Profit and Loss Statement: Why Is It Important for Your Business

Starting a business and running it successfully is challenging. And one of the most challenging areas is accounting. So, if you are a new business owner hopelessly staring on your first profit-loss statement (P&L), then you are not alone. For business owners who do not have solid background in Accounting, understanding the profit and loss statement can be pretty difficult.

In fact, a lot of small businesses make the humongous mistake of not maintaining the P&L record in their beginning years. Well, worry not! In this article, we’ll decode what Profit and Loss Statement is, what is the actual meaning of those accounting jargon that you see on the statement and why it is super-critical for you to maintain the P&L statement.

So, let’s get started!

What is a Profit and Loss Statement?

Profit and Loss Statements or P&L Statements are also called income statement or revenue statement by many. As the name suggests, the statement gives you an overall picture of the net income of your business. So, how it is done? Simply, by subtracting all your expenses from the total revenue. The challenge here is to document all (I mean, ALL, no matter how small or big) your expenses and all your revenue. The bigger your operation is, the more number of vendors, employees or other spending avenues you have, the more complex the statement becomes.

So, How to Track Your Profit and Loss Statement?

Tracking your P&L statement is easier than you think! You simply have to keep track of all your expenditure as well as all your revenues. You can do this manually (it’ll be a humongous job though) or can use any accounting tool for the same. Whether you are using a tool or keeping track of things manually, entering correct information and ensuring that nothing gets skipped is of vital importance here

Why Profit and Loss Statement is Important for Your Business?

Well, it’s a legal mandate for one thing! As per U.S. business laws (and it is the same for most countries) it is required for every business (no matter how small) to maintain the P&L statement. But that’s not all.

A properly maintained P&L statement lets you track the progress of your business on monthly, quarterly or yearly basis. Simply by looking at the statement closely, you can assess the health of your business to a great extent. What are the areas where your business is spending a lot of money? What is your average deal size? Is there any areas where you can reduce the spending a bit? Which are the months when you have relatively lesser number of deals? All these questions can be answered by going through your P&L statement. And, if you are a business owner, you already know how crucial this insight is for the success of your business.

Another reason why having your income statement in place is crucial is for funding needs. Whether you are looking at expanding your operations or looking at purchasing a new office space, there are several instances when you may need a helping hand. However, when it comes to funding a business loan, all investors (traditional banks and peer to peer lenders alike) wants to know whether you are capable enough to repay the money. And, the first thing they’ll ask for to assess your profitability is the P&L statement.

So, Let’s Decode the Jargons

Jargons are what make accounting scary. If you are not from an accounting background then chances are you’ve stared at the acronyms without comprehension and ran a Google search on them. So, let’s decode the jargons that come with your P&L statement.

  1. Revenue: This is the total amount of money you’ve received in a particular time span. While it obviously includes the money you’ve made by selling your products and services, it also includes the money you’ve got as tax refund or the money you made by selling any property. In short, revenue is the sum total of money-in, from whichever avenue that may be.
  2. Expenditures: Again, no brainer! This is the sum total of everything that your business spends in any given time span. Remember, this includes all the money you’ve ever spent, no matter how small or big the amount in whatever avenue.
  3. COGS: This one stands for Cost of Goods Sold. Okay, so you might be selling a product for $10. But, how much are you spending to manufacture the product? COGS is the amount you send in making the product.
  4. Gross Margin: Subtract the COGS from total revenue and you get the Gross Margin.
  5. OPEX: This one represents all you operational expenditure; starting from the taxes and rents you pay till the salary of your employees and the logistical expense of sending the manufactured products to the shop.
  6. EBITDA: This one stands for earnings before interest, tax, depreciation, and amortization.
  7. Depreciation: Well, everything you purchase for your business, be it car or a machinery loses its value after a certain time. The lost value here is called depreciation.
  8. EBT: This stands for earnings before tax. Subtract COGS, OPEX and depreciation from your revenue and you get the EBT.
  9. Profit: Profit is the ‘bottom line’ of your business. This figure stands for how much money you are making after covering ALL your expenditure.

Last Words:

Now that you know all about that P&L statement, it is time to take a good look at it and see how you can maximize the profit for your business.  

Looking at Starting A House Flipping Business? Go for Hard Money Loan!

