Business Advice

Taking on debt can be a necessary part of growing a business, but it also comes with its fair share of risks. Rising interest rates, a decline in sales, and even unexpected global events like Pandemics and Supply Chain crises can change the dynamic of financial obligations we took on when things looked stable. So for this small business matter, we're going to talk about taking on debt with Christina Edel.

This article can help you decide whether business coaching is right for you, and offers tips to find a coach who can help you reach your goals.

As a small business owner, finding capital to build your business is one of your top priorities. But if you don't yet have a business credit history and your personal credit history needs some work, it can be difficult to get approved for most business financing options. You can still find a way to get a business loan with no credit check, but it will likely cost you more to do so. There are some business funding options you can pursue that may not require a business credit check. Here's what you need to know about those options and how to improve your chances of getting affordable financing for your company. How a Business Loan Differs From a Personal Loan Some new business owners use personal loans to start a business. Both personal loans and business loans typically require a credit check, but some business lenders may review both your personal credit score and your business credit history. If your business is new, or if you are a sole proprietor, your personal credit history will be more heavily relied upon. Business loans and personal loans differ in the following ways: Collateral: While most personal loans are unsecured, many small business loans require that you put up collateral. Additionally, many commercial lenders also require a personal guarantee, which means that you're personally liable to pay back the debt if your business can't pay. Building credit: Personal loans can be a great way to build your personal credit score, but small business loans are better if you want to build a business credit history. Keep in mind, though, that not all commercial lenders and financing options will report to the commercial credit bureaus. Do your research to make sure you're getting credit for your on-time payments. For both personal and business loans, there are some alternative financing sources that don't require a credit check at all. These loans typically involve some risk, and you’re likely to pay more in interest rates and fees on the loans. Business Financing Options That Don't Require a Credit Check Standard business loans from a bank, credit union or even online lender typically require a credit check. If your credit is less than stellar, these may be out of the question. However, there are other funding options to consider that might be a good fit for your needs. Microloans Microloans are small-dollar loans offered by nonprofit organizations that are designed to help new, small or disadvantaged businesses. These loans often don't require a credit check, and they may even charge low-interest rates or no interest at all. That said, they're typically reserved for startups, and you may need to meet other requirements, such as having family members and friends act as peer-to-peer lenders . Also, loans are typically capped at $10,000 to $15,000, depending on the organization. Vendor Credit If you regularly purchase supplies or inventory from vendors, you may be able to set up a trade credit account with them. This can allow you to pay your bill 30 days or more after your purchase date. In some cases, vendors will report your payments to one or more of the commercial credit bureaus including Experian. That said, some vendors may require a credit check—or at least a history of on-time payments with other vendors —so you may need to shop around to find one that will work with you. Invoice Factoring If your business gets paid by clients through invoicing, this could be worth considering. Invoice factoring involves a small business owner selling an invoice to a factoring company in exchange for an upfront payment based on a percentage of the invoice amount. In return, the factoring company takes over collecting the payment from your client, after which it pays the remaining balance minus fees and interest. Invoice factoring doesn't require a credit check because it's not technically a loan. It can be an easy way to get paid faster for work you've already done, but it's important to note that it could impact your relationship with your client, especially if they pay late or have a poor experience with the factoring company. Merchant Cash Advance A merchant cash advance (MCA) is also technically not a loan; rather, it's an advance on your future sales. In exchange for an upfront payment, MCA providers will take a percentage of your daily credit and debit card sales or a fixed daily or weekly payment from your bank account. MCAs can be easy to get, even with bad credit, because the provider is more concerned about your sales record than your credit history. That said, merchant cash advance APRs can climb into the triple digits if you're not careful, so it's generally best to avoid them in most cases. Make It a Goal to Build Business Credit for the Future Even if you need a business loan with no credit check right now, it's a good idea to prioritize building both your personal and business credit to widen your selection of options in the future. It can also help you qualify for lower interest rates and better repayment terms. Review your personal credit report and credit score to see what steps you can take, such as paying down credit card balances, getting caught up on past-due payments, disputing inaccurate credit report information, and more. You may also opt to get a secured credit card to add a more positive payment history to your credit file. For your small business, make sure you're working with lenders that report your payments to the credit bureaus. Many lenders that don't check your credit don't do this, so you may need to establish your business credit profile before you can start building your business credit. As with your personal credit, it's important for your business to pay its bills on time and avoid overextending itself on debt payments. While you might have a hard time getting a bank loan, you can start with business credit cards and vendor credit and then build from there. About the author Ben Luthi has been enthralled by personal finance and travel ever since he spent time abroad in college. He has worked in financial planning, banking and auto finance, and writes about all aspects of money. His work has appeared in Time, Success, USA Today, Credit Karma, NerdWallet, Wirecutter and more.

