How to Find Local Business Loans

Decades ago all across America, small business owners in looking to find local business loans would perform the same, familiar ritual. Plumbers, real estate developers, restaurant owners, and more would all get dressed up to go to a local community bank, heave manila folders bursting with financial paperwork, and hope a loan officer would approve their request for business financing.

Now, with wider access to capital through a new, digitized path to small business financing, many business owners never speak to local bankers—or look for local business loans at all. But if you’re wondering how to find local small business loans, the truth is that although these opportunities do exist, they are few and far between.

That said, there are still plenty of financing options available to small business owners. We’ll look at the most promising local business loans as well as non-local financing options that might be a great fit to help you finance your business.

How to Find Local Business Loans from Your Community Bank

Bank loans are undoubtedly the best small business loan product available for any borrower. They carry the lowest interest rates and the best repayment terms on the market, so business owners that are qualified for local business loans from a traditional bank are almost always best served by this option.

The catch? Actually qualifying for these local business loans is difficult. Since most local community banks don’t have ample funds to loan out, they end up needing to keep qualification standards for their borrowers incredibly stringent.

If you’re intent on pursuing a local business loan from your brick-and mortar-community bank, your best choice is to consult with local banks directly about their application process and standards. Before you take this path, however, it’s important to acknowledge the headwinds you’ll face. Each local bank will have their own requirements, but you should expect them to look for candidates with excellent credit scores, very strong revenue and consistent positive cash flow, plus a solid history of time in business.

Local Business Loan Alternative: SBA Community Advantage Loans

Given the challenges many borrowers face trying to both find and qualify for local business loans from banks, you might want to expand your search slightly—or at least consider a few other angles in. But you’re not out of luck.

The US Small Business Administration (SBA) has stepped in to recognize this challenge within local community lending and provide an alternative that makes local business loans more accessible to main street entrepreneurs.

Created in 2011 with a commitment to providing financing for underserved communities, the SBA’s Community Advantage Loan Program, a division of the widely popular 7(a) loan program, allows local, community-based lenders to offer financing to local borrowers by backing those loans with a federal guarantee.

What Are SBA Community Advantage Loans?

The SBA Community Advantage loan is a small business term loan of $50,000 to $250,000 with affordable interest rates—usually between 7% and 9%—and payback timelines stretching up to 10 years.

With a percentage of the loan guaranteed by the federal government, approved community-based lenders can marginally relax the high standards set by traditional banks. This lowered risk allows them to take into account a wider array of factors as they consider which loan applications to approve. As a result, the same bank that may reject your direct application for a local business loan might be able to approve your funding request if it were submitted as an SBA loan application.

How to Qualify for an SBA Loan Community Advantage Loan

Before applying for an SBA 7(a) or Community Advantage loan, you must first confirm that you meet the requirements of the program.

To qualify, you must operate a for-profit small business—meaning you have fewer than 500 employees and less than $15 million in assets. Both new startups and established small businesses are welcome to apply, however, note that certain industries are ineligible for the program (like gambling or religious organizations, for instance) due to government restrictions.

Like other local small business loans, both the SBA and your local lender will evaluate applications on the basis of commonly held lending standards, such as your credit score, your business’s annual revenue, and other debts that your business currently has outstanding. You’ll also need to present a picture of your experience in your industry, as well as a business plan. And, although there’s no formal credit score requirement, many business owners who qualify for SBA loans have strong credit profiles.

Pros and Cons of Financing Through SBA Loans

Although the community advantage program is a welcome alternative for entrepreneurs seeking local business loans, this isn’t the best funding option for every business. Let’s take a look at the benefits and the drawbacks of applying for an SBA loan:

The Pros:

  • Low interest rates: SBA community advantage loans are among the most affordable financing available.
  • Long repayment terms: Timelines stretch as long as a decade, making monthly repayments smaller and easier to manage.
  • Easier access to funding: SBA loans are still difficult to qualify for, but standards are more manageable than you’ll find with traditional bank loans.

The Cons:

  • Complex application process:  Expect to be filling out a lot of forms, gathering extensive paperwork, and navigating some federal red tape to obtain approval for an SBA community advantage loan.
  • Extended approval timeline: Because loans must be approved by both your local intermediary lender and the SBA, and there’s lots of documentation involved, the SBA loan approval timeline can stretch out over weeks or even months before you have cash in hand.
  • May tie up other access to credit: In some cases, taking on this long-term loan right now could hold you back from accessing other forms of small business financing in the future.

Given these pros and cons, only you can decide whether pursuing the SBA loan application process is the right choice for your business. As you weigh your options, be sure to take into account both the short-term and the long-term needs of your small business.

How to Apply for an SBA Loan

If you determine that an SBA community advantage loan—or any other SBA loan option—is the right choice for your business, you’ll start the process by identifying an SBA-approved community advantage lender in your area. You can find SBA intermediary lenders through the administration’s LenderMatch portal, or by consulting with a financing counselor at your district or regional SBA office.

