2014 Finance Conference

2014 Finance ConferenceOn March 21st, I will be a guest speaker at the 2014 Finance Conference in Raleigh, North Carolina, to help entrepreneurs and startups better understand how to utilize business loans and lines of credit for their small businesses. The business loan application process can sometimes seem intimidating, which is why I want to make sure business owners have the tools necessary to navigate the many opportunities available.

The conference will connect participants with other speakers to ask questions about business finance opportunities and learn how your business can become a solid competitor in the small business space. This event is open to everyone, but registration is required due to limited space. Please contact my office at 770-249-2357 to reserve your spot.

I am committed to helping small business owners succeed. Whether you are just starting out or hoping to grow an already successful business, my office can guide you on how to obtain and best utilize various financial resources to reach your goals.

We can provide an introduction to the business lending process as well as a variety of other services including business consulting, franchising and exporting opportunities. We can help you understand the various programs available to businesses depending on size, industry type and location.

Supporting small business owners so they can thrive is our top priority. Starting a business from scratch is a huge challenge with great potential reward, but those who undertake that challenge can sometimes feel like they are doing so alone.

My office is here to help entrepreneurs looking to start or grow their businesses. These businesses are vital to the overall economy and to our communities, and we want to make sure you have the tools you need to succeed.

Please contact my office if you’d like to attend the Finance event on March 21st. If you cannot attend but would like more information about the various finance options available from Triton, give us a call at 770-249-2357.

La Mancha Sims is the Founding Partner and CEO of Triton Financial Solutions, a business funding consulting firm located in Atlanta, Georgia. You can reach La Mancha at 770-249-2357.

 

Posted in Alternative Lenders, Alternative Lending, Business, Business Conferences, Business Events, Business Financing, Business Ideas, Business Lines of Credit, Business Loans, Business News, Business Startups, Business Tips, Conferences and Events, Customer Development, Entrepreneurs, Entrepreneurship, Events, Finance, Small Business, Small Business News, Start-ups, Startups, Success | Tagged , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

Is There a Franchise in Your Future?

Have you thought about starting a business, but have no idea where to begin?  If so, perhaps you should consider buying a franchise.  There are several reasons why buying a franchise can be a better option for new entrepreneurs.  In many cases, franchising can be less of a risk than starting a brand new business.  Below are only a few of the advantages to becoming a franchisee instead of starting a business from scratch:

    • A franchise already has brand recognition and is a proven business model.  As a franchise owner, you will also have corporate support.
    • Franchises already have an existing customer base that will be very familiar with your product or service.
    • Franchises already have a built-in marketing plan to attract new customers, a plan in most cases already well-established by the franchisor.
    • There are numerous franchise opportunities available in a variety of industries, such as restaurant chains, tax services, learning centers and even fitness clubs.

The decision to become a franchise owner is just the first step. One of the most important decisions is to evaluate franchise opportunities and select one that best suits your needs as well as one that can provide a good income for you and your family. There are numerous online resources where you can find more information, such as the International Franchise Association.

Once you decide which franchise opportunity is best for you, contact Triton and we can provide you with funding options.  Get started today!

La Mancha Sims is the Founding Partner and CEO of Triton Financial Solutions, a business funding consulting firm located in Atlanta, Georgia. You can reach La Mancha at 770-249-2357.

Posted in Business, Business Ideas, Business Loans, Business Startups, Business Tips, Credit, Economics, Entrepreneurs, Entrepreneurship, Franchises, Franchising, Small Business, Small Business News, Start-ups, Startups, Success, Women | Tagged , , , , , , , , , , , , , , , , , , , , | 1 Comment

When Banks Won’t Lend, There Are Alternatives, Though Often Expensive

We wanted to share this great article originally published in the New York Times.

By Ian Mount
Published August 1, 2012
New York Times

After years of a small-business credit crisis, conditions seem to have improved. But with the economy still struggling and new regulations meant to eliminate bad lending, bank loans continue to lag.

“The days of yesteryear when you could go to your corner bank are over,” said Kenneth Walsleben, who teaches in the entrepreneurship and emerging enterprises department at the Whitman School of Management at Syracuse University. “Small, emerging, growing businesses have few traditional sources to turn to. You have to get a little creative.”

Some creative alternatives have been around forever; others emerged during the crisis. Almost all are substantially more expensive than traditional bank loans, which is why they have been sources of last resort. But as demand for alternative options has increased, some prices have come down. This guide, based on conversations with lenders, brokers and business owners, suggests which products make the most sense for different types of businesses.

