Month: October 2016

Cash Flow, Growth Money, Business Funding Beyond the Banks

The number one reason for business failure in the U.S. today is lack of working capital!

Businesses need money to grow. A business cannot survive just because it has a better product, an exclusive market or the best method of distribution. Funding in the form of working capital and cash flow is required for progress!

But where does a business go when the bank says no?

Asset-Based Lending – What Is It and How Can It Help?

The asset-based lending industry helps a business to leverage its “liquid assets” (most commonly accounts receivable, i.e. invoices/contracts, purchase orders) and gets cash to the business much faster than traditional sources.

As a result, the business has this cash for day-to-day operating expenses — when it is needed – rather than having to wait. Then, the business can do what it does best – it’s business – and produce the best quality product and/or service while escaping the, “Is the check in the mailbox?” syndrome so many businesses encounter.

One of the differences between the asset-based lending industry and banks/traditional sources is this industry looks at the company or business PAYING the invoice, bill or contract for its security as opposed to the credit history, cash flow and time in business of the business issuing the invoice.

Unlike traditional sources, asset-based funders do not have a “commercial lending section” to handle all business funding requests. Rather, there are specific funders who specialize in construction, manufacturing, the trades, professional fields such as engineering, medical, etc. They know that “one size” does NOT fit all when it comes to business funding needs.

Asset-based lending has always been available to “big business” but is just recently becoming utilized by “small business.” The business world has begun to realize what the SBA has been saying for a long time, “The total of small business is larger than big business,” and wants to tap into this gold mine.

Banks, realizing it is in their best interest, oftentimes send clients they are unable to help to asset-based lenders. Then, when the client has the financials the bank needs, their friendly banker who referred them to the asset-based lender can re-enter the picture.

Asset-based lenders also work in conjunction with an already established banking relationship. However, they are able to be much more responsive to the urgency of a businesses cash needs to take advantage of profit opportunities when they present themselves. For example:

Right after Katrina, a purchase order funder in the asset-based lending industry was able to help a power company fulfill a $2.2M order from the USACE. The power company’s bank was not able to process their funding request fast enough and they were about to lose the order. The purchase order funder took the application on Wednesday and the order was being shipped by Friday of the same week. The power company was able to fill that order and other future ones due to the speed with which they were able to get the funding they needed.

When evaluating an asset-based funding deal, the cost of this funding should be considered in the context of the benefits to be received rather than on a stand-alone basis. Compared with other financing alternatives, asset-based lending is very cost effective and efficient and is there “when” you need it to take advantage of profit opportunities in the market such as we now have in Louisiana, post-Katrina.

As an example, we all want to shop at Wal-Mart (banks) and get the most for our dollar. However, Wal-Mart is often crowded, takes too long, or is not close enough if we live in smaller communities. So, we pull into the convenience store or other smaller, boutique-type merchant (asset-based lenders) where we know we can get what we need right away, when we need it, even though it might cost a little more. When a business needs funding, it NEEDS it then and not later!

Russell Handley, owner of a communications company in Newburgh, NY installs cable lines for large cable companies. It is standard for these firms to take as long as 90 days to pay bills. So, Handley uses factoring on occasion and gets his money quickly for his invoices that allow him to take on more work. In fact, he credits factoring with having helped him increase his annual revenue from $500,000 to nearly $4 million in seven years. “We wouldn’t have grown as fast as we did without it,” he says. (Pofeldt, Elaine. “Raising Capital.” Success May 1999.)

Some of the most commonly used options available through asset-based lenders are:

1) Accounts Receivable Factoring

2) Purchase Order/Contract Funding

3) Business Credit Card Receipt Advances

4) Equipment Leasing

So, in the future, “If Your Bank Says No,” why not check out the options offered by the asset-based lending industry.

Copyright (c) 2006 Cash Flow Connections

Rule of Four – What You Need to Know About Small Business Financing Credit Cards

Money is not everything. There are travelers’ checks, money orders, and credit cards. When you start your own business, there’s a way for you to obtain much-needed capital, too. This way is called small business financing credit card.

Small business financing credit card, also known as small business starter credit cards, is a great way to keep your personal and business finances separate.

Personal Credit Card Versus Small Business Financing Credit Card
In the past and even at present, lots of entrepreneurs rely on their personal credit to get their business up and running. The problem with this is that they carry the debt from their business into their personal credit cards. Ultimately, they end up hurting their personal credit scores.

This is where small business financing credit cards come in. They offer higher credit limit. Additionally, they keep business and personal expense separate, thereby making it painless to track tax deductions. More importantly, you may write off your small business financing credit card’s finance charges and annual fees.

Why Get a Small Business Financing Credit Card

1. Build Credit

A small business financing credit card is a good way to build a financial history. Your business is a start-up; it’s unknown. This makes it difficult for your business to obtain loans. A small business financing credit card will remedy this. It will provide banks with the spending footprints they need to reassure themselves you’re a responsible borrower.

2. Avoid Intermingling

When it comes to managing your expense, there’s one thing you should always do. Segregate, segregate, segregate. Do not mix business and personal transactions. This might later on create tax and money management problems.

3. Prevent Shoebox Accounting

It is always a nightmare to track business expenditures. With a small business financing credit card, however, you can turn the nightmare into one you can easily snap out of. Your credit card company will provide you with a year-end statement where you can find your transactions summarized, itemized, and categorized. With such a report available, there’s no need to keep a shoebox stacked with receipts.

