ACD Financial Services - (acdfinancial.com)

Alternative Financing

2012-02-11T10:32:00.001-08:00

There are alternatives to a traditional small business bank loan that every small business owner should consider. #smallbiz

$300 Billion in New Loans

2011-06-18T16:12:00.001-07:00

According to the U.S. Treasury Department, a total of 847 U.S. small banks applied for less than half of the $30 billion in capital available from the federal program, the Small Business Lending fund, to increase small-business lending. The banks sought $11.6 billion. June 6 and of those who applied, 315 were seeking to use the funds to replace capital they had received earlier in the bailout for banks, from the Treasury’s Troubled Asset Relief Program.

The Treasury said the $30 billion, available only to lenders with less than $10 billion on assets may generate as much as $300 billion in new loans.

Still, many small businesses could not get loans from their local banks. Survival in many cases was aided by factoring services from factoring companies. Invoice factoring enables cash flow, a necessity among small business owners.

Better Accounting and Financial Reporting Prompts Factoring

2011-03-13T19:04:00.001-07:00

It is particularly important for small businesses to get into the habit of facilitating accurate, timely and meaningful financial reports. These are important for the following reasons:

1. Allows you to analyze and assess your company’s performance – both past and current.

2. Helps in the understanding, monitoring and controlling of costs.

3. This fulfills your bank and other third party requirements, including preparation for taxes.

4. Sets your financial targets for next quarter and help with projections for the following next year.

5. Monthly financial reporting should include

6. Balance Sheet

7. Income Statement

8. Statement of Cash Flows

9. Alerts you as to the need to implement factoring services to help pay bills.

10. Provides you the small business owner with peace of mind.

Many small business owners stress because their invoices have not been paid on time. Some have 30 day invoices that are running at 60 and even 90 days out, thanks to the recession. But the one tactic mentioned above that can alleviate stress if the funds just aren’t there this month to pay your bills, is invoice factoring. Also known as accounts receivable factoring, small businesses everywhere globally are finding out that it is one of finances best kept secret.

#smallbiz #nonprofit

Source: Interface Financial Group

Disasters Prompt Need for Construction Factoring

2011-03-13T15:01:00.001-07:00

Historically, natural disasters like the devastating earthquake and Tsunami that just happened in Japan can cause unprecedented damage to a country's infrastructure, tremendously affecting business continuity, both in that country and abroad. For many companies, disaster recovery aid, and the funding for it, has become part of business planning. Many companies execute plans for relocation, or the outsourcing of crucial business functions during a crisis.

ACD Financial Services offers support to small businesses suffering from the consequences of natural disasters. In fact often times construction factoring can be an essential source and financial resource to benefit the many construction contracts underpinning rebuilding efforts needed during and after disasters. The construction industry is one of several sectors that can benefit tremendously from invoice factoring.

For example, a construction company could factor current outstanding invoices and would not have to wait for payment before starting construction on a new project. Sub-contractors or construction firms can realize quick turnaround (often within 24 hours) on accounts receivable due, to staff up quickly, buy needed supplies and be off to help aid an ailing country.

Factoring offers an excellent source of cash flow by selling these invoices to a factoring company. With invoice factoring , there are no minimums, no maximums, no long-term commitments and no lengthy application process.

That's right, immediate working capital is available now.

#smallbiz #nonprofit

Source: Interface Financial Group

Jobless Rate Falls to 8.9 Percent

2011-03-13T09:58:00.001-07:00

Good news in the United States job market - for the first time in two years the unemployment rate in the U.S. has fallen below 9 per cent. Employers in the U.S. have hired 192,000 more workersno9n farm workers) as of February, and the U.S. unemployment rate has finally gone down to 8.9 percent. Actually, according to the Labor Department, the unemployment rate fell for the third straight month in a row.

The unemployment rate in January was at 9.0 percent in January. Economists forecast the unemployment rate to rise to 9.1 percent. Job growth in December and January was revised higher by 58,000 jobs. Average hourly earnings held steady at $22.87. Earnings are up 1.7 percent in the past year.

Small Businesses Ramp Up: Many Use Factoring Companies to Secure Growth

2011-03-13T07:10:00.000-07:00

It appears as if small businesses in the United States (firms with fewer than 50 employees) are finally ramping up hiring. Experts believe this is because of more optimism among as well as economic recovery, although the unemployment rate is still at nine percent.

Whereas a year ago at this time we were losing thousands of job monthly, ADP data reported 100,000 jobs in February. There were 101,000 in January, and December as well. ADP is a payroll processor that reported the data on March 4th.

Small businesses defined as firms with fewer than 50 employees, started hiring in January 2010 and have been adding jobs consecutively for the last 12 months, according to ADP, which released its most recent report on Wednesday.

46 percent of the 217,000 jobs were added by small businesses last month -- most of which are labor and/or service-intensive. These small businesses need cash to sustain, and to hire employees, pay their bills and continue to grow, so one tactic that we are seeing is more businesses using invoice factoring. Factoring companies have seen an increase in new small business customers, in addition to those why discovered factoring long ago -- many of which use it as a business strategy.

#smallbiz #nonprofit

Small Business Tax Tips - Five Ways to Pay Less Tax

2011-03-12T21:46:00.001-08:00

1. File your income tax return on time or obtain a filing extension. If you don't, you risk interest and penalties for late filing. You also lose the opportunity to make certain tax choices required on a return filed on time.

2. Use retirement plans not only to save for your retirement needs, but also to reduce current taxes. If you have not yet set up a retirement plan, consider a Keogh, SEP, or SIMPLE plan to put more away on a tax-deductible basis than you can under an IRA. Contact a financial advisor to set up a retirement plan.

3. Keep good books and records for your business. Keep these records separate from records of your personal expenses. Keep good records to track both small and large expenses; small expenses can add up to significant expenses. Keep these business records as long as necessary. Generally, this is at least three years after the date you filed your income tax return. In some cases, however, it's a good idea to keep records even longer.

4. Keep records to substantiate your travel and entertainment expenses. While you don't have to keep receipts for expenses (other than lodging) of $75 or less, you must still note in a log or diary the business purpose for the expense, the date it was incurred, and the amount you spent.

5. Make sure to run a part-time business in a business-like manner, in case it incurs a loss. By keeping records of your part-time business, you'll be able to prove a profit motive and deduct the loss of the business from your taxes. Keep separate books, records, and business bank accounts and change business operations with an eye toward making a profit.

#smallbiz #nonprofit

Reference: ACCION USA

Here are critical tax deadlines for 2011 #smallbiz #Tennessee #Tax

2011-01-29T22:22:00.001-08:00

January 2011

Employers, businesses, banks, and other financial institutions are preparing various tax documents to mail out to you.

January 14, 2011

First day that the IRS will accept electronically filed tax returns. However, many taxpayers will need to wait to file their returns (whether e-file or by mail) due to last-minute legislative changes.

January 15, 2011

Deadline to pay your fourth quarter estimated tax payment. However, you can skip this estimated payment without penalty if you file your return and pay your balance in full by January 31, 2011.

January 31, 2011

Deadline for employers to mail out Form W-2 and for businesses to furnish Form 1099 statements reporting, among other things, non-employee compensation, bank interest, dividends, and distributions from a retirement plan.

Deadline for self-employed individuals to file and to pay their tax and avoid an penalty for not making your 4th quarter estimated tax payment.

February 16, 2011

Deadline for employees who claim exemption from withholding to file a new Form W-4 with their employers.

Deadline for financial institutions to mail out Form 1099-B, relating to sales of stock, bonds or mutual funds through a brokerage account, and Form 1099-S, relating to real estate transactions.

March 1, 2011

Deadline for farmers and fishermen who have a balance due on their taxes to file their individual tax return and pay the balance due without incurring any late payment penalties. For more details, see the Farmer's Tax Guide (Publication 225, especially chapter 15).

March 15, 2011

Deadline for corporate tax returns (Forms 1120, 1120A, and 1120S), or to request automatic 6-month extension of time to file (Form 7004).

Final deadline to file an amended corporate tax return (Form 1120X) for tax year 2007 and still claim a tax refund.

April 18, 2011

Deadline to file individual tax returns (Form 1040, 1040A, or 1040EZ) or to request an Automatic Extension (Form 4868). An extension provides an extra six months to file your return. Payment of the tax is still due by April 18th. You can submit payment for tax along with the extension form.

Last day to make a retroactive contribution to traditional IRA, Roth IRA, Health Savings Account, SEP-IRA or solo 401(k) for the 2010 tax year. (However, if you get an extension, you will have until October 17th to fund a SEP-IRA or solo 401(k).)

1st quarter estimated tax payments due for the 2011 tax year.

Final deadline to file an original tax return (Form 1040) for tax year 2007 and still claim a tax refund.

Final deadline to file amended tax return (Form 1040X) for tax year 2007 and still claim a tax refund. (Be sure to mail the amended return well before April 17th to make sure your tax refund will be processed in a timely manner. And be sure to obtain proof of mailing, such as a certified mail receipt.)

Deadline to file estate income tax or trust income tax returns (Form 1041) or to request an automatic 5-month extension of time to file (Form 7004).

Deadline to file partnership tax returns (Form 1065) or to request an automatic 5-month extension of time to file (Form 7004).

Final deadline for estates, trusts, or partnerships to file an amended tax return and still claim a tax refund for the year 2007.

May 16, 2011

Deadline for non-profit organizations to file information returns (Form 990), or request an extension (Form 8868).

June 15, 2011

2nd quarter estimated tax payments due for 2011 tax year.

Deadline for US citizens living abroad to file individual tax returns and to pay any tax due. You can request an additional 4-month extension (Form 4868). (Tip: you can request an automatic extension by April 15th instead if you want to.) I provide useful information for claiming the Foreign Earned Income Exclusion and the Foreign Tax Credit, two tax breaks essential for Americans working abroad.

June 30, 2011

Deadline to file TD F 90-22.1 Report of Foreign Bank Accounts for the year 2010. This report is required if you have over $10,000 (in aggregate) held in foreign bank accounts.

September 15, 2011

3rd quarter estimated tax payments due for 2011 tax year.

Final deadline to file corporate tax returns if an extension was requested. (Forms 1120, 1120A, 1120S).

Final deadline to file trust income tax returns (Form 1041) if an extension was requested.

Final deadline to file partnership tax returns (Form 1065) if an extension was requested.

October 3, 2011

Final deadline for self-employed persons or employers to establish a SIMPLE IRA for the year 2011.

October 17, 2011

Final deadline to file individual tax returns (with extension).

Last day the IRS will accept an electronically filed tax return for 2010. If filing after October 17th, you'll need to mail in your tax return for processing.

Final deadline to fund a SEP-IRA or solo 401(k) for tax year 2010 if you requested an automatic extension of time to file.

November 2011

Start planning any year-end tax moves.

December 1, 2011

If you are covered by an HSA-compatible health insurance policy as of December 1st, you'll be eligible to contribute the full amount to a Health Savings Account for the year.

December 31, 2011

Last day to make any tax moves for the year 2011. Last day to set up a solo 401(k) for self-employed persons.

Marital status on this date determines your marital status for the whole year.

Invoice Factoring Benefits

2011-01-29T22:04:00.001-08:00

Invoice factoring offers many benefits over loans including:

Funding for growth
Improved cash flow
Control over credit
Debt protection
Better terms with your suppliers

For more on the benefits of factoring, contact ACD Financial Services www.acdfinancial.com.

Rebuild your credit with a $500 to $750 credit builder loan

2010-12-26T20:42:00.000-08:00

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

Use It As You Need It Small Business Financing

2010-12-25T20:31:00.001-08:00

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

2010-12-25T20:23:00.001-08:00

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

2010-12-25T20:03:00.001-08:00

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How to Raise Start-up Capital in 2011

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

2010-12-25T19:57:00.001-08:00

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How one Boss Gave Away his Company for Christmas

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

2010-12-25T19:56:00.001-08:00

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

2010-12-25T19:52:00.000-08:00

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.

Determining the legal structure for your small business (free online workshop)

2010-11-24T20:03:00.001-08:00

Here is a free online workshop from SCORE that provides a good overview to help you determine the best legal structure for your business. It covers Sole Proprietorships, Partnerships, Corporations, and Limited Liability Companies (LLCs) http://www.score.org/Legal_Structure.html #smallbiz #Tennessee #Georgia

Non-profit working capital loan program criteria

2010-11-21T19:41:00.001-08:00

Working capital financing with terms of 1% to 1.5% per month for eligible non-profits with short-term capital needs.

Eligibility: 501 ( c) 3 organizations in Georgia and Tennessee.

Amount: up to $10,000

Interest Rate: 1% to 1.5% per month

Term: up to 6 months; can be extended for another 6 months

Collateral: Generally a first lien on cash and investments, contracts and accounts receivable and present and future contributions. Approval may require other or additional support

Fee: $100 due diligence fee

Adrian Davis

678-868-1885

www.acdfinancial.com

#nonprofit #Tennessee #Atlanta

Veterans Starting Their Own Business

2010-11-20T15:35:00.000-08:00

The SBA reports that nearly one quarter of veterans say they're interested in either buying or starting their own small business. Interestingly, that percentage is even higher among female veterans. But the bad news is that financing is difficult for new business owners since the recession.

Veterans will be happy to know that accounts receivable financing can assist them in the start-up phase of any new venture, when cash flow may be tight. New business owners often use factoring to help pay for employees, and cover bills and expenses until their business is up and running strong. There are many factoring companies nationwide, but for more information on invoice factoring, go to www.acdfinancial.com.

