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Casual Articles - Tips For Establishing Business Credit Fast
Have you noticed how suddenly everyone’s kissing. I’m not talking continental kissing, pecking one cheek, and then the other. I mean a bit of a hug then a kiss on the cheek or the side of the face at least. And it’s not just extended family and very close friends here. Though certainly they’re at it too. No, I mean kissing in a business context. Seems to me the rule is, if you have ever met the person before even just once, then you greet them with a kiss. Male-female kiss, yes. Female-male kiss, sure. Female–female absolutely. Male-male, actually I’m not sure. Maybe my readers can enlighten me.Everyone’s doing it. Bank manager and customer. Boss and employee. Next door neighbours. Client and accountant. Any old colleague. They’re all welcoming each other with a little muffle and a scuffle around the cheek and lip area. Granted, not a full smackaroony, I’m talking fuzzy, huggy
The primary financial statements are represented in the balance sheet and income statement. Learn more about these statements
BALANCE SHEET
The balance sheet is a snapshot of the company's financial standing at an instant in time. The balance sheet shows the company's financial position, what it owns (assets) and what it owes (liabilities and net worth). The "bottom line" of a balance sheet must always balance (i.e. assets = liabilities + net worth). The individual elements of a balance sheet change from day to day and reflect the activities of the company. Analyzing how the balance sheet changes over time will reveal important information about the company's business trends.
INCOME STATEMENT
Known also as the profit and loss statement, the income statement shows all income and expense accounts over a period of time. That is, it shows how profitable the business is. This financial stat
Are you interested in trading futures? If you are, you may be wondering whether or not you should use the services of a commodity trading broker. While the decision as to whether or not you want to work with a commodity trading broker is yours to make, you should know that there a number of benefits to doing so. Just a few of those benefits are touched on below.One of the many benefits to using the services of a commodity trading broker is the knowledge that you may gain. A commodity trading broker is a professional who has an extensive knowledge and understanding of the trading of futures. When using the services of a commodity trading broker, that individual will share their knowledge and insight with you. Although it is advised that you first familiarize yourself with futures trading and investing, before you start, a commodity trading broker can help you better understand futures trad
Borrowing money is one of the most common sources of funding for a small business, but obtaining a loan isn't always easy. Before you approach your banker for a loan, it is a good idea to understand as much as you can about the factors the bank will evaluate when they consider your loan. This discussion outlines some of the key factors a bank uses to analyze a potential borrower. Also included is a self-assessment checklist at the end of this section for you to complete.
Key Points to Consider
Some of the key points your banker will review:
1. Ability/Capacity to Repay
The ability to repay must be justified in your loan package. Banks want to see two sources of repayment - cash flow from the business, plus a secondary source such as collateral. In order to analyze the cash flow of the business, the lender will review the business past financial statements. Generally, banks feel most comfortable dealing with a business that has been in existence for a number of years, as they have a financial track record. If the business has consistently made a profit and that profit can cover the payment of additional debt, then it is likely the loan will be approved. If, however, the business has been operating marginally and now has a new opportunity to grow, or if that business is a startup, then it is necessary to prepare a thorough loan package with a detailed explanation addressing how the business will be able to repay the loan.
2. Credit History
One of the first things a bank will determine when a person/business requests a loan is whether their personal and business credit is good. Therefore, before you go to the bank or even start the process of preparing a loan request, make sure your credit is good
3. Equity
Financial institutions want to see a certain amount of equity in a business. Equity can be built up through retained earnings or the injection of cash from either the owner or investors. Most banks want to see that the total liabilities or debt of a business is not more than 4 times the amount of equity. (Or, stated differently, when you divide total liabilities by equity, your answer should not be more than 4.) Therefore, if you want a loan, you must ensure that there is enough equity in the company to leverage that loan.
Don't be misled into thinking that startup businesses can obtain 100% financing through conventional or special loan programs. A business owner usually must put some of his/her own money into it. The amount an individual must put into the business in order to obtain a loan is dependent on the type of loan, purpose, and terms. For example, most banks want the owner to put in at least 20 - 40% of the total request.
Example: A new business needs a $100,000 to start. The business owner must put $20,000 of his/her own money into the new business as equity. His/Her loan will be $80,000. The debt to equity ratio is 4:1. Note that this is only one of many factors used to evaluate the business - simply having the right debt to equity ratio does not guarantee you'll get the loan.
The balance sheet indicates the amount of equity or net worth of a business. The net worth of the business is often a combination of retained earnings and the owner's equity. In many cases, an owner's equity will be shown as a loan from shareholders, and is therefore a liability. If a business owner wishes to obtain a loan, he/she will be obligated to pay the bank back first, not his/herself. Consequently, it may be necessary to restructure the liability so that it becomes the owner's equity, or subordinate the loan. If the current debt to net worth is 4 or over, it is unlikely that the business will be able to obtain additional debt/loan. Understand your financial statements.
Understanding Financial Statements:
The primary financial statements are represented in the balance sheet and income statement. Learn more about these statements
BALANCE SHEET
The balance sheet is a snapshot of the company's financial standing at an instant in time. The balance sheet shows the company's financial position, what it owns (assets) and what it owes (liabilities and net worth). The "bottom line" of a balance sheet must always balance (i.e. assets = liabilities + net worth). The individual elements of a balance sheet change from day to day and reflect the activities of the company. Analyzing how the balance sheet changes over time will reveal important information about the company's business trends.
INCOME STATEMENT
Known also as the profit and loss statement, the income statement shows all income and expense accounts over a period of time. That is, it shows how profitable the business is. This financial state
Patents had been long identified as most valuable informational source of the technical and competitive informations. During the last few years these have gained a lot more attention. Due to increase in the globalization and competition, it is very important for the companies to protect their innovations and also make their R&D activities more efficient. India is well recognized as a knowledge hub, due to it’s highly talent pool. A lots of IP services providers; emerge in India during the last few years. Most of them have are being started by 2-3 people with their contacts in mostly in US. Now these firms are become the giant in providing specialized IP services. Lots of Indian law professional and law firms are also now trying to enter into the market to provide the highest quality analysis and research services.Most of these companies are located in the Bombay, Delhi, Hyderabad and Ban
2. Credit History
One of the first things a bank will determine when a person/business requests a loan is whether their personal and business credit is good. Therefore, before you go to the bank or even start the process of preparing a loan request, make sure your credit is good
3. Equity
Financial institutions want to see a certain amount of equity in a business. Equity can be built up through retained earnings or the injection of cash from either the owner or investors. Most banks want to see that the total liabilities or debt of a business is not more than 4 times the amount of equity. (Or, stated differently, when you divide total liabilities by equity, your answer should not be more than 4.) Therefore, if you want a loan, you must ensure that there is enough equity in the company to leverage that loan.
Don't be misled into thinking that startup businesses can obtain 100% financing through conventional or special loan programs. A business owner usually must put some of his/her own money into it. The amount an individual must put into the business in order to obtain a loan is dependent on the type of loan, purpose, and terms. For example, most banks want the owner to put in at least 20 - 40% of the total request.
Example: A new business needs a $100,000 to start. The business owner must put $20,000 of his/her own money into the new business as equity. His/Her loan will be $80,000. The debt to equity ratio is 4:1. Note that this is only one of many factors used to evaluate the business - simply having the right debt to equity ratio does not guarantee you'll get the loan.
The balance sheet indicates the amount of equity or net worth of a business. The net worth of the business is often a combination of retained earnings and the owner's equity. In many cases, an owner's equity will be shown as a loan from shareholders, and is therefore a liability. If a business owner wishes to obtain a loan, he/she will be obligated to pay the bank back first, not his/herself. Consequently, it may be necessary to restructure the liability so that it becomes the owner's equity, or subordinate the loan. If the current debt to net worth is 4 or over, it is unlikely that the business will be able to obtain additional debt/loan. Understand your financial statements.
Understanding Financial Statements:
The primary financial statements are represented in the balance sheet and income statement. Learn more about these statements
BALANCE SHEET
The balance sheet is a snapshot of the company's financial standing at an instant in time. The balance sheet shows the company's financial position, what it owns (assets) and what it owes (liabilities and net worth). The "bottom line" of a balance sheet must always balance (i.e. assets = liabilities + net worth). The individual elements of a balance sheet change from day to day and reflect the activities of the company. Analyzing how the balance sheet changes over time will reveal important information about the company's business trends.
INCOME STATEMENT
Known also as the profit and loss statement, the income statement shows all income and expense accounts over a period of time. That is, it shows how profitable the business is. This financial stat
If you are the owner of a restaurant, bar or lounge then restaurant equipment is the most important investment you will have to make. Because restaurant equipment is not very cheap you will have to take good care of your appliances to properly maintain them and perform periodical check-ups in order to benefit the most from your investment. There are many different measures you can take in order to preserve your equipment’s value and to maintain it in good working condition if you want to ensure that your appliances will last for a long period of time.The most common piece of equipment found in restaurants is the commercial oven. Commercial ovens can be further subcategorized into deck ovens, barbecue roaster ovens and barbeque grills, countertop and conveyor ovens, char-broilers and convection ovens. The easiest way to maintain an oven is to clear the oven cavity from spills on a daily basis
Don't be misled into thinking that startup businesses can obtain 100% financing through conventional or special loan programs. A business owner usually must put some of his/her own money into it. The amount an individual must put into the business in order to obtain a loan is dependent on the type of loan, purpose, and terms. For example, most banks want the owner to put in at least 20 - 40% of the total request.
Example: A new business needs a $100,000 to start. The business owner must put $20,000 of his/her own money into the new business as equity. His/Her loan will be $80,000. The debt to equity ratio is 4:1. Note that this is only one of many factors used to evaluate the business - simply having the right debt to equity ratio does not guarantee you'll get the loan.
The balance sheet indicates the amount of equity or net worth of a business. The net worth of the business is often a combination of retained earnings and the owner's equity. In many cases, an owner's equity will be shown as a loan from shareholders, and is therefore a liability. If a business owner wishes to obtain a loan, he/she will be obligated to pay the bank back first, not his/herself. Consequently, it may be necessary to restructure the liability so that it becomes the owner's equity, or subordinate the loan. If the current debt to net worth is 4 or over, it is unlikely that the business will be able to obtain additional debt/loan. Understand your financial statements.
Understanding Financial Statements:
The primary financial statements are represented in the balance sheet and income statement. Learn more about these statements
BALANCE SHEET
The balance sheet is a snapshot of the company's financial standing at an instant in time. The balance sheet shows the company's financial position, what it owns (assets) and what it owes (liabilities and net worth). The "bottom line" of a balance sheet must always balance (i.e. assets = liabilities + net worth). The individual elements of a balance sheet change from day to day and reflect the activities of the company. Analyzing how the balance sheet changes over time will reveal important information about the company's business trends.
INCOME STATEMENT
Known also as the profit and loss statement, the income statement shows all income and expense accounts over a period of time. That is, it shows how profitable the business is. This financial stat
Remember in two previous articles we talked about sustainable marketing and 4 ways your stationery was killing the environment? And by the way costing you more money too!In the most recent article we talked about the way stationery is printed affects the environment. Now I want to talk about how you can market more sustainably and save money at the same time! Hurrah! What Can You Do For Marketing Sustainability? There are a number of routes to sustainability success. These include the following: Using PDF for brochures, reports and pitches Using webinars to impart information to clients, suppliers, teams, prospects ... Making more use of integrated (and targeted) email Using cleaned mailing lists Cleaning in-house mailing lists Using environmentally friendly materials, such as papers and ink U
The balance sheet indicates the amount of equity or net worth of a business. The net worth of the business is often a combination of retained earnings and the owner's equity. In many cases, an owner's equity will be shown as a loan from shareholders, and is therefore a liability. If a business owner wishes to obtain a loan, he/she will be obligated to pay the bank back first, not his/herself. Consequently, it may be necessary to restructure the liability so that it becomes the owner's equity, or subordinate the loan. If the current debt to net worth is 4 or over, it is unlikely that the business will be able to obtain additional debt/loan. Understand your financial statements.
