A-Z Finance - How To Raise Finance For Your New Business

Purchase Order Finance - Your Tool For Unlimited Sales

2007-12-13T06:09:00.002-08:00

Do you sell to the government or to large companies? Do you regularly get purchase orders that stretch your company's ability to deliver? Lastly, if you had financing to cover all your supplier costs, could you sell more? Much more?
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If you answered yes to any of these questions, then purchase order financing could help your business grow.

Purchase order financing is a way of financing sales that has been gaining popularity with US and Canadian businesses. It offers a very simple proposition. If you have an order from a large credit worthy business (or government agency), then the financing company will provide you with the necessary funding to fulfill your supplier payments and make the sale. Call it sales based financing. It works well for resellers, distributors and wholesalers, although it can also be used in other industries.
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Here is how purchase order financing works. Let's say that you own a company that has been getting progressively larger orders, tightening your cash flow. After setting up a purchase order financing agreement, this is how your sales financing would work:
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1. You get an order from a client 2. The purchase order finance company handles up to 100% of your supplier payments (by direct payment or letter of credit) 3. The order is fulfilled and the goods are delivered 4. The transaction is settled, once the client pays their invoices
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As you can see, purchase order financing allows you to leverage the resources of the financing company and allows you to increase your sales. With PO financing, lack of cash flow will never be a reason to lose a sale.
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As opposed to a business loan from a bank, purchase order financing is very easy to obtain and can be set up in days. The main requirement is to have valid orders from good commercial or government clients. Most banks won't offer this type of financing, but you can get it from a factoring company. As a matter of fact, purchase order financing and invoice factoring are frequently combined to help reduce the costs of the transaction.
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So, if your purchase orders are piling up, be sure to consider financing with purchase order funding.

About Commercial Capital LLC Interested in purchase order financing? We are purchase order finance experts can provide you with a purchase order financing proposal. For more information, call Marco Terry at (866) 730 1922 (toll free USA / Canada).

U.S. Jobs in IT Development & Finance Solely Reserved for India

2007-12-13T06:09:00.001-08:00

General Motors Corp. announced in late November 2005 that it will close 9 of its United States auto manufacturing plants as well as three assembly-related plants which includes one location in Canada. Ford Motor Co. followed suit in early December 2005 announcing it is considering the shutdown of up to 8 of its U.S. manufacturing plants, including engine and assembly operations, with one in Mexico. Americans are well familiar with the downsizing, outsourcing and offshoring of the U.S. manufacturing base which has seen 2/3 of its jobs lost in the past 20 years, having been traded in for third world cheap labor. And while white-collar workers have hardly been immune from offshoring practices infiltrating boardrooms, indication this week is that the tide has changed.
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Both the Intel Corp., the world's largest computer chip manufacturer, as well as J.P. Morgan Chase & Co., one of the world's largest financial institutions and 2nd largest in the U.S., are investing in creating new jobs in India over the next few years rather than in the U.S. Different in prior offshoring scenarios, however, is that back-office jobs such as investment banking, software engineering and research and development, previously occupied by American workers, will now originate from India as well.
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J.P. Morgan plans to locate 1/3 of its investment banking and support staff in Bangalore, India by the end of 2007. It will double the amount of its employees by hiring 4,500 graduates over the next two years. 3,000 of the new hires will work in investment banking with 1,500 providing support in its retail and commercial banking operations. There are presently 4,500 employees in front-office staff positions in Mumbai, India.
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With only 200 on staff in India just two years ago, in order to achieve their latest goal, J.P. Morgan will hire between 300-400 graduates a month in order to have 9,000 total positions in front and back-office positions by 2008, which includes complex derivatives settlements and structured finance transactions. The remaining approximately 4,000 - 4,500 employees J.P. Morgan employs will be divided between Bournemouth, England and New York, NY, although the ratio between both countries was not disclosed.
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Similarly, Intel will invest $1.1 billion in India over the next 5 years, with $800 million dedicated specifically for research and development operations and other projects including chip design, also in Bangalore, according to Chairman Craig Barrett. Although Intel will also explore expanding its manufacturing prospects in India, its present investment will largely be for more complex high-value work as opposed to just technical support and call-center jobs, which most IT firms offshore today.
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Other firms following this latest trend are Cisco Systems, the world's largest maker of internet equipment, which announced in October 2005 that it would invest $1.1 billion in India, tripling its work force to more than 4,000 from 1,400 in the next three years. It too will have research and development located in Bangalore. And it is likely that more of the banking industry will soon follow J.P. Morgan's lead such as Goldman Sachs & Co. which may double its staff to 1,500 in Bangalore.
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Microsoft Chairman Bill Gates is expected to invest $400 million in Hyderabad, India where he plans to hire several hundred workers. Gates has been outspoken, with his statement in April 2005, citing that there were not enough U.S. college students majoring in computer science, and thus wants to expand the H1B Visa program, allowing more foreign workers to come to the U.S. But critics believe that Gates and other industry executives are not being honest in their assessments, to wit, the banking industry's India strategy which is hiring finance graduates and not computer science graduates in expanse of their industry.
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In fact, consultants such as Stefan Spohr of AT Kearney estimate that investment banks could raise their staff levels in India to as much as 20% in the next few years. Since salaries in India are 70-80% lower than in the U.S., with total costs about 40% lower than in the U.S., the trend of offshoring will no longer exist. Rather, jobs will now originate from India and totally bypass the U.S.

