When it comes to individual and small business financing, microloans are all the rage these days. From funding a start-up to helping with business growth expenses, microloans have many functions that make them an attractive option for borrowers.

We are here to discuss everything you need to know about microloans. We will explain what is a microloan; we’ll also talk about eligibility and application requirements, microloan advantages and disadvantages, and where you can apply. Read on to learn more about microlending and how it can benefit you.

What Is a Microloan and What Can a Microloan Be Used For?

A microloan is a small loan, usually for a small business including LLCs, that funds business expenses. Microloans generally include loans up to $50,000, although some lenders have higher thresholds for what they consider microlending.

Interest rates on microloans tend to be low, although you may find microloans with higher interest rates. Additionally, the repayment terms of microloans tend to be short, anywhere from three to six years.

You can use microloans to fund any expenses that will help your business start or grow. This funding can include anything from new equipment to building expenses to manufacturing costs. If you want to start, reopen, augment, or improve your business, you can use microloans for just about any expenses.

Terms and Rates of SBA Microloans

One of the most popular types of microloans is the Small Business Administration (SBA) microloan. Nonprofit, community-based agencies administer these microloans, providing technical assistance and management in business growth and development along with funds.

The repayment terms of SBA microloans depend on lender requirements, the amount borrowed, and business needs. Borrowers can pay back SBA microloans over a few years, with a six-year maximum cap on repayment.

Interest rates for SBA microloans vary, dependent upon the community-based agencies administering the loans. If you borrow under the SBA microlending program, expect an interest rate between 8% and 13%.

Microloan Eligibility Requirements

Now that you know exactly what is a microloan, let’s explore eligibility requirements. There are varying eligibility requirements for microloans, dependent upon the lender or intermediary administering institution. In general, the following eligibility requirements tend to exist for microloans across lenders and intermediaries.

Small Business

First, lenders tend to reserve microloans for small businesses. So, you need to own a for-profit business, and it must meet eligibility requirements to be categorized as small by the SBA.

Credit Score

In addition to business size, lenders and intermediaries also set eligibility requirements around credit. Generally, lenders or intermediaries are looking for average credit or better to qualify a business as eligible for a microloan. Average credit usually includes any credit score of 575 or higher.

A low credit score does not necessarily disqualify a business from receiving a microloan. Other application elements, like high revenue or a co-signer, can make up for a lower-than-average credit score.

Loan Payback

Another vital eligibility requirement is the ability to pay back your microloan. You will likely need to submit a business plan demonstrating you have enough cash flow or high enough projected revenue to repay the loan.

Collateral

Businesses also need collateral or a personal guarantee to qualify for microloans. Business assets like equipment or real estate, or personal assets like a car or home are the most common collateral used to secure a microloan. This requirement makes microloans different from the unsecured guarantor loans to which small businesses sometimes turn for financing.

Good Character

Finally, most lenders and intermediaries require borrowers to show good character to qualify for a microloan. You can demonstrate good character by showing no criminal history for crimes like burglary, fraud, or theft.

Best Practices When Applying for a Microloan

As you put your application together for a microloan, there are a few best practice tips to follow.

Application Requirements

First, be sure to read the eligibility and application requirements thoroughly. It is vital that you not miss any application elements or fail any eligibility requirements if you want your application to be successful.

Business Plan Preparation

Second, prepare a detailed business plan that shows exactly how you will spend microloan funds and how they will help your business start, grow, or improve. Be sure you know your business numbers inside and out; microlenders want to see that you understand your value and that they are investing well.

Interview Preparation

Finally, prepare and practice for your interview. Be ready to highlight all your business’s strengths and explain any deficiencies or weaknesses in your application. It never hurts to practice interviewing with a friend or colleague to be sure your interview goes as well as possible.

Where to Apply for Microloans in 2023 & Microloan Examples

In 2023, there are many places you can apply for a microloan. Some of the most attractive microloan examples for borrowers include the following.

SBA Microloans

Perhaps the most commonly used microlending program, SBA microloans targets businesses that may not receive stellar service from traditional lenders. These loans prioritize women, low-income, minority, and veteran business owners. You can apply for these microloans through an intermediary institution. Find your local intermediary on SBA’s list of lenders.

Accion Opportunity Fund

The Accion Opportunity Fund provides microloans up to $100,000 for minority borrowers, along with coaching, support, and technical assistance from peer business advisors. You can apply for this type of microloan on Accion Opportunity Fund’s small business loans webpage.

Kiva

If you are looking for the best interest rate available, you may want to turn to Kiva, which offers microloans at 0% interest. Kiva uses the power of crowdfunding to keep its loans at this null rate. Visit Kiva’s borrowing page to start your microloan application today.

Alternatives to SBA Microloans

While many borrowers turn to the SBA for microlending, there are many alternatives to SBA microloans. Two of the options mentioned above, the Accion Opportunity Fund and Kiva, are great alternatives to a traditional SBA microloan.

Venture Capital Firms

In addition to these lenders, start-ups and small businesses may turn to venture capital firms for microloans. Venture capital firms exist to provide funding for innovative businesses and ideas. Many of these firms offer financing in the form of microloans to fund start-up or growth expenses for new or expanding businesses.

Local Banks

Finally, you may be able to turn to your local bank to find an SBA microloan alternative. More and more banks are investing in small business borrowers through microlending, making this an excellent SBA alternative.

Wrap-up

If before you were wondering what is a microloan, now you know that it can help your small business start, grow, or improve. These small loans with low-interest rates and short repayment terms are often ideal financing options for small businesses looking to enhance their offerings and revenue.

There are many microlending options in 2023 and plenty of places to apply, including the SBA, nonprofits, and venture capital firms. Follow the tips in this article to get started on your microloan application today.

Understanding the difference between a payment gateway vs. payment processor can be challenging. While they both can do the same functions, they are two different platforms for taking payments. Understanding the differences between the two and how they work together is essential, so we have broken them down for you. 

What Is a Payment Processor?

On a basic level, a payment processor is an entity that oversees the entire transaction process from start to finish. It handles the transmission of a credit card transaction between a customer’s bank and the merchant’s financial institution once the transaction has been approved. It also handles the backend finalization of a credit card transaction.

What Is a Payment Gateway? 

