American Express yesterday (July 18, 2019) unveiled a new credit card for small businesses, the American Express Blue Business Cash Card. The new card comes with no annual fee, a 0% introductory APR period, and opportunities to expand a company’s credit spending limit, according to the release announcing the card.

“We know that three-quarters of small business owners experience unexpected business costs on a monthly basis, but less than a quarter of them feel fully prepared to deal with those unexpected costs,” said American Expresses’s E-Bai Koo.“We launched the Blue Business Cash Card to help alleviate some of the most common pain points of running a business so that business owners can concentrate on growing their business.”

Features of the new card

• A $0 annual fee
• 2% cash back on annual purchases up to $50,000 (1% after that)
• A 0% introductory rate on purchases and balance transfers for 12 months (Then an ongoing annual percentage rate (APR) of 15.49% – 21.49% variable rate.)
• The ability to go over a credit limit without penalty fees.
• A foreign transaction fee of 2.7%.

According to NerdWallet, the new card is similar in many ways to The Blue Business Plus Credit Card from American Express, right down to the rewards rate. However there is one major difference: The American Express Blue Business Cash Card earns cash back, while the Blue Business Plus Credit Card earns Membership Rewards.

Photos: American Express

As a business grows, its operational and financial needs grow along with it — from processing payments and building a website to shipping and marketing. All of these various needs can be provided by different software companies from around the globe, but it can be difficult to tie them all together.

Earlier this month, PayPal unveiled the PayPal Commerce Platform, its new approach to working with various tech platforms, payment networks, banks, and merchants — tied together.

According to the company, the platform can meet the specific needs of marketplaces, e-commerce solution providers, crowdfunding platforms and more by “bringing together a comprehensive set of technologies, tools, services, and financing for businesses of all sizes around the globe.”

“Offline commerce is now converging with online purchases and vice versa,” says Bill Ready, Paypal COO. “With all this complexity and opportunity, powering such global digital commerce is not something any single company can do on its own.”

Paypal says their platform can “finally put the same tech and capabilities in the hands of all businesses regardless of size. “

Paypal plans to bring together the best set of technologies, tools, services, and financing for businesses of all sizes around the globe.

Current Availability

277 million| Customers (users) 
22 million| Merchants (worldwide)

The PayPal Commerce Platform is available in France, Germany, Italy, Spain, UK and USA and will expand to more than 40 markets by the end of the year.

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If you manage payroll duties for your business (vs. outsourcing such duties to a payroll service), you may be wondering when the new withholding amounts related to the tax reform bill need to be reflected in your employees’ paychecks? So far, the answer is “when the IRS tells us.”

Here’s the current (1.05.2018) answer to the question provided by the IRS:

It was issued on December 26, 2017

“The IRS is working to develop withholding guidance to implement the tax reform bill signed into law on December 22. We anticipate issuing the initial withholding guidance in January, and employers and payroll service providers will be encouraged to implement the changes in February. The IRS emphasizes this information will be designed to work with the existing Forms W-4 that employees have already filed, and no further action by taxpayers is needed at this time.

“Use of the new 2018 withholding guidelines will allow taxpayers to begin seeing the changes in their paychecks as early as February. In the meantime, employers and payroll service providers should continue to use the existing 2017 withholding tables and systems.”

IRS updates can be found here

• Use of the new 2018 withholding guidelines will allow taxpayers to begin seeing the changes in their paychecks as early as February.
• As of 1.5.2018, The IRS has not released the withholding guidelines
• In the meantime, employers and payroll service providers should continue to use the existing 2017 withholding tables and systems
• Your January 2018 paychecks should look largely the same as your December 2017 paychecks

Remember: Your situation may not be like others so it is important for you to talk with your trusted advisors before making any decisions about taxes.

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Intuit recently unveiled QuickBooks Capital, a new small business lending product that provides users of QuickBooks access to small business loans up to about $35,000. This new service’s lending process is done using algorithms from within QuickBooks itself. Thanks to Intuit’s big data and machine learning techniques, most borrowers will know whether or not they are approved for a loan in just a few minutes. In this article, Steve King, a partner in Emergent Research and a regular contributor to SmallBusiness.com explains how this and other data-driven lenders are helping small businesses access loans.

Lack of credit is consistently one of the top challenges for small businesses. And for new businesses (those that have been in business less than 5 years), the challenges are even greater. According to the Federal Reserve of New York 2016 Credit Survey: Report on Startup Firms, 70% of young businesses say they need funding to grow. But only 23% of these firms are successful at getting all the funding they are looking for.

