Capital One Spark Classic for Business Review: Unlimited Cash Back for Small Business Owners

The Spark Classic for Business card is a good card for small business owners with average credit. This card has unlimited 1% cash back and no annual fee, making it a great way to earn rewards from everyday business purchases. If you’re a business owner who frequently travels abroad, there are also no foreign transaction fees, which can save you money compared to other cards.

Spark Classic for Business from Capital One

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Spark Classic for Business from Capital One

Annual fee
$0 For First Year
$0 Ongoing
Cashback Rate
1% on all spend
APR
23.99%
Credit required
fair-credit

Average

How the card works

The Spark Classic for Business card offers unlimited 1% cash back on all purchases; there are no changing categories to keep track of each quarter. To redeem cash back, you can request a statement credit or a check. You can also set up automatic redemption either at a set time each calendar year or when a specific threshold ($25, $50, $100, or $200) has been reached. This can be done online at capitalone.com or by contacting the Rewards Center. Cash back can also be redeemed for credits on previous purchases, gift cards, and more.

This card also offers credit-building tools that help you monitor your credit score. Frequently monitoring your credit score will allow you to build and strengthen credit for your business as long as you practice responsible credit behavior.

Capital One offers quarterly and year-end summaries of your spending that break down what you purchased. This simplifies planning, budgeting, and taxes. Your purchase records are also easily downloadable to multiple formats such as Quicken®, QuickBooks™ and Excel®, making accounting easier for your small business.

How to qualify

This is a small business credit card. But to qualify, Capital One will consider both you and your business. That means your personal credit score matters — and you need to have average credit to qualify. Capital One defines average credit as someone who has defaulted on a loan in the past five years or has limited credit history (having a credit card or other credit for less than three years). Your business will need to have an average credit score and an EIN. You will also need to provide details regarding your business’s revenue. Remember — even though this is a business credit card, you will be personally liable for any charges on the card — even if your business goes bankrupt.

What we like about the card

No annual fee

You won’t pay an annual fee with this card. Many small business rewards cards charge a fee, making this card unique.

No foreign transaction fees

There are no fees when you travel abroad and use this card. This is beneficial if you travel for business frequently or only on occasion, as you will avoid foreign transaction fees that most other cards have.

Unlimited cash back

This card offers unlimited 1% cash back on all purchases. There is no minimum amount to redeem cash back. This is a great way to earn rewards on your business purchases.

Free employee cards

Employee cards come at no additional cost. No longer do you have the hassle of reimbursing employees when they use personal cards. You will also earn rewards points from their purchases. Just remember — any spending by an employee on a small business card will be your personal liability.

You don’t need perfect credit

Capital One is willing to work with people and companies that have less than perfect credit.

What we don’t like about the card

High APR

There is a high APR for this card. Make sure that you pay all of your bills on time and in full in order to ensure you will not rack up debt. Keeping a balance on your card will defeat any cash back you earn.

Who the card is best for

The Spark Classic for Business card is best for small business owners with average credit who want to earn rewards with minimal additional fees. We recommend this card for business owners who travel abroad and plan on having multiple employee cards, as you will not be charged any fees. With unlimited 1% cash back and no annual fee, this card is a great option for business owners.

Alternatives

If you frequently spend on gas

Sam's Club Business MasterCard<sup>®</sup>

Annual fee

$0 For First Year

$0 Ongoing

Cashback Rate

-

APR

15.40%-23.40%

The Sam’s Club Business MasterCard offers 5% cash back on gas purchases for the first $6,000 in a year (except when purchased from other wholesalers) and 1% cash back on all other purchases. This is a great added bonus for business owners who frequently spend on gas. Keep in mind that there is a $5,000 cap on cash back rewards you can earn each calendar year. Once you hit this cap, you will not earn any more rewards that year.

If you need to finance a purchase

Blue Business℠ Plus Credit Card from American Express

Annual fee

$0 For First Year

$0 Ongoing

Rewards

up to 2x points

APR

12.24%-20.24%

Variable

Owning a small business can be overwhelming, and at times, though not ideal, you may have to carry a balance on your credit card. If this is the case, the Blue BusinessSM Plus Credit Card from American Express offers competitive interest rates and a 0% introductory offer. This can help you save money while you pay off your purchase. In addition, there are rewards points you can earn on purchases. Keep in mind you need excellent credit to apply for this card.

FAQ

No, cash back does not expire as long as your account remains open.

No, you can redeem your cash back for any amount, anytime.

You can get your cash back upon request in the form of a statement credit or a check. You can also set up automatic redemption either at a set time each calendar year or when a specific threshold ($25, $50, $100, or $200) has been reached. Just go online to capitalone.com or contact the Rewards Center. You can also redeem for credits for previous purchases, gift cards, and more.

The post Capital One Spark Classic for Business Review: Unlimited Cash Back for Small Business Owners appeared first on MagnifyMoney.

A Comprehensive Guide to the Solo 401(k) for Business Owners

If you run your own business, one of the difficulties in saving for retirement is that you don’t necessarily have easy access to a 401(k).

Enter the solo 401(k). This is a retirement savings option for self-employed business owners who have no employees and their spouses. Read on to find out how it works, who is eligible, and how you can open an account.

The Solo 401(k): Explained

What Is a Solo 401(k)?

Also known as a one-participant or individual 401(k), a solo 401(k) works just like a company-sponsored 401(k) would, except it’s for self-employed individuals who don’t have any other employees other than their spouses and themselves.

Just like a traditional 401(k), you can control how your money is invested. There are different plans, with most comprising stocks, bonds, and money market funds. These are considered “free” prototype plans offered by brokerages, and you’re typically limited to investments offered by that brokerage.

However, there are options for those looking to participate in alternative investments, such as precious metals or even real estate. There are companies that help you open what’s called a self-directed 401(k) and that sponsor “checkbook control” solo 401(k) plans, meaning that individuals can control the type of investments they want to make, whether it’s stocks, bonds, foreign currency, real estate, or commodities. You do so by writing a check for investment purchases, from a bank account dedicated specifically for that purpose.

Who Is Eligible for a Solo 401(k)

Only self-employed individuals and their spouses are eligible for a solo 401(k). This plan is ideal for consultants, independent contractors, or sole proprietors. If you hire part-time workers or contractors, then you’re still safe. However, if they work for you for more than 1,000 hours a year, you cannot participate in a solo 401(k).

Furthermore, you need to have the presence of self-employment activity to be eligible, which includes ownership and operation of an LLC, C, or S corporation, a sole proprietorship, or a limited partnership where the business intends to make a profit. There are no criteria as to how much profit a business needs to generate, as long as you run a legitimate business with the intention to generate a profit.

