Business Loans For Accounting Firms – Finance Your Accounting Practice

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BUSINESS LOANS FOR ACCOUNTING FIRMS FINANCE
YOUR ACCOUNTING PRACTICE
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FINANCE YOUR ACCOUNTING PRACTICE
The job of every accountant is to manage other
peoples moneybut sometimes you might have to
worry about yours. When you need some extra
capital, business loans for accounting firms can
help you explore new opportunities, boost
marketing, get the right technology,
predicaments, periodic changes, more.
For most accountants and accounting firms, the
start of the year can be stressful. And your
business may not be prepared to deal with a lot
of customers willing to get their taxes done. At
this point, you need to ask yourself does your
business positioned to offer the same quality
services during the busy tax season? Do you have
adequate qualified workforce? Are you equipped
with the latest technology? Were pretty sure
your head might be spinning right now while
thinking about these questions, and the last
thing we want is for you to panic.
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ACCOUNTING FIRM FINANCING
Managing an accounting firm involves a diverse
skill set than accounting itself. The best part
of running an accounting firm is that you very
well know your financials and business situation,
and the same can be used as an advantage while
applying for business loan. Here is a detail
guide on what you need to know when applying for
business loans and how your knowledge will be
helpful.
A business loan for accounting firm is a vital
financing tool to help your business grow and
succeed irrespective of your expansion plans or
preparation for the cyclical crux of tax time.
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Types of Business Loans for Accounting Firms
Here is an overview of different business loan
types that suit your business needs based on your
own eligibility and capital needs.
Small Business Administration (SBA) Loans
Business Term Loans
Business Lines of Credit
Business Credit Cards
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Small Business Administration (SBA) Loans
Small Business Administration loans are
considered the best business loans for almost
every kind of business. They offer the best
repayment terms (up to 25 years), loan amounts
(up to 5.5 million), and affordable interest
rates (criteria based). SBA loans are backed by
the government, making it the most safest lending
option especially for lenders. SBA doesnt lend
money directly to borrowersthey provide funding
based on their network of lenders who review your
loan application. By providing a kind of safety
net to the lenders, in case borrowers default on
the loan, they allow lenders to offer favorable
terms to the borrowers.
There are some different types of SBA loans
including SBA 7(a) loan, SBA 504/CDC loan, SBA
Caplines, SBA Export loans, SBA Microloan, and
SBA Disaster loan. The most suited SBA loans for
accounting forms are the SBA 7(a) loan and SBA
504/CDC loan. The SBA 7(a) loan is a general
working capital loan that is offered as either as
a lump-sum term loan or a business line of
credit. The SBA 504/CDC loan is used to finance
large fixed assets like real estate.
Qualifying for SBA loans is tough they only go
to the most qualified borrowers. A credit score
of 620 to 680 is required with a proof of solid
revenue numbers, and established business
history. If you think youre eligible, apply for
an SBA loan right away. The only downside of
these loans is the detailed documentation with
few weeks to a month approval time.
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Business Term Loans
If youre unable to qualify for SBA loans or
dont have time to gather the detailed
documentation and processing, consider applying
for business term loans as an alternative. A
business loan term loan is alike a traditional
business loan where you get a lump sum amount of
money deposited into your business bank account.
Business term loans provide quick access of
capital to accounting firms who want to purchase
new equipment or technology, finance a marketing
campaign, or hire expert staff.
Generally, these term loans have terms up to five
years with affordable interest rate that you have
to pay on the entire borrowed amount. The
repayments are weekly or monthly, based on the
term and structure of the loan. You can have
quick access to capital usually in a matter of
days, making terms loans an ideal financing
option for accounting firms that require fast
capital.
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Business Lines of Credit
Accounting firms usually have seasonal periods,
meaning they will have different capital needs
during different times of the year. Most
accounting firms can get through with the money
they make in the peak season, but it can be hard
for them in off or slow season. If youre facing
the slow season, applying for a business line of
credit can help you make it through the hard
times. With a business credit line, you can
access the needed capital, and only pay interest
on the capital you usenot the whole loan amount.
Once you get approval from a lender for a certain
credit line, youre able to draw against that
line as much money as you want to manage your
expenses. This business loan option is extremely
helpful for accounting firm with cash flow
issues, especially when you need cash to pay for
expenses during the tax period.
The paperwork requirement for business lines of
credit is minimal and less intensive, and good
credit borrowers often get quick approval. With a
credit line, you not only manage your seasonal
transitions, but it also assist you all year
round.
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Business Credit Cards
It is recommended to secure a 0 introductory APR
business credit cards, so you can spend on your
card without any interest for a predetermined
period of longer than a year. While spending on
your cards, youll get rewards and benefits just
like other rewards cards, and help build your
business credit. But remember, when your
introductory period is over, youll be charged at
prime Market Rate, so make sure you review the
terms before singing the dotted line.
When above-mentioned business loans are not
suited to your needs, getting 0 intro APR
business credit cards can help. A business credit
card is a valuable business loan option for solo
accountants. A business credit card, with some
added discounts from professional organizations,
you can easily sails through the rough financial
waters.
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How to Get Business Loans for Accounting Firms?
Now you know the best business loan options for
your accounting firm, lets discuss how you can
get your hands on them.
Choose the Loan Type
Analyze Your Financials
Organize Your Loan Documentation
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Choose the Loan Type
The first step is to choose the business loan
type based on your needs. You can choose the type
by analyzing your business and personal finances.
While deciding the loan type, assess whats
imperative to you. Whether its the quick cash or
affordable rates? Or, it should be flexible in
terms of payment? Once you understand these
factors, youll be able to secure the ideal
business loan type for your accounting firm.
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Analyze Your Financials
Before making a loan application, understanding
your financials is vital for business loan
approval. If you dont know your numbers well, it
can hinder your application for the right loan
products. As an accountant, youll likely know
your financials, being it a head start in
understanding how your financial profile will
help you get quick access to business loans for
accountantsor avert you from securing funding.
Start with analyzing your revenue, time in
business, and credit score. The better these
numbers are, the more financing options youll
have for different business loans, and, most
likely, the more affordable your loan will be.
Understanding your financials is also important
in order to assess your capital needs,
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Organize Your Loan Documentation
Personal identification
The most important part of getting quick approval
for a business loan application is collecting and
organizing the important paperwork lenders
require. There is a minimal paperwork
requirement for most business loans for
accountants. You can also ask your lender for the
list of paperwork requirements for the loan type
youre applying for. For most business loans for
accounting firms, prepare the following documents
Two years of personal and business tax returns
Three months of business bank statements
Financial Statements
Business licenses and permits
Disclosure of other debt
Ownership and affiliations
Legal contracts and agreements
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The Bottom Line
While analyzing other peoples finances, it might
feel strange to do the same for yourself. Your
profession also gives you an edge when as you
look the right business loan for your accounting
firm because you have a profound understanding of
how financials work, and, finally, how it can
influence your business while taking out a
business loan. Another benefit of your line of
work is that you have a stronger network of
professionals equipped with massive financial
knowledge. If applying for a business loan for
your accounting firm feels like a daunting task,
get help from your network and industry
connections. Every accounting business has
distinct needs, so its vital that you determine
what areas require improvements in your business.
Good luck!
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