When you take out a long-term loan for your business, you gain access to a large amount of money meant for meaningful investments in your enterprise. Most long-term loan repayment periods range from three to ten years. If you get an SBA loan, your term may extend even to 25 years.

What are Long-Term Business Loans?

Long-term business loans are term loans with a more extended period for repayment than you would get with a short-term option. You get access to more advantageous long term business loan terms and rates than with short-term loans.

Businesses usually get long-term loans for large and expensive acquisitions and purchases. Examples include significant equipment and buildings.

Types of Long Term Business Loans

A term loan with a repayment period of between three and ten years is the main kind of long-term business loan. With this kind of loan, you get all the money as soon as you’re approved.

A line of credit is different from a term loan, but it may also be long-term. Like with term loans, there are business lines of credit available that may last up to ten years. With a line of credit, you simply have money available. You aren’t directly given it, and you don’t have to use it.

Qualifying for a small business loan involves certain requirements. To be approved for a long-term loan at ROK Financial, you must have been in business for at least three months. Additionally, your monthly gross sales must be at least $15,000 (or your annual gross sales must be at least $180,000).

What is an SBA Loan?

SBA long term business loans are like regular term loans with one crucial difference: they’re backed by the U.S. government. This backing means the lender doesn’t face any risk, helping bring down the borrower’s interest rates.

SBA loans offer terms as long as 25 years. The minimum term of a long-term SBA loan is ten years. The amount of money you may borrow with a long-term SBA loan ranges from $50,000 to $5 million.

Difference Between Short Term and Long Term Business Loans

If you want to borrow money to cover large investments for your business, such as purchasing major equipment or buildings, you need a long-term loan rather than a short-term loan.

Long-Term Loans Have Smaller Payments

A long-term loan means you’re paying back the loan over a longer period, you will usually make smaller monthly payments than you would with a short-term loan.

Long-Term Loans Offer Lower Interest Rates

You’ll usually enjoy lower interest rates with a long-term loan. This is because these loans have more stringent application requirements, and they are well-secured. For example, if you get a long-term loan to buy a building, the building will be the security for your loan.

Long-Term Loans are Harder to Qualify For

You have to provide documentation showing your personal and business financial situation when applying for a long-term loan. Long-term loans from banks are especially difficult to get. That is why many businesses, especially small businesses, turn to alternative lenders.

The best small business loans are responsive to your circumstances and needs. If you go apply for a loan from a non-bank, alternative lender, make sure it’s reputable.

How to Determine the Repayment Period of Long Term Business Loans

When it comes to small businesses, long-term loans usually have repayment periods that range from three to ten years. However, there are certain options, such as SBA loans, that have much longer terms. In some cases, these loans may have 25-year terms.

Several different factors will influence how to determine repayment periods for long-term business loans. Examples include:

• Financial information for your business
• What the funds will be used for
• Lending institution type
• Terms and guidelines specific to your lender

If you get a long-term business loan through an alternative lender, the repayment period is likely to be between one and five years. If you manage to qualify for a bank loan for your business, the term may be a bit longer, at an average of between five and seven years. With SBA loans, the term usually ranges from six to 25 years.

What is the Usual Repayment Period for Long Term Business Loans?

There is no such thing as a typical repayment period for long-term business loans. Why? As touched on earlier, several factors go into deciding your long-term loan repayment period. Every business is different and has a different financial and credit profile, and lenders take this into consideration when formulating the correct repayment period.

Long Term Business Loan Interest Rates

The interest rate for your long-term business loan will depend on a variety of factors. To put things simply, the higher the risk lending to you presents, the higher your interest rate will be. If you want to enjoy low-interest rates, you must show you are reliable and able to repay your loan.

Interest rates for business term loans average between two percent and 13 percent. If you get an SBA loan, however, the range is between 3.5 percent and 11 percent. As we see, SBA loan interest rates are a bit more predictable.

How to Get a Long Term Business Loan

The first step is to understand all the small business loan requirements and contact ROK Financial. We offer long-term loans with up to 10-year terms. Have questions? Talk to one of our Business Financing Advisors. And when you’re ready to apply, complete our quick and easy online application.

Approximately 82 percent of small and medium-sized enterprises fail due to cash flow problems. Of course, several factors can affect your cash flow. An aging accounts receivable or invoices that are past their due dates may account for a fair share of your cash flow challenges. 

Luckily, there are financial tools and different forms of asset based lending you can use to manage your cash flow gaps. Invoice factoring is one excellent solution to your cash flow challenges if you’re a business owner with net 30, net 60, or net 90 terms with buyers.

Read on to find out whether invoice factoring is right for your business and how to compare invoice factoring vs line of credit.

What Is Invoice Factoring?

Invoice factoring is the financial solution commonly referred to as accounts receivable factoring. In this form of financing solution, a business sells their accounts receivables (pending invoices) to an external financing company (factor) at a reduced price. The invoice factoring company then makes cash immediately available to you.

Typically, the factor gives you approximately 70 to 90 percent of your unpaid invoices upfront, instead of you having to wait for 30, 60, or 90 days. Once the factoring company collects the dues from your customers, it pays you the rest of the money. 

A factoring fee applies as payment for the factor’s service. Remember, invoice factoring is not a loan. It’s simply a quick way of generating cash today to cover the costs of your day-to-day operations or expenses.

How Does Invoice Factoring Work?

Although the procedure varies from one provider to another, it starts with your business applying for invoice factoring. This is no different from applying for any other type of funding.

So, how do small business loans work? Once the factoring company approves you for a factoring agreement, which typically takes about a day, you’ll have to submit your invoice to the factoring company. In exchange, the factor transfers the agreed cash to your business bank account within no more than two days. 

The quality of your invoices and the invoice factoring startups you choose to work with determine the percentage of cash you get upfront.

The good news is that no interests apply to invoice factoring. It’s not a loan. The factor pays you the remaining amount minus the factoring fees once your customers pay their outstanding invoices.

Factoring companies will still welcome you if your business has poor or no credit. That’s because they’re more interested in your customers’ financial stability during the approval process. Therefore, as long as your customers have a reputation or solid track record of paying their invoices timely, chances of approval for invoice factoring are high.

