General Business and Finance Blog

Raising business finance isn’t always easy, and especially so when you’ve not got enough assets to secure against your ambitious plans. In some cases, you’re going to have to part with equity. Venture capital funding can help you grow your business, and plays a vital role in fuelling growth and innovation in the world economy.
Venture capital has helped to fuel the growth of some of the world’s biggest public companies at one stage in their life-cycle. Venture capitalists are willing to run the risk of making poor returns, or losing all of their money, for a chance to hit a home run. That’s why their capital tends to follow big ideas, and is hard to get when you’re looking to do something that isn’t too innovative with huge growth potential.The Dynamics of Venture Capital Funds
When entrepreneurs are looking to raise money from venture capitalists, they often have a poor understanding of how the market works. Venture capital firms do not raise their funds from shareholders; they usually raise their funds from private institutions. They will then charge a management fee, and take a percentage of equity for themselves. They also have a tendency to work together – often they will have other firms invest in a deal along with them. This can be to limit their exposure, and bring in expertise. Some VC firms will take an active role in managing their investments, while others prefer to watch carefully on the sidelines.Don’t Be Too Scared Of Equity Dilution
Many a business has failed because the management have been too afraid of diluting equity. While it’s important to ensure you treat your equity with the respect it deserves, you shouldn’t be afraid to let go of some if it’s going to mean you own a smaller share of a bigger business. Using venture capital you can explore a high risk, high reward, rapid growth strategy. In many cases VC firms will be happy to fund your business to run at a loss initially, because they can see the bigger picture. This is a luxury that you will not be able to take advantage of when you have bank managers looking at your ever dwindling balance sheet.
Raising equity also gives you an opportunity to profit from your businesses success, or idea, before you manage to take dividends or experience a liquidity event. Although it will probably only be offered in later rounds, a VC firm might be prepared to buy equity from you directly as well as buying it from the company.Choosing The Right Venture Capital Firm For You
Working with a company that’s worked in your space before can be of tremendous benefit. They will have domain knowledge to share, and will often have the right contacts in their phone book for closing partnerships and recruiting expertise. The relationship that you have with your VC could make or break your success, so make sure you pick the right one and the best fit for your business.

For most small business owners, the idea of firing their banker has probably never occurred to them. Most of us would like to view our banker as one of the family. In the world of SBA loans and working capital financing, the average business owner is happy to have one less decision to make, so thoughts of “when to fire your banker” rarely become a high priority.

Banks are just not what they used to be (as most of us have by now realized). In a manner similar to many automobile manufacturers that are now a tarnished and shriveled version of what they once were, it seems like almost overnight most banks have lost our confidence. In this shifting reality, business owners are now forced to adapt quickly to a changing environment for small business loans. Candidly speaking, even if their commercial banker is their best friend, small business owners are increasingly realizing that they must look out for their own best interests because it is unlikely that their business banker is up to the task anymore.

While this assessment might seem cold and harsh, it is nevertheless a candid and practical evaluation of current circumstances. Unwinding a long-term relationship with a particular bank or banker is likely to produce some of the same trauma that occurs when any positive relationship suddenly goes sour. In such circumstances, we should try to move forward after doing the best that we can. As in any change-related decision, the decision-maker (in this case, the business owner agonizing over the firing of their banker) should openly evaluate the probable consequences of not changing at all. If they are being truthful to themselves, most business owners will conclude that they should seek a new banker if keeping the old banker is holding the business back, either by bad advice or inadequate small business loans.

This discussion is in no way meant to suggest that all banks are now bad or that all bankers are now bad. In today’s complex economy, there are still good banks as well as bad banks. Of course there are similarly both bad bankers and good bankers. When their current banking relationship involves a bad banker working for a bad bank, this is probably the worst-case scenario to confront for most commercial borrowers.

We will leave the discussion of good banks and bad banks to another report. The remarks below are intended to highlight a few characteristics which business owners should take under consideration when determining if it might be time to find a new banker.

