Written by Janet Gershen-Siegel

Are You Looking at NUGROWTH-IBIS for Business Funding?

Our NUGROWTH-IBIS review can help you make a smart financial decision.

NUGROWTH-IBIS is one of several lending companies in the online space. They provide working capital advances to companies in both the United States and Canada. We look at the specifics and drill down into the details. If you have been looking for an online lender, you have probably come across them.

Background

NUGROWTH-IBIS is located online here: http://www.nugrowthcapital.com/.Their physical addresses are in New York, NY and Toronto, Ontario. You can call them at: (845) 920-7572. You can email them at: info@nugrowthcapital.com. They do not seem to have a contact page.

Working Capital Advances

Minimum annual revenue required is $120,000. You must have a personal credit score of 550 or better although it seems they will change terms if your credit is poor. However, it is unclear from their website just how the terms would change.

They will ask about your intended use for the funds you request. But that does not seem to have an impact with respect to your chance for getting funding.

Your company must be in business at least one year. NUGROWTH-IBIS will also want to see the most recent four months’ worth of your business bank account statements.

They offer $5,000 – $250,000, with flexible terms. The process takes as little as 72 hours.

Fees

“A small percentage of your daily sales revenue is withheld until the total amount is repaid.”

Advantages

Advantages include a quick turnaround and flexible terms. Few American online lenders will lend outside of the United States. However, OnDeck (https://www.ondeck.com/) also does so, and with a lower minimum personal FICO score requirement.

Disadvantages

Disadvantages include the fees being based on sales revenue. NUGROWTH-IBIS’s variable fees make budgeting more difficult. In addition, the lack of clarity is troubling regarding different terms for poor personal credit.

Alternatives

But there is a huge alternative to working with NUGROWTH-IBIS, and that’s building business credit.

Business Credit Building

Business credit is credit in a small business’s name. It doesn’t connect to an entrepreneur’s individual credit, not even if the owner is a sole proprietor and the sole employee of the company.

The Benefits

Because business credit is independent from individual, it helps to protect a small business owner’s personal assets, in the event of a lawsuit or business insolvency. Even new ventures can do this.

Going to a bank for a business loan can be a recipe for disappointment. And working with an online lender can have its own challenges. But building small business credit, when done correctly, is a plan for success.

Personal credit scores rely on payments but also additional elements like credit utilization percentages. But for corporate credit, the scores actually just hinge on whether a corporation pays its invoices on time.

The Process

Building small business credit is a process, and it does not occur automatically. A corporation will need to actively work to establish business credit. Having said that, it can be done easily and quickly, and it is much faster than developing personal credit scores. Vendors are a big part of this process.

Undertaking the steps out of order will cause repeated rejections. Nobody can start at the top with corporate credit. For example, you can’t start with store or cash credit from your bank. If you do you’ll be rejected 100% of the time.

Company Legitimacy

A company needs to be legit to creditors and vendors. For this reason, a small business will need a professional-looking web site and e-mail address, with website hosting bought from a vendor such as GoDaddy. Also company telephone and fax numbers need to be listed on ListYourself.net.

At the same time the business telephone number should be toll-free (800 exchange or comparable).

A business will also need a bank account dedicated purely to it, and it must have all of the licenses required for operating. These licenses all must be in the identical, appropriate name of the corporation, with the same corporate address and telephone numbers. Bear in mind that this means not just state licenses, but potentially also city licenses.

Working with the IRS

Visit the Internal Revenue Service website and acquire an EIN for the small business — they’re totally free. Select a business entity like corporation, LLC, etc. A company can get started as a sole proprietor but will probably want to switch to a kind of corporation or partnership to reduce risk and make the most of tax benefits.

A business entity will matter when it involves tax obligations and liability in the event of a lawsuit. A sole proprietorship means the entrepreneur is it when it comes to liability and tax obligations. Nobody else is responsible.

If you are a sole proprietor at least file for a DBA (‘doing business as’) status. If you do not, then your personal name is the same as the small business name. Therefore, you can end up being directly accountable for all company financial obligations.

Plus, per the Internal Revenue Service, using this structure there is a 1 in 7 probability of an IRS audit. There is a 1 in 50 possibility for incorporated businesses! Avoid confusion and substantially reduce the chances of an Internal Revenue Service audit as well.

Kicking Off the Business Credit Reporting Process

Begin at the D&B web site and obtain a cost-free DUNS number. A DUNS number is how D&B gets a corporation into their system, to generate a PAYDEX score. If there is no DUNS number, then there is no record and no PAYDEX score.

