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Finance, Financing, Leasing, Lease Opportunities for New, Used Construction Equipment Acquisitions

Even though the United States is going through tough credit times, construction finance and lease opportunities are still available for the good credit applicant and not the so the good applicant. We are going to discuss the available construction financing and leasing programs in general to give you an idea that money is still available for start up and seasoned businesses.

First we are going to start with the applicant with great credit. That would be an applicant with 680 or higher credit and time in business that exceeds three years. The applicant should not have any prior bankruptcies and should have low debt ratios. This applicant can qualify up to ,000 to ,000 application only programs. Additionally, this gives the good credit applicant a good opportunity to acquire a great lending rate.

If the applicant seeks more than ,000 to ,000, they will have to provide more documentation to qualify. This would include two years prior years business and personal income tax returns and the summary page of your last three months business bank statements.( high average bank balances are looked at favorable)  A personal financial statement might be required as well as interim financial statements. A copy of the invoice detailing the acquisition would be required as well..

Applicants with personal credit scores between 650 and higher still have a good opportunity to acquire their desired acquisition. They should have a minimum of three years in business without prior bankruptcies. Low debt to income ratios are also looked at favorable. Additionally, some lenders still might offer application only programs and anything beyond the minimum application only levels would require the same documentation as above.

Applicants with Credit scores between 600-650, there are many lending programs available without perfect credit. Even though there may be some dings on the applicant’s credit, there are still finance and lease opportunities out in the financing market. There won’t be application only programs but plenty of lenders will look at you. Once again, strong healthy bank balances with time in business with profitable operations showing on your tax return is a big plus… Usually, full documentation information is required. The front money in these financing programs can run anywhere from 10-20% where as the first two programs can run as low as the first two payments..

There are other lenders that are not credit driven at all but look at the free and clear assets that are available to the lender. Most lenders like bulldozers, trucks, excavators, etc that have retained a good value. These are cash poor applicants but have good qualified assets that the lender will qualify. These lenders have their own formula to work out a lending base. One should call to find out the particular details (Copies of free and Clear Titles are required)

In the prior better times, there were many application only programs up to 0,000 and 0,000. This meant there were no financial statements, tax returns or bank statements required. Today, there are less application only lending programs available, or the available programs require more information and their rate factors are higher than before. Due to problems in the construction industry, many lenders have gone back to more conventional lending requirements. .

These leasing and financing  changes have a tremendous impact on normal business for marginal credit buyers, start up businesses and more mature businesses. One interesting area that has arisen out of this economic downturn is dealer/special financing. With all the repossessions in the market place today, buyers still have a unique business opportunity to acquire a repossession with a credit score as low as 550.  Used and new construction equipment repossessions can be obtained with very little or no money down, sixty months to repay, regardless of age, and more favorable financing terms than conventional construction equipment financing.

construction finance, construction equipment finance, equipment finance, used construction finance, used construction equipment finance, construction lease, lease construction equipment, finance construction, construction financing, leasing construction. U.S Corporate Capital Leasing assists the start up and seasoned business for finance and lease opportunities fpr new and used construction equipment.

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nationstar home loan

Our experience, strength and stability made us one of the leading mortgage companies in the nation. We truly understand the real estate business and are committed to helping our partners succeed.

Every Individual requires a monetary backup when it comes to investing in financial endeavors which are great and also very inescapable. Self financing all your needs is very difficult and it is barely possible to mange these dream investments all by self. Whatever it is ranging from a new property to even getting a car or establishing/ expanding the business to property development finance, financing is the best option that one should opt for fulfilling all these requirements.

Well this may sound good but the most difficult part is to hit upon a reliable financing option which can be opted for finance needs as the competitiveness is increasing and the values of authenticity are diminishing all across the finance industry. Thinking about this people usually cannot decide upon which option is reliable and which option cannot be taken up for this intricate task. Above this it is all in all even more difficult to find a company that is keen to meet up to your requirement without implicating the different requirements on their side that can drive you vexed about the decision you have taken.

Many financing firms make this procedure very complex and time consuming over this if the requirement are not properly fulfilled then you can disqualified for the finance. All these issue make financing all the more irritating therefore the question is that how can one fulfill the financing needs without these delays, and complexities that can ruin the positivism towards the undertaking. In such a situation there are some exclusive companies that make financing a stress free job for the undertaker. Theses companies understand your requirements and also know that the money you need is out of a big decision you have undertaken which may mean lots in your life.

For this reason these companies provide tailor made finance options for various aspects that may include development, bridging, property finance, structured finance etc.

The provide various flexible choices which can be very detrimental to the overall procedure like finance availability for people engaged in different kind of market sectors, like manufacturing, retail, leisure farming, professional practice or services and also cheaper interest rates. All these provisions make it possible to have perfect financing solutions for any kind of necessity. Something that is very common is that people who hold business face immense troubles in getting their projects financed but there are certain financing firms that provide the best possible terms available in the commercial sector.

Simply because most folks do not have cash to purchase new cars, it’s frequently a option involving leasing and utilizing an car loan. We will further analyze the advantages of every sort of car finance choice. The option which you make will heavily affect your income around the next many years. The 1st thing you must recognize is the fact that the choice of buying with cash or lease doesn’t entail just the money facet, however the time aspect also.

The car finance choice you choose depends on the importance you give to proudly owning a brand new car. In the event you worth having the latest models on the market, then this will justify spending much more cash on this privilege. If your see of the car is orientated in direction of transportation and comfort (you want a car for sensible factors), then owning the most recent model really should take a couple of steps again in your precedence checklist. You need to think about these facts first and then take into account the more tangible issues of car finance alternatives.

The car finance deal that you are going to make starts when the salesperson asks you what kind of car finance option you would like to use. Your reply may be one of the following: purchase the car, lease the car or pay cash for that car.

