Business Loans Blog and Resources

Pleasant Grove, UT - January 7, 2019 - Lendio has been named the 2019 Consumer’s Choice Award recipient in the business loans industry by BestCompany.com, an independent consumer review site. Lendio was selected to receive this recognition from among 116 other business loan providers based on a comprehensive market index score and the feedback of verified customers through reviews. "We wish to recognize Lendio with the Consumer’s Choice Award for 2019. They've earned it,” said BestCompany.com CEO Landon Taylor. “Our hope is that this recognition will highlight a company that is doing business the right way by taking care of its customers and always looking for ways in which it can improve." Lendio distinguished itself from its competitors by providing an impressive network of lenders, a simple application process, and quick funding. That, combined with an extremely high customer review score of 4.6 out of 5 based on more than 180 real customer reviews, propelled Lendio to an impressive overall score of 9.2 out of 10, the highest in the industry. "Just as BestCompany.com takes the guesswork out of finding a reputable business, Lendio takes the guesswork out of finding reputable business financing," said Brock Blake, CEO and founder of Lendio. "As a leader in the small business lending industry, Lendio places utmost value on customer trust and loyalty. It is an honor to be awarded BestCompany.com's seal of excellence.” To read consumer reviews for the top-rated business loan provider, view Lendio’s profile on bestcompany.com. For additional information and comparisons, access the full list of business loan companies considered for this award, as well as their respective scores and customer reviews. About Lendio Lendio is America’s largest small business loan marketplace and connects borrowers with a wide variety of financing, including short term loans, business term loans, SBA loans, business acquisition loans, and more. Since its inception in 2006, the company has facilitated more than 40,000 small business loans and over $1 billion in funding. Lendio’s network is comprised of more than 75 industry-leading lenders, including PayPal, Bank of America, American Express, Chase, Kabbage, Fundation, Headway Capital, Funding Circle, Lending Club, and more. For every loan facilitated on its marketplace platform, Lendio donates a percentage of funds to low-income entrepreneurs around the world through Kiva. Visit the company’s website to learn more about Lendio. About BestCompany.com BestCompany.com ranks and reviews companies across hundreds of different industries. Unlike many other review sites, companies listed on BestCompany.com cannot buy their position, nor is a company’s ranking manipulated or inflated by BestCompany.com for financial gain. Instead, a company’s ranking is based on BestCompany.com’s proprietary Best Rank algorithm, which is powered by verified customer reviews and an objective set of ranking criteria. For more information on how BestCompany.com scores and ranks companies, please visit the How We Rank page.

Guest Post by Scott Lindsay   Being an entrepreneur allows great freedom and ensures you are earning a living doing something you love. However, approximately 90 percent of startup businesses will fail. This failure is almost always due to the people who started the business, their habits, behaviors, and other traits.   If you want your business to fail, these 10 traits will have your business venture underwater in no time: 1. Make plenty of excuses Personal responsibility is never fun, so make plenty of excuses regarding why things are not getting done or working out as you had planned. Always blame others for your misfortunes and the problems that your business experiences.   Blame the economy, use the excuse that you ran out of time, and target your employees or business partner. This will make it much easier to swallow the failure pill once your business goes under. 2. Be lazy whenever possible Running a business is a lot of work, but if you are the boss, you shouldn't need to actually do any of it. Push off all of the work on your employees and other people associated with your business.   Sleep in late, spend your nights spending the money your business earns, and do not bother learning more about your industry. The lazier you can be, the faster your business will crumble. 3. You know everything You started a business, so this means that you know everything about entrepreneurship and your industry. There is no need to learn more. Let your ego be your guide in this venture.   If you find yourself stuck, let your pride stop you from asking for help. Ensure that your confidence remains high even when your profits hit an all-time low. 4. Procrastination is king Work is hard. It is more fun to sleep in and enjoy your hobbies. Procrastination allows you to focus on the fun while putting the actual work on the back burner.   Running a business means needing to complete multiple tasks every day. Some of these are mundane and many are completely overwhelming. Breaking these down into smaller tasks makes them easier to complete, but it is even easier to just procrastinate and ignore the work. 5. Stop listening and just talk You are the boss, so what you have to say is more important than anyone else in the room. You are going to run your business according to your terms, and the opinions of others are just noise.   Effective leaders listen more than they talk. But, as a budding entrepreneur, you clearly have the experience and knowledge necessary to succeed, so just keep talking your way to business failure. 6. Risks are just not necessary The safe zone is comfortable, like a soft blanket that envelopes you in warmth and makes you feel good. Risks will just push you into an uncomfortable place and force the growth you feel you do not need.   In truth, risks are a necessary obstacle that you must overcome to build your business. However, risks are hard. They force you into an uncomfortable place, so you might as well just skip them so that you can experience that lack of success that comfort brings. 7. Envy the accomplishments of others Before you dipped your toe into the entrepreneurship pond, you looked at others who found success. Keep focusing on them instead of yourself. Let envy guide your thoughts and decisions.   When you run a business, you need to put most of your focus on it. This is especially true in the early stages. However, if success is not your ultimate goal, keep reading Forbes and envying those who clawed their way to the top instead. 8. Continue hoping that others fail No matter your industry, numerous businesses are opening and operating. You want to be number one and the easiest way for this to happen is for the other entrepreneurs around you to fail miserably.   Focus on their failures. Hope that they do not succeed. This is much easier than putting in actual work to help your business venture succeed. 9. Money fixes everything If your business has a problem, just throw some money at it and it will go away. Don’t worry about your budget or finding more creative ways to solve issues. Money will be there to help you through the toughest times.   Of course,  money is not an infinite resource and will eventually run out. Successful entrepreneurs find creative solutions, but just keep throwing money after your problems until you quickly bring your business down. 10. Keep fearing change Change is uncomfortable. It forces you to abandon everything you once thought to be true and right. Since change is hard, there is no need to try it to ensure success in your business venture. Instead, resist change and keep failing in the same ways while hoping for different results.   Make note of these traits and behaviors. If you have them, you either need to change or be prepared to put up a “closed” sign permanently on your company’s front door.     Scott Lindsay is a lifelong entrepreneur with over 30 years of small business experience and currently runs the home business website called VETTED OPPS. He achieved financial freedom in 2008 and now spends his time helping others find business success.  

