I am writing to you to invite you to a special StartupLounge-sponsored event, Startup Spring Fling 2012. We are on the host committee for this event, spearheaded by 151 Locust, a privately-funded, subsidized coworking space for tech companies. The name of the game of this event is FUN. The event runs from 4:30-10:30 pm in Avondale Estates on Friday, May 4th. We’ll have live music, a beer garden, food trucks, games, and a section of Avondale Estates roped off for our personal use. The goal is to offer an event that is not so much focused on pitching as it is on helping build relationships and startup fellowship in a relaxed environment.

There are no applications for this event. You pay up ($10 for 2 drinks and 2 food items), sign up and show up. We and others on the host committee agreed that it is important to put an event on the startup calendar in Atlanta that is open as well as fun. As you know, most of StartupLounge’s events have been invitation-only. Potential attendees had to apply to get in. This trend has continued with many of the more widely-attended and well-known startup networking events in Atlanta. We are delighted to offer this more inclusive opportunity, and if people like it, we’ll keep doing it in future years.

So that’s it. Many of you aren’t on the StartupLounge mailing list and I’ve singled you out as people that I think would have a great time, may reap some professional benefit, and whom I would personally love to see next Friday evening. http://startupspringfling.org/

As small business owners, you’ve weathered the startup roller coaster ride and now have (hopefully) a business that generates good net income and cash flow. What constitutes “good” depends on the individual. For one person “good” is sufficient funds to fund your lifestyle and support your family while, for another person, “good” is sufficient monies to fund significant growth and expansion. Whatever is “good” for you and your business, harnessing your creativity can help you get there.

Sometimes business owners sell themselves short when it comes to creativity. Creativity is not just producing wonderful graphics or great marketing campaigns or inventing new products. It’s looking at old things from a new angle, applying ideas from one industry to another, and pursuing business from a different perspective. When you seek out and find programs that pay for interns when your hiring budget is tight, that’s using creativity. When you pursue partnerships with other entities in complementary fields to provide a full service suite of offerings to existing and potential clients, that’s creativity in action.

After reading all of this, if you still think, “I don’t do any of that” then you may need an innovation/creativity boost. Participating in small business groups or CEO roundtables may help you. Or consider hiring a business coach or innovation consultant. Although small business owners can sometimes be loathe to hire consultants, the reasons so many corporations do is because consultants produce results. When you have an issue that requires a solution, reach out to someone who excels in the area of expertise in which you’re having trouble. Even though that person or company may seem expensive, when you do a cost/benefit analysis, they are generally very cheap. If you are stuck in a creative rut, an innovation consultant may be just what you need to get out.

Whether you own a restaurant, dry cleaners, carpet store, medical practice or any other business that serves the general public financing a business is problematic in today’s economic environment. Traditional banks are not prepared to grant working capital loans to the well established business, let alone provide capital to start a new business. The bank’s security requirements are such that the business owners might just as well look to their personal resources or private capital sources. Over the decades it has been frequently said that banks only lend to those that don’t need a loan. This observation has never been more accurate than in today’s economic environment.

Most businesses need working capital to grow and prosper. The axiom “when you stop growing you start dying” is not far from a fact for many entrepreneurs. So where does one find access to working capital or a loan to start a business. The good news is that difficult economic conditions have fostered non-traditional funding sources that fill the void that the banks have found it necessary to create.

For instance, The Small Business Administration made sweeping changes to its loan programs in late 2010 and 2011 as a result of the U.S. Government’s focus on economic stimulus. Expanded lending criteria, low equity requirements and streamlining of the application process have served to make SBA financing not only a viable source of capital, but the small business’s preferred financing choice. The lending limits are now $150,000 to $5 million. SBA will finance working capital, furniture, fixture and equipment, purchase /refinance of the business’s commercial real estate or a combination of all of these needs at up to 90% of the cost with interest rates currently as low as 5.25% with terms up to 25 years. And yes, under certain conditions they will approve a loan to start a new business. SBA requires one new job be created by the business for every $50 thousand loaned. Some might say that this makes more sense than any other street level economic stimulus initiated by the administration so far. Supporting small business and creating new jobs in the process is an obvious assistance to economic growth.

