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Business Reports (415) 878-6276
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As ‘buy now, pay later’
plans grow, so do delinquencies
NEW YORK (AP) — Americans have grown fond of “buy now, pay
later” services, but the “pay later” part is becoming
increasingly difficult for some borrowers.
Fintech cloud payments providers continue to see
an increase in the number of card testing attacks globally.
They advise you and any of your service providers to be
diligent, increase your awareness and review your current
detection controls to help to prevent these types of fraudulent
attacks.
What can you do?
A fintech cloud payments provider will notify you of any
suspicious authorization activity that may be potential card
testing. Working in partnership with the Card Brands, fintech
cloud payments providers have produced this list (below) of best
practices to assist with any mitigation efforts.
If your payments programming and
security reside on your POS equipment and require periodic
updates from a reseller, you may have a big competitive disadvantage.
Are you with a reseller? Compare with one of the three fintech
cloud payments providers. Stay competitive and protect your
cashflow operations with continuously updated current payments
security, programming and up-to-the-minute best practices.
Leverage authentication and CAPTCHA controls to prevent
automated transaction initiation by bots or scripts (e.g. 5
authorizations from one IP address or Account)
Utilize fraud detection systems that support device
fingerprinting and botnet detection
Use a layered validation approach that employs Card
Validation Codes and Address Verification Services
Analyze time zone differences and browser language
consistency from the cardholder’s IP address and device.
Classify these transactions as potentially high risk and
perform more stringent reviews
Inject random pauses (i.e. throttling) when checking an
account to slow brute force attacks that are dependent on
time, especially for Bank Identification Numbers (BINs) that
have been determined to have a high fraud incidence
Include IP address with multiple failed card payment data in
a fraud detection blacklist database for review and analysis
In addition to velocity checks for small and large
transactions, use velocity checks for low amounts or
authorization-only transactions
Look for excessive usage and bandwidth consumption from a
single user
Look for multiple tracking elements in a purchase linked to
the same device (e.g. multiple transactions with different
cards, using the same e-mail address and same device ID)
Look for logins on a single account coming from many IP
addresses
Review logins with suspicious passwords that hackers
commonly use
Lock out an account if a user guesses the username/password
and any account authentication data incorrectly on “x”
number of login attempts
Could a recession be good for America’s small
businesses?
Driven by digital transformation, changing consumer and
merchant preferences are creating growth in alternative payments
at the expense of traditional plastic card use. Take a look at
four critical elements highlighting the shift to alternative
options from traditional card payments:
All alternative payment methods are growing in
Europe: While alternative payment methods have been growing
steadily, their adoption has been accelerated by the
pandemic, further boosting ecommerce and therefore online
payments.
Cards are expensive for merchants — and
customers: For Wilson, one of the biggest reasons for the
rise of alternative payment methods is that they’re more
cost effective. “There’s certainly a move by merchants to
accept different types of payment because it’s cheaper for
them,” he tells Sifted. “Merchants are paying anything up to
3% of transactions and they also have the costs of
chargebacks and other contingent costs of accepting cards.”
BNPL is booming: One of the biggest
contributors to the rise of alternative payment methods is
BNPL, which is used to fund £4 out of every £100 spent in
the UK. Wirth attributes its popularity to the ease of
getting credit, without relying on the big players.
Open banking payments are on the rise:
Policymakers in Europe and the UK brought in open banking —
where banks open up and share their data with third parties
to provide additional services — in 2015 and payments have
been a key driver of its adoption.
While the figures presented
show that alternative payments still trail the scope of
traditional payments, there is clear growth and scale
opportunities to continue innovation and disruption.
Easy access to
capital for operations, expansion, and refinance
Saved by online lenders, businesses say
they’ll borrow again 05/26/2021
NEW YORK (AP) — Some small businesses forced to
turn to online lenders for pandemic relief are making those niche
players a bigger part of their financial game plan, and are even
considering dumping their traditional banks altogether.
Loans from online lenders saved thousands of
small business owners who were unable to get COVID-19 relief loans from
big traditional lenders. Now, encouraged by getting applications
processed within days rather than weeks, these owners are becoming
repeat customers.
How Commerce Has Changed Forever
2021 Payment Trends
Finance
tech capabilities enable instant interpretation of large amounts
of data to confidently make fast decisions
through artificial intelligence and machine learning to reduce
risk, increase speed, and lower costs.
Now - more
than ever - it matters who you're with. Resellers are becoming
obsolete. The new leaders in all three areas of business
finance have revolutionized security, service, and pricing
for small businesses.
Small businesses and large enterprises grow
and reduce costs through smarter payments.
Businesses gained 5% revenue uplift.
Your small business can do the same or better.
Improved conversion
rates Accelerated entry into new markets Better acceptance
of all alternative payment methods Reduction in chargebacks and
debit card fees
Reduced
costs
15% reduction
in chargebacks 12% reduction in debit card fees
Improved efficiencies
Improved authorization:
$6.9M increased revenue Increased number of payment methods
offered: $9.9M increased revenue International growth: $13.5M
increased revenue
SmallBusinessReports.org/ecommerce2021
Are you ready for the customer economy?
The digital revolution was
accelerated by the pandemic and it transformed
business, putting unprecedented power in the hands of
customers and end-consumers.
Customers
have immediate access to a wealth of information about your
company, products and services. They’re better informed than
ever and can fact-check any statement your company makes
against the views of other customers.
Moreover,
customers across both B2B and B2C industries expect the same
frictionless experiences they receive from companies such as
Amazon, Apple and Google, in all their interactions. In
short, we’re now in the “customer economy.”
Small Business
Reports business journal for business owners
BUSINESS
FINANCE
business lending • fintech payments services • customer financing
SmallBusinessReports.org
Small Business Reports is published with editorial integrity, honesty,
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Contributing
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Small Business Reports is politically
neutral, socially diverse and colorblind.
Small
business owners borrowed more against their homes during
COVID-19: NY Fed
May 19, 2021
A
new study from the Federal Reserve Bank of New York notes that
small business owners drew further on loans against their homes
to get access to cash during the COVID-19 pandemic.
New small business
coalition to urge action on antitrust policy April 2021
A coalition of independent businesses
launched Tuesday with the goal of urging federal policy reform to
rein in the market power of top tech companies.
The coalition, Small Business Rising,
specifically takes aim at Amazon — accusing the e-commerce giant of
anti-competitive tactics and harming small firms nationwide.
“Concentrated market power is the single
biggest threat facing independent businesses,” Stacy Mitchell,
co-director of the Institute for Local Self-Reliance, said in a
statement. “Every day, we lose more small businesses because of the
abusive and anti-competitive tactics of Amazon and other monopolies.
This campaign gives America’s entrepreneurs a platform to stand up
and call on policymakers to check monopoly power and reinvigorate
the antitrust laws.”
Small Business Rising is a joint campaign
of more than 20 independent business organizations representing more
than 60,000 independent businesses across the country. Other
organizations involved in the campaign include the American
Booksellers Association, American Independent Business Alliance,
Main Street Alliance and the National Grocers Association.
The coalition is urging lawmakers to help
break up and regulate the tech companies they called monopolies.
Because rapid pivots often unearth new obstacles, we sat down
with one of the top Threat Intelligence Analysts to discuss
the impact COVID has had on retailers. Read what we know so far
inHow Commerce Has Changed Forever,
and discover new ways you can improve the customer
experience, all the way through checkout.
smallbusinessreports.org/ecommerce2021 -
click link to open report -
Mastercard, Visa to delay raising card
fees until April next year
(Reuters) - Mastercard Inc and Visa Inc on
Tuesday postponed plans to raise the fees U.S. merchants pay when
customers use cards online until April next year, as businesses
continue to struggle during the COVID-19 pandemic.
“Mindful that some merchants are still
facing unprecedented circumstances...we are delaying our previously
announced interchange adjustments in the U.S. until April 2022,”
Mastercard said.
Paycheck Protection Emergency Programs extended
Fed extends small business liquidity facility three months to June
30
WASHINGTON (Reuters) - The Federal Reserve
announced Monday it was extending by three months to June 30 an
emergency liquidity facility meant to help lenders extend relief to
small businesses under the Paycheck Protection Program.
In a statement, the Fed said three other
emergency facilities -- the Commercial Paper Funding Facility, the
Money Market Mutual Fund Liquidity Facility, and the Primary Dealer
Credit Facility -- would expire as scheduled on March 31, saying
they had not seen “significant usage” in months.
Yellen Adds $9 Billion in Funding for
Underserved Communities
Treasury Secretary Janet Yellen unveiled a new $9 billion initiative
for lenders serving low-income communities, expanding the
government’s assistance to small and minority-owned businesses
walloped by the pandemic.
Small-business requests for money from the
federal government’s signature Covid-19 relief initiative are
running well below last year’s heady pace, prompting changes in the
program’s final month to reach the hardest-hit businesses.
Biden faces backlash over small business
rescue overhaul
The backlash is the latest in a series of controversies around the
SBA's handling of the program.
New Biden administration rules overhauling the way
small business loans are doled out will potentially leave thousands
of sole proprietorships and the self-employed on the sidelines,
despite the president's pledge to give them better access to
pandemic aid.
The Small Business Administration quietly decided
that the benefits that President Joe Biden promised to "one-person
businesses" won't be available to many of those who have already
received aid from the program.
Paycheck Protection Program to
Offer Exclusive Loan Application Window for Smallest Firms
February 22, 2021 Wall Street
Journal (subscription)
The federal government’s signature coronavirus-relief
program for small businesses will accept applications exclusively from
companies with fewer than 20 employees for 14 days starting
Wednesday, according to Biden administration officials
Banks press Treasury, SBA to fix 'systemic'
small business loan glitches
January 25, 2021 Politico
Banks on
Monday warned the Biden administration that the restart of the
government's massive small business rescue program is facing significant
operational problems.
Congress approved $284
billion to restart the Paycheck Protection Program (PPP), allowing
some who already received loans from the program to get a second round
of aid.
Who Qualifies for a Second Round of
Small-Business Relief? January 19, 2021 New York Times
P.P.P. 2.0 makes changes including eligibility
and limits for some loan sizes. Here’s what you need to know.
Who is eligible? The
new PPP funding is available to both first-time applicants and returning
borrowers.
2021:
The Year of Innovation Businesses embrace
innovation to stay competitive
How a winery emerges in 2021
as a vibrant stronger business
Wineries were hit hard, like
many businesses in other industries.
