Monday, February 19, 2018

Can You Apply for Business Credit Cards Using EIN Only?

Providing a Social Security number to apply for a business credit card seems like it would be counterintuitive and often times frustrating. What does your personal information have to do with your business’s finances? Which is why you’ve likely asked yourself if you can apply for business credit cards using EIN only.

You are certainly not the only person to have asked this, believe us. It’s a very common question, which is why we’ve put together this guide to lay out your options for applying for a business credit card using EIN only.

We’ll also go over some more effective alternatives for addressing why you might have come to this question in the first place, since you’re certainly not alone.

TL;DR: Applying for Business Credit Cards Using EIN Only

If you’re looking to apply for business credit cards using your Employer Identification Number—or EIN—only, then you’re likely either trying to avoid personal liability on a business credit card, or you’re trying to avoid a personal credit check that most business credit card applications require.

If you’re trying to avoid personal liability, then look to corporate credit cards, gas cards, or prepaid business credit cards as your top options for business credit cards you can get with an EIN only.

Alternatively, you might be looking to apply for a business credit card using EIN only because your are working with poor personal credit. If this is the case, the most future-proof path is to build personal credit with responsible spending with the Secured Mastercard or the Spark Classic, even though they require more than your EIN to apply.

Quickie Refresher: Your Business’s EIN

Before we can answer if it’s possible to get business credit cards using EIN only, let’s make sure we’re all 100% what an EIN is exactly, where you get one, and where to find it once it’s issued.

An EIN—which stands for “Employer Identification Number”—works much like a business version of a Social Security number. Your business’s EIN will be a nine-digit number that the IRS assigns to it. And, of course, it’s unique to your operation—that’s the whole point.

Your EIN—also known as a business tax ID number—will be required for lots of different things throughout the lifecycle of your business. You’ll need it, for instance, when you open a business bank account. Or if a retailer offers a business discount, sometimes they’ll require you verify your business status will an EIN. For reasons big and small, you should know how to find your business tax ID number.

Most business credit card applications require both the business owner’s Social Security number and the business’s EIN. The business owner’s SSN enable the credit card issuer to run a personal credit check, the results of which will—more often than not—be the deciding factor for whether or not the applicant qualifies for a business credit card.

Plus, the SSN lets the business owner be personally attached to the business credit card account, making them personally liable for the spending done on the card.

Why Apply for Business Credit Cards Using EIN Only?

What’s the main motivation to apply for business credit cards using EIN only? The answer to this question certainly differs from business owner to business owner, but there are two primary reasons for wanting to secure a business credit with an EIN only.

Here’s a spotlight on those two top draws of applying for business credit cards with EIN only, and you should be in a position to understand your next moves:

  • No personal credit check: One of the most common reasons for seeking a way to apply for business credit cards using EIN only is to avoid the personal credit check that providing a Social Security number opens you up to.

    When your business comes first, it’s easy for your personal credit to suffer. As a result, many business owners prefer that their business credit card application be evaluated based on their business’s finances only. So, they search for applications for business credit cards using EIN only.
  • No personal liability: Additionally, some business owners might prefer that only their business be liable for the spending done on their business credit card. Business credit card applications that only require the EIN, and not a SSN along with it, won’t have the information necessary to impose a personal liability onto cardholders. As a result, the liability for any business credit card you can apply for using EIN only will exclusively be a company liability.

    This means that your business will be the only entity responsible for paying back any balance the business credit card carries.

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Business Credit Cards Using EIN Only: Is It Possible?

Credit card issuers tend to treat getting a business credit card using EIN as an earned privilege. And that usually comes with building credit and proving creditworthiness.

Whether your business has stellar financial credentials or you’ve prepaid your credit limit, you’ll have to reduce the risk that the credit card issuer takes on in order to obtain business credit cards using EIN only.

Business Credit Cards Available Through Applying Using EIN

Corporate Business Credit Cards

Corporate business credit cards are options for high-rolling business that want to secure business credit cards using EIN only. These cards let a business access a credit card account without one specific stakeholder taking on personal liability.

While some corporate business credit cards come with card-specific liability—which means each cardholder is responsible for the spending done on their specific card—others allow for company-only liability if that’s what you’re after.

As a result, many corporate business credit cards don’t require SSN and can be considered business credit cards that require EIN only.

Corporate Gas Cards

Another alternative is to explore some corporate gas cards, which let your business qualify for company-only liability.

For instance, you can access the Shell Business Credit Card with your EIN only if your business fulfills a few requirements. With the Shell card, for example, if your business earns over a million dollars in revenue every year, and has at least three years of business history, then you could qualify for company-only liability for this corporate gas card.

Prepaid Business Credit Cards

Last up, if you want to apply for business credit cards using EIN only, but you’re not raking in tons of revenue, then one of your options is a prepaid business credit card. This type of business credit cards lets the person managing the account prepay business cards for employees to spend with.

Because prepaid business credit cards are low- to no-risk for card issuers, they won’t require a personal guarantee. As a result, they don’t require a SSN to apply, either.

That said, these types of business credit cards won’t be able to build credit for your or your business. Meanwhile, other business credit card choices let you build credit by spending responsibly, but they will require more than an EIN for their application.

Alternative Game Plans to Getting Business Credit Cards Using EIN Only

If you want to access company-only liability with business credit cards using EIN only, then corporate credit cards, corporate gas cards, and prepaid are your only options that can help with that.

However, if your personal credit is suffering, and you want to avoid applying to a business credit card with your SSN as a result, there are ways to access business credit that, unlike getting business credit cards with EIN only, will help you build or rebuild your personal credit.

If you spend responsibly with a secured or subprime unsecured credit card, you’ll be able to build your personal credit. In turn, this improved credit will open up and improve your business credit card options for the future. And looking to the long term is going to be a great solution for you. (You know, that whole teach-a-man-to-fish thing.)

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Here are two different, more future-proof alternatives to getting business credit cards using EIN only:

Build Personal Credit with the Capital One Secured Mastercard

If you’re seeking business credit cards using EIN only because you’re working with a personal credit score below 550, then your very best plan for improving your business credit card options is building your personal credit with the Secured Mastercard.

With this secured credit card, you’ll provide a security deposit to secure your credit limit and to mitigate the risk that Capital One takes on by extending you this credit limit. As a result, business owners with personal credit that’s on the lower side will be able to access this credit building tool much easier than they would be able to access an unsecured credit card.

Though most secured credit cards will require that you put down 90%—if not all—of your credit limit’s worth, the Secured Mastercard will allow you put down a security deposit as small as 25% of your credit limit, depending on your creditworthiness.

