Tax Settlement: Offer in Compromise Vs. Installment Agreement

Posted on July 24, 2020July 24, 2020 by Jennifer Brazer

Benefits of an offer in compromise over an Installment agreement

Your tax debt’s completion is probably the most significant advantage that an accepted offer in compromise offers. Once your proposal gets approved by the IRS and you pay the entirety, you do not have a responsibility for the tax liability anymore. This payoff means you will not have to keep up with the payments every month or a two-year review of your financial standing. To stay on good terms with the IRS, you must have both components when you file an installment agreement.

The status of any tax liens is also one financial consideration. Filing a lien withdrawal can get your OIC cleared in most cases if there is an IRS lien on your property. A lien withdrawal may not get approved if you have previous expired debts. Tax liens may give a strong reason to file an OIC instead of an installment agreement. And even if your offer gets rejected by the IRS, filing an installment agreement would still be possible. Lastly, it would be beneficial to you if your OIC gets accepted by the IRS since you will be paying lower than what you owe.

Drawbacks of an offer in compromise

The major drawback of an offer in compromise is that if your financial standing and circumstances are not eligible, they will not get accepted by the IRS. So many OIC’s get turned down by the IRS is that a lot of tax relief entities send them out when they have no chance of getting accepted.

Liquidating Assets

Another drawback of an OIC would be having to allow a large number of assets and money to fulfill your debt. It would be best if you liquated your assets by the IRS to reach the total you owe or the same amount as the quick-sale value of the items.

Tax Liens

A federal tax lien can be filed by the IRS against you while your offer in compromise is pending. However, this is not a problem if you have liens already. Although liens don’t file while the OIC is pending in most cases, it is still possible.

Benefits of an Installment agreement over an offer in compromise

The primary benefit that an installment agreement offers is that you do not have to liquidate your assets in most cases. Under a Partial Pay Installment Agreement, you may be deemed eligible to receive tremendously low monthly payments.

It also works in favor of taxpayers who either cannot make a reasonable OIC, or their offer getting rejected.

Even during complicated financial circumstances, getting an installment agreement approved is much easier than an offer in compromise, which means there is more chance of getting accepted, and the decision is quicker. You must keep track of every new tax year with an installment agreement and make suitable payments every month. Your agreement may get revoked in case of any discrepancies.

Drawbacks of an installment agreement

An installment agreement means that your financial standing can get reviewed by the IRS every two years. This review is one of the reasons why the IRS prefers it. Your monthly payments can increase if you gain any new assets or your income increases.

While keeping up with your taxes is not a disadvantage, having to make payments for a long time can be a hassle.

In many situations, an installment agreement gets accepted by the IRS over an offer in compromise.

The new tax debt is nowhere near the collection statute expiration date gives the IRS additional time to collect. They are hoping for your financial standing to get better so they can collect more as time progresses.

The existence of tax liens is another drawback of an installment agreement. The IRS won’t lift the liens like with an OIC. You may have to deal with liens affecting your ability to get loans on good credit during the terms of your Installment Agreement.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Steps to Improving Credit

Posted on July 24, 2020July 24, 2020 by Jennifer Brazer

For any business or individual, improving credit is a tedious journey, as it doesn’t happen overnight. Credit scores consider years of past financial behavior, all being recorded on your credit report by three different credit bureaus. They are keeping separate accounts of your credit scores. Therefore, the scores may vary. However, the credit score puts more emphasis on the recent information, which means you always have a chance to get your score on the right path.

Certain factors are more significant than others for improving credit score. Payment history and credit utilization ratios are among the most imperative in many credit scoring models. When combined, they can profoundly influence your credit score.

Payment history

When you apply for a loan, lenders look at your credit report to analyze it. One factor that the lending institution is interested in is your payment history because past payments history is a good predictor of future behavior. Some of the best and easiest ways to improving credit is by paying all your utility bills, monthly mortgage payments, credit card bills, and other payments in time. Late payments or partial payments are corrupt for your credit scores and should never occur.

It is essential to highlight that all kinds of payments, including auto or student loans, should be paid on time. It is always good to use all the available tools and resources to make these payments effectively. Using calendar reminders and automated payments are some of the tools available at your disposal.

In case you are lagging on a specific payment, it is best to bring them current as soon as possible. Though late payments show as negative information on your credit report, their effect can reduce over time.

Improving credit with a credit utilization ratio

The credit utilization ratio is also an essential measure of your credit score. It calculates by dividing your total credit card balances by your total credit limit. The rate is measured for all your credit cards as well as for each card individually. Lenders prefer individuals who have a low credit utilization, typically 30% or lower. A small ratio signifies that you have not maxed out on your credit card limits. Therefore, you are more likely to manage your credit well. Improving your credit requires you to maintain a low credit utilization ratio, which can be achieved by paying off the debts and keeping low credit card balances.

When you open up a new credit card account, it increases your credit limit. Still, it will open up a hard inquiry on your credit report. Too many inquiries can negatively influence your credit score and remain on the report for up to two years. However, maintaining a low credit utilization ratio will ensure that this does not cause any cause.

