The E-commerce Sellers Guide to Resale Certificates

If you buy products to sell to others and haven’t read up on resale certificates yet, buckle up, because what you’re about to learn might save you some money and sales tax hassle.

What’s a resale certificate?

A resale certificate is a document that lets retailers purchase goods for resale without having to pay sales tax for those items.

Depending on your state, they will either provide you with a resale certificate number to use with a generic template or they will create a customized certificate for your business. Either way, you’ll need to provide a copy of the certificate for each business where you purchase goods for resale without paying sales tax.

Are resale certificates and sales tax permits the same thing?

Most of the time, yes. Sometimes the sales tax permit acts as a resale certificate, but some states require a separate resale certificate. To find out the procedures for your state, you should check out TaxJar’s State Resale Certificate blog series or contact your state directly to see their requirements.

What can I buy with a resale certificate?

You can buy any products that you intend to put up for resale or components to make items you intend to resell. For example, if you are a jewelry designer, you can purchase gem stones tax free to fashion into jewelry for your customers.

Just keep in mind that you can’t purchase items you do not intend to resell—like equipment or office supplies—without paying a sales tax using a resale certificate. In this case, that would be considered tax fraud. (Those items, however, can be income-tax deductions, but that’s a whole different tax matter!)

Where can I use a resale certificate?

Many retailers accept resale certificates, but not all—it’s completely up to the business whether they do or don’t accept resale certificates. Retailers are on the hook to pay lost sales tax if it turns out that the resale certificate is expired or false.

You’ll also find situations where retailers choose not to accept resale certificates to discourage retail arbitrage, such as Target trying to discourage people from buying rare items to sell online with a huge markup.

Can I use a resale certificate in multiple states?

Most of the time you can use your resale certificate in multiple states, but there are 10 states that will not allow retailers to accept out-of-state resale certificates.

If you make a lot of purchases in those states, you may wish to consider registering for a sales tax permit. Keep in mind that if you choose to register for a sales tax permit that you’ll be required to collect sales tax from buyers in that state, so you’ll have to weigh the pros and the cons to figure out if that route works for your business.

What happens if I don’t sell the items I buy with a resale certificate?

If you don’t sell the items or components you purchased without sales tax by the end of your filing period, you’ll generally be required to pay a use tax that corresponds to the same amount as the sales tax you didn’t pay. Basically you’re paying the sales tax when you file a state sales tax return.

What should I do when a customer hands me a resale certificate?

As a retailer, you may be presented with a resale certificate from a customer who intends to resell your products. You are responsible for deciding if you do or don’t want to accept the resale certificate.

Keep in mind that if the resale certificate ends up being expired or false, you will be on the hook for paying the sales tax, so if you decide to accept resale certificates, you should definitely learn how to verify those certificates in each state. You’ll also want to keep the resale certificates on file in case there are any issues or in the event of a sales tax audit.

At this point you probably know whether or not obtaining a resale certificate would work for your business. If you’re thirsty for more information, you can drink from the fire hose by visiting the resale certificate section of the TaxJar blog or start the conversation in the comments!

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from Fundera Ledger https://www.fundera.com/blog/resale-certificates

What is APR? Here’s What You Need to Know

What is APR? You may find yourself asking this question for a variety of reasons, such as when applying for a credit card or comparing business loan offers.

APR, also known as annual percentage rate, is defined by Investopedia as:

“…the cost per year of borrowing. APR is not the same as the interest rate on a loan. Loans charge an interest rate, but usually also charge other fees, such as closing costs, origination fees or insurance costs, which are typically wrapped into the loan. If two loans have the same interest rate, but one has much higher fees than the other, simply shopping by interest rates won’t give an accurate comparison of the loans’ true costs. That’s why there is the APR. By factoring in other fees, APR gives a more accurate estimate of the cost per year of a loan. For this reason, the APR is generally higher than the interest rate.”

As simple as that sounds, you are still likely to have some questions. These may include:

• How does APR impact how much I pay?
• What does this have to do with my monthly bill?
• Why do APRs often vary from one transaction and period to the next?
• What about when I see APR for other types of credit, like a business loan?

These are all valid questions. They are also questions you need to answer sooner rather than later. After all, APR impacts your finances in many ways.

It doesn’t matter if you are trying to better understand your credit card statement or seeking a loan for your small business, once you understand the answer to the questions “what is APR,” including the finer details of APR you will have an easier time managing your finances and knowing when your APR is too expensive.

So, what is APR? Let’s dive in.

APR and the Truth in Lending Act

In the United States, the disclosure and calculation of APR has been governed by the Truth in Lending Act since its original effective date of May 29, 1968.

The U.S. Department of the Treasury provides the following in regards to how the act protects consumers:

“The Truth in Lending Act (TILA) protects you against inaccurate and unfair credit billing and credit card practices. It requires lenders to provide you with loan cost information so that you can comparison shop for certain types of loans.”

For many years, the Truth in Lending Act was effective in creating an atmosphere of honest reporting and clarity amongst borrowers and lenders. In the 1980’s, however, this all changed when automakers, among other companies, began to exploit a loophole in which they could reduce finance charges, but make up for it by increasing the price of the car.

Many changes have been made over the years to fight against deceptive practices. For example, provisions were added to the Mortgage Disclosure Improvement Act of 2008 (MDIA) to provide homebuyers with more concise information. This clause states that if the final APR is off by 0.125 percent or more on the GFE disclosure, the lender must issue another disclosure and wait for a period of three additional business days before completing the transaction.

The Federal Deposit Insurance Corporation (FDIC) is responsible for enforcing laws and regulations associated with consumer protection as it relates to APR. There are rules that govern the following:

• Tolerance
• Rounding
• Periodic rates
• Finance charges
• Good faith reliance on faulty calculation tools

Fortunately, as a consumer, you don’t have to concern yourself with the many rules and regulations that govern lenders. As long as you understand APR, you can rest easy knowing that there are many governing bodies with a close eye on lenders and lending practices.

More than One Type of APR

There are many reasons for the confusion surrounding APR, including the fact that a credit card account can have multiple APRs. Most people pay close attention to the APR for purchases. They know one thing to be true: if they carry a balance from one month to the next, this is the rate that will use to calculate how their balance is impacted.

However, there may be other types of APR, such as those associated with balance transfers. If you transfer money from one credit card to another, this is the rate that comes into play.

What are Promotional APRs?

