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The realization concept states that a accounting transaction takes place only for those economic events to which the entity is a party. This principle rules out recognizing a gain based on the appreciated market value of a still owned asset. A gain or loss on a marketable security occurs only when sold, not on the daily fluctuation of the share price.

The historical cost principle requires that economic resources be recorded in terms of the amounts of money exchanged at that moment in time. When a transaction occurs, the exchange price is by its nature a measure of the value of the economic resources that are exchanged. This is in contrast to the fair market value which is the estimated value of the asset if sold on a specific moment in time.

Forecasting is a projection of the anticipated financial performance of a company. Forecasts typically include a projected income statement,a pro-forma balance sheet and a cash flow statement. In order to arrive at projected figures, extensive research should be done to including statistical information on the competition, product trends and client demographics. This information will help you obtain reasonable estimated sales amounts. You should also get quotes from suppliers and realtors to obtain estimated expense amounts. Projections are not a picture of what you would like to see happen to your company, but carefully calculated, realistic numbers. Speak to your local CPA to assist you in this process

Forecasting is a projection of the anticipated financial performance of a company. Forecasts typically include a projected income statement, a pro-forma balance sheet and a cash flow statement. In order to arrive at projected figures, extensive research should be done to including statistical information on the competition, product trends and client demographics. This information will help you obtain reasonable estimated sales amounts. You should also get quotes from suppliers and realtors to obtain estimated expense amounts. Projections are not a picture of what you would like to see happen to your company, but carefully calculated, realistic numbers. Speak to your local CPA to assist you in this process.

Forecasting is a projection of the anticipated financial performance of a company. Forecasts typically include a projected income statement, a pro-forma balance sheet and a cash flow statement. In order to arrive at projected figures, extensive research should be done to including statistical information on the competition, product trends and client demographics. This information will help you obtain reasonable estimated sales amounts. You should also get quotes from suppliers and realtors to obtain estimated expense amounts. Projections are not a picture of what you would like to see happen to your company, but carefully calculated, realistic numbers. Speak to your local CPA to assist you in this process.

Generally, it is not the type of business that matters, but the credit worthiness of the guarantors, the financial performance of the business and the collateral pledged. The real issue is that often service based businesses have very few hard assets such as inventory, equipment or accounts receivable to pledge as collateral, but banks and the Small Business administration require some form of collateral. Business owners often pledge personal assets to obtain a loan.

Generally, it is not the type of business that matters, but the credit worthiness of the guarantors, the financial performance of the business and the collateral pledged. The real issue is that often service based businesses have very few hard assets such as inventory, equipment or accounts receivable to pledge as collateral, but banks and the Small Business administration require some form of collateral. Business owners often pledge personal assets to obtain a loan.

Interim financing is short-term financing obtained for business purposes only until another source of long-term funding comes in. An example is a short-term construction loan to build a warehouse. When the building is complete, a long-term commercial mortgage is used to pay off the construction loan. The mortgage, similar to a home mortgage, is paid back over a number of years.

Your personal credit history is considered for a business loan because it gives the lender or bank a history of your personal money management, demonstrates repayment of debts and it lets the lender know of existing debts including delinquencies, bankruptcies, references, liens, student loans, etc. It is also important because if your business is a sole proprietorship or individual, there in no difference in credit history for loan purposes. Generally, if you business is a corporation, LLC, partnership, trade company, etc., then the bank or lender looks at the business history.

Your personal credit history is considered for a business loan because it gives the lender or bank a history of your personal money management, demonstrates repayment of debts and it lets the lender know of existing debts including delinquencies, bankruptcies, references, liens, student loans, etc. It is also important because if your business is a sole proprietorship or individual, there in no difference in credit history for loan purposes. Generally, if you business is a corporation, LLC, partnership, trade company, etc., then the bank or lender looks at the business history.