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2 finance tools every entrepreneur can benefit from

While there are endless finance tools that track your spending, today, we’re talking about tools that put money INTO your pocket.



cash money

finance tools

Some easier next-gen finance tools

I’ve written several AGBeat columns about entrepreneurship, usually sharing my philosophy that hard work, sound strategic planning, and an intense focus on customers are paramount for success. We’ve discussed leadership, management and financing, and I’ve written about the importance of data and analytics. I still believe all of this – and every day I spend in and around start-ups emboldens my belief in these tenets. They are essential for success.

BUT… there are many things that an entrepreneur can do that aren’t so intense, that aren’t so difficult. There are new apps, websites, and tools in the market today that we can utilize to help out along the way. The good ones are easy to use, have no downside risk, and are effective. Please allow me to introduce two of these next-generation helpers. Both will positively impact your financial environment.

1. The interest-free line of credit tool

Raising capital is a unique challenge that most all entrepreneurs face. There are limitless articles about the topic, and an equally uncountable number of opinions on the best ways to secure investors. There is another category of small business finance that gets a lot less attention, though: operational capital and credit.

Start-ups don’t have the financial history, assets or p&l metrics to establish their own credit to work with banks or other low-interest capital options. As a result, most entrepreneurs put business expenses on a personally guaranteed, high-interest credit card. Most carry balances of five to ten thousand dollars, or more, to pay for monthly expenses like office supplies, telecommunications and travel. This costs companies thousands in interest annually – and more if payments are missed and fees kick in.

Enter Float Money. Float eliminates interest and fees – forever. The company lets entrepreneurs establish a ten-month line of credit, interest free, and without any fees or financial penalties even for missed payments. How can Float do this?

Float Money will lend you up to $10,000 based on your monthly spending. When you purchase supplies through Float’s shopping network, the vendors pay Float. This means that the vendors you shop with effectively pay your interest. You can shop online or purchase gift cards to shop at you local retail locations. You don’t need to change your spending or vendor selections. Float works with office supply companies like Office Max and Staples, Supermarkets like Kroger, Pharmacies like CVS and of course major online retailers like Amazon.

My first thought was that there was a catch. Well – there isn’t. Ever. Additionally, you can utilize your current credit cards (to earn points) and take advantage of coupons and specials that you normally would. Float has one more powerful benefit too: using Float will boost your credit score, even if you aren’t utilizing your credit line (provided you make you payments on time when you do).

Float is a powerful tool that every entrepreneur can use to pay down high interest debt, or simply boost credit and build up an emergency capital reserve.

2. A free money tool

The average person in the United States accesses their mobile phone more than 150 times a day. Putting aside any interpretation on our social environment, that’s just a lot of screen time. There is a new app available for Android devices called Locket that pays you for this screen time. They pay you for accessing your phone just like you already do.

Locket displays high-concept, high-production value advertising on a phone’s lock screen. When users access their mobile device they see the ads. You swipe right to access your phone normally or you swipe left to interact with the advertisement – either way you get paid a penny each time you look at your phone.

Locket promises to bring you relevant advertising based on your preferences, location, etc. The company doesn’t want its value proposition to simply be cash payments to users, but let’s be honest that that’s the primary reason you’re interested. Locket users can earn up to around $300 annually for simply using their phone normally. That’s free money.

Business is hard. Start-ups are harder. Not everything has to be difficult, though. Utilizing tools like Float Money and Locket will help your finances without adding to your already busy days. You’ll have more time for the hard stuff – and more money to help with it. I’ll keep my eye out for more finance and business tools like these. Please let me know if you find some, too.

Hoyt David Morgan is an entrepreneur, angel investor and business strategy leader. He is an investor and/or adviser to a handful of exciting and high growth companies, and has been a part of several high-value exits. He is passionate about customer experience, smart business and helping innovative companies grow... and sailing.

Business Finance

Politicians reconsider PPP rules too cumbersome for small businesses

(BUSINESS FINANCE) The PPP loans may have some changes coming soon, to help small businesses even more by extending the time they have to spend the money.



loan changes

Congress has reported talks over fixing parts of the Paycheck Protection Program (PPP), a key program designed to help businesses during the coronavirus pandemic. Changes could range between small tweaks to an overhaul of program requirements. Congress remains divided over a phase four relief bill (passed in the House last week) which includes several of those PPP changes.

The PPP was created to provide forgivable loans to businesses with fewer than 500 employees. Although the Treasury is continuing to offer updated guidance, any significant changes will require approval from Congress.

One of the major potential changes is an extension to the eight-week time frame for businesses to spend their loan money. Senator Marco Rubio (R.-Fla.) is advocating the change. He told reporters “I think the more important thing to change is the time frame in which they can use it for,” Rubio told reporters. “We do need to give them more time to spend those monies.” The hope is to pass those changes before the first PPP loan recipients reach their deadline in early June.

Other changes proposed in the House bill include extending the spending time period to 24-weeks and eliminating the requirement for 75 percent of loan spending on payroll in order to qualify for full forgiveness. The flexibility could allow recipients to allocate money towards rent, another challenge facing small business owners. While Senate Republicans haven’t shot down that option, they’ve voiced concern on the spending rule which was originally designed to keep workers employed. Meanwhile, Democrats argue for flexibility which could support businesses with fixed costs. Both sides are open to discussing a 50 percent payroll and 50 percent additional cost breakdown in a new PPP changes.

The Small Business Administration has reported $195 billion from the $310 billion of the second tranche of PPP has been approved. With no defined plan to reopen the country, small businesses are counting on relief programs. Senior White House advisor Kevin Hassett has said the government can’t continue to lend money to businesses indefinitely. “It is something we can do through Jun, I would, guess if there’s enough cash for that.”

