The Paycheck Protection Program (PPP) is an SBA loan that helps businesses keep their workforce employed during the Coronavirus (COVID-19) crisis. The loan provides loan forgiveness for retaining employees by temporarily expanding the traditional SBA 7(a) loan program. The SBA will forgive loans if all employee retention criteria are met, and the funds are used for eligible expenses.
According to the SBA website, the SBA will open the portal for the new PPP loan on Monday, January 11, 2021 at 9 am ET. When the PPP loan portal system opens, it will initially accept First Draw PPP loan applications from participating CFIs, which include Community Development Financial Institutions (CDFIs), Minority Depository Institutions (MDIs), Certified Development Companies (CDCs), and Microloan Intermediaries.
If you are thinking about getting the new PPP loan or any other business financing, then you should know about the basics before you get started. If you understand the basic dos and don’ts of loans, then you will be better equipped to find the best loan for your needs. Whatever type of loan you are applying for, be it the new PPP loan or something else, you should follow these basic rules to help you determine the best solution for your needs.
Shop around
When searching for a loan, it pays to do your research. Look for as many suitable lenders as you can, so that you can find the very best deal. There are many online pages that allow you to compare loan rates from a variety of lenders. In additional to looking online, check out your local banks and mortgage lenders for deals too. If you ask for a detailed quote, the lender will have to look at your credit report which will result in a hard inquiry. Too many lenders looking at your credit report can affect its rating, so make general inquiries until you are sure the lender is right for you.
Look beyond APR
When shopping for a loan, you should look past the promotional APR rates and terms, and ask the lender what the monthly repayments are. Low APR rates are good, but you need to find out what rate you can actually receive, what the repayment terms will be and if there are any additional charges. Think about the total interest payments on the loan rather than just the monthly payments. Low interest rates is one reason the new PPP loan is a great option for small businesses.
Look at protection
When taking out any loan, it pays to have insurance protection in place in case you fall ill or otherwise have your business activities interrupted. This way you won’t be left unable to repay your loan obligations. Look at the cost of taking out such coverage, both with the lender and with other companies. Also make sure that you cover as many risks as possible. At the bare minimum, you will need liability protection but a comprehensive business owner’s plan will provide you the best bang for your buck.
Avoid using collateral
If possible, try and avoid taking out secured loans. If the amount you need to borrow is small or you have good enough credit to borrow without collateral, then do so. Although unsecured loans have higher rates, they are less risky because your assets will not be at risk if you cannot make the payments.
Check and double-check
Before signing any agreements, check and double-check all of the terms and small print. Some lenders will put the most unfavorable clauses in the agreement in a place you might overlook. Look at what happens if you miss payment or the payment is late, and if there are any additional penalties or charges, such as charges for early repayment. If possible, have an attorney review the loan agreement as well.
Get short terms
Try and take a loan out over the shortest period you can afford. Taking loans out over 10 years or more can be risky, and you cannot be sure what your financial situation will be at that time. Of course, taking out a long-term loan for real estate may be acceptable, but the longer the period of the loan, the more you have to pay back.
Whatever type of loan you want, be it the new PPP loan or another type, make sure that you know you can afford to make the repayments, and that taking out the loan will help you financially.
Through observing business people who have been successful, and how they achieved their success, I have concluded that there are a number of factors that must be present for business success to occur.
As I like to keep things simple, these success factors can be condensed into a formula. It is:
Success = Startup Business Person + Product/Service + Market
Let us look at this formula in a little more detail. Firstly, what is success? The definition of success depends on what you want to get out of the venture, that is, what your goals are. Business success usually means creating a viable entity (business) that returns its investment and earns a profit.
Appropriate and realistic goals include to be challenged, to achieve, and to build something good. For example, your definition of success could be to earn $100,000 a year from your home business so that you can replace your full time job income.
The most crucial element of the above formula is the “Startup Business Person”. This element decides all the others.
Ultimately, a successful startup business person is someone who opens, manages and runs a successful startup business and can repeat the process. This is someone who has accepted the responsibility and learned how the job is done.
Successful startup business people usually always start small and grow the business. They do not have too many irons in the fire at once so that their efforts are not diffused. They give it everything they have and believe that hard work counts. They try repeatedly until they achieve the success they are looking for. Moreover, most of all, they possess a positive mental attitude.
