Why Have So Few “Small” Businesses Gotten Relief from the SBA?

The first round of SBA PPP small business financing has come and gone and the thousands of small businesses that make up the Kapitus client base have largely been left out in the cold.  While we eagerly await Congress’s approval of additional funds, we used this time to survey our customers to understand who was able to obtain funds from the first $349 billion in forgivable loans, who was not, and which financial institutions were most helpful in supporting small businesses.

What we found was a troubling dependency by small businesses on the largest financial institutions in the country (national and regional banks).  These large banks, as well as the SBA itself, seem to be leveraging a definition of small business that allows large companies to fit their subsidiaries into qualifying entities while independent business owners are overlooked.  The national banks appear to have systematically prioritized these large clients over their smaller constituents and in doing so, exhausted the first round of SBA funding faster than many anticipated.

Our survey was conducted between April 17th and 20th and targeted 26,536 small businesses that we have provided capital to over our 14-year history.  As of Monday morning, we had received 2,076 responses, 80% of which told us they had applied for SBA PPP funding before the money ran out.

Of those respondents, 1,206 answered the question “have you received funding from your PPP application” and 1,116 or 92.5% told us that unfortunately, they have not.  The 90 customers that have received funding provided tantalizing clues as to how small businesses are getting money from the SBA.  The most successful channel to date appears to be through community banks, where 18.8% of applicants have been successful and where customers are more likely to have a personal relationship with a decision-maker inside the bank.

Kapitus PPP Survey

Credit unions have also been moderately successful with 11.8% of applicants receiving funding but have a much lower penetration rate than other banking channels.  Regional banks follow at a 7.2%, followed by the SBA itself (2.7%) and non-bank lenders (1.4%).  Sadly, national banks (such as Wells Fargo, JP Morgan, Bank of America and Citigroup) which have the greatest penetration into the US small business community, have to date done the least to help small businesses in their time of need.  National banks only produced three successful loans in our survey out of 320 applications, a dismal 0.9% success rate.

Why is it that national banks have done so poorly serving the small business community?  Banks are economic animals with scarce resources just like any other company.  When a large number of clients request a scarce resource at the same time, they prioritize their largest, most profitable and riskiest clients first.  In our survey, community banks supplied small businesses with more lending products than any other bank segment.  This indicates that community banks have deeper ties and greater exposure to the plight of small businesses and as a result, during a crisis they work more diligently to ensure that their needs are met.  As seen in the table below, our clients utilize community banks and non-bank lenders more heavily than other types of credit institutions.

Kapitus PPP Survey

Another part of the answer lies in what the SBA, and in turn the nation’s largest banks, consider “small” when it comes to business.  On April 16th the SBA announced that they had distributed nearly 1.7 million loans representing $342 billion, indicating an average loan size of $206,022.  Assuming the average American worker was making $49,764 annually (or $4,147 per month) just before the crisis (Oficina de estadísticas laborales) and considering that PPP loans are sized based on 2.5 times monthly payroll, this implies that the average company getting a PPP loan as of April 13th had 20 employees.  There are nearly 6 million companies with between 1 and 500 employees and the average company in this group has 10 employees (US Census Bureau).  This means that fewer than 28% of eligible small businesses were served in the first round of SBA funding, and those that were served were the largest companies in the range. This argument is supported anecdotally by the fact that companies like Ruth’s Chris, Potbelly and Fiesta Restaurant Group each received between $10 million and $20 million in PPP loans through JP Morgan.  Kapitus PPP Survey

This sequence of facts has been very frustrating to non-bank lenders such as Kapitus who are the only consistent source of financing available to most businesses with 10 or fewer employees.  We have been petitioning the SBA for a temporary license to allow us to lend the PPP product to our core client base (our average customer has 8 employees) since the program was announced.  Nearly two weeks into the program the SBA released an application for non-bank lenders, and we submitted our application within 12 hours of its being published.  Eleven days later we have heard nothing, although some of our larger competitors did receive temporary licenses just as the money in the first tranche was exhausted.

Undeterred, we are working with our clients to secure PPP loans in any way we can.  We have partnered with several community banks and non-bank lenders with SBA licenses to fund our clients and we are lining up additional capital to fund these loans ourselves when and if we are awarded a license.  In the meantime, we counsel or clients on their financing options and continue to provide innovative lending products as small businesses struggle to navigate the most challenging business environment any of us have ever seen.  America’s small businesses owners are some of the most creative and resilient leaders our country has.  We look forward to partnering with the SBA to offer small business owners the solutions they need to survive, rehire, rebuild and reopen as soon as it is safe to do so.

To receive the most recent updates on Paycheck Protection Program and other federal, state and local relief initiatives aimed at helping small businesses visit our COVID-19 Resource Center.

 


About the Author

About Kapitus - Ben Johnston

Ben joined Kapitus in 2014 as Chief Strategy Officer and became Chief Operating Officer in January 2017.  Prior to joining Kapitus, he was a Principal of Pine Brook Partners, a New York-based private equity firm where he invested in banks, insurance companies, asset managers and specialty finance companies.


Best Books for Small Business Owners Series: The Innovator’s Dilemma

As a small business owner, do you consider how exploring new ideas can lead to future success? If making time for continuous learning isn’t at the top of your priorities, you’re not alone. And we want to help. Reading or listening to business books can offer new perspectives and help you understand classic business lessons. So, follow our Monthly Must-Reads series! In this series, we share the best books for small business owners. We’ll save you time by helping you determine whether each book is worth your attention. For each featured book we:

  • Identify exactly which types of business owners will benefit from reading it
  • Summarize the main points
  • Share key take-aways and reader reviews

This month, we cover The Innovator’s Dilemma by Clayton M. Christensen. Check out the end of this article for our past must-reads.

Business Book:

The Innovator’s Dilemma, by Clayton M. Christensen

Focus:

To uncover two innovation types and to understand the purpose of and necessity for each of them.

Main Idea:

When companies disregard opportunities for disruptive innovation, they risk going into the shadows of more inventive start-ups.

Great for Small Business Owners Who:

Develop innovative solutions for niche markets, or have long-standing businesses and want to protect themselves from dissipating.

Synopsis:

The Innovator’s Dilemma identifies and explains two types of innovation: sustaining innovation and disruptive innovation. Sustaining innovation is the ongoing effort of listening to and improving from customer feedback. In this way, it satisfies customer’s current needs. Disruptive innovation helps companies evolve, to meet customers’ needs–often in an underserved market. Examples include the transition from digital to smartphone cameras, GPSs to navigation apps.

Christensen goes on to explain which types of companies typically focus on disruptive innovation and which ones lag behind—and why. He offers strategies for how both long-standing companies and new start-ups can successfully explore and benefit from disruptive innovation.

Key Take-Aways:

Large, well-resourced companies are more likely to ignore disruptive innovation and suffer because of it. They may not even notice niche markets. They might think that these markets aren’t offering enough rewards to compensate for the lack of credibility. These companies should continue their sustainable innovation efforts. They should also start paying attention to how niche markets want to use their products.

For start-ups and small businesses, disruptive innovation offers huge opportunities. They’re often first to market. Targeting small niche markets offers a more forgiving, cooperative and engaged customer base. Disruptive innovators don’t directly compete with larger, better-funded market leaders for customers. This means they have a higher chance of growing surprisingly quickly and unchecked.

Pursuing disruptive innovation can help companies take–or keep–their place as market leaders of the future.

