US Business Finance Blog

Small Business Hiring in Tight Economic Times

Posted on August 4th, 2008 by Author

While the overall American economy is experiencing tight times, small businesses are still growing and fulfilling customer needs. Small business owners needing to hire more employees can follow US Business Finance Corp’s HR guidelines for small businesses for hiring wisely to support company growth in tight economic situations.

Hire for critical full-time jobs that need to be filled and consider outside contractors for part-time crucial jobs, such as payroll and computer services.
Hire expertise for the areas that are not your strengths. When hiring for positions demanding a level of trust, such as in accounting areas, references are imperative. Use of outside audits helps you keep tabs on the finances if accounting is not your expertise.
See your employees as investments in the revenue-producing aspects of your company. US Business Finance Corp has noticed that team players who bring in a consistent level of sales help build a stable revenue stream. Banks and lending institutions look for that stability when considering your company for a small business loan or a line of credit. Lead your business growth with growth in sales and invest in back office support in order to keep up with the demand created by sales. This can help your company steer clear of becoming a top-heavy in areas that are not creating or fulfilling sales.
Be willing to pay for experience. Hiring to keep payroll expenses down may cost the company in the long run. Inexperienced employees tend to make more mistakes and fail to weigh situations with customers with the same expertise that practiced and skilled employees do. Experience in key positions is also necessary to show financial institutions when applying for commercial financing that your company is ready to weather the regular ups and downs of the business world.
Integrate a replacement plan as part of your business growth plans – whether through training promising employees to “rise through the ranks” or building a good relationship with employee hiring firms.

Tight economies do not necessarily dictate a freeze on hiring, but they do direct business owners to maximize their hiring skills to leverage the new employee’s ability to improve a businesses performance in the marketplace. Your hiring practices can also help position your company long range for better financing as well as better growth.

US Business Finance Corp specializes in helping entrepreneurs successfully start and grow their small businesses with a wide array of residential and commercial mortgage packages, business capital advances and merchant credit card accounts. Contact us if you would like to see what traditional and alternative financing solutions we have to offer for your small business.

Financing Guidelines for First-time Small Business Owners

Posted on August 2nd, 2008 by Author

As many entrepreneurs observed, school prepares one to be an employee, mentors prepare one to own their own business. Unlike corporate retirement plans, financial planning for entrepreneurs demands a hands-on, forward thinking approach. US Business Finance Corp has worked with many small business owners and understands the challenges and rewards of business that appeal to entrepreneurs. Our alternative business financing experience has led us to compile the following financing guidelines for business owners starting out on their own enterprise.

Many beginning business owners enter the market carrying a school loan as well as credit card debt. More than making up for the debt is the entrepreneurs’ passionate vision of their business and financial goals. In preparation for the next business building steps, write down your financial goals and the general steps and time necessary to achieve those goals.

Next, review your safety net. Looking at your personal monthly budget, how much do you need in your emergency cash reserve account to cover you for three to six months? Are your business, life and health insurance policies adequate to provide financial backup for your company and family?

Finally, categorize your debt by balance and interest rates.

The entrepreneur’s task is balance the use of their cash flow between paying off debts and placing funding in areas that will multiply their financial investment. Businesses that never invest never break out of the cycle of forever paying off debts. Investments in businesses and real estate not only have the benefit of accruing value, but can also be leveraged to pay for themselves – creating wealth for the small business owner or investor.

Managing debt, especially to free up cash for operating capital, has several areas to examine:

Switching credit cards to merchant credit card service providers with lower interest rates and fees;

Buying a smaller house in order to build equity faster and keep monthly payments down;

Limit the number of installment loans you allow yourself to take on for cars or appliances; and

Check to see if there are ways to extend student loan payments to free up cash to pay down higher interest loans.

In managing your debt, always discipline yourself to reallocate the saved funds toward either further debt reduction or to your savings and investment funds. Resist the temptation to use the freed up funds in unplanned “consumer exuberance”.

Start investing a portion of your cash flow into your retirement account. Consult with your accountant whether a 401(k) or and IRA would suite your business best. For small businesses IRAs may be a better route since 401(k) have more stringent federal guidelines and higher operating costs than IRAs.