Customers disappeared. Revenue ceased. It seemed like it happened almost
all at once.
Winery
customers were primarily restaurants and wine-tasting tourists,
including locals.
One winery we know was well established in a rural vineyard location; they had no busy
street traffic, no outdoor seating, no take-out or delivery,
a poorly designed online store, and no contingency plan for
such unimaginable
sudden business devastation.
What did they do?
First, they continued to make wine.
Second, they decided to innovate to stay competitive.
They called a business finance agency.
They worked with their agent to quickly accomplish the
following at low cost:
CHECKLIST ...
Where does your business innovation stand?
— PPP Forgivable Funds This winery was among the first businesses to receive PPP
forgivable funds so they kept a skeleton crew of employees
in survival mode and started making improvements.
—
Business Loan
They also received a SBA 7(a) business loan for working
capital which was quicker, easier and larger than expected.
SBA loans now are 90% guaranteed by the Fed so banks have
low risk, and there are no loan fees for lenders or
borrowers.It is
the golden age of small business finance. If they had not
qualified for the SBA loan, they would have qualified for a
short term bank loan or flexible private money from
trusted sources.
—
Smart POS System
They immediately installed a smart Point-of-Sale system with
fully integrated payments services built into an online
store for both wholesale and retail. This replaced an
older website that had attempted to sell
online with a basic shopcart and several different tech
sources. It also replaced an
obsolete
payment card processing service.
The smart POS system is a cloud hosted service -- easy,
efficient, never needs attention -- that delivers superior security, service, and
cost with unlimited capacity. It is fully integrated with key areas of the business
(both wholesale and retail) for inventory, pricing &
discounts, payments processing, sales tax handling, employee
management, loyalty marketing, robust reporting, and remote
access. They are taking advantage of 24/7 same
day funding and extreme security to
protect customer data.
—
Marketing
They focused intently on automated email marketing and
loyalty rewards built into the
POS system to communicate with customers and attract new ones, greatly expanding and segmenting their
customer databases.
—
Online Store
Their smart POS system is fully integrated into a
state-of-the-art online store with mobile payments. The
online store seems similar to Amazon and is extremely
easy to set up and manage. The POS system, payments
services, and online store are
made for each other and are from the same source, Now, with online orders and mobile payments, they are setting up curb
pick-up for their local customers.
—
Robust Reporting They were better informed, more efficient, and made smarter decicions
with all the data from key areas of the business compiled in
one place with various reports instantly available in real
time.
—
Customer Financing
Anticipating future sales growth, they installed
Customer Financing Installment Loans in their online store –
separate wholesale and retail -- for orders over $500.
—
Customer Delivery Now, they are exploring futuristic (potentially realistic) home delivery via drone…
Smoothly, under pressure, the winery quickly innovated and reinvented their business
at low cost.
They expect to emerge in 2021 as a thriving, stronger, vibrant
business prepared to compete and grow.
The winery’s new fully integrated operations engine has only two finance
tech sources, both of them innovative, reliable, easy,
inexpensive cloud services -- made for each other -- with superior security, service,
and cost.
W
hen their
restaurant customers start ordering again, and when their
wine-tasting customers return, the winery will have two
successful stores, one digital, one physical, for two profit
centers -- where before, they had only one.
2021: The Year of Innovation
for Competitive Growth
~ the editors
CFO Journal Dec. 22, 2020
U.S. Finance Chiefs Expect Growing
Revenue, Wages and Employment Levels in 2021
CFOs forecast their companies’
revenue to rise 6.9% in 2021 after 0.3% gain this year
Chief financial officers at U.S.
companies are optimistic the country’s economy as a whole—and
their businesses, in particular—will recover in 2021 despite
worries about potential tax rate changes and higher labor costs.
Finance chiefs expect their companies’
revenue to rise by an average of 6.9% next year, up from a 0.3%
increase forecast for 2020, according to a survey by Duke
University’s Fuqua School of Business and the Federal Reserve
Banks of Richmond and Atlanta. Wages, prices and employment
levels also are forecast to increase, the survey of about 300
CFOs found.
“CFOs are seeing over the cloud of
the pandemic,” said John Graham, a professor of finance at
Duke University who oversaw the survey, which is due out
Tuesday. “Some of the growth that we will see next year will
be coming from the low base in 2020.”
Customers
watch a football game at the Courtyard Brewery in New Orleans. The
brewery has had difficulty getting funding.
The Wall Street Journal
Small businesses that cleared the hurdle
of the coronavirus shutdowns are now encountering an
all-too-familiar obstacle: Banks don’t want to lend to them.
The Paycheck Protection Program funneled
$525 billion in forgivable loans to millions of small businesses
in the pandemic’s early days. Yet that massive infusion masked a
yearslong contraction in small-business lending that happened
alongside a big-business borrowing boom.
In 2007, banks held $721 billion in
small loans to businesses and small commercial mortgages of $1
million or less, according to an analysis of bank regulatory
filings by Florida Atlantic University professor Rebel A. Cole.
By 2019, such loan balances had fallen around 6% to $680
billion. Bigger business loans and commercial mortgages,
meanwhile, more than doubled to $2.82 trillion.
There are a few reasons for the credit
chasm. Thousands of community banks disappeared over the past
decade, removing the main funding source for many of their local
businesses. Small loans are also far less profitable: Bankers
say it costs about the same to process an application for a
$100,000 loan as it does for a $1 million one.
Lenders have further pulled back during
the pandemic, tightening underwriting standards for small
businesses this summer to a degree unseen since the last
financial crisis, according to a Federal Reserve survey of loan
officers.
UCLA Anderson Forecast Expects Robust Economic Recovery to Begin in
Spring 2021
Get ready for another Roaring ’20s
LOS ANGELES, Dec.
9, 2020 /PRNewswire/ -- The quarterly UCLA Anderson Forecast
anticipates positive economic news on the horizon with
robust growth of 6% in the second quarter of 2021. After that,
growth rates should remain above 3.0% well into 2023.
"We expect the economy will reach its
previous peak by the end of 2021," said senior
economist Leo Feler.
UCLA Anderson Forecast is one of the most
widely watched and often-cited economic outlooks for California and
the nation.
UCLA Anderson School of Management is among the leading business
schools in the world.
Goldman Sachs has predicted that online
shopping will expand by 19 percent each year during the next three
years to come, which marks a rise from its past forecast of 16
percent.
“At an enterprise level, we’ve seen an
acceleration in innovation over the course of the crisis as
companies have rolled out curbside pick up programs, contactless
checkout, personalized consignment deliveries, and retailers and
marketplaces have adapted to reflect the shifting needs of consumers
focused on the new essentials,” the firm said in the report.
Goldman Sachs also noted that eCommerce
penetration rose to more than 40 percent in May from 16 percent of
retail spending domestically in the first quarter of 2019. The firm
noted that “traditional retailers” such as Kroger and Target notched
“triple digit growth” in online shopping revenues and eCommerce
platforms such as Etsy and Alibaba saw “surging demand.”
Small Businesses Are Shut Out of The Greatest Borrowing Binge Ever
“Capital markets access has become a determiner of life or death for
business.”
Unprecedented government stimulus has allowed more
companies to borrow at lower rates than ever before. Yet
amid the credit boom, smaller firms that power America’s economic
engine are often being shut out, hamstringing the recovery just as
it begins.
The Federal Reserve’s pledge to use its near limitless balance
sheet to buy corporate bonds has aided stricken airlines, oil
drillers and hotels. It’s also helped companies from Alphabet Inc.
and Amazon.com Inc. to Visa Inc. and Chevron Corp. access some of
the cheapest financing ever seen. All told, firms have sold about
$1.9 trillion of investment-grade debt, junk bonds and leveraged
loans this year, according to data compiled by Bloomberg.
But for companies not large enough to tap fixed-income markets, the
outlook is much more dire. Banks are tightening conditions on
loans to smaller firms at a pace not seen since the financial
crisis, while many direct lenders that have traditionally focused on
the middle market are pulling back or turning to bigger deals
instead. What’s more, the Fed’s emergency lending programs for mid-sized businesses and municipalities have been criticized as
slow, complex, and largely inaccessible.
Some 70% of bank senior loan officers surveyed by
the Fed said they have tightened lending standards on loans for
small commercial and industrial firms in the third quarter. That’s
the highest proportion since late 2008. The trend also extends to
mid-size and larger firms as well, though the latter enjoy
unprecedented access to capital markets. About 54% said they
increased premiums for small borrowers, the most in over a decade.
A lack of bank credit for small and medium-sized firms could tip
many into bankruptcy, adding to the thousands of local businesses
that have already quietly disappeared amid the pandemic’s mounting
devastation. Given the sector employs roughly 68 million Americans
-- Fed Chairman Jerome Powell calls it America’s “jobs machine” --
and is critical to regional economies across the U.S., a prolonged
inability to access financing runs the risk of stalling the nascent
rebound.
Small Business Bank Customers Turn to Alternate
Lenders
A strong data and analytics approach will help banks better
determine the health of businesses, which may be masked by furlough
and payroll protection schemes. A data-driven view will give banks a
broader context of the current environment, as well as how consumer
behavior has changed.
US banks will face up to $320 million in credit
write-offs this year due to the pandemic, according to a recent
report from consulting firm Accenture.
Athough banks may be tempted to pull back
dramatically on lending, demand for credit will ultimately be met,
either by non-traditional lenders – such as big tech and fintechs –
or by companies offering financing for their own products and
services.
“If banks attempt to aggressively reduce offers of
credit, what might start as a slow trickle of customers turning to
alternate lenders could quickly become roaring rapids that can
drastically change the tide of lending,” McIntryre said.
The economy is running on borrowed time and money,
as government stimulus props up shell-shocked businesses and the
accounts of tens of millions of jobless Americans.
Contactless payments win out among health
and safety concerns
Given that new consumer priorities are
expected to persist indefinitely, the shift to contactless presents
a significant opportunity in the payments landscape. Publicis
Sapient suggests that this new reality is here to stay, and that
there are widespread possibilities in this regard.
“These findings suggest that the move away from
cash is solidifying. Contactless technology will be expected and
will continue to shape the future of travel and dining, providing
safer ways for guests to interact, while further integrating digital
tools into new experiences,” said the firm in a statement.