Adding to the confusion is the fact that some lenders offer a promotional APR. This gives you a lower rate on certain transactions for a predetermined period of time. For instance, you may find a credit card offer with zero percent APR for six months. When the promotional period ends, the APR will adjust to a higher amount, thus increasing the cost of carrying a balance.

What are Variable and Non-Variable APRs?

The name pretty much says it all, but do you truly understand how a variable and non-variable APR differs?

A non-variable APR is often preferred, as this means the rate stays the same indefinitely. You know what you are getting, which lessens the chance of a surprise down the road.

Note: read the fine print, as many credit card offers with a non-variable rate are not guaranteed. The issuing company may have the right to change the APR based on a variety of factors, such as market conditions and how often you use your credit card. They are required to notify you of any change.

A variable APR is exactly what it sounds like: with this, your APR can vary over time. This is calculated by adding the margin, set by the credit card company, to the index (or reference rate), such as the Prime Rate. If the Prime Rate increases, so will your APR. Conversely, if the Prime Rate decreases, your APR will follow, thus making it cheaper for you to borrow money.

The Board of Governors of the Federal Reserve System defines the Prime Rate as:

“The prime rate is an interest rate determined by individual banks. It is often used as a reference rate (also called the base rate) for many types of loans, including loans to small businesses and credit card loans.”

How Do APR and Interest Rate Differ?

Although we touched on this above, it is important to reiterate: it is a common myth that APR and interest rate are one and the same. While these numbers could be close, don’t expect them to be exactly the same. Oftentimes, an APR can be higher than an interest rate.

Here is an example:

You are a business owner interested in buying an office building and have been offered a $200,000 loan at an interest rate of six percent.

As focused as you may be on the six percent, don’t overlook the fact that this isn’t the APR. The reason is simple — the APR includes the interest expense, as well as other costs and fees associated with the loan. These costs and fees are not the same from lender to lender.

The APR will almost always be higher than the interest rate. 

As you compare multiple lenders and loan products, don’t forget to focus on both numbers. You may find a situation in which two lenders are offering the same interest rate, but a different APR. The lender offering the lower APR is charging fewer fees, and  if offering a better overall deal.

How is APR Calculated?

To calculate APR, you first need to know the interest, the total loan amount, the terms, and the fees.

Let’s assume that you’re going to borrow $10,000 and have been quoted an interest rate of 12%.  You also have to pay a $500 closing fee. So, the APR on your 2-year loan would be roughly 16.92%. How did we get this number?

The simplest way to calculate APR is to use an APR calculator or a spreadsheet. For instance, in Google Spreadsheets, you can calculate the monthly payment and closing costs for the scenario described above with built-in formulas.

1. Type the following formula into any cell to calculate the monthly payment for your loan:

=PMT(interest rate/months, total number of months you pay on the loan, loan value plus fees)

=PMT(.12/12, 24, 10500)

Your monthly payment would be $494.27

2. Once you have determined the monthly payment, you can use a second formula to determine your APR:

=RATE(total number of months you pay on the loan, your monthly payment expressed as a negative, the current value of your loan)

=RATE(24, -494.27, 10000)

3. Your monthly rate should be .0141. Multiply by 12 to get an annual rate:

.0141 * 12 = .1692

4. Finally, multiply by 100 to convert from a decimal back to a percentage:

.1692 * 100 = 16.92%

What Fees Does APR Include?

The fees included in APR can and will vary from one lender to the next. These fees are almost always included:

• Underwriting fee
• Loan processing fee
• Private mortgage insurance fee (if applicable)
• Document preparation fee

Along with the above, this fee is sometimes added:

• Loan application fee

While not always true, these are the fees that are not typically included:

• Attorney fee
• Abstract fee
• Title fee
• Credit report
• Transfer taxes
• Appraisal fee
• Home inspection fee

Note: ask each lender for more information on what is included in the APR. This ensures that you are comparing apples to apples, allowing you to make an informed and confident decision as to which loan is cheapest.

What is APR? Here are 3 APR Facts You Need to Know

Any misunderstanding in regards to the question, “what is APR,” such as how it is calculated, could lead to a situation in which you are surprised at what you are being charged.

These three facts can help you better understand your situation:

1. A higher credit score will qualify you for a lower APR. It doesn’t matter if you are applying for a credit card, seeking a home mortgage, or in need of a business loan, a high credit score will work in your favor. There are many benefits of a high credit score, with this being at the top of the list.

2. There are ways to get a lower APR, but don’t count on this happening. If you want to attempt to secure a lower rate, there are things you can do:

• Contact the lender and request a lower APR. Make sure you have a leg to stand on, such as details of a better offer from another lender.
• Enroll in a debt management program. This isn’t for most people. Instead, it is only for those who are having a difficult time meeting their monthly obligation. In this case, the lender may temporarily lower the APR to help the person or business get back on track.
• Apply for a hardship plan. This is similar to a debt management program. The primary difference is that this typically keeps the lower APR in place until the balance is paid off.

A lower APR is always better, but you should not expect to be in position to negotiate this on a regular basis (if at all). This is why it is so important to seek the best offer upfront.

It may not sound like a big deal when applying for a loan or credit card offer, but one APR point can make a huge difference. Over the course of 10+ years, a reduction of one percentage point will save you thousands of dollars.

3. Paying the balance in full is the best way to go. This definitely holds true with a credit card. If you never carry a balance from one month to the next, you will not have to concern yourself with paying interest.

This may be an option with a credit card, but not with others, such as a business loan.

What is APR? Here Are the FAQs

Now that you fully understand what APR means, including its basic definition and how it is calculated, it is time to dive into some of the more detailed questions.

• What is the purpose of APR? From a borrower’s perspective, APR helps them understand how much they will pay to take on a loan. Just as importantly, it allows them to measure the cost of credit, making it easier to compare loans.
• Is APR the same as AER and EAR? It is widely believed that all three are the same, but this is not the case. AER, also known as Annual Equivalent Rate, is a calculation for interest rates associated with bank savings accounts. EAR stands for Effective Annual Rate, and is used in the same manner as AER.
• What is the best way to avoid a high APR? There is no surefire way to avoid a high APR, however, there are some things you can do to improve your position. Most importantly, maintain a good credit rating. Higher scores come with lower APRs. Additionally, shop around. For instance, if you are in the market for a business loan, rely on a service that helps you find the best deal. One lender is likely to have a lower APR, and better overall terms, than the rest of the field.
• Is it a good idea to use an APR calculator? While the lender can provide you with all the calculations you require, it is never a bad idea to use an APR or business loan calculator as a way of running different borrowing scenarios. This is often the best way to fully grasp the details of the loan, including how the APR impacts your overall monthly, weekly or daily payment.

