You decided - Case Study Example

IRS s and accounting rules According to the International Accounting Standards (IAS) (IFRS Foundation, 2014), financial records and statements should reflect a true and fair value of the company’s audited financial statements and position; they must be complete and accurate. For an individual to qualify for a bank loan in the US one must satisfy the bank’s 3Cs, these are credibility, Collateral and Capacity. This means that one needs to prove at least a one and a half year positive cash flow: this will prove a realistic cash plan.

To qualify for a loan is not an easy task for entrepreneurs. Brandt (2002), suggests that banks may discriminate for nonprofit reasons, but this discrimination diminishes with a bank’s incentives and human capital. In order for the client to get her loan from the bank approved, she requires to know her limitations and credit score and prepare a checklist of the appropriate documentation. The bank will inform her of range of credit scores required for loan approval. Sue must also understand her preferences, the terms she can reasonably afford, check the loan packages and her goal for paying off the loan.

To start off the ordeal will require preparing a trial balance with the relevant available documents. She will also need the available bank statements for the current tax year and present this to the bank as evidence for eligibility of the loan. In essence to the International Revenue Service (IRS, n.d.), a $300,000 bank loan is equivalent to a 50% tax. Thus, Tax deferment will be in handy. The IRS issues penalties if there is any delay in the tax returns but to prevent this requires filling an extension and thus she will have extra time to finish up her personal tax returns.

In 2010, the IRS had announced the need to audit small businesses for credibility and the use of electronic files. This was mainly to enable them to be more proficient when examining records, and this are also a much faster method of resolving issues. In addition, reviewing the US accounting rules Generally Accepted Accounting Principles (GAAP), mainly to prepare the financial statements. Combining the efforts of IRS and GAAP will have a positive impact on the cost of doing business. To expand her business and increase chances of acquiring a loan, the SBA Guaranteed loans should not be left out.

These are government loans that are provided in the US and are available in many banks, in the US. These loans allow entrepreneurs to boost their chances of acquiring a loan and in the repayment of the loan. Some banks in the US also participate in SBLF (Small Business and Lending Fund) this involves partnerships with the small businesses and banks. This will in the long run benefit Sue in many ways as she has a mandate to improve her knowledge power on the current trends in the market and the need to get up to date information concerning various governmental and nongovernmental lobbies.

Thus sue needs to combine all efforts in a bid to acquire her loan to kick off and expand her business. ReferencesBrandt, L. (2002). Bank Discrimination In Transition Economies. Ideology,Information or Incentives?, 167-169.IFRS Foundation. (2014). About the IFRS Foundation and the IASB: Standards setting. Retrieved from IFRS Foundation: http://www.ifrs.org/The-organisation/Pages/IFRS-Foundation-and-the-IASB.aspxIRS. (n.d.). Credits and Deductions. Retrieved from Internal Revenue Services: http://www.irs.gov/Credits-&-Deductions