If you are currently employed elsewhere, you can still open a solo 401(k) account if you’re serious about maximizing your pre-tax savings. If you work for an employer that offers a 401(k) plan, you can still participate in their plan alongside a solo 401(k) plan, as long as you don’t exceed the contribution limits.

Where to Open a Solo 401(k)

You can open a solo 401(k) with most major brokerages. For those looking for a custom plan, there are companies that specialize in providing those plans. Some insurance companies also offer solo 401(k) plans but only if your goal is to invest solely in annuities.

Below are some of the most popular companies offering solo 401(k) plans:

Vanguard – The individual 401(k) offers all Vanguard mutual funds. However, you cannot purchase exchange-traded funds (ETFs) or mutual funds from other companies and cannot take out a loan. There is no setup fee, but there is a $20 fee per account per year to maintain your solo 401(k).

SunAmerica – The SunAmerica Individual(k) offers mainly annuities as part of their plan. You can take out a loan (for a fee). It costs $35 to set up your account, and there is an annual maintenance fee of $75.

E-Trade – The E-Trade Individual 401(k) Plan allows Roth contributions and has a brokerage option with $9.99 trades for any ETF. They accept IRA rollovers and allow for loans. They also will pay you if you transfer your current solo 401(k) to them: $200 for $25,000-$99,000, $300 for $100,000-$249,000, and $600 for a $250,000+ plan.

How to Establish a Solo 401(k)

When opening a solo 401(k) plan, you want to choose the option best for your needs. Once you’ve selected your brokerage, you’ll need to have the necessary documents:

  • 401(k) plan adoption agreement
  • Designation of successor plan administrator, which requires a notary or a witness
  • Brokerage account application
  • Designation of beneficiary form
  • Power of attorney (optional)

If you plan on opening one for your spouse, you’ll need to do twice the paperwork (one form for each person).

Remember, you need to open a solo 401(k) account by December 31 of the tax year. You don’t need to actually fund it until the April 15 filing deadline. If you miss opening an account, you’ll have to wait until the next tax year to do so.

How Much You Can Contribute to a Solo 401(k)

Participants in a solo 401(k) plan can make contributions both as an employee and an employer.

For elective (employee) contributions, you can contribute up to 100% of your earned income, up to the annual contribution limit, which is $18,000 in 2017. Those age 50 or older can contribute an additional $6,000, depending on the type of plan, according to the IRS.

When making a contribution as an employer, you can contribute up to 25% of your earned income as an employee. Your total contributions cannot exceed $54,000 in 2017 ($53,000 for 2016), not counting extra contributions for those 50 or older.

For example, Mary earned $40,000 from her freelance business in 2016. She put $18,000 in this plan as an employee. As an employer, she contributed 25% of earnings, which is $10,000. In total, she contributed $28,000, which is the maximum she can contribute.

Remember, contribution limits are for each person, not each plan. If you are working full time for another employer and participate in that company’s 401(k) plan, combined contributions to your traditional 401(k) and solo 401(k) cannot exceed the annual limit.

To figure out the maximum contributions you can make, check the IRS website on how to calculate a more accurate amount.

Read more: 9 Essential Tax Tips for Entrepreneurs >

Learn More About Solo 401(k)s

The Pros of a Solo 401(k)

The solo 401(k) has higher contribution limits compared to other retirement savings plans. You can contribute up to $18,000 plus 25% of earned income, compared to a maximum of $54,000 or only 20% your earnings (whichever is less) with a SEP IRA. Your employer contributions are also tax deductible.

You also have the option to borrow up to 50% of your account’s value or $50,000, whichever amount is less.

The Cons of a Solo 401(k)

A solo 401(k) can get complicated to set up and maintain, particularly if you intend on opening a customized plan. Depending on the company you go with, fees can cost you at least a few hundred dollars to set up an account, not including fees to maintain the plan annually.

Even if you open a prototype plan, it can cost you. Yes, it’s free to set up, but they put many requirements on you as the owner. These requirements include filing tax return documents once a year if your plan has more than $250,000 in assets and keeping up to date with all records and transactions.

Alternatives to a Solo 401(k) Plan

There are two alternatives to a solo 401(k) plan — a SIMPLE IRA and a SEP IRA. The main difference between each is the maximum amount you can contribute to each year.

SIMPLE IRA – A Simple IRA plan is for those who as an employee (including those who are self-employed) have earned a minimum of $5,000 any two years before the current calendar year and expect to receive at least $5,000 for the current calendar year. You can contribute up to $12,500, plus an employer match of 3% of employee compensation. Those 50 or older can also contribute up to an extra $3,000. You can find more information about the simple IRA on the IRS website.

SEP IRA – A Simplified Employee Pension (SEP) plan only allows employers to contribute to the plan, unlike a solo 401(k). Employers can contribute a maximum of $53,000 or 20% of their net self-employment earnings, whichever amount is less.

Even with all its benefits, there may be a few reasons why someone is better off not opening a solo 401(k). “If you’re concerned about doing additional paperwork, a SEP IRA might also be a better choice,” advises Robert Farrington, founder of the College Investor. “If you’re working a side hustle and have a regular 401(k) at your day job, the alternatives might be easier.”

Who Solo 401(k) Plans Are Best For

While any of the above options are helpful for self-employed individuals, the solo 401(k) is best for those who are looking to invest heavily in their savings. “The solo 401(k) is best suited for a self-employed individual who wants to maximize their retirement savings,” says Farrington.

“Furthermore, if you’re a husband/wife/spouse team, your spouse can also contribute to the solo 401(k) with the same percentage of ownership, so you can get even more in tax savings and retirement contributions.”

The post A Comprehensive Guide to the Solo 401(k) for Business Owners appeared first on MagnifyMoney.

How to Get Approved for a Small Business Loan

Getting a loan to start or grow a small business is rarely easy, especially since the financial crash of 2008 and the credit crunch that followed. Finding the right lender and navigating the application and underwriting process is challenging. So being adequately prepared and taking practical steps to improve your chances ahead of time can help reduce the amount of time you’ll spend and reduce your frustration with the process. With that in mind, here are four tips for getting approved for a small business loan.

Know your business credit score AND personal credit score

Gerri Detweiler, Education Director for Nav, a platform that connects small business owners to financing, says that the first thing any small business owner should do before applying for a small business loan is check their business and personal credit score. “Some lenders may review one or the other, and some review both,” Detweiler says.

How to find your business credit score:

Your business credit score is based on trade credit (when a supplier allows you to buy now and pay later) and other debt in the business name, such as credit cards and equipment loans. Business credit is measured on a scale of 0-100, with a score of 75 or more being the ideal range. Both Experian and Dun & Bradstreet calculate business credit scores.

If your business is very new or hasn’t used credit in the past, you may not have a business credit score. In that case, Detweiler says, your personal credit score will probably play a larger role in getting the loan approved. Most lenders look for a personal credit score of 640-660 or higher.

