If you’re reading this, that’s probably what you’re wondering if it exists. That or what the best business card cards are for 2019 (we’ll get to that in a sec).
Business credit cards fill a unique space between personal and corporate business cards.
Personal credit cards are great for improving your personal credit score.
However, if your aim is to improve your business credit, and you’re not large enough to be accepted for (or have a need for) a corporate business card, then a business credit card is ideal.
In fact, depending on the business credit card you obtain, you could improve both your personal and business credit at the same time.
Do business credit cards affect your personal credit score?
Before obtaining a business credit card, it’s important to know how that card will affect both your business and personal credit.
Finance blog NerdWallet contacted 9 of the largest small business credit card companies to find out how each reported activity from their business credit card customers to both consumer (personal credit) and commercial (business credit) credit bureaus.
They found that while most companies reported activity to the commercial credit bureaus, results were mixed for consumer bureaus:
Whether your goal is to improve your credit or not, it’s important to know who you’re getting your business credit card from to understand in advance how that card might affect not only your business but also your personal credit.
Best business credit cards for 2019
So, what’s the highest rated small business credit card? It all depends on what you’re looking for and where your credit score is at.
Below, we’ve organized the best business credit cards for 2019 based on four credit levels:
Excellent credit
Good credit
Fair credit
Bad credit
No matter what your credit score is, we’ve included the best cards available, even business credit cards for those with bad credit.
Within each card’s breakdown, you’ll also find a list of pros and cons to further help you decide which is the right business credit card for you based on other factors such as APR, annual fee, rewards, and sign-up bonuses.
The Top business credit cards for excellent credit
The business credit cards listed below are best for those with excellent credit, ranging from 720 credit score and up.
Bank of America Business Advantage Travel Rewards World Mastercard
BofA’s Business Advantage Travel Rewards card is unique in that it’s a travel rewards card with no annual fee.
The travel rewards rate isn’t as favorable compared to other travel cards with fees, but 1.5 points for every dollar spent along with 3 points for every dollar spent on travel purchases made through BofA isn’t bad.
Pros:
No annual fee
25,000 point sign-up bonus
No foreign transaction fees
0% APR on purchases for first 9 billing cycles
Cons:
Excellent credit required
Other travel rewards cards offer better deals
CitiBusiness AAdvantage Platinum Select World Mastercard
CitiBank’s CitiBusiness AAdvantage card is easily the winner for business credit card if your goal is to rack up airline miles.
First, there’s the 70,000 point sign-up bonus after spending just $4,000 in qualifying purchases within the first 3 months. Then, you get 2 miles for every $1 spent on qualifying business purchases thereafter.
Pros:
Great sign-up bonus
Best card for racking up miles
Flier benefits such as free bag checking, preferred boarding, and 25% off in-flight purchases with American Airlines
Cons:
High credit requirement
High annual fee at $99
APR is on the high end
Best business credit cards for good credit
The business credit cards listed below are best for those with good credit, ranging from 690 – 719 credit score.
Chase Ink Business Preferred Credit Card
Chase’s Ink Business Preferred card is great if you’re a fan of credit card rewards programs.
That’s because the Chase Ink Preferred card offers 3 points for every $1 spent up to $150,000 within a calendar year on advertising, internet, phone and cable service, and shipping and other travel expenses. All other purchases receive 1 point per $1 spent.
In addition, the card offers one of the best sign-up bonuses around: 80,000 points if you spend $5,000 on qualifying purchases within 3 months of opening your account.
Pros:
Great sign-up bonus
Impressive rewards program
Cons:
High annual fee at $95
Only a fit for business owners who expect to use their card for a large amount of very specific business expenses (see above).
Southwest Rapid Rewards Premier Business Credit Card
Southwest’s Rapid Rewards Premier Business Credit Card is another great card if you’re looking to rack up miles or points which can be put towards qualifying travel expenses.
Currently, the card offers a 60,000 point sign-up bonus on $3,000 of qualifying business expenses within 3 months of opening your account. It also offers several opportunities for bonus points such as a card member anniversary bonus (6,000 points) and 1,500 points for every $10,000 spent.
In addition, it offers 2 points per every $1 spent on Southwest, Rapid Rewards hotel, and selected partner car rental purchases.
Pros:
Great sign-up bonus
Good rewards program
Cons:
High annual fee at $99
Top business credit cards for fair credit
The business credit cards listed below are best for those with fair credit, ranging from 630 – 689 credit score.
Capital One Spark Classic for Business
The Capital One Spark Classic for Business credit card is one of our two best picks for fair credit business credit cards.
That’s because the Spark Classic card not only has no annual fee but you pay no interest on purchases if you pay your balance in full for a billing cycle. These two points combined make it an extremely affordable business credit card.
Pros:
No interest if you pay your balance in full each billing cycle
$0 annual fee
More affordable compared to most ‘fair credit’ business credit cards
Cons:
APR is on the high end if you pay late
Amazon Business American Express Credit Card
A recent entry into the business credit card space, Amazon’s AMEX business credit card offering has no annual fee, competitive APR, and a good intro APR offer.
The card also offers two unique features in a $100 Amazon gift card upon approval and 3% cash back or pay interest fee for purchases at Amazon.com, Amazon Business, AWS, and Whole Foods Market (with 1-2% cash back at other locations).
Pros:
One of the most affordable business credit cards with a 60-day no interest offer and no annual fee
Cons:
Rewards program not comparable other business credit cards unless you shop frequently with Amazon
Best business credit cards for bad credit
The business credit cards listed below are best for those with bad credit, for anyone at 629 credit score or below.
Capital One Secured Mastercard
The Capital One Secured Mastercard is one of two ideal picks for business owners with bad credit.
It’s technically not a business credit card. However, if you’re careful about keeping your spending on the card to strictly business expenses (for tax purposes), it can start you off in the right direction towards being accepted for a business credit card, especially Capital One’s own Spark business credit card.
Pros:
Unlike most secured cards where the amount you deposit becomes your credit limit, depending on creditworthiness, you can make a deposit of $49, $99, or $200 for a credit limit of $200
No annual fee
Cons:
It’s a secured credit card, so you’ll need to make a deposit depending on your creditworthiness before you can begin using the card
Wells Fargo Business Secured Credit Card
Wells Fargo’s Business Secured Credit Card is the second of two great secured options for those looking to get started with business credit cards.
It’s uniquely fitted for business owners looking to improve their credit spending power as Wells Fargo will regularly review your account and, upon developing a good track record with them, move you up to an unsecured business credit card.
Pros:
Wells Fargo makes it easy to move up to one of their unsecured business credit card options
1.5% cash back on every $1 spent
Cons:
$25 annual fee
No liability protection
Secured vs unsecured business credit cards: What is the difference?
If you have bad or fair credit especially, you may have encountered the terms secured and unsecured quite a few times when researching business credit cards.
There’s a big difference between the two types of cards, so it’s important to understand the difference.
Here’s a breakdown of secured vs. unsecured credit cards:
What is an unsecured credit card?
An unsecured credit card is the typical credit card structure you’re likely already familiar with.
Based on your credit score, you’re approved for a particular credit limit. As you use your balance up, you’re required to repay that balance based on a specified interest rate.
Why are they called unsecured credit cards?
Secured in finance terms refers to whether or not there is cash or a cash equivalent which a lender has received to guarantee or “secure” repayment of the amount.
In this case, a credit card company is offering you credit without requiring anything to secure the amount lent.
What is a secured credit card?
A secured credit card is primarily used as a tool for improving credit.
That’s because, as opposed to unsecured credit cards, secured cards require a cash deposit to “secure” the card for the credit card company. These deposits typically range from $250-500.
That might sound pointless, but it’s ultimately the same thing as a typical unsecured credit card after making the deposit. And, most importantly, it gives you a reliable way of improving your credit.
By doing so, if you have bad credit, you can use a secured card to improve your credit score and eventually “move up” to an unsecured business credit card.
How to get the most from your business credit card
No matter what small business credit card you decide to get, it’s important to know how to make the most of it.
There are a few things you’ll want to keep in mind once you’ve been approved for a new card.
Here are a few helpful reminders:
Find out when your introductory APR ends: Many small business credit cards have introductory offers. However, these offers have an expiry date that is critical to take note of as it means your interest will change from one month to the next. Remember to check over your first statement to take this expiry date down.
Remember to qualify for your card’s sign-up bonus: Similarly, many small business credit cards have sign-up bonuses as well and these bonuses can be well worth the effort. Review the qualification factors and make a note of what you need to do to make sure you take advantage of any and all bonuses.
Deduct fees and interest charges when you file taxes: Many business owners aren’t aware that you can write off both interest charges and fees from business credit cards on your taxes. It might not amount to much but it’s welcomed savings that is yours for the taking.
Pay your card on time: This is critically important as a business credit card is an opportunity to improve your credit further… or hurt it if you’re late on your payment even once.
You’ll especially want to heed that last point if you’re acquiring a new business credit card to improve your credit score.
Few things can help (or equally hurt) your credit like racking up a balance on a credit card and being late on your payment. So, pay special mind if you’re obtaining a business credit card to improve your credit score and always pay on time.
Whether it’s implementing background checks for new employees or accessing court records, a background check is a useful way of obtaining information that can help you make smarter decisions.
But what exactly can you use a background check for? Are there free background checks? And what are the best background check sites?
Below, we’ll answer all of those questions and more so you know not only the basics about how background checks work online but what the best background check sites are for you to use based on your needs.
Do free background check sites exist?
If you need to run a background check, the first question that likely pops into your mind is: can I run a background check for free?
Despite the apparent advertisement for free background checks from sites like Backgroundchecks.org and even the DMV (where you’ll be redirected to BeenVerified), free background checks don’t exist.
If anyone claims otherwise– be wary.
What if you do it yourself?
Having said that, if you want to know how to check your background, or the background or someone else, there are things you can do which may allow you to obtain the same or similar information if you’re willing to do the work yourself.
Ultimately, it all depends on what you’re looking for.
Here are some ways (and sources) for obtaining various types of background information for free with a little detective work:
LinkedIn: The professional’s social network, LinkedIn is great for obtaining information about their employment history and academic record. Just keep in mind that LinkedIn profiles are essentially online resumes, so the information may not be 100% accurate.
Court records: Most court records are public, including criminal convictions, marriages and divorces, name changes, and bankruptcies. The only downside here is that acquiring information this way can take some time.