Part two in our two-part series As seen in part one of this series, business owners often get a mix of both good and bad advice, especially when they are just starting a new business venture. No two businesses are the same, so receiving business advice from another business owner may not exactly apply to every business situation. It can be a challenge to determine what business advice you should follow. A few more business owners shared the best and worst business advice they have received along with their best advice. Here's what they shared: Deborah Sweeney, Owner of MyCorporation.com Best Business Advice: "The best advice I received was from a non-business owner (my mom) and that was to be patient and calm. I have learned in business that there is no need for everything to happen right away. Good things come to those who wait (and work hard). My mom had this great advice as I purchased my company out of Intuit back in 2009. It has been very valuable insight because I have remained patient and worked diligently on the growth and success of the business. Year after year, we continue to grow and thrive and to develop new ideas that help our business grow and our customers thrive." Worst Business Advice: "The worst advice I have received is to take on investors just for the sake of quick growth. Sometimes investors are self-interested. While a business can grow faster with a large investment, it may not always be the right strategy. Every business and every business situation is different. There is no one-size-fits-all approach to business. If the business is growing organically and, as the business owner you are thriving, there is nothing wrong with that. Sometimes it is best to take it steadily and not give up ownership interest in your business." Her Advice: "I would give my younger self the advice of being calm under pressure. Think things through. Do not react too fast. There is no right answer, but reasoned answers are always better." Blair Koch, CEO of The Alternative Board Best Business Advice: "The best career advice I ever received was from my dad: 'Don’t get greedy... You can’t lose by taking a profit.' He shared this with me back in my 20’s after I helped take a company public. At the time, it was a bit of a conundrum for me to determine when to sell shares and how to know when the stock would be at its peak. The 'don’t get greedy' phrase helped me realize that my goal shouldn't be making the MOST profit, but rather, making the most profit while maintaining my peace of mind. I apply this business principle to this day." Worst Business Advice: "'Working more means working better.' Putting in an obscene number of hours with no break (I worked with someone who ended up in the hospital for working too many hours) will decrease efficiency and block you creatively. Don't neglect time with family and friends in favor of your job." Her Advice: "The most important thing when starting a business is to set objectives that are manageable and achievable. Typically, people set really big goals and then give up soon after, because they don’t know how to tackle achieving them. Break your goals down into 30, 60, or 90-day objectives. This way, they are bite size and not so overwhelming. When you complete the first 30, 60, or 90-day goals, then set the next 30, 60, or 90-day goals. Make sure to celebrate your accomplishments along the way." Matthew Ross, COO and Co-Owner of RIZKNOWS and The Slumber Yard Best Business Advice: "The best piece of advice I've ever received was from one of the investors in our company. He's a well-respected angel investor who has built and sold several companies. The overall theme of what he stressed was to focus on a specific niche. Sometimes business owners get too caught up in capturing the entire market in which they operate and, as a result, their brand or product doesn't stand out from the crowd. Instead, we've had success focusing on specific niches within industries. For example, one of our websites focuses strictly on bed-in-a-box mattresses that are sold online instead of going after the entire bedding industry as a whole." Worst Business Advice: "I won't say who said this to me but the basic gist of our conversation was that I had to move extremely quickly in order to gain market share. Needless to say, I took his advice and I ended up over-hiring which hurt our bottom line and actually hindered our efficiency. I learned that sometimes it's best to move at a comfortable pace. If you're constantly trying to rush, you may find yourself getting out over your skis." His Advice: "Don't be afraid to try new strategies and campaigns, but do it in a way that won't overwhelm your employees or hinder profitability. If it takes a little more time than you want, that's okay." Jason Patel, Founder of Transizion Best Business Advice: "The best business advice I've ever received came from my mentor, Don. He said that it's important to charge what the services are worth. It's not fair to the business to offer time and money when the exchange is unfair to you or your workers. The business is a living, breathing creation, and you need to do right by it. This attitude will go a long way because you can build better solutions for your customers." Worst Business Advice: "Someone I know who's more of an entrepreneur du jour said that I should live my life and start taking money out of the business right away. If I had listened to him, I would have taken the blood and oxygen out of the business before we had grown. We wouldn't be where we are today if I had followed that advice." His Advice: "If you have a new product or pricing structure, test it by talking to customers, giving them the product, and implementing good feedback. You need to iterate, adapt, and change. Just as technology and the means through which customers consume good and services change, so should your products. Your product is never perfect, so get started and test your product in the market."   