Cash flow is one of the most significant features for running small businesses. It is one of the single most crucial reasons why many businesses fail , regardless of how good the business is. Managing cash flow is critically important in the smooth running, survival and success of any small business. This action will look at what cash flow is, and use some examples to show how cash flow can make the difference between success and failure. Failure meaning collapsing in business. If you are penniless then you are unable to pay your debts. A lot of us often use the term bankrupt' to depict this but strictly, only an individual can be declared bankrupt, which can cause a small business to go bankrupt. Small businesses are declared as in debt. The principle however is the same. Some businesses deal with so-called personal insolvency' which in effect means bankruptcy so the use of the terms can sometimes be perplexing.
Ever heard of a trade network? Here's how it works. Let's suppose a Business A wants to open a booth at an exhibition but it needs cash to do so. Business A has broken-down mechanic equipment that Business B is interested in fixing and selling. After selling the equipment he can use the cash as bartering dollars to pay for another network member's Business C display booth. Trading is an excellent means to conserve cash and it can really pay off, quite literally.
So many small businesses bill clients on a 30-day cycle. But if you have to pay your workers twice a month, this can cause cash-flow difficulties. Instead invoicing clients twice a month , One company did so and reported that more than 90% of its clients didn't mind the change because it still allowed them 30 days to pay. Another issue is bad credit and for that an effective way to prevent it, is to send pre-lien notifications to each customer on all jobs over and above a certain sum , lets' suppose 3000 dollars The notices should state that the small business is protecting its right to place a lien on the merchandise that was purchased if the bill isn't paid within the pre-set time. One large company reports that after sending out the notice, bad debt shrunk by 0,000 in the 8 to 10 months.
To increase cash flow merchant cash advance can help make a bridge leading to a successful business.
Showing posts with label Small. Show all posts
Showing posts with label Small. Show all posts
Monday, October 29, 2012
Wednesday, August 8, 2012
Lending And Loans For Small Apartments
There is the old question that comes up every now and then, -
Should I buy that studio apartment?
They are usually marketed with a very attractive rental return however that's sometimes where the good news ends.
Here is some of the noise that surrounds them-: They won't lend against small inner-city studio apartments, You won't get approval if the floor size is less than 50 sqm, Student apartments are not an option, Some lenders won't lend for apartments in large complexes, Hotel or motel conversions are no good, The location of the unit within the complex is important
While being just noise some of these points are somewhat valid.
The recent credit crisis has put the brakes on a lot of lending overall and small apartments have not been shielded from this
The biggest hurdle is usually lender's mortgage insurance (LMI).
They are the ones imposing all the restrictions that are passed onto the bank.
If you require LMI this is where the hard work starts
Hurdles:
Title. Strata/stratum title is normally acceptable, as are group' titles. Mortgage insurers aren't usually afraid of company title and will lend, though they may lower their LVR.
Size: While this might not be important to the lender, you can expect the mortgage insurer to have minimum limits on the floor space. Always aim to avoid any apartments with a floor space of less than 50 sqm. It must be 50 sqm of actual living area' (not balconies and car space etc). In special cases this may be stretched down to 40 sqm but the property would have to be in a blue-chip capital city area. The Bank may not impose a floor-space limit but notes that LMI might fail the application for that very reason.
Location in the development/complex. One important factor may be whether it's in a good location in the development or if it's at the dark shaded noisy rear corner of the complex.
Changing from commercial or industrial to residential. Hotel conversions, holiday lettings and serviced apartments (commercial) lettings rather than residential units fall under completely different lending requirements (possibly commercial). So if they are being converted you may not get finance until the conversion is complete providing it meets all council's ordinances and general lenders' requirements, most lenders will proceed but there may be a reduced LVR or restrictions on LMI. The biggest reason is you're reliant upon the performance of the management company looking after the apartments.
Number of apartments in a development: There might be a limit on the number of apartments within the one development that you can put up for mortgage insurance.
The bank may limit lending on six apartments in any one development or limit lending for no more than 25 per cent of a development
Do you want an investment apartment loan? Contact Us Here and let us help you out.
More Hoops?? You Are Kidding
Here are some extras hoops you may have to jump through for finance:
-More thorough valuation inspections and reports.
-A lower LVR (70 to 80 per cent max, though some, usually non-bank lenders, only go to 60 per cent) a higher deposit required.
-Reduced maximum mortgage amount.
-More expensive LMI if even available.
-Reduced consideration of the rental income to allow for longer vacancies.
-A call for additional or cross-collateral security(see earlier post here).
-Downright refusal of application at worst!
