Start Guide to eCommerce Business Grants and Lending

The process of starting a business can be one of the best experiences in your life. Growing a business can be exciting too, because it means the idea you had initially thought of is paying dividends. But one of the biggest hurdles to both is money -- having the money to begin or expand. There's good news, by doing a bit of research there are small business loans and grants opportunities.

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

What are small business grants and loans?

Small business grants are essentially unpaid money. You don't need to pay it back, at all. However, most grant awards come with conditions and limitations on who is eligible to be awarded the grant and the way in which it is used. Additionally, they usually require an arduous application procedure in addition to they are tax-deductible. IRS typically considers grants as a business expense, meaning that it is tax-deductible.

A small business loan, also known as financing money granted to you, which will eventually be repaid, just like a house or auto loan. Certain small business loans cost an interest rate, while other loans have a fixed fee.

The types of small-business loans

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

• The term "debt finance" means an institution gives the borrower money, and then you are required to repay it generally with interest and in a time-bound manner. Sometimes they also want some form of collateral to ensure that when you fail to pay the loan, they will take the property you entrusted to them.

• Equity finance is when another business or partner gives you a loan in exchange to a share of the company. In most cases, you pay the lender a portion of your revenue going forward, and the business loses some autonomy as you've become a business partner. But the loan is typically free of interest.

• The term "revenue-based" financing is when you get an advance, however you pay it back as an amount of revenue instead of a set monthly payment. This will be discussed more in the future when we discuss Payments + Stripe Capital and Wayflyer.

But within those categories, you can find various variations. Most loans come from banks, but some may be made available through the government, and others are provided by private companies that specialize in the field.

Fundera provides a terrific tool to find out more information about small business financing. It also lists specific banks and the scores of credit they require. Some banks and lenders offer loan options for specific situations which may apply to your needs. You can find out more information about these financing options on Fundera:

• Equipment financing: a loan to finance the purchase of equipment
• Business loans for short-term duration: the perfect solution for fast turnaround and urgent needs
• Merchant cash advance: variation of credit based on revenue
• Start-up loans: funding available especially for businesses that are just starting out.
• Line of Credit for Business: a flexible loan that allows you to access funds when you need it
• SBA loans: Financing through the Small Business Administration, including microloans

Considerations to make when looking for small business financing

Three main aspects you want to think about prior to accepting or requesting an offer to take out a small company loan are ownership control, and risk.

For equity-based loans, as an example, you're able to give up certain percentage of the ownership stake in the business you run, and have less control over decision-making. But, these loans usually have no interest, so they're risk-free.

A loan for existing small businesses: introducing + Stripe Capital

The ability to finance can strengthen your business's growth, helping you expand and grow faster. With fast, flexible finance, Stripe Capital enables U.S.-based companies to finance growth and stabilize cash flow.

With and Stripe the loan offer is extended by Stripe's banking partner, Celtic Bank, based upon factors like your store's sales and history with Payments. It's not a lengthy process to apply and no consumer credit check.

Once you receive an offer by email or through your dashboard messages, you can pick the best size for you, and then apply within moments. In the case of approved businesses, money usually arrive in as short as a business day.

Contrary to many loans provided by conventional banks + Stripe Capital charges an unchanging fee and that fee never changes. That means there are no penalties for late payments or interest charges for you to worry about. Repayment also happens automatically, through a fixed proportion of your transactions and is dependent on your sales. A set percentage of your sales will continue to be taken out until the amount owed has been paid.

Consider, for instance, that you get a $20,000 loan from Stripe Capital, and they give you a 10% fee. This means that your total debt is $22,000 which amounts to a loan of $20,000 and a loan cost of $2,000.

In our example, Stripe Capital has established an interest rate for payback of 12%. This means that every morning, Stripe Capital will automatically take 12% of your earnings from your account this month, until the loan is paid off. This can be beneficial to the customer as it ensures that the amount you pay will rise and fall based on the amount of revenue you earn, meaning the amount you pay will not exceed your income. If you don't earn any revenue for a specific month, then there isn't a single payment.

Let's say that on one day, you generate the sum of $900 and the next day you're making $1,300. Your first day (assuming that you pay 12%) will be $108 and on the second day, the amount would be $156.

Another low-risk eCommerce business financing alternative: Wayflyer

Instead of interest Wayflyer has a fixed cost. Because it's a income-based loan, you have little possibility of falling into bankruptcy, since revenue-based loans make the payments every month in accordance with the amount of income that your business generates.

