by Holly Magister, CPA, CFP® | Business Capital, Grow a Business |
The Employee Retention Tax Credit (ERTC aka the ERC) applicable to the Covid-19 pandemic has been evolving from its initial congressional act in March of 2020, was enhanced by the Consolidated Appropriations Act passed in January 2021, updated by the American Rescue Plan in March of 2021, and most recently updated by the Infrastructure Investment and Jobs Act.
If your head is spinning as you try to unravel the ERC rules, you are not alone. The ERC or Employee Retention Credit offers a viable and alternative way to recover payroll costs for any type of employer, except state and local government entities, regardless of their size.
by Holly Magister, CPA, CFP® | Business Capital, Grow a Business |
The SBA EIDL Round 2 extended application deadline to 12/31/2021 and introduced the New Targeted EIDL Advance Grants for businesses continuing to suffer from the Covid-19 pandemic. Learn more about the changes to the EIDL program, which businesses can qualify for the EIDL grant and how to apply.
by Holly Magister, CPA, CFP® | Business Capital, Grow a Business |
On Monday, May 3rd, 2021, the Small Business Administration (SBA) opened its application portal for the Restaurant Revitalization Funding (RRF) to certain restaurants, bars and other similar businesses that serve food and/or drink which have suffered a reduction in revenue in 2020 when compared to 2019 as a result of the pandemic.
Similar to the Paycheck Protection Program Loan (PPPL) program, this federally-funded program is intended to provide cash to businesses which have suffered revenue losses and if spent on the proper types of expenses within a specific period of time (the Covered Period), the loan may be fully-forgiven by the SBA.
by Holly Magister, CPA, CFP® | Business Capital, Grow a Business |
Up until now, the PPP Loan proceeds for Schedule C filers was based on the 2019 net profit (referred to as the net earnings from self employment) plus payroll costs if employees worked in the business. The Interim Final Rule (IFR) effective on March 3, 2021 allows a business owner to use either their gross income or net income as the basis to compute its PPP Loan request amount.
by Holly Magister, CPA, CFP® | Business Capital, Exit Planning, Sell a Business |
The Small Business Administration (SBA) issued a Procedural Notice on October 2, 2020 which offers business owners and lenders guidance on how Paycheck Protection Program (PPP) Loans are to be handled when a business has a change in ownership.
This post summarizes the notice and includes an Infographic to assist business owners. It includes the following topic:
When does a Business Sale Require the SBA’s Approval
Does a Business Sale Require the PPP Lender’s Approval or Notification
Required Steps Pre and Post-Closing for PPP Borrowers
SBA Timeframe to Approve a Sale or Merger when a PPP Loan Transfers
Does the EIDL Grant Impose Additional Steps When Selling a Business
by Holly Magister, CPA, CFP® | Business Capital, Grow a Business |
On June 15, 2020, the Small Business Administration reopened the Economic Injury Disaster Loan (EIDL) applications to businesses with no more than 500 employees and non-profit organizations operating and suffering substantial economic injury as a result of the pandemic in all of the U.S. states, Washington D.C., and territories.
Independent Contractors, sole-proprietors (with or without employees), gig workers and freelancers are also eligible to apply for the EIDL.
by Holly Magister, CPA, CFP® | Business Capital |
On June 5, 2020, President Trump signed into law the Paycheck Protection Program Flexibility Act (PPPFA), which is the latest attempt to save struggling businesses from permanent shutdown.
The Flexibility Act offers business owners seven significant changes to the original Paycheck Protection Program (PPP) Loan terms. The House and Senate were driven to make these changes due to the lengthy pandemic and the fact that many PPP Loan recipients have not been able to re-open their doors for business during the required eight-week ‘covered period’ set forth in the original PPP Loan Act.
The PPP Loan Flexibility Act will make it much easier for business owners to achieve full, or nearly full, loan forgiveness.
The new law provides business owners with seven significant changes to the original law and those include:
by Holly Magister, CPA, CFP® | Business Capital |
The Small Business Administration announced on Thursday, April 16th all federal funds set aside for the Paycheck Protection Plan (PPP) Loans have been allocated to those business owners who were persistent (and fortunate) enough to get through the application process and receive an official registration number from the SBA via its bank.
