How to Get a Loan if You are Self-Employed

If you are self-employed, it may be a little harder to qualify for a loan based on other borrowers who can easily furnish a W-2 form. Keep reading to find out how you can still qualify for a loan when you’re self-employed.

Check Your Credit Rating

Your credit history is probably one of the most important factors in qualifying you for a loan. Your credit score is used by lenders to gauge how and if you’ll be able to repay the loan. So if your credit isn’t that great, getting a loan could be extremely difficult – or if you do, you may be paying a great deal more in interest for the loan you’re seeking.

If your credit score isn’t in the higher 600s or above – your best bet may to be to wait before applying, and continue to build your score. You can increase your credit score by paying bills on time, rectify any past due payments, and keep all your lines of credit open.

Need to know your credit score? Visit https://www.annualcreditreport.com/index.action and be sure to check your credit report for errors too. Errors on your credit report can also affect your score, so you’ll want to make sure you review the report in detail to ensure all open lines of credit are truly yours, and that all charges and loan payments are legitimately yours.

Compile the Necessary Documents

Due to the fact that you are self-employed, more than likely your lender is going to ask you for more documents in order for you to qualify for a loan. Here are the most frequently asked for documents, that you’ll want to get organized for at least the last 2 years before you apply:

  • Bank statements
  • Profit and loss statements
  • Tax statements (Your 2 most recent tax returns, schedules and transcripts)
  • 1099 forms

Get Prequalified

Many lenders will prequalify you for a loan first before you actually need to apply. If this is an option you might be interested in, reach out to your lender and ask what might be needed in order to issue a prequalification (where you’d find out the amount you’d be approved for and the loan terms).

Decide About Applying

If you’re happy with your lender’s terms and rate, you’re now ready to apply for the loan. Or if you’ve been researching several different lenders to compare the loan rate that you’d be offered, decide which one you’d like to apply with.

Lenders will typically offer online applications, or you may be able to call and apply over the phone or in person. This is where all the documents from above will come in handy. You’ll be asked detailed questions about your business income and finances. Having everything ready to go in advance will streamline the process.

Await Loan Approval and Funding

Once your loan application is fully submitted and complete, your lender will review your documentation and let you know if you were approved for the loan. Once your loan is approved, the funds will be deposited into your account and you’ll be able to continue to improve your credit rating, finance a large purchase, or fund your business needs.

At First Financial, we understand that not every business is the same – therefore not every loan is going to be the same. We pride ourselves in personalized service and reasonable timelines, keeping your business in mind. Email us at business@firstffcu.com and we’ll be happy to provide you with more information on loans for your business. Or, if you’re self-employed and looking for a consumer loan for personal use – check out the Loan Source page on our website. We have various consumer loans too!

 

A First Financial membership is required to obtain a First Financial loan and is available to anyone who lives, works, worships, volunteers or attends school in Monmouth or Ocean Counties in New Jersey. See credit union for details. A $5 deposit in a base savings account is required for credit union membership prior to opening any other account/loan. Federally insured by NCUA.

Article Source: CUInsight.com

Business Owners: Watch Out for COVID-19 SBA Loan Scams

If you’re a business owner, you may have already applied or are still planning to apply for a loan to assist your business by paying employees through the SBA’s (Small Business Administration) CARES Act Paycheck Protection Program (PPP) or Economic Injury Disaster Loans (EIDL) program. Both programs recently got billions of dollars in new funding. However, while you’re focused on getting a loan – scammers may be hoping to trick you into giving them sensitive business information, like your bank account numbers, employees’ Social Security Numbers, and your money.

Below are some guidelines to prevent you and your business from getting scammed as you apply for a small business loan.

Things to Do:

 Things You Shouldn’t Do:

  • Never pay for information. All the information from the SBA is free at sba.gov/coronavirus.
  • Don’t pay in advance for a government business loan. You will never have to pay anything up front to get an SBA loan.
  • Don’t give your information to anyone who calls, emails, or texts you. The SBA will not call unsolicited to find out information about you or your business, or to ask you to apply for a loan. The SBA will not send you emails or text messages asking for sensitive information. If you get an email or text like this, it’s a scam.
  • Don’t apply for a loan without verifying the lender. Only SBA authorized lenders can provide PPP loans, and the other loans (bridge loans, debt relief loans) that may be available through SBA directly. To find an SBA authorized lender in your area, use this SBA tool.
  • Don’t click on links or reply to emails or text messages from unknown senders. If you click on any links typically sent in these types of communications, you could download malware to your device or be connected to a scammer. Also be on alert for fraudulent calls. If you think your business has been contacted by a scammer, report it at ftc.gov/complaint

To inquire about applying for a PPP Loan for your small Monmouth or Ocean County NJ business, please email our Business Development Department at business@firstffcu.com. First Financial is an SBA approved lender.*

We are here to help our local small businesses during this difficult time!

*Please be advised that due to high volume in regard to requests with PPP Loans, our response time may be delayed. We will get to each inquiry in the order in which it was received.

