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Business Loans for Accounting Firms

Accounting firms are very popular businesses to start among people that are looking to provide bookkeeping, tax preparation, and auditing services to the general public. Business loans for accounting firms are generally easy to obtain. Most importantly, many accounting firms are able to generate extremely high gross margins from their services and these revenues are immune from negative changes in the economy. In any economic climate, people are going to continue to need tax preparation services while concurrently having clear and accurate books. This is especially true among small business owners that do not necessarily have the time to complete all the proper accounting on a daily basis. As such, accounting services are very good businesses from economic stability standpoint. They are highly scalable as associates can be quickly hired in order to render a greater number of services to the general public as well as small businesses.

The most common type of financing to use used for a development of a new accounting firm is usually a working capital line of credit. The startup costs that are associated with the new accounting firm are typically low given that the small office and a modest amount of marketing capital is really all it takes in order to commence revenue-generating operations. As such, many accounting firms can even go profitable within the first month of operation provided that the owner is able to simply generate billable hours to create income greater than the very small monthly expenses of the business. It is rare that an accountant will start the firm as a large-scale operation from the onset of operations. In many cases, the only times when an accountant seeks a large-scale business loan is that they are acquiring a practice from a third-party certified public accountant. In these cases, a much more complicated financial situation is provided given that the previous owners going to need to assist the new owner with transitioning the business. In many cases, the existing owner will also provide a certain level of seller financing to the buyer so that they are able to have a smaller traditional business loan when acquiring this type of business.

Given that many accountants are familiar with the day-to-day operations of these types of businesses, a business plan specific for this type of practice is usually pretty easy to put together for a financial institution. Most importantly, one of the key things to stress and any documentation that is going to go in front of a loan officer is that these businesses generate very high gross margins, they are immune from negative changes in the economy, and they can become profitable very quickly. The startup costs for a new accounting firm typically range anywhere from $10,000 to $50,000 depending on whether or not the individuals can have a receptionist or a number of staff bookkeepers from the Onset of operations.

Part of getting a business loan specific for accounting firm will also require the owner to provide a significant amount of information regarding the demographics within the local market. This examination should thoroughly focus on the number of small business owners that are within this market given that these are the primary users of local and regional accounting services. This information can be easily sourced from the US economic Census as well as the general U.S. Census. There are a few online resources that can assist in accounting with developing the demographic profiles that need to be shown to a loan officer when entertaining a business loan specific for an accounting firm.

In closing, professional practices are able to very quickly generate revenues and profits. As such, they almost always make very good candidates for business loans as well as lines of credit. One of the nice things that owning and operating accounting firms that they can usually sell finance as they progress through their expansion operations. This is something that we continue to touch upon as we develop this website and showcase information regarding how professional practices and related businesses can expand the revenues over the lifetime of their operation.

Getting a Business Loan for a Thai Restaurant

Business loans for Thai restaurants are moderately easy to obtain. Most banks and lenders are willing to put up the needed capital for a Thai restaurant business provided that the owner has a 20% capital infusion that is going to be injected into the company in order to commence revenue-generating operations. Generally, the entrepreneur or founder of the business is expected to put up the necessary capital in order to finance the working capital operations of the business. The proceeds from the business loan are typically geared towards furniture, fixtures, equipment, build out, and opening inventory. In the event that real estate is being purchased in conjunction with the development of the restaurant and the overall capital requirement may be somewhat less as it relates to the down payment. However, a 10% to 20% down payment is still going to be required even if real estate is going to be included as part of the overall startup costs.

One of the key things to show to a financial institution if you’re applying for a business loan specific for Thai restaurant is the gross margins are going to be generated on a daily basis. Most restaurants have food costs that represent 20% to 30% of the underlying overall costs of operating the restaurant on a day to day basis. Additionally, one of the key things are going to want to see as well as a very high transactional volume. For Thai restaurants, this includes a combination of dining-in revenues, takeout and delivery revenues, and the occasional catering order.

One of the nice things about Thai restaurants is that they are very popular in most markets given that more people are now becoming accustomed to eating ethnic cuisine. As such, the competition most markets for a Thai restaurant is considered to be moderately low with the exception of major metropolitan areas where these restaurants are pretty common. Within the documentation or business plan that is going to be prepared specific for Thai restaurant, a discussion regarding how an online website will be used in order to generate takeout and delivery orders should be included as well. Most financial institutions are going to want to see that the entrepreneur is going to be maximizing revenues by drastically expanding the market size in which they can operate outside of their standard retail location.

As part of the documentation that would be presented to a financial situation, an overview of the marketing is going to be required as well. Specific to a Thai restaurant, a broad-based local and regional marketing campaign should be developed in order to ensure maximum visibility from the restaurant from the onset of operations. Many loan officers place a significant emphasis on the marketing plan that is developed and usually is included within the business plan war as a stand-alone document.

Within the documentation, a full examination of all assets to be purchased with business loan proceeds should be included as well. This includes the make and model number of the kitchen equipment required coupled with an overview of what vendors will be sourced as it relates to tables, chairs, inventory, and vendors for other soft goods relating to the day-to-day operations of the restaurant. This is something that most financial institutions want to see in order to make sure that the borrowed funds are going to be allocated appropriately towards these expenditures.

Additionally, an overview of the ongoing cash flow of the restaurant should be included as well. This is important to note as many Thai restaurants to run a loss for several months before they become popular within their target market. As such, by providing a bank with an understanding of the business is cash flow needs they will feel more comfortable and extending credit for the development of a Thai restaurant. Most importantly, a full profit and loss statement should be provided to the bank so that they understand exactly when the business will go profitable. As with any type of lending, financial institutions want to make sure that they are going to be able to receive their monthly interest and principal repayments in a timely manner.

In some cases the entrepreneur may be able to negotiate interest-only payments for the first six months to 12 months of operation. However this is somewhat of a rarity – and as such – it is important that the entrepreneur be able to immediately begin to repay the financial instrument or debt obligation once revenue-generating operations commence. Usually there is a slight lead time that allows the entrepreneur to establish the location and commence revenue-generating operations before the repayment period begins. These are all things that are subject to negotiation when working with a loan officer at a bank, credit union, or specialty loan financing company.

Business Loans for Medical Practices

Obtaining a business loan for a medical practice is relatively straightforward and pretty simple. Almost all banks and lenders are willing to provide a medical practice or related corporate entity with all of the capital they need in order to come to commence operations. This is primarily due to the fact that medical businesses are almost completely immune from negative changes in the economy. Also, many medical service providers are able to receive their payments from insurance as well as publicly funded health systems. As such, the economically immune and highly stable nature of the revenues produced by physicians and surgeons allows them to very easily repay any underlying debt obligation. Additionally, doctors and surgeons are very well-paid professionals – and as such – they are able to earn a very high income whether or not they own a practice or if they work for a third-party service provider like a hospital or medical practice.

One of the key things when structuring a business loan specific for a medical practice is to make sure that the information regarding receivables is clearly outlined in any documentation or business plan that is presented to a financial institution. One of the ongoing issues that most medical service providers, medical practices, and related corporate entities have is that there is usually a lag of 90 to 120 days between the time that the services rendered to the patient and the physician gets paid. This is due to the fact that reimbursements need to be processed through both private insurance as well as publicly funded health care systems which take some time. As such, many medical businesses actually receive two forms of financing when they commence operations.

First, they receive a business loan in order to finance the initial start up cost of the business as it relates to acquiring a location, furniture, fixtures, equipment, and having small amounts of working capital on hand in order to finance the day-to-day expenses the business. Additionally, many medical practices will also take out a working capital line of credit that allows them to finance the ongoing receivables as they are generated. A very good practice manager can assist a medical practice with managing their cash flow issues. Beyond actually providing the services rendered to patients, managing the day-to-day cash flows of a medical practice is one of the more complicated aspects of these types of businesses operation.

Once a number of receivables have been received, the credit line can be repaid as these payments are made from publicly funded healthcare systems. Of course, the amount of money needed to finance the business on a day-to-day basis is typically far less than what is billed out to insurance and publicly funded healthcare systems. One of the things that is absolutely necessary when obtaining a business loan or a business line of credit for a medical practice is that a physician or surgeon should have their certified public accountant work very close with them in order to make sure that all documentation is properly put together for these types of loan packages. Beyond the loan application a business plan is typically required as well.

Unlike most other businesses, many banks and lenders are willing to extend substantially more as it relates to the start up costs relating to a medical practice. In some cases, some banks are willing to lend 100% of the total amount needed in order to commence revenue-generating operations. Unlike other businesses, most other companies typically are required to put up a 20% down payment for the total amount of money they will be borrowing. However, medical practices, dental practices, podiatry practices, and allied healthcare professionals are typically able to borrow much more from a down payment perspective given – again – be very economically secure nature of the revenues generated through these entities.

Of course, any time an individual takes on a substantial debt obligation there are going to be certain risks involved that must be dealt with on a day to day basis. As such, consultation with properly qualified business advisors as well as a certified public accountant is a must if an individual is going to be financing nearly 100% of their medical practice through a standard business loan and or line of credit.

Throughout this website we’re going to continue to showcase a number of different issues that revolve around obtaining business loans, lines of credit, and related debt instruments that can be used for the ongoing growth and expansion of any type of business imaginable.