Small business loans soar under Jobs Act SBA loan program extension

The number and value of federal loans to small businesses in Georgia and across the U.S. soared in the last three months of 2010.

Loans in Georgia made through a U.S. Small Business Administration program offering 90 percent loan guarantees to lenders and eliminating fees for borrowing companies increased by nearly 52 percent. From October to December 2009, 449 loans were issued; during that same time period in 2010, the number of loans increased to 681. The value of those loans increased by 142.6 percent, from $220 million to $533 million. Signs of recovery have been seen in other business loan data, too. As for the recent rise of SBA loans, they occurred during a period of economic recovery, “so more entrepreneurs had more confidence they could make a go of it,” said Jeff Humphreys, the director of economic forecasting at the University of Georgia. “It’s a slow recovery, but it’s a recovery.” Chris Callas, owner of Q Care, a residential and commercial cleaning company in Roswell, received a $400,000 SBA loan in December to buy land, build and renovate new facilities in downtown Roswell to help his business grow. He had been denied by lenders for conventional loans before turning to Cornerstone Bank. “I’ve owned this business for years and was cash-flow positive [despite slowing sales] but the banks were gun-shy about lending,” he said. The loan is 90 percent guaranteed and Callas didn’t have to pay $12,000 in fees. “It allowed the transaction to happen,” Callas said. Now, he added, his expansion will stimulate the hiring of construction workers and others building his new business quarters, further stimulating the local economy. The latest figures are even more striking when compared to data from the same quarter in 2008, when the economic recession took hold. For that three-month period, 224 loans were made through the program, valued at $92 million. The higher loan percentage guarantees and fee elimination were continued for the last three months of 2010 after President Barack Obama signed the Small Business Jobs Act, which extended those incentives. Terri Denison, district director at the Georgia District Office of the SBA, said the surge in the number and value of the loans could be attributed to the improved incentives under the loan programs and to the nascent economic recovery. “The point was to create a little more favorable environment in which lenders would be willing to make loans,” she said. “That would be kind of a way to get the ball rolling again.” She said about two-thirds to three-quarters of borrowers were existing businesses that operated in a diverse group of industries including professional services, construction and agribusiness. The loans made under the SBA’s programs from February 2009, when the American Recovery and Reinvestment Act was signed, through the end of 2010 carried 90 percent loan guarantees, up from 75 to 85 percent guarantees, and no borrower fees, instead of 2 to 3 percent fees on the loan amount. Those enhancements were intended to prod reluctant lending institutions to lend money to businesses, while allowing the borrowers to use money that otherwise would have gone to fees for their business. Nationally, the SBA said it approved more than $10.3 billion in loan guarantees in the last three months of 2010, which supported more than $12 billion in loans. The guarantees were funded by $505 million in subsidy funds provided during the period. Funding for the higher guarantee/no fee loans has expired, although the SBA continues to offer its loan programs at the original rates and terms. Charlie Crawford, chairman, president and CEO of Private Bank of Buckhead, said he expects some banks to pull back slightly on SBA lending as guarantees on many loans return to 75 percent. Demand also could dip as the fees borrowers are charged are restored. Meanwhile, demand for traditional business loans by companies of all sizes increased slightly in both October and November, after steady declines for nearly two years, according to a December report by the Federal Reserve. For Georgia-based banks, total business loans not backed by real estate have increased three straight quarters, according to FDIC data. Total commercial and industrial loans to companies of all sizes are up 6.2 percent to $32.47 billion. Those figures include loans inside and outside Georgia.

4 Lessons Your Small Business Can Learn from Amazon

As an e-commerce juggernaut with billions of dollars in sales, Amazon may seem an unlikely source of inspiration for small businesses. But the company’s market value doubled in 2015, and third-quarter revenue from its new business, Amazon Web Services (AWS), grew 78 percent compared to the same period in 2014—enviable successes for businesses of any size. We talked to three small business owners about the lessons they’ve learned from Amazon.

1. Start small. 

From dog food to DSLR cameras, hundreds of millions of products are for sale on Amazon. You can also watch streaming videos, set up subscription-based delivery of your favorite items or secure cloud computing services for your business. But it wasn’t always this way. Amazon started as a bookseller, “and for years, even when they were expanding into other verticals or industries, that was all they were known for,” says John Turner, CEO and founder of Users Think, a Pittsburgh, Pennsylvania-based company that delivers user feedback on websites’ home pages. “Intense focus early on allowed them to win that market, and only then did they really branch out. But they didn’t try to be ‘the everything store’ right away.”