Once you’ve identified an appropriate SBA intermediary lender to work with in your area, you’ll want to consult with that lender directly for further application steps, as exact requirements can vary among lenders.

That said, you can expect to include these documents with your application:

  • Driver’s license
  • Voided business check
  • Business bank statements
  • Personal tax returns
  • Business tax returns
  • Balance sheet
  • Profit & loss statement
  • Personal financial statement
  • Business plan with two-year financial projections
  • Existing business debt schedule
  • Proof of equity investment into your business

Compared to other forms of financing, SBA loans have a time-consuming and difficult application process—so it’s not a great option for those who need quick access to funds. If you decide to pursue this option, make sure you set aside adequate time in your business planning to accurately complete the application, be available for any follow-up requests, and await the funding your business needs.

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Alternatives to Local Small Business Loans

We’ve established that the traditional model of local small business borrowing is, for the most part, a thing of the past. For most borrowers, obtaining local small business loans is almost universally a time consuming process. And, for some, altogether a non-option.

Fortunately, as traditional banks have moved away from small business lending, a new marketplace of online lenders have stepped up to fill the gap in small business financing. Consider these non-local business loan products as potential alternatives to the local business loan you had in mind.

Option 1: Term Loans from Online Lenders

Business owners seeking the stability of a traditional bank loan with simpler qualification standards will likely be most attracted to term loan products from online alternative lenders.

Just as with a traditional bank loan, these are medium-to-long term loans offered as a lump sum of cash upfront, then repaid over a period of 1 to 5 years through fixed monthly payments. Your interest rate will depend on your qualifications, including your creditworthiness and business financials. The rates won’t be as favorable as you might find with local business loans from brick-and-mortar banks, but qualification standards aren’t as rigorous—but many business owners find the trade off worth it in order to gain access to capital.

Also unlike with local business loans from banks or SBA loans, you can complete an application and have funds in hand in as few as a couple of business days.

Option 2: Business Lines of Credit

Although the traditional term loan model tends to be the most familiar to borrowers, it’s not the only way—or, in many cases, the best way—to obtain business funding.

Particularly if your business doesn’t need access to a large sum of funds all at once, a business line of credit, which gives borrowers access to a maximum amount of capital from which they can draw funds as needed, may be a better option.

The business line of credit works similarly to a business credit card cash advance in that your lender will authorize a set amount of funds—aka maximum credit line—that you can draw funds from as expenses arise within your business. You only pay interest on the funds in use at any given time, and once you repay what you’ve withdrawn, the funds can be used again and again as needed. The funds can be used for virtually any business purpose, and as long as you make repayments on time and don’t exceed your credit limit, you won’t incur increased interest rates.

These are also a good option for business owners who are looking for faster access to capital and less stringent qualification requirements than local business loans.

Though interest rates on business lines of credit tend to be slightly higher than equivalent term loan rates for most borrowers, keep in mind that because you only pay interest on funds when they are actually in use, many borrowers find that they can pay less in total interest on a business line of credit even with a slightly higher interest rate.

Option 3: Business Credit Cards with 0% Introductory APR

Business credit cards seem like a far cry from local business loans, sure. But in many cases, entrepreneurs who need a smaller sum of funds to get started can find just what they need in the right card.

Many borrowers are surprised to learn of business credit card options that offer as much as 12 or even 15 months of 0% APR. That means that, during this period, you can spend on this card interest-free—it’s like a free-money loan, essentially.

The downside, of course, is that these introductory offers do have an end date, upon which interest rates return to variable APRs based on the market Prime Rate and your creditworthiness. (Translation: They can be high—higher than a business loan.)  Before choosing a business credit card for your financing needs, you should have a plan in place ensuring that you can fully pay off your balance before the cost of borrowing becomes unaffordable.

Browse the Best 0% Intro APR Cards

Browse for Local Business Loans—but Look at the Other Great Options, Too

What you should take away from this is that you do still have options to find local business loans, although the era of getting preferential treatment through personal relationships with community bankers may be mostly a thing of the past. Bottom line is getting a bank loan is hard—and you need to have strong credentials. But if you have them, you should apply—and there’s a chance you’ll be able to snag a local business loan, which could be a boon for your business.

If that doesn’t sound quite like you, don’t fret: There’s still reason to be optimistic about your options for business financing. Although process may not match what you’ve previously imagined, your options for small business funding through non-traditional lenders is actually much better than what was available even a decade ago.

Do your research, and stay open minded about alternative financing options for your business. With these steps, you’ll be well positioned to find the business loan you need for your next stage of entrepreneurship.