House flipping has become a lucrative business due to the rise in property prices since the Great Recession of 2008.  It is pretty straight forward actually. You buy an old house, renovate it and sale it at an elevated price. Sounds good, right? But, you do need the capital money to get started here!

You need money to purchase the property, to fix it, to pay taxes, to pay insurance and so on.

So, unless and until, you do have a considerable sum to invest in, it is tough to start your house flipping business. Well, you could get a loan to get started. But, after the crash of the housing market in the country, the market has just started to stabilize and there’s still high doubt among the money lenders about the success of house flipping. They see it as a risky proposition.

The problem is even worse for a fresher or an inexperienced flipper. On one hand, you are just starting out; so chances are you are pressed for funding. One the other hand, you hardly have any filliping experience to show in your portfolio to get approval for a business loan.

Don’t be heart broken. Apply for hard money loan instead!

What is Hard Money Loan

Hard money loans are typically issued by financial institutes, such as banks, private investors and companies. These loans have terms generally less than a year or two with interest rates varying from 12% to 18% in addition with 2 to 5 points i.e. 2% to 3% of the loan amount.

Let’s understand this-

If your loan amount is $100,000 and you were charged 3 points, you need to pay 3% of $100,000.

Two Big Advantages:

  • Here comes the big news for you. Unlike the conventional mortgage system, you don’t need to pay points to the hard money lenders until you resell the home. Basically, you are not putting up your own money in the process.
  • You can borrow hard money loans based on the property’s after renovation value (ARV). You will get maximum 70% of the ARV. Suppose, your home costs $100,000 and its ARV is $200,000, your maximum loan amount will be of $140,000. So, pay your purchase price of $100,000, pay all your closing costs, fees of the lender, carrying costs and other selling expenses. You are still not putting up money from your own pocket.

How is Hard Money Loan Different from Conventional Loan?

  • In case of hard money loan, you get rid of bureaucratic red tapes. It means faster disbursement of loan amount for a flip.
  • In case of properties in poor condition, you will hardly get a loan through conventional mortgaging system. Hard money lenders are relatively less stringent about property condition or borrower’s qualification like credit scores. But they may opt to see your bank statement or tax returns to ensure your credibility. However, it varies from one lender to another.
  • Your traditional money lender will see if you have borrowed the down-payment too. On the other hand, hard money lenders do not care about such.

Where to Apply

Flippers, especially aspiring ones often harbor a question, “How Do I Apply for a Hard Money Loan?”

Well, you can go to traditional financial institutions such as banks or can apply online. Once you are determined to avail a hard money loan for your flipping business, you have got two options to choose either.

#1. Traditional Banks:

When you hear about banks, you imagine a sack-full of documents and applications waiting for approval. Before opting for hard money loan from banks, note that banks consider flipping as a risky proposition. You have to dig harder to bring out the treasure.


  • Banks provide loans at relatively lower rate of interest.


  • Document verification process is quite lengthy.
  • Banks follow strict guidelines to check the eligibility of the borrowers. Having a great credit score is a must in most cases.
  • Property qualification criteria are stringent with most traditional lender. Applications for properties in poor condition are often rejected.

#2. Online Lenders:

Who are they?

They are online facilitators who have a good network of money lenders such as banks, private lenders and peer to peer lenders. Today, there are a number of such lenders operating in the market.

Let’s find out their pros and cons:


  • You will undergo relatively less paperwork.
  • The loan approval process is much faster.
  • They are less strict about your eligibility and property qualification.


  • Online lenders usually charge higher interest rates than the banks do.

Last Words

Funding for house flipping does not work like a hot knife through butter. It passes through lots of doubts and difficulties when you are applying through a traditional mortgage system. So, choosing hard money loan as a funding option can be a great way to start your flipping business. Want to apply for hard money loan and get it approved without much hustle of paperwork and eligibility criteria?


Get in touch with our loan experts at 1-888-897-9414



How to Prepare Your SBA Loan Package

SBA loan package

As a small business, SBA loans are by far the best options you’ve got. Offered by U.S. Small Business Administration, these loans are long-term, have low interest rate, and are backed by the federal government. This means, as a borrower, not only you get more time and pay less in interest; but in case you fail to repay the loan, the government steps in and pays off your debts. Of course, it is the dream loan for any small business!


