Business Finance Consultantants

Business finance consultants are the backbone of an organization. They help establish the both the long-term and short-term objectives of the firm that makes for effective utilization of the financial resources. They also help in formulating financial and business policies. Financial policies relate to procurement, administration and distribution of business funds. Business finance consultants also play a pivotal role in formulating procedures. Procedures are the specific order of doing things. They ensure consistency of actions. In financial procedures, the financial executives decide the control system, develop standards of performance and evaluate the performance.
Finally, business finance consultants help forecast the future. In order to take proper action to achieve the objectives, it is necessary to know future positions. Business finance consultants help make a sound financial plan. A sound financial plan should be simple as well as practical. When there is complexity in the financial plan the operating executives will find it difficult to follow. Also, the financial plan should be designed with a long-term view. While designing the investment, financial and dividend policies, the long-term requirements are also considered. A financial plan requires vision and forecast.
A financial plan designed by business finance consultants should have flexibility. That is, it should incorporate changes in the plans and ensure liquidity by meeting maturing obligations in time, but not at the cost of profitability. The plan should also ensure with the cost associated with various financial decisions at a minimum. A proper balance between fixed and working capital should be maintained for using capital effectively.

Getting Your Home Business Financed

Businesses without funds exist only in minds. A brilliant idea is equal to zero without sufficient funds in hands. It is always a more satisfying feeling to start and fell short than dreaming of success all the time and never actually starting. Biggest obstacle for these potential startups is the lack of finance. If some unique idea has sparked into your mind and you are ready to give it a try then start with preparing a business plan and assigning costs, this will give you an idea on how much finance you need for this business. Next step is to decide your source of finance.
Commercial Banks:
Commercial banks are a good source of business loans when it comes to businesses that already exist. However, the chances that they will grant you a business loan for starting a business are quite dim. Nevertheless you can go for personal loan (sometimes even business loan) if your credit history is good. If you are able to present your business plan smartly and ensure them that you have got the experience and skills needed to turn it into a success, you will most probably get your loan application approved.
Venture capitalist & Traditional lenders:
Some investors want much more than what financial markets, securities or bonds have to offer. They are ready to take risk, when they see the chances that some investment can bring much more profits than any other investment alternative. Venture capitalists lend funds to small business startups, it's up to you that how do you convince and lure these lenders into funding your business.
Government financing Small Businesses:
Another resort to get your home business financed is going to the small business administrations and development authorities of your country. These authorities and administrative bodies often provide small business loans to get started. They are keen to help small businesses because this industry can contribute a lot in the overall GDP and economy of the country. You can either choose debt financing or equity financing.
Personal Family & Friends:
Some online businesses really don't need a lot of investment to get started. You can start with an initial setup of PC, telephone or fax machine placed in a small room. Some people will find it hard to borrow from their family members or friends but this is indeed a realistic option. You don't have to go into formalities, just discuss your business plan and enthusiasm with the person (ideally your parents) and if he/she is convinced, you'll be having cash in your hands instantly.
Additional resources:
Credit cards can be another option, although not good for long term financing. Other sources are finance companies and mergers. But the problem with these alternatives is that you are not totally independent in your business decisions, which actually spoils the charm of running your own business.

Small Business - Looking For Business Financing and Business Funding

Looking for business financing generally refers to entrepreneurs searching for funding resources for a business. Businesses need capital for start-up and operating expenses, and many financial institutions provide loan programs to fulfill that need.
When looking for business financing, most entrepreneurs go to the Small Business Administration (SBA) first. This government agency supplies funding to business that employ fewer than one hundred workers and that have been denied by traditional lenders, such as banks. Their most common loan program is the 7(a) loan, which guarantees a certain percentage of a loan provided by a traditional lender. The loan requirements for start-up and existing businesses differ somewhat, but both require applicants to supply personal and business financial documents along with a written business plan. If a business meets the criteria for a 7(a) loan, it can download and print the application available on the SBA's website to give to a lender who participates in the SBA's guaranty program.
Existing businesses looking for immediate business financing usually turn to factoring. With factoring, a business sells its accounts receivables to another company, known as a factor. Most factors require businesses to process credit cards and to have been doing so for a certain length of time, usually three to twelve months. Once approved, the factor collects the payments on the accounts from the business's clients until the funds are repaid. Factoring is not considered a loan; therefore, no debt is incurred on the balance sheet.
Looking for business funding refers to entrepreneurs who are searching for ways to fund a small business. Funding is needed for start-up and operating expenses. Many lenders provide specialized loan programs to assist small business owners in starting and maintaining their business.
A majority of entrepreneurs go to the Small Business Administration (SBA) when looking for business funding. This government agency provides loans to small businesses that employ fewer than one hundred workers and that have been denied by traditional lenders, such as commercial banks. Their most common loan is the 7(a) loan. The application requirements for start-up and existing business differ, but both require certain financial documents and a business plan. Certain variations of this loan may require additional documentation. To apply for the 7(a) loan, applicants should collect all needed documents and take them to a lender who participates in the SBA guaranty program. With this program, the SBA will guaranty a certain percentage of a small business loan in order to alleviate the lender from unnecessary risk.
Another source to consider when looking for business funding is a private investor. A private investor will contribute large sums of capital to a business in exchange for a portion of the profits. The best way to attract potential investors is to have a well-written, feasible business plan. Before an investor contributes any capital, it's best to make sure that he or she is providing equity, not debt. Debt means the investor expects the business to repay all or part of the given capital.

Small Business Finance - The Next Big Banking Problem?

For the past year, most banks and lenders have been subject to both disastrous operating results and negative publicity. Actual commercial lending activity reported by banks conflicts with the usual attempt by politicians and bankers to portray banks as normal and healthy. Most bank financial results have been disappointing after working hard to solve massive residential loan problems. It is reasonable to ask if commercial banking has more potential disasters about to emerge based on what has been seen and reported so far.
Based on a number of business financing statistics, commercial lending to small businesses is already on life support. In many cases, without government bailouts many commercial banks would have already failed. As bad as that perspective might sound, this report will provide an even more negative outlook for the future of small business finance programs. Unfortunately for banks and lenders, it does appear that business loans will be the next big problem.
During the past year or so, several banking problems have received significant publicity. The largely avoidable difficulties were primarily tied to increasing home foreclosures which in turn caused various investments tied to home loans to decrease in value. Such investments lost value so rapidly that they became known as toxic assets. When banks stopped making many loans (including small business financing), the federal government provided bailout funding to many banks to enable them to keep operating. While most observers would argue that the bailouts were made with the implicit understanding that bank lending would resume in some normal fashion, the banks seem to be hoarding these taxpayer-provided funds for a rainy day. By almost any objective standard, commercial lending activities have all but abandoned small business finance needs.
Small business financing appears to already look like the next big problem based on commercial finance statistics recently released by many banks. The general decline in commercial real estate values during the past several years is a major factor in this conclusion. Because many large commercial real estate owners could not make their commercial mortgage loan payments or refinance business debt, this has resulted in some significant bankruptcies. The resulting bank losses are clearly having an impact now on commercial lending to small business owners even though these difficulties were primarily happening with large real estate owners and did not usually involve small businesses.
Bank losses on large commercial real estate loans have caused many banks to reduce or stop their small business financing activities, and this has clear similarities to the earlier situation of residential mortgage loan toxic assets causing banks to stop normal lending because of capital shortages. The bank losses from large commercial property investors are producing a ripple effect that has caused small business financing to effectively disappear until further notice. While small business owners did not cause this problem, they are suffering the immediate consequences when banks are unable or unwilling to provide normal levels of commercial financing to them. This bad situation is made even worse when we learn that many banks are hoarding cash and approving fewer commercial loans to allow them to quickly pay bailout funds back to the federal government. The primary logic for this approach is that it will allow banks to resume excessive bonuses and compensation to their executives.
Unfortunately one problem will lead to another, as is common with complex circumstances. The failure to obtain normal business financing will most likely lead to an increasing number of commercial loan defaults by small businesses. Prudent business owners should begin to take action now in a timely manner to avoid such negative consequences. The most serious small business finance problems can be anticipated and avoided with appropriate action.
Even if they do nothing else, business owners should have a straightforward conversation with a small business finance expert to assess how exposed their business might be to the brewing commercial banking problems. If recent events are any indication, the banks themselves will not be very forthcoming about problems with their commercial lending practices. For many small businesses, the most objective business financing expert is not likely to be their current banker. To increase the chances that they receive sufficient small business loans in the face of ongoing lending problems, a healthy amount of skepticism and caution will be helpful for business owners.