Unsecured lines of credit (ULOC) up to $150 thousand are available to business owners with personal credit scores above 700 and no recent derogatory entries on their credit report. Interest rates on this program are surprisingly low particularly considering there is no income verification required and no financial statement or tax return requirement. These loans are approved based on the strength of the borrower’s ability to manage a business and their good credit. This is an ideal capital scenario for a start up business or franchise purchaser for several reasons. The maximum loan is $150,000 to each borrower legally associated with the new business. Family members, associates or partners with excellent credit might consider participating in a business for a negotiated interest in the future profits. This works exceptionally well for national and local franchise purchases because the lender will finance up to 90% of the franchise cost. The repayment structure is identical to a home equity line of credit where the monthly payment is based upon the actual amount outstanding, not the total maximum credit line available. To make it even more palatable for the start up business the lenders recognize that the business is not likely to generate much profit in the early stages so there is no interest charged in the first six months and there are no upfront fees. This is obviously not a bank loan. It is funded by institutional and private investor sources.

For quick and easy capital for almost purpose, many businesses find Merchant Credit Card Advance programs their most practical solution. These programs do not actually lend capital. They advance funds up to 200% of the average of the merchant’s previous four to six months of credit card receipts. What makes this source popular is that there are no upfront fees, no personal liability and no credit score or personal financial requirements.

Repayment is accomplished through a small percentage of future daily credit card receipts. There are no closing fees and it is affordable. The basic requirement is that the business has been in existence for six months and has a minimum of $5,000.00 credit card charges per month.

When the business owner looks beyond the local banks and traditional lending sources, there is a new world of capital resources looking for an opportunity to lend their money at reasonable terms. As always, the cost to the merchant comes down to risk verses reward. Even so, those with credit issues or marginal track records do not have to resort to the exorbitant cost of hard money lending to grow and maintain their enterprises.

For comprehensive insight into real estate and mortgage matters please visit http://onlinemortgageresources.com. Michael Roche the author of this article is a principal of American Capital Investors Group representing a consortium of private and institutional investors throughout the United States. Michael, with thirty years of direct lending experience, directs small businesses through variety of solutions to their financing and capitalization needs. Contact him directly to discuss how he can assist your business. Mikeroche01@gmail.com or 703-328-7475.

Article Source: http://EzineArticles.com/?expert=Michael_B_Roche
http://EzineArticles.com/?Financing-Your-Business—How-to-Obtain-Working-Capital-to-Grow-or-Start-a-Business&id=6586785

When you access a fair amount of credit for your business in your name – i.e., credit cards, SBA (small business administration) loans, other small business loans, equipment loans, supplier credit or guarantees, store credit, trade credit lines – each inquiry and any subsequent reported debt potentially drags your personal credit score down. Get too many inquiries or too much credit in too short a period of time and you could, at least temporarily, end up with a fairly low credit score.

So what do you do if you are just starting out and have not yet established credit? Or if you’ve been in business and barely incurred any debt and hence never really paid it much thought? Or perhaps you just assumed you’d have to leverage your personal credit score from here to eternity (or at least until your business was generating millions in income) before you’d be eligible to pursue loans or other debt based wholly on the company’s financial strength.

The answer: Pursue building credit under your EIN – employer identification number aka tax id number. You then have the opportunity to strengthen the credit profile of your company. Register with D&B (short for Dun and Bradstreet) and obtain a D&B number. Submit a copy of your company’s financials and any supplier or other trade references you may have. Whenever you apply for credit, make sure you include both your company’s EIN and your D&B number on the application even if the latter is not requested. Apply for smaller credit limits or apply for trade credit with entities you have relationships with  using only your EIN. The process of establishing business credit is very similar to that of establishing personal credit.  Just think back to how it was when you were in college and had no credit. I know it’s hard but try to remember. What process did you go through to build your credit report?