A payment gateway is a technology that securely transmits customer payment data to various entities throughout the payment process. The payment gateway will send encrypted payment data to both the issuing and acquiring banks. The gateway will then return the approval or denial of the transaction.

Payment gateway technology can be used with traditional brick-and-mortar customers with point-of-sale systems (POS), online-only businesses, or those who use both channels.

Payment Gateway Encryption

Payment gateways are required to protect data using PCI standards set by the Payment Card Industry Data Security Standard (PCI DSS). PCI DSS is used for brick-and-mortar and online shops using payment gateways. 

The four different methods used to secure data are:

1. Data Encryption
2. Secure Socket Layer (SSL)
3. Secure Electronic Transaction (SET)
4. Tokenization

Payment Gateway vs. Payment Processor: Similarities and Differences 

Similarities

Depending on the platform, a payment gateway and a payment processor can communicate with the customer’s bank and the merchant’s financial institution during the transaction process and when reconciling a batch with all the individual transactions for a particular business date.

Differences

What’s the difference between a payment gateway and payment processor? A gateway is typically the technology used to handle the acceptance of a payment by a customer. It is called a gateway because it is the first and last stop for a transaction. It takes the payment from the customer, ensures the payment is securely encrypted and transmitted to the payment processor, waits for the payment processor to handle everything in between, and then tells the customer if their transaction is approved or denied. 

A payment processor handles everything in between, as it is the mediator between the customer’s bank and the merchant’s financial institution. The payment processor handles all the logistics behind processing the card during and after the initial transaction. It communicates between the two institutions during the transaction and then handles the final processing of the transactions after the fact.

How They Work Together

A payment gateway and payment processor work together to ensure you can take payments from your customers securely and conveniently. When a customer runs a transaction, the payment gateway securely collects and sends the payment data to the merchant’s payment processing vendor. 

The payment processor then acts as the mediator between the merchant’s financial institution and the customer’s bank. The payment gateway then sends back the response to the customer. The payment processor will then reconcile the whole batch of transactions for the date of business in question.

Putting It All Together

Here are the five steps a payment gateway and payment takes from start to finish: 

1. A customer buys an item from a merchant through their online shop using a secured cart.
2. The payment gateway encrypts the payment data and securely transmits it to the payment processor. 
3. The payment processor handles the communication between financial institutions and receives a response.
4. The payment gateway then returns a response from the payment network. This information will determine if the customer’s payment was invalid or valid. If the customer’s payment is not valid, it will prompt them to pay with a different payment method. If the customer’s payment is valid, it allows the customer to complete the order.
5. The payment processor will complete the transaction at the end of the business day.

Is PayPal a Payment Gateway or Processor? 

PayPal can be a gateway, a processor, or both, depending on how you use their services. For instance, PayPal’s Commerce Platform service is an all-in-one payment gateway and processor package. If you are looking for just a payment gateway, then their Payflow service is a secure, PCI-compliant platform compatible with most online shopping carts that take over 25 different currencies. 

Is Stripe a Payment Gateway or Processor?

Stripe is both a payment gateway and a processor. You can also set up recurring payments from clients. Therefore, you won’t need any other solution if you decide to work with Stripe.

How to Pick Your Payment Gateway and Payment Processing Provider 

Do you need a payment gateway and a payment processor? Yes, you need both. So, you need to know how to pick these two service providers. 

Not all payment gateway and payment processing providers are built the same, just like not all businesses have the exact payment processing needs. Just because one payment processor works for a business doesn’t mean it will work for you, so you must first ask yourself several key questions to understand which platform is right for you and your business.

Here are the top ten questions you should ask yourself when picking a provider:

1. Do I want an all-in-one solution or individual platforms?
2. Do I need to integrate different payment methods now or in the future?
3. Will I need to take payments from international customers and take multiple currencies?
4. What type of service account can my business handle? For instance, can I pay monthly fees, variable fees, fixed fees per transaction, etc… 
5. Am I a new or growing business that needs extra support?
6. Will I be taking high-volume or high-value transactions?
7. Do I need extensive reporting or data?
8. Do I need my payment platform to be portable? 
9. Who offers me the best PCI compliance support?

Top Payment Processors In 2023

• PayPal: Best one-stop-shop provider
• Stripe: Best overall payment processor
• Square: Best for new/growing businesses
• Chase Payment Solutions: Best for online businesses
• Clover: Best for traditional point-of-sale systems
• Stax: Best for high-volume businesses

Conclusion

Understanding the difference between a payment gateway vs. payment processor can confuse you, but after reading this guide, you are now an expert! You now understand their differences and similarities and how they can work together to accomplish payment processing. We have also provided you with the six best payment processors in 2023 to make payment processes work for your specific situation.

You may have heard of CDFI loans, but you may not know what they are or how they can benefit your business. So, what is a CDFI loan? It is offered by Community Development Finance Institutions or CDFIs. They serve about 84% of low-income earning individuals, so the loans act as capital for existing businesses. 

CDFi loans offer low-interest rates, flexible repayment terms, and no prepayment penalties. The application process is also quick and easy, reflecting the unique challenges that small businesses face. Keep reading to learn more about what a CDFI loan is, its pros and cons, and how to apply for one.

Types of Loans Offered By CDFIs

There are a variety of loans offered by CDFIs, including:

• Start-Up 
• Expansion 
• Working capital 
• Real estate 
• Recovery and relief 

Each type of loan has its unique benefits, and it’s essential to choose a program that is best suited for your business or other community development projects.

Contact a CDFI lender in your area to learn more about the loans they offer.

CDFI Loan Requirements?

Your business must meet specific requirements to be eligible for a CDFI loan.

The location of the business should be in a low-income or distressed community. You also need to be engaged in sustainable economic development activities, such as job creation, employee training, or the promotion of entrepreneurship.

Your business should have a strong credit history and be able to repay the loan on time. CDFI loans are typically unavailable to businesses in financial difficulty.

How To Apply for a CDFI Loan?

To apply for a CDFI certification, you must provide the lender with basic information about your business. These details include your company name, address, contact information, and years in business.

Also, you need to provide documentation of the business’ financials, such as the most recent income tax return and balance sheet.

The lender will review the application and, if approved, give you the chance to discuss and create a repayment plan that fits your business needs.