Disputing the fact that there are not enough quality candidates, for example, in the computing engineering field, is the change in the way in which U.S. engineers are hired. Candidates are not only competing with their peers but also with the fear that they will be replaced by either imported foreign workers or offshore workers, even after they are hired.

Companies are directly contributing to the supposed engineering shortage themselves by requiring that an applicant meet every item on a detailed list of qualifications. Transfer of like-skills is a long lost concept. With approximately 200 responses for every job listing, companies have the luxury to hold out until they get the perfect candidate, as job cuts in technology positions are up 20% in the past year, according to Challenger, Challenger, Gray & Christmas. The unemployment rate for computer programmers and engineers is higher than the national average which does not reflect those who remain unemployed in Silicon Valley as they no longer register for unemployment benefits, nor those who were forced to move on to other careers.

According to Veronique Weill, head of operations at J.P. Morgan's investment banking division, "The quality of the people we hire is extraordinary and their level of loyalty to the company unbeatable," when referring to the hiring of employees in India. Funny, but that's what used to be said about American workers. Perhaps the American worker's biggest error was requiring a decent wage for quality work done. And others would argue that maybe it was their expecting U.S. companies would prefer them over foreign labor. Tragically, greed, under the guise of a global economy was the error, committed not by U.S. workers but by U.S. CEO's, and condoned by the U.S. government.

Copyright (c) 2005 Diane M. Grassi

Diane M. Grassi is a freelance columnist, reporting and writing commentary on current events of the day providing honest and often politically incorrect assessments.

From U.S. public policy to Major League Baseball, she is an eclectic thinker, and demanding of her readers to reflect on their own thinking patterns from an alternative perspective. Whether you agree with her or not, Diane M. Grassi will have you coming back to note her opinions, and if at best she wakes you up, then her goal will have been accomplished.

Ms. Grassi is featured with the online publications: The New Media Journal; American Chronicle; the Federal Observer; Opinions Editorials; the Conservative Voice; the Las Vegas Penny Press; Mich News; the Sierra Times as well as several others. She also writes regular columns on Major League Baseball where she is a featured online columnist with The Diamond Angle Baseball Ezine and Sports-Central.org. She can be reached at dgrassi@cox.net.

The Inferno of the Finance Director

2007-12-13T06:08:00.002-08:00

Sometimes, I harbour a suspicion that Dante was a Financial Director. His famous work, "The Inferno", is such an accurate description of the job that it cannot be otherwise. He is fervently hated by the workers. He is thoroughly despised by the other managers ("mean bastard" is his common nickname among them, mostly for scrutinizing their expense accounts). He is dreaded by the owners of the firm because the powers that he has often outweigh theirs. Shareholders hold him responsible in annual meetings. When the financial results are good - they are attributed to the talented General Manager. When they are bad - the Financial Director gets blamed for not enforcing budgetary discipline. It is a no-win, thankless job. Very few make it to the top and the rest retire, eroded and embittered.
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The job of the Financial Director is composed of 10 elements. Here is a universal job description which is common throughout the West. Macedonia, as usual, is a special case and so I added my own, humble observations.

In the USA there is a function called the Chief Financial Officer. This is the most senior financial manager in the firm and henceforth we will use this title in our article.
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Organizational Affiliation

The Chief Financial Manager (CFO) is subordinated to the Chief Executive Officer, answers to him and regularly reports to him.

The CFO is in charge of:

* The Finance Director

* The Financing Department

* The Accounting Department which answer to him and regularly report to him.

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Despite the above said, the CFO can report directly to the Board of Directors through the person of the Chairman of the Board of Directors or by direct summons from the Board of Directors.

In Macedonia this would be considered treason - but, in the West every function holder in the company can - and regularly is - summoned by the (active) Board. A grilling session then ensues: debriefing the officer and trying to spot contradictions between his testimony and others. The structure of business firms in the USA reflects the political structure. The Board of Directors resembles Congress, the Management is the Executive Arm (President and Administration), the shareholders are the people. The usual checks and balances are applied: the authorities are supposedly separated and the Board criticizes the Management.
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The same procedures are applied: the Board can summon a worker to testify - the same way that the Senate holds hearings and cross-questions workers in the administration. Lately, however, the delineation became fuzzier with managers serving on the Board or, worse, colluding with it. Ironically, Europe, where such incestuous practices were common hitherto - is reforming itself with zeal (see Britain and Germany).
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Macedonia is still after the cosy, very old European model: Boards of Directors are rubber stamps, devoid of any will to exercise their powers. They are staffed with cronies and friends and family members of the senior management and they do and decide what the General Managers tell them to do and to decide. General Managers - unchecked and unbalanced - get themselves involved in colossal blunders (not to mention worse things). The concept of corporate governance is alien to most Macedonian firms and the companies are regarded by most general managers as milking cows - fast paths to personal enrichment.
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Functions of the Chief Financial Officer (CFO):