10 worst credit card mistakes

2010-11-20T15:05:00.001-08:00

http://articles.moneycentral.msn.com/Banking/CreditCardSmarts/10-worst-credit-card-mistakes.aspx

Chase Doubles SBA Loans to Become #1 in U.S., Helps 3,300 Small Businesses in 2010

2010-11-20T14:58:00.001-08:00

If banks are making small business loans, why is it that small businesses are unable to obtain financing. Invoice factoring (financing) is easier to obtain than a bank loan. http://www.marketwatch.com/story/chase-doubles-sba-loans-to-become-1-in-us-helps-3300-small-businesses-in-2010-2010-11-15?reflink=MW_news_stmp #smallbiz

SBA Business Loan Program Expanded by SunTrust Bank

2010-11-20T08:50:00.001-08:00

Here is some encouraging news for small business owners. SunTrust Bank is expanding its small business loan program. Please note that obtaining working capital using invoice factoring (financing) is easier than a bank loan. www.acdfinancial.com. #smallbiz

SBA Business Loan Program Expanded by SunTrust Bank
by _anitalancaster_ (http://businessservicenews.com/author/anitalancaster/)
on November 15, 2010

The SunTrust Bank has decided to expand its SBA business loan program and
business activities in a bid to attract more small business clients. The
bank also plans to focus on advisory and online services.

SunTrust is already training its business bankers according to client
needs. It is particularly giving training on cash flow cycles.

Similar step is being taken by a number of other banks in Washington.
SunTrust is planning to expand their SBA business loan program next year
with a team of SBA bankers. The bank believes that business banking is
becoming quite easier for the people who are in need of loan and it should play a
part is helping them at the cheapest rate.

Although steps taken by SunTrust focuses their existing product offers like
mobile banking and cash management evaluation, it also highlights their
overall marketing objectives. According to SunTrust’s regional president and
chief executive for greater Washington, Scott Wilfong, business bankers are
getting ready to help businessmen to expand their businesses in right way.
He also added that this is a holistic approach as well as a great way to
support and advice companies along with personal finances that will make
overall businesses healthier.

The SunTrust Bank is the sixth-largest SBA lender in Washington. The bank
is recognized for making 38 loans valued at $9.1 million for fiscal year
2010. It is the third largest bank in Washington with 180 branches as well as
$14.4 billion in deposits. It maintained a well reputation in banking
industry over the last several years.

Will you receive all of your income tax refund in 2011?

2010-11-01T08:01:00.001-07:00

Call (800) 304-3107 begin_of_the_skype_highlighting to find out. Your tax refund or a part of it can be seized for federal, state, or local debt from defaulted student loans, to unpaid property taxes, to child support, etc. Call (800) 304-3107 and follow the automated system. The auto-attendant will let you know if you are clear. If something is flagged it will provide contact info for the agency wanting your tax refund. #smallbiz #Nashville #Atlanta #Memphis

Don't let your small business run out of cash when you have customers that owe you money

2010-10-30T21:27:00.001-07:00

Invoice financing can provide the cash you need. It has been around for centuries so take advantage of this financial tactic. ACD Financial Services (www.acdfinancial.com) can fund your outstanding invoices within 48 hours.

What your bank won't tell you when you can't pay your SBA loan

2010-10-30T21:25:00.001-07:00

Small business owners have been severely impacted by the Great Recession. If you are in default or about to default on your SBA loan there is a solution. Contact us today at 678-868-1885 or www.acdfinancial.com for a consultation on an Offer in Compromise. It's an SBA program designed to support a request for debt forgiveness. #smallbiz #sba #Nashville #Atlanta #Memphis

Don't Let lack of Cash Flow Be The Reason Why Your Business Fails

2010-10-30T09:27:00.000-07:00

According to the Small Business Association (SBA), only 30 percent of new businesses fail during the first two years of being open. On the other hand, 50 percent fail during the first five years and a whopping 66 percent fail during the first 10. Only 25 percent make it to their 15 year or more anniversaries.

It is estimated, by the SBA, that over half a million businesses opened in the year 2009, while 660,000 closed. Out of the 552,600 businesses that started in 2009, about 165,000 or more are expected to fail by 2011, especially with the most recent economy.

Invoice financing can help small businesses that are cash poor because their customers are slow to pay. Don't let your business fail because you are out of cash, but you have customers that owe you money. Invoice financing has been around for centuries so take advantage of this financial tactic. ACD Financial Services (www.acdfinancial.com) can fund your outstanding invoices within 48 hours.

Everyone Deserves A 2nd Chance

2010-10-18T20:39:00.000-07:00

I recently had a conversation with a borrower with poor credit. He stated to me that everyone deserves a 2nd chance. I agreed until he told me how he was late paying his mortgage and a credit card bill, but expected to pay them on time next month. #smallbiz

Business Start-up Tip

2010-10-10T15:01:00.001-07:00

Today you need not open an office for many businesses. Just set aside one private room in your home, and you'll be doing business. Employees can work from home as well, and you will save a ton of money on office overhead. There are conference call in companies and webinar services for internal or external meetings. All you need to pay for is a webcam and microphone if offsite employees do not have them, etc. And what's more, if you don't have a lot of cash yet in your new business, you can always rely on a factoring company. #smallbiz #smallbusiness

Use It When You Need It

2010-10-10T00:33:00.001-07:00

A factoring company can be invaluable to any start-up business, especially if it offers clients a “use it as you need it” funding option. With this 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. Typically a factoring company 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, the factoring checks the credit of the debtor named on the invoice and makes sure that the sale represented has been satisfactorily completed. #smallbiz #smallbusiness

SBA Implements Larger Loan limits Established Under Jobs Bill

2010-10-09T09:12:00.000-07:00

WASHINGTON - On the heels of completing final approvals of loans to nearly
2,000 firms that has been in its loan queue waiting for final approval of
the
Small Business Jobs Act, the U.S. Small Business Administration has finished

implementation of another major element of the bill: increasing maximum
sizes
in several of its loan programs.

The changes - effective today - are permanent for general small business
loans under SBA's 7(a) guaranteed loan program, fixed asset loans through
the
504 Certified Development Company program, Microloans, and International
Trade, Export Working Capital and Export Express loans. A temporary
increase
for SBA Express loans is good for one year.

"Across the country, there are small businesses owners who are in a position

to take that next step to grow and create jobs, and these larger loan sizes
provide another tool to help them do just that," SBA Administrator Karen
Mills
said. "Whether they're in the start-up phase and could use a microloan or
are
looking to take advantage of lower real estate prices and interest rates to
buy
a new building to expand, SBA loans can now be an even greater resource to
help entrepreneurs and small business owners get the capital they need.

"Additionally, temporarily increasing the cap on SBA Express loans from
$350,000 to $1 million will allow more small businesses to take advantage of

the streamlined approval process for working lines of credit and other
capital
they need," Mills said.

Under the Jobs Act provisions, SBA has permanently increased 7(a) and 504
limits from $2 million to $5 million, and for manufacturers and certain
energy-
related projects seeking 504 loans, to $5.5 million. The maximum for
International Trade and Export Working Capital loans also has been increased

from $2 million to $5 million.

SBA also permanently increased microloan limits from $35,000 to $50,000,
helping larger entrepreneurs with start-up costs and small business owners
in
underserved communities. It also raised the limit on Export Express loans,
from
$250,000 to $500,000, and made the program permanent.

SBA Express loan limits have been temporarily raised from $350,000 to $1
million for one year. These loans offer a streamlined application process
with
reduced paperwork and approval often in a matter of days. Unlike
traditional 7
(a) loans, SBA Express loans carry a 50 percent guarantee and can be used as

revolving lines of credit - to help restock inventories and support larger
revenue sales - which are particularly critical for small businesses as they

emerge out of the recession.

SBA's own trends show increasing demand for larger loans. The percentage of

lending volume for guaranteed loans greater than $1.5 million has grown,
from
13 percent of total dollars approved in fiscal year 2005 to 21 percent in
fiscal
year 2010, with many loans actually at the $2 million maximum. In the 504
program, the percentage of loan volume committed to loans greater than $1.5
million also has grown, from 15 percent of total dollars approved in fiscal
year
2005 to 25 percent in fiscal year 2010.

SBA has already put in place the alternate size standard that expands
eligibility for SBA-backed loans that was included in the Jobs Act,
increasing
the alternate size standard to include those small businesses with less than

$15 million in net worth and $5 million in average net income.

Additionally, Administrator Mills announced on Tuesday that all loan
applications placed in the SBA's loan queue by small business borrowers had
received final approval, amounting to 1,939 loans for nearly $970 million.
The
loans were able to make use of loan guarantees up to 90 percent and reduced
fees extended under the Jobs Act. Many of the loans had been in the queue
waiting for the extension since May.

The bill provided the agency with enough funding to support an estimated $14

billion in lending to small businesses with the extension of higher
guarantees
and reduced fees in the top two loan programs, first implemented as part of
the American Recovery and Reinvestment Act of 2009.

The Jobs Act also includes additional resources to help increase lending to
small businesses, including the State Small Business Credit Initiative
announced today by the Department of Treasury that will support $15 billion
in
lending through local programs and the Small Business Lending Fund, which
will
provide capital to local, community banks to increase their lending to small

businesses.

Additionally, the new law contains $12 billion in tax credits targeted to
small
businesses, including higher deductions for investing in new machines and
equipment, zero capital gains for those who buy and hold small business
stocks
for five years, and a doubling of the maximum deduction for startups to
$10,000. It also allows self-employed Americans to completely deduct health

insurance costs for themselves and their families.

How to apply for a SBA Express Loan for $5,000 to $50,000

2010-10-06T16:52:00.000-07:00

http://www.sbaxpressloan.com/

How to receive free small business counseling

2010-10-05T17:36:00.001-07:00

http://www.acdfinancial.com/index.htm #smallbusiness #smallbiz #Atlanta #Nashville #Memphis

How to apply for a SBA Patriot Express Loan

2010-10-03T16:03:00.001-07:00

http://www.sbapatriotloan.com/

How to turn a $25,000 outstanding invoice into immediate cash

2010-10-03T10:19:00.001-07:00

http://www.acdfinancial.com/index.htm

Do you have poor or no credit? How to apply for a $500 credit builder loan to restore and establish your credit

2010-10-02T17:19:00.000-07:00

http://www.acdfinancial.com/creditbuilder.htm #smallbusiness #Atlanta #Nashville #Memphis

SBA Announces That 504 First Mortgage Loan Pools Assembled, Ready For Sale On Secondary Market

2010-09-29T08:46:00.000-07:00

WASHINGTON - Bank of America and United Midwest Savings Bank have
become the first financial institutions to assemble SBA 504 first mortgage
pools
to be sold on the secondary market, the U.S. Small Business Administration
announced today.

The announcement follows the launch of the 504 First Mortgage Loan Pooling
program on July 1, 2010. Authorized as part of the American Recovery and
Reinvestment Act of 2009, the measure is expected to jump start the
secondary market for the first mortgage loans made in conjunction with
Section 504 Certified Development Company loans. The ability to sell loans
into this secondary market will provide liquidity to those lenders that want
to
partner with a Certified Development Company to provide real estate and
fixed
asset financing to small businesses.

"The 504 loan pool guarantee program is one more tool we've added to SBA's
toolbox to expand access to capital for America's small businesses," SBA
Administrator Karen Mills said. "By jump starting the 504 secondary market,

more banks will have greater opportunity to strengthen their liquidity and
in
turn increase their lending to small businesses and entrepreneurs."

Bank of America pooled $32.07 million in loans it purchased from other
lenders,
with $25.65 million guaranteed by the SBA. United Midwest Savings Bank
assembled a pool of $7.96 million, with $6.4 million guaranteed by the SBA.

Under the program, the SBA provides a government guarantee on pools of
portions of eligible 504 first mortgage loans assembled by approved pool
originators who sell them to third-party investors. Lenders retain at least
15
percent of each individual loan, pool originators assume 5 percent of the
risk,
and the SBA guarantees the remaining 80 percent.

Typically, a 504 project includes three elements: a loan (or first mortgage)

secured with a senior lien from a private-sector lender covering up to 50
percent of the project cost, a second mortgage secured with a junior lien
from
a Certified Development Company (backed by a 100 percent SBA-guaranteed
debenture) covering up to 40 percent of the cost, and a contribution of at
least 10 percent equity from the small business borrower. Brokers, or pool
originators, purchase portions of the first mortgages, package and sell them
on
the secondary market.

For additional information on the pool originators, visit
http://www.sba.gov/aboutsba/sbaprograms/elending/secondarymarket/index.ht
ml. The list will be updated regularly as new originators are approved.

Release Date: Sept. 29, 2010
Internet Address: http://www.sba.gov/news

#smallbusiness #smallbiz

How to apply for an unsecured small business loan for up to $100,000

2010-09-29T08:01:00.000-07:00

http://www.acdfinancial.com/bizloan2.htm #smallbusiness #smallbiz #Atlanta #Nashville #Memphis

Three Small Business Jobs Act Benefits

2010-09-28T19:30:00.001-07:00

Let's take a look at three key provisions the Small Business Jobs Act offers small business owners:

1. Thirty-billion dollars will go directly to community banks specifically for lending to small businesses. According to Senate reports, small business lending has dropped by 17.8 percent since the year 2008. The Bill's money is expected to encourage small banks to increase lending, and once things get rolling, they expect the creation of around 500,000 jobs.

2. Startups will get bigger deductions in 2010 or 2011. The Small Business Jobs Act would increase the amount you are allowed to deduct in your startup costs from $5,000 to $20,000. Plus, you'll more favorable deductions for real estate related to their business.

3. Microloans will be available for to help create small and home based businesses by aiding in their short term capital requirements. Prior, a business could only access a maximum of $35,000 in microloan funds. These microloans can be used for up to five years to pay existing loan payments to continue growing the business.That amount increased to $50,000 with the passage of this bill.

Source: IFG Network

#smallbusiness #smallbiz

How to apply for a micro small business loan for up to $50,000

2010-09-28T12:10:00.000-07:00

http://www.acdfinancial.com/microloan.htm #smallbusiness #Atlanta #Memphis #Nashville #smallbiz

For Non-Profits - How to Convert One-Time or Annual Donors into Monthly Givers

2010-09-28T11:10:00.000-07:00

A great article from Network for Good….Thinking about monthly giving is one of the smartest things you can do as a fundraiser. At Network for Good, we find that 30-40% of the donation volume for a nonprofit website is monthly giving, and that would be a great situation to find all nonprofits in-thanking people every month instead of asking them for donations every few weeks.

How do you do that? How do you turn your annual givers into monthly supporters?

