Why This Might be The Best Time to Take Out a Business Loan

Owners of small businesses – take notice! 2016 is shaping up to be the best year in the last eight to take out a business loan. Why?

  1. Our economy is in better shape now than at any point since the Great Recession, meaning now is the time to expand your business.
  2. Interest rates remain low, despite the Federal Reserve’s recent interest rate hike.
  3. New alternatives to bank loans have become popular in the last year or two, providing competitive borrowing opportunities for businesses with less than perfect credit histories.
  4. Employment remains strong, putting more spending money into the pockets of Mr. and Mrs. John Q. Public.

A Good Time for a Good Loan

Given that the timing is optimal right now, your biggest decision should be where, rather than whether, to obtain a small business loan. In the first place, you want to approach a lender that is likely to approve your loan request. Unless you have spotless credit, that rules out banks. For most mere mortals, a better choice is a commercial lender like IOU Financial, where we approve 85 percent of loan applicants.

Does Anybody Really Know What Time It Is?

Timing is about more than choosing when to borrow. Timing also refers to the way you repay the loan. Nothing is scarier than the massive monthly payments that banks expect you to cough up. We have a better idea – we divide your repayments into daily installments that we automatically transfer out of your bank account every day. It’s convenient and much easier to budget for. Many of our customers tell us our terms are painless, and we believe them.

Of course, even daily payments can’t compensate for outrageously high interest rates. Guess what – our APRs start as low as 6 percent and are half of what you’d pay for a cash advance.

Cumbersome Bank Process

Banks set up insane obstacles to discourage all but the most dogged business owners from applying for a business loan. We’re talking about mountains of paperwork, never-ending credit and personal checks, and repeat requests for ever more information. We think this is nonsense, and offer instead a streamlined, online loan application process that takes only three minutes to complete and only a few seconds to pre-approve. That’s how we are able to put money in your bank account within 24 hours.

Another difference between IOU Financial and a traditional bank loan is that we look beyond your credit score and consider the totality of circumstances, such as your business equity and cash flows. We don’t send loan applications to some distant corporate headquarters where anonymous underwriters look for ways to deny your request. With IOU Financial, the person you work with is the person who approves your loan. We want to know our customers firsthand and we work hard to say “Yes!” to your loan application.

Feature Galore

Another nice feature we offer is that we can renew your loan once you’ve repaid only 40 percent of the principal. There are never any upfront costs or prepayment fees. We use simple interest calculations, so you only pay interest on your outstanding loan balance. Not all banks provide the same level of service. Maybe that’s why TrustPilot gives IOU Financial a rating of Excellent (Five Stars) – we believe that helping our clients succeed is the best way to grow our business.

So that’s it – now is the time and IOU Financial is the place to borrow up to $150,000 quickly and hassle-free. Contact us today!



Hard Pull vs Soft Pull Credit Checks

For many an individual and business, access to credit depends on FICO scores and the contents of credit history reports maintained at the three major credit bureaus – Equifax, TransUnion and Experian. A “pull” is a credit inquiry from a legitimate entity, made in order to check your credit.

A hard pull is one that can affect your FICO score, whereas a soft pull has no effect. This is important to remember, because too many hard pulls can lower your credit score. The Fair Credit Reporting Acts sets limits on why and when your credit report can be pulled.

Let’s take a closer look.

Soft Pulls

All credit inquiries that are not credit checks by a prospective lender are soft pulls. First, any inquiries you make upon your own credit reports or FICO scores are automatically a soft pull credit check, so feel free to make as many as you like. Other soft-pull examples include:

  • Credit inquiries from businesses that want to offer you goods or services (for example, a promotional offer from a credit card issuer or mortgage lender)
  • Inquiries from businesses where you already have established a credit account.
  • Pre-approved loan and credit card offers
  • Employers and others performing a background check on you. For some reason, employers tend to gravitate towards job candidates with good credit ratings.

As you can see, you may be subject to a soft pull and not even know it. Often, soft pulls help businesses save money when canvassing for new customers, because these inquiries can rule out some potential prospects, saving the business paper and postage costs.

Hard Pulls

Hard pulls result when a potential lender wants to review your credit application. Common credit applications that trigger hard pull credit checks are ones for credit cards, mortgages and car loans. Each credit check is counted as one inquiry. However, you get a break if you are “rate shopping,” in that all inquiries for the same purpose, such as a mortgage, business loan, rental property, student loan, etc., within a 45-day period are counted as only a single hard pull. This has implications – if you are apartment hunting, its best to do it within a short period if you want to maintain your FICO score.