You had to get letters from utility companies. You had to ask your landlord to report your on-time rent payments to Equifax or Experian (or its predecessor). You had to initially settle for a $200 limit on a store credit card and work up from there. You had to get a $1,000 Visa card from your credit union backed/secured by a $1,000 certificate of deposit. You had to obtain a car loan with your parent or older sibling as a co-signer. Do you remember these types of activities? You didn’t just wake up with a strong credit history.

Well, you can do the same thing for your business. What’s the equivalent to the above from a business perspective? You get letters from your suppliers and send those letters on to Dun and Bradstreet or Equifax or supply them to the bank with which you are applying for a loan. If you are leasing, you ask your landlord to report your on-time rent payments to Equifax or Dun and Bradstreet. (Dun and Bradstreet is the primary entity for business credit and financial strength reporting but Equifax also has a business credit division.)

You apply for a low limit charge card from Home Depot, Lowes, Sams Club,Staples or other retailer that focuses on servicing small businesses. At the financial institution of your choice you take $2,000 or $10,000 or whatever you can spare and place it in a 6-month or 1-year CD as security for the secured Visa or Mastercard you obtain for the the same amount. You establish credit with Dell in the name of the company but with you as a personal guarantor (similar to a co-signer) to buy the servers and other computing equipment your company needs. After a year of on-time payments and/or periodic payoffs, you ask Dell to remove you as the guarantor. From this detailed description, you can see how similar the process of building credit is.

If you are using your personal credit to fund your business, you need to assess your personal credit if you haven’t already done so. There are numerous entities online that  provide access to your credit report and a few that even provide a free credit score. There is a federal law which requires all the credit reporting agencies – Transunion, Equifax, Experian – to provide you with a free credit report every two years. However if you want to see a credit score, you’ll have to pay them…and those entities don’t typically provide you with the same score your mortgage banker would see when you applied for a loan. See the impact of your business on your personal…and resolve to take some of the actions I’ve outlined above.

Bill Holt, Suntrust’s EVP Business Banking

The Climate for Small Business Capital in 2012

Click here to register!

1. Small Business access to capital in the current economic environment.
2. What small businesses need to do to raise capital in the current environment
3. Small business outlook for 2012 – 2014.

Bill Holt

Executive Vice President, Business Banking

SunTrust Banks, Inc.

Bill Holt joined Suntrust Bank in July 2009 as Executive Vice President Business Banking.

Bill’s prior experience includes Executive Vice President Wholesale Banking with Wachovia Bank, Executive Vice President – Wholesale Banking Group Chief Operating Officer and Executive Vice President – Executive Director of Business and Community Banking.

Bill Holt graduated from Furman University in Greenville, South Carolina with a Bachelor of Arts, Economics and Business Administration.

Asset Based Lending as a Financing Tool

By Kent Harlan

Many CFOs and other finance executives view asset based lending as a financing outlet of last resort. While that may sometimes be the case, such a view is a one-dimensional perspective. But as companies confront a tight credit market coupled with lower than expected results, many CFOs are viewing asset based lending as a viable option in the financing tool kit. Even successful companies with strong banking relationships can quickly fall out of favor with lenders and lose access to unsecured financing, especially if they’ve shown recent losses. A few bad quarterly results doesn’t necessarily mean that a company is in bad shape, but stringent bank underwriting parameters can cause existing loans to be called and prevent the firm from qualifying for new financing. A company facing such a scenario can use asset based lending (ABL) arrangements as bridge loans to pay off banks and provide liquidity until bank financing is achievable.

What is asset based lending?

Asset based lending can be an effective way to raise capital.

An asset-based loan is secured by a company’s accounts receivable, inventory, equipment, and/or real estate, whereby the lender takes a first priority security interest in those assets financed. Asset-based loans are an alternative to traditional bank lending because they serve borrowers with risk characteristics typically outside a bank’s comfort level. These assets typically have an easily determined value. The financing can take the form of loans to revolving credit lines to equipment leases and can range from $100,000 to $1 billion, depending on needs and circumstances.