Invoice Factoring Example

Let’s say you own a store and sell goods to another business on credit. If the goods are worth $20,000, you write them an invoice of this amount. 

If your customer agrees to pay off the invoice in 60 days, but you need this cash in two weeks to cater for expenses such as paying your workers, it means you have cash gaps.

Now suppose you turn to invoice factoring, and the factor agrees to buy your invoice, you can expect the following terms:

• The company buys for $18,000 in cash.
• An invoice factoring fee of four percent applies. This amount equals $800.
• The factor deposits 80 percent of the invoice to your business account within two days. That’s $14,400.
• After the factoring company receives the payment from your customer after 60 days, it pays you the balance it owes you ($ 3600).

Pros and Cons of Invoice Factoring

Below are the advantages and disadvantages of invoice factoring for small businesses.

Pros

The benefits to invoice financing for small businesses include the following:

Quick Cash

Invoice factoring can get you the money you need to run your day-to-day operations within two days. Unlike bank loans which can take a long time to approve and finance, you can receive same-day funding. That way, you can still improve your cash flow, helping your business grow while at the same time retaining your loyal customers who prefer longer payment terms.

Approval Is Easier

Poor or lack of credit, limited operating history, or lack of collateral can hinder you from acquiring funding from sources such as banks. Fortunately, invoice factoring can provide you with financing even in such situations. Factoring companies focus on your customers’ creditworthiness and the value of the invoices.

No Collateral

The invoices are enough collateral. So, you don’t have to worry about using your assets, such as inventory or real estate, as security for the funding.

Cons

Online invoice factoring has some negative qualities as well, which are outlined below.

High Cost

The fee can be a limiting factor. A factoring company will charge an invoice factoring fee of one to five percent of your total invoice amount. This is a significant amount. You’ll need to consider if the tradeoff for instant cash is worth such a loss. 

Limited Control

You leave it to the factor to collect on the invoices. That means you lose direct control of your customers. Always ensure the factoring company you’re working with is fair and ethical when handling your customers.

Eligibility for Invoice Factoring Largely Depends on Your Customers 

If their payment history is solid, the risks on the factoring company’s side are low, and they’re likely to approve you. If the situation is the opposite, chances of the company taking you are slim. The risk might be too much.

Invoice Factoring Fees

Cost is a crucial factor when considering factoring as a source of your business funding. As mentioned earlier, you’ll incur a factoring fee of one to five percent. Negotiations about the percentage will revolve around several factors, including:

• The factoring company you choose
• The number of invoices you’re factoring
• Your industry
• Your customers’ creditworthiness

You may have to pay additional fees in addition to the basic factoring fee. These include processing, monthly minimum, ACH, application, and servicing fees. These costs also vary from one provider to another.

What Is the Difference Between Invoice Factoring and Invoice Financing?

The difference between invoice factoring and invoice financing is not significant. 

You see, instead of selling your company’s invoices to a factor, you use your outstanding invoices as collateral, allowing you to get cash in advance.

Also, the responsibility of collecting invoice payments lies with you. Once your customers pay you, you’ll repay the lender the amount you owe them plus the agreed interest and fees.

No doubt, invoice factoring might be an ideal financing solution for a business line of credit construction. It will work well for you if you require fast funding for your business. Just remember there’s a fee you must pay upfront, and your clients must be creditworthy. 

When studying the economy, three interest rates control lending to banks, mortgages, and consumer loans. The three terms that often get confused are federal funds, prime, and discount interest rates, which helps with understanding SBA loans. 

Anyone wanting to know how the economy works needs to know what are the discount rate, the federal funds rate, and the prime rate and why they are important. 

What Is the Discount Rate?

The discount rate is an interest rate the Federal Reserve charges for discount loans. This is the rate the Fed sets, so member banks can borrow money overnight if they need funding. The Fed sets the rate to allow banks to borrow so banks don’t fall below their mandated reserve levels. 

The discount rate is also called the primary credit rate. The Federal Reserve sets this rate so banks can borrow money if they lend too much or have too many withdrawals on any given day. Banks borrow the money at the discount rate overnight to cover their overdrafts. It also helps with PPP tax explained. 

Discount rates also affect mortgage rates. When the discount rate increases, the mortgage interest rates increase. The 10-year bond rate also affects mortgage interest rates. 

The prime rate also is affected by the discount rate. When the prime rate increases, consumers tend to slow their demand for new loans. The result is a slowing housing market and economy. When the Fed lowers the discount rate, the prime rate decreases, and banks can choose to lower their mortgage interest rates, too. 

The Federal Funds Rate and the Prime Rate and Why Are They Important? 

The Federal Reserve Bank also sets the prime and the federal funds rate. Banks can borrow from the Federal Reserve, and they can borrow from each other. With the Federal Funds Rate, banks can borrow from each other and charge interest. 

What Is the Federal Funds Rate?

The Federal Reserve sets a target rate and manages it by buying and selling government bonds. They use the federal funds rate to control inflation by managing available funds that banks borrow from each other. They can use the reserves to give more loans to keep the economy going. 

What Is the Prime Rate?

Along with the Federal Funds Rate, the prime rate is also important. This rate is for borrowers who have the best credit and the lowest default risk. Individual borrowers usually don’t get loans at the prime rate, but large corporations do. Because corporations rarely default, banks can charge the lower prime rates rather than the higher rates they charge to high-risk customers. 

The prime rate is also a benchmark for consumer loans. Commercial banks put an additional interest rate on top of prime when they award loans to their customers. This additional amount is called a margin. 

For example, if prime is two percent and banks add a margin of three percent, borrowers pay a five percent interest rate on their loan. Banks use credit scores to determine how high to set the margin.

Why Do These Rates Matter?

The two rates let the Federal Reserve speed up or slow down the economy. When they rate the Federal Funds Rate, banks stop borrowing from each other. They also slow their lending to consumers and corporations. 

When the Fed wants to speed up the economy, they lower the Federal Funds Rate to get consumers spending and banks lending. Mortgage rates do not have to follow suit because other factors affect mortgage lending. 

How Is the Federal Fund Rate Established?

