WHERE TO TURN WHEN THE BANK SAYS NO – THE RISE OF ALTERNATIVE FINANCING PRODUCTS

Asset-based lending and other alternative finance products like P.O. financing and factoring are available when conventional financing is unattainable. If you are a small to medium sized business and have a need for a Line of Credit from $250,000 to $15 million and the bank says no, Bob Blades, Principal of Liquid Capital Corporate Finance Inc., is the type of person who may be able to provide assistance.

Click here to read more.

Join us at the West Valley B2B Expo on August 24th

 

 

 

 

 

 

 

 

 

 

 

Liquid Capital Funding Solutions (LCFS) is excited to be exhibiting at this year’s West Valley B2B Expo! Stop by our booth, say hello, and let’s discuss how we can help your business prosper.

The 2017 West Valley Business to Business Expo is being held at the Glendale Civic Center – 5750 W Glenn Drive, Glendale, AZ 85301, on August 24th, from 4:00pm to 7:00pm. Come visit the largest B2B event of the year covering the entire west valley. This event is hosted by all 5 west valley Chambers.

Attendance is free. This will be a great opportunity to collaborate with other businesses. Bring plenty of business cards.

Additional Events for LCFS:

  • Oct. 12th, 2017 – Arizona Small Business Association (ASBA) THRIVE business expo.  
  • May 8th 2018 – Jeromy Cushing will be presenting at the Corporate Companion Speaker Series hosted by Keystone Business Consulting, LLC
  • More to come!

Why Join a Hispanic Chamber?

Click here to check out a video on how joining a Hispanic chamber can help small businesses?

Liquid Capital Celebrates its First 5 Years in Central Texas

In the years following the 2008 financial crisis, Juan Pablo “JP” Mondragon saw first-hand the difficulties businesses faced obtaining capital. He asked himself, “How can I provide small and mid-sized companies that are truly committed and have potential access to the funds they need to grow?” The answer was the creation of Liquid Capital Resources in 2012. Since then it has been providing capital to companies from a variety of industries in Central Texas and beyond. Liquid Capital Resources has been recognized as an accessible alternative funding source for businesses.

“Raising capital can be a full-time job and it takes a while to get what your business needs. We wanted to offer choices, simplify the process, and I think we found a good formula.”

Liquid Capital Resources works closely with businesses to determine the best solution for them, not only from a cost perspective, but also considering many factors that can be crucial to a company’s success in the short and long run.

“For some of our clients our solutions aren’t always the best permanent funding source, but we can be the springboard that gets them to their next phase. We can help them transition to bank lending, self-funding, going public, or whatever is their best path.”

Describe the defining moment you knew your business would be successful?

During the first year it was difficult to get the right clients; those deals where the risk/reward ratio made sense. “As with most new companies, at the beginning we wanted to grab any opportunity that we came across. However, we are in the risk assessment business and we had to stay true to our principles, which unfortunately meant turning away some deals that at first appeared attainable.” Today, Liquid Capital Resources is on a positive trajectory. To sustain its growth, it relies on referrals from trusted sources. The true success of Liquid Capital Resources comes from seeing its clients prosper and reach new heights, breaking barriers, all while maintaining basic business disciplines.

“I realized we were onto something really good when one of our first clients, who had previously admitted he was about to give up and sell his business, managed to keep his company and actually doubled the sales within a few months. Every client has a story, and we love to be part of that.”

Although most of its clients do not have access to bank lending or other traditional funding sources, for some companies Liquid Capital Resources was able to supplement an existing financing facility. In fact, there are cases in which traditional lending may seem more affordable but would limit the expansion of a business. JP adds “These are the cases in which we thrive, companies that have a solid business model, healthy profit margins, strong customers, and although they may not be highly profitable yet, there certainly is potential.”

What sets your business apart from your competitors?

  • A simple, quick and affordable approval process. “We don’t have the high up-front fees that others charge.”
  • Rapid funding process
  • Clear pricing, no hidden fees
  • No long-term commitments, plain English contracts
  • Direct interaction with the funding source and the decision maker

What, if anything, has changed since your business was founded?

We have added several programs to help existing clients and to assist a wider range of companies.