The natural reaction for most has been to turn online for their
purchasing needs, be it for groceries or other products. Publicis
Sapient reports that more than 70% of consumers across these markets
have shopped more online in the last three months than they usually
do, and nearly half reported that this will continue for the
foreseeable future.
At the same time, restrictions are being lifted in countries across
the globe, and visiting public places is gradually starting to
normalize. As people brave crowded areas, Publicis Sapient notes
that they remain wary of infection risks, with many placing health
and safety conditions as a top priority when venturing out.
Small Businesses Are Dying by the Thousands — And No One Is Tracking
the Carnage
While the businesses are small individually, the collective impact
of their failures could be substantial. Firms with fewer than 500
employees account for about 44%
of U.S. economic activity,
according to a U.S.
Small Business Administration report,
and they employ almost
half of
all American workers.
To be sure, small business attrition is high even in normal times.
Only about half of all establishments survive for at least five
years, according
to the SBA.
But the swiftness of the pandemic and the huge drop in economic
activity is hitting hard among typically upbeat entrepreneurs. About
58% of small business owners say they’re worried about permanently
closing, according to a July U.S.
Chamber of Commerce survey.
Yelp Inc.,
the online reviewer, has data showing more than 80,000 permanently
shuttered from March 1 to July 25. About 60,000 were local
businesses, or firms with fewer than five locations.
Shoppers Move Online Faster Than Payments
Firms Expected
“For merchants, moving online is existential. It is how they will
stay in business. They are jumping in with both feet, and not just
dipping their toes in the water. It’s not hyperbole that we’ve seen
a three- to five- year acceleration. That’s the math.”- PayPal Chief Executive Officer Dan Schulman
"Revenue from processing online payments
surged 25% as more merchants started to let customers make
purchases online. This was always our plan, but that was our plan
two years down the road. It’s really brought ahead a few years of
growth in the business.” -Global
Payments Chief Executive Officer Jeff Sloan
"Visa
has seen online spending excluding travel increase by 25% from a
year earlier every week since mid-April, twice the growth it was
generating before the pandemic." - Visa Chief Financial Officer
Vasant Prabhu
“This muscle memory is building up with consumers. They have come to
realize that experience works really well.” - Mastercard Inc.
Chief Financial Officer Sachin Mehra
Walk-In Retail Exodus
Main Street Catastrophe as Foot Traffic
Runs Home
Local Store Customers Not Present
What is your finance strategy?
Where is the customer email &
purchase preference data?
We see two scenarios for most walk-in
retailers and their suppliers:
1.Wait for
absent customer foot traffic to return after unknown duration;
or
2.Follow
retail customers home where they shop online – and deliver from
the stores
Few businesses can lose money
indefinitely waiting for walk-in customers to return.
Main Street walk-in
retailers are following their customers home with fully
integrated online stores for ordering with shipping, home
delivery or curb
delivery from their retail stores.
Businesses with
customer email and preference data are growing and prospering as
online retailers.
Suppliers and retailers
that cannot reach local retail customers online will need to merge with or
acquire businesses that can grow with fully integrated
online stores.
The right way to sell
online to retail customers is NOT on third-party e-commerce
reseller platforms that might might cobble together various
e-commerce and payments applications that were not designed to work together.They
resell the various e-commerce and merchant services including payments
processing where service, security, and cost can suffer.
"Retailers and suppliers
need their own online stores securely hosted by their payments services providers and fully integrated
into their business for robust point-of-sale business management including payments, inventory, pricing, discounts, sales tax, employees,
marketing, and reporting – with secure remote access."
Fully integrated online
stores are easy-to-use and easy-to-get-started from leading
payments services providers -- but are not widely available from
traditional resellers of merchant services.
Main Street retailers
will grow with two profit centers; walk-in traffic and fully integrated online
stores.
Merchants and suppliers that
invest in their own fully integrated online stores will expand
the fastest. Proceeds from SBA PPP forgivable loans may not be
used to invest in an online store. Merchants are refinancing
expensive debt and expanding with low cost 2-10 year term loans.
The value of customer
data suddenly is obvious to retailers and suppliers. It has
become crucial. Merchants that collect customer emails and
purchase preferences have a competitive advantage when opening a
fully integrated online store.
Manufacturers will
partner or merge with retailers to reach local retail customers
online. Existing stores will transform some floor space into
shipping centers and curb delivery stations.
Local customers are still
shopping and purchasing – but online at home, possibly a
long-lasting semi-permanent retail consumer trend. Amazon and
others proved
it. Now, every walk-in retail merchant needs a fully integrated online
store to grow – alongside their walk-in traffic when it returns.
The
question is:“Who has the retail customer
email and preference data?”
-by The
Editors
07/27/2020
Business owners refinancing expensive
debt and expanding with 2-10 year
term loans.
The National Federation of Independent
Business said Monday (July 27) that 71 percent of small business
owners surveyed have used their entire Paycheck Protection
Program loan and that 46 percent of PPP borrowers anticipate
needing more financial support over the next 12 months.
PPP loan use is
restricted to specific items and cannot be used for inventory, additional
marketing, or business expansion. If businesses need additional funding
for other uses, a bank term loan might be the way to go.
Currently, banks are
open for business and looking to lend. Many non-bank financing options
have dried up because of the pandemic, and there are fewer options for
small businesses than before.
Bank term loans are
great for businesses looking to obtain bank level financing. These loans
can be used to refinance existing debt or for working capital. The
process is faster and easier than an SBA loan and more competitively
priced than other options on the market. Bank
term loans help build business credit and can also be used for
working capital, debt refinance, and
new equipment purchases. --by The Editors July 2020
Small Business Owners Are Leaning on Credit Cards to Survive
7/31/2020
About 35% of U.S. entrepreneurs say they’re using personal cards or
savings during the pandemic. Half say they won’t last to 2021
without more help.
For more than one-third of small U.S. business owners, keeping their
ventures alive during the coronavirus pandemic is coming at a high
personal cost.
As the American economy faces an unprecedented
contraction and Covid-19
deaths top 150,000, the debate over reopening states has hinged in
some quarters on how to balance protecting lives
and livelihoods.
Government loans through the Paycheck
Protection Program have
helped support some
businesses,
but the accumulating months of reduced revenue are forcing
entrepreneurs to buoy their own businesses with their personal
assets and credit. Many have already succumbed.
One-Third of U.S. Restaurants Face Permanent Closure This Year
A new forecast
projects that one in three U.S. restaurants may close
permanently this year, showing how the Covid-19 pandemic is
decimating an industry that employs millions of Americans.
As many as 231,000 of the nation’s roughly 660,000 eateries will
likely shut down this year, according to an estimate from
restaurant consultancy Aaron Allen & Associates provided
to Bloomberg News. This will bring the industry’s steady growth
to a halt and mark the first time in two decades that U.S.
restaurant counts don’t climb. Restaurants have already shed
millions of jobs this year, economic data show.
These patterns -- rising virus cases, retrenching customers,
restaurants closing -- may spark an enduring change in consumer
behavior. Additionally, capacity restrictions can make it
difficult or impossible for restaurants to turn a profit.
The economic impact of restaurant closures will reverberate
beyond the industry itself, which accounts for nearly 4% of U.S.
gross domestic product and employed about 8% of America’s labor
force before the pandemic.
More Than Half of U.S. Business Closures Permanent, Yelp Says
More than half of the business closures that were temporary when
the Covid-19 outbreak began are now considered permanent,
according to Yelp
Inc.
Of the 132,580 closures listed on its website as of July 10, 55%
are permanent, up 14 percentage points from the end of June,
according to the Yelp’s Economic Average Report released Wednesday. More than 72,000 businesses have permanently
shut down, with California, Texas and Florida accounting for the
largest share.
When there’s a major outbreak in a
state, consumers are less interested in frequenting businesses
where it’s difficult to social distance, according to the Yelp
report. New virus outbreaks across the nation have led 22 states
to either reverse or pause reopenings, according to Bank of
America Corp. economists, making it more difficult for
businesses to stay afloat.
Restaurants accounted for the largest number of permanent
closures in Yelp’s report, followed by the retail and beauty
industries, bars and fitness centers. Even though many retailers
were able to shift their models to offer curbside pickup and
online ordering, those measures haven’t necessarily been enough
to sustain them in the long term, according to the report.
Small Businesses Brace for Prolonged Crisis, Short on Cash and
Customers
Hopes for a quick economic recovery from the coronavirus
pandemic have been dashed, and companies are exhausting rescue
funds. Many are shutting down or slashing jobs again.
Independent businesses were once pillars of communities,
but economic and systemic forces left many fighting for
survival. Then came the pandemic.
Defined by the Small Business Administration as companies with
fewer than 250 to 1,500 employees, depending on the industry,
there are about 31 million small businesses in the US. Last
year, they employed nearly half of the private workforce and
created 1.6 million jobs.
But
heading into the pandemic, nearly half of small businesses had
two weeks or less of cash liquidity on hand, according to a
report from JPMorgan Chase, turning forced shutdowns and lost
revenues into an immediate fight for survival.
Tidal Wave of Competitive Demand in U.S.
for Additional Small Business Funding after PPP
July 2020
A national
survey by a private lender offers insights into how long small businesses expect
their PPP funds to last and when they will need more funding.
The research represents results from a survey of 500 US small
businesses for a group of lenders. The in-house survey was conducted June
25th through June 28th
The need for additional financing after
PPP (Paycheck Protection Program) is top of mind for many small
business owners according to the findings from a survey paid for
by a bank-enabling technology platform that has grown to become
the #1 online bank network for SBA loans under $350,000.
According to the survey, 59% of those
business owners in the national sample who had taken out
financing of some type including a PPP loan since January 2020,
only expect the financing to last for 12 months or less and 79%
expect it to last for 18 months or less.
As a result, 61% of the national sample
expect to need additional financing within 18 months, with
approximately 1/3 expecting to need additional funds in 1 to 6
months, and another 1/3 in about 6 to 12 months.
“This survey illustrates that there is
a tidal wave of demand coming from small business owners for
continued access to low-cost capital. It’s vital that banks
prepare now to help the many high-quality businesses get the
capital they need to grow. This funding will not only help these
particular small businesses expand but will help renew the
national economic landscape as well.” -- editors
One way that banks can help prepare
SMBs for their next round of funding is by assisting them with
PPP Loan Forgiveness. The survey found that 70% of SMBs in the
national sample expect to apply for PPP Loan Forgiveness in the
next 60 days. Also, 48% of the businesses say they intend to
apply for additional funding with their PPP lender or primary
bank, suggesting there is a large opportunity for banks and PPP
lenders to help their small business clients with funding after
PPP.