How Can a CDFI Loan Benefit Your Business?

A CDFI loan can benefit your business in several ways.

Affordability

CDFI loans are more affordable than traditional options. In addition, they offer lower interest rates and longer repayment terms, which can help to manage your cash flow.

Availability

CDFI loans are available to businesses of all sizes, including startups and minority-owned ventures, which often have difficulty securing funding from traditional lenders.

Government Owned

With backup from the government, CDFI loan repayment guarantees you the confidence to invest in your business without worrying about the possibility of default.

What Are the Terms of a CDFI Loan?

The terms of a CDFI loan are more favorable than traditional bank loans, and the application process is more straightforward.

Private investors fund CDFI loans, so you don’t have to go through a bank for loan processing. This approach means obtaining a loan for business growth and expansion is relatively easy, and you won’t be required to deal with red tape and long wait times.

Where Can You Find a CDFI Lender?

Community Development Financial Institutions (CDFIs) are the lenders that offer loans to support small businesses financially. Most of these are government-owned and accessible in many areas, especially low-income ones.

You can find a list of CDFI lenders on the Community Development Financial Institutions Fund website.

CDFI Loans Pros and Cons for Small Businesses

So, is a CDFI loan right for you? Only you can decide that. But it’s essential to weigh all the pros and cons before deciding.

Pros

When it comes to pros, CDFI loans are particularly advantageous due to their low-interest rates, straightforward approval, and relatively few risks.

Low-Interest Rates

CDFIs offer low-interest rates to small businesses and a flexible repayment period. Smaller businesses can thus be better equipped to grow without the strain of dealing with an unfavorable loan.

Easy Approval

Loan approval requirements are accessible, unlike other institutions such as banks.

Minimal Risks

A CDFI loan offers a fixed interest rate. Customers know what they have to pay, so don’t have to navigate uncertainty for this source of financing.

Cons

While CDFI loans can be beneficial, there are a few cons.

Long Application Process

CDFIs have fewer assets; hence, the loan application process takes longer than banks.

Limited Availability

You may not be eligible for the subsidy if you don’t live in a target area.

What Is the Difference Between a Bank and a CDFI?

A bank is a profit-making institution in the business of making money. A CDFI, on the other hand, is a nonprofit organization focused on helping small businesses and low-income communities.

There are many types of CDFIs, but they are all mission-driven organizations offering various products and services. For example, they can provide you with a lower interest rate on your loan, help you find funding for your business, and give you technical assistance and training.

Some CDFIs participate in the SBA small business loan program. 

If you’re wondering how to become a CDFI, a business needs to apply to the CDFI Fund and meet specific criteria. What is the benefit of being a CDFI? Well, CDFI certification opens up the door to government funding from the US Treasury Department. 

What Are Some of CDFIs Success Stories

Many smaller businesses struggle to get traditional loans, so it’s unsurprising there are plenty of success stories involving CDFI loans. These businesses received the financing necessary to grow, including: 

• A manufacturing company that used a CDFI loan to purchase new equipment, allowing them to increase their productivity and create more jobs.
• A woman-owned construction company that used a CDFI loan to expand their business, hire more employees, and purchase new equipment.
• A small grocery store that used a CDFI loan to renovate and increase their inventory.

Conclusion

Now you have the answer to the question “what is a CDFI loan?” This kind of loan can be an excellent way for small businesses to get the financing they need to grow and expand.

These loans are for businesses from underserved areas or within specific categories, such as companies owned by women and minorities. If you’re looking for a loan to help your business reach its full potential, a CDFI loan could be the perfect option.

If you own a business, it is crucial to have good credit. You need good credit to take out loans and work with other businesses. Additionally, you should try to only work with companies and vendors with good credit. As a result, you must know how to run a business credit check.

Before you start working with a new company, you should perform a business credit check on them. Additionally, it is important to periodically perform business credit checks on your business. By doing so, you can address or dispute sections of your business’s credit profile.

Why Monitoring Your Own Business Credit Profile Is Important

Knowing how to run a business credit check on your company is more important than performing them on other businesses. If you find that a company you considered working with has bad credit, you can drop them and work with someone else. However, if the credit check on your business is poor, you will lose business with most other companies.

The most significant reason to learn how to run a business credit check on your company is so that you can get financing from banks. Banks are unlikely to extend lines of credit to businesses or people with bad credit. If they do, they will demand a higher interest rate. Suppliers will run the same checks before extending lines of credit to your company.

Another thing to consider is that customers often check credit ratings to assess the long-term health of your company. Not only will this affect the number of sales you get, but it will affect the price of your stocks in the market.

What Score Do You Need for Business Credit?

To answer this question, we must first address the scale on which business credit scores are assessed. Business credit scores range from 0 to 100. Small and large companies use the same scale.

Most small business lending companies require a minimum credit score of 75. However, 75 is just the cutoff, and many companies prefer higher scores. So, the better your business credit score, the better interest rates you will get on your lines of credit.

When Should Your Business Perform a Credit Check?

You should always run a credit check on a company before you enter business with them. By checking their credit, you can see if any red flags pop up that will cause you to question the partnership. Additionally, it will let you assess risk, determine payment patterns, and identify potential conflicts of interest. You should avoid working with businesses with bad credit because they can bring your company down with them.

As for performing credit checks on your business, there is no set rule for how often you should do them. Performing them at the end of each quarter is smart because you can see if anything changed. You can then reassess and make adjustments so that your business is more successful in the next part of the year.

Additionally, you should perform a credit check on your business before and after you make any significant change to your business. For example, opening up a new location or branch could have a significant effect on your business’s credit profile. You need to know if the changes were good or bad.

What Information Will You Need to Check Your Score?

To learn how to run a business credit check, you need access to all your company’s financial reports. Your best option is to pay for a business credit report online. Several providers let you see your company’s credit score.

Additionally, when you subscribe to one of these packages, they will provide advice on how to improve your company’s credit score. 

Unfortunately, most packages require that you pay a fee, but are there any free options for checking a business credit score? Yes, there are a few free options, but they usually provide less information to users.

How to Run Your Business Credit Check

The first step is to register your business with a business credit reporting bureau. You must select a membership level. The higher the level, the more thorough the report you will get. Once you register online, confirm your account, and pay the fee, you can immediately request a credit check for your business.

