As with many businesses, the end of the year is often a hectic time for small companies and startups as well. Loose ends tied up, big sales closed, products being moved—throw in holiday schedules and it’s easy to lose sight of the new year until it’s already here. So let’s take a few minutes to consider 2014 and how this year will impact the coming one.
Evan Singer, general manager for SmartBiz, a loan company that automates the process of applying for and securing U.S. Small Business Administration (SBA) approved loans online, believes that 2014 was a great year for most small businesses. Singer says that his company, SmartBiz, reduces the wait time on securing an SBA loan from months down to weeks after an application is submitted on its website, and he has seen a lot of loan activity from small businesses this year.
In a recent interview, Singer explained to me three important things that he has dealt with on a daily basis and what they might mean to small businesses planning for 2015:
- “Don’t let the negative press scare you. The economy is going well. People are hiring, adding jobs. They’re looking to expand their businesses. I’ve seen it across the country and it almost doesn’t matter the market right now. …When I see some of the negative articles, I think ‘Oh, that’s funny because I’m not seeing that.’”
Despite what news outlets may have reported about small business lagging in 2014, Singer isn’t alone in his reports of positive business growth throughout the year. In fact, according to the Small Business Administration blog, small businesses added jobs each month for 57 straight months—which is the longest running series of employment growth in U.S. history. This is solid evidence that the economy is moving forward for small businesses and it also shows how small businesses have had a huge role in the recovery of our country’s economy after the recession. Both of these factors should bolster small businesses in their decision on whether to expand their companies in the coming year.
- “If a business had a good 2014, a good year from a financial perspective, and they’re looking to borrow money or get some type of business loan, they should file their taxes early, if possible. The reason is that most banks will look at the business’ tax returns to decide whether or not they should give them a loan, and will also use those returns to determine how much they can qualify for. And if they had a really good year this year, the faster they can file the returns the better, so the bank can use the 2014 tax information versus the 2013 tax returns when they do their analysis.”
By giving the banks more positive financial growth information, the small business will more likely be able to obtain a loan and the amount of the loan might be higher.
- “Businesses may not know that they can refinance higher-interest debt that they have. With consumers, there’s a lot of advertising around ‘Hey if you have a high-interest credit card, you can refinance with a lending club or some other solution and get a lower-interest debt.’ And businesses can actually do the same thing. So if a business took out a higher-interest loan, they can refinance it just the same way they might do from a personal [loan] standpoint.”
SmartBiz does a lot of business with small companies looking to refinance and pay down higher-interest debt. Many loans through SmartBiz are at a 6- to 8-percent interest rate with longer terms that allow a business to have a lower monthly payment.
For any small company coming up for air during the end-of-year push, it’s important to start considering 2015 and what your business may need. Whether it’s money to add more jobs or more locations or a refi on a loan that would cut down on monthly payments, it may be time to look over those tax documents and start to formulate a plan before the big ball drops to ring in the new year.