Small Business Finance Advice Blog

Tax Deduction Season - Don’t Miss Available Small Business Deductions

2007-02-20T13:35:00.000-05:00

Small business owners recognize that take home cash is critical for long-term success. And one of the surest ways to take home as much cash as possible is to maximize tax deductions at IRS filing time.

Deductions abound, but the options vary depending on the type of business. For example, a home-based operation qualifies for certain deductions that are not available for an individual overall.

Everyone is aware of the basic deductibles such as office supplies and legal fees. However, many are unaware that educational expenses, business entertainment and even certain travel costs are deductible as well.

In addition, when an at-home operation is involved, you can deduct that portion of your home related to the business operations by calculating a square foot percentage devoted to the business space then appropriating proportioned costs for everything from heat and lights to taxes.

If you have not documented expenses for this past year, then you should begin to position things now so that you will be able to keep more of your money next year.

For more on potential tax deductions, go to:

http://www.baltimoresun.com/business/bal-bz.ym.marksjarvis18feb18,0,4269316.story?coll=bal-business-headlines

Purchasing or Expanding Your Business – Consider the SBA, CDC/504 Loan

2007-02-20T13:33:00.000-05:00

Perhaps you already own a small business but a larger facility has become available that would enable substantial growth. Or maybe your operation expandable because it fits nicely with another entity that recently hit the sales market.

In either case, though you may be interested cash flow could be an issue with such a purchase consideration. If such is the case for you but you see the new venture as a necessary business step, you may want to consider the Small Business Association, CDC/504 Loan option.

The CDC/504 Loan program is for "bricks and mortar" type financing. The loan provides long-term, fixed-rate financing for major fixed assets such as land, buildings or equipment.

The SBA option demands certain down payment equity options from the owner. It also works to create financing from two other sources in addition to the equity contribution made by the small business owner.

For more on the 504 Program, including its borrowing limitations, see:

http://www.chron.com/disp/story.mpl/business/4561199.html

AIG Small Business Launches New Service Products

2007-01-22T22:25:00.000-05:00

AIG Small Business has announced a new branch of services available for small business owners and their employees.

The new subsidiary branch, called AIG Edge SM, features an assortment of insurance and non-insurance related products and services. AIG Edge SM will be available through the AIG Small Business Web site (www.aigsmallbusiness.com).

The new AIG small business portal offers links to a wide array of services through companies such as Newtek Business Services, Inc., Spot Runner, Robin Cohn and Company, and to many other existing AIG products and services.

For more on AIG Edge SM and a clear explanation of the services available with each of the above-mentioned links, please see:
http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=20070116006027&newsLang=en

Sometimes, To Start a Small Business You May Just Want to Start

2006-12-11T23:30:00.000-05:00

Ingrid Soderberg, owner and operator of Black Sheep Baby, possesses the requisite degree in small-business management. But when it comes to the notion of creating a business plan and a budget, Soderberg states she has simply been "too busy launching and running her own small business" to worry about such things as plans and marketing.

Though her no-frill clothing company was founded in March 2005, Soderberg states that she will only be seeking out investors after the holidays. But having said that, the owner notes that she has weathered many of the normal small-business challenges including piling up business expenses on her personal credit cards.

Her husband, a musician has helped design the clothes and the company logo. Using a website to promote her product, one that features the provocative logo of a black sheep with a nose ring, Soderberg indicates revenue will likely reach $10,000 to $15,000 from sales over the last half of 2006.

For more on the many pitfalls of beginning without a plan, as well as the benefits in just getting started, see:
http://www.startribune.com/535/story/864433.html

Plan Accordingly, Sensibly, and With Time Considerations

2006-11-22T10:25:00.000-05:00

Let’s face it, everyone who starts a business has an image of success. Their concept will be the next hot button item on the market with future riches a certainty, perhaps even immediately.

And many think they must be the first on to the market to have any chance of such success. The notion is that to win, you have to be first.

Some basic understanding of product lines indicates a slightly different viewpoint. Though Atari may have been one of the front runners in gaming and Radio Shack an early player in the personal computer market, the winners in both arenas long term are companies with vastly different names.

Gluing one’s foot to the gas pedal is more likely to lead to a crash and burn then the success most seek. Business is first and foremost about timing but it is also critical to have the right product at the time that can also be sustained over time.

For a sound view on the need for cautionary procedures, see:

http://seattlepi.nwsource.com/business/292691_schreter17.html

Colorado Venture Financing Booming

2006-10-24T11:24:00.000-04:00

In Colorado, venture financing is continuing an exceptionally aggressive path.

