Capital is ubiquitous with business success and having the knowledge of what to do when looking for financial help is key. Access to funding and how individuals can leverage their insurance to alleviate their financial burdens are key steps to financial security and growth.
Stacey Walston, Community Relationship Manager outlines credit scores and the importance thereof.
Lending is a decision that every consumer will need to make throughout their lifetime. Though it comes in many forms, credit is the lending tool that is factored in more often than not. It’s generally the beginning of any consumer’s financial journey and will determine their financial future as a buyer (consumer) and/or a seller (small business).
Personal Credit
At the young and immature age of 18, young adults make decisions about their finances that can have a big impact on their financial future. Some may need to consider student loans to further their education. Meanwhile, the minute they get settled in on campus, companies are enticing them to sign up for credit cards by persuading them with free t-shirts or slices of pizza. Most times they don’t know what credit cards are nor have they ever been taught how to utilize them properly.
The same thing happens to small business owners when they set out to launch their business model. Since the rise of the Great Resignation, access to funding sources has been at an all-time high for entrepreneurs. Even with a solid business plan in place, most entrepreneurs don’t consider the personal credit profile they will need to secure the capital needed to fulfill their current and forecasting business goals. With the lack of guidance or the inaccurate research discovered, most entrepreneurs assume it starts with their business credit but how they have managed their credit in the past is the asset that is most considered.
Individuals & entrepreneurs need to take action before needing capital to understand the expectations and how to best prepare them for reaching their business goals.
Understanding & Building Your Credit: The 5 Cs of Credit
Lenders use the five Cs to decide whether a loan applicant is eligible for credit and to determine related interest rates and credit limits. They help determine the riskiness of a borrower or the likelihood that the loan’s principal and interest will be repaid in a full and timely manner.
- Character,
- Capacity
- Capital
- Collateral
- Conditions
Each of the five Cs has its value, and each should be considered important but character and capacity, which are the most heavily weighted, are often most important for determining whether a lender will extend credit. Some lenders may carry more weight for categories than others based on prevailing circumstances.
Crystal Castillo Guster wants to disillusion life insurance and shares how previous and current generations need to pay attention to how life insurance works.
What many of our parents didn’t know is that life insurance has undergone significant upgrades, and the “traditional” version is not the only strategy available to individuals and families. Like countless others, my parents were unaware that life insurance could be utilized while still alive. Yes, you heard that right—while you are still alive. Life insurance isn’t just about providing financial security after passing away; it offers a plethora of benefits that can profoundly impact one’s financial journey.
For instance, it can be leveraged for estate planning, allowing individuals to safeguard their assets and ensure their loved ones are protected. Additionally, life insurance has the potential to accumulate cash value, which can be accessed through loans or withdrawals, providing a valuable financial resource without relying on traditional banking systems. These are just a few examples of the myriad benefits and strategies that many, including my parents, were never taught or made aware of.
Silver Tsunami
The Role of Small Businesses in the U.S. Economy: PUT IN GRAPHIC FORM
Small businesses contribute immensely to the U.S. economy. Here’s a look at this impact through the numbers.
The Role of Small Businesses in the U.S. Economy: Stats
- Number of small businesses in the U.S.: 33.2 million.
- Percentage of total U.S. businesses represented by small businesses: 99.9%.
- Contribution to job creation (1995–2021): 63% of new jobs.
- Around 81.6% of small businesses in the US have no employees, which amounts to 27.15 million businesses without employees
- Only 16.44% of small businesses in the US have between 1 and 19 employees (SBA)
- There are 61.6 million small business employees, accounting for 45.9% of the US workforce
- There are 4.53 million small businesses in the professional, scientific, and technical industries, accounting for 13.62% of all small businesses. It’s the only industry with more than 4 million small businesses.
Revenue Generated by Small Businesses
- Small businesses in the US generated $16.2 trillion in revenue in 2021 (Pew Research Center)
- Small firms in the US exported goods worth $546.1 billion, accounting for 34.9% of known export value in 2021
- From 1995 to 2021, small businesses have been responsible for generating 17.3 million net new jobs, making up 62.7% of all new jobs created during this period (SBA)
- Small business owners primary motivations to go into business include “ready to be their own boss” (28%), dissatisfaction with corporate America (23%) and “want to pursue a passion” (14%) (Guidant)
- Small businesses in the US are responsible for 43.5% of gross domestic product (GDP) (SBA)
Ownership Demographics:
- Baby Boomers (age 55+): Own 50.9% of small businesses, despite representing only 21% of the U.S. population.
- Generation X: Own 35% of small businesses.
- Millennials: Own 10% of small businesses.
- Generation Z: Own 2% of small businesses.
Succession and Economic Impact:
Estimated business value to be transferred in the next 5 years: $14 trillion.
Daily number of Boomers turning 65: 10,000.
Percentage of small businesses likely to go up for sale in the next decade: 65-75% (approximately 10 million businesses).