Finance Archives

Small Businesses and the Credit Crisis in 2009

Friday, April 24th, 2009 at 00:59  
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The FSB (Federation of Small Businesses) released their New Year’s message indicating that the government’s strategy to face the credit crisis in 2009 should begin by helping smaller firms avoid having to face closure due to late payments, an expected decline in trade and increased difficulty in accessing financial help for the year to come. The message continues to say that the government should present a light legislative programme for 2009 and a Budget focused on “getting the economy running again”.

John Wright, Chairman of the FSB points out that small business represent over half of the private sector turnover and that the innovative, enterprising and flexible nature of these businesses will help see the UK out of recession in 2009 and into recovery. Consumers will also play an important role in the New Year and will be urged to Keep Trade Local, this also goes for government departments and local authorities who shouldn’t let their global thinking stop them from buying locally.

The FSB New Year’s message calls for an extension of the Small Business Finance scheme into a wider business loan guarantee, access to working capitals to help with cash flow problems and guaranteed overdraft facilities. John Wright also indicates that bank managers lacking experience in dealing with a recession must undergo training to reduce the risk of having to close their offices unnecessarily and points out that there are 10,500 branches in the UK that could be affected by this lack of preparation.

One of the main concerns for small business in 2009 will be that of late payment from their service consumers as this would affect their cash flow and, in turn, their ability to pay business credit card balances on time. This is why the FSB has released the Prompt Payment Code; its purpose is to provide policies related to the payment of “B2B” bills focusing mainly on 3 areas:

- Paying suppliers on time; following terms previously agreed by their contract, without changing payment terms retrospectively or on unreasonable grounds.

- Providing suppliers with clear guidance; giving suppliers easily accessible guidance on payment procedures and a system for dealing with complaints and disputes whilst also ensuring suppliers are promptly advised of reasons why an invoice wouldn’t be paid in time.

- Encouraging good practice; requesting main suppliers to implement the code of practice down their own supply chains.

With many high street retailers closing down, it’s important to take precautions to avoid a similar fate. Considering that some companies rely greatly on the capital buffer coming from their business credit card, it’s important to take some measures to ensure it can still be relied upon in 2009. To avoid jeopardising your credit or being hit by higher rates you can resort to online banking to pay your business credit card balance in time, no matter where you are, find a low or 0 percent interest credit card and consider transferring some of your existing balance into it. In general, avoid leaving balances unpaid as low rate credit cards may prove harder to come by in the New Year.



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Small Business Tax Deductions – Top 5

Sunday, April 19th, 2009 at 02:19  
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With tax season just around the corner it is never too early to start thinking about available tax deductions. Small business tax deductions are important to ensuring that you are getting all the return that is possible. Some tax deductions for small businesses are:

* Office furniture * Office equipment and supplies * Software and other subscriptions * Insurance premiums * Retirement contributions

In addition to these deductions there are a few other deductions that should be kept in mind while filing. Simply keeping good records throughout the year will help with these items and will make calculations at tax time less stressful.

Social Security

If you are self-employed or a small business you have to pay double the social security as you pay as both the employer and the employee. The good news is that you can claim back half on your 1040.

Home Office

If you have a room in your house that is used exclusively for your small business it may be used as a deduction. The room cannot be used for any other purposes to qualify. You can claim a percentage of rent or mortgage and utility bills based on the square footage of your office area in relationship to the square footage of the house.

Mileage

Keep a journal in your vehicle of all small business related travel and expenses. At the end of the year this can be claimed one of two ways. It can either be deducted as a straight calculation of mileage times the allocated rate plus other expenses or it can be completed as a percentage of the total mileage on the vehicle plus expenses.

Travel and Gifts

Hotel stays, travel on airlines or other forms of transportation and gifts are all deductible. Saving receipts is critical to be able to calculate this at tax time.

Children working for you

If you are the sole proprietor of your small business and you employ your own child under 17 that child can make up to $4,850 and avoid paying any taxes. You will not have to pay Social Security tax and you can write the salary off as a business expense. This same policy applies if you and your spouse are in partnership together and there are no other partners. It does not apply if you are a corporation.