Sex offender registry: All U.S. sex offenders are required to be added to the U.S. Sex Offender Registry, so if this is what you’re searching for, the U.S. Department of Justice website is free and search can be done via address if you don’t have the person’s name.
While there is quite a bit of information you can acquire online if you’re willing to do the work, you can pay to obtain a proper background check online in minutes.
But first, what kind of information can you obtain from a background check?
What shows up on a background check?
What information appears on a background check depends somewhat on where you obtain a background check.
However, this information usually appears in a background check:
Criminal record (Most notably for employers, misdemeanors, and felonies)
Sex offender registry appearance
Global homeland security appearance
Warrants
Drug screening
Military records
Employment history & eligibility
Education
Bankruptcies
Lawsuits
Traffic and DUI records
Motor vehicle information
License verification
Credit report
Contact information (Phone number)
What can you use a background check site for?
The information above is a lot to take in. You might already know exactly what you need a background check for.
However, you might just want to get as much information as possible and want to know what kinds of uses a background check can be utilized towards.
Here are some common reasons for obtaining a background check:
Employee verification: Keep in mind that specifically licensed background checks must be used for pre-employment screenings. Regular background check sites cannot be used for employment checks.
Roommate verification: Need to rent out a room or considering sharing rent with someone to afford a pricey area? A background check can help you make a smart decision in terms of both credit and criminal records.
Date lookup: Sites like Tinder have made it commonplace to get together with perfect strangers online. Clearly, that can be a bit scary and you want to make sure you’re not running into something sketchy.
Property lookup: If you’re considering purchasing a property, a background check by address can help you find out all kinds of useful pieces of information that will help you make a smarter decision.
Court records: Court records, as mentioned in the previous section, can help you uncover several important pieces of information that can affect everything
Self-check: Sometimes, it’s not other people you need to know more about, it’s yourself. Maybe you received a notice that some new record was added to your report, or maybe your just curious. Either way, a self-check is common.
Family lookup: Some use background checks to locate missing or distant family members they’ve lost contact with as they’re a very effective way of obtaining contact information.
How to pick a good background check site
There are a few important factors to consider when looking for a good background check site.
Keep these things in mind when deciding where to obtain a background check from:
Background options
Most background sites have basic search options such as people lookup, property lookup, criminal record lookup, sex offender search, and contact information search such as reverse email and phone number.
The best background check site for you is the one that has a search based on the information you’re looking for, that way you know you’re not only getting the information you need before paying but that you’re not paying more for it than you should.
Accuracy of information
It’s hard to know for sure if all the information on a given report is accurate unless you obtain multiple reports. Sometimes, you might find that preferable.
However, it’s important to review how a background check site gathers information and how often it’s updated.
Turnaround time
Sometimes, you need information from a background check quickly. This is important to know in advance because some services take longer than others.
However, in general, most background check sites offer either very quick or instant access to results. It mostly depends on what and how much information you’re requesting (contact information may be immediate while court records could take longer).
Pricing
Pricing is an obvious inclusion, but it should be mentioned. Every background check site charges differently, most notably based on the information they provide.
The most important thing to consider here is exactly what information you need and whether another site offers less information in general, but still exactly what you need (in other words, less filler stuff you didn’t need).
Customer service
Some background check sites offered fantastic customer service and live phone or chat interaction to help answer your questions. Others, not so much.
A mark of good customer service is whether you find it easy to obtain answers to your questions or if it feels like they purposely made it difficult.
This should include easy access a customer service representative over the phone (live chat is a nice plus, but not required) and a comprehensive FAQ page that answers basic questions.
The 5 Best background check sites
So, what are the best background check sites?
In the previous section, we offered a few helpful factors to consider when picking what background site to choose.
The further help that decision, we’ve reviewed what we consider to be the top background check companies.
In no particular order, the 5 best background check sites are:
For criminal record checks: BeenVerified
BeenVerified is a great all-around background check service.
However, where BeenVerified shines is in criminal background and related information checks.
If you’re looking for information such as a criminal record, sex offender registry, judgments, liens, bankruptcies, county records, case numbers, or conviction and arrest details BeenVerified is a great service.
Pros:
Super comprehensive reports
Great for criminal records and similar information
Affordable pricing (Less than $23 / Month)
Cons:
Pricing options are limited and they require signing up for a subscription to obtain background check information
Instant Checkmate has incredibly comprehensive reports, possibly the most comprehensive.
However, where Instant Checkmate stands out is in two areas: family search and value for multiple reports.
Instant Checkmate offers a family search function, making it very easy to locate missing or distant family members if that’s your purpose.
In addition to this, Instant Checkmate offers the best value if you need multiple reports. For $35, you can obtain as many background check reports as you’d like, where most sites charge slightly more than that for a single report.
You have to pay a small fee ($2.99 as of writing this) for each report you download. However, even including this, the site offers a much more affordable service for multiple reports.
Pros:
Can obtain multiple reports with a subscription for the price of one from competing sites
Easy to search for information
High report accuracy
Cons:
Need to pay $2.99 per report download
No option to purchase single reports (only subscription)
US Search is a solid all-around background check service.
However, where US Search shines is in their value.
Not only are individual reports an option, where many background check sites require a subscription, but reports are also on the lower end at just $39.95 per report.
In addition to this, you can purchase a basic ‘people search’ report for just $2.45 if all you’re trying to do is locate someone. If this is your primary reason for obtaining a background check, US Search is the best value by far.
Pros:
Can purchase single reports
Low price
People search for just $2.45
Can download reports for free
Cons:
Reports not listed chronologically, which can appear somewhat confusing
Truthfinder doesn’t specialize in a particular type of background information, but it’s background checks are some of the most comprehensive we found.
Truthfinder allows you to obtain all the typical information you can get from a background check in addition to running an in-depth web search that can pull information such as social media profiles and a substantial list of emails.
This is information you can obtain manually through your own effort. However, it makes Truthfinder’s service more comprehensive and convenient if you don’t have the time or simply would prefer the convenience.
In addition to this, Truthfinder has a well-designed Apple and Android app which you can use to obtain their comprehensive background checks from your mobile device, making Truthfinder one of the best background check sites in terms of convenience.
Pros:
Mobile app for convenient access to background checks on any device
Comprehensive web search including social media profiles
Cons:
Hard to find pricing information and structure can be confusing
Ultimately, the best background check site is the one that gives you exactly what you need when you need it.
For that reason, it all depends on your needs.
But by using the information we’ve provided above, you not only have a list of high-quality background check sites to start with but a list of factors that will help you identify which is the best fit for you.
Small businesses are the lifeblood of the US economy and below are the small business statistics every business owner needs to know. The overwhelming majority of businesses in the United States are classified as small businesses, and almost half of the employees in the United States are working at these kinds of operations as well.
The face of small business in the US is changing, however – and it’s changing faster than ever before. A lot of these small businesses are moving online or at the very least taking full advantage of everything technology has to offer. Here are some pretty interesting, exciting, and insightful small business statistics which include things from how many businesses are going to be started this year to how the economy will change and even how many businesses have to face challenges to get an unsecured business loan and much more which will help you better understand the lay of the land in 2019 and beyond.
Interesting Business Statistics in 2019
How many small businesses are there in the US?
According to the US SBA, there are 30.2 million small businesses in the United States. This is 99.9% of ALL US businesses.
Source: SBA Report
How many people work for small businesses?
The SBA also tells us that there are 58.9 million people in the US working for a small business, representing 47.5% of everyone working in the United States as of 2018.
Source: SBA Report
Will there be more small businesses in 2019 and beyond?
Almost certainly. The US economy is growing faster than ever before, the employment rate is lower than ever before, and the growth of small businesses in the US continues to explode.
Source: SBA BEA 2018 Information
How old are small business owners in general?
33% of small business owners are in their 50s, with another 21% at least 60 years old or older. That represents more than 50% of all small business entrepreneurs in the United States today. Young people are getting into the swing of things frequently though, with nearly 20% of small business entrepreneurs younger than the age of 39.
Source: Guidant Financial
What kinds of small businesses are being opened?
Service businesses lead the way, with 11% of all new small businesses being related to the business service industry. Food and restaurant businesses are next in line at 10%, with help, beauty, and fitness businesses and general retail just behind at 7% apiece.
Source: Guidant Financial
How much money does it take to start a small business today?
Most small businesses in the US will need anywhere between $2000 and $50,000 to get started.
Source: Business News Daily
Where are small business owners finding employees?
56% of small business owners report difficulty finding the right employee, and 57% report that they still depend on word-of-mouth and referrals to staff their businesses. 31% post on social media, 28% post on online job sites, and 12% still use newspapers.
Almost 60% of all small businesses have yet to build an online presence or even set up a website. Almost 20% of small business owners without a website have no plans to go online anytime soon.
Source: GoDaddy Annual Report
Do small businesses see the internet as an advantage?
75% of all small business owners online see internet marketing as an effective or very effective tool to win new business.
Source: MediaPost Research
Has the online/e-commerce market been tapped out?
Internet traffic around the world in 2020 is anticipated to be 95 times higher than it was in 2015, with more people – and customers – jumping online than ever before.
Source: Cisco Research
Are small businesses handling their own marketing or leaving it to professionals?
71% of all small business owners are taking care of their own marketing (online and off) rather than outsourcing the work to freelancers or agencies.
Source: Linchpin Research
Small Business Financial Stats
How often are banks approving loans for small businesses?
Major banks are approving small business loans at a 25.9% rate, with local banks and credit unions approving loans at a 49.4% rate – higher than any other point in decades.
Source: Forbes
How much money (on average) are small businesses asking for from lenders?
The average small business owner is only looking for between $60,000 and $80,000 from traditional lenders.
Source: Fundera
How much money do small businesses in the US make annually (on average)?
On the average, small business owners in the US make between $34,000 a year and $75,000 a year. 86.3% of small business owners report making less than $100,000 a year, and 30% say that they don’t pay themselves a salary at all.
Source: SmallBizTrends.com
How many small businesses in the US are “bootstrapped” or self financed?
Fully 75% of all small businesses in the United States are self financed or “bootstrapped”, using existing cash flow to build and grow operations in the early stages. This is the number one form of financing used by most small businesses and startups.
Source: Entrepreneur.com
How many small businesses fail every year?
Fully 1/5 of all small businesses fail in the first year and nearly 50% of small businesses fail within five years. Only about a third of small businesses survived 10 years or longer.
Source: BusinessKnowHow
Why do most small business fail?
