Credit builder loan of $500 to $750 to rebuild or establish credit for residents of Georgia, Florida, New York, Puerto Rico, or Massachusetts. http://www.acdfinancial.com/creditbuilder.htm
Sunday, December 26, 2010
Rebuild your credit with a $500 to $750 credit builder loan
Saturday, December 25, 2010
Use It As You Need It Small Business Financing
A factoring company like ACD Financial Services (www.acdfinancial.com) offers clients a “use it as you need it” funding option. Each invoice purchase is a separate transaction and does not form part of a portfolio lending approach. The transaction is modeled as a buy-sell transaction. ACD Financial first undertakes a due diligence that typically takes one to two business days. Once completed the client is at liberty to offer invoices for purchase. Upon receipt of invoices, ACD Financial checks the credit of the debtor named on the invoice and makes sure that the sale represented has been satisfactorily completed. Once this is done the debtor is advised of the purchase by ACD Financial and the client receives their funding. At the end of the credit period the debtor pays ACD Financial directly completing the transaction. #smallbiz
Benefits of Accounts Receivable Factoring
Here are some of the benefits of using accounts receivable factoring companies:
· Get cash in 24 hours for first time applicants.
· Customers can receive cash in less than four (4) hours.
· There are no minimums, and no maximums.
· Factoring is not a loan. There are no obligations.
· You pay no upfront fees and no co-signers are required.
· There’s no account to open.
How to Raise Start-up Capital in 2011
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via Inc.com by Ilana DeBare on 12/14/10
Raising capital for a brand-new business has never been simple, and the continuing recession of 2009 and 2010 made a tough challenge even tougher. Start-up funding may be a little easier to come by in 2011, but securing adequate capital is likely to remain an uphill battle for many aspiring entrepreneurs.
On the down side: Banks are still being much more conservative in their lending than before the recession. Venture capitalists and angel investors are also much less willing to take risks than they used to be.
On the up side: Microlenders can now make loans of up to $50,000, an increase from past limits. There's also a new Internet marketplace of peer-to-peer lending and investing that can provide small amounts of capital.
How can you beat the money crunch? Tilt the odds in your favor by understanding the wide range of capital sources, which ones are appropriate for you, and by making sure you have a solid and well-thought-out business plan.
Raising Start-up Capital in 2011: Go Back to the Bank
One of the main capital sources for small business has traditionally been bank loans backed by guarantees from the U.S. Small Business Association. Of course, that's not so simple these days. Banks sharply tightened their lending criteria in the wake of the mortgage crisis, and the amount of SBA-backed loans dropped from $28.5 billion in 2007 to $17 billion in 2009.
Federal incentives have fostered a small rebound in SBA lending, up to $22 billion in fiscal year 2010. But that's still far lower than pre-recession levels. Regardless of the state of the economy, banks are more likely to lend to established businesses than to a start-up.
"In today's economy, I'd say 75 percent of SBA lenders will simply not do a start-up," says Jerry Chautin, a volunteer SCORE business mentor in Atlanta and Sarasota, Florida. "So the first question you should ask of a potential lender is, 'Will you do a start-up?'"
To maximize your chances of approval for a traditional bank loan:
• Have a well-written business plan, as well as personal experience or very solid mentorship in the industry you're entering.
• Be prepared to put up personal assets (such as home equity) as collateral.
• Provide as much start-up capital yourself as possible. In the recent past, banks looked for a business owner to provide 20 percent of the capital, but now some will want you to kick in 30 percent or more. For restaurants, Chautin says, borrowers may need to provide 40 or 50 percent of the funding.
"The smaller the loan, the easier it is," says Scot Cunningham, a consultant on SBA loans in Moraga, California. "And the more money you have into it, the easier it gets."
Will your business be located in a low-income area? Is one of the owners a veteran? The SBA has special programs to encourage these kinds of businesses.
Dig Deeper: How to Use a Personal Asset Loan for Your Business
Raising Start-up Capital in 2011: Check out Microloan Possibilities
If you can't qualify for a conventional bank loan, consider a smaller loan from a microlender—a nonprofit economic development organization approved by the SBA.
Microlenders provide training and mentoring, along with loans of up to $50,000—a cap that was increased in September from $35,000. They will consider borrowers whose poor credit history or lack of collateral sets them off-limits for regular banks. So they can be an ideal source of funding for a start-up with relatively modest cash needs.
"Because most microlenders are community-based, they have a simplified application and less stringent underwriting criteria," says Mark Allio, regional director of the Massachusetts Small Business Development Center, located at the University of Massachusetts at Boston. "They've historically been focused on neighborhood, Main Street-type businesses or entrepreneurs with credit challenges. They typically, although not always, charge a higher interest rate."
You can find a list of microlenders in your region on the SBA website.