In the event you want to get the car, the vendor will ask you to fill inside a credit score software primarily based in your credit scores. An car loan will probably be arranged via the dealership. This car finance option generally is a 36-60 month endeavor. The longer the time the reduce the payments will probably be. The quantity of funds you spend for this car finance alternative depends on your interest rate, down payment and complete sum of mortgage. Also be careful, because the seller will want you to make a big down payment. This car finance deal is determined by the reality that, till you shell out for the car, the lending establishment will personal the car. The car’s ownership papers will probably be despatched to you after all payments have been made.

You can find some essential aspects about car leasing that make it attractive to clients, like: minimal month-to-month payments, reduced down payments and minimal upkeep expenses. The principal benefit is the fact that a buyer will get a car with out giving also a lot cash at once. The month-to-month payments are stored at a very low degree, lower than buying car with an auto loan. An additional advantage of this car finance choice is the fact that the car may have a three year guarantee and is going to be covered for mechanical failure during this period. As you are able to see by now, this appears very attractive and inexpensive by anyone, but there is a slight drawback (the same as within the situation of a loan). You’ll have car payments till the whole sum from the car is compensated. Only whenever you do that, the car will lastly be yours.

From this level on the car finance deal will probably be more than and should you need to start leasing once more the assumed responsibility of payment rates will last a lengthy time period once more. The conclusion is that this car finance choice (utilizing the leasing approach) is much more pricey on the lengthy phrase. Car leasing is in fact the most costly method to go, but those who favor it indicate that about a ten year interval this car finance approach is the very best the average revenue customer can help.

If you are interested in leasing, this car finance option has some variations. All automobile leases permit you to drive the car for any limited number of miles per yr. The a lot more you drive, the increased your payments will probably be. Nevertheless, in case you come to think of it, you conserve cash inside the long run. The contract will contain a residual price for the car, which you’ll spend with the end from the lease because the car passes into your possession. Be careful because this is the riskiest car finance deal of them all!

In case you determine to spend money for the car the transaction everything is going to be quite easy. It is the most favorable car finance deal if your earnings can support these a large transaction. Negotiating using the supplier will most likely make this car finance choice even a lot more attractive. Select wisely as every car finance provide has its very own ups and downs, and each car finance firm will try to persuade you into taking their option into consideration.

When buying a car, a lot of money is involved. According to the spending budget you’re prepared to spend there will probably be a car finance choice for your liking. A compromise has to be created: 1 can both spend a lot at as soon as, or invest a higher sum during a longer period of time. Your car finance option will affect your pocket anyway; it’s only a matter of how much funds will be given in how a lot time.

Purchase Order & Letter of Credit Financing

Purchase Order & Letter of Credit Financing

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Home Page > Finance > Purchase Order & Letter of Credit Financing

Purchase Order & Letter of Credit Financing

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Posted: Jan 29, 2007 |Comments: 1
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Many business opportunities come with an associated challenge. For most entrepreneurial businesses, the greatest challenge is financing the business opportunities created by your sales efforts. What are your options if you have a sales opportunity that is clearly too large for your normal scale of operations? Will your bank provide the necessary financing? Is your business a startup, or too new to meet the bank’s requirements? Can you tap into a commercial real estate loan or a home equity loan in sufficient time to conclude the transaction? Do you decline the order? Fortunately there is an alternative way to meet this challenge: You can use Purchase Order Financing & Letter of Credit financing to deliver the product and close the sale.

What is purchase order financing?

Purchase order financing is a specialized method of providing structured working capital and loans that are secured by accounts receivables, inventory, machinery, equipment and/or real estate. This type of funding is excellent for startup companies, refinancing existing loans, financing growth, mergers and acquisitions, management buy-outs and management buy-ins.

Purchase order financing is based upon bona fide purchase orders from reputable, creditworthy companies, or government entities. Verification of the validity of the purchase orders is required. The financing is not based on your company’s financial strength. It is based on the creditworthiness of your customers, the strength of the commercial finance company funding the transaction, and in most cases a letter of credit.

What is a letter of credit?

A letter of credit is a letter from a bank guaranteeing that a buyer’s payment to a seller will be received on time and for the correct amount. If the buyer is unable to make payment for the purchase, the bank is required to cover the full amount of the purchase. In a purchase order financing transaction, the bank relies on the creditworthiness of the commercial finance company in order to issue the letter of credit. The letter of credit “backs up” the purchase order financing to the supplier, or manufacturer.

Is purchase order financing appropriate for your sales program?

The perfect paradigm is a distributor buying products from a supplier and shipping directly to the purchaser. Importers of finished goods, exporters of finished goods, out-source manufacturers, wholesalers and distributors can effectively use purchase order financing to grow their businesses.

Is purchase order financing appropriate for growing your sales orders?

Purchase order financing requires you to have management expertise- a proven track record in your particular business. You must have bona fine purchase orders from reputable firms that can be verified. And you must have a repayment plan; often this is from a commercial finance company in the form of accounts receivable or asset-based financing.

You should have a gross margin of at least 25% to benefit from purchase order financing. Sellers of services or commodities with low margins, such as lumber or grain, will not qualify.

The bottom line decision for purchase order financing:

It can take two or more years to develop a profitable business. Banks generally base their lending limits on a business’ performance for the past two or three years. Purchase order financing, combined with letters of credit and/or accounts receivable or asset-based financing can give you sufficient funds to cover your operating costs, financing costs and still realize significant profits. If you qualify for purchase order financing, you can grow your business by taking advantage of large purchase orders and eventually qualify for bank financing.

