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To get your LLC off the ground, lenders need to see these 3 things

(FINANCE NEWS) Securing a small business loan is tedious but there is a list of requirements small businesses should be aware of before getting information about lenders.

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401k retirement fund lenders

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 about lenders.

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.

Lenders 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.

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

7 ways spending habits have changed since COVID-19

(FINANCE) How are spending and saving habits changing for Americans during the pandemic?

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Wallet open with $5 bill out, reflecting spending habits

Regardless of whether you’ve lost your job or kept it during the pandemic, you have undoubtedly been affected financially in some way over the past 8 months. For those who have been furloughed or laid off, it’s more obvious. If you’ve kept your job, you might be operating in a limited capacity, experiencing setbacks, or have a decreased client base. Of course, some of us are luckier than others, but if you’re not Jeff Bezos or Elon Musk (who have seemed to profit endlessly during COVID), chances are your bank statement looks a little different than you thought it would.

So how do these changes affect how we’re spending this year? Here are 7 ways Americans have changed their spending habits since March.

Out of work, using up savings

For those who are out of work and require more to live on than the negligible unemployment amount (especially after the extra $600 in COVID relief expired), resorting to savings is a means of survival. I’m sure no one imagined the “rainy day” they were saving for would be the economic repercussions of a global pandemic, but here we are.

Slashing expenses, saving more

We all arguably have less to spend money on these days. Going out to eat and drink? Travel? Shows and events? Not so much. It’s possible our wallets might be feeling a bit flush (especially if you’re still employed). As a result, many Americans are putting this new extra cash into their savings. Re-fluffing your financial cushions is a smart move, no doubt about it.

Putting life on hold

Did you want to move to New York City last spring before all hell broke loose? Did you want to buy a house or go back to school? You’re not alone. With all the financial insecurity that COVID-19 has brought on, it’s no wonder why many Americans are putting their dreams on hold.

Paying off debts

Similar to stock-piling cash for saving, many Americans are taking this time to pay off debts they have, weather that be a mortgage, students loans or something else. Smart move, I must say.

Looking to buy a home

Have you saved so much during the pandemic that you actually have enough to make a down payment on a house? Good for you!

It’s also important to note here that this trend also applies to those who participated in the mass flights from major cities to the ‘burbs – why live in a tiny, cramped apartment during a pandemic when you could buy a spacious home 30 miles away?

‘Comfort shopping’

Ain’t nothing wrong with a little retail therapy. If you’re using your end-of-the-month surplus on fun items for you, your home or others, I totally get it. Chase that serotonin rush – times are hard out here!

All that aside, as a consumer, I find market trends and marketing techniques during COVID so interesting. Absolutely no shade if you end up buying that $80 face cream because #selfcare (I’ve been there), but I have a fun time dissecting the ways in which digital marketers are extorting the current moment for financial gain. Think about it the next time you’re about to buy something you 100% would not have in a pandemic-less world.

Donating more than ever

On the other side of the spectrum, many Americans who have a little extra to spend right now are helping out their communities and other funds by donating to them. Whether it be mutual aid funds that provide meals to members of the community who need it right now, or to national funds that support disenfranchised or marginalized groups hit hardest by the pandemic, Americans are donating more than ever – especially with their stimulus checks!

It’s always interesting to see how large-scale events impact micro-economies, such as individual American households. The discrepancy between those who are working and those who are not plays a crucial role in dissecting spending habits but have less to do with the overall picture than one might think.

It will be interesting to see if COVID-induced spending habits will just be a fad for these dire times, or if they will continue after a vaccine is widely distributed. It seems only time will tell.

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Business Finance

The responsibility of billionaires in tough times

(BUSINESS FINANCE) How have billionaires continued to grow wealthy in times of economic turmoil? And how can they try to improve others’ situations?

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Billionaires counting money at desk in journal

The COVID-19 pandemic has made the divide between economic classes in the US more clear than ever before. From housing to healthcare, one’s ability to survive the impact of these times has been largely dictated by income.

Billionaires, however, sit in a league of their own. Mostly, they have been impacted by becoming much wealthier.

Jeff Bezos is an easy example of wealthier billionaires. He has added $74 billion to his already eye-popping net worth over the 8-month course of the pandemic.

Not just because of the shift away from shopping in-person, either – Watchdog group public Citizen has alleged that Amazon raised its prices as much as 900% on essential goods like face masks, hand sanitizer, toilet paper, and shelf stable food staples, though Amazon has denied this. And while the company regularly speaks out against price gouging, their efforts primarily fixate on third parties.

