BelTowr Plots a Course to Build Small Businesses and Communities

Ryan Cave and Rajesh Krishnan converted their frustrations with banks into the motivation to start BelTowr, an online financial services provider designed for small businesses.

Tired of lenders who charge small business customers unreasonable checking account fees or penalize those who don’t maintain a minimum balance (and that’s if they can get a loan in the first place), the entrepreneurs developed a different model.

The company provides debit accounts for $10 a month and doesn’t charge customers “based on mistakes,” according to Cave, which may appeal to cash-strapped firms trying to survive and thrive.

They also share a dedication to giving back to their community as well, designating 20% of their monthly fee revenue to assist community projects.

Small businesses hit hard by the recent financial crisis and recession have been slow to recover, prompting questions about whether there’s a credit gap for the sector, according to Karen Gordon Mills, a senior fellow at Harvard Business School and the university’s Kennedy School of Government. In a July 2014 working paper, she said one answer may be the emergence of a “dynamic market of online lenders that are using technology to disrupt the small business lending market.”

BelTowr aims to enter the fray, describing itself as a provider of commercial banking services. The start-up, currently testing its products with initial customers, would join companies like OnDeck, Kabbage, Prosper, Lending Club, Fundera and Biz2Credit, according to Mills.

A commitment to community through its Something Better Fund helps to set belTowr apart from traditional banks, according to Cave. He elaborated on this and other aspects of the Portland, Oregon-based company’s business plan in a recent interview with NerdWallet. Here are some excerpts from that conversation:

Q: What is belTowr and how did it get started?

A: BelTowr is a nontraditional bank built for the sole proprietor and small business owner. We’re helping those caught between the needs/cost of a consumer and a commercial account by offering a service tailored to their business.

Q: How does belTowr work?

A: You can deposit in any way you prefer: ATM, wire, ACH, merchant account, etc. BelTowr issues you a personalized card to make purchases either point of sale or otherwise. We offer an intuitive web or mobile user interface for you to review statements and manage your money.

Q: Why focus on small business?

A: Small businesses are the backbone of the economy and are what create the culture of a neighborhood. Our mission is to empower a small business by creating a solution which is intrinsically good for it and the community it calls home.

Q: What makes belTowr special?

A: Our focus: Small business banking. Our fee structure: BelTowr’s accounts are very straightforward and highly transparent. Our accounts are $10 a month with no minimums/maximums and no fees based on mistakes. Our involvement in the community: From that $10 a month, $2 immediately goes to the Something Better Fund, which is used in conjunction with crowdfunding (for) community projects. It’s not based on the profit we generated that year, or how much is left after our executives are paid. It is part of our budget from day one, just like the electric bill or office lease.

Q: What are the biggest issues in small business finance?

A: Deception. They claim to be a partner to your business but set you up to fail using a friendly face to enforce deplorable policies. Small business owners generally don’t have the assets traditional banks value. BelTowr ignores the status quo to bring a useful and powerful tool to the small business owner while providing access to capital through carefully selected partners.

Q: How is belTowr funded?

A: We have been bootstrapping for 11 months and have reached a point where we need capital to move forward. We will be raising a modest seed through GoFundMe in a few months.

To find out more about belTowr, check out the company’s newsletter.

---

BelTowr founders Rajesh Krishnan and Ryan Cave/Photo courtesy of belTowr

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BelTowr Plots a Course to Build Small Businesses and Communities

Ryan Cave and Rajesh Krishnan converted their frustrations with banks into the motivation to start BelTowr, an online financial services provider designed for small businesses.

Tired of lenders who charge small business customers unreasonable checking account fees or penalize those who don’t maintain a minimum balance (and that’s if they can get a loan in the first place), the entrepreneurs developed a different model.

The company provides debit accounts for $10 a month and doesn’t charge customers “based on mistakes,” according to Cave, which may appeal to cash-strapped firms trying to survive and thrive.

They also share a dedication to giving back to their community as well, designating 20% of their monthly fee revenue to assist community projects.