70% | Percentage of new businesses say they need funding to grow
26% | Don’t apply
21% | Get rejected
30% | Get partially funded
23% | Get funded

Source: 2016 Small Business Credit Survey. Federal Reserve Bank of New York

Insufficient credit history is why young companies find it hard to get funding

Simply put, they haven’t been around long enough to establish a strong enough track record for lenders to be comfortable providing them credit. And even if they get the credit they’re looking for, small business satisfaction with the lending process is not good

Percentage of successful borrowers who are satisfied with their experience at various lending sources

48% | Small banks
31% | Big banks
23% | Online lenders

How Intuit uses anonymous data to approve loan requests

Intuit has over 2 million small businesses that have agreed to allow the software company to analyze anonymized data in an aggregated format to develop products like QuickBooks Capital. This means Intuit can analyze 28 billion data points in its credit model. (QuickBooks users own their data and have to provide Intuit permission to use their data in this manner).

This database of income-statement, balance sheet, cash flow and transactions data allows Intuit to fully analyze the current financial state of a small business and predict its ability to pay back a loan. It also means Intuit’s credit model has enough data to allow them to lend to young small businesses, even those that have been around less than one year.

Based on the service’s beta customers, this approach is broadening credit availability and making it easier and quicker to get a loan.

Analysis by Intuit of its early QuickBooks Capital borrowers

46% | Had never applied for a loan before.
60% | Would likely have their loan application rejected elsewhere
90% | Say the loan helped their business grow

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Intuit Provides a Peak at Innovative Ways Small Businesses May Work in the Future

As we’ve shared many times, getting small businesses to accept bitcoin as a mainstream payment method is going to be an uphill struggle for backers of the cryptocurrency. According to Bloomberg, that acceptance challenge is taking place among big businesses, as well. Despite a recent surge (and then, fall) in the value of bitcoin, the number of major online merchants accepting Bitcoin is still less than one percent. 

“Retailers were already skeptical about letting customers pay with bitcoin before the cryptocurrency’s price underwent an astronomical rally this year,” reported Bloomberg. “That rapid surge hasn’t made retailers any more accepting. In fact, it may have done the opposite.”

0.6% | Percentage of the top 500 online merchants that accept bitcoin

Only 3 of the top 500 online merchants tracked by the e-commerce publication, Internet Retailer, accept bitcoin. Last year, the number was five, according to Morgan Stanley payments analyst James Faucette.

Quote | James Faucette from a Morgan Stanley report (July 11, 2017)

“Bitcoin owners are reluctant to use the cryptocurrency given its rate of appreciation, more evidence that bitcoin is more asset than currency. It is way easier to trade speculatively than convince new merchants to accept the cryptocurrency.”

Bitcoin’s challenge among retailers

The hesitance among retailers may also be linked to bitcoin’s scaling challenges, as transactions become slower and more costly, Faucette added.

Some users of the cryptocurrency no longer see the point in using bitcoin for small purchases given increased transaction fees, Atlantic Financial founder Bruce Fenton said in an interview last month. “There’s a problem with the fees being so high — it does price out certain things,” said Fenton, who is a board member of the Bitcoin Foundation. “There are some micro transaction uses cases — a cup of coffee is the big analogy everybody uses — that are being priced out just because bitcoin is going up so much.”

Bitcoin ≠ Blockchain

As in our previous coverage of bitcoin, we will remind readers that bitcoin is a non-regulated currency (asset) while Blockchain is the software and encryption approach that enables it. Blockchain can be used for other cryptocurrencies. Many companies are springing up that use Blockchain. Our coverage of cryptocurrencies does not imply any endorsement of investments involving cryptocurrencies. We are tracking this issue because small business owners continue to be approached about accepting cryptocurrencies for payments.

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The recruiting marketplace Glassdoor has announced the results of its newest jobs report identifying the 25 Highest Paying Jobs in America for 2017. Note: The rankings do not include executive (C-Suite) positions.

11 | Tech jobs among 25 Highest Paying Jobs in America for 2017, more than any other profession.
 6 | Healthcare jobs on the list

New jobs to this year’s list include Nurse Practitioner (#14, $104,144) and Nuclear Engineer (#24, $94,852). Physician Assistant (#7, $112,529) has the highest number of current job openings with 13,547 positions.

