small business

What Is an SBA Disaster Loan and How Do I Qualify for It?

July 8, 2020 By Kathryn Vercillo Leave a Comment

The Economic Injury Disaster Loan (EIDL), also called the SBA Disaster Loan, is one of the measures that the government has taken to help businesses during the COVID-19 pandemic. New applications opened on June 15th. At that time, it became easier for certain businesses to qualify for the loan. In fact, even freelancers and other sole proprietors now qualify. Do you?

What is the SBA Disaster Loan?

The Small Business Administration offers a wide range of support and resources to small businesses. The SBA Disaster Loan is one of those resources.

First, there has to be a declared disaster. The COVID-19 pandemic is just one such example of a declared disaster. It has obviously impacted a large number of small businesses. Therefore, it’s exactly the type of situation that the loan helps remedy.

Once a disaster has been declared, small businesses can apply for assistance. In certain cases, SBA disaster loans also assist homeowners and renters whose property has been damaged. In the case of coronavirus, the damage is economic. Thus, the official name: Economic Injury Disaster Loan (EIDL).

What is the COVID-19 Economic Injury Disaster Loan?

Through this program, small businesses can apply to receive economic relief. If you are a sole proprietor or small business owner who has suffered losses due to COVID-19, then you might qualify for this loan.

Who Qualifies for this SBA Disaster Loan?

When you apply for the loan, you’ll select your status from the following options

Agricultural business with 500 or less employees
Coops with 500 or less employees
Employee Stock Ownership Plan with 500 or less employees
Tribal small business with 500 or less employees
Other business with 500 or less employees
Other business with more than 500 employees that meets the SBA Size Standards for a small business
Private non-profit with IRS tax exemptions under certain code sections
Sole proprietor or independent contractor with or without employees

If you qualify as one of those businesses, and your work has been negatively impacted by coronavirus, then you might be able to get an SBA Disaster Loan.

There are certain things that can disqualify you. For example, if you are a primary business owner who owes unpaid child support, then you might get disqualified from receiving the loan.

What is the SBA Disaster Loan Advance?

One of the things that might feel a little bit confusing is that there is the loan itself then there is a loan advance. You can apply for loans of varying amounts. Additionally, you can also apply for a loan advance of up to $10,000. You apply for it at the same time that you apply for the primary loan.

Some small businesses qualify for this advance even if they are not approved for a loan. Moreover, the loan advance never needs to be repaid.

SBA Disaster Loan Terms

The entire point of this business loan is to support small businesses during economic tribulations. Therefore, the terms of the loan are excellent compared to private loans. Some of the details include:

Low interest rate (3.75% for businesses, 2.75% for non-profit organizations)
Long period of repayment, up to thirty years
First payment is deferred for one year after receiving the loan

Small businesses can use the loan to pay their employees, pay off business debt, and cover most other business expenses. The loan is different from the Paycheck Protection Program loan. If your business received that money, use that first to cover those costs. Then use the disaster loan for any payments still not covered.

The big change that’s happened with these new loan terms is that sole proprietors and freelance employees are now more likely to qualify for assistance. Have you tried to get an SBA Disaster Loan? Share your experience in the comments below.

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How to Take Payments Over the Phone and How to Choose the Best Provider for You

May 4, 2020 By Susan Paige Leave a Comment

If you own a company that needs to take payments over the phone, then a solution like a virtual terminal will be paramount to ensuring that you are successful. Some good examples of this are when you need to take a deposit for a hotel booking, accepting orders that need to be picked up and when products have to be shipped overseas. The question is, how do you make a payment when the customer isn’t there to give you cash or swipe their card in your chip and pin machine?

There are a few steps that you need to take to give your company this service, primarily a virtual terminal and PCI compliance. In order to do this, the first thing to do is to choose a virtual terminal partner.

Picking a provider

The first decision you need to make is choosing your virtual terminal partner. There are many on the market, and all have different features and price points, so doing the research to ensure that you are picking the best fit for you is essential. You may find that when doing your research, you will see ‘card not present’ transactions referenced as a service, which is just another term used interchangeably with a virtual terminal. You will often have to get in touch with the providers before you get any information on costs, so take some time to contact at least three to get a good idea of the market.

