Wednesday, June 28, 2017

What Does the Seattle Minimum Wage Mean for Business Owners Around the US?

The facts surrounding minimum wage increases are complex and confusing. Nevertheless, most Americans have managed to create a completely cut-and-dry discourse around the subject. For the most part, from laypeople to business owners to legislators, we are either for or against raising the minimum wage.

However, as recent surveys in Seattle have proven, the question of raising the minimum wage is far trickier than most are willing to admit. Since passing the Seattle Minimum Wage Ordinance in June 2014, the city has gradually increased its minimum wage to $13 an hour. The ordinance set the eventual minimum wage to be $15 an hour by the end of its two to four year implementation period—the exact timing depends on a company’s size.

Gradual Raise Allows for Detailed Research

This raise has been gradual and has allowed for economists to debrief with each incremental increase in the minimum wage. Reading the news in the wake of each incremental increase provides a good idea of how each step went.

In fact, articles from 2016 covering the effects of Seattle’s April 2015 minimum wage raise from $9.47 to $11 an hour are effusive in their optimism. In his article “Doomsayers Keep Getting It Wrong on Higher Minimum Wages” for Bloomberg, Barry Ritholtz wrote about the positive outcome of the incremental wage increase as proof that the naysayers totally got it wrong.

Indeed, as Ritholtz wrote, the city’s economy responded to the $11 minimum wage by flourishing. Unemployment fell, new restaurants opened, and “the city on the Puget Sound [was] booming.”

Nonetheless, there were still two more stages to the city’s minimum wage increase waiting to be put into place when Ritholtz wrote this gleaming review. Though the step of the ordinance that Ritholtz covered did indeed increase average low-wage worker earnings by about $72 every three months, the next step of the ordinance that a follow-up Bloomberg article covered didn’t yield such positive effects.

In fact, according to a recent survey by an economic research team at University of Washington, this next step of increasing the city’s minimum wage from $11 to $13 per hour at the very beginning of 2016 caused low-wage workers to earn a dismal $125 less every month. The increase in wages wasn’t enough to balance out a severe dip in employment that accompanied it.

A Well-Documented Sample

But how do we know all of this? Luckily, Seattle has access to a wealth of data that, along with this topical ordinance, makes it an ideal setting for a minimum wage case study. The study revealing the adverse effects of the most recent minimum wage jump was made possible thanks to the unusually thorough data collection of Washington state.

As the study writes, “Washington is one of four states in the US that collects not only data on earnings, but also on hours worked during the quarter. Employers are required to report actual hours worked for employees whose hours are tracked (i.e., hourly workers), and report either actual hours worked or total number of hours assuming a 40-hour workweek for employees whose hours are not tracked (i.e., salaried workers).”  

Because of this “unique dataset,” the University of Washington’s research team could measure the average hourly wage paid to low-wage workers, who they defined as workers earning less than $19 per hour. However, the data collected only allowed the research to include information from single-site firms.

So while the study, unlike prior minimum-wage studies like Card and Krueger’s study of restaurant workers’ wages, doesn’t have to rely on industry-specific proxies to represent all low-wage workers, its data was limited to employees whose firms have only one site.

Conveniently Disproportionate Focus on Small Business

However, this limitation for the overall study makes it all the more pertinent for small business owners not only in Seattle but also across the nation. Because the study’s sample doesn’t reach beyond single-site firms, the results overwhelmingly consider small businesses and, by extension, the $13 minimum wage’s impact on the small business’s employees and, even more, the small business’s hiring practices.

Because of this somewhat disproportionate look into of Seattle’s Minimum Wage Ordinance’s ramifications, this report shows us how a sample size that is comprised of mostly small businesses reacts to a mandated floor in employee hourly compensation. Though a higher minimum wage for low-wage workers might put more money in the workers’ pockets and therefore into the local economy, the $13 minimum wage in the end caused employers to hire less and to give fewer hours to low-wage workers.

Ultimately, because this most recent hike to $13—only stage two of three on Seattle’s road to $15—small businesses have had to alter their hiring practices by decreasing employee’s hours and by hiring fewer employees.

The ordinance’s second step, in relation to its first step, shows us the inevitable nuances of minimum wage implementation—though a slight change will improve the economy, a more drastic change will stunt employment, make low-wage workers earn way less, and eventually force them to spend less money in the local economy.

