Saturday, January 20, 2018

What Do Bookkeepers Do, and How Can They Help My Business?

So, what do bookkeepers do, exactly?

There’s no cut-and-dry answer to this question—bookkeepers can wear many different hats depending on what your business needs. That said, there are a few things that almost every bookkeeper can take care of for your business. Though the role of a bookkeeper is a multifaceted, there are some core tenants to what bookkeepers do.

And, of course, we’ll get to those in a moment.

But first, I want to address the initial question that might be on any business owner’s mind who’s also wondering “What do bookkeepers do?”—let’s first discuss why your small business needs a bookkeeper in the first place.

Why Does Your Small Business Need a Bookkeeper?

Let’s take care of the most simple question at hand first—why does your small business need a bookkeeper?

I call this question simple because I can pretty much always answer it with another question.

All it takes to make a small business owner realize why they need a bookkeeper is one simple question: Did you start your business so that you could do bank reconciliations every month?

The answer, in the 15 years or so that I’ve been running Kildal Services, LLC, has never been “Why yes. Yes I did.” Not ever. And that is why your small business needs one.

Now, that we’ve established this simple answer to why your business needs a bookkeeper, let’s move on to the meatier question at hand.

Besides reconciling accounts each month, what do bookkeepers do?

What Do Bookkeepers Do?

As a reminder, there’s no one simple way to answer this question. Just like any other field of work, bookkeeping can look different from business to business. That said, we can cover some of the most common tasks that bookkeepers tend to tackle in order to answer the question, “What do bookkeepers do?”

Without further ado, let’s see what bookkeepers can do for your business:

Bank Feeds

At a basic level, your bookkeeping service or bookkeeper should be managing the transactions brought in through your accounting system’s bank feed. This means they’re matching downloading transactions to existing transactions in the corresponding register, and adding those that aren’t already there. The transactions that need to be added will most likely be transactions generated outside of the accounting system: credit card or debit card transactions, any EFT/ACH, or even handwritten checks. It could also involve matching deposits as customer payments to help manage Accounts Receivable or outgoing transactions as payments against vendor bills.


This is generally all a micro-business needs: the core employees or partners are generating their own estimates/invoices and making deposits, as well as paying bills as they come in by handwriting or printing checks and making purchases with credit or debit cards as needed. They can continue to do the tasks they’ve always done. In this situation, the answer to “What do bookkeepers do?” is they manage the books after-the-fact and reconcile accounts against statements each month.

Accounts Receivable

A/R management can take on a few forms. As I mentioned above, the small business staff might be entering their own estimates and/or invoices, and they might be receiving payment against the invoices.

However, there’s another option. The client uses an industry-specific estimating program to calculate the job, then provides the bookkeeper with the total. They then enter the estimates into their QuickBooks Online account and create or progress invoices as the project moves along.

Creating invoices, sending to customers, providing statements, and assisting in collections is all part of the A/R services we provide for our clients. They let us know when they’ve been paid, and we enter that payment in QuickBooks Online, then create a deposit to match what the client takes to the bank. Here, when asked “What do bookkeepers do?”, my answer is all of the accounts receivable.

Accounts Payable

We just signed a great new client: Ware Landscaping & Snow Removal. Mike, the owner, is pretty tech savvy—he loves finding apps to help him run his business. He recently credited moving to QuickBooks Online and making use of the online invoicing system as major factors in helping manage his cash flow, and estimates that his business now gets paid in half the time they did prior to implementing these solutions.

So what are we doing for Ware? We’ll be managing all of his accounts payable. Right now, the company is in a transition phase and he wants to continue to be closely involved in the estimating and invoice processes. What this means is that we’ll be using to handle all of the vendor bills that the company receives. We’ll contact all of his vendors, give them the unique email and/or fax number for his account, and request they begin sending their bills to those addresses. Once we get them, we’ll assign them the appropriate vendor from his QuickBooks Online vendor list and expense account from his chart of accounts. Mike will be assigned as an approver, and once he approves the vendor bill, we know that it can be scheduled for payment.

Down the road, as the company grows, we’ll set the job supervisors as an additional approver so they can have more transparency in the profit margins of their projects, and keep Mike on so he can give the final thumbs-up for payment. For this landscaping company’s accounts payable, “What do bookkeepers do?” is answered with a collaborative process between us and management.


Bookkeepers are also, at times, the payroll manager—and HR, but that’s something that’s better left for an outsourced solution or an app like JuvodHR—as well as payroll processor. Your bookkeeping service might have a payroll offering, or they might assist you in the processing of paychecks and/or liability payments and returns. They could simply get the payroll data into your accounting system after your payroll service provider has submitted the reports to you, or they’re importing the data from a file provided.

