CCPA

December 28, 2022Privacy0 comment

Last Revised: December 21, 2021

YOUR RIGHTS UNDER THE CALIFORNIA CONSUMER PROTECTION ACT (“CCPA”)

Your California Privacy Rights

The CCPA provides California residents with specific rights regarding their personal information. This notice describes your CCPA rights and explains how to exercise those rights. This notice also includes information regarding the collection, use, disclosure, and sale of personal information and the rights of consumers regarding their own personal information.

Clade Point does not sell your personal information to anyone, including to third-parties as defined under the CCPA.

Information you provide to Clade Point is used for business purposes. The CCPA outlines several categories for which personal information may be used under business purposes, including: auditing, security, debugging/repair, certain short-term uses, performing services, internal research for technology development, as well as for quality and safety maintenance and verification. Clade Point uses the following categories of personal information for business purposes collected about consumers. The following have been disclosed under a business purpose within the last twelve (12) months:

Identifiers. A real name, postal address, email address, account information, online identifier, IP address, Social Security number, personal preferences and attributes via cookies, or other similar identifiers.
Information from third-party data providers. Including consumer credit information, when fulfilling information requests made by you when ordering credit-related products through the site.
Other information you provide to us. Other information we collect, such as the city of birth and mother’s maiden name, is used to verify your identity in the event you forget your login information required for our online products. This category also includes information you provide us through customer service correspondence and general feedback.

For information on how Clade Point uses your personal information, visit “HOW DO WE USE THE INFORMATION COLLECTED?” section in Clade Point’s Privacy Policy.

Right to Request and Right to Deletion

To exercise your rights under the CCPA, please submit a verifiable request to us by completing the Request Form, located here.

You may also contact us regarding your rights at privacy@cladepoint.com or by calling (855) 222-8888.

While you have the right to deletion, there are certain legal exceptions, including when the personal information is necessary to complete a transaction for which we collected it or to comply with a legal obligation. When submitting a request, please note that Clade Point may claim legal exemptions for certain requests pursuant to various CCPA exemptions.

Right to Non-Discrimination

Clade Point will not discriminate against you for exercising your rights under the CCPA. If you have exercised your rights under the CCPA, some services may not be available to you when directly related to the collection of your information, as permitted by the CCPA.

Business Line of Credit

December 28, 2022Resources0 comment

Small Business Line of Credit: How to Choose the Right Option

You may be thinking: “My business is profitable, we don’t need to borrow.” But many businesses with and without cash flow issues keep a line of credit handy for unexpected growth or expansion opportunities. A business credit line is a flexible, often low-cost way, to get short-term financing to cover working capital needs.

What is a Business Line of Credit?

A small business line of credit can help small business owners maintain consistent access to funds to smooth out the ebb and flow of changes in business expenses and revenues.

Rather than receiving a fixed amount of financing like you would with a loan, a line of credit gives you access to a certain amount of money, which you can borrow from, repay, and borrow from again.

How Does a Business Line of Credit Work?

A business line of credit is a flexible loan option for businesses. It may also be referred to as a revolving line of credit . You’re familiar with a line of credit if you use a credit card. It allows you to access funds from your credit line, pay back some or all of it, and access it again. With a line of credit, the business owner decides when, if, and how they will use that borrowed capital.

Interest is typically only charged for the amount of the credit line that is accessed, and interest rates may be fixed or variable. Variable interest rates typically change when interest rates in the economy change. Some lenders charge a draw fee every time you access the credit line.

In addition, there may be an origination fee, annual fee and/or a monthly maintenance fee if you don’t use your line of credit. For any line of credit you consider, you need to carefully read the terms offered to make sure you understand any fees that may be charged.

There will be a specified repayment period, but payments will vary depending on the amount borrowed. With some lines of credit (especially those from traditional banks), there may be a draw period during which you can access funds and make interest-only payments. After that, the business owner may enter a repayment period during which the outstanding balance must be repaid over a specific period of time.

Online lenders, on the other hand, often typically offer short-term lines of credit that fully amortize (or must be paid back) over a shorter time period, often 6-24 months.

Pros and Cons of Business Line of Credit

A line of credit can give you access to capital when you need it, but there are drawbacks to consider as well.

Pros

If you have the opportunity to, for example, expand your business, a line of credit affords you the opportunity to take advantage of it. Likewise, you can get the working capital you need to pay the bills during a slow period.

For many businesses, their financing needs aren’t adequately met with a large lump sum. Let’s say you’re renovating your commercial space. You might need $50,000 now, $7,000 in six months, and another $12,000 next year. A line of credit lets you get the cash you need when you need it rather than paying interest on money you won’t need for a while.

