If you’re an international student ready to apply for your first U.S. credit card, keep reading!
You know you have to build your credit score if you are living in the U.S. You absolutely need a credit history in the U.S., but you aren’t building one if you pay with your debit cards or cash. And the sooner you start building it, the better!
You can’t build credit without having credit, and sometimes you can’t get credit as a student without a credit history. Paying your credit card bill each month will help you build your credit history. So where to start? We’re here to help you from the very beginning, and we’ll suggest credit cards that might work for you.
Which type of credit card should I apply for?
Here is the scenario: an international student comes to the U.S. and needs to build credit from scratch. The best card must be the one that meets his or her specific needs.
If you’re applying for the first credit card in the U.S. as a student, a student Cash Back card might be the best option for you. Student cash back cards offer students a chance to earn up to 5% on everything they spend with the card. That way, the student can save some money while spending money.
International students ask a lot about credit cards, and it’s important to know that each credit card company has different requirements. Sometimes, the company requires you to have a Social Security number (SSN) to apply; if that’s the case, you can work on campus to get an SSN. On the other hand, some credit cards only require your passport and student ID to be qualified. So, understand what you need before applying for a credit card and try your best to meet the application requirements!
If you are starting to realize the importance of obtaining a credit card, we can help with suggestions. No matter whether you’re building credit from nothing or you’re looking forward to saving money by having a student cash back card on everything in your daily life, you should read on, and take the very first step to applying for a credit card.
Top-ranked international student credit cards
Here are top-ranked credit cards for international students that we think might be a good start for your lifestyle:
Discover provides two top-ranked college credit cards that allow students to get rewards with no annual fee. Plus, you can get $150 back after you spend $500 in the first 3 months after opening your account. Both Discover it® Chrome for Students and Discover it® Student Cash Back pay cash rewards. However, they have different rewards on different things. Pick the card with features designed to meet your specific needs. Also worth mentioning: Discover offers a low introductory rate (0% intro APR* for 6 months on purchases), a FICO® Credit Score for free (on monthly statements, mobile, and online), and up to 5% cash back at different places each quarter.
2. Capital One
Journey® Student Rewards Credit Card provides 1% cashback on all purchases, plus a 0.25% cashback bonus on the cashback you earn if you pay on time. And, there’s no annual fee or foreign transaction fee either. This might be a great feature for international students who travel or go to their home countries a lot.
Note: APR = annual percentage rate. It’s most often expressed in terms of an interest rate (%). APR is a measure that attempts to calculate what percentage of the principal you’ll pay per period.
Take your time and choose everything with confidence
Building a credit history in the U.S. requires a lot of patience and good financial habits. If you’re new to the U.S., you might need to spend some time weighing the pros and cons of different credit card offers so you can build up your credit history. Choosing the right one takes a lot of time but it can pay off.
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Have you lived outside India for more than 182 days in the financial year (Apr-March)? If yes, then for tax purposes, you are an NRI (Non-Resident Indian). As per FEMA (Foreign Exchange Management Act) guidelines, it is illegal for NRIs to hold savings accounts in their name in India.
Instead, you will have to convert those accounts into NRO (Non-Resident Ordinary Rupee) accounts. Additionally, it is a good idea to open an NRE (Non-Resident Rupee) account as well. These accounts are needed only when an NRI wants to have a bank account in his/her own name in India to hold savings, earn/invest in India and wants to freely transfer funds between US and India. (If you don’t have any Indian bank accounts, you can still send money to someone in India via money transfer services, wire transfers or Telegraphs, or buy something in India with International Credit Cards).
What is the NRO account?
The NRO account is a savings or current account held in India for NRIs to manage their income earned in India. All income which is receivable in India such as rentals from property, investments, pension etc have to be deposited in this account. Any payment towards insurance premiums or EMIs on loans which you availed while in India also has to be mandated from NRO account.
You can apply for an NRO account jointly with a resident Indian in which the bank will give you both an NRO debit card each. Alternately, you can add a mandate holder for the account who can carry out certain operations of the account on behalf of the NRI like drawing cheques to make local payments, make and renew fixed deposits, and invest in avenues open for NRIs. Any foreign currency deposited into the NRO account will convert to Indian rupees.
Even though funds from NRO account are now repatriable up to $1million (with a certificate from a Chartered Accountant for payment of taxes and other repatriation fees), it is advised to keep these India based earnings in India, in the NRO account. Note that interest earned in the NRO Account is subject to TDS (Tax Deductible At Source) at 30.9%.
And what about an NRE account?
The NRE account comes to the rescue, for NRIs wanting to transfer funds between US and India. One can deposit only foreign currency earned abroad in this account, which gets converted into INR at the time of deposit. Therefore, you may repatriate the money in this account (plus interest earned) any time without incurring income/wealth/gift tax. The benefit of repatriation and taxation is the main benefit of the NRE account. Some Indians move their US savings to the NRO accounts, invest in India in high yield instruments, and re-transfer and use that money in the US. Transferring funds between and NRE and NRO account is straightforward and simple. Additionally, with the NRE account, you will receive an international debit card that enables you to transact and withdraw money at any time (withdrawal in INR).
However, a joint NRE account can be opened only with another NRI. You cannot use your NRE account for receiving funds/income/interest in India. To make local bill payments, purchase property, etc. in India you will have to move funds from your NRE to NRO account first. This is how the government regulates the inflow of foreign money to India.
Please contact your Indian Bank now for details on opening and managing your NRE and NRO accounts.
To read more about related topics, check these out:
The American legal system is based on the federal law and made greater by the laws implemented and enacted by the state legislatures. Then comes local laws that are passed by local counties and cities.
The rights and freedom given to each American citizen are called the “Bill of rights” which is covered in the first 10 amendments of the US Constitution.
The laws and US Constitution apply to everyone in the US irrespective of the fact that they are a citizen or not. In fact, even the illegal immigrants have some of the most common basic legal rights.
The most confusing thing about American laws is that each state has the liberty and power to form their own laws (criminal and civil). As a result of this, there are 50 different state legal systems with their own laws, prisons, police force and courts. So, if you are moving from one state to another, there are high chances that something considered legal in 1 state may not be legal in the one you are moving, and it is always advisable to check the basic laws.
