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Small Business Finance – Realize Your Dreams Smoothly

Dreams die hard. Whatever out wishes are, we strive hard to fulfill them and this goes true for our business ideas as well. We certainly want to give them a shot but if the money required is creating the obstacle, money can be easily borrowed through small business finance. You can now give shape to your aspirations easily.

Our ideas have a great impact on our personality and our lives and so will their fulfillment. If our ideas are put into practice, they may fetch great results. Money for such small business can be easily borrowed through these loans so that the people can try to give their best to their aspirations.

Businessmen can borrow money for any requirements that arise in their business whether they are setting up a new business or reinstating an older running small business. Payment of labor, marketing, purchasing raw material, packaging, buying new machines, renting a new site etc all require money which is provided through these loans easily.

The borrowers are not required to pledge any assets for the money borrowers since they do not require big amounts of money. Smaller amounts for the business can be easily taken up via the unsecured form itself so the borrowers are not required to risk their assets. Term of repayment of these loans is 6months to 10 years.

The borrowers may be having a bad credit history due to some earlier business issues. Still they can borrow money through these loans easily. However the borrowers are required to prepare a report on the business which will help them in convincing the lenders about the viability of the business. This in turn will get a lower rate of interest on the money for the borrower. The purpose of research can be solved through the online mode as all reputed companies have gone online to facilitate borrowing of money.

With small business finance, the borrowers turned businessmen can achieve a high in their lives. They can become successful without putting to risk any assets or carrying any burden.

Five Small Business Finance Tips

Owning a small business involves much more than coming up with and implementing a business idea. Small business owners quickly learn that a huge part of their role as the owner of a business means learning how to take care of the financials. Here are several tips for small business owners who want to learn the best practices for managing their business’ finances:

1) Bookkeeping

To the dismay of many business owners, the ancient art of bookkeeping isn’t going anywhere. Fortunately, bookkeeping has become much easier. Bookkeeping programs can make the process much easier, but there are still certain fundamental rules that business owners must take into account. Firstly, business owners must always keep a record of all of the invoices processed by their business as well as the expenses they have incurred, such as raw materials, salaries, and operating expenses. While there is no solid rule for how to keep track of earnings and expenses, what matters most is that you keep track of your finances in a consistent fashion and that everything is written down. This is arguably the most important part of owning a small business.

2) Don’t Over-Exaggerate Your Earnings

When working with investors, banks, or other financial lenders, one of the biggest mistakes you can make is to exaggerate your business’ earnings. These lenders need to know how likely you are to repay the money they have lent you when making their decision about whether or not to lend it in the first place. Lying or exaggerating about your earnings will only harm you and the lender in the long run.

3) Make Sure All Of Your Funding is Backed by a Legal Contract

Regardless of where you are going to receive funding, you need to ensure that the terms of your financial agreements are written down on a contract. Unfortunately, things can become troublesome during the repayment process and it is therefore urgent that you and your lender lay out terms in the beginning that you must adhere to later on. This keeps both sides accountable and also ensures that both sides know exactly what they are getting into before the money starts circulating.

4) Cash Flow

A successful small business always maintains a sufficient amount of cash on hand to take care of daily operations and unexpected expenses. However, many businesses that have been successful in receiving funding find that the money they are lent covers already-existing expenses but doesn’t quite leave enough cash left over to keep on hand. This is why small business owners are familiar with the feeling of being stuck somewhere between outstanding invoices and bills that are past-due. One option for small business owners is to use a merchant cash advance. These types of business cash advances can provide small businesses with additional cash flow to meet these expenses or to grow their business, and they are repaid through future credit card receivables. This is an important option to consider for many small business owners who have been denied other forms of funding.

5) When to Process Credit Cards

The short answer: Now! Being cash-only is extremely inconvenient for most customers. While setting up a credit card processing system can be costly, your customers may find it more convenient to go to your competitor’s business once they learn that your business doesn’t process credit cards. Furthermore, using credit cards at your business functions as an instant line of credit and means less hassle and paperwork for your business. This can cut down on lengthy credit approval processes. Also, there are additional types of funding available for businesses who process credit card transactions as opposed to those who don’t.

Managing Your Small Business Finances

Only 40 percent of smaller independently owned and operated businesses survive for five years or more, according to the U.S. Small Business Association. The Federation of Independent Business (NFIB) reports that only 39 percent of these independent businesses are profitable.

If you want your business to succeed, you’ll have to learn how to manage your business finances.

Poor business financial management is one of the top reasons businesses fail. Managing your personal finances can be challenging, and managing your business finances is even more challenging. But if you can’t collect, track and save your money appropriately, you’ll be risking your profitability and success.

Improve Your Business Financial Management

Be proactive. Applying sound business principles to all of your decisions will help ensure your company’s success and longevity. Don’t rely solely on your accountant, bookkeeper, financial planner or banker. Keep all your records up-to-date, learn the basic principles of small business finance, and apply them on a daily basis.

Collections: The First Step to Good Business Finances

  • Credits and Collections: Determine if you should accept credit cards, and other forms of payments, and learn the best methods for quickly and efficiently collecting debts. Find out how alternative payments, such as trading products and services, or factoring, can positively or negatively affect your business.

Tracking: The Second Step to Good Business Finances

  • Basic Bookkeeping: Learn how to record your daily transactions, generate financial statements, and work with your accountant on a regular basis – or do it yourself with any one of the many financial management tools that are available today.
  • Cash Flow Management: Learn to manage your cash and liquid assets by assessing and projecting your needs. Always look for ways to increase your income and reduce your expenses.
  • Trend Forecasting: Identify positive and negatives factors that can help you manage your business finances more efficiently over time. Write these down and make sure you check them periodically.

Other Important Areas for Good Business Financial Management

  • Banking: Learn which type of savings and checking accounts are best suited to your needs.
  • Investing: Learn how to maximize the return on your surplus cash by choosing the best investments.
  • Evaluating: Evaluate expensive potential capital investments, like equipment, facilities and more.