With another huge jump in the minimum wage looming—from $13 to $15—Seattle and its business owners will have to wait and see how it will further affect employment and spending.  

In the end, Seattle’s legislators need to decide whether the moral ideology behind a $15 minimum wage will be worth the potential further harm to the local economy and its most vulnerable workers.

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Can You Trust Your Accountant? If You See These Signs, the Answer Is No

According to the U.S. Bureau of Labor Statistics, 1,332,700 people in the US call themselves accountants, and according to the AICPA (American Institute of Certified Public Accountants), there are over 660,000 active CPAs.

With so many accountants out there, how do you know that you’re working with one you can trust?

According to the AICPA, 168 CPAs received disciplinary actions in 2016 and 78 have already been reprimanded in the 1st quarter of 2017.  Over 3,000 tax practitioners are listed as having received sanctions by the IRS in the past 25 years, according the website. We also hear horror stories in the news about individuals and organizations that have been financially ruined because the accountant they trusted mismanaged their funds or used them for personal gain.

These are signs you can look out for when working with your own accountant to help you recognize if there could be an issue.

They openly discuss other clients with you

The first sign that you shouldn’t trust your accountant is if they openly discuss another client’s business. Licensed accounting professionals such as CPAs, enrolled agents, tax attorneys, and certified bookkeepers are bound by a code of professional ethics that requires them to safeguard their clients’ identity and sensitive financial information from others.

While it’s perfectly acceptable for your accountant to relate a situation that you may be experiencing back to another client’s experience, they should never reveal the client’s name or provide details that could compromise the client’s identity.

Pay attention to how your accountant handles documents in their office. Are tax returns sitting in full view of visitors to the office? Are computer screens angled away from the view of passersby, or do they have privacy screens?

These types of details are important indicators to how an accountant does their daily work and how seriously they take their client’s confidentiality. If you can view another client’s bank statements or tax returns because they are left in full view, rest assured that others will have the opportunity to view yours.

They offer to “fudge” numbers to save you money or get a loan

Nobody likes to pay more on their tax return than they should, but a reputable and trustworthy accountant would never offer to fudge numbers on your returns or any other financial documents. If your accountant is willing to lie to the IRS or a financial institution on your behalf, not only are they breaking the law, breaching their code of professional ethics, but they are putting you at risk and should not be trusted. Further, if they are willing to lie on your behalf to others, you can bet they’d be willing to lie to you.

A trustworthy accountant knows how to maximize your deductions lawfully without falsifying your return and can advise you on how to better manage your finances in order to receive funding. The important thing to remember is that you’re ultimately legally responsible for the information that your accountant submits on your behalf.

They don’t answer your questions directly or to your satisfaction

You’ve hired your accountant because you expect them to provide advice and expertise to help you run your business. Your accountant should make every effort to answer your questions and thoroughly explain the reports and documents they are preparing. If your accountant pretends to know everything but can’t give you a straight answer, that could indicate they’re inadequately skilled in that area. A trustworthy accountant lets you know upfront what they do and don’t know and never tries to hide the scope of their knowledge.

Make sure that you thoroughly review any forms, documents, or reports with your accountant to make sure you fully understand what is being reported and what the numbers mean. If your accountant is dismissive or makes comments like “You don’t need to worry about that” without offering any reasoning behind the comment, you should raise an eyebrow. Ask them to explain it before you sign anything.

Your accountant should also return your phone calls and follow up with your questions in a timely manner. If you find yourself repeatedly asking the same questions without resolution, you should consider whether your accountant is qualified or has your best interests at heart.

They offer to sign documents or execute agreements on your behalf

Recently I read an article about a famous television star who is facing bankruptcy because her accountant mismanaged her finances. The mistake that this and other clients make is assigning total control to the accountant and not reviewing reports and statements. If your accountant pressures you into making them a signer on your bank or other accounts, or offers to sign tax returns or other binding contracts on your behalf, you should be wary of trusting them. Another warning sign to look for is if your accountant asks you to sign a blank form or check or doesn’t ask you to review the documents you are signing.

The accountant/client relationship should be built on a high level of trust. If you have the feeling that something isn’t right, follow your instincts and ask lots of questions. Make sure that you review and understand any payments or reports that are prepared and submitted by your accountant. A trustworthy accountant has your best interests at heart and does everything possible to make sure you feel confident in their abilities and the security of your personal and financial data.