-by The Editors
One in Five U.S. Small Firms Plan Layoffs After Using PPP
Loan
More than 80 percent of
small firms that got PPP loans say they will run out of money by
August
More than eight out of ten small
business owners who got coronavirus relief loans through the
Paycheck Protection Program (PPP) say they will run out of
funding by the first week of August, according to results from a
Goldman Sachs survey released Tuesday [July 2020].
Small businesses around the world
struggle to survive
EDITOR’S NOTE— July 13, 2020 — Small businesses around the
world are fighting for survival amid the economic fallout from
the coronavirus pandemic. Whether they make it will affect not
just local economies but the fabric of communities. Associated
Press journalists tell their stories in the series “Small
Business Struggles.”
UCLA Anderson Forecast says U.S. economy is in
"Depression-like crisis" and will not return to pre-recession
peak until 2023
LOS ANGELES, June
24, 2020 /PRNewswire/ -- In its March quarterly forecast, the
UCLA Anderson Forecast revised its outlook for the U.S. economy
downward because of the expected impact of COVID-19, which was then
still being referred to as an epidemic. Two weeks later, as the
economy began shutting down because of the pandemic, the Forecast
released the first revision in its 68-year history to assert that
the U.S. economy was already in recession.
Do you know your
business credit score? One thing all
small businesses have in common is the unrelenting need
to make money.
How each business does that is unique and
different, each with its own mix of exceptional products and processes.
Finance is the common language of small business owners, and
allocating capital efficiently is their real work.
Small
businesses account for 45% of US GDP with 88% of these businesses
employing fewer than 20 people.
What are business credit scores?
In the same manner that your personal scores serves as financial
ratings, your
business credit scores
rank the creditworthiness of your business. A number of factors
influence your business credit score, including: payment history,
credit utilization ratio, company size, industry risk, and more.
There are a few different business credit scores:
FICO® LiquidCredit® Small Business Scoring
Service℠ is used by lenders to determine the likelihood of on
time payments. The FICO SBSS score is based upon personal and
business credit history, along with other financial information.
The SBA uses this score to pre-screen applications for
commercial loans under $350,000. Scores range from 0 to 300,
where the minimum score to pass the SBA’s prequalification is
currently 140.
Dun and Bradstreet PAYDEX Score is used by
suppliers and vendors to determine what terms to extend on trade
credit (eg. net-30, net-60, etc). Scores range from 1 to 100,
higher scores indicating better payment performance.
The Intelliscore Plus℠ from Experian is
used by lenders to determine the likelihood of delinquency over
the next 12 months. Again, scores range from 1 to 100.
It’s worth noting that each scoring agency may compile different
information on the same business. Thus, it may be that all three of
your business credit reports and scores are different. (Pro tip: the
only place where you can check all three of your business credit
ratings and reports is Nav.com).
Why are they important?
As a business owner, you already know it’s important to keep
track of your business’s financial health. Good business credit
scores can help you in a number of ways, including:
Securing financing. Lenders might use your
business credit scores to qualify you for a loan, or offer you
better rates. For example, if you are applying for an SBA loan,
you are required to have a minimum
FICO SBSS score
of 140, and most lenders will look for businesses with a score
of 160 or above. It’s a good idea to check your FICO SBSS score
before starting the SBA application process.
Winning business contracts with large
organizations. Large companies, as well as the government, may
check your business credit reports before they offer you a large
contract. They do this to make sure their suppliers are reliable
and pay their bills on time to subcontractors and creditors.
Securing better trade terms. If your
business credit scores are high, your suppliers and vendors will
give you favorable terms to purchase on credit. For example, if
you are a contractor with high business credit scores, your
supplier might give you a $10K line of credit and the payment
won’t be due until 60 or 90 days after the purchase, giving you
more flexibility to control cash flow.
Learn More About Refinancing
June 2020
Some business owners have received a Paycheck Protection Program (PPP)
loan or an Economic Injury Disaster Loan (EIDL) to help rebuild during
the coronavirus economic downturn.
However, these loans have
strict use of funds guidelines and cannot be used for debt refinancing.
If payments on your current business debt are cutting into valuable
cash flow, you can save up to thousands of dollars per month by
refinancing that debt with an SBA 7(a) loan. SBA 7(a) loans are known as
the “gold standard” in small business financing:
Lower Interest Rates
Longer Terms (10 years)
Low monthly payments
The difference between debt consolidation and
debt refinancing
Debt
consolidation and debt refinancing are different. Here’s the difference:
Consolidation:
This strategy combines multiple loans into a single one. So instead of
being responsible for several separate loans, monthly payments, and
billing statements, you bundle everything and handle it with one
payment. Consolidation can also be called “simplification”.
Refinancing:
When you replace one or more loans with a completely new loan with
better rates and terms, you’re refinancing. Business owners going this
route are interested in getting a lower interest rate to reduce interest
costs and bring down monthly payments. When you refinance, you can pay
off multiple loans with your new loan.
The benefits of refinancing business debt
There
are three main reasons small business owners should consider refinancing
business debt with a low-cost loan:
Lower monthly payments
High monthly payments can severely impact your business. With
business debt refinance, you’ll benefit immediately from lower
monthly payments-often as much as 50% to 80%. The money you save can
be put back into your business.
Lower interest rates
The total cost of an expensive loan can be sky high. A new
lower-cost loan decreases the interest rate, meaning you pay less
for the money you’re borrowing.
Positive Credit Score Impact
If you have multiple loans your credit score can suffer due to your
credit utilization ratio. When you pay off high interest debt, this
ratio will go down. The credit utilization ratio is typically
focused primarily on a borrower's revolving credit. This is a
calculation that represents the total debt compared to the total
revolving credit the business owner has been approved for.
When is the right time to refinance debt?
The
right time to refinance debt is when you can qualify for a lower-cost
loan. It’s important to know that there will be costs associated with a
refinance. Make sure you’re aware of the following:
Total cost and terms
Annual interest rate
Total finance charge
Service fee
Debt reduction fee
Closing costs
Do
the math to get the result you want from a refinance.
SBA loans
SBA
7(a) loans are known as the “gold standard” for good reason. They have
low rates and 10-year terms. This leads to small monthly payments that
are manageable and help you keep a handle on cash flow. SBA loans have
gotten a bad rap in the past as being too time intensive. However, a
good business finance agency can help streamline the application
process.
SBA 7(a) loans, known as the “gold standard” for small businesses, have
low rates, long terms, and very low monthly payments.
Unlike PPP or EIDL loans, SBA 7(a) loans from $30,000 - $350,000 can be
used for marketing programs to strengthen your brand, connect with
current customers, and attract new audiences. Marketing initiatives you
can fund with an SBA 7(a) loan include:
Hiring an SEO or SEM firm to
strengthen your online presence
Increasing inventory or expanding
services
Launching traditional or digital
advertising
The SBA debt consolidation loans offered through
SmartBiz marketplace banks can be used to refinance:
Merchant cash advances
Short-term business loans
High-interest business loans
Daily or weekly payment loans
Business credit cards
Bank term loans
Bank
Term loans are term loans meant to be repaid in a shorter amount of time
than the 10-year term of a typical SBA loan. This type of loan can be a
great way to get the funds you need until you are ready for an SBA loan.
The
following Bank Term loans are available through SmartBiz marketplace
banks for debt refinance. You can also use the proceeds for working
capital and new equipment purchases:
$30,000 to $200,000 loan amounts
2 – 5 year repayment terms
Fixed interest rate as low
as 6.99%
Monthly repayments
No pre-payment penalties
*Interest rate depends on loan term and the applicant's credit and
financial profile.
Alternative lenders
Alternative lending is a broad term used to describe the wide range of
loan options available outside of a traditional bank loan. Alternative
lenders will consider borrowers who don’t qualify for bank loans due to
time in business, poor credit, or other reasons. However, there’s a
downside – and it’s important. Many alternative loans have high interest
rates and short loan terms that can make them less suitable for low cost
debt refinance.
Debt refinance examples
Business Story:
PixelCutLabs, LLC
PixelCutLabs owner Brennen Bliss prefers not to
borrow money. However, to get his business going, he had taken out high
interest loans that were crippling his cash flow. He received a low cost
SBA loan and is using the funds wisely. Bliss says, “We’re using the
funds for debt consolidation. My advice is that if you can reduce your
interest rates considerably, just do it. This loan is allowing us to
stay alive and keep growing.”
Painting with a
Twist
Mary Grupka and Lisa Scibetta own an art studio
catering to individuals and groups who want a fun night. Mary and Lisa
used credit cards and a line of credit to cover the unexpected costs,
planning to pay them back easily. However, they found themselves unable
to get ahead on paying off the expensive debt.
Mary and Lisa secured a $100,000 SBA loan from a
SmartBiz Loans marketplace bank with low rates and a ten-year term. They
immediately put the low-cost funds to work. Mary says, “Our first step
was debt consolidation. We were putting out $6,000 a month and now we’re
paying $1,100 a month. It’s a significant savings. We’re staying ahead
of the curve instead of just trying to keep up.”
Triple D Towing
Owner Milton Martinez had taken out two small
business loans that he wanted to pay off. They required daily cash
payments and were leaving him strapped. He needed to create additional
income instead of paying high interest rates. “By getting rid of the two
small loans I’m saving $15,000 – $18,000 dollars,” he says. “That’s
money I can put back into growing my business or into savings.”
[Note from the editors -- After lobbying Congress with our letter below,
members of both the House and Senate Committees on Small Business
did pass an expanded "Investing in Main Street Act of 2019."
https://finance.yahoo.com/news/fed-expands-main-street-lending-facility-with-lower-minimums-higher-risk-retention-194347770.html
Letter to Congress
Small Business Reports
business journal for business
owners
SmallBusinessReports.org
April 21,
2020
US Senate
Committee on Small Business and Entrepreneurship US House
Committee on Small Business
Letter
from the Editors:
Representing millions of small business owners in the United States of
America, Small Business Reports applauds you for your
attention to small business loans.
A floodlight of national concern illuminates a sudden interest
in small businesses and reveals the glaring lack of business
loans available to small business owners, access to capital that
large companies take for granted.