The post How to Find Local Business Loans appeared first on Fundera Ledger.

from Fundera Ledger https://www.fundera.com/blog/find-local-business-loans
How to Find Local Business Loans

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Why Is A Frugal Lifestyle So Popular Yet Humiliating? : The Saturday Weekend Review #258

MONEY HAS NO FEELINGS SO DON’T LET IT OWN YOU.   Money has no feelings so don’t let it own you, not now not ever because that circle of desire vs. need can get tricky when you lead a lifestyle you think you deserve. What I mean by this is that there are people out there and perhaps yourself reading this today who want to act rich but live a frugal lifestyle without anyone knowing. That’s all fine and dandy but what I don’t understand is why is it so humiliating that you can’t admit it? I am a self-confessed nosey person but I don’t think I ever considered finding a bargain to be a deal breaker when it came to conversation. Even when I was a broke student I would look for deals and would tell my close friends about them because I was thrilled about it. I wouldn’t pretend to them that I bought something I likely couldn’t afford to buy retail or even on sale. No, I bought it USED. You might be that person who loves to save money and considers themselves part of the frugal lifestyle movement but not prepared to tell anyone about your […]

The post Why Is A Frugal Lifestyle So Popular Yet Humiliating? : The Saturday Weekend Review #258 appeared first on Canadian Budget Binder.

from Canadian Budget Binder https://canadianbudgetbinder.com/2018/07/14/frugal-lifestyle-popularity/

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Economics of Becoming an Airbnb Host: How Much You Can Make

If you’ve traveled recently, there’s a good chance you paid to stay in someone else’s home rather than a hotel, and you did so because of Airbnb. If your experience was positive, you might be considering becoming an Airbnb host yourself. So, we’re here to discuss the economics of hosting on Airbnb—how much money can you earn renting out your space to travelers, and how much the process will cost you.

The Airbnb platform has done more to make the home-share model safe, reliable, and culturally acceptable than any other service. Today, Airbnb is active in more than 65,000 cities around the world, with upwards of 4 million listings.

Unlike ride-sharing apps like Uber, which are the constant center of analysis, Airbnb doesn’t get as much focus, so it’s hard to tell whether the time, effort, and investment of becoming an Airbnb host is worth the payoff. But it’s a question worth asking. To help you answer that question, we’ll show you how to Airbnb your house (/villa/cabin/yurt/treehouse) and, along the way, what hosting on Airbnb will cost you.

How Much Money Can You Earn as an Airbnb Host?

If you’re thinking about becoming an Airbnb host, your intention is more than likely to pick up a side hustle, not to start a fully-fledged business. On average, Airbnb hosts make $924 a month, but those numbers truly vary. Some hosts even buy or lease a number of apartments or homes and rent them out full-time, creating what could be a six-figure income

If you’re curious about how much you can really earn by becoming an Airbnb host, you can plug in your location, the number of guests you can host, and how much of your home you can rent out on Airbnb’s website, and they’ll show you an average number.

Of course, your true earning potential depends upon how much you charge for your space, and how often you can rent it out—both of which are ultimately dependent upon how much time and money you can spend on furnishing and maintaining your home. (Not to mention the sweat equity you’ll need to contribute toward making your space hotel-worthy.)  

So, the first thing you need to do is decide what your goals are for becoming an Airbnb host, and how much you’re willing to put into it, both effort- and money-wise. Keep in mind that if you’re renting out a room in your house, your roles, responsibilities, and expenses will be much different than if you need to obtain, furnish, and perform upkeep on an entire home.

1. The Cost of Creating Your Space

That being said, whatever niche you want to carve out on Airbnb—whether it’s a single room that shares your bathroom, a private wing with its own entrance, or your entire home while you take off for the weekend—you likely still need to invest something in your space. 

Naomi Slipp has experience running two different Airbnbs: a family cottage in Cape Cod, Mass., that had previously been outfitted as a rental space; and a separate wing in a home she bought in Montgomery, Ala.

“Our summer property has always in part supported itself through rental. But becoming an Airbnb host was the perfect way to find new renters and advertise to a larger audience and community,” says Slipp. “We listed that place in summer 2013, and at the time I lived an hour away from the property, which made it really easy to co-manage with other members of the family.”

When Slipp was house-shopping in Montgomery, she and her husband specifically looked for homes that could be outfitted with an additional Airbnb space. When they found their home, they made improvements to it to make it a better fit for guests.

“We didn’t move into the house right away, and one of the improvements we made was to build a wall to close off [the room],” she says. “It had been used by the past occupants as a family room. It can become part of the house when our parents are visiting.”

For that space, Slipp invested in a number of amenities, some which are crucial to the Airbnb experience—a keyless lock to make check-in easier, for example—and others that simply help make the space more comfortable for longer-term guests, like a fridge, microwave, a Keurig, and a separate, furnished television area. 

Regardless of whether you choose to rent out your entire home, like Slipp did, or just a room, you’ll need to factor in the costs of stocking that space with necessities. Airbnb lists clean sheets, towels, and toilet paper as must-haves, but to score the highest ratings, you’ll need to go above and beyond those basics.

Keep in mind, too, that your utilities bills will increase with an extra few people living in your space.

Get Permission!

If you’re considering becoming an Airbnb host, it’s crucial that you receive the proper permission from your landlord, co-op board, or homeowner’s association, if relevant. Even before you approach your landlord, read your lease, which will include a provision about subletting.

