When to Take on Business Debt

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Running a small business means balancing growth goals with financial responsibility. When borrowing is used smartly – it can help you scale, stay agile, and keep full control of your business. Here’s when it makes sense to take on business debt, the risks to watch out for, and how First Financial may be able to help your Monmouth or Ocean County small business.

When to Consider Business Debt

  • For Growth & Expansion – Moving into a bigger space, buying more equipment, or hiring staff often requires upfront capital.
  • To Seize a Timely Opportunity – Sometimes favorable deals (bulk inventory, discounted real estate, or contracts) pop up, and having access to borrowed funds lets you act quickly.
  • To Build Business Credit – Paying off smaller loans or lines of credit on time helps improve your credit profile, setting you up for better terms in the future.
  • For Smoothing Cash Flow – For seasonal businesses or those with irregular income, a line of credit or short-term business loan may help bridge gaps for payroll or supplier payments.
  • When Rates are Low – When interest rates are favorable, debt can be a cost-efficient way to access capital. Interest is also often tax‐deductible.

Why Debt Might Be Better Than Equity

  • You Retain Ownership & Control – You won’t need to give up business shares or decision-making power.
  • Predictability of Cost – Loan payments will be fixed; equity comes with sharing profits (possibly indefinitely).
  • Tax Benefits – Interest payments are usually deductible, lowering your taxable income.
  • Strengthened Credit Profile – Successful borrowing builds business credit, making future financing easier.

Risks to Watch Out For

Borrowing also comes with responsibilities that should not be overlooked. Loan payments are fixed obligations, which can put pressure on your business if revenue dips. Taking on too much debt increases financial vulnerability, particularly during economic downturns. The terms of the loan also matter, such as interest rate, collateral requirements, and fees – which can all add costs or limit flexibility. If not managed carefully, debt can restrict strategic business choices and impact long-term stability, making it crucial to borrow with a clear purpose and repayment plan.

How First Financial Can Support Your Small Business

At First Financial, we’re here to make the borrowing process easier with flexible lending solutions. Some of our offerings include:

  • Commercial Real Estate Loans to help you expand or invest in property.
  • Commercial Vehicle and Equipment Loans to keep your operations moving.
  • Business Lines of Credit for on-demand access to working capital.
  • We also offer a VISA Business Cash Plus Credit Card for everyday spending needs, and 1% cash back on unlimited purchases.*

​​You can learn more about our business loan offerings on our website. With personalized service and competitive rates, First Financial is committed to helping your small Monmouth or Ocean County business grow smartly and sustainably.

*This APR of 18% is for purchases, balance transfers, and cash advances and will vary with the market based on the Prime Rate. Subject to credit approval. Rates quoted assume excellent borrower credit history. Your actual APR may vary based on your state of residence, approved loan amount, applicable discounts and your credit history. No Annual Fees. Other fees that apply: Balance Transfer and Cash Advance Fees of 3% or $10, whichever is greater; Late Payment Fee of $35, $10 Card Replacement Fee, and Returned Payment Fee of $35. A First Financial membership is required to obtain a Visa® Business Cash Plus Credit Card and is available to anyone who lives, works, worships, volunteers, or attends school in Monmouth or Ocean Counties. A $5 deposit in a base savings account is required for credit union membership prior to opening any other account/loan. Your First Financial Visa® Business Cash Plus Card will earn cash back based on your eligible purchase transactions. The cash back will be applied to your current credit card balance on a quarterly basis and be shown cumulatively on your billing statement. Unless you are participating in a limited time promotional offer, you will earn 1% cash back based on eligible purchases each quarter.

How to Detect and Prevent Power of Attorney Fraud

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Along with the potential benefits associated with establishing a power of attorney, come potential risks to consider. Our first article in this series discussed what a power of attorney (POA) is – a legal document that ensures your wishes (typically having to do with your assets), are carried out in a manner that you as the principal approve of. It gives a trusted person (often referred to as an agent), the legal authority to handle these wishes. Anyone you trust – such as a family member or friend, can serve in this role for you.