The fundamentals of real estate remain important, not necessarily the fact that there's a studio apartment. There are plenty of studio apartments that have doubled their value over 10 years. The unit my have great rental returns low vacancy and be located very well so a bit of hard work and research at the start may pay off long term!
So Where Now->
Will your apartment qualify for finance?
Should I buy that studio apartment?
They are usually marketed with a very attractive rental return however that's sometimes where the good news ends.
Here is some of the noise that surrounds them-: They won't lend against small inner-city studio apartments, You won't get approval if the floor size is less than 50 sqm, Student apartments are not an option, Some lenders won't lend for apartments in large complexes, Hotel or motel conversions are no good, The location of the unit within the complex is important
While being just noise some of these points are somewhat valid.
The recent credit crisis has put the brakes on a lot of lending overall and small apartments have not been shielded from this
The biggest hurdle is usually lender's mortgage insurance (LMI).
They are the ones imposing all the restrictions that are passed onto the bank.
If you require LMI this is where the hard work starts
Hurdles:
Title. Strata/stratum title is normally acceptable, as are group' titles. Mortgage insurers aren't usually afraid of company title and will lend, though they may lower their LVR.
Size: While this might not be important to the lender, you can expect the mortgage insurer to have minimum limits on the floor space. Always aim to avoid any apartments with a floor space of less than 50 sqm. It must be 50 sqm of actual living area' (not balconies and car space etc). In special cases this may be stretched down to 40 sqm but the property would have to be in a blue-chip capital city area. The Bank may not impose a floor-space limit but notes that LMI might fail the application for that very reason.
Location in the development/complex. One important factor may be whether it's in a good location in the development or if it's at the dark shaded noisy rear corner of the complex.
Changing from commercial or industrial to residential. Hotel conversions, holiday lettings and serviced apartments (commercial) lettings rather than residential units fall under completely different lending requirements (possibly commercial). So if they are being converted you may not get finance until the conversion is complete providing it meets all council's ordinances and general lenders' requirements, most lenders will proceed but there may be a reduced LVR or restrictions on LMI. The biggest reason is you're reliant upon the performance of the management company looking after the apartments.
Number of apartments in a development: There might be a limit on the number of apartments within the one development that you can put up for mortgage insurance.
The bank may limit lending on six apartments in any one development or limit lending for no more than 25 per cent of a development
Do you want an investment apartment loan? Contact Us Here and let us help you out.
More Hoops?? You Are Kidding
Here are some extras hoops you may have to jump through for finance:
-More thorough valuation inspections and reports.
-A lower LVR (70 to 80 per cent max, though some, usually non-bank lenders, only go to 60 per cent) a higher deposit required.
-Reduced maximum mortgage amount.
-More expensive LMI if even available.
-Reduced consideration of the rental income to allow for longer vacancies.
-A call for additional or cross-collateral security(see earlier post here).
-Downright refusal of application at worst!
The fundamentals of real estate remain important, not necessarily the fact that there's a studio apartment. There are plenty of studio apartments that have doubled their value over 10 years. The unit my have great rental returns low vacancy and be located very well so a bit of hard work and research at the start may pay off long term!
So Where Now->
Will your apartment qualify for finance?
Sunday, July 15, 2012
Guerrilla Loan Tactics for Small Business Finance
Although the suggested actions in this article might be seen as a last resort to be undertaken only when all else fails, in reality these suggestions should probably be considered by most commercial borrowers in the early stages of their commercial financing search due to the growing failure of banks to provide a normal level of business funding. The necessity of resorting to guerrilla loan tactics has been accelerated by the decreased performance of commercial banks in providing effective small business finance programs. Hopefully this report will serve as a short survival guide for business owners when they are seeking small business loans.
Business Consulting as a First Line of Defense
To put it succinctly and candidly, the current commercial lending climate is no place for amateurs when dealing with more complicated small business finance programs and banks which predominantly are not functioning in a normal manner. The use of business consulting and a commercial finance expert should be considered as one way for business owners to overcome a substantial information gap. A business consultant experienced in the ways of overcoming small business loan problems is a pragmatic solution to a situation that most commercial borrowers would admittedly prefer did not exist in the first place. A business consultant with an appropriate level of expertise will normally require a business owner to pay a reasonable fee for their specialized services. This professional cost will typically be justified when compared to the potential financial damages if specialized help is not acquired.
