Business Loans

If you’re a small business owner then you probably have on going concerns about coming up short when you need to make a purchase for your business. This is not an uncommon feeling among business owners. So if you find yourself worrying about that, you may want to consider getting some type of financing to help ease your cash flow concerns. I’m not saying you need to take out a loan. However, you may want to look into lines of credit for your business.

Depending on your small businesses credit rating, you may find that getting financing above a business credit card for your business can be challenging. Also you’ll see for any type of consideration at all, that lenders may require you to back a loan with your personal assets. If you don’t want to put up your personal assets as collateral then an unsecured business line of credit may be the answer.

What’s an unsecured business line of credit you ask? It’s basically a loan that allows a business to get without you having to guarantee it. However, the payment terms can be stringent and you may be looking at a higher than normal interest rate. These loan products are challenging for a small business to obtain. Plus most lenders require your business to have a great credit score. Your businesses credit score report is an important document because lenders use it to while looking over your loan application.

When you get approved, unsecured lines of credit (if used correctly) can actually help you manage your company’s cash flow. It comes in handy for making purchases when you do not have access to cash. You benefit here because there is no delay with your clients projects. In addition, unsecured business lines of credit can be a tool for company growth and expansion.

However, before you sign off on this or any loan, make sure to check the payment terms and interest rates being offered. Be realistic because you do not want to accumulate debt you cannot handle.

You’ll be building your business credit further with each payment you make, so make you’re your payments are on time. The payoff here is you’ll improve your chances for your business to obtain the same kind of loan again. However, you may be approved with a better interest rate and a higher credit limit. Your business benefits because you’ll have more opportunity to expand with an unsecured business line of credit.

Author: John Purfield
Article Source: EzineArticles.com
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In order to give a boost to the spirit of entrepreneurship of its citizens, the federal government provides business loans to individuals to help them start a small business. The governments Small Business Administration (SBA) handles these loans usually by acting as a guarantor for loans provided by other institutions. In rare cases, the loan is provided directly by the SBA.

Besides the SBA, there are other government agencies that have programs of their own that provide loans and grants to small businesses. In order to get these loans, a small business owner or entrepreneur has to submit a proposal showcasing the blueprint of the business plan and the specific capabilities that he or she possesses to run the business effectively.

The small business owner applying for the loan needs a positive credit score in order for the loan to be approved. These credit factors are reviewed and analyzed by the authorities before a decision is made to extend the loan.

There are several categories of loans programs provided by the SBA. One of these is the Basic Loan Guaranty program, which aims to help small businesses who may not be normally eligible to receive loans from lending institutions. These loans are provided by commercial lending institutions with the SBA acting as guarantor.

The Certified Development Company (CDC) Loan Program aims to assist those seeking to own real estate or machinery for expansion or modernization. This program provides a long term loan at a fixed-rate of interest. Usually, ten percent of the loan amount needs to be contributed by the small business owner in the form of equity.

The micro loan program aims to provide short-term loans with a maximum limit of $35,000 primarily for working capital and inventory requirements. These funds cannot be used to pay off existing debt. This loan is also available for non-profit childcare centers. The loan prequalification program permits those seeking loans of amounts less than $250,000 to have their application analyzed and potentially sanctioned by the SBA before lenders are approached for consideration.

Government small business loans play a vital role in fostering the spirit of entrepreneurship and should be looked on as an important means of funding for those looking to start their own business.

Author: Peter Emerson
Article Source: EzineArticles.com
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For any successful small business obtaining capital at a reasonable rate is as important as getting business or customers. Many businesses are stymied at some or other point of time in their operation for want of money. Just having a brilliant idea or business plan might not work out once we come and start the operations on the ground.

A small business might require finance at two stages

a) At the start up stage

b) Working capital requirement while being operational

Many a time while drawing the business plan finance requirement is underestimated which the owner realizes only once he/she is midway through it. It is also possible that because of the sudden increase in the prices of the inputs in the product/service you want more finance than forecasted.

