Financing Lessons We Must All Learn

Ensure that you can always go back to the well for more capital. This means keeping very good relationship with vendors and supplier (who could offer trade credit freeing up cash flow) and your lenders. This also includes staying current on all payments - no lender will fund a company or person who is behind on current obligations. Thus, if the need arises - you have reduced all costs to their bare minimum - you can always go back to these sources for more capital. Lastly, constantly be looking for new, alternative ways in which to finance your company - including factoring, leasing, cash advances, or private investors.

Even if your business is really taking off - meaning that sales are growing at a phenomenal rate, your company could still (and usually do) face cash shortages as your bills (current expenses and the huge expense related to the growth) may be outpacing your cash inflow (actual cash into the business, not receivables - the actual amount in you checkbook).

Note: while managing costs is paramount to a successful business - so is managing revenue - ensuring that your receivables are closely matched to your payables.

I quoted the above financing tips from Business Know How blog. Well, there's a lot more to learn. Check it out on this post -> Estimating Capital Needs for a New Start-Up!

New Business Financing Company That Could Help Us!

Who would have thought that their will be a new born baby in this economy? This baby I am referring to is the new business financing company -- Skada Capital LLC.

Skada Capital LLC (www.skadacapital.com) is a Maryland-based provider of financing solutions to healthcare, manufacturing and technology companies in the Mid-Atlantic region. With over 200 sources of capital in its network, Skada Capital tailors solutions for companies seeking cash flow financing or growth capital for expansion. Skada Capital specializes in commercial real estate financing, accounts receivables financing, credit card receivables financing, leasing, and other alternative sources of financing.

Yes, I know you are interested to learn more about this new business financing company. Check out more about this news here.

Meet Small Business Development Centers

Here's some good news in the field of small business financing. Dawn Rivers Baker pointed in her article about Small Business Development Centers which offers free training.

That sort of training is available for free through SBA entrepreneurial development programs like the Small Business Development Centers (SBDC).

The SBDC program is the grandfather of the SBA’s entrepreneurial development programs, established in 1980. It is an outstandingly successful program that typically returns a minimum of $2 to the federal treasury for ever $1 spent on it, and saves or creates countless small business jobs on an annual basis.

The SBDC network is affiliated with colleges and universities or with state economic development departments around the country. There are SBDC state affiliates associated with such august institutions as Howard University in Washington, D.C. and the University of Pennsylvania’s prestigious Wharton School of Business in Philadelphia.

You can check out this small business financing news here.

Obama's plan of backing up small business lending

Jane Saseen wrote an article in Business Week about Obama's plan of backing up small business lending.

In a move that took even some of his allies by surprise with the timing, President Barack Obama on Mar. 16 unveiled a package of measures aimed at boosting lending to small business by freeing up the frozen markets for credit that serve the nation's entrepreneurs.

With Treasury Secretary Timothy Geithner by his side, Obama told roughly 200 small businesses representatives gathered in the East Room of the White House that he would commit $15 billion from the Troubled Asset Relief Program (TARP) so that the government can purchase loans backed by the Small Business Administration from the banks that have originated them. The moves come on top of earlier Administration efforts to ease the strains on small business lending. As part of the stimulus package, the government agreed to increase the guarantee it provides to banks on SBA-backed loans from the current 75% to 90%, as well as temporarily reducing some fees linked to Small Business Adminstration loans.

Now the question is: Can Obama successfully do this? Well, I really hope he can. Read more about this news here: Can Obama Jolt Small Business Lending?

Yes. Why not lower the taxes?

I found a commentary post written by Andreea Bourgeois. And I agree with what Andreea is trying to point out.

There is never a bad time to decrease taxes, but now is the best time. CFIB survey data indicates that businesses reinvest tax savings into their business to increase productivity - either by acquiring new equipment or by paying down debt, which in turn reduces interest fees and frees up money for the business. Potential tax savings would be directly reinvested in employees in the form of increased wages, raising staffing levels or providing additional training.