Resources You Can Use

There are several resources you can use to check whether your accountant has any complaints or has been reprimanded by the AICPA or the IRS. Every quarter, the AICPA publishes a list of CPAs who have had disciplinary action taken against them. You can also search the IRS database of practitioners who have received disciplinary action over the past 25 years.

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Tuesday, June 27, 2017

Here Are the 6 Best Places to Find a Top Bookkeeper

You’ve decided it’s time to find a bookkeeper to handle your business’ books. Smart move! Handing off your bookkeeping to a professional lets you focus on running your business without having to do your bookkeeping during your “downtime.”

But where do you go to find a bookkeeper? How do you know if you have found someone qualified? Do you know what questions to ask prospective bookkeepers and bookkeeping firms? And do you know what questions prospective bookkeepers should ask you?

These are all excellent questions. Get the right answers, and you’ll find a bookkeeper who is perfect for your business. Before we get to those answers, though, we need to know one critical thing:

Why Do You Want a Bookkeeper?

This may seem like a silly question, but bookkeepers perform a broad range of duties. To ensure you find the right bookkeeper for your business, you must first decide what duties you want your bookkeeper to perform.

Do you only want your bookkeeper to record transactions and reconcile your bank and credit card accounts so that you can file a tax return at year-end? Or do you want a bookkeeper who can review your financial statements with you on a monthly basis?

Maybe you want to find a bookkeeper who can help you do some in-depth analysis of your financial statements and provide consulting services. Or maybe you want a bookkeeper who is available to speak with your customers or clients about billing issues.

Some of these duties are easily outsourced to bookkeeping firms or freelance bookkeepers. Others are better suited to an in-house bookkeeper. The duties you want your bookkeeper to handle for you determine where you go to find one.

Qualifying Your Prospective Bookkeeper

Considering all the duties bookkeepers perform, the prospect of qualifying a potential bookkeeper might seem daunting. Unless you are hiring an in-house bookkeeper, you can’t really ask for a résumé or references (Bookkeepers are professional service providers. You wouldn’t ask an attorney or a doctor for their résumé—bookkeepers should be afforded the same courtesy.).

You can, however, qualify prospective bookkeepers in other ways:

  • Ask the right questions. “How long have you been a bookkeeper?” and “How long have you been in business?” are two common questions, and the answers can tell you how experienced the prospective bookkeeper is. A better question, though, is, “How long do clients typically work with you?” You want to find a bookkeeper with low client turnover.
  • Does your industry require specialized knowledge? Ask the prospective bookkeeper if they have knowledge of your industry or the bookkeeping functions typical of your industry. Since you know your industry, you can spot someone who might be trying to tell you what you want to hear in order to sign you as a client.
  • Pay attention to the questions the prospective bookkeeper asks you. Some important ones are:
    • “What is your business’ entity structure?”
    • “Are you current on your tax filings?”
    • “What is the biggest pain point in your business, and how do you envision me helping you alleviate that pain?”
  • Expect a qualified bookkeeper to ask to review your existing bookkeeping file before providing a proposal. The prospective bookkeeper who also includes a request for your last completed business tax return in the list of items needed during the onboarding or transition phase gets bonus points. This indicates they ensure that clients’ books match their tax returns after they are prepared.
  • Speak with CPAs or enrolled agents (EAs) who have prepared tax returns using books prepared by your prospective bookkeeper. These tax professionals typically have advanced accounting knowledge, and they can help steer you away from less-qualified bookkeepers. A qualified bookkeeper should have no qualms about providing you with the names of CPAs and EAs familiar with their work.
  • You get what you pay for. Proceed with caution if your prospective bookkeeper seems to be quoting a bargain price to do your bookkeeping. You want to find a bookkeeper who is confident in their skills. Bookkeepers who charge less are typically either unsure of their skills, or they quickly become overwhelmed with the volume of work they must produce in order to sustain their lesser rate.

The 6 Best Places to Find a Top Bookkeeper

You’ve determined why you want a bookkeeper and how to qualify them. Now for the big question: How do you find a top bookkeeper? Fortunately, business owners are no longer at the mercy of the Yellow Pages, or even random Google searches or Craigslist. Following are the six best places to find a great bookkeeper:

1. Accounting software partner directories

Most accounting solutions provide certification programs for bookkeepers and accountants. If your bookkeeper is certified in your chosen accounting solution, then they’ll use that software to its fullest capacity, thereby providing more value to you. 