Then there is a second kind of finance requirement which is for the working capital. For example you manufacture some goods which are sent to distributors and the distributors are delaying your payments for some reason. In this scenario you need cash to keep your venture up and running.

So what are the possible sources of finance?

Personal savings and credit card: This is often the first source of finance that a small business owner looks at while starting a business. But personal savings are often limited and they may not be able to fund the dreams of the business owner completely. Some business owners may also look at credit cards when funds from other sources are expected to arrive soon. In this case the interest rate of the credit card should be kept in mind.

Friends, family members and other relatives: Funds obtained from friends are often interest free or at a lower interest rate with a flexible repayment facility. But the funds are often limited and beyond a point you may not get the required amount.

Venture capital (VC) funding/ Angel investors: VC funding often comes for a larger loan need and small business owners might not be able to tap this loan source. Small business owners may tap this loan source at a later point of time when their business grows and attains a critical size. VCs often invest in exchange for equity in the company. Even the angel investors might not want to fund a small business need unless the idea is a brilliant one.

Banks: If you have a good business plan then banks may be ready to fund you.
Out of all this different finance sources the loan option serves to get you a larger amount with a good repayment schedule.

So what should you do for a successful loan request processing?

You should prepare well before going to a bank for a loan. Research well and find out your exact loan need. The bank would see how you arrive at the loan figure that you are asking from the bank. You should also be clear with how much money you need, when you need it and how you are going to pay it back. Your credit profile would play a crucial role in such a decision.

What are the loan options you have?

Loan can be either a secured or unsecured one. A secured loan would enable you to get a larger loan amount at a lower interest rate and with a better repayment schedule. An unsecured loan on the other hand does not require any collateral but the interest rates are on the higher side.

Do you have an option in case of a poor credit history?

Financial institutions have designed special loan products for people with a poor credit history so its not the end of the world if you have a poor credit history. You should research well to find the lenders and loan products offered by them for people with a poor credit history.

A last word..
The business owners should provide the lending institution with proofs of revenue sources and customers to assure them of the cash flow. The proofs of cash flow help the lending institution in making a lending decision. Solid proofs will ensure a decision in your favour. The bank would then do its own research to find how creditworthy you are.

For an existing business its easier to get a loan if it has a proven track record.
Remember if you do your homework properly getting a small business loan would be a cake walk.

Author: Steve C Clark
Article Source: EzineArticles.com
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As we continue to sift dutifully through the over 1,000 pages of the stimulus bill (American Recovery and Reinvestment Act of 2009), there is one provision that is not getting much attention, but could be very helpful to small businesses. If you are a small business and have received an SBA loan from your local banker, but are having trouble making payments, you can get a “stabilization loan”. That’s right; finally some bailout money goes into the hands of the small business owner, instead of going down the proverbial deep hole of the stock market or large banks. But don’t get too excited. It is limited to very specific instances and is not available for vast majority of business owners.

There are some news articles that boldly claim the SBA will now provide relief if you have an existing business loan and are having trouble making the payments. This is not a true statement and needs to be clarified. As seen in more detail in this article, this is wrong because it applies to troubled loans made in the future, not existing ones.

Here is how it works. Assume you were one of the lucky few that find a bank to make a SBA loan. You proceed on your merry way but run into tough economic times and find it hard to repay. Remember these are not conventional loans but loans from an SBA licensed lender that are guaranteed for default by the U.S. government through the SBA (depending upon the loan, between 50% and 90%). Under the new stimulus bill, the SBA might come to your rescue. You will be able to get a new loan which will pay-off the existing balance on extremely favorable terms, buying more time to revitalize your business and get back in the saddle. Sound too good to be true? Well, you be the judge. Here are some of the features:

1. Does not apply to SBA loans taken out before the stimulus bill. As to non-SBA loans, they can be before or after the bill’s enactment.