Plus, if you can’t put down you security deposit in one lump sum, the Secured Mastercard lets you pay it off in installments, so long as it’s paid in full within 80 days of opening your account.

This all means that the Secured Mastercard is the most flexible secured card on the market, and it lets business owners with struggling credit rebuild their finances with responsible spending.

Access Unsecured Credit and Build Personal Credit with the Spark Classic

On the other hand, if you’re seeking business credit cards using EIN only because you’re working with fair personal credit, then you might be able to qualify for the Capital One Spark Classic for Business.

This unsecured business credit card is available to business owners with personal credit of 550 or higher. With the Spark Classic, credit-challenged business owners can access an unsecured credit limit and cash back rewards—a flat-rate, unlimited 1% cash back for every dollar you spend.

Even better, Capital One will report all of your activity on the Spark Classic to personal credit bureaus. As a result, your responsible spending will be that much more effective in improving your personal credit. That means better business credit card options, quicker.

And you’ll be able to access all of these perks for free—the Spark Classic comes with no annual fee at all.

The Scoop on Getting Business Credit Cards Using EIN Only

You should now be well-equipped to move forward finding a business credit card using EIN only, or finding an alternative that’s with your best choice, regardless of your situation—or your goals. If you’re looking for a business credit card using EIN only in order to avoid personal liability on the card, then you’ll need to pick a corporate credit card or a gas card if you qualify. If not, look to a prepaid card.

That said, if you’re looking to apply for a business credit card using EIN only because your personal credit score doesn’t quite stack up, then really, really think about building your credit! Play the long game! Look to the Secured Mastercard or the Spark Classic to build your personal credit.

With responsible spending and a little bit of time, you’ll eventually be proud to provide your SSN for a personal credit check on a business credit card application.

The post Can You Apply for Business Credit Cards Using EIN Only? appeared first on Fundera Ledger.



from Fundera Ledger https://www.fundera.com/blog/business-credit-cards-using-ein-only

How the Trump Tax Plan Will Affect Your Small Business

Whether you’re an accountant, business owner, or average citizen in the United States, unless you have the ability to freeze time, you likely have one thing on your mind until April 17. And that’s taxes. Especially now that the new Trump tax plan could impact small business, there are more unanswered questions than ever.

The IRS’s tax code is complicated as it is, and small businesses often have trouble understanding their own business tax records and liability. Now, with all of the tax code changes recently passed into law, how will the new Trump tax reform plan affect small businesses?

Officially called the Tax Cuts and Jobs Act, Trump’s tax reform plan—and all of the legislation that led up to its passage—has been the subject of much discussion since it was signed into law. The new tax code sets into motion new deductions and credits that will affect each small businesses’ tax liability differently. And what’s most important is that those changes have already kicked in.

So, as we’re already barreling headfirst into tax season, business owners and business accountants are scrambling to figure out how the Trump tax plan will impact small business. Although you won’t be able to calculate the exact dollars and cents until you go through your financials line by line with your tax team, this breakdown should really help you understand the impact of the new tax plan on your small business.

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First: How Is Your Small Business Structured?

That’s the most important question when you’re trying to figure out how the Trump tax plan will impact your small business. The way you’ve structured or incorporated is extremely important, since it’ll determine the deductions and credits you’re eligible for under the Tax Cuts and Jobs Act.

To understand how Trump’s tax plan will impact your business, let’s first re-establish the different categories of businesses entities at the center of Trump’s tax plan:

  • C-Corporation (C-corp): This is a corporation that’s a separate legal entity from its owners. A C-corp can make profits, be held legally liable as an entity unto itself, and is taxed separately. Unlike LLCs, partnerships, and sole proprietorships, C-corps are taxed both at the corporate level (Form 1120) and then again at the personal income tax level if corporate income and payments are distributed to the company’s shareholders.<
  • S-Corporation (S-corp): This is a corporation that’s structured to avoid the double taxation of C-corps. S-corps benefit from pass-through taxation—essentially, business owners report their profit and loss on their individual tax returns to avoid being taxed twice.
  • Sole Proprietorship: This is a business that has no legally separate existence from its owner. That means that all income and losses are taxed on the individual business owner’s personal income tax return.
  • Limited Liability Company (LLC): This is a company that consists of one or more people. In this business structure, owners are not personally liable for the company’s debt, and taxes are passed through to the business owners.

Different Trump Tax Plan Benefits for Various Small Business Structures

The new tax plan brings a slew of new deductions, new tax credits, and tools that small business owners can take advantage of to reduce their tax burden.

Decreased Corporate Tax Rate for C-Corps

Perhaps the most widely debated change is that the Trump tax plan cuts the corporate tax rate. Under the Tax Cuts and Jobs Act, C-corps are taxed at a flat rate of 21%—a cut from the previous range of 15%-35%.

How does a change in the corporate tax rate impact small businesses, especially if this tax break applies specifically to C-corps?

While this is a high profile component of Trump’s tax plan, most small businesses aren’t structured as C-corps. The majority of US small business are pass-through entities, such as LLCs or S-corps. So, although some small businesses are affected, this change mostly impacts Fortune 500 companies rather than small businesses.

Pass-Through Deduction

That does mean, however, that these businesses might be affected by the new pass-through deduction. The main difference that distinguishes a pass-through entity from a C-corp is how taxation is handled (hence, why we’re talking about it). So, rather than paying income taxes as a totally separate entity, the pass-through entity passes the profits and losses through to the owner. The business owner then reports that as personal income. (See, it’s passed through.) In that way, as the government sees it, the finances of the owner and the business are pretty intertwined.

The absolute biggest thing you need to know is that under Trump’s new tax plan, small businesses that are filing as pass-throughs can take a 20% business income deduction.

To qualify for this 20% deduction, business owners must have a taxable income of below $157,500 if single or $315,000 if married and filing jointly. So, if your business is structured as a sole proprietorship, partnership, LLC, or S-corp, you could qualify for this pass-through deduction of 20%.

The deduction doesn’t lower your adjusted gross income, and you aren’t required to itemize on your taxes in order to take it. If you do qualify, a 20% deduction will be applied to whichever is lower—your qualified business income (the ordinary income of the business), or your taxable income minus capital gains.

A much simpler way of putting it: If you’re an owner of a pass-through entity, you’ll now be able to shave 20% off your earnings before paying taxes on it. But there’s always a catch, isn’t there?

Unfortunately, there’s a big one here. If your pass-through business generates revenue through the professional services of one individual—think doctors, lawyers, accountants, and consultants, for example—you’re not eligible for the deduction. However, if you are a sole proprietor operating outside the field of professional services (e.g. you sell goods), you’d be eligible to take the deduction.

