How One Startup Plans to Replace Every Card in Your Wallet

Entrepreneur Kanish Parashar has an ambitious goal: He wants to replace every credit card, gift card and loyalty card in your wallet. To do that, Parashar has founded a company called Coin. Unlike other companies like Square and PayPal that are trying to do the same thing with mobile apps and proprietary services, Parashar plans to use something quite different -- something that looks like a credit card. Coin is a Bluetooth card that can be used in the place of the cards in your wallet. Any card with a magnetic strip can be added to Coin, and a button on the front allows you to easily swap between cards. With each button press, the magnetic strip on the card essentially becomes your card of choice, giving you the ability to carry around your whole wallet in just a single piece of plastic. A tiny LED screen displays the last four digits of the card you're using along with its expiration date. The final version on Coin will also allow you to give each card a four-character nickname such as "Bank" or "Work" to keep them straight. Parashar got the idea for Coin after another payment startup of his, Smartmarket, failed. Smartmarket was a mobile payment solution that used "geofencing" to allow customers to pay for goods when they were physically near a store. While Smartmarket got quite a few downloads, it wasn't actually being used for payments. "Turns out we had a chicken and the egg problem," says Parashar. "Customers couldn't find merchants who adopted it, and merchants didn't see customers use the app, so they didn't have a reason to adopt it." With Coin, Parashar hopes the process will be intuitive. "A card is something that we're used to using," he says. "We have a habit [of using a card], and we trust it." Cards are added to Coin using a mobile card reader that plugs into your phone's headphone jack. Once you create an account for the service, Coin verifies that each card you add belongs to you and creates a mobile version of the card within the app. You can carry around literally hundreds of cards at a time in the app, and eight cards can be added to the physical card at any given time. A digital leash on Coin helps keep it safe. If you and your card are separated an alert will show on your phone letting you know you might have left Coin behind. After you're separated for a while -- you can select a time between just a few minutes or several hours -- the card is locked down, preventing any further use until you're reunited. The battery in Coin should last two years, and the card isn't susceptible to issues like scratching and demagnetization that plague traditional credit cards. Coin is launching a crowdfunding campaign today to begin production of the card. Initial backers can purchase the card for $50, a 50 percent discount on its future retail price of $100. Coin is expected to ship in the summer of 2014.

How to Finance a Startup Today

You’ve got an awesome idea, a slick name in mind and the garage space to start your dream business -- but not the cash. I'm not surprised.
Financing a small business -- especially a startup -- is an uphill battle in a crowded field. In the U.S. alone, there are an estimated 27.5 million small businesses. And nearly 80 percent of them get their money through bank loans, credit cards and lines of credit.
It’s no secret that it is harder getting money through those avenues in the current financial climate. But just because it’s a bit of a fight, doesn’t mean your great idea isn’t worth fighting for. Here are some of the ways you can finance your startup, from standing in bank lines to going online:
Bank loans
Once thought of as a go-to option, national banks are still pinching pennies -- even after the Great Recession ceased.

The U.S. Small Business Administration released a report in July noting that lending to small businesses declined last year. Business loans of less than $100,000 dipped to $138.2 billion, from $139.5 billion in 2011. Even though conditions have improved in recent years compared with 2008 and 2009 (the height of the recession), business owners still find themselves facing roadblocks from banks that continue to restrict their lending.
Community banks and credit unions may serve as your next best bet. Since many community banks avoided the housing crisis, they’ll often have money to lend without the same standards as national banks. Local small businesses are finding success with community banks if they can convince lenders they’ll make a profit and pay back the loans.
You might also tap a credit union for available funding. As nonprofit organizations, credit unions may offer better lending terms for borrowers than commercial banks.

Credit cards
Having plastic has its benefits. The perks include immediate access to needed items, cash advances when you’re low on money and a way to track spending. When financing your business with credit cards, a major consideration should be whether you can pay off the balance monthly. Credit card companies know commercial loans are hard to come by and often jack up their rates -- sometimes upwards of 30 percent.
Government assistance
The SBA offers qualified financial assistance programs. While it doesn’t loan money directly, the SBA does set guidelines for loans made by third-party lenders (essentially a commercial loan with negotiated strings attached). Businesses that go this route must first prove they could not obtain financing at commercial banks with reasonable terms.
On the upside: SBA loans are usually structured with longer terms and lower down payments, and may come with lower interest rates. On the downside: SBA-backed loans tend to have a lot of stipulations -- often requiring lots of paperwork and time, as approval can take longer than loans from private lenders.

A Common Personal Finance Mistake New 'Treps Make

Starting a business affects your life in many ways outside of work, in particular the way you manage your personal finances. One of the biggest mistakes new entrepreneurs make is not keeping their personal and business finances separate.
"They move money back and forth and it is very important to keep their records separate," says Edward Wacks, a business financial advisor based in Plantation, Fla. This commingling of finances, Wacks says, can have some damaging implications for your business down the road.
For example, if you are paying business expenses with personal funds or vice versa, it becomes challenging from an accounting standpoint to know what your profits or revenues are for your business, says Wacks. That makes filing your business taxes a headache.
Also, without a clear division in your finances, your personal assets are less protected if your business is sued or you take out a business loan and can't pay it back.
"Many entrepreneurs are great salespeople, but they are not as good with the inside" of a business, the metaphorical financial guts of a company, says Wacks.
Here are three tips for protecting your personal finances as a business owner:
1. Keep separate bank accounts. Taking this one step to separate business from personal will make the biggest difference, especially at tax time when you document your business' profits and losses. While this might seem obvious, Wacks says this is a common mistake he has seen startups make.
2. Think like you have business partners, even if you don't. To prevent yourself from getting lax about keeping your finances separate, think as though you have business partners, says Wacks. You wouldn't expect your business partners to pay for your groceries or the recent fill-up at the gas station: that will have to come out of your personal piggy bank.
3. Don't mix credit card purchases. When it comes time to pull out the plastic, keep one credit card strictly for business expenses and a separate one for personal purchases. Otherwise, trying to parse the business charges from personal ones on your monthly statement after the fact can get confusing.