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You just got an LLC and you’re ready to hire – 3 things lenders look for

(FINANCE NEWS) Yes, securing a small business loan of any kind is tedious and depends on varying lending organizations and business needs, but there is a list of general requirements small businesses should be aware of before getting knee-deep in conflicting information about lenders.

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Ready to lend a hand

If you are reading this, you probably have an LLC for your small business already, or money talk gets you going. If it is the former, let me say CONGRATULATIONS, and insist you pat yourself on the back in honor of your small business’s progression. Your arrival at a point where expansion is necessary is no small feat given half of small businesses fail in the first year. So, kudos to you.

Now, back to the money talk…

For LLC businesses looking to expand, please don’t fret about all of the information you’ve seen on the web. Yes, securing a small business loan of any kind is tedious and depends on varying lending organizations and business needs, but there is a list of general requirements small businesses should be aware of before getting knee-deep in conflicting information.

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The magic three

After some extensive research posing as the owner of imaginary businesses and annoying every loan officer who’d take my call, I’ve found three general lending requirements. I also provide a collection of the tangible information banks will likely review to meet those requirements. Take a gander:

Assets
Small businesses must have necessary assets: steady cash flow, financial reserves, personal collateral to support a variety of business fluctuations (i.e. unexpected employee loss), and a realistic pay off plan. These assets and financial safety nets are necessary for any lending organization to be confident in your business’s ability to support employee expansion in lieu of current expenses.

Proof of past
Just as you will come to expect from your soon to be employees, lenders want proof of the past and how you’ve managed past loans to align with your business goals. Historical evidence will further determine if your expansion is feasible, but also if it is worthy for the company to accept the lending risk.

Specific plans
Finally, be prepared to provide your small business’s explicit expansion plan, including how you arrived at your suggested loan amount and how you intend to divvy out the funds. It is important that you are as specific as possible in your projected numbers, seeing as one employee could make a $60,000 difference, and largely affect your expansion plan and financial need.

Before you go…

Now that you’re equipped with the magic three, you’re probably feeling empowered to walk into your nearest bank and demand your small business loan. Let’s first be sure you have all of the necessary information on-hand and ready to produce.

Lending companies that look for the magic three before investing arrive at their conclusion after collecting data from the following pertinent information:

– Proof of collateral
– Business plan and expansion plan
– Financial details
– Current and past loan info
– Debts incurred
– Bank statements
– Tax ID
– Contact info
– Accounts receivable information
– Aging
– Sales and payment history
– Accounts payable information
– Credit references
– Financial statements
– Balance sheet
– Profit and loss history
– Copies of past tax returns
– Social Security Numbers
– Assets and liabilities details

Now, my friend, do I release you as proud as a parent unto your nearest bank to secure your small business loan and begin growing your staff the way you’ve dreamed. I’m confident you will find the aforementioned information helpful in said quest, and would like to wish one last time (because it’s impossible to over-congratulate) a sincere CONGRATULATIONS on your businesses growth.

#LLCLending

Lauren Flanigan is a Staff Writer at The American Genius, hailing from the windy hills of Cincinnati, with a degree in Marketing from the University of Cincinnati. She has escaped the hills, and currently resides in Atlanta, where you can almost always find her camping at a Starbucks strategizing on how to take over the world.

Business Finance

Deep dive into how money troubles can actually trigger PTSD

(FINANCE NEWS) Research indicates that PTSD isn’t exclusive to those who have witnessed violence, and many people are triggered by something as common as financial woes.

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Overwhelmed and in too deep

“You know, if it wasn’t for my in-laws, I don’t know what we would have done,” Pete began. “Her cancer, even with the benefits, has cost us at least half a million. That, plus the kids..,” his voice trailed.

“If it wasn’t for the fact that my life insurance didn’t pay off on suicides, I’m not sure that I’d be here now,” he chuckled nervously.

Clouding the mind

We were supposed to be having a one-on-one meeting to discuss recent performance, but it was clear that Pete’s mind wasn’t really there. Generally a man of few words, this was the first time that he’d ever been personal in conversation with me, and his attempt at lightheartedness was flat. Despite his best efforts to the contrary, it was clear that he was burdened.

“Can I ask you a direct question?” I asked.

“Sure.”

