Author Archives: c10716230

Your Business’s Solution

As we are slowly reaching the light at the end of the tunnel,  many business owners are at the crossroads of which route to take next. Common questions: “Will we be able to recover from the financial loss?” “Will business return to some type of normalcy when we reopen?” “Will we have enough resources to resume normal business?”

Many of them already taking the approach of applying for the right funding for their business during these detrimental times with tools such as the Payroll Protection Program (PPP), and the Economic Injury Disaster Loan ( EIDL), implementing a plan on what to do next is crucial! 

Banks & Associates has already taken the approach of what every business owner needs to keep in mind when it comes to sustaining operational capability and capitalizing on potential opportunities. And we can’t stress enough the need for preparation and planning during times of such economic uncertainty. 

Here are the steps you should take moving forward:

  1. If you’ve applied for EIDL, be prepared. An SBA Case Manager will contact you.  You will need a cash flow forecast that supports your needs and SBA can understand. EIDL is being managed by SBA’s Disaster Relief Direct Lending Program – the requirements are just like applying for an SBA 7(a).  We’re happy to manage that process for you.*
  2. If your PPP has been funded, keep good records. Open a separate bank account if you have to. If your PPP has been delayed because SBA ran out of money, we can manage it for you.*  Everyone is on board with PPP because it is touted as a forgiven loan.  While that is true, there are guidelines about “how and when” you use those funds and what can and cannot be forgiven.  The final rules and guidelines about applying for forgiveness have not been completely written.  
  3. Re-think your business model and plan for the future. Much has changed in the last 6-8 weeks. What change will continue? What policy, process and procedure adjustments need to be made? How do I pay for it? What adjustments need to be made today, next month, next quarter and for future? How do I communicate the changes?
  4. Examine your capital and debt structure and match it to your business model. What are my working capital needs not satisfied by EIDL and PPP? When does my current debt mature and will I be eligible to renew? What acquisition and expansion opportunities are available because of the economic crisis?
  5. The need for strategic business planning and accountability has never been greater. It is important that your business uses tools to understand what the future direction will be and how you intend to reach your goals in the coming months. 

Change is stressful in normal times and these aren’t normal times. As a strategic advisor, we’re here to help you thrive, not just survive. With many years of experience in Strategic Planning, SBA Lending and Marketing, Banks & Associates is your business’s solution!

With a Pandemic Comes Hackers/Scammers — Protect Your Business

It’s during such times of uncertainty that leads thousands of people on the search for relief, which simultaneously leads them to increased vulnerability of becoming victims to scams and hacks online. Scammers and hackers are using every type of communication to try and deceive people and capitalize on this pandemic.

The U.S. government recently passed the $2 trillion stimulus bill that will provide many Americans relief from the effects of the COVID-19 pandemic, but it also leaves eager citizens more prone to these deceitful online scams.

The Federal Trade Commission recently released tips regarding ways to avoid being victimized by these scammers and hackers. Read tips below:

  • Ignore online offers for vaccinations and home test kits. Scammers are trying to get you to buy products that aren’t proven to treat or prevent the Coronavirus disease 2019 (COVID-19) — online or in stores. At this time, there also are no FDA-authorized home test kits for the Coronavirus. Visit the FDA to learn more. 
  • Fact-check any information that is provided to you before you share any information over text, phone, email, etc. Updated information regarding the government’s response to COVID-19 can be found on the official websites of government agencies. Be aware, no government agency will ask for any personal information. 
  • Be informed and aware of who you are purchasing items from. 
  • The details about the stimulus package from the government are still being worked out. Anyone who tells you they can get you the money now is a scammer. 
  • Don’t click on links from sources you don’t know. They could download viruses onto your computer or device. 
  • Watch for emails claiming to be from the Centers for Disease Control and Prevention (CDC) or experts saying they have information about the virus. The most up-to-date information about COVID-19 can be found at the official CDC and the World Health Organization (WHO) websites. 
  • Be aware of the numbers calling you. Neighbor spoofing is when calls are made to look local for those on the receiving end of the calls. 

Additional tips and information can be found on the FTC’s official website that will protect you from hackers and scammers and provide information on what the agency is doing to thwart these digital acts of deceit and theft.

Contact us if you need more information or have questions about protecting your important information from this dangerous threat during these unprecedented times.

Relief for Your Business During COVID-19

There’s not a business that hasn’t already been impacted or is soon to be impacted by COVID-19. With the social distancing guidelines being extended another month, many small businesses are in need of financial assistance. Banks and Associates have already taken the approach of finding solutions for all small businesses.  

