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Applying for a Bank Loan - Complete Controller

Read this guide for the best advice before applying for a loan from the bank or any other financial institution.

Applying for a loan online can be quite a simple process; however, it can become extremely complicated and expensive without the proper research and knowledge. There are several basic concepts that you should keep in mind before applying. We want to help; that is why we have highlighted a few of these concepts to facilitate the process: Check out America's Best Bookkeepers

Analyze your financial situation

Before even beginning the transaction, calculate how much money you spend each month and your income. Analyze which expenses are mandatory and which are optional. Once you know how much money you spend, you will be able to know how much money is left for incidentals and whims.

There are always unexpected expenses, so take care to leave a monthly margin for uncertainties. It is okay if this margin is small; unforeseen events do not happen every day. If you’re struggling to track your expenses, there are plenty of free online applications that can help.

Analyze the amount you need and when you can return it

Before asking for a loan, analyze the amount you wish to borrow and determine when it can be returned. Do not choose a return period that is longer than necessary. The later you return the money, the more interest you will pay. It is also wise to resist establishing a very tight depreciation period since unforeseen events may arise. Establish the return of the loan according to your income. If you have a problem with this decision later, contact the lender. They will help guide you to the appropriate decision. If your job is at risk, do not apply for a loan with a long-term repayment term. You also have the option of microcredits whose return can be between 10 and 60 days. Check out America's Best Bookkeepers

Make a comparison

Make a comparison to find the entity that offers the best interest. Compare the interests and commissions of each lender.  Investigate all possible options, from loans offered by your traditional bank to loans announced online. The market is full of financial entities, and each offers different incentives to attract the customer. Take advantage of these offers. Equally, it is very important to find a loan that best suits your circumstances. Some credit entities may have a higher interest but will be less rigorous in terms of confirmation.

Save for future economic emergencies

Analyze your economic situation coldly. What pleasures do you allow yourself, and what excessive spending can you suppress?

  • Do you eat every day in restaurants?
  • Do you make leisure trips every weekend?
  • Do you buy clothes weekly or monthly?

If your job is volatile and you do not have a linear monthly income, be careful when applying for a loan. If, for example, you are autonomous, there will be months that you will spend more than others. Our advice is to apply for the loan with the lowest possible amount of interest and save as much of your income as you can. Put this money in a savings account to use when you have less income or in the case of unforeseen events. Check out America's Best Bookkeepers

Should you apply for the loan?

Be honest with yourself and ask yourself the question: why do I need this loan?

  • Do not apply for a loan for impulse purchases.
  • Do not apply for a loan to repay another loan.
  • Do not apply for loans to pay for night outings or special occasions.

Read the conditions of the contract

Always check the payment conditions and policies on default and delay. Contact the entity if necessary and request all information in writing.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
Short Vs. Long Term Borrowing - Complete Controller

Long-term borrowing consists of a long application process where repayments are made for several years in order to pay off the loan. This loan is borrowed to fulfill the business needs on a large scale. However, short-term borrowing consists of a small loan amount that is available within a short period of time, as few as 24 hours.

The purpose of borrowing the loan varies; however, you must determine the specific and approximate amount you will need to fulfill the business purpose as a business owner. The decision of loan is also dependent on the repayment time. The type of loan that you borrow affects the business considering the amount of interest that you pay over the specified period of time. Check out America's Best Bookkeepers

Short-Term Business Loans:

Most business owners prefer to borrow short-term business loans. This type of loan makes the funds available in a very brief period of time. Moreover, with an increase in the number of banks and financial institutions, it has become easier for owners to pick out the best option for themselves. Now, they do not have to go through the strict rules and requirements of banks to borrow a loan. Effectively, it is better for business owners to borrow a short-term loan to compensate for minor setbacks that businesses face. This helps the business owners obtain funds as soon as possible. Check out America's Best Bookkeepers

Long-Term Business Loans:

This type of loan is sometimes necessary for varying business purposes. Mainly, when the business is looking to expand its operations or location, it needs financing, which cannot be covered by utilizing the company’s savings. At that time, business owners looking to borrow long-term business loans from which they expected enough profit to easily cover the repayments. For such a purpose, the loan is borrowed, and repayment can last for years or even for decades.

