How to Manage Your Small Business Finances

How to Manage Your Small Business Finances

Are you planning to start a new business or expand your current one? Running a successful business requires one to have the right expertise in providing services or making products. One of the areas you should focus on is managing your business finances. Here are essential financial habits that can enhance your business’s success.  

Investing in Growth

Apart from meeting daily routines, it is crucial for business owners to focus on the future. This entails setting aside business finances for various growth opportunities that may arise and moving your small business in a stable financial direction. Growth helps a business attract the right stakeholders and focus on innovation, enabling it to compete healthily with others. Moreover, customers usually appreciate high service levels, while employees prefer businesses that invest in their careers.

Maintaining a Good Credit Score

As your business develops, you may need or want to buy additional properties, take more loans to finance your projects, or purchase additional insurance policies. A bad business credit score may affect the approval of these acquisitions and transactions.

One of the ways of maintaining good credit is paying for your debt funding on time. For instance, you should not allow your business’s credit cards to run a balance for weeks. You should also avoid applying for loans with high-interest rates.

Implementing a Good Billing Strategy

As a business owner, you may encounter clients who don’t pay their invoices on time. You should ensure your business has enough cash flow to meet its daily expenses to avoid delays and inconveniencing others. If you are facing billing issues, consider implementing a creative approach. For instance, you may introduce discounts for customers who pay their bills on time.

Monitoring Your Books

Although this may seem like an obvious practice, it is key to your business’s success. Whether you work with a bookkeeper or not, consider setting aside time to check and monitor your books. This enables you to familiarize yourself with your business finances, which may help you detect potential financial crimes.

Seeking financing is an effective way of enhancing your business’s success. Financial institutions can provide guidance and funding to help you meet your goal. At Abundant Wealth Financing, we offer exceptional financial solutions to our clients. Reach out to us today for more information.

10 Steps to Starting a Small Business Successfully

10 Steps to Starting a Small Business Successfully

Starting and managing a business can be tough. You need skills, expertise, and proper guidance to achieve your objectives. For first-timers, these steps are helpful to start a small business successfully.

Learn More About the Business

Having a business idea is not enough. Research your idea and learn how your small business will serve your target audience, the demographics, the products and services, market trends, and competition.

Write Your Business Plan

You need a roadmap to structure your small business and make significant progress in the market. A business plan is a map and guidance to meet your objective. This is also the foundation for a successful business.

Find a Business Location

As you research your business idea, be keen on the location. Setting your small business in an ideal location is crucial to success. Consider other businesses and competition before deciding on the location.

Secure Funds

Your working capital decides how stable your business will look in the long run. It is crucial to find means to sustain your business’s cash flow. The availability of conventional and alternative financial institutions should help you secure funds for your small business.

Create a Budget

Making costly financial mistakes is easy when setting up a small business without a budget. A budget helps you know your priorities and spend objectively as your business grows.

Choose a Business Structure

The amount of tax you will pay, daily operations, and the risk you will manage gets determined by the business structure you settle for. Seek expert help to learn the relevance of a business structure before choosing and applying one.

Choose a Business Name and Brand

Every small business needs a name and a brand to attract customers. Choosing a unique and relative business name and brand is crucial in this case. You easily attract customers and retain a good reputation with the right business name.

Register Your Business

Running a legitimate business is crucial. Ensure you handle the many legal issues by working with business lawyers and other professionals. You easily grow as a small business after registration.

Look for Business Insurance

You need business insurance to protect your assets and employees. Find a reputable insurer and buy policies to cover your small business properly.

Hire the Right Staff

Every startup business needs skilled and experienced staff to grow. You avoid mistakes and find it easy to navigate your small business with the right staff.

Starting a small business can be hectic without proper guidance. At Abundant Wealth Financing, we help you achieve success through reflective guidance. Contact us today.

Small Business Tips for Entrepreneurs

Small Business Tips for Entrepreneurs

Starting a small business and reaping from its success are two different things. For some entrepreneurs, the legal go-ahead to sell goods and services feels outstanding. However, that’s not all. You must have the strict business sense to keep your small venture growing daily. Keep reading the following tips to navigate your business for more benefits.

Hire Professionals When Necessary

The personnel you staff your small business with will inevitably determine its growth directly and indirectly. Qualified workers, for instance, will deliver excellent results, treat customers passionately, and stay up with the trends since they have the necessary business soft skills and vice versa. Therefore, consider a well-structured recruiting strategy to hire professionals to fill the available job openings.