2. Does it apply to SBA guaranteed loans or non-SBA conventional loans as well? We don’t know for sure. This statute simply says it applies to a “small business concern that meets the eligibility standards and section 7(a) of the Small Business Act” (Section 506 (c) of the new Act). That contains pages and pages of requirements which could apply to both types of loans. Based on some of the preliminary reports from the SBA, it appears it applies to both SBA and non-SBA loans.

3. These monies are subject to availability in the funding of Congress. Some think the way we are going with our Federal bailout, we are going be out of money before the economy we are trying to save.

4. You don’t get these monies unless you are a viable business. Boy, you can drive a truck through that phrase. Our friends at the SBA will determine if you are “viable” (imagine how inferior you will be when you have to tell your friends your business was determined by the Federal government to be “non-viable” and on life support).

5. You have to be suffering “immediate financial hardship”. So much for holding out making payments because you’d rather use the money for other expansion needs. How many months you have to be delinquent, or how close your foot is to the banana peel of complete business failure, is anyone’s guess.

6. It is not certain, and commentators disagree, as to whether the Federal government through the SBA will make the loan from taxpayers’ dollars or by private SBA licensed banks. In my opinion it is the latter. It carries a 100% SBA guarantee and I would make no sense if the government itself was making the loan.

7. The loan cannot exceed $35,000. Presumably the new loan will be “taking out” or refinancing the entire balance on the old one. So if you had a $100,000 loan that you have been paying on time for several years but now have a balance of $35,000 and are in trouble, boy do we have a program for you. Or you might have a smaller $15,000 loan and after a short time need help. The law does not say you have to wait any particular period of time so I guess you could be in default after the first couple of months.

8. You can use it to make up no more than six months of monthly delinquencies.

9. The loan will be for a maximum term of five years.

10. The borrower will pay absolutely no interest for the duration of the loan. Interest can be charged, but it will be subsidized by the Federal government.

11. Here’s the great part. If you get one of these loans, you don’t have to make any payments for the first year.

12. There are absolutely no upfront fees allowed. Getting such a loan is 100% free (of course you have to pay principal and interest after the one year moratorium).

13. The SBA will decide whether or not collateral is required. In other words, if you have to put liens on your property or residence. My guess is they will lax as to this requirement.

14. You can get these loans until September 30, 2010.

15. Because this is emergency legislation, within 15 days after signing the bill, the SBA has to come up with regulations.

Here is a summary of the actual legislative language if you are having trouble getting to sleep:

SEC. 506. BUSINESS STABILIZATION PROGRAM. (a) IN GENERAL- Subject to the availability of appropriations, the Administrator of the Small Business Administration shall carry out a program to provide loans on a deferred basis to viable (as such term is determined pursuant to regulation by the Administrator of the Small Business Administration) small business concerns that have a qualifying small business loan and are experiencing immediate financial hardship.

(b) ELIGIBLE BORROWER- A small business concern as defined under section 3 of the Small Business Act (15 U.S.C. 632).

(c) QUALIFYING SMALL BUSINESS LOAN- A loan made to a small business concern that meets the eligibility standards in section 7(a) of the Small Business Act (15 U.S.C. 636(a)) but shall not include loans guarantees (or loan guarantee commitments made) by the Administrator prior to the date of enactment of this Act.

(d) LOAN SIZE- Loans guaranteed under this section may not exceed $35,000.

(e) PURPOSE- Loans guaranteed under this program shall be used to make periodic payment of principal and interest, either in full or in part, on an existing qualifying small business loan for a period of time not to exceed 6 months.

(f) LOAN TERMS- Loans made under this section shall:

(1) carry a 100 percent guaranty; and

(2) have interest fully subsidized for the period of repayment.

(g) REPAYMENT- Repayment for loans made under this section shall–

(1) be amortized over a period of time not to exceed 5 years; and

(2) not begin until 12 months after the final disbursement of funds is made.

(h) COLLATERAL- The Administrator of the Small Business Administration may accept any available collateral, including subordinated liens, to secure loans made under this section.