The US Judiciary
The US judiciary consists of the US Court of Appeals, The District Courts and the Supreme Court & these courts function independent of the government. As you would have guessed, The Supreme Court is the highest court in land and any decision given by the Supreme court is final and binding to all parties. There 9 judges in the Supreme Court and they are appointed for life by The President of United States.
In conflicting cases, the Supreme Court will review the activities of the State & Federal governments and then conclude if the laws passed by them are Constitutional or not.
There have been times when the Supreme courts have reversed laws passed by the Congress and even declared the actions of the US presidents unconstitutional.
Some of the major judgements are Racial Segregations, Abortion, Capital Punishment and the infamous Watergate Scandal that led the resignation of President Nixon.
There’s one catch here though. As we know that The President appoints the Supreme Court Judge and therefore that selection can be biased in the form that he may appoint a judge that has similar political and other views as that of the President. The Supreme Court for many years was made up of members with a liberal mindset, although as we know now, that this trend is changing. Case in point the recent appointment of Judge Brett Kavanaugh by President Donal Trump.
The Federal Courts
Cases that arise under the US Constitution or any law / treaty is dealt by the Federal courts and not State Courts. The Federal Court also hears if there any disputes between State Governments or between citizen or residents of different states. Cases that fall under the jurisdiction of a federal court are heard by a federal district judge. Any appeals after the decision of the federal court can then be made to the Circuit Court of Appeals or even the Supreme Court in some cases.
The Civil & Criminal Courts
There is a clear distinction between civil and criminal courts. Civil courts listen to disputes between 2 citizens whereas as the name suggests, a criminal court deals with cases that includes someone breaking the law.
Crimes are categorized as minor or serious violations of law. Minor crimes are called misdemeanors and serious violations are called felonies.
Some of the misdemeanors include:
- Illegal parking
These crimes are usually closed by asking the person committing the crime to pay a fine and may not even have to appear in the court.
Felonies, which include robbery, drug trafficking or dealing are tried in a court of law and the guilty is generally sentenced to prison. As mentioned earlier, State laws differ and sometimes, a misdemeanor is dealt with harshly in a particular state.
People committing minor crimes (misdemeanors) may be issued summons (foreigners who mistakenly break a law may be let off with a warning). However, anyone who commits a felony is arrested. While arresting, the police may frisk them to check if they have any concealed weapons, handcuff them and even read them their rights.
Anyone who is arrested must be advised of their constitutional (Miranda) rights. These rights are, “You have the right to remain silent, the right to have a lawyer present during questioning and the right to have a free court appointed lawyer if you cannot afford one”. The person is also asked if they want to waive their rights. This is never recommended because then whatever they say can be used against them in the court.
If you are arrested, always retain your rights and do not say anything unless you’ve spoken to your lawyer or a lawyer. At the police department, you will be charged, and you have a right to make 1 telephone call. Chose this call carefully. We suggest, you should make this call to your embassy or the consulate, a lawyer or the local legal aid office or someone you know who is capable enough to stand bail for you.
You will then be put into a cell until your case comes before a judge, usually, the same or next day.
You can be released if the judge thinks there’s no case or may set bail. A bail may be a cash sum or the equivalent property value. In some cases, the judge may oppose bail too.
Lawyer Referral Services
Lawyer Referral services in many areas are maintained by local (e.g. county) bar associations. The members of this bar association will provide legal representation for a fee.
In case you have to “retain” a lawyer be very clear about what the legal representation costs are including fees for services such as medical experts, transcripts and court fees. It is very important to hire a lawyer who is a specialist and is experienced in handling the type of case you are entangled in. Of course, if you cannot afford lawyer, court will appoint a lawyer for you.
Now comes the weird part of the US legal system – plea bargaining. This involves a deal between the prosecution and the defence where the defendant pleads guilty but to a lesser charge for a reduced sentence and ultimately saving time of everyone – the court’s and theirs.
This can sometimes not work in the favour of a victim and sometimes make a mockery of a case (as seen in many cases. For e.g. The OJ Simpson case). Keep in mind that in the US you are normally considered guilty unless proven innocent, at least in the eyes of the general public and you may be tried and convicted by the media long before the trial comes to court.
Often, penalties can be harsh for less serious crime while professional and white-collar criminals with the best defence can get off easily with a small sentence or even just a fine. The reason for this may be that many judges are elected and not appointed from the qualified members of the legal profession. This has resulted in bad legal decisions and a lack of consistency in sentencing.
In the US, Litigation is everywhere. It is a national tradition and some people even joke about it being a sport preferred by lawyers. Why so?
There are approximately 15-20 million civil suits in a year which has led to a huge backlog of cases in all states and even in the Supreme Court.
An unusual aspect of US law is that lawyers are allowed to work on contingency fee basis. This means that they can accept a case based on a no-win – no fee basis. And if they win, they’ll charge upto 50% of what you are suing for. And if you intend to hire a lawyer on a non-contingency basis, the cost will be too high for you to afford.
According to a lot of people, this system is flawed as in such a scenario, the lawyer is always trying to win the case and doesn’t mind bending the law or crossing ethical boundaries. It is because contingency fee system, the number of litigation cases is so high in this country. And the lawyers are happy to pursue because of the high return they make of these cases and the awards made by US courts.
As a result of the prevalent litigation system, individuals must not only have liability insurance to protect them from being sued but everyone from doctors to carpenters need to have expensive malpractice insurance to protect themselves against litigation from patients or customers. There’s a saying that the whole US economy and legal system is underpinned by litigation in which half the population is directly employed while the other half is a plaintiff or a defendant.
Almost everyone apart from the lawyers agree that the litigation system is out of control but no one knows how to resolve it while lawyers think of new and innovative ways of litigation. There is also a term coined for lawyers who follow ambulances to be the first in line to represent accident victims. They are called ambulance chasers.
It has gone so out of control that in many states there are weird product liability, personal liability and consequential loss laws. Some of these have limited liability while others don’t. As a result of which, there are absolutely obvious and some very weird warnings listed on products and articles anticipating ridiculous implausible events to protect themselves from litigation.
For example, in some states you will see that a bottle of beer has warnings about drinking and driving, choking on stopper, breaking the glass and cutting yourself or someone else, swallowing broken glass, taking alcohol where it is prohibited, drinking under age or giving a drink to someone under age, alcoholism, carrying alcohol in your car or over certain state borders, being mugged or falling over while drunk, etc, etc. – and this is hardly an exaggeration!