46% of small businesses report their operation failed because they weren’t sure of what they were getting into. 30% report a lack of experience and managerial support. 13% report catastrophic failure related to neglect, fraud, and outright disaster, and 11% report losing passion in the project.
Separately, 82% of small businesses report failing because of cash flow problems that stem from many of the issues we highlighted above.
Source: ISBDC.org
How many entrepreneurs have started another business before?
47.1% of all entrepreneurs that succeed for at least five years in their first business go on to start a second business. Of these serial entrepreneurs, the average amount of companies that these repeat business owners create sits at three.
41.4% of all small businesses are started by entrepreneurs that are building their first company.
Source: StartUpBros.com
Small Business Marketing Stats
How are small businesses finding customers?
68.8% of small business owners use online and off-line marketing to find new customers. 28.9% reported that they do not market online and off-line, but market with one approach or the other.
Source: Micro Business Marketing Mix Report
How important is online advertising?
51% of small businesses today use social media to grow their business, and 65% consider social media advertising to be effective. $45.4 billion will be spent on search engine advertising and pay per click advertising, almost doubling the amount of money spent in 2014. Google is still the king of the ring when it comes to online advertising, with 88.56% of all online searches conducted on that platform.
Source: Iron Paper and Statista
How important is mobile advertising and marketing?
Mobile device internet usage overtook traditional laptop/desktop usage in 2018 for the first time, with mobile devices being used 51.3% of the time to go online. 80% of internet users around the world have a smart phone, and 56% of all internet traffic is generated by mobile devices.
Source: StatCounter and Smart Insights and Similar Web
Is email marketing still effective?
By the beginning of 2019, 54% of the world’s population will be using email. Google passed the 1 billion monthly active users on Gmail in 2017, and anticipates that number to hit 2 billion users by the time 2020 rolls around.
Email marketing also has a return on investment of 122% – four times the return on investment of social media marketing, paid online advertising, and traditional direct mail marketing campaigns.
Source: Lifewire and MediaPost
What about social media marketing?
A million brand-new social media accounts are created by people every day. Two thirds of the world’s population (with internet access) has an active Facebook account. More than $40 billion are expected to be spent on social media marketing campaigns by the end of 2018.
On top of that, 64% of all small business owners use social media for business purposes. Social media marketing from small businesses has doubled over the last year, and is expected to double again in 2019.
Source: Social Media Today and Business Insider and Adobe
Are mobile applications critical for small business success?
47% of all small businesses are likely to have a mobile application developed for them by the end of 2018. Smart phone conversion rates are up to 64% compared to traditional online advertising, and 78% of mobile searches for local businesses resulted in a sale.
The Internet and the resulting Fintech revolution has brought many advancements to the lending and investment space across the globe.
Crowdsourced alternatives to both lending and investing have connected the global population on a scale, and in a way, that’s never really been seen.
Sure, crowdfunding isn’t exactly a new concept. Some suggest the Statue of Liberty was crowdfunded.
And the same can be said for peer-to-peer lending, which has been done for ages (if you’ve ever let a friend borrow money, that’s essentially peer-to-peer lending).
However, sites like Kickstarter for crowdfunding and Prosper for P2P lending have revolutionized the old concept in a big new way.
Crowdfunding in the U.S. alone for 2017 has grown to $17.2 billion and is estimated to have grown to nearly $34 billion for 2018:
And U.K. P2P platform Orca says that “In the first half of 2017 the market experienced a 59% market growth rate when compared to the same period in 2016,” with the industry itself surpassing $13 billion in cumulative lending.
So, what exactly are these popular crowdsourced lending methods, how do they differ, and how might they help you get the funding you need for that new business or product idea?
What is crowdfunding?
Crowdfunding is often used for the collection of new crowdsourcing funding methods now available to entrepreneurs and business owners. However, it’s really just one method of doing so.
At its simplest form, crowdfunding is the act of eliciting contributions for the creation or completion of a project.
Most notably, this has been used by entrepreneurs on sites like IndieGoGo and Kickstarter to acquire the funding necessary to create an innovative new product:
However, it’s also been used to acquire funding to self-publish a book, create a comic or game, or fund a film.
The benefit here is that the entrepreneur gets the capital they need without having to pay back investors.
Typically, this rewards-based form of crowdfunding offers an incentive like early access or one of the first beta models of the product in exchange for a contribution of varying size, with larger rewards available the larger the contribution:
In addition, platforms tend to require a funding “goal”: the target amount you need to fully fund your project.
If you hit your funding goal within a specified amount of time, you’re given the full amount of the funds you’ve generated and pay that platform a small fee in exchange.
It’s then your job to follow through on delivering those rewards and keeping your new backers informed of your progress.
However, despite all these kinds of crowdfunding, rewards-based, which we just covered, and equity-based are by far the most common.
As opposed to the rewards-based crowdfunding which most people think about when they think of crowdfunding, equity-based crowdfunding involves a large pool of investors contributing to a person or organization in exchange for equity.
Ultimately, it’s up to what you want to give in exchange for the crowdsourced capital: rewards, which cost time and money, or equity in your company.
What is peer-to-peer lending?
Peer-to-peer lending (or simply P2P), is similar to equity-based crowdfunding in that a group of people invest money in an individual or business.
However, where they differ is that with P2P that collective pool of money, comprised of small investments from many investors, is offered as a loan and investors receive a return with interest instead of equity:
As with rewards-based crowdfunding vs. equity-based crowdfunding, the decision between the three comes down to what you want vs. what you’re comfortable giving up.
Peer-to-peer lending vs. Crowdfunding: What’s the difference?
We’ve touched on the difference between P2P lending and crowdfunding a bit so far, but here’s a clearer breakdown based on the pros and cons of each and from the individual or organization’s perspective:
While some of these crowdsourcing methods differ in their difficulty to obtain funds, each is subject to the same structure: you must have a sound business, product, or project idea and be able to present it effectively in order to attract backers or investors who are willing to invest in you and your idea.
Is peer-to-peer lending possible with bad credit?
If peer-to-peer lending looks attractive, you might be wondering if it’s possible to acquire a peer-to-peer loan with bad credit.
Peer-to-peer loans don’t always have a minimum credit requirement because they take into account many other factors than just credit score and history.
However, every platform is different and many do require a minimum credit score of 600, which is low by comparison of most lending vehicles, especially bank loans which often require 700+.
The best crowdfunding sites
There are now countless crowdfunding sites available online that promise to offer a platform to fund your big idea or next entrepreneurial project.
However, when picking a crowdfunding platform it’s important to go with a site that has a history of successfully funding lots of projects.
These are some of the best:
1. Kickstarter
The original platform that made crowdfunding so popular, since its launch in 2009, Kickstarter has now funded nearly 160,000 projects for 16 million people with $4.2 billion pledged, more than any other crowdfunding platform.
While there are a wide variety of categories, the site has become most well known for funding artists, filmmakers, musicians, designers, and inventors.
Similar to Kickstarter, Indiegogo offers the ability to crowdfund your next big business idea. To date, they’ve raised over $1 billion for nearly 700,000 projects.
Where Indiegogo differs is that they also offer a marketplace with the projects of many of their most popular crowdfunding campaigns.
Where Indiegogo also differs is in the fact that campaigns don’t need to have a set deadline or fundraising target. A project can be open indefinitely until you raise the money you need for your campaign.
Patreon, a platform based on the old-school patronage system which artists as far back as the medieval Renaissance used to support their craft, differs from other crowdfunding platforms in two ways:
It’s focused on supporting creatives continuously and less on funding individual projects
Funds are pledged on a recurring basis, either monthly or per-creation (per-video, article, book, collection of illustrations, podcast, etc.)
In exchange for pledging a small amount per month (most supporters give just a few dollars), reward tiers are offered which function similar to Kickstarter and other crowdfunding sites.
WeFunder is centered around funding small business ventures, allowing you to fund any project from $50,000 to $50 million for everything from a restaurant to a tech startup.
Where WeFunder is also unique is that all fees are charged to investors with nothing charged to entrepreneurs.
Similar to crowdfunding, there are several great peer-to-peer lending marketplaces.
Here are some of the best:
1. Prosper
Prosper is to P2P lending what Kickstarter is to crowdfunding. It’s the very first peer-to-peer lending platform in the U.S. and to date says it has organized over $14 billion in P2P loans to nearly 900,000 people.
Prosper offers loans up to $40,000 with a 3-5-year repayment plan and at a fixed interest rate. They also off no repayment penalties.
Founded by 3 ex-Googlers, Upstart is unique in that it uses an entirely different system to assess risk and approve borrowers using artificial intelligence.
The result? Upstart claims that borrowers save an average of 24% compared to typical credit card rates.
Loans are from $1,000 – $50,000 on either a 3 or 5-year repayment plan and with no repayment penalty.
Kiva is unique in that its mission is to alleviate poverty through funding small business ventures (with $1.3 billion given in loans to date across 81 countries and counting).
It does that, in part, by offering P2P loans up to $10,000 at no interest. Yes, absolutely no interest.
When creating a campaign, you’re given the option to invite friends and family to contribute then your story is released to Kiva’s 1.6 million individual lender base until you’re fully funded.
The Fintech revolution has brought with it incredible changes to business in the 21st Century.
But perhaps one of the most radical changes has been the rise of crowdsourced funding in the form of crowdfunding and peer-to-peer lending.
While banks were busy closing their doors, the world opened up and became more connected than ever before, allowing for individuals to invest in businesses and creative ideas they believe in or are excited by and for the consumer to become the investor.
Whether you’re an established business with a new product you’re trying to launch or an entrepreneur with a brand new invention you’re trying to generate funding for, crowdfunding and peer-to-peer lending are both great options to consider depending on your resources and goals.
What are the top trending business ideas for 2019?
There are countless developing industries and ripe new business spaces developing throughout the world. However, as the Internet matures, certain industries, skillsets, and spaces stand out above others as unique opportunities based on one or more factors.
As is the overarching trend in the 21st Century, most of the business ideas below can be home-based and many can even be started with little startup capital.
Here are the top 10 trending business ideas for 2019.
1. Skill trade
In an unexpected 21st Century resurgence, many of what were rare and obscure trade skills are now not only profitable but their goods desirable.
Sites like Etsy and Amazon have made it possible to take a trade skill and build a successful business around it:
Here are some examples of skills which are now in demand:
Carpentry
Woodworking
Welding and metalworking
Construction
Masonry
What’s better than being able to create a business around a trade you have a passion in while being your own boss at the same time?
