
    • Business must be a small business. The definition of “small business” will vary based on your industry.
    • Business location must be in the U.S., and some business must be done in the U.S.
    • Applicant must have reasonable invested equity. This means the applicant must own a significant portion of the business (>20%).
    • Must be able to demonstrate a need for the loan, and that the loan will be used for a reasonable purpose.
    • Must not be delinquent on any existing debt obligations to the U.S. government.

How to Star The Best Business Credit Cards

Business credit cards are an underutilized option when it comes to making purchases for your business. In addition to providing a great source for emergency cash, business credit cards offer a few additional perks.

1. Minimize the impact on your personal credit. Businesses tend to make larger purchases than individuals. If you end up with large outstanding balances on your personal card because of business expenses, your personal credit score could take a hit. Use a business credit card that doesn’t report to personal credit bureaus and, as long as you are on time with your payments, your personal credit will not be affected. (Some business credit card companies will report your business credit information to personal credit bureaus. Find out which ones do here.)

2. Build your business credit. Making on-time payments on your card will help you build strong business credit scores, allowing you to secure lower rates and longer repayment terms on business financing, as well as better terms with your vendors and suppliers.

3. Protect your business. Business credit cards offer more protection than business debit cards. They are covered by the Truth in Lending Act, which caps maximum liability for fraudulent purchases at $50.

 

The Best Business Credit Cards

Business credit cards offer a variety of different features from rewards points to miles to freebies. The following are some of this year’s top business credit cards for four popular categories: cash back, travel rewards, low APR/balance transfer cards and credit builder cards.

If the ultimate reward flexibility is what you want, the Capital One Spark Miles card could be a solid pick for your business. Cardholders earn an unlimited 2 miles per dollar spent on all purchases. Miles can be redeemed for travel via any airline, cash back, gift cards and more.

Added benefits:

  1. Unlimited 2 points per dollar spent on all purchases with your card.
  2. Killer bonus offer of 50,000 miles when you spend $4,500 on the card in the first 3 months.
  3. Points can be redeemed for use on airlines or hotels of your choice, plus vacation packages and more.
  4. No foreign transaction fees.

Drawbacks:

  1. $59 annual fee (waived for the first year).
  2. Only available to those with excellent credit.