Business.com

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• How Content Creates Customers (for Any Small Business)
• Is it a Bad Idea to Link to Your Competitors on Social Media?
• Beyond the Paycheck Protection Program: Loans to Supplement PPP Funding
• Should You Offer Your Employees a PPO?
• Everything You Need to Know About Installment Loans

How Content Creates Customers (for Any Small Business) Posted: 03 Feb 2021 09:02 AM PST Traditional marketing certainly isn't what it used to be. Traditional marketing is what's known as push marketing. Think ads on television, radio, billboards: push, push, push. In today's hypercompetitive landscape, businesses must use a combination of push and pull marketing. Pull marketing, in its simplest terms, is another way of saying content marketing. You've almost certainly heard of content marketing. But do you understand the role it plays in your overall marketing strategy? The faces of content marketing Content marketing is hugely popular; there's a lot of great information out there but also tons of misinformation. People often use the concepts of content strategy, content plan, and content funnel interchangeably, but these are distinctly different things: Content strategy: This concerns the "who" and "why" of your content. Who is your target audience you want your content to help?  Why should they care? Content plan: This deals with the tactical execution of your content. What topics will you cover? Who writes it? When does it get posted? Content funnel: This describes the journey new customers take as they move from strangers to loyal customers. The content funnel The content funnel is one of several funnels that make up your overall marketing funnel. The basic idea behind any funnel is that no one wakes up one day and magically decides they want to buy your product or service. Every purchase involves a journey. An example journey through a content funnel might look like this: A stranger comes across one of your awesome blog posts. They love it so much they download your relevant ebook, turning them into a prospect. Prospect is further engaged with follow-up emails, eventually becoming a customer. Content funnels differ from business to business. Though there is no one-size-fits-all approach, here is a visualization of a typical content funnel from a master of content marketing, Neil Patel. But simply knowing about content funnels isn't enough. To stand out among a sea of competitors, you need to be able to execute a strong content funnel. Entire books have been written on content marketing by people much smarter than me, but there is one rule of thumb all great content marketing has in common: Provide value to your target audience. Our example journey from earlier looked like this: Blog post > e-book download > email follow-up > customer Let's look at how you'd execute this content funnel. Effective blog posts Your audience will always be hungry for content that helps them. High-quality blog posts that engage your audience will build awareness, create trust and generate receptive prospects. But when it comes to blogging, most small businesses guess what their audience wants, or they only write about the things they care about. To write awesome blog posts that actually connect, it's crucial you understand your customer personas. Personas and the key questions A customer persona is a fictional representation of a target customer written as detailed descriptions of who your target customer is, what they like, challenges they face, and their goals. When crafting a persona, I focus on these five questions: What is the end result your target customers want to achieve? What frustrations make them desire the end result? What is their biggest fear in trying to reach the end result? How do those frustrations and fears make them feel? How will the end result make them feel? What are the obstacles between where they are now and the end result? Personas can help you make data-driven decisions based on what your target audience wants. Such data can be obtained from interviews, surveys and market research: Interviews. Interviews provide real answers from actual people that became your customers. Surveys. These offer an efficient way to collect data from a lot of people. Surveys aren't as good as one-on-one interviews, but they can be better than secondhand sources, since you're relying on actual customers/prospects to provide answers to questions of your choosing. Market research. This can be a time-consuming approach, but it allows you to collect huge amounts of information even if you have little or no existing customers/prospects. Online market research Most small businesses, at some point, will need to rely on market research to craft customer personas. It's a great starting point when your customer base is virtually nonexistent and can be refined as you gather more customers. Market research