New State Program Backs Small Business Loans
The first months of the year are especially valuable for small-business owners to look at tax liabilities for the last year, with a view to reduce taxes and enhance profits for 2001.
The California Society of Certified Public Accountants urges entrepreneurs to resist the urge to take a break from early planning coming off the holidays. For those who ignored this task in January, then this month is the best time to get started, said Curt Olsen, spokesman for CalCPA.
There are still some methods available to help lower small business taxes for 2000. For starters, pay bonuses to employees before March 15 and deduct them , along with related payroll taxes , as if paid on Dec. 31, Olsen said.
This tactic does not apply to owners, shareholders, officers or other “prohibited” individuals. Check with a tax advisor or CPA to explain how accrual-based businesses can use this tip, he said.
Also, for businesses using accrual accounting, it’s time to carefully add up deductions for expenses incurred before year-end , although bills were not received until after 2001, Olsen said.
Also, look at taking advantage of the fixed assets expensing election. Although limited to $20,000 for 2000 taxes, this option covers purchases that otherwise must be depreciated over the life of the assets , production machinery, computers, furniture and office equipment, he said.
To make the most of the opportunities in 2001, develop or update a solid business plan. This may seem tedious, but it’s an essential tool for attracting financial backing or strategic partners. And it’s easier to do it now than to put it off, Olsen said.
Schedule a “tune-up” with your CPA , especially if your figures differ from your accountant’s numbers. Reduce the chance of errors by confirming in-house accounting packages are up to date, computer capability is keeping pace with software requirements and transactions are properly entered and classified in the general ledger.
For more tips, visit the CalCPA Web site (www.calcpa.org).
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Loan Guarantee Aids Local Biz: Two San Diego businesses have recently been able to take advantage of a state program that backs small business loans.
In the Barrio Logan area of San Diego, Chuey’s Numero Uno restaurant and cantina is using a $50,000 loan guarantee from the California Southern Small Business Development Corp. to expand into larger quarters.
The restaurant, which got its start in 1956 in a Quonset hut, will become a 15,000-square-foot multiuse eatery with a game room, entertainment stage and more.
The loan guarantee is crucial to the expansion, said owner Luis Garcia, who grew up working the family business and purchased it from his father in 1993.
“Without the loan guarantee, we probably would not have been able to move forward in our expansion plans,” he said. “The state program really came through for us.”
Similarly, Dr. M. Tarek Kady, a San Diego pediatrician, used a $103,000 loan guarantee to purchase the Gateway Pediatrics & Family Care Group, where Kady had been employed since 1995. The clinic, which serves a predominately Latino population, is located in the San Diego Enterprise Zone.
These are just two of the 460 loan guarantees issued by the state’s Loan Guarantee Program during the first nine months of 2000. The loan guarantees totaled $61.1 million, said Norman Williams, spokesman for the California Technology, Trade & Commerce Agency.
For the fiscal year ended June 30, the program issued 631 guarantees that backed $80.8 million in loans, he said.
“Loan guarantees provide an opportunity for small companies to take advantage of positive market cycles,” said Lon S. Hatamiya, agency secretary. “Looking forward, we believe there will be tremendous opportunities for small and medium-sized businesses.”
There are now Financial Development Corporations open in Santa Rosa, San Francisco, Sacramento, Salinas, Fresno, Los Angeles and San Diego.
Additional centers are expected to open this year in San Jose, San Fernando Valley, Orange County and Ontario.
More information is available at the Web site (www.commerce.ca.gov).
Tips On E-Business: Small business owners looking to enter the world of e-commerce can get tips at a morning meeting sponsored by the Escondido Chamber of Commerce.
Tom Michael, the founder, president and CEO of Michael Management Corp., will present a session on “How to get started with e-business.” He will also be available to answer questions after the meeting.
Michael has been a technology consultant since 1993 and has focused on e-business strategy since 1998. He has worked with Fortune 500 companies such as Procter & Gamble, BP Amoco and Enron.
The seminar will be held at 7 a.m. Feb. 23. The event is $3 for members; $5 for guests.
To sign up, call (760) 745-2125.
Send small business and retail items to Zion at lzion@sdbj.com, or call (858) 277-6359, Ext. 112. The deadline for the March 5 column is Feb. 22.