SDB Finance Information

Finance information for you

Posts Tagged Business

Tax Deduction 101 for Home Based Businesses

Oct 29

Posted by admin in Taxes

Seeking tax advice and tax tips is never a bad idea. When it is time to file your home based businesses taxes online you want to have every weapon that is legally at your disposal. Having a list of acceptable deductions for your home business will allow you to quickly and legitimately flow through the tax season with little to no hiccups. Here are a few things to think about when beginning to file taxes online.

First, do you have a home office in the same way the IRS sees a home office? Is your home business run in one designated room in your home or are you working from the computer in your family room? If it is the later it is not considered a home office by the IRS. The room you run your business from must have no other use except working. If you do run your business from a singular room then the square footage of that room can represent the percentage of your mortgage or rent that can be deducted from your taxes. Also, the utilities that you use in your business ventures such as electricity and internet can be deducted. Typically a percentage of the total cost is deducted.

Second, what office supplies do you purchase? Even if you are not able to use the home office deduction, you can still deduct the office supplies that you purchase. Keeping well organized receipts will help you know what you can deduct and what you can not.

The third type of deduction is for office furniture. You have two choices when it comes to this deduction. One, you can deduct 100% of the cost of the furniture for that year. For that deduction, you would fill out the Section 179 deduction sheet in your tax form. In 2006, you could claim $108,000 in expenditures. If you don’t wish to claim the entire cost of your furniture that year you also have the option of depreciation, which allows you to deduct a part of the cost over a seven year period.

The other equipment such as computers, scanners, and fax machines can be deducted under the same principles as the office furniture. You would use the same Section 179 sheet to deduct these things. Any software or subscriptions used by your business can be deducted in the same way.

You can deduct any traveling you might do for your business but remember to keep accurate data of the trip mileage, tolls, or any other trip orientated expenses which includes your lodging and meal expenses. Only 50% of your meal expenses can be deducted. The IRS is a stickler for documentation, so have it readily available. You will also need to check what the gas rate was for the tax year in question and make the appropriate calculation. If you have purchased a vehicle, that too can be deducted. Just make sure to calculate the interest and depreciation for the vehicle.

There are several other deductions that you can find for a home based business. However, it is important that you make sure you follow the guidelines set forth by the IRS and they maintain documentation for everything that you are claiming.

Tags: , , , , , , ,

No Comments

What is an “Ordinary” and “Necessary” Business Expense?

Oct 27

Posted by admin in Real Estate, Taxes

Introduction
For a business expense to qualify as deductible it must be
(1) connected to the taxpayer’s trade, business or profession,
(2) be an “ordinary and necessary” expense of this trade, business or profession, and
(3) be paid or incurred during the tax year for which the deduction is claimed.
The first and third items are self-explanatory, but which expenses are “ordinary” and which expenses are “necessary”? Note that some courts have held that business expenses must not just be ordinary and necessary, but must also be ‘reasonable’ in amount and in relation to the purpose or intent.

Ordinary business expenses
An ordinary business expense is one that is customary or usual in the taxpayer’s field of business. But even an unusual expense can be ordinary if reasonably related to the taxpayer’s trade or business.

Necessary business expenses
A necessary business expense is one that is appropriate and helpful toward the development and maintenance of the taxpayer’s business. It need not be essential or indispensable to be necessary. And it need not be wise. Taxpayer judgement is usually acceptable.

The “location” where business expenses are incurred ? the home office
Having defined ordinary and necessary expenses that might be incurred in the maintenance of your office, consider the location of this office. What if the office was located in your personal residence? Would these business expenses cease to be ordinary and necessary? Of course they would not cease to be ordinary and necessary. However, the fact pattern or evidential circumstances surrounding the reasonableness of these expenses is relevant and must be considered.

Illustrations and cautionary notes on ordinary and necessary business expenses
It would not be reasonable to deduct the depreciation expense associated with the only refrigerator in your personal residence as an ordinary and necessary business expense. However, it may be appropriate to deduct the depreciation associated with the cost of a second refrigerator, preferably a more modest unit, located in your home office in the basement or attic of your personal residence and used exclusively for business purposes. In fact, a major factor used to determine the business nature of assets possessing the potential for personal use is the duplication of personal living expenses.