Coming off 2005 when companies raised $664 million in funds, corporations in Colorado are seeing yet another strong year in 2006. With $195 million in venture financing coming in during the third quarter, Colorado firms have raised more than $365 million in 2006.

After what was considered a rather disappointing start to 2006, the third quarter numbers that totaled nearly $200 million represent the state’s biggest three month period since 2002. The improved figures put the state in a position to surpass the totals of 2003 and 2004, though the numbers will likely trail that of ‘05 and the incredible 2000 year when Colorado companies raised $3.4 billion.

The key component of the state's third-quarter numbers came from the deal with Adam Aircraft Industries, a Centennial Airport- based airplane developer. That $93 million deal represents almost half of the entire three month haul.

For more on venture financing in Colorado, see:
http://www.denverpost.com/business/ci_4530947

Seeking Out Small Business Start-Up Funds

2006-10-10T12:30:00.000-04:00

Starting a small business definitely has some inherent risks - especially since many start up enterprises are funded initially from the personal assets of the owner. Though many are willing to put up funds out of the gate, many more have to open a line of credit against their current assets to be able to get their venture going.

For those seeking small amounts of capital to start their businesses, a home equity loan can provide some basic start up costs. The beauty of such an option is that such a loan can be set up well in advance of a person making the shift from their current job to being their own boss.

Loans are also available from the U.S. Small Business Administration for those seeking to borrow less than $100,000. The SBA works with nonprofit organizations to offer a product referred to as a microloan.

For more on small business start-up funding options:

http://www.phillyburbs.com/pb-dyn/news/147-10052006-723052.html

Congress Attempting to Encourage More Small Business Export Financing

2006-09-30T18:59:00.000-04:00

In an effort to improve the small business foreign country export options, Congress is acting for the second time in four years to foster changes in the Export-Import Bank of the United States finance operations. A bill recently passed by the House and in consideration by the Senate, seeks to create a new small-business division within the Bank entity.

The new division would have the power to approve business loans as well as provide insurance packages of up to $10 million for businesses seeking assistance. The primary function of the Export-Import Bank is to give American companies some assistance as they seek to compete with foreign exporters, some that are extensively subsidized.

With reports that every $1 billion in exports equates to about 14,000 domestic jobs, it is easy to see why the government should actively get involved in helping small businesses compete. The new division will attempt to ensure that small American companies will be able to do just that, compete globally and do so even in those places where business operations can be a very risky, perhaps even dangerous venture.

For more on the changes at Ex-Im Bank, see:

http://www.mercurynews.com/mld/mercurynews/
news/breaking_news/15489184.htm

Avoiding Financial Failure With Your Small Business

2006-09-06T12:18:00.000-04:00

There are many trouble spots in beginning a new business. Management, marketing and planning are all critical to getting your enterprise off to a successful start.

However, to be truly successful as a small business owner, you must have a firm grasp of various financial concepts. Among the many monetary aspects to consider are the initial start-up capital to get your business off the ground and the subsequent working capital that will be necessary to give the business a strong foundation and a realistic chance for future success.

To learn more about the nuances of developing an appropriate financial plan for capital expenditures as well as possible options for raising all or part of the initial capital necessary, see:

http://www.americanchronicle.com/articles/viewArticle.asp?articleID=13114

Small Business Owners Now Have Easier Access to Short-Term Lines of Credit

2006-08-15T21:56:00.000-04:00

The nation's largest small business bank recently launched a new credit product that seeks to help small business owners capitalize quickly on market opportunities.

The Bank of America is offering the Business Credit Express® product, an unsecured line of credit of up to $100,000, to enhance the competitiveness of the small business owner. The new product provides owners quick and convenient financing, allowing business owners to improve their cash flow, purchase inventory and deal with general emergency expenditures.

The new Credit Express product also provides for the flexible movement of funds without the standard charges associated with other credit products. In addition, the Bank of America has simplified the credit application process and the bank will waive the $100 annual fee for any business in its first year of operations.

More details on the Bank of America Credit Express product line are available at:
http://biz.yahoo.com/prnews/060814/clm010.html?.v

A step by step plan on getting a startup business loan

2006-08-01T11:33:00.000-04:00

Everyone knows that banks typically give out business loans to existing companies. They rarely give out a loan for a start-up venture.

But just because they don't do it often doesn't mean it's impossible. The Shreveport Times recently offered a step by step process for securing bank funds for your startup venture:
http://www.shreveporttimes.com/apps/pbcs.dll/article?AID=/20060731/NEWS05/607290325/1064

Of the six steps mentioned in this piece, I feel that the two most important ones are having solid personal credit and having plenty of your own cash, but all of the steps that are outlined in this article are valid.