Small businesses hit hard by the recent financial crisis and recession have been slow to recover, prompting questions about whether there’s a credit gap for the sector, according to Karen Gordon Mills, a senior fellow at Harvard Business School and the university’s Kennedy School of Government. In a July 2014 working paper, she said one answer may be the emergence of a “dynamic market of online lenders that are using technology to disrupt the small business lending market.”

BelTowr aims to enter the fray, describing itself as a provider of commercial banking services. The start-up, currently testing its products with initial customers, would join companies like OnDeck, Kabbage, Prosper, Lending Club, Fundera and Biz2Credit, according to Mills.

A commitment to community through its Something Better Fund helps to set belTowr apart from traditional banks, according to Cave. He elaborated on this and other aspects of the Portland, Oregon-based company’s business plan in a recent interview with NerdWallet. Here are some excerpts from that conversation:

Q: What is belTowr and how did it get started?

A: BelTowr is a nontraditional bank built for the sole proprietor and small business owner. We’re helping those caught between the needs/cost of a consumer and a commercial account by offering a service tailored to their business.

Q: How does belTowr work?

A: You can deposit in any way you prefer: ATM, wire, ACH, merchant account, etc. BelTowr issues you a personalized card to make purchases either point of sale or otherwise. We offer an intuitive web or mobile user interface for you to review statements and manage your money.

Q: Why focus on small business?

A: Small businesses are the backbone of the economy and are what create the culture of a neighborhood. Our mission is to empower a small business by creating a solution which is intrinsically good for it and the community it calls home.

Q: What makes belTowr special?

A: Our focus: Small business banking. Our fee structure: BelTowr’s accounts are very straightforward and highly transparent. Our accounts are $10 a month with no minimums/maximums and no fees based on mistakes. Our involvement in the community: From that $10 a month, $2 immediately goes to the Something Better Fund, which is used in conjunction with crowdfunding (for) community projects. It’s not based on the profit we generated that year, or how much is left after our executives are paid. It is part of our budget from day one, just like the electric bill or office lease.

Q: What are the biggest issues in small business finance?

A: Deception. They claim to be a partner to your business but set you up to fail using a friendly face to enforce deplorable policies. Small business owners generally don’t have the assets traditional banks value. BelTowr ignores the status quo to bring a useful and powerful tool to the small business owner while providing access to capital through carefully selected partners.

Q: How is belTowr funded?

A: We have been bootstrapping for 11 months and have reached a point where we need capital to move forward. We will be raising a modest seed through GoFundMe in a few months.

To find out more about belTowr, check out the company’s newsletter.

---

BelTowr founders Rajesh Krishnan and Ryan Cave/Photo courtesy of belTowr

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Chase Sapphire Preferred Raises Signup Bonus Spend Requirement

There’s been an important change to one of the Nerds’ favorite travel credit cards: You’ll now have to spend more to get the signup bonus with the Chase Sapphire Preferred® Card. For details about this shift and other important information about the card, take a look at the details below.

You’ll now have to spend more to get the Chase Sapphire Preferred® Card signup bonus

In November 2014, Chase announced it was raising the minimum spending requirement to receive the signup bonus on its popular Chase Sapphire Preferred® Card. Currently, the signup bonus is: Earn 40,000 bonus points after you spend $4,000 in the first 3 months. Previously, customers only had to spend $3,000 in that same timeframe to receive the points.

This change means that the Chase Sapphire Preferred® Card now has one of the highest signup bonus spending requirements on the consumer credit card market. However, keep in mind its bonus is also a big one – it amounts to $500 to spend on travel if you redeem through Chase Ultimate Rewards.

We still love the Chase Sapphire Preferred® Card – here’s why

Even though you now have to spend more to get the Chase Sapphire Preferred® Card’s signup bonus, it’s still one of the Nerds’ top picks. With it, you’ll earn 2 points for every dollar spent on travel and dining out, and 1 point per dollar spent on all other purchases. Generally, Chase Sapphire Preferred® Card points are worth one cent apiece. However, if you redeem them for travel through Chase Ultimate Rewards, the value of each jumps by 25%.

Also, you’ll have the option to transfer your points to several popular frequent traveler programs at a 1:1 ratio. If you’re good at hacking frequent flyer award charts, this feature could help you wring up to $.02 (or more) out of each point.