It may be tempting to choose only the largest providers like Worldpay or Sage Pay as they are very well established and often have lots of other services that may be useful to you. Ensure that you contact some of the smaller providers as well though, as if you are a smaller business, these might be a better fit for you. Also, do not be pulled into features that aren’t needed in your situation. While being able to access many different services from one provider may seem like a good idea, if you only really need a select few of them, you could be saving a lot of money by avoiding them. In general, providers will charge a monthly fee that isn’t too expensive, but doing your research will make sure that you get the best offer and service for your individual needs. The type of business that you have may impact your choice, as a more high-risk business may want more security. If you aren’t sure, then this PaymentCloud blog article

PCI compliance

Once you have chosen your virtual terminal, you’ll also need to make sure that you comply with the Payment Card Industry Data Security Standard to ensure that all of your payments are secure. This is due to card payments being more vulnerable to in-person payments, and fraud is a serious issue that you need to avoid. Most providers are PCI compliant, and this is something that you should check before signing up.

For more of our excellent savingadvice articles, read these:

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Photo Credit: Celeste Lindell, via Flickr.

3 Low-Budget Marketing Ideas For Small Businesses

March 4, 2020 By Susan Paige Leave a Comment

This article is a bit of a departure from our usual fare of advice on saving money. Its geared for small business owners who are looking to efficiently scale their marketing without breaking their budgets.

What is a definite way to speed up your business and lead it towards the success? Right you are! The key to prospering business is an efficiently planned marketing. So, the case is solved. However, when it comes to small business and to quite limited budget, you find yourself stressing out. Don’t! There are lots of ideas for low-budget marketing that will totally satisfy your needs for quality, efficiency and cost. If you start digging in, you will be overwhelmed by the choices available.

Well, since pretty much everything is digital now, you might neglect the still-existing importance of a print media. Believe it or not there are still people whose memorizing and attention skills will benefit more from something that is tangible rather than just seen from the screen. Whether you choose digital world or the real one to promote the work of your life you have got to make it look attractive and enticing. Here you might want to check an online design tool Crello. This app claims that you do not need to posses any design skills to create. New skill plus money saved equals win. Easy and comprehensible app to use, proved by people from all over the world.

Let’s have a closer look at those which are really able to promote your business.

Flyers

Flyers enable you to get significant results for quite insignificant budget. Getting them printed and distributed do not require much money to spend. Design costs might be cut as well, since you can create it yourself. If you design your flyer well and generate right, the flyer will show itself to be an efficient tool for lead generation. Colors, fonts, word choice, graphics etc., all this should be immaculately aligned with your big message to the world. Having QR code added to your flyer will let people get connected to more information about your goods and services. Who knows, maybe they will purchase something right away.

Blog

Blogging. This has become one of the most essential ways to promote and actually do business in the digital world. It’s not pricey, especially if you are quite a writer and capable of creating texts that will sell, attract and advertise. There are also some great free tools to utilize. It may be time consuming, requiring constant fresh and creative thinking. What is not, for that matter? However, when thought through well it will make your creation sky-rocket.

Social Media

It goes without saying. However, something actually should be said. Social Media Marketing is relatively cheap, easily connects to huge audience and fully-fledged way of running your business. Meaningful posts, animated graphics, stories. It’s all there at your disposal.

Therefore…

Sometimes it is not only big money that promises fruitful results. It’s rather your approach and willingness to make some effort, knowing what tools and apps to address. Limitless ideas for excellent marketing that save your money instead of spending it are all there, just check how to access them and do it right.

For more great savingadvice articles, consider reading these:

Twenty-Three Advantages of Self Employment

Twenty-Three Disadvantages of Self-Employment

Sorry, But You Can’t Actually Start A Business For Free

Business Finances: Tackle Debts & Avoid Insolvency in 2020

February 25, 2020 By Susan Paige Leave a Comment

Business Finances Tackle Debt and Avoid Insolvency

Businesses that suffer from too much debt can see their company come crashing down. How this debt is handled can be the difference between a business that sinks or swims. You can either settle the debts, or allow the company to fail, and with the right strategy, you can avoid becoming insolvent.

