Rejected for a Bank Loan? Here’s Where to Turn Next

Newly launched businesses that lack a track record of financial success may find it difficult to obtain loans from banks and credit unions. With half of all new enterprises folding within five years, financial institutions are often wary of businesses defaulting on their loans. Fortunately, budding entrepreneurs can take advantage of a number of other options to raise the capital they need. Here’s a look at some of the more popular lending alternatives available to small business owners.

1. Crowdfunding

As the name suggests, crowdfunding raises capital by pooling together contributions from a group of people, typically using websites like Indiegogo or Kickstarter to give an entrepreneur a platform on which to pitch his or her business idea and to collect the money. In most cases, contributions are made in return for some sort of reward related to the startup in question, like exclusive offers on whatever product or service the business provides. In equity-based campaigns, investors receive shares in the company in exchange for their investments.

Crowdfunding has gained steam over the past few years in part because it doubles as an excellent marketing vehicle for new businesses. Even if contributions to your cause aren’t overwhelming, a crowdfunding campaign can still spur discussion about your business. If you aren’t collecting funds as effectively as you hoped you would, you’ll know that your pitch requires some additional tweaks. This makes crowdfunding especially helpful for early-stage businesses and first-time entrepreneurs. Having lent over $700 million since its inception in 2010, Funding Circle is a crowdfunding platform that focuses exclusively on small businesses, making it a popular destination for budding businessmen and women.

2. Peer-to-peer (P2P) lending

Unlike crowdfunding, P2P lending more closely resembles the type of lending offered by banks and credit unions. Online platforms like Prosper and Lending Club help borrowers locate and get in touch with potential investors. Though P2P lending can be risky because loans aren’t insured, it can provide greater returns for investors and lower interest rates for borrowers. Investors don’t receive a stake in the business they’ve invested in, which makes this type of fundraising especially attractive to entrepreneurs who want to maintain complete control of their enterprise.

3. Lending circles

Lending circles provide yet another alternative for small business owners looking for cash. Groups are typically small, consisting of about six to 10 people. To begin with, the collective decides on a dollar amount to be raised every month—say, $500. Each participant pitches in equally to meet that sum, with one person receiving the entire amount each month until everybody has had a turn and all loans are paid off. Third-party facilitators, like San Francisco-based Mission Asset Fund, help gather the money and make sure members’ contributions arrive on time. Though small business owners will likely have to look beyond lending circles to raise all the money they need, this credit score-boosting mechanism can help loan applicants look much more appealing to banks and credit unions.

4. Asking family and friends

Small business owners with extensive personal connections may want to pursue crowdfunding campaigns that specifically target family and friends. Several websites are dedicated to helping entrepreneurs ask for funds from close acquaintances and loved ones. One such platform, TrustLeaf, provides all the necessary legal documents, keeps track of payments, and makes it easy to communicate with your potential investors. Using a website like TrustLeaf adds organization, structure and legitimacy to your fundraising campaign, and may make hesitant family members and friends more willing to pitch in.

5. PayPal and Square

Avid online shoppers will be familiar with paying for goods or receiving payments via PayPal or Square. It may come as a surprise to some, though, that both digital payment websites have ventured into the small business lending world. Business owners with over $20,000 in sales on PayPal over the last year qualify for the website’s Working Capital program to receive up to $60,000 in loans. Instead of asking for monthly repayments, PayPal simply takes a cut—typically between 10% and 30%—of the business’s daily sales.

On the other hand, Square’s service, called LendSquare, is much more rooted in traditional lending. Borrowers make monthly payments (with interest) to their investors. Like other crowdfunding websites, businesses use LendSquare’s website to promote their enterprise and attract investors.

6. Nonprofit organizations

Though primarily a source of microloans, nonprofit lending institutions can also serve as a helpful stepping stone in receiving more sizeable loans. While smaller organizations like the Colorado Enterprise Fund focus on developing small businesses in their states, larger nonprofit networks, like Accion USA, have offices throughout the country that provide loans to local businesspeople. Regardless of their size, most nonprofit lenders typically offer rates and terms that are more flexible than those found at banks and credit unions. Offering both loans and financial education, nonprofits like Accion tend to focus on low- to moderate-income business owners.

