FastUpFront

A business partnership is not a marriage – it won’t last forever (and lets face it 50% of marriages end in divorce). Basically you and your partner had a great idea, put a business together, got it off the ground and made it a success. But like any small business success varies. Maybe during the development your credit got hurt, the business may be on the right track now – but only after incurring a substantial debt in its development which leaves you with very little room to borrow any more from the bank. Ok, that’s small business. But now you and your partner have decided that it is best to part ways. Only catch is – no one is willing to just walk away and although the business has value, it has debt as well. Raising funds to buy out your partner through your personal credit is impossible, and taking on investor is the last thing you want to do.

No problem. Fund your business acquisition and buy your partner out with a business cash advance.  The advantages are clear:

• Flexible repayment.
• Bad credit is not an issue.
• Funds can be secured quickly.
• Your business’s debt is not a barrier.
• No investor will have control over your business.

A business cash advance is the perfect solution for a partial business owner to gain full control and acquire complete ownership of his business.

owner financing

I read an article in the Indy Star today which examines the effect of the subprime mortgage collapse on small businesses seeking financing.  The writer looks at the two other options readily available to small businesses – leasing and invoice factoring (similar to business cash advance.)

She pinpoints in her article the increasing demand for invoice factoring services and leasing.  This is the same cause for the increased demand for credit card fiancing/factoring  services, like those offered by us.  This is how she sums it up:

“With the subprime mortgage collapse, many large lenders have been tightening their credit standards, with a resulting shrinkage of available credit for riskier projects and small businesses.”

For the complete article.

I found a great review about invoice factoring and invoice discounting by Henry Byers – It has a history (since the Romans), definition, list of industries which use factoring, etc.  Remember, credit card factoring / financing has all the benefits of invoice factoring, with less risks.

I particularly like how Byers boils down what invoice factoring is, he compares invoice factoring to a cash advance.  Credit card factoring, on the other hand, IS a cash advance.  It has all the benefits of invoice factoring, with less of the risk.  Here is what Byers’ wrote:

Invoice factoring is not a loan; rather, it’s an outright sale of an asset. Another way of looking at it is as a cash advance: you give up a certain portion of the money you expect to receive in the future in exchange for ready cash today.

Anyone who would be interested in invoice factoring should also check out credit card factoring – I am confident credit card factoring will win out every time.

Byers recommends looking into factoring if you are “…heavily vested in human services and need to be able to meet payroll” or if you are any of the following:

• A young company with creditworthy customers, but not sufficient credit history for your own business to be considered creditworthy by banks
• A company with the necessity of taking advantage of new, time-limited sales and profit opportunities, but inadequate cash flow currently to do so
• Companies with income, credit, or tax problems
• Companies that have filed for bankruptcy, but that stand to turn a profit
• Companies that are growing too rapidly for ready capital to keep up with business needs
• Companies poised to grow very soon but do not want to incur debt
• Companies that are growing rapidly, but do not have good enough credit to take out bank loans.
• Start-up companies with no capital base currently
• Companies with seasonal sales patterns or uneven sales patterns

In any event Byers’ invoice factoring article  has some general info.

Not everyone realizes that “Business Cash Advance” is simply another type of factoring – one based on credit cards.  The benefits of credit card factoring over invoice factoring abound.  The top five benefits are:

• no hidden fees
• no pestering your customers
• no dependence on a single client – you are not factoring an individual invoice, just future credit card sales
• less hassle – simple process, no in depth accounting
• less risk – no collateral.

If your company accepts credit cards, and you are looking for a fast, simple, low-risk it is likely that small business cash advance is the right financing solution for you

Now the article I’m refering to is actually RE invoice factoring.  I recommend credit card factoring due to lack of fees, less hassle, etc…  I wrote a short post comparing Invoice Factoring vs Credit Card Factoring

My favorite bit:

Factoring is a long established and mainstream financing option for businesses. Invoice factoring is the time honored and increasingly utilized financial tool that speeds client cash flow and helps avoid the problems that slow-paying customers can create for fast-growing companies.

In an earlier post, I linked to an article that had a bit of the history of factoring (dating back to the Romans) – I think that because it is considered “alternative financing” that some people don’t realize just how mainstream factoring actually is these days.

As always, I recommend contacting us for more detailed information.

business_financing_options

In my daily google, I ran across the first paragraph of an article, with an offer to buy the rest.  I was amused, because we offer articles like this for free!  The first few sentences (incl. the title) told me what I already know – we are in the right business here at FastUpFront.  We offer a great service to our clients, helping them to finance their growth in an easy, low-risk way: business cash advance.

How to cash in on accounts receivable
TERRENCE BELFORD

Special to The Globe and Mail

Financing growth can be a tricky proposition for cash-challenged small companies. Increasingly, however, the clever ones are adopting a technique long accepted in Europe and the United States, says Ron Fish, chief operating officer of the receivables management group at PricewaterhouseCoopers.

The easiest type of reveivables financing is credit card factoring.  It can often be fully automated.  Even the qualifaction requirements are simple: you only have to have been accepting credit cards for four months.

Your choice, buy the article or just call one of our financing specialists, we’d be happy to answer any of your questions (1-888-UpTo-250K ).