Determine Whether Your Bank is a Good Bank or a Bad Bank
We have published a separate report about the growing need to determine if a commercial bank is a good bank or a bad bank. The most practical gauge for defining whether a bank is good from a small business owner perspective will often be guided by whether the needed commercial financing can be provided or not. Although banks have been broadly proclaiming that they are providing a normal level of commercial funding, in reality there are multiple reports indicating otherwise. An experienced business finance consultant can serve as a valuable resource based on their advanced knowledge of which lenders are truly active in making working capital loans and commercial mortgage loans. If a particular bank is in fact not providing commercial loans as usual, it certainly might be because they do not have sufficient resources to do so. While this bank might not feel they deserve the bad bank label, our perspective is that results count. On the only scorecard that matters to most commercial borrowers, the small number of good banks will gradually become obvious based on their healthy business lending habits. In the meantime, business owners should expect to need some professional help in finding these few remaining good banks.
Be Prepared to Fire Your Bank and Your Banker
For small business owners, the idea of firing their banker has perhaps not occurred to them yet. The average business owner often thinks of their banker as one of the family or at least a close business partner. But with a guerrilla business loan perspective that is appropriate in the midst of banking chaos currently seen almost everywhere, small business owners must increasingly look out for their own best interests because it is unlikely that their banker is up to the task anymore (even if their commercial banker is their best friend). An escalating number of times when their commercial banker is unable to achieve the results which were originally offered or discussed will ultimately serve as one of the most predictive signs that a commercial borrower might need to fire their banker.
Business Cash Advances and Other Options for Working Capital
For small businesses to survive in an erratic economy, the use of guerrilla loan tactics means that some small business finance options which borrowers previously ruled out because they were considered too complicated (or too expensive) might deserve a second look. A key example of a commercial financing strategy which has frequently been a Plan B for many merchants but often not utilized in their final choice for acquiring more working capital is a business cash advance program (often referred to as credit card factoring). The use of credit card processing to obtain working capital cash now has more practical appeal for the typical small business owner who needs more cash for their daily operations, particularly if they have been subjected to an increased requirement for collateral and a sudden reduction in business lines of credit by their commercial lenders.
More Guerrilla Tactics for the Small Business Survival Guide
This brief discussion was intended to illustrate the importance for small business owners doing whatever it takes to survive in a tough business climate. The guerrilla loan tactics noted above will be a good starting point for most business owners. But there are more commercial loan options which should also be considered by commercial borrowers before finalizing their commercial mortgages, small business loans or SBA loan financing.
Business Consulting as a First Line of Defense
To put it succinctly and candidly, the current commercial lending climate is no place for amateurs when dealing with more complicated small business finance programs and banks which predominantly are not functioning in a normal manner. The use of business consulting and a commercial finance expert should be considered as one way for business owners to overcome a substantial information gap. A business consultant experienced in the ways of overcoming small business loan problems is a pragmatic solution to a situation that most commercial borrowers would admittedly prefer did not exist in the first place. A business consultant with an appropriate level of expertise will normally require a business owner to pay a reasonable fee for their specialized services. This professional cost will typically be justified when compared to the potential financial damages if specialized help is not acquired.
Determine Whether Your Bank is a Good Bank or a Bad Bank
We have published a separate report about the growing need to determine if a commercial bank is a good bank or a bad bank. The most practical gauge for defining whether a bank is good from a small business owner perspective will often be guided by whether the needed commercial financing can be provided or not. Although banks have been broadly proclaiming that they are providing a normal level of commercial funding, in reality there are multiple reports indicating otherwise. An experienced business finance consultant can serve as a valuable resource based on their advanced knowledge of which lenders are truly active in making working capital loans and commercial mortgage loans. If a particular bank is in fact not providing commercial loans as usual, it certainly might be because they do not have sufficient resources to do so. While this bank might not feel they deserve the bad bank label, our perspective is that results count. On the only scorecard that matters to most commercial borrowers, the small number of good banks will gradually become obvious based on their healthy business lending habits. In the meantime, business owners should expect to need some professional help in finding these few remaining good banks.
Be Prepared to Fire Your Bank and Your Banker
For small business owners, the idea of firing their banker has perhaps not occurred to them yet. The average business owner often thinks of their banker as one of the family or at least a close business partner. But with a guerrilla business loan perspective that is appropriate in the midst of banking chaos currently seen almost everywhere, small business owners must increasingly look out for their own best interests because it is unlikely that their banker is up to the task anymore (even if their commercial banker is their best friend). An escalating number of times when their commercial banker is unable to achieve the results which were originally offered or discussed will ultimately serve as one of the most predictive signs that a commercial borrower might need to fire their banker.
Business Cash Advances and Other Options for Working Capital
For small businesses to survive in an erratic economy, the use of guerrilla loan tactics means that some small business finance options which borrowers previously ruled out because they were considered too complicated (or too expensive) might deserve a second look. A key example of a commercial financing strategy which has frequently been a Plan B for many merchants but often not utilized in their final choice for acquiring more working capital is a business cash advance program (often referred to as credit card factoring). The use of credit card processing to obtain working capital cash now has more practical appeal for the typical small business owner who needs more cash for their daily operations, particularly if they have been subjected to an increased requirement for collateral and a sudden reduction in business lines of credit by their commercial lenders.
