Small Businesses Have a Harder Time Acquiring Financing - How can you improve your chances?

It’s not surprising to read that smaller businesses have a harder time acquiring financing than larger companies in the recent Pepperdine Private Capital Index Report for 4th Quarter 2017.  Of the businesses that participated in the study those with revenues from $5-$100 million had a success rate of 70% in acquiring an Asset Based Loan, compared to only 27.4% for businesses with revenues under $5 million. There are several factors that contribute to this staggering difference, let’s explore the factors small business owners can control.

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Getting Control of Your Cash Flow

We hear from many small to mid-sized businesses that are struggling with getting control of their cash flow. Ensuring that your business has money in the bank to cover essential expenses such as payroll, accounts payable, utilities, rent/mortgage and other obligations is vital to your success.

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5 Tips for Finding the Right Financing Partner

Your business needs financing, now where do you turn? With numerous options for types of financing and types of companies offering them how do you know which will be the right one for you and your business? We have taken our many years of experience helping small to medium-sized businesses get the right financing for their business and put together five tips to help you find the right financing partner.

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Leveraging Your Accounts Receivable

Every month your business sends out invoices and then just has to wait and wait and wait for them to be paid.  You sometimes get the feeling like they are just sitting there collecting dust even though you have expenses you need to cover such as payroll, rent/mortgage, and your electric bill. An unpaid invoice is just an unpaid invoice, right? Wrong, there are ways you can leverage your accounts receivable to put them to work for your business, so they don’t just collect dust.

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Helping Small Businesses Grow Is What We Do

Every day at Federal National Commercial Credit we help small businesses grow. I recently had the good fortune of seeing this first hand when I attended a ceremony during which our client, who is the owner of a government contracting firm, was named the U.S. Small Business Association’s Small Business Person of the Year.

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How is Asset Based Financing Different from a Bank Line of Credit?

There comes a time for every business when they need additional working capital. Where do businesses go when they are in need of financing?  Typically, the go the bank.  A common way to get access to funds is through a traditional bank line of credit. However, there are additional options available when a bank line is either not accessible or does not adequately meet your needs. If you have been searching for an alternative, you may have heard the term “Asset Based Lending,” “ABL,” or “Asset Based Financing” and may be wondering what it is, how it can help you and how does it compare to a bank line? The differences can be quite significant, so let’s take a look at what they are.

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Advantages and Disadvantages of Factoring

Cash flow is central to the success of every business. As a business grows and needs to speed up cash flow, small businesses typically first turn to banks for financing. However, with tough credit standards banks cannot always fully accommodate a company’s financing needs. Alternative financing options, such as accounts receivable factoring, may provide the working capital the business needs.

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The Financial Personal Guaranty – What It Is and What It’s Not

Most small business lenders, whether they are banks, asset based lenders, or invoice factors, require some form of personal guaranty from the owners and/or executives of the borrowing company.  I find it is one of the most common new borrower objections.  But it is surprising how many borrowers misunderstand the way guaranties work and why so many lenders require them.  Here are some of the important common misunderstandings and some thoughts about them:

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What are UCCs and Do You Have Them?

I am having a bit of fun with the title to this article making UCCs sound like some kind of social disease. Many people regard UCC filings as little better. But UCC filings and the Uniform Commercial Code (“UCC”) that supports them are at the very heart of most financing in our economy and, without them, we would be an economic back-water. Lenders would not be nearly as plentiful, willing and aggressive.

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How to Shop for a Factoring Company

You may have exhausted your options at the banks in town and you could start to lose valuable business if you don't get some financing soon. Maybe you have received bank financing but because you've had a tough year the bank says you no longer fit their lending guidelines. Or maybe you have a good relationship with the bank and you are looking at some strong growth, but the bank has given you all they can. Before you get to this point, it is appropriate to shop for non-bank financing alternatives, such as selecting a factoring company or an asset based lender. Alternative finance is an unregulated industry. Prices, service quality, and reliability vary widely. Pricing may vary from 10 to 40 percentage points above the Prime Rate (nominally, the rate banks offer their most creditworthy customers) so the savings to be gained from smart, old-fashioned comparison shopping can be considerable.

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Invoice Factoring or Asset Based Lending - Which is Better?

There are some important differences between Asset Based Lending and Invoice Factoring, often referred to simply as “Factoring”. For many borrowers, however, the differences may not be relevant and conventional wisdom about their differences can be misleading. This post summarizes key similarities and differences to help borrowers find the best financing solution for their business and to help trusted advisors guide their clients.

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5 Ways of Financing Your Growth

Let's talk about five ways of financing your growth along with opportunities and challenges for government contractors when winning a new contract award. The good news is there are effective strategies and techniques for financing new and/or rapidly growing businesses. Each with it's own merits and appropriate role, common features, and prevailing pricing. When you examine these factors you can efficiently evaluate your government contract funding needs, identify worthy providers, win sizeable line commitments, and command the best rates.

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Thinking Differently About Alternative Financing Options

It is time to think differently about alternative financing options! I would like to highlight banking criteria for loans, show you why many small business loans are declined and offer insights into the opportunities and risks inherent in alternative financing solutions.  

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The Hardest Part of Great Service

Competition is more fierce and more global than ever before. Whether we are talking about working capital for growing companies, medical services for women, or guiding river rafting trips. 

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How Accounts Receivable Factoring Works

Federal National's accounts receivable factoring lines function as revolving facilities. They are easier to use and more flexible than many bank lines of credit. 

Case Study: XYZ Company, a service provider to large corporations and government entities

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Relieving Stress with Cash Flow Planning

Cash flow planning and other financial reporting tasks are often the last things that entrepreneurs and small business owners want to tackle. They can be time-consuming and are usually not why you started your business. However, these reports are a vital tool when it comes to the financial health and success of your business. When they are done regularly and correctly, they can also help you understand what you make, what you owe and what financing you may need - hopefully relieving some of the stress of running a small or medium-sized business. 

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