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Does Your Small Business Qualify for Funding?

 

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A small business line of credit works as one of the most common finance options for small business owners. By obtaining a small business line of credit, you can access funds that allow you to keep up with cash flow, your bills, and operate your business as you see fit.

Most small business owners obtain these lines of credit to help them with their cash flow. Even some of the best businesses experience cash flow problems. Such issues can include customers not paying their bills, a decrease in sales, unexpected payroll problems, and surprise expenses. Many small businesses have needs for additional funds. This is especially true in the messy economic times Americans have recently experienced.

Small business lines of credit are what are known as “revolving” accounts. This means that you can borrow from the credit line and add to it when you want. When you borrow from your credit line, you will need to make payments every month to pay off your balance. As long as you stay within the predetermined credit limit, you can borrow more at a later date. Many small business owners like credit lines because they get interest rates that were higher than the prime lending rate in the U.S. What this means for business owners is that small business lines of credit end up being cheaper than business credit cards.

How Small Business Owners Can Get a Line Of Credit

Before you apply for a small business line of credit, there are some things that you will need to put into place. Following these six tips can give you a better chance of successfully applying for a business credit line.

  1. Good Credit HistoryWhen small business owners start out, they will often experience cash flow issues. Even though you might make money from the very start, that money will often go towards payroll, inventory, and operations. Therefore, building up a credit history is of the utmost experience. Open up a business bank account. Once you do this, pay every bill on time, establish one or more phone lines, and open accounts with utility companies. Paying every bill on time will help you establish credit.
  2. Research LendersLook at a few online lenders to learn about their interest rates and loan terms. Consider your current bank as they could give you a good deal on credit lines. If your credit isn’t excellent, online lenders can often give you a credit line if you meet all of their other qualifications.
  3. Have A Positive Cash FlowIf you want an unsecured line of credit, you will need to demonstrate positive cash flow. Lenders will review all aspects of your business because they will not want to give funds to someone who will not be able to repay them.
  4. Be Responsible With Your Credit CardsNever use your personal credit cards for business expenses. Not only will maxed out credit cards hurt your score, they will not look good in the eyes of potential lenders. Maxed out credit cards will also increase the cost of borrowing money if you get approved for the credit line.
  5. Start Off Small If You MustIf your credit score isn’t that high, start with a credit line with a smaller amount. Ensure that you make all of your payments in a timely manner. Once you establish a good credit history, you can ask your lender to upgrade your credit line.
  6. Don’t Apply If You Really Need The MoneyMost lenders will only give you money if you don’t really need it. Lenders want to give capital to businesses with positive cash flow. In other words, you can’t have a desperate need for the money. When you have a positive cash flow, you will be in a position to pay back the funds in a timely manner and you will establish a good history with your lender. This will come in handy if you need a larger line of credit in the future.

Why You Should Consider Business Credit & Capital For Your Funding Needs

Business Credit & Capital gives small business owners the opportunity to do their work without needing to worry about obtaining money when they need it. Small business owners can apply for a business advance in minutes. Even applicants with a less-than-perfect credit history can obtain funding from Business Credit & Capital.

Business owners love working with Business Credit & Capital because they can use the funding in any way that they choose. They can also pay back the advance with a percentage from their sales. Because of BCC, small business owners across the United States can follow their dreams in a way that won’t leave them in massive amounts of debt.

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The Many Tax Credits Available for Businesses

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Tax credits are an important part of doing business. They are a way for a company to save money on their tax obligations. Many businesses are not aware of all the tax credits they may qualify to receive. It’s important to understand there is a difference between a tax credit and tax deduction.

Tax Credits
A tax deduction is designed to decrease the amount of a company’s taxable income. This means for every dollar a company has in a tax deduction, the amount of income they will pay tax on lowers. This is determined by a company’s tax bracket. Tax credits decrease the actual amount of tax a company will be required to pay. Every dollar a company gets in a tax credit will decrease a dollar in tax that a company may be required to pay.

Work Opportunity Tax Credit (WOTC)
This is available to companies who hire members of certain groups as well as qualified veterans. To qualify for this tax credit, a company must hire a full-time worker who qualifies under the WOTC. A business will receive a credit that is equal to approximately 40 percent of the worker’s first years wages. This can be as much as $6,000. Should a company hire a disabled veteran, the credit may be as much as $9,600.

Employer-Provided Child Care Tax Credit (EPCCTC)
A business will qualify for this tax credit if it directly pays for the child cares cost of its employee’s children. The credit equals 25 percent of child care costs. A company can get a credit of up to $150,000 annually for each employee. If the company is incorporated, and the owner’s partner is also and an employee, they may also qualify for the same EPCCTC provided to the company’s employees.

Notebook with tax credit sign on a table. Business concept.Disabled Access Credit
This tax credit is provided to a business that renovates its premises so that it is more accessible to all individuals with disabilities. This needs to be done in accordance with the requirements set forth by the Americans with Disabilities Act (ADA) A small business will qualify for this credit if its gross revenue is under a million dollars, and it employs less than 30 full-time employees during the tax year. This credit covers approximately 50 percent of the initial $10,000 of qualified expenses associated with the renovation. The maximum credit is $5,000.