Partner directories aren’t just limited to core accounting solutions. Many add-on apps also offer certification courses and maintain partner directories. This makes it so you can find a bookkeeper who can address your business’ particular needs, using apps tailored to address those issues.

2. Industry associations

Some industry associations maintain lists of bookkeepers and accountants well-versed in the industry. Check with your association to see if such a list exists for your industry.

3. Personal recommendations

Even if your industry association does not maintain a list of bookkeepers and accountants with industry-specific knowledge, use community boards, Facebook groups, or other resources your industry does provide for recommendations from other members. Personal recommendations are a terrific way to find a bookkeeper, or any other professional for that matter.

4. Professional organizations for bookkeepers and accountants 

Truly great bookkeepers regularly invest in their education, and many join professional organizations to help them develop both as bookkeepers and as business owners. Organizations like ICBUSA, AIPB, and Profit First Professionals are good places to find a bookkeeper for your business.

5. Financial blogs and websites

Many bookkeepers share their knowledge by writing for financial blogs and websites. The next time you read an article about a particular issue you are facing in your business, check the byline. It might have been written by a bookkeeper who would love to work with you.

6. CPAs and EAs

While some tax professionals also do bookkeeping, many prefer to focus exclusively on taxation. These professionals typically have a list of great bookkeepers they recommend to their clients.


As business owners, it’s often hard to relinquish control of things in our businesses, even if those things fall far outside our strengths. It’s even harder when the thing you are letting go of is your business’ finances. Fortunately, finding a great bookkeeper isn’t a guessing game. It just takes some planning, asking the right questions, and knowing where to look.

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3 Options If You’re Looking for 0% APR Business Credit Cards

Business credit cards with 0% interest can be a great option for small business financing. You only borrow what you need, and you have a period of time to pay off your debts interest-free. On some credit cards, you can even earn rewards on your purchases.

And 0% APR credit cards are particularly appealing if you have a new business and want to pay for startup expenses like furnishing the office, getting your initial inventory, and other setup costs.

Here, we break down the best 0% APR credit cards for business owners to help your business get the funding it needs.

Chase Ink Business CashSM  (12 months of 0% interest on purchases and transfers)

The Chase Ink Business CashSM offers a one-two punch of a zero APR period and cold, hard cash-back rewards. You earn a $300 signup bonus when you spend $3,000 in the first three months—an attractive option if you need to make a big purchase and pay it off over time. And, of course, you’ll enjoy a 0% interest period of 12 months on purchases and balance transfers, after which your variable APR ranges from 13.99% to 19.99%, depending on creditworthiness. Finally, the card offers great ongoing rewards:

  • 5% cash back on office supplies and landline, cell phone, internet, and cable TV services (up to $25,000 spent combined annually)
  • 2% cash back on gas and restaurants (up to $25,000 spent combined annually)
  • Unlimited 1% cash back elsewhere

There’s no annual or additional employee card fee. Finally, you get a solid suite of perks including purchase protection, travel and emergency assistance, and auto rental insurance. The Ink Cash is one of the top 0% APR options out there for small businesses.

American Express SimplyCash® Plus: 9 months of 0% interest on purchases

The American Express SimplyCash® Plus also offers cash rewards alongside its zero-interest period. First, you’ll get nine months of 0% APR on purchases, with an ongoing APR of 12.99%, 17.99%, or 19.99%, depending on creditworthiness. As for ongoing rewards, you earn:

  • 5% cash back on the first $50,000 spent annually on office supplies and wireless phone services
  • 3% cash back on the first $50,000 spent annually on your choice of eight categories: airfare; hotels; car rentals; gas; restaurants; advertising; shipping charges; or computer hardware, software, and cloud computing purchases
  • Unlimited 1% cash back elsewhere

Like the Ink Cash, there’s no employee card or annual fee. Its 0% APR period is shorter, and there’s no signup bonus, but it’s a good choice for businesses that spend above the Ink’s $25,000 bonus rewards cap. If you spend at least $31,000 on office supplies and wireless phone services, or $35,000 on the 3% bonus category, you’ll earn more in SimplyCash ongoing rewards than you’d get from the Ink Cash signup bonus.