In the US, you can sue a tobacco company for causing your cancer, a car manufacturer for causing an accident, a ski firm for contributing to your ski accident, or a computer software company for fouling up your tax return. In fact, anything that can (however remotely) be blamed on someone else, will be!
Do not discuss your injury after an accident to anyone other than your lawyer and especially not with anyone connected with the other party. You should also never sign any documents they present to you without legal advice. And even if you forget this guide, we are sure you will come across hoardings or tv adverts (Better Call Saul) that will remind you of your rights to sue in accident situations.
A lot of companies are so terrified of courts that they do not want to go to trial. For some it is bad for their business and therefore they end up settling out of court by paying a good amount of money.
If you own a business and are not being sued by a few 100 people then you probably aren’t worth suing and if someone sues you then, it is a sign that you are successful. It is weird but that’s how this country works.
Many social service agencies provide free legal assistance to immigrants (legal and illegal), although some may serve the nationals of a particular country or religion only. There are help lines and agencies offering free legal advice in most towns and cities, many with legal aid societies (offering free advice and referral on legal matters), Better Business Bureaux (dealing with consumer-related complaints, shopping services, etc.) and departments of consumer affairs (who also handle consumer complaints).
Currently, when you are renewing your visa, applying for a Green card, or change of status, immigration agents have the right to review your social networks. The content can mean misunderstandings between agents and what you meant by x or y post – which is funny to you or your way of dressing can mean something else for the agent – so here we want to communicate six measures with which you can protect yourself.
1. Your real name is not a requirement:
On social media, you don't need to put the name your parents gave you, use a nickname, or change your name.
2. Don't use an email that links to your real name
Create an email that you only use for social networks and that is not connected with your name – not initials, not your birthday number – use your nickname, your favorite number or something you like- example: firstname.lastname@example.org-.
3. Change the privacy in your accounts
Think carefully about who you want your profile to see, what we recommend is that they're just your friends. The rest, modify your account so they can't even see your profile picture.
4. Do you know your virtual friends?
Consider that when you make content private, you are still sharing with a group of people. Confirm for yourself that you know those people and trust them. If you don’t feel safe with any contact seeing your content, remove them as friends or block them. You can always change this later if you feel safe again with them.
5. Your presence outside your profile
Your friends can tag you on their profile, what are those posts about? What are you doing in those pictures? Are you comfortable that that information is out there? And if the answer is no, ask your friends not to label you.
The same goes for the groups you post, think twice about what you'll post, those things, unlike your already private profile, are there for any member to see.
6. Drastic measures in this century
We know that this new requirement of immigration agents can make many very nervous. If this social media thing is taking your sleep away, consider deleting your Facebook, Instagram, twitter, etc.
Don't become paranoid, that's why we made this guide and we will continue to do more, the thing is just to be a little more careful with our presence in the media, outside of that, live and enjoy your life as Indians knows how to do it.
The Small Business Administration (SBA) is a federal agency that works with lending institutions to provide loans to small businesses. The term “SBA Loan” can be a little confusing because the agency itself does not lend money directly to small business owners. Rather, it works with its lending partners – usually banks, community development organizations, and micro-lending institutions – to make it easier for business owners to secure capital. The funding for SBA loans comes from the lenders themselves, while the agency provides government-backed loan guarantees that mitigate lenders’ exposure to risk, thereby making it easier for business owners to get loans.
For instance, when Jeff Meier wanted to take full ownership of his grocery business, he approached six different banks for help with the acquisition. All of them refused.
Meier then decided to take a different route. He contacted Rappahannock Economic Development Corporation (REDCO), a certified nonprofit commercial lender, to obtain an SBA 504 loan that allowed Meier to buy out his former business partner, free up the store’s cash flow, and diversify debt.
Meier’s Battleground Country Store in Fredericksburg, Virginia, opened in 2016 with 18 employees. Today, the store has 29 employees and continues to expand its range of services. While Meier credits his experience in the U.S. Air Force and National Guard for honing his leadership and management skills, he also says that the success of his store wouldn’t have occurred without his SBA loan.
Meier’s case is similar to that of many small business owners who have secured SBA loans to expand their businesses. The loan he qualified for is one of 13 different loan types that the SBA packages in six loan programs. In all, the SBA helped issue more than $5.4 billion in loans in 2018 and, through August, was on pace to top that figure in 2019.
SBA LOANS VS. BANK LOANS:
“Helped” is the operative word since the SBA doesn’t lend money directly to small businesses, with the exception of its Disaster Loan program. The SBA guarantees a portion of the loan, which reduces risk for lenders. This lower risk to the lender makes it easier for small businesses to get loans, especially businesses that would normally not qualify for a loan. Examples of this are businesses with insufficient down payments for collateral for traditional bank loans.
The typically lower SBA loan interest rates and term lengths make repayment less complicated. Simply put, borrowers have less money to repay over a longer period of time.
All SBA loans are similar in purpose and share characteristics, but they are each designed for different needs and different borrowers.
The SBA doesn’t have one narrow definition of a small business. Rather, different criteria are set according to industries. There are other factors that separate an SBA loan from a commercial one.
SBA LENDING PROGRAMS:
The SBA has six loan programs that offer 13 different loans. These loans are designed to accommodate a variety of needs.
The programs are as follows (All SBA interest rates are current as of August 2019):
SBA (7a) Loans
This is the SBA’s most popular program. It’s ideal for small businesses that need working capital, and can provide up to $5 million. In addition to the standard 7(a) loan, the SBA offers three other loans of this type.7(a) Small Loan. This is a (7a) loan that can provide up to $350,000 and is typically faster to fund.
SBA Express Loan. The 36-hour turnaround is the advantage of this offering. But interest rates can be higher, since the SBA guarantees a maximum of 50 percent for SBA Express Loans.
Community Advantage Loan. These are 7(a) loans designed to provide financing to businesses in underserved areas. Borrowers may not meet standard SBA 7(a) loan criteria for a variety of reasons. These loans offer the same expedited approval of an SBA Express loan, but with 85 percent of the loan guaranteed up to $250,000.
SBA Interest rates for 7(a) loans can range from 7.5 to 10 percent. They also come with a number of fees, such as an origination fee of 0.5 to 3.5 percent, an SBA guaranty fee of two to 3.5 percent and a loan packaging fee of $2,000 – $4,000.
How Can I Use Money from an SBA 7(a) Loan?
