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Three Smart Ways to Use Your Home’s Equity

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Your home’s equity can be a powerful tool. Here are some ways to leverage it.

While home prices are high, you may have more equity in your home than you think. And using the equity in your home can be a powerful financial tool if used correctly. Let’s look at two common ways to tap into the equity in your home:

  • Home Equity Line of Credit (HELOC). With this type of loan, you borrow against the available equity in your home, using your house as collateral for a line of credit. As you repay your outstanding balance, the amount of available credit is replenished (much like a credit card). Use the funds as you need them and only pay interest on the portion of the credit line you use. There are typically no closing costs and a quicker approval process when you open a HELOC.
  • Cash-Out Refinance. You can refinance your mortgage for a higher amount (based on your home’s equity) and take out the difference in cash. Even though you don’t necessarily take on an additional loan with a cash-out refinance, you’ll still increase your overall debt load (with your home as collateral) and pay closing costs. It may make sense for you, though, if you have a better credit score than when you originally got your mortgage because you’ll likely get better terms on your new loan.

Smart Ways to Use Your Equity

In both instances mentioned above, you can use the equity in your home to finance other expenses. Here are some ways to put your equity to good use:

  • Make home improvements. Just be sure any improvement you make using the equity in your home adds value to it. Common examples include remodeling your kitchen, installing solar panels, adding energy-efficient windows, or upgrading the exterior siding on your home. And when you make home improvements, choose the options that are best suited for your home — you wouldn’t put a $50,000 gourmet kitchen in a $200,000 home (especially if you plan to sell your home at some point in the future).
  • Invest in a business or property. If you plan to start your own business, or you’d like to invest in a property or other business venture, using your home’s equity may be an excellent way to do so. Use care in how much you invest because of the risk involved — your home is the collateral. Typically, you should invest no more than 80% of your home value for this purpose.
  • Cover emergency expenses. Life can be challenging. But using your equity, you can access an “emergency fund” available for any costly or unexpected situation, such as more substantial medical expenses or major car repairs.

It’s essential to look at your home’s equity as a way to invest in your future — not as a petty cash fund for things you want now (but really can’t afford). Typically, if you use a HELOC or cash-out refinance loan, you’ll get a lower rate than using other loans because you’re putting your home up as collateral. And because your home is the collateral for the loan, it may be at risk should something go wrong with your loan. But when you use your home’s equity in a way that gives you a positive return for your future, you’ll maximize your investment and potentially save money as well.

Want to learn more? Give us a call at 877.759.7939.

*Consult your tax advisor.

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Blog Investment Insights Investment Services Personal Saving & Budgeting

Seven Smart Ways to Use Your Tax Refund

 

You’ve just received your tax refund, and you’re not quite sure how to put it to use. Resist the urge to splurge and consider investing your money into something that can help you in the long run.

 

Here are seven smart ways to make your tax refund work for you:

 

  1. Pay off existing debt. If you have a credit card or other unsecured debt, use your tax refund to pay it off — or at least pay it down as much as you can. Doing so will help you get into a better financial position in the long run.

 

  1. Create an emergency savings fund. You may want to deposit your tax refund into an emergency savings account. Ideally, you should keep enough money in this account to cover three to six months of expenses. But even if that’s not possible, deposit what you can — even if only a portion of your tax refund. You’ll be glad you did when you receive an unexpected medical bill or your car breaks down.

 

  1. Invest in your retirement. As a small business owner, you probably don’t have an employer-sponsored retirement plan. Use your tax refund to open an IRA (LINK TO: https://www.pinnaclebank.com/personal-banking/retirement/) or some other type of retirement account. The more money you can put into your retirement now, the more income you’ll have to live comfortably during retirement.

 

  1. Make business improvements. There are many ways you can help your business grow, but most times, you’re running on a reasonably tight budget. You may be able to use some or all of your tax refund to invest in equipment upgrades, technology, or other business needs.

 

  1. Donate to a good cause. When you receive your tax refund, consider donating to a charity or other local cause that interests you. Be sure you save your receipts so you can use them for your taxes next year.

