Money Management

Small businesses commonly rely on funding. Read on to see why lower loan approval rates are bad for small businesses. 

When large corporations need to raise money to fuel their own growth, they can issue stock or bonds to procure the capital they need. Because small businesses generally don’t have that option, they tend to be more reliant on loans to expand their services, product lines, and physical footprint.

But new data shows that banks have been hesitant to give out small business loans. And that’s problematic on several fronts.

Lenders are holding back

In the wake of the recent banking crisis, it’s not surprising that some banks are being more judicious with their lending practices. But data reveals that even before the banking industry started to melt down earlier this year, lenders were still being more conservative in the context of small business loans.

The Biz2Credit Small Business Lending Index released in February revealed that approval rates of small business loan requests at big banks had fallen for nine consecutive months. Larger banks approved only 14.2% of loan applications that February, down from 28.3% in February of 2020. And smaller banks approved just 20% of small business loan applications in February of 2023, compared to around 50% of applications in February 2020.

A problem for small businesses and communities alike

Lenders on a whole have been tightening their standards, and it’s not just small businesses that are feeling the impact. Consumers in search of personal loans, for example, might struggle to borrow in the coming months due to stricter lending practices.

But when small businesses fail to get the funding they need, they can’t grow. And if they can’t grow, they can’t create more jobs and hire new employees. That, in turn, has the potential to impact the broad economy.

On a more local level, though, if small businesses can’t expand, it has the potential to hurt communities and limit the extent to which they can thrive. Small businesses commonly give back to their communities in many ways, and it’s not just a matter of job creation. Rather, these businesses tend to support one another, sponsor local sports teams, and do other good things for the neighborhoods they serve. So all told, when banks stop lending, not only do small businesses suffer, but everyday people suffer.

Now a general tightening of credit is necessary to cool inflation, which has been a problem for the economy since the latter part of 2021. But if banks don’t ease up and small businesses continue to struggle to get loans, it has the potential to cause a real economic slowdown in time.

Furthermore, there have been continued rumblings about the U.S. economy entering a recession during the latter part of 2023. Unfortunately, that might result in even tighter lending practices, forcing many small businesses into standstill mode until things take a turn for the better.

Some small business owners may have the option to get the funding they need by tapping their home equity. But for many small operations, that route isn’t feasible or desirable. So right now, a lot of small businesses are, unfortunately, trapped in a holding pattern.

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The right brokerage account will offer a mix of investments that works for you. Read on for signs you’ve ended up with the wrong account for your needs. 

You need to invest money if you want to build wealth, rather than just leaving your money sitting in your savings or checking account where it earns minimal (if any) interest. But you need the right brokerage account if you want to make the best investments and maximize the chances of meeting your long-term financial goals.

Unfortunately, many people don’t give a lot of thought to their brokerage firm and could end up using the wrong one. You don’t want that to be you, so watch out for these red flags that suggest your broker isn’t serving you well.

1. You’re paying high fees

Most discount online brokers do not charge any commission fee, nor do they charge fees for things like allowing your account to drop below a certain balance or being inactive in your account. There’s no reason to use a discount broker that charges fees since there are plenty of options out there that don’t.

If you use a full-service brokerage firm that offers money management services, you’re very likely going to pay a fee. In fact, it’s not unheard of for full-service brokers to charge around 2.00%. This is a lot of money, and will cost you a fortune over the long haul.

Say, for example, you have $50,000 invested over 20 years and you earn a 10% average annual return. If you paid no fee, you’d have $336,381 after two decades. But if you paid a 2.00% fee, you’d be left with only $233,051.

In most cases, there is no reason at all to use a full service brokerage firm — especially as it’s pretty easy to build a portfolio yourself using exchange-traded funds (ETFs) or target date funds. Actively managed portfolios also rarely outperform the market. So, if you are being charged a lot for investment services, this is a huge red flag that you have the wrong broker.

2. You have a hard time researching investments

If you are interested in researching a particular type of investment, you will want to make sure your brokerage firm offers the tools you need.

For example, if you hope to primarily invest in ETFs, you’d want a brokerage account that offers a good screening tool to allow you to narrow down your options based on things like fees, asset class sector, and whether the fund is actively or passively managed.

