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- Business Loan FAQ
We will be answering the most frequently asked questions about business loans in this article. Starting a business can be confusing and stressful, especially when you could also use some financing. We will tell you everything you need to know about business loans and have you ready to make a decision by the end of this article. Some of the most common questions are, Are business loan payments tax deductible? Can business loan be given for personal use? How does a business loan work? What business loan do I qualify for? When to take a business loan? Where to get a business loan? Who can get a business loan? Which business loan is the best? Will a business loan affect my mortgage? Are there business loans without collateral? Are Business Loan Payments Tax Deductible? When a business loan is received by a company, it's not included as taxable income. In turn, when that loan is repaid, you are not able to deduct loan principal payments. You are simply paying back the money you borrowed, not the income spent. However, you can deduct your interest as a business expense if you meet certain qualifications. You must be legally liable for the loan, you and the lender must agree that you intend to pay off the debt, and you and the lender must have a true debtor-creditor, or lender-borrower, relationship. Basically, it must be a loan from a legitimate lender and you should meet the requirements. A loan your friend gave you and you paid back would not be eligible to write off as a business expense. Can Business Loans Be Given For Personal Use? Business loans are different from personal loans, you must have an operating business to qualify for a business loan and a personal loan is mostly based off of your credit history. Most business loans can only be used for the business, and if you are planning on using a business loan for personal reasons you may want to just pursue a personal loan instead. With that being said, there are unsecured business loans. These programs have no restriction as to what you can use the money for and it is up to the owners discretion. These programs are typically advances on your business' future receivables like an MCA or factoring deal. How Does a Business Loan Work? There are many types of business loans, and for the outline of the most popular programs you can read our article "The Different Types of Small Business Loans". Generally speaking the process of getting a business loan is fairly simple. You apply with a lender of your choice either in person or online. After that the lender will underwrite your file and get back to you with terms for financing. Business loans work differently from personal loans and may require proof of ownership and business bank statements to prove the revenue of the business. Other documents necessary may include, a Tax Return, Voided Check, Drivers License, or a P&L/Balance Sheet. Payments may also be different from a personal loan. Monthly payment options are most commonly available for term loans or large corporations. Weekly and daily payments are also common payment frequencies for a business loan. The more frequent payments are meant to help the business with cash flow and avoid a large bill at the end of the month. What Business Loan Do I Qualify For? There are many ways to qualify for a business loan, but generally speaking business that have been in business over 1 year and that are doing over $10,000 in monthly revenue (revenue is calculated before expenses) have the best chances of being approved. You can get an approval without those requirements in specific situations like if your business is new but you have high revenue and a large account receivable. You cann apply with us and we will give you a free no obligation look at your business and let you know where you stand. Click Here to get started. When To Take a Business Loan? Most people assume business loans are only for struggling businesses. This is not true. Business loans can be used to grow your company quickly or for expansions that would not be possible while dealing with operating costs. Let's say you're looking to expand your business to a new location. In the beginning the first store would have to make enough to support the staff and rent/mortgage of the new store for a couple of weeks until it started to turn a profit. This is a risky move for a business owner. Not only do you risk the failure of the new location but your original one may suffer as well. Business financing can get your business the capital it needs to make a move like this and mitigate the risks involved. The best time to take a business loan is when you see growth in your business but a lack of capital is stopping you from expanding beyond your current capacity. In these situations a business loan can exponentially speed up the growth of your company and help you increase your profits. Where to Get a Business Loan? You used to have to go to the bank with a stack of paperwork and a couple of hours to spare to apply for a business loan. Thanks to the internet this is no longer the case. You can apply for a business loan online with most lenders including Trust Capital Funding. A simple application and your most recent business bank statements is enough for most lenders to underwrite your file and come back with a decision. Click Here to get started now. Who Can Get a Business Loan? A Business owner is allowed to get a loan on behalf of their business. Generally speaking you must have at least majority ownership or you may need the approval or your partners. The business should not have any liens or past defaults with other lenders. A business owner that filed for bankruptcy recently or has felonies on their record, may have a hard time securing a business loan. Will a Business Loan Affect My Mortgage? Business loans with a personal guarantee will affect your personal credit profile. This can be a problem if you're looking to get a mortgage or refinance an existing one. Talk with your representative and ask if the program you're looking for has a personal guarantee or not. Unsecured loans will not be reflected on your credit profile, but at the time of funding a lender may pull your credit history resulting with a hard inquiry on your credit and lowering your score. Keep this in mind when applying for a business loan and let your representative know you're also shopping for a mortgage so they won't do any pulls on your credit and conflict with your home buying process. Are There Business Loans Without Collateral? Business loans without collateral exist. This generally comes in the form of a cash advance. Another term for this type of loan is unsecured working capital. These programs have no restrictions on the use of the capital and typically come without a personal guarantee. Talk to a representative at Trust Capital Funding today for more information on our loans without collateral.