Reviewers Say:

“Clayton Christensen’s The Innovator’s Dilemma…remains one of the most important business leadership books on the market… The pace of technological innovation has increased drastically… [but] the foundational principles remain the same—when companies are doing everything right, they can still lose their position of leadership in the market. Companies are incentivized to act in accordance with what their customers want, and if they are not careful, that mentality can preclude them from taking advantage of disruptive opportunities that their current customers are not yet interested in. Christensen’s warnings should be heeded by leaders and managers at all levels of the organization…. I look forward to reading about how the Innovator’s Dilemma can be addressed in this age of near-constant innovation and rapid technological advancement.”

“I’ve been involved in innovation most of my career, and now wish I’d read this book much earlier. The simple but powerful thesis of the book is backed up by data and case studies from disparate industries. Like many business books it is a bit repetitive at the end… But the ideas and usefulness are five stars.”

Monthly Best Books for Small Business Owners:

August, 2019 – Blitzscaling

September, 2019 – The E-Myth Revisited

October, 2019 – Influence: The Psychology of Persuasion

November, 2019 – Built to Last

December, 2019 – Multipliers

January, 2020 – Start with Why

February, 2020 – The Five Dysfunctions of a Team

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La simple corrección de puntaje de crédito que no está aprovechando

Un error o inexactitud en sus informes de crédito personales y / o comerciales puede arrastrar su puntaje de crédito hacia abajo. Eso es lo último que necesita si planea solicitar un financiamiento comercial. Un puntaje de crédito más bajo podría potencialmente resultar en una tasa más alta cuando pide prestado, o puede resultar en que se le niegue el crédito.

Afortunadamente, no tiene que quedarse atascado con el daño de la puntuación de crédito debido a un error. Aquí le indicamos cómo identificar y corregir errores de informes de crédito.

¿Qué cuenta como error?

Los errores de informe de crédito son elementos que se atribuyen erróneamente a su archivo de crédito. Estos pueden incluir:

  • Una cuenta de pago que todavía muestra un saldo pendiente.
  • Cuentas que no te pertenecen.
  • Cuentas con un historial de pagos positivo que se reportan incorrectamente como morosos

El historial de pagos constituye la mayor parte de su personal Puntaje de crédito FICO. Un retraso en el pago reportado por error puede eliminar puntos graves de su puntaje.

Puntuaciones de crédito empresarial, como la Puntaje Dun & Bradstreet PAYDEX, considera también la actividad de pago. Si un proveedor no informa correctamente una línea de crédito, eso también podría resultar en una calificación crediticia empresarial más baja.

Es importante entender la diferencia entre un error de informe de crédito y una marca despectiva. Las marcas derogatorias incluyen pagos atrasados o perdidos y cuentas de cobro; Siempre y cuando sean objetivamente correctos, no pueden ser disputados.

Revisar sus informes de crédito personales y comerciales con regularidad (una vez por trimestre, por ejemplo) puede garantizar que los errores no pasen desapercibidos.

Cómo disputar un error de informe de crédito

La Ley de informes crediticios justos describe un proceso específico para disputar errores de informes crediticios en informes personales. El primer paso es identificar qué oficina de informes de crédito (Equifax, Experian o TransUnion) informa el error. El segundo es presentar una disputa.

Las tres agencias de crédito le permiten iniciar disputas en línea, pero también puede enviar una carta de disputa por correo. Si está enviando una carta, asegúrese de incluir lo siguiente:

  • Tu nombre y direccion
  • La naturaleza del error que estás disputando.
  • Una copia de su informe de crédito con la información disputada resaltada o circulada
  • Cualquier documentación de respaldo que tenga que mostrar que el artículo que está disputando es incorrecto

El proceso de disputa por errores de informes de crédito empresarial es similar, con la diferencia clave de que las disputas deben iniciarse con las agencias de informes de crédito empresarial.

Una vez que envíe una solicitud de disputa, la agencia de informes de crédito tiene 30 días para investigar y verificar su reclamo. Debe notificarle los resultados de su investigación por escrito una vez que se haya completado. Si se determina que existe un error, el error debe corregirse o eliminarse de su archivo de crédito.

Qué hacer si no se elimina un error

En el caso de que una agencia de información crediticia determine incorrectamente que la información que está disputando es válida, hay una cosa más que puede probar: comunicarse con el acreedor o proveedor que informa la información y cuestionarla directamente.

Deberá proporcionar los mismos detalles de fondo sobre el error y lo que está disputando. Si el acreedor se da cuenta de que ha ocurrido un error, debe actualizar su archivo de crédito con información precisa. Tomar este paso adicional podría ayudarlo a corregir o eliminar el error, lo que aumentará su puntaje crediticio en el proceso.


Best Books for Small Business Owners Series: The Five Dysfunctions of a Team

Continuous learning is essential to business and career success. As a small business owner, do you make time to continue developing yourself, considering new ideas and how you might apply them to your business? This is likely a challenge. But, one way to fit learning into your schedule is by reading or listening to great business books; and we’d like to help. With our Monthly Must-Reads series, we share the best books for small business owners.

Not only do we find books helpful for small business owners, but we also aim to save you time. For each book, we share who will benefit from reading it, the book’s key take-aways, and even reader reviews, so you can quickly determine whether it’s worth your valuable time.

This month, we’ll cover The Five Dysfunctions of a Team by Patrick Lencioni. For a list of past Monthly Must-Reads, like January’s Start with Why, check out the bottom of this article.

Business Book:

The Five Dysfunctions of a Team, by Patrick Lencioni

Focus:

How leaders can uncover and address issues that prevent their teams from collaborating and performing successfully.

Main Idea:

Fostering and leading a strong team takes more than a charismatic leader. It takes a leader who’s willing to do the hard work of uncovering and working through conflict, and a team that’s able to honestly identify and work through any issues that stand in the way of success.

Great for Small Business Owners Who:

Struggle with leadership, specifically creating cohesive, trusting teams

Synopsis:

EnThe Five Dysfunctions of a Team, Lencioni takes readers through a novel-style fable illustrating five common issues keeping teams from functioning at their highest potential. In his story, Kathryn is a fictional CEO hired to lead a team of rockstar executive leaders, who excel in their individual roles, but have trouble working together. The reader follows along as she guides the characters to overcome their political and interpersonal drama, all while discussing and addressing each type of dysfunction they exhibit.

After concluding the story, Lencioni outlines the concepts of each dysfunction with an pyramid illustration. He dives into each type of dysfunction, explaining how to recognize and address them. At the end, Lencioni offers a quiz that you and members of your team can take to understand your strengths and weaknesses within the pyramid.

Key Take-Aways:

Managing and working as a team not only takes discipline and communication, but also courage to overcome obstacles that can seem personal. The five dysfunctions teams often experience are:

  1. Absence of trust
  2. Fear of conflict
  3. Lack of commitment
  4. Avoidance of accountability
  5. Inattention to results

Reviewers Say:

“Lencioni shares simple truths about teams that should be more intuitively obvious to everyone. Yet, these things are very easy to grasp while being very difficult to actually practice … without practice. This book focuses on what prevents a good team from forming and describes what’s needed. His companion book [Overcoming the Five Dysfunctions of a Team: A Field Guide for Leaders, Managers, and Facilitators] focuses on the implementation of these ideas but does not stand alone. If you only get one, get this one. The biggest problem I see is that both books are framed about C-level and top-level executive teams. Very few mid-managers would have the leverage and ability to implement all of these principles at lower levels of the organization. It’s definitely possible in some cases, but it would significantly more challenging. His principles are universally true, but his coaching is directed at executives.”

“A must-have in any manager’s toolkit. I have loved this book for awhile and regularly give it on loan. A perfect way to understand the people aspect of team and support managers through what is a common situation. Very cleverly written and full of tools to help get dysfunctional teams moving in a shared direction. Also good for some self-analysis as everyone will identify their own character.”

