The Balance Sheet, Inc.

Bookkeeping Company | Tax Service

Accountants In West Palm Beach

(561) 842-1304

5725 Corporate Way, Suite 205
West Palm Beach, FL 33407

You are here: Home / Archives for Personal Finance

What You Should Know About Small Business Loans

By

What You Should Know About Small Business Loans

Small Business significantly contribute to the economic development of the United States. In addition to their business challenges, they often run into issues acquiring loans. According to research, the failure rate of small businesses is very high and lack of finance is the major cause of it.

  • R. Dickenson reported in “Business Failure Rate,” American Journal of Small Business that about 33 percent of small businesses discontinue within their first year of operation.
  • About 67 percent of small businesses fail within their first five years of operation.
  • G. Nadu reported in “Profiles of Survivors and Non-survivors of New Business Starts” that better financing would improve the success rate of small businesses.
  • The success of a small business is directly proportional to the availability of adequate finance.

 How Do Small Business Loans Work?

Lenders consider the following things before approving small business loan:

  • Credit scores above 650-700 is fine, but doesn’t guarantee a loan. 700-800 is the recommended minimum score.
  • Personal debt payments should not be more than 33 percent of gross monthly income.
  • Businesses that have been operational for more than two 2 years and have good reputation can often get unsecured working capital lines and term loans.
  • A rating of your company is critical to measure industry risk-based on the government standard industrial classification codes.
  • The better the cash flow, the brighter the chance of getting a loan as it supports your ability to repay the loan.

 Below are a few things to keep in mind when applying for a small business loan:

  1. Lenders give loans to those whom they know and trust. Build a relationship with them and let them know about your company before asking for a loan.
  2. Decide why you need a loan. Is it for genuine reasons, like financing some equipment for your business, or real estate for an office?  Or are your reasons trivial, such as trying to finance ongoing losses or purchasing unnecessary business assets? Keep in mind that lenders like veritable reasons with concrete terms.
  3. Amount of Money Needed. Underestimating the money required leads to problems due to lack of working capital, while overestimation makes lenders doubt your credibility. Be sure to make a reasonable estimate supported by calculated monetary projections.
  4. Typical documents required for a small business loan are: 
  • Personal Background: previous addresses, names used, criminal record, educational background.
  • Resumes: evidence of management or business experience.
  • Sound Business Plan: this is a critical document that should underline a complete set of projected financial statements, including profit and loss, in addition to cash flow and a balance sheet.
  • Personal Credit Report: obtain one from all three major consumer credit rating agencies.
  • Business Credit Report if you are already in business.
  • Income Tax Returns: be sure to include the previous 3 years.
  • Financial statements for owners who have more than a 20 percent stake in business.
  • Collateral for loans involving higher risk factors for default.

Legal Documents: include business licenses, articles of incorporation, and copies of contracts you have with any third parties, etc.

  •  Small Business Loan Requirements

  • Maxine Taylor, the power behind the accounting company, The Balance Sheet, Inc. puts forward her views on the topic:  

    Small Business Loan

  • “While I am not an advocate going of debt, sometimes it becomes necessary for small businesses.  Loans should be for growth, adding new services, not for operating.  If you need a loan for day to day operations, then you need to revisit your business plan and pricing.”
  • Her firm (https://www.taxaccountingbookkeeping.com) has helped business owners in and around West Palm Beach, Florida for over 20 years. The goal: to help these businesses grow strong and clean of financial issues.

Read More >

5 Tips for Successful Financial Statement Preparation Services

By

Financial Statement Preparation Services

If you need financial statements prepared, you should use a professional accountant.

The financial statements of companies usually include the following: income statements, balance sheets, statements of retained earnings and cash flow, and other financial summaries.

How to Find Great Financial Statement Preparation Services

The best way to deal with financial statements is to hire an accountant. The following tips will help you find a qualified professional accountant to prepare your financial statements.