Therefore, a second video cassette recorder, a second television, a second refrigerator or microwave, and so on, might very possibly be appropriately expensed, depreciated and/or deducted, if these business assets are (1) located in the home office, and (2) used exclusively for business purposes. And, given the opportunity to deduct the cost of one of two such items, it would be advantageous to convert to or elect for business use the more costly of the two video cassette recorders, televisions, and so on, since no tax benefit and/or savings are associated with the non-business or personal assets.

Read the rest of this entry »

Tags: , , , , , , , , ,

No Comments

Deducting the Home Office: For Itemizers and Non-Itemizers

Oct 27

Posted by admin in Taxes

Introduction
The IRS provides numerous examples on a variety of topics, usually focused on what the taxpayer cannot do. This article covers some of the planning opportunities, focusing on what you can do to legitimately deduct your home office expenses and to maximize your home office expense deductions. The home office deduction is one of the least understood deductions. Many taxpayers avoid the deduction, frequently on the advice of their tax accountant or attorney, for fear of an IRS audit. This is nonsense!

The IRS provides detailed instructions on Business Use of Your Home in its Publication 587. This publication is updated every year and is provided to the public, for free, by calling the IRS tax forms 1-800 telephone number or by downloading the publication from the Internet at www.irsgov.com . Home office deductions are reported on Form 8829, Expenses for Business Use of Your Home.

Folklore – The “red flag” to the IRS
Folklore suggests that use of the home office deduction will send up a “red flag” and result in an IRS audit. However, it does not make sense to fail to take a deduction that you are legitimately entitled to! Consider the following:

For the 1997 tax year fewer than 1.5% of all individual income tax returns included claims for the home-office deduction.
In recent years, about 15% to 16% of all tax returns have included self-employment income/losses and a Schedule C or F.
Therefore, if the IRS devoted 100 percent of its audit resources to the tax returns for self-employed taxpayers, they would only be able to audit 1/10th of the individual federal income tax returns with self-employment income or losses.

Of course, the IRS does not audit the tax returns for all self-employed taxpayers. Self-employed taxpayers establish a home office for several reasons. First, they already own or rent a home, so operating out of their personal residence reduces the duplication of overhead and/or the maintenance of a separate office or place of business. The reduction of overhead, and related monthly cash outlays for the additional expense associated with rent, utilities, etc., reduces business risk and business failure rates. Establishment of the home office as the principal place of the self-employed taxpayer’s trade or business also minimizes non-deductible commuting expenses and increases the business use percentage of the business use automobile and, of course, reducing fuel consumption. In summary, one could legitimately argue that the home office is good for the U.S. economy!

IRS Audit Statistics
The IRS publishes audit statistics. For the 1996 tax year, 1,519,243 individual federal income tax returns were audited (1.28%), down from 1.67% of the returns filed for the 1995 tax year. The “no change” rate averaged 14% for office audits, 10% for field audits and 13% for correspondence audits. Additional percentage audited measures for 1996 individual federal income tax returns follows:

TABLE 1

Individuals – Non-business and based on Total Positive Income (TPI)
< $25,000 1.39%
$50,000 to $50,000 0.70%
>$100,000 2.27%
Individuals – Schedule C with Gross Receipts as indicated
< $25,000 3.19%
$50,000 to $50,000 2.57%
>$100,000 4.13%

Generally, the percentage of returns examined will depend on IRS staffing available for a particular geographical region. The returns least likely to be selected for audit are those on which the majority of the income was subject to withholding (e.g., salaries and wages) and where the taxpayer does not itemize deductions on their Schedule A.

The IRS selects returns for examination based on discrepancies identified against informational returns (e.g., W-3 and 1098 transmittals), history of deficiencies, statistically selected random sampling from an updated variation of the Taxpayer Compliance Measurement Program (TCMP), questionable refunds and their computerized discriminant income function (i.e., DIF scores).

Why pursue the home office deduction? There are several reasons why the taxpayer should deduct a home office:

Read the rest of this entry »

Tags: , , , , , , , , , ,

No Comments

Deducting the Home Office: Who Cares About Recapture?