So with regards to payroll, what do bookkeepers do? This depends on whether they’re in-house, outsourced, processing payroll, or a specific payroll company is creating checks and generating returns.

Technology Recommendations & Process Streamlining

Bookkeepers are also pretty good at keeping up with the latest and greatest technologies. It’s not unusual for your bookkeeper to find a new app specific to your industry. (My new favorite for my contractor clients is Knowify.) Or maybe it’s a way to help you cut your labor costs and reduce time theft—which happens to be the number one way that people steal from their employers—by suggesting a GPS-enabled mobile time clock like TSheets.

At the same time, a bookkeeper might be recommending some technology solution for your small business, they’re also always—well, almost always!—looking for ways to make your back office run as smoothly as possible. Developing efficient workflow pretty much goes hand in hand with any app solutions, since they’ve found an app by searching for a solution to a specific pain point. In my opinion, when asked “What do bookkeepers do?”, one of the most important aspects of their services is finding ways to save you and your small business time and money by attempting to streamline your processes.


One of the services that many bookkeepers fail to mention is that, by default, they’re going to serve as a sort of translator between you and your CPA or EA. Because bookkeepers have a much more intimate knowledge of your books, it’s sometimes easier to have your bookkeeper contact your tax preparer when you’re about to file your annual return. Or double-check to make sure that the estimated tax payment you’re about to send is correct. What do bookkeepers do, when we’re talking about your business dream or inner circle? They help you make those day-to-day decisions—how much can afford to pay your new employee, for example.


There you have it—all of the main skills that a bookkeeper can bring to your business.

What I want you to take away from this is that your bookkeeper isn’t just doing simple data entry.

When you start looking for one, please don’t put an ad on Craigslist that includes the line “Receptionist needed. QuickBooks experience a plus.”  Having been a receptionist, I’m certainly not disparaging that position in any way. But, as I can tell you from experience, it’s an entirely different job than what a bookkeeper does, and small business owners need to be aware of that fact.

When you ask “What do bookkeepers do?”, the answer can be anything from setting up your accounting system and processes to training and assisting your staff in day-to-day accounting tasks—the answer can even be managing all of the above.

At the end of the day, the answer to this question will ultimately depend on what you and your small business need from your bookkeeper. Either way, having a bookkeeper keeping track of your small business’s finances will free up the time and energy you need for growing your business. 

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The True Costs of Hiring the Wrong Person

For 28 percent of small business owners, hiring additional staff to improve productivity and efficiency is high on the agenda for 2018, according to a new Kabbage survey. For employers trying to make the most of this investment, hiring the “wrong” employee can quickly dwindle your budget and leave you back at square one. Bringing... Read more

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from Kabbage Small Business Blog

Friday, January 19, 2018

The Difference Between an Employee and an Independent Contractor

Do you know difference between an employee and independent contractor?

As you grow your business, understanding the distinction between these two terms will be critical.

Hiring an employee vs. an independent contract comes with a unique set of pros and cons, especially when it’s time to file your business taxes.

So, what’s the difference between an employee and an independent contractor? And why is it important to categorize the people who work for you correctly?

Keep reading for our rundown.

What’s the difference between an employee and independent contractor? It comes down to taxes.

Many people think they have a choice when deciding whether to pay a worker as an employee or an independent contractor, but that isn’t the case at all.

Legally, there are big differences between an employee and an independent contractor—the most important difference is in the withholding and payment of employment taxes.

  • If a worker is classified as an employee: The company must withhold income tax, social security, and Medicare, and any state and local income taxes from the amounts paid to the worker as salary or wages. In addition, the company must also pay social security, Medicare, and federal and state (if required) unemployment tax for the benefit of the employee.
  • If a worker is classified as an independent contractor: The company typically does not withhold any taxes from the amounts paid to them and is not required to pay any taxes for the benefit of the worker. Instead, the independent contractor is responsible for paying both the employee and the employer portion of the federal and state taxes directly to the taxing authorities.

Because of the fact that payments to independent contractors aren’t subject to employee withholdings or employer paid taxes, some business owners prefer hiring workers as independent contractors rather than employees. But they must use caution, because in order to pay a worker as an independent contractor, several standards must be met.

Keep in mind that paying someone as an independent contractor when they are really an employee is illegal and can be costly.

What determines how a worker is classified?

Common law rules outline the difference between an employee and an independent contractor. Generally, a worker is an employee if:

  • Your business controls what work will be done and how it will be done even if you give the employee freedom of action. Meaning that you retain the right to control the details of how the services are performed.
  • Your business provides the equipment and materials the worker uses to complete the work.
  • Your business provides benefits to the worker, such as paid time off, insurance, or retirement benefits.
  • Your business pays the business expenses of the worker, such as office rent, insurance, supplies, or other expenses and reimbursements.

