Where To Go To Access Capital

It is a major decision when a business owner decides to seek access to capital. You might be at the point where you have used up all your personal finances and realize that you must go to an outside source. On the other hand, you just might be looking to improve your business without using your own money. Not a bad idea.

Well, in making this decision, business owners like you must understand the ramifications. When seeking any outside financing, do your research. Whether it's a bank or private lender, there are significant things you must be aware of, such as, their terms and conditions, fee rates, closing time frames, and more. You must understand these areas before you make that big leap.

Financing your business can occur through various methods and sources. Using a bank is important but know that they look at your past performance verses your future potential, while alternative financing sources look at both. Alternative funders want to know what you plan to do to grow your business. They want to see that you are going for more clients, contract opportunities, and any legal avenues for generating income. Based on their method of financing, if applicable to your business, they will do their utmost to work with you.

Here are five (5) alternative funding options when seeking access to capital:

* Factoring Sources - They will buy your receivables at a discount, so you are not creating debt.

* Asset-Based Lenders - They assess your current assets, put a value to it, and lend you an applicable amount.

* Purchase Order Funders - These sources will pay your supplier for you so you can fill large volume orders from your clients.

* Micro Loan Lenders - These private lenders will lend you smaller amounts anywhere from $500 up to $100,000 based on your business type, income and expenditures, and any other applicable factor.

* Private Commercial Lenders - These lenders will assess you and your property to determine the maximum they are willing to lend. They tend to make their decisions more based on the collateral presented.

These sources can be of value to you in times when banks are saying "No" more than they are saying, "Yes".

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Written by: Karlene Sinclair-Robinson
Author of The Small Business Owner's Guide To Alternative Funding

Why Cash Flow Is King

Why do we say "Cash Flow is King"? Often times, you find that small business owners do not always understand this phrase. When a business owner looks at their cash flow, many times they see it as a negative thing. Why? Well, when you do not have enough of it, of course you are going to think of it in a negative way.

You can get your cash flow moving by understanding how to use what you have. If you invoice your clients, then your invoices are an asset. Use those invoices to access the cash flow you need or should have on hand, not in someone else's bank account. Isn't it better to have your money today, verses waiting 45, 60 days or more? What good is it to you if it is only on paper? So, if you have a cash-strapped business that have receivables (outstanding invoices), you really should consider selling those invoices.

This concept is called "Factoring" or "Accounts Receivable Financing". Use them to benefit you in today's tight credit/lending market! Having your money today will cost you less than waiting 60 days or more to access it. To learn more, contact me.

Written by: Karlene Sinclair-Robinson
Author of The Small Business Owner's Guide To Alternative Funding

How Bankers and CPAs Can Assist More Clients

In today's market of tight credit, banks and other institutional lenders are holding back on lending to even some of the most qualified borrowers. We all know that this is happening. It certainly does not help the business owner who just does not have the liquid cash flow to meet their daily operational expenses or those who could benefit through expansion.

Business owners must consider all areas affecting their cash flow and deal with it. These cash flow problems can stem from late paying clients, contracting issues, contract payment terms that might be too long, sales forecasting or pricing issues, or other mitigating circumstances that might affect that business' cash flow. These cash flow issues will certainly cause the business owner a lot of sleepless nights. When you have business owners having to make the choice between what bills they must pay certainly does not help to relieve the strain of whatever else they might be going through. When they can get the necessary assistance to move their small business forward, they will certainly be able to sleep better and meet their daily business needs.

This is where collaboration through a financial network can be a major asset for any business owner. When the banker, CPA, attorney, or other key business contact, can assist the business owner and guide them toward alternatives that can be a benefit them, it makes for a win-win-win for all involved. Often times, I find that bankers or even CPAs do not know of alternative financing options. In other instances, they do not understand how these options can benefit their clients. These individuals sometimes seem taken aback with the number of options that are available. Imagine what it would be like for the business owner who gets turned down by their banker, who is then directed by that banker to contact an alternative financing source that can help them.

When a CPA is reviewing a client’s file and realizes that this client is in need of financing alternatives, and knowing that this business owner cannot easily access institutional lending, they can then assist their client through their knowledge of and access to alternative financing options. Many small business owners have no idea where to go to access capital except their banks, so it is important that those who work closely with these enterprises be aware of and are connected to sources that provide such options.

Written by: Karlene Sinclair-Robinson
Author of The Small Business Owner's Guide To Alternative Funding