(1) To regulate, supervise and implement a timely, full and accurate set of accounting books of the firm reflecting all its activities in a manner commensurate with the relevant legislation and regulation in the territories of operations of the firm and with internal guidelines set from time to time by the Board of Directors of the firm.
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This is somewhat difficult in Macedonia. The books do not reflect reality because they are "tax driven" (i.e., intended to cheat the tax authorities out of tax revenues). Two sets of books are maintained: the real ones which incorporates all the income - and another one which is presented to the tax authorities. This gives the CFO an inordinate power. First, he is in a position to blackmail the management and the shareholders of the firm. Secondly, he becomes the information junction of the firm, the only one who has the whole picture. If he is dishonest, he can easily enrich himself. But he cannot be honest: he has to constantly lie and he does so as a life long habit. He (or she) develop a cognitive dissonance: I am honest with my superiors - I only lie to the State.

(2) To implement continuous financial audit and control systems to monitor the performance of the firm, its flow of funds, the adherence to the budget, the expenditures, the income, the cost of sales and other budgetary items.

In Macedonia, this is often confused with central planning. Financial control does not mean the waste of precious management resources on verifying petty expenses. Nor does it mean a budget which goes to such details as how many tea bags will be consumed by whom and where. Managers in Macedonia are still under the feeling that they are supervised and followed, that they have quotas to complete, that they have to act as though they are working (even if they are, in reality, most of the time, idle). So, they engage in the old time central planning and they do it through the budget. This is wrong.

A budget in a firm is no different than the budget of the State. It has exactly the same functions. It is a statement of policy, a beacon showing the way to a better (=more profitable future). It set the strategic (and not the tactical) goals of the firm: new products to develop, new markets to penetrate, new management techniques to implement, possible collaborations, identification of the competition, of the relative competitive advantages. Above all, a budget must allocate the scarce resources of the firm in order to obtain a maximum impact (=efficiently). All this, unfortunately, is missing from budgets of firms in Macedonia (that I have seen).

But the budget is only an amalgamation of the intentions. No less important are the control and audit mechanisms which go with it. Audit could be external but must be complemented by internal procedures. It is the job of the CFO to provide the management with a real time tool which will inform them what is happening in the firm and where are the problematic, potential inflammatory areas of activity and performance.

Additional functions of the CFO include:

(3) To timely, regularly and duly prepare and present to the Board of Directors financial statements and reports as required by all pertinent laws and regulations in the territories of the operations of the firm and as deemed necessary and demanded from time to time by the Board of Directors of the Firm.

The warning signs and barbed wire which separate the various organs of the Western firm (management from Board of Directors and both from the shareholders) - have yet to reach Macedonia. As I said: the Board is full with the cronies of the management. In many companies, the General Manager uses the Board as a way to secure the loyalty of his cronies, friends and family members by paying them hefty fees for their participation (and presumed contribution) in the meetings of the Board. The poor CFO is loyal to the management - not to the firm. The firm is nothing but a vehicle for self enrichment and does not exist in the Western sense, as a separate functional entity which demands the undivided loyalty of its officers. A weak CFO will become a pawn in the get-rich-quick schemes - a stronger one will become a partner in them. In both cases, he will be forced to collaborate, from time to time, with things which conflict with his conscience.

It is important to emphasize that not all Macedonian companies are like that. In some of them, the situation is much better and closer to the West. But there are prevailing senses of geopolitical insecurity (what will be the future of Macedonia), political insecurity (will my party remain in power), corporate insecurity (will my company continue to exist in this horrible economic situation) and personal insecurity (will I continue to be the General Manager). These insecurities combine to breed short-sightedness, speculative streaks, a drive to get rich while the going is good (and thus to rob the company) - and up to criminal tendencies.

(4) To comply with all reporting, accounting and audit requirements imposed by the capital markets or regulatory bodies of capital markets in which the securities of the firm are traded or are about to be traded or otherwise listed.

The absence of a functioning capital market in Macedonia and the inability of Macedonian firms to access foreign capital markets - make the life of the CFO harder and easier at the same time. Harder - because there is nothing like a stock exchange listing to impose discipline, transparency and long-term, management-independent strategic thinking on a firm traded in it. Discipline and transparency require an enormous amount of investment by the financial structures of the firm: quarterly reports, audited annual financial statements, disclosure of important business developments, interaction with regulators (a tedious affair) - all fall within the realm of the CFO. Why, therefore, should his life become more agreeable by it? Because discipline and transparency make the life of a CFO easier in the long run. Just think how much easier it is to maintain one set of books instead of two or to avoid conflicts with tax authorities on the one hand and the management on the other.

