Four New Ways to Make the Most of Working Capital

The secret to surviving this Great Recession may turn out to be how you manage working capital--the difference between the money you've been paid and the cash you owe.

The good news is that clever startups are coming to market with big new ideas intended not only to change the way small businesses handle money, but in some cases to also cut out big, bad, TARP-grabbing traditional banks altogether.

"The market is beginning to understand how much value there is in unlocking what is not working in the financial infrastructure," says Aaron Patzer, vice president of the Personal Finance Group at Intuit and founder of Mint.com, the online personal finance site Intuit purchased last year.

Here then, is how to get the most out of next-gen working capital.

1. Put future sales to work
The old-school small-business dynamic of paying a bill by the agreed-upon due date or face usurious late fees is disappearing. BillFloat, based in San Francisco, is launching micro-credit for small business. Using investment and tech backing from online giant PayPal, BillFloat will provide as much as $1,000 of unsecured credit for 30 days to pay any bill.

BillFloat charges a flat rate for each micro loan. Fees during the current beta period, for example, are $4.99 per bill for a $50 loan and as much as $14.06 to pay a $225 bill. This fee combines a 3 percent monthly interest rate and a flat service charge per bill. Lendees have 30 days to repay and can extend terms as long as they notify BillFloat. Interest continues to accrue while the balance is outstanding.

Traditional banks also are morphing into financing innovators. Capital Access Network has created a product called AdvanceMe that provides working capital based on a company's estimated future credit card transactions. The outfit also reviews other factors--including whether a company has a minimum monthly credit volume of $5,000--before agreeing to provide a lump sum. The Scarsdale, N.Y., company says the approach lets firms with lower credit scores qualify for loans.

Clearly, new financing options like these will strain some small businesses. For example, as low-cost as BillFloat might be compared with charges for bounced checks, 3 percent per month works out to a near-Sopranos level of 36 percent annually. And financing tools like those offered from Capital Access Network require sophisticated accounting because, technically, the cash is not a loan, but a form of accelerated sale. Companies will need to think through options to be sure these deals make business sense.

2. Get your money faster
Considering all the innovation in digital technology and the web, small-business billing is still almost ludicrously old-fashioned snail-mail paper bills and paper checks or fast but pricey web-based billing and payment services. Now third parties are offering new ways to expedite inbound cash.

Invoicera, based in New Delhi, provides services like international billing, multiple payment gateway support, fiscal team management and automatic billing. Basic tools are free, and $10 a month buys access for as many as 25 users and more features. The system requires at least a working knowledge of accounting to use properly.

Bill.com in Palo Alto, Calif., offers a near-enterprise-grade billing and invoicing tool that extends to managing payroll and billing options via the web. "Small-business owners are beginning to demand the kind of controls they have in their personal banking tools from the business tools," says Jeff Schultz, Bill.com's vice president of marketing.

Traditional financial service firms are not far behind. Charge card giant American Express is betting on a new payment service that ties web payment options, financing and other services to small-business invoices.

The rub with all these is cost. American Express charges to manage receivables. Fees are complex and vary by amount and product used, but entry-level accounts cost 2.89 percent of each bill, plus 15 cents per transaction. Bill.com's service starts at $20 per month, plus 99 cents per check and 49 cents per electronic transaction. So firms must be careful not to get buried by these costs.

3. Lose the payroll, the paper and even the branch
BankSimple is angling to offer all the services of a bank without the actual building. The Brooklyn, N.Y., firm is establishing a web-based financial system that will offer free ATMs, automated money management, smartphone bank deposits and free online bill payment with what the firm claims are no hidden fees and far lower costs than traditional banks.

New banking hybrids are springing up fast. Austin, Texas-based MPOWER Ventures, through its prepaid debit card brand Mango Financial, recently opened its first "Mango Store" in Austin. A lower-cost alternative to high-priced check cashing, Mango's new retail location provides prepaid MasterCards, mobile money transfers and free alternatives to many financial transactions. The service gives small businesses not only new payroll options, but also lets their employees cash checks less expensively. Mango will offer payment options for small businesses looking to pay employees in cash. It hopes to open stores across the country on a march to become the Starbucks of next-gen banking.

