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Bankable Partners with Old National Bank

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Last month, Bankable made a statement, as a company, that we would stand with the Black Community and Black-owned small businesses in Indiana. We recommitted to listening, learning, changing, and innovating so that we can better amplify and support people of color.

One way we are showing our commitment to the minority-owned small businesses is by partnering with Old National Bank.  Old National Bank has provided a grant of $50,000 that will be used to provide fair and affordable loans and technical assistance to minority-owned businesses who need extra support amidst the COVID-19 crisis. 

This will help support and elevate minority-owned businesses in Indiana who are members of Mid-States Minority Supplier Development Council (MSDC). Part of the mission of Mid-States MSDC is to promote successful minority enterprises in Indiana by being an advocate for minority-owned businesses and provide economic assistance. This is done through networking, coaching, training, and more.

While we feel very honored and excited to be a part of this venture, we are still continuing a never-ending commitment to seek and create more opportunities for minority-owned businesses. There are more projects and initiatives in the works behind the scene that we will share when we can. So, expect to hear more from us soon. 

To learn more about this partnership and program, please contact us at marketingadmin@bankable.org.

Kiva Partnership

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Since February, Bankable and Kiva have been working together to help facilitate financial opportunities for small Indiana businesses and entrepreneurs. Kiva loans are crowdfunded by people around the world, who are willing to lend as little as $25, to small businesses gaining access to 0% interest loans of up to $15,000. A Kiva loan gives borrowers the opportunity to continue to grow which in turn allows them to pursue their capital needs. As a borrower starts to repay their loan, the lenders who helped contribute will be paid back for what they lent.

Bankable’s first partnership with Kiva was to help Kenny Kendall’s Gourmet Popcorn find capital. Latarsha Jennings had the dream of serving others and knew that this was the way she wanted to do it. Kenny Kendall’s Gourmet Popcorn was able to reach their total goal of $7,200 within just 42 months thanks to the help of many generous lenders! 

Geoffrey Jones has been a huge help within this partnership with Kiva. Geoffrey is a Relationship Manager and Loan Officer here at Bankable and a Capital Access Manager with Kiva. So we wanted to reach out to him to ask what it has been like working with Kiva from his point of view, and here is what he said, “It’s been a great privilege serving as this region’s Capital Access Manager with Kiva. I have the opportunity to continue meeting small business owners in [Indiana] who could really benefit from Kiva funding. Seeing their loans become fully funded by lenders from all over the world is something else. It’s one thing to receive full funding for their business, but seeing dozens of people you’ve never met before lend and help out just means the world to these business owners.” 

This partnership between Bankable and Kiva works really well because both organizations are able to focus on getting small business owners the exact amount of capital they need. No one is turned away! At Bankable, we always find a way to help get clients funding. We are extremely honored to be partnered with Kiva and are excited to see the many business owners we can help! 

Content, Content, Content

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Laptop with graphics and the words content on it

Sometimes marketers can get stuck in a rut! It can be hard to come up with new ways to market your business especially after you have already created some great pieces of content. We are here today to help you plan your content anew.  Because at Bankable, we want to help you!

What is good content?

First, we should ask the question “what is good content?” Sometimes, we can think a picture we take on our phone is not good enough or we need some high-quality content that was produced by a professional filmmaker/photographer/etc., but that is not the case! Yes, high-quality productions are great and refreshing, but it’s not always appropriate.  Good content is what you can bring to the table for your audience with the resources you have. Here are some examples of good content from some of our clients as well as us:

These examples are very doable! All it requires is a little bit of time.

One Piece of High-Quality Content

Now, let’s say that you did hire someone to produce a great video of one of your business offerings. It’s beautiful. You love it, but you don’t know what to do with it. We have definitely been there before. Here are a few tips that could help you get the most bang for your buck on that one piece of content:

  • Share it on all of your social media platforms: This should be a no-brainer, but if you have more than one platform, publish it everywhere! 
  • Strategize what your demographic would think of this content: You can start brainstorming where this content fits best. If you have a niche demographic on one platform and not the other, focus your content on them. 
    • EX: You own a coffee shop, and you have a cool video showcasing different types of coffee and how they are ethically sourced. On Instagram, you have a young audience that cares deeply about how your coffee is made. So, you want to hype up the video as a behind the scenes moment. On the other hand, your Facebook page is filled with people who care about the environment. On your Facebook page, you would want to discuss how your business also cares about the environment. This can be done using the same video, but just switching up the context that surrounds it ie. the caption of a post.
  • Break up your content: You don’t have to post all of a video or all of a photo session. Break them up! If in a video you talk about multiple things about your business, you can choose which part you want to show now and which part you want to share later. 
  • Reuse, Reuse, Reuse: Don’t let one piece of content die! You work too hard to let that happen. You can always wait a little bit, maybe a few months, and then repost it again. It might seem strange to keep pushing the same content, but the likelihood that someone will notice is not high in the beginning. With the way algorithms are now, it should be pushed in front of a new audience or a new portion of your following each time.