Lindsey Dinneen, Owner of VidaDance Studio Best Business Advice: "The best advice I've ever received is to never look at the competition. Focus on innovating and coming up with great new ideas to market your business and sell your product or service in ways that consistently delight and surprise your ideal customers." Worst Business Advice: "The worst advice I've ever received is to be everything to everyone. That's a terrible way to go about growing a business. You simply can't be everything to everyone, and trying to be will cause serious headaches and unnecessary stress. Instead, zone in on your target demographic and cater your services/products specifically to them. The smaller and more defined the demographic, the better, and the easier it will be to sell to them." Her Advice: "The biggest piece of advice I can offer is to know that you will never be ready. You will never be able to have an airtight plan that eliminates the risk and uncertainty that comes with starting your own business. The key is always to take action. Be okay with never being ready, and take daily action steps that move you closer towards achieving your personal and professional goals. One thing I remind myself of often is that being nervous means that you care." James Heidebrecht, Owner of Policy Architects Best Business Advice: "'Don’t be a generalist; focus on what your strengths are and learn where you are weak.' Of course, when you begin you’ll be doing everything yourself and you’ll need a general knowledge of systems so you know what others are doing. But as soon as possible, delegate what you’re not good at to someone or something else. I hired a virtual assistant within the first year who took care of admin and client follow up so I could focus on sales which is my strength." Worst Business Advice: "'Go all in. Sometimes a side hustle is the best way to get things started, especially if you're transitioning from another career.' I know some people feel you should 'burn your bridges' but there's nothing wrong with beta testing different ideas before jumping both feet in. Don’t quit your regular job until you absolutely have to — I continued to work in broadcasting while building my business. And it is possible to do many things on a shoestring budget." His Advice: "If I were to offer only one piece of advice to someone starting a new business it would be to niche down. Take some time and drill down on your idea, typically you can find a sweet spot that the maddened crowd has missed. This will distinguish you from your competitors. There are tons of startups out there and the key to success is to find a need and fill it. I think a lot of people approach this in a very generalized way. The thing is if you take this approach you're just one of many and you're offering nothing original to a market that may be oversaturated. Once you are up and running you can always expand your business but this will give you a head start."     Go all In. Sometimes a side hussle is the best way to get things started, especillay if you're transitioning from another career. I know some people feel you should "burn your bridges" but there's nothing wrong with beta testing different ideas before jumping both feet in. Don’t quit your regular job until you absolutely have to - I continued to work in broadcasting while building my business. AND It is possible to do many things on a shoestring budget.

Part one of this series People starting a new business venture are bound to get advice from others, whether they want it or not. Although some advice can be helpful, business owners may also receive advice that could ruin their business plans. How do you know the difference between good and bad business advice? We turned to real business owners and asked them about the best and worst business advice they've ever received as well as the advice they would give to future business owners. Here's what they said: Fiona Adler, Founder of Actioned.com Best Business Advice: "The best advice I've received is to imagine the business 12 months from now. This simple tip really helps me make decisions about hiring people, investing in marketing, automating processes, and generally stepping the business up to the next level. If you just think about the business today, you can probably get by without doing these things, but if you think about how you want the business to be in a year's time, it often becomes clear where you need to make changes." Worst Business Advice: "The worst advice I've received is that 'the customer is always right.' Not only are there some really crazy customers out there, but even well-intentioned customers can also sidetrack you if they're not the right type of customer for your business. Of course, you always want to provide great customer service, but you don't necessarily need to change your business to suit every customer whim. Having a clear vision for who your ideal customer is and how your business is positioned in the market is essential." Her Advice: "The advice I give business owners starting out is to think about how they actually want to be spending their time. Of course, there are always things we dislike, but they need to build their business so that they are spending the majority of their time doing things they actually like doing. For instance, someone who likes jewelry might open an online store but then find that the majority of their time is spent packaging and shipping items. You need to think about how you can use your interests and skills in the best way possible." Jessica Tappana, Owner of Aspire Counseling Best Business Advice: "The best business advice I ever received was to read Profit First. Reading and implementing Profit First has given me a lot of peace of mind in how we are handling our business finances, confidence that I can afford my own salary, a way to make financial decisions overall, and reduced the amount of time I spend worrying about the finances of my business." Worst Business Advice: "It was probably all the people who discouraged me from taking the risk of opening my own business. I wish I could have tuned out the naysayers more easily because it would have allowed me more mental space to focus on getting things done. I've found that pessimism isn't very helpful in business. Being realistic, seeing problems for what they are, and having an attitude that problems are meant to be solved is much more helpful than worrying about people who have said, 'that will