 

  1. Invest in your personal development. There are probably many different things you’d like to learn or do, but you haven’t had the money to do so. Using your tax refund, you may want to learn a skill relevant to your job or invest in your personal wellness (such as a yoga class, gym membership, or personal trainer). The investment you make today will pay off in ways you may not have imagined.

 

  1. Save for a much-needed vacation. Everyone needs a break now and then, so why not use your tax refund to help finance a much-needed vacation for you and your family? Instead of putting your vacation on a credit card or personal loan, use your tax refund to help fund it. Maybe you’d like to take your family to an amusement park, or you’re ready to sit on the beach for a week in Hawaii or the Bahamas. Consider opening a savings account designated specifically for your vacation (LINK TO: https://www.pinnaclebank.com/personal-banking/savings-cds-and-money-market/) and add to it at your leisure until you leave on your trip.

 

While you may be tempted to splurge on a few new outfits or buy the latest Xbox for your kids, making smart investment choices with your tax refund will ultimately set you up for a brighter financial future. Whatever you choose to do with your tax refund is up to you. If you’d like to discuss your options with a professional, feel free to stop by one of our branches or give us a call at (770) 451-6765.

 

*Consult your tax advisor.

 

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Blog Business Cash Management Managing Your Business

Keep Your Business and Personal Finances Separate

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You probably spend a lot of your day dealing with the operation of your business — buying supplies, paying employees, and more. Just be sure that whatever you do, you keep your business and personal finances separate.

Here’s why:

Unless you’re a sole proprietor, you must file a separate tax return for your business. When you keep your expenses separate, it makes this process much easier and more manageable. Plus, if you use a business account to conduct business with your customers, you’ll reflect more credibility and professionalism (think about your own experiences).

How to keep your business and personal finances separate

You may be thinking that keeping your finances separate is simple to do, but sometimes the line gets a little blurry. Check out these seven tips:

  1. Open a business checking account. Once you have your EIN, you can then open a business checking account. At Pinnacle Bank, you’ll find we offer free business checking, (LINK TO: https://www.pinnaclebank.com/business-banking/checking/) which is a huge benefit to your business. Do your homework and find the right account for your company’s needs. Keep your business checking information in a separate location than your personal information so you won’t accidentally intermix the two.
  1. Use a business credit card. You should establish credit for your business as soon as possible — and the easiest way to do so is to open a business credit card. (LINK TO: https://app.thecardservicescenter.com/SelectionBusiness/index/7990). Not only can you use this card to pay for much-needed supplies or develop your inventory, you’ll also improve your company’s borrowing power. Most importantly, though, it’s another way to keep your business and personal credit transactions separate.
  1. Pay yourself a reasonable salary each month. Work with your CPA to determine what’s best for your circumstances. You should try to avoid transferring funds from your business account to pay for personal expenses as much as possible.
  1. Track your expenses. It’s important to know where your business stands at any given time. Most companies use financial software to help track expenses, such as Quick Books, Quicken, and others. Using expense tracking software, you can also generate the reporting you regularly need to manage your business. Additionally, it’s easier to ensure that your business and personal expenses are separate. And, if you have to use your personal accounts to pay for business expenses, you can make immediate adjustments when necessary.
  1. File your taxes with a professional. Not only will this ensure that your business’ financial records are error free, but you can feel confident that all your tax deductions have been applied. While it may be more expensive for your CPA to file than doing so on your own, the cost is well worth your peace of mind (and time). If you don’t have a CPA, ask trusted colleagues, friends, or family members for a recommendation.

By following these tips, you’ll be on your way to keeping your business and personal finances separate. To learn other best practices to follow, talk to your CPA.

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Blog Business Fraud & Security

Protect Your Business from Cybersecurity Threats

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Just because you own a small business doesn’t mean you’re immune to a cyberattack. No matter the size of your company, if you conduct any business online, you’re at risk of an attack. However, there are many things you can do to protect your business and customer data.

  1. Train employees on security practices and policies. Your employees should know and understand your company’s Internet use guidelines, penalties for violating company cybersecurity policies, and how to handle and protect customer information and other vital data.
  1. Keep your computers clean. Install the latest security software, web browser, and operating system on all your company computers and laptops. Also, make sure you set a time to scan for anti-virus and anti-malware software regularly.
  1. Provide firewall security for your Internet connection. A firewall keeps your network protected from outside intrusions. It’s essential to keep it updated and enabled at all times. If employees work from home, make sure they have a firewall protecting their home system(s) as well.
  1. Secure your Wi-Fi network. If you offer Wi-Fi at your workplace, make sure it’s secure, encrypted, and hidden from outside intruders. Ask your technology expert to help you find ways to keep your Wi-Fi network hidden and protect access to your router as well.
  1. Create back-up copies of all essential data. Regularly back up all critical data on your computers, including documents, electronic spreadsheets, databases, financial files, human resource files, and other account information. It’s best to back up data automatically at least weekly and store copies offsite or in the cloud (protected by a password).
  1. Manage the security of mobile devices. If you use mobile devices to hold or manage confidential information, it’s critical you require users to password-protect their devices, encrypt their data, and install any security app to prevent criminals from stealing data. Additionally, make sure your employees understand how to report a lost or stolen mobile device.
  1. Limit physical access to your computers. Create a user account for each employee and be sure all computers and laptops lock automatically when unattended. Require employees to use strong passwords to access computers and to change them often — experts recommend changing your passwords at least every three months (at a minimum). Additionally, only allow administrative access to key personnel.

While this is not a complete list, it’s a great way to start protecting your business. And your diligence in protecting your business and customer data today will help you limit your chances of a cybersecurity attack in the future.

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Blog Investment Insights Investment Services

Five Strategies to Successfully Manage Your Cash Flow

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Maintaining positive cash flow is critical to the long-term success of your business. You need cash to pay rent and salaries, buy supplies, purchase new office equipment or invest in new technology for your company. When you manage your cash flow effectively, you can then position your company to take advantage of opportunities when they arise and experience continuous and sustained growth. Consider these five strategies to help manage your cash flow more effectively:

  1. Stay on top of accounts receivable Your goal should be to collect payment from your customers as soon as possible. If you invoice customers, it’s best to state “payment due upon receipt” and consider offering a discount for paying on time (or early). And make it easy for your customers to pay you. Take advantage of automatic payment options, such as ACH and other payment services. Send reminders as needed with a link to easily make any outstanding payments.
  2. Be strategic with accounts payable. As you know, it’s imperative to pay your bills on time, so you avoid any issues or late fees. But you don’t have to pay your bills early – unless there’s a discount given to do so. Map out your recurring bills, so you know what you need to bring in each month to break even (or even save some money).
  3. Gather a healthy cash reserve. It’s essential to have cash available to pay for unexpected expenses that may arise. And, if you have a seasonal business, this becomes especially important to help pay for regular business expenses when not in season. Most financial experts recommend that business owners save approximately three to six months of savings to cover their costs. Start small and increase your contributions to a savings account regularly.
  4. Find ways to maintain an influx of cash. If you work with clients on a contract-basis, clarify all work required and the payment schedule from the beginning of the project. If anything falls outside of the original project scope, revise the contract and payment. Consider offering subscriptions for those who use your products and services regularly, or opt to get a monthly retainer fee for regular work completed. You may also choose to focus on boosting your sales – maybe sponsor a content, implement a referral program or provide a “limited-time-only” special.
  5. Control your debt. Too much debt will take away from your cash reserves needed for other purposes. When you do need to borrow money, pay attention to the terms and conditions of the credit offered. Work within your budget to ensure you’re only buying what’s needed when it’s needed. If you can’t afford it, don’t buy it.

The ultimate goal for your business should be to bring in more money than you spend. Positive cash flow gives you the ability to maximize opportunities that arise and build flexibility within your business, leading to a positive bottom line and a more lucrative future. To learn more about ways we can help your business in this area, stop by a branch near you!

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Blog

Five Ways to Protect Your Business from Mobile Payment Fraud

Most people expect their mobile devices to do everything they need – from watching television and ordering food to making purchases online or in person. If your business accepts mobile payments in your store or online through an app or website, there are ways to reduce your chance of becoming a victim of mobile payment fraud.

  1. Use secure a Wi-Fi network. One of the most effective ways to keep your data safe from intrusion is to use a secure Wi-Fi network. And, if you encrypt your network, any information taken will be useless. Talk to your computer expert (if it’s not you) to build a strong password for your router and a unique SSID name for your wireless network. Additionally, turn on the most recent and secure encryption within your router.
  2. Build-in biometric detection. Today’s devices come with many different biometric features (fingerprint scanning and voice or facial recognition) to confirm a person’s identity and deter fraudsters from using someone else’s phone to make purchases. Of course, not every customer uses the latest device. To protect any purchases made through your app, install biometric feature detection software to weed out fraudulent purchases.
  3. Verify your customer’s identity. Implement a two-factor authentication method for all mobile and online purchases to ensure your customers are who they say they are. This is where you send a verification code to the customer’s email address or phone number (via text or call) associated with the account. The customer must then use the code provided to complete the transaction.
  4. Require a CVV code. When your customers use a credit or debit card to make mobile transactions, require them to use the CVV (or three-digit) code on the back of the card. The use of the CVV code will reduce your chances of “card not present” fraud as the customer must have access to the physical card to complete the transaction.
  5. Use browser detection for online purchases. If your business accepts mobile payments for online shopping, using a browser detection protocol will prevent users from completing transactions through insecure browsers. You can then direct them to make purchases through your app or another approved, secure browser.

Don’t be afraid to offer mobile payments because of fraud – find ways to combat it. By implementing one or more of these tips, you’ll be on your way to protecting your business from mobile fraud and be able to offer customers an easy way to pay for your products and services.

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Blog Personal

Find Your Perfect Life-Work Balance

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As a business owner, finding the balance between your work life and personal life can be challenging. And if you work from home, you may find the line between work and home gets blurry way more often. Believe it or not, though, you can find a balance in your life, but it may take some work.

Define what your “balanced life” looks like. To find your perfect work-life balance, start by answering these questions: What must come first every day no matter what? What barriers may keep you from having balance? Do you have established work hours? What can you do regularly to keep focused on your goal of having balance? Once you’ve mapped out what your balanced life looks like, share your vision with those you live and work with so they can hold you accountable and keep you on track.

Learn to delegate. One of the most challenging things for a business owner to do is delegate – especially if you are the only employee. The fact is that many of your customers buy your products and services because of you. But, to find the balance you desire, it may be time to hire an employee or an independent contractor who is trustworthy, has a good work ethic and sees your business as you do. That way, you can delegate your work and feel confident it will get done when needed. Just know that things may not get done exactly as you would do it – you’ll have to learn to be okay with that.

Limit your distractions. When you’re at work, be engaged in your work. But, when you’re at home, be present there as well. Turn off your devices when you need to be more focused. If you have employees, let them know appropriate times to contact you when you’re not at work.

Plan each day. If you know what to anticipate throughout the day, you’ll lessen your stress, be able to schedule breaks and find time to do the things you need to do. Whether you create your plan first thing in the morning and the night before is up to you. There are many organizational tools to help you plan your daily tasks and keep you on schedule. Yes, there will be disruptions in your day; however, when you have a plan, you can adjust easier.

Take personal breaks. No one’s a superhero. We all need time away from work – whether you take 10 minutes outside for lunch or 30 minutes to exercise in the morning. Whatever the case may be, taking a break is vital to help you stay sharp and energized throughout the day.

Take care of yourself. Do you get enough sleep every night? Do you make time to exercise at least 3-4 times a week? Is your diet filled with fast food or healthier options? The better you take care of yourself, the more energy you’ll have at work and at home.

Use digital tools. Take advantage of the digital tools you can use to manage your business. As an example, use Pinnacle Bank’s mobile banking to conduct nearly every transaction you need, 24 hours a day, seven days a week. You can even make deposits quickly and easily using your computer with our merchant capture service. You should also use the digital tools available to manage your day-to-day operations, such as Quick Books or Quicken, among others. You’ll spend less time doing paperwork and more time focused on the things that matter most.

Choosing to live a balanced life can be tough, but with the right steps in place, you can do it. And as you begin to create more balance in your life, you’ll be happier and have more peace no matter what challenges come your way.