They have learned to emulate success. Do you know what emulate means? To emulate means to attempt to equal or surpass. In other words, if you were to attempt to emulate someone else’s success, you would imitate them and as you gained further knowledge and skill, you would attempt to do better than them. Remember that emulation takes things one step further than imitate.
The next part of the formula is “Product/Service”. Without something to sell, there can be no business. Generally, the product or service needs to be of a high quality. It also needs to be something that people are prepared to pay for.
The last component of the formula is “Market”. A successful business person knows who their market is and how to reach it in the most cost effective manner. The market is defined as the people who want and are prepared to pay for the product or service.
I would now like to run through with you what I consider are the basic principles of home, small or online business success.
10 Business Success Factors
Believe in Your Product or Service
First, you need to believe in your product or service. If you do not believe in it, you will have a great deal of difficulty selling your product or service to other people. You also need to have confidence in your ability to provide and promote your product or service. An old saying sums this up best: “All things are possible to he who believes”.
Aptitude for the Business
Secondly, you need to have an aptitude for the business. You will also need the motivation to acquire at the very least basic skills and experience before you start your business. If you were to set yourself up as a home electrician but did not have any skills or training in this area, then you will almost certainly fail. However, if you are employed as a bookkeeper and you enjoy the job, then setting up your own bookkeeping service would be a sensible choice with a greater chance of success.
Be Responsible
Thirdly, you need to be responsible to your customers. This is achieved by only making commitments you can keep and by not engaging in misleading or dishonest advertising. If you want to build long term success in your home business, then you need to develop long term satisfied customers. When their needs are being satisfied, customers are at their happiest.
Aim for High Quality
The next principle is that you need to have a high quality product or service. This will be your best advertisement. Inferior quality products usually generate poor customer satisfaction. A dissatisfied customer can be very dangerous for your business. Usually they tell on average about fourteen other people who will then be disinclined to buy your product or service based on the experience of that one dissatisfied person. Therefore, always aim for a top quality product or service.
Make a Profit
However, it is not enough to have a top quality product or service. You also need to have a product or service that will generate enough income to cover all your business expenses and give you a satisfactory wage. A friend of mine once said that business is only about two things: satisfying customers and making a profit. A simple statement but very true.
Sufficient Startup Capital
You also need to have access to enough cash to set up and run your business, and enough income to meet your private expenses during the startup phase. A major problem with many home and small businesses is that they fail to have enough money available to ensure their success. There is nothing more discouraging than having a great idea, getting it started on a shoestring, not being able to expand due to cash shortages and seeing a competitor come along and steal your market.
Start Small
Another fundamental principle of home business success is that you start small. This will enable you to minimize your overheads until you are confident of your success in the marketplace. For many of you, this would mean starting part-time while retaining your full-time income source. When you can, expand your business into a full-time venture. This is a great way of minimizing the risk of failure.
Be Well Organized
Successful home businesses are well organized. They have a system for keeping track of expenditure and earnings. This level of organization in your business will help to ensure that you are providing your customers or clients with a top quality product or service. It will also ensure that you have enough information available to maximize your profitability and to satisfy your legal requirements for record keeping.
Be Prepared
Preparation is another important ingredient in your business success. This preparation will include being aware of the regulations and laws affecting small, home or online business in your area or country. Armed with this knowledge, you should not have any nasty surprises from unintentional violations of the law.
Have a Business Plan
Finally, successful home businesses have developed a comprehensive business plan. This is their road map to success. It tells them where they are going and how they are going to get there. It is very useful for comparing actual performance against what you planned and enabling you to make adjustments to lead to greater success. There are many useful software packages like Live Plan available to assist you with your business plan preparation.
Need help reaching startup business success?
I can support you whenever you’re ready to stop wasting time, monetize your talents, and finally make the money your brilliant ideas truly deserve. Just contact me.
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If you are in the early stages of starting up a business then you may be experiencing the internal ‘fear and doubt’ dialogue that can often take place in one’s mind. The following 9 Principles will help to release some of this tension and move you into business startup success.
Do What You Love
Ensure that you are in a business that interests you. This doesn’t necessarily mean that you have to be in love with the product or service that you sell; however, you must enjoy aspects of the business otherwise you won’t be motivated to give it 100% of your focus. And it will need a lot of your focus and energy, especially in the early stages!
To help determine this point, you could ask yourself the following types of questions:
What do you really like to do (in a business sense)?
Are you an ideas or action type of person? Or a bit of both?
