Published on: 12 February 2019
Last Updated on: 08 August 2019
Things happen, circumstances change, and often, people find themselves unable to pay their taxes. If you find yourself in a similar position, it is important that you understand the gravity of the situation. Continued refusal to pay your taxes could lead the IRS to take it forcibly: by garnishing your wages or putting a lien on your assets.
However, according to Glenn Sandler, CPA, founder of G.I. Tax Service, there is no need to panic. If you can’t pay your taxes or you owe an amount in back taxes, you can enter into an agreement with the IRS and leverage one of their several payment options. Here is how to go about it:
Ensure that you are in filing/payment compliance:
To enter into an agreement with the IRS, you must ensure that all your tax returns are filed. The next step is to keep enough of your wages aside to pay off your taxes for the current year. To do this, you will need to estimate your tax returns for the year and ascertain that the wage percentage that was withheld will suffice. If you don’t know how to file tax returns or make accurate enough estimations, please contact tax professionals that will help you through the process.
Review your tax returns:
Check your tax returns to ensure that the balance that the IRS expects you to pay is correct. The smart play is to calculate your returns for the years you owe and the 3 years that precede it, i.e., if you owe taxes for a year, review your account for the past 4 years. By doing so, any discrepancy between your calculated returns and your tax balance (according to the IRS) can be remedied. Also, if you incurred any penalties in the past, you can try to get them reduced or removed completely.
Enter an agreement with the IRS:
Once you have filed your taxes and are back in compliance, and have confirmed that you owe exactly what the IRS says that you do, the next thing to do is enter an agreement with the IRS. The alternatives available include:
A brief extension of the payment period.
The different installment agreements (monthly payment plans with varying terms and conditions).
Postponed payment (known as currently not collectible status) for people in financial hardship.
An offer in compromise (OIC); a settlement option that allows taxpayers with special and extenuating circumstances to clear their debt by paying a portion of their total balance.
Depending on their individual situations, taxpayers with back taxes are eligible for one of the above. Before deciding on which of them to apply for, evaluate your current assets, calculate how much you can pay per month, and consider the effect of incurring even more interest and penalties.
Consult a tax professional:
If you don’t know how to do any of the above, your best bet is to reach out to a tax expert at G.I. Tax Service. They can help you file your returns and ensure that you are in compliance, check your tax returns and correct any discrepancies, and apply for one of the IRS’ payments options after considering your financial circumstances.
When managed smartly, tax debt does not have to be disruptive. All you have to do is secure a payment plan that works well with your income, and before you know it, the debt is all gone.
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Legal Entity Identifier is an alphanumeric, 20-character code developed by the International Organization for Standardization. Abbreviated as LEI, this code contains information on the company's ownership structure and provides answers of 'who is who' and 'who owns what.'
It gives a unique identification of all legal entities (organization, company, firm, trust, fund, and government body) that are participating in any financial transactions.
The complete LEI system is operated and maintained by GLEIF (Global LEI foundation), and the right to issue LEIs is only given to the few organizations.
It All Started With Wrigley's:
In 1974, when the grocery industries were pleading for the development of barcode, many companies proposed their proposals to bring them. Considering this, the UPC was introduced, which became the first code to be scanned on Wrigley's Chewing gum.
Later, to end the one-dimensional (UPC) barcode, which only contains 20-alphanumeric codes, Denso Wave (a Toyota's subsidiary) invented Quick Response (QR) codes. QR codes are a two-dimensional system that focuses on rapid scanning and is widely used by today's marketers to streamline processes.
Legal Entity Identifier (LEI) Came In Existence - 2011
The LEI was developed by the G20 (an international organization with 20 major countries) in 2011 to track all financial transactions in national jurisdictions. The need for LEI came when regulators were suffering from financial crises, and there was no unanimous code to make successful financial transactions.
The difficulties in identifying transaction details and calculating the risk amount bring LEI into existence. The first (LEI) legal entity identifiers database was issued in December 2012.
Structure Of Code:
Technically, the Legal Entity Identifier is represented as ISO 17442. It contains 20-character alphanumeric numbers with the first four characters showing the LOU, Local Operating Unit. The other 5-18 characters are an alphanumeric string, which organizations assign. And, the last two characters are called checksum digits.