Oct 27

Posted by admin in Real Estate, Taxes

Introduction
The home office deduction is one of the least understood deductions. Many taxpayers avoid the deduction, frequently on the advice of their tax accountant or attorney, for fear of an IRS audit or concerns over the recapture of depreciation when their personal residence is later sold. This article will provide a brief description of the tax savings components associated with the home office deduction for both itemizer and non-itemizer taxpayers and provide some net present value illustrations so that you can see the impact of the recapture of depreciation when your personal residence is sold. The impact is modest.

The IRS provides detailed instructions on Business Use of Your Home in its Publication 587. This publication is updated every year and is provided to the public, for free, by calling the IRS tax forms 1-800 telephone number or by downloading the publication from the Internet at www.irs.gov . Home office deductions are reported on Form 8829, Expenses for Business Use of Your Home. You should print this article out and discuss it with your tax accountant.

Why deduct the home office?
Self-employed taxpayers establish a home office for several reasons. First, they already own or rent a home, so operating out of their personal residence reduces the duplication of overhead and/or the maintenance of a separate office or place of business. The reduction of overhead, and related monthly cash outlays for the additional expense associated with rent, utilities, etc., reduces business risk and business failure rates. Establishment of the home office as the principal place of the self-employed taxpayer’s trade or business also minimizes non-deductible commuting expenses and increases the business use percentage of the business use automobile, not to mention the reduction in the consumption of fuel. In summary, one might be inclined to argue, successfully, that the home office and the legitimate use of the home office deduction is good for the U.S. economy.

Who qualifies for legitimate use of the home office deduction
To qualify for the home office deduction, you must use the business portion of your home?
Exclusively (except for inventory storage or day-care facilities)
AND
Regularly for your trade or business
AND
(1) Your principal place of business
OR
(2) A place where you meet or deal with patients, clients, or customers in the normal course of your trade or business
OR
(3) A separate structure (detached from your home) used in connection with the trade or business.

What are the benefits of legitimate application of the home office deduction?
There are several reasons why taxpayers, legitimately entitled to do so, should deduct their home office:
Real estate taxes and mortgage interest – itemizer. The business use portion of otherwise deductible real estate taxes and home mortgage interest are shifted from the taxpayer’s Schedule A (itemized personal deductions) to the Schedule C (deductible business expenses). The legitimate shifting of the business use percentage of the taxpayer’s home from Schedule A (reducing both federal and state income taxes) to Schedule C (reducing federal and state income and self-employment tax) results in the additional reduction of the 15.3% self-employment tax. The self-employment tax savings are permanent.
Real estate taxes and mortgage interest ? non-itemizer. For taxpayers otherwise unable to itemize, the business use portion of otherwise deductible real estate taxes and home mortgage interested are deducted on the taxpayer’s Schedule C. In this case, the taxpayer benefits from combined federal and state income and self-employment tax savings for these deductible expenses that would otherwise provide for no tax savings. In this case, federal and state income and self-employment tax savings for the non-itemizer taxpayers are permanent.
Utilities and other expenses. The business use portion of otherwise non-deductible expenses such as: utilities, repairs, homeowner’s association dues, basic cable, etc., are converted to deductible business expenses. Not only are the related self-employment tax savings permanent, but federal and state income tax reductions are also achieved. All of these tax savings are permanent.
 Depreciation. The depreciation of the business use portion of the taxpayer’s home is otherwise not deductible. This expense is deducted on the taxpayer’s Schedule C and results in a reduction of the 15.3% self-employment tax. Even if the taxpayer later sells the house and has to recapture the depreciation deducted, resulting in repayment this component of tax savings, a temporary federal and temporary state income tax deferral and permanent self-employment tax savings from depreciation results.

The first step -prepare a loan amortization schedule. If you own a home, prepare a loan amortization schedule for your home mortgage. I will use an example of a $250,000 home with a 10% down payment ($250,000 multiplied by 10% equals $25,000; $250,000 less $25,000 equals $225,000). The monthly principal and interest payments, at an 8% interest rate, are approximately $1,975 per month for 360 months/30 years.