Asset-Based Lending

HOW IT WORKS. Companies sell their receivables, or invoices, to a factoring company, which gives the companies 80 to 90 percent of the value upfront and the rest when the invoices are paid off. Some lenders offer loans based on a company’s purchase orders, contracts or inventory.

WHO USES IT. Business-to-business companies that cannot wait for payment and especially troubled companies, because an invoice factor depends on the client’s ability to pay, not the borrower’s solvency. Purchase-order, contract and inventory loans require more creditworthiness from the borrower. “If you’re in the office supplies business and you get an order from Staples, you can use purchase-order financing, and it can level the playing field,” said Neil Seiden, managing director of Asset Enhancement Solutions, a financial adviser in Port Washington, N.Y.

COST. Purchase-order financing costs 4 to 5 percent monthly; factorers usually charge an effective annual interest rate of 18 to 30 percent, said Mr. Walsleben, who is also a co-owner of the Hamilton Group, a factoring company.

SUPPLIERS. Liquid Capital, the Interface Financial Group, Triton Business Solutions, Simplified Leasing, Rosenthal & Rosenthal and scores of other firms offer factoring and other asset-based lending services. Many are members of the International Factoring Association trade group.

Lease-Back

HOW IT WORKS. A company sells its real estate or equipment for cash and simultaneously leases it back.

WHO USES IT. Healthy companies with warehouses, manufacturing locations or other properties that hold value that could be put to use elsewhere. The borrower sells at market value, usually the average of several appraisals, and leases the property back at the market rate for 10 to 25 years.

COST. The lease-back adds a monthly lease payment where previously there was none. Companies get less value from equipment than real estate because, unlike real estate, equipment depreciates over time, and lenders tend to value it at what is known as forced liquidation value, a lowball price based on what it would fetch at auction. Equipment lease-backs can create tax burdens as well. “If I own a press outright for 10 years and it’s worth $1 million, but it’s on the books for $250,000, and I sell it for $1 million, I’ll have to pay tax on a gain of $750,000,” Mr. Walsleben said.

SUPPLIERS. AIC Ventures, W.P. Carey, Calkain Companies and many others. Borrowers can search on the Commercial Finance Association trade group’s Web site.

Cash Advances

HOW IT WORKS. A business receives a lump sum from a lender, which then takes a percentage of the business’s daily card receipts until the loan, plus a predetermined fee, is paid.

WHO USES IT. Restaurants and other retailers. Business-to-consumer companies generally have more limited financing options because they do not have wholesale invoices to factor or factories to borrow against.

COST. Twenty percent and up, but highly variable.

EXAMPLE. When he needed money last year to cover utilities and taxes during the slow winter months, Dennis Sick, owner of the Mohegan Manor restaurant in Baldwinsville, N.Y., took out a $45,000 advance on credit card receipts. The lender said he would take 13 to 18 percent of Mr. Sick’s daily credit card sales until he had received $64,000, which would take 12 to 15 months and give him an annual rate of 60 to 75 percent. But Mr. Sick ended up paying the $64,000 in seven months, giving the lender an annual return of some 130 percent.

SUPPLIERS. AdvanceMe, RapidAdvance and many others. The North American Merchant Advance Association trade group gathers many providers.

Nonbank Loans

WHO USES IT. Seasonal businesses, microbusinesses and other businesses that cannot meet bank requirements.

HOW IT WORKS. Lighter Capital, a revenue-based finance company in Seattle, offers loans of $50,000 to $500,000 to small businesses with high gross margins. The borrower pays Lighter Capital 2 to 8 percent of its monthly revenue until the repayment amount is reached, and usually gives the lender warrants for 1 to 5 percent of the company. The country’s 400 or so nonprofit community development financial institutions, on the other hand, fill the role of small community banks, lending to microbusinesses. “Our clients are supplemental income businesses, like cupcake trucks and Main Street businesses whose lines of credit got called,” said Claudia Viek, chief executive of the California Association for Micro Enterprise Opportunity, a network of California C.D.F.I.’s.

COST. Lighter Capital’s chairman, Andy Sack, said the cost of obtaining financing from his company was around 20 percent annually. Ms. Viek said she expected California C.D.F.I.’s to make some 2,000 three- to five-year loans of up to $50,000 this year, at an average interest rate of about 8 percent. The rates can go as high as 14 percent.