Dig Deeper: How to Get Financing When Banks Won't Lend
Raising Start-up Capital in 2011: Consider Peer-to-peer Lending
Here's an option for entrepreneurs that didn't exist five years ago—borrowing money directly from other individuals via the Internet.
Peer-to-peer or P2P lending allows people to list and bid on loans using an online auction platform—a kind of eBay for lending. The two biggest peer-to-peer lenders in the U.S. are Lending Club and Prosper, both of which offer unsecured loans of up to $25,000. Most borrowers are seeking funds for personal reasons such as reducing credit card debt or paying tuition, but some are small business owners looking for capital.
"One of my clients with a yoga business couldn't get funding anywhere else because of her credit score," says Gwendolyn Wright, a small business coach with The Wright Consultants and the Renaissance Entrepreneurship Center in San Francisco. "It was a little expensive, but she got a loan of about $20,000 from a peer-to-peer lending site, and she got it within a week."
There are also some even newer "crowdfunding" websites that allow entrepreneurs to raise small amounts of capital such as a few thousand dollars in exchange for a share of revenues. Some examples are ProFounder.com, Peerbackers.com, Kickstarter.com, RocketHub.com and IndieGoGo.com. But there's no guarantee you'll be able to get as much cash as you need: Only ten percent of IndieGoGo borrowers get all the money they're seeking.
Dig Deeper: How to Find Alternatives to Bank Financing
Raising Start-up Capital in 2011: Seek out Venture Capitalists or Angel Investors
Many aspiring entrepreneurs imagine hefty injections of cash from venture capitalists or angel investors, but in fact these groups of investors focus on a very narrow sliver of businesses.
Both VCs and angels (not to mention the new breed of super angels) typically invest in companies that promise a very high rate of return and a clear exit strategy through a public stock offering or acquisition. They focus on industries like tech and biosciences rather than Main Street businesses such as individual restaurants, retail stores, or service firms.
That's in the best of times. And in the past two years of recession, VCs and angels have pulled back even in the technology sectors.
"If you're developing something where they can see a direct, clear path to an acquisition – for instance, something that Facebook or Apple wants—then there will be interest," says Michael Doherty of Doherty & Associates, a business-consulting firm in San Francisco. "But you need to have already demonstrated [buyer] interest or customers. VCs want to provide the bump that finalizes what you're trying to reach."
Dig Deeper: How to Pitch to Angel Investors
Raising Start-up Capital in 2011: Keep it Close to Home
People who know you are the ones most likely to help you, either by lending you money or investing in your business. Approach friends and family like you would a bank, with a clear business plan, terms of the loan or investment, and even a PowerPoint presentation. Put everything in writing.
And keep in mind that being in business together can dramatically change personal relationships—even ruin them, if not managed carefully.
"I went into business with a guy I'd known for 10 years, and in the business he was nothing like what he was in our friendship," says Allio. "But often friends and family are the only source of funding. So I'd recommend it be structured as debt rather than ownership. A loan you can always pay off, but it's not so easy to get out of a business partnership."
Dig Deeper: How to Pitch Your Business to Friends and Family
Raising Start-up Capital in 2011: Home Equity and Credit-Card Financing
It's not glamorous or sexy, but personal credit cards and home equity lines of credit are the way that many small businesses get going. The strategy here is to rely on your personal finances to get the business up and running. Then, once you've got documented sales and cash flow, you can turn to a bank for expansion capital.
Dig Deeper: How to Build and Maintain Good Business Credit
Raising Start-up Capital in 2011: Stretch Your Start-up Dollars With Leasing and Financing
Equipment leasing and vendor financing are two ways to make limited start-up money go further. Equipment leasing allows you to avoid coming up with cash to buy machinery or vehicles, instead paying a monthly fee to the leasing company. Shopping around among competing lessors can get you lower rates.
"Some of the equipment leasing packages are priced surprisingly aggressively," Cunningham says.
Similarly, you may be able to work out an arrangement with vendors where they provide the goods you need but don't require payment for 90 days or more. That can give you time to generate sales and achieve a positive cash flow.
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How one Boss Gave Away his Company for Christmas
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via Inc.com by Eric Markowitz on 12/24/10
As he approached retirement age, Foss Miller knew he needed an exit strategy for the company he co-founded 35 years ago. It wasn't going to be easy.
His company, Sawbones Worldwide, presented unique circumstances. It wasn't that Sawbones makes artificial bones for medical use, which raises eyebrows. It was the company's location. It is the largest manufacturing plant, and largest employer, on Vashon Island in Washington State.
Vashon is a small island just west of Seattle in the Puget Sound with 10,000 full-time residents. It is accessible to the mainland only by ferry. There are no chain stores on Vashon, aside from a single Subway sandwich shop. Miller describes life on Vashon as the "Norman Rockwell existence."