PayNearMe is looking to do away not only with paper checks, but paper money, too. The Mountain View, Calif., company has pioneered the use of bar-coded vouchers, which any desktop imaging device can produce and which can be used to pay for anything from goods at 7-Eleven stores to rental cars from firms like Avis.

There are risks for these services. Fees are higher for working through third-party ATMs, and the tax implications are significant. The IRS likes to know where your money is.

4. Smarter point-of-sale 
For sheer innovation, it's tough to beat the changes coming at the point-of-sale. One of the most cutting-edge is Palo Alto-based Bling Nation, which is trying to deploy a system that lets small firms create on-the-fly loyalty programs. The cash-back and points system works through BlingTag, a fob that attaches to the back of any mobile device--no cash or credit card needed. The BlingTag lets merchants track purchases, reward customers and offer discounts almost automatically.

Firms like Plastic Jungle, meanwhile, are in the $30 billion market of uncashed gift cards. The San Jose, Calif., firm buys the remaining balances on unused or unwanted gift cards both from users and businesses, then resells this purchasing power to buyers using its Gift Card Exchange. Spreads range from 30 percent to 92 percent of face value, depending on the retailer and value of the gift card. "If you have gift cards on your books, this is a new way to get working capital," says Bruce Bower, CEO of Plastic Jungle.

Again, there are drawbacks. Bling Nation must work with existing credit card vendors, which can be challenging. And gift cards face steep competition from prepaid debit cards that replicate the gift card experience but can work with any retailer.

"All this activity does bring excitement to the market," says Patzer of Intuit, in Mountain View, Calif. "But getting from a good idea to a good business takes awhile."

Interested about alternative lending call us at 609-365-0001 or visit our website www.imndirect.net to see if your small business qualifies for funding.

Business Funding Options for Bad Credit Risks

For better or worse, your credit score has become your "SAT score" when it comes to financing. If you have a high score, you'll have a pretty easy time getting credit offers from a wide variety of funding sources. If your score is low or nonexistent, however, you won't.

But a low score isn't something you can run away from, and even if you avoid it, it won't go away. The trick is to fund your business in ways that actually get your score back on track so when you're ready to move your business to the next stage, your score will start opening doors rather than getting them slammed in your face.

Here are some ideas for entrepreneurs with low scores who are faced with funding challenges:

1. Look beyond credit cards and bank loans for financing. Studies show that credit card and bank financing account for just 25 percent of the total funding needs of early-stage entrepreneurs. This statistic should provide you some comfort, because it implies that 75 percent of the money you need can come from other sources that rely less on your credit rating.

While there are credit cards and lending programs designed for individuals with poor credit, these options will typically charge a higher interest rate to compensate for the credit risk posed by a sub-prime borrower. One bank option for those with poor credit scores is a home equity line of credit, though I'd be wary of putting your home on the line to finance a risky early-stage venture.



2. Seek loans from your relatives and friends. Everyone likes the idea of entrepreneurship, which may be why, at some point, more than 50 percent of all business owners get financing help from friends and relatives. Chances are, your relatives and friends want to see you succeed and may be able to help make your business dream a reality. They also may not dwell on your poor credit score because they trust you, or they believe your business concept to be sound. (Banks used to evaluate your character and business conditions the way family and friends still do, but credit scoring models have made lending decisions more automated, resulting in the critical power your credit score holds over you.)

If you follow the advice I have shared in previous columns on identifying private lenders and understanding their risk profile , you should be able to get access to cheap, quick and patient business capital. Also, you can now use private loans from relatives, friends and business associates to rebuild your credit score if you use a loan management company to service the loan and report payments to credit bureaus.



3. Investigate microlenders and web-based lenders. There are several nonbank lenders on the internet that now offer microloans to entrepreneurs. These loans are typically in the $5,000 to $25,000 range. Some of these sites are excellent sources of capital for those with poor credit and will also report your payments to credit bureaus which can help raise your credit score if you make timely payments. Be sure to shop around and compare rates since each site offers a twist on how they price loans and spread risk to their lenders/investors.

