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Financial Education


  • Submitted on 24 April 2015

    Created on April 24, 2015
     

    Credit CardsThere are various factors to consider when deciding to use credit for your business. The most crucial and overlooked component is can you afford to use it? Every business’s credit needs are different. Many small business owners have the misconception that if business credit is granted to them, they can afford to use it. Credit applications don’t ask what your business expenses are, whether or not your business equipment is outdated and needs to be replaced soon, or if you need to hire new employees, or how much is spent on advertising each month.

    So before you start applying for business credit or accept the first credit offer that comes in the mail, understand that there are three main points to consider before filling out an application. Let’s review these three key points below:

  • Submitted on 16 April 2015

    Created on April 16, 2015
     

    Financial LiteracyApril is National Financial Capability Month!

    According to the findings of a 2014 Intuit study, more than 40 percent of U.S. small businesses consider themselves financially illiterate. Yet, 81 percent handle their business’ finances. April is National Financial Capability Month, so now is a great time for small businesses and aspiring entrepreneurs to brush up on their financial literacy skills.

  • Submitted on 05 March 2015

    Created on March 5, 2015
     

    Retirement PlanningThe U.S. Department of the Treasury created myRA (my Retirement Account), a new retirement account, to help people save for retirement. myRA is a simple, safe, and affordable way to take more control of your future. Here are the top questions employees have about myRA.

    What is myRA?

    myRA is a new type of Roth IRA* – a popular retirement savings tool – that has been specifically designed by the U.S. Treasury to address many of the most common barriers to saving, such as fees and minimum initial contributions. There is no cost to you to participate, and myRA carries no risk of losing money. The account stays with you when you change jobs, and if you have more than one job, you can contribute to it through multiple employers. myRA has no minimum contribution requirement, which means you can contribute the amount you choose.* And best of all, it’s easy to set up and manage.

    Who can sign up for myRA?

    myRA could be a good option if you don't have access to a retirement savings plan through your job. myRA follows Roth IRA rules so it is generally available to anyone who earns an annual income of less than $129,000 a year for individuals and $191,000 for married couples filing jointly.* You can set up direct deposit into your myRA through your employer.

  • Submitted on 11 February 2015

    Created on February 11, 2015
     

    The Internal Revenue Service has announced the launch of a new, online public directory of tax return preparers.

    Tax HelpThis searchable directory on IRS.gov will help taxpayers find a tax professional with credentials and select qualifications to help them prepare their tax returns.

    “This new directory will be a practical tool for the millions of Americans who rely on the services of a paid return preparer,” said IRS Commissioner John Koskinen. “Taxpayers can also look to these tax professionals for help if they have questions about the new health care provisions on this year’s tax forms.”

    The directory is a searchable, sortable listing featuring:  the name, city, state and zip code of attorneys, CPAs, enrolled agents and those who have completed the requirements for the voluntary IRS Annual Filing Season Program (AFSP). All preparers listed also have valid 2015 Preparer Tax Identification Numbers (PTIN).

  • Submitted on 23 December 2014

    Created on December 23, 2014
     

    Did you know that the Small Business Investment Company (SBIC) Program has been helping small business access capital for more than fifty years?

    What’s the SBIC Program?

    The Small Business Investment Company (SBIC) Program is a multi-billion dollar program that, in fiscal year 2013 alone, invested $3.5 billion in financing dollars to small businesses! So how does it work?

    SBIC flow chart depicts private investor funds and SBA funds funneling into SBICs funneling into small businesses

    SBICs are privately owned and managed investment funds. They’re licensed and regulated by SBA and use their own capital plus funds – borrowed with an SBA guarantee – to make equity and debt investments in qualifying small businesses.

  • Submitted on 19 December 2014

    Created on December 19, 2014
     

    Business CreditBuilding business credit is just as important as building and taking good care of one’s personal credit. In the business world, a company does not have a consumer FICO® Score. Instead, it has business credit scores, ratings maintained and calculated by business credit reporting agencies.

    “Just as your personal credit has a big impact on your financial health, your business credit can help you get competitive business loan rates and terms from potential suppliers,” says Marc Kirshbaum, president of Experian's Business Information Solutions group.