Finally, work with your accountant and attorney in structuring your new business for either building it up and selling it or if building for long-term committment. Enterpreneurs have found building one business and selling it brings them the capital to launch their next venture. On the other hand, having one successful business can also create a cash flow that can support the opening of a second store. Setting the foundation and timeline in the beginning allows you to benchmark your progress and see how well you are following your business strategy.

US Business Finance Corp has the financial proficiency to help new small businesses. If you find yourself in a temporary cash shortfall, contact us, our main expertise is delivering short-term working capital solutions, usually through our business cash advance program. When cash gets tight, time is of the essence especially in emergency circumstances. Once your application is approved, your cash advance is wired to your account as quickly as possible, usually within 5 business days after approval, 10 at the outside.

Market With Ingenuity When Advertising Budgets Are Tight

Posted on July 30th, 2008 by Author

Building your small business’s customer base takes time and marketing, more marketing if shortening the ramp-up time is important. However, when advertising budgets are tight, how you market your business takes on greater importance.

The time you spend planning your marketing strategy will pay-off in its effectiveness. When budgets are tight, but sales are steady, US Business Finance Corp may be able to help you with a business cash advance to increase advertising and increase sales. The following are tips small businesses follow to boost sales and make the most of their marketing investment.

Know your customer. Instead of a “shotgun” marketing approach, where advertising goes out to a large general market, tailor your marketing to a very defined demographic. With a clear target you can measure your marketing effectiveness and tighten the scope of where and how you place your advertising material.

Network within your industry. Referrals are a solid source of business leads since anyone sent to your store or requesting your services has most likely heard a positive testimonial about you. The best people to network with are those who have businesses that share the same market, but sell different or complementary products or services. Leads groups and community service groups are all fallow ground for networking.

Understand your market. What local publications do they read? What radio stations do they listen to? Is there a favorite restaurant at which they congregate? Knowing as much about your target market makes it possible for you to better spend your advertising budget?

Get marketing feedback – find out how your customers found you. Knowing how your customers found you is the most important information you can receive. With that feedback you can refine your marketing. If one type of marketing does not work, the sooner you know, the less money you send down the wrong rabbit run.

Present your business as a benefit or solution for the potential customer. Turn the marketing tendency of listing your services or products features into benefits your customer receives. Listing features translates into “You’re selling something”. Listing benefits translates into “I can receive something I need”. For example, if you are an insurance agent brand yourself as “I help people get prepared financially for those unfortunate things that happen unexpectedly.” Marketing really about creating perceptions – you can either sell insurance or help someone make sure their family is taken care of should something happen to them. The first is perceived as an expense, the second as an investment.

Look for local market exposure. Find opportunities where you can use your products or services to support a cause or a raffle at wholesale prices. Put your name up alongside a worthy cause – always good publicity – and you usually invest less marketing dollars than the public’s perceived value of your offering. For instance, if you are an advertising agency, co-sponsoring an event, especially with businesses you want to network with, and placing ads at your wholesale discount prices costs you less than the event sponsors would have to pay if hiring your company – and you get your name prominently linked to an image-boosting event.

Using your readily available assets – customer feedback, networking referrals and “wholesale access” to your company’s strengths – to leverage your marketing capacity saves advertising dollars and maximizes your marketing effectiveness. Call US Business Finance Corp to get your business a business cash advance to invest in your advertising and future growth.

Streamlined SBA Loans for Vets

Posted on July 28th, 2008 by Author

Veteran or their spouses may be eligible for the Small Business Administration’s (SBA) streamlined “Patriot Express” SBA-backed loan. The Patriot Express loan program was initiated to help military personnel, active-duty, reserve or retired, or their spouses obtain small business loans under the SBA’s 7(a) program.

Several benefits that military personnel receive with these loans are:

The interest rate on loans for less than seven years is only 2.25% over prime;

Loans for under $25,000 do not require collateral (although lenders can charge an added 2% on these loans); and

The SBA approval time is 36 hours (versus up to 10 days on regular SBA loans).

The Patriot Express program guarantees 75% of the loan for amounts up to $500,000. Since the SBA program relies on the lender’s application forms, businesses with a 51% or greater military vet or active-duty ownership can simply go to your local financial institute that works with SBA loans.

