Monthly Archives: December 2016

Tips to Get Cash Fast

If you experience an emergency and need cash fast for your business, you won’t have the leisure to apply for an SBA loan or seek out new investors. You may not have personal savings to help you out.
There are options for obtaining a quick infusion of cash for your company. Review all of the options and determine which is best for you after taking costs and other factors into account. Here are five ways you can get money within a day or so.

How to Get Cash Fast

1. Use Online Lenders
With some sites, you can complete an application in minutes and obtain cash in as short as 24 hours if you provide all required financial paperwork immediately. Usually, however, it takes a few days for approval. Some sources to consider:
CashCall
Kabbage
OnDeck
Check out the borrowing limits for which you can qualify. Keep in mind the cost of this borrowing, which may not be cheap.

2. Factor Your Receivables
Usually you have to wait 30 days, 45 days, 60 days, or more to collect on your invoices. However, you can factor them for quick cash. You’ll receive a discounted amount for the invoices you factor, so the cash you receive reflects the factor’s fee (typically 2 percent or more, depending on your industry, your customers, etc.).
It usually takes several days to set up an account with a factor. Once this has been done, you can submit invoices at any time and typically receive cash within 24 hours.

3. Use Your Business Line of Credit
If you have a line of credit in place, you can take cash from it at any time up to the extent of your line. You pay interest only on the portion of the line that you use.
The size of your line of credit depends on the typical loan criteria. These include capital or what your company is worth, capacity to carry debt, collateral that can be sold if you don’t repay the loan, and character, including the number of years in business, whether there’s been any prior bankruptcy, and other factors.
Caution: Some online lenders advertise 24-hour approval for a line of credit, but it’s really only a factoring variation, based on your invoices.

4. Cash Advance from Your Credit Card
Use your business credit card’s cash advance amount if you need money quickly. You can tap into your limit through an ATM or obtain more than the ATM’s limit in the bank.
The cost of money through a cash advance is steep, so use this option only as a last resort and only for a small amount of cash.

5. Borrow from Your 401(k)
If your company has a 401(k) plan in which you participate and the plan lets participants take loans, then this may be a good source of quick money. The maximum amount you can borrow is 50 percent of your vested account balance or $50,000, whichever is less. If your vested account balance is less than $10,000, you can borrow up to $10,000.
The loan takes only as long as the administrator needs to process it. If you’re the administrator, this can be very quick.

The good news about his type of loan is that interest can be very low and the repayment can be spread over five years, with no prepayment penalty if you want to pay it off sooner. The bad news is a reduction in your retirement savings while the funds are out of the plan, and you can’t deduct the interest.

Know More How Small Business Owners Saving for Retirement

Retirement no longer means relegating to a restful armchair. Today retirement is the biggest risk facing entrepreneurs who are already struggling with the challenges of running a small business in a fiercely competitive market. Here are six simple steps to help you tackle the retirement planning process right from the start:

Getting The Retirement Planning Process Started
Set Up an Investment Plan
The challenges of maintaining a profitable business often take a toll on retirement savings. As entrepreneurs are not a part of any 401(k) plan, creating a retirement reserve often takes a back seat. Small business owners can set up retirement accounts that act as a buffer if your business does not churn out the results you expected from it down the line.

Know What Your Monthly Payments Will Be Like When You Retire
Busy entrepreneurs can easily access their social security statement from anywhere online. A social security statement should give you a fair idea of what you are likely to receive during the retirement period and this will put you in a better position to take a judicious decision regarding tax planning.

Make a Major Contribution Every Month
Financial advisors have always recommended small business owners to start saving early on and make a major contribution following a lucrative business deal or a windfall. Always take some chips off the table and transfer them to your retirement reserve.

Be Sure To Pick A Profitable Savings Vehicle
Financial experts are of the opinion that SEP IRAs, SIMPLE IRAs and solo 401(k)s make excellent investment options for small business owners. You may consult a financial advisor to determine which plan is well-suited to your unique situation.
A solo 401(k) makes a perfect plan for those who have no employees.

The savings incentive match plan for employees is another popular option where the overhead cost is much lower and employer is required to make a contribution of 3% of the compensation for every eligible employee.

SEP or Simplified Employee Pension Plan comes with a much higher contribution limit which goes up to 25% of each employee’s compensation.

While most small business owners typically prefer a simple IRA as it lightens the upfront cost; they eventually roll it over to a 401(k) when expenses become easy to manage. SEP IRAs are recommended for partnership firms or businesses running with fewer employees.

Diversify the Financial Portfolio
Age and risk tolerance play a crucial role in the investment portfolio when allocating funds to equities and bonds. It is advisable to consult a financial advisor on tax planning when investing in REITs and gold.

Consider the Critical Aspects That Affect Retirement Planning
65 is no longer the magical number for many as a variety of factors come into play when you are about to retire.
Many societal, personal and government issues can influence your decision to retire early. Government programs and policies, inflation and your existing business situation play a vital role in determining a financially viable age to retire. Another critical factor that has a profound impact on your retirement planning is life expectancy. Given the recent increase in longevity, you cannot afford to ignore the probability of outliving your savings.