7. Turn to the SBA

For entrepreneurs that are steadfast on acquiring traditional loans from banks or credit unions, the U.S. Small Business Administration (SBA) can be a valuable resource. Although the SBA doesn’t directly provide loans, it places a government-backed guarantee on any loan that it helps facilitate, which offsets much of the risk for banks and credit unions. Businesses can apply for a range of loan programs through the SBA, including microloans of up to $50,000 for day-to-day expenses, equipment and renovation, and larger loans of up to $5 million for more ambitious projects, giving entrepreneurs plenty of choices. To find SBA-approved lenders near you, check out the SBA’s search tool.

Though it may sting, having your loan application rejected by a bank or credit union doesn’t have to spell the end of the road for your small business. With so many alternatives out there, your biggest challenge could be determining which funding option is best for your business.

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Helping hand image via Shutterstock.

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How to Keep Your Credit or Debit Card Information Secure

Hackers are getting smarter. Data breaches were up 30% last year, according to the Identity Theft Resource Center. Those incursions exposed nearly 92 million pieces of information. Your Social Security number, bank account information and credit or debit card numbers could have been among them.

Fraud and other misdeeds that can result from identity theft can wreak havoc on your credit score – a measure of risk used by lenders. A low score can make it hard to borrow money, get approved as a renter or land a new job. That’s why protecting your private financial information is an important part of managing your money.

The best defense is using secure account passwords and changing them frequently. But you also have to watch your accounts closely so you know right away if you’ve been victimized. Then it’s your job to respond quickly to alert your financial institutions, card issuers and other authorities.

Here are some steps to protect yourself from hackers and fraudsters:

1. Change your passwords – all of them, regularly. Change them at least every few months.


2. Monitor your credit, debit and financial accounts for activity you didn’t initiate.


3. Freeze compromised accounts by contacting the card issuer, bank or credit union involved as soon as you see suspicious activity.


4. Issue a fraud alert with Experian, Equifax or Trans Union, the three major consumer credit rating agencies. Fraud alerts are free, last for 90 days and prevent anyone from opening new accounts in your name.

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Infographic by Brian Yee

Credit card fraudster image via Shutterstock.

The post How to Keep Your Credit or Debit Card Information Secure appeared first on NerdWallet Credit Card Blog.

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How to Keep Your Credit or Debit Card Information Secure

Hackers are getting smarter. Data breaches were up 30% last year, according to the Identity Theft Resource Center. Those incursions exposed nearly 92 million pieces of information. Your Social Security number, bank account information and credit or debit card numbers could have been among them.

Fraud and other misdeeds that can result from identity theft can wreak havoc on your credit score – a measure of risk used by lenders. A low score can make it hard to borrow money, get approved as a renter or land a new job. That’s why protecting your private financial information is an important part of managing your money.

The best defense is using secure account passwords and changing them frequently. But you also have to watch your accounts closely so you know right away if you’ve been victimized. Then it’s your job to respond quickly to alert your financial institutions, card issuers and other authorities.

Here are some steps to protect yourself from hackers and fraudsters:

1. Change your passwords – all of them, regularly. Change them at least every few months.


2. Monitor your credit, debit and financial accounts for activity you didn’t initiate.


3. Freeze compromised accounts by contacting the card issuer, bank or credit union involved as soon as you see suspicious activity.


4. Issue a fraud alert with Experian, Equifax or Trans Union, the three major consumer credit rating agencies. Fraud alerts are free, last for 90 days and prevent anyone from opening new accounts in your name.

---

Infographic by Brian Yee

Credit card fraudster image via Shutterstock.

The post How to Keep Your Credit or Debit Card Information Secure appeared first on NerdWallet Credit Card Blog.

Source Article :http://bit.ly/1tqlgdn

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With Trust, Joint Checking Accounts Can Make Family Finances Easier

Whether you’ve just gotten married or have a college-bound child, a joint checking account can help you manage your shared finances. It can also spur healthy conversations about budgeting and spending habits. However, things can quickly sour if you aren’t on the same page with your financial partner, especially if he or she spends extravagantly while you aren’t quite as quick to whip out your wallet.

Here’s a closer look at some of the pros and cons of joint checking accounts, and three scenarios in which opening one would make sense.

After tying the knot

After the honeymoon, newlyweds returning to Earth may start focusing on shared expenses. Using funds from a joint account to pay household bills, rent and other shared expenses can add a much-needed degree of financial transparency to a marriage. Sometimes, though, that openness can lead to unexpected trouble.