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Gregg Elberg -
About the Author:

Mr. Elberg is a licensed attorney and licensed real estate broker. Gregg Financial Services is a full service brokerage for commercial finance companies and banks that fund B2B businesses. Mr. Elberg arranges funding from ,000 to million per month at competitive pricing, and works to reduce your financing costs as your company grows. For more information about GFS, please visit our website: www.greggfinancialservices.com

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What should be on a purchase order ?
Do Letter of Credit for importing items & services take into account the tax implications on foreign company before finalizing the contract?
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Article Tags:
commercial finance, purchase order financing, accounts receivable financing, letter of credit, cash flow, working capital

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1. adegbite seun titus 09/01/2009

my company just registered with some multinational oil companies in Nigeria.i want to know if am qualify for purchase order finance.what are the procedures?thanks

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Financing Options for Import Companies

Financing Options for Import Companies

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Home Page > Business > Small Business > Financing Options for Import Companies

Financing Options for Import Companies

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Posted: Feb 25, 2007 |Comments: 0
| Views: 851 |

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Whether you are starting an import business or have an established importing business, it can be a very profitable venture if you have the right financing to grow your business. Imports are defined as: a good that crosses into a country, across its border, for commercial purposes; a product, which might be a service that is provided to domestic residents by a foreign producer; or a combination of the two.

Starting or running an import business has never been more profitable because of computers, the internet, and the availability of low cost imports from countries such as China and Mexico. These imports may be resold for up to ten times their cost depending on the competition in your field of operations.

It is essential that you have good, honest suppliers plus creditworthy customers with purchase orders for your imports. If you have the right financing, your business can grow exponentially. But how do you finance growth if your own resources or bank lines of credit are not sufficient to take advantage of big opportunities? A combination of purchase order financing, accounts receivable financing with inventory financing may be the solution.

Definitions:

Purchase Order Financing

Purchase Order financing is the assignment of purchase orders to a third party, a commercial finance company, who then assumes the obligation of billing and collecting. Purchase order financing can be used to finance all current and subsequent orders to improve your company’s cash flow. The process works as follows: 1) Your company obtains a purchase order for products to be sold another company; 2) A letter of credit may be issued, based on a finance companies’ credit, to guarantee payment to suppliers or factories producing the goods; 3) The order is shipped, delivered and accepted by your customer; 4) The customer receives an invoice for the goods; 5) The Purchase Order Company pays the supplier/factory; 6) a commercial finance company or Accounts Receivable Finance Company pays the Purchase Order Financing Company after the products are delivered to your customer; 7) The customer pays the commercial finance company for goods received; The accounts are settled and the profit is paid to you.

Accounts Receivable Financing

Accounts Receivable Financing is the selling or pledging of your company’s account receivable, at a discount, to a Factor, a Commercial Finance Company or to an Accounts Receivable Financing Company who may assume a risk of loss. You receive a portion, usually 80% to 90% of the face value of your receivables in advance of payment from your customers in return for a fee, or interest, to be paid to the commercial finance company. When the commercial finance company is paid by the customer, the appropriate fees are deducted and the remainder is rebated to you. “Accounts receivable financing” is also called accounts receivable factoring, factoring financial services, invoice factoring and cash flow factoring. The terms are used to convey the same meaning.

Inventory Financing

Inventory financing is a loan secured by the inventory of your business. Inventory finance enables import companies to hold more stock without cash flow strain and to generate more sales. Inventory finance is often part of a Purchase Order and Accounts Receivable Financing commercial finance package.

These three types of financing can enable an import business to increase purchasing capabilities dramatically; you can accept larger orders and grow your business exponentially. You can use your inventory to leverage your purchasing power. You can use your customer’s credit to obtain these three types of financing; and you can use the commercial finance company’s credit to obtain a letter of credit.

The concept of financing your import company with “other people’s money” is part of a safe and sound business plan. Add strong product quality controls, inventory controls, and good accounting to maximize the success of your import company.

Copyright © 2007 Gregg Financial Services

www.greggfinancialservices.com

Retrieved from “http://www.articlesbase.com/small-business-articles/financing-options-for-import-companies-109493.html”

(ArticlesBase SC #109493)

Liked this article? Click here to publish it on your website or blog, it’s free and easy!

Gregg Elberg -
About the Author:

Mr. Elberg is a licensed attorney and licensed real estate broker. Gregg Financial Services is a full service brokerage for commercial finance companies and banks that fund B2B businesses. Mr. Elberg arranges funding from ,000 to million per month at competitive pricing, and works to reduce your financing costs as your company grows. For more information about GFS, please visit our website: www.greggfinancialservices.com or email:gregg@greggfinancialservices.com

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A finance company just bought my friends house back because it was forclosed on and even though she filled out hardship paperwork,they say they never received them what to do to get house back?
Why is it important to keep up with technology as it relates to claims processing?
I want to live for 20 yrs in U.S and earn lots of money . I have two options . one is to do a masters degree in US and other is to go to US through TCS or cognizant like companies . which is better ?

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Article Tags:
commercial finance, purchase order financing, accounts receivable financing, letter of credit, cash flow, working capital, international trade finance, inventory line of credit, international letter of credit

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Bad and Poor Semi Truck, Big Rig, Tractor Semi, Semi Sleeper and Over the Road Truck Conventional Financing

Bad and Poor Semi Truck, Big Rig, Tractor Semi, Semi Sleeper and Over the Road Truck Conventional Financing

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Home Page > Finance > Loans > Bad and Poor Semi Truck, Big Rig, Tractor Semi, Semi Sleeper and Over the Road Truck Conventional Financing

Bad and Poor Semi Truck, Big Rig, Tractor Semi, Semi Sleeper and Over the Road Truck Conventional Financing

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Not many owner operators know there are many bad and poor credit conventional financing programs for semi trucks, big rigs, tractor semi, semi sleeper opportunities available from dealers/lenders. These semi trucks, big rigs are available like any other leases with approximately 30% to 50% due upfront as a down payment. This creates a tremendous buying opportunity for the owner operator with a good driving history but poor credit history. The dealer/lender is more interested in the owner operators references, personal and business, than his past credit. They want to see whom he is leased on with or how he will derive his future income with his new acquisition.