It is never too early to start the retirement planning process especially if you are running your own business. With a solid savings plan in place, every entrepreneur can enjoy financial freedom during retirement and continue to build the business over time. All you need to do is follow these six tips and make smarter investment choices using your workable wealth.

Some Lending Options for Small Business Capital

Getting financing for a new business venture or a new product is always a challenge for the small business owners.
According to the U.S. Small Business Administration (SBA), about half to two-thirds of small businesses seek financing from a number of sources, including non-banking institutions.

In recent years, a number of alternative lending options have become popular for small businesses interested in accessing extra capital. Check out this list of cash advance small business loan sources.

Small Business Capital Options

Kabbage: Lines of Credit
Kabbage provides working capital online. It offers working capital or small loans payable over six months. The average line of credit is between $2000 and $100,000. Unlike traditional lenders, Kabbage approves loans by looking at real-life data, not just the credit score. It’s worth mentioning that the approval process is quite transparent and takes only a few minutes.
On the flip side, however, you need to pay back your loans within six months.
To be eligible, you need to be in business for one year or more, and make over $50,000 a year in revenue. To date, Kabbage has funded over $1 billion to help small businesses grow.

OnDeck: Short- and Long-Term Loans
Launched in 2007, OnDeck offers short-term loans of up to $250,000 and long-term loans of up to $500,000. The company also provides lines of up to $100,000 in flexible cash.
OnDeck doesn’t require high credit scores and its application process can be completed in about 10 minutes. More importantly, you can receive funding in just 24 hours. Another big plus is the transparency of the loan terms.

On the flipside, however, OnDeck doesn’t offer unsecured loans. So, when a business takes a term loan from OnDeck, a general lien is placed on the business’ assets until the loan is paid off. The business owner also needs to give a personal guarantee for the loan.
To qualify, you must be in business for at least a year, have a 500+ credit score, and annual revenue of more than $100,000 in the past 12 months.

SnapCap: Unsecured Business Loans
SnapCap offers unsecured loans of between $5,000 and $600,000 to small businesses. Unlike traditional lending that requires collateral to obtain financing, an unsecured loan — also known as a merchant loan — uses other factors to judge a loan application. These may include your credit score and sales performance.

SnapCap has a simplified lending process and a turnaround time of 48 hours. The company also offers some of the most competitive short-term loan options available today.
To qualify, you will have to share some information about you and your business. Some of the questions that you should expect to answer include:
• When did you start your business?
• What industry are you in?
• How much revenue did the business generate last year?
Fundation: Working Capital Loans
Fundation offers conventional business loans of up to $500,000. The online application process takes about 10 minutes, followed by an immediate initial credit analysis. The analysis ascertains whether or not you are a good fit for the loan. Once your application is approved, it takes three business days for the funds to reach your account.
The biggest challenge with Fundation is its eligibility criteria. If your business has not been operational for at least two years and doesn’t generate at least $100,000 a year, your application will be automatically rejected.
Your financials will play a major role in determining whether or not your application is approved. In addition to other criteria mentioned above, you should have at least three employees and good personal credit.

RapidAdvance: Merchant Cash Advance
RapidAdvance offers a merchant cash advance program best-suited for businesses that may not want, or cannot qualify for a traditional loan. The funds can be used to expand, renovate or reduce debt.

The company has a simple and short application process. Once you contact them, you will be required to provide some basic information about your business. Based on your inputs, you will receive a preliminary funding amount. If you are fine with the estimate, you will be required to provide more details about your business. The approval process takes about 24 hours and funds are made available within just three days.
The biggest limitation is that RapidAdvance does not work with online businesses. Moreover, it doesn’t offer prepayment discounts, unlike other lenders.
To qualify, your business should have a physical location. You must also be in business for at least three months and process at least $2,500 a month in Visa and MasterCard receivables. It is necessary to have at least one year left on your lease.

Accion: Microloans
Accion has been in the business of lending funds to small business for over 20 years. For businesses that need funds to grow, Accion offers loans in the range of $500-$100,000. The microloans can be used to purchase inventory, upgrade equipment or as operating capital.
It takes about 15 minutes to apply for the small business loan. You just need to provide basic information about your business to get started.

The biggest downside is that you need to provide collateral and equity to be eligible for the loan. Collateral could include real estate, if free and clear.
To qualify, you have to show your ability to repay the debt as well as proof of your income and revenue. You should also be in good standing with creditors and have a credit score of 500 or higher.

Biz2Credit: Online Loan
Biz2Credit is an online marketplace for small business funding. Its proprietary platform, serving more than 1.6 million users, connects borrowers to sources of capital based on each company’s unique profile.
Biz2Credit enables businesses to secure loans from $5,000 to $1 million. The application process is fairly simple. You have to complete a single application to get the best financing options available for your business.
A key highlight of the Biz2Credit platform is that it provides customizable financing programs for businesses that do not have a great credit score.
The only downside is that the funding process may take up to four weeks.

To be eligible, you should be in business for at least two years, be profitable and have a solid credit history. Startup loans are also available to entrepreneurs who are in the early stages of their ventures.