If you’re looking to venture out into the market as a startup with an innovation, it’s important to understand how the process works. Learn about the different types of startups, funding options, and general requirements for running your startup business. Definition and Examples of Startups Startups are new businesses launched by founders who aim to bring a new idea or product to market that can create a significant business opportunity while also making an impact....

Definition and Example of Student Credit Cards Student credit cards are designed for young adults who are enrolled in college and who may be just starting out with credit. Although they share a lot in common with other credit cards, they have some features that are tailor-made for students. Some of these features are required by law. These cards often have less stringent credit requirements than regular cards because most student applicants tend to have weak or nonexistent credit histories....

Learn how student loan servicers work and how the Department of Education’s (DOE) changes to the process will affect you and your federal student loans. Definition and Examples of Student Loan Servicers A student loan servicer is a company that the Department of Education uses to handle repayment, billing, and other aspects of your federal student loans. The DOE assigns each borrower to a servicer once the borrower’s loan is disbursed....

The VA loan was created in 1944 to reward veterans returning from World War II for their service, by making it easier for them to get into a home with an affordable mortgage. It remains one of the most popular mortgage programs today. For example, in 2021, over 1.4 million VA loans were granted for home purchases. There’s a reason for the program’s popularity, and it has to do with some smokin’ VA home loan benefits....

Definition of a Voluntary Employees’ Beneficiary Association Plan A voluntary employees’ beneficiary association account (VEBA) is a tax-free health and welfare benefit trust funded by either employees or their employer. It’s a health reimbursement arrangement (HRA) that can repay you for eligible medical expenses such as deductibles, copays, prescription medication costs, retiree insurance premiums, and more. VEBAs are attractive options because you don’t need to pay taxes on the balance, accrued interest, or withdrawals....

Definition and Example of a Free Look Period The free look period for an annuity is a period after the purchase in which you can cancel it without facing any penalties. Free look periods usually last at least 10 days after purchase, depending on state law. The free look provision is designed to give prospective annuity customers a way to protect themselves from predatory sales practices. In the past, agents were paid commissions for selling annuities....

This article examines the various types of asset classes, why investors group securities in asset classes, and some new and emerging asset classes to know about. Definition and Examples of Asset Classes An asset class is a group of investments that have similar traits in terms of risk and growth potential, and also tend to respond similarly to market fluctuations. They are a means of grouping similar securities together, partly for investment strategy purposes....

Alternate name: Interest-bearing checking account For example, if you deposit $10,000 in an interest checking account with a 0.20% APY, after a year of savings you’ll earn an extra $20.00. How an Interest Checking Account Works Traditionally, checking accounts are not interest-bearing accounts as savings accounts are, as they’re designed for short-term cash that you’ll spend soon. Savings accounts are better-known for earning interest, but these accounts ordinarily limit how often you can make certain withdrawals from the account....

What does a cap look like in action? Let’s say a loan’s per-period cap is 2%, the borrower’s current rate is 5%, and the loan adjusts annually. This means that the newly adjusted rate is not allowed to rise more than 2% above the current rate, or higher than 7%. Without a cap, the interest rate could jump much higher, which could lead to payments that are more than the consumer can afford to pay....

Alternate name: check card If you bank with Chase, for example, you’ve likely been issued a debit card for your account. Your debit card can either be processed online or offline. While you may choose “debit” when running your debit card through a POS terminal, it would become an offline debit card if you were to choose “credit” instead. Choosing credit doesn’t mean your card goes offline in the literal sense....

Capital expenditures are necessary for a company to grow its current business operations. They are the part of the budget allocated to maintaining and improving the equipment and assets to keep the business running. They can also be expenses related to the expansion of the company by acquiring new assets. Alternative name: Capital expenses, CapEx For example, a plastic manufacturing plant may purchase property and infrastructure to expand its business capacity....

For example, if one U.S. dollar ($1) can be exchanged for 0.86 euros, the exchange rate would be represented as $1 for 0.86€. So if someone is traveling to Europe and needs to exchange their dollars into euros, they would have to give up $100 in exchange for 86€. If the dollar appreciates relative to the euro and the rate becomes $1 for 0.94€, the dollar now “buys” more euros....

For consumers, default risk can affect the rates and terms you’ll qualify for if a lender sees you as a high default risk. It could even cause you to be denied a loan. Default risk doesn’t apply only to borrowers who are looking to take out loans. It also relates to companies that issue bonds, and whether they’ll be able to make interest payments on these bonds. Alternate name: Credit risk...

What Is Financial Ratio Analysis? Financial ratios are useful tools that help business managers, owners, and potential investors analyze and compare financial health. They are one tool that makes financial analysis possible across a firm’s history, an industry, or a business sector. Financial ratio analysis uses the data gathered from these ratios to make decisions about improving a firm’s profitability, solvency, and liquidity. Types of Financial Ratios There are six categories of financial ratios that business managers normally use in their analysis....

Understanding income tax payable can help businesses prepare their finances for expected taxes, rather than being caught off guard by the amounts of income tax bills. Definition and Examples of Income Tax Payable Income tax payable equals the amount that a company expects to owe in income taxes. Even though this expense is not necessarily clear-cut, as it can be hard to fully anticipate taxes owed, it gets accounted for as a liability on a company’s balance sheet because the company expects to pay out this amount....

However, on Feb. 9, 2018, the Bipartisan Budget Act (BBA) was signed into law by President Donald Trump. The BBA required that the IRS create and publish a tax return for older adults, and Form 1040-SR was introduced. Who Uses Form 1040-SR? Taxpayers who are 65 or older as of Jan. 2, can use Form 1040-SR to file their annual taxes for the prior tax year. Filers don’t have to be retired to qualify to use this form....

elenaleonova / E+ / Getty Images Form 945 pertains only to what the IRS calls “nonpayroll payments.” This form is commonly used for payments to certain independent contractors, as well as for qualified pensions, gambling profits, and military retirement, and pay. Form 945 is a summary form, showing all the different nonpayroll payments you’ve made. Generally speaking, you only have to withhold on payments to independent contractors if the contractor doesn’t give you a taxpayer identification number (TIN), the TIN they give you is incorrect, or you get a notice from the IRS saying you have to withhold taxes....

You can consult IRS Publication 463 to determine how much, if any, of the travel and meals expenses you incurred on your trip are deductible if you travel out of state as a business owner for a three-day conference to promote your business, but you also spend the last day of your trip sightseeing for pleasure. Definition and Examples of IRS Publication 463 IRS Publication 463 has six chapters:...

In other words, let the market do its own thing. If left alone, the laws of supply and demand will efficiently direct the production of goods and services. Supply includes natural resources, capital, and labor. Demand includes purchases by consumers, businesses, and the government. Former U.S. President Herbert Hoover was a famous proponent of laissez-faire policies. He believed an economy based on capitalism would self-correct. His commitment to a balanced budget in the face of the 1929 stock market crash turned the recession into the Great Depression....

Some well-known loan servicers include student loan servicers Nelnet, Great Lakes, and Navient. Alternate name: Mortgage servicer, student loan servicer, payment servicer How Does Loan Servicing Work? Your loan servicer is responsible for the day-to-day management of your loan and collecting monthly payments. Your servicer must comply with additional federal and legal requirements, too. For instance, if you have a mortgage, your loan servicer is required to: Apply your payment to your loan the same day it’s receivedTell you your current payment amountContact you about missed paymentsGive you detailed information about your payment history...