Business owners do not demand miracles. They expect the finance minister to keep his promise of making New Brunswick more competitive and a better place to live and work. The majority of entrepreneurs do not want handouts, grants or subsidies from government.

Small business owners want a real helping hand: lower taxes so they can put that extra dollar to work in their firm.

Isn't she absolutely right? Read her entire commentary post -- Small business owners want tax cuts - now, and share your insights under the comments section.

Another Billion Dollar Credit Crunch Buster

The good news does not stop from my yesterday's post because today there's a -- A $200 Billion Credit-Crunch Buster?-- news. Check out a few insights below.

The federal government on Mar. 3 provided some long-awaited answers on how it plans to unlock consumer and small business credit markets, which have been frozen more solid than an icy tundra.

The $200 billion joint Federal Reserve Board and U.S. Treasury program, known as the Term Asset-Backed Securities Loan Facility, or TALF, is intended to get money flowing for small employers, student-loan providers, credit-card issuers, and auto lenders.

Isn't it good news? Check out more of this business financing news from Business Week -- A $200 Billion Credit-Crunch Buster?

Good News in Small Business Financing

We already knew that we are in a recession but it doesn't mean we have to dwell on the bad things happening these days. Today, it's time to spread some good news for small businesses out there! I found this from Business Week and it's worth to be shared.

Some welcome news for small businesses struggling in the credit crunch: A new government program to help small businesses get loans appears to be on the way.

In a closed door meeting last night with House Democrats, President Obama and Treasury Secretary Timothy Geithner announced that they will unveil a new program next week “that will provide financing, liquidity and guarantees to open up small-business lending,” according to a WSJ article today. This program will be in addition to the recently unveiled Term Asset-Backed Securities Loan Facility (“TALF”) program and bolstered Small Business Administration funding and guarantee limits in the stimulus package.

Read more about this news here --New Small-Business Lending Program Coming Soon!

Four Borrow Sources

Where the Money Is? According from the article at US News written by Asheesh Advani -- Raising money in a recession is beyond difficult, but getting started now is a great idea and she pointed out four possible sources that we can find for business financing.

1. Borrow from yourself
2. Borrow from family and friends
3. Borrow from people who are patient
4. Borrow online

Asheesh also have a parting message to her article -- I"'ll join the chorus of experts who say starting a business during a recession is a good idea, as long as you recognize it'll take extra effort to raise money in the months ahead." Read more about the details of this article here -- US News Financing Sources

Business financing these days is really not easy or have it been really easy?

Small businesses are experiencing a considerable drop in access to finance, research conducted by the Forum of Private Business (FPB) suggests.

Since November the FPB has regularly asked 150 small businesses, among its 22,000 members, how they are faring. This month a third said they have found it much harder to get finance in recent weeks and dissatisfaction with banks has also significantly increased.

The figures were passed to Panorama for Monday's programme on small businesses. In the programme, Credit Where It's Due, business guru and Dragons Den star Theo Paphitis looked at how small businesses were faring during the recession.

The above is quoted from BBC News. Well, is there something new to this? Business financing these days is really not easy or have it been really easy?

Stimulus bills aim to revive SBA lending

According to MSNBC, the economic stimulus package working its way through Congress most likely will include steps to revive the Small Business Administration’s lending programs.

Many SBA lenders have dropped out of the program or severely cut back on lending. They cite two major problems with SBA loans: a frozen secondary market for the loans, which makes it harder for lenders to make new loans; and high fees and other costs that make SBA lending less profitable, especially since interest rates on these loans are capped.

Both the House and the Senate attempt to address these problems in their stimulus bills, but their solutions differ. The House bill would authorize the agency to make loans directly to small businesses, if SBA lenders pass on the deals. It also would increase the government guarantee on 7(a) loans to 95 percent, reducing the risk of making these loans.

The Senate bill focuses on temporary waivers of loan fees, in hopes of making the loans more attractive to borrowers and more profitable for lenders. It also would increase the maximum size of 7(a) loans from $2 million to $3 million in order to meet the needs of more small businesses.

Is it really possible? Will this really help? What do you think?

Adult Film Industry Bailout?