What does it take for a new business to succeed? Contrary to popular belief, you need more than a great product and some funding to get your business off the ground. Here's a new business checklist to help you make sure you've got everything covered. 1. A Mobile-Friendly Website: Your Digital Storefront The percentage of people who access websites from their phones and tablets is still on the rise. Therefore, it’s really important to make sure that your site looks good on any device, and still highlights the same essential information you want all of your customers to see. It's no longer an option, but a necessity in today's mobile-first world. Let's take it a step further: Think beyond responsiveness: Ensure your website offers a seamless user experience across all devices, not just different screen sizes. Consider mobile-specific features like click-to-call buttons and fast-loading pages. Optimize for local search: If your business has a physical location, prioritize local SEO strategies to get in front of potential customers searching for nearby options. Embrace visual storytelling: Use high-quality images and videos to showcase your products or services effectively, catering to shorter attention spans on mobile devices. 2. Content Marketing: Attract, Engage, Convert Well-written content is indeed powerful, but go beyond static information. Consider these content marketing strategies: Create diverse content formats: Blog posts, infographics, videos, case studies, and even interactive quizzes can cater to different learning styles and preferences. Establish thought leadership: Share your expertise and insights on industry trends and challenges to position yourself as a trusted resource. Leverage storytelling: Craft compelling narratives that connect with your audience on an emotional level and build brand loyalty. Optimize for search engines: Implement SEO best practices to ensure your content reaches the right audience through organic search. 3. Compelling Calls to Action: Guide Your Audience Don't leave your website visitors guessing what to do next. Craft clear and actionable CTAs that align with your marketing goals. Here are some tips: Use strong verbs and specific language: Instead of "Learn More," try "Download Our Free Guide" or "Schedule a Consultation Today." Place CTAs strategically: Position them where they make sense in the user flow, like at the end of informative blog posts or product pages. Personalize your CTAs: Consider A/B testing different CTAs with different audiences to see what resonates best. Track and analyze results: Monitor the performance of your CTAs to understand what's working and adjust them accordingly. 4. Marketing Beyond Paid Ads: Building a Multifaceted Strategy While paid advertising can be a valuable tool, it's crucial to diversify your marketing approach. Here are some additional ideas: Embrace email marketing: Build an email list and nurture leads with targeted campaigns that offer valuable content and special offers. Engage on social media: Actively participate in relevant online communities, share valuable content, and respond to comments and messages. Partner with influencers: Collaborate with individuals who have established credibility and reach in your target audience. Network and build relationships: Attend industry events, connect with other businesses, and participate in local initiatives. 5. Customer Centricity: The Heart of Success Going beyond simply wanting to help people is crucial. Truly understanding your customers' needs, challenges, and aspirations is key to building lasting relationships. Here's how: Conduct market research: Gather insights into your target audience through surveys, interviews, and focus groups. Track customer feedback: Actively solicit and analyze feedback from customers through surveys, reviews, and social media mentions. Personalize your approach: Segment your audience and tailor your marketing messages and offerings to their unique needs. Deliver exceptional customer service: Prioritize building positive relationships with your customers through prompt and helpful responses. Bonus Tip: Maintain a Good Business Credit Score Maintaining a good business credit score is vital for the long-term health of your company, no matter its size. It directly impacts your ability to secure funding for growth, negotiate favorable terms with suppliers, and even attract talented employees. A healthy score reflects strong financial responsibility, making you a more attractive partner and reducing the risk associated with doing business with you. Equally important is regularly monitoring your business credit report to identify and address any errors or fraudulent activity promptly. These issues can not only damage your score but also expose your business to financial vulnerabilities. Vigilant monitoring allows you to proactively address concerns, protecting your creditworthiness and safeguarding your company's financial security. Bonus Tip: Embrace Agility and Continuous Learning The business landscape is constantly evolving. Be prepared to adapt your strategies, learn from your mistakes, and stay ahead of the curve. Regularly reassess your approach, invest in professional development, and keep an eye on industry trends. Starting a new business can be overwhelming because there are so many things that you have to think about. That’s why it’s important to become an entrepreneur for the right reasons and do something you love. Above all, remember to have fun! Sources: http://www.smartinsights.com/mobile-marketing/mobile-marketing-analytics/mobile-marketing-statistics/ http://www.seo-e.com/online-marketing/develop-strong-call-to-action.htm https://www.sba.gov/blogs/does-your-business-have-marketing-plan https://www.thinkwithgoogle.com/articles/b2b-digital-evolution.html

Business identity theft is on the rise. Here's how to protect your business.

