How to get a business loan

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If you’ve got a small business or a start-up and you’re new to the world of business finance, it can be a little overwhelming. You need an injection of funds in order to grow your business, but where do you look for a loan? It can be very difficult for small businesses with no accounts and no track record to get an affordable loan, unless they know where to look and how to go about it.

Here are the basic steps you need to follow to find the right loan provider, apply and get your loan approved:

Step 1: Work out exactly what you want, and what you can afford to repay

Before you even attempt to shop around or apply for business loans, you need to crunch the numbers and perhaps sit down with a financial adviser to pin down exactly what you need. Consider all of your costs to see how much money you actually need for your plans, and then turn to terms. How much can you afford to pay back each month and how many years will you need in order to repay in full? Will you want the opportunity to repay early, and will you be happy with a fixed or a variable rate?

Step 2: Make sure your business plan is rock solid

The key to success in business loan applications is often the strength of the business plan. The lender will want to see a plan that is thorough, comprehensive and realistic, with plans for failure as well as success and plenty of facts to back up ideas and forecasts.

Step 3: Run a credit check

It is absolutely crucial to know your business credit rating before applying for a loan, as this is something lenders will definitely want to see. Many companies offer free checking services, and if you don’t yet have a business credit score then you should make sure your personal rating is as high as possible.

Step 4: Shop around

Armed with your exact requirements and all you need to apply, you can now start to scour the market for the best deals. You can find all the information you need quite quickly online, with comparison services being particularly helpful. Look for the cheapest rates, the terms that suit you and also consider your chances of being accepted.

Step 5: Prepare your application and practice your pitch

Whether you need to persuade the lender on paper or in person, it’s important to prepare your application carefully. Detail how every penny will be spent, make sure you have all the facts and figures at your disposal and crucially – always be on time if you have an appointment at the bank.

Step 6: Consider negotiating

If you’ve been offered a loan, congratulations. However, if the terms or the rate don’t quite suit you, don’t be afraid to ask the bank to consider a different offer. If you can provide a knowledgeable, fact-backed challenge, you never know – you may end up negotiating a better deal.

Interest rate fall softens the blow of rising prices

The cost of borrowing is important to us all. While the physical price of a big ticket item is important, it doesn’t reflect what many of us actually has to pay for it.

Take the cost of a car, for example. The average price paid for a motor in the UK is said to be £21,164. Not many of us has that sort of cash lying around – or indeed the money needed to buy a more modest model either.

Most of us would need to pop some numbers into a loan calculator and work out what that would end up costing by the time we’ve paid it back.

That’s why the interest rate is important. Data from the last few decades shows how much this has fallen. In 1975, the Bank of England base rate was 11.25%. By 1995 that had almost halved and by 2015 is had fallen to 0.5%. It now sits at just 0.25%.

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These numbers don’t reflect the cost we actually pay when borrowing, but they are closely linked to the offers we can get.

So, while the cost of everything might have gone up over the past 40 years – at least we don’t have to pay more for the privilege of loaning money from a bank. It might be a fairly small silver lining, but while the cost of a car is 11.5 times more than it was in 1975, houses 18 times more and even a pint of beer 20 times the price of ’75, it’s a much needed positive.

Experts also reckon the cost of borrowing should stay low for a while yet, with the Bank of England rate tipped to be below 0.5% until 2021.

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Entrepreneurs That Started Successful Companies You Wish You’d Invested In

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An IPO; Initial Public Offering refers to when a company that is private, sells its stock for the first time to the public. This is normally a way to raise market-awareness and capital by small companies even though it’s a method also employed by large companies that seek to be publicly traded.

Large companies that are today publicly traded were private companies at some point I time and they chose to make the leap into been publicly traded. There are companies out there that most people wish they had taken time to look into and invest in as it would have been the investment of a lifetime.

Below is a list of three companies that were once private but had their stocks go up tremendously the moment they were publicly traded having many people wishing they could go back in time and invest in them early.

  • Chipotle Mexican Grill Inc.