Bigger Write-Offs for Big Expenses

A new provision of Trump’s tax plan lets businesses write off a larger portion of large equipment purchases up front, instead of depreciating them over a number of years.

These changes are part of a tax-saving tool called bonus depreciation. It sounds more complicated than it is: Basically, when your business buys a new piece of equipment, you typically can write it off a little at a time each tax season. This is a new tax deduction that lets you write off the entire cost of that equipment purchase for the year you bought it.  This way, you can spread out the cost of an asset you purchase and use for business over a number of years (like a car) until you either recover the cost of the asset or stop using it.

Bonus depreciation used to only cover new equipment purchases—but under Trump’s tax plan, it’ll cover all equipment that’s still in use. Previously, businesses were only able to deduct up to $510,000 in equipment purchases. Under the new tax plan, business owners can deduct up to $1 million in equipment purchases. If you’re thinking, That’s a big difference! well, yes, it is.

How do these new equipment deductions from the Trump tax plan affect your small business? Under the new tax plan, you can deduct 100% of the cost of an asset in the year you buy it, whereas previously you were only able to take 50% of the value.

In addition to increasing the percentage of value you can deduct, the new law lets you take the deduction over five years, whereas previously it was only eligible in the year the asset was placed in service. The deduction has also expanded to include used or old equipment—anything as big as a building or as small as a computer.

So, if you’ve purchased new equipment, a new vehicle, or snapped up any new real estate since September 2017, this element of the Trump tax plan benefits your small business. You can write 100% of the cost for that off this year.

Repealed Corporate Alternative Minimum Tax

The Alternative Minimum Tax (AMT) is a tax tool designed to make sure that large corporations don’t take too many deductions and avoid paying taxes. The Trump tax plan repealed the corporate AMT, which helps guarantee that businesses can reap the benefits of the new tax cuts.

Essentially, the AMT is a separate way of calculating your tax liability. Every business is required to calculate its tax burden in two ways: the normal way for corporate income taxes and, again using this other method, the AMT. Most tax software will automatically make both of these calculations for you. Once those two calculations are made, the business must pay whichever is the higher of the two tax burdens.

Figuring out the AMT is pretty complex, but the only thing you really need to know is that you don’t have to figure it out anymore at all. There is no longer an AMT to calculate for small businesses. So, if you feel like you’re finding deductions and exemptions that make your business’s tax burden easier, ride the wave—there’s no alternative calculation to hold you back!

The repeal of the AMT, while contested in the House and Senate versions of the bill, was met with excitement by the business community. Keeping it in place would get rid of a lot of the benefits of lower tax rates for businesses, because it guarantees that businesses pay a certain rate regardless of the deductions they take.

Updates to Accounting Methods

The Trump tax plan lets more companies take advantage of the cash method of accounting, rather than the accrual method. Using the cash method of accounting, revenue is recorded as soon as the cash is received from customers, and expenses are recorded as soon as they’re paid to suppliers and employees. That’s different from the accrual method, in which revenue is recorded when it’s earned and expenses are only recorded when consumed.

The time difference is the important part—under the accrual method, business owners could get stuck waiting until they sell inventory to deduct the cost of it, rather than being able to deduct it when they make the purchase.

Generally, manufacturing businesses are required to use the accrual method, but the new tax plan raises the annual revenue threshold from $5 million to $25 million, drastically increasing the number of businesses that can qualify for an exemption from that rule.

That’s a huge benefit for any manufacturing businesses and for any small businesses that deal with inventory. And here’s why: Accrual accounting requires that income and expenses be booked when they are owed, rather than when they are paid or received. It can be costly to figure out the value of inventory—especially for small businesses who operate in volatile markets where pricing is always fluctuating.  

Trump’s tax plan relaxes the requirements around using the accrual method. Under the new law, businesses with an average annual revenue of $25 million or less are exempt from the requirement, meaning they can use the cash method. That’s up from $5 million under the previous tax code.

The takeaway here? Many more small businesses will now be able to deduct inventory when they pay for it, rather than needing to wait until that inventory is sold. However, it’s important to remember that the accrual method has its value too, especially when it comes to business forecasting.

Family Leave Credit

The Trump tax plan also creates a new credit for wages paid for family or medical leave. The intention of this tax credit is to encourage employers to pay when their employees need leave—something that can be tough on small businesses. Depending on the amount of wages paid out, the tax credit can range from 12.5% to 25%.

This part of the Trump tax policy isn’t permanent, though. Since it only lasts through 2019, make sure to take advantage of it and provide that leave for your employees! Everyone will benefit!

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Changes Within the Trump Tax Plan That Could Negatively Impact Small Businesses

Although the new tax plan brings several new credits and increased deductions to incentivize things like investing in new equipment and providing family leave, Trump’s Tax Cuts and Jobs Act also removes some benefits and tax tools that small business owners used to take advantage of across all sectors.

With that in mind, it’s important to remember that each industry will be affected by changes to the tax code differently. Some of these tax changes could impact your small business by increasing your tax burden:

Repealed Deductions

Business Interest Deduction

The business interest deduction was an important part of the prior tax code that helped out business owners who took out small business loans to cover relevant operating costs. The interest on those business loans would be deductible as an ordinary business expense.  

While the business interest deduction wasn’t fully repealed in the Trump tax plan, it was significantly decreased, which might drive small business owners’ taxes up from years past.

Under the Trump Tax plan, the business interest deduction is cut to 30%. That’s a long way from before, when the business interest deduction wasn’t restricted at all. This’ll impact the way small businesses file taxes this season because they can now only deduct an interest expense of up to 30% of their business’s EBITDA (earnings before interest, taxes, depreciation, and amortization).

While this mostly impacts companies with a taxable profit, like C-corps, small businesses that have a lot of debt on their books should be especially conscious of this change. But it’s not all bad news: If your small business has an annual average gross receipt of $25 million or less for the past three years, you’re in luck—your business is exempt from this rule.

The Controversial Section 199 Manufacturing Loophole

Trump’s new tax plan got rid of a deduction that was commonly claimed by manufacturing businesses, called the Section 199 deduction. This was one of the biggest loopholes cited by critics of the former tax code. For example, if a company assembled, say, a gift basket onsite, even if the basket comprised fully pre-manufactured goods, the gift basket company could claim the controversial Section 199 deduction.

Section 199 allowed business owners to take a 9% deduction on income from qualified production activities, with the intention of incentivizing domestic manufacturing in the U.S. Manufacturing firms can no longer claim this benefit because it was repealed in this tax bill.