Small businesses need short term loans through online lenders
that have developed reliable accurate finance tech to quickly
qualify and quantify risk and to speed up application
underwriting for fast funding.
Small
Business Reports envisions a super highway for small
business loansoperating
with private money flowing unrestricted through a newly upgraded
digital finance infrastructure originally built and expanded by
online lenders since 2008 for funding short term business
advances and loans. It already exists and must expand.
Money pouring out of stocks is flowing to small business loans
for high yield. Small businesses will power the economic
recovery if they have access to capital from private investors.
And online lenders need access to private money in a secondary
market.
We believe you see this picture, too—along with millions of
small business owners who are paying attention, who vote, and
who can make America hum with new growth.
Sincerely,
THE
EDITORS
Small
Business Reports
How to Help Small Businesses Survive
Columbia Law School, Law & Economics Research April 10, 2020
Small businesses are among the hardest hit by the COVID-19 crisis. Many
are shuttered, and far more face cash flow constraints, raising
questions about just how many will survive this recession. The
government has responded with a critical forgivable loan program, but
for many of these businesses, this program alone will not provide the
cash they need to retain workers, pay rent, and help their business come
back to life when Americans are no longer sheltering in place.
This essay calls on regulators to find new and creative ways to work
with existing intermediaries, including banks and online lenders, who
have the infrastructure and tools needed to help small businesses get
the additional loans they need to survive and thrive. Leveraging
existing institutions could enhance the speed, scale, and scope of the
government’s response, all critical virtues in the efforts to support
small business.
SBA (7A) Business Loan Rates Drop
4.75%
for $30,000 to $5 Million
The Federal Reserve
lowered the benchmark interest rate again.
It is a great time for businesses to apply for
low-cost funding for operations, expansion, or refinance. SBA loan
rates dropped to 4.75% for $30,000 to
$5 million (Prime plus 1.5% to 2.75%).
The new finance sources pre-qualify you with a lender in less than 5 minutes without
impacting your credit score. You can get funds as fast as 7 days after
your application is completed and approved.
A soft credit pull for pre-qualification will not affect your credit
score. To process your loan application for funding, lenders will
request a full credit report from one or more consumer reporting
agencies, which is considered a hard credit pull, and it happens after
your application is in the funding process and matched with a lender who
is likely to fund your loan.
It is an opportune time for businesses to apply
for a SBA or Bank Term loan or Short-term Working Capital. Low-cost funds can be used for
operations, expansion, refinance, equipment, inventory, commercial real estate,
and more.
An
infusion of capital often can change the trajectory of a business to
help meet its goals and grow, whether it is an SBA loan, a Bank Term
loan, or customized flexible business financing.
Special Report
New Finance Sources Shift Away from
Resellers
Are you with a reseller?
This year—2020—the new sources in
all three areas of business finance shifted away from resellers to direct relationships with
businesses and merchants, eliminating the need for resellers after decades of using
them exclusively for small businesses.
Business Funding Federal
Reserve Small Business Credit Survey 2019
a wide variety of information on small business financing in
the U.S.
click here
Smart Point-of-Sale
with Customer Payments
Accelerating Automotive into the Digital Future There's mounting pressure in the automotive
industry to transform from mechanical-centric into software-defined
vehicles. Manufacturers and suppliers will have to implement
innovative software-based solutions to stay relevant and to keep up with
consumers’ expectations.click here
Customer Financing U.S. consumers' access to credit worse
than previously thought: Fed study
As many as 60 million Americans tend to have a
hard time qualifying for credit cards, according to a report
released by the New York Federal Reserve. click
here
Feature Article
Are all
three areas of your business finance tuned and aligned as one
high performance machine?
Business Loans Customer Payments
Customer Financing
How many reps does it take for all your
business finance? How well do they know your business? Do they work together toward your objectives?
The new finance sources today have the best
finance tech for superior security, service and point-of-sale business
tools. New leaders eliminate resellers after several
multi-billion dollar mergers.
Special Report
Access to Credit Good
finance news for small businesses
Bank lending standards for firms easing long-term, Fed
survey shows
(Small Business Reports) -
8/5/2019 -
The U.S. Federal Reserve’s quarterly survey of senior loan
officers showed an overall easing of standards on commercial
and industrial business loans compared with before the
financial crisis.
U.S. banks left loan standards
unchanged on commercial and industrial loans to large and
mid-sized firms during the second quarter and eased
standards on such loans to smaller firms, according to the
latest
survey of bank officers.
“Banks, on balance, reported that their lending standards on
C&I loans are currently at the easier end of the range of
standards between 2005 and the present,” the report said.
That is notable because a rise in U.S. business debt to
historic levels has raised red flags at the U.S. central
bank over financial stability vulnerability. Fed Chair
Jerome Powell said he does not see high corporate debt as
posing the same sort of systemic threat that the subprime
mortgage market did.
Here are some facts about
the U.S. economy - 2019
Jobs have grown for 106 consecutive months,
the longest streak on record.
At 121 months, this is the longest bull market in
American history.
The unemployment rate has been at 4 percent or
less for 16 consecutive months, the longest such streak
in 50 years.
Inequality remains a crucial problem, but wages are now
growing the fastest among the lowest-wage industries,
thanks to state-by-state increases in the minimum wage
and the effects of low unemployment.
The University of Michigan’s consumer-sentiment index,
which peaked at 112 in 1999, has hovered above 90 for
more than four years, something that hasn’t happened
since the 1990s.
Latino unemployment has fallen to its lowest rate on
record.
Black unemployment, too, has fallen to its lowest rate
on record, and, as the investor and Bloomberg columnist
Conor Sen points out, the unemployment rate for black
teenagers, which peaked at 48.9 percent in 2010, has
plunged to yet another record low in 2019.
Small business owners are optimistic and hungry for growth,
according to one source for online business funding
Small business loan requests in the second quarter 2019
increased by 57% over the previous three-quarter average.
Total amount funded to small businesses across the U.S. grew
by 21%:
The average loan amount among small business
borrowers increased 11%.
The number of business owners reporting
working capital as the main use of funds grew by 15%.
Funding payroll grew by 33%, and making equipment
purchases grew by 14%.
The average credit score of U.S. business
owners held relatively steady in Q2, coming in at 667.
Business owners in Washington D.C., Montana, Hawaii and
Wyoming have the highest average credit scores in the
nation.
The top small business industries funded are
construction (with an average of $17,701 per loan) and
restaurants (with an average $18,821 loan).
Small-business owners'
optimism has edged up over the past three months. In the
latest quarterly Wells Fargo/Gallup Small Business Index
survey, conducted July 8-12, 2019, the overall index is
+136, up from the +129 recorded in Quarter 2. The index is a
measure of owners' present and future optimism -- both of
which saw upticks this quarter.
Small-business owners
remain upbeat about their companies' financial outlook and
the overall national economy and appear to be planning on
expansion by applying for new credit products in the coming
year. Although the current U.S. trade and tariff situation
is being debated on many levels, relatively few
small-business owners say it is affecting their business
directly. As for challenges, owners remain concerned about
core business basics -- attracting customers, developing new
products for their business and fending off competitors.
Editors' notes:
Speculative money fleeing
the stock markets today in search of growth and relative
safety is surging to the higher risk returns of an expanding
U.S.capital market in small business funding on Main Street
with 30 million small businesses.
The strong U.S. Main Street
consumer economy today is not measurably disturbed by the recent
global economic slowdown, the 2020 election, stock markets,
trade wars, Fed interest rates, recession fears, foreign
civil unrest, wars, or the environment. Small businesses are expanding and
creating jobs.
SOURCES:Theatlantic.com, Reuters.com, Google.com
Small Business Reportssmallbusinessreports.org
Special Report
Why are some businesses more successful
than others?
Who can you trust for business lending, customer
payments, and customer financing?
Once upon a time, local bankers
provided small business loans and credit card processing
─and customer financing for larger companies. Your
local banker probably knew you.
Today ─since 2008─ local banks mainly
provide business checking and business credit cards. They are resellers
for payment card processors that now offer competitive direct accounts
to merchants. Local branches
continue to shrink in favor of online banking. And it doesn't
matter if your banker knows you.
Banks decline roughly 75% of small
business loan applications for less than a million dollars because they are not
profitable, while most small businesses are applying for under $250,000.
Yet, 45% of small businesses plan to finance their expansion in
the second half of 2019. - Pepperdine University -
Graziadio Business School - July 2019
Only about 20% of small business
owners have trusted the Internet for business finance. They tend to be
younger businesses with owners that have time to search online, decide or guess
which website to trust, and apply on a web form for small amounts.
Fortunately for the small
businesses that plan to expand, the local banker is
being replaced by the business finance agency for business funding,
customer payments, and customer financing. A business finance
agency is equal parts personal relationship and finance tech with trusted
proven sources based on experience.
However, many business finance agencies are
small and some may not be found easily onlne by searching because they
do not want to be crushed by crowds of unqualified applicants. So
they can be hard to find.
POINT-OF-SALE BUSINESS TOOLS WITH CUSTOMER PAYMENTS
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#1 payments solution in a robust digital
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Three fast questions your business finance agency should
ask you:
Business Funding
—SBA business loans, bank term loans, short-term working capital
1.
How much money could you use for expansion, operations, or
refinancing?
Customer Payments—reliable
business tools free up time and eliminate resellers 2. How
long have you been with your payment services provider - over a year?
Customer Financing
—easy point-of-sale competitive advantage boosts revenue 3.What
percent of your sales is from customer
financing?
How many reps does it take for all your business
financing?
—more than one?
Are all three areas of your business finance aligned for
efficient growth?
□
Business Funding
for Expansion, Operations, Refinancing SBA Business Loan
up to $350,000—non-SBA Bank Term Loan up to $200,000 —SBA Commercial
Real Estate Loan—Business
occupied .. up to $5 million Short Term
Working Capital — Flexible & Quick —up to $500,000
□Customer Payments with Smart Point-of-Sale
Tools
—eliminate
resellers with superior service, security and business tools
Business owners free up hours with easy reliable point-of-sale tools
and robust reporting in a digital cloud office
□Point-of-Sale
Customer Financing to Increase Revenue
—more approvals - one lender - great credit to no credit .. installment loan,
not a credit card Consumers apply on any browserfast & easyNo merchant fees, no setup,
no risk, no minimums
Business owners poised to end 2018 on a high note. Four in five
entrepreneurs anticipate year-over-year revenue growth, and many plan to
expand their businesses.