Monthly Must-Read Business Books:

August, 2019 – Blitzscaling

September, 2019 – The E-Myth Revisited

October, 2019 – Influence: The Psychology of Persuasion

November, 2019 – Built to Last

December, 2019 – Multipliers

January, 2020 – Start with Why

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Joseph Hoelscher: Using Creative Marketing To Help Customers Avoid Your Services

If your marketing helps people avoid needing your products/services, it seems like you might be going in the wrong direction. After all, isn’t the whole point to land more customers? In the right situation, though, this counterintuitive approach can lead to terrific results. Joseph Hoelscher, a DWI lawyer and partner at Hoelscher Gebbia Cepeda, built his marketing campaign on one key concept. They want to stop people from driving drunk so they don’t need services in the first place.

Finding a Legal Specialty

Hoelscher has been practicing law for about 14 years and specialized in DWI for several reasons. “I was good at it, it pays well and unfortunately it happens a lot. Anyone can accidentally have too much to drink.”

After working in this field, Hoelscher has seen plenty of the horrible results from DWI. “I’ve had vehicle manslaughter cases where the outcomes have been just horrific. Clients with serious injuries, losing their kids to CPS, and of course seeing the harm done to victims.”

Even though Hoelscher makes his living from DWI law, he longs to see the day when this is no longer an issue. If it meant him practicing another form of law, he’d do it.

Taking a Different Marketing Approach

Hoelscher felt uncomfortable with how the typical DWI firm handles marketing. “I’d see a lot of ads where the behavior seemed almost encouraged: hire us and you won’t get in-trouble.”

He wanted to try something different while potentially helping with this troubling issue. Hoelscher and his representatives attend events where people are partying and drinking, like San Antonio’s version of Mardi Gras, the Fiesta Festival.

At the event, they’d hand people cards with a code for a free Uber ride. “We’d put our info on the back along with a slogan, “we’d much rather you pay for an Uber than our retainer.” Hoelscher would also give these cards to parents at college events so they could pass along to their children.

Building Loyalty

Hoelscher said the response was overwhelmingly positive. “People would get a laugh and make sure to hold onto our cards.” He noted that humor was a good way to bring up the topic. “At these events, people are out to have a good time. We weren’t trying to judge them.”

Even though Hoelscher tried to cut down on DWI with the free rides, he’d still end up getting clients. “People would call, “ah I should have used your free ride.” Or they’d refer a friend, a family member who got in-trouble.”

Ultimately, Joseph Hoelscher finds clients by showing he cares and it shows how you can drive business by leveraging community engagement.

Seeing Cost-Effective Results

“We’ve also run radio, print, TV, and social media ads. The ROI was better on this targeted, personal outreach.” Hoelscher said they pick events where people are going to be drinking, their target audience, and that definitely helps their ROI versus print, radio and TV where they’re hitting a broader audience.

He also commented that his contrarian approach remains affordable. “We’ve had good success with social media, but the cost per lead had quadrupled over the past few years whereas the cost per lead is still the same for our rideshare campaign.” That’s another benefit of trying something unique, you aren’t fighting for resources with the competition.

Finally, he points out that the rideshare campaign helps get more out of his other marketing. “People take pictures of themselves getting into rideshares and link to our social media. When people see our other ads, they remember ‘oh that’s the guy who helped me avoid drinking and driving.'”

joseph hoelscher

Advice for Other Business Owners

If you’d like to try a similar campaign, Joseph Hoelscher says put yourself in the customer’s shoes. “Where are your customers coming from and what’s getting them in trouble?” In his case, he finds that people often drink and drive not on purpose, but because they didn’t plan on how to get home. His firm gives them that ride home they need.

When customers create problems for themselves, he recommends pointing out the issue, but doing so with humor. “If you engage in nonjudgmental outreach, people appreciate it. You aren’t trying to sell on fear.”

Above all, this style of marketing works. It shows customers you care about them. “I’ve had so many clients say they hired me because I was looking out before they had a problem, not like everyone else who only came knocking after they needed a lawyer.”

 

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Las empresas propiedad de mujeres más interesantes

Aquí está su lista de empresas propiedad de mujeres que han llamado nuestra atención.

Las mujeres en los negocios están cambiando el juego. Con empresas innovadoras en todos los ámbitos, las mujeres de hoy están enfrentando problemas y encontrando soluciones nuevas y únicas que mejoren el mundo que nos rodea. Desde las empresas de medios de comunicación hasta las corporaciones de energía, estas mujeres en negocios están actualizando la forma en que funciona nuestro mundo y nos desafían a todas a mejorar en el proceso. ¡Sigue leyendo para conocer algunas de las empresas propiedad de mujeres más interesantes y de más rápido crecimiento!

Hinchar

S'well fue fundada por Sarah Kauss en 2010. Su objetivo era ayudar a librar al mundo de las botellas plásticas de agua que obstruyen los vertederos y las vías fluviales. Con el objetivo de crear una botella de agua atractiva y ecológica, Sarah y su equipo se dispusieron a hacer su botella de agua moderna, moderna y funcional. Las botellas de agua de acero inoxidable de alta calidad y selladas al vacío sin BPA reducen el plástico de un solo uso en todo el mundo.

Lo que también la hace parte de las mujeres más interesantes en los negocios es que dirige una de las empresas de más rápido crecimiento en los Estados Unidos. Hinchar ha construido su base de fans a través de la promoción de boca en boca. La compañía también se asocia con UNICEF, (RED), American Forests y BCEF para devolver a las comunidades necesitadas, construir infraestructura y brindar educación sobre la importancia del agua limpia en todo el mundo.

Soluciones Xtreme

Fundada por Phyllis Newhouse, Xtreme Solutions es un proveedor de servicios y soluciones de TI. Los objetivos principales de la empresa son analizar los procesos de negocios y diseñar y aplicar sistemas y servicios de administración de información integrados y seguros. Soluciones Xtreme quiere ayudar a distribuir servicios y soluciones de TI y ciberseguridad de próxima generación para empresas de todos los tamaños en los sectores comercial, gubernamental y académico.

Newhouse duplicó los ingresos de su compañía en solo dos años. Una veterana discapacitada, no deja que ningún obstáculo o miedo la detenga, en la vida o en los negocios. El éxito de Xtreme Solutions se debe, en parte, a su negativa a quedarse estancada en el pasado. Promueve el cambio de marca de vez en cuando, lo cual es vital especialmente para una empresa de tecnología, y fomenta la comunicación, la disciplina y la motivación energética de sus trabajadores y sus clientes. Haciéndola una parte única de las mujeres más interesantes en el grupo empresarial.

CATMEDIA

Catherine Downey fundó CATMEDIA bajo el nombre de CATVIDEO en 1997, utilizando su experiencia en producción de televisión, medios y gestión de proyectos. Su objetivo era utilizar formas creativas para resolver los problemas de sus clientes mientras producía productos y servicios de calidad. CATMEDIA se enorgullece de su excepcional servicio al cliente, innovación e integridad.

En 2011, el nombre de la compañía cambió para incluir los servicios de expansión que ofrece la compañía. Se especializan en servicios creativos y producción de medios, gestión de programas, capacitación y gestión de recursos humanos. Downey construyó su compañía mientras cuidaba a su joven familia, y ahora trabaja muy duro para duplicar el cuidado que CATMEDIA brinda a sus clientes. El rápido ritmo de cambio en el mundo de hoy mantiene a los trabajadores de CATMEDIA en alerta, y ha dado sus frutos: CATMEDIA es un líder entre los contratistas de servicios gubernamentales, y ha estado dos veces en la lista Inc. 500 de las empresas privadas de más rápido crecimiento en los Estados Unidos.