In which 20% of your talents do 80% of your results come from?
In other words, where do your key skills lie?
It really all boils down to one question though – what are you really passionate about?
Niche
Another critical point which goes a long way to determining business startup success is your Niche. Without exception, the majority of successful business owners I know can tell you in a couple of sentences exactly what it is they love to do and why it has made them wealthy.
Without a precise understanding of your Niche your chances for success are greatly diminished. After all, its very difficult to hit a target which doesnt exist or to win a game when you dont know what it (winning) is.
Ask yourself what you are trying to achieve in this business venture:
Do you want to make quick cash?
Do you want to develop and grow a sustainable business?
Are you interested in high cash-flow or developing assets? Or both?
Do you have BIG aspirations or are you just looking to develop a hobby for some part-time cash?
Keep in mind that your Niche can always be adapted down the track if your situation or the market changes.
Leverage
You need to become a master of Leverage. It is one of the most powerful principles in business startup success. Everyone who is successful in business and life uses Leverage in some way.
To use the concept of Leverage you need to continually examine how you can access other peoples skill, resources and money more effectively. Furthermore, consider less obvious assets in business such as systems, marketing and time.
Leverage is about duplicating a high-value item or skill at a lower cost.
I will explore this topic in depth in future articles; however, at this point it is important to remember the following points:
Focus on Money-Making activities
Delegate to others as much as possible
By doing this you will see an immediate increase in your ability to work on your business startup success, rather than getting stuck in the day to day running of it.
Lateral Thinking shares an implicit relationship with Leverage…
Lateral Thinking
This is the concept of looking at things from a different point of view. You can increase profits significantly by doing simple things to Add Value in ways that others are not.
In other words, continually look at your business and ask yourself questions such as:
How can we do, what we do, better?
What do our clients want that they are not getting currently?
Could we use affiliate marketing to grow our business?
Do we currently use the internet to effectively market our business?
Could we join forces with another business to cross-promote our products?
Could we use our knowledge to create another product?
What I am suggesting here is to take some time out to brainstorm ideas around your business. This is a difficult for most small business owners to achieve because they see this as wasted and unproductive time – nothing could be further from the truth…
Some of the most successful companies in the world allow themselves and their employees lateral thinking time – Google and 3M immediately come to mind. Many of Google’s most successful products have originated from this process.
Now, Im not suggesting that you have to take 1 day a week (as Google does) to undertake this process – they have high operating margins and therefore significant leverage. However, I would encourage you to consider opening you mind for at least couple of hours each week to explore further opportunities.
I am sure that you will find it a valuable and profitable experience if you stick to it!
Testing
If you can start your business with a clear idea of how you are going to monitor your systems, resources and assets then you will be well ahead of the pack. When most business owners are confronted with questions about their average transaction value, sales conversion ratios, enquiry and lead generation rates – they come up with varying excuses or reasons as to why they dont know or have this vital information.
DONT MAKE THE SAME MISTAKE!!
You need to be able to calculate your ROI (Return on Investment) for everything that you do on a regular basis.
To do this develop a set of KPI (Key Performance Indicators) that are appropriate for your business – dont go overboard – just focus on the information that you need. Remember that 80% of your results come from 20% of your activities! The key is to discover the 20% and keep improving them…
The other benefit of testing is that it encourages us to recognise mistakes and move on – this is a vital part of the growth process. Without action, mistakes and growth we stagnate and/or wither at the vine!
Efficiency
Hard work doesnt guarantee success or profits – look at how wealth is apportioned in the world and this soon becomes apparent – 80% of the wealth is controlled by less than 10% of the population.
Personally, it took a long time for this penny to drop! The first business I owned was really just a job in disguise. I was caught in a trap that confronts many small business owners – working IN the business, rather than ON the business.
This is a critical distinction…
If significant profits and growth are what you desire, then it is critical that you become efficient and develop systems that will allow your business to work for you and not the other way around.
There is one key concept to remember when implementing anything…
Lag
Lag is the concept that you reap what you sew. In other words, if you follow the principles suggested here and persist – you will succeed!
However, your business life is going to provide you with numerous challenges and obstacles to overcome. The biggest difference between successful people and the rest is that successful people look at upsets as a chance to grow and learn rather than as failure.
When confronted by a setback, rather than giving into fear and quitting you must continue to persist. Why? Because if your principles are sound, all you have to do is keep adjusting your methodology until you have a formula for success.