Generally, a worker is an independent contractor if:

  • The worker is a medical or financial professional, building or trade contractor (like a plumber or electrician), engineer, designer, or other professional who provides services to the general public.
  • They service several to many different customers or clients who pay them directly for their services.
  • They control when and how the work will be performed and control all details of the work performed.

Let’s look at a couple of examples so you can see difference between an employee and an independent contractor.

Scenario 1

Joyce is a marketing professional who works around 15 hours per week for Company A providing social media and other marketing services. She works out of her home and pays all of her own business expenses including the cost of the applications and tools she uses to promote Company A. Joyce charges Company A an hourly rate for her services and provides similar services to Companies B and C.


Joyce meets all of the tests to be classified as an independent contractor because she controls how, when, and all the other details of how the work is performed for Company A. She also pays for her own business expenses and provides the same services to other companies.

Scenario 2

Laura is also a marketing professional who works for Company A about 15 hours per week. She writes articles and other marketing materials that are used in advertisements and social media campaigns. Laura performs her work onsite at the Company A office using their computers and other office resources and reports to the VP of marketing. She’s also paid an hourly rate for her services and doesn’t provide marketing services to anyone else.


Laura does not meet the tests to be classified as an independent contractor because even if she has freedom of action with her job, she is using Company A’s resources and has someone overseeing when and how she performs her work. Another determining factor is the fact that she doesn’t provide her services to the public, only to Company A. Based on the circumstances, Laura should be classified as an employee of Company A.

These two scenarios were pretty straight forward and clearly illustrate the difference between an employee and an independent contractor, but sometimes the facts aren’t so cut and dry.

Let’s take a look at a third scenario:

Scenario 3

Tim works as a landscaper for Company D about 15 hours per week, performing work for clients of Company D as directed by the owner. He uses mowers and other equipment provided by Company D to complete his work and is paid hourly for his services. Company D also reimburses Tim for mileage and other expenses for using his personal truck to complete the work. Tim also works for Company E providing landscaping services directly to them, but uses his own mower and equipment to complete that work.


Tim is an employee of Company D because he does not meet all of the common law rules to be an independent contractor. Even though he provides the same type of services to Company E, Company D provides Tim with the equipment used to do the work for their clients and dictates when and how the work should be performed. Company D also reimburses Tim for his mileage and vehicle costs, which is typical of an employer/employee relationship.

Based on the above scenario, Tim may be classified as an independent contractor by Company E if he meets all the required common law rules.

What happens if you get it wrong?

This is where it’s critical to understand the difference between an employee and an independent contractor.

According to the IRS, “There is no ‘magic’ or set number of factors that ‘makes’ the worker an employee or an independent contractor, and no one factor stands alone in making this determination. Also, factors which are relevant in one situation may not be relevant in another.”

Many businesses mistakenly believe this means they have some “wiggle” room in determining how to classify their workers, but this just isn’t the case. In fact, misclassifying workers can be costly. If you pay a worker who should be an employee as an independent contractor—and have no basis for it—you might be held liable for employment taxes for that worker along with interest and penalties.

The IRS has a webpage dedicated to this topic to help you determine the difference between an employee and an independent contractor.

If you’re still in doubt, you can file a Form SS-8, which describes the nature of the relationship between the payer and worker, and the IRS will review the facts and circumstances and give you an official determination of the worker’s status. This process can take up to six months to complete but may be well worth the effort if you hire lots of workers who perform the same types of services under the same circumstances.


As you grow your business, it’s critically important that you understand the difference between an employee and an independent contractor. Take the time to absorb the various distinctions, and make sure you categorize the people who work for you correctly.

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Thursday, January 18, 2018

How To Stay Motivated When Working Alone

If you’re launching your own small business, the chances are that you’re probably going to spend a decent amount of time flying solo — at least until you get up and running.

Working alone can be great, but it’s also littered with the occupational equivalent of landmines. It’s easy to get wrapped up in distractions or find yourself unmotivated. So how can you stay on track when there’s no-one peeking over your shoulder to make sure that you meet those deadlines?

Being your own boss is an art-form and it requires a good measure of self-discipline. You’ll have to be your own boss and hold yourself accountable. So how do you do that?

Putting on pants is a great start.

If you’re working from home, it might feel easy to catch up with your work while in sweatpants and propped up in bed. But that’s a recipe for trouble down the road.

Experts (and science) agree that the clothes you wear are symbolic of how you feel about yourself. In fact, one Scandinavian study found that doctors who wore white lab coats made less mistakes than their counterparts who were not wearing lab coats. It’s called “enclothed cognition.”

