Business Insights

Preparing Your Small Business For The Holiday Season

Updated on December 29, 2025
Category: Business Loans

Key Takeaways

Get festive with your online presence, sharing holiday-themed posts and drawing attention to your holiday season deals
Consider expanding your hours to cater to shoppers on a tight schedule
Ensure all the information about your business is up to date on every website and platform
Offer gift cards for indecisive shoppers to not only draw immediate revenue, but also expand your customer base
Be sure to support your employees throughout the season and show your appreciation

The holiday season is huge for small businesses. According to the National Retail Federation, holiday sales in November and December regularly account for 20% or more of annual retail revenue, with U.S. consumers spending over $950 billion in 2023 alone.

For many small businesses, this period can make or break the year. But success doesn’t happen by chance. It requires strategic planning and smart execution.

If you’re a small business owner, now is the time to position your brand to capture holiday shoppers’ attention, maximize sales, and build lasting customer relationships.

Here are five actionable strategies to help you prepare and take full advantage of the season.

1. Leverage Social Media to Spark Holiday Engagement

Social media is your holiday megaphone. Platforms like Instagram, Facebook, TikTok, and LinkedIn are where customers discover gift ideas, seasonal promotions, and local businesses.

Here’s how to make the most of it:

Create Holiday-Themed Content: Showcase your products in festive settings, share behind-the-scenes videos of your team preparing for the holidays, and post gift guides tailored to different budgets or interests.
Run Interactive Campaigns: Polls, contests, and giveaways can boost engagement and attract new followers. For example, a “12 Days of Giveaways” campaign can keep your audience coming back daily.
Use Paid Ads Strategically: Even a modest ad spend can amplify your reach. Target local audiences or people searching for holiday gifts in your niche.
Schedule Posts in Advance: Use social media organization tools to plan content so you can focus on in-store or operational needs during the busiest weeks.

Social media isn’t just about establishing credibility; it’s about creating a sense of excitement and urgency that drives customers to act.

2. Expand Your Hours

Convenience is king during the holidays. Many shoppers are juggling work, family, and festivities, so extended hours can make your business the go-to option.

Analyze Peak Times: Review last year’s sales data or use your point-of-sale analytics to identify when customers shop most. Consider opening earlier or staying open later during those windows.
Communicate Clearly: Update your hours on your website, Google Business Profile, and social media. Nothing frustrates customers more than showing up to a closed door.
Offer Special Shopping Events: Host “Late-Night Shopping” or “Early Bird Specials” to create buzz and incentivize visits during extended hours.

By making your business more accessible, you’re increasing opportunities for sales and keeping up with the competition.

3. Update Your Information Everywhere

Holiday shoppers rely heavily on online searches to find businesses, check hours, and confirm product availability. Inaccurate information can cost you sales.

Audit Your Digital Presence: Check your website, Google Business Profile, Yelp, and social media for correct hours, address, and contact details.
Highlight Holiday Specials: Add banners or pop-ups on your site promoting seasonal deals, shipping deadlines, and gift card options.
Optimize for Mobile: Many customers shop on their phones. Ensure your site loads quickly, is easy to navigate, and has a frictionless checkout process.

Think of your online presence as your virtual storefront. Make sure it’s inviting, accurate, and easily navigable so customers can find what they need.

4. Promote Gift Cards

Gift cards are a holiday lifesaver for indecisive shoppers and a revenue booster for businesses.

Feature Gift Cards Prominently: Display them at checkout, on your homepage, and in social media posts. Use festive designs to make them feel like a thoughtful gift.
Offer Incentives: Consider promotions like “Buy a $50 gift card, get a $10 bonus card.” These deals encourage higher spending and repeat visits.
Make Digital Options Available: E-gift cards are essential for last-minute customers and those shopping for out-of-town recipients.

Gift cards drive immediate revenue, but also bring customers back after the holidays, extending your sales season.

5. Support Your Team

Your employees are the backbone of your holiday success. A motivated, well-supported team ensures customers have a positive experience.

Plan Staffing Early: Anticipate peak days and schedule accordingly. Consider hiring seasonal help if needed.
Provide Training: Make sure staff are familiar with holiday promotions, gift card processes, and customer service best practices.
Show Appreciation: Small gestures like catered lunches, flexible scheduling, or holiday bonuses can boost morale and reduce burnout.

Building a community of support starts with investing in those you’re relying on to help your business thrive.

Make This Holiday Season Your Best Yet

The holidays are an opportunity for small businesses to set themselves up for success in the new year and beyond.

By leveraging social media, extending hours, updating online information, promoting gift cards, and supporting your team, you can create a seamless, festive experience that builds community and drives revenue.

Start planning now and take advantage of the most profitable time of the year.

Start Planning Ahead For The New Year

By applying for small business funding now, you can start the New Year off on the right foot, freeing up cash flow and boosting growth opportunities.

Find out how much you could qualify for in just 10 minutes!

Find out how much you could qualify for today!

NEWITY LLC and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

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Managing Your Small Business Debt

Key Takeaways

Start by organizing all your accounts, clearly indicating how much you owe, to whom, and by when.
Consider various strategies to reduce your debt, such as avalanche pay-off and refinancing
If you are going to refinance with an SBA 7(a) loan, ensure you’re aware of what types of debt can and cannot be refinanced with an SBA loan

Why Debt Management Matters

Entrepreneurs go into debt for lots of reasons— taking out loans to fuel a new project, using credit to bridge slow seasons, or even taking out start-up capital to kickstart a new business.

Because of this, debt isn’t inherently “bad.” As long as you’re strategic about when you take on new debt and what kind of debt you take on, borrowing money helps propel your business to new heights and bring your vision to life.

That said, ensure you are properly assessing your borrowing options as well as considering your repayment plan prior to applying for additional debt. This will ensure you have a plan in place that works for your business’s growth.

Debt organization helps you not only keep up with your repayment plan, but also helps you maintain and improve your SBSS score, avoid late payment fees, and take advantage of refinancing and consolidation opportunities.

Additionally, having an awareness of your debt holdings and potential options for decreasing your payments can help you assess options for more funding in the future, as your existing debt does affect how you qualify for additional loans.

Understanding Your Business Debt

Managing debt effectively starts with knowing exactly what you owe and to whom. It may seem trivial, but this preliminary basic organization can go a long way in keeping you up to date and aware of your debt holdings throughout the life of each repayment plan.

Know Exactly What You Have

Begin by listing all your outstanding debts in one place. This includes loans, credit lines, vendor credit, and any other financial obligations tied to your business.

For each debt, record the lender’s name, the original loan amount, current balance, interest rate, payment schedule, and any associated fees. Having this information organized will help you prioritize payments and identify opportunities to reduce costs.

Types of Debt

Small businesses typically carry different forms of debt:

Term Loans: Fixed repayment schedules over a set period.
Lines of Credit: Flexible borrowing for short-term needs, usually with variable interest rates. This includes credit card debt.
Vendor Credit: Agreements with suppliers allowing delayed payment for goods or services.

Understanding the nature of each debt type is crucial because repayment strategies and interest implications vary.

Calculating Total Debt and Interest Obligations

Once you’ve listed all debts, calculate your total outstanding balance and the cumulative interest you’ll pay over time.

This step gives you a realistic view of your financial commitments and helps you plan repayment strategies. Use simple tools like spreadsheets or accounting software to track these figures, or incorporate it into your preferred bookkeeping methods.

Knowing your total debt load and interest obligations can guide decisions such as refinancing, consolidating, or accelerating payments.

Strategies to Manage and Reduce Debt

Get festive with your online presence, sharing holiday-themed posts and drawing attention to your holiday season deals
Consider expanding your hours to cater to shoppers on a tight schedule
Ensure all the information about your business is up to date on every website and platform
Offer gift cards for indecisive shoppers to not only draw immediate revenue, but also expand your customer base
Be sure to support your employees throughout the season and show your appreciation

1. Leverage Social Media to Spark Holiday Engagement

Create Holiday-Themed Content: Showcase your products in festive settings, share behind-the-scenes videos of your team preparing for the holidays, and post gift guides tailored to different budgets or interests.
Run Interactive Campaigns: Polls, contests, and giveaways can boost engagement and attract new followers. For example, a “12 Days of Giveaways” campaign can keep your audience coming back daily.
Use Paid Ads Strategically: Even a modest ad spend can amplify your reach. Target local audiences or people searching for holiday gifts in your niche.
Schedule Posts in Advance: Use social media organization tools to plan content so you can focus on in-store or operational needs during the busiest weeks.

Social media isn’t just about establishing credibility; it’s about creating a sense of excitement and urgency that drives customers to act.

2. Expand Your Hours

Convenience is king during the holidays. Many shoppers are juggling work, family, and festivities, so extended hours can make your business the go-to option.

Analyze Peak Times: Review last year’s sales data or use your point-of-sale analytics to identify when customers shop most. Consider opening earlier or staying open later during those windows.
Communicate Clearly: Update your hours on your website, Google Business Profile, and social media. Nothing frustrates customers more than showing up to a closed door.
Offer Special Shopping Events: Host “Late-Night Shopping” or “Early Bird Specials” to create buzz and incentivize visits during extended hours.

By making your business more accessible, you’re increasing opportunities for sales and keeping up with the competition.

3. Update Your Information Everywhere

Holiday shoppers rely heavily on online searches to find businesses, check hours, and confirm product availability. Inaccurate information can cost you sales.

Audit Your Digital Presence: Check your website, Google Business Profile, Yelp, and social media for correct hours, address, and contact details.
Highlight Holiday Specials: Add banners or pop-ups on your site promoting seasonal deals, shipping deadlines, and gift card options.
Optimize for Mobile: Many customers shop on their phones. Ensure your site loads quickly, is easy to navigate, and has a frictionless checkout process.

Think of your online presence as your virtual storefront. Make sure it’s inviting, accurate, and easily navigable so customers can find what they need.

4. Promote Gift Cards

Gift cards are a holiday lifesaver for indecisive shoppers and a revenue booster for businesses.

Feature Gift Cards Prominently: Display them at checkout, on your homepage, and in social media posts. Use festive designs to make them feel like a thoughtful gift.
Offer Incentives: Consider promotions like “Buy a $50 gift card, get a $10 bonus card.” These deals encourage higher spending and repeat visits.
Make Digital Options Available: E-gift cards are essential for last-minute customers and those shopping for out-of-town recipients.

Gift cards drive immediate revenue, but also bring customers back after the holidays, extending your sales season.

5. Support Your Team

Your employees are the backbone of your holiday success. A motivated, well-supported team ensures customers have a positive experience.

Plan Staffing Early: Anticipate peak days and schedule accordingly. Consider hiring seasonal help if needed.
Provide Training: Make sure staff are familiar with holiday promotions, gift card processes, and customer service best practices.
Show Appreciation: Small gestures like catered lunches, flexible scheduling, or holiday bonuses can boost morale and reduce burnout.

Building a community of support starts with investing in those you’re relying on to help your business thrive.

