Compound Profit Blog

President Obama’s 2010 tax break for small businesses was a real boon for both the economy and the individual worker. Of course, the unemployment situation in the country was, and still is a serious issue. It is one of the main dangers to people’s ability to maintain their personal credit ratings. 

The initial tax breaks made it possible for small businesses to do more without getting extra small business loans. It also helped when more money was needed. The fact that the incentives helped business owners keep their personal credit scores solid made getting small business loans easier.

The old tax credit was issued to small businesses for hiring new employees between February 2010 and January 2011. In August of 2011, Obama once again brought about changes to allow for tax breaks for all businesses that hire. This time he made it available to businesses that hired veterans. This will help the economy and those people who are entering the job force after serving the country.

The new bill is called the “Returning Heroes” credit, and is for the 2012 – 2013 term where businesses can earn a $2,400.00 tax incentive. As an added bonus, those businesses that hire veterans and keep them on the payroll for six months or more can get up to $4,800.00.

As a further incentive, there is a “Wounded Warriors” credit where businesses that hire veterans with disabilities from service can earn $4,800.00. This same incentive will allow for up to $9,600.00 for those employees kept on for six or more months.

There are some who complain about the cost of the bill if it passes Congress. It would end up meaning as much as $120 million dollars lost revenue for the government. President Obama countered the arguments against the bill with the need to recover from over 8 million jobs lost during the recent recession.

Veterans, especially wounded vets, have an even harder time fitting into the employment workforce, and they deserve to find some normalcy upon returning from duty. This tax incentive benefits everybody and is a great way for the country to find some stability, increase job rates and become more productive.

It certainly doesn’t hurt your financing appeal to hire veterans, and banks will also look favorably upon those efforts when you apply for small business loans.

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Getting a loan can be scary for new business owners. However, getting a small business loan is usually imperative when beginning any start up. If your new business idea requires a lot of equipment, office supplies and materials, you don’t have to foot the bill yourself. You just have to apply for a loan. 

Knowing how to make the most of your loan applications can improve your chances of success. Starting small is a good idea. That doesn’t mean small business plans. It means finding smaller, private banks. Small banks are much more flexible. At a local bank you also have a better chance of developing a relationship with your lender.

Another great place to start is the Small Business Association. They have many programs to help new businesses get started. Regardless of where you start, there are a couple of things that will help you get started on the right foot.

Make a Plan

Even a small business needs a plan. A business plan is more than just an idea; it is a blueprint of how to make the idea work. While having a business plan is important for business success, it is just as important as an aid to getting small business loans.

The bottom line is banks and other lenders want their money back. They also expect to make a few dollars extra in the process. That’s their business. When you ask for money, they are likely to want to know everything about your business. They want to know how it will work, what it does and how you expect to get paid for your work.

A business plan goes into everything in great detail, and will be an asset to your loan application. With a business plan, there are no questions left unanswered, and a lender can determine if your plan is realistic, and if they have a good chance of a return on their investment.

Dealing with Rejection

Rejection is a part of the process. You may not get the first loan you apply for. When starting out, understand that the process of obtaining small business loans may take several tries. You can learn from your mistakes and build on the experience from each loan application if you have the right outlook.

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There is a lot more to a business credit card than simply providing available cash. It is very important to have credit cards in your business name in order to protect personal credit ratings. However, depending on your needs there are other things to consider when it comes to what makes the best business credit card for your business. 

There are things like frequent flier miles and hotel savings that the right business credit card can provide for those that have to travel often on business. These are just a couple of the incentives that business credit cards offer. If your business doesn’t require you to travel, however, those may not be the right business credit cards for you, but that doesn’t mean that there aren’t others that will give you the bonuses you can use.

Types of Incentives Available

• Cash Back: Many business credit cards give you a cash back bonus simply for using the card. These bonuses may be general cash back on all purchases, or they may stipulate certain types of purchases. In other cases there may be several types of cash back bonuses on a single business credit card. For instance, the bonus from “SimplyCash®” business card from American Express OPEN that offers 5% cash back on office supply purchases as well as on wireless services. It also gives 3% on gasoline purchases and 1% cash back on all other purchases.

• Bonus Miles: If you travel heavily for business, or just want to take a much needed vacation you can choose a card like Capitol One® Spark Miles for Business that gives you thousands of frequent flier miles with no limits. There are no blackout dates for traveling, or any airline restrictions and you can even use the miles for cash back or gift cards if you decide you aren’t going to travel. Capitol One® also has a Spark card for cash if you prefer bonuses rather than miles.

• Bonus Points: Another form of bonuses are given as “points” toward special purchases. InkBold with Ultimate Rewards gives you 50,000 bonus points if you spend $5,000 in 3 months. If you have a lot of large expenses, or use your credit card for regularly recurring expenses this can be a very beneficial type of bonus.

• Hotel Bonuses: If you travel on business or for pleasure this type of bonus can save you a lot of money. Marriott Rewards Business Card is one of these types of cards. It gives you 1 point for every $1.00 spent, plus 2 free nights at certain locations throughout the year, no limits on the amounts you can earn, plus if you use your card to pay for hotel accommodations at a Marriott you will get triple points for each dollar spent.

What You Should Consider when Choosing a Business Credit Card

Remember that along with helping you protect personal credit, your business credit card will help you build your company. However, it’s important to determine what you need your card for in order to pick a card properly. If you need a business credit card to finance big, long-term purchases look for a card with a lower interest rate rather than big bonuses. In the long-run, you will pay a lot less for the overall purchases even after you take bonuses into consideration.

If you are using your business credit card to finance monthly expenses and make accounting easier, you will be paying off the entire amount every month, so interest is not a concern. In those cases, get the most for your dollars by choosing a business credit card with the most useful bonuses for your needs.

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