may conjure up images of formal focus groups conducted by people in white lab coats, but the kind of market research I'm talking about can be conducted entirely online. You can learn a ton about your audience by using a fly-on-the-wall approach in communities where your target audience hangs out. Here are some of my favorite resources for performing online market research: Forums: Find forums where your target audience hangs out and look for relevant topics. Amazon: Check reviews of relevant products aimed at your audience. BuzzSumo: Read comments on popular content relevant to your niche/industry. Yahoo Answers/Quora: Search for relevant questions. Twitter Search: Find users talking about relevant topics, competitors or products. Facebook Groups: A good group will be a goldmine of information about your target audience. Reddit: I prefer to use the advanced Google search operator "site:" when looking for relevant discussions. This trick works well with all other forums and discussion-based sites, too.  Once you've answered the five key questions, use those answers to guide you in creating content that connects with your audience. They also come in handy for what's next. E-books and other lead magnets Attracting prospects to your website is the first step. Next, you must pique the interest of your most engaged visitors with a lead magnet. A lead magnet is something of value given in exchange for a visitor's email address, usually via an opt-in form. Today, an email address is a de facto form of digital currency. Your lead magnet must be valuable enough to convince your audience that it's worth exchanging their email for. Lead magnets come in many forms. The most common is the e-book, though they can be guides, white papers, reports, etc. E-books can be three pages, or they can be super long. What matters is, though, that it's packed with good information that's specifically, uniquely valuable to your target audience. Your e-book(s) should be focused on solving one specific "biggest" thing. When creating ebooks, keep these considerations in mind.  Less is more Handing over an email address is a commitment for your prospect. Your lead magnets should be brief. This way, your prospect gets maximum value quickly, creating a favorable impression of your brand. Design matters A bland-looking e-book does more harm than good. Prospects will subconsciously assume your products and services are of subpar quality. As an extension of your brand (and often the first interaction with your brand), your e-book's design is a pivotal reflection of what your business stands for and offers. Make it count. Following up It takes several touches before a prospect will convert into a customer. You need to engage and re-engage several times before you can expect the vast majority of your audience to convert. Remember that email you collected from your prospect in exchange for your e-book? Time to put it to use. Email is the easiest way to re-engage your prospects. A good email campaign is an opportunity to further your relationship with your prospects and stay top of mind until they are prepared to buy. Email follow-ups also seem to be the hardest part of the content funnel for most small businesses. Let's look at a few reasons why and how to make sure you're on the right path. No email follow-up A shocking number of businesses go through the effort of creating blog posts and lead magnets but then have no meaningful follow-up. That's like trying to race with your feet tied up. Your marketing efforts are more effective with a solid follow-up campaign. No email campaign A lot of businesses send one email to their new prospects and call it a day. Remember, it takes several touches to convert a prospect. That requires an email campaign. To do this, you'll want to set up an email autoresponder. Autoresponders are tools that automatically send a series of emails to a recipient when triggered by a certain event, such as the recipient signing up for your e-book. These emails are prewritten and scheduled to be sent out at certain times as defined by you. Autoresponders are one of the few must-have, non-negotiable tools in your online marketing arsenal. No email content Too many businesses send poorly crafted emails. It may take several touches to convert. That doesn't mean you can send your prospects any email and expect it to be effective. You need to provide value. Similar to your e-book, when you're crafting an email, look to help your prospects with one of their biggest problems. Choose a topic that's meaty enough to be broken up into several emails. Those emails will make up your first campaign. A loyal crowd appears Using a value-led content funnel approach, you can transform visitors into fans and customers. By consistently providing value, your authority and trust grows. Eventually, a tipping point is reached where prospects eagerly spend money with you.

