Category Archives: Financial Tips
Types of Small Business Loans
Running a small business comes with its own set of challenges. The business needs cash for smooth operation and expansion. Small business loans provide businesses with financial resources and enable them to compete with big companies in the same industry.
There is an overwhelming number of small business loans Charlotte NC. These loans differ in their purpose, interest rates, duration, processing time, and loan amounts.
Choosing the wrong kind of loan can have detrimental effects on your business. The processing time can be longer than expected, and you may lose on opportunities, or the loan amount may not fit your requirement.
Hence, there is a need for adequate research and assessment of your business needs before you apply for any of these loans.
Different types of small business loans that can help your business are listed below.
1. Term loan
Term loans are one of the most common financing options for small businesses. You can use these types of loans for a variety of purposes like equipment purchase of working capital needs. The loans need to be paid over a predetermined term along with a fixed interest rate. The loan may require a personal guarantee or collateral.
2. A business line of credit
Another popular small business loan in Charlotte, NC, is a business line of credit. Rather than providing a lump sum loan amount, it provides you access to a sum of money that you can withdraw as and when you need it.
The loan provides you with flexibility as you pay interest only on the amount withdrawn. This is a suitable financing option when you are unsure about the exact amount of money you need.
3. SBA loan
Small Business Administration loans are suitable for businesses looking for a low-cost government-backed financing alternative. SBA is not a lending institution. However, it guarantees a part of your loan, which encourages banks and other lenders by reducing their risk.
SBA loans are low-interest loans with a longer repayment period. However, the loan has numerous qualification criteria and is paper-intensive. Also, the loan may take longer to process compared to other financing options.
4. Invoice factoring
Invoice factoring is suitable for businesses facing a shortage of cash due to unpaid invoices. The business can receive a percentage of its unpaid invoice value upfront. The receivables are used as collateral, and the lender collects them on your behalf.
These small business loans in Charlotte, NC, can help you manage your working capital needs. However, the loan rates can be comparatively higher. The lender charges a certain percentage as fees till your debtors make the payment.
5. Equipment financing
Equipment financing is a small business loan that allows you to acquire equipment and machinery for your business without investing any capital. The financing option does not create any encumbrance on your personal or business property.
The equipment itself acts as the collateral for the loan. These loans have a faster processing time and favorable interest rates in comparison to other small business loans in Charlotte, NC.
6. Merchant cash advances
Merchant cash advances are another popular small business loan in Charlotte, NC. In this financing option, you receive a lump sum of cash up front that can be used to cover any business-related expenses.
You borrow the money against your future sales. The payment can be made as a portion of your card sales, or the money can be deducted from your bank account on a daily or weekly basis.
The benefit of this financing option is that the payment depends on your sales. Hence, when the business is slow, you pay less, and when the revenue is on a rise, you pay more. However, this financing option can be more expensive than other types of business loans.
These are some of the financing options for small businesses and can help them meet their need for cash to finance operating expenses or invest in capital assets.
Four Top Insights on Offshore Asset Protection and the Best Tax Professional to Hire to Set it up
Is offshore asset protection still possible? With the erosion of Swiss banking secrecy, the IRS is strongly against “secret” foreign accounts, and with the Americans receiving jail sentences for non-compliant bank accounts at HSBC and UBS, one might think it’s no longer a viable action plan. However, it is workable—provided it’s done correctly.
Offshore asset protection is effective against civil creditors if the offshore structure is tax compliant. In this post we’re going to look at four top insights on offshore asset protection.
Four Top Insights on Offshore Asset Protection
What is offshore asset protection? Before we get into insights, lets begin with the basics. Asset protection is simply the safeguarding of assets and wealth from attack by unsecured creditors. These assets can include the following:
• Liquid assets
• Real estate (commercial and residential)
• Professional practices
• Securities
• Art
• Jewelry
• Cars
• Boats
• Intellectual property
Offshore asset protection involves physically transferring pretty much anything of value to a foreign country. Of those listed above that can’t be moved is real estate. It is protected by turning it into cash, and then the funds are transferred offshore. This process of offshore asset protection is called equity stripping because the equity is separated from the property and then protected.
1. Offshore Asset Protection – How to Protect Your Assets
Protecting your assets involves transferring them to a corporation or trust that is created in a stable, secure, and confidential foreign country. The offshore asset protection strategy should be set up by a professional who is experienced with foreign assets. However, it’s imperative that the trust or corporation is set up carefully, and it must follow IRS rules governing foreign asset control.