Process Of LEI:
The companies that need a Legal Entity Identifier should contact the respective organizations that provide LEIs. They then have to provide the necessary information and the fee. The issuing body will then provide LEI after cross-checking all details. Things like registration of the business, information about other connected companies, etc. are verified before giving LEI. Some other things, which the issuing body will assure, are:
A country where the entity was formed
The registered address of the legal entity
Any legal or official name of the entity (if any) that is present in the records
The Unique code of representing countries and their connected company's
Data of the first LEI assignment, date of the last information update and it's an expiry date
Why LEI Is Important:
LEIs reduce the risks associated with financial transactions. With them, you can easily measure the total risk involved in trading.
It minimizes the overall cost of reporting tasks, cost of information gathering, and other administrative costs.
LEI help in enhancing market transparency as with a unique code, it is easy to detect the frauds and other manipulations in the market.
Who Should Need LEI?
Organizations, corporations, and other entities that are involved in the financial transactions need LEI to recognize all entities and funds involved in the transactions. If you are any of the following, you can register for LEI:
A non-profit organization
Registered Company or Registered Subsidiary
A business having a distinct identity
A trust or Funds
LEI In Business And In Payment Systems:
To have clear business identification and to make transparent financial transactions, business needs a unique code called LEI. LEI also helps to minimize the cost and the speeding process of transactions, improve data sharing, and more. Furthermore, in trading (direct and indirect payments), LEI ensures that the correct information is used to transfer funds.
LEIs not only ensure transparency and safety in the global market, but also provide maximum compatibility and safe business.
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Planning to investigate some small business loans? What are the best options out there?
Most importantly, how can these loan options help you?
Contrary to popular belief, it is more complex than filling out a form and getting your loan approved. That too from the very first source!
There is eligibility, which you must fulfill from your end, and criteria that the small business loan providers must ensure.
These are subjective to individuals and the business they are trying to build.
For example, which provider should you go for when you need a quick loan of a larger or smaller amount?
So, without any further ado, let’s get into the blog post
What Are Small Business Loans?
What are exactly small business loans? The criteria? Is it different than other forms of business loans?
Small business loans are classified under money lending for commercial purposes Like any other business loan.
There are several reasons why you would consider lending. Do not worry if it is for operational expenses and you fall short!
Not everyone accesses such loans just for their initial business investment or to extend their business to new grounds. In fact, it is common for people to underestimate their expenditure margin when they are starting their business.
In fact, in 2020, 56% of all small business loans were to manage operational costs. While only 31% of loans were for expansion opportunities.1
The Best Small Business Loans
Here are the best small business loans to investigate:
1. SBA 7(a) Loan
LoanCredit ScoreMinimum YearsMinimum Revenue (Yearly)Maximum Loan AmountTime of Acceptance SBA 7(a) Loan680+Two years$100,000+$5 million5-10 business days
This government-backed loan program offers competitive rates and long terms for various needs.
Pros:
Low interest rates
Long repayment terms
Cons:
Lengthy application process
Strict qualification criteria
2. Kabbage Business Line Of Credit
LoanCredit ScoreMinimum YearsMinimum Revenue (Yearly)Maximum Loan AmountTime of AcceptanceKabbage Business Line of Credit640+1 year$50,000+$250,000 Same day
This is a revolving line of credit with a quick application process for managing cash flow.
Pros:
Fast funding
Flexible access to funds
Cons:
High APR
Limited revolving credit line (although that is how they advertise).
3. OnDeck Term Loan
LoanCredit ScoreMinimum YearsMinimum Revenue (Yearly)Maximum Loan AmountTime of AcceptanceOnDeck Term Loan600+1 year$100,000+$250,000 24 hours
This loan offers short-term loans with quick approval, which is ideal for fast access to capital.
Pros
Fast Funding
Discounts for repeat customers
Cons
High interest rates
Frequent repayments
4. BlueVine Business Line Of Credit
LoanCredit ScoreMinimum YearsMinimum Revenue (Yearly)Maximum Loan AmountTime of AcceptanceBlueVine Business Line of Credit600+Six months$100,000+$250,000 24-72 hours
Flexible line of credit with fast approval, useful for managing cash flow.
Pros
Quick funding
No early repayment fees.
Cons
Higher rates for lower credit scores.
Limited to revolving credit.
