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Banking for a new business

Submitted by Dick McKenzie, SCORE Counselor

 

What does a “Lender” look for when considering a business loan to a new business?

There are four (4) basic questions a “Lender” needs to answer in making his or her decision.

1. What is the loan to be used for?

2. How much is the loan for?

3. How does the loan get repaid?

4. If repayment is not as planned, how does the “Lender” get repaid?

To answer the first two questions, the “Lender” is looking for a Business Plan. The key elements of the plan to include: type of business, the organization, a marketing plan, their competition and why the business will be successful; what is its niche or advantage over other types of businesses in the same market?

To answer the 3rd and 4th questions the “Lender” will want to review the financial information, which should include: 1) the borrower’s investment in the business, 2) a 24 month income and cash flow projection prepared by month and the assumptions used to determine the projections, 3) a pro-forma business balance sheet, 4) personal financial statement and 5) personal income tax returns for the past 3 years (including all schedules).The key elements that the “Lender” is trying to determine is the client’s ability to provide the necessary equity investment to start the business and necessary funds (personal and business) to operate the business until cash flow is sufficient to maintain its operation.

To cover the initial risk the “Lender” will be looking for collateral support to cover any potential shortfall. In addition to the business assets, support will normally be in the form of a personal guaranty supported by personal assets which may include a 2nd mortgage on their home, savings, CSV life insurance an/or marketable securities.

When meeting with the “Lender”, the “Borrower” should treat the meeting with the “Lender” as a job interview. He or she should have a short well rehearsed oral presentation answering the four basic questions. The “Borrower” should have copies of the information outlined above to give to the “Lender”. The professionalism in both the presentation and the information will have an impact on the time and effort the “Lender “will put into making a decision. The easier it is to review and understand the information, the easier it is for the “Lender” to make a decision.

As the “Lender” is not going to review the information at this initial meeting, volunteer to answer any questions either by phone or in person he or she may have after their review. Also ask for a time when you could expect to hear back from them. Prior to meeting with a “Lender”, you should obtain a copy of your personal credit report. If there is derogatory information; be able to address the reasons for its occurrence.

Many of the loans will relate to the SBA (Small Business Administration) ask for information and the requirements for guaranteed loans and direct loans. If your loan request is denied, make sure that you are provided a letter detailing the reason for the turn down.

For free business counseling, contact SCORE at (616) 771-0305 or email score@grandrapids.org. Visit their website at www.scoregr.org

 

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Spectrum Health United Hospital named one of Becker’s Hospital Review 100 Great Community Hospitals

Spectrum Health United Hospital in Greenville, Michigan was recently listed as one of Becker’s Hospital Review “100 Great Community Hospitals”.
“We are proud of the efforts of our providers and employees who have contributed to our hospital achieving this designation,” said Tina Freese-Decker. President, Spectrum Health United and Kelsey Hospitals. “We appreciate their hard work and commitment to excellent patient care.”
Becker’s Hospital Review has published its list “100 Great Community Hospitals.” This list recognizes community hospitals dedicated to high-quality care and service to the community. The hospitals have fewer than 550 beds and minimal teaching programs, and are often located in rural areas as the only hospitals in their communities. Whether independent or part of a larger health system, the following hospitals have worked to continually provide the quality of care and expeThe Becker’s Hospital Review editorial team selected community hospitals based on rankings and awards from iVantage Health Analytics, Truven Health Analytics (formerly Thomson Reuters), Healthgrades and The Joint Commission. Nominations for the list were also considered.

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ChoiceOne Bank Continues Financial Support of Sparta Township Historical Commission’s Museum Operation

BUS-Choice-One-donation-Sparta-Township
SPARTA, MI (June 27, 2013) – ChoiceOne Bank’s support of the Sparta Township Historical Commission (STHC) continues in 2013 with a recent donation of $5,000. James Bosserd, President and CEO of ChoiceOne Bank, said the Historical Commission hopes to raise a total of $7,500 to purchase new display cases, bookcases, provide additional storage space, and connect a wireless copier and printer at the office.
“The new equipment will allow visitors to gain easier access to information now available,” Bosserd added. He said the STHC is developing new displays with one already scheduled for November 9th as part of a fundraising dinner — Remembering our Veterans—at the Sparta Civic Center. Tickets are available for the event by contacting the Commission at 616-606-0765.
Bosserd emphasized that ChoiceOne Bank has a solid relationship promoting the preservation of local history. He recalled the bank was instrumental in helping the Historical Commission to purchase its current building last year, located adjacent to the Civic Center.
Bosserd said celebrating Sparta’s history and putting it on display for everyone to see is a great way to promote community heritage and spirit. “As the local community bank, we want to help keep our communities vibrant, and our museum is an important part of Sparta.
The Sparta Township Historical Commission strives to preserve and keep local history alive for future generations. “Any donations of local historical items and financial support are always appreciated,” Bosserd noted.