2. Software development
According to the U.S. Bureau of Labor Statistics, demand for software development will increase by 17% annually until at least 2023.
Considering it’s one of the most in-demand skills, that makes any business attached to software development and engineering a great choice for the foreseeable future.
Examples include:
Software development and engineering
Network engineering
Hardware or software technician
If you already have experience as a software developer or engineer you can start your own company and begin offering your services on sites like UpWork.com as a freelancer while growing your client base and expanding your team:
With countless skills and services relevant to software development being in high demand for the foreseeable future, and the high rates those services command, software development and related fields are not only one of the safest bets out there but one of the most profitable.
3. Subscription box services
In 2018, subscription box services exploded in popularity. Amazon even began offering subscription boxes and marketing them prominently:
A business model rather than a particular industry, many businesses can make use of the subscription box model, and even be entirely based on a subscription box model, to create a more secure, recurring income that the business might otherwise not have.
Here are some example product categories that make for great subscription boxes:
Makeup and other beauty products
Pet
Toys and collectibles
Food
4. Amazon FBA
The largest online retailer in the world is growing faster than ever and they’re giving you the chance to get in on a piece of that pie through their Amazon Seller program:
On Amazon, you can sell an original product or inventory of products which Amazon already has listed.
In addition, while you can pack and ship orders yourself, by opting in to Amazon’s Fulfillment-by-Amazon (FBA) program, Amazon will take care of shipping, packing, and returns for you for a small fee. This makes the process of selling on Amazon surprisingly simple and straightforward.
5. Virtual reality
While many industries have yet to feel the effects of virtual reality (VR) technology, experts believe that virtual reality will become a primary form of communication in the near future, making this a potentially highly lucrative business to get a foothold in before it explodes.
In fact, according to a report from Statista, by 2020 the global VR industry will exceed $40 billion.
Because VR is expected to change so many aspects of communication and entertainment, there are a nearly endless amount of businesses which can and likely will spawn from the use of VR tech.
Some of these include:
Digital tools for social and business communications
VR workplace training programs
VR product showcases
Platforms for VR education
Theatres for VR films
VR gaming software and hardware
Apps which utilize VR tech for a variety of uses including wardrobe fitting, meditation, gaming, communication, sightseeing (VR travel)
The possibilities are nearly endless and not all businesses based on VR tech need to know how it works. As more companies develop their VR tech that tech will be made more readily available and easier to afford for businesses who want to use it (such as in the case of apps).
6. Online education and consulting
Have something you’re great at? Someone else might be interested in learning what you know or paying you for your advice.
Online education has become a hugely profitable space and isn’t slowing down anytime soon. According to Stratistics MRC, the online education market has now grown to over $165 billion and will continue to grow to a projected $275 billion by 2022.
Sites like Udemy and Teachable allow you to take what you know and build a course around it, making money from teaching what you’re good at.
And if that doesn’t interest you, consulting is another booming space that is worth looking into.
For a fee, companies and individuals may pay you for your advice on a variety of topics, assuming you have experience and a track record of results.
Common consulting-related industries include:
Health and fitness
Business and marketing
Branding
7. Senior care services
The first baby boomer hit retirement age in 2011. From then and until the end of the next decade in 2030, the remaining baby boomers will all enter retirement, who make up an astounding ¼ of the entire U.S. population.
According to a survey by the American Association of Retired Persons (AARP), 90% of seniors plan to continue living at home well into retirement as opposed to living in assisted living centers.
That might sound like wishful thinking, but baby boomers are much more well-off financially compared to previous generations. Plus, when you consider the number of seniors who suffer from a variety of health and mobility-related conditions, the opportunity of senior care services becomes clear.
8. Home renovations
If construction is your forte, home renovations and remodeling is a niche that is worth looking into.
Home renovations are slated to boom due to the increasing number of retiring baby boomers. In addition to this, if you’ve ever been in a position where you needed a renovator, you’d know that finding a good one is difficult and they often keep booked schedules, so getting the one you want when you want them is tough. This means the space is always open for new talent to swoop up those extra clients.
The only difficulty with construction-related businesses is the need for startup capital. Fortunately, you don’t need much for home renovations and obtaining a construction business loan to get you off the ground is easier than ever.
9. Food trucks
Food trucks have enjoyed a hot streak for more than a decade now.
What once seemed like a food lover’s fad that was destined the sputter out has now been cemented as a natural development of the food and restaurant industry that is here to stay.
Food trucks are great for a few reasons, the most important being that they allow aspiring restaurateurs the chance to start their own food joint without the heavy investment.
Food trucks, by comparison, typically require $50,000 including supplies, as opposed to the $275,000 which the average restaurant requires, and this cost can quickly rise:
If you’re lucky enough to be able to secure a business loan for your restaurant, congratulations. However, most young chefs and home cooks who have dreams of opening their own restaurant don’t have the resources necessary to generate that amount of capital.
Plus, by building a successful food truck business, you’re far more likely to be able to acquire investors who see what you’re doing and are willing to invest in you venturing from food truck to bonafide restaurant (after all, you now have a customer base and a proven menu), making it the perfect first step towards starting your own restaurant.
10. Social media management
What was once a collection of familiar advertising strategies business owners could use to market their business has now become an entirely foreign landscape which requires different strategies and a new set of skills.
The Internet era has brought a lot of wonderful things to the world. However, it’s also left many businesses in the dust of newer, younger organizations with team members who grew up in the social media era.
Countless businesses aren’t taking full advantage of their social media potential, even a decade after the Facebook era began. This has created an incredible opportunity for anyone looking to learn social media marketing and management and offer those services to small businesses.
The world is changing quickly, but the opportunities are ripe
As new technologies are developed that look to change the way we work and communicate, new opportunities and trends will continue to develop.
Fortunately, while challenges exist, so do opportunities for you as a business owner to take something you’re great at or have a passion for and build a business around it.
Nowadays, everyone’s trying to get in on the opportunity to gain exposure for their business on the world’s largest retailer.
In 2018, Amazon reported over $11 billion in profit, their greatest number to date. As still the sole standing behemoth in the Internet retail space and growing rapidly, any business that sells a physical product who isn’t on Amazon is likely to be left behind over the coming years (if they haven’t been greatly affected already).
If you’re an established business with a proven product, you’re in the best position to make the most from selling on Amazon.
All you need to do get started on Amazon is set up your Amazon Seller Central account, put up your listings, and learn how to market and fulfill orders and you’re good to go. And that’s exactly what we’re going to help you with today.
In this guide, you’ll learn:
How to create an Amazon Seller account
How to list your products on Amazon
How to market and get paid
Including bonus sections where you’ll learn how to get funding for your Amazon store as well as tips for selling on Amazon.
So, if you’re interested to learn how to make money on Amazon by listing your products, you’ve come to the right place.
Let’s get started!
How to Sell on Amazon: A Step-by-Step Guide
In this section, we’ll take you through everything you need to know to sell on Amazon.
This includes three primary steps with several sub-steps:
Step 1: How to create an Amazon Seller account: We’ll talk about setting up your Amazon Seller Central account and your Amazon Seller profile.
Step 2: How to list your products on Amazon: Here we’ll show you how to get your listings up plus help you choose how to fulfill orders by comparing Amazon’s FBA program vs. merchant fulfillment.
Step 3: How to market your product and get paid: Here we’ll break down everything you need to know to maximize your earnings from Amazon including advertising with Amazon and getting paid.
First, let’s start by creating your Amazon Seller account so you can get access to Amazon Seller Central. Once there, we’ll walk you through listing your products.
Step 1: How to create an Amazon Seller account
Selling on Amazon can be a time-consuming process, though well worth it. However, setting up an Amazon Seller account takes only a few minutes.
Once there, you’ll be asked to fill in some basic information including your:
Business name and address
Phone number
Credit card
Bank account
And tax information
Begin here by entering your legal business name and fill in the abovementioned information on the proceeding pages:
Once sign up is complete, you’ll be asked to complete your Amazon Seller profile.
Set up your Amazon Seller profile
Your Amazon Seller profiles both current and potential customers a place to access information about your business including your:
Business description
Shipping, return, and refund policy
And provide feedback
Make sure to fill in as much information as possible. More than just being thorough, a full-fleshed out Seller profile looks more professional than a profile page with very little information.
Once all information has been entered, you’ll now have access to Amazon Seller Central and be able to list your products.
Step 2: How to list your products
Now in Seller Central, it’s time to start adding your products information. Once you’ve done that, all that’s required before your products show up on Amazon.com is to submit the listings for Amazon’s approval.
Listing your products with Amazon is pretty straightforward. If the product is already located on Amazon.com (if you sell office supplies, for instance), you’ll only need to upload a few basic pieces of information such as inventory and the condition the product is in.
For most Amazon sellers, you’ll likely be creating a new listing. In which case, there are a few pieces of information you’ll need to add/upload:
UPC number: This is a unique identifier typically used by retailers to track inventory.
SKU: The SKU is a unique number you create to identify each individual listings.
Product title: Here you’ll decide what you want your product to be titled. This is how your product will be titled on Amazon.com when customers search and view your listing.
Product description: Amazon offers several sections for product description including one section that appears at the top of every Amazon listing as bullet points:
And another area further below that for a larger section of text:
Product images: High-quality images and, if possible, video are essential for a quality Amazon listing.
Amazon search terms: These terms are specific to Amazon’s search function and will help increase your exposure when visitors search for a relevant product. It’s suggested that you test relevant search terms out in Amazon’s search bar first to find terms with the most relevant product listings.
Alternatively, if you already have products listed on an ecommerce site such as Shopify and rather not have to retype much of the information you already have there, you can link that account and pull in several pieces of information including your product descriptions automatically.
Once you’re done filling in all relevant information and submitting, it may take up to 24 hours for the upload to process. But, once done, your listing will be live and you can view it in all its glory!
In addition, if there’s anything not to your liking on your listing page, provided it’s your own unique product, you’re able to edit your listing information at any time.
Choosing how to fulfill orders: Amazon FBA vs. Merchant fulfillment
Arguably the most important decision you’ll make when setting your products up on Amazon is deciding how to fulfill your orders.
Fortunately, for most business owners, it’s an easy decision that requires the least amount of effort from you compared to much of the rest of the work involved in getting set up.