Unsecured Business Finance Program

1. Did you know that there are Unsecured Business Finance programs that are NO DOC Unsecured Program and require NO financial statements or income verification of any kind? Strictly credit driven.
2. Did you know that there are Unsecured Business Finance programs that only take 2-3 weeks for a client to receive their first funding, and is usually complete within 4 to 6 weeks?
3. Did you know that to qualify for a Unsecured Business Finance program a client does not need a existing business?
4. Did you know that a business with weak financial statements and/or no taxes can still qualify for financing up to $150,000? (See #1)
5. Did you know there is a cash-out option available for the Business Finance program?
6. Did you know that many banks will offer a 0% APR for 6 months to 1 year?
7. Did you know that funding from these programs can be used for any business purpose, including payroll, inventory, equipment, and even operating capital?
8. Did you know that most funding the Business Finance programs does not report to your client's personal credit file, but reports and builds the strength of your business credit file.
9. Did you know that the Unsecured programs will build the strength of your client's business credit score?
10. Did you know that No Doc financing is the perfect option for those who wish to purchase a franchise? And it's even better for existing franchise owners who need additional operating capital!
11. Did you know that you can use funding the programs to pay off your client's personal credit debt? This will greatly improve their credit score, enabling them to get additional funding in the future!
12. Did you know that a client with a "C1" success rating has a great chance that within a month or two they will qualify for up to $100,000 in funding?
13. Did you know that most businesses don't qualify for traditional loans due to poor financial statements or a bad couple years from the current economic climate, yet they can still get up to $150,000 the No Doc Business Capital program using their personal credit alone? And that they can double or triple that by adding additional guarantors?
14. Did you know that the Unsecured Business Finance program is available for all entity types including: sole proprietorships (not incorporated), C corps, S corps, LLC\'s, DBA\'s and any person with qualifying credit?
15. Did you know that if a client wants funding but has poor personal credit they can still qualify? They just have to find a credit partner who will act as a guarantor for their business and they can potentially be setup over $100,000 in as little as 45 days! (FYI - as many as 50% of borrowers use guarantors, this is a very common practice).

The Essential Checklist For Business Financing

Every year, thousands, if not millions, of businesses are declined when trying to secure different types of business financing. Many times, the business owner is unaware of why they were declined in the first place. Banks and other lenders can be very finical at times. If your business is not set up exactly the right way, you may be declined over something seemingly inconsequential, even before the lender takes the time to determine whether or not your company is creditworthy. The following 8 step checklist will make sure your company is set up the right way, the way lenders like to see it.
Step 1: Form a separate legal entity.
A sole proprietor can get approved for a "business loan", but it will not be a true business loan. Since there is no separate legal entity apart from the owner, the loan will be in the personal name of the owner and based on their personal credit scores.
It is highly recommended that a business gets incorporated if they want to maximize their chances of getting approved for financing, as well as to protect the assets and credit scores of the owner(s). An LLC, S-Corp, and C-Corp are all forms of separate legal entities. To choose the right one for you business, you should consult a professional. There are easy and inexpensive services online you can use to incorporate your company like BizFilings.
Step 2: Check for name conflicts
This is a more common occurrence than some may think. If your company has an identical, or even similar, name as another company, it is easy for a lender to get confused and mix up the two. It is possible that when trying to pull your company's credit history, or look at other company information, your business may get confused with another. To prevent this, you should first check the business credit agencies (Experian, Dun and Bradstreet, and Equifax) to see if there are any companies listed that could get confused with yours. Next, you should do a search at the US Trademark Office to see if your company, or another, is in violation of trademark laws.
Finally, if you do not currently have a website, or are in the process of setting one up, make sure you secure a domain name that matches the name of your business. If somebody else has a website that is the same name as your business you could have problems. If there are any conflicts above, you should change your legal business name with the Secretary of State, or seek to reprimand another company that is using your name or image illegally.
Step 3: Get a separate business address
Funding sources prefer not to lend to home based businesses. This is not necessarily fair or just, but that's the way it is. If you are currently working from home, or do not have a physical location for your business, we recommend getting a virtual address with a place like Mailboxes Etc. or UPS Stores and use it in all business filings. Sometimes you will have to modify the address they give you and use "Suite" instead of "PMB."
Sometimes these addresses will be flagged, so a better way to go may be to find local executive suites that will forward mail to you. This way you can have a business location without having to lease office space.
Step 4: Get a 411 listing and business phone number
Almost all lenders will verify that you are listed in your 411 directory before they consider lending to your business. You should never use your home number for this listing and your phone should always be answered professionally with the company name. If a lender calls your business and you answer with, "Hello," this does not bode well for your chances of getting approved.
Following this checklist will greatly increase the chance of getting approved for business financing. It will also get your business set up the right way to start building a strong business credit profile. Stay tuned for part 2 of The Essential Checklist for Business Financing.

Customization for business-needs

If you conduct your business by means of the World Wide Web you probably know that it is not that easy as it seems to. Running Internet-based business does not mean opening an e-store or creating a website only. There is a strong competition between organizations for being not only profitable, but also for being popular in order to reach new customers and keep patrons satisfied. Being on the top of competition requires constant innovation and modernization of software, websites, extensions and applications for web and mobile phones. For sure, it is time- and money-consuming, especially when it comes to providing some custom development services, but the game is worth the candle.

IT-organizations are specialized in providing custom software development services, including consulting, software engineering, business and entertainment applications creation, web and mobile applications development, testing and quality assurance, technical maintenance, offshore product and software development, and many other services as well. Many modern IT-companies offer solutions with unique features, weather you want them to create a new game or develop iphone mobile apps.

It is an uneasy task for programmers to match the vision and meet all the requirements of a particular client, indeed. Still, there are many teams of skillful experienced programmers working in IT-companies that are ready for productive collaboration. You can visit website and make sure of it!

Business Finance Brokers: Knowing How They Can Help You

Planning to purchase a business unfortunately do not know where to start looking for finance? Are you currently a bit too busy to be undertaking some researching plus negotiating with business finance brokers? Have you been beginning to lose hope because you are always rejected by lending companies or banking institutions?

When your reply is a definite 'yes' to these questions then it could be the very best time and also a smart idea to obtain the aid of a business finance broker who is able to accomplish all the finance arrangements in your part.

It truly is significant that you get a very good business finance broker as a good broker provides a dedicated one-to-one service and keeps you fully up to date of the available alternatives, what every single option entails along with its benefits and downside. A good broker is knowledgeable in finding a wide range of suitable finance options without delay. In addition, he offers the expertise to negotiate a better deal than you can do by yourself.

A business finance broker is aware of which type of financing you need. The kind of financing that you will need will depend on your financial means, your expected profit margin, the sector you want to enter plus some other factors. A broker makes the whole process simple and easy; in most cases he gathers some basic information from you via phone and provides a decision in principle within 24 or 48 hours.

When you have determined which financial providers to approach, the brokers can help you tailor and present your proposals in the right way. In order to help tailor your proposals and also to avoid rejections they keep up to date with any policy changes at banks.

The method that you present your proposal can often be the cause of being rejected for finance.

The moment you ponder on raising funds to obtain a business, what comes first to your mind is to get finance from banks. Yet you ought to be knowledgeable that there are a myriad of lenders these days and some of which specialize in particular products or industries. For instance if perhaps you wish to purchase a garage business, it would make sense to request finance from a lender which specializes in funding garages.

A finance broker is knowledgeable with the diverse market for finance provision. Odds are that you'll find the process complicated and time intensive and find yourself land up picking the wrong business finance provider. You need the aid of a broker to get the best deal.

In regards to raising finance, a one-dimensional approach can be a bad idea. Quite often, banks lend on inflexible terms and more frequently they turn down individuals who are with greatest need.

Business finance brokers aid you have a whole lot more options besides banks. He will likewise tailor a financial package that suits your needs as well as resources from a wide selection of finance companies and kinds of finance.

Because brokers are up to par and extensively knowledgeable of the financial provision market they are fully aware precisely how much leverage they have in negotiations. Thus the moment you have selected a number of providers, the broker can use his expertise in negotiating to obtain a deal with the terms and rates that best accommodates your needs.

Bear in mind that the choice is always yours. A broker is there to offer you options and also assist you have an understanding of them to produce a well-informed choice.

A business finance broker can help beyond purchasing a business - he can assist you obtain working capital as your business grows and expands. Brokers also offer assistance on business planning, consulting, management buyouts, business restructuring, and also buy-ins and turnaround finance.

By simply using the services of a reliable finance broker like Enable Finance you'll save yourself money and time plus obtain a financial deal that accommodates you best.