“Although we started with a receivable financing product (called Factoring), we now offer eight different funding options for businesses. One of our first clients required capital to fulfill a Purchase Order; we got her suppliers paid so that she could deliver on the PO. Another client whose business is highly seasonal needed capital beyond its bank’s line of credit during the peak season; we got him a supplemental financing facility. A client that was expanding overseas and had a line of credit from a bank came to us for export financing. We funded a retail company that needed some quick cash to face an unexpected situation. The list of clients we have helped is long and we strive to stay creative with our funding solutions.”

 

 

Local businessman commits $25M to fund mid-market businesses

The Greater Philadelphia Region Chamber of Commerce report Mobilizing Greater Philadelphia’s Middle Market named “access to capital needed for growth” as one of the region’s most pressing needs. In response, local entrepreneur Jack Wilson is committing up to $25M to area businesses.

Philadelphia, PA – Jack Wilson, owner of local financing company Liquid Capital of Greater Philadelphia, has worked with small and mid-sized businesses for over 30 years. As a successful entrepreneur himself, he understands the challenges posed when a capital shortfall is all that’s stopping a business from delivering on its potential. That’s why he was ready to step in when he saw that funding access was becoming a major issue in his own business community.

On January 31, 2017, the Chamber of Commerce for Greater Philadelphia—where Jack’s business is located—released the results of a report based on extensive data collected on regional mid-market businesses. Titled Mobilizing Greater Philadelphia’s Middle Market: A Critical Engine for Regional Growth, the report takes a hard look at the nature and needs of the area’s mid-market businesses—a sector the report says “represents 27% of total employment despite accounting for only ~1% of companies” and “is a critical growth and employment engine for the economy.”

“When I read the report, the fact that the region’s mid-market businesses identified lack of effective access to capital as a major issue jumped out at me immediately,” Wilson asserts. “That’s what I do. That’s what Liquid Capital does. I knew right away we would be able to make a difference for local businesses that just need the right financial support to realize their goals.”

To make his vision of helping the local business community of the Greater Philadelphia area a reality, Wilson turned to Toreigh Stuart, CEO of Next Edge Capital; an investment management firm Liquid Capital works with. Stuart agreed to back and fund the initiative. “When we signed on to work with Liquid Capital, this is exactly the sort of project we had in mind,” declares Stuart. “We look for innovative opportunities for our investors—ones that go beyond stocks and bonds—and with Jack’s project and Liquid Capital’s unique funding approach, we can not only meet that commitment but hopefully be part of some real business success stories. It’s win-win-plus.”

Notably, this funding project includes B2B companies across most industries that are asset strong, and those that obtain funding can put it to whatever use they choose, from purchasing equipment or increasing advertising, to funding payroll or paying expenses. “I’m really excited about what some of our dynamic local businesses will be able to do,” says Wilson. “Good things are going to happen.” He is currently in discussions with local business associations interested in providing their members with access to this $25M pool of capital.

Liquid Capital has been providing trade finance and working capital solutions to businesses across North America for almost 20 years. “In a world of disruption and uncertainty, we at Liquid Capital think it’s important to offer small and medium sized businesses a stable and reliable source of financing”, says Sol Roter, President of Liquid Capital.

For more information, please contact Jack Wilson at  866- 584-8008 or jwilson@liquidcapitalcorp.com.

About Jack Wilson – Jack Wilson is the owner and principal of Liquid Capital of Greater Philadelphia who runs a certified minority business enterprise (MBE). An experienced entrepreneur and small business mentor, his background includes project management, finance, accounts receivables management, and sales and process management. Jack is a fair and ethical decision maker,who actively serves the local business community, and regularly participates in workshops and panel discussions.

About Liquid Capital – Liquid Capital is a global full-service working capital and trade finance company. It has the largest geographic footprint of alternative funding professionals in North America, offering clients a customized and flexible approach with local decision makers. It offers a complete range of solutions for all industries and provides immediate financing upon approval with no long-term contracts or hidden fees.

About Next Edge – Toreigh Stuart is the Managing Director and Chief Executive Officer for Next Edge Capital. With over two decades’ experience selecting and monitoring investment managers, he is passionate about finding unique investment ideas. Toreigh’s main role is assessing and structuring investment opportunities in an efficient manner, with a focus on ideas that emphasize increased risk-adjusted returns with low levels of correlation to traditional stocks and bonds.