There are many alternatives in obtaining semi truck financing. Whether you are a start up or a seasoned business, the first logical place to investigate your financing is at your local bank. This may be a pleasurable experience if you have many contacts at your bank but most people usually don’t have these types of connections.

The seasoned or fleet operator must have at least mid 600s on their credit scores and be prepared to go through a long paper process. Prior year tax returns are required, current personal financial statements needed, interim financial statements and other banking information pertaining to your business and personal bank balances are required.

The start up business must have a credit score properly 680 or higher and will have a much smaller success rate in obtaining bank financing. The business start up is a much higher risk factor and must adhere to tougher lending standards than the seasoned or fleet operator.  .

The types of semi trucks we are talking about are Freightliners, Internationals, Kenworths, Mack, Peterbilts and Volvos.  The years manufactured are from 1999 to 2006.  There is a good selection of makes and models and gives the owner operator a buying opportunity. This program applies for start ups as seasoned businesses…

The application process is quite simple and the dealership has a vested interest in getting to know you and your driving history. The process of obtaining a semi truck is no different than any other type financing vehicle.

 Happy hunting for you semi truck, big rig, semi sleeper and tractor semi acquistion and its related financing.

 

 CHECK OUT THIS SPECIAL CONVENTIONAL FINANCING FOR CUSTOMERS WITH POOR AND BAD CREDIT

Our Easy Qualify Semi Truck Conventional Financing Credit Program:

  YOU PICK OUT YOUR SEMI TRUCK ..MAXIMUM FINANCING ,000

  SEMI TRUCK, BIG RIG, SLEEPER TRUCK 2005 OR NEWER

 

Prior Bankruptcy Ok
First Time Owner Operator Ok
Little Driving Experience Ok
Low Fico Score Ok
Past Credit Problems  Ok

 

The lender can overcome all these credit deficiencies with good down payments or additional collateral. (*additional collateral = Title’s to trucks or trailers owned free and clear) For difficult credits, we look for 30-50% down – The larger the down payment, the easier the approval. 

 

What the lender needs to get you a quick response:

Any standard credit application
.Spec. sheet including full vin. number and ecm mileage
 Price of the truck, include tax and license if applicable
Copy of customer’s drivers license

 

How the lender process works on approved applications:

1. You submit a customer
2. We will fax you a proposal outlining the terms – Generally within 1 hour
3. You send us an invoice
4. We email you a set of loan documents – same day
5. We will fund you the same day that we get back signed documents and insurance.
6. With the applicants cooperation we can finish a deal in two business day. Our goal is to get you funded as quickly as possible.

Trailer Financing:

We can finance trailers in two ways. either with 50% down payment or with ~20% down payment but with the title to a Truck as additional collateral. The customer must have title, to a 2003 Truck or newer, owned free and clear that they can pledge as collateral.

 

Lender Conventional Financing Limitations:

,000 Max fund amount
Applicants with large outstanding tax liens (,000+)
More than ,000 in outstanding credit card debt
Currently in Bankruptcy, if discharged – OK
 ·  Repossessions on credit report

 

 

 

Retrieved from “http://www.articlesbase.com/loans-articles/bad-and-poor-semi-truck-big-rig-tractor-semi-semi-sleeper-and-over-the-road-truck-conventional-financing-3666937.html”

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Rick Reiff -
About the Author:

Rick is a broker and has numerous financial experience in the accounting and finance   He works with various semi truck, tractor semi, and  big rig lenders through out the U.S .

U. S Corporate Capital Leasing assists the start up and seasoned business for all its truck acquistion and financing needs.

http://www.cclgequipmentleasing.com/semi_trucks.htm

http://www.cclgequipmentleasing.com/trader.htm

 

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Article Tags:
semi financing, tractor semi financing, semi sleeper financing, big rig finance, poor credit truck financing, bad credit truck financing, truck financing, truck finance, over the road finance, financing a semi, financing a tractor semi, trucks financing

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Bad and Poor Semi Truck, Big Rig, Tractor Semi, Semi Sleeper and Over the Road Truck Conventional Financing

Not many owner operators know there are many bad and poor credit conventional financing programs for semi trucks, big rigs, tractor semi, semi sleeper opportunities available from dealers/lenders. These semi trucks, big rigs are available like any other leases with approximately 30% to 50% due upfront as a down payment. This creates a tremendous buying opportunity for the owner operator with a good driving history but poor credit history. The dealer/lender is more interested in the owner operat

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Accounts Receivable Financing- Don?t Worry, be Happy

Accounts Receivable Financing- Don’t Worry, be Happy

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Home Page > Finance > Accounts Receivable Financing- Don’t Worry, be Happy

Accounts Receivable Financing- Don’t Worry, be Happy

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Posted: May 30, 2007 |Comments: 0
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There is a reason why accounts receivable financing is a four thousand year old financing technique: it works. Accounts receivable financing, factoring, and asset based financing all mean the same thing as related to asset based lending- invoices are sold or pledged to a third party, usually a commercial finance company (sometimes a bank) to accelerate cash flow.

In simple terms, the process follows these steps. A business sells and delivers a product or service to another business. The customer receives an invoice. The business requests funding from the financing entity and a percentage of the invoice (usually 80% to 90%) is transferred to the business by the financing entity. The customer pays the invoice directly to the financing entity. The agreed upon fees are deducted and the remainder is rebated to the business by the financing entity.