In simple terms, the PPP Loans are out of money to assist business owners.
by Holly Magister, CPA, CFP® | Business Capital, Grow a Business |
On Friday, March 27, 2020, the Paycheck Protection (Loan) Program (PPL) for small businesses was approved as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. This new law is intended to help small business owners in an unprecedented way.
First, while the Paycheck Protection Program Loan will be initially set up by banks and approved by the SBA under section 7 (a), unlike other SBA loan programs, the PPL is guaranteed 100% by the SBA.
Second, if the proceeds of the loan are used by business owners as Congress, the Senate and President Trump intended, the loan will be forgiven.
by Jason Milleisen, SBA Workout Specialist | Business Capital, Exit Planning |
For many businesses, the ultimate goal is to sell the business. Can you picture it? Walk away from the daily stress and aggravation with a fat pile of cash. Hop a plane to your favorite tropical destination and spend the rest of your days lounging a white sandy beach, sipping pina coladas out of a coconut, without a care in the world.
Well, friends, the above scenario is the ideal scenario. I like sipping cold drinks on a beach as much as the next guy, and I hope that happens for you. But if you clicked on this article, you may be looking at a much different scenario.
And that’s what this article is going to cover: the less-than-ideal scenario.
by Holly Magister, CPA, CFP® | Business Capital, Grow a Business, Trepopedia |
Without cash flow, a business cannot pay its employees, make debt payments, or invest in its future growth – making cash flow a critical focal point in every business, regardless of size. Yet searching for the correct small business financing can be overwhelming,... 
by Holly Magister, CPA, CFP® | Business Capital, Grow a Business, Start a Business, Trepopedia |
Business debt and equity are central to the operations of any company. The amount of debt and equity a business carries has a major impact on how the business operates, and on how it is positioned for success. Business capital is the money a company uses to purchase... 
by Holly Magister, CPA, CFP® | Business Capital, Grow a Business |
v Have a Question? Add it to the bottom of this post! Business Lending from Banks Whether you’re a Main Street small business, an Entrepreneur growing a business from start-up, or a Middle Market Business about to embark on an Initial Public Offering (IPO),... 
by Holly Magister, CPA, CFP® | Business Capital, Grow a Business |
Sufficient cash, otherwise known as business capital, is necessary for any business to pay vendors and employees on time and to invest in real and intangible assets that enable growth. That’s why, as a business owner, it’s critical to understand what business... 
by Holly Magister, CPA, CFP® | Business Capital, Grow a Business |
Whether you’re growing a business organically or searching for ways to jump start business growth with a large cash infusion, don’t allow the large number of capital sources for your business become overwhelming. This post identifies several... 
by Holly Magister, CPA, CFP® | Business Capital, Grow a Business, Trepopedia |
v Have a Question? Add it to the bottom of this post! What Are Loan Covenants? A covenant is simply a fancy term for the word ‘promise’. Banks include covenants in their loan agreements to preserve their position as the lender and to improve the likelihood a loan... 
by Holly Magister, CPA, CFP® | Business Capital, Grow a Business, Trepopedia |
Business debt consolidation refers to the practice of taking out a new loan to pay off any number of other business debts (generally unsecured debts). Multiple separate debts are combined into one new loan, often with more favorable loan terms and conditions.... 
by Holly Magister, CPA, CFP® | Business Capital, Grow a Business, Trepopedia |
Once you’ve successfully assessed your financial needs for a business loan, you’ll want to follow these guidelines to determine what, if any capital funding you may need, and the best type of business loan for your business. What are the best reasons for a small... 
by Holly Magister, CPA, CFP® | Business Capital, Grow a Business, Trepopedia |
v Have a Question? Add it to the bottom of this post! As a small business, it is imperative that you understand your financial needs. Knowing your projected annual expenses, having a business plan in place, and assessing your need for funding sets the foundation for a... 
by Holly Magister, CPA, CFP® | Business Capital, Grow a Business, Start a Business |
Have a Question? Ask your question below and one of our Advisors will... 
by Holly Magister, CPA, CFP® | Business Capital |
One of the hardest parts about starting a new business is finances. How do you get the business financing you need? Which option is the best for your business? How do you handle those finances responsibly? What’s a P&L statement? If you’re thinking of... 
