Beginning Guide for eCommerce Business Grants and loans

Beginning a new business can be one of the best experiences in your life. Growing a business can be exciting too as it indicates that the idea you had initially thought of has paid dividends. But one of the biggest hurdles to both is money in the form of funds to start or grow. There's good news, with a little digging, you can find small business loans and grants opportunities.

You just need a little assistance in determining where to go. You've been to the right spot.

What are small business loan and grants?

Small business grants are essentially cash for free. This means that you do not have to pay it back, ever. But, the majority of grants have conditions as well as restrictions on who will receive the grant, as well as what the grant will be used. Additionally, they usually require extensive application procedures, and the IRS generally considers a grant to be business income, which means that it's taxable.

A small-business loan, which is sometimes referred to as financing, the amount of money granted to you, which will eventually be repaid as you would a home or car loan. Some small business loans charge the interest while some have a fixed fee.

Types of small business loans

In essence, there are three types of small business funding:

• The term "debt finance" means an institution gives you cash and requires you to repay the loan generally with interest and according to a predetermined schedule. Sometimes , they will also request some form of collateral to ensure that in the event of default on your loan they will take the collateral you have assigned to it.

• Equity financing is when another business or partner gives you a loan in exchange in exchange for a portion of ownership in the company. Usually you'll pay them a percentage of your revenue going forward, and the business loses some autonomy as you've become a business partner. The loan will typically be not a cost of borrowing.

• Revenue-based financing is when you get a loan, but you pay it back as a share of your revenue and not as a monthly fixed installment. This will be discussed more in the future when we discuss Payments + Stripe Capital and Wayflyer.

Within those categories, you can find various different types. A majority of loans originate from banks, but some may be made available through the government and some are provided by private companies that specialize in the field.

Fundera provides an terrific source to find out more information about financing small-scale businesses. They even list certain banks along with the scores of credit they require. Some banks and lenders offer loan options for specific situations that may be relevant to you. Learn more about each of these financing options at Fundera:

• Equipment financing is a type of credit that is used to pay for an item of equipment
• Business loans for short-term duration: an alternative for rapid turnaround times and for urgent requirements
• Merchant cash advance is a variant of credit based on revenue
• Startup loans: financing given specifically for new businesses
• Business line of credit A flexible loan which allows money to be accessed when the need arises
• SBA loans: financing via the Small Business Administration, including microloans

Things to take into consideration when seeking small-scale business finance

The three main factors you need to consider prior to submitting or accepting an offer of a business loan include ownership, control, and risks.

When you take equity-based loans for instance, you surrender certain percentage of the ownership stake in your business, and you have less control over decision-making. However, they typically do not have interest rates, which means they're risk-free.

A loan to existing small businesses: introducing + Stripe Capital

Finance can help strengthen your business's growth by allowing you to expand and expand faster. With fast, flexible funding, Stripe Capital enables U.S.-based companies to fund growth as well as help stabilize the flow of cash.

With and Stripe loans, you can get offered by Stripe's bank partner, Celtic Bank, based on factors such as the sales of your business and its history with Payments. It's not a lengthy process to apply and there's no credit test for consumers.

When you've received an offer through email or dashboard messages, you can choose the right size for you, and then apply within minutes. In the case of approved businesses, money usually arrive in as short as one business day.

Unlike many loans offered through traditional banks, + Stripe Capital charges one fixed fee, and the fee is never subject to change. It means there's no penalties for late payments or interest charges for you to worry about. Also, repayment is made automatically with a predetermined percent of transactions which is adjusted to reflect your day-to-day sales. A set percentage of your sales will continue to be deducted until the amount owed has been paid.

For example, suppose you get a $20,000 loan from Stripe Capital, and they offer you the option of paying 10. This means that your total debt is $22,000 which amounts to a loan of $20,000 with a loan fee of $2,000.

For our instance, Stripe Capital has established an interest rate for payback of 12.5%. That means every day, Stripe Capital can automatically subtract 12% of the earnings from your account that month until the loan is fully paid in full. This can be beneficial to you as it implies that your payment will rise depending on the amount of revenue you earn, meaning your monthly payments won't exceed your income. If you do not earn any income during a particular month, there's no any payment.

Imagine that one day you earn the sum of $900 then the following day, you're making $1,300. Your payment on the first day (assuming that the payment is 12%) would be $108, while on the following day, it would be $156.

Another low-risk eCommerce business financing choice: Wayflyer

Instead of interest Wayflyer has a fixed cost. And because it's a revenue-based loan, you're not at a chance of the position of default because these loans make the payments each month based on how much revenue your company earns.

Small business grants of various types

In contrast to loans, which are quite simple to grasp however, grants are hard to find and comprehend all conditions and limitations.

In general, there are two kinds of grants: grants from government agencies and private ones. Private grants are usually provided by businesses or foundations.

