Category: Business Credit

Understanding Equity Financing vs Debt Financing: What’s the Difference

Understanding Equity Financing vs Debt Financing: What’s the Difference

Financing for small businesses often falls into two broad categories: debt financing and equity financing.  Each has pros and cons, including how they affect ownership, cash flow and even taxes. Here’s how each type of funding works, and how to decide what’s right for your unique business and goals.  Is Debt or Equity Financing Better for Small Business?  With debt financing, you borrow a fixed amount of money from a lender. You pay it back with interest, or the financing… Read More
What Are Net-30 Accounts and How Do They Work?

What Are Net-30 Accounts and How Do They Work?

If you don’t think supplier credit matters to your business, think again. One of the most flexible and accessible types of business, trade credit is one of the most popular types of short-term financing for U.S. small businesses, according to the FDIC.  The reality is that net-30 accounts can be one of the most accessible ways to build business credit while managing cash flow, whether your business is new or has been around a while. Understanding Net-30 Accounts Net-30 accounts… Read More
How to Create a “Living” Budget For Your Business

How to Create a “Living” Budget For Your Business

Many business budgets begin and end in an outdated spreadsheet or static shared file. Managers are responsible for monitoring and updating budgets regularly, but if they’re not timely about entering transaction data, they’re constantly operating on a budget that’s out of date. Not knowing the current status of your budget leads to overspending, under-strategizing, and missed opportunities for your business. Rather than relying on “dead” data, you can improve your budgeting strategy with “living” budgets.  What exactly is a “living”… Read More
Should You Be Worried About the New FICO Score?

Should You Be Worried About the New FICO Score?

FICO has announced a new suite of credit scoring models, Fico Score 10 and 10 T, that could result in credit score drops, especially for consumers whose credit scores are already low. Should you be worried? The short answer is “not yet.” But it is a reminder to monitor your credit scores and look for opportunities to build stronger credit. Doing so will position both consumers and small business owners for opportunities to borrow on better terms. (There are over… Read More
In Accounting, Why Do We Debit Expenses and Credit Revenues?

In Accounting, Why Do We Debit Expenses and Credit Revenues?

You didn’t go into business to become an accountant, so it’s understandable that you’d have questions like, “Are expenses debit or credit?” In short, because expenses cause stockholder equity to decrease, they are an accounting debit. It’s helpful to understand why, so learn what you need to know in this article. Understanding Debits and Credits Let’s start with some basic Accounting 101. We may have moved away from “managing the books” in an actual paper ledger and painstakingly entering each… Read More
Why Do Loan-to-Value Ratios Matter?

Why Do Loan-to-Value Ratios Matter?

Your loan-to-value (LTV) ratio is a comparison of the amount of money you’re borrowing and the value of the asset you’re buying. It can be especially important when buying a home because mortgage lenders often use LTV ratios to help determine who to approve, how much money to lend, and how much interest to charge.  Learn how to calculate your ratios and lower your LTV, which can make it easier and less expensive to borrow money.  The Loan-to-Value Ratio Formula… Read More