Depending on where you live, too, there might be legal restrictions to renting your home on a short-term basis. Sorting through the fine print is a headache, we know. But better the headache than violating your city’s or home’s laws, which can result in pretty hefty fines.

2. Research Your Market and Set Your Price

Once you have in mind what your economic goals are for becoming an Airbnb host, and you know what your space will look and how much you’re willing to contribute toward furnishing and maintaining that space, you can start thinking about where you fit in the local Airbnb market.

“Someone starting out should think about three things: affordability, knowing your audience, and knowing your market,” says Slipp. “You get rated on overall experience, accuracy, cleanliness, communication, check-in, location, and value—and I find that value, even if you’re comparable to other places in your area, is the thing that people will most likely begrudge you if you’re listing on a higher scale.

“For example, Cape Cod is an expensive summer market. Our house is on the beach, but it’s not the fanciest house. In our market, we’re nowhere near the prices in our area, but sometimes value is what we can get a little dinged on with our property,” she says.

How to Set Your Airbnb Price

When deciding how to price your house and what parameters to set for visits, the platform has a number of tools to help you. Airbnb’s metrics can show how your nightly prices compare to other homes in the area, or when you might want to consider lowering (or raising) your prices depending on the day of the week or expected surges in demand.

You can also set minimums for the number of nights people can stay at your Airbnb—a weeklong minimum, for example, helps offset the cost of turning over the space, which will include cleaning and upkeep. Also consider charging for extra guests, or for any additional services you may want to provide, like cleaning, equipment rental, or city tours.

Another thing to think about is your profit goals; how much you charge needs to be a part of that discussion.

“We make a profit, but it’s enough to keep the properties,” says Slipp. “We don’t operate them with higher expectations with that.”

How (and How Much) You Get Paid for Your Airbnb Rental

Airbnb charges your guests before arrival, and they’ll release your money according to the method of your choice (like PayPal or direct deposit) 24 hours after your guest checks in.

The platform takes a host service fee of 3% to 5%, so the listing price that your guests see is higher than what you earn. Some other factors might impact how much you get paid, too, including:

  • A weekly or monthly discount
  • Weekend or seasonal pricing
  • Payment for any co-hosts you enlist
  • VAT in certain non-US locations

3. Hire (or Enlist) Some Help

Becoming an Airbnb host can be tough to manage alone. Slipp recommends “having at least one other person to help you co-manage, to help you with the slew of emails and communications you deal with, or someone to help you physically on the ground.”

Co-hosts can help you deal with urgent issues, provide neighborhood-specific tips, aid the check-in process, and more. Find a co-host in a family member, friend, or neighbor.

If you do choose to enlist someone to help you navigate logistics, add your co-host to your listing (you can add up to three), and make sure they understand Airbnb’s Co-host Terms of Agreement.

Co-hosts don’t come for free, though. Together, you and your co-host will determine how much they’ll be paid per reservation.    

If you can’t find a trusted co-host, consult any number of cottage industries that have grown up around Airbnb, and which help hosts deal with inquiries, clean spaces, and more. Some of these Airbnb-adjacent businesses include: 

  • KeyCafe: Turns cafes near your spot into a key-storage location (if you don’t invest in a keyless lock).
  • Guesty: A property management company that helps you handle the backend of the process, such as bookkeeping
  • Properly: Offers changeover cleaning services to spruce up your rental between guests.

Of course, these services also come at a price. However, you might find that an extra hand, either human or digital, might be worth the extra cost to help you run your rental space smoothly.

4. The Time Investment of Hosting on Airbnb

After finding and outfitting your space, your next biggest investment of becoming an Airbnb host will be your time.

If you invest your time, you’ll get more bookings, and hopefully more reviews—though not every guest leaves a review, which can be a bummer. And reviews matter. If you rise in the rankings, you’ll appear more often in people’s search results.

“With our status and how many people we’ve hosted, we show up first, and we get more first bookings,” says Slipp. “Many people book with us for a quick overnight, so we get a lot of day of or day before bookings. A lot of those things lead to the increased stays, which has given us the greater number of reviews of late.”

Of course, the more effort you put into your space to make it as beautiful, functional, and comfortable as possible, and the more time you allot to being available to respond to your guests’ concerns, the better your reviews and ratings will be.

On the flip side, you don’t get paid for all the effort you contribute to your rental space. The messages you respond to that don’t convert, and the time you spend decorating, anticipating people’s needs, responding to issues, and so many other aspects of the job simply can’t be quantified, or rolled into your fee. 

“I don’t pay myself,” says Slipp. “The amount of messages and inquiries you get that don’t pan out as bookings is shocking. So just the back-and-forth communication with potential guests takes a lot of time. And you really have to be able to drop whatever you’re doing and respond to inquiries quickly to make that time worth it.”

Like Slipp, you might not receive enough money from your efforts to actually live off of. It’s up to you to decide whether the positive (we hope!) experience of hosting guests justifies your monetary earnings.