never work.'" Her Advice: "Advice I'd give future business owners would be to be confident enough to know your own areas of weakness. By having a clear picture of where you need to grow, you can target those areas for growth. When I finally realized, 'Hey, I can do this business thing,' I was able to stop focusing on every little insecurity and instead acknowledge my biggest weaknesses: technology and finances. I was then able to seek out opportunities to learn more about those weaknesses and improve in those areas. Being able to feel confident overall gave me the freedom to tackle my true weaknesses, and now my business is able to grow, thrive, and help more people than I had initially dared to dream." Lauren Hawkins, Owner of Flame Point Global Solutions, LLC Best Business Advice: "Capitalize on my vulnerabilities to show my female side, my human side, my empathy, and demonstrate that I have feelings just like the people I lead. People want to see me as a mentor, a confidante, and a trustworthy leader. Business schools forget to tell you 'be human!' I am a Human Resources Leader and one of the best compliments I ever have received is 'you really put the HUMAN back in Human Resources!'" Worst Business Advice: "'Get a thicker skin!' This flies in the face of the above. When people have told me this, they have told me to act like a machine, stuff down your feelings, and put on your big boy pants. Expressing feelings opens up communication and builds relationships." Her Advice: "If you don’t ask, the answer will always be 'NO!'. When people say 'NO' to that meeting, presentation or whatever else you ask for, they are saying 'not now!'. Keep that in mind. Take tiny steps to get out of your comfort zone. If you struggle with confidence in starting your new business, remember you are 100 steps ahead of those who never even tried." Marcy Phelps, Owner of Marcy Phelps & Associates Inc. Best Business Advice: "Listen to and focus on the customer. Talk to people in the industry to understand their needs and wants, find ways to fill those needs, and make it easy for clients to work with you. Always keep updating what you know about your customers and others like them."   Worst Business Advice: "As a private investigator, I would never be taken seriously as a woman and should bring in a male partner. Never did that and never had trouble being taken seriously."   Her Advice: "You need to understand what your clients value. Don’t decide what you want to offer without determining if it’s something they value."   Ladan Davia, CEO of Beeya Best Business Advice: "The best advice I’ve ever received was to say 'yes to everything.' As an entrepreneur, especially one starting at a young age, you have to be everywhere and take advantage of every opportunity given to you. For every 100 meetings, maybe one will go well, but you still have to go to every single one. The one you don’t go to could be the one that changes the course of your business."   Worst Business Advice: "The worst advice I’ve ever received was when I was going to a networking event and someone said 'you’re not here to make friends, you’re here for business.' WRONG. Part of networking and advancing in life is off of relationships. I have gotten more partnerships and accounts by starting off as friends than when I cold call people asking them for favors. When I’m at an event, I always have the mindset of 'I’m going to try and make one new friend today.' Who knows, that friend could be your next business partner (true story)."   Her Advice: "The advice I would give my younger self or a future small business owner is that it gets worse before it gets better. I truly believe the biggest component of being a great entrepreneur is if you can withstand the roller coaster ride that is starting a business. There will be high highs and low lows but as long as you don’t get off, you will make it."   Geoff Gross, Founder and CEO of Medical Guardian Best Business Advice: "Surround yourself with great people who fit in with you and your business." Worst Business Advice: "The worst advice I've ever received was to say 'No' to as much as you can. Over the years, I've realized the more I say 'Yes,' the more opportunities and success it leads to!"   His Advice: "Constantly focus on getting better at your job. When you start a business, you are a one-person show. As your business continues to grow, it's important to also evolve within your role or the company can't grow to your standards. Business success takes a vision, desire, guidance, and practice."   Alex Tran, Owner of Schimiggy.com Best Business Advice: "Try it all and use what works best for you! Through trial and error, I've found that SEO optimization works best for me. I've created my brand by seeking out people who are looking for what I have to offer."   Worst Business Advice: "Focus on Instagram. It will bring you all the business. I try to avoid sticking to one platform because it severely limits my reach. Also, if it's a platform I do not believe in (IG can be flighty and ROI is difficult), I will not be happy or passionate with using it."   Her Advice: "Not only will you learn what works for you, you'll learn to become your own consultant and boss. It's amazing what the human mind is capable of doing when it has a goal in mind."   Christopher Earley, Owner of the Law Office of Christopher Earley Best Business Advice: "Always avoid problem clients, no matter how much you are giving up. Problem clients are just never worth it."   Worst Business Advice: "If things don't work out, you can always try something else."   His Advice: "I would advise my younger self/future business owners to lunch more often with possible referral sources."   The Bottom Line Business owners, especially new business owners, typically have a full plate. They have to figure out their finances, how they will go about getting the right business loan, how to understand their target market, where their physical business location will be, etc. The list seems endless at times. Clearly, getting advice from business owners can be hit or miss, but it's worth a try. Just keep in mind that some advice may be misleading as you seek advice for your new business venture.