What You Must Know About A Lease Vs Buy Business Finance Decision For An Equipment Lease

Business owners and financial managers in business finance are always faced with the same decision in acquiring an equipment lease, namely should we buy or lease. Technically this is referred to in the finance books as the infamous ' lease vs. buy 'decision.

Let's examine some of the key points and facts you need to consider in that decision. Naturally the good news is that an equipment lease can be used to acquire almost any type of equipment or asset - that includes equipment, machinery, buildings, etc. More often than not it pays to seek a business financing advisor who is well versed in the benefits and nuances of equipment finance.

Working capital and cash flow tend to be the main drivers of the lease vs. buy decision when we talk to clients. It goes without saying that most Canadian leasing companies probably have a lower cost of capital then your firm based on their borrowing capacity and the way they are funded. Therefore that lower cost of capital becomes a positive advantage in the lease vs. buy decision.

In many cases the lease vs. buy decision will be very close and the actual non financial benefits of an equipment lease will drive your final decision. For example, although you might be in a position to construct a favorable buy versus leasing model you might not want to use business lines of credit to access the cash needed to acquire the asset.

Also one of the key tenets of finance is that you should use long term funds to fund long term assets - that just makes common sense. Simply speaking you don't want to purchase an asset as opposed to l easing it and find out you might not be able to make payroll on Friday because your line of credit is maxed out!

As we said, some of the pure mechanical decisions around the lease vs. buy tool (there are numerous on line calculators which are references as lease vs. purchase analysis tool) can often be over ridden in your analysis by non financial considerations. For example, let's say you clearly don't want to keep the asset at the end of the term of its useful economic life. That's where an equipment lease makes total sense, as it gives you the ability to return, extend, or even purchase the asset if in fact you end up deciding to purchase and keep it if your circumstances change.

Business owners might want to consider talking to their accountant or a business financing advisor on larger capital asset acquisitions. Some of the inputs required in the lease versus buy model include items such as the actual interest rate the lease company is charging you, your tax rate, the projected increase in profit via use of the asset, the depreciation expense you can take on the asset and your overall cost of capital which is calculated by analyzing your debt and equity in the business. Whew!! That's some fancy accounting and it can best be left to your accountant or advisor on larger asset financing acquisitions. However the good news is that a simple computer spreadsheet handles all this for us nicely!

In summary the leasing versus buy tool in business finance can be a great asset in your financing decisions for new assets. Adopt Warren Buffets key approach, which is simply to determine if the asset financing opportunity delivers a solid return on equity for your business.

Yes our tool we outlined is important, but at the end of the day use business common sense to analyze the equipment lease opportunity and blend it into your overall business financing strategy.

Business Finance Software

Business finance software is fast gaining popularity, especially in computerized financial planning systems. At the heart of a computerized financial planning system is a model that specifies the relationships relevant to the firm. A computerized financial planning system helps in preparing proforma financial statements, estimating the requirement of external funds, and calculating a variety of ratios. Such a system naturally offers a number of advantages. Once the model has been developed, the tedium of manual computations is eliminated with the help of business finance software. The circularity problem is easily tackled as the computer can quickly perform the required iterations. Finally, business finance software can be employed very conveniently to perform sensitivity analysis.

Thanks to the above advantages, the computerized financial planning system strengthens the firm's planning ability. However, there is a potential disadvantage associated with it that may be overlooked. The ease that computations can be performed with the help of business finance software and forecasts generated may result in misdirected efforts. A large quantity of low-quality predictions may be churned out creating confusion and on the part of management. Quality may be sacrificed to quantity. To guard against this danger, greater thought should be given to the scenarios evaluated and the quality of analysis when using business finance software.

With electronic data processing, it is possible to handle large amounts of data and to make information available to a large number of people. Thus, one can obtain, analyze and organize timely data quite inexpensively by using business finance software. But it must never be forgotten that data is not necessarily information. Information must inform someone. With the help of business finance software, you can use computer graphics. It can inform visually, displaying important company information. Managers can now quickly display a colored map showing their competitive picture instead of computer printouts for information.

The Right Business Finance Package For the Right Business

Business finance is customarily a main detail when it comes to starting a brand new business, growing an established business, or maybe purely up holding the particular quality of business. Business loans are regularly made out to be a negative action from the business owner though if operating right it may in fact become a salvation of the business along with its repeated development along with its productivity.

Any business owner may well come up with a numerous inspired visions as well as strategies although if your lacking the correct business financing, it is possible that even the finest laid strategies can, and generally will, go skewed. When a business owner is dealing with the situation of whether there is acceptable money obtainable to complete the vital practices accurately operate for the business on a daily basis, it will simply generate havoc over the future.

It is most important that the business owner possesses the capacity to access sufficient funds to be able to be at ease so they can set up certain systems as well as operations crucial to becoming a promising entrepreneur. Fairly often, it is the business loan which delivers such clarity for a entrepreneur so as to permit you to continue on focusing with the elemental factors of the beneficial commerce operation.

Options of loans intended for business loans involve the secured business loan or the unsecured business loan. The secured business loan it is required that the business is able and willing to offer collateral against such finance. Such collateral may be in the way of land, buildings, and/or machinery. Offering collateral automatically makes it easier for the business in gaining favor in the eyes of a loan agency. This customarily results in certain rewards for a business owner. Those rewards could be in the form of length of duration of your loan, interest rates, penalties along with postponement requirements, furthermore a variety of added terms and conditions. Keep in mind, if choose longer loan period the repayments will be of smaller amount thus there are certain rewards to it.

Alternatively, a unsecured loan can have various benefits for the recipient of the loan. Such rewards can include a smaller amount of paperwork, quicker decisions by the finance agency, in addition to support for a business owner that is incapable of offering collateral of any kind. Regularly, in spite of this, the settlement time for this style of business loans is shorter also pretty often, interest rates possibly will be greater.

Prior to applying for a business loan of some type, the entrepreneur wants to be ready as well as prearranged. It includes arranging every one of business finance paperwork such as tax returns, profit and loss statements, balance statements, and also a few added items that could be called for from a financial organization. If you are more prepared you can be, the better your impression to the lender. Loaning agencies enjoy thinking the people they are loaning money to can be reliable and prepared. Your ability to submit the lending agency with all paperwork that is required in a well-timed manner plus in a prepared fashion will certainly aid in enhancing the view to a lender.

Hence, borrower's needs to keep in mind that business loans are proposed to earn you money, instead of cost the business funds. Which means that all the funds that you borrow have to be spent sensibly with the purpose that every single cent is spent in increasing your earnings exponentially? Thus, an organized filing practice plus frequent analysis of the outflow in addition to earnings can be fundamental in making sure that the loan is going towards correct use within several areas business.

The old motto of it takes money to make money is really isn't so far-fetched and also actually applies to business loans as well. As well as, a thinking process of spending other people's funds to produce your personal cash might too be exceptionally beneficial to a business owner.

Lenders are keen to produce business loans to entities that can establish themselves to be trustworthy as well as a beneficial risk. Which is done as a result of having an attractive business design in place in addition to ordered, helpful commerce finance papers obtainable for scrutiny of the loaning representative(s)? In the situation you is willing to provide your loaning organization all necessary documents, furthermore if you have thought out the effect that the extra income may cause to your previous income, in that case most likely, you are a serious contender for the business loan.

Thus, business loans are able to in reality put riches in your pocket - a lot additional if they are used in a way which increases the drive in the business and improving profits. Therefore, every business owner that desires to steadily foresee progress and advancement within their own business must not hesitate in moving forward in acquiring commerce financing.

Business Finance Providers - Jumpstarting Businesses

No business ever started with more than enough funds. With this in mind, every business out there needs funding. Business Finance is used to obtain assets which will help your business make more money, to purchase capital items, to increase holdings of trading stock and supplies, fund research and development and expand distribution and develop new markets.

To find the right business finance provider for your business, you should know the types of finances available for you.

Debt Financing

Borrowing from banks or financial institutions, provided specific terms and conditions for repayment is called debt financing. Businesses who are into debt financing accept a direct obligation to repay the funds within a specific period of time. Here are the sources for debt financing:

Friends and relatives - advantage is that they are likely to give flexible terms of repayment than other lenders. They may be willing to invest more on your business and try to become involved in management. It is advisable that you create an agreement to avoid future misunderstandings.

Banks are the sources of most businesses finance. There are many types of banks but generally they exist to accept loans and deposits. They are very cautious when making loans so it may be hard your young businesses to have banks as their source.

Credit Unions are common providers of business finance. They intend to help members of a group, like members of a labor union. They give funds with more favourable terms than banks. However, the amount of money they can lend you is usually not as large.