Changes that can affect the credit score

Some people often wonder how specific actions can alter their credit score. For example, when you close two revolving accounts, whether it will make any contribution to improving credit score. To answer this question and many others, you must realize that your credit scores depend entirely upon the information present in the credit report. Any change in that information will impact the score positively or negatively.

Closing two revolving accounts do lower the number. However, it will lower your credit limit, which will eventually raise your credit utilization ratio, therefore, negatively impacting the credit score. It is also possible that one change affects many items in your credit report and completely understands it. You will have considered each situation individually.

Few guidelines for improving credit

Minimize your debts
Abstain from applying for credit unnecessarily
Watch your credit card balances
Do not write off old debts that no longer exist
Pay bills on time
Use a calendar

Following the tips mentioned above will ensure that your credit score keeps improving over time, making your life a lot easier.

Recognizing and Dealing with Embezzlement

Posted on July 23, 2020July 23, 2020 by Jennifer Brazer

Sometimes business owners face employee embezzlement or at least have the fear it may occur. This kind of fraud can be even more devastating if it occurs in the first phases of business development. Employee embezzlement is the most insidious and common of all fraud attacking small businesses. According to a recent study conducted by an association of certified fraud examiner (ACFE), employee embezzlement is costly to companies, and it takes them years and years to recover from the loss. Companies with fewer than 100 employees accounted for 35% of fraud cases.

These findings bear witness to the fact that employee embezzlement can turn a business venture into a misadventure. Why? Because it drains the business’s revenues and profits that help businesses to stay in the competitive race. The literal meaning of embezzlement is taking money, property, or any valuable thing from the person to which it belonged. Companies must recognize and deal with embezzlement, fraud, theft, or any con or deception that may hurt your business and its fate. You must be aware of the warnings and take deliberate steps to prevent fraud within your organization.

Root-Cause of Employee Frauds and Threats

Increased trust in your employees, failure to appreciate new and trusted employees, poor management of finances, and lack of bookkeeping and accounting control often lead companies near to a complete shutdown point. As per the study, your trusted business partners or employees would probably steal more from you than the company’s newest employees. Why? Because they are more aware of business conduct and processes than new hires. So, there shouldn’t be anything like blind trust in business. You should always monitor your employees regardless of their experience and terms with you.

Moreover, employees’ underlying motivation is one of the biggest reasons for embezzlement, where they feel underappreciated, underpaid, and overworked. Businesses need to boost their employees’ morale by valuing their performance and potential if they expect to prevent fraudulent activities in their organizations. Trust me! Your employees can change the entire fate of an underperforming business if you appreciate their efforts and give them perks and benefits along with deserving gross salaries.

Poor management of finances and admin work can be costly to a business. It can even kick a business out of the competitive race. Employees who intend to steal from you have a sharp mindset that encourages them to devise creative ideas for stealing or theft. Being a business owner, you must prevent them from stealing and embezzlement. For which, you should leave no margin of room for your employee to take from you.

Moreover, it would help if you took management and admin control in your hands. Business books are not that hard to manage and supervise. All that it takes is your motivation to make efforts to prevent your employees from embezzling or stealing from you.

What Could Be the Warning Signs?

The list of warning signs could be limitless depending on nature, size, and business operations. However, there are sure warning signs that let you know if your employees are stealing from you.

A change in employee working habits such as disorganized company records
The unexpected change in record-keeping methods or systems
Unexplained funds to buy luxury items such as expensive cars, watches, or boats
An unusual drop in profits
An employee takes business bills, receipts, and/or bookkeeping home without permission
Your accountant is reluctant to hand over books and critical financial records
Your accountant spends more time at the company than usual
An employee with financial problems and family pressures
An employee calls it quits from the company suddenly

Embezzlement and Prompt Prosecution

The signs of embezzlement or employee theft are endless. However, you can minimize these fraudulent activities by spending more time and remaining true to your business. You can save your failing business and keep its positive image in the market if you have processes prohibiting employees from stealing. Perhaps it may account for legal proceedings or heavy penalties under a company’s policy.

Spend Less & Save More – Formula for Happiness

Posted on July 23, 2020July 23, 2020 by Jennifer Brazer

As per Google Analytics, spending less and saving more is one of the tops searched for things on the internet at the dawn of every New Year. People almost always come up with a new year’s resolution to spend less and save more. Still, they lose their money-saving motivation when they experience themselves falling prey to their dreams and desires. This loss of motivation indicates that we rarely keep our resolutions. Perhaps we intend to achieve them the wrong way with the wrong plan. It has nothing to do with good intentions or strong willpower. They come and go with the wind as you may less likely feel enthusiastic about saving money for more significant concerns.

A Dramatic Shift in Spending Habits!