After requesting a credit check, you must input various financial and business information. Depending on how thorough a report you requested, it may take a long time to enter all of this information. As a result, it is smart to get your financial reports in order before requesting a credit check.

Depending on the company, it may take varying amounts of time to perform the check. You will receive an email alert when the report is ready to view. You will receive a score ranging from 1 to 100.

A score above 75 means the company pays all bills on time. Conversely, a score below 30 indicates your company is likely to file for bankruptcy. 

What Factors Affect a Business Credit Check?

Several factors affect business credit scores. The most important is the financial reliability of your company. If your company consistently pays its bills, it will likely receive a high credit score.

Red Flag Alert’s Business Credit Reporting 

Red Flag Alert is a company that has worked for 15 years to provide extensive business credit checks with solutions for bad credit scores. They use a credit checking system that makes it easy for you to see how much trouble your business is in.

Any company with a red flag has a chance of falling into insolvency. Sixty percent of companies with three red flags will fall into insolvency within seven days.

Red Flag Alert is a popular option because it provides specific company credit check scores, solutions, and the best course of action for your company.

Final Thoughts

If you own a business, you should learn how to run a business credit check. You should be able to perform checks on your business and all companies you plan to work with. Doing so will help you in the short and long term.

Receivable financing is when a business receives funding based on its invoices. It is a tool used by many companies to help them survive dry periods between payments. 

Receivable financing is essential because not all clients pay immediately upon the completion of services. Some only pay on a set schedule, and as a result, you could be waiting for their payment for up to 90 days. Even when clients pay on time, delays can cause problems with cash flow. Receivable financing is a tool to support businesses with cash flow issues.

Why Consider Receivable Financing for Business

Large businesses do not need to worry about late payments. If there is a late payment, they can handle the short-term loss of income. Additionally, if a business fails to make a payment, they have large teams of lawyers to get their money. Unfortunately, small businesses do not have the same luxury.

Small business owners are often victims of late and missing payments. While it is not the fault of the small business owner when a payment is late, they need to prepare for these scenarios.

Unfortunately, it is challenging for small businesses to acquire traditional loans from banks. Most of these loans require collateral that small companies do not have. As a result, receivable financing is the best option for small businesses.

Receivable financing can provide small business owners with solutions to short-term cash flow gaps. You can use this money to pay bills while waiting to pay invoices. Additionally, you can use it to expand more rapidly so that you can make more money in the future.

How Receivables Loan Works

A receivables loan is a revolving line of credit similar to what you have with a credit card. It is an extended line of credit you can borrow against at any time. Small business owners can use this money to pay for inventory, employees, or expansion. Owners can also use a receivable loan when small businesses face short-term cash flow problems.

What Are the Four Common Forms of Receivable Financing?

Receivable financing can come in four common forms. The most common form is traditional factoring. This type of receivable financing has the borrower sell their receivables to a factoring establishment, and that establishment then sells them at a lower price. The price is dependent on the quality of the receivables. Unfortunately, this method can be expensive because of all the extra fees. So, you should only use factoring when 100% necessary.

Asset-backed securities are another type of receivable financing often used by larger businesses. A fixed-income channel supplies coupon-based payments by taking money from clusters of underlying assets. Usually, people or companies will receive funding with their mortgage as the main asset. 

Accounts receivable loans are good options for small businesses with short-term cash flow issues. This method allows companies to receive 80% of the current value of their pending receivables. Using this method, the borrower is not at risk because they only use money another owes them. If the company has not paid you the money they owe, the bank will instead go after the company or person who failed to make the payment.

Finally, selective receivable funding is an option for businesses. With this method, companies can receive full payment on their outstanding invoices immediately. Financing rates are usually lower with this method because it does not appear on the balance sheet. Additionally, this method does not affect the company’s other debts.

Factoring Vs Receivable Financing

While there are several types of receivable financing, it mostly comes down to whether you should use factoring or receivable financing. Factoring is the more expensive of the two options, but it is easier to acquire. Established businesses with a long history of good credit and cash flow are the only entities that can obtain receivable financing. As a result, factoring is a good option for new companies that still need to establish their finances. 

Benefits of Receivable Financing

Receivable financing is one of the best options available to businesses with short-term cash flow issues. It can help your business get through periods when payments are late or absent. Notably, there are several great benefits of receivable financing. 

Receivable financing can be quickly approved, and as a result, you can receive the funding quickly. Additionally, you do not need collateral to receive this type of financing, and you do not need to do much paperwork.

Furthermore, this type of financing is very flexible, so you can choose the time at which you receive your funding. So, you can use receivable financing to smooth out your cash flow over time.

How to Get Receivable Financing in 2023

So, how does receivables financing work, and how can you get it in 2023? First, you must meet specific requirements. You must own a B2B or B2G business that has been running for at least six months. That business must have a minimum of $50,000 in annual business revenue, creditworthy customers, and outstanding receivables.

If you meet these requirements, you must collect all essential financial documents. Then, you should choose the type of receivables to finance and submit your accounts to a financing application. Depending on the state of your business and its credit, you will receive a receivable advance. Finally, you will need to pay back what was lent to you once your customer pays their invoice.

Receivables Financing Companies in 2023

To get receivable financing, you must apply to a company that supplies it. Fortunately, there are several great receivable financing companies available in 2023. Some good options include FundThrough, First Commercial Credit, Crestmark, Universal Funding Corporation, and Lendio. Each provides high advance rates for companies in need of quick personal business loans.

Final Thoughts

Receivable financing is necessary for many small businesses to survive. Small businesses cannot afford to have a lull in cash flow when dealing with late invoice payments. Fortunately, receivable financing can provide short-term financial relief to companies in need.

Launching and operating a business is no easy task. The main reason businesses fail is due to a lack of funding or available capital. Financial strain can also contribute to burnout, driving many entrepreneurs out of the market.

However, many business owners are unfamiliar with available financing resources that can save their organizations in moments of hardship. We have researched and assembled the best same-day business loans to help you finance your entrepreneurial dream. With this guide, you can identify the best same-day business grant for your company and ease your financial stress.

What Is a Same-Day Business Loan?

Most small business loans take months to process. For organizations facing financial hardship, this can be a prohibitive factor in applying for grants.