2. Offshore Asset Protection – Stable, Secure and Confidential
Not all foreign countries are the same when it comes to stability, security, and confidentiality. This is why it’s important to ensure the safety of your offshore assets with well credentialed trustees, international banking institutions, and government officials at the highest levels in foreign countries. To ensure your foreign assets aren’t at risk, any offshore asset protection professional you hire must have long-standing relationships in the country you’re dealing with.
Some common foreign jurisdictions for offshore asset protection are the Cook Islands, the Isle of Man, the Cayman Islands, and Bermuda. This is because of their low (or non-) tax policies, their lack of currency restrictions, and their stable governments.
3. Offshore Asset Protection – The Foreign Trust
The advantages of a foreign trust is that its assets are insulated from civil law suits, matrimonial claims, non-payment of taxes, and forced inheritance. But it’s important to note that just about every offshore jurisdiction will honor treaties that require reciprocal enforcement of criminal convictions. Even though transferring assets to a foreign trust gives valuable offshore asset protection advantages to you, it’s important to note that there are arduous reporting requirements imposed by the small Business Job Protection Act of 1996; and the IRS is ready to impose substantial penalties to make sure these trusts aren’t used to avoid paying taxes.
As an American taxpayer, you must confine your offshore asset protection trust strategy exclusively to protecting your assets; and you must be ready to comply with the IRS taxation and reporting requirements. To ensure that your offshore asset protection strategy stays in place, all you have to do is continue to comply with United States tax compliancy.
4. Offshore Asset Protection – Be Aware of Tax Traps
Due to a need for asset protection, people have been securing their assets in countries that are considered tax havens for several years – since the 1970s. There was a need to guard personal wealth because of aggressive litigants, creditors, tax minimization, and ex-spouses. The United States government took note of this and started a campaign to stop this flow of wealth to offshore countries. Legislation was implemented to discourage American investors from sending their wealth overseas, creating the need for new offshore asset protection strategies.
To set up an offshore asset protection plan, it’s important to hire a qualified professional who is aware of the tax traps that are set up by the IRS. They must be experienced in U.S. tax law, as well as in international and domestic asset protection law.
Offshore asset protection is not as easy as it was, but it’s still a viable option, provided it’s set up correctly by an experienced professional. In other words, the trust must strictly follow the rules and regulations of the IRS, and the transaction must be done in a secure, stable, and confidential foreign country.
Outsourced Accounting Services: Helping You Focus on Your Business
In order to take appropriate strategic business plans, understanding inventory position, sales tending, collection status, or banking position; accounting statement is the only source that offers you reports at a glance. You simply cannot step forward in your business and make it running in the right track without proper accounting, despite the fact that it’s not the key activity area of your business. Typically, preparing financial statement is a time consuming job and requires collection of all necessary papers, updating them in system complying with accounting principles. Being a small business operator it is also not viable for you to appoint a full time accountant while outsourcing expert accounting service is a popular trend.
Focus on Core Business
The key limitations of small business are time, money, and work force; which is why; it needs active involvement of its owner in various areas like selection of vendors, building market strategy, market development, supervising labors, keeping track with distribution and more.
Typically, accounting is not his job while neglecting accounting and keeping it pending will appear monumental in due course of time and due to non-compliance of maintaining necessary registers it can even face legal consequences putting it in loss. Fitted with outsourced professional accounting services, owners can peacefully concentrate on core business areas that make the project profitably running.
Maintain Business Privacy
If you feel scary considering that outsourcing accounting services can expose the secrets of your financial date and company information, just change your misconception. Outsourcing services is the modern age business technique, which has been internationally accepted by high-profile multinational groups to small business houses.
The companies offer-outsourcing services are extremely professional and providing required services, be it accounting, software development, staffing, or management consultancy is the core of their business activity. The companies are highly sensitive to protect all business information and data backed by highly secured software application and encryption tools, which can hardly be accessed by a third party.
Minimize Internal Fraud
With a third party in accounts that check inventory, sales, collection, or funding, it is critical for your crooked employees to enter into pocketing or chain fraudulent activities, which is a very common experience of small business owners. Numbers of business even collapse due to internal fraud done by disloyal employees.
With outsourced accounting people, you can focus coolly into your core business keeping in mind that they are the sentry of your business. With their deep insight, long experience, and mechanisms, they can spot any kind of inconsistency in inventory or finance.
Conclusion
Thus, outsourcing accounting enables you to give better attention to your key competencies and core activity areas, while you need to sit with your accounting people from time to time to understand all about your business position, get advises as well on tax planning and so on.