However, a concrete budgeting plan with healthy and measurable goals and financial targets can help you spend less and save more. We live in an era where we are so fortunate to have access to vital information. Information that was extracted and put forth by gems of the industry who have presented their thoughts on saving money or how a person can expect to have a financially secure and stable life by spending less and saving more. Gone are those days when we had limited options or entertainment to spend money on, which means we could save more for our future needs. But now we have e-commerce platforms with straightforward buying and delivery options and social media such as Facebook pages that are draining our pockets like never before.

Is It Hard To Spend Less And Save More?

There is no denying the fact that spending less and saving more is the secret formula for happiness. In today’s economy, money-management or saving money is the top priority for most households and businesses. Savings can mean a brighter future and a stable financial career. You need to cut back on your budget regularly. Otherwise, you will face severe agony and stark anguish at the end of your working years or post-retirement life.

It is not that hard to spend less and save more if you have a concrete plan with you, and you are motivated to stick with it all the time. By tracking and monitoring your spending or expenses, you can expect to succeed with your intentions of saving. Before sticking with a budget plan, you also need to change your spending habits, especially when you are an irrational spender. If you can’t adjust your spending habits right away, you can pick one or two steps that will gradually reduce your expenditure. This change means adjusting to your current lifestyle for more significant concerns that is to spend less and save more.

Know The Worth Of Hard-Earned Money!

The basic formula for happiness is to spend on a plan. You need to know the worth of your hard-earned money when you make a workable saving budget. For cutting back on your spending, you need to cut your variable expenses such as gasoline, grocery bills, entertainment expenses, etc. There are certain apps and software that can help you automate your saving. For achieving intended saving marks or outcomes, the use of software technology produces surprising positive results. It helps you make your set benchmarks and helps you spend less and save more.

What Are The Three Most Crucial Mind Tricks To Help You Spend Less And Save More?

First thing first, don’t give up no matter how hard you may find saving money to be. Giving up means giving away your intentions to save money.
You can procrastinate non-essential purchases because you can get them the next month or the future.
If you fail to create a workable budget of your own, you can hire a professional who would review your bookkeeping records and track your spending habits before creating something that will work for you.

Should I Alert My Employer That A New Hire Is Stealing From The Retail Store?

Posted on July 23, 2020July 23, 2020 by Jennifer Brazer

Absolutely yes! Because your employer must know about any misconduct, whether financial or behavioral—happening in your company. Holding a position in the company, it becomes your duty to report any fraudulent activity you witness, whether internal or external.

In a time of white-collar crime, Ponzi schemes, and intensifying transgressions, one can understand why employee fraud is not uncommon in today’s corporate world. According to a report published by the US Chamber of Commerce, employee fraud is costly to businesses making American employers lose more than $60 billion each year. Employee fraud is inevitable, which means there wouldn’t be any business, regardless of the size, that is not at risk. It is ongoing and widespread and reduces a company’s efficiency and working capital and significantly impacts its productivity and profitability.

There is certainly no denying the fact that employee fraud affects your bottom line. When we specifically talk about a retail-store-type-setting, retail stores are more vulnerable to employee theft or fraud since employees know when and how to steal from the store. From shoplifting merchandise from the shelves to taking cash from the cash register to pilfering secret data/trade secrets from the company’s computers, a business, small or large, is always at risk. A stealing employee will probably find the best opportunity at hand for making the most out of a lucrative situation.

Some Employers Take Stern Actions against an Employee Theft, and Others Don’t!

Whether or not to report a stealing employee usually depends on the seriousness or nature of the crime. Some employers take strict measures for bringing a new hire who found stealing from the retail store to justice for recovering losses. Employers who attempt to terminate or prosecute face obstacles that could create unwanted situations for the defendants looking to recover damages. At the same time, other employers adopt a relatively soft approach in dealing with cases of employee fraud or theft. Most of the time, an employer will forgive their employees and give them a second chance due to the relationship or long-term employment and previous loyalty of the employee.

According to a study, entrusted employees steal more from the retail store or involve in fraudulent activities in an organizational setting. When it comes to a new hire, it is crucial to filter out the best candidate with a clean background or history. Before giving an employee a position in your company, it is essential to check your potential employee’s criminal record and working behavior in the past.

Before Reporting, Having A Concrete Evidence Is Ideal!

You must report any fraudulent activity in your company to your employer. Before reporting or giving a heads up to your employer about a stealing employee, it is ideal to have concrete evidence to back your claim. It may raise suspicions of your jealousy with the new hire threatening your sales commission.

Any theft or fraud would ultimately impact the company’s productivity and profitability, which will hamper the company’s operations, which may put your job at risk. So, it is essential to report a stealing employee to your employer for proving yourself to be an honest individual and playing your role as an employee committed to the company’s growth, prosperity, and success.

Protecting Your Small Business Data from Cybercriminals

Posted on July 23, 2020July 23, 2020 by Jennifer Brazer

The era of ‘bad guys’ equipped with baseball bats and chains to loot people on the streets has come to an end. Today, geeky waifs have found an exciting alternative to steal from people virtually. They can work individually or be associated with organized crime making an exceptional amount of money every day. They know the art of stealing through different means, which gives them a reputation as scammers, hackers, and magicians. These con artists and organized crime organizations are causing companies to lose trillions of dollars’ worth of sensitive data that includes trade secrets, financial data, vendor and stakeholders’ details, etc.

