How to get a small business loan?

As a small business owner there are times when the cash flow starts drying up or you might need some cash infusion for a new product launch or buy more inventory and you wonder how to get a small business loan. All 3 types of business credit methods discussed here do not require you to have a great credit score (720+) but having a great credit score does help you get good interest rates on these loans.

Here are three unconventional ways you can get a business loan,

Getting a business loan from from a Credit Union

Ditch your accounts at the Big Banks and open a business account at one of your local Credit Union. Credit Unions are not-for-profit organizations offering a wide array of financial services just like your Big Bank but they are owned by their members (you). If you have an account with a credit union, you are a member and an owner. They do not have to charge you exorbitant fees to make a profit. Being a member/owner guarantees that your credit union is looking out for your financial interests and not that of a small group of stockholders. Memberships are limited. Credit Unions have different eligibility criteria and you might have to find one where you will be eligible. The only disadvantage Credit Unions had was lack of ATMs and branches but many of them have tie ups and have launched some great mobile apps that allow you to deposit checks using your smart phone.

Some great Credit Unions in Georgia,

My personal favorite is Digital Federal Credit Union – DCU.

I Love my Credit Union (TRUE STORY)

They are a California based Credit Union. I have an account with them and would like to share a personal story. I own a car, pledge my car title and got a car loan for 1.99 % (in June 2013) from DCU. If you have an account with them, a good credit score and direct deposit into one of their accounts you can get a loan in less than 24 hours! No kidding, I did. Their customer service was amazing. I asked them for a personal loan at 10% but the loan representative suggested a reverse car loan at 1.99%. Now you know why I love my Credit Union.
Digital Federal Credit Union
Image: I love Digital Federal Credit Union

Getting a business loan from Peer To Peer lending

Peer to Peer/Social lending is strangers coming together to fund/loan some money to you for personal or business reasons. The loan is made to you as an individual rather than your company. The loan rates depend on your credit score, credit history, current annual income and debt/income ratio.
The loans rates can be higher and will take at least 2 weeks receive the loan in your bank account.

Some of the well known Peer To Peer lending websites are:

Getting a business loan from Crowd Funding website

Crowd Funding – If you have a great idea – product, book, art, film or any other creation you can go on these website and pitch your idea. If impressed individuals will contribute and fund your project. The Crowd Funding is applicable mostly to new ideas and can take weeks to several months to completely fund.

Some of the well known Crowd Funding websites are:

Do you know any other unconventional method that has helped you secure a business loan? Let us know in the comments below.

What does obamacare mean for small businesses in 2014 and what small businesses must do to get compatible

Small business owners across the nation breathed a collective sigh of relief when it was announced over the Independence Day holiday that key provisions of the 2010 Healthcare reform legislation, officially known as the Affordable Care Act (ACA), won’t go into effect until January of 2014. That means that there are still a few months to prepare for the new healthcare environment and regulations. The ACA legislation contains more than 2000 pages of dense information that few people will actually read, so businesses are relying on accountants and business analysts to sum up the requirements. All business owners really want to know is, “What are the effects of healthcare reform on my business in actual hard dollars?” Here is a basic overview of the most salient features of this healthcare reform:

What does the healthcare reform legislation require?

First of all, the most important point to understand is that “small ventures” – with 50 or less full-time employees, representing 96 percent of American businesses – are exempt from the most controversial mandate of the ACA that requires large enterprises to offer health benefits or pay a fine of $2,000 per employee. This means small businesses will not have to be concerned with this until they have 49 full-time employees (working 30 hours or more) and in a position to hire.

How much will it cost?

Although small ventures are not required of offer insurance, an incentive has been set up to encourage them to do so. A “small business tax credit” will be available defray some of the costs of coverage. For companies of 25 or less, tax credits are available to reimburse up to 35 percent of premiums covering tax years 2010-2013. Next year, the tax credits will go up to 50 percent of premiums. The picture is a bit better for small businesses with less than 11 employees who earn less than $25,000. Those businesses are eligible for full reimbursement of health care premiums.

What should businesses do by 2014 to get compatible?

Starting in 2014, small businesses of up to 100 employees (including sole proprietors) can shop for coverage in state-run health exchanges. The federal government projects that more than 25 million people will be able to access these health exchanges. It will be up to each individual state to decide if they will allow companies of more than 100 employees to find coverage on these health exchanges as well.

Learn more about the ACA and what it means in terms of tax impacts at the IRS page which attempts to cover a wide range of topics. The Small Business Association also has some detailed articles on the ACA prepared based on how many employees you have. Undoubtedly, there will be a great deal more changes happening as the proposals runs into real-world snags, so keep these links handy for updates.