“You okay?” The silence lingered for a moment, and he responded, “Yeah, I’m good, I’m good.” The repetition seemed more an effort for Pete to convince himself than it was to answer me. We moved on to the business before us, but as he left my office, I turned to my computer and sent him an email, thanking him for our meeting, and making sure he knew of the company’s employee resource plan, which could provide him access to licensed therapists which he could speak to confidentially, and for free.

Financial stress equates to physical and mental concerns

It’s been well-established that downturns or upheavals in personal economic conditions can be a significant stressor. The threat to the ability to care for your needs and those of your family, whether the threat is immediate or foreseen in the future based on current conditions, can cause us to experience a gamut of emotions and lead to inhibited decision making. An extended perception of threat to economic viability can have real physical consequences, as well.

In a 2011 article published in Health Social Work, authors Bisgaier and Rhodes identified correlations between poor health and adverse financial circumstances in a study of over 1,500 emergency room patients.

Patient reactions were examined across five categories of economic need: food insecurity, housing concerns, employment concerns, cost-related medication nonadherence, and cost barriers to accessing physician care.

Nearly half of all patients surveyed identified one or more financial concerns, and nearly one-third reported identifying with two or more categories of economic deprivation.

Furthermore, a significant relationship was found linking the number of financial circumstances and indicators of ill health in the patient: poor/fair self-rated health, depression, high stress, smoking, and illegal drug use. Beyond the critical point that individual concerns related to financial security are relevant to physical health, mental health concerns are often an undiagnosed byproduct of financial stressors as well.

Effect on the entrepreneur

The entrepreneur often bears a dual-edged burden, as the success of their business is often inexorably linked to personal financial success.

Everything the entrepreneur has invested—time, reputation, not to mention leveraging personal resources—can be lost during periods of economic instability, and the stresses that face small business owners during these times are significant.

Even a booming economy is no guarantee that the entrepreneur’s own business will benefit from the rising tide, as the Small Business Administration has identified that the survivorship rate for small businesses over a five year term is only a 50/50 proposition.

Living daily in these circumstances can lead the entrepreneur to be at risk for an unexpected problem: Post Traumatic Stress Disorder.

What is PTSD?

When we think of Post-Traumatic Stress Disorder (PTSD), we often associate it with professions who have frequent or prolonged exposure to traumatic situations, such as first responders or military personnel.

While those two groups often do face a very real challenge with their ongoing exposure to stressors that can lead to troubling symptoms, it is by no means an exclusive fraternity. PTSD is different than your reactions to dealing with day-to-day stress, and it’s also different than your reactions to dealing with a single traumatic event, such as a severe downturn in your business or a bankruptcy. Stress in those situations is normal and you should expect that your behavior and emotions may change over time as you deal with them.

That’s not what PTSD is, nor is it a manifestation of another physical illness or medical condition, or a reaction to outside stimuli, such as prescription medication, alcohol, or drugs.

How it’s triggered

Defined in the Diagnostic and Statistical Manual of Mental Disorders (DSM-5) as meeting the diagnostic criteria of exposure to death, either actual or threatened, a serious injury, or a sexual violation, PTSD stems from exposure to these scenarios in which the individual either experiences the event personally, witnesses the event personally, or learns of it occurring to a family member or a friend, or has ongoing or extreme exposure to details of the incident that are troubling.

Regardless of which type of event caused the manifestation of PTSD in the individual, the outcomes are noted to be significantly impactful, making the ability to interact socially with others or to work challenging at best and impossible at worst.

While some experience symptoms soon after the traumatic event, it’s important to note that not all do. For some, the symptoms don’t begin until months or years later, when they are triggered. And it’s important to note that symptoms can come and go over time, and their intensity can spike and wane, depending on the external stimuli you face. For example, you may experience an increase in symptoms or severity when you’re feeling tired or stressed about other things entirely, or when you have an unpleasant reminder of the situation that you’ve faced.

Deeper into the effects of PTSD

Psychiatrists have identified four major areas of symptomology associated with PTSD: re-experiencing, avoidance, negative cognition/mood, and arousal. Depending on with of these areas, or which combination of them, you’re dealing with, individuals can experience a gamut of symptomology.

For some, there may be nightmares and flashbacks about the incident or series of incidents that led to the financial concerns. For others, they become avoidant of situations and/or individuals that they associate with the events in their mind. In some cases, this avoidance can transform into an addiction to work or to activity, as it allows the individual to keep their mind engaged on things other than their financial condition.