Overall we would conclude that if the current situation involves a bad bank and a not so bad banker, the most prudent outcome for a business owner is likely to be firing both the bank and the banker. Simply by working for a bad bank, a good banker can often be transformed into a bad banker. Many banks have suddenly stopped making normal business loans and working capital loans, often without even explaining why. This can force an otherwise good banker to rationalize the actions of the bank in a way meant to keep the business owner as a customer while at the same time asking them to accept sub-par business financing. Just say no.

One of the most predictive signs of a bad banker is an increasing frequency of situations in which they are unable to achieve the results which were promised or suggested. This could include lowering a business line of credit after suggesting that it would either be increased or held at the same level. Another common illustration is based on circumstances in which the banker reports that they recommended a commercial loan for approval but the bank loan committee turned it down. Business owners should not be reluctant to hold their banker accountable for producing inadequate results, since results are what count for any business. For prudent commercial borrowers, firing your banker and your bank has become both a more acceptable and necessary solution when your business is not able to obtain sufficient business finance and working capital help.

Traditional working capital financing is currently available from a shrinking group of commercial lenders. Small business owners should determine which commercial banks are still actually providing this specialized commercial finance funding. As described in The Working Capital Journal, the most active business lenders are generally not among the small number of larger banks which have received bailout financing from the federal government.
In most cases the active commercial lenders for this specialized form of commercial funding are limiting working capital loans to businesses which are current in their debt payments and are showing a net profit (based on recent financial statements). New commercial loans can often be finalized to refinance lines of credit and term loans which have been cancelled or recalled by many lenders if these two requirements are met. There are alternative funding possibilities such as business cash advance programs for businesses not qualified for commercial financing using these two standards.
Many small business owners also rely on personal lines of credit to finance some of their business operations. There have been many reports of widespread cancellations and reductions of these lending programs as well, especially those involving lenders which have received a multi-billion dollar cash infusion from U.S. taxpayer money that was intended to facilitate the lending of money to businesses and consumers.
Personal and business lines of credit have been eliminated in many cases by lenders due to a reduced ability to pay by borrowers and deteriorating business conditions. However, as described in The Working Capital Journal, many borrowers had an excellent payment history for a high percentage of recent credit line cancellations or reductions.
In spite of the challenging lending climate, there are banks which have been very effective in making working capital loans. The best examples are banks which have not received federal bailout assistance. These business lenders have continued to provide working capital financing, both refinancing lines of credit and term loans which have been recalled or cancelled by other lenders as well as new business financing.
Because it basically indicates that bailout funds have been given (so far) to lenders who primarily have a history of making bad loans (virtually all lenders receiving bailout funds to date), the lending activities described above are a serious concern to many observers. At this point, little attention has been given to lenders with a healthy balance sheet in federal attempts to get more funds into the hands of consumers and businesses.
Based on recent commercial lending activity, there are several notable conclusions. (1) Businesses need to increasingly prepare for life without relying on a traditional bank line of credit and instead consider other viable sources of commercial financing such as business cash advances (which provide working capital based upon future credit card processing activity). (2) The recent unwillingness by most lenders receiving bailout funds to report in any meaningful way how and where these funds have been used would certainly seem to be a loud and clear signal that these particular lenders are probably in worse shape than they are reporting to anyone. (3) Commercial lenders that have a history of making good loans rather than bad loans should be the focus of further government funding programs. (4) When business owners encounter difficulties obtaining commercial loans and working capital loans from normally dependable lenders, commercial borrowers should seek out commercial finance funding sources beyond their previous banking relationships.