Types of small business grants

In contrast to loans, which are relatively easy to comprehend however, grants are hard to find and navigate through all the conditions and limitations.

There are generally two kinds of grants: those granted by government as well as private grants. Private grants usually come from foundations, businesses, or companies.

Grants are available for all kinds of very special situations and kinds of business that include:

• Awards for contest winners
• Companies that conduct scientific research
• Companies owned by women, minorities, or veterans
• Rural and agricultural businesses
• Health and beauty businesses
• and numerous others...

So when you go to an online site such as Grantwatch and Grantwatch, which charges a fee to access all information about a grant you'll see thousands of options that are updated regularly. Before your mouth starts watering, remember that you're unlikely to be eligible for a lot of these grants, because they can be specific to situations like those listed below.

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

Requesting small business grants

If you're planning to apply for a small business grant, the initial step is to narrow down your search around grants that you actually qualify for. You don't need to fill an extensive application form 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 a minority group, you'll be able to make an application for several small-business grants for minority businesses. There's a higher chance of success of winning them than general grantsbecause there'll be less competition, and because these grants were made specifically for companies like yours.

For existing companies, you'll want to have a well-written business plan because the majority of grant applications have very precise concerns.

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 effective business idea or expansion with a high-potential and that meets their reasons to grant the money. If you haven't revised your business plan for an extended period of duration, you might want to start by updating your plan.

If you have an existing company, you'll need up-to date information regarding the annual income, numbers of employees as well as your Employer Identification Number (EIN), as well as other essential information.

After that, write your pitch, and schedule time to respond to each of the questions specific to every grant application.

Small business loan applications

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

If you're seeking a federal small business loan like the 7a credit it will require a very different process as compared to the bank. In general, there are many more hurdles to go through to get government funding, and understanding the maze on the internet can be frustrating. Federal loans might be easier to get, so it may be a good alternative to a bank loan.

You've seen that there are quite a few kinds of small-business loans. The Fundera site lists particular banks and organizations that offer each type.

Prior to applying for small-business loans, you want to be aware of:

• Credit score
• What are the reasons you'll need the loan
• Your average monthly revenue
• The quantity you're after
• The plan you have for paying to repay it

Where to locate small-business grant and loan sources.

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

• Small business grants from Nav contest. It awards a $30,000 grant for small companies every quarter. It also awards a second-place grant prize, to any businesses that submit an application and get their prize. The grant is almost without limits.
• FedEx grant contest. FedEx runs their contest multiple times a year. the winners also receive an account for printing services as well as a site audit along with other perks. The highest prize is $50,000.
• Visa Global Innovation Grant. Visa's grant program has some additional requirements that the previous two contests and they pick the winners each year.
• Grantwatch and Opengrants. They are grant-finding companies that charge a fee which are excellent places to search for small, targeted grants which would otherwise be hard to find. It is possible to search for grants through the location of your choice, the type of grant, business nature, as well as other factors.
• US Chamber of Commerce grants. This is another great source for grants of all kinds. The site also has a comprehensive list of general small business grants which are open to all kinds of businesses, in addition to ones with narrower qualifications.
• self-employed grants for business. If you're self-employed and are a member of NASE and are eligible, you could qualify for a small business grant every month, for up to $4000.

Additionally, there are list of grants offered by Nav, Bench, and government agencies like the Federal government. Government grants have a lower probability of qualification, because they typically only fund very particular types of businesses.

What is what is the Small Business Association?

The SBA is an agency of the federal government that is a federal agency. With the name, you would think they would offer grants for... small-sized businesses. However, the majority of their funds is used to fund local and state programs that help small-sized businesses.

If you're looking for grants from the government for grants, you might get better results by using the state and local levels. The Economic Development Directory webpage won't direct you to grants, but it has a searchable and clickable map, by state, that can connect you to many local sources.

Small-business loan sources

There are a variety of options for business loans. federal S mall business loan program has a number of choices that won't be useful to the majority of companies. But the 7a loan program is probably the most well-known oneand merits consideration in case you are looking for small-scale company financing.

Go get 'em!

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

Here's what you can do:

1. Update your business plan.
2. Look through the options that may seem to be appropriate for your particular business circumstances.
3. Look for small business grants and financing alternatives that give you the chance of winning.
4. Talk to trustworthy advisors and mentors, if you have them.

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