How to find your personal credit score:

 

Find the right type of lender for a small business loan

Traditional banks may be the first option that comes to mind when you think about a small business loan, but Detweiler says most banks don’t make startup loans. Even existing businesses may have a hard time getting a bank loan of less than $50,000, depending on the lender.

Your first step should be talking to the bank or credit union that holds your business checking and savings accounts. They may be able to offer a term loan or line of credit. They may also be able to help you with a loan backed by the U.S. Small Business Administration (SBA). The SBA’s 7(a) Loan Program is designed to help small and startup businesses with financing for a variety of purposes.

Nonprofit small business loans

If a traditional or SBA loan is not an option, you might consider a nonprofit microlender. These loans are a bit easier for startups to qualify for. Their standards are less stringent because profit is not the lender’s objective. They often focus on helping disadvantaged communities or minority business owners. According to the Aspen Institute’s FIELD program, the top U.S. microlenders are:

  • Grameen America – helps women in poor communities build businesses
  • LiftFund – offers microloans in Texas, Louisiana, Mississippi, Alabama, Arkansas, Missouri, Kentucky, and Tennessee
  • Opportunity Fund – provides loans to low-income residents of California
  • Accion – offers loans from $5,000 to $50,000 throughout the U.S.
  • Justine Petersen – provides loans under $10,000 to entrepreneurs who don’t have access to commercial or conventional loans

Get your financial statements in order

Whether you apply for a loan through a bank, credit union, or non-bank lender and whether you rely on your business or personal credit, anyone who lends money is going to want financial statements.

Getting your financial statements in shape before applying for a loan will increase your chances of approval and help you qualify for more competitive rates. For your business, these are the key documents a lender will want to look at:

  • Profit and Loss (P&L) Statements
  • Balance Sheets
  • Statement of Cash Flows for the past three years

Providing financial statements can be a significant hurdle for small business owners and startups who’ve neglected their bookkeeping. If you’ve been cobbling together the books on your own, you probably haven’t been preparing your business financials in a recognized basis of accounting such as Generally Accepted Accounting Principles (GAAP). You may need to hire an accountant to get your business books in order and prepare the financials. This can be costly, so find out what your lender requires before you get started.

The lender may also want to look at a personal financial statement:

  • Your assets
  • Liabilities (debts) and contingent liabilities (such as a co-signed loan or outstanding lawsuits)
  • Income

You can download a Personal Financial Statement form from the SBA website for an indication of the information you’ll be required to submit, but banks often require their own form.

Run your own background check on Google

Gil Rosenthal, director of risk operations at BlueVine, a provider of small business financing, says lenders will often Google loan applicants and check social media profiles to see what others are saying about the business and its owners.

Loan underwriters are looking to see whether you are considered a trusted authority online, whether you’re using social media to promote your brand, and whether you quickly and effectively respond to customers. Be cognizant of your online reputation, including Yelp reviews, and keep your business and personal social media profiles up to date.

If your online reviews are less than glowing, Rosenthal says, “you can mitigate the impact by being prepared to explain anything negative that comes up in the application process.”

The bottom line

Even if you have all of your proverbial ducks in a row, finding the right terms from the right lender may take some time. By anticipating what your lender will review and require, you’ll greatly increase your chances of getting approved for a small business loan.

The post How to Get Approved for a Small Business Loan appeared first on MagnifyMoney.

Successful Entrepreneurs Share Secrets for Running a Lean & Mean Businesses

Let these entrepreneurial whiz kids make your life a little easier.

Running your own business is an unpredictable adventure with highs, lows, twists and turns. And while you’ll weather much of what comes along, you will also make mistakes. Why not minimize missteps by listening to the advice of those who have come before you? Here are 15 tips from successful entrepreneurs on being efficient, keeping overhead low and more.

Your Team

“Always be ready to adapt your needs to match your employees to their strengths, so that they will shine, instead of fitting them to the job description. In other words, the ’round peg versus square hole’ concept at its best.”

Christi Lopez, President, Bergerons Flowers, a floral design studio in Springfield, Virginia

“Invest wisely by hiring skilled experts — rather than less expensive novices — who can focus on their areas of expertise (for example, sales, marketing, public relations, graphic design) and can dive into the details so you are able to focus on the big picture and set the overall direction for the company.”

 Kelly Carroll Burgin, Owner/Founder of K. Carroll Accessories , a luxury vegan handbag line

“Outsource repetitive and time consuming tasks to a virtual assistant, like Peach Tree Virtual Assistants. If you are organized and have systems in place, they can often accomplish more in 10 hours a month than you could with the same amount of time.”

Kaysha van der Heyden, a modern wedding and lifestyle photographer based in Orange County, California

Virtual assistants are a great way to get help without a huge cost.  They can relieve you of low value tasks and because they’re virtual, you don’t have any additional costs. I’ve found my people through Elance (now Upwork).”

– Jamie Chang, Founder, Passport to Joy, an online program that guides couples through planning their own wedding

[Editor’s note: If you’re starting your own business or thinking about it, your good credit can make it easier. Here are some tips for not letting your business ruin your credit. You can check two of your credit scores for free on Credit.com.]

Coaching

“Business/marketing coaching is everything because I’m not amazing at that stuff, and my business grows so much faster when I invest in a coach.”

Meg Hodge, Owner, Centered: Richmond Acupuncture & Wellness, a well-being facility in Richmond, Virginia

“Amplifying the RestoPresto brand is essential so with a tight PR and marketing budget, I deeply value the affordable (and free) strategies, tips and guidance by PR coach Sabina Hitchen of Sabina Knows. Combining that ‘how to’ knowledge with free HARO (Help a Reporter Out) media leads has gained amazing press for the RestoPresto wearable blanket including a feature on the TODAY Show!”

Candi Obrentz, creator of RestoPresto, the lightweight compact pouch that unfolds to a soft, water-repellent, thin layer to sit on or wear

Efficiencies

“I use a few filters to determine how to prioritize my time and my business spending. First, I look for things that will help me increase sales, because without sales, your business will fail. Second, I look for things that I spend too much time on that I can automate or outsource. This frees up my time to spend on higher value activities that directly impact revenue and client satisfaction. If more business owners focused on these things first instead of the superficial things that don’t immediately drive revenue, we would have fewer business failures. Sales fund everything in your business. Not the other way around.”

Maria Bayer, a consultant who helps experts in creative fields book clients they love and get paid what they’re worth

“Schedule, schedule, schedule. Make sure you schedule out your days and times for efficiency while leaving time for emergencies or tasks running over.”

Kim Sayatovic, Belladeux Event Design, an event design and planning firm in New Orleans

“Use technology to your advantage. Take some time and research some apps that will help streamline your day. A few we like are Evernote, Todoist and Acuity. Also, manage your time wisely. Block off time throughout your day to work on projects, but don’t forget to schedule some time for yourself!”