You will have a much greater chance of success in business if you keep the principle of Lag in the back of your mind, stay focused and never give up!
Timing
Timing is an essential aspect of business ownership. It also shares a close bond with decision-making and action-taking. If you continually use Lateral Thinking and Testing then you will certainly discover further opportunities. The key to successfully implementing and taking advantage of these opportunities is Timing.
As the old sayings go:
If you wait too long, you may miss the boat… (e.g. someone else capitalizes)
If you jump right in you may get your fingers burnt… (e.g. misjudged market enthusiasm)
You need to find a middle ground when it comes to Timing, because it is very difficult to time things perfectly. Combine focused analysis, gut feeling, enthusiasm and decision making together and you will be well on the way to mastering Timing and the next Principle…
Action
Successful business owners are Masters of Action. They know that Action always beats inaction. They understand that it is better to try, make a mistake, refine and re-implement than to do nothing at all. Thats because in business:
INACTION = A SLOW DEATH
Unsuccessful business owners are Masters of Excuses. Fear provides them with an endless stream of seemingly logical reasons why they shouldnt act.
You need to make a decision right now – will you accept as doctrine your negative internal dialogue and the nay-sayers – or will you take chances and trust your experience?
I would suggest the latter…
To take Action, it is critical that you take responsibility for your situation. If you are not where you want to be, then justifying or laying blame on others will not solve the situation – it will just add fuel to your negative mindset.
A better way to respond is to focus on the gap – the 20% of activities in your business (or life) that will take you from where you are to where you want to be. Goal setting is one of the best ways to define the gap and taking Action is the best way to reduce it.
CONCLUSION: The most important Principle is that you should love what you do – passion and attitude will play a large part in defining your success in business. Therefore, ensure that you find a Niche that you are comfortable with. Apply the Principles outlined here, define your own rules and goals, and you will be well on the way to creating a successful and profitable business.
Make sure to check out my Facebook group if you want access to free training, tools, and resources you can use to grow your small business.
You can also comment below and tell me what strategies you are currently using for your own business startup success or contact me directly.
Have you had the misfortune of falling into bad credit? It should surprise and delight many of you, that small business loan for people with bad credit rating is available. You can get a small business loan despite bad credit.
Now the question arises; how can one avail of such financing. Well, read on.
To be frank, dont even think of going to banks. No bank worth its salt is going to touch your business loan if you have personal credit score less than a certain limit. But there is much more to the business lending than just banks.
For other types of lenders, your personal and business credit score will still be important parameters, but not to the same degree as the Banks.
Let me explain the credit score first. In short, your credit score is a numeric result generated from an algorithm used by the credit reporting agencies to determine an overall level of credit worthiness. The algorithm considers multiple factors that contribute to your overall score.
Bad credit score apart; the following can also make you a bad credit candidate:
NSF Checks
Recent Late Payments
Historical Bankruptcy
Loan Write-offs and Settlements
Credit In Arrears
Numerous Credit Inquiries
Remember; the more recent your repayment bouncing, the more difficult it will normally be for you to acquire any type of financing.
Take the following steps before applying for a small business loan despite bad credit:
Separate your business credit from your bad personal credit by forming a corporation or LLC (Limited Liability Company) and applying for an EIN (Employer Identification Number).
Use your EIN to establish a business credit profile completely separate from your bad personal credit.
Build a strong business credit profile while repairing your poor personal credit.
Prepare separate financial statements for your business.
Bad credit financing is usually provided by asset based lenders or cash flow based lenders.
Asset based lenders provide financing against assets such as: real estate or machinery.
Bad credit financing from asset based lenders can be very expensive. They are also very stringent in case of any miss in repayment: they seize the assets pledged as soon as possible as per law to liquidate them.
Success in securing bad credit financing depends on the following factors:
Your ability to explain; why and how the bad credit happened and how you tried to avoid all that.
Your short term ability to repay.
The type and quality of the assets and/or cash flow.
Business Cash Advance, a Good Alternative:
You can also opt for cash advance. Business cash advance is not a loan and the organization offering this cash advance gets their money from the credit card sales that the business does in a specific period, there by reducing the burden of paying back the loan, and the terms and conditions to qualify for such cash advance are also relatively simple.
There are quite a few organizations which provide such cash advances. Organizations like MerchantCashDirect usually provides cash advance for working capital needs. They more often than not, target specific industries. To expand the example of above mentioned organization: They seek to provide funds to people into restaurant, retail or service industry processing at least $4000 in credit card receipts per month.