“With nearly half the list comprised of jobs in the tech and healthcare industries, this report reinforces that higher salaries are found in America’s fastest job-creating sectors, which require higher education and in-demand skill sets,” said Dr. Andrew Chamberlain, Glassdoor Chief Economist. “However, while pay is one of the leading factors job seekers consider when determining where to work, our research shows that salary isn’t necessarily tied to long-term job satisfaction. Rather, the factors that employers should focus on to drive employee satisfaction long-term are having great senior leadership, positive culture and values, and clear upward career opportunities for employees.”

Top 25 Highest Paying Jobs in America | 2017

Rank	Job	Media Base Salary	Job Openings
1	Physician	$187,876	7,770
2	Pharmacy Manager	$149,064	2,370
3	Patent Attorney	$139,272	525
4	Medical Science Liaison	$132,842	391
5	Pharmacist	$125,847	5,496
6	Enterprise Architect	$112,560	1,320
7	Physician Assistant	$112,529	13,547
8	Applications Development Manager	$112,045	516
9	R&D Manager	$111,905	185
10	Corporate Controller	$110,855	259
11	Software Engineering Manager	$109,350	1,011
12	IT Architect	$105,303	250
13	Software Architect	$104,754	1,147
14	Nurse Practitioner	$104,144	12,566
15	Solutions Architect	$102,678	4,174
16	Data Architect	$102,091	1,438
17	Actuary	$99,507	463
18	IT Program Manager	$98,883	250
19	UX Manager	$98,353	263
20	Systems Architect	$97,873	1,167
21	Plant Manager	$97,189	1,286
22	Scrum Master	$95,167	2,072
23	Financial Planning & Analysis Manager	$94,862	501
24	Nuclear Engineer	$94,852	155
25	Attorney	$94,695	1,010

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(Just in case you are wondering what a Scrum Master is.)

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The Surprising Role Money Plays in What Employees Value at Work | 2017

Individuals in the U.S. who have income as a sole proprietor or independent contractor (or any other term applied to a small business comprised of one person) are responsible for paying income taxes related to self-employment. Here are five independent-worker (self-employed, etc.) tax-related items the IRS recommends you be aware of. They link to more information found on the tax agency’s website. As always, we will remind you: Seek professional advice from trusted advisors when you are dealing with issues related to finances, taxes or the law.

First: Do you have income subject to the self-employment tax? The IRS has a self-guided “online interactive interview” that will help you determine whether or not you do.

1 | Estimated Tax

Self-employed taxpayers generally need to make quarterly estimated tax payments. IRS Publication 505, Tax Withholding and Estimated Tax, has details on making those payments.

2 | Schedule C or C-EZ

Self-employed taxpayers must file a “Schedule C, Profit or Loss from Business” or “Schedule C-EZ Net Profit from Business” with their Form 1040. For expenses less than $5,000, use Schedule C-EZ. Each form’s instructions provide the rules for which form to use.

3 | Self-Employment (SE) Tax

For those making a profit, self-employment and income tax may need to be paid. Self-employment tax includes Social Security and Medicare taxes. Use Schedule SE to figure the tax.

4 | Allowable Deductions

Taxpayers can deduct expenses paid to run a business. Expenses are described as either “ordinary” or “necessary.” An ordinary expense is one that is common and accepted in an industry. A necessary expense is one that is helpful and proper for a trade or business.

5 | When to Deduct

In most cases, taxpayers can deduct expenses in the year paid or the year incurred. Some costs must be ‘capitalized,’ however. This means deducting the cost over a number of years.

More advice from the IRS

All taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.

Additional IRS Resources

• Form 1040-ES, Estimated Tax for Individuals
• Publication 505, Tax Withholding and Estimated Tax
• Publication 535, Business Expenses
• Do I have Income Subject to Self-Employment Tax?

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Despite the mountain of media coverage devoted to venture capital investments, VC funding is an extremely rare source of funding the founding or operation of a typical small business. Businesses along Main Street get started with money from a long list of sources, none of which involve the kind of funding you read about on the website Tech Crunch. Fortunately, if you have saved up some equity and have a good credit score, there is a wide array of potential sources for funding and founding a small business. Unfortunately, each one has a set of pros and cons, and none are without risk. So, as we always say when sharing anything related to money, seek professional advice. Talk with any trusted advisors and experts like a CPA, business lawyer, and financial advisor.

With that caveat, here are 9 funding sources available to small businesses compiled by Kiplinger.com and the SmallBusiness.com WIKI. With the right qualifications and criteria, some of the sources could be just right for you, depending on where you are currently in the stage of starting or growing your business.

