Published By Janet Gershen-Siegel at July 31, 2018
Written by Janet Gershen-Siegel
We hope our BlueVine review will help you make the smartest possible business decision you can make.
BlueVine is one of several lenders in the online space. They offer Invoice Factoring and Lines of Credit. They confirmed the information we had found on them. We look at the specifics and drill down into the details.
BlueVine is online here: https://www.bluevine.com. Their physical address is:
401 Warren Street #300
Redwood City, California 94063.
You can telephone them at: (888) 216-9619. Their contact page is here: https://www.bluevine.com/contact-us/. They have been in business since 2013.
You don’t have to factor everything and can fund only the invoices you select. There are no reserves or minimums, and you can use factoring as long as you need to. Their system syncs with your accounting software and they allow for a connection with QuickBooks Online, and they also work directly with FreshBooks and Xero. Rebates are distributed on the same day.
They offer up to $2,500,000 in invoice factoring financing. Your business must be either B2B or B2G. That’s business to government. BlueVine does not work with medical or health care industry businesses at this time.
Your business must have revenues of $10,000 or more per month. Also, your submitted invoices must have a face value of $500 or more. Your payment term must be less than 13 weeks, but the due date also must be at least a week away.
NOTE: BlueVine will penalize you for deadbeat clients. So if they don’t pay their invoice, you are responsible for paying
BlueVine has flat 85-90% advance rates. They have free ACH (1-2 day delivery) and charge $15 per wire (same-day delivery).
They offer a true revolving line of credit for up to $150,000. You get 24 hour approval. Your business must have revenues of $10,000 or more per month. Their flex credit lines currently run from $5,000 – $100,000.
Their interest is as low as 4.8%. There are no maintenance fees and no unused credit fees.
These are: strength of customers and business cash flow. But they are also personal credit history (less important); and business credit history (which is also less important).
You will need a personal FICO score of 600 or better for business line of credit and a personal FICO score of 530 or better for invoice factoring.
BlueVine is looking for general business information like EIN and address. They also ask for information about the business owner applying, and this will include your Social Security number. You must provide either your three most recent bank statements or read-only access into your business bank account.
They do not provide unsecured financing. Securing comes from a general lien on your business assets, as backed with a personal guarantee. Personal assets cannot be used as collateral.
One advantage is how easy invoice factoring is with BlueVine. Plus their interest rate is fairly low. Furthermore, your personal credit does not have to be stellar, and you can get invoice factoring with a 530 or better personal FICO score.
One disadvantage is that with invoice factoring you will suffer a penalty if your clients do not pay their invoices. Another disadvantage is that you can’t use their services if your business is B2C (business to consumer). And you also can’t use their services if you’re in the medical or health care industry.
Has our BlueVine review turned you off to them? Not to worry, as there are alternatives. The best one is building business credit. But it doesn’t happen overnight.
Growing small business credit is a process, and it does not happen automatically. A small business needs to actively work to build corporate credit. Nevertheless, it can be accomplished readily and quickly, and it is much more efficient than establishing consumer credit scores. Vendors are a big component of this process.
Performing the steps out of order will result in repeated rejections. Nobody can start at the top with company credit. For instance, you can’t start with store or cash credit from your bank. If you do you’ll be rejected 100% of the time.
A corporation needs to be legitimate to loan providers and merchants. That’s why, a corporation will need a professional-looking web site and e-mail address, with website hosting purchased from a vendor like GoDaddy. And also business phone and fax numbers need to be listed on 411.com.
Likewise the business phone number should be toll-free (800 exchange or similar).
A corporation will also need a bank account dedicated solely to it, and it has to have every one of the licenses needed for operating. These licenses all must be in the precise, accurate name of the company, with the same company address and telephone numbers. Keep in mind that this means not just state licenses, but possibly also city licenses.
Visit the Internal Revenue Service website and get an EIN for the business — they’re totally free. Choose a business entity such as corporation, LLC, etc. A company can start off as a sole proprietor but will probably want to switch to a type of corporation or partnership to decrease risk and make the most of tax benefits.
A business entity will matter when it involves taxes and liability in the event of a lawsuit. A sole proprietorship means the entrepreneur is it when it comes to liability and taxes. Nobody else is responsible.
If you operate a business as a sole proprietor at least file for DBA (‘doing business as’) status. If you do not, then your personal name is the same as the business name. Therefore, you can find yourself being personally liable for all company debts.
In addition, per the Internal Revenue Service, using this structure there is a 1 in 7 possibility of an IRS audit. There is a 1 in 50 possibility for incorporated businesses! Avoid confusion and considerably reduce the odds of an IRS audit at the same time.
