5 Questions to ask when deciding on an SBA Loan

25 June 2019

Capital is to a business what oxygen is to a plant. Without it, the business cannot grow and will very likely starve and die. Businesses find their capital in a variety of ways. Some simply have wealthy owners or investors who are willing to take the risk and provide the business the funding it needs to get started up and to take on major projects. Others sell stocks or bonds in the hopes of raising enough cash. While this may be the ideal situation for most businesses, it is not what most end up doing. For most businesses, the standard way to raise money is to get a business loan from a bank.

The government knows this and has created a number of programs trying to help American small business succeed. For instance, the Small Business Administration, or SBA, has several different types of loans that are meant to privilege small businesses and help them grow. These are usually a great option for most small businesses. Is an SBA loan right for your business? Here are a few questions you should ask yourself.

1. Do I have all the information the bank will need?

Since SBA loans are secured by the government, they have a standardized set of required information that must be sent into the bank. A few highlights from this list are:

A well thought out business plan
A business license
A business credit report
Business tax returns
Resumes of key personnel
Personal tax returns
Personal financial statements from stakeholders with more than 20% of the business

As you can see, the requirements here are rather extensive. The SBA is trying to minimize the default risk on these loans that they are ensuring.

2. Is my business eligible?

SBA loans are meant to be accessible, but that doesn’t mean that everyone will be able to get one. The program does not rely on taxpayer money, so it takes steps to remain solvent. To be eligible, your business must be based and operate out of the United States. It must also work within an approved (though very large) list of industries. You must show that you are not able to get the same credit at reasonable terms through other means and also be below size requirements, typically meaning less than $15,000,000 in annual revenue.

3. Why am I seeking a loan?

This is a good question to ask whether it is a personal or business loan. When seeking business credit, you must make sure your motivation is correct. Too many business owners get stuck financing vanity projects or trying to keep up cash flows with borrowed money when they really need to fix the root problem. It is always a good idea to speak with an accountant or financial professional before taking on business debt. Not only can they advise you if it is the best course of action, but they can also help you structure the business and the debt itself in the best way for your company.

4. Should I get an SBA Express loan?

Knowing what kind of loan you need is just as important as knowing whether you need a loan or not. The SBA has six major categories of loans, so you will need to do your research before deciding which is right for you. For instance, there are options for businesses that need money quickly. The SBA Express loan program can get you approved for a loan in as little as 36 hours, much faster than the standard three months for most loans. If you need money now, it is there for you, but only if you are financing for the right reasons.

5. How will I pay it back?

Loans are a normal part of business, and many businesses would not be where they are today without the financial help they received early on. That said, having a repayment plan is just as critical as every other step of the process. The bank you take your SBA loan out with will be more than happy to help you plan out how to repay them. It is worth noting that SBA loans do have an extra fee attached, anywhere from below 1% to around 3.5%. This is to make sure the program can stay solvent going forward since it does not receive taxpayer money, as previously mentioned. This fee is amortized over the life of the loan and is simply added into the payments you already have to make, so it is not even an out of pocket expense you need to budget for.

This is certainly not an exhaustive list of questions. Anytime you are considering borrowing money, you need to do a tremendous amount of research and make sure that it is really the right decision for your business. Ultimately, you are the only one that will know whether or not this is the right course of action. Some business owners cite their gut feeling on this, others have methodologies for deciding. Regardless of your process speak to an expert about your financing options. Your business will thank you!

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5 Ways to Become a Profitable Landlord

Becoming a landlord is an appealing prospect to many, with the opportunity to make long-term investments. However, there is also a common belief that becoming a landlord is a way to get rich quick, but this is rarely the case. In fact, being a landlord can be a lot of hard work, requiring dedication, knowledge, and skill to turn a profit. To help boost your earnings, here are 5 ways to become a more profitable landlord. Treat Being a Landlord as a Business : Firstly, in order to boost profit, you need to know your figures. This means more than calculating how much you can afford when looking to buy property, but also fully understanding the actual return on investment. This is where rental yield is essential. Calculated as a percentage of the property’s value, yield shows yearly rental income compared to the investment price. The higher the percentage, the higher the yield and therefore, the bigger the income. Read here to find out more about rental yield. Stick to Areas You Know : When investing in property, it may be tempting to buy in another location that offers more attractive rental yields, or an area has been deemed as up and coming. However, this may mean buying in the property market that you are unfamiliar with, which can pose a larger risk. As such, it may be a good idea to stick to areas you know. This is particularly true for early investments, as securing a profit is essential to building a successful portfolio. Invest in Property Upkeep : In order to boost the profitability of your portfolio, you may want to spend as little money as possible. While this works in theory, properties require continual upkeep and investment. Often, this required some simple DIY, such as repainting a property before a new tenant moves in. Although this is an additional expense, a clean and modern interior could make your property more attractive to prospective tenants and boost rental value. Ensure Tenants are Happy : There is one thing that landlords dread: a vacant property. Not only does this mean zero income – while the mortgage, council tax and insurance must still be paid – but an empty property is also at a higher risk of being broken into. When aiming to keep a property leased, think about the needs of your tenants. After all, happy tenants are likely to stay for a longer period, reducing turnover. To do this, in addition to property upkeep, thoroughly screen applications and address maintenance issues in a timely manner. Consider Letting Through an Agent : Lastly, in order to increase your profit margin, you could consider letting as a private landlord. However, this can be time-consuming, meaning you would be responsible for dealing with tenant screening and repairs. In this instance, it may be a good idea to let through an agent. While this will carry a monthly fee, it can save you a lot of time – especially if you own multiple properties – allowing you to build your property portfolio or continue to work. Being a landlord can be difficult, but it can also be rewarding, both personally and financially. To help you get more out of your portfolio, you could consider these tips. However, these suggestions alone are not enough – it is also important to thoroughly research every potential investment.

7 Reasons Why Teenagers Pay Extra For Car Insurance

Car insurance for teenagers is more expensive than experienced drivers. Teenagers, who are at a very young and vulnerable stage of life, often lack any formal driving experience. They learn the skills of driving in this age and polish it with practice. The motor vehicle associations understand the susceptibility of their age and therefore the cost of car insurance for teenagers is higher. In order to understand this concept in detail, we have laid down 7 reasons that “why teenagers pay extra for car insurance”: No Proven Track Record of Driving The insurance companies consider the driving history of the applicant before issuing insurance premiums. In the case of teenagers, there is no proven track record of driving. Since they are at the beginner’s stage of learning, there is no evidence to support their expertise on the road. The risk factor stays high in this case. In general, the people who have proven driving track record without any mention of traffic violations and accidents in their names can avail significant discounts on their car insurance policies. The insurance companies need some statistical proof to make a judgment about the driving skills of applicants- which is not possible in the case of teenagers. Therefore, they cannot assume whether the teenage driver is a safe or reckless driver. In order to cover their risk, they raise the cost of car insurance for teenagers to ensure some safety measures. However, at the age of 19, the insurance plan becomes affordable as you already have 1-2 years driving experience by this time. You can get car insurance here for 19 years olds. Lack of Experience It takes time in learning a skill and achieving expertise in it. Learning to drive certainly takes more time and effort as we face different situations every day on the road. The young drivers need to dedicate a lot of practice hours to polish their skills before they can take their own vehicle independently on the road. The amount of time spent behind the wheel is a considerable factor in enhancing the driving abilities of young drivers. In the case of teenagers, their lack of experience can put them to test while facing real-life driving situations. Their reaction time may be slower than an experienced driver which is much needed when you are in actual driving practice. It is often seen that the young drivers get into a panic very easily when they face unusual situations on the roads. There are research studies to support the fact that most of the accidents that involve youngsters are due to their delay in reaction to the situations that prevail. Emotional Distraction Young people often get stuck with emotional issues. Their vulnerable age often brings out the “rebellious” attitude which may result in anger, sadness, extreme happiness, excitement, overreaction, anxiety, etc. They have very less understanding of dealing with their own emotions which may cause serious troubles while driving. For example- despite many public advertisements, youngsters use their mobile phones while driving. The overconfidence can lead to the accident-prone situation very easily. Youngsters often pool their vehicles and go for diving expeditions. Mutual talking and discussions while driving can distract their attention from the road. It is also common for youngsters to appreciate unusual sights on the road and get diverted from their driving spree. Insurance companies take these facts into account and use substantial proofs to put forth their risk level before issuing car insurance to teenagers. Increased Tendency Towards Speed and Racing There is no denial of the fact that teenagers love formula races and speed games. When they sit behind the steering, they get tempted to race with the cars on their track. Sometimes they have their own bunch of friends racing while driving. The scientific studies have reported that teenagers are easily aggravated by smoking, drugs and alcoholic tendencies. Under the influence of these factors, they may be instigated to adopt risky behaviors while driving. The understanding of the risks and their implications can be attained only with age and experience. The insurance companies state that the lower rates of premiums for the experienced drivers are supported by the statistics that prove that they are less prone to accidents as compared to teenage drivers. The Risk of the Insurance Companies The teenage drivers are at a higher state of financial risks for the insurance companies. The higher the probability of being at risk of accidents raises the probability of higher expenditure of the insurance companies. Therefore, in an attempt to cover the risks associated with the young drivers, they raise the cost of the policy. The Statistical Proofs We have already discussed various factors that may cause teenagers to become riskier while driving. It should be mentioned that our studies are based on statistical findings from various reports. These reports emphasize the high probability of teenage drivers being involved in road accidents. The data has been collected by the years of research that bring the car insurance firms at a higher edge of risk. The Make and Model of the Vehicle We often get to hear that the teenagers are gifted their “favorite vehicle” on their birthday or any other occasions. Although this practice is popular in rich and affluent families, these days even the middle-class segment has roped into the trend. Thanks to the easy loaning facilities! However, parents often forget about the risk associated with allowing teenagers to drive new and expensive cars with high-speed parameters. The insurance companies charge more from their clients who want to purchase insurance of a premium car for their teenager ward. The reason is clearly stated- higher speed parameters of the vehicle are directly proportional to the high financial risk factor of insurance companies. Conclusion Teenagers pay extra for car insurance due to the high amount of risk associated with their age and the levels of maturity. There are facts to support the rash driving incidents leading to fatal accidents in many cases that involve teenagers. Therefore, the higher rates of insurance are just a precautionary measure by the insurance companies. They intend to ensure that the applicant, as well as the company, must be fully prepared to deal with the possible risky outcomes due to driving errors. Higher is the risk of the insurance company, higher is the cost of the premium. Read Also : Tips For Reducing Car Insurance Costs Tips To Lower Your Insurance Costs

