President Biden announced important changes to the PPP, including a two-week window for businesses with fewer than 20 employees.

How to Finance Your Export Sales

Published: March 28, 2013 Updated: July 25, 2016

As I covered in my pervious blog,  How to Get Paid for Your Export Sales, each of the four international methods of payments which include cash-in-advance, letter-of-credit, documentary collections and open account can have an impact on your company’s financing needs when filling overseas orders. Those needs can be broken down into either pre-shipment or post-shipment working capital.

Pre-Shipment:  If you receive a purchase order from a foreign buyer, you will have a pre-shipment working capital need (the funds to hire labor, buy supplies and materials, etc., to produce the order):

  • unless you require cash-in-advance before you start production; and/or
  • you receive progress payments throughout the production cycle.

If your payment terms are simply cash-in-advance prior to shipment, or even a letter-of-credit that is payable upon shipment, you will still need to fund the entire pre-shipment production cycle. Will your order be produced in 15 or 30 days, or is it a customized piece of equipment that takes nine months to build? The pre-shipment working capital need could be substantial depending on the size of the order and the production cycle. 

Post-Shipment:  If you don’t get paid upon shipment, you will need to carry accounts receivable on your books. Maybe you have enough working capital to produce a short production cycle order, but you have to offer 90-day terms to the buyer in order to secure the contract.  You will need to keep your business moving during that time, which will require working capital to support the foreign A/R. 

You might be able to factor the accounts receivable, or you could insure them through a private insurance company or the Export-Import Bank of the U.S. which will move the risk from what may be an unknown foreign buyer to the U.S. government or larger insurer, allowing you to borrow against the insured overseas A/R.

How can you finance your pre-shipment and/or post-shipment export working capital needs?  The SBA has three loan programs that may work for you:

  • Export Express has a $500,000 maximum and is ideal for new exporters or those with relatively small orders;
  • Export Working Capital Program has a $5,000,000 maximum which may only be used to finance export transactions—from purchase order to collections; and
  • CAPlines has a $5,000,000 maximum which is a revolving line of credit that can support both domestic A/R and insured foreign A/R. 

Visit for a list of lenders active in these programs.  You also will find a listing for SBA’s trade finance specialists located in 19 U.S. Export Assistance Centers across the country who can provide additional information on export financing questions.

About the Author:

Spiffing Up Your Place with the Help of Uncle Sam

By BarbaraWeltman, Guest Blogger
Published: March 28, 2013

There is little doubt that customers respond positively to the attractiveness of your workplace. In addition, it’s been *found that being in a good environment helps to motivate employees and adds to productivity. Improvements to your workspace may be modest or substantial, depending on your needs and your pocketbook. Either way, Uncle Sam can help defray the costs with tax write-offs. Here’s what you need to know.

Deducting repairs

A new coat of paint is a low-cost upgrade for your facilities. Other repairs may be more costly. Fortunately, the cost of paint and other repairs, whatever amount it may be, is fully deductible.

However, the cost of capital improvements has a different tax treatment than the cost of repairs, as you’ll see in a moment. The challenge in some projects is distinguishing between repairs, which are fully deductible now, and capital improvements, which are subject to special write-off rules. As a general rule, repairs to restore or maintain property, in contrast to capital improvements that materially add to the value of property, substantially prolong its life, or adapt it to a new or different use.  (Pending rules discussed later may impact the definition of capital improvements.)

A determination of whether a cost is an ordinary repair or a capital improvement is based on the facts and circumstances. The following chart can help you distinguish repairs from improvements:


Capital Improvement

Fix a leaky roof

Replace a roof

Fix a dripping faucet

Replace old lead pipe with new copper pipe

Apply a new coat of epoxy sealer to a concrete floor

Install a new concrete floor

Fill a pothole


As a practical matter, you must make a business decision on whether you need to make a capital improvement or can remedy a situation with a simple repair. Don’t let tax results dictate your business decision.

Writing off capital improvements

Usually, the cost of capital improvements to realty must be treated as if you’d acquired a piece of realty; it is a separate asset. Since buildings have a 39-year recovery period for depreciation, it can take many, many years to write-off the cost of capital improvements. The good news: The write-offs for capital improvements can be claimed whether you pay cash or finance the project.