(5) To prepare and present for the approval of the Board of Directors an annual budget, other budgets, financial plans, business plans, feasibility studies, investment memoranda and all other financial and business documents as may be required from time to time by the Board of Directors of the Firm.

The primal sin in Macedonia was the so called Privatization. The law was flawed. To mix the functions of management, workers and ownership is detrimental to a firm, yet this is exactly the path that was chosen in Macedonia. Management takeovers and Employee takeovers forced the new, impoverished, owners to rob the firm in order to pay for the shares. Thus, they were unable to inject new capital, new expertise, new management, anything new. The companies are dying slowly.

One of the problems thus wrought was the total confusion regarding the organic structure of the firm. The Board was composed of friends of the Management because they were also the owners - but they could be easily fired by their own workers, who were also the owners and so on. his introduced an incredible amount of insecurity among the management ranks (see previous point).

(6) To alert the Board of Directors and to warn it regarding any irregularity, lack of compliance, lack of adherence, lacunas and problems whether actual or potential concerning the financial systems, the financial operations, the financing plans, the accounting, the audits, the budgets and any other matter of a financial nature or which could or does have a financial implication.

No chance - see my previous points and the previous article. The CFO is absolutely aligned and identified with the management. The Board is meaningless. The concept of ownership is meaningless because everyone owns everything and there is no identifiable owners (except in a few companies). Absurdly, Communism (the common ownership of means of production) has returned in full vengeance, though in disguise, precisely because of the ostensibly most capitalist act of all, privatization.

(7) To collaborate and coordinate the activities of outside suppliers of financial services hired or contracted by the firm, including accountants, auditors, financial consultants, underwriters and brokers, the banking system and other financial venues.

Many Macedonian firms (again, not all) are interested in collusion - not in consultancy. By hiring the consultant or the accountant - they believe that they own him. They are bitterly disappointed and enraged when they discover that an accountant has to comply with the rules of his trade or that a financial consultant will protect his reputation by refusing to collaborate with scams of the management.

(8) To maintain a working relationship and to develop additional relationships with banks, financial institutions and capital markets with the aim of securing the funds necessary for the operations of the firm, the attainment of its development plans and its investments.

One of the main functions of the Macedonian CFO is to be personally connected to the banks. The financial institutions which pass for banks in Macedonia lend money on the basis of personal acquaintance more than on the basis of analysis or rational decision making. This "old boy network" replaces the orderly collection of data and credit rating of borrowers. This also allows for favouritism and corruption in the banking sector. A CFO who is unable to participate in these games is deemed by the management to be "weak", "ineffective" or "no-good". The lack of non-bank financing options and the general squeeze on liquidity make matters even worse for the finance manager. He must collaborate with the skewed practices and decision making processes of the banks - or perish.

(9) To fully computerize all the above activities in a combined hardware-software and communications system which will integrate into the systems of other members of the group of companies.

(10) Otherwise, to initiate and engage in all manner of activities, whether financial or of other nature, conducive to the financial health, the growth prospects and the fulfilment of investment plans of the firm to the best of his ability and with the appropriate dedication of the time and efforts required.

And this, point 10, is what CFOs in the West are doing most of their working time. It is their brain that is valued - not their connections or cunning. Winning the game while acting legally is the foremost tribute and epitaph.

About The Author

Sam Vaknin is the author of "Malignant Self Love - Narcissism Revisited" and "After the Rain - How the West Lost the East". He is a columnist in "Central Europe Review", United Press International (UPI) and ebookweb.org and the editor of mental health and Central East Europe categories in The Open Directory, Suite101 and searcheurope.com. Until recently, he served as the Economic Advisor to the Government of Macedonia.

His web site: http://samvak.tripod.com

How to Finance your Medical Office, Medical Supply or Medical Testing Company

2007-12-13T06:08:00.001-08:00

Although many experts speak of gloom and doom in the medical industry, the fact is that this industry keeps growing by leaps and bounds. Every year, the demand for medical services, medical testing (e.g. MRI Centers, Testing Centers, etc) and medical supplies keeps getting stronger. This trend is expected to continue as the population ages.
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However, even though the growth trend looks good, running a medically related business keeps getting more and more challenging. In the past, doctors and medical suppliers could expect to get large and quick reimbursements for their services. Cash flow was reasonably easy to manage. However, Medicare, Medicaid and 3rd party insurance companies have put in place strict compensation guidelines. These guidelines can be summarized in two simple points: you can look to receive less money than before and you should be prepared to wait longer to get paid.
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This creates a financial "perfect storm" for medical industry companies. On one hand, you are getting paid less and waiting longer for your money. On the other hand, your operating expenses remain the same or perhaps are higher. You still need to pay your employees and your suppliers. In almost all cases, this limits your ability to pursue new opportunities and grow your business. In some cases, it may even threaten your ability to continue to operate your business.
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Is there a way to "fix" the cash flow problem?