Plus, the Chase Sapphire Preferred® Card is a great choice for international travelers. The card comes chip-enabled and charges no foreign transaction fees.

Finally, the Chase Sapphire Preferred® Card carries an Introductory Annual Fee of $0 the first year, then $95. In short, it’s a high value card that all globetrotters should keep in mind.

Chase Sapphire Preferred® Card too rich for your blood? Here are a few alternatives

If the signup bonus spending requirement on the Chase Sapphire Preferred® Card is simply too high for you, there is a $0 annual fee version of the card that might be a good choice. With the Chase Sapphire® Card, you’ll earn 2 points per dollar spent on dining in restaurants and 1 point per dollar spent on all other purchases. In terms of a signup bonus, it offers: 10,000 bonus points when you spend $500 on purchases in the first 3 months from account opening - that's $100 in travel rewards when you redeem through Chase Ultimate Rewards(SM)!

Not interested in a Sapphire card at all? Here are a few alternatives:

Barclaycard Arrival Plus™ World Elite MasterCard®

Apply Now

on Barclays's

secure website

The Barclaycard Arrival Plus™ World Elite MasterCard® is another Nerd favorite in travel credit cards, and you’ll quickly see why. With it, you’ll earn 2 miles on every dollar you spend. Miles are generally worth $.01 apiece, but since you get 10% of your miles back when you redeem them for travel, the rewards rate is more like 2.2%.

Speaking of redeeming, the Barclaycard Arrival Plus™ World Elite MasterCard® provides a lot of flexibility. You’ll be able to book your travel as you normally would, then pay yourself back with your miles in the form of a statement credit. This means you can arrange your trip with any airline, hotel chain, cruise line or discount travel site your heart desires and still use your rewards.

If you’re planning a trip abroad, the Barclaycard Arrival Plus™ World Elite MasterCard® has your back. It comes chip-enabled with PIN capability, and charges no foreign transaction fee. This will make swiping overseas cheap and convenient.

This card also comes with a killer signup bonus: Earn 40,000 bonus miles when you spend $3,000 or more on purchases in the first 90 days from account opening. Its annual fee is $89 - Waived first year All in all, the Barclaycard Arrival Plus™ World Elite MasterCard® is a stellar card that we highly recommend considering!

BankAmericard Travel Rewards® Credit Card

Apply Now

on Bank of America's

secure website

The BankAmericard Travel Rewards® credit card is another great card for folks looking to minimize fees. With it, you’ll earn 1.5 points on every dollar you spend. Each point is worth $.01, but if you’re a Bank of America® banking customer with a lot of money saved, you could score a points dividend of up to 75% with the Preferred Rewards program.

Like the Barclaycard Arrival Plus™ World Elite MasterCard®, the BankAmericard Travel Rewards® credit card allows you to redeem your points for nearly any travel purchase in the form of a statement credit. Again, this provides a lot of flexibility and you won’t have to worry about pesky frequent flyer devaluations cutting into the value of your rewards.

What makes the BankAmericard Travel Rewards® credit card really special is its rare trifecta of benefits that international, budget-conscious travelers will enjoy: It comes chip-enabled with PIN capability, charges no foreign transaction fee, and carries an annual fee of $0.

Finally, this card also offers a modest signup bonus: Online exclusive 10,000 bonus points if you make at least $500 in purchases in the first 90 days- that can be $100 towards travel purchases. If you’re looking to maximize rewards and minimize costs, the BankAmericard Travel Rewards® credit card definitely fits the bill.

Spending more money image via Shutterstock

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Chase Sapphire Preferred Raises Signup Bonus Spend Requirement

There’s been an important change to one of the Nerds’ favorite travel credit cards: You’ll now have to spend more to get the signup bonus with the Chase Sapphire Preferred® Card. For details about this shift and other important information about the card, take a look at the details below.

You’ll now have to spend more to get the Chase Sapphire Preferred® Card signup bonus

In November 2014, Chase announced it was raising the minimum spending requirement to receive the signup bonus on its popular Chase Sapphire Preferred® Card. Currently, the signup bonus is: Earn 40,000 bonus points after you spend $4,000 in the first 3 months. Previously, customers only had to spend $3,000 in that same timeframe to receive the points.