    Unfortunately, many small business owners don't even know there is such a thing as a credit score for a business and therefore lose opportunities to improve their own, says Jeff Stibel, CEO of Dun & Bradstreet Credibility Corp.

    Many times, small business owners make the mistake of assuming that positive personal credit scores will be enough to obtain good business credit ratings. While lenders and suppliers may initially consider personal credit history, once a business pays its first invoice, it will begin building its own credit history.

  • Submitted on 13 November 2014

    Created on November 13, 2014
     

    National Journal Next AmericaAccording to a recent U.S. Census Bureau report, the United States will not have a clear racial or ethnic majority by 2043. America's deepening diversity has huge implications for the country's economy, and is creating challenges and opportunities for the nation's financial system as it works to increase minority access to the financial mainstream.

    San Francisco, California—a hub of technological innovation—is one of the many U.S. communities experiencing extraordinary population growth. However, experts say that the recession has hindered its residents' ability to accumulate wealth, and asserts that increased financial literacy, financial services innovation and improved access to credit and capital are fundamental to growing the region's economy.

  • Submitted on 12 November 2014

    Created on November 12, 2014
     

    Tax Credit EstimatorIf you’re an employer who may be eligible for the Small Business Health Care Tax Credit, you can use this Estimator. The credit is designed to encourage small businesses to offer health insurance coverage for the first time or maintain coverage they already have.

    For some employers and tax-exempt organizations, this could save thousands of dollars by providing a credit against income tax (a refundable credit for certain tax-exempt organizations).

    The Estimator can help determine whether you’re eligible for the credit and if so, estimate the amount. This tool is meant to be educational. To find the actual amount, you must complete Form 8941, Credit for Small Employer Health Insurance Premiums, or consult a qualified tax professional. The Estimator also provides links to forms, instructions, and guidance to help you learn more about the Small Business Health Care Tax Credit.

  • Submitted on 01 October 2014

    Created on October 1, 2014
     

    Business Loan Application Form

    Veterans Advantage program also extended, expanded to loans up to $5 million

    Good news for entrepreneurs seeking SBA financing to purchase or grow a small business. The SBA will continue its provision to eliminate the upfront fee paid by all borrowers for the guaranteed portion of 7(a) loans of $150,000 or less, and will expand the no upfront-fee program for veteran-owned small businesses, through Sept. 30, 2015. 

    Before this change, borrowers using the SBA guarantee through participating lenders would pay up to two percent of the guaranteed portion on these loans, which would cost a small business owner up to $2,700 in fees.

    However, if two or more SBA guaranteed loans are approved within 90 days of each other, the guaranty fee is determined based on the aggregate amount of the loans. Thus, if the total amount of multiple loans approved within 90 days is greater than $150,000, the normal fees will apply. Lenders are not permitted to split loans for the purpose of avoiding fees for their small business borrowers.

    Participating lenders also will continue to see a break; the SBA will eliminate the servicing fee paid by them each month on loans $150,000 or less. The servicing fee paid by lenders each month on 7(a) loans greater than $150,000 will drop to 0.519 percent on the guaranteed portion of the outstanding balance beginning Oct. 1, 2014.

  • Submitted on 05 August 2014

    Created on August 5, 2014
     

    Supply Chain

    Originally posted on the SBA.gov Blog

    Three years ago, entrepreneur Maurice Brewster made one of the best business decisions of his life: He signed his limousine company, Mosaic Transportation, up for IBM’s Supplier Connection – a collaboration between small businesses and the supply chains of Fortune 500 corporations

    It was a wise decision because small firms that enter the supply chains of major corporations grow their revenue by an average of 250 percent and their workforce by an average of 150 percent.

    In three years, Maurice has signed contracts with seven major corporations, grown Mosaic from 20 to 46 employees, and tripled his annual revenues. His company had lost half of its business during the Recession, but now it is reaping record profits. Maurice credits this remarkable turnaround to two things: he joined a corporate supply chain, and all seven of his new clients pay him up front with a corporate credit card.

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