5. How Airbnb Taxes Work

As you might expect, Airbnb taxes are complicated, and there’s no uniform tax policy that applies to every single Airbnb host. Rather, Airbnb hosts might have different tax policies depending on the city they live in, so get acquainted with your local laws to understand what you’ll need to collect or pay in order to host.

Collecting Taxes from Guests

If your city does require you to collect local taxes from your guests, you’ll need to let them know the exact amount before they book; you can either include the amount in the listing proper, or not.

If you choose not to include the tax amount in your listing, you’ll need to collect that amount from your guest when they arrive. Know that Airbnb can’t ensure or aid in tax collection, though. 

Reporting Your Airbnb Income to the IRS

As a host, you’ll need to report your Airbnb income and expenses to the IRS if you rented out your house for more than 14 days over the calendar year; or if you live in the house you’re renting for more than 14 days, or more than 10% of the total days it’s rented out to guests.

Also, Airbnb will send you a Form 1099-K if you’ve earned over $20,000 and had 200+ reservations over the calendar year. And hosts who’ve had their taxes withheld from their payouts will receive a tax form from Airbnb so they can accurately report their income.

And you can deduct certain expenses from your Airbnb income, but Airbnb (and we) urge you to consult a tax professional on all these matters.

As an Alternative, Consider Hosting an Airbnb Experience

If you want to be an Airbnb host, but you’re not in a position to rent out your home, consider hosting an Airbnb experience, instead.

Essentially, Airbnb Experiences is the platform’s tour-guide service, which hooks up guests with knowledgeable hosts for unique, hyper-local activities—think yoga classes under the Eiffel Tower, surf lessons at Venice Beach, a Harry Potter walking tour in London, and a pasta-making class in Rome.

As an Airbnb experience host, it’s up to you to create and facilitate these one-of-a-kind experiences for travelers through your city.

Just like being an Airbnb host for a house, you set the terms of your Airbnb Experience hosting gig—you pick your hosting schedule, how often you can host, the size of the group you can oversee, and your rate. Unlike renting out your home on Airbnb, though, there are far fewer cost considerations to becoming an Airbnb Experience host.

Who’s Eligible to Become an Airbnb Experience Host?

You don’t need to be an Airbnb home host to be an Airbnb Experience host—but according to Airbnb, experience hosts must be credible, genuine, and empathetic. In other words, you need to have a skillset or area of expertise, a deep knowledge of your city, and the desire and ability to share both with strangers.

Beyond that, you might need to have a business license to be eligible, depending on the experience you’re hosting and your local laws. Pay special attention to legal stipulations if your planned experience involves alcohol, food, or transportation.

Also keep in mind that Airbnb experiences aren’t available in every city, so you’ll need to check the website to see if becoming an experience host is viable for you. If so, you’ll need to submit your experience application to Airbnb, who’ll vet you, and your experience request, and typically respond within 1 to 2 weeks. Be aware, though, that there’s currently a waiting list in most cities.

And if you do start to host Airbnb experiences, you might actually need to register your experiene as a business. That depends on your local laws, and whether your hosting gig complies with your jurisdiction’s definition of business activities. It’s up to you, not Airbnb, to check up on your local laws and make sure you’ve acquired all the necessary licenses or permits.

So, Is Becoming an Airbnb Host Worth It?

Ultimately, whether becoming an Airbnb host is “worth it” depends on your economic goals, and how much time and effort you’re willing or able to put into your rental.

Being an Airbnb host can certainly make you money, but it’ll cost you, too. Some costs to consider include:

  • Furnishing, stocking, and maintaining amenities in your rental space
  • Cleaning services between reservations
  • Co-host income
  • Taxes and Airbnb’s fee
  • Higher utility bills    

It’s best to keep your profit expectations conservative, especially if you’re not willing or able to contribute huge amounts of time and energy into your hosting gig. After all, for the vast majority of us, becoming an Airbnb host is intended to be a gig—not a full-time job, with full-time earning potential. 

For Slipp and her husband, being an Airbnb host makes sense for now, so they’ll keep doing it. But Slipp also genuinely enjoys the process of hosting, which she says is a must for potential future hosts.

“I think the Cape property is definitely worth my time. We make exactly enough to keep the house. We don’t overcharge for that place, we know how much we need to make, and that’s what we make to cover taxes and property expenses,” she says. “Down here [in Montgomery], we’ll do it as long as it’s working for us. It definitely is a lot of work for a smaller payoff, compared to the other property, but right now it’s working and it’s fun, and I really enjoy hosting people.”

In fact, Slipp cites this as perhaps “the biggest thing”: actually liking people. That may sound like a joke, but it’s not.

“I’ve had surprising conversations with people where they think they won’t have to ‘deal’ with guests. You have to actually enjoy people, meeting and helping people, interacting, and engaging with them,” she says. “If you don’t have a lot of patience, or if you feel put upon when people request things, don’t be a host.”