If your business's main cash flow problem is not being able to afford to wait 30 to 90 days to get paid by insurance companies and Medicare, then factoring your invoices could be the right solution for you.
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The factoring proposition is very simple. Factoring is a way of financing, in which a factoring company provides you with advance payments based on your outstanding accounts receivable (or invoices). You get funding as soon as you invoice. The factoring funds it and waits to get paid until the insurance companies or Medicare pay the invoices.
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Factoring has advantages over loans and lines of credit. First, factoring financing lines do not have arbitrary limits. The maximum amount of monthly financing is solely determined by your ability to invoice. If your business grows, your financing grows automatically. Also, factoring companies don't require the same collateral that banks do, so new businesses or doctors' offices can usually qualify easily.
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How does factoring work?

The process is fairly simple. Once an agreement is established with a factoring company, it works as follows:

1. Your office submits your weekly (daily or monthly) billings to the insurance company and to Medicare/Medicaid. (note: sometimes this task can be handled by the factor on your behalf)
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2. Your office sends a copy of the billings to the factoring company.

3. The factoring company advances you up to 85% of Net Collectables within 48 hours. Funds are sent by wire or direct deposit. The remaining 15% is called a "reserve" and used to settle billing discrepancies at time of payment. This is returned to you once the invoices are paid.

4. The factoring company waits to be paid by the insurance company or Medicare/Medicaid.

5. Once the factoring company is paid, they settle out the transaction and rebate you the remaining 15%, less their fee.

The advantage of factoring

Factoring is ideally suited for medical offices and testing centers that are growing quickly and cannot afford to wait the usual 30 to 90 days that it takes to be paid by insurance companies or Medicare. It can provide you with ongoing financing, streamline your cash flow, and most of all, relieve the stress of not knowing when you'll be paid.

Copyright © 2005 Commercial Capital LLC All rights reserved. This article may be reprinted, provided the resource box is included with live links

Invoice Factoring Group Invoice Factoring Group (http://factoring.qlfs.com) can provide you with a free medical and doctor office factoring quote. Marco Terry, the president, can be reached at (866) 730 1922.

Medical Factoring: How to Finance Your Healthcare Business Without a Loan

2007-12-13T06:07:00.002-08:00

There are few bigger pains for healthcare industry professionals than having to wait 30, 60 or even 120 days to collect payments from insurance companies, HMOs and Medicare/Medicaid. The healthcare industry is riddled with complex billing, coding and processing rules that create very long payment cycles. This can be very difficult for medical offices, testing and diagnostic centers, medical supply companies, or any healthcare related business, for that matter. There are always many ongoing expenses that can't wait. There is rent that needs to be paid, offices expenses that need to be covered, and payroll that must be met.
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This situation creates a problem for most healthcare businesses. On paper, the business may look very profitable and seem to be doing well. But in reality, most of the money is tied up in slow paying invoices (also known as accounts receivable) with little cash to show for it in the bank.
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When faced with tight cash flow, most healthcare professionals turn to their bankers. Medical doctors can usually qualify for signature loans or lines of credit. Other business professionals are not so lucky. In reality, a loan or line of credit may help you in the short term, but will not solve the main problem. Why? Well, loans are good for buying equipment or large capital expenditures, but not for covering recurring and ongoing expenses. A line of credit is a better solution, but they usually have fixed limits. What happens if the business grows past the limits of the line of credit? Many healthcare professionals usually find out, the hard way, that the bankers that were quite happy to extend the first loan or line of credit will not be so helpful at increasing it. Unfortunately, bankers absolutely hate it when businesses came back to the well for more money.
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If you look at the problem at hand, you will soon realize that the perfect solution should have the following characteristics. First, it should be able to accelerate your insurance payments so that you can get them quickly rather than slowly. Second, the solution should be able to grow with your business. So, if your business grows its billings, the solution should be able to adapt the financing it delivers, seamlessly. Third, the solution should allow you to finance significant growth. Maybe three to five times your current revenues - or more.
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There is a solution that meets these criteria and is available to the healthcare industry. The solution is to factor your medical receivables using a financing tool called medical factoring. Medical factoring allows you to accelerate your payments from insurance companies, HMO's or Medicare/Medicaid. It enables you to receive a substantial amount of your net collectables within days of billing, streamlining your cash flow dramatically.
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Medical factoring, a specialty form of general factoring, allows you to sell your claims and receivables to a factoring financing company. The factoring company buys them - at a small discount - and pays you with immediate funds. The factoring company waits to be paid while you get to use the funds to meet business expenses. As opposed to traditional banking financial products, medical factoring has no arbitrary limits. You can factor or sell as much revenue as you can generate, making it the ideal financing tool for growth.
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However, factoring is not the best solution for every situation. It works best in instances where your main challenge is that you cannot afford to wait to get paid in 60 to 120 days. It helps you meet ongoing and recurring expenses such as rent, payroll and lease payments. Medical factoring is an ideal solution for medical offices, rehabilitation centers, medical testing and diagnostic centers, medical supply companies and small to mid sized hospitals.
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Invoice Factoring Group

Invoice factoring Group can provide you with a medical factoring and medical receivables factoring quote for free. Marco Terry, the president, can be reached at (866) 730 1922

Copyright (C) 2006 - All rights reserved. Article may be preprinted provided it is not modified and all links are kept live.