The SBA Disaster Loan is one tool in the toolbox that will allow small business owners to work their way out of a detrimental problem and their ever-changing circumstances. This is a long-term 3.75% fixed rate, which will allow many owners to maintain their businesses during the tough times ahead.

The CARES Act, signed into law by President Trump last week has other provisions through the U.S. Small Business Administration. Guidelines for those programs should be in place this week. The Payment Protection Programs provide for loans for payroll from February 15 through June 30 and other related expenses and are forgiven at the end of the year when a business maintains pre-disaster levels. There’s a host of benefits available with the SBA 7(a) program that includes payment deferments, the forgiveness of the SBA guarantee fee and other features. In addition, there are EIDL advances of up to $10,000 per business after a business applies for the loan that does not have to be paid back.

One thing is certain for small businesses in these trying times – things are changing. The good news is Banks & Associates can help you cope with change well. We can cut through the complexities and help you grow your business.

Call us. We’re ready to help. 

The facts you need to know in regards to the SBA Economic Injury Disaster Loan(EIDL):

Your Local Source For SBA Disaster Loan Application Assistance

The critical key to successful funding from the SBA is submitting the application correctly and accurately. Without a partner who has diligent experience and knowledge about the SBA process, a single mistake can derail your application.

At Banks & Associates, we’ve helped small businesses with their financing needs for decades. There’s not a business that hasn’t already been impacted or will soon be impacted by COVID-19 — we can help you through this crisis.

Your Declaration of Independence

A business plan is one of those tools that may seem tedious to create but will be essential to your company’s long-term success. As business owners, we often assume we that we know where our company is going, that the unexpected will never happen, that the company will grow as its expected to. As a business owner, you may have a clear understanding of your business direction, but unless your employees, advisors, including your banker and accountant understand your objectives, you may be doomed for failure. Your business plan is the first step to ensuring that these expectations come to pass.

What is a business plan?

A business plan is guidelines for a how your business will be run. The easiest way to think of it is like a blueprint of a house or the game plan of a football team. The important aspects of the business, from financial matters to employee expectations, are laid out in a business plan. This allows for proper management of a company and ensures that the future, and any possible complications, are planned for.

A proper business plan should cover every detail of your business. Financial expectations, management structure, and sales plans are only a selection of the items that can be incorporated into a proper plan. This helps you to assess the viability of the business, what it sells, and whether the owner should look at changing how goals are accomplished. Essentially, it helps determine, and ensure, the viability of your business.

Setting up a business plan

Inside the plan should be the answers to any question a new employee, investor, or lender might ask and that business must be ready to answer. Will they be owning their physical location or renting? What will the monthly expenses be? How many employees are they looking to hire? What is their sales and distribution method? All of these questions and many others will need to be answered.

Before making any major moves the business owner should sit down with a financial advisor, a lawyer, and an expert in business planning. These people will help the owner by providing insight and knowledge that the owner may not have on their own. A financial advisor will help to create realistic goals for the firm while analyzing its cash flow and reserves projections to ensure unforeseen obstacles can be overcome. Legal specialists will help to create a corporate structure that minimizes both legal liability and taxes. In the end, the owner can expect to have a clear outline of their goals and the paths they will take in achieving them. In fact, the money spent in the planning area may be the best money spent to insure the success and long term growth of the business.

The time pressures of a small business owner are enormous. You will most likely find data transfer from the time spent with your advisory team is best placed in the hands of an advisor who can efficiently document both the narrative and financial portions of your business plan. This is especially true if your plan is being written with plans to obtain financing.

The most important thing to remember is that a business plan is not a static document. Plans should expect to change as a company grows or new obstacles arise. Having an initial plan helps to prepare for dramatic shifts, such as financial issues, loans, or if the owner decides to shut down or sell the business. Continually updating this plan ensures that it will always be able to provide relevant guidance in the moment.

Planning for your financial needs

Banks feel more comfortable loaning money to a company that has a well thought out business plan already in place, as it puts less of a risk of providing a loan. By presenting a completed plan the bank is made aware that the borrower is prepared to take responsibility, and will ensure on-time payments, with less risk of defaulting. A detailed plan also helps a bank’s analysts to understand cash flow, past financial decisions, and to see that your company is being well managed.