Is it a Bad Idea to Link to Your Competitors on Social Media? Posted: 03 Feb 2021 08:04 AM PST Social media is one of the most significant technological developments of the 21st century. Not only does it connect people globally, but it allows you to showcase your creativity to a worldwide audience, network with people with interests similar to yours, and bond with friends over mutual interests no matter how obscure. The internet is built on niche communities, and those communities thrive on social media. Social media has just as many applications for businesses as it does for consumers, but it only works for you as a business owner if you're using your social media presence properly. You can't just plug your own product – if you do, people will ignore you. No one likes being sold to all the time; you have to offer something of value beyond your sales pitch. For your social presence to work for you, you must:  Establish a two-way relationship with your prospects and customers based on trust Demonstrate that you want to help them, placing their needs above your own  Provide useful, helpful and reliable information  Contrary to what you might expect, sometimes achieving the above goals means sharing content from competitors on your own social media feed. Why you should share competitor content in your social media feed There are three key benefits to sharing competitive content:  Social media marketing is inbound: Your content should humanize your brand in a way that builds trust in your audience. By sharing your competitor's content, you position yourself as a go-to source of information about your industry and give your audience a reason to follow you. There's a right way and a wrong way to do this: Keep it within limits, only share relevant content, don't plagiarize other people's content as your own, and use tools to redirect that traffic back to you. Social media marketing is inbound Social media marketing is differentiated by traditional marketing in that it's inbound in nature. The traditional marketing of previous generations involved pushing a message outward to a target audience by way of billboards, TV advertisements, radio spots and newspaper ads. It was unidirectional – that of a brand pushing a message out. Social media marketing works the opposite way. Instead of pushing a message outward, you draw them in by starting conversations with them. In other words, social media is inbound. It's how you have two-way conversations with your audience. In an abstract sense, a business has a personality just like a human has a personality. A business looks, speaks, feels and behaves a certain way, these, and other elements, comprise its brand. Some may argue that not all businesses have a brand, or personality, pointing to corporate behemoths with stodgy, unengaging messaging. While that type of messaging might be boring, that's still a brand choice, though it may not build a loyal, engaged audience easily.  So whenever you post to your business's social media feed, a key concept to remember is that your audience – the people at the other end – want to engage with another human being, not a logo. This should be the purpose of your content, on social media, on your blog and elsewhere: to humanize your brand to the extent that your audience feels they can interact with it like they can with a person. Curating third party content is standard in social media marketing The objective of your social media marketing is to humanize your business to your audience, so how does sharing your competitor's content accomplish that? People are continuously bombarded with information. Attention is one of the most important resources we have as individuals, and it's finite. By curating the content produced by other brands, including that of your competitors, you're signaling to your audience that you're there to help them. You are sharing content with them not because it directly benefits you, but because it makes their lives easier, better, more financially sound, or more convenient. In other words, you're telling them that you prioritize their needs over your own and that you're there to help them rather than promote your own product or service. Many of the most well-known people in the digital marketing space do this all the time as an act of good faith to their audience. Author and online marketing expert Neil Patel links out to his direct competitors in his blog content several times a week. So how does sharing content from your competitor's websites or social media platforms help you as a business owner? Doesn't that drive traffic away from you and to your competitors? Not necessarily. If anything, content curation should be a part of your social media strategy. A business that does nothing but post their own product or service is going to be ignored. At the same time, it's extremely difficult to produce all of your own content with enough volume so it shows up in the platform's algorithms. Writing copy, taking and editing photos, and designing graphics that are tailored to each platform is incredibly time-consuming – particularly when you are managing a robust posting schedule. The right algorithm is about a 70/20/10 ratio: 70% is your own content, 20% is content shared from other sources, 10% is content that directly promotes your product or service. This is known as the 70/20/10 rule, and it's one of the theories behind content marketing. Benefits of linking to competitors Here are a few of the benefits you can get when you curate your competitor's content: Your audience perceives you as more trustworthy. Brand trust takes time and effort to build and often takes months or years to happen. When people use social media, they're not doing so with the intention of buying your product, or even your competitor's product, but to gather information. They're learning about world news, information about their industry, sharing with family and friends, and talking to people with similar interests. If you can provide them with the information they're looking for, you'll win them over from your competition. By positioning yourself as a source of information for your followers, you're essentially treating your brand like a media company. You're choosing the articles, photos and clips that you think your audience will enjoy the most. Sharing your competitor's content for no other reason than because you think it benefits your audience positions you as a go-to source of information for them. This amounts to a good-faith demonstration of trust, and trust is ultimately what leads to sales. It establishes you as a thought leader. Consumers will put the time in to do their own research to make the best decision possible. They're probably using tools like Owler and Trustpilot to compare you to other businesses that provide a similar product or service. It's highly likely that your audience already knows about your competitors and their offerings.  