How does the customer know to pay the financing entity instead of the business they are receiving goods or services from? The legal term is called “notification”. The financing entity informs the customer in writing of the financing agreement and the customer must agree in writing to this arrangement. In general, if the customer refuses to agree in writing to pay the lender instead of the business providing the goods or services, the financing entity will decline to advance funds.

Why? The main security for the financing entity to be repaid is the creditworthiness of the customer paying the invoice. Before funds are advanced to the business there is a second step called “verification”. The finance entity verifies with the customer that the goods have been received or the services were performed satisfactorily. There being no dispute, it is reasonable for the financing entity to assume that the invoice will be paid; therefore funds are advanced. This is a general view of how the accounts receivable financing process works.

Non-notification accounts receivable financing is a type of confidential factoring where the customers are not notified of the business’ financing arrangement with the financing entity. One typical situation involves a business that sells inexpensive items to thousands of customers; the cost of notification and verification is excessive compared to the risk of nonpayment by an individual customer. It simply may not make economic sense for the financing entity to have several employees contacting hundreds of customers for one financing customer’s transactions on a daily basis.

Non-notification factoring may require additional collateral requirements such as real estate; superior credit of the borrowing business may also be required with personal guarantees from the owners. It is more difficult to obtain non-notification factoring than the normal accounts receivable financing with notification and verification provisions.

Some businesses worry that if their customers learn that a commercial financing entity is factoring their receivables it may hurt their relationship with their customer; perhaps they may loose the customer’s business. What is this worry, why does it exist and is it justified?

The MSN Encarta Dictionary defines the word worry as:

“Worry

verb (past and past participle wor•ried, present participle wor•ry•ing, 3rd person present singular wor•ries)Definition: 1. transitive and intransitive verb be or make anxious: to feel anxious about something unpleasant that may have happened or may happen, or make somebody do this

2. transitive verb annoy somebody: to annoy somebody by making insistent demands or complaints

3. transitive verb try to bite animal: to try to wound or kill an animal by biting it

a dog suspected of worrying sheep

4. transitive verb

Same as worry at

5. intransitive verb proceed despite problems: to proceed persistently despite problems or obstacles

6. transitive verb touch something repeatedly: to touch, move, or interfere with something repeatedly

Stop worrying that button or it’ll come off.

noun (plural wor•ries)Definition: 1. anxiousness: a troubled unsettled feeling

2. cause of anxiety: something that causes anxiety or concern

3. period of anxiety: a period spent feeling anxious or concerned…”

The opposite is:

”not to worry used to tell somebody that something is not important and need not be a cause of concern (informal)

Not to worry. We’ll do better next time.

no worries U.K. Australia New Zealand used to say that something is no trouble or is not worth mentioning (informal)”.

Query: if a business is financing their invoices with accounts receivable financing, is this an indication of financial strength or weakness? Query: from the point of view of the customer, if you are buying goods or services from a business that is factoring their receivables, should you be concerned? Query: is there one answer to these questions that fits all situations?

The answer is it’s a paradox. A paradox is a statement, proposition, or situation that seems to be absurd or contradictory, but in fact is or may be true.

Accounts receivable financing is both a sign of weakness with regard to cash flow and a sign of strength with respect to cash flow. It is a weakness because, prior to financing, funds are not available to provide cash flow to pay for materials, salaries, etc. and it is an indication of strength because, subsequent to funding cash is available to facilitate a business’ needs for cash to grow. It is a paradox. When properly structured as a financing tool for growth at a reasonable cost, it is a beneficial solution to cash flow shortages.

If your entire business depended on one supplier, and you were notified that your supplier was factoring their receivables, you might have a justifiable concern. If your only supplier went out of business, your business could be severely compromised. But this is also true whether or not the supplier is utilizing accounts receivable financing. It’s a paradox. This involves matters of perception, ego and character of the personalities in charge of the business and the supplier.

Every day, every month thousands of customers accept millions of dollars of goods and services in contracts that involve notification, verification and the factoring of receivables. For most customers, “notification” of accounts receivable financing is a non-issue: it is merely a change of the name or addresses of the payee on a check. This is a job for a person in the accounts payable department to make a minor clerical change. It is a mainstream business practice.

Bobby McFerrin wrote and performed a song called “Don’t Worry, Be Happy” for the movie “Cocktails” starring Tom Cruise. The song was a number one U.S. pop hit in 1988 and won the Grammy for Best Song of the Year. Here are the lyrics:

”Here is a little song I wrote

You might want to sing it note for note

Don’t worry be happy

In every life we have some trouble

When you worry you make it double

Don’t worry, be happy……

Ain’t got no place to lay your head

Somebody came and took your bed

Don’t worry, be happy

The land lord say your rent is late

He may have to litigate

Don’t worry, be happy

Look at me I am happy

Don’t worry, be happy

Here I give you my phone number

When you worry call me

I make you happy

Don’t worry, be happy

Ain’t got no cash, ain’t got no style

Ain’t got not girl to make you smile

But don’t worry be happy

Cause when you worry

Your face will frown

And that will bring everybody down

So don’t worry, be happy (now)…..

There is this little song I wrote

I hope you learn it note for note

Like good little children

Don’t worry, be happy

Listen to what I say

In your life expect some trouble

But when you worry

You make it double

Don’t worry, be happy……

Don’t worry don’t do it, be happy

Put a smile on your face

Don’t bring everybody down like this

Don’t worry, it will soon past

Whatever it is

Don’t worry, be happy”

The bottom line: “notification” should not be an issue in most situations involving accounts receivable financing; non-notification factoring is another option that is available for businesses concerned with confidentiality that meet minimum credit standards for asset based lending. Bobby McFerrin was right: “Don’t Worry, Be Happy”.