The Federal Fund Rate fluctuates based on the supply and demand. An organization called the Federal Open Market Committee determines the rate based on a target that depends on funds and what banks need to cover their loans. 

Banks need to have a reserve requirement for their deposit liabilities. The reserve funds sit in the Federal Reserve. Interestingly, all of the dollar amounts are on paper, as the Federal Reserve and banks do not exchange physical cash. Bank reserves must be a percentage of their total liabilities. Often, the percentage is as small as three percent. 

Who Sets the Federal Fund Rate?

The Federal Reserve also sets a target for the Federal Fund Rate by moving U.S. Treasury securities. As the Federal Reserve Bank buys more securities, the Federal Fund Rate falls. The opposite happens when the Fed sells its securities, as bank reserves fall, causing the Federal Funds Rate to rise. 

The process of setting the Federal Fund Rate is complicated, as it sets important monetary policy. 

Federal Funds Rate vs. Discount Rate

Since the Federal Funds Rate and the Discount Rate do similar things, it is helpful to understand the differences. The Federal Funds Rate is the rate that banks, credit unions, and other financial institutions charge each other for short-term, overnight loans. When the Federal Reserve Bank gives a loan, they charge the Discount Rate.

Is the Federal Funds Rate Higher Than The Discount Rate?

The Federal Funds Rate tends to be lower than the discount rate. Looking at the Federal Funds Rate vs. Discount Rate vs. Prime Rate, the lowest is the Federal Funds Rate. When the Federal Reserve Bank charges the Discount Rate, the percentage serves as collateral, so the bank repays the Fed. 

What Is the Relationship Between the Federal Funds Rate and the Prime Interest Rate?

The Federal Funds Rate does not directly affect the Prime Rate. However, Prime Rate tends to change if the Federal Funds Rate changes. The Federal Funds Rate and Discount Rate work together to help financing institutions stay flush with cash. 

Why Doesn’t the Federal Reserve Target the Prime Interest Rate?

The Federal Reserve gives banks some leeway with the Prime Interest Rate. Banks use the Federal Funds Rate as the target, then adjust accordingly. The prime rate is 300 points or three percent above the Federal Funds Rate. Variable interest rates are connected to the Prime Rate, and banks can set their own prime rates. Banks can also choose the published Prime Rate. 

What Is the Prime Rate Today 2022?

The Prime Rate today is 3.25%, 300 points above the Federal Funds Rate, which is between 0% and 0.25%. This rate determines how banks set their prime rates because they don’t have to follow a set rate, so they can set variable and fixed rates. 

Why Learn About Economic Interest Rates

Understanding the difference between federal funds, prime, and discount interest rates helps consumers understand how the economy moves. When the federal funds’ rates change, bank deposits like savings accounts and money market accounts have changes in interest. It has a major effect on adjustable rate mortgages. 

The barber business is an excellent opportunity for anyone who wants to be their boss and start making money. It’s also a perfect choice for those who want to work on their schedule and make money doing what they love.

Since the beginning of time, the barber industry has been around, so it is an established career path. Barbershops are everywhere in almost every city, town, or village across the country, which means there’s plenty of growing room for new businesses as well as opportunities to grow into more prominent locations with more customers coming through the door each day.

There are many different aspects of running a successful barbershop business: marketing, customer service skills, leadership abilities, and even some basic hairdressing knowledge. But you don’t need to be an expert in all of these areas to get started – you can learn as you go.

How to Get More Clients for Your Barber Business

If you’re serious about growing your barber business, you first need to get more clients. Here are some ways to do that.

Get Involved in Your Community

One of the best ways to get more customers coming through the door is to get involved with your local community. For example, sponsor a Little League team, hold a charity event, or set up a local fair or festival booth. Getting your name out there in the community will help you form a strong bond with your customers and be a great way to get started.

Focus on Customer Service

No matter what kind of barbershop business you have, customer service will be one of the most critical factors in whether or not it succeeds. If you want to know how to attract customers to a barbershop, you need to make them feel welcome, comfortable, and unique.

It means greeting them with a smile when they walk in, remembering their name, and taking the time to chat with them about their day.

Offer Discounts for Loyal Customers

Another way to show your customers how much you appreciate them is by offering discounts for those who are loyal to your shop. It could be a percentage off their total bill, a free haircut for every ten that they get, or even something as simple as a loyalty card that gives them a free sample size of their favorite hair care product.

Learn from Other Businesses

Even if your barber business is new, other companies out there have been around for a while and have figured out what works and what doesn’t. Take the time to check out their website and social media pages and see what they’re doing. Then, try some of their ideas in your shop if you like what you see. Just make sure to tweak them a bit to fit your own business and customer base.

How to Increase Revenue in a Barbershop

If you want to run a successful barbershop business, you’re going to need an effective strategy for increasing revenue. To do this, you’ll need to look beyond the immediate customers and work on finding new customers just like if you’re interested in how to grow an electrical business or how to grow a dropshipping business.

Another thing you could do is start offering various hair and grooming services to attract a wider clientele. For instance, if your shop is next to a gym or athletic club, offering haircuts for men and boys could be highly beneficial in attracting new customers and thus increasing revenue.

The Best Barber Shop Marketing Strategies

There are many different ways to market your barbershop business, but the best ones are the ones that get results. Here are some of the most effective marketing strategies for this industry.

Social Media Marketing

One of the best ways to market your barbershop business is through social media. Platforms like Facebook, Twitter, and Instagram offer a great way to connect with potential customers and keep them updated on what’s going on in your shop. You can also use these platforms to run promotions and giveaways, which can help to attract and retain customers.

SEO Marketing

Another great marketing idea (even if you want to know how to grow  an ecommerce business)  is search engine optimization (SEO). SEO includes a wide variety of marketing strategies that can help you show up in more searches and attract the attention of new customers. It works by making your website appear higher in Google and other search engines so that it’s easier for people to find. It can help build brand awareness and increase revenue.

Increase Sales through Email Marketing

If you want to boost your sales, email marketing is the way to go. With this type of marketing, you can target potential customers who are likely interested in what you have to offer. One of the benefits here is that it allows you to get personal with customers and see what they want or need before providing it. As a result, it can help you retain customers and put more money in your pocket.