1 | Friends and Family

Interest rate | Set by lender and borrower
Repayment schedule | Set by lender and borrower
Pros | Easy access to money at potentially lenient terms
Cons | Requires friends and/or family as funding source

When it becomes difficult to obtain money from a conventional source (i.e., a bank), many people start or purchase a business with capital invested by friends and family. These days, there are ways to add structure and formal terms to such loans. Companies like LendingKarma and LoanBack can help formalize and manage the process of borrowing money from friends or family. For a small fee, your business and your sources of seed money can securely exchange money through such online platforms, utilizing features like payment tracking and e-mail reminders to ensure that lenders get paid back on time.

2 | Credit Cards

Interest rate | 0%-30%
Repayment schedule | 30 days
Pros | Readily available
Cons | Expensive, relatively low borrowing limits

If you’re thinking of going this route, make the most of credit cards with different features for different expenses. For example, Kiplinger.com suggests strategies like using a credit card with a low-interest rate, preferably a 0% introductory offer, to be used for business purchases. For large cash expenditures, they suggest using a card with no fees for cash advances, then transfer the balance to the card with the 0% interest rate.

3 | Crowdfunding

Interest rate | N/A (payback in form of equity or rewards)
Repayment schedule | 5+ years for equity, 1+ years for rewards
Pros | Access to diverse pool of backers, good way to establish engaged customer base
Cons | Relatively slow process to accumulate funds

Popularized by platforms such as Indiegogo and Kickstarter, crowdfunding has evolved in the last couple of years into a viable funding alternative for those looking to start a business. As we have described in a SmallBusiness.com guide to crowdfunding, there are two main types of crowdfunding: reward- and equity-based. Reward crowdfunding allows entrepreneurs to receive financing by offering, say, a future product in return for capital. Equity crowdfunding allows entrepreneurs to reach investors interested in owning a piece of their start-ups.

4 | Term Loans

Interest rate | 6%-30%
Repayment schedule | 1-5 years
Pros | Short waiting time, no collateral
Cons | High-interest rates

For an online term loan, you can typically fill out an online application within 15 minutes. Once all documentation is verified, you get the money deposited in your bank account in a day or two. Companies such as Prosper rely on credit-scoring algorithms and third-party data to expedite the lending process and reduce the cost of originating loans for less-established firms.

5 | Low-Interest Small Business Loans

Interest rate | 8%-15%
Repayment schedule | 1-5 years
Pros | More welcoming to less-established businesses; many include access to financial education
Cons | Low borrowing limits, long application process

Small businesses that have difficulty obtaining a bank loan can generally get financing with help from a Small business Development Center (SBDC), which provides assistance to local small firms. The mission of these companies is to provide capital and other resources to entrepreneurs who don’t meet the criteria banks typically require for credit score, revenue or operating history. (See the directory of SBDCs on the SmallBusiness.com WIKI.)

6 | Microloans

Interest rate | 7%-20%
Repayment schedule | 6 months-5 years
Pros | Friendly terms, low rates
Cons | Long review times

Microlenders are another source of loans for entrepreneurs. Typically offering small loans to businesses, they are a great option if you can afford to wait a while to receive funding. Generally, you’ll get solid loan terms from these lenders, such as long repayment schedules or no fees. Microlenders such as Kiva offer small loans to businesses with relatively low interest rates (0% in the case of Kiva). These companies focus on working with small firms that are typically underserved by traditional banks.

7 | Bank Loans

Interest rate | 10%
Repayment schedule | 5-10 years
Pros | Great terms and rates
Cons | Long application process involving much documentation

As profit margins tend to be slim on small-business loans, banks try to reduce their risk as much as possible. This means that you will need to present a complete loan package, including a personal financial statement, copies of personal tax returns and sometimes even a business plan. Banks also tend to give loans only to small businesses with collateral and a personal guarantee from the owner. Local banks may be better options because they know the local credit conditions. They often provide more access to a loan officer and put more emphasis on a borrower’s character rather than just the credit score.

8 | SBA Loans

Interest rate | Prime + APR (typically 3%-5%)
Repayment schedule | 10 years
Pros | Great terms and rates
Cons | Long application process and a lot of paperwork

A brief SBA-produced video describing its role in lending money to small businesses.

One financial product that banks are more eager to provide are loans backed by the Small Business Administration (SBA). The SBA doesn’t issue these loans directly. Instead, an authorized lender makes the loan, with the SBA guaranteeing a portion of it, reducing much of the risk for the lender. The SBA offers different types of loans, of which the 7(a) loan program is the most popular. These loans can be used for a variety of purposes — working capital, buying a franchise or refinancing debt. Different lenders may interpret the SBA guidelines differently, so if you have a solid application that gets turned down by one bank, you should try another bank.