How A CPA Firm Can Improve Your Business Finances
Managing money is a skill not everyone has. It requires a lot of knowledge, a solid education and certain amount of talent, not to mention an interest in numbers that only a few people truly have. Unfortunately, skill with money management is something absolutely necessary when it comes to running a business. This is true from small start-up companies all the way up to Fortune 500 juggernauts. One way that business owners and managers deal with the need for expert financial handling is to involve a CPA firm (short for Certified Public Accounting firm) in the day-to-day running of their business.
What Does A Public Accountant Do?
A CPA firm doesn’t just limit itself to one type of work. Anywhere that your company needs some additional expertise, they are able to contribute their advice and expertise to help guide you through the trickier waters of finance. Whether you need someone to handle everyday financial matters, or are just bringing in some extra help during a difficult, unusual or high-volume time, public accountants have the knowledge and the dedication to offset the burden of financial affairs. They can handle tax matters, financial planning, royalty management, foreign business affairs, licensing and a number of other vital procedures.
Who Needs a CPA Firm’s Help?
Simply put, every business can benefit from the assistance that a certified public accounting firm, or a CPA firm, can provide. A small business, even a successful one, needs every edge it can get, especially if it is in competition with larger businesses. Large corporations are dealing with money in more ways than one person could possibly be expected to manage on their own. Many businesses want to grow and can use the guidance that an experienced accountant can offer. Even businesses that are well-established and don’t feel the need to branch out can benefit from the help of an accountant, especially during tax season.
Contacting a CPA Firm
If you have made the decision to contact a CPA firm to see what they can do for you and your business, make certain to do your homework first. The Internet is an excellent resource to scope out an accounting firm’s reputation. It’s also helpful to contact a firm directly to better understand their particular areas of expertise. Some accounting firms are tailored to your type of business, and some accountants have particular talent with problem-solving the challenges you most need solved. Make certain that you take the time to find a reputable firm whose mission statement meshes with yours.
Helping You Make Money
Some people are put off of hiring a CPA firm because they cost money, and they are not cheap. As cliché as it sounds, the adage that “you have to spend money to make money” applies to businesses as well as to individuals. Investing the time, effort and money into a partnership with a certified public accountant will pay off in money saved as well as in money earned. See how your business’s finances can be improved and you might decide that a public accounting firm is the best business choice for you.
How Does A Licensing Audit Impact Revenue For Businesses?
Undertaking a royalty or licensing audit can identify any significant royalties not timely reported to the licensor. Some of the strongest reasons to perform an audit include obtaining all royalties which you are entitled to, inducing future compliance, determining any non-compliances, and determining whether an existing license agreement needs to be modified, adjusted or terminated.
What are royalty or licensing audits?
A royalty or licensing audit, in its simplest form, is a financial inspection that determines whether a licensee is paying the licensor the correct amount of royalty fees. An agreement has been entered into that clearly defines the royalties to be paid out and the terms or conditions associated with said agreement. Industries such technology, franchises, music, software and merchandising may require licensing audits. When an audit is requested, the cost can become extreme so there is a need to determine who will be responsible for paying the audit costs. In most agreements, underreporting defined above a determined threshold will lead to the licensee paying the audit costs.
Import of hiring an Accounting Firm
Hiring an accounting firm with staff experienced to undertake licensing audits will help businesses ensuring that they fully understand the impact of any license agreements, implications of complying or non-compliance, etc. They will work with a business to address their knowledge and understanding to ensure there is no unexplained underreporting of what is owed, that there aren’t any misunderstandings associated with what is covered by the technology being licensed, that clerical errors are avoided, that any transactions that do not reflect market conditions are reported, that incorrect used of exchange rates in international transactions are caught, etc. Finding these errors can work for or against a company. It may show that there are outstanding royalties due or it may show that a company who owns a license may not be receiving their full dues.
The licensing of assets, such as trademarks, proprietary processes, copyrights and other intellectual property, have become a dominant source of revenue and potential expense for many businesses. Relationships are forged through strong licensing agreements; however, said agreements require consistent and periodic review to verify that licensees adhere to contractual terms and licensors receive accurate payments. These agreements can be extremely challenging to understand due to all the nuances and therefore it is strongly advised that a small business hire a firm who can assist in licensing audits. Firms such as Miller Kaplan can conduct royalty and licensing audits for both individuals and companies, having experience in conducting licensing audits for products and industry areas such as film and television, theater, automotive, sports and technology.
In addition to addressing royalty issues, licensing audits, if done properly, can be undertaken to avoid disruption by ensuring a team is put in place that will address the whole audit planning, focusing on communication throughout the whole process, streamlining the investigation and keeping a close eye on the budget. Many organizations have staff members that are trained to know how to focus an investigation regardless of the mounds of data and the nuances of the licensing audit.