Make This…

Increase Your Small Business Loan Size

Key Takeaways

Factors like your revenue, credit, debt, and business age all impact the funding you qualify for
Paying down existing debt, opening credit building accounts, and getting strategic about your financial tracking can help you increase your approved loan amount
Consider the timing of when you apply— slow seasons, unpaid client invoices, and the age of your business at the time of application can impact your loan size
Choose to apply for a loan through a group dedicated to making the process efficient, affordable, and accessible

Your SBA 7(a) loan application was preapproved, but not for the amount you had hoped to receive. If you still have your sights set on that higher loan amount, there are steps you can take towards improving your eligibility.

When it comes to increasing your loan size, it’s important to understand what factors play a role in your qualification. Taking strides to make changes to your application can positively impact the amount you’re qualified to receive.

What Factors Determine an SBA 7(a) Loan Amount? Revenue

Proving you have sufficient cash flow to take on loan payments is extremely important.

Consider this calculation:

Calculate your business’s average annual revenue for the last 3 years, if applicable
Subtract any existing debt you currently hold
Find 25%-50% of that number; that is your ideal loan request range

Using the 25%-50% range you just calculated is a good start for deciding how much you want to request in an SBA 7(a) Loan Application. You should not be applying for a loan that is over half of your average annual revenue. This target not only helps you to manage your debt wisely, but lenders and facilitators like NEWITY will be performing similar calculations to determine whether you’ll receive approval for your requested loan amount.

Credit

While traditional FICO scores are not the ultimate determination when it comes to qualifying for an SBA 7(a) loan, creditworthiness is still a key part of the evaluation process.

Instead of relying solely on personal credit scores for SBA loan eligibility, NEWITY uses the SBA’s SBSS scoring model. Unlike individual credit scores, SBSS scores incorporate business and personal credit criteria to evaluate creditworthiness of SBA 7(a) loan applicants.

Indicators of a sufficient SBSS score include having at least two years in business, annual revenue of $100,000 or more, and maintaining a healthy cash balance— ideally enough to cover several months of loan payments. These factors help demonstrate your business’s ability to repay the loan and manage its finances responsibly.

Debt

Your Debt Service Coverage Ratio (DSCR) reflects your business’s ability to cover the debt it already holds based on your operating income. This metric also plays a large role in how much you qualify to receive in an SBA 7(a) loan.

Regardless of how high your revenue is, if you cannot afford to take on more debt in addition to the debt you already owe, you may not qualify for as much in an SBA 7(a) loan as you’d hoped.

Here’s how you can calculate your DSCR:

Net Operating Income (NOI)/Total Debt Service

*NOI= Income after expenses, before interest and taxes
*Total Debt Service= All required principal and interest payments on debt for a given period

DSCR > 1: The business generates enough income to cover its debt payments (healthy).
DSCR = 1: Income equals debt obligations (break-even).
DSCR < 1: Income is insufficient to cover debt (risk of default).

Factor potential monthly payments on an SBA 7(a) loan into this calculation to determine if your business can afford to take on more debt, and if so, how much.

If your desired loan amount does not yield a DSCR of greater than 1 at your current Net Operating Income, consider ways to boost your revenue to qualify for your desired funding.

Age

Lenders and the SBA use your business’s operating history as a way to assess stability and risk. A business that has been operating for two or more years has likely weathered some ups and downs, built a customer base, and developed predictable revenue patterns. That kind of track record gives lenders more confidence in your ability to repay a loan.

Your best chance at qualifying for an SBA 7(a) loan is if you’ve been in business for 2 years or more.

If your business is younger than 2 years old, we encourage you to apply so we can connect you with a financing option to help you grow and position you to qualify for an SBA loan in the future.

To verify your time in business, you’ll typically need to provide:

Two years of filed business tax returns
Business formation documents (e.g., Articles of Incorporation or LLC registration)
Proof of consistent operations, such as bank statements or financial reports

How Can You Increase Your Loan Amount?

Through NEWITY’s application, you can receive preapproval in just 10 minutes. After receiving a preapproved loan amount, you have the option to re-apply after 90 days. This is an opportunity to take some time to reevaluate your finances and how you anticipate allocating the funds from an SBA 7(a) loan.

Pay Down Your Debt

Reducing your existing debt is one of the most effective ways to improve your loan eligibility. When you pay down credit cards, lines of credit, or other loans, you lower your monthly obligations, improving your DSCR.

Even small reductions in debt can make a big difference. For example, paying off a high-interest credit card or consolidating short-term loans can free up cash flow and reduce your overall liabilities.

Start by targeting debts with the highest interest rates or those that significantly detract from your monthly operating income.

You can also consider refinancing existing small business debt with an SBA 7(a) loan. An SBA 7(a) loan may offer lower monthly payments, lower interest rates, and longer repayment periods.

Additionally, SBA 7(a) loans through NEWITY do not require a down payment, making them particularly good candidates for debt refinancing.

Open…

4 Metrics To Track Your Business's Financials

Key Takeaways

Gross Margin shows how efficiently your business is producing and selling its products or services.
Customer Concentration is a way to assess how dependent your business is on a small number of clients.
Aging of Accounts Receivable shows how quickly customers are paying you.
Cash Needs reflects the amount of cash your business needs to run on a monthly basis.

Running a small business requires juggling a variety of responsibilities, so sometimes detailed financial tracking gets pushed to the wayside.

When serving customers and running daily operations demands most of your time, taking a step back to look at the bigger picture of your small business’s performance and growth is not a simple task.

Where do you start? What should you be looking for?

Let’s break down the 4 most important key performance indicators (KPIs) for you to keep an eye on.

Carving out just a few minutes each month to track these 4 metrics can make a significant difference in how you steer your business forward.

These KPIs offer a snapshot of your business’s financial health and can help you make smarter, faster decisions.

Why Metrics Matter

Half the battle is identifying objective metrics by which you track your business’s performance. Once you know exactly what to look for, you’ll have insights that:

Identify strengths and weaknesses in your business model
Spot trends before they become problems
Make informed decisions about pricing, staffing, and inventory
Communicate more effectively with lenders, investors, and partners

While every business is unique, the following four metrics are foundational for most industries, especially for B2B companies and service-based businesses.

Gross Margin

Gross margin represents the percentage of revenue that exceeds the cost of goods sold (COGS). It shows how efficiently your business is producing and selling its products or services.

How To Calculate It

Gross Margin (%) = (revenue-cost of goods sold)/revenue × 100

Example

If you sell a product for $100 and it costs $40 to produce, your gross margin is:

($100−$40)/$100×100= 60%

This means you retain 60 cents for every dollar of sales, before accounting for overhead and other expenses.

Pro Tip

Track gross margin by product line or service category. This allows you to double down on high-margin offerings and reevaluate or reprice low-margin ones.

Customer Concentration

Customer concentration measures how much of your revenue comes from your largest customers. It’s a way to assess how dependent your business is on a small number of clients.

Why It’s Important

High customer concentration can be risky. If one major client stops doing business with you, it could significantly impact your revenue and cash flow. Monitoring this metric helps you:

Diversify your customer base
Reduce dependency on any single client
Strengthen your long-term financial stability

How To Calculate It

Customer Concentration (%) = amount of revenue from top customers / total revenue × 100

Example

If your top customer brought in $90,000 and your total revenue was $200,000, your customer concentration is:

($90,000/$200,000)×100= 45%

This means 45% of your revenue is coming from just one client, indicating you may want to expand your customer base.

Pro Tip

Aim to keep any single customer below 20–30% of your total revenue. If that’s not possible, consider strategies to expand your customer base or offer new services to existing clients to reduce risk.

Aging of Accounts Receivable

This metric tracks how long your invoices have been outstanding. It’s typically broken down into aging buckets (e.g., 0–30 days, 31–60 days, etc.) to show how quickly customers are paying.

Why It’s Important

Slow-paying customers can create cash flow issues, even if your business is profitable on paper. Monitoring accounts receivable aging helps you:

Identify late-paying clients
Improve your collections process
Forecast cash flow more accurately

How To Calculate It

Accounts Receivable Aging (Days) = Aging of accounts receivable = average accounts receivable x 360 days / credit sales

Example

If your average accounts receivable is $450,000 and your credit sales are $900,000:

($450,000×360)/$900,000= 180 days

This means it’s taking, on average, 180 days for your customers to pay you the money they owe.

Pro Tip

Use accounting software to generate aging reports automatically. Follow up on overdue invoices promptly and consider offering early payment discounts or charging late fees.

Cash Needs

Cash needs refer to the amount of money your business requires to cover its monthly operating expenses, including payroll, rent, utilities, taxes, and other overhead.

Why It’s Important

Cash is the lifeblood of your business. Even profitable companies can fail if they run out of cash. Understanding your cash needs helps you:

Avoid liquidity crises
Plan for seasonal fluctuations
Prepare for emergencies or economic downturns

How To Calculate It

Compare your average monthly expenses to your current cash reserves.
Add up your total expenses over a period (e.g., 6 months)
Divide by the number of months to get your average monthly expense
Compare that to your current cash balance

Example

If your average monthly expenses are $4,000 and you have $10,000 in the bank, you have:

$10,000-$4,000=2.5 months of runway

This means, without any further income, you have 2.5 months worth of extra cash to operate from before running out.

Pro Tip

Aim to maintain at least 3–6 months of cash reserves. If that’s not feasible, consider setting up a business line of credit or applying for a working capital loan to bridge gaps.

What Do You Do With These Insights?

Tracking these four metrics monthly is a great start, but the real value comes from analyzing trends over time.

Are your gross margins shrinking?

Is customer concentration increasing?

Are receivables taking longer to collect?

Use these insights to:

Adjust pricing or reduce costs
Diversify your customer base
Improve collections processes
Secure financing before you need it

By staying proactive and data-driven, you’ll be better equipped to navigate challenges and seize opportunities as they arise.

Find out how much you could qualify for today!

Apply…

Small Business Bookkeeping

Key Takeaways

Bookkeeping includes functions like transaction recording, account management, payroll processing, reporting, and more
There are 5 account categories for sorting transactions: assets, liabilities, equity, revenue & income, and expenses
There are different approaches your can take to bookkeeping: cash-based vs. accrual-bases and single-entry vs. double-entry
The three financial statements most commonly used in bookkeeping includes an income statement, balance sheet, and chart of accounts
Doing your own bookkeeping includes 4 main functions: sorting transactions, recording journal entries, posting to a ledger account, and adjusting entries as needed

Why Is Bookkeeping Important?

Bookkeeping is the process of recording, organizing, and tracking your business’s finances. This is the foundation of your small business’s growth and prosperity.

Having an acute awareness of the cash that’s flowing in and out of your business and what services and expenditures are driving that flow helps you not only maintain good financial standing, but also helps you take advantage of growth opportunities and proactively combat financial struggle.

Bookkeeping helps you stay financially organized, but it also aids in staying tax compliant. The IRS requires you to keep records of information pertaining to your small business’s receipts, purchases, expenses, assets, travel, employment, and more.

