Small Business

FAQs & Resources

Knowledge is Power.

Q. What is SCORE and how can it help me?
A. SCORE "Counselors to America's Small Business" is a nonprofit association dedicated to educating entrepreneurs and the formation, growth and success of small business nationwide. SCORE is a resource partner with the U.S. Small Business Administration (SBA).

SCORE is headquartered in Herndon, VA and Washington, DC and has 389 chapters throughout the United States and its territories.

How SCORE can help you:

• Free mentoring advice online; simply ask a question, choose a mentor, and receive a response within 48 hours: Ask SCORE Online
• In-person mentoring at local office:

  Northwest CT Chamber of Commerce in Torrington:
  333 Kennedy Drive
  Torrington, CT 06790
  Tel: 860-482-6586
  score@nwctchamberofcommerce.org

• "How-to" articles and business templates
• Online workshops and learning

Q. What is the Small Business Administration (SBA) and an SBA Loan?
A. The U.S. Small Business Administration (SBA) was established in 1953 and provides financial, technical and management assistance to help Americans start, run, and grow their businesses. SCORE is a resource partner with the SBA. The SBA administers a Congressional grant, which provides SCORE with funding. SCORE volunteers work with the SBA to provide small business counseling and training to entrepreneurs through SBA offices.

The SBA offers a number of programs to help small businesses:

• Technical Assistance
• Women's Business Ownership
• Financial Assistance (SBA Loans)
• Disaster Assistance Recovery
• Advocacy, Laws & Regulation

SBA loans can help provide the credit you need to start or expand your business. An SBA loan may be a good option for those who don't currently meet their bank's lending criteria. To learn more, visit the SBA web site.

Q. How can the CSBDC assist my small business?
A. The Connecticut Small Business Development Center (SBDC) is part of Central Connecticut State University. Their mission is to assist in the creation and growth of small businesses in Connecticut, including one-on-one counseling as well as group training programs at regional locations around the state. SBDC's regional offices are staffed by professional business counselors who provide one-on-one counseling without charge to Connecticut's small business community. Locate an office near you.

The SBDC's web site also provides a host of information and resources right at you finger tips. The "How to" section offers a list of topics to assist you in completing any task you have for your business, including the creation of a marketing plan and tips to getting your loan application approved.

Q. What is cash flow?
A. Cash flow refers to the amount of cash being received and spent by a business during a defined period of time, however most bankers consider cash flow the residual amount after expenses. Essentially, it is the residual money that comes in to your business, and is used to define your business's performance. For example, an antique dealer can buy a table for $500, and then sell it for $1000. While the dealer makes a profit of $500, he has cash flow of $1000 until he pays for the merchandise. His net cash flow is therefore $500. The opposite scenario may occur if the business needs to pay for the merchandise in advance and therefore have a temporary negative cash flow. A business that is profitable is not necessarily liquid, and can fail because of shortage of cash, which is where bank financing becomes useful.

Q. What is working capital?
A. The cash available to a business for day-to-day operations. Working capital allows bills to be paid while awaiting payment of cash for sales. In accounting, it is current assets less current liabilities, and can tell you if you have enough protection to take advantage of opportunities and/or handle emergencies on short notice.

Q. What is a revolving line of credit and why would I need one?
A. Typically, it is a credit limit at a variable interest rate that is readily available to a business to draw upon as the need arises, for immediate borrowing. To repay the line, a business makes monthly payments that can usually be deducted directly from the business checking account. Revolving lines cover temporary cash-flow needs, such as financing receivables, purchasing inventory, or taking advantage of seasonal opportunities.

Q. Why would I consider equipment leasing v. purchasing?
A. Oftentimes, while you think you can't afford to upgrade, the reality is you can't afford NOT to. Growing your business and staying competitive means ensuring your equipment and technology is up-to-date. Leasing can offer a number of advantages, including:

• Offers a lower cost option with fixed payments that allow you to conserve your working capital for other important needs
• 100% financing may be available
• Your lease may allow you to retain the tax benefits of ownership
• When evaluating profitability, leases can have a positive effect on ROA (return on assets)
• Leases can be structured to qualify as on or off balance sheet, depending on your needs and providing accounting flexibility

Q. Can a Health Savings Account be a good option for my business?
A. A Health Savings Account (HSA) combines a qualified High Deductible Health Plan (HDHP) with a savings account, and works together to cover routine and unexpected medical expenses. They lower the premiums of employee health insurance, and by making pre-tax contributions, an employee can lower their income taxes. In addition, HSAs also save your business money on gross payroll and payroll taxes because employer contributions are pre-tax as well. Another advantage to HSAs is that they add a valuable option to your company's benefits package, thus helping to attract and retain employees.

USB acts as an HSA custodian — learn more.