Engage Your Customers

The primary goal is to meet your customers’ needs in time and as they wish. Customer relationship management forms the backbone of maintaining the existing ones and attracting new prospects. Therefore, learn to take time to understand what your clients require, how often they make purchases, and what they’re likely to buy next. Once you have this information, tailor and match your goods or services to the fast-changing customers’ specifications.

Build a Unique Brand

In an already-flooded industry, it’d be unwise for small business owners to reproduce the duplicate of existing products into the market. The rule of thumb is to identify a market gap and channel all your energy and resources to fill it. Further, build a distinctive brand that’s uniquely identifiable and easy to pick from other substitutes. And the only way to attain this is by delivering unmatched quality products to your customers.

Utilize Social Media

These days, it’s easy to reach your customers and promote your new products with just a click. It’s also a way to improve convenience and timeliness on your and buyers’ sides. Hence, create a solid online presence, create a referral program, use e-payment plans, reply to interested customers, and give feedback on time; the list is endless.

Success is every small business entrepreneur’s dream, regardless of size and niche. And, since its accomplishment calls for finances, keep the lack of it far away from drawing you back from achieving your goals. Abundant Wealth Financing has your back! Contact us today and experience more about the available funding options. You’ll be happy you did!

Finance Options for Business Growth

Finance Options for Business Growth

he process of obtaining a small business loan is a complicated one. However, military veterans have access to special programs through the United States SBA. Before you decide to pursue funding to grow your small business, it’s important to understand your options and the requirements for qualification.

VA Small Business Loan Explained

As a former member interested in starting a business, you are going to need some business funding. While you may be able to obtain funding through a traditional lender, you also have access to VA small business loans through the SBA. The Department of Veteran’s Affairs has nothing to do with these small business loans.

Just like traditional funding, these loans are provided by a lending partner and require repayment with interest. The difference is the SBA works with lenders to establish guidelines to reduce risk to the lender. This typically means lower interest rates and longer terms.

Types of VA Small Business Loans

There are several options available for veterans who are interested in a small business loan, including:

  • Standard 7(a) loans
  • Military Reservist Economic Injury Disaster Loans
  • Micro-loans
Qualifications for VA Business Loans

The qualification requirements vary based on the loan type, personal credit score of the applicant, and other factors. The basic requirements for the 7(a) loan program are:

  • Business exists for profit
  • Engaged in/propose to do business in the United States or it’s territories
  • Business owners have invested equity
  • Other alternatives have been exhausted
Other Financing Options for Veteran Business Owners

If the above options do not match your needs, there are other programs available for veteran business owners, including:

  • Street Shares
  • Service-Disabled Veteran-Owned Small Business Program
  • Hivers & Strivers
Resources for Veteran Business Owners

If you plan to establish your own business, there are several resources available to help, including the following:

  • National Veteran-Owned Business Association
  • Regional Business Associations
  • Veterans Business Outreach Centers
  • American Corporate Sponsors
  • Entrepreneurship Bootcamps
Do You Need Finance Options for Business Growth

If you are a United States military veteran interested in starting or growing your small business, you have options. Contact Abundant Wealth Financial to learn more about these options and more.

A Guide to Business Acquisition Financing

A Guide to Business Acquisition Financing

If you are a business owner who is pursuing an acquisition, there are certain things that you need to keep in mind, including:

  • Growth opportunity offered by the target company
  • Purchase price
  • Financing terms

If these things do not align, there’s a chance that the acquisition will fail. One of the most common mistakes is to focus on the purchase price without considering the present and future growth plans of the target company. Two of the most challenging aspects of a business acquisition is securing the required capital and the most ideal financing terms.

Acquisition Financing Options

When it comes to business acquisition financing, there are several options available and each will have its own unique set of eligibility criteria, cost, expectations, terms, and covenants. These options are:

  • Bank Financing
  • Seller Financing
  • Asset-based Financing
Bank Financing

If the business you are trying to acquire has a lot of assets, a strong profit margin, and positive cash flow, you should be able to obtain traditional bank financing. On the other hand, if your goal is to acquire a service company with a lot of receivables and short-term assets, it can be harder to obtain traditional financing.

You can improve your chances of getting a loan by finding a lender that has historically financed the type of business you are trying to acquire. If the seller has a relationship with a financial institution, try talking to them. Also, you don’t have to accept rejection- just find another lender to discuss your options with. After all, different lenders use different qualification criteria.

