When your bank says no…

Many of the companies I have worked with over the past six months are looking for an additional way of acquiring money when they cannot go to a bank.  In many cases, these are start-up businesses without the credit or assets to acquire a traditional loan.  In others, they may have a loan already, but just need some extra cash.

Factoring your receivables can be a good solution to help improve your cash flow.  Here’s some more info about factoring, click here.

Invoice factoring is a reliable source of financing for your business as over the years many businesses have used it to generate quick capital. The best way to describe it is as the sale of accounts receivables. Perfect for a start-up business or businesses in need of capital fast; invoice factoring allows lenders to make a decision based on the clients’ credit decisions, and not the business credit.

It can take a long time to get approved for a bank loan, and most businesses get turned down when they go after a regular loan. That is where invoice factoring comes in because it doesn’t take much to get approved. All it takes is some clients with good payment histories, and you will have the cash quick.

The process is simple; you sell your accounts receivables for a discount of maybe 5% to 10% of the actual value to the lender, or the factor. The factor will than work to collect the accounts receivables for the full amount which is where they make their profit. Even though you lose some revenue and profits, it is better for your business sometimes to have the capital quickly to fund new and better projects.

Here are some more benefits to invoice factoring:

1. You gain working capital without adding debt or diluting your equity
2. You can finally begin to take advantage of early payment discounts from suppliers for prompt payment
3. You can purchase equipment that will increase your profitability
4. It can protect and improve your credit ratings
5. It can increase your sales through credit extensions
6. And most importantly, it allows you to focus on the success of your business instead of worrying about your cash flow.

- hope that helps!

Gas prices poised for spring spike

Gas prices jumped on Friday to their highest level since June.  Analysts are suggesting this may be a preview of a coming Spring price surge.

Get the full article at: http://www/news.yahoo.com/s/ap/20080223/ap_on_bi_ge/oil_prices

There appears to be some economists that are suggesting that prices will remain less than $3.20 on a national average through the spring.  With the economy positioned, if not already in a recession, rising gas prices does not bode well.

Barring a major supply disruption, or a war-related disruption (possible), small business owners who operate fleets of vehicles may want to budget for rising gas costs.  Anticipating a spike, may put your business in a better cash state, than expecting prices to remain stable.  Just too much uncertainty for me to be very optimistic.

For more small business resources, look at our website http://www.bedrockfinancing.com

Revisiting your business plan in 2008

As I look outside my office window, I am watching the snow fall quickly cover the bare branches of an oak tree.  It’s quiet this afternoon.  Groceries stores are busy with people running in to grab toilet paper, milk, and bread.  It’s a Baltimore tradition.  This gentle snow could be the blizzard of 2008.  Keep us housebound for days… sure.

The peaceful snowfall helped me to think about what you can do if this is a slow time for your business.  If you own a restaurant, January and February are typically slow months.  People get back to work, find out they have spent too much on presents, and decide they are going on diets.  Health clubs are swamped with the largest group of new members in any month.  So what can you do if you have a little more free time?

How about revisit your business plan. Read 2007’s plan and see what you have accomplished.  Are you still on track for 2008?  Have you made your changes for the 2008 year?  To operate at peak efficiency, your business must have a good sense of direction.  You cannot lead to a goal that you have not set.  You can wander aimlessly, having success, having failures.  But how can you really measure success?  It needs to be measured in relation to the milestones set.

Take the time to pull out your business plan. Give it a good read through.  Focus some effort on evaluating the goals and projections for 2008.  What actions can your company take to make 2008 your company’s most successful year ever?

We Are Marshall

Just watched a great movie with my son tonight.  “We Are Marshall” was a great, inspirational movie.  Based on the true story of the 1970 Marshall team that died in a plane crash.  They lost their coaches, players, and some financial boosters of the school.

The coach had some great lines, (don’t know how many were made up or was he that motivational? 

Anyway, if you have not seen the movie, rent it.  Somewhere along the line, the movie will touch you. 

Are you smarter than a 12th grader?

I just finished reading a disturbing piece in Money Magazine, 35th anniversary special edition.

Quiz: Which investment produced the best returns over the past 20 years?  When asked in a recent survey, 18-24 year olds responded:

a) 52% said savings accounts

b) 20% said bonds

c) 16% said stocks

In fact, they got it backwards.  Stocks outperformed savings accounts by 11% points annually,  bonds by 9 % points.

Wow.  It makes you wonder what our education system is teaching kids these days.  But really, where do kids go for an education on money?  If their parents don’t teach them, who will?

First and Foremost

Yesterday, while at a birthday party, I happened to meet a cousin of mine who was looking into buying a liquor store. We talked and hopefully, we can work together to evaluate the financials of the business.

It reminded me of how important an elevator pitch is to your success. Whether you own a business or are an employee, that 15 second blurb about what you do, is vital to your success. If I was not able to clearly define what my company did, I might have never found about his liquor business.
Visit our website at www.bedrockfinancing.com
I’ll work on more tips over the next several days. Stay tuned. For any financing questions or needs, please check out my website.