The SBA has rules on how you can and cannot use proceeds from an SBA-guaranteed 7(a) loan. Typically, the use of loan proceeds is very general. However, there are some limitations and restrictions on the use of funds.
Acceptable uses of SBA 7(a) Loan Proceeds
Financing for long and short term assets used in normal business operations. Acquisitions and refinances are eligible, and may include real estate and business goodwill. Working lines of credit are available:
To purchase equipment, machinery, furniture, fixtures, supplies or materials
To purchase real estate, including land and buildings
To construct a new building or renovate an existing building
To establish a new business or assist in the acquisition, operation or expansion of an existing business
To refinance existing business debt, under certain conditions
SBA CDC/504 Loans
This is the SBA version of a commercial real estate loan. To qualify for a CDC/SBA 504 loan, applicants need a credit score of at least 680 and a down payment of at least 10 percent. The upper range of loan amounts can be between $14 – $20 million. The SBA interest rate for this type of loan is approximately 3.76 percent fixed for a 10-year loan and approximately 4.08 fixed for 20 years.
These loans serve as business lines of credit. There are four SBA CAPLines that can help businesses with short-term, seasonal or cyclical working capital needs. All of them can extend up to $5 million in credit. The CAPLines are:SBA Seasonal. To qualify, a business must have been in operation for at least one year and needs to demonstrate a pattern of seasonal activity.
SBA Contract. This version can be used for materials and labor associated with contracts. Interested businesses need to prove experience, profitability and ability to do the work associated with the contract. They must also complete the contract or purchase order.
SBA Builders. Contractors and home builders who build or renovate residential or commercial buildings can qualify by demonstrating experience, profitability and the ability to complete the project.
SBA Working Capital. This SBA line of credit allows small businesses to convert short-term assets – like pending invoices – into cash. To qualify, businesses must generate accounts receivable or have inventory.
The SBA interest rates for all of the CAPLines range from 7.5 to 10.0 percent. The SBA loan payment terms are 10 years, except for Builder CAPLines, which is five years. A credit score of at least 680 and short-term collateral, such as invoices or contracts, are required.
SBA Export Loans. These are SBA loans that provide financing for businesses that need to finance their export activity. Export loans are best suited for businesses engaged in international commerce and are looking to expand in that area. The SBA interest rate on the SBA Working Capital loan typically ranges from six to 10 percent and can fund up to $5 million. The maximum term for repayment is three years.
An SBA Export Express loan is also available for up to $500,000 at an interest rate of 9.75 to 11.75 percent. SBA loan payment terms are up to seven years for a line of credit, and the standard SBA 10-25 years for a term loan.
SBA International Trade loans are also available for businesses that want to enter or expand their presence in international markets. The terms for these loans are the same as the SBA 7(a) loan program. They can provide up to $5 million at an SBA interest rate ranging from 7.5 to 10 percent. The SBA payment terms of the loan range from 10 to 25 years.
A credit score of 680 is required, and the business must already be involved in exporting goods or services to foreign countries. For Export Express, the business must be at least one year old.
SBA Microloans. This is the ideal loan for startups. Microloans can offer up to $50,000 are a good fit for SBA Microloans. They are issued through non-profit, community-based organizations. They can’t be used to refinance debt or purchase real estate. No business history is required, so they can be used to start a business. They are also a perfect fit for home-based businesses and the self-employed.SBA interest rates on microloans range from eight to 13 percent. SBA payment terms are up to six years. A credit score of 640 and some collateral are needed.
SBA Disaster Loans. This group of loans consists of the only SBA loans funded directly by the agency itself. SBA Disaster Loans help companies that have been impacted by a declared natural or economic disaster. These loans are used mainly to fill gaps in the funding of a business once other resources, such as reserves and insurance, have been exhausted. There are three types of SBA Disaster loans:
SBA Business Physical Disaster Loans. These are long-term, low-cost loans for businesses that have been physically damaged by a disaster that occurred within a declared disaster area. The loans cover physical losses and damages, and can replace or repair uninsured property up to $2 million.
SBA Economic Injury Disaster Loans. Businesses that have suffered substantial economic injury as a result of a disaster and cannot meet their normal operational expenses may be eligible for these types of loans. They provide short to medium-term working capital loans up to $2 million.
SBA Military Reservists Economic Injury Disaster Loans. This is an option for a business that has had a key employee called for active military duty. If the employee’s absence has resulted in the business not being able to meet normal operating expenses, these short to medium-term working capital can provide up to $2 million.
SBA interest rates on Disaster loans range from four to eight percent, with SBA payment terms that can stretch up to 30 years. A credit score of 660 and an ability to repay the loan are required.
The SBA report also notes that veteran-owned business employ more than five million workers and contribute $1 trillion to the U.S. economy. As more veterans returned home and discharged, the SBA Veterans Advantage loan has been created to keep fueling this important economic sector.
The SBA Veterans Advantage loan is similar to a standard 7(a) loan. It can provide working capital of up to $5 million to start or grow a small business with no guaranty fees up front for loans of $125,000 or less. For loans of greater than $125,000 veterans can benefit from a 50-percent reduction of guaranty fees up to $5 million.
There are no guaranty fees for all SBA Veterans Advantage Loans under the SBA Express loan program. Under this program, veterans can borrow a maximum of $350,000. This figure was chosen because of all SBA loans that go to veterans, 73 percent are for $350,000 and less.
In addition to loans, the SBA also provides counseling and training to give veterans the support they may need in business.
To qualify for an SBA Veterans Advantage loan, at least 51 percent of the business must be owned and controlled by individuals in at least one of the following groups with the appropriate accompanying documents:
Veterans (other than those dishonorably discharged)
Copy of Form DD 214, which is routinely provided for discharge veterans;
Copy of Form DD 214 or document from the Department of Veterans Affairs confirming the veteran’s service-connected disability;
Active Duty Military service member participating in the military’s Transition Assistance Program (TAP)
DD Form 2 (“U.S. Armed Forces Identification Card (Active),” or DD Form 2 (“Armed Forces of the United States Geneva Conventions Identification Card (Active)” and DD Form 2648 (Active Duty Military member) or DD Form 2648-1 (Reserve Component member);
Reservists and National Guard Members
DD Form 2, Armed Forces of the United States Identification Card (Reserve);
Current spouse of any veteran, active duty service member, reservist or National Guard member or widowed spouse of a service member who died while in service or as a result of a service-connected disability.
