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Small Business

Business Loans for the Holiday Season

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Business Loans for Holiday Season
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Holiday shoppers and wintry weather could have a positive or negative effect on businesses, depending on the industry. Retailers, for example, could experience a rush of customer traffic during the holidays, while business could slow down for weather-affected companies, like oil well drillers who can’t work when the ground freezes.

Because the winter months can put a strain on small businesses of all kinds, it is a prime time of year to secure financing. Seasonal business loans could make it easier to keep up with the demands of the holiday season, or help you cover regular expenses if business slows down.

Before you find your business in a tight spot, keep reading to find out how you can obtain a seasonal business loan or other types of holiday financing.

Types of seasonal business loans

There are several kinds of business financing options that could be useful during the holidays, and these products could be available from traditional banks, online alternative business lenders or financing companies. Here are a few types of funding for which you could apply to meet your seasonal business needs.

Business line of credit

A business line of credit gives you access to a set amount of money that you could draw from as needed. You would only pay interest on what you actually borrow, and the full amount would become available again as soon as you repay your debt.

Lines of credit can be both secured and unsecured, depending on whether you provide business assets as collateral. A secured line of credit would require collateral, which means the lender could seize your assets if you don’t repay your debt. You could receive a lower interest rate and higher credit limit, though, because the collateral would reduce the risk for the lender. An unsecured line of credit wouldn’t require collateral, which would not reduce risk for the lender and could result in a higher interest rate and lower credit limit.

Best for: General business needs

A line of credit is a common seasonal financing option for business owners. Oftentimes, business owners need a quick infusion of capital during the holiday season that they’ll soon be able to pay back. A line of credit isn’t suited for long-term financing, so it would be a better option for business owners who expect to quickly generate capital during their busy season to repay debt.

“It all depends on the seasonal needs. There’s peaks and valleys and that’s where those lines of credit help them,” said Larry Rush, a mentor for SCORE, which partners with the U.S. Small Business Administration to provide free small business mentorship.

Our pick: Kabbage

Kabbage, an online business lender, offers lines of credit up to $250,000 and same-day approval. You could qualify in minutes and would have 6, 12 or 18 months to pay off each withdrawal from your credit line. Kabbage charges a monthly fee ranging from 1.5% to 10%, depending on your business performance. Each month, you’d owe an equal portion of your balance plus the fee.

To qualify, you need:

  • One year in business
  • $50,000 in annual revenue or $4,200 in monthly revenue

Accounts receivable financing

To bring in extra funding, businesses can turn their accounts receivable and unpaid invoices into cash. A business owner would work with a financing or factoring company to get an advance on unpaid invoices and accounts receivable, which would act as collateral. The financing company would buy a percentage of those unpaid accounts receivable in exchange for cash, then collect a fee once your customers make payments.

Factoring companies also provide merchant cash advances, a similar product. With a merchant cash advance, you would sell a portion of your receivables (typically credit card sales) in exchange for funding. The company would then take a fixed percentage of your sales until the debt is paid back.

Best for: Businesses with a high volume of credit card sales or invoices

Businesses that bring in significant income through invoices or credit card sales could benefit from this type of financing on a seasonal basis. Accounts receivable financing and merchant cash advances are typically expensive, but they would provide fast access to funding, according to Rush.

“It’s not something that’s widely used,” he said. “But many times, when the business is in a jam, I’ve seen companies with large receivables on a seasonal basis go to a factoring company to get cash.”

Our pick: BlueVine

BlueVine is an online lender that provides invoice factoring up to $5,000,000. BlueVine can advance up to 85% to 90% of your unpaid invoices. Weekly interest rates start at 0.25% for well-qualified borrowers, as of Oct 7, 2019. When customers pay invoices, you would receive the remaining amount minus BlueVine’s fee.

To be eligible, you must have:

Inventory financing

Inventory financing is designed for the purchase of goods and products, and it comes in various forms. A short-term business loan or business line of credit could be considered inventory financing if the inventory itself acts as collateral. Lenders may only finance a percentage of the cost of inventory — usually up to 80% — and the funding amount would be based on the value of the items.

A line of credit would allow you to borrow money to make purchases as needed, while a short-term loan would provide a sum of funding to purchase inventory in bulk. Short-term loans typically require daily or weekly repayment terms, and could come with higher interest rates than lines of credit. A line of credit would be best for ongoing seasonal or year-round needs, while a loan may be better for making a large one-time purchase.

Best for: Retailers or wholesalers with large amounts of inventory

Businesses with seasonal inventory needs could rely on short-term loans or lines of credit to stock up on products ahead of the holiday season. But be careful, Rush advised, not to purchase more inventory than you can sell during your busy season, especially near the end of the year. Carrying inventory into the new year could affect your annual business taxes.

“Make sure you blow out dead inventory whenever you can to properly budget your business,” Rush said.

Our pick: OnDeck

OnDeck, another online lender, offers inventory loans for small business owners. OnDeck’s short-term loans range from $5,000 to $500,000, and you could receive same-day funding if approved. Annual interest rates start at 9.99%. OnDeck also offers lines of credit between $6,000 and $100,000, with annual interest rates starting at 13.99%.

Eligible business owners must meet the following requirements:

  • One year in business
  • $100,000 in annual revenue
  • 600 personal credit score

When to apply for holiday financing

Business owners should secure seasonal financing before the holidays arrive — Rush even suggested as early as June, in some cases. But you could also apply for funding in the fall months to ensure you have money to spend ahead of the holidays.

You may want to consider the speed at which you could receive financing as well, he said. For instance, if you notice a certain item is selling quickly, you might need fast funding to buy additional inventory to avoid running out.

The lender and type of financing you choose would affect the time to funding. An online alternative business lender could provide lines of credit and short-term loans more quickly than a traditional bank. An online lender could also approve your application for financing in a few hours, rather than a few weeks.

Merchant cash advances from online lenders or financing companies are among the fastest financing options for business owners. Eligibility requirements are typically lenient, and the underwriting process to review applications is less involved than it would be for a standard business loan. However, fast time to funding comes at a cost — merchant cash advances are often expensive and risky because of the quick repayment schedule.

The application process for accounts receivable financing is also quick. A financing or factoring company would usually require you to fill out an online application, and you could receive an offer in a few days. However, again, you could face somewhat high fees.

Is seasonal financing right for your business?

The winter months could deter customers from some seasonal small businesses. Others may see a boost from holiday shoppers. If you know you’ll see a seasonal shift, effective budgeting throughout the year could help you get through the holidays without financing. But if you unexpectedly anticipate struggling to keep up with demand or paying bills despite a dip in customers, seasonal business loans could provide reprieve.

Depending on your business needs, you could secure a business line of credit, inventory financing or accounts receivable financing from a lender or financing company. A line of credit would let you access funds as you need money, while accounts receivable financing would allow you to leverage your unpaid invoice for funding. Inventory financing could provide a lump sum of capital to purchase products.

Be sure not to buy more inventory than you can sell before the end of the year, though. Otherwise, you could end up owing taxes on any unsold inventory that you carry into the new year.

Additionally, when applying for financing, take note of the expected time to funding. Be sure to give yourself plenty of time to secure the right financing for your business before the holiday season begins.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Melissa Wylie
Melissa Wylie |

Melissa Wylie is a writer at MagnifyMoney. You can email Melissa at [email protected]

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Small Business

Due Diligence Process: What Businesses Can Expect

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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Before selling a business, you’ll first need to go through the due diligence process. The amount of research required may seem onerous, but it’s designed to protect both the seller and buyer.

Potential buyers would request access to your business financials, contracts, inventory, equipment, intellectual property and outstanding legal matters, which you would need to provide within a reasonable amount of time. The business acquisition would be contingent on the buyer’s investigation.

Continue reading to learn how to prepare for the scrutiny and inspection of the business due diligence process.

Rodger and Ann Lenhardt, owners of Norm’s Farms in Hartsburg, Mo., sold a majority stake of their family-owned elderberry operation in 2017. The business sells a range of elderberry products made from berries grown on the farm, which has been in the Lenhardt family for decades. Selling a large portion of the family business to another company, Missouri-based Innovative Natural Solutions, was emotionally challenging, but it was a necessary step for growth.

“Norm’s Farm needed a big infusion of capital to scale up,” Ann Lenhardt said. “And these guys had the money.”

The due diligence portion of the sale process could be intimidating and overwhelming for first-timers, Rodger Lenhardt said. Typically, you’d need legal or financial guidance to gather the necessary documents and information for buyers to analyze.

“The buyer is going to want to dig into your underwear drawer,” he said. “If your house is a mess and your financials aren’t in order, you’re not going to get a buyer.”

What is due diligence?

The purpose of due diligence is to ensure all information exchanged between a buyer and a seller is accurate and fully disclosed, said Paren Knadjian, who heads the capital markets and mergers and acquisitions group at KROST. Through due diligence, a potential buyer would hire an attorney or business broker thoroughly investigate all aspects of your business.

“It’s essentially understanding how the company operates on a day to day basis,” said Knadjian, who is based in California.

Due diligence typically occurs after the buyer provides a letter of intent, a non-binding two- or three-page document outlining the terms of the transaction, including how much would be paid for the business. The letter of intent would state that the proposed terms of the deal would be subject to due diligence.

The complexity of both the deal and your business records would determine the length of the due diligence process, although the average time frame is 30 to 90 days, Knadjian said. After due diligence is complete the buyer would then draw up legal documents to finalize the sale.

Do sellers investigate buyers?

Sellers should do their own due diligence on the prospective buyer as well, Knadjian said. The process would be less formal, but it would provide insight into the company that’s buying your business.

The Lenhardts hired advisors to aid in researching the buyer of Norm’s Farms, Ann said. They wanted to make sure the business would thrive under new ownership.

“When you put your heart, blood and tears into a business, you’re attached to it,” she said. “That’s why due diligence on our partners was so important to us.”

Make sure you understand how the buyer plans to pay for your business, and whether they’ll be borrowing money to finance the purchase, Knadjian said. If you plan to stay involved with the business after the sale, either as a shareholder or an employee, you should understand how the debt from the sale would impact operations.

Due diligence preparation for small business owners

Before putting your house on the market, you would likely spruce up the property to make it more attractive to buyers, Knadjian said. Consider doing the same for your small business.

“Knowing what’s ahead of you in terms of due diligence and correcting any errors will speed up the due diligence and reduce the risk of something going wrong,” he said.

Expect a buyer to dissect several areas of your business during the due diligence process. You may be able to request that they sign a non-disclosure or non-compete agreement to protect sensitive information.

Next, we’ll discuss what you can expect to share with a potential buyer.

Legal documentation

A buyer would look into all current and future legal obligations, including outstanding judgments or tax liens, licensing, permits and zoning compliance. Contracts with suppliers and employees would also be up for review.

You may have to turn over any invoices from lawyers from recent years to show what issues had been addressed. If your business is a corporation, a buyer may also ask for shareholder or board meeting minutes to review past company decisions.

Financial statements

Financial information such as revenue, accounts receivable, tax returns, existing debt and stock ownership would be analyzed. Be prepared to submit documents such as:

  • Annual financial statements
  • Cash flow analysis
  • Cash restrictions
  • Expense reports, categorized as non-operational
  • Public filings, if applicable
  • Audited financial statements, including any disclosures or management letters suggesting recommendations

A buyer would check to make sure your business followed Generally Accepted Accounting Principles, or GAAP, when generating financial statements. Companies that adhere to GAAP standards have created their statements using the same set of accounting rules. Meeting GAAP standards would make it easier for a buyer to review your financials, avoiding a potential hitch in the due diligence process.

Business assets

A buyer may conduct an inspection of any fixed assets to determine their value. You’d need to share records of maintenance and replacements and whether any assets are no longer in use.

If any assets like equipment, vehicles or property are being leased, rented or loaned, that financial information would need to be included in the sale.

Operational information

A buyer would analyze the responsibilities of individual departments and how they contribute to overall operations.

Activities related to sales would be under a microscope. A buyer would look into how your business makes sales and how the sales department is organized. The productivity and skill level of the sales team may also be measured.

Your marketing activities would indicate how well you stack up against competing businesses. A buyer could perform a comparative analysis to examine marketing efforts such as:

  • Product packaging and quality
  • Advertising
  • Distribution
  • Pricing
  • Telemarketing
  • Internet marketing
  • Branding

A buyer may dive into your manufacturing practices as well to determine how your business builds or produces goods.

You can find a sample due diligence checklist here.

After due diligence: What to expect

After the buyer completes enough research to feel comfortable making an offer, they would then hire a legal firm to draft documents describing the terms of the acquisition. There may be several documents for you to sign, depending on the nature of the sale. Those could include:

  • Asset purchase agreement: An arrangement where the buyer purchases all business assets, including tangible property like real estate and intangible property such as patents and trademarks.
  • Stock purchase agreement: The buyer purchases the majority or more of a business’s stock and assumes existing debts and obligations.
  • Bill of sale: Document confirming the transfer of ownership on a specific date and at a specific place for a certain amount of money.
  • Employment agreement: Contracts detailing the treatment of employees after the sale, including the terms and obligations of continuing or terminating employment.

“Typically, after [due diligence], the legal documents are negotiated, finalized and signed,” Knadjian said. “When the money is transferred, that’s considered a close and the transaction is done.”

There could be back-and-forth negotiation before the final papers are signed, Ann Lenhardt of Norm’s Farms said. Financial details may be the last item to discuss, which was the case when selling Norm’s Farms, she said.

Business owners often believe the purpose of due diligence is to renegotiate the selling price, but that’s rarely the intent of buyers, who have already included price in the letter of intent, Knadjian said. However, information found during due diligence could affect how much the buyer is willing to pay for the business.

“If you’re well organized, there’s no need to be worried about that,” he said. “It’s considered bad practice to go into due diligence with the intent to change the terms of the deal as the buyer.”

What happens if the deal falls through?

After weeks or months of due diligence, there’s no guarantee a sale will occur. Although the majority of deals are successful, the due diligence process could end in a broken transaction, Knadjian said. A common reason is a lack of organization within the seller’s business.

“The cleaner the books, the better documentation they have, the much more likely that the transaction will go through,” he said.

A broken deal likely wouldn’t have any financial ramifications for either party, other than the loss of time and money spent on advisors and lawyers, Knadjian said. Buyers sometimes make a “good faith deposit” to show their intent to purchase the business, and the seller may not return that money if the sale falls through, he said.

A failed transaction wouldn’t impede your chances of selling the business in the future, unless the buyer found a problem within the operation. As long as you fix any issues uncovered during due diligence, you could attempt a sale again in the future, Knadjian said.

“Obviously, you will have to fix that problem before you go back on the market,” he said. “Otherwise, you’re just wasting your time.”

Don’t fear the due diligence process

It may seem daunting to present the inner workings of your company, including financial statements and legal documents, to a potential buyer, but it may be an unavoidable step when selling your business.

“Nobody’s willing to make an offer until the books are open,” Ann Lenhardt said.

Due diligence typically begins after a potential buyer outlines terms of the deal in a letter of intent. Before then, be careful not to disclose too much detail about your business, Knadjian said. If the interested buyer is a competitor, they may be looking for valuable information to use at their own company.

In most cases, a buyer wouldn’t set out to deceive you, Knadjian said. A buyer would be looking to check the legitimacy of your claims about the business. You should conduct due diligence on the buyer to make similar confirmations.

“I’m assuming you’re operating as an actual company,” Knadjian said. “The point of due diligence is to test those assumptions.”

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Melissa Wylie
Melissa Wylie |

Melissa Wylie is a writer at MagnifyMoney. You can email Melissa at [email protected]

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Small Business

Accepting Cryptocurrency for Your Business

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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If you think of yourself as an early adopter of emerging trends, you may be wondering how to accept cryptocurrency as payment for the goods and services your business sells. Accepting cryptocurrency could open an additional revenue stream for your small business and help you reach new customers, said Dennis Murphy, Ohio-based certified public accountant and principal at financial advisor firm Skoda Minotti. And some processing services are making it easy for business owners to take Bitcoins and other digital currencies as payment.

However, cryptocurrency is highly volatile, and may not be ideal for risk-averse business owners. Continue reading to determine if accepting cryptocurrency could be beneficial for your business and how to receive this type of payment.

What is cryptocurrency?

Cryptocurrency is a digital exchange currency that uses cryptography to transfer value from one person to another online. It relies on what’s known as the blockchain, a public digital ledger that records all transactions anonymously in chronological order. Using a personalized digital key, anyone can add transactions to the blockchain. This technology secures the exchange of cryptocurrency.

There are thousands of types of digital currencies traded on a daily basis. Bitcoin and Ethereum are among the most popular cryptocurrency, as they have the highest value. Also among the top cryptocurrencies are XRP, Bitcoin Cash and Litecoin.

A small portion of businesses accept cryptocurrency, hovering around 1% to 3%, said Matthew May, co-founder of Atlanta-based financial firm Acuity, and most of these companies accept Bitcoin.

How it works

The value of cryptocurrency is derived from supply and demand. For instance, the more people who want to buy Bitcoin compared to how much is available determines its value. The value of cryptocurrency fluctuates to reflect both factors. Cryptocurrency can be converted into fiat currency, like U.S. dollars, or another type of cryptocurrency.

Only some cryptocurrencies, including Bitcoin, can be directly exchanged for USD. Others must be converted into those types of cryptocurrency before being converted into cash, May said.

Digital wallets hold cryptocurrency and record the value of coins. Wallets also verify transactions and the number of coins in storage. Cryptocurrency storage can be considered “hot” or “cold,” Murphy said. A wallet that is connected to the internet would be hot, while a storage device such as a USB drive would be considered cold.

To trade or make purchases with cryptocurrency, you’d need to keep it in a hot wallet. It’s best to move coins onto cold storage devices if you don’t plan to trade frequently to keep it safe, as online cryptocurrency storage is vulnerable to hackers, Murphy said.

Accepting Bitcoin as payment

Anyone with a cryptocurrency wallet could individually transfer Bitcoin to another person. To accept a payment, you would need to display a QR code that connects to your wallet, which the other person would scan to transfer Bitcoins to your account. You wouldn’t owe a fee for accepting cryptocurrency payments, though some wallets charge a fee for spending.

You could also accept cryptocurrency in a way that is similar to accepting credit cards and allows you to convert your coins into cash. You’d need to sign up for a payment processing system that would simplify the process of receiving cryptocurrency, May said.

BitPay

A common option for businesses is BitPay, a payment processor designed specifically for Bitcoin transactions. Businesses can accept Bitcoin payments online, via email or in person using the BitPay app, which we’ll describe in more detail, below.

Businesses that frequently make international transactions could benefit most from a service like BitPay, May said. Exchanging cryptocurrency could be a less expensive option for selling goods and services across borders, as the exchange rates for fiat currencies wouldn’t apply.

“It might be easier for somebody to get Bitcoin than the U.S. dollar,” May said. “It might be cheaper for them.”

To sign up for a BitPay merchant account, you would need to submit an application with your business name, address, industry and website, as well as a few personal details like your name and date of birth. BitPay charges a 1% fee on each transaction and allows unlimited monthly transactions. You can choose to receive payments in Bitcoin or a fiat currency of your choice, including USD, and BitPay would make the exchange for you.

Payments made through BitPay wouldn’t be subject to price volatility, and you would receive the exact amount that you charge minus BitPay’s 1% fee, regardless of the change in value of Bitcoin. For online transactions, BitPay provides payment buttons, embeddable invoices and check out services for your website.

How to use the BitPay app

If you want to accept Bitcoin payments in person, you could use the BitPay Checkout app for Android and iOS devices. When using the app, you would enter the amount owed and BitPay would generate an invoice for your customer. A QR code would appear on your device, and the customer would scan the code to access and pay the invoice from their device. Customers would pay directly from their own Bitcoin wallets.

Several cryptocurrency apps provide the same service and could integrate with your current POS system. Coinbase, Coinkite, MyEtherWallet and Sia wallets provide apps that facilitate transactions for different types of cryptocurrency. Customers could scan a QR code, manually input a code or otherwise connect with your device to pay you in cryptocurrency.

Converting cryptocurrency into cash through a service like BitPay as soon as you receive a payment would be a smart strategy if you don’t have much experience with digital currency, Murphy said. You wouldn’t have to worry about a change in value that could occur if you hold onto coins.

“That’s the best thing to do if they want the easiest compliance, easiest reporting and easiest accounting,” Murphy said.

We’ll dive into compliance and reporting in the next section.

The advantages and disadvantages of accepting cryptocurrency

ProsCons
  • Anyone can make or accept a cryptocurrency payment.

  • Lack of regulation may leave users with little recourse in case of theft.

  • You could hold onto coins as an investment.

  • You may need to pay taxes and report any gains or losses you incur. Cryptocurrency could lose value if you wait to convert to cash.

  • BitPay and other services could immediately convert cryptocurrency payments to cash.

  • Services like BitPay charge a fee to accept payments and convert currency.

Legal and tax implications

Because cryptocurrency is decentralized and transactions are considered peer to peer, Bitcoin and other coins aren’t subject to the same treatment as money in a bank, Murphy said. But you still must meet IRS requirements if you accept cryptocurrency in a business transaction.

The IRS treats cryptocurrency as property, similar to a stock, bond or other trading security that can be sold for a profit, Murphy said. Each time you sell or recieve cryptocurrency, you must report any gains or losses you generate from a cryptocurrency transaction, he said.

If you keep cryptocurrency for too long after a business transaction, you may need to report a personal gain or loss from that payment. For instance, if a customer paid you $10 in cryptocurrency for a notebook, but the currency appreciates to $15 before you convert it to dollars, you would then need to report a capital gain because the original sale was recorded as $10, Murphy said. If you converted the $10 into cash right away, you wouldn’t need to worry about recording an additional gain or loss based on market fluctuation.

“It’s best if business owners convert it into USD and don’t ever see the cryptocurrency,” Murphy said.

However, it is legal to keep a cryptocurrency payment in coin form as an investment, Murphy said. You could even convert a portion to cash and keep the rest as coin. You would just need to make sure you accurately report how much you earn or lose from that investment.

Third parties that handle digital currency transactions on behalf of businesses must issue a 1099-K form to merchants summarizing all payments. BitPay, for instance, would report the USD equivalent of your transactions to the IRS and send you a 1099-K with the same information.

You would only receive a 1099-K form detailing your transaction history if you’ve received more than $20,000 and made more than 200 transactions throughout the year. The purpose of a 1099-K is to help you make sure you accurately report your business income when filing income taxes. It would be your responsibility to report any gains or losses from cryptocurrency when you file your income taxes, Murphy said.

“It’s all voluntary,” he said. “It’s all self-reporting up to this point.”

If you fail to properly report income received through cryptocurrency transactions, you could face an audit or more extreme penalties. You could be subject to criminal charges such as tax evasion or filing a false tax return, which could result in three-to-five years of prison time and a fine up to $250,000.

The federal government in the U.S. does not recognize cryptocurrency as legal tender, but cryptocurrency exchange is regulated at the state level, although at varying degrees. While some states have not issued any guidance regarding digital currency, others require businesses to obtain special licenses to handle Bitcoin and other cryptocurrency. Check your local laws or consult an attorney to ensure you remain compliant when accepting digital currency.

Is cryptocurrency right for your business?

The main factor to consider before accepting Bitcoin or other digital coins is whether your customers or clients want to make payments with cryptocurrency, May said.

“If you’re an early adopter, you’re probably already in,” May said. “If customers aren’t asking for it, I wouldn’t worry about it right now.”

If you do have customers ready to pay with digital currency, it wouldn’t hurt to set up an account with a service like BitPay, Murphy said. You may find it’s more affordable than accepting credit cards. BitPay charges a 1% fee, while major networks like MasterCard, Visa, Discover and American Express charge average credit card processing fees of 2% or more.

“For those businesses looking for ways to reduce payment processing fees, it’s good for that,” Murphy said. “Just make sure it’s done securely.”

Payment processors like BitPay reduce risk for business owners accepting Bitcoin, as it can immediately convert payments to cash. If you don’t hold onto coins for personal investment, you wouldn’t need to worry about a change in the value of the currency or reporting capital gains or losses when filing taxes.

Cryptocurrency is far from becoming a replacement for standard currency, May said, so business owners shouldn’t feel pressured to accept Bitcoin or other coins as payment. But digital currency could become mainstream in the near future, he said. It may be worthwhile to learn more about how cryptocurrency could potentially benefit your business.

“Think about how little cash you carry around versus ten years ago,” May said. “I think it’s coming – it’s just a matter of when.”

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Melissa Wylie
Melissa Wylie |

Melissa Wylie is a writer at MagnifyMoney. You can email Melissa at [email protected]