- Are SBA Loan Payments Taxable?
SBA Loans have helped a lot of businesses, especially in the last couple of years. While funding can help any business, after getting an SBA loan there are a lot of questions. This article will be focusing on the question, are SBA loan payments taxable? The answer is not so simple, While your payments paying back the loan are not eligible for a write off the interest and any fees associated with the SBA loan are. The subsidy received for the SBA loan is not taxable income, so no need to report is as such on your taxes. However any fees or interest paid to a lender or the SBA is an expense and is eligible to be reported as such. Are Business Loan Payments Tax Detectable? Many Business loans have the benefit of being able to write off the interest and fees associated with the loan because it is a business expense. If you borrow $10,000 with a 5% interest rate Your payback would be $10,500, $500 of which would be eligible for a write off because it was a cost associated with the loan. Hopefully this article helped you figure out your tax responsibility with a SBA loan and cleared up any confusion. Don't have a SBA loan but are Looking to get one? Trust Capital Funding is an SBA approved lender and we have multiple SBA programs available. Contact us or Apply Now and one of our representatives will go over your options and answer any questions you may have.
- The Different Types of Small Business Loans
Financing for small businesses comes in lots of forms. The alternatives you have available are as unique as your business, so it’s crucial that you understand what’s available and what works best for your cash flow. With so many options it can get confusing, let us explain the differences in detail to help you better understand what is available for you. SBA 7(a) Loans The 7(a) is the SBA’s most widely used loan program. While the loan is in part guaranteed by the Small Business Administration, the financing is brought through an approved SBA lender. This way, you may borrow anywhere between $20,000 and $5,000,000 for up to a 10 year term. The SBA’s 7(a) loan program is appealing to many small business owners for its below-market interest rate. If you apply via Trust Capital's network of lenders, you’ll see that the interest rate is currently set at Prime + 3.75% (currently 6.25%). Payments are made month-to-month and you won’t face any fees for early repayment. Your business must have an operating history of at the least 3 years to qualify. Use the proceeds for working capital, refinancing debt, making important purchases, and more. There are also different types of SBA programs available, apply for an SBA loan via Trust Capital today and let us show you your options. Term Loans Term loans are one of the most popular kinds of small business loans. If you’ve ever taken out a mortgage or financed a car, then you’re probably familiar with the mechanics of a term loan. Term loans are delivered through a lump-sum of capital from a lender and paid off in constant installments on an agreed upon schedule until you pay back the principal plus any interest. Repayment periods can range from short terms (twelve months or less), medium terms (1 -three years) and lengthy terms (three+ years). Term loans are commonly secured through a lien to your business assets (a right for the lender to seize those assets if you default on the loan) and might require a personal guarantee, this means that your personal assets can be liable in case your business defaults on the loan. One of the perks of a term loan is that the rate, which might be either constant or variable, has a tendency to be competitive and lower than different types of small business financing. This is especially true when you don't forget that you will be repaying the loan over multiple years. Business owners have flexibility with regards to how they could use the funds. For instance, one could use a small business time period loan to expand to a new location, fill up inventory, or get new employees. Merchant Cash Advance A merchant cash advance (MCA) is not a loan. It is a purchase of your future receivables or sales. It is a financing option that allows quick and easy funding by utilizing your business' future sales. Merchant cash advances can have funding amounts as high as Five million dollars, making them an excellent alternative to standard business loans. Even better, they’re much more accessible and have higher approval rates than different kinds of financing. Merchant cash advances for startups and newer businesses are a feasible solution when looking for funding. They provide access to fast, flexible financing with out fixed-month-to-month payments. Instead, you’ll pay back your loan through a small percent of your future sales. This setup allows you to obtain cash right away to put toward any new opportunity or business expense. Merchant cash advances are perfect when you want funds now and don’t want to undergo the hurdles of applying for more conventional kinds of financing - including business loans or SBA programs. Line of Credit A business line of credit offers you access to cash every time you need it and is very flexible financing option. This sort of loan permits you to draw cash out of your credit limit as you want it, and only pay interest on what you use. With revolving lines of credit, more money becomes available as you pay it down. Unlike selling equity, getting a small business loan allows you to keep business ownership, profits and complete control. Business