Sharing your competitor's content gives you an opportunity to control the conversation. Be selective about the content you share, and add your own spin on it. It demonstrates confidence in your brand. Sharing your competitor's content with your social media followers can demonstrate that you're confident in the value of the content you provide to your followers. You'll project confidence that you aren't threatened by competition. The right way to curate your competitor's content There are risks to sharing your competitor's content, and it can backfire if you don't use a strategic and methodical approach. You can't just share anything. If you're sharing the content that your competitors produce, then it needs to be very closely related to who you are as a business and what you do. Here are some things to keep in mind when you're considering sharing some of your competitor's content: 1. Ask yourself these questions. Before sharing your competitor's newest blog post on your own Twitter feed, ask yourself: Whom should I share this with? How does this content help them? Is the information reliable?  Has it been fact-checked? Is this content unique and worthy to be shared? If the answers to all of the above questions are yes, share it. 2. Add your personal take. Content that's shared with your competitors requires context. Posting your competitor's content may come across as confusing if your audience doesn't understand why you're doing it. Write a sentence or two explaining why you're sharing it with your audience. What's new about it? How will this information serve them? 3. Be sure to link to and tag them. Taking your competitor's content and passing it off as your own is a no-no and will come with weighty repercussions, like damaging your reputation and negatively impacting your trustworthiness.  When you post your competitor's content, link to them, and tag them on whatever handle they use. This is also a good way to get on their radar.  4. Use tools to get that traffic back to you. Most business owners are hesitant to share any content made by their competitors, and with good reason. Sending your audience to a competitor's content would give business to your competitor and not to you. There are many ancillary benefits to sharing your competitor's content, but ultimately, you need a way to redirect your audience back to you, lest they be lost to your competitor. Social media tools exist that add a call-to-action button on whatever page you share on social media and redirect that traffic back to your website. This way, you can use the content you curate from your competitors to increase your conversions.

Beyond the Paycheck Protection Program: Loans to Supplement PPP Funding Posted: 03 Feb 2021 05:36 AM PST In 2020, many small businesses applied for and benefited from the federal Paycheck Protection Program (PPP). This forgivable loan offered much-needed financial assistance to struggling businesses that wanted to keep employees on payroll during the pandemic. With the second round of PPP loans now available, small business owners may wonder whether they're eligible to apply, and if they are, whether the funds they receive will be enough to keep them afloat. While the PPP is a huge factor in overall economic recovery during COVID-19, it's not the only option for businesses that need a financial boost. Here's an overview of what steps businesses can take if receiving a PPP loan isn't enough. How does the Paycheck Protection Program work? In March 2020, President Donald Trump signed the CARES Act, a $2 trillion stimulus package for COVID-19 relief. Within that bill was the Paycheck Protection Program, which gave government-backed, forgivable loans to businesses to help cover payroll and the cost of facilities. These loans could be up to 2.5 times the company's monthly payroll expenses, with loans having a cap at $10 million. Another round of PPP loans under the Paycheck Protection Program was signed into law on December 27, 2020. These loans are now capped at $2 million per loan, instead of the original $10 million. Businesses that previously received a PPP loan can apply for a "second draw" loan, so long as they have used (or plan to use) the full amount only for authorized uses, and still meet the eligibility requirements. To apply for a first or second draw PPP loan, businesses must meet the following conditions: Businesses must have fewer than 300 employees. Businesses must demonstrate a 25% reduction in quarterly revenue between comparable quarters in 2019 and 2020. Businesses must have been operational as of February 15, 2020. Businesses must meet other Small Business Administration (SBA) requirements. Sole proprietors, independent contractors and self-employed individuals are eligible. What if my PPP loan isn't enough? Receiving a PPP loan can be extremely helpful for struggling businesses, but it's not a silver bullet solution. The loan can only be used for payroll and other eligible operational expenses if business owners want to qualify for forgiveness. Many businesses have found that PPP funds are not enough to help them stay open and keep growing. Fortunately, there