If you’re looking for a new venture in your life, consider starting your own business. While being your own boss is the dream, here are a number of other reasons to start your own company:Click the link to find the best business lending company for you! 1.  Create new jobs Starting a new business creates more jobs in your community. 2.  Choose your environment style Being the boss means you can start “Pizza Fridays” and have a relaxed dress code. If that’s not your style, you can have a more formal office environment with a work uniform. It’s entirely up to you. 3.  Reduce your work commute Tired of getting stuck in traffic on your way home? Choose a location closer to home to cut down on your daily commute, so you can spend more time doing the things you want to do. 4.  Change the industry Over the years you have probably thought of numerous ideas to improve the industry. Starting your own business is a great platform to bring those ideas to life. Create a solution to a common problem or design something that no one has ever seen before. This involves some risk as the industry might not be ready for change, so come prepared to defend your proposal. 5.  Socialize with new people Networking is part of the life of any start-up business owner. Whether you attend networking conferences near you or decide to chat up the owner of another local business, you’ll be doing a lot of talking.  Networking will help you build your client base and get you referrals. 6.  Help others Ask yourself, is there a service you could provide to help those in your community? Maybe you know a more productive way to clear snow off the road. Or perhaps you know more about buying a house than anyone you know. Using your knowledge to help others is an excellent reason to start a business. The services and products you provide will be beneficial to those around you. And at the end of the day, you’ll be glad you could help someone in need. 7.  Build your dream team One of the best perks of owning your own business is hiring who works for you. You might not want your uncle running your accounting department, but you do know someone else perfect for the job. Choose people you’ll enjoy working with and who compliment your personality. Knowing your strengths and weaknesses will help you hire people who will continue to challenge and innovate your business. 8.  Expand your skill set Running a business requires more than just providing a service or selling a product. You’ll be required to develop new skills and see where your strengths lie. Maybe you want to try attracting new customers by designing an ad for a local magazine. Or perhaps you want to be involved in the hiring process. Whatever your reason, adding some new skills to your repertoire will help you to understand all aspects of your business. 9.  Be an expert It always feels great when someone comes to you for advice. When you first start a company, you might not feel like an expert, but after years of experience, you will know all the ins and outs. If there is a question, you most likely will know the answer or know who to ask for the answer. Learning through first-hand experience will make you a business guru. 10.  Do what makes you happy Working toward something you care about will make work feel less like work. Not only will you love what you do but you’ll work harder to achieve your goals. You will inspire others, as they watch you struggle, take risks, triumph, and finally achieve your dream. Whether or not your business takes off and changes the world, you’ll feel proud that you went for something you are passionate about.

If you've heard of PayPal Working Capital, you're probably wondering if it might be a good financing option for your small business. The program, which began just two years ago, offers PayPal merchants (as in, merchants who use PayPal for their transactions) the ability to borrow up to 8% of their annual revenue and then automatically deducts a set percentage of incoming receipts until the loan is paid off. In its short time, Working Capital has already made $1 billion in loans to small businesses, as the company reported last week. And this isn't a huge surprise. PayPal Working Capital seems like a win-win for the company and merchants alike. The risk is low for PayPal-since they can see all of the historical cash flows of their merchants, they know exactly how healthy each one is. For merchants, the program is convenient and less expensive than many other financing options out there. The application process, for example, takes just minutes with no credit checks and no extra fees. Also, because payments are automatic and based on a percentage of revenue, merchants never have to worry about forgetting a payment or a payment causing them to be over-drafted. So is PayPal Working Capital the perfect lending option for a small business? As with so many things in lending, it depends. There are certain aspects of the program that make it not ideal for every small business. It pays to know about Working Capital's limitations before you go too far down the road of considering it for your small business. If any of these five drawbacks apply to you, you might want to pass on PayPal Working Capital: 1. You must have done plenty of business on PayPal Yes, the PayPal Working Capital application is fast. At an estimated five minutes and without the hassle and worry of credit checks, it's bound to get small business owners' attention. But there is a reason for that fast application process. When extending financing to a small business, PayPal doesn't go off of your credit score or many of the other factors that banks and other creditors use, as stated earlier. Instead, they go off of the money that flows through your PayPal account. For this information to be reliable, however, they need a significant amount of it. For this reason, if you want to qualify for the program, you must meet these requirements: "[Y]our business must have a PayPal business or premier account for at least 3 months and process between $20,000 and $10 million within those 3 months or within any time period less than or equal to 12 months." With requirements like these, your small business might not qualify. For instance, if you don't conduct business on PayPal, the program isn't for you. If you do business on PayPal, but it's only in small volumes, it's also not for you. But those aren't the only things that could disqualify you... 2. You have to pass PayPal's "mystery" requirements While the requirements above are clearly stated, they also seem to have some requirements that aren't so publicly stated. The complaint below, left on eBay community forum by an unhappy merchant, tells of this problem: "We do over $500,000 a year in sales and we were turned down after getting a msg from paypal telling us to apply. We spoke to paypal and of course they came up with various reasons such as maybe our business is seasonal or not enough cash flow... Both are wrong... After pushing submit we were immediately turned down within three seconds, so obviously none of our info was even evaluated... Getting the invite letter means nothing." The message of the story is, even if you get an email inviting you to participate in the PayPal Working Capital program, don't assume that you will qualify. While there are mostly positive reviews about the program, a significant number of complaints about the program targeted this very issue. When merchants are turned down, even when they meet the revenue and time on PayPal requirements, they often aren't privy to the reasons why. 3. The loan amounts might be too small for your needs Sometimes your business just needs a small infusion of cash to expand its capabilities or invest in better resources. For these situations, PayPal's program may be exactly what you need, since it allows merchants to borrow up to 8% of their revenue that goes through PayPal. But what about when you need a much larger small business loan? In this case, most small business owners are going to find that PayPal's loans fall short. Said one anonymous reviewer on SuperMoney.com: "Many of my small business owners friends have loved getting smaller loans through them, but I needed something larger at the time. They only give out loans up to a certain amount, and that number is smaller than ordinary lenders. From what I've heard, they're fast and easy to use, but they just didn't work out for my particular needs." 