Finance companies are another option. However, they charge higher interest rates than banks and credit unions; but they do approve more business finance request.

Equity Finance

Investors provide funds in exchange of shares in your business. They provide total risk capital and have no security to call if your business does not earn as expected. This type of business finance may be sourced through the ff:

Joint Venture - two or more companies agree to share capital and resources, involving financial support and sharing of risks. This arrangement brings efficient commercialization, acceleration of revenue growth, and expansion of domestic markets.

Venture Capital Funds - business finance providers who are often generous usually think that they will get big returns in a short span of time. They offer share capital. They tend to invest in risky ventures who find it difficult to get a loan from a bank. Advantages would be substantial amount of capital and no repayments to worry about. Disadvantages would be a sacrifice of large part of your company and will not be viable for small and medium businesses. They usually invest over ₤1M .

Business Angels - these are wealthy individuals who invest in groups and expect high return for their investment. They are willing to be a business finance provider for small business, giving help and sharing their first-hand experiences. You may want to contact the British Business Angels Association for business angel networks.

Business Financing For Companies With Negative Equity

Most businesses are still feeling the effects of the past recession in one way or another. The most affected businesses are finding themselves with more liabilities that assets, leaving them with a negative equity situation. Unless handled correctly, this situation can easily spiral into a vicious cycle that ends with the company declaring bankruptcy or shutting down.

Most companies with negative equity also have cash flow problems. Most commonly, these appear when the customers start demanding longer payment terms. Instead of paying invoices in net 30 days, they start paying them in net 60 days. This creates a liquidity problem that forces the company to start juggling vendor payments and other expenses while waiting to be paid. It also limits the ability of the company to take new orders. Before long, the company goes into a tail spin.

Many times, this cash flow problem can be corrected with business financing, enabling management to turn the company around. And here lies the problem. Getting business funding while having negative equity is nearly impossible. You won't be able to find a line of credit or business loan. And if you already have financing, it's unlikely that your institution will increase the line. After all, if you have negative equity, your company has no collateral. And institutions don't lend without collateral.

There is an alternative however. If you biggest problem is that you have cash flow problems due to slow paying clients, factoring financing may be the right solution to help you turn your company around. Invoice factoring accelerates your client payments by using a financial intermediary between your company and your customer. The factoring company, as the intermediary is called, advances you funds for your invoices as hold them until your customer pays. This increases your liquidity, improving your ability to pay vendors and take new orders.

One of the advantages of invoice factoring is that it's easier to obtain than conventional financing. The collateral that factoring companies are most interested on are your invoices from credit worthy customers. Most factoring companies are comfortable holding only that as collateral. Aside from that, your company will need to show how it plans to turn around its current situation.

If you currently have another business financing solution in place (e.g a business loan), you will probably need your lenders cooperation to add and integrate factoring into your company. Turning around a company that has negative equity is very challenging. You should consider hiring a qualified financial professional to help you with this situation.

Creative Business Financing Techniques - Peer to Peer Lending

When most entrepreneurs think about loan financing for their small business, they think about the two obvious options: traditional bank loans and SBA loans. However, there's a third crucial type of loan that often goes overlooked. Peer-to-peer lending is a novel concept that brings all the benefits of the banking system within arm's reach for many more small businesses.

Peer-to-peer lending is exactly what it sounds like-one person lending money to another. There are several web sites out there that cut through all the red tape of the banking system, allowing more people to receive the small amounts of funding they need. is an excellent example. The website serves as a digital loan marketplace, where multiple lenders offer bids and compete (think eBay) to fund members who need loans. Once acceptable terms are reached, the debtor receives their funding, and Prosper handles all administrative tasks. The creditors' outstanding loan assets can then be traded as securities through the company's marketplace. These features are what make Prosper an excellent option for companies who need small amounts of funding.

Another possible source of small business financing through peer-to-peer lending is A similar model is used on this site as well-by introducing more competition on the lender's side, consumers are able to receive lower rates on their loans. Conversely, these websites are also investment opportunities for people who would like to provide financing for others.

These two sites primarily focus on lending to people in the United States. However, they're a part of a larger global trend toward microfinance. Microfinance is the practice of giving very small loans to entrepreneurs who would otherwise be unable to get loans in the traditional banking system. This trend is particularly focused on lending to entrepreneurs in developing nations. Sites such as operate by lending money to small businesses and tradespeople for the purpose of long-term poverty relief. It is funded by individual lenders and offers loans as small as a few hundred dollars.

Today's entrepreneur, whether operating in a developed or developing nation, would be wise to consider this unique form of financing. It removes much of the red tape and middlemen from banking, making it an excellent opportunity to fund a small business.

Raising Small Business Finance

Raising small business finance isn't an easy process, particularly in light of the recent credit crunch and the liquidity problems experienced across global financial markets. Of course, that's now filtering down to small business loans, which are much less easy to come by, particularly at start-up stage. Yet, ironically, getting any business off the ground requires money and a bit of faith from those with the resources to spare.

The Banks

Raising small business finance from a bank is still most likely the path of least resistance to raising funds. Your alternatives are to find a private investor or investors, who will almost certainly be looking for an equity stake in return for their input, and will be far more discerning that the bank in choosing to whom they give their financial backing. This second route is immensely difficult, unless you have a rich family member willing to step in and foot the bill on favourable terms.

Business Plan

If you do intend to raise your small business finance from your bank, you should initially prepare a business plan documenting the fundamentals of your idea, how your business will be run, and how much money you think it will make in the form of cash flow projections, profit and loss statements and other accounting documentation.

Assume Ignorance

Take care to explain every aspect of your business in your plan, and make sure to include conservative estimates on your figures. After all, chances are you'll start as a small business, and the banks will realise this if you project over ambitious or unrealistic figures. Likewise in covering the details of your business, don't presume knowledge - the bank manager / investor might not necessarily understand why there's a need for your particular idea / piece of technology or why it's any different to what's currently on the market.

Utilise Your Personal Funds

It is advisable where possible that you make use of any savings or personal funds you may have available. This is not only good to give your business the funding it needs, but also as a sign to potential lenders and investors that you are fully committed to making your idea into a success, given the extent of your personal liability. What's more, you might also find you already have much of your essential start-up capital available in overdrafts, savings accounts and credit cards. While a risky tactic, it can pay off big time if you're looking to attract serious financial help for your business.

Private Investors

Finding a private investor is difficult for any small business, and if you're committed about raising money this way, you're going to have to do some serious leg work and be prepared to surrender a large slice of your potential business profits. It's also important to make sure both you and your potential investor know on what terms the partnership between you may come to an end, so the investor can realise his investment and you can continue running your business. Thus it takes planning and hard work, not to mention a great, relevant pitch, if you're looking to secure funding for your small business from a private investor.

Business Financing - A Peak Into Venture Capital

Raising business finance isn't always easy, and especially so when you've not got enough assets to secure against your ambitious plans. In some cases, you're going to have to part with equity. Venture capital funding can help you grow your business, and plays a vital role in fuelling growth and innovation in the world economy.

Venture capital has helped to fuel the growth of some of the world's biggest public companies at one stage in their life-cycle. Venture capitalists are willing to run the risk of making poor returns, or losing all of their money, for a chance to hit a home run. That's why their capital tends to follow big ideas, and is hard to get when you're looking to do something that isn't too innovative with huge growth potential.

The Dynamics of Venture Capital Funds

When entrepreneurs are looking to raise money from venture capitalists, they often have a poor understanding of how the market works. Venture capital firms do not raise their funds from shareholders; they usually raise their funds from private institutions. They will then charge a management fee, and take a percentage of equity for themselves. They also have a tendency to work together - often they will have other firms invest in a deal along with them. This can be to limit their exposure, and bring in expertise. Some VC firms will take an active role in managing their investments, while others prefer to watch carefully on the sidelines.

Don't Be Too Scared Of Equity Dilution

Many a business has failed because the management have been too afraid of diluting equity. While it's important to ensure you treat your equity with the respect it deserves, you shouldn't be afraid to let go of some if it's going to mean you own a smaller share of a bigger business. Using venture capital you can explore a high risk, high reward, rapid growth strategy. In many cases VC firms will be happy to fund your business to run at a loss initially, because they can see the bigger picture. This is a luxury that you will not be able to take advantage of when you have bank managers looking at your ever dwindling balance sheet.

Raising equity also gives you an opportunity to profit from your businesses success, or idea, before you manage to take dividends or experience a liquidity event. Although it will probably only be offered in later rounds, a VC firm might be prepared to buy equity from you directly as well as buying it from the company.