Renogia

Un grupo de estudiantes de la Universidad Estatal de Louisiana inició la empresa de energía renovable. Renogia para vender productos solares en línea en 2010. Al principio, vendieron su limitada gama de productos en Amazon, eBay y otros proveedores similares. Hoy en día, venden paneles solares para hogares, empresas, vehículos recreativos y mucho más. Sus productos se fabrican con los más altos estándares de calidad y se venden al precio más bajo posible. También están diseñados para las necesidades individuales de cada cliente. También se ofrecen diagramas de cableado y soporte técnico para que todos los clientes estén informados y bien cuidados al usar los paneles solares Renogy.

Ahora que es una marca reconocida, Renogy ha ganado muchos premios, entre ellos, Mejor Emprendedora o Fundadora (Mujer) del Año en 2016. La fundadora y CEO, Yi Li, encabeza su equipo en la promoción de sus equipos solares para instaladores solares, desarrolladores y propietarios de viviendas.

Además, asegúrate de que mira a una mujer ¡Quién rompió con la tendencia de publicación y construyó una nueva marca de medios en solo 6 años!


7 razones El financiamiento basado en activos podría tener sentido para su compañía de rápido crecimiento

Las empresas de rápido crecimiento pueden tener problemas para financiar una expansión. Pero el financiamiento basado en activos puede ofrecer ventajas sobre los métodos más tradicionales de préstamo de dinero. Esto es lo que necesitas saber.

Cómo funciona la financiación basada en activos.

Imagine que está dirigiendo una empresa de indumentaria minorista y necesita efectivo para hacer crecer su negocio. En lugar de solicitar un préstamo basado en el historial crediticio de la empresa, en lugar de eso, puede solicitar un financiamiento garantizado por el inventario que posee. Los minoristas de ropa generalmente tienen niveles significativos de inventario (vestidos, jeans, etc.) que pueden usarse como garantía de préstamo.

Muchos minoristas también operan como mayoristas para empresas más pequeñas y, por lo general, tienen facturas pendientes de pago pendientes. Las empresas también pueden usar esas facturas para ayudar a financiar sus propias operaciones al contratar a un intermediario conocido como factor. El factor compra las facturas con un descuento a cambio de proporcionar efectivo inmediato.

Aquí hay siete razones para considerar el financiamiento basado en activos.

¿Cuáles son los beneficios de la financiación basada en activos?

Cuando se compara con las formas tradicionales de préstamo, el financiamiento basado en activos puede ofrecer una amplia gama de beneficios, desde menos restricciones hasta ahorros de costos y menos papeleo. Si bien no es la mejor opción para todas las empresas, tiene sentido incluirla como parte de su diligencia debida al seleccionar el mejor producto de financiamiento para su empresa.

Aquí hay siete razones para considerar el financiamiento basado en activos.

1. Costos potencialmente más bajos

Los préstamos basados en activos son préstamos garantizados. Y, por lo tanto, puede ser mucho más barato que los préstamos tradicionales, que generalmente se basan en el historial financiero de la compañía. Si un préstamo se basa únicamente en el historial crediticio de una empresa, se considera un préstamo no garantizado. Como tal, al prestatario se le cobrará una tasa de interés más alta. Esto se debe a que el banco puede estar asumiendo más riesgos cuando hace un préstamo sin garantía.

Las estructuras de préstamos asegurados y no garantizados son similares a los préstamos de consumo, ya que los préstamos hipotecarios pueden ser más económicos que las deudas de tarjetas de crédito. Con un préstamo hipotecario, si no paga su hipoteca, el banco puede recuperar su casa; sin embargo, con la deuda de la tarjeta de crédito no suele haber un depósito de seguridad que respalde el préstamo.

2. Menos papeleo

Si bien obtener un préstamo comercial tradicional puede requerir que documente el historial financiero de las operaciones de su empresa, un préstamo basado en activos probablemente no lo haría. En otras palabras, pedir prestado contra el valor de su inventario podría ser una forma más fácil para que una empresa más nueva obtenga financiamiento que tratando de obtener un préstamo tradicional.

3. Menos restricciones que los préstamos tradicionales.

Muchos préstamos tienen restricciones sobre cómo se utiliza el dinero del préstamo. Por ejemplo, un banco puede preguntarle por qué necesita un préstamo convencional (también conocido como préstamo a plazo porque se otorga por un período específico) y cómo piensa reembolsarlo. Si obtiene un préstamo a plazo y le dice al banco que quiere usarlo para remodelar sus tiendas minoristas, así es como el banco espera que use los ingresos. La buena noticia es que los préstamos basados en activos suelen tener menos restricciones de uso.

4. Condiciones de pago más flexibles

Eventualmente deberá devolver cualquier préstamo al prestamista. Sin embargo, no todos los préstamos son creados igualmente. Los préstamos basados en activos a menudo no requieren que el monto total del préstamo se pague de acuerdo con un calendario fijo, a menudo conocido como un calendario de amortización. Los pagos a plazo del préstamo (incluido el pago del saldo del capital) deben pagarse cada mes. Los préstamos basados en activos suelen tener condiciones de pago más flexibles, lo que permite a las empresas pagar la deuda en el momento más adecuado dado su flujo de efectivo. El resultado es potencialmente una mayor flexibilidad para las empresas que utilizan financiamiento basado en activos.

5. Hojas de balance simplificadas

Si obtiene un préstamo tradicional, el saldo adeudado aparecerá en su hoja de balance. Algunos fondos basados en activos no se registran de esa manera. Por ejemplo, si vendió sus facturas pendientes a un factor a cambio de efectivo inmediato, no habría saldo que mostrar en el balance de su empresa. Todo lo que debe hacer es anotar cómo gestionó esta transacción financiera en una nota a pie de página en los estados financieros. Esto se conoce como Financiamiento fuera de balance.

6. Una buena forma de financiar capital de trabajo.

Las compañías que experimentan un rápido crecimiento pueden tener dificultades para obtener capital de trabajo adicional a través de líneas de crédito revolventes. En el mismo sentido, a medida que aumenta la necesidad de capital de trabajo, su empresa puede tener mayores niveles de inventario y mayores facturas por parte de los clientes. Puede usar el inventario y facturas más grandes como garantía para financiar mayores necesidades de capital de trabajo.

¿Se siente más seguro de su negocio para comprar un préstamo? Antes de empezar a buscar debes entender ¿Qué factores afectan los términos de sus préstamos?.


5 razones clave para pronosticar su flujo de efectivo

Proyectar su flujo de efectivo puede ayudarlo a planificar para el futuro, evitar déficits inesperados e incluso calificar para un préstamo para pequeñas empresas.

Muchos propietarios de pequeñas empresas demasiado extendidos están cansados del análisis del flujo de efectivo. Los "análisis" de cualquier tipo suenan difíciles, y ¿quién tiene el tiempo o la energía para hacer proyecciones futuras? Más importante aún, ¿por qué molestarse en pronosticar su flujo de efectivo?

Tenga en cuenta que el pobre flujo de efectivo es La razón número uno por la cual las pequeñas empresas fracasan.. Un alarmante 82% de las empresas fracasan debido a problemas de flujo de efectivo. ¿Convencido de que no tiene que preocuparse porque su negocio es rentable? Piensa otra vez. Las compañías rentables fracasan todo el tiempo por la sencilla razón de que se quedan sin efectivo.

Más allá de mantener sus puertas abiertas, pronosticar su flujo de efectivo puede eliminar las conjeturas de a dónde se dirige. Tener una buena idea de su dirección puede ayudarlo a tomar decisiones comerciales más inteligentes. Un poco de planificación hace mucho, y no tiene que ser difícil.