How can ABL be a beneficial financing option?

Acquisition

To grow a business, a company may look to acquire a strategic partner or even a competitor. Asset-based financing is often an efficient means to obtain funding for business acquisitions.

Turnaround Financing

Turnaround financing is often used by under-performing businesses that are not achieving their full potential. In some cases, it is used for businesses that are either insolvent or on their way to becoming insolvent. Asset-based lenders are accustomed to the bankruptcy process and asset-based financing is ideal for turnarounds because of its flexibility.

Capital Expenditures

Capital expenditure is the money spent to acquire and/or upgrade physical assets such as buildings and machinery. Capital expenditure is also commonly referred to as capital spending or capital expense.

Debtor-in-Possession (DIP) Financing

Debtor-in-possession (DIP) refers to a company that has filed for protection under Chapter XI of the Federal Bankruptcy Code and has been permitted by the bankruptcy court to continue its operations to effect a formal reorganization. A DIP company can still obtain loans–but only with bankruptcy court approval. DIP financing, which is new debt obtained by a firm during the Chapter XI bankruptcy process, allows the company to continue to operate during a reorganization process. Asset-based lenders also provide exit financing or confirmation financing to companies coming out of bankruptcy.

Growth

Typically, as a company grows so does its need for financing. Also, as a company’s collateral grows, its assets can strengthen its ability to borrow. An experienced and creative asset-based lender can assemble a credit facility that can scale to grow with a company.

Recapitalization

Recapitalization is the process of fundamentally revising a company’s capital structure. A company might recapitalize due to bankruptcy or replacing debt securities with equity in order to reduce the company’s ongoing interest obligation. A leveraged recapitalization typically achieves just the opposite–by taking on a material amount of debt, the company increases its ongoing interest obligation but is able to pay its shareholders a special dividend.

Refinancing/Restructuring

When a company enters or exits a growth stage, refinancing or restructured financing may be key to creating a capital structure that better meets the needs of the company. This type of financing is often used for market expansion, completing an acquisition, restructuring operations, or following a successful corporate turnaround.

Buyout

A buyout is the purchase of a controlling percentage of a company’s stock. In a leveraged buyout (LBO), the acquiring company uses the minimum amount of equity to purchase the target company. The target company’s assets are used as collateral for debt, and its cash flow is used to retire debt accrued by the buyer to acquire the company. A management buyout (MBO) is an LBO led by the existing management of a company.

What are the advantages to ABL?

· Tends to feature fewer covenants than other types of financing and those it does include tend to be more flexible. Cash flow loans, by contrast, often have four or five covenants including total leverage, fixed charge coverage, and minimum net worth.

· If a company is growing, the receivables and inventory it uses to secure the asset based loan is likely growing as well. Thus, the company has a greater collateral base and can borrow funds to fuel its growth.

· ABL instills discipline. Since the loans are based upon accounts receivable and inventory, the company is motivated to improve collections and complete the production cycle in a timely manner.

· As mentioned earlier, ABL imposes less stringent covenants compared to cash flow loans. These type of loans also provide better security to the lenders, which in turn allows them to grant more time to the borrowers to turn their company around in difficult times.

What are the disadvantages of ABL?

· Since the level of funding is contingent upon the asset values on the balance sheet, there may not be sufficient liquidity. Only asset rich companies would likely benefit, while many service companies would not.

· Such a requirement can be difficult for the company.

· Asset based lending tends to be more expensive than other types of financing, often three to five percentage points above traditional bank financing.

· ABL runs counter to the thinking of a lot of CFOs who believe it is dangerous to tie short term assets to long term financing.

Although ABL is now a common financing tool, it is not for everyone. It makes sense to explore all types of financing before deciding if asset based lending is the right choice. The CFO must review the state of the company’s credit, analyze the firm’s asset structure, and its current debt load. Asset based lending can provide the liquidity needed for the company to grow until less expensive bank financing is available.

