Accounting Financing up to $400,000
Accountants play a vital role in their community from providing tax services to helping business owners run and maintain the financial health of their businesses. Accounting business loans can make a business owner’s dream come true. Apply now and see if you qualify for up to $400,000 in 24 hours with no obligations, no impact on your credit score, and no fees.
Accounting is a lucrative business. Those looking to start accounting firms have a great opportunity to succeed with an estimated industry value of $868 billion in 2022. Starting a business requires large amounts of capital upfront, especially for accountants. An accounting firm business loan can help cover startup costs and costs to grow your business.
Read on to learn about the different types of financing available, eligible business purchases, and how to determine the best financing for you.
What Is an Accounting Loan?
Small business loans are loans that small businesses can receive to alleviate startup costs and help through rough times. They are available from many kinds of lenders in various types and sizes. Depending on what you choose, terms and interest rates may vary wildly.
Most loans fall into two categories: secured and unsecured. Our minds typically turn to unsecured loans when we think of borrowing money. You’re given a loan, and you pay it back. Student loans and credit cards are an example of this.
A secured loan means the bank requires some form of collateral if you cannot pay your debts. Home mortgages and car loans are good examples of secured loans. If you fail to make your car payments, your car may be repossessed. Likewise, if you fail to make your mortgage payments, the bank may foreclose on your home.
A business may choose a secured loan because they often offer lower interest rates and higher borrowing limits. A business may use assets like company real estate, company vehicles, stocks, bonds, or expensive equipment as collateral to secure these loans.
Uses for Accounting Loans
You can use accounting loans and other forms of financing in many ways.
- Startup Costs. Small business owners can use small business loans to cover costs until the business starts making money. Startup costs may include office space, hiring employees, technology, and advertising.
- Expansion. Business expansion, such as hiring more employees, going from an online-only business to a brick-and-mortar one, or adding new locations, can be financed with a small business loan and other financing options.
- Incorporation costs
- Technology (computers, printers, scanners, software, security systems, phones, calculators, POS, etc.)
- Business software (tax prep, accounting, tax and accounting research, practice management, payroll, bookkeeping, document management, etc.)
- Office improvements
Accounting Funding Options
SBA loans, or Small Business Administration loans, are backed by the U.S. Small Business Administration. SBA loans include three loan categories: 7(a) loans and 504 loans are best for already-established businesses, while microloans offer up to $50,000 to help companies start and expand.
Commercial cash advances, also called merchant cash advances, operate more like a typical cash advance than a business loan. After receiving the lump sum, payment is taken out daily via a percentage of your debit and credit card transactions.
Merchant cash advances are an excellent option for those who need cash quickly or who may not meet the requirements that some traditional lenders have. Funds from a merchant cash advance can be used for any accounting business expenses.
Equipment loans are often secured loans, as banks use the equipment purchased as collateral. You can use equipment financing to cover furniture, phones, computers, accounting software, and more for your accounting business.
Lines of credit are useful options for all types of financial needs. You have access to funds with a business line of credit but don’t get charged interest unless you’ve utilized those funds. It’s similar to a credit card: you have a certain amount you can spend, but you don’t pay anything unless you’ve spent some of it.
Tips for Accounting Businesses Trying to Qualify for Financing
Multiple factors can affect whether or not your accounting business qualifies for a small business loan. Luckily, there are a few things you can do to boost your chances before starting the loan process:
- Ensure your credit is in order. If you’re applying for a loan for an existing business, that means both the business’s credit and yours. Check your scores and look at ways you can quickly boost that number. If you’re relying on your personal credit score to be approved, you’ll likely need a score of at least 640 to qualify.
- Have a strong business plan. You need to show that you’ll be able to pay the loan back. Develop a business plan that shows how the loan will affect your business. Explain how to repay that loan with your increased revenue, whether you plan to optimize your tax software to allow you to serve more clients during tax season or upgrade your technology to increase efficiency and client satisfaction.