If, on the other hand, you want to invest in individual stocks, then you might want to make sure your brokerage firm offers you the chance to do things like read earnings reports or review a chart of the company’s past performance.

If the broker you’ve chosen either doesn’t offer the tools you need or its trading platform is too complicated for you to use easily, you should switch to a different company. There are too many platforms out there for you to struggle.

3. You can’t invest in all the assets you want to buy

Finally, you’ll want to be sure your brokerage firm offers you the chance to invest in all of the different kinds of assets you are interested in. If you have researched a particular kind of investment and you discover you can’t buy it because your broker doesn’t offer access, this can be frustrating — and it can cause you to lose out on an opportunity to implement your trading strategy and hopefully make generous gains.

The bottom line is, you don’t have to deal with a broker that charges too much or makes trading difficult for you. If you spot any of these red flags, take the time to find an alternative that’s a better fit. When you can manage your money more effectively and more easily build wealth, you’ll be glad you made the effort.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. Christy Bieber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Target. The Motley Fool recommends Discover Financial Services. The Motley Fool has a disclosure policy.

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Many of the best deals at Costco are from its Kirkland Signature house brand. Here are a few great examples. 

In my house, we’re always looking for ways to save money on groceries without sacrificing the quality of our meals. So for us, one of the main personal finance appeals of Costco is the ability to get quality store-brand items at a good price.

At the same time, Costco’s deals are only deals if they’re for things we can use up before it goes bad. Here are some of the best deals under $20 worth picking up on your next Costco grocery run.

1. Kirkland Signature butter: $10.99 to $11.99

Whether you’re smearing it on bread or adding it to baked goods, the quality of your butter can make a big difference. Costco offers several varieties of Kirkland Signature butter, including organic and grass-fed options:

Grass fed: $10.99 for four 8 oz. packagesSalted butter quarters: $11.79 for four 1 lb. packagesUnsalted butter quarters: $11.79 for four 1 lb. packagesOrganic salted butter quarters: $11.99 for two 1 lb. packages

2. Kirkland Signature Colombian Supremo coffee: $19.99

A lot of coffee drinkers would rather pay more than drink bad coffee. Thankfully, the Costco house brand is known for its quality products — coffee included. A 3-pound package of the popular Colombian Supremo comes in just under $20. If you assume an average of 30 cups of coffee per pound, then you’re looking at 90 cups of coffee per package at about $0.22 per cup. Compare that to, say, a $3 cup at a coffee shop — or even a $1 cup at a fast food joint — and you can add a few hundred bucks a year to your bank account.

3. Kirkland Signature sharp cheddar cheese: $16.99

In my family, cheese goes on just about everything, so we go through it at a good clip. Costco’s Kirkland Signature shredded sharp cheddar cheese comes in 2.5-pound bags, and you can get two of them for $16.99. That’ll get you through a lot of taco nights.

4. Kirkland Signature frozen chicken tenderloins: $17.99

Boneless, skinless chicken tenders are a great choice for all kinds of dishes, from battered and fried to grilled and chucked in a salad. A 6-pound bag of Kirkland Signature frozen chicken tenders will cost you just $17.99, or around $3 a pound. They can even be cooked from frozen, with no need to thaw.

5. Kirkland Signature plant-based milks: $8.59 to $16.89

Despite the “controversy” about the milk moniker, plant-based milks are more popular than ever. Costco’s Kirkland Signature line has a few different kinds, all at a pretty good price:

Vanilla Soy: $16.89 for twelve 32 oz. cartonsOrganic oat: $11.99 for six 32 oz. cartonsUnsweetened almond: $12.99 for twelve 32 oz. cartonsOrganic unsweetened vanilla almond: $8.59 for six 32 oz. cartons

6. Kirkland Signature organic maple syrup: $12.99

Real maple syrup kicks that synthetic stuff’s rear end. But it’s a lot more expensive at the regular grocery store. Costco’s Kirkland Signature organic 100% Pure Grade A Amber Rich maple syrup can be found for just $12.99 per liter in store. While you’ll probably want to put this stuff on everything, you don’t have to hurry to get through it. Properly stored, maple syrup has a more or less indefinite shelf life.