Strengthening these growth plans is a groundswell of economic optimism
as business owners are increasingly confident in the continued positive
performance of both the national economy and their local economies.
American small businesses plan to finish 2018
with a bang, according to the fall 2018 Bank of America Business
Advantage Small Business Owner Report. And they’re optimistic about the
year ahead.
Small Business Optimism Is Up for 2019
Wells Fargo/Gallup Small Business Index
Separately, according to the latest quarterly
Wells Fargo/Gallup Small Business Index, optimism among small business
owners increased substantially over the last quarter. The quarter,
according to the index, received a score of 129, which is 11 points
higher than last quarter’s score of 118, and apparently the highest in
the survey’s 15 year history.
Small business owner survey respondents said
positive business financials are largely the cause for their optimism.
Eighty percent of respondents rated their financial situation as “very
good” or “somewhat good,” while 84% said they expect their financial
situation to be “very good” or “somewhat good” in the coming year. A
record 55% of business owners reported increases in revenue, with 62%
anticipating revenue increases in 2019. In addition, 74% said they had
good cash flow in the past 12 months, and 78% said they expect their
businesses to have good cash flow over the next year.
Bank of America Small Business Owner Report
The Bank of America Small Business
Owner Report is a biannual study exploring the concerns, aspirations and
perspectives of small business owners throughout the U.S. and in 10
major cities.
Eighty percent of
entrepreneurs are confident their 2018 year-end revenue will exceed that
of 2017. In addition, over the next 12 months:
Fifty-seven percent of
business owners believe their revenue will increase (vs. 51 percent
in fall 2017).
Sixty-seven percent
plan to expand (vs. 59 percent in fall 2017).
Twenty-seven percent
plan to hire (vs. 16 percent in fall 2017).
Fifty-five percent are
confident the national economy will improve (vs. 46 percent in fall
2017).
Fifty-four percent
express similar confidence in their local economies (vs. 48 percent
in fall 2017).
Fifteen percent intend
to apply for a loan (vs. 8 percent in fall 2017).
Competition for talent
heightens as small business hiring ramps up. As business owners make
plans to hire in the year ahead, they acknowledge that identifying and
retaining employees has become a significant challenge. Among business
owners who sought to hire new employees, 50 percent say the tightening
labor market had a direct impact on their ability to find and hire
qualified candidates. In response, business owners have modified their
hiring strategies to find and recruit top talent by:
Shifting to a more
flexible culture in terms of hours, location and extra time off (25
percent).
Using social media
more actively (23 percent).
Offering higher
salaries (17 percent).
Promoting how the
business impacts the local community and highlighting charitable
work (12 percent).
Using an outside
recruiter (9 percent).
The top economic issues
concerning business owners are:
Health care costs (63
percent vs. 72 percent in fall 2017).
Interest rates (44
percent vs. 43 percent in fall 2017).
Trade policies (43
percent; issue not surveyed in 2017).
Despite unique
challenges in managing a small business, entrepreneurs love what they
do. Ninety-one percent say the added stress of entrepreneurship has been
worth it, and 90 percent would recommend that others follow in their
footsteps. Business owners are feeling the holiday spirit, as 83 percent
plan to offer at least one holiday perk to their employees. The top
holiday perks being offered are:
Office closures (50 percent)
Flexible hours or vacation time (41 percent)
Salary bonuses (38 percent).
Wells Fargo: Small business optimism soars on strong
revenues and cash flow
The Q4 survey marks a record-high score in the
survey’s 15-year history.
Optimism among small business owners jumped
significantly in the latest quarterly Wells Fargo/Gallup Small Business
Index, with an overall Index score of 129. That is 11 points higher than
last quarter’s score of 118 and the highest in the survey’s 15-year
history. The fourth quarter 2018 survey was conducted Nov. 8–14,
immediately following the midterm elections.
Survey respondents said positive business financials drove the record
high.
Eighty
percent of respondents rated their financial situation as very good or
somewhat good, and 84 percent said they expect their financial situation
to be very good or somewhat good over the next year.
A record 55 percent of business owners reported
increases in revenue, with 62 percent estimating revenue increases in
the next year. In addition, 74 percent said they had good cash flow in
the past 12 months, and 78 percent said they expect their businesses to
have good cash flow over the next year.
“As we head into the end of 2018, small
businesses are continuing to indicate that they are thriving and hopeful
for the future,” said Andy Rowe, Wells Fargo head of Customer Segments.
“With owner optimism hitting its highest level in the 15 years Wells
Fargo has been conducting this survey, we are excited to see what this
will mean for their continued capital investment and growth.”
“With
the increases we’ve seen in business owners’ revenues and the high
degree of confidence business owners have in their cash flow, it’s not
surprising that taxes remain a key issue for them,” said Mark Vitner,
Wells Fargo managing director and senior economist. “While the number of
business owners that don’t expect changes to their operating environment
remains high, most see the current environment as very good and many
business owners are looking to expand their business in 2019.”
Top challenges continue to be hiring and attracting new
business
For the third consecutive quarter, survey
respondents said hiring and retaining staff was their top challenge, at
18 percent. In addition, the number of business owners who expect to
have an increased number of openings in the next 12 months remained
steady at 35 percent.
Other challenges cited include attracting new
business (10 percent) and taxes (9 percent), both of which have
continued to be top issues for small business owners.
December 2018
Small
businesses are on an upward trajectory
·
Anticipated small business loan demand is at its highest level since
2012, with 48 percent planning to take out a loan in the next 12 months
·
Nearly two-thirds of small businesses (65 percent) anticipate an
increase in sales, compared to just 5 percent that expect a decrease
·Small
business economic confidence ratings outpace those of consumers by more
than two times (43 percent vs. 21 percent)
SOURCE: PayNet / Raddon 2018
Small businesses are in full-on growth mode. It
is a good time to expand, compete and grow.
Businesses are
looking to banking partners for reasonable capital infusions, but are
discouraged by slow reviews, impersonal processes and denials.
Following the 2008 financial crisis, a combination of regulatory and
risk factors lowered credit volume among larger financial institutions,
hampering the pace of recovery. The lingering effects of these factors
continue to hamper small business growth today.
Record-Breaking
Small Business Optimism Fuels Confidence to Expand
Example only - No products or services are sold on this non-profit educational informational resource
Special Report
November 2018
Cost of a Customer Data
Security Breach
Lost Trust
= Lost
Business
COST: $148.00 per stolen record on average
A
stark warning to merchants about their payment card processing: Many resellers - which includes banks - cannot keep up with
new
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that some merchants do not survive.
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“One-third of the cost of data breaches is from
lost business”
IBM / Harris (2018) found that 75 percent of consumers in the U.S.
say that they will not do business with companies that they do not trust
to protect their data.
The number of businesses experiencing losses from
cybercrime is increasing in North America, and so is the scale of their
losses. The number of businesses reporting losses of more than a million
dollars is rising.
• 60 per cent of small to
medium-sized businesses go out of business within six months of a cyberattack • 70 per cent of cyber attackers deliberately target small businesses • 71
per cent of cyberattacks hit businesses with fewer than 100 employees •
$180,000 is the average loss that small- and medium-sized businesses sustain
from cyberattacks
Small Business Optimism Shatters Record
Previously Set 35 Years Ago
Expectations translate to financing growth,
profits according to NFIB’s leading indicator survey
Washington,
D.C. (September 11, 2018) —
The NFIB Small Business Optimism Index soared to 108.8 in August, a new
record in the survey’s 45-year history, topping the July 1983 highwater
mark of 108. The record-breaking figure is driven by small business
owners financing and executing the plans they’ve put in place due to
dramatic changes in the nation’s economic policy.
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U.S.
Small Businesses Anticipate Growth And Expansion
NEW
YORK, April
30, 2018 /PRNewswire/ -- According to The Harris Poll, nearly
three out of four small businesses in the U.S. plan to expand their product and
service offerings this year.
With strong expectations for growth, small businesses are
well-positioned to make improvements and upgrades. A total of 72 percent of small business
owners report that expanding product and service offerings
within current geographies is the top priority for this year.
Investment
Priorities, Sources and Key Issues
When
it comes to investing in their businesses, 50 percent say technology
is at the top of the list, followed by equipment upgrades (47 percent)
and hiring staff (36 percent).
To
that end, over half of small businesses expect hiring at their company
to increase over the next year.
Despite
these expectations, small businesses remain focused on a number of key
issues. Data security is the top concern for small businesses (68
percent), followed by continued economic uncertainty (64 percent) and
rising inflation rates (61 percent).
The
top ways in which small businesses have capitalized their company in
the last five years include internal sources of funding (38 percent),
secured bank loan (33%), and leasing/equipment financing (22 percent).
Understanding these key trends can help small businesses innovate
and contextualize potential challenges. With
data security as a top concern, we understand why half of small businesses
are looking to upgrade technology at their businesses.
·Small
business optimism and plans for expansion have reached historic highs.
oIn
March, the NFIB’s small business optimism index reached its 16th
consecutive month in the top 5 percent of 45 years of survey readings.
oAccording
to Wells Fargo, small business optimism is at an eleven-year high.
oIn
April, NFIB’s monthly jobs report showed that a net 20 percent of small
business owners reported job creation plans, remaining at a historically
high level, and 33 percent reported raising compensation, the highest
reading since November 2000.
Small
Businesses Struggling With Cybersecurity Breaches of Customer
Payment Data
The number of businesses experiencing losses from
cybercrime breaches of customer card data is increasing in North America, and so is the scale of their
losses. The number of businesses reporting losses of more than a million
dollars is rising.
• 70 per cent of cyber attackers deliberately target small businesses
• 71 per cent of cyberattacks hit businesses with fewer than 100
employees • $180,000 is the average loss that small- and medium-sized
businesses sustain from cyberattacks • 60 per cent of small to medium-sized businesses go out of
business within six months of a cyberattack
"Over the next five years, smaller payment processors and resellers may
not have the resources and technology needed to keep up with continuous
upgrades in security required to protect merchants' customer payment
data from fraudulent hacker breaches."
Small
business owners embody the American pioneering spirit and remind us that
determination can turn aspiration into achievement.
CRITICAL
TO THE ECONOMY: Small businesses are responsible for a significant portion
of U.S. economic activity and are vital asset to the economy.