Barber Shop Marketing Plan

It’s essential to have a plan for marketing your barbershop business. It will help you to stay organized and focused so that you can achieve your desired results. Here is a basic outline of what your marketing plan should include:

• Analysis of the current market situation
• Target market analysis
• Product/service offering
• Marketing objectives
• Tactics and strategies
• Budget allocation
• Evaluation and measurement

As you can see, a lot goes into creating an effective barbershop marketing plan. However, if you take the time to put in the effort, you’ll be able to see a significant increase in revenue and customer base by following your plan.

Conclusion

If you want to run a successful barbershop business, you must take steps to increase your revenue. Many online and offline businesses grow by following some of the advice listed above.

By implementing some or all of these tips, you can help your barber business reach new heights. Don’t worry about doing all these things at once. Instead, focus on doing one thing every week, month or quarter until your barbershop business is thriving.

You might have heard people talk about revenue-based financing as “royalty-based financing.” Put simply, revenue-based financing is a loan with repayment terms based on your revenue. You don’t need to put down any collateral, and you won’t have to worry about your debt-to-income ratio. 

Just because you’ve just started your business doesn’t mean you have to stay small. There are exciting yet practical financing options out there for you, and one of these is revenue-based financing. With these loans, you only make payments when you bring in revenue. Let’s discuss what’s involved in qualifying for a small business loan and how these financing options work.

What is Revenue Based Financing? 

Perhaps you’ve guessed what revenue-based financing is based on the name. Instead of needing collateral  (in other words, assets) to secure a loan, your business revenue is the basis of your financing. 

In other words, you agree to pay the lender a set percentage of your revenue over a specific term, until your loan is paid off. When looking at revenue-based financing, find out the rates of prospective lenders. The largest amount you will usually have to pay is between three and five times how much you borrowed. 

You will know the exact percentage rate you will pay when entering the loan agreement. As well as a percentage of your revenue, you must pay a set multiplication of the loan amount. 

Why Revenue Based Financing Is Important

Revenue-based financing gives options to businesses that may not qualify for other kinds of loans. Alternatively, businesses may qualify for traditional loans, but the repayment burden may jeopardize their well-being. 

Many businesses seek revenue-based financing for growing their business through activities such as expanding the team, improving marketing and sales, and developing new products. 

How Does Revenue Based Financing Work? 

Revenue-based financing is a fantastic tool for businesses with fluctuating revenue. You don’t have to worry that your monthly payment will be too much, as it will change with your revenue. When your business grows and you get higher revenue, you will make larger payments.

Payments will always be in line with the rate you agreed on in the revenue based financing agreement. 

Its flexibility is the most attractive feature of revenue-based financing. Starting a new business brings a lot of uncertainty, and there are plenty of ups and downs. With other kinds of loans, you have trouble on your hands if you can’t make a payment. However, if you choose the revenue-based financing work, you only pay a proportion of the money you bring in. 

Revenue Based Financing Pros and Cons 

Make sure to consider all aspects of this type of financing while researching how to get a small business loan.

Pros

Like every other financing option, revenue-based financing has both pros and cons. Let’s begin with the many advantages. 

1. Flexibility

You’ll never be faced with overwhelming or unaffordable payments if you go with revenue-based financing. 

2. Focus on Growth

With revenue-based financing, you’re encouraged towards growth. However, you won’t end up with the toxic pressure that sometimes comes with traditional loans. With a revenue-based loan, you will only pay if you have the revenue. 

3. No Collateral Needed

You won’t need to offer any collateral to get a revenue-based financing loan. This lends better peace of mind for many business owners. 

4. Keep All Ownership 

You always retain full ownership of your business and its assets throughout the revenue-based financing process. 

5. More Affordable than Equity Funding 

Maybe you’ve thought about looking for equity funding, such as funding from angel investors or VC funding. While the large amounts of money available on this route seem transformative, you will have to pay between ten and 20 times what you borrowed. This kind of burden is enough to bring down a business. 

Cons 

Like any other kind of loan, revenue-based financing does have some disadvantages. Let’s take a look at them below. 

1. You Need Revenue

This sounds common sense, but it’s an obstacle for new startups that haven’t yet started bringing in revenue. 

2. You Must Make Monthly Payments

Having to make monthly payments is a problem if you don’t yet have any revenue. 

3. Less Money Available

You won’t get the kind of loan sizes from revenue-based financing that you may be able to from venture capital. 

The Best Revenue-Based Financing Model for Startups

Startups sometimes combine revenue-based financing for startups with other kinds of financing to help reduce risk. While revenue-based financing lenders look for existing revenue, you may not need to be profitable. 

If you have a start-up, look for revenue-based financing that fits your business. In other words, if you have limited revenue, look for a revenue-based financing model that will accommodate your current business reality. 

Revenue Based Financing Interest Rates

Regarding revenue-based financing, information on interest rates is generally contained in the repayment caps. These caps tend to range between 1.35x and 3x. To find out what the total debt will be, you simply multiply the financing amount (also known as the principal debt) by the agreement’s repayment cap. 

How to Prepare for Loan Application

Now, we’ll provide a quick guide on how to qualify for a small business loan.

Get all the necessary documentation ready for when you apply for any loan. Of course, your business revenue is the most crucial factor with a revenue-based loan. But you must document and prove this, and there are other kinds of documents you will probably need to produce, as well. 

When you apply for your revenue-based financing loan, have all your business information on hand. Of course, lenders will require your revenue data when deciding on your loan application. Some of these may include: 

• Business balance sheet
• Articles of incorporation, if applicable
• Business bank statements
• Personal bank statements
• Income statements
• Personal identification
• Business tax returns
• Personal tax returns
• Commercial leases, if applicable 

Final Thoughts

There’s no doubt about it; revenue-based financing is an exciting option for many businesses, especially small businesses with established revenue. But remember, you need professional advice and guidance when making financing and loan decisions. That is where Business Financing Advisors come in with their expertise and experience. The best loan providers offer advice and information free of charge. 

