Category Archives: Small Business Lending

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Cashflow Management

Key Business Issues for Small Businesses – Cashflow Management

Here are the Five Key Rules:

Many business people and entrepreneurs are extremely brilliant at what they do – creative, inspirational and enormously energetic. If they don’t recognise the realities of running a commercial business, the sad truth is that this counts for nothing.

Cashflow means Life or Death:

# Make Cashflow Management a fundamental and absolute priority – it’s the oxygen of your business.
# If you don’t want to do it, then make it an absolute priority for one of your team – and make sure they know what they’re doing.

Be clear about the Risk you are taking:

# Don’t make this a gamble.
# Don’t depend on any feelings of goodwill towards the client – it’s not a charitable donation.
# Find existing suppliers to talk to about their payment experience.

Be in Full Control of the Process:

# Be very precise about what the payment terms are.
# Get a payment up front – say 30% – and then 30% for achieving a clear milestone with the balance on completion.
# Build a factor for late payment into your pricing – say 10%.
# Offer a discount for prompt payment – but allow for it in your pricing.

The End Game:

# Use a third party to make chase up calls – friend or family – keeps you cool!
# Chase up after agreed payment date.
# If it stagnates, send out diarised letters 45/60/90 days.
# Think about the legal remedies you may have – in the UK, for example, the Small Claims Court if the debt is under ₤ 5,000.
# Use a debt collection agency.
Learn from the experience. What would you do differently next time?

Ensure the Client Understand your Regulations:

# Take time to find out what the client payment process is.
# Issue your invoices on time.
# Phone the client to make sure invoice has been received.
# Get to know someone who matters in the accounts department – they often respond to some TLC.
# Is your team totally aware of what they need to do here – are they making concessions on your behalf?
# Chase immediately they become overdue – but don’t assume the worst – is it can pay/snafu or can’t pay/cashflow?
When they will pay, # Get a clear commitment as to.


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Join a Small Business Association

Business networking

Business networking can be a valuable tool in your business survival and success. One of the most cost effective ways to build strong relationships with your customers, suppliers and other industry stakeholders is to join the right type of association.

Join associations that your customers, or potential customers, belong to; as well as other industry and business stakeholders (such as suppliers, competitors, your community). Also look at associations where the end customers participate if your customers sell to others. Typically the cost of joining an industry association is not that high; and is, in fact, relatively inexpensive when you consider that you will be able to directly reach customers (and often reach them in a way that is more effective and meaningful in building relationships).

Once you’ve joined, you need to attend association meetings and participate in association events. To be even more effective: join the association board or an association committee.

In addition, you will gain valuable contacts and have better access to business resources for your industry. The benefits to members of joining associations include:

Excellent ability to connect with customers and other stakeholders in your industry;
Association membership will also provide you opportunities for contact with potential customers and with suppliers (who may provide you with referrals to prospective customers).

Industry educational programs:

Access to hard-to-find industry research and statistics (these often include invaluable benchmark studies and business performance metrics).

Industry conferences:

Group discounts on business services (such as cell phone programs, merchant discount programs, gas discounts, courier programs, and more).

Supporting the industry association to act officially or unofficially as lobbyists for the industry they represent to all levels of government.

Some industry associations have certification programs for individuals (such as the certified sales professional program) and for companies (such as programs that certify companies that have achieved a certain professional and/or business level).

And, often membership in an association will give you access to the membership list (your new contacts list) once you become a member.

Other business associations to consider are your local Chamber of Commerce, your Board of Trade, the Small Office Home Office (SoHo) organization and whatever else is available in your area. These business associations provide you with a broader business network and business community; you need to assess whether or not you can build a partnership or alliance with other business owners for concentrated effort and success (for example, a local business improvement initiative could be undertaken with a group you meet through one of the business associations you belong to).

Of those business owners that join associations, many owners will attend association meetings or events, listen to the speaker, and depart as soon as humanly possible. While they will hopefully have learned something from the speaker, they will not have benefited in the most important way – building their own personal business network or business community. When you build a strong personal business network; your business will benefit from it.

In addition to industry and trade associations, you need to consider special interest group associations (such as women in leadership; professional groups – such as certified general accountant, sales executives etc.). Those associations might not include your customers, but they certainly will include competitors (who you need to learn about and understand). Consider interest group associations as your own small business advisory; ask for help, for information, for access to resources.

