Q: What are a few key things I need to know to be financially sound while growing my own business? And what are SBA loans?
A: There are 3 keys to being financially "sound" while your business is growing.
1-Use Quickbooks or some sort of accounting software that you understand and have an expert teach you how to prepare P/L statements, Balance sheets. Bankers will not even begin to take you seriously until you master the accounting piece of your business. I personally prefer Quickbooks because of its ease of use and portability to offsite computers, online help, and back ups for your accountant.
2- Learn to use a spreadsheet for budgets, goals, cost accounting, and general growth projections. Understanding spreadsheets can help you drill down into the very core of your business and determine actual costs of goods and services so that you can make a profit.
3- Make a profit and pay taxes. A successful businessman once told me "noone ever went broke paying taxes." A business that pays its fair share of taxes is a REAL business and real businesses can borrow money from bankers in order to grow. Along with this, consider ADP for your payroll and State and Fed tax withholding filings. ADP is inexpensive and easy to use online. If they make an error, it is on them, not you.
SBA (Small Business Administration) loans are available to qualified businesses with federal government guarantees to the Lending Bank.
SBA loans can be used for buying an existing business, growth and expansion, new construction, equipment purchases, etc.
If you get the run around from your current bank (most bankers hate SBA loans because they do not know how to structure them), go to a BANK that specializes in them. Do not go to a packaging company unless it is your LAST resort since they charge a hefty fee up front and then must find a bank to fund your request.
If you are not careful you could find yourself paying the fee and never getting the loan.
Q: My wife and I recently got a divorce. We were both on the deed to the house but I quit claimed it to her in the divorce…..I have now moved to another city and want to buy a new home. The marital home mortgage is still showing up on my credit report and it keeps me from qualifying for a new mortgage. What do I do?
A: Have the ex-spouse refinance the marital home mortgage in her name only and that gets you off the note so you can qualify for a new mortgage. I suggest addressing this in the divorce decree and not waiting until afterwards.
Q: How safe is online banking? I still write checks because I am afraid of identity theft.
A: Online and mobile banking with direct bill pay can save you lots of time and paperwork. As far as safety, keep in mind that FDIC insured institutions must go through IT audits annually to insure safety and soundness. Smaller community banks appear to be less likely targets of cyber theft than the large megabanks and can respond much quicker to potential problems. The security systems and measures are the same, but the sheer size difference actually makes smaller Banks safer platform for web based banking.