Over Stressed?  Over Worked?  NO VACATIONS???
Time is valuable.  Time isn’t just money, it is your life

When you are working 70-80 hours per week and don’t take a vacation, then you aren’t running your business… your business is running you. Being overworked make you less effective in the long run.

A new business will inevitably require a lot of your work, and you are vital as the owner.  However, there should reach a point – sooner rather than later – that you should be able to step back a bit and have some time to yourself (and your family.)
Here are some tips for any small business owner (restaurant, salon, mechanic, grocer, fashion – you name it) on how to have a life AND a business:

**  Keep specific hours:  If you need to, you can give yourself one exception per week.  Be realistic when setting your hours, so that you CAN actually keep to them.  In addition to making sure you aren’t TOO overworked, adhering to set working hours makes it easier for the other people in your life to make their schedules, too.

**  Be inaccessable to people other than your clients/customers and your employees. Vendors and Sales people should not get your time, request all offers in writing so you can skim them over in your free time (bathroom reading, anyone?)

**  Keep all meetings/interviews to a set time, and never go over.  If it looks like it’s going over, schedule a follow-up meeting.  Don’t let your schedule get out of sync.  This will help motivate you (and the other party) to stay on topic.  In my experience, meetings that last over an hour rarely stay on topic.

**  Don’t Hoard Paperwork.  Set aside time daily to review paperwork.  For each piece of mail, decide: act/file/trash.

**  Delegate.  Most small business owners are scared of delegating – conquer the fear!  A quick way to shave off of your working hours is to hire an assistant for adminstrative work (if you haven’t already).  Depending on the amount of paperwork/record keeping in your business, you might just need someone to put in a few hours a week. If you think about it, you will realize, that a lot of the work is repetative and could even be done by a talented High School student looking for some extra cash.

Call this a pet issue of mine, if you will.  Most articles offering advice for small businesses will suggest hiring college students for administrative tasks.  Now, don’t get me wrong, college students are generally smart, responsible and inexpensive.  However, in my experience High School students can be all of the above. 

 High Schoolers who work are generally extremely motivated – they need the money to keep up with the trends – they need the experience for their resumes and even for their college applications.  The average HS student is more than competent to do filing, record keeping, etc that would otherwise be keeping you up late into the wee hours.  Most of this is work that they could do after school or in the evenings.

Not all HS students are suited to waiting tables or delivering pizza, and not all are suited to bookkeeping or keeping excel files.  Obviously, you need to check them out – ask for a transcript and see what level they are in their studies.  However, I highly recommend checking out this untapped market for admin help.

Yesterday I read an article online about how great invoice factoring can be. The article warns business owners to confirm all the cost details associated with the factoring advance. It suggests verifying the following potential fees:

• Application fee
• Due diligence fees
• Credit reporting fees
• Background or lien search fees
• Factoring company lock box fees
• Minimum monthly volume fees
• Charges to add a new receivables factoring client
• Early termination fees from receivables factoring contract
• Upfront advance fee and then an interest fee
• Fee for same day advances
• Monitoring fees
• Automated clearing house (ACH) fees
• Wiring fees

One of the biggest advantages to a business cash advance, compared with invoice factoring is the fact that there are no hidden or associated fees like the fees typically associated with invoice factoring. A business cash advance is a type of factoring (credit card factoring) but does not require the in depth accounting to determine advance amounts and is far more simple to fund – with automated repayment based credit card sales.

If your business accepts credit cards, a business cash advance (or credit card factoring advance) may be preferred for its simplicity and lack of associated fees.

Government grants for small businesses are frequently brought as a solution for entrepreneurs looking for funding.  It is often perceived to be an easy, low-risk way to get “free money.”  Although I already knew the basics about small business grants, I decided to research this option and compare it to the sort of  small business cash advance option offered by us.

Government grants are not offered by the Federal Government, rather by State agencies.  Federal assistance for small businesses is offered through attractive (but hard to get) loans for small businesses through the SBA.

Grants have very specific eligibility criteria, and are often limited to businesses in the fields of medicine or education.  Eligibility can be based on a combination of factors including location, years in business, gender, race, sales revenue to date, and purpose of funding.  The time needed to spend just to find appropriate grants and review their eligibility requirements can be prohibitive, even for those involved in more common grant fields.

Before deciding to invest the time and effort in getting a government grant, I suggest looking over the following checklist:

· You have enough time and/or the resources to perform a search for a small business grant program that you qualify for and to apply for the grant.

· You can learn the process for grant application by yourself, or you are able and willing to hire a grant consultant.

· You can wait up to a year to receive the money you need.

· Your business will not be unduly damaged by the time you spend during the grant process.   This is time that could otherwise be spent selling and/or marketing your product /services.

· You can take the risk that after all the time you invest in the grant application process, your application could still be denied.

When I reviewed the process for grants, I immediately was reminded that there is no such thing as free money!  With that in mind, the business cash advance program becomes very attractive:

· The only eligibility requirement is that your business has been accepting credit card payments for at least four months. 

· The longest our clients wait to get cash is a week. 

· No one ever has to hire a consultant to assist in getting a business cash advance.

For more information on Government Grants for Small Business by state, check out this list of State grant agencies.

Or, you could follow this link for more information on Small Business Cash Advance.