Fair enough, right? Airbnbs may not be hotels per se, but they’re still a part of the hospitality business. If you keep that aspect in mind while running your listing, you’ll have a much smoother time with things, we promise.

The post Economics of Becoming an Airbnb Host: How Much You Can Make appeared first on Fundera Ledger.

from Fundera Ledger https://www.fundera.com/blog/becoming-an-airbnb-host
Economics of Becoming an Airbnb Host: How Much You Can Make

first seen on http://barbarapjohnson.blogspot.com

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Rollovers as Business Startups: Is a ROBS Your Best Funding Option?

Rollovers as Business Startups: Is a ROBS Your Best Funding Option?

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Birmingham Airport ‘must improve’ its treatment of disabled passengers

Some passengers on incoming flights at Manchester were left waiting on planes for more than an hour before assistance arrived

from Birmingham Post – Business https://www.birminghampost.co.uk/news/regional-affairs/birmingham-airport-blasted-over-treatment-14903633

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Birmingham Brexit report to be published – while ‘secret’ document is shelved

Officers have ruled the original report will not be published despite probes

from Birmingham Post – Business https://www.birminghampost.co.uk/news/regional-affairs/birmingham-brexit-report-published-secret-14900439

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5 Steps to Building a Successful Ecommerce Business

Of the 12 million ecommerce stores in existence worldwide, only 650,000 are generating over $1,000 annually. That’s a hard truth to swallow. The good news, though, is that ecommerce is still a relatively young concept. Revenue from online sales hit $1.4 trillion in 2014, and the current projections predict it will grow into a $4.5… Read more

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from Grow With Kabbage https://www.kabbage.com/blog/build-successful-online-store
5 Steps to Building a Successful Ecommerce Business

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4 Key Metrics That Define Small Business Success for Women

What does small business success mean to you? Many entrepreneurs define it by steady-to-heavy cash flow (money, in other words) and they’re not wrong, according to a new report from SCORE. The Megaphone of Main Street: Women’s Entrepreneurship, Spring 2018 covers key findings as they relate to women entrepreneurs, including data collected on women-owned business success, financing, and the impact of mentorship.

Four key metrics included in the report define and measure women-owned business success. Revenue is one, of course, and the remaining three include the likelihood to start businesses, longevity, and hiring practices.

How can these metrics aid to the long-term health of women-owned businesses, and why should female entrepreneurs pay attention to them? Let’s take a closer look at each one.

success-business-women

1. Likelihood to Start a Business

Yes, simply starting a business can aid to its success!

Forty-seven percent of female business owners that SCORE responded that they started or acquired a business in the last year. This makes women more like than men (at 44%) to follow through with launching a small business.

Women are likely to start a business at any age past 18 years old, but they outpace men significantly as they grow older. By age 25, there are 51% of female business owners to 47% of men. At age 75 and older, women-owned businesses are the majority at 54 percent compared to male-owned companies at 29%.

Starting a business has never been easier or more accessible, thanks to a plethora of available resources and low launch costs. But what compels female entrepreneurs to get into the game later in life? Some of their success can be attributed to having built up years of experience within their given field and developing valuable connections. As they grow older female entrepreneurs also have a deep understanding of how to plan ahead, which includes making time for self-care and focusing on their health.

2. Revenue Growth

Although revenue is certainly important to small business owners, SCORE reports that for businesses currently in operation there’s no real difference in anticipated revenue growth regardless of the owner’s gender. Business owners are largely in agreement that their revenue might experience a slight increase or decrease, but will stay the same.

Again, although revenue does matter for small businesses, growth is quickly turning out not to be the only indicator of success.

3. Number of Years in Business

We’ve all read the varying statistics about startup failure—how it can happen within five years or even the first year in business due to circumstances like no market need or money. Is a startup really more successful the longer it stays in business?

According to SCORE’s report, having more years in business definitely helps to aid its overall health. While women-owned businesses tend to be a few percentages ahead of their male counterparts within the first five years, the numbers start tapering downward around the 20-plus year mark where men, at 17%, are more likely to be in business than women at 13%.

4. Hiring

When a small business is hiring for jobs, it’s often considered to be a beneficial win-win for the health of the company and economy. Sixty-five percent of surveyed female business owners report no change in hiring practices, planning instead to stay about the same size while 27% say they will increase their number of employees.

Hiring is often a challenge for small business owners, many of which struggle to find the right fit and retain the talent on their team. As a result, an emphasis has been placed on establishing a company culture where all feel welcomed, challenged, and able to thrive while vetting for applicants with proven track records for working hard and being able to adapt quickly to their new role.

The post 4 Key Metrics That Define Small Business Success for Women appeared first on Fundera Ledger.

from Fundera Ledger https://www.fundera.com/blog/women-small-business-success-key-metrics
4 Key Metrics That Define Small Business Success for Women

first seen on http://barbarapjohnson.blogspot.com

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What’s the Difference Between Equipment Leasing and Equipment Loans?