Check out the infographic below to learn more helpful hints about staying motivated while working alone:

Self management tips infographic

Sources: Forbes | Inc | New York Times | The Globe and Mail | Redbooth

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from Fundera Ledger

How Does Net Neutrality Affect Small Business Owners?

Thanks to the internet, it’s likely never been easier to start a business. But the Federal Communications Commission’s recent ruling to end net neutrality threatens that as well as the livelihoods of small business owners from tech entrepreneurs to realtors to innkeepers.

“My business is completely reliant on the internet,” says Maureen Clyne, a sole-proprietor real estate agent in Alexandria, Va. “Time is absolutely of the essence in this industry. We move fast in real estate. What if I have an offer on a home that two other buyers are bidding on? If I’m up against a large team with fast internet, and I have slower access, my client could conceivably lose out because the offer gets in late.”

The Ruling Will Affect Speed and Customer Experiences

Net neutrality guarantees that all data is treated the same on Main Street as it is on Wall Street. But despite polling indicating that more than four out of five Americans—and three out of four Republicans—support net neutrality, the FCC voted in December along party lines to repeal the Obama administration’s 2015 ruling that the internet is a utility like water and electricity. The repeal will allow ISPs such as Verizon and Comcast to charge different rates for internet speeds, so-called “fast lanes,” and allow them to suppress content.

“This ‘pay-to-play’ scenario will hurt smaller companies with fewer financial resources than their larger competitors,” says Ryan Rabac, the manager of digital marketing at the American Sustainable Business Council. “Smaller businesses may be pushed out when consumers—and other businesses—are nudged by faster access and lower prices to do more of their purchasing with larger corporations.”


And speed matters to every business that attracts customers online: More than half of the time a visitor to a mobile site will leave if he has to wait more than three seconds, according to a study done by a Google subsidiary.

Clyne says 99% of all her paperwork is handled electronically, including with clients as far away as Afghanistan.

“I have managed transactions electronically from Europe, while on vacation and even from a hospital emergency-room bed,” she says. “Slower or impeded internet access would have made that extremely difficult.”  

Why These Changes Are Happening

Ajit Pai, the chairman of the FCC and a former lawyer for Verizon, which stands to benefit greatly from the decision, says that stripping away regulations is “basic economics.” He says that the practices that Obama-era regulations sought to prevent weren’t happening without the added regulations.

“Did these fast lanes and slow lanes exist? No,” he said in a speech in April. “It’s almost as if the special interests pushing Title II weren’t trying to solve a real problem but instead looking for an excuse to achieve their longstanding goal of forcing the internet under the federal government’s control.”

But one of the FCC’s commissioners, Jessica Rosenworcel, takes a different view, especially in regard to small businesses.

“Crowdfunding platforms and social media have changed the way many small businesses get started raising capital,” she writes in Harvard Business Review. “This stands in stark contrast to the state of entrepreneurship two decades ago, when starting a technology business often meant prohibitively heavy upfront investments, physical equipment, and limited access to broadband networks. It’s hard to imagine a time when it was easier for anyone to start a business. This trend—call it the ‘democratization of entrepreneurship’—depends on an open internet.”


Rosenworcel also points out that most people don’t have a choice of broadband provider, which means that the market isn’t able to correct discriminatory behavior that ISPs can now participate in without much recourse for consumers and small businesses. Preventing broadband providers from being able to choose winners and losers by throttling some people and offering fast lanes to others, she adds, has been a founding principle of the internet’s growth from the start.

“Instead, you should control what you see and what you do, and everyone should have an equal opportunity to get their content or service to their intended audience, without interference,” she says. “This principle has led to a virtuous cycle of innovation that has driven our economy in previously unimaginable directions. For the first time, small business could think big and consumers could shop small, from anywhere in the world.”

Impacts by Industry

This sentiment likely rings true to Rachael Solem, the owner and general manager of Irving House at Harvard, who says it’s hard to hard to overestimate the value of net neutrality for small businesses in the travel industry.

“Travelers all over the world come to our city, to be near Harvard, which is where we offer accommodations,” she says. “The internet is the way they plan their travel. Before there was an internet for the general public, we did market in many ways, some of which were very effective, some of which we still use. But we must be findable on the internet to get most—60% to 70%?—of our business now.”

She says that without net neutrality, internet service provideres can block or slow down sites or site hosts that do not pay additional fees, “the small players, which could well include our sites’ hosts (each of our sites is hosted by a different company; one is based in the U.K.). Our very small online presence could diminish further.”

What Small Businesses Can Do 

Despite the FCC’s ruling, Rabac says, the fight for net neutrality is not over and small business owners who think they might be hurt by the decision can still act.