Although short-term financing loans have higher interest rates, borrowing a long-term loan means the borrower ends up paying more interest. It is often difficult for business owners to borrow long-term loans due to the hectic and lengthy procedures it requires to be approved. They have to wait for permission from multiple authorities in order to secure this type of loan. Check out America's Best Bookkeepers

Which One is Better?

There are several benefits of long-term borrowing. With the long-term goals of a company, long-term loans are the perfect option. They often coincide with the goals of a company. Long-term borrowing also decreases the risk of refinancing due to the fixed interest rate policy. Short-term borrowing offers floating rates which increases the financial risk of a company. Long-term finances help companies to spread out the debt maturities and control their capital needs. Hence, long-term loans are beneficial if we consider a large-scale company.

At the end of the day, everything depends on the need of the company; the purpose, the time it prefers to repay, and what type of interest rate suits it the best. Long-term borrowing should be done if the needs are on a large scale where the company is either looking to or launch a new product. Long-term loans must be considered when the company injects capital to take a step forward in the market. On the other hand, short-term borrowing should be considered if the company is falling behind in payment, facing a minor loss, or is trying to accommodate another operational activity. The decision of loan type is also dependent on the repayment time. The type of loan that you borrow tremendously affects the business considering the amount of interest you pay over time. Therefore, you must borrow the loan considering the current standing and needs of your business as well as the repayment structure.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
Banks Will Deny a Business Loan - Complete Controller

When funding your small business, the bank expects the entrepreneur to finance a significant part of the need and therefore take part in the risk the lender will be taking. The bank is seldom interested in investing in a small business if the investor has not put in credit on their own or the business owner’s credit is lower. Here are five reasons banks will decline your business loan and how to overcome them.

Insufficient Contribution

  • On the current basis, one generally speaks of a minimum level of own contribution of the order of 20%, but this is very theoretical because certain parameters can imply a need for own contribution more consequential, for example. If a starter project or for certain sectors.
  • We can consider two main reasons for this requirement: (i) the greater the entrepreneur’s contribution, the more the risk of the bank is limited, especially since the bank is by definition reimbursed first, and (ii) the more the entrepreneur is involved in his project, including financially, the more he is stimulated to create value.
  • Please note, this does not only concern starter projects. It is indeed also necessary during the development phase of the activity that the company take a more or less substantial share of the risk at its expense. Sometimes a recapitalization is even necessary. Check out America's Best Bookkeepers

Financial Imbalances

  • Certain financial imbalances can appear both in the asset structure of a company and in its profitability structure.
  • Considering the impact that the existing and future situation may have on the business’s viability and, therefore, on its ability to repay loans, the bank is careful to analyze with precision the main related indicators. These main indicators relate to solvency, liquidity, working capital, working capital requirement, gross margin, added value, EBIT (DA), etc.
  • A manager / associated current account with assets or liabilities will also have an impact.
  • These analyses are carried out based on the situation before and after integrating the new loan (s). Check out America's Best Bookkeepers

Insufficient Warranty

  • As much as the bank analyzes in-depth the probability of default on a loan to be granted, it also wishes to cover its risk if a default occurs via guarantees.
  • However, it is quite common for a company not to have elements that can serve as sufficient collateral in the bank’s eyes, especially since this area’s requirements have increased in recent years. In such a case, the bank generally requests private guarantees (real or personal) or refuses the credit.
  • There are various solutions to try to make up for this lack or avoid having to excessively link the business’s risk to the entrepreneur’s private heritage, for example, by calling on public solutions and the Investment Fund.
  • Also, avoid giving too many guarantees too quickly to a single bank, as you will then be “married” to it without any real possibility of requesting another.