Being an entrepreneur is challenging, and one of the biggest hurdles is getting the financing needed to start a business. 

The best small business loans can give entrepreneurs the funds to start a company, but approval isn’t always easy. Some entrepreneurs consider personal loans as a way to get the seed money to start their businesses. Is that a smart move financially? Let’s look.  

What is Personal Business Loan? 

A personal business loan is a personal loan that’s used to start a business. These loans are based on the entrepreneur’s credit, and the entrepreneur is personally responsible for paying the loan back as agreed. This loan will show up on the entrepreneur’s credit report and not the business’ books. 

Benefits of Using Personal Loan to Start a Business 

Using a personal loan as fuel to power a startup has its advantages. Among them are: 

Flexibility 

Personal loans can be used however you’d like. This gives a business owner options in how to spend the money from a personal loan. 

A Business Plan Isn’t Required 

Unlike a business loan, small personal business loans do not require a detailed business plan that will be pored over by bankers. 

Smaller Loans are Available 

Not everyone needs a million dollars to launch a business. Some businesses may only require a few thousand dollars to get their start. Entrepreneurs starting small businesses from their homes can get the smaller amounts they need through a personal loan. Bankers may not be interested in writing business loans for smaller amounts.  

Lower Rates 

Based on credit scores, a personal loan could carry an interest rate that’s much lower than that of a business loan or a business credit card. 

Fast Financing 

Personal loans move much faster than business loans. The funds from a personal loan can be transferred to a business owner in just a few days. 

How to Get Personal Business Loans for Bad Credit 

Bad credit can happen to anyone. While having a sub-par credit rating can make getting a personal business loan more complicated, it doesn’t make it impossible. Some lenders specialize in personal loans for people with bad credit. A personal business loan for those with bad credit will have a higher interest rate due to increased risk for the lender. 

Business Loans vs Personal Loans 

Business and personal loans both have advantages and disadvantages, so it’s essential to know their differences. 

Business Loans 

Business loans are made to business owners through their companies. 

Pros 

• Interest paid on business loans is tax-deductible. 
• More significant amounts are available through business loans. 
• Business loans keep an entrepreneur’s finances separate from those of the company. 

Cons 

• Qualifying for a small business loan is more complex than getting a personal loan. 

Personal Business Loans 

A personal business loan is a loan that an entrepreneur takes out personally to start a business. 

Pros 

• Personal business loans are easier to get and are available online. 
• Funding through personal business loans is complete within days of application. 
• Personal business loans may have a lower interest rate than business loans. 

Cons 

• Entrepreneurs’ credit is involved in a personal business loan, so their personal finances are at risk. 

Alternatives to Personal Loans for Business 

Personal business loans and business loans are just two ways to get financing for a startup. Figuring out how to get a business loan without collateral, startup business loans with no revenue, or how to get a loan to start a business from the government can include these alternatives: 

Business Line of Credit 

A business line of credit is like a business loan but has more flexibility. The business owner can borrow up to a limit, repaying that amount with interest. This gives entrepreneurs more options, especially if they are unsure how much financing will be needed.  

Business Credit Card 

A business credit card is much easier to get than a business loan. Business credit cards, like personal credit cards, offer revolving credit for short-term needs. Rewards such as cashback or travel points are a plus. 

Apply for SBA Loan

Young existing businesses can get small business funding government small business loans. These are usually issued for companies that have a year or more of operating history so the lender can assess the loan’s risk. Plan on providing balance sheets, tax returns, and income statements when applying. 

Merchant Cash Advance 

A merchant cash advance is an infusion of cash based on the business merchant’s account credit sales. Lenders will look at a business’s credit card sales to determine the business’ ability to repay the cash advance later. 

Because this is based on sales, it is not an option for real startup businesses. Fees for merchant cash advances are higher, but companies can get needed funding fast.  

Accounts Receivable Financing 

Businesses can get financing based on outstanding invoices, with the company selling its accounts receivable to the lender minus the processing expenses.  

Do Business Loans Affect Personal Credit? 

While it may seem like a business loan would be strictly business, business loans could affect an entrepreneur’s credit, especially if the entrepreneur personally guaranteed the business loan. This is common in sole proprietorship situations or when the business owner is the only employee. 

Should You Sign Personal Guarantees on Business Loans? 

A personal guarantee is an individual’s promise to repay a business loan. Usually, a business owner or founder is asked to do this if taking out a business loan. Approval of business loans without personal guarantee can be more difficult. 

The guarantee means that the guarantor will pay off the loan if the business cannot repay it. Sign a contract if required.

Get Business Funding Fast 

The ideal situation is for personal finances to be separate from business funds, but that isn’t always possible. Personal business loans are just one of the ways entrepreneurs can get the funding needed to launch a startup. All business financing options have advantages and disadvantages, so intelligent entrepreneurs and business owners will weigh choices carefully. 

It’s no secret that video is the number one marketing tool for businesses. More businesses are looking to incorporate video into their marketing campaigns, so if you’re interested in starting and growing your own video production business, now is a perfect time.

In this article, you’re going to learn how to start and grow your own video production business, how to promote your business, and how to find clients. 

How to Start a Video Production Company

Before you start trying to reel in clients, no pun intended, there are a few steps you need to take to get everything in order. 

You need to make sure you have a solid business plan, funding, team, and equipment.

Create a Business Plan

The first thing you need to do is iron out the details of your business plan. This includes creating a budget, defining your target market and business model, and branding your business based on who you’re trying to attract. 

It’s a good idea to brainstorm different sources of income. You may want to plan a stream of passive income so you’re still creating revenue in between clients or during the slow seasons, depending on your target market. 

You also want to take into consideration all the steps to make your business legal and legit. This includes getting an LLC and purchasing insurance. 

Funding

Once you figure out the budgeting and have an idea of how much money you’ll need to start your business, you need to brainstorm some ways to start funding your business. 

There are a few different ways you can do this:

• Fund the startup yourself, or get help from a sponsor or relative.
• Crowdsource your funding through social media.
• Get a business loan from a bank.

There are pros and cons to each approach, so carefully weigh your options before you decide. 

