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First blog post
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The Business of Budgeting your Business…
The Business of Budgeting your Business…
A budget? So, who needs a budget? You do-that’s who.
Unlike the government we actually need to balance our checkbooks. A budget allows you to identify spending habits, and allows your business (or personal) to make necessary adjustments and changes.
Don’t just be in business to stay in business-be in business to grow your business
There are many areas to delve into for a complete business plan, for practical purposes we will stick to budgeting and a few essentials.
Check list: All of this and more inside my 16-award winning book:
“the sexy little book of finance III” 2 books in one-Personal & Business
- Your budget should be on a spreadsheet in excel or another format so you can update.
- Personal budget and Business information should be part of your routine.
- Make copies of all serial numbers of vehicles, laptops, cell phones, or any other important information of equipment.
- Copies of any operators or employees who have access to any equipment, vehicles, should have their drivers license and insurance so you have the information and can check any expiration dates.
- Credit card numbers, expiration dates, and all employees who assigned a card
- Record of all policies or contracts
- Starting inventory and ending inventories (daily, weekly, monthly, and annually) or as deemed appropriate for your business model
- Bank loans, all financial information stored & backed up daily on a private server or encrypted cloud program
- ADD your own categories.
You should have a full marketing plan (in writing), websites with SEO search, game plan how are you going to market your product or services – internet-seminars-mailers-email campaigns-workshops-etc. If you are looking for money from a bank or lending institution all this will be necessary. Everybody thinks they can apply and get approved in 15 seconds with 3 little questions and nothing else to provide…SORRY, little things like bank statements, tax returns, personal financial statements (free on our website) just to mention a few things. You can see what else may be required on our website.
Now back to budgeting…
Month _________________ Beginning Cash Balance $ __________________________
Category Estimated Budget Actual Difference
Revenue/1099 _______________ _______________ _______________
Accounts Receivable _______________ _______________ _______________
Investment Income _______________ _______________ _______________
Interest Income _______________ _______________ _______________
Other _______________ _______________ _______________
Total Actual Income: _______________ _______________
EXPENSES
Rent/Lease _______________ _______________ _______________
Loans _______________ _______________ _______________
Accounts Payable _______________ _______________ _______________
Inventory Purchase _______________ _______________ _______________
Equipment Purchases _______________ _______________ _______________
Office Supplies _______________ _______________ _______________
Cell Phones _______________ _______________ _______________
Advertising _______________ _______________ _______________
Printing _______________ _______________ _______________
Postage _______________ _______________ _______________
Payroll _______________ _______________ _______________
Payroll Taxes _______________ _______________ _______________
Health Insurance _______________ _______________ _______________
Repairs/Maintenance _______________ _______________ _______________
Automobile Expense _______________ _______________ _______________
Gas/maintenance _______________ _______________ _______________
Auto Insurance _______________ _______________ _______________
Business Insurance _______________ _______________ _______________
Accounting fees _______________ _______________ _______________
Retirement contributions _______________ _______________ _______________
Web hosting _______________ _______________ _______________
Other _______________ _______________ _______________
Total Actual Expenses $ _________________________
Income_____________ minus Total Expenses_____________= Ending Balance_______
This does not post correctly…see it on our blog
Be Prepared-Be Informed-Be Successful
The last time I got instant gratification – I got food poisoning
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You Have the Right to Bear bridge Loans…
The problem for businesses in particular is the length of time it takes to obtain permanent financing like term loans, credit lines, mortgages and so on. Banks can take up to 6 months or longer to approve certain types of loans.
The right to bear bridge loans…
What?
A bridge loan is a type of short-term loan, typically taken out for a period of 2 weeks to 3 years pending the arrangement of larger or longer-term financing.
Bridge loans are interim financing (short term) for an individual or business until permanent financing obtained. Money from the new financing is generally used to “take out” (i.e. to pay back) the bridge loan, as well as other capital needs.