are other financial solutions that business owners may find more flexible or useful to supplement their PPP funds. These loan products can also be a helpful solution if your business doesn't qualify for a first or second draw PPP loan. Term loans Taking out a term loan allows a small business to borrow money and repay it over a specified repayment schedule with a fixed or floating interest rate. These loans can run from 18 months to 25 years, depending on the lender you work with and the amount you're borrowing. These loans are typically paid back on a monthly or quarterly payment schedule. You can combine a term loan with your PPP loan to cover costs that are not included in the PPP. Line of credit A line of credit is a preset borrowing limit that a business can arrange with a financial institution. The borrower can access funding from the line of credit at any time, so long as they do not exceed the maximum amount, and pay it back as they can. If your business does not already have a line of credit, applying for one can be a smart and flexible financial solution to supplement your PPP loan. Invoice factoring Businesses aren't the only ones struggling right now, and many are dealing with customers and clients who have been unable to make timely payments. Through the invoice factoring process, companies can sell their unpaid invoices to a third party that will advance them 70 to 90% of the invoice upfront, with the remaining balance sent when the invoice is paid off (minus a fee for the factoring company). If your clients are struggling to make their payments because of COVID-19, invoice factoring might be able to help you with your cash flow until your invoices are paid. Equipment financing The coronavirus has caused businesses to make certain changes to their operations, some of which require additional equipment to meet new safety precautions. Small business owners can take out loans specifically to finance these expensive equipment purchases. Bridge capital A bridge capital loan is a short-term loan that is used as financing until a person or company secures stable financing or removes an existing obligation. Small businesses turn to bridge loans as an alternative to traditional loans because of their quick application and funding process. Bridge loans, however, tend to have higher interest rates and shorter terms. SBA 7(a) loan An SBA 7(a) loan is helpful for small businesses; it offers no down payments, low interest rates and longer repayment terms. It is partially backed by the SBA and has flexibility as to how the funds are used. If you're a young business and you need more than the PPP loan to improve your cash flow, it's worth looking into applying for an SBA 7(a) loan. How to apply for a business loan  While every lending institution may look at different criteria for different types of loans, there are a few common elements each will look for. No matter what type of loan you're applying for, you should have the following documents prepared and ready before applying for a loan: Two to three years of financial statements and tax returns Accounts receivables reports At least three to six months' worth of bank statements A business plan Proof of business ownership Wondering what your chances of approval are? Here are a few factors that typically influence a small business's odds of getting a loan: Credit score Lenders will examine your personal finances, which includes your personal credit score. Because lenders look for a personal guarantee on debt, having good credit standing can increase your odds of being approved for a loan. Cash flow Lenders will examine your sales, revenue and expenses to ensure you can meet the repayment obligations. Positive cash flow statements for your previous year gives a prospective lender reassurance that you'll be able to make your payments on time and in full. Debt-to-income ratio Lenders won't want to give a loan to companies with significant debt. They usually prefer to see less than a 30% debt-to-income ratio for new small business loans. Collateral Some lenders require collateral, such as real estate, to protect their loan. This gives them an asset that they can take control over in case the business defaults on its loan. What to look for in a business lender If your small business is looking for a lender, here's what to look for: Experience lending to businesses in your industry. Assess lenders using your own eligibility criteria. Make sure that they have experience in your industry so that they understand how the economy affects business and can be flexible when needed. Positive customer reviews. Small businesses want to work with lenders that provide their borrowers with positive experiences. Search for and read reviews online for the lenders you're looking into, reading both positive and negative reviews to get a holistic view of them. Ask fellow business owners which lenders they've worked with and recommend. SBA approval. Any business lender you assess should be approved by the SBA. You'll know you're working with a reliable and trusted vendor who has been vetted by this organization. Transparency about loan products and terms. Some lenders may charge fees if you repay the loan early, or they may fail to disclose that interest rates may increase. Have a direct conversation with potential lenders. Ask them to be transparent about the approval and repayment process and if there are additional expenses that are in the fine print. Finding small business lenders with access to financial products will help fuel economic recovery in 2021 and beyond. Many small businesses and startups are wary about taking out loans. However, with the right lender, the process can be both straightforward and fair to you and your company. If you're looking for a business lender that can offer a personalized and small business-friendly experience, consider SBG Funding. SBG has solutions to help your small business grow, including all of the above financial products and its own COVID-19 relief resources.

