Picture it – you just aced the CPA exam, you’ve got a team of like-minded professionals who have your back, and you’re ready to embark on that can-do American entrepreneurial spirit and open your very own accounting firm.
Sounds great, right? Not to rain on anyone’s parade, but there’s one big question you need to ask yourself before you get started – where are you going to get the money from?
It doesn’t take an accounting genius to know that operating your own small business in America requires a lot of money to get started, and nearly as much money to keep it open. Luckily, these days you’ve got more options than ever before to get the financing you need for your business, whether you’re looking to start from the ground up or just need a quick injection of cash to get you through the busy season until tax time comes around again.
Take a look at these five ways to get a CPA business loan, and get down to business:
- Friends and Family – Sure, nobody likes having to go back to mom and dad for money, but the people that know you best might actually be a good option for getting your business off the ground. The plus side is there’s not going to be any interest or repayment terms you have to deal with, but the downside is you’re going to make the holidays really awkward if you owe your parents a lot of money from your business – but luckily you’ve started getting pretty good with finances, right?
- SBA Loans – The Small Business Administration is a great option for small businesses of all types, and accounting firms are no exceptions. With a wide variety of programs and funding types to choose from, the SBA is a great option for CPA firms looking to get started. Check out this blog post from Accounting Broker for more information on the specific SBA programs that might apply to your accounting firm.
- Credit Cards – Just like for your private finances, credit cards can be useful for small businesses so long as you’re careful with your spending. According to the Small Business Administration, up to 10% of all financing for small businesses come from credit cards, whether for startup costs or covering daily expenses and financial needs. Obviously, care needs to be taken to prevent your debt from piling up too far, and in many cases your business credit is connected to your personal credit, but if you’re careful with your money, this is always an option.
- Business Loans – There’s a lot of options out there for obtaining business financing, and finding the best one depends on a lot of things (how much you need, what you use it for, etc). However, the important thing to keep in mind is that a lot of places make a distinction between startup loans and standard business financing. For example, places like Lendio can offer business loans for startups to help get things moving, but a lot of funding providers like Credibly or NerdWallet, or even financial institutions like Bank of America won’t offer business loans until your business has been in operation for a set amount of time and has a minimum amount of financial assets. Keep all this in mind when deciding where to apply for a loan, and it’ll help you with the bigger decisions.
- Grants & Government Programs – Finally, even above and beyond the federal SBA programs mentioned above, a lot of local or state governments offer specific grants and programs to small businesses in order to help bolster the local economy and create jobs. After deciding where your CPA firm is going to be operating, do some research and see if any local programs are available to help give your business that extra financial push whether at the state or local levels. Fundera has a great list of small business grants, and USA.gov has a few good suggestions for finding state and local assistance.
While running a CPA firm will require about as much attention to your own finances as your clients’, with a little careful planning (and some help from the banks or your family), your accounting practice will be as successful as you’d hoped it would be.