“Because each person has unfettered access to the account, one person could fill the account while the other drains it,” says Andy Tilp, a certified financial planner and the founder and president of Trillium Valley Financial Planning in Portland, Oregon.

To avoid money-related arguments, some experts recommend retaining individual bank accounts when couples become partners.

“I tell my clients to set up three bank accounts – yours, mine and ours,” says Lisa C. Decker, a certified divorce financial analyst and the founder and chief executive of Divorce Money Matters in Kennesaw, Georgia. “This way, each spouse can contribute to the joint account for household bills and then put money into their own accounts to be spent on what they want without asking or getting approval from the other.”

Keeping an eye on your child’s finances

A joint checking account can be a great way to monitor your teenagers’ finances once they head off to college. While it’s best to avoid Big Brother-type surveillance, a shared account also ensures that your newly matriculated undergrad doesn’t have to navigate the complex world of personal finance completely alone.

“A joint account can help the student avoid a costly mistake like overdrawing,” says Curt Sheldon, a certified financial planner and the president of C.L. Sheldon and Co. in Alexandria, Virginia. “It also allows the parent to see where their money is being spent.”

A shared account can also simplify adding funds.

“If the account is at the same institution as the parent’s primary checking account, then it is quick and easy to add funds,” Tilp says. “This can be done online on an as-needed basis, or as a regular payment.”

If you want your child to learn financial independence, though, avoid becoming his or her personal bank. Make clear that there’s a limited amount available and you won’t refill the account every time funds run low. This will help your teen learn the importance of financial restraint and living within a budget.

Helping out a parent

Keeping track of bills and credit card statements can become difficult as people grow older. Joint checking accounts can make it easier for adult children to help their parents manage their finances. As with any shared account, establishing trust is important.

“The aging parent must be able to trust their son or daughter,” says Larry McClanahan, a certified financial planner in Portland. “If the adult child is a spendthrift, those joint checking assets can legally be spent down to nothing.”

Opening a joint account

Once you’ve decided that a joint checking account is right for you, opening one is fairly straightforward. You’ll need the same information that’s required when opening an individual account, including Social Security numbers and addresses for both parties.

Before taking this leap, be sure to engage in a frank conversation about spending expectations and monthly budgets. Once the account is established, maintain a regular dialogue about finances to avoid headaches.

---

Check and cash image via Shutterstock.

The post With Trust, Joint Checking Accounts Can Make Family Finances Easier appeared first on NerdWallet Credit Card Blog.

Source Article :http://bit.ly/1qHOp9x

Read More

With Trust, Joint Checking Accounts Can Make Family Finances Easier

Whether you’ve just gotten married or have a college-bound child, a joint checking account can help you manage your shared finances. It can also spur healthy conversations about budgeting and spending habits. However, things can quickly sour if you aren’t on the same page with your financial partner, especially if he or she spends extravagantly while you aren’t quite as quick to whip out your wallet.

Here’s a closer look at some of the pros and cons of joint checking accounts, and three scenarios in which opening one would make sense.

After tying the knot

After the honeymoon, newlyweds returning to Earth may start focusing on shared expenses. Using funds from a joint account to pay household bills, rent and other shared expenses can add a much-needed degree of financial transparency to a marriage. Sometimes, though, that openness can lead to unexpected trouble.

“Because each person has unfettered access to the account, one person could fill the account while the other drains it,” says Andy Tilp, a certified financial planner and the founder and president of Trillium Valley Financial Planning in Portland, Oregon.

To avoid money-related arguments, some experts recommend retaining individual bank accounts when couples become partners.

“I tell my clients to set up three bank accounts – yours, mine and ours,” says Lisa C. Decker, a certified divorce financial analyst and the founder and chief executive of Divorce Money Matters in Kennesaw, Georgia. “This way, each spouse can contribute to the joint account for household bills and then put money into their own accounts to be spent on what they want without asking or getting approval from the other.”

Keeping an eye on your child’s finances

A joint checking account can be a great way to monitor your teenagers’ finances once they head off to college. While it’s best to avoid Big Brother-type surveillance, a shared account also ensures that your newly matriculated undergrad doesn’t have to navigate the complex world of personal finance completely alone.

“A joint account can help the student avoid a costly mistake like overdrawing,” says Curt Sheldon, a certified financial planner and the president of C.L. Sheldon and Co. in Alexandria, Virginia. “It also allows the parent to see where their money is being spent.”