Permanent self-employment tax savings from home mortgage interest. Over the life of the mortgage, the taxpayer will pay about $485,825 in home mortgage interest. Ignoring inflation (and deflation) and assuming 28% federal income tax and no state income tax (for simplicity) the taxpayer will save $136,031 ($485,825 multiplied by 28%) in federal income taxes. (This calculation is, of course, simplified. I have not considered the standard deduction amount that would be available to non-itemizers.) If 10% of the taxpayer’s personal residence is used for business purposes, an additional $7,433 ($485,825 multiplied by 10% equals $48,583, which is multiplied by 15.3%) in self-employment taxes would be saved. Keep in mind, this example of self-employment tax savings (1) is permanent, (2) represents a minimal amount of business use (at 10%), and (3) ignores the other tax savings, previously described. Some additional facts require consideration.

Permanent self-employment tax savings from real estate taxes. Assume that the taxpayer’s real estate taxes are $1,500 per year. Of course, these amounts will increase with inflation over time. Again, ignoring inflation of the cost and deflation (to present value) of the tax savings, assume that the taxpayer uses 10% of the home for business purposes. This would result in the transfer of 10% of this cost, $150 ($1,500 multiplied by 10%), from the taxpayer’s Schedule A to the taxpayer’s Schedule C. The result is additional, permanent self-employment tax savings of $23 ($150 multiplied by 15.3%, rounded) per year, every year.

Permanent tax savings from depreciation (net of recapture). The previous examples have dealt with home mortgage interest and real estate taxes. These items are always deductible, as itemized personal deductions, but have been shifted from the taxpayer’s Schedule A to their Schedule C, resulting in additional, permanent self-employment tax savings. We will now proceed to those expenses otherwise not deductible.

Assume that the taxpayer’s cost of $250,000 can be allocated between land (not depreciable) and building at 40% and 60%, respectively. The taxpayer can depreciate the building cost of $150,000 ($250,000 multiplied by 60%), but cannot depreciation the land, which is a non-wasting asset that does not experience functional or economic obsolescence.

Using the post-1998 39-year straight-line depreciation, this expense would produce annual federal and self-employment tax savings of approximately $167 ($150,000 multiplied by 10% business use equals $15,000, which is divided by 39 to provide $385, in annual depreciation expense, multiplied by the 43.3% combined federal income and self-employment tax rate). If state income tax applies, the annual tax savings would be higher.

Again, the savings resulting from depreciation of 10% of the taxpayer’s personal residence seem modest. However, these savings occur each and every year.

Permanent tax savings from homeowner’s insurance. Assume that the taxpayer pays an annual amount of $500 in homeowner’s insurance. At 10% business use, the taxpayer will be able to deduct only $50 ($500 multiplied by 10%) per year on the Schedule C. However, these savings are, again, permanent. For a taxpayer in the 28% federal income tax bracket, combined federal income and 15.3% self-employment tax savings will approximate $22 ($50 multiplied by 43.3%) per year, every year.

Permanent tax savings from utilities and repairs. Utilities and repairs are generally not deductible. However, for the taxpayer legitimately qualifying for the home office deduction, we can, again, assume 10% business use for utilities and repairs expenses.

A summary example at 10%, 20%, 30% and 40% business use. The above examples and illustrations have separately reviewed the benefits of the home office deduction. TABLE 1 summarizes results where the taxpayer (1) qualifies for the home office deduction, (2) is in a 28% federal income tax bracket, (3) purchased a $250,000 home with 10% down and the remaining 90% financed at 8% for 30 years, (4) allocates the cost between non-depreciable land (at $100,000) and depreciable building (at $150,000), (5) pays real estate taxes of $1,500 per year, (6) pays homeowner’s insurance at $500 per year, and (7) pays utilities and repairs at $4,500 per year.

TABLE 1 shows federal income tax (at a 28% bracket) and self-employment tax savings for 10%, 20%, 30%, and 40% business use, respectively. These tax savings occur annually, every year. Time value of money considerations has been ignored. If the taxpayer were to sell the home in the eighth year, a one-time recapture-related federal income tax of $755 (at 10% business use) would have to be paid.