The problem for businesses in particular is the length of time it takes to obtain permanent financing like term loans, credit lines, mortgages and so on. Banks can take up to 6 months or longer to approve certain types of loans. That does not help anyone who needs to move quickly for cash. They generally turn to the secondary market-quick cash, factoring loans, etc. The cost of money there is very high and generally creates cash flow problems on paying back daily or weekly ACH payments from their bank accounts.
Bridge loans are typically more expensive than conventional financing, to compensate for the additional risk. Bridge loans typically have a higher interest rate, points, origination fees, and other costs that are amortized over a shorter period, and various fees and other “sweeteners” (such as equity participation by the lender in some loans) the good news is they are typically arranged quickly with relatively little documentation or lower credit requirements, and longer term more effective financing for the business or individual.
Bridge loans are often used for commercial real estate purchases to quickly close on a property, retrieve real estate from foreclosure, or take advantage of a short-term opportunity in order to secure long-term financing. Bridge loans on a property are typically paid back when the property is sold, refinanced with a traditional lender, the borrower’s creditworthiness improves, the property is improved or completed, or there is a specific improvement or change that allows a permanent or subsequent round of mortgage financing to occur. The timing issue may arise from project phases with different cash needs and risk profiles as much as ability to secure funding.
A bridge loan is similar to and overlaps with a hard money loan. Both are non-standard loans obtained due to short-term or unusual circumstances. The difference is that hard money refers to the lending source, usually an individual, investment pool, or private company that is not a bank in the business of making high risk, high interest loans, whereas a bridge loan is a short-term loan that “bridges the gap” between longer term loans that can take 6 months or more to finalize.
Typical terms of up to 12 months 2–4 points or more may be charged plus origination fees- probably 2 points or more. A bridge loan may be closed, meaning it is available for a predetermined time frame, or open in that there is no fixed payoff date (although there may be a required payoff after a certain time). An average is around a total of 6 points (6%). Which is usually much less than factoring and other secondary market loans with lower interest rates.
A bridge loan is often obtained by developers to carry a project while permit approval is sought. Because there is no guarantee the project will happen, the loan might be at a high interest rate and from a specialized lending source that will accept the risk. Once the project is fully entitled, it becomes eligible for loans from more conventional sources that are at lower-interest, for a longer term, and in a greater amount. A construction loan would then be obtained to take out the bridge loan and fund completion of the project.
A consumer is purchasing a new residence and plans to make a down payment with the proceeds from the sale of a currently owned home. The currently owned home will not close until after the close of the new residence. A bridge loan allows the buyer to take equity out of the current home and use it as down payment on the new residence, with the expectation that the current home will close within a short time frame and the bridge loan will be repaid.
A bridging loan can be used by a business to ensure continued smooth operation during a time when for example one senior partner wishes to leave while another wishes to continue the business. The bridging loan could be made based on the value of the company premises allowing funds to be raised via other sources for example a management buy in.
A property may be offered at a discount if the purchaser can complete quickly with the discount offsetting the costs of the short-term bridging loan used to complete. In auction property purchases where the purchaser has only 14–28 days to complete long term lending such as a buy to let mortgage may not be viable in that time frame whereas a bridging loan would be.
Bridge loans have many advantages, the risk is generally on the lender. One big advantage even though the interest rate is higher for a bridge loan the payments are usually interest only and the payments are very low. Most will require up to 6 months interest in escrow in advance-but you won’t have payments for 6 months plus they give you an option of rolling in the fees into the loan or deducting from the proceeds.
An example of how it works:
You apply for a 5-15-year term fully amortized with reasonable rates (based on your credit worthiness) once the bridge loan is in place. It will take about 90-120 days or more to get that in place.
You might get an offer that looks like this: offer is 11% interest only for 12 months with a monthly payment of about $3,000. They’ll want 6 months of interest held by lender to apply to monthly payments (around $3k per month – so $18k total. We can add it onto the loan for a $318k loan amount or they will fund $282k in proceeds out of the 300k. You won’t have to make any payments for 6 months.)