This change means that the Chase Sapphire Preferred® Card now has one of the highest signup bonus spending requirements on the consumer credit card market. However, keep in mind its bonus is also a big one – it amounts to $500 to spend on travel if you redeem through Chase Ultimate Rewards.

We still love the Chase Sapphire Preferred® Card – here’s why

Even though you now have to spend more to get the Chase Sapphire Preferred® Card’s signup bonus, it’s still one of the Nerds’ top picks. With it, you’ll earn 2 points for every dollar spent on travel and dining out, and 1 point per dollar spent on all other purchases. Generally, Chase Sapphire Preferred® Card points are worth one cent apiece. However, if you redeem them for travel through Chase Ultimate Rewards, the value of each jumps by 25%.

Also, you’ll have the option to transfer your points to several popular frequent traveler programs at a 1:1 ratio. If you’re good at hacking frequent flyer award charts, this feature could help you wring up to $.02 (or more) out of each point.

Plus, the Chase Sapphire Preferred® Card is a great choice for international travelers. The card comes chip-enabled and charges no foreign transaction fees.

Finally, the Chase Sapphire Preferred® Card carries an Introductory Annual Fee of $0 the first year, then $95. In short, it’s a high value card that all globetrotters should keep in mind.

Chase Sapphire Preferred® Card too rich for your blood? Here are a few alternatives

If the signup bonus spending requirement on the Chase Sapphire Preferred® Card is simply too high for you, there is a $0 annual fee version of the card that might be a good choice. With the Chase Sapphire® Card, you’ll earn 2 points per dollar spent on dining in restaurants and 1 point per dollar spent on all other purchases. In terms of a signup bonus, it offers: 10,000 bonus points when you spend $500 on purchases in the first 3 months from account opening - that's $100 in travel rewards when you redeem through Chase Ultimate Rewards(SM)!

Not interested in a Sapphire card at all? Here are a few alternatives:

Barclaycard Arrival Plus™ World Elite MasterCard®

Apply Now

on Barclays's

secure website

The Barclaycard Arrival Plus™ World Elite MasterCard® is another Nerd favorite in travel credit cards, and you’ll quickly see why. With it, you’ll earn 2 miles on every dollar you spend. Miles are generally worth $.01 apiece, but since you get 10% of your miles back when you redeem them for travel, the rewards rate is more like 2.2%.

Speaking of redeeming, the Barclaycard Arrival Plus™ World Elite MasterCard® provides a lot of flexibility. You’ll be able to book your travel as you normally would, then pay yourself back with your miles in the form of a statement credit. This means you can arrange your trip with any airline, hotel chain, cruise line or discount travel site your heart desires and still use your rewards.

If you’re planning a trip abroad, the Barclaycard Arrival Plus™ World Elite MasterCard® has your back. It comes chip-enabled with PIN capability, and charges no foreign transaction fee. This will make swiping overseas cheap and convenient.

This card also comes with a killer signup bonus: Earn 40,000 bonus miles when you spend $3,000 or more on purchases in the first 90 days from account opening. Its annual fee is $89 - Waived first year All in all, the Barclaycard Arrival Plus™ World Elite MasterCard® is a stellar card that we highly recommend considering!

BankAmericard Travel Rewards® Credit Card

Apply Now

on Bank of America's

secure website

The BankAmericard Travel Rewards® credit card is another great card for folks looking to minimize fees. With it, you’ll earn 1.5 points on every dollar you spend. Each point is worth $.01, but if you’re a Bank of America® banking customer with a lot of money saved, you could score a points dividend of up to 75% with the Preferred Rewards program.

Like the Barclaycard Arrival Plus™ World Elite MasterCard®, the BankAmericard Travel Rewards® credit card allows you to redeem your points for nearly any travel purchase in the form of a statement credit. Again, this provides a lot of flexibility and you won’t have to worry about pesky frequent flyer devaluations cutting into the value of your rewards.

What makes the BankAmericard Travel Rewards® credit card really special is its rare trifecta of benefits that international, budget-conscious travelers will enjoy: It comes chip-enabled with PIN capability, charges no foreign transaction fee, and carries an annual fee of $0.