Should You Offer Your Employees a PPO? Posted: 03 Feb 2021 05:00 AM PST Offering a comprehensive, affordable health insurance package is one way for small businesses to attract and maintain top talent. There are several types of healthcare plans you can offer. While many companies offer a health maintenance organization (HMO) plan, an alternative option is a preferred provider organization (PPO) plan. A PPO differs from an HMO in several ways and has advantages and disadvantages for employers and employees alike. Understanding these details can help you determine whether a PPO is the right choice for your business and your team. What is a PPO? A PPO is a network of primary and specialty physicians, other healthcare professionals, and facilities (i.e., hospitals, clinics, and laboratories). Participating physicians, healthcare professionals and facilities – known as "in-network providers" – contract with insurance companies to provide care to covered individuals at an agreed-upon reduced rate. In-network providers are on what is called a "preferred provider list." Generally, PPO plans give plan participants a significantly greater choice of medical professionals to choose from when they need medical care. How does a PPO plan work? When employees who are enrolled in a PPO plan obtain care from an in-network provider (doctors, hospitals, etc.), the insurance company pays the provider the full agreed-upon rate, and the employees cover any co-pay or deductible. When employees receive care from an "out-of-network" provider, the claim is paid, but not at the full, agreed-upon rate. In these cases, employees are responsible for more out-of-pocket costs. "In a PPO, (you) generally have the freedom to pick from the preferred list," said Ed Oleksiak, senior vice president for the insurance brokerage firm Holmes Murphy & Associates. "If you don't use the list of preferred providers, then the provider can bill [you] for amounts above what the health plan is willing to pay – in addition to what the plan has defined as your share of the costs."  What are the major differences between a PPO and an HMO? There are five significant differences between an HMO and PPO:  Cost. Premiums for a PPO plan are higher than premiums for an HMO plan. The same is true of deductibles and copays for members. Choice of providers. When using a PPO, employees have more flexibility in terms of in-network providers. This is because the agreed-upon rates for a PPO provider are typically higher than rates for an HMO provider. More providers are willing to participate in a PPO plan than in an HMO plan, giving plan members (e.g., your employees) a more extensive choice of care options. Network reach. Unlike a PPO, which expands the number of providers across multiple networks, HMOs can be limited in that respect. "An HMO is usually limited to a geographic region or state and, in some cases, to certain facilities or medical systems," said Jason Pastrano, a partner at Brio Benefit Consulting. Extent of coverage. A member of a PPO plan is covered for care received from an out-of-network provider, albeit at a lower rate than for care received from an in-network provider. An HMO plan only offers coverage for care received from an in-network provider, except in an emergency. Utilization management and care coordination. An HMO plan generally comes with more cost control and utilization management requirements for members and providers. An HMO generally requires that members get a referral from their primary care provider (PCP) before visiting a specialist; failure to do so leads to a denial of the claim. Such a requirement is not usually imposed by a PPO plan, leading to a more streamlined care experience. What are the pros and cons of a PPO for employers? Pros Can offer uniform healthcare coverage. This is especially valuable to businesses with locations in multiple locations. "With a PPO, employers with offices in more than one state or region can offer national network access, with the same benefits available to all employees" no matter their location, Pastrano said. Happier employees and increased employee retention. Having more freedom in the medical professionals they can see can be a significant perk for some employees. "Because a PPO network is bigger, employees may be happier with this kind of plan, fostering employee retention," said Noor Ali, a physician, licensed health insurance professional and owner of healthcare insurance advisory firm Noor Healthcare Advisor. Ali has also found that employees prefer a PPO because they know it is both difficult and expensive to obtain this kind of medical plan on their own.  