Business Health Credit
A business is able to obtain a credit for up to 50 percent of health insurance premiums it pays for their employees. In order to qualify for this credit, a company must pay health insurance premiums for their employees. These health plans must be qualified through the Small Business Health Options Program (SHOP) marketplace. If not, the health plan must qualify for an exception. This credit is offered to eligible employers for two tax years that run consecutively.

Research Tax Credit (RTC)
This is a basic credit that equals up to 20 percent of a businesses expenses for qualified research expenses. A company is able to choose to use qualified research expenses that are more than 50 percent of its average for the three prior years.

Alternative Motor Vehicle Credit (AMVC)
A company is able to get a tax credit of up to $8,000 for the purchase of vehicles that are operated on an alternative fuel source. The AMVC does not apply to any electric vehicles or hybrids because they utilize conventional fuel sources. The IRS, at this time, only recognizes vehicles that utilize hydrogen fuel-cell technology such as the FCX Clarity that is manufactured by Honda

Welfare-to-Work Expenses Credit (WTWEC)
This is a business credit available to companies that hire employees who historically face significant barriers to employment. Some of the barriers are a lack of transportation, education. Other barriers are child-care needs, disabilities and more. The WTWEC is determined on wages paid to the employees. This can provide a company with up to a $9,000 savings during a two-year period.

Qualified Research Expense Credit (QREC)
This is designed to encourage companies to participate in domestic research and development. How the QREC is calculated is complex. It is also able to provide a company with substantial tax savings. The definition of the QREC is broad but involves a number of different activities. This could be developing new or improving formulas, products as well as prototypes and models. Building or improving manufacturing facilities. Developing new technology, environmental testing, certification testing and more are ways a company can benefit from the QREC.

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Small Business Finance Management Tips

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Finance Management and Your Small Business

Finances are a big part of any business. It doesn’t matter if you head a large and established business that has hundreds of employees. It doesn’t matter if you’re at the helm of a small business that’s just starting out, either. It’s 100 percent crucial to stay updated on your finances at all times. If you want to take charge of your small business’ finances, these tips may provide you with helpful insight that can get things moving in the right direction. The most successful businesses out there are the ones that always stay on top of all financial matters, zero exceptions.

Focus on Cash Management

Cash flow management can sometimes be tough for people who run small businesses. Failure to manage cash flow well can be disastrous to small businesses and to businesses in general. It can often even lead to significant errors that can negatively affect the way that others view them. Your goal should be to put together precise and prompt financial statements. These are crucial. These statements are imperative for the decision-making process. They’re also imperative for efficient fiscal task coordination. If you’re thinking about perhaps applying for a loan in the future, financial statements can also help. Thorough financial statements may open your small business up to the additional capital. Sloppy financial documents can make your business look bad.

Think About Getting a Credit Card for Your Business

Think carefully about getting a credit card for your business. Don’t make a rash or impulsive decision. Credit cards aren’t necessarily beneficial for all small businesses. If you want to select a good credit card for your business, however, you should perhaps opt for one that offers rewards anytime you spend money. It can help to choose one that divides business and personal purchases. Up-and-coming businesses can enjoy numerous credit card advantages. Credit cards can help them establish financial strength. They can also help them with credit.

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Invest in a Reliable Accounting System

If you want to control your small business’ finances, you should invest in a reliable accounting system that depends on the cloud. Accounting applications can combine many pertinent services that can increase organization for your business. These applications can handle balance sheet tweaks. They can in many ways function similarly to actual workers. That can be invaluable for businesses that could use a little extra assistance in the staffing department.

Concentrate on Learning

A good financial background can be a serious advantage for people who want to control their small business’ finances properly. That’s why you should do whatever you can to learn about finance. Take the time to learn about financial statements. If you can read these statements with ease and confidence, you’re off to a good start. These statements can provide you with a lot of useful information. They discuss the roots of your money. They discuss where it has been before. They discuss its current location as well. If you want to understand the ins and outs of income and cash flow statements alike, a deep knowledge of financial statements is crucial. Financial statements can also be advantageous for people who want to have strong grasps of balance sheets and how they work.

Reduce Your Costs

Cost reduction is key to small business finance management success. You should do whatever you can to manage business expenses. You should also make sure, however, that you never interfere with strong customer service and satisfaction during the process. This is a particularly important concept for businesses that are on the smaller side. It’s particularly important for businesses that are looking to expand as well. Your objective should be to do anything in your power to minimize costs and save money. Don’t waste money on costly business trips. Aim to negotiate with distant companies through phone or online video chat, instead.

Reach Out to Business Credit & Capital Today

If you’re looking for professional assistance with small business finance management, Business Credit & Capital can offer it to you. We’re a company that focuses on business loans for many different types of clients in the service, dining and retail fields. Contact us without delay for more information.