A business plan can also assist in attracting new investors when a business is ready to grow. Angel investors and venture capitalist may be intrigued with a pretty presentation, but they will be much more inclined to invest in a company that has a set plan laid out. In either scenario banks and investors will go over company details with a fine-toothed comb, so a well thought out and directed business plan will make the process easier.

If you don’t have a business plan in place already, you may still be able to obtain financing. In cases like this our team works closely with clients to quickly create a plan, complete with a full analysis of your finances. We tie this into a larger lending file that we then use to completely underwrite your request for SBA, USDA or other financing.

If you’d like more information on setting up a business plan, or how to best position your company for funding, our team is always here for you.

We’ve seen robust growth and a few rounds of upward pressure on interest rates. And now, interest rates seem to be dropping. Is the US economy headed for another recession? Some business observers seem to think that’s possible, but this is an election year. We’re not economists but we’ve been around long enough to know that things go in cycles and there are warning signs that make it a good idea to be prepared – just in case.

If Cash Flow is Tight

Liquidity, having cash in the bank, is important. If your company doesn’t have as much cash as you’d like there are a couple of things you can do.

If you’ve accumulated some short-term debt (does your bank loan come due this year or does it have a balloon feature?), consider restructuring it by obtaining a 10-year Small Business Administration-backed loan. That will decrease your monthly payments and increase available cash. If you have business real estate financed, your loan can be extended to a 25-year term. Many bank loan officers aren’t familiar with the nuances of this much-underused resource; that’s where the assistance of a lender service provider can help both you and the bank.

In addition, now is the time to secure a line of credit. You may not need it now, but you only are paying interest on it when you tap it. Knowing you have available cash if something unexpected occurs gives you peace of mind and a safety net.  

If Cash Flow is Good

Even if all seems well, it’s good to have a line of credit arrangements in place. Your request will be much better received when there is time to plan and evaluate the credit rather than when you may be in crisis mode.

Tighten your inventory procedures. Analyze to see where savings can be made in terms of purchasing, turnover and tracking of the items.

Diversification may also be a consideration. If you rely on a handful of major clients, a recession’s impact might be brutal if they run into problems of their own and scale back or stop their orders. Consider focusing on different industries or promote other uses for the products.

Good times are when you should focus on establishing solid collection policies by carefully managing invoices and payments. Make sure your office staff responsible for billing watches for changing payment habits, even the difference is only a few days. They should know how to diplomatically work with your customers to assure you’re still getting paid.

Watch expenses. If you need to incur the expense for purchase to make your business run more efficiently, by all means, buy it.  But if the purchase can wait, cautiously consider whether it meets your objectives and fits in your budget.

Plan and Forecast

If you haven’t formalized a long-term business plan, now is a good time to think about asking for help to turn your goals and objectives into an action plan everyone in the organization understands. Planning and budgeting are functions most small business owners don’t fully understand themselves.

They may believe planning is important, but everyday business demands and taking care of customers take precedence over these functions, and they simply don’t know how or where to start. A strategic advisor can help you build a dashboard and learn the key metrics to monitor to be well-prepared for the times ahead — good or bad.

Click here to learn more and contact us today!

What to Expect From Your 2018 Income Tax Return

As year-end approaches, everyone’s mind turns to either “What am I going to buy with that tax refund?” or “How am I going to pay what I owe?” Despite what you might hear in the media, the Tax Cut and Jobs Act has plenty for the “little guy.” What the media hasn’t warned you about is delays.

TCJA : Back to the Future

If history is any indication of what to expect this year, let’s take a look back to 1986.  The Tax Cuts and Jobs Act (TCJA) is the first major tax reform in more than 30 years. The last tax legislative revamp, the Tax Reform Act of 1986, required the IRS to make changes to 162 existing forms, develop 48 new ones, and create 13 new publications.  In addition, the IRS hired an additional 1,300 staff, increased phone capacity by 30 percent, and expanded hours and phone service to Saturdays to accommodate the 14 percent increase in call volume.

IRS Implementation

Implementing the TCJA is one of the IRS’s highest priorities.  To insure successful implementation, many of the same procedures used in 1986 will be repeated.  According to a Treasury Inspector General for Tax Administration report, the IRS will need $397 million to undertake all the activities to implement the legislation, which will include: reprogramming approximately 140 interrelated return processing systems; creating or revising approximately 450 tax forms, publications, and instructions; publishing guidance, notices and frequently asked questions (FAQ); preparing the agent workforce to help taxpayers understand the new law and how it applies to them; and providing taxpayer assistance and outreach.