Some pulls might be hard or soft, depending on the particular circumstances. These include:

  • Verification of identity
  • Car rentals
  • Obtaining an Internet or cable account
  • Opening a bank account
  • Requesting a higher credit limit
  • Contracting for a cell phone account

Pulls and Scores

Although a hard pull can affect your FICO score, the impact upon your score can vary. The score is sensitive to several factors:

  • The inquiry must be a voluntary application for credit
  • The number of new accounts you have recently opened
  • The percentage of your accounts that have recently been opened, by account type
  • The number of recent credit inquiries you have had
  • The amount of time that has elapsed since you opened an account, by account type
  • The amount of time since the last credit inquiry

The good news is that a single hard pull might not affect your credit score at all, and even if it does, the cost is usually less than five points. The bad news is that if you have a short credit history or just a handful of credit accounts, a hard pull can have a greater impact on your credit score. So can multiple hard pulls that are not categorized as rate shopping. Wonder why? Here’s the dirty little secret – consumers with at least six credit inquiries are 8X more likely than those with no inquiries to file for bankruptcy.

By the way, you can dispute a hard inquiry performed without your permission. Authorized hard pulls usually hang around on your credit history for a couple of years.

Soft Is Better

Now, if you are looking for a commercial business loan, keep in mind that IOU Financial uses soft credit pulls that won’t affect your credit score. When you combine this with our fast, no-hassle process and convenient payment arrangements, it’s easy to see why IOU Financial is growing into one of the premier commercial lenders in the U.S.

Build a Great Team Through Effective Interviewing

When you sit down for an interview with a prospective employee, you hopefully have your set of questions prepared. You have questions that will cover work history, education, 5-year plan and more. Your questions are focused on where your candidate has been and goals as well. While these type of questions are important, it’s important to note that you also need questions  that will give you a true insight into how this candidate will work with a team and in particular, your team.  It’s imperative that you have questions in your interview that will give you insight into how this person has handled situations in the past, as to predict future behavior.

To gain a clear picture of your candidate, make sure to ask open-ended questions, ones that warrant a full description, not just a yes-no answer.  Ask questions that will provide an example of how this candidate reacts in a variety of situations. For example, say you have someone on your team already who is very direct; and maybe a little rough around the edges.  You can ask a question such as, “in the past when you’ve worked with a co-worker who is very straightforward, and doesn’t sugar coat comments, how have you handled that.” These types of questions are geared to personality compatibility.

A great team involves personality compatibility, but also having complementary skills. This is where your skill assessment during the interview comes into play. Maybe the role you are hiring for will be one where this new person will be a support to a lead person in your group. You need to find someone, at this point, who is ok with not taking the lead but providing support. To assess this you can ask a question such as, “In the past, have you had to take the back seat on a project when you knew you were able to take the lead? Were you comfortable and satisfied doing that?” Again, assessing how the person will fit in with your group.

In looking at your current team and the team you are building, you want to make sure you assess the specifics of what you need to grow your team in the right direction. Consider who you have on your team, and what addition would bring that team to the next level. Then craft your questions to evaluate those areas, so you choose the very best for you, your team, and the company.

cta_7 secrets for small business success

3 Reasons to Use a Corporate Credit Card Instead a Personal One

The mere mention of credit cards can send shivers down the spine of a business owner that already has one too many payments to make.  Credit cards are often the source for start-up financing, but sooner or later, business owners realize that using their personal credit card is far from the ideal choice.  If you haven’t already investigated a corporate credit card, you might be missing out.  While each card has its own set of perks, here are three important benefits of getting your credit card finances in order:

Save Time and Worry Less

Having a corporate credit card allows you to eliminate the monthly chore of separating  all of your business expenses from your personal ones. In addition to saving time, you’ll no longer have to be concerned about whether you’re keeping thorough records, wonder if some purchases fell through the cracks or if you forgot to record them as business expenses for tax purposes.  Some accounting tools can even import all of your credit card transactions automatically! And, of course, there will be no more worrying about having a purchase declines because you reached your personal credit card limit due to a large business purchase.

Establish and Build Business Credit

The use of a corporate credit card establishes and builds your business’ creditworthiness. As your business continues to grow, you’re likely to run into an opportunity that requires a small business loan for your business because of growth opportunities. At that point, you want to have an established record that shows you have good credit. By having a business credit card, you will easily be able to demonstrate that.

Get Rewarded

Some business credit cards may offer perks that aren’t available with your personal cards. While this certainly varies from card to card, it’s worth checking several options before deciding which card to use for your business. From increased cash back based on purchases, to no foreign transaction fees, to discounts on rental cars, these perks can add up to real savings and convenience. Keep in mind that some, but not all business cards charge a fee even if you don’t use them.  Sometimes this fee is negligible compared with the savings or benefits that come with them so be sure to pay attention to the small print.

So before another billing cycle goes by, When trying to make a decision as to whether you want to get a corporate credit card consider the benefits. Do your research to choose if it is the right decision for you and if so what card will be bring you the most relevant benefits. Once you do that, you will be able to easily separate business from personal expenses, build your business creditworthiness, and realize the various perks that come from being a corporate credit card holder.