Joining an industry or small business association is a highly effective small business strategy and needs to be on your list of top marketing tactics. Once you’ve joined, you need to attend association meetings and participate in association events. To be even more effective: join the association board or an association committee. In addition to industry and trade associations, you need to consider special interest group associations (such as women in leadership; professional groups – such as certified general accountant, sales executives etc.). Of those business owners that join associations, many owners will attend association meetings or events, listen to the speaker, and depart as soon as humanly possible.

If you don’t join your industry or small business association, you can be sure that one, or many, of your competitors will. Do you really want your competitors to have access to your customers and to be able to build a strong relationship through association participation?


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Increase Your Cashflow

Top Notch Loan Alternatives

We all know the importance of maintaining a positive cashflow from month to month if we want to avoid a liquidity crisis, and all the misery that entails.

There is a lot more to cashflow management than just avoiding a crisis. Actively striving to increase your cashflow can –

  • Make it easier to plan and fund future growth and expansion
  • Reduce the amount of fixed capital you need at any one time
  • Give you the flexibility to move quickly and effectively in response to market changes

The key to successful cashflow management is to optimise the amount of cash available to you at any one time. This means increasing your cashflow as much as you can, without jeopardising other strategies. This means that you have to find a balance to suit you.

Credit

It is also important that you don’t impose too strict a regime, otherwise you could drive away customers, and they won’t want to refer you! You need to find the right balance to suit you and your situation.

The first, and most important, step is to establish a system for tracking and controlling credit. The faster you receive a payment from your customers, the more cash you will have at your disposal; therefore, it is important to bill early, and chase up customers who have failed to pay.

Payments

At the same time, you should also take advantage of any incentives your creditor offers you. If your cashflow will allow it, this is a useful option to have.

Prices

While it is important to keep your prices competitive, you also need to make sure you are increasing your prices to cover any increase in costs; or else your cashflow will suffer. Remember, most customers tend to expect an annual rise in prices, provided it is within an acceptable range.

Call the experts

The key to successful cashflow management is to optimise the amount of cash available to you at any one time. This means increasing your cashflow as much as you can, without jeopardising other strategies. At the same time, you should also take advantage of any incentives your creditor offers you. If your cashflow will allow it, this is a useful option to have.

This is an area in which we have a great wealth of experience. If you are struggling, or would just like a helping hand, please feel free to contact us to discover and arrange a meeting how much we can help improve your cashflow.


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Small Organizations Run the World

Small Organizations Run the World

“Why Small Organizations Mean Big Business”

As a small organization you may turn around and have these qualities as your edge to compete against the big sharks in business.

More and more small organizations are paving the way and giving big businesses a shot of their own medicine.

Tom’s character, on the other hand, moved into town to build a branch of a big chain-bookstore which offered discounted prices and a huge building, as compared to Meg’s little bookshop on one corner of the town’s streets.

Nowadays, this situation will not hold true anymore.

Her only edge is that she gives personal service, she knows her customers by name and she has a very small staff, about 2 or 3 employees.

In the end, Meg was forced out of business because her customers went to Tom’s monstrous bookshop.

Meg’s character owned a quaint little bookstore which she inherited from her mother. The prices of her books were a little steep, she makes up for it in service. She packs the books in a specialized bag, and she knows all of her customers by name.

In the movie “You’ve Got Mail”, the sub-plot aside from the love angle is that the heroine (played by Meg Ryan) was forced out of business when the big-time bookstore owner (played by Tom Hanks) moved into town.

In the movie, the reason why Meg Ryan was forced out of business is because she can not profit anymore. Her prices are steep as compared to the other big business’ discounted rates.

Here are some tips on how you can hold your own against a big business:

Small businesses have big competition.

This means that you need to know how to survive out there.

No matter what nature of business you have, it is better to learn about the competition so that you will be able to survive.

Here are some tips on how you can survive the big competition:

The better option is for you to hire a professional outside accountant to figure the returns of your investment and handle the other financial aspects of your business.

Do not spend on unnecessary business purchases and always balance your books.

Know exactly where your business is headed.

Keep a tight rein on your budget when it seems as if your cash flow is in a downward slope.

