Plastiq Review: Can Plastiq Really Simplify Your Finances?

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plastiq review

As you juggle numerous responsibilities, managing finances and making payments can often feel like a tightrope walk. This is where Plastiq comes into the picture. Plastiq is a platform offering financial services that promises to simplify bill payments and streamline financial transactions for both individuals and businesses.

In this Plastiq review, we will delve into the platform’s benefits, features, and more to help you decide whether it is worth considering or if you should explore other options. Let’s begin!

Contents

  • What is Plastiq?
  • Who Can Use Plastiq?
  • Features and Benefits of Using Plastiq
  • How Much Does Plastiq Cost?
  • Privacy and Security Concerns
  • Some Limitations and Other Considerations to Be Aware Of
  • Verdict

What is Plastiq?

Plastiq aims to streamline cash flow management for businesses (and individuals) by providing instant access to working capital. Utilizing the platform enables you to make payments with credit cards, even if the merchant or supplier doesn’t accept cards. This flexibility allows you to cover a variety of expenses, from rent to taxes, as well as supplier payments, while leveraging existing credit card rewards and favorable payment terms.

To use Plastiq, you’ll need to first sign up and verify your account. Additionally, you’ll need to add a payment method, such as a credit card, bank account, or debit card. Here’s a step-by-step guide to making a payment:

Input the payment details, including the recipient’s information and the amount.

Choose the recipient, who can range from contractors and government agencies to suppliers and landlords. Plastiq accommodates various payment types, including bills, invoices, and other obligations.

Select the payment method, typically a credit card such as Visa, Mastercard, Discover, or American Express—all of which Plastiq accepts. Alternatively, you can use debit cards, checks, or bank transfers.

After choosing the payment method, schedule the payment or set up recurring payments for your bills.

Once confirmed and scheduled, Plastiq will process the payment on your behalf, charging the amount to your credit card and any applicable fees. The payment is then automatically sent to the recipient via their preferred method, such as a physical check, wire transfer, or ACH transfer.

Track your payment status on the platform and access your payment history to maintain organized records of your financial transactions involving Plastiq.

Unlocking working capital while automating your payables operation can help you maintain a healthy cash flow. This saves you valuable time that would otherwise be spent manually entering bills and making individual payments. With Plastiq, you can pay your suppliers promptly using their preferred payment methods while choosing the one that best suits your needs.

Who Can Use Plastiq?

Plastiq can be utilized by a wide range of individuals and businesses, but it is particularly well-suited for the following:

Business Owners: If you operate a business and wish to leverage credit card rewards and benefits for your expenses, Plastiq is an excellent option. You can use it to pay for expenses traditionally not accepted via credit cards, such as utility bills, taxes, and rent.

Real Estate Investors: You can use a business credit card as a down payment to buy real estate by sending the money from your credit card to the title company for the closing. Many readers ask how to pull cash off credit cards and this is one option to do it.

You might also like: The BRRRR Method: A Real Estate Portfolio-Building Blueprint

Individuals: Plastiq is beneficial for individuals managing significant expenses. For example, real estate investors who need to make real estate-related payments can streamline their transactions with Plastiq while earning credit card points.

Small Business Owners and Freelancers: Whether you’re a freelancer or run a small business, maximizing cash flow is essential. Plastiq allows you to extend payment terms using a credit card, freeing up cash for other business needs while covering expenses on credit.

Individuals or Entrepreneurs Seeking to Streamline Payables: Simplifying payable processes is crucial in today’s fast-paced world. Plastiq’s integration with Automatic Data Processing (ADP), a leading provider of payroll and human resource management solutions, enables you to fund your business’s payroll with a credit card. The funds are then automatically processed through ADP’s payroll system, facilitating employee payments.

Merchants and Service Providers: Plastiq Accept, discussed below, allows users to receive credit card payments from customers. This service enhances transaction convenience for buyers and customers who prefer credit card payments.

Plastiq is an excellent option for individuals and businesses seeking to leverage their credit card’s credit line for various types of payments. It facilitates transactions where credit cards are generally not accepted.

Features and Benefits of Using Plastiq

Plastiq has a set of features for facilitating payments and managing cash flow, which include:

Plastiq Pay: Businesses and individuals can use Plastiq Pay to pay via credit cards. You can pay by card, such as your credit card, allowing you to fund payments automatically. These payments can be anything from vendor payments to payroll. This feature is particularly useful if you run a business and are looking to leverage credit card rewards. You can also use Plastiq Pay to extend your payment terms without needing the recipient to accept credit card payments directly.

plastiq-accept

Plastiq Accept: If you need to accept payments, Plastiq also has this feature for receiving payments from customers wanting to pay by credit card. Use Plastiq Accept so you can streamline the receivables process of your business. Accept is great for landlords, contractors, and other merchants or small businesses that do not usually take credit cards as a payment method.

If you wish to use both Pay and Accept, you can get more with Plastiq Connect, which is more comprehensive than the two products mentioned. There are also Pro and Enterprise plans, which you may be interested in, as they can benefit your business transactions. For a monthly fee, you can sync up your accounting software and make payments even more straightforward with scheduled bulk payments.

Plastiq offers plenty of benefits to its users, including payment flexibility. Users can pay bills and expenses with credit cards, manage their cash flow, and even leverage credit card perks, benefits, and rewards.

Plastiq also gives you more payment options in transactions where you typically cannot pay with a credit card. You can use Plastiq to pay for the following expenses:

  • Bills and utilities, such as gas, water, electricity, Internet, and phone
  • Rent
  • Mortgage
  • Tuition
  • Taxes, such as income taxes and property taxes
  • Government fees
  • Suppliers, vendors, contractors, and service providers
  • Subscription services, including subscriptions to streaming platforms, software, and gym membership
  • Business expenses, such as office supply and equipment purchases, as well as advertising and travel costs

Plastiq is not only for businesses but also for personal expenses. You can use it to pay for groceries, entertainment, charitable donations, and shopping.

paying vendors and credit cards with plastiq

Here is another reason why you will like Plastiq. Plastiq’s platform is easy to use and understand, even if you are a new user. The interface is uncomplicated, so you can complete the payment process in just a few minutes by providing the payment details and the merchant’s choice method.

One more benefit is that Plastiq prioritizes the security of the users. The platform has robust encryption and other security measures. That is to ensure your personal and financial data stays protected in every transaction. We talk more about this subject later in the article.

If you have a small business, you will surely benefit from Plastiq’s short-term financing offers, which typically come with extended payment terms. You can immediately get funding for lines up to $100,000, which you can pay for up to 90 days. If you are qualified and accept the additional review Plastiq requires for loans, you may be able to borrow more, even up to $750,000.

How Much Does Plastiq Cost?

Unfortunately, Plastiq is not free, but there is a free trial for the first 60 days when you sign up for either Pay or Accept. But free does not mean completely free because charges apply for all transactions done via Plastiq. You will have to pay a convenience fee, which depends on various factors, including the payment amount, recipient, and method. Don’t worry; you will know how much the fees will be before you complete a payment transaction. That way, you can cancel the payment if you are unhappy with the additional charge.

plastiq pricing

Plastiq’s pricing model, as mentioned, is based on a per-transaction fee. Let us break it down:

Plastiq Pay: Unlike some competitors, this service starts at a $0 one-time purchase, meaning you do not have to pay to subscribe. However, you will incur transaction fees every time you use your credit card to pay an expense or bill.

Plastiq Accept: There is also no subscription cost for the Accept service, but transaction fees apply whenever you use Plastiq to accept payments.

The transaction fee is typically a percentage of the total payment amount, although it can vary based on the payment method and recipient. You can expect to pay anywhere from 1.5% to 2.85% of the amount you paid the merchant.

Other fees you should know about include:

Credit Card Processing Fee: You have other payment options with Plastiq aside from credit cards. However, if you choose credit, the platform may charge an additional processing fee, which your credit card network or processor charges you. Note that this is separate from the transaction fee imposed by Plastiq. The processing fee depends on your credit card and may range from two to three percent of the payment amount, but typically around 2.90%

Domestic Wire Transfers: Sending money to anywhere in the US costs $5 to $8.99.

Currency Conversion Fee: If you plan to pay in another currency, you must be aware that you could be charged a conversion fee. Once again, this fee is based on the percentage of the amount of payment you need to make, covering the cost of converting your transaction into another currency. Expect to be charged anywhere from one to three percent of the payment amount for this fee, or $39, whichever is higher.

Late Payment Fee: Plastiq may charge you a late payment fee, which is generally assessed if the payment is not processed on time or if you fail to pay by the scheduled payment date. Not only that, you also ding your credit score. The good news is that Plastiq offers earning Fee-Free Dollars (FFDs), which are usable for making payments without extra fees. FFDs can be earned through referrals or promotions. However, you must use them right away as they expire after 90 days. You can prevent the expiration by simply earning more, so be sure to keep an eye on the expiration date.

Refund Fee: If you request a refund, you may be charged a refund fee. This fee may be deducted directly from the refunded amount, covering the cost of the transaction automatically.

