Simply Junior

If you have been struggling with trying to stay in business, you’re not alone. The slow economy has been responsible for affecting the lives of millions, for the US and everywhere else. American’s President Obama has seen what homeowners, companies, and consumers are going through, and put forth a $787 billion stimulus in February of 2009 to promote economic growth.

Among those who are pegged to receive assistance through funding and the addition of jobs include scientific research groups, schools, energy programs, Medicaid, and contractors. But what about small business owners? Are you eligible? How do you go about the application process?

The good news is that since everyone is facing financial strains, the Stimulus has a program that targets small businesses. Receiving assistance can make the difference in having your company rise above to the level of bigger corporations with whom you might have been finding difficult to compete. Here’s what you can do to benefit from the Stimulus:

The Small Business Administration (SBA) has come up with a way for you to be guaranteed for up to a $35,000 loan without having to pay for it for up to 12 months. They have $426,000,000 in government funding to use toward helping small businesses like yours, so that it keep you from losing your company.

Have high interest rates kept you from obtaining a loan in the past? You no longer have to worry about that. Under the Stimulus, you are able to refinance a small business loan of up to $10,000,000 if it was issued before the Stimulus went into affect.

Did you know that you can increase your company’s private capital or investments from 300% or $15 million, depending on the lesser amount, to 300% or $150 million as the maximum? This will enable your business to become established in the marketplace and local community, so that you can continue to grow your business using Stimulus money for marketing, professional development, or applying the funds to areas of your company that need it most.

There is a number one rule in building business credit and that is to pay your bills on time. This shows other businesses, particularly investors and suppliers that the process of business is being carried out the way it should be. But even more importantly it allows banks and financial institutions to see for themselves whether or not the business is operating under good financial parameters.

When a bank or other lending institution receives a request for a business loan one of the first things they do is check the business credit score with Experian Business, Equifax Business or Dun and Bradstreet. The reports a creditor can buy from these companies will immediately identify any outstanding business liabilities as well as showing how well a company has been doing to pay their bills and keep their suppliers happy.

The other important factor in building business credit is to for the owners or principals of a business to look after their own personal finances. When a bank lends money in the form of a business loan or business line of credit they have to satisfy themselves that the corporate officers of the business are themselves creditworthy. In fact under the Small Business Administration guidelines this is one prerequisite for banks to access funds under the Small Business Act.

Another element in building business credit is to keep good financial records and have a solid accounting system that not only tracks accounts payable and accounts receivable, but is also capable of making forecasts and projections about financing and cash flow problems before they arise. One of the major reasons that small businesses fail is that they do not properly track their financial situation so even if a business never has to borrow money, it will need to be financially well organized just to survive.

A final way in building business credit is to create a business credit track record. A business can do this by borrowing small amounts of money or arranging limited financing using personal guarantees. This shows the banks that a business is not afraid to invest in itself and is prepared to back that up with their own personal monies. Just like getting a car loan and making all twenty four payments on time at the bank will improve your personal credit so too will meeting your financial commitments in a business arrangement improve and build your business credit.

Building business credit is a process that will evolve over a period of time. Just staying in business past the first two years will improve your business credit outlook. So too will keeping your suppliers happy and ensuring that your financial recording systems are accurate and up to date. The longer that you pay your bills on time the greater your business credit will grow. Look after the small things in your business and building your business line of credit will look after itself. Learn more about building business credit at http://www.corporatecredit.biz

Small business online refers to resources available to small business owners via the Internet. Many financial companies provide information on funding resources, business laws and terms, and management advice for small businesses. These sites enable business owners to make sound business decisions to increase the likelihood of their success.

One of the main reasons individuals looking for business online resources is to find information on ways to finance a start-up or existing business. Most lenders, including commercial banks, the Small Business Administration (SBA), and non-traditional financial companies, now provide detailed information regarding the different funding options provided. With these sites, business owners can find out if they qualify for a certain loan and compare loan terms to other available financing options. These lenders typically provide secure online loan applications as well, making the approval process faster. However, for loans that require any documentation, these may have to be faxed or mailed to the lender before the approval process can begin.