The veteran’s Form DD 214 and proof of current status as spouse. For spouses of TAP participants, reservists or National Guard members, other appropriate documentation from the Department of Defense of Department of Veterans Affairs that proves spousal status is acceptable.
Veterans and their spouses who apply for the SBA Veterans Advantage Loan must meet all the requirements of the SBA 7(a) loans. These include a credit score of at least 680, personal collateral and good credit. Two years of operating as a business is preferred, but startups are eligible should the owners have enough experience in the industry and a good business plan.
SBA LOANS FOR WOMEN:
The SBA doesn’t have a loan program specifically targeted for women-owned business. The 8(a) Business Development Program is designed to help small businesses compete in the marketplace. The 8(a) program is a key component in the federal government’s plan to award at least five percent of all federal contracting dollars annually to small businesses owned by socially and economically disadvantaged people or entities.
The 8(a) program is also a good option for minority-owned businesses. Business owners can get certified as an 8(a) business through the certify.SBA.gov website. Applicants will also need to have a profile at SAM.gov before they can use the certification website. The Office of Women’s Owned Business Ownership (WBO) is a good resource for women-owned businesses. It helps women business owners through programs coordinated by SBA District offices. These programs include business training, counseling, federal contracts and access to credit and capital.
Most SBA loans for women and SBA loans for minorities are standard SBA 7(a) loans. The terms and requirements for these loans are the same for women-owned businesses and minority-owned businesses.
APPLYING FOR AN SBA LOAN:
While the SBA offers a variety of loan options – and is accessible to businesses that may not typically qualify for a loan – an SBA loan application still has strict eligibility requirements. The most general requirements are that all major owners of the business must have good or excellent credit. The owners also must have a reasonable amount of equity in the business, and cannot have delinquencies or defaults on other government loans. This includes student loans.
The business must be at least two years old and meet the SBA’s definition of a small business. It has to prove that it tried and failed to get funding from other lenders. The business must also operate as a for-profit entity based in the United States and in an eligible industry. Loan packaging and vice industries such as gambling are examples of industries that typically don’t qualify.
The lender and the type of SBA loan that is being applied for may have additional requirements. If a business fails to meet the age or credit score requirements, it could qualify for an SBA startup loan through the 7(a) program.
Other reasons why an SBA loan application may be rejected is if any of the business owners has a criminal past, or if the business has too many assets.
Personal financial statements for owners who own at least 20 percent of the company;
A written valuation for any asset used as collateral to secure the loan.
Since the SBA guarantees the repayment of the majority of the loan, it’s not uncommon for lenders to ask for collateral to cover the balance. For instance, if the SBA guarantees 80 percent of the loan, the lender may ask for personal collateral to cover the remaining 20 percent.
Businesses that are interested in applying for an SBA loan should find a lender that’s not only knowledgeable about these loans, but also originates many of these loans. Such a lender will save time and increase the chances of getting funded.
The rulings and accompanying injunctions are a major victory for immigrants and immigration advocates but a setback for the Trump administration, which had been poised to implement the public charge rule on Oct. 15. The New York ruling included a nationwide injunction enjoining the implementation of the public charge rule, while the California ruling barred the rule’s implementation in California, Oregon, the District of Columbia, Maine, and Pennsylvania.
“Once again, the courts have thwarted the Trump administration’s attempts to enact rules that violate both our laws and our values, sending a loud and clear message that they cannot rewrite our story to meet their agenda,” said New York Attorney General Letita James, one of the plaintiffs in the New York proceeding, in a statement.
Why was the rule blocked?
Both judges found that the public charge rule, which allows the government to deny green cards and visas to applicants deemed likely to use public assistance based on their health, financial status, age, English proficiency, and other factors, was both unduly sweeping and likely to harm would-be immigrants.
Judge George B. Daniels, who presided over the New York hearing, was scathing in his ruling, declaring that many of the government’s legal and policy arguments were grounded in anti-immigrant ideology and had “no logic” and “no rational basis” underpinning them. Daniels was especially critical of the government’s efforts to incorporate an English proficiency criterion, calling it “simply offensive” to suggest that immigrants without strong English skills would be unable to support themselves.
“The Rule is simply a new agency policy of exclusion in search of a justification,” he wrote in his ruling. “It is repugnant to the American Dream of the opportunity for prosperity and success through hard work and upward mobility.”
What will happen next?
The U.S. Department of Justice is likely to appeal the rulings, with acting U.S. Citizenship and Immigration Services (USCIS) Director Ken Cuccinelli implying that the rulings were the work of activist judges.
“An objective judiciary will see that this rule lies squarely within long-held existing law,” he said in a statement.
What does this mean for me?
IF YOU’RE APPLYING FOR A GREEN CARD OR VISA FROM WITHIN THE UNITED STATES
For now, people applying for green cards and visas from within the United States can breathe a sigh of relief. While the rulings aren’t the final word on the public charge rule, any delay provides an additional window of opportunity for green card applicants, since green card and visa applications received before the rule is formally implemented must be processed using the current rulebook.
IF YOU’RE APPLYING FOR A GREEN CARD OR VISA FROM OUTSIDE THE UNITED STATES
The U.S. Department of State, which largely controls the green card evaluation process outside the United States, follows a different set of “public charge” guidelines. On Oct. 10, however, the agency announced it would conform its guidelines to the new DHS public charge rule. Although the DHS rule has been temporarily suspended, the State Department plans to move forward with enforcing the new guidelines for green card and visa applicants filing from outside the United States.
Is your application in danger of denial under the public charge rule?
A “green card,” issued by U.S. Citizenship and Immigration Services (USCIS), provides proof of lawful permanent resident status, with authorization to live and work anywhere in the United States. Most green cards must be renewed every 10 years, but conditional green cards based on marriage or investment must be replaced after the first 2 years.
U.S. Citizenship and Immigration Services (USCIS), part of the U.S. Department of Homeland Security (DHS), is the government agency that oversees legal immigration to the United States. USCIS is primarily responsible for approving green cards, naturalization, work permits, travel permits, and other “immigration benefits.”
What is a lawful permanent resident?
A lawful permanent resident, also known as a “green card holder,” is a foreign national who is authorized to live and work anywhere in the United States, sponsor certain relatives for their own green cards, and ultimately apply for U.S. citizenship.