 

These are just a few tips and tricks when working on content. Sometimes it can look like a scary beast, but it is worth it when you start to see the results you want. This can only happen if you continue to push through the social media void. 

 

Let us know if you have any questions or if you want to meet with someone on our Growth Ready team to discuss how we can help you with your social media presence by emailing us at marketingadmin@bankable.org.

 

A few more resources:

2Toms Embraces New Normal

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2Toms Embraces New Normal

2Toms_glass_overlooking_lakeTo say that Tom Carpenter and 2Toms Brewing Company have adapted to the new normal is an understatement. During the pandemic, they have been recreating and redesigning their business model which has been attracting all new customers. 2Toms was recently featured on Mo Head Y’all’s podcast where he explained what effect the pandemic has had on their business and what they are doing in terms of supporting their community during the protests. 

In terms of staying relevant during the pandemic, 2Toms decided to shift their business to a full To-Go model. Although their food sales weren’t up to their standard, their beer sales exceeded their expectations. Some types even sold out in less than 24 hours!Sold_out_beer  They were also able to keep their staff thanks to receiving a PPP loan. Since the start of the pandemic, they have gained a lot of new interest within their community. They are now opening at 50% capacity and they still have a To-Go option. They have even implemented a feature on their app to start a tab when you are within 10 miles of the restaurant! 

Since the protests have started they have also been very active in their support of the Black Lives Matter movement. They are currently collaborating with the Weathered Souls Black Is Beautiful campaign.Black_is_beautiful_post They were challenged to put their personal touch on the Weathered Souls version of the beer to support the movement while giving the proceeds to their community. 2Toms believes that it’s their business’s responsibility to respond when their community is in trouble. They want everyone who picks up their beer to ask the question of  “what can I do more?” or “how can I be involved?” At the end of the day, they want to start a conversation and they want their beer to be a vehicle for that conversation.

When should your business become an S corp?

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When should your business become an S corp?

You may have heard the term “S corp” thrown out online by tax professionals and fellow entrepreneurs, and you know it’s a sign of growth that your little sole prop has made it into the big leagues. But, you have no idea what it means and why it’s significant. You might get it confused with other terms like “corporation,” “single-member LLC,” or “partnership,” and you might not understand how it could hinder your organization if you become one too soon.

What follows is a brief explanation of what a Subchapter S corporation is and when a small business should be inclined to become one. Hopefully, it pulls back the curtain on the jargon associated with the term. 

An S corporation is a tax designation determining how your firm is viewed and treated by state and federal tax laws. Sole proprietorships, partnerships, and regular corporations (three different types of legal and tax entities) elect to become S corporations in order to be taxed in a certain way as prescribed by law. The designation permits your business to be viewed as a pass-through entity, allowing the profits of the business to be taxed at individual rates while maintaining a distinction between the business and the individual (or individuals) owning the business. For sole proprietorships, the benefits of an S corp designation include lower payroll taxes and autonomy, a characteristic deemed necessary by investors and creditors. 

Although it is not difficult to become an S corp, it takes time and money to sustain the status and thus your small business should not become one until you are prepared to see it through. There are three indications you are ready for the change:

  1. Your business starts making a profit. New businesses often take years to start making a profit. And once they do, the proprietor realizes they are liable to pay taxes for the first time and usually when she least expects it. If your business is not making a profit, there is little use for an S corp status. Otherwise, the designation opens the door for tax-saving strategies involving the avoidance of payroll taxes. 
  1. You want to pay yourself a salary. Strangely enough, you are not allowed to pay yourself a salary until your business is designated as a corporation or an S corporation. Some find no inconvenience with this rule, yet for others it limits their ability to budget, plan, and obtain personal credit. Banks often look unfavorably upon sole proprietors or independent contractors because of their inconsistent earnings. However, once these people present W-2 forms, proving their income, financial institutions are ready to extend credit. If you want to give yourself a steady wage and withhold payroll taxes on a regular basis, you are ready to become an S corp. Incidentally, paying yourself a salary is a tax-saving strategy with S corps. Owners/employees of an S corp are required by law to pay themselves a reasonable salary for the services they provide to their business. This salary is deducted from the income of the firm, and, unlike partnerships or sole proprietorships, the remaining profit is not subject to self-employment tax.
  1. Your business starts making a profit. New businesses often take years to start making a profit. And once they do, the proprietor realizes they are liable to pay taxes for the first time and usually when she least expects it. If your business is not making a profit, there is little use for an S corp status. Otherwise, the designation opens the door for tax-saving strategies involving the avoidance of payroll taxes. 
  2. You want to pay yourself a salary. Strangely enough, you are not allowed to pay yourself a salary until your business is designated as a corporation or an S corporation. Some find no inconvenience with this rule, yet for others it limits their ability to budget, plan, and obtain personal credit. Banks often look unfavorably upon sole proprietors or independent contractors because of their inconsistent earnings. However, once these people present W-2 forms, proving their income, financial institutions are ready to extend credit. If you want to give yourself a steady wage and withhold payroll taxes on a regular basis, you are ready to become an S corp. 