Estos días, herramientas intuitivas en línea puede hacer el trabajo duro por usted, generando automáticamente proyecciones de flujo de efectivo basadas en sus transacciones pasadas y su historial financiero. No se requieren hojas de cálculo.

Existen innumerables beneficios al pronosticar su flujo de efectivo, desde evitar caídas en lo negativo hasta planificar para el crecimiento. Considere estas cinco formas en que las proyecciones de flujo de efectivo pueden mejorar su negocio.

Evitar los déficits

Un déficit inesperado puede ser paralizante, y puede tardar meses (si no más) en recuperarse. El flujo de efectivo negativo puede incrementarse si no realiza un seguimiento constante del efectivo que entra y sale. Afortunadamente, los déficits son a menudo evitables con un poco de previsión.

Projecting your cash flow will help you identify — and plan for — market swings, seasonal fluctuations and other business patterns that can lead to unpredictable cash flow. Forecasting can even help you visualize cash flow trends with the help of automatically generated charts and graphs.

Optimizar el tiempo de las cuentas por pagar y por cobrar

En un nivel más granular, muchos problemas de flujo de efectivo evitables a menudo son una cuestión de tiempo. El tiempo de demora significativo entre la facturación a sus clientes o el envío de productos y el pago puede causar una carga innecesaria en su flujo de efectivo.

Las proyecciones de flujo de efectivo que se basan en su historial financiero pueden ayudarlo a anticipar cuándo los clientes le pagarán. Esto le permite escalonar o ajustar de otra manera los pagos salientes a sus proveedores en consecuencia. A su vez, esto puede evitar que te sumerjas en el rojo. Y lo mantiene fuera de la incómoda posición de no poder pagar a sus proveedores o, lo que es peor, a sus empleados.

Demuestre que puede pagar el préstamo que solicitó

 Cuando solicita un préstamo para pequeñas empresas, los prestamistas analizarán su historial de flujo de efectivo en un intento de responder una pregunta principal: ¿Puede este prestatario devolver el préstamo que está solicitando?

Pedir un préstamo de cualquier monto sin mostrar su plan para devolverlo es una buena manera de aterrizar en la pila de rechazo. Esto es especialmente cierto si su flujo de efectivo actual no cubrirá claramente todos sus gastos operativos regulares, más el pago de su préstamo.

Si se encuentra en esta situación, las proyecciones de flujo de efectivo pueden ayudar a fortalecer su caso al mostrarle al prestamista exactamente cómo planea usar sus fondos para llegar a un lugar donde pueda realizar pagos de préstamos fácilmente. Este tipo de pronóstico le permite entregar una hoja de ruta que puede inculcar a un prestamista la confianza que necesita para aprobar su préstamo.

Anticipe el impacto de los próximos cambios

¿Su negocio planea comprar nuevos equipos? ¿Lanzar un nuevo producto? Las proyecciones de flujo de efectivo le permiten obtener una imagen completa del efecto dominó que estos tipos de cambios tendrán en su flujo de efectivo.

Cuando sus finanzas están sincronizadas con FinsyncLas proyecciones de flujos de efectivo se generan automáticamente en función de las facturas futuras, las facturas y la nómina. Luego, puede crear escenarios de "qué pasaría si", como comprar un equipo nuevo. El pronóstico le muestra cómo el costo afectará su balance final. También puede mostrar el aumento potencial de los ingresos generados por la nueva máquina.

Plan para el crecimiento futuro

De la misma manera, las proyecciones de flujo de efectivo pueden ayudarlo a planificar el crecimiento y expansión futuros. Ya sea que esté expandiendo su equipo con nuevos empleados y necesite tener en cuenta el aumento de los costos de nómina, o aumentar la producción para mantenerse al día con el aumento de las ventas, las proyecciones futuras lo ayudarán a ver exactamente a dónde se dirige y cómo llegará allí.

El pronóstico también es una excelente herramienta para establecer objetivos que lo ayudará a planificar los pasos financieros que su empresa necesita para alcanzar sus objetivos. Hay poder en las proyecciones de flujo de efectivo y la perspectiva que pueden proporcionarle a su negocio. Afortunadamente, esta ventaja competitiva viene con poco esfuerzo cuando deja el análisis a las sofisticadas herramientas en línea de hoy.

 

Post invitado por Finsync


Shift Financial Insights: Using Unconventional Humor to Stand Out

It’s tempting to play it safe when it comes to small business marketing. After all, you could risk upsetting potential customers if you try something a little silly or different. But then, every ad starts to look similar to the last, and people will continue to ignore them. That’s why Spencer Sheinin, CEO of Shift Financial Insights, uses a different approach. His accounting firm sees fantastic results from using unconventional humor in their marketing strategy.

Coming in with a different perspective

Sheinin wasn’t an accountant in the beginning. First, he was a serial entrepreneur. Over the years, he ran a contract manufacturer of skin cream products, a construction business and a cold storage business. During this time, he realized accountants and business owners look at the same information, just from very different perspectives.

“Accountants and entrepreneurs are basically speaking two different languages. That’s one of the reasons the typical entrepreneur hates dealing with their books.” It’s no wonder 23% of small business owners feel anxious about their accounting, according to Intuit.

Sheinin launched his firm to help entrepreneurs with their bookkeeping and accounting. But he also wanted to present financial insights in understandable and digestible ways.

Using humor to stand out

Sheinin’s entrepreneurial experience adds extra insight into his target customer persona. He felt that his target audience would appreciate a different style of marketing. Rather than sending out traditionally dry accounting brochures, he weaves in his sense of humor and sarcasm, whenever he can.

In a recent campaign, they sent marketing agency owners a Shift-branded metal straw along with their business card saying, “Some things have to suck. Accounting isn’t one of them.” Sheinin found that a humorous approach works for several reasons.

“The straw-shaped package created a mysterious surprise arriving in the mail. Who could resist opening? Second, it’s designed to make prospects laugh and there’s an immediate connection.”

Creating fun and unique campaigns

Sheinin explains a few of his other ideas that show off his humor. To create buzz for his upcoming book, Entreprenumbers, Sheinin sent copies to influencers along with a pair of socks saying, “For when your socks get blown off.” He’s also sent out yoga mats to prospects with the catchphrase, “We’ll bend over backwards for you.”

In the end, Shift Financial Insights gets more attention when they go against the grain. “Every business sends out Christmas cards and they all get ignored. We don’t and instead send a Valentine card telling our clients how much we love working with them.” Rather than reaching out during traditional holidays, your business may get more attention embracing non-holidays like Festivus, or the Summer Solstice.

Seeing results versus traditional marketing

Sheinin told us that the results from his humorous campaigns have been overwhelmingly positive. “We’ve sent out about 100 straws so far. The conversion rate is around 3-5%, with more still coming in. Even agencies that didn’t need our services called back to say how much they enjoyed the laugh.”

We asked if there were any complaints or negative results, and he said not at all. “Worst case is we just never heard back from a prospect. I’m sure a few packages ended up in the garbage, but no one ever got angry.”

In the past, Sheinin tried traditional marketing, but the results weren’t impressive. “We tried sending out a typical cold message to business owners through LinkedIn asking whether they wanted to talk. We ended up with zero results.”

Shift Financial Insights prefers humor and it seems as though so does their target market. “Assuming that the quality of the work is the same, people would rather deal with a company they can have a laugh with.”

Advice for your own marketing

When it comes to humorous marketing, Sheinin says it’s all about practice. “Every week I try to come up with 10 marketing ideas. I once read if you can’t come up with one good idea, come up with 10 bad ones. You’re searching for the one piece of gold amongst the rubble.” Keep experimenting with humorous ideas and you’ll eventually find one that works.