Kevin Dennis, editor of WeddingIQ and owner of Fantasy Sound Event Services, a full-service event company based in Livermore, California

Reduce Costs

“Reduce premises costs. Move to smaller premises or allow staff to work from home to save rent, business rates and utilities. Also, rent rather than buy equipment. Renting reduces capital investment and lets you speedily upgrade equipment, while saving on maintenance and repair.”

Vernic Popat, Co-Founder of PlantOGram.com, which produces sustainable, eco-friendly fruit tree gifts an alternative to traditional gifts.

Travel cost-effectively. Also, hold teleconferences whenever possible, rather than traveling to meetings,” said Popat.

“When it comes to tools and software, keep only what you need, use and like, and dump the rest. This will help reduce your monthly costs,” said Jamie Chang.

Communicate

“Schedule 30 minute ‘coffee talks’ with your staff in the morning to go over current projects and then monthly brainstorm meetings outside the office — ‘wine and brain dump’ for future ideas and strategic planning.”

Lynette Lovelace, Creator and CEO of Lifetherapy, a retail site focusing on well-being.

“When launching a new initiative, always test markets first, especially if you’re planning to reach a national audience. The cost to launch on a larger scale can be considerable, so best to make sure you have benefited from consumer feedback while also reducing any uncertainties.”

Joanne Jiang, founder, LadyMarry, an app that guides engaged couples through the wedding planning process through an easy-to-use interface.

“For service-based businesses, it can be tempting to say yes to every project and client that comes along, even if you are too busy to handle everything.  But one bad client can make you miserable or even hurt your business. Say no to the projects that are not a good fit for you so that you have more space to say yes to your ideal clients and projects.”

Ann Oleinik, Ann & Kam Photography & Cinema, a husband-and-wife wedding photography and cinematography team based in Chicago.

Image: svetikd

The post Successful Entrepreneurs Share Secrets for Running a Lean & Mean Businesses appeared first on Credit.com.

5 Things That Can Make Your Business Plan Fail — & How to Avoid Them

If you don't believe in your business, how can anybody else?

Creating a business plan is an essential step in getting a new company off the ground. Writing this document helps founders not only evaluate their goals, but also communicate them to other people, especially investors. A good business plan can be the difference between funding your dreams on business credit cards and personal savings or getting support from a financial institute or business partner. Unfortunately, many business plans fail in this aim. Understanding common pitfalls and how to avoid them ensures you get the backing you need to develop your business idea.

Here are 5 things that can make your business plain fail — and how to avoid them.

1. Failing to Define What Your Specialty Is

Thousands of startups and small businesses pitch their business plans, and it’s important to stand out in the crowd to improve your chances of securing an investment. An effective way to do this is by clearly defining what makes your company unique, according to the U.S. Small Business Administration. This requires being clear about what your company offers in terms of products, services, unique skill sets, and experience. For example, if you’re starting a new restaurant, do you cater to specific types of clients, or do you have a renowned chef in the kitchen? When you can identify a niche in which you excel, you improve your chances of success.

2. Omitting Vital Information

The process of writing a business plan is as important as the plan itself, according to SCORE, a nonprofit association that works in partnership with the SBA to provide free services and advice for entrepreneurs. Writing the plan encourages you to think about your business in a systematic way. The SBA recommends covering the following areas:

  • An executive summary to give an overview of your plan
  • A company description, including what makes your business unique
  • Market analysis to show you’ve researched the industry and your competitors
  • Details of your business and management structure
  • Details on what products and services you provide
  • Marketing and sales strategies
  • A funding request, with financial projections to support that request and an explanation of how these figures impact the business

3. Insufficient Understanding of Finances

Investors need to feel confident their money is in the hands of someone who understands the world of business and finance, and not just their particular line of work. If you don’t understand terms such as APR or lack a thorough grasp of sales figures, potential investors will balk no matter how good the business idea is. Solid business plans include significant research and budgeting and cover sales strategies, contingency plans for additional funding, and firm details on how much it costs to start the business and keep it running. Any funding requests need to be backed up with detailed financial projections to help investors understand the sources from which the return on investment will come, and a clear definition of how long that will take.

4. Failing to Maintain a Living Document

A business plan projects three to five years ahead and acts like a roadmap that defines a company’s growth and development. Creating the document is an important first step for a startup, but once the business is established, the plan becomes no less important. The plan can help generate extra funding, develop new business arrangements with other companies, take on high-level employees, or identify and rectify inefficiencies in your company structure.

That’s why it’s necessary to make changes to the plan by creating new goals or correcting mistakes. A truly valuable plan evolves along with the company, according to Harvard Business Review. Making changes when necessary keeps the plan alive and helps to drive the business forward.

5. Lack of Determination

If you want someone to invest in your idea, it’s important to invest in it, too. Giving up the first time a pitch falls on deaf ears doesn’t lead to new opportunities. If an investor refuses to get on board, it’s a good idea to ask them exactly why and then use that information to your advantage in a subsequent pitch. That kind of input can be invaluable to achieving your business goals.

Remember, most business credit cards require a personal guarantee, which can affect your personal credit. You can view two of your scores for free on Credit.com.

Image: Cecilie_Arcurs

The post 5 Things That Can Make Your Business Plan Fail — & How to Avoid Them appeared first on Credit.com.

These 4 Small Business Credit Cards Are Perfect for Freelancers

A business credit card can make it easier to track costs and reward office expenses. Here are a few solid choices for freelancers.

[Disclosure: Cards from our partners are mentioned below.]

Americans are joining the gig economy in droves. In 2016, the Freelancers Union found that 35% of the U.S. workforce engaged in freelance work, an increase of more than 1 million people from the prior year. With freelancing on the rise, many workers may be managing business finance for the first time.

A separate credit card for business expenses offers several advantages. Most importantly, it makes tracking business costs easier and can help avoid headaches during tax season. Small business credit cards also reward freelancers for their business spending.

Here are four small business credit cards that can help freelancers fund their business.

1. Blue Business Plus Card

Perks: Two points per dollar on up to $50,000 in purchases each year, one point per dollar thereafter
Signup Bonus: None
Annual Fee: None
Annual Percentage Rate (APR): 0% intro APR for 15 months, then variable 11.99%, 15.99% or 19.99%
Why We Picked It: Cardholders earn points that can be redeemed for business and travel, and additional features make it easy to track business expenses.
Benefits: All purchases earn double points, which can be redeemed for travel, office supplies and other business expenses. There are several additional travel protections and insurance policies. You can upload receipts from your mobile phone and connect your transaction records with QuickBooks.
Drawbacks: Fewer merchants accept American Express compared to Visa or MasterCard.