In celebration of National Small Business Week, today’s Guest Post comes from small business influencer Barbara Weltman, who shares insights on how to get money to start a business. Barbara Weltman (@BarbaraWeltman) is an attorney, a prolific author with such titles as J.K. Lasser’s Small Business Taxes and J.K. Lasser’s Guide to Self-Employment, and a trusted advocate for small businesses and entrepreneurs. She is also the publisher of Idea of the Day® and Big Ideas for Small Business® at www.barbaraweltman.com as well as host of a monthly radio show. She’s been named one of the 100 Small Business Influencers five years in a row. It takes money to start a business and get your idea off the ground. Depending on the nature of your business, you may require only a little bit of cash—your seed money—or you may need considerable funds. You can borrow money (debt) or find investors (equity) to meet your capital requirements. Here are some funding options to explore. Self-funding According to the National Venture Capital Association (NVCA), 82 percent of all businesses start with the owner’s personal resources. These can come in a variety of ways: Personal savings. This is the best source of capital because there are no strings attached—no repayments, no interest cost, no timing issues. Credit card borrowing. Using personal credit cards to start a business is pretty common. Sergy Brin and Larry Page did this to start Google in the 1990’s. The biggest downside: the high interest rate. Home equity borrowing. If you own a home that’s worth more than your mortgage, you can borrow with a home equity loan (the lender sets the borrowing limits). The downside: If the business fails and you can’t repay the loan, you could lose your home. Caution: Don’t dip into your 401(k) and IRAs to start businesses. Doing this not only costs you in taxes up front, but if the business fails, you lose your retirement savings. Check out our interview with Christina Edel on taking on business debt >> Loans and lines of credit Don’t expect to walk into your neighborhood bank to get a loan for starting your business. Even SBA loans, which are commercial loans guaranteed by the U.S. Small Business Administration, usually aren’t available for startups. If you have an excellent credit score—680 or better—you may qualify for a personal loan, but interest on such borrowing is high, even in today’s low interest environment. With a good credit score, your business may qualify for a line of credit; your personal guarantee can swing this financing. You only pay interest on the portion of the line you draw upon. For example, if you have a $50,000 line of credit and use $20,000, you pay interest on $20,000. NVCA reports that 41 percent of startup funding comes from loans and lines of credit. Family and friends A rich uncle or a fabulous friend may help you get started by either investing in your business or giving you a loan, as about a quarter of all business startups do. But ask yourself whether your relationships will sour if the business doesn’t succeed and your investor or lender loses money. Crowdfunding This relatively new way to find capital for a business can be done in a variety of ways: mere contributions (with no repayment by you), loans as discussed earlier, or, most recently, equity crowdfunding. All together this source of funding from strangers online accounts for about 3 percent of startup funds, according to the NVCA. Conclusion These are just the most common ways to find the cash to get started. You don’t have to choose just one resource; you can combine your options to raise the amount of money required. For example, you may have your friend invest some money and use your personal credit card to buy equipment or other items needed to open your doors for business. Just make sure you know what you’re getting into so you can succeed.