Get a Team or Crew Together

Running a video production company is nearly impossible to do solo. It’s important to have a team so you don’t get overwhelmed. 

If you don’t already have a crew in place, list out all the different roles that need to be filled in your company. When doing this, make sure you’re focusing on hiring people who are good in areas you’re not.

Equipment

Before you go crazy and buy a bunch of equipment, look at your business plan and list out what you need for the services you’ll provide. As you start, keep this at a bare minimum and only get the essentials. 

You can expand and upgrade your equipment as you start to bring in steady income. 

For now, focus on:

• A light kit
• A decent camera
• A tripod or rig – depending on the type of footage you’re wanting to create for your clients
• A good quality microphone 
• A computer and video editing software

It’s worth noting that sound is more important than video quality, so be wise in your spending and get a good quality microphone and recording system. 

Tips on How to Market a Video Production Company

Now you have a business plan, funding, your crew, and equipment, but it would all be pointless until you have a plan to get your name out there.

You need 4 online assets to help you get the word out. A website, a Google My Business profile, an email list, and a social media account to promote and network your business.

Again, this is something you can – and should – expand in the future, but for now, it’s better to focus heavily on the bare minimum instead of spreading yourself too thin across 5 or 6 different social media sites.

A Website

I cannot stress enough how this does not need to be high-end and fancy with difficult coding. You can get a simple website at Wix and use premade templates. 

If a website is not doable, you can start with just a Facebook page that functions as your website. A Facebook business page has all the essential elements to inform people who you are, what you offer, prices, and who your target audience is.

Get on Google

Set up a Google My Business profile for your business. It’s really easy to do and takes less than an hour. This is a great way to get your business to pop up on a search result when someone is looking for your services in your local area.

Set Up an Email List

An email list is an invaluable tool for every business, especially if you’re marketing to other businesses. Social media algorithms change and affect your organic reach to your audience, but your email list will always receive your latest news and promotions. 

You can entice your audience to sign up for your email list by offering them a coupon or promotional offer in exchange for their email address.

You can use a service like Mailchimp or Mailerlite. These services are free for your first 1,000 email subscribers so they are great for beginners. Be sure to send out weekly or bi-weekly newsletters so your potential clients won’t forget about you when they need video production services.

Set up 1 Social Media Account

If you decide to use a Facebook page in place of your website, you killed 2 birds with 1 stone. But if not, then you should choose one social media outlet to promote and market your business.

If you’re marketing to customers who are not a business, consider using a platform like TikTok or Instagram. However, if you’re marketing to other businesses, setting up a LinkedIn profile would be a better choice.

How to Get Clients for Your Video Production Company

Once you get your website, social media, email list, and Google My Business profile set, it’s time to start booking clients. 

Here are a few tips on how to get clients:

• Use targeted Facebook Ad Campaigns to target the right audience you want to market to.
• Go to networking events for your target market. You can find these events through Meetup.com. 
• Use your existing personal social media account to ask your friends and family to spread the word. 

It’s also a good idea to hire a copywriter and social media marketer to help you with your marketing campaign.

Conclusion

The high demand for video services makes this a lucrative business. Whether you’re creating video ads, training videos, or filming a live event, the need for video services won’t be going away any time soon.

The funeral business is just one part of the overall death care industry. As an industry, death care includes funeral homes, coffins, burial lots, and memorial-related products. Many funeral homes handle traditional burials and cremations. The latter consists of selling urns and potential internment space, among other more conventional funeral services.

This article discusses funeral business statistics and death care industry trends in the United States. It also examines the future of the funeral industry. Let’s start with the latest overall funeral business statistics.

Funeral Business Industry in the US ‒ Market Research & Statistics 2021

According to IBISWorld, the total market value of U.S. funeral homes in 2021 is $16 billion. This market value represents a growth rate of 0.4% in 2021. However, the overall market growth of U.S. funeral homes has declined by 0.8% since 2016. The changing business environment of the funeral industry because of the effects of the COVID-19 pandemic has increased demand.

This increased demand has, unfortunately, come from an increase in the number of deceased. At the same time, public health restrictions and social distancing protocols have decreased the size of funerals. Fewer people are attending in person and more funerals or memorial services are being live-streamed on platforms such as Facebook.

Despite challenges related to the pandemic and declining growth, the funeral business industry ranks 13th in the United States within the “Other Services” category. The business is ranked 425th overall in the U.S.

Funeral Business Trends 2021 in the US

Funeral industry statistics 2021 and funeral trends 2021 reveal that the number of funeral homes is on the decline. In 2004, there were 21,528 homes and by 2018 that number had decreased to 19,322. In 2021, the number of homes listed in the National Directory of Morticians Redbook has declined even further to 18,765.

Besides the effects of the pandemic, macroeconomic pressures have led families to spend less on funerals. Since cremation costs less than a traditional burial, many loved ones have turned to this option as a way to save on funeral costs. Less spending on funeral expenses has led to a downturn in profits for the death care services market.

According to the U.S. Bureau of Labor Statistics, job growth in the funeral services industry is expected to be 4%. Similar to general funeral business statistics, this reveals a slower-than-average growth rate or decline when compared with related industries or overall U.S. benchmarks. By comparison, all job openings in the United States are projected to grow at 8% through 2030. Still, about 4,000 openings are expected each year, according to funeral services market research.

Death Care Services ‒ Statistics & Facts

According to Statista, the cemetery services market was valued at $4.45 billion in the United States as of May 2021. Funeral business facts show that workers tend to fall into the following categories: funeral home managers, funeral services workers, and morticians, undertakers, and funeral arrangers. The average pay for all death care services employees is $58,170 per year, or the equivalent of $27.97 per hour.

Funeral home managers, on average, make $74,200 per year. Morticians, undertakers, and funeral arrangers make the least at $54,100 per year. However, these average salaries are above typical pay for all industries. The typical U.S. worker, regardless of sector, takes home $41,950 a year.

Funeral Homes Industry Analysis

A funeral homes industry analysis shows that the acceleration in deaths from the COVID-19 pandemic has contributed to recent growth. However, that growth is relatively modest and impacted by overall declines in spending on funeral expenses. The number of funeral homes is decreasing, likely because of a loss of profits.

