By Jacob Maslow–Branded Content
Trying to feel out the taxes for your small business is difficult enough, but once you finally figure out how much you owe, what do you do if you do not have enough cash flow to cover it? Don’t panic you have options. Several financial institutes offer a variety of small business loans. You will be able to find a loan that will work for your situation.
Using A Loan To Pay Off Your Small Business’s Tax Debt
When you owe a large lump sum for your tax debt you may not have enough liquid assets to cover it. If this happens you should immediately contact a financial institute and explore the great options that they currently have in business loans. Interest rates are incredibly low right now so you will be able to find a solution and a payment that can work for your small business.
Financial Institutes will offer several different options in small business loans but these are a few common loans that could help when it comes to covering your tax debt …
Business Line of Credit
No matter what type of company you own or what situation you are currently in, every business should have a line of credit open for emergencies. A line of credit is best explained as what would happen if a credit card and a checking account had a baby.
This account offers your company access to a set amount of credit that will be charged a set interest rate on any rotating balance. Whenever the account has a balance it will also have a minimum balance due each month until the balance is zero.
To use the credit you use checks. You can take a check and cash it if you need cash or you can use the check to pay the person you owe directly. This is a great option for when you have an emergency and need access to cash quickly.
Term loans are the most common type of loans that are issued by financial institutes. These loans are for a set amount, with a set interest rate, and are to be paid within a certain period of time.
If that period is shorter you will typically be offered a lower interest rate and you will pay less in financial fees. On the other hand, If the term is longer your interest rate and total financial fees may be higher, but your monthly payment will be lower.
Which one is better for your small business will be dependent on several factors. If you can not afford the higher payment it may be better to go with the longer term and just pay extra when you can.
Personal Loan for Business
If you are not able to get approved for a loan under the TIN for your small business the financial institution may offer this option. It will be a personal term loan that will go against your personal credit instead of your company’s credit. Only do this as a last resort.
Paying Your Taxes Does Not Have To Include A Panic Attack
Take a deep breath in your nose and release it out your mouth. You know have a plan you are going to have no problem paying your taxes for your small business. Your financial institute will be able to match you with the best loan option for you.
If your company will qualify for a business line of credit you should go ahead and open one so the next time you have an emergency, you will not have to panic you will just write a check and have the peace of mind of knowing that everything will be ok.
Photo Courtesy of Jacob Maslow//Cosmic Press