(i) FEES- The Administrator of the Small Business Administration is prohibited from charging any processing fees, origination fees, application fees, points, brokerage fees, bonus points, prepayment penalties, and other fees that could be charged to a loan applicant for loans under this section.

(j) SUNSET- The Administrator of the Small Business Administration shall not issue loan guarantees under this section after September 30, 2010.

(k) EMERGENCY RULEMAKING AUTHORITY- The Administrator of the Small Business Administration shall issue regulations under this section within 15 days after the date of enactment of this section. The notice requirements of section 553(b) of title 5, United States Code shall not apply to the promulgation of such regulations.

The real question is whether a private bank will loan under this program. Unfortunately, few will do so because the statute very clearly states that no fees whatsoever can be charged, and how can a bank make any money if they loan under those circumstances. Sure, they might make money in the secondary market, but that is dried up, so they basically are asked to make a loan out of the goodness of their heart. On a other hand, it carries a first ever 100% government guarantee so the bank’s know they will be receiving interest and will have no possibility of losing a single dime. Maybe this will work after all.

But there is something else that would be of interest to a bank. In a way, this is a form of Federal bailout going directly to small community banks. They have on their books loans that are in default and they could easily jump at the chance of being able to bail them out with this program. Especially if they had not been the recipients of the first TARP monies. Contrary to public sentiment, most of them did not receive any money. But again, this might not apply to that community bank. Since they typically package and sell their loans within three to six months, it probably wouldn’t even be in default at that point. It would be in the hands of the secondary market investor.

So is this good or bad for small businesses? Frankly, it’s good to see that some bailout money is working its way toward small businesses, but most of them would rather have a loan in the first place, as opposed help when in default. Unfortunately, this will have a limited application.

Wouldn’t it be better if we simply expanded our small business programs so more businesses could get loans? How about the SBA creating a secondary market for small business loans? I have a novel idea: for the moment forget about defaults, and concentrate on making business loans available to start-ups or existing businesses wanting to expand.

How about having a program that can pay off high interest credit card balances? There is hardly a business out there that has not been financing themselves lately through credit cards, simply because banks are not making loans. It is not unusual for people to have $50,000 plus on their credit cards, just to stay afloat. Talk about saving high interest. You can imagine how much cash flow this would give a small business.

We should applaud Congress for doing their best under short notice to come up with this plan. Sure this is a form of welcome bailout for small businesses, but I believe it misses the mark as to the majority of the 27 million business owners that are simply looking for a loan they can repay, as opposed to a handout.

Author: Sue B. Malone
Article Source: EzineArticles.com
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I am losing faith.

I thought the SBA mission was all about supporting the small business owner. I am beginning to think otherwise. Recent experiences have indicated that they are on their own alternative mission and have forgotten their purpose. It looks like they have lost their way. How unfortunate! It is a huge change in policy if this is what I am seeing. I hope it’s just a few runaway renegade SBA decision makers. I am worried as no decisions are being made by committees to prevent such abnormal variances. It seems I am seeing this alternative mission too often to ignore.

The current issue is this seemingly standard response, “We will wait a few years and see how you fare then and will make demands down the line. If you have somehow recovered, you may be worth more then. We will reject your Offer to Compromise now and wait. Let’s see what happens in a few years.”

This is not the mission of the SBA. Their own program, the Offer in Compromise program, is intended to determine the “present net liquidated worth of the borrower and that is the determining factor of what is an acceptable Offer in Compromise.”

How does “net present liquidated worth” compute to “…we will wait a few years and see what happens. We think you may be worth more down the line so we will leave the liens on and get back to you in the future, we can wait you out”. So in the end, the SBA is more aggressive and more willing to see the destruction of the borrower than the worst bank. In fact the banks would not be allowed to do this by the FDIC. Upon review, the bank would be required to liquidate the assets or workout the debt directly. They would not be allowed to simply wait and see what will happen a few years down the road.