2. Put your customers first. 

“Everybody is eating Amazon’s digital dust because Amazon keeps their customers No. 1,” says Scott Lorenz, president of Westwind Communications, a public relations and marketing firm in Plymouth, Michigan. “If you look at all the innovative changes Amazon has made over the years, they’re all for the benefit of the customer.” (Think one-click purchasing, free and fast shipping—including same-day delivery in some markets—and low prices.)

3. Help yourself, then help others. 

AWS, a cloud-based computing service, may seem an odd offering from a company focused on retail, but “AWS wasn’t some out-of-nowhere pursuit,” Turner says. “It came from Amazon’s own need to build a rock-solid, fast and scalable website. They had to not only buy their own hardware for it, but often had to build their own software to handle the influx of traffic.” Small business owners should examine the solutions they craft for their own businesses, Turner says, and consider how those products or services could become sales opportunities.

Turner founded his small business, UsersThink, after developing the tool for his own use as a Web consultant. “It became apparent quickly how powerful it was,” he says, “and I decided to refine it for public use. It’s now my primary focus.”

4. Ship smart. 

Small businesses may not be able to offer two-day shipping à la Amazon Prime or plan for same-day delivery via drones, but “small retailers can learn from Amazon about how to nail the customer experience in regards to shipping,” says Jarrett Streebin, founder and CEO of EasyPost, a San Francisco, California-based shipping company. Providing your customers with order receipt confirmations, tracking codes and email updates about shipping status is simple, but it goes a long way in creating a great customer experience, Streebin says.

Looking to start up a new business or just need capital for an existing business. We can help call 609-365-0001 or www.imndirect.net

Our newest Capital Group Rainstar, Working out excellent !!

Rainstar Capital Group Provides Working Capital to 2nd Car Dealership in 7 days! Hello Mike, We continue to be active in funding auto dealerships. We funded our second different car dealership last week over in New Jersey. That makes two car dealerships inside of 7 days that were seeking working capital solutions!  The car dealership had outstanding receivables and was looking for working capital. We were quickly able to understand the business owner's need, structure a solution that made sense and got him the working capital he needed to ease his cash flow constraints. The deal was brought to us by one of our registered brokers Mike C. over in New Jersey. Here is what he had to say about the process: "Rainstar Capital Group has been fantastic to work with! As a broker I am always looking for proven lending platforms and Rainstar's team and funding capabilities have been an added value resource to our business. I haven't come across a firm that has such a wide variety of funding products for commercial real estate, small business and equipment but Rainstar has it. We are excited that they were able to fund this auto dealership and have more deals in the pipeline with them that they are approving! I would highly recommend working with Rainstar Capital Group for your funding needs!" Mike C. As always if I can assist on anything marketing, capital or business related feel free to reach out! Thanks, Kurt A. Nederveld Chief Executive Officer Rainstar Capital Group www.rainstarcapitalgroup.com 1/27/2016 Rainstar Capital Group, a Grand Rapids, Michigan based multi strategy private equity firm announced today it had provided a working capital solution to an auto dealer in New Jersey. The firm led by CEO- Kurt Nederveld made the following statement, "We continue to be active in providing working capital to auto dealerships. This is the second auto dealership we have provided capital for in the last seven days.  Rainstar Capital Group provides merchant cash advances, equipment financing, unsecured lines of credit, senior debt facilities for commercial real estate and working capital solutions while investing in distressed debt portfolios, commercial and residential real estate. The firm operates a national platform with broker/affiliate representation in all 50 states.  "The client was looking for working capital as they had outstanding receivables" noted Kurt Nederveld, "By quickly underwriting we were able to deliver this solution to the client easing their cash flow constraints. Rainstar Capital Group noted that it was providing its small business and equipment financing to clients in all industry verticals that were seeking capital solutions of 10k and up, minimum 450 credit score and up and could be start ups.  The firm noted that they continue to grow their broker representation of finance brokers seeking working capital solutions for their clients. Interested brokers can register on rainstarcapitalgroup.com. "We look forward to continuing to finance auto dealership clients along with other businesses!" stated CEO Kurt Nederveld. For more information on Rainstar Capital Group visitrainstarcapitalgroup.com or email:Kurt@rainstarcapitalgroup.com DebtStar Capital is a private mortgage investment and capital management firm that serves institutional lenders, servicers, capital partners, as well as commercial and residential borrowers. We focus on investing in and managing portfolios of distressed assets, non‐performing and sub performing real estate secured loans. Rainstar Capital Group is a multi strategy private equity firm based in Grand Rapids, Michigan that makes investments in consumer distressed debt portfolios, small business merchant cash advances, distressed mortgages, high growth companies and residential and commercial real estate. As a capital management and advisory firm RCG focuses on the growth of its portfolio acquisitions along with serving its portfolio companies and clients. Rainstar Marketing is a leading marketing and advisory firm whose clients include major banks, hedge funds, specialty finance companies, family offices, and private equity firms that lend in the commercial real estate and corporate finance sectors. Rainstar Marketing specializes in advising firms how to use social media, specifically LinkedIN, to generate leads to grow their business. Rainstar Marketing has developed two capital networks- Ultimate Real Estate Capital Network and Ultimate Commercial Finance Capital Network- whose members are direct asset based and real estate lenders. Rainstar Marketing also operates the Ultimate Broker Capital Network which is a membership based platform for Capital Advisory firms providing them necessary resources, lender advisory and marketing/branding solutions to grow their revenues.