EXAMPLE. “In the past, we would go to the local bank and get loans on signature,” said Christi Riggs, 40, co-owner of Lone Star Linen laundry service, based in Taylor, Tex. When the bank said no, Ms. Riggs took out a loan from On Deck Capital, a New York-based company that analyzes business performance data — cash flow, credit, even social media information — to review loan applications from small businesses. Once granted, the loans, up to $150,000, are repaid through automatic daily bank account withdrawals, much as a merchant cash advance works. The short-term loans, typically for three to 18 months, charge an annual rate of 18 to 36 percent, said Noah Breslow, chief executive of On Deck. Ms. Riggs ended up paying $27,750 on a six-month loan of $25,500, or an annual rate of about 35 percent.

SUPPLIERS. Lighter Capital, On Deck Capital, Kabbage and others. Many C.D.F.I.’s are members of the CDFI Coalition.

Peer-to-Peer Loans

HOW IT WORKS. Individual investors combine to lend money to small-business owners through online vetting platforms like Lending Club.

WHO USES IT. Small-business owners with good credit scores who need money to expand or to buy equipment.

COST. Depending on the owners’ credit ratings, annual rates can run from less than 7 percent to more than 25 percent. The loans are small, however, with a maximum of $35,000 at Lending Club.

EXAMPLE. When Hannah Attwood wanted to raise money to open a cloth diaper supply and cleaning service, she went to four banks. “They just kind of laughed at me,” said Ms. Attwood, 34, founder of Adore Diaper Service, based in Ventura, Calif. She applied to Lending Club on a friend’s suggestion, and within a week, 61 investors had jointly given her a three-year, $6,000 loan at 11.36 percent. She combined the loan with an equal amount of savings to buy industrial washers and dryers and cloth diapers.

SUPPLIERS. Lending Club and Prosper dominate the peer-to-peer market in the United States.

Originally published in the New York Times.

La Mancha Sims is the Founding Partner and CEO of Triton Financial Solutions, a business funding consulting firm located in Atlanta, Georgia. You can reach La Mancha at 770-249-2357.

Posted in Alternative Lenders, Alternative Lending, Business, Business Credit, Business Financing, Business Loans, Business News, Business Startups, Business Tips, Credit, Economics, Entrepreneurs, Entrepreneurship, Factoring, Finance, Small Business, Small Business News, Start-ups, Startups, Success, Veterans, Women | Tagged , , , , , , , , , , , , , , , , , , , , , , | 1 Comment

Is This The Golden Age of Invoice Factoring?

We think you will find the information in this article very useful. 

First Published December 16, 2013 by Don D’Ambrosio in Factoring Investors.

It’s usually during this time of year where you will find a bunch of business articles that reflect upon the events of the past year or take a stab at making predictions for the next earnings period whether it be quarterly or annually. Instead of following suit and subjecting you to the same old topic I would rather take a look at…

The present state of the factoring industry.

When you hear the term “Golden Age” of something it typically represents a period of great peace, prosperity and happiness. Usually we think of periods of history in Greek and Roman mythology when civilizations thrived in the arts, literature and science. Obviously it sounds like a stretch to associate invoice factoring with the historic cultural periods of the past, but think of where we are today compared to just a few decades ago.

In the past, invoice factoring was limited to a few select industries and was generally regarded as a last ditch effort for businesses to get cash for their survival. Compare that to today where invoice factoring is now one of the most widely used forms of business financing that is embraced by small local shops to multi-national corporations across the globe.

So what has led the acceleration and widely accepted use of invoice factoring?

First let’s start with the most obvious – business owners realize that cash flow is king and it is vital for growth. A company can be profitable on paper but if they do not have consistent cash flow to fuel operations and increase sales they will never make take their business to the next level.

Next, technology has made transacting business in the factoring industry simple. Think about what the internet alone has done for the growth of factoring.

Today, with just a computer, an internet connection and a multi use printer, you can perform credit checks, file UCCs, generate agreements, notify account debtors, wire funds, receive funds electronically and anything else that can be scanned, emailed or faxed. With a bank lockbox, you can receive paper checks that are automatically deposited to your account daily then scanned so you can view them online. It’s like having a designated accounts receivable person to handle all of your receipts. For us, transparency is everything and factoring software has also come a long way in a very short period of time.

Having a good factoring software program is vital for any factoring company. Why is it so important? Besides tracking all your invoices, a good factoring program allows clients to interface with the factor allowing them to upload schedules, check balances and run a multitude of reports for accounting and finance purposes. Having a solid factoring software program can be a very cost effective tool and keep clear lines of communication between the factor and client.

Finally, as the heightened popularity of invoice factoring continues, so is the acceptability from account debtors. At our company we are fortunate to work with many Fortune 500 companies that pay us on a daily basis. These account debtors represent many diverse industries such as energy, advertising media, governmental contractors and so forth. Our experience has been nothing less than favorable when notifying and verifying these companies. Many of the larger firms pay us directly through an ACH transfer and some even have specialized departments that deal specifically with factoring companies.