2. Chase Ink Business Cash

Perks: 5% cash back on up to $25,000 at office supply stores and utility providers (phone, internet and cable TV), 2% cash back on up to $25,000 at gas stations and restaurants, 1% cash back on all other purchases
Signup Bonus: $300 bonus cash back when you spend $3,000 in the first three months
Annual Fee: None
APR: 0% intro APR for 12 months, then variable 13.99% to 19.99%
Why We Picked It: The card earns extra cash back on a variety of business expenses.
Benefits: You’ll earn cash back on every business expense, with an extra incentive for office supplies, utility bills, gas and dining purchases. That covers many of the purchase types that help a small business run.
Drawbacks: The 5% and 2% cash back rates are capped at $25,000 in purchases each, and you’ll only get 1% back on purchases exceeding those limits.

3. Spark Cash for Business

Perks: 2% cash back on every purchase
Signup Bonus: $500 bonus cash back when you spend $4,500 in the first three months
Annual Fee: $59, waived in first year
APR: Variable 17.74%
Why We Picked It: With unlimited 2% cash back on all purchases, this card earns solid cash back no matter your business need.
Benefits: With 2% cash back on everything, every purchase puts money back in your wallet. Additional employee cards are free, and you’ll get a number of travel and purchase protection policies standard.
Drawbacks: You’ll start paying an annual fee in year two.

4. CitiBusiness AAdvantage Platinum Select

Perks: Double miles on every dollar spent with American Airlines, select telecommunications merchants, car rental agencies and gas stations, one mile per dollar spent on everything else. (Full Disclosure: Citibank advertises on Credit.com, but that results in no preferential editorial treatment.)
Signup Bonus: 60,000 miles when you spend $3,000 in the first three months
Annual Fee: $95, waived in first year
APR: 16.49%
Why We Picked It: Cardholders earn miles for flights and get a host of other travel perks to boot.
Benefits: Eligible purchases earn double miles and all other purchases earn one mile. Miles can be redeemed for American Airlines flights and upgrades. You’ll get preferred boarding, a free checked bag, 25% off in-flight purchases and many other American Airlines perks.
Drawbacks: The card is really only valuable for loyal American Airlines flyers.

How to Choose a Credit Card for Your Freelance Business

Getting a separate credit card for your business expenses is a smart move, but you’ll want to choose carefully.

The right credit card for you depends on your goals. If you’re frequently traveling to meet clients, a travel rewards business card might make the most sense. If you’re working out of a home office and need to save every penny, a card with no annual fee might be suitable. If you’re just launching your business, a card with a long 0% APR intro period could help you pay down your up-front expenses.

You don’t have to use a business card for your freelancing business. It’s a good idea to have a separate card, but small business credit cards can have higher fees and penalties, as they aren’t regulated by the federal Credit Card Accountability Responsibility and Disclosure Act of 2009, which regulates consumer cards. Small business credit cards are typically better for businesses that spend tens of thousands of dollars per year to operate. If you’re a sole proprietor with a low overhead, you may want to consider getting a personal credit card to use only for business expenses.

Remember, these cards generally require good to excellent credit to qualify. If you don’t know where your credit stands, you should check your credit before applying, which you can do for free on Credit.com.

Image: Izabela Habur

At publishing time, the Capital One Spark Cash for Business and CitiBusiness AAdvantage Platinum Select World Mastercard credit cards are offered through Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for this card. However, this relationship does not result in any preferential editorial treatment. This content is not provided by the card issuer(s). Any opinions expressed are those of Credit.com alone, and have not been reviewed, approved or otherwise endorsed by the issuer(s).

Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.

The post These 4 Small Business Credit Cards Are Perfect for Freelancers appeared first on Credit.com.

7 Tips for Funding Your Veteran-Owned Small Business

Veterans business owners face challenges when it comes to securing funding, but this advice could help.

Military veterans often face challenges when it comes to funding their business with a veteran small business loan, but finding capital that works for you is not impossible, especially when you have help. (Full Disclosure: I am the CEO and co-founder of StreetShares, a financing community for veteran business owners.)

If you find yourself in this situation, here are seven tips to help get you started on getting your business finances in order.

1. Assess Your Strengths & Weaknesses as a Borrower

Before you begin your search, make sure you know where your small business stands. How much funding do you need? How much can you afford to pay back each month? Are your margins higher than the interest rates?

It is also helpful to be realistic about your chances of accessing different funding options. Do you know your credit score? (If not, you can check it free on Credit.com.) How are the rest of your financials?

Finally, make sure your documents are in order. Have you filed your taxes? Do you have an updated balance sheet and income statement? Being prepared can save you time and grief later on. Follow these two easy steps to determine your financial needs.

2. Understand the Terrain Lenders Navigate

There’s a heap of regulations and internal policies that lenders must comply with in regards to small business funding that can make the lending experience hard and expensive for the borrower and the lender. It’s important to understand some of these factors that could affect your chances of getting funding.

For example, the lender must have access to capital on their end to be able to fund your loan. They also need the proper finances and marketing it takes to convince you to do business with them.

From the borrower’s perspective, here are a few things that should help you qualify for funding.

  • Earn the lender’s trust by displaying evidence of a good track record; you may have to find a way to convince lenders that you are trustworthy if your small business hasn’t yet established a good credit history (e.g., consistent, timely payback in the past).
  • Come to the table with assets to offer as collateral for the loan.
  • Have a compelling back-story in which you describe experiences and skills gained during your service that set you up for success.

Proper knowledge of both perspectives will help you have a better chance of smoothly navigating the early stages of funding.

3. Conduct Reconnaissance on the Options Available

While there may be a lending gap for veterans today compared with the veteran business loan options for veterans following World War II, technology is helping fill that gap with alternative online options. Make sure you research what’s available — from traditional banks to online lenders — and go with what makes sense for you given the stage of your business, your revenue and margins. Finally, make sure you understand what is offered: Some lenders charge 50% or more for loans, which few new businesses can afford.

4. Think Outside the Box

Funding can sometimes come from an unconventional source. Do you have a family member, friend, fellow veteran or schoolmate that made it big and would love to be part of your adventure? If you’re a young business, try a crowdfunding campaign or look for veteran small business grants, SBA loans or contests and awards for veteran entrepreneurs.

5. Connect with Veteran-Focused Mentoring Programs

Mentors provide insight and connections that can help accelerate the growth of your business, as well as teach you invaluable skills – such as how to present your business to potential investors. There are lots of great veteran-focused entrepreneurship mentoring programs out there, such as:

  • Bunker Labs is a program built by veterans to help veteran-owned tech startups launch and accelerate their businesses.
  • American Corporate Partners (ACP) is focused on helping military members as they transition into business. ACP will match veteran entrepreneurs with a mentor who shares the same personal and business interests for a 12-month mentoring program.
  • Entrepreneurship Bootcamp for Veterans with Disabilities is designed to help veterans launch and grow their businesses by leveraging skills veterans learned in the military and applying them to business ownership.
  • Some states have programs for veteran entrepreneurs. For example, Veterans Florida has developed an entrepreneurship program that offers a tuition-free, online and on-campus program. It’s designed to work around busy schedules, giving participants the option to access local resources such as business mentors at partner campuses.