Understanding your finances gives you the power to obtain the best terms, rates, and options available. Do your homework, check your credit and correct BEFORE you apply for a loan. Going to the bank directly is not a very good option for a business, almost 90% of all small business loans from banks are declined. That is why they make companies like ours-we find them for you – you will never find yourself.
Read our blog on all the good things you need to do to get a loan…Be informed
Frank
Equifax Update…Use Extreme Caution
Equifax tweets sent victims to phishing site
Consumers were misdirected to a phishing website by Equifax itself (you can’t make this stuff up), according to various published reports. Over the last couple of weeks, tweets from the official Equifax account and signed by “Tim” directed a handful of Twitter users to a fake site instead of to the official Equifax site set up specifically to help concerned consumers, Equifaxsecurity2017.com.
The fake site used an address similar to the valid Equifax site. Instead of offering help, the site mocks Equifax for “using a domain that’s so easily impersonated by phishing sites.” Equifax has since deleted the tweets.
“All posts using the wrong link have been taken down,” a company spokesperson said. “We apologize for the confusion.”
Equifax has said that the personal information of 143 million consumers was potentially compromised in the cyberattack revealed by the company Sept. 7.
Equifax data breach and credit freeze: Beware these 3 scams
Consumers must be doubly vigilant following news of the massive mishap, experts warn. Even if you were wise enough to put an immediate fraud alert or credit freeze on your credit files, con artists are likely to go into hyperdrive finding new ways to take advantage of the hack and the publicity surrounding it.
“Don’t panic. But be vigilant,” said Susan Grant, director of consumer protection and privacy at the Consumer Federation of America. “With this breach, criminals have everything they need to victimize you.”
Here are three cons that experts believe will become prevalent in the aftermath of the Equifax (EFX) data breach.
Impostor scams (even after you’ve initiated a credit freeze)
The Federal Trade Commission warned Thursday that it expected a new wave of imposter scams, with con artists posing as representatives of Equifax “calling to verify your account information.” Given that Equifax is providing free credit monitoring and credit freezes in wake of its data breach, the call may sound legitimate, the agency warned. But don’t ever provide any privy information over the phone.
The purpose of this con is to get you to provide private information — including some of the information that was leaked in the breach — to a caller or via email. Even if your information was leaked, not all fraudsters are likely to have access to it.
Providing information to a new con artist over the phone simply increases the chance that you’ll be victimized. Of course, if your data wasn’t part of the Equifax attack, giving it out over the phone gives you a chance to join your friends and neighbors in having your data exposed on the dark web.
Information about the Equifax breach, including a simple tool to tell you whether the company believes your data was accessed in the breach, can be found on the company’s web site. Even if this tool indicates your data was spared, you can sign up for free credit monitoring for a year and Equifax will also waive any costs entailed in freezing your credit report, if you act within the next two months.
Tax identity theft that could rob you of your IRS refund
The Internal Revenue Service has been fighting tax identity theft for years. These scams involve criminals getting victims’ names, addresses and Social Security numbers to file fraudulent tax refund claims. The agency cites data breaches as one of the main ways that con artists get the relevant information to pull off tax identity theft.
Victims often get the first inkling of a problem when they file their annual tax returns and the IRS notifies them that another return has already been filed and their refund has been claimed. While the agency has a task force dedicated to these cons, they are complex and difficult to solve, often taking more than four months to investigate, according to the agency.
If your information was compromised in the data breach, make a point of filing your annual tax return promptly. And take immediate action if you are informed that more than one return was filed in your name; that you owe additional tax; or that IRS records indicate that you earned more than the amount of wage you reported.
What action should you take? File a police report and a fraud report with the FTC Identity Theft Hotline (877-438-4338). Also, complete IRS form 14039, the Identity Theft Affidavit. You may be forced to file your tax returns on paper in the meantime. If you do not get a prompt response from the IRS, call the Identity Protection Specialized Unit at 800-908-4490 for assistance.