For full disclosure, not all companies are accepting of factors and yes, there are times when your team will have to roll up their sleeves to get an invoice approved and fully verified. As I’ve stated in previous articles, the amount of due diligence you perform is your call since each client is unique.

Only time will tell if we are in a golden age of invoice factoring but the future looks very promising. In the meantime, be bold, venture wisely and prosper.

Don D’Ambrosio is the president of Oxygen Funding, Inc., an invoice factoring company located in Lake Forest, California.

For more information, he can be reached at don.dambrosio@oxygenfunding.com or you can visit his company’s website at www.oxygenfunding.com.

Posted in Alternative Lenders, Alternative Lending, Business, Business Credit, Business Financing, Business Loans, Business News, Business Tips, Credit, Economics, Entrepreneurs, Entrepreneurship, Export, Exporting, Factoring, Finance, Franchises, Franchising, Invoice Factoring, Small Business, Small Business News, Success, Women | Tagged , , , , , , , , , , , , , , , , , , , , , | Leave a comment

How Too Many Credit Inquiries Can Hurt Your Credit Score

Credit Inquiry Blog Post ImageRecently, some of our prospective clients have become very frustrated because, even though they may have good credit scores, too many credit inquiries are preventing them from qualifying for the business loans or lines of credit they need to fund their business.  They are surprised that multiple credit inquiries can have such a negative impact on their credit scores. Hopefully this blog post will address some of these concerns.

What is a Credit Inquiry?

Whenever you apply for credit from any lender, retailer, auto dealership, mortgage lender, etc., you are authorizing the lender to ask (or inquire) for a copy of your credit report from one or all of the credit bureaus. Later, you may notice these credit inquiries listed on your credit report. There may also be businesses or lenders listed on your credit report that you do not know or did not directly give permission to receive a copy of your credit report. However, the only credit inquiries that count toward your Fair Isaac Corporation (FICO) scores are the ones that result from your applications for new credit.

Are There Different Types of Credit Inquiries?

Yes, there are two types of credit inquiries: hard and soft inquiries. A hard credit inquiry is when you are applying for new credit. A soft inquiry is when a lender pulls your FICO Score for marketing or other purposes, such as when a landlord or potential employer might pull your credit. Fortunately, soft credit inquiries have no impact on your FICO Score. Hard inquiries, on the other hand, only hurt your score if there are several in a short amount of time.

Why Does It Matter How Many Credit Inquiries I Have?

To lenders, if you have applied for or opened several credit accounts in a short period of time, you may represent a greater credit risk and the lender may be less likely to extend you a loan or line of credit. They may assume that you will be unable to repay these credit accounts and will eventually default, or that you have some type of financial hardship, such as health problems or a job loss that will make it more difficult to repay the loan.

Will Only One Credit Inquiry Affect My Credit Score?

The effect of applying for credit varies based on an applicant’s individual credit history. Typically, for most applicants, one credit inquiry will take less than five points off the applicant’s FICO score. Credit inquiries can have a greater impact if the applicant is a young person with a shorter credit history, or if the applicant simply does not have a lot of credit experience. Large numbers of credit inquiries, however, means greater risk for the lender. Some studies have shown that people with six or more credit inquiries on their credit reports are more likely to declare personal bankruptcy than people with no inquiries.

What is Rate-Shopping?

Bankrate.com defines rate-shopping as “Applying for credit with several lenders to find the best interest rate, usually for a mortgage or a car loan. If done within a short period of time, such as two weeks, it should have little impact on a person’s credit score.”

What Can I Do to Limit the Impact of Credit Inquiries on My Credit Report?

If you need a loan or line of credit, make sure you do your rate-shopping within a short period of time. FICO scores distinguish between a search for a single loan and a search for many new credit lines, in part by the length of time over which inquiries occur. Also, do not give permission for a lender to obtain a copy of your credit report if you are not yet ready to make a purchase.

Credit inquiries are only a small measure of your overall creditworthiness, but still very important.  People with high FICO Scores regularly pay their bills on time, keep their credit utilization (debt-to-credit ratio) low on credit cards and other revolving credit lines and apply for (and open) new credit accounts only when needed.

La Mancha Sims is the Founding Partner and CEO of Triton Financial Solutions, a business funding consulting firm located in Atlanta, Georgia. You can reach La Mancha at 770-249-2357.

