A Limited Liability Company (LLC) comes with a lot of perks but can be confusing to run without proper documentation. Operating agreements serve to contain everything your LLC needs to flourish. This article explains what operating agreements are and an LLC operating agreement template you can use to create one of your own.
An LLC operating agreement is a document containing crucial information about how you’ve chosen to structure your business. It serves to provide information on legal, operational, and financial aspects of your company that may come under question in the future.
When issues arise, members can turn to your operating agreement as a baseline for how to react. Each owner should have a hand in its formation and be aware of the rules within.
To finalize the document, creators should sign on the dotted line to make it a legally binding document.
Free LLC Operating Agreement Template
Here’s a single-member LLC operating agreement template that will give you a solid idea of what the document looks like.
Note that this is a generic document for Limited Liability Companies with only one member. Here a single member has full control over the LLC, and no other individuals have a membership.
What Should You Include in Your LLC Operating Agreement?
It can be challenging to capture every possible situation in an operating agreement. Start with the following sections and add things as your company grows.
1. Basic Information About Your Business
Right off the top, you’ll want to record your company’s legal name and any “doing business as” titles you’ve chosen to create. Be sure to capture your business address in the state you registered.
All LLCs require a registered agent, an individual, or a service that accepts legal documents on behalf of your business. Add the name and address of this registered agent to this section of your operating agreement.
This section should also contain your business purpose, a few lines about what you plan to sell, or the services you wish to perform. Don’t make this section too specific, as most successful businesses expand beyond their initial offerings at some point.
Place a statement of intent in your basic information mentioning that your operating agreement conforms to all the LLC laws in your state.
If you include any other basic information when filing your articles of organization with the state, you’ll want to include those here as well.
2. Member Information
After capturing the basics, it’s also wise to list details about each of your initial members. Particulars should include name, address, and job title. Since there’s no requirement to split profits evenly among owners, you’ll also want to list the percentage each one gets.
There’s no limit on the number of members your company can have, and you may wish to add more in the future. Be sure to encompass all the requirements for bringing a new owner on board.
Similarly, you’ll want to have a plan in place should a member decide to leave the company. Lay out guidelines for shifting profits and responsibilities to the other members of the team. It’s also important to document any grounds for expulsion and how to handle such a situation.
3. Capital Contributions
At the time you register your business and open your business bank account for LLC, there’s a good chance some or all of your members contributed funds, services, or other forms of capital. You’ll want to list these donations in your operating agreement and their cash value.
In the event, your business needs to raise more capital in the future, provide a guideline for who can present funds and any limits. You may also have to stipulate how interest percentages can shift if a member contributes.
4. Business Management
For managing the day-to-day operations of your business, you can elect to take a member-run approach or hire a manager. Make sure your operating agreement specifies which approach your company decides to take.
In a member-run scenario, you’ll want to create a detailed list of job responsibilities for each member, so there’s no confusion or positional overlap. How you divvy up roles is entirely up to you and your team.
Manager-managed LLCs should clearly explain the manager’s responsibilities and which areas they need to seek counsel from the owners. You can also list the salary for such a position and the length of time you expect it to exist.
States don’t require LLCs to hold meetings the way corporations do, but that doesn’t mean you shouldn’t have any. Your LLC operating agreement should specify how often your company will hold meetings, where they will take place, and how many members must attend to have a quorum.
Furthermore, decide all rules around voting to approve an action. You must choose if each member carries an equal vote or base voting shares on ownership percentage. There should be no questions about what’s needed to approve a vote, whether it’s a majority, a unanimous decision, or something altogether different.
In manager-managed LLCs, you’ll want to spell out when members need to vote on manager actions and the areas a manager is free to act on their own.
Operating agreements are fluid documents and will change over time. Use this space to specify how votes will take place to make changes affecting the company as a whole.
LLCs are in a unique position, able to take on the tax status of another type of business entity.
Many business owners choose pass-through taxation, seen in sole proprietorships or partnerships. Here, the government does not tax profits at the corporate level, taxing income only at the individual level.
Others elect to hold a corporate status, following tax guidelines that come with an S-corp or C-corp.
Whatever tax status you choose to start out with, you’ll want to record it here. Since LLCs can change tax structure as needed, you’ll want to document the process for making an adjustment down the line.
6. Dissolving Your LLC
With any LLC, there may come a time when members decide to dissolve the business. Such a process can be a monumental amount of work, but your operating agreement should cover circumstances that would cause your business to end.
Be sure to mention which members will handle each part of the dissolution, from paying off debts to liquidating assets and filling out the necessary paperwork. Once that’s all settled, you’ll want to list what happens to any remaining assets.
7. A Liability Statement
LLCs offer limited liability protection, shielding members from losing personal assets in the event your business can’t cover a debt or a fee. Sole proprietorships and partnerships do not have the same protections, leaving personal responsibility on the table.
An operating agreement is the perfect place to spell out this protection if someone ever challenges this claim.
8. Additional Provisions
At times, other provisions can find their way into an operating agreement. Additional topics often include the death of a member, how to communicate business affairs, and ways to handle disputes among members.
Many businesses use this space to document state laws governing your LLC or any special circumstances specific to your business model.
Does My Business Need an Operating Agreement?
Most states do not require an operating agreement to start an LLC. However, if you file in one of the following locations, you will need to create such a document:
California
New York
Missouri
Maine
Delaware
If you’re starting an LLC in any other state, you’re technically off the hook. However, it’s a smart move to create an operating agreement anyway.
Not having an operating agreement defaults your LLC to the rules and regulations governed by the state. While some of these may pertain to your specific business, many have to be ambiguous to account for a wide range of company types.
This can lead to confusion among members and uncertainty surrounding how to handle business matters. This lax approach could very well lead to disaster down the road.
Your operating agreement is the foundation you and other business owners can turn to when problems arise. It provides a structure for all the crucial components of your business and, since you create it, is something all members agree upon.
Use a reliable service provider like ZenBusiness to create a professional operating agreement for your LLC.
What Is The Purpose Of An Operating Agreement?
Your company stands to benefit in several ways if you use an operating agreement. Here are a few of the top reasons you should create one right away:
Legal Credibility
As you operate a business, there is always some risk when dealing with products and services. Whether justified or not, customers may have a bad experience with your company and take matters to court.
Operating agreements, especially those with a liability statement, show that LLC owners have taken the time to outline policies, procedures, and protections. Judges tend to look favorably at companies with such documents, upholding the limited-liability nature of the business structure.
In instances without an operating agreement, the court may not feel you have a formal LLC and don’t deserve the protections it affords.
Keep Members on the Same Page
Your entire ownership team needs to sign off on an operating agreement to make it an official document. As a result, every member has to agree on the content within. This includes sensitive areas like ownership percentages and responsibilities within the company.
The operating agreement legally holds each member accountable regarding company guidelines and important company decisions. When push comes to shove, his document explains how to deal with issues and situations where voting could change the course of the company.
Define Key Business Procedures
There’s so much flexibility in how an LLC can function. Areas like tax status and member roles are completely malleable to your company’s needs.
With such a fluid structure, it’s important to document key business procedures that shape the core of your business. An operating agreement is ideal for capturing these critical pieces of information and makes it easy for members to adhere to them.
Avoid Default Laws of the State
Companies choosing not to create an operating agreement must function under the LLC rules dictated by the state they register in. These rules do not take your company’s unique structure into account and instead apply blanket regulations to cover all LLC types.
As long as your operating agreement doesn’t go against your state’s rules, your business has the freedom to choose how to operate. This puts your LLC in a much better place to thrive and can steer you clear of unnecessary gray areas.
How to Create an LLC Operating Agreement Template
It is possible to build your own LLC operating agreement template by following the guidelines in the steps above. Bringing a lawyer in to help with the process can simplify the process but may cost more than a small business can afford.
Smart business owners turn to LLC formation services for drafting an operating agreement that can then be mended as necessary in the future. These services also provide formation tools and can serve as your registered agent.
Our top picks for LLC services that can help you create a professional LLC operating agreement are:
Understanding the ins and outs of an LLC operating agreement template can be a challenge. This FAQ hopes to answer questions about some key aspects of the subject.
Is an LLC operating agreement the same as the Articles of Organization?
An operating agreement and articles of organization are two completely different documents. Your LLC will turn in Articles of Organization when you form your business to register with the state. On the other hand, an operating agreement is an in-house document containing information about your business structure.
Can I make my own operating agreement?
It’s certainly possible to make your own operating agreement, and in most states, you can do so at any time. Due to its complex nature, some businesses choose to use a business registration service to help draft the document.
What is another name for an operating agreement?
Operating agreements are sometimes referred to as membership agreements. A membership agreement clearly indicates that all owners need to approve what they’ve recorded within.
Why should an LLC with only one member still have an operating agreement?
Even with just a single member, an operating agreement helps protect your personal assets if you find yourself in legal hot water. Judges sometimes treat LLCs without operating agreements as sole proprietorships and may rule against your personal assets.
As your business grows, having an operating agreement early on looks good in the eyes of potential investors. Since you’ve already laid the groundwork, bringing additional members on board may cause fewer headaches.
Bottom Line on an LLC Operating Agreement Template
Operating agreements become the cornerstone of your LLC, providing guidelines for any and all facets of your business. This single document helps keep members on the same page, explains key business procedures, and can keep personal assets safe. While most states don’t require one, an operating agreement can spell the difference between success and failure.
Generating your own operating agreement is just one of the many tools ZenBusiness provides business owners. The service is completely free in Premium and Pro plans and costs just $125 otherwise.
Sign up today so ZenBusiness can walk you through every step of the LLC operating agreement template creation process.
A Limited Liability Company is a great business structure to consider, no matter what type of business you plan to run. The many benefits of an LLC allow business owners to build the company they desire while minimizing hardships along the way. This article explains the LLC advantages and disadvantages you’ll want to know about before starting a business of your own.
Check out ZenBusiness for all the tools you need to start an LLC quickly and easily.
Pros and Cons of an LLC – Overview
Pros
Cons
Personal Liability Protection
Various Tax Options
Management Flexibility
Profit Distribution Flexibility
Builds Business Credibility
Uniqueness
Minimal Paperwork
Easy to Form
Good for Individuals
Consequences of Member Turnover
Self-Employment Taxes
Role Confusion
Can Be Challenging to Raise Capital
Can Be Expensive to Set Up
What are the Benefits of Starting an LLC?
There are several benefits of having an LLC as your business structure, no matter the size of your company. Here are some of the top benefits of an LLC to consider when deciding how to create your startup.
Personal Liability Protection
Perhaps the most standout benefit of starting an LLC is the personal liability protection they offer. As the owner of an LLC, your home, car, savings, and the like are secure even when your business can’t cover a debt, fee, or payment on a loan. This protection holds true for each member you have, whether one or several.
Sole proprietorships and partnerships offer no such protection, making your personal finances fair game in the event of a lawsuit or money issue. If there’s any level of risk with your business, an LLC can keep you safe.
If you ever find yourself signing a personal guarantee for a business debt, your personal assets may come into play if your business can’t handle the expense. Other situations where personal liability protection won’t help are combining personal and business funds, committing fraud, breaching your duties as owner of an LLC, or causing harm due to negligence.
Tax Options
As an LLC, you and your other members have a few options to choose from when setting up a tax structure. The business structure does not have its own tax classification and can choose the preferred tax status of another business entity. The four options available to LLCs are:
Sole proprietorship: For single owners only, sole proprietorships don’t pay taxes at the corporate level and instead pass all profits through to the owner. The owner then pays income taxes on this entire amount. Known as pass-through taxation, it allows sole proprietorships to avoid double taxes. The government still considers members self-employed and is subject to self-employment taxes as well.
Partnership: Partnerships always consist of multiple members, but business profits still pass down to each owner without paying taxes at the corporate level. Each owner then pays income taxes on their portion of the profits. In most cases, members have to pay self-employment taxes on income as well.
S Corporation: S corporations similarly have pass-through tax structures to dodge double taxation. Owners can choose to receive a salary from profits and pay payroll taxes on that amount. All other profits pass through the corporate tax level to members, who must pay income tax on their portion of the amount.
C Corporation: A C corporation is the one business model to pay taxes at the corporate level. Any profits taken by members are taxed a second time as income.
Each of these tax options can be favorable to LLCs at various stages of operation. It’s possible to change tax status as an LLC, but the Internal Revenue Service (IRS) typically only allows such a move once every 60 months.
Unless you decide otherwise, your LLC defaults to the pass-through taxation guidelines of a sole proprietorship or partnership, depending on whether you have one or more members. Being able to avoid paying taxes at the corporate level can be a massive boon for LLCs just starting out.
Management Flexibility
When creating an LLC, members can decide to run the show themselves or hire a manager to oversee day-to-day operations.
Individuals with or without other employees have the freedom to create a business the way they see fit and run it how they choose. LLCs with multiple owners having an understanding of a company’s inner workings can run different departments to ensure the business functions as intended.
Those without expertise in running an organization can hire or appoint a manager to control the workings of the business. Members may choose a more passive role or remain involved in some way.
It’s up to you as a business owner to decide how the leadership structure of your LLC operates. There are no limits regarding how many members an LLC can have, nor is there a requirement to maintain a rigid board of directors that corporations must maintain.
Profit Distributions
LLCs don’t have a fixed management structure, which is quite different from other business structures. With partnerships, owners must split profits evenly between themselves. Corporations have shareholders who receive profits based on how many shares each one has.
Members of an LLC get to choose how to distribute profits, however, this must be planned out in your LLC operating agreement. If a particular owner invests more time or capital, that person can bring in a greater share of earnings than others do. It’s up to the current ownership to decide how distributions of income work at the time of startup, but even this can change as a company grows.
You may need to provide reasoning behind the disbursement of profits to the IRS when filing taxes. It must be clear that distributions reflect leadership structure and aren’t an attempt for one or more members to avoid falling into a higher tax bracket.
Business Credibility
Partnerships and sole proprietorships are legitimate business models, but they don’t always appear very credible on paper. Businesses and customers you deal with typically see LLCs as more credible, professional, and trustworthy.
Your business must include some form of the “LLC” or “limited liability company” in your name, further cementing your status as a company worth doing business with.
Uniqueness
With few exceptions, forming an LLC in your state gives you unique access to the name you choose for your business. Other companies can’t come along and create a name identical or similar to yours, offering you a niche to work out of.
Businesses in other states can still use the same name as you unless you register an LLC there as well. If you’re thinking of expanding to a nearby state, it may be prudent to do so. Some states will allow you to reserve a name for a set number of months while you get your affairs in order.
Minimal Paperwork
Another huge perk of forming an LLC is the minimal amount of paperwork needed to get your business off the ground.
Unlike corporations, LLCs don’t have to hold meetings or record meeting minutes. There’s no need for a board of directors or officers and the paperwork required to maintain those positions. Less record-keeping allows members to focus on other matters instead.
At formation, LLCs should establish an Operating Agreement containing all the rules those in your business need to follow. Without this document, your LLC must adhere to the state’s regulations, whether they make sense for your company or not.
Many states do require annual reports summarizing changes made during the last year to keep government records current. Requirements for each state vary considerably, but the paperwork is usually still minimal.
Easy to Form
When the time is right to create your LLC, the process is quite simple. There may be subtle differences depending on the state you form in, but it is something you can do without the help of an attorney.
Below are the steps any business owner needs to follow when setting up an LLC. You can also hire one of the best LLC formation services to create and enjoy the benefits of your LLC at an affordable price.
Step 1: Choose your state
Most business owners prefer to start out in the state they live in, considering they already have knowledge of how the state runs. Delaware and Wyoming can be great options for registering a business, thanks to business-friendly processes and tax perks.
Step 2: Name your business
As mentioned earlier, you’ll have to come up with a name someone’s not already using in your state. Be sure to follow any state guidelines for naming and avoid anything that may mislead customers.
Step 3: Hire a Registered Agent
A registered agent handles legal and state matters that come your business’s way. You can choose to be your own registered agent, but most LLCs look to knowledgeable registered agent services to handle this role.
Step 4: File Articles of Organization
Articles of organization is the sole document you need to file with the state. It provides the government with the into it needs to approve formation.