Credit card processing is often one of the most overlooked working capital business loan issues for a business owner. An effective credit card processing program can eliminate many credit card factoring difficulties by implementing appropriate business finance and business cash advance cost-reduction alternatives.
Credit card processing improvements can achieve dual working capital management benefits by both eliminating credit card financing difficulties and providing improved cash flow by enhanced management of business finance and merchant cash advance programs. The total management benefits of integrating credit card receivable factoring and credit card processing services can be first-rate and significant for working capital business loan programs.Business Finance Working Capital Loan: Cost Reduction
As I mentioned in a previous working capital business loan report, for any merchant that accepts credit cards as a payment method, a merchant cash advance (obtained through credit card factoring and credit card processing) is an important business finance tool that is frequently overlooked. Even the most successful businesses frequently need more cash than they can obtain from a commercial bank. However, what is typically overlooked by many merchants is the chance to lessen their credit card management and credit card processing costs at the same time that they obtain a merchant cash advance via credit card receivables financing and a working capital business loan.Working Capital Business Finance Management: Avoid Credit Card Processing Problems
Credit card factoring is an important business finance option to consider when a business is seeking a short-term commercial loan, an unsecured business loan and improved approaches to credit card processing services. Unfortunately there are a number of problems to be avoided with credit card processing and credit card factoring programs. As with any successful business financing strategy, there will usually be only a small number of commercial lenders who are effective at implementing the joint tasks of credit card processing and credit card factoring strategies properly.
Because of such business finance problems, the choice of a provider of credit card receivable financing and credit card processing is extremely important to any business that accepts credit cards. To demonstrate which providers of credit card receivable factoring and credit card processing should be avoided, I have written a working capital business loan article which lists ten critical difficulties to avoid with credit card processing and credit card receivables management.Business Cash Advance: Best and Lowest-Cost Credit Card Processing
For businesses either dissatisfied with their current credit card processing and business finance management services or simply wondering if any cost improvements are possible, a credit card receivable factoring program which eliminates all ten specific working capital business loan obstacles mentioned above should be evaluated. One of the major working capital management reasons for evaluating credit card receivables financing, credit card processing and credit card receivable factoring in this combined fashion is that the low-cost producers of the best merchant cash advance programs are likely to be utilizing the best and lowest-cost credit card processing and management producers.
In many situations, the best and lowest-cost producers of credit card management and credit card processing services are not likely to be available to the typical merchant without being a part of a working capital business loan plan covering credit card receivable financing, credit card processing and credit card receivables management. The overall business finance improvements realized from the coordination of these two key working capital strategies is likely to be worth the management efforts.Business Loan and Working Capital Management: Improving Cash Flow
Business owners should not lose sight of the substantial total business finance benefits which might accrue to their business by prudently combining credit card processing and credit card receivables management services. As mentioned above, cost reduction and improved cash flow are primary goals of successful working capital management strategies, and the proper coordination of credit card factoring and credit card processing should accomplish both of these difficult goals simultaneously.
Copyright 1995-2007 AEX Commercial Financing Group and Stephen Bush. All Rights Reserved.

Here we are going to look at a simple home business, anyone can learn, requires no selling and has the ability to make money fast in the world’s biggest business… The business is becoming a currency trader from home. If you have never considered it, here are some reasons why it’s the perfect home business:-    You can learn how to trade in a few weeks -    Education is no barrier anyone can learn to trade – it’s a learned skill -    You can run your business in around 30 minutes a day -    You only need a few hundred dollars to get started -    You can leverage this amount by 200:1 to increase your profit potential -    You only need an internet connection and a computer-    You don’t need any staff or stock -    You can take holidays when you wish -    There is never a recession as one currency rises another must fall and vice versa -    There are profit opportunities every day. The huge advantage of this business is you can leverage your money, put down just $500.00 and you can leverage it 200:1,meaning you can trade $100,000. Of course this increases risk as well – but if you get the right education and the right skills, you can build wealth, by keeping losses small and running profits. Can you read a graph and could you spot repetitive patterns with practice? If you can then you can use forex charts to build profits. Currencies trend for months or years in one direction as they reflect the country they represent economic health and all you need to do is lock into them and hold them. Sure you will have losses ( your overhead) but if you run your profits they will mean you can emerge a winner. Currency trading is one of the only businesses, you can start with small seed capital and build wealth quickly and in many instances traders build incomes that are life changing, in around 30 minutes a day. The effort you have to put in for the reward you get out, is probably better than any other business. Your reward for effort in is huge and forex trading is not about working hard it’s about working smart and using leverage to build your stake. As you money increases, your effort doesn’t and that’s a huge advantage.It’s a business which you can learn and can win at if you want to all you need is the right education and mindset and your all set. So are you ready for a challenge? If you are welcome to the world’s biggest and most exciting business trading global forex markets for profit

Many people think they are going to get rich selling online but ad words, affiliate deals etc pay cents and to make money requires a huge investment in time and money. Here we are going to outline one of the best online businesses which anyone can master and make big profits with.