A shared account can also simplify adding funds.

“If the account is at the same institution as the parent’s primary checking account, then it is quick and easy to add funds,” Tilp says. “This can be done online on an as-needed basis, or as a regular payment.”

If you want your child to learn financial independence, though, avoid becoming his or her personal bank. Make clear that there’s a limited amount available and you won’t refill the account every time funds run low. This will help your teen learn the importance of financial restraint and living within a budget.

Helping out a parent

Keeping track of bills and credit card statements can become difficult as people grow older. Joint checking accounts can make it easier for adult children to help their parents manage their finances. As with any shared account, establishing trust is important.

“The aging parent must be able to trust their son or daughter,” says Larry McClanahan, a certified financial planner in Portland. “If the adult child is a spendthrift, those joint checking assets can legally be spent down to nothing.”

Opening a joint account

Once you’ve decided that a joint checking account is right for you, opening one is fairly straightforward. You’ll need the same information that’s required when opening an individual account, including Social Security numbers and addresses for both parties.

Before taking this leap, be sure to engage in a frank conversation about spending expectations and monthly budgets. Once the account is established, maintain a regular dialogue about finances to avoid headaches.

---

Check and cash image via Shutterstock.

The post With Trust, Joint Checking Accounts Can Make Family Finances Easier appeared first on NerdWallet Credit Card Blog.

Source Article http://ift.tt/1y39EC7

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7 Black Friday Credit Card Tips You Can’t Afford to Miss

Admit it: You can’t wait to get started on your holiday gift shopping. But if you’re planning to lean heavily on your credit card this Black Friday, the Nerds have a few important tips you can’t afford to miss.

Check out the details below for everything you need to know to swipe smart this holiday season (and beyond):

1.Shop with a rewards credit card to rack up serious points

The most important thing you can do to make the most of this holiday shopping season is select a card that provides a steady return on your spending in the form of points, miles, or cash back. Then, use it consistently. After all, you’re going to be shelling out big bucks anyway – you might as well get rewarded for it!

2.Use bonus malls to score even more rewards when you shop online

Apply Now

on Discover's

secure website

A lot of people forget about the online shopping portals (often known as “bonus malls”) operated by their credit card issuers. If you choose to make your online purchases through these platforms, you stand to earn even more rewards on your credit card spending.

One of the best bonus malls out there is the one operated by Discover, known as Discover Deals. If you use your Discover it® and shop through Discover Deals, you could score extra cash back, a statement credit, or instant savings at checkout. This is a great way to help your dollars go the extra mile this holiday season.

3.Use your Chase Freedom® - $200 Bonus for department store shopping

Apply Now

on Chase's

secure website

If you’re planning to buy a lot of gifts at department stores this Black Friday, be sure to use your Chase Freedom® - $200 Bonus. With it, you’ll earn 5% cash back until December 31, 2014 at select department stores, aw well as Amazon.com and Zappos.com (up to $1,500 spent). Plus, you’ll earn unlimited 1% cash back on all other purchases.

And don’t forget: If you also have the Chase Sapphire Preferred® Card, you can transfer all the Ultimate Rewards points you’re racking up with the Chase Freedom® - $200 Bonus over to it and cash them in for travel. Talk about a win-win!

4.Look into your credit card issuer’s extended warranty policy, pronto

Lots of people buy electronics on Black Friday, and many retailers try to hock extended warranty coverage at unsuspecting consumers. But it’s highly likely that your credit card already has your back. Every major network (Visa, MasterCard, American Express and Discover) offers some kind of extended warranty on most purchases made with the card.

However, exclusions apply and every card provides slightly different benefits. Consequently, placing a quick call to your card’s customer service line to see what it covers before you hit the mall is a smart idea.

5.Keep a watch on your balance

Holiday cheer can be a powerful force, but don’t let it cause you to overspend on your plastic. Using more than 30% of the available credit on any of your cards at any time during the month could do damage to your credit score. If you’re starting to get close to that threshold, make a payment as soon as you can.

6.Use a card that offers price protection to be sure you’re getting the best deal

According to a 2014 NerdWallet analysis, Black Friday “deals” aren’t always the absolute lowest prices of the season. To ensure that you’re getting the best price on every gift you buy, shop with a card that offers price protection. MasterCard, Discover, and Citi all provide the opportunity to get some a refund if an item you’ve bought with your card drops in price within a certain window of time.

