5 Ways to Get Cash Fast

How to Get Cash Fast - 5 Ways

If you experience an emergency and need cash fast for your business, you won’t have the leisure to apply for an SBA loan or seek out new investors. You may not have personal savings to help you out.

There are options for obtaining a quick infusion of cash for your company.  Review all of the options and determine which is best for you after taking costs and other factors into account. Here are five ways you can get money within a day or so.

How to Get Cash Fast

1. Use Online Lenders

With some sites, you can complete an application in minutes and obtain cash in as short as 24 hours if you provide all required financial paperwork immediately. Usually, however, it takes a few days for approval. Some sources to consider:

  • CashCall
  • Kabbage
  • OnDeck

Check out the borrowing limits for which you can qualify. Keep in mind the cost of this borrowing, which may not be cheap.

2. Factor Your Receivables

Usually you have to wait 30 days, 45 days, 60 days, or more to collect on your invoices. However, you can factor them for quick cash. You’ll receive a discounted amount for the invoices you factor, so the cash you receive reflects the factor’s fee (typically 2 percent or more, depending on your industry, your customers, etc.).

It usually takes several days to set up an account with a factor. Once this has been done, you can submit invoices at any time and typically receive cash within 24 hours.

3. Use Your Business Line of Credit

If you have a line of credit in place, you can take cash from it at any time up to the extent of your line. You pay interest only on the portion of the line that you use.

The size of your line of credit depends on the typical loan criteria. These include capital or what your company is worth, capacity to carry debt, collateral that can be sold if you don’t repay the loan, and character, including the number of years in business, whether there’s been any prior bankruptcy, and other factors.

Caution: Some online lenders advertise 24-hour approval for a line of credit, but it’s really only a factoring variation, based on your invoices.

4. Cash Advance from Your Credit Card

Use your business credit card’s cash advance amount if you need money quickly. You can tap into your limit through an ATM or obtain more than the ATM’s limit in the bank.

The cost of money through a cash advance is steep, so use this option only as a last resort and only for a small amount of cash.

5. Borrow from Your 401(k)

If your company has a 401(k) plan in which you participate and the plan lets participants take loans, then this may be a good source of quick money. The maximum amount you can borrow is 50 percent of your vested account balance or $50,000, whichever is less. If your vested account balance is less than $10,000, you can borrow up to $10,000.

The loan takes only as long as the administrator needs to process it. If you’re the administrator, this can be very quick.

The good news about his type of loan is that interest can be very low and the repayment can be spread over five years, with no prepayment penalty if you want to pay it off sooner. The bad news is a reduction in your retirement savings while the funds are out of the plan, and you can’t deduct the interest.

Conclusion

As you can see, the instant-money options often require some advance planning so you can access them quickly when needed. For example, you can apply now for a line of credit, even if you don’t currently need the cash so it will be in place if you have a cash crunch. Or you can research now the best credit card option for a cash advance so if you need to use it, you won’t pay a cash advance fee — or at least not a hefty one. NerdWallet has a list of the best credit cards for this purpose.

Rain Photo via Shutterstock

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72 Percent of Small Business Owners Don’t Even Know Their Credit Score, Survey Says

Know Your Credit Score? According to Survey, 72 Percent of Small Business Owners Admit That They Do Not

Business credit scores are one of the key factors determining whether or not an enterprise qualifies for a loan. Yet surprisingly enough, most businesses don’t even know what their scores are.

This astonishing revelation has come from a new survey by Manta, an online community for small business owners.

The survey has found a majority (72 percent) of small business owners don’t know their business credit score. In fact, almost 60 percent of respondents don’t even know where they can access their scores.

The findings are based on a survey of more than 2,900 small business owners.

Key Highlights of the Manta Survey

Some other important findings of the survey include the following:

  • Business credit problems permeate across industries, from electrical (88 percent don’t have a line of business credit) to agriculture (72 percent).
  • Less than one-third of surveyed small business owners have business accounts that are tied to a line of credit.
  • Majority of businesses in restaurants (92 percent) and beverages (86 percent) said they are not aware of their business credit score.