 

Reduce Wasteful Spending

I thought reducing wasteful spending in your business is always a good thing…right?

I’m always surprised at the response from business owners when I suggest they can possibly save money every month, with minimal to no effort on their part. There is generally push back before I can finish my statement. I’m not even promoting a service that has anything to do with me or my business. I guess it has to do with the skepticism of “something for nothing”.

It’s true, there is the possibility of a little effort, but if the suggestion comes from a trusted source, it is definitely worth listening.

A perfect example is the service of Rob Goodale at Schooley Mitchell. Schooley Mitchell delivers objective advice and analysis to ensure you are receiving superior telecommunications and card processing services at the best price. They are independent of all vendors and act only with your best interests in mind.
A risk-free review will identify the challenges you face and provide practical, cost-savings solutions.  The best part – If they don’t find savings for you, there is no fee for their services.

This seems like a no-brainer to me. Here is an overview of their services:
• Billing error identification and recovery
• Ongoing optimization of landline, long distance, wireless services, data, internet, conferencing & more
• Merchant services analysis, including credit card, debit card, eCheck & ACH transactions
• Project management, needs analysis, technology recommendations
• Assisting with hardware upgrades & installs, office relocations, network integration

Let an experienced professional like Rob Goodale look into reducing your overhead, while you keep growing the business.

Debt or Equity which is a Better Decision?

You are a business owner, you need cash. What else is new?

When considering the options, traditional personal financing wisdom always suggests avoiding debt. Does that hold true however for business financing? Surprisingly, debt is often preferable when you are financing your business. Why is that?

First you have to ask yourself why you need the money in the first place. Do you just need cash, or could you benefit from more industry connections or knowledge? Do you actually know someone with cash and these added value benefits of knowledge or connections that would be a good fit as an investor?

Every time you opt for equity investment over debt, you are giving part of your business away. When you use debt, you are keeping your business for yourself. Debts will eventually be paid off. Equity given away will always grow (most likely far more than any interest you pay on your debt) – meaning your portion of the business will shrink. So if you are tempted to raise cash by giving away equity, don’t do it just to get the cash. Make sure the investor brings added value to the table. Do they have key connections to customers you need? Do they have substantial industry knowledge or insight you lack? Make sure the intangible value of what they bring to the table far exceeds the cost of any interest or other fees you would pay on the debt.

If you are looking for cash only, and maybe also need some help with the administration in your office, there may be a number of options available to you, so give us a call to find a good fit for your situation.

Why Isn’t My Business Making Any Money?

If Plan A is not working, do you have a Plan B or are you looking at a blank page and hoping for inspiration?

Your business should be actively managed every single day, of every single week, every month to survive. The problem is when you are doing well you want to take a break. You reach your goal for the week, and you let yourself relax. As soon as you realize that you’re not making money anymore, you rush to pick up the slack but it’s too late- you’re only improving your business minimally, and these results never improve. Therein lies the heart of your problem and the only way to improve is to find a solution.

Start by making a plan. Track the hours that you’re working and the income that you make. Plot your expenses daily, and then weekly, and eventually monthly. Define what your work goals are, and work to track your progress for the entire year.

How to Make Your Business Plan

Track your aspirations, deadlines, and sales projections and stick to it.

Set up goals, and consequences for yourself if you don’t reach those goals. Incentivize yourself and your employees with recognition, appreciation, and more money as well.

Avoid allowing yourself to become unmotivated. If your team gets distracted or thinks that their jobs are in trouble, they aren’t going to work well. Set clear expectations and goals, and be clear with job descriptions.

Track Your Work and Your Income and Expenses Per Day and Per Week

It might seem superfluous, but either put the data in a spreadsheet now or hire someone who will. Too many business owners hold all of their receipts and invoices in shoe boxes and wonder why they get audited by the IRS.

Define Your Work Plan, and Cut Excess

Figure out who’s benefiting your bottom dollar and who isn’t. Every company needs ways to improve business; using marketing, accountants (to manage tax and revenue), and security (either online or in person).

Track The Progress You Make in a Month and Write it Down

Write down how much you’ve spent, how much you’ve made, and how you can make it better next month. Having these standards helps you earn more and spend less over the long run. You’ll continue finding ways to grow and improve, helping keep you on track to succeed.