Make sure your donation form asks what type of gift the donor wants to make ("Do you want to give us a monthly gift?"). Whenever you're asking for money, ask for the monthly pledge, not just a one-time gift.
Revisit the language you're using in your appeals. Frame your ask in such a way that it's a win-win situation-monthly donations for you, convenience and budgeting for your donors. (Read more about the four parts of a great fundraising appeal.)
Package the appeal in an exciting way. For example, some organizations have an ambassador program or a sponsor-a-child every month program. Put a face on that sustainable gift. This way you're creating some tangible tie to the idea of giving every month. Remember: To increase charitable donations, you should appeal to the heart--not the head.
Don't be afraid to ask for a monthly gift of support after someone completes a one-time transaction. It can be ingrained as a nice thank-you message: "Thank you so much for making a one-time gift. This is how you can put your support to work for us each and every month. Would you consider becoming a monthly supporter?" We've seen great success in converting first-time online donors into monthly donors by doing that within the first three days of them making their first online gift.

**We’ve seen great success in converting first-time online donors into monthly donors by doing this within the first three days of the donors making their first online gift. Think of using this strategy during the holidays when you're experiencing high traffic of one-time gift donations!

By Katya Andresen and Alia McKee: Sep 23, 2010 and Network for Good

#Nashville #Atlanta #Memphis #nonprofit

Small Business Cash Flow Management (Online Chat)

2010-09-28T10:45:00.000-07:00

Every month, SBA hosts a free online Q&A chat. This chat is about managing
cash flow. It will be Thursday, 9/30 @ 1 pm and the expert answering the
questions is Julie Brander, past chair of SCORE's New Haven Chapter.

Check it out at the link below.

http://web.sba.gov/livemeeting/Sep10/

#Nashville #Atlanta #Memphis

4,000 Year Old Tactic for Business Cash Flow

2010-09-28T08:11:00.000-07:00

One strategic way for small businesses to find and use cash to grow centers around a 4,000 year old tactic called factoring. This allows companies to move beyond reliance on loans, and borrowing money from credit cards to survive and grow. Invoice factoring or spot factoring, enables companies to get short-term working capital and improve cash flow and grow their businesses. Factoring makes business success more predictable.

Since most companies do not get paid immediately for delivered products or services, spot factoring benefits businesses that do not get paid for 30, 60 or 90 days by advancing up to 90 percent against the company's invoices. A factoring company like ACD Financial Services purchases selected invoices at a discount.

#Atlanta #Nashville #Memphis #smallbiz #loan #non-profit

Source: IFG Network

New Temporary Commercial Real Estate Program

2010-09-27T10:09:00.001-07:00

Here is a program that might help small business owners who have purchased a
small commercial building or office or warehouse condo with a short-term bank
loan. I am monitoring the program's status and will provide an update, but here is a short overview.

New Temporary Commercial Real Estate Program

The Small Business Administration is proposing legislation to temporarily allow small
businesses to refinance existing, qualified, owner-occupied, small business
commercial mortgages into SBA’s 504 program, which provides guarantees
supporting loans for the development of real estate and other fixed assets.
Currently, 504 loans must be used for new development or construction—and can
only include a limited amount of refinancing when businesses are expanding.

* Refinance Existing Loans into SBA 504 Structure: SBA’s existing
network of Certified Development Companies and private lenders already help
small businesses finance long term investments like real estate and heavy
equipment through a financing structure that includes a 50% private first
mortgage, a 40% SBA-backed debenture, and 10% borrower equity. With collateral
values falling and many banks pulling back on CRE lending, even
refinancing well performing loans has become harder. Under this new proposal,
borrowers with either existing 504 loans or conventional CRE loans could apply for
refinancing through the 504 program.

* Leverage Existing Infrastructure and Programs: SBA’s existing
network of Certified Development Companies and participating first mortgage
lenders will be able to deliver this program to borrowers quickly. Eligibility
would be similar to the existing SBA 504 program. Certified Development
Companies are SBA’s critical partners in this program, linking small
businesses and private lenders and helping to manage program risk.

* Target Performing Real Estate Loans: Eligible small businesses
will have commercial first mortgage loans or existing 504 first mortgage loans
that are maturing in the next year. In order to qualify, businesses will
have to be current on all loan payments for the previous year.

* Help Finance up to 90% of Current Property Values: Lenders that
are refinancing mortgages for existing customers will make a loan for up to
70% of the current property value; and SBA will help finance the remaining
20%. For lenders taking on a new refinancing project, SBA will take on a
greater share of financing, up to 40%.

* No Cost Program through Incremental Refinancing Fee: SBA’s
proposal for a temporary, zero-subsidy rate CRE refinancing program would be
funded through an additional fee for refinancing projects, and would not require
credit subsidy appropriations.

* Prevent Foreclosure: Borrowers can finance up to 90% of existing
property values through this program. By allowing eligible small businesses
to refinance their CRE mortgage into an SBA 504 loan project, this program
would provide creditworthy small businesses the opportunity to lock in
stable, long-term financing—and save jobs—by protecting small businesses from
unnecessary foreclosure.

* Free up Capital for Community Banks: Market research shows that a
large percentage of CRE mortgages are set to mature within the next few
years, and that nearly half of these mortgages are held by community banks. By
removing a percentage of existing CRE mortgages from their books, lenders
will free up capital that they can use to make more small business loans.

Source: SCORE

#smallbiz #Atlanta #Memphis #loan #smallbiz

ACD Financial Services www.acdfinancial.com

New Small Business Bill Expands Microloans

2010-09-27T08:47:00.000-07:00

President Obama is expected to sign a new small business bill into law on
Monday. Here is briefly how the Microlending program will change, according to
GulfCoast Finance, a certified development company in Florida.

Microloans: Permanently increases the maximum per small business borrower
to $50,000 and per intermediary to $5 million. Also authorizes SBA to
waive intermediary match requirements during fiscal years 2011 and 2012.
Intermediary Lending Pilot: Establishes a 3-year pilot program to provide
capital to 20 non-profit intermediaries annually, to make loans targeted to
startup, newly established and growing small business concerns. CDCs should be
eligible to participate.

#smallbiz #loan #Memphis #Nashville # Atlanta

Source: SCORE Atlanta

The Great Recession is Over! Says Who

2010-09-21T22:18:00.001-07:00

According to a panel of leading economists at The National Bureau of Economic Research (NBER), the Great Recession that began in December 2007 ended in June 2009. Go figure.

The unemployment rate hovers around 10% nationally and 27 states saw their unemployment rate increase. The residential real estate market is still shattered and most Americans have seen a substantial decline in their wealth. Small businesses that drive the economy and create the majority of jobs are unable to obtain capital to grow and expand. I am sure most small business owners and consumers without jobs don't agree with these economists.

Well, we don't either. That's why at ACD Financial Services (www.acdfinancial.com) we are constantly working to help small business owners obtain the capital they need to be successful.

Determining Your Business' Capital Needs

2010-09-21T06:01:00.001-07:00

Let's start with two definitions.

"Capital," in investing terms, is money used to finance purchases of equipment, supplies, or products. If you want to buy a new piece of equipment, the money you will spend to purchase that equipment is considered Capital.

"Working Capital" is the money you need to spend to cover the day-to-day operating costs of your business. Working Capital is cash − or accounts that can be converted into cash, like accounts receivable or inventory − and cash you need to spend to cover financial obligations falling due in the current operating year. To keep it simple, think of working Capital as the money you need to pay the bills.

So: To determine your Capital needs, you'll need to consider both Capital and working Capital; the total is the amount you'll need to operate your business.

Let's start with Capital you'll need to make major purchases. Potential sources of Capital outlay include:

Buildings, facilities, etc.
Major equipment.
Office equipment and furnishings.
Materials, supplies, parts, etc.
Initial inventory.

If you are planning the Capital needs of a start-up, simply write down the costs of setting up the business. If you run an existing business and need Capital to expand, write down the costs of that expansion. (But don't include items like salaries, utility costs, insurance, etc − we'll get to those items in a moment.)

Then focus on your working Capital needs. To make it simple, we'll assume you run an existing business and are looking to expand. In that case, to determine working Capital requirements create projections for items like accounts receivable, inventories, and accounts payable. Then compare your current actual costs to the figures you forecast. Then subtract the increase in current liabilities from the increase in current assets. The difference is your change in working Capital and indicates how much money you'll need.

If you are seeking Capital for a start-up, it's even easier: You don't have current actual costs, so the difference in liabilities and assets equals your working Capital needs.

Here is an example. Say you plan to open a new restaurant. (We'll keep the math simple.) You estimate the following Capital costs:

• Facility (building and land)	$500,000
• Equipment (stoves, freezers, etc)	$150,000
• Furnishings (tables, chairs, etc)	$75,000
• Other items (silverware, plates, etc)	$20,000
• Etc.
Total	$745,000

You determine you require $745,000 in order to open the restaurant. But that is not all the Capital you will need; you'll also require working Capital to keep the operation going while the restaurant gets on its feet. You estimate the following in working Capital needs for the first twelve months you are in business:

• Salaries	$400,000
• Utilities	$25,000
• "Groceries" (supplies)	$50,000
• Advertising	$15,000
• Etc.
Total	$490,000

Adding Capital and working Capital together indicates you'll need $1,235,000 to cover the first year's expenses. (You'll probably need more, since neither list above is in any way complete.)

On the other hand, you will bring in cash as customers patronize your restaurant. You run a variety of different scenarios and decide you feel comfortable assuming you will do $800,000 in sales over the course of the first year.

The math is simple: $1,235,000 minus $800,000 equals $435,000. You need $435,000 in Capital to open the restaurant.

But take a step back first. While you have estimated you will do $800,000 in sales, those sales are unlikely to be spread evenly across twelve months; your first few months are likely to be lean as customers learn about your restaurant and your sales build over subsequent months. Plus you need at least $745,000 to cover the costs of getting the restaurant started.

In addition, to cover potential shortfalls, you decide you need an additional $200,000 as a buffer for lean months and in case unforeseen expenses arise.

Taking into account your initial needs, and a buffer, you determine you'll need a total of $1,435,000 for the first year, but since you expect sales to rapidly increase as customers flock to your restaurant, you cut that total amount by $300,000 because you can use income to offset some of your working Capital needs.

Then, to present a great case to investors and lenders, you lay out those Capital needs on a month-by-month basis, showing working Capital requirements and offsets due to accounts receivable. In short, you show lenders and investors what you need, justify those needs based on solid forecasts and estimates, and show how you will pay back the money you borrow. The key is to factor in Capital needs and working Capital needs; don't let your business fail because you didn't estimate and plan for working Capital required to cover operating expenses

Thinking About Starting A Non-Profit?

2010-09-20T21:40:00.001-07:00

To create a non-profit you have to file articles of organization with your state government. Before you do that, you should visit www.irs.gov and read Publication 557. It is a must read if you are going to start a non-profit. To receive tax exempt status you must file Form 1023 with the IRS. Form 1023 and instructions can also be found on the IRS's website. The reason why you want to read the IRS documents first is because filing articles of organization with your state's government does not grant you tax exempt status. Only the IRS can do that if they approve your non-profit for tax exempt status. Tax exempt status allows donations to your non-profit to be tax deductible for your donors. Applying for grants involves finding organizations that provide grants that support your non-profit's mission and completing their grant applications.

Grants To Start A For-Profit Business

2010-09-18T15:05:00.001-07:00

Grants to start a for-profit business do not exist. Grants generally are for and support non-profit organizations. Most start-up businesses get started with personal funds from the owner, a combination of a business loan and personal investment, or a combination of both and private investment. You should develop a business plan if you are thinking about starting a business. You will need a business plan to obtain any type of funding and at a minimum to serve as road map to be successful.

How To Control Spending

2010-09-18T12:49:00.001-07:00

It really does not matter whether business is facing financial challenges, growing at a manageable rate, or booming, without oversight a company's spending can easily spiral out of control. Have you established company spending policies? Because if you have not, it will be difficult to set boundaries, or create controls, let alone enforce spending policies. Anyone who runs a business - whether small or large - has expenses. As a small business matures the need for spending controls is eminent. Here are a couple of strategies to support the process.

One company known as ExpenseWatch.com can help you control expenses by offering best-of-breed modules for Expense Reports, Purchasing and AP Invoice Management, which can be subscribed to individually to control specific company spending issues, or as a fully integrated expense control suite. An open expense control platform, companies have the flexibility to integrate spending data with a wide range of business solutions used—travel management tools, accounting/enterprise resource management systems and payroll providers, credit cards, budgeting applications, customer relationship management systems, ecommerce vendors and more.

If your business expenses get out of control thanks to a new product launch, or traveling for trade shows, there is another solution that can help you get funds in the door fast -- factoring. As you may know, many companies pay their invoices 30/60 or 90 days out. If you have outstanding invoices for a job that you have completed, and are owed apx. $20,000 or more, invoice factoring might just be the solution to get funds in fast to cover outstanding expenses.

Here's how it works. IFG looks at the creditworthiness your customers and can fund within as little as 24 hours. Most factoring companies do not expect to buy 100 percent of a company’s receivables, and there are no minimum or maximum sales volume requirements. IFG’s professional rates are competitive; each client's circumstances will vary and may have an impact on the fees.

Because IFG 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. IFG first undertakes a due diligence that typically takes one to two business days. Once completed the client is at liberty to offer invoices to IFG for purchase. Upon receipt of invoices, IFG 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 IFG and the client receives their funding. At the end of the credit period the debtor pays IFG directly. The transaction is completed.

ACD Financial Services

www.acdfinancial.com

Putting Financial Skills into Action: New FIELD Whitepaper

2010-09-17T08:15:00.001-07:00

There's a renewed awareness today that it's not enough to simply be knowledgeable about financial concepts–it's about applying that knowledge–even in simple ways. We all know that eating vegetables are good for us yet, more often than not we reach for the french fries instead. This simple scenario also holds true in the realm of financial skills. Many of us know that we need to save, budget and work on our credit score but all too often we give in to impulses and put things off until tomorrow.