Starting a solo business is financially empowering, whether you do freelancing to earn extra income or build a full-time enterprise. But along with greater financial independence comes the risk of not being paid. Clients may pay late; some may not pay at all. When your client doesn't pay, what can you do? Late payments from clients happen for a variety of reasons. How you respond can determine whether you get your money—or keep the client. Reacting to a brief delay with the threat of a lawsuit, for example, could damage your client relationship needlessly. On the other hand, failing to follow up could result in hundreds of lost work hours and financial problems for you if your client never pays their bill. The following steps begin with simple reminders and escalate to more significant action. Keep reading for tips on how to prevent missed payments in the future. 1. Resend Your Invoice If there’s been a simple problem—the invoice got lost, the client’s bookkeeper is on vacation—resending the invoice acts as a reminder. Send one as early as the day after a payment was due if necessary. 2. Contact the Client If resending an invoice doesn’t trigger a response, respectfully reach out to your client with an email or a phone call and inquire about payment. They may tell you a payment has already been sent or that one will be issued soon. Make a note of when you should expect payment, along with a calendar alert to follow up again if payment doesn’t arrive as promised. 3. Stop Working for the Client If you sent the client a new invoice and spoke with them about the late payment by phone, it may be time to step up your actions if payment still hasn’t arrived as they said it would. If you’re continuing to do work for them, consider pausing until you receive payment. Continuing to work may just result in a bigger bill—one that you aren’t sure is ever going to be paid. It also takes time away from paying clients. Letting your client know that you can’t continue working without payment may prompt them to act quickly. Are you working on a product, such as a book manuscript or custom cabinetry? Don’t deliver it until you have payment in hand. 4. Send a Debt Collection Letter You can have an attorney prepare a debt collection letter for you or find a templated letter to modify online. A debt collection letter acts as formal notice and documentation that your client owes you money, including how much they owe and when it was due. In your debt collection letter, you might specify whether you’d be willing to set up a payment plan to help your client get back on track or let them know you plan to initiate formal debt collection action. Depending on your client’s reaction or lack thereof, you can send more than one of these letters, escalating the matter’s urgency. 5. Consider Your Next Steps It’s possible your client will come through with payment at any of the previous steps. But if you’ve made every effort to collect payment from your client and they still refuse to pay, you can try taking them to small claims court to recover your money. Be sure to hold on to any documentation, such as debt collection letters, asking the client to pay. You’ll need to prove you are owed the amount you claim by providing contracts, letters, receipts or other information noting the agreed upon amount for the job. You’ll also need to find out what the small claims dollar limit is in your state. You can also look into turning over the debt to a collection agency to collect payment. However, you’ll only see only a fraction of your payment if collections are successful because the agency will take a percentage of the amount collected (which may or may not be equal to what was owed. You may also decide simply to move on. The time and stress required to recoup your loss may not be worth it. If you’ve lost tangible goods, you may be able to write off your loss on your taxes. However, you won’t be able to deduct an unpaid balance for services—the IRS doesn’t allow it. How to Avoid Not Getting Paid in the Future It’s impossible to completely avoid the risk of being stiffed. Even a good client can suffer an unexpected financial downturn or a sudden life crisis, and it can be hard to know whether a prospective client is creditworthy. You can’t eliminate risk entirely but you can reduce it by following a few basic tips: Sign a contract with a payment schedule. Whether it’s prepared by the client or by you, a contract spells out the scope and cost of the work you’re proposing. It can also include a payment schedule with clear deadlines and late payment fees (or discounts for early payment). Especially with a new client, get paid as much as possible up front, or consider breaking the payments up to coincide with specific work milestones. Vet new clients before you take them on. Has a new client been referred to you by someone you know? Have they been in business for a long time or are they just starting? Do they have references you can call? If you’re unsure about a new client, think about the work you agree to as having a credit limit attached to it: Start with a $500 project then increase the size of the projects if things go well. Speaking of credit, you can also check a prospective client’s business credit report. The information in Experian's business credit reports is continually updated, always accessible and includes the Experian business credit score, credit trade payment information, corporate registration, business public records, key personnel, and a lot more. Make it easy for clients to pay. Accepting electronic payments or credit cards may give your clients helpful options to pay on time. You may also