The advantages of this business are:

- No selling.

- Never a recession.

- You only need an internet and a computer.

- You don’t need staff stock or premises.

- You can learn it in about two weeks.

- You can then work just 30 minutes a day.

- You can take holidays when you want.

- You can get 100 times the capital you commit lent to you – on just a few hundred dollars.

So what business gives you all the above advantages?

It’s trading currency markets from your computer

HANG ON!

I couldn’t do that – it’s too complicated and to expensive.

Well you would be dead wrong today, anyone can open an account with just a few hundred dollars, trade for a living and many people who have never traded before have go rich doing so.

There is nothing to stop you learning this online business and nothing to stop you making money.

All you need is a desire to succeed and a willingness to learn.

The best way to learn this business is to study charts, you will then spot currency trends. These trends last for months or years and you can lock into them for profit.

When you open an account with a broker they will let you leverage your money.

Put down $500 and you will get 100 x leverage, you can therefore trade $50,000 – no credit checks required, this leverage is granted as soon as you open your account.

The real key to success is how you deal with leverage you need to be able to have the discipline to cut losses and run profits.

The fact that anyone can learn to trade and anyone can acquire discipline – was graphically proved by legendary trader Richard Dennis back in 1983.

He took a group of people from all walks of, of all ages, both sexes, varying degrees of educational learning and taught them to trade in just 14 days.

The result?

They went on to make $100 million for Dennis and become some of the most famous traders of all time.

Could you do the same?

The answer is the potential is there, sure you may not become as rich as this group – life is not like that but the opportunity exists for anyone, to make a great income from this home business.

The real question is do you have the desire to succeed, a willingness to learn and the mindset to be disciplined?

If you a life changing income could await you in the world’s most lucrative business – trading global forex online.

If you are up for the challenge and can see the potential then:

Welcome to the exciting world of currency trading, a fantastic opportunity awaits you – should you decide to look at this best online business further.

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As business owners develop their small business loan plans for future financing and refinancing throughout the United States, there is an increasing awareness that there have been significant business finance changes that cannot be ignored. Some of these measures are likely to end up being permanent, and even the temporary commercial mortgage loan and working capital loan changes are expected to be in place for an extended time due to the severity of the current financial climate.

The net result from business finance changes has been a reduction in commercial lenders as well as stricter standards for acquiring commercial loans and commercial mortgages. Unfortunately there has also been no shortage of misinformation about the availability of commercial funding.

A significant reduction in business lending activity overall is perhaps the most dramatic change. This has been due to several events occurring almost simultaneously. Several major commercial lenders have gone out of business altogether. Even though they have continued consumer lending, many banks have stopped commercial finance lending. Numerous business lenders have enacted stricter standards for the commercial financing transactions they are still willing to consider.

It remains to be seen how many changes will be permanent or temporary. But from a practical perspective, commercial borrowers are left with no choice but to adapt to the changing business finance environment. Business owners must be prepared to operate within a more complicated climate for commercial mortgage loans and small business loans regardless of how long the changes might be kept in place.

What should borrowers do about this? A primary option that business owners should explore involves looking beyond their local market area for help with commercial loans. A commercial financing expert operating throughout the United States should be helpful in improving upon this situation.

In addition to fewer business lenders to choose from, there are two other significant changes which must be anticipated by business owners before seeking new commercial loans. First, commercial lenders are increasingly demanding more collateral for virtually all business finance funding. Second, most lenders have cancelled or are about to eliminate unsecured lines of credit (usually called working capital loans) for many businesses.

Considering a business cash advance program based on future credit card processing transactions is likely to be an effective commercial financing strategy for overcoming the combined obstacles of more collateral, reduced unsecured credit lines and fewer lenders. This is proving to be one of the few sources of business funding that has not been adversely impacted by recent events. It will be productive to discuss the potential with a business finance expert who can provide advice about small business financing solutions including business cash advances and other financial options.

It is increasingly obvious that many banks will continue to modify their business lending programs in response to changing conditions. This means that another key change issue for working capital financing and commercial mortgages is the likelihood that more changes will be forthcoming in the near future.