Deduction for Entertainment Expenses

Any business owner in client service is familiar with the dynamic of wining and dining a client. Sports games, dinners, drinks—all of that entertainment is fun, but pricey. At the same time, it can often be the best way to attract new business, so the tradeoff is often worth it. Especially if you could write it off come tax season.

Prior to the Tax Cuts and Job Act, business owners could deduct up to 50% of expenses they’d paid for business-related entertainment. No more: The new tax plan does away with deductions for entertainment expenses entirely.

Unfortunately, that means a lot of business owners are going to have to start paying taxes on things like box seats and dinners out with clients. Or drop them from their business plans entirely.

Deduction for Providing Employee Meals

Another employee perk that used to be deductible were employee meals. Now, if you feed your staff on business premises, that food that was formerly 100% deductible under the former tax law is now only 50% deductible. By 2025, it won’t be deductible at all.

Deduction for Transportation Expenses

This one is pretty straightforward—and one that a lot of small business owners are going to miss. Under the new Trump tax plan, business owners can no longer deduct the cost of providing employee parking, public transportation passes, and bike commute reimbursements.

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What Other Impacts Can Small Business Owners Expect to Feel from the Trump Tax Plan?

As with most complex legislation, you can expect the impact of Trump’s tax plan on your small business to be a mixed bag. That’s especially true for an overhaul like this, which completely rewrites many aspects of the tax code. You’ll probably end up finding that some things that may benefit your small business directly, especially if you’re a pass-through entity, and that other pieces, like deductions you’re used to taking, have disappeared.

The most important thing to do to stay informed about how Trump’s tax plan will impact your business is to speak to your accountant. Keeping open those lines of communication with your tax team will help you find out which new credits and deductions you can take advantage of this year, and in the years to come.

These chats might even change the way you do business—like implementing new family leave policies, strategies for tracking inventory, or accounting methods!

Things to Think About As You Do Business Under the New Tax Code

1. The best way to invest in your workers.

You might have noticed that as a reaction to corporate tax cuts, U.S. businesses are giving out bonuses to at least 3 million workers across the country. Moving forward, small business owners have an opportunity to determine how much their tax burden will change, and evaluate the best way to invest any potential savings into their businesses.

Bonuses are just one way to do this—owners can also pass this money to their workers in the form of other structural investments, such as wage increases. Business owners should definitely weigh the impacts of giving a one-time bonus versus a permanent wage increase, since these will definitely impact their teams differently.

2. Temporary versus permanent code changes.

Although these changes to the tax code kick in immediately, not all of them last forever. Some provisions expire as early as 2019, and others last through 2025. Some have also been instituted in perpetuity.

Again, you’ll need to talk to your accountant (sensing a theme here?) for the most accurate advice—and especially the kind that pertains to your specific industry, and you personally.

3. The impending deadline to reclassify.

Most immediately, small business owners should keep an eye out for the March 15 deadline to consider entity classification. Is your business set up the most advantageous way? Since this will impact the way you file your taxes and the credits/deductions you will be eligible for, this should be top-of-mind.

The goal of widespread tax cuts are to help empower businesses to invest in their employees and growth. If you’re a small business owner trying to determine the impact of the Trump tax plan, take advantage of all of the small business tax information resources available to help you along the way!

The post How the Trump Tax Plan Will Affect Your Small Business appeared first on Fundera Ledger.



from Fundera Ledger https://www.fundera.com/blog/trump-tax-plan

Sunday, February 18, 2018

8 Ways to Save Money on Small Business Insurance This Year

Every dollar counts when you own a small business. Before making any major purchases, savvy business owners typically weigh their options. It should be no different when it comes to purchasing small business insurance—it definitely counts in that category of “major purchase,” after all.

And being hasty with decisions around small business insurance can end up costing you serious money in the long run.

Time for you to re-up on your small business insurance policy? Before you buy or renew, consult with these eight essential tips to help save you money. They’ll not only help you find affordable small business insurance that provides the right level of protection for your company, but they’ll make sure you’re covered like you should be … just in case.

1. Compare small insurance business quotes from multiple carriers.

Shop around and gather rates from multiple business insurance companies so you can compare prices and get the best deal. However, price shouldn’t be your sole consideration.

When you pick the best small insurance policy for your company, your ultimate goal is to get the appropriate coverage at the lowest rate. You do your business a disservice if you settle for a bargain policy that leaves you underinsured. If an accident happens, you’ll end up down and out. An insurance agent can help you determine whether your policy limits are appropriate based on your revenue, risk, and other factors.

2. Work with an independent agent with a small business insurance background.

Independent agents have access to multiple small business insurance companies, whereas captive agents can only sell policies for one company. Make sure the agent also has experience working with small business owners in your specific industry. That background helps them understand your unique challenges, the policies you most likely need, and the policies you can go without.

3. Bundle business insurance policies.

Small business owners can often save money by buying multiple insurance policies from the same company. For example, depending on the type and size of your business, you may qualify for a business owner’s policy. This combines general liability insurance with commercial property coverage at a price lower than buying the policies separately.

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4. Install safety features, such as monitoring and detection systems.

Investing in systems that can help prevent robberies or property damage can pay off in lower premiums for commercial property coverage.

Think about investing in security upgrades for your business including:

  • Deadbolts
  • A hard-wired alarm
  • Sprinklers
  • Security cameras

Insurance companies often offer premium discounts for your small business if you can demonstrate that you’ve taken steps that reduce your loss exposures.

5. Take on a higher deductible.

Typically, taking on a higher deductible will lower your premium. But, that said, look into your finances—before you pick a policy with the highest possible deductible, make sure you can pay that deductible if you ever need to file a claim. Of course, small business insurance won’t do you much good if you can’t afford to use it.

6. Reevaluate your small business insurance policies each year.

It may be tempting to renew your policy without a second thought, but that might leave some serious money on the table. Instead, use that annual renewal opportunity to discuss your insurance needs with your agent. For example, if you downsized your business, your policies should reflect that change.

In addition, you should call your agent at any point in the policy term if you:

  • Move to a new office
  • Buy new equipment
  • Increase or decrease your number of employees
  • Buy a new vehicle for your business
  • Change your service offerings

In general, it’s super important to keep the line of communication open with your agent to make sure you pay for the right amount of coverage.

7. Properly categorize your employees.

The way you classify a worker impacts your workers’ compensation insurance needs and costs. In most states, you must carry workers’ comp for your employees. If you aren’t sure if the worker is an employee or an independent contractor, you may want to check with an attorney.

The laws can be confusing—even interns can be considered employees in some cases. Do your research to avoid violating workers’ comp law or paying extra for insurance you don’t need.