You might think of equipment as strictly heavy machinery. But from a small business loan perspective, so many tools of so many trades fall under the “equipment” umbrella. Ovens, trucks, IT software, office furniture and fixtures, kitchen appliances, HVAC units, company cars, espresso machines… basically, if you run a business, you need some breed of equipment to keep your outfit updated and running smoothly. But the cost for all that equipment piles up, and it’s tough—even impossible—to pay for everything, in full, using your own capital. That’s where equipment financing comes in.

Actually, though, you have your pick of equipment financing methods: You can consider either equipment leasing, or an equipment loan. Yes, there’s a difference between equipment leasing and equipment loans!

Essentially, equipment leasing is a rental agreement. And equipment loan, also known as equipment financing, is a monetary loan, which helps you pay for the purchase of a piece of equipment.

That’s your quick-and-dirty answer. But as it turns out, the difference between equipment leasing and equipment loans is slightly more involved than that. We’ll show you those differences, and help you figure out which equipment financing route makes the most sense for your business.

The Major Difference Between Equipment Leasing and Equipment Loans

As we mentioned, equipment leasing and equipment loans are two different financing products; both give you immediate access to expensive equipment, but they’re structured in completely different ways.

Here’s what the difference between equipment leasing and an equipment loan really comes down to:

With an equipment lease, you don’t own the equipment outright. Rather, a lender buys a piece of equipment, then rents it out to you, for a flat monthly fee. At the end of your lease, you can choose to purchase the equipment at its fair market value. (You can choose a few other options, too, which we’ll get into later.)  

If you opt for an equipment loan, on the other hand, your lender will front you the capital to pay for the purchase of a piece of equipment. Depending on what you’re buying, your lender can loan you all, or most, of the total value of your equipment. You’ll pay down your loan, plus interest, over time. Once you’ve repaid your loan according to its terms, you’ll fully own your equipment.

All told, an equipment lease lets you pay for the use of equipment for as long as the lease lasts, not necessarily for the ownership of that equipment. An equipment loan helps you pay for a piece of equipment outright. (Like any other small business loan, though, you’ll need to repay your lender what you’ve borrowed, as well as interest.) You can kind of think of an equipment lease as renting out an apartment, and an equipment loan as buying a house.

The difference between equipment leasing and equipment financing doesn’t end there, though. Here are a few more key details about each financing product.  

What You Need to Know About Equipment Leasing

If you think that the equipment you need will become outdated in a few years’ time, then there’s no need to buy it! Instead, you can opt for an equipment lease, which allows you use of that conveyor belt, slushie machine, food truck, etc. that you need for a predetermined, but finite, amount of time. Typically, equipment leasing agreements typically last between two and seven years, but it certainly won’t outlast the equipment’s value.

The Upside to Equipment Leasing

No down payment or collateral: If you’re looking to finance a piece of expensive equipment, there are lots of reasons to consider equipment leasing. First off, an equipment lease generally requires no money down, and no additional collateral to secure. That means you can keep a good chunk of your cash to contribute to your business’s other expenses, and you don’t need to risk any of your business or personal assets to secure this rental agreement.

Easy application process: The equipment leasing application process is fairly simple, too—you likely won’t need to provide as much financial paperwork as you would if you applied for a traditional small business loan. Plus, equipment lenders will usually consider applicants with challenged credit.

Flexible terms: Most lease agreements include several options after the lease ends. You can choose to:

  • Purchase the piece of equipment at its fair market value. If you choose to buy the equipment you’ve been renting, the lender releases the title to the equipment to you
  • Continue to lease the same piece of equipment
  • Return the equipment
  • Trade in your current equipment for a new or updated piece of equipment

That last point is one of the major advantages of equipment leasing. Ultimately, you’re under no obligation to hold onto the equipment you’re renting, since you don’t actually hold the title to that piece of equipment. So, if you’ve found that whatever you’ve been renting—say, a hyper-specific piece of machinery or software—has become obsolete over the course of your lease agreement, you can easily return it. Then, the equipment leasing company can finance a newer model for you.    

The Downside to Equipment Leasing

Of course, an equipment lease isn’t a perfect deal—nothing ever is!

Because a lease isn’t a loan, you won’t pay interest on your monthly payments. However, lenders offering equipment leasing will bake an effective interest rate into those flat monthly payments; it’s how the lender makes money off their deals.

The price of your equipment leasing deal will depend on a few factors in your application, like your personal credit score, your business’s annual revenue, and its age. For the most part, though, lenders determine the cost of your loan based on the value of the equipment they’re buying, how well or poorly that equipment holds value, and the length of the lease.     

Depending on where the lender prices your monthly fee, you might end up paying significantly more over the course of your equipment leasing deal than you would if you’d paid for that equipment upfront.

What You Need to Know About Equipment Loans

Unlike an equipment lease, equipment financing is a monetary loan that helps small business owners pay for a piece of equipment over time. If your lender approves your equipment loan application, they’ll front you 80% to 100% of the cash you need to buy your equipment.

