Category Archives: Finance

Applying for Economic Injury Disaster Loan (EIDL) Assistance

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LATEST UPDATE on Applying for Economic Injury Disaster Loan (EIDL) Assistance (as of 3/30/2020)

Things are changing rapidly and the platform to apply for assistance has changed.   If you have previously filed an application, you do not need to submit another through this process.  Your application is in process, and you should be hearing something soon.

To begin a new application:

  • Start the process here:    https://covid19relief.sba.gov/#/.
  • You will be asked to fill in some basic information about your business and the business owners.
  • On the last screen, if you opt in to the $10,000 request for emergency funds, you will need to supply your bank account and routing number.
  • You will see a summary of all your information that you can review prior to submitting your application.
  • You will not be asked to upload any documentation at submittal; however, you may be asked for supporting information at a later date.

Risk and Reward in Business Valuations

by Kelly Deis of SoundPoint Consulting

In its simplest form, the value of a business can be boiled down to just two components: risk and reward.
Although a significant amount of thought and rigor is required to determine the value of a specific business, the underlying concept remains the same: the value of a business is equal to the economic benefit (earnings or cash flow) that it generates divided by the risk it takes to generate those benefits.
Value = Earnings (or Cash Flow)
 Risk
Think of it this way. If two companies generate the same amount of cash, which one is more attractive (valuable) to investors?
  1. a Fortune 500 company in business for 35 years with revenues locked in for the next 5 years
  2. a start-up with an untested management team, dubious business plan and volatile revenue stream
Of course, the right answer is 1).
So, while earnings are important, don’t forget to focus on risk as well. They both play an important part in the value equation.

Continue reading

Is an SBA loan right for you?

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If you’re starting or growing your small business, you should learn about loans guaranteed by the U.S. Small Business Administration (SBA) as a funding option.

If you apply for an SBA loan, your loan won’t be from the SBA, and you won’t make your payments to the agency. Instead, the SBA approves lenders to provide loans to small businesses under their loan programs. Continue reading

Myths and Facts About Grants for “For-Profit” Business

“How can I get grant money to start a for-profit business?”

This is the number one funding related question that Small Business Administration, other government agencies and financial institutions encounter from potential entrepreneurs seeking money to start a business.

The infomercials on late night television selling books or offering free seminars appear to be very convincing. I have spent hours investigating myths and facts about grants. Here are the findings:

Myths about Grants for “For-Profit” Business:

As part of the research on grants, I attended a few different seminars that were held by privately owned organizations at some of the major hotels. Continue reading

Nine Ways to Fund Your Business

by Kelly Deis of SoundPoint Consulting

If you don’t have the capital to fund your business growth, here are a few ideas. Which one is right for you?

1. Bank Loan or Line of Credit

Borrowing from the bank is probably the most traditional way of funding a business. This can take the form of a traditional loan or line of credit. Some banks may require an SBA guarantee which is a little more expensive than a bank-only loan. Others may require covenants, or conditions, within which the business must perform.

Bankers will review your historical performance and business plan in great detail. Assuming that these pass muster, the bank will require collateral in the form of inventory, equipment or even your house. In many cases they will insist on a personal guarantee.

Bank loans are debt financing requiring periodic payment of principal and interest. However, they do not require you to give up equity in your business; if your business takes off, you keep the profits (after debt repayment). Continue reading

Measure it to improve it.

by Kelly Deis of SoundPoint Consulting

As with many things in life – where we place our attention is what will change. But, if you try to focus on too many things at once, nothing gets done. The same is true for monitoring your business’ financial performance.

Monitor and focus your attention on those few key metrics that drive your business’ health through a dashboard tailored to your needs.

A good dashboard – often no more than one page, is a powerful visual of graphs and other data that provide a snapshot of the key components of your business. It monitors trends and tracks performance against goals, providing the ability to course-correct mid-year.

A customized monthly dashboard should focus on the key drivers of your business and help you quickly and easily assess the health and trajectory of your company. Here’s how: Continue reading