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Commercial Finance Options for Small Businesses

Friday, April 10th, 2009 at 04:44  
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One of your biggest worries as a small business owner is how to secure capital to expand the business. Commercial finance is one of the many options available to people in your situation. This sort of financing is also called asset-based lending, since it involves some form of a secured business loan. The borrower guarantees repayment of the loan by pledging business assets as collateral.

There are several types of commercial finance options available to small businesses:

• Accounts receivable factoring

Businesses can “sell” unpaid invoices to banks at a discounted value for cash, which can be used right away for ongoing needs. There are many benefits to this financing option such as not having to give up a share in the business as with equity financing, and doing away with the risk and hassle of collecting payment from clients.

• Purchase order financing

This short term commercial finance option is popular because it enables building up of cash flow reserves. A growing business is likely to be strapped for cash while trying to meet its objective of manufacturing and selling products. At the same time, suppliers usually want to be paid upfront or are willing to extend only limited credit to new firms.

If the business has a few purchase orders on hand, it can solve this problem by seeking funds against the same. The financing agency pays suppliers directly for inputs that go into the production of that particular order.

• Asset based loans

This form of financing is used to test the robustness of a business and evaluate how it would perform given a long term loan. The business receiving the asset based loan has to prove within a limited period that given adequate financing its business model would be effective, and that a long term loan would sustain business growth over a period of time.

This form of financing is perfect for the business that can’t afford to wait to establish creditworthiness. Assets that can be offered as collateral against this type of loan include real estate, accounts receivables and finished goods.

Some other forms of commercial finance besides those described above include:

• Bankruptcy reorganization

• Secured lines of credit

• Trade financing

• Loans against inventory

Financing a business is a tough ask, but there are ways to do it, especially if your business idea looks sound. At the same time, it is critical that your business establish its creditworthiness in due course. Only with a good business credit rating is it possible to obtain large loans and other forms of capital. Work on building yours up so that your business is not one among the vast majority that has a loan application rejected



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Pursuing Government Grants For Your Small Business

Tuesday, March 31st, 2009 at 06:08  
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What is free government money? Here are a few facts about federal government grants. These grants truly are free government money. You do not have to repay this government grant money. You are not charged any interest on these government grant money. The grants are totally tax free money. You do not require any credit history or banking record to receive these grants.

All the facts above are very good reasons for ordinary people to pursue government grant money.

A commonly asked question is, are there really any government grant programs for the type of business I want to start, an online business?

The Answer, Yes, there are lot many government grant programs or free government money for all types of small businesses, including home based internet businesses.

But before we go into details about government grant programs or free government money for small business, let me caution you about some things.

The money is free but it is not free from government regulations and rules. The first thing you must know is that there is full monitoring and auditing of these government grants. You are expected to spend the money you request in particular manner and for the particular purpose that you applied for.

The grant money that was mutually agreed upon must be spent within a particular time frame. If you fail to follow the conditions set from the government, then there can be heavy penalties, sometimes leading to fines and maybe even your imprisonment. So make sure that the grant you are seeking for your small business is used for the specific purpose that you stated when you applied grant. And make sure the money is used within agreed upon time frame.

Another question that is very common is, how much money is really distributed by the US government for small business purposes?

The answer, can you believe that more than thirty billion dollars are given annually by the government to help small businesses? Yes It’s true.

The thirty billion dollars comes from more than eighty sources at the federal government level, all allocated for small businesses across America. There are also more than three thousand state level sources that sre the source of funding for almost any small business.

There are sub categories also. There are different government grant programs for women, for low income groups and for minorities. More than twelve millions is set aside for these sub category groups.

There can be two basic types of monetary help for small businesses. You can get start up capital to start the business. You can also get monetary help to expand your existing business. More than one million small businesses have received free government money on an annual basis.

What sort of businesses are covered under these government grants for small business programs? As I mentioned before, practically every type of industry, home base industry and so many others are covered under these programs. There are just to many to list in this short article. The research you perform will expose the exhausting list of qualified businesses available for these federal and state grants.