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ASK SCORE

Do I need a corporation, a partnership or an LLC for my business?

Submitted by Bob Cooper, SCORE Counselor

Prior to starting anew business it is important to select the proper legal structure.
It is possible to start a business by yourself without creating any separate structure; this type of structure is commonly called a “Sole Proprietorship”. Ina Sole Proprietorship all income and expenses are recognized by you on your income tax return, and the business tax ID number would be your social security number. The Sole Proprietorship is the simplest form of business structure, and would work well if the business had little likelihood of incurring liability,or costs, as the result of something going awry. The owner is liable for all debts and obligations of the business, and therefore the owner’s property is subject to claims of business creditors.
A husband and wife filing jointly can be a Sole Proprietorship. A name for the business can be adopted by the sole proprietor and an assumed name certificate is filed with the County Clerk ‘s office.
Every form of business structure other than the Sole Proprietorship is formed by making application to the State of Michigan ,because every other form of business must receive approval from the State before operating. Also, every other form must receive a tax ID number from the Federal Internal Revenue Service in order to file documents with the IRS.
A second form of business structure is a general “Partnership” which is formed by two or more people who will own and operate the business together. The Partnership is controlled by a formal partnership agreement stating a partner’s contribution,control, management and the sharing of losses and profits. The agreement should also attempt to spell out what happens when a conflict arises, such as death of a partner or disagreement between the partners. A Partnership continues by agreement of the partners, unless it is ended by certain acts, such as the death of a partner, as provided by State law. All partners in a general Partnership are liable and responsible for all obligations of the Partnership. A name for the business can be filed as an assumed name with the County Clerk’s office.
A third form of business structure is a Limited Partnership which simply means that one or more of the partners operate the business while others are strictlyinvestors.
Another form is the “Limited Liability Company”, commonly called an “LLC”. The benefit of the LLC is to limit the liability of the owners. When someone has a claim,the claim must be made against the company and not against the owners, as long as the company is operated correctly. The management of the LLC is defined by a management agreement and filed with the State at the time the LLC documents are filed. An LLC files an information return with the IRS. This return tells the IRS the names of the owners and the percentage amount of the income received by the business upon which each owner must pay the taxes.
A “General Corporation” is another type of business structure. The Corporation is the most widely used but the most complex form of structure from the standpoint of paperwork and administration. However the Corporation allows for easy investment by the use of stock or shares in the company. The Corporation has an identity and existence separate from its owners or shareholders. The Corporation gives the most protection to the owners, or stockholders, from claims,which can only be filed against the Corporation. The corporate structure shields the owners and/or stockholders from liability for wrongful actions of the corporation. The Corporation can have a perpetual existence, unlike the other types of business structure. A Corporation is required to file a tax return separate form the tax returns of the stockholders, and is subject to taxation on its income. The Corporation must request permission from the State to do business under a different name.
In the business structures that provide a shield from liability for the owners, the owners must operate the business separately and distinguish it from themselves, as a separate entity.
For free business counseling, contact SCORE at (616) 771-0305 or email score@grandrapids.org. Visit their website at www.scoregr.org

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Discount Fireworks

BUS-Fireworks-storeNow that certain fireworks are legal in Michigan that were previously only available out of state, you don’t have to cross the border to get them.

Discount Fireworks, located at 13903 White Creek, south of 17 Mile Road, is owned by Mike Pease, who has been in the fireworks business for 33  years. They sell fireworks for home users and small shows for associations. They are direct importers and wholesalers, and offer fireworks at a competitive price, including their own brand, Mega Ton. They hope to eventually expand their business to new stores throughout the state.

Stop by and see what they have to offer. Hours are 10 a.m. to 8 p.m. and will be open later closer to July 4th.