Copyright © 2007 Gregg Financial Services

www.greggfinancialservices.com

Retrieved from “http://www.articlesbase.com/finance-articles/accounts-receivable-financing-dont-worry-be-happy-156219.html”

(ArticlesBase SC #156219)

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Mr. Elberg is a licensed attorney and licensed real estate broker. Gregg Financial Services is a full service brokerage for commercial finance companies and banks that fund B2B businesses. Mr. Elberg arranges funding from ,000 to million per month at competitive pricing. For more information about GFS, please visit our website:

www.greggfinancialservices.com

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Business Vehicle Financing

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Business Vehicle Financing

By: Chris Fletcher

About the Author

Chris Fletcher is an Account Executive at a leading equipment financing company http://www.crestcapital.com/Catalog/ providing equipment leasing in all 50 states. Chris is a frequent contributor to print as well as online publications, and is the author of a blog on commercial financing topics.

(ArticlesBase SC #375382)

Article Source: http://www.articlesbase.com/ – Business Vehicle Financing

Many a time, a company or business organization needs to purchase expensive vehicles for the purpose of meeting the various business requirements. Business vehicle financing is a viable option in such cases. The construction companies, sanitation companies and several other companies require business vehicle financing to meet the various requirements of their work.

The world of business vehicle financing, at times is quite confusing. Therefore you need to give vital importance for getting loan to buy business vehicles. There are some reliable financing companies that provide you better terms for business vehicle financing through simple application procedures and fast approval of applications.

There are number of business vehicles that require financing. Ambulance financing may be required by medical industry. An ambulance should ideally contain the latest medical equipment. Since the cost of ambulance is near to six figures, it is often essential to go for loans. However it is important to select a reliable financing company that offers immediate loan approval without any cumbersome procedures.

Business vehicle financing is essential in case the company wishes to buy a garbage truck. A recycling garbage truck is often essential for collecting specialized wastes like glass, paper, aluminum, asphalt and plastics for the purpose of recycling. These trucks are essential for some industries that need to recycle the wastes of the manufactured products. The recycling trucks are very expensive and thus help of financing companies is essential.

Business vehicle financing is also essential for buying hearse if your business is providing services for funeral purposes. Driving a hearse down the road followed by cars always brings respectful feeling. But you may not have even heard the word ‘Hearse financing’ since hearse is a limited use vehicle. However some reputed financing companies provide hearse financing too. You can get one or many hearses from such companies without any tiring procedures.

Boom truck financing is required for a business that provides tree trimming services or loading and unloading tasks. Boom truck is far better than heavy cranes. However it is expensive and so it is important to go for loan to get the boom truck for your business purposes.

Business vehicle financing is particularly important in the construction industry. Mixer trucks are used in the construction business for mixing and pouring concrete and so on. They are very costly and so mixer truck financing is a must. However, it gets very difficult to acquire financing for buying mixer trucks as they are used for very limited purposes. But some legitimate financing companies provide loan for mixer trucks too.

Commercial vehicle financing is essential for the purpose of buying buses, vans, dump trucks and bull dozers for meeting the various business requirements. One needs an expert’s help to get financial help for acquiring commercial vehicles. Commercial, recreational vehicles are often expensive and so they require the assistance of financing companies. Before going for a loan, make sure that the financing company has been in existence for longer period of time. Also ensure that there is no cumbersome procedure for getting the financial help. Fast approval of procedures and lower interest rates characterize good business vehicle financing companies.

Chris Fletcher is an Account Executive at a national equipment finance company providing new and used Business Vehicle Financing at http://crestcapital.com/catalog/Business_Vehicle_Financing as well as financing for many other equipment types and industry verticals.

Retrieved from “http://www.articlesbase.com/loans-articles/business-vehicle-financing-375382.html”

(ArticlesBase SC #375382)

Chris Fletcher -
About the Author:

Chris Fletcher is an Account Executive at a leading equipment financing company http://www.crestcapital.com/Catalog/ providing equipment leasing in all 50 states. Chris is a frequent contributor to print as well as online publications, and is the author of a blog on commercial financing topics.

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Why I Love Commercial Financing!

Why I Love Commercial Financing!

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Home Page > Finance > Real Estate > Why I Love Commercial Financing!

Why I Love Commercial Financing!

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Why I Love Commercial Financing!

By: Mario Joyner

About the Author

I have been involved in financing for 13 years. I have assisted many real estate investors both residential and commercial with identifying real estate opportunities, financing the acquisition of the real estate while advising the investor during the duration of ownership of the options available for maximum investment return.

Mario D. Joyner

Commercial Financing Finder

THE MONEY FINDERS, LLC

209 S. Stephanie

Suite b265

Henderson, NV 89012

702.237.1639 Phone

800.296.2388 Toll Free

866.313.4439 Fax

(ArticlesBase SC #415447)

Article Source: http://www.articlesbase.com/ – Why I Love Commercial Financing!

Whenever one invests in real estate the most important thing that they have to look for are the finances. Any real estate property be it apartment or other requires huge amounts of money and hence the need of apartment financing. The choice of a particular financing option largely affects the investment outcomes and hence one must tread cautiously in the matter of apartment financing. There are many financing options that one can go for in apartment financing such as banks and private lenders. There are also some prerequisites that one can consider before going in for apartment financing. The traditional methods of apartment financing do not allow much flexibility but with the growth of private lenders there is much flexibility which one can consider in apartment financing.