In the year 2006, Chipotle Mexican Grill also known as CMG was launched as an IPO on the NYSE: New York Stock Exchange. At this time, its shares were priced at $22 for one share. On the first day of its stock been traded, share prices hit double figures so that by closing, the cost of its shares was $44 per one share. The company’s highest price of all was in 2015 during summer when it hit $742.23. This was before the company’s earnings, share price and revenues were dropped by issues of food safety.

Today, CMG trades for about $400 per one share. What began as a small establishment in Colorado by Steve Ells turned into a giant in the field of business as it brought in freshness in the burrito business, making it one of the companies that one would’ve wish they had invested in a few years ago. In 2015, Chipotle was in more than 2000 locations with a staff base of more than 45,000 people and a net income of about $475 million.

  • Starbucks Corporation

Starbucks was founded in the year 1971 in Seattle, Washington by three partners; an English teacher: Jerry Baldwin, a writer: Gordon Bowker and a history teacher: Zev Siegl.

In the year 1992, it went public. At first, its shares were going for $17 per share. Going by stock splits it would mean that the initial share price would’ve been about $0.27 per share. If one would have been able to get to purchasing 100 shares when the company began publicly trading, it would mean that that investment would be worth $370, 175 today. This figure is excluding dividends, which as of 2010 the company has been paying.

In the coffee industry, we can term Starbucks as being a household name. It would be difficult not to notice one of its outlets in the big cities. Every year the company continues to expand and open up thousands of new outlets. Its plan is to expand to about 30,000 outlets on the global scale. The company will continue expanding what it offers to its clientele. This means, only more success awaits it.

  • Amazon.com Inc.

In the last handful of years, Amazon.com Inc. has proved itself to be in the list of the hottest stocks. However, this was not always the case. In the year 1997, the company made its debut for a price of $18 per one share on the NASDAQ. For those who were able to buy about 100 shares of the company’s initial price on the trading day, I guarantee that they are just about the happiest investors out there. The company’s stock split three separate times which means, the 100 shares bought wouldstartup-1685533_640 be just about 1,200 shares. This means that an initial investment of $1,800 from the 100 shares bought would be worth a mind blowing $897, 852.

Despite some setbacks here and there, Amazon stocks have been one of the best performing showing no signs of slowing down per say. The company is growing its cloud businesses and ecommerce everyday which means improved profits and revenues thus these good returns don’t seem to be ceasing any time soon.

Bottom Line

There are a number of financial derivatives dealers who offer online trading to investors across world markets. Dealers such as CMC Markets analyze stock markets and help investors buy and sell profitable stocks though at the end of the day, the decision is yours as an investor

Every year, companies continue launching IPO’s and investors are ever seeking out the next Chipotle, Starbucks or Amazon in their respective industries. The above companies continue to perform very well as they expand their business which means they are still viable investment options.

Is Your Blog a Business? A Beginner’s Guide To Tax

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Being able to earn income from your hobby is the ultimate dream for most people, and in the case of blogging it’s something that many of us are now making happen. Companies have caught onto how influential bloggers can be and how promotion and endorsement from them can hugely boost their business, and are happy to pay for the privilege. But the line between hobby and business can often become blurred, you probably started your blog with no profit motive but over time it’s grown and expanded and you’re now being offered work on a regular basis. According to the IRS, if you work as a blogger it means you run your own business and it’s covered by the same tax laws that apply to most other jobs. Any money you make from your hobby must be reported as income, and according to the Internal Revenue Code all income is taxable unless it is specifically exempted. This is where things get complicated- as it could mean that even if you’re not breaking even, any money you gain from your blog has to be included when it comes to filing your tax.

Is My Blog a Hobby Or Business?

The very first thing to decipher is whether your blog is actually a business, or classified as a hobby. This is a bit of a grey area, the IRS state that you must be actively engaged in trying to make a profit. If you’ve made a profit for three out of the last five years (even if the profits were small), then you’re likely to be considered as running a business. Not only is it important to know whether you are classed as a business or hobby for the purposes of paying the right tax, but as a business you can claim any business losses on your tax return. You are permitted to deduct any reasonable and necessary expenses in regards to your profession. A variety of things from office furniture, electronics, utility bills, insurance or anything else that directly relate to your business can be included, and the expenses can be deductable from the income you earn as a blogger.