If your grant search is intensive and thorough enough you will have no problem finding a grant to fit your needs. When you do find one choose one that is suitable for your needs. Make sure that you qualify and are truly eligible for the grant. If you are persistent enough to get through all of the red tape and follow the application instructions as instructed you may be well on your way to benefitting from a free government grant for your small business.

I hope this article was of some use to you and good luck with your search for a federal or state government grant.



Wallpaper Union

Small-business Owners See Benefits of Banking Online

Monday, March 30th, 2009 at 03:23  
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Internet-based banks like NetBank are giving traditional banks some fierce competition as more small businesses make the shift to online banking.

“We are extremely pleased with the success of our small-business banking initiative,” said Douglas K. Freeman, chairman and chief executive officer of NetBank Inc. “More and more, small businesses are embracing the Internet and using it to do business better, faster, cheaper.”

Some of the ways in which NetBank makes it easy for small businesses to bank online include providing dedicated relationship managers to each of its clients; a dedicated customer care unit trained to handle the customer’s small-business needs; enhanced account administration features allowing multiple users with different access levels; and a remote deposit system that allows customers to deposit checks into their accounts without leaving the office.

“Small business banking is a natural extension of our services and it represents an excellent growth opportunity for us,” said Bert Davis, director of small business banking for NetBank. “We can provide tremendous value from both a customer service and pricing standpoint, and that’s not something a large number of small-business customers are finding today.”

In addition, NetBank has teamed with Wall Financial Services to provide Web-based accounts receivable lines of credit.

NetBank is also working with MBNA to issue no annual-fee credit cards with a credit line of up to $100,000, while forming a partnership with CompuPay to offer specialized payroll services for small businesses.

Indeed, banking online has streamlined virtually every banking task facing a small-business owner.

“Our own research shows that small-business owners across the country say the Internet is either somewhat important or very important to their business,” Freeman said.



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Why Small Businesses Fail- Financial Roadblocks to Watch for

Wednesday, March 4th, 2009 at 19:35  
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Small business origination doesn’t have to be a hassle. In our electronic day and age, the Internet has made small business origination loans almost instantaneous. There are several professional and high quality small business loan origination services available now that use the Internet to quickly find affordable financial assistance to beginning small business owners.

 

Why Small Businesses Fail

A novel could be written about the reasons why small businesses fail. One of the major reasons is from miscommunication between owners, or owner and investor. Take a new restaurant for example: A passionate chef and a wary investor will most likely butt heads when it comes to what makes the most financial sense to each one. And there is guaranteed to be some disagreement along with what each believes to be money well spent verses too much.

 

Undercapitalization

According to business researchers, the general rule of thumb for beginning small businesses needing a loan is “to have a sum of money at least equal to the projected revenue for the first year of business in addition to anticipated expenses.” For example, if the restaurant owner believes he or she will make $200,000 in revenue for the first year, with $250,000 in building and starting up expenses, than they should have no less than 350,000 available. Otherwise, the restaurant owner could be faced with huge amounts of debt or bankruptcy.

 

Poor Planning

Without an accountant, advisor or proper funding, small businesses can aim high but end up falling short and blow their opportunity to do it right and become successful. The first step they can take is to get the assistance from a small business origination service that help small business owners reach their financial goals and give them the assistance they need to be successful in all areas of their business.

For small businesses looking for the perfect credit services, there are plenty of professional organizations who specialize in giving small businesses quality, affordable loans.&nbsp



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Tips To Obtain Small Business Loans

Sunday, December 14th, 2008 at 07:11  
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MIKE SELVON asked:


If you are interested in starting a small business, then you have to know about small business loans. There are many different ways to get funding for your new enterprise, as well as many different kinds of loans. Finding the one that is best for your enterprise can be a daunting task, but with the right information, it is not impossible.

Most banks do not want to loan money to someone who is starting a new enterprise. When trying to get a loan for a small business, collateral will probably be needed for the bank to approve the loan. Things such as cars, houses, land, or other hard assets will usually work for collateral. The bank will probably want to have an asset-backed borrowing transaction with business owners, rather than loaning money to a business based on inventory or other such methods.

Having a co-signer is also an option for getting a loan from the bank, but make sure you trust the co-signer before trying this method. There is also another place that a loan can be borrowed from, which is the Small Business Administration.