Why You Should Know Your Credit Score

From a small business owner’s perspective, it’s very important to be aware of business credit score to avoid hassles with securing loans.

A business credit score, in essence, reflects your company’s creditworthiness. So apart from impacting your ability to get approvals for loans, it influences commercial partners when they determine extensions of lines of credit.

What’s more, government and large corporation contracts have minimum business credit score requirements. In other words, a bad credit score may lessen your chances of bagging a big contract.

Levi King, co-founder and CEO of Nav told The Huffington Post, “I’ve learned firsthand how a solid business credit history can help—or hinder—your business growth. For example, I missed out on a large job for the sign company because it didn’t have a strong business credit rating.”

How is a Business Credit Score Calculated?

When calculating a business credit score, several factors are taken into consideration. These may include payment history, credit utilization ratio, outstanding debts, company size and more.

These calculations are made by three credit bureaus: Experian and Equifax, Dun & Bradstreet’s PAYDEX and FICO’s SBSS.

Poor Credit Score Photo Via Shutterstock

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Nav MatchFactor Boosts Financing Approval Rate by Factor of Four

MatchFactor Improves Business Financing Approval Rate by Factor of Four

Nav, a business credit management marketplace, this week announced the launch of a new feature called MatchFactor. It uses a proprietary algorithm combined with machine learning to help small business owners save time searching for funding. And the company claims it makes getting approved four times more likely.

The feature, which is part of Nav’s financing dashboard, tells business owners just how likely they are to receive approval based on a rating that uses information such as their credit score and the lender’s qualifications for financing, the company says.

More than 67 percent of Nav customers surveyed about MatchFactor stated that they used their rating to apply for a loan or credit card, choose the best options or better understand the reasons why they did not qualify, says the announcement.

How MatchFactor Works to Boost Business Financing Approval

The machine learning process employed by MatchFactor continually improves the proprietary algorithm with each new application submitted and subsequent approval or denial from the lender. This makes the platform smarter, faster and more accurate than self-reporting systems used by other financial marketplaces.

Nav does not need to pull a business owner’s personal or business credit, which can adversely affect scores. It already has access to a majority of the information lenders use to judge whether or not a business is credit worthy.

MatchFactor Score Shows Likelihood of Financing Approval

The algorithm generates a “likelihood of approval” rating for each business credit card and financing offer available in the marketplace. Nav bases the rating on the business owner’s credit and financial data as compared to the lender’s underwriting requirements.

Nav customers will see a MatchFactor score next to each financing product in the marketplace, ranging from 0 to 100 percent with top matches displayed first. The higher the score, the more likely the funding option is to get approved.

 

MatchFactor Score Shows Likelihood of Financing Approval

“Nav’s goal is to make it easier for small businesses to find financing, sort through all the offers and apply with confidence,” said Gerri Detweiler, head of market education at Nav, in a phone interview with Small Business Trends discussing the announcement. “MatchFactor lets business owners apply more confidently by giving an indication of their likelihood to qualify for the loans or credit cards they’re interested in.”

Business Financing Stats Reveal Abysmal Trend

“Everyone says they love the American Dream, but when it comes to financing your own business, the dream and reality don’t add up,” said Levi King, CEO and co-founder of Nav, in the announcement.

The following business financing statistics, taken from the announcement, fortify King’s conclusion and reveal an abysmal trend:

  • On average, it takes 26 hours to search and apply for business financing;
  • 72 percent of small businesses get turned down for traditional loans;
  • 22 percent of business owners have given up on applying because they’re discouraged.

Nav’s Mission: Reduce U.S. Small Business ‘Death Rate’

Nav’s mission is to “materially reduce the small business death rate in America” by providing businesses with access to financing minus all the hassles associated with borrowing money, the announcement said.

“Helping business owners quickly access their best funding options can have a significant impact,” King said. “Most business owners barely have enough time to eat lunch, much less [spend] 26 hours researching financing.”

As a self-professed serial entrepreneur, King said he has been down the financing road more than 30 times. His experience provided the impetus to create MatchFactor.

MatchFactor has been in beta testing for a few months and is being rolled out to all registered users starting today.