When a business becomes insolvent, it means they can no longer meet their financial obligations to its creditors as debts become outstanding. While there are some strategies to rescue a business once it becomes insolvent and get it back to operating normally, it’s best to try and avoid this situation altogether. With that in mind, here’s how your business can tackle debts and avoid insolvency:

Review Your Budget

If your debt is growing out of control, chances are your company’s budget isn’t working. You need to create a budget based on the business’s current financial situation. Review your last few month’s bank and credit card statements to help create a realistic budget; you need to be aware of all your sources of revenue and expenses so you can identify trends like revenues that are in decline or any costs that have been creeping up.

By categorizing your income and expenses, you will be able to get a clearer understanding of which parts of your business are the most profitable and which parts are draining your cash flow.

Cut Costs

When you’ve got a clearer picture of your business’s finances, it’s time to find ways to cut costs and reduce your expenses. You’d be surprised how many expenses just roll out each month that may not be contributing to the upkeep of your business operations.

There are three categories for your expenses: those you will continue with, those you can negotiate to a lower cost, and those to eliminate completely. Some costs will be unavoidable, like payroll taxes and renting the office space. Other costs can potentially be negotiated down, by shopping around for new suppliers or insurance companies. Finally, some expenses can be done away with altogether, but this could involve difficult decisions like letting go of an employee. However, if this becomes a necessity for keeping your business running, it might be a viable option.

Increase Revenue

Your debt problems likely arise from a low cash-flow, so increasing your revenue is a sure-fire way to help dig yourself out of debt or prevent it from getting any worse. There are many ways to do this, such as marketing your products or services more heavily towards your current customers or increasing your prices.

Thanks to your budget review, you should have a better idea about which sources of revenue are the most profitable. Focus your attention on these areas and try to increase this high-profit revenue to give yourself the best return on investment.

Collect Payments

Tying in to the increase in revenue, you need to keep on top of payment collection from your customers. Send out invoices promptly, as soon as your product or service has been delivered. Do everything you can to collect payment from customers as quickly as possible, so be diligent with your record-keeping so you know who still owes you payment. Make sure you’re chasing those payments regularly, so your cash flow doesn’t stagnate.

Consolidate Loans

Consolidating your debts doesn’t erase them, but it can make it easier to pay them back by combining them into one payment with a lower monthly cost that doesn’t affect your credit. By consolidating debts, you deal with a single creditor and can perhaps get a loan with a lower interest rate. This process can be done by a debt consolidation company that will take responsibility for negotiating the new loan, collecting the payments and paying off your previous creditors.

It simplifies the repayment process, allows you to reduce the size of your repayments and can help improve your cash flow position.

Be Transparent

Keeping the true nature of your business’s debt problems to yourself will only cause more stress and pressure on you alone to fix it. You don’t need to let every employee know, but telling a few trusted colleagues can help lessen the burden, and they may be able to offer help and guidance during this stressful time which could result in a better outcome than if you tackle it alone.

Alternatively, professional advice can be invaluable in this kind of situation. Business mentors or an insolvency practitioner can help you plan the best course of action for getting out of debt.

For more guidance and advice about going insolvent, Hudson Weir Insolvency Practitioners can help.

For more great Saving Advice article, read these:

Twenty-Three Disadvantages of Self Employment

Self Employment Myths You Need To Know About

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How to Earn Big in the Gig Economy

February 19, 2020 By Trey LaRocca Leave a Comment

Nowadays, the “side gig” has become all the more common. While many still maintain full-time work, the independent contractor has become a staple in the US economy. The good news is, you don’t have to give up your full time employment to take part in the gig economy. For many people, it just takes the form of monetizing a hobby they already do in their free time. The difference between those who strike gold, and those who don’t, is effort. Not only in your work ethic, but in your online presence and scheduling. To make sure you maximize your earning potential, here are some great tips on how to earn big in the gig economy.

Focus

One big mistake a lot of side-hustlers make is spreading their focus too wide. Casting a wide net can seem useful at first, but long-term business comes from building a book of business. The best way to do this is to begin by focusing in on one particular skill you have, and hitting it hard from the get-go. You can diversify later, but if you want steady income, spend your first months developing a clientele and a good reputation at one trade. Use that initial endeavor as the anchor for your independent work, and you’ll find yourself ready to be your own boss much sooner than if you spread your efforts around many different jobs.