Invoice Discounting - A Tool To Finance Your Business

2007-12-13T06:07:00.001-08:00

Are your clients taking up to 60 days to pay their invoices? This is a very common situation and a significant cause of stress to many business owners. Unfortunately, having a profitable business does not necessarily mean that you have a reliable cash flow. Quite the opposite, many times a business may have great profits and a very unreliable cash flow.
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How can this be? Simple. Your clients are paying you in 60 days, but you need to pay employees every week, rent and suppliers. Although the numbers may work in the long term, in the short term you are left with very little cash. This is unless you have a lot of money in the bank to cover the deficits.
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But, what do you do if you are new, growing or just don't have a lot of funds in the bank? Get a business loan? Unlikely. Business loans are hard to get. A better option would be to use invoice discounting. Invoice discounting is a form of financing that is not offered by a bank - it's offered by a factoring company.
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Invoice discounting, as it name implies, involves selling your invoices for immediate cash, at a small discount. Its value proposition is very simple. Are you willing discount between 1.5% to 6% from your invoices to get paid now? Consider that many business owners offer a 2% discount to businesses that pay within 10 days. So, invoice discounting offers a similar proposition.
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Of course, invoice discounting (or invoice factoring as it is also called) is not for every business. It works best when your profit margins are above 15% and if you use the accelerated funds to pay for business expenses or to pursue new business opportunities.

Factoring companies always purchase your invoices in two installments. The first installment, referred to as the advance, covers up to 85% of the invoice. The remaining 15% (less the discount) is rebated once the customer actually pays the invoice.
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Invoice discounting is easy to obtain and can be set up in days. The biggest qualification requirement is to have invoices from reliable clients. So, if you are sitting on a whole bunch of slow paying invoices, be sure to consider invoice discounting.
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Commercial Capital LLC

Looking for a factoring company? We can provide you with an invoice discounting or invoice factoring quote in the USA and in Canada. For more information, call Marco Terry at (866) 730 1922

How To Raise Finance For Your New Business

2007-12-13T06:06:00.004-08:00

No matter who you are the banks, business angels or government agencies who are lending you the money all want to know that their money is safe.

Main factors

Poor management skills are the reason 80% of owner-managed firms go under. So this is the first thing that lenders will look at when considering you for a loan. Before they will lend you the money they will want to see that you have a good track record, the expertise and skills to adapt to changing financial and economic circumstances, a good product or a quality service, good financial controls and ideally growth prospects. Above all they want to know that you have the ability to repay the money.
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The Business Plan

All lenders will want to see a business plan. You need to make sure that this is completed correctly as this will explain why you need the money, how much you want and for how long. Including cash flow projections to demonstrate how the loan will be serviced and eventually repaid. Both the business plan and the cash flow forecast also need to be realistic.
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Be Careful

All lenders are sceptical of over-optimistic forecasts. It is better to be cautious. If an accountant has prepared your cash flow forecast, lenders know the figures will all add up. However, they will want to know that you have a real understanding of the rationale behind the figures.
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Projections

Projections are based on assumptions, so you must say what these are. Lenders question everything, it's their job. Many business plans fail to impress lenders because they fail to consider all eventualities or come up with alternative strategies should problems arise. It is imperative that you look at all eventualities and have at least one back up plan.
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Past Performances

Ultimately all lenders have to decide whether or not your proposal is viable, based on your past performance and their knowledge of the market. So if you are an established business, lenders will want to see your annual accounts (ideally for the last three years) to review historic trading performance and identify any trends.
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Your Current Position

All lenders will want to know your up-to-date trading position and to see regular management accounts. They will also want to look at bank statements and VAT returns. Balance sheets represent a one-time snapshot of the business. So lenders may dig deeper to find the real cash-producing capacity and the extent to which any liabilities might become real.
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Your Accounts

The lender will also want to know the true rather than book value of all your assets, should it become necessary to consider a forced sale. Notwithstanding your budgets and cash flow forecasts, lenders will use some basic tools to assess your plans, such as a simple break-even analysis. At the very least, you should be able to provide a rough figure for overheads and other fixed costs, and an assessment of the gross margin expected on sales.
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Lenders concerns

Lenders worry about over-reliance on too few suppliers and/or customers, often a major problem for small businesses. This is where a late payment of a big invoice could destroy your cash flow. And a key customer going bust is often fatal. If this is your situation, your business plan should show how you intend to rectify this weakness.