by Holly Magister, CPA, CFP® | Business Capital, Sell a Business, Trepopedia |
A Data room may be a physical room or a virtual room and are used for a number of reasons – including data storage, document exchanges, financial transactions, file sharing, and legal transactions. Often, data rooms are used for the sale of a business or when raising... 
by Holly Magister, CPA, CFP® | Business Capital, Grow a Business |
Subordinated debt (sometimes also referred to as a subordinated loan, junior debt, subordinated bond, or subordinated debenture) is a debt that ranks below other, regular debt on a company’s balance sheet. In the event the company faces bankruptcy or liquidation,... 
by Holly Magister, CPA, CFP® | Business Capital, Grow a Business, Trepopedia |
An asset-based loan (also sometimes called “asset-based financing” or “commercial finance”) is a type of business financing secured by an asset (or multiple assets) of the company. Often, these loans are structured to function like revolving lines of credit, allowing... 
by Holly Magister, CPA, CFP® | Business Capital, Grow a Business |
There are several types of loans available to business owners — so many, in fact, that the options can seem overwhelming and confusing, especially to smaller business owners without a lot of experience raising capital. This guide will help educate you on the options so you can make a more informed decision about financing your growing business while limiting added risk.
by Holly Magister, CPA, CFP® | Business Capital, Trepopedia |
In its purest form, Mezzanine Debt is a business debt instrument that carries along with it certain rights to convert debt into equity (stock, common shares, partnership interests, LLC membership units, etc.). Mezzanine debt financing is not a pure debt or a pure equity instrument. It is something in the middle. In fact, the word ‘mezzanine’ is derived from the Italian word ‘mezzano’, meaning middle, and is used to describe how this particular form of business capital combines elements of both debt and equity financing into one instrument.
by Chris George | Business Capital, Grow a Business |
Unfortunately, owning a business does not make someone an expert in financing. The lenders are the ones who know the ins and outs of rates and terms and documents. To even out the playing field, it is important for a small business owner to ask the right questions and consider the following factors when deciding whether to refinance:
by Holly Magister, CPA, CFP® | Business Capital, Grow a Business |
Many small business owners borrow money to start and grow their business. And is often the case those same business owners find themselves hitting credit limits established by banks and other lenders causing enormous growing pains for the business. Simply stated, running out of business capital when you’re growing a business is difficult at best.
by Chris George | Business Capital, Start a Business |
In the last six years, millions of Americans have lost their jobs and found it exceedingly difficult to find new ones, even after putting in decades with the same company. Many forward-thinking individuals among the unemployed have concluded that creating their own businesses and jobs may be their best hope for working again. The entrepreneurial spirit is still alive and well in America!
![How to Calculate Debt Service Coverage Ratio [Tool]](https://b226520.smushcdn.com/226520/wp-content/uploads/2017/02/iStock-502733644.jpg?lossy=1&strip=1&webp=1)
by Holly Magister, CPA, CFP® | Business Capital, Grow a Business, Trepopedia |
Debt Service Coverage Ratio compliance often is required or necessitated by covenants in a bank loan agreement. A bank loan covenant regarding the debt service coverage ratio will specify the amount of income a business and/or its guarantor must generate relative to the debt principal and interest payments on an annual basis to remain in compliance with the covenant. The business owner, or his or her CFO or Controller, should monitor this ratio carefully on a monthly basis so the covenant is not unintentionally broken.
by Holly Magister, CPA, CFP® | Business Capital |
The debt service coverage ratio is a measurement used by lenders to determine if a business is able to meet its debt servicing obligations through its operating income during a given period of time. In most cases, a lender wants the operating income to exceed the debt servicing costs by some measure. This ratio defines the extent to which a business’s operating income (or other defined measure of cash flow) exceeds the cost to service its bank loans.
by Chris George | Business Capital, Grow a Business |
Most individuals who consider themselves entrepreneurs believe they must start their own business to earn the title. However, what some do not realize is that the entrepreneurial spirit can be fulfilled in a variety of ways, not the least of which is purchasing an existing business. The following is a list of advantages for buying a business over starting one from scratch.