Self Employment Tax For Bloggers

Self-employment tax is a social security and Medicare tax mainly for people who work for themselves. It provides you with a host of benefits including retirement, disability, survivor and hospital insurance benefits. You will usually pay self employment tax once your net earnings from blogging exceed four hundred dollars. It’s important to be aware that even if you only work a blogger on a part time basis (and work full time somewhere else where you earn a salary) the blogging part of your income WILL still qualify as self-employment income. This of course means you must pay self-employment tax on that income, and must be paid regardless of whether you owe any federal income tax. If you didn’t pay enough tax throughout the year (either through withholding or by making estimated tax payments) there is a chance you will have to pay a penalty. If you run into any problems or legal tax issues as a result of your blogging business, it’s important to contact a specialist in the field such as MCC4Tax who will be able to make sure everything is put right.

Estimated Tax For Bloggers

As a blogger you are likely to face estimated taxes, which is something that most employees in the traditional sense do not have to worry about. You will be paying quarterly estimated taxes to the IRS, as you don’t have an employer who withholds taxes for you. As a sole proprietor, someone who is in business for yourself, you will generally have to make estimated tax payments if you expect to owe tax of one thousand dollars or more when your return is filed. Estimated tax is used to pay towards income tax, as well as self-employment tax and alternative minimum tax.

Women in Technology – is FinTech the route ?

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The UK FinTech sector alone generates £20 billion revenues annually, and the growth opportunities are global. Last year, the UK generated £534m of FinTech investment, making it the third- largest region by capital investment.

Fintech comprises a wide range of activities, from mobile payments and crowd-funding platforms to virtual currencies. What makes Fintech so exciting is the idea that innovation can help create more sustainable financial services sector and deliver better services to customers.

Unfortunately, there is a gender imbalance in FinTech, with only one female CEO in the top 50 EU FinTech companies. The issue needs to be addressed to avoid following similar patterns to that of traditional finance and technology industries, two notoriously male-dominated industries.

Opportunities for women entering FinTech

Women control $20 trillion of global household spending and 70% of consumers are female. So without the input of women in the FinTech sector, the needs of all potential users will not be met.

Multiple studies, including the World Economic Forum’s, reinforce this reality. Gender balanced teams excel in comparison to male dominated teams with respect to experimentation, creativity, knowledge sharing and the completion of tasks.

This sort of diversity fuels creativity, which in turn sparks innovation, showing more women in FinTech can only benefit the sector.

Why aren’t there more women in FinTech?

Fintech is a fairly young sector so there is plenty of time for women to get into the sector and become involved with its evolution:

One of the key issues at the moment is a lack of mentoring. There needs to be an increase in women to the FinTech industry to encourage and inspire more young girls to do the same. With a lack of females in FinTech at the moment, there is simply not enough mentoring to go round.

In addition to the lack of mentoring, there is also a lack of IT skills.  The recently updated IT curriculum should hopefully address this, making the subject more current and relevant. Therefore, this will encourage more girls to consider a career in IT in the future.

Flexible working hours also has a lot to do with it, and bringing women back into the industry after they have children is really important. Many women choose not to enter the technological sector for fear of having to choose between children and career, but this is a misconception and we need to encourage more women to return to their careers.

CEO of Yahoo, Marissa Mayer is a perfect role model for women who want to manage their balanced work life with being a mother. We need more women in every level of business to show that working hard and also having children can be accomplished.

By highlighting the challenges women face entering the FinTech industry we must initiate a cultural and social shift. Creating a more favourable government policy and celebrating women leadership in this sector can achieve this and can create a level playing field for women in technology.

If you’re thinking about making the move into the FinTech field, speaking to an expert in technology careers, such as Laudale to see if it’s the right career move for you.