6. Follow Through

You would never show up on a mission in the military without training for it and having a well-thought-through plan. You should take funding applications just as seriously — be responsive to questions from the lender you’re working with and prompt in delivering asked-for information.

Lenders work with a long list of businesses seeking funding. Small business owners should aim to make lenders happy to call them first thing in the morning.

7. Believe in Your Mission

Veterans bring skills, knowledge and grit to the table. Smart lenders know this makes you a high-value asset as a business owner, partner or borrower. As you grow your business, leverage your experiences in uniform and prove that you and your company are a worthwhile investment. You’ve got this.

This post was originally published on the StreetShares blog.

Image: Steve Debenport

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Confessions of a Side Hustler: How Full-Time Workers Keep Their Side Gigs a Secret

Many Americans are juggling extra gigs on top of their regular nine-to-five. According the Bureau of Labor Statistics, about 7.5 million Americans held more than one job in 2016. The figure rose by more than 300,0000 workers from the previous year, due in part to years of stagnant wages, a competitive labor market and the growth of the gig-economy. Of the multiple job holders, more than half, or 4.1 million, split their time between a full-time and part-time gig.

Having a side gig waiting tables after work is one thing. It’s when workers decide to turn their side hustle into a full-time business that things can get complicated.

For budding entrepreneurs, it can make sense to continue working full time until their new venture business is up and running. A full-time job provides a certain level of stability — like a consistent salary, health care, and other benefits.

Knowing when and if to disclose your new business with your employer is the hard part. For that reason, some entrepreneurs choose to keep their secret side hustle just that — a secret.

Some experts say an employer should know if you have any business interests outside of your daily work responsibilities. Others argue what you do on your free time is none of your employer’s business so long as you aren’t using company time or resources.

“Some employers really encourage their employees to work on side businesses because it stimulates creativity,” says Jill Jacinto, a millennial career expert at Manhattan-based career consultancy firm WORKS. On the other hand, she adds, some employers “might feel you are neglecting your current job or getting ready to make a move elsewhere.”

Beyond feeling ostracized by fellow workers or their employers, there are also potential legal conflicts or consequences to worry about, says Bruce Eckfeldt, founder of Eckfeldt & Associates, a business coaching and management training firm based in New York City and a master coach for career-assistance company, The Muse.

“Before you invest a bunch of time in your startup, make sure that your current employment agreement isn’t going to be a problem,” he says. If you happen to be launching a business in the same field as your current employer, there may be restrictions outlined in your contract that could come back to bite you.

In addition, you should do your very best to separate your new business from your day job as best you can. Separating your time and focus is a little more obvious — don’t work on your startup at your job — but you may also need to create some physical boundaries too.

“Build a solid wall between the work you do for you employer and for your startup. Separate email address, file repositories, maybe even computers and profiles if you’re really careful,” says Eckfeldt. He says this adds a physical level of separation between your day job and your startup. It also protects you against any claims you have used work time or resources on your startup. Doing so is common for many starting out, but generally considered unprofessional, and could breach the terms of your employment contract.

We interviewed several full-time workers who are secretly juggling side businesses along with their 9-to-5. We asked about their motivations, how they keep their other job under wraps, and the toll it has taken on their professional lives. To protect their identities (and their livelihoods), we have changed several of their names.

Here’s what it’s really like to live a double work life.

“I sell live crickets on the side.”

By day, Jason*, 32, is a project manager for a paint and flooring company in York, Pa.

After work, he puts on a much different hat as a pet food distributor. But he doesn’t sell Kibble ‘n Bits. His website, The Critter Depot, sells live crickets, which pet owners purchase in bulk to feed pets like snakes and large reptiles. Jason also operates a couponing blog under a pseudonym “Jason” and picks up Craigslist gigs in his free time.

“I like to get income from many sources, so I side-hustle,” Jason tells MagnifyMoney.

The husband and soon-to-be father of three says his ultimate goal is to retire as soon as possible. He plans to keep taking on extra work as long as he can manage it. He calls his full-time job “the bedrock” of his retirement plan.

“The full-time job, that’s the bedrock. That’s the foundation. If I had to sacrifice the other three [businesses], I would make sure I kept my full-time job,” says Jason. “Even if my side hustles got to the point where they were pulling in six figures alone, I wouldn’t get rid of my full-time job.”

On why he doesn’t tell his employer about his other income streams, Jason says he doesn’t want to blur the lines between his different businesses.

He’s careful to focus only on office work during office hours, and on his businesses when he’s at home. He doesn’t want to risk losing any trust at work.

“I don’t want [my boss] to think maybe I’m too zoned in on my side projects and not zoned in enough on my at-office projects,” he says.

For him, keeping his job in addition to the side income streams is all about keeping his family afloat.

“If I were a bachelor, I’d say you’ve got to put every ounce of your time into it. But the father in me says you’ve got to be level-headed because it’s not just you that’s relying on [your income], your whole family is relying on it.”

“I’m a travel agent when I’m not working on Wall Street.”

While Fred*, 45, was working at an investment firm in New York City, he developed an idea for a travel business. In 2009, he launched YLime, a concierge service that helps organize group trips for Americans looking to book travel to various countries for annual Carnival celebrations. Recently, he expanded his offerings to include travel packages to some African countries and wine tours on Long Island, N.Y.

His reasons for keeping his side business under wraps are simple: his workplace frowns upon employees having outside income.

“I’ve been on Wall Street for about 20 years now, and there is a certain culture in here. If they see you doing something else, it limits your growth,” he says. “They are not going to consider you for those positions because they assume you’ve already checked out to a certain extent.”

Although he says his company isn’t a conflict of interest for his position, he would be concerned if his higher-ups knew about YLime.

“Depending on your relationship with some people in the firm, some people may try to use that information against you,” Fred says.

“My bosses found out about my secret trucking business from a local news reporter.”

After a management shake-up at the Las Vegas gaming company where she had worked for a decade, 41-year-old project manager Marcella Williams thought her days were numbered.

Fearing she might lose her job, she decided to use her project management skills to open her own business on the side as a backup.

She launched CDL Focus, a truck rental and shipping company, in mid-2015. She rents two semi-trucks, primarily to people looking to obtain a commercial driver’s license. They can use her trucks to practice driving or to take the licensing test without going through an employer to gain access to a truck. Williams employs a driver for the other part of her business, which focuses on shipping.