Finally, TABLE 1 ignores the additional business use-related deductions and tax savings associated with the reduction of non-deductible commuting and the related increased business use of the taxpayer’s vehicle (a separate topic, beyond the scope of this brief article).

TABLE 1

Ex. 1 Ex. 2 Ex. 3 Ex. 4 Business use? …at 10% …at 20% …at 30% …at 40%
First Year Expenses:
Home mortgage interest $ 2,244 $ 4,489 $ 6,733 $ 8,978
Real estate taxes $ 150 $ 300 $ 450 $ 600
equals: Shifted from Sch A to C $ 2,394 $ 4,789 $ 7,183 $ 9,578
multiplied by: 15.3% SE tax 15.3% 15.3% 15.3% 15.3%
equals: Addit’l SE tax $ 366 $ 733 $ 1,099 $ 1,465

Depreciation $ 385 $ 770 $ 1,155 $ 1,540
Homeowner’s insurance $ 50 $ 100 $ 150 $ 200
Utilities and repairs $ 450 $ 900 $ 1,350 $ 1,800
equals: Added to Sch C $ 885 $ 1,770 $ 2,655 $ 3,540
multiplied by: 43.3% 43.3% 43.3% 43.3% 43.3%
equals: Addit’l FIT & SE tax $ 383 $ 766 $ 1,150 $ 1,533
add: Addit’l SE tax (above) $ 366 $ 733 $ 1,099 $ 1,465
Equals: Total tax savings $ 749 $ 1,499 $ 2,249 $ 2,998

Notice that legitimate business use of your personal residence results in (1) the shifting of otherwise deductible personal expenses from your Schedule A to your Schedule C for additional, permanent self-employment tax savings of 15.3%, (2) the deductibility of otherwise non-deductible repairs and utilities expenses on your Schedule C for additional, permanent federal and state income and self-employment tax savings, and (3) depreciation expense, deductible on your Schedule C for additional federal and state and permanent self-employment tax savings.

A time value of money or present value extension ? recapture included
Would you prefer to have $1 today or $1 one year from today? If you answered “$1 today,” you understand the concept of the time value of money. Over time, price levels increase. Generally, automobiles, fuel costs, food and housing costs increase over time. This is due to inflation. Inflation erodes purchasing power.

The selection of the discount rate. Generally, the discount rate is a function of something referred to in finance as the after-tax cost of capital. Any introductory textbook on corporate finance would cover this topic and how the discount rate is developed for corporations. For the individual taxpayer, a similar measure can be approximated.

For our purposes, you should be less concerned with the precise calculation of your particular cost of capital and more concerned with the understanding of the mechanics and the concept of the time value of money. A discount rate of 10% is used to illustrate the present value of the home office deduction. If you want to learn more about cost of capital, merely visit the library and find an introductory corporate finance text. Look in the chapters devoted to present value and net present value.

TABLE 2 illustrates the benefits from the home office deduction, focusing only on the tax deferral from federal income and self-employment taxes. Like TABLE 1, it is important to keep in mind that this illustration ignores state income taxes, which would increase the value (and present value) of this deduction. Furthermore, if the home is sold at a later date, or never sold, the value (and present value) of these tax savings would increase further. Finally, more than 10% business use would increase the value (and present value) of this deduction significantly.

Converting TABLE 1 results to present value. TABLE 2 illustrates the tax savings associated with 10%, 20%, 30%, and 40% business use of a taxpayer’s personal residence at a 28% federal income tax and 15.3% self-employment tax rate (i.e., 43.3% when combined). TABLE 2 uses this same fact pattern, but only for the first year (for simplification) used in TABLE 1. TABLE 2 develops and illustrates the present value of the decision to legitimately exploit the home office deduction, and assuming that the taxpayer sells his/her personal residence and is, therefore, subject to recapture of the depreciation component, in time period/year 8 at the constant 28% federal income tax rate or bracket.

