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business law Archives

Startups and debts

Louisiana residents who start their own businesses may accumulate some debt. They may have some equity that can be applied to the business, but it is not uncommon for individuals to fund a startup with a credit card, multiple investors or a loan. For many startups, there may not be a profit for at least three to five years, which means there will be debt to handle until the business begins to turn a profit. However, there are some steps entrepreneurs can take to manage the business-related debt they may accumulate.

Securing a small business loan

Small business owners in Louisiana may be interested in the advantages provided by government-backed Small Business Administration loans. These loans can be appealing because they are offered in a range of sizes and can be repaid over a lengthy period at relatively low interest rates. The interest rates for alternative business loans can be substantially high, but bank loans backed by the SBA tend to have interest rates of around 7 percent APR. However, many business owners may face difficulties when applying.

What to know about selling a business

Business owners in Louisiana and elsewhere should take time to prepare themselves prior to selling their companies. If they know what the company is worth, it generally makes it easier to spot a fair deal and walk away from the business feeling content. To determine how much the company is worth, prospective sellers should look at what similar companies have sold for in the past.

Succession planning aids business owners nearing retirement

At some point, business owners in Louisiana will need to think about retirement. Stepping away from a business could involve selling it or passing the reins to a family member or other successor. Both situations require careful planning to consider issues such as retirement income and the needs and abilities of heirs.

Lending for Small Businesses

It might interest the citizens of Louisiana to know that ever since 2012, the Pepperdine Graziadio School of Business and Management has produced the Private Capital Access Index every fiscal quarter, which tracks how accessible private funding is to small and middle-market businesses. Interestingly, not only has the PCA Index been increasing year by year, but it has reached a new high during the first quarter of 2018. In more concrete terms, in Q1 2012, the PCA Index was 26.6; in Q1 2018, the PCA index reached 33.9.

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