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Small Business Administration Business Loan Programs (Ventures with the SBA Book 1) - Kindle edition by Howard Whetzel, daythrougpuihardve.ml The Small Business Administration (SBA) administers several programs to support small businesses, including loan guaranty and venture capital programs to enhance small business Want to know our Editors' picks for the best books of the month? EASY SBA #1 Step-by-step guide to apply for a Small Business Loan.
About Charles H. Charles H.
He began his career in city management and taught and sold for the Dale Carnegie organization in Chicago. A business line of credit gives you capital to draw upon to meet a variety of business needs. Once established, you may draw on your line of credit as you would a personal credit card. You can use this capital for whatever your business needs—to buy inventory, handle seasonal cash flows, pay off other debts, or address almost any other business need.
Applying for an equipment loan can be a quick, streamlined way to access funds to purchase computers, machinery, vehicles, or virtually any other equipment for your business. Similar to a car loan, the equipment itself acts as collateral for the loan. If delayed payments from clients are seriously endangering your cash flow, invoice financing is a great option to get your receivables back on track. A merchant cash advance is a lump sum payment of liquid capital.
The downside to a merchant cash advance is expense and payment frequency. The daily deductions from your business sales can significantly eat into your cash flow. However, in addition to being fast and easy to qualify for, a merchant cash advance can be a great fit for seasonal businesses that might struggle to make regular daily, weekly, or monthly payments during their slower sales months.
Ultimately, this decision depends on a number of factors which will vary from business to business. Create a realistic budget for your business for the length of your desired loan, and then come up with a number that meets your needs. As you may have noticed above, the different types of loans suit different spending purposes.
If you have a seasonal business, that may change the type of financing that works best for your needs. Which loan option can you afford? Use our debt service ratio calculator to determine the size of loan your business can reasonably take on. Of course, it would be ideal to shop around and choose the perfect debt financing option with the perfect interest rate. But the reality is that your options may be limited by your ability to qualify.
Relative to other financing options, there are distinct advantages and disadvantages to funding your business using debt financing. The main advantage of debt financing relative to equity financing is that you maintain complete control of your business. A lender is helping you fund your business, but they have no say in day-to-day operations.
With equity financing, on the other hand, your investor becomes a co-owner of the business. This means that they may want some say in the direction of the business, given that they stand to make or lose money depending on how the business performs. Another benefit of debt financing is that the interest payments you pay are tax deductible. This deduction is available to all types of business owners, including sole proprietors, partnerships, and S-corporations.
In addition, many of the costs of financing a loan, such as origination fees, are also tax deductible. These tax advantages could also stand to lower your interest rate. Finally, debt financing is simply easier to acquire than equity financing or a small business grant. Typically, equity financing is reserved for young, high-growth businesses that project to bring in a high amount of revenue very quickly. Think of companies like Uber or Airbnb.
Furthermore, small business grants are typically reserved for select groups, such as minorities, veterans, or businesses in the science or health fields. Debt financing, on the other hand, is a funding options available to businesses of all shapes on sizes. This means that the borrower is personally responsible for paying back the loan. Therefore if your business hits a rough patch and you end up defaulting on your loan, the lender can seize your house, personal savings, and more. Depending on the terms of your loan, you may also find it difficult to grow your business while making monthly payments on your loan.
Furthermore, if you have a loan with a variable interest rate, the amount you end up owing month-to-month could fluctuate, which could have an impact on your cash flow. Applying for large sums of debt financing can also have a negative impact on your credit rating. The complexity and length of the application process varies widely depending on your lender and loan product.
However, all lending applications are designed to answer the same question: Will you be able to repay your business loan? It is recommended that new business owners obtain legal and accounting advice in the course of setting-up and operating their business. There are many forms of legal structure you may choose for your business.
Firms electing to incorporate should contact the Secretary of State for the required forms. Call or visit their website at www. This means an organizational meeting must be held, stock issued, directors and officers elected, by-laws adopted, all of which must be written up in a minute book.
If you incorporate, you must be sure to complete organization. Corporations are also required to register with the State Tax Commission for corporate income tax and the franchise tax Form Call their Jackson office at or visit their website at www.
There are three main SBA loan programs which help a wide variety of small businesses obtain debt financing:. Before launching your business, make sure to visit www. Follow MoneyCrashers. Keep in mind that the SBA does not directly loan money to businesses. On the other hand, a HELOC allows you to borrow up to a specified sum as needed, paying interest only on the amount actually borrowed.
For information, call toll-free - or visit their website at www. Employers must also require employees to complete the withholding exemption certificate. Federal forms and publications can be obtained from the IRS at or their website at www. Mississippi has a graduated tax rate, which is the same for individuals and businesses. Obtain this from the IRS office or the web at www. Telephone assistance is available for Businesses at , 7 a. Monday through Friday. This form guides the employer in determining how much federal income tax to withhold from wages.
W-4 form is available at www.
Other taxes, e. Insure you are aware of record keeping requirements, what to report, when to file tax returns, and how to make payments. The following IRS publications and more are provided online at www. Call their Jackson office at from 8a. All categories of labor are not covered under this law.
Some counties do not have a zoning ordinance, but the owner of a new business should check to see if there are zoning requirements. If a business is to be located in a new or remodeled building inside the corporate limits of a city, the owner must get a city building permit before construction or remodeling is initiated. If a business is to be located in a new or remodeled building outside of the corporate limits of a city, check to see of a county building permit is required before beginning construction or remodeling.
Some counties require building permits. An owner of a new business must get a city license from the City Tax Collector if the business is located within the city limits. An owner of a new business must obtain a county license from the County Tax Collector if the business is located outside city limits. Contact their office at or find the office nearest to you online at www.