Monthly Archives: February 2016

Small Business Finance – Finding the Right Mix of Debt and Equity

With the ever rising cost of living, many people are finding themselves sliding deeper into debt as their finances take a turn for the worse. There are those who are in these situations due to no fault of their own while others have not been able to handle finances and find themselves looking at growing debt. Whatever the reason for your debt you will need to engage the services of a debt management consultant.

Finances are a personal issue which most people prefer not to talk about with others. However if your credit score is going down and your debts are on an upward trend you should consider engaging a professional who will help you reorganize things for the better. A debt management consultant is an expert who has the knowledge and resources to help you deal with money issues. Staying in denial about your financial situation will actually make things worse and make your journey to recovery more difficult and longer.

Most people do not want their financial woes to be known and like all other professional consultants your debt management consultant will not be discussing your issue with others without explicit permission from you. You should therefore provide complete and correct information that will help your consultant understand your case and design a recovery financial planning tips for you. Hiding information will work against you since the plan designed will not factor those bits of information that you have kept to yourself. There is no reason to be embarrassed about financial mistakes, many have made poor financial decisions before and those who decided to work towards recovery are much better for it.

Your debt management consultant will also be instrumental in connecting you to other professionals and resources that will assist you as you work on improving your financial situation. They will help you design a reasonable budget as well as talk to your creditors about renegotiated interest and payment breaks. They will also be able to direct you to institutions that can provide you with refinancing at a reasonable rate. The consultant will also provide you with support and advice as you work on your finances. Most people will be emotionally distraught due to poor finances and having an independent and impartial person walking with them through this tough time is a big plus. It gives you confidence and a determination when you have someone who believes in you.

Transaction Teams in Business Acquisition and Sales – Finance Company

The tightened credit market and slow economy that the United States has experienced over the last two to three years has caused a modification in the loan criteria for many traditional lenders resulting in a restriction of financing available to fund business acquisitions. Securing financing for the purchase of an established business is one of the most important components of the deal and for many buyers the process in locating the right funding option can be both daunting and challenging. Despite the national economic headlines, there remain a number of acquisition financing sources that are actively lending money for these deals. The size of the business, amount of financing required, business cash flow, quantity-quality-type of assets, business experience, and credit worthiness will all be issues that determine the type of funding as well as the particular financial companies that should be evaluated. SBA financing, with its 7a Loan Program, remains one of the most popular and frequently used vehicles for funding acquisitions. What most entrepreneurs are unaware of is the fact that every financial institution involved with SBA financing will have its own unique and distinct lending criteria. Keep in mind that the SBA is just the loan guarantor not the actual lender. Therefore it is critical for the buyer to speak to a number of financial institutions, or consult an experienced business broker, to determine which sources of capital are available and the most appropriate for the particular business acquisition.

As illustrated above, the finance company that is involved plays a crucial role given that the majority of main street business acquisitions involve 3rd party funding. As a result, a business owner interested in selling the company should recognize the importance of ‘pre-qualifying’ their business for financing. Involving the lender early in the process avoids delays in addition to determining the optimal framework for the transaction financing structure. “Owners seeking to sell who consult 3rd party lenders benefit from becoming well educated on the type of financing and terms that are available, the likely buyer down payment required for the loan and any seller financing commitments that might be required,” commented Steve Mariani, President of Diamond Financial Services. Companies for sale that are distinguished as ‘lender pre-qualified’ will receive a better response, increase its marketability, and often decrease the time required to close the transaction. Prospective business buyers should also pursue a buyer ‘prequalification’ early in the search process as immeasurable benefits can be obtained. Understanding in advance about the value (or price) of a company that they can qualify for will make the buyer a significantly more attractive prospect to both the business broker and the seller. Buyer ‘pre-qual’ letters, while generally available at no cost, often prove to be priceless in the perceived buyer qualification. In summary, both the business seller and the business buyer are strongly encouraged to consult financing companies early in the process so that they have a clear understanding of the types of financing that are available in addition to the terms and conditions for which it would be extended, based upon the specifics of the individual business and participants

Finances As It Relates to Depression

You thought the great depression of the 30s was over, didn’t you? And proceeded to live and spend as if there was no tomorrow and as though the coffers would never get depleted. While it is true that the governments and central banks of some countries were carefully monitoring economies, creating new economic policies to prevent similar crises; it still did not stop us from being hit. History does repeat itself, after all.