Kent Harlan has been a CPA since 1984 and has provided consulting, accounting and financial services to several industries. He is the owner of Ozarks Capital Funding, LLC, a Springfield, MO based company offering financing in the areas of accounts receivable factoring, equipment leasing, asset based lending, and healthcare provider financing. Website: http://www.ocflink.com

Article Source: http://EzineArticles.com/?expert=Kent_Harlan

http://EzineArticles.com/?Asset-Based-Lending-as-a-Financing-Tool&id=289296

Types of Working Capital – Opportunities Do Exist In a Difficult Business Lending Environment
By Neal Coxworth

Tightly manage your cash to build your business.

In today’s restricted lending environment, many types of working capital that was available only a few short years ago have been severely curtailed. Many of the larger commercial banks are “sitting on their hands” taking advantage of the cheap money provided to them under different government programs and not necessarily lending this money back out to the small businesses that have acute working capital needs.

Despite the fact the government has increased its support for the Small Business Administration or SBA, this option is still extremely hard to qualify for given today’s lending restrictions. Because many businesses are considered “credit challenged” due to the downturn, it has become increasingly difficult to replace lost lines of working capital cash that banks were previously clamoring to sign businesses up for.

However, there are a few types of business loans that may be available, even if you or your business has less than perfect business or personal credit. The key to many of these loans is to have a decent credit card processing volume, a decent cash flow that is provable with bank statements, or both. These so-called merchant cash advances, which advance an amount against your future credit card receivables, are hallmarked by high rates and fees.

On the flip side, these cash advances are short term loans that last no longer than 12 months, with payments being made daily out of credit card proceeds. They also can handle difficult credit situations that many banks and business loan companies would not even consider. Keep in mind you may need to switch processors and/or pay upfront fees as a condition of receiving this type of working capital cash.

There is also a new, more cost effective option called a credit card receivable loan that can handle businesses with a predominantly cash or credit income stream and features rates that can be as much as 50% less than a comparable cash advance with no upfront fees or requirement to switch credit card processing companies, but can also handle the credit-challenged business that needs a working capital term loan that is both cost effective and flexible.

Hopefully, this brief overview if the different types of capital will get you thinking in some new directions that don’t involve getting told “no” at your local bank. Want to know more about affordable working capital term loan alternatives? Click below now.

Neal Coxworth is an entrepreneur and a 17 year veteran of the consumer credit industry with experience in originating, underwriting and processing mortgage, student and consumer credit loans.

IF YOUR BUSINESS NEEDS WORKING CAPITAL NOW, CLICK BELOW:

Types Of Working Capital

Article Source: http://EzineArticles.com/?expert=Neal_Coxworth

http://EzineArticles.com/?Types-of-Working-Capital—Opportunities-Do-Exist-In-a-Difficult-Business-Lending-Environment&id=5931125

According to its website, “IGNIA is an impact investing venture capital firm based in Monterrey, Mexico that supports the founding and expansion of high growth social enterprises that serve the base of the socio-economic pyramid in Latin America.” IGNIA invested MXN 44.0 million or $3.3 million US in Provive.  According to the press release dated Nov. 8, 2011 Provive is “an innovative business that acquires, refurbishes and sells foreclosed houses in low-income housing developments while working with communities to reestablish active neighborhood participation in its revitalization process.” Provive is a Mexican for-profit company dedicated to impacting the communities it works in. IGNIA also “empowers entrepreneurship and generates social impact while creating attractive financial returns for its investors. For more information, visit http://www.ignia.com.mx.

What this says is that even for capitalists with strong social leanings, there is money for investing and growing companies. More on this later as I had a conversation today with an entrepreneur friend of mine who just did competitor research for a company she’s working with. She identified 3 more socially responsible investment funds that I’ll share later.

Balance Sheet Analysis – Working Capital
By Lucy Rudnicka