Start Guide to eCommerce Business Grants and Lending

Beginning a new business can be an exciting moment in the course of. Expanding a business is too as it indicates that the initial plan is paying off. But one of the biggest challenges to both of them is -- having the funds to start or grow. The good news is, after a little research there are small-scale business grants as well as loan opportunities.

It's all you need is a bit of assistance in determining where to go. And for that, you've found the perfect place.

What are small business grant and loan?

A small business grant is basically cash for free. It means you don't have to repay it, never. But, the majority of grants have conditions and limitations on who is eligible to receive the grant, as well as how the money is used. Also, most grants have an arduous application procedure in addition to the IRS typically considers grants to be business income, meaning that it is tax-deductible.

A small business loan, or financing, is a loan provided to you and which you must eventually pay back, just like a house or car loan. Certain small business loans cost the interest while some have a fixed fee.

The types of small-business loans

Essentially, there are three kinds of small-business funding:

• A debt financing refers to the fact that an institution offers you money and you have to repay it, usually with interest according to a predetermined schedule. Sometimes , they will also request some form of collateral to ensure that when you fail to pay this loan, the lender can can seize the property you entrusted to it.

• Equity funding is when a different company or partner offers you money in exchange for partial ownership of the company. The typical scenario is that you'll be paying them a percentage of your income going forward. In addition, the business loses some autonomy as you now have a business partner. But the loan is typically interest-free.

• Revenue-based financing is where you receive an advance, however you pay it back as an amount of revenue, not a fixed monthly amount. This will be discussed more in the future when we discuss Payments + Stripe Capital and Wayflyer.

However, within these groups, there are various variants. Most loans come from banks. Some are offered by the government and some are provided by private companies that specialize in the field.

Fundera is a excellent resource to learn more about financing small-scale businesses. It also lists certain banks along with the credit scores they require. Some banks and lenders offer loan options for specific situations which may apply for you. You can find out more about each of these financing options on Fundera:

• Equipment financing: a credit that is used to pay for an item of equipment
• Short-term business loan: an alternative for rapid turnaround and urgent needs
• Merchant cash advance is a variant of revenue-based financing
• Startup loans: financing given especially for businesses that are just starting out.
• Credit line for business: a flexible loan that makes money available as you need it
• SBA loans: Financing via the Small Business Administration, including microloans

Things to take into consideration when seeking small-business financing

The three main factors you want to think about prior to accepting or requesting an offer for a small company loan are ownership control, and the risk.

When you take equity-based loans for example, you're able to give up some amount of ownership in the business you run, and have less control over decision-making. These loans typically do not have interest rates, which means they're risk-free.

Small companies: to introduce Stripe Capital

Finance can help strengthen and boost your expanding business by allowing you to expand and grow faster. With fast, flexible finance, Stripe Capital enables U.S.-based companies to invest in growth and stabilize the flow of cash.

With and Stripe, loan offers are offered by Stripe's bank partner, Celtic Bank, based on variables like the sales of your business and its history of payments. It's not a lengthy process to apply and no consumer credit check.

Once you receive an offer by email or through your Dashboard messages, you are able to choose the right size for you and submit the application in moments. In the case of approved businesses, money generally arrive as fast as one business day.

Unlike many loans offered through traditional banks, + Stripe Capital charges only one fee that is fixed, and that fee never changes. That means there are no interest charges or late fees that you have to fret about. The repayment process is also automated, by a set percentage of your transactions, and is dependent on your sales. A set percentage of your sales will continue to be taken out until the entire amount due is paid.

As an example, let's say you receive a loan of $20,000 through Stripe Capital, and they provide you with the option of paying 10. That means your total loan debt is $22,000 which represents a loan value of $20,000 and a loan cost of $2,000.

For our instance, Stripe Capital has established an interest rate for payback of 12.5%. That means every day, Stripe Capital will automatically subtract 12% of the revenue from your account for this month, until the loan has been paid in full. This is beneficial for you as it implies that your payment will rise and fall based on the amount of revenue you earn, meaning the amount you pay will not surpass your earnings. If you don't earn any revenue in a given month, there's no amount to pay.

Suppose one day you make $900 in revenue, and on the next day, you're making $1,300. The first day (assuming that the payment is 12%) is $108, then on the next day, it would be $156.

Another low-risk eCommerce business financing choice: Wayflyer

In lieu of interest, Wayflyer offers a flat fee. Because it's a income-based loan, there is no risk of going into default, because revenue-based loans make the payments every month, based on how much revenue your company earns.

The types of small business grants available

In contrast to loans, which are relatively easy to comprehend, grants can be difficult to identify and understand all requirements and restrictions.

There are generally two kinds of grants: grants from government agencies and private grants. Private grants usually come from foundations, businesses, or companies.