There are two ways you can fulfill orders with Amazon:
Amazon FBA: FBA, or “Fulfillment by Amazon” is the ideal option for most vendors. Amazon retains stock of your products in its warehouses and will automatically fulfill orders when they arrive. All you have to do is ship the product to Amazon and handle post-order tasks such as managing reviews, returns, etc.
Amazon FBM: FBM, or “Fulfillment by Merchant” requires you to fulfill orders when they’re received. Essentially, you’re doing everything you’re used to when shipping orders to a customer outside Amazon but with a few more requirements in terms of packaging and other options.
When it comes to deciding which fulfillment system you use, for most sellers it’s a no-brainer. Merchant fulfillment has some benefits, most notably the fact that you keep more of the profit by not having to pay fees associated with Amazon’s FBA program.
In addition, you can more easily slip in flyers and discount codes to try and get customers coming back. This is something you can do through the FBA program as well, but depending on your product that may be more difficult or impossible. These two benefits, combined, make FBM a good choice for small businesses or those who already have a very small profit margin (however, as we’ll talk about in a moment, FBM can cost you sales).
However, the benefits of Fulfillment by Merchant essentially stop there. FBA is preferred by most sellers because Amazon takes much of the work off your hands, which you can use to turn around and invest in more marketing or something else worthwhile.
How Amazon FBA works
The process with Amazon’s FBA program works as follows. First, your part of the process involves just two steps:
Pack your items using Amazon’s packing guidelines: Multiple copies of a single product can be packed together, you simply must notate the quantity when packing based on Amazon’s guidelines.
Ship the items to Amazon’s designated warehouse: These will be provided in the shipping guidelines.
Once your part is done and the product has arrived in Amazon’s warehouse, Amazon takes over. They will:
Check your shipment and activate your product so that it’s now available for sale on Amazon.com.
Store your product in their warehouse
Ship orders as they’re submitted using the product in stock
Process a payment to you based on your collective Amazon sales every 2 weeks
To summarize, with Amazon’s FBA program they not only activate your product but store your inventory and ship your orders, both of which can save you a considerable amount of time and money.
However, another benefit of Amazon’s FBA program is the increased Prime availability they offer all products which you fulfill through FBA.
Amazon wants to control their shipping process, which allows them to maintain their stellar customer satisfaction levels. By shipping your product themselves they’re able to do this, hence why they offer such a big incentive to use the FBA program versus fulfilling orders yourself.
Because so many of Amazon’s customers opt for the free 2-day shipping made available to Prime members, this benefit can lead to a great increase in sales which can outweigh Amazon’s FBA program fees.
Amazon FBA pricing
While Amazon’s FBA program has many benefits, there are also fees attached to the program which Amazon collects in exchange for 1) storing your inventory and 2) shipping your orders.
Monthly inventory fees: The first of two major types of fees, Amazon will charge you to keep your inventory in their warehouse.
Amazon fulfillment fees: Amazon fulfillment fees are also charged based on the weight of your product for everything attached to fulfillment including packing, shipping, and customer service inquiries.
However, it’s important to note that there are other general fees associated with selling on Amazon which all sellers must pay, whether using Amazon’s FBA or FBM fulfillment program. These fees include a listing fee and subscription fee if you’re signed up for Amazon Pro.
To know exactly how these fees break down, all you have to do is review your seller’s report after making a sale. With that, you can add your cost to advertise, calculate your profit margin, and adjust from there. We’ll talk more about that in the next section.
Step 3: How to market your product and get paid
Now that your products are live on Amazon.com, it’s time for the real work: marketing and maximizing your profit.
Amazon is a huge site with a ton of traffic, but that potential for massive sales also comes with a ton of competition. And because of the heavy competition you face selling on Amazon, you need to be smart about how you market your product.
Most importantly, don’t just expect your product to sell because it’s on Amazon. It doesn’t work that way. Without a quality listing and the proper marketing, your product will get drowned out among a million other listings that outperform yours.
However, with the proper marketing, selling on Amazon can be extremely worthwhile.
Market your products
Marketing your products on Amazon and generating sales comes down to 3 major points:
Creating a quality listing that converts
Generating customer reviews
Using quality, frequently tested and optimized ads
(Long-term) building an email list
There are several sub-points and strategies that can help you sell better on Amazon, however, when it comes down to it these are the cornerstones.
A quality listing that converts
Without a quality listing, all the advertising dollars and general listing exposure in the world aren’t worth much.
Amazon has already worked endlessly to create a well-structured page that convinces people to buy. However, you need quality conversion-minded copywriting and great photos (and video, ideally) to maximize your conversion rate and stand out among your competition.
Ample customer reviews
Before you freak out, know that you don’t need a million reviews to compete against other brands.
If another brand has several hundred or thousand reviews, it helps, but all you need to really get rolling and start competing is a few reviews with a preferably 4 ½ star average (preferably, 10 or more).
Getting reviews for your listings can be a slow process. However, if your product is of a high quality and you commit to great customer service, you’ll begin to gather steam in time.
Keep in mind that Amazon’s sellers policy is constantly changing (and they’re very serious about enforcing it), so it’s important to check Amazon’s documentation if you’re unsure whether a method for getting reviews is against their TOS.
Optimized ads
Advertising is more important than ever on Amazon. With recent changes to critical “suggestion” (AKA “also bot”) sections being changed to new advertising real estate, Amazon is more pay-to-win than ever.
However, this can be a great opportunity for you as a new Amazon seller because this gives you the chance to compete sooner, provided you’re willing to invest in advertising with Amazon.
Amazon’s advertising program is vast. There are banner ads at the top of most searches:
Banner ads within search listings themselves:
In addition to this, on product pages there are now several places you can advertise, giving you the chance to pay to be featured prominently on the product pages of your competitors, similar products, or products which are frequently bought along with your product.
One example is just below your bullet-point description near the top of the listing:
Another is in the right sidebar of every listing:
And another which was previously populated using an Amazon algorithm that showed you similar products you’d like is now strictly sponsored advertisements as well:
As with Facebook, YouTube, and Google advertising, the only way to find out what works best is to test your ads regularly and consistently optimize. However, by investing time into advertising effectively on Amazon, you can greatly increase your sales.
In fact, nowadays it’s very difficult to get your sales ranking up to page one (where the best-selling products are and, therefore, where you want to get to) without advertising, making it all the more important.
Building an email list
Speak with any major seller on Amazon (particularly small businesses), and they’ll tell you that building an email list is the single most important thing you can do to increase your Amazon sales long-term.
As noted, this is a very long-term strategy. However, to have a group of current and previous customers which you can market to on a regular basis through an intimate format such as email can’t be beat in terms of revenue vs. work invested.
Additional strategies and marketing points
By no means is this all you can do to increase your sales on Amazon. However, these are the evergreen, major areas you need to invest the majority of your time into.
For example, many brands like to launch their products with a bang to trigger Amazon’s algorithms and quickly bump their product up to the first page within days.
However, the strategies which allow you to do this are constantly having to be modified as Amazon alters its policies and how it operates, so take that with a grain of salt and be careful about doing anything that could put you at risk of violating Amazon’s TOS.
How to price your product effectively
Now that you have a better idea of what it takes to get started and successfully launch your products on Amazon, it’s time to make sure you’re priced effectively.
There are a lot of tools online which you can use to compare prices across different products, however, they’re not required. All you need to make sure you’re pricing your product properly is to do a quick search directly on Amazon.
First, compare prices across the entire first page of your product and jot them down. This is a search for manila file folders, letter size, 100-packs:
Depending on your product, you’ll have a mix of premium and lesser-known brands and low and high price points. Generally, lower price-point items will sell faster while higher price-point items will sell slower.
Across the first page of the above search, there were price points from roughly $10 to $30 for the exact same item (give or take differences in quality between brands).
Typically, it’s better to start at a higher price point so you can maximize profit as opposed to thinking you have to put the price at rock bottom from the get-go just to be competitive. That might be the case depending on competition and the product, but start high first and test your results.
It’s more about a quality listing and great advertising than a low price, so if you’ve got those two boxes checked off and you’re generating reviews, you can still sell with a higher price point and come away with a much higher profit margin.
Review your profit margin
Because selling on Amazon incurs additional fees you don’t typically have to pay when selling something in-store or on your business’s site, it’s important to review your profit margin and continuously work to widen that margin.
There are two primary ways you can maximize your profit margin:
Optimize your advertising to reduce cost while maintaining or increasing results
Reduce the cost to produce the merchandise
The likelihood is, you’re constantly working to reduce the cost of production. So maximizing profit typically comes down to reducing ad spend.
This can be done by continuously optimizing your ads over time. Given enough time, it’s common to be able to reduce the CPA (cost per ad) while at the same time increasing results.
To review your current cost breakdown and calculate your profit margin on Amazon, use Amazon’s Seller dashboard or, similarly, the Amazon Seller app. By reviewing your individual product sales, you can see your entire cost breakdown. Add in your production cost and you’ve got your profit margin.
Get paid
Getting paid with Amazon is easy. Amazon will process an ACH payment on a bi-weekly basis automatically. Nothing is required on your end.
However, for those who prefer or need more frequent payments, there are services which offer daily or weekly payouts in exchange for a fee for added flexibility, such as Payability:
Payability collects a 2% fee based on your Amazon sales in exchange for expediting your bi-weekly payouts to daily transfers. There are no additional fees or repayment terms attached to the service.
The only conditions required for being approved for Paybility and other similar services is 90 or more days of history selling on Amazon and more than $2,000 monthly revenue.
Amazon Seller fees
We talked about Amazon FBA fees and calculating your profit margin earlier.
If you’ve already reviewed your detailed product sales reports, you’re likely already aware of most or all of the fees listed below.
However, they’re important to take into consideration when calculating what you’ll be taking home.
The basic (Non-FBA) Amazon Seller fees are as follows:
Monthly seller fee: This fee varies depending on if you’re on the Pro plan or the basic individual seller plan. For Pro plan owners, you pay $39.99 per month. For basic plan owners you pay $0.99 per sale.
Monthly storage fee: Each month you’ll be charged a nominal fee based on the inventory Amazon holds for you in their warehouse(s).
Pick and pack fee: This is the fee Amazon charges for them to pack your product and ship them to your customers.
Referral fee: Generally the largest of Amazon’s fees charged in exchange for levying Amazon’s customer base, this is typically 15% or less of the product sales price.
Return processing fee: A fee charged to sellers in exchange for Amazon processing order returns.
Most of the above fees are nominal, however, they can add up. Despite this, the sales potential that Amazon affords more than makes up for the cut they take in your profit.
How to get funding for your Amazon store
Selling on Amazon requires you maintain a consistent stock of inventory.
Worst case scenario, you get stuck without inventory and not only miss out on sales but your sales rank which you’ve worked so hard to build up gets hit in the process.
Fortunately, there are several options available which can serve as useful back ups in case you’re ever low on inventory and won’t get paid quickly enough to purchase more before running dry, including Amazon’s own Amazon Lending program.
Amazon Lending
Established in 2011, Amazon Lending offers loans to Amazon sellers for as little as $1,000 and as much as $800,000 with competitive interest rates based on your sales volume and repayment term.
The only downside to the program is that it’s by invitation only. You’ll know if you’re eligible for the program when you receive a message in your Amazon Sellers inbox like this:
With Amazon Lending, the funds you receive can only be used to purchase inventory which you’ll sell on Amazon. They cannot be used for any other business expense or purpose.
However, if that’s what you’re in need of, and you have enough history and sales volume on Amazon to receive an invite, it may be the ideal funding method when you need capital to produce inventory.
Alternative lending options
I know what you’re thinking: what if you’ve just started on Amazon and haven’t received an invitation to Amazon Lending?
Even if you have an established business history, you won’t be able to use Amazon Lending, so you’ll need to look elsewhere when you need funds to cover inventory expenses, whether due to seasonality, an unexpected spike in sales, or any other reason.
Here are a few alternative financing options that are ideal for product-centric businesses needing access to funds for inventory expenses:
Business line of credit
If you have a recurring need for capital for a reason such as seasonality, a business line of credit may be the perfect solution.
With a business line of credit, you get access to a continuous pool of credit which you can tap into any time you need it, assuming you pay off what you borrow.
Short and medium-term loans are very much like a traditional loan: you receive a lump sum and pay that sum back with interest, with the only difference being whether the repayment term is 3 months to 2 years (short-term) or up to 5 years (medium-term).
Short and medium-term loans are ideal if your need for funding is not recurring such as due to a sudden influx or spike in sales from an increased product ranking or high-profile exposure.
Amazon might be a profitable platform for most business owners, however, it also takes a lot of work to make the most of your time and marketing dollars spent as well.
That’s why we’ve provided a few tips below to help get you started:
1. Keep up on the latest trends and changes
Setting up an account on Amazon takes patience (but can be handsomely rewarded). However, even more patience is needed to keep up with the frequent changes that Amazon makes to its platform as a whole.
Amazon is constantly refining its system, to the point of frustration for many of its sellers. They change how sales pages are structured, how marketing works (they recently revamped how ads work and where they appear in the most recent shakeup), and what they require of its FBA merchants.
However, investing the time to keep up with these changes is almost always worth it. Amazon only continues to grow and shows no sign of slowing down, making your efforts to sell on Amazon more valuable over time.
2. Experiment, experiment, experiment
Amazon provides a ton of great features to its merchants as part of is Amazon Sellers program. This, in conjunction with the complexity of the platform, means you’re rewarded for frequent experimentation.
Things you can experiment with include:
Listing copy and descriptions
Product pricing
Imagery and video
Ad price, location, copy, and imagery
Review generation strategies
Make sure you’re not only experimenting frequently but keeping tabs on what works, what doesn’t, what has worked for other currently successful Amazon sellers, and what future improvements you might be able to make based on all this.
3. Provide “Wow” customer service to maximize the power of reviews
Warren Buffett himself has said that providing the kind of memorable experience that your customers can simply describe as “Wow” is one of the major keys to business success.
When selling on Amazon, you have the opportunity to generate feedback and reviews from buyers. A lot of it will be positive and some of it will be positive. No matter what the feedback, you need to have a system in place that both generates customer reviews and handles negative reviews during the rare occasion that you review them.
For most sellers, this means following up with customers a week or two after purchasing. Amazon does this automatically, however, these automated emails are typically ignored by buyers who are used to seeing them in their inbox.
Many suggestions for dealing with negative feedback exist, but one of the best is simply to respond to that negative feedback or review immediately and offer a resolution based on what they state the problem is.
Representing your brand on Amazon is critical for business success
On the Internet, websites act as real estate and digital retailers as something akin to major malls or department stores. By comparison, if Amazon were a department store, it would probably take up a space equivalent to a small state– and it’s getting bigger.
Learning how to represent your brand and make money on Amazon is critical if you hope to be successful moving into the future. We hope this guide serves you in helping get your Amazon presence off the ground and doing just that.
Running a business takes stamina, gumption, meticulous planning, and (of course) money. You have many fixed and variable costs, such as rent and utilities, inventory purchases, professional fees, and employee wages. Are your business expenses leaving you high and dry?
Whether you have a negative cash flow or want to take precautions, here are some steps you should take to decrease your current small business expenses.
How to cut business expenses
If you want to increase business profits, you likely can’t depend solely on increasing revenue. Focus your efforts into reducing costs to improve cash flow and encourage small business success.
Here are six relatively easy ways to cut expenses in your small business today.
1. Analyze your current expenses
Before you can make changes to your spending strategy, you need to know where to cut back on costs. Analyze your current expenses and look for areas you can either decrease spending or eliminate.
Reference your records, such as accounting books or receipts, to examine your expenses. Small business income statements also list out your expenses. Create and analyze your income statement to see where and how you are spending money.
Two main expense areas you may want to examine are your overhead costs and cost of goods sold (COGS). Overhead costs are expenses that support your business but don’t directly generate revenue, such as rent. Analyze your COGS (e.g., raw materials) to determine how much you spend to produce goods or provide services.
Compare your current and past data to see whether your expenses are increasing or decreasing between accounting periods. Pay attention to seasonal trends and brainstorm ways you can cut back on costs.
2. Get rid of costs you don’t need
After you have an idea of where your business spends money, you can cut back costs or eliminate unnecessary expenses. Some areas you might reduce costs in are utilities, labor, advertising, and professional fees.
Better manage your utilities to eliminate unnecessary costs. Check out ways to prevent wasting electric, gas, and water consumption. For example, you may notice that your electric bill skyrockets in the summer because of air conditioning. Consider relying less on the air conditioning. If you usually set the AC to 67 degrees, you could try setting it to 72 degrees to save money on your utility bill.
For many businesses, having employees is a top expense. You can cut labor costs by reducing employee hours. Or, you might give employees more responsibilities instead of hiring additional workers.
Instead of spending thousands of dollars on small business advertising campaigns, take advantage of social media marketing. Social media is generally free, with paid options that might be less expensive than other advertising methods. Use social media to engage with customers and potential customers, promote your small business, and place targeted ads.
Lastly, examine your professional fees and determine whether you can use less expensive alternatives. If you exclusively use bookkeepers and accountants, consider using software to manage simple payroll and accounting tasks.
3. Shop around for new vendors
Another way you can cut back expenses is to compare what your current vendors charge you to other vendors. A new vendor might be eager for your business, making them more willing to offer you a deal.
When shopping around for new vendors, consider buying wholesale. Wholesalers can offer you items in bulk at lower prices than individual products. But before buying wholesale, verify that you will use large quantities. Otherwise, you could end up wasting products and your money.
4. Practice life cycle costing before purchasing
Getting used equipment might be a way to save money upfront, but will it cost you down the line?
When it comes to cost-cutting, one of the top pieces of advice centers around purchasing used, inexpensive equipment. Although buying used equipment is a great way to save money upfront, you should also take its other costs into account.
To avoid purchasing an asset that’s inexpensive upfront and costly over time, practice life cycle costing.
Life cycle costing estimates how much you will spend on an asset over time. Life cycle costing looks beyond an item’s purchase price and considers other expenses like installation, maintenance, and disposal fees.
If you’re trying to cut back on costs, it might be easy to look at two price tags and choose the lowest option. Instead, compare your options and forecast how much they will cost overall.
5. Consolidate or refinance your loans
Did you fund your business by taking out loans? If so, you know how expensive monthly loan payments can be. Consider debt consolidation or refinancing to reduce business expenses.
If you have multiple loan payments per month, consider consolidation. Business debt consolidation combines multiple, smaller loans into one large loan. By consolidating your loans, you can lower your monthly payments. You can make one monthly loan payment instead of making multiple payments.
Refinancing loans is the process of taking out a new loan to replace a current loan. Loan refinancing can get you lower interest rates and better payment terms.
6. Better manage your inventory
Failing to track your inventory accurately can lead to poor purchasing decisions and money down the drain. Not to mention, damaged or stolen inventory (shrinkage) can be costly for your small business.
To avoid inventory shrinkage and overstocked shelves, you must effectively manage your inventory. Record inventory in your accounting books when you make purchases and sales.
If you lose high amounts of inventory to shrinkage, consider implementing a new production process and being proactive against employee and customer theft.
Do you order too much inventory? If your shelves are always overstocked, consider purchasing inventory in lower quantities. You can monitor which items take longer to sell to help guide your purchasing decisions.
Gone are the days when a business owner would default to taking their taxes to a professional.
Now, sophisticated tax software can, in many cases, perfectly handle all of your tax needs, requiring less time and money than if you were to go with an accountant or other tax professional.
That’s not the case for everyone, as a more complicated tax situation may still require the careful hands and knowledge of an expert, whether that includes writing off the interest you’ve paid on a loan (whether a secured or unsecured business loan) or filing for multiple businesses at once.
However, if you have a straightforward tax situation you can get a lot of mileage from using software instead.
Still, as a business owner, you know how important it is to make sure you’re doing things right.
Not just for the sake of getting Uncle Sam everything he’s owed so you stay out of trouble but to make sure you get every break and deduction possible.
That’s why we’ve gathered a list of the absolute best in small business tax software.
But first, a few important points to note.
Things you should know about self-employed taxes and tax software
As a small business owner, it’s important to know everything that’s required of you with regards to tax filing and the implications on your small business tax rate.
For example, if you’re listed as a sole proprietor, you need to report your profit and loss where you report your income.
The cool thing about most tax software options is they help you do this automatically without more than a few minutes of extra work on your end.
However, it is important to note that this might require you to purchase a higher level package– basic might just not cut it for your tax needs.
And a higher level package means more money.
In many cases, though, this will pay for itself in the form of time saved not having to complete this extra work manually.
Again, your case may be unique. So keep that in mind.
TurboTax is easily the most robust of any small business tax software. If you’re unsure of what to go with, you can’t go wrong with TurboTax.
The software is incredibly simple and easy to use and they offer personalized assistance directly from the software of their SmartLook app.
TurboTax is generally the most expensive of the options on this list, however, if you have a bit of a more complex situation, you really want to use software to do your small business taxes, and you don’t mind paying a little more, this is probably your best option.
Cost breakdown:
Online version: (Schedule C return filing available for all versions below)
Deluxe: $59.99*
Premier: $79.99*
Self-employed: $119.99* (Get this if you’re filing personal + business at the same time)
Desktop version:
TurboTax Basic (for Schedule C): $49.99*
TurboTax Business (for C corporations, S corporations, multi-member LLCs, and partnerships): $119.99*
Audit services:
TurboTax offers free audit guidance. However, for $44.99 (at the time of filing your taxes, not available after) you can purchase their Max Assist and Defend add-on for audit defense.
TurboTax and Quickbooks work together
It’s important to note that Quickbooks users can import data to the desktop version of the Home & Business edition of TurboTax, which can save you a lot of time and headache.
A (Quick) Note on Online vs. Desktop Software Versions
Keep in mind that not all software on this list will have a downloadable desktop version of the software.
Online software offers a lot of flexibility and no real downside, so there generally isn’t much need to get the desktop version unless you’re partial to keep your tax filing data in your own files.
While a bit harder to use, H&R Block’s tax software is noticeably cheaper than TurboTax.
However, the software offers the unique benefit of having easy access to countless local H&R Block offices, which you can stroll into if you prefer to speak with someone in person about properly filing your taxes using the software.
And as with TurboTax, H&R Block offers both an online and desktop version of the software.
Cost breakdown:
Online version: (All returns)
Self-employed: $74.99*
Software download/CD version:
Premium (for Schedule C): $64.95*
Business (C corp, S corp, multi-member LLCs, and partnerships): $79.95
Audit services:
H&R Block tax software doesn’t offer full audit defense, however, it has a unique audit assistance program for $19.99, including live one-on-one contact with a tax professional who will guide you through the process.
TaxAct lies in the middle range of pricing for tax software. It has a basic interface compared to some of the cleaner options such as TaxSlayer and TurboTax, and nothing the more robust tax software doesn’t have, however, there are a few notable benefits.
TaxAct guarantees your refund amount in case of potential errors in addition to offering import capability for your previous year’s taxes to streamline the process and useful planning tools.
Cost breakdown:
Online version: (For all returns)
Freelancer: $59.95*
Premium: $69.95* (Only version with audit defense)
Software download/CD version:
Freelancer: $99.94*
Audit services:
TaxAct offers comprehensive audit defense by purchasing its Premium version for $69.95.
TaxSlayer is one of the most affordable small business tax software on the list and it has a very clean, easy to use interface. Like TurboTax, you can also submit questions to tax professionals to make sure you’re dotting all your i’s.
The one big downside of TaxSlayer is that it only supports Schedule C. So, so there are no options for C corps, S corps, or multi-member LLCs.
Cost breakdown:
Online + Software download version: (All returns)
Self-employed: $47*
Audit services:
Like TurboTax, TaxSlayer offers free audit assistance with every return. However, no audit defense option (add-on or not) is available with the software.
Drake Tax is easily one of the most robust software available. With a comprehensive autofill system that reduces the work on your end, several comparison report tools, and multi-state filing ability (without paying extra to file your state taxes), there are several reasons to consider Drake Tax.
However, most will find Drake Tax’s software a bit complicated to navigate compared to the other options mentioned
Also, their pricing tiers are a bit confusing (their cheapest option allows you to pay in bulk for 15 returns at a time, see below) and require you to pay more in the beginning compared to other software.
So, only consider it if you’re already very familiar with filing your business taxes and don’t mind investing in one software now which you’ll use into the future.
For $44.95, Drake Tax offers one of the most extensive audit assistance options available. If you have a more complicated tax situation but you’re resolute about filing your taxes yourself, this could be one of your best options.
It’s never been easier to file your business taxes
It’s truly never been easier to file your own small business taxes with the extensive collection of high-quality tax software available to business owners.
Take the time to identify your particular business’ needs and wants and then select the tax software that best fits your needs.
And, while you’re at it, now that you’re ready to file your business taxes, check out our small business tax filing tips to get the most out of your next return and learn how you can write off the interest on a business loan and other cool tips for next tax season.
By Nathan Abadi – President and founder of Excel Capital. In collaboration with Tsheets.com
As a father of 3 and the President and founder of Excel Capital I’m no stranger to the sacrifices business owners have to make.
I have learned over the years;
It’s important in both family and business to be present and provide strong leadership, however, balancing between both can prove difficult. Neither seem to get the attention they deserve.
Sometimes, running a small business has required me to sacrifice time with my family to keep the business running smoothly.
But I’ve had to make other sacrifices as well.
When starting the company, I didn’t take a salary for an entire year to build up the foundation, which meant almost cleaning out my savings account and taking a gamble on what I believed in for the long run.
As a business owner, you have to take responsibility for not only your family but all of your employees and their families as well.
It’s a big weight that rests on your shoulders which most people never consider before going into business.
However, taking this responsibility seriously will make you a more effective leader and increase trust with your team.
As a business owner, you don’t have a set schedule. When a job needs to get done, you have to devote however much time is necessary to complete it. Overtime, weekends, and even missing special occasions becomes your norm.
And, sometimes, the time and resources you invest don’t always offer an immediate payoff.
All these things taken together, owning a business requires a delicate balance of time and other resources that can be difficult to manage. But one thing is for certain: the chance to be your own boss and pave your own way makes it all worth it.
New Data Sheds Light on the Sacrifices Small Business Owners Make to Succeed
To celebrate the hard work and dedication of business owners everywhere, April 29th through May 5th marks National Small Business Week.
And to honor the occasion and raise awareness, TSheets by Quickbooks ran a survey to discover more about some of the types of sacrifices the average business owner makes to keep their business running smoothly.
So, what did the survey find? Here are the highlights:
Long work weeks are the norm
According to the survey data, more than half of all small business owners surveyed work 50 or more hours each week. In addition, over 15% said they work 60-80 hours a week.
Many small business owners invest their own money into the business
On the side of financial sacrifices, 43% of those surveyed said they have invested some portion of their own money to help build their business.
Family sometimes has to make sacrifices for the business too
As a small business owner, it’s not just you who has to make sacrifices, sometimes, family has to come together to make sacrifices together.
That’s what the survey found, with 1-in-3 business owners saying that their family has made sacrifices for the business.
Sick days and vacations are a rarity
According to the survey data, more than 30% of business owners take a vacation every 2 years or less. In addition, more than 58% of survey takers rarely to never take days off to recover from sickness.
The funny part is that even on vacations and sick days you are still working.
Both numbers suggest that business owners have to sacrifice more than just family time and finances to build their business, but health as well.
Sleepless nights
The final piece of data sheds light on the inner life of small business owners and the mental and emotional challenges associated with building a business.
According to the survey, 62% of small business owners say their work keeps them up at night at least once a month. And 53% of business owners say they experience uncertainty about the future.
Your sacrifices build a better world
As a business owner, you’re in control. You don’t need me to tell you that because you already know, however, it can be easy to lose sight of the benefits of being in business for yourself when the going gets tough.
The word sacrifice suggests a giving up of something in order to gain something else. While many in the world work somewhere that causes them endless stress and boredom, you go to the beat of your own drum and pave your own path, finding both great joy and opportunity in the work that you produce.
As an entrepreneur, it’s your courage to strike out on your own that builds a better world; your hard work which lead to new hires and economic growth at the most fundamental growth; and your sacrifices which helps build something that not just you–but those who work for and with you–can be proud of.
Join the conversation and give your support by following @tsheets and hashtag #SmallBusinessWeek during National Small Business Week from April 29th–May 5th.
Each and every year, millions of small businesses open up for the very first time – with many of them led by veterans. That with 28.8 million small businesses in the US alone, employing 56.8 million people, it should come as no surprise that this is an engine for economic growth that needs to be supported.
According to the US Small Business Administration 82% of ALL businesses are going to fail because they have cash flow problems.
A lot of entrepreneurs (particularly veteran entrepreneurs) hear this fact and figure and immediately believe that they simply need to bring more cash into their operation. But in all honesty, the timing of the cash flow that they have to manage as entrepreneurs is just as important (if not even more important).
Any business that operates an invoicing system needs to be doing everything it can to manage current cash flow, projected cash flow, and cash flow that is coming in behind schedule.
A lot of businesses that are seasonal in nature have a real tough time with this. Landscaping companies, for example, may have zero cash flow problems in the spring and summer when business is booming. But the moment that the fall and winter seasons rolled around jobs start to dry up, cash starts to get tight, and all of a sudden these veteran owned operations are scrimping and saving just to try and get by.
This is why it’s so important to better budget and prepare how to analyze your cash flow situation, reconcile your accounts, understand your invoice timing (on average), and really dig down deeper into the specifics of your financial situation.
Thankfully, with the help of small business loans for veterans – like VA business loans, for example – all of this becomes a lot easier to manage and mitigate. Many of your cash flow situations can be resolved with strategic veterans small business loans designed to help you float through these otherwise rough, rocky, and tumultuous times while building and growing your business.
You’d be amazed at the amount of small business owners that have absolutely no idea they have a business credit score distinct and different from their “traditional” credit score – and that it has a huge impact on the kinds of financing they are able to take advantage of.
45% of all business owners (including veteran business owners) are ignorant of the fact that they have a specific business credit score, and 41% of them are unaware of the importance of this credit score when it comes to securing loans and financing packages.
As if that wasn’t bad news all on its own fully 82% of all business owners don’t know how to interpret their business credit score. It becomes a huge puzzle piece that they have to try and manage without really understanding exactly what it is, what it means, or how to improve or correct it.
That really puts veteran business owners behind the eight ball when it comes time to secure the funding they need to establish, build, or grow their new small business.
To top things off, the majority of small business owners (veterans especially) feel that the government isn’t doing everything they can to support their entrepreneurial initiatives.
Kaufman 2018 State of Entrepreneurship Study in the United States showed that 79% of entrepreneurs running small businesses believe that the government cares very little about them and is instead only interested in supporting larger, more established companies – particularly those described as “too big to fail”.
79% of entrepreneurs also reported that they received little to no support from the government to launch their business, and 60% of veterans stated that they just believe the government was interested in prioritizing the help they needed to build or grow their operation.
On top of that, the overwhelming majority of small businesses in the United States – veteran owned businesses for sure – can get started with microloans of $3000 or less.
The US Small Business Administration reports that most home-based franchises can be started with between $1000 and $5000, that 64% of all small businesses are started with less than $10,000, and with the average US SBA loan coming in at just around $13,000 veteran business owners do not need a mountain of money to get started making their financial dreams come true.
The important thing here to figure out is how to make the most of everything that small business loans for veterans have to offer.
With so many different options available to pick and choose from this can become a real tall task, but that’s why we have put together this quick guide. Use the inside information below to better understand the kinds of veterans small business loans available, how to choose the right VA business loan for your needs, and how to maximize the funding potential you have moving forward.
Let’s dig right in!
For obvious reasons, veterans very often get preferential treatment from traditional lending institutions like banks, credit unions, and other financial service organizations.
These kinds of companies love nothing more than to do everything they can to help America’s heroes that have all volunteered to risk life and limb to keep our country safe and protected in any and every way possible.
Dozens of different financing packages are available for entrepreneurs to take advantage of, many of them labeled “veteran small business loans”.
Other programs exist – including programs established by the US government, programs that can be leveraged from organizations like the Navy Federal Credit Union, and private organizations that want to conduct business with veterans first and foremost.
The odds are pretty good that if you have any military service under your belt you’ll see preferential treatment from these kinds of organizations. Unfortunately, finding the right solutions for your specific needs can still feel like a bit of an uphill battle – especially if you are brand-new to the world of entrepreneurship.
… You will not have to worry about struggling to find the kinds of VA business loans you need to get your business up and running, to take advantage of new opportunities as they become available, or to access the cash and capital necessary to grow and expand your business and make your financial dreams a reality.
Today’s financial organizations are more willing than ever before to support American veterans with the financing they need to make their business work. Nontraditional lending organizations, including government entities, nontraditional financial organization, and even crowdsourcing operation are also sources of funding you can leverage when you need to get the money to build your business.
Not all of these solutions are going to be perfect for your specific needs, your goals, or the kind of business you are looking to build. At the same time, however, the odds are pretty good that some of these programs and loan opportunities will be able to suit your needs right down to the ground – and a combination of them may be picture-perfect for the financial future you are striving to create.
As we highlighted a little bit earlier, some of these VA business loan opportunities are going to be better than others. You’ll want to do your research and due diligence to be sure that you are moving in the right direction to secure the financing you deserve – and that’s what we are going to detail in depth below.
Just know that no matter what kind of business you’re looking to build as a veteran there are going to be small business loans set up specifically for you to capitalize on. The application processes, the specific qualifications, and lending institutions you may have to leverage to get this money may be different and distinct for each individual veteran but the loans are definitely out there.
One of the biggest advantages in these specific types of small business loans for veterans is the fact that you are going to see significant discounts as well as total waving of loan guarantee fees from top to bottom when you are approved.
Just to really clarify this point, the Veterans Advantage program isn’t exactly offering a specific type of loan available only to veterans, businesses owned by veterans, or businesses operated by veterans. Instead, VA business loans instead offer a whole host of perks and benefits attached to more traditional US Small Business Administration loans that nonveterans will never have access to.
For starters, the ability to access guarantee fee discounts for all Small Business Administration Express loans as well as SBA 7(a) loans that you are approved for are not available to nonveteran individuals.
These kinds of loans can be good for anywhere up to $350,000 dollars – putting plenty of cash and capital in your business bank account to grow, expand, or start up the business of your dreams – and you won’t have to worry about paying ANY guarantee fee (a 0% guarantee fee, to be exact) the way that nonveterans looking to secure this exact same kind of loan will inevitably have to.
Through the SBA 7(a) loan program in specific, your loans will be limited to less than $125,000 – but again you’ll have that same 0% guarantee fee attached to your veteran business loans that nonveterans will not have access to. Any of the small business loans for veterans that exceed $125,000 in this particular category will have a guarantee fee limit capped at specifically 0.125%-3.75%.
It should come as no surprise to anyone that nonveterans won’t have access to that perk, either.
While traditional lenders (your big banks, your credit unions, and national lending institutions) are a lot less likely to approve small business loan – including small business loans for veterans, you won’t have that problem with the Small Business Administration.
The SBA reports that only 26.9% of all small business loan are approved by big banks, with smaller banks and credit unions really only approving 50.2% of applicants. Institutional lenders in general only approved 64.7% of applicants looking for funding for their business.
That means that if you go the traditional road to getting funding for your small business as a veteran you are almost always going to be rolling the dice with a 50-50 chance (or worse) of getting the money that you need.
When you shift gears and move forward with the SBA (particularly thanks to the advantages that your status as a veteran provide) those odds skyrocket astronomically.
All of a sudden you’re looking at a 75% approval rate or even higher. In fact, there are some SBA backed and guaranteed small business loan programs (especially those classified as microloans) that have a near 100% approval rate when you throw in the veteran status kicker of a no fee guarantee.
These are the kinds of financing packages you are going to want to pursue.
Yes, going through the actual SBA approval process can take a lot longer than most people expect or anticipate. It’s certainly going to take a lot longer than going through the loan application of process when you eliminate the SBA altogether.
But if you want to be sure that you have every chance of getting the small business loans for veterans that you deserve it’s worth a little bit of foresight, little bit of preplanning, and an application process that can take upwards of four weeks or more to move through.
We are going to dig a little bit deeper into these details right now. By the time you are done inside info we highlight in the rest of this quick guide you’ll know how to apply for VA business loan offers, SBA veterans small business loan, and other financing packages from traditional, nontraditional, and SBA backed lending institutions without having to worry about pulling your hair out along the way.
Individual rules, regulations, and specific qualifications may be added on top of the ones that we highlighted above by the individual lending institution you are actually going to be working with in the future.
The details that we highlighted above are just some of the most important core elements you’ll need to make sure that you meet, a bare minimum standard as a veteran that you will have to prove, and the general “low barrier of entry” that needs to be hurdled for you to take advantage of these kinds of lending packages.
Most institutions (including big banks, small credit unions, and traditional as well as nontraditional lenders) will go out of their way to help you as a veteran provide the documentation you need to prove that you meet these qualifications.
We have highlighted time and time again the advantages that you have as a veteran receiving the small business loans you need to build the business you’ve always wanted to – and many of the financial institutions you have the opportunity to work with are going to want to help make that happen for you.
You aren’t going to have to provide a mountain of paperwork to go through the VA small business loan application process, but you’ll definitely need some documentation to successfully complete this process.
The more you do to organize your paperwork, to get all of your ducks in a row, and the better you prepare for this application process by getting all of these key pieces of documentation (and copies of them you can present to the financing service you choose to work with) the better off you are going to be moving forward.
All of this documentation is pretty standard fare when it comes to putting together an SBA loan application even if you weren’t a veteran.
These are the documents that any financial institution are going to want to have a look at, the data and information that all financial institutions are going to want to review, and core pieces of information that you’ll want to have ready for presentation – with copies you can provide for their records – before you begin the application process.
If at any point in time you are unsure of or unclear about the documentation being requested don’t hesitate to contact the US Small Business Administration (or the loan officer you are working with) to get more details.
They do this kind of work every single day with veterans just like you, are motivated to help you secure the lending package you are after, and will almost always go out of their way to help you better organize your application for a streamlined process.
Some of this information (like your DD 214, DD 1173, and other military records) will either have been provided to you upon your discharge from your military service or will need to be accessed by contacting someone in your branch that can help you receive new copies.
As a veteran, you don’t have to be told that it can take a long time – a LONG time – to get your hands on these pieces of documentation. It’s critical that you do everything you can as early as possible to request any of the forms and records you do not already have access to if only to speed up the process as much as you reasonably can.
Don’t be shy about regularly contacting the military for this information, either. You want to be certain that you aren’t being pushed to the back burner, particularly if you are hoping to capitalize on your veteran status for funding that allows you to cash in on new entrepreneurial opportunities that may be time sensitive.
Some of these programs are going to be better suited to businesses that only need a little bit of cash and capital (those that can be built with microloans, for example), others are going to be specifically designed to help different classifications of veterans (like disabled veterans), and others still are available for any veteran to capitalize on looking for the funding to make their entrepreneurial dreams come true.
This program allows veterans a “head start” compared to nonveteran owned businesses when they are competing for government contracts.
Veteran owned operations will ALWAYS have a competitive advantage over businesses that do not have veteran ownership, and it’s critical that you capitalize on these kinds of opportunity – especially if you are in industries where lucrative business contracts from the government can change your financial future almost overnight.
More information regarding these specific programs can be found at www.va.gov.
Again, we are talking about a program that gives veterans an advantage over companies that aren’t owned by veterans – but this gives even more priority access to lucrative business contracts from the government to veterans that have disabilities.
Very often these other veterans that have paid the highest price when serving our great nation and the very least that can be done is to provide them with an opportunity to “cut to the firm of the line” when lucrative contracts are made available to US operations.
Consider Veteran Business Grants
While searching for the best financing packages available when it comes to a VA business loan is obviously a good idea you do not want to miss out on the opportunity to take advantage of “free money” set aside in the form of Veteran Business Grants.
Unlike loans, these grants have been established to provide money directly to veterans to build and grow their business without any expectation that they will ever be repaid. This is a gift to veterans (established privately or with the help of the US government) to give our American patriots the opportunity to hit the ground running building their business without having to worry about being saddled with traditional small business loans for veterans.
If you’d like to learn a little bit more about these kinds of programs it’s a good idea to look into these Veteran Business Grant opportunities in specific:
VetFran Business Grant Fund
USDA Veteran and Minority Farmer Grant
StreetShares Commanders Call Veteran Business Award
Little Caesars Veterans Program
Obviously these four programs only barely begins to scratch the surface of the financial support you can secure as a veteran through different grant opportunities.
The liaison you are working with through the US SBA to secure veteran small business loans can almost always point you in the direction of other grant programs you’ll want to dig deeper into. Again, this is free money with zero expectation that any of it will be repaid – money that can help you build your business without having to worry about whether or not you’re able to make payments on big loans along the way.
Used in conjunction with traditional veteran small business loan it can really accelerate your growth, fast-track your success, and help you capitalize on all kinds of new opportunities that just wouldn’t have existed otherwise.