Citi Simplicity®: 21 months of 0% APR on purchases and transfers

Don’t discount the Citi Simplicity® just because it’s a personal, rather than business, credit card. It offers one of the longest zero APR periods out there, with 21 months of no interest on purchases or balance transfers. It doesn’t offer rewards, but it gives nine extra months of 0% interest than the Ink Cash does. If you need more than a year to pay off your debt, you should definitely consider the Simplicity.

Not only does it waive annual fees, it also offers no late fee or penalty APR (there is a balance transfer fee of $5 or 3% of the balance, whichever is higher). Since it’s a personal credit card, you can’t get employee cards, but you can add authorized users. It’s possible to use a personal card for business purposes (after all, the bank almost certainly requires a personal credit check and personal guarantee), and if you want to max out the 0% APR period, the Citi Simplicity is the way to go.

What happens if I can’t pay my bills?

Of course, you should also consider what happens if you can’t pay off your debts within the zero APR period—or you can’t pay them at all. There are many reasons to choose credit cards over other types of financing, like small business loans.

Since credit cards are revolving lines of credit, you only pay for what you need. Cards with a zero-APR period are even more attractive—and 0% cards that offer rewards are doubly so. However, if you can’t pay off your balance before the 0% APR period ends, your interest rate will probably be higher than a regular small business loan’s.

SBA-guaranteed loans have a maximum APR of 9% (as of June 2017) and, depending on the loan terms, can have caps as low as 6.5%. That’s much lower than the 12.99%-19.99% we see in the small business cards’ ongoing APR.

If you have a hefty balance when the 0% APR period ends, you’ll face steep interest charges unless you can transfer your balance or take out a lower-rate loan to pay off your debt. Consolidation is definitely an option, but if you can’t qualify for a loan once it’s time to apply, you’ll be in a tough situation.

If your business simply can’t pay your credit card balance, you’re personally still on the hook. In almost all cases, business credit cards require a personal guarantee—meaning you as the cardholder are liable for the debts, even if your business is an LLC. Unfortunately, if you have a credit card, you’re almost certainly going to assume liability. If this is a concern for you, you might want to consider a more traditional small business loan (though even those might ask for a personal guarantee).

That said, 0% APR credit cards are a great source of financing, particularly for businesses just getting off the ground. If you want a combination of great rewards, strong loan terms, and flexible financing, look no further.


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Monday, June 26, 2017

5 Ways Entrepreneurs Can Find Great and Loyal Talent

Your business is only as strong as its talent. Though it may be tempting to do everything yourself, you’ll eventually need great and loyal talent to take your visions and turn them into realities. Finding the right employees can be tough, but the process is worthwhile to build a strong and sustainable business. Here are... Read more

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New Poll: Do America’s Small Business Owners Approve of Trump?

When Donald Trump was elected in November 2016, there was a lot of speculation about whether or not he would be the leader small business owners desired. Since the Great Recession, there’s been much economic improvement for entrepreneurs, but many of America’s small businesses still struggle with issues like financing and government regulation.

Trump is a businessman—one of the most notorious of the 21st century—which made his election an exciting event for business owners. There was finally a president that would have an allegiance to business before politics. After the election in December, the NFIB’s read on small business sentiment jumped to its highest level since 2004.

But now that Trump is almost 6 months into his term, we wanted to check in to see where he really stands with small business owners.

What do business owners think about our current political climate now that Trump is in office? What’s their economic outlook for this year? What matters to them most in 2017?

To find out, Fundera and Qualtrics conducted a survey in May of this year, asking entrepreneurs across the country:

  • Do you approve of the Trump administration so far?
    Do you expect your local economy to improve or decline over the next year?
    How many employees do you plan to hire?

Whether it’s the current political climate, the stock market’s record high, the Fed’s rising interest rates, or the unprecedented Trump administration, small business owners are affected by it all.

Here’s what they had to say.

  • Small business owners have a lower approval rating for the Trump Administration than the general population does.
    • 34.72% of small business owners surveyed approve of the current presidential administration. This is a few points lower than the approval rating from the general population, which currently sits at 39.6%.
      Recent policy changes have the support of small business owners.
  • 37.16% of entrepreneurs surveyed support Trump’s changes to the tax code. While details are still being finalized on his plan, the proposed changes are something many members of America’s business community can stand behind.
    • Many small business owners support the repeal of the Affordable Care Act (also known as the ACA or Obamacare). While our study did not gauge whether they prefer Trumpcare to Obamacare, it confirmed that entrepreneurs are satisfied with a repeal of Obamacare.
  • Entrepreneurs are confident that the local and national economy will improve during 2017.
    • While confidence is strong at both a local and national level, our survey finds that entrepreneurs are most confident at the local level, with a confidence level of 50.37%.
  • Despite a tumultuous political environment, business owners remain hopeful that they will grow revenue and headcount this year.
    • Entrepreneurs express their strongest numbers in this category: 85% expect to grow revenue and 61% plan to hire new employees in the coming year.