Unprofitable Demand

  • In recent years, banks have taken steps to improve their efficiency, which is reflected in particular in an increased desire for standardization and automation. Consequently, companies’ banking contacts, especially in the case of small companies, are pushed to manage better the time spent on each request and therefore also to filter files that are unlikely to be approved or to avoid applying an overly tailor-made treatment if the profitability potential of the file is limited.
  • Thus, any element that weighs down the process requires additional action by the bank; therefore, risks impacting its assessment and processing of the file.
  • This can be seen, for example, when the bank has to submit small files to the Participation Fund or the Brussels Guarantee Fund. Check out America's Best Bookkeepers

Other Elements Related to the Bank

Other elements specifically related to your bank and its environment can impact the lending process, such as:

  • What is the general economic context and that of the banking sector: growth, stability, crisis?
  • What is the sector’s regulatory context: are there increased requirements in terms of the financial soundness of banks, are they more controlled and supervised in their management of granting of credit, do they have increased responsibilities vis-à-vis their customers?
  • A more complex situation in the banking sector’s economic and regulatory environment (as it is currently the case) does not fundamentally change the rules for granting credit but leads to a stricter application of the fundamental logic summarized in this article.
  • What is the bank’s current risk policy: does it have the will or the capacity to broaden its clientele or outstanding credit?
  • What is the bank’s current commercial and segmentation policy: are there excluded sectors, is it open to starters, is it mainly interested in private accounts?
  • Who are your interlocutors and the decision-making process? Do you have the possibility of visually presenting and defending your project to a direct interlocutor, are they competent, and do they have real weight in the decision?
Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
Small Business Loan Application - Complete Controller

In owning and operating your business, chances are at some point; you will need to take out a loan to fund your business for various reasons. Since your business is already established, lending institutions will use your business reports to evaluate the risk. Often banks will reject your loan request after reviewing your business report. Here are four reasons banks reject your business loan application.

Lack of Confidence in the Entrepreneur Check out America's Best Bookkeepers

The lack of confidence in the entrepreneur is one of the most important parameters in granting a loan. If the bank does not believe in the entrepreneur’s capabilities to carry out the project or if the bank has doubts about the reputation, they won’t approve any size business loan. The entrepreneur’s profile and their attitude in contact with the bank are therefore key.

Note that the entrepreneur’s history can have a strong impact on this trust, both positively (and negatively (e.g., in the event of a past bankruptcy or delays in repayment of credit). As a business owner, you should focus on building credit and reputation from day one of opening your business.

Lack of Confidence in the Project

Above all, a project must be easy to understand, hence the importance of presenting it well, in a synthetic, structured, and understandable way for an uninitiated. The project must integrate different strategic elements, such as (attention, this list is not exhaustive):

  • presence of a real need, a real business opportunity
  • a real understanding of the market and the ecosystem, including the competition
  • solution representing a real differentiated value proposition
  • products/services validated in the market
  • well-defined target audience, segmentation, and distribution channels Check out America's Best Bookkeepers
  • adequacy of the commercial & marketing strategy for the project
  • a clear vision on the planning (milestones crossed, current and future)
  • complementary management team integrating the necessary skills
  • The project must offer real prospects in the medium term and, if possible, in the long term
  • It must be profitable enough to guarantee at least the sustainability of the activity, that is to say, to finance the necessary investments, to support growth, to repay debts, or to absorb fluctuations and unforeseen events
  • All of these elements must be argued, consistent, and credible

If the bank does not understand the project, has doubts about the business opportunity, the medium-long term prospects, its profitability, and its viability, it will be very difficult to consider a loan as a reminder, “Credit” means trust.

And remember, you usually only have one chance to make a good impression. A project presented via an incomplete, inconsistent, or not yet completed file risks toast your chances with this bank. This is especially true since it is very difficult for a bank to consider reviewing its position in the event of a negative decision.

Insufficient Repayment Ability Check out America's Best Bookkeepers

This criterion is essential for a bank:

  • If the project does not demonstrate sufficient capacity to repay the credit, there will be no credit
  • To measure this capacity, priority is given to actual figures over forecasts. If these are appreciably more positive than history, it is necessary to justify them well, and they may be nevertheless not (fully) taken into account
  • Also, particular attention is paid to the regularity or otherwise of the cash flow

The Risks are Excessive

It is worth remembering that a bank developing traditional business services is content to lend them the funds collected from savers or the market in exchange for a limited interest. The bank is an intermediary in managing excess and liquidity needs and does not strictly speak to take risks. Besides, it does not participate in the benefit of its customers.