Same-day business loans provide emergency funding that appears in your business account within 24 hours. These loans are suitable for urgent matters and small projects and are typically ineligible for large-scale and long-term endeavors. Same-day business loans generally have looser credit requirements, making the application process efficient and easy.

Additionally, same-day loans tend to have higher interest rates and shorter repayment terms than traditional loans.

There are eight types of same-day business loans that you can obtain for your business.

Term Loan

Businesses typically acquire term loans for business-related investments and repay them at a regular rate over a set period of time.

Term loans have few credit and application requirements and are available within 1-3 business days. We award term loans to businesses older than three months.

Repayment terms range from six months to ten years, and you can work with an advisor to lower interest rates depending on your needs.

Business Line of Credit

A business line of credit (LOC) offers financing with flexibility, so you qualify for an amount and only borrow what you need. LOCs are suitable for short-term needs like buying inventory or covering payroll and offer similar benefits as term loans; you can borrow between $10,000 and $5 million and repay within six months up to 10 years.

Equipment Financing

Equipment financing refers to loans awarded for specific tools or machinery you need for your business. The amount you receive depends on the price of the item you need, but funds range between $10,000 and $5 million. Businesses typically receive funds within two to five business days, and repayment terms vary between one and five years.

SBA Loan

SBA loans, or loans guaranteed by the Small Business Association, are protected loans for small businesses that generally cover growth expenses or working capital. Loan amounts vary from $10,000 to $5 million. Most SBA loans are available within 45 days, and repayment terms range from 10-25 years.

Accounts Receivable Financing

Accounts Receivable (AR) financing is a type of loan that enables companies to receive funds related to a fraction of their accounts receivable. You can turn accounts receivable into the capital from $10,000 to $5 million without notifying customers.

Businesses receive AR funds between two and five days, and repayment terms lie between six months and ten years.

Asset-Based Loan

Financiers award asset-based loans for large-scale investments or projects. Asset-based loans appear within 1-3 business days and are backed by assets and range between $10,000 and $5 million, with repayment terms between six months and ten years.

Franchise Financing

Franchise Financing is usually available for franchise fees and start-up costs. Funds arrive within 2-7 business days and range between $10,000 and $5 million, with repayment terms from six months to ten years.

Merchant Cash Advance

A Merchant Cash Advance is an alternative financing service that provides small businesses with lump sum funds between $5,000 and $10,000. This flexible financing option does not require collateral, and repayment terms lie between six months and ten years. MCAs are more flexible and specific to a business’s needs than traditional loans.

Why a Same Day Business Loan?

Same-day funds can relieve urgent financial pressure; they are quick, easy loans available same day.

Same-day business loans are best for organizations facing emergencies that require financial solutions. Because same-day loans typically have fewer eligibility requirements than long-term loans and grants, they are ideal for those who may not meet the traditional criteria.

Additionally, same-day loans often offer less capital than long-term loans, so they are best for small projects and most suitable for small and medium-sized businesses and entrepreneurs.

The Pros and Cons of Same Day Business Loans

While quick and easy loans same day is relatively simple, there are several important factors to consider before applying.

The Benefits of Same Day Business Loans

Same-day business loans are fast and accessible. Flexible eligibility criteria and low credit requirements accommodate otherwise ineligible applicants, and funds appear within 24 hours.

Leading providers typically offer financing services, from credit lines to term loans. The application process is often more accessible and efficient than more significant, long-term loans.

The Drawbacks of Same Day Business Loans

Same-day business loans can entail several drawbacks. First, the amount of funding is typically lower than that of traditional loans. Additionally, same-day loans may have higher interest rates and shorter repayment periods. Some loans may also have monthly revenue requirements.

Lastly, same-day loans are not conducive to larger projects and are occasionally unavailable in certain states and industries.

Same Day Business Loan Rates

Most same-day business loans offer between $5,000 to $400,000 in capital though some may offer up to $3,000,000. In contrast, we offer loans up to $5 million to accommodate your needs.

Interest rates typically range between 4.80% to 29.90% on average and sometimes appear as factor rates, representing the percentage of a loan expressed as a decimal figure.

Alternative to Same-Day Business Loans

Other financing options present different benefits and drawbacks. For example, small businesses like restaurants and entrepreneurs have several different funding options.

Below are several examples of alternative loans.

Startup Funding

Startup Business Funding is a startup loan (often available the same day) for entrepreneurs and new businesses to acquire the capital they need to grow.

Credit Card Processing

Credit card processing is a financial service that helps businesses to lower credit card processing fees and save funds to allocate them elsewhere.

Fix N Flip Loans

Fix N Flip loans suit real estate developers, investors, and builders. This loan allows you to finance rehab purchases and obtain fast funding to pay for your projects.

How Fast Can You Get Approved for a Business Loan in 2023?

Nowadays, some business loans are available within several hours. Most lenders require 24 hours to accept, process, and provide the loan, but alternative lenders are increasingly speeding up the process, and you can obtain a loan within hours of your application.

How To Get a Business Loan in 24 Hours

Obtaining a same-day business loan in 24 hours is relatively simple. First, find a financial service provider or willing lender. Then, gather any information and documents you may need, including your identification, EIN, credit score, and bank statements.

Follow the 15-second application process and enter your personal information. You will meet with an advisor to evaluate your options. Choose a loan and await approval within the next few hours. If approved, you will receive your funds within 24 hours.

Before You Go

If you have decided to obtain a same-day business loan or are interested in doing so in the future, contact our financial service experts. The application process takes only 15 seconds, and you will meet with a dedicated Business Financing Advisor as soon as possible to help you decide on the best same-day business loan to meet your needs.

Your business-and your wallet-will surely benefit.

Shifting to solar energy can be a great environmentally-friendly investment for your business. It can lead to benefits such as significant tax credits and opportunities to reduce costs. Since solar energy is eco-friendly, it’ll serve to attract workers and clients. However, even with such benefits, solar energy isn’t suitable for every small business. 

So, how do you know if you should use solar to power your small business? There’s no universal answer. There’s no one answer to how much cash a business should have on hand. It depends on specific factors related to the business. To know if using solar is right for you, you need to examine its benefits and disadvantages. Keep reading to learn more about solar energy pros and cons.