 

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MW Memory Care in new location

BUS-MW-Memory-Care

MW Memory care opened only a few short months ago, but they are growing rapidly and recently moved into a new location at 11629 Northland Drive NE, just south of 14 Mile Road. They held an open house at their new location Monday, June 17.

The Home Care and Home Health Care business is a Christian-based company offering pastoral care and counseling to patients and families, along with many other health and wellness services. They are family-owned, and care not only for the patient but the whole family as well. They now accept Medicare, Medicaid, VA Benefits, CareCredit, long-term care insurance, private pay and other health insurances.

Future plans include opening a satellite office in northern Michigan.

Business hours are 9 a.m. to 5 p.m. with a 24-hour care hotline at (855) 735-CARE.

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Cut down on junk mail and spam

From the Better Business Bureau

There are a few things more annoying than junk mail, spam and unsolicited calls and texts messages. Not only are these unwanted communications an annoyance, but they can potentially lead to identity theft.

But how do you stop them? While it’s nearly impossible to completely eliminate junk mail, spam text messages and unwanted phone calls, BBB recommends taking the following steps for getting your inboxes and phone lines under control.

Unwanted mail shouldn’t cost you your identity. Pre-approved credit card offers are an easy target for identity thieves who can steal incoming mail and use these offers to open fraudulent credit accounts. Stopping these prescreened credit offers can help reduce the chances of identity theft. U.S. consumers can “opt-out” of receiving preapproved credit card offers for at least five years by calling 1-888-5-OPTOUT (567-8688) or visit: optoutprescreen.com. This service is offered by the three major credit reporting bureaus, Equifax, Experian and TransUnion. Canadian residents can visit fightspam.gc.ca/eic/site/030.nsf/eng/home for more tips.

Stop unwanted direct mail solicitations. To stop most mailings, U.S. consumers can go to dmachoice.org and opt out of mail from members of the Direct Marketing Association. DMA regularly updates its list, but it may take up to six months before solicitations from all DMA members stop. If you live in Canada, register for the Canadian Marketing Association’s Do Not Contact list at the-cma.org.

Has your evening been interrupted by telemarketers? You’re not alone. The U.S. government’s National Do Not Call Registry is a free, easy way to reduce the telemarketing calls you get at home. To register your phone number or to get information about the registry, visit donotcall.gov, or call 1-888-382-1222 from the phone number you want to register. You will get fewer telemarketing calls within 31 days of registering your number. Canadian residents can visit lnnte-dncl.gc.ca for opt-out information.

Are you receiving spam text messages? First and foremost, don’t respond. Responding to the text message only confirms a working number and opens the door for more messages. If your number is already on the Do Not Call

Registry and you’re still receiving messages and phone calls, file a complaint with the FCC or the Canadian Anti–Fraud Centre and consider PrivacyStar. BBB National Partners AT&T and Verizon have partnered with PrivacyStar to give you

back control of your smartphone. The smartphone application, available in the U.S. for Android, BlackBerry and iPhone, lets you block unwanted numbers, look up unknown numbers, and file a complaint with the FTC.

For more tips you can trust, visit bbb.org and for the latest, follow us on Facebook

facebook.com/BetterBusinessBureau.

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White Creek Lumber and Hardware not closing

Since Plainfield Lumber, in Plainfield Township, closed in early April, some have questioned what that means for White Creek Lumber and Hardware, who was formerly associated with Plainfield Lumber. The good news is, White Creek Lumber, 13861 White Creek, has been separated from Plainfield Lumber for several years now and the closing of that store has no effect on our local hardware store.

“White Creek Lumber has been a separate, wholly owned, entity since 2005,” explained Jane Gosling. “We are serving the West Michigan area independently. We are local and growing and looking forward to serving the area moving forward. We would like to thank all of our wonderful customers who make this possible. We have gotten and are getting a significant amount of questions about this situation. And yes, like the economy, the past few years have not been easy. But like Mark Twain said, ‘any reports of our death are greatly exaggerated.’ Please assure everyone that their business has been, and will continue to be, very important to us. Never have the words ‘come see us’ been more meaningful.”

Gosling also said they are deeply saddened by the loss of Plainfield Lumber. “They were an important part of the fabric of the Grand Rapids community for decades.  The closing of any independent is a blow to a local community. Their closing has touched a lot of people, as evidenced by the many questions and confusion we are experiencing today.”