  • Therefore, and this is a fairly common element of confusion, there can be a strong misunderstanding between the entrepreneur and his bank on its role and what it finances
  • Typically, things like the life phase of the business, the type of sector, or the innovative nature of a concept will have a big impact on risk
  • It deems a starter project at risk, a new concept not yet validated in the market or worse, not yet developed, areas with high default rates, activities with legal risks and policies
  • The bank also considers the maximum exposure limits it is willing to take on a business or sector

Based on these risks, the bank assesses whether it can intervene, how high and with what terms, and what protection.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
Successful Restaurant Business - Complete Controller

A major concern of any new startup is securing finances and capital. If you are serious about your restaurant business, consider taking out a loan. Your restaurant will become successful when you can adequately manage your business even in low cash flow situations, such as the slow season.

Securing the finances needed to ensure your restaurant business’s success can prove to be a precarious task. Start by creating a business plan in which your funding requirements are recorded and get connected with potential financiers. Avoid letting your business requirements become a restriction. Here are a few financing tips to apply to your restaurant business. Check out America's Best Bookkeepers

Investors

One of the first steps towards opening a restaurant is securing funding from investors. It is always beneficial to have as much capital as you can before opening your business. Avoid outsourcing until you make a business plan. Having a solid financial plan is crucial, as it will indicate how quickly you plan on returning the borrowed amount to investors. Strive to prepare a perfect timeline that will ensure investors your business is a great candidate for their financial help. In many cases, restaurant startup owners must maintain strict financial discipline. This attitude promotes adhering to your timeline. Do not forget to record the date of your investor’s contract so that you can easily terminate the agreement once the repayment is complete.

SBA loans

Most business owners acquire loans through the American Small Business Association (SBA). Typically, it is good practice to assign a guarantee to your loan in case of default. This added security will make the process of getting approval from the SBA much easier. Understandably, there is great risk involved for banks to lend money to a new restaurant. Therefore, an SBA loan is the best option as additional lenders can participate in it, such as banks, credit, unions, etc., if they wish.   Check out America's Best Bookkeepers

There are a variety of competitive loan options through the SBA. All lenders require you to put some money down up front for loan security. Do some research and select the most suitable deal.

Crowd Funding

Crowdfunding and websites are the best sources for securing finances, such as the platform Foodstart. Web developers have designed this website for food trucks and restaurants. It is, by far, the best community-funding program.

Family, customers, friends, and non-customers can also use their Amazon account to secure capital. This can be a win-win situation since you will get strong support, along with other benefits such as menu ideas, discounts, free food items, etc. It is up to you which perks to select.

Crowdfunding provides you with access to the general public in order to ask for financing. Contributions may be smaller, but they can make a real difference collectively. After all, little drops make a river.

Credit Cards

Sometimes restaurant owners use credit cards to finance their business. When considering this option, you must be sure of the status of your money’s return. Take care to repay the amount with interest rate on time. Always track the dollar’s current value, as this applies to interest rates. You must be fully aware of the financial situation you are getting into by having a complete understanding of the financing terms. Check out America's Best Bookkeepers

Savings

You need a proper plan to save money for your restaurant’s finances. Another option is to invest your personal savings into the restaurant. In this way, you will never be a financial debtor. But there is some risk involved in this process. It is important to treat your savings as a regular financial transaction and repay the money on time in order to prevent any problems. Additionally, avoid pouring all your savings into your restaurant; set aside some amount as an emergency fund. Having a personal savings fund will keep you from becoming a debtor in the future. 