Depending on the root cause of the trauma, it is not uncommon for personal beliefs about self and others to change, and a loss of trust can occur, for self, others, and systems. Hyper-aroused states are also common in some individuals as a response; always looking for reoccurrences of the situation may manifest itself if a lack of ability to sleep or concentrate, or in a mood shift towards irritation and anger.

These shifting moods are addressed in the current DSM-5, which notes that individuals suffering from PTSD can vacillate between the “flight” and “fight” modes of response.

Finances and PTSD

There’s always an antecedent to behavior; it’s highly atypical that an individual responds to a situation in a totally unpredictable way. So, when looking at how individuals come to face financial trauma, there’s the issue of what caused them to be in this position in the first place, and then the issue of how they’re left to deal with it.

It’s tempting to label those who are going through financial misfortune as being the product of their own poor choices and decision-making—and some undoubtedly are—but we can all think of incredibly talented, hard-working people for whom a life circumstance or factors within their field of industry have caused a problem to arise.

Once people have begun to experience the effects of finance-induced PTSD, its harder still for them to have the necessary capital to bounce back quickly.

This does not make them lesser, despite the temptation to invoke the stereotype of pulling one’s self up by the proverbial bootstraps.

It makes them our neighbors, who could use our support as they deal with things they never imagined themselves facing, doing the best they know how to do with the resources at hand. Because of the intrusion of the effects of finance-induced PTSD, the individual often isn’t at their optimum when dealing with the business side of things: their debt and how it’s structured, how they need to arrange their lives to deal with the situation at hand, or how to get back to work when they’re facing an unsure employment situation.

Audrey Freshman conducted a survey of victims of the Madoff Ponzi scheme in 2012. In her research, published in Health and Social Work, over half of the respondents met baseline criteria that would put them in line for a possible diagnosis of PTSD according to DSM guidelines. A substantial loss of trust in financial institutions was noted by 90% of the respondents, and nearly 60% reported high levels of anxiety and depression.

How to get help

Remember, if you or a loved one are dealing with either financial concerns or the symptoms of what may be Post-Traumatic Stress Disorder, you don’t have to deal with them alone.

It’s hard and uncomfortable for some of us to reach out for help about something as personal as our own financial situation, especially when it’s messy, or our health, especially when we’re honest with ourselves that things aren’t what they ought to be.

But by doing so, by seeking information and assistance, you’re allowing yourself the gift of recovery, both fiscal and physical, and can transition forward from this rough patch.

For financial support, especially for the small business owner, the United States Small Business Association is a great resource. From their website, you can find your local chapters, and make an appointment to see a local advisor, who can provide assistance across a range of topics. For personal finances, there are a myriad of late-night TV ads and Internet popups offering credit counseling or debt assistance.

While it’s tempting to have help right at your fingertips, make certain that anyone you talk to is certified as a credit counselor either through the National Foundation for Credit Counseling or the Financial Counseling Association of America. Both of these organizations are creditable and certify other agencies to provide accurate, timely assistance without steering you towards one preferred solution or another.

For your personal health, your healthcare provider is the best first stop for you to discuss your physical or emotional health. Beyond the doctor’s visit, however, your support network who can be there for you is a crucial lifeline to recovery: people who you trust, who you know well and who know you in return, and who you can count on to give advice and support in your best interest.

If you feel that your situation may require more immediate help, there are other easily accessible and confidential resources for those who need them:

The National Suicide Prevention Lifeline is available 24/7 either by calling 1-800-273-8255 or by going to their website at http://suicidepreventionlifeline.org/ and engaging in an online chat.

For those who prefer texting options with qualified crisis counselors, the Crisis Text Line is available 24/7 by texting “Go” to 741741.

As always, if you think you’re in danger of self-harm or suicide, call 911 or your local emergency number immediately.

With the holidays approaching, many struggles with finances can be felt more intensely. In the spirit of holiday gift-giving, give yourself the best gift of all—peace of mind and a sense of health—by taking care of you, so that you can deal with the situations that have arisen.

This story was originally published in November 2016.