Is APR the Only Thing that Matters?

It is very easy to have a one-track mind when it comes to applying for a credit card or loan. With a loan, your goal is simple: secure the funding you need to make a purchase, without paying too much to do so.

There is no denying the benefits of comparing the APR associated with multiple loans. If all else is equal, the APR could be the determining factor. The lower the number the less you will pay in interest and fees.

Despite the importance, this is not the only thing that matters. There are other details to consider, such as:

1.      The reputation of the lender
2.      The lender’s customer service
3.      Collateral
4.      Term
5.      Payment options
6.      Penalties (such as those for prepayment)

Note: the way you compare APR numbers for a loan will not be the same as a credit card. With a loan, you know you will absolutely be paying fees to receive the capital. This means the APR will definitely come into play. With a credit card, this isn’t always true, since you have the option of paying your balance in full every month.

Conclusion on APRs

If you’re still wondering, “What is APR?” don’t hesitate to consult with the credit card company or financing company you are interested in doing business with.

As you continue to grow your small business or improve your personal finances, you may find yourself interested in some type of loan (business loan, mortgage, etc.) or in business credit cards. With each step that you take, make sure these three letters are in the back of your mind: APR.

 

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from Fundera Ledger https://www.fundera.com/blog/what-is-apr-the-complete-history

11 Entrepreneurs Share Their 2018 Business Resolutions

Successful entrepreneurs never stay still for long—they’re always thinking about what’s next, about the changes they can make, and the innovations they can launch to scale their businesses.

And while this can (and should) take place any time of year, why not take advantage of the new year to think about the changes you’re going to make in 2018 to take your business to new heights? Now’s a great time to make some resolutions and set goals for your small business.

Making Resolutions Is the Key to Success

Maybe you think that making new year’s resolutions is a waste of time—Matt Rissell, the CEO of time tracking app TSheets, would disagree.

Rissell, who recently sold his business to Intuit for $340 million, says making resolutions is key to entrepreneurial success.

Since age 22, Rissell has been following the same new year’s resolution ritual: He keeps his old resolutions in a file he looks at before he makes new ones (and he checks it quarterly throughout the year). “The file must be 2,000 lines long now,” he says, but “it’s good to reflect.”

Rissell breaks his 2018 resolutions into categories: physical goals, mental and emotional goals, professional goals, financial goals, spiritual goals, and relationship goals. At the top of this sheet, he sets out his seven top priorities.

“Setting goals centers you and helps you put things in perspective,” says Rissell. “Set your resolutions high, but achievable. Goals are meant to take you where you need to go, and making resolutions is a chance to concentrate your energies on what you want to achieve.”

Before you follow Rissell’s advice, you might find some inspiration in the new year’s resolutions from some entrepreneurs we talked to.

Jeff Beals

The owner of Teetot, which creates imaginative, durable, and well-priced dress-ups and costumes, resolves to:

• Create innovative kids’ costumes and dress-ups that inspire wonder and imagination
• Make our customers’ programs run worry-free and without any hiccups by ensuring each order ships on time and conforms to regulatory, safety, and quality regulations
• Maintain our balance of imagination and logic, planning, and process

Steve Cooper

The founder of Hitched Mag, an online publication that “entertains, educates, and inspires marriages,” resolves to:

• Turn the corner on expectations and execute

Dave Cornblum

The owner of Blaster Web Services, a full-service web development team specializing in web development, social media marketing, search engine optimization, and graphics, resolves to:

• Be the best we have ever been in terms of providing customer service and delivering the best results for all our clients
• Do great work for our clients by relying on great teamwork, communication, and shared passion

Elian Cribari

The hairstylist at Hair by Elian, resolves to:

• Expand my education and widen the window of opportunity in my field
• Be a better stylist by polishing my routine
• Run my business better, smoother, and more profitably

Greg Ernst

The residential realtor at GregErnst.com, resolves to:

• Improve my engagement with past clients and build on those relationships
• Compile a database of clients I haven’t spoken with recently and reach out with updates and interesting content

Will & Erica Messmer

These founders of Darke Pines, a soon-to-open butcher shop in Jersey City, New Jersey, resolve to:

• Not miss the new behaviors, new technologies, and new opportunities in the market
• Work from an informed gut and continue to let intuition play a huge role in our decision-making, while finding reliable data to support our gut feelings
• Strike a balance between digital and analog, because nothing can replace the authenticity and impact of a good face-to-face, in-person conversation

Brian Moran

The CEO, of Small Business Edge, a company that helps small business owners and entrepreneurs run better businesses, resolves to:

• Deepen my relationship with readers and viewers by solidifying my social platforms and adding new channels, including podcast, webinars, and video content

Adam Rizza

The president and cofounder of Sunscape Eyewear, a manufacturer and distributor of fashion-forward sunglasses and other eyewear, resolves to:

• Reduce overhead
• Target new clients
• Focus more on online operations
• Introduce new product lines

Nick Timms

The cofounder of Drag, an app that organizes Gmail into to-do and task lists, increasing productivity, resolves to:

• Not engage in any social/email/tasks immediately after waking up
• Set aside time to prepare for each day

***

What’s your new year’s resolution for your business in 2018?

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from Fundera Ledger https://www.fundera.com/blog/2018-business-resolutions

25 Best Marketing Books for Entrepreneurs to Read in 2018

As the new year approaches, it’s a good time to think about how we can improve ourselves and our approach to business.

Especially in the rapidly changing world of marketing.

To get you started, we’ve found some of the best marketing books out there to kick your marketing strategy into high gear and make the most of the tools at your disposal in 2018.

Broken down by category:

• General Marketing
• Branding
• Customer Service
• Digital Marketing
• Content Marketing
• Influencer Marketing
• The Future of Marketing

General Marketing

The 22 Immutable Laws of Marketing: Violate Them at Your Own Risk! by Al Ries and Jack Trout

The best-selling authors lay out 22 innovative rules for understanding and succeeding in the international marketplace. From the Law of Leadership to The Law of the Category to The Law of the Mind, these valuable insights are designed to stand the test of time and present a clear path to successful products.

 

Methods of Persuasion: How to Use Psychology to Influence Human Behavior by Nick Kolenda

Get inside the mind of your customer. This may sound creepy, but this book provides an effective way to get potential customers to want your product—a foundation for any marketing plan.

 

Blue Ocean Strategy, Expanded Edition: How to Create Uncontested Market Space and Make the Competition Irrelevant by W. Chan Kim and Renée Mauborgne

This expanded edition is crucial for any marketing plan. The central thesis is that lasting success comes not from battling competitors but from creating “blue oceans”—untapped new market spaces ripe for growth. And this book provides a systematic approach.

 

The Tipping Point: How Little Things Can Make a Big Difference by Malcolm Gladwell

Think you have the next big idea? This book breaks down that “magic moment when an idea, trend, or social behavior crosses a threshold, tips, and spreads like wildfire.” The phenomenon outlined here has changed the way people think about selling products and disseminating ideas.

 

Pre-Suasion: A Revolutionary Way to Influence and Persuade by Robert Cialdini 

We’ve always been told that our messaging is important. But this book argues that it’s really the moment before that message is delivered that matters. What if you could persuade customers before you ever got a chance to message them? This book shows the way.

 

Get Scrappy: Smarter Digital Marketing for Businesses Big and Small by Nick Westergaard

Interested in ramping up your marketing without having to increase your budget? This is the book for you.

 

Branding

Designing Brand Identity: An Essential Guide for the Whole Branding Team, 4th Edition by Alina Wheeler

A bestselling toolkit for creating, building, and maintaining a strong brand—this book provides brand managers, marketers, and designers a proven, universal five-phase process for creating and implementing effective brand identity. It’s a detailed look at the latest trends in branding, including social networks, mobile devices, global markets, apps, video, and virtual brands.

 

The Road to Recognition: The A-to-Z Guide to Personal Branding for Accelerating Your Professional Success in the Age of Digital Media by Barry Feldman and Seth Price

This book is packed with actionable advice for developing your personal brand and accelerating your professional success.

 

Building a StoryBrand: Clarify Your Message So Customers Will Listen by Donald Miller

The book provides a process through which business owners can fine-tune how they talk about their brand and connect with customers.

 

Customer Service

Hug Your Haters: How to Embrace Complaints and Keep Your Customers by Jay Baer

Customer services is an often overlooked marketing tool. This book breaks down how you can give customers a “knock out” experience and keep them coming back for more—even when all they do is complain about you.

 

Questions That Sell: The Powerful Process for Discovering What Your Customer Really Wants, Second Edition by Paul Cherry

Learn how to ask the questions that get to the bottom of what your customer or client needs. Knowing your product is not enough—you also need to know your customer. This book provides a path to figuring that out.

 

Digital Marketing

The Lead Machine: The Small Business Guide to Digital Marketing: Everything Entrepreneurs Need to Know About SEO, Social Media, Email Marketing and Generating Leads Online by Rich Brooks

If you’re looking to make sense of all this digital marketing stuff, then this is the book for you. This book outlines how to make a digital marketing plan and make the most of the digital tools at your disposal.

 

Social Media Marketing: Facebook Marketing, Youtube Marketing, Instagram Marketing by Mark Smith

A literal box set to get you started on crucial social media platforms. Great for beginners.

 

The Conversion Code: Capture Internet Leads, Create Quality Appointments, Close More Sales by Chris Smith

The testimonials for this book could hook you alone, having helped thousands of businesses generate millions of leads. This book provides a blueprint for successful sales online.

 

SEO 2018: No Bullshit Strategy by Casey Leigh Henry

This step-by-step guide will help you skyrocket to the top of the search engine results—reportedly for free. This best-seller is updated for the new year.

 

They Ask, You Answer: A Revolutionary Approach to Inbound Sales, Content Marketing, and Today’s Digital Consumer by Marcus Sheridan

A good, sophisticated catchall digital marketing book. This book argues that quality content is the key to success—and outlines just how you can make it on any budget.

 

Content Marketing

Content—The Atomic Particle of Marketing: The Definitive Guide to Content Marketing Strategy by Rebecca Lieb

This book makes the case for content as the central piece of your marketing strategy and goes beyond the conventional wisdom of social media best practices. Deeply researched and insightful.

 

Top of Mind: Use Content to Unleash Your Influence and Engage Those Who Matter to You by John Hall

This book outlines how to be the first thing that comes to mind when customers think of your related industry, product, or need. Develop habits and strategies that focus on engaging your audience, create meaningful relationships, and deliver value consistently, day in and day out.

 

Influencer Marketing

The Influencer Economy: How to Launch Your Idea, Share It with the World, and Thrive in the Digital Age by Ryan Williams

Williams defines an influencer as someone who can create a movement based on the passion and loyal support of a niche community. This book outlines how to launch your business with influencer vision, collaborate with other influencers to build your brand and a loyal community, and thrive through authentic relationships.

 

Crushing It!: How Great Entrepreneurs Build Their Business and Influence—and How You Can, Too by Gary Vaynerchuk

A four-time best-selling author shares stories of entrepreneurs who found success through building their personal brand on social media. This book offers a practical guide for anyone who wants to hack the popular social platforms of today to increase status—and customers—within their industry.

 

How to Win Friends and Influence People in the Digital Age by Dale Carnegie & Associates

This time-tested classic is more important than ever as we build relationships and seed influence online, especially with the rise of influencer marketing.

 

The Future of Marketing

Non-Obvious 2018 Edition: How to Predict Trends and Win the Future by Rohit Bhargava

A Georgetown University professor outlines just how to know what’s coming and optimize it, with the central thesis being that it’s usually not the place you first look.

 

Growth Hacker Marketing: A Primer on the Future of PR, Marketing, and Advertising by Ryan Holiday

A time-tested marketer for major brands and businesses spills the beans on how to generate buzz around your business or product without overspending on traditional marketing routes.

 

Killing Marketing: How Innovative Businesses Are Turning Marketing Cost into Profit by Joe Pulizzi and Robert Rose

One of the downsides to marketing is that it can be costly with uncertain returns. This book provides a path for the future of marketing to turn those efforts into profits.

 

The Revenge of Analog: Real Things and Why They Matter by David Sax

This author uncovers how entrepreneurs, small business owners, and even big corporations who’ve found a market selling not apps or virtual solutions but real, tangible things. Revealing deep truths about how humans shop, interact, and even think, this book blends psychology and observant wit with first-rate reporting, demonstrating the “limited appeal of the purely digital life—and the robust future of the real world outside it.”

***

With these 25 outstanding marketing books added to your library, there’s no reason 2018 can’t be your business’s best year ever. You just might have to do things a little bit differently.

The post 25 Best Marketing Books for Entrepreneurs to Read in 2018 appeared first on Fundera Ledger.

from Fundera Ledger https://www.fundera.com/blog/marketing-books-for-entrepreneurs

Behind the Business: Southern Lights Electric Illuminates Nashville Local Businesses

Adam Gatchel, co-founder of Southern Lights Electric, started his small business journey six years ago in 2011 and has grown to feature work all over the world, including Japan, Australia, London and Germany.  When Adam Gatchel was a full-time musician, he found himself with long periods of downtime when he was off the road. In... Read more

The post Behind the Business: Southern Lights Electric Illuminates Nashville Local Businesses appeared first on Kabbage Small Business Blog.

from Kabbage Small Business Blog https://www.kabbage.com/blog/small-business-spotlight-sle

Schedule K-1 Tax Form: What Is It and Who Needs to Know?

If your business is a newly formed S-corp or partnership, you might be surprised to learn your tax return contains some unfamiliar new forms. Among these is the Schedule K-1 tax form. Many small business owners, especially those who have either never owned a business or have only owned a sole proprietorship, are confused by this tax form.

So, what is a Schedule K-1 tax form? How is it used? How is it different from other tax forms? Should you inspect it for accuracy, and—if so—what should you be looking for during your inspection?

Let’s look at each of these questions in turn, so we may become more familiar with the Schedule K-1 tax form.

What is a Schedule K-1 tax form?

To answer this question, first, we must delve into the types of businesses in which the Schedule K-1 tax form comes into play.

There are certain types of business entities that are considered “pass-through” entities for tax purposes. If your business is a partnership or an S-corp, it is considered to be a pass-through entity.

A pass-through entity shifts the tax responsibility from the business itself to the owners or shareholders in the business. Depending on a variety of factors, this can be more beneficial than having the business itself pay the taxes on income earned by the business (as is the case for C-corporations) or having the income taxed as self-employment income (as is the case for sole proprietorships).

The Schedule K-1 tax form is the mechanism by which each partner’s or shareholder’s portion of the income and losses in a pass-through entity is reported. This form is then used by the partners’ or shareholders’ tax preparers to compile the appropriate tax form for their clients. Schedule K-1 divides certain aspects of a partnership’s or S-corp’s business activity according to each partner’s or shareholder’s basis in the business.

How is the Schedule K-1 tax form used?

As mentioned above, the Schedule K-1 tax form is the document used to report each partner’s or shareholder’s share of the income and losses in a pass-through entity business. However, income and losses are not the only things reported on the K-1.

• In the case of a partnership where one or more partners receive guaranteed payments, the guaranteed payments are reported on the partners’ K-1s.
  

• Dividends, deductions, gains, and losses are reported on each partner’s or shareholder’s K-1. These are calculated based on each partner’s or shareholder’s basis—or percentage of ownership or investment—in the business.
  

• A capital account analysis for each partner, or percentage of stock ownership for each shareholder, is included on the K-1.
  

• The Schedule K-1 tax form is not only used for partnerships and S-corps. You may receive a Schedule K-1 if you are the beneficiary of an estate or trust, too.

How is the Schedule K-1 tax form different from other tax forms?

The Schedule K-1 tax form is used for both reporting and reconciliation. It contains important information about each partner’s or shareholder’s income and deductions, but it also includes information about percentage of ownership in the pass-through entity. This makes Schedule K-1 more of an information return than the tax forms with which most small business owners are familiar.

As is the case with a 1099, you will not file your Schedule K-1 with your tax returns, though you will need to give it to your tax preparer so they can properly complete your tax return. File your Schedule K-1 tax form with your other important financial records. The partnership or corporation will file a copy of each partner’s or shareholder’s Schedule K-1 with either Form 1065 (for a partnership) or Form 1120S (for an S-corp.)

Should you inspect your Schedule K-1 tax form for accuracy?

The short answer to this question is, yes, you should. Your Schedule K-1 tax form contains information not only about your income and losses in your partnership or S-corp, but also about your ownership, or basis, in the business.

At the most basic level, you should check your Schedule K-1 and make sure that the correct amount of income is reported on it. After all, this document will be used to prepare your tax return, and you want to make sure you are reporting the correct amount of income and deductions.

If you received guaranteed payments from a partnership, double-check the amount reported on your Schedule K-1 and compare it with your personal records. If the amounts are off, ask for an explanation or a corrected K-1.

Since the Schedule K-1 tax form also contains information about each partner’s or shareholder’s ownership of the business, it’s important to verify this section of the form for accuracy as well. If the ownership percentages don’t look correct, ask the person who completed the K-1 to explain their calculations.

Make sure the right Schedule K-1 has been used for your situation. There are different versions of the Schedule K-1 tax form for partners in a partnership, shareholders in an S-corp, and beneficiaries of an estate or trust. If you are a partner in a partnership, your Schedule K-1 should reference Form 1065 on the form. For S-corps, Form 1120S will be referenced. If you received money from an estate or trust, look for a reference to Form 1041.

Finally, some states have a K-1 or similar equivalent that must be provided to affected taxpayers in that state. Your tax professional can tell you if this applies to your situation.

What else do you need to know about Schedule K-1?

• It can be complicated: The Schedule K-1 tax form looks complicated, and it can be. However, don’t be surprised if you receive a Schedule K-1 with only a few of the fields completed. This doesn’t mean there is a problem with your Schedule K-1. The form is meant to encompass a variety of situations, and not all situations apply to all businesses or partners or shareholders within that business.
  

• When it’s necessary: You should expect a Schedule K-1 for every year you are a partner or shareholder in a business organized as a pass-through entity. This applies even if the business has operated at a loss for the year. A Schedule K-1 that shows a loss may improve your tax situation, so don’t disregard a K-1 that shows negative numbers!
  

• When it’s due: Schedule K-1s must be prepared and made available by March 15th each year. If you are eager to file your tax return early, it can be tempting to file before you receive your K-1. Doing this, though, will likely result in you needing to amend your tax return, which typically means you will pay additional tax preparation fees. It’s best to wait to file your income tax return until you are sure you have received all the Schedule K-1s you are expecting.
  

• A final warning: Avoid the temptation to not include your Schedule K-1 with your tax preparation paperwork. Like other information returns, Schedule K-1 is reported to the IRS. Failure to include the income reported on your Schedule K-1 will likely lead to an adjustment to your return by the IRS, and it can also lead to fines and penalties.

***

The Schedule K-1 tax form is one of the most important documents that partners or shareholders receive each year. It can also be one of the most confusing. Take the time to review your Schedule K-1 with your tax professional.

