How does a small business loan work?

How does a small business loan work

Everything You Need To Know About Small Business Loans

At the beginning of a business’s life, the owner will likely need a loan to turn their ideas into something tangible. A person may need equipment, a building, or vehicles to start their business. However, small business loans differ in many ways from normal loans. It is important that anyone thinking about starting a small business learn all they can about a small business loan.

Where Do I Get A Small Business Loan?

Banks, credit unions, and online lenders can all provide a person with a small business loan. Take into consideration the different interest rates before you make your decision. The Small Business Administration can assist you with different aspects of beginning a business, but you cannot get a loan from the SBA. The SBA will work with you, alongside lenders, to help you secure your cash.

How Do I Apply For A Small Business Loan

Be prepared for a long, strenuous process. A lender will require a wide range of information. They will ask you about your previous work experience, including whether or not you have run a business before. The lender will also need to know exactly what you will be purchasing with the money. You will need to come up with a business plan prior to meeting with lenders. They are not going to give you their money unless they are confident in your plan. You will also have to provide the lender with basic information like identification, tax records, and a credit report.

An Additional Promise

Chances are you will be required to promise the lender that if you can’t pay back the loan they may seize your other assets. If you fail to pay back the loan, whether or not you agreed to this, you could find yourself in civil court. It isn’t uncommon for a lender to sue a person who cannot pay them back.

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What is the CBSV?

What is the CBSV

CBSV, or the Consent Based Social Security Number Verification Service, is a part of the Social Security Administration, an agency within the U.S. government that was created by Franklin D. Roosevelt during the Great Depression.

Indeed, when companies or other entities use CBSV, there are many reasons for them using it. Some of these include abiding by specific licensing agreements, doing background checks or credit checks. Companies that are involved in mortgage and banking services may also use CBSV.

What Does CBSV Help to Verify?

CBSV helps to verify the name of the SSN (Social Security Number) holder, their DOB (Date Of Birth) as well as an SSN match to SSA’s records. With CBSV, they will provide either a “Yes” or “No” indicator. In the case that the person being verified through the CBSV is deceased, CBSV will give a death indicator.

What Kinds of Fees may be involved when using CBSV?

In 2018, the Social Security Administration requires a one-time 5 thousand dollar fee for enrollment by companies as well as a fee every time there is a per-SSN verification transaction.

How Does CBSV Work With DHS I-9’s?

When discussing the Department Of Homeland Security’s I-9’s, CBSV does not identify citizenship, identity, eligibility of employment, or connect with the Department of Homeland Security system.

What Kind Of Identification Does My Company Need To Enroll In CBSV?

A business entity must have an Employer Identification Number, or EIN to enroll in SSA’s CBSV program. You can contact the IRS about getting an EIN. However, the Social Security Administration has the discretion to close enrollment for a business entity and suspend CBSV services at any time.

Who Can Interested Parties Contact If They Have Any Questions About CBSV?

For those interest parties who want to learn more about CBSV, they can email their questions to

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How would I know if someone stole my identity?

How would I know if someone stole my identity

Once an identity thief has your personal information, he or she can run wild with it. By recognizing the signs of identity theft, you can take immediate action to protect yourself from any further financial damage or harm to your reputation. Keep these top warning signs in mind as you safeguard your personal and confidential information.

Unusual Account Activity 

An identity thief might start to use your credit or debit card information to make cash withdrawals or purchase goods. You might log into your account and discover mysterious debits or charges at places you do not patronize. You might find that your shipping address has been changed to some other address. You may stop receiving mail related to your longstanding credit cards or bank accounts.

Accounts You Do Not Recognize 

Once an identity thief has your personal information, he or she could use it to open new accounts in your name. You can find this by checking your credit report. You might also notice new mailings about credit cards or lines of credit that you never applied for. Debt collectors might start to call you for accounts you never knew about.

Service Refusals 

If an identity thief attempts to use your medical insurance, you might start to get bills for services you never received. When trying to buy a new insurance plan, you might be denied due to a condition you do not have. This could happen if someone else has been using your identity to get treatment.

Legal Notifications 

Someone could steal your identity and file false tax returns with the state tax department or the IRS. You might get a notification from the IRS that you were already claimed as a dependent. The IRS could send you a letter stating that you earned income from an employer where you have never worked. You might get property tax bills, liens or utility bills for places where you do not and have never lived.

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What can be used as proof of income?

What can be used as proof of income?

When you apply for a loan, whether it’s a car loan, a mortgage or a personal loan, the lender generally will require you to show proof of income. The lender does this because it wants to be sure you can afford the monthly payments and be able to pay the loan back in full. There are a few different ways you can prove your income, and a lender may require you to provide more than one document.

Pay Information
One of the easiest and most common ways to prove your income is to provide income on your pay. If you work at a regular job, one or two of your most recent pay stubs may be enough to prove your income to your lender. If you work as a contractor or freelance worker, you may be able to offer a payroll schedule or a letter from the person or company who employs you.

Tax Returns
Lenders often ask for income tax returns as proof of income. Unlike pay stubs, which show the income you are making over a couple of weeks or a month, tax returns show your income over a longer period of time, which shows whether your income is stable or not. Many lenders ask for both recent pay stubs and a year or two of tax returns.

Bank Statements
Another document that a lender might ask for to prove income is a bank statement. If you are receiving your income from an annuity or some other investment vehicle, a bank statement can show that there are regular deposits that have continued over a long period of time. If you have earnings directly deposited into your bank account, this will also show up on your bank statement.

Proof of income is just one level of due diligence a lender will do before approving you for a loan. You should be prepared to undergo a thorough vetting that may take a few days.

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How is a line of credit different from a loan?

How is a line of credit different from a loan

Many consumers looking to borrow money wonder whether they should go with a personal loan or a line of credit. While both lending products have similarities, the way they work is quite different.

A line of credit is seen as a more flexible borrowing solution. It works in a way similar to a credit card, as you have a fixed limit on how much you can borrow. When you get a line of credit, you can draw any amount up to the limit in various ways. The most common one is by writing a check, but many financial institutions also provide you with a credit or debit card that is tied to your line of credit.

As a line of credit is a revolving loan product, you can repay any part that you’ve used and draw on it again. You don’t need to make any payments unless you use your line of credit. The minimum amount that you have to repay and the interest charges associated with the line of credit will vary from one financial institution to the next. A line of credit is a good solution for those seeking a flexible credit product that they can use whenever they need to.

When you get a personal loan, you receive the entire amount of the loan as soon as it’s approved. This also means that you’ll start paying interest on the full amount of the loan as soon as you’ve obtained it. You pay off the loan in installments based on a schedule that was set at the beginning. The term of the loan varies but is typically between one and five years. In most cases, you’ll make the same payment each month, which reduces the amount that you owe the lender until the loan has been paid off in full. In most cases, lenders also allow you to make additional payments or pay off the loan early.

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