Even when designating someone you trust as your POA, the risk of fraud and abuse can still exist. This person may perform actions that the POA document does not authorize, manipulate you or your assets for their own personal gain, or not act in your best interest.1

There are several ways in which POA fraud and abuse can occur, so it is best to become familiar with some of them so you can recognize if it may be happening to you or someone you care about.

Financial Exploitation: In this instance, the agent may use the principal’s money for their own gain instead of the principal’s needs – often without informing the principal. They may withdraw funds from the principal’s accounts for their own use or conceal the reason for withdrawing the funds. They may justify an expenditure by saying it was for the principal’s benefit, but then use the funds for something that does not align with the principal’s needs or wishes.2

Unauthorized Gifting: This occurrence happens when the agent authorizes gifts to themselves or other family members without the authority to do so, without the principal’s knowledge, or without considering if it is in the principal’s best interest. Gifting is unauthorized if the POA does not explicitly authorize gifting, which can include recipients and the dollar amount(s) that may be gifted.3 If gifting is authorized – the agent should consider the principal’s entire financial situation, upcoming financial obligations, and if it is consistent with their personal character. 3

Neglect of Duties: Neglect occurs when the agent does not provide care as required by the POA – such as meeting medical needs or providing adequate living conditions. 2 This can also take the form of neglecting financial responsibilities, such as not paying bills.

What are common red flags of POA fraud?

  • Bills are unpaid, even though there should be sufficient funds to pay them. This can suggest that the agent is using the funds for unauthorized purposes or neglecting to manage the principal’s financial obligations.
  • Sudden, unexplained changes to legal documents. Especially if the changes benefit the agent, or if the principal is unaware of or didn’t consent to the changes.2
  • Information is being withheld from the principal and principal’s loved ones. The agent may avoid answering questions or giving information about the principal’s financial situation, including their bank accounts or investments.4
  • The principal becomes isolated from loved ones. The agent may isolate the principal from those who care about them so that it is harder to detect if something is not right. Isolating the principal also allows the agent to exercise more control, without the potential for others to intervene. 2

How can you protect yourself from POA fraud and abuse?

  • Choose your agent wisely. Choosing an agent that you trust, and whose values align with your own, to ensure they are capable of following your wishes and putting your needs first.2
  • Specify the scope of the POA. Clearly defining tasks, responsibilities, and decisions to be made on your behalf can minimize the potential for abuse.2 This aligns the power that is legally granted with your intentions, and only gives the agent the authority needed to carry out your wishes.
  • Clearly communicate with your agent. Continually check in with your agent to confirm your wishes and preferences. Promptly make any changes you desire to the POA so that the agent remains aligned with your wishes.
  • Inform trusted individuals about your POA. By informing trusted individuals such as family, friends, and business partners about your POA – they can be on the lookout for any red flags that signal fraud or abuse.
  • If possible, remain involved in decision-making. Review the agent’s activity, such as any financial transactions they are conducting or any medical decisions they are making on your behalf. This encourages transparency between you and the agent and keeps you involved in your affairs, to the degree you wish to be. 2

To report POA fraud, contact Adult Protective Services (APS) in your state or to the National Center on Elder Abuse (NCEA). Any identity theft incidents related to fraud should be reported to the principal’s financial institution, the local police, and to the Federal Trade Commission at identitytheft.gov.

If you are thinking about your financial future and retirement, as well as estate planning – the First Financial Investment & Retirement Center will be hosting an exclusive no-cost virtual seminar on the Transitions to Retirement with a Focus on Estate Planning, on Wednesday, October 8th at 6pm.

