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Loans and Grant & Financing FAQ's
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Loans and Grant & Financing FAQ's
Starting a business can be daunting, as you wonder how do you put yourself in the best position to succeed. The answer is simple: you begin with solid information. Every day users are posting new content to the Loans and Grants Community. Check out some of the frequently asked questions below to get yourself off to a solid start.
Can I use a grant to start my business?
Generally, no; despite what you may have heard, it is rare that a for-profit business would receive grant money to start or expand a business.
While there are a few grants available to small businesses, they are largely directed towards accomplishing specific priorities identified by the federal government or a state government agency. For example, some states provide grants for expanding child care centers; creating energy efficient technology; and developing marketing campaigns for tourism. These grants are not necessarily free money, and usually require the recipient to match funds or combine the grant with other forms of financing such as a loan. For more details, read the facts about government grants on Business.gov.
How can I find a legitimate loan or grant?
Ther-s a sea of misinformation about business loans and grants on the Internet. Use Business.go-s Loans and Grants Search Tool as the starting point for finding legitimate financing programs your small business might be eligible for. Keep in mind, for-profit businesses are rarely given government grants and should look to low-interest loans or venture capital financing if yo're wanting to start or expand a business.
Grants.gov is also helpful for finding thousands of federal government grant programs, or the Catalog of Federal Domestic Assistance, which offers a comprehensive database of grants, loans and other assistance programs available from federal agencies.
I have bad credit - can I still get a small business loan?
With the state of the economy and lines of credit being significantly scaled back or eliminated altogether, loans have become increasingly hard to obtain - especially if you have poor credit. Luckily, the government has designed federal and state loan guarantee programs for people unable to obtain financing through traditional lending channels. In many of these programs, the loan proceeds can be used for most business purposes including working capital, machinery and equipment, land and buildings, leasehold improvements, and debt refinancing. Before you apply for a loan, you should pull together the basic documentation you will for your application - take a look at check list of items yo'll need to get you started.
What happens if I default on my loan?
While i's not the end of the world, defaulting on your loan will definitely have some immediate effects like a drop in your credit score, increased interest rates, and foreclosure of property - and it will definitely make it more difficult to find another loan (should you need to in the future).
If you are about to default on a loan, you may want to consider some of the tips offered in the Loans and Grants Community, like negotiating new terms with your lender, considering government debt relief options, or liquidating some of your business assets. Also, if your business will make it or break it depending on a loan then you may want to try looking into other methods of funding your business.
- Other helpful resources:
- The Truth about Government Grants
- Grants 101: An Overview of Grants Available from the Federal Government
- Government Grant Scams
- Managing Small Business Debt through Government Loans and Refinancing Lifelines
While completing his taxes Albert Einstein commented,'This is too difficult for a mathematician. It takes a philosopher.Filing and Paying Taxes discussion board:
How do I know what qualifies as a tax write-off?
Technically, anything that is required to run your business can be considered a tax write off at the end of the year. But if you do plan on piling on the deductions when filing, take a recommendation Business.gov users and consider using a tax accountant ' this will make your life a lot easier should you run into any complications with the IRS. For more information, take a look at the community dialogue on tax write-offs and visit the small business tax deduction guide at Business.gov.
Do I have to give my employees a 1099?
It depends if the workers are considered contractors or an employees.. An employee is considered to be someone who is hired for an indefinite time which can even apply to irregular work on a recurring basis, as well as to part-time, temporary, and seasonal work.
If you have hired workers for an indefinite time and the're earning over $600 and are not a corporation then you need to give them a 1099. For more information, read this Business.gov article, '5 Things to Know about Hiring Independent Contractors and read the IRS.gov article 'Independent Contractor or Employee for guidance if you are unsure on how to classify your workers.
Is advertising tax deductible?
Advertising and promotions directly related to your business are deductible as miscellaneous expenses. When filing taxes keep in mind any professional consulting to a business is tax deductible; this would include marketing services, tax or legal for example.
How do I collect taxes for my online business?
Online businesses are required to comply with the same rules and regulations of traditional small businesses but when it comes to taxes, other issues come into play.
If you operate out of a physical location such as a store, office or warehouse you are responsible for collecting your state and local sales tax from your customers, even if you're operating online. If you do not have a presence in a particular state, you may be not required to collect sales taxes from customers in that state. However, keep in mind that each state defines 'physical presence' differently, and several states have recently enacted legislation that require businesses to report this sales tax. If you are uncertain if you need to collect sales tax in a particular state, contact your state's revenue agency and the revenue agency of the state where you are doing business.