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Business Growth & Capital Managing Your Business

6 Ways to Keep Customers Coming Back – and Make a Profit

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There’s a common misconception that you need to acquire new customers if you want to make money. That’s not necessarily the case. While attracting new customers will help you grow, it’s not the only way to boost your profits. The fact of the matter is that focusing on customer retention – specifically your “best” customers – is an incredibly essential (and sometimes overlooked) business strategy. Take a look at a few cost-effective marketing strategies to improve customer retention in 2020:

  1. Start a blog – or develop the one you have.

A great way to increase your website traffic and generate new leads is to blog. Even if you’re not a writer, you can talk about what you do in your blog – something like “a day in the life” or discuss something new happening in your company or at your store. If you can release a new blog post at least weekly, you can give your customers a reason to check your website – and the more relevant the content is that you provide, the more of an expert you’ll become in their eyes.

  1. Send a survey and use the feedback.

Before you can focus on retention, it’s a good idea to understand why customers come to you and why they may leave. Are they happy with your price? Do they value your brand over the competition? It’s a fact that many customers care more about how you treat them than any product or service you offer. And, one of the best ways to show you care is to get their opinion – and then implement your findings. Maybe you’ll find something you need to fix or possibly capitalize on something you didn’t know was important to your customers.

  1. Start a customer loyalty program.

If you want to create loyal customers (and keep them coming back), find a way to get them to think about you first. What is it you want to accomplish? Maybe you give them discounts for shopping online or coming to your store. For example, if you own a local deli, you may give loyal customers a sandwich card (or use a simple mobile app), and after six visits, they get a free sandwich. You may even consider giving rewards to customers who purchase more from you in any given month – all rewards do not have to be equal.

  1. Communicate with your customers regularly.

Whether you communicate by email or phone, you should reach out to your most loyal customers regularly. Create a simple email to share the “latest” happenings at your company or an upcoming promotion. You may want to call a few of your best customers to invite them to a special event personally or share a promotion with them. Just don’t go overboard with your messages or this could backfire. Be smart with how many times you reach out and when. And, don’t just send promotional information – provide content that adds value to their lives or even link your email to your blog (double exposure!).

  1. Implement a customer referral program.

Who wouldn’t want a referral from one of your best customers, right? So, why not incent them for bringing friends or family members to your business. For example, let’s say you’re a travel agent, and you’re looking to expand your business. Why not give your “best customers” travel credits for a future trip with every referral they bring to your business. And you may even provide these referred individuals special pricing as a thank you.

  1. Provide outstanding customer service.

Be available to your customers. That means not only being physically available but going above and beyond to meet (or exceed) customer needs. Talk to your customers regularly. Learn about them and remember things of value to them. Answer emails within an hour – and if you can’t, send a response that you’ll answer at a specific time. Service must be a priority if you’re looking to drive loyalty and retention.

 

By prioritizing customer retention, you’ll be able to generate higher profits and even gain more customers in the long-run. As you plan for 2020, let this be the start of your focus for a new and better year.

 

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Blog Business Cash Management Managing Your Business

Merchant Capture – A Benefit You’ll Enjoy

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Your day is finally over, and you’re exhausted. But, you still need to make your deposit for the night. It’s 7 p.m. and you don’t want to drive to the nearest branch to make your deposit. This is where Merchant Capture comes into play – it’s like having a 24-hour teller right in your office.

Here’s how it works:

  1. Using a desktop check scanner, scan both sides of the checks in a single pass.
  2. Prepare your deposit – you’ll be able to view the scanned checks right on your computer. And to save you even more time, the dollar amounts for the checks will automatically be read and totaled.
  3. Electronically send your deposit to Pinnacle Bank through our secure Internet connection.
  4. Funds are deposited into your account. In fact, your funds may be available sooner than traditional deposits.

Now, you can make your business deposits anytime – and even consolidate your funds from your remote office locations. Plus, you control the entire process, reducing your risk of check fraud.

Ready to get started?

All you need is a PC with an open USB 2.0 port and a current version of Vista (32 bit or 64 bit), Windows 7 (32 bit or 64 bit), or Windows 8 and Internet Explorer® 9 or newer. Then, we’ll show you how to install your check scanner properly. After that, all you need is a secure Internet connection and your Pinnacle Bank account number.

Watch this video to learn more about Merchant Capture.

If you have questions, please visit our Help Center, or contact us for assistance.