Step 5: Write an Operating Agreement
This agreement stays within your LLC and should provide a financial, operational, and legal footprint for members and employees to follow. Not creating an operating agreement puts your business into the hands of state government guidelines when disagreements occur.
Step 6: Get an Employee Identification Number (EIN)
An EIN (Employer Identification Number) is effectively a tax code for your business. LLCs with more than one member require an employee identification number, but you can pick one up for free from the IRS.
Good for Individuals
LLCs work well for large businesses, but the business structure serves just as well for individuals building a small venture from scratch. A single business owner without employees still receives the limited liability protection and tax flexibility a larger LLC does. As your business grows, you can modify facets of your LLC to accommodate more staff or additional owners.
Disadvantages of an LLC
Unfortunately, not everything having to do with an LLC is an upside. Here are a few disadvantages to keep in mind when choosing an LLC as your business structure.
Consequences of Member Turnover
Members are the backbone of an LLC and can cause havoc if one or more choose to leave. Owners need to carefully redistribute profits, and states may have specific roles regarding the matter. In some instances, the state may require the dissolution of an LLC after just one member departs.
This sticky situation doesn’t occur in corporations that constantly see shareholders coming and going as shares trade from one person to the next. With an LLC, it is possible to curb some of the chaos through careful documentation in an Operating Agreement.
Self-Employment Taxes
Unless you’ve chosen to follow a corporate tax structure, the IRS records LLCs as partnerships or sole proprietorships, depending on the number of owners. In these instances, owners are still considered to be self-employed.
Self-employed members must pay Social Security and Medicare taxes in an amount relative to what the business earns. This self-employment tax is in addition to income taxes on profits.
Role Confusion
Corporations offer clear roles between owners, directors, and employees with rigid rules about how each one functions. LLCs, on the other hand, do not have such requirements. Without guidelines in place, it can be very confusing to know who can perform certain functions and where divisions of responsibilities lie among higher-ups.
LLCs can create clear-cut lines with the help of an Operating Agreement so long as members take the time to properly flesh the document out.
Can Be Challenging to Raise Capital
Most LLCs will need money at some point, but the business structure doesn’t provide clear opportunities for investors to get involved. Because of the way LLCs do ownership, it’s not nearly as simple to add members as it is with a corporation.
Many investors are similarly deterred by an LLC’s tax-exempt status, as investments can create unrelated taxable income.
Cost
A limited liability company is more expensive to form than your average sole proprietorship or partnership, which can be a deterrent to someone just starting out. State fees can be well into the hundreds per year, a difficult challenge to surmount with little to no income flowing in.
In many states, there’s no cost for starting up a sole proprietorship. Those wishing to use a DBA still pay far less in fees.
Benefits of an LLC – Frequently Asked Questions (FAQs)
The benefits of an LLC play a major part in determining which business structure to use for your business, but they don’t offer the complete picture. This FAQ serves to answer additional questions you may have about limited liability companies.
Is an LLC a good idea?
LLCs allow a lot of flexibility that other business structures don’t offer. No matter your company size, you can also benefit from personal liability protection, minimal paperwork, and easy formation.
How do LLC owners make money?
As a business records profits, owners are able to take out their share as income. Thanks to the flexibility of an LLC, profit contributions to members do not have to be the same amount.
Can an LLC have employees?
There is no limit on the number of employees an LLC can have. Any LLC with more than one member requires an employee identification number (EIN) for tax purposes.
How does an LLC avoid self-employment tax?
The only way for an LLC to avoid self-employment tax is to choose a C corporation tax structure. Although the government taxes income on the corporate level, owners do not have to pay self-employment tax. It is possible to adjust an LLC’s tax status every five years as needed.
Bottom Line on the Benefits of an LLC
The benefits of an LLC far outweigh the negatives, providing an opportunity for those starting a business to protect personal finances while offering pass-through taxation. As LLCs grow, their flexible nature allows for changes while keeping paperwork to a minimum. Easy formation is the cherry on top that should have all new businesses considering LLCs at startup.
To make the process even easier, those wishing to start an LLC can turn to ZenBusiness for all their setup needs. The LLC service has the knowledge to create a business in any state for as low as $49 before state fees.
Starting and running an LLC has a price. Luckily, the cost of starting an LLC is relatively affordable compared to future business expenditures down the road. Today’s guide explains how much an LLC costs and what you can expect when launching your first business. Here’s everything you need to know about how much does it cost to start an LLC.
LLC costs can be divided into two categories: LLC setup costs and LLC maintenance costs. LLC setup costs relate to the state where you register your LLC. The maintenance costs are the ongoing expenses to sustain your Limited Liability Company.
Let’s take a closer look at both LLC cost categories.
LLC Costs: Setup
You are subject to several fees when creating and filing the legal documents needed to form your LLC. There are also costs when you register your LLC with state and local authorities. For instance, you must make sure you have all the proper business licenses, business bank accounts, certificates, and permits required by local, state, and federal governments.
Filing Fees
The main cost to set up an LLC is the fee for filing your LLC’s articles of organization with the secretary of state or other relevant state authority. The typical costs for filing fees range from $50 for legal services and $50 to $800 for filing fees, depending on which state you’re starting your business in.
For most new business owners, filing fees account for the majority of the LLC setup costs. Although you don’t need to hire a lawyer to file the articles of organization to form an LLC, we recommend using an LLC formation service.
There are several LLC services that can help form your LLC for less than $50 plus the additional state fee. Some notable service providers include ZenBusiness and Incfile. These LLC formation services offer excellent customer service and guide you through every step of the setup process.
Best of all, LLC formation services exponentially reduce the risk of improperly filing paperwork, which can cause additional fees to fix the paperwork or reapply. They also save you time by expediting the process and giving you all the information you are required to fill out.
An LLC operating agreement typically costs $0 to $200, depending on if you create it yourself or use an interactive template from an LLC formation service provider.
Your LLC’s operating agreement is an internal document that describes your business’s daily operations, the owners’ roles and contributions, and how your LLC makes decisions. Although only required in five states (California, New York, Delaware, Missouri, and Maine), operating agreements are crucial for every business.
This document defines specific procedures and guidelines, such as how to divide profits and losses among owners. Therefore, unless you have a legal background, it’s important to use a legal service provider like ZenBusiness. These legal service providers offer interactive templates to ensure your operating agreement is catered to your specific needs.
You can find many free templates online if you don’t want to use a paid service. However, we don’t recommend drafting it by yourself. For a small fee of $50 to $200, a legal service provider can ensure your operating agreement is congruent with all members.
LLC Notice of Formation: Publication
Three states, including New York, Arizona, and Nebraska, require LLCs to publish a notice of their organization in the local newspaper. The fee for the publication ranges from $40 to $2,000, depending on your location. Consider this if you plan to set up your LLC in one of the three states mentioned above.
LLC Costs: Maintenanceo
After you file your articles of organization and register your business as an LLC, there are several costs associated with maintaining it. These fees include federal and state taxes, reporting costs, and the price of any services you use to maintain your LLC.
Taxes
Similar to any other entity or person, LLCs are subject to taxation. The exact tax costs vary from state to state. Read our state corporate tax guide for more information.
However, the federal government doesn’t take its portion of taxes directly from the LLC. Instead, the federal government collects taxes from the owners’ profits as a pass-through income. Nonetheless, LLCs can write off certain setup costs up to $5,000, including attorney fees, office space, equipment, and market research.
At the state level, most states tax LLC profits in the same manner as the federal government. However, a few states also have mandatory LLC franchise taxes. For instance, the annual franchise tax in California is a minimum of $800, and the franchise fee in Delaware is $300.
Furthermore, your LLC is subject to reporting fees at the state government level. These fees range from state to state, but you can expect to pay around $100 yearly.
Registered Agent
The typical costs for registered agents range from $0 to $300.
An LLC registered agent is the primary point of contact between your LLC and the state. As such, your registered agent receives all legal documents and accepts the service of lawsuits. Although any adult aged 18 or above can be a registered agent, they must reside in the same state as the LLC and be available during business hours.
Since there is a lack of restrictions on who you can designate as a registered agent, you can be your own registered agent or appoint someone else in the company. However, we recommend using a registered agent service from reputable providers like ZenBusiness, Northwest Registered Agent, or Incfile.
Registered agent services ensure your LLC never loses important legal documents and government notices in the mail. These service providers scan all the mail they receive locally and forward the documents to you as soon as they can. Depending on the registered agent service provider, you can expect to pay an annual fee of $100 to $300.
Cost to Form an LLC in All States
The table below states the filing fees in each state as well as any annual expenses. The LLC filing fee is a one-time fee paid to the state when you create your LLC.
The LLC ongoing costs are ongoing mandatory fees you must pay every one to two years, depending on your state. This is because most states require LLCs to file a regular report and pay an annual fee. These ongoing fees keep your LLC in compliance and in good standing. In most states, they will shut down your LLC if you fail to pay the ongoing fees.
State
LLC Filing Fee
LLC Ongoing Costs
Alabama
$200
$100 minimum (annually)
Alaska
$250
$100 (every two years)
Arizona
$50
$0
California
$70
$800 (annually) + $20 (every two years)
Colorado
$50
$10 (annually)
Connecticut
$120
$80 (annually)
Delaware
$90
$300 (annually)
Florida
$125
$138.75 (annually)
Georgia
$100
$50 (annually)
Hawaii
$50
$15 (annually)
Idaho
$100
$0
Illinois
$150
$75 (annually)
Indiana
$95
$30 (every two years)
Iowa
$50
$45 (every two years)
Kansas
$160
$50 (annually)
Kentucky
$40
$15 (annually)
Louisiana
$100
$35 (annually)
Maine
$175
$85 (annually)
Maryland
$100
$300 (annually)
Massachusetts
$500
$500 (annually)
Michigan
$50
$25 (annually)
Minnesota
$155
$0
Mississippi
$50
$0
Missouri
$50
$0
Montana
$70
$20 (annually)
Nebraska
$105
$10 (every two years)
Nevada
$425
$350 (annually)
New Hampshire
$100
$100 (annually)
New Jersey
$125
$75 (annually)
New Mexico
$50
$0
New York
$200
$9 (every two years)
North Carolina
$125
$200 (annually)
North Dakota
$135
$50 (annually)
Ohio
$99
$0
Oklahoma
$100
$25 (annually)
Oregon
$100
$100 (annually)
Pennsylvania
$125
$70 (every ten years)
Rhode Island
$150
$50 (annually)
South Carolina
$110
$0
South Dakota
$150
$50 (annually)
Tennessee
$300
$300 (annually)
Texas
$300
$0
Utah
$54
$18 (annually)
Vermont
$125
$35 (annually)
Virginia
$100
$50 (annually)
Washington
$99
$60 (annually)
West Virginia
$100
$25 (annually)
Wisconsin
$130
$25 (annually)
Wyoming
$100
$60 minimum (annually)
Best LLC Formation Services
When creating an LLC for the first time, we recommend using a business registration service provider. These services are designed to make your LLC setup as simple as possible. Here are the top two LLC formation services you can use right now.
ZenBusiness is the best all-in-one LLC formation service that’s been helping businesses with LLC formation for over a decade. As such, ZenBusiness has assisted over 300,000 businesses and carries an excellent reputation for speed and transparency.
In addition to LLC formation services and same-day filing, ZenBusiness also provides registered agent services and EIN (employer identification number) assistance. You can even opt for ZenBusiness’ worry-free compliance, domain name registration, web design, and business banking services. Read our ZenBusiness review to find out why it’s our top pick.
Trustworthy online LLC formation services
Excellent customer service
User-friendly website
Affordable tier-based plans
Registered agent service auto-renews for $99 each year
Cheaper options for web hosting and domain name registration exist
Pricing
ZenBusiness offers three pricing tiers for its LLC formation services:
Inc Authority is another LLC formation provider that offers free business registration services. This service provider offers the best customer support out of all the options available. This is because you can access 24/7 US-based support when you create your LLC with Inc Authority.
Helping businesses for over three decades, Inc Authority has established itself as one of the most worthy players in the LLC formation space. Inc Authority has thousands of positive reviews and an innate understanding of how to get your LLC up and running as soon as possible. Read more about Inc Authority in our review.
Extensive range of LLC services
Outstanding customer service
Excellent free plan
Lots of marketing upsell
Paid plan pricing is confusing
Lack of BBB accreditation
Pricing
Although Inc Authority offers free LLC filing services, you can opt for a premium bundle:
Starter: Contact Inc Authority for pricing
Fast Track: Contact Inc Authority for pricing
LLC Cost Frequently Asked Questions (FAQs)
Here are a few common questions we receive from our readers about how much does it cost to start an LLC.
Do I Need a Lawyer to Start an LLC?
No, you aren’t required to hire a lawyer to start an LLC. However, some business owners choose to hire a lawyer to help create their operating agreements.
Should I Use an LLC Formation Service?
Yes, you should use an LLC formation service because it saves time and lets you focus on other parts of the business.
Does My LLC Need a Registered Agent?
Yes, you need a registered agent to create and maintain your LLC in every state except New York.
Bottom Line on LLC Cost
Starting an LLC is an important part of establishing a flourishing business in the United States. However, some people may shy away from forming an LLC because of the LLC costs. In general, you can start an LLC with less than $1,000. The most expensive part of the process is filing your LLC registration documents with the secretary of state.
There comes a time in everyone’s life when we need some money quickly. Rising costs make it harder than ever to have an emergency fund, and conventional banks don’t have the means to pay out a loan quickly. Fortunately, online lenders exist to get you extra cash in a quick and timely manner.
Of the top online lenders, MoneyMutual stands out as one of the best bad credit loans for its vast lender marketplace, fast application process, and loan amounts of up to $5,000. Read on to discover more about MoneyMutual and our other favorite picks.
MoneyMutual allows emergency loans of up to $5000 from a huge pool of lenders while making the entire process quick and easy.
Fees: 5/5
MoneyMutual doesn’t charge anything for the use of its services. The platform isn’t a lender but rather a lending marketplace with a long list of available companies. If a business wishes to work with you, they will pay MoneyMutual to make the connection.
If you fall behind on your payments or default on the loan, there may be significant repercussions from the lender you’re working with. MoneyMutual oversees much of the process but never collects money from lendees.
Requirements: 3/5
To do business with MoneyMutual, you’ll need to receive a constant flow of at least $800 per month and be able to prove the source of income. Only U.S. residents can apply on MoneyMutual, and lendees must be 18 or older. It’s also necessary to have an active checking account to move money into and out of.
Borrowing Range: 4/5
Depending on what you need funds for, you can request as little as $100 or as high as $5000 at one time. If you remain in good standing with MoneyMutual and make regular payments to your lender, it is possible to find another lender should you need more cash in the future.
Speed of Loan Deposit: 4/5
After filling out the simple application to apply for a loan, you’re at the mercy of the online lending marketplace. If a lender offers you a loan right away and you accept its terms, it’s possible to receive funds in your bank account within 24 hours. Be sure to plan for weekends or holidays that may slow deposit speeds.
Security: 5/5
MoneyMutual uses TrustedSite to routinely scan its site for security risks. All data sent and received uses the highest quality AES256 bit encryption to protect your information from outside threats.
Has served over 2 million customers
Huge lender marketplace
Quick application process
Can get funded in 24 hours
Unavailable in certain states
Comparing online lenders is not intuitive
Must make at least $800 per month
CashUSA – Best Emergency Loans for Bad Credit With Education Tools
CashUSA seeks to educate lendees through its comprehensive financial database while offering alternative money suggestions at the same time.
Fees: 5/5
CashUSA keeps all its services free for lendees while featuring a number of lenders and alternative means of attaining some extra income. Be it debt relief or sites that monitor spending, CashUSA understands that loans may not always be the answer. Each of these companies pay CashUSA to work with you, while you benefit from making lifestyle changes to free up some cash.
If you do go the loan route, CashUSA charges no fees to link you up with a lender. Keep in mind that missed payments will likely result in punitive action and the inability to use CashUSA’s services in the future.
Requirements: 3/5
Anyone applying for a loan with CashUSA must be at least 18 years of age and a resident of the United States. You’ll also need a current checking account in your name, along with a working email address and phone number. Finally, you’ll need to earn at least $1,000 per month after taxes from an external source to be eligible.