There are grants for any of the many very special situations and kinds of business, including:

• Award for winners of contests
• Scientific research companies
• Women-owned businesses are owned by minorities or veterans
• Rural and agricultural businesses
• Beauty and health businesses
• And many more...

If you visit websites like Grantwatch, which requires a cost if you want all the information about a grant you'll find a myriad of possibilities that are updated regularly. However, before your mouth begins flowing, keep in mind that you're not eligible for many of those grant opportunities, as they may be used for specific circumstances like those listed below.

Here are some sources to get more grants in the next few moments.

Small business grants for applicants

When you are applying to receive a small business grant, the initial step is to narrow down the grants you actually qualify to apply for. It's not worth filling with a lengthy application for a small business grant you have no chance of being awarded because you do not meet the criteria.

In the case of, say, being part of an ethnic minority that you belong to, you'll have the opportunity to apply for a number of minority small business grants. It's more likely to be successful of winning them than general grant because there'll have less competition because these grants were made specifically for small businesses similar to ones like yours.

For existing companies, you'll require a thorough business plan because the majority of grant applications ask very specific questions.

They would like to know why you need this grant.

They would like to be sure that they are funding a worthwhile business venture or expansion with strong potential and is in line with their motives for offering the grant. If you haven't updated your business plan for some time, you may want to get it done first.

If you're operating an existing company, you'll need updated information on the amount of revenue you earn each year, your number of employees, the Employer Identification Number (EIN), along with other fundamental information.

After that, write your pitch, then make sure you have time to address each of the questions specific to the grant applications.

Small business loan applications

The procedure for applying for a business loan is contingent greatly on the type of loan you're seeking.

If you're looking for a federal small business loan like one called a 7a loans is quite a different approach than going through the bank. There are usually more hoops to jump through to get government funding, and navigating the maze online isn't easy. But, federal loans can be easier to get, so it may provide a better alternative to a bank loan.

As you saw earlier, there are a variety of kinds of small-business loans. The Fundera website lists the specific institutions and banks that offer each type.

Before applying for small business loans, be aware of:

• Credit score
• Why you need this loan?
• Your average monthly revenue
• The quantity you're after
• The plan you have for paying the loan back

Small business-friendly places to look for grant and loan sources.

Get ready, because there's a deluge of resources for this. They differ in their ease of use and navigation.

• The Nav Small Business Grant contest. It awards a $30,000 grant to small-sized businesses each quarter, plus a runner-up grant award, to business types that apply and win their contest. The grant is almost without limits.
• FedEx grant contest. FedEx runs their contest multiple times throughout the year. the winners will also be awarded an account for printing services and a web site audit as well as other benefits. The prize for the top spot is $50,000.
• Visa Global Innovation Grant. Visa's grant program has some additional requirements in comparison to the other two however they select four winners every year.
• Grantwatch along with Opengrants. They are grant-finding companies that charge a fee that are great places to search for small, targeted grants that are otherwise hard to find. It is possible to search for grants by location, kind of grant, business nature, as well as other factors.
• US Chamber of Commerce grants. Another great resource with all kinds of grants. The site also has a comprehensive checklist of general small business grants available for all types of firms and also those with narrower qualifications.
• self-employed grants for business. If you're self-employed and are an NASE member NASE and are eligible, you could be able to apply for a small business grant each month, which can amount to 4000 dollars.

There are also lists of grants provided by Nav, Bench, and government agencies like the Federal government. Grants from the federal government have a less chance of being approved, as they typically only fund very particular types of businesses.

What about what is the Small Business Association?

The SBA is an agency of the federal government which, with such a title one would assume they'd provide grants to... small companies. However, the majority of their funds funds state and local programs that help small-sized businesses.

If you're looking for grants from the government for grants, you might get better results by using the state and local level. The Economic Development Directory website won't connect you with grants in the first place, however it will provide an interactive map searchable by keyword for each state. It will lead you to numerous local resources.

Small-business loan sources

The Federal mall mall business loan program offers a variety of options that aren't suitable for most companies. But the 7a program is probably the most well-known oneand is worth looking into in case you are looking for small-scale company financing.

Go get 'em!

If you're searching for an opportunity to provide your new or existing business an extra boost in revenue, we hope you're feeling more motivated, inspired, and informed.

Here's what you can do:

1. Revise your business strategy.
2. Explore the resources that seem appropriate for your company and circumstances.
3. Look for small-business grants and funding choices that offer you the chance of winning.
4. Talk to the most trusted mentors and advisors they are available.

 Please note that when using + Stripe Capital, all loans are issued by Celtic Bank, a Utah-Chartered Industrial Bank that is a member of the FDIC. All loans are subject to approval by the credit bureau.