Nav provides free access to personal and business credit reports, tools to build credit and a marketplace that connects users to pre-qualified financing. Currently, more than 130,000 entrepreneurs and business owners use Nav to manage their credit and get financial advice.

Visit Nav.com to learn more about MatchFactor or to apply for a loan.

Images: Nav

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Crowdfunding Publishers Rake It In, $100 Million Pledged Thus Far, Kickstarter Says

Crowdfunded Publishing Rakes It In, $100 Million Pledged Thus Far, Kickstarter Says

Product startups aren’t the only entrepreneurs using crowdfunding to finance their products. Crowdfunding giant Kickstarter has hit a landmark, recording $100 million in pledges to small publishers and self-publishing authors.

In a blog post, the company said that “more than a million people from around the world have gotten behind over 30,000 Publishing projects on Kickstarter, helping nearly 10,000 of them come to life.”

Crowdfunded Publishing by the Numbers

Here’s a breakdown of the statistics that made this milestone possible.

  • Successfully funded creators who have backed at least one other project: 6,414
  • Number of backers: 1,226,438
  • Number of countries/territories those backers have come from: 211
  • Number of times they have pledged to a project: 1,673,631

Kickstarter’s latest achievement is good news for writers and small publishers looking for funds to reach their audience. Notably, authors such as entrepreneur Eric Ries, author The Lean Startup are now turning to the site to raise funds for their literary work.

Apart from authors, literary magazines are also opting for the platform to meet their goals.

Kickstarter’s publishing outreach lead, Margot Atwell told The Guardian that “lately we’re seeing more authors and high profile publishers.”

“They’re becoming a critical mass and people are starting to notice it more.”

Interestingly, new indie publishers like the Big Bang Press are launching Kickstarter to fund books by fanfiction authors.

For all the advantages of moving to the Kickstarter platform to get published, there are some things worth keeping in mind. Rebecca Joines Schinsky and Jeff O’Neal, editors of Book Riot offered some words of advice on The Huffington Post, “Since the big wad of cash from your Kickstarter campaign goes right to you to do with what you will, you are going to be the last person paid. This means that keeping your expenses low throughout your project will leave you with more by the end.”

They also said that the decision to print or not should be taken after careful consideration. It’s a good idea to do a “limited run of print as a small incentive for backers to give during the campaign.”

A very important tip for fiction writers and publishers to remember is that selling is a challenge. It’s therefore crucial to create an engaging proof of concept. The project description should generate curiosity to entice the readers.

Leveraging social media is also a great way to achieve crowdfunding success on Kickstarter. Book Riot ran a promotional campaign and gave away goodies to expand its social reach. The idea helped the publisher gain new readers and boosted its chances.
Image: Kickstarter

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BizEquity Partners with Equifax in a Bid to Democratize Business Valuations

BizEquity Partners with Equifax in a Bid to Democratize Small Business Valuation

What is your business worth? Do you have any idea?

BizEquity, an online provider of business valuation big data, recently announced it has entered into a strategic partnership with Equifax (NYSE: EFX), an information solutions and global insights provider, to help answer this very question. The companies say they’re offering a joint business valuation service that will help small business owners better understand what their businesses are worth and help financial professionals prospect more effectively.

BizEquity says it has valued over 33 million private businesses and distributes its patented cloud-based service through thousands of financial advisors. The company says the new partnership marks the next step in democratizing business valuations, bringing together Bizequity’s “pioneering valuation service” with Equifax’s platform that reportedly organizes, assimilates and analyses data on more than 820 million consumers and more than 91 million businesses worldwide.

“We are proud to team up with Equifax, a global leader in the world-wide data and insights business, to harness the power of billions of data elements and use this data to democratize knowledge for every small business around the world,” said Michael M. Carter, CEO of BizEquity, which is headquartered in Wayne, PA, but has offices in key markets around the world such as London, Singapore and Delhi.

New Small Business Valuation Service

Business valuation knowledge is important for small business owners and financial advisors who want to optimize their ability to capitalize on a range of opportunities, such as business insurance and financing. With a significant number of businesses looking for financing and many proprietors planning retirement based on the sale of their companies, BizEquity insists this valuation knowledge is crucial.