4. Special Rewards

The credit card industry is so competitive providers fall over themselves to lure borrowers. Accordingly, a reward and discount program for small business credit card users was developed. Every time you use your small business financing credit card, you qualify for discounts and rewards, ranging from office supplies and plane tickets to phone services.

How to Manage Your Small Business Financing Credit Card Effectively

Credit cards, whether personal or corporate, will always be open to potential abuse. Effectively manage your small business financing credit card by:

1. Limiting card hopping

Sure, you qualify for multiple cards, but this does not mean you should sign up. You shouldn’t. This will only tempt you to overspend. It will hurt your credit rating, too.

2. Steering clear of cash advances

Never use this credit card feature unless you need to bail yourself out of jail. It comes with whooping credit card fees and interest costs.

3. Avoiding late payments

The more delinquent your payments are, the higher the fees and interest rates you would be saddled with. Moreover, late payments hurt your credit reputation.

4. Using grace

Many companies offer a 21-day grace period to clients before asking them to pay for purchases. Turn this to your advantage by drawing up a schedule of your purchases and payments.

Use your small business financing credit card prudently. Remember, credit cards should be a financial safety net, not a trap.

Big Ticket to Wealth – Legitimate Make Money Business Or Not?

Are you longing for a life change and have the desire to start your own business from home? Whether you’re new to internet marketing or a seasoned marketer looking for the next big thing this article will help you decide if Big Ticket to Wealth is a legitimate opportunity or another fly by night network marketing company.

Big Ticket to Wealth was created and founded by Gerald Van Yerxa. Gerald has over thirty years experience in the network marketing field. He also has owned a chain of Radio Stations in the past.

Gerald decided to form Big Ticket to Wealth so that the average Joe would have a much better chance of having success with an online business. His goal is to create a company that will have a success rate that will power over the rest of the online world.

Big Ticket to Wealth has a compensation plan that is different from the rest of the online marketing programs. The difference is the company issues out matching bonus overrides. To explain this in a simple form when someone on your team makes a sale you will get rewarded with the exact same amount. If Tim who is on your team makes $900 dollars you will also then make $900 dollars. This is an industry first and until now how never been done before.

Big Ticket to Wealth offers 3 different levels that you can become a member with. Each level has its own commissions and matching bonus overrides. Members will also get a residual income from the people that are on their team. The monthly fee that everyone pays is $75. Out of the $75 dollars $50 will go to the members sponsor and $25 will go to Big Ticket to Wealth. This is a great secondary form of income for the companies members.

Here are the levels that you can join Big Ticket to Wealth at: National for $797, Executive for $1197, Presidential for $1997.

To conclude Big Ticket to Wealth is a real business opportunity that has a dedicated CEO with over 30yrs experience in the trade. The company has legitimate products and a very unique compensation plan making it possible for the average Joe to create a successful business online. My recommendation is to further investigate this opportunity to see if it’s right for you.

Ways to Get Out of Credit Card Debt

Credit card debt is something that almost everyone suffers from, but it need not be a problem you have to suffer from the rest of your life. As long as you have the discipline to tighten your belt and manage your finances, credit card debt can soon be completely and permanently eliminated from your life.

Ways to Get Out of Credit Card Debt

Getting out of credit card debt is a slow and gradual process. It’s not something you can immediately cut off from your life. Be patient and diligent, and your efforts will pay off sooner later.

Step #1 Determining the Best First Step

In a practical point of view, the best credit card debt to tackle first is the one charging you the highest interest rate. Even if it doesn’t have the highest amount consumed of its limit, it’s still what you should start paying off first because it presents the greatest possible risk to yourself.

Some people, however, prefer to pay off the lowest total amount due on their credit cards first. Although this is not the most practical thing to do, mathematically speaking, it could still be a good choice for your first step if seeing your credit card statement reflecting zero debt could give you the boost you need.

The important thing to remember here is to take that first small step forward in cleaning your credit records. It’s going to be tougher, but at least you’re finally breaking free from the shackles of debt.

Step #2 Establishing a Budget

Take a long, good, and hard look at your finances. Trace your cash flow every month. How much are you earning all in all and how much you’re spending? Obviously, the inflow of cash should be greater than the outflow. If it’s not, you’ve got a bigger problem to solve.

List down your monthly expenses and then consider each item one by one. Which are necessities and which ones are mere frivolities? Necessities should be left alone, but frivolities must be reduced. While you don’t have to ruthlessly get rid of all the unnecessary things in your life, it’s important that you significantly reduce them to make way for the bigger payments you’ll be making for your credit card debt.

When you know how much you can afford to pay each month, make sure that a considerable amount of it will be used for settling the first credit card you’ve decided to pay off. The rest should be divided equally among your remaining credit cards.

Step #3 Controlling the Urge to Swipe

Don’t compound your problems by continuing with your swiping habit. There’s no way you can get rid of credit card debt if you continue using your credit cards, after all. For now, you should stick to paying cash for both necessities and luxuries.

Step #4 Change of Lifestyle

Lastly, make the needed adjustments to your lifestyle so that you can continue living within your budget. There are a lot of things you can change to live frugally, and we’ll leave it up to you to determine what you can and can’t live without.

Soon, you’ll find yourself liberated from your credit card woes. Unless you want to become a victim of a vicious cycle of never ending debt, make sure you don’t commit the same mistakes you did in the past.