Small Business Owners and the Trump Administration


Trump’s overall approval rating is currently at 39.6%, according to FiveThirtyEights latest calculation. Our poll was conducted in late May when the approval percentage from FiveThirtyEight was at 39.1%.

Our findings show that for small business owners, Trump’s approval rating is even lower than for the general population – roughly 4 points lower.

Only 34.72% of small business owners approve of the current administration, while 45.97% of small business owners don’t approve of the administration.

FiveThirtyEight shows a 55.5% disapproval rating (54.8% in late May) from small business owners—a difference of nearly 10 points.


This is a finding that we will track over the coming year. Just as the Trump administration’s approval rating has fluctuated over the first 6 months of the term— ranging from 38% to 47.8%—we expect this approval rating from small business owners to fluctuate as the administration proposes new legislation and approaches midterm elections.

Entrepreneur’s Perspective on Policy

Our study shows that 46% of small business owners surveyed do not approve of the Trump administration—we wanted to dig deeper into why.

What are these entrepreneurs’ opinions on legislative items proposed by the Trump administration over the past several months, such as tax policy and health care?

Changes to the tax code have a direct impact on small business owners as they affect both their bottom line and the benefits they receive from the government.

In April, the White House circulated a document outlining proposed tax cuts for businesses and individuals alike. While the finalized tax plan has yet to surface, the proposed plan indicated where the Trump administration hopes to make changes.

The tax plan includes the following relevant points for small businesses:

  • Set a 15% business tax rate
  • Repeal the 3.8% Obamacare tax that hits small businesses and investment income
  • Reduce the 7 tax brackets to 3 tax brackets of 10%, 25%, and 35%
  • Repeal the Alternative Minimum Tax and death tax

37.16% of small business owners think potential changes to the tax code will help their business. It is important to note that the responses of small business owners in this survey were based on their knowledge as of May 24, 2017—and any subsequent information on the tax plan would affect these numbers.

The results from our tax code question aligned with the June SurveyMonkey/CNBC poll. That survey found that 42% of business owners think Trump’s changes will have a positive effect on their business and 24% believe it will have a negative effect. Additionally, that survey found that small business owners overwhelmingly cited taxes as their number 1 concern while running their business.



On May 3, 2017, the U.S. House of Representatives passed the American Health Care Act (AHCA), intended to repeal and replace the Affordable Care Act (ACA). The house GOP health care bill calls for the elimination of many key provisions of the ACA, including the individual mandate, employer mandate, and certain taxes and subsidies for subgroups.  

Last Thursday, Senate Republicans introduced the draft of their plan, the Better Care Reconciliation Act. The current version of the Senate bill is similar to the House bill but with a few key differences including:

The Congressional Budget Office is reviewing the bill and is expected to release their score this week. Senate leadership has stated that they hope to vote on the bill before July 4.

So what’s the take of America’s business owners?

We were especially curious about small business owners’ reaction to this legislation, given that 1 in 5 consumers on the ACA marketplace are small business owners or self-employed individuals.

When asked how they viewed the repeal of ACA, 42.54% of business owners surveyed supported the repeal, while 21.27% were neutral on the issue.


Local & National Economic Outlook

Despite the high disapproval of the current administration, small business owners are optimistic that the national economy will improve. When asked if they expect the economy to improve or decline over the next year, 47.19% of small business owners were hopeful that it would improve and indicated a positive outlook.

This is an interesting finding because it’s a decrease of 5 points from the Bank of America Business Owner Report conducted in February 2017.



It’s important to look at the economic outlook at the local level as well. Small businesses are the lifeblood of communities across the country, and the key to building long-term economic growth starts with entrepreneurship in America’s communities.

When we asked small business owners about their local economies, we found that small business confidence in the local economy  is more than 3 points higher than confidence in the national economy. 50.37% of small business owners surveyed expect their local economy to improve over the next year.