TABLE 2 Time Tax PV

Period Amount Adjustment Factor PV
Business use at 10%
Annual Tax Savings 1-7 $ 749 100% 4.87 $3,648
Depreciation Recapture 8 $(2,695) 28% 0.47 $(355)
Net Present Value $3,293

Business use at 20%
Annual Tax Savings 1-7 $ 1,499 100% 4.87 $7,300
Depreciation Recapture 8 $(5,390) 28% 0.47 $(709)
Net Present Value $6,591

Business use at 30%
Annual Tax Savings 1-7 $ 2,249 100% 4.87 $10,953
Depreciation Recapture 8 $(8,085) 28% 0.47 $(1,064)
Net Present Value $9,889

Business use at 40%
Annual Tax Savings 1-7 $ 2,998 100% 4.87 $14,600
Depreciation Recapture 8 $(10,780) 28% 0.47 $(1,419)
Net Present Value $13,181

Summary
This very brief excerpt used the home office deduction to illustrate time value of money considerations and permanent tax savings associated with the home office deduction. They result from a simple fact pattern, selected and designed to correct misconceptions. Specifically, the issue of depreciation recapture was explored. However, this framework may be used to examine a variety of tax planning fact patterns. Copy or print out this very brief article and discuss these results with your tax accountant.

Tags: , , , , , , , ,

No Comments

IRS Releases Mileage Rates for 2007

Oct 26

Posted by admin in Taxes

One of the advantages of working for yourself is you can write off a lot of different expenses to lower your taxable earnings. One deduction that is very popular is business mileage. Any mileage you undertake for business purposes can be converted into a very healthy tax deduction.

The IRS changes the rate at which you can deduct business mileage each and every year. The change has almost always been fairly small. The last few years, however, have seen some sizeable increases. The gas shortages associated with Hurricane Katrina [damaged refineries] and subsequent high oil prices have both had a big impact. In fact, the rates have increased more in the last two years than they did in the previous eight years combined.

Starting January 1, 2007, the rate for calculating your business mileage deduction goes up to a healthy 48.5 cents. To figure your deduction, you simply multiple this figure by the total business miles you drive in 2007. For example, if you drive 2,000 miles on business in 2007, your deduction would be 2,000 multiplied by 48.5 cents for a total write off of $970. Might it be time to start visiting your clients more often?!

It is important to understand that this deduction is for the 2007 tax year. When you site down to prepare your taxes on April 14, 2007 [lol], you will not use this figure. Instead, you will have to wait until April 14, 2008 when you prepare your taxes for the 2007 year. By the way, the mileage rate for 2006 is 44.5 cents per mile.

As you know by now, the key to limiting the pain of your tax bill is to maximize your deduction. With the business mileage deduction, you can get a very health write off. Just make sure to document your miles in case you get audited.

Tags: , , , , , , , , ,

No Comments

Achieving Financial Success With Patience

Oct 25

Posted by admin in Finance, Wealth Building

The Holy Bible says, “For a thousand years in thy sight are but as yesterday when it is past, and as a watch in the night.” (Psalm 90:4)

Do you want to achieve all the goals you set for 2006? Do you want to achieve success in your career, business and family? Do you want to live the life you ever desire? All these are possible only if you can remove all excuses from your mind, demolish procrastination and stay focused in life. Nothing great gets accomplished in life without viable goals. It is one thing to set a goal and another thing is to wait patiently for that goal to become a reality.

Adversity may unexpectedly set in when you are trying to achieve a major goal in life but you must realized that the adversity you will experienced is for a purpose. And you must look unto God through prayers, fasting and meditation in order to overcome such adversity.

The truth is that, there is no short way to success. Any short way to success leads to a dangerous end. There is time for everything as the Holy Bible makes clear. Man has to struggle and yet wait for his time.

The Book of Proverbs says, “The horse is made ready for the day of battle but victory belongs to the Lord.” The seed is sown; and the Lord, in a mysterious creative process, makes it to germinate, to grow, to blossom and bear fruit.

The seamy side of life, the get-rich quick attitude has been a dangerous syndrome and the bane of our society. I once read a shocking story of an armed who was once asked why he chose to be a criminal instead of learning a trade. His reply was that all his friends in that evil and perverted habit were rich at tender age and he wanted to be like them. It was too late for him to realize that he was heading for an early grave. It was also too late for him to realize his dangerous mistake as he was caught and sentenced to death by hanging. While all his ill-gotten properties were confiscated. His final word was for young men to wait for their time. Only God knows what would be the faith of his family and friends.