A conditional green card is valid for only 2 years, and the designation “CR1” on the physical card stands for “conditional resident.” A conditional green card holder must file Form I-751 to “remove the conditions” and obtain a permanent green card. In most cases, a conditional green card is issued to a spouse who has been married for less than 2 years at the time their green card was first approved.
A green card application may be denied by the U.S. government for several reasons, including but not limited to mistakes on the required forms, missing documents, insufficient financial resources, or failure to demonstrate eligibility. More details about possible reasons for green card denial can be found here.
Can I work in the U.S. while waiting for my green card?
Anyone who already has a valid work visa (for example, an H-1B or L-1 visa) can usually continue working in the United States even while applying for a U.S. green card. Otherwise, green card applicants aren’t allowed to start working in the United States until they obtain a work permit by filing Form I-765. Learn more here.
The Visa Bulletin, issued every month by the U.S. Department of State, shows which green card applications can move forward, based on when the I-130 petition that starts the green card process was originally filed. The visa bulletin exists because Congress caps the number of green cards that can be issued each year in certain categories, which has created several backlogs.
During a biometric screening, a government representative records an individual’s fingerprints and takes their photos and signature, in order to check government records for any serious criminal history or relevant prior immigration violations. The biometrics appointment is typically short and simple.
Most U.S. citizens and U.S. green card holders are entitled by law to sponsor their spouses for a green card, also known as “permanent residence status.” The total cost, wait time, and other details of the marriage green card process vary based on several factors.
What documents do I need for a marriage green card?
The required documents for a marriage green card can vary by situation, but in general the couple must provide evidence, such as proof that the sponsoring spouse is a U.S. citizen or permanent resident; a copy of their marriage certificate; evidence that the marriage is authentic; and evidence that the sponsoring spouse can financially support the spouse seeking a green card.
What is the difference between a fiancé visa and a marriage visa?
A K-1, or “fiancé visa,” is a temporary visa available only to fiancés of U.S. citizens who are living outside of the United States and intend to get married within 90 days of arriving in the United States. A marriage green card is available to spouses of both U.S. citizens and U.S. green card holders, whether living in the United States or abroad, and ultimately provides permanent residence.
There are many ways to get a green card, and the timeline for each pathway is different. Depending on the situation, the marriage-based green card process can last as little as 10 months or over 3 years.
The total cost for each type of green card application can vary. Government fees for marriage-based green cards are $1,760 if the spouse seeking a green card lives in the United States and $1,200 if the spouse lives abroad, in addition to other costs, such as a fee for a required medical examination.
What are the income requirements for a marriage visa?
To be eligible for a marriage-based green card, the applicant must have a U.S. financial sponsor (usually the sponsoring spouse) who certifies in an Affidavit of Support (Form I-864) that their annual income is at least 125% of the Federal Poverty Guidelines (100% for military sponsors). The exact minimum income required — most commonly $21,137 for a couple with no children — depends on where the sponsor lives, the size of their household, and other factors.
How should I prepare for my marriage green card interview?
The final step in the marriage-based green card process is the interview, where the interviewing officer’s primary goal is to assess the authenticity of the marriage. Marriage green card interview questions can focus on the history of the couple’s relationship, as well as their daily activities and future plans as a married couple.
How do we prove our marriage is real or “bona fide”?
A “bona fide” marriage means 2 people who intend to build a future together and who did not marry only for immigration purposes. Evidence of an authentic marriage can include joint financial documents, evidence of living together (cohabitation), tickets and photos from trips taken together, among others.
Although a spouse seeking a green card from abroad can technically visit their spouse in the United States on a tourist visa, doing so is generally discouraged. Not only do immigration officers often deny entry to the United States upon learning of the tourist’s pending green card application, but “misrepresenting” one’s intentions for visiting could also jeopardize the application.
Most green card applicants must have a U.S. sponsor who accepts financial responsibility for them upon arriving in the United States. An “Affidavit of Support” (Form I-864) is essentially a contract between the financial sponsor and the U.S. government, where the financial sponsor demonstrates that they meet the government’s income requirements.
Form I-693 documents the results of the required medical examination for a spouse (or other family member) seeking a green card. For those applying from within the United States, their medical exam is performed by a doctor approved by U.S. Citizenship and Immigration Services (USCIS), who provides a signed Form I-693. For those applying from outside the United States, a State Department-approved doctor performs the medical exam.
The “public charge” rule is a U.S. Department of Homeland Security (DHS) proposal that would reduce the number of people who are eligible for green cards and temporary visas, by redefining what makes someone dependent on government benefits — or likely to use such benefits in the future. If enacted, this policy could also affect some people who already have green cards.
Whether you are running a new business or a generational family business, as a small business owner, there is no greater feeling than when you take a look at the balance sheet and see your business’ net profits are climbing. This is the sign that you are running a successful business and that your business plan is working.
But now that you are making profits, what should you do with them? What areas should you invest in? New employees? Interest-bearing bank accounts? Index funds or mutual funds? Somewhere else?
In this post, we’ll cover the various options your business has for investing its profits as well as why these options can benefit your business in both the short term and long term.
Why Is It Important to Invest Small Business Profits?
Investing small business profits is an important aspect of running a successful business because it allows owners to drive future and sustainable growth. Profits are financial resources your business has already earned, meaning they are not obtained from a loan and your business has no financial liability for them. Reinvesting profits can help you build a positive feedback cycle for your company: Reinvesting profits leads to business growth, which leads to increased profits, which leads to increased reinvestment, which leads to increased business, which leads to increased profits, and so on.
Should You Use Your Profits to Pay Yourself?
Obviously, the goal of operating any small business is to make money, and many business owners start small businesses because of the appeal of self employment in the first place. As such, paying yourself is an essential component of net profit allocation.
However, while you should be paying yourself the proper amount of money to cover your living expenses and additional lifestyle choices, you should also try to refrain from taking net profits exceeding your typical annual living expenses. This also means you shouldn’t continually change your lifestyle to make use of extra business profits.
This is a common mistake a lot of people who own businesses make. By making sure you leave some profits for reinvesting in your business, you can help facilitate the future growth we’ll discuss below. Just $1,000 can make a huge difference when it comes to reinvesting, so always ask yourself, “Do I really need all the money I am taking out of the business?”
What Should You Be Investing Business Profits In?
