The Art of Doing Business

Understanding UCC Filings

Posted by on Apr 24, 2012 in Business Tips | 0 comments

Understanding UCC Filings

Increasingly, companies are turning to accounts receivable factoring, an arrangement where a company sells their accounts receivable invoices into a alternative party for fast funding. To sum it up, factoring may be a practice wherein a business sells its accounts receivable invoices with a third party for a cheap price in substitution for immediate cash with which to advance continued business. This is a method used by businesses to cover short-term cash needs during times by which these needs exceed cashflow. It is not the business’ credit that’s up for inspection but rather the debtor‘s (i.e., the party named on the invoice) and there is absolutely nothing to repay. accounts receivable factoring has existed in the earlier banking operations and now that many small businesses are struggling in the current economic condition, there is a resurgence in their demand. A bank loan is reliant your assets and the ability to pay the loan back. But when you factor, the available funds depend on your credit-worthy customers and therefore are virtually unlimited. The more invoices you’ve got, the bigger your credit line is.

In order to offer security to a creditor with regards to default with the debtor, the factoring company or creditor files an application known as the UCC-1, or Uniform Commercial Code – 1 along the way. The UCC-1 is filed publicly, giving notice that there is an capability to take possession of assets for repayment of a specific debt. In accounts receivable factoring, this form is utilized to protect the factor against potential default by the client’s debtors. In the worst-case scenario where debtors to the invoices don’t pay out, the factoring company can be compelled to collect against the client.

Let’s familiarize ourselves along with the form plus the kind of information it entails. The Uniform Commercial Code requires only three pieces of information:

- Name and address of the debtors – The creditor’s name and address; and – The collateral’s general description

With proper publication (such as in a newspaper), the factor puts itself first in line for the collateral or property and establishes a lien on that property. The kind of business the factor intends to fund is the basis of the sort of collateral or property specified. Whether it’s a shipping or freight company, a truck or trucks may be secured, for example.

After this process then when all receivables happen to be collected or satisfied, a UCC-3 is filed, also referred to as the UCC Statement With Respect to Change. This statement is filed to record the production of liens or other security interest established in the filing of the UCC-1.

The process can be perplexing to you however you must not be discourage as these forms are both standard. Your factor is merely following research methods, allowing your transaction to proceed smoothly along with your funds being released swiftly.

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Starting to Network for Business

Posted by on Mar 22, 2012 in Business Tips | 0 comments

Starting to Network for Business

Networking is an effective means of business development. But many folks are intimidated by the prospect of walking into a room full of strangers and initiating conversations.

In my early days of networking, I dreaded the thought of going to a networking event.  Often I would go to an event, stand in the corner for an hour or two and then go home defeated.  I was never going to be the kind of person to naturally work a room.

I needed a plan.  I figured out the business organization I wanted to become involved in and joined the Board.  This did two things for me – at the very least when I walked into their networking events I would know my fellow board members – it was no longer a room of strangers.  Secondly, it created visibility and people approached me rather than me having to make the first move.

As a board member, I wanted to make life easier for the non-networkers like myself.  It became policy that board members would seek out the corner dwellers, break the ice and whenever possible introduce the newcomer to other members.

That approached worked for me, it may not be feasible for you.  Another idea is to agree to attend with a friend or colleague.  That way you don’t have to walk in alone.  Ultimately, it is about breaking the

Recently, I was meeting with a client (who I met through networking) and she was expressing frustration that her staff didn’t embrace networking more.  I asked if she had taken the staff to networking events that she attended.  Of course.  I asked if at those events if she was the prime communicator and if the staff person faded into the background.  AH…

While the staff had gone to the events, they weren’t really networking.  They weren’t initiating conversations. They weren’t pitching the company.  They were simply supporting players at best.  I suggested she once again join them in networking events but let the subordinate lead.  Let the staff person “network” and she could be their support.

Networking is daunting for many.  Especially, if you are not the sell ice to an Eskimo type.  But like anything else, it is a skill that can develop with a little practice.  And if you see someone alone in the corner, break the ice – you’ll be doing them a favor.

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Getting to Know Patriot Express Loan

Posted by on Feb 26, 2012 in Finance 101 | 0 comments

Getting to Know Patriot Express Loan

A new loan program for veterans, military service members and their spouses was launched by the U.S. Small Business Administration (SBA) in 2007. The new loan program, Patriot Express Loan, can be utilized to start or develop a small business.  The loan is an extension to the financial, technical and procurement assistance programs that the SBA provides to the military community.

A streamlined loan solution, Patriot Express Loan is for the military community members including Reservists and National Guard members, active-duty service members participating in the military’s Transition Assistance Program, service-disabled veterans, and current spouses of any of the above, and the widowed spouse of a service veteran or member who was killed during a service, or of a service-related disability.

Patriot Express Loan highlights SBA’s speedy turnaround time for approval of loans. The loan can also be utilized for working capital, expansion, inventory or business-occupied real estate purchases, and equipment purchases.   It can also be used for recovery from declared disasters, setting up to sell goods and services to the government, managing your business, and infusing working capital. The loan also emphasizes the SBA’s lowest interest rates for commercial loan, usually 2.25-4.75% over prime depending on the maturity and size of the loan.

Patriot Express Loans are offered up to $5000 thousand and qualify for the highest loan guaranty up to 85% for loans of $150 thousand or less; and up to 75% for those over $150 thousand to $500 thousand.  For loans over $3520 thousands, lenders are obliged to acquire all available collateral. To qualify for the SBA loan, your business must have alternative financial resources including personal assets, have realistic owner equity to invest, is a business in the United States, and must be a business for-profit.