You can not wish away your bad credit history, but you can improve your bad credit financing options by starting to pay your debts on time, thereby reducing as much debt as possible.
Need more help to grow your small business to profitability? Contact us!
Helping minority business owners and entrepreneurs to start or grow a business can help thousands of communities make the most of their resources. These often help impoverished areas to create or restore specific districts or neighborhoods. Minority business loans are readily available, and several programs are successfully funded privately or independently. Local funding is available through communities, local organizations, and redevelopment agencies.
A small business loan can be used for a variety of purposes, including business startup costs, purchasing inventory, working capital, and expansion. The business owner must approach a bank, financial institution, or other lending party to provide the funding for the project. Once a proposal and business plan is constructed, a strong presentation and commitment to goals is essential for growth. Minorities are encouraged to apply for business loans since they can help diversify and grow a specific community. The U.S. government encourages minority business growth so that the market and economy can stay competitive, offer unique products and services, and continue to promote growth within communities.
Banks and credit unions have a strong interest in investing in minority business loans as they have set aside funding specifically for minority communities and programs. Some banks have a substantial amount of funding available to authorize these loans, and may even meet a quota each year to accommodate for them. Small business loans for minorities by private banks can be secured or unsecured loans.
The minority business owner will need to establish their credit standing, outline how long it will take to pay back the minority business loan, and possibly offer some form of collateral. Co-signers are generally mandatory for an unsecured loan. Secured minority business loans require larger payments with a low interest rate. These will usually pay off the loan faster. An unsecured loan may have a higher interest rate, but will be much easier to obtain. Even if you have bad credit history in this case, you can still be approved for a minority loan that is guaranteed by a third party, or the government.
3 Organizations To Help Minority Business Owners Obtain Business Loans:
Southern California is home to Operation HOPE, an organization that distributes over $72 million in loans for minority homeowners and business owners. The website can help other states link up to key resources and influential group leaders in the area, and funds have been set up throughout different states for specific purposes.
The Minority Business Development Agency (MBDA)is run by the Assistant Secretary of Commerce under the Bush administration. Over the years this organization has helped thousands of startups, entrepreneurs, and visionaries, get their businesses off the ground through different government-based programs. The website also offers a lot of information on investing, wealth management, cost controls, small business operations, and minority resources in each community.
The National Minority Supply and Diversity Council (NMSDC) is a direct link between corporations and business, representing some of the biggest entities in the United States today. These companies extend various grants, programs and loan formats to small business that can contribute to startup capital. Minority businesses must register for the program and are reviewed frequently by corporate buyers.
Finding free government grant money can be time and labor intensive. Identifying the specific agencies and their purposes and specific subject areas can involve a lot of research work. Ads that claim the process is easy usually involve some sort of fraud and are untruthful. Government grant money will need to be answered for very specifically in today’s world.
Finding free government grant money can be time and labor intensive. Identifying the specific agencies and their purposes and specific subject areas can involve a lot of research work. Ads that claim the process is easy usually involve some sort of fraud and are untruthful. Government grant money will need to be answered for very specifically in today’s world.
Free government grant money does actually come with at a price. It does not have to be repaid, but it does come with strict conditions and restrictions on how it is spent. There are usually strong sanctions involved when used improperly as it is to be used directly for the outlined project and within the objectives of the funding source.
Locating funding for new and existing for-profit businesses is difficult. Typically, the free grant money is given to non-profit organizations that provide some sort of community social service function and benefit everyone. Despite this, it should be noted that there is still free grant money available from the government to entrepreneurs in competitive fields of business.
The U.S. government’s grant.gov website would be the best place to look to find available free grant money. Here, you will be able to find and apply for competitive grant opportunities from all federal granting agencies online. The application and approval process is automated to improve the process. The site also offers a free sign up for notification of future grant opportunities.
The government’s Catalogue of Federal Domestic Assistance (CFDA) is another source to find free available grant money. The CFDA.gov website lists government grants and assistance for homeowners, renters and even small business start-ups. Grant information is available by category, topic and key words. Eligibility requirements are listed for all grants to determine if you qualify for them.
Keep in mind while searching for free government grant money that it is not available in any specific area year-round. You must apply when advertised and meet a deadline if you want a chance to qualify for it.
Need more help to grow your small business to profitability? Contact us!