(697533-1 and 622155)

You can also register for this session by contacting Maureen McGreevy, LPL Financial Advisor at 732.312.1534 or emailing maureen.mcgreevy@lplfinancial.com

Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. First Financial Federal Credit Union (FFFCU) and First Financial Investment & Retirement Center are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using First Financial Investment & Retirement Center, and may also be employees of FFFCU. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of FFFCU or First Financial Investment & Retirement Center.

Securities and insurance offered through LPL or its affiliates are:

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. For individual estate planning advice, consult with an estate attorney.

  1. John Lewandowski of Heban Murphree Lewandowski Law, March 12, 2022
    1. What Is Considered Power of Attorney Abuse? | HML Law
  2. Edward Gates for American Judicial System, October 10, 2023
    1. How Do You Prove Power Of Attorney Abuse: Steps and Strategies for Justice
  3. National Research Legal Group, Inc., June 19, 2019
    1. ESTATES: Gifts Under a Power of Attorney
  4. Mark R. Manceri, P.A., June 9, 2023
    1. 6 Warning Signs That Power Of Attorney May Be Abused

Set for Life: Tasks to Help Determine Life Insurance Needs

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For many people, life insurance is a key component of a comprehensive financial plan. Determining how much you need is a crucial step in ensuring financial security for your loved ones in the event of your passing. While there’s no one-size-fits-all answer and since September is Life Insurance Awareness Month, completing these planning tasks can help you figure out the right amount of coverage for your needs.

Assess your financial obligations. Determining your life insurance needs starts with evaluating your current financial obligations. Consider your outstanding debts, such as mortgage payments, car loans, credit card balances, and student loans. Additionally, factor in future financial needs like college tuition for your children.

Calculate income replacement. Determine how much income your family would need to maintain their standard of living if you were no longer around. A good rule of thumb is to multiply your annual income by the number of years your dependents would require financial support. Individual circumstances will vary, depending on the current age(s) of your dependents. If you’re just starting a family, for example, you might want to consider 20‒25 years multiplied by your annual income.

Consider your spouse or partner’s income. If your spouse or partner contributes to your household income, consider how their income would change in your absence. For example, they may need to reduce their working hours to take care of children or other family matters during this transition period. Life insurance can help replace their lost income or provide financial assistance for childcare if needed.

Evaluate existing assets and savings. Take stock of any existing assets and savings that could be used to cover expenses in your absence. This includes savings accounts, investment portfolios, retirement accounts and any other liquid assets. Subtract these from your financial obligations to determine the additional coverage needed.

Account for inflation in future expenses. As the past few years have shown, the cost of living will increase over time due to inflation. Make sure to factor it in when you project future expenses such as college tuition, healthcare costs and other living expenses when calculating your life insurance needs.

Consider special circumstances. If you have dependents with special needs or unique circumstances, such as a disabled child or elderly parent, you may require additional coverage to ensure their ongoing care and support.

Review regularly. Life insurance needs can change over time because of factors like marriage, childbirth, career advancements or changes in financial obligations. Regularly review your coverage to ensure it aligns with your current circumstances and adjust as needed.

Questions about this topic? Contact First Financial’s Investment & Retirement Center by calling 732.312.1534. You can also email mary.laferriere@lpl.com or maureen.mcgreevy@lpl.com

Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. First Financial Federal Credit Union (FFFCU) and First Financial Investment & Retirement Center are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using First Financial Investment & Retirement Center, and may also be employees of FFFCU. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of FFFCU or First Financial Investment & Retirement Center.

Securities and insurance offered through LPL or its affiliates are:

This information is not intended as authoritative guidance or tax or legal advice. You should consult with your attorney or tax advisor for guidance on your specific situation.
LPL Financial and its advisors are only offering educational services and cannot offer participants investment advice specific to their particular needs. If you are seeking investment advice specific to your needs, such advisory services must be obtained on your own separate from this educational material.