Now that a second depression is upon us; obviously, the measures taken were not enough. Or, perhaps it is more a question of working within the measures and limits that need to be placed upon us. In any case, we now find ourselves in a crisis situation and are scrambling around to recover from the depression. Our accounting, finance, and the very way of life has been hit and we have to deal with it. All paper investments are becoming lost causes, leaving only the commodities behind. The 1930s depression was largely caused by inflation, gold standard, liquidity etc., whereas today’s depression can be blamed on a decline in productivity, investment, mortgages, outsourcing and unemployment. Underlying all the different c causes is the one factor – – overvaluation. This overvaluation has been on paper assets and mortgages. This is leading to major changes in the way accounting is going to be regulated.

The million dollar question is whether we should depend on economic forecasting. As of now, we are lead to believe that unemployment will see a vast improvement in 2012. It is also believed that the property market will soon stabilize. It is possible the market will never see the kind of phenomenal growth it did in recent years, the housing boom has been a huge factor in this depression. Financial Accounting is critical to withstand this crisis. Rather than depend on forecasts and a blind hope that thing s will change for the better, a serious look at personal and public finances is in order. Recession can be simply a slowdown of economy that seems to be never ending. Cost cutting and saving in every sector may seem like the proverbial drop in the ocean; but, it is a start. Over and above this, managing income is the key. When your capital budget is off-balance; look for the answer in expert accounting and management. You will have to review the costs, assets, inventory, debts, cash flow and work out a structured reorganization of your capital.

In layman’s terms – restructuring involves:
• Get out of debt;
• Tighten your belt;
• Build emergency fund;
• Consult Finance professional

These basic steps ought to hold good for personal finances as well as public, such as financial institutions. It is very easy and most human to adopt an attitude of denial or being selective in what you see and believe. But, it could very well be the cause of your downfall too.

Recession is not selective; but, it does affect most those who are not prepared for that eventuality. In fact, you don’t need to have a recession to re-assess your finances. Even in good economic times, we find ourselves slapped with a sudden outflow of cash. Soon, we forget the shock of that and go back to spending all the spare money. If it is a matter of survival of the fittest, the fittest one would be always prepared; following the Boy Scout’s motto to the letter. The smart one would have a savings buffer that prevents you from seeking a loan each time.

A Financial Consultant would not only manage your current financial state; but, also plan strategically on your future ensuring you remain one of the survivors. Recession can be borne and you can get out of it with your security intact. You may have a leaner portfolio; but, it can be a healthier one.

Can a Mom ‘N Pop Shop Benefit From a Consultant?

When you think of a business hiring a consultant to devise a strategy for growth, you probably wouldn’t think of the automotive industry.

John Smith is small auto repair shop owner who has been serving the Hittsville community for 20 over years. He makes just enough to provide for his family’s basic needs. John explains, “One of the reasons I went into business for myself was to make more money and spend quality time with my family. But now I’m a business owner I make less money, and spend less time with my family. Something went wrong.”

No matter how hard John seemed to work, nothing seemed to get better. His business was practically bleeding. John’s colleagues, friends and family made suggestions to help increase the bottom line, but none of them had run a profitable business before. Embarrassed to say it, John used some of his family members suggestions to no avail. Last September John was solicited to attend a workshop from a auto repair consulting firm that claimed “Increase Profits with Better Time management!”

To good to be true, he thought. Despite his hesitation John attended the workshop. The consulting firm had over 16 years of expertise in the industry and over 50% of their clients saw an increase in profits.

Great, but what’s the cost? Over $12,000 for 6 months. With no savings and unable to get a loan anywhere John found it almost impossible to grow his business. That’s when John was introduced to Smart Funding Solutions™.

Smart Funding Solutions™ devised a special funding agreement through Consultant Financing. The consultant was paid the fee up front (so he could focus on getting the job done, instead of collecting bills), John was provided with working capital to shift his current business model to one more profitable, and the auto repair shop paid Smart Funding Solutions™ back in installments that worked with John’s increase in profits. Bottom line? John increased his profits by 20% and his consultant re-invested money to grow the consulting firm.

Everybody wins.

Smart Funding Solutions™ partners with management consultants offering full-service, customized financing to small businesses that traditional lenders find “too new” or “too risky.” Smart Funding Solutions™ takes pride in supporting these small businesses and consultant companies while helping stimulate the economy.