Last Words

Finding financers for your new startup can seem like a daunting task, regardless of what industry you are in. In the restaurant industry, financing is one of many vital tasks. You must have the best and most delicious menu, along with efficient customer service, while still managing your costs. According to CNBC’s research, 60% of restaurant owners do not achieve satisfactory business growth within the first year, and almost 80% leave the restaurant industry within the fifth year.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
Refinancing Your Home Loan - Complete Controller

Home mortgage financing is not always that easy to handle, especially when it comes to lenders who have strict policies and lengthy approval processes, making it even more challenging to request a loan. The founder and CEO of LoanDepot.com, Anthony Hsieh, says, “Homeowners today need to be triathletes to qualify for a loan, with great income, great credit, and great value in their home.” Here are six crucial questions to ask when you are considering refinancing your home loan. Check out America's Best Bookkeepers

Do I have equity in my home?

Ideally, homeowners should have 20% equity in their homes to sign up for a loan request without paying private mortgage insurance. This lack of equity may adversely affect the benefit of refinancing and make homeowners owe more than their house’s actual cost. Home Savings’ vice president says that going for mortgage refinancing without sufficient equity only depreciates a house’s value. Another thing that impacts qualifying for the loan is the borrower’s credit score. To qualify for refinancing your mortgage to get a loan, you need to have a good credit score, much like when you obtained the original loan that created your mortgage.

What are my Financial Goals?

Most of the homeowners opt for refinancing to reduce their monthly installments. A good mortgage calculator may guide you in deciding your installment plans and reduce the interest amounts. The vice president of Home Savings says, “Some people are reorganizing their loans to a 20, 15, or 10-year mortgage, which works well for people with plenty of disposable income. But I fear that people are too concentrated on paying off their mortgage and not incorporating this decision with their overall financial plan.” Check out America's Best Bookkeepers

What are the contractual terms of my current loans?

When refinancing your home, another important question you need to ask is about your current loan terms and conditions. When it comes to terms and conditions, interest rates and fluctuations are the biggest financial concerns for borrowing homeowners. Borrowers should stick to fixed-rate loans rather than variable rates.

While asking for a refinance for your home, you should be certain about the time you plan to spend in your home. In general, Mortgage professionals inform the borrowers that a refinance may cost them three to six percent more than the home’s actual cost. If the break-even tends to happen at fifteen months while you still plan to stay in that house for the next five years or more, then it is good to go for refinancing. However, if you have to leave in two years, then refinancing is not a good option.

Is my credit score high enough?

A borrower’s credit report is an important factor that plays a vital role in getting a good mortgage rate. Any mortgage borrower needs to have a good credit score because it becomes nearly impossible for you to qualify for refinancing without a high credit score. Ideally, a borrower will have a score of 720 or more. Any credit score less than 620 may cause hassles in getting approved to refinance your mortgage. Check out America's Best Bookkeepers

Do I have other lines of credit or a second mortgage?

Getting a second loan may cause the borrower extra stress. It comes with additional complexity, and borrowers might lose track of payment schedules. Borrowers have the option of paying off the first loan before entering into the second loan, or they can combine both loans by making them into one large loan. Having only one loan will make it easier to keep your payments in order, as having multiple credit lines at a time can be confusing.

Conclusion

The bottom line is that you need to know if you not only qualify to refinance your mortgage but if you should. Consider all six of these questions before making this important decision that will affect your financial future.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
consider business loans - Complete Controller

When considering a business loan, it is important to rely on the opinions of experts. Taking out a loan that you cannot afford can cause the end of your business, or at least prevent it from growing.

In the case of a business loan, you will be met with the opinions of naysayers, each with their own anecdotes and suggestions. But in the end, the decision is yours. You must consider all aspects and choose the option that best meets your goals and will help you expand your business venture.

Even though your intentions may be good, taking on a loan can always lead to falling into debt. Are you ready to move forward in this field? Do you have the working capital? If your answer is yes, you must consider the following reasons to get a small business loan. Check out America's Best Bookkeepers

Approval of expanding business location

Picture this: your cubicles are on the verge of breakage, and your assistant works in the kitchen. You have little space and overwhelming traffic of customers. This means you may need to renovate your office or change its location. This does not mean that you can purchase a new location right now, as you lack the capital. If expansion is urgent, you can apply for a business loan.  This will cover your property cost and the expense of packing and moving materials and furnishings.