God ordain things to happen to us at certain times in our lives in order to justify the trust we have in Him. We need to sacrifice a lot of things for us to succeed in life such as time, money, going through pains and learning lessons as we soldier on. Sometimes your patience may be sorely tried. Do not ridicule a small initiative or effort even when much time and energy has been invested as the case maybe.

I also once read a story of a young man who forfeited his monthly allowance to his family for a trade to enable him become somebody in life. The family literary went through “hell on earth” for sometimes before he was able to regain his financial strength. At that period, he avoided all his friends, relatives and associate to reduce spending, and to enable him actualize his goal.

Other sacrifice their time for a particular project just to succeed in life. Sacrifice or self-denial is a thing of the of the innate part of the body. It is an attitude borne out of self discipline and reverence to God.

Again, their is a close pastor friends of mine who I met in Lagos State Nigeria at the formation of his church. He had to send all his relations living with him packing, and also reduce the feeding allowance to his family. He was called all sort of name including his innocent wife. The man was determined with all moral compass to achieve a goal in life. He had to also resign his job with an oil company for lack of time for God’s work. All that was apparently to the detriment of his family most specially his wife and children. He wanted to achieve a goal though God’s work. He decided against all advice from his family and friends not to resign his job; but he disagreed and went ahead to resign.

After two years of pains, trials and tribulations, the young man became one of most successful men of God of our time. He has a large congregation and build one of the biggest churches in Nigeria today. He has re-united with everybody. It was right when Eleanor Roosevelt said; “The future belongs to those who believe in the beauty of their dreams.”

God can do all things for you as long as you can diligently seek Him with a pure heart. Whatever He promised concerning you He will do. He knows your heart desire and He is full of grace and mercies. The basic truth is that God’s delay is not God’s denial.

Tags: , , , ,

No Comments

Looking For Some Cash?

Oct 24

Posted by admin in Finance, Loans, Wealth Building

For a small business owner, it is not easy to arrange funds and start a new project. You have to face the financial crunch. You cannot put all your personal money into business projects. So, you have to look at the financing options that can provide cash on a reasonable rate for the smooth working of the business activities.

Today, you are not confined to the traditional means of getting a loan. You can also opt for some creative financing options.

Innovative Financing Options

Sometimes, a situation arises where you cannot acquire conventional loans. In that condition, you can opt for some non-traditional financing methods like:

Participating Bond Transactions (PBTs): Such transactions don’t involve an advance refunding. You can preserve a higher percentage of operating income, and take advantage of the lost-cost environment of a tax-exempt charity. You cannot only retain the ownership of all assets and operations, but you also will encounter reduced regulatory risks. It is very much suitable for joint ventures.

Off-Balance-sheet Options: In this the assets financed should be supplementary to the core business. Through operating leases, synthetic leases, and joint venture leases, one can own and use an asset that is actually owned be a third-party investor. In this way, neither asset nor liability gets recorded on the balance sheet.

REIT: Real Estate Investment Trust (REIT) acquires a collection of real estate assets and leases the property to one or more operational organizations. In this way, it trims down the overall cost of an expansion plan.

Receivables Financing: If you are facing a really rigid liquidity situation, then this financing option is good for you. It demands the sale or undertaking of an organization’s account receivables and the securing of financing against these receivables.

In a fast-growing economy, banks and non- traditional lenders have emerged in the market to provide loans to small business owners. The most famous of these are finance companies and loan offices. The loans offered by these companies are generally secured loans, demanding some asset as guarantee of repayment. In automotive financing, such loans are quite popular.

If you are looking for home loans or property loans, then mortgage companies are a good option for you. If you have your own property and you want to get loans for some other purpose, then these companies can also help you.

A number of funding options are available in the market. Before choosing your favorite, you should analyze and compare the pros and cons of every option. It will help you get a better deal if not the best. If you face any problem, you can consult a financial expert or you can search the websites of finance companies. Proficient advice can help you make the best decision.

Tags: , , , , , , , , ,

No Comments