She spent nearly $130,000 of her own savings and salary to bootstrap the business. In its early days, she admits it was hard to focus 100% on her day job while trying to get CDL Focus off the ground.

“The truth is, I probably spent a lot more time especially in the beginning working on the business than on my job,” says Williams. She gave her full-time job assignments priority and would shift her focus once her regular duties were completed, she says.

Williams recalls a time a potential truck client called her in the middle of a meeting with her supervisor.

“I’ve been in a meeting with my boss and my phone is ringing off the hook and he’s like, ‘do you need to get that?’” she says. In those cases, Williams says she tries to take the call after hours or send an prewritten reply so that she can respond later.

“You want to run your business and stay on top of it, but when you have a one- to two-hour conference call or meeting, you have to decide: are you going to screw over the person who is paying you?” she says.

After almost two years in operation, Williams caught the attention of a local reporter who wrote about her new venture. It wasn’t long before her employers found out.

The same day, her supervisor asked her into his office to be sure she wasn’t going to quit.

Now, she says, “[my co-workers] ask me ‘how is your trucking company going?’ in the middle of cubicle land.”

“I flip houses and sell bounce castles, and my employers have no idea.”

Austin, Texas-based Dennis* says he hasn’t quite mastered the ability to focus on his full-time job and ignore his side business until after work hours. The 31-year-old works as a logistics manager for a large technology company. About a year and a half ago, he and his wife took their savings and launched a real estate investing business.

Dennis and his wife buy, renovate, and resell homes. They learned the basics of house-flipping from a well-known investor in Austin. “Our first year we did 13 transactions,” says Dennis.

Excluding education and other startup costs, Dennis and his wife got into the market with $1,000 in direct mail advertising and about $15,000 spent fixing up their first property. They now earn between $20,000 and $50,000 on each home they flip. The couple says they brought in about $65,000 in 2016.

In 2016, Dennis also launched a pair of e-commerce stores, which sell bounce houses for children and clothing and accessories.

“I work on all three [projects] while I’m at my day job so it is hard, especially trying to keep everything a secret and not having co-workers see what I am truly working on,” Dennis says. “I know that I am not fulfilling my primary duties at my full-time job to the fullest extent of my abilities.”

To make things easier, the couple has hired a call center to take and record all calls from the real estate business, which are then addressed after Dennis comes home from work. He says he will do the same for the e-commerce stores as business grows.

His ultimate goal is to build up enough passive income to replace his corporate income. For now, he keeps his job for financial security, while he grows his e-commerce portfolio and his and his wife’s real estate business.

“The salary and stock incentives that we have right now are kind of hard to walk away from unless I had sufficient passive income that would replace what I have now,” he reasons. He has given himself two years to grow his businesses into self-sustaining operations. At that point, his stock in the company will be fully vested, and he can consider leaving for good.

“I’ve been blessed. I have a good education, and I’ve always had a good job, but ultimately my main goal in life is to be independent and not have to do the corporate grind,” he says.

The post Confessions of a Side Hustler: How Full-Time Workers Keep Their Side Gigs a Secret appeared first on MagnifyMoney.

What Airbnb’s Hotel Tax Means for Guests & Hosts

Here's what to expect, how to avoid problems and how to keep the tax man happy.

The summer travel season is nearly upon us and if you’re a fan of staying with Airbnb hosts instead of hotels, you probably already know some locations charge some or all of the same taxes that hotels charge.

If you don’t already know that, surprise! The number of locations charging taxes for that spare room or whole house is only growing. Beginning May 1, Texas will join 30 other states where taxes are charged at either the local or state level or a combination of both.

Clearly, there’s a financial benefit for the communities levying these taxes. The Dallas Morning News estimates Airbnb would’ve remitted an estimated $8 million in Texas state taxes in 2016. However, it’s not the states and cities that initiated the effort. For that, you can thank the hotel industry, which has been lobbying hard for the taxes.

Why?

“Airbnb has brought hotel pricing down in many places during holidays, conventions and other big events when room rates should be at their highest and the industry generates a significant portion of its profits,” Vijay Dandapani, chief executive of the Hotel Association of New York City, told The New York Times in a recent article.

While Airbnb has said on its website it is happy to collect its fair share of taxes, there’s clearly some negative feelings about how it’s all gone down.

“The hotel hypocrisy is almost unbelievable,” Nick Papas, a spokesman for Airbnb, said in an email. “The hotel cartel wanted Airbnb to collect taxes and when we implemented a way to do so, they changed their position and lobbied cities to leave millions of dollars on the table.”

The continuing fight has led to a variety of tax schemes across states and municipalities, creating a confusing landscape for hosts and guests.

What It Means for Airbnb Hosts & Guests

For Hosts

If you’re considering becoming a host, be aware that the taxes present some confusion for some people renting out their spaces.

The reasons are numerous and varied. To start, no one really likes paying taxes. But additional layers of frustration can come with the Airbnb taxes. They can be levied and remitted in different ways depending on the tax laws in particular states or municipalities and Airbnb’s agreement with those entities. Then there are the host’s options of how to charge guests once taxes are implemented. Many hosts get confused when it comes to collecting the tax, where to note it on the listing and the bookkeeping process.

Jeff Cook, who owns several properties in Pennsylvania, said sales and use taxes were already in place when he started hosting with Airbnb several years ago. “The biggest issue here is that many people weren’t paying it simply because they didn’t think they had to,” he said. “I paid it from the get-go, because I wanted my business to be legitimate.”

But it wasn’t easy. Cook’s price for guests bakes in the 6% state and 3% local tax, so he doesn’t note it on his site and doesn’t have to worry about asking for local taxes when guests arrive. His revenue is submitted to Airbnb, but then it gets a little complicated.

Airbnb removes their 9% fee and sends him the remainder, he said. “And then I have to figure out what the tax amounts are independently. If something could be done better … perhaps if they distinguished between the tax and the regular revenue that would be helpful. The lump sum is sent to me, I figure out what the correct tax amounts are, and then I submit a return and payment to the appropriate authorities.”

Laura Jesse, a host in San Antonio, said she’s ambivalent about the tax that begins in Texas next week. “I live near projects that were funded in part with the [state’s occupancy] tax,” she said. “I get a fair amount of convention business as I live near downtown, etc.”

As for raising her rates to offset the taxes, Jesse said she has no plans to do so at this time.

Of course, taxes aren’t the only costs Airbnb hosts face. Check out a few others. But the spare money can still help you do things like pay off debt (you can see how your debt affects your credit with a credit report snapshot on Credit.com). It’s also good to keep in mind that many of the expenses involved with renting out your space are tax-deductible. See which ones you can write off here.

For Guests

Taxes mean your stays are probably costing more – anywhere from 3% to 15% depending on locale and host. On top of that, the process can become confusing depending on how the host applies those taxes to your bill.