However, before making any decision, you must plan for the possible change in revenue you’re expecting from your expanded business location. Take care to ensure the amount of the loan will give the desired profit. Create a timeline and note down all details to provide this confirmation. Conduct a little research on market rates beforehand, as this will make your purchasing process easier from both loan and property ends. Check out America's Best Bookkeepers

Future credit establishment

Most businesses always strive to expand to a larger-scale in upcoming years. Suppose this is true for your business. In this case, you may start by taking a small business loan to establish a credit history for your business. Having an established and positive credit history can make all the difference when seeking approval for a larger loan in the future. A small business loan with on-time monthly payments will boost your business credit score and history.

You can also cultivate timeless relationships with lenders to easily obtain financial aid whenever you need it. You can also ask for a big loan, but don’t take this step without confirmation that you can return the money. Otherwise, you will fall into debt.

Excessive purchase of inventory

Inventory is a major expense for any business. You can manage this expenditure by replenishing your business’ inventory with reliable and high-quality choices. In the case of a financial downturn, you must have sound capital that provides assurance when applying for a business loan. This may be a large amount, but don’t forget to consider the cost of expected ROI. Check out America's Best Bookkeepers

In the case of a seasonal business, you must have excessive money to purchase inventory. Obtaining small loans may be the best financial decision for your business, especially when your sales are lower due to the season being over. Inventory purchases require a larger loan, so your debt history must show on-time return payments. However, requirements may be adjusted due to the dynamic variations in sales.

Businesses need talented experts

There are many responsibilities place on the business owner, especially when running a small business or startup with a tight budget and the hope of progress. To help with this, business owners must glean the opinions of talented experts when making any major business decision.

There are multiple services businesses must manage regarding marketing, customer service, fundraising, client dealing, bookkeeping, marketing, etc. As a small business owner, you must know when to compromise your small business model due to hindrances that resist its growth. Lean on the assistance of qualified professionals who can shed some light on areas that may be costing you money and effort. After consulting with others, make the decision to obtain a loan only if you have confidence, you will be able to repay it.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
Refinancing Your Mortgage - Complete Controller

Home mortgage refinancing is not always that easy to manage, especially when it comes to lenders who have stringent policies and lengthy approval procedures, making it even more difficult to request a loan. Homeowners today need to be diligent and well-rounded to qualify for a loan, with a healthy income, healthy credit, and excellent value in their home. Before deciding if you should refinance your home mortgage for a loan, you should ask yourself a few questions. Check out America's Best Bookkeepers

Do I have equity in my home?

If Possible, homeowners should have 20% equity in their homes before signing up for a loan or paying private mortgage insurance. The lack of equity can negatively affect the advantage of refinancing and make homeowners owe more than their home’s value. Going for mortgage refinancing without sufficient equity reduces a property’s value. Another issue that impacts qualifying for the loan is the mortgagor’s credit score. To be eligible for refinancing your mortgage to get a loan, you must have a good credit rating, generally as good as or better than when you acquired the original loan that established your mortgage.

What are my Financial Goals?

Most homeowners choose to refinance to reduce their monthly payments. A mortgage calculator may help you in determining your repayment plan and reduce the interest amounts. Many people that refinance are doing so with different terms than the original mortgage. There needs to be a continued focus on your overall financial goals and not only the paying back of your mortgage, whether refinanced or not. Check out America's Best Bookkeepers

What are the terms of the current loan?

While refinancing your mortgage, an important question to ask is about the terms and conditions of your current loan. Terms and conditions, interest rates, and expected and unexpected fluctuations are the most significant economic concerns when homeowners are borrowing. Borrowers need to steer clear of variable rate loans and stick to fixed-rate loans to protect their assets during recession or inflation.

When refinancing your home, you need to have a plan and should be certain about how long you intend to live in the home. Generally, financial professionals who specialize in mortgages will advise on rates and refinancing based on your financial abilities and utilize the terms and conditions of your current loan to help negotiate the terms of the refinancing of the new loan.