Borrowing Range: 4.5/5
When borrowing through any of CashUSA’s lenders, it’s possible to request between $500 and $10,000 in emergency funds. You’ll work with the lender to establish repayment terms and interest rates before signing any agreement.
Speed of Loan Deposit: 4/5
With such a fast application process, you may receive loan offers within a few hours. Once you accept the loan terms you like, your lender can deposit funds into your checking account within one business day.
Security: 2/5
CashUSA declares a secure process for handling all inquiries and personal information, but doesn’t provide specifics on encryption protocol or any measures it takes. The site does specify that it may share your information with its marketing partners, which you consent to by filling out their form. This leaves no guarantee that you won’t receive calls from third parties well after your financial woes are gone.
Education center with info on credit and financing
Available in every U.S. state
Loans of up to $10,000
Offers debt relief and credit monitoring
Fast and convenient loans
Need at least $1,000 per month after taxes
Lenders charge high APR rates
Passes your info to marketing partners
247CreditNow – Best Emergency Loans for Bad Credit and Speedy Response
With 247CreditNow, you’ll have a response from a lending partner within 90 seconds of submitting your information if approved.
Fees: 4/5
When you need money fast, 247CreditNow comes through with a free process and expedited response times. Even if you get approved quickly by one of 247CreditNow’s lenders, you’re under no obligation to continue the transaction.
Some emergency loan sites communicate potential fees from lenders well, but 247CreditNow does not. There’s no indication of what interest rates or payback times may be on a loan offer. If you miss a payment, repercussions could come in the form of penalties or collections.
Requirements: 4/5
247CreditNow mentions it may add more requirements without warning, but currently applicants must be at least 18 and a U.S. citizen or permanent resident. You’ll need a checking or savings account to work out of and at least $800 coming in each and every month.
Borrowing Range: 5/5
The emergency loans site has a wide range of loan amounts, from $100 all the way to $35,000. Those looking to borrow big money may face more stringent requirements and a lower likelihood of approval.
Speed of Loan Deposit: 4.5/5
The approval process moves very quickly, and you could have an approved loan within a few minutes of signing up. Once you’ve signed on the dotted line, you’ll still have to wait up to one business day for funds to hit your account.
Security: 4/5
All personal data bouncing around within 247CreditNow’s servers make use of 128-bit SSL encryption to keep it from falling into the wrong hands. While nothing to scoff at, some emergency loan sites tap into higher levels of security still. 247CreditNow will share information with lenders but makes no mention of sending it off to other third-party companies.
Personal loans up to $35,000
Lender response within 90 seconds
Fast application process
Minimum income of $800 per month
Only uses 128-bit encryption
No information on rates or fees
BadCreditLoans – Best Emergency Loans for Bad Credit With Low APR
Depending on how you set up your loan, it’s possible to bring interest rates down as low as 5.99% for repayment. In addition to emergency loans for bad credit, BadCreditLoans also offers auto loans, home loans, small business loans, mortgage, and debt consolidation loans.
Fees: 5/5
BadCreditLoans boasts a completely free service without cost or obligation. The site makes money by sharing your information with third-party companies that dabble in debt relief and credit repair. You may end up paying with your time, dodging calls from marketing partners well into eternity.
Requirements: 4.5/5
Signing up for the loan process with BadCreditLoans requires the completion of a somewhat lengthy online form. Those applying will need proof of U.S. citizenship and be at least 18 years of age. You must receive regular income from some source, but there is no minimum requirement on how much you have to earn.
You’ll need a checking account to transfer funds into and make monthly payments back to the lender. BadCreditLoans mandates a valid email address alongside work and home telephone numbers to facilitate communication.
Borrowing Range: 4.5/5
All lenders through BadCreditLoans offer loans ranging from $500 and $10,000, depending on your residence and status. Those able to pay funds back quickly can see considerable reductions in APR rates compared to other sites.
Speed of Loan Deposit: 3.5/5
BadCreditLoans doesn’t convey a clear line of sight from the application process to loan deposit. The site and its team work 24/7, but this is no guarantee lenders will move quickly to work with your application. You may also receive non-loan applications to process as alternatives to a loan.
Security: 3/5
Much like CashUSA, BadCreditLoans speaks of a security policy but doesn’t state precisely what that means. Its website does allude to encrypting incoming and outgoing data to keep your personal information safe.
As BadCreditLoans uses several marketing partners to bring in additional income, your information will likely end up in their hands before long. There’s always a cause for concern when so many companies have access to your private data.
APR as low as 5.99%
Loans up to 10,000
Extended lender network
72-month maximum repayment term
Longer application process when compared to others
May share your information with marketing partners
APRs can run very high
Personal Loans – Best Borrowing Range for Emergency Loans for Bad Credit
Stretching from $1,000 to $35,000, Personal Loans has emergency loan amounts for every occasion.
Fees: 4/5
Personal Loans does not have hidden fees or upfront costs for using its service. You’ll have ample time upon receiving an offer to review the terms before making a decision, so you don’t get locked into any unnecessary fees. Depending on the repayment rate, you may encounter high interest amounts.
Requirements: 3/5
You’ll need to prove your ability to repay a loan in order to have success with a lender. Applicants must have full-time employment, be self-employed, or receive benefits from Social Security or a disability. Depending on the lender, you may need to show a pay stub.
Personal Loans specifically states that lendees have a Social Security number, be a legal U.S. citizen or permanent resident, and be at least 18 years of age. You’ll also need a valid checking account the lender will deposit funds into.
Borrowing Range: 5/5
Personal Loans starts on the high end, with a minimum $1,000 loan for applicants. Those just needing a few hundred dollars for a small project or bill may want to look elsewhere. However, for those with lofty goals, you can increase the loan amount as high as $35,000.
Speed of Loan Deposit: 4/5
Once you’ve completed the application process, you may start hearing from lenders in a matter of hours. After taking the necessary amount of time to read and understand the terms, you can approve a loan or wait for another to come your way. As soon as you accept the loan that works best for you, it’s possible to see funds deposited within a business day.
Security: 4/5
Personal Loans protects all your information with advanced data encryption technology. You can fill out your application knowing that hackers can’t reach what’s important to you. It is worth noting that Personal Loans shares these same records with non-loan companies as a trade-off for keeping its site free.
247 Dollar Loan works great for students, with quick approval times and low income requirements.
Fees: 3.5/5
Despite the name, 247 Dollar Loan is not a lender but a marketplace for lenders to work through. The site makes its services free to lendees, as lenders pay for access to your application.
With such a speedy short-term loan process, you may receive an offer within minutes of signing up. It’s important to carefully review the terms, as interest rates with 247 Dollar Loan are known to be very high.
Requirements: 4/5
To be eligible for a loan, you’ll need a savings or checking account with the ability to accept direct deposits. Individuals must be 18 years or older and U.S. citizens or permanent residents. Lastly, you must have a minimum monthly income of $800.
Borrowing Range: 3/5
247 Dollar Loan suffers significantly in this category, with a loan ceiling at the $1,000 mark. Working with such small amounts helps the company streamline the application process. This is why 247 Dollar Loan works so well for short-term loans.
Speed of Loan Deposit: 4/5
Funds typically appear within a single business day of your loan approval. At times, lenders may request additional information that may prolong the process.
Security: 4/5
There’s not a lot of information you need to supply 247 Dollar Loan during the approval process, but what you do can have serious implications if it falls into the wrong hands. 247 Dollar Loan uses 128-bit encryption similar to what web browsers use when holding your data. While not as strong as some sites, it offers a healthy layer of protection.
Ideal for short-term loans
Application process takes 2-3 minutes
Loan decision comes within minutes of form submittal
Personal loans top out at $1,000
Only 128-bit SSL encryption
Very high APR rates
Funds Joy – Best Easy to Use Emergency Loans for Bad Credit
Funds Joy’s intuitive website makes it a breeze to apply and receive approval for loans up to $5,000 at a time.
Fees: 4.5/5
Funds Joy facilitates the loan process from beginning to end and doesn’t charge a dime for doing so. The company connects those in need of a loan with more than 60 available lenders in hopes of achieving a match. Lenders pay Funds Joy for the ability to connect with you and your needs.
The site offers no clear detail on fees or rates that a lender may charge upon a loan agreement. Fortunately, you’ll be able to review all the digital paperwork before deciding to move forward with a loan.
Requirements: 4.5/5
Funds Joy doesn’t have rigid requirements to qualify for a loan. Those looking for extra money simply have to reside in the United States, be 18 years old or older, and have a stable source of income.
Borrowing Range: 4/5
Those needing emergency funds can choose between $200 and $5,000 during the sign-up process. The amount you choose and payback terms will have the highest effect on your interest rate.
Speed of Loan Deposit: 4/5
When you agree to a loan amount with a lender, Funds Joy states you’ll receive funds in no time at all. There’s no clear information on exactly how long the process takes.
Security: 3/5
Funds Joy doesn’t clarify how it safeguards your personal data. It does state in the privacy policy that the site can share personal and non-personal information with affiliates and partners for several purposes.
Because the emergency loan provider wants to keep a good reputation, they do have safety measures in place to keep your personal details away from unscrupulous individuals.
Fast application process
Easy to use website
Over 60 lenders on file
Some lenders perform hard credit checks
No phone support
Need a stable source of income
247FastFunds – Best Emergency Loans for Those Needing Multiple Loans
For multiple projects, 247FastFunds makes it possible to request additional loans as long as you’re faithful with payments.
Fees: 4/5
247FastFunds recognizes the need for fast cash in a flash. The company uses a lending network to get individuals in touch with participating lenders while keeping the process quick, easy, and free.
When you receive a loan from a lender, you’ll have the chance to look over the specifics before making a decision. It will be clear on the document what your monthly payments will be and the complete fee schedule. Missed installments may result in excess fees and the possibility of dealing with collections.
Requirements: 3/5
Requirements for setting up your loan are a bit more stringent than some other emergency fund sites. You’ll have to show proof of employment and a clear record of you working more than 90 days at your current job. In the application, you’ll need to list a working phone number for work and home and a valid email address.
Furthermore, it’s essential to have around $1,000 per month after taxes, be a U.S. citizen or permanent resident, and be over the age of 18.
Borrowing Range: 4/5
247FastFunds lets you take out a loan as low as $100 for simple needs or up to $5,000 for large-scale emergencies. Your credit score may play a role in your ability to obtain a higher amount of loan.
Speed of Loan Deposit: 4/5
After working through the inquiry process, you may receive a loan offer from one of 247FastFunds’s affiliates. If you approve the amount and repayment terms, it’s possible to see funds in your account within 24 hours.
Security: 4/5
247FastFunds prides itself on a secure connection to its database. The site protects your data with 2048-bit encryption featuring SSL security.
Can request new loans at any time
2048 bit security with SSL
ACH transfer for monthly payments
Unclear APR numbers from lenders
Must be employed at present job for at least 90 days
Requires an income around $1,000 per month
iCashLoans – Best Emergency Loans With High Approval Rates
iCashLoans may not offer the highest loan amounts, but the lending marketplace sees more approvals than most other sites.
Fees: 3.5/5
There are no fees concerning iCashLoans and its loan application process. You won’t receive a charge for filling out forms or receiving offers from lenders. Those lenders pay the emergency loans site to access your information.
There’s a high likelihood that a lender will reach out to you, even with the worst credit. From there, it’s up to you whether you accept the terms or go back to the drawing board. iCashLoans doesn’t share possible APR rates or what repayments may look like.
Requirements: 4.5/5
Because the lenders with iCashLoans approve a majority of applications, they want to ensure you have the means to pay back everything you borrow. You’ll need to be 18 years of age and a U.S. citizen or permanent resident with a checking account in your name.
Additionally, iCashLoans requires a working telephone number for home and work, and the lending marketplace will verify you’ve been working there for at least 90 days. Whether from that employer or other means, you must have at least $1,000 in income every month.
Borrowing Range: 3/5
There’s not a ton of wiggle room with loan amounts. You can dial in a small loan at $100, but the max you can borrow is only $1,000. Repayment terms are usually short because of these low amounts.
Speed of Loan Deposit: 3.5/5
You’ll have to wait for final approval from your lender before receiving funds into your checking account. With a little luck, you’ll see the money in your account within 24 to 48 hours.
Security: 3.5/5
iCashLoans uses the Comodo certification authority to protect your personal information in their system. Its SiteLock technology protects against ransomware, combats threats, and scans constantly for malware.
High approval rates
Good customer service
Quick loan application process
Only for loans up to $1,000
Must be employed at least 90 days
Requires $1,000 per month income
BetterLoansMutual – Best Emergency Loans for Bad Credit With No Questions Asked
BetterLoansMutual allows you to go about the loan process and respects your privacy along the way, not even asking where your funds will go.
Fees: 3.5/5
There’s no need to pay any money upfront when working with BetterLoansMutual. The company doesn’t charge lendees so much as a penny, instead forcing lenders to pay for the chance at working with you.
As you receive loan requests, it’s your responsibility to read through the agreement and ensure you’re comfortable with the fine print. The site doesn’t disclose APR information, so ensure you don’t bite off more than you can chew.
Requirements: 3/5
Lendees have to be U.S. citizens or at least permanent residents 18 years of age or older. You’ll need a checking account, a working home and work phone number, and a valid email address. The site will verify your employment status and confirm you have at least $1,000 coming into your account each month.
Borrowing Range: 4/5
When looking for a loan, you can shoot for any amount between $100 and $5,000. Lenders will assess the risk of doing business with you and may counter with an alternate number.
Speed of Loan Deposit: 4/5
After working through the process, you’ll need to sign off on whatever loan works best for your situation. The lender will then finalize things on their end, and you should see a deposit in your account around 24 hours later.
Security: 2.5/5
In 2018, the Better Business Bureau shared a concern about BetterLoansMutual’s lack of security. The emergency loans site now uses a secure SSL connection to shield your information from outside sources.
Site doesn’t ask questions about loan purpose
Simplified loan process
Safe and secure submissions
Must have a job for at least 90 days
Need an income around $1,000
Does not disclose lender fees
Our Methodology for Selecting the Best Emergency Loan
As we crunched the numbers on the best emergency loans for bad credit, a number of features stood out to us. We used the following factors when making our picks.
Fees
It should come as no surprise to see fees on the top of this list. Anyone requesting an emergency loan is clearly in need of money, and no one wants to be left off even worse than when they started. Although costs aren’t always transparent, the best lending marketplaces should pass along as many fees to the lender as possible. Ideally, interest rates from lenders should be reasonable and not impossible to pay back.
Requirements
When it comes to emergency loans, having a long list of requirements can preclude individuals from getting the money they need. We aimed for sites that minimized requests for your personal information and proof you have large amounts of income. After all, there wouldn’t be a need to borrow funds if we had so much come in.
Borrowing Range
It’s always helpful to use one company for present and future loan inquiries. Those with an extensive borrowing range can help with minor damages or significant expenses, depending on the need. Being able to work with the same company gives you peace of mind, and it can’t hurt your chances of being approved.
Speed of Loan Deposit
When you need money, you need it now. No one has time to wait for a lengthy approval process or slow transfer speeds. The best emergency loan sites can find you a loan within minutes and have the funds in your bank account within one business day.
Security
No matter how you shake it, you will need to provide personal information when applying for a loan. This will undoubtedly include your bank account number, which would be disastrous if it fell into the wrong hands. There are various levels of security among websites, and the best emergency loan companies will have the means to keep your data safe.
How to Obtain an Emergency Loan
Understanding the complex nature of emergency loans is not easy. The answers to the questions below should help bring things into focus.
What Loans Can a Person With Bad Credit Get?
Loans can be challenging to get when you have bad credit. It is possible to obtain co-signed or joint loans, using someone else’s credit to support your own. There’s also the option to pursue secured loans backed by other assets you own.
When you need money quickly, many companies offer emergency loans to those even with bad credit. You will need to meet their requirements, submit an application, and negotiate with a lender if one gives you an offer.
Can I Take Out an Emergency Loan?
Anyone, bad credit or otherwise, can take out an emergency loan. These loan types are usually unsecured and may deposit funds into your bank account within a day. The best emergency loan companies have a fast approval process and don’t require collateral to receive offers.
What Credit Score Do You Need for an Emergency Loan?
