Business owners should pick tax deductions carefully

Too often, business owners try to deduct every possible expense, but this can be counterproductive. It makes your business appear less profitable on paper, which could limit the amount of money you can borrow to help grow your business.

Instead, focus on non-cash deductions like depreciation and amortization, since lenders can add those amounts back into your debt-service coverage ratio. One-time expenses, like relocation costs, can also be added back into your cash flow at the lender’s discretion.

Lastly, review your financials with your CPA to better understand your cash position and the trends of your business.

– Aaron Jimison, Valley National Bank