Small Scale Businesses Are More Vulnerable To Cyber Fraud!

The reality is small businesses are easy targets for hackers and spies as they have less control over their systems and networks. Often, small business owners feel reluctant to spend money on improving their online security due to costs and other factors. Cybercriminals used to attack big, primarily multinational companies or IT houses. Still, most of them target small-scale companies as their system and networks are weak and offer less resistance. It becomes necessary for all businesses to protect their data from cybercriminals as it can cause them to lose a top position in the competitive race.

Stats Reveal An Exciting Story—Why Cyber Criminals Have Their Game-On!

The dilemma is, 98% of small to medium-sized businesses aren’t prioritizing their online security for future business growth. One survey found that 85% of people consider online security improvements useless as they believe they don’t have anything worth stealing. Also, 45% of small business owners believe hiring top IT professionals and implementing cybersecurity programs will be too expensive to bear. The avoidance of the expense is why cybercriminals have their game-on when it comes to breaking into a company’s accounts and computers to steal sensitive information and data. They act after discovering that the ship has already sunk and felt the need to salvage the situation. It’s better to keep anti-viruses and encrypted systems and networks in place to prevent data leakages and theft.

Implementing online security procedures for the first time can be an overwhelming process, and this is why hiring an IT professional seems like an intelligent choice. Gone are the days when businesses had limited options to hire IT individuals or agencies. You can hire them as per your business requirements and specifications, and they aren’t that expensive too. Cybercriminals will go to any extreme to steal something valuable from the company, so you must prevent them from stealing no matter what, by ensuring a baseline level of security.

So, here’s what you can do:

Install Anti-Virus Software

Unarguably, anti-virus serves as one of the most critical prevention tools that restrict malware infections and viruses entering your computers, phones, and tablets carrying essential business data. So, you need to install anti-viruses on your devices, not just on your computers, to fight against potential threats and dangers.

Use Secure Passwords

Setting common passwords such as your phone number, your son, or daughter’s date of birth must be avoided no matter because they are predictable, and cybercriminals find it easy to break into such accounts with easy-go passwords. You must have one tricky password for one account only as having the same passwords for multiple accounts can be incredibly risky. Keeping the same password for all accounts means that breaking into one account will possibly lead cybercriminals to break into all the accounts.

Protect Your Hardware

Make sure all your physical devices and hardware have a security system. It would prevent potential threats and dangers and keep in-house intruders (employees) away from accessing your computer in your absence.

Keep Your Software Up-To-Date

According to a study, most cyber-attacks occur when companies don’t update their cybersecurity software. To avoid disrupting your daily workflow, what you can do is schedule updates at the end of your working shift ideally after every week. Scheduled updates will provide you greater control over your cybersecurity network and prevent cybercriminals from entering your company.

Back-Up Your Data

Backing up your data means you can expect to recover essential business data such as bookkeeping and accounting records and finances. So, backing up your company’s data once after a couple of days, get you more in control of your business.

Small Business Bookkeeping and Accounting: The Ultimate Guide

Posted on July 23, 2020July 23, 2020 by Jennifer Brazer

If you’re a small business owner, you’ll be acquainted with handling numerous tasks at once. Alongside handling basic operations, you need to generate income, keep your customers happy, and manage financial information. Bookkeeping and accounting can be quite a task, and one of the biggest questions to answer is finding the right person to do the job.

Any company irrespective of the kind of business is absurd without accounting. It will help you stay clear of the IRS and form the foundation of business stability and decision-making. Therefore, bookkeeping and accounting are a vital task that needs handling with the utmost care. In very general terms, accounting is a documentation of all economic operations through records management. However, in a broader sense, it deals with all the financial matters, including tax planning.

A smart business owner understands that without proper accounting, he is like a car owner without a GPS. You can see the road but are not able to reach the destination. The primary functions of bookkeeping include

Validates the outcomes of the company activity to date
Helps in the timely submission of all the business documentation
Tracks all available resources like inventory, labor, materials

Decision making and future planning

Below is an ultimate guide that, if followed, can be your recipe for success.

Selecting the appropriate accounting method

Businesses follow two methods for recording financial transactions. Either a company will support a cash method or an accrual method—the difference between the two lies in how the economic event gets recorded in the books. Well-established businesses practice the accrual method of accounting. It involves recording a transaction even if the customer has not paid yet. The cash method is a slightly simpler version as the transaction gets recorded when money exchanges hands. Small businesses usually focus on the cash method for bookkeeping and accounting, as it is convenient and straightforward. However, depending on your business needs and preference, you can choose the most desired.

What records to keep

Business licenses, permits, tax documents, DBA certificates, and other vital documents that have legal implications for the business should be regularly updated and stored safely. You need to know the location of all your business-related documents, whether it’s online or offline. These documents can come in handy at any time, and if you have kept the correct records in the right place, you can access them anytime.

Along with legal documents, there are many other sources and supporting business documents. Accounting for small businesses requires you to maintain the source documents accurately as they are of high importance while keeping copies of your contracts, invoices, receipts, and payroll records along with many other materials depending on the scale of the business. All successful companies keep authentic records and use them as sources of information to make better future decisions.

What and how to record

The whole shebang that has a connection to money and involves transactions has to get recorded properly. Keeping day to day records of both inbound and outbound payments is imperative because it will offer you a wholesome picture of the movement of funds across your business. Bookkeeping and accounting for small companies should record liabilities, taxes, operating and overhead expenses, and employee paychecks as those have to get referred to regularly.

The cash that comes from the sales has to be managed and recorded appropriately daily. If you leave that to the last, the probability of making errors get high. If you leave this to the year-end closing time, you are surely in for big trouble. Therefore, what and how to record is a question you must answer right at the start of the bookkeeping process.

Separate business and personal finances

Some small business owners make the mistake of keeping business and personal finances alongside. It is never a good idea to do that because it can be confusing and legal because it can get you into trouble with the IRS. If your business lands into some trouble, you can be personally held liable for the discrepancy. Whether you are managing the accounting yourself or have hired someone for the job, a business should always be kept separate from personal matters.

Separating personal and business finances will also benefit you at the time of taxes. It will be easier for you to file the returns as well as you’d make the IRS job easier.

Use bookkeeping and accounting software

Most businesses these days start with opting for accounting software that keeps track of all the financial information. All you need is to enter the data. You can get complete balance sheets, income statements, and all the other vital documents vital for better decision making.

Small businesses have a lot to worry about at the start. Ensuring the correct implementation of the underlying financial structure will keep them away from harm for the most part. Following the guidelines mentioned above for bookkeeping and accounting can save you significant time and effort.

Top 5 tips for Cloud Computing Security

Posted on July 22, 2020July 22, 2020 by Jennifer Brazer

The rise of digital technology has reduced human errors, but it has also increased the cybercrime rate. The majority of cybercrime cases are based on the illegal or inappropriate use of personal data that is retrieved from the cloud networks. More specifically, the emergence of personal cloud users has resulted in an increased rate of cybercrimes, and the prediction is that the number of cloud users will increase more with time. As a result, cloud security platforms have raised concerns about the bookkeeping, privacy, and confidentiality of the users’ data. Despite these concerns being acknowledged, still, no surefire technique exists that can restrict cybercrimes completely. This is why we all have to be conscious of our data that is stored on cloud platforms.

Here are Top 5 tips for cloud computing security that you can follow to secure your data.

Carefully Read the User Agreement

Often individuals don’t read the user agreement and terms and conditions before approving or signing them. It might be because of its length, small fonts, or hard to understand verbiage. When it comes to security, we must change this thinking because we could agree to something that makes vulnerable to data theft. The terms and conditions of all the cloud networks are not the same. Some networks offer sufficient security and require minimum access to your data, and some networks offer certain user rights to claim data security in case of any data theft. By reading the user agreement, you can decide what cloud computing you should use as well as know your rights in case of any security trouble.

Create Smart Passwords

Passwords are the keys that lock, saves, and protect your accounts and data from various threats and hacks regarding cloud computing security. So, you need to create an intelligent password that must be untraceable. Almost 90% of passwords can be easily cracked within a few moments only because the majority of the users prefer to create easy to remember passwords. Still, they don’t know that easy to remember passwords are easier to crack, and only an intelligent password can save you from password cracking. Here are some tips for creating a smart password that you can follow while creating or changing your password.

Choose a lengthy word of more than nine characters
Include more than four digits in the password
Do not use the same password for every account. Cloud computing and networks are trapping and intelligent, and they can cross-match your passwords on different accounts. So, try to change your password for every account smartly that it must be difficult to crack but easy to remember. For example, if you want to select a single password e.g., “password1234”, then make it different for each account such as “password1234gmail” for Gmail account, “password1234skype” for skype account. In this way, you can secure your smart password and data.

However, it is just a tip, and you can apply more innovative ideas to create a smart password.

Encrypt Your Cloud Files

Encryption is the best method for cloud computing security that protects the data that you want to store on cloud networks as it restricts everyone from accessing your data without knowing the file password. The easiest way to encrypt a file is to convert it into a zip archive and protect it with a password and then upload that file to the cloud server. But always remember your password as you can never open your file if you forget the password.

The most convenient encryption software for the beginners is B1 Archiver, TrueCrypt, and WinZip that is free for all, and you can encrypt your file within few minutes. Note that if you want to decrypt the password-protected file, then it can only be done through the same software from where you have encrypted.

Opt for an Encrypted Cloud Service

Recently some cloud computing services have offered local encryption and decryption of the files. At the same time, you upload or backup a file on a cloud network, and the service provider assures data safety. The companies claim that with the encrypted upload, not even the service provider can access the files without the user consent. However, the charges of these service providers are comparatively higher than conventional services, but if you want to keep your data safe, then you have to compromise the cost.