“Congress needs to understand that most businesses aren’t on board with this,” he says. “In the meantime, we are closely monitoring as legal battles begin to take shape, led both by businesses and 18 state attorneys general. Those who feel that they can demonstrate this decision will cause damage to their business may consider participating in them.”


In fact, Congress is taking action against the FCC’s decision with a measure that could invalidate the vote.

“Congress has the power through the Congressional Review Act to overturn the FCC’s actions,” Sen. Edward J. Markey (D-Mass.) said in a recent news conference. “We will spend the coming months building our grass-roots support for the CRA.”

Without the decision taking a reverse direction, Rabac says he doesn’t think ISPs will move quickly to take advantage of their new freedoms but, eventually, they will.

“Change will be gradual—a little slow-down here and a fee hike there that may start to nudge your choices and preferences,” he says, “until one day they hope consumers and businesses will just accept this new normal.”

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Wednesday, January 17, 2018

Finding Your Top Alternative to a Chase Secured Business Credit Card

If you’re a business owner who’s looking to build credit and who also happens to bank with Chase, you might be asking yourself, “Is there such thing as a Chase secured business credit card?”

The short, simple answer to this question? Well, no.

But even though there’s no Chase secured business credit card, you’ve still got some pretty stellar choices for building credit or spending with a Chase business credit card. Unfortunately, you just can’t have both.

Ready to explore your very best alternatives to a Chase secured business credit card?

Let’s check and see what they have to offer:

TL;DR: Finding Your Top Alternatives to a Chase Secured Business Credit Card

Even though Chase doesn’t offer a secured business credit card—a card meant for building credit, whose credit limit is secured by a refundable security deposit—you’ve got a lot of great alternatives to choose from.

If you’re hoping to build credit, you should consider spending with the Spark Classic—an unsecured business credit card available to business owners with a personal credit score of 550 or above—or the Capital One Secured MasterCard—a secured personal credit card that will help you build credit so that you can access an unsecured business credit card in the future.

If you want to work with Chase specifically, you can look to their Ink Business suite. Their two Ink business credit cards are the Ink Cash—which will reward your spending with cash back—and the Ink Preferred—which will reward your spending with rewards points that are redeemed at their highest value for travel.

What Is a Secured Business Credit Card?

First thing’s first, if you’re not familiar with the concept, you might be wondering what a secured business credit card even is.

Before we dive into your top options as alternatives to a Chase secured business credit card, let’s tie down exactly what we mean when we talk about a secured business credit card.

Essentially, a secured business credit card is a credit card whose credit limit is secured by a security deposit. This security deposit—which usually ends up being 90% to 100% of your credit limit—mitigates much of the risk that a credit card issuer takes on by extending your business a credit line.


Because of this lessened risk, secured cards are much easier for business owners with less-than-stellar credit to qualify for. And this makes the secured cards the perfect opportunity for business owners to build or rebuild their credit history.

One complication that you would want to keep an eye on? Even when you apply for business credit cards, the main qualification that card issuers will take into consideration is still your personal credit score.

As such, we recommend that any business owner—even if they want to improve their business credit card options—build credit using a personal secured credit card.

Your Top Alternatives to a Chase Secured Business Credit Card

So, your first step toward finding your perfect alternative to a Chase secured business credit card is asking yourself why you were hoping for a Chase secured credit card in the first place.

Perhaps you’re looking to build credit in order to improve your future, unsecured business credit card options. Or, maybe you’re looking to do your business spending specifically with a Chase business credit card.

Either way, you’ve certainly got some great cards to choose from.

Depending on what brought you to want a Chase secured business credit card in the first place, let’s take a look at your top alternatives:

For Building Credit, Try the Spark Classic or the Secured MasterCard

For starters, you might have started your search for a Chase secured business credit card with the intentions of building credit in order to access better business credit card offers in the future.

Luckily, even though a Chase secured business credit card doesn’t exist, you’ve still got some pretty great options to choose from for building credit.

Let’s take a look at the very best credit cards for business owners who want to improve their credit:

The Capital One Spark Classic

The Spark Classic is the very best unsecured business credit card that’s available to business owners with average credit.

If you have a personal credit score of at least 550, you’ll be able to access the Spark Classic. And with it, you’ll not only gain an opportunity to improve your personal credit—Capital One will report your activity on the Spark Classic to personal credit bureaus—you’ll also gain access to an unsecured credit limit to free up your business’s cash flow.

Even better?

You’ll earn unlimited 1% cash back for every dollar you spend with the Spark Classic, so you’ll be earning as you improve your credit by spending responsibly with this card.

To top it all off, you can access everything the Spark Classic offers for no annual fee at all.