  1. Research and receive a referral. Ask business colleagues, your bank or an attorney to refer you to a skilled accountant. You can usually find information published by the Society of Certified Public Accountants in your state. Remember that you need a reliable professional for financial statement preparation services.
  2. Interview all the candidates. You will need two meetings with the accountants – one at your site and one at theirs.

Since there are three categories of accounting services, you should know for sure that the accountant you hire can deals with financial statement preparation, specifically with the type of report you need.

  1. Make sure that the accountant’s style is compatible with yours. Ask the candidates how they would handle situations relevant to your business.
  2. Ask about their fee. Accounting companies usually charge per hour. Still, there are others that work with a monthly retainer. Make a comparison between the fees of the accounting companies and choose the one that fits your budget.

Your decision should not be based only on the price.  The accountant who charges higher is usually more experienced and able to work better and faster than an inexperienced accountant who charges less in order to attract clients.

  1. Ask for references. When you receive references and call the companies the accountant has worked for, you will find out valuable information about how their professionalism. A lack of references is a red flag. It could mean that either the candidate is inexperienced or that his/her work is not satisfying.

You can find the right accountant for financial statement preparation if you do your research. Hiring an accountant with references and good professional reputation can save you money in the long run.

Learning How To Invest After Divorce

By

Although divorce is never a pleasant experience, with a little perspective it can be viewed as yet another unexpected opportunity to redirect your financial future,” says expert stock market trader and founder of the Wealthy Investor program, Tyrone Jackson. Jackson teaches Hollywood actors and anyone who’s interested in obtaining a financial education about how to invest.

While the proceedings of a divorce are devastating they can provide new unconsidered opportunities for the divorced individuals. Once they move past attorney’s fees and the splitting of assets, there’s one final thing they must consider: their financial life post-divorce. The reality is that there are many shocking and unexpected life experiences. With a positive mindset, self-directed investors who have learned how to invest and manage their own money can create wealth and residual income for life.

According to Jackson, men and women can experience very different challenges post-divorce. Generally speaking men are filled with resentment. They often feel the burn of having to liquidate their retirement accounts, split assets and pay both alimony and child support. Under these circumstances, learning how to invest and create monthly residual income through trading stocks online can help ease the financial burden and aid in their financial recovery.

On the other hand, women are often left with an unexpected and unanticipated lump sum of cash. They are open to the idea of investing but don’t know how. For some, this is the first time they have ever had to take care of themselves. Even if that is not the case, learning how to invest along with everything else that must be done can be a daunting thought but can go a long way towards insuring a healthy financial future.

See full article >>

Jump Start Your College Savings

By

Through May 31, enter the 529 College Savings Day Giveaway to win a $5,000 college savings account from Virginia529 College Savings Plan (Virginia529), the independent state agency which sponsors Virginia’s 529 programs.

In celebration of 529 College Savings Day (529 Day), May 29, Virginia529 will award two $5,000 accounts, one to a current and one to a new account holder. 529 Day is a national campaign to raise awareness of the advantages of saving for higher education through tax-advantaged 529 plans.

Earnings in 529 plans, named after the section of the IRS code which provides their tax advantages, are free from state and federal income taxes when used for qualified higher education expenses. The funds can be used at eligible public and private colleges worldwide, including many kinds of training and certification programs.

In addition, Virginia taxpayers may deduct from individual state taxable income up to $4,000 of contributions per year per Virginia529 account.

Virginia529 offers four tax-advantaged college savings programs, including two investment programs, a prepaid tuition program and an FDIC-insured high-yield savings account program available through BB&T and Union First Market Bank®. The minimum contribution to open an account is $25.

The $5,000 accounts are part of more than $15,000 in college savings Virginia529 will award for 529 Day. In addition, babies born closest to 5:29 p.m. on May 29 at participating hospitals will win $529 accounts.

Learn more about 529 Day and enter the giveaway at Virginia529.com/529day.