There are grants for any of the many very specific situations and business types which include:

• Award for winners of contests
• Research and development companies for scientific research
• Women-owned businesses are owned by minorities or veterans
• Agricultural and rural businesses
• Businesses in the fields of beauty and health
• There are many more...

If you visit a site like Grantwatch that requires a cost for all details of a grant, there are thousands of grants available, updated frequently. However, before your mouth begins flowing, keep in mind that you won't qualify for many of those grants, because they can be used for specific circumstances like those listed above.

We'll show you some resources for more grants in the next few moments.

Requesting small business grants

Before you apply to receive a small business grant, the first task is to narrow down the grants your company is actually eligible for. You don't need to fill with a lengthy application for a small-business grant if there's no way to be sure of being awarded because you do not meet the criteria.

For example, if you're part of an ethnic minority and you're a minority, you can apply for a number of minorities small business grants. You'll have a better shot at those than the general grantsbecause there'll have less competition since these grants were designed specifically for businesses like yours.

For existing firms, you'll require a thorough business plan, because most grant applications have very precise questions.

They would like to understand why you are in need of this grant.

They'd like to ensure that the money they give is going to an investment in a profitable business or an expansion that has a lot of potential and is in line with their motives for offering the grant. If you haven't revised your business plan for a long duration, you might want to do that first.

If you're operating an existing firm, you'll want updated information on your annual revenue, number of employees and your Employer Identification Number (EIN), and other basic data.

Then, nail down your pitch, then set aside time to answer each of the questions specific to the grant applications.

Small business loan applications

The application process to apply for a business loan depends greatly on the type of loan you're looking for.

If you're going for an federal small-business loan similar to one called a 7a credit it will require quite a different approach unlike the bank. There are usually additional hurdles to cross for government financing, and getting through the maze of online applications could be a challenge. However, federal loans may be more accessible to those who qualify and therefore could make a great alternative to a bank loan.

Like you have seen earlier, there are quite a few variations of small business loans. The Fundera website provides specific banks and entities which offer the various types.

Prior to applying for small-business loans, you want to know:

• Credit score
• The reason you require the money
• Your average monthly revenue
• The sum you're looking for
• The plan you have for paying it back

Small business-friendly places to look for loan and grants

Prepare yourself, for there are a myriad of sources in this regard. They vary in the ease of use and navigability.

• Nav small business grant contest. Nav awards a $10,000 grant for small companies every quarter, plus a runner-up grant prize, to any companies that participate and are successful in winning their contest. This grant comes with almost no restrictions.
• FedEx grant contest. FedEx has their grant contest running multiple times per year, and the winners will also be awarded a print services credit and a web site audit and other perks. The top prize is $50,000.
• Visa Global Innovation Grant. Visa's grant contest comes with some additional requirements in comparison to the other two and they pick the winners each year.
• Grantwatch and Opengrants. They are grant-finding companies that charge a fee that are great places to search for smaller, niche-based grants which would otherwise be difficult to locate. It is possible to search for grants for grants by location, type of grant, company type, and other parameters.
• US Chamber of Commerce grants. It is a great site for grants of all kinds. It also includes a great list of general small business grants available to most types of companies and also those which have more specific requirements.
• self-employed grants for business. If you're self-employed , and members of NASE and are eligible, you could be able to apply for a grant to small businesses each month, which can amount to $4,000.

Additionally, there are list of grants offered by Nav, Bench and even those of the Federal government. Grants from the federal government have a less chance of being approved, as they are primarily used to finance very particular types of businesses.

What is the Small Business Association?

The SBA is an agency of the federal government that is a federal agency. With a name like that, you would think they'd offer grants in support of... small-sized businesses. But most of their money goes to local and state-funded initiatives for small and medium-sized enterprises.

If you're looking for grants from the government for grants, you might have better luck looking at the state and local level. Its Economic Development Directory webpage won't direct you to grants, but it will provide an interactive map searchable by keyword, by state, that will lead you to a number of local resources.

Small-sized business loans

It is the Federal s mall's business loans program offers a variety of options that won't be useful to all businesses. But the 7a loan program is probably the most well-known option, and it is worth looking into in case you are looking for small-scale company financing.

Go get 'em!

If you're searching for ways to boost your business, whether it's new or established, a financial boost, hopefully you're now feeling a bit more inspired, motivated and well-informed.

Here's your plan of action:

1. Revise your business strategy.
2. Find resources that appear to fit your business and your current situation.
3. Find the smaller business grants and finance alternatives that give you an opportunity to win.
4. Speak to your the most trusted mentors and advisors they are available.

 Be aware that, with + Stripe Capital, all loans are made by Celtic Bank, a Utah-Chartered Industrial Bank, Member FDIC. All loans subject to credit approval.