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Business Finance

7 ways to get your freelance invoices paid more quickly

(FINANCE) It’s easy to feel uncomfortable bringing up money with your superiors, but for a freelancer, it’s more important than ever to bring up the issue. Here are 7 tips to get your invoices paid quickly.

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For many, an awkward topic of conversation revolves around money. Whether asking for a raise or asking to borrow money, people often feeling uncomfortable when talking money.

This is equally, or possibly even more so, true for freelancers who are solely in charge of their finances. Without a system of weekly direct deposit, freelancers have to work overtime to keep their earnings in order.

The issue with this is that clients also have a lot on their plates, and something as simple as a freelancer’s paycheck is common to fall through the cracks. This causes freelancers to have to work friendly reminders into their repertoire.

However, freelancers may not always be knowledgeable of the best ways to keep their finances in check (no pun intended). Below are seven ways to enhance payment methods.

  1. You have to be willing to make billing a priority. Due to the fact that money is awkward to talk about, as aforementioned, many let this fall by the wayside. The best way to do this is to keep up to date with your invoices and send them as soon as they are done. Making a calendar specific for billing can help with this idea.
  2. This second bit dates back to when we were young and learning our manners: it is crucial to be polite. Not only is it the right thing to do, but it also increases speed in payment. Using “please” and “thank you” in invoicing emails are said to get you paid five percent faster.
  3. It is best to try and keep a complicated concept like finance as simple as possible. Make sure you are creating specific due dates. This will help to signify importance of payment.
  4. Now that virtually anything can be done online, it would make sense to use electronic payment verses an old-school check. Accepting online payments will get a user paid, on average, eight days faster as opposed to a check.
  5. This is an important notion to keep in mind for any aspect of your business life: be professional. Invoices are often seen by many eyes so it is best to include your business’s logo on said invoice. This has been found to increase chances of being paid on time by 10 percent.
  6. Specificity is urged again in the form of transparency. Make sure you are giving detailed descriptions on each invoice so that anyone looking at it knows exactly what you are being paid for. By doing this, you are 15 percent more likely to be paid on time.
  7. While you may be invoicing month by month, try to avoid sending on the 30th or 31st. Being that everyone, generally, sends their invoices in on these dates, it takes 10 – 20 percent longer to be paid. With everyone sending it at the end of the month, it has a tendency to back up payroll.

The most important thing to remember is that while the topic of money may be awkward, it is your money. If you let a few invoices fall behind because you are uncomfortable reminding your client, this has a way of adding up. Be sure to keep on track with your finances to earn what you are working for.

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Business Finance

Square POS for restaurants wildly improves service

(TECHNOLOGY) Square, a card payment-processing company, has created a point of sale app specifically for restaurants.

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If you’ve spent any time processing card payments in an informal capacity, you’re probably familiar with Square—a company which facilitates card payments via a smartphone or tablet app and a free card reader. Square’s most recent endeavor tweaks their existing product for a more specific environment: restaurants.

Square for Restaurants is exactly what it sounds like: the traditional Square app optimized for a restaurant setting. The app’s features include improved operating speed, accommodations for both front-of-house and back-of-house operations, and a general user interface which is geared toward quick data entry rather than the traditional Square interface’s more cluttered approach.

While the app’s interface lends itself to payment processing and general front-of-house functions at first glance, Square for Restaurants offers multiple other restaurant-centric options to fit different roles. For example, a server might use the app to take and process an order or keep track of which tables have been attended, while a supervisor might generate payroll or archive receipts.

The instant availability of things like order information and seating arrangements also means that customers will have less time to wait between interactions, and staff will have significantly fewer instances of confusion or wasted down time.

Centralization of your kitchen’s various menus is another key aspect of the app. Since the app automatically synchronizes any changes, you can ensure that everyone sees the same breakfast, lunch, and dinner menus on any given day of the week. Additionally, menus can be customized on the fly, allowing you to add a high-demand custom order or special item with a few taps.

As you might expect, the POS comes with all the powerful analytics tools and accessibility which accompany the standard Square app. You can do things like track your best-selling dishes, make adjustments to the menu, and review your monthly overhead from anywhere that has Wi-Fi access; once you’ve made your changes, they will display in the app, making it easy to keep everyone on the same page.

Whatever your position on Square’s products in the past, Square for Restaurants promises to be a fresh take on the oversaturated POS (point of sale, y’all) software market.

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