Small business online lenders also provide financial management advice to growing small businesses. From other financial websites, entrepreneurs may also be able to access glossaries of common business terms, lists of business laws, and the most up-to-date news, including stock reports. Many of these websites may provide forums that allow entrepreneurs to connect to others with similar interests to exchange ideas, opinions, and advice on business matters. Connecting to fellow business owners can help entrepreneurs to make better business decisions.

A small business online resource is a website designed to aid small business owners in every aspect of entrepreneurship, including finances and management. Most lenders, including the Small Business Administration (SBA), commercial banks, credit unions, and non-traditional loan providers, offer websites to inform business owners on different types of loans and their requirements. Other websites are run by financial companies who specialize in assisting businesses with financial counseling and management tips and advice.

A lender’s small business online resource typically lists all available loans and the requirements needed to apply for one of these loans. These websites may also allow business owners to apply via a secure online application to accelerate the approval process. However, if a loan requires financial documentation, these may have to be faxed or otherwise sent to the loan provider before the approval process can begin. If a business owner already receives funding from a lender, he or she may be able to access information regarding that funding online. Borrowers can check interest rates, repayment plans, and the amount still owed.

Other small business online resources provide financial counseling and management tips to help businesses succeed. These websites offer step-by-step guides for accounting processes and business plans, glossaries for common business terms, and hundreds of articles with ideas on how to improve profitability. Business owners may also be able to join a forum to give and receive feedback amongst fellow entrepreneurs.

One recent poll asked entrepreneurs what they personally believe affects the success or failure of a startup company. The 549 founders came from all kinds of industries: computing, electronics, health care, aerospace and defense.

The top most critical success factors included learning from their mistakes and their successes, previous work experience, a good strong management team and good luck. 98 percent said prior work experience was a very important factor.

Some of the most common questions asked on the government’s Small Business Administration (SBA) website are: How do I get a small business loan… or grant? How do I get started in a business? How do I find an investor for my business? What are the interest rates, and terms or fees that the SBA requires on its Guarantee Loan program?

As small business entrepreneurs head into 2010, following are some real tried and true financial aids that can help any business grow.

Do not waste money anymore. By using good financial strategies, you can stick to the plan to help lower operating expenses. Review your expenses to make sure you are not paying double for anything. Just like public companies, review the year in quarters (Q1: January through March) and then set aside time each quarter to review your financials. You will most certainly find areas to cut back.

For example: Do you rent or lease a car or truck? Did you know that a company vehicle is best purchased because they can be depreciated on your company tax returns. Plus you’ll get a higher return on your investment after the vehicle has been paid off, than leasing. However, think about leasing your computers, which is usually a tax deduction, so that you can always trade them in for newer technology when the time comes.

Now more popular than ever before, another financial business strategy is to begin factoring your outstanding invoices. An invoice that won’t be paid for 60 to 90 days isn’t doing your company any good today. However if you find a factoring company to factor one or more of your outstanding invoices, you can use the money wisely to invest in your business and grow faster. Many factors today do what is called “single invoice factoring” where they will spot one invoice at a time.

Accounts receivable factoring is particularly helpful if you need cash in a hurry because once a factor receives your application and reviews your invoices, you can receive payment within as little as 24 to 48 hours after they have pre-qualified the vendor that owes you the money. Remember your credit isn’t checked, but the vendor that owes you the money will be pre-qualified by the factor.

Factoring companies, just like a bank or any commercial financial institution, charges a fee for its services. A factoring company will first examine your invoices and check the creditworthiness of your customers. You should be prepared to show the factor these following: 1) A current financial statement; 2) An accounts receivable aging report; 3) A certificate of incorporation or partnership; agreement; 4) Proof of insurance; and 5) Invoices and other business documents.

A factor will take charge of collecting your receivables, so they will want to make sure your customers pay their invoices on time. Once you have selected which invoices the factor will purchase, they will typically pay you an advance; for example, the factor might pay you 80 percent of the total amount of your invoices and then reimburse you the other 20 percent once your customers pays the invoices.

A factor will take anywhere from 3 percent to 7 percent or more of the total that they collect. Factors’ fees vary depending on the size of your invoices, your customers’ creditworthiness and the number of days (30/60/90) until the invoice is due.