Spear-phishing to crack your bank and brokerage accounts
The data made available through the Equifax breach is also likely to spur a wave of so-called “spear-phishing” scams that could put more than your credit at risk. Phishing scams are often unsophisticated email and phone cons aimed at getting you to reveal privy data, such as your Social Security number. Spear-phishing cons are far more sophisticated.
These use your real data — the type of data compromised in the Equifax breach — to mimic legitimate communication from your bank or broker. The email may urge you to click on a link or open a PDF file to check your account or verify a transaction. However, if you click on the link, you could be downloading malicious software on your computer that would allow the crook to hijack your system or record your keystrokes.
The best advice after the Equifax breach is to assume any such communication is suspect. If you get an email from your bank, broker or credit card issuer and believe it’s legitimate, visit the company’s website or call their toll-free number. Do not click on the link.
EQUIFAX – 143 Million breached half the US population…ouch
We are a Corporate & Individual agency for LifeLock® Identity Theft Solutions
Equifax with 143 million breached has created a national epidemic – and you will be 11 X more likely to have your identity stolen because of this.
How LifeLock Works
Give us a little information: birthdate, SSN, email, etc.
WE SCAN
We look for threats to your identity.
WE ALERT†
We alert you of suspicious threats by text, email, or phone.
WE RESTORE
If your identity is stolen, our U.S.-based team will work to fix it.
WE REIMBURSE
We’ll reimburse funds stolen due to identity theft up to the limit of your plan.
Our Million Dollar Protection™ Package
Watch our 1 minute video https://youtu.be/yPrFsuTh-Vw
As business you are a primary target, the average cost of a breach is around $100,000 per location! You need to add a level of protection that safeguards your employees, your business, and your clients. There are no hard costs to you the employer as it is a voluntary benefit-and IRS has approved as a non-taxable voluntary benefit.
Our program offers a 15% discount (already built in the pricing on our website)
We are SSL Certified-Malware Scanner-Google Blacklist-and McAfee protected.
Frank J. Eberhart, CEP®, RFC®, Author
Credit and small business…
Credit and small business
I know some of this seems redundant from previous blogs I have done, but, it seems I need to repeat some of the highpoints (or low points depending on how you look at it). Here is short summary of what you need to get together.
Remember this: Almost 90% of all bank loans get turned down.
- Check your credit BEFORE you apply. Places like www.creditchecktotal.com will give you all 3 bureaus.
- CORRECT or explain anything that is negative.
- Create a marketing and game plan (in writing to present)
- Create a BUDGET
- Complete a PFS (personal financial statement)
- 3 years business and tax returns
- 3 years personal tax returns
- Profit and loss statement
- Cash flow is one of the primary things lenders look for-generally most lenders give around 20% of annual sales
- List number of clients (lenders like lots of clients-low number of clients means high risk to a lender
- Get your SBSS score (small business scoring service). You can get this at Nav.com
- If you are looking for an SBA loan: the requirements are a minimum score of 140, most lenders will NOT provide a loan if SBSS score is under 160. The range is 0-300
- SBA loans are difficult to get and can be expensive and take up to 3 months or more to fund. So, if you are in a hurry look elsewhere that is why we offer short and long-term loans.
- Personal FICO score-0-840 most lenders want 650
- D-UN-N-S number (Dun and Bradstreet-100 as the highest a score of 80 is good-free
- Most secondary lenders (non-bank) have very short terms and require daily or weekly ACH payments form your bank
- DO NOT apply at several banks or lenders at once or keep applying-every time you do this it pulls down your credit score-you will not get a loan.
- Most lenders require a minimum of 3 – 6 months in business and do not do startups.
- Have a website, subscribe to places like Yoast (SEO), Rankcrew.com for backlinks, make sure it is HTTPS (secure) you can have the greatest website but who cares if nobody can find it.
