Wednesday, May 02, 2018

Why does a food truck lender ask about capital in reserve?

When I’m talking to a food truck buyer, particularly a first-timer, I ask whether or not they have any capital in reserve.  I need to know if something goes wrong they can still make their monthly loan payment.

They often respond “if I had any capital, I wouldn’t be coming to you for a loan!"

Here are two recent stories about food truck entrepreneurs who suffered the consequences of a fire or a blown engine.

http://www.newsobserver.com/living/article209872724.html

http://nooga.com/215767/rolling-js-food-truck-owner-launches-kickstarter-for-new-restaurant/#.WtYfKfRIsZk.twitter

If you’re acting as a lender or lessor, you should make sure your operators have either capital in reserve or the right insurance coverages!

Need help with a food truck loan?  Please let me know.

Are you a business who needs equipment financing or working capital?  Marshall Lebovits of Asset Based Funding Solutions has over 30 years of experience in the secured lending industry.  He can be reached at (310) 344-2522 or via email at Marshall@Funding911.com.

Monday, February 26, 2018

Equipment Lease Line of Credit – Rates too Low to Mention!


A major telecom services company was recently referred to me as they were unhappy with the service and lease rates they were receiving from their existing leasing company.

After a quick review of their financials, I introduced them to a major independent leasing company.

Within seven days, they received approval and accepted an offer for a $2 million lease line of credit to cover their 2018 IT equipment purchases.  The lease line was structured with a fair market value purchase option.

The CFO was pleased with a great solution that will enable the company to better manage residual risk and equipment obsolescence.
 
The rates?  If I told you, I would be in big trouble!

Are you a business who needs equipment financing or working capital?  Marshall Lebovits of Asset Based Funding Solutions has over 30 years of experience in the secured lending industry.  He can be reached at (310) 344-2522 or via email at Marshall@Funding911.com.

Wednesday, February 01, 2017

Higher Sales and Improved Margins through Vendor Financing

“We would be out of business without vendor financing” according to the president of a distributor of commercial strength and cardio equipment.  Almost 65 percent of this company’s revenues are generated utilizing a vendor financing program implemented over ten years ago.   

Vendor financing programs provide manufacturers, distributors and dealers from a wide variety of industries the capability to offer customers a convenient way to acquire their products at the point of sale.  A few of the key benefits vendor financing provides include:

  • Improved vendor cash flow through pre-funding, or financing of the down payment, and reduced receivables through collection of the balance upon delivery of the product
  • Improved margins and higher sales by focusing the customer on monthly payments instead of price reductions
  • A faster selling cycle – fewer worries about whether your customer has the money in its capital budget or if they can (or will try to) find financing on their own
  • Transfer of the financing risk to a third party through non-recourse programs
  • The ability to open up new markets including selling your products

With programs that can provide financing in amounts as little as $5 thousand, vendor financing can be implemented to cover most asset types and a variety of customer credit profiles including start-ups and early stage companies.  For amounts up to $100 thousand (and higher), many financings can be approved in as little as one hour after your customer completes a one page application.  For larger transactions, approvals can be obtained as quickly as four hours following the submission of financial statements and tax returns.  Lease terms can extend from 12 to 60 months for equipment with long useful lives sold to qualifying credits.

According to one manufacturer of equipment, the flexibility, creativity and extraordinary support it enjoys through its vendor financing program provides it with a competitive advantage.  Its vice president of sales firmly believes that choosing the right programs and leasing company can be the difference in winning a sales competition.  A few questions to ask in selecting the best leasing company for your business include:

  • Flexibility – Can the financier fund my A, B & C credits?  Can soft costs be included in the financing amount?  Will all credits be financed without recourse to the vendor?
  • Minimums and maximums – How small and how large of a deal can the financier fund?  Any limitations on how much credit it can extend to any given buyer?  Any overall minimum or maximum volume requirements to create a program for your company?
  • Creativity – How many different programs structures and end user offerings can the financier provide?  Will the financier create unique programs to meet the special needs of certain customers? 
  • Risk Management – Will the financier help you evaluate the creditworthiness of prospective customers?
  • Service – What levels of support do you require for sales, marketing, administration and deal structuring?  Do your customers require a personal touch or will a highly automated system be a better fit with your sales methods?