7. Kirkland Signature honey: $15.99 to $16.99

Few things compare to quality honey on your biscuits or in your tea. The specific types of honey in your local club may vary, but in general, you can find:

Kirkland Signature Wild Flower Honey: $16.99 for one 5 lb. containerKirkland Signature organic raw honey: $15.99 for three 24 oz. bear-shaped containers

Even if you don’t go through honey very quickly, it’s worth a buy from Costco. It essentially never goes bad (when stored properly), so your honey will keep as long as it takes.

Don’t forget your rewards card

While Costco is already full of deals, you can boost your savings by making sure to grab your favorite rewards credit card. Just don’t forget that Costco only accepts Visa credit cards!

Writer’s Note: These prices were accurate for my local club at the time of writing, but prices may vary depending on your region or time of year. Some of these items may be available online for delivery, but Costco charges a significant upcharge — on top of the delivery fee — for online orders, so those prices will be much higher.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Brittney Myers has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale and Visa. The Motley Fool has a disclosure policy.

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Is your primary credit card serving your needs? Read on to see why a strong cash back program is key. 

One benefit of swiping a credit card when you visit the store is getting rewarded for the purchases you’re making. Not every credit card offers rewards like cash back on purchases. But if you’re not getting cash back from your primary credit card, you may want to apply for a new one.

A very popular option among consumers

Recent research from The Ascent found that cash back credit cards are the most popular type of credit card, and that 68% of consumers have one. If your current credit card isn’t giving you cash back on purchases, or is only giving you minimal cash back, then it may be time to swap your current go-to card for a new one.

It’s common for cash back credit cards to not only offer 1% back on most purchases, but bonus cash back in specific categories. You might, for example, find a credit card that offers 3% cash back on gas or 2% cash back on restaurant purchases. If those are categories you tend to spend a lot of money on, then you might get rewarded generously.

You might also be eligible for a sign-up bonus if you apply for a cash back credit card. Usually, you’ll get a lump sum of money for meeting a specific spending threshold within three months of opening your account. So if you commonly spend $1,000 a month on credit card purchases, it could pay to apply for a cash back credit card with a sign-up bonus of $250 for spending $3,000 on your card within 90 days of opening your account.

Choose your card wisely

You might manage to get bonus cash back from your credit card for certain purchases. But before you apply for one of these credit cards, assess your spending to see what bonus category is likely to benefit you the most.

One credit card might offer 3% cash back at the gas pump and 1% on all other purchases, while another might offer 3% back at the supermarket and 1% back on everything else. So if you’re torn between the two, comb through your credit card statements from the past six months and see which category you did more spending in.

Also, keep in mind that some bonus cash back categories come with a limit. You may, for example, find a credit card that gives you 3% cash back on gas, but only on up to $4,000 at the pump per year. So that setup may not be worth it for you.

Cash back credit cards effectively pay you for the things you were already planning to buy. And using them could make your bills much easier to manage, because for every dollar you spend, you’re getting a portion (albeit a small one) returned to you.

But it’s also important to choose the right cash back credit card when you’re looking to add a new card to your personal mix. That means studying how the card works and what criteria you need to meet to make the most of its credit card rewards program.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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My home sold quickly because I priced it correctly, decluttered, and staged it well for buyers. Find out why steps like these matter so much. 

According to the Federal Reserve Bank of St. Louis, the median days on the market for homes in the U.S. was 49 days in April 2023. That’s a lot longer than the number of days my house was for sale. In fact, I listed my house for sale and had a buyer in just nine days. This was a big relief for me because I wanted to sell before I bought a new house.

Since my home sold quickly, I now have the money in my bank account waiting for me to find the perfect next property to purchase. But how exactly did I sell my home so quickly so I can move onto getting a mortgage and buying a new house ASAP? Here are the steps I took.

I priced the property fairly

The first big thing I did to make sure that my home sold quickly was setting a reasonable price. Homes that are priced too high end up sitting on the market for a long time. And in the end, they often go for less because they miss the “new home” buzz when they aren’t priced right, and then the sellers have to drop the price, which can make buyers think a seller is desperate.