This move from gains in financial knowledge toward putting these skills into practice has been termed 'financial capability'. A commitment to building financial capability is growing amongst microenterprise organizations, as discussed by the Aspen Institute's FIELD program's new white paper on the topic. Microenterprise organizations like ACCION USA use financial products coupled with financial education, allowing microentrepreneurs to not just learn about managing finances, but to effectively put that knowledge into practice with a financial product.

How is ACCION USA building financial capability? ACCION USA's small business loans, secured loans (guaranteed with the money of the applicant) and small dollar credit builder loans (for individuals with no credit history) allow microentrepreneurs to build a strong installment credit history through on-time payments over an extended period of time. Financial education on credit and other small business fundamentals is provided by AUSA staff throughout the application process and the life of a small business loan, building skills around credit management that lead to long-term financial success.

Keep your eyes peeled for new tools that are emerging to support work around financial education for microentrepreneurs, like ACCION USA's e-learning course on credit, or other web-based training sites like assetplatform.org.

Author: Elizabeth Garlow
Subject: Putting Financial Skills into Action: New FIELD

View article...

Uniquely Crafted Business Plans Are Needed to Raise Capital

2010-09-16T08:14:00.001-07:00

http://www.huffingtonpost.com/jerry-chautin/uniquely-crafted-business_b_664139.html

Balance Sheet

2010-09-15T18:47:00.001-07:00

Balance Sheet

The Balance Sheet details what a business owns, what a business owes, what a business is worth, and how shareholders financed the business. While some are more complicated than others, the average Balance Sheet will look something like this:

Current Assets

Fixed Assets

(What the business owns)

TOTAL ASSETS

Current Liabilities

Long-Term Liabilities

(What the business owes)

TOTAL LIABILITIES

NET ASSETS

(What the business is worth)

Capital

Retained Profit

(How shareholders have funded the Net Assets)

SHAREHOLDER FUNDS

Here's an example:
Current Assets	$20,000
Fixed Assets	$100,000
Total Assets	$120,000
Current Liabilities	$30,000
Long-Term Liabilities	$70,000
Total Liabilities	$100,000
Net Assets	$20,000
Capital	$4,000
Retained Profit	$16,000
Shareholder Funds	$20,000

What did you learn? The company has $120,000 in assets and $100,000 in short and long-term liabilities; as a result, it has Net Assets of $20,000. Of that $20,000, $4,000 was capital provided by shareholders, with the other $16,000 the result of profitable operations.

So why is it called a Balance Sheet? Assets, or the means used to operate the company, are balanced by financial obligations, equity investment, and retained earnings. It's a simple formula: Assets = Liabilities + Shareholder Equity. Both sides of the equation must be equal, or balanced.

You can learn a lot from a Balance Sheet, like whether how much a business owns is more than it owes, whether its debt is mostly in short-term notes or long-term obligations to suppliers or long-term loans to the bank, whether the shareholders invested a majority of the capital up front, or whether the business has grown organically with profits it has made.

Balance Sheet Terms

Current Assets . Assets with a life span of one year or less; can be easily converted into cash. Include cash, inventory, and accounts receivable.
Fixed Assets. Assets with a life span of over a year, not easily converted into cash. Includes equipment, buildings, land, and even patents or copyrights.
Current Liabilities. Debts which must be paid within one year. Includes accounts payable, interest on long-term loan payments, and short-term financing (for example, company credit card payments).
Long Term Liabilities. Debts and other financial obligations due over a year from the date of the balance sheet.
Capital. Funds provided by investors.
Retained Profit. Profits kept and not spent. Can be used to finance additional assets or just put away for a rainy day.

In short, the Balance Sheet shows assets and how much is still owed on those assets. The result, Net Assets, is the value of the business.

Evaluating a Balance Sheet

Once you create a Balance Sheet you can use it to evaluate the financial performance and health of a company. Here are a few calculations you can perform.

Quick Ratio (QR)

The Quick Ratio is sometimes called the "liquidity ratio" or the "acid test ratio." The Quick Ratio measures the liquidity of a company by determining the ratio between current liabilities and assets that can be quickly converted into cash (therefore the use of the term "quick ratio.")

Quick assets include things like cash and accounts receivable. Inventory is excluded from liquid assets since one of the goals of the QR is to determine if current liabilities can be paid without selling inventory. Inventory should hopefully always be sold to generate profits, not simply to cover expenses.

Here's the formula:

QR= QA/CL
QA	= Quick Assets, and
CL	= Current Liabilities

Here's an example. Say a business has $40,000 in cash and $20,000 in liabilities.

40,000 / 20,000 = 2.0. The QR is 2.0; the company has double the liquid assets available needed to pay off current liabilities.

The Quick Ratio is exactly what it's called − a quick way to measure the short-term health of a company. A company with a QR lower than 1.0 may not be able to meet debt obligations without taking drastic measures like selling assets or borrowing additional funds. A low QR creates another problem, because lenders are often unwilling to make loans to a company with a QR below 1.0; if the company is struggling to meet current liabilities, adding more debt may only aggravate the problem.

The QR is in no way an absolute measure of business health, but it does indicate whether a company can put its hands on funds in hours or days without having to resort to selling inventory or hard assets. A company with a high QR is relatively solvent and has a built-in buffer against short-term cash flow problems.

Current Ratio (CR)

The Current Ratio (sometimes called the Working Capital Ratio) measures a company's liquidity. A high CR indicates the company has sufficient cash or assets to meet normal operating conditions. A low CR could mean the company uses more of its assets to grow the business. Assets include cash and other items including inventory that could be converted to cash; liabilities include debts and obligations that are expected to be settled within a year.

Here's the formula:

CR =CA/CL
CA	= Current Assets, and
CL	= Current Liabilities

Here's an example. Say a business has total assets of $500,000. Its current liabilities (the money it owes) total $120,000.

500,000 / 120,000 = 4.16. The Current Ratio is 4.16. (Keep in mind that if assets equal liabilities, the Current Ratio is 1.)

In most industries, if the CR is over 2 a company is generally considered to have good short-term financial strength. If the CR is under 1, and liabilities exceed assets, the company is clearly struggling, at least in the short term.

Another way to view CR is in dollar terms. Say your company has assets of $100 and liabilities totaling $34. The CR is 2.94, or, put another way, the company has $2.94 in assets for every dollar you owe.

Comparing CR over time is helpful. If CR decreases, that could be an indication a company is carrying too much inventory or is struggling to collect receivables in a timely fashion. If the company is not taking on more debt and revenues are increasing, then its CR should improve − or something is wrong.

Source: First Tennessee Bank

Basic Accounting Methods: Accrual and Cash

2010-09-14T16:26:00.000-07:00

Basic Accounting Methods: Accrual and Cash

There are two basic ways to maintain your books and keep track of income and expenses: The cash method and the accrual method. ( It is possible to use both, choosing one for accounting and another for tax purposes, but most business do not − talk to your accountant before you make that decision. )

Most businesses with sales under $5 million a year can use either accounting method. Businesses with sales greater than $5 million a year , or businesses that maintain an inventory of supplies or finished goods with gross receipts over $1 million a year must use the accrual accounting method. And In addition, all publicly-held companies must use the accrual method. ( There are a few other tests used in special circumstances; see your accountant for specifics. )

With those constraints in mind, which is the best method? The answer depends partly in part on the type of business you run; start-ups and small companies often use the cash basis because it's simple and less tine time consuming, but most businesses operate using the accrual accounting method in order to maintain a clearer financial picture.

Let's look at both methods:

Accrual Method: Expenses are booked when goods or services are received, and income is booked when you make a sale − regardless of when you actually pay the bill or receive the check. If you order office supplies, you'll book the expense when the supplies are received, even if you do not intend to pay the bill for another thirty days. Income is booked on the day you perform a service, not when you actually receive payment.
Cash Method: Expenses are booked when actually paid for and income is booked when actually received. For example, if you order office supplies, you book the expense when you pay the invoice even if you received the supplies a month earlier. If you sign a contract to perform a service, you do not book the income until you receive the check for that service, even if you perform that service well in advance of payment.
Cash Method: Expenses are booked when actually paid for and income is booked when actually received. For example, if you order office supplies, you book the expense when you pay the invoice even if you received the supplies a month earlier. If you sign a contract to perform a service, you do not book the income until you receive the check for that service, even if you perform that service well in advance of payment.
Accrual Method: Expenses are booked when goods or services are received, and income is booked when you make a sale − regardless of when you actually pay the bill or receive the check. If you order office supplies, you'll book the expense when the supplies are received, even if you do not intend to pay the bill for another thirty days. Income is booked on the day you perform a service, not when you actually receive payment.

Think of it this way: You handle your personal finances using the cash method. When you write a check you enter the amount in your register; when you receive a paycheck you enter that amount. In a nutshell, that is cash basis accounting. It's simple, easy to understand, and lets you know exactly how much cash you have on hand.

Advantages and Disadvantages

A major negative with cash accounting is the risk of misunderstanding your company's true financial position. If you extend credit to customers, buy on credit from suppliers, or receive advance payment for services, using the cash method could cause you to assume your business is performing a lot better − or a lot worse − than is actually the case. For example, if you purchase $10,000 worth of materials on credit, a quick glance at your books may indicate you are in great shape… because the $10,000 will not "hit the system" until you pay for those materials.

The accrual method provides a more accurate picture of income and debt, but it can be misleading in terms of cash flow. For example, you may show major income for a certain period − since a number sales have been booked − but until you actually receive payment for those sales, you do not have access to those funds. Many businesses face cash flow problems because they lose sight of the amount of funds actually on hand as opposed to shown on the books.

Recording Dates

Determining the recording date under the cash method is simple: When you pay a bill, record the expense. When you receive payment, record the income.

How do you choose the date to record income or expense under the accrual method? It's easy:

Income Recording: Income is entered in the books when you have completed providing a service or have delivered all the items requested by the customer. In terms of income, think "finished."
Expense Recording: The same is true for expenses; don't record the expense until service is completed, items are received, etc. If a service is 90% complete, for example, and the remainder of the work will be completed a few weeks later, typically you won't enter the expense until the remaining work is complete.

Tax Implications

The IRS allows most businesses to use the accrual method for accounting purposes and the cash method for income tax purposes. But However , and this is a key point, once you choose a method to use for tax purposes, you must stick with that method − even if it would be to your advantage to switch to the accrual method for tax purposes. ( You can request a change, but the IRS must approve that change. )

Let's use a theoretical purchase to illustrate the tax implications of both methods. Say you purchase new office furniture on December 15th ; and the total cost is $2,500. The furniture is delivered on the 22nd , but you are not required to pay the invoice for thirty days from receipt of goods.

Using the accrual method, you book the expense on December 22nd , because that is when the furniture was physically received. As a result the expense is shown on this year's taxes and you can show the deduction this year, even though you will not actually pay for the furniture until late-January next year.

Under the cash method, the expense is booked in January when you write a check to satisfy the invoice, and you cannot use the deduction against income on this year's taxes.

One last note: If you run an all-cash business − receiving cash for goods sold and paying for all goods and services upon receipt − your books will look the same regardless of which accounting method you use. Credit − either extended or received − will change the picture dramatically.

Source: First Tennessee Bank

Five Top Financial Tips Includes Factoring

2010-09-13T08:32:00.001-07:00

In today's economic times, it is sometimes challenging to make ends meet, particularly if you are running a small business. But the basics for how to be financially successful, no matter how much money you earn, remain the same, both personally and for your company. Here are the top tips for getting ahead financially.

1. Make a budget and stick to it – For both your personal life and business, it is important to budget. Set spending and saving goals and stick to these goals.

2. Spend less money than you earn -- It does not matter how much or little you earn personally, or how much the business makes, simply spend less and earn more. Take a look at those areas where you can cut corners which will usually result in big savings.

3. Make a plan for saving -- Save first, because if you wait until you've met all your other financial obligations before seeing what's left over to save, chances are you'll never save. Put aside a minimum of five to ten percent of your income for savings each month before you pay bills or spend money.

4. Maximize any benefits -- 401(k) plans, medical and dental insurance, or even flexible spending accounts are worth a lot. Make sure you're maximizing these programs and take advantage of the ones that can save you money.

5. Think about accounts receivable factoring -- If your company's invoices are being paid 60 to 90 days out, and often times these are late, invoice factoring is an excellent solution to get paid right away.

SBA's Inspector General recommend that Community Express loans expire in December.

2010-09-12T09:18:00.001-07:00

http://www.sba.gov/idc/groups/public/documents/sba_homepage/oig_report_10-12_community_exp.pdf

The U.S. Small Business Administration's America's Recovery Capital Loan Program will finally die on Sept. 30.

2010-09-12T08:30:00.001-07:00

http://www.heraldtribune.com/article/20100906/COLUMNIST/9061059/2267/BUSINESS?Title=Small-business-loan-plan-flawed-from-start-to-finish

Factoring News: Trusting Your Gut in Business

2010-09-10T06:05:00.000-07:00

Research has proven over and over again that successful entrepreneurs know when to trust their gut. This research is coming in from all kinds of research from a number of different fields including neurology, cognitive psychology and even economics. The research proves intuition is a real form of knowledge -- a skill that anyone can develop and strengthen.

Gut instincts or intuition is something that could be of particular help in today's chaotic, stressed economic world. Making the right business decisions under pressure sometimes means you need to use your intuition as opposed to when you have more time to be rational. But then again, trusting the gut also enables entrepreneurs to try new ventures, and in some cases develop new products or money saving strategies.

Let's take an example, what if you see the need for a product or new service and just know it will work. However you don't have sufficient cash flow to develop and produce the product. You may not have the cash on hand to commission a market study or conduct a focus group, but you're still willing to stake your reputation and money on the idea because of what your gut is telling you.

And if you need the funds to develop a product that you know in your gut is the right product for your customers, that's when invoice factoring comes in handy. We all know that a business must have cash on hand in order to grow. Well if you need cash, and have outstanding invoices, then you can simply contact a factoring company and you could get the cash needed to begin development on that new product in as little as 24 to 48 hours.