4. The APR is higher than some small business loans from your typical bank PayPal lets you choose what percentage of your revenue will be automatically deducted to pay off your loan, anywhere from 10% to 30%. As a result, the APR on a Working Capital loan usually ends up being about 15% to 30%. This is better than what you'll find on comparable lenders like Kabbage or On Deck Capital, which tend to offer APR around 40% to 80%. However, if you qualify, you're likely to find lower APR on a small business loan from your local bank or credit union. For this reason, it's highly recommended that you seek financing with a traditional lender before turning to online lenders, including PayPal Working Capital. 5. Once you get a PayPal Working Capital loan, you're stuck with it As you've probably gathered by now, PayPal's Working Capital program was designed to work within the confines of their service. If a merchant were to take out a loan through the program, however, and then stop using PayPal, the company would have no way to collect loan payments from the merchant. That's why, as part of the terms and conditions of the program, merchants agree to continue using PayPal until their loan is paid off in full. According to the company, if a merchant leaves PayPal before their loan is paid off, they must pay the full remaining balance immediately. If a merchant defaults on the loan, PayPal can seize funds from other bank or credit accounts connected to the merchant's PayPal account. In short, don't take out a loan with PayPal unless you plan to stick with them for your business' payment processing needs. Is PayPal Working Capital the right lender for you? If you process a high volume of your revenue through PayPal, you can live with the higher APR, you don't need a very large loan, and you're planning on using PayPal for a while, then the answer is probably yes. Barring any problems from those "mystery" requirements mentioned above. Seriously, at a time when small business loan requirements from traditional banks are getting tighter, if you fit the bill, PayPal Working Capital might be just what you need to keep your small business growing. To see how real customers rated PayPal Working Capital, visit our PayPal reviews page today!

When dealing with large banks, getting the funds your business needs can be a long and arduous process. Over the last several years, many alternative online lending companies have entered the scene to make the process of getting a loan easier and faster. Two of the largest alternative lenders, Funding Circle and Lending Club, offer similar low interest rates and high loan amounts. When comparing companies, the question becomes: which one is right for you and your business? We put the companies side by side so you can see for yourself. Funding Circle Funding circle offers an alternative to to traditional banks for business loans. Funding Circle features peer to peer loans up to $500,000 with repayment terms from 1 to 5 years. These of loans are good for financially stable companies or franchises that want to expand. To date, Funding Circle has provided over $2 billion in loans to help small businesses. How To Qualify To qualify with Funding Circle, borrowers must have a minimum credit score of 620, the business must have been in operation for at least two years, and the revenue must be at least $150,000 per year. Additionally, a borrower must not have filed for bankruptcy within the last 7 years and must provide a personal guarantee. Application Process The online application only takes about 10 minutes. On the same day that you submit the application, you will hear back from a loan specialist who will ask you to submit documents for verification of the application. Once you are approved (usually within 72 hours), you will receive the funding in 10 to 14 days. What It Costs Funding Circle is transparent about its interest rate information. According to the company's website, interest rates range from 5.49% to 18.29%. If a business decided to take out a $100,000 loan over a 12 month term, the borrower would pay just over $0.18 on the dollar. Funding Circle also charges a one-time origination fee from 0.99% to 4.99%. However, there are no prepayment penalties which can help borrowers save on interest should they choose to repay the loan early. Summary Must have strong credit and revenue Loans up to $500,000 Quick and easy online application Check out our Full Review of Funding Circle. Lending Club Lending Club is a peer to peer lending company that offers business loans from $15,000 to $300,000 and lines of credit from $5,000 to $300,000. Loans from Lending Club are typically for well established businesses with good finances who need quick capital or want to expand. Since its launch in 2007, Lending Club has issued over $16 million in funds. How To Qualify In order to qualify for a loan from Lending Club, the business must have been in operation for at least two years and have at least $75,000 in annual sales. Additionally, the borrower must own at least 20% of the company, have no recent bankruptcies or liens, and have a personal credit score of at least 600. Application Process The online application can be submitted in 5 to 10 minutes for pre-qualification. After submission, you will receive a quote for a loan. Once you are approved for the loan, you will be required to submit documentation for verification. The funds may be delivered to you in as little as two days or as many as 14. What It Costs Lending Club charges interest rates ranging from 5.9% to 21.6%. For a $100,000 loan over a 12-month term, the APR amounts to $0.32 on the dollar. These rates are slightly below the industry average. Like Funding Circle, Lending Club charges a one-time origination fee ranging anywhere from 0.99% to 5.99%. This origination fee is deducted from the loan principal. Summary Must have fair to strong personal credit Loans up to $300,000 Fast online application and approval time Check out our Full Review of Lending Club. The Bottom Line These two alternative lending companies are quite similar on many points. Both lenders offer terms of 1 to 5 years, and they both charge similar origination fees. However, Funding Circle has the advantage with lower interest rates and a higher maximum loan amount. At the end of the day, your approval, rates, and terms will largely depend on the decision of the underwriting team of either company. It may be a good decision to get quotes from several different companies. Check out our Top Rated Business Loans Companies.

