How businesses access working capital has shifted, as traditional methods haven’t kept pace with the speed of business. Where can entrepreneurs turn for funding? These three alternative options may be worth considering.
(BPT) - How businesses access working capital has shifted, as traditional methods haven’t kept pace with the speed of business.
Growth is one of the biggest indicators of small business success. According to the Small Business Administration (SBA), more than 500,000 businesses have between 20 and 99 employees as of 2014. These established businesses are in the upper end of growth but have not yet met the threshold of being a medium business. In fact, 39 percent of growing companies — between three to five years old and seeking more than $100,000 — consider accessibility to capital their greatest concern. It’s during this stage businesses typically are faced with growth challenges.
Where can they turn for funding? These three alternative options may be worth considering.
1. Lines of credit
Lines of credit, provided by online lending platforms like Kabbage, offer established businesses in all industries the flexibility and convenience of accessible capital.
With Kabbage there are no fees to apply for a line of credit or annual costs to access funding. Small businesses don’t pay a thing to see for how much their business can qualify. Kabbage offers access to lines of credit up to $250,000, helping small to mid-market businesses access funding for operational costs and strategic investments like cash flow needs, purchasing specialized equipment, business expansions and launching high-growth marketing projects. There are also no obligations in how much a business is required to take. Businesses can take the amount they need from the line of credit when they need it, with no hidden fees or pre-payment penalties.
Lines of credit are faster and more flexible than traditional loans. In fact, Kabbage offers a loan application that can be finished in minutes — even through a mobile app — eliminating the time usually spent waiting in lines or filling out numerous forms.
2. Merchant cash advances
Some established businesses turn to a merchant cash advance (MCA) due to lower credit ratings, not having enough assets to provide as collateral, short-term financing needs or the flexible repayment terms.
Essentially, an MCA is an advance on future credit card payments. The cash advance is decided upon by the funding company, with the specific amount being paid back in full plus fees and interest.
With merchant cash advances, borrowers pay a set percentage of their credit card sales and make payments every time they receive credit card payments from clients.
3. Invoice factoring
Invoice factoring is another funding option established businesses use in lieu of bank loans. Factoring is the process of selling accounts receivables to a financing company for immediate cash.
Factoring helps businesses receive cash much faster than waiting for clients to pay their invoices. The financing company, known as the “factor,” pays the business the majority of the invoice upfront. Once the business receives payment from the client, they send those funds to the factor. The factor then pays the remaining percentage to the business.
Factors are more concerned with the financial health of the business’s clients rather than the business itself. These companies collect directly from a company’s clients and customers, sometimes requiring payment history validation from the business. A benefit of factoring is not assuming debt for money received; however, if clients are not creditworthy, you may not receive funding.
To maximize this growth, consider looking online at www.kabbage.com/yes to learn about and find new options that fit your business. Merchant cash advances, invoice factoring, and lines of credit are three alternative solutions that help growing businesses go beyond traditional financing methods.
3 Ways to Find Financial Happiness This Year
(Family Features) Whether a Millennial, good credit health matters. A majority of Americans feel it directly correlates with their overall happiness, too.
Three-out-of-five people say that a higher credit score plays an important role in their happiness, according to the Chase Slate 2016 Credit Outlook. Yet 30 percent of Americans have not checked their credit score in the last year and, of those, one-in-five elected to stay in the dark out of fear their score might be low.
Farnoosh Torabi, personal finance expert and Chase Slate financial education partner, suggests taking action now to let go of the fear factor and find financial happiness with these tips:
Don’t fear the future. Plan for it.
Get up-close and personal with your credit standing.
Raise your hand… and your voice.
For more tips to improve credit health and find financial happiness, visit Chase.com/news.
Photo courtesy of Getty Images (couple packing)
(BPT) - No wonder you're thinking of selling your home - it's a "seller's market" right now. The housing supply has dwindled, creating more demand for fewer homes.
At the same time, according to Realtor Tammy Reinke, buyers' expectations are higher than ever. They've become accustomed to model-perfect homes.
What's the upshot? "Sellers have a choice," says Reinke. "You can win the price war - or win the beauty contest." By winning the beauty contest, you'll gain pricing leverage. And if your home shows well, it can even spark a bidding war - generating offers that exceed your asking price.
Here are three top "beauty" tips to set your home apart from other contestants, and set yourself up for a fatter settlement check.
1. Dirt's a deal-breaker: Make a clean sweep
"Buyers want to see a clean home," says Reinke. "And the first thing to deal with is stained carpets and ceilings."
Stained carpets should be cleaned or replaced. Stained ceilings deserve your attention, too. They can scare off prospective buyers who fear that ceiling imperfections might be a sign of bigger problems.
"If you've got a stained popcorn ceiling, don't bother trying to spot paint over it, it doesn't work," Reinke says. Even professionals find it difficult to match the original finish and color. In addition, flocked or heavily textured ceilings are best replaced because they look so outdated.
Instead, consider installing ceiling tiles or panels directly over the offending ceiling, using a simple DIY track-and-clip system. To weigh all your ceiling replacement options, pop some real popcorn and settle back with the Armstrong Ceiling video guide to ceilings for lots of ideas and inspiration.
2. Declutter de house
Buyers can't picture themselves in your home if they can't see past your piles of stuff. "There's a difference between clutter and an intentional collection," says Tiffany Little, a senior interior design at Albion Associates.
Pull together different items - like pottery or framed photography - using a common design element like color, similar patterns, texture or materials. "It's OK to leave some surfaces empty, and to create a display of personal mementos in a stylish, organized manner in other areas," says Little. "This makes the personal items even more special."
3. Spark design interest
So you've cleaned and decluttered, but now your rooms seem blah and uninviting. Nothing enlivens a space like a splash of color. Toss some bright new pillows on the sofa or add tasteful artwork or accessories to complement your color scheme.
Paint adds personality, too, but choose your colors carefully so your wall palette flows naturally from room to room. "I like using a neutral color palette for larger rooms - from ivory tones to values of grey," says Little. She adds mid-tone colors to smaller rooms, while selectively using vivid or deeper colors as accents with accessories and artwork throughout the home.
Finally, don't forget to add texture, whether with a woven area rug or sculptural wire baskets. "Texture adds great dimension and depth to a room," says Little.
"I especially love the look of Armstrong Ceilings decorative metal ceiling panels in textured tin or copper as accents above a kitchen island. This turns the ordinary, smooth sheetrock ceiling into a wow factor. By adding this textured ceiling color in with a few of the dishes, or countertop items, it unifies the room's palette," she added.
With a bit of primping, your home can win the ultimate beauty contest and attract a buyer who's willing to meet your price, or even pay a premium to call it their own.
(BPT) - The stock market is off to a rocky 2016 and experts advise we buckle up. Uncertainty around China, oil and interest rates is leading to waves of selling and a sharp decline in the market. This volatility is a reminder that we should expect the best and prepare for the worst. At the very least, we're in for a roller coaster of uncertainty, and now is the time to get financially prepared. Here are three ways to get your money in order for uncertain times.
1. Stow away cash in an emergency fund.
You should have six months' expenses saved in case of an emergency. And by emergency, we aren't talking about a desperately needed wardrobe upgrade, or a European vacation to cope with a mid-life crisis. This should be money set aside to deal with life's emergencies like layoffs, medical bills or unforeseen crucial expenses. Don't feel bad if you haven't saved up six months' expenses though - according to a recent Bankrate survey, fewer than four in 10 Americans can handle expenses outside their normal budget. To get a rough goal for your emergency fund total, simply add up all recurring monthly expenses including rent/mortgage, food, gas, car payment, