The Everything Accounting Book: Balance Your Budget, Manage Your Cash Flow, And Keep Your Books in the Black

Product Description
If youÕre a home-based or small business owner, you need to learn how to balance your books as you start and grow your business. The Everything Accounting Book is a great beginnerÕs guide for the basics of accounting.

This easy-to-use reference is loaded with expert tips and advice on:

• The differences between accounting and bookkeeping
• Preparing financial statements
• Recording and recognizing revenues and expenses
• Tax planning strategies

Real-world examples show accounting procedures for a retail business, a manufacturer, a home-based business, and a small high-tech company. So no matter what your business, you have the information you need to make a go of it with The Everything Accounting Book!

Buy from Amazon –> The Everything Accounting Book: Balance Your Budget, Manage Your Cash Flow, And Keep Your Books in the Black

Commercial Bank Loans, Why Bother?

 

Conventional commercial bank loans are well worth the additional scrutiny.  These loans offer the lowest rates, lowest fees, longest fixed periods, and longest amortization schedules currently offered in the market today, for your typical small commercial mortgages (Under $5,000,000). 

The key here for borrowers to realize is that most of the banks that use to offer conventional bank loans are now sitting on the sidelines, waiting for the economy to turn around.  Still other banks don’t have any capital to lend.  However, there are many banks out there that are still offering conventional bank loans.  They may not be local, but they are out there.

Most small local banks that are still lending are now only offering 20 year amortization schedules, with adjustable or 5 year fixed rate programs.  However, there are banks that are still funding 10 year fixed rate loans on 30 year amortization schedules.  For borrowers, increasing the amortization schedule to 30 years can be a substantial increase in cash flow.  Simply by spreading out the repayment period, borrowers can normally get a 20% reduction in monthly payments or more.

Commercial Bank Loans

In addition, the benefits of having a long term fixed rate in this economy are obvious.  Many borrowers (and economists) are very concerned about potential inflationary pressures that might push rates to 1980 levels; as soon as the economy stabilizes and begins to grow again.  Some borrowers have literally opted to refinance out of their current lower rate loan, into a higher rate, though longer fixed rate program due to these concerns.           

Another major benefit to conventional commercial bank loans and the lowered fees offered.  For example, government sponsored programs, such as SBA loan or B and I loans typically charge an expensive 2 -3%, which is rolled into the loan amount.  Commercial bank loans in comparison are normally only 1%. 

Again, the important thing for borrowers to keep in mind is that there are banks out there that are still lending.  Do not let yourself get discouraged.  Perhaps your local banks aren’t lending, or are only offering really conservative programs, but if you take the time to research you can find viable sources. 

What NOT To Say To Your Lender After An SBA Loan Default

-          It’s not my fault, the economy is terrible!

Your lender hears this excuse from everyone, and she is tired of hearing it.  Yes, the economy sucks, but a weak economy doesn’t mean you are entitled to an infinite payment holiday.  If your business doesn’t have cash flow to make payments, the reason why cash flow is weak is largely irrelevant.  Your lender wants to hear how you are going to make it work.  Anyone can make excuses.

-          Your bank got government money, so you should help me!

Your workout person is just like you, except his job is to work with SBA borrowers who are struggling.  The last thing they want to hear is a smarty pants customer who is throwing government bailouts in their face.  None of that money went directly into their pocket, so don’t be a brat and taunt them.

-          If you give me another year, the business will get back on track!

If you have already had a deferment (or two) totaling 6 or 12 months, your lender is running out of patience, and you are running out of time.  Don’t be surprised when your lender squashes your request for more time.  If it’s been over a year since you made a regular payment, don’t count on getting any more time for things to “get back on track”.

-          Your bank will lose money if you shut me down, so it makes no sense to do that!

The vast majority of loans that are SBA back have collateral deficiencies.  This means that more often then not, you owe the bank more than the collateral securing the loan is worth.  While the collateral position can impact how your account is handled, there will come a time when your lender decides that your business will not make it, and make a move to shut you down.  They understand there is a collateral deficiency, but that fact in of itself will not stop a lender from shutting you down.  If you aren’t paying anyway, they reason, why not liquidate the assets so they can move on to another business who might have a chance to survive?

-          I didn’t realize you wanted me to make a payment, I thought you were working on a modification/deferment.

ATTENTION!  If you still have a loan balance, then you are expected to make payments, even while negotiating a modification or deferment.  From start to finish, it sometimes takes 2, 3 or 4 months before everything is signed, sealed, and delivered.   Many lenders want you to make the “proposed” payment even before you formally execute the documents.  If you are unsure, confirm with your lender what is expected of you.

How To Qualify For An SBA Loan Deferment

(Distressed Loan Advisors offers expert advice about SBA loan modifications and the Offer In Compromise process, and can be reached at JasonTees.com)

In this rough economy, the SBA has encouraged lenders to be as flexible as possible in order to help small business owners make it through to the other side.  In most cases, the flexibility will come in the form of a loan deferment.  While the SBA wants lenders to be flexible, the lender still needs to have reason to believe that your business will survive if relief is granted.

There are a few key factors that your lender will look at when determining whether you qualify for a deferment:

1)      Cash Flow.  When you think of cash flow, think of the 3 bears.  Can’t have to little (they’ll think things are so bad you are beyond help), can’t have too much (they think you are crying wolf and don’t really need it).  Cash flow needs to be juuuuust right.  In other words, you need to demonstrate that you can’t make your regular payments, yet have enough cash flow to make payments under the terms of your deferment.

2) Repayment History The idea here is that your lender wants to help borrowers who have been making an honest effort.  Even if you can’t make your full payment, have you at least been paying what you could?  Were you making regular, on-time payments when times were good?  Your lenders wants to help a business that has shown that its committed to honoring their debt commitment.  The repayment history is a great indication of your commitment.

3) Responsiveness If your lender asks for documentation within 2 weeks, that means you should get it to them within 2 weeks.  Seems simple enough, right?  You’d not believe the number of borrowers who lollygag when it comes to getting their lender a complete deferment application package.  In many banks, once the deadline for documentation passes, you will be automatically declined for a deferment, and be scheduled for liquidation.  In other words, they will shut you down and sell your stuff.

4) Collateral In most cases, the collateral situation was established at loan inception.  However, it will factor into how aggressive your lender will get, and how quickly it will happen.  If your $150,000 loan is secured with $10,000 worth of equipment, a lender will be more apt to try and help you out since they are otherwise looking at a sizable loss.  On the flip side, if the lender has collateral that is worth more than you owe, they may be quick to move into liquidation mode if they don’t believe your business has a chance to succeed.  In this situation it is vitally important for you to be ultra-responsive to your lender.

A Home Business Mentor Can Help You Earn Big Bucks

A mentor does not buy, sell or negotiate. A mentor provides a service. In essence, mentoring is simply helping someone else play their cards right and become successful in their home business or other endeavour.

Thus defined, mentoring has been a business practice for a long time. Recent estimates indicate that a large majority of successful people have used a mentor as a standard business practice. Mentors choose to help others reach their goals for various reasons, the most common reason being to gain support and help for their own projects and from a true desire to assist others. After all, what good is information if you don’t share it with someone who needs a mentor?

Many mentors help a peer or friend move up the ladder in order to achieve personal satisfaction and develop friendships. Also, you’ve probably experienced a friend saying, “I helped you, and now I need help too…” Basically, being or having a mentor is an exchange of services and friendship.

One reason mentoring is popular, especially in today’s economy, is that it provides free training that normally would be provided at special training classes costing a lot of money. Mentors willingly provide this service, as it is simply the bottom line method of training with little or no cash. In times of little or no cash flow, mentoring is a highly desirable commodity, and mentoring is becoming even more widespread. Mentoring offers a way to hold onto cash while continuing to get advice and training.

In addition to saving costs, mentoring can improve cash flow and liquidity by avoiding the high cost of formal training. For anyone who is starting up a home business, this is vitally important. For the individual who is lucky enough to have a mentor, it makes it possible to save existing funds for those purchases where cash is necessary.

To successfully become a mentor, you must think in terms of a trainer, a financial expert, and a technical advisor if you want to help someone start their home business. After all, that is the precise reason for mentoring – to bring together an individual with success. Your first task is to determine exactly what the individual hopes to accomplish. As a one-person training staff, you will need to know everything about the potential home business as well as get to know the personal hopes and dreams of your protégé. In effect, you are providing your expertise and/or time to help another person achieve their goals for success.

Having a mentor to help you successfully start up your home business is a stroke of luck if you are on the receiving end. You explain your wants or needs to your mentor and he/she will provide you with suggestions based on their past experiences. You will be wise to listen to these suggestions, as they are mostly methods that have already been tried, tested and proven to work. Your home business mentor can help you with advice on start-up costs, technical advice, and guide you through the process of establishing sales leads, getting the funding you need, and most likely provide you with the names of others who are specialized in their respective fields.

Why go it alone, making the same mistakes that have already been made by others? Let a mentor help you on the road to success by giving you the benefit of their experience.

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