In most cases, there’s no minimum credit score needed to secure an emergency loan. Having a higher credit score may increase your chances of approval or earn you better payback terms. When using one of the sites on this list to request an emergency loan, be sure to read through offers carefully so you don’t get stuck with an amount you can’t afford to pay back.
Do Banks Give Emergency Loans?
Some banks have the capability to give emergency loans, and a few can complete the process within a few days. However, most traditional lenders can take weeks to prepare a loan, often taking too much time when there are immediate needs. For the best chances at fast deposits, online lending marketplaces are the way to go.
Are There Loans That You Don’t Have To Pay Back?
There’s no such thing as a loan you don’t have to pay back. When you set up a loan, you’ll need to work out repayment terms with the lender. These terms include interest rates, rate of payment, and how many months you have to pay everything off. It’s also worth checking out fees for paying the loan off early.
Why Can’t I Get a Loan Anywhere?
Poor credit history has a way of making it difficult to obtain a loan. Sometimes, an error on your credit report could be the cause of the issue. Even if your credit isn’t where you’d like it to be, some online lenders will still consider your application for an emergency loan without looking at your credit score.
How Big of a Loan Can I Get With No Credit?
Both Personal Loans and 247CreditNow offer emergency loans of up to $35,000. These companies can extend their services to those without credit, but you may have to deal with higher interest rates on repayment.
The Best Emergency Loans – Final Thoughts
Emergency loans can be a lifesaver when disaster strikes. However, the procedure can take days or weeks through traditional financial institutions. The right online lending marketplace can remove all the guesswork from the application process and have money in your account before you know it. When you need cash quickly, we feel any one of the sites on this list can get you what you need. All you have to do is pick one and start the process.
If you’re looking for emergency business financing, don’t forget to check out our detailed guide on the best bad credit business loans. Make sure you have a business bank account before you apply for one.
If you have an emergency financial situation, waiting for a bank loan can take a few weeks or even months. Therefore, payday loans online are your best option when you’re in a tight spot.
However, you’re not alone. We’ve all been in situations where we need quick cash to pay off unexpected bills or when we’re waiting for a payday. To urgently handle these financial obligations, you must pick the best payday loans online.
We’ve compiled a list of the best online payday loans with instant approval. These lenders listed in the guide below are reliable, generous, and fantastic for short-term cash relief. While the payday loan service, Money Mutual, tops our list, you should consider each option based on your own personal circumstances.
Our top 10 picks were determined by criteria such as APR rates, loan amounts, the application process, and lender reputation. For this reason, the best payday loans online offer quick loans while providing agreeable terms.
Top 10 Best Payday Loans Online for Instant Approval
As one of the best bad credit loan providers, MoneyMutual has funded more than two million borrowers since its inception in 2010. Based on the wide range of positive feedback on various customer review sites and our experience, MoneyMutual is the best online payday loan service overall.
This lender is also a member of the Online Lender Alliance. This speaks to the company’s trustworthiness and outstanding reputation.
MoneyMutual acts as a lending marketplace and matches you with a list of the best potential lenders. In fact, you can find over 80 lenders with MoneyMutual, which increases your odds of finding a loan with acceptable terms.
Furthermore, MoneyMutual offers bad credit score loan resources you can use if you have a poor credit history and want to rebuild your credit score.
This company is also certified by TrustedSite. Therefore, you can request a loan with the assurance that your personal information is protected.
Application Process: 5/5
MoneyMutual’s motto is “At The Speed of Life.” This indicates that the company understands how complex emergencies are and that you may need cash immediately. For this reason, MoneyMutual’s application process is quick and easy.
Taking just five minutes to complete, you will receive an instant lender review. Once you agree to a loan, the money is sent within one business day.
Loan Amounts: 4.5/5
Depending on your credit score and monthly income, you can borrow $100 to $5,000 from MoneyMutual.
Interest Rates and Fees: 4.5/5
The interest rates on MoneyMutual loans range from 261% to 1,304%.
CashUSA is one of the most popular providers of personal loans in the online marketplace. In addition to its massive customer base, it also boasts excellent customer ratings from millions of satisfied borrowers.
Furthermore, CashUSA is more than just a lending network. This company also provides thorough financial resources on finances, credit, debt, and banking. By taking advantage of these educational tools, you can better prepare yourself for the future.
Best of all, you can take payday loans for any reason. So whether you want to consolidate your debt, pay for a vacation, or pay off unexpected medical expenses, the choice is up to you.
Application Process: 5/5
The application process is straightforward and takes under ten minutes to complete. CashUSA will ask for your income levels since most lenders have an $800 to $1,000 monthly income requirement.
Loan Amounts: 4.9/5
You can borrow $500 to $10,000 with a CashUSA loan.
Interest Rates and Fees: 4.8/5
CashUSA loans have interest rates ranging from 5.9% to 35.99%. Also, CashUSA doesn’t charge origination fees for using their lending network. However, it’s essential to read the terms of your specific loan to see if the lender charges fees for late payments or the application itself.
In addition, BadCreditLoans sends your loan request to a third-party non-lender network if you don’t finalize a deal with an offer from BadCreditLoans’ primary lending network.
BadCreditLoans is also a proponent of financial education. This is why this company provides educational resources you can read to learn how to make better financial decisions.
Furthermore, borrowers with poor credit scores can comfortably apply, knowing that BadCreditLoans has no credit obligations.
Application Process: 5/5
Similar to the previous options, BadCreditLoans has a simple application process that takes a few minutes to complete. You will need to provide your ID and bank account deposit details.
Loan Amounts: 4.5/5
You can borrow $500 to $10,000 from a BadCreditLoans’ lender. However, you may not qualify for higher loan amounts if you have a poor credit score.
Interest Rates and Fees: 4.8/5
The APR from BadCreditLoans varies from 5.99% to 35.99%. These are competitive interest rates seen across the industry.
Funds Joy is a lending network that prides itself on quick and viable loans from trustworthy lenders. This lending platform has a network of over 60 personal loan lenders. This means there is a high chance you will find a loan offer with reasonable terms and rates.
You can take advantage of Funds Joy’s wide range of loan options, which include payday loans, home loans, cash advance loans, and bad credit score loans.
As such, you can apply for a Funds Joy loan even if you have a less-than-desired credit score. Since Funds Joy is the best loan option, it’s important to note it offers short-term and long-term payday loans.
Application Process: 4.6/5
The Funds Joy application takes around ten minutes to complete and submit. Furthermore, you will receive your lender’s decision a few minutes after. Therefore, we recommend waiting for all the loan offers to arrive. This way, you can choose the loan with the best terms and conditions.
Loan Amounts: 4.5/5
Funds Joy offers loans in the range of $200 to $5,000. This way, you can receive a small short-term loan in less than no time to pay off unexpected bills or expenses.
Interest Rates and Fees: 4.5/5
The interest rates seen on Funds Joy loans depend on your personal credit score and income profile. However, the APR typically ranges from 4.99% to 450% for personal loans. The APR for cash advance loans ranges from 200% to 1386%. In addition, the interest rates for installment loans vary from 6.63% to 225%.
Over 60 lenders
Variety of loan options
No hidden charges
Short-term and long-term payday loans online
No phone customer service
Higher interest rates with bad credit
Personal Loans – Best for Competitive Payday Loans Online
Personal Loans is an excellent unsecured loan provider focusing on speed, efficiency, and transparency.
This lender immediately provides your loan amount, loan term estimates, and specific loan type requirements to quickly grasp what you’re getting into.
Although this lender offers competitive interest rates, user reviews indicate that Personal Loans offers the best APRs for payday loans online.
Furthermore, Personal Loans is a popular provider of bad credit loans. Therefore, borrowers with poor credit scores can take advantage of these no-credit-check loans.
Application Process: 4.8/5
Personal Loans has a straightforward application process that takes a few minutes to complete.
Loan Amounts: 4.9/5
You can borrow anywhere from $500 to $35,000 from Personal Loans, making it one of the broadest loan amounts ranges on today’s list.
Interest Rates and Fees: 5/5
First of all, Personal Loans does not charge application or service fees. Furthermore, you can find loans with interest rates ranging from 5.99% to 35.99%.
While it’s not a direct lender, 247FastFunds is a lending platform that collaborates with a wide network of lenders. For this reason, you have an excellent chance of finding reasonable loan terms. Established in 2012, this lending network has provided trustworthy financial services for over ten years.
It’s important to note that 247FastFunds does not accommodate individuals in West Virginia, New York, Arkansas, or Vermont. However, if you are not located in one of these states, you can easily find an adequate loan, even if you have a bad credit score.
True to its name, you can apply for a 247FastFunds loan anytime. If you agree to a lender’s terms you will receive the money in your bank account the next day.
Best of all, this lending network provides unsecured personal loans for any reason, whether it’s home repairs, car repairs, vacations, or medical bills. The choice is all yours.
This lending network is also the best for security since it uses advanced encryption protocols to protect your personal information. Therefore, you minimize your risks of identity theft.
Application Process: 4.8/5
247FastFunds has a simple application process that takes around five minutes to finish.
Loan Amounts: 4.4/5
You can borrow $1,000 to $5,000 from lenders in the 247FastFunds network.
Interest Rates and Fees: 4/5
The APR and fees are not disclosed on the website. You’ll need to view your loan offers for specific interest rates and terms.
247 Dollar Loan is the best overall payday lender for small emergency loans. You should apply for a loan with this lender if you have a financial emergency you must quickly pay it off.
Application Process: 5/5
The application takes under five minutes to complete. Once you submit your application, 247 Dollar Loan will provide a list of potential lenders in one to two minutes. However, it’s crucial to note that borrowers must be at least 18 years of age, meet the monthly income requirements of $800, and be a US citizen. You also must provide your direct deposit information.
Loan Amounts: 3.8/5
You can borrow $100 to $1,000 with a 247 Dollar Loan loan.
Interest Rates and Fees: 4/5
You can expect interest rates ranging from 235% to 1,304%.
Since it’s difficult and time-consuming to get a big installment loan from your local credit union or bank, we recommend 247CreditNow for large payday loans. This is the most fantastic lender for large installment loans if you meet the credit score requirements.
Once you prove you meet the $800 minimum monthly income requirements, you can get access to personal loans, cash advance loans, or payday loans.
Application Process: 5/5
247CreditNow.com has a quick application process and takes less than two minutes for you to receive your list of potential lenders and loan offers.
Loan Amounts: 4.9/5
You can borrow $100 to $35,000 with a 247CreditNow loan.
Interest Rates and Fees: 4.5/5
After applying, you can view your specific interest rates and fees for each loan in your 247CreditNow.com lender decision list.
Lower income requirements
Quick application process
Available for all types of credit scores
Shorter loan terms
Large loan amounts unavailable for bad credit scores
iCashLoans is the best payday lender for consumer privacy because it doesn’t ask what you are using the loan for. Therefore, you can use your loan as you wish.
In addition to iCashLoans priority on privacy, you can access short-term payday loans of $100 to $1,000.
Application Process: 5/5
The iCashLoans.com application is quick and easy. Best of all, this lender does not pry into your personal business since it doesn’t ask what you need the loan for.
Loan Amounts: 4/5
You can access loans ranging from $100 to $1,000.
Interest Rates and Fees: 4/5
iCashLoans doesn’t specifically indicate the interest rates the lenders charge. However, since iCashLoans provides short-term emergency loans, you can expect high interest rates, depending on your credit score.
BetterLoansMutual focuses on providing rapid payday loans for borrowers with all types of credit scores. Similar to iCashLoans, BetterLoansMutual doesn’t ask what you need the money for. However, you must make at least $1,000 in monthly income after taxes to qualify for a loan.
Application Process: 4.8/5
The application process is effortless and takes about five minutes to complete.
Loan Amounts: 4.5/5
The loan amounts range from $100 to $5,000, similar to MoneyMutual.
Interest Rates and Fees: 4.2/5
The exact interest rates depend on your loan offers. Therefore, you must apply and view your lending options to see the full range of APRs and fees.
Loan amounts up to $5,000
One to two-day funding
Fast application process
No phone customer service
No accreditation from BBB
How We Picked the Best Payday Loans Online: Methodology
By now, you should have narrowed down your pick on which payday loan is best for you. However, to help make things easier, we want to discuss the methodology we used to compile this highly-curated list of the best payday loans online for instant approval.
Here’s a closer look at each consideration we rated:
Company Reputation:
One of the most critical factors of a payday lender is its reputation and experience in providing trustworthy loans. Longevity typically indicates sustainable lending practices, which is a quick and easy way to narrow down the list.
Furthermore, we chose lending marketplaces with good reviews and accreditation by verified agencies. For example, the BBB (Better Business Bureau) recognizes many of the abovementioned lenders. Also, many lenders are part of the Online Lender Alliance.
We also assessed customer reviews and looked for lenders with positive feedback and satisfied borrowers.
Eligibility Criteria:
To accommodate everybody who needs access to payday loans, we made sure to choose lenders with fair borrower requirements.
These minimum requirements include:
US citizenship or permanent residency in the US
At least 18 years of age
Stable income of $800 to $1,000 per month
Own a checking account in your name
Bad Credit Accommodation:
In addition to low eligibility criteria, we looked for lenders that offer loans for borrowers with poor credit scores. Therefore, our list of the best online day loans offers financial services for all types of credit scores.
Instead of looking at just your credit score, these lenders consider your income, debt to income ratio, and other provided information. We also made sure we included some providers that offer bad credit business loans too.
Ease of Use:
Since you may be in an urgent situation and need cash immediately, we looked for payday loans with a straightforward application process and a quick cash deposit. The loans outlined above take only a few minutes to submit an application.
Best of all, the lender provides a list of potential loans just as fast. This way, you can find the best loan terms in less than 20 minutes of your time. Furthermore, the money is directly deposited into your bank account.
APR and Fees:
We chose payday lenders that offer standard interest rates of 3.59% to 35.99%. Therefore, you can find a reasonable loan in less than no time.
Loan Terms:
Another important consideration is the loan terms. We found loans that offer reasonable repayment terms. This way, you have enough time and funds to pay off your loan by the due dates.
Turnaround Time:
You can receive your money in less than 24 hours with an emergency payday loan. However, it’s important to have your bank account information available when you complete the loan request.
What Are the Best Online Payday Loans FAQs
Before you go, it’s essential to clear up any confusion you may have surrounding the best online payday loans. So, here are a few common questions we receive about payday loans.
Let’s jump in.
What Is a Payday Loan?
A payday loan is any money you need to borrow to pay off unexpected expenses or urgent matters. For example, people use online payday loans for utility bills, car repairs, home repairs, medical expenses, and much more.
Furthermore, payday loans online are essentially the same as personal loans. Therefore, you can also use payday loans for personal reasons, including traveling, debt consolidation, and weddings.
Payday loans are relatively small amounts of cash lent at a high interest rate. There’s typically an agreement that states that the borrower will pay off the loan when they receive their next paycheck. However, your specific interest rate and loan amounts depend on your income and credit history.
How Do I Choose a Payday Loan Online?
There are several factors to consider when choosing your online payday loan. These factors include how much money you need, your credit score, the interest rates and fees, and the loan terms.
Let’s take a closer look at each of the key criteria:
1. How Much Cash Do You Need? Online payday lenders offer varying loan amounts. Some lenders provide smaller short-term loans, while others offer larger long-term loans. So, choose the lender that provides the set amount of cash you want to borrow. For example, a payday lender won’t be very effective if you need to borrow $3,000, but they only offer $1,000.
2. What’s Your Credit Score? Borrowers with better credit scores have an advantage over individuals with poor credit scores. This is because a good credit score offers a higher chance of approval, higher loan amounts, and lower interest rates.
For this reason, if you are a borrower with a low credit score, we recommend applying for loan services that accept all credit scores. This way, you can increase your chances of getting approved for a payday loan.
3. Interest Rates? Unfortunately, short-term payday loans usually have higher interest rates than longer term loans. Furthermore, borrowers with a poor credit history are subject to higher interest rates. This is why we recommend taking a close look at the lender’s rates and calculating if you can pay off the loan.
4. What About Fees? In addition to interest rates, lenders may charge first work fees and origination fees. This can impact your overall loan and how much you hack to pay back in the form of installments. If the lender deducts fees from your total loan amount, you may want to consider if the money they send can cover your financial obligations.