Then, you’ll repay that loan amount, plus interest, over a predetermined amount of time. The length of your equipment loan mostly depends on how long your lender anticipates that the equipment you’re buying will be valuable. Once you’ve paid off your loan, you’ll fully own that piece of equipment.

Equipment Loans: The Pros

Time: The most obvious upside to opting for an equipment loan is that this loan agreement gives you the time to pay for an expensive piece of equipment, which you wouldn’t otherwise be able to pay for upfront. And, at the end of your deal, you’ll own that equipment—unlike an equipment lease, which is really a rental agreement.

(Relative) of qualification: Equipment loans are generally easier to qualify for than traditional term loans, and most equipment lenders are happy to consider business owners with challenged credit. That’s because equipment loans are self-collateralized—if a borrower defaults on their loan payments, then the lender can seize the equipment they’re financing, and liquidate it, to retrieve their lost money.

That built-in safety net lessens the lender’s risk of losing everything if the borrower defaults (which is unlikely, but not totally out of the question). For that reason, equipment lenders are a bit less strict about things like a business’s average annual revenue, age, and the business owner’s personal creditworthiness during their vetting process.

That doesn’t mean lenders don’t care about those stats—they don’t really want to have to repossess your equipment. However, when they’re considering a loan candidate, they’re mainly concerned with the resale value of the equipment they’re financing, and the higher the resale value, the lower the APR. The equipment’s resale value determines how much money a lender is willing to extend you—where, you guessed it, the higher the resale value, the more money they’re willing to loan you.   

No collateral needed: Since equipment loans are self-secured, your lender probably won’t ask you to offer up any additional collateral to secure your loan, either.

Equipment Loans: The Cons

Down payment: If you’re approved for an equipment loan, your lender might front you 100% of the cost of your equipment. Or, they might not. Often, lenders supply around 80% of the amount of the equipment, which means it’s down to you to pay for the remainder upfront.

The good news, though, is that the more you can throw down on your down payment, the better your chances are of scoring a lower interest rate on your loan.

Interest rate: Also keep in mind that, like any other loan, you’ll need to pay interest in addition to the principal amount of the loan. Interest rates can be as low as 8%, but they may also shoot as high at 30%.

Your interest rate does depend on your qualifications—we’re talking the usual suspects, like credit score, time in business, and average annual revenue. Mostly, though, your APR has nothing to do with your stats; it depends on the resale value of the equipment your lender is financing.

You’re stuck with that piece of equipment!: Before you apply for a loan to buy a specific piece of equipment, be sure that it’ll retain its value by the end of your loan’s terms. Otherwise, you’ll be tied to an outdated tool that you might need to pay to replace.

long-term-and-short-term-loans

Equipment Leasing or Equipment Loans: Which is Right for Your Business?

If you’re itching for a new piece of equipment stat, but you’re fresh out of funds to pay for it upfront, don’t worry! You have options. Shoot for either an equipment lease, or an equipment loan.

As you now know, there are a few differences between equipment leases and equipment financing. And there are upsides and downsides to both.

Of course, you’ll have to weigh both sides of the coin, both for equipment leasing and equipment loans. But the more direct route to your answer is to consider these two factors: how much money you have available right now; and how quickly the equipment you’re eyeing will become outdated.    

If you have the money for a down payment, and the piece of equipment you intend to finance will last your business a long time, then an equipment loan may be the way to go.

But if you have little money to put down, and/or the piece of equipment you intend to finance will quickly become obsolete, then you may want to consider equipment leasing instead.

Keep in mind that both equipment loans and equipment leasing can offer tax incentives, too. As you’re well aware, taxes can get tricky, so speak with an accounting professional if you have questions about which option is right for you from a tax perspective.

Apply for Equipment Financing

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from Fundera Ledger https://www.fundera.com/blog/difference-between-equipment-leasing-and-equipment-loans
What’s the Difference Between Equipment Leasing and Equipment Loans?

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How To Overcome The Emotional Effects Of Debt Guilt : June 2018 Budget Update

DON’T LET THE EMBARRASSMENT OF DEBT KEEP YOU FROM REALIZING YOUR FINANCIAL DREAMS   There are consequences of owning debt and for 30 year-old Margaret who is feeling the emotional effects of debt guilt there are things she can do to get over this hurdle. Margaret isn’t the first person to email me about debt guilt and even myself at times felt guilty for owing money and had to pay it back as fast as possible. I remember the time my mom and dad gave me $5000 just before I moved to Canada. My house hadn’t sold yet and my money was tied up in my house equity and I needed to pay for Canadian Immigration documents, applications for permanent residence, medical assessments, flights to Canada, shipment containers and so on. The money my parents gave me was helpful and the first time I’ve ever borrowed cash from them in my life. They knew I’d pay them back as did I but boy oh boy did I feel stressed that I had to ask them for money. I’ve since overcome that guilt because I’ve learned that our bodies all react differently to certain situations. Since I was the kid who […]

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from Canadian Budget Binder https://canadianbudgetbinder.com/2018/07/12/emotional-effects-debt-guilt/

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