But as far as I know, only one person has intentionally lost their billionaire status recently. The “James Bond of Philanthropy,” Charles Feeney, just shuttered The Atlantic Foundation after 40 years of giving. In that time, he has donated away nearly his entire $8 billion fortune to charities around the globe.

Feeney, now 89, cofounded Tourists International with Robert Miller in 1960. The luxury retail chain, later known as Duty Free Shoppers, was fueled by cash from international Asian tourism and military service members.

Unbeknownst to his fellow shareholders, Feeney transferred his company assets in 1982 to start the Atlantic Foundation and for years the Atlantic Foundation’s grants were bestowed totally anonymously. His secret wasn’t discovered until court documents regarding a conflict with Miller, his former business partner, forced him to come forward in 1997.

Feeny is far from broke today, living in a San Francisco apartment (hey, they’re expensive) and holding onto a tidy $2 million.

Still, he has given away the greatest proportion of his wealth out of all American philanthropists. The Atlantic Foundation’s legacy remains a powerful acknowledgement of the responsibility that comes with holding a vast quantity of resources and capital.

After all, human brains struggle to really ‘get’ the sheer scale of a billion – let alone give it away.

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Business Finance

Nextdoor goes public for HOW MUCH?

(BUSINESS FINANCE) NextDoor’s latest valuation comes in at a whopping $4 billion to $5 billion, leaving many of us scratching, shaking, or nodding our heads in disbelief or agreement.

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Nextdoor app screens on green background with house in neighborhood.

How did they come up with this $4 billion to $5 billion valuation in Oct. 2020? Could this possibly be accurate for Nextdoor?

Considering the $2.1 billion valuation in Sept. 2019, that’s some Jack-and-the-Beanstalk growth right there. That’s not to say it isn’t worth that much, merely a thing that makes you go “hmmmm.” Has it really grown that much in just more than one year?

For those who aren’t familiar with NextDoor, it is a neighborhood app and website where neighbors communicate within a limited geographic area, bound by the neighborhood you live in and the surrounding neighborhoods.

This is the go-to app to reunite lost and found pets with their families, ask community questions, or even organize community events. It’s also where people complain about dog poop, warn others of coyote activity in the area or break-ins, or, increasingly during the pandemic quarantining, simply say hello and try to make a connection to the people they see walking down the street.

This aspect of the platform meets NextDoor’s stated vision of connecting neighbors, getting to know each other online in ways that will ideally lead to real life interactions. They see themselves as a community builder in this regard, and to some extent, they certainly are. I joined NextDoor to keep track of lost and found animals in my area. I appreciate that neighbors have also reached out to help each other, with gardening tips, “What’s this bug” type questions, offering rides to vote, free yoga lessons, and ways to haze a juvenile coyote to train it to be fearful of humans and not get too close.

I appreciate all of this.

NextDoor is also the online version of Mrs. Kravitz, the perennial nosy neighbor. The platform amplifies these voices of petty venting, grouchy grumbling, and paranoid postulating. People really can be ridiculous, and NextDoor can be a real laugh riot at times. A thread happening on my own NextDoor thread as I write this is pretty awesome: “A drone flew over my house in the middle of the night. Is it legal to shoot it down with my BB gun?”

A lot of people also ask if anyone else heard fireworks/gunshots/police sirens in the middle of the night, usually followed by a robust commentary on said loud noises. Unaffiliated Facebook and Twitter accounts exist only to highlight the more unusual or titter-worthy posts from real NextDoor posts. The most well-known of these is the Best of NextDoor (on Facebook and Twitter). The Best of NextDoor reposts screenshots from actual NextDoor posts, such as these:

Okay, you get the picture. The petty is strong in this one. NextDoor also has had to face the fact that the open platform has also seen issues surrounding racism. Some neighborhood threads became rife with posts of seeing a “suspicious man” walking through the neighborhood. The problem was that often, no suspicious behavior was reported, only a description of the person’s race. There have been calls, even a petition, for anti-racism training requirements for all NextDoor’s volunteer neighborhood leads (moderators).

Like many of the big dogs in modern day social networking apps, NextDoor grew quickly from its launch in 2010 and took on a life of its own. Often called the “anti-Facebook,” NextDoor blurs the line between online interaction and building a real-life community among neighbors. As with all communities, online or otherwise, it brings out the helpful, petty, social, cranky, generous, and sometimes awful side of people.

A community service and a sh*tshow, all wrapped into one, that’s what to expect. With 10 million users in 11 countries, according to DMR, and growing, NextDoor surely has momentum and potential. Could it really be worth the $5 billion valuation? It remains to be seen.

Whether the $4 billion or $5 billion valuation will pan out for their IPO, it will be interesting to watch NextDoor’s next steps, including if they even end up going public.

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