Some 10 million businesses are actually expected to change ownership over the next 10 years and will need business valuation services that are mainly provided by financial institutions and advisors, according to the press release announcing the BizEquity and Equifax partnership. The partnership hopes to change this by jointly distributing the BizEquity valuation service to hundreds of thousands of small businesses.

“By jointly distributing the BizEquity service, targeting over 900,000 financial professionals, we’ll both innovate and disrupt by delivering value to the commercial market,” Carter said in the announcement.

As part of the agreement, Equifax says it will license certain data assets that include financial and business details of some 80 million companies to BizEquity to pre-value over 71 million private businesses using its patented cloud-based valuation platform that harnesses sophisticated algorithms and big data knowledge. This will enable financial professionals, such as bankers, financial advisers and wealth managers, to provide their clients and prospects with real-time insight into the fundamental questions of what their businesses are worth and how they are performing — in a fraction of the time it takes to accomplish a traditional business valuation, the partnering firms revealed in the announcement.

Highlights of the new valuation service include providing financial professionals and small businesses with:

  • Innovative big data analytics,
  • A reliable and viable technology platform,
  • The ability to build stronger client relationships,
  • Key business contact details, and
  • Prospecting intelligence and lead engagement.

“Combining our market-leading data assets with BizEquity’s award-winning technology is an excellent strategic relationship and an example of how Equifax continues to create innovative alliances,” said Joy Wilder Lybeer, senior vice president of Enterprise Alliances at Equifax. A company headquartered in Atlanta, Ga, Equifax has grown from a consumer credit company into a leading provider of insights and knowledge helping its customers make informed decisions.

Image: BizEquity

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8 Ways to Protect You and Clients from Financial Fraud

Fraud Protection Tips

The predicament unfolding at Wells Fargo where 5,300 employees were fired due to phony bank accounts opened to “boost their sales figures and make more money” is not new in the financial world.

Unscrupulous practices have occurred for years in varying degrees.

In 1985, a just-fired employee at a New York-based commercial bank stood in front of his former co-workers to explain how he siphoned money from several bank accounts to which he had access.

The explanation was not to teach other employees how to do the same, but rather, done while the former employee was flanked on either side by his former supervisor and a security guard, it was a warning to workers that such theft would not go unpunished.

Working alongside those employees as a management assistant gave me front-seat access to a situation I did not know was possible until hearing the details.

Wells Fargo’s dilemma provides small business owners with vital lessons to keep financial accounts secure and relationships with clients strong.

Financial Fraud Protection Tips and Tricks

For You

1. Make time each month to reconcile your financial accounts. Even if an accountant is privy to your records, it’s imperative that you personally review statements in a timely manner.

2. Access your credit report every year through the free service, AnnualCreditReport.com or through another preference. Such review won’t help you detect fraud that occurs between yearly audits. However, you will still see details that may negatively impact finances.

3. Set up alerts through mobile banking, and that includes a password on your cellphone that prohibits access to financial records if your phone is lost, misplaced or scanned.

4. Install apps such as Dasheroo and PowerWallet on your cellphone to know what’s coming in and going out of your bank accounts. Most apps are accessible on your computer and tablet so there’s no excuse for not taking action at a moment’s notice.

For Clients

1. Send a letter of assurance by mail and email whenever mismanagement occurs in your industry. You’ll receive praise for reaching out in times of crisis whether it’s stated verbally or acknowledged silently. Send the notice in both formats to ensure notification.

2. Call clients by phone to back up mail and email notices as additional security to strengthen client trust and value in your service.

3. Save notifications that you receive from other industries to re-structure alerts sent to clients. This is helpful if you have difficulty writing copy and do not have staff or an on-call writer to create the content.

4. Become an ally by notifying clients each time disruptions come to light in industries that impact them. For example, if you are not in the financial industry, notification about Wells Fargo and pointing clients to an online article that helps them detect fraud positions you as a valuable and reliable connection.