With 135 employees and a payroll of nearly $6 million, Sawbones is crucial to the economy of Vashion Island. K2 Skis, a sporting goods manufacturer, was originally headquartered on Vashon, but left nearly a decade ago for cheaper labor abroad. Residents still feel the sting. K2's move eventually left about 400 people jobless.
"It was a big hit to the island," Miller recalls. "Everyone was paranoid that the same thing would happen to us." But the company, which Miller co-founded in 1975, has prospered. According to Miller, it has carved for itself a niche in the medical supply field.
How to leave his company in good hands? Miller first met with venture capitalists and strategic buyers, but they couldn't promise to keep the company on the island. He then considered a management buyout, but when he ran the numbers, he realized it wasn't going to be feasible. It would be too expensive.
Eventually, he and his business partner, Denzil Miller, made their decision.
On December 10th, Miller assembled his employees in the cafeteria for their annual Christmas party. Miller took the microphone and before a crowd of hundreds of his employees and their families. He announced a decision that would change their lives forever.
Foss Miller gave his company to his employees. Using the government-sponsored ESOP, or the employee stock ownership program, Miller would segue out of his role as an executive of his company, and as of that day, he'd let his employees take full ownership of the business.
Pacific Research Laboratories, the company's official corporate title, is one of nation's largest purveyors of artificial bones. They manufacture everything from bovine pelvises to plastic skulls. Shoulders are available for rent by the week. The locals call it The Bone Factory.
Naturally, the crowd erupted in cheers when Miller announced his decision to give the company to his employees. With an ESOP, employees are guaranteed a piece of the company's equity, which functions much like a 401k retirement plan. Since company profits are essentially reinvested into the employees retirement accounts, ESOP employees can genuinely enjoy the fruits of their labor. And as the employee grows with the company, so does his or her equity.
In addition to a number of tax advantages both employer and employee enjoy using an ESOP, what's notable is a common thread among ESOP programs: a strong company culture. The Sawbones story, which was originally reported by Vashon's local newspaper, The Beachcomber, is not as uncommon as yone might think.
Michael Keeling, president of the Washington-based ESOP Association, estimates that there are currently around 10,000 ESOPs nationwide, though precise statistics are impossible because most of these companies are private, and don't open their books to the SEC.
"The ESOP is a very attractive alternative or model for existing shareholder," Keeling says. "It keeps the culture and style going versus having new owners come in, shut it down, ship the machinery overseas, and cut the jobs out. I could make the case that if you have a great culture, the ESOP can be essential in preserving that culture, and probably make it better."
Though the popularity of ESOPs has steadily declined since the 1980s when government-sponsored tax incentives were repealed, ESOPs seem to be creeping back into the spotlight. There are a couple of reasons for this. For one, the recession has made venture capitalists a bit more conservative about their offers to small business owners like Miller.
"ESOPs have become a more appealing way for owners to cash out their equity because the downturn has lowered what most companies would fetch in a merger or acquisition," BusinessWeek noted about the recent rise in ESOPs.
Perhaps another reason for the reappearance of ESOPs is a little less quantifiable. As buzz words like "sustainability" permeates the corporate lexicon, CEOs and managers are beginning to understand that strong company culture can affect the bottom line. Low turnover rates, high productivity, and a sense of loyalty contribute to the intangible assets of a small business.
Companies such as Eileen Fisher and Publix Super Markets have announced ESOPs in the last several years, as well as Clif Bar Company, maker of the popular organic health food, which was announced in June 2010.
Clif's owners, Gary Erickson and Kit Crawford, implemented the ESOP "to recognize employees' role in helping build the business, and because it is in line with their goal to lead a sustainable business for future generations," according to a company statement. Erickson and Crawford sold 20 percent of their family shares to employees while retaining 80 percent ownership.
"All along we wanted to create a company where we would want to work," Crawford said in a statement. "Employee ownership is one more way we could run a different kind of business: one that inspires a team of people to make the kind of delicious, nutritious food we'd like to eat, and that strives for a healthier, more sustainable world."
When the news was announced at Clif Bar, employees could barely contain their joy. "Dancing in the aisles is definitely the right way to put it," said Renée Davidson, a company employee. "It was a big surprise. Employees had no idea it was coming. They were amazed."
ESOPs don't work for every company. But for Miller, who made his first worktable by taking his bedroom door off its hinges and laying it over two sawhorses, selling Sawbones to his employees just felt right.
"So many of the employees have worked here for many, many years," he says. "Providing them a great retirement when they leave—it just made more sense and felt better and better."