Should Your Business Invest in Solar?

You might be wondering, should your business invest in solar? Before answering that question, you first need to understand solar energy. So, how does solar energy work? As a source of energy, solar energy is helpful in lighting, heating, and cooling businesses and homes. There are different solar technologies that people use.

The most common one is solar photovoltaic technology. It transforms sunlight into electricity. Others are passive solar technology and solar water heating. The first one warms places during winter. The latter provides hot water. Solar has many advantages, but that doesn’t mean it suits all businesses. Some of these benefits are:

• It limits operating costs
• Having the reputation of being environmentally conscious acts as an efficient marketing tool
• It’s a low-risk investment 
• It’s low-maintenance

However, solar energy also has its disadvantages. Setting it up may be costly, and you need to stay in one place for a long time to reap the benefits. To know whether you should invest in it or not, weigh the solar energy pros and cons.

Solar Power Benefits for Your Small Businesses

The demand for electric power is continuously increasing. With the high cost of oil, most people and businesses are now turning to solar energy. In the United States, it’s common to see companies installing solar panels for their energy needs.

The benefits of solar energy are numerous. For one, it reduces your business’s dependence on non-renewable sources of energy. It is also quite cost-effective. Another reason why solar energy is a popular choice is its sustainability. That quality also serves to draw in clients. 

Customers come to your business for the goods and services you offer. However, using solar energy will attract them to your organization, where they can make a purchase. Using solar informs others of your values and works as a great PR tool. 

The Pros of Solar Energy 

As mentioned earlier, you need complete information before choosing whether to use solar. As a business owner, you may wonder just how good is solar power. To answer that, here are some advantages of solar energy for your business.

Lower Operating Costs

When you shift to solar energy, you’ll see a significant reduction in your energy cost. That’s because when you use solar, you harness your own electricity. Thus, you can eliminate a significant part of your electric bill. When moving to solar energy, the initial investment can be higher than that of conventional energy sources.

However, installing solar panels is a long-term investment. What you save in energy costs can cover the high investment cost over the years. Eventually, you’ll reach a point of continued cost savings. Also, solar panels last for many years, meaning you’ll reap the benefits for a long time. 

It Safeguards You From Increasing Electricity Costs

The price of electricity is almost certain to rise over the years. With solar, you can protect your business from the increase in rates. 

Another benefit of solar is that you may generate surplus energy and sell it. If that happens, you can enjoy more income. It’s also a way of giving back to your community.

Tax Incentives

Solar energy is beneficial for the environment, and the government appreciates that. They want more firms to turn to solar. Thus, they provide businesses with tax-saving incentives. Examples of the incentives include the Solar Investment Tax Credit and the 100% bonus depreciation.

It Enhances the Value of Your Business

Many customers and employees care about the sustainability of a business. So, sustainable practices like solar energy will attract both groups. Thus, you might want to include the use of solar in your marketing strategy.

In addition, if you have surplus energy that you sell to your community, it will create a good image. It can also help you develop a good relationship with them. There are many ways in which your relationships today can create opportunities for tomorrow.

The Cons of Solar Energy 

Considering solar energy’s pros and cons is essential in making the right choice. Some of the disadvantages of solar energy are:

High Cost of Investment

Shifting to solar energy requires high upfront costs. So, when making the change, look at it as a long-term investment. You’ll use the energy source for a couple of years before it can cover the initial cost. 

Moving Too Soon Will Cause You To Lose Out on the Investment

Some people may want to move their organization to a different place a few years after shifting to solar energy. If that’s your intention, it may be wise to install the panels once you’re settled. That’s because you need to stay in the solar-fitted building for some years to reap the benefits. If you leave too soon, you may lose out on your investment. 

Are Solar Panels Worth It for a Business?

A common question among business owners is, are solar panels worth it for a business? To answer that, consider solar energy’s pros and cons. That includes various things, including taking a closer look at the tax savings and examining the pros and cons of solar energy on the environment. 

In Conclusion 

For most businesses, the benefits of solar energy outweigh the disadvantages. But, the solution may not be right for you. So, make sure you assess the pros and cons of solar energy before deciding.

If you’re an LGBT business owner – or aspiring business owner – looking to take your entrepreneurship to the next level, read on. This article will cover the steps for registering as a certified LGBTQIA business. 

There’s been a strong push in recent years to expand diversity and inclusion in businesses, educational facilities, and government agencies. You’ll see this in the increase in efforts to support women-owned businesses and businesses owned by Black entrepreneurs and other members of minority communities. 

Business organizations aimed at marginalized groups have been popping up, offering classes, loans, grants, and access to further resources to help people succeed. The National Gay and Lesbian Chamber of Commerce (NGLCC) is one of those organizations.

 It offers gay and transgender businesspeople opportunities for growth and success, helping even the playing field for these underrepresented groups. They now provide a way for businesses to be certified as an LGBT Business Enterprise (LGBTBE). 

What is a Certified LGBTBE? 

In short, an LGBTBE is a business primarily owned and operated by a person (or persons) who identify on the LGBTQIA spectrum. 

Why Get LGBTBE Certified?

Here are just some of the benefits of LGBTBE certification.

Social Change

If you watch television or browse the internet for even a short time during pride month, it’s easy to see that today’s most prominent companies are working hard to reach the LGBT community. And it doesn’t end when June is over; the so-called Pink Dollar – the buying power of LGBT people – is estimated at an impressive 3.7 trillion dollars, a number that’s making the business world embrace the considerable potential of this once-ignored demographic year ’round. 

LGBT people are more likely to do business with companies they know are genuinely involved in their communities, whether as a member or an ally. This means actively avoiding businesses that have a track record of discriminatory practices and supporting those who are open and inclusive. 

And it’s not just the gay community who does this. Today’s young adults – millennials and Gen Z’s – were raised in a more progressive social climate than previous generations and tend to have an overall positive view of LGBT people and causes. This is apparent in the popularity of TV shows and movies with LGBT characters and themes and in the enthusiasm for corporations that vocally support gay rights. 

 The public has become increasingly aware of the LGBT struggle and other equality causes, and more people are actively trying to spend their dollars in a conscious way that contributes to inclusivity. Because of this, there has been an uptick in interest in women-owned and minority-owned businesses. 