Small Business Cybersecurity Threats

Posted on July 22, 2020January 22, 2025 by Jennifer Brazer

Evolving Business Dynamics and the Dire Need for Advanced Cybersecurity

Often small to mid-sized businesses don’t believe they will be affected by cybercriminals. Most give it thought after they have been attacked, and the measures taken are too little too late. When businesses sit idle and do nothing about data theft or leakages, more significant problems tend to arise. Most small business owners think that cybercriminals primarily target corporations and big IT companies. But the truth is that small businesses are more vulnerable to cybercrimes as they have weaker systems and networks and have little or no IT support securing their businesses from cybercriminals. With this in mind, small business owners need to change their perception and need to focus on cybersecurity.

From individual-level scammers to organized crime syndicates, the cyber world is full of crimes, and small businesses have every reason to feel threatened. They are the prime target for every hacker and scammer since they have weak systems, networks, and processes. According to a study, three out of every four data breaches cost companies billions of dollars each year. Also, a majority of cybercrimes go undetected until it costs millions in reparation.

How to Prevent Data Leakages and Cater to Cybersecurity Threats?

Small businesses can fall prey to cybercriminals because they do little to protect themselves from potential or highly synchronized threats. A staggering 9% percent increase in cybercrime activity last year bears witness to the fact that cybercrime is a menace that will continue to pose threats to small businesses year over year. Although every New Year promises faster internet and increased technology, those advances mean an increase in cybersecurity threats. As technology evolves to combat the threats, businesses must upgrade their systems and networks. They also need to improve their IT infrastructure to detect potential threats better and prevent data theft or leakages.

Digital Chaos Is Leading Companies into Trouble!

Technology and advanced tools and techniques have engulfed the world around us. It should come as no surprise that technology has changed the dynamic of the online world. Most small businesses devote fewer resources to cybersecurity, making them open to attacks. A lack of an IT department, weak systems and networks, unsecured internet connections, and outdated software also contribute to small businesses’ vulnerability to cybercrime.

What’s More?

Often small companies mismanage their business and share vital pieces of information on their company’s website or the cloud. This information includes vendor details, banking credentials, bookkeeping, and accounting records. Generally, cybercriminals steal critical business data for ransom, but sometimes they sell that information to competitors causing you to lose your competitive advantage. This makes it clear that cybersecurity is essential to defend against these types of attacks.

What to Do When You Fail to Match the Pace of The Growing Cybersecurity Needs of The Economy?

A small business does not have to be vulnerable to cybercriminals. The threats have to be considered from the beginning and cybersecurity measures in place. Hiring an IT professional along with upgrading systems, networks, and software are the best ways to safeguard against cybercrime. A business owner should not wait until an attack has occurred to implement safety measures that will ensure your company will succeed.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Capital Sources for Small Business

Posted on July 22, 2020October 29, 2025 by Jennifer Brazer

Unlock Essential Small Business Capital Sources for Success

Small business capital sources are the diverse funding options available to entrepreneurs for starting, operating, and growing their businesses, including equity capital (investor funding), debt capital (loans and credit), and retained earnings (reinvested profits). Modern financing extends beyond these traditional pillars to include alternative solutions like crowdfunding, peer-to-peer lending, and revenue-based financing—each offering unique advantages for different business stages and needs.

As founder of Complete Controller, I’ve guided thousands of businesses through critical funding decisions over two decades. Today’s capital landscape offers unprecedented options, yet 72% of small businesses cite rising costs as their biggest financial hurdle. This guide cuts through the noise, delivering actionable insights on traditional, alternative, and emerging funding sources that can transform your business trajectory. You’ll discover how to evaluate options strategically, leverage new fintech solutions, and build a resilient capital strategy that aligns with your growth goals.

What are small business capital sources, and why do they matter?

Small business capital sources are financial resources—equity, debt, grants, or alternatives—that fuel business operations, innovation, and growth
The three main categories are equity capital (selling ownership stakes), debt capital (borrowed funds), and retained earnings (reinvested profits)
Alternative options include crowdfunding, peer-to-peer lending, revenue-based financing, and merchant cash advances
Proper capital access determines survival—inadequate funding causes 29% of startups to fail within two years
Strategic funding diversity creates resilience against market shifts and unexpected challenges

Traditional Debt Financing: Building on Proven Foundations

Traditional financing remains the backbone of small business funding. 77% of entrepreneurs start with personal savings before transitioning to institutional lending. Banks and credit unions offer structured solutions that balance predictability with competitive rates.

Bank and credit union business loans

Commercial banks and credit unions provide term loans ranging from $25,000 to $5 million, with repayment periods spanning 1-25 years. Interest rates typically fall between 6-12% for qualified borrowers. Credit unions particularly shine for small businesses—their community focus translates to 15% higher approval rates than large banks. The application process requires comprehensive documentation, including business plans, financial statements, and cash flow projections.

Speed has improved dramatically in traditional lending. According to recent industry data, 39% of banks now approve small, straightforward loans within one business day, while 76% complete approvals within five days. This efficiency rivals many alternative lenders while maintaining lower interest rates.

SBA loans: Government-backed advantages

Small Business Administration loans combine government backing with private lending, creating favorable terms for qualified businesses. The SBA 7(a) program offers up to $5 million with interest rates capped at prime plus 6%. These loans accept credit scores as low as 640—significantly lower than conventional requirements—and feature extended repayment terms of up to 25 years.

The trade-off is processing time and paperwork. SBA loans typically require 30-90 days for approval and extensive documentation, including personal financial statements, business tax returns, and detailed use-of-funds plans. Partnering with SBA-preferred lenders can accelerate this timeline by 20-40%.

Equity Financing: Strategic Partnerships for Growth

Equity financing trades ownership stakes for capital infusion, eliminating debt obligations while bringing expertise and networks. This path suits high-growth ventures willing to share control for accelerated expansion.

Angel investors and early-stage funding

Angel investors—typically successful entrepreneurs or executives—invest personal funds ranging from $25,000 to $500,000 in exchange for 10-25% equity. Beyond capital, angels provide mentorship, industry connections, and operational guidance. The angel investment process emphasizes relationship building over rigid metrics, making it accessible for pre-revenue startups with compelling visions.

Finding angel investors requires strategic networking through platforms like AngelList, local investment groups, and startup accelerators. Successful pitches demonstrate market opportunity, founder expertise, and clear paths to profitability within 3-5 years.

Venture capital: Fueling exponential growth

Venture capital firms manage pooled funds from institutional investors, deploying $500,000 to $50 million per investment. VCs target businesses with potential for 10x returns, focusing on scalable technology, biotech, and innovative service models. The intensive due diligence process examines the market size, competitive advantages, and management team capabilities.

VC partnerships bring operational expertise, strategic guidance, and follow-on funding capacity. However, founders typically sacrifice 20-40% ownership and accept board oversight. Exit expectations—through acquisition or IPO—drive aggressive growth targets that may conflict with lifestyle business goals.

Alternative Financing: Modern Solutions for Diverse Needs

Alternative financing has exploded in popularity, with fintech innovations creating options that traditional lenders can’t match. These solutions prioritize speed, flexibility, and accessibility over conventional metrics.

Revenue-based financing: Aligned incentives

Revenue-based financing provides capital in exchange for a percentage of future revenues until reaching a predetermined return multiple (typically 1.3-1.7x). This model aligns funder and founder interests—payments scale with business performance, protecting cash flow during slow periods.

Wing, a virtual assistant marketplace, exemplifies this model’s potential. After securing $500,000 from Efficient Capital Labs, they invested in targeted marketing and achieved 210% annualized growth without diluting ownership. The flexible repayment structure allowed aggressive reinvestment during high-growth periods.

Peer-to-peer business lending

P2P platforms connect businesses directly with individual investors, bypassing traditional banking infrastructure. Loan amounts range from $5,000 to $500,000, with interest rates between 6% and 30% based on risk profiles. Approval decisions rely on cash flow analysis and business performance rather than personal credit scores.

The streamlined process delivers funding within 2-7 days, making P2P ideal for time-sensitive opportunities. However, default consequences mirror traditional lending, including aggressive collection practices and credit damage.

Government and Grant Funding: Non-Dilutive Capital

Government grants provide non-repayable funding for businesses meeting specific criteria. Federal agencies awarded $4.2 billion in small business grants during 2024, with 68% supporting STEM and sustainability initiatives.

Federal grant programs

The Small Business Innovation Research (SBIR) program offers up to $2 million for technology development across 11 federal agencies. Rural businesses access USDA grants supporting agricultural innovation and community development. Competition remains fierce—only 15-20% of applications receive funding—requiring compelling proposals demonstrating clear social or economic benefits.

State and local programs supplement federal options with region-specific initiatives. Manufacturing grants, export assistance, and workforce development funds target local economic priorities. Small Business Development Centers provide free guidance on identifying and applying for relevant programs.

Strategic grant writing

Successful grant applications require meticulous attention to guidelines, measurable outcomes, and alignment with funder priorities. Professional grant writers achieve 3x higher success rates through expertise in crafting compelling narratives and managing complex requirements. Budget 40-80 hours for comprehensive federal applications, including research, writing, and required attachments.

2025 Trends: Technology Reshaping Capital Access

The financing landscape continues evolving rapidly, with technology democratizing access while creating new evaluation metrics. Understanding these trends positions businesses to leverage emerging opportunities.

AI-powered lending decisions

Artificial intelligence transforms underwriting by analyzing thousands of data points—from bank transactions to social media presence—within minutes. This comprehensive analysis enables approvals for businesses lacking traditional credit histories. Fintech lenders using AI report 90% faster decisions and 25% higher approval rates for minority-owned businesses.

Preparing for AI evaluation requires maintaining clean digital records, consistent online presence, and transparent financial management. Cloud-based accounting systems that integrate with lending platforms provide competitive advantages in automated underwriting.