Again, this functions slightly differently from card to card and there are restrictions to keep in mind. Be sure to read your plastic’s terms and conditions carefully for the ins and outs of its price protection program.

7.Be sure to pay your bills on time

If you’re juggling several credit cards to maximize rewards on your holiday shopping, take steps to stay organized. Missing a payment on one of them could cause your credit score to take a serious hit, so set calendar alerts for your billing due dates. This way, you’ll be getting the best deals with your cards and keeping your credit in good shape.

Black Friday image via Shutterstock

The post 7 Black Friday Credit Card Tips You Can’t Afford to Miss appeared first on NerdWallet Credit Card Blog.

Source Article :http://bit.ly/1BPn5uG

Read More

7 Black Friday Credit Card Tips You Can’t Afford to Miss

Admit it: You can’t wait to get started on your holiday gift shopping. But if you’re planning to lean heavily on your credit card this Black Friday, the Nerds have a few important tips you can’t afford to miss.

Check out the details below for everything you need to know to swipe smart this holiday season (and beyond):

1.Shop with a rewards credit card to rack up serious points

The most important thing you can do to make the most of this holiday shopping season is select a card that provides a steady return on your spending in the form of points, miles, or cash back. Then, use it consistently. After all, you’re going to be shelling out big bucks anyway – you might as well get rewarded for it!

2.Use bonus malls to score even more rewards when you shop online

Apply Now

on Discover's

secure website

A lot of people forget about the online shopping portals (often known as “bonus malls”) operated by their credit card issuers. If you choose to make your online purchases through these platforms, you stand to earn even more rewards on your credit card spending.

One of the best bonus malls out there is the one operated by Discover, known as Discover Deals. If you use your Discover it® and shop through Discover Deals, you could score extra cash back, a statement credit, or instant savings at checkout. This is a great way to help your dollars go the extra mile this holiday season.

3.Use your Chase Freedom® - $200 Bonus for department store shopping

Apply Now

on Chase's

secure website

If you’re planning to buy a lot of gifts at department stores this Black Friday, be sure to use your Chase Freedom® - $200 Bonus. With it, you’ll earn 5% cash back until December 31, 2014 at select department stores, aw well as Amazon.com and Zappos.com (up to $1,500 spent). Plus, you’ll earn unlimited 1% cash back on all other purchases.

And don’t forget: If you also have the Chase Sapphire Preferred® Card, you can transfer all the Ultimate Rewards points you’re racking up with the Chase Freedom® - $200 Bonus over to it and cash them in for travel. Talk about a win-win!

4.Look into your credit card issuer’s extended warranty policy, pronto

Lots of people buy electronics on Black Friday, and many retailers try to hock extended warranty coverage at unsuspecting consumers. But it’s highly likely that your credit card already has your back. Every major network (Visa, MasterCard, American Express and Discover) offers some kind of extended warranty on most purchases made with the card.

However, exclusions apply and every card provides slightly different benefits. Consequently, placing a quick call to your card’s customer service line to see what it covers before you hit the mall is a smart idea.

5.Keep a watch on your balance

Holiday cheer can be a powerful force, but don’t let it cause you to overspend on your plastic. Using more than 30% of the available credit on any of your cards at any time during the month could do damage to your credit score. If you’re starting to get close to that threshold, make a payment as soon as you can.

6.Use a card that offers price protection to be sure you’re getting the best deal

According to a 2014 NerdWallet analysis, Black Friday “deals” aren’t always the absolute lowest prices of the season. To ensure that you’re getting the best price on every gift you buy, shop with a card that offers price protection. MasterCard, Discover, and Citi all provide the opportunity to get some a refund if an item you’ve bought with your card drops in price within a certain window of time.

Again, this functions slightly differently from card to card and there are restrictions to keep in mind. Be sure to read your plastic’s terms and conditions carefully for the ins and outs of its price protection program.

7.Be sure to pay your bills on time

If you’re juggling several credit cards to maximize rewards on your holiday shopping, take steps to stay organized. Missing a payment on one of them could cause your credit score to take a serious hit, so set calendar alerts for your billing due dates. This way, you’ll be getting the best deals with your cards and keeping your credit in good shape.

Black Friday image via Shutterstock

The post 7 Black Friday Credit Card Tips You Can’t Afford to Miss appeared first on NerdWallet Credit Card Blog.

Source Article http://ift.tt/1y39EC7

Read More