You have myriad options for reinvesting small business profits. Below, we’ll discuss some. First, however, know that it can be helpful to include your plans for business reinvestment in your business model. This way, you can set clear goals toward your future net profits.
Take time to consider questions like:
How will this help my business?
Which areas of investment would help my business the most?
How do these investments fit into the long term plan I have for my business?
By putting thoughts into these questions early on, and developing a business model and plan for the future, you can make sure that you are not reinvesting in arbitrary, unrelated, and disjointed aspects of your business. You should aim to make sure your reinvesting serves a greater purpose in the grand scheme of your business. A good catch-all question is, “How will reinvesting in this area of my business affect my business in 5 to 10 years?”
Shore Up Your Business Infrastructure and Equipment
Business infrastructure and equipment is a common reinvestment category for small businesses. Updating your business’s equipment and infrastructure when it is advantageous can allow your business to grow. Many times, buying new equipment or updating the company’s infrastructure will allow you to better meet the needs of your customers or business, thereby improving efficiency and/or customer experience.
For example, let’s say you own a coffee shop. Your coffee shop is doing well and your net profit is growing. In fact, your coffee shop has become so popular that it often has a line out the door. At first, you may think this line is positive, but then you realize it’s actually turning away customers who don’t want to have to wait in such a long line. You realize that it’s the capacity of your coffee machines that is causing the problem, not the number of employees. By using profits to buy better, higher capacity equipment, you can increase the number of coffees you can make, shorten the line, drive up business, increase profits, and grow your business! Sounds great, doesn’t it?
Obviously, this example is ideal, and not every scenario will be that cut and dried. But, it provides a window into the fact that reinvesting in business infrastructure and equipment can help take your small business to the next level simply by removing limiting factors — in this case, the number of coffees you can serve in an hour.
As a note of caution, you should make sure that whenever you update equipment it is either necessary or will be beneficial. It is not always necessary to have the latest and greatest machinery, so make sure you are not wasting valuable profits that could be spent more effectively elsewhere.
Embark on a Marketing Campaign
It’s almost never the wrong time to invest in marketing. Marketing is an extremely important aspect of driving business growth and leading potential customers to your website or place of business. Whether through hiring a social media consultant, investing in an ad campaign, or contracting a graphic designer to create compelling and aesthetically pleasing flyers, reinvesting profits in marketing can help you acquire new customers.
For example, maybe you operate a lifestyle clothing brand. Your business is bringing in substantial profits but you think there’s still a lot of room for growth. You could look into influencer marketing, a broad category of marketing that focuses on highlighting your brand through influencers, meaning individuals with large followings on social media and other community based platforms. When an influencer’s followers see this person using your product, they may want to use it, too.
Other options include paid ads through social media sites like Facebook and Instagram, as well as Google Ads. These ad campaigns allow your business to target specific demographics and keywords, which enables your business to effectively reach groups who would be the most likely to enjoy your product. The downside of this is that paid advertising campaigns can be very difficult to operate effectively. As a result, your business may want to look into contracting a marketing specialist in order to get the best return on investment possible.
Hire a New Employee
Hiring new employees, specifically additional employees, is an important aspect of growing a small business. After a while, as a business grows, it can become too demanding for the business owner and the current number of employees to sustain the company and keep it growing. In fact, it can start to hinder growth if everyone is overwhelmed and you have to start cutting corners.
Thus, if your business is growing and your profits are sustainable, you should consider hiring a new employee.
Search engine optimization (SEO) is the process of optimizing your website to achieve a higher rank and higher visibility on search engines, particularly Google. Tailoring your content to keywords — certain words and phrases that receive a high volume of search inquiries each month — gets you seen on Google. This helps your business grow through organic traffic, which is essentially any traffic that finds your site on its own (without clicking on an ad or other form of marketing).
Even more so than marketing campaigns, search engine optimization is a difficult process that requires keyword research, as well as an understanding of how search engines index sites and how internet traffic operates. As such, you might consider reinvesting profits in a part-time SEO consultant.
However, if you are confident you’ll be able to do enough research to gain a foundational understanding of SEO, doing your own SEO work wouldn’t cost your business anything! So, that is another route to consider.
Shore Up Your Cash Flow
Cash flow is an extremely important component of any business, large or small. Too often, otherwise healthy and profitable small businesses succumb to cash flow issues by either spending money too fast or by waiting for customers to pay their invoices.
While there are a number of ways to shore up cash flow, including using merchant cash advances, obtaining SBA loans, or establishing an ongoing line of credit, putting some of your business’s net profits aside to save for a rainy day is one of the best ways to ensure your business has cash on hand if need be.
Remember, cash cannot always be obtained quickly and easily, and cash flow is a real problem for American small businesses all throughout the United States. It’s important to plan for monthly cash flow and make arrangements accordingly.
Invest in Employee Training
Investing in employee training can be a great way to improve the customer experience your business offers.
For example, if you operate an online e-commerce website, odds are you will have a customer service team that handles orders, returns, exchanges, complaints, and more. Consider the following situation. You’ve been observing your customer service employees lately, and you’ve noticed that they haven’t been addressing customer issues with the aim of providing a pleasant and positive customer experience. A possible solution could be sending them to a customer service seminar, or bringing in a professional consultant, so that they can learn more about strategies and tactics for dealing with customers in a way that achieves results desirable for both the customer and the business.
Remember, building a loyal customer base is an essential part of building a small business, and just one poor customer service experience can lead a customer to refuse to return to your business for products or services in the future. It can also lead to your business receiving poor reviews on sites like Yelp, which can discourage potential customers from even giving your business a chance.
As always, proper and adequate employee training is a must for small businesses, and investing in improved or continued training for employees is always a route to consider for reinvesting profits.
Pay Off Debt Early
Paying off debt is never a bad idea for any small business given the proper circumstances. So, what are the proper circumstances? Paying off outstanding debt is only a good idea if it is going to save your business money in the long term. For example, loans that have minimal early exit penalties or no early exit penalties are a great outlet for profits. If you can pay off your debt now to minimize the total interest you pay overall on the loan, that’s great! But first you need to determine whether you should pay off a loan early.
Before paying off debt, make sure to consider the other options and what kind of returns different investments may yield. For example, you may be able to save 2% in interest by paying off a $100,000 loan early. But is that $2,000 actually worth it if you have to pay a $35,000 lump sum to save it? That $35,000 could be put toward something else, such as marketing and business equipment, with a much better return on investment for your business.