The small business lending landscape is changing. According to a 2014 report from Ernst & Young, "nearly one in five [small businesses] reports having changed its primary bank in the past year." The reason: access to capital; an increasing number of small business owners feel they can no longer rely on traditional lending channels to provide needed funds-regardless of a long-standing history with the bank or other provider. And the feeling is mutual; not only are small business owners departing from traditional lending routes, but banks are also losing interest in lending to small businesses, in favor of larger corporations with greater borrowing potential. Not to say the demand for small business loans isn't there; it's the supply of traditional lenders that's running out. For example, in 2013, the Small Business Administration only approved 13 percent of applicants seeking a small business loan. The lack of response from traditional lenders has opened the door for a number of alternative lenders to pick up the slack. This group includes venture capitalist firms, peer-to-peer lenders, direct lenders, and crowdfunding. Companies like CAN Capital, OnDeck, and Lending Club are also meeting the demand of small business borrowers by providing more flexible terms, and faster access to capital. To be clear, not all banks offer unreasonable terms meant to deter small businesses; in fact, banks tend to offer much lower interest rates than alternative lenders. But interest rates aren't everything. In fact, more and more small businesses are willing to absorb higher interest rates in exchange for these other perks offered by alternative lenders: 1. Alternative Lenders Are Faster than Banks One area in which alternative lenders are literally outpacing traditional banks is in how fast they can transfer funds to their customers. The top business lenders have streamlined every step of the process by shifting their platforms online. Now, rather than filling out stacks of complicated forms and paperwork, customers can answer a series of simple questions about themselves, their business, and the size of the desired loan; instead of waiting months just to see if they've been approved for a loan, borrowers can know within hours, and receive funds within days-not months. Application According to an article from NerdWallet, the process of applying for a bank loan for your business can be both lengthy and complicated. "Expect to spend 25 hours or more just taking care of the necessary paperwork," the article warns. Borrowing through an alternative lender, meanwhile, can take as little as 10 minutes. Approval and Disbursement NerdWallet also estimates that borrowers will have to wait anywhere from two to six months for a bank to both approve the loan and disburse the funds. According customer data from one alternative lender, some customers achieved pre-qualification status within a hour, and customers on average will receive funding in as little as 11 days. 2. Alternative Lenders Have Lower Requirements than Banks One of the main reasons why alternative lenders can get funds to borrowers faster is because of their less stringent applicant requirements. Since the 2008 recession, banks have upped their lending restrictions so as to only approve what they consider "low-risk" borrowers. This status applies to business owners with excellent credit, whose businesses are well established and not struggling financially. By this standard, many small businesses are considered high-risk, and will have no success obtaining a loan though traditional means. Alternative lenders have remedied this problem by offering lower requirements and more flexible terms, the tradeoff being they charge higher interest rates than traditional banks. Credit Score To receive a small business loan from a bank, you need excellent personal credit. Maintaining good credit indicates to lenders that you are a reliable borrower, that you'll pay off your loan within the terms set by the lender. Business Finance says a credit score of 800 will get you a loan practically everywhere; 700 is considered ideal by most banks; and most banks will not approve an application for anyone with a credit score less than 640. On the other hand, alternative business lenders provide options to borrowers with personal credit scores as low as 550-some will even provide working capital loans to borrowers with a score of 500. Time in Business It's no secret to those in the small business realm that a significant portion of small businesses will fail within the first few years. The SBA reports that half of businesses will fail in their first year. One of the main contributing factors to this statistic is the fact that business owners are poor money managers; they can't pay their bills, or they invest their capital in areas that don't produce scalable results. Not surprisingly, traditional banks see businesses that have been around for at least two years as good investments, and younger businesses as statistically bad investments. Not the case with alternative lenders. The top business loan providers will offer options to businesses at nearly every stage of their development. Many of these companies provide terms to businesses as young as four months! Business Revenue Another important metric banks look at before approving a loan application is how much revenue your business brings in. Simply put, the more money your business makes, the more you can borrow, and the more money the bank will be able to collect in interest. A report from Inc.com claims that in order to qualify for a typical bank loan for your small business, you'll need to be making at least $250,000 in annual revenue-not exactly an obtainable figure for many new businesses. Alternative lenders, meanwhile, will accept applicants with limited resources; and while no company can offer a term loan to a business with anything less than $100,000 in annual revenue, they do provide merchant cash advances to companies that make at least $55,000. 3. Alternative Lenders Require Less (or no) Collateral Speaking of lower lending requirements, a big reason why alternative lenders are becoming a more attractive option is that few of them require collateral. Simply put, collateral is an asset the borrower promises to give the lender in the event that the borrower cannot pay back the loan. There are two types of collateral a bank may require you to borrow against before you can qualify for a loan: personal collateral refers to an asset such as a home or car that can be transferred to the bank and sold; business collateral refers to assets directly associated with the business. Nearly every bank requires some type of collateral before approving a loan. For example, Wells Fargo and Bank of America both require business collateral, while KeyBank requires both business and personal collateral. Meanwhile, top alternative lenders require zero collateral. While dedicated small business lenders are a good alternative to traditional banks, not all alternative lenders are created equal. Some lenders, while offering flexible terms, will also charge hefty origination or prepayment fees. You'll also need to pay close attention to the lenders cents on the dollar, as well as your overall likelihood of getting approved. For a full list of the top small business lenders in the industry, click here.