For a FREE Consultation just call IMN Direct Capital at 609-365-0001 we would like to hear from you to explain how you can get approved. Or just visit us at www.LoanBizSolutions.com

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Why Banks Don’t Want to Lend to Small Businesses

It’s one of the most frustrating realities facing today’s small business owners and small business owners-to-be: 68% of small businesses are looking for loans of $250,000 or less and 50% of small businesses are looking for loans that are less than $100,000, many traditional lenders have retreated from providing these smaller loans. Instead, they’ve opted to serve those seeking $1 million or more for their business needs. Given that there’s so much demand from small business owners looking for amounts way under $1 million, why aren’t banks serving these entrepreneurs more?

Another issue is access to credit. Big businesses have more access to large financing markets and can get credit very cheaply, While small businesses have little or no access to the same type of credit. Despite concerns, there are some promising changes taking place in the alternative small business lending market to fill this void - especially through the advances of IMN Direct Capital Funding. With more efficient technology, lenders are able to lower their overhead and underwriting costs and pass those savings to small business owners. For example, brokers such as IMN Direct Capital Funding are using technology to drive down the cost of credit by connecting borrowers and investors to alternative sources. 

Protecting small businesses and giving them the opportunity to access responsible credit in a competitive market is just as critical as protecting individual consumers. Many small business owners have put their lives on the line to create new opportunities for their families and communities. Encouraging the values of the Small Business Borrowers’ Bill of Rights — access, transparency and inclusion — through industry-led efforts and thoughtful government policy will give rise to a market that secures the role of good lenders, strengthens small businesses and strengthens our workforce.

Interested about alternative lending call us at 609-365-0001 or visit our website www.imndirect.net to see if your small business qualifies for funding.

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

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

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

Business Loans for Cape May County Merchants

Business Loans for Cape May County Merchants

Is your business slow in the off season, looking to expand, or just need operating cash. Good Credit or Bad Credit, NO Problem !!

CALL 609-365-0001

Think before Applying: Your Helpful Guide to Business Loans

When you approach a bank for a loan, you're asking the bank to go into business with you. Keep in mind that both parties need to make a profit and you are asking the bank to agree with your business strategy and the risks involved. In order to make this a beneficial decision on both sides of the table, it is best to arm yourself with the most important knowledge. We aim to be a resource for you to help you gain such knowledge.

Why Take Out a Business Loan?

Sometimes taking out a business loan is a response to an emergency situation, and other times it is part of a long-term plan to expand and improve the company. If your company's cash flow does not allow you to meet the upcoming payroll deadline, then it becomes necessary to take out a business loan. If your company does not have the liquid assets to pay for a new piece of equipment which will make your company profitable and competitive, then you need to get a business loan to purchase that equipment. Questions call us at 609-365-0001

We have loans for all types of businesses in Cape May County. We do not target a specific industry. In fact, we serve restaurants, franchises, retail stores, automotive shops, doctors, home improvement builders manufacturers and more, continually expanding our expertise and our clients’ abilities and enterprise opportunities by providing capital for business in Cape May County.

Get Quick Approval For A Customized Business Loan

Why Do Businesses Contact Us for their immediate funding needs?

➤ No Upfront Fees and Fast Application

➤ 1 Hour Decisions
➤ Bad Credit Is Not An Issue
➤ Flexible Repayment Options
➤ Loans From $5000 to $1M Available
➤ Money Available in 24 Hours
➤ Our Goal Is To Help You Succeed

Financing Programs

• Accounts Receivable Financing
• Business Line of Credit
• Commercial Mortgage Financing
• Equipment Leasing and Financing
• Loans for Doctors and Contractors
• Merchant Cash Advances
• Purchase Order Financing
• Merchant Processing Services
• SBA Loan
• Contractor (contract) Financing
• Small Business Loan

We service Business loans for all cities in Cape May County including Wildwood and Wildwood Crest, Cape May, Stone Harbor, Avalon, Ocean City, Atlantic City, Rio Grande and many more have gotten business loans even with bad credit.

Questions call us at 609-365-0001 or Visit www.IMNDirect.net