Verifying the information on it is correct will ensure that your personal tax return is completed accurately and that you are reporting all the income—and claiming all the deductions—you should report.

This will make tax season less stressful for both you and your tax preparer, a win-win for both of you!

The post Schedule K-1 Tax Form: What Is It and Who Needs to Know? appeared first on Fundera Ledger.

from Fundera Ledger https://www.fundera.com/blog/schedule-k-1-tax-form

6 Tips from Entrepreneurs Who Quit Their Jobs to Pursue Their Dreams

Escaping the cubicle life seems to be all the rage these days. Everyone wants to “live the dream” or follow their passion without the bother of working full-time. In fact, a survey conducted by EY in 2016 reveals that 62% of millennials have considered starting a business. Another survey, LinkedIn’s 2016 Purpose at Work report, revealed that 74% of respondents want meaningful work.

There’s no doubt about it, so many people have entrepreneurial ambitions and many more desire to do something in their career that matters. This boils down to a group of folks who will inevitably quit their job to pursue their dreams.

Of course, working for yourself can be incredibly fulfilling. However, if you make the move prematurely or without much planning, you could jeopardize your dream’s success.

Whether you want to travel full-time, give back for a living, or start a business, you should hear from others who’ve made the leap. Hopefully, these collective stories and advice will not only inspire you, but also help you prepare to pursue your dream with confidence.

Have a Vision

Before you go skipping off into the beautiful sunset, you want to be very clear on where you’re skipping off to. You might have passions and interests in many areas, but you’ll need to nail down exactly what you expect from your dreams.

For example, you might be passionate about owning a business, but a life that involves entrepreneurship can take shape in so many ways. You could start your own business, become a consultant to other small business owners, or even work with kids in youth-focused tech incubators.

There are many directions your dreams can take you. The other complication is that these directions can change. You could start a successful business, sell it, and still have the rest of your life to pursue other dreams.

The point is that you should create a vision of what your dream-filled life will look like. How will you build your empire? What are the ways you can capitalize on your dream and start your business?

Eraina Ferguson, founder of My Good Life Now, an online resource for parents of special needs kids, has seen her business model morph in many ways many times. At the end of the day, it’s always been about helping and connecting for her.

She says, “It’s okay to change direction, but if you have a vision in place, you’ll always end up at the same place—even though the path you thought you’d take to get there becomes different.”

Research Your Field

Don’t let your dream career turn into a nightmare due to lack of research. You might have a vision of what life would look like as a seaside surf-shop owner, but the reality of running that business can be starkly different than what you envision.

Though you shouldn’t chuck your dreams and go back to the drawing board right away, you should research what it takes to pursue your dream business or lifestyle. If profitability is elusive, find out why and see if you have the resources to deal with that risk.

Jhonn Thomassen is the owner of Marine Park Coffee in Brooklyn. He quit his job as an advertising account manager to pursue his dream of starting a coffee shop. Thomassen suggests that research and resourcefulness is a must. He says, “Interview as many people as possible in the field you are going into and to take full advantage of any small business services your town or city provides.”

Create a Financial Plan

Having a financial plan is crucial to supporting your dream. Otherwise, you could be hindered by lack of resources and financial pressure.

Shai Littlejohn worked as a lawyer for 15 years before becoming a musician and a songwriter. Five years ago, she decided to pursue a career in music. First, she started a part-time law practice, then auditioned for Berklee College of Music in Boston, and then moved to Nashville. Littlejohn says the move has made her much happier with her life.

In terms of tips, she advises would-be dream chasers to “put a 12-24 month financial plan in place and execute it before you leap.” She explains, “Your dream will require finances, so make a budget and include that in your 12-24 month plan.”

Don’t Quit Your Day Job (Well, Not at First)

Of course, your goal is to quit your job so that you can pursue your dream, but understand that timing is crucial. If you’ve been diligent enough to craft and refine your 12-24 month plan, you should now be on the road to quitting your job. However, make sure you have some, if not all, your ducks in a row before making the leap.

Meredith Jaeger was a customer service representative at a tech company in San Francisco when she sold her first novel, The Dressmaker’s Dowry, to publisher HarperCollins in 2015. Just a year later, she was able to quit her job and now continues to write full-time.

Jaeger warns, “Keep your day job while working tirelessly towards your dream job.” She was working hard outside of her job to make her writing dream a reality: “I wrote on weekends for years while working 9-5. I wrote four novels before I finally sold one.”

It might be tempting to just make your move quickly, but it’s okay to build while you have a safety net in the form of a job. In fact, it’s probably the best way to give your dream the best chances for survival and success.

Have an Emergency Fund

There’s nothing more stressful than launching out on your long-awaited dream only to have little to no resources to support it. Famous poet Langston Hughes wrote about deferred dreams—they can become a burden to the person who can’t bring them to fruition.

One way to avoid restricted cash flow while building your dream is to have an emergency fund. Ideally, you’d have one for both your personal and business expenses. Scott Churchson is a financial planner turned actor and stunt performer. He’s been in both popular TV shows along with commercials and works, full-time, in the entertainment industry.

He admits that much of his success is because of his background in financial planning. He describes his “emergency fund that had been built up over the years” as particularly helpful during slower periods in his acting career.

Don’t Burn Bridges

Leaving your job can be one of the most freeing, exhilarating things you can do for yourself. If you’ve planned well, hopefully, you won’t jump ship right away. It can be tempting to get “senioritis” because you know you’re leaving. Fight the urge to do less than stellar work or slight your co-workers in any way.

When it’s time to go, do it with class. Jessica Tappana is a licensed clinical social worker who recently started her own, independent practice. She says that it was important to leave her employer on the best terms possible. “I did everything I could to help my former job prepare for my replacement,” she says.

She’s aware that she’s still connected  to that community even as a small business owner: “I know that the mental health community is small and my former employers may be able to refer potential clients to me.”

Breaking the mold and going for your dreams isn’t the easiest thing in the world. There’s a ton of risk involved, and it can be incredibly scary to make the leap. Once you quit your job to pursue your dream, you’ll likely find that it was all very worth it—the planning, researching, saving, etc.

Hopefully, these tips will help you make calculated risks that will pay off in the long run. Happy dream-chasing!