Kmotion, Inc., 12336 SE Scherrer Street, Happy Valley, OR 97086; www.kmotion.com

©2024 Kmotion, Inc. This newsletter is a publication of Kmotion, Inc., whose role is solely that of publisher. The articles and opinions in this newsletter are those of Kmotion. The articles and opinions are for general information only and are not intended to provide specific advice or recommendations for any individual. Nothing in this publication shall be construed as providing investment counseling or directing employees to participate in any investment program in any way. Please consult your financial advisor or other appropriate professional for further assistance with regard to your individual situation.

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How to Conduct a Financial Check-up

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A financial check-up is like an annual physical in that it can help you catch problems early, adjust to life changes, and set yourself up for a healthier future. Whether you live with family, a partner, or roommates – reviewing your money together builds trust and alignment.

1. Review Your Starting Point

Gather bank, credit card, and investment statements to see where your money is going. Compare income to expenses and calculate your net worth (assets minus debt). This gives you a clear snapshot of where things stand. The financial calculators on our website can help with this step.

2. Revisit Your Goals

Life changes – new jobs, moving in with someone, or welcoming kids – can shift financial priorities. Take time to review whether your goals, like paying down debt or saving for travel – still make sense to your household and adjust accordingly.

3. Tune-up the Budget

Budgets aren’t “set and forget.” Use your check-up to identify overspending, cut unnecessary subscriptions, and redirect money toward savings goals and retirement. We also have a fillable PDF budgeting worksheet on our website, which you can use to help you complete your financial check-up.

4. Check Your Safety Nets

Make sure you have an emergency fund (ideally 3–6 months of expenses) and review your insurance coverage. If you’re carrying debt, consider repayment strategies or refinancing.

Getting Kids Involved Early

Financial check-ups are a chance to teach children valuable habits. Even young kids can:

  • Sit in on simple discussions about saving and spending.
  • Help with small tasks, and set savings goals for toys or items they would like to purchase in the future.
  • Learn through practice, such as managing an allowance with jars labeled “spend,” “save,” and “give.”
  • Receive positive reinforcement when they make good choices.

At First Financial, we believe financial check-ups are an important step toward building confidence and stability at every stage of life. Whether you’re reviewing goals with your partner, teaching your kids the basics of saving, or planning for the future – our team and resources are here to help. For more tips, guidance, and tools to support your financial journey, make an appointment at your local branch or check out our First Scoop Blog.

Renting Your First Apartment: The Process, Costs, and Everything in Between

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If you’ve decided that you’re ready to rent your first apartment, you might be excited – but you might be equally as nervous. With the number of factors there are to consider, even seasoned renters should brush up on the steps to take before they begin the search for a new place to call home. Keep reading for a step-by-step guide on how to secure your first apartment, from start to finish.

1. Create a Budget

Whether you’re going out on your own or renting with a roommate, it’s time to crunch the numbers. Creating a budget before searching for an apartment – is important for a few reasons. You’ll first want to find an apartment that you can currently (and hopefully continue to) comfortably afford. This will also help during your search by setting parameters and narrowing down your options. If the maximum rent you can afford to pay is $1,800 per month, you wouldn’t tour a unit that’s going for $2,500 a month. Many landlords also have income requirements that must be met to be approved for a rental. A common income requirement is the tenant(s) having a combined monthly income of at least three times the monthly rent. For example, if you are renting a $1,500 per month apartment by yourself – you would need a monthly income of at least $4,500 to qualify. However, just because you meet the landlord’s income requirements doesn’t mean the apartment is a good financial fit for you – only your budget can tell you that. Aside from the cost of rent, also consider your new monthly expenses like utilities and groceries.

If this is your first time creating a budget, check out our recent blog post on how to get started with one. We also have a fillable PDF budgeting worksheet if you’re ready to jump right in.

2. Consider Any Additional Upfront Costs

You will have certain expenses you can expect to pay each month such as your rent, utilities, and groceries. Aside from your recurring expenses, you’ll also want to prepare for those one-time costs that are unique to moving into a rental unit.