Short-Term Financing: If you borrow quick funds from Plastiq, you will need to pay 2.75% up to 10.65% on top of the amount you borrowed. The great thing about this offer is that you can choose terms from 30, 60, to 90 days.

Be on the lookout for discounts and promotions, which may appear from time to time. These offers, which are advertised on Plastiq’s website or through promotional emails, can reduce or even waive transaction fees for specific payment types. Make sure to read the terms and conditions before participating.

ACH bank transfers, electronic funds transfers, and BillPay are provided for just 99 cents. Mailed checks cost about $1.49.

Privacy and Security Concerns

As a user relying on Plastiq to make or accept payments, you want to ensure the platform is secure. The good news is that Plastiq utilizes advanced encryption technologies to keep financial and personal user information safe during transactions. All transmitted data is encrypted to certify protection against unauthorized access and other potential security threats.

is plastiq secure

You will also not have any issues with regulatory compliance, as Plastiq meets industry standards and regulatory requirements for data privacy and security, such as the Payment Card Industry Data Security Standard (PCI DSS). The platform undergoes security checks and audits regularly to continue complying with those standards, ensuring the highest level of data protection for users.

Another way that Plastiq addresses common security concerns is that it only partners with trusted payment processors and financial organizations. All payments made through the platform are processed on safe and reliable channels to significantly reduce the risk of fraud. Plastiq also uses robust security measures, which help detect and prevent unauthorized and fraudulent activities.

Additionally, Plastiq has a transparent privacy policy outlining the methods of collecting, using, and storing users’ personal and financial information. This privacy policy provides all details, including data processing, as well as your rights and options.

Finally, the platform employs multi-factor authentication among its many other security measures to verify user identities. You may need to provide additional verification steps, including one-time passcodes sent to your mobile device or email address.

If you have other issues or require assistance, Plastiq offers dedicated customer support for all concerns, including security-related inquiries.

Some Limitations and Other Considerations to Be Aware Of

While you can get rewards when you use your credit card via the Plastiq platform, there are cases where the payment fee, which can be around 2.9%, is higher than any rewards you get.

Sure, you can use Plastiq for various transactions, including those where credit cards are not typically allowed. However, there are also numerous other products that you cannot use the platform for, such as investments and paying for credit card debts. Also, you can only make mortgage payments using a Diners Club Card, Discover, or Mastercard. As of February 2023, you can no longer pay with American Express.

It should also be noted that Plastiq filed for bankruptcy in Delaware in May 2023. The company is still operating normally but is restructuring.

Frequently Asked Questions

What is Plastiq?

Plastiq is an online platform that allows you to pay bills with a credit card.

How does Plastiq work?

Plastiq works by you entering information of legitimate businesses to receive payments from you. Plastiq will then charge your credit card (personal or business) and send a check or ACH directly to the business of your choosing.

How much does Plastiq Charge?

Plastiq charges a fee of 2.9% plus a small delivery fee. They have monthly plans ranging from free to $119/mo.

What is Plastiq used for?

You can use plastiq to pay bills (using your credit card) from vendors that do not normally accept credit cards.

Verdict

Plastiq may be the right option for you. If one or more of the following speak for you, it may be a platform to consider:

  • You need more time to gather cash but have credit available
  • You run a small business and are planning to pay vendors with a credit card
  • You want to accept credit cards for payment

Plastiq may not be worth considering for individuals, especially with the 2.9% credit card payment fee. This is especially true because credit card rewards are lower than the mentioned rate. Therefore, you lose money.

However, if you are a business (or even an individual) who requires assistance in financing a purchase or bill payment, Plastiq can benefit you. Don’t worry about not having immediate cash on hand, as you can get a few weeks to pay off your credit card balance and pay for your purchase with Plastiq.

As a small business owner, you also get several services that you may find interesting and worth exploring. For example, Plastiq Accept and Pay are services where you can accept payments and make payments, respectively. With Accept, customers can pay via credit card without worrying about merchant fees. You can also apply for short-term financing.

All in all, Plastiq is an excellent option for small and medium-sized businesses, thanks to its business-friendly features and services. It does help simplify your finances, from managing to making timely payments you can schedule. However, if you plan to use it as an individual wanting to take advantage of credit card rewards, you may want to look elsewhere.

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Melio Payments Review: Can It Make Business Payments and Getting Paid Easier?

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Melio Payments Review

Any business requires managing finances, but it can be challenging. With the complexities involving accounts payable and receivable, keeping up with the payments is often difficult. Thankfully, there are solutions that you can try to streamline your finances and take control of your cash flow. Consider looking into Melio Payments, a platform that offers a comprehensive range of features, from making bill payments to invoicing and payment processing.

In this review, we will explore the platform’s features, benefits, and workings. Read on to determine whether it is what you need to optimize your business’s financial operations.

Contents

  • What is Melio Payments?
  • Melio Payments Key Features and Functionalities
  • The Benefits of Using Melio Payments for Your Business
  • How Melio Payments Works
  • Accounting Software Integration
  • How Much Does Melio Cost?
  • User Experience and Reviews
  • Conclusion

What is Melio Payments?

Melio Payments is a platform created by a financial technology company with the same name. This platform is designed for businesses to manage their accounts payable and receivable processes. If you utilize the platform, you can take advantage of various features to help you manage your finances more efficiently.

Melio Payments Key Features and Functionalities

When you sign up for Melio Payments, you can get a suite of financial tools and services that make your accounts payable and receivable processes much more straightforward.

melio chose when and how to pay vendors

For example, Melio allows you to pay your bills electronically. You can accomplish this task using bank transfers or debit cards. The best part about this feature is that it does not require the merchant or vendor to accept electronic payments. You can pay through the payment method you choose without actually using it. This means you do not have to write and mail physical checks, which can save a lot of time and even decrease administrative overhead.

Here are other key features that you can get out of Melio Payments:

Invoicing: You can use Melio to create and send professional invoices directly to your customers using the platform itself. To do this, log in to your Melio account and go to the Invoices tab in the dashboard. From there, you can access the existing invoicing features, which include creating a new invoice. You can then fill in the invoice details, including the recipient’s contact information, date, and number. You can also add line items in the dashboard with their own costs and quantities. You can then set the payment terms for the invoice, including the payment method and due date. Before sending, make sure to review and confirm.

better cash flow

Scheduling of Payments Including Recurring Payments: Melio allows you to set up recurring and one-time payment schedules in advance conveniently. That way, you can ensure all your bills are paid on time. This feature also helps manage cash flow, as you can plan and be sure that the funds will be readily available when the due date comes. You can set up recurring payments, such as rent and utilities, on the platform. They will automatically be paid on a weekly or monthly basis.

Accounting Software Integration: You can use Melio together with your favorite accounting software platform. It is popular with Xero and QuickBooks, two of today’s most used accounting solutions. Melio allows you to sync your financial data between the accounting software platform and the payment platform. That way, these platforms can automatically update the payment information and invoices. This saves you time as you no longer have to enter financial data manually. The integration with Xero or QuickBooks and other accounting software will be further explained later in this blog.

Management of Your Vendor Transactions: Melio has tools that allow you to manage vendor transactions easily. These tools are designed to help you gain better control and visibility of your accounts payable. For example, you can use Melio to centralize vendor information on the platform. This means you can manage and track transactions when dealing with different vendors, as you can quickly add new vendors and update vendor details, among many other features.

Payment Tracking: A crucial feature that you can find on the Melio platform is payment tracking, which gives you a real-time glimpse of the status of the payments you have made. You can also look at your payment history in the dashboard, which has detailed records of your past payments, including payment dates, recipients, and amounts. Tracking of payment involves not just the past but also the future. You can have Melio give you payment reminders to stay on top of your payment obligations, helping you avoid penalties and late fees.

Melio is excellent for businesses with more than one department or user who may oversee the payment processes. The platform has customizable approval workflows where you can create custom approval chains that outline the approval sequence for your payments. It makes it easier for your departments or users to determine who should approve payments in the correct order to complete the process.

The Benefits of Using Melio Payments for Your Business

The primary purpose of Melio is to simplify accounts payable processes. It provides robust tools enabling users like you to create invoices, schedule payments, and manage vendors in just one simple and easy-to-use platform.

Here are the other advantages of using Melio for your business:

The ability to set up payment schedules helps improve your business’s cash flow management. By maintaining control over the timing of your payments, you can be sure that your bills are paid on time.

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The same feature as above also helps extend payment terms with contractors, vendors, or suppliers. That’s why payment scheduling is beneficial for your business: You can have more time to pay your bills while preserving working capital.

control payments

Unlike other platforms or methods of payment, you do not have to worry about paying your dues early. Early payment discounts from vendors may be available, and you can take advantage of them. These discounts can save money on your expenses, which is useful for improving cash flow.

Repetitive tasks are time-consuming. Eliminating them and relying on Melio for invoice creation and payment reminders can free up your employees’ time to focus on other strategic activities that can help drive business growth.

Melio makes invoice management easy. The platform allows you to create and customize invoice templates and include line items. You can also use Melio to specify payment terms, which makes it an excellent solution for your business and customers.