Security and Commitment

Security is an important aspect of a lending decision although it is never the main factor. It is there to provide a guarantee of repayment should all else fail. Some lenders feel that a director's guarantee supported by personal assets is enough.

Investment and Capital

Lenders like to see owner/managers invest their own money in their businesses. It's also a fallback against potential losses. However, while this may show commitment, it's no substitute for adequate capital resources. Insufficient capital or under-capitalisation are also major contributors to many business failures. So asking for too small a loan may be counter-productive.

Looking at Your Debt Sensibly

Many small businesses rely on an overdraft when they might be better off with something more structured, like a term loan. A lender may even suggest you do not need to borrow at all: factoring invoices, hire purchase or leasing may be better ways of releasing cash.

Lenders' Favourite Tipple

Every lender will look at seven key areas before lending: CAMPARI:

• Character: do you give the impression you will make your plans a reality? • Ability: do you and your people have the right skills and experience? • Means: what are the business's and your own personal assets? • Purpose: what is the purpose of the loan? Is it for a sensible cash-generating plan? Few lenders will lend money to pay debts or to give you a nice pay rise. • Amount: ask for enough money, but not for more than you need. What funds will you put in to reduce the lender's risk? • Repayment: prove you will be able to repay the money with a realistic cash flow forecast. • Insurance: lenders are wary of under-insured businesses. An uninsured loss could destroy you, after all.

If your lender does not ask for all of this information then you should look at another more professional lender.

Brainybusiness.com provides business and personal development resources to help small and growing businesses start, manage and expand their business. The site contains books, articles, free ebooks and resources. Visit: http://www.brainybusiness.com

How to Finance a Franchise for Sell

2007-12-13T06:06:00.003-08:00

Finding a franchise for sell that interests you and is within your price budget has never been so easy. With the amount of resources that are available to the public these days, it is almost impossible not to find a franchise that fits your criteria. The difficult part for many is determining how to finance the franchise for sell.
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When determining where to find the money to buy a franchise, it is recommended to first talk to the franchisor. Almost all U.S. franchisors provide debt financing only, while some carry the entire loan through their own finance company. Some franchisors offer loans based on simple interest, no principal, and balloon payments that are due 10 years down the road.
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Many times the equipment and inventory make up 25%-75% of the start-up costs. It is important to talk with the franchisor to see if there is any way they can make an arrangement with leasing companies to have the starting equipment leased to get the business running. A business is franchised to raise capital and expand the business. Franchisors know that many people can not simply write a check to pay for the full start-up costs, so franchisors are very negotiable and willing to help you get the business up and running.
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If you are unable to finance from the franchisor, then you will need to find other routes to get the money needed to buy the business for sell. It is important to remember when asking for money that you are involved in a selling situation. The more money you ask for, the more the people you are asking money for will want to know about your ideas. It is important that you have a sales pitch to show them you have done the necessary research and have a business plan. They are looking at how investing in your business will help them make money.
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If you have a substantial amount of knowledge in the business franchise for sell and have a good credit record, it will make it much easier to get the money. It is extremely important that you put together a business plan describing your stability and how successful you have been in paying off previous obligations. This will assure people that you are trustworthy of paying back the money you borrow.
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It doesn't really matter who you finance from, just as long as you get the money needed to buy the franchise for sell. If the franchisor is no help, then look towards family members and friends. Even taking out a second mortgage loan on a home can be beneficial to help you get the money. Other places to consider include foundations that offer grants, legal investment groups, business associations, and trust companies. The important thing to remember is once you get the loan you can invest in the franchise for sell and begin business, and hopefully soon begin making the money to pay off your loans plus some.
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Jeff Lubthisophon is the owner of Buying-franchises.com and has devoted his efforts to offering useful information on Franchise Opportunities http://www.buying-franchises.com

Where to Get Your Online Finance Degree

2007-12-13T06:06:00.001-08:00

An online finance degree is a wonderful option for individuals who want to go to college, but for whatever reason prefer an online forum as opposed to a traditional classroom. Frequently, those who opt for an online finance degree have busy schedules already because of family and work commitments, and juggling a typical class schedule is nearly impossible. Also, individuals who have disabilities often times opt for an online finance degree simply because it is easier to work straight from home. No matter why you want an online finance degree, there are many options out there for you to choose from.
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The online finance degree is a very popular major, and because of this almost all of the online universities offer the online finance degree. In addition to this, the online finance degree is not only available in bachelors, but also in masters and in some cases PhD. So, no matter if you want just a bachelor's online finance degree or want to get an online finance degree at ever level, the choice is totally yours.
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Paying for your online finance degree is not as difficult as it ahs been in the past, either, because now you can get student loans and choose different payment plans for your online finance degree. Paying for your online finance degree has never been easier.