Taxpayer Expectation

So what should you expect? In a word: delays. Confusion may exist about reform implementation, massive reprogramming may result in inaccurate information, and don’t expect refunds to start flowing before mid- to late February — processing times will be longer.

There’s no doubt that taxpayers will enjoy a lower tax bill this year, but planning is still necessary. For starters, the standard deduction has doubled, eliminating itemized deductions for millions. You might also have noticed at various times throughout the year your paycheck has fluctuated because of tax table adjustments, essentially giving you your “refund” throughout the year.  

Beware!  If you anticipate a refund, it may not be as much as you expect. With accurate information and knowledge, many taxpayers will be able to come out on top this tax season. Make sure one of those is you! Start by contacting us today.

5 Key Functions of a Virtual CFO

Chief financial officers are relied on by larger companies to take on, manage and control the financial aspect of the business. For smaller companies, the cost of an in-house, on-staff CFO is often prohibitive or unfeasible. This is when a virtual CFO can step in and provide assistance for a business owner to reach profit goals and focus on numerous administrative functions for a company’s financial success.

There are five major functions that an outsourced CFO generally perform to set themselves apart from the other top-tier executives: bookkeeping, information sharing, compliance issues, internal audience assistance, and serving as an important strategic advisor to the business owner.

1. Keeping Up with the Books

A virtual, outsourced CFO of a company ensures that the financial records are kept up-to-date and in good order. Many small businesses struggle with anything more sophisticated than knowing “how much money is (or isn’t) in the bank.” Going the next step, the virtual CFO assists the business owner and key employees to develop budgets and forecasts as a business scorecard.

A major expense often overlooked as routine by the business owner is risk management.  Protecting the company’s assets can be confusing and time-consuming. Having accurate records allows your company to have confidence in the financial health of the business and increase business success!

  2. Spreading Information Around

Sharing information between the virtual CFO and owner and key employees in an understandable format is critical in the decision-making process. An outsourced CFO plans meetings and leads the strategic planning process to relay key data in order for management to make successful, well-informed decisions. Examples of key data include: How is the company doing in comparison to our business plan and budget? In comparison to the competition? In comparison to last year?

3. Making Sure You Stay Compliant

No matter the size or type of company, there are always compliance issues to address: the owner’s interest, working with the company’s CPA for IRS reporting, and state and local licenses. There are a host of compliance details that wind up either being overlooked, or distracting a business owner’s focus, and oftentimes both. When dealing with compliance issues, the CFO identifies internal and external opportunities that allows growth for the shareholders and the business, collectively.

4. Managing Internal Audiences

CFOs have a role in assisting a company’s internal “customers,” such as employees and operating managers, from whom a business needs buy-in to be successful. Many CFOs focus more on the accounting and finances of a company, but in the recent years that thought process has shifted, due to the ever-evolving challenges and opportunities a company faces.

Although presenting balance sheets and cash-flow statements can be helpful in increasing financial success, an effective virtual CFO uses those tools to develop a high performing team for the company. In a small business, it’s important for everyone on the team to understand how their position contributes to the financial success of the company.

5. Delivering Strategic Guidance

Many times, a small business owner has difficulty finding people who really understand his or her business.  If their close friends work for someone else and don’t have an entrepreneurial mindset, they simply don’t understand the most basic issues a business owner faces, i.e., how am I going to make payroll this week?

Whether it’s creating a dashboard that communicates critical financial information, addressing organization structure questions, or acting as a sounding board on how to deal with a “policy” issue, the outsourced CFO has the experience and insights to help the business owner.

Every company can benefit from a virtual CFO when it comes to making strategic decisions. The financial analysis and benchmark results, provided by the CFO, allows actionable insights to be communicated to the CEOs and shareholders of the company.

 

Protect Your Information From This Dangerous Threat

There are a variety of ways cyber attacks and data breaches can happen, a common way is spear phishing. You may be surprised how many people fall for the bait of spear phishing, but with the extensive research hackers use to target a specific audience, you may never suspect you received a phishing email. The spear phisher is able to disguise themselves as a well-known and trusted entity which can cause a company’s confidential information to be obtainable, such as: Phishing concept illustration. Idea of cyber crime and fraud.

  • Customer lists
  • Passwords
  • Employee information

There are two common methods spear phishers use to be able gain access to this information. One way is for the phishers to direct email recipients to a fake or fraudulent website that has the recipients enter different credentials like passwords or account numbers.  Another way is for the phishing emails to contain links or attachments. When they are clicked malware is downloaded onto the recipient’s computer. The downloaded malware allows the phisher to gain access to sensitive data and passwords.