Additionally, when you apply for small business funding, you’ll need to submit relevant financial documentation. Having an awareness of your small business’s cash flow can also help you to determine the loan size you could qualify to receive and gauge the amount of debt you’re willing to take on.

What Is Bookkeeping?

Bookkeeping involves a variety of different functions, depending on your business’s operations.

Financial Transaction Recording

Sales and Revenue Tracking: Recording income from products or services
Expense Tracking: Logging purchases, bills, and operational costs
Cash Flow Monitoring: Keeping tabs on money coming in and going out

Account Management

Accounts Receivable: Tracking customer invoices and payments
Accounts Payable: Managing bills and payments to vendors or suppliers
Bank Reconciliation: Matching internal records with bank statements to ensure accuracy

Payroll Processing

Calculating employee wages
Withholding taxes and benefits
Issuing payments and maintaining payroll records

Financial Reporting

Profit and Loss Statement (P&L): Showing income vs. expenses over time
Balance Sheet: Displaying assets, liabilities, and equity
Cash Flow Statement: Highlighting how cash moves through the business

Tax Preparation and Compliance

Organizing records for tax filing
Tracking deductible expenses
Ensuring compliance with federal, state, and local tax laws

Budgeting and Forecasting

Creating financial plans based on historical data
Projecting future income and expenses
Supporting strategic decision-making

Inventory and Asset Management

Tracking inventory purchases and usage
Recording asset depreciation

Types of Accounts

Keeping track of different types of transactions is what helps you determine where cash is flowing to and from. It’s important to note that “accounts” in bookkeeping refers to transaction categories rather than actual bank accounts.

1. Assets: These are things your business owns.

Cash
Inventory
Equipment
Accounts receivable (money customers owe you)

2. Liabilities: These are things your business owes.

Loans
Credit card balances
Unpaid bills

3. Equity: This is what you, the business owner, own after liabilities are paid off.

Owner’s investment
Retained earnings (profits you keep in the business)

4. Revenue & Income This is the money your business earns from selling products or services.

Sales
Service fees
Interest income

5. Expenses: This is the money your business spends to operate.

Rent
Supplies
Salaries
Utilities

Bookkeeping Methods

There are different approaches to bookkeeping you can take based on your small business’s finances and what works best for you. These methods will help you determine when you should record transactions and how you should record them.

Cash-Based vs. Accrual-Based

Cash-based accounting method records transactions once the money has been exchanged. An invoice is added to the books once it’s been paid, and bills are recorded once you’ve sent the money. This provides you with a precise picture of the cash in your possession at any given time.

Accrual-based accounting records invoices and bills once they are created rather than waiting for them to be fully paid. This method allows you to plan ahead, knowing what cash will be flowing in and out of your business.

You can also modify the accrual-based method by recording expenses when incurred but only recording invoices once cash has been received. This is a good way to safeguard your finances against potential miscalculations in the event that a customer or client does not pay their invoice.

Single-Entry vs. Double-Entry

Single-entry is a simple method where each transaction is recorded only once, either as income or expense. This method tracks cash flow but does not keep track of assets or liabilities. This is most suitable for very small businesses and sole proprietorships.

Example: You sell $500 worth of lemonade, so you record an additional $500 cash.

In double-entry bookkeeping, every transaction is recorded based on how it affects at least two of the 5 main accounts listed above. This method tracks income and expenses while also providing insight into the business’s assets, liabilities, and equity. This provides a more holistic view of your business’s financials while also helping detect errors to keep your records accurate.

Example: You buy $500 worth of lemons for lemonade. Your cash account has lost $500, and your business’s assets have increased by $500 in value.

Then, you sell $500 worth of lemonade. Your cash increased by $500 and your business’s revenue increased by $500.

Bookkeeping Statements

These are the most commonly used financial statements in small business bookkeeping.

Income Statement

An Income Statement, also known as a “Profit and Loss Statement” provides a “bird’s-eye view” of your small business’s revenue and expenses over a set period of time.

This statement is often used to compare a business’s profitability between two set periods of time.

This statement totals revenue, cost of goods sold, and any operating expenses in order to get a net total profit or loss.

Balance Sheet

A balance sheet showcases your business’s equity by totaling all assets owned and subtracting money owed on any liabilities.

This provides a good snapshot of your business’s overall financial health, helping you identify how much value you’re totaling by factoring in all that’s owned and owed at any given point in time.

Chart of Accounts

A chart of accounts shows all accounts belonging to a business in the business’s general ledger.

The chart typically shows account name, account number, account type, and balance.

How To Do Your Own Bookkeeping

Sorting Transactions Across Accounts

Each transaction of money flowing in and out of your business should be sorted into an account (i.e., cash from a sale being sorted into “revenue”); a new small business loan being sorted into both “assets” and “liabilities”).

Record Journal Entries

Balance your debit and credit. Record transactions accordingly, ensuring your debit and credit balances are balanced.

Post Entries to Ledger Account

Once entries have been properly recorded and sorted, ensure they’re added to the general ledger for a holistic view of your business’s finances. This can be done manually, otherwise most accounting/bookkeeping software will do this step automatically.

Adjust Entries

After a determined period of time (whether you decide monthly, bi-monthly, etc.), go through all entries and adjust based on reality. If you estimated invoices or expenses at one value when they ended up being different, make those adjustments in the backlog.

How Can Bookkeeping Help Me Get Small…

Building Your Credit Score— Tools and Strategies

Key Takeaways

Your personal credit plays a role in your business credit, so it’s best practice to focus on maintaining your finances in all areas
Credit building accounts are called “tradelines”, which can be either “revolving” or “installment”
Different types of tradlines should be used for different types of expenses
Implement strategies low utilization and becoming an authorized user in order to increase your credit score
Applying too frequently for tradelines can impact your credit score
Applying for a loan through NEWITY does not impact your credit score

How Credit Works

Improving your credit score sounds like a daunting feat, but when you’re knowledgeable and strategic, it doesn’t have to be nearly as painstaking as it seems.

Let’s break down the best credit building options and how you can use them strategically in order to boost your score and improve your overall financial profile.

Personal vs. Business Credit

Your personal and business credit are measured on separate scales, but your personal credit does play a role in your business’s credit.

Your personal FICO credit score is on a scale from 300 to 850. The higher your score, the less credit risk you pose. This score takes into account payment history, credit utilization, credit inquiries, and more.

Your business credit score is called an SBSS score. This score can range from 0-300 and is informed by your personal credit as well as credit factors filed under your business’s name.

Because your personal credit affects your business’s credit, it is important to maintain good credit in all areas of your life, especially if you’re considering applying for business financing in the future.

However, do not just rely on your personal credit score to represent your business. The stronger your business credit score is, the more robust your overall financial profile will be, and the more opportunities you’ll have to qualify for favorable financing terms, open credit cards, and grow your business.

Set Up Your Business Credit

If you have not already, you need to start establishing your business’s credit as a separate entity from your personal credit.

Get a DUNS number from Dun & Bradstreet. This is a unique 9-digit number used for credit reporting. This will allow all your credit-building activities to be directly associated with your business.

You should also apply for an EIN number with the IRS. This number identifies your business when you file your taxes, open business bank accounts, apply for business licenses, and more.

Finally, ensure that you have established business financial accounts that are entirely separate from your personal accounts. This means having a business checking account with a debit card only used for business transactions.

You should also apply for a business credit card. Use this card to make necessary purchases for your business, things like weekly inventory and regular necessities, and pay it off on time. This is an easy way to build your credit score while making the necessary purchases you would be making regardless.

Types of Credit

Credit building mechanisms are called “tradelines.” These are the accounts that appear on your credit report. There are two types of tradelines: installment and revolving.

Installment tradelines are accounts in which you reserve a fixed installment of money. This includes all types of loans in which you are given money that you pay back over an established period of time.

Revolving tradelines are variable borrowing accounts in which you are given a credit limit that you must adhere to. Credit cards and lines of credit are considered revolving tradelines.

All types of credit can improve your score as long as you use them accordingly and wisely.

What are the Best Uses for Different Types of Credit? Credit Cards

Credit cards are great credit building tools to use for typical daily or weekly expenses. Ensure that you are not spending money on your credit card that you do not have in your bank account, as late payments will not only decrease your credit score but also rack up large amounts of high-interest debt.

If your credit score is too low to qualify for a traditional credit card, consider a secured credit card. These cards are much easier to obtain, as they require an initial cash deposit upon opening. This cash deposit serves as your credit limit and also collateral on your card in the event that you do not pay it off on time.

Secured credit cards are reported on your credit report in the same way traditional “unsecured” credit cards are, so you can use them to build credit all the same.

The downfall of secured credit cards is that they do not offer the same benefits and rewards that unsecured credit cards do. Secured cards are a great option for initial credit building, and once your score is high enough to qualify for an unsecured credit card, you can switch to one that will give you points and rewards on categories that you often make purchases in for your business.

For example, if you run a restaurant, a credit card that offers 3x points on all grocery purchases would be an excellent option for your business.

Lines of Credit…

Can You Get an SBA 7(a) Loan If...

Key Takeaways

When you apply for an SBA 7(a) loan, the debt you already hold factors into how much capital you qualify for.
You need to be able to prove that your revenue is sufficient enough to cover your current debt and the additional debt you’re applying for.
Lenders also take into account the type of debt you have, looking at interest rates and repayment terms to assess how your cash flow is affected.

Can You Qualify for an SBA 7(a) Loan With Existing Debt?

At its most basic level, qualifying for an SBA 7(a) loan is about proving to lenders that you can pay it back. Lenders and loan officers make this assessment by reviewing a variety of your financial statements; however, your existing debt and how it affects your cash flow is a significant factor in your qualification.

Even if your revenue is high and your credit is good, if your cash flow is being significantly hampered by existing debt, your ability to take on more debt could be limited.

What Amount of Debt is "Too Much"

Debt caps on SBA 7(a) loans can differ between lenders and facilitators.

At NEWITY, here is a calculation you can perform in order to assess your own debt-to-income ratio:

Find your average annual revenue for the last 3 years
Find 35%-50% of that number
Subtract all existing business debt

The result is the loan size range you could qualify to receive.

This is not a guarantee that you will qualify for this loan size, as there are other metrics that determine your qualification, however, this is a good general metric to ensure that you are not applying for more debt than you’re financially equipped to handle.

Types of Debt

Lenders not only look at a borrowers’ existing debt balance, but also what type of debt vehicles are included within that total amount. Depending on the type of debt and its terms, different debt is factored into the borrower’s application accordingly.

Example: EIDL’s have a 30-year term and 3.75% interest rate, so those balances are treated differently than a non-SBA loan with a shorter term and higher interest rate.

These two types of debt impact a business’s cash flow very differently within the context of an SBA 7(a) loan with a 10-year repayment term.

Assessing Your Cash Flow

If you’re still unsure as to when is the right time to apply, or how much to apply for, consider performing a comprehensive cash flow assessment on your business.

Step 1: Calculate Monthly Net Cash Flow

Start by reviewing your monthly cash inflows and outflows:

Inflows: Revenue from sales, receivables, investments, etc.
Outflows: Operating expenses, payroll, rent, loan payments, taxes

Step 2: Determine Your Debt Service Coverage Ratio (DSCR)

This ratio shows whether your business generates enough income to cover loan payments.

