Funding Problem to Start Up a Small Business Where is the Solution

Funding Problem to Start Up a Small Business Where is the Solution

Small business literally means those where the total workers are less than hundred and the capital is also less than a million. This definition varies from country to country but the key point is that it indicates the small scale business or personal business. The small businesses account more than fifty percent of the GDP for a country. Therefore each country put a lot of its concentration in the development of the small businesses. But there is still a problem that every entrepreneurs face at the initial stage, that is finding a start up business loan.

For a young entrepreneur, raising a fund is the most crucial part. This is because most of the people can come with the creative business ideas but when the question is the investment, more than ninety percent entrepreneur does not have the ability to fund the start up cost. And for them the most common solution is the bank loan. But the worst thing is although there are many schemes offered by the banks and other financial institution, getting a loan is still hard like before.

When a person apply for the start up business loan, the bank authority show little respect about his small business ideas and act like that the person will never going to pay the loan. This kind of obstacles often makes the situation hard for the young entrepreneur.

On the other hand, other resources for funding are also limited. Most of the people do not have enough money or property of their own to be self funded. There are different financial organization but, they have a higher rate which is not favorable for the small business. Therefore the bank loan is the most suitable for funding the small businesses.

The SME loans of different banks should be easier to get for the young entrepreneurs. And also more attractive offer should be created from both the bank and the government to aid the small businesses. This will be beneficial for the economy because according to the record, the new employment rate is higher in the small business industries. Also the revenue is also higher from the small and medium businesses.

Qualifying A Legitimate Fundraising Company

Qualifying A Legitimate Fundraising Company

You have been put in charge of running a fundraiser. There are so many considerations that just the thought of fundraising can make you frustrated! What time of year should you do it? What should you sell? How do you run this campaign? There are a lot of different professional fundraising companies out there looking to help you. How do you pick the right one? Here are a few tips and questions to keep in mind when your hunting around:

How long have they been in business? Its the same with any new business you investigate. Have they been around long enough that theyre going to be able to take care of you? If theyve been around awhile they can anticipate your needs and give you some valuable guidance.

Check for references. Will the company give some references of businesses or schools that have used them? Will anybody vouch for them? Are they a member of the Association of Fund-Raising Distributors & Suppliers?

Do they know your state laws for fundraising? Will your potential fundraising company be able to give you specifics on how to declare your taxes? This is important because each state has differences in tax collection. Some states declare that product fundraising is exempt from tax, while in other states these monies are taxable.

How responsive are they? Do they seem reachable if you have a problem? What if something is shipped incorrectly or broken? Do you have to wait days for a response? Can you reach them multiple ways is you need it through a toll free number and email address?

Are they selling a quality product? Its going to be pretty tough trying to sell broken lollipops as a fundraising campaign. Are the products the fundraising company selling going to get much attention from your donors? You get to pick what youre campaign will sell but do they have a catalogue with great options or a limited choice of average items?

Since all fundraising is important, the fundraising company needs provide a solid no hassle service. In the upcoming years, with a pending downturn in the economy and slashing of funding, fundraising companies are going to become increasingly more important for their services.

Businesses and organizations are going to lean heavily on fundraising to supplement their annual budgets in the coming years. The fundraising company you choose, you probably will partner with for several campaigns. Its important you feel they are listening to your needs and a dependable bond will develop between you.

California Companies Save When They Utilize Federal Hiring Credits And Enterprise Zone Credits

California Companies Save When They Utilize Federal Hiring Credits And Enterprise Zone Credits

California-based corporations are on the lookout for ways to save money, and one of the best ways that is often not taken advantage of is to see if your company qualifies for federal hiring credits. These include the newly implemented Hire Act credit. As well, your company may also utilize state enterprise zone credits and the WOTC tax credit. Some of these credits are based upon whom you hire, while others require your corporation to make certain types of business-related purchases. When you add them all up, they can save your California company thousands of dollars off your taxes due.

The Hire Act credit is new, and provides your company that makes new hires during a certain time period qualified for these federal tax credits. This credit is available for tax years 2010 and 2011, and it allows your to deduct up to $1,000 in federal hiring credits for each non-family employee that is hired for at least a year and was hired after February 3, 2010. Your company must have hired the employee because you either had to fill a new position, or you needed to replace an employee who quit or was let go under certain conditions.

Other federal hiring credits include the WOTC tax credit. WOTC stands for Work Opportunity Tax Credit, and it allows your company to take deductions when you hire qualified employees. These employees, which will also often allow your company to deduct additional credits for Enterprise Zones, typically would be on various kinds of public assistance, such as food stamps or SSI. The state and federal tax credits may also be claimed if your company hires qualified ex-felons, certain types of youth hires, and veterans. When you do so, your company can earn WOTC tax credit of up to $6,000 annually or forty percent of the employee’s wages for the first year, granted that the employee meet a certain number of hours worked. Youth hires that qualify may allow your company to deduct up to $3,000, and when those employees who qualified because they were on long-term family assistance are taken into consideration, your company may earn a credit of up to $10,000 or forty percent of the first year’s wages and fifty percent of the second, with certain restrictions. When you see that your employees may qualify your company for multiple state and federal tax credits, you will understand that your savings on taxes can run into the thousands of dollars.

It is always best to seek professional counsel from a certified public accountant in California who has professional experience with federal hiring credits and Enterprise Zone credits, and can tell you specifically for which types of tax credits your company qualifies.

Understanding The Ins And Outs Of A Coffee Franchise

Understanding The Ins And Outs Of A Coffee Franchise

Owning a coffee franchise can be a very rewarding experience, but before you sign on the dotted line and start serving hot cups of ‘joe’, there’s certain things you need to know so you can make the right decision. If you go into buying a coffee franchise blindly, you could end up making a very costly mistake.

First things first, get a reality check. You should know going in what kind of money you have to put towards a coffee franchise, you should understand your strengths and weaknesses in running a business and be very honest with yourself about how much time you’re willing to spend in your business. If you do this, you’ll be way ahead of the curve. Don’t jump into any decision. Take your time, consult with franchise experts and do your due diligence.

The attractive thing about owning a coffee franchise is the cash flow and profit margin. People are drinking coffee today like it’s going out of style and they are happily paying upwards of $3 per cup. The real cost of the coffee is under $.25. The profit margins with coffee are HUGE! On the contrary, only making a few bucks per cup isn’t going to get you a mansion in Beverly Hills. A Coffee franchise is 100% a volume business. You have to crank out thousands of cups per month to see any real income. Some of the most successful coffee franchises have drive-thrus which can make up to 70% of the revenues.

The real secret of a coffee franchise is NOT the coffee, but the atmosphere. People can get coffee anywhere, but they come to these shops because of the social element. They come to hang out, conduct business, surf the web, relax, read a book, whatever. That’s why so many coffee franchises have the relaxing and mellow look and feel to them.

However, there are things about a coffee franchise that aren’t so fun from the very start. First, the high start-up costs can be huge. Not only will you have to pay a hefty franchise fee, but then you have to get a location, you’ll have to get equipment, you’ll have inventory to get, fixed costs, variable costs, employee wages and on and on. The costs can be high. Don’t forget about the royalty fees that are based on gross revenues, not net profits.

Now even if you are financially capable of buying the coffee franchise, that won’t matter because there are more pre-qualifiers you must meet. You’re going to need a considerable net worth, a good credit history but the real challenge is that you have to get approval to buy the franchise. If they don’t like you, they won’t sell you a franchise.

Commercial Mortgage Modification

Commercial Mortgage Modification

In todays crumbling, commercial real estate market, both borrowers and lenders find themselves in quite a precarious predicament. Borrowers struggle to make their commercial mortgage payments, while lenders are crippled by the increasing number of defaults on commercial property. Right now the best solution to this problem is commercial mortgage modification.

Commercial mortgage modification is the process of renegotiating the terms of a commercial loan. This is done typically by reducing the interest rate or monthly payment on the loan. Other benefits to the borrower may include an extension of the loan term, a forbearance or moratorium on payments, and of course an alternative to foreclosure.

A commercial mortgage modification is about risk to the lender. A lender will only consider a modification if a borrower is in default or at risk of defaulting. The most important thing the lender will look at in determining whether or not to modify a commercial note is cash flow. One very important calculation used in determining cash flow is called the DCR or Debt Coverage Ratio. This ratio is used by the underwriters to determine if a modification can be approved. If a property is breaking even, meaning the income generated is equal to the operating expenses, the DCR would be equal to 1. If commercial property has a positive cash flow, meaning the income the property generates is more than sufficient to cover the mortgage payment and all of the operating expenses, the DCR is greater than 1. If the property is losing money, the DCR would be less than 1. A lender will most likely not modify the commercial note, if the property already has a DCR greater than 1. Commercial lenders writing new commercial loans will most likely require a DCR of 1.25 or greater.

The most common form of payment reduction seen in a commercial mortgage modification is when the lender converts a principal and interest payment to an interest only payment. A lender may consider this form of commercial loan modification to help the borrower improve their cash flow. By only paying the interest on the loan, as opposed to principal and interest, the payment becomes more affordable for the borrower.

However, in extreme circumstances, reducing the mortgage payment to interest only is just not enough for a commercial property owner. If a lender sees that the borrower will still have negative cash flow even after reducing the payment to interest only, they may consider a reduction in the interest rate. Although the interest rate reduction may be temporary, it will help the borrower free up capital and maintain the mortgage payment on time. Although uncommon, lenders have lowered interest rates to as low as 1% even, to avoid an even more costly foreclosure.