To adequately prepare for future commercial finance changes that might (or might not) occur is a daunting task for a business owner. A commercial financing expert familiar with Plan B contingency financing for small business loans will prove to be a valuable resource for any borrower wanting to seriously deal with both current and future changes impacting the financial health of their business. By having a candid conversation with a commercial loan expert, business owners should be more capable of implementing an appropriate strategy for the vast changes which have recently occurred or are about to become effective for most business financing and working capital finance funding.

ght (c) 2009 Marco Carbajo

There has been a growing demand in shelf corporations from many of the investors,small business owners and entrepreneurs that I have the opportunity to speak with on an ongoing basis who are looking for coaching on how to start business credit using a shelf corporation.

By sharing some insight with you on shelf corporations and what are the key business credit advantages will better prepare you in making a more educated decision if this is an option you’re thinking about.

Now, let’s first cover the basics.

What is a shelf corporation?

A “Shelf Corporation, also known as an “Aged Corporation” (or “Aged Company” when referring to an LLC, for example) is a corporation that is already formed, but not in use, and ready for “purchase” by a new owner. There are many reasons that people purchase shelf corporations, and there are certain things to look out for when considering one of these “ready-made” corporations.

Now one of the questions I’m sure you’re thinking is “Why should I buy a Shelf Corporation?”

Shelf corporations allow you to engage into business, credit, or real estate agreements as an established company without having to go through the long waiting period of establishing a brand new corporation.

Most potential creditors or business resources are less likely to extend credit or lend to new or up-start corporations. By approaching them as an established corporation or company, the more likely your business has the opportunity to have access to credit lines, banking relationships, leases, and so on.

For example, during the initial stages of building business credit there are some vendors that will only extend credit to companies that are at least two years in business. In some cases they also require a personal guarantee if the business is less than a year old. By purchasing a shelf corporation that’s three or even ten years old can drastically increase the number of credit opportunities available to you.

Now don’t worry if your existing corporation is less than two years old because you’ll still be able to obtain business credit, but the amount of banks that you can apply at will be limited. If you’re planning on starting a corporation or setting up another corporation then this may be an option to entertain.

Shelf corporations can also offer a large increase in borrowing power as well as enhanced credibility for your business when talking to customers and lenders.

Remember the age of the owners does not necessarily correspond with the age of the company.

When the H.J. Heinz Company advertises that it was established in 1869, it doesn’t mean that all of the shareholders are well over 100 years old. It simply means that the company was filed in that year. You can take advantage of similar credibility benefits when advertising to customers.

The age of your company can give greater credibility to customers and lenders than a business that was recently established. So, purchasing companies with established credit and existing credit lines can give the business a big financial boost.

Here are the Top 5 Advantages of a Shelf Corporation

1. Saving time and expense of forming a brand new corporation

2. Immediate access to contract and government contract bidding. Most states require that your company be in business for a specified minimum length of time.

3. Instant credibility and an appearance of corporate history.

4. More attractive to potential investors and investment capital.

5. Faster and easier access to banking relationships and lines of credit.

As far as purchasing a shelf corporation for the purpose of obtaining a bank loan or line of credit, given the current economic conditions, banks are requiring seeing much more than simply the age of your company. There are bank ratings, credit history, NSF history, and other factors to consider especially if you request more than a $50k line of credit. So if your interest is in applying for bank financing keep in mind shelf corporations have no business history, tax returns, financials and existing revenue.

Another word of caution that you need to consider is there are many businesses that sell shelf corporations that have done business in the past, DO NOT buy these! If a shelf corporation has done business in the past and you purchase it you also assume all past liabilities of that company. So if the company has had any lawsuits brought against the corporation from the past you are now liable because you now own the corporation.

It’s critically important that the shelf corporation you are considering not have any inherent or lingering liabilities. For the most part, this can be assured by looking into the history of the corporation and ensuring that the extent of its business activities was limited or nonexistent except for the application of an Employer Identification Number and maybe the formation of a bank account.

Shelf corporations can be a great option to start business credit if the proper due diligence is taken and there are many aged shelf Nevada corporations, Delaware corporations, Wyoming corporations, offshore corporations and Canadian Corporations that are available but be sure you do your homework.