Finally, this card also offers a modest signup bonus: Online exclusive 10,000 bonus points if you make at least $500 in purchases in the first 90 days- that can be $100 towards travel purchases. If you’re looking to maximize rewards and minimize costs, the BankAmericard Travel Rewards® credit card definitely fits the bill.

Spending more money image via Shutterstock

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Small Business Jobs Show Slow but Steady Growth

Small business is a big deal in Texas.

Dallas, home to shiny skyscrapers, fanatical football fans and a thriving energy industry, is also leading the U.S. in small business job growth. The city was the highest-ranked metropolitan area on the Paychex-IHS Small Business Jobs Index in November. It’s the sixth time Big D has dominated the monthly list in the past nine months.

Houston came in second on the small business survey, followed by Seattle. All three cities have shown steady small business employment growth, with Seattle leading the pack with a 1.98% increase in small business jobs over the previous month.

Minneapolis came in fourth, and San Francisco rounded out the top five. Among 20 metro areas, only San Francisco showed a slowdown in job growth over the previous month, with a decline of 0.25% compared with October.

In terms of national trends, the upper Midwest had the highest index score and growth over the previous month, while the Pacific region’s rating declined more than any other part of the U.S., with a slowdown of 0.74% compared to October.

The index, which measures how many workers are employed by small businesses according to Paychex’s payroll data, includes scores for the 20 most populous metro areas in the U.S. Among those areas, half showed an increase in job growth and half showed a decline.

“With an index level of 100.73, small business employment continues to grow, but at a moderate pace, reflecting levels seen since 2012,” said James Diffley, chief regional economist at IHS, in a press release.

The November national index of 100.73 was a 0.11% drop from October. Compared to last year, the index has risen by 0.07%. The value 100 represents the level of small business employment in 2004, before the 2008 recession. According to the report, 15 out of 20 of the metros posted a score of 100 or greater, showing a return to pre-recession levels.

For many, the slow but steady increase in small business employment is encouraging.

“Even though the national index shows small business employment growing at a moderate pace when compared to earlier this year, the continued strong performance among certain regions, states and metro areas gives us reason for optimism,” Martin Mucci, president and chief executive of Paychex, said in a press release.

---

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Small Business Jobs Show Slow but Steady Growth

Small business is a big deal in Texas.

Dallas, home to shiny skyscrapers, fanatical football fans and a thriving energy industry, is also leading the U.S. in small business job growth. The city was the highest-ranked metropolitan area on the Paychex-IHS Small Business Jobs Index in November. It’s the sixth time Big D has dominated the monthly list in the past nine months.

Houston came in second on the small business survey, followed by Seattle. All three cities have shown steady small business employment growth, with Seattle leading the pack with a 1.98% increase in small business jobs over the previous month.

Minneapolis came in fourth, and San Francisco rounded out the top five. Among 20 metro areas, only San Francisco showed a slowdown in job growth over the previous month, with a decline of 0.25% compared with October.

In terms of national trends, the upper Midwest had the highest index score and growth over the previous month, while the Pacific region’s rating declined more than any other part of the U.S., with a slowdown of 0.74% compared to October.

The index, which measures how many workers are employed by small businesses according to Paychex’s payroll data, includes scores for the 20 most populous metro areas in the U.S. Among those areas, half showed an increase in job growth and half showed a decline.

“With an index level of 100.73, small business employment continues to grow, but at a moderate pace, reflecting levels seen since 2012,” said James Diffley, chief regional economist at IHS, in a press release.

The November national index of 100.73 was a 0.11% drop from October. Compared to last year, the index has risen by 0.07%. The value 100 represents the level of small business employment in 2004, before the 2008 recession. According to the report, 15 out of 20 of the metros posted a score of 100 or greater, showing a return to pre-recession levels.

For many, the slow but steady increase in small business employment is encouraging.

“Even though the national index shows small business employment growing at a moderate pace when compared to earlier this year, the continued strong performance among certain regions, states and metro areas gives us reason for optimism,” Martin Mucci, president and chief executive of Paychex, said in a press release.

---

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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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