This is a government agency that invests in new, small businesses. In many cases, if a loan is borrowed from the SBA, then the SBA will pay back 90% of the loan if you default on it. Another place to try for a loan is through commercial finance companies or venture capitalists.

When applying for small business loans, there are certain procedures that must be followed to increase the business owners’ chances of actually getting a loan. Every place you approach with the hope that they will finance your new enterprise will look at your financial projections, credit history and your character.

If there is a personality conflict between you and the lender, then you probably will not get the loan. However, it is a good idea to try several different places until you find someone who gets along with you, so that you can get a small business loan.

There are also little quirky things that can be done to make a better impression on loan officers. Dressing professionally, keeping a professional manner, and calling ahead of time for an appointment are usually necessary to get loans for small businesses.

There are some other things that might increase your chances of getting a loan as well, such as being able to answer any questions about your business plan. Being over prepared is better than being under prepared.

Hopefully, you now have a little more information about small business loans and how to get one. If you are trying to open a new business, then look at all the information out there and maybe consider talking to a loan officer about your business plan before applying for a loan. He or she can give you some sound business advice.



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Three Things to Look for in a Small Business Business Credit Card

Friday, November 7th, 2008 at 02:30  
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small business
Max Anderson asked:


Anyone who has ever carried a small business business credit card can tell you that not all small business credit cards are created equal. Selecting the wrong one can cost your company money and can cheat your business out of many small business credit card perks. Because the bottom line is everything when it comes to a small business success, there are some things you need to look for before applying for any line of business credit. Here are three critical factors to consider when applying for a small business business credit card.

1. Do They Understand Small Businesses?

I’ve already said that not all credit cards are created equal. The same can be said for businesses in general. Your small business has unique needs. You need a credit card company that understands this.

When applying for a business credit card, make sure it’s geared towards small business. It’s great if XYZ MasterCard offers individualized billing for employee cardholders and has a department to help arrange employee travel, but you’d probably be better off with a small business business credit card that offers cash-back rewards or discounts on office supplies. A card geared towards small businesses will understand this.

2. Interest Matters

In an ideal world you’d pay your small business business credit card off in full each month and would never pay a penny in interest. Unfortunately, we don’t live in an ideal world. There will be times when unexpected expenses arise and they might not be paid off in full at the end of the month. Because of this, you need to look for a card that offers a low interest rate in addition to small business perks.

3. Add Up the Rewards

Once you’ve narrowed your credit card selection down to companies that understand small business needs and companies that offer a low interest rate, it’s time to start calculating the rewards.

The small business business credit card industry has gotten quite competitive over the years. Because of this, there are generous rewards programs in place. This can mean great perks for your small business. Look for cards that offer concierge services, travel insurance, emergency cash and card replacements and, of course, rebates and cash-back bonuses.

Finding the best credit card for your small business will take time and effort, but when you’re business is equipped with the best small business business credit card and is benefiting from the rewards, it will all be worth it.



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Small Business Loans: Get Initial Fund for your Business

Friday, October 31st, 2008 at 14:52  
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small business
barry jones asked:


Being a small business owner, you need to pay extra attention to management of financial resources. Since growth of your business somehow depends on its financial position, you should always be cautious about cash flaw within or outside your business. It is quite true that lack of finance can become a big problem in the way of the success of your small business. Since a sapling business face different kind of financial problems, any ordinary loan cannot meet these requirements. For that reason, the borrower needs to find out such a solution that may help small business owners in meeting different requirements of their small businesses. Small business loans are one of those business loans that are specially tailored to meet requirements of a sapling business organization. These loans can meet each and every financial requirement of a going business and can help that business in growing with a faster pace. Since market is crowded with various business loan schemes, every small business owner can manage to get the desired amount without any problem. Therefore if you own a new and small business organization and financial shortfall is bothering you, then these loans can prove to be the best help for you.

These small business loans are simple to get but for getting these loans, should have an approved business plan. This business plan must be working and should be approved from the national corporate body. For getting these loans, the borrower also need to estimate how much finance he or she will require for running his or her small business smoothly. Application for small business loans include purpose, amount and type of loan therefore, if you are looking for any such business loan, then evaluate these terms to get a suitable loan.