  • Application Fee. This is collected when you apply for a rental and covers the landlord’s costs associated with making sure you meet the requirements to be a tenant. They will often check your credit and perform a background check.
  • Security Deposit. This is usually collected prior to moving in and is held by the landlord to cover any damages you may cause to the unit during your lease. It is usually returned in full if you left the rental in reasonably good shape.
  • Pet Fee/Deposit. For those of you who have (or will have) furry friends – a pet fee is usually non-refundable and typically applies to cats and dogs to cover any potential damages they may cause in the rental.
  • Pet Rent. The monthly fee you may be asked to pay on top of your rent if you have a pet.
  • Renters Insurance. This is renewed annually (and usually paid upfront or in monthly installments) and protects you from a wide range of covered problems.
  • Moving Expenses. This includes the cost to move your belongings to your apartment.
  • Unless your rental comes fully furnished, you will need to plan to buy furniture.

3. Check Your Credit Score

Aside from income, your credit score is another factor that landlords will consider when deciding whether to approve you. A general rule-of-thumb is to have a credit score of 600 or higher in order to be approved to rent an apartment. This varies based on landlord, location, and rental type – but the higher your score, the better. There are ways to boost your chances of approval if your score doesn’t quite meet the mark, such as getting a co-signer or offering to pay a larger security deposit.

4. Make a List of Your Requirements and Narrow Down Your Search

Once you have your budget and expenses planned out, it’s time to make a list of apartments that meet your requirements. Do you want in-unit laundry or an on-site laundry facility? Which floor do you want to live on? Once you know the things you can’t compromise on, start making a list of rental units that check off all your boxes. The hunt for an apartment is conducted almost entirely online now, and websites like Apartments.com and Zillow.com are good places to start.

5. Begin Touring and Applying for Apartments

When you have a shortlist of units to tour, begin scheduling appointments with the landlord or property management team. Come prepared with a list of questions to ask on tour day, especially if you were unable to find the answers online. For example, you’ll want to know how you would pay rent and how you would request maintenance.

Once you found the “one,” start the application. Landlords may have different application processes – some may conduct the application entirely through an online portal, and others may only have the good-old-fashioned way – on pen and paper. Aside from the application fee, you will typically also need to provide proof of income and identification.

6. Congratulations! You’re Ready to Sign a Lease

If your rental application gets approved – congratulations! Once you decide to move into a particular apartment, you will receive the lease. It is always recommended to review the lease prior to signing, as it is a contract between you and the landlord. It will outline what is expected of you during your time occupying the unit. Not abiding by the conditions within the lease could impact you later, such as not receiving your security deposit back.

This is also the time when many of those upfront expenses start coming due. For example, many landlords will require that you purchase renters insurance prior to moving in.

7. Move-in Day

Once the big day arrives, make sure you come prepared. Many people like to deep clean their apartment before moving any belongings in. You can also hire a company or individual to do this for you. The landlord or property management team will usually meet you on move-in day to wrap up any loose ends like providing you with keys, instructions for portal setup, or sometimes even a small welcome gift.

First Financial wishes you the best of luck if you are embarking on this new journey. Should you wish to talk to one of our financial experts to review your budget before you get started, call us at 732.312.1500 or visit your local branch.

What is a Power of Attorney and Why Have One?

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The topic of estate planning can be difficult to think about, but it is an important one. An estate plan will designate how you’d like your assets distributed, provide your healthcare directives, and will protect your loved ones by minimizing conflict and ensuring their financial security. In this article, we will be discussing the power of attorney (POA) component of estate planning and why it might be important to have one.