More Guerrilla Tactics for the Small Business Survival Guide
This brief discussion was intended to illustrate the importance for small business owners doing whatever it takes to survive in a tough business climate. The guerrilla loan tactics noted above will be a good starting point for most business owners. But there are more commercial loan options which should also be considered by commercial borrowers before finalizing their commercial mortgages, small business loans or SBA loan financing.
Wednesday, June 27, 2012
Commercial And Consumer Micro Small Ticket Banking And Leasing Is Accessible To Dealers And Vendors Clients.
Commercial and consumer micro small ticket lending and leasing is offered to dealers and vendors customers. In this economy, consummating sales is difficult enough and this available financing could be a deal maker for the dealers and vendors clients.
U.S Corporate Capital Leasing Group offers small-ticket consumer and commercial micro ticket lending and equipment leasing to all new and credit-challenged businesses of any volume to its customers through our bank network. To assist close more deals, we work with different micro ticket lenders providing our customers with a choice of banking options, including start up businesses.
U.S Corporate Capital Leasing Group concentrate on providing financial solutions for micro-ticket transactions, or equipment ranging from 0 to ,000. The majority of other leasing companies simply won't consider Micro-ticket leasing because they are paying attention on more high-priced equipment deals
Our lenders can support more of the customers that dealers serve, and canin general approve 50% of the clients that other leasing companies can't or won't. Our banks use their own Proprietary Credit Scoring Model and Risk Adjusted Pricing unlike other leasing companies that make use of a pass / fail system. This means they can allow more credit situations, including:
Start-up businesses with no business credit history
Businesses in certain industries that are usually disqualified by other leasing companies
Businesses with challenged credit histories
Our lenders offer both consumer and commercial leases.
No Tax Returns, Financial Statements, Asset Documentation
Products that are not accepted include titled equipment, 100% software, fixtures, bankcard terminals, ATM, used copiers
For start-up restaurant lease transactions will be subject to a minimum security deposit of 5% along with one advance payment. Security deposits can either be applied towards the end of the lease or be returned at end of lease.
Our Lenders lease nationwide, including Alaska and Hawaii, however Puerto Rico and Canada is excluded.
In conclusion, these difficult economic times have put ahuge strain on the vendor, dealer and the client This program offers the vendor/dealer a way to get his client financed without all the red tape. This can generate a stimulus for sales and decrease the burden of trying to get a customer authorized for a small ticket item. For the client without the capital available to get the deal bought for cash, this also gives them a win win condition to get the deal done. These hard economic times have restricted the available financing in the marketplace but this is a excellent answer for all.
U.S Corporate Capital Leasing Group offers small-ticket consumer and commercial micro ticket lending and equipment leasing to all new and credit-challenged businesses of any volume to its customers through our bank network. To assist close more deals, we work with different micro ticket lenders providing our customers with a choice of banking options, including start up businesses.
U.S Corporate Capital Leasing Group concentrate on providing financial solutions for micro-ticket transactions, or equipment ranging from 0 to ,000. The majority of other leasing companies simply won't consider Micro-ticket leasing because they are paying attention on more high-priced equipment deals
Our lenders can support more of the customers that dealers serve, and canin general approve 50% of the clients that other leasing companies can't or won't. Our banks use their own Proprietary Credit Scoring Model and Risk Adjusted Pricing unlike other leasing companies that make use of a pass / fail system. This means they can allow more credit situations, including:
Start-up businesses with no business credit history
Businesses in certain industries that are usually disqualified by other leasing companies
Businesses with challenged credit histories
Our lenders offer both consumer and commercial leases.
No Tax Returns, Financial Statements, Asset Documentation
Products that are not accepted include titled equipment, 100% software, fixtures, bankcard terminals, ATM, used copiers
For start-up restaurant lease transactions will be subject to a minimum security deposit of 5% along with one advance payment. Security deposits can either be applied towards the end of the lease or be returned at end of lease.
Our Lenders lease nationwide, including Alaska and Hawaii, however Puerto Rico and Canada is excluded.
In conclusion, these difficult economic times have put ahuge strain on the vendor, dealer and the client This program offers the vendor/dealer a way to get his client financed without all the red tape. This can generate a stimulus for sales and decrease the burden of trying to get a customer authorized for a small ticket item. For the client without the capital available to get the deal bought for cash, this also gives them a win win condition to get the deal done. These hard economic times have restricted the available financing in the marketplace but this is a excellent answer for all.
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