5. Fundbox Line Of Credit
LoanCredit ScoreMinimum YearsMinimum Revenue (Yearly)Maximum Loan AmountTime of AcceptanceFundbox Line of Credit600+Six months$50,000+$150,000 As fast as the next business day
It provides a simple, quick line of credit ideal for immediate cash flow needs.
Pros
Easy qualification
Quick access to funds
Cons
Lower Loan Amounts
Shorter Repayment terms
6. Lendio Loan Marketplace
LoanCredit ScoreMinimum YearsMinimum Revenue (Yearly)Maximum Loan AmountTime of AcceptanceLendio Loan Marketplace550+Six months$50,000+$5 million On the loan amount
This type of loan is a great help to small business owners. Rather than just one loan, this is a marketplace that connects businesses with multiple lenders for various loan types.
Pros
Wide range of loan options.
Easy comparison of the offer.
Cons
Can receive multiple calls from lenders, which can be irritating.
Not all lenders have favorable terms.
7. American Express Business Loan
LoanCredit ScoreMinimum YearsMinimum Revenue (Yearly)Maximum Loan AmountTime of AcceptanceAmerican Express Business Loan660+1 yearNot specified$50,000 3-5 days
This fixed-rate loan is available only to pre-approved American Express Business Card members.
Pros
Fixed rates
No origination fee
Cons
Only available to pre-approved members.
Relatively small maximum loan amount.
Therefore, if you plan to get a small business loan in the foreseeable future, getting an American Express Business Card is better.
8. Accion Opportunity Fund
LoanCredit ScoreMinimum YearsMinimum Revenue (Yearly)Maximum Loan AmountTime of AcceptanceAccion Opportunity Fund550+1 yearNot specified$250,000 1-3 weeks
Offers loans to underserved small business owners, including minorities and women.
Pros
Focus on underserved businesses.
Personalized support
Cons
Longer approval process.
It may have a higher interest rate.
9. Credibly Small Business Loan
LoanCredit ScoreMinimum YearsMinimum Revenue (Yearly)Maximum Loan AmountTime of AcceptanceCredibly Small Business Loan500+Six months$15,000/month$400,000 24-48 hours (about two days)
Provides working capital loans and merchant cash advances with flexible terms.
Pros
Fast funding
Flexible repayment options
Cons
Higher cost of financing.
Frequent repayments
Small Business Loans With Separate Criterions
Now, we will be delving into the different criteria and which small business loan provider would be best!
1. Startup Needing Initial Capital
"I just started my business and need funds to get it. What are my options?"
Best Loan: Fundera by NerdWallet
Offers access to multiple loan options, including startup loans, even with lower credit scores and minimal business history.
2. Expanding An Established Business
"I’ve been in business for two years and want to expand. What loan should I consider?"
Best Loan: SBA 7(a) Loan
Ideal for established businesses needing significant funding for expansion, with favorable terms and interest rates.
3. Need For Quick Cash Flow Solutions
"I need quick access to cash to manage cash flow. What’s the fastest option?"
Best Loan: Kabbage Business Line of Credit
Offers quick application and approval processes, with funds available on the same day for urgent cash flow needs.
4. Managing Seasonal Inventory And Expenses
"My business is seasonal, and I need funds to purchase inventory before the busy season. What loan fits this need?"
Best Loan: OnDeck Term Loan
It provides short-term loans with quick funding, ideal for managing seasonal inventory purchases and expenses.
5. New Business Owner With Limited Credit
"I have a low credit score and a new business. Are there any loan options available for me?"
Best Loan: Credibly Small Business Loan
Accepts lower credit scores and offers working capital loans, making it accessible to newer businesses with limited credit.
6. Needing A Flexible Line Of Credit
"I want a flexible financing option. This is to cover unexpected expenses as they arise. What should I look for?"
Best Loan: BlueVine Business Line of Credit
It offers a flexible line of credit with fast approval. Plus, it is suitable for covering unexpected expenses.
7. Seeking Low Interest Rates And Long Terms
"I’m looking for a loan with low interest rates and long repayment terms. What’s the best choice?"
Best Loan: SBA 7(a) Loan
It is known for its low interest rates and long repayment terms. Therefore, it is ideal for businesses seeking cost-effective funding.