Special rules for leasehold, restaurant, and retail improvements. If your property fits into any of these categories, you can deduct improvements more rapidly than for improvements to other commercial realty. Leasehold improvements are improvements to the interior of a commercial building that was placed in service at least three years prior to the improvements. The improvements can be made by the lessor or lessee, but they do not include elevators or escalators, the enlargement of the building, the internal framework of the building, or any structural component of a common area. For restaurant improvements, more than half of the square footage of the property must be devoted to the preparation of meals and seating for on-premises food and beverage consumption. Retail improvements mean improvements to the interior of retail space open to the public.

The special tax rules for leasehold, restaurant, and retail improvements are:

  • First-year expensing (Sec. 179 deduction). You can write off up to $250,000 of the cost of improvements in the year the improvements are made. This deduction, however, only applies to improvements completed before January 1, 2014 (unless Congress extends the law).
  • 50% bonus depreciation. You can deduct half the cost of the qualified improvements if you place them in service this year. Like the expensing deduction, bonus depreciation is set to end this year unless Congress extends it.
  • 15-year recovery period. Instead of deducting the cost of improvements over 39 years, you can deduct them over 15 years. Again, the 15-year recovery period will end on December 31, 2013, unless Congress extends it.

These special rules can be combined to permit a write-off of all or most of your costs. For example, if improvements to the space you lease cost $400,000, you can expense $250,000, use 50% bonus depreciation for $75,000, and depreciate the remaining $75,000 of cost over 15 years.

New regulations

Proposed and temporary regulations from the IRS use new terminology (such as “betterment”) for distinguishing repairs from capital improvements. Unfortunately, they do not contain any “bright-line” rules, so you – as well as the IRS – will have to continue relying on facts and circumstances.

In addition to new terminology, the proposed and temporary regulations also adopt a favorable rule that lets you fully deduct the unrecovered costs of certain building components, such as HVAC and roofing, when they are replaced. For example, you own an office building and installed a new air conditioning system eight years ago. You’re still depreciating the cost, but now have to replace the system with a new one. You can deduct the remaining cost of the old one (the portion of the cost you had not yet depreciated), along with depreciation for the new one.

These regulations had been set to be effective starting in 2012, but the effective date has been postponed until January 1, 2014. However, they can be used for 2012 and 2013 returns at a taxpayer’s election. Whether they alter the classification of costs you incur for your facilities is difficult to say; work with a knowledgeable tax advisor for this purpose.


Some IRS publications can help you assess whether your expenditures for changing the look or functions of your workplace are repairs or improvements:


Before you begin any project to change your workplace, determine the tax impact of your actions. Upfront deductions can help defray the costs and allow you to expand the scope of your project without a net cost to you.


*Denotes a non-government website

About the Author:

Barbara Weltman

Guest Blogger

Barbara Weltman is an attorney, prolific author with such titles as J.K. Lasser's Small Business Taxes, J.K. Lasser's Guide to Self-Employment, and Smooth Failing as well as a trusted professional advocate for small businesses and entrepreneurs. She is also the publisher of Idea of the Day® and monthly e-newsletter Big Ideas for Small Business® and host of Build Your Business Radio. She has been included in the List of 100 Small Business Influencers for three years in a row. Follow her on Twitter: @BigIdeas4SB or at

7 Tips for a Starting a Successful Customer Loyalty Program

By Caron_Beesley, Contributor
Published: March 28, 2013

Got a loyalty card in your wallet?

Small business loyalty programs are a great way of showing customers that they are valued. They encourage return business and help you gather information about your customer demographic. Loyalty programs can also boost your marketing efforts. According to Experian CheetahMail, email campaigns that target loyalty program members are more successful – generating higher open rates, transaction levels and revenue. Even emails that invite prospects to join loyalty programs outperform regular email blasts.

Of course, getting your loyalty program right is critical. Industry experts believe the future of loyalty programs lies in mobile technology. But not everyone has a smartphone or the right app loaded to take advantage of your program. The key is creating a program that is accessible to all and easy to use.

Here are seven tips for starting a small business loyalty program:

The Easy Way to Go – A Loyalty Punch Card

If you’re new to loyalty programs and want a low-tech option, the simple punch card formula is a good place to start. Just design and print out a card and offer a free gift after a certain number of purchases have been made. There are a few obvious drawbacks to this method – you can’t track consumer demographics and the program is 100 percent reliant on customers’ carrying that card around with them in their wallet. That’s if they even remember it’s there!