Apart from the benefits mentioned above, Melio Payments can lead to significant cost-saving benefits and improvements in efficiency for your business. For instance, you can save on administrative overhead by automating repetitive tasks.

Processes that may use paper can also be eliminated since Melio promotes the digitization of your accounts payable and receivable procedures. That means you no longer have to deal with paper-based checks, receipts, and invoices, should you choose to do so.

Late payments are a no-no for businesses, especially those wanting to save money. You can preserve your working funds by avoiding late fees and penalties due to missed or delayed payments.

Every business needs good relationships with vendors and customers to thrive. When you have streamlined accounts payable and receivable processes, you can forge stronger working relationships. That’s mainly due to your professionalism, which involves prompt payments and efficient invoicing. These can help improve communication and trust with other parties. It is one of the keys to building long-term partnerships.

Finally, the updated platform allows users to pay using bill-by-ACH bank transfer or card. Vendors are also no longer required to sign up, meaning you can pay them however they want with Melio.

How Melio Payments Works

Just like with any other payment platform, you must first sign up for an account here: https://app.meliopayments.com/register. Signing up is easy and takes only a few minutes. It only asks for your email address and password. You can also use your Google or Intuit account (for QuickBooks users).

sign up for melio payments

After verifying your email address and logging in to your account, the platform will ask you to provide your business information, including whether you are a small business that wants to use the platform to pay vendor invoices or an accounting firm.

tell us who you are

Aside from your email address, Melio also requires a phone number for verification and business information like business name, address, and industry. You can schedule a payment once you’re all set.

melio get setup

Before you can begin paying, you will be greeted with an empty dashboard.

melio pay vendors

One of the first things you must do is go to Settings and then the Payments and Billings section.

payments and billing - melio

Click Payment Methods, where you can manage all your linked accounts and add a new payment method. You can then customize your payment preferences and select your preferred payment method. Your dashboard is also where you can add vendors and customers, create invoices, and schedule and track payments.

Melio supports different payment options, accommodating almost every business need and preference. You can use it to pay merchants or get paid via:

  • Bank transfer (ACH
  • Debit card
  • Credit card
  • Check
  • Wire transfer

Accounting Software Integration

In the platform settings, you may want to link your accounting software to Melio.

link accounting software and sync and import

Doing so allows automatic financial data syncing between Melio and the accounting software, QuickBooks, Xero, or others. When you create invoices, they are recorded in the accounting software so you have updated and consistent financial records. The same applies to payments made through Melio, simplifying the process and guaranteeing all payments are documented automatically.

How Much Does Melio Cost?

Melio is free with no subscription cost. Here is an overview of the fees and prices you must be aware of:

  • Free standard payments via ACH bank transfer
  • $1.50 per check for a paper check
  • 1.5% (maximum of $50) for each instant payment made
  • $20 per transaction for international payments in US dollars
  • 2.9% processing fee for credit and debit card payments
  • International payments using Mastercard credit cards will carry a 2.9% fee on top of the $20 fixed fee.

User Experience and Reviews

Melio has a fairly good amount of satisfied and positive testimonials on many review sites:

GetApp: 4.2/5

get-app-reviews-of-melio-payments

TrustRadius: 3.9/5

melio review stars rating

Capterra: 4.2/5

reviews of melio from capterra

Trustpilot: 4.3/5

trust pilot reviews of melio

All in all, Melio has great reviews, mostly commending its customer service, bill pay with QuickBooks and convenience. The platform is easy to use and understand. Plus, you can talk to Melio’s support team via email, phone, or live chat. You can also speak to a dedicated account manager or read more about Melio through FAQs and the Knowledge Base.

Conclusion

Melio Payments is a comprehensive financial management platform for optimizing and simplifying tasks in managing and processing invoices and payments. It is a secure, user-friendly business solution with an intuitive interface and several useful features. With responsive customer support, multiple payment support, and integration with accounting software, Melio is certainly one of the top platforms for making financial management tasks easier.

Can you transfer a personal credit card to your business?

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can you transfer personal credit card to business

In the world of business, the lines between personal and business finances can sometimes blur. This is particularly true during the early stages of entrepreneurship. Many business owners rely on credit cards or funds to support their ventures. Unfortunately, this approach poses several challenges, especially relating to increased personal liability and potential tax issues down the line.

While it is true that you can use your personal credit card for business expenses, have you considered transferring personal debt to your business? This post explores the distinctions between personal and business credit and offers practical steps to transfer personal credit to your business effectively.

Personal vs. Business Credit: What are the Differences?

To understand the process better, let us quickly examine the differences between personal and business credit. Here are some facts about personal credit:

  • Used for personal expenses like buying a car and home
  • Personal liability for any debts incurred
  • Connected to the Social Security Number (SSN)
  • Reported to consumer credit reporting agencies like Equifax, TransUnion, and Experian
  • Credit scores range from 300 to 850
  • Subject to consumer protection laws, including the Fair Credit Reporting Act (FCRA) and the Fair Debt Collection Practices Act (FDCPA)

Meanwhile, here are some things to know about business credit:

  • Used for business expenses like purchasing equipment and inventory
  • Utilized for managing operational costs and cash flow
  • Tied to Employer Identification Number (EIN) or Tax Identification Number (TIN)
  • Liability for debts is on the business and not the individual owner
  • Reported to business credit bureaus like Dun & Bradstreet, Equifax Business, and Experian Business
  • Credit scores range from 0 to 100 (or 0 to 300, depending on the credit reporting bureau)

Payment history and length of that history, credit utilization, and types of credit used are some of the factors that affect both personal and business credit.

Can You Use Your Personal Credit Card for Business Expenses?

Keeping track of expenses can be challenging, so some people opt to use a personal card for both personal and business-related purchases. To address the question above, yes, you can use your personal card for business expenses.

You might choose to do so for several reasons, including the enhanced protection offered by the Credit Card Accountability Responsibility and Disclosure Act of 2009 (Credit CARD Act). This legislation provides better safeguards for cardholders by requiring written disclosures and imposing limits on fees and interest rates.

Why Transfer Your Personal Debt Over to Your Business

While you can use your credit card for business expenses, it lacks the same legal protections as business credit. If your company is set up as an LLC or a corporation, you automatically obtain legal protections based on your chosen business structure. However, intertwining your personal and business expenses can diminish or even nullify those protections you would otherwise enjoy.

If that’s not convincing enough, here are additional reasons why transferring personal credit to business is a smart financial move:

  • If there are ever any legal or financial issues, minimize your personal financial risk, even as the business owner.
  • Transferring personal debt to business credit helps establish your business’s credit profile and history, which is crucial for accessing credit lines and loans.
  • Business credit, when used for business expenses, aids in simplifying tax reporting. This activity can also maximize tax deductions, potentially reducing tax liabilities and taxable income.
  • Building strong credit for your business shows professionalism and credibility as it is a demonstration of how responsible and stable your business is. These traits are essential to other entities you will likely work with, such as suppliers, partners, lenders, and even your customers.
  • Separating business from personal credit allows access to more credit and financing options based on your company’s creditworthiness. That way, you do not have to rely solely on personal credit limits, which are often lower.

Creating a clear distinction between your personal and business credit profiles is significant in defining the company as a separate legal entity. By using business credit accounts, such as business credit cards or lines of credit, when incurring business-related expenses, you begin to build your company’s own credit history. However, just like personal credit, you should always make on-time payments and manage your business credit responsibly to create a positive credit history for your company.

How to Transfer Personal Credit to Business: The Different Methods

One standard method for transferring personal credit to a business is to apply for business credit cards, which should be under the business’s name. Doing so lets you establish your business’s credit history while separating its usage from your credit cards. Other ways to go about it include the following:

  • Applying for business lines of credit to access funds for your ongoing expenses
  • Applying for business loans from banks or alternative lenders when in need of funding for expansion and other more significant investments
  • Establishing trade credit accounts with vendors and suppliers, such as Net 30 vendors, that allow your business to make purchases on credit
  • Using alternative financing solutions specific to businesses, including merchant cash advances and invoice factoring
  • Exploring rental or lease agreements for vehicles, real estate, or equipment to build a credit profile

It may also be an option to cosign with a personal guarantee, mainly if you first must use personal credit to secure business loans or business credit cards. This method, however, involves personal credit. Nevertheless, it still contributes to building your business’ credit history.

With the choices above, picking the proper method for you may be a little confusing. The best way to do it is to select the option based on your creditworthiness and business requirements. For example, you can consider your short-term and long-term goals, such as whether you want to finance immediate expenses. Perhaps you wish to build credit for the future or invest in growth opportunities. Whatever your goal, you can align it with the best method for your business.

Other factors to consider include:

  • Your business’s creditworthiness
  • Payment history
  • Debt-to-income ratio
  • Credit score
  • Existing credit accounts, if any
  • Type and size of funding you need
  • Interest rates and fees
  • Repayment terms

The method you choose can impact your credit and liability as an individual, such as if it requires cosigning or a personal guarantee, so consider that as well. It is also helpful to assess the method’s long-term sustainability, especially if it will benefit your business’s financial growth and stability in the long run.