Invest Your Profits In the Stock Market and In Bonds
Reinvesting business profits in stocks and bonds is always a consideration. Index funds and mutual funds can provide steady returns on your money that exceed savings account returns. Plus, the diversification aspect of index funds and mutual funds can help shield your business from the risks of buying individual stocks and bonds.
In fact, the annualized return for the S&P 500 index from 1957 to 2018 is roughly 8%, a far better return than one would get by storing their money in a savings account. In order to take advantage of these returns, you can invest in one of the scores of S&P 500 index funds on the market, which are designed to mirror the S&P 500 index.
Try to avoid taking big risks though. The biggest risks are typically what lead to the biggest returns, but they are also what lead to the biggest losses. You wouldn’t want to jeopardize your business’s well-being and future sustainability.
Another downside to consider is that any funds you place in the stock market should not be funds you plan on needing to be able to access in a short time period. The cyclical nature of the stock market, with boom and bust cycles, makes it so that you should be prepared to sit on your investments for a long time in case the market does experience an extended bust cycle.
Additionally, you should try to limit the funds you invest in the stock market to excess profits for which you have no other place at the moment. Remember, while funds in the stock market, if invested properly, will be earning your business money, they will be doing little in the way of growing or expanding your business through avenues like customer acquisition, retail space renovations, customer training, etc. In order to improve these, you will need to invest your profits directly into these avenues.
If you decide to go the route of stock and bond investing with some of your small business’s profits, consider using a financial advisor. They will be able to help you invest your money in a safe, but still profitable, way.
Seeing profits rise is always an exciting time for small businesses, but choosing what to do with these funds can be stressful at times. The important thing is to keep your investments focused on the long term goals of your business. The best way to do this is to have a strong, foundational business plan and model from the get-go. This way, you know where you are headed at all times and can leverage your investments to achieve your end goals. Don’t forget that every extra dollar you reinvest can make a difference. You don’t always have to embark on massive reinvestment plans to achieve meaningful growth for your business. Something as small as putting aside an extra $500 to shore up your cash flow can make a difference in the future. With the proper planning and execution, you can make the aspirations you have for your small business a reality.
There’s nothing more American than starting a business with plan to grow it into a sustainable source of income and, ultimately, pride. Sometimes it takes a small business loan to kick-start the American Dream, though. With that in mind, in this article we’ll look at current small business loan trends in the United States, while contrasting them with trends in other countries.
1. Online Lending
With each passing year, the internet becomes more and more vital to the operation of a well-run business. Online lending is no exception; the market for online lenders continues to expand.
In the United States, online lenders are becoming more and more popular as businesses look to access funds in shorter timeframes. In many cases, online loans can be acquired in less than a week. As people become comfortable conducting their business online, they are less averse to pursuing the many online opportunities that are now presenting themselves. This is especially true for smaller businesses. The United States Small Business Administration’s 2016 report on small business lending noted that “business with annual revenues of $1 million or less…are more likely than larger firms to apply to an online lender for credit/loan.”
In China, online, peer to peer (P2P) lending has seen a massive boom. However, this massive growth has resulted in rampant fraud, and the Chinese government has now begun cracking down on lenders to shrink the size of the market. Bloomberg reported that by the end of 2019, the number of P2P lenders is supposed to drop from 1,021 to 300, a drastic decrease.
Meanwhile, the United Kingdom is also seeing a major increase in P2P lending. The Peer-to-Peer Financial Association reported that lending on the country’s major P2P platforms surpassed £10 billion cumulatively, as recently as December 2018.
2. New, Pro-Business Regulations
The U.S. and the United Kingdom have been seeing an increase in regulations promoting lender transparency.
For example, California recently passed the Truth in Lending Act with a bipartisan vote. The act is similar to the federal version, which passed in 1968, except the California legislation protects small businesses. The new regulations require lenders to be upfront about the interest rates they are charging lenders so small businesses are no longer at risk of entering a deal with unwanted strings attached.
Meanwhile, in the United Kingdom, the Competition and Markets Authority has begun introducing regulations that will require banks to share their clients’ data with third parties when authorized by the client. The hope is that this will allow non-bank lenders to better assess a business’s credit standing, as well as enable lenders to better evaluate funding opportunities. These regulations can also benefit online lenders, which, by combining their data with banks’ data, will now be able to better assess applicants.
3. Increases in SBA Lending
The United States Small Business Administration (SBA) has seen an increase in loan levels over the years, with numbers released for FY17 showing the approval of over 68,000 loans and $30 billion provided to small businesses across the entire United States. This is an increase of 4,000 loans and $5.9 billion from the FY16 levels reported. Loans that the SBA backs include 7(a) loans for small businesses that need working capital; CAPLines for lines of credit; disaster loans; and even microloans for businesses seeking a small amount of working capital to, for example, shore up their cash flow.
SBA loans provide a huge boost to small businesses, many of which would otherwise struggle to obtain loans, especially during the start-up phase. This has been especially influential to the country’s overall financial picture, as small businesses are a massive part of a healthy economy: Small businesses supply incentive for innovation and provide job opportunities. As the U.S. economy continues to boom, SBA loans may be expected to continue climbing.
4. Small Businesses Expansion Through Financing
One particularly positive trend in the United States has been the reason small businesses are applying for financing. According to the same 2017 Federal Reserve Banks report, of the small businesses that applied for financing in 2017, 59% did so to “expand business/new opportunity.” This indicates a trend in proactive behavior, with small business owners actively seeking new opportunities.
5. Brick-and-Mortar Banks Still Run the Financing Show
Both big and small banks remain the number one choice of small business owners seeking funding. The 2017 survey from the U.S. Federal Reserve Banks indicated that of the businesses that reported applying for financing, 48% sought it at large banks and 47% sought financing at small banks. Businesses often find comfort in being able to build a relationship with a lender. This is easiest at a brick-and-mortar bank, where a business owner can discuss their funding with the same team. Rather than dealing with someone different over the phone each time, businesspeople can speak with someone who understands their business and their loan.
As the U.S. economy chugs along, financing trends look to be moving in a positive direction, one that should continue to benefit small businesses. And other countries are seeing similar changes in funding methods. Maybe it’s time to seek out a loan to boost your small business, or even make the leap of starting a small business of your own.
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