8. Pay your premium in full.

When you purchase small business insurance, you can usually pay the premium in monthly installments or make one full payment upfront. While spreading out the payments may seem more cost effective, insurance companies often give you a discount for paying the premium in full.

If you aren’t sure which policies you might need, learn about common small business insurance options.

The post 8 Ways to Save Money on Small Business Insurance This Year appeared first on Fundera Ledger.



from Fundera Ledger https://www.fundera.com/blog/save-money-small-business-insurance

Saturday, February 17, 2018

Explore the Best Visa Business Credit Cards of 2018

Let’s take the banks out of it—which Visa business credit cards top the list?

Whether you’re looking for travel perks, excellent rewards on everyday office purchases, 0% intro APR, or a way to build credit, Visa’s got you covered.

We’re breaking down the many benefits Visa offers and reviewing the best Visa business credit cards of 2018.

TL;DR: The Best Visa Business Credit Cards of 2018

The four best Visa business credit cards of 2018 will offer you a variety of stellar rewards programs for your business spending. For the best Visa business credit card for travel rewards, look to the Ink Business Preferred, which offers its cardholders the opportunity to earn a welcome bonus worth upwards of $1,000 of free travel.

If you’re looking for cash back reward and a 0% intro APR period from your Visa business credit card, then the Ink Business Cash is your best bet—this business credit card offers tiered cash back rewards along with a 12-month 0% intro APR period.

On the other hand, if you want no-fuss, flat-rate cash back from your Visa business credit card, then consider the Spark Cash. This card will get you a flat-rate, unlimited 2% cash back for your business spend.

Finally, if you’re looking for Visa business credit cards that provide the opportunity to build or rebuild credit, then look to the Spark Classic, which is available to business owners with personal credit as low as 550.

No matter which Visa business credit card you end up opting for, you’ll be able to access some universal perks. For all Visa Business credit cards, you’ll be able to access little-known perks like roadside assistance and purchase protections. Plus, for Visa Signature Business you’ll access additional perks like travel accident insurance and lost luggage reimbursement.

Best Visa Business Credit Card for travel rewards: Ink Business PreferredSM


The Chase Ink Business PreferredSM is the top Visa business credit card offering for business travelers.

It kicks off with a great signup bonus: 80,000 Chase Ultimate Rewards Points when you spend $5,000 in the first 3 months of cardmembership.

That’s $800 if you redeem as statement credit or gift cards. On the other hand, if you redeem for travel booked through Chase’s online portal, your signing bonus could be worth $1,000.

But, even more than that, if you transfer to one of Chase’s airline or hotel loyalty partners and redeem strategically, your signup bonus can be worth upwards of $1,500!

As for ongoing rewards, spending with the card will earn you:

  • 3 Ultimate Rewards Points per $1 on the first $150,000 spent in combined purchases on travel; shipping purchases; internet, cable, and phone services; and on advertising purchases made with social media sites and search engines
  • 1 point per $1 elsewhere

These rewards are exciting. But do keep in mind to measure the benefits of the card’s reward program against the downside of the card having a $95 annual fee.

Nonetheless, there are a few more perks included that should factor into your decision, as well. There’s no foreign transaction fee or charge for additional employee cards. Plus, the Ink Business Preferred comes with some great Visa advantages.

As a Visa Signature Business card, it comes with lost luggage reimbursement, travel accident insurance, and a host of other perks that you can read more about in a later section detailing what it means to carry a Visa Signature. 

If you travel for business and are looking for Visa business credit cards, then there’s not much better for you than the Ink Business Preferred.

Best Visa Business Credit Card for cash back and best for 0% intro APR: Ink Business CashSM credit card


In another nod to Chase’s business suite, the Ink Business CashSM keeps up the tradition of good rewards. Nonetheless, it also offers simplicity in the form of cash back and no annual fee.

To start, the Ink Business Cash offers a $300 cash back bonus if you spend $3,000 in the first 3 months. As for ongoing rewards, the card rewards everyday business purchases with:

  • 5% cash back on the first $25,000 spent in combined purchases at office supply stores and on cellular phone, landline, internet, and cable TV services spent annually.
  • 2% cash back on the first $25,000 spent in combined purchases at gas stations and restaurants spent annually.
  • 1% cash back everywhere else.

Keep in mind that unlike the Preferred, there’s no annual fee with this card. Despite it not having an annual fee, this card’s also a Visa Signature Business card, so it carries the same Visa business credit cards perks as the Ink Business Preferred.

Our pick for the best Visa business credit card cash back offer, Ink Business Cash offers great rewards in areas where small businesses typically spend.

But the card also tops our list for its great introductory APR period: 0% interest on balance transfers and purchases for the first 12 months (keep in mind the 5% balance transfer fee, though). This is one of the longest 0% APR intro periods in the game. 

That being said, you’ll want to make sure you can pay off your balance before the full interest rate kicks in (that’s 9.99% to 15.99% plus the prime rate up to 29.99%, depending on your creditworthiness).

If you need to make a big purchase and pay it off over time, using the Ink Business Cash can offer more flexibility and better rates than a traditional bank business loan—and definitely better rates than carrying a balance on a card with no 0% APR period.  

Best Visa Business Credit Card for flat-rate rewards: Capital One Spark® Cash for Business


The Capital One Spark® Cash for Business is as straightforward as it gets:

  • 2% cash back on every dollar you spend
  • no rotating bonus categories
  • no spending caps
  • as the Samuel L. Jackson ads say, no hassle.

The card kicks off with a $500 signup bonus when you spend $4,500 in the first three months. Then, it gives a solid ongoing rewards rate with easy-to-use cash rewards.

It does come with a $95 annual fee that is waived the first year. There’s also no foreign transaction fee or charge for employee cards.

The no annual fee version of the card, the Capital One Spark® Cash Select, offers 1.5% cash back on all purchases and a $200 signup bonus when you spend $3,000 in the first three months.

Despite its annual fee, the 2% cash back Spark card is one of the best Visa business credit cards if you either spend more than $19,000 a year (in which case the extra 0.5% rewards are worth it) or you plan to hold the card for less than four years (which means the larger signup bonus outweighs the fee).

Otherwise, go with the Select.

Either way, though, you know exactly what you’re getting: simplicity and solid rewards.

Best Visa Business Credit Card for building credit: Capital One Spark® Classic


Finally, if your business is still establishing its creditworthiness, the Capital One Spark® Classic is a good choice for average credit. If you’re working with a credit score that rounds in at 550 or above, this business card option is available for you. 

Unlike many fair-credit options, the Spark Classic has no annual fee and even earns rewards—1% cash back on all purchases.