Source: Interface Financial Group

Invoice Factoring Helps Businesses Go Global

2010-09-09T15:12:00.000-07:00

Today many businesses are no longer just competing domestically. With the Internet and expansion worldwide it might be a good idea to expand, but before you even think about taking your business global, here are a few things to ask yourself:

Do new and old customers like your products or services?
Do you get repeat customers?
Can new customers easily find you?

If you can answer yes to these questions, and you have strong revenues, then you might be ready for expansion internationally. You may want to start small and go after a foreign market that's easy to enter. For instance, one that speaks your language, or one where there are fewer competitors. Next, when that market succeeds, like your domestic market, enter the next couple of markets … one at a time, using the same business strategy, but with customization. Start by adapting the resources, skills, and values in order to develop a global corporate culture.

Hire the right team for your expansion, and accelerate your learning curve. Look online for resources for new companies, international export and government aid. Learn the global financial differences and pitfalls. Keep your business expenses in check. And if you run into tough times, think about using invoice factoring to keep the business growing strong until it is able to sustain on its own.

We have funding source for businesses all over the world, with offices in the United States, Canada, the United Kingdom, Australia, New Zealand, and Singapore. If you need guidance for global expansion or for trade finance transactions, factoring services, or to fund cross border invoices we can assist - so be sure to call at 678-868-1885 or visit our website at www.acdfinancial.com

You will soon see your business go from domestic to international successfully.

Invoice Factoring Can Aid Strategic Planning for Your Business

2010-09-08T07:07:00.001-07:00

The strategic planning process should result in identifying broad directions and approaches for your company as a whole, and it is usually intended to provide direction -- with all the more tactical details to be worked out later. Most companies look at planning every quarter, so a good strategic plan will be comprehensive in scope, developed with considerable input of data and thinking. You should look at the business as it stands now - it strengths - for instance, technical excellence, strong production, excellent marketing, or customer service. This kind of objective analysis will, of course, also bring out the weaknesses of your company. Clearly identifying any weaknesses will allow you to see where you needs to seek external help, or hire professionals with the skills required to resolve the issue.

In today's difficult economic times, one area where companies are often weak is knowing how to maintain enough cash flow. This is an area where your bookkeeper, or financial management team should think about solutions that can keep cash flow going, so your company can continue to meet bills and pay its employees on time, or purchase new equipment as needed. Invoice factoring, for example, is strategy that can help. Sometimes businesses use a "use it as you need it" invoice factoring funding option, where 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.

Upon receipt of invoices, the factor 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 the factor and the client receives their funding. At the end of the credit period the debtor pays the factor directly, thus completing the transaction.

Factoring is a Cost Effective Solution

2010-09-07T06:06:00.001-07:00

Today's banking environment has created a plus for the concept of small business factoring, mainly because it is a cost effective solution to obtain necessary working capital for them to sustain and grow. When a business owner gets cash from factoring invoices it can be used as a short term working capital funding source. There are many reasons why a businesses should consider factoring, also known as accounts receivable factoring, but primarily if they are in a business where they experience a slow accounts receivable cycle -- 60 or 90 days - or if the business is recovering from some unforeseen circumstance such as a loss due to a natural disaster.

Many businesses today are having a hard time keeping up with their bills, and some are just eeking by to meet payroll every month. Factoring is a great way to secure money as a business gets clients, makes money and grows. It is safe. You can continue doing business, buy more supplies in order to continue to do more business. Plus it is a smarter solution than going into debt via a bank loan, if you can even get one today given current economic conditions with banks less likely open new lines of credit or increase current credit limits. The bottom line. Factoring support business growth.

Factoring is Used to Reduce Administration Overhead

2010-09-03T17:33:00.001-07:00

Factoring is also known to be called debt factoring, and it basically involves selling your invoices to a third party, or a factoring company. In exchange, they will process the invoices, allowing you to draw funds against the money owed to your business. Essentially, these companies provide a finance, debt collection and ledger management service.

Factoring is commonly used by businesses to improve their cash flow but can also be used to reduce administration overheads. Businesses that supply this service are called factors or debt factoring companies.

Further, invoice discounting is an alternative way of drawing money against your invoices. However, your business retains control over the administration of your sales ledger. As well as providing finance, it offers valuable support services and credit insurance.

Factoring provides a fast prepayment against your sales ledger. It allows you, at a cost, to flexibly increase your working capital and improve cash flow.

Factoring is offered to businesses trading with other businesses on credit terms. It is not normally available to retailers or to cash traders.

Factoring companies can be subsidiaries of major banks and financial institutions, or independent businesses. Regardless, they will want to talk with you to learn more about your business, review your financial situation and study your business plan. This is how they evaluate your suitability for a factoring facility. Credit limits might be required - if so, you must agree how they will operate.

After signing an agreement, the factoring company will typically agree to a percent of the approved invoices, and typically payment is usually made available within 24 to 48 hours.

Check the notice period to the end of the service because many factors require three months' notice, but some require longer. Negotiate if you are not agree with the notice period.

ACCION USA Green Business Client Featured in “Entrepreneurship Interviews”

2010-09-02T08:11:00.001-07:00

By Cailey Ryckman

Entrepreneurship Interviews, a popular blog that features interviews with real life entrepreneurs and their businesses, recently highlighted one of ACCION USA's green loan recipients, Cheney Brand. Cheney owns the solar energy design and installment company SunBug Solar. Read more about Cheney and how he put his ACCION USA loan towards green business success.

View article...

How a Factoring Company Works

2010-09-01T06:40:00.001-07:00

Many business owners have turned to alternative funding methods such as factoring, otherwise known as accounts receivable factoring, because it offers clients a "use it as you need it" funding option. Therefore every 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.

A factoring company undertakes a thorough due diligence program that usually takes about 24 to 48 hours. Once the due diligence is completed, the client is at liberty to offer invoices to IFG for purchase. After receipt of the invoices, the factor will check the credit of the debtor named on each invoice and make sure the sale represented by each invoice has been satisfactorily complete.

Once credit has been verified, each debtor is notified of the purchase by IFG and the client is paid for the invoices. At the end of the credit period the debtor will make payment directly to the factor.

Tips to Help you Master your Next Networking Event

2010-08-31T17:46:00.002-07:00

1. Research. Research who will be attending and who you want to try to speak with.

2. Prepare. Be prepared to effectively deliver your elevator pitch.

3. Listen. Be an effective listener so you can learn more about your potential clients

Source: Winmark Business Solutions

Green Business Advice: Catching up with ‘g’ Green Design Center

2010-08-31T17:46:00.001-07:00

Author: Laura Kozien
Subject: Green Business Advice: Catching up with 'g' Green Design Center

By Cailey Ryckman

We recently caught up with Nicole Goldman, Founder and President of 'g' Green Design Center, to talk about her unique green business!

What does your company offer? Is a green business sustainable? Is there a demand for your products?

'g' Green Design Center is a green-building design center and retail showroom providing a full range of materials from flooring to renewable energy to build or remodel residences and small commercial facilities.

Yes, a green business is sustainable – at least we believe so and are proving this through our success at our flagship showroom on Cape Cod, and with the expansion of our business to new franchise locations–presently one in Norwell, MA, and one opening in Toronto Canada this fall.

We have seen the demand for our products grow tremendously since we opened three years ago. What was once the hope and dream for a homeowner seeking green building materials, has flourished to become a resource that homeowners and businesses can rely on for well-researched, quality, reliable green products.

Who are your clients? How has your client demographic changed in recent years?

Our clients are homeowners who are building new or remodeling, builders, architects, contractors and small businesses.

I think the client demographic has broadened to include certainly builders who were previously skeptical of changes in building techniques, homeowners who were under the impression that green materials would be more expensive or out of their price range which they are not, and the general public who has embraced their part in considering the materials they use, reuse, ingest, throw away or recycle.

What do you think the current perception of "green" is? Is it just a fad or is it here to stay?

"Green" has really come into its own. Everyone wants to understand the concepts better and to participate to some degree. The underlying truth is that "green" is not a fad and not something that we need to learn to understand. "Green" is really just smart. It's about being smart about your choices, about using only what you need, being careful about how you use materials, and dispose of things. All of the recent issues with climate change, oil spills, food contamination, etc. reminds us that we have to be responsible for how we use the environment around us, or we will not have it available for us to enjoy. We have to change our interaction with environment – the macro view and the micro view (in our own homes). People are coming to understand their part.

What advice would you give to other green businesses?

Work within a proven business mode— absolutely. Do not give it all away because we are guilty for how much damage has already been done, or to gain initial acceptance. A business has to make money to survive. If you are providing a necessary service or product with a focus on assisting your customers, and in the green economy thereby helping to contribute to some of the answers, then you should be proud of your work. Believe in yourself and never give up.

View article...

How To Write and Develop an Elevator Pitch

2010-08-30T06:00:00.000-07:00

What is an elevator pitch?
One of the most important things you can do as a businessperson is to learn how to effectively tell others about your business. You should be able to sum up the most unique and compelling aspects of your service or product in a way that catches a person's attention and piques their interest. An elevator pitch will help you articulate your message, close deals, find new prospects and help your audience understand what you are talking about and why they should care. And as the name says, you should be able to do this in the amount of time it takes to ride the elevator – about fifteen to thirty seconds!

Why do you need an elevator pitch?
While you could spend hours talking about your business, most people do not have the attention span or time to listen to your “spiel” for hours. Therefore you need a concise, educational way to teach others about what you do and leave them intrigued. The elevator pitch allows you to explain your business quickly and to the point – think “Big Picture”. Your elevator pitch should not sound “salesy” or focus completely how great your product or service is. You want to talk about your business and what it is that you do - not just what you are selling.

Two Questions your elevator pitch must answer:

1. What is your product or service? Briefly describe what it is your company does, what your role is and who you work with. Keep this description high level and do not go into too much detail.

2. What is your competitive advantage? You need to communicate how your company is different and stands out from your competition.

Things to remember when creating your elevator pitch:

· Always Be Prepared and Know Your Audience
Adjust the pitch to the person who is listening, and refine it as you and your business continue to grow and change. Depending on how you market your business and which settings you frequent, you may want to develop several different elevator pitches, which feature key words depending on your audience.

· Be Concise and Clear
An effective elevator pitch contains as few words as possible and is spoken slowly and with confidence. Rather than filling your pitch with industry acronyms and verbiage, an effective elevator pitch should be able to be understood by a number of acquaintances from various industries and roles.

· Practice, Practice, then Practice Some More
Very few people have the power to make compelling speeches about their entire professional lives on demand and under pressure. Take time to write down a pitch, practice, tweak it, and practice again.

· Use it or Lose it!
Don't just save your elevator speech for networking events! Give your elevator speech to anyone willing to listen. Friends, family, colleagues all may offer different insight as to what points you are missing from your pitch. This will teach you how to adapt or change to appeal to a variety of different audiences, as well as allow you to prepare for the different types of questions your audiences may ask you.

Source: Winmark Business Solutions

Destination: Karl’s Sausage

2010-08-29T10:26:00.003-07:00

Author: Elizabeth Garlow
Subject: Destination: Karl's Sausage

ACCION USA client Karl's Sausage Kitchen & European Market is a destination for meat lovers throughout New England and beyond. On Tuesday night, it was a destination for ACCION USA staff, as some of us drove to Saugus, MA to participate in a ceremony celebrating the installation of their new business sign.

It was for the design and installation of this sign that Karl's applied and was approved for an $18,000 loan from ACCION USA's Samuel Adams Brewing the American Dream Fund, a partnership between ACCION USA and Samuel Adams designed to provide access to capital and mentorship for small business owners in the food, beverage and hospitality sectors. "The credit crunch and recession have really made it difficult for businesses of our type to secure a loan. We were lucky to hear about the program," said Anita, one of the owners of Karl's.

As we stood outside for the lighting of the new sign, a fresh and catchy look that fully maintains the Karl's tradition, I glanced around me at the family, friends, distributors, and loyal customers that had gathered for an evening of German Sausages and celebration with the owners of Karl's. I thought about how much the business is impacting the community, not just in the lives of their 6 employees (soon to be 7), but their neighbors, long-time customers and especially Doris, the first employee of Karl's who has worked there since 1958. 'It's been my life', said Doris when selling items at the cash register. I was tremendously proud that ACCION USA was a part of this celebration, and could be a partner in the new life and energy that Anita and her husband Bob are pouring into this landmark business.

Check out write-ups in boston.com's business updates and the Lynn Daily. Congratulations Anita and Bob! ACCION USA is thrilled to be a part of your business journey.

Karl's Sausage Kitchen, located at 142 Broadway (Route 1 North), is open Tuesday-Thursday from 9 a.m. to 6 p.m., Friday from 9 a.m. to 7 p.m. and Saturday from 9a.m. to 6p.m. Reach the business by phone at (781) 233-3099 or online at www.karlssausage.com.

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The Toxic Monster on Main Street: Dry Cleaning

2010-08-29T10:26:00.001-07:00

ACD Financial Services provide business loans to businesses going green!

Author: jspaziano
Subject: The Toxic Monster on Main Street: Dry Cleaning

For many consumers and small business owners, green is an aspiration – a way of life. We rarely find ourselves swimming in the scientific details. So today, here's a close look at dry cleaning, the toxic "Monster on Main Street" that feeds on the uninformed consumer and business owner alike!

According to the U.S. EPA, almost 40 percent of dry cleaners don't have the resources needed to comply with regulations. With some green upgrades carrying heavy price tags for small businesses, many small dry cleaners choose to forego going green altogether or opt for "natural" options that are not so "green" in reality.

The result has been a number of storefronts making the "green" dry cleaning claim without the security you would like. Consumer uncertainty, fear and product confusion keep small businesses providing the high-toxic options.

The Federal government has caught onto the issue, and by 2020 all "co-inhabiting" dry cleaners (those located in apartment buildings, schools, etc) will need to transition from using perchloroethylene (perc for short). http://www.epa.gov/region2/capp/dryclean.htm Some states (i.e. CA, NJ & MA) are already providing incentives for dry cleaners to go "green". What's so bad about perc? The US Environmental Protection Agency (EPA) has found that clothes dry cleaned with perc can elevate levels of the toxin throughout a home and especially in the room where the garments are stored. Nursing mothers exposed to perc may excrete it in their milk, placing their infants at risk.