In addition to this, you will need to decide exactly what you are looking for in the university where you will obtain your online finance degree. The reason for this is because there are so many online university options that range in popularity, accreditation and cost, that you will need to find out which ones offer the best online finance degree for your budget.
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Be sure, however, before you begin studying for your online finance degree that you know your university is accredited and has many successful graduates with their online finance degree.

Jay Moncliff is the founder of http://www.gofinanceonline.com a website specialized on Finance, resources and articles. This site provides updated information on Finance. For more info visit his site: Finance

Finance Career - Finance Job

2007-12-13T06:05:00.002-08:00

Many people are drawn to money. Not just to have more of it (who doesn't?), but to actually participate in the finance industry and make a career out of it.

Did you know that some of the most successful people in finance and investments never pursued finance in college? Did you know many never even went to college? There are people who have built successful careers in investments or the financial industry grew and learned on the job.
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Like I said, there are many branches to this tree. Accountants, CPA's, and analysts must go through significant educational requirements before finding finance jobs. While these careers are built on heavy education and commitment, there are other areas of finance that do not require stringent or specialized education before entering the job market.
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Stockbroker and Financial Advisor jobs

Stockbrokers, Registered Representatives and financial advisors are basically salesmen in the finance industry. That is not to demean what they do, it's actually true. Once you are a licensed stockbroker and working for a firm, you are a phone broker. Many of the top firms will require 2 or 4 year degrees before hiring you for a job, but a finance or investment related degree is usually not required. Many smaller firms do not require college at all. They are looking for brokers with talent, drive and the ability to communicate and persuade. If you can convince the firm that you can earn money, you can get in. There are successful stockbrokers and advisors who make $200,000 or more and many of them were car salesmen, insurance agents, collections salesmen, real estate agents etc. Training is ongoing and most should decide after 6 months or one year whether this is the finance career or job they want.
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The downside to this career, is the compensation you earn. It is largely, if not exclusively - commission or fee based. It's a sink or swim finance career. It is not for everyone, but the requirements are easier, so if you are good at it - you're all set!
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Mortgage Broker Career

When Wall Street began losing jobs in late 2000 and for several years after, many brokers and advisors began careers as mortgage processors or mortgage brokers. The mortgage finance industry was booming. With interest rates low and the economy slower, homeowners were looking to take advantage of the equity in their homes or looking to refinance. People who were in these jobs at mortgage companies made a lot of money. People had needs and the environment was ripe for big business.
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The problem with mortgage finance jobs is that it is a very cyclical business and it relies on constant new business and referrals for the brokers to earn money. If I had my choice overall, getting a job in the mortgage broker business would be one of my last choices. Good times are real good. Bad times are real bad.
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Insurance Jobs and Retirement Finance Careers

With the population of the country living longer and the trend of big companies providing attractive retirement plans on the decline, insurance agents, retirement and estate planners are doing well. Building a finance career and getting jobs in these areas can be very rewarding and the trends are on your side.
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There are many areas of finance and investments. You may end up being a bond broker, a trader, a mutual fund broker or something else. The quickest way into a good investment or finance job or career is to get a job as a financial advisor or broker. You have to put in the time and effort, but the openings are there and the experience you gain working with client investments will serve you very well going forward. Either you make a great career doing just that, or you platform that job into another area that better suits you.

The finance industry can be tough, it is competitive and you must stand out, but it's better than digging ditches - usually!

Good Luck!

Nick Hunter is the President of American Investment Training (AIT) http://www.aitraining.com and the owner of http://www.brokerjobs.com - a finance career information site with job links and educational resources.

Business Finance Degree

2007-12-13T06:05:00.001-08:00

Knowing the differences in managerial practices in different countries is interesting. There are, for example, great differences among mangers in the United States as opposed to other countries. With the increasing investment of foreign firms in the United States, the syllabus of business finance is giving more attention to the integration of managers and workers from other countries into American society. This need is highlighted in that the number of inters company transferees has more than tripled from the late 1970's. The Japanese, for example, often find it difficult to be outspoken and direct in interactions with their colleagues and superiors. People from Arabian countries usually find American teaching methods too impersonal. One can learn various approaches used by the managers to reduce culture shock. These include special programs about corporate life in the US, as well as instruction in English, books and movies and tax advice for newcomers.
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International business finance is essential in the curriculum of a business finance degree. The study of international business finance focuses on the operation of international firms in host countries. It is concerned with managerial issues related to the flow of people, goods and money. The ultimate aim is to manage more effectively in situations that involve crossing national boundaries. The environmental factors that affect domestic firms usually are more critical for international corporations operating in foreign countries. Managers involved in international business finance are faced with many factors that are different from those of a domestically oriented firm. Managers have to interact with employees who have different educational and cultural backgrounds and value systems. They must also cope with different legal, political and economic factors. Thus, these environments influence the way managerial and enterprise functions are carried out.
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Business Finance provides detailed information on Business Finance, Small Business Finance, Business To Business Finance, Business Finance Software and more. Business Finance is affiliated with Auto Financing.