Haiti Relief Business

Archive for the ‘Capital Finance’ Category

As business owners develop their small business loan plans for future financing and refinancing throughout the United States, there is an increasing awareness that there have been significant business finance changes that cannot be ignored. Some of these measures are likely to end up being permanent, and even the temporary commercial mortgage loan and working capital loan changes are expected to be in place for an extended time due to the severity of the current financial climate.

The net result from business finance changes has been a reduction in commercial lenders as well as stricter standards for acquiring commercial loans and commercial mortgages. Unfortunately there has also been no shortage of misinformation about the availability of commercial funding.

A significant reduction in business lending activity overall is perhaps the most dramatic change. This has been due to several events occurring almost simultaneously. Several major commercial lenders have gone out of business altogether. Even though they have continued consumer lending, many banks have stopped commercial finance lending. Numerous business lenders have enacted stricter standards for the commercial financing transactions they are still willing to consider.

It remains to be seen how many changes will be permanent or temporary. But from a practical perspective, commercial borrowers are left with no choice but to adapt to the changing business finance environment. Business owners must be prepared to operate within a more complicated climate for commercial mortgage loans and small business loans regardless of how long the changes might be kept in place.

What should borrowers do about this? A primary option that business owners should explore involves looking beyond their local market area for help with commercial loans. A commercial financing expert operating throughout the United States should be helpful in improving upon this situation.

In addition to fewer business lenders to choose from, there are two other significant changes which must be anticipated by business owners before seeking new commercial loans. First, commercial lenders are increasingly demanding more collateral for virtually all business finance funding. Second, most lenders have cancelled or are about to eliminate unsecured lines of credit (usually called working capital loans) for many businesses.

Considering a business cash advance program based on future credit card processing transactions is likely to be an effective commercial financing strategy for overcoming the combined obstacles of more collateral, reduced unsecured credit lines and fewer lenders. This is proving to be one of the few sources of business funding that has not been adversely impacted by recent events. It will be productive to discuss the potential with a business finance expert who can provide advice about small business financing solutions including business cash advances and other financial options.

It is increasingly obvious that many banks will continue to modify their business lending programs in response to changing conditions. This means that another key change issue for working capital financing and commercial mortgages is the likelihood that more changes will be forthcoming in the near future.

To adequately prepare for future commercial finance changes that might (or might not) occur is a daunting task for a business owner. A commercial financing expert familiar with Plan B contingency financing for small business loans will prove to be a valuable resource for any borrower wanting to seriously deal with both current and future changes impacting the financial health of their business. By having a candid conversation with a commercial loan expert, business owners should be more capable of implementing an appropriate strategy for the vast changes which have recently occurred or are about to become effective for most business financing and working capital finance funding.

Commercial finance is one of the many options available to entrepreneurs seeking capital to start or grow an existing business. This sort of financing is also referred to as asset-based lending, meaning that it is a secured business loan. The borrower guarantees the loan by giving up business assets as collateral for the loan. Another popular phrase for commercial finance is asset-based finance.

Account receivable factoring is one form of commercial finance. This consists of selling open invoices for cash that can be used right away in the business. There are many benefits to this financing option including not giving up equity, being able to take advantage of early payment and volume discounts from your suppliers, you can actually purchase in greater volume from suppliers, and you also accrue no additional debt in your business.

Another popular commercial finance option is purchase order financing because it offers quick cash flow reserves. When any business is growing or expanding their business the cash flow simply isn’t there because of the money it takes to market and produce products. Suppliers also want to be paid with C.O.D. and your customers are on Net-30 terms; so you run into a cash flow problem. Purchase order financing solves this issue by paying for the costs of your goods directly to the supplier, thus giving you more cash to use on more critical business expenditures. To begin with purchase order financing simply obtain a purchase order from your customer, find an approved supplier, place the order through that supplier.

Asset based loans, an additional commercial finance option, provide a short term approach to maximizing cash flow within a business. This form of financing is used as test for a business to show how they would perform with a long term loan. The business who is receiving the asset based loan has a short window to prove that with the proper financing their business model is effective, and that a long term loan would ensure business growth over a long period of time. This form of financing is perfect for the business that can’t afford to wait to establish their business credit. The assets that are accepted as collateral for this type of loan include real property, accounts receivables, and completed inventory.

Other forms of commercial finance include bankruptcy reorganization, expansion financing, import and export financing, inventory loans, secured lines of credit, and merchant account advances. Financing a business is a difficult process, but if you utilize the financing resources available, your business have a much greater chance of success.

It is also good to work on establishing your business credit, ensuring that you separate your personal credit from your business credit. With good business credit scores obtaining large loans and other forms of capital is very simple, and you won’t be one of the 97 percent that actually have a loan application denied. One other strategy that is easy to do and beneficial on your quest for business capital is to use a free business capital search engine.

In planning for a successful funding campaign, you must expose your investment opportunity to enough investors.

The Kugarand Theory of Investing states that for every …

1 investor who invests,

3 say they will invest, and

15 investors were exposed to your investment opportunity to get to the three to get to the one Investor who actually invests.

For example, if your company is raising $1 million dollars and has a minimum investment of $25,000, then your company is seeking 40 investors,

($1,000,000 / $25,000 = 40). For your company to get the 40 investors to invest, you will need to exposure 600 investors to your investment opportunity,

(40 x 15 = 600 investors).

Find out how many investors you will need to expose to your opportunity using this formula.

A = How much money are you raising?

B = What is your minimum investment amount?

A/B = C

C = Number of investments needed

C * 15 = Number of investors who need to be exposed to your investment opportunity

Now that you understand exactly how many investors need to be exposed to your investment opportunity, you can plan accordingly.

Investor relation campaigns expose, generate and promote investment opportunities to investors through strategic planning of your company’s investment opportunity. Activities to gain exposure include:

? Participation in investor events

? Customized investor events

? Press releases and promotion

? Direct mail campaigns to investors

? Email marketing campaigns to investors

? Investor phone calls

? Web marketing

? Investor interest articles

? Public online investment portals

? Private secure online investment portals with confidential investment information and due diligence documents

Investor relations campaign should include the following:

? Simplified method to communicate opportunity to investors so they will take the time to learn enough about the opportunity to be enticed to invest more time in learning more.

? Combination of group presentations and one on one investor meetings to provide an opportunity for the client to “tell their story”

? Passive marketing to the interest areas of the investor community through email, press releases, and interview on radio and TV broadcasts.

? Direct Mail to reach those investors that do not respond to other means of communication, targeted based on geography and industry preference.

? System to capture investor interest and respond accordingly

? Ongoing communication strategy to communicate updates to investors so they can see the progress and move a semi-interested investor to an interested and motivated investor

? A centralized point of information so that no matter how the investor first hears of the opportunity they have a source of information they can go to.

Learn more at www.launchfn.com