If you aren’t able to qualify for other cards on this list, the Spark Classic gives the same Visa Business benefits as other Visa business credit cards and gives you a chance to build your credit—can’t be fairer than that.

What Perks Do Visa Business Credit Cards Offer?

Depending on which level of Visa business credit card you go for—Visa Business or Visa Signature Business—you’ll get different levels of benefits from the card network.

Generally speaking, your bank provides you with the rewards (like cash back or travel miles on purchases). Meanwhile, the network provides some of the perks (like travel insurance).

Here are the extra goodies that Visa throws in with their business credit card options.

Visa Business: What You’ll Get

No matter which Visa business credit card you end up choosing for your business spending, you’ll be able to access the following base-level perks that Visa Business offers:

  • Cardholder inquiry service for your account balance and other customer service needs
  • Lost or stolen card reporting
  • Purchase security and extended protection
  • Emergency card replacement and cash disbursement
  • Rental car insurance
  • Zero liability for fraud
  • Travel and emergency assistance services
  • Roadside assistance
  • Visa Business Reporting

Visa Signature Business: What You’ll Get

Additionally, if you opt for a Visa Signature Business credit card, then you’ll gain access to even more perks through Visa.

With a Visa Signature Business credit card, you’ll get all of the Visa Business perks, plus:

  • Lost luggage reimbursement
  • Travel accident insurance

Are Any of the Visa Business Credit Cards Right for You?

Now you have all the Visa business credit cards laid out in front of you. Are you ready to take the next step with one of them?

Whether you’re a frequent business traveler or you’re just looking for solid, steady business credit card rewards, Visa likely has a business credit card for you.

Plus, no matter your spending habits or rewards preferences, you’ll be able to gain access to Visa Business’s top-of-the-line cardholder perks.

The post Explore the Best Visa Business Credit Cards of 2018 appeared first on Fundera Ledger.



from Fundera Ledger https://www.fundera.com/blog/visa-business-credit-cards

Is the Citi AAdvantage Business Credit Card the Best for Travel Rewards?

If you’re a frequent American Airlines flyer, you might be looking at the Citi AAdvantage business credit card for your business travel needs. And with a cursory look, there’s certainly a lot to recommend with American Airlines’s in-house credit card. There’s that great signup bonus, free checked bags, and bonus rewards.

But is it really the best option for travel rewards, especially if you fly American Airlines the most? And what if you don’t?

Here’s a comprehensive look at the CitiBusiness AAdvantage Platinum Select World MasterCard that’ll help you decide whether it’s the right business credit card for you and your jetsetting habits—or whether you should look elsewhere.

The CitiBusiness AAdvantage Platinum Select World MasterCard, Reviewed

For this card, American Airlines partnered with Citibank to create a solid business travel credit card. It’s meant to appeal to loyal, frequent fliers to make flights more pleasant and ease some fees, too. It’s also created to help those business travelers earn more miles in popular spending categories.

Welcome Bonus

When you sign up for the card, you’ll be awarded a signup bonus of 60,000 AAdvantage miles when you spend $3,000 in purchases within the first three months of account opening.

One nice thing about this signup bonus, along with all of the mileage that you accrue on the Citi AAdvantage business credit card, is that you’re able to use these miles within the entire OneWorld partner network. So, if you’ve been tempted to take a trip on British Airways, Cathay Pacific, or Qantas, this could be appealing.

Earning Miles, Perks, and Other Discounts

In addition to the signup bonus, you’ll earn double miles per $1 spent on American Airlines purchases, and double miles per $1 on select business categories including gas stations, certain telecommunication providers, and car rental companies. Anything else will earn you one mile per $1 spent. As you can see, this card is definitely focused on business spending based on where it allocates its double-mile bonuses.

You’ll get discounts on the plane itself, with 25% off inflight purchases. (Go on, treat yourself to that extra cocktail.) And Citi AAdvantage business credit cardholders also get a free checked bag and preferred boarding on flights.

Every year you spend more than $30,000, you’ll also get an American Airlines companion pass. It’s important to know that you can’t just cruise right into first class with a one-way ticket to Paris using this companion pass, though. In the fine print, the companion certificate is good for a $99 economy fare, and doesn’t include taxes.

Fees

The card has a $95 annual fee, but it’s waived your first year with the card.

There are also no foreign transaction fees, an important boon for international travelers. You also won’t have to pay to add employee cards to the account.

citi-aadvantage-business-credit-card

Who Should Get the CitiBusiness AAdvantage Business Credit Card?

The Citi AAdvantage business credit card is a great fit for a certain group of frequent business travelers—particularly those who fly often on American Airlines. Apply for this business credit card if you:

  • Check a bag on at least two round-trip American Airlines flights each year (savings on bag fees will outweigh the annual fee)
  • Loyally fly American Airlines for business, and do a lot of traveling on the ground once you land
  • Are certain you’ll spend at least $30,000 annually so you can access the companion pass

There are better business travel credit card options out there, however, if:

  • You don’t often check bags
  • You want the biggest signup bonus out there
  • You fly or incur fees on a variety of airlines, and would prefer general travel reimbursement instead

Simply, if you’re not a creature of habit with business travel and don’t get value out of airline-specific perks but still want to benefit from your trips, there’s likely a better option. You can earn rewards that fit more with your habits from a general travel rewards business credit card.

Alternatives to the CitiBusiness AAdvantage Business Credit Card

Chase Ink Business Preferred Credit Card

The Chase Ink Business Preferred Credit Card is considered one of the best credit cards for business travel, and rightly so. It takes home the honors for best signup bonus on the market: 80,000 Ultimate Rewards Points when you spend $5,000 in the first three months.

You can redeem Chase Ultimate Rewards Points in a number of ways—gift cards, statement credits, etc.—but they’re most valuable when transferred to one of Chase’s hotel or airline partners for award nights or flights.

Those partners include big names like Hyatt, Marriott, United Airlines, Southwest, and British Airways. (If you want to fly American, you technically still can by converting your Ultimate Rewards Points into British Airways Avios and using those for award travel on American. But you can’t directly convert them into AAdvantage miles, FYI.) You can also use them to book travel through Chase’s Orbitz-powered portal.

Redeemed strategically, your points can actually go further in Chase’s ecosystem, and also be more versatile.

As for ongoing rewards, you’ll earn triple points per $1 on the first $150,000 spent annually on:

  • Travel, including airfare, hotels, rental cars, train tickets, and taxis
  • Shipping purchases
  • Internet, cable, and phone services
  • Advertising purchases made with social media sites and search engines

You’ll earn one point per $1 spent past the $150,000 threshold and in all other spending categories. Like the Citi AAdvantage business credit card, the Ink Business Preferred has no foreign transaction or employee card fees, and a $95 annual fee (though the Preferred’s annual fee kicks in right away).