Start an Opt-In Program

Another easy option is to set-up a simple “sign-up for offers/rewards” program. Ask customers to share their email addresses and add them to an opt-in email list – you can do this online or at the point of sale. This form of email sign-up eases the application process and spares your customer the hassle of having them download an app or share heaps of personal information. In exchange, you’ll promise to send them regular communications and special offers only available to loyalty members. As mentioned above, email campaigns that target loyalty members can be a great source of revenue – and, of course, are trackable.

Consider a Premium Loyalty Program

If you want to reward customers who spend the most, develop a program that limits who may be eligible to qualify. Use your customer relationship management software to track higher value purchases over time and invite customers who meet certain thresholds to join. Alternatively, simply invite high-spending consumers to sign up for your program at the point of sale.

Offer Branded Loyalty Membership Cards

There are a number of commercially available loyalty card services that let you design branded cards, track and manage customer behavior such as number of customer visits to your store, average spend and more. Many also let you send targeted email and text campaigns to members. You can even add on other services such as branded gift cards.

Add a Digital Component

While not all your customers will be digitally savvy, chances are many are and it’s increasingly important that you cater to the growing mobile loyalty trend. There are many apps that small businesses can tap into for free or for a fee. If your business already uses a mobile payment platform, many of these are now integrating loyalty programs into their offerings. Explore your options and look for services that offer social media integration – making it easy for customers to share your awesomeness with their friends and even earn points for likes, shares and online reviews.

Choose Your Incentives Carefully

Reward loyalty with some class. Freebies don’t always appeal to all and they can even de-value your services. For small businesses, customer loyalty is founded first and foremost on great service, a personal greeting, and the tried and tested quality of your products or services. So think of ways you can make your incentives and rewards as unique as your business. Experiential rewards are always popular. For example, a hair salon could offer a monthly workshop that offers free makeover tips to loyal customers. These experiences add value to your customers’ lives, build community, help your business stand out and give customers reason to keep coming back.

Communicate Regularly With Your Members

Treat your loyalty members royally. Segment them out in your email and direct marketing efforts and communicate with them often. Share news of upcoming loyalty incentives or events and don’t forget birthdays – offer something unique to members or opt-in email subscribers during their birthday month.

What loyalty program strategies have worked for your small business? Leave a comment below.

About the Author:

Caron Beesley


Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley

How to Get Paid for Your Export Sales

Published: March 27, 2013 Updated: April 1, 2013

Ultimately, any sale is a gift until you get paid.  However, understanding how to get paid for an export sale is especially important, since your buyer could be 10,000 miles away.  There are four common ways to get paid for an international order. From the most, to the least, secure method of payment for the exporter, these are:

1.     Cash-in-advance- New exporters frequently request this method. Their attitude typically is, “I don’t know you very well, but if you send me the money I’ll send you the goods.” 

  • Advantage: The exporter gets paid before the shipment leaves the U.S.
  • Buyer’s Perspective: It is high risk. The money is gone with only the exporter’s promise to deliver.
  • Drawback: It limits the exporter’s sales potential; is non-competitive; and ties up the importer’s cash.

2.     Letter-of-credit- Letters of credit (L/C) substitute the creditworthiness of the importer and exporter with that of their respective banks.

  • Advantage:  The exporter will be paid if the terms and conditions of the L/C are met.
  • Buyer’s Perspective: The funds won’t be released until shipment is made and terms are met.
  • Drawback: There are fees associated with opening and amending L/C; the importer’s cash is tied-up.

3.     Documentary collections- This method uses the banking system to send documents to the importer.

  • Advantage: The goods are not released until importer pays or agrees to pay.
  • Buyer’s perspective: Payment is delayed until goods are close to being delivered.
  • Drawback: No guaranty of payment; banks only act as intermediaries.

4.     Open account- Open account terms for international sales are similar to domestic open account sales. The buyer agrees to pay in a set number of days—typically 30, 60, or 90—from the invoice, shipment or delivery date.

  • Advantage: More competitive terms which can help secure larger orders.
  • Buyer’s perspective: May allow the buyer time to sell the goods prior to payment; does not tie up importer’s cash.
  • Drawback: The goods are gone and the buyer might not pay. This risk can be greatly reduced by obtaining credit insurance from the Export-Import Bank of the U.S. on the foreign accounts receivable. Cost can be minimal, viz. about 65 cents per $100 of the invoiced amount for a policy that provides 95% coverage. Visit for details.

About the Author:

July 2, 2009 - Report of the Small Business Advocacy Review Panel on the OSHA Draft Proposed Standard for Occupational Exposure to Diacetyl and Food Flavorings Containing Diacetyl.


Demand ROI from Business Planning

By Tim Berry, Guest Blogger
Published: March 26, 2013

How do you value your business plan? What’s it worth to your business? Here’s how I do it:

  • I value the business plan by the decisions it causes.
  • I value a business plan by the money it generates.
  • I value a business plan by its results.

How do you value anything in business? For accounting purposes, expenses are negative value, and assets – things you buy, things you own, that aren’t expenses – are worth what you paid for them. But what’s the real value?

That’s where the phrase “return on investment” (ROI) comes in. Technically, ROI is the (return-investment)/investment. For example, the ROI of buying stock shares for $250 and selling them for $300 is (300-250)/250, which is 20%.

Please forget the formal financial definition, and consider this instead: every business expense—time, money, resources, reputation, and whatever—is an investment. What you get back is a return.

You don’t always get positive value back from what you do. Business meetings often cost more in wasted time than what they generate in information or business decisions. Many sales and marketing programs cost more than the dollars they generate.

So what about business planning? Here are some factors to consider:

  1. People often mistake the purpose of business planning as if it were to have a business plan document to help with raising money from banks or investors. That happens, but it’s a small subset of the real business planning that goes on.
  2. The investment in business planning can be measured (or estimated) as the sum of the management time invested, plus cost of consultants or writers or other outside help.
  3. The return on most of the best business planning investment is a matter of decisions made, performance improved, increased accountability and other aspects of better management. That’s because proper business planning sets goals, establishes responsibilities, and helps with focus and prioritizing key elements of the business.
  4. Sometimes the return on investment is insight. The people who develop the plan pull the business apart and see what makes the most difference, and what’s most important. Sometimes they see threats and flaws. Insight can be very valuable.
  5. When it comes to raising money via banks or investors, making a business plan document is part of the process. The plan doesn’t raise the money, but you can’t raise it without the plan. Effort in making it easy to read and understand often pays off in making the information easier to get to for the people who stand as gatekeepers. But they don’t invest in the plan. They invest in the company and the people that execute the plan.
  6. Some returns can be estimated as a negative. For example, the lack of planning means expensive surprises, lack of management priorities, lack of accountability, less-than-optimal reactive response to events, problems, and opportunities.

Taking the above into account, here are tips to optimize the return on investment in business planning:

  1. Do only what you’re going to use. Don’t spend business time on a document unless there’s a specific business purpose.
  2. Keep the plan streamlined, easy to build, easy to use.
  3. Understand that the plan is just the first step in planning. It will be obsolete in days or weeks. Set schedules for regular reviews and revisions. Track results. Use plan vs. actual analysis to manage better and optimize business performance.

Ultimately, business planning is about better business—not better documents.

About the Author:

Tim Berry
Tim Berry

Guest Blogger

Founder and Chairman of Palo Alto Software and, on twitter as Timberry, blogging at His collected posts are at Stanford MBA. Married 46 years, father of 5. Author of business plan software Business Plan Pro and and books including his latest, 'Lean Business Planning,' 2015, Motivational Press. Contents of that book are available for web browsing free at .

January 15, 2008 - Transmittal letter to Edwin G. Foulke, Jr., Assistant Secretary for Occupational Safety and Health, U.S. Department of Labor, Occupational Safety and Health Administration (OSHA) regarding the Report of the Small Business Advocacy Review Panel on the OSHA's draft standard Occupational Exposure to Beryllium.

August 9, 2010 - Final rule, Cranes and Derricks in Construction, published in the Federal Register

January 16, 2009 - Letter to Thomas M. Stohler, Acting Assistant Secretary of Labor for Occupational Safety and Health, concerning Proposed Cranes and Derricks in Construction Rule.

February 28, 2006 - Final rule, Occupational Exposure to Hexavalent Chromium, published in the Federal Register.

December 17, 2004 - Letter to John Henshaw, Assistant Secretary for Occupational Safety and Health, submitting comments in response to the OSHA's Notice of Proposed Rulemaking (NPRM) on Occupational Exposure to Hexavalent Chromium.

December 19, 2003 - Transmittal letter to John Henshaw, Assistant Secretary, for Occupational Safety and Health, U.S. Department of Labor, Occupational Safety and Health Administration (OSHA) .regarding the Report of the Small Business Advocacy Review Panel on OSHA's draft proposal for Occupational Exposure to Crystalline Silica.


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