Alternatively, if the payday loan lender adds the fee to your total debt, you can perform a quick calculation to see how much you need to pay back per installment.
5. What Are the Loan Terms? The loan terms indicate when your installment payments are due and how long it will take to pay off the entire loan. Therefore, it’s vital to choose an online payday loan that offers adequate and reasonable time for you to pay off the loan.
How Can I Borrow Money Immediately?
You can instantly borrow money from any of the payday lenders listed above. These online payday loan providers offer fast application processes and a quick turnaround time. In most cases, all you need to provide is your ID and direct deposit information.
Although some lenders offer same-day emergency loans, it usually takes one to two business days for you to access the money in your bank account.
How Fast Can I Receive a Payday Loan?
Similar to the previous question, you can receive a payday loan in under 24 hours. However, most payday lenders send the money to your bank account the next business day once approved. Again, it all depends on your application and the information you submit.
What Is the Easiest Payday Loan to Get Approved For?
The most painless loans to get approved for are payday loans. Payday loans are typically supposed to be paid off by your next payday and have higher interest rates than standard loans.
These loans are the easiest in terms of approval because they don’t typically require hard credit checks and are covered by your next paycheck. Therefore, it’s less risky for the lender to provide the loan.
What Are the Best Emergency Loans?
There are several different loan options you can choose from if you’re in an emergency situation.
These include:
1. Payday loans: A short-term loan you must pay back with your next payday 2. Personal loans: A short-term or installment loan used for personal reasons 3. Auto title loans: Loans taken against your car or a portion of your car’s value 4. Home title loans: Loans taken against your home 5. Credit card cash advances: Short-term funds provided by your credit card provider depending on your credit card limits
Can I Receive an Emergency Loan From my Bank?
You can take advantage of emergency loans from your bank. Banks offer emergency unsecured personal loans if you have an adequate credit score, stable income, and a relatively low debt-to-income ratio. However, we recommend checking with your specific bank since each bank offers different terms and conditions.
Do Emergency Loans Impact My Credit Score?
Emergency loans don’t affect your credit score in most cases since they are rarely reported to credit reporting agencies. However, some lenders may report loan defaulters to credit reporting agencies. Therefore, paying off your loan terms is crucial for maintaining your credit score.
How Much Money Should I Have In My Emergency Fund?
How much money you should have in your emergency fund depends on your own financial circumstances. Everyone has different living expenses and financial obligations, however, financial planning experts recommend you should have two to six months of your personal living costs in your emergency fund.
What Credit Score Do I Need For a Personal Loan?
Generally, you need a credit score of 610 to 640 if you want to qualify for a personal loan from your bank. However, online payday lenders don’t have the same requirements, and you can receive a personal loan despite having a credit score under 600.
Furthermore, a secured loan is when the loan is protected by one of your assets, such as a vehicle or home. On the other hand, unsecured loans are when you take credit without putting anything up as collateral. This is why unsecured loans have higher interest rates than secured loans.
Final Thoughts on the Best Payday Loans Online Same Day
Payday loans have helped millions of people just like you. So when unexpected expenses arise, it’s comforting to know there are several debt relief options in the form of online payday loans.
Best of all, the lenders listed above offer rapid approvals, and you can receive your money in less than 24 hours. Lenders like MoneyMutual have an extensive lender network. These payday loan services will match you with the best potential lenders based on your financial situation and needs.
However, finding loan terms you can realistically pay off is important. This way, you won’t add additional stress and financial burden on top of your unexpected initial expenses.
Choose the best payday loans online that accommodate your personal financial situation, based on the guidelines above.
When registering your business as an LLC, your operating agreement imprints the operational guidelines and foundational elements of your company. It’s a customized document that outlines the functional and financial decision-making of the business. Continue reading to learn why creating this agreement is crucial and what operating agreements typically consist of.
An operating agreement for LLC (Limited Liability Company) is a document that identifies the business, defines member duties, states its ownership, and defines other structural components of the company. It usually includes basic information about the LLC and its owners. Furthermore, it states the company’s elected tax treatment and guidelines for handling specific procedures.
Operating agreements function as legal contracts between the members of a multimember LLC. However, single-member LLCs can benefit from operating agreements, too. The operating agreement, once signed, acts as a binding set of rules for the members of the LLC to follow.
It’s important to note that creating an operating agreement is not mandatory for most states. Nonetheless, it’s a crucial document you should create when starting an LLC.
In essence, the purpose of an operating agreement is to govern the business’s internal operations in a way that adheres to the specific needs of the members.
Why Do You Need an Operating Agreement?
There are several reasons why your LLC needs an operating agreement, including:
Defines key business procedures: Although the articles of organization you file with the state make your LLC official, it describes little about how the company functions. LLC operating agreements get more specific in voting, meetings, day-to-day operations, and conflict resolution procedures.
Strengthens your LLC’s “corporate veil”: If you don’t have an operating agreement, courts may not take your LLC status as seriously. The legal separation, or veil, between a company and its members, is key to limiting personal liability.
Protects members from personal liability: An operating agreement is a formality that projects the members from personal liability.
Clarifies verbal agreements: The LLC operating agreement sets all agreements between the members in writing so there is no future confusion or misunderstandings.
Makes certain you aren’t subject to default state rules: If an LLC doesn’t have an operating agreement in place, the default rules set by your state will apply. For instance, states have standard rules that require companies to divide profits and losses equally.
What’s Included in an LLC Operating Agreement?
While the content and structure of LLC operating agreements vary for each business, here are the types of information they most frequently include:
Each member’s ownership conveyed as a percentage
Each member’s responsibilities and voting rights
Guidelines on the duties and powers of each member
The profit and loss allocation among each member
The rules regarding member meetings and taking votes
The issues regarding the management structure of the LLC
Buyout and buy-sell provisions, when a member wants to exit and sell their share.
However, it’s important to remember that operating agreements are not one size fits all. Your operating agreement should be drafted to provide freedom, control, and protection over your specific type of company.
Let’s take a closer look at what’s included in an LLC operating agreement.
Basic Information About the LLC
Operating agreements further emphasize your LLC’s most basic decisions and premises, many of which may already be set in your company’s “articles of organization”. This information typically includes your LLC’s official name, principal place of business, management structure, duration, registered agent, and statement of purpose.
Member Information
One of the most important functions of an operating agreement is to specify how the LLC’s profits and responsibilities are distributed among the members. The operating agreement typically states basic member information, including names, addresses, and roles within the business.
It may also include the amount and nature of a member’s contributions to the business. These are often financial and should state expectations about compensation, which may be described with ownership percentages.
Tax Treatment Preference
LLCs usually have a single layer of taxation. This means they are, by default, exempt from business taxes, meaning profits are only taxed at the individual level when members report their share of income and expenses on personal tax returns.
Furthermore, LLCs have a bit of autonomy regarding tax treatment, depending on the type of business. For example, LLCs may want to elect corporate status by filing as a C-corp or an S-corp to take advantage of certain incentives. The operating agreement should state the LLC’s initial tax status and define the procedure for modifying tax classification in the future.
Management Structure
LLCs have one of two types of management structures, member-managed or manager-managed. A “member-managed LLC” lets members act as “agents” on behalf of the LLC and relies on members for daily operations. This is ideal for small or startup companies with relatively few members.
A “manager-managed LLC” is the second form of management structure where members elect a smaller set of people to manage the company. The non-elected members still retain passive ownership and voting rights on major decisions. This type of management structure is popular among larger companies with passive investors.
Operating Procedures
An operating agreement also includes crucial business procedures for running the company.
These procedures include:
Voting
Approving manager actions
Adding new members
Holding member meetings
Facilitating member exits
Dissolving the LLC
Liability Statement
One of the primary benefits of forming a limited liability company is the distinction it makes between the company and its individual members. Although corporate stockholders are protected from their company’s liability, sole proprietors or partnership members assume full personal liability for the risk of operation.
LLCs combine the best traits of both structures, enjoying a corporation’s limited liability without carrying its level of tax and regulatory burdens. Therefore, LLCs must clearly define the limited liability status with a comprehensive liability statement in case this status is challenged in the future. The operating agreement is the best place to declare this statement.
Extra Provisions
The final goal of an operating agreement is to proactively navigate future bumps in the road. For this reason, they usually include provisions describing what happens in the event of unplanned circumstances such as a member’s death, a member’s withdrawal from the LLC, and disputes among members.
Most operating agreements end with a “severability provision,” stating the rest of the operating agreement stays in effect if one part is opposed to state or federal law and is otherwise unenforceable.
How to Create an LLC Operating Agreement?
Creating an operating agreement is a straightforward process as long as you use a template or get help from a business formation service.
Let’s discuss each option:
Do It Yourself
You shouldn’t draft an operating agreement yourself without a legal background. Since an operating agreement is legally binding, you don’t want to make any mistakes. Instead, you can use a blank template or step-by-step instructions. You can find many variations through legal help websites and law libraries.
Use an Online Service
The most efficient way to create an operating agreement is with the help of LLC formation services such as ZenBusiness and Rocket Lawyer. These services offer interactive templates that provide the structure and framework necessary to start a successful business.
These automated business registration services offer an easy way to create an optimized operating agreement for your specific type of business.
Use a Professional Service
If your LLC has unique considerations and a high level of complexity, you may want to consider getting professional legal help. There are plenty of lawyers specializing in operating agreements and offer pricing for individual documents instead of hourly rates.
What Is an Operating Agreement – Frequently Asked Questions (FAQs)
Before you start drafting your operating agreement, there are a few key questions we receive about operating agreements you should know. Here’s a list of some frequently asked questions about operating agreements for LLCs.
Which States Require LLC Operating Agreements?
Five states require LLC operating agreements, including New York, California, Missouri, Maine, and Delaware. Although requirements differ among the states, none require you to file anything with the state office. Instead, they only require an operating agreement to exist.
Do Single-Member LLCs Really Need an Operating Agreement?
Although it’s not necessary for 45 states, it’s strongly recommended. Operating agreements can help a single-member LLC establish credibility and help ensure LLC status. Without a proper operating agreement defining the legal distinction between the LLC and the sole owner, it can be challenging in the event of litigation.
Is an LLC Operating Agreement Legally Binding?
LLC operating agreements are typically treated as legally binding documents once signed. If a member from the LLC ever goes to court to resolve internal issues or disputes with a third party, the court will likely hold members accountable to the guidelines in the operating agreement. Keep in mind that you don’t need to get an operating agreement notarized.
What’s the Difference Between an LLC Operating Agreement and Articles of Organization?
Articles of organization are official documents that you must file with the state when you form an LLC. These documents are relatively minimal and include basic information about the LLC, its management structure, and its members. On the other hand, operating agreements provide more detail about essential business functions and structure.
Can I Modify an Existing LLC Operating Agreement?
Yes, you can amend the operating agreement to ensure it’s up to date at all times. It’s important to keep your operating agreement updated. You can create amendments and, once approved by the members, you can file the amended operating agreement with the secretary of state as needed.
Bottom Line on What is an LLC Operating Agreement
An LLC operating agreement is a legal document that lays out the terms of an LLC to its members. As such, it creates the roadmap for the business to follow and provides clarity in operations and management. It’s important to develop an operating agreement because, without one, your LLC is governed according to your state’s default rules.
Forming a limited liability company (LLC) is one of the most important steps when starting a new business. An LLC offers your business liability protection as well as a multitude of other benefits. This guide teaches you everything you need to know on how to start an LLC and what to expect during the process.
The first step is to choose the state you want to register your business in. You should choose the state where you live or where you plan to conduct your business. Different states have different regulations and rules regarding how to start an LLC. For example, each state has different taxation, costs, fees, and other policies.
Although you can find each state’s LLC rules and regulations online, you can also use an LLC formation service like ZenBusiness to get started quickly. Services such as ZenBusiness and Inc Authority will hold your hand from steps A to Z as you form your LLC.
What’s the Best State to Start an LLC?
Delaware is the most popular state to form an LLC because it carries a strong reputation for being business-friendly and offers a quick filing process with increased protection. However, we recommend forming your LLC in your home state because that is where your LLC conducts business.
Which State Has the Lowest Business Tax?
South Dakota, Wyoming, and Nevada have no individual or corporate income tax. However, Nevada imposes gross receipts taxes. Furthermore, Alaska doesn’t have individual or state-level sales tax, and Florida doesn’t have individual income taxes. Lastly, New Hampshire and Montana have no sales tax.
Your next task is to name your LLC. However, you can’t simply choose any name. You must make sure the name is available for use or not in your state. Furthermore, you must ensure your business name doesn’t violate another business’ trademark.
This means you can’t choose a name that’s identical to another business’ name or that is only different because of an “s” at the end or another business entity identifier. For instance, you can’t start an LLC called “John’s Kitchen Supplies, LLC” if there is already a “John’s Kitchen Supply, LLC” in your state.
If you check available business names before filing your paperwork, you can avoid having your LLC formation request denied because of naming problems.
Here are a few essential LLC naming guidelines to follow:
You must include “Limited Liability Company” or abbreviations like LLC or L.L.C in your business name.
You can’t include words that may confuse your company name with a government agency, such as Treasury, State Department, and FBI.
You can’t use words such as Bank, University, and Attorney in your LLC’s name. These words may require further paperwork in addition to a licensed person like a lawyer or doctor as part of the company.
Most importantly, you should choose a name that’s distinctive and relates to your type of business. The name should do a good job of telling people what products or services you sell or offer. You also want to pick a name that’s memorable and easy to pronounce. It’s a good idea to check if your LLC’s name is available for domain name registration before finalizing your decision.
How to Check if a Business Name is Taken?
Each state has a secretary of state or other state agency responsible for business entity filings. In most states, the online site of the state business filing agency has an entity name check tool. Use the tool to search business names and learn whether or not another business is already using the name you want.
Can I Reserve My Business Name?
You can reserve LLC names for up to 3 months if you don’t want to register your LLC right away. However, each state has different rules regarding LLC name registration. Furthermore, you are required to pay a reservation fee and submit a name reservation form with your state business entity filing agency.
Step 3: Nominate a Registered Agent
After naming your LLC, the next step is to choose a registered agent. A registered agent is an organization or person who receives legal documents on behalf of your company. These documents include official correspondences like legal summons and state filing notices.
All LLCs must have a registered agent to ensure the LLC receives these official notices and documents. Furthermore, the registered agent must be 18 years or older and have the right to conduct business in the state. The registered agent must also have a physical street address in the state. As such, you can be your own registered agent if you meet the eligibility requirements.
However, we recommend using professional registered agent services for this purpose. Hiring a professional registered agent ensures you receive all the crucial mail and information that may get lost in translation if you’re your own registered agent.
How Much Does It Cost to Hire a Registered Agent?
The cost of hiring a registered agent depends on which state you want to start an LLC in. It also depends on which registered agent service you use. While the cost can go up to $300, Northwest Registered Agent offers a standalone registered agent service for $125 a year.
Step 4: File LLC Formation Documents
Step four is the most important step when you start an LLC. The LLC formation documents are known as the Certificate of Formation or Articles of Organization.
You must fill in the form, either online or in PDF, and send it to the Secretary of State after paying the formation state fee. The filing fee depends on which state you file in. For example, the fee starts from $40 in Kentucky and can go up to $500 in Massachusetts.
So, visit your state LLC filing agency’s website and fill out the Articles of Organization.
Once you finish filling out the Articles of Organization, the business owners must sign the form. Furthermore, a few states, such as New York and Nebraska, require you to publish a notice in the newspaper specifying your desire to register your LLC. You must complete this step before filing your Articles of Organization in these states.
The Articles of Organization will explain if you need to take any further action before submitting the form.
Step 5: Create an Operating Agreement
Once you submit your LLC formation documents, you must create an operating agreement. An operating agreement includes the details of the legal, financial, and management rights of all members of your LLC. It also details how profits are distributed, how members leave the LLC, and who provides capital for the business.
In essence, the operating agreement contains all the relevant information related to your business operations. Although many states don’t require an operating agreement, creating one is strongly recommended. This is especially important if you have more than one member or partner.
The operating agreement ensures everybody agrees on their designated rights and responsibilities. While creating your own operating agreement is an option, you can find dozens of free templates online to get you started.
However, you may want to hire the best LLC services like ZenBusiness to create your operating agreement if you have a complex LLC structure with multiple owners.
