Small businesses today are not only looking to financial institutions, but also to their suppliers, as sources of funds. Recently a Small Business Association (SBA) Office of Advocacy study documents trade credit as almost as pervasive as bank credit in both incidence and volume. The study looks at how small businesses’ use bank credit or loans, versus trade credit, or supplier credit.
An alternative method such as invoice factoring allows a company to provide credit to its customers while at the same time obtaining cash for business operations and expansion.
This research compares firms that use credit – leveraged – with those that do not use credit – unleveraged and which kind of credit leveraged firms use. For example they could use bank credit, which includes loans or lines of credit, or trade credit from suppliers, or both. According to the research bank and trade credit are often used simultaneously by smaller businesses. Three-fifths of the small firms that use credit use trade credit.
Our economic times are challenging, and as policymakers continue to focus on how to get banks to increase lending to small businesses, it may very well be in everyone’s best interest if they also addressed the equally important trade credit channel of funding.
While the study provides a better understanding of the credit used by small business, alternative forms of financing such as invoice factoring allow a business to provide credit to its customers while at the same time obtaining cash for important business operations and growth. Read the rest of this entry »
A commercial land loan allows businesses to purchase land, buildings, or other property. Like a home mortgage, a commercial land loan uses the property being bought as collateral against the loan. Unlike the process for home mortgages though, approvals for land loans are based on the property you re interested in buying. You ll need a solid business plan and careful evaluation of the land to receive funding.
When buying a new property for your business, location is essential. Find a real estate agent that knows the area as well as the business potential. He/She should help you evaluate foot and vehicle traffic, zoning regulations, and any previous uses and their success or failure.
You ll need to convince your lender that your new property will make money. Detailed financial plans, reports, balance sheets, tax documents and sales records will be required to show the overall health and sustainability of your business.
A new property will mean a new business plan, tailored to what you plan to accomplish once you move. Prepare a detailed analysis of the costs and income you expect in your new space and be sure to include the costs of staffing, maintenance and loans on the new property as well as a contingency plan for any challenges you may face. Read the rest of this entry »
Often a person s credit rating has been destroyed due to no intention on their part. It was not planned that way it just happened. I got carried away with a credit card so to speak and it just overwhelmed me is a common refrain. Once into debt it is often very difficult if not impossible to get out. On top of that your credit rating may be in not good shape or even in shambles.
How can you restore your credit rating? A person s reputation and to an extension their credit rating is among the most valuable of assets, Like a mirror once sullied it can be most difficult if not impossible to restore the mirror to its original previous state.
What can be done? It all comes down to personal honesty and consistent efforts at repairing your credit history and creating a new and outstanding current credit report. It all comes down to personal honor, integrity and sincerity. Read the rest of this entry »