- Have engaging content-you only have around 2 seconds or so for someone to keep looking or come back to your site (like this-a blog)
The old bait & switch,” get approved in seconds and get funded in hours”- in lending instant gratification can cost you a lot of money. High interest, short terms, and not as much as they promised or even turned down after they actually pull your credit.
We hope this helps you, our goal is always to help businesses and individuals who want to start a business.
We have realistic lending programs from established to start ups-Lendingcapital is a national direct lending platform.
Regards
Frank
We are SSL Certified,-Malware & Google Blacklist secured
So..when is the best time to take out a loan?
It’s summertime and business is snoring. But you still have bills and employees to pay!
As you spend your marketing and reserve dollars to keep up with all the things you have to pay-WHY?
The time to get a business loan or line of credit is not when you go crawling to the lending institution out of desperation, the time is now to prepare your budget for the fall when business picks up again-BUDGET (my book: “the sexy little book of finance III”-on my website gives you 2 books in one-personal and business)? YES you need one and you should follow it.
In addition I wrote my book Seminar Sales & Marketing Techniques in 2002 (also on my website under mission), it is probably more relevant today than back then. To many phishing, emails, robo calls, and texting. One on one-setting up marketing and successful seminars to increase business.
Time and time again we see this scenario, and in most cases the results are generally not what people are not looking for. Most loans fund rather quickly depending on what type (a commercial mortgage can take up to 6 months to close). But, the average is still around 2 weeks to one month to fund a loan of any kind at least a loan you can live with for interest and terms.
One thing we do on our website is tell you about how long it will take to fund the loan, in addition we let you know terms, requirements, and payment frequency so you can see what fits your time schedule for funding.
Anyways, at that point you know what you need to do, so do it. The see if you qualify for any of our loans is free and does not affect your credit.
Be prepared-be informed-be funded
Fueling business dreams since 1996
our website is SSL certified, malware scanner protected and Google black list protected for your security.
Business lending made easy..lol
As an advocate for small to mid-size businesses (I am one) I give a word of caution when shopping for a loan. DO NOT shop 2 or 3 lending or credit institutions at once, every time you go they pull your credit and you get a “ding”.
- Do your homework, Google can save you time and energy and money, shop on line for lenders who favor your type of business, i.e. best lenders for restaurants, machine shop, start up, poor credit etc. We actually do this for you with our vast pool of national lenders and partners.
- Go to credit agencies where you can get a full and free credit report without “a ding”-like Credit karma (free). We will use this report to shop for you-without all the “dings”
- Once you obtain your report see what you need to correct or challenge on any information in the report.
- Have a game plan, why you need the money, how it will help grow your business, or start your business.
- Correct BEFORE you apply, or at least have a reasonable explanation.
- Find a lender who will initially accept the credit report you have provided to see if you can qualify with that lender. We do that with our 30 second app-we shop multiple lenders, in most subprime (non-bank) lenders once they turn you down that’s it.
- Many lenders will have an on-line see if you qualify without affecting your credit (we do), it helps give you the direction for your next steps. The problem as stated above they are generally a single source self-funded group. So if they turn you down you need to start over-not good.
- If you are generally under 5 years in business and walk into a bank, you are turned down before you even speak, and your officer of the month is probably still in training so …you know where that goes.
- Make sure you have all your documentation in order (read our loan 101 on our website). Most get turned down because of paperwork. We underwrite our loans so we know what is missing and will help you obtain it. Plus, we know where to send the application, unlike most lenders we actually LOOK AT THE LOAN and YOU
- Make sure you can actually pay back the loan, use our calculators to see what your payments and amortization schedule will be, adjust to meet your cash flow.
Simple steps to help you obtain the financing necessary for your business…oh, and read the fine print before you sign.
Fueling Business Dreams since 1996
Frank J. Eberhart, CEP® RFC® Author