Investing In Gold And Silver Bullion

Gold and silver bullion investments are an appealing way for investors to diversify their portfolios, while still carrying some risks. Bullion prices often fluctuate and potential risks should be carefully evaluated. Bullion is an investment-grade precious metal purchased and traded primarily for its intrinsic value, taking various forms such as bars, ingots, and coins. How to Purchase When purchasing bullion, your first step should be finding a trusted precious metals dealer. Your chosen dealer should be licensed to sell what you're after while having a great track record for customer service and offering competitive pricing. You can visit this site for more information about licensing. Once you've identified several dealers, compare prices to ensure that you find the best possible deals before taking into account additional expenses like shipping and insurance costs for an accurate picture of how much your purchase will cost in total. Bullion can take many different forms, so you need to decide the appropriate form for your investment goals. Coins and bars are popular options because they have low premiums over spot prices and can easily be stored. Bars also provide an effective way of investing in large quantities at once. No matter which form you opt for, your bullion should always remain in mint condition as investors will pay more for pieces without scratches or extensive tarnishing. Your metals may be vulnerable to natural hazards like fire and flood as well as theft if stored at home, so if this is your choice then make sure it is stored in an approved, fireproof safe. Bank safety deposit boxes offer another form of home storage; however, these depositories are only accessible during banking hours and may not offer protection from disaster or theft. Furthermore, their contents could be disclosed under Patriot Act rules. You can click the link: https://www.congress.gov/ for more information. One alternative to keeping your bullion safe at home is using a reliable bullion vault storage service where storage services are secured with non-bank depository banking and cost less than private safes. How to Store Bullion bars and coins provide a safe way of investing your wealth but must be stored carefully so as not to suffer damage or tarnish. Bullion dealers will often offer premium pricing on well-preserved bullion as it becomes more desirable among their buyers. Home storage of bullion is often the safest, most private way to safeguard gold, silver, and other precious metals - although this requires investing in a safe or vault and additional security measures such as cameras or alarms. Bank storage of bullion may also be an option, though this has privacy-related disadvantages. Safety deposit boxes at banks aren't insured against seizure by government agencies or creditors, plus staff must report what's inside your safe deposit box, potentially opening you up to identity theft risks. You could add riders onto your homeowner's policy that cover bullion but this also comes at a privacy cost. Utilizing professional bullion storage services is another alternative option. Many storage providers offer allocated storage, meaning your metal will remain physically separate from other customers' metals and does not appear on their balance sheet. When you request its return, you will receive exactly the same metal you deposited initially. Handle your bars or coins carefully when dealing with them - never mix pristine and tarnished metals together as this could damage their value and reduce their worth. Always clean your hands prior to touching either a coin or bar and use hand sanitizers if necessary; lay out a soft towel or cloth beneath them just in case you drop them, and refrain from speaking over or breathing over them as this could harm their integrity. Self-storage facilities may be ideal for those who prefer hands-off storage solutions, as they typically charge lower monthly fees than bank vaults while still being secure and closely monitored. How to Use Precious metals are popular investments because they're considered "hard assets." Unlike stocks, bonds, cryptocurrency tokens, or non-fungible tokens (NFTs), bullion is tangible and can be held directly. Not only does its value tend to hold steady over the long haul but it can even increase! Bullion can serve as a valuable hedge against inflation and other financial market risks and is usually stamped with its weight and percentage of precious metal content or purity to enable investors to accurately determine its current market value. Gold and silver bullion is traded globally on major markets. Investors can purchase physical precious metals directly through online dealers or exchange-traded funds (ETFs) that track the spot prices of gold and silver. Bullion can be difficult to pin down since its definition can vary depending on who's using the term and their understanding of it. Bullion refers to items valued for their precious metal content rather than any form of government backing or backing from external entities. Coins, rounds, and bars that meet the high purity standards needed for investment purposes may qualify. But the term can also refer to more common U.S. coins like pre-1965 90% silver eagles which often sell at relatively low premiums over their spot price. Collectors and investors seeking to distinguish among different forms of bullion can find it invaluable to distinguish among their options. The more refined and pure the piece of metal is, the higher its premium will be over its spot price; therefore investors tend to seek high-purity bullion from reliable dealers. How to Invest Bullion investments can be an intelligent strategy for individuals looking to diversify their portfolios. But before buying any precious metals, it is crucially important that you understand their valuations and your responsibilities before proceeding with purchases. Bullion, or a pure form of precious metals like gold and silver, is often sold through precious metal dealers both online and at physical shops, where you can have them delivered or stored for you at a fee. Investors frequently use bullion as a hedge against inflationary events that create economic uncertainty that drive prices higher for precious metals like bullion. Traditional investors typically purchase physical gold and silver coins and bars stamped with their weight and purity. You can visit InvestingInGold.com to learn more about the process of buying physical precious metals for your investment portfolio. It is essential to research any company you are considering working with in order to ensure they are reputable. Investing in gold and silver may seem intimidating to some investors; however, these individuals can still reap its benefits by purchasing ETFs that track its price movements; these funds can then be easily traded as opposed to physical ownership of bullion. Importantly, unlike stocks, bullion does not generate dividends and capital appreciation; however, some individuals may find its volatility attractive as it protects savings against larger losses during recessions and other economic difficulties. Many new precious metal investors may feel intimidated by specialized terminology like bullion. Before making any definitive decisions regarding bullion investments, it is vitally important to research spot prices, compare dealers, and research different products available before deciding how much bullion to purchase. You want enough bullion invested to see significant returns when prices increase but not so much that its value drops significantly when prices decrease. This is why many experts recommend investing ten percent of your retirement savings in alternative investments, such as precious metals. Read Also: What Will A Financial Retirement Plan Including Gold Look Like Investors Agree: Gold And Silver Is The Way To Go 5 Fun Facts About The American Eagle Gold Coin

5 Questions to ask when deciding on an SBA Loan

1. Do I have all the information the bank will need?

2. Is my business eligible?

3. Why am I seeking a loan?

4. Should I get an SBA Express loan?

5. How will I pay it back?

7 Reasons to Apply for a Loan Online

Bitcoin Profit Review 2019

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Content Rally wrapped around an online publication where you can publish your own intellectuals. It is a publishing platform designed to make great stories by content creators. This is your era, your place to be online. So come forward share your views, thoughts and ideas via Content Rally.

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5 Ways to Become a Profitable Landlord

7 Reasons Why Teenagers Pay Extra For Car Insurance

Investing In Gold And Silver Bullion

5 Questions to ask when deciding on an SBA Loan

1. Do I have all the information the bank will need?

2. Is my business eligible?

3. Why am I seeking a loan?

4. Should I get an SBA Express loan?

5. How will I pay it back?

Share this Article

7 Reasons to Apply for a Loan Online

Bitcoin Profit Review 2019

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Content Rally wrapped around an online publication where you can publish your own intellectuals. It is a publishing platform designed to make great stories by content creators. This is your era, your place to be online. So come forward share your views, thoughts and ideas via Content Rally.

Leave a Reply

Popular

Follow Us

Recent

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