If you are one to buy on impulse or if you are the type to listen to those who sweet-talk you into purchasing “necessary” items, control yourself.

Keep your books straight.

In your day-to-day operation, make sure that you know where you want your company to be 5 or 10 years from now.

Get a third and second opinion if possible, as these impulsive buys may lead to the end of your small organization.

The fall of most small businesses start with decisions on problems which are not carefully analyzed.

Keep your business alive.

Be always aware of the trends in the industry that you are in, practice good money management and learn how to recognize potential problems before they arise.

This does not just help widen your knowledge, but it will also give you an idea of how other businesses are ran by small-scale owners.

You think that you already have a contingency plan, make sure that you have foreseen the results of a certain business decision.

In the long run, it is better to seek professional help rather than embark on a plan that could start the downfall of your business.

  • Take advantage of every free business counseling whenever available.
  • Do not be afraid to seek professional help.

Learn how to market your small organization.

  • It is about knowing who to market your products to.
  • Marketing is not about trying to sell your services and products to everyone.
  • In marketing, it is good to remember these fast facts:

If you work hard, make wise business decisions, learn how to market your small business and personalize your customer interaction, your small-scale business is sure to rise to the top.

  • Communicate with your customers.
  • Build a personalized and good relationship with your customers.
  • Do not stop the marketing process.

Remember, small organizations are big businesses these days so do not be afraid to work hard for the company that you have – not matter how small.

As a small organization, you need to routinely review the markets that you need to pursue so that you can better reach out to your customers.

Know about your customers.

This will be a great edge for you to have against the bigger companies.

They might offer discounted prices but it is harder for them to keep track of customers on a more personal basis.


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Start Your Own Business

Start Your Own Business

Grasp Your Future And Set Up Your Own Business !

If you’re thinking about starting your own business, you are probably in need of a start up loan. With a start up business loan, you can get the tools you need to make your first start the right start.

An unsecured business start up loan can get a new business owner the funding he needs to cover initial business costs, without having to provide collateral and place his or her assets at risk. With this approach, the lender can still lend an unsecured start up loan at great rates and with a variety of programs.

Applying for a unsecured small business start up loan is easy, all the business owner need to do is just go on line and submit their loan details. The lenders will refer back to you with the loan decision in a few days.

There are several options that an individual may take into consideration. You may find it’s difficult if you have nothing. If you have personal assets, the hard part is putting them at risk, and doing so is the rite of passage to both success and failure.

Collateral is often the biggest obstacle to the prospective business owner.

Not only does a new business not yet have any commercial collateral to provide; but it is asking a lot for an entrepreneur to put his hard earned personal assets at risk in order to start a new business venture. Without collateral, getting a business financing can sometimes seem impossible.

If you’re starting a business, it’s more than just a job. Starting a business requires so much more than an ingenious idea, and even more than planning, marketing strategies, and a well thought out future. How do you get start up business financing that will either advance your idea to the point where it can attract outside capital, or perhaps jump – start you into profitable operations?

Obtaining financing can sometimes be the most grueling part of starting a new business.

The loan approval process for a business startup loan sometimes seems like a maze, with stringent credit requirements, complicated business plans, and paperwork full of terms that are like a foreign language to the layman prospective business owner simply trying to get a loan. Options can be unfitting and rather slim when it comes to financing for the new business owner; unrealistic collateral requirements and proof of projected business profitability can sometime seem more like a joke than a reality.

Not only does a new business not yet have any commercial collateral to provide; but it is asking a lot for an entrepreneur to put his hard earned personal assets at risk in order to start a new business venture. An unsecured business start up loan can get a new business owner the funding he needs to cover initial business costs, without having to provide collateral and place his or her assets at risk.

With a start up business loan, you can get the tools you need to make your first start the right start.

The loan approval process for a business startup loan sometimes seems like a maze, with stringent credit requirements, complicated business plans, and paperwork full of terms that are like a foreign language to the layman prospective business owner simply trying to get a loan. Options can be unfitting and rather slim when it comes to financing for the new business owner; unrealistic collateral requirements and proof of projected business profitability can sometime seem more like a joke than a reality.

They provide new innovations, new jobs, and fresh concepts to the business industry. Starting a business requires money. Without start up capital, very few people have the resources available to launch a successful business idea.


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Grow Your Small Business!

Grow Your Small Business With Sensible Finance Options

Grow Your Small Business!

Few lenders, who did not want to lose on the opportunity of lending to the rising group of small business owners, devised bank-alternative loans. Small business loans are granted to entrepreneurs for a series of purposes like expansion of their facility, buying technology, purchasing new tools and equipment, and also to buy raw materials and pay wages to workers.

Small business loans can be either short term or long term. Depending upon ones requirement, the small business owners can be a varied term of repayment along with other conditions of the small business loan.

Lenders advance small business loans on the principle of moderate risk, which is no different from lending any other loan. While designing the terms of the small business loans, lenders are often seen to be using this principle. Lenders will only lend a limited sum on small business loans.

Apart from the problems that the small business owners have to face in operating business, the severest of problems is in raising capital. It is not easy to raise capital for business use; particularly in an environment in which small business owners are accorded a status similar to borrowers with bad credit. It is said how a small business owner will pay fixed installments on a loan if he has not made much income (profits) in a particular month.

When a person applies for small business loan to these brokers, they forward it to all the lenders who they think can appropriately advance loans to the entrepreneurs. Depending upon ones requirement, the small business owners can decide term of repayment and other terms and conditions of the small business loan.

What differences can a borrower notice in small business loan, which goes in his favor? Borrowers can get an arrangement designed by which they can repay loan installments with ease. Small business loan with a flexible repayment schedule sufficiently solves the problem of the self employed people.

Apart from the problems that the small business owners have to face in operating business, the severest of problems is in raising capital. It is not easy to raise capital for business use; particularly in an environment in which small business owners are accorded a status similar to borrowers with bad credit. Small business loans are advanced to small entrepreneurs who invest it in a series of purposes like expansion of their facility, buying technology, purchasing new tools and equipment, and also to buy raw materials and pay wages to workers.

When a person applies for small business loan to these brokers, they forward it to all the lenders who they think can appropriately advance loans to the entrepreneurs. Brokers can also arrange small business loans from lenders who accept flexible repayment. Other specific requirements of borrowers can be incorporated into any small business loan searched.


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Small Business Loans - What You Should Know.

Small Business Loans – Important For Business Owners

Small Business Loans – What You Should Know.

Small Business Loans - What You Should Know.If you happened to have just started a small business or want to expand your existing business to fully take the advantage of positive opportunities, your business enterprise will need the right kind of financing just at the right moment in order to succeed and develop.  You will need a Small Business Loan.

Let’s first discuss the eligibility of getting a small scale business loan. Repayment ability of the borrower, as evident from the flow of cash in the entire business is the most primary consideration. Evidence of honest and good character, good management capability, sound collateral, and the business house owner’s contribution to equity are also very important factors considered before loan approval.

Small Business Loans can immensely help small scale business establishments, which essentially form the backbone of the economy of a country, thrive. Many institutional partners or lenders can get associated with a federal authority in order to provide the right kinds of small business loans for varied types of industries that have varied interest areas.

Usually, owners of business houses with more than a specified ownership will need to provide a personal guarantee of loan repayment. Because a certain percentage of loans disbursed become an unsecured business loan, this is mainly.

Varied types of small businesses can apply for financial assistance in the form of small business loans. There are certain conditions that must be fulfilled:

* All applicant business houses must demonstrate the profit motive;

* All applicant business houses must be doing, or at least plan to operate in the United States

* All applicant business houses must show good owner equity in order to invest;

Another loan program provides for loans on low-interest basis to renters, all size business houses, homeowners, and many private non-profit organizations to replace or repair personal property, equipment or machinery that was destroyed because of natural calamity.

There are several types of small business loans that enable small business establishments acquire working capital.

One assistance program can provide for financing on a fixed rate on a long-term basis to facilitate acquisition of fixed assets (for example equipment or real estate) for modernization or expansion. It is specifically aimed at small business houses.

One assistance program can provide for loans that are short-term for so that the business establishments can purchase supplies, inventory, furniture or equipment. Such programs are specifically designed for all kinds of small business houses that need financing on a small-scale and also assistance on the technical front for expansion or start-up, and the loan is given through specifically named intermediary lenders (for example, nonprofit organizations that have experience in technical assistance and lending).

This is hence, established that small business loans can play an important role in improving the overall business scenario of the business houses.