SBA does not lend the money, but only guarantees repayment of the loans, freeing up funds that small businesses may not qualify for via regular financial institutions. Patriot Express loan is under the Basic 7 (a) Loan Guaranty, the fundamental loans that the SBA offers.

The loan was launched in June 28, 2007 and has approved more than $150 million in guarantees in less than a year. In two year’s time, the Patriot Express Loan has helped over $315 million in loans to over three thousand veterans and their spouses who are utilizing SBA-guaranteed funds to start and develop their small businesses.

In three years, Patriot Express Loan supported almost $500 million loans and after four years since it was launched, it has provided over $633 million in SBA-guaranteed loans to over seven thousand veterans.

The loan is approved for all 50 states of America, including the District of Columbia, the U.S. Virgin Islands, Guam, and Puerto Rico.

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How To Get A Business Line of Credit

Posted by on Feb 23, 2012 in Finance 101 | 0 comments

How To Get A Business Line of Credit

You need funds for your small business but you are looking for other options available for you in the market. Have you ever tried applying for a business line of credit? Or, if you are considering this option, do you know how to get a business line of credit? Read on and learn how line of credit works, how it can help you and your business, and how you can apply for one.

What is a business line of credit?

A popular form of financing offered by financial institutions a business line of credit is like capital for your business; funds that you can access any time up to a specified amount agreed by you and the lender. It’s basically utilized to fund temporary working capital required, usually inventory and accounts receivable. Business line of credit is flexible and can make way to the needs of both the lender and the borrower. Usually, it is revolving like a credit card so it has no fixed payment terms and has adjustable market-based interest rate.

Business line of credit comes in different structures or terms such as demand line of credit, revolving line of credit, asset-based line of credit, draws payable within a specific timeframe, and clean-up.

What are the advantages?

There are several advantages to having a business line of credit. One advantage is the lower interest rate that line of credit has compared to credit cards. Although credit lines usually have higher rates compared to regular financial loans, business line of credit still have lower rates and higher available limits compared to credit cards.

Another advantage is that it furthers cash-flow management, helping you to even out cash flow when fluctuations are expected, regular, or industry-detailed. It is also beneficial when you make purchases that are too small for regular loans and too large for credit cards. This happens when you want to purchase supplies that are too costly to place on a credit card and too small to for regular business financing loans. You can cover such expenses through business line of credit as long as you don’t go beyond your maximum limit and you pay within the specified time.

Business line of credit can also be helpful during difficult times when you are in need of emergency funds. Another good thing about it is that it permits you to pay off the balance as you go and you can borrow again whenever the need comes up.

How to get a business line of credit?

So, how to get a business line of credit? The requirements for the commercial loan are simple.

Fundamentally, you need to have proof that your business does exist by providing verifications together with complete contact information about the business, owners and the main officers of the organization. Your business should be properly registered with all significant business agencies. Another requirement is a business bank account that is cleared of NSF (non-sufficient funds) fees and bounced checks. Usually, there’s no collateral required but when needed, collaterals usually come in the form of inventory or receivables. Other important requirements needed when applying for a line of credit are financial history and credit reports.

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Business Loan Guide

Posted by on Feb 17, 2012 in Finance 101 | 0 comments

Business Loan Guide

What is a business loan?

Any financing given to a business that has to be repaid in within a specific period with a certain amount of interest rate is called a business loan. A business loan is given by any financial institution including a bank, credit union, organization, or an individual(s). A business loan is granted to nonprofits, partnerships, limited liability companies, sole proprietors, and corporations.

Business finance in America started in the late 18th century with the nation’s first banks. The business owners borrowed money from the banks to pay workers’ wages, settle with product suppliers, or invest in new equipment.

What are the types of business loan?

Loans can be secured or unsecured, long-term or short-term loans. Common types of loans are secured loans, unsecured loans, small business loans or SBA loans, lines of credit, equipment financing, and working capital loans.

Business loans have three main categories: small business loans, commercial mortgages, and equipment leasing. Small business loans include asset-based loan, bridge loan, working capital loan, accounts receivable financing loan, factoring invoice loan, retail merchant cash advance loan, business credit, business equity loan, franchise loan, SBA loans, business line of credit, and purchase order financing loan.

Equipment leasing includes loans for agriculture/forestry equipment, aircraft and transportation equipment, restaurant equipment, printing, phone, office, musical, industrial, healthcare/medical, farm, exercise/fitness, construction, and computer equipment.

Business loans products also include construction loans for new homes, renovation, development loan, commercial and residential; healthcare and medical loan for assisted living, congregate care, hospital, medical clinic and skilled nursing facility; hotel and motel loans for full-service hotel, limited service hotel, resort and suite hotel, convention hotel, and flagged motel; industrial building loans for manufacturing, office-warehouses, research and development, warehouse and multi-tenant, and warehouse and single tenant; and retail center loans for car care center, community centers, convenience stores, factory outlet, regional malls, single-tenant building, strip with anchor, and strip without anchor.

What are the advantages of getting a loan?

Getting a business loan can do your business some help. Short-term business loans can be utilized for start-up costs especially if you don’t have the funds to cover these costs and your need a push to continue business operations. A short-term loan can also be used to fund emergency repairs and maintenance, and for temporary cash flow situations. Loans make real sense if you want to legitimize your spending and secure an amount of funds to spend on your business. A business loan can also be used for purchase inventory, expand operations, rent/buy/or lease equipment, hire more staff, and marketing expenses.

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