If you’re interested in a corporate credit card or other financing, find out more about what IOU Financial can do for you on our small business loans page.


cta_7 secrets for small business success

February 14th: Top 3 Ways to Show your Employees the Love

Valentine’s Day is around the corner, and Valentine’s Day often makes us think of the ones we love! It makes us think of the romance of the day. But what about your employees? Why not show them the love (in this case appreciation) too on Valentine’s Day?!

Here are 3 ways you can enjoy the spirit of Valentine’s Day with your employees …

  1. Food! Who doesn’t love coming into work and seeing there is some kind of food display? Well, maybe some people, but very few. Why not shower your employees with treats on Valentine’s Day. Maybe bring in breakfast and if that breakfast includes something heart-shaped – like heart shaped donuts, so be it! But don’t forget some healthy options for those who want to partake but not want the extra calories.  You can put a little note by the food that says Happy Valentine’s Day – I appreciate you. Your staff will appreciate you for the thought.
  1. How about some kind of Valentine’s Day Coupon – no not the ones good for a hug! But maybe good for an extended lunch of a ½ hour or something that may not make a huge impact on your business, but will certainly be appreciated by your staff. They can “cash in” the coupon at a time that works for them. People love the gift of “time” and this small gesture will go a long way.
  1. If you have multiple people on your staff, why not offer to send them all out to lunch together – either with or without you – and you take care of the bill. Again, just another way you can show appreciation to your staff. This gesture combines both food and time!

It may go without saying, but make sure that nothing that you do could be interpreted in a “romantic way” as you want to stick to proper employer/employee guidelines.  If in doubt, don’t do anything that could be misinterpreted. But with that in mind, take Valentine’s Day as an opportunity to show your staff that you appreciate them, and see how much they appreciate you for doing it. Happy Valentine’s Day to you!


Why Online Lending Could Benefit You More Than a Bank Loan

All businesses need money to stay in business. Sometimes a loan makes the most sense to get access to the necessary funds. Unfortunately, many owners of small businesses think first of banks as the source for loans. Although there’s a bank around every corner, there are also many problems lurking around those corners as well. You see, banks are very selective about who they’ll lend to, and this way of doing business will continue into 2016 without letup. The reason is that there are increasingly stringent regulations placed upon banks regarding their loan quality and reserve requirements.


Let’s examine why banks can be such a hassle:

  • No, No, No! -Without doubt, this is the bankers’ favorite word. Just about the only way to get a bank loan is to not need the money. Remember, no banker ever got into trouble saying no to a loan request.
  • Lengthy Application Process– Banks must verify all the details and credentials about your business before offering a loan. This makes for a very long application process that leaves you slowly twisting in the wind.
  • Cumbersome– The task of providing all the details that banks ask for is really cumbersome, and from the business owner’s viewpoint, completely pointless.
  • Preference Given to Long Term, Established Businesses– If you only a year or two into your business, keep in mind that banks favor established businesses because they depend almost entirely on credit history before approving the loan.
  • Long List of Prerequisites to Qualify for the Loan– Banks keep lengthy lists of criteria that your business must satisfy before they OK the loan. It is often not possible to jump through all their hoops.
  • Entire Amount Not Granted– Banks are infamous for not agreeing to the full loan amount requested. They may condescend to offer 70 or 80 percent of the money you need. This complicates life for owners who need to run their businesses, since they then have to search around for the residual amount and find other lenders to fund the remainder.

Online Lending

Thankfully, you don’t have to enter this nightmare world to secure a business loan. On the forefront of the commercial lending industry stands IOU Financial, the better way to fund your small business. Why? Glad you asked:

  • Yes, Yes, Yes! – We like approving loans and will bend over backwards to find a way to Yes. We don’t have an inhuman loan committees standing over our shoulder questioning every decision we make. You deal directly with the decision maker, so you always know the score. And that score is: we pre-approve 85 percent of all applications! One reason is that, unlike banks, we value cash flow as much as credit.
  • Easy Peasy- We don’t rely on your credit history to decide on a loan. Therefore, we don’t need to spend tons of time investigating every aspect of your life. Our streamlined, online application process is super quick and easy. You can get funded in as little as 24 hours.
  • Affordable Rates- You’re not paying for a lot of bureaucracy when you borrow from us, and that allows us to keep our rates affordable. We are 50 percent cheaper than merchant cash advances. Furthermore, there are no upfront costs to qualify for a loan from us, and we charge simple interest so that you only pay interest on the unpaid balance, with no compounding.
  • Friendly, Not Scary- You repay a small portion of your loan every day, automatically deducted from your bank account. It’s pain-free and much friendlier than the monthly bill from the bank. You can also renew your loan once you pay back 40 percent of the principle, and there is never a prepayment penalty.

The next time you need a business loan, remember that you don’t have to go to a bank. Make the better choice – choose IOU Financial for loans up to $150,000.