Here are the six primary sections of a standard operating agreement:
Capital Contributions
Dissolution
Distributions
Membership changes
Management and Voting
Organization
Step 6: Apply For an EIN
Next, you need to get an Employer Identification Number (EIN) for your LLC. An EIN is a unique 9-digit issued by the Internal Revenue Service (IRS). Every LLC is required to get an EIN to help the IRS distinguish each business for general tax purposes. Therefore, an EIN is similar to a Social Security (SSN) number for your LLC.
Your company’s EIN is crucial if you plan to hire employees or open a business bank account. You can obtain an EIN by applying directly on the IRS website. The IRS will issue your EIN immediately once it verifies your application.
All multi-member LLCs need an EIN, regardless of whether they are taxed as a partnership or have chosen to be taxed as a corporation. However, the IRS treats single-member LLCs as a disregarded entity unless they elect to be taxed as a corporation.
Therefore, single-member LLCs are not required to obtain an EIN unless it has one or more employees or excise tax liabilities.
Step 7: Receive a Certificate from the State
After your LLC formation documents are filed and approved, your state will send a certificate to confirm that your LLC formally exists. After you receive the certificate, you can handle further business matters like obtaining business licenses and opening a business bank account.
After You Start an LLC
After starting your LLC, there are additional tasks to manage and review. Here are other essential things to address after forming an LLC.
Set Up Business Accounting. Having a business accountant who will help you take advantage of tax benefits is crucial. Accurate bookkeeping is essential for any successful business.
Get Permits and Licenses. Check if your business needs any business licenses or permits to stay compliant with your state’s laws and regulations.
Separate Personal Assets From Business. It’s vital to open a dedicated business bank account and credit accounts to avoid blending them with your personal bank accounts. If you don’t separate personal assets from business assets, your personal assets (your car, home, and other valuables) are at risk if your LLC gets sued.
Get Business Insurance. In most cases, businesses with employees must get workers’ compensation insurance. Although general liability insurance is not a legal requirement, we recommend getting it to protect your business assets from lawsuits.
How to Start an LLC – Frequently Asked Questions (FAQs)
Before you head out, we want to answer a few common questions we receive about how to start an LLC. This way, you will have all the information you need to launch your business without any headaches along the way.
Can My LLC Do Business in Other States?
If you want to conduct business in a state other than the state where you formed your LLC, you must register your LLC in the new state and designate a registered agent. Therefore, an LLC cannot transact business in states other than its home state.
How Much Does It Cost to Form an LLC?
The cost of forming an LLC varies from state to state. Generally, the filing fees can range from $40 to $500. You can typically file for an LLC online using a debit or credit card or by mail with a check or money order. Find the exact filing fee for your state by visiting your secretary of state’s website.
Is an LLC Better Than a Sole Proprietorship?
Both sole proprietorships and LLCs have their advantages and disadvantages. Starting an LLC is a good option if you want to protect your personal assets from potential legal and financial liability.
Bottom Line on How to Start an LLC
Learning how to start an LLC is quick and painless once you know the exact steps. If you follow the above guidelines to a tee, you will have your LLC up and running in no time. However, if you want to expedite the process, we recommend using a professional LLC formation service from ZenBusiness or Inc Authority.
A limited liability company (LLC) is a business entity operating out of a specific state. Its particular model caters to both single-person enterprises and large organizations through personal protections and tax benefits. This article explains what is an LLC business, its advantages, and the steps needed for formation.
A limited liability company, or LLC, is a popular type of business structure in the United States. Sometimes referred to as a hybrid entity, it takes some of the best pieces of corporations and partnerships/sole proprietorships and mashes them together.
Rules for registering your business as an LLC and regulations for maintaining your enterprise do vary from state to state. Many states allow foreigners and citizens alike to create this type of business structure.
There are no restrictions on the size of an LLC, making the structure available to anyone with a business. One or more individuals can own an LLC, known as “members”. Even small companies or startups with a single member can take advantage of an LLC’s benefits.
Common examples of LLCs
Many large businesses are actually LLCs. Some prominent examples include search engine giant Google, tech company Microsoft, and ecommerce behemoth Amazon. Other big names include Johnson & Johnson, General Electric, Sony, and Pepsi-Cola.
Advantages and Disadvantages of LLCs
There are several upsides and very few negatives to forming an LLC. Let’s take a look at these now.
Advantages
Personal Asset Protection
Perhaps the most appealing aspect of a limited liability company is the ability to safeguard its owners’ personal assets. Should your business become subject to a lawsuit, LLCs create a clear and distinct line between personal and business. Even if your company can’t afford to pay damages, those filing against you are unable to take from your personal finances.
This is not the case with a partnership or sole proprietorship, where there is no such distinction. If hit with legal penalties, your personal assets are fair game.
Tax Options
LLCs have the advantage of choosing a tax status from other business structures, be it sole proprietorships, partnerships, S corporations, or C corporations.
Because of this, it’s rare for this business type ever to pay taxes at the business level. LLCs can benefit from pass-through taxation, where profits pass straight to owners. Members then record their earnings on individual tax returns.
On the other hand, C corporations get hit with double taxes on both the top level and again when reporting on individual returns. When it comes to an LLC vs corporation comparison on taxes, the former takes the win.
Management Flexibility
Whether you’re flying solo or wish to own your business with others, LLCs have a place for you. There are no limits to the number of members an LLC has to have, and that number can change as your company progresses. It’s even possible to divide up profits among these individuals in specific ways.
The ownership also gets to structure the organization how they see fit. They can take it upon themselves to run the business or hire a manager to oversee day-to-day operations. Read more about member-managed vs manager-managed LLC.
Business Credibility
Many other organizations view a limited liability company as a more formal business entity than a sole proprietorship or partnership. Adding the LLC or some form therein to your legal business name goes a long way with customers as well. Some banks may require proof of LLC status to make available certain types of business bank accounts or small business loans.
Simplicity
An LLC is typically easy to form and maintain from year to year. There’s little paperwork involved in the process, and states usually require just one annual report to maintain good standing.
Business owners also have to worry less about administrative procedures that can bog down the corporate structure. With an LLC, you don’t have to hold annual meetings, assign specific officer roles, or keep a record of company minutes.
Disadvantages
Cost
Anyone settled into a sole proprietorship or partnership can benefit from the minimal costs of maintaining business status. Fees for forming an LLC can add up, as many states require upfront payment before allowing you to create your business. Similarly, LLCs must have a registered agent to handle legal documentation.
As each year passes, many states add on additional costs in the form of franchise tax fees or through annual reporting.
Transferring ownership
It’s a bit of a pipe dream to assume the members you start your business with will be there until the end. In corporations, individuals can buy or sell stock to modify ownership, but the same isn’t true for an LLC.
When it comes to transferring ownership in an LLC, usually all members have to approve changes to ownership percentages or add new members into the fold. As you form your LLC, it will be up to the ownership at the time how to structure this rule.
What is an LLC – LLC Formation Process
Forming an LLC is a relatively simple process, but there are some necessary steps involved to ensure compliance with the state. Be sure to follow these steps when creating a business of your own. If you’re interested, read out in-depth guide on how to start an LLC.
Step 1: Select Your State
When starting up an LLC, you can choose any state in the Union to do business in. There’s no requirement when selecting the state you live in or plan to work out of, but most owners opt to use this location for the sake of convenience. If you plan to have a physical location, you will want to establish an LLC in the state with your store.
Each state has its own requirements for forming an LLC, and some tend to have better benefits than others. If looking to form your LLC in a state not your own, you will need to file as a foreign limited liability company. Doing so often comes with additional fees and paperwork.
Step 2: Name Your LLC
Naming your LLC isn’t as simple as coming up with a cool name. LLCs in each state must have unique names distinguishable from all other registered names when you go to file. Using a name search through one of the best LLC services can help you whittle down your options and reduce issues during submission.
Customers have a much better chance of remembering short names that are both clear and memorable. Be sure not to lock yourself into a very specific business type if you plan to expand to new areas in the future.
Your LLC’s designation can’t be misleading to potential customers, though. Anything with “corporation” or some form of the word will surely end up on the rejection file. Along those same lines, it’s not wise to include a word or phrase that alludes to a different business purpose. States may have other rules about naming conventions that you’ll want to be sure to follow.
It’s a good idea to come up with a name quickly, even if you’re not quite ready to file. Several states charge a small fee to hold names for a short period of time while you finalize other details of your startup.
Step 3: Choose a Registered Agent
Every LLC needs a designated registered agent serving as your point of contact for legal and governmental matters. Whoever you choose needs to work regular business hours and have an address in the state you’re forming in.
There’s no rule stating you can’t be your own registered agent, but you’d need to be on hand to handle matters as they arise. Most business owners turn to a service to function as a registered agent. Going with the best registered agent services frees you and other members up to perform other tasks while having peace of mind that sensitive matters won’t get missed.
Step 4: File Your Articles of Organization
This form, submitted to the state, contains important information about your company. Each state’s form is a little different, and some areas may call the document certificates of organization or certificates of formation instead.
As one of your final steps for formation, you’ll need to provide your company name, address, registered agent, and what your business plans to do. Each owner’s name also needs to be on the form with an expectation for how long your venture will exist.
Step 5: Create an Operating Agreement
Your operating agreement serves as the foundation of your business from a legal, operational, and financial aspect. Each member should collaborate to create the rules everyone must follow when running the show.
Although this document is unique to your business, it’s essential to capture key points members can turn to whenever there’s a disagreement among the ranks. List everything that ends up in your articles of organization as a reference and who your members are. This is a great place to record ownership percentages and where responsibilities lie.
From a financial standpoint, cover your tax status and how the company plans to keep financial records. When profits roll in, it should be clear where every penny ends up. There should even be rules on who can change your operating agreement and the method to do so.
Step 6: Get an EIN
An Employer Identification Number (EIN) becomes your company’s unique code for all tax purposes. Any LLC will more than one member requires one, but even single-member LLCs benefit from using an EIN over a social security number. You’ll use this nine-digit number for paying taxes, opening a bank account, or obtaining business licenses.
Step 7: Stay Compliant
Nearly all states require you to check in at specific intervals after forming your LLC. The most common duration is one year, but some governments may wish to hear from you sooner or later. These reports help keep authorities apprised of any changes to your organization and often come with a maintenance fee.
What is an LLC – Top LLC Services
It is possible to accomplish every step of the LLC formation process on your own, but doing so is tedious at best. Missing even one small detail can lead to applications being rejected and significant delays in opening your business to the public.
Consider using an LLC service to do all the heavy lifting for you. These services understand the specific needs of every state, can expedite filing, and are able to function as your registered agent if needed. When it comes time for your yearly report or pooling together tax information, these services can offer assistance there as well.
As you consider an LLC service to help get your business off the ground, we recommend one of the following:
What is an LLC – Frequently Asked Questions (FAQs)
This section serves to answer some of the most commonly asked questions about what an LLC is.
What’s the point of having an LLC?
If you’re starting a business, you need some type of business structure. LLCs provide limited liability, protecting an owner’s personal assets from those of the company. They also offer pass-through taxation, allowing businesses to avoid paying twice on profits.
What’s the difference between LLC and INC?
LLC stands for limited liability company, a type of business structure giving owners tax flexibility and lenient ownership requirements. Anything with INC represents a corporation, a completely different structure with its own set of rules.
What is the owner of an LLC called?
Owners of an LLC have the designation “member”. In an LLC, there can be a single owner or multiple people at the top level. LLCs have the freedom to assign different roles to members and divide up profits as the group sees fit.
How does an LLC save money on taxes?
LLCs benefit from tax-through formation, a special status usually reserved for sole proprietors or partnerships. Here, earnings don’t get taxed at the business level. Instead, profits pass straight through to members, who then pay taxes on the individual level.
What is the best state to register an LLC?
Delaware and Wyoming present great options for registering your LLC due to business-friendly processes and tax benefits. Still, in many cases the best place to file is in your home state, where you’re likely already familiar with laws and regulations. Read more about the best states to start a business.
Bottom Line on What is an LLC
LLCs are a popular business structure combining many of the benefits that come with sole proprietorships, partnerships, and corporations. Its two standout features are the protection of your personal assets and the opportunity to pass-through taxes on the business level.
Forming an LLC can be a lengthy process, from coming up with a name to filing all the necessary paperwork. LLC services can remove much of the work and stress, allowing you to focus on the things that matter most.
ZenBusiness has one of the cheapest LLC services, starting at just $49 to get your company up and running. Their filing process is swift while offering the tools and guidance to get everything right the first time. Check out ZenBusiness today to create the LLC of your dreams.
Many businesses don’t concern themselves with online reviews, but these comments are an integral part of your overall success. This article looks at 60 unique facts and statistics showcasing why online reviews should be paramount in every business’s growth strategy.
Top 10 Online Review Statistics
Only 5% to 10% of consumers write reviews
89% of consumers are ‘highly’ or ‘fairly’ likely to use a business that responds to all of its online reviews
Only 7% of consumers say they’re ‘not at all’ suspicious of reviews on Facebook
34% of consumers only leave positive reviews
7% of consumers only leave negative reviews
85% of all reviews come from only four review sites
Customers don’t trust companies with ratings below 4 stars
98% of people read online reviews for local businesses
Businesses that claim free listings on multiple review sites make 36% more revenue
90% of customers read online reviews before visiting a business
Online Reviews and Their Impact on Businesses
Whether you like it or not, online reviews are the first thing customers want to see before ever visiting your store. No matter how amazing your website or physical location may be, individuals won’t even bother walking through the door if they don’t like the rating they see.
Low scores mean fewer customers, leading to diminishing sales and abysmal revenue numbers. Those with stellar reviews are prone to new customers based on a rating alone. Businesses maintaining ratings of 4 stars or more see significantly higher revenue numbers and customer retention.
Reviews also provide insight into the consumer’s mind. Any venture taking the time to read such feedback can see what shoppers enjoy and the areas they dislike. Addressing concerns while focusing on the good can have a considerable impact.
How Important Are Online Reviews?
Now more than ever, customers are looking to the internet for feedback before making decisions regarding a purchase. Nearly the entire population reads online reviews before buying products and services.
What those reviews say has a monumental impact on how customers react to your business. They’re more likely to trust businesses with online reviews than those who don’t due to an increased risk of the unknown.
Reviews speak volumes and carry just as much weight as a personal recommendation from a close friend. Conversely, negative feedback is enough to scare off all but the most stubborn customers from shopping at your store. It’s clear that online reviews have the power to make or break your company, especially if you’re just starting your business.
60 Facts & Statistics about Online Reviews
1. Only 5% to 10% of consumers write reviews (USA Today)
Of all consumers to make a purchase from your store, only 5% to 10% will take the time to write a review. What’s shocking is that even this low number still accounts for $400 billion in online sales revenue! Businesses encouraging more customers to review products will have more influence on other shoppers and the potential to generate even more revenue.
2. 89% of consumers are ‘highly’ or ‘fairly’ likely to use a business that responds to all of its online reviews (Brightlocal)
Reviews in this day and age are not a one-way street. Customers like to hear from business owners even more than they like posting reviews about whatever product or service you’re providing.
With review sites allowing businesses to respond to reviews, what you say can have a huge bearing on future revenue. Responding to all your online reviews, as challenging as that may be, helps you appear engaged and in tune with shoppers.
3. Only 7% of consumers say they’re ‘not at all’ suspicious of reviews on Facebook (Brightlocal)
Facebook tends to get a bad rap when it comes to sellers. Its Marketplace is plagued with scammers and fake businesses using unscrupulous methods to make a buck. In the eyes of many, this translates to business reviews as well.
Only 7% of consumers don’t think twice about the reviews they see on the site. The vast majority need something more than positive notes to trust what you’re peddling. When allowing reviews on Facebook, make sure to keep your page up to date with information and imagery showing people you’re the real deal.
4. 34% of consumers only leave positive reviews (Brightlocal)
Perhaps the best type of consumer, this 34% wedge believes the old adage that it’s better to say nothing than speak negatively of someone or your business. Good products or experiences go on record, but one-third of people won’t leave a bad review even if they receive the wrong item from you three times in a row.