Business Enhancement

As a certified LGBTBE, you’ll get access to various resources that can propel your business forward. You may also reap social rewards. These can include: 

Education and Training

Whether you’re just starting out as a business owner or you’ve been in business for years, understanding your industry and how it evolves is essential for growth. Training and continuing education opportunities can help you learn new skills and adapt to a changing world. 

Networking 

While many business owners start with little and pull themselves up by their own will, few do it entirely alone. Having some support from mentors who have walked the road you’re on can make a huge difference as you move forward with your venture. 

Business-to-Business Opportunities

Suppliers in the NGLCC sphere are lining up to do business with LGBT-owned businesses. By being certified, you’ll have access to these companies and others who can help you streamline your enterprise, cut costs and expand your line of products/services. 

Inspiration 

While social acceptance of LGBT people has improved dramatically in the last decade, there are still battles to be won, and many young gay people still struggle. Being an open and successful queer entrepreneur and the owner of a certified LGBTBE can set an encouraging example for those still trying to find their way in life. 

What are the Qualifications to Be Certified as an LGBTBE? 

• Your business must be a United States-based registered business entity. 
• Your place of business must have its headquarters on US soil. 
• Your business needs to be majority-owned (at least 51 percent ownership) by a person who identifies as a member of the LGBTQIA community. 
• It can’t be a subsidiary or offshoot business; it needs to operate independently of any other non-LGBT-owned enterprise. 

Before applying for certification, you’ll have to gather some relevant documentation. You’ll need to provide proof of business ownership and show that you’re a registered business in your state. 

You’ll have to show that you are a US citizen or legal resident and they will also want further information about your business, including the structure (sole proprietorship, LLC, corporation, etc.), tax number, and the type of products or services your business provides. 

Proving LGBT Status For LGBTBE Certification 

Next is the part many people may find odd: proving LGBTQIA status. Something as basic to identity as sexual orientation generally doesn’t need to be “proven” in everyday life, but when it comes to joining a business organization like this, there must be some criteria provided to ensure that the benefits are going to the people they’re intended for. 

So, how do you prove you’re a member of the LGBTQIA community? 

• Proof of civil union or marriage with someone of the same sex. 
• Proof of health insurance showing a same-sex partner is on your plan. 
• Proof of parenting efforts (in-vitro fertilization, adoption, surrogacy) made by you and a same-sex partner. 
• Proof of name change, procedures, or other steps to affirm gender. 
• Letter from an attorney or two personal references attesting to your status
• Apartment lease or deed on which you appear with a same-sex partner. 

Of course, you don’t need to have all of these, but you will want to have at least one. 

Conclusion

Being an LGBTBE can boost your business, encourage connections with others in your industry, and help inspire others from your community. If you’re interested in having your company certified, visit the NGLCC’s website to submit your application. 

Whether you’re opening a bar or need support keeping the lights on during a slow period, many financing options are available for small businesses.

Why You Might Need Bar Financing

Financing can help you pay for all aspects of running a new bar, including:

• A mortgage or rent: Whether you’re buying or renting property for your bar, you will need to pay these costs before your revenue starts rolling in.
• Equipment: Most bars will need additional funding to pay for equipment and supplies to get started.
• Furniture: Some rentals include furnishings, and some do not. Even if your building has furniture, you might want to change it to match your bar’s energy.
• Payroll and staff expenses: Whether or not you’re currently bringing in money, your hourly staff need to get paid for their work.

Types of Bar Loans

There are a few different kinds of loans that you could use to fund a bar:

• Term Loans: Term loans are cash loans given to businesses with set return terms. These loans are usually intended for established companies.
• SBA Loans: SBA loans are available to all small businesses, whether they are getting started or are already established. These government-insured loans tend to be more readily available for small businesses.
• Real Estate Loans: Renting a space for your bar and requiring a loan is usually done through a regular business loan. You can, however, take out a mortgage loan if you are buying the property where you will do business.
• Conventional Loan: These loans usually get taken out from lenders or banks. They can be used to pay for almost anything you need to start your business but can be challenging to acquire for high-risk investments like bars.
• Opening a line of credit: If you cannot get approved for a conventional loan, you may be able to open a line of credit with your bank. The interest rates will likely be higher, however, so beware.

How to Get a Business Loan for a Bar

How to get a business loan, whether for a bar or another business, depends on what the loan is for. Start-up loans are available from conventional lenders (banks and other lending organizations), the Small Business Administration (SBA), and online lenders.

Best Options for Funding a Bar in 2023

Aside from putting in your own money and asking your friends and family for help, there are two primary funding sources for any new business, including bars: commercial loans, government loans (SBA loans), and alternative online loans.

Commercial and Conventional Loans for Bars

Commercial or conventional business loans are a good choice for many businesses, especially if you need money faster than an SBA loan can approve. Conventional loans can have reasonably low-interest rates, ranging from 3-7%.

The drawback of a conventional loan is the difficulty of receiving one. Because the government does not insure these loans, the lender has no guarantee of return.

Many lenders are reluctant to fund businesses without any current revenue, especially for restaurants and bars, which largely depend on the economy and the skill of hired labor.

Online or Alternative Loans for Bars

Online or alternative loans often have very high-interest rates but are easy to get. If you need money for your business and need it fast, online loans can get you a loan in just 24 hours.

SBA Loans for Bars

SBA loans are federal government-insured loans that can help you get your business off the ground. There are caps on interest rates, which helps ensure you are getting a good deal.

SBA loans are also easier to get than commercial loans. The government insures these loans, so lenders are far more confident that they will get some kind of return for their investment.

While SBA loans can be an excellent choice for many businesses starting, they are still more challenging to qualify for than alternative or online loans.

How Much Does it Cost To Open a Bar Business?

Opening a new bar can be very expensive, but it can also be cheaper than you might think. The cost is highly dependent on a few factors:

• Location
• Bar type (nightclub, full-service, attached to a restaurant, etc.)
• What you already own (equipment, a space, etc.).

While average bar opening costs are usually around $100,000, it’s crucial to come up with an expected expense report before you start applying for loans. Fortunately, the SBA offers a calculator to help you estimate your start-up costs.

How Much Does it Cost To Run a Nightclub?