Airbnb addresses how that can be done on its Airbnb Citizen site, but there are no clear-cut guidelines available, so many hosts are left scratching their heads and conferring with other hosts on how they alert guests and even charge them.

Airbnb offers guidance thusly:

“If you determine that you need to collect tax, you can usually either add it within a Special Offer or ask your guests to pay it in person. In each case, it’s important that guests are informed of the exact tax amount prior to booking. If you choose to collect tax outside of your listing’s rates, please note that it should be collected only upon arrival and that we are unable to assist with collection.”

So, if your host suddenly asks you to hand over a little cash to cover the taxes, it’s probably not a scam. As Airbnb explains on its site, “this needs to be clearly stated on the listing prior to booking.” So, if the host can’t show you where that’s stated, you should be wary.

Hopefully, however, most hosts will bake in the taxes like Cook does, and you will see only a price increase at your favorite Airbnb homes. (Travel often? These travel rewards credit cards could be right for you.)

“I think separating taxes as a line item [on guest bills] would help clarify the issue for people,” Cook said. “I’m a big supporter of Airbnb. I think they are an awesome company, and as they evolve and grow, distinguishing tax through line items would be beneficial to everyone.”

Image: PeopleImages

The post What Airbnb’s Hotel Tax Means for Guests & Hosts appeared first on Credit.com.

10 States With the Best Business Credit Scores

It’s no secret that personal credit scores are a barometer of financial strength. The better your score, the easier (and cheaper) it is to get things like a mortgage or car loan. But, did you know small business owners have a separate business credit score for their company?

The two scores share commonalities, both impact a business owner’s ability to get financing, but they also have surprising differences.

While personal and business credit scores are both influenced by region, new data from Nav.com reveals other factors, like local policy climate, can impact business credit scores. Nav used data from 15,500 of its small business customers to calculate the average business credit score for each state to find the top 10.

Business Credit Score 2017 Rankings

So, what is a solid business score? Unlike personal credit scores, the business credit score range is much smaller. Most models range from 0 to 100. The higher the score, the better. Each of the 10 states with the best business credit scores have scores of 45 or above — putting them in the low- to medium-risk range. Business owners with scores in this range will find it easier to qualify for loans and trade credit with more favorable terms.

If you own a business in a northern state, your business credit score is more likely to outshine the rest of the country. Eight of the 10 states with highest average business credit scores are located where snow can regularly fly, with one “roll tide” exception.

10. Michigan: 45.0

Michigan snuck into the top 10 with an average business credit score that makes it easier for business owners to get an affordable loan. The state ranks higher for business credit scores than it does for personal credit, where its 675 is almost equal to the national average. Its business score nearly mirrors its 12th place ranking for policy climate according to the Small Business and Entrepreneurship Council (SBE Council).

9. Maine: 45.7

Maine business owners enjoy both stronger than average business and personal credit scores. This is a winning formula for success, as both scores can be used by business lenders to get business financing. Its strong business credit score flies in the face of the SBE Council’s low, number 44 policy climate ranking, which is a surprising, recurring theme in our list .

8. Alaska: 45.7

The “great white north” trend continues, as Alaskan business owners maintain higher business credit scores than most of the country. Unlike others on the list, Alaska’s average personal credit score of 668 falls below the national average and it’s settled in the middle of the pack when it comes to policy climate.

7. Wisconsin: 46.1

It should be easier for Wisconsin entrepreneurs to find the cheese they need to run and grow their business thanks to a solid business credit score. Their residents also rank fifth in personal credit scores, thanks in part to having the lowest credit card delinquency rate according to TransUnion data. The state ranks below average for policy climate, but it doesn’t seem to be holding Wisconsin back.

6. Utah: 46.3

Talk about a state with business tailwinds. Utah’s business credit score is among the nation’s best, its personal credit score of 679 is above average, and its policy climate is comes in at No. 11. It’s no wonder why the beehive state consistently ranks tops in business growth.

5. Oregon: 47.3

Like others on the list, Oregon shows that strong personal credit health can translate to good business credit scores. The state’s top five ranking means its business owners with strong scores can negotiate better payment terms for goods and services from suppliers, like net-60 or net-90 day terms. Like Maine, Oregon ranks very low on the SBE Council’s policy index rating, but its business owners’ credit scores are thriving.

4. Alabama: 47.6

Alabama is the only southern state that cracked the top 10 list—although it has the 5th-worst personal credit score average in the country. Some of this can be explained by Alabama’s strong No. 9 rank for policy measures and costs that impact small business. Strong business credit scores will help most Alabaman companies, but for younger companies (under 2 years in business), business lenders will heavily weigh personal credit scores.

3. Nevada: 48.8

Nevada hit the business credit score jackpot, beating out all but two other states in the nation. It also ranks number one in the SBE Council’s policy index, which should mean that business owners there are less burdened by regulations and taxes. Despite those solid rankings, and reflecting the boom or bust persona of Las Vegas, it also has the third-worst personal credit in the country. For  business owners with strong enough business credit scores and financials, they may be able to overcome personal credit flaws when applying for lending.

2. Iowa: 49.2

Iowa may be first in the nation to pick the Presidential candidates, but it narrowly missed out on pole position for business credit. Business owners here also have the added benefit of strong personal credit, where it ranks in the top 10. Having strong credit scores in both categories can help the state’s entrepreneurs qualify for the money they need to expand — which should come in handy as Iowa’s economy is predicted to expand through 2017.

1. Vermont: 51.7

Like maple syrup on pancakes, Vermont’s business credit is sweet. Its average score takes the top spot in the country and it is the only state that cracks the 50 mark, signifying a lower credit risk. Again, we see that the SBE Council’s policy index ranking doesn’t necessarily correlate with business credit health, as Vermont ranks near the bottom on their list. The state’s stellar business credit score, combined with personal credit that ranks No. 2 in the country, makes for business success. Entrepreneurs in the Green Mountain State with strong business credit are most likely to secure affordable funding, with the best terms.

Considering U.S. small businesses produce 46% of GDP, their success can ripple across the entire economy. That success typically depends on access to affordable capital. One way you can set yourself up to qualify for the best funding is by maintaining a strong business credit profile. Low scores are the number one reason business financing applications get denied. You can get your free business credit scores, along with your personal credit scores, by visiting Nav.com.

A list of business credit score rankings for every state, maps, trends and methodology for Nav’s 2017 State Business Credit Snapshot are available here. Personal credit data was sourced from Experian’s 2016 State of Credit report.

Editor’s note: You can get a snapshot of your personal credit by taking a look at your credit report summary on Credit.com. This provides you with your two free credit scores, updated every 14 days, plus a review of the five key areas that affect your scores.

Image: PIKSEL

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