So you've already come up with a great business idea? You're probably working out the kinks of day-to-day operations, but you've probably been wondering what it takes to get a loan. When you finish this article, you'll know the difference between an unsecured loan and a secured loan and which to go with. What Is an Unsecured Business Loan? An unsecured business loan is based solely on an individual's financial integrity, business record, and character within the community. Based on these aspects, a lender may decide to provide a loan to an individual without requiring any collateral if they are in good standing. In order to obtain an unsecured loan, a business owner must have very good records and a great reputation within the business world. Because of this, unsecured business loans are often called "signature loans". With essentially a signature and good credit, you can attain an unsecured business loan. Because an unsecured loan does not require any collateral, there are much higher interest rates associated with them. Lenders do this to provide some form of protection for themselves in case the loan defaults. With higher interest rates, the lender gets some sort of profit off of the loan that can make up for collateral as a cushion. Interest rates vary as the market fluctuates, but as a business owner, you can plan on a substantially higher rate than a secured loan would have. Unsecured loans are a lot like credit cards in this way-credit cards do not require any collateral when you sign up for them. The lender assumes, based on your current and past credit, that you will be able to pay the loans back. The most obvious benefit of getting an unsecured business loan is the fact that you do not have to provide collateral. Your business assets are protected from being seized in the circumstance of a default on the loan. This is especially beneficial if you do not have a lot of business collateral to pledge. For example, your business may not be based on manufacturing physical products that you could provide as collateral, as well as the equipment to produce these goods and you would be forced to use personal collateral instead of just business collateral. Even though there are benefits for an unsecured loan, there are understandably some disadvantages as well. One of those disadvantages is that an unsecured loan is more difficult to obtain than a secured loan if you have poor credit. When a lender agrees to give you an unsecured loan, they are taking a huge risk on you. Therefore, their qualification terms are going to be more difficult to meet. Another large disadvantage, as before mentioned, is the interest rates associated with unsecured loans. When all is said and done, you will end up spending considerably more on an unsecured loan over the lifespan of the loan than on a secured loan. What Is a Secured Business Loan? A secured loan is a loan in which collateral is provided in order to secure the loan. The purpose behind this is to provide protection for the lender in case the loan defaults. In the case of a default, the lender can appropriate the collateral pledged. As always, there are different advantages and disadvantages to different kinds of loans. One of the advantages of a secured loan is that because collateral is pledged, interest rates on the loan are lower. The risk of lending to you is lower when you provide collateral because the lender can obtain the worth of what they lent to you through that collateral, either by keeping it or selling it. The lower interest rate means that you will pay less over the lifespan of the loan, and if you pay it off in a timely manner, you won't have to worry about surrendering your assets. Another advantage of a secured loan is that you will be able to get a loan of greater worth versus if it was unsecured. Lenders are willing to put more money towards secured loans because they are less risky. This is especially true if you have good credit as well as collateral. The combination of the two is a great reassurance to the creditor that you are a good investment who will pay back the loan. Good credit in secured loans is definitely in your favor, but it is not as crucial as in unsecured loans. Because you pledge collateral, the creditor will care less about your credit. This is especially beneficial to newer companies and business owners who haven't had the time to build up the business credit that is important in the eyes of creditors when securing business loans. One disadvantage of a secured business is, understandably, that you as a business owner have to provide collateral. This can be tricky in businesses that do not produce physical goods and do not have the equipment that makes those goods-both of which are often used as collateral. In business more oriented in financial transactions, the collateral will have to be pledged portions of profit, financial assets, property, and sometimes even personal collateral. For a new business that is not extremely stable, promising collateral can be a little bit intimidating. Another disadvantage of secured loans is that they take longer to obtain than an unsecured loan. Secured loans take more paperwork because of the assets and collateral involved in the loan agreement. This can be a major problem for businesses who need cash fast.

Microloans were established and are funded by the U.S. Small Business Administration. The idea behind microloans is to provide a quick start up for smaller companies or for lower income individuals. The limit for a microloan is $50,000, but most loans are usually under $20,000. The SBA provides these funds to lenders who then distribute the funds to qualifying individuals. Each individual lenders has their own requirements for qualification; however, there are some commonalities between all of them. Some of these commonalities include credit, personal guarantee, collateral, and sometimes special training or classes. Individuals must be 21 years old or older in order to qualify. In most cases, the individual taking out the loan must be the sole owner of the business that will be funded by the loan. Microloans can be used for a variety of purposes which include things like machinery, furniture, working capital, etc.-whatever it takes to start up a small business. However, microloans cannot be used towards purchasing real estate or towards paying off existing debt. In order to secure a microloan, individuals have to go through an application process with a SBA approved lender. On the SBA website, there are lists and links to loan providers. The application process is different for each lender. One example of such lender is Kabbage. Kabbage provides microloans from $500 to $100,000. The SBA itself also provides microloans to small business owners. They, of course, have their own terms and conditions, including what the microloans can and cannot be used for. The repayment process is different for each microloan because the loans are provided by the different intermediary lenders. Usually, the repayments include processes similar to normal loans. Microloans can have interest rates, just like traditional loans which will have to be paid off. The time frame of paying off microloans must be within six years of signing. Crowdfunding is one major alternative to microloans if you can't qualify for one or don't feel like it is the right fit for your business. Crowdfunding is basically mass fund-raising for your business. This can be achieved through networking or other means. Go Fund Me is a rising resource for crowdfunding. It is a way to use social media as a platform for fund raising. Users can ask their Facebook and other social media friends to donate to their business causes. For more answers to your business loans questions, check out our Business Loans Page!