He also reminds readers that you’re just trying to make the experience more enjoyable for people on the other end. “It’s easy to get too stiff, traditional and wooden, especially with B2B outreach. Don’t forget your ads are being read by people who work at the business.”

Above all, he says don’t be scared to get creative. “If you can approach marketing from a surprise and delight perspective, especially for something that is kind of boring, you can really stand out.” By adding some humor to your marketing, you can improve your results while having some fun at the same time.

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Do You Want to Boost Your Revenue? Try Working on Your Elevator Pitch

A good elevator pitch, either on your website or in person, can help convert customers. A bad pitch can lose them. And it isn’t easy. Just ask James Lawrence, whose company makes advance software system that ensures drone operators stay in compliance with the ever-changing rules and regulations for their airborne devices. “The question was how to winnow that down to a big idea I could present in two minutes that would resonate with people who know nothing about my product,” he says en una entrevista con la revista inc.

Transmitir el sueño de su vida a un extraño, que podría tener un interés fugaz en lo que está diciendo, en un par de minutos, o unas pocas palabras en línea, puede ser un desafío lleno de presión. Aquí hay cinco pasos para crear un lanzamiento de elevador que mantiene la atención de la gente y puede ganar a los clientes e inversores.

Abierto fuerte.

Su línea o título de apertura debe captar la atención del oyente y dejarlos con ganas de más. La experta en pequeños negocios Alyssa Gregory da este ejemplo: ¿Alguna vez se sintió retenido por falta de tiempo y deseó poder clonarse para poder hacer todo, cuando quiera hacerlo, de la forma en que lo quiere hacer? "Si tu reacción es, cuéntame más, Es un lanzamiento ganador.

Cambie su punto de vista. 

Understandably, a lot of people begin their elevator pitch with “I.” But, a better beginning starts with: “You.” Explain the problem you’re addressing and the benefit you offer from the listener’s POV. As Fast Company lo pone: En lugar de decir abiertamente: "Soy un contador", diga: "¿Sabes cómo todos están interesados en maximizar la cantidad de dinero que tienen cuando llega el momento de hablar con el Tío Sam en abril? Eso es lo que ayudo a mis clientes a hacer. Mi nombre es Peter Smith, soy un contador ".

Crea unas pocas versiones. 

En lugar de decir robóticamente el mismo tono de ascensor a todos, tenga algunas versiones preparadas para diferentes situaciones. "Mantenga esa primera frase igual, pero use cinco historias diferentes de éxito para ilustrar cinco razones diferentes por las que los clientes le pagan dinero" dice la asociacion americana de gestion

Deletrea el siguiente paso. 

Un paso de ascensor no debe terminar entre los pisos. Deje que la persona con la que está hablando sepa lo que quiere a continuación, ya sea una venta u otro objetivo.

Pruébate. 

Incluso los actores más hábiles ensayan y escuchan a su director. Practica tu lanzamiento frente a tus amigos y pregunta su opinión. "Lo que puede parecer claro en tu mente puede parecer un enrevesado, prolongado o fragmentado para un observador externo". dice Consultora Lauren Katen. En línea, prueba diferentes idiomas y mide los resultados.

 

Un paso de ascensor es una herramienta poderosa, pero mitad de los propietarios de pequeñas empresas no tienen uno listo. Y eso puede mantener a un negocio atrapado en la planta baja en lugar de correr hacia el ático.


Leveraging Community Engagement to Drive Business

Your business development and marketing strategy depends on what type of firm you along with your firm’s specific objectives. It’s true that community engagement drives business. For firms in certain industries, aiming to further differentiate themselves by building connections in the community in a variety of ways is crucial. Why? Because interacting with the community can ensure a sizable market for your business offerings. It will help you position your business to stand out.

Identify the need.

Roxann Smithers, Esq. of Smithers + Ume-Nwagbo, LLC co-founded her law firm in 2012. After 10 years of working as an attorney for both large and mid-sized firms, she wanted to go out on her own. “The economy was down and a lot of people were taking buyouts and taking opportunities to start businesses and asking for advice about that process,” Said Roxann. “I thought it would be very interesting to focus on that market. There were a lot of firms that were trying to all fight for business from the big companies.” She noticed there were “many mid-size and small companies that provide services to those big firms, either as suppliers or as subcontractors”. As a result, she asked, “where are they going for quality legal services?”

Similarly, other service providers and retail entities have significant competition. Therefore, focusing your target will help you narrow your client base and better target your marketing efforts.

Align your strategic skillset with your target market’s needs.

Smithers states, “I had some experience as an outside general counsel for a small business. I liked the variety of work.” Instead of working with one firm, however, she wanted to serve multiple clients. She thought that if she could get one or more attorneys from complementary disciplines to join her, the new firm could provide these services. “We would serve as their outside general counsel and hit the main topics: dispute resolution, traditional corporate work as well as employment law and employee benefits.”

“I knew two attorneys who could work in those areas. I thought, if we could come together and focus our attention that way, we could bring our big law firm experience and in-house counsel experience and provide that for this middle market.”

Roxanne realized that, despite her expertise, to serve as outside general counsel, she needed a broader range of skills. In her case, she achieved this through courting co-founders. Other existing businesses could identify service or product partners to round out offerings.

Your website connects you with the community.

Smithers knew they had to focus on establishing credibility. As an African-American, female-owned firm, she wanted to establish “credibility and establish how the quality of the services were comparative to going to traditional brick and mortar firms with a bunch of people” who did not look like them. As a result, their first website was very traditional. It was on par with the large firms they had worked for. “That was our experience, and that’s what we thought would resonate”, she says. “As we’ve grown more comfortable, and as we have established our name and our reputation, our second version of our site,” Smithers continues, “is far more conversational. It’s far more relatable. I think it represents our personality even more.”

The website now clearly reflects the firm’s Atlanta metro area connection. The photos are from a field trip she and her partner took in different parts of their beloved city. The website is typically the first place that people go to research the firm before contacting them. Displaying the firm’s personality and their connection to the Atlanta area makes them more appealing to prospective clients.

Group of women holding banner.

Community engagement drives business… and is an effective marketing tool.

Smithers says that Smithers + Ume-Nwagbo’s community outreach first began because “we just noticed that so often people don’t necessarily have a base foundation of understanding the legal impact to their business, what it means to have a business attorney and what a business attorney does beyond solving a problem”. They decided that educating prospective clients would help increase the amount of clients that use them as outside general council.

Since they didn’t want to spend all their time seeking education opportunities, a key “marketing tool was to partner with entities that service business owners”, Smithers says. They sought out entities with similar missions. For nonprofits focused on helping entrepreneurs, Smithers and her partner provide legal and business coaching and mentoring.

In addition to coaching and mentoring, they speak and present panels at events, too. According to Smithers, “They’re going to have an audience. They need content to showcase their value to their membership,” whether paid or free of cost.

“If we can come and provide content for them, we get in front of an audience that we would otherwise have to track down or identify… We get a bit of that seal of approval because they already trust that organization,” she says. This leads to trust from that organization with their firm by the clients or customers in attendance. They’ve presented or spoken on panels for business incubators, small business conferences, womens’ business associations and more.

Further leverage your engagement.

Furthermore, educational presentations support a content strategy. “Once you have presentations on different topics, you can then cut those up into an article… or use those topics with another group,” Smithers adds. The articles help convey their understanding of small business concerns.

The firm continues to extend connections and identify partners and prospects. They do this by participating in select business networking groups, professional associations and chambers of commerce. Also, they obtain referrals from other lawyers and professionals by frequently making referrals to them for other endeavors.