Which of these internal checks and client-based services will you pursue tomorrow?

Financial Security Photo via Shutterstock

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Separating Your Personal and Business Finances: Why and How

Why and How to Separate Your Personal and Business Finances

New business owners may seek to keep things simple and co-mingle their business and personal finances. This is a BIG mistake. Here’s why, and what you can to do to appropriately separate your financial activities.

Why and How to Separate Your Personal and Business Finances

Why Keep Finances Separate?

There are important financial, legal and tax reasons to separate your finances:

  • Financial. It’s difficult to know how well your business is doing if you can’t easily eyeball a bank balance devoted to your company. You may run into cash flow problems using a single account for business and personal expenses. Also, having a separate credit card for the company helps to build business credit scores.
  • Legal. If your business is a corporation or a limited liability company, you can lose the personal liability protection you sought by setting up such an entity by co-mingling your finances. The reason: If you don’t respect the separate legal status of the entity, creditors may not have to and can go after your personal assets to satisfy their claims. There’s a legal doctrine called “piercing the corporate veil,” which means courts can ignore your entity’s status for purposes of your personal liability for any claims against the business if you haven’t observed the formalities of a separate business entity.
  • Tax. For federal income tax purpose, the law requires you to keep good books and records. This can only be done if you have a business bank account into which you deposit income and from which you pay expenses. A rookie mistake is thinking you can remember what expense is for business, such as a meal, when it comes time to prepare your tax return; you can’t — and it can cost you tax deductions!

How to Keep Finances Separate

It’s really a no brainer. All that is needed to keep your business affairs untangled from your personal money matters is to have a separate business bank account and a separate business credit card. If you choose to use PayPal, also set up an account for your business.

You also need separate accounting for your business income and expenses. So, for example, if you use Quicken or Mint.com to track your personal expenses, use a separate accounting solution, such as QuickBooks, for your business.

To make sure you input expenses into the correct accounting solution, be sure to keep business receipts separate from personal expenditures. This can be done using separate files for paper receipts or separate online folders for e-receipts. Online options, such as Shoeboxed can help you keep track of business receipts.

If you use a home office, business with personal matters can all too easily get mixed up. In order to claim a home office deduction, the space must be used regularly and exclusively for business. Incidental personal use may not kill the deduction, but it’s better to keep personal things out of the home office area.

If you use a paid professional to prepare your tax return, ask that you receive separate invoices for services related to your business and personal income and expenses. For example, if you’re self-employed, an itemized bill enables you to take a business deduction for the cost of preparing Schedule C; the balance is deductible only on Schedule A if you itemize.

Conclusion

Keeping your business and personal life separate is extremely helpful. It’s easy to do. It merely requires a little housekeeping to set things up properly, and then to follow through.

Finances Photo via Shutterstock

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Looking for Funding? Here are Some Resources for Women Entrepreneurs

The number of women-owned businesses has risen in recent years, but they still face challenges. Overcome them with these tips for women entrepreneurs.

The number of women-owned businesses has risen dramatically in recent years, a healthy sign for those who value greater diversity in the nation’s economy.

Between 2002 and 2012, the number of women-owned firms increased at a rate 2½ times the national average (52 percent vs. 20 percent) and employment at women-owned firms grew at a rate 4½ times that of all firms (18 percent vs. 4 percent). In 2015, for the first time, the government met its goal of awarding five percent of federal contracts to women-owned small businesses.

But such gains must be put in perspective. For example:

  • Women-owned firms make up about one-third of all businesses in the U.S., but they receive less than five percent of all available loan dollars, according to a 2014 report by members of the Senate Committee on Small Business and Entrepreneurship.
  • Women-owned businesses are smaller than average, employing only seven percent of the private-sector workforce. More than 9 out of 10 women-owned firms have no employees other than the owner.
  • You know the outrage you feel when you hear that women earn 83 cents for every dollar that men earn? Well, women business owners make only 25 cents for every dollar their male counterparts earn.