When looking at how big the funeral industry is, there is a downward trend in market value. It is more difficult for a large number of businesses to survive in a declining industry. A majority of funeral homes in the United States are privately owned.

The ins and outs of your business financials include a need to generate enough profits to remain in business, which could also explain the less-than-average growth in employment. Labor costs tend to eat up a sizable portion of any organization’s overhead.

Industry Market Size for Funeral Business in the US

There are some conflicting funeral business statistics regarding market value and size. Funeral services market reports show an annual value between $16 billion and $20 billion. Approximately 2.4 million funerals happen each year.

What is consistent is the reported increase in cremation rates, with 42% of American families choosing this option as of 2014. This is projected to grow to 60%, as some states, such as Hawaii and Nevada, already have cremation rates of more than 60%. Some of the states with the lowest cremation rates include Kentucky and Alabama.

Biggest Companies in the Funeral Homes Industry in the US

A whopping 80% of funeral homes are privately owned, with 20% being publicly owned. The three publicly-listed companies in the United States are Carriage Services Inc., Service Corporation International, and Stonemor Partners L.P. Service Corporation International owns an estimated 15%-16% of the funeral services market.

This percentage range is according to annual revenues, whereas the company’s market share is 10.8% when measured by the number of funeral homes. The other two companies, Carriage Services and Stonemor Partners, each have between 1% and 2% of the market’s share. Of note, Stonemor Partners concentrates on cremation services while Carriage Services focuses on traditional burial.

Future of Funeral Industry

The funeral homes industry in the U.S. won’t be going away as long as there is a continued demand for funeral services. And demand for funeral services tends to coincide with the amount of the country’s aging population and general economic health.

As the Baby Boomer generation continues to age and the long-term effects of the global pandemic are felt, there will be a need for funeral services.

However, the shift toward cremation versus traditional burial will likely continue. Learning how to choose a business entity means considering trends and industry projections.

Everyone will have medical bills at one time or another. Whether your customers use credit or debit cards, your office needs the best processing service for several reasons.

Whether it’s a one time or recurring payment, the information needs to be safe and secure, as does the equipment used for point of sale.

There’s even more to think about, like why you need medical credit card processing, the best credit card processing for small business 2022, and features a good healthcare payment processor should have, such as a revolving line of credit.

Why You Need Medical Credit Card Processing

First of all, a medical credit card is one that can only be used for eligible medical, dental, healthcare, or even veterinary expenses. If you’re approved for one, a medical credit card can indeed help finance healthcare expenses that insurance and the patient’s savings account can’t cover.

Why do you need the best credit card processing for medical office? Why do medical business financing options matter so much? In short, it will make it easier for your patients to pay you. Increasing the contact your customer comes in contact with your brand during the payment process can mean reducing costs, increasing cash flow to your office, and earning trust from your patients.

The Best Healthcare Credit Card Companies in 2022

Here are the best credit card processing companies for healthcare, broken down with important details to keep in mind, including credit card processing for small business no monthly fee.

1. Payline Data

Payline Data is a great option for credit card processing for medical office, from doctor’s offices to clinics. They offer a Quickbooks online payment portal, as well as regular point-of-sale equipment for in-office payments.  On top of that, they offer multiple mobile payment processing choices.

The next part is more for the office and less the ease of payment for the patients. Payline Data offers Cloud-based business and inventory management. That can make a day at the office a little bit easier.

In most cases, the company is able to offer interchange-plus pricing, as well as a month-to-month agreement with no early termination fees.

The good news is Payline Data has been in business since 2009 and since then, it has kept a clean complaint record. It also holds a grade A with the Better Business Bureau.

2. Host Merchant Services

Host Merchant Services is known for being well suited for hospitals, clinics, and other healthcare providers, but also for its immense praise for its customer service.

HMS primarily offers web hosting, point of sale solutions, along with mobile credit card processing and business class email.

Another reason the Better Business Bureau and Card Payment Options gave Host Merchant Services credit card processing an A+ is because they specialize in e-commerce for healthcare organizations that strongly rely on web presence.

3. Fattmerchant

Fattmerchant, which has been active in healthcare credit card processing since 2014, is efficient in serving all standard risk healthcare settings with both EMV-compatible countertop and virtual terminals. Other conveniences  Fattmerchant offers are online payment capabilities, online shopping cart, and mobile phone processing.

Fattmerchant is best known for its numerous pricing plans at varying rates from flat rates to fixed ones. Merchants can choose whether or not they are charged a percentage markup.

All these amenities are the reason the Better Business Bureau rated them A+ and an A by Card Payment Options.

4. CDG Commerce

CDG Commerce offers several amenities, including payment processing for in-person, online, and mobile healthcare services.

The Better Business Bureau gave it an A+ rating for plentiful positive ratings. That most likely stems from providing a free payment gateway, automated fraud alerts, and custom reporting. They also offer Quickbooks integration, AVS, and chargeback notifications.

CDG Commerce also offers month-to-month agreements with no early termination fee to its merchants. Rate quotes will vary depending on the business type and processing history.

5. Dharma Merchant Services

Dharma is best suited for merchants that process in excess of $10,000 a month, which is why it’s suited for most healthcare providers. It has a very confident list of customer service comments along with rates and fair agreements.

Dharma Merchant Services also offers countertop terminals, mobile device payment processing, and an online payment gateway.

Healthcare providers may find it even more tempting to choose them when they find out that Dharma donates a percentage of its profits to a non-profit organization of its choosing annually.

Dharma Merchant Services has received especially high scores from the Better Business Bureau and Card Payment Options, both rewarding A+ grades to the company.

How To Choose the Right Payment Processing System for Your Healthcare Business

From electronic payments to paper bills, to inability to accept all credit cards, thinking of the unique needs of your office needs to be front and center.

A list of those needs to keep in mind can include thinking about data and security, determining if your current payment processing system (i.e. point of sale hardware) and the new processing system will work together, and finding out what payment options are available.

A few key features processors should provide include online bill payment services, follow-up (such as text reminders), security features, point-of-service devices, data collection that accommodates your needs, and preauthorization and certified payment processing.