If governments, both local and national, are legislating around and promoting greener professional cleaning and if consumers are demanding real green options – why are 85% of dry cleaners still using perc? http://departments.oxy.edu/uepi/ppc/index.htm Could it be that many of the dry cleaners are mom and pop companies just trying to weather the recession?

ACCION USA, through it's Green Loan Program www.accionusa.org/green has started speaking with industry leaders such as Peter Sinsheimer, director of the Pollution Prevention Center at Occidental College and Joy Onasch at the Toxic Use Reduction Institute at the University of Massachusetts to see how microlending can play a role – financing the gap between government incentives and a business owner's pocket.

Is your dry cleaner really green? Do you have dry cleaners claiming to be "green" on your block? Do your part – get informed and fight the toxic monster on main street one piece of clothing at a time.

View article...

Sex Discrimination and Credit Cutbacks

2010-08-29T09:35:00.000-07:00

Author: Laura Kozien
Subject: Sex Discrimination and Credit Cutbacks

Change.org recently posted a fascinating (and enraging) blog on the latest phenomenon in credit cutbacks. Women are facing nothing less than sex discrimination in that mortgage lenders are now considering loss of income due to maternity leave as unemployment, resulting in disqualification or severe reduction in the loan amount.

The article couldn't have been timelier—the very same day that it was released, I was participating in a brainstorming session with ACCION USA's loan consultants about the challenges that our women borrowers face. As a single woman with an independent streak—especially when it comes to finances—I was shocked to hear the laundry list of credit, family, and financial issues that make it harder for many women to get loans:

Divorces can be costly and bitter, leaving women high bills to pay and ruined credit
While a majority of women act as the financial managers of their household, many keep their bills, credit cards, and finances in their husband's name. This doesn't allow a woman to build her own credit history, and therefore qualify for her own loan when she needs it
Women frequently do not want to involve their husbands in their businesses, while lenders of ten require husbands to co-borrow or cosign loans. While this could be because of pride and independence, I can't help but think that sometimes more sinister issues are at play (control? anger?).

If you're a microfinance lender that works with women—what issues can you add to this list? What do you think are the most important things to address in terms of increasing access to capital—be it for personal or business use—for women?

View article...

Microfinance: What’s In It for Today’s Teens?

2010-08-29T09:20:00.001-07:00

Guest post by: Percy Allison

Percy Allison is an intern at ACCION USA in New York. He is the co-founder the Trinity Microfinance Project (TMP) and the ACCION Youth Microfinance Council which is creating and connecting youth microfinance initiatives, starting in New York City. You can find TMP at www.trinitymicrofinanceproject.com or become a fan of Trinity Microfinance Project on Facebook

What attracts a high school senior to microfinance?

It may be hard to draw the comparison between a student's soccer struggle and the effort of the entrepreneur, but I would argue that the raw similarities are surprisingly real.

During four years of struggling to become the varsity starting goalie I learned about risk, drive, persistence and perseverance.

Every entrepreneur is taking a risk. They are starting their own business. They are taking a chance to succeed. Every young person takes risks. Every young person needs someone to give them a chance to prove to the world that they too can do it. Whether it is the teacher staying after class and giving an inspirational pep talk or the football coach giving the quarterback another chance after he threw the game-losing interception – every young person needs someone to believe in them – and so does the entrepreneur.

This is why so many young people are fired up by microfinance. It is other people being creative and finding their own way. So are we. It is other people putting their heart out for something. So are we. It is other people being courageous, intelligent and believing in themselves and more importantly believing in the world to support them. I guess that is the big thing. They believe. As young people, that is the most important thing. We believe. We are new to life and we believe in it. We want to find our way. These entrepreneurs share that same contagious passion. How could we not be inspired? How could we not see ourselves in the ACCION USA client?

There are a ton of organizations and a variety of ways to help alleviate poverty and do good. But among all of those, microfinance finds a special place in the heart of teens. In this way, helping the entrepreneur is like helping ourselves — seeing them achieve is seeing ourselves achieve. And it all is confirming our belief that in the end, success is believing in yourself.

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Billionaires Pledge to Give Away Half of Their Fortunes

2010-08-29T09:20:00.000-07:00

Everybody in the non-profit sector should make sure to read the New York Times article "Pledge to Give Away Half Gains Billionaire Adherents" published yesterday.

According to Stephanie Strom close to 40 American billionaires including NYC' Mayor Bloomberg, David Rockefeller, Bill and Melinda Gates, and Warren Buffett made the promise to donate at least half of their fortune to philanthropy.

The combined total of the donations will be close to $600 billion !

What do you think this means for microfinance and the non-profit sector?

View article...

Negotiating Payment Terms

2010-08-29T08:05:00.001-07:00

Negotiating extended payment terms with your suppliers is a technique that can be used to delay your cash flows and improve your overall cash flow. Most of your suppliers will require payment within 20 or 30 days after you receive their bill. If you're like most other business owners, you probably assume that these payment terms are non-negotiable. However, some of your suppliers may be willing to negotiate longer credit terms. Their willingness to offer you better credit terms may be based on one of the following:

· your past and present business relationship with them

· your past payment history and perceived credit worthiness

· securing a large order or your continued business

This is one of those situations where it can't hurt to ask. But, be prepared to justify your request. Your suppliers will likely extend your payment terms if presented with a strong case!

Deferring expenses. To a limited extent, your business may be able to delay cash flows by deferring the payment of certain expenses. Payroll is one example of an expense that you may be able to defer. If your business pays its employees once a week, you may want to consider switching to paying your employees once every two weeks instead. Likewise, if your business writes payroll checks once every two weeks, you might switch to a monthly payroll cycle. Sales commissions or sales bonuses are two other expenses that may provide you with some deferral possibilities. Be sure to review your business for any other expenses that can be reasonably deferred.

It's Not About How Your Message Is Delivered

2010-08-29T02:23:00.002-07:00

This is a great article…

It's Not About How Your Message Is Delivered

July 2010

I was part of a team conducting a focus group for a large nonprofit client. The focus group comprised representatives from the financial sector, a target audience this particular national nonprofit was most interested in cultivating through its messaging.

One or more of the messages we were about to test had the words "partners" and "partnership" in them, which we thought were no-brainers. After all, they are simple, easy-to-understand words that convey affiliation, cooperation, collaboration, alliance, all the good stuff, right?

Wrong!

As the messages came up for the group's reaction, two bankers immediately raised their hands.

"In our industry, the words 'partners' and 'partnership' are loaded with legal implications," said one. "We don't mind being recognized as 'working together' with the organization, but we'd rather not be identified as 'partners,'" said the other.

Bad-dah-bing!

Had we allowed our client to go public with the original messages, chances are the impact that they might have had on their intended audience, namely potential financial sector funders, would have been the opposite from what the organization was hoping for.

The lesson learned: It's not about how your message is delivered but rather how it is received that makes all the difference.

Fact is, most organizations shoot from the hip when it comes to talking about themselves. They don't pay enough attention to the messages they send out and often have no idea how those messages are affecting the very audiences they are seeking to reach.

Gain Control Over Your Messages

Gain control over your messaging process by creating a "messaging package," namely by compiling the core messages you want to convey to your target audiences. The purpose of your messaging package is to help everyone affiliated with your organization stay on message.

What follows is a simplified version of how to get started.

Step 1: Come to internal consensus about what you want to convey about your organization through your messaging. These messages may include your organization's core cultural values, the kinds of programs and services it provides, how it provides them, and so forth.

The best way to come to consensus around these messages is to conduct an internal SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis. The goal of this introspective analysis—which gets best results when conducted by a knowledgeable, objective third party—often goes beyond messaging and allows an organization, perhaps for the first time, consciously to identify and promote its strengths, address its weaknesses, leverage its opportunities, and prepare for any threats it may perceive.

Keep in mind that whatever messages come out of this process need to reflect your organization's story, not its fairy tale. For example, if one of the strengths you identify is that your organization is a good steward of public funding, make sure that that's the case, without exception!

Step 2: Conduct external research. Through focus groups, surveys, or informal conversations, learn what your target audiences want to know about your organization. Are their current perceptions of who you are and what you do accurate? If not, why not, and how do you need to alter your messages to gain their attention, recognition, and understanding?

Step 3: Draft your messages. Use what you have learned through your internal SWOT analysis and external research to draft a messaging package that contains all the messages you believe are true and accurate about your organization and that will resonate with your target audiences.

Step 4: Test your messages! Before going public with your messages, be sure to test them. Remember, I may enjoy working with your organization, but I might not appreciate being identified as a partner.

Step 5: Make sure everyone affiliated with your organization knows what your messaging package contains. The goal of every organization should be "to stay on message." Otherwise, if everyone affiliated with your organization is sending out different messages, your audiences will be confused.

To understand who you are and what you do, people outside your organization need to receive clear, consistent, and concise messages. A messaging package can help you do this—and take a lot of the stress out of talking about your organization as well.

· How useful did you find this article? Give us your feedback

Larry Checco is president of Checco Communications and author of Branding for Success: A Roadmap for Raising the Visibility and Value of Your Nonprofit Organization. Larry is a nationally recognized public speaker, workshop presenter, and consultant on branding.

Note: The views expressed in this article are those of the author and may or may not represent GuideStar's opinions. GuideStar is committed to providing a range of topics and perspectives to our users. We make every effort to obtain articles from knowledgeable, trustworthy sources, but we make no warranties or representations with regard to articles written by persons outside GuideStar.

How the SBA is Inextricably Linked to Our Economic Future

2010-08-29T02:23:00.001-07:00

Great post by Bill Siegel at The Receivables Exchange. We are a funder on the exchange.

Feed: BLOG | Capital Matters
Posted on: Tuesday, August 10, 2010 4:50 PM
Author: Bill Siegel
Subject: How the SBA is Inextricably Linked to Our Economic Future

Scientists in Britain were recently able to definitively solve one the world's oldest riddles: "Which came first, the chicken or the egg?" Using a supercomputer that analyzed the early formation of the shell, a team of scientists discovered that, in fact, chickens were around before the egg evolved as a means to incubate offspring.

If scientists can solve such ancient riddles, it stands to reason that we can solve some more modern ones, too. The U.S. unemployment rate has been hovering at 9.5% for two months now, down from a high of over 10% at the end of 2009, and, adjusted for one-time restocking of inventories, Q2 GDP remains anemic. So, here's the riddle: how do we create jobs when the demand simply isn't there?

Giving more money to employers so they can pay more salaries is a good place to start. Some quick analysis provides evidence that monthly employment figures and business lending statistics are inextricably linked. Extending credit allows business to not only buy more goods (capital spending and working capital), but also pay salaries to new workers, who in turn spend their salaries on consumer products. Business credit begets both corporate spending and consumer spending. Spending drives GDP. It's a less complicated chain of logic than the genetic work performed by the chicken and egg scientists, but perhaps more relevant.

If we agree that the above logic is reasonable, the place to start when tackling the job creation problem is by stoking credit, particularly to small and midsize businesses (SMBs). SMBs employ 52%[1] of the workers in the U.S., but they account for under 2% of the total issuance of credit. The dearth of small business credit is directly correlated to the poor employment picture. The past 24 months of data show a very strong correlation between the amount of SBA-backed 7(a) loans issued, and the rate of change in employment reported monthly by the Bureau of Labor Statistics. The below chart plots the two statistics against each other:

With a correlation coefficient of 66%, the relationship is not only practical, but visually and statistically[2] clear.

But the chicken-and-egg problem is that increasingly risk-averse banks will be reluctant to lend to small businesses that actually need capital to hire employees. We can solve this by providing incentives, but some of the more successful incentives we've devised are disappearing. At the end of June, a program started under TARP, which moved the SBA's loan guarantee to 90% from 75%, expired. The effect on lending to small businesses was dramatic, and rippled through to employment. In the first four months of the year, net new SBA loans covered by the 90% guarantee, averaged $1.2 billion per month. In June and July following the expiration of the program, new SBA loans have been running just over $300 million, a 75% drop.

Legislation to renew the program is currently stalled in the Senate. Meanwhile the Fed continues to support the credit markets which remain open to only those companies large enough to access them. The Fed's drive to keep rates as low as possible is actually creating a further drag on the ability for commercial banks to lend. One of the biggest obstacles for SBA lending is the lack of economic scale and profitability to the issuing bank. The loans are simply too small and time consuming to underwrite for the program to scratch the upper half of most banks' priority lists. The Fed's compression of the yield curve (the difference between short term rates and long term rates on Treasury notes) has made it difficult for commercial banks to create robust earnings from new lending. Net interest margins (the difference between what a bank earns on its loan portfolio, offset by the amount it cost the bank to borrow the money from depositors and other lenders) have been similarly compressed by the Fed's actions. Tight margins mean less profit, and result in more costly lending programs being curtailed. The scalability and cost of issuing lots of SBA loans make the programs easy targets to cut.

Could the problem be solved in reverse order perhaps? A rise in employment could finally give SMBs the resources to go out and take on new projects, thus increasing the demand and subsequent issuance of SBA loans. Sounds reasonable except for one thorny reality: Employees generally like to be paid first, so the money has to be in the bank before the employment letters hit the mailboxes and ripple through to the statistics.

No, unfortunately the current state of SMB balance sheets does not afford them the ability to hire in the absence of credit –- unless they can manage cash flow more effectively. The Receivables Exchange is just one tool SMBs are using to continue growing when credit is tight. In fact, receivables trading volume on our platform has increased 300% YTD as of July 31, which means there's a hunger for innovative ways to optimize cash flow and access growth capital. Companies are now lowering their cost of capital by 30%, on average, by selling receivables on the Exchange. SMBs may not solve this particular chicken-and-egg problem, but with innovative financing sources like The Receivables Exchange, perhaps they don't have to.

Bill Siegel, CFA, is senior vice president and head of the Liquidity Desk at The Receivables Exchange, an accounts receivable financing tool. The Exchange is the the world's first online marketplace for real-time trading of accounts receivable. Find out how to trade accounts receivable.