- Boost revenue and your bank account, which doesn’t apply to just starting businesses. However, boosting revenue with a new marketing campaign shows lenders that you can repay your loan for existing companies. It also puts money in your bank account, helping if your loan approval hinges on your daily bank balance.
Accounting Loans Pros and Cons
Using a small business loan for your accounting business can be a great option to cover startup costs or facilitate growth, but there are also downsides.
Cover Startup Costs- Depending on your particular business plan, there may be several things you have to pay for before you bring in any income like a business space, equipment, and capital for hiring employees.
Spending Flexibility- When you choose a small business loan over bringing in an investor, you have more say where the money goes. With a loan, you can put it toward wherever you feel it will be best utilized.
Emergency Coverage- You could have a rock-solid business plan, but it won’t matter if disaster strikes. When faced with a loss of business due to natural disasters, illness, and other unforeseen circumstances, a business loan can help keep your accounting business afloat.
Allow Expansion- You want to expand with other types of accounting, like tax accounting or public accounting. A small business loan would allow you to hire accountants and purchase the necessary accounting software to expand your business.
Strong Credit Is Necessary- Your business and personal credit score is critical if you use your loan for startup costs. Without a good score, you may only qualify for less-than-ideal terms.
Potential Cost- Any loan is going to come with interest. If neither you nor your business have good credit, that interest will be higher. In situations like that, you may be better off improving your score before taking on a loan.
Frustrating Loan Processes- The application process is extensive, requiring paperwork, tax returns, and financial statements. Approval can take several months, as can receiving the funds. A business loan may not be the right option if you need money quickly.
No Wiggle Room- Loans for small businesses aren’t as flexible as personal loans. You’re expected to repay the loan within the agreed-upon time frame, making the correct amount in monthly payments. They aren’t going to be as willing to work with you if an issue comes up. If you fall behind on payments, you risk losing any assets you used as collateral.
Frequently Asked Questions About Accounting Loans
An accountant can benefit from financing in many ways. For example, an accounting business can use financing for startup costs like accounting software, technology like computers and scanners, website fees, and marketing costs. When trying to grow an accounting business, you can use that financing to expand payroll, purchase new equipment, increase office space, and ramp up marketing efforts.
The cost of starting an accounting business will depend on how expansive you want it to be and what tools you already have at your disposal. If you plan on being your own employee, you don’t need to worry about payroll and maybe not even office space. Most states also require a license to practice as an accountant and licensing fees depending on your state. In general, expect minimum start-up costs to be around $20,000.
The minimum credit score you need depends heavily on what type of loan or financing you’re applying for and the financial institutions you’re applying with. However, there are some general guidelines:
SBA loans usually need a credit score of at least 680
Banks prefer at least 700, though high 600s may qualify with higher interest
Equipment loans take lower credit scores, as low as 630 because the bank uses the purchased equipment as collateral
Cash advance options typically take scores of 500 but, depending on your situation, may allow lower scores
Interest Rate-Some lenders may offer better interest than others, so it’s essential to shop around.
Repayment Terms-Before embarking on the loan application process, accounting professionals should know the length of the loan, what the monthly payment is, when the payment is due, and if there are penalties for early repayment.
Fees- No one wants to apply for a credit card only to learn there’s an annual fee. The same is true of any type of business financing. Be sure you’re aware upfront of any hidden costs like late payment penalties or fees for paying online.
Customer Service- Before choosing a lender, look at their ratings and reviews to understand how they treat their customers. Then, find a lender willing to work with you rather than against you.
You can use your small business loan to hire employees so long as it is not an equipment loan.
Funding Your Business Is Our Business
Accounting Loans Can Help Your Business Grow
Whether you’re just starting out in the accounting industry or planning to expand your accounting practice, you need money.
Applying for a small business loan gives you funds for startup and expansion costs. The type of loan you choose will depend on what you’re planning on using it for, but ultimately you want to choose something that allows your business to succeed.
Does Your Business Need Funding Today?
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