You may further research which credit card processing is cheapest for small business.

In closing, decision making begins with weighing out the ease of use for not only the business but also the clientele. For instance, most of your clients may be more inclined to pay in person instead of online or on their cell phones. Or it may be the exact opposite, which needs to be taken into consideration when picking out a merchant provider.

Are things like month-to-month payment options or no early termination fees important for your business? Would you rather have flat rates or fixed rates? Do you prefer Cloud-based business or do you tend to shy away from it? Would you prefer a dedicated account representative for the life of your account or just talk to whatever rep answers your call? Also, is learning how much line of credit for my business I can get important? And how does a business line of credit work?

It’s all up to you, and hopefully this guide helps you make the right decision for your business.

Congratulations if you’re about to launch your new small business. Small businesses contribute significantly to a vibrant and healthy economy.

Statistics show that small businesses owners create 62% of jobs and overall employ 47.5% of Americans. However, the trick is how you finance your new business.

Navigating the various financial lending options can be complicated. But worry not because this article helps you understand how to get a business loan and the most common types of asset-based financing.

How Does Asset-Based Financing Work?

Asset-based lending is a type of financing you secure through your tangible assets. These include your accounts receivable, machinery, inventory, or any other form of collateral.

Asset-based financing allows you to borrow about 50% of your equipment or inventory. Otherwise, you can borrow up to 75%-80% of the value of your accounts receivables.

Asset-based lending is more accessible for small businesses to qualify for than other types of loans. That’s because you have tangible collateral, which mitigates the lender’s risk. If you default, the lender seizes the collateral and sells it to recover the losses.

Generally, asset-based loans are of two types:

• Traditional business term loans.
• Business lines of credit.

What happens is the asset-based lender gives you capital based on the current market value of your desirable secured assets in advance. You can either opt for asset-based financing that is a term loan or a line of credit.

The first option requires you to pay the advance and interest within a given period. On the other hand, a line of credit allows you to draw the funds you need, only paying interest on the money you spend.

It’s worth mentioning that in both cases, you leverage your assets, such that in case you default, the lender just takes the assets and sells them to recover the money. If you cannot qualify for financing, asset-based lending is one of the best options to turn to to help cover working capital and your cash flow needs.

The Most Common Types of Asset-Based Loans

With a better understanding of how asset-based financing works, it’s easier to understand the common types of asset-based loans and choose the right one for your small business. The most common asset-based loans include:

Inventory Financing

If your small business has a significant stockpile of inventory, inventory financing can serve you well. It’s a great option, especially for those in the retail, wholesale, or manufacturing industries. The asset-based lender uses the inventory as collateral.

After determining the resale value of your inventory, the lender uses that value to secure your loan. After this, you can get your loan and use the inventory. But if you fail to repay the borrowed amount, the lender has the right to repossess the inventory to repay the debt.

Accounts Receivable/Invoice Financing

If your small business is service-based and invoices its customers, you can get an asset-based loan for receivables due within 30-90 days.

If your existing invoices are large, you can expect to get a larger loan and vice versa.

Some people often confuse invoice financing with invoice factoring. However, these differ. With invoice financing, control over your assets remains with you, while with invoice factoring, the asset-based lender sells your invoices to a third party.

In factoring, it’s like the lender buys your outstanding invoices and pays you the total amount. Later, they collect the payments from your customers for you. After collecting all the money, they pay you the remaining amount but keep some as payment for their services.

Therefore, the main difference between invoice financing and factoring when taking an asset-based loan with your account receivables is that while the former is a true loan, the latter involves selling your existing invoices.

Equipment/Machine Financing

Machinery or equipment your business owns can act as collateral for an asset-based loan. You get a loan depending on the total value of these assets.

If you want to invest in other expensive equipment to help launch your small business, use the equipment you outrightly own to act as security for you to get asset-backed financing. The higher the equipment value, the more the loan amount.

Business Lines of Credit

When you need a business line of credit, they’re always available. Even for already established businesses, lines of credit are essential and can get you an asset-based loan when faced with cash flow challenges.

It’s important to note that businesses with real estate property can use this fixed asset as collateral for an asset-based loan. However, you must be the outright owner of the property, with no outstanding mortgages.

Asset-Based Lending Terms

The lending terms of asset-backed loans vary from one lender to another, depending on the products they offer. Similarly, asset-based lending rates vary. In most cases, the lending terms depend on the type of collateral your business uses to secure the loan.

For example, a loan where you use equipment as collateral might entail longer lending terms. On the other hand, accounts receivables secure a loan with shorter terms. The interest rates vary between 7% and 30% and can be higher than most banks charge.

How to Apply for an Asset-Based Loan

The process of applying for an asset-based loan is easy. However, documentation is mandatory. Lenders require your invoices, bank statements, and tax returns, especially if you already set up your business. That way, potential investors can see your investment is solid.

For inventory-based loans, ensure your inventory management system is strong. Doing so makes it easy for the lender to go through your inventory, determine the levels, and qualify you.

Also, the asset-based lender needs to know you’re not using your assets as collateral elsewhere and that you’re paying your taxes. They wouldn’t want to have the collateral or assets seized.

Provided you have the proper documentation and meet the asset-based financing terms of your lender, the application process is easy.

Advantages of Asset-Based Lending

Now that you know the common types of asset-based financing, how to apply, and the terms of these loans, probably the question on your mind is, “Why would I go for this type of financing, especially when I’m risking my assets?”

Some of the advantages of asset-based lending include:

• They’re easier to qualify.
• They require less individual risk.
• They’re a great option to help cover cash flow and working capital needs.
• They are a flexible financing solution where one is unqualified for financing from other lenders.

These advantages don’t mean these loans have no disadvantages. In most cases, they have higher interest rates than bank and SBA loans. In addition, the assets you own limit asset-based loans. And if the amount you want is large, your assets might not be enough to act as collateral.

Takeaway

Your small business will reward you handsomely and also help better the economy. If you already own several assets, including machines, equipment, and inventory, you can turn to asset-based financing to get capital and cash flow money.

Identify the type of loan that best fits your business and find a lender with the best loan terms for you.