Roxann Smithers participate on panel

Education is now a service.

Last year, Smithers realized she enjoys speaking and educating. As a result, her firm added education as a service. She says, “I would love to be in a position where 20-25% of our revenue comes from legal education and speaking opportunities. And what I’d really like to see is that be a combination of speaking on traditional legal business topics” and on their “experience as business owners and as entrepreneurs.” She continues, “I think we are two incredibly compelling and dynamic women who are, while practicing law, experiencing all of the things that you face as a business owner, as an entrepreneur, and as women of color.”

To market this service, they prepared a one-page summary and are launching a YouTube channel. They want to build up credibility and trust with “the business owner that’s looking for that relationship…with a business attorney.” Smithers says, they also want to showcase their “ability to speak and to translate complex issues in a relatable fashion.” They intend to create a sizzle reel for pitching at conferences and different engagements.

Community engagement drives business for Smithers and her firm on all levels, and has done so since the beginning. Although the type and scope of engagement changes as her firm grows, it continues to deepen.

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How to Get Funding That is Best Fit for Your Small Business

Small businesses (SMBs) are at the core of the US economy. They are the largest employer in almost every sector.  Despite this, it has been proven to be extremely difficult for business owners to find favorable financing to sustain and grow their business.  In fact, many have found that it is far more difficult to finance their operation than it is to run it.

How to choose the right funding option

Recently, a business owner asked me about which type of financing was best for him.  The obvious answer is: the type of financing for which you will qualify.  This will set the tone for your capital search. Obviously, the primary goal is to find the type of financing that offers you the most money for the lowest cost and the longest repayment terms – with the fewest downsides. The reality is that this set of terms will vary wildly depending upon the credit quality of the applicant.  A problem for many SMB owners is that they develop a preconceived notion of what their financing SHOULD look like as opposed to what it will REALLY look like based on the credit quality of the borrower.

Lo primero que debe hacer al iniciar su búsqueda de financiamiento es hacerse una pregunta: Soy financiable? Este es un término amplio que indica si puede ir a su banco y obtener un préstamo o financiamiento de equipo bajo los términos tradicionales o con el beneficio de una Garantía de la SBA. En mis años de experiencia en finanzas comerciales y como propietario de PYMES, puedo decir que la gran mayoría de las PYMES NO son financiables, incluso cuando han escuchado a su banquero decir que podrían obtener un préstamo. Los términos para el financiamiento tradicional rara vez se presentan de manera realista durante el proceso de solicitud y la mayoría de las solicitudes se rechazan porque el prestatario no puede cumplir con los requisitos de la institución crediticia.

Be objective

Lo segundo que debe hacer es recordar ser objetivo y determinar exactamente cuáles son sus posibilidades de aprobación en varios productos y con los diferentes tipos de prestamistas. Debe aceptar que existe un diferencial de precios de riesgo con diferentes tipos de financiamiento y con diferentes prestamistas. Cuanto más fáciles sean los términos de crédito y más rápido, generalmente, la originación delimita una financiación más cara. En muchos casos, vale la pena el costo, ya que otros prestamistas no lo financiarían a cualquier costo.

La tercera cosa que debe hacer es obtener tantas ofertas como sea posible: no se sienta insultado por una oferta de financiamiento, incluso si es oneroso y parece indignante. Siempre se puede pasar. Al evaluar las ofertas, debe recordar que se aplica la Regla de oro de los préstamos: "¡El que tiene el oro - rige!"

Obtaining small business funding that’s best for you

El entendimiento básico de esta guía es que usted ya es un negocio operativo. Las empresas nuevas son una discusión completamente diferente. Entonces, si ha estado en el negocio por al menos 1 año, ¡siga leyendo!

Las opciones de financiamiento de las PYMES cubren un amplio espectro: desde bancos tradicionales, cooperativas de crédito y prestamistas institucionales no bancarios hasta prestamistas no tradicionales, compañías financieras alternativas, plataformas de financiación colectiva y amigos y familiares.

Los bancos, las cooperativas de crédito y la SBA pueden ofrecer tasas más bajas y plazos más largos, pero los obstáculos para obtener uno de estos préstamos son considerables. En el otro extremo del espectro se encuentran compañías financieras alternativas, empresas de alquiler de equipos e incluso sus tarjetas de crédito personales, que comparten todas las mismas características. Son mucho más caros que el financiamiento bancario tradicional, pero están fácilmente disponibles y son mucho más fáciles de obtener aprobaciones. El verdadero valor del dinero está en su disponibilidad. ¿De qué sirve un préstamo del 6% de su banco si no puede obtener la aprobación? Por otro lado, si usted es una empresa de alta calidad crediticia, ¿por qué debería abreviarse para obtener un alto costo de financiamiento?

Veamos si podemos ayudarlo a manejar sus expectativas y brindarle información sobre la perspectiva de los prestamistas.

What do the banks and the SBA want, so I can get funding?

I have spent many years around bankers and have asked a number of them what qualifications are needed for them to consider lending to an SMB owner.  They always offer the obvious response: everyone has their own unique circumstances underwritten at application. But almost every banker I have spoken with talks about the “Five C’s of Credit”.  This is a basic set of criteria that they all use when evaluating a company for a loan:

Capital

Los prestamistas quieren ver que tienes piel en el juego. ¿Cuánto capital duro has puesto en el negocio? No les importa el sudor, quieren ver el dinero. La mayoría de los prestamistas quieren ver entre el 10 y el 40% del capital total en el negocio proveniente de los propietarios. Quieren ver que hay activos duros y blandos de maquinaria, equipo, bienes raíces y algunos incluso considerarán tecnología de TI patentada. Quieren compartir el riesgo con usted, y su inversión asegura que usted también sufrirá si el negocio fracasa.

Collateral 

These lenders are “risk averse”. They want to know that if, for some reason, your business fails to pay back the loan that they can attach assets and liquidate them to offset the debt. This is one of the reasons that they want to see meaningful assets in your company before lending to you. Not all loans require collateral, but if you want favorable terms, you should expect it.  In the case of SBA Guarantees, you will be required to pledge not only the business assets, but all owners holding 20% or more of the business must pledge their personal assets as well.  Homes, cars, cash, jewelry – everything. If you can’t pay back the loan, you could lose everything.

Capacidad 

A lender must have a realistic expectation that the borrower does indeed have the capability to repay. Lenders rely on numerous metrics and factors in determining your “capacity”. First among these is your personal credit score. Even though this would be a business loan, the main driver of an SMBs success is the owner. If you don’t pay your creditors for personal debt, it is a reasonable conclusion that you won’t pay your business debt. To get to the next step with a bank you will need a strong FICO of over 700 with no liens or judgments. The bank will also look to your current vendors for your payment history. Most lenders look for 1.25x or higher, which relates to the big driver of cash flow of the business. If you have cash, then they know you can pay back.

Conditions 

This looks at the reason for the loan and if the bank feels that you will be successful in reaching your goals. The bankers will look at everything from the economic conditions in general to those in your local area. The industry you are in is also a strong indicator of success. The “SIC code” of your business provides risk assessments for your business – and it can work with you or against you. Most importantly, the bank wants to understand the purpose of the loan and if the proceeds will help you grow the business as opposed to adding to your debt load. You will need to provide an explanation for the amount you need, why you needed it, details on how you plan to spend it and the benefits you expect to gain from the loan.