Cons Higher premiums. The increased flexibility PPOs offer does come with a cost. "The difference in price between the premiums employers pay for a PPO and the premiums employers pay for an HMO can be as much as 15%," said Grant Dodge, an insurance broker at Health Benefits Associates Inc. Susceptibility to medical inflation (and other complications). PPOs sell their product offering to employers by claiming to have "the biggest network" of providers, said Jim Edholm, a partner at the benefits consulting firm Business Benefits Inc. "That can mean lower discounts on care, because the benefits to providers from a larger network are less rich than those from a smaller network," he said. "So, there is little protection against medical inflation." Complicating matters, the Medical Loss Ratio (80/20) Rule, a component of the Affordable Care Act, prohibits insurance carriers from spending less than 80% to 85% of collected premiums on medical claims. Edholm said this allows for carrier overhead. An example Edholm gave is if the applicable premium to a $700 expense is $875, the carrier would "earn" $175. On the other hand, if the plan spent $800 and maintained the 20% overhead allowance, the premium would be $1,000 and the carrier would "earn" $200. "As a result, there is a perverse reverse incentive – that is, the carrier makes more when it pays for claims, which means it collects more from employers," he said. "It is a Catch-22."  What are the pros and cons of PPOs for employees? Pros Access to a more extensive network of healthcare providers. Such flexibility can make it easier for employees to find care. It can also increase the likelihood that they will not be forced to "settle" for using in-network providers they do not like. But keep in mind – and remind employees – that "extensive" does not mean "unlimited." According to Dodge, some individuals believe PPO plans allow them to see any physician they choose. However, this is not really the case. While PPO members can go outside the network for care, doing so usually comes at a "much higher [out-of-pocket] cost." The reason: PPOs pay a smaller portion of the tab for service delivered by out-of-network providers than for services delivered by in-network providers. No referral requirements. PPO members can see a specialist without a referral from their primary physician, decreasing or eliminating delays in receiving the care they want or need. Cons Higher costs. Employers aren't the only ones who pay a higher price for PPO plans. "Higher premium costs [paid by employers] can lead to higher contribution costs for employees," Pastrano said. Deductibles and copays may also be higher, even when employees use in-network providers. Confusion about, or complications around, providers' participation in a particular PPO can increase costs more. Edholm offered the example of a patient who undergoes surgery performed by an in-network physician. "Sometimes, the anesthesiologist at a hospital is not part of a PPO, even though the hospital is, and the employee receives a massive bill, he said. What else should be considered when deciding whether to offer a PPO or HMO? Ideally, you can give employees a choice of a PPO or HMO health coverage plan. However, budget-related constraints or other obstacles may force you to offer just one of these options. Consider these factors when determining which way to go. Budget. There are cost savings to consider when choosing between the two. An HMO is usually cheaper.  Workforce demographics. Mike McNulty, an independent insurance agent said the type of plan you pick may be influenced by your workforce demographics. For example, if most of your employees are young and healthy, they may not mind the restrictions of an HMO – and you will probably appreciate the savings. If employees are older and/or visit specialists regularly, the simplicity and flexibility of the PPO could make it the right option for your business. Employee location. Where your employees live should also be a consideration. "It is important that the providers available on the list match well with your employees' geographic location," Oleksiak said. "Most health plans make sure they have an adequate network of providers across all medical disciplines. However, based on the geography or preferences of the employees, the 'preferred' list may not be a good fit." If your business has "employees across the country, a PPO plan is a must," said Dodge. This is because HMO coverage is typically limited to care delivered by providers in the state in which the employer is headquartered.  Employee input. The sources we spoke with also recommended asking your employees about their preferences – it gives them a sense of ownership in the decision, which they appreciate. Additionally, employees are not always open to changing providers if they already have relationships with the physicians from whom they have been receiving care. "The challenge to employers – and employees– is finding a balance between more choices and higher cost while always making sure quality isn't sacrificed," Oleksiak said. Still, deciding between a PPO and an HMO – or figuring out whether you can offer both – does not need to be difficult, providing you understand the ins and outs as laid out here.