SBA loan programs can be just the ticket to get your business off the ground

2006-07-18T03:41:00.000-04:00

Do you feel like your job is leading you nowhere? Worse yet, do you feel that if you just had the income for a start up operation you could do better job leading your own company than your current supervisor?

Well the U.S. Small Business Administration (SBA) can be of real help if you want to make the move. The SBA has numerous loan programs for potential small business owners, especially those unable to secure traditional loans.

If you are interested in a for-profit operation in the United States the SBA can be of great assistance for your start up operation.

For more on the SBA programs see: http://www.azstarnet.com/business/138121.

Financing Your Small Business

2006-07-16T22:35:00.000-04:00

When it comes to financing mechanism for your small business, an understanding of the various U.S. Small Business Administration (SBA) loan program options is paramount.

Among the many options to be considered are the SBA’s "Loan Guaranty Program," the offering referred to as "LowDoc," as well as the "Express" loan option and the "Micro Loan." Each of these offerings has specific criteria and focal points, whether it be to help a small business that is unable to secure loans through normal lending channels or to provide funding for the specific business entity seeking a fast track loan option for obtaining approval.

Each option carries with it specific funding request levels. For an explanation of each of the aforementioned loan offerings, please see:

http://www.blackenterprise.com/yb/ybopen.asp?section=ybaa&story_id=92509756&ID=blackenterprise

Time for Export-Import Bank to Give Greater Support for Small Companies!

2006-04-11T16:52:00.000-04:00

Export-Import Bank, an independent federal agency, should be doing more for small companies. A Congressional review of the effectiveness of the bank is said to be looming, with many conservatives stating that the loan guarantees and risk insurance provided by Export-Import are nothing more than corporate welfare.

Export-Import finances exports of U.S. goods and services, providing loan guarantees and direct loans for buyer financing, export credit insurance, and working capital guarantees for pre-export financing.
At the heart of the concerns that most of the dollars simply financed sales by large businesses even if more transactions, at least in number, involved smaller businesses. A major criticism is the failure of Export-Import to provide adequate details in its public notices.

For more on the issues related to Export-Import Bank:

Click Here to Read More...

Selling a Business? Give Consideration to a Business Broker

2006-04-06T02:15:00.000-04:00

When it comes time to sell a small business, many owners seek to handle the responsibilities of the sale themselves. Not only is such a sale fraught with potential legal mistakes, the overall handling of the sale can be terribly time consuming.

However, there are numerous professional business brokers willing to handle the sale, providing the business owner with essentially the same services that a homeowner would receive when selling his/her home through a Realtor. The general consensus today is that as the Baby Boomer generation nears retirement, business owners will likely have greater and greater difficulty finding prospective buyers without some assistance from professionals.

For more on a business broker, see:
Click Here to Read More...

Women entrepreneurs face challenges when seeking venture capital

2006-03-30T11:07:00.000-05:00

Today, one would thing that there would be numerous women's success stories in regards to business start-ups and raising venture capital. The reality is that even in today's world, the glass ceiling is still fully in place, especially in the venture capital world.

According to Growthink Research, about 1,860 companies received private equity funding in 2003. Of that number, just 84, or roughly 5% were woman-owned companies. Other than the health care field where 44% of all businesses funded in 2003 were led by women, female business owners were a definitive minority in most business sectors.

To learn how Janet Kraus, 39, and Kathy Sherbrooke, 38, managed to break through and secure venture capital for their business called Circles, see:

http://money.cnn.com/2006/03/23/smbusiness/women_fsb_fix/

Want To Preserve the Family Business? Then Think Diversification

2006-03-23T14:04:00.000-05:00

For those who currently run a successful family business and have the desire to preserve that business opportunity for their children, the message has become to diversify your holdings.

That thought may come as a surprise to small and medium-sized family operations, especially those that turn the profits back into expanding the initial entity. However, for many such businesses, unless careful planning takes place, the entire business net worth can be tied up in the running of the business itself. Then, when times get tough, the entire operation can become vulnerable.

Today, for those who want to preserve their business for their children, an owner needs to consider reallocating assets as soon as the business turns a profit. And the message is, the sooner, the better.

See: http://www.redlandsdailyfacts.com/ci_3624890

Banco Popular set to reach out to small business owners

2006-03-09T18:53:00.000-05:00

The North American branch of Banco Popular is set to launch "Popular Small Business Capital". This new division's task will be to lend money to small businesses throughout the United States. The funding range will likely be between $150,000 and $10,000,000.

Its always good to see one of the world's megabanks lending a helping hand in terms of small business finance.