Bailout is no longer a new issue to us, isn't it? Well, as I am looking for valuable information to post in this small business financing blog of mine, I again landed to a bailout topic. What is surprising is that I won't be giving my reaction to the actual article I found over at USNews but I am intrigued with one of the comments stating:

Missed something?

I don't know which one of us missed something, but have you really not yet blogged on the Larry Flynt proposal for a porn-err, I mean adult film industry bailout?

I mean I know you've already had a chance to chat it up with Mark Cuban, but Larry Flynt would just be icing on the cake.

As for the rest, the only things we should be bailing out are boats.

OMG! Is that for real?

Evaluate credit worthiness prior to applying for a business loan

Evaluate credit worthiness prior to applying for a business loan.

Small business owners must avoid depleting their current liquidity or cash position. They must immediately deal with negative financial issues including poor or inaccurate credit reports, and resolve all business and personal tax issues. A negative credit report and/or credit score can be a “deal buster”. Back taxes, liens, garnishments, multiple bounced checks all show increased risk for a lender. Borrowers should deal with recent bankruptcies by providing an explanation of why it occurred.

The above is quoted from EastSide Business Journal, where Jennifer Kilgus shared practical steps that will help us secure capital for our business. The above quoted is one of her tips that I deemed important for those small business owners opting for a small business loan.

There's $8B Available in ’09 For Small Businesses

According to Mark Mueller, one of Orange County Business Journal Staff, SBA still funds real estate, fixed asset acquisitions and stated that there's $8B Available in ’09 For Small Businesses. This is good news, right?

“Even with the credit markets in as much flux as they are, borrowers can obtain these government-backed loans for up to $10 million,” Smith said.

There should be plenty of SBA money still available for local deals in 2009. According to Smith, next year’s SBA budget includes $8 billion for SBA 504 financing nationwide. The loan program is funded by the monthly sales of long-term bonds.

Whether all that money is doled out by banks remains to be seen. Loans in the 504 program are down 36% from a year ago, according to data from the Federal Reserve. The other big SBA loan type—the 7(a) program—has seen lending drop even more, by 55% year over year.

Check out more of this news after the jump. Read more.

Loss of Consumer Credit?

Will the Loss of Consumer Credit Serve as the Next Economic Aftershock to Further Fuel the Financial Crisis?

U.S. consumers are already losing their jobs at an accelerating rate.

The same thing is now set to happen to their credit lines.

But with so many Americans already losing their main source of income – their jobs – at an ever-spiraling rate, will an economy that derives two-thirds of its power from consumer spending end up mired in its worst funk in decades because those same consumers are now losing their charge accounts?

The above was the mind boggling issues that our world financing really face these days. What's your stand to this issue? You might as well wanted to learn more about this write up. You can check this out on MoneyMorning!

Quick News: SBA holding loan sessions for lenders

A series of round-table discussions for lenders on federal and state programs to help small business will be sponsored by the U.S. Small Business Administration's Philadelphia District Office.

The free sessions will be held over the next few weeks in East Norriton, Exton and Philadelphia, in collaboration with the U.S. Treasury Department's Office of Thrift Supervision, the Federal Reserve Bank, and the state of Pennsylvania.

The sessions will be:

Tuesday, Dec. 9, 1-3 p.m., Associated Builders and Contractors Offices, 430 W. Germantown Pike in East Norriton;

Friday, Dec. 12, 10 a.m.-noon, Seedco, 737 Constitution Dr. in Exton.

Tuesday, Dec. 16, 10 a.m.-noon, at the SBA's Philadelphia District Office, 900 Market St., fifth floor.

Registration is requested but not required. To register for one of the sessions, contact Donald Jefferson, SBA business development specialist, at 215-580-2726 or donald.jefferson@sba.gov.

Well, Small Business Administration really did play a very important role in heloing business owners succeed in their business ventures especially small business financing concerns. This is really helpful so you who can be there on the said venues, please do attend. Tell me the feedback please! Thanks!

New York City Small Business Loans Drop

New York City's small businesses saw a sharp drop this year in the number of loans guaranteed by the government.

