Wednesday, November 29, 2006

Unique Business Loans for Minorities

SBA-like business loans to minority businesses when the bank cannot.

That sums up the Certified Minority Lenders program created by the National Minority Supplier Development Council and the Business Consortium Fund (BCF).

BCF is funded primarily through investments and contributions made by NMSDC corporate members and other organizations including companies who wish to support minority businesses in the United States including Walmart, General Electric, Sears, Boeing and Coca Cola. The targets for these loans are businesses controlled by U.S. citizens who are Asian, Black, Hispanic or Native American who are conducting business with a member of the National Minority Supplier Development Council which is practically any household name in corporate America.

Minority businesses that qualify may have weak cash flow, negative equity, a history of losses and little to no secondary source of repayment. Even with these challenges, a prospective borrower must still have solid management and sales experience in their field. The specific financial requirements will vary from account to account based upon the underwriting criterion of the lender – you had better have a good story and a complete application.

If your business qualifies, you can apply for business loan programs ranging in amount from $100 thousand to $1 million at rates that currently don’t exceed 12%. The loan can be structured as a short term or long term borrowing and proceeds can be used for working capital, contract financing, equipment purchases and other business purposes.

Generally, the borrower must pledge sufficient assets, to the extent they are reasonably available, to secure the business loan. Personal guaranties are required from all principal owners of the business. Liens on personal assets of the principals also may be required.

Sound interesting? If I can help you with an introduction to a lender who can lend nationwide, please give me a call!

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Tuesday, November 28, 2006

Uncle Sam Offers Contracting Bonanza

According to All, the federal government is about to launch a massive upgrade of its computer systems that should present a multibillion-dollar opportunity for small technology vendors.

All cites a BusinessWeek report that the General Services Administration has already advanced contracts to upgrade the government's phone and computer systems, and the contracts include a $35 billion set-aside for small, minority, and disadvantaged businesses.

The contracts are considered just the tip of the iceberg as the government gears up to overhaul its communications and information technology systems over the next 10 years.

As I mentioned in my posting on government contracts funding, if you're providing products or services to the government or to a prime contractor fulfilling a government contract, don't get caught in a working capital squeeze. Cost effective financing is available - feel free to give me a call and see if I can help.

Need help finding the right lender or telling your story the right way? Read "Matchmaking for Business Loans"

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Wednesday, November 22, 2006

SBA Announces New Women's Business Centers

Just last night, I was asked if there were any resources available specifically to assist women in their quest to become successful entrepreneurs and find business loans. The answer is "yes"!

In fact, the SBA just announced funding to add 19 new women's business centers throughout the United States in addition to continuation of funding for 80 existing women's business centers.

The women's business center program served more than 144,000 clients across the country last year, providing help with financial management, procurement training, marketing and technical assistance.

And of course, that assistance includes advice on business loan programs available through the SBA including Express, 504 and 7(a) business loans.

Happy Thanksgiving!

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Tuesday, November 21, 2006

As Much Money As You Want

There is so much money chasing M&A deals right now that there is growing concern that a bubble may be developing.

As reported in the LA Times, private equity buyers have announced about 1,000 U.S. takeovers this year worth a record $356 billion, according to data tracker Thomson Financial.

Private equity firms have raised an unprecedented $178 billion in new capital from investors this year, about 10 times what they raised in 1995, according to data firm Dealogic.

That's a lot of money!

Back in August, I wrote that the M&A markets were at record levels so this LA Times article isn't new news to my faithful readers. The big questions are "when will M&A activity slow down?" and "will it be driven by buyers who put their foot down on escalating prices or lenders who refuse to provide the increasingly risky business acquisition loans?"

By the way, if funding sources aren't lined up outside your door and you need help finding the right lender or telling your story the right way, read "Matchmaking for Business Loans" and give me a call.

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Monday, November 20, 2006

There's a New Bank in Town

There's a new bank in town and a good chance that it is focused on providing business loans to the Latino, Indian, Vietnamese, Chinese, Cambodian or Korean business community.

According to the LA Times, the specialized focus of these banks allows these lenders to establish a foothold against a crowded field of competitors that may have a larger array of banking products.

New, smaller banks continue to experience great success in California in particular - no California commercial bank founded from 1988 on has failed according to the Federal Deposit Insurance Corp - and there's no shortage of investors waiting to start another new bank in the state.

What's the secret of their success? Seems to be a focus on developing relationships with a specific target customer and being creative with business loan solutions that meet borrower needs.

Do you need help finding the right lender or telling your story the right way? Read "Matchmaking for Business Loans" and give me a call!

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Tuesday, November 14, 2006

Don't Make this Pricing Mistake!