Steps to Take

Regardless of the method you see fit for transferring personal credit to business credit, the entire process involves a few steps, which often include the following:

If you have not done so, you will first have to incorporate a legal business entity. This means picking whether you have a partnership, a Limited Liability Company (LLC), a corporation, or any other type of business structure. You will also have to register it with the local and state government. From here, you can obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS).

You will then need to open a business bank account in the name of your business. This account will be used for all your business-related purchases and transactions. That way, there is a clear separation between your personal and business expenses.

The next useful step is to have a business credit card. Make sure that you do comprehensive research by comparing various card options. Don’t just look at offers from banks; explore other products from financial institutions and credit unions. When applying, you must use the legal name of your business and provide its EIN and other relevant information. Once you have a credit card, you should always pay your debt on time whenever you use it for business expenses. This is the key to establishing a positive credit history for your company.

business credit card

Some businesses may skip this step, but it is helpful in many ways. You need trade credit accounts as you continue to grow as a business. Be sure to foster relationships with trade partners and suppliers that use trade credit terms. You may also request to open a trade credit account under your business and use it for purchases on credit. Once again, you need to pay net 30 invoices promptly, which will show suppliers and vendors your creditworthiness. It also establishes trust, making it easier for you to access larger financing in the future.

You can apply for lines of credit or business loans from online lenders or banks using your business information. At this stage, you will typically be asked to provide financial data, such as a business plan, revenue, and cash flow. Once approved, you can use the lines of credit and loans for operational, investment, and expansion investments. Just like other debts, you should always maintain responsible repayment to help build your business’s credit profile.

At this stage, you can use the balance transfer option with the new business credit card / business line of credit to transfer your debt over. Some banks will also allow you to use “convenience checks” where you can write a check using your business credit card available balance to your personal credit card company to payoff the balance (and avoid a cash advance fee). You can also look into programs like Plastiq and Melio Payments to get cash off your business credit card.

Your work is incomplete, as you must still monitor and manage your business credit. It always helps to review your business credit reports regularly. If you find any errors, dispute them, as they will not fix themselves. You must ensure accuracy in reporting all your credit activities. Don’t forget to maintain a low credit utilization rate while avoiding accumulating excessive debt under the name of your business.

You might also like: Our Review of NAV, a service that boosts, tracks and monitors business credit scores

Using your business credit accounts involves being responsible for you to build a positive credit history for your company. As you keep your credit utilization low, it helps to increase your credit limits. Do so gradually as your credit history improves and your finances stabilize.

Common Pitfalls to Avoid

As the process ensues, you will realize that some difficulties may arise that could add to the challenge. Therefore, it is crucial to be on the lookout for the following pitfalls:

Many businesses fail to separate business and personal expenses, which typically leads to confusion and inaccuracies, particularly in their financial records. If there is no clear distinction between the two, tracking deductible expenses can pose a challenge, resulting in paying more taxes than you should. Always talk to a tax qualified professional when considering getting credit and moving debt from person to business.

Another issue is relying on personal credit when making business purchases. Although this is the more convenient option for some people, it hinders their businesses’ ability to build a strong credit profile.

One more problem is operating as a sole proprietorship without forming a legal business entity. Unfortunately, this approach exposes the owner to personal liability, especially given the rising business debts and obligations.

Not having a business bank account is another issue to address as you progress with the transfer. That way, you avoid complicating the accounting procedures and tax reporting, making it easier to track income and expenses.

Legal and Financial Implications to Consider

While there are benefits to transferring personal to business credit, it is vital to understand the potential legal and financial implications of the activity for both the business and the owner. These include the following:

You can get legal liability protection as a business owner when you move your personal credit to business credit rather than having it all in one account. However, you must operate as a single entity, such as an LLC, to shield your personal assets from possible debts and lawsuits.

Some lenders require a personal guarantee, particularly if you have a new business. Typically, this means you do not have an extensive credit history. With a personal guarantee, you should know that you, as the business owner, will be held liable for any financial obligations. That includes if your business defaults on credit payments.

While a personal credit to business credit transfer establishes a separate credit profile and history for your company, it can also result in negative credit activity. Late payments and other mistakes can adversely affect your business’s creditworthiness. You must continuously build and protect your credit profile so that you do not have to worry about accessing financing in the long run.

visa-credit-card

The transfer requires careful documentation and recordkeeping. Otherwise, you could risk complying with tax laws and missing proper business deductions.

Compliance with the rules and requirements is important when using business credit. It mitigates potential issues and ensures legal adherence, so be sure to be mindful of your business’s legal structure and registration. Your business must have the appropriate licenses and permits to operate legally. Talk to a representative or local authorities if you require more information.

Finally, it is valuable to understand the reporting requirements of business credit bureaus, such as Experian Business and Dun & Bradstreet. You should always have your business credit activity report accurately, including your timely payments and credit utilization, for a favorable credit profile and history.

Conclusion

Transferring your personal credit to business credit is a smart move that can yield significant benefits. The biggest benefit is the potential to improve your personal credit utilization, which can really boost your personal credit score a lot. With a distinct separation between business and personal finances, you can protect your personal assets while aiming to access financing options and build a good credit profile for your company. Take the first step toward building your business credit profile by signing up for free business credit training today!

FAQ

Why should I transfer my personal credit to my business?

It can boost your personal credit score by lowering your utilization. Plus establishing a separate credit profile for yourself and your business can give your business access to more financing options while protecting your personal assets against potential company-related debts and obligations.

How do I transfer personal credit to my business?

You can apply for business credit cards, open a trade credit account with a supplier, or apply for a business loan. Then use a balance transfer or convenience checks.

Why should you not mix personal and business credit?

It is often difficult to separate expenses, making it difficult to track expenses. This can also be a problem when reporting business credit activities. Not mixing personal and business expenses on your personal credit profile can also help with asset protection.

How do I ensure compliance with legal and regulatory requirements when using business credit?

It helps to be knowledgeable about the Truth in Lending Act and Fair Credit Reporting Act, as well as other regulations that may be specific to your business and industry. That way, compliance is much easier as you continue to grow your company. You should also spend the time to speak to an attorney and a tax qualified professional, like a Certified Public Accountant (CPA).

Office Garner Review – NET 30 Vendor

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office garner review

Office Garner is a small business that sells office materials and supplies under Net 30 terms. In other words, it offers a ‘buy now, pay later’ plan with the requirement of paying the owed amount by 30 days after purchase.

Before delving deeper into Office Garner, let’s first clarify what a Net 30 vendor is—precisely what Office Garner represents—and whether it aligns with your needs.

What is a Net 30 Vendor, and Who Needs It?

A Net 30 vendor can be defined as a service provider or supplier that sells goods or services with payment terms in which the invoice is due within 30 days of purchase. For a simpler description, purchasing from a Net 30 vendor means the invoice must be fully paid within 30 days.

Transacting with a Net 30 vendor can be quite beneficial for your business, no matter its size and industry. For one, the payment arrangement gives small business owners, especially startups, some flexibility when it comes to managing their expenses and cash flow. It also benefits freelancers and independent contractors, particularly those who require equipment, tools, or supplies for their projects.

Net 30 is also useful for nonprofit organizations, which typically operate on tight budgets. With the help of a Net 30 vendor, a nonprofit can procure goods or services without straining its finances.

Payment arrangements are quite common in the business-to-business environment (B2B). Companies can obtain the needed supplies even when they do not have the money to pay them. As long as you make timely payments, you not only create a good relationship with the vendor but also build and strengthen your business’s credit profile.

An Overview of Office Garner

Now that we have discussed what a Net 30 vendor is, it’s time to talk about Office Garner, which operates under the mentioned payment arrangement. Office Garner claims to offer top-quality office supplies, including calculators, mail supplies, workspace organizers, and more.

Office Garner has apparel for men and women, business cards for branding improvement, and houseware like blankets, pillows, and towels. You can also find drones, headphones and their accessories, smartwatches, and cell phone cases.

Office Garner promises a diversified selection of products you can purchase on the company’s website. Shipping is guaranteed to be quick, although results may vary depending on the location and other factors. Nevertheless, the company has a network of 52 warehouses, which is why it is easy for Office Garner to distribute products much quicker and more efficiently.

Details about Office Garner as a Net 30 Vendor

Applying for an Office Garner Net 30 account is fairly straightforward. Some of the required information you must provide includes the following:

  • Your business’s legal name and complete address
  • Phone number
  • Date the business was established
  • Your name if you are the owner
  • The type of organization

You may also have to provide your business’s website if you have any. Office Garner asks that you provide your Employer Identification Number (EIN), a common requirement with almost every Net 30 supplier or vendor. The EIN is a unique nine-digit number assigned to you by the Internal Revenue Service (IRS) for tax identification purposes.

It is optional, but we recommend that you give your Data Universal Numbering System (DUNS) to Office Garner. This unique nine-digit identifier from Dun & Bradstreet is mainly utilized for business credit reporting and risk assessment. Many lenders and suppliers, such as Office Garner, request that you provide your DUNS Number to evaluate your reliability and creditworthiness as a company.

