Category: Business Financing

Solvency vs Liquidity: What is Financial Solvency?

Solvency vs Liquidity: What is Financial Solvency?

It’s a pretty well-accepted fact that a lot of businesses don’t make it past their second birthday and the average lifespan of a small business is only 8-½ years. Understanding that, it makes a lot of sense for many small business owners to ask, “Is my business solvent?” or “What is financial solvency?” It also makes sense for a small business owner to wonder, “What’s the difference between financial solvency and liquidity?” What is Financial Solvency? A business is solvent… Read More
Restructuring Business Debt: What Are Your Options?

Restructuring Business Debt: What Are Your Options?

For many business owners, debt is a part of their everyday financial reality. According to the 2019 Small Business Credit Survey conducted by the Federal Reserve Banks, 70% of small employer firms have outstanding debt.  When you have creditors to pay, reaching your financial goals can be more difficult. And in some cases, debt can be so overwhelming that it can put your business's future at risk. Creating a plan to restructure business debt may be the solution you need. … Read More
What Is the Formula for Cost of Debt?

What Is the Formula for Cost of Debt?

When you take out a loan, your primary focus is probably on having working capital to grow your business or to steady your cash flow. But there’s something else to consider: your cost of debt. If you’re just focusing on your loan’s monthly payment and not diving in deeper to analyze the true cost you’re paying, you might be spending more than necessary on your debt. What Is Cost of Debt? In simplified terms, cost of debt (or debt cost)… Read More
Bank of America Business Checking Account Review

Bank of America Business Checking Account Review

As a business owner, it’s considered best practice for you to keep your personal and professional finances separate—even if you are doing business as a sole proprietor or independent contractor. Opening a checking account just for your business expenses is an important first step in managing your company’s finances, and will save you time and stress at tax time. What’s more, if you anticipate borrowing in the future there are many lenders who will not approve a business loan application… Read More
How to Pay Back an EIDL or PPP Loan

How to Pay Back an EIDL or PPP Loan

If your business received an Economic Injury Disaster Loan (EIDL) or Paycheck Protection Program (PPP) loan, you may have determined it isn’t a good fit for your small business for any number of reasons: You just wanted the EIDL grant and not an EIDL loan,  You didn’t understand the loan terms when you applied, You can’t use the EIDL funds or PPP funds the way you hoped You don’t think most of your PPP loan will be eligible for forgiveness,… Read More
EIDL Alert: Why You Must Read the Fine Print In Small Business Contracts

EIDL Alert: Why You Must Read the Fine Print In Small Business Contracts

On December 22, 2020 Congress passed the stimulus bill which includes new EIDL grants, new Paycheck Protection Program loans and other small business relief. Read more about that legislation and apply for a new PPP loan here. Millions of small business owners who received a loan through the Economic Injury Disaster Loan (EIDL) program were relieved to get approved for one of these low-rate loans through the Small Business Administration (SBA). But some savvy borrowers who carefully reviewed their loan… Read More