Lines of credit are like the Holy Grail for small business owners. These financing tools are incredibly powerful, but many people also feel like they’re impossible to find. That said, there are many ways for an owner to qualify if they’re willing to think outside of the box. That can put funding within reach for a variety of business needs.
What Are the Traditional Requirements for a Line of Credit?
Normally, lines of credit follow pretty much the same general requirements as conventional loans. To qualify, your business needs several years of operation, consistent annual revenue, strong cash flow, and an impeccable credit score. This is good news if you have decent credit since you can probably get unsecured credit without issues.
Unfortunately, many small businesses have trouble reaching all of those things. The good news is that there are a few ways to make things easier on yourself. One is to put up collateral. You can secure a line of credit using inventory, real estate, vehicles (sometimes), or equipment. This lowers the other requirements to make getting approved easier.
What Alternatives Does a Small Business Have to Conventional Lines of Credit?
Conventional business credit isn’t the only door open to you. There are several other options depending on your goals and time in business.
One method is to approach a lender about financing from the Small Business Administration. The SBA can help you get a small business loan or line of credit that meets your objectives. You may be able to use the funds to remodel your business, purchase inventory or take care of similar needs. These lines of credit cap out at $5 million, but your total amount depends on revenue.
Another option is business credit cards, which operate similarly to a line of credit and have lower requirements for credit score. The only downside is that any credit card carries a higher interest rate than lines of credit. That means you need to be extra careful with how you spend the money and how you repay it. Still, credit cards can be a great way to balance out your cash flow.
Last but not least is crowdfunding. This relatively new method of obtaining financing isn’t quite like a line of credit, but it can be used to get support for day-to-day activities. If you need to upgrade computer equipment or improve other facets of your business, it’s worth looking into.
Abundant Wealth Financial offers accessible and unsecured lines of credit for new and existing businesses of all types. Contact our offices today to get the funding you need.
Pay-per-click ad solutions have consistently proven popular with business owners for many years. This is largely due to the fact that PPC services provide the opportunity to save money without sacrificing direct results from marketing initiatives. Like most digital solutions, however, PPC trends are always changing to meet the new demands of consumers. In order for your business to remain relevant in its advertising attempts, you must do your part to learn more about the fads and tactics shaping the world of pay-per-click ads. Look at these tips and forget your own path to online success.
Leave Familiar Territory
After using PPC solutions for a set amount of time, you might grow comfortable with your decisions. When an ad is producing results, you may not feel inclined to make any adjustments. While there is some validity to the adage “if it ain’t broke, don’t fix it,” you will never be able to take your company to new heights without taking some risks along the way. Testing new sites and channels can be a great way to explore other horizons. Conducting ad tests on sites you’ve never used before might introduce you to better results than you’re used to.
Tweak Your CTA
When you’re advertising your services on the internet with pay-per-click ads, you don’t have the luxury of a lot of time or space. This means that you need to be as concise as possible with your message. Since every ad must contain some type of call to action, you should give yourself the opportunity to look at PPC trends surrounding CTA verbiage. Test out a few different options and then use analytics to determine which of the choices produced the best outcome. These simple steps can help you drive more traffic to your site via your ads.
There are a number of processes involved with marketing your company’s services on the internet. Since you want to dedicate as much focus as possible to the most important daily tasks, it can be useful to learn more about your options with automation. Taking some of your marketing responsibilities and automating them might be the perfect solution. Don’t jump right into the decision, of course. Take your time and play around with which aspects of the PPC process you would be able to automate without concern, then conduct a few tests to see if it is a worthwhile endeavor.
Understanding the latest PPC trends can play a big part in how successful your ads prove to be. The more you know, the easier it will be to craft a digital marketing strategy that effectively takes all possible angles into consideration. Contact Abundant Wealth Financial today to learn more about our PPC solutions.
Credit lines have been one of the most popular cash flow management tools for companies in the U.S. for decades, and for good reason. They are flexible, they can be used to address any cash flow need that falls within their limit, and with the right assets backing them, they can also be quite inexpensive. If you have never applied for business lines of credit before, there are a few steps to it, but it is not as complex as a loan to purchase an asset. In fact, most credit line approval processes are designed to be easy to navigate.
1. Research Your Lenders
There are a few common requirements for credit lines like your basic business information, proof of insurance, and proof of collateral asset ownership or value. Beyond that, the particulars are unique from one lender to the next. Proper research gives you a chance to compare shop for both interest costs and simplified application processes. Use that opportunity to make the whole proposition easier on yourself.
2. Prepare Your Financial Documentation
Your application package needs to substantiate your income with financial statements in addition to providing information about your location, tax ID, and other important business information. Pull together bank statements, projections, and income statements from your own accounting people to show that you can afford the payments even if the credit line winds up maxed out for some reason. That makes it easy to approve your business.