5. 7% of consumers only leave negative reviews (Brightlocal)
On the contrary, some people are just never happy. No matter how fast the shipping, how stellar the client support, or how amazing the product, 7% of consumers will never leave a positive review. Fail to meet expectations, and you just might end up with that scathing one-star review.
6. 85% of all reviews come from only four review sites (Reviewtrackers)
It may seem overwhelming to stay on top of reviews scattered all over the internet, but it’s not as bad as you think. As of the summer of 2022, four sites make up 85% of all reviews posted online.
Google sees the vast majority with 73%, and Yelp follows with 6%. Both TripAdvisor and Facebook tie in with 3% of total reviews. Businesses with limited bandwidth should focus on these four sites, responding to reviews and listening to customer concerns. A high rating on these sites can do wonders in client generation and sales.
This interesting statistic is precisely why it’s important to monitor and address customer reviews. The moment your review score on a site drops below four stars, customers lose faith in all facets of your business.
Following customer chatter can help you pinpoint issues as they arise and not after your review score has taken a heavy blow. Customer relationship management services can offer an additional view into shoppers’ minds to stay on the pulse of what makes them happy. Read more about the best CRM software.
8. 98% of people read online reviews for local businesses (Brightlocal)
Even if you have a brick-and-mortar location in your town, potential customers look online for dirt on your store before ever stepping foot inside. An incredible 98% of people get their initial reaction to your business from postings about you on the internet.
It doesn’t matter if you perform internet sales or wish to have an online presence at all. You still need to read what the world says about your venture and do everything in your power to keep that rating high.
9. Businesses that claim free listings on multiple review sites make 36% more revenue (Womply)
We know that Google brings in far more reviews than any other review site, but that doesn’t mean the buck should stop there. Businesses taking the time to claim listings on multiple sites make on average 36% more revenue than those that don’t. What’s more, you can focus on free listings and still reap the benefits.
10. 90% of customers read online reviews before visiting a business (Invesp)
Whether your store is online or in-person, 90% of customers are now reading your reviews before paying you a visit. Only 10% of people will try out a building or site without scrutinizing it first, and this small number won’t keep the lights on.
Online reviews are now THE go-to place for gathering information on the kind of business you are before deciding to shop with you. This goes above and beyond personal recommendations and all the marketing campaigns you can come up with.
11. Yelp sees 26,380 new reviews posted every minute (Invesp)
Yelp is the second most popular review site after Google, but business owners should not underestimate its significance. It sees a staggering 26,380 new reviews every single minute about your business and the competition.
With so many customers using Yelp to post reviews, your team should check the webpage frequently for pertinent mentions. Not only can you get leverage into what others are doing, but it’s also possible to assess what customers think about you.
12. 69.7% of people consult Google for local business reviews (AgilityPR)
A majority of business reviews end up on Google, so it’s only natural that customers migrate there to read the latest on local companies. Google makes reviews overt when searching for website information or an address, and scary ratings can turn potential clients away in a hurry.
39% of people check Facebook and 25% view Yelp, either apart from or in tandem with a Google search. Google is still the top dog, but don’t rule out the impact other review pages can also have on your appeal to customers.
13. Google removed 130 million fake reviews in 2019 and 2020 (AgilityPR)
In 2019 and during the early onset of the pandemic, Google cracked down on fake reviews polluting its system. The resulting purge removed over 130 million counterfeit comments left to falsely boost or tear down a company’s credibility. Already a multi-billion dollar problem, many fear things will only get worse.
Google is well-known for its algorithms and anti-deception tactics, but no one can locate every rotten egg. As a business owner, make the most of credible reviews through client interaction and tackling concerns. This way, a few fake reviews stand out like a sore thumb and won’t water down your rating much anyway.
14. 62% of consumers are more likely to purchase if they see photos and videos of other customers (Findstack)
Feedback from other customers is paramount in putting the shopper in the shoes of a current client. Pictures and videos are worth a thousand words, as consumers gravitate more toward reviews they can visualize.
The extra media also gives an additional layer of credibility to a review and your business as a whole. If you have the means, make it as easy as possible for customers to upload images or videos to a review so they have more incentive to do so.
15. Only 9% of customers would consider engaging with a business that has an average star rating of 1 or 2 stars (Findstack)
No one is perfect, and there’s a decent chance you’ll receive some negative reviews during your time running a business. The important thing is to react appropriately and resolve any issues that may lead to additional dings.
Once you’ve reached the 1 or 2-star mark, only 9% of all customers will even consider doing business with you. The road to recovery would be slow if there’s any hope of salvation.
16. Businesses that have 200 or more reviews have twice as much revenue compared to others (Findstack)
It can be slow-going for new businesses, and would-be shoppers are leery about purchasing from a site with only a handful of reviews. Although reviews are a primary driver of customers to your site, the right marketing tools can get the ball rolling.
After reaching that 200 review mark, businesses see on average twice as much revenue as sites with lower counts. This magic number is the turning point where customers believe you’ve proven yourself and are worthy of their business. Of course, make sure these reviews lean strongly on the positive side.
17. 73% of consumers don’t even consider reviews if they were not written during the past month (Statuslabs)
Last month’s news is ancient history. Nearly three-quarters of consumers will sort by “Most Recent” and ignore anything over a month out. Shoppers want to make sure you’re keeping up your A-game, and there’s no slip in service or quality. Teams change, and products change, but your company still has to live up to expectations.
18. 71% of people are willing to submit satisfactory reviews if it’s easy to do so (ServiceDirect)
Customers aren’t afraid to share their opinions about your product or service; they just don’t want to be inconvenienced along the way. The vast majority of individuals will submit a positive review if you provide an easy access point. After a customer makes a purchase, follow-up communication can be a great way to keep clients engaged while providing a one-click review opportunity.
19. TripAdvisor has over one billion reviews (TripAdvisor)
TripAdvisor is currently the world’s largest travel guidance platform on the web. It stands out from other sites by allowing individuals to share reviews on locations and experiences around the world.
Voyagers heading to all corners of the globe use the site for advice and feedback from those who have walked the path before. In early 2022, the company reached a significant milestone with over one billion reviews.
20. 41% of travelers have avoided a destination over fears it may be a tourist trap (BreakingTravelNews)
Online chatter about travel hotspots has a significant impact on those making trip plans. 41% of individuals researching online have chosen to avoid a location completely over feedback from other travelers. Even if you’re not in the travel business, such a statistic shows the power online reviews have on others.
21. People spend up to 49% more money at businesses that reply to reviews (Womply)
Customers look more favorably on businesses that take the time to reply to online reviews. Companies choosing to respond on review sites bring in up to 49% higher than those without such interactions. Such a statistic highlights the need for review monitoring, and even hiring additional staff to cover the role can produce a massive return on investment.
22. 75% of businesses don’t respond to any of their reviews (Womply)
Missing out on customer interaction through online reviews hurts businesses two-fold. As mentioned above, there’s a massive oversight in potential revenue that comes with companies taking the time to reply to online reviews. Customers are much more likely to shop at your store or site in the first place if they see an acknowledgment from your team.
As hard as it is to imagine, 75% of businesses are losing out by not responding to any of their online reviews.
23. Businesses with 4 to 4.5-star ratings earn the most revenue (Womply)
It makes sense to think companies holding 5-star ratings are the best, but statistics show this isn’t the case. While there’s no doubt that low-rated businesses turn away potential shoppers, flawless reviews have the same effect. As it turns out, a perfect rating appears fake in people’s eyes, leading them to browse elsewhere.
Businesses sitting somewhere between 4 and 4.5 stars actually bring in the most revenue on average. Customers see that, despite your imperfections, you’re still able to provide what they’re looking for.
24. Businesses average 82.5 total reviews across all review sites (Womply)
Even with so many free listing sites, businesses only average a total of 82.5 reviews across all of them. We learned earlier that revenue spikes considerably after 200 reviews in the tank, so most businesses are leaving money on the ground.
These companies likely aren’t providing easily-accessible opportunities for buyers to voice their opinions. Zendesk is a software package capable of handling follow-up emails with clients asking for feedback in the form of a review.
25. Businesses with more than 9 reviews in the last 90 days earn 52% more than average (Womply)
Your shoppers aren’t looking for hundreds of reviews per week, per month, or even per year. People like to zero in on what your company is doing at the moment and want to hear about it from more than one person. Still, generating just nine reviews over the last 90 days of business can earn 52% more in sales than those with less customer feedback.
26. 19% of the reviews the average business receives are negative (Womply)
In the grand scheme of things, you’re going to have to deal with the occasional bad review. However, how often should you expect to see one?
The average business tallies a negative review about once in every five postings. That may seem like a lot, but it still keeps your rating just above the 4-star mark. Above-average companies end up with ratings closer to 4.5 stars and are even more desirable to shoppers.
27. Positive review rates in the United States are highest in Maine and Vermont (Womply)
As more business move online, products can reach new parts of the country. Buyers from New England come across as the happiest, with Maine and Vermont leaving roughly 85% positive reviews each. New Hampshire rounds out the top five in the same category.
Nevada brings up the end of the list but still broadcasts a 77.7% positive review rate. People genuinely are willing to post positive reviews from coast to coast if you facilitate the process.
28. Customers read restaurant reviews more than any other business type (Brightlocal)
No industry leans on reviews as heavily as restaurants do. Would-be customers flock to the internet for diner feedback more than any other business type. Every undercooked steak, long wait, or rude staff member could go into the books as a deterrent for future business.
29. Only 48% of consumers would consider using a business with fewer than 4 stars (Brightlocal)
The 4-star rating stands at the precipice of a large cliff your business does not want to venture off of. Although customers look highly toward anything between 4 and 4.5 stars, interaction drops drastically once you reach 3.9.
It’s up to you as a business owner to steer your vehicle away from the 3.9 mark and stay in the public’s good graces. Customer relationship management tools help keep your team engaged with consumer needs so you have a clear direction moving forward.
30. People use mobile internet browsers more than any other method for reading reviews (Brightlocal)
We’re always on the go in this day and age and rarely have time to sit in front of the PC to read reviews. Instead, we spend the most time looking at reviews on a mobile internet browser than anywhere else.
Many businesses forget about the unique formatting requirements mobile devices need to see and read the information clearly. While you can’t control what Google does, you can drive people toward Google in a mobile-friendly way. It’s also worth noting that internet browsers see more use than apps.
31. 92% of users will use a local business if it has at least a 4-star rating (Invesp)
If you can keep your local business above a 4-star rating, you’ve already won over 90% of the people in your community. It doesn’t matter if your business is next door. People still head online to make a decision about you before stopping by in person. It’s imperative to stay up to date with your online reviews, even if your company doesn’t do a lick of digital business.
32. The majority of customers read 2-6 reviews before trusting a business (Invesp)
The best review imaginable isn’t going to cut it if you don’t have others saying the same thing. It doesn’t take long for the average consumer to flip through online reviews, and most people need to see two to six good ones before putting trust in you. While that seems like a steep ask, it also helps customers weed out fake negative postings that don’t accurately reflect your business.
33. Average reviews are only 200 characters (Reviewtrackers)
Over the past ten years, Google and Facebook have trended toward shorter customer reviews. On average, customers type out 200 to-the-point characters when sharing about their business. This is no more than a few sentences with specifics about their experience.
Yelp and TripAdvisor still feature higher review counts, with an average closer to 600.
34. 53% of customers expect businesses to respond to negative reviews within a week (Reviewtrackers)
Responding to reviews is already a huge feather in a business’s cap, but it goes one step further. When customers post a negative review about your company, half of the people expect an explanation within the first seven days. Missing the mark here can give the impression you don’t have a solution to the problem and might scare other customers off.
35. 67% of people believe fake reviews are a problem (NearMedia)
People have learned not to believe everything they hear on the internet, and this holds especially true when it comes to online reviews. Two-thirds of people believe fake postings are a problem and weigh this factor when reading about your business.
Although review sites like Google take great lengths to remove fake reviews, it doesn’t have the means to catch them all. What’s worse, 33% of the population don’t yet consider fake reviews to be significant when casting judgments on your site.
There may not be a way to stop fake reviews from targeting you, but these cheap imitations tend to disappear in a sea of credible, positive feedback. Don’t expect these satisfactory reviews to shop up on their own. Reach out and incentivize customers to share their experiences.
36. 57% of consumers need at least a 4-star rating before they choose to use a business (Brightlocal)
Online businesses are numerous, and consumers will likely browse reviews before picking out the best one to shop at. 57% of people will turn away from any business with less than our stars as an overall rating.
While an exciting web design and a cool name are crucial, don’t forget to invest in the customer experience, reading feedback, and handling concerns that may pull your rating into no man’s land.
37. 80% of 18-30-year-olds have written online reviews (Brightlocal)
18 to 30-year-olds grew up in a digital age and have the best handle on how the system works. 80% of those in this category are already familiar with the online review process and have written at least one. This is a great demographic to target when asking for business reviews.
When using HubSpot’s customer relationship tools, filter your existing list of contacts by this age range and prompt them for those reviews when you follow up after a sale.
38. Only 41% of consumers over 55 have written a review (Brightlocal)
Unlike the younger demographic, those growing up before the age of personal computers have a much smaller digital footprint. Of those 55 and older, only 41% have ever written any type of review. It stands to reason that they read fewer reviews as well.
When marketing, it’s understandable to hone in on younger generations for the most feedback. However, there’s still a considerable number of those in the 55 and up crowd willing to contribute to your site if you give them a chance.
39. 22% of consumers will not buy after reading just one negative review (WebsiteBuilder)
Negative reviews can bear a heavy burden on your business, whether justified or not. One in five consumers will walk away after reading just one negative review posted about your company. When you break down the math, that could be upwards of 30 customers.
While probably an unfair course of action, the loss of customers spells fewer sales and revenue. To make matters worse, only 40% will stay with you after uncovering three negative reviews. It’s possible to avoid all negative reviews, but your response to them and the number of positive reviews you get will help compensate.
40. Consumers trust peer reviews 12 times more than manufacturer descriptions (Econsultancy)
Big-box stores like Amazon have tainted the consumer perception of a good product description for the worse. Customers translate this way of thinking to all websites and will be wary of descriptions listed about their own goods.
Luckily, consumers trust the information in peer reviews 12 times more than anything you have to say. Encouraging consumers to post product details, experiences, and pictures can be incredible selling points on top of a flattering score.
41. 27% of people will only trust reviews if they believe they are authentic (WebsiteBuilder)
Our society is not as trusting as it once was, and many individuals are skeptical of information found on internet sites and online reviews. Upwards of one-quarter of the population will only trust reviews if you’ve gone to enough lengths to show credibility. In their eyes, anything looking suspect isn’t worth considering.
42. Only 33% of travelers posted a travel-related review (WebsiteBuilder)
Many people love the joys of travel, but apparently, we don’t like posting about our trips. After returning to the grind, only 33% of travelers return to share a travel-related review on a site, restaurant, or experience they had while on the road.
There’s a huge opportunity here for travel businesses or those with heavy tourist traffic to collect customer information and follow up down the line. A boost in reviews can easily spell additional clients and increased revenue.
43. 84% of people trust online health reviews as much as a personal recommendation (Inc)
Word of mouth has primarily been the go-to for health-related services and information, but the trend appears to be changing. 84% of people now trust online health reviews just as much as a recommendation from a family member or colleague. This means people are just as willing to choose a doctor from internet listings as call up someone they trust for a suggestion.
Considering the impact of review ratings, businesses in the health industry would be wise to invest in tools designed to improve the overall customer experience.
44. 77% of patients use online reviews as the very first step in finding a doctor (WebsiteBuilder)
After trying to self-diagnose, people are now turning to online reviews as the first step in locating a doctor. Before checking with friends and family, 77% of people jump online to gather information about who has the highest marks in the area.
As we’ve learned earlier, individuals are especially cautious of any business below a 4-star rating. Whether you’re a clinical manager or a doctor, it’s imperative to give patients a reason to say good things about your practice.
45. 81% of females would not visit a restaurant with cleanliness issues in reviews (WebsiteBuilder)
Some say cleanliness is next to godliness, and female review seekers tend to agree. No matter your overall rating, 81% of women would avoid visiting a restaurant if your online reviews mention cleanliness issues.
One can only speculate how dirty a restaurant must be to deter potential customers. A single bad review may be enough for some, but more likely these female diners balk at patterns in reviews from multiple sources. It’s worth noting that these individuals won’t even bother entering your restaurant to see if the claims are actually valid.