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NEW JERSEY DISASTER LOANS

DISASTER LOANS - IMN Direct provides low-interest disaster loans to businesses of all sizes, private non-profit organizations, homeowners, and renters.
IMN Direct disaster loans can be used to repair or replace the following items damaged or destroyed in a declared disaster: real estate, personal property, machinery and equipment, and inventory and business assets.

f you are in a declared disaster area and have experienced damage to your business, you may be eligible for financial assistance from the SBA. Businesses of any size and most private nonprofit organizations may apply to the SBA for a loan to recover after a disaster.

Loan Amounts and Use

IMN Direct makes physical disaster loans of up to $2 million to qualified businesses or most private nonprofit organizations. These loan proceeds may be used for the repair or replacement of the following:

Real property
Machinery
Equipment
Fixtures
Inventory
Leasehold improvements

The IMN Direct Business Physical Disaster Loan covers disaster losses not fully covered by insurance. If you are required to apply insurance proceeds to an outstanding mortgage on the damaged property, you can include that amount in your disaster loan application.

If you make improvements that help reduce the risk of future property damage caused by a similar disaster, you may be eligible for up to a 20 percent loan amount increase above the real estate damage, as verified by the SBA.

You may not use the disaster loan to upgrade or expand a business, except as required by building codes.

Eligibility and Terms

A business of any size or most private nonprofit organizations that are located in a declared disaster area and have incurred damage during the disaster, may apply for a loan to help replace damaged property or restore its pre-disaster condition. Call us at 609-365-0001

Access Cash Fast - Merchant Cash Advance is not a loan

Access Cash Fast

Merchant Cash Advance is not a loan—it’s the sale of your future credit card sales at a discount.

You sell a fixed dollar amount of your future credit and signature debit card sales at a discount to one of our preferred cash advance partners. Through an automated process, a fixed percentage is returned from each sale as it is settled. The percentage paid from each sale is fixed for the life of the funding, and the advance is paid back when and as you get paid.

You never have to worry about writing checks, making timely payments, or paying late fees. Once you have paid down a portion of your original balance, you can renew your advance to get additional capital. Renewal is easy and fast. In most cases, funds will deposit into your account the next business day. IMN Direct call 609-365-0001 www.imndirect.net

The Fundamentals of Leasing Business Equipment

What it is: From computers and heavy machinery to complete offices, it is possible to lease almost anything for your business. Equipment leasing can provide a lifeline for cash-strapped businesses in need of the tools of the trade. IMN Direct Capital Funding can assist you in equipment lease options call us at 609-365-0001

How to get it: Equipment leasing is basically a loan in which the lender buys and owns equipment and then "rents" it to a business at a flat monthly rate for a specified number of months. At the end of the lease, the business may purchase the equipment for its fair market value (or a fixed or predetermined amount), continue leasing, lease new equipment or return it. IMN Direct Capital Funding can assist you in equipment lease options call us at 609-365-0001

Upside: Advantages include getting your hands on needed equipment without paying the costs up front. Lines of credit stay freed up because the leases are not bank loans, and lease payments can potentially be deducted as a business expense. It is also possible to easily upgrade equipment once a lease expires.