Character 

Este es un factor difícil de evaluar, pero el banco básicamente está tratando de determinar si usted es de buen carácter y se puede confiar en su desempeño. Esto puede ser muy subjetivo y, a menudo, lo determinan los banqueros con los que habla al preparar su solicitud. Quieren saber lo más posible sobre la persona detrás del negocio. ¿Eres un novato o un profesional experimentado en tu campo? ¿Cuál es su fondo? ¿Tuviste logros previos que deberían conocer? ¿Tiene referencias profesionales sólidas de proveedores, clientes o proveedores de crédito? ¿Tiene defectos que podrían influir en el proceso de toma de decisiones, como arrestos, DWI o problemas de impuestos anteriores?

What types of lenders do I have to choose from for funding?

Large Commercial Banks

These are the big guys. You know them – JP Morgan Chase, Citibank, Wells Fargo, Bank of America. These banks all have assets greater than $10 Billion and are large bureaucratic machines. While the largest banks account for about 40% of SMB loans, they do very little lending to Mom and Pop businesses or those that fall within the agriculture industry. Community banks are far more active in those sectors. Large banks are better for bigger, more established companies who seek over $250k in loans. This is their true minimum lending floor – it’s simply not worth their time processing smaller loans.

Mid-Tier Regional Banks

Estos bancos con múltiples sucursales tienen una gran cantidad de poder local y son más receptivos a las necesidades de sus clientes SMB. Tienen bases de activos sólidas pero practican las mismas prácticas de suscripción estrictas que los bancos más grandes. Su conocimiento local hace que sea mucho más fácil comunicarse con ellos y muchos son socios fuertes de la SBA que pueden ser de gran ayuda.

Small Community Banks and Credit Unions 

Estas son las instituciones de base para que trabajen las verdaderas PYMES. Todavía creen en el valor de conocer a sus clientes y su comunidad, y trabajan arduamente para desarrollar fuerza en todos. Aquí es donde se originan la mayoría de los préstamos agrícolas de los Estados Unidos. Sin embargo, a los bancos comunitarios más pequeños les resulta difícil competir y cierran a un ritmo regular. Esto requiere que sean más conservadores, lo que puede influir en el resultado de su solicitud de préstamo. Solo el 40-45% de sus solicitudes de préstamo son aprobadas.

Instituciones financieras no bancarias

Access to these lenders is usually limited to higher growth specialty finance. These groups rarely, if ever, consider Main Street businesses. Large firms like CIT or Apollo will provide multi-unit franchise financing for restaurant or hotel chains, but not loans to single unit operators. These groups include private equity firms, hedge funds, family offices and high net worth individuals. You must be well prepared with strong documentation and the ability to pitch your deal and defend your representations with facts. This is not for financial amateurs or novices.

Alternative Funding Companies 

Over the past 15 years, this has been the fastest growing sector for SMBs to access capital. Factoring companies, merchant cash advance, FinTech online lenders and equipment leasing firms all fall into this category. Most of these companies lend from banks and take on the credit risk for the performance of their clients in return for higher fees.  The main attractions are speed, less documentation and higher approval rates. They will often look for a blanket UCC security agreement over the assets of the company, but do not require the hard-collateral pledges that banks and SBA require to provide loans. Their cost of capital is high because they take considerably more risk to provide financing than banks do.

Crowdfunding 

Crowdfunding appears to have key advantages of being quick and easy to raise funding, but it really isn’t as easy as it appears. First, you need to determine the type of crowdfunding you wish to pursue. Rewards based platforms solicit donations for worthy projects or companies in return for “rewards” that you provide. Debt and equity crowdfunding involves high levels of transparency and reporting as well as time consumption and expense. Many Crowdfunding platforms have specific rules governing time limits and funding goals. If you don’t reach your goal after a specified time, you lose. Or you may encounter an “all or nothing” funding policy, precluding you from accessing capital raised beneath your goal. Some users have been disappointed to realize that often the success of the campaign revolves around their social network. This means that you are really doing a “friends and family” round – but incurring fees.

Corredores independientes 

There has been a dramatic explosion in the number of independent brokers/“finance advisors” who are marketing loans, lines of credit, invoice factoring, receivables financing, cash advances, equipment leasing and other funding products to the SMB community. Some brokers are reputable and can be extremely beneficial in expediting the process of finding financing. They can look at the overall parameters and know where to place the application for fastest approval. On the other hand, there are bad players who are only interested in their own enrichment. Some ask for retainers up front and fail to deliver. Buyer beware. Know who you are dealing with. Look for complaints and ask a lot of questions before trusting your financial information to an unknown outsider.

Friends and Family 

Este es uno de los lugares más comunes donde los propietarios de PYMES buscan capital semilla o capital de trabajo general. Si bien esto puede ofrecer pocos obstáculos para la financiación, ya que se trata de un prestamista familiar y de apoyo, el incumplimiento puede afectar negativamente su relación con estas personas por el resto de su vida.

Personal Savings, Home Equity and Credit Cards 

Before draining your savings, your business plan should reflect cash reserves for funding to carry both you and your business through hard times. Most businesses have ups and downs. The failure to plan for this can be catastrophic. The use of funds from a Home Equity loan or Line of Credit can be a very useful tool. Interest rates are relatively low and the money is not being lent on the qualifications of your business. It is being given to you against the equity value of your home. The downside is that if your business fails, you could lose your home as well. Also, some SMB owners feel it is reasonable to finance their business with their personal credit cards. This can cost upwards of 29% compounded, which is a formula for disaster.

Landlords and Real Estate Developers 

If you have a brick and mortar business and you need to make improvements to the space you are occupying, landlords and developers often provide “tenant improvement allowances” or TIAs for businesses to enhance the overall building. This is usually paid back in the form of additional rent or larger escalations in annual increases. This can be a good way to access capital for betterment and improvements. But sometimes, the escalations exceed the business’s ability to pay.

Wholesalers, Suppliers, Purveyors 

Cada vez que un comerciante / proveedor le extiende los términos para pagar sus suministros, está recibiendo un préstamo de facto. Esto le permite pagar por los bienes después de haber tenido la oportunidad de venderlos a una tasa marcada. También ha habido casos en que los proveedores primarios han hecho préstamos directos o inversiones en pequeñas y medianas empresas que son importantes para su negocio.

Government Business Development Agencies 

Many state and local economic development agencies offer loan programs and grants. These opportunities are often very specific in their requirements, including formal financial statements and reporting. Most have extremely favorable rates.

Ejecutando el Proceso

The search for financing should be run as an organized process. Your first decision should be to target the groups to which you should be submitting applications for financing.  In this process of elimination, the lenders will decide to approve or decline your application. You then must decide to accept an approved offer or continue to shop – or if declined, where to apply next.

Reasons for funding rejection

While each lender or equity investor assesses applications differently, there are numerous reasons why an application for funding is rejected. Below are a few key reasons:

  • Mala calidad crediticia de los propietarios y / o negocios.
  • Estados financieros mal preparados o inexactos
  • La industria es un riesgo de crédito pobre
  • Geografía / Región tiene Desafíos Económicos
  • Documentación insuficiente o inconsistente
  • Flujo de efectivo negativo / ventas insuficientes
  • Gravámenes fiscales y juicios
  • Información negativa no divulgada sobre el negocio o los directores
  • Estacionalidad de negocios / ventas inestabilidad

 It can best to aim high and hope for approval, then work your way down the waterfall. It may be labor intensive, but could provide you with lower cost, longer term and more favorable options. Your goal is to find the best deal you can, but be realistic and objective

Combining a number of approved options into a blended structure can give you a better cost structure. Smaller but lower cost personal or commercial loans can be supplemented with higher cost cash advances and equipment leases. This can give a blended rate that is much lower than the more expensive products.

Do your homework and be realistic in your expectations. Take the application process seriously and be as meticulous as you can, so you can get the best funding for your small business.


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