9 | Receivable Financing

Interest rate | 15%-35%
Repayment schedule | 1-3 months
Pros | Quick access to funds
Cons | Collateral required

There are three types of Receivable financing (or factoring): Invoice factoring, invoice financing and receivable-based lines of credit. The interest rate for receivable financing is high compared with traditional bank loans, but getting the funding is relatively quick. So if you need a quick influx of cash, invoice financing can be a good short-term solution when you want to avoid lengthier loan applications.

VIA | Kiplinger.com

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Can money buy happiness? It’s a question that has been debated for millennia so we won’t attempt to settle the argument in this article. However, it’s a question that keeps being researched by those on both the paying and receiving end on financial transactions, like, say, employers and employees. Research shows higher pay is statistically linked to higher job satisfaction, but the impact is small, according to Glassdoor, the online “jobs marketplace” where job seekers research and read employee reviews of companies.

Recently, Glassdoor released the results of year-long study* that sought to discover the answer to a slightly different question about income and employee happiness: Do the job factors an employee care about most change as their income changes? In other words, as pay rises, do workplace priorities around compensation, work-life balance and career opportunities shift as well? To find out, Glassdoor analysts separated six “workplace” factors into four income groups under $200,000 per year to see if the importance of the workplace factors change as an employee’s income increases. Here’s what they discovered.

All Workers | When measured in the aggregate, culture and values matter most

The figures below show the most important workplace priorities for all workers in the sample, regardless of income level.

22.1% | Culture and values of the organization
21.1% | Quality of senior leadership
18.8% | Career opportunities
13.9% | Positive business outlook of the organization
12.1% | Work-life balance
12.0% | Quality of compensation and benefits

As pay increases, culture and values matter more

Three factors matter more to workers as pay rises: culture and values, the quality of senior leadership, and career opportunities.

Bottomline | Money is no substitute for culture

For employers, this research bolsters the idea that pay and benefits—while important—are only one factor when it comes to keeping employees engaged over the long term. As pay increases, compensation and benefits become less important as drivers of employee satisfaction. Instead, other workplace factors play a more important role. Regardless of income level, Glassdoor found three factors are the most important drivers of job satisfaction: culture and values, senior leadership, and career opportunities.

*Based on 615,087 U.S.-based Glassdoor users reporting salaries of $200,000 per year or less, who contributed at least one company review and one salary report between January 1, 2014 and September 30, 2016.

VIA | Glassdoor.com

The rewards-based crowdfunding platform Indiegogo has partnered with the equity crowdfunding website, MicroVentures, to provide Indiegogo backers the possibility to make equity investments in certain projects. While available, it’s not for every startup or investor.

“Unlike rewards-based crowdfunding, with equity crowdfunding, individuals receive company shares, not just perks, in exchange for their equity investment. Not only can businesses gain the crucial help they need from a broader pool of funders—but investors can support business they believe in, and can even benefit financially if a company goes on to greater heights,” explained Slava Rubin, chief business officer, who announced the program on Indiegogo’s blog yesterday (November 15, 2016).

As SmallBusiness.com has covered over the past three years, equity crowdfunding is possible because of the equity crowdfunding rules passed by the Securities and Exchange Commission (SEC) as part of the 2012 JOBS Act. The legislation allows anyone the opportunity to invest in companies online.

Previously, only a select group of accredited investors that met a certain wealth threshold could invest in early-stage private companies.

“Investing in startups means you may own a piece of the company and are along for the ride, with all the ups and downs. You may not have a seat at the boardroom table, but you can help a great idea come to life,” said Rubin.

The costs of running an equity-raising campaign

While the option is available to Indiego users, don’t expect a mad dash for most project fund-raisers.

According to the NYTimes.com, here are some of the caveats for such an approach:

• The cost of running an equity campaign is very different from a rewards-based campaign. For example, it is free to set up a rewards-based campaign. The platform is paid 5% of the revenues generated for a successful campaign.
• For equity campaigns, creators will need to spend about $7,000 on compliance and regulatory costs before a campaign is permitted to go live.
• The site will then take a cash fee of 7 percent on any funds raised, plus an additional 2 percent in stock.
• Investors will pay a $7 processing fee or 2 percent of their investment, whichever is higher.

Investor, beware

While Indiegogo, MicroVentures and the 2012 Jobs Act make the equity funding option possible, it won’t be for everyone. Before making any investment, know the risks. Startup investing is high risk. As we say often, always consult  your trusted advisors when making decisions about money or legal matters.