Seller Financing

For small- to middle-market transactions, the seller may be willing to finance a portion of the transaction. The easiest way to do this is for the buyer to make a down payment and the seller holds the promissory note for the balance of the purchase price. The business, as well as its assets, act as collateral.

The terms vary based on the specific agreement between the parties.

Asset-Based Financing

Recently, asset-based financing has increased in popularity as a viable funding source for business acquisitions. An asset-based loan is a revolving loan secured by the assets of the business. Typically, the loan is 65% to 80% of the value of the asset class.

The primary difference between traditional financing and asset-based financing is what the lender considers when underwriting the loan. In the case of traditional financing, the lender looks at the cash flow first and then the collateral value. On the other hand, in the case of an asset-based loan, the lender considers collateral, debt load, and quality of earnings.

The primary disadvantage of asset-based financing is the interest rates, which range between 12% to 28%.

Equity Financing

Equity financing involves securing equity from sources such as angel investors, private equity firms, and venture capitalists in order to raise the capital to pay the seller as well as to put working capital into the business.

At this time, most private equity firms are looking for deals with $2+ million in earnings and $10+ million in revenues. However, the owner must be willing to give up 51%+ of the company. So, the buyer won’t have debt but will have to give up control of the company.

In addition, most of these firms are looking for a 25% minimum rate of return on their investment. While each has its own expectations and exit strategy, generally they hope to sell the business or take it public within a certain period of time.

Mezzanine Financing

Mezzanine financing is a combination of debt and equity, involving a variety of technical terms such as equity investment, senior/subordinated debt, and private-placement transactions.

In recent years, the size of the mezzanine industry has grown over the past year and is expected to continue to grow as we move into the future.

Ensure Your Deal is a Success

In order to ensure the best chances for success in any deal structure and the best terms, make sure that your offer and/or business plan is well structured. You should base your plan on the combined business- not just the current one. The plan should show how combining operations will improve collateral and cash flow, as well as increase growth. If you need more help with your business acquisition financing, contact Abundant Wealth Financial today.

Annuity Financing: What is it?

Annuity Financing: What is it?

If you have an annuity and have short-term funding needs, you may want to consider annuity financing. This is the process of taking a loan directly from the annuity or using its value as collateral for a loan from an outside source.

Why Consider Annuity Financing?

There are a couple of reasons you might want to consider annuity financing, including:

  • Emergency needs such as a down payment on a home, supporting a family member, home repairs, or medical expenses
  • You don’t want to give up your annuity due to tax and surrender penalties that would lower its value
How Does Annuity Financing Work?

Before we explain how annuity financing works, we’ll explain the basics of deferred and non-qualified annuities.

A deferred annuity has an accumulation period in which it grows. At the end of this period, you can annuitize it, which converts it to an immediate annuity. This is when your payments start. This type of annuity can only be used for a loan during the accumulation period.

A non-qualified annuity is funded with post-tax dollars, while a qualified annuity is funded with pre-tax dollars. You may be able to borrow money during the accumulation phase on your non-qualified annuity. However, financing with a qualified annuity may be more complex.

Here are your financing options:

  • Take a loan directly from the annuity
  • Use the annuity as collateral
Advantages & Disadvantages of Using Your Annuity for a Loan

Annuity financing has several advantages and disadvantages, which we will explore below:


The advantages of annuity financing are:

  • Annuity financing allows you to avoid surrender charges. If you surrender a portion or all of the annuity for cash, you’ll be required to pay a fine. In some cases, these may cancel out any gains you’ve accrued.
  • Annuity financing allows you to avoid paying taxes and early distribution penalties. If you liquidate an annuity before you are 59.5 years old, you’ll be charged a 10% penalty on the amount that you withdraw.

The disadvantages of annuity financing are:

  • You may have to pay an early distribution penalty if you do not pay it back within the specified period of time. In addition, the amount withdrawn is subject to income tax by the federal government.
  • You reduce the amount that is available to earn interest, which reduces the growth of the annuity.
  • There are certain restrictions, which means this may not be the best use of your tax-deferred status.
Is Annuity Financing a Good Idea?

As a general rule, using your annuity for financing, selling it for a fraction of its worth, or surrendering it are the last resort. If possible, its best to have emergency funds set aside in flexible products such as an online savings account. You may also want to consider meeting with a tax advisor or other financial professional to discuss your goals and get some advice. If you need help, contact the experts at Abundant Wealth Financial. We can help you examine your options to get the funds you need.