Our data on this point aligns with the Bank of America Business Owner report from February 2017 that likewise found that 50% of small business owners expect their local economy to improve over the next 12 months.


Performance of Their Own Businesses

While economic outlook at the local and national level is something small business owners care deeply about, they remain hyper-focused on the performance of their businesses. We asked a series of questions to gauge their outlook for their own companies in 2017 and found that entrepreneurs are generally optimistic when it comes to growing their businesses in 2017.

When asked, “Do you expect to grow your revenue in 2017?” 85.09% of small business owners surveyed responded confidently.

This isn’t a surprising result, as other surveys have shown small business confidence to be at an all time high. The National Federation of Independent Business Owners conducts a monthly index tracking small business confidence—which has been at historically high levels for 6 straight months.

According to NFIB president and CEO Juanita Duggan, small business confidence is directly correlated with the new administration. In her most recent statement, she said,, “The remarkable surge in optimism that began last year right after the election shows no signs of slowing down.”


In terms of hiring plans, 97.06% of business owners surveyed plan to either keep their staff the same or grow their headcount during 2017.

Our study discovered that only 2.93% of small business owners have plans to decrease their staff.  

So while there’s uncertainty related to the current administration, small business owners remain confident in their ability to grow their revenue and maintain headcount through 2017.

The 2017 MetLife and U.S. Chamber of Commerce Small Business Index stated that roughly 1 in 3 small businesses expect to increase their staff in the next year. This in line with our survey’s finding that 35.7% intend to increase their staff during 2017.  


Of businesses that plan to increase their staff, we asked the follow-up question: “How many employees do you plan to hire?”

The majority of these growing businesses plan to hire more than 2 employees, with 42.47% planning to hire 6 or more employees.



Fundera and Qualtrics conducted a random survey of 409 small business owners and senior leadership at small businesses to examine the state of entrepreneurship in America. The survey was conducted online between May 24 and May 26, 2017.

Respondents were asked 79 questions across 5 categories: demographics, credit scores and credit cards, lending, lifestyle, and economic outlook. Certain questions qualified or disqualified respondents from receiving further questions in the survey.

389 respondents self-identified as a “small business owner,” while 20 respondents identified as a “VP-level or above at a small business.” Qualtrics defined a small business as a US-based firm with less than 500 employees.

To see the full demographic view of our respondents, see the module below:


Additional Resources

Trump Coverage

Fundera — Trump’s 2018 Budget: What do the Funding Cuts Mean for Your Small Business? Fundera — How Trumpcare Will Affect Your Small Business’s Health Care Options Fundera — Small Business Owners Advice to President Trump: Here’s How You Can Really Help Us Fundera — Small Business Owners Advice to President Trump: Here’s How You Can Really Help Us Fundera — What Happens to Small Business Lending If Trump Repeals Dodd-Frank? Fundera — If Trump Kills the Fiduciary Rule, What Does It Mean for Your Small Business? Fundera — Which Trump Plans Will Affect Your Small Business Most?

Fundera Reports

Fundera — New Study: The Best States for Women Entrepreneurs in 2017 Fundera — Gender Bias in Small Business: How People Unknowingly Judge Businesses Owned by Women Fundera — The Best States for Small Business Taxes in 2017

Industry Reports

HBS — The State of Small Business Lending BOA — Small Business Owner Report

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What Is a UCC Filing? (And Why Your Business Needs to Know This)

Interested in expanding your business credit profile? Great! There’s so much that goes into that process, but an often overlooked aspect is your business’s history with UCC-1 filings.  

You might have seen a reference to a UCC-1 filing on your business’s credit report, but if that previous sentence just launched you into financial confusion—don’t worry!

We’re here to lay out all you need to know about UCC filings and how it might affect your business—particularly when it comes to securing high-quality small business financing.

What is the UCC?

That would be the Uniform Commercial Code!

Let’s back up for a second: In the United States, states have the right to enact unique laws to govern their specific area that preempt uniform federal law. However, a variety of legal issues regularly transcend state lines—like sales and acquisitions—which makes a predictable and relatively uniform set of laws across states very desirable.

The UCC is known as one of these “Uniform Acts”—collaboratively written laws intended to facilitate the enactment of identical or similar laws by the separate states. First published in 1952, the UCC is one of a number of acts that have been put into law with the goal of harmonizing the law of sales and other commercial transactions across the United States. It’s a really huge list of laws! But the aspect of the UCC we’ll be discussing—and what your business really needs to know about—is Article 1: General Provisions, or a UCC-1 Filing.