Apartment Financing Options

Before considering the different financing options one must make sure how long one is going to hold the property and whether the investment is long term or short term because this has important implications in the choice of finance one can get. When one is considering owning the apartment for a short period then one can surely go in for the adjustable rate mortgage or the ARM for short. The ARM apartment financing option offers an interest rate that changes with the index. The initial interest rate in the ARM is more competitive than other apartment financing options. Interest rate fluctuations in the future impact the finances and hence the ARM is important in this regard. Also the maximum interest rate also works as protection for those who hold the mortgage. For those wanting to remain long in the business there is the fixed rate mortgage apartment financing. The rate of interest for the borrowers in this apartment financing remains the same for the whole period of the mortgage and hence it offers the borrowers cost effective apartment finance.

When one goes for the fixed interest rate apartment financing when the interest rates are low all the advantage is for the borrowers since they qualify for the same interest rate until all the loan is repaid. The opposite happens when the interest rates are higher in the market. First time investors must also look for the value of the apartment because it affects the type of finance they will receive. Generally higher the value of the apartment the best interest rates will be got from direct lenders or investment companies. However when the value of the property is smaller one can consider the financing options from ones local banks.

Apartment financing from smaller banks or direct lenders is another important option that one can consider in apartment financing because they offer flexible apartment loans as compared with other reputed banks and lenders. One can have finances like non-recourse as well as partial-recourse loans from the small banks and the direct lenders who are always on the look out for borrowers. In the event of non-repayment of the amount the traditional lenders can claim the property and recover their loan while in the conventional loan the lender cannot claim the apartment for which finance is given but they can claim the property that has been mortgaged as the security for their finances.

Find out more at Learn Apartment Financing

Retrieved from “http://www.articlesbase.com/real-estate-articles/why-i-love-commercial-financing-415447.html”

(ArticlesBase SC #415447)

Mario Joyner -
About the Author:

I have been involved in financing for 13 years. I have assisted many real estate investors both residential and commercial with identifying real estate opportunities, financing the acquisition of the real estate while advising the investor during the duration of ownership of the options available for maximum investment return.

Mario D. Joyner

Commercial Financing Finder

THE MONEY FINDERS, LLC

209 S. Stephanie

Suite b265

Henderson, NV 89012

702.237.1639 Phone

800.296.2388 Toll Free

866.313.4439 Fax

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Venture Capital Financing: Structure and Pricing

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Home Page > Business > Entrepreneurship > Venture Capital Financing: Structure and Pricing

Venture Capital Financing: Structure and Pricing

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Venture Capital Financing: Structure and Pricing

By: Alan L. Olsen

About the Author

Alan is managing partner at Greenstein, Rogoff, Olsen & Co., LLP, a leading CPA firm in the San Francisco Bay Area. Alan has more than 23 years of experience in public accounting, and works with some of the most successful venture capitalists in the world, helping to develop innovative financial strategies for business enterprises. Alan earned a B.S. in Accounting from Brigham Young University, and an MBA (Taxation) from California State University at Hayward.

(ArticlesBase SC #890801)

Article Source: http://www.articlesbase.com/ – Venture Capital Financing: Structure and Pricing

Introduction

A venture financing can be structured using one or more of several types of securities ranging from straight debt-to-debt with equity features (e.g., convertible debt or debt with warrants) to common stock. Each type of security offers certain advantages and disadvantages to both the entrepreneur and the investor. The characteristcs of your situation and current market forces will impact the type and mix of security package that is right for you.

Types of Securities
Senior debt: Which is usually for long-term financing for high-risk companies or special situations such as bridge financing. Bridge financing is designed as temporary financing in cases where the company has obtained a commitment for financing at a future date, which funds will be used to retire the debt. It is used in construction, acquisitions, anticipation of a public sale of securities, etc.
Subordinated debt: Which is subordinated to financing from other financial institutions, and is usually convertible to common stock or accompanied by warrants to purchase common stock. Senior lenders consider subordinated debt as equity. This increases the amount of funds that can be borrowed, thus allowing greater leverage.
Preferred stock: Which is usually convertible to common stock. The venture’s cash flow is helped because no fixed loan or interest payments need to be made unless the preferred stock is redeemable or dividends are mandatory. Preferred stock improves the company’s debt to equity ratio. The disadvantage is that dividends are not tax deductible.
Common stock: Which is usually the most expensive in terms of the percent of ownership given to the venture capitalist. However, sale of common stock may be the only feasible alternative if cash flow and collateral limits the amount of debt the company can carry.

While each of these securities has unique characteristics, they can be grouped into two categories: debt or equity. In structuring a venture financing, the primary question is whether the financing should be in the form of debt or equity.

Disadvantages of Debt to a Company

From a company’s viewpoint, there are two potential disadvantages to debt.

An excessive amount of debt can strain a company’s credit standing, thereby reducing its flexibility in meeting future long-term financing requirements on a favorable basis. It can also negatively affect a company’s ability to obtain short-term credit. Of course, the form of debt the venture financing takes makes a difference. For example, subordinated debt will have less impact on borrowing capacity than senior debt.
The venture capitalist has the option of calling his loan if the company is in default of the loan agreement. This remedy, which is not available to him under other financing agreements, puts him in a better position to influence the company’s affairs when it is in default.
Advantages of Debt to a Venture Capitalist

From the venture capitalist’s viewpoint, there are three principal advantages to debt.

There is a greater likelihood that the venture capitalist will get his principal back and, at least, a small return. Many of the companies in the average venture capitalist’s portfolio are referred to as “the living dead.” Needless to say, their performance has turned out to be disappointing. In some cases, these companies are able to repay principal with interest but have limited appeal to potential acquirers or the public. As a result, a venture capitalist with an investment in such a company’s common stock may be unable to recover his investment within a reasonable period, if at all.
As previously discussed, under certain circumstances the venture capitalist is in a better position to influence the company’s affairs.
The venture capitalist has a senior claim. However, it should be emphasized that the meaningfulness of a senior claim depends on the marketability of a company’s assets and the amount of equity it has to cushion its creditors’ position. For example, in the case of a start-Lip situation with little or no equity, a senior claim means little or nothing.
Percentage Ownership Needed

While the difference may not be great, depending on the particular circumstances of the company, a debt position involves less risk than an equity position for the venture capitalist. Accordingly, a company should not have to relinquish as much ownership when a financing is in the form of debt. However, this advantage must be weighed against the disadvantages of debt.

