Building Business Credit
We have compiled our Top 10 most common mistakes that businesses make when trying to establish their business credit or corporate credit.
1. Trying to cut costs by using your home address for
your business address.
2. Using a P.O. box or mail drop location for your business address.
3. Not having a separate business phone number from your home phone; also not having a fax number. Read the rest here »
April 15th is coming quickly. If you are not ready to submit your tax return the IRS does allow a six month extension. Here are four things you should know if you are planning on filing an extension.
1) File your tax return by April 15th even if you can not pay all of the taxes owed. If you need an extension because you can not pay all of your taxes then still file file. Do not request an extension. The IRS recommends for you to file your return on time and then pay as much as you can. This will reduce any penalty and interest charges for the amount you are able to pay. Read the rest here »
Those looking to form an LLC in California can choose either to hire a professional who specializes in the formation of Limited Liability Companies and Corporations, or you might decide to save a little bit of money and form the LLC yourself. If you choose to do the work yourself we have listed here a few things steps to take.
Paying state taxes might seem a little tricky since each entity in California has different tax rates. Understanding the tax rates can also help you decide if you want to Incorporate, setup an LLC, or set up a Partnership. Currently the LLC is taxed with a $800 per year and a world-wide gross receipts tax based on a current tax table. The C Corporation has a 8.84% net profits tax and the S Corporation has a 1.5% net profits tax. Read the rest here »
The Paydex score system with Dun and Bradstreet goes from 0 to 100. Although your Paydex score is not as important as your DnB rating your business, it is a very important start to building your business credit.
To receive an 80 Paydex score your business much have at least three vendors that report to DnB that you have paid your bill on time. Although this seems very easy since most businesses have far more than three vendors they deal with. The tricky part is finding three of your vendors that will actually take the time to report to DnB. Read the rest here »
Starting with the 2011 tax year, all payment providers were to issue the 1099-K forms to businesses and to the IRS. The 1099-K forms indicated gross sales processed through the payment provider.
Under this new IRS rule online electronic payment processors (such as PayPal & Amazon) as well as any credit card provider were required to submit a 1099-K for every seller that processed more than 200 transaction in a year and totaled at least $20,000.
With the 2012 tax year being the second year of the new tax law taking affect, the IRS is expected to look very closely as online sellers of all sizes for any discrepancies in gross sales figures. Read the rest here »
Small business owners have many aspects of their business to oversee and manage every day. Many ignore or don’t think about their business credit score, making the mistake of thinking it is not important. In reality your business credit score is a vital part of your business success and ability to expand your business down the road.
This is the perfect time to focus on your business credit score as the economy starts to recover. Banks are starting to ease on making small business loans and consumers are starting to spend more money.
The first thing you need to do is to check what your business credit report. Make it a habit to check it once or twice a year. You should schedule this, just as you would schedule your taxes and other business reports. Read the rest here »
The economy is still in constraint and the CPA firms are supposed to go through a flat season throughout 2012. There aren’t going to be any positive or negative outlook for the majority of the firms, as per reports. But, the question is what after this? What about the debts that these small businesses may have incurred till now. Paying off the debts incurred is perhaps the toughest part for one and all – may it be a person or a small business. However, the only good news for the small business owners is that the SBA 504 debt refinance rules have been revised, thereby making the refinance process easier for the businesses and the firms.
Refinance help for small business owners
The small business owners in majority have been hollering for help from the times of financial crisis. Now, it seems that the help is at your door, if you too are a small business owner. The Small Business Administration or the SBA of the US has introduced a new financing tool through the Certified Development Company or the CDC partners. This has been done so as to help the small businesses refinance the existing debts. These are supposed to be the ones that have high interest rates which might have been used mainly for the purpose of purchasing a place for business purpose.
The refinance opportunities may help the businesses change the high interest balloon debts to be changed to the low interest ones. This program is also supposed to allow the borrowers use the equity in the building for all forms of eligible business expenses. These expenses can be the likes of the working capital used for the inventory, the business equipments, for the building repairs, the other eligible business expenses and also the payrolls.
Moreover, navigating the SBA 504 Debt Refinance Loan is easy. Like, in case of a debt on an existent building that is an owner-occupied one (if 51% of the building occupancy by the company meets the eligibility), you can have the option to replace it with a 20 year SBA 504 Debt Refinance Loan. This is supposed to get authorized by the SBA and also funded through the MWSBF. This loan is supposed to again, constitute of 40 percent of the total amount which have been borrowed. The other 50 percent of the loan is supposed to come from a different financial institution, which is going to assume a first position with regards to the collateral. On the other hand, the SBA and the MWSBF is going to get the second mortgage position. The interest rate of this loan is going to get negotiated within a term range of 10 to that of 20 years. The other 10 percent of the loan is supposed to be left out, as the equity from the building.
According to the Walt Carbonell, the president of USTC, which at present has only 32 employs, “The SBA-504 refinance program came at the right time,” and he also said that “We were facing a significant balloon payment with our old loan. The refi offered a fixed rate over 20 years. It gives us more financial flexibility and allows us to allocate more dollars to initiative that will help the company grow and create new jobs.”
This new form of refinance has also been able to extend help to the US Technical Ceramics or the USTC – the manufacturer of structural ceramics. It was able to close down a loan on a recent basis using the SBA refinance program. They were able to take the benefit from a low interest rate loan while using the SBA 504 loan. With this refinancing program, it is now saving almost around $68,000 every month. In order to make its mark in the market, it may now have the opportunity to use this money for other extensive purposes; so as to gain competition in the market.
Large businesses have more complicated systems of functioning than smaller ones, so the process of growing is riskier. As an establishment grows, managers could lose a significant amount of control as they try to deal with the larger number of issues. Many companies set up detailed growth-control plans in order to deal with this troublesome situation. Read the rest here »
New wireless credit card processing devices and services are making it easier for mobile businesses to quickly accept payments. Mobile payment terminals are becoming more common, and the number of available devices and services available can make a decision difficult. Read the rest here »
A concept that new business owners need to understand is the difference between business bank accounts and merchant accounts. Business bank accounts are used as a means to dealing with the expenses of opening a business. Merchant accounts and merchant account providers deal only with processing credit and debit card transactions. Since few businesses these days are able to operate on a cash-only basis, even small business owners need a merchant account to accept credit or debit card payments from customers. Read the rest here »