consider accepting a payment plan or partial payment from a client who’s having trouble paying an invoice. If you do, though, think twice before accepting future work from them. Building a Stronger Business The more you depend on money from your freelance work, the more critical it is to get paid—in full and on time. When clients pay late or don’t pay, your business and personal finances suffer. You may not be able to meet your business expenses or pay your personal bills. You risk falling behind in monthly credit card and loan payments. You may also have to use business or personal credit to make ends meet while you’re waiting on payments and may be stuck with debt if you’re never paid. Fortunately, most business transactions don’t go this way. By limiting your risk with upfront payments, smaller projects and frequent billing; using contracts that spell out work and payment terms clearly; and following basic steps to collect when payments run late, you can reduce your chances of running into trouble. The risk of lost payments can also motivate you to build a cash cushion for your business—or your personal finances—so a late payment here and there is easier to manage. In these ways, the threat of late payments can make your business and your finances stronger, by making you a smarter business owner. About the author Gayle Sato writes about financial services and personal financial wellness, with a special focus on how digital transformation is changing our relationship with money. As a business and health writer for more than two decades, she has covered the shift from traditional money management to a world of instant, invisible payments and on-the-fly mobile security apps. Gayle began her career as a staff writer for Entrepreneur magazine. As an independent publisher, she edited and produced a series of personal finance magazines for credit union members and THINK, an executive magazine for the credit union industry.

You’ve heard it a thousand times: location, location, location. And sure, if you run a brick-and-mortar small business, details like great traffic and excellent parking certainly improve your possibilities. But regardless of your location, I thought maybe we could talk a moment about “place” and what it means to be a small business rolling into these next years. The Importance of Place for Small Businesses Ever since the COVID-19 Pandemic began in 2020, people everywhere have had to reconsider their relationships with local businesses. It used to just be a sign you’d see in the window: “shop local.” But with lockdowns, unemployment, shipping and logistics delays, and so much more to contend with, people everywhere found themselves having to think about who they wanted to spend their money with and what that meant to them. Before 2020, people might not have thought twice about placing their order with a large online retailer or a global big box store. But as the Pandemic continued, many communities rallied around supporting local businesses like never before. It suddenly became quite clear that without some direct and thoughtful local intervention, some of these small businesses might not make it for more than a few months, and some doors might be shutting forever. What could a small business do? Well, lots, as it turns out. Sean Hopkins opened “Hoppy’s Cantina” in a small northern Massachusetts town a few days before the entire state’s first big virus-related lockdown. He’d run restaurants before--this kind of delay might end up being a kiss of death before he’d even had a chance to fail in all the typical ways. He started posting little videos on Facebook about the kinds of burritos you could pick up via Take Out ONLY. Of course, just a few items were available, but Sean’s Facebook videos sold the heck out of them. His guacamole videos (often complete with singing) made your mouth water, not to mention the incredible pulled pork burritos. Sean’s efforts on his Facebook page drove sales that kept his restaurant alive during lockdown for sure. Local is More of a Badge Than Ever Before It’s a great time to promote your local roots, and people are showing interest in keeping their neighborhood businesses alive. It’s one thing to worry about who has the right price. It’s another to know that a company might vanish, thus leaving people with no local choice, if something isn’t done to keep it that way. All that glitters is not gold, after all. But one caution: there’s not a lot of forgiveness for poor customer service. You might not be able to compete on price, but if you don’t make the buying experience professional, friendly, and very efficient, you might not be able to count on that local support for long. One last detail: share the wealth. Just as you might run a local business, also remember to visit some local restaurants, buy from a few local shops, and refer as much business as possible to your neighbors. It’s most definitely a group effort, and the more people sharing the work, the easier it is to keep more local companies safe. What have you done to make “local” matter even more? About the Author In addition to being a best-selling author and influencer in the marketing space, Chris is a  sought-after keynote speaker and showrunner of “The Backpack Show.” Currently, Chris serves as Chief of Staff at AppFire, providing strategic advisory services to the senior and executive leadership of the company, with a mandate to drive the company’s major initiatives across the organization. He is also President of Chris Brogan Media, offering brand and digital content strategy and business strategy advisory services.       Related content Small Business Storytelling with Chris Brogan