While reading a Forbes article on product pricing, I thought about a mistake companies make when pricing their products - they forget to add in the cost of extending open credit terms.

If you're allowing your customer to pay for your products on terms and they're not paying on time, it could be significantly impacting your bottom line.

If you need to borrow to make payroll and cover other operating costs, you should be incorporating the interest cost into your product pricing. Money tied up in accounts receivable increases your borrowing costs which ignored will reduce your margins and your cash flow.

In an earlier posting about working capital, I pointed you to a free DSO calculator to help you calculate the cost of your accounts receivable. If you're re-evaluating your pricing for 2007, it may be worth another look!

And if your accounts receivable are piling up and exhausting your cash flow, read "Matchmaking for Business Loans" and give me a call.

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Monday, November 13, 2006

Wall Street Journal - Can You Afford to Say Yes?

Today's Wall Street Journal section on Small Business included a follow up story on PenAgain, which had achieved the small business holy grail of landing a big order from Walmart.

While a small business might typically be thrilled by such an event, the challenges that it presents correctly had the business owners acknowledging that they couldn't afford to say "no", yet they might not be able to afford to say "yes".

From a financing perspective, the cash flow of a small business can be overwhelmed by receiving significant orders from one big customer. In the short run, how does a small business fund the production costs of delivering the goods? PenAgain has seen big orders come in not only from Walmart, but from Office Depot and Walgreen. CVS, Staples, OfficeMax and Bed Bath & Beyond have all shown interest in their products as well.

So how did PenAgain obtain the funding needed to meet the explosive demand for its growing product line? PenAgain has lined up purchase order financing to finance an order upfront in return for a share of the profit in return.

And to pay off the purchase order financing, PenAgain may very well have lined up a factoring line of credit as well in order to borrow against the receivables to pay off the purchase order financing once the product succesfully ships.

This story is a perfect example of how a small business can obtain non-bank business loans to provide the working capital necessary to close big sales.

Need help finding the right lender to fund your explosive growth, read "Matchmaking for Business Loans" and then give me a call.

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Sunday, November 12, 2006

William Shatner Hosts Show Me the Money

If you came to Show Me the Money expecting to find millions of dollars, you may have come to the right place. However, if you came to Show Me the Money expecting to read about the new variety and game show series to be hosted by Emmy-winning television legend William Shatner, I regret to inform you that you’ve come to the wrong place.

But while you’re here, look around and make yourself at home. You can read about what’s going on in the world of business loans including factoring, asset based revolvers, bank loans, purchase order finance, equipment leasing and hard money real estate loans.

All great solutions when the bank has said “no” and you need a business loan to grow your company or save it from bankruptcy!

So “live long and prosper” and call me when the bank says no!

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

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Monday, November 06, 2006 - Got Time?

According to a new survey by Robert Half, reports that nearly half (46 percent) of CFOs cited time management as their greatest challenge these days. This was more than double the second most common response — keeping up with technology.

What's your greatest challenge these days?

If your greatest challenge is finding the right lender or telling your story the right way, read "Matchmaking for Business Loans".

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Bank of America - Growth Strategies

Every other month, Bank of America Business Capital sends me an e-newsletter, Capital Eyes, that helps mid-size and large businesses and their advisors stay informed about developments in leveraged finance.

The most recent edition led with a story on current credit market conditions and what steps a business owner could take to ensure it has access to sufficient capital to continue to grow in the coming months.

My takeaways from this article are twofold and apply to any size company seeking a business loan.

First, while the credit markets are flush with capital, borrowers will likely see changes as the economy enters a less attractive phase of the credit cycle. Lenders will be more picky about which business loans they fund. By the way, this is consistent what I hear directly from chief credit officers, bankers and loan underwriters.

Second, these coming changes will emphasize how important it is to have a relationship with a lender who understands your situation and has the products and creativity to provide you with a business loan best suited to achieving your growth plans.

When should you take action for your business? There's no time like the present.

Need help finding the right lenders or telling your story? Click here to read "Matchmaking for Business Loans"

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Wednesday, November 01, 2006

Congratulations! You're a Lender!

On August 30th, I wrote that businesses extending open credit terms need to be aware of the risks and act like a factor. I just received the weekly newsletter of Hedman & Associates reminding companies that when they issue credit, they've essentially become a lender increasing their own business risk.

For some tips on teaching your staff how to minimize the risks of being a lender, consider these ten levels of investigation to follow when deciding whether to offer credit to your customer.

If cash flow gets tight because you're acting like a lender and you need a business loan secured by your accounts receivable, read "Matchmaking for Business Loans" and then give me a call.

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