·There
are nearly 30 million small businesses in the United States employing over
57 million people, according to the Small Business Administration (SBA).
oA
2012 study found that small businesses produce nearly half of private
non-farm gross domestic product (GDP) in the United States.
·Small
businesses, defined as firms employing fewer than 500 employees, play a
huge role in the U.S. economy.
oSmall
businesses comprise over 99 percent of all firms with paid employees in
the country.
oOver
97 percent of all trade activity comes from small businesses, generating
one-third of the United States $1.4 trillion in total known exports.
oSmall
businesses employ 48 percent of private sector employees and represent
41.2 percent of private sector payroll.
oSmall
businesses are diverse, representing 8 million minority-owned businesses.
·Small
businesses are an engine for job creation.
oHistorically,
small businesses are responsible for two out of every three net new jobs
created in America.
oOver
half a million new small business are launched each year in the United
States, creating more than 2.5 million new jobs per year, according to the
Bureau of Labor Statistics.
·Small
businesses are diverse, representing millions of women and minority owned
businesses.
oAccording
to the SBA, there were 9.9 million women-owned businesses as of 2012,
including 4 million firms owned by Latinas and African American women.
oAlmost
99.9 percent of women-owned owned businesses are small businesses.
oWomen
owned small businesses employ 7.3 million employees across the Nation.
oSmall
businesses represent 8 million minority-owned businesses.
oThe
number of minority-owned businesses is growing faster than non-minority
owned businesses, with minority-owned firms generating nearly $1.4
trillion in annual economic output.
SMALL
BUSINESSES ARE BOOMING:small
business optimism and the economy have reached historic levels.
·The
economy is growing and wages are rising at small and large businesses.
oThe
Council of Economic Advisers estimates that the corporate provisions of
the Tax and Jobs Cut Act alone will raise GDP by 2 percent to 4 percent
over the long run, increasing household income by $4,000.
oDepartment
of Labor data from March shows a 4.1 percent unemployment rate, which is a
17 year low, and wages are up 2.7 percent over the past year, the highest
of any calendar rate since 2008.
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Seven
Ways Banks Measure Small Business Credit
Why
does qualifying for a small business loan have to be such a mystery?
According
to a CB Insights study, cash flow issues are the second most common
reason startups fail, accounting for 29% of failures. In many cases,
access to capital would make a big difference. Yet the loan application
process is notoriously opaque for small business owners.
Research
from the Federal Reserve Bank of New York shows the average
small business owner spent 26 hours searching and applying for credit,
contacted three financial institutions and submitted three credit
applications. Despite this time-consuming work, only half of
small-business applicants end up being approved for the loan amount they
applied for.
Compounding
this problem, many small-businesses owners may not know that they have a business credit
score or how to access that information. Banks also don’t have to
provide a reason for declining, and small businesses may not understand
steps they can take to improve. What's more, small-business owners
generally can’t afford a CFO able to help them with this process.
When
small-businesses owners understand what factors into lenders’ decisions,
they can work to improve their businesses and become more attractive in
the eyes of lenders.
Knowing
how banks evaluate the creditworthiness of a small business is a great
place to start. There are seven key factors:
1.
Business Debt Coverage
How
much debt does the business currently carry, and can it afford to cover
all of its existing debt obligations, as well as any new debt? To
determine this, banks look at a company’s cash flow and its annual
business debt payments.
2.
Combined Business and Personal Debt Coverage
Business
and personal finances are often interconnected. For this reason, banks
usually take into account your personal debt obligations. What they want
to know is: If the business is struggling and can’t afford to pay the
debt, will the owner of the business be able to make the payments? This
measure is calculated in much the same way as business debt coverage and
takes into account business and personal cash flow, assets and combined
debt obligations.
3.
Business Credit
Did
you know your business has its own credit score? There are a few different
business credit scores that banks may use:
•
FICO® LiquidCredit® Small Business Scoring Service℠:Scores
range from 0 to 300.
•
Dun and Bradstreet PAYDEX Score: Scores range from 1 to 100.
•
The Intelliscore Plus℠ from
Experian:Here, too, scores range from 1 to 100.
These
scores are designed to quantify a business’ ability to repay a debt. Several
factors influence your business credit score, including payment
history, credit utilization ratio, company size and industry risk.
Note:
“Hard pulls” can have a negative impact on the business and personal
credit scores. Try to avoid applying for loans until you’re reasonably
confident you’ll be approved, or check before you apply that the company
does a “soft pull” that won’t impact your credit scores.
4.
Personal Credit
Even
if a business has a stellar credit score, banks want to understand the
creditworthiness of the people running the business. Three credit agencies
calculate a person’s credit score (known as FICO scores): Experian,
Equifax and TransUnion. Though the models -- and, thus, the scores -- for
each agency vary slightly, they’re based on the same criteria, which
include payment history, amounts owed (including utilization), length of
credit history, new credit and the types of credit in use.
5.
Business Debt Usage
Banks
want to know whether the amount of debt a business is carrying is
appropriate for the business’ size and industry. Business debt usage
compares outstanding business debt to either business revenue or
assets.
6.
Personal Debt Usage
Can
you, as a business owner, access credit when you need it? Do you have
available credit that you’re not currently using? Banks divide an
owner’s outstanding debt balances by the total available revolving
credit to calculate personal debt usage. In general, banks would like
personal debt usage to be no more than 30%.
7.
Business Revenue Trend
Banks
want to know whether a business is currently growing. They assess the
business revenue trend by calculating the average revenue growth over
time. To limit the risk of default, banks look for revenue growth trends
that match (or exceed) the industry average.
Note:
Banks pull the revenues from tax returns. If businesses have previously
been denied loans, it’s generally advisable that they reapply after a
new tax return.
It’s
important to remember that all seven of these measures will change over
time. So, if your business was previously denied and your finances have
improved, it may be worthwhile to reapply. Since banks rely on tax
returns, the right time to reapply may be after you file your next return.
One watch-out on this: Avoid initiating too many “hard pulls” on your
credit, because this can hurt your score.
How
can I keep track of all this, you ask? After all, most business owners are
experts in their fields, not in finance. One alternative is to hire a
financial adviser, but they can be expensive. The good news is that there
are tools available today online today to help small businesses keep track
of their finances and make the loan application simpler. So, if you
can’t afford a “real” CFO yet, you might consider a digital online
service instead. Digitizing your financial documents can also help, so
when it’s time to apply for a loan, all the documentation is organized
and searchable.
Ultimately,
shedding light on the lending process will benefit all parties involved.
Applicants will know whether they’re likely to be approved and won’t
waste time if they’re not.
Transparency
around the process is a good for lenders, too, as it will improve the
quality of loan applications, increase approval rates and make the lending
process more efficient and profitable.
Small
businesses represent 99.7% of our country’s firms, according to
the Small Business Administration. It’s time to empower them with
valuable information about their finances, so they can reach their full
potential and help our economy grow.
Business
owners who cannot wait or do not qualify for a traditional business loan
from a bank often get the money they need quickly as short term
advance from other sources that use finance technology for alternative
credit scoring. The short term advance has become the preferred strategy
for many small businesses.
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Small Businesses More
Interested in Capital Innovative Main Street Capitalism
Inspires
Confidence in the American Dream
Small
companies are getting more interested in borrowing, but many are still
finding it hard to get loans from banks. Over 60% of small
businesses are planning for capital expenditures in 2018, yet 82% of small
business loan applications are denied by the banks.
That’s
the finding of a quarterly survey of small businesses released in December
2017 by Pepperdine University’s Graziadio School of Business and Management
and Dun & Bradstreet Corp.
The
survey findings show that owners who have shied away from risks like
borrowing ever since the election may be feeling more secure about taking
on debt. But banks that are adverse to risk, especially given the rules
imposed on them by the Dodd-Frank banking law, are still wary about small
companies.
Banks
also are closing branches and paring credit in small towns and rural America, focusing instead
on large urban markets. That leaves many communities without the friendly faces of
finance that once sustained them and worsens a tough economic environment.
-- Wall Street Journal 12/26/2017.
On
a positive note, many companies wanted financing because they want to grow
or acquire another business — 44 percent of small businesses, and 47
percent of mid-sized ones.
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No products or services are
offered or sold
on this non-profit educational informational resource
Editorials, opinions and articles are not a solicitation or an offer to sell, refer or arrange
financing. Features and Special Reports in this publication do not promote or sell products,
goods or services.
-
not a mortgage broker, finance broker or finance lender - SmallBusinessReports.org does not receive
sales commissions or referral fees.
Small
Business Optimism Hits Near All-Time High
Not
since the roaring Reagan economy has small business optimism been as high
as it was in November, according to the National Federation of Independent
Business (NFIB) Index of Small Business Optimism, released today.
“We
haven’t seen this kind of optimism in 34 years, and we’ve seen it only
once in the 44 years that NFIB has been conducting this research,” said
NFIB President and CEO Juanita Duggan. “Small business owners are
exuberant about the economy, and they are ready to lead the U.S. economy
in a period of robust growth.”
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Zero cost to apply - no effect on your credit score.. One application
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Good credit required
examples
only ...
No products or services are
offered or sold on this non-profit educational business informational resource
Editorials, opinions and articles are not a solicitation or an offer to sell, refer or arrange
financing. Features and Special Reports in this publication do not promote or sell products,
goods or services.
-
not a mortgage broker, finance broker or finance lender - SmallBusinessReports.org does not receive
sales commissions or referral fees.
82%
Eighty-two percent of small businesses are planning for
growth —with 35% saying they will borrow up to $300,000 to
expand. Yet, traditional banks reject 50-75% of loan requests from
small business owners who often spend 33 hours searching, applying and
paying excessive rates and needless fees.
Business owners ARE quickly getting the
money
they need —just
not from conventional or local bank branches.
Non-bank alternative capital sources recently funded over
$9.0 Billion to 250,000+ small businesses including medical & dental and
elective aesthetic practices, medical devices providers, home improvement
companies, veterinarian practices & animal hospitals, automotive
services ...
Small Business
Administration (SBA) 7(a) online loans
Business owners spend 33 hours searching online and applying for loans because
traditional banks turn down two thirds of their applications. They pay higher rates and needless fees when they do not find the
right lender for their unique business.
POST-ELECTION
SMALL BUSINESS OPTIMISM SUSTAINED IN JANUARY
Small
business optimism rose again in January to its highest level since
December 2004, suggesting that the post-election surge has staying
power, according to the monthly National Federation of Independent
Business (NFIB) Index of Small Business Optimism, released today.