Like DUNS, you can also provide your CreditSafe number so that your timely payments can be reported to the business credit reporting agency called CreditSafe Group. This organization provides business credit reports of companies across the globe, helping lenders or other companies assess the creditworthiness of potential business partners or customers.

Pros of Office Garner

There are a number of benefits that you can enjoy when you buy your office materials, supplies, or equipment from Office Garner. Here are reasons why you may want to pick this Net 30 vendor:

The requirements are pretty simple, including EIN and the fact that you have been operating for at least 30 days.

Your Net 30 account can receive a maximum of $1,500. This means you can access credit of up to $1,500 from Office Garner.

Under the Net 30 payment term, you have 30 days from the date of purchase to pay the invoice. For example, you purchased $300 in office supplies on October 1st. You should pay the amount owed or the invoice by October 31st; otherwise, you will be charged interest and penalties.

Office Garner does not require a personal credit check. That means the company will not assess your credit score or history when extending credit terms. This is beneficial for startups and businesses, as the owner’s credit history may not accurately represent the business’s creditworthiness or financial stability.

This Net 30 vendor does not need a personal guarantee from you, the person making the purchase. A personal guarantee is a promise that you will pay back the debt in case your firm cannot fulfill the obligation.

Perhaps the biggest benefit here, especially if you are a small business trying to build your credit profile, is that Office Garner reports consistently to various credit agencies every month. These agencies are Equifax Business, CreditSafe, Ansonia, and the National Association of Credit Management (NACM).

Cons of Office Garner

Here are a few reasons why Office Garner may not be for you:

Membership fee is $79 yearly. It’s not too expensive, but other Net 30 accounts are much cheaper.

Startups that have been operating for less than 30 days are not qualified.

Office Garner expects your business to have a clean or positive credit history. The credit report should not include derogatory items or negative marks, including late payments, bankruptcies, and defaults.

There is a minimum purchase amount, which is $45.

You can only use a portion of your credit limit for purchases. Therefore, even if you get approved for the highest credit of $1,500, you can only spend $600.

While your spendable credit may be low, the good news is that the credit amount you can use for purchases can increase after two orders. However, it is still essential to make sure that you always pay in full on time.

Is Office Garner for You?

Choosing Office Garner as your Net 30 vendor for office supplies and materials involves careful consideration. Make sure to identify your business needs. Are there products from this vendor that your business will benefit from? How frequently should you replenish those items?

Office Garner promises to provide quality goods at attractive prices. Before you pick this vendor, make sure that you compare item prices and quality from other similar companies. Also, read about what other customers say, mainly regarding delivery times. The last thing you want is a company that not only delivers late but is also costly.

If you believe that Office Garner is a suitable Net 30 vendor, you can apply for an Office Garner Net 30 account by going to https://officegarner.com/about-net-30/ Click on the “Apply for NET 30” button to start.

Building your credit profile is essential, which is why a Net 30 vendor’s credit reporting practices should be one of the factors you must consider. Office Garner reports payment history to business credit bureaus, including Equifax Business and CreditSafe. Fully paying the invoice on time can help build your business profile quicker than you expect. Be consistent with the payments and strengthen your profile by working with other Net 30 vendors that report to the credit bureaus.

If you are looking to fast-track building your business credit history, sign up and become a member of Business Credit Workshop. Here, you can access an easy and quick action plan to build or rebuild your business credit profile successfully.

How Long Does It Take to Build Business Credit? Fast Guide

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how long does it take to build business credit

Building business credit is essential. After all, it directly influences a business’s ability to borrow money or obtain products or services on credit. Regardless of the business size, companies must actively build and maintain good business credit to gain access to financing. Additionally, it aids in achieving favorable terms with suppliers, thereby establishing creditworthiness in the market or industry where they operate.

The question is: How long does it take to build business credit? Some say it takes about a year, while others may tell you it is quicker than that. Although the answers vary depending on who you ask, one thing is for sure: You must start building business credit as early as possible.

Why Build Business Credit

A survey in 2022 found that approval rates for business financing were extremely low during the pandemic. Even before that, almost 40% of businesses applying for financing did not get approved in 2020, according to the Federal Reserve statistics. Unfortunately, things did not get better, as it has become even more challenging for small businesses to access venture capital funding beginning in 2023. That’s why it is more important than ever to build strong business credit.

business owner building business credit

Strong business credit is achievable. Start with sufficient credit history; otherwise, poor or lacking history can become a major roadblock once you seek financing—even if it’s not a huge amount. With good business credit, your chances of getting approved for financing increase. That’s because it tells the lender that you have the ability and discipline to pay the amount you owe on time.

In general, many lenders look for a credit score of at least 500 for a business loan. However, this requirement increases depending on the institution you wish to work with. For instance, if you are applying for a business loan through a bank, you may need a credit score of about 700.

Here are the top motivating reasons to build your business credit today:

  • Capital Access: Potential investors like angel investors and venture capitalists are more likely to invest in your company if they see it has good credit. A good rating also opens your business to other financing options, including loans from traditional banks, alternative online lenders, and lines of credit.
  • Separation of Personal and Business Finances: This benefit is crucial for protecting personal assets if your business encounters legal issues or financial challenges. That’s why one of the very first steps you should take is to structure your business as a separate legal entity, like an LLC. That way, creditors cannot go after your personal assets, as they are not a part of your business.
  • Business Growth Opportunities: Because you have access to better credit terms and financing when you need it, you have the chance to seize options and openings for your business. Having a solid business credit profile allows financial flexibility, which is valuable in capitalizing on growth and expansion opportunities.
  • Cash Flow Management: Another benefit of good credit rating is that it improves cash flow, allowing you to have a fallback during economic downturns, for instance. You can get an influx of cash when needed to meet growing or continuous customer demand.
  • Negotiation Power: Gain leverage in contract and pricing negotiations with a good business credit standing. It’s helpful in industries such as professional services, where contracts are generally negotiated on an ongoing basis.

With the list above, you are probably ready to build your business credit. But how long will it take? And more importantly, how long does it take to build good business credit?

So, here’s our short answer to the question: It takes as few as 30 days to build business credit. However, building a solid profile with a positive and reliable credit history that reflects your business’s creditworthiness is a different kind of ballgame.

In order to have a solid profile, you must demonstrate responsible financial behavior, which includes making timely payments on loans and lines of credit. You must also never overspend, making sure to maintain a reasonable credit utilization level or the ratio of your business credit balances to your credit limits. In general, you should keep the credit utilization level below 30%.

Additionally, as a business, you most likely have several credit accounts. How you manage your various accounts can impact your business credit. Therefore, you should establish these credit accounts and use credit responsibly, which often involves monitoring the business credit report regularly. If there are any issues, they should be addressed immediately to maintain a solid credit profile over time.

Rapid Business Credit Boost in As Little As 30 Days

If you go to Google and search for “how long it takes to build business credit,” you will find a variety of answers, along with tips and how-to guides. Steps include formalizing your business and its structure, getting business insurance (if needed), licenses, and an Employer Identification Number (EIN), which you can use to apply for credit. You also need to open credit accounts that regularly report to business credit bureaus:

  • Dun & Bradstreet (D&B)
  • Experian Business
  • Equifax Business
  • Bureau Credit Reports, Inc. (BCR)

Perhaps the most important one is a Dun & Bradstreet number, commonly referred to as the DUNs number. This unique nine-digit number is generally used to identify a business. Typically, creditors ask for your DUNS number and EIN before agreeing to issue any business credit.

A checking account is also essential to building your credit profile. It’s important to maintain an adequate balance with no overdrafts and bounced checks to show creditors you are financially responsible. You should also network with banks and other professionals in the finance industry. This article provides a more detailed guide on how to build your credit.

Now, onto the more exciting part: building your business credit quickly. Here, I present two ways to fast-track building a solid foundation for your business credit.

First, register for relevant Net 30 accounts. These accounts let you purchase goods on credit, which you must pay back within 30 days. Suppliers demand that you have a separate Net 30 account. That’s why businesses usually only register with suppliers they use often. The significant requirement to bear in mind is to be consistent in paying off your Net 30 accounts on time. With this simple strategy, you don’t just accelerate your business credit building but also create a strong start for it.

Here’s how 30-day net vendors help with business credit building:

When you work with vendors who offer Net 30 terms, you establish trade references. These vendors typically report your payment history to Dun & Bradstreet, which helps you build a positive credit history for your company.

Let’s say you have business credit cards, loans, or other credit accounts on top of the trade references mentioned above. This means you have diversified your credit profile, which many creditors and lenders view more favorably. As a result, your business credit score has a bigger chance of seeing improvement within 30 days.

woman holding business credit card

As discussed in this article, you need to make timely payments with vendors, particularly those with Net 30 terms. Doing so demonstrates your company’s ability and reliability when it comes to managing credit. Pay invoices without delays consistently to strengthen your creditworthiness, and you will see a positive impact on your credit score in no time.

The next step is to expand your credit access by ensuring you have positive trade references with Net 30 vendors. This simple activity allows you to enhance your business’ creditworthiness, further increasing your access to credit and financing options over time.