With the Ink Business Preferred’s signup bonus and higher rewards rate, this card is a better fit for most travelers.

That said, the Citi AAdvantage business credit card offers better perks if you fly American—the checked bag perk can save you $50 roundtrip, and if you meet the $30,000 annual spending threshold, the companion pass can be valuable, too. For loyal American business travelers, the Citi AAdvantage benefits can deliver specialized rewards.

Business Platinum Card from American Express OPEN

The Business Platinum Card from American Express OPEN is considered the standard in luxury business travel. Serious travelers carry this card for its versatility, options, and status.

The card offers access to the American Express airport lounge network, including Delta Sky Club, Centurion, and Priority Pass Select. Plus, you’ll get free Gogo Inflight WiFi or Boingo internet access, and an application fee reimbursement for Global Entry or TSA Pre-Check. The American Express Business Platinum benefits combine to make this card a way for harried business travelers to make their flights more bearable—and are the kind of perks that add up to major savings.

The card has a hefty signup bonus: 50,000 Membership Rewards Points when you spend $10,000 in the first three months, and an additional 25,000 when you spend another $10,000 in the same timeframe, for a total of up to 75,000 points. You’ll get great ongoing rewards: five points per $1 on flights and hotel stays booked through Amex’s travel portal, a point and a half per $1 for every purchase over $5,000 (up to $2 million spent), and one point per $1 elsewhere.

In addition, you’ll get a $200 airline fee credit to offset checked bag fees, in-flight purchases, and the like, and a 35% points bonus when you redeem for first or business class travel booked through Amex.

These benefits don’t come cheap, though: The card has a $450 annual fee, and its signup bonus and 1.5-point bonus category have high spending thresholds. Amex cardholders have to clear a pretty high bar to get the full benefits, but if they take advantage of them all, the card pays for itself.

Many business cardholders will find the Citi AAdvantage business credit card’s $3,000 spending threshold for 60,000 miles much more attainable than the Amex Platinum’s $20,000 threshold for 75,000 points. If that’s you, there are other cards worth considering.

There’s lots to think about when determining whether a certain business travel credit card is right for your particular type of business travel. It’s important you get the right rewards to maximize your spending. Read up for more on the best business travel credit cards—and then apply away!

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from Fundera Ledger https://www.fundera.com/blog/citi-aadvantage-business-credit-card

Friday, February 16, 2018

Can You Write Off Unpaid Invoices?

Unpaid invoices—as much as we wish they weren’t something we have to consider, we do. You know the drill: You get a new customer, provide a product or service to them and send them an invoice for payment. And then as you’re doing your books, you realize that money’s probably never coming. So, can you write off unpaid invoices?

It’s an insanely frustrating experience not to get paid for your work. The customer or client seems happy, and might even tell you how much they liked their experience with you. So you wait for them to pay the invoice. Especially if you offer payment terms to your customers, you go about your business not really thinking about collecting the invoice because the due date is still days or weeks away.

Then the payment due date comes and goes, and even after a late-payment reminder or a phone call, still nothing. Weeks turn into months, and your emails, letters, and phone calls go unanswered. You know what that means.

Accountants who work with small businesses often answer the frequent client question of whether they can write off unpaid invoices. They’re right to ask, because writing off unpaid invoices isn’t as simple as it sounds. As the business owner, you have a few questions to answer that’ll determine exactly whether or not your CPA can write off your unpaid invoices.

write-off-unpaid-invoices

And those answers matter because a write-off can affect both your bookkeeping and your taxable income, and the way keep you track of the same invoice can be different for both. (Phew!)

An example will help here for sure. As we go along, let’s pretend we’re working with an invoice dated 12/5/17 that is paid on 1/15/18 so we can see how it can be treated differently on our books and our tax return.

 

Question 1: Was that invoice recorded on the your business’s books?

The first test in determining if you can write off unpaid invoices is whether or not you recorded the invoice in your accounting system. If you prepare and save your invoices using a computerized accounting program like QuickBooks Online or Xero, then the answer is yes.

That’s because when you save the invoice, automated systems add the amount to your books, and the invoice will appear on the reports generated by the system until it’s either paid or written off.  

If you prepared your invoice using a program like Word, Google Docs, or something other than your accounting program (and didn’t record it some other way on your books) then the answer is no, because the invoice (and income) won’t appear on your reports. Which means that there’s nothing to write off.

Question 2: Was the income from that invoice reported on your tax return?

The second test in determining if you can write off unpaid invoices is whether you reported the income on your tax return. Let’s keep going with that example of an invoice created in December 2017 with customer payment actually received in January 2018. An accrual-basis taxpayer would include the amount of the invoice on their 2017 tax return, while a cash-basis taxpayer would include it on their 2018 return.

And if that invoice is never paid by the customer, can you write it off? It depends on whether you’re an accrual- or cash-basis taxpayer.

An accrual-basis taxpayer can write of the unpaid invoice because they paid tax on the amount of the invoice on their 2017 tax return. If they don’t receive the payment from the customer, they can deduct the amount of the invoice as a bad debt expense in the tax year that they write it off.

However, a cash-basis taxpayer cannot write off the invoice because the amount of the invoice was never included in their taxable income. Remember that a cash-basis taxpayer only includes the income when they receive the payment from the customer. If that never happens, the income is never reported and no deduction for a bad debt is needed.

So, wait a minute! Does this mean that you may need to write off unpaid invoices on your books and not on your tax return?

Actually, yes! If you use an accrual-based accounting system and file a cash-basis tax return, you’ll need to record a write-off to adjust the reports on your books, but you won’t write it off as a bad debt on your tax return. Remember, we can’t deduct a bad debt on our return unless we previously reported the income on an earlier return.  

Can You Write Off an Unpaid Invoice?

write-off-unpaid-invoices
The last test in determining whether you can write off unpaid invoices is considering the likelihood that the invoice will be paid in the future. IRS guidelines say that in order to deduct the amount of the unpaid invoice as a bad debt, you must have previously reported the income on a prior tax return and be able to prove that you have taken reasonable steps to collect the invoice from your customer.

Question 3: What is the likelihood that the invoice will be paid in the future?

There isn’t a magic number of days that the invoice is past due that makes the invoice eligible for write-off, either. According to the IRS, it’s the facts and circumstances surrounding the situation, plus whether the debt on the invoice is considered worthless, that determine whether you can write off the unpaid invoice.