Cons

Just like with any financing, you’ll have to pay it back. If you don’t budget in that monthly payment, you may struggle to pay it, which puts you at risk of defaulting on the loan. If you made a personal guarantee, you’ll also risk your personal assets being seized if you can’t pay the loan.

Depending on what type of financing you qualify for, you may end up paying higher interest rates. If you run a startup that hasn’t been in business for two years or doesn’t have a strong credit profile, you may not qualify for the best terms.

Benefits of a Business Line of Credit

Here are a few examples of scenarios where your business may benefit from a business line of credit:

Your business has seasonal fluctuations—perhaps your sales take a dip in the summer or winter, for example. A line of credit will help during periods of low sales.
Your clients take weeks (or longer) to pay you for products or services you provide. You might need a line of credit to cover business expenses while you wait to get paid.
You land a new client and need extra capital to cover the cost of labor and/or supplies. A line of credit can cover expenses during production.
You have the opportunity to purchase equipment or inventory at a reduced cost. You can cover the bill with your line of credit while you wait for cash flow to catch up.

Depending on the type of loan or line of credit, your creditworthiness may be a major factor in determining eligibility. The higher your credit score, the better the terms you’ll get.

If you’re concerned you won’t get credit approval, look for loans that consider your annual revenues more than credit.

How to Get a Business Line of Credit

You can apply for a line of credit through a bank or credit union, an online lender, a business loan broker, or through an online marketplace where you’ll be able to shop among various lenders. Lenders will most likely evaluate:

Time in business: 2 years or more is ideal but some are more flexible.
Personal credit scores and/or business credit scores: Lender qualifications vary but many require personal credit scores of 600-650, and banks often want even higher scores.
Revenues: These will be verified via bank statements, financial statements, and/or tax returns.

If you do not have a business bank account, you will find it more difficult to qualify. In addition, some lenders will not lend to sole proprietors, so incorporating your business as an LLC, S Corp, or C Corp can be helpful.

When a Business Line of Credit is a Good Idea

Similar to most business financing options, the best time to get a line of credit for your business is when your business has healthy revenue and cash flow, rather than when your business is in a cash flow crunch. You’re more likely to qualify for the best terms when your business is in good financial shape and has no cash flow problems.

Remember: you’re only charged interest on the amount you borrow. If you secure a line of credit now you’re not obliged to use it, but it will be there when your business needs some extra capital.

Pro tip: While a business line of credit can be useful to most business owners, if you are looking for a lump sum of money to fund a one-time project or a long-term project, a small business loan (particularly a term loan) might be a better fit for you than a business line of credit.

Best Business Lines of Credit

You have a wealth of options available to you when it comes to a line of credit. Here are some we recommend.

Fundbox

Fundbox is a popular online lender. Your business must be based in the US and should have been in business for at least 6 months with annual revenues of at least $100,000, a personal FICO score of 600+, and a business checking account. If you qualify, you’ll make weekly payments for 12 or 24 weeks. Interest rates vary.

Get An Employer Identification Number

December 28, 2022Resources0 comment

How to Apply for an Employer Identification Number (EIN) for Free

If you’re a small business owner, or are otherwise self-employed, chances are you’ve heard of an EIN or Employer Identification Number. You may not be clear, however, on exactly what an EIN is, whether you need one, or how to go about getting a free EIN if you do.

There are four ways to apply for an Employer Identification Number (EIN) for free:

Complete the online application for an EIN, or
Fill out form SS-4 and mail it to the IRS,
Fill out form SS-4 and fax it to the IRS,
Call the IRS to request an EIN (international applicants)

An Employer Identification Number (EIN) is a nine-digit number used by the Internal Revenue Service (IRS) to identify a business. You may also hear it referred to as a Federal Employer Identification Number (FEIN) or Federal Tax ID number. Think of it as the equivalent of a Social Security number for your business. The IRS requires certain businesses to get an use an EIN for tax purposes.

When does the IRS require an EIN?

The IRS offers a simple checklist you can use to determine whether your business needs an EIN. If you answer “yes” to any of the following questions, you need to apply for an EIN.

Do you have employees?
Do you operate your business as a corporation or a partnership? (Note that an LLC may or may not fall under this category. See below.)
Do you withhold taxes on income, other than wages, paid to a non-resident alien?
Do you have a Keogh plan?