No matter how the venture financing is structured, it must be priced so that it is attractive to the venture capitalist. There is no clear-cut answer as to how much ownership a company will have to relinquish to make a financing attractive. Broadly speaking, the greater the potential return perceived by the venture capitalist, the less ownership he will demand. In other words, if a company has a patented product which a venture capitalist thinks is revolutionary and highly marketable, he will undoubtedly settle for less ownership than he would in the case of 4 company with a relatively less attractive product. Thus, his ultimate position will be a business judgment based on his potential return.

Before you enter negotiations with the venture capitalist, you should determine what your company is worth and how much of your company you want to sell. The following procedure can be used to get a rough idea of how much ownership you will have to give up to make the financing attractive.

Estimate the risk associated with the venture financing. If the investment is very risky, the venture capitalist may be looking for a return as high as 15 times his investment over five years. Conversely, if a relatively low degree of risk is involved, the venture capitalist may be satisfied with doubling or tripling his investment over five years.
Make a reasonable estimate of the price/earnings ratio applicable to comparable publicly held companies. The market value of the company can then be projected by multiplying forecasted annual earnings by the estimated price/earnings ratio for comparable companies.
Divide the estimate of the total dollar return the venture capitalist wants by the projected market value of the company. This yields the percentage ownership the venture capitalist will need, as oil the future date, to realize his desired return. It is important to note that any equity financing required during the interim period must be considered in making these calculations.


Case Study

Suppose XYZ Company, Inc., a start-up, needs 0,000. The company’s product appears to have excellent potential. However, because the product is new and unproven, an investment in the company would be extremely risky. Accordingly, it is reasonable to estimate that a venture capitalist would want a potential return of at least ten times his total investment in five years. Management estimates that the company should be able to “go public” at 20 times earnings in five years. Projected after-tax earnings for the fifth year is ,250,000. Additional long-term financing of 0,000 will be needed at the beginning of the third year.

Scenario I

In the calculations below it is assumed that the venture capitalist who provides the initial financing (0,000) also provides the subsequent financing (0,000), and that he wants a return equal to ten times both. However, it should be noted that if the company made satisfactory progress during the first two years, it would be reasonable to assume that the venture capitalist would be satisfied with a lower return on the subsequent financing since it would involve less risk.

Estimate of Total Dollar Return Required Total Investment $ 1,000,000 Estimate of Return Required X 10

,000,000

V. Projected Market Value in Fifth Year VI. VII. Projected Earnings ,250,000 VIII. Estimate of P/E Ratio x 20

,000,000

Percentage Ownership Needed in Fifth Year Estimate of Total Dollar Return quired ,000,000 Projected Market Value of Company in Fifth Year 25,000,000

40% Scenario II

In this set of calculations it is assumed that a second investor provides the subsequent financing (0,000). The calculations show that the venture capitalist who provides the initial financing (0,000) would need 20% ownership as of the fifth Year to realize the return he wants. However, since the ownership to be given up for the subsequent financing will reduce his ownership position, he will want more than 20% ownership initially. For example, if it is assumed that 15% ownership will have to be given up for the subsequent financing, the venture capitalist who provides the initial financing would need 23% ownership initially to end up with 20% ownership in the fifth year.

Assume the same facts as Case I, except a second investor provides the subsequent financing for 15% ownership.

Estimate of Total Dollar Return Required Total Investment $ 500,000 Estimate of Return Required X 10

,000,000

Projected Market Value in Fifth Year Projected Earnings ,250,000 Estimate of P/E Ratio x 20

,000,000

Percentage Ownership Needed in Fifth Year Estimate of Total Dollar Return required ,000,000 Projected Market Value of Company in Fifth Year 25,000,000

20%

Thus, it appears that the investment (0,000) may be attractive to an interested venture capitalist if the principals of XYZ Company, Inc. are willing to give up approximately 23% ownership.

Conclusion

It must be emphasized that the above procedure is highly subjective. And, you should remember that what really matters is how the venture capitalist views the relative attractiveness of a company. Typically, venture capitalists are satisfied with a minority interest. Although a venture capitalist may demand a majority interest, generally they are not interested in operating control. Some of them like to tie the amount of ownership they ultimately get to the performance of the company. For example, a venture capitalist who wants a majority interest initially may give the principals the opportunity to earn part of it back. Such an arrangement can be used to compromise on pricing when there is a significant disagreement between the principals and the venture capitalist.

To entrepreneurs unfamiliar with venture capital, it may appear that the venture capitalist is seeking an extraordinary high return on his investment. However, it is important to understand that, even under the best of circumstances, only a minority of the companies in which the venture capitalists invests will be successful. He is well aware of this, and must make a sufficient return of his successful investments to come out with an acceptable return overall.

Retrieved from “http://www.articlesbase.com/entrepreneurship-articles/venture-capital-financing-structure-and-pricing-890801.html”

(ArticlesBase SC #890801)

Alan L. Olsen -
About the Author:

Alan is managing partner at Greenstein, Rogoff, Olsen & Co., LLP, a leading CPA firm in the San Francisco Bay Area. Alan has more than 23 years of experience in public accounting, and works with some of the most successful venture capitalists in the world, helping to develop innovative financial strategies for business enterprises. Alan earned a B.S. in Accounting from Brigham Young University, and an MBA (Taxation) from California State University at Hayward.

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