Online Presence

Getting clients for your side gig is more than just posting ads. While it is vital to have adds up on all relevant sites like Facebook Marketplace and Craigslist, having a central point of entry is extremely important. Instead of just dropping your contact info on each ad, get ahold of a cheap or free web domain and create a site for your trade. This way, you can direct people to a website focused on you and your portfolio. Now, instead of saying “they did great, I found them on Craigslist,” your clients can send a link to their impressed friends and family. Now you are dealing with a faster referral process, and much less competition. The site will also provide more space for you to explain what you do, and how well you do it.

Scheduling

Consistency is key. If you have a set schedule of when you can get jobs done, make it public and stick to it. One of the biggest issues people have with independents is reliability, and you can be the one to change that impression. Having this schedule public will also serve to reduce friction in the customer acquisition process. “Can you do 6pm on Thursday?” leads to a close much faster than “When are you able to come by?” As with anything, the more information you give at the onset (without overloading) the less they need along the way. When it comes to business that more or less has to finds you, a fast initiation process can make or break you. People are usually asking around many different ads, and the person who can close them the fastest will usually win the day.

4 Ways To Cost-effectively Save Money With Business Security

February 17, 2020 By Susan Paige Leave a Comment

Saving money isn’t the simplest thing around, especially when your business is concerned. The company is your bread and butter, and you should do everything in your power to keep it running smoothly.

The issue here is that ensuring that your business is entirely streamlined requires you to spend a significant amount of money. Spending so much on your business isn’t ideal, mainly because most business owners don’t have the budget for it. But its true – you’ll be able to save money by carefully allocating your spending.

The following four tips will generally be applicable to most business types, so without further ado, let’s get into it.

Strict Employee Vetting

When you’re running a business that has more than a few employees, you need to take care of who you are hiring. Employees can be beneficial to the company’s effort, but a bad hire can be just as detrimental to the bottom line.

Having faulty employees that aren’t only lazy with their work, but are actually contributing to the degradation of your business costs you money like crazy.

Solving an issue with an already hired employee can be a laborious process that requires a couple of extra steps like notices, payments, and other things that wind up costing a small fortune.

Employing a robust but fair vetting process beforehand is going to cut down on your business expenses significantly. Vetting your employees based on their skill, their experience, and their general outlook towards your work is going to do wonders for your budget.

Your vetting process when hiring an employee should consist of:

Checking the CV
Checking the References
If they’ve changed a lot of professions, why?
Asking important questions
Calling the reference

Invest Into Actual Security

If you’re running any business that hosts events or operates with any people who aren’t employed in your company, you need to pay mind to the security. The security on any given occasion, location, or business can do as much good as evil.

If you have a good security team protecting your clients and your business, you can rest assured that your business is going to gain some additional reputability. If you have a bad team, on the other hand, it can drive people away from your company.

When picking a security team, make sure that they’re going to perform their job well. Check the employee’s credentials and past gigs to make sure they’re up to the task.

If any criminal incursion occurs, you can rest assured that both your employees and your assets are well-protected. It will save you a fortune in eventual losses or possible lawsuits.

Cybersecurity

When people are running a business, cybersecurity is more often than not wholly overlooked. That is a horrible thing, as employing proper cybersecurity is perhaps one of the most important things you can do.

If you’re running a modern business, you’re most likely to own a myriad of user or customer data. Other forms of company data can be susceptible, as well.

Employing the best cybersecurity or VPN program on the market is going to protect all your data, hide all your browser history, and make sure that you’re protected from:

Hackers
Blackmailers
Scammers
Nosy ISP
Geo-blocked content

An excellent VPN security service can help you avoid all of the issues that come with it. Protecting all your data and ensuring privacy is the first step to protecting yourself when you’re using the internet, thus saving money.

Set and Enforce Firm Policies

Enforcing firm policies can help you in in a myriad of ways. It will not only beef up your security but is going to do wonders when it comes to avoiding costly lawsuits or other business expenses.

If you’re running any type of website, app, or anything with user content, enforce strict password policies. It will protect the users from any possible hack and protect you from any liability.

When you’re running a company and enforcing strict policies with your employees, it will help you build discipline. A happy, disciplined, and efficient employee is going to put out much more work than a lazy one, and firm policies are the way to go about it.

For more great Saving Advice articles, read these:

Twenty-three advantages of self employment

Twenty-three disadvantages of self employment

Ten tips for entrepreneurial success

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