Posted in Business, Business Credit, Business Financing, Business Startups, Business Tips, Credit, Entrepreneurs, Entrepreneurship, Finance, Small Business, Start-ups, Startups, Success | Tagged , , , , , , , , , , , , , | 1 Comment

Why Marketing is So Important for Your Small Business

Marketing is a broad term that involves many activities, including advertising, promotions and public relations. The success of a small business depends on the business owner’s ability to market their products and services effectively. You may have a great product and stellar customer service, but if people don’t know your business exists, you are not going to have any sales. Your marketing efforts are important to keep your small business afloat. It gets the message out to potential clients and entices them to give your business a try.

Here is how marketing can help your business thrive:

Marketing Helps Enhance Company Prestige

Brand name recognition is enhanced after successful marketing efforts. Audiences can easily recall your products or services and develop expectations of high quality and excellent customer service from your company. As long as you manage to uphold these expectations, you will have a successful business. Communicate with your clients and customers regularly and listen to them to ensure your branding efforts are effective.

Marketing Lets the World Know About Your Products or Services

Nothing is more important for the success of your business than getting the word out. Specialized marketing efforts can help create awareness among potential clients. You may already be recognized in your community. In that case, you can use marketing as a way of communicating with your community to give them an in-depth understanding of how your business works, while also promoting brand loyalty among your existing clientele.

Marketing Allows You to Compete with Larger Competitors

Good marketing efforts allow small businesses the opportunity to compete with well-known, larger corporations and compete for their market share.  Smaller businesses often have an advantage over larger companies because of the greater amount of personal attention they can provide to each client. Often, good customer service and a real sense of value are more important to clients than the lower rates they may pay for the services or products of larger companies.

Marketing Helps Increase Sales

If you have done your marketing right, chances are that any potential clients will be able to instantly recognize your branding efforts, separating your company from your competitors and increasing the likelihood for them to become a future client or make a purchase. At this point, your clients can also become a part of your marketing campaign by writing positive comments about your company and its services or products on social media as well as recommending your company to friends, relatives and other business associates. You will see the sales increasing exponentially as word spreads.

Remember that good marketing leads to sales, which is the most important factor for your business to thrive.

La Mancha Sims is the Founding Partner and CEO of Triton Financial Solutions, a business funding consulting firm located in Atlanta, Georgia. You can reach La Mancha at 770-249-2357.

Posted in Advertising, Business, Business Ideas, Business News, Business Startups, Business Tips, Customer Development, Economics, Entrepreneurs, Entrepreneurship, Marketing, Sales, Small Business, Small Business Marketing, Small Business News, Start-ups, Startups, Success | Tagged , , , , , , , , , , , , , , | 3 Comments

What Does the SEC Vote Finalizing Crowdfunding Mean for You?

JOBS ActOn July 10, 2013, Mary Jo White, Chairman of the Securities and Exchange Commission (SEC), called a portion of the JOBS Act to vote, which passed 4-1.  This vote lifts the 80-year ban on public solicitation and creates a new type of offering called 506(c), which basically permits companies to advertise that they are fundraising to the general public.

As noted in our previous blog posts about crowdfunding (How Will the JOBS Act and Crowdfunding Impact You?; Will Crowdfunding Be Your Small Business Funding Solution? and The Benefits of Crowdfunding), in April of 2012, President Obama signed into law the JOBS Act (the “Jumpstart Our Business Startups Act”), a bi-partisan bill designed to make investing in small businesses easier.

The overall purpose of the JOBS Act is to ease red tape, making it simpler and easier for smaller firms to raise funds through a process known as “crowdsourcing,” or “crowdfunding.” Whether you are an established business, an optimistic startup or simply have a great idea, crowdfunding is an appealing option.

For more detailed information about the recent SEC rulings governing crowdfunding, this SEC Fact Sheet as well as this article from Forbes magazine should be able to answer most of your questions.  Another good source for additional information can be found here. Contact Triton at 770-249-2357 for more information about how crowdfunding can impact your business.

La Mancha Sims is the Founding Partner and CEO of Triton Financial Solutions, a business funding consulting firm located in Atlanta, Georgia. You can reach La Mancha at 770-249-2357.

Posted in Alternative Lenders, Alternative Lending, Business, Business Financing, Business Ideas, Business News, Business Startups, Business Tips, Crowdfunding, Crowdsourcing, Economics, Entrepreneurs, Entrepreneurship, Finance, JOBS Act, Small Business, Small Business News, Start-ups, Startups, Success | Tagged , , , , , , , , , , , , , , , , , , , , | Leave a comment