The cost to run a nightclub or bar depends on the location and type of bar or nightclub, the site, and the amount of business you get. These costs can even change depending on the time of year.

To get a complete estimate of how much it will cost to run your business, you will have to run a full analysis of your losses, costs, and income. This report should include every place where money is entering and leaving your business, including:

• Staff: Predicting staff expenses is easy based on the schedule, but estimating how to schedule and understanding the amount of staff you will need can be very difficult.
• Rent/mortgage: Rent and mortgage expenses should be easier to estimate as they are stable.
• Utilities: Utilities will likely be variable, depending on the season. See if you can obtain utility information from the previous bar owner or building manager.
• Supplies/product: This includes the usual bar expenses glasses, tumblers, ice, and alcohol, but remember to include other expenses like printing menus, getting coasters, and cleaning supplies.
• Repairs and maintenance: Some repairs you will be prepared for; others may be unexpected
• Advertising: Create a budget for advertising and stick to it, if possible.

Wrapping Up

Estimating your start-up costs can be difficult, but once you know how much to ask for, obtaining funding from an SBA or alternative loan can be easy. There are many different kinds of loans for supporting small businesses, and it’s important to know what you need before you apply.

Most entrepreneurs form partnerships when running their businesses mainly to act as leverage in the long-term thriving of the business.

A partnership allows them to share profits, liabilities, and management operations. However, in due time, these partnerships may likely run their course due to the need to venture on sole business ownership, financial constraints, or a partner may move away or is ready to retire.

That said, most turn to partner buyout financing after doing some networking and research to ensure business continuity and success.

Keep reading the article to understand the meaning behind partner buyout financing and learn more about partner buyout financing pros and cons and other alternatives.

What Is Partner Buyout Financing?

In business terms, partner buyout financing is the capital or money a business partner requires to buy their other partner’s ownership stake in the enterprise.

Please note that for a partnership buyout to occur, the buyout clause should be incorporated in the initial partnership agreement with clear rules that define the process. The clause allows the partners to exercise their buyout interests without restrictions.

For example, here are a few reasons behind the partnership buyout:

• Sole ownership. A partner may decide to own the business fully. Thus, with the buyout clause in motion and a mutual agreement in place, integrating a partnership may help one of the directors or partners become the sole owner of the enterprise.
• Mutual split. Sometimes a partnership may not work out well for both parties. So, following a peaceful discussion or a dispute, a business partner may end the partnership by selling their shares to the other.
• Retirement. Suppose you are in a partnership with an old business partner about to retire. They can sell their shares to you in preparation for retirement.  

Irrespective of other buyout reasons, a business’s changeover and continued achievement likely depend on the partners’ mutual agreement to proceed with the process.

Understanding the partner buyout financing pros and cons is important. The decision for one partner to retain the business partnership can be challenging as it requires finances to ensure the optimal operation of the business.

That said, despite the process becoming very expensive, the good news is the partner can turn to partnership loans, personal reserves, or sell their partner’s shares to investors to ensure the partnership buyout is a success.

Pros of Partner Buyout Financing

The following are a few pros of partner buyout financing:

Allows You To Continue Running the Business as an Owner

As an entrepreneur, starting over a new business after the dissolution of another can be quite challenging. Thus, knowing what is at stake and if you have the passion for continuing with the current business venture, buying out your partner can prove beneficial.

With the available funds, you can retain and run the business as you see fit and avoid a buyout or a total business dissolution.

Allows You To Buy Out a Damaging Business Partner

Sometimes, business partnerships grow sour. For instance, partnerships may fail because not all partners share the same vision and reasons for existing in the business. Some may lean more toward making money than prioritizing quality and business collaborations, while others resent their business partner for slacking.

Such emotions and feelings towards each other can undermine the business. However, the good news is the partner buyout financing option enables owners who value quality and customer satisfaction over quantity to get back the business that matters to them.

Allows You To Retain Financial Flexibility

There are many options you can use as an entrepreneur, including taking out partnership loans and using self-funds to make the buyout.

However, the cash flow reduction is the main disadvantage of considering self-funding for your partner buyout. The buyout may likely be expensive, necessitating you to use a lot of your money, hence reducing your financial flexibility to manage your business.

However, with a partner buyout loan, you can still have the chance to buy out your partner. It also allows you to use your reserves to make valuable investments in the company and increase your creditworthiness with the loan lenders, ultimately retaining your financial flexibility.

Cons of Partner Buyout Loans

Below are the main disadvantages of partner buyout financing.

Expensive Loan Interests

Partner buyout financing, especially partner buyout loans, is quite expensive. Regardless of the lender you choose, having a long repayment period often means the loan interest rates will be high. 

Thus, you are likely to pay more to the lenders, a lot more than you bargained for when buying out a partner.

Insufficient Collateral

Lack of sufficient collateral for small business enterprises may exclude you from obtaining financing. 

For instance, in the case of partnership buyouts, you may lose valuable assets to the business. Though your business may survive in the long run, your partner’s absence may likely affect the business’s future sales.

Such reasons may make it hard to qualify for bank loans because they are unprepared to deal with businesses with no collateral.

Other Options to Finance Partner Buyouts

Now that we’ve gone over the partner buyout financing pros and cons, you may be looking for other options. 

To make a partnership buyout, your partner hopes to walk away with the equivalent capital to their half of the business. Thus, you are required to make up for the difference.

Although it may seem like a simple process, in hindsight, it can be an expensive and challenging endeavor.

That said, there are other ways to finance partner buyouts. They include:

• Equity financing. You can send your partner’s shares to investors to raise the capital needed for a buyout.
• Self-funding. You can use your savings and funds to buy out your partner.
• Debt funding. You can take out additional loans, such as the SBA 7(a) loans, and accrue more debt but get the funding needed to make the buyout possible.
• Merchant cash advance. The option allows the borrower to receive a lump sum, repayable with a percentage of the business profits. Though expensive, it can finance your partnership buyout.

Conclusion

Businesses facing a partner buyout do so for many reasons. Going with the partnership buyout route can prove beneficial and challenging regardless of the situation. However, no one said it would be impossible. 

With the varying options and alternatives to finance partner buyouts, you do not have to worry about your bank denying your loan application. Instead, your decision to make the partner buyout solely depends on your drive to see through the process and the money to back it up.