Choosing The Right Venture Capital Firm For You

Working with a company that's worked in your space before can be of tremendous benefit. They will have domain knowledge to share, and will often have the right contacts in their phone book for closing partnerships and recruiting expertise. The relationship that you have with your VC could make or break your success, so make sure you pick the right one and the best fit for your business.

Business Finance - Multiply Your Profits

Supporting the fresh ventures or the old existing one business finance has come a long way. It is meant for venture owners no matter small or big. Any business professional seeking monetary aid can approach lenders and approve funds with or without the use of collateral. The applicants by placing property as collateral can derive amount between £50,000 and £3,00,000 with prolonged repayment term of 10-15 years. On contrary, business persons without the use of collateral can procure finance from £5,000 to £1,00,000 with reimbursement term of 1-10 years. The benediction can be unleashed even applicants are striving from serious credit issues like defaults, arrears, late-payments, county court judgment, bankruptcy and debts. But, applicants should always enclose the details and layout of business in a rational manner for approval of funds.

Persons who are planning to set a fresh venture can get financial relief if required by considering this scheme. The funds can also be obtained by persons seeking some monetary aid to expand their existing business. They can meet commercial demands like purchasing raw materials, machineries, equipments; expenses of recruitment and salaries of employees; transportation and maintenance of factories and office are among them. The borrowers can also invest money in buying stocks and shares that are in interest for company's advancement.

The rates of interest are reasonably tabled for all sorts of venture owners. Moreover, if applicants follow the exercise of collecting and differentiate the offers then they can easily grab some cheap and low interest rate figure. The loan quotes can be collected from home or office through online. Furthermore, by applying through e-application method you can approve the loan from any location on earth. Loan calculator is also an effective tool that helps applicants to have a preview of the monthly instalments.

Thus, business finance is meant to prop your business so that you can take your empire to your expected horizons.

Search Results

The Working Capital Journal is one of several commercial financing resources which should be reviewed regularly by small business owners to assist in keeping up with the imposing difficulties posed by rapid changes in the business finance funding climate. As noted below, there have been some surprising actions taken by lenders as a direct result of recent financial uncertainties. The increasingly complex and confusing environment for working capital finance is likely to produce several unexpected challenges for commercial borrowers.

The working capital finance industry has primarily been operating on a regional and local basis for many years. In response to cost-cutting that has permeated many industries, there has been a consolidation that has resulted in fewer effective commercial lenders throughout the United States. Most business owners have been understandably confused about what this might mean for the future of their commercial financing efforts, especially because this has happened in a relatively short period of time.

Of course, for some time there have been ongoing complex problems for commercial borrowers to avoid when seeking commercial loans. But what has produced a new set of business finance funding problems is that we appear to be entering a period which will be characterized by even more uncertainties in the economy. Previous rules and standards for commercial financing and working capital finance are likely to increasingly change quickly, with little advance notice by business lenders.

Business owners should make an extended effort to understand what is happening and what to do about it due to this realization that substantial changes are likely throughout the United States in the near future for commercial finance funding. At the forefront of these efforts should be a review of what actions commercial lenders have already taken in recent months. The Working Capital Journal is one prominent example of a free public resource that will facilitate a better understanding of the responses by business lenders to recent economic circumstances.

By publicizing actions taken by commercial lenders, this will contribute to these two goals, both of which are likely to be helpful to typical business owners: (1) To highlight controversial bank-lender tactics with a view toward reducing or eliminating questionable lending practices. (2) To help business owners prepare for commercial finance funding changes. To assist in this effort, sources such as The Working Capital Journal are encouraging business owners to report and describe their own experiences so that they can be shared with a broader audience that might benefit from the information. Some of the most significant commercial financing changes reported so far by commercial borrowers involve working capital loans, commercial construction financing and credit card financing. A notable situation of concern is that predatory lending practices by credit card issuers have been reported by many business owners. Some specific businesses such as restaurants are having an especially difficult time in surviving recently because they have been excluded from obtaining any new business financing by many banks.

One of the few recent bright spots in business finance funding, as noted in The Working Capital Journal, has been the continuing ability of business owners to obtain working capital quickly by business cash advance programs. For most businesses accepting credit cards, this commercial financing approach should be actively considered. Business cash advances are literally saving the day for many small business owners because most banks appear to be doing a terrible job of providing commercial loans and other working capital finance help in the midst of recent financial and economic uncertainties. For example, as noted above, restaurants are virtually unable to currently obtain commercial finance funding from most banks. Fortunately, restaurants accepting credit cards are in a good position to obtain needed cash from credit card receivables financing and merchant cash advances.

Business Finance and Corporate Value

The primary goal of business finance is to maximise corporate value while also reducing a firm's financial risk. Whether you are starting a business, expanding it or investing in it to keep it competitive you are going to need finance help at some stage of your business venture. Funding is one of the main keys to success in business and without the correct form and the right amount your venture is most likely to fail.

You may need to cover day-to-day expenses or you might need to cover the cost of new equipment. There are a lot of aspects within your company that will cost and that will need to be covered by funding; the rent or mortgage on your premises, all of the equipment that you will need to get your business going, all of your bills for the first few months and all of your staff wages. The finance that you gain will be used to pretty much run your company for the first few months of it being in existence, which is why it is so important that you get the right amount of finance to ensure you can run your venture.

When you are looking and seeking out your funding there are many avenues that are open to you such as the following:

o Loans

o Overdrafts

o Credit cards

o Family and friends

o Government grants

o Business angels

o Venture capitalists

When you are choosing and applying for your finance it is important that you keep the people who matter in the know and that you ensure you recognise the needs of people involved in your business, for example banks and the Inland Revenue, if you keep people informed they are more likely to be sympathetic to your needs. You should also aim to raise more cash than you need that way you can rest assure that all of your business expenses will be taken care of as the last thing you want to be doing is going back to your money lender and asking for more money.

If you are about to approach an avenue for capital, stop! Do you have your business plan? Your plan is a written statement of intent, it details everything that you want from your business and how you intend on achieving it. One of the sections within your plan will detail your financial forecast. It will describe all of your financial outgoings and how you intend on funding your business, which will include how much capital you are hoping to gain from which ever financial avenue you approach. Your business plan will demonstrate what you require your finance for. It will show why you need the amount that you do and how you intend to spend it. If your finance is coming from aspects such as a bank loan, which will need to be paid back, your business plan will describe how it will be repaid.

Business finance is what will make or break your business so it is essential that you get it right first time.

Business Plan Funding

Getting funding for your business is provided by investors, and is typically based on a company's business plans' ability to show how much money is needed, how much money is going to be made, and how the investor will benefit.

A well-crafted business plan offers a glimpse into the past, present, and future of the company. Generally the funding is awarded based on financial projections that usually include a 2-3 year cash flow forecast, 3-5 year financial information forecast, and a detailed and specific plan on the how the loan will be repaid.

There are two basic types of business plan funding: debt and equity.

Debt funding is where a company borrows money (as with loans) and must pay it back with interest in a timely manner. There are many sources for debt financing: traditional bank loans, savings and loans, commercial finance companies, and the U.S. Small Business Administration (SBA) are the most common. Usually, these sources are best for companies that have a high ratio of equity-to-debt.

Equity funding means taking on private or commercial investors, and making your business accountable to your investor. Many small business owners raise funding from relatives, friends, colleagues, or customers who hope to see the businesses succeed for a return on their investment. However, the most common source of professional equity funding comes from angel investors or venture capitalists.

Venture Capitalists are institutional risk-takers and may be groups of wealthy individuals that are willing to offer promising new businesses the capital needed. These investors include individuals with substantial net worth, corporations, and corporate financial institutions. If a company has a high proportion of debt to equity, most experts advise increasing the ownership capital (equity investment) for acquiring money to finance your business plan or obtain a commercial line of credit.

As always, it is best to consult with experts and trusted advisors before making a decision that will affect your business.

Understanding Small Business Finance

If you are an entrepreneur, then you know that there is always a need for small business finance to keep things going. Being able to get the money that is needed for your business means that you need to make several financial and non-financial considerations.

Firstly, before you search for funding for your business, it is important to know what type of financing required. Would the business need debt financing (a loan for running your business) or equity financing (money that is taken from savings or investors)?

Small business finance through debt financing means taking loans from credit unions, banks and other traditional financial institutions. Among the loans that are available are short-term loans which must be repaid, with interest, within a specific period of time. Such loans may be termed as demand loans as the lender can call in the loan for repayment any time. Small business finance longer debt loans are normally used for financing assets like renovations or investments in equipment.