Everything You Need to Know About Installment Loans Posted: 03 Feb 2021 04:30 AM PST In this era of fast and short financing, it's understandable that small business owners may overlook installment loans. After all, they require more documentation than some of the other types of lending products in the marketplace. But this type of loan – in which you get a lump sum you repay over a predetermined amount of time – gives you predictability and a fixed interest rate, which could prove advantageous as you grow your enterprise. "I like installment loans because, with other loan products out there, the payment may vary and it's unclear what the APR is," Joseph Meuse, founder and president of Business GPS, told business.com. "A lot of business owners know how to deliver a product or service, but they aren't a CFO. The loan product is easy for them to understand and budget for."   Editor's note: Need a loan for your business? Fill out the below questionnaire to have our vendor partners contact you with free information.   How do business installment loans work? Business installment loans work like a mortgage or car loan: You borrow a lump sum of money and must pay it off over 12, 24, 36, 48, or 60 months, sometimes longer. The interest rate you pay on the loan is fixed and is dictated by your credit score. The cost for funding is much lower for borrowers with high credit scores than for those who have bad credit. Installment loans can be used to purchase equipment or property, for working capital, or to consolidate debt, among other things. Whether an installment loan is the best funding product for your business depends on why you need the cash. "You don't want to take a debt obligation for too long to provide a solution for a cash need that may be short," said Josh Jones, chief revenue officer at Kapitus. "Knowing your needs is super important." What are the types of business installment loans? Small business installment loans can be used to purchase a vehicle or piece of business equipment, to acquire property, or to pay down expensive debt. They come in different terms, depending on your business needs. Long-term loans: These loans have terms of six years or longer. They are typically used for big purchases such as a company vehicle or property. Medium-term loans: These loans have terms from two to five years and are commonly used to purchase business equipment or to fund expansion. Short-term loans: These loans have terms of less than two years. They are typically used to purchase inventory, to fill gaps in cash flow, for working capital, or for other short-term cash needs. The longer the term of the installment loan, the more interest you'll pay and the harder it is to get approved. Lenders are taking a bigger risk when they commit to you for six years rather than 18 months, so they charge more. "Whether you are using it for a vehicle, a piece of equipment, or mortgage, make sure you're using the cash for something you purchased over the course of the payback term," Jones said. "If you're not using the money over the payback terms, an installment loan may not make sense." What do you need to apply for a business installment loan? A small business installment loan isn't as easy to get as other financing options. Banks, credit unions, and alternative lenders all offer installment loans but expect a higher credit score and greater business strength than they do for other financing types. That's particularly true during the COVID-19 pandemic, with lenders being even more risk-averse. That means you'll need a good credit score, a sound business, and the willingness to offer up collateral. "If you have assets, equipment, real estate, or accounts receivable you can use as collateral, an installment loan is for you," Meuse said. "There's more documentation required these days, sometimes a little bit higher credit score, and sometimes loans-to-value [ratios] are less, but lenders have a good appetite." From your credit score to business bank account statements, here's what applying for an installment loan entails. Credit score Lenders are risk-averse, so your chances of getting a low-interest installment loan depend largely on your proven ability to pay it back. That's where your business and personal credit score come in. Unless your company has been in business for years and has solid revenue growth, lenders will look at your personal credit score to assess your creditworthiness. If your credit score is low, they will either deny your loan application or charge you a higher interest rate. Banks and credit unions typically have higher credit score requirements than alternative lenders. Some lenders cater to business owners with poor credit. Collateral Business installment loans are typically secured, which means you must put up collateral. Collateral can be an asset such as equipment, accounts receivable, or property, which the lender gets if you default on the loan. Personal guarantee Unless you run an established business with years of revenue growth, lenders will require more than collateral; they'll want a personal guarantee from you. This is a legally binding statement that you will pay back the loan personally if your business can't. Business plan To approve you for a loan, lenders will want to know about your business. That's where the business plan comes in. You want to have a compelling story, laid out in a slide deck or on paper, that shows your plans and your pathways to growth. It should be clear, concise, and detailed, showing lenders a sound business idea. The plan should include how much money you need and why, how you'll pay back the loan, and the assets you're willing to put up as collateral. Business and personal documentation Lenders require a lot of documentation about your business and personal finances to approve your loan application. Banks and credit unions require more paperwork than alternative lenders, but either way, it's important to have it all ready before you apply. Each lender has its own twist on documentation, but these are the most common requirements: Bank statements Tax returns Business plan Proof of business ownership Personal information What are some tips for shopping for a small business loan? Installment loans are a viable option for small business owners if they shop smart and choose the best lender for them. You don't want to be stuck with a high-interest loan and a lot of hidden fees. That's why Libby Morris, vice president of operations at Funding Circle US, said it's important to pay attention to all the costs associated with an installment loan. "One of the things we look for as part of our responsible lending is, are they disclosing all their fees?" Morris said. "Small business lending is not as highly regulated as consumer lending. You may see a good rate and there's all these hidden fees." Morris said to avoid lenders that charge you a prepayment penalty for paying your loan back early. When you apply for an installment loan, Morris said, be prepared for a counteroffer from your lender, particularly in the current environment. With the coronavirus still out of control, lenders are wary about taking on too much risk. They have an appetite for lending but may not want to be as generous as you hope. Morris said it's not surprising for a business owner to apply for $500,000 and get approved for $300,000. "You have to be flexible in how much you really need," she said.

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