8. Socially Responsible Business Owner
"I want to support a loan provider that helps underserved communities. What are my options?"
Best Loan: Accion Opportunity Fund
Focuses on providing loans to underserved small business owners. In fact, it also includes minorities and women, with personalized support.
9. Looking For A Fast And Easy Application Process
"I need a loan. However, I don't want to go through a long application process. Which loan is easy to apply for?"
Best Loan: Fundbox Line of Credit
Offers a simple, quick application process with funds available before the next business day.
10. Needing A Small, Short-Term Loan
"I need a small amount of money quickly for a short-term need. What’s the best option?"
Best Loan: American Express Business Loan
It provides small, fixed-rate loans with a quick approval process, which is ideal for short-term financial needs.
Related: How To Use An SBA Loan For Business Purchase
Eligibility For Small Business Loans
You might find the best loan provider. However, when it comes to eligibility, rejection can be common.
Regarding personal loans, good mortgage lending (a property that you place as collateral when taking the loan) makes loan acceptance easier.
However, when it comes to business loans, the rules are a little different. The loan lender (bank or private) must closely investigate your business expenditure, cash flow, and profit margin.
If you do not have a steady personal and business credit score (unless you are building your business from scratch, in which case the rules will be different), getting your small business loan approved can be challenging.
Do not worry; this is not to scare you. However, ensure you take the time to investigate your and improve financial health.
Here are some of the absolute eligibilities when it comes to small business loans.
1. Your Business Needs To Be Nonprofit
Unfortunately, you cannot have a nonprofit organization and demand a small business loan. Your business must be making some profit through a steady income.
2. A Lucrative Business Idea, Aka The Cash-Flow
Since business loans do not depend on collateral submission, lenders are mostly concerned about the business idea.
Most importantly, is there a demand for such business in the market?
Will there be enough opportunities to build a steady cash flow?
Is there any stock market share for businesses with the same ideation?
The loan they offer you will depend on the potential profit you can make from that base. Plus, it must be backed by solid data.
3. Your Credit Score
Although we have already mentioned the credit score for each loan provider, you need to be serious about your creditworthiness.
Any loan provider will scrutinize your personal and business credit score. Any suspicious activity (including something as simple as an unpaid credit card bill) can put you under the radar. Eventually, it does not make you a good candidate for a loan.
In other cases, your business credit score also plays a crucial role.
What is your total business income?
Is it holistic with your business expenditure?
What is your business credit card transaction history? Are you able to balance your bills alongside your monthly operational costs?
...and many more.
You must submit all your financial documents, especially if you are planning to expand through different business locations and real estate. How your business funds are handled becomes crucial in such a case.
Secured & Unsecured Loan
Starting a business? Want a small business loan? Then, you should understand the importance of collateral in such a business.
Most importantly, do you even need to submit collateral to get your loan sanctioned?
Secure business loans will charge you some collateral (cash money, real estate property, gold bonds, etc.).
Meanwhile, unsecured loans do not charge any collateral.
Which is better as Small Business Loans
As someone just starting a business, I know the advantages/disadvantages of both kinds of loans will depend on your criteria and loan amount.
So, let’s discuss the overall pros and cons of both!
Secured Loans
Let’s begin with the kind of loans that require collateral.
Pros ConsLower Interest RatesLonger Approval RatesHigher Loan Amounts (because of the collateral)Risk of Losing AssetLonger Repayment Period (you can elongate your loan repayment term for two decades)Not everything can be collateral. It, after, depends on the bank.
Unsecured Loans
Now, let’s talk about loans without collateral.
ProsConsYou Need No CollateralAutomatically, the maximum loan amount is less.Quick Loan ApprovalHigher Interest RatesFlexible for all types of loansThe repayment period is a short
When Should You Get What?
For the ease of your own understanding, here is when you should get what!
Secured Loans Might Be Better If
You need a larger loan amount.
Can provide valuable collateral.
You want lower interest rates and longer repayment terms.
If your business has significant assets that can be used as collateral.
Unsecured Loans Might Be Better If
You do not have assets to offer as collateral.
Need funds quickly.
You prefer not to risk losing business or personal assets.
The business needs a smaller loan amount.
You can check the listicle above for a good idea of which secure/unsecured small business loans would be better for you.