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Business Finance

Unless you call your representative, the IRS will be forced to screw PPP recipients

(BUSINESS FINANCE) Small business owners, can your Covid-19 loans really be forgiven? “Free money” never sounded so good…or bad. The CARES act missed a vital tax hole.



Cares act taxes due

The Paycheck Protection Program (PPP) portion of the Coronavirus Aid, Relief, and Economic Security Act (CARES) was hailed as a revolutionary life line to small businesses that had to shutter their doors against the plague.

Basically, the Feds said: Keep your expenses up, pay your staff so they don’t have to go on assistance, and not only will we loan you the cash to do so, so long as you can prove it was spent stimulating your business, we’ll not only forgive the loan, it won’t be taxed as income.

Right said, Fed. But some sharp-eyed readers of the letter of the law say they’re too savvy for these loans, and here’s why.

It was announced on April 30th that anything paid with PPP payments won’t be tax deductible.

Specifically, the IRS says, expenses that qualify a business owner loan forgiveness cannot be deducted from 2020’s tax filings, in order to keep people from getting “double tax benefit[s].” You can read up on the tax code citations and legal precedents right here, straight from the tax horse’s mouth.

So what’s happening here is you can “enjoy” free money from the government, but if you were counting on it being non-taxable income, then you’d best count again.

I may be a simple country (adjacent) April, but is the purpose of handing out money somehow… NOT to put business owners AHEAD?

This move strikes me as a ship throwing someone in the water a life-vest… then sailing off without reeling them in.

‘Well you don’t want people to double-dip,’ is a rebuttal I’d expect. Or ‘that’s how the CARES Act was written,’ but right now we’re dealing with people and their businesses needing EXTRA. Not ‘a bit,’ not ‘enough,’ but quantifiably EXTRA help in order to do better than just tread water. We NEED that extra dip… and individual bowls for everyone while we’re at it.

“No half measures,” as a wise, narcissistic fictional criminal once said. Brian Cranston won an Emmy for delivering that line, so I figure it’s stand-by-able.

As of right now, there’s not much that can be done except for business owners to gather and lobby their representatives en masse to alter the language of the CARES Act, or add an amendment to it that allows the IRS to let the deductions business owners need to slide.

As is, strict interpretation of the law doesn’t give our beloved agents enough wiggle room to LET this money be deducted. And I’m guessing that the IRS isn’t really the type of agency to DO interpretative judgements as a matter of course so… the ball is in Congress’ court on this one.

Fortunately, it seems like they’re taking it and running with it!

On May 12, a bill aptly named the HEROES Act was proposed in the house, and it clarifies: “For purposes of the Internal Revenue Code of 1986 and notwithstanding any other provision of law, any deduction and the basis of any property shall be determined without regard to whether any amount is excluded from gross income under section 20233 of this Act or section 1106(i) of the CARES Act.”

They’re reaching past the last stimulus bundle (that I haven’t received my share of yet by the way, cough cough) with a total of three trillion as a distribution goal. That’s a three followed by twelve zeroes, sweeties. And this is all cold, hard, tax free, DEDUCTIBLE cash.

My advice here? Get your letter-writing hands ready, business owners! It’s not a law YET, so keep pushing your politicians as best you can, and telling your friends, (and sharing our articles) And best of luck.

Sidenote from the Editor: Research for this story includes insights from Caleb Ellinger at Ellinger Services (CPA wizard (our word, not his) in Austin who is very well known as serving startup and freelance communities).

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Business Finance

Companies seek brownie points by returning PPP cash they shouldn’t have applied for

(BUSINESS FINANCE) It turns out some large national companies received millions of dollars of the PPP loans that were pitched as for small businesses, what gives?



ppp loans

The CARES Act, passed last month in response to the COVID19 pandemic, allocated over $370 billion to small businesses in the form of PPP loans. The Paycheck Protection Program (PPP) was hastily ran through Congress, with many of the small details left for the SBA, IRS and other entities to iron out, even though the legislation was over 800 pages.

Now, Bloomberg is reporting that many small businesses are returning loans as the Trump administration issues new guidance for these loans.

PPP loans- confusion over eligibility, rules and restrictions

The PPP was designed to incentivize employers to maintain payroll through the pandemic. The law’s intent was to help small businesses, non-profits and smaller organizations without other resources.
Within just a few days, the money was exhausted.

As Congress allocated more money for the program, it came to light that many larger businesses made requests for the money. Shake Shack, a national chain, received $10 million. Ruth’s Chris steakhouse received $20 million. Even the Los Angeles Lakers received about $4.6 million through the PPP. It should be noted that each of these entities returned the money. Technically, each of the entities qualified under the PPP, too.

Treasury Secretary Steven Mnuchin and the SBA announced that all PPP loans over $2 million will be reviewed to ensure borrower eligibility. The SBA continues to provide guidance for the PPP loans. One financial expert likened it to building the plane while it was still in the air. Some companies are receiving guidance that no publicly traded companies qualify, even though these companies have received PPP funding, and some intend to keep it.

If a company doesn’t qualify for the PPP, they could face criminal charges for making false certifications on their loan applications. This could include statements that indicate the PPP funding is necessary to support ongoing operations.

Return the PPP money or not?

The SBA is giving borrowers a deadline of May 14 to return PPP loans without any legal trouble. Some companies are returning the money, not only because of public backlash, but to avoid problems. The government is sending a message that it will be vigilant over the use of PPP funding. There are still so many questions about how the loans will work and will be forgiven, it pays to tread carefully if you’ve received more than $2 million in funding under PPP.

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