If you can visualize your company as a one-stop solution provider to your customer’s needs through having the ability to offer fast and easy equipment financing, then vendor financing may provide you with new and profitable opportunities. 

Are you a small or medium sized manufacturer or distributor who needs assistance with a vendor financing program?  Marshall Lebovits of Asset Based Funding Solutions has over 30 years of experience in the secured financing industry and creates vendor financing solutions with Baycap.  He can be reached at (310) 344-2522 or via email at Marshall@Funding911.com.

Wednesday, February 10, 2016

Back in the Saddle…Again


After almost six years in commercial banking, I have returned to advising growing businesses throughout the USA on a wide variety of asset based funding solutions.

Companies who can benefit from my services are often non-bankable credits who lack access to capital for reasons including short time in business, hyper-growth sales, weak cash flow and highly leveraged balance sheets.  These companies will typically have revenues of $500 thousand to $30 million and will have B2B accounts receivable, inventory and equipment that can be offered to a lender as collateral for repayment of a loan.

If your business has receivables, inventory and receivables and needs over $50 thousand of financing, please contact me at 310-344-2522.

Friday, March 12, 2010

Lunch Special of the Day

A residential foreclosure contractor hired by Bank of America reportedly not only padlocked the wrong house, but confiscated the home owner's pet parrot, Luke.

Earlier this week, The New York Times DealBook section reported that Bank of America has been instructed to shrink as regulators focus on banks that "are too big to fail".

One reader not only rejected Bank of America's denial of the guidance, but commented on the "parrot-napping" as well.
In an unrelated cost savings move, Bank of America has announced that any pets seized in a property foreclosure action will, in the future, be served on the lunch menu in the employees’ cafeteria.

— MJA
By the way, a traumatized Luke was eventually returned to his owner by the contractor.

Need help finding the right lender or telling your story the right way for your California business? Read "Matchmaking for Business Loans" and give me a call!

Tags : Bank of America , too big to fail

Wednesday, February 24, 2010

Bank Lending - Sharpest Decline Since 1942

Shocker! U.S. banks last year posted their sharpest decline in lending since 1942 according to today's Wall Street Journal (subscription required).

I'm trying to figure out why this article was front page headline worthy for The Wall Street Journal no less. It's old news.

Senior bank lending officers have been reporting for two years about tightening credit. In fact, they tightened credit so much, they can't tighten any more.

Many banks are still amongst the walking wounded due to troubled commercial real estate loan portfolios. Yesterday, the FDIC announced its problem bank list hit a 16 year high of 702 troubled institutions. Many of these banks will likely fail and others will be unable to lend in support of an economic recovery for a long time to come. The FDIC shuttered 140 banks in 2009 and 20 banks year-to-date 2010.

In the meantime, the Commercial Finance Association (CFA) just released its Quarterly Asset-Based Lending Index, Q4 2009, revealing continued stability and signs that U.S. businesses are seeking alternative sources of stable funding from non-bank, asset-based lenders. In the fourth quarter of 2009, total committed credit lines grew by 1.2 percent among asset-based lenders, while 50 percent of respondents reported an increase in new credit commitments.

By the way, Harry Reid's stripped down jobs bill just stripped out additional funding for SBA small business loans. The original $85 billion "jobs" bill included additional funding for the SBA to continue offering small businesses enhanced loans guarantees and elimination of guarantee fees. The SBA just exhausted its $855 million of stimulus funds which it claims resulted in over $20 billion of loans to small businesses in the last 12 months.

Notwithstanding all of the backwards looking news, I am seeing the green shoots of recovery. A couple of very large banks may be feeling the populist pressure to pump up lending and are adding to their lending teams. Even Huntington Bank, notwithstanding five consecutive quarters of losses, has announced it is doubling its annual small business lending and has announced it will originate $4 billion of new loans in the next three years.

Need help finding the right lender or telling your story the right way for your California business? Read "Matchmaking for Business Loans" and give me a call!

Tags : small business , bank loans , SBA loans , asset based loans , Commercial Finance Association , Huntington Bank