Start at the D&B web site and get a totally 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://www.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 so, Experian and Equifax will have something to report on.
First you should build trade lines that report. This is also referred to as 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 getting revolving store and cash credit.
These kinds of accounts tend to be for the things bought all the time, like coffee, shipping boxes, outdoor work wear, ink and toner, and office furniture.
But to start with, what is trade credit? These trade lines are creditors who will give you preliminary credit when you have none now. Terms are normally Net 30, instead of revolving. So if you get an approval for $1,000 in vendor credit and use all of it, you must pay that money back in a set term, like within 30 days on a Net 30 account.
Net 30 accounts must be paid in full within 30 days. 60 accounts need to be paid in full 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 made use of.
To begin your business credit profile the proper way, you need to get approval for vendor accounts that report to the business credit reporting bureaus. As soon as that’s done, you can then make use of 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.
You want 5 — 8 of these to move onto the next step, which is revolving store credit. Also, you may need to apply more than one time to these vendors, and you may have to buy some items you do not really need, to confirm you are trustworthy and will pay timely. Contemplate donating unwanted items to charitable organizations.
Once there are 5 — 8 or more vendor trade accounts reporting to at least one of the CRAs, move to revolving store credit. These are service providers like Office Depot and Staples. These companies are more likely to have goods you need. Use the company’s EIN on these credit applications.
One good example is Lowe’s. They report to D&B, Equifax and Business Experian. They want to see a DUNS and a PAYDEX score of 78 or more.
Are there 8 – 10 accounts reporting? Then progress to fleet credit. These are businesses like BP and Conoco. Use this credit to purchase, repair, and take care of vehicles. Make sure to apply using the corporation’s EIN.
One such example is Shell. They report to D&B and Business Experian. They need to see a PAYDEX Score of 78 or more and a 411 small business telephone listing. Shell might say they want a specific amount of time in business or revenue — but if you already have enough trade lines, that won’t be needed and you can still get approval.
Have you been sensibly handling the credit you’ve up to this point? Then move to cash credit. These are businesses such as Visa and MasterCard. Keep your SSN off these applications; use your EIN instead.
One such example is the Fuelman MasterCard. They report to D&B and Equifax Business. They want to see a PAYDEX Score of 78 or higher; 10 trade lines reporting on your D&B report; and a $10,000 high credit limit reporting on D&B report (other account reporting). In addition they want you to have an established business.
These are service providers such as Walmart and Dell, and also Home Depot, BP, and Racetrac. These are often MasterCard credit cards. If you have 14 trade accounts reporting, then these are in reach.
Know what is happening with your credit. Make sure it is being reported and deal with any inaccuracies ASAP. Get in the practice of checking credit reports and digging into the details, and not just the scores.
We can help you monitor business credit at Experian and D&B for only $24/month. See: https://www.creditsuite.com/business-credit-monitoring. If you prefer working directly with the business CRAs, then Experian and Equifax cost $19.99, and D&B ranges from $49.99 to $99.99.
Update the relevant information if there are errors or the details is incomplete.
What’s all this monitoring for? It’s to challenge any problems in your records. Mistakes in your credit report(s) can be corrected. But the CRAs often want you to dispute in a particular way.
Disputing credit report inaccuracies typically means you mail a paper letter with duplicates of any proofs of payment with it. These are documents like receipts and cancelled checks. Never mail the originals. Always mail copies and keep the originals.
Disputing credit report mistakes also means you specifically spell out any charges you challenge. Make your dispute letter as crystal clear as possible. Be specific about the problems with your report. Use certified mail so that you will have proof that you mailed in your dispute.
Always use credit sensibly! Don’t borrow beyond what you can pay off. Keep an eye on balances and deadlines for payments. Paying off on schedule and fully will do more to raise business credit scores than pretty much anything else.
Establishing corporate credit pays. Good business credit scores help a business get loans. Your lending institution knows the corporation can pay its debts. They know the small business is for real. The small business’s EIN attaches to high scores, and creditors won’t feel the need to ask for a personal guarantee.
BlueVine is a great option if your personal credit score is not so hot. Their interest rate is surprisingly low for allowing such low personal credit scores.
However, you will be the one to pay if your clients do not. So if you’re going to use BlueVine, make sure you’ve got dependable clients. And of course if your company is in the health care or medical industries, or you are a business to consumer organization, BlueVine is utterly off the table.
And finally, as with every other lending program, whether online or offline, 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. These include building business credit, in order to best decide how to get the money you need to help your business grow.