Usually, Small business loans are pledged against any high valued collateral but if in any case you are able to keep any asset as collateral against the loan amount, going for unsecured loans are the best option. However, a business loan requires good credit score for getting approval but if you are a bad credit borrower, then also you can arrange the desired cash with bad credit loans for small business. Usually, a typical business loan requires a written loan proposal and personal and financial details of the borrower. Since processing of these details consumes a lot of time, a business owner can go for online business loans.

In fact, online processing system helps the business owner in saving his or her precious time and allows him or her to redeem loan with a faster pace. With small business loans, the borrower needs to follow a monthly schedule of repayment; however, this schedule can be chosen as per his or her monthly business revenue flow. This facility helps the business owner in achieving his or monthly target without bothering for arrangement of funds and supports the business to grow with faster pace. Therefore if your business is suffering due to the unavailability of funds, then these loans can prove to be the help for you and your business.



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Small Business Grants – Business Grants – Government Grants for Small Business

Friday, October 24th, 2008 at 10:34  
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M Lesko asked:


Why Will the Government Offer Grants for Small Business?

Are you an entrepreneur that needs a business or small business grant? Are you motivated and skilled enough to begin your own small business? Do you need free money to start a small business but haven’t got a clue as to where to start? Look no further; there’s hope for your small business. As an enticement to small business owners, the government earmarks several million dollars in government grant money to assist small and personal businesses to flourish. There are millions that are unclaimed each year resulting from the lack of knowledge in regard to government grants. Thanks to Matthew Lesko, more knowledge has gotten out about how to get free government grants for small businesses, paying bills, college, etc. Matthew Lesko has written several books that educate individuals exactly like you on the way to receive a small business grant from the U.S. government. An average person may feel a little skeptical of any opportunity to get free money and may ask at least some of these questions: Is there really a catch to getting a small business grant? What exactly does the government get out of making an investment in small businesses? What can I do in order to obtain more general information and tips about small business grants?

It has been said that about 50% of all small businesses don’t make it beyond their first year. Why don’t small businesses succeed? Not enough funding and a lack of experience are a couple of the more customary reasons that small businesses aren’t going to make it beyond their first year. Why does the government give out small business grants to help entrepreneurs with startup costs if there is so much failure in small businesses? Why exactly does the government have such a high interest in small businesses? Small businesses likely represent ninety five percent of all employers in the United States. In addition, they contribute 50 percent of the gross domestic product of the country. Grants for small businesses are offered to business owners to promote economic improvement or growth. Three of four new American jobs are offered by small businesses.

The United States government doesn’t actually give out federal grant money to begin a small business. The Small Business Administration (SBA) is a Federal government agency that supports, protects the interests of, advocates, and provides resources small business concerns. The federal government has left it up to each individual state to appropriate funding by way of state grants to assist small businesses to thrive and grow. Small businesses are critical to the economic security of the U.S.. Keeping this in mind, the SBA has a mission to put money and time into helping entrepreneurs so they can start, grow, and develop their small businesses. Giving a support system to new businesses by awarding a small business grant is a small gesture when the economic development of the United States plays a role.

If you’re an entrepreneur, the U.S. government has small business grants so they can help your business to succeed. If you would like help finding more information about these small business grants, it would be a benefit to hear what Matthew Lesko has got to say about free money that might be available that could help your business to grow. His research shows that more than 1 million business owners receive small business grants each and every year. Grants like these may be available by way of the local government of your specific state. Keep in mind, that through assisting small businesses to develop and grow, the United States economy is going to grow and flourish as well. Small business grants are an incentive to business owners and to the economy of the nation as a whole. The more small businesses that are started, the more employment will also be created. In order to secure the advancement of small businesses, the government can help by providing small business grants as well as other resources that are necessary for small businesses to flourish.

About the Author: Find out about the best ways to get Small Business Grants! Matthew Lesko.com will show you ways to get available funding, regardless of your business’ income amount, credit rating or age! Look at this web site for a completely free preview: http://www.MatthewLesko.com now! For more information and tips about Small Business Grants, click here.



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