There are certain “give away” characteristics that can be found in the example email below.

  1. The “From:” email address.
    1. In this case, that email alias isn’t how my Office 365 account is listed.
  2. OneDrive is never referred to as OneDrive Cloud. It will only be listed as “OneDrive for Business” or “OneDrive Personal”.
  3. Microsoft doesn’t notify you about files waiting review.  That’s an internal feature if you share files within your company.
  4. “Click*” isn’t a link.
  5. There is bad grammar and odd structure throughout the email.
    1. “Goto”
    2. The hyphen in the middle of the “D”Screen Shot 2018-08-14 at 4.07.15 PM
  6. There is no Microsoft logo.
  7. There is a different color scheme in this email than what is usually used by Microsoft.

There is additional information and tips that can be found on the IRS website that can protect you from cyber attacks like spear phishing.

Contact us if you need more information or have questions about protecting your important information from this dangerous threat!

The Value of a Business Plan: Why to Have One and How to Set It Up

A business plan is one of those tools that may seem tedious to create but will be essential to your company’s long-term success. As business owners, we often assume we that we know where our company is going, that the unexpected will never happen, that the company will grow as its expected to. As a business owner, you may have a clear understanding of your business direction, but unless your employees, advisors, including your banker and accountant understand your objectives, you may be doomed for failure. Your business plan is the first step to ensuring that these expectations come to pass.

What is a business plan?

A business plan is guidelines for a how your business will be run. The easiest way to think of it is like a blueprint of a house or the game plan of a football team. The important aspects of the business, from financial matters to employee expectations, are laid out in a business plan. This allows for proper management of a company and ensures that the future, and any possible complications, are planned for.

A proper business plan should cover every detail of your business. Financial expectations, management structure, and sales plans are only a selection of the items that can be incorporated into a proper plan. This helps you to assess the viability of the business, what it sells, and whether the owner should look at changing how goals are accomplished. Essentially, it helps determine, and ensure, the viability of your business.

Setting up a business plan

Inside the plan should be the answers to any question a new employee, investor, or lender might ask and that business must be ready to answer. Will they be owning their physical location or renting? What will the monthly expenses be? How many employees are they looking to hire? What is their sales and distribution method? All of these questions and many others will need to be answered.

Before making any major moves the business owner should sit down with a financial advisor, a lawyer, and an expert in business planning. These people will help the owner by providing insight and knowledge that the owner may not have on their own. A financial advisor will help to create realistic goals for the firm while analyzing its cash flow and reserves projections to ensure unforeseen obstacles can be overcome. Legal specialists will help to create a corporate structure that minimizes both legal liability and taxes. In the end, the owner can expect to have a clear outline of their goals and the paths they will take in achieving them. In fact, the money spent in the planning area may be the best money spent to insure the success and long term growth of the business.

The time pressures of a small business owner are enormous. You will most likely find data transfer from the time spent with your advisory team is best placed in the hands of an advisor who can efficiently document both the narrative and financial portions of your business plan. This is especially true if your plan is being written with plans to obtain financing.

The most important thing to remember is that a business plan is not a static document. Plans should expect to change as a company grows or new obstacles arise. Having an initial plan helps to prepare for dramatic shifts, such as financial issues, loans, or if the owner decides to shut down or sell the business. Continually updating this plan ensures that it will always be able to provide relevant guidance in the moment.

Planning for your financial needs

Banks feel more comfortable loaning money to a company that has a well thought out business plan already in place, as it puts less of a risk of providing a loan. By presenting a completed plan the bank is made aware that the borrower is prepared to take responsibility, and will ensure on-time payments, with less risk of defaulting. A detailed plan also helps a bank’s analysts to understand cash flow, past financial decisions, and to see that your company is being well managed.

A business plan can also assist in attracting new investors when a business is ready to grow. Angel investors and venture capitalist may be intrigued with a pretty presentation, but they will be much more inclined to invest in a company that has a set plan laid out. In either scenario banks and investors will go over company details with a fine-toothed comb, so a well thought out and directed business plan will make the process easier.

If you don’t have a business plan in place already, you may still be able to obtain financing. In cases like this our team works closely with clients to quickly create a plan, complete with a full analysis of your finances. We tie this into a larger lending file that we then use to completely underwrite your request for SBA, USDA or other financing.

If you’d like more information on setting up a business plan, or how to best position your company for funding, our team is always here for you.