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3 Practical Tips that Small Businesses May Use to Reduce Their Operating Costs

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Business team in a meeting

Business team in a meetingThe major challenge facing small- and mid-sized businesses is securing capital. Lending institutions opt to provide financial assistance to already established businesses since there is a higher guarantee of repayment. The institutions often raise the interest rates in an aim to discourage small businesses from borrowing.

1. Floorspace Utilization

Acquiring an office within a major city costs more than having it on the backstreet end of a quiet town. Businesses hoping to occupy offices on busy streets must be willing to utilize the office spaces. There are several companies that rent out workspaces in NYC that such businesses may rely on. A business must occupy the smallest space possible while still maintaining efficiency around the office.

2. Efficient Use of Resources

With finances being a major challenge, the efficient use of available resources becomes the most practical solution. That means that a business may only purchase the required equipment. Any extra pieces of equipment may have a negative impact on other expenses such as rent and power bills. Examples include the sharing of scanners, printers, and photocopiers among people in the same department.

3. Outsourcing Functions

Small businesses may find it expensive to establish fully operational departments such as the finance and accounting departments. In such situations, they may opt to outsource various functions in an aim to reduce their operating costs. It may be cheaper to hire an accounting expert to come and reconcile all the books of accounts once every month as opposed to having a full accounting team on your payroll. The same applies to IT consultant services.

According to the product life-cycle model, a new product experiences low sales and growth rate in its introductory stage. Assuming that the product has been introduced by a new business, it means that its revenues are also low. As such, the only way of earning profits is by reducing costs.

Crucial Considerations When Buying a Second Home

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a houseAre you thinking of buying another home, perhaps as an investment or a vacation home? While buying another house has its benefits, it also comes with unique challenges. Bearing this in mind, there are some crucial considerations you need to take into account before even start shopping for a home. Here they are.

Make 100% Certain that You Could Comfortably Afford Two Home Loans

If you’re still not finished repaying your loan for your primary home, you have to ensure that you could afford monthly mortgage payments for your second home. Generally speaking, you would need to make a 10% or 20% down payment and go through the entire mortgage approval all over again so make sure you could handle that, explains a top mortgage lender in Tempe.

Work with a Local Real Estate Agent

Whether you’re looking to buy a house as your vacation home or rental property, working with a real estate agent familiar with the area you’re looking to buy a house in is immensely vital. Your agent could give accurate information on market prices, neighborhoods, as well as the benefit and drawbacks of certain properties.

What About Potential Tax Implications?

For instance, if you’re planning on using your second home as a real second home, you might be entitled to a deduction on your property taxes and mortgage interest, which are the same tax breaks you enjoy by owning your first house. Also, if you’re planning on renting out your second house, you’d need to consider the tax consequences especially if you want to rent out the house for more than 14 days in a year.

Don’t Forget About Extra Costs

If you’re going to utilize your second home as a real home or vacation home, you still need to consider that you probably won’t be staying in it for most of the time, so you need to factor in extra costs like utility bills and a property manager to check your home when you’re away. Likewise, if you want a house near the water, you’ll probably be required to have flood insurance coverage, on top of your standard home insurance.

Purchasing a second home could very exciting, but it could likewise be complicated and time-consuming. With proper planning, advance preparation, some forethought, and help from professionals, you could make a more informed decision that won’t put your finances in a tight spot.

3 Money Habits That Can Hurt Your Mortgage Application

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A Mortgage ApplicationWhen you are planning investments, making your budget or just spending it somewhere, it’s essential that you do every transaction with due diligence. Whether you are spending your money using your credit card or just taking cash out-of-pocket, Altius Mortgage Group notes that you must also think about how your spending habits can affect your future financial situation.

Remember, the way you handle your finances can either boost your chances or rather jeopardize your mortgage approval. Below, see some of the money habits that can hinder you from accessing a home loan.

1. Making late payments

Sometimes things can get out of hand pretty fast, only to find yourself in a bad financial situation. You will have no choice but to postpone your mortgage loan payments to your lender in Utah or elsewhere.

This is normal, and when you explain yourself to your lenders, most of them will understand. However, a repeated pattern of late payments raises a red flag to the lenders, and they will want to avoid such borrowers.

2. Maxing out your credit accounts

If you shop with credit cards, you need to be careful. If you use them and ensure the balances are paid in time, the better. The problem comes in when you use every credit up to the maximum limit only to make minimum payments every month. This can hurt your overall credit report and eventually affect your future borrowing.

3. Applying for more credit

There is no sense in opening so many credit accounts when you don’t even need the money. To the lenders, you are a business risk if you have too much debt in your name.

Also, another critical thing to mention is applying for a loan from every other lender after one rejects your application. This can significantly lower your credit score and eventually deny you access to investment funding such as mortgages.

The bottom line is that there is no need to apply for a loan when you don’t need the money. It doesn’t just rack up debt burdens for you, but might also affect your future investment opportunities.

How to Have a Successful 1031 Property Exchange

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property sales contractYou need all the help you can get to complete the highly complex process of a 1031 property exchange. Luckily, hiring a qualified intermediary ensures that you get the entire thing done quickly.

It may seem surprising, but the government has your best interest at heart when you’re investing in the real estate sector. Recognizing that the industry is cash intensive, the Internal Revenue Service created the section 1031 of the tax code. Under this section, an investor in commercial real estate properties can defer capital gains taxes after selling a property.

However, there’s a catch: you must reinvest the entire sales proceeds into buying another commercial property. If you’re eager to harness these benefits and grow your holdings in the sector, you can start by finding a 1031 qualified intermediary like 1031 Exchange Place.

Understand the Requirements

As with any other process in the sector, carrying out a 1031 property exchange is a complicated and tedious process. It involves plenty of paperwork and follows a closely monitored set of rules. One slight misstep can put a damper on the entire process, leaving you to nurse a hefty tax bill.

Rather than trying to wing it, you’ll get better results if you have qualified expert by your side. A successful property exchange is a two-step process. You will have to sell your current property holding and then make an offer on a like-kind property. You need all the help you can get to navigate these two highly complex processes.

Make the Tight Deadlines

The IRS has you on an incredibly short leash when undertaking a property exchange. You have precisely 180 calendar days to complete the transaction. Once you apply to take part in a trade, you have 45 calendar days to identify and present a replacement property.

You can have as many as three replacement properties as long as their total value is less than twice the current one. You then have the remaining 135 days to close the sale on the replacement property. Working with a credible expert, you can save time even when dealing with three different property owners.

Time is of the essence when looking to harness the benefits of a 1031 property exchange. Retaining the services of a credible intermediary ensures that you breeze through the complicated process.

1031 Property Exchange: A Gift That Keeps Giving

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Deed contract to a propertyGoing after 1031 properties in Nevada might just hold the key to making it big in the real estate sector. In the cash-intensive sector, you need all the help you can get, and the section 1031 of the Tax Code comes bearing gifts.

Under this section, you get to hang on to every cent you make in capital gains after selling commercial property. The only catch is that you must use the sales proceed to buy another commercial property of equal or greater value. The means that you don’t get to pocket a single dollar from the sale.

While that might seem like a disadvantage, the benefits more than make up for it. 1031 Exchange Place gives a few examples.

Greater Buying Power

If you are a high-income taxpayer, selling a property within a year of buying it saddles you with capital gains tax of up to 43.4 percent. Such a high rate is enough to make you pass on cashing in on the short-term gains. By making a 1031 property exchange, you get not only save the money but also invest it.

It means that you can buy bigger equity in the replacement property and access affordable financing when shopping for a mortgage. With a sound financial footing, you can acquire a prime property, which comes with a higher rental income.

Greater Investment Options

The property market is highly fluid and dynamic, and the key to success in the sector is being on the right side of the change. A property exchange helps you to always be on the money. It gives you the chance to diversify your holdings to lower investment risk and liquidate the unprofitable ones.

If the rental income in the residential sector is on the decline, you cash out of an apartment block and buy an office block. You can also buy part of a bigger complex in a lucrative cosmopolitan setting.

The section 1031 of the Tax Code is real investor’s best friend. With the proper strategy, you can harness the benefits it brings and grows your wealth and investment.

5 Ways to Strengthen Your Business Credit

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small business loan application with authorized stampAre you considering applying for a small business loan? Lenders are likely to check your credit history and a strong business credit score may increase your chances for approval.

To become more eligible for a small business loan in Ogden or any other place in Utah, you must build your credit in the following ways:

1. Boost Your Personal Credit Score

Your personal credit rating may influence your business credit rating. Pay your bills on time and maintain a low ratio of debt to credit on your credit lines and credit cards. The same goes for your business partner or major investor.

2. Operate Like a Business

Mixing your personal and business expenses won’t help your business profile and may hurt your personal credit. Consider incorporating the business as a limited liability company. Open business bank accounts and pay all business expenses with the company’s credit accounts.

3. Prove Your Company’s Credit Worthiness

Before they loan you a big amount of money, lenders may want to see your lending history. To build your profile, borrow small and pay on time. Work with suppliers and vendors on credit, use your business credit card, and apply for small bank loans. These lenders can serve as your credit references down the line.

4. Grow Your Credit and Use It

After establishing a payment history, increase your credit limit strategically. But remember to keep a favorable credit utilization ratio, preferably about 30 percent. Maxing out your credit cards shows that you’re unable to pay your bills.

5. Watch Your Credit Profile

Your business credit profile needs to be correct or else your building work will be in vain. Check the report for mistakes and raise any issue promptly. In addition, make sure the report is up to date.

Potential lenders may reject your business loan application if you don’t have a good business credit score. Luckily, there are ways to strengthen your business credit. Build your credit score and improve your odds of getting approved for an affordable small business loan.

SR-22: What Is It and What Does It Entail?

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Auto Insurance Policy and Car Key

Auto Insurance Policy and Car KeyIf you’ve never heard of SR-22, you’d easily confuse it for any other insurance document when you get an order to get one. You’re likely to be hesitant about going through the procedure, and that will cost you in the long run.

What is SR-22?

Although many people refer to SR-22 as car insurance, it’s not. However, it’s a certificate that you should get from a car insurance company for proving to state officials that you have insurance coverage, explains Aurora-based Oxford Auto Insurance. You also need to pay a certain amount to get the certificate.

When Do You Get SR-22 Certificates?

Usually, a judge orders you to get SR-22 certificates. The instances that lead to such judgments are when you’ve had a culpable conviction, such as driving under the influence, and the judge deprives you of your driving privileges. Other convictions that would lead you to get SR-22 certificates include getting multiple tickets within a short time, involvement in a car crash, or driving when your insurance policy has expired.

Processing SR-22 Certificates

You should contact the insurance company stating the facts that have led to you requiring SR-22 certificates. You’ll need to fill in the processing form, after which you’ll receive your certificate, which should take about a week to process.

Can You Get Insurance with SR-22 Certificates?

Different states have various requirements for obtaining insurance for anyone bearing SR-22 certificates. Therefore, if you need to get car insurance after you receive SR-22 certificates, you require considering the state in which you live. Also, while you can get insurance coverage for your car, you’re likely to pay higher rates as the company considers you a risky driver.SR-22s are valid for three years. You should ask the insurance company to eliminate it from your car insurance policies once the certificate expires. After SR-22 certificates are void, you can enjoy better car insurance rates.

3 Key Factors That Will Influence the Approval of Your Home Loan

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Woman Holding a Model House

Woman Holding a Model HouseAs you take on the challenge of homebuying you’ll realize that a lot of things are involved in the process. This includes finding a mortgage that would help finance your home. That’s why it’s important to understand how a home loan works to determine which program will work perfectly for you.

To do that, you need to know some of the basic factors that will influence your decision. To start off, listed below are the components you have to pay attention to.

1. Lender

In any type of loan, the lender plays a vital role in providing you with the money you need. That’s why it’s important that you get as much information about the lender to gain insight into the way they handle this type of transaction as well as the reputation they uphold in the industry. To find the best mortgage company in Utah, researching is your best ally. Make sure to do your own homework to gain enough information about it.

2. Credit Score

Many lenders refer to the borrower’s credit score to help them know how good of a payer you are. This is why it’s important that you fix and update your credit report before applying for a mortgage. One good way to improve your credit standing is by reducing the amount of debt you have and avoid making delayed payments.

3. Interest Rate

An interest rate is the payment you have to make on top of the principal amount you’ve borrowed. Lenders take this to compensate for the possible risks they might face right after loaning you the money. Now, interest rates may vary for each lender, which is why it’s important that you shop around to find out the best option for you. It doesn’t always follow that lower interest rate would be the most ideal to take, you still have to check and compare it with others to figure out the best for you to take.

Along with these variables, repayment terms and closing costs is another part of consideration you have to consider. With these things in mind, it’ll be easier for you to tell which mortgage will work best for you. If you’re confused or something is unclear, it’s best to ask the pro to help you understand these things.

It’s Time to Update Your Hotel Marketing Strategies

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Receptionist at hotel front deskCalifornia is home to dreamers who turn their unique ideas to the latest craze. You’ll see them on Instagram with thousands of followers, and they are literally the talk of the town. Even established hotels have to think outside the box if they don’t want to lose their edge.

It’s time to rethink your marketing ideas if you haven’t read the news lately. Do you think you need an update? These ideas will help kick things into gear.

Offer Royal Treatment

With the upcoming highly-anticipated wedding of Meghan Markle to Prince Harry, hotels are jumping on the opportunity to offer wedding packages that treat their guests like royalty.

Brides-to-be get the special treatment they will never forget, but for you to afford the facilities to match their requirements, you’ll need some renovations.

Fortunately, hotel business loans from institutions such as ARF Financial can help with the expenses you need to grow and prosper.

Give Gift Baskets

It’s not enough to leave basic toiletries for each room. You’re in the business of accommodating customers and giving them a night (or several) of comfort that they will associate with your hotel. To give a lasting impression, leave gift baskets in their room to welcome them, complete with a sincere note from management.

Add a personal touch by handwriting the note yourself. It only takes a couple of minutes, but it will be rewarding to see the smiles on their faces.

Have a Cafe

It’s one way to boost sales, and it’s also a way to make your hotel more competitive. Guests want a place that can offer them everything they want, and if you have a cafe to host their informal meetings or to help them unwind in the afternoon, you’re ticking more boxes on their checklist.

You don’t even have to do a complete renovation. You can convert an open space in the reception area with the addition of tables and chairs, and that’s it.

Running a successful business means adapting to change. For your business, that means going with timely marketing strategies when they matter.

4 Tips to Improve Your Personal Financial Security

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pig figure wearing glassesIn the world of personal finance, you can never be too confident. At one point, you may be riding high and earning a lot of money. But just a small decline in the economy can disrupt your momentum and could lead to financial troubles.

This is why any smart person should make sure he or she is financially secure to avoid losing or falling into turmoil. Here are four tips that can help you have better personal financial security.

Get a house

A real estate property is one of the smartest ways you can be financially secure. A home is among the first steps a family can do to build wealth. The purchase of a house benefits a homeowner and their family in the end as it gives them more leverage and buying power.

In difficult times, they can also decide to sell off the house. But for now, what a person has to do is to take on a home loan. Look for companies that offer home loans in Ogden such as Wasatch Peaks Credit Union.

Start investing in college

When it comes to investing, starting early is an important rule. If you can, start in college as it is when that you can start a little money.

Have random assessments of your portfolio

In an increasingly volatile investment climate, it is essential for people to always reassess their portfolio. What works in one month may no longer be effective in six months. This is why you should always look out for major changes.

Diversify your investments

Spread around your investments. This will lessen the financial risks of these investments.

A person who is financially secure is more likely to survive a major financial problem successfully. With an erratic world economy, this should be the priority of anyone who has a lot of investments.