5 Ways for Your Business to Make More Money

  1. Rent out Part of Your Business Space to Other Businesses

When you own or lease your business premises, if you’re not using all of the physical space, it only makes sense to rent it out and sell your space to another business. All you have to do is organize your business assets, and set them up in a central location that makes better use of the available space.

Then, you can put your business in a booth or corner of the office, and rent the rest to other local businesses, throwing in add-ins to up the rent capabilities, including potential workstations and secretarial services.

  1. Package Your Services Together

If your service is multifaceted, your business can make money by selling services as products rather than doing it per hour. You can increase your revenue, and people feel like they’re getting the better end of the deal, helping overcome their resistance to sign-up for your service. Work is far more tangible when people can plan out how they’re spending their money, especially in regards to a set budget. This can greatly increase your profit margin. Find out about the conversion process here .

  1. Add Value to Your Services or Products

One of the best ways that people make money for their business is by adding value to the things that they sell. Little add-ons and freebies are the basis of many advertising strategies because the facts show that people love them. These services are all over the place:

You buy a phone and you get a free headset or phone case

You buy a large popcorn and a box candy at the movies, and they throw in a “free” soda

Discount coupons if you buy a specific amount

Bargain sales that offer “rock-bottom prices”

I’ve found that unless you find at least some good reasons for your  customers to buy something, your customer already has reasons why not to unless it’s such a great deal that they can’t help themselves. Understanding why people buy things and figuring out what little conveniences that you can offer helps you maximize your business profits, and keep your business afloat.

  1. Focus on Selling to Both New And Old Customers

It’s always easiest to sell something to your old customers, especially if you have a good reputation and customer service. The best part is that they already understand your business concept so you don’t have to pay for advertising to convince them to buy your products. All you have to do is tell them what you’ve done: you’re providing a discount, you’ve acquired new, awesome products, or you’ve developed a member reward program. Whatever you choose, these kinds of incentives help convince people to keep coming back to you.

  1. Factoring Through A/R Funding

Factoring can be one of the fastest and easiest ways for your company to make money. In fact, successful businesses have used factoring for hundreds of years (since the industrial revolution) to help them maximize their sales and continue growing. Factoring involves a company selling their accounts receivable at 75-80% of their current value. Factors collect on these accounts, holding onto the remaining portion of the account until the remaining balance is paid off. Then, companies get this money back, minus a small fee.

If your business is cash strapped, factoring can be one of the only options to help find business success. Factoring opens up working capital, pushes your investments, and helps you take steps forward. It provides a continuous option for your business to access capital that you might not get on a regular schedule from your customers. It can help you make employee payments, pay off bills, and re-supply. Factoring helps many small businesses take advantage of otherwise unavailable business opportunities.

It does not have to end this way

Many small business owners and start-up entrepreneurs get overwhelmed with what they have to do. One of the leading indicators for a failing business is the inability to pay their bills on time. Being overwhelmed, it’s easy to let small things slip and understandable. After all, it’s hard to do everything right when you are just starting out. But some slips can be very costly; taxes and other important payments cannot be neglected, there are severe consequences if you do. Failure to meet payroll is not uncommon for a startup, but those loyal hardworking employees will eventually leave if not paid on time.

The most common reason that a business cannot pay their bills is because their customers don’t pay them quickly. Waiting a long time for a payment from customers is commonplace, but it’s hard to meet payroll and pay for expenses when you are not getting paid for your services and/or goods.

Factoring, or selling accounts receivable to a third-party at a discount, can dramatically raise your capital. It’s not a new practice either; many businesses have used factoring processes to help manage their cash.

It might seem like an expensive endeavor, but when it’s hard for you to manage your money and time, factoring companies can help you to stay on top of your business. Factors will give you 75 to 80 percent of your invoices immediately, and forward the rest of the payment (minus what you’re paying for the service) back to you when your customer pays you.

Think of factoring companies more like extending your credit line (not a loan or liability). Factoring is an asset that allows you to be more concerned with your clients and your service, rather than worrying about your customer’s ability to pay and timeliness of payments. The factors fees are usually pretty nominal (between 2 and 3 percent), but the services they provide are worth much more than that. Additionally, there’s a lot of misconceptions that factoring is a last ditch effort, but it’s not. Usually, factoring is for businesses that have a lot on their plate. Factoring provides these businesses the on-hand cash that they need to grow.

