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- 4 -- Scugog Citizen -- Tuesday, January 30, 1996 TAX THES & WVESTMENT ADVICE: Hope Beyond The Bank by: Betty Penny In my last column I addressed the new attitude I've heard so much about. Yes, the banks are open for small and home-based busi- nesses more than .ever before. This isn't to say, however, these institutions are now into taking risks. It simply means that there is a new set of rules and using them has made the playing field a little more even for those looking for seed or expansion capital However, the chance that Will your business be affected by the fiscal year-end change? Find out about the income tax cohsequences from H&R Block. We can help» you. Because it's your money. #iR BLOCK 174 PERRY ST., 985-9803 TS WCOUE TAX SPECALATS PORT PERRY PENNY & Assoc. ACCOUNTING SERVICES Corpus Accounting Belty Penny. Principal Accountant Patrick Fortune, Assoc. Accountant 180 MARY ST, PORT PERRY ONTARIO L9L1C4 Phone (905) 985-0712 Toll Free 1-800-699-6190 Fax (905) 985-9461 © Management Consulting © Part-time Controlenhip ® Personal & Corporate Taxes @ Temporary. Bookkeepan + © New Business Setups ® Mobie Service ® Competitive Rates DIERVINER BROKER : @&N CANADA LIFE -- R.R.S.P's - Funds or GICs Mortgage Insurance Pensions ® R.R.LEs @ Group Benefit Plans LONG TERM | CARE Bob Rankine 432- 1 153 172 KING ST. E., STE. 304, OSHAWA you will be turned down for that crucial loan still exists, even if you play by the rules. But hope springs eternal. Creative alterna- tives that were, at one time, prevalent beyond Canada's borders, have found their way into our business community. Others have been here all along. Business literature is ripe with ideas about alternative financing. Here is a samp- ling. : : Ever hear of asset-based lenders? Unlike the banks and trust companies there lenders are specialized and geared to meet the needs of borrowers in a specific field So knowledgeable are they about their market, asset- based lenders will advance bofrowers a purchase price for, say, equipment, under a lease using the source of that purchase as collateral For'entrepreneur's of all stripes, the Federal Busi- ness Development Bank (commonly known as the FBDB) aims please and build small and medium- sized businesses. This Crown corporation is known as a complimentary lender. The name may sound imposing to the at-home entrepreneur, but look again: the FBDH mayshe willing to take a look at you. According to their literature they provide "term loans, 'guarantees, venture loans and: venture capital to commercially viable, small and medium-sized enter- prises unable to obtain - adequate financing from conventional sources on reasonable terms and conditions." Assessments here are made based on the applicant's management capability and future repay- ment capacity. If you don't yet feel that you have that expertise, FBDB does offer Van Camp & Keller CHARTERED ACCOUNTANTS Income Tax Planning & Return Preparation Personal Tax Returns Electronically Filed Preparation of Government Returns (T4's, 5's) Financial, Estate and Retirement Planning m INDIVIDUALS WM CORPORATIONS W SMALL BUSINESSES BW FARMS 204 Casimir Street, Port Perry Telephone (905) 985-9725 Toll Free 1-800-215-3852 management services such as specialized training, counselling and mentoring. The FBDB will even help you to develop long-term strategic plans or to prepare a financing proposal. If you know several other business owners who are in a similar situation, perhaps a business credit group is possible. Agencies such as Calmeadow Metrofund claim to use such groups to replace collateral For example, an individual chooscs histher group members on the merit of their business acumen. Each group member will receive from the fund an initial loan 00. When each loan 1s rogaid then the group may access additional sums of credit by $1,000. instal- ments to a, maximum of $5,000 All new loans are subject to approval by the members of the group. The terms are flexible and Calmeadgw charges market rates of interest. In yet another approach, a service known as "invoice discounting" will turn all those outstanding receiv- ables into cash. A new source of capital, The Interface Group Ltd., claims to issue cash based on the purchase of an invoice when it is produced, as the gods are shipped, If you still aren't com- fortable borrowing from any source, consider an arrange- ment that will leave your available capital free for inventory. Leasing options for equipment are possible and wise when you consider the cost and frequency of upgrades. Companies such as Granada are offering more "than just televisions these days: fax machines, com- puters and even the desk you sit at can be 'borrowed' rather than purchased outright Perhaps a little of every financing option is in order. Remember, variety is more than just the spice of life. It is also sound advice when investing and choosing deposit options, and can also work when borrowing. (This article has been submitted compliments of Betly Penny & Associates ) TAX TIPS Those of you who operdte ypur own business and have a year end other than Dec 31st will find new rules in place this year. Any new businesses started in 1995 or later will not allow to defer their income tax payable by choosing a non calender year end For those established busi- nesses with a non calender year end; Revenue Canada require the income made in the remainder of the year to be taken into account when completing your tax return They have, however allowed the income from the addi- tional months (from your 1995 fiscal year end to Dec 30) to be fazed in over a 10 year period. There are two methods in which this can be accom- plished and it would depend + on the projected growth of the business as to which of these methods would be of most advantage. To make the right choice howev er, it would be advisable to complete the financial statement for the 'stub' period. Onge the choice is made, it can only be changed in future years if the 'alternate method' was used and the taxpayer wishes to change to the 'ordinary' method, they can not change from 'ordinary' to 'alternate'. If the fiscal year end is changed for income tax purposes, this also means that the GST year end will change of the tax payer is a GST registrant. In an effort to ease 'the anticipated volume and: confusion due to this change, Revenue Canada is extending the filing deadline for taxpayers with business income from April 30 to June 15 before imposing late filing penalties, how- ever interest charges will still be calculafed on any tax owing from April 30th. (This article was submitted by H&R Block, Port Perry.) V Making RSPs Work sby: Bob Rankine Do you work for your RSP, or does it work for you? Before you answer, con- sider the last time you reviewed the terms and maturity dates of yout various RSP contributions Are you happy with their rates of return? In other words, are you maximizing income earning potential Many peoplegsimply line up to make an RSP contribution before the annual deadline without considering its earning power. Aside from the tax savings and the ongoing savings and the ongoing tax- . deferred growth, there are a number of other benefits that investors can take advantage of to ensure they are getting the most from their RSPs. Before contributing to'an RSO, consider how you' can maximize the benefits of the tax-sheltered savings: Contribute the maximum allowable amount; contri- bute early, monthly if possible; review your plans regularly; if considering mutual funds, demand guarantees, consider the benefits of a spousal RSP (You can actually. pay off your mortgage faster if you use this properly); talk to someone who makes house calls. Speak to a professional financial advisor about maximizing your RSP assets. His knowledge and expertise will make a difference on your investment returns. For more information about RSPs, either GICs or Funds, contact Bob Rankine, Canada Life Sales Assgciate at (905) 432-1153. ® Personalized Programs ® Daily Aerobic Classes Reebok Step Classes A ® 'NEW' Slide Aerobic Classes ® Aquatic Classes ® Weight Room © Complete Gym @® Stairmaster © Life Steps ® Treadmills © Life Rowers @ Swimming Pool * @ Whirlpool @® Sauna 3 ©® Life Cycles @® Child Care ® Tanning Beds TAKE TIME FOR YCUR HEALTH. EXERCISE at THE CLUB! S57 SIMCOE ST. S. OSHAWA 434-2582