Last-Minute Expenses to Reduce Tax Using Business Loans
December is not only a time when holiday decorations are being hung on trees and doors at home. At work, this is the time of the year when most business people are reviewing their trial profit and loss balances and income statements. It’s a good problem to have yet many business owners across America will be shocked by the amount of tax to be paid in April 2016 (or October 2016, if an extension is applied for by your accountant).
A question that runs through the minds of these business people is “What last minute expenses can the business incur to reduce taxable income?” The answer may not appear obvious at first, yet taking out a small business loan is a common strategy used by business to reduce taxable income.
It may appear less obvious yet sometimes in business, it is necessary to spend money to save money. With December 31 only 2 weeks away, there is still time to apply for a business loan, have the application approved, receive the funds and complete legitimate business purchases and be eligible to claim these as expenses within the 2015 financial calendar year.
Where traditional lenders, such as banks and credit unions, can take months to process business loan applications, United Capital Source can help you complete your application and have an answer within 1
Our Executive Vice President Jon Baum, recently addressed a group of small businesses at a workshop held in our New York office noting that the most common use of small business loans underwritten in November and December each year are used for purchasing inventory.
Loans from as low as $5,000 up to $500,000 can be secured in 3 to 5 business days, allowing your business to acquire end of year sale inventory. Retailers buying wholesale product can benefit from year end sales and clearance events. Wholesalers buying from manufacturers are able to increase the order quantity and pay a proportion up front for greater discounts.
In December 2015, one of our clients received a $40,000 small business loan to purchase two new lines of furniture from China, taking advantage of the strong US dollar Vs Chinese Yuan exchange rate. Providing this equipment furniture wholesaler with additional funding has allowed our client to act wisely in business to extend their range of 2016 furniture while paying for the furniture in advance at beneficial exchange rates.
In November, an upstate New York liquor store chain was able to stock an exclusive range of scotch whisky and specialty cigars following a $15,000 business loan, taking advantage of a special promotion being offered by an international liquor distributor who had surplus stock in their warehouses.
On December 3, an existing United Capital Source customer took out another 6 month small business loan for $20,000. They were able to purchase an excess number of Christmas trees that were on discount, allowing for a larger Christmas sale promotion to be launched.
How to Apply for Business Funding?
To apply for business funding, we require a simple 1 page application form to be completed which importantly includes:
– 3 Trade References
– Requested Amount for Business Loan
– Average Credit Card Volume
– Merchant ID Numbers for Credit Cards
– Terminal/ POS Systems used
It takes only 10 to 15 minutes to complete the small business loan application form. It really is 1 page and can be accompanied with 3 months of bank statements.
United Capital Source not only provides the business funding to lower your business taxable income by providing more expenses to be accumulated, but also the knowledge and insights on how businesses across many industries operate more tax efficiently.
While online business funding platforms promise faster application processing, the consultative approach offered by our on staff loan managers provides high value to our business clients. Our experienced team listens to your business objectives, asks intelligent questions and discusses your monthly cashflows as well as bank deposits and understands your business growth trajectory.
The phone call is very friendly, non intrusive and completely complimentary. Our consultative approach provides business owners with the opportunity to think clearly about funding their businesses. We understand that with the pressures of running your business, it can be very difficult to find time and think about and apply for a business loan. The time on the telephone with our funding managers will give you that dedicated time to think about how to lower your taxable income and acquire a competitive advantage in buying inventory before the end of the calendar year.