by Matt Harnett, CAIA | Business Capital, Grow a Business |
As markets recover post-recession, business owners are presented with growth opportunities. However, a business owner may not have access to the capital needed to execute on a growth strategy. Where does a business owner turn?
by The Exit Promise Contributors | Business Capital, Grow a Business |
Many entrepreneurs faced with the demands on cash of a growing business are tempted to sell equity to outside investors, or perhaps give away stock to retain a valuable employee. Diluting your stake in this way may solve the immediate problem, but it can have unforeseen consequences when the business eventually is sold. Stockholders’ personal circumstances evolve in different ways over the lifetime of a company, and whatever the original intention everyone may not be on the same page when you are ready to sell.
by Holly Magister, CPA, CFP® | Business Capital, Sell a Business |
Many business owners are under the wrong impression that their business debt will disappear when their business is sold. In some cases, the debt is absorbed or is assumed by the buyer. But usually this is not the case.
by Matt Harnett, CAIA | Business Capital, Sell a Business |
Recapitalizations can be used to provide liquidity to owners, refinance the balance sheet or fund future growth initiatives. When the owners sell a majority of the business but still retains some ownership, it is termed a “majority recapitalization”.
by Holly Magister, CPA, CFP® | Business Capital, Trepopedia |
Entrepreneurs often face the need for alternative sources of business capital to traditional bank financing but are often unable to find them. Similarly, they can find themselves at a loss to understand how this form of capital differs from traditional bank... 
by Holly Magister, CPA, CFP® | Business Capital, Trepopedia |
The Bank Workout Group is a department in a bank that handles what is known as the bank’s special assets. Banks send their troubled loans to this department to handle negotiation and management of the bank’s forbearance agreements.
by Holly Magister, CPA, CFP® | Business Capital |
As we gathered last week, instead of receiving the financial documentation we were promised, we were all relieved of our duties. Isn’t that a nice way to say “you’re fired”?
by Holly Magister, CPA, CFP® | Business Capital, Grow a Business, Sell a Business, Trepopedia |
EBIT is an acronym for Earnings Before Interest and Taxes. This is a term Bankers often use as a measure of a business’s earnings from operations. The EBIT reveals operating profitability without non-recurring or unusual income or expenses.
by Holly Magister, CPA, CFP® | Business Capital |
I continue to be surprised as I meet with entrepreneurs who truly regard Venture Capital as their Holy Grail. It’s as though they are looking for a Super Hero to make their dreams of entrepreneurial success come true. But having spent more than a few sessions on the entrepreneur’s side of the table in negotiations with venture capital firms, I know better. And it seems there are others who share my opinion!
by Holly Magister, CPA, CFP® | Business Capital |
Not long ago, one of my dear friends abruptly stated “it’s not about you” after patiently listening to my long story about a business relationship which changed, without warning. I just love this friend and how she was able to candidly share her observation which has proven to be brilliant and incredibly powerful.
by Holly Magister, CPA, CFP® | Business Capital |
Working with successful entrepreneurs who are dedicated to growing and selling a valuable business offers me the opportunity to learn from the best. I pinch myself most days as I am invited into the lives of my clients and have the privilege of experiencing the ups and downs of entrepreneurship. Truly, it is my pleasure!
by Holly Magister, CPA, CFP® | Business Capital |
Often entrepreneurs find themselves in a situation where their commercial bank considers their existing line of credit too risky to extend or renew. This places the entrepreneur and their banker at odds, and many times pushes the business owner to take drastic steps to keep their company’s doors open and paychecks coming. Has this happened to you or one of your fellow entrepreneurs?
by Holly Magister, CPA, CFP® | Business Capital, Grow a Business |
Many people discuss the importance of pivoting in the context of a startup business. And I agree, once a business launches, the entrepreneur must be mindful of what is working and what is not. That’s when it is time to pivot the startup.
by Holly Magister, CPA, CFP® | Business Capital, Grow a Business |
Bankers and Entrepreneurs rarely see eye-to-eye. Recently, my observation of this unfortunate reality caused me to chuckle as I sat with one of my clients and her business banker. What made me laugh was how two extremely accomplished individuals could define the term “special assets” so differently.