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Spectrum Health United Hospital receives award

Formally acknowledged for pollution prevention program

 

Spectrum Health United Hospital was awarded the 2013 “Partner for Change” Award by Practice Greenhealth, the nation’s leading health care membership community that empowers its members to increase their efficiencies and environmental stewardship while improving patient safety and care. The Award is one of the organization’s Environmental Excellence Awards given each year to honor outstanding environmental achievements in the health care sector.

The Partner for Change Award recognizes health care facilities that continuously improve and expand upon their mercury elimination, waste reduction, recycling and source reduction programs. At a minimum, facilities applying for this Award must be recycling 15 percent of their total waste, have reduced regulated medical waste, are well along the way to mercury elimination, and have developed other successful pollution prevention programs in many different areas.

“This award proves that Spectrum Health United Hospital is committed to eliminating mercury, reducing waste, recycling and preventing pollution, among other environmentally preferable practices,” said Laura Wenger, RN, Executive Director, Practice Greenhealth. “Practice Greenhealth is pleased to recognize them for these efforts.”

As evidenced in a recent Health Care Research Collaborative study, “Can Sustainable Hospitals Help Bend the Health Care Cost Curve?” introducing environmental sustainability measures in hospitals not only results in significant savings, it won’t increase operating costs.  The implications are clear — given the return on investment, all hospitals should adopt and expand their sustainability programs.

“We are proud to positively impact our environment” said Tina Freese-Decker, President, Spectrum Health United and Kelsey Hospitals. “Our sustainability efforts have enabled United Hospital to be better stewards of our resources, environment and costs, all in an effort to provide better value and high quality care for our patients.”

The Practice Greenhealth Environmental Excellence Awards were presented in Boston, MA, at CleanMed, Thr premier national environmental conference for leaders in health care sustainability.

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Beware of storm chasers

From the Better Business Bureau

The recent damage done by the flooding and heavy rains through West Michigan brings out the best in people, as strangers reach out to help others in need. Unfortunately, the aftermath of a crisis also brings out contractors who take advantage of those who have already been victimized.

As a follow up, your Better Business Bureau is warning local residents affected by the recent flooding to beware of out-of-town and under-qualified repair companies soliciting business.

“It is not uncommon for out-of-town storm chasers to solicit business after storms like the ones we had last week,” said Phil Catlett, President of the Better Business Bureau. “Storm chasers may not have proper licensure and may offer quick fixes or make big promises which they won’t deliver.”

Your BBB offers the following tips for storm victims:

Know your rights and responsibilities http://www.michigan.gov/mshda/.

Contractors must be registered with the State of Michigan. Call (517) 241-9288 or check them online at https://www2.dleg.state.mi.us/ to determine if a contractor is registered.

Try to get at least 3-4 quotes from contractors, and insist that payments be made to the company, not an individual.

Do not pay for the job in advance. Be wary of any contractor who demands full or half payment upfront.

Resist high-pressure sales tactics such as the “good deal” you’ll get only if you hire the contractor on the spot.

Pay by credit card, if possible; you may have additional protection if there’s a problem.

Check that the contractor’s vehicle has signs or markings on it with the business name, phone number and license plates for your state.

Many cities and townships require a solicitation permit if sales people go door-to-door. Verify that they need to have a permit by contacting your local Township or Municipality. BBB suggests consumers be pro-active in selecting a contractor and not re-active to sales calls on the phone or door-to-door pitches.

While most contractors abide by the law, be careful allowing someone you do not know inspect your roof or basement. An unethical contractor may actually create damage to get work.

Get a written contract that specifies the price, the work to be done, the amount of liability insurance coverage maintained by the contractor, and a time frame. Require a copy of their current certificate of insurance.

BBB is also warning area contractors to beware of storm chasers who are willing to pay local construction companies substantial amounts of money to use a local business’s established name, reputation and phone so they can masquerade as a local business

We have seen this happen in other areas of the country. After doing repairs paid by insurance companies, the out-of-state contractors left the area. Many contractors who agreed to let these storm chasers use their name regret their decision once they were left holding the bag of unsatisfied customers due to bad workmanship and/or unfulfilled warranties.

Disaster victims should never feel forced to make a hasty decision or to choose an unknown contractor. Start With Trust. For reliable information, lists of BBB Accredited Businesses by industry and BBB Business Reviews you can trust on local businesses visit www.bbb.org or call (616) 774-8236.

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