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How to Perform a Break-Even Analysis
via Inc.com by Ilana DeBare on 12/15/10
A break-even analysis is a key part of any good business plan. It can also be helpful even before you decide to write a business plan, when you're trying to figure out if an idea is worth pursuing. Long after your company is up and running, it can remain helpful as a way to figure out the best pricing structure for your products.
It sounds complicated, but it's not. Basically, a break-even analysis lets you know how many units of stuff—say, how many ham sandwiches, iPhone apps, or hours of consulting services—you must sell in order to cover your costs.
You'll need several basic pieces of information:
• Fixed costs per month
• Variable costs per unit
• Average price per unit
Performing a Break-Even Analysis: Fixed Costs
Fixed costs are ones like rent and administrative payroll that don't change much from month to month, regardless of how many units you sell. SCORE lists many common fixed costs.
"Be sure to include everything," says Jerry Chautin, a volunteer SCORE business mentor in Atlanta and Sarasota, Florida. "People forget about things like deposits or contingency funds, which can add up to a sizable amount."
If you're creating a business from scratch, don't rely on guesswork to estimate your costs. Chautin suggests asking the utility company for the past year of bills for your location. Call an insurance broker for a real quote for your particular business. Check with trade associations or web sites such as www.bizstats.com for information on average costs in your particular industry.
Dig Deeper: Exploring the Break-even Analysis
Performing a Break-Even Analysis: Variable Costs
Variable costs are ones like inventory, shipping and sales commissions that rise or fall with your sales volume. As with fixed costs, talk to trade associations, vendors and even other business owners in your field to come up with the most accurate estimate.
"Look up the financials of public companies in your industry: 10-Ks, which are annual disclosures, or 10-Qs, which are quarterly," Chautin says. "Even though those companies are much larger, you can size it down. The ratios are not going to be that far off."
Dig Deeper: Break-Even Analysis Chart
Performing a Break-Even Analysis: Pricing
This is the trickiest of your three pieces of data, since you're able to choose exactly where to set your prices. Start by looking at your competition, and how they price their products. You can also do informal focus groups to see what people might be willing to pay for your wares or services.
"You can look at pricing many different ways," says Gwendolyn Wright, a small business coach with The Wright Consultants in San Francisco. "How's your competition pricing it? Do you want to be at the midpoint, higher end, or lower end? I see people pricing earrings at three times what their competitors are charging. Why would anyone buy that?"
You'll also need to consider your costs when setting prices. If you spend $2 on meat and condiments to produce a hamburger, you'll obviously need to price it at more than $2. But how much more—$4? $5? $7? That's where a break-even analysis can come in handy.
Dig Deeper: Break-Even Analysis in Inc. Tools
Performing a Break-Even Analysis: The Formula
Once you've got your cost data and a target price, plug them in to this formula:
BEQ = Fixed costs / (Average price per unit – average cost per unit)
This will tell you your break-even quantity (BEQ), the number of units you need to sell to cover your costs. Any sales above that are pure profit. Anything below means you're losing money.
Here's an example. Suppose you're turning a jewelry-making hobby into a business. You have $1,000 per month of fixed costs (studio rent, utilities, equipment, etc.). Your variable costs for each necklace are $50 for materials and labor. You'd like to charge $70 per necklace, since that's what similar pieces are selling for.
BEQ = $1000 / ($70 – $50) = $1000 / $20 = 50
That means you'd need to sell 50 necklaces a month at $70 each in order to break even.
Use your break-even formula to compare different pricing strategies. For instance, if you raised the price to $80, you'd only need to sell 33 necklaces—but it might be harder to attract buyers.
On the other hand, if you lowered the price to $60, you'd attract bargain shoppers—but would need to sell 100 necklaces to break even.
The break-even formula can help you compare different cost structures as well as prices. For instance, suppose you used less expensive materials in your necklaces and pared the unit cost down to $45. The formula tells you that you'd have to sell just 66 necklaces at $60 to break even.
You can use a basic Excel spreadsheet to run different break-even scenarios, or download one of many break-even templates available online.
Dig Deeper: Break-Even Analysis, a Basic Calculation
Small Business Planning for 2011
Some of the best small business planning tips come from SCORE. If you are like many people today who have lost their corporate jobs, you might be starting a new small business. Here are some of the best tips for planning:
Take the time to define your business idea.
Be able to talk about your business in an elevator pitch. (3 minutes.)
Write down your mission statement.
Think about what your motives are, and be sure you have a passion for owning your company.
Commit to the frustrations, time, education and that you may encounter.
Learn about your competitors - their products, service, distribution methods, pricing, and advertising.
Think about any outside influences that could affect your new business.
Always reserve small business factoring as a standby method of maintaining your business: paying employees, bills, suppliers, and production or manufacturing costs. Seek a factoring company like ACD Financial Services to talk with about how invoice factoring can help keep your business on track.
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