There are 5 big reasons that factoring services aren’t expensive for businesses (they’re actually hugely beneficial):

  1. Factoring can raise money for your business, fast

Factoring deals often happen in less than 24 hours, and this quick turnaround can give your business critical capital that expands operations immediately. The other alternatives are to apply for loans or wait to hear back from your customers- and neither usually happens very quickly. Small businesses don’t have weeks to wait or months to wait for income, businesses need immediate action.

  1. Businesses that factor can bring in money without filing for loans

Debts can be useful to build businesses, but it can be extremely risky. This is because businesses badly need capital in many phases of development. If you don’t take action for your business now, you’re going to have to have a loan. The more immediate the loan, the more expensive it will be. Factor costs are fixed, and take care of a very important aspect of your company- the cash flow that makes your company grow.

  1. If your business can’t get a loan, factoring could be a great alternative

It’s never been easy to get business loans, but now it’s even more difficult because so many businesses fail. Banks ask for higher and higher rates and refuse to give money to businesses that do not have an extensive credit history. If your business hasn’t been around long, has had problems making payments, or doesn’t have a lot of spare capital it’s unlikely that your business can get the loan that you need. In these circumstances, factoring services are some of the only options for businesses.

  1. Often, businesses have collection departments that are non-existent or understaffed, but a factoring company’s isn’t.

Does your business have several employees dedicated to paying the bills, filing invoices, and contacting clients? If you do, you don’t need them anymore because factoring provides one of the cheapest, most efficient services out there. Not only do factors provide your business with money in 24 hours; they also keep track of your invoices and tardy customers, because they’re getting paid for it (it’s built into their fee). So not taking advantage of it is poor business practice. Paying a factor is cheaper than keeping your credit and collection employees. The factors have a professional staff trained in collecting invoices; you don’t have to worry about that anymore.

  1. Factoring is inexpensive!

The “high costs of factoring services” are grossly misunderstood. In reality, most factor services are inexpensive when you compare what it costs to not have that money right away and to have employees dedicated to collecting payment. Plus, factoring services usually get money from clients within 30 days. This means that when businesses factor, the cost of the service is usually about 2 or 3 percent for nearly a month of financing for amounts up to 75-80 percent (and the money is received right away).

Whenever you assume that factoring services are too expensive, you should also yourself a few questions:

– Could you get needed capital (such as a bank loan?) the next day?

– How much would it cost, even for a small loan?

– Is your understanding of the costs of financing accurate? Have you considered the benefits of factoring?

More often than not, you’ll be pleasantly surprised with the results that you find when you consider the benefits of factoring. Factors free your business from worrying about having the money to grow your business.

Factoring 101

Usually the first question I get when I say my company does factoring is “What’s factoring?”.

What is factoring? Factoring involves the sale of invoices to a factoring company. A factor will provide advances against these purchased invoices and will also take care of the collection of these invoices.

Why do companies sell invoices? Companies that are growing often can’t wait for payment from their slow paying customers. Through factoring, companies can quickly convert their invoices to cash in order to meet their immediate financial demands like paying employees, paying suppliers or paying rent.

What is an advance? When a factor purchases invoices from a client, the client can borrow up to a certain percentage of the invoice amount from the factor. This is called an advance and enable the client to borrow up to 80% to 90% or more.

How can I afford to use a factor when my profit margin is very low?An increase in sales realized through factoring can result in higher net income. Companies should weigh whether they can increase their net income/profit by working with a factor. Overhead costs do not necessarily increase in proportion to sales.

Who can factor? Factoring is not limited to a specific industry. Any company that sells products or provides services on terms is a candidate for factoring.

Why should I not go to the bank? Banks’ credit requirements are often much stricter than a factor. Banks also require financial statements that reflect several years of profitable operations and positive cash flow.

What is a factor guarantee? The easiest way to understand factoring is to think of it as a credit card for the business. When a customer makes a purchase and presents his credit card, the merchant transmits the information and requests a credit approval. If the amount is within the purchaser’s credit limit, the credit card company approves the transaction and agrees to accept the risk in case the purchaser is financially unable to pay. When a factor approves a customer and issues a payment guarantee, the related invoices are called approved or non-recourse accounts.