A power of attorney gives you a say now – in how you wish to handle your affairs in the future, should you become unable to do so.1 A POA is a legal document that ensures your wishes (typically having to do with your assets), are carried out in a manner that you as the principal – approve of. It gives a trusted person (often referred to as an agent), the legal authority to handle these wishes. The person you designate as a power of attorney doesn’t actually have to be an attorney. Anyone you trust – such as a family member or friend, can serve in this role for you. You can even designate more than one person, assigning different responsibilities to each. 2

The power of attorney can go into effect upon your incapacitation or any other triggering event you specify. Individual states have various power of attorney laws, so it’s important to become familiar with your state’s specific regulations to make an informed decision. 2

There are also several different POA designations, so it’s best to become familiar with what is involved with each one – as well as when a certain designation may be needed.

General Power of Attorney: An agent under this agreement can serve any needs, as your state allows. They can do things like sign checks, sell property, pay bills or make bank deposits and withdrawals. A key limitation of a general POA is that it is no longer effective if the principal becomes incapacitated. Due to this, a general POA might be most effective for short-term needs or specific tasks.

Durable Power of Attorney: A durable POA will remain in effect even if the principal becomes incapacitated, allowing the agent to continue to make decisions when the principal is unable to do so. A durable POA remains in effect from the day it is executed and through the principal’s incapacity. This type of POA can ensure a seamless transition in decision making should the principal become incapacitated.

Limited Power of Attorney: An agent under this agreement can serve specific legal needs for limited timeframes.

Healthcare Power of Attorney (HCPA): Also known as a medical power of attorney, this document appoints someone to make medical decisions for you if you are incapacitated and ensures that your healthcare preferences are respected – even when you cannot communicate them. A HCPA is typically a spouse or family member who you trust, and who would likely recommend a course of action you would agree with. A backup agent should also be identified, in case your initial choice is unavailable or unable to act at the time needed.

What are the benefits of a POA and why have one?

  • Protect your interests now: Since a POA can only be executed when you are of sound mind, you can tailor your POA to your specific requirements and designate matters to continue to be handled as you currently wish in the present.
  • Ensure someone you trust will handle your affairs: Establishing a POA allows you to select a trusted person as your agent, giving you confidence in how your affairs will be handled. The agent will be making critical decisions and advocating on your behalf, therefore you’ll want to choose someone who shares your values and who will act as you would have.
  • Ease the burden should the unexpected happen: A POA provides clear direction on how decisions should be made and who is responsible for making them, thereby reducing conflicts and feelings of uncertainty among family members. It also provides reassurance that the principal selected an agent who is capable of honoring their wishes and acting in accordance with their values.

Creating a power of attorney is an important aspect of estate planning that will protect your wishes and the assets you’ve worked hard to grow over the years. No matter what your age or your stage in life, getting your affairs in order and your records organized is an essential part of financial planning. Estate planning can be complex, and the specific documents needed may vary based on your individual circumstances. It’s wise to consult with an attorney who specializes in estate planning to create a plan that aligns with your goals and complies with local laws. You’ll also want to make sure your financial planner knows the details of your estate plan. By including these details in your financial plan, you can ensure your end-of-life wishes will work as you intended.

Should you be thinking about your financial future and retirement, as well as estate planning – the First Financial Investment & Retirement Center will be hosting an exclusive no-cost virtual seminar on the Transitions to Retirement featuring a bonus segment on Estate Planning, on Wednesday, October 8th at 6pm.

(697533-1 and 622155)

You can also register for this session by contacting Maureen McGreevy, LPL Financial Advisor at 732.312.1534 or emailing maureen.mcgreevy@lpl.com

Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. First Financial Federal Credit Union (FFFCU) and First Financial Investment & Retirement Center are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using First Financial Investment & Retirement Center, and may also be employees of FFFCU. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of FFFCU or First Financial Investment & Retirement Center.

Securities and insurance offered through LPL or its affiliates are:

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. For individual estate planning advice, consult with an estate attorney.

Sources:

1 Forbes.com, November 19, 2024

2 Investopedia.com, March 23, 2023

LPL tracking #’s referenced: 676252, 513868, 653950