There are many businesses that make use of lines of credit as a source of small business finance. They make arrangements with lending institutions for a set amount of available credit that they can draw upon when need arises. Lines of credit allows businesses to use the cash when they need it and they only need to pay back the amount that has been used and interest is paid on the outstanding balance of the line of credit. Numerous lending institutions offer credit cards as a means of small business financing. These cards are used by establishments to finance their operating expenses. But, credit cards can be expensive because of the interest rates. The cards are ideal for use if the balance is paid in full monthly.

Small business finance through equity is normally used in a limited manner. Informal source of equity funding includes friends and family; while the formal sources include venture capitalists. Venture capitalists generally have a considerable pool of resources that allow them to finance ventures and participate in some of the more crucial decisions in the business. However, these capitalists conduct studies before making the decision to provide funding.

There is also some equity small business finance that are received from people who are called as "angel investors". These are normally people who have deep pockets and are willing to provide funding.

Different types of small business finance helps to increase the chance of the business to become successful.

Small Business Finance - Funds For Smoother Functioning Of Trade

Often running a business becomes difficult for lack of adequate funds. It could be that there is a cash flow problem owing to seasonal slump in demand for your products or you could not get the payments in time. Or, you require greater funds to buy some expensive machinery, raw material or thinking of starting up a new trade. You can take out small business finance for host of purposes. But you must be well prepared before applying for it.

First of all you should have your credit report thoroughly checked for any inaccuracies in it as the report is crucial in determining the rate of interest and terms-conditions.

Prepare a business plan, which should include the plan of investing the finance and your income sources for making the repayments. The loan providers will first scrutinize your business prospects in order to assess you for risks.

You can choose to borrow funds in secured or unsecured options under small business finance. Any of your commercial or residential property can serve as collateral for the secured greater amounts. The rate of interest will be lower and repayment duration also will be convenient in the range of 5 to 25 years. The unsecured option, however, comes with higher interest rate attached to it. You will borrow only a smaller amount for up to 10 years.

As far as sourcing of these loans is concerned, banks usually do not offer small business finance to new business, but you can get it for the established trade. To borrow the funds for starting a new trade, better explore opportunities on internet, where numbers of lenders can be contacted. Compare their rates and terms-condition for a suitable deal. Make the repayments in time for avoiding any debt build up and for making improvements in your credit rating as well.

Business Finance - Five Options For Start Ups

When starting a company it can be extremely difficult to find the business finance that will allow you to start operations and begin trading. This is why it is vitally important to understand the different business finance options available to start ups. Hopefully this article will be able to put forward five of the best funding options.

The first and most obvious business finance option is to use your own money. For those blessed with a large amount of savings this can be a good option, even taking a second mortgage to fund a business can be worthwhile. The main advantage of this form of finance is that it gives you control over all of the financial interests in the business, the wants and needs of investors are not an issue. However, care should be taken, by risking your own money you may have o sell your house, or may even end up bankrupt if the business fails.

Another option for those trying to find business finance is to ask friends and family for start up capital. Normally friends and relatives will be able to lend you money along better terms than a bank. It is worth remembering however that being indebted to friends or family can be troublesome, placing tension on relationships and in some cases can even ruin friendships. When borrowing from friends and family, be sure to have a written agreement, by doing this the chances of any misunderstandings are reduced greatly.

One of the most frequently used options for those starting a company is to visit their bank in order to obtain business finance. This may take the form of an overdraft, which can be beneficial due to its flexibility. However, if buying over an extended period of time a loan is likely to be a far more suitable option, due to the lower rates of interest.

There are a number of different small firms that are able to provide business finance to companies. Some of these firms work within a government lending structure and as such secure any loans given to government guarantees rather than personal possessions. With a little research it can be possible to find this form of government assisted loan, which reduces risk on your part.

As well as loans, another business finance option is to find external investors who may be interested in buying shares. Typically they will put their money into the company and will only expect returns once the operation begins to bear fruit. One of the major advantages of this can be the free expertise brought to the table by investors; a downside however is the loss of control over the company's direction and the need to share any profits.

These five forms of business finance represent the most commonly utilised options for those who are starting a business. It is only through careful consideration and a process of detailed research that the correct option can be found. If the right decision is made however it should be possible to create a solid financial platform for your business.

Business Financing Alternatives For Troubled Companies

The number of troubled businesses has increased dramatically as a result of the current economic environment. Usually, the problems start when clients start delaying payments. This has a negative impact on cash flow, and if your company does not have a working capital reserve, it can create major problems. The first reaction for most owners tends to be to delay vendor payments as well. That seldom works as a long term solution unfortunately. Before long, like falling dominoes, other payments start getting delay and the company gets into deeper trouble.

Most company owners look for business financing - hoping to implement a stop gap solution to the working capital problem. Unfortunately, getting a business loan is very hard for companies that are not in pristine financial condition. The catch 22 is that if the company where in pristine financial condition, it would probably not need a business loan. Most of time times, this situation can be fixed with the right financing. Otherwise, the company risks going out of business.

There is a solution that can help companies who face slow paying clients and who are not in the best financial shape. It solves this particular problem at its source - the slow client payments. The solution is called invoice factoring.

Factoring provides you with a funding advance for your slow paying invoices. It provides you the capital you need to pay suppliers, vendors and employees - on time. The fact is that while your clients are paying invoices more slowly, most of them are still good solid clients. Factoring companies can provide you an advance on your invoices because they consider them to be your best collateral - something most institutional lenders don't always do. Because of this, invoice factoring can be a good solution for a troubled company that still has a solid roster of clients.

Another advantage of factoring is that is a dynamic form of financing that grows with your business. Since financing is tied to your invoices, it can be used to grow your business and restore its financial health.

Managing Business Finances With Alternative Financing

Bank loans used to be the most expedient source for business financing. But since the mortgage industry has increased the bars for loan qualification, it is not startling for low equity corporations to employ alternative financing.

Programs in business financing have increasingly developed over time, serving the diverse needs of discrete industries. By evaluating the value of concrete property like business equipment, firms can profit from a financing option in the form of asset-based lending. The assests' cash-converted value creates the corresponding worth of business financing offered to firms by lending establishments. For companies running with highly specialized equipment, lender-assessed cost value is regularly devalued, making it hard for asset-based lenders to procure a loan.

For cases wherein business equipment value does not qualify for asset-based financing, corporations can make use of their accounts receivable to request for upright funds. With inventory assessment and receivables estimation, finance firms can bestow business financing based on the consumers' payment ability and not through credit standings of a company. The notion is almost akin to merchant card processing, wherein issuers of credit cards pay the full invoice value minus the discounts. Borrowers and creditors are both benefited in this method of advertising because loans can be granted without the burden of debts, and credit is settled through actual sales of assets.

Basically, accounts receivable are provided intrinsic worth based on the tenets of factoring. Debtor's risk are assumed by a factor upon purchase of reduced invoices. In spite of the uncertainty that the factors might run into with debtor's account settlement, they are still willing to quickly offer financing to industries. By delegating accounts receivable management, corporations are given the freedom to effectually deal with creative efforts in other business operations like marketing and selling.

Factoring business invoices have benefited businesses in more ways thinkable. Emerging industries are ensured continuous cash assistance for effectual operations as long as they are able to fill in bigger and more invoices. Together with business growth of developing companies, the line of accounts receivable factoring also expands.

Financing by means of cash advance should be taken into consideration by businesses that need monetary aid but are deprived of monetary assets and are devoid of profitable monetary statements. By anticipating future credit card sales, financing companies could give credit card processing merchants an equivalent value of capital to oversee a business. Due to the flexible nature of business cash advance, raising of necessities in business outlay is becoming more manageable. Industries need not be anxious about recurrent fees because payment collection for business cash advance is only made when as soon as a business earns.

Fiscally disadvantaged industries have found a new light in alternative financing; through this funding option, more industries have survived the strains of a more severe mortgage industry. With the recent setting of lenders versus funders, it should be every corporation's aim to purposefully position itself in less pricey yet more effectual business financing resources.

A Bumpy Ride For Business Financing

Based on how chaotic the commercial banking climate is currently, the situation described in this article is expected to prevail for a long (but unpredictable) period of time. In spite of the confusing and frustrating commercial loans environment, a prudent business financing strategy is likely to produce the most effective results that can be hoped for by small business owners. With working capital financing and business loans, commercial borrowers need to be prepared for a long and bumpy ride.

Misinformation and insufficient information will play a somewhat unpredictable role in achieving the desired outcome of business borrowers finding appropriate commercial finance solutions. The eventual success of commercial financing efforts will depend on an individualized and detailed assessment of the unique financial circumstances for a specific business, although it is appropriate to note that there are new and effective business loan options that will satisfactorily fill the commercial funding gap for many small business owners impacted by their current ineffective commercial bankers.