Small business owners may have a small business credit card or even use their personal credit card when they’re just getting started. However, as a business grows, new types of financing that don’t depend on the owner’s personal finances—such as corporate credit cards—may become available. The Difference Between Corporate and Small Business Cards Corporate and small business credit cards can offer a variety of benefits. One of the main reasons companies sign up for a credit card is to empower employees to make purchases on the company’s behalf by using the company card. Using these cards, employees won’t have to pay out of pocket and wait to be reimbursed later. And employers may be able to limit where employees can use the card and how much they can spend, giving them greater control over their business finances. There are some similarities between corporate and small business cards, but they’re not created for the same types of companies. While small business credit cards may be available to any business, corporate cards are primarily intended for large and established businesses. What Is a Corporate Credit Card? Corporate credit cards—also known as commercial credit cards—are credit cards for medium- and large-sized businesses, although there are also some corporate card programs for startups. To qualify, a company must be either registered or incorporated—for example, as a limited liability company (LLC) or an S or C corporation. Card issuers may look at different factors when reviewing a card application, such as the business’s revenue, number of employees, history with the issuer and investors. In some cases, a business may need several hundred thousand (or several million) dollars in revenue to qualify. You may be subject to a credit check before getting a company card, but it won’t be reported to the credit bureaus under your name or impact your personal credit. Instead, the card’s usage and payment history is added to the company’s business credit report. Corporate cards also often don’t require a personal guarantee, meaning cardholders aren’t personally responsible for the debt. Unlike many small business cards, corporate cards are often charge cards rather than credit cards—meaning the company must pay the full balance at the end of each billing period. But similarly to personal and small business cards, some corporate cards offer rewards and have annual fees. Rewards aren’t the only—or even the most important—benefit, however. Companies can request employee cards to easily authorize and track employees’ expenses, eliminating the need for reimbursement requests. Corporate cards may also offer in-depth analytics and integrate with accounting platforms, which can help businesses save time, money and paperwork. What Is a Small Business Credit Card? Small business credit cards are typically more similar to consumer credit cards than corporate credit cards. Some consumer and small business cards even have similar names, fees and rewards programs. And, as with consumer cards, small business credit cards may let you revolve a balance and charge you interest on the unpaid amount. Unlike a corporate credit card, getting approved for a small business credit card can partially depend on the owner’s creditworthiness. If you apply for a small business card, the application might lead to a hard inquiry on your personal credit report. A card issuer may even report the card to the credit bureaus under your name, meaning it can impact your credit—although some only do this if the business misses payments. Small business cards also generally require a personal guarantee. As a result, if the business can’t afford the payments, you could be personally liable for the card’s unpaid balance. However, a small business card can help you keep your personal and business finances separate. The cards may also offer business-specific perks, such as free employee cards and bonus rewards on common business purchases. And, as the primary cardholder, you may be able to set limits on employee cards and determine how you want to use the rewards. Which Credit Card Is Best for Your Business? Most small business owners, entrepreneurs, solopreneurs and contractors will only be eligible for small business credit cards. However, if you work for or run a medium- to large-sized business or a venture-backed startup, a corporate credit card may be a better option. While you could open a small business credit card, a corporate card might give you a higher spending limit, more control over employees’ cards and better analytics and reporting. The ability to finance your business’s operations without being personally liable for the debt can also be a major benefit. Be Sure to Monitor Your Company’s Credit If you run a business and want to open a business or corporate credit card, your business credit score could be an important factor. Additionally, some small business lenders require a personal credit check before they’ll offer you a business loan, line of credit, invoice factoring or other types of financing. You can check and monitor your Experian business credit report, and get insights into how you can improve your company’s credit scores. About the author Louis DeNicola is freelance personal finance and credit writer who works with Fortune 500 financial services firms, FinTech startups, and non-profits to teach people about money and credit. His clients include BlueVine, Discover, LendingTree, Money Management International, U.S News and Wirecutter. Louis lives in beautiful Oakland, California, where he enjoys indoor rock climbing, yoga, and volunteers as a tax preparer.