The Capital One Secured MasterCard

Don’t quite have the personal credit score to qualify for the Spark Classic or any other unsecured business credit card?

Not to worry—you’re just one step away from the more lucrative business credit card offers in your future.

The most efficient way to get your credit score to reach that 550 threshold? Spend responsibly with a personal secured credit card.


The best personal secured card out there is the Capital One Secured MasterCard. This secured card offers up some of the most flexible and transparent terms available.

With the Secured MasterCard, you’ll be able to enjoy the following freedoms:

  • A security deposit of as little as 25% of your credit limit, depending on your creditworthiness
  • The opportunity to pay your security deposit in installments, as long you pay it in full within 80 days
  • No annual fees or hidden fees to hinder your building credit

You won’t be able to find this kind of flexibility with any other secured credit card on the market.

For a Chase Business Credit Card, Consider the Ink Cash or the Ink Preferred

On the other hand, you might be looking for a Chase secured business credit card because you want to do your business spending specifically on a Chase business credit card.

Though you might not be able to access the Chase Ink Business credit cards if your credit is on the lower side—both require excellent personal credit of above 660—you’ll just have to build or rebuild your personal credit with your first two business credit card options before accessing Chase’s business credit cards.

To be sure, the Chase Ink Business credit cards will be well worth any credit building you’ll have to do to access them.

Let’s take a look at what the Ink Cash and the Ink Preferred can offer your business:

The Chase Ink Business Cash

If you’re looking to be rewarded for your business spending in the form of cash, then one of your very best options is the Ink Cash.

This Chase business credit card will reward your spending with the following cash back rates:

  • 5% cash back on the first $25,000 spent on combined purchases at office supply stores and on cell phone, landline, internet, and cable TV services annually
  • 2% cash back on the first $25,000 spent on combined purchases at gas stations and restaurants annually
  • 1% cash back on all other card purchases with no limit to the amount you can earn

You’ll also gain access to one of the longest 0% intro APR periods on the market—for your first 12 months after opening your Ink Cash account, you’ll be able to carry interest-free balances as long as you make your minimum monthly payments on time.

After these 12 months, your APR will set in at a rate that will vary with the market prime rate, so be sure to see the issuer’s terms and conditions for the latest APR information.

Not to mention, you’ll also have the opportunity to access a welcome bonus of a $300 statement credit if you spend $3,000 within three months of opening your account.

The best news yet?

If you qualify, all of these perks that the Ink Cash boasts can be yours for no annual fee at all.

The Chase Ink Business Preferred

Finally, if you want a Chase business credit card that will reward your spending with rewards points rather than cash back, look to the Chase Ink Business Preferred,

This business credit card offers one of the most generous signing bonuses on the market—if you spend $5,000 within your first three months from opening your account, you’ll earn a whopping 80,000 bonus points.

For reference, if you redeem these rewards points on Chase Ultimate Rewards, you’ll end up earning $1,000 worth of free travel.

And that’s not even close to where the rewards end with the Ink Preferred. When you spend, you’ll earn rewards at the following rates:

  • 3x points for every dollar—for up to $150,000—you spend on:
    • Travel
    • Shipping purchases
    • Advertising purchases made with search engines and social media sites
    • Internet/cable/phone services
  • 1x points for every other dollar spent

Be sure to note, though, that—unlike the Ink Cash—the Ink Preferred will come with an annual fee. You’ll have to pay $95 a year to access this business credit card. That said, when measured against the potential earnings the Ink Preferred could bring your business, this annual fee seems like small change.

Finding Your Best Alternative to a Chase Secured Business Credit Card

Though you won’t be able to find a Chase secured business credit card, you will be able to find some pretty great alternatives out there for your business.

Whether you want to build credit or you want to spend with Chase specifically, you can find something out there for you.

Unfortunately, if you want to both build credit and spend with a Chase business credit card, you don’t really have many options. Both Chase business credit cards require excellent credit for you to qualify for them. That said, if you spend responsibly with either the Spark Classic or the Secured MasterCard, you’ll be well on your way to accessing all the perks that come with being a Chase business credit cardmember.


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Business Line of Credit for Bad Credit—Your 3 Best Options

If you have limited or poor credit, then considering a business line of credit for bad credit could be a smart move—either on its own or coupled with another small business loan.

A business credit line can give you easy access to working capital that you can use to cover your business’s expenses.

What if you have a less-than-desirable credit score? Can you still get a business line of credit for bad credit?

Fortunately, there are still options you can consider if you’re looking for a business line of credit for bad credit.

If you’re totally lost right now: don’t worry, we’ll break this all down below.

What Is “Bad Credit?”

Before we dive into the best business line of credit for bad credit, let’s make sure you understand what constitutes “bad credit.”

A credit score, as you might know, is a mark of your reliability. Specifically, it is a number, generated from various factors, that determines how likely you are to pay your bills on time.

Factors that affect your credit score are:

  • Amount of debt you have
  • Age of your open credit accounts
  • Diversity of credit accounts
  • Payment history (including bankruptcies and judgments)
  • Tax liens
  • Hard credit inquiries
  • Credit utilization (or how much of your credit is being used)

What is classified as “bad credit” can vary, and lenders will evaluate credit in conjunction with your other business attributes—like revenue or time in business.

Typically, if you have a credit score of 620 or below, it will be more difficult to qualify for long-term loans or an SBA loan—but maybe not impossible. Plus, you still have a good chance of qualifying for a short-term loan or business line of credit.


Having bad credit is a pain. It can hinder you from getting financing for your business needs. Having good credit means you have more options and better rates.

The lower the score, the more you will need to shine in other areas to qualify for a business line of credit. But don’t despair—when it comes to business line of credit for bad credit, you have options.

First, let’s make sure you understand the difference between business credit and personal credit.

Business Credit vs. Personal Credit

If you own a business, you have two credit scores: a business credit score and a personal credit score.

This is why it’s important to keep your personal and business finances separate.

There are a few companies that calculate these scores.

For businesses, it’s Experian, Equifax, and Dun & Bradstreet.

For your personal score, it’s Experian, Equifax, and TransUnion.

You can obtain your scores from these company websites, or through sites like

Lenders will look at both of these to determine eligibility.

What Is a Business Line of Credit?

A business line of credit is flexible, revolving capital—similar to a credit card—except you get access to cash and, in many cases, lower APRs. And there are many business line of credit for bad credit options available.

Lines of credit are agreements between lenders and borrowers that give a maximum loan balance that the borrower can pull funds from. With a line of credit, you can borrow funds at any time as long as you don’t exceed the maximum amount. Plus, you only have to pay interest on the funds you draw.

A business line of credit gives you capital to meet a variety of needs for your business—like covering payroll, buying inventory, and handling seasonal cash flow gaps. A business line of credit will give you easy access to cover day-to-day cash flow needs.

Why You Might Need a Business Line of Credit

Plenty of financing options are out there—even if you have poor credit, including short-term loans and merchant cash advances, among others.


But here are the reasons a business line of credit might be a good option for you.

  1. If you need quick access to funds: When you’re facing a cash crunch, you don’t have time to apply for a loan. You need cash fast. Access to a small business line of credit makes that money available to you for short or longer term needs. You need a business line of credit for bad credit.
  2. If you need to cover seasonal or temporary expenses: Did you have an emergency like breaking a computer? Does your business have an off-season, contributing to cash flow issues? Your small business line of credit is perfect to back you up in either case.
  3. If you want more control: If you have to draw on your line of credit to get over a temporary cash crunch, you’ll only pay interest on the amount you withdrew until you can pay it back. Whereas with a business loan, you’re paying interest on the entire amount, even if you don’t use all the funds at once. It’s a good way to be mindful of what you spend.
  4. If you have no collateral to offer: Most small business lines of credit under $100,000 are “unsecured.” This means that if you don’t have any collateral or need it for other things, you’ll be in good shape with a small business line of credit for bad credit.
  5. If you want to increase your credit score: A line of credit is a great way to build up a bad credit score if you have one, so long as you make all your payments on time.
  6. If you want some peace of mind: Even if you rarely or never need to draw on it, you can rest easy knowing that you have access to backup funds.

If You Have Bad Credit, What Do You Do?

If you need access to capital sooner than later, and don’t have time to work on raising your credit score, there’s still hope.

To obtain a line of credit, you will probably need to supply some financial information about your business as well as yourself, so be prepared with income and other statements or tax returns.

Fortunately, it’s not just about your credit score. There are other factors of your business that matter to lenders.

1. Annual Revenue

One of the most important parts of your application is your business’s annual revenue.

The more you bring in, the better.

That should come as no surprise. A high revenue proves to lenders that you know what you’re doing—and that your business is a worthwhile investment for them to make.

Generally speaking, the line of credit you’ll qualify for will be around 8%-12% of your annual revenue.

Many online lenders require minimum annual revenue amounts ranging from $25,000-$500,000.

2. Current Debt Obligation

If you’re currently paying back a business loan, you might have trouble qualifying for a second product, even a business line of credit for bad credit.


Most lenders don’t want to take what’s called “second position” to another lender.

In other words, if you go bankrupt and your assets get liquidated, that original lender will be compensated for your remaining debt, leaving a second lender in a tricky position.