lines of credit are the best financing tool while your business is in scaling and you need access to funds. You also can use it to bridge cash flow gaps through seasonal slumps, or as a emergency fund. There are no regulations on how you can use it—you may use a business line of credit to cover any expenses or opportunities you face. Invoice Factoring Invoice factoring is more like an MCA than a business loan. Invoice Factoring works through selling your future account's receivables to an invoice factoring company at a reduced rate in exchange for 2 lump-sum payments. The first payment is the advance - an upfront charge of 70-90% of the factored invoices, and the second payment is for the remaining balance, as soon as your clients pay the invoices in full. The first lump-sum via Trust Capital's network is between 85-90%. Invoice factoring is great for companies that want to cover inventory expenses or other expenses but have delayed payment plans with their clients. The benefit of invoice factoring is that your account receivables are quickly turned into capital instead of having to wait for your clients to pay. Will I Qualify For Financing? Many small business owners often don’t believe they have a good enough credit score to receive financing, but you shouldn’t give up just because traditional banks have rejected you. Every lender has their own guidelines and looks at qualifying factors differently, so you have a good chance of being approved even if you’ve been rejected in the past. There are options that do not rely on your credit score but instead the revenue coming into your business to qualify (MCA). You can also use collateral to get better rates and approvals without having your credit effect your offer. Every client at Trust Capital gets a dedicated loan specialist to explain your options and help you find the best option for you and your business. Apply with Trust Capital today and let us show you what your options are, there is no effect to your credit score and no obligation on your end.
- Trust Capital | Business Financing Application
APPLICATION FOR BUSINESS FINANCING We are Direct Lenders, give us the opportunity to beat any competitors offer. Stop Dealing with Brokers! Best Approval Rates With Clients Doing Over $10,000 in Monthly Revenue and Over 1 Year in Business GET FUNDS IN AS LITTLE AS 24 HOURS! Get a Quote in minutes. Won't impact your credit score!
- Programs | Trust Capital
FUNDING PROGRAMS We offer flexible custom financing to fit your specific needs. REVENUE BASED FINANCING Trust Capital offers funding solutions based on your company's revenues - not your personal credit. Trust Capital can fund you up to 150% or more of your monthly volume. It is cash in the business owner's pocket. The money can be wired as fast as 24 hours after all required documents are received. An agreed upon percentage is taken from your sales in order to repay the funded amount. Note: there are other innovative repayment structures designed to alleviate the stress of a fixed monthly payment. The purpose of structuring the financing this way is to ease the pressures of a bank looking over your shoulder demanding a check each month, no matter how well you do. With Trust Capital, you repay based off your returns. When sales are high, you pay back a little more, if business is slow, you pay back a little less. APPLY NOW MERCHANT PROCESSING Trust Capital Funding is the premiere company for all of your processing needs. We work with many credit card processing companies. This allows us to place our clients with a company that will best fit their needs. Trust Capital only affiliates itself with the top ten processors in the country. Using multiple companies allows us to provide your business with the best rates and necessary functionality for bankcard processing, electronic check services, multiple POS systems, as well as business management solutions. Trust Capital Advantages Guaranteed ability to beat all pricing Next day funding (most of our competitors use 48-72 hours) Real time access to your transaction history Multilingual Customer Services Representatives Ability to finance credit card receivables Flawless credit card processing for internet based, e-commerce sites and high ticket priced industries Versatile enough to be used with Global Payment Systems, First Data and many other back-end processors APPLY NOW Taxes EMPLOYEE RETENTION CREDIT (E.R.C. TAX CREDIT) FREEDOM FLEX FINANCING Freedom flex funding is Trust Capital's version of a business line of credit. With these funds we allow our qualified clients to come back for additional funding before the existing balance is paid off. Today's market allows for a unique opportunity for our clients to have more money available so they can prosper within their industry. The only interest owed is on money borrowed. The purpose of this is to make sure we are not over leveraging our clients with a burden of the maximum amount of money available. APPLY NOW FRANCHISE FUNDING Today's average start up cost of a Franchise can range from $40,000.00 to several million. Trust Capital Funding has worked with many franchises in the past and understands the difficulty of securing money quickly. With our flexible terms and vast experience we are generally able to sync our terms with whichever franchise agreement you are pursuing. Taking on another location? We can help! In today's economy, why used your money when you can use someone else's? Trust Capital and its' affiliates are extremely innovative when it comes to acquiring