Lastly, you need to build good relationships with vendors, starting with responsibly paying invoices on time and in full. That way, you get favorable terms and discounts that could benefit your business in the future, including contributing to your overall creditworthiness.

Utilizing 30-day net vendors is an effective strategy that could lead to a more solid business credit profile and establish a strong foundation for your company’s financial health and future.

Apart from 30-day net vendors, you can gain a quicker and bigger advantage when you have business credit cards. You have plenty of options here, but a top recommendation is a Nav Prime card. If you have doubts about whether this credit card is right for your business, this article can help you decide.

So, what exactly is the Nav Prime Card? It’s a charge card that costs $49.99 monthly. Although expensive, this card lets you manage your business credit, giving you access to reports each month. Unlike other credit cards, Nav Prime does not require an annual fee, personal guarantee, or security deposit. You can even link it to your business checking account, where you can add multiple cards and accounts with no extra charge.

Nav Prime issuers will generally report payment activity to business credit bureaus. That’s why it is significant that you make timely payments on the card, which is the key to establishing a positive payment history for your company. Paying on time and in full can benefit your business credit over time.

You are free to use your Prime card as needed. However, since the goal is to gain a positive impact on your credit history, it is advisable to keep your balances low. Consider your credit limit when determining the credit utilization ratio, which tells lenders, investors, and financial institutions that you can manage your credit. It also helps improve your credit score in the long run. Maintain a good credit utilization ratio for 30 to 90 days to build a strong profile.

The Nav Prime card aids in diversifying your business credit profile, which creditors and lenders always consider before approving financing. Having a diverse credit mix, which includes your Nav Prime card, other credit cards, trade lines, and loans, can help build your business credit within 30 days.

nav prime card

The next step is to aim for a credit limit increase. You need to demonstrate that you use your credit responsibly to get approved for an increase. As it improves your creditworthiness as a business, you may then become eligible for a card credit limit increase. The higher your credit limit, the better your credit utilization ratio. It then gives you more purchasing power, which is certainly beneficial for your business.

Nav Prime cards come with expense trackers, allowing you to monitor and manage your business spending. Use these tools for budgeting, controlling business finances, and financial planning.

Using the Nav Card, you can manage your business’ credit profile correctly and responsibly. Additionally, it enables access to business credit reports while gaining new trade-ins, which are vital to building positive business credit.

Building business credit is vital for every entrepreneur, operator, and owner. It establishes your business’ financial stability while allowing you access to financing and opening doors for long-term growth. With the tips above, you can build your business credit within 30 days.

Let us help you accelerate your business credit efficiently when you sign up for free business credit training today.

FAQ:

How long does it take to build business credit with net 30?

Using a 30-day net vendors report to Dun & Bradstreet can help build your business credit within 30-60 days. The more consistently you make purchases and pay invoices on time, the quicker you achieve a solid profile.

How long does it take for an LLC to get a credit score?

Engaging in credit-related activities, such as opening business credit cards and obtaining trade credit with your preferred suppliers, can help build a credit history quickly, often within 30 to 90 days.

How long does it take to build business credit to buy a car?

If you have proven your business’ creditworthiness by being consistent and responsible with your credit use, you can buy a car within 90 days or less.

What is the fastest way to build credit for an LLC?

Establish your business credit accounts, get a business credit card, pay on time, and work with vendors and suppliers who regularly report to credit bureaus to build credit fast.

Boosting up your business credit profiles takes a little bit of work, but it is very much worth it. Spend the time to create a strong foundation to take care of you and your business in the future.

Grab our FREE Report on How To Build Business Credit In Just 30 Days… Click Here

A Deep-Dive Credibly Review: Is Their Financing Right for You?

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Credibly is a direct lender of working capital loans and merchant cash advances, offering working capital loans, business lines of credit, equipment financing, and more. They promise fast, flexible loans, excellent customer service. Their biggest selling point is that you may qualify for a loan even if you’ve been in business for as little as 6 months and your credit score is as low as 500.

But is Credibly … credible?

We took a deep dive into the company to see if it’s a viable option for businesses like yours. In this post, we’ll summarize the credit products available from Credibly and share our other findings so you can decide if a loan from Credibly is a smart move for your business.

Here’s what we’re going to cover:

Table of Contents

What is Credibly?

Promising a “manic” focus on customer experience, Credibly provides short- and long-term financing to thousands of businesses around the United States. Rather than sticking with the standard criteria of time in business and credit score, they use an innovative technology platform to analyze a business’s total health in order to determine its eligibility for a loan.

This is good news if your business is young or if your personal credit score leaves something to be desired. However, that convenience comes with higher costs and more stringent repayment terms than you’d usually get from a traditional bank loan.

Who and Where is Credibly?

Credibly was founded in 2010 as RetailCapital LLC by Ryan Rosett and Edan King with a focus on providing affordable credit to small and mid-sized businesses. In 2015, it rebranded and now does business under the Credibly name. The company is based in Minnesota.

How does Credibly work?

You start the application process from Credibly’s website by entering some basic information about your business, along with your contact information. Assuming you prequalify, you’ll be contacted by a Credibly representative to go over your loan options, determine how much money you need, and what documentation you’ll have to provide.

In most cases, documentation will include:

  • Business lease agreement or business mortgage statement
  • Picture ID of all owners
  • Most recent business tax return (if you are applying for a loan above $100,000)
  • Bank statements for the last three months
  • Basic personal information, such as your social security number

Credibly promises application review within one business day and funding delivered straight to your bank account, meaning that you could get your funding in less than a week.

What types of funding can you get from Credibly?

Credibly offers a variety of credit products. I’ll go into the costs of each individual loan type in the summaries below.

One important thing to keep in mind is that all Credibly business loans require a personal guaranty by the majority principal(s) of the business. That means you, the individual, are personally responsible for the loan in the event that your business defaults.

Here’s a nutshell look at the financing types, terms, and costs (I explain more about factor rates below):

Working Capital Loans

Many new businesses or startups struggle with cash flow and maintaining adequate working capital. Working Capital loans are short-term loans ranging from $5,000 to $400,000 designed to cover the everyday expenses of running a business, such as payroll, marketing, purchasing inventory, and day-to-day operational needs. (Find out more about working capital here.) These short-term loans can help stabilize cash flow and meet immediate business needs.

At 6 to 18 months, Credibly’s Working capital loans repayment terms are relatively short. The good news is that they’re flexible and fast. Qualifying criteria include:

  • You’ve been in business for at least 6 months
  • You have a personal credit score of 500 or higher
  • You have at least $15,000 in average monthly bank deposits

The downside is that these advantages come at the cost of shorter repayment terms and higher costs. Credibly also requires a UCC-1 blanket lien, meaning that Credibly has the right to seize all pledged assets owned by a debtor in the event of a default. Repayments are made in the form of automatic withdrawals from your account on either a daily or weekly basis.

Unlike longer-term loans, the working capital loan doesn’t accrue interest. Instead, there’s a fixed “borrowing fee,” known as a factor rate, starting at 1.15. (To figure out the cost of your loan, multiply the amount of the loan by the factor rate.) Unlike an interest-bearing loan, factor rates prevent borrowers from making additional principal payments to save money on interest. You’ll also need to pay a one-time origination fee of 2.5% of the total loan amount, which will be deducted from your proceeds.

Business Expansion Loan

Credibly’s Business Expansion Loan provides larger-scale growth capital at longer repayment terms than the Working Capital Loan. It’s designed for business owners with a proven track record of success and financial security who are looking to make capital investments in their companies.  If you’re thinking about opening a new location, purchasing new equipment, expanding your team, or launching a new product, a business expansion loan might be what you need to take your business to the next level.

The Business Expansion Loan is a more traditional option than the Working Capital Loan. Like a regular bank loan, Business Expansion Loans accrue interest, which ranges from 9.99% to 36%. Your rate will depend on Credibly’s assessment of your business’s overall health. As with the Working Capital Loan, there is a 2.5% origination fee. Repayments are made weekly.

A 2.5% origination fee is okay, though you could probably find lower fees. And while 9.99% for the Business Expansion Loan isn’t bad, 36% is definitely on the high side.

Requirements for a Business Expansion Loan are more stringent than for a Working Capital loan. Qualifying criteria include:

  • You’ve been in business for at least 3 years
  • You have a personal credit score of 600 or higher
  • You have business revenue of at least $15,000/month, with an average daily balance of at least $3000

Credibly will almost certainly be faster than a bank loan, letting you take advantage of opportunities when they arise. On the other hand, the fixed weekly payments might be difficult for businesses with fluctuating revenue, and a business expansion loan from them will almost certainly be more expensive than a traditional bank loan.

Small Business Line of Credit

A business line of credit is similar to a credit card. It allows you to borrow up to a certain amount, or credit limit, as you need it. After you pay off what you’ve used, the full line of credit is available for you to use again, giving you access to funds when you need them without having to pay for what you don’t use. Typically, the interest rate will be lower than a standard credit card, however. (Learn about the ins and outs of business credit.)