For veteran-owned small business, US Business Finance Corp offers its Business Cash Advance program as a possible adjunct to a Patriot Express loan to help new businesses get their financing in a timely manner. With a business cash advance, veteran owned small businesses can access business financing that performs as a draw against their future credit card sales. Unlike a bank loan, US Business Finance Corp historically wires approved business owners the cash advance in 5 to 10 business days.

If your veteran-owned small business is too new or your collateral position not what it needs to be for an Patriot Express SBA loan, contact us to see what small business financing we can arrange for you. We are specialists helping new businesses secure the funds they need when they need them most.

Starting A New Business? Finance the First 90 Days

Posted on July 24th, 2008 by Author

Often entrepreneurs peg the beginning of their cash flow to opening day. Actually, from the experiences of new business owners, a more realistic view is to depend on financing to cover your start-up costs for the first three months of business. Having the necessary operating capital upfront is critical to creating your healthy cash flow. Your 90 days of working capital can come from several sources. When considering the source of working capital and the amount, the following checklist will help you estimate your financing needs:

Marketing costs. Getting your name out is paramount to your success. Attracting new customers and creating the “buzz” is the key to drawing foot traffic to your establishment.
Regular overhead expenses. Be ready to meet payroll, interest, licenses and taxes that come due in your first quarter of operations. When figuring your beginning payroll, don’t forget the company matching funds for payroll taxes and social security.
Incidental business costs like shipping, postage and credit card fees. The tag-a-long expenses are usually out of sight charges, but at the end of the month, especially a month with great sales, they will tally up and need to be met.
Office supplies. Probably the most you will spend on your office at any one time is at the start: paper supplies, office furniture, printer, printer supplies, and computers, even if some are purchased on a lease, are initial expenses. Maintaining those supplies is usually a lesser expense than setting up your initial inventory.

For many business, such as restaurants and franchises where there is a ready market or population of loyal patrons, a business cash advance from US Business Finance Corp may be an alternative business capital source, especially if you are expanding to a second location. The cash advance is paid back from a portion of your future sales, not from cash, Discover or American Express sales, only from your VISA and MasterCard sales. This allows you to meet the needs of your second location’s the first ninety days without drawing down on your main operation’s cash flow.

US Business Finance Corp has utilized its well-received business cash advance program to help restaurants (typically hard to finance) and small businesses of many kinds meet their working capital needs. Several differences between funding with a cash advance versus a traditional loan is the speed to receiving the funds, the minimal documentation and the financing does not create an additional long-term liability on the company Balance Sheet. Contact us to see what alternative capital sources we have available for your business.

Formula For the Best Rates On Your Line of Credit

Posted on July 22nd, 2008 by Author

Entrepreneurs know that the best use of credit is to make money by using other people’s money at as low an interest rate as possible. When times are good and you do not need a line of credit, that is the best time to arrange for one. The timing and the steps to prepare for a line of credit are important to getting you the best interest rate and amount that can be used for working capital.

Even though businesses’ working capital needs are there from the start, in order to have a solid track record, business owners should hold off applying for a line of credit. What is important in the beginning months is to establish a credit history of paying bills on time. Any sign of struggling to make payments, such as a history of late payments, can be grounds for a denial of your application.

Many small businesses, such as restaurants and entertainment businesses, have a cyclical nature to their traffic flow and hence to their cash flow. In order to keep their payments on time, invest in needed inventory or a new piece of equipment, owners utilize their Visa and MasterCard future sales as a pledge to obtain a business cash advance. US Business Finance Corp’s cash advance program helps businesses get cash quickly when owners need to get their bills paid on time or expand their businesses. The cash advance can be utilized to build your on time bill payment track record so your credit history is ready for a line of credit application.

The benefit of a line of credit over a traditional loan is that you only pay interest on the amount you borrow. If a business gets a $75,000 line of credit, but only draws $15,000 of that, then the interest payment is only on the $15,000. Yet the company has the security of knowing it has $75,000 it can use as operating capital to meet any challenges or opportunities.

Another benefit of using a business line of credit versus a personal one is that the commercial interest rate for your business is most likely less than you could get personally. Keep in mind that, for small businesses, the owner usually gives their personal guarantee on the line of credit, so getting a business line of credit saves interest, but does not decrease owner liability.

The formula for getting your best rate is to apply for a business line of credit once your commercial enterprise has built up a solid credit history and at a period when sales are good. Having your credit line in place before you have a cash emergency arise is the best policy.

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