additional locations. You can have your current location revenues pay for additional locations. Each Franchise agreement is different. We would like to hear from you to discuss in more detail the specifics of what our clients are looking for. Please give us a call at 1-800-LENDER-1. Some Franchises Funded: APPLY NOW TRADITIONAL BANKING PRODUCTS These banking products are based on your total gross revenues. Funds are not secured through personal assets but on the corporation itself. It is a fixed payment structure. Note: TCF is not a tax attorney or legal firm. Hence, customers should check with their legal counsel for tax deduction information. CONTACT US COMMERCIAL REAL ESTATE Multi-Family: Refinance Multi-Family: Acquisition Multi-Family: New Construction New Construction/Sub Rehab Mobile Home Parks New Construction/Sub Rehab Nursing and ALFs: Acquisition Nursing and ALFs New Construction/Sub Rehab NON Profit 202 Refinance This major policy change allows Section 202 communities to refinance debt at today's low rates and use the savings to improve facilities and enhance the living experience for residents. TRUST MORTGAGE is a national HUD lender and is an industry leader of the 202 refinance process. 90% Loan-to-value, no cash out 35 Year amortization 35 Year Term (no balloon) No maximum loan amount Low, fixed interest rate, based on market spreads over the Ten-Year Treasury Yield Negotiable pre-payment terms* 1:18 Minimum Debt Service Coverage Third-party expenses and loan costs are financeable Net Operating Income and valuation may utilize Section 8 Contract rents. Rates and Terms determined by LTV, property type and other conditions. This is limited information and meant for general reference purposes. For detailed information or a specific quote on a project, contact Trust Capital Funding at 617-795-2100. CONTACT US The Employee Retention Credit is a refundable tax credit issued by the government to encourage employers to keep their employees on payroll. Most businesses qualify if they employed five or more W-2 employees during the covid-19 pandemic. APPLY NOW
- ERC Tax Credit | Trust Capital
What Is Required to Receive an ERC Tax Credit? The ERC Tax Credit Program may seem complicated and that's why we're here to help. The article below outlines everything you need to know about the ERC Program including how much you may qualify for and the requirements to receive credits. There Are Two Different ERC Programs, Each With Their Own Rules. ERC Qualifications for 2020 Employers are eligible to claim the ERC for the calendar year 2020 if they operated a trade or business during the calendar year and experienced either: A full or partial suspension of the operation of their trade or business during any calendar quarter on account of a governmental order limiting commerce, travel or group meetings due to COVID-19; or A significant decline in gross receipts by more than 50% when compared to the same quarter in the prior year. The maximum amount of qualified wages taken into account with respect to each employee for all calendar quarters is $10,000, and the maximum credit for an employer who qualifies for the ERC is 50% of the first $10,000 in qualified wages, i.e., up to $5,000 per employee. For an employer who on average had more than 100 full-time employees in 2019, qualified wages are generally those wages paid to employees not providing services because operations were fully or partially suspended or due to the decline in gross receipts. For an employer who on average had 100 or fewer full-time employees in 2019, qualified wages are generally those wages paid to all employees during a period that operations were fully or partially suspended or during the quarter that the employer had a decline in gross receipts, regardless of whether the employees are providing services. For both large and small employers, “wages” are defined as taxable wages including certain contributions to health benefit plans. ERC Eligibility for 2021 Effective January 1, 2021, employers are eligible to claim the ERC if they operated a trade or business during 2021, and experienced either: A full or partial suspension of the operation of their trade or business during a calendar quarter on account of a governmental order limiting commerce, travel or group meetings due to COVID-19; or A decline in gross receipts in the first, second or third calendar quarter in 2021 where the gross receipts of that calendar quarter are less than 80% of the gross receipts in the same calendar quarter in 2019. For the calendar year 2021, eligible employers can claim a credit of up to 70% of qualified wages paid to employees after December 31, 2020, and before October 1, 2021. For 2021, the credit is equal to 70% of the first $10,000 in qualified wages per quarter, i.e. up to $7,000 per employee per quarter. As a result, an employer who qualifies for the ERC can get a maximum credit of $7,000 per quarter per employee, a total of $21,000 for 2021. Tomorrow's Tax Credit Today. ERC Tax credits are taking up to 9 months to be funded. Don't wait, we can get you funding Today! First Name Last Name Email Phone Number Of Employees arrow&v Years in Business arrow&v Submit Thanks for submitting!We will be contacting you soon. What is the ERC Tax Credit? View Citations -Tamaddon, Stenson. “What Is the Employee Retention Credit?” Stenson Tamaddon, https://stentam.com/what-is-erc/. -Experian "ERC eligibility: Who qualifies for ERC?" https://www.experian.com/blogs/employer-services/who-qualifies-for-the-erc-tax-credit