What is a “UCC-1 filing?”

A UCC-1 filing refers to the UCC-1 Financing Statement, which is a legal form that a creditor files to give notice that it has or might have an interest in the personal or business property of a debtor. According to The Small Business Chronicle, “the security agreement may provide that the lender will acquire a lien on all of the equipment and inventory of the small business. In exchange, the small business will obtain a loan.” A lien means a lender has a right to keep possession of property belonging to another person until a debt owed by that person is discharged.

The lien protects the interests of the lender in the case of borrower default or bankruptcy, in which case those business assets would be foreclosed on, seized, or sold off to pay back the lender.  

For example, if you own a coffee shop and want to take out a loan to buy an espresso machine, the lender will file the UCC-1 form to state that if the debt for the espresso machine is not repaid, the lender has the right to repossess the espresso machine or seize other assets from your business. While you’re still paying off the espresso machine, the lender technically still owns it until the debt is paid off.

The UCC-1 Financing Statement is filed in order to “perfect” a lender’s or creditor’s security interest by giving public notice that there is a right to take possession of and sell certain assets for repayment of a specific debt with a certain debtor. This kind of security agreement might be a prerequisite for a lender to loan money to your business and establishes the terms of the lien that the lender will acquire on the property of the debtor in the case of default or bankruptcy.  

How is it filed?

When you are approved for secured financing, the lender or creditor files a UCC-1 Financing Statement with the secretary of state in your business’s home state, creating a lien against particular assets—unless the lender files a blanket lien naming all assets—that are being used by the borrower to secure the financing.

The financing statement provided to the secretary of state only needs to contain three pieces of information:

  1. The debtor’s name and address
  2. The creditor’s name and address
  3. An indication of the collateral, “whether or not it is specific, if it reasonably identifies what is described,” according to the UCC documents.

The notices of the filing are public record and often published in the local newspapers, giving notice of the lien.

The UCC-1 filing is active for five years, which means that a lender needs to renew the filing to keep interests protected for loan terms extending longer than five years. Amendments to the UCC-1 might also be filed to update secured asset listings.

What can lenders put liens on?

In short, a lot of things. Mostly property or real estate or any other business assets. If you fail to pay your debt, a judgment creditor can usually grab cash from your bank account or force the sale of most business assets, according to However, “a judgment creditor can’t take personal property that is legally exempt from creditors,” says Most states exempt a certain amount of your personal assets, such as food, furniture, and clothing, from being taken by creditors or lenders. In addition, most states exempt from creditors:

  • The equity you own in one vehicle, up to a certain amount—commonly from $1,000 to $5,000
  • A significant amount of the equity in your house—often between $10,000 and $50,000, depending on the state

Most states also let you keep a couple of thousand dollars’ worth of business equipment and tools of the trade, as well as money in tax-deferred retirement plans. 

Why It Matters for Your Business

Obviously, not paying your debts will result in your assets being seized. But say you pay your bills diligently, even completely—UCC filings can still come back to haunt you due to the five-year active lien rule.

For example, once a debt obligation is paid in full, according to, “a lot of times a lender will not terminate the lien automatically, this means that you could be closing up a financing arrangement [with another lender] and receive a delay or denial at the 11th hour, due to the results of your current lender’s public records search uncovering the existence of UCC-1 liens that are still active.” If not properly managed, UCC-1 liens could delay or flat out deny your ability to obtain higher quality forms of business financing.

In short, in order to continue expanding your business credit profile, you must continue to monitor the presence of UCC filings on your debt, current or not. “It’s a heart-breaking situation to be in,” says, “where you are approved for the business loan that can fund the next big growth opportunity for your business, only to have it delayed or denied due to the active existence of old or inefficiently structured UCC-1 filings.”

Things to Remember

  • Due diligence should be done before you apply for financing to make sure your business has no UCC-1 filings still active for debt obligations already paid.
  • It’s up to the lender to file a UCC termination statement if the loan is paid in full. Once a secured debt obligation is paid off, you should immediately request that the lender terminate the lien on said assets through the filing of a UCC-3 form.

In conclusion, it’s a good idea to keep up with the status of UCC-1 filings made against your business in order to make sure you can get the quality financing you need when you need it. You can always check the status of UCC filings against your business through your business credit report.

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