[1] U.S. Small Business Administration (SBA)

[2] Using N=24, df=22. Correlation Coefficient of .66 is statistically significant at a P-value of .01

http://blog.receivablesxchange.com/blog/bid/12937/How-the-SBA-is-Inextricably-Linked-to-Our-Economic-Future

The Receivables Exchange is the world's first online marketplace for real-time trading of accounts receivable.

View article...

CDFI Awards $750,000 to ACCION USA

2010-08-29T02:09:00.001-07:00

Feed: Main Street Microfinance
Posted on: Thursday, August 19, 2010 1:34 PM
Author: Alejandra Boggiano
Subject: CDFI Awards $750,000 to ACCION USA

This morning ACCION USA received a $750,00 grant, the largest given to the New York City office. This grant is part of $104.9 million in awards for 180 local financial institutions serving 44states and the District of Columbia from CDFI, the Community Development Financial Institutions Fund from the U.S. Treasury Department. (Read the full press release.)

This grant will allow ACCION USA to lend more and continue improving small businesses everywhere.

ACCION USA's Grant by CDFI

View article...

Gain Cash Flow via Invoice Factoring

2010-08-29T02:02:00.001-07:00

Lately thanks to the economic circumstances globally, many businesses are experiencing unpredictable cash flow. But it is tough to make incoming cash stretch to cover your short-term obligations. One way to regain your financial balance is to work with a factoring company, which can provide you with working capital when conventional funding is not available.

Once your are set up with a factor, you'll be advanced a large percentage of the face value of the invoice. Credit worthy accounts receivables can be traded in or cashed in for immediate cash that is available to you in less than 24 to 48 hours.

If you are waiting for the invoice to be paid in the next 30-45 days, or longer, the cost of doing business with a factor is the discount fee. These fees from an invoice factoring company range from one to ten percent, depending on volume, creditworthiness of the customer being invoiced and risk.

Source: Interface Financial Group

Small Businesses Won a Record $96.8 billion in federal contracts in FY 2009

2010-08-28T17:35:00.003-07:00

SBA NEWS RELEASE
Press Office

***************

Small Business Procurement Scorecard Shows Progress toward Meeting 23
Percent Goal for Small Business Contracting

SBA Working with Federal Agencies to Improve Integrity of Data, Clarity

***************

Release Date: August 27, 2010

Contact: Tiffani Clements (202) 401-0035
Hayley Matz (202) 205-6948
Release Number: 10-48
Internet Address: http://www.sba.gov/news

***************

WASHINGTON - Small businesses won a record $96.8 billion in federal prime
contracts in Fiscal Year (FY) 2009 (Oct. 1, 2008-Sept. 30, 2009), an
increase
of more than $3 billion from FY 2008, according to the U.S. Small Business
Administration's fourth annual small business procurement scorecard released

today. This dollar amount represents 21.89 percent of all federal spending
-
an improvement over FY2008. Additionally, performance in each of the
government's socioeconomic subcategories increased for FY2009.

"Small businesses received a record $96.8 billion in federal contracts in
2009.
There was an increase in both dollars and contracting share for every small
business category. This represents real progress, but not enough, we must
reaffirm our commitment to ensuring that the 23 percent goal is met and
exceeded," SBA Administrator Karen Mills said. "Federal contracts awarded to

small businesses are a 'win-win' - providing small businesses with the
opportunity to grow and create jobs, and offering innovative services and
essential goods to the government at great value to the taxpayers."

Small Business Goaling Summary Report

Small Businesses
2009 Goal 23%
2009 Percentage 21.89%
2009 Contract Dollars $96.8 billion
2008 Percentage 21.5%
2008 Contract Dollars $93.2 billion

Women Owned Small Business
2009 Goal 5%
2009 Percentage 3.68%
2009 Contract Dollars $16.3 billion
2008 Percentage 3.40%
2008 Contract Dollars $14.7 billion

Small Disadvantaged Businesses
2009 Goal 5%
2009 Percentage 7.57%
2009 Contract Dollars $33.5 billion
2008 Percentage 6.76%
2008 Contract Dollars $29.3 billion

Service-Disabled Veteran Owned Small Business
2009 Goal 3%
2009 Percentage 1.98%
2009 Contract Dollars $8.8 billion
2008 Percentage 1.49%
2008 Contract Dollars $6.4 billion

HUBZone
2009 Goal 3%
2009 Percentage 2.81%
2009 Contract Dollars $12.4 billion
2008 Percentage 2.34%
2008 Contract Dollars $10.1 billion

SBA is required to report to the President and Congress on achievements by
federal agencies and departments against their annual goal to ensure greater

accountability. The small business Procurement Scorecard fulfills that
requirement by providing an assessment of federal achievement in prime
contracting and subcontracting to small businesses by the 24 Chief Financial

Officers Act agencies. It also measures progress that departments are making

to ensure small business opportunities remain an integral part of their
acquisition of goods and services to meet mission objectives.
The fourth annual Scorecard is an assessment tool (1) to measure how well
federal agencies reach their small business and socio-economic prime
contracting and subcontracting goals, (2) provide accurate and transparent
contracting data and (3) report agency-specific progress. The prime and
subcontracting component goals include goals for small businesses, small
businesses owned by women, small disadvantaged businesses, service-disabled
veteran owned small businesses, and small businesses in located in HUBZones.

As it does every year, the SBA has closely examined federal procurement
reporting and data to ensure the greatest level of transparency possible.
After identifying anomalies in initial reports, the SBA has worked
collaboratively - and will continue to work - with agencies across the
government to correct as many data issues as possible, and improve the
integrity of all small business federal contracting reporting moving
forward.

The Recovery Act and small business contracting

The American Recovery and Reinvestment Act (ARRA) provided additional
resources to federal agencies in fiscal year 2009, providing additional
opportunities for small businesses to win federal contracts. Through early
August, small businesses have secured over 30 percent of Recovery Act
Contracts. This preliminary data underscores the priority the
Administration
and the SBA have placed on increasing small businesses access to federal
contracts so that they can grow and create jobs.

About the Scorecard

SBA graded 24 agencies on each of the individual prime contracting goals
established by Congress and used a new A+ through F letter grade system
rather than the previous red, yellow, and green ratings. The new scorecard
format was implemented this year to provide greater clarity and transparency

on how well each agency is doing in meeting its individual small business
prime
contracting goals.

Each federal agency has a different small business contracting goal,
determined annually in consultation with SBA. SBA ensures that the sum
total
of all of the goals meets the 23 percent target established by law.

Each agency's overall grade will show an A+ for agencies that meet or exceed

120 percent of their goals, an A for those between 100 percent and 119
percent, a B for 90 to 99 percent, a C for 80 to 89 percent, a D for 70 to
79
percent and an F for less than 70 percent. An agency's overall grade was
comprised of three quantitative measures: prime contracts (80 percent),
subcontracts (10 percent) and its progress plan for meeting goals (10
percent).

The scorecards released today by SBA, as well as a detailed explanation of
the
new scorecard methodology, is available online:
http://www.sba.gov/aboutsba/sbaprograms/goals/index.html.

As part of its ongoing efforts to increase access to contracting
opportunities
for small businesses, the SBA is continuing to work with federal agency
procurement staff to strengthen the integrity of contracting data, including

providing tools to facilitate public review of data, improvements to systems

and training to improve accuracy.

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Small Business and Franchise Financing with IRA and 401(k) Funds

2010-08-28T17:35:00.001-07:00

You can invest up to 100% of your existing retirement funds into a small business or franchise without taking a taxable distribution or paying tax penalties.

Similar to buying stock in a publicly traded company, your retirement plan can buy stock in your own privately held business. You can also use IRA/401K funds as a down payment for SBA or unsecured loan.

Small Businesses Compete for Federal Highway Contracts

2010-08-28T17:24:00.001-07:00

U.S. Transportation Secretary Ray LaHood announced $11.6 million in grants to help disadvantaged business enterprises (DBEs) compete for federal highway contracts in 30 states and Puerto Rico. Providing federal aid to DBE firms to improve their ability to compete for and fulfill federal highway contracts, these grants are from the Federal Highway Administration's Disadvantaged Business Enterprise/Supportive Services (DBE/SS) program.

The Federal Highway Administration (FHWA) has been promoting the participation of DBEs in federal-aid highway contracts through state-managed programs since 1982. DBE/SS grants are part of an ongoing federal effort to help state departments of transportation train certified DBE firms on a wide range of business management practices, including procurement assistance and guidance on securing bonding. The goal of the program is to help DBEs successfully compete for federal highway projects.

Another business management practice being used has to do with invoice factoring. Many real estate developers and construction companies are also facing economic slumps thanks to the economy, and many are only barely getting by and are using construction factoring to survive from one job to the next. Many factoring companies are educating small businesses on how to use their services.

Organizing Your Expenses and Using Accounts Receivables Factoring

2010-08-13T20:02:00.001-07:00

Expenses and Using Accounts Receivables Factoring

http://www.ifgnetwork.com

When it comes to keeping track of your company's finances, research shows that a great number of business owners neglect their books. They neglect to track income and expenses by letting business receipts pile up, or worse, they lose the receipts altogether. They also fail to enter their expense data into a bookkeeping system. Or maybe they are keeping their income and expense records up to date, but they fail to use the numbers to answer questions about their business's financial condition. This scenario is more common among owners of small to medium-size businesses. The reality is that by simply keeping up with the basics, or possibly employing accounts receivable factoring, you can help prevent a true financial disaster, especially given today's economic conditions.

Many business owners look at financial management with fear or they claim to be too busy running the business to deal with tracking their income and expenses. There are also excellent procedures that can help your cash flow such as accounts receivable factoring, but first, here are some essential tips for better managing your business expenses:

Open a separate business bank account. I have met far too many new business owners who do not have a separate business bank account, and run their whole operation out of their personal bank account. This is a huge mistake for a number of reasons.

Don't comingle personal and business funds. Mixing your business transactions with personal transactions will make it impossible to do the types of simple financial management tasks and what's worse, even if you have set up an LLC to protect your personal assets, this will cause you to lose that protection.

Use bookkeeping software. It will automate and track account balances and also generate financial reports.

Create systems to help you stay organized. Using a simple process for organizing your receipts and files will help you to handle most bookkeeping tasks.

Organize records of expenses and income. Financial management starts with keeping records of all the money the business spends (expenses) and all the money it earns (income). This means carefully keeping and organizing your receipts and expense and your income receipts (such as a cash register tape of your café's income, check stubs from your client's payment checks, or your invoices to clients marked "Paid").

Generate financial reports. Generating reports is key to managing your business's finances and making strategic decisions. With up-to-date information entered into your bookkeeping system, you'll generate reports including: cash-flow projections, profit and loss reports comparing monthly income to monthly expenses, and cash-flow projections that also include other sources of income.

Implementing the above steps will help you to pace your company's growth, trim expenses and/or price your services or goods more effectively. It is also possible that you will be able to reduce your taxes by being better prepared to claim all deductible expenses. What's more, you will be able to manage your business's cash flow better. And if you are currently in a pinch and are cash poor because you don't yet have these systems in place, and you can't pay your bills on time, an effective cash management tool known as accounts receivable factoring. You may also need to hire a financial business consultant a couple of times during the start-up phase of your business to help the business get off the ground.

Original post blogged on b2evolution.

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Factoring is a Short and Long Term Solution

2010-07-29T18:03:00.001-07:00

Remarkably, factoring can provide both a short term and longer term solution to small businesses during economically challenging times like these. It's fast and efficient and unlike a loan, it does not appear on the balance sheet. Invoice factoring is simply a "use it as you need it" service today.

Invoice factoring is basically a "use it as you need it" funding option, therefore every 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, and the process includes:

Due Diligence - Once approached by a prospective client, the factor undertakes a thorough due diligence program that typically takes about 24 to 48 hours.

Review Invoices - Once the due diligence is completed, the client is at liberty to offer invoices to the factor for purchase.

Credit Verification - Upon receipt of the invoices, the factor will check the credit of the debtor named on each invoice and make sure the sale represented by each invoice has been satisfactorily complete.

Debtors' Notification - Once credit has been verified, each debtor is notified of the purchase by the factor and the client is paid for the invoices.

Debtor Payments - At the end of the credit period the debtor will make payment directly to the factor thus completing the transaction.

What You Should Do To Get Your Small Business Started

2010-07-26T08:04:00.001-07:00

As a volunteer small business counselor I frequently get questions about what one should do to get a business started. Here is an excerpt from one of my counseling sessions. "To get your business started you should develop a business plan. Your business plan will serve as a road map to success. It is very difficult (nearly impossible) to obtain any financing without a business plan unless you have the funds yourself or have friends and family who will lend or invest in you. "

Make A Difference

2010-07-23T21:22:00.000-07:00

If you want to make a difference, find a cause that you are passionate about and donate your time, money or both. It doesn't take a lot of time or money to make an impact. All it takes is desire.

Here's How To Improve Your Credit Score

2010-07-23T08:01:00.000-07:00

Pay your bills on time.
Have at least three to six active accounts.
Keep credit card balances low.
Avoid closing credit cards, especially accounts you've had for a long time.
Avoid applying for new credit.

Source: Credit.com

Top 10 Credit Reporting Agencies

2010-07-18T16:30:00.001-07:00

Top 10 Business Credit Bureaus

The majority of us can easily identify with the three major consumer credit reporting agencies known as Equifax, Transunion, and Experian. These are privately held companies that specialize in collecting data on consumers and then compiling the data in a format known as a credit report.

Did you know that there are companies that collect data specifically on businesses? These privately held companies are known as business credit bureaus and they compile their data into a format called a business credit report. They collect data from banks, suppliers, finance companies, business owners, and look at public records such as tax liens, bankruptcies, and judgments.

It’s important for you to get your company listed because it can make the process of obtaining business credit and financing much easier but keep in mind that there is over 25 other business credit bureaus not listed here and some are even industry specific such as trucking or construction. You may want to look into some of these particular bureaus to get listed with in addition to the top 10 depending on the type of industry your business is in.

Here are my Top 10 Business Credit Bureaus you should know.