Anticipating the long and bumpy ride that lies ahead for even the most ordinary business financing request will be prudent and wise for small businesses. It has not been unusual for commercial borrowers to wait for one to two months before their bank finally declines to make a commercial loan that had appeared to be a mere formality when the lending process began, either because banks do not want to publicly admit that they are not presently making business loans or perhaps due to their somewhat secretive and changing guidelines for making such loans. Regardless of their prior description of "normal" for working capital management and commercial financing options, many business owners have already discovered how much and how quickly this has changed.

A prevailing banking climate that is characterized by misinformation as well as insufficient information about current commercial finance options for small businesses provides sufficient rationale for describing the journey to business financing success as being both long and bumpy. After they have finally been informed by their current bank that needed business finance help is not forthcoming, because they simply do not have enough information to successfully complete their task, a small business owner might be unsuccessful in their attempt to find a new source of commercial funding in one typical scenario involving insufficient information. When a commercial banker misleads a prospective business borrower by advising the business owner that the bank will be able to help in providing an unsecured working capital loan when the banker has already been told by senior bank officials that such financing will not be provided except for specific established business clients, this is an increasingly frequent misinformation scenario. Most banks are in fact eliminating or reducing working capital financing to small businesses as indicated by one public report after another.

More successful results should be produced by realistic expectations of what lies ahead in business financing efforts. This article represents a sincere attempt to accurately portray the recent confusing and unpredictable state of commercial banking for small business owners, and this fulfills a primary purpose in describing current attempts to obtain small business loans as potentially being a long and bumpy ride.

Looking for Small Business Financing? Consider An Account Receivable Financing Strategy

Could account receivable financing help your firm? The dramatic rise of small business financing in accounts receivable ( by the way, Canada's largest corporations use this tool also!) Is simply a factor of companies such as yours wanting to capitalize on the working capital and cash flow that is, in effect, locked up in receivables

It doesn't take rocket science for any business owner of financial manager to figure out that if his or her firm has investments in receivables and inventory then those assets, typically called ' current assets' requires financing in some form. Of course you can ' self finance ' - meaning simply wait for your inventory to turn into receivables, and then wait probably even longer for A/R to turn into cash. But, doing that forces you to give up on sales opportunities and challenges the very core of your financial health, given that we all agree cash flow is king.

If you are fortunate enough to be financing via a Canadian chartered bank you are of course familiar with ' collateral '- our banks do a great job of explaining that to you! Why don't you use your own firm's collateral, its assets, mainly accounts receivable, and monetize that asset into cash.

Clients are often fairly clear on the benefits of account receivable financing, which is also called invoice discounting or factoring. What they don't seem to have the best handle on is how it works.

One you have such a facility set up it quite frankly is one of the easiest and quickest ways to unlock cash flow and working capital on a daily, weekly, or monthly basis. The power to choose your timeframes remains with yourself. And by the way, you only pay for the financing you are using. Let's get back though, to how it works.

In Canada there are two types of factoring, we'll focus on the most common one, which, by the way, isn't exactly our favorite (there is a better one) but let's keep it simple for now.

After your firm generates an invoice you submit it to your factor firm partner. That could be once invoice, several, or many or all. Funds for those invoices are wired, or sent to you, that same day into your account. Didn't you just feel your cash flow being totally unlocked and flowing?! Approximately 10% is held back as a buffer, but as soon as your client pays you get those funds back also, less what is known as a discount fee, typically between 1 and 3% - 2% is pretty well the norm.

2% you say! Isn't that expensive for small business financing. Absolutely, positively maybe, but we actually don't think it is. That is because all in rates from your bank when you total up all the fees, services, standby fees etc often total in the 11-12% range, not the 6% or 7% you think you are getting. And furthermore, if you take the huge amount of cash you just receive and use it to purchase more efficiently, or takes discounts on supplier invoice payments you make your total cost of capital goes down. And, another point, if you are in a competitive environment, (who isn't) does your ability to have unlimited cash flow put you steps ahead of your competition? We think it does.

There are a number of ways to finance your business. If your firm has A/R assets and you are challenged by the timing in which money flows through your business then consider the benefits of account receivable financing. Speak to a trusted, credible, and experienced business advisor on this popular financing tool for small business financing in Canada.

Does Your Business Need Funding? Consider a Business Finance Loan

Many businesses, no matter if they are huge businesses with thousands of employees or just yours where the chief cooks and bottle washer is you, eventually will need to speak to lending agents with regard to outside funding. This could be due to a need to suddenly higher a whole group of employees, it could be to update business processes, most often computers; it could even be to build and develop a full-scale training facility on open land. Regardless, with things like these you really need to look at a business finance loan.

The business finance loan it should be noted can be use for almost anything so long as it is related to the business. One thing to consider is that with the current financial uncertainty bigger business and more established business may get preferential treatment when it comes to these loans as opposed to the small business owner that has only been in business for two or three months. That being said, if you are that small business owner and you shouldn't let this fact deter you. It simply means that you're going to have to be more organized and faster than your competition.

Also, the a successful business finance loan you're going to need to be very forthcoming with the way your business is being run and how profitable it is. What this means is that you're going to have or have had organized records that you can show. This includes not only profit and loss statements but also liabilities, credit reports, and other financial statements. Also, you will need to be able to answer your lenders questions quickly and easily. What this means is that if you've never done it for you may want to practice in front of a mirror or with a friend so that you're not nervous when it comes time to apply for your loan.

Although this may seem strange, after all didn't we get over this high school? You're going to want to do this so that you get your best shot at getting your business finance loan. If it means you need to practice and run through the questions that you may be asked then do so! The key here is to be better prepared than anyone else that may be looking for the same amount that you are. Never forget, that there is only so much money that goes for you to be able to seize the opportunity when it presents itself

Proven Tips For Business Finance - Part I

If you want to safeguard your business' failure, you must learn the different ways of business finance, how to conserve cash and bookkeeping, and how to raise funds. You will not be able to succeed in your venture without sufficient funding. Following is a brief rundown on how to ensure your success by taking care of the finances in the most efficient manner.

Raise More Fund Than You Actually Need
Before you start a new venture, it is very important for you to understand that you more or less get only one chance to raise fund. Therefore, you have to be very careful about what you need, what your sources are, and how much money will be sufficient. You are strongly recommended to arrange more funds than you actually need. This extra amount should go to your emergency fund. For example, you calculations may prove to be wrong at a later stage and then you may find it very difficult to arrange business finance a second time. That extra funding will be a great help in such cases. Always remember, your business propositions may become unviable if you carry on with figures that are too conservative. So, plan accordingly.

There Are Better Alternatives Than Bank
Depending upon your actual needs and requirements, there can be several alternatives for raising funds that may prove to be much better and cheaper than bank financing. Therefore, you must thoroughly research your requirements first, such as how much amount is needed for your business and for how long. For example, if you need it for a short period of time, re-mortgaging your house will be a bad idea. Likewise, renting and leasing options can be more suitable if fund in needed to support equipment purchase.

Keep Your Financers Informed With Your Business Plan And Progress
When it comes to business finance, it is also very important for you to inform all the parties involved in the venture with the latest updates about your plans and how things are progressing. The idea is to get a good understanding of the needs of the people associated with your business in some way or other. If you keep them in dark, you will have a very tough time running your business operations smoothly and successfully. On the other hand, if your banks and financers are thoroughly updated with the latest happenings and developments, they will be more sympathetic to your needs.

You are also recommended to stick to set procedures, especially when it comes to chasing debts. There are several other tips as well about business finance, which I will explain in the next part of this article. For example, I will walk you through the various ways on how to deal with cash shortage - after all, cash is king for any business. So, do not forget to check out back.

7 Critical Business Financing Mistakes

Avoiding the top 7 business financing mistakes is a key component in business survival.

If you start committing these business financing mistakes too often, you will greatly reduce any chance you have for longer term business success.

The key is to understand the causes and significance of each so that you're in a position to make better decisions.

>>> Business Financing Mistakes (1) - No Monthly Bookkeeping.

Regardless of the size of your business, inaccurate record keeping creates all sorts of issues relating to cash flow, planning, and business decision making.

While everything has a cost, bookkeeping services are dirt cheap compared to most other costs a business will incur.

And once a bookkeeping process gets established, the cost usually goes down or becomes more cost effective as there is no wasted effort in recording all the business activity.

By itself, this one mistake tends to lead to all the others in one way or another and should be avoided at all costs.

>>> Business Financing Mistakes (2) - No Projected Cash Flow.

No meaningful bookkeeping creates a lack of knowing where you've been. No projected cash flow creates a lack of knowing where you're going.