So, the small business owner cannot refinance his home or even sell it, cannot borrow again, and cannot do anything because the liens remain on himself and his home. Is this an Offer in Compromise program? No, it’s a retribution and punishment program.

Let’s see the score card. Recently, a retired school teacher wiped out by Katrina was totally refused an Offer in Compromise with a full demand for repayment despite the impossibility of such. What’s with the SBA? Are they now trying to eliminate the small business owner? Certainly sounds like it. What’s going on up there? Is this the way we support small business owners? I don’t think so.

Fortunately for our clients, we fight this regressive attitude and with diligence, perseverance, tenacity and vision we overcome this bad behavior. But what about those we do not represent? What will happen to them? Apparently when you pay for the SBA guaranty, it is intended to help the banks, not you the small business owner.

Contact us if you’re stuck and we will arrange for a no-obligation teleconference to discuss your issues and provide strategies that will work.

Author: Don Todrin
Article Source: EzineArticles.com
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Imagine for a moment, you are transported to the North Pole. Your gaze is set on a roly-poly businessman manufacturing toys for Christmas. He has a white beard, and guess what? It is Santa Claus, himself! You see glimpse of his forehead beading with drops of perspiration as he pours over his financial statements. It is the heat of June, and business is not so good. To to top it off, he took a real hit this year with broken down equipment. His super-duper toy making machine, dubbed The Elves, died unexpectedly on him. Repair is totally out of the question. Santas Christmas plans for the world are in danger. Then Santa gets a perfect idea! Borrow money to get back in business! What is the solution? He needs an unsecured business line of credit. Santa gets connected with a professional financial consulting firm he found online. Santa is back on track. Christmas is saved!

The story you just heard may sound a little corny, but it could very well be your small business. Businesses can definitely go through some tough times financially. You maybe asking right now, So, what exactly is a unsecured business line of credit? Simply put, an unsecured business line of credit is like a loan, but does not require collateral. It is based on your personal credit and can be used at any time. The finances can be held in reserve and used at any time that it is needed. An unsecured business line of credit provides a buffer zone of sorts for the small business owner.

Lets face it, unexpected slowdown in cash flow can, and will, affect your business profitability. An unsecured business line of credit will level the playing field. In fact, many businesses are very seasonal, and cash flow can drop dramatically. Dont let this stop your business from growing, be prepared for financial dips with an unsecured business line.

New business opportunities can arise and present opportunities for real profit. Big contracts come and go. If you dont act fast, you may miss out on a huge business opportunity. Thousands (or even millions) can go down the tube if you dont have the capital you need to do business. Situations like this needlessly happen every day. An unsecured business line of credit is the perfect solution.

Keep in mind that you need to be smart with the finances provided in a business line of credit. It should be used only for genuine business needs.

There are many things that you need to take into consideration when looking into getting a business line of credit. It is important to find the right financial company to guide you in the right direction. After all, lending institutions look at everything. You need a company that can give you solid advice and to make sure all your is are dotted and ts crossed. Your business line application needs to be complete and perfect. Your business plan needs to be solid and your credit should be good.

Author: Chris Chandler
Article Source: EzineArticles.com
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I hear it dozens of times every single day; Businesses need money so they go to the bank, only to be turned down because they have bad credit… even when their credit really isn’t too bad after all. Ok, so maybe some of their credit scores are pretty low, but certainly not all of them.

One of the main reasons that banks aren’t loaning money is because they don’t want to take a risk during this economic turn down. That’s all well and good, but what are these small businesses going to do? These are the same small businesses that are referred to as the “backbone of our economy”… the same small businesses that built these banks in the first place. It would seem that the banks have all but given up on the small business owner.

There is no use crying over this. What we need to do now is figure out what we are going to do. There is an alternative to business loans called a business cash advance. This bank loan alternative has been supplying small business with working capital for about ten years now; even after the banks have already turned them down. This is why they are sometimes called a bad credit business loan; even though many of those businesses that rely on this type of funding do not have bad credit at all.