1. Dun and Bradstreet (D&B)
D&B is the primary business credit reporting agency with over 70 million businesses registered in their database. A business credit file with D&B contains information provided by the business owner and vendors of the business. D&B issues a paydex score based on payment experiences and a DUNS rating based on financials.

2. Equifax Small Business Enterprise
Equifax, one of the three primary consumer credit reporting agencies, also provides business credit evaluations for over 22,000,000 small businesses and corporations.

3. Experian SmartBusinessReportsTM
Experian is another one of the three primary consumer credit reporting agencies who provides business credit evaluations as well. Unlike D&B and Equifax, Experian’s SmartBusinessReportsTM doesn’t assign a business credit score.

4. FDInsight™
This is a company that is relatively new to the business credit market. It was originally the second largest credit reporting company in the mortgage broker field. The information on their business files is provided by the business owner or a third party and then every piece of information is verified by the staff of FDInsight™. They are known to provide the most accurate business credit report in the industry.

5. Credit.net
Credit.net is a division of InfoUSA® that generates credit reports on approximately 15,000,000 businesses. The credit analysis provided by Credit.net relies on four criteria: years in business, number of employees, public records, and stability within the industry. Its business credit score is a grading system from A through C (70-100) and is awarded as an evaluation of the company’s credit history.

6. AccurintTMBusiness
This is a new business that is a combination of forces between The Better Business Bureau (BBB) and LexisNexis. Accurint Business is like Experian in that they provide public and business profile information, including credit history based on payment patterns of small, medium, and large companies.

7. ClientChecker
This is a credit reporting bureau that started in 2003 and specifically targets small businesses, freelance professionals, and contractors searching for information to help them determine which other businesses they should do business with. Rather than providing a fixed business credit score, ClientChecker compiles information based on feedback from its members.

8. Paynet
Paynet collects real-time loan information from more than 200 leading U.S. lenders. The company’s database has a collection of commercial loans and leases. It’s the largest proprietary database of long-term debt over a period of ten years.

9. Cortera
Cortera provides credit information on businesses large and small but then combines it with ratings from a community of small business owners, who provide feedback both good and bad on these businesses.

10. ChexSystems
The tenth reporting agency is extremely important as it has to do with your ability to open up a business checking account with a financial institution. Banks use a reporting agency known as ChexSystems which is a network comprised of member Financial Institutions that regularly contribute information on mishandled checking and savings accounts to a central location.

These business credit bureaus allow your business to establish its own credit profile, scores, and payment history. As a business owner you should know who the major business credit bureaus are and what type of data they collect on your business. Knowing this will give you greater insight into getting listed and established in the business credit industry.

Good News for Factoring Companies: June Small Business Economic Confidence Report

2010-07-18T14:59:00.004-07:00

According to a Discover Financial Services (DFS) report that was published today small business owners' economic confidence slid this People are very concerned over temporary cash flow issues these days. The survey polls 750 small business owners, and this month the index dipped to 86.1 percent in June from 87.4 percent in May after a two month rise. There was a some improvement in the way small business owners see the climate for their own businesses.

Even as last month business owners increased their spending, payroll, mounting bills and operating costs are causing many business owners stress, indicating that cash flow is still an issue. This is good news for factoring companies like ACD Financial Services who is handling accounts receivable factoring for small to medium-sized businesses.

In June, 29 percent of small business owners said they believe the overall economy is getting better, falling from 35 percent in May. 51 percent said the economy is getting worse, steady from the previous month, and 16 percent see the economy as the same, which is up from 12 percent for May.

As for negative impacts on their businesses, Discover reports that a majority of small business owners attributed it to the stock market and the Gulf Coast oil spill. 30 percent of business owners polled said the oil spill was having a negative effect, while 40 percent believed there was negative impact from the debt crisis in Europe.

These kinds of reports show that in these times of troubles, cash flow is critical to saying in business and growing. Factoring is a tool that many businesses have used throughout the years to manage cash better, and grow. It provides quick turn-around, and

ACD Financial Services provides innovation solutions by offering short-term working capital to growing businesses. Many businesses do not get paid right away for delivered products/services, and every business needs some cash on hand in order to sustain and grow. So what happens if you do not get paid for a few months, and you do not have time to seek alternative financing through banks or venture capitalists? Spot Factoring is the answer to your troubles. Factoring is an extremely fast way to turn your receivables into cash. In an ordinary scenario you might have to wait 30, 60, or sometimes even 90 days for invoices to be paid; AFS looks at your customers' credit (not yours) and can pay you the majority of what's owed to you within as little as 24 hours.

Courtesy of IFG Network.

Businesses Use Factoring - Awaiting Small Business Job Bill

2010-07-18T14:59:00.003-07:00

www.acdfinancial.com

There is a new bill under consideration in the U.S. Senate called the Small Business Job bill -- with some temporary as well as permanent changes to government programs, loan program enhancements and tax relief-provisions. With many small businesses surviving via alternative financing methods such as invoice factoring, there is much focus to helping small businesses get back on their feet.

This bill temporarily increases the capital gains exclusion for stock issued by some small businesses to 100 percent from the time the bill is enacted through the end of the year. The gain is limited to 10 times the original investment or $10 million. It also would permit self-employed business owners to deduct their family's health insurance expenses from their self-employment tax income in 2010. Businesses with less than $50 million in gross receipts would be able to carry back general business credits to offset tax liabilities for five years. Currently it is only one year; and first-year write-offs would temporarily increase for business equipment from $250,000 to $500,000 and raise the cap on eligible expenditures that triggers a phase-out of the incentive from $800,000 to $2 million.

If a company converts from a C to an S corporation, it must retain its assets for at least 10 years or pay a 35 percent tax on the built-in gains that occurred before the company made the conversion, and this bill would reduce the period to five years for an asset sold in the 2011 tax year.

Although these provisions expire after 2011, the bill would expand Section 179 to cover some real property improvements. There's also a really generous 50 percent first-year depreciation for some kinds of property; an increase, for 2010, the deduction for start-up expenditures to $10,000, from $5,000; and the bill raises the cap on expenditures that triggers a phase-out of the deduction to $60,000, from $50,000.

There is a penalty for failing to report on a tax return a transaction - set at 75 percent of the tax benefit and capped at $200,000 for corporations and $100,000 for individuals. A more detailed summary of the bill and the legislative text are posted at the Senate Finance Committee Web site.

These laws, if the bill is passed, will still take some time to put in place, and many businesses are still struggling. Factoring can be an excellent alternate financing program, to meet bill, pay employees and survive until such time as the economy turns around.

Original post blogged on b2evolution. Courtesy of IFG Network.

Accounts Payables and Accounts Receivables Factoring Tips

2010-07-18T14:59:00.001-07:00

www.acdfinancial.com

It can be of tremendous benefit to your company if you follow best-of-practice accounts payables rules, because when managed well, you'll improve the working capital in your business. When you reduce the amount of working capital financing that you need. Here are some tips: Try to obtain business credit from new and potential suppliers in advance of when you need it; never run out of essential supplies; get price and volume discounts and volume discounts when you can demonstrate a track record of a well managed account.

This will help you obtain an advantage over your competitors, to move towards better returns on investment (ROI); document your procedures well documented so that no one is unclear about what needs to be done. This reduces the time wasted by management and your business will be more efficient; make sure you set clear expenditure mandates which will improve net profit by reducing unneccessary expenditures; when things get tight, consider accounts recievables financing. One of the oldest and most widely used forms of funding, standard invoice factoring has been used for thousands of years. But there is a newer form of factoring called single invoice factoirng, or spot factoring, which allows the factoring of one invoice at a time. Your business can receive an advance of 90 percent against invoices.

For more information about invoice factoring, go acdfinancial.com.

Original post blogged on b2evolution. Courtesy of IFG Network.

Small Business Recovery is than Slower Past Recessions

2010-07-18T14:49:00.005-07:00

www.acdfinancial.com

Over the last three decades of recessions in the United States, it has been small businesses with fewer than 100 employees who pulled the country out of each recession - via hiring. But it is not so this time. Worse than in previous downturns, unemployment levels are at 10 percent.

There are many reasons that are keeping small businesses owners from hiring again including: little demand for goods and services by cnsumers; a fall of in small business start ups; the devastation of the real estate market; overall uncertainty about the economic outlook; concerns about the economies abroad. Many analysts believe that these are the reasons why the economic recovery is so slow.

According to Census Bureau data, during the three previous economic recoveries, small business employers accounted for the vast majority of new jobs. Most of these companies had fewer than 20 workers. Owners cannot hire whent here is little or no growth in sales.

What's worse, businesses need cash flow on hand to grow, and many businesses have none. However, some companies have discovered that invoice factoring is their salvation to keep things going. Factoring is the way to get paid early on invoices that are now being stretched out to 60 or 90 days. Many service companies simply cannot wait that long to get paid for services rendered. They need the funds to pay employees, bills, or buy supplies for production on new clients' work, and when they use accounts receivable factoring , they get the funds in as little as 24 to 48 hours.

Original post blogged on b2evolution. Courtesy of IFG Network.

The Federal Reserve Urges Banks to Aid Small Businesses

2010-07-18T14:49:00.003-07:00

Today news for small businesses that was posted in the Wall Street Journal featured Ben Bernanke, Federal Reserve Chairman urging banks and regulators to seek out ways to ensure that small businesses get the credit they need to create jobs. He said that making credit accessible to sound small businesses is crucial to our economic recovery. He also believes that not enough is being done to ensure that loans can be obtained by deserving, sound small businesses who depend on access to credit critically. He also cited outstanding loans to small businesses have declined to less than $670 billion in Q1 of 2010 from about $710 billion in Q2 of 2008.

Small business has long been thought of as the key to unemployment, which is still high, even as the jobless rate edged down to 9.5 percent in June from 9.7 percent in May. The Fed has been on a fact-finding mission, to identify how to improve credit access for small firms which account for about 60 percent of job creation, since February. Forty meetings have taken place around the United States with small businesses, community leaders and bankers. All have tried to identify obstacles that have prevented lending as needed.

These facts are all that much more reason for small businesses to seriously think about invoice factoring. Companies like The Interface Financial Group (IFG) has long been providing financial resources such as factoring to businesses in need, whether it is their entire accounts receivables factoring or single invoice factoring, also known as spot factoring, when cash is needed during a time of stress. Go to www.acdfinancial.com for more information about factoring.

Original post blogged on b2evolution. Courtesy of IFG Network.

Invoice Factoring Comes in Handy for Businesses in the Senior Market

2010-07-18T14:49:00.001-07:00

www.acdfinancial.com

The U.S. Bureau of Labor Statistics says the aging-services industry, elderly and disabled services, also known as home healthcare and community care facilities for the elderly, make up three of the top ten fast employment growth industries. Gerontology one of the hottest academic fields for the future, says the Chronicle of Higher Education.

Gerontology is now a major at schools like the University of Southern California (USC), where students are tracking the trends and creating businesses that fulfill needs after they graduate to serve the more than 37 million seniors today. What's more, in around 20 years, seniors will comprise nearly 20 percent of the U.S. population. Analysts say they also have cash and a calculated spending that exceeds $1 trillion.

It's these entrepreneurs catering to seniors that will have to keep their businesses running during a tough economy, so accounts receivable factoring might help them through the early stages of their new companies. Some of the businesses cater to baby boomers and older Gen Xers who must find care for their parents at senior adult day-care centers where these seniors can socialize and participate in activities in a supervised environment. Informal social centers are more prevalent, catering to those with higher levels of functioning, whereas a medical day-care facility provides a more complex level of care incouding one or more registered nurses on staff.

Given the ups and downs in patient occupancies, and supply costs, starting one of these businesses requries cash flow, so when cash is low at the end of the month, many owners use invoice factoring to meet their monthly supply needs, pay employees, and pay bills. The bigger their business grows, the more workers they will have, and the more time they'll have to spend managing them instead of doing the actual work.

Original post blogged on b2evolution. Courtesy of IFG Network.

May CPI Declined 0.2 percent

2010-07-18T14:44:00.001-07:00

According to the U.S. Bureau of Labor Statistics in May of 2010 the Consumer Price Index (CPI) for all urban consumers declined 0.2 percent on a seasonally adjusted basis. The CPI is a measure that estimates the average price of consumer goods and services purchased by households. CPIs are based on prices of food, clothing, shelter, fuels, transportation fares, as well as doctors' and dentists' services, drugs, and other goods and services that people purchase. Prices are collected each month in 87 urban areas across the country from about 4,000 housing units and approximately 25,000 service establishments.

The index increased 2.0 percent over the last 12 months - before seasonal adjustment. For the second month in a row a decline in the energy index accounted for the seasonally adjusted decrease in the all items index. The index for energy decreased 2.9 percent in May and more than offset a slight increase in the index for all items less food and energy. The food index was unchanged. Although all the major energy indexes declined, the gasoline index accounted for most of the decrease.

The index for all items less food and energy increased 0.1 percent in May. This meant posting a monthly increase for only the second time this year. Increases in a number of indexes including shelter, used cars and trucks, tobacco, apparel, and medical care contributed to the May rise. Overall, the CPI has increased 0.9 percent over the last 12 months.

The economy is still suffering and many small to medium-sized businesses simply cannot keep up with the cost of doing business. Invoice Factoring during challenging times like these can help pay the bills. Most factoring companies will pay within 24 to 48 hours.

Courtesy of IFG Network.

Working capital is available for small businesses that know where to find it.

2010-07-18T09:42:00.000-07:00

The current economic crisis has severely impacted small businesses with no end in sight. Traditional bank loans have basically dried up leaving them with no place to turn. Many small businesses still think that the traditional bank loan is their only source of capital. They are wrong. Alternative financing providers are providing working capital to small businesses every day.

Invoice Financing (Factoring)

2010-07-17T23:10:00.001-07:00

Invoice financing (factoring) helps companies that:

1. Need funding but can't qualify for a bank loan due to personal credit
2. Have invoices as their main collateral
3. Are start-ups or have been in business for less than 3 years
4. Qualify for bank financing but need some of the flexibility of factoring