The Dreaded Lending Process: Qualifying for a Business Loan

We’ve all heard it…”Banks only want to lend to those who don’t need a loan…”

What does that really mean?  How can you, as a small business owner, prepare to present yourself in that first conversation about the possibility of qualifying for some bank financing?  It can be an intimidating thought, but here are a few pointers to consider in advance:

Get your house in order

The first thing a lender will want to see is some historical financial information.  You don’t need to go into the first conversation with a full set of audited reports, but make sure you know your basics. Your revenue- how much you sold last year.  Your profit – how much you made after all expenses.  Your margins.  How many customers do you have?  What are your plans for this year?  What’s your market like these days?  Any business owner knows these to some degree instinctually, but if they have reviewed and rehearsed the factual information, and their style of presentation, it’s a huge advantage.  Go in prepared!

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If you were asked, would you casually write a check to the IRS for $ 10,000.00?  Of course not!  Few of us would these days.

So why do we fail to realize how much we are giving away to the government in decisions we don’t even give a second thought.  What do we mean?  If you are a corporation, you need to file a corporate tax return even if you do not have a profit.  Some business owners, especially sole proprietors, know they are operating at a loss, and think this is not necessary.  WRONG!

Think you filed an extension so you are home free?  WRONG AGAIN! If you have filed an extension you need to know this is an extension to filenot an extension to pay.  Interest is charged on taxes paid late even if an extension of time to file is granted. Furthermore, there is also a penalty assessed if you don’t pay in at least 90% of what you owe this year, or 100% of what was owed last year (whichever is less).  And there can be interest charged on the penalties!

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Running a Tight Ship: How Are You Handling Your Amazon and eBay Purchases?

DSC_0377rtwebBy Myrna Stacey CPA
Certified QuickBooks® ProAdvisor

As a business owner, you have the responsibility and discretion to make many kinds of purchases.  Did you see a deal on office supplies on Amazon last week?  Buy a fun item for your personal collection on eBay? Decided to purchase a group of gift cards or promotional items to use as employee perks or customer giveaways? There are so many great deals out there, but….  Have you thought about what needs to happen after you hit the ‘buy it now’ button?

In the last two years, online purchasing through these two sites has soared among the general population, and that includes business owners.  But, chances are, these purchases are hitting your pocketbook harder than you think.  By their nature, these purchases show up as Amazon or eBay charges on your bank or credit card statement.  If you have not supplied the detail to your bookkeeper, these charges will likely go against ‘owners draw’.  The result: you will be paying personal income taxes on items you have purchased for the benefit of the business.  Thousands of dollars can get added to your taxable income!

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