If a lender took second position to someone else, it means they wouldn’t get their money until the lender in first position is completely paid back.

With that in mind, if you don’t have any other debt obligation at this time, this will be a good sign to lenders.

3. Cash Flow

Lenders want to know how well you manage your cash flow—and how much cash you tend to keep on hand.

Every lender’s main concern is whether you’ll be able to make their loan payments, so demonstrating that your business makes and keeps enough money to afford those regular expenses will go a long way to helping you qualify for a business line of credit for bad credit.

To understand your cash flow, nearly every lender will want to see at least three months of your business bank statements.

However, if you have a history of NSFs (non-sufficient funds), you might want to wait a few months before applying for a line of credit. Use that extra time to carefully manage your bank account, making sure it looks 100% lender-friendly.

No matter what, be prepared to talk through your financial history if you know these factors can be found on your credit report.

The Best Business Line of Credit for Bad Credit

If you have good credit, the first place you would probably go as a source for a credit line would be your own bank. Unfortunately, if you have bad credit, this is likely not an option.


Fortunately, you still have many sources for small business line of credit for bad credit. To find the perfect fit and absolute best terms, you should plan to comparison shop among several lenders.

Below are some of the best options to consider from online lenders if you have bad credit.

Headway Capital

Headway Capital offers a line of credit up to $50,000 in revolving funds for small business owners. One of the benefits is that you can choose between monthly or weekly payment options and terms up to 24 months with no early pay-off fees.

Headway Capital is one of the easiest business line of credit for bad credit to qualify for online. They have a quick application, simple document requests, and can get an answer to you in an under a week.

They also have some of the least stringent eligibility requirements to boot:

  • Only 50,000 in annual revenue
  • Only need to have been in business for six months
  • Profitability is preferred but not always necessary
  • And best of all, they require no minimum credit score

If you’re running a young business that’s still building up your credit and revenue, Headway Capital is a good option to get access to capital for times when your business might need it unexpectedly.

However, since Headway Capital is the easiest to qualify for, they also have the highest interest rates and lowest loan amounts.

Headway Capital provides:

  • Loans from $5,000-$50,000
  • Terms between 12-24 months
  • Rates between 40%-80% APR

If you can qualify for something better, it’s definitely better to go that route. But if you can’t and really need the cash, Headway Capital is your best bet for a business line of credit for bad credit.


Fundbox provides invoice financing that acts like a line of credit.

It’s one of the easiest financing options to qualify for. Here’s what you need to qualify for a Fundbox line of credit:

  • A business run on invoices
  • No set annual revenue requirement
  • At least three months in business
  • No minimum credit score—they don’t even check it
  • No profitability required.

Fundbox does not require personal credit to get started. Instead, they use a custom-built business health assessment to determine your credit eligibility and limit by reviewing the data you share with them.  

You only need to connect Fundbox to your business bank account—nothing else.

When you keep your Fundbox account connected, you’ll know what invoices are eligible for advances. When you need the cash, you can clear an invoice and pay it back over the 12 weeks or even earlier if you want—and save on the fees.

Here’s what a Fundbox line of credit will get you:

  • Loans between $100-$100,000
  • Terms up to 12 weeks
  • A rate of approximately 0.5% of the invoice value per week.
  • Access to funds in 1 to 5 days

If you have a lot of unpaid invoices disrupting your short-term cash flow, Fundbox might be a good business line of credit for bad credit option for you.


Kabbage is a good option if your business is more established. So perhaps not the best business line of credit for bad credit option, but a good one if you can qualify.

Like Fundbox, Kabbage lets business owners link up their online financial services, including Intuit QuickBooks, business checking accounts, and Square. Kabbage determines financial performance by analyzing real-time metrics like average monthly revenue, seller rating, and transaction volume.

Kabbage also uses their “nontraditional” metrics to determine the amount of cash that can be made available to you, including  an active and robust social media following.

All of this information is plugged into Kabbage’s underwriting platform, which provides an automated decision within minutes.

Here’s what’s required at a minimum:

  • At least one year in business
  • At least $50,000 in annual revenue
  • No minimum credit score

This makes Kabbage a good option if you’ve been in business for awhile but still have bad credit. If you do qualify, this is what a Kabbage line of credit can get you:

  • Loans between $2,000 and $150,000
  • Terms between 6 to 12 months
  • Rates between 24%-99%

The only reason you wouldn’t apply for a Kabbage line of credit is if you can qualify for something with a better rate.


A bad credit score might create problems when you try to secure funds for your business, but there are still plenty of business line of credit for bad credit options. You just need to understand your needs and look for options that meet your requirements.

You might get higher rates than other options, but if you really need the cash and don’t qualify for anything else, these options are your best bet.

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