You must also get an EIN if you are involved in any of the following types of organizations:

Trusts, except certain grantor-owned revocable trusts, IRAs, Exempt Organization Business Income Tax Returns
Estates
Real estate mortgage investment conduits
Non-profit organizations
Farmers’ cooperatives
Plan administrators

Keep in mind that even if the IRS doesn’t require your business to get one, there may be times you need an EIN; for example to open a business bank account or to apply for a small business loan.

Do I need an EIN if I’m self-employed?

Maybe. The IRS considers you self-employed if you operate a business or trade as a sole proprietor or an independent contractor, if you are a member of a partnership that carries on a trade or business or if you are otherwise in business for yourself. (And yes, that can include “side hustles” or “gig work,” even if it’s part-time income.)

If you are self-employed, ask yourself the questions listed above and if you answer “yes” to any of them, you need an EIN.

Do I need an EIN for an LLC?

You may or may not need to get an EIN if your business structure is a Limited Liability Company (LLC). If you answered yes to the questions listed previously, then you will need an EIN. In addition, the IRS provides guidance on whether LLCs need an EIN. It includes the following:

“A single-member LLC that is a disregarded entity that does not have employees and does not have an excise tax liability does not need an EIN. It should use the name and Taxpayer Identification Number of the single member owner for federal tax purposes. However, if a single-member LLC, whose taxable income and loss will be reported by the single member owner needs an EIN to open a bank account, or if state tax law requires the single-member LLC to have a federal EIN, the LLC can apply for and obtain an EIN.”Source: Internal Revenue Service

Does my business need an EIN?

If you have reviewed IRS guidelines for when you need an EIN and are still unsure, it’s wise to talk with an accounting professional to determine what is required of your business.

In addition to IRS requirements, you may find your business needs an EIN to get a business bank account, to apply for financing, or to apply for a business license.

Does it cost money to get an EIN?

The good news is you can apply for an EIN for free. If you use a law firm or other professional service to incorporate your business, they may take care of this task for you and may or may not charge for that service. Just keep in mind that you applying for an EIN is a simple process for most business owners, and you can do it for free on the IRS website.

How do you apply for an EIN?

The Internal Revenue Service (IRS) requires a completed Form SS-4 to receive an EIN.

As mentioned earlier, there are four ways to get an EIN for free:

1. Complete the online application for an EIN. You can complete the application online on the IRS website at IRS.gov. If you are successful, you will get your EIN immediately. The online system will guide you through the required questions step-by-step but there are a few caveats you should understand before you start.

You must complete the online application in one session; you won’t be able to save it and return later. In addition the online session will expire after 15 minutes of inactivity, and you’ll have to start over, so plan for some uninterrupted time to complete this task. And even though it is an online application, you must complete it during the hours of 7 a.m. to 10 p.m. Eastern Standard Time, Monday to Friday.

It’s a good idea to review form SS-4 before you start the online application so you can gather the information you need to complete the online application.

ImportantIf you are assigned an EIN online, make sure you save the notice verifying that your business has been assigned an EIN and keep it in a safe place.

2. Fill out form SS-4 and mail it to the IRS. If your principal business, office or agency, or legal residence in the case of an individual, is located in one of the 50 states or the District of Columbia, mail it to Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999. If you have no legal residence, principal place of business, or principal office or agency in any state, mail the completed form to Internal Revenue Service Attn: EIN International Operation Cincinnati, OH 45999. The official processing timeframe for an EIN application received by mail is four weeks, though it may take longer.

3. Fill out form SS-4 and fax it to the IRS at (855) 641-6935 if your business (or residence if you are a sole proprietor) is located in one of the 50 states or the District of Columbia. If you have no legal residence, principal place of business, or principal office or agency in any state, fax the completed form to (855) 215-1627 (within the U.S.) or (304) 707-9471 (outside the U.S.). If approved and you provide a fax number for a response, you should receive your EIN by fax within four business days.

4. Call the IRS to request an EIN (international applicants only) at +1-267-941-1099. Note that it is not a toll-free number so international phone charges may apply, and you must call between 6 a.m. to 11 p.m. (Eastern Time), Monday through Friday. Also note the person making the call must be authorized to receive the EIN and answer questions concerning the application.

Who is the responsible party on the EIN application?

Each application must designate a “responsible party” who must be an individual, not a business entity. The responsible party is the person who ultimately owns or controls the entity or who exercises ultimate effective control over the entity. And importantly, all EIN applications (mail, fax, electronic) must disclose the name and Taxpayer Identification Number (SSN, TIN, ITIN, or EIN) of the true principal officer, general partner, grantor, owner or trustor. Find more details about responsible parties here.