Understanding Financial Statements:
The primary financial statements are represented in the balance sheet and income statement. Learn more about these statements
BALANCE SHEET
The balance sheet is a snapshot of the company's financial standing at an instant in time. The balance sheet shows the company's financial position, what it owns (assets) and what it owes (liabilities and net worth). The "bottom line" of a balance sheet must always balance (i.e. assets = liabilities + net worth). The individual elements of a balance sheet change from day to day and reflect the activities of the company. Analyzing how the balance sheet changes over time will reveal important information about the company's business trends.
INCOME STATEMENT
Known also as the profit and loss statement, the income statement shows all income and expense accounts over a period of time. That is, it shows how profitable the business is. This financial stat
Do not be fooled by those who CLAIM to provide you with 10,000, 20,000, 200,000 or even 250,000 text links.You are being conned, what they are offering you are comment links posted on blogs and directories.These are regarded as comment spamming, i,e there is no contextual advertising associated with it.Just random posts with your link tagged to the username, no benefit to any real person viewing the comment, just a trick to fool search engines.What they won't tell you is the majority of blogger and wordpress sites have incorporated measures to prevent comment spamming on their blogs.What they also won't tell you is the majority of blog admins no longer allow search engines to give weight to comments, by adding the following tags in their blogs, Rel=nofollow (in the case of blogger) and Rel="external nofollow" (in t
The primary financial statements are represented in the balance sheet and income statement. Learn more about these statements
BALANCE SHEET
The balance sheet is a snapshot of the company's financial standing at an instant in time. The balance sheet shows the company's financial position, what it owns (assets) and what it owes (liabilities and net worth). The "bottom line" of a balance sheet must always balance (i.e. assets = liabilities + net worth). The individual elements of a balance sheet change from day to day and reflect the activities of the company. Analyzing how the balance sheet changes over time will reveal important information about the company's business trends.
INCOME STATEMENT
Known also as the profit and loss statement, the income statement shows all income and expense accounts over a period of time. That is, it shows how profitable the business is. This financial statement shows what how much money the company will make after all expenses are accounted for. Remember that an income statement does not reveal hidden problems like insufficient cash flow problems. Income statements are read from top to bottom and represent earnings and expenses over a period of time.
4. Collateral
Financial institutions are looking for a second source of repayment, which is often collateral. Collateral are those personal and business assets that can be sold to pay back the loan. Every loan program, even many microloan programs, requires at least some collateral to secure a loan. If a potential borrower has no collateral, he/she will need a co-signer that has collateral to pledge. Otherwise, it may be difficult to obtain a loan.
The value of collateral is not based on market value; that is discounted to take into account the value that would be lost if the assets had to be liquidated.
5. Experience
A client who wants to open a business and has no experience in that business should not seek financing, let alone start the business unless they intend to hire people who know the business or take on a partner that has the appropriate experience. Regardless, the client should be advised to take some time to work in the business first and take some entrepreneurial training classes. Sample Collateral Chart
Questions Your Banker Will Ask
The key questions the banker will be seeking to answer are as follows:
- Can the business repay the loan? (Is cash flow greater than debt service?)
- Can you repay the loan if the business fails? (Is collateral sufficient to repay the loan?)
- Does the business collect its bills?
- Does the business control its inventory?
- Does the business pay its bills?
- Are the officers committed to the business?
- Does the business have a profitable operating history?
- Does the business match its sources and uses of funds?
- Are sales growing?
- Does the business control expenses?
- Are profits increasing as a percentage of sales?
- Is there any discretionary cash flow?
- What is the future of the industry?
- Who is your competition and what are their strengths and weaknesses ?
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