The post 6 Tips from Entrepreneurs Who Quit Their Jobs to Pursue Their Dreams appeared first on Fundera Ledger.

from Fundera Ledger https://www.fundera.com/blog/entrepreneurs-who-quit-their-jobs

The Economics of Starting a Hardware Store

Starting a hardware store—a brick and mortar shop that sells, essentially, brick and mortar (and everything else you need to build a house, fix a leaky faucet, or paint the garage)—might seem daunting in this day and age.

Smaller hardware stores, like small businesses in every industry, face cutthroat competition, not just from other local businesses but big box stores like Home Depot, and e-commerce giants like Wal-Mart and Amazon.

But if you’ve got the expertise and passion for opening a hardware store, don’t get discouraged. You can actually control a number of factors to maximize your potential for success. Review the economics of starting a hardware store before you get started to see if you and your future business have a good shot at staying afloat.

What You Need to Know About the Business of Starting a Hardware Store

According to IBISWorld, there are nearly 20,000 hardware stores in the United States today, producing about $24 billion in revenue and employing just over 148,000 people.

Their analysis of the industry is in line with something you may have noticed if you’re interested in getting into the business: As the economy has improved over the last five years, the housing market has strengthened, leading to an increase in the number of home improvement projects that require trips to the hardware store.

Additionally, low mortgage rates have encouraged people to buy and renovate homes, putting countrywide brands like True Value and Ace Hardware in a good position to capitalize.

The report does note that hardware store growth is expected to slow a bit in the next five years, but the overall industry does have a positive outlook.  

Decide: Go It Alone or Join an Established Name?

There are lots of completely independent hardware stores around the country, catering to the ultra-local community. If you’ve identified a market where you feel you can think about starting a hardware store and become the near-exclusive provider for—and if you’re a control freak who wants to make 100% of the decisions about how your business operates—you might feel good about opening your own shop. Starting a hardware store on your own also requires less money.

There is, however, another option: starting a hardware store with a popular franchise, which provides you access to an established name, as well as a proven operational model and efficient supply chain. You can still be the owner of the store with plenty of latitude to make business decisions.

That’s the situation at Waverly Ace Hardware in Baltimore, Maryland, which is part of an independently run co-op within the fold of Ace Hardware stores.

According to Michael Marren, the assistant manager of one of the 11 Waverly Ace Hardware stores across Maryland, D.C., and northern Virginia, the relationship between the store and the parent company is helpful and fruitful.

“Our parent, A Few Cool Hardware Stores LLC, is based out of the District, and the name denotes the company philosophy rather well. We’re a small business, our leadership is independent and local—but we have the benefit of Ace’s logistical umbrella,” he tells Fundera.

For example, Marren says that his company offers “well above minimum wage” and “a robust benefits package,” which he notes is a distinct choice that makes employees happier.

It’s also nice when you’re starting a hardware store within an established franchise to have a supply chain and the logistics of running the store all ready for you to utilize, rather than figuring it out on your own.

What Your Business Plan Should Cover

Whether you go with a brand or strike out on your own, you should have a business plan that details how you’ll put your hardware store business in the best position to succeed.

Important things to cover include:

• Knowing your customer: What does your typical customer look like? Are they DIY landlords and contractors, or homeowners doing pet projects? Depending on who you’ll be catering to, the way your store is designed and the weight of your stock will change.

• What your finances look like: How much do you need to start up? Once you do get going, what is your break-even point? What do you expect your cash flow to be like on a monthly basis? If you’re joining an established brand, IBISWorld notes you need a minimum of $150,000 unencumbered cash available for investment in a True Hardware, while Ace requires between about $820,000 and $1.5 million—the total depends on how big your store will be and other factors.

• Your marketing plan: If you join a national brand, you’ll have access to all kinds of programs and events you can use to boost your profile. But you should also consider local, perhaps even offline (seriously!) marketing campaigns, loyalty programs for repeat customers, and a flexible national catalog program.

• Location: This one is a no-brainer. You’ll want somewhere with a lot of foot traffic that doesn’t cannibalize the business of other stores—or put you in a position to be cannibalized in return.

Identify Avenues for Success and Potential Pitfalls

As mentioned above, the hardware business is hardly a slam dunk. You’ll need to work hard to identify what works for your business in your location, and avoid the issues that have sunk similar ventures.

According to IBISWorld, the three most important factors for success are the ability to control stock on hand, an experienced workforce, and having a loyal customer base.

These are sentiments that Marren echoes when discussing why people come to his hardware store, as opposed to shopping online with Amazon or hitting a big box store.

“In my view, people come to us for interaction, information, personalization, and proximity. We’re closer, friendlier, and we’ll actually help you when you come in,” he says.

But even the friendliest store associates can’t do anything for customers if what the customers needs isn’t in stock.

“The first rule of customer service is having the thing that someone wants to buy,” says Marren. “Invest in inventory and POS [point of sale] software that can analyze stock and keep your inventory responsive.”

IBISWorld says that challenges to starting a smaller hardware store revolves around competition—mainly those larger retailers and home improvement stores. Marren agrees, noting that bigger stores have an economy of scale that gives them an edge.

So, if you can’t beat the bigger stores on price, you need to beat them with better, more helpful, happier employees. Keeping those employees happy (i.e., with the benefits package Marren described) will go a long way toward gaining the loyalty and quality effort you need to succeed.

Don’t Forget to Clear Away the Red Tape

Everyone’s favorite part of starting a business is obtaining the permits and opening bank accounts, right?

Maybe not, but it’s the same situation as ever when you’re starting a hardware store.

You’ll need to register your business with the secretary of state, obtain a tax identification number from the IRS, and open business bank accounts.

Establish revolving lines of credit with your hardware distributors as well as with your financiers, if you have them, whether they are traditional banks or online lenders.

Depending on where you’re setting up shop, you may need specific local, state, and city permits—and you might want to visit with an attorney or accountant familiar with local standards to make sure you’re in compliance.

Finally, get the right insurance: If you have employees (and it’s doubtful you’ll be running one of these stores all on your own), you need workers’ compensation insurance; a commercial insurance policy that covers the store inventory against loss or injury claims from customers.  

These steps formalize your business. You’re now in the hardware store game.

Be Open to Change

Your hardware store will hardly be a static entity. As the home ownership market changes, the seasons shift, or new challenges (and challengers) enter the scene, you’ll need to adapt your inventory, marketing campaigns, and staffing needs.

What should remain consistent is that you:

• Continue to maintain inventory levels so that you’re never out of stock at a crucial moment.
• Your commitment to keeping your staff informed and engaged is unwavering.
• Always look to growth within your niche rather than overextending yourself.

As Marren puts it: “We take a more ecological view of the market—we fit a niche. We’re not in the business of putting other local stores out of business.”

After all, since you’re starting a hardware store, you’re in the business of helping people improve their homes, and by extension, their lives. Conduct your business appropriately.

The post The Economics of Starting a Hardware Store appeared first on Fundera Ledger.

from Fundera Ledger https://www.fundera.com/blog/starting-a-hardware-store

SBA Loan Vs. Line of Credit: Which Is Right for Your Business?

If you’re looking for financing for your small business, you probably know that there are many options for you to consider.

You might be struggling with which to choose, and that’s why we’re here to help.

If you’re grappling between an SBA loan vs. line of credit—you’ve come to the right place.

SBA Loan Vs. Line of Credit: A Deep Dive

Before diving into which financing option might be best for your business, we’ll break down each of these excellent loan products.

Read on to explore what they are, what you need to qualify, plus the pros and cons of each.

What Is an SBA Loan?

First up in the SBA loan vs. line of credit debate: SBA loans.

An SBA loan is a long-term, low-interest small business term loan partially guaranteed by the government.

Note that the U.S. Small Business Administration does not administer the loans themselves. Rather, an accredited bank provides the loan under the pretense that the loan is backed by the SBA.  

This means the bank incurs less risk in lending SBA loans, meaning it is more likely to get approved (but certainly not easy to qualify for).

The SBA loan programs let you borrow money for nearly any business purpose—including adding to working capital, purchasing inventory or equipment, refinancing other debts, buying real estate, or even funding the acquisition of other businesses.

What Do I Need to Qualify?

Various factors contribute to qualifying for an SBA loan, but these are the general requirements:

• At least 2 years in business
• At least a 620 credit score
• At least $100,000 in annual revenue

What You Need to Know

Here’s what an SBA Loan can get you:

• Maximum loan amount: $5,000-$5 million
• Loan term: 5-25 years
• Interest rates: Starting at 6.5%
• Access to capital: As little as 3 weeks

How Do I Apply?

Many large and local banks offer SBA loans, but for an easier and quicker process, you can apply online.

Benefits of an SBA Loan

Here’s why you’d want to go with an SBA loan vs. line of credit:

• SBA loans consist of some of the lowest down payments on the market.
• They have some of the longest payment terms—meaning lower monthly payments over a longer period of time.
• SBA loans have very reasonable interest rates—some of the best on the market.
• The interest rates are also stable—once you qualify for a certain rate with a term loan, it’s guaranteed through the life of the loan.
• SBA loans are suitable for a wide range of business purposes.

Downsides of an SBA Loan

Here’s why you might want to skip out on an SBA Loan:

• The application process can be very complicated, with lengthy paperwork. If you need cash fast, this may not be the route to go.
• Additionally, it will take longer to get approved for your loan.
• SBA loans often require collateral, which isn’t a fit for every business.
• Closing costs and interest rates for term loans are typically higher.
• Typically requires a strong credit score.
• Once you use up all the loan funds, you’ll need to reapply for a new loan to gain more access to capital, which can be quite a hassle.

So, what does the other side look like?

What Is a Business Line of Credit?

Next in the SBA loan vs. line of credit debate, we’ll explore business lines of credit.

A business line of credit works a lot like a credit card. You get access to a set amount of financing, but you only make payments and incur interest on the funds you use. Plus, a business line of credit comes in cash—whereas a cash advance from a credit card can be very expensive.

Most lines of credit are “revolving,” which means you can tap into them again and again. As opposed to a term loan, which only gives you a set amount once.

For instance, if you have a $25,000 line of credit and take out $10,000, you still have access to the remaining $15,000 if you need it. Once you make payments on that $10,000 until it is back down to $0, you will have access to the entire $50,000 again without having to reapply for more cash.

What Do I Need to Qualify?

At a minimum, you’ll need:

• To have been in business at least 6 months
• At least $50,000 in annual revenue

What You Need to Know

A business line of credit gives you capital to meet a whole variety of business needs. Draw on your business line of credit to get more working capital, buy inventory, handle seasonal cash flow gaps, pay off other debts, or address almost any other business emergency or opportunity.

• Maximum loan amount: $10,000 to over $1 million
• Loan term: 6 months to 5 years
• Interest rates: 7% to 25%
• Access to capital: As little as 1 day

How Do I Apply?

You can get a traditional line of credit through your bank, but if you do not qualify or need access to a line quickly, you can apply online.

Benefits of a Business Line of Credit

Here’s why a business line of a credit might be a good option for your business:

• A line of credit typically has a lower interest rate and closing costs than a loan of comparable size.
• Lines of credit can be secured or unsecured business loans, meaning you don’t always need to have collateral to secure the loan.
• You only pay interest on the funds you use.
• Business line of credit gives you access to capital whenever you need it (up to a certain amount).
• Business lines of credit are suitable for a wide range of business purposes.
• You don’t always need to have good credit to qualify with certain lenders, particularly online lenders.
• It’s an easy, accessible way to build your credit score.

Downsides of a Business Line of Credit

Here’s why you might not want a business line of credit:

• Interest rates aren’t always stable. If you’re late with a payment or go over your borrowing limit, your interest rate may increase substantially.
• You can get a business line of credit with a low credit score, but the interest rates will be much higher.

SBA Loan vs. Line of Credit: How Do You Choose?

Now that you know exactly what an SBA loan vs. line of credit has to offer—how do you choose?

Term loans are better when you need financing for a very specific purchase. A line of credit is best to have on hand in case of emergency and to give your business some financial breathing room.

Business lines of credit are best for short-term financing needs. You don’t want to tie up your business line of credit paying for long-term investments, or you won’t have access to it in an emergency, limiting your flexibility—which is the whole point of a line of credit.

Working with a company that’s experienced in matching businesses with financing sources can make sure that you find the perfect type of small business loan for you.

What an SBA Loan Is Good For

• Large purchases or investments
• Funding expansion
• Funding a franchise

What a Business Line of Credit Is Good For

• Payroll
• Seasonal expenses
• Emergencies
• Temporary cash flow shortages  

Essentially, you can decide between an SBA loan and a business line of credit based on how much capital you need, what you need it for, and how you intend to use it.

You might even want both to address your long- and short-term financing needs.

Once you factor in all of those variables, see what you qualify for and go from there. You might want to work with an experienced small business loan professional who can help you make the right decision. Whatever you do, be sure to compare rates between many different companies.

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from Fundera Ledger https://www.fundera.com/blog/sba-loan-vs-line-of-credit