“The
stunning climb in optimism after the election was significantly
improved in December and confirmed in January,” said NFIB
President and CEO Juanita Duggan. “Small business
owners like what they see so far from Washington.”
The
Index reached 105.9 in January, an increase of 0.1 points. The
uptick follows the largest month-over-month increase in the
survey’s history. Five of the Index components increased and
five decreased, but many held near their record high.
“The
continued surge in optimism is a welcome sign that economic growth
is coming, said NFIB Chief Economist Bill Dunkelberg.
“The very positive expectations that we see in our data have
already begun translating into borrowing, hiring and spending in
the small business sector.”
Small Business Owners Are Highly
Optimistic
A large percentage of American small business owners are optimistic for
growth in 2017 with some important investments in their businesses,
including borrowing and hiring, according to a New York Life survey of more than 1,200
small business owners fielded recently by Ipsos Public Affairs.
“Small business owners are heading into 2017 with good feelings,
and this was consistent across size and years in business,” said
Brian Madgett, Vice President, New York Life.
“Small business owners have big plans for 2017, with many looking
to incorporate tech, seek capital, hire, improve offerings to
employees and explore ways to better manage their money,” said
Madgett.
“We’re
hearing positive economic sentiments across the country in our
conversations with small business leaders. With this shift in
attitude comes a renewed interest in financial planning and is no
wonder that 55 percent report they plan to engage a financial
professional for assistance as it relates to their business needs in
2017.”
Small
Business Owners Are Building Their Companies in 2017:
Plan
to incorporate mobile technology in my business
66%
Plan
to network more with other business owners and/or
professionals
64%
Plan
to grow my company- open another location, increase
revenues, expand capabilities, etc.
62%
Plan
to seek additional capital
55%
Plan
to hire more employees
52%
Plan
to improve my employee benefits package
49%
Plan
to take out a loan
46%
SOURCE: New York Life
/ Ipsos Public Affairs
Small
business owners are the most optimistic they have been since January 2008
"The
latest overall Index score tells us that business owners are feeling
positive about the future and have a renewed sense of confidence as they
look to the year ahead," said Mark Vitner, Managing Director and
Senior Economist for Wells Fargo Securities. "Not only do small
business owners report that the operating environment for their businesses
will be better in 2017 than it was in 2016, but business owners are
anticipating growth for their businesses in the new year as more plan to
increase their capital spending, add staff and apply for credit."
The
increase in small business optimism was largely driven by business owners'
expectations that their finances will improve in 2017.
Key
drivers of this quarter's Index score included:
Revenue–
More than half (58 percent) expect their business's revenue to
increase a little or a lot in the next 12 months, up from 48 percent
in July.
Stronger cash flow–
Seventy percent believe their cash flow will be somewhat or very good
in the next 12 months, up from 65 percent in July.
Capital spending–
Thirty-five percent say they plan to increase their capital spending a
lot or a little, up from 25 percent in July.
Hiring–
Thirty-six percent expect the number of jobs at their company to
increase a little or a lot over the next 12 months, up from 21 percent
in July. This is the highest reading in the 13-year history of the
survey.
SOURCE: Wells
Fargo/Gallup Small Business Index
Eighty-two percent of small businesses are planning for growth
—with 35% saying they will borrow up to $350,000 to expand now. Business owners
spend 30+ hours searching online and applying
for loans because their banks decline two thirds of their
applications. They pay
higher rates and needless fees when they do not find the right source of
funding for
their unique business.
Businesses
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Small
Business Demand for Capital Hits Four-Year High
Thirty-five
percent of small businesses are planning to raise capital in the next
six months. Sixty-five
percent of small businesses cited growth or expansion as the reason for
seeking capital. Working capital fluctuations and increased demand
rounded out the top three reasons for raising capital.
Small
business owners plan to seek capital to fuel growth within the next few
months, and that demand for capital may indicate growth in the small
business sector in 2017.
Bank
loan success rates reached an all time low for small businesses
and the success rate between small and mid-sized businesses (between$5–
10M in revenue) reached its largest gap since the study began in 2012.
Only 29 percent of small businesses successfully secured a bank loan.
This low success rate for small businesses may reflect bank skittishness
over businesses with fewer collateral assets. This could account for why
a large percent of small businesses were seeking capital from friends and
family (46 percent) in the last quarter.
Unfortunately,
business owners are
spending 33 hours searching and applying online for financing, but
many are are not getting the right loan for their
business because they did not find the best lender for their business' specific
needs, and it is costing them higher rates and needless fees.
SOURCE:
Graziadio School of Business and Management at Pepperdine
University with support from Dun & Bradstreet
A survey of more than 1,000 small business owners found that 82 percent of
small-business owners are planning for growth in 2017 – a strong sign
for overall economic health heading into a new year.
Broadly, respondents are planning the
following for 2017:
58 percent:
buying new equipment or furniture;
34 percent:
selling a new product;
33 percent:
hiring an employee;
30 percent:
offering a new service;
23 percent:
moving to a new location.
Yet, fully 80
percent say access to financing is their main hurdle to staying
competitive.
SOURCE:
Insureon Small Business Outlook
Small business owners are getting the financing they need, but not from
traditional sources.
This is a welcome
development compared to recent years when conventional banks, credit
cards or unregulated merchant cash advances were the only
choices for small business financing.
What's your
strategy?
"With
innovative finance strategies to keep your business growing, you can focus on
running the company ~ not searching for capital."
example
only
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Editorials, opinions and articles are not a solicitation or an offer to sell, refer or arrange
financing. Features in this publication do not promote or sell products,
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Small
businesses succeed with quick online lending
Tech-driven online funding makes it simple and easy for small business
owners to quickly access the right capital for their unique business so they can smooth out their cash flow and
invest in the business. Online business
funding is based primarily on revenue strength and growth, so it
is easy for most small businesses to qualify for working capital.
However,
too many business
owners typically are spending 33 hours searching, applying and
trying to make sense of all the new online funding. often without
success.
What could
you do with the right funding?
business capital based on
revenue
strength & growth
Inventory
/ Equipment
Expansion
/ Growth
Advertising
/ Marketing
Emergencies
/ Seasonal
Working
Capital
Bills
/ Taxes
Pay
off Cash Advances
see article below ROI 5X RETURN
Fifty eight percent (58%) of small businesses plan to obtain financing this year
2016,
higher than the 52 percent of 2015. The top reasons for using the proceeds
– for those considering loans of $100K or less – are:
Buying and
repairing equipment (19 percent);
Purchasing
inventory (18 percent);
Expansions
(15 percent);
Software and
technology (15 percent).
SOURCE: CHASE Business Leaders Outlook Survey
Eighty one
(81) percent of
small business owners say they need working capital, but over half of those
(63%) are too time starved to apply for a loan, or they don't
believe they would be approved because banks turn down roughly 70% of small business loan
applications, especially requests for under $500,000.
SOURCE: CITI RESEARCH
Quick Decisions.
Quick Funding.
business capital based on
revenue strength
and growth
Short
term capital makes it quick and easy for small
business owners to access the money they need to smooth out cash flow and
invest in the business.
Working Capital
Nobody
faces more challenges on a daily basis than business owners. In fact, for
owners of small businesses, handling so many different
challenges is the source of great satisfaction — and some headaches,
too.
But
when business owners are asked to name their greatest challenge, one thing
tends to top the list most often: accessing working capital to manage cash
flow. In other words, making sure there is enough capital flowing in to
cover everything that needs to flow out.
There
are a variety of reasons why cash flow can be a steep challenge for small
business owners. Needs can precede revenue. Or perhaps you’re getting
paid more slowly than you’d like. Or if you’re a seasonal business —
a garden center, for example, or specialize in hardy, cold-weather
clothing — and you have peak sales months and require that revenue to
stretch across your off-season months.
Often,
business owners can optimize cash flow by negotiating longer payment
cycles with creditors and encouraging debtors to pay in shorter time
periods. But there are other solutions that can help you sail through the
lean months with plenty of working capital on hand: short-term
business funding.
You
can put small business funding to work immediately for your business, whether it means meeting
payroll for a few months, negotiating a great deal oninventoryfor
paying in cash or hiring and training those new employees you need. Our
business financing solutions for working capital can help you operate
without missing a beat or even take advantage of an unexpected or one-time
business opportunity.
And
then there are those costs that no business owner sees coming: The sudden
need to replace an important piece ofequipmentor
the need to upgrade technology to improve efficiency and save money in the
long run. Repairs, sprucing up the exterior, landscaping, even marketing
and advertising can all be critical elements to your brand and your
ability to growth the business. In today’s super-competitive
environment, this is no time to skimp, especially when applying for
business funding. Working capital can be just a few clicks away
Inventory
Financing
As
any business owner who is managing inventory will tell you, it can be more
complicated than taking items off the shelves and selling them to
customers.
The
central issue is that inventory is purchased with your business’s cash,
either upfront or over a period of time, as your items are sold. What this
means is that, as inventory sits on shelves waiting to be sold, the
business’s cash is tied up, not working in other ways for the business.
Most small and medium-size businesses are constantly watching their cash
flow and often don’t have the luxury of tying up their cash in
inventory. They need to keep their capital reserves and business lines of
credit available for other things.
But
there are sound business reasons, depending on the situation, for
purchasing large amounts of inventory, like stocking up during an
off-season. And getting inventory financing means you won’t have to tie
up your cash to do it.
Inventory
Financing as a Multi-Purpose Solution
Getting
small
business capitalto
purchase inventory makes good sense for all kinds of businesses, in a
variety of situations. A few of the most common uses for inventory
business funding include:
Seasonal:Many
businesses have peak months of the year when they make most of their
income. But, the cash generated during this time may not stretch
through off-season months, even though this is the best time to buy
your inventory for next year.
Pre-holiday
or special event:Whileretail
businessesgenerally
don’t want excess inventory sitting around, in the months leading up
to Christmas or back-to-school shopping, for example, having more
inventory than usual can translate into more sales. But you have to
have the working capital to purchase large quantities.
New
product rollout:If
you’re offering a hot new product that research tells you is going
to be a hit, you’ve got to have plenty of inventory on-hand to meet
the demand. But stocking up that much inventory is expensive, and
you’re not sure you can swing it.
Short
term capital makes it quick and easy for small
business owners to access the money they need to smooth out cash flow and
invest in the business.