In fact, the invoice doesn’t even have to be past due for you to write it off as long as you can prove that it was worthless when you wrote it off. This could happen if a customer abruptly goes out of business or tells you flat out that they have no intention of paying you.

Your Next Steps If You Have Unpaid Invoices

You’re required to take reasonable steps to collect unpaid invoices before you write them off. This could include making phone calls to your customers, sending letters, or even hiring a collection agency to collect the debt.

If your customer’s payment habits are affecting your own cash flow, you could consider using invoice financing to help minimize the possibility of write-offs. See a little more about how invoice financing works, and check what you’re eligible for now if you’d like.

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from Fundera Ledger https://www.fundera.com/blog/write-off-unpaid-invoices

The Capital One SBA Loan: Everything You Need to Know and More

There’s a very good reason that U.S. Small Business Administration loans are one of the most coveted business loans. With longer payback periods, higher borrowing limits, and lower interest rates, SBA loans are an ideal financing option for small businesses. And many major U.S. banks and finance institutions offer these. Among them is the popular Capital One SBA Loan.

But there’s no surprise, then, that since these SBA loans are so preferable, qualifying for them is notoriously difficult. Since only the most creditworthy businesses can qualify for SBA loans, how do you go about getting them?

And, specifically, how do you qualify for the Capital One SBA Loan? Let’s go through it here.

First: What Is an SBA Loan?

The most important part to understanding the Capital One SBA Loan is understanding the fundamentals of SBA loans themselves. Even if you know, it’s worth a review. So, the Small Business Administration does not administer loans itself. Again, the SBA is not itself a lender. Financing is still coming from a bank.

What makes this connected to the SBA specifically, however, is that the government entity acts as a guarantor for small businesses seeking financing. In other words, the SBA agrees to take on some of the risk of the loan by making itself responsible for up to 85% of the loan amount. That’s one of the reasons that only borrowers who are deemed very creditworthy are approved for this loan—the government doesn’t want to back anyone they expect to default.

That’s why SBA loans are commonly referred to as SBA-guaranteed loans. A lending institution—like a bank such as Capital One—will be more likely to approve your loan request if it is SBA-guaranteed, because it’s a lower risk for the lender.

Loans guaranteed by the SBA range from small to large amounts—between $500 and all the way up to $5.5 million—and can be used for almost any business purpose.

So, Then, What’s a Capital One SBA Loan?

It’s all in the name. In a Capital One SBA Loan, Capital One provides the loan and the SBA guarantees a portion of that loan. The actual financing will come from Capital One as the lender.

Capital One offers the most common SBA loan, a SBA 7(a) Loan. You can also get a Capital One SBA 504 Loan if you’re seeking fixed assets like real estate or equipment through a certified development company (CDC), a private, non-profit corporation that promotes economic development within local communities.

If you qualify for the Capital One SBA Loan, they’ll match you with the right loan for your business needs. And you can do this with the assurance that the SBA has deemed Capital One an SBA-preferred lender—this means that the SBA believes that Capital One is proficient in processing SBA-backed loans.

More on Each of Capital One’s SBA Loan Products

You can apply for a few different Capital One SBA Loans. Different programs are a fit for different types of small businesses. Here’s a spotlight on the two SBA loans that could be a fit for you:

Capital One SBA 7(a) Loan Program

These are, by far, the most common of SBA loans. The SBA 7(a) Loan program is meant to help out lots of different types of businesses in lots of different regions at lots of different stages in their lifecycles.

They can be used for so much—refinancing debt, construction, purchasing you-name-it—and because they’re delivered to you in a lump sum like traditional term loans, they allow for a lot of flexibility in how you can use them.

Capital One SBA 504 Loan Program

If you’re looking to get a hold of cash for fixed assets, you might be a fit for the Capital One SBA 504 Loan. These loans can be used for things like renovation, real estate, and equipment, and are secured when businesses work in conjunction with a CDC.

You can’t use SBA 504 Loans for working capital or inventory, or to repay other debt. However, if you’re thinking about expanding your company with new facilities, getting new equipment, modernizing your place, or even building a parking lot, an SBA 504 Loan could be right for you.

A note: Capital One may have other small business loan products available, but you’ll have to get in touch with one of their loan officers to get the full scoop.

capital-one-sba-loan

Who’s Eligible for a Capital One SBA Loan?

As with the vast majority of small business loans, there’s no hard-and-fast rule for who’s eligible for a Capital One SBA Loan and who’s not. However, here are a few basic guidelines:

  • Your business must be for-profit.
  • Your business must be both based and operating in the United States.
  • Your business must be of a certain size and considered “small” for its industry—these requirements vary from industry to industry.
  • You must have invested some of your own money into the business.

Here’s the biggest one, though:

You have to be unable to secure traditional financing—financing without the SBA’s guarantee—in order to apply to have the SBA guarantee a portion of your loan.

If you can secure financing without the SBA’s help, there’s no need to apply for an SBA loan. However, if you’ve been denied financing by lending institutions and are looking for another place to turn, then the SBA should be the first place you look.

But remember: With SBA loans, you’ll have to qualify under SBA guidelines as well as guidelines from your chosen lender. More to come on that.

How to Apply for a Capital One SBA Loan

If you want to explore your options with Capital One, you should start by reaching out to them about your financing goals—either through their website, by phone, or at one of their many physical locations.

You’ll need have prepped documentation beforehand:

  • Loan request amount and detailed allocation of funds
  • Business plan
  • Business financials (profit and loss statement; balance sheet; projected financials for next 1-3 years; last 2 years’ worth of tax returns; business credit history)
  • Proof of ownership
  • Loan application history
  • Personal financials (personal financial statement; tax returns for last 2 years; credit history)
  • Owner résumés
  • Collateral offerings in case of default

Depending on the type of loan you want, there may be other requirements, too.

Is a Capital One SBA Loan Right for You?

As with any financing option, it really depends on your business’s financing needs and qualifications. But as with any SBA loan available, if you can qualify for SBA-guaranteed financing, there won’t be many better options available.

Alternatives to the Capital One SBA Loan

Just like Capital One, several lenders offer SBA-backed small business loan options for highly qualified borrowers. These also have those same great advantages as the Capital One SBA Loan—longer repayment terms, lower interest rates, and an opportunity to borrow up to $5.5 million.

If you’re a small business owner with a great track record in business and solid credit, and you think you’ll qualify for an SBA loan, that’s fantastic—you’re setting yourself up for one of the best options for financing available.

See which SBA loans you qualify for now, and check out all of your options!

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from Fundera Ledger https://www.fundera.com/blog/capital-one-sba-loan