Related: 4 Advantages to Leasing Office Equipment

Downside: Leasing can be an appropriate for any business at any stage of development. But when it comes to startup businesses, it is likely the owner will be obliged to put his or her personal credit on the line in order to secure the lease. IMN Direct Capital Funding can assist you in equipment lease options call us at 609-365-0001

Related: When and How to Lease Equipment

Other downsides include a higher price over the long term, and the lease commits you to keep the equipment for a period of time.

Still, the Equipment Leasing and Finance Association estimates that four-fifths of businesses at least lease some of their equipment -- a testament to the usefulness of the practice.

More Tips:

A company selling equipment is often able to make a direct referral to a leasing company with which it does business.

It is a good idea to get a quote from the leasing firm referred by the company that wants to sell you the equipment. The quote should be competitive. After all, the company selling products wants to sell as many as possible, and it surely doesn't win any points by referring a leasing company that gouges its customers. But it also pays to get another quote. Usually, the company selling the equipment works with more than one leasing company. Or ask a friend or a business associate for a referral.

Keep in mind that the person making the leasing agreement may be a broker and not be the source of the equipment.

A good rule of thumb is to deal only with financing sources that have operated at least as long as the term of the proposed lease. Get picky when it comes to the terms, especially when it comes to casualty insurance to cover equipment damage and responsibility when it comes to paying personal property tax or handling repairs. IMN Direct Capital Funding can assist you in equipment lease options call us at 609-365-0001

Understanding Business Loans such as Merchant Cash Advance

For many business owners, the introduction and explosion of merchant cash advances and merchant cash loans have been a welcome source of capital—especially those business owners with companies that often have trouble getting traditional bank credit.

Generally, these loans are short-term in nature—often as little as 3 months with payments made daily, in the form of withdrawals from the company checking account or as a fixed percentage of that day’s credit card receipts. The upside is that business owners can obtain credit quickly and without the rigorous approval standards and documentation requirements of a traditional lender.

Ivan Rincon founded The Orchid Boutique, which sells designer swimwear online and in an upscale Miami boutique, and sought out a merchant cash advance in order to fund inventory purchases.

I applied for a merchant cash advance because my bank wasn’t providing the financing to support my growth. It was an easy process and I received funding quickly to keep the working capital I needed on hand to operate the company,” Rincon said.

As most media observers, independent analysts, and even merchant cash advance industry leaders have pointed out, loans like Mr. Rincon’s can be very expensive. Most independent reports peg the interest rate on these loans between 18-50%. But there are some particular nuances to the merchant cash advance that throw the reliability of those numbers into question.

It’s not that merchant cash advance companies are lying or that reporters have been misled (although some cash advance lenders certainly misrepresent the cost of their loans), but rather, the price of these loans has generally been expressed in a way that is inconsistent with how other, more common forms of credit, are priced and discussed.

After all, the interest rate on virtually all mortgages, credit cards, student loans, and car loans are expressed as an annualized percentage rate (APR). Merchant cash loans are generally priced using what’s called a buy rate(another commonly used term is factor rate but the meaning is the same). APRs and buy rates operate differently in a couple of crucial respects that make comparing them more than simply putting two numbers side by side.

Here’s an example. Merchant cash loans are often priced with a buy rate between 1.3 and 1.4. To determine the total payback amount on the loan, the buy rate is multiplied by the amount borrowed. In a case where a borrower obtains a $100,000 loan with a 1.3 buy rate for a 12-month term, his total payback amount is $130,000. At first glance, that seems like a 30% interest rate, a rate that most would consider high. And indeed, the interest cost of the loan is 30% ($30,000). However, when loans are priced using a buy rate, all of the interest is charged to the principal upon origination of the loan. If the loan had been priced at 30% APR, where interest accrues on a lesser and lesser principal amount as payments are made, the total payback amount would be approximately $117,000—a difference of $13,000! The 1.3 buy rate is actually equivalent to a 52% APR, not the 30% one might expect.

Another important consideration when evaluating a buy rate is the importance of time. Buy rates are not annualized as APRs are (hence, the word annualized). Suppose the $100,000 loan with a 1.3 buy rate had a term of 6 months instead of 12 months, as is often the case with merchant cash loans. Instead of paying back $130,000 over the course of a year, the loan is paid back twice as quickly (in 6 months). The equivalent APR is now 104% (52% * 2)!

These distinctions are important when considering the cost of obtaining a merchant cash loan versus other forms of credit. After all, interest rates merely represent the price of credit. And prices are of value when they can be expressed and compared in a consistent, apples-to-apples way.

For more information call 609-365-0001 or visit http://www.imndirect.net