    Incidentally, paying yourself a salary is a tax-saving strategy with S corps. Owners/employees of an S corp are required by law to pay themselves a reasonable salary for the services they provide to their business. This salary is deducted from the income of the firm, and, unlike partnerships or sole proprietorships, the remaining profit is not subject to self-employment tax.

  3. You want to separate yourself from your business. S corp status allows and requires sole proprietors to separate themselves from their business beyond legalities. Once the designation occurs, the business keeps its own books and bank accounts and must file its own tax return. Autonomy makes a business appear stronger, more reliable, and more independent in the eyes of investors and creditors. You are ready for the transition if you want to draw a distinct line between you and your business. Separating yourself from your business is usually first accomplished by becoming a limited liability corporation, a legal entity not related to tax rules. It should be noted an LLC can become an S corp, and thus the two entities are not comparable. An LLC can be taxed as a sole proprietorship (which files form 1040, Schedule C), a partnership (which files Form 1065), a corporation (which files form 1120), or an S corporation (which files form 1120s). Many articles and professionals interchange the term “LLC” with “sole proprietorships” or “partnerships.” Be aware of the context they are using to determine whether they are speaking about legal liability or tax treatment.

What happens if you become an S corp before you need to?

In most cases, your accountant or your attorney will properly advise you when to take the plunge. However, sometimes these professionals will encourage the election before you are ready so they can charge you for their services. The likely detriments resulting from an early election relate to paying higher tax preparation fees, payroll fees (since you now must pay yourself a salary), and various state maintenance fees. The less likely drawbacks include prematurely locking the company into an entity with excessive restrictions on ownership and distribution of profits. S corporations cannot have more than one hundred shareholders and must distribute profits strictly on the percentage of ownership shares. Small businesses are more exposed to the risks of higher fees than ownership restrictions, but it is important to keep them in mind. 

Becoming an S corp is straightforward, as is reverting an S corp to a sole proprietorship, partnership, or regular corporation. Once the revocation happens, companies are ineligible to reapply for S corp status for five years. Therefore, it is important to know when a business could profit from becoming an S corporation or when it is not prudent to do so. Only you, as the business owner, can make that call.

If you would like further advice on when to become an S corporation, please email us at loans@bankable.org. We would love to help.

Written by: Danielle Deal CPA

If you would like some resources on S corporations, check out the following links:

PNC Loan of $5 Million

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Bankable Receives 5 Million Dollars to Help Indiana Small Businesses

PNC Bank has loaned 5 million dollars to Bankable to help fund the Paycheck Protection Program Loan put in place to help small businesses across Indiana who have been affected by the COVID-19 outbreak. Bankable has used these funds to give small businesses access to the financial support they cannot get from traditional banks. 

PPP loans are put in place as an incentive to keep employees on payroll.  As long as workers are kept on payroll for 8 weeks and the funds are used for payroll costs, interest on mortgages, rent, and utilities the loan will be forgiven.  This is a great opportunity to help small businesses recover from the impact of COVID-19.“The funds have actually already been deployed to help Indiana small businesses secure PPP loans,” said Adam Hoeksema, Executive Director at Bankable, “with the help of the $5 million in loan funding from PNC, we were able to assist 301 small businesses.” Bankable loaned out an average of $26,000 dollars per business.  Most of the funding went to underserved small businesses including 30% to women-owned businesses, 35% to businesses in low to moderate-income census tracts, and 38% to minority-owned businesses.  Bankable is determined to continue helping small businesses and this low-rate loan from PNC is a step in the right direction.

Bankable is a nonprofit organization that is focused on the economic development of Indiana communities through the creation, growth, and sustainability of jobs through small businesses. This is done by equipping under-served small businesses with capital solutions, business development resources, and meaningful mentorship so they can become bankable. Started in 2010, Bankable is a certified SBA microlender, SBA Community Advantage Lender, and a CDFI.