Is my credit score high enough?

As a borrower, your credit score is crucial and plays an important role in determining the mortgage rate you can get when refinancing your mortgage. If you have a score of less than about 650, you may find it difficult to refinance your home mortgage. Ideally, you have a score of over 720 to secure a loan through your mortgage refinancing. In some cases, more is expected when refinancing a mortgage because they will look to see if you have paid your mortgage on time up the point of your refinancing application. Check out America's Best Bookkeepers

Do I have a second mortgage or line of credit?

Whether you are getting a first-time mortgage loan or refinancing your current mortgage, it can be an issue if you have multiple loans out. One of the issues is that a lender may not be willing to extend a loan from refinancing your mortgage if you have multiple loans or lines of credit. When determining whether to refinance your mortgage, lenders tend to be more stringent when deciding if they will refinance your mortgage.

Conclusion

The most valuable thing to remember is that you thoroughly question whether you qualify to refinance your mortgage to obtain a loan. You also need to ask yourself if you should do it because it will put you on the path of starting over when paying off your home.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
Reverse Mortgage - Complete Controller

Think of a reverse mortgage like a traditional mortgage where the roles are shifted. In a traditional mortgage, a person takes out a loan to buy a home and then repays the bank over time. In a reverse mortgage, the person owns the home, and they borrow against it, getting a loan from a money lender that they may not necessarily ever repay.

Most reverse mortgages are issued through government-insured plans that have strict rules and lending guidelines. There are also private, or exclusive, reverse mortgages issued by private non-reserve lenders, but those are less controlled and have an increased likelihood of being scams. Check out America's Best Bookkeepers

How Does Reverse Mortgage Work?

Using a reverse mortgage is fairly straightforward: It starts with a mortgagor who already owns a home. The mortgagor either has significant equity in their home (usually at least 50% of the property’s value) or has paid it off entirely. The mortgagor decides they need the financial resources that come with detaching equity from their home, so they work with a reverse mortgage specialist to find a lender and a program.

Reverse Mortgage Eligibility

To qualify for a government-funded reverse mortgage, the owner of a home being mortgaged should be no younger than 62 years old. Borrowers can only borrow against their primary residence. They must also either own their home entirely or have at least 50% equity with no more than one primary lien. Borrowers cannot have a second lien or a second mortgage. If the borrower doesn’t own their home entirely, they have to pay off their existing mortgage with the reverse mortgage’s money.

Only certain properties qualify for government-funded reverse mortgages. Qualified properties include:

  • Single-family dwellings
  • Multi-unit properties with no more than four units
  • Manufactured homes built-in or after June 1976
  • Condos or townhomes

In the case of government-sponsored reverse mortgages, borrowers must also attend an information session with an approved reverse mortgage specialist. They also must remain current on property taxes and homeowner’s insurance and keep their property in good condition. Check out America's Best Bookkeepers

Reverse Mortgage Borrowing Limits

If you get a private reverse mortgage, there are no limits on how much you can borrow. Individual lenders set all limits and restrictions. However, owners are forbidden from borrowing up to their home’s value or the current maximum claim amount when using a government-funded reverse mortgage program. Borrowers can only use a percentage of their property’s worth. Part of the property’s value is used as collateral for loan expenses, and lenders insist on a safeguard if property values decrease. Borrowing limits are adjusted based on the borrower’s age and credit and the loan’s rate of interest.

Reverse Mortgage Costs

There are two primary costs for government-funded reverse mortgages:

Interest rates: Interest rates are generally fixed if you take a lump sum and rates are from under 3.5% to a rate comparable to traditional mortgages and significantly lower than other home equity loans. They are variable based on the London Interbank Offered Rate (LIBOR), with a lender margin.

Types Of Reverse Mortgages

Most reverse mortgages are government-protected loans. This is similar to other government loans, including USDA and FHA loans. These products have rules that traditional mortgages don’t carry because they’re government-protected. These include suitability criteria, underwriting processes, funding options, and, sometimes, restrictions on the uses of funds. There are also exclusive reverse mortgages, which do not have the same strict suitability requirements or lending requirements. Check out America's Best Bookkeepers

Single-Purpose Reverse Mortgage

Single-purpose loans are normally the least costly type of reverse mortgage. Nonprofits and state and local governments provide these loans for particular purposes imposed by the lender. These loans may be supplied for things like repairs or improvements. However, loans are only available in certain areas.

Home Equity Conversion Mortgage

Home equity conversion mortgages are funded by the U.S. Department of Housing and Urban Development. These mortgages can be more costly than traditional mortgages. However, loan resources can be used for just about anything. Mortgagors can choose to get their money in several different ways, including fixed payments, a line of credit, a lump sum, or a mixture of regular payments and other credit lines.

Proprietary Reverse Mortgage

Proprietary reverse mortgages are exclusive loans that aren’t funded by a government agency. Lenders set their entitlement requirements, rates, fees, terms, and the financing procedure. While these loans can be the simplest to get and the quickest to fund, they’re also known to attract dishonest professionals who use reverse mortgages as an opportunity to scam unsuspecting seniors out of their property’s equity.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
Refinancing Your Mortgage - Complete Controller

Home mortgage refinancing is not always that easy to manage, especially when it comes to lenders who have stringent policies and lengthy approval procedures, making it even more difficult to request a loan. Homeowners today need to be diligent and well-rounded to qualify for a loan, with a healthy income, healthy credit, and excellent value in their home. Before deciding if you should refinance your home mortgage for a loan, you should ask yourself a few questions. Check out America's Best Bookkeepers

Do I have equity in my home?

If Possible, homeowners should have 20% equity in their homes before signing up for a loan or paying private mortgage insurance. The lack of equity can negatively affect the advantage of refinancing and make homeowners owe more than their home’s value. Going for mortgage refinancing without sufficient equity reduces a property’s value. Another issue that impacts qualifying for the loan is the mortgagor’s credit score. To be eligible for refinancing your mortgage to get a loan, you must have a good credit rating, generally as good as or better than when you acquired the original loan that established your mortgage.

What are my Financial Goals?

Most homeowners choose to refinance to reduce their monthly payments. A mortgage calculator may help you in determining your repayment plan and reduce the interest amounts. Many people that refinance are doing so with different terms than the original mortgage. There needs to be a continued focus on your overall financial goals and not only the paying back of your mortgage, whether refinanced or not. Check out America's Best Bookkeepers

What are the terms of the current loan?

While refinancing your mortgage, an important question to ask is about the terms and conditions of your current loan. Terms and conditions, interest rates, and expected and unexpected fluctuations are the most significant economic concerns when homeowners are borrowing. Borrowers need to steer clear of variable rate loans and stick to fixed-rate loans to protect their assets during recession or inflation.

When refinancing your home, you need to have a plan and should be certain about how long you intend to live in the home. Generally, financial professionals who specialize in mortgages will advise on rates and refinancing based on your financial abilities and utilize the terms and conditions of your current loan to help negotiate the terms of the refinancing of the new loan.

Is my credit score high enough?

As a borrower, your credit score is crucial and plays an important role in determining the mortgage rate you can get when refinancing your mortgage. If you have a score of less than about 650, you may find it difficult to refinance your home mortgage. Ideally, you have a score of over 720 to secure a loan through your mortgage refinancing. In some cases, more is expected when refinancing a mortgage because they will look to see if you have paid your mortgage on time up the point of your refinancing application. Check out America's Best Bookkeepers

Do I have a second mortgage or line of credit?

Whether you are getting a first-time mortgage loan or refinancing your current mortgage, it can be an issue if you have multiple loans out. One of the issues is that a lender may not be willing to extend a loan from refinancing your mortgage if you have multiple loans or lines of credit. When determining whether to refinance your mortgage, lenders tend to be more stringent when deciding if they will refinance your mortgage.

Conclusion

The most valuable thing to remember is that you thoroughly question whether you qualify to refinance your mortgage to obtain a loan. You also need to ask yourself if you should do it because it will put you on the path of starting over when paying off your home.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers