Quick Answer: Fixed capital is money tied up in long-term assets like buildings, equipment and vehicles. Working capital is money used to run the business day to day, such as inventory, payroll and bills. Fixed capital helps a business grow. Working capital keeps it running. Every business needs two kinds of money. One kind buys […]
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Invoice factoring vs line of credit is a choice between two common types of working capital financing. With invoice factoring, you sell your unpaid invoices to a company for quick cash. With a business line of credit, you borrow from a set credit limit, repay it and borrow again. This guide is for small business […]
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Quick Answer: The SBA Acquisition Loan Rules in the SBA’s new lending rulebook, SOP 50 10 8.1, take effect October 1, 2026, and make buying a business with a 7(a) loan harder to qualify for. First-time buyers must now show 1.25x debt service coverage instead of 1.15x, projections can’t be used to meet that bar, […]
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If you’re applying for an SBA 7(a) loan in 2026, one number matters more than it used to: $350,000. That’s the new ceiling for what the SBA classifies as a “7(a) Small Loan” – down from $500,000 under the prior rules. The change came through the SBA’s SOP 50 10 8 update and is now […]
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A current ratio is a liquidity metric that measures a business’s ability to pay its short-term obligations using its short-term assets, calculated by dividing current assets by current liabilities. Lenders use it as a fast, standardized read on whether a business can cover the bills coming due in the next 12 months. This guide is […]
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The debt service coverage ratio, or DSCR, is one of the first numbers a lender checks before approving a business loan. It measures whether a business generates enough cash flow to cover its debt payments. Lenders use it to decide how much risk they’re taking on, and how much they’re willing to lend. This guide […]
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Bankruptcy is not a personal failure. Sometimes, a business simply gets hit by too many problems at once. Sales can drop. Customers can pay late. Expenses can climb. One unexpected financial setback can put serious pressure on your cash flow. If that happened to your business, take a breath. Your business credit may have taken […]
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The busy season can make a seasonal business look incredibly healthy. Then sales slow down, bills keep arriving, and suddenly cash feels tight. That is where financing for seasonal businesses can help. The right financing can give you enough working capital to cover payroll, inventory, marketing, equipment, and everyday expenses until revenue picks up again. […]
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If you run a small business, sell products online, or work as a freelancer, you’ve probably heard about Form 1099-K. For many business owners, receiving this tax form creates unnecessary stress because they assume it automatically means they’ll owe more taxes. The truth is much simpler. A 1099-K doesn’t calculate your tax bill. Instead, it […]
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