To make sure this didn’t happen to me, I kept a careful watch on what similar properties were selling for. I set up alerts on several home-sale websites to notify me when a property in my neighborhood was listed, and then I watched what it was priced at, how long it took to sell, and what price the owners ultimately got for the property. Using this information, I priced my home at the cost comparable properties had recently sold for.

I marketed the home effectively

Another important thing I did was marketing the home effectively. I made sure that I listed it on the Multiple Listing Service (MLS) since that’s how most buyers find homes. I had professional pictures taken, including of neighborhood amenities.

And I wrote an engaging description turning one of the home’s possible downsides into an upside. Since many of the other homes in my neighborhood were two-story houses that were a little larger while mine was a one-story home, I touted the benefits for “aging-in-place.” This turned a potential negative into a selling feature for some buyers.

I decluttered so the house could look its best

The third step I took was to declutter so that potential buyers could really see the features that the home has to offer. I have small children so I had tons of toys and things around. I ended up putting just about everything into storage so the house looked bigger and so buyers wouldn’t be distracted by the kid stuff that was everywhere.

I staged the home to give buyers an idea of how to use the space

Finally, the last step I took was staging the home to make the most of the space. The house had a somewhat awkward layout in the living room, so I created a “conversation area” to fill the space with a table and several chairs.

The buyers who bought our house were not even scheduled to come and see it, but their realtor came that morning and showed it to another couple. He said it was the best use of the space he’d ever seen in that model of a home, so he asked if he could bring his other clients through to get an idea of how they could use the layout. Those clients ended up being the buyers.

Taking these steps was simple enough, and it paid off big time since I no longer need to worry about when or if my house will sell. I can move on to the next chapter in my life sooner because I was able to find a buyer so fast.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
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A basic Costco membership is apt to suffice for many people. But read on to see when it might pay to upgrade to an executive membership. 

For many people, a basic Costco membership with a $60 price point more than gets the job done. A basic membership gives you access to warehouse club stores, member exclusives online, and a host of other perks.

But if you’re willing to spend $120 a year on a Costco membership rather than $60, you can upgrade from a basic membership to an executive membership and enjoy even more savings. With an executive membership, you get 2% back on all Costco purchases, including those you make online. And if you have a credit card that gives you cash back on your purchases and it’s accepted at Costco, you can double up on those rewards and get even more money back on your purchases.

You may be wondering when it’s a good time to upgrade your Costco membership. Here are a few signs you may be ready.

1. You’ve just moved from an apartment to a house

When you live in a relatively small home, it’s important to limit the bulk buying you do at Costco. Otherwise, you might end up feeling like you’re living among cases of food, and that’s not necessarily a great feeling.

But if you recently bought a house, or started renting one, and you now have more space than you did in your last home, then a Costco membership upgrade could make sense. You’re likely to buy more at Costco once your storage space increases. And that means your upgrade could easily pay for itself in cash back form.

2. Your kids are growing and eating more

When you have very young kids at home, they may not add to your grocery bills all that much. But as kids grow, they tend to eat more. So if your kids have reached the stage of adolescence where they’re pretty much insatiable, then it may be a good time to upgrade to a Costco executive membership. If you expect to be buying more food, you might as well rack up cash back on it.

3. You finally have a car of your own

Shopping at Costco when you don’t have a car can be a bit tortuous. After all, you might need to limit yourself to just a few items you can carry out with you, or otherwise get stuck with some very expensive Uber bills to shuttle your hauls home. But if you recently bought your own car, then that should give you the option to buy whatever you want at Costco (within reason, of course). And in that case, an executive membership upgrade could really pay off.

In a nutshell, an executive membership at Costco makes financial sense when you expect to spend more than $3,000 in a given year. That’s because 2% back on $3,000 in purchases is $60, which represents the cost of the upgrade. Having a larger home, growing kids, and a vehicle of your own could easily lead to more Costco purchases. So any of these things could be a reason to pay for an executive membership.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale and Uber Technologies. The Motley Fool has a disclosure policy.

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