46. 76% of individuals research a company online before considering a job opportunity (WebsiteBuilder)
Your online rating speaks to more than just potential customers. Over three-quarters of job seekers will go online and read about your business before applying. Without a doubt, this research will include customer experiences and what current and past employees have to say about your work environment.
Online review sites make it easy for anyone to voice their opinion, good or bad, about a job at your company. Since these go-getters are likely the people you want to hire, it’s important to ensure those reviews accurately reflect conditions at your company.
47. 60% of job seekers would not apply to a company with a one-star rating (WebsiteBuilder)
In line with the previous statistic, 60% of those looking for employment won’t even bother applying to a company with a one-star rating. Having bad review scores can affect your bottom line and your ability to keep or hire new staff to keep your business running.
48. Approximately 99% of restaurants are hidden when Yelp users sort by “Highest Rated” or “Most Reviewed” (WebsiteBuilder)
Yelp is one of the most highly used review sites on the web. With so many reviews, people often filter searches to hone in on precisely what they’re looking for. Unfortunately for a majority of businesses, using the “Highest Rated” or “Most Reviewed” filters hides over 99% of available options.
In a sea of restaurants, it’s a constant battle to stay high enough to be one of the lucky few. Even if you live in a small town, customers gravitate toward restaurants at the top of Yelp’s list and tend to ignore those down below.
49. 57% of consumers using social media in stores are reading online reviews (WebsiteBuilder)
Those customers wandering around your store with their phones out may not be giving you the cold shoulder. Approximately 57% of consumers on social media in-store are actually reading online reviews. They’re checking out what others have to say about your business and are interested in hearing about which products or services are creating the biggest buzz.
50. It takes 12 positive reviews to cancel out the nasty side effects of just one negative review (Online Reputation Management)
We don’t always deserve those negative reviews, but they are inevitable. The damage from just one can be long-lasting, depending on how quickly your business can settle the score. It takes 12 positive reviews to cancel out the impact of that one-star punch in the gut.
While your rating may recover quickly, customers want to see enough positive reviews to know you’ve addressed the problem at hand. Even if it was just a bad day, you need to show customers it’s a non-issue to restore trust. This means reading all your reviews, positive and negative, to hear the voice of your customers.
Promoting opportunities for clients to review your business will help those positive remarks to come in that much faster.
51. TripAdvisor had 26 million reviews submitted in 2020 alone (TripAdvisor)
In case you still doubt the power of online feedback, consider that TripAdvisor received 26 million reviews in the near 2020 alone. With many places in a complete shutdown, people weren’t even traveling that much then! Consumers are reading and writing reviews more than ever, and the role this plays in your bottom line is huge.
52. Accommodation reviews average 688 characters in length (TripAdvisor)
Travelers really go all out when it comes to the places they stay. The average accommodation review is a thorough 688 characters in length.
In truth, this number comes from TripAdvisor’s commitment to excellence. 100% of the site’s reviews must be in long form with a snippet and rating to meet high-quality standards.
53. Businesses replying to reviews at least 25% of the time have an average of 35% more revenue (Womply)
It really does pay to read and respond to reviews customers leave on the internet. Replying to even a quarter of the reviews you receive across various sites brings in on average 35% more revenue.
The moment consumers see you’re engaged, they become much more willing to spend time on your site or physical location. Of course, the way you present yourself speaks volumes about how would-be customers perceive your store.
54. 72% of consumers will take action only after reading a positive review (Invesp)
An overwhelming majority of consumers won’t give you the time of day until they’ve read a positive review about your business. While this may not seem like too challenging a feat, those individuals need to find reviews for your store among an ever-increasing pool of assessments on similar companies.
The more opportunities you provide clients to review you, the more positive findings exist for others to locate. Frequent reviews will also help keep you in the spotlight on all the big review sites.
55. A one-star increase on Yelp leads to a 5-9% boost in revenue on average (Invesp)
If your company’s star rating isn’t where you want it to be, take action to give that score a boost. Moving up one star on Yelp leads to revenue increases averaging 5%to 9%.
The best ways to improve your score are by addressing the most common customer concerns that bring in lower-than-ideal reviews. At the same time, stay connected with customers and encourage them to leave positive but honest feedback.
56. Star rating is the most important review factor (Brightlocal)
Your overall star rating still leads the way as the most important factor potential customers use in making judgments about your business. With the rise of fake reviews, legitimacy comes in as a close second. Rounding out the top three is how recent the reviews for your company are.
57. 73% of consumers say written reviews make more of an impression than star/number ratings (FanandFuel)
Customers still look at star ratings first when deciding which businesses to consider. Once you’ve passed that test, shoppers look to the written word for the final say.
What other customers have to say about your store resonates the loudest in the minds of most consumers. In fact, 73% feel that written reviews make more of an impression than your star rating.
58. 94% of consumers say a bad review has convinced them to avoid a business (Reviewtrackers)
Nearly all consumers have come across at least one review so bad that they decided to avoid the business entirely. Whether the review was right on the nose or completely from the left field, the effect can still be the same.
You don’t have to remain silent in the matter. As long as you remain tactful, you can (and should) address negative reviews with proof against the claim or a plan for resolving your issues.
59. Customers who have a bad experience are twice to three times more likely to write an angry review than customers who had a great experience are to post a happy review (Online Reputation Management)
We all have those days where one bad experience just sours all the good we experience before or after. When upset, we also tend to be looser with our tongues or fingers in the case of a scathing review. As a result, customers are doubly likely to write a bad review over a poor encounter than those having an amazing time.
For business owners, you need to go above and beyond to flesh out positive reviews from shoppers after these types of experiences. Not only will the positives help cancel out that one bad review, but customers also look for this exact type of feedback when deciding where to shop.
60. The Federal Trade Commission cited more than 700 businesses for deceptive endorsements in 2021 (FTC)
The FTC is as tired of fake reviews as we are and are cracking down on companies with detective advertising. Over 700 businesses last year alone received citations for misrepresenting an endorser in some way, shape, or form. The list includes many well-known companies now under careful watch and major financial penalties should they attempt to deceive customers again.
Bottom Line
Whether you’re a fan of online reviews or not, there’s no getting away from the impact they have on your business. Positive reviews have the power to bring in new customers and additional sales, whereas negative reviews can sink a business in no time flat.
As a business owner, it’s imperative to know what people are saying about your company. You can discover problems you didn’t know existed and show the voice of your customers matters. Employing methods to promote review generation from your shoppers is key for boosting ratings and staying ahead of the competition.
Due to the meteoric growth of the internet over the past decade, the needs of business owners have dramatically changed. However, the insurance industry has been slow to accommodate these rapidly changing needs.
This is where Next Insurance steps in. Next Insurance is an insurance company dedicated to selling business insurance online. The company aims to provide simple and affordable coverage to any small business owner.
Our in-depth review will determine if Next Insurance is the right fit for your business.
Founded in 2016, over 300,000 business owners use Next Insurance currently. Since Next Insurance focuses on providing tailored coverage, this insurance provider serves more than one thousand different types of businesses. You can purchase individual business insurance policies or bundles catered to certain industries, such as child care, construction, and fitness.
Simple and quick application process
Receive up to a 10% discount on bundled packages
Easy online accessibility and sharing capabilities
Specialized business insurance, such as key person insurance, isn’t available
May be confusing for business owners who only use paper records
Next Insurance Business Review: Overview
Next Insurance is designed to provide small business owners with affordable and tailored insurance policies. This insurance provider offers various types of insurance, including general liability insurance, business income insurance, and professional liability insurance. Best of all, you will receive a quote in no time after you finish the application.
Who Next Insurance is Best For
Next Insurance is best for small business owners that don’t need specialized insurance. For example, if your business requires a key person or builder’s risk insurance, we recommend looking at another insurance provider. Next Insurance is designed for more common types of insurance coverage.
In addition, Next Business Insurance is ideal for business owners who prefer an all-digital solution. You can submit insurance claims through Next Insurance’s online portal or a call center representative. Furthermore, you can view your certificate of insurance and add additional insureds online.
Next Insurance is also an excellent choice for business owners that require an insurance agent but want personal support. As such, Next Insurance offers advisers who will walk you through all your options.
Next Insurance Pricing
Next Insurance offers several types of insurance, but the exact price you pay for each depends on your specific circumstances. We recommend going to the Next Insurance website and requesting a quote if you’re interested in one particular policy. The application takes about 10 minutes to complete, and you receive your quote immediately.
However, here’s what each policy starts at:
General liability insurance: Starts at $11 per month or $128 annually
Workers’ compensation insurance: Starts at $12.20 per month or $146 annually
Professional liability insurance: Starts at $18.34 per month or $220 annually
Commercial property insurance: Starts at $17 per month or $205 annually
Commercial auto insurance: Starts at $12.50 per month or $150 annually
Errors and omissions insurance: Starts at $19 per month
Tools and equipment insurance: Starts at $12.50 per month
Next Insurance: Key Features
The next section covers each of the insurance policies Next Insurance offers. Although you can purchase policies online individually, you can bundle them together for up to a 10% off discount.
In addition, Next Insurance offers small businesses less inherent risk and cheaper insurance coverage. Keep this in mind as you continue reading the Next Business Insurance review.
Business Owner’s Policy (BOP)
Next Insurance’s business owner’s policy consolidates its general liability insurance, commercial property insurance, and business income insurance into one bundle.
Therefore a business owner’s policy is an excellent option for small business owners seeking:
A single all-inclusive insurance policy
Coverage for a physical business location, inventory, or equipment
Businesses dealing with customers directly
General Liability Insurance
Also known as business liability insurance, general liability insurance protects you and your business if you are ever responsible for paying an individual’s property damage, attorney fees, or medical expenses.
For example, this coverage protects you if someone falls and injures themselves at your store. However, general liability insurance is crucial for all businesses, even those without a physical retail location.
Next Insurance offers this coverage as part of its business owner’s policy, as seen above.
Workers’ Compensation Insurance
Next Insurance also provides workers’ compensation insurance. In the United States, every state except for Texas requires businesses with employees to have workers’ compensation insurance.
This coverage protects your business if an employee gets injured or sick while at work and sues your company. If this is the case, the individual must file a claim with your workers’ compensation insurance provider. Your workers’ comp covers lost wages, medical expenses, long-term disability, and other expenses incurred when an employee is injured at work.
Although each state has its own minimum coverage limits for workers’ compensation insurance, you can decide to purchase more than the minimum, especially if you’re in an industry predisposed to worker injuries, such as construction or manufacturing.
Commercial Property Insurance
Commercial property insurance, also known as business property insurance, protects your physical business location in the event of damages or losses. This protection covers furniture, equipment, inventory, landscaping, storage facilities, and fences.
Business property insurance is essential for most businesses, but it’s crucial for brick-and-mortar businesses. Even if you run a home-based or online business, you shouldn’t ignore property insurance. It can give you peace of mind knowing the risk of fire, storm, or theft is covered.
Next offers commercial property insurance in its business owner’s policy. However, you can purchase just the individual policy as well.
Professional Liability Insurance
Professional liability insurance protects you if a customer sues you for committing a service error or providing bad advice. If your company’s reputation is at stake, professional liability insurance can be essential.
Next Insurance tailors each professional liability policy to every individual business. This is important because different businesses pose different risks. For example, a gardener may be sued for damaging a customer’s lawn. On the other hand, a psychologist may be sued for using incorrect therapeutic methods.
While you fill out your application form on Next, you have a chance to describe your company in detail so that Next can offer you a customized policy.
Business Income Insurance
Offered in the BOP bundle or as a standalone policy, business income insurance protects your business’s cash and assets when your business is damaged by conditions that are out of your control. This policy can help your business pay for lost income, taxes, payroll, and other unexpected expenses.
Tools and Equipment Insurance
Tools and equipment insurance provides additional coverage for expensive or specialized equipment that can be difficult to replace. This type of policy can keep your business running when you need a quick repair or replacement.
Next Insurance offers this policy as an add-on to its general liability insurance.
Commercial Auto Insurance
Any business owner who drives a company or personal vehicle for business needs commercial auto insurance. This policy covers injuries to other individuals and property that occur while driving for business reasons. Your coverage may also cover the driver’s medical bills.
Furthermore, you can add hired and non-owned auto insurance to your commercial auto insurance policy if your company uses rented vehicles to conduct business.
Next Insurance’s most popular commercial auto insurance covers up to $100,000 of property damage or bodily injury per incident. However, Next offers policy limits of up to $1 million. This same policy also covers $100,000 for underinsured and uninsured motorist coverage as well as $5,000 for medical expenses.
Alternatives to Next Insurance
Before you make a decision, it’s essential to consider all the available options. This way, you can make the most informed decision possible and have peace of mind knowing you are getting the best deal.
So, here are three alternatives to Next Insurance worth taking a look at.
Hiscox is a reputable insurance provider that sells basic coverage, such as business owner’s policy and general liability insurance. While you can purchase Hiscox coverage online, you can also use independent insurance agents from Geico.
This insurance provider is an outstanding choice for professional services businesses, including consultants and accountants. However, Hiscox also offers packages for health, fitness, and beauty companies. Hiscox will refer you to partner websites if you need other types of coverage, such as workers’ comp insurance and commercial auto insurance.
What the product is
Who the product is best for
How it compares to the product being featured here
Pricing:
Hiscox’s general liability insurance typically costs $30 per month or fewer
Everything handled online
Up to a 5% discount when you bundle policies together
14-day money-back refund policy
Unavailable in Alaska
Doesn’t offer every type of coverage
BOP typically only offered to businesses with 10 employees or less
CoverWallet is a digital insurance broker that provides quotes to small business owners from a variety of different insurance companies. Therefore, CoverWallet doesn’t provide insurance policies itself.
This is an excellent choice for businesses that want affordable business insurance policies. CoverWallet can save you a lot of time by letting you compare costs from multiple insurance providers simultaneously.
Similar to what you learned in our Next Insurance review, CoverWallet also provides general liability insurance, workers’ compensation insurance, business property insurance, and professional liability insurance.
Pricing:
For most businesses, Coverwallet’s business owner’s policy starts at $49 per month. In addition, its general liability insurance starts at
Receive multiple quotes quickly
Wide variety of coverage policies
Everything handled online
You may be required to call to complete the quote process
Chubb is another excellent small business insurance provider that has been operating for over 30 years. This insurance company sells nearly every type of business insurance. Therefore, finding the exact coverage you need won’t be difficult.
Furthermore, we recommend Chubb for businesses earning less than $1 million in revenue per year. Chubb’s automated coverage assistant will help you find a business owner’s policy, general liability policy, professional liability policy, worker’s comp policy, and umbrella insurance online.
Pricing:
You must request a quote at Chubb’s website to determine the pricing for your particular business.
Suitable for small businesses
Comprehensive suite of coverage options
Excellent customer reviews
Some policies may not be available in certain states
Phone support only available if purchased directly from Chubb
Must request certificates of insurance through the online portal
Next Insurance Review – Frequently Asked Questions (FAQs)
We created this final section to clear up any confusion you may still have surrounding Next Insurance. So, here are a few common questions you may be asking yourself after reading our Next Insurance review.
Is Next Insurance legit?
Next Insurance is a reputable and legitimate company serving over 300,000 businesses. Furthermore, AM Best gave Next Insurance an A-Excellent score, which is the industry standard for rating insurance companies. Next has also been featured in several notable media outlets, including Forbes, Reuters, CNN, the Wall Street Journal, and CNBC.
Where is Next Insurance headquarters?
Next Insurance was founded in 2016 and is headquartered in Palo Alto, California.
Is Next Insurance a carrier?
Next Insurance is a licensed insurance carrier. As a licensed insurance carrier, Next Insurance writes its own policies, with a lot more freedom in terms of underwriting, pricing, and the configuring of policies.
Bottom Line on Next Insurance Review
Next Insurance focuses on providing affordable insurance policies for modern-day and traditional small businesses. As an online insurance provider, most of its policies are sold from start to finish on its website. Therefore, Next’s automated system will provide you with a quote as soon as you finish the quote request application.
The convenience and speed offered by Next Insurance are invaluable to the fast-moving and startup nature of small businesses.
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