Embedded finance integration

Payment processors and e-commerce platforms increasingly offer integrated financing based on real-time business data. Shopify Capital, Square Loans, and PayPal Working Capital analyze transaction histories to pre-approve funding within existing workflows. This seamless integration delivers capital in under 24 hours without separate applications.

Historical comparison shows dramatic shifts in small business financing preferences. Bank loan applications dropped from 43% in 2019 to 34% in 2021, reflecting both tighter lending standards and growing comfort with alternative options. This trend accelerated post-pandemic as businesses prioritized speed and flexibility over traditional relationships.

Building Your Capital Strategy

Successful funding strategies match capital sources to business lifecycle stages, growth trajectories, and risk tolerance. Pre-revenue ventures typically combine personal savings, grants, and angel investment. Growth-stage businesses leverage SBA loans and revenue-based financing. Scaling enterprises may pursue venture capital or strategic corporate partnerships.

I’ve observed that businesses using multiple funding sources report 37% higher satisfaction and achieve 2.1x more total capital than single-source dependents. This diversification creates negotiating leverage, ensures continuous access, and optimizes the cost of capital across different uses.

Your next steps should include documenting financial performance, clarifying funding needs, and researching options aligned with your industry and stage. Professional financial guidance accelerates this process—visit Complete Controller for expert support in building your customized capital strategy.

Frequently Asked Questions About Small Business Capital Sources

What are the three main types of small business capital sources?

The three primary categories are equity capital (selling ownership stakes to investors), debt capital (loans and credit facilities), and retained earnings (profits reinvested in the business). Each serves different purposes and carries unique advantages depending on business stage and goals.

How quickly can I get emergency business funding?

Merchant cash advances provide funds within 24 hours but carry steep costs (APRs up to 150%). Invoice financing offers a better balance, releasing 85% of unpaid invoice value within 1-2 days at 1-5% fees. For true emergencies, business credit cards provide immediate access.

Can startups qualify for SBA loans without revenue history?

Yes, SBA microloans specifically serve early-stage businesses, requiring only 6+ months of operation and 600+ credit scores. These loans provide up to $50,000 at competitive rates, though strong business plans and financial projections remain essential.

What percentage of equity should founders expect to give up?

Angel investors typically take 10-25% for investments under $500,000. Venture capital rounds often claim 20-40% ownership, depending on valuation and growth stage. Maintaining majority control (51%+) through Series A preserves founder decision-making authority.

Which industries receive the most small business grants?

STEM fields, clean energy, and agricultural innovation capture 68% of federal small business grants. Healthcare, education technology, and businesses owned by veterans or minorities also receive prioritized funding through specialized programs.

Sources

American Express. “Common Sources of Capital.” American Express, 2023.
altLINE. “5 Types of Equity Financing.” altLINE, 2023.
altLINE. “Small Business Loan Statistics (2025).” altLINE, 2025. https://altline.sobanco.com/small-business-loan-industry-statistics/
Efficient Capital Labs. “The Startup Founder’s Guide to Revenue-based Financing [2025].” ECAP Labs, 2024. https://www.ecaplabs.com/blogs/revenue-based-financing
Federal Reserve Banks. “Just Released: Findings from the 2024 Small Business Credit Survey.” Kansas City Fed, 2025. https://www.kansascityfed.org/community/community-connections/just-released-findings-from-the-2024-small-business-credit-survey/
Federal Reserve Banks. “Key Insights from the 2024 Small Business Credit Survey.” FedCommunities, 2025. https://fedcommunities.org/2024-small-business-credit-survey-key-insights/
Fundera. “Raising Capital for Startups: 8 Statistics That Will Surprise You.” Fundera, 2020. https://www.fundera.com/resources/startup-funding-statistics
Grants.gov. “Government Grants for Small Businesses.” Grants.gov, 2024. https://www.grants.gov
Investopedia. “Equity Financing.” Investopedia, 2024. https://www.investopedia.com/terms/e/equityfinancing.asp
LendingTree. “Pros and Cons of SBA Loans.” LendingTree, 25 June 2024.
Lightspeed. “9 Small Business Financing Sources.” Lightspeed, 28 June 2024.
NerdWallet. “Small-Business Financing Options.” NerdWallet, 11 Apr. 2024.
REIL Capital. “Small Business Financing Trends 2025.” REIL Capital, 2024.
Small Business Administration. “Small Business Loans.” SBA.gov, 2024. https://www.sba.gov
SoFi. “Peer-to-Peer Lending Overview.” SoFi, 2024.
SoFi. “Your 2025 Guide to Funding.” SoFi, 16 Dec. 2024.
Stripe. “Small Business Startup Capital.” Stripe, 2023.

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Jennifer Brazer Founder/CEO

Jennifer is the author of From Cubicle to Cloud and Founder/CEO of Complete Controller, a pioneering financial services firm that helps entrepreneurs break free of traditional constraints and scale their businesses to new heights.

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