But, understandably, getting a SBA loan is not easy! The SBA works with a number of trusted lenders to offer these loans. And, your loan application must be approved by the intermediary lender you are applying with as well as the SBA. No matter which lender you are applying with, both the institutions will evaluate your application by considering your credit score, financial statement of you as an individual as well as your business, any collateral that you can offer etc.

There are a number of SBA loan types available to businesses today:

  • SBA 7 (a) Loans
  • CDC/SBA 504 loans
  • SBA CAPLines
  • SBA Export Loans
  • SBA Disaster Loans

Among all these, SBA 7 (a) is the most popular one today. So, if you are planning to apply for SBA 7 (a) or any other type of SBA loan, it is essential that you prepare well. Knowing the crucial components of the loan package and preparing them meticulously is the key here.

Elements of SBA loan package

The SBA loan package is nothing but the application you submit to the lender to receive a loan backed by U.S. Small Business Administration.

The SBA loan package should include three main element:

  • Statement of purpose
  • Business plan
  • Financial statement

So, let’s take a look at how important each of these three components are and how you should prepare them.

Statement of Purpose

More often than not, businesses end up writing a lengthy piece of article with no clarity of thoughts for this one. Well, your confusion about what to include and what not is understandable. And this is why, the SBA has clearly specified the crucial information they want to receive from your ‘Statement of Purpose’.

Let’s take a look

  • Information about the loan you are requesting
  • Clearly defined business plan
  • Some details about how the loan will positively impact your business
  • Some details about how much time and money you’ve invested in the business as an owner so far.

Remember, 100% financing is not an option with SBA. Why? The answer to this is simple. While the U.S. Small Business Administration is ready to back you up in case of things going south, they also need to know that you have invested enough of your time and money to put up a good fight.

Skipping any information about the loan request is risky here. And this is true for any loan you are applying for, not just SBA loan. A lender is most interested to know how you would use the money and more importantly, how do you plan to give it back. Answering these questions sincerely gives your application a lot better chance of getting approved.

Last but not the least, include vital information such as the loan amount you are applying for, loan duration, proof of ownership, the reason you are looking for financial assistance, any collateral that you can offer etc.

Business Plan

A lender will always want to know the details of your business to check your repayment capabilities. Therefore, make sure to include your business plan in the SBA loan package.

The business plan should include the following:

  • A detailed description of the business
  • A well-calculated prediction for future
  • Information about the products or services you offer
  • A clear idea about how the business and management works

Business plan is an essential aspect of your loan application.  Both the lender and SBA consider these details of utmost importance. So, if you are thinking about skipping on any details, think again!

Financial Statement

At the cost of sounding repetitive, a lender is most interested to know how you would repay the loan. Therefore, offering a clear picture of what you are financially capable of and how you plan to repay the loan works as a huge confidence booster.

Keeping this in mind, you should include the following:

  • Cash flow report- income vs expenses
  • Income statement – profit and loss
  • Balance sheet- net worth of the business
  • Personal finance statement- personal net worth, debts if any

These information is required by lenders, so that they can evaluate your application on basis of:

  • Character
  • Collateral
  • Capacity

Last words…

Now that you know the crucial components of your SBA loan application, it is time to do some research and find out the best lender that you can apply with. Gather all necessary documents, prepare the loan package sincerely and rely on a lender with great track record to amplify your chances of SBA loan approval.

We have been offering SBA loans to business like you for years. Please get in touch with us at 1-888-897-9414 to grow your business today!



Grow Your Agriculture Business With Farm Loan

Agri Loan

Are you into agriculture business? If yes, you already know the blessings and perils of it. While it can be a pretty profitable venture, not to mention amazingly satisfying too; the uncertainties of Mother Nature often makes it harder for you to plan your finances. Be it buying a piece of farming land or purchasing some essential equipment, often the seasonal nature of the business becomes a hindrance for your growth.


Well, it does not have to be so!


Growing your farming business is really easy with the appropriate agri loan. While there are a number of lenders who offer farm loan today, choosing the one that is best for your business is easier said than done.


But, before we dive deep into how you can utilize an agri loan to grow your farm or what features you need to look for in your farm loan, let us get a better picture on what agriculture loan is. 


What is Agri Loan?

Agri loans or farm loans are aimed at offering financial support to farmers, agriculture businesses and rural communities. These loans can be used to finance various requirements of a farming business. Whether you are looking at growing your agriculture business or willing to start a new one, an agriculture loan is the best bet for any farmer for sure. While the basic concept of the loans are quite similar to that of any other type of loan, these loans are often tailored to fit the seasonal nature of agri industry.


How to Use an Agri Loan for Growing Your Farming Business?

In most cases, growing a farming business calls for a substantial amount of capital. But, that is no reason to hold back on your dreams! Here’s how you can grow your agri business with a farm loan.


Purchase or Lease of New Farming Land

The first requirement of any agriculture business is land. Whether you are a new farmer looking at your first piece of real estate or a seasoned businessman gearing up to grow his business; you can avail an agri loan to purchase or lease new farming land.


Both traditional banks and online lenders offer farming loan for this purpose. However, considering the uncertainties of the industry in general, most traditional lenders are likely to ask for a high collateral. This is a problem area for many farmers, especially the new ones. Here, applying with an online lender and availing peer to peer lending can be a good solution.


Purchase or Repair of Farming Equipment

Running a farm without specialized equipment is not only difficult, but also more expensive. With specialized equipment in place, you can reduce manual labour significantly and improve productivity many times over. So, if you are looking at growing your farm, it is essential to invest in specialized equipment, such as tractors, grain baggers, shredders etc.


However, quality farming equipment does not come cheap. Here, opting for an agri loan is a great choice. Before you apply for the loan, make sure to do the proper research about the pricing of the equipment you need, the running cost for the same, any maintenance cost that you may have to bear etc. This way, you won’t over or underestimate the amount of money you need.


While you can avail a farm loan for purchasing new equipment, you can sought one out for repairing your old ones too. Simply make sure to go with the right lender and you can boost your farm production with the right tools.


Refinancing an Older Loan

If you already have a farm loan with high interest rate, refinancing it with a lower-interest loan can significantly reduce your financial burden and help you grow your business. However, this one needs thorough analysis and understanding.


Once you refinance your older loan, you’ll still have an outstanding loan to pay back. Plus, you’ll have to bear the refinancing cost as well. So, going for it makes no sense, unless you save significantly on the payable interest. Therefore, checking the options out with a seasoned financial adviser is for the best.  


Recovery Cost after a Natural Disaster

Natural disasters are difficult on everyone. But, agriculture businesses are especially vulnerable to Mother Nature. So, if you have recently faced a natural disaster such as storm, flood, fire, insect etc, then opting for a farm loan makes perfect sense. Moreover, the USDA Farm Service Agency (FSA) runs a program that helps farmers get back on solid footing after any such natural disaster.


Whether you want to rebuild or need to carry out a lot of repairing work or are short on operation cost after a natural calamity, opting for a farm loan or FAS loan is the best option.


Covering Operation Cost

Operating a farm needs a lot of capital. Be it purchasing the seeds, fertilizers etc or paying your employees, an agriculture business like any other has a number of spending areas throughout the year. However, the seasonal nature of the business combined with its susceptibility to the whims of nature, can make it difficult for you to cover the operation cost sometimes.


Here, agri loan can come to your rescue. Most lenders, both traditional and online offer agriculture loan that you can spend to cover the operation cost of your farm.


Last Words..

Farming is different than other businesses and so are farm loans. So, while applying for a farm loan, there’s one special point that you need to keep in mind.


Farming is mostly seasonal. This means, your earnings come at yearly, half-yearly or seasonal basis; and not monthly. Therefore, looking for a loan that offers a flexible repayment option where you can pay only the interest together with a small portion of the loan amount on monthly basis and the larger sum at the end of the season (when you earn your revenue) is a great choice. Today, most traditional and online lenders offer agri loans with this kind of flexibility. Do your due diligence and you’ll be soon growing your farm!

Dial 1-888-897-9414 Now to Avail Low Interest Flexible Agri Loan Today!

Construction Business and Equipment Financing: Best Options You Have

Construction business financing

Funding a construction business is easier said than done. While you get paid only when the project is completed (that too, in instalments mostly), the expenses are no less from the day one. You need a number of heavy equipment which are quite costly, your workers need regular payments, you need to procure the materials and supplies; the list goes on! Moreover, there’s always the unexpected costs in the form of repairing or replacing equipment and much more. So, it is no wonder that financing is crucial for the success of new as well as seasoned businesses working in this domain.

However, after the collapse of housing market in 2007-2008, the construction lending scenario in general is not so hunky-dory. On one hand, the cost of complying to the industry regulations have increased as much as 30%; while on the other hand, traditional lenders such as banks are still pretty apprehensive when it comes to construction business financing.  

So, if you are disheartened thinking a construction business loan is your only option, cheer up! We’ve compiled some lesser known, but great nonetheless financing options with which you can cover most of your expenses.

Let’s take a look!


SBA Loan

This is often the go to option for small businesses. Guaranteed by the U.S. Government through the Small Business Association, SBA loans have relatively lower interest rate and better re-payment terms. Although the qualifying criteria for SBA loans is quite stringent and it takes somewhere around 90 days to get approval, the favourable interest rates more than make up for it!

As a construction business, there are two types of SBA loans that you can apply for. The 7(a) is a great option if you need funding for your existing construction business. As this loan can be used to refinance existing debt, buy equipment, purchase land, cover construction cost and repair existing capital, the 7(a) is the best option if you are looking at expanding your business or invest in a new project.

On the other hand, the CDC/504 loan aims at creating new business avenues and more employment opportunities. You can use the funding from CDC/504 loan to construct new facilities, purchase long-term machinery, purchase and develop land and so on. So, if you are starting a new business, this is the loan to apply for.

Remember, you need to fulfil some additional criteria, such as a qualifying net worth, annual income, a proven ‘good character’ etc to get your SBA loan approved. Here, the guidance of a qualified and experienced SBA loan expert can be a great asset!


Construction Equipment Financing

Well, this will definitely not cover the entire construction business financing. But, considering the fact that purchasing or leasing equipment is one of the greatest expenditure for construction businesses, this is a great option to explore. Whether you are a new business acquiring your first equipment or an existing one looking at replacing one or more of your heavy machinery, an equipment loan is the best way to lessen your financial burden.

Most traditional lenders such as banks offer equipment loans. However, if the qualifying criteria seem a bit strict or the approval time longer than you can wait, there are a number of alternate lending options available too.

Today there are a number of non-conventional lenders who offer various types of equipment loans, including construction equipment loan. Most of these lenders have relatively more flexible eligibility criteria compared to that of traditional lenders. Moreover, the approval time is often super quick in case of online lenders. So, if you are looking for fast funding for an essential equipment, applying with an online lender is a better choice.


Conventional Commercial Loan

A conventional commercial loan offers a lump sum amount of money with the re-payment period being one year minimum to 25 years maximum. You can use this money as the working capital for your construction business.

Generally, term loans as this has to be repaid with monthly instalments that include interest and capital. However, some lenders offer balloon loan facility, where you can pay smaller instalments monthly (which generally cover the interest only) and a large final payment in the end of the loan period. As a construction business, this repayment option is possibly a better choice for you. This way, you won’t be burdened to pay a hefty monthly instalment and can repay the greater part of the loan when your project is ready and sold, aka you get return on your investment.

While both traditional banks and online lenders offer commercial loan for various businesses, going for a lender who is offering maximum flexibility in terms of repayment makes most sense here.


Line of Credit

A line of credit is more like a credit card for your business, but with few more rules and lower interest rate. This type of loan offers you a credit limit for a particular period of time, for example, you can borrow $10,000 within 5 years from the start date of the loan. During this time period, you can borrow any amount up to $10,000 as and when you need it. Once you have borrowed a particular amount, you have to pay that back only. After the repayment is done, you can borrow again within the stipulated time period.

The best thing about a line of credit loan is, as long as you are good with paying the money back, you can borrow multiple times during the time period to meet your operational needs. Moreover, the interest rate of a line of credit is generally lower than other type of commercial loans, unless you default on repayment or exceed the credit limit.

Line of credit loan is a great idea if you are starting your construction business and want to have a ready funding option for running cost. The best way to utilize a line of credit loan is to acquire the loan before you need it!


Last words

To sum it up, conventional construction lending is not your only option. So, if you are looking at refunding your construction business or planning to start one, there are a number of funding options for you to explore. Seeking out expert guidance is the best way to go about it. And the good news is, today there are a number of online providers who not only offer you quick commercial loans in a hassle free manner, but also offer you the necessary guidance about which loan to apply for and how you need to prepare for it!


No two construction businesses are the same. Give us a call at 1-888-897-9414 now to get a quick and hassle-free business loan!



[How To] Prepare to Get Approval from the Best Business Lenders

how to prepare for loan application

Applying for a business loan is often an intimidating experience, especially for small or new business owners. While on one hand, you are eager to receive the funding that’ll help your business grow; on the other hand, you are cautious not to make a bad decision that’ll have adverse effects on your finances for years to come. Finding out the best business lenders is not the end of it too!

While online application has made the process easier for you, more preparation is needed still to get the approval done swiftly and smoothly. So, if you are looking for business funding for small business or a new one, here are some crucial steps you can take to ensure that your loan application gets approved by the best business lenders.


Step 1: Decide Where to Apply – The Quest to Find the Best Business Lenders

You have two major options here; apply with a local bank or apply online. Both options have their pros and cons. And, it is essential that you have your grounds covered before you make a decision.

So, let’s take a look!

Local Banks

These are traditional funding institutions. For ages, banks, both private and public, have been offering loans to every kind of businesses. While applying with a bank where you may already have an existing relationship can be a comforting idea, there are both sides of the coin.

Advantages of applying for a business loan with your local bank:

  • You have the opportunity of meeting the executives face-to-face.
  • The interest rates are often lower than online business loan providers.
  • You may leverage any existing relationship you have with the bank into getting a better offer. 

Disadvantages of applying for a business loan with your local bank:

  • Most banks have stringent approval criteria for business loans; so if you are a new business or have a not-so-ideal credit history, the chances of being turned down is high.
  • Banks generally take longer to complete the verification process; so the time-to-approval is often high.

Online Lenders

Today there are a number of reputed online lenders who can offer you business loans at competitive rate of interest. But, as mentioned earlier, there too are advantages and disadvantages. The best thing to do here is to make an informed choice.

 Advantages of applying for a business loan with an online lender:

  • Most reputed online lending platforms let you reach out to multiple lenders. This way your chances of approval goes up.
  • Generally online lenders have a fast forward loan approval process.
  • The application process is much easier compared to that of traditional banks.
  • In terms of loan approval most online lenders offer better flexibility over traditional banks. So, new businesses or even businesses with bad credits stand the chance of getting the funding they need.

Disadvantages of applying for a business loan with an online lender:

  • The interest rates of online lenders may be a tad higher than traditional banks. However, this depends on a lot of factors such as your credit history, the amount the funding you are looking for etc.


Step 2: Get Your Finance Documents in Order for a Smooth Verification Process

       When you are looking for a business loan for a small business or a mid-size one, getting your financial documents in order is essential. Lenders will verify and assess your repayment capacity based on these documents. Here are the documents and information regarding your financial condition that you need to keep handy.

       Tax Documents: Tax returns are the most authentic proof of income. So, keep your personal tax returns as well as the tax filing details of your business handy. This way, you can prove that you and your business is in a good position to repay the loan you are applying for.

       Credit Score: Credit score is the first thing that any business lender will check. When you are applying for a business loan, the credit score of your business will be under scrutiny. So, make sure to check it with all leading credit bureaus of your country when you are applying for a loan. In case your business is three years or less old, your personal credit score is of vital importance. While a great credit score is amazing for getting the loan approved, many online business lenders offer loans with average or low credit score too. 


Step 3: Create a Great Business Plan to Gain Trust

Submitting a business plan is a must for applying for a business loan from most traditional lenders. However, best business lenders online are quite flexible about it. Whether the lender you are approaching wants the business plan or not, submitting it nonetheless creates a lot of trust factor and credibility on your part.

Make sure to create the business plan in the most realistic and data-backed manner though!


Looking for a hassle free business loan with fast approval? Click the link below and get your business loan approved in the most hassle-free way, in hours! 


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