Unlike a credit card, however, business lines of credit typically have lower interest rates and do not have mandatory monthly payments.

Credibly provides access to both secured and unsecured business lines of credit with a maximum credit limit of $250,000.

Minimum criteria for a Business Line of Credit from Credibly:

  • 560+ personal credit score
  • 6+ months in business – located in the United States
  • $50,000+ in annual revenue

Interest rates and funding amounts begin at 4.8% and are based on a review of your business, personal FICO score, and other factors. An origination fee may be required.

SBA Loans

The Small Business Administration (SBA) helps small businesses get funding by partially guaranteeing loans made by private lenders (Learn more about Small Business Loans here). They’re typically more difficult to qualify for but offer low rates and more favorable terms than other loans.  Credibly is able to provide access to SBA loans for working capital, debt refinancing, and equipment purchases. 

Minimum qualifying criteria include:

  • 620+ personal credit score
  • 2+ years in business
  • The business owner must be a U.S. citizen or legal permanent resident
  • Must not have outstanding tax liens
  • No bankruptcies or foreclosures in the last 3 years

Merchant Cash Advance

A Merchant Cash Advance (MCA) is a lump sum of funding is given to a business in exchange for an agreed-upon percentage of future revenues or credit card sales. It’s not a loan; rather, you’re selling a percentage of your future sales for cash upfront.

Generally, I don’t recommend merchant cash advances as they tend to be much more expensive than other financing options (you can read some of my thoughts on alternative financing here). Credibly’s factor rate for a Merchant Cash advance starts at 1.15, in addition to a 2.5% origination fee, and a monthly “administration fee” of $50.

Minimum qualifying criteria for a Merchant Cash Advance from Credibly:

  • 500+ credit score
  • 6+ months in business
  • $15,000+ average monthly bank deposits

Equipment Financing

If you need to buy or lease specific equipment for your business, equipment financing allows you to obtain the equipment you need now and pay for the asset over its lifetime. Examples include healthcare equipment, construction equipment, vehicles, kitchen equipment, and other large hard asset purchases that allow you to increase production and grow your business.

Unlike its other products, Credibly doesn’t state the terms, rates, or minimum qualifications for its Equipment Financing on its website.

Invoice Factoring

Invoice or accounts receivable factoring lets your business sell its invoices to a factoring company at a discount in exchange for upfront funding. The factor company then advances you up to 95% of the invoice amount, collects the money from the client, and sends any remaining balance to you, minus a fee.

This can help you maintain a positive cash flow when dealing with slow-paying clients. However, the overall costs may be higher than a traditional loan, and access will depend in part on your client’s creditworthiness.

What Do People Have to Say about Credibly?

At the time of writing, Credibly has 889 reviews on Trustpilot, 91% of which are either 4 or 5 stars. So far, so good. However, the 50+ one-star reviews are pretty damning. Many of the complaints claim that Credibly mishandled requests for PPP funding. Others complain of misleading information about fees, lack of communication, and poor customer service.

Lending Tree has 20 reviews, all of which are 4 or 5 stars. The Better Business Bureau, on the other hand, gives Credibly an A+ rating, but feedback consists solely of one-star reviews.

Of course, it’s human nature to share the bad news and be less interested in sharing a positive or even neutral experience. Furthermore, 2020 and the PPP loan situation was unprecedented, and Credibly certainly wasn’t the only company that had trouble keeping up.

I recommend reading both the good and bad reviews as part of your due diligence. Even more importantly, as with any loan agreement, you should read the fine print carefully and ask questions about anything you don’t understand. It’s clear from reading the reviews that many customers didn’t

fully understand the terms they’d committed to.

On average, Credibly loans will cost more than traditional loans, so understand what you’re getting into before you sign and make sure the extra cost is worth it to you.

Final Thoughts

Credibly’s rates, including interest, factor rates, origination fees, and an admin fee in the case of merchant cash advances are on the high side. If your business is young, you don’t have great credit, and you have at least $15,000 in revenue per month, Credibly could be a viable way to get the funding you need to stay in business or expand. It’s a relatively young company, but it’s legitimate, and it has enough happy customers that it’s obviously doing something right.

That said, I can’t really recommend loans through them unless your business is really on the ropes, and if it is, the personal guaranty could be really dangerous. Before committing to Credibly or any other company, you should shop around carefully for quotes. You can probably get comparable loans for less money, especially if you’re more established and/or have a solid credit score.

Even better, though, would be learning how to qualify for better funding options through business credit coaching. If you want to learn how to build business credit so you can obtain up to $100K in funding in 30 days, enroll in Business Credit Workshop today.

A Review of Alpha Funding Partners – Are Their Solutions Right for You?

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So you found a sweet investment property, and you’ve decided that a hard money loan is a good move for you. Great! You’ve taken some huge steps in the right direction to be a profitable real estate investor. If you thought the decision making was over, though, here’s the next step: choosing a hard money lender.

(If you’ve found yourself here and aren’t sure what exactly a hard money loan is, you can find more information on that here, in our guide on what is a hard money loan. To summarize, a hard money loan is a type of borrowing that includes a short, as in less than one year, contract and high interest rates.

This type of loan appeals to real estate investors who can’t get traditional loans either due to:

  • a lack of time
  • a less than perfect credit history
  • no other lender willing to lend on an asset that needs major repairs
alpha funding solutions reviews

This next step in your property investment process is where Alpha Funding comes in (Alpha has been renamed from Alpha Funding Solutions to Alpha Funding Partners). As your partner, Alpha Funding is a vital aid in the hard money borrowing process.

So, why use Alpha Funding as your hard money lending partner?

Well, as a company with over a decade in lending experience and $60 million in active loans circulating the United States, there are scant reasons not to.

With Alpha Funding, Enjoy Lower Interest Rates…

We all know that the ugliest feature of a hard money loan is its double-digit interest rates. These infamous rates can range from as low as 10% to, if the cards are playing against you, up to 15%.

These rates bloat the monthly payment of your loan to the point where essentially no principle is included in the payment.

For one of the most common hard money loans, a fix and flip, Alpha offers a much slimmer 8.99% starting interest rate, and a modest two points required at closing.

You can learn more about points in a hard money loan here.

…Barring a Few Other Requirements

This particular rate may sound like a dream come true, but there are setbacks. This loan’s attractive interest rate, called “The Luxe,” comes with a few prerequisites.

Borrowers hoping to utilize this loan through Alpha should have a track record of at least three successful fix and flips. Additionally, you should have a FICO score of at least 650 and a clean financial slate if you hope to land this funding through Alpha.

However, if you’re a newbie to the fixing and flipping world, Alpha can still help you with an interest rate of less than 10%. This loan, called “The Plush,” starts at 9.99% and requires no track record of rehabbing properties to get approval.

You might want to still double check your credit reports, though, because the step-down from The Luxe loan still requires a 600 FICO score, but will allow certain adverse background histories.

Also consider the down payment for this program, because the underwriter is going to want 10% of the purchase price as down payment. And keep in mind, you can use a business line of credit as the down payment.

Interest Offers for Other Hard Money Loans

Are you looking to fix up a property… and then hang onto it for yourself as a rental? Or maybe you want to breathe some life into a dusty old storefront? Alpha Funding has leading competitive interest rates for a full line of hard money loan types.

New construction is a popular venture funded by Alpha, with a moderate interest rate sitting at just below 11%. You’re going to need to have successfully funded a construction project with hard money before, and have a 620 FICO score ready.

Bridge loans are available for more diverse projects, including retail spaces, multi-family units, and more. The interest rate begins at 9.99% and no prior experience from the borrower is required.

If you’re a long standing Alpha customer, you can get 100% financing loans that entirely cover the purchase.

Custom Tailored Contracts? No Problem

Typically, hard money lenders and even traditional bankers want things done on their own terms, down to the payment date and the length of the loan. If you would benefit from lenders who are open to negotiations, Alpha Funding is the right partner for you.

Alpha’s superior loan officers can work with you to tailor a loan to your needs. With flexibility in loan terms, access to capital, and personalized experiences with underwriters and experts, your custom hard money goals can be addressed.

Alpha Funding Solutions isn’t Right for You If…

You have devastated, bottom of the barrel credit. To continue being able to do what the company does, Alpha Funding has to assess each potential borrower for risk to some degree. People who have serious infractions on their credit pose an uncertain future to lenders at Alpha Funding.

While your credit and financial history doesn’t have to be perfect, it definitely should not be a smoking ruin.

Alpha may also not be suitable for you depending on the state you live in. The company currently funds a select amount of states in the US, which you can find here.

Alpha Funding May be Right for You If…

Your credit and financial history is pretty average, and you are looking for a strategic guide through your experience as a property developer or rehabilitator. Having fixing and flipping experience is a plus in order to get lower interest rates, but not required to have a positive experience at Alpha.

If you happen to live in the northeastern area of the United States (Pennsylvania, New York, New Jersey, etc.), you may be lucky enough to be able to do business with your loan officer face to face.

Even if you’re out of headquarters’ immediate area, you’ll experience timely and personalized encounters with your hard money lending expert.