Without keeping score, businesses tend to stray further and further away from their targets and wait for a crisis that forces a change in monthly spending habits.

Even if you have a projected cash flow, it needs to be realistic.

A certain level of conservatism needs to be present, or it will become meaningless in very short order.

>>> Business Financing Mistakes (3) - Inadequate Working Capital

No amount of record keeping will help you if you don't have enough working capital to properly operate the business.

That's why its important to accurately create a cash flow forecast before you even start up, acquire, or expand a business.

Too often the working capital component is completely ignored with the primary focus going towards capital asset investments.

When this happens, the cash flow crunch is usually felt quickly as there is insufficient funds to properly manage through the normal sales cycle.

>>> Business Financing Mistakes (4) - Poor Payment Management.

Unless you have meaningful working capital, forecasting, and bookkeeping in place, you're likely going to have cash management problems.

The result is the need to stretch out and defer payments that have come due.

This can be the very edge of the slippery slope.

I mean, if you don't find out what's causing the cash flow problem in the first place, stretching out payments may only help you dig a deeper hole.

The primary targets are government remittances, trade payables, and credit card payments.

>>> Business Financing Mistakes (5) - Poor Credit Management

There can be severe credit consequences to deferring payments for both short periods of time and indefinite periods of time.

First, late payments of credit cards are probably the most common ways in which both businesses and individuals destroy their credit.

Second, NSF checks are also recorded through business credit reports and are another form of black mark.

Third, if you put off a payment too long, a creditor could file a judgement against you further damaging your credit.

Fourth, when you apply for future credit, being behind with government payments can result in an automatic turndown by many lenders.

It gets worse.

Each time you apply for credit, credit inquiries are listed on your credit report.

This can cause two additional problems.

First, multiple inquiries can reduce you overall credit rating or score.

Second, lenders tend to be less willing to grant credit to a business that has a multitude of inquiries on its credit report.

If you do get into situations where you're short cash for a finite period of time, make sure you proactively discuss the situation with your creditors and negotiate repayment arrangements that you can both live with and that won't jeopardize your credit.

>>> Business Financing Mistakes (6) - No Recorded Profitability

For startups, the most important thing you can do from a financing point of view is get profitable as fast as possible.

Most lenders must see at least one year of profitable financial statements before they will consider lending funds based on the strength of the business.

Before short term profitability is demonstrated, business financing is based primary on personal credit and net worth.

For existing businesses, historical results need to show profitability to acquire additional capital.

The measurement of this ability to repay is based on the net income recorded for the business by a third party accredited accountant.

In many cases, businesses work with their accountants to reduce business tax as much as possible but also destroy or restrict their ability to borrow in the process when the business net income is insufficient to service any additional debt.

>>> Business Financing Mistakes (7) - No Financing Strategy

A proper financing strategy creates 1) the financing required to support the present and future cash flows of the business, 2) the debt repayment schedule that the cash flow can service, and 3) the contingency funding necessary to address unplanned or unique business needs.

This sounds good in principle, but does not tend to be well practiced.


Because financing is largely an unplanned and after the fact event.

It seems once everything else is figured out, then a business will try to locate financing.

There are many reasons for this including: entrepreneurs are more marketing oriented, people believe financing is easy to secure when they need it, the short term impact of putting off financial issues are not as immediate as other things, and so on.

Regardless of the reason, the lack of a workable financing strategy is indeed a mistake.

However, a meaningful financing strategy is not likely to exist if one or more of the other 6 mistakes are present.

This reinforces the point that all mistakes listed are intertwined and when more than one is made, the effect of the negative result can become compounded.

What Mom Didn't Teach You About Working Capital Business Financing

If you're like most of us Mom never really gave us a lot of advice on working capital! That's why for such an important business financing subject we recently wrote on an older article in Canadian Business magazine that covered a total of 15 - yes that's 15 ways) to finance your business. Perhaps these were the secrets of the Holy Grail that Mom never taught us, we thought?

The reality was that we had some strong comments and additional information on those 15 items, and we commented on 7 of them in the last article. Let's cover off those final items and hopefully get some real value on what Mom never told us about these things!

Under the category of ' government programs' the article talked about various federal and provincial programs or initiatives for business financing. Mentioned was the Community Futures program as well as the Canadian Youth Business Foundation. These are very narrow and segmented programs, in the case of the Youth Foundation, guess what, you have to be a youth, which hardly suits most business owner's.Community Futures programs have tended to be rural in nature, have ad minimal funding allocated to them, and seem to have focused primarily on start ups that might generate employment.

Secondly, Mezzanine debt was referenced. This is of course essentially an unsecured cash f low loan provided by private finance firms. In many cases it focuses solely on cash flow as the repayment vehicle. The bad news on mezzanine debt is that it typically is available for transactions in excess of 5 Million dollars, which certainly doesn't work for most small and medium business owner's.For the record mezzanine financing rates are in the low to mid teens.

Private equity was out third source of capital. Typically these funds are provided by niche Canadian and U.S. private firms who focus on equity and convertible financing instruments that force the business owner to give up partial ownership.This isn't necessarily a bad thing if you get the working capital and business financing that you need, but you should absolutely be prepared to give up some ownership on these transactions, which are often quite substantial and take several months, if not longer, to complete.

Hey, let's go public and have access to unlimited sources of capital. That's the typical pitch made to Canadian corporations who consider this type of financing. The reality is that a true IPO listing on the TSX or Venture exchange in Canada requires a significant capitalization and track record. Ownership becomes diluted, and companies are forced into very strong levels of reporting and disclosure. Many of our clients have ' gone public' via reverse take overs of shell companies that had a listing, we have never seen this work satisfactorily, at least from a viewpoint of giving them unlimited working capital.

The Canadian Business article focused on the federal SRED program. Finally! A good one! An absolutely great program that provides billions of Dollars of capital for any firm in Canada that qualifies for research spending and adheres to the program guidelines. Sred claims can also be financed, similar to a receivable, as soon as they are filed, that supercharges the program even more from a working capital perspective.

VC money is often bandied about and sought by many corporations. Venture capital in Canada is struggling in the 2010 environment, any fundings seem to be going to firms that have been previously funded, and are getting additional capital (to stay alive?). Any Venture capital firm expects a high rate of return relative to the risk they are taking in financing your firm on an equity basis - in fact traditionally, as the article stated, the venture capitalists are looking for a 5 times return. Unfortunately for many Canadian business owners these types of fundings go to the sexier industry segments such as biotechnology, high tech, etc.

Well, that's it. Hopefully we haven't sounded too negative, but the general trend clearly are that the ' 15 ' options outlined in the original C B article clearly need to be grounded in a bit more reality for the average Canadian business owner and financial manager seeking capital. Speak to a trusted, credible and experienced business financing advisor who can provide you with an up to date realistic alternative on business funding.

Bad Credit Personal Loans

For someone with Bad Credit Loans, getting a loan can seem impossible. There are no credit check loans out there, however, that can help a person with bad credit get the money they need.

However, finding a no credit check loan is not easy. In addition, there are a lot of scams out there regarding no credit check loans. Before you decide to sign a no credit check loan, you should get to know more about them.

A no credit check loan may seem ideal. If the lender does not check your credit then you will never know that you are a liability. Of course, the lender is well aware of the risks they are taking. That's why most no credit check loans are set as if Bad Credit Personal Loans. The loans come with high interest rates and often require a co-signer.

Lenders are aware that the no credit checks are probably going to get applicants who have bad credit. People with good credit will just go get a traditional loan because the loan terms are better. With a no credit check loan the bank will set the conditions to be a great interest and usually a short recovery time.

They can also be especially critical of your finances, including the amount of income you make per month and average monthly expenses. They want to make sure you can afford the loan payment.Bad Credit Personal Loans

One of the No Credit Check Loans more popular is a payday loan. This type of loan is a short term loan, usually no more than two weeks. This is basically an advance on your salary. The lender will look over your recent pay stubs to determine the loan amount. With these loans, however, the interest rate is usually very high, much more than a traditional loan.

When you are shopping for a loan with no credit check, it is important to consider a few different places. Shop around and try to find the lowest interest rate and best terms. Do not settle for the first lender offering the loan. It is important to note that the higher the interest rate, the more you will pay in the end.

No credit check loans can be a lifesaver for someone who needs extra money but has bad credit. They are not a good idea for someone who has good credit, since the alternatives are much better. A no credit check loan should be used responsibly and handled as you would any other extension of credit.

Always read all information given to you by the lender to make sure you fully understand the terms of the loan. No credit check loans typically have many fees associated with them, along with the high interest rate. You do not want to end up paying too much for your loan.