Note that if the responsible party has requested an EIN online previously, they won’t be able to use that method to request one again and will have to file another way.

Who qualifies for an EIN?

Anyone whose business is located in the United States or a U.S. territory and has an existing valid taxpayer ID, such as a Social Security number, Individual Taxpayer Identification Number or previous EIN, can apply for a new EIN. While new businesses often apply for EINs, it’s also possible that an established business will need to get one if, for example, it hires its first employee.

How long does it take to get an Employer Identification Number?

Filling out the paperwork for your EIN can take 10 minutes or less, if you are prepared. How long it takes to get the number back, however, will depend on how you submit your information. If you submit the information online, you can get your number back immediately. Filling out the SS-4 and mailing it in can take at least 4-5 weeks.

Depending on the needs of your business, it could be in your best interest to file online. This could eliminate the wait between filing and submitting a loan application or anything else for which you need your EIN.

Will my EIN ever change?

There are times when a business may need to apply for a new EIN. Generally, though, a business name change is not one of them.

Sole proprietorships

The IRS will require you to obtain a new EIN if you:

Are subject to a bankruptcy proceeding.
Incorporate.
Take in partners and operate as a partnership.
Purchase or inherit an existing business that you operate as a sole proprietorship.

It will not require you to obtain a new EIN if you:

Change the name of your business.
Change your location and/or add other locations.
Operate multiple businesses.

Corporations

The IRS will require your corporation to obtain a new EIN if:

A corporation receives a new charter from the secretary of state.
You are a subsidiary of a corporation using the parent’s EIN or you become a subsidiary of a corporation.
You change to a partnership or a sole proprietorship.
A new corporation is created after a statutory merger.

The IRS will not require your corporation to obtain a new EIN if any of the following statements are true.

You are a division of a corporation.
The surviving corporation uses the existing EIN after a corporate merger.
A corporation declares bankruptcy.
The corporate name or location changes.
A corporation chooses to be taxed as an S corporation.
Reorganization of a corporation changes only the identity or place.
Conversion at the state level with business structure remaining unchanged.

LLCs

Your LLC will be required to obtain a new EIN if:

A new LLC with more than one owner (Multi-member LLC) is formed under state law.
A new LLC with one owner (Single Member LLC) is formed under state law and chooses to be taxed as a corporation or an S corporation.
A new LLC with one owner (Single Member LLC) is formed under state law, and has an employment or excise tax filing requirement.

Your LLC will not be required to obtain a new EIN if:

The LLC name or location changes.
You report income tax as a branch or division of a corporation or other entity, and the LLC has no employees or excise tax liability.
An existing partnership converts to an LLC classified as a partnership.
An LLC that already has an EIN chooses to be taxed as a corporation or as an S corporation.
A new LLC with one owner (single member LLC) is formed under state law, does not choose to be taxed as a corporation or S corporation, and has no employees or excise tax liability.

NOTE: You may request an EIN for banking or state tax purposes, but an EIN is not required for federal tax purposes.

For full details on when you need (or don’t need) a new EIN, visit IRS.gov.

How Do I Find My Employer Identification Number?

If you’ve already received your EIN and have misplaced it, there are a number of ways to retrieve it.

Look back at your records to see if you have the printed notice from the IRS. If you applied by mail or fax, you will have received the mailed or faxed notice, but if you applied online you will have to rely on the copy you saved online.
Call the IRS Business & Specialty Tax Line at 800-829-4933.
Contact your bank if you opened a bank account under the business name. Banks are required to obtain your EIN before opening the account, so they likely have it on hand.
Review prior tax returns where you used your EIN.

What do I do with my EIN?

Regardless of which application method you use to apply, if you are successful, you’ll receive a Form SS-4 Notice verifying that your business has been assigned an EIN. Be sure to hang onto that notice so you can use it to verify your EIN whenever necessary.

It may be requested when you apply for a variety of business services, including a business license or fictitious name (“doing business as”), or financial products such as business credit cards, small business loans or business bank accounts.

Just as you would never want to use the wrong Social Security number when applying for personal loans, you never want to use the wrong EIN when applying for business loans.

Your EIN may or may not appear on your business credit reports. Each business credit reporting agency assigns a unique number for your business credit file in its system, and for that reason, your EIN is not the main identifier for your business credit reports.

Related: What is a DUNS Number?

Finally, business identity theft is a serious problem. If you believe someone is using your business name or EIN to file tax returns or tax forms, make sure you contact the IRS immediately to file a business identity theft case.