3. Document Your Collateral’s Value Clearly
The most common asset to use when applying for lines of credit is real estate, and each lender offers a different LTV based on the land value and your credit line. If you do find someone who offers credit against equipment, the same principles apply but you generally do not get as high an account limit. Either way, you need to demonstrate your ownership of the collateral and document any other loans against it or issues that might affect resale if the credit line is foreclosed upon.
4. Be Ready To Communicate
Like many financing application processes, there is a certain amount of back and forth when negotiating lines of credit for small businesses. Often, the approval process is held up because of missed messages or borrowers who do not prioritize fast responses to queries. Be prepared to offer up additional requested information and to confirm approval amounts so you can do your part to get a credit line approval quickly. If you do, you will be surprised at how easy the process can be.
Abundant Wealth Financial offers accessible and flexible lines of credit for new and established businesses. Contact our offices today to get the capital you need.
Business owners should consider their supply chain and its effect on their business model. Building a business that supports minority- and women-owned businesses is important to your customers. Your customers need to be aware that you are committed to supporting demographically diverse vendors. One of the most effective ways to do this is to implement a Supplier Diversity Program.
What Is a Supplier Diversity Program?
This program is a strategy designed to recruit and utilize minority-owned businesses for your supply needs. These companies can be any combination of women-owned businesses or any enterprise identified as a small business by SBA. These potential suppliers employ over 12 million people according to a report by Dun & Bradstreet. By focusing on contracting with these vendors, your business makes a significant impact on these businesses and their employees.
How Do I Establish a Program?
Before you create your Supplier Diversity Department, evaluate your current supply chain. You may already have established contracts with many minority-owned vendors. After you establish your baseline, contact SBA to determine what percentage of qualified vendors are in your industry.
With the above information, you can create a strategic plan to improve your vendor diversity. Be sure to modify your mission statement to reflect your goals. The most successful Supplier Diversity Programs begin with a top-down implementation. Ask employees, customers, and business partners for recommendations.
How Should I Monitor the Program?
Many business owners hire a Supplier Diversity Manager to manage the program. They help identify categories you may not have considered – women-owned businesses, disabled veteran-owned businesses, or LGBT-owned businesses. Managers can also work with suppliers to complete necessary forms that identify them as minority-owned suppliers. These forms help you meet your goals.
As the business owner, you should establish standards your company will achieve. Keep these things in mind as you evaluate your program:
- New businesses should incorporate supplier diversity as a primary business objective. Building your business based on this goal helps all employees understand your commitment from day one.
- For established business owners, communication regarding this new strategy should come from you. Work with individuals or small teams to make sure everyone understands the policy and how it will benefit the company.
- Maintain a system that details and evaluates your vendor guidelines. Ensure that your team is working with strong vendors that provide quality products on your timeline.
- Meet with vendors to see what other needs they may have. You can help strengthen both your and the vendor’s business network.
Building a Supplier Diversity Department will help establish your business as a forerunner in your industry. Your customers, vendors, and employees will see your commitment to embracing diversity and improving your brand reputation.
Investing in commercial real estate is a common tactic for companies looking to grow. Buildings work as both investments and operational facilities, allowing you to reduce lease overhead while gaining an asset that can be refinanced or sold as needed to further your company’s interests. Many businesses eventually invest in commercial property outside of just operational facilities as well, either for secondary income or as a speculative asset. Depending on your reasons for purchasing, you may want to consider a loan from the Small Business Administration.
SBA Loans for Commercial Properties
The SBA has two loan programs that allow for property purchases. The 7a program allows companies to purchase property to be used as operational facilities, with some allowance for partial use as income property if that is a minority of the purchase’s purpose by square foot. The 504 program also allows you to purchase commercial buildings, but it is a multi-asset loan, so you can also use it to finance equipment. The fact that it can finance all the assets needed for a startup to begin operating is why it is so popular, but it is also why it is not useful for businesses seeking to buy investment properties beyond those needed for their own operations.
Commercial Mortgages from Banks and Private Lenders
If you are looking for a low overhead, long-term loan to buy a property for your small business and you do not qualify for SBA loans because it is for investment purposes only, you can probably still finance it with a traditional commercial real estate loan. Commercial mortgages have lower LTVs than residential ones and slightly shorter terms, but you can still find 60-70% LTV on 20-year loan terms, which is more than sufficient for most long-term investment properties, especially income properties.
If you are buying a commercial property that is more valuable than the SBA program can accommodate or your business income is outside its criteria, commercial mortgages are also a great way to finance your operational property investment as well. They offer some of the lowest loan rates you will find for assets in general, and there are no prepayment penalties if you decide you have the reserve capital to own your commercial property outright before the loan amortizes. The best part is that as you accrue equity from the property value appreciating and the loan is paid down, you can use it as a source of low-cost financing via a credit line or bridge loan.
Contact Abundant Wealth Financial today to start exploring our commercial real estate financing programs. Our team will work with you directly to create a tailored solution to help you reach your goals.