Types Of Small Business Loans
These are the types of small business loans which you should investigate:
Term Loans: You borrow a set amount and pay it back over time with fixed payments.
SBA Loans: The government backs these loans, giving you good terms for your business.
Business Lines of Credit: You get access to a credit line like a credit card.
Invoice Financing: You can get cash based on your unpaid invoices.
Equipment Loans: This loan helps you buy business equipment.
Merchant Cash Advances: You get an advance on your future credit card sales.
Microloans: These small loans are often given by nonprofits to help you start.
Commercial Real Estate Loans: Use these loans to buy or fix up your business property.
Personal Loans for Business: You can use your personal credit for business needs.
Franchise Loans: These loans help you start or grow a franchise business.
The Final Note!
The choice between a secured and an unsecured small business loan ultimately depends on your specific needs and circumstances.
a secured loan might be more suitable If you have valuable assets and prefer lower interest rates.
On the other hand, if you need quick access to funds and prefer not to put up collateral, an unsecured loan could be the better option.
Always consider the terms and conditions carefully and consult a financial advisor to make the best decision for your business.
Things to remember before you get a small business loan:
Have a solid, chalked-out plan for how you will repay it. You wouldn’t want to lose your collateral.
Do not take hasty loans because you have fulfilled a business milestone. Remember, a loan is not a temporary fix; it is a debt for years to come. Therefore, be careful before sanctioning a loan.
Finally, be candid about your financial decision. Keeping it discreet to get a quicker loan approval will only cause you trouble later.
What do you think? Should getting a small business loan come after so many considerations, or should it be a little easier?
Do let us know in the comment section below!
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Insurance is an essential part of ownership, whether it’s for a home, a car, or even personal belongings. With so many potential unexpected situations that can arise, it is smart to be proactive and to purchase insurance. It can protect you and your belongings from any outstanding and expensive damages.
However, when it comes to monthly payments, it’s natural to want to pay as little as possible while still maintaining a decent amount of coverage. By taking the right steps beforehand, you can find an insurance provider that will properly assess your property for the right cost.
Here are 4 tips for finding the cheapest insurance for you:
1. Do Your Research:
This seems like a given, but with so many options to choose from it can be dauntingto narrow down which company is the best match for you. A simple Google search can give you most of the answers you’re looking for, as well as the company websites.
However, when it comes to cutting costs, it is best to specifically research car insurance without a down payment. Initial fees can be incurred at high rates, and many car companies do not require such things. Places like Geico and other insurance companies will allow you to find the exact right price range that still fits within your budget. You can also read reviews and testimonials to gauge their reputability from customers.
2. Request Free Quotes:
After you have researched enough to narrow down your choices to a smaller list of insurance companies, it’s time to ask for a free quote on your current home and/or vehicle. The insurer will ask standard questions related to your property as well as your background. They can oftentimes get back to you within the day.
Since quotes are typically free, it does no harm to request them. This way you can be a given a specific number for your particular situation and needs, rather than a range or average number. Once you have been given your quote, you can compare the numbers of the companies you are deciding between and what they are able to offer you in the way of services.
3. Make a List:
Many insurance providers are also able to provide additional insurance such as renter’s insurance combined with a vehicle. By conglomerating multiple insurances, you are able to alleviate the stress of juggling multiple payments per month and simplify it to only one.
In addition to this, insurance companies often have a wide range of coverage that is designed to accommodate a wide variety of people in different financial places. By making a list of your absolute essential needs, you are more prepared when speaking to a representative about what they can offer you and at what price. Keep in mind that with most companies, you have the ability to change, add, or remove any additional coverage at any time.
4. Ask Around:
Talk to your family and peers about their experiences with their different providers. You may hear the same company names come up, but oftentimes there is a reason those companies reach so many and have such a well-known reputation. Make no mistake, word of mouth is still a worthy resource to pursue, even in the digital age.
In Conclusion:
While it can be a pain and seem unnecessary at times, insurance is a crucial part of owning property and protecting your legal rights. Insurance companies are there to provide support and answers during stressful moments. If you are able to find the right plan for your financial situation, it will be worth it in the end.
By doing an apt amount of research, making a list of your requirements and budget, and speaking directly with insurance companies about your needs and concerns, you have the tools to find the cheapest insurance while still protecting your property in the event of an accident.
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