Article Source: Rosario Mendez of Consumer.FTC.gov

Do You Know What It Takes to Run a Successful Side Hustle?

The process of finding financial security has gone through some dramatic changes over the last few decades. As recently as the 1980’s, conventional wisdom suggested following a career path that went something like this: Go to school. Get a good job. Work for one company for 20 years or more. Collect a pension. Retire in relative comfort.

If that approach sounds completely foreign to you, you’re not alone. On his personal finance blog, 20SomethingFinance, G.E. Miller observed, “Most twenty-somethings have never and (unfortunately) probably will never sniff the sweet security provided by a pension plan.” So, if there’s almost no hope of finding financial stability by following same path as previous generations, how can set yourself up for success? Two words: Side. Hustle.

What Does “Side Hustle” Really Mean?

With more and more people realizing that working a single job leaves them living paycheck to paycheck, side hustles are experiencing a considerable spike in popularity. Since we’ve already used the phrase twice in this article, you may be wondering exactly what constitutes a side hustle. Is it a second job? An online business?  In his new book (conveniently titled Side Hustle), Chris Guillebeau provides some much needed clarity. “A side hustle is not a part-time job. It is an asset that works for you.” This definition reveals a crucial distinction between trading hours for dollars, and building something that pays dividends for years to come.

Side Job vs. Side Hustle

Thanks to a surging economy and advances in technology, finding a side job is easier than ever. From Etsy to barista gigs and seasonal retail, potential work opportunities are plentiful. But if Guillebeau is right, the additional income you can earn from these jobs might not give you the long-term security you want. So, are they even worth pursuing? Do they offer any asset-building benefits? Absolutely. You just have to adjust your motivation for doing the work.

Rather than focusing on the job itself or the hourly wage it provides, entrepreneur Jeremiah Dew recommends looking a little deeper. “Find an endeavor that makes you become a better person—something that requires you to build a skill set that will help you in future ventures as well.” Sell crafts on Etsy in order to get better at e-commerce and digital marketing. Become an Airbnb host to upgrade your customer service skills. You get the point.

Success Requires a Different Perspective

When you’re trying to earn additional income, it can be tempting to jump at the first opportunity that offers real money. And while a traditional side job isn’t necessarily a bad thing, be careful not to confuse it with a legitimate side hustle. You may be able to earn extra money, but if your income is still tied to your ability to show up and perform a specific set of tasks, you’re not developing an asset. However, if you utilize those opportunities to gain experience and lessons that transcend a specific job or industry, you may be on your way to developing a successful, sustainable side hustle.

You Won’t Win Alone

Now, before you rush out and start a supplemental career, it’s important to remember the value of a good mentor. As the old saying goes, “A smart person learns from his mistakes. A wise person learns from the mistakes of others.” If you’re going to be wise about building your business, it pays to develop a relationship with someone who has experience running a business of their own, someone who made mistakes you can learn from. Whether you find them yourself or ask for suggestions from people you trust, the impact of a business mentor can be priceless.

From a financial standpoint, business ownership requires money management skills you won’t learn as an employee. Fortunately, your local credit union is an outstanding resource where you can find the knowledge, expertise, and programs to help you navigate the often-confusing early stages of your side hustle. By relying on their services and recommendations, you’ll be able to sidestep potential pitfalls and put yourself in a position to succeed. To learn more about the Business Services at First Financial, click here.

Teach Your Kids to Take a Stand — A Lemonade Stand

Long before Beyoncé transformed it into a cultural touchpoint, lemonade was the commodity of choice for childhood business ventures. Perhaps you had a lemonade stand of your own, or maybe you just knew someone who did. Either way, the memories of ice-cold refreshment probably ride on a warm wave of nostalgia. If your enterprise was especially successful, you might even hear a faint “cha-ching” as you reminisce.

Fast forward a decade or two, and now you find yourself juggling the demands of family, friends, and career. Thanks to the latest technology, it’s easy to let your kids spend their summer vacation drifting along on a digital stream of Snapchat streaks and Fortnite marathons. With the dog days of summer approaching, you have a perfect opportunity to shake up your child’s summertime routine with a little old school entrepreneurship. It’s time to bring back the lemonade stand!

Let your kids in on the fun. When you were young, running a lemonade stand didn’t feel like a job—it felt like freedom. So, don’t worry that encouraging your children to work will somehow rob them of their summertime fun. The venture can be fun, and the lessons they learn from operating a small business can last a lifetime.

Goal setting

Believe it or not, this one comes pretty naturally to kids. If you ask them what they want to do with the money they earn, they’ll probably have at least one goal already in mind. It may be a video game, a bike, or new clothes, but whatever it is, their motivation won’t be hard to find. When they finally save up enough to buy what they want, the sense of accomplishment will be something you can build on for the rest of their life.

Entrepreneurship

Operating a lemonade stand is an excellent way to help your children learn that it costs money to create something. After all, lemons and sugar aren’t free. Understanding economic concepts like cost of goods and profit margins, will give your kids a valuable perspective with real-world applications. As they plan their drink prices, let them decide what to charge. Positive or negative, the lessons they learn from experience will help them with future budgeting.

Responsibility

Like many things in life, lemonade stands are super fun at the beginning! But after a few hours sitting in the sun or waiting out a thunderstorm, there’s a pretty good chance your little entrepreneur will want to close up shop. While it may be frustrating (for you and them), this scenario provides an excellent opportunity to teach them that you can’t just walk away when you get bored. And let’s be honest, we can all use this reminder from time to time, can’t we?

Creativity

Challenge your child to think about how to separate themselves from their competition. (Of course, this may be hypothetical competition since modern-day lemonade stands are probably few and far between). Depending upon their age, your little one may focus on colorful sign design at first. This focus is understandable, since making the sign is half the fun. But beyond that, feel free to offer creative suggestions. Could they provide a sugar-free alternative? Maybe offer an iced coffee alternative to appeal to more customers? How about spreading the word with a social media post? Should they accept payment through Venmo or PayPal, or just keep it cash only? Like a child’s imagination, the options are limitless. So is the fun!

At this point, you may feel like opening up a lemonade stand whether your kids are interested or not! Channel that excitement and energy into helping them see the fun-filled potential of the idea, and don’t be afraid to get in there and help them when they need it. The time spent together will be even more valuable than the money earned and the lessons learned.

Happy summer lemonading!

Down to Business: Grow Your Seasonal Business

family-freezed-ice-cream-bicycle-icicle-tricycles-ice-cream-cart-006-e1446849683144-632x597Let’s talk about seasonal businesses for a moment. If you take a drive south on Route 35 from Point Pleasant Beach through Seaside Heights, you’ll see in high definition the impact of a season.  In a matter of one month, the Jersey Shore will turn from an eerie ghost town into a bustling, crowded resort.  Blinking lights turn to stoplights, and you actually have to pay the parking meter – that is, if you can find a spot.  Lifeguards are on duty, you have to pay to walk on the beach, you can only surf in a roped-off, one block area and fishing is restricted to off hours – ay yi yi!

Seasons can be almost anything: there is football season, car buying season, rainy season, hockey season, dry season, holiday season, boating season, fluke season, hunting season, tax season, hurricane season, Lent is a season…we could go on and on and on.  What further complicates this idea is geography.  Different seasons begin and end on different dates all over the world.  How do you keep track, let alone run a business within a season?

The most successful entrepreneurs are able to support two alternating seasons, but can you?  For example, a man runs a successful parasailing business on the Jersey Shore from May-August, but Puerto Rico’s tourism season runs from October-March, so the parasailing operator sets up shop down in the Caribbean – while old man winter has the northeast in a deep freeze.  Similarly, the landscaper from March-October equips his trucks with snow removal gear for November-February, it’s a win-win.  The key is finding balance to turn the off season into a busy season.

These ideal, perfectly balanced business models are very difficult to find, especially for a new entrepreneur.  If you are a new business starting out, or even an existing seasonal business searching for balance, First Financial is here to help!  Our Business Accounts do not have a minimum balance or monthly fees, so when you are carrying thinner balances during the slower months, you won’t have to pay for it.  You can spend less time worrying about bank fees and more time searching for that winter gig to compliment your seasonal summer business! Let us help you expand and get your off-season business plan in tact – contact us by emailing business@firstffcu.com today.

Down to Business: Remember Way Back When…

business man hand use mobile phone streaming virtual business ne

Remember way back when, what life was like before the advent of the Smartphone just 20 short years ago? Do you remember waking up to the voices on an alarm clock radio? You just knew that today was going to be a good day when that song happened to be playing when you woke up!  Speaking of clocks, do you remember when people actually forgot to manually turn their clocks back and arrived an hour late?! Getting lost was both fun and a great excuse for being late, is it even possible to get lost now?

I could go on and on, and I will!  Dating is so easy now, you can just Google your date and find out where they live, where they work, who their friends are, if they’ve been arrested, if they owe anyone money, plus no one can lie about their age anymore!  Remember when researching a topic meant reading chapters of books or encyclopedias written by legitimate experts who had spent most of their life devoted to that subject? Now we have comments, blogs (can you even cite those??) and news articles that we see on the internet – because obviously if you see it on the internet it must be true.

The mobile phone has had quite an impact on the business world as well.  Consider the near extinction of camera stores, watch manufacturers, movie rentals, record stores, print media, and book stores to name a few.  Travel agencies are the new pay phones and the USPS is the new UPS.

You can earn a master’s degree, find a job, work that job, grocery shop, even get married, and raise virtual children right from your couch.  Thanks to your mobile phone, you can conceivably live your entire life without ever seeing the light of day.  The mobile internet certainly has changed the world as we know it!

In the Business Development department at First Financial Federal Credit Union, we use mobile internet banking to make doing business with us extremely easy. We are literally a call, click, or text message away – providing personalized attention to each and every business member.  To help save time and money, we offer the latest in mobile technologies, and we have no monthly maintenance fees.  Getting started with a business account at First Financial is also extremely easy. If you are thinking of starting a business or are tired of the fees on your existing business account, email business@firstffcu.com today.