Once in D&B’s system, search Equifax and Experian’s websites for the company. You can do this at https://oldcs.creditsuite.com/reports/. If there is a record with them, check it for correctness and completeness. If there are no records with them, go to the next step in the process. By doing this, Experian and Equifax will have something to report on.

Trade Lines

First you need to build trade lines that report. This is also called vendor credit. Then you’ll have an established credit profile, and you’ll get a business credit score. And with an established business credit profile and score you can begin acquiring revolving store and cash credit.

These kinds of accounts often tend to be for the things bought all the time, like coffee, shipping boxes, outdoor work wear, ink and toner, and office furniture.

But first of all, what is trade credit? These trade lines are creditors who will give you preliminary credit when you have none now. Terms are generally Net 30, instead of revolving. So if you get approval for $1,000 in vendor credit and use all of it, you need to pay that money back in a set term, like within 30 days on a Net 30 account.

Details

Net 30 accounts have to be paid in full within 30 days. 60 accounts must be paid fully within 60 days. Unlike with revolving accounts, you have a set time when you have to pay back what you borrowed or the credit you used.

To start your business credit profile the proper way, you ought to get approval for vendor accounts that report to the business credit reporting bureaus. As soon as that’s done, you can then use the credit, pay back what you used, and the account is reported to Dun & Bradstreet, Experian, or Equifax.

Not every vendor can help like true starter credit can. These are merchants that will grant an approval with very little effort. You also need them to be reporting to one or more of the big three CRAs: Dun & Bradstreet, Equifax, and Experian.

But you may need to apply more than once to these vendors, and you may have to purchase some things you do not really need, to validate you are trustworthy and will pay timely. Consider giving nonessential items to charitable organizations.

Revolving Store Credit

Once there are 5 – 8 or more vendor trade accounts reporting to at least one of the CRAs, progress to revolving store credit. These are companies like Office Depot and Staples. These companies are more likely to have supplies you need. Use the business’s EIN on these credit applications.

Fleet Credit

Are there 8 – 10 accounts reporting? Then move to fleet credit. These are service providers like BP and Conoco. Use this credit to purchase, fix, and maintain vehicles. Make sure to apply using the business’s EIN.

Cash Credit

Have you been responsibly handling the credit you’ve up to this point? Then move onto cash credit. These are companies like Visa and MasterCard. Keep your SSN off these applications; use your EIN instead.

Monitor Your Business Credit

Know what is happening with your credit. Make certain it is being reported and attend to any errors as soon as possible. Get in the practice of taking a look at credit reports and digging into the specifics, and not just the scores.

We can help you monitor business credit at Experian and D&B for only $24/month. See: https://oldcs.creditsuite.com/business-credit-monitoring. Update the relevant information if there are inaccuracies or the data is incomplete.

Challenging Mistakes

What’s all this monitoring for? It’s to contest any problems in your records. Mistakes in your credit report(s) can be taken care of. But the CRAs typically want you to dispute in a particular way.

Disputing credit report inaccuracies typically means you send a paper letter with copies of any proof of payment with it. These are documents like receipts and cancelled checks. Never send the originals. Always send copies and retain the original copies.

Disputing credit report errors also means you precisely spell out any charges you dispute. Make your dispute letter as clear as possible. Be specific about the concerns with your report. Use certified mail so that you will have proof that you sent in your dispute.

Be Smart

Always use credit sensibly! Don’t borrow more than what you can pay back. Track balances and deadlines for payments. Paying off on time and completely will do more to boost business credit scores than virtually anything else.

Growing business credit pays off. Excellent business credit scores help a company get loans. Your lending institution knows the company can pay its financial obligations. They recognize the company is bona fide. The small business’s EIN attaches to high scores, and creditors won’t feel the need to demand a personal guarantee.

Takeaways

With payments made via withdrawals straight from sales revenue, it is easy to pay NUGROWTH-IBIS back – and that can be very attractive to entrepreneurs. It’s one less thing to think about. This lender is also an option for Canadian companies and there are few American online lenders which are.

With a lack of clarity and variant fees based on sales revenue, NUGROWTH-IBIS raises as many questions as it answers. For borrowers interested in doing business with this lender, the prudent move is to ask a lot of questions and not be satisfied – or sign anything – until they are all completely and satisfactorily answered.

A Word to the Wise

And finally, as with every other lending program, whether online or offline, always make certain to remember to read the fine print and do the math. Go over the details with care, and decide whether this option will be good for you and your company.

In addition, consider alternative financing options that go beyond lending, including building business credit, in order to best decide how to get the money you need to help your business grow. Today, we want to hear from our audience! Share your voice with us about your experiences with online lenders, and what you think of our NUGROWTH-IBIS review.