"Ladies Only" Business group getting a strong foothold in NYC

2006-03-02T11:55:00.000-05:00

I saw an interesting article this week in the New York Daily news. Its about a business group that calls itself "Ladies Who Launch".

Basically, this group is comprised of what else? Women who plan to launch or already own their own small business.

If you want to read more on their activities go ahead and check out this link:
http://www.nydailynews.com/business/story/395966p-335654c.html

Hopefully, this innovative idea can spread out to other parts of the country so that women all over the place can share their experiences and trade business tips...something that guys have been doing seemingly forever.

Have you heard of CRAFund Advisors?

2006-02-23T11:38:00.000-05:00

I came across an extremely interesting press release today. Its basically touting a new "Small BusinessInitiative" that will supposedly raise $50 million then offer the funds to small busines soperators in minority communities all over the United State (its also designed to aid areas hit byHurricane Katrina and other natural disasters).

This effort is being headed by CRAFund Advisors and will be operated as the CRA Qualified Investment Fund (a mutual fund).

This is all very radical because Mutual Funds are typically considered to be "safe" investments that are backed by very stable companies.

If you have a steady small business in one of the designated areas this initiative could be a good way to raise funds.

For more info visit:
Click Here to Read More...

A great piece on small business finance

2006-02-16T13:14:00.000-05:00

If you're a small business owner trying to secure financing for your company I've got a great little article for you to read through.

It basically talks about how the knowledge needed to secure funds is not necessarily found in textbooks, and it also offers advice on how to navigate through the countless pieces of business finance junk mail that comes to your door.

Just keep in mind that if you're a new business trying to secure small business financing you'll need to provide solid financials for the company as well as present a solid personal credit history.

Anyhow, here's the article. Enjoy!
http://www.dailyindia.com/show/2663.php

Making your company more valuable

2006-02-10T14:36:00.000-05:00

Susan Schreter wrote an excellent piece on improving the value of a small business, whether it be for the purposes of selling the business or simply raising investment capital.

The key aspect that she talks about is making sure that as a company grows, it's success or failure (in terms of making money) is no longer dependent on the founder. If that is the case, the founder will have a tough time buying a buyer or investor unless he or she is willing to stay on and work for the company (nobody want's that do they?)

Anhow, here's a link to the article in the Seattle Post-Intelligencer:
http://seattlepi.nwsource.com/business/259030_schreter10.html

Its definitely worth reading.

Interesting little small business finance search engine...

2006-02-02T19:24:00.000-05:00

According to a press release I saw the other day, a website called iBank.com has launched a search engine for small business owners looking to connect with funding sources. I thought that was a pretty damn cool idea! (why didn't I think of it?)

Anyhow, the search engine apparently includes various types of lenders and is useful for finding business loans, equipment leasing, and commercial and home equity mortgage loans.

iBank has been around since 1999, which is like an eternity on the internet, so I'm guessing that they are fairly trustworthy. Anyhow, if you're in the market for some small business financing (and I know you are, because that's what the blog is for) go ahead and check them out:
www.ibank.com

Check back often for more small business finance resources.

A good rule of thumb for starting a business

2006-01-26T13:45:00.000-05:00

According to Monica L. Dolezal, owner of Bizstarts consulting in Des Moines, Iowa, its a good idea to figure out how much your expenses will be for three to six months and have that amount in checking or savings to start with.

Personally, I would lean more towards the six month figure than the three month figure. In reality, most startups don't become profitable for a year or more, so make sure that you have reserve finances to get you through that first critical year of growth.

Check out this link if you want to read more about Monica Dolezal and her opinions on starting a business:
http://desmoinesregister.com/apps/pbcs.dll/article?AID=/20060126/BUSINESS04/601260325/1033

Check back often for more small business finance advice

Using credit card to fund you business or startup?

2006-01-12T10:47:00.000-05:00

There was a very interesting article in Entrepreneur Magazine regarding whether or not to use personal or business credit cards to finance a new business. According to the article, recent surveys show that credit cards are among the most popular ways of funding a new company. In fact it was one of the two most popular options, along with borrowing from relatives.

The article goes on to discuss the pitfalls of running up a debt on a “business” card that is personally guaranteed by the owner(s) of the company. Although I recommend waiting until your corporation has enough of a credit history to be eligible for a credit card with no personal guarantee this article is a good read for those of you who simply can’t wait that long (it typically takes two years or more of a good credit history for a corporation to qualify with no guarantee).

Here’s a link to the article, which is being syndicated by MSNBC:
http://msnbc.msn.com/id/10806912/

Check back often for more small business finance discussion.