Tips for Women Entrepreneurs

Here are some places female business owners can turn to for capital:

U.S. Small Business Administration

Loans for women from the U.S. Small Business Administration were up 18 percent in fiscal 2015 over the previous year. Some experts consider SBA loans the best option, as they come with flexible terms and low rates. The downside is the application process can be exhausting and frustrating and take weeks, even months, to complete.

The SBA doesn’t issue the loans itself, but backs loans issued by participating lenders, usually banks. The agency can guarantee up to 85 percent of loans under $150,000 and 75 percent of loans for more than $150,000.

The agency also recently set up a tool to match borrowers with approved lenders. The banks follow SBA guidelines but use their own underwriting criteria.

Grants

Money won is sweeter than money borrowed, and so before taking out a small business loan, female entrepreneurs should look into available grants. There aren’t many of these, but they are worth investigating.

Grants.gov is a database of all federally sponsored grants. In addition, economic development agencies at the state level, as well as many local governments, offer services to help new and established businesses succeed.

Funds may be available, too, from private groups. Here are two to get started with:

  • The Eileen Fisher Women-Owned Business Grant Program awards 10 grants annually to women-owned businesses committed to social consciousness, sustainability and innovation.
  • The Amber Grant Foundation each month gives $500 to a different woman-owned business, and at the end of the year one of the dozen winners is awarded a further $1,000.

Business Credit Cards or Your Bank

Often, a woman-owned business in need of financing will have to turn to business credit cards or or a small-business loan. Choices will depend on your creditworthiness and situation. Take your time and check out your options.

The data show women-owned businesses making significant strides, which is cause for optimism. But there’s still plenty of opportunity for growth.

Woman Business Owner Photo via Shutterstock

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3 Tips for Maximizing Your Social Security Benefits

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Here are three tips to help you maximize your Social Security benefit amount.

It seems like a simple equation. You pay money into Social Security during your working years. You get it back when you retire. And if you hold off past full retirement age, you get more. Unfortunately, it’s not that simple.

The reality is there are 2,728 core rules to the Social Security program.* Given that jaw-dropping number, it’s not surprising that many retirees are leaving substantial amounts of money on the table.

The problem is that we’re not armed with basic information about our options, according to Rob Kron, Head of Investment and Retirement Education for BlackRock. “None of us are given a user guide when we start paying into the system,” he says. “The Social Security statement can be confusing and there are areas that are not covered, so a lot of people don’t know they can apply for certain benefits.”

The result? Valuable benefits, such as those for spouses and survivors, can be underutilized.

social-security

Discover these helpful tips for collecting what you’re owed . . .Continue Reading >>

*Source: Get What’s Yours: The Secrets to Maxing Out Your Social Security

This information is being provided only as a general source of information and is not intended to be used as a primary basis for investment decisions, nor should it be construed as advice designed to meet the particular needs of an individual investor.

Rob Kron is not affiliated with Ameriprise Financial.

Ameriprise Financial, Inc. and its affiliates do not offer tax or legal advice. Consumers should consult with their tax advisor or attorney regarding their specific situation

Please refer to the Ameriprise Financial Internet Privacy Statement for our internet privacy policies.

Ameriprise Financial Services, Inc. Member FINRA and SIPC.

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Getting the Right Funding Can be Daunting – But There is Hope

getting-business-funding

Vendedy is the first social network designed to connect global travelers to street markets. Founded by Forbes30Under30 Entrepreneur Christine Souffrant Ntim, the small business’s goal is to digitize the $10 trillion dollar street market economy and make it accessible to anyone and everyone.

But when Ntim started out, she had an incredibly difficult time getting the funding she needed. Watch this quick video to find out how Vendedy turned fails into sales:

When you’re an entrepreneur attempting to start a small business, getting funding can be tough. That’s especially true if you’re like Ntim and trying to launch something bold and new. So its important to explore all both traditional and newer funding options and pick the one that best fits you and your business best.For example, you might be able to get a traditional small business loan, just beware of prepayment and other penalties that are part of the agreement. Newer types of options to consider include crowdfunding, online lenders and non-profit lenders. You might also consider applying for a loan from the U.S. Small Business Association.

Watch more of Carbonite’s “Small Business Storytellers” videos.

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