To qualify for a business cash advance; all you need is to own your business for at least 4 months and to process at least $2,500 each month. If you meet these qualifications; most providers will more than likely be able to fund your business even of your credit score is below 500.

Aside from being able to fund your business; there are other key advantages as well. Advantages like getting your cash in days rather than weeks, and the ability to get funded without collateral.

If you are a business owner that is currently looking for additional working capital; I strongly suggest you looking into this business loan alternative. Click Here to discover the unique benefits that a business cash advance has to offer.

Author: Christopher Ronk
Article Source: EzineArticles.com
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In my opinion, thinking strategically about CPE is the key.  Like any small business owner, you are in charge of your career and need to come up with a strategy.  And strategy starts with answering some basic questions, doing some research, thinking, and putting together a plan.  This is all the work of a busy professional – like a CPA!

Here are some important questions to answer:

What are my personal objectives, both in terms of career and personal development?

Where do I want to be in 5 years?  10 years?  20 years?

What are my personal strengths?  

In what areas could I envision the most dramatic potential for improvement with some focused effort?  

What potential improvements would have the most impact on my life and career?

What challenges and opportunities am I facing over the next 3-6 months?  6-12 months?  1-2 years?

What types of clients am I serving?  What are their needs, and in what ways can I meet their needs better than today?

What are my relationships with colleagues?  Are there opportunities for improvement here?

Do I have an effective network?  What value do I hold for my network?  Do I want to change that?

What are some key developments in the accounting field?

What are the major current developments in the overall business environment, or in the  communities I serve?  What is my program for keeping up to date and ahead of the trends?

These questions may seem very simple and basic.  Frankly, they are not particularly scientific, but they are definitely a starting point for a strategic plan that includes personal development.  We always need to remember that personal development is the key to moving forward, and that working on ourselves – increasing our capabilities and skill levels – always produces the best results in the long run.

So, what jumps out or emerges when you answer these questions?  Think about your CPA CPE.  Are there some things that you can do to satisfy some of the urges resulting from answering the questions that can be satisfied by continuing professional education?  Here are a few ideas:

1. Identify the hard skills.  These are the core accounting, finance, and law knowledge that you need to obtain in the coming period.

2. Identify the soft skills that you will need to achieve your near and medium term goals.  These are the key people skills that will open some doors for you.

3. Identify the environments in which you want to operate.  You may need some specific industry exposure.  You may need to seek out some specific situations where you can network with other professionals with particular areas of expertise that you want to gain.

4. Identify your learning preferences.  In many cases, due to constraints of both time and money, you will want to devise a blend of in person, on your own, and online work that optimizes your use of time.  The training options are also an input to this decision.

5. Identify your networking needs.  You may be able to kill 2 birds with one stone by attending education meetings for CPE credit where you also get the right mix of networking to expand your contacts.
6. Many professionals find that they want to supplement their current credentials – like a CPA – with another credential that will help them to differentiate themselves to their clients and in the marketplace, or sometimes even move them in a different direction altogether.  CPAs and other professionals often satisfy CPE requirements while at the same earning a certification in IT, project management, Six Sigma, Business Analysis, or a related field.

These are but a few ideas for gradually developing a strategic plan for earning CPE credit to maintain your CPA license.  Hopefully, looking at the CPE requirement from a fresh viewpoint, and incorporating  your CPE activities into your own personal vision and strategic plan helps to satisfy the CPE requirement as much as it does to move you forward as a professional in your desired strategic direction.

John Reiling, PMP, PE, MBA is an experienced professional, with most recent focus in Project Management and IT. John’s web site, CPE Training Online (http://www.cpetrainingonline.com) provides online Continuing Professional Eduction training for CPAs.

Article Source:http://www.articlesbase.com/project-management-articles/cpa-cpe-how-to-survive-continuing-professional-education-1309975.html