Formula: DSCR = Net Operating Income / Total Debt Payments

A DSCR of 1.15 or higher is a good target for loans up to $350,000
If your DSCR is below 1.0, you’re not generating enough cash to cover debt

Step 3: Forecast Future Cash Flow

Use historical data to project cash flow for the next 12 months. Include:

Seasonal trends
Expected growth
New expenses or investments

This helps determine how much debt your business can handle without straining operations.

Step 4: Estimate Loan Amount Based on Cash Flow

Use your DSCR and forecast to back into a safe loan amount:

Calculate how much monthly loan payment your business can afford.
Use that amount to estimate the maximum loan size using amortization calculators or lender tools.

Step 5: Consider Use of Funds

Align the loan amount with your business goals:

Working capital needs
Material purchases
Debt refinancing

Avoid borrowing more than necessary— SBA loans are meant to help you grow, not cripple your cash flow.

Ultimately, how much capital you’re qualified to receive through an SBA 7(a) loan is dependent on several factors, many of which you cannot perfectly assess yourself.

At NEWITY, our team performs a “soft credit pull” when you submit an application, meaning the credit inquiry will not appear on your credit report, and your application submission will not affect your credit score.

If you’re interested in learning how much you could qualify for today, submit an application and find out in just 10 minutes!

Find out how much you could qualify for

Apply Today

Government Shutdown: What it Means For SBA Borrowers

Key Takeaways

A government shutdown occurs when congress cannot pass legislation for federal agency funding
During this time, SBA loans cease being processed
Submit your loan application anyway and stay responsive with your loan service provider so you’re first in line once processing resumes

When the federal government shuts down, small business owners looking to secure SBA 7(a) loans are among the first to feel the impact.

Whether you’re planning to expand, purchase materials, or boost working capital, understanding how a shutdown affects SBA lending is essential to navigating this period of uncertainty.

What Is a Government Shutdown?

A government shutdown occurs when Congress fails to pass legislation to fund federal agencies.

Without an approved budget, nonessential government operations pause, and thousands of federal employees are furloughed.

While essential services like law enforcement and air traffic control continue, agencies like the Small Business Administration (SBA) are significantly affected.

How the Shutdown Affects the SBA

During a shutdown, the SBA loan application process pauses, and no loans can be approved during this time.

Lenders with delegate authority—meaning special permission to approve SBA loans independent of the SBA—must also cease loan approval.

What This Means for Borrowers

If you’re a small business owner planning to apply for an SBA 7(a) loan, here’s what you need to know:

No new applications will be processed: Whether you’re working with a standard lender or one with delegated authority (PLP status), new loans cannot be approved during the shutdown unless they already have an SBA loan number. If an SBA loan number has been assigned to a loan, then the lender can proceed with closing and disburse the funds.
Existing loans will be delayed: Even if your loan was in progress before the shutdown, final authorization or disbursement will be postponed.
Loan servicing continues: You must continue making payments on existing SBA loans.
Backlogs are likely: Once the shutdown ends, expect delays as the SBA works through a flood of pending applications.

How to Proceed During a Shutdown

While the SBA’s lending operations are paused, there are proactive steps you can take:

Prepare Your Application Now

Communicate With Stakeholders

Stay Informed

By understanding how SBA operations are affected and taking proactive steps during the government shutdown, you’ll be better positioned to move quickly once government operations resume.

Interested in finding out how much you could qualify for? Apply now and find out in just 10 minutes!

Find out how much you could qualify for

Apply Today

Small Business Tax Planning

Key Takeaways

Understanding the tax implications of your business’s structure can help you file properly and identify your tax advantages
Consider opening an account on the IRS website in order to easily access and view your tax filings and payments
Your tax filings and IRS payments play a role in your loan application process, so it’s important to ensure you stay organized and up to date

Taxes aren’t fun, we get it.

However, filing your taxes properly and being aware of any tax advantages available to you can be the difference between your business’s success and prolonged stagnancy.

Not only will you be susceptible to costly fees and penalties, but improperly filed taxes can reduce your potential for savings and how you qualify for small business loans.

Many small business owners are often unaware of outstanding tax payments, delinquent filings, or even how their business’s structure is affecting the way their taxes are filed.

In the same vein, these entrepreneurs may also be missing potential tax strategies they should be taking advantage of and expenses that could be written off.

Entity Structure & Tax Filing

The first common mistake many small business owners make is failing to properly understand the tax implications of their business’s structure.

Your business’s legal structure determines how income is taxed, who reports the income, what tax forms are required, and more.

Choosing the right structure can reduce your tax burden, simplify compliance, and potentially protect your personal finances from your business’s liabilities.

Let’s break it down:

Sole Proprietorship

Flow-through taxation: Business income is reported on the owner’s personal tax return (Form 1040 + Schedule C).
Self-employment tax: Owners pay tax on net earnings (Social Security + Medicare) via Schedule SE.
No separate legal entity: The owner and business are legally the same.
Quarterly estimated payments: Required if you expect to owe more than $1,000 annually.
Deductible expenses: Home office, mileage, startup costs, etc.

Limited Liability Company (LLC)

Choice in taxation: LLCs can determine how they wish to be taxed, offering flexibility based on the number of members and the business’s goals.
Flow-through taxation default: LLCs can be taxed as a flow-through entity, or elect to be taxed as an S-Corp or C-Corp.
Self-employment tax: Applies unless taxed as an S Corp.
Tax flexibility: LLCs can elect to be taxed as an S Corp or C Corp using IRS Form 8832.
No double taxation (unless electing C Corp status).

S Corporation (S Corp)

Flow-through entity: Income, losses, deductions, and credits flow to shareholders’ personal tax returns.
Avoids double taxation: No corporate-level tax.
Owners as employees: Must pay themselves a “reasonable salary” subject to payroll taxes.
Tax filings: IRS Form 1120-S and Schedule K-1 for shareholders.

C Corporation (C Corp)

Separate tax entity: Pays corporate income tax (currently 21% federal rate).
Double taxation: Profits taxed at corporate level and again when distributed as dividends to shareholders.
Tax filings: IRS Form 1120.
Deductible expenses: Salaries, benefits, depreciation, etc.
Can carry forward net operating losses and claim various tax credits.

Outstanding Tax Balances or Missed Filings

Your SBSS score is your business’s credit score that accounts for several factors, spanning both business and personal finances
SBSS scores range from 0-300, with “good” SBSS scores starting around 165
Your SBSS score is used in determining if you could qualify for a small business loan

What Is An SBSS Score?

SBSS stands for Small Business Scoring Service. This is a credit scoring service developed by FICO specifically for evaluating business credit. Unlike personal FICO scores, an SBSS score takes into account multiple factors, including business age, revenue, and the personal credit of all business owners.

SBSS scores range from 0-300 and are used by lenders to evaluate the financial standing and trustworthiness of small business loan applicants.

Why Does Your SBSS Score Matter?

When you’re interested in receiving small business funding, your SBSS score can impact whether or not you qualify and how much financing you’re eligible to receive.

That’s why it’s so important to manage your personal and business finances responsibly and monitor your credit regularly, ultimately ensuring that you’re prepared when it comes time to apply.

How Is An SBSS Score Calculated?

Unfortunately, you cannot calculate your own SBSS score. This score is calculated by FICO when you’re applying for business loans.

Here’s how it works:

Let’s say you’re a small business owner looking to apply for funding. When you submit a loan application with your business’s financial data and information about the owners, the lender or loan facilitator performs a credit pull. When you apply through NEWITY, we perform a soft credit pull, which does not affect your credit score. This credit pull gathers your personal credit data as well as your business’s credit data from business credit bureaus.

Your SBSS score is then generated. This is done by combining the following pieces of information:

Personal credit history of all owners
Business credit history
Time in business
Annual revenue
Cash flow and bank balances
Public records (e.g., liens, bankruptcies)
Industry risk profile (NAICS code)
Trade Lines
Payment History

How Your SBSS Score Can Vary

Just like personal FICO scores have different versions, your business might have multiple SBSS scores, depending on how a lender chooses to configure the scoring model.

Lenders can customize how the SBSS model weighs different types of data. For example, one lender might prioritize your business credit profile, while another might place more emphasis on your personal credit history or financials. This flexibility allows lenders to tailor the score to their specific risk tolerance and lending criteria.

The model is also designed to be adaptive. If a lender prefers to pull business credit data from Experian but there isn’t enough information available, the system can automatically check Dun & Bradstreet or Equifax instead. If business credit data is still too limited, the score may be calculated using personal credit data alone, possibly supplemented by financial information from your application.

Because of this dynamic setup, your SBSS score can vary from lender to lender—and it can change over time as your credit reports and financials are updated. That’s why it’s important to maintain strong credit habits across both your personal and business profiles.

All loans facilitated by NEWITY use the SBA’s model for calculating SBSS scores.

What Is Considered A Good SBSS Score?

At NEWITY, SBA 7(a) loan applicants must have an SBSS score of 170 or higher to qualify for funding.

If you’re using your business’s SBSS score to set benchmarks for your financial growth, here is a chart to help you understand the context of your score:

…

What You Can (And Cannot) Use an SBA...

Key Takeaways

SBA 7(a) loans offer flexible funding for operational and growth needs.
There are clear restrictions on how funds can be used, such as prohibitions on real estate purchases, large equipment, personal expenses, passive investments, delinquent taxes (without a payment plan), and refinancing other SBA loans.
Strategic use of SBA 7(a) loans can unlock growth and stability, especially when cash flow gaps, expansion opportunities, or high-interest debt are limiting your business’s potential.

SBA 7(a) loans are among the most versatile forms of small business financing. For entrepreneurs navigating growth, slow seasons or operational transitions, these loans may provide a safety net and a launchpad. SBA 7(a) loans facilitated by NEWITY function as working capital loans, giving small business owners the flexibility to fund everyday needs and long-term initiatives.

But what does this mean for you and your small business?

Here’s a breakdown of ways you can and cannot use an SBA 7(a) loan facilitated by NEWITY:

Permitted Uses Working CapitalCover day-to-day operating expenses, manage cash flow, and support growth initiativesInventory and MaterialsPurchase inventory or raw materials, upgrade technology systems, invest in supplies, and cover work-in-progress costsDebt Refinancing Refinance existing non-SBA business debtTenant ImprovementsMake upgrades to leased spaces for…

Separating Personal and Business Finances

Key Takeaways

Separating your business from your personal finances as much as possible will help you to stay organized, ensure your taxes are accurately filed, and manage cash flow
Consider registering as an LLC to protect yourself from personal liability for your business
Apply for EIN and DUNS numbers for tax & credit purposes

You’re wanting to start a small business— what are the first steps?

Setting your small business up for success in the long run means establishing a good foundation. Being proactive with your small business structure and finances now will save you time, money, and energy in the future.