Reps. Anthony Weiner of Queens and Nydia Velazquez of Brooklyn released data showing a nearly 40 percent drop of loans guaranteed by the Small Business Administration in the budget year that ended in September.

The total value of such loans -- made by private companies but guaranteed by the government -- dropped 18 percent compared to the previous year.

The hardest hit borough was Queens, where businesses borrowed 45 percent less. Staten Island fared best with a 4 percent increase.

Weiner and Velazquez said the government effort to ease the credit crunch should do more to focus on small companies.

The above is a quick news update from Business Week. I'm afraid how much percentage would it be by the 1st quater next year. Will it be going on the worse direction?

China announces $586B stimulus plan

Wow -- 586 U.S. Dollars stimulus plan?

China unveiled a $586 billion stimulus package Sunday in its biggest move to inoculate the world's fourth-largest economy against the global financial crisis.

The Cabinet approved a plan to invest the money in infrastructure and social welfare by the end of 2010, a statement on the government's Web site said.

Some of the money will come from the private sector. The statement did not say how much of the spending is on new projects and how much is for ventures already in the pipeline that will be speeded up.

China's export-driven economy is starting to feel the pinch of weakening U.S. and European economies, and the government has already cut key interest rates three times in less than two months in a bid to spur economic expansion.

Yes. You read it right guys! 586 Billion Dollars to save China from the global financial crisis. They are that rich! I hope this business financing plan will work. Read more about this news over CNN.Com.

Complexity of Pay Per Click Programs For Our Business

We all know that marketing our business which of course, includes advertising will help us with our small business profitability.

However, they are precautions that are worth noting because we might have not realized that the advertising that is supposed to help us with our business is exactly what will put our business down. That's the case if, we missed to spend our efforts and business financing in advertising carelessly.

Just say for example, the complexity of Pay-Per-Click programs has become.

Pay per click advertising used to be a lot easier to do. But in the past 24 months it seems to have gotten more competitive and complex. Some small business owners are discouraged about it.

There’s a new PPC Strategy Flowchart just out that walks you through the considerably more complex process of running pay-per-click ad campaigns today. Created by Giovanna Wall at the PPC Blog, it illustrates the kind of strategy, testing and tweaking that you have to bring your advertising campaigns.

But whether we like it or not, PPC programs are still effective when comes to advertising our business but I believe we have to educate ourselves about it so that we won't be putting our investment into waste.

Finance hell freezes over!

According to business spectator Nick Samios, Finance hell freezes over. What does he mean by that? Below I quoted his write up from BusinessSpectator.com.

“The economic crisis we face is the worst since the Great Depression. Businesses large and small are finding it impossible to get loans, which means they can't buy new equipment, or hire new workers, or even make payroll for the workers they have”.

If this quote sounds like hyperbole, that's because it is. It is lifted directly from Barack Obama’s speech in Tampa, Florida a day or so ago. This fact that makes the quote no less chilling.

Whooah! Chilling, isn't it? Well, read more about this small business finance news.

Community Development Institutions Offer Small-Firm Funding

Fund raising is everyone's business. In fact, this is one of the most difficult part in building up your business. Well, here's a good news I found from The Washington Post and they are giving us this opportunity to raise funds.

Community Development Institutions Offer Small-Firm Funding

While discussions about the nation's economic growth are often focused on big business, small businesses keep the nation diversified, act as an innovation engine and employ just over half of the private sector workforce.

From 1993 to 2003, firms with fewer than 20 employees accounted for almost 80 percent of net new jobs in the United States.

One source of financing for many small firms comes from Community Development Financial Institutions, or CDFIs, which exist to help boost low-wealth or distressed communities. At the end of 2006, CDFIs had given $105 million to firms with five or fewer employees with a maximum loan investment of $35,000. They gave nearly $4.2 billion in 2006 to firms with more than five employees in loan amounts greater than $35,000. The average CDFI loan size for micro firms was about $11,000 and for small businesses it was $93,000.

Read more about this news written by Sharon McLoone at The Washington Post.