If you’re hoping for a quick approval process and need to close on funding within ten days, Alpha Funding is the partner for you.

Hard Money Looks Scary, But it Doesn’t Have to Be

The reputation of hard money is shady at best. You may be picturing a no-mercy shark of a man hunting down his borrowers and wringing them of every dollar, but the era of that type of hard money has come and gone.

Modern lending partners such as Alpha Funding are flexible and receptive individuals who have just as much of a hope to see their communities expand and succeed as you do.

If the world of hard money lending appears tangled and messy to you, Alpha Funding is here to simplify it for you.

Learn more about Alpha Funding Solutions and get a pre approval quickly here.

Hard Money Lending, Explained: A Start to Finish Guide

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When you hear the phrase “hard money loans,” you may think of a steely, shady man who hunts down borrowers and sharks them with high interest rates. Or, maybe you think of people in desperate times looking to make money fast.

While those financial predators did exist at one time, thankfully, that’s not so much the case anymore. Now, hard money loans typically come from investors or private individuals, as opposed to a traditional mortgage lender.

However, hard money lending still often gets a bad rep.

What is a hard money loan?

To put it in simple terms, when you take out a hard money loan, you’re borrowing money for a significantly shorter period of time, backed by real estate. This means that you may take out a hard money loan with a term of 12 months and use a house as collateral.

hard money loan

Typically, someone who takes out a hard money loan is paying only interest, or almost only interest with a small amount of principal, month over month.

You may be asking yourself why anyone would want to do that, right?

Well, hard money loans may be right for you if you know a thing or two about real estate.

What is Hard Money, and is it Safe?

The best way to explain hard money is to compare it to a traditional loan. Let’s say you’ve just paid in cash for a house that’s in rough shape; you want to fix it up and flip it for a nice profit, but you need some extra capital to do that. You may walk into, say, JP Morgan & Chase, sit down in front of a banker, and ask for a loan.

What happens next?

The answer is a whole boatload of things. Your banker will investigate your credit, inquire about your payment history, consider your debt to income ratio, and grill you about your other monthly expenses.

Traditional lenders look hard and long at the lender to decide if they’re an acceptable risk. Hard money lenders, on the other hand, don’t care much about how much of a risk you are at all.

Why?

The reason for that is because you’re backing up a hard money loan with the deed to your house that you just bought. So, they don’t care if your credit score is embarrassingly low or if you’re up to your eyeballs in debt.

As long as the house you’re backing your loan with is up to snuff, your hard money loan will be approved, because if you don’t pay, the lender will just take your house to call it even.

So, hard money loans are typically safe as long as you’re confident that you can meet your monthly payments.

What Should (and Shouldn’t) I Use a Hard Money Loan For?

Hard money loans can be used for just about any property, including single-family homes, multi-family homes such as duplexes and apartment buildings, commercial properties, undeveloped lands, and industrial properties.

You shouldn’t use a hard money loan on your own personal home, or a property that you plan on owning for an extended period of time.

Some hard money lenders have a property type preference. For example, some will only lend out funds for single family residential homes, while others specialize in apartment complex developments.

Additionally, most lenders will not lend on a property that the owner intends to occupy. You can find out why here.

What Extra Costs Should I Plan For?

To sum it up in one word: interest. Your hard loan lender will slap a hefty interest rate on your loan; usually a minimum of 10%, with a high of 15% and an average of 12%.

Comparatively, depending on your credit score, a traditional lender might grant you a more modest interest rate of anywhere between 2% and 5% lower.

hard money interest rates

You may be able to coax funding out of a hard money lender for the full price of the house and even some of the rehabilitation costs, but you may be spooked in turn by the consequent jump in interest rates, usually by up to 3%.

The good news there is that, in areas with a lot of hard money lenders, they have to compete with each other by vying for the lowest interest rates. If you’re lucky enough to live where there are plentiful hard lenders, you get the privilege of shopping around for the most agreeable rates.

A hard money lender is taking on a substantially higher risk by loaning money regardless of someone’s credit history. For this reason, they will also carve out a lender’s fee on your contract. These fees are usually referred to as points, and each point is typically equal to one percent of the loan.

These fees will surface around closing time. Lenders commonly require a payment of around three points at the time of closing.

Your lender will probably only provide you with up to 75% of what your collateral property is worth (or sometimes what it will be worth after repairs, also known as After Repair Value). So, for example, if you need $80,000 in funding and are backing it up with a house valued at $100,000, you’re going to need to have an extra $5,000 in assets ready.

It’s important to note that 75% is a pretty high maximum on that loan to value ratio, with most lenders averaging about 65% of your collateral’s value.

Why won’t they loan you the full amount of what your property is worth?

Well, if they have to repossess your collateral due to nonpayment, they need to ensure that they can break even with the sale of the property. Everyone needs to make money somehow, right?

Why Would I Take Out a Loan With Such High Interest?

If you are a highly involved real estate investor, or want to be, the answer may simply be because there typically isn’t time for traditional loans. If you don’t want to wait around to be put under the microscope by a bank or lender, the hard loan bandwagon may be right for you.

Another bonus for you is that, the more of a relationship you establish with a lender, the quicker the process tends to go.

While a traditional bank may not shell out any cash to you for over a month, even up to two months depending on how much they want to evaluate your financial profile, hard money can be granted to you within a week, sometimes even within a few days.

If you asked your bank for approval on a loan on the day you walk in, you will probably be shown the door. But some hard money lenders can issue a commitment / approval same day.

A lot of real estate markets are overly saturated with investors who all want to jump onto the same property, because they see the profit potential in renovating it. So, you may want to utilize a hard money lender when you need to act fast and beat several other bidders to the finish line.

You also may not want the loans you take out for flipping houses to intermingle with your personal credit score, which you’d need for your own mortgage and credit cards, etc. Since hard money lenders don’t really have an interest in your personal finances as much as they do the price tag on the house, your private money life is less likely to get tangled up in your real estate loans.

In fact, many hard lenders are known to not pull your credit history at all. In essence, you’re paying for the convenience of all of these characteristics of a hard money loan. Some investors have more financial room for that convenience than others.

How do I Know When Hard Money Loans are the Right Move?

If you are looking to purchase a property just long enough to fix it up and increase its market value (redoing floors, upgrading kitchen, residing, etc.), you probably don’t want to hang on to that house for more than a year at maximum. Hard money loans are usually granted for terms between one and five years (with one year being most popular).

This is when hard money lending may fit right in the cards for you.

You don’t want to take out a hard money loan for a property that may be in your hands for more than five years at an absolute maximum. So, when you buy a fixer upper, you need to take into account how much you can manage to get done in a short amount of time.

You may want to ask yourself these questions: Do I have the time to make these repairs happen? Do I have the labor and capital to get it done? Do I have the financial freedom to do all of this right now, or will I run out of funds? Will there be a prime selling market by the time I’m ready to flip this property?

If all the answers tell you to “pass go,” then you’re in the right place to get a hard money loan, spend six to eight months renovating the property, sell it, and repay your lender. Then, you have the freedom to pocket your remaining profit.

What Drawbacks Can I Expect with Hard Money?

The idea of a hard money loan may seem simple enough. The loan is secured by a property, not my personal credit, so it feels secure.

However, in order for your hard money loan to go right, everything else in your life has to go right. All of those questions above about the right factors that make it a good time for a hard money loan are assuming that the answers remain a constant.

You may have financial freedom now, but what if you lose your job? You may have the time now, but what if you get injured? Can you work hiring extra labor into your budget?

A hard money lender may not be very sympathetic to the unknowns of your life that affect your capability to renovate the house and pay off the loan. Before pursuing the funding, you may want to make sure that you have several levels of backup plans in place.

Your Hard Money Loan Greenlight Checklist

Signing on to a loan of this nature can be a hard pill to swallow. It is called hard money, after all. Here is a checklist to simplify the question of whether or not you’d benefit from this type of lending. If you’ve checked at least one of these boxes, hard money lending may be right for you.

  • Am I fixing up or flipping a house?
    • Do I have enough capital and assets to ensure this property is sold within a year (or five years at an absolute maximum?
    • Do I need money for construction or development of land?
    • Do I have poor credit, or a lack of credit, that may prevent me from getting a traditional loan?
    • Am I on a short timeline for this real estate investment, and don’t have time to wait around for a traditional lender?
    • Am I one of multiple bidders?
    • Will I profit enough from the sale of this property to pay back the loan?

Hard Money Plays for You and Against You

Yes, there’s a lot to consider when weighing the options of a hard money loan. You’d probably like to have the money right now, but can you afford the double digit interest rates? You just bought a property you’d like to turn around for a substantial profit, but can you ensure that the repairs are done in a timely window?

If you bought a fixer upper as hobby work and have a “I’ll get to it when I get to it” type of attitude, then a hard money loan would definitely play against you.

The good news is that there are many instances in which hard money loans play for you. You can get them quickly, they bypass your credit, and they tend to have more flexible negotiation terms than a traditional loan.

Once you take all of your investment goals and financial standing into account, you can decide if a hard money loan is right for you.

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