Dane Colvin is a registered CPA and AVP of Finance and Operations at NEWITY and has worked with thousands of small business owners throughout their funding journey. Here is some advice he offers to new entrepreneurs who are feeling overwhelmed with the world of small business finances:

“I think the biggest thing, and something we see on the NEWITY side, is when you are starting a business, you want to make sure you’re completely separating it from your personal [finances].” -Dane Colvin

It’s best to establish this separation immediately. Many times, entrepreneurs will put off this type of clerical work for a later date. As their business grows and their task list expands, financial structure takes a backseat to more pressing matters.

If you plan to apply for small business financing in the future, the application process will go much more smoothly when you are able to easily distinguish between personal and business finances.

Additionally, when you file taxes, you’ll need to accurately report the income and deductible expenses of both your business and your personal finances, independent of one another.

Here are 5 steps to get you started with establishing separate accounts for your personal and business finances.

1. Register your business as an LLC

LLC stands for “limited liability company”. This means that you cannot be held personally liable for your business’s debts. This is a great business structure if you’re looking to protect your personal assets while avoiding the more complicated structure of a corporation.

You can register as an LLC by selecting a unique business name and filing Articles of Organization with your state’s Secretary of State office. Most states allow you to file by mail.

2. Apply for an Employer Identification Number

An Employer Identification Number (EIN) is a nine-digit number assigned to your business by the IRS for tax purposes. This number identifies your business when you file your taxes, open business bank accounts, apply for business licenses, and more.

You can apply for an EIN for free through the IRS website using their EIN Assistant or by downloading form SS-4 and sending it to the IRS by mail or by fax.

3. Apply for a DUNS number

A DUNS number is a 9-digit number your business receives through Dun & Bradstreet used for credit reporting. The sooner you do this, the sooner you can start building your business credit.

This number is free to request from Dun & Bradstreet via their website and typically only takes 1-2 business days to receive.

4. Open a business checking account

Using your personal checking account for your small business can complicate your finances on several levels. By opening a business checking account, you can keep your personal and business expenses separate, stay organized, and manage your cash flow efficiently.

5. Apply for a business credit card

This is a great way to start building your business credit as soon as possible. If you’re stuck deciding on which credit card to go with, Colvin recommends applying for a card that offers extra points in categories that your business often makes purchases in.

“I think…

Unsecured vs. Secured Credit Cards

Key Takeaways

Secured credit cards require a cash deposit that acts as “collateral” on your card balance, and are easier to obtain for people with lower credit scores
Unsecured credit cards do not require that initial cash deposit, but are more difficult to obtain, have higher credit limits, and offer better rewards programs on money spent
If you have a limited or poor credit history and do not qualify for an unsecured credit card, a secured credit card is a good starting point to build credit
Credit cards are strategic credit-building tools that can play a large role in your business’s overall growth

What is the difference between secured and unsecured credit cards?

An unsecured credit card is what most people commonly think of when discussing “credit cards.”

This is a credit card that has a credit limit set by the issuing bank based on your credit history. You use this card to make payments, then pay off the balance at the end of the month.

A secured credit card is only slightly different in that it requires an initial cash deposit to act as collateral in the event that you do not pay off your credit card balance.

Let’s say you open a secured credit card and make a cash deposit of $3,000. That deposit acts as the credit limit on that card, meaning you can only spend up to $3,000 on that card before paying off the balance.

Every time you pay off the balance on that card, you pay it from the cash in your checking account, as you would with an unsecured credit card.

However, if you were to neglect to pay off your secured credit card by the time the balance is due, your bank would seize that initial $3,000 cash deposit in order to cover the amount you owe.

What are the pros and cons of secured and unsecured credit cards? Unsecured Credit CardsSecured Credit Cards ProsHigher credit limit, better rewards systems Easier to obtain, prevent overspending ConsMore difficult to obtain,…

Do You Need Collateral For An SBA 7(a)...

Pledging collateral for a business loan can seem complicated, but it doesn’t have to be.

In this article, we’ll break down the definition of collateral, why it’s necessary, and how you can get a loan without needing to pledge collateral at all.

Key Takeaways

Collateral is a set of assets pledged by a borrower to a lender, should the borrower default on their loan
Collateral could be almost anything, from physical assets to retirement accounts to trading assets
NEWITY facilitates non-collateral loans up to $50,000

What is Collateral?

When you apply for a loan, your lender needs to know that they’re protected. Even if your finances show that you are trustworthy, lenders often want extra protection against potential loss of value.

Collateral is that extra protection. If you as the borrower were to default on your loan, the lender would seize the collateral that was listed with the loan in order to get some or all of their money back.

How is Collateral Identified?

Items used as collateral could be nearly any store of value, including:

Equipment
Inventory
Furniture
Real Estate
Business Vehicles
Cash or Savings
Retirement Accounts
Patents, Trademarks, or Other Intellectual Property
Trading Assets

When evaluating collateral, lenders will consider the Adjusted Net Book Value (ANBV) of assets. This is a calculation that takes the original value of an asset, then subtracts depreciation, market conditions, wear and tear, forced liquidation value, and more.

How Much Collateral is Needed For a Loan

For some loans to be considered “fully secured”, the borrower must be able to offer enough value through their business assets to cover the loan amount.

If a borrower’s business assets do not total or surpass the loan amount, lenders may file liens on personal assets. This also may be required for owners with 20% ownership or more in the business, or any personal guarantors on the loan.

While this sounds daunting, pledging collateral will not impact your business long as you pay back your loan in accordance with the loan term.

Can You Get an SBA 7(a) Loan Without Collateral?

If you’re in need of fast cash, pledging collateral means extra paperwork and, consequently, extra time.

Further, you may be wanting to avoid tying up your assets in case they are needed for other financing or operational flexibility.

So, if you’re looking for quick capital, do not have sufficient collateral to secure a loan, or just simply do not want to tie up your assets, we can get you the funds you need without overcomplicating things.

While most SBA 7(a) lenders and facilitators will require collateral on loans over $25,000, NEWITY facilitates SBA 7(a) loans up to $50,000 without any collateral requirements.

After all, pledging collateral isn’t always the most convenient way to get the funds you need.

If you’re a start-up, you may not yet have sufficient assets to pledge. Service-based industries or digital businesses may not have much to offer, either.

How Do SBA 7(a) Loans Through…

Your Business Loan Was Denied... What's Next?

Key Takeaways

SBA loan denial could be chalked up to poor credit, industry, or even business age
You can reapply for an SBA 7(a) Loan through NEWITY after 90 days
Organize your finances to track your own eligibility and prepare for the next time you apply
Improve your business’s credit by using a credit building card like NAV Prime
Assess and improve your cash flow by paying down debt or increasing revenues

Does getting denied a loan hurt your credit?

Being denied a loan does not affect your credit score. However, when you apply for a loan, lenders often conduct a “hard inquiry” into your credit report. Multiple hard inquiries within a short period can signal to lenders that you may be a high-risk borrower. At NEWITY, we do not perform hard inquiries when facilitating your loan application.

Why was my SBA loan application denied?

To improve your chances of being approved in the future, it can be helpful to understand why your loan application was denied.

Your SBA loan application could be denied for several reasons:

1. Poor Credit

Your personal credit is taken into account alongside your business credit. Any large personal loans, high credit card utilization rates, or late payments in either your personal or business portfolio could decrease your chances of being approved for an SBA loan. However, if your business has a minimal credit history, this can also affect your chances of being approved for a loan.

2. Industry Risk

Certain industries and specifically where your business sits within that industry are considered higher risk for loan default than others. In addition to industry risk, the SBA also has industry size standards that constitute whether your business is a “small business”.

3. Business Age

The younger your business, the tougher it is to be approved for an SBA loan. You are able to apply as early as 3 months into your business. However, the youngest businesses have the strictest eligibility requirements.

Can I Reapply for an SBA…

What is a NAICS code and why do...

Key Takeaways

Your NAICS code helps you and others categorize your business at its most specific level
NAICS codes are used for a variety of purposes, including taxes, identifying industry benchmarks, insurance, and more
NAICS codes have a large effect on how your business qualifies for an SBA loan
NAICS codes are self-assigned using the NAICS code look-up tool

What is a NAICS code?

NAICS stands for North American Industry Classification System. Your NAICS code is a 6-digit code used to identify your business’s industry and its most specific level.

Structure of a NAICS code

The first two digits of your NAICS code represent your business’s sector- such as retail or hospitality. The remaining digits signify your business’s subsector, industry group, NAICS industry, and national industry, respectively.

Ultimately, this hierarchical structure allows NAICS codes to communicate your business’s industry and purpose down to a specific level.

Why do NAICS codes matter?

NAICS codes prevent oversimplification of the broader business playing field. NAICS codes take into account your business’s economic activity and compare you to the standards of others in your specific industry.

NAICS codes are used in a variety of contexts, such as:

Government Business

Government agencies use NAICS to collect, analyze, and publish economic data. NAICS codes are also used when determining your eligibility for certain government programs, grants, and contracts.

Market Research

Businesses use NAICS codes to analyze competitors, identify market trends, and research industry benchmarks to help you track growth and competition.

Taxation

The IRS uses NAICS codes to monitor deductions and income, flagging anything unusual for that industry.

Insurance

Insurers use NAICS codes to determine premium rates and coverage based on industry-specific risks.

How does my…

How Business Owners Can Navigate Seasonal Slowdowns

Seasonal slowdowns are a reality for many businesses, whether you’re in retail, hospitality, or any industry affected by fluctuating consumer demand. While these quieter periods can be challenging, they also offer opportunities to reassess, regroup, and prepare for the busy seasons ahead. Here’s how business owners can navigate seasonal slowdowns effectively and come out stronger on the other side.

1. Plan for Slow Periods

The key to surviving seasonal slowdowns is preparation. Analyze your business data to identify patterns in customer activity and revenue. Understanding when and why slowdowns occur allows you to build a strategic plan that includes:

Cash Flow Management: Set aside a portion of your revenue during peak seasons to cover expenses during slower months.
Inventory Adjustments: Reduce stock of slow-moving items and focus on staples that sell year-round.
Staffing Needs: Schedule fewer hours for part-time staff or cross-train employees to maximize efficiency during the downturn.

2. Strengthen Customer Relationships

During slow seasons, focus on nurturing your existing customer base. Loyal customers are more likely to support your business year-round if you engage with them consistently.

Exclusive Promotions: Offer discounts, loyalty rewards, or exclusive deals to encourage repeat business.
Personalized Outreach: Use email campaigns, social media, or direct mail to stay top-of-mind. Share updates about your business or send a heartfelt thank-you note for their support.
Host Events: Consider hosting workshops, webinars, or special events that align with your brand. These can create interest and keep customers engaged.

3. Diversify Revenue Streams

Seasonal slowdowns can expose vulnerabilities in a business that relies on one primary revenue source. Diversification can help you weather these fluctuations.

Offer Complementary Products or Services: Identify new ways to serve your customers. For example, a landscaping company might offer snow removal in the winter.
Leverage E-Commerce: If you’re a brick-and-mortar store, consider selling products online to reach customers who may not be impacted by your local seasonality.
Collaborate with Other Businesses: Partner with complementary businesses to cross-promote products or services, expanding your audience.

4. Focus on Marketing

Slow periods are the perfect time to ramp up your marketing efforts and attract new customers.

Seasonal Campaigns: Create marketing campaigns tailored to the current season, highlighting relevant products or services.
Content Creation: Write blog posts, produce videos, or share tips on social media that align with your business and the time of year.
Engage Locally: Participate in community events, sponsor local causes, or collaborate with nearby businesses to increase visibility.

5. Review and Adjust Your Financial Strategy

Seasonal slowdowns can strain cash flow, so it’s essential to review your financial strategy during this time.

Refinance Existing Debt: If your current loans or credit lines have high interest rates, refinancing during the off-season can help lower monthly payments.
Access Business Financing: Consider a working capital loan, such as an SBA 7(a) loan, to cover operating expenses or invest in growth opportunities.
Negotiate with Vendors: Work with suppliers to extend payment terms or reduce costs during slower months.

6. Prepare for the Next Peak Season

When small business owners look to borrow money, they often encounter two primary types of loans: secured and unsecured. Understanding the differences between these two loan categories is crucial for choosing the best financing option for your business. For many entrepreneurs, SBA 7(a) loans strike the perfect balance, offering flexibility and accessibility while incorporating elements of secured lending.

What Are Secured Loans?

Secured loans are backed by collateral—assets the lender can seize if the borrower fails to repay the loan. Common types of collateral include real estate, equipment, inventory, or other valuable business or personal assets.

Benefits of Secured Loans

Lower Interest Rates: Because lenders face reduced risk due to the collateral, secured loans typically come with lower interest rates.
Higher Loan Amounts: Lenders may be more willing to approve larger loan amounts since the collateral provides additional security.
Easier Approval for Startups or Less-Established Businesses: If your business has limited credit history or financial performance, offering collateral can make loan approval more likely.

Drawbacks of Secured Loans

Risk of Losing Assets: If you default on the loan, the lender can seize your pledged assets, which may be critical to your business operations.

What Are Unsecured Loans?

Unsecured loans do not require collateral. Instead, lenders assess the borrower’s creditworthiness and financial history to decide whether to approve the loan. Examples include credit cards, personal loans, and some types of small business loans.

Benefits of Unsecured Loans

No Collateral Required: This eliminates the risk of losing business or personal assets in the event of default.
Faster Processing: Without the need to assess collateral, unsecured loans are often approved more quickly.

Drawbacks of Unsecured Loans

Higher Interest Rates: Because unsecured loans pose a greater risk to lenders, they usually come with higher interest rates.
Lower Loan Limits: Lenders tend to approve smaller loan amounts for unsecured loans.
Strict Qualification Requirements: Borrowers need strong credit and financials to qualify.

Are SBA 7(a) Loans Secured or Unsecured?

The SBA 7(a) loan program combines elements of secured and unsecured lending to create a middle ground that works for many small business owners.

Collateral Requirements

At NEWITY you can access an SBA 7(a) small business loan up to $50,000 without any collateral. Loan ranging from $50,001 to $500,000 secure collateral in the form of a blanket lien.

A blanket lien is a legal claim that gives a lender the right to property or assets in the event of non-payment.

Why Choose an SBA 7(a) Loan?

SBA 7(a) loans are designed for small business owners. They provide the security of government backing while allowing lenders to consider the broader financial picture of the borrower.

Additionally, SBA 7(a) loans provide long-term benefits, such as:

Improved cash flow due to lower monthly payments
The ability to build credit for future financing needs
Options to consolidate or refinance existing debt

Conclusion

Understanding the differences between secured and unsecured loans is vital when deciding on a financing solution for your business. Secured loans often offer lower interest rates and higher limits but come with the risk of losing assets. Unsecured loans provide fast access to funds without collateral but often feature stricter requirements and higher costs.

SBA 7(a) loans provide a unique hybrid approach, offering the flexibility and support many small business owners need to thrive. An SBA 7(a) loan could be the key to achieving your goals while balancing risk and reward.

Discover how much you are eligible to receive in just 10 minutes!

Apply Today

How To Effectively Repay Your Business Loan

Taking out a business loan can be a powerful tool for growth, whether you’re purchasing new equipment, expanding operations, or managing cash flow. However, repaying that loan responsibly is just as important as securing it. A well-planned repayment strategy not only ensures you maintain a healthy financial position but also builds your creditworthiness for future financing needs.

Here’s how small business owners can effectively repay their business loans while keeping their finances on track.

Understand Your Loan Terms

Before you make your first payment, thoroughly review the terms of your loan agreement. Key details to focus on include:

Repayment schedule: Monthly, bi-weekly, or other intervals.
Interest rate: Fixed or variable, and how it affects your total repayment amount.
Prepayment penalties: Check if there are fees for paying off the loan early.
Grace periods: Some loans may have a window before repayment starts.

Understanding these terms helps you plan your payments and avoid surprises.

Create a Repayment Plan

Treat your loan repayment as a non-negotiable expense in your budget. To do this:

Allocate funds: Dedicate a portion of your revenue specifically for loan repayment.
Automate payments: Set up automatic payments to avoid missing due dates.
Build a buffer: Keep an emergency fund to cover payments during slow periods.

Prioritize Payments Strategically

If you have multiple loans or debts, prioritize repayment based on:

Interest rates: Pay off high-interest loans first to reduce your overall costs.
Loan terms: Focus on loans with shorter repayment periods to free up cash flow sooner.

Monitor Your Cash Flow

Regularly track your business’s cash flow to ensure you can cover loan payments without straining your operations. Tools like QuickBooks or Xero can help you:

Forecast future cash flow trends.
Identify potential shortfalls early.
Adjust spending to maintain payment capacity.

Consider Refinancing

If your loan payments are becoming unmanageable, refinancing might be a solution. This involves taking out a new loan with better terms to replace your existing one. Refinancing can:

Lower your interest rate.
Extend your repayment term, reducing monthly payments.
Simplify your finances by consolidating multiple loans.

SBA 7(a) loans are a particularly attractive option for refinancing because they offer competitive rates and flexible terms, helping small business owners regain control of their finances.

Increase Revenue to Accelerate Repayment

Boosting your income can make it easier to meet or even exceed your loan payments. Strategies include:

Upselling to existing customers.
Expanding your product or service offerings.
Running targeted marketing campaigns to drive sales.

Use a portion of any increased revenue to pay down your loan faster, reducing overall interest costs.

Communicate with Your Lender

If you’re struggling to make payments, don’t wait until it’s too late. Reach out to your lender to discuss:

Loan modifications: Adjustments to your terms that make payments more manageable.
Deferment options: Temporary payment relief during financial hardship.
Alternate solutions: Some lenders may offer restructuring options tailored to your situation.

Lenders often appreciate proactive communication and are more likely to work with you when you’re transparent about your challenges.

…

How to Improve Cash Flow for Small Business...

Cash flow management is crucial for small business success. Positive cash flow ensures you can pay your employees, purchase inventory, invest in growth opportunities, and weather unexpected challenges. Yet, managing cash flow is one of the most significant challenges small business owners face.

Here, we’ll explore practical strategies to improve cash flow and how SBA 7(a) loans can be a game-changer for your business.

1. Streamline Invoicing and Payment Processes

Late payments from clients can severely impact your cash flow. To address this:

Send invoices promptly: Use invoicing software to automate this process.

Offer multiple payment options: The easier it is for customers to pay, the faster you’ll receive payments.

Provide incentives for early payment: Discounts for early payments can encourage timely transactions.

2. Cut Unnecessary Expenses

Perform a financial audit to identify and eliminate non-essential expenses. This could include:

Canceling unused subscriptions.

Renegotiating vendor contracts.

Transitioning to energy-efficient equipment to reduce utility costs.

3. Increase Revenue

Boosting sales can directly improve your cash flow. Consider:

Launching limited-time offers or promotions to attract customers.

Upselling or cross-selling to existing customers.

Expanding your product or service offerings.

4. Better Inventory Management

Excess inventory ties up cash, while too little can result in lost sales. Use inventory management software to:

Track inventory levels in real-time.

Forecast demand more accurately.

Reduce overstocking and storage costs.

5. Build an Emergency Fund

Having a financial cushion can help you manage cash flow during slow seasons or unexpected downturns. Aim to set aside a portion of your monthly profits into a business savings account.

6. Leverage SBA 7(a) Loans for Cash Flow Relief

Setting goals is essential for driving growth and success in your small business. But not all goals are created equal. To ensure your goals are actionable and effective, consider the SMART framework—Specific, Measurable, Achievable, Relevant, and Time-bound. Here’s a step-by-step guide to help you create SMART goals that will set your business on the path to success.

1. Be Specific

Vague goals can lead to confusion and lack of direction. Instead, focus on setting clear, well-defined objectives. Specific goals outline exactly what you want to achieve and help you stay on track.

Example:

Instead of saying, “Increase sales,” try: “Increase monthly online sales revenue by 20% by improving our e-commerce website.”

2. Make It Measurable

Measurable goals allow you to track progress and determine success. By including numbers, percentages, or other measurable criteria, you create benchmarks to monitor your progress.

Example:

“Gain 50 new email subscribers per month” is a measurable goal. You can easily track your progress through email marketing analytics.

3. Ensure It’s Achievable

Your goals should challenge your business but still remain realistic. Setting overly ambitious goals can lead to frustration, while achievable goals build momentum and motivation.

Example:

If your business currently gains 10 new customers per month, aiming for 20 new customers is challenging yet attainable. Setting a goal of 100 new customers might be unrealistic.

4. Keep It Relevant

Every goal should align with your business’s mission, vision, and long-term objectives. Relevant goals ensure that your efforts contribute to your overall business growth.

Example:

If your goal is to expand your product line, ensure it aligns with your target audience’s needs and your brand’s core offerings.

5. Set a Time Frame

Goals without deadlines often get forgotten our pushed aside. Adding a time frame creates urgency and helps you stay focused on achieving your objectives within a set period.

Example:

“Launch a new product line by the end of Q2” gives a clear timeline to work toward.

Putting It All Together

When crafting SMART goals, ensure each component works together cohesively. Here’s an example of a fully SMART goal:

SMART Goal:
“Increase social media engagement by 15% over the next three months by posting three times a week and running two ad campaigns targeting our ideal audience.”

Benefits of SMART Goals for Small Businesses

Clarity and Focus: You know exactly what you’re working toward and why.
Improved Decision-Making: SMART goals guide your resource allocation and strategy.
Enhanced Team Collaboration: Well-defined goals help your team understand their roles and responsibilities.
Trackable Progress: Measuring your goals keeps you accountable and allows for course corrections if needed.

Tips for Staying on Track

Break Goals Into Smaller Tasks: Divide larger goals into manageable action steps.
Use Tools and Technology: Use project management software or goal-tracking apps to stay organized.
Regularly Review Progress: Check in on your goals monthly or quarterly to ensure you’re on track.
Celebrate Milestones: Acknowledge and celebrate when you hit key milestones to keep motivation high.

Start Setting SMART Goals Today…

How to Plan for the Year Ahead: Start...

As a small business owner, planning for the upcoming year is essential for sustained growth and success. A strong business plan serves as your roadmap. It helps you define your goals, identify potential challenges, and outline the steps needed to achieve your vision. Whether you’re revising an existing plan or starting fresh, this guide will help you create a business plan that sets your business up for a successful year ahead.

Reflect on the Past Year

Before planning ahead, take a moment to review your business’s performance over the last year. Analyze financial statements, assess customer feedback, and evaluate the success of key initiatives. Reflecting on what worked (and what didn’t) will give you valuable insights to guide your next steps.

Questions to Ask:

Did you meet your revenue and profit goals?
Which marketing strategies delivered the best ROI?
What operational challenges needs addressing?
Did you have sufficient cash flow to achieve your goals?

Set Clear and Measurable Goals

A strong business plan begins with well-defined objectives. Your goals should be SMART: Specific, Measurable, Achievable, Relevant, and Time-bound. Whether it’s increasing revenue, launching a new product, or expanding your team, having clear goals provides direction and focus.

Example Goals:

Increase revenue by 20% by Q4.
Launch two new products by the end of Q2.
Reduce operational costs by 15% by year-end.

Create a Financial Plan

Budgeting is a critical component of both your business plan and your year-long strategy. Outline your expected income, fixed expenses, and variable costs. Factor in opportunities for investment, such as marketing, hiring, or purchasing new equipment.

Pro Tip: Consider applying for an SBA 7(a) loan to secure affordable funding for growth initiatives like hiring, marketing, or expanding operations.

Revamp Your Marketing and Sales Strategies

To stay competitive, your marketing and sales plans need to evolve with market trends and customer preferences. Leverage data from the past year to refine your approach. Consider new channels, tools, or campaigns that align with your business goals.

Boost social media engagement with targeted ads.
Start a content marketing plan to drive organic traffic.
Invest in email marketing to nurture leads and retain customers.

Plan for Risks

Scaling a business requires anticipating potential obstacles. Identify risks—such as economic changes, supply chain disruptions, or regulatory updates—that could impact your operations. Develop contingency plans and consider insurance or financial reserves to protect your business.

Update or Create Your Business Plan

Once you’ve gathered your insights, set goals, and identified strategies, compile everything into a refreshed business plan. Your plan should include:

Executive Summary: Brief overview of your goals and strategies.
Market Analysis: Insights into industry trends and your target audience.
Operational Plan: Overview of your team, processes, and resources.
Financial Plan: Budget, projections, and funding needs.

Start the Year Strong

The start of a new year is the perfect opportunity to re-align your business goals and strategies. With a well-thought-out business plan, you can turn your vision into actionable steps that drive growth and success.

If you’re considering funding options to achieve your 2025 goals, NEWITY can help you access an SBA 7(a) loan quickly and efficiently.

Fuel your growth with a business loan.

Apply Today

Small Business Marketing ROI: Definition, Calculation, and Uses

No business owner wants to waste money on marketing tactics that don’t work. That’s why tracking and optimizing Marketing ROI is essential. It helps you decide which campaigns to prioritize and which to cut. For small businesses with tighter budgets, this is critical.

Marketing is the lifeblood of any small business. No matter how great your product or service is, customers need to know it exists.

With limited budgets and resources, every marketing dollar must work harder to attract, engage, and convert customers. Strategic marketing helps small businesses build brand awareness, establish trust, and compete with larger companies in an increasingly crowded marketplace.

Unlike big corporations with deep pockets, small businesses often operate on tight margins. This is why having an acute awareness of your marketing ROI is crucial.

Every dollar you spend on marketing should be working for you. From social media campaigns to email marketing and search engine optimization, the right tactics can help small businesses reach their ideal customers, generate leads, and build long-term loyalty, all without breaking the bank.

What is Marketing ROI?

Marketing ROI (Return on Investment) measures the effectiveness of your marketing efforts by comparing the revenue generated to the cost of those efforts.

It answers the question:

“For every dollar I spend on marketing, how much revenue do I earn?”

Marketing ROI can include metrics like:

Revenue growth
Profit
Net Revenue Retention (NRR)
Lead generation
Customer acquisition cost (CAC)

By calculating ROI, you can determine which campaigns deliver the best return on investment and allocate resources accordingly.

Why is Marketing ROI Important?

Small businesses often operate with limited cash reserves and strict budgets. Every dollar counts.

Tracking ROI helps you:

Measure campaign success – Know which efforts actually drive revenue
Set benchmarks – Compare performance over time and across channels
Allocate budgets wisely – Invest in high-performing tactics
Justify spending – Show stakeholders the value of marketing investments
Understand your audience – Learn which messages and channels resonate most

Even if you’re allocating $50 per month to boosting posts on social media, your ROI is still a crucial metric to help you gauge what is and isn’t working.

How to Calculate Marketing ROI

The simplest formula is:

(Revenue from Marketing Campaign − Investment) ÷ Investment

Example:

If you spend $1,000 on a campaign and generate $4,000 in revenue:

($4,000−$1,000) ÷ $1,000=3

Multiply by 100 for a percentage: 300% ROI or a 3:1 ratio.

This means for every dollar spent on your marketing campaign, you’re making $3 in return from that specific campaign.

Setting a Time Frame

ROI isn’t instant. Give campaigns enough time to generate results before calculating. Use consistent time frames (e.g., monthly, quarterly) for accurate comparisons.

What is a Good Marketing ROI

Industry benchmarks suggest a 5:1 ratio (500%) is strong— $5 in revenue for every $1 spent. However, your breakeven point depends on:

Profit margins
Overhead costs
Industry norms

If your margins are slim, even a 2:1 ROI might be acceptable. Always factor in your unique cost structure.

Marketing ROI in Practice

Here’s how ROI looks across common channels:

Pay-Per-Click (PPC) Ads

Google Ads:

Average ROI ranges from 2:1 to 8:1, depending on targeting and industry
Tip: Optimize keywords and landing pages to improve conversion rates

Email Marketing

ROI: Studies show email delivers 36:1—$36 for every $1 spent
Why so high? Low cost and direct engagement make email a powerhouse for small businesses

Paid Social Media

ROI varies widely based on platform, audience, and creative quality
Example: Boosted posts on Facebook can be cost-effective, but influencer campaigns may have unpredictable returns

How…

Scaling Your Small Business: How to Plan for...

Scaling a small business is an exciting milestone, but it comes with challenges that require careful planning. Scaling is different from simple growth.

Simple growth means small increases in revenue and resources. Scaling aims to grow your business while keeping costs low. Here’s how small business owners can prepare to scale effectively and sustainably.

Define Your Vision for Growth

Before you scale, it’s essential to know where you’re headed. Scaling doesn’t mean just adding customers or revenue, it means growing strategically while maintaining or improving efficiency.

Key Questions to Ask:

What does success look like in 1, 3, or 5 years?
What are the key metrics that will define your scaling success (e.g., revenue, customer base, profit margins)?
Are your current business operations ready to handle a surge in demand?

Having a clear vision ensures that every scaling decision aligns with your long-term goals.

Evaluate Your Business Model

A business model is a framework that outlines how a company creates, delivers, and captures value. It defines the core aspects of a business, including its target customer segments, value proposition, revenue streams, cost structure, and operational processes.

Key Questions to Ask:

Is my business meeting customer needs effectively?
Is my revenue plan sustainable?
Am I adapting to market trends and competition?

A well-designed business model acts as a roadmap. It helps you achieve profitability and growth by aligning resources, offerings, and customer needs. A thorough assessment prepares your business to scale efficiently and profitably.

Build a Strong Financial Foundation

Scaling requires capital, so it’s important to ensure your financial health is strong before expanding.

Evaluate Your Cash Flow: Ensure you have enough liquidity to cover increased expenses like inventory, hiring, or marketing.

Secure Funding: Consider an SBA 7(a) loan, which offers low-interest, long-term financing tailored for small business growth.

Monitor Financial Metrics: Track metrics like profit margins, debt-to-income ratio, and customer acquisition costs to identify areas of financial risk.

Key Questions to Ask:

How will you use the funds from the business loan?
Can I afford the repayment terms?
How will a loan impact your business long-term?

The SBA specifically designed 7(a) loans to provide small businesses with government-backed, long-term funding at low interest rates. At NEWITY, we make accessing these working capital loans simple and fast—our streamlined application takes less than 10 minutes to complete, and we help business receive funding 3 times faster than the national average.

Strengthen Your Team

Having the right people is equally important as having technology and funding. A skilled and aligned team not only helps you manage increased workloads but also drives innovation, improves efficiency, and maintains quality as your business grows.

Key Questions to Ask:

Where do you need additional support?
Can your budget support new hires?
How will new team members contribute to your long-term growth?

When you hire individuals who share your vision and bring complementary skills, they can take ownership of their roles, freeing you to focus on higher-level strategy. Additionally, a strong team fosters a positive workplace culture, which enhances employee retention and productivity, key factors in sustaining growth. Investing in the right talent ensures your business has the foundation it needs to scale efficiently and thrive long-term.

Prepare Marketing and Sales Strategy

Preparing a strong marketing and sales strategy is essential for scaling your business effectively. As you grow, a clear plan helps attract new customers, retain existing ones, and expand your market reach. Good marketing pays off significantly by creating brand awareness, building customer loyalty, and generating consistent leads that fuel sustainable growth.

Key Questions to Ask:

Are you reaching your target audience effectively?
Is your message clear and aligned with your brand?
How are you going to measure results? Identify key metrics like ROI, conversion rates, and organic engagement to ensure your efforts are driving results.

A well-defined strategy ensures your marketing efforts align with your goals, using targeted campaigns, data-driven insights, and tools like customer relationship management (CRM) systems to maximize impact. At the same time, your sales process should be streamlined to handle increased demand without compromising the customer experience. By investing in a solid marketing and sales strategy, you set your business up for long-term success and profitable growth.

Anticipate and Manage Risks

Growth often brings unexpected challenges, such as cash flow shortages, supply chain disruptions, or operational bottlenecks. Having a risk management plan in place ensures you can respond effectively. By identifying potential risks in advance, you can implement strategies like diversifying suppliers, maintaining financial reserves, or creating contingency plans to minimize impact.

Key Questions to Ask:

What could go wrong and how would it impact your business?
What is your plan to mitigate these risks?
Are you prepared financially to adapt if things do not go as planned?

Proactive risk planning not only protects your business but also builds resilience, enabling you to scale confidently while maintaining stability. A well-prepared business is better equipped to adapt to uncertainties, ensuring sustainable growth and long-term success.

Planning for scale involves more than just increasing revenue, it’s about growing strategically while maintaining efficiency, quality, and financial stability. By defining your vision, optimizing your business model, securing funding, and preparing your team and operations, you can scale your small business sustainably. Remember, scaling is a journey that requires constant evaluation and adjustment, but with the right plan in place, it can lead to significant long-term success.

Ready to scale your business? Explore how an SBA 7(a) loan from NEWITY can provide the capital you need to grow efficiently.

As December approaches, it’s the perfect time for small business owners to focus on 2025 planning. Setting yourself up for success starts with wrapping up 2024 strategically. Here are the top six things to check off your to-do list before the new year.

1. Maximize Tax Deductions

Planning any major purchases for 2025? Consider making those acquisitions now to claim them on this year’s taxes. From equipment upgrades to office supplies, these deductions can help lower your taxable income and reduce your bill come April.

2. Evaluate Insurance Coverage

As you reflect on your business’s growth and evolution over the past year, review your current insurance policies. Do they still align with your needs? Whether it’s liability, property, or employee-related coverage, ensure you’re properly protected heading into the new year.

3. Contribute to or Set Up a Retirement Plan

If you’re self-employed, retirement plans like a SEP-IRA or solo 401(k) offer significant tax advantages. Check if you’ve reached your maximum contribution for 2024 or, if you don’t yet have a plan, consider setting one up now to start the new year on the right foot.

4. Assess New Technology Solutions

Technology evolves rapidly, and so should your business processes. Take a moment to reevaluate your current tools and workflows. Are there better solutions available to streamline daily tasks or resolve challenges you faced in 2024? Updating your technology now can save time and money in the year ahead.

5. Secure Working Capital

Start 2025 strong by securing the capital you’ll need to fuel your growth. Whether it’s for new hires, marketing campaigns, or scaling operations, having financial flexibility is crucial. SBA loans are a reliable and affordable option for small businesses, offering lower interest rates and higher approval rates than private loans.

6. Celebrate Wins and Thank Your…

Business Term Loan vs. Line of Credit: What’s...

Term loans and lines of credit are two different ways small businesses can borrow capital from lenders. However, they operate differently and serve distinct purposes. Here’s a breakdown to help you decide which might be the best fit for your business. 

What is a Term Loan?

A term loan provides a lump sum of money upfront, which you repay over a set period with fixed or variable interest. This is a more structured financing option compared to a line of credit. 

The lender determines loan amounts based on the borrower’s needs, income, ability to repay and creditworthiness. Loans are either secured or unsecured. You secure a loan by offering collateral, assets that the lender can seize the collateral to recover their money if you fail to default on the loan.  

An unsecured loan does not require any collateral.

For small business owners, the SBA 7(a) is an excellent financing option. This government-backed loan specifically helps small businesses by offering long-term repayment options and low interest rates. Structured as a traditional term loan, it provides a lump sum upfront, which you repay in installments over the loan term. 

What is a Line of Credit?

A line of credit is a revolving credit arrangement that allows you to borrow up to a certain limit as needed. You only pay interest on the amount you use, not the entire credit limit, but sometimes you are required to pay a fee on the unused amount as well. This makes it ideal for managing cash flow or covering unexpected expenses. Lines of credit are often renewed annually and can be reused as long as you don’t exceed your credit limit and meet repayment terms. 

Lines of credit generally come with higher interest rates compared to term loans. They also tend to impact consumer credit reports and scores more quickly and significantly. To better understand how a line of credit works, think of it as similar to a business credit card. You’re given a credit limit that replenishes as you pay down the balance, covering both the principal and interest. 

FeatureTerm LoansLines of Credit BorrowingLump sum upfrontBorrow as needed, up to a limitRepaymentFixed Installments over time, but will fluctuate if variable interest loan Flexible; only repay only what you useInterestLower…

The Corporate Transparency Act and Beneficial Ownership Information...

Small business owners need to stay informed about new regulations that may impact their operations. One such regulation is the Corporate Transparency Act (CTA), which introduces a significant reporting requirement for businesses. Central to this act is the Beneficial Ownership Information Report (BOIR), a mandatory filing designed to increase transparency and combat illegal financial activities. Here’s what you need to know about the CTA, the BOIR, and why it matters for your business.

What is the Corporate Transparency Act?

Congress introduced the CTA in 2021 to prevent the misuse of anonymous entities for illicit activities such as money laundering, tax evasion, and illegal financing. It requires some U.S. companies to disclose information about their beneficial owners. They must report this to the Financial Crimes Enforcement Network (FinCEN), which is part of the U.S. Treasury Department.

The CTA was created to prevent individuals with malicious intent from using U.S. entities to hide ownership or engage in illegal activities. The CTA was designed to prevent significant threats to national security and economic integrity. 

What is the Beneficial Ownership Information Report (BOIR)?

The BOIR is the document businesses must file to comply with the CTA. It requires companies to report key details about their beneficial owners. Beneficial owners are individuals who directly or indirectly own or control 25% or more of the company, or who have substantial control over its operations.

Information required in the BOI report includes:

Full Legal Name
Date of Birth
Current Residential or Business Address
Unique Identifying Number: This can be a driver’s license, passport, or other government-issued ID.

Businesses must submit their BOIR to FinCEN who will keep the information private and inaccessible to the public. Only authorized government agencies and financial institutions (under specific circumstances) can access the information to combat financial crimes.

Who needs to file a BOI Report?

The reporting requirement applies to:

Domestic corporations
LLCs
Other entities formed by filing documents with a state or tribal office
Foreign entities registered to do business in the U.S.

Certain entities, such as banks, public accounting firms, and large operating companies, are exempt from this requirement. However, startups, small businesses, and other entities that don’t meet these exemptions will likely need to comply.

The Deadlines for BOIR Filing

Companies that existed on or prior to January 1st, 2024: Must report beneficial ownership by January 1, 2025.

Companies that were formed after January 1st, 2024, have different deadlines:

Those created between January 1, 2024, and January 1, 2025, will have 90 days from either the actual notice of formation or public announcement, whichever comes first, to file their BOI report.
Businesses established on or after January 1, 2025, will have 30 days from notification or public announcement of their formation to submit their first report to FinCEN.

Businesses must submit corrections or updates to previously filed information within 30 days of the changes.

Penalties for Non-compliance

Non-compliance with the Corporate Transparency Act can result in severe penalties. These include fines ranging from $500 per day to $10,000 per violation and up to two years of imprisonment.

How the CTA…

When Should I Get a Small Business Loan?

Access to capital is vital for small businesses, whether for growth, sustaining operations, or navigating challenges. However, deciding when to take on a business loan requires strategic planning. It’s not just about fixing immediate problems—timing your funding can make a significant difference. There are key situations when taking on capital can benefit your business:

1. When You're Ready to Expand

Growth is a major reason small businesses seek funding. Expansion could mean opening a new location, launching new products, or increasing inventory to meet rising demand. Each of these initiatives requires upfront investment, and an SBA 7(a) loan can provide the necessary funds to help you reach your expansion goal. If your business is thriving and there’s an opportunity to grow, an SBA loan can help you capitalize on it without draining your cash reserves.

Key Tip: Secure funding early in the planning stages so you can move quickly when expansion opportunities arise. Lenders are more likely to approve loans when there is a clear plan for how the funds will generate increased revenue.

2. To Manage Cash Flow During Seasonal Fluctuation

Many businesses experience seasonal highs and lows, which can create cash flow challenges. For example, a retailer might see a surge in sales during the holiday season but struggle during off-peak months. An SBA 7(a) loan can help you during slow times. It ensures you can pay for expenses like payroll, rent, and inventory.

Key Tip: Use an SBA 7(a) loan to secure steady cash flow throughout the year. This will help manage seasonal dips without relying on costly short-term loans.

3. To Consolidate High-Interest Debt

If your business has several high-interest debts, you can combine them into one SBA 7(a) loan. This can make your payments easier and help you save money. With competitive interest rates, SBA loans can help reduce the amount you pay in interest each month and improve cash flow.

Key Tip: Make sure the terms of your new SBA 7(a) loan are more favorable than your existing debts. This will help you manage your finances more effectively and save on interest payments.

4. To Invest in Marketing and Advertising

Growing a small business often requires increased visibility, and investing in marketing and advertising can be a great way to attract new customers. An SBA 7(a) loan can provide the capital you need to launch new marketing campaigns, invest in digital advertising, or enhance your brand’s online presence.

Key Tip: Before applying, develop a clear marketing strategy, budget, and specific measurable goals. This will help you maximize the return on your investment and understand how to best utilize marketing and advertising in the future.

5. To Support Hiring and Workforce Development

In the world of business finance, managing debt is a crucial aspect of keeping your operations running smoothly. Two common strategies for dealing with multiple debts or high-interest loans are debt consolidation and refinancing. While both can help improve your financial situation, they serve different purposes and work in distinct ways. Let’s explore what each one entails, the key differences, and how to decide which might be the best option for your business.

What is Debt Consolidation?

Debt consolidation is the process of combining multiple debts into a single loan. Instead of juggling multiple payments with different interest rates, terms, and due dates, you take out one larger loan to pay off all your existing debts. This way, you only have one monthly payment to manage, often at a lower interest rate.

What is Debt Refinancing?

Refinancing involves replacing an existing loan with a new one, often with better terms. Unlike debt consolidation, refinancing is typically focused on a single loan rather than multiple debts. When you refinance, you might get a lower interest rate, extend the loan term, or change the loan type (e.g., from variable to fixed rate).

Key differences between debt consolidation and refinancing:

Debt ConsolidationDebt Refinancing PurposeCombine multiple debts into one loan Replace an existing loan with a new one Number of LoansMultiple debts combined into one One loan replaced with anotherInterest RatesPotential…

Business Loan Terms You Need To Know

You’ll encounter many terms when searching for a business loan. In this guide, we’ll walk you through all the essential terms related to small business loans. Understanding these terms equips you to navigate the loan process, choose the right financing option, and negotiate more favorable terms with lenders.

Interest and Fees Annual Percentage Rate (APR)The APR is the annualized cost of a loan or credit, expressed as a percentage. APR includes not only the interest rate, but also other fees and costs associated with the loan. It provides a clearer picture of the total cost…

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Business Insights

Preparing Your Small Business For The Holiday Season

Key Takeaways

1. Leverage Social Media to Spark Holiday Engagement

2. Expand Your Hours

3. Update Your Information Everywhere

4. Promote Gift Cards

5. Support Your Team

Make This Holiday Season Your Best Yet

Start Planning Ahead For The New Year

Read more Insights

Benefits of Secured Loans

Drawbacks of Secured Loans

Benefits of Unsecured Loans

Drawbacks of Unsecured Loans

Collateral Requirements

Why Choose an SBA 7(a) Loan?

Discover how much you are eligible to receive in just 10 minutes!

Example:

Example:

Example:

Example:

Example:

Benefits of SMART Goals for Small Businesses

Tips for Staying on Track

Reflect on the Past Year

Questions to Ask:

Set Clear and Measurable Goals

Example Goals:

Create a Financial Plan

Revamp Your Marketing and Sales Strategies

Plan for Risks

Update or Create Your Business Plan

Start the Year Strong

Fuel your growth with a business loan.

Get the capital your business needs to succeed.

Need help?

To qualify for an SBA 7(a) small business loan, your business must be: