Author: LoanOne

5 Ways To Pay Your Personal Loan Off Quicker

Pay Off Personal Loan Quicker

Being debt-free is one of those things many people want to be, but most of the time people don’t get there for one reason or another. Paying your personal loan quicker will help you become debt free and you then have the chance of saving or spending the money in other areas of your life. It is important to have a good plan if you want to pay off your personal loan quick, or else you end up making payments and not seeing any improvement in your financial situation. Below is 5 ways you can use to pay off your personal loan quickly.

Make Bi-weekly payments

If you have a loan and are required to pay every month, consider submitting half the payments to the lender every two weeks instead of doing it once a month. This will help you in a number of ways. The payments will be applied more often, and this means you will accumulate less interest. Before you can start doing this, talk to your lender. There are some that penalise people who make extra payments or try to pay back their loan balance earlier.

Rounding Up the payments

Rounding up the payment can be a good way of paying extra without having to miss the funds. You will be surprised to find out you have knocked a couple of months off your loan. If you were to make a payment of $258, then consider rounding it off to $300. After a year, you might end up paying two months’ worth of payments without having to put in a lot of effort. You can even pay an extra $100. This will also end up saving you a lot in interest, and it is also going to shorten the term of the loan.

Finding extra money

Try making extra money then use it for paying down your loan. Although the amount might seem small, the money will add up. You can earn extra money by taking a part-time job on the side. If you manage to earn $100 dollars a month from your side hustle, you will end up making an extra payment of $1200 at the end of the year.

Making one extra payment

If you are not able to pay for the loan twice a month, you should consider making an extra payment after a couple of months. The money you get as a bonus or tax refund can be used to pay down your loan faster. This doesn’t seem like much, but it will go a long way in helping you pay off the loan faster.

Lender programs for paying off debt

There are some lenders that will have options to help you pay your loan quicker. There are some programs that will force you to pay additional fees, so find out before you enrol in one. If you see the fees and think it is worth it, then go ahead and pay. If you don’t like the fees, you can look for other ways of paying extra while you avoid the fees.

If you’re looking for a flexible personal loan from a trusted non-bank lender look no further than LoanONE.

Visit our application page and see if you qualify today.

Additional Reading:

The Difference Between Good and Bad Debt
4 Simple Ways To Repay A Personal Loan Sooner
How To Put Debt To Work For Your Business
Case For Borrowing Money Instead
8 Mistakes You Should Avoid When You Get A Small Business Loan

Key Things to Consider When Starting an Earthmoving Business


Being the boss of a company and actually dealing with the business activities to make a business successful are two totally different things. If you are one of those who has religiously studied the earthmoving industry for any type of related product or service, made a full-proof business plan and then followed those steps one by one, do you think it’s best to own or lease your equipment to make your business successful?

There are several benefits of having your own earthmoving equipment business. Then there is the equipment itself. One of the more economical options when it comes to acquiring equipment is opting for a lease. Leasing the earthmoving equipment may seem to be a costly move initially; however, it will help you to continue servicing the customers until your business is up and running. In fact, it will allow you to also stay a step ahead as far as advanced technology is concerned.

An earthmoving business will have a high startup cost, especially when you have to pay for equipment and staffing but it has the potential to provide a good income over the long run. However, you need to have a good marketing strategy to get a loan if you plan to buy the equipment. If you choose to take an equipment loan to help you purchase or rent the required equipment, you may find this difficult. Those who have a low capital to start with may have no choice but to rent or lease the equipment, at least until the business gets settled.

ALSO READ: How To Get A Business Loan Fast



Ideally, you should register the business first before getting the insurance. You will need to get some general insurance for the business. It will help to protect the business and the representatives from any financial harm. Try to get in touch with an insurance company that will provide bundle protection facilities.


Get equipment

The equipment that you choose will depend on the type of business activities you are involved in. There are machines like the excavator that is used for burrowing; catch that grabs objects; bulldozers that help to bury huge amounts of soil; cranes that are used for lifting heavy weights; another excavator that scoops the soil; boring machine that makes openings; heap driver that heaps the soil in the dirt; feller bunchers that cut down trees. Some of the other equipment and machines used are passage exhausting machines and street rollers.


Find Equipment Finance

You have to know the industry thoroughly if you want to secure a loan for your earthmoving company. Your company will have to take care of the materials, labour, and various incidentals before the project starts however, you will not receive full payment unless the project is complete. This is one of the reasons why most earthmoving companies require proper funding. In fact, this industry is reliant on an active economy; there are no stable revenues for an earthmoving company even though you may work project after project. That is why many lenders prefer not to provide loans to earthmoving companies.


What’s the inexpensive way of getting equipment to the business to allow the company to earn off of that asset?

Your entry into this business will depend on the type of products or services and the respective amount that you will be able to invest. This is another reason why smaller companies are not able to manage enough funds. It will be best if you calculate your assets and liabilities first. If the lender finds you eligible for an equipment loan, this means you will be able to actually own the asset after the payment period is over. However, you will have to maintain the equipment regularly at your own cost. Most business owners prefer to lease the equipment because of the ever-growing technology. Leasing the equipment is almost the same as any term loan but it has various tax benefits. You have to make sure that the lease period is the same as the life period of the equipment.

After you have managed the funding process, you will have to deal with the license and special permits of the equipment. Every small business owner should make sure that these formalities are taken care of before starting any business.

ALSO READ: Everything That You Need To Know About Starting A Coffee Shop

How To Start A Retail Store – Key Factors To Consider

opening a retail store

There is more to starting a retail store than just opening up a shop. You not only need to plan well but also create a budget enough to sustain the business for some time before it starts generating some income. However, you need to understand all the costs involved in starting as well as running the store to give yourself the best chance in the industry. Some of the expenses you need to be aware of when starting a retail business are discussed below.

business location1. Location
You need to identify a prime spot to set up your retail store. Look for a site with plenty of regular customers and lots of foot traffic. Finding such a place, and securing it, comes at a price. It would therefore be advisable to assess the area first to have an idea of what to expect, or is expected of you. Factors such as rent, deposit, and goodwill should be considered when shopping for the location. You can however, choose to run an online store instead. In this case, you will want to consider hosting, production, and other costs that come with running an online store.

2. Rent
In addition to upfront costs (repairs and such), you will still need to take monthly rent into consideration. Rent is often calculated based on the physical location and square meterage. Spaces in high traffic and popular areas naturally tend to attract higher amounts of rent compared to low traffic areas.

3. Utilities
These are the additional costs that come with running the business. This includes electricity costs, gas, travelling costs, and the size of the shopfront. Exploring various options with utility providers in the area can however help you choose an affordable one. Some window-shopping is also required to identify as well as determine the best rate for the area.

4. Insurance
You still need to factor in business insurance in the start-up cost. Although it may seem like an unnecessary expense, insurance is required primarily to cover unforeseen circumstances and issues. You need to find a policy covering business income, property, liabilities, crime, product or public liability, etc. Employees too will need a workers insurance cover as well.

5. Inventory
It is vital to take into consideration the required capital and cost of storing inventory into consideration when developing your budget. It is after determining the initial inventory costs that you can then focus on monthly inventory costs after that.

6. Merchandising Equipment
Think about the products that you will be selling, and how they will be put on display in the store. Consider the best options for keeping these items on display. Some of the merchandising equipment you may need include mannequins, hangers, display cases, or even shelves. With the display equipment sorted, think of labelling and how it will be done. This should also include price tags – something simple but something people often forget about. Having an idea of what merchandising equipment you will need should help you determine an approximate budget.

7. Employee Costs
Depending on the size of the retail store, you will need one or two support staff to help run the store effectively. The employees will, therefore, require a salary, wages, and other benefits that need to be budgeted for as well. You might also want to factor in other costs such as employee training, payroll processing, and how timecards will be managed.

8. Marketing
You will also need to put the word out to target audiences and customers to attract customers. Marketing and advertising are some of the most overlooked factors in running a retail store. To get a fair market share of the cake, you might want to have someone advertise and promote your business. It would, therefore, be advisable to consider the cost of producing business cards, a business logo, and even a website for the store. Consider creating a marketing campaign that will get your business known too.

9. Funding
apply for small business loansOnce done computing start-up costs, you can then focus on creating a business plan, which you can use to seek financing. Although there are several ways to explore to get funding, a business loan may be the most viable option at the moment. Several factors have to be considered before applying for the loan. Some of these include:

  • Total amount to be repaid
  • Ease of repayment
  • Convenience and ease of application and processing
  • The lender’s reputation and dependability

Take some time to understand the various types of business loans, and identify the best one for your case. While the application process may be tedious and time-consuming, it is advisable to keep the paperwork organized at all times. Business loans can take a few days or even weeks to be processed. Practise some patience during this time.

Do not depend on the loan alone for funding. Look out for other funding methods such as grants. Various activities such as development, research, innovation, and trade may help you get funding from sponsors. Other forms of financing can come through mentoring, networking, disaster relief, and education. Be sure to explore any viable option and try your luck.

ALSO READ: Everything That You Need To Know About Starting A Coffee Shop

How To Finance A Cleaning Service Franchise

guide to starting a cleaning business

An analysis conducted by Franchise Help found out that in 2015, the cleaning industry generated over $50 billion in revenue, and that there were nearly 900,000 businesses in the industry employing 3.5 million people. Clearly, this is an in-demand industry with both businesses and individuals willing to pay top dollar for these services.

So, if you’re looking to start your own business or buy into a franchise, the cleaning industry may be the perfect chance to start off your journey and set your own schedule.


What are the available options for financing my cleaning business?

Cleaning service companies, unlike many other franchise options, tend to have significantly lower starting costs compared to other industries. This ideally makes it easier for business owners to acquire the necessary funding and liquid capital to start their business.

Franchisor financing: some companies do provide financing to budding franchisees. In that case, if there are financing options for the cleaning services you’re looking to franchise, it’s advisable to explore all of them. Keep in mind that there are companies that give great discounts to veterans and minorities, and you don’t have to shy away from talking to your franchisor about reduced rates.

Term Loan: Term loans typically have secured and unsecured options. You’ll have to decide whether you want to put up collateral to receive funding. Some of the franchise business loans let you borrow against the value of the company that you’re looking to buy into, and you can acquire about 50% to 70% of the value of the business.

SBA Loan: SBA loans are usually backed by the government. Although they are generally tough to qualify for, they often come with lower rates compared to similar loans from banks and other financial institutions.

Vehicle Loan: In some cases, the franchisor might not be able to cover the van you need to transport your equipment and staff to work sites. In such a case, a business vehicle loan will be more appropriate. Just like a personal auto loan, your vehicle acts as the collateral.

Equipment loan: There are lots of cleaning franchises that offer basic amenities and equipment to start you off when opening the business. However, if you’re expecting rapid growth in the near future, you may need an equipment loan to acquire anything from a series of high-powered vacuums to an industrial carpet cleaner. The equipment you purchase will act as collateral.

Line of credit: an open line of credit is able to help your business cover the different random expenses that you might have missed in your initial research. A line of credit is quite comparable to a term loan, however, instead of getting a lump sum amount and repaying its interest, you only have to repay interest on the actual amount you’ve borrowed.


What are the costs to consider?

Most franchises in the cleaning industry do have an ongoing fee structure that you have to pay for you to keep your licensing and operate your business. In exchange for the right to use the brand name and business structure of the franchise, you’ll have to pay some ongoing fees to the franchisor to become a part of the franchise group.

In most franchise industries, the ongoing fees are calculated as a given per cent of the gross income, and the fees can range from 2% to 15%. In the cleaning industry, franchises are often quoted a fixed monthly charge, which essentially gives the franchises an incentive to increase their customer base and income without having to pay the correspondingly high fees.

Along with the price of having a franchise, you will also need to account for the regular costs of running a business, including:

Staff wages: labour won’t come cheap, especially in an industry that relies on picking up other people’s messes. So, to keep things running smoothly, you need to have a budget that lets you offer competitive income to your employees, which gives them a reason to do their job well and stick with you.

Administrative support: regardless of the size of your staff, you will most likely require a team for administrative support to tackle things like bookkeeping, invoicing, appointments, and other administrative duties.

Equipment servicing: although some cleaning franchises provide you with the initial equipment required to perform the cleaning tasks, you’ll still need to service and maintain the equipment, at your own expense.

Rent: if your cleaning franchise requires you to have a physical storefront or office, rent is one of the more significant expenses you’ll have to consider. The amount you pay every month will depend on your location and the amount of space you need for your operations.

Consumables: when you first purchase your cleaning service franchise, you will receive a supply of uniforms, cleaning products, stationery, and other business consumables. However, you’ll most likely have to replenish these supplies by yourself regularly.


Independent cleaning business vs. cleaning franchise

Before you even start looking for franchises and finding loans, you need to know the kind of business you want to start. This means you will need to consider whether or not you want to build a new business from scratch or pursue a franchise. From there, you can then browse your options.

Cleaning franchise: there are many companies across Australia that specialise in residential or commercial cleaning. Just like other franchise options, you can choose to buy into one for a given fee, and use the brand and their marketing tools to create demand for your services.

Independent cleaning business: for those who already know the ins and outs of running a business and are familiar with how the cleaning industry generally works, starting your own business is a compelling option. It ideally gives you the freedom of doing whatever you want, although you will still have to compete with the already established brands that service your area.


Tips for Starting your Own Independent Cleaning Business

opening a cleaning business tips

Although you should explore your options and consult professionals who have already run their own cleaning business, the following tips should help you get started with your own company.

Draft your business plan: A business plan is the first step to any successful business endeavour. It helps you outline what you have to do to set yourself apart from the competition and come up with a set of goals to take you there.

Registering your business: now that you have a solid business plan, the next step is putting your hard work into action. Of course, you want to formally register your business and have it properly registered and licensed. File for insurance to cover you in case something is stolen, lost, or broken, while on a clients premises.

Determine what you’re going to charge: a vital part of your initial research is the amount of money cleaning businesses charge per hour. Here, you want to set your fees competitively.

Build your client list: once your business is properly registered and you know how much you want to charge, start building your client list. Send out fliers, contact local businesses, and post on job boards. You don’t have to purchase any supplies until you get your first client. After all, things might not always go as planned, and you don’t want the hassle of excess supplies lying around.

Work hard: clean with care, build your website and social media pages, and take your time to build a rapport with your customers. The secret to success is doing your job well, and if you can successfully set yourself apart from other cleaning services in your area, you can easily find yourself running a top-notch business.


How Lenders Determine Approval

Lenders typically weigh out the strength of your business model against some other factors like the market demand and your personal credit score. Financial institutions and banks tend to view franchises a bit more favourably than independent start-ups, primarily due to the proven business models. Nonetheless, this doesn’t mean that you won’t find financing for your own company.

The kind of loan you request will also be a key determinant. A loan that has an in-built collateral tends to attract more lenders compared to one with more risk, such as a line of credit or an unsecured loan.

Your personal financial history will also influence the lender’s decision as well. Your background in the industry, credit score, and your business plan will ideally show lenders that you know how to handle yourself under stress and to successfully run a business. Whether you are starting your own company or buying into a franchise, lenders want to see that you know what you’re doing, and that you have a history of successful management.

It’s wise to shop around to find a lender that specialises or one that’s looking to invest in an independent cleaning business or franchise.


How Profitable Are Cleaning Companies?

The profitability of your cleaning business will depend on its size, the type of clientele you attract, and your local market. Cleaning businesses tend to have stable business models, and the income-generating opportunities and the revenues are unlikely to fluctuate substantially.

Unlike many other franchise businesses, if you choose to invest in a cleaning service franchise, you might have to do some of the work yourself, whether it’s taking on cleaning tasks or managing the office. This will reduce the need for hiring extra staff, and could mean more profits. Nonetheless, it could make the business more hands-on than you may have hoped.

This still holds for small start-ups. You’ll have to do much of the initial work, but for the huge part, the profits will be yours. The profitability of your business will also depend on the hours you’re willing to put in. With a good attitude and culture, you can make a decent income running a cleaning business.

Businesses usually pay more for cleaning services than the individual households will. However, a commercial cleaning company will need to hire more staff. Ensure that your business model reflects this, and see how much you can expect from a residential vs. commercial service.


Bottom line

Whether you choose to purchase a cleaning company franchise or start off on your own, don’t forget that your initial investment has to reflect the overall goals of your business. Plan for expansion and seek financing that suits your business in both the short- and long-run.

How Do You Start A New Restaurant?

opening a restaurant guide

Opening a new restaurant may seem a daunting task to many of us. In fact, there are so many important factors to consider when doing so – such as choosing the best location for the business, financing the project, selecting the right name, buying equipment, and hiring staff. This article highlights some important tips to consider when starting a new restaurant.


Deciding on the Type of Restaurant, Location, and Name

What type of restaurant are you planning to establish? This is the first thing to consider when opening a new restaurant. Is it going to be a high-end fine dining project or a 1950’s style restaurant? Do you have a specific type of cuisine in mind – such as French, Indian, or Italian? On the other hand, you may prefer a pub or microbrewery to a traditional restaurant. In fact, you should first define the type of restaurant you plan to establish before you decide to move on with the project.’


Location is Everything

Your location can make or break the restaurant project. That is why it is important that you do the homework before you go out and sign the lease for the location. You should choose a location in a busy area with plenty of foot traffic. Make sure that there is enough parking space when choosing the best location for your restaurant. What about the competition for your type of restaurant? These are important things to check before you go ahead with the project.

The most important part of opening a new restaurant is selecting the name for your restaurant. It may be a family name or even a name that reflects on the location and theme you choose. For example, Highlands and Broadway Diner are two such names.

ALSO READ: Everything That You Need To Know About Starting A Coffee Shop


The Business Plan

A business plan is important for many reasons. Two of the most important reasons are – it helps you to see potential problems in the project, and it is impossible to get financing without such a plan.

Financing is one of the main obstacles that keep people from starting their own restaurant. It is difficult to get financing for a restaurant since they have a high failure rate compared to most other businesses. However, it is not impossible with the right business plan. There are many banks, private investors, and small business agencies that offer finance for such projects. You should make sure you show up to your interview professionally and prepared with a successful business plan. In fact, you should be able to show your investors that you have thought about all the mechanics of opening and running a restaurant successfully.

KNOW MORE: Easy Application Business Loans from LoanOne

It may take several weeks or months to get the license and permits to operate a restaurant. Once you have the financing issue sorted out, it is important that you start filling out the paperwork for the necessary permits. Here are some of the common permits and licenses to operate a restaurant – signage permits, liquor licenses, workers compensation insurance, and permits for outdoor space.


Designing the Restaurant

restaurant design

The most important thing to remember is that you will never have as much space as you initially thought when you plan to design the restaurant. In fact, the space will quickly fill up when you start adding walk-in refrigerators, commercial kitchens, restrooms, bars, and the waiting area. You will need to make sure that the design is a balance between seating capacity and aesthetics. Make sure to keep practicality in mind when designing the restaurant. The right colour is important to establish a strong brand. It will also help establish a welcoming ambience for the customers.


Staff, Menus, and Equipment

The restaurant menu should be descriptive, clear, and easy to read. Make sure that you use a fancy font and high-quality paper for the menu.

Once the design is taken care of, you can start buying commercial kitchen equipment and the required furnishing for the project. Buy used equipment from a reliable source to save money at the start. Commercial equipment with an Energy Star rating might be initially expensive but will pay for itself many times over in the long run. It is also good for the environment.

The next step is to hire the right staff for the kitchen and floor. Make sure you hire the ideal person for each position. Test-taste the food of the chef you plan to hire. Don’t forget to hire experienced staff for all positions.



Advertising is important for a new restaurant. Online advertising is quite effective and affordable compared to traditional methods such as newspaper and radio. In fact, an aesthetically-pleasing website can definitely entice diners to your new restaurant.

Everything That You Need To Know About Starting A Coffee Shop

Bold entrepreneurs always keep their eyes open for the next profitable opportunity that will springboard their bank accounts into millions of dollars.

Hospitality is among one of those opportunities and is one of the most profitable industries that you will find. It is a win-it-all-or-go-home, high stakes venture that can be extremely rewarding and profitable. It may just be possible for you to hit pay dirt and launch the next big cafe or restaurant in your local neighbourhood.

Within the food industry, a coffee shop may be a profitable and comfortable start-up that can attract a number of potential investors. Another benefit is how fast you can get a cafe up and running; you just need to have a prime location, great espresso machine, an experienced barista, and the right attitude.

This article is a guide on how to open a coffee shop of your own. We will whet your appetite by discussing all of the benefits that this type of endeavour provides, and then talk about what you need to do in order to get started with this type of business.


Benefits To Opening A Coffee Shop

1. High profit margin

Think about how Starbucks got started back in the dreary days in Seattle. The coffee empire got its start as a small business that a few friends who were passionate about coffee owned.

There is a very good reason for its incredible success: the number one export from Colombia has one of the biggest possible profit margins. There are hundreds of accounts of young individuals who have made investments into the bean industry and been able to earn huge profits within a few months.

Coffee shops are potentially great rags-to-riches stories. Profit margins are one of the most significant aspects when it comes to growing a successful business. However, there are other important factors as well.

2. Be your own boss

coffee shop entrepreneur

When you own a business of your very own, you aren’t stuck on the treadmill of a nine-to-five job any longer. You are able to set your own schedule, and are compensated based on the value you add, rather than getting a fixed salary. So, the harder that you work, the higher profits you can earn.

Of course, it can take tons of hard work to get a hospitality business started, but you are able to make your own rules, unlike when you work in a cubicle.

3. Express your creativity

When you own something unique and new it will help you get your own environment created that reflects your personality. Decorate your coffee shop however you want. Give your drinks creative names, and tap into all different kinds of things like your favourite movies or bands.

4. Expansion

Coffee shops that are successful have the ability to spread over the entire country. For example, Toby’s Estate, an Impos client, started out in Woolloomooloo, Sydney from his Mum’s garage before opening his very first Toby’s Estate cafe in 2001.

Since that time, the successful cafe empire has gone from one strength to the next and has now opened cafes all across Australia. Toby’s Estate even operates cafes in New York and Singapore now as well.


How Much Money Does Opening a Coffee Shop Cost?

One key ingredient when you are trying to open a successful coffee shop is getting a concept developed based on your planning and research.

In order to get a brand created that stands out from the rest of the crowd and offers something new, you must combine deep creativity with solid planning. It is critical to not get a coffee shop started without thinking through all of the key issues first.

There are two main financial questions that hospitality entrepreneurs think of when considering spending their money on a new venture. What is the cost? And what is my return?

When it comes to the coffee industry, it is fairly easy answering the first question while the second one is at best speculative and subjective.

It is estimated by consultant Matt Milletto that a new coffeehouse can cost from $150,000 up to $500,000. A coffee cart, in comparison, may cost from $5,000 up to $20,000.

Let’s break the figures down to see precisely where you will be spending your money. Generally speaking, your initial budget needs to at least take into account the following distinct checkpoints, since each is as important and critical as the others.

Real estate

This includes everything that concerns the space you are going to use for your shop. It not only involves your ongoing rent, insurance, utilities and maintenance, but also design and construction costs. As a general rule of thumb, rent should be 15% or less of your projected sales.


There is usually tons of red tape that has to be sorted out before your cafe can be opened. There is a price tag that comes with every metre worth of government oversight, such as compliance fees, licensing, legal fees, lawyers, etc. Although those costs vary according to location, you need to be aware of them at least before you get started.


coffee shop equipment - commercial loan

High-quality semi-automatic espresso machines will cost you about $2,000 – $5,000 a piece, while super-automatic espresso machines cost $5,000 up to $20,000 each. And that is only your espresso machines.

You still will need to purchase point-of-sale equipment, refrigerators, blenders, restaurant equipment (stools, chairs, tables, etc.), cooking equipment, grinders, and hundreds of various other items that definitely add to your total start-up cost.

Daily supplies

There will also be a good amount of disposables that you will also need to consider. You will more than likely be using pastries, muffins, fruit, sugar, beans, cream, dishwashing liquid, paper cups, and more every day. Those will be recurring monthly costs that will need to be accounted for.

Marketing costs

When your cafe is first opened you will need to come up with creative ways of letting people know about your new business. There are many options to choose from, including attending local events, printing flyers, social media ads, and many other options.

Tax and Payroll Costs

The government needs to be paid. Your employees need to be paid. If they are not, neither group is going to be happy.


You need to have extra cash on hand to cover any extra costs from your initial plan. After your airtight budget is finished, add on 20% more at least; that will be your rainy day fund.

Determining Your Profit Margin

The moment of truth has come. After all of your hard work, how much profit are going to bring in? As previously stated, that question is a rather subjective one. Three elements need to be taken in account to calculate your estimated profit margin.


Coffee has a higher markup compared to a majority of food items. Only craft beer rivals it in terms of markup. It costs less than one dollar to make the average cup of coffee, but usually will sell for about $3.50. Other menu items will have profit margins that are much smaller. Coffee sales should comprise 25% to 35% of your gross sales.


Location, location, location, is a saying in business that has turned into an axiom for success. Prime real estate is the defining characteristic between a successful coffee shop and one that fails.

According to Steve Fisenko, a coffee expert, a store that is well managed in a financial district can potentially earn a $500,000 gross annual income during its initial 2 years. That same well managed cafe in its third year may net more than one million dollars.

It is possible, of course, for a coffee shop to not earn a profit. However, as long as you conduct your research, make your plans accordingly, and then get an outstanding team in place, you can keep your shop profitable quite easily.

ALSO READ: Fundamental Facts About Loans For Small Businesses



Opening up your own coffee shop can energise you in many ways beyond what you can get from a cup of coffee. You have the opportunity to start something that really matters, and can turn into a central hub for your community.

You also have the change to make a good income.

It is a win-win situation.

Calculate Your Working Capital the Right Way

Working Capital | LoanOne

Many small business owners have a difficult time understanding different financial concepts – not the least of which is working capital. What’s tricky is that it can have different meanings depending on the person you ask. You have read or heard that calculating your working capital only requires subtracting your current liabilities from your current assets.

However, more often that not, things prove more complex than that. You need to have a full understanding of working capital and the different factors that influence it if you want to get to the right number.

Experts suggest using the operating cycle as a tool for calculating your working capital. The operating cycle involves analysing the accounts receivable, accounts payable, and inventory in terms of days.

Simply put, the analysis of accounts receivable is done using the average number of days required to collect an account.

Inventory needs to be analysed by the average number of days needed to turn over product sales, from the moment your products come in your door to the moment they turn into cash. Accounts payable must be analysed based on the average number of days needed to pay your suppliers.

In most cases, businesses cannot use accounts payable alone to finance their operating cycle. This means that finance is required to boost your working capital requirements. Most businesses cover this gap by internally generated profits, externally borrowed money, or a combination of both.

You will find that at one point or another your business requires short-term working capital. A prime example is when retailers need working capital to purchase seasonal inventory between the months of September through November in preparation for the holiday sales.

However, even if your business isn’t engaged with seasonal products, you may notice that some months see higher sales than others, meaning you need to maintain your inventory. The build up in inventory and accounts receivable needs to be covered by coming up with enough working capital.

Some small business owners prepare for this event by increasing their cash reserves. For a new business, however, this can prove very challenging. If you have a small business that needs short-term working capital, you should know that you can get funding from several sources.

What’s important is that you know how to plan well ahead of time. Failing to do so means missing out on sales opportunities, especially huge orders that could provide your business with enough money to get over the hump.

Funding Sources

The following are five short-term working capital funding sources you should consider:


If you have a new business that hasn’t reached profitability yet, then you should look into equity funds for your short-term working capital needs. This proves the most accessible option for small businesses owners because it can come from your personal resources or those from family members, friends, or third-party investors.

Trade Creditors

Establishing a good working relationship with trade creditors should be a priority for all business owners as it comes in handy when trying to source funds for working capital requirements. If you have shown responsibility and punctuality in paying in the past, there’s a good chance that a trade creditor will accommodate extended terms so you can complete a big order. If the supplier provides 30-day terms, then you may ask to extend it to 60 days if you have a huge order coming up which you can fulfill within this period. Usually, the trade creditor asks for proof of the order and may even consider filing a lien, but this shouldn’t be a problem if it will enable you to proceed with the transaction.


This is something not many small business owners know about. A factoring company can help with your working capital needs by buying your accounts receivable and handling the collection after you fill an order. Some business owners shy away from this method because it’s more expensive compared to traditional financing options from banks, but it can be just what you need to ensure there are no halts in your operations.

Line of Credit

Banks don’t normally give credit lines to new businesses. However, with enough capitalisation through equity or security in the form of a collateral, your business might just get approved for one. What’s great about a credit line is that it enables you to borrow money to cover your short-term needs anytime they arise. After collecting the accounts receivable, you must pay the funds. To make sure that the funds are only used for short-term needs, credit lines do not usually last longer than one year and need to be paid for 30 to 60 consecutive days.

Short-term Loans

If you haven’t had any luck with credit lines from the bank, try asking for a short-term loan to get enough funding for your working capital needs. This is where your relationship with a bank manager comes into play. The manager might agree to give you a one-time short-term loan to cover your seasonal inventory or accounts receivable buildup.

Other than calculating the average number of days required to make a product and collect an account vs the average number of days needed to finance your accounts payable, analysing the operating cycle provides another important analysis.

It’s high time that you have a thorough understanding of the impact of working capital on the cash flow of your business. You may not realise it right away, but it can spell the difference between a successful business and one that’s bound to fail before it even begins.



The Difference Between Good and Bad Debt

Good VS Bad Credit | LoanOne

Just put it on your card

It’s now a very common practice for entrepreneurs in Australia and other parts of the world to use credit cards to finance their businesses. It is advisable to use these cards for urgent or emergency situations – where you require only a few weeks, not months, of funds to achieve an immediate return on investment. You can use plastic to buy items for your booth at a trade exhibition or to make an emergency supplier payment or a last-minute business trip to land a lucrative client or investor.

I have never been fond of debt. For many years, I’ve written about personal finances, both mine and other peoples’. And very often I’ve witnessed how debt, like cancer, can drain the life out of healthy bank accounts.

However, debt can sometimes be a good thing if used the right way. It’s okay to have a debt to pay for things whose value holds or appreciates over time; something like an affordable mortgage (emphasis being on affordable), business investment or student loan.

As you may already be aware, many businesses experience cash-flow problems every now and then, and a good line of credit or a loan can help to ease the ups and downs until the business moves past the tough periods or evolves into a more profitable enterprise. Regardless of whether you approach a big bank or a loan company, the fundamental rules of getting credit are the same. Proper planning and preparation are a must.

Before approving you for a loan, a bank or any credit institution will typically ask you for a business plan as well as current and past financial statements. They’ll also look into your personal credit history, so make sure that your credit score is in top-shape.

Shop for the best loan terms.

If there’s a bank that is willing to give you a loan, it’s highly likely that there are other banks and credit institutions that are willing to as well. The loan terms between lenders are different so you have to go through the contracts keenly to determine which loan offering is best for you.

Only borrow what you can afford to pay back. Never borrow more than the absolute minimum amount of funds you need, no matter how much money you can get from lenders.

Is credit bad

Debt isn’t evil, but it can be dangerous. Use loan money wisely and it can give you a huge upper-hand over your competitors and also improve your flexibility to secure opportunities that would otherwise be out of your reach and can actually help to take your company forward.

With that said, it is good to note that the best debt is one that has been repaid.

The 36% Ratio

How do you establish how much cash you can borrow, or more specifically, how much money you should borrow? Economists advise a personal debt-to-income ratio that is below 36%. This basically means that your total monthly loan repayments (which includes your mortgage) should not exceed 36% of your gross income. So, if you make something like $60,000 a month, you should not borrow more than $21,600.

It is fair to say that this ratio should also be applied to business loans. In this case, the ratio can be adjusted to business debt/liabilities-to-assets. As a general rule of thumb, it is wise to keep your debts or liabilities below 20% of your total business assets.

How To Put Debt To Work For Your Business

Put Debt To Work For Your Business

When debt is used wisely, it can be a great addition for your books. Debt is a real four-letter word for numerous small businesses – although lately, it hasn’t really mattered since lenders have been big scrooges when it comes to extending any sort of credit.

However, recently the purse strings appear to be loosening. Some experts say that going into debt sometimes can be a smart decision for numerous business, as long as it is done in the right situations. There are a number indicators that show that small-business credit appears to be on the rise. The lending capacities of banks are expanding at a higher rate than has been seen in quite some time. This creates a lot of opportunity to obtain finance when it was once quite tough.

Get a good deal on debt

good deal on debt

Cost is one of the obvious attractive features with taking on debt. Interest rates have reached rock bottom, which makes the expense of borrowing money more affordable for both small businesses borrowing for the first time as well as those who are wanting to get their existing debt restructured.

Given the fact that interest rates are currently at an all-time low, in real terms, that is making debt less expensive. The bottom line of a majority of businesses can be impacted very quickly through refinancing existing obligations at lower costs.

However, low interest rates alone shouldn’t cause a business to rush to the bank for a business loan. Businesses still need to be weary of taking debt on in the hope of righting a struggling business. Although a cash infusion might provide a short-term boost to a business, the revenue that follows might end up being insufficient to make all repayment obligations. The right conditions for taking on debt typically should include having a healthy business that still appeals to a bank’s view of taking on prudent risk, the prospect of continued growth is good, and there are positive trailing trends.

Banks are also not turning a blind eye when it comes to small businesses seek debt in order to stabilize their volatile finances. Lenders might be more generous these days than they were in the recent past, but the most attractive candidates for financing are still those businesses that have plans for growth and a solid finances history rather than companies looking to patch their financial leaks.

Craig Calafati, Celtic Bank’s national sales vice president, says that banks are searching for a business that is well managed with proof of this through adapting to the evolving business trends and challenges. That means that they supervise their expenditures closely, have been able to maintain necessary liquidity, and have taken other measures that show they understand the current business climate that they are operating in.

Is it a good time right now to get in debt?

In contrast to recent years, for small businesses right now it is a buyer’s market when it comes to debt. Make sure you take the time to aggressively shop for and compare interest rates, loan costs, and other terms. Small business should begin their search with community-based local banks. They may have especially attractive loan terms, and the the lenders are more likely to have an interest in backing locally based small businesses.

However, don’t get too overzealous. Minimize your debt, shop around to find the deal that is most affordable and be sure that any debt you take on is going to be manageable for your business.



More Articles:

Tips For Using Your Business To Finance Business Expansion

How To Get A Business Loan Fast



Case For Borrowing Money Instead

Giving up Equity | LoanOne

Almost everyone has heard the saying that any amount of debt is unacceptable. People view debt as one of the worst things they could be saddled with. You hear horror stories all the time; homeowners can’t make ends meet, the national deficit is simply growing larger, credit card spending is out of control, and university students are drowning in student loans and may never be able to recover financially.

When it comes to businesses, the facts are a little more straight forward. Borrowing can actually be a good thing. Many business owners do not have a background in finance, which is why the following four points are important to conceptualise. It is vital to understand that debt does not have to be a burden.

1. Giving Up Equity Costs More

This is probably the most important point to understand. If you are trying to secure money to run your business, giving up equity is going to cost you more than if you accepted some level of debt. When you give up equity, you give up some of your business permanently.

Consider the following information. When you begin your business, you have to pay employees, purchase inventory and get the equipment that you need to be successful. Investors will give you capital, but any money you make going forward is earmarked for them. If you take on debt, you do have to pay interest. However, there is a certain rate that you must pay and it doesn’t last forever. Once the business loan is repaid, you still have all your equity.

It is almost a certainty that you will not save money by giving up equity. That is why, in most cases, assuming debt is arguably the better choice.

Debt Responsibility

2. Opportunity Cost May Be Higher Than Debt

Maybe you have just started your business and you want to make your first sale. However, it’s nearly impossible to do because you don’t have the money to purchase inventory. Suppose you can purchase the inventory for $5,000 and are able to turn around and sell it for $15,000. Does it make sense to borrow $5,000 at a cost of $1,000 to complete the order? If you factor in the APR, you would realise that you’d have a 20% APR over the course of the one year loan. If it were a two-week loan, the APR would be 520%.

While that sounds like a ridiculously high APR, it is still a better deal as long as nothing else is out there for you to take advantage of. This is because your return on investment is excellent. You’d make a huge profit, which makes it worth it. There’s absolutely no reason that you shouldn’t do it, even if math isn’t your strong suit.

Depending on the situation, debt can be your best option. You can make money and have opportunities that you didn’t have before. You just need to ask yourself if you are getting a high return on your investment and if that return is more than the debt. If the return is higher, it makes sense to strongly consider this option.

3. There Is Less Tax Burden When You Pay Interest

One reason that borrowing can be advantageous is that paying interest cuts down on your taxable profit. As a result, you don’t have to pay as much in taxes.

Capital costs less as a result, and it is important to consider that when thinking about what type of return you’ll get from assuming a debt. There have been companies that have been able to do very well for themselves by taking advantage of this tactic. It is something that small businesses should look at as well.

Borrowing, therefore, is starting to look better and better. Selling equity really shouldn’t be the first thing you turn to if you want to improve your business. You can lower your taxes through debt, which is a huge advantage.

4. Debt And Responsibility Go Hand In Hand

Small businesses usually don’t think about it from this point of view, but when you have debt, you think more about your finances and what the best decisions are for your company. As a result of this careful planning, you can do a lot of good for your business over time.

Obviously, this isn’t the only reason that you would assume debt. However, it is an advantage to factor in.

Why is that the case? When you have money, you aren’t as worried about money. When you don’t have money, you have to fight to stay afloat. When you have money, you may spend it on things that you don’t really need. When you don’t have money, you aren’t as frivolous and must really think about where your money is going.

That means that you will be more careful with your budget. As a result, you may earn more simply because you are not willing to indulge in things that you don’t really need.

You shouldn’t go into debt if you don’t have to. Still, if you are smart about the process, you don’t need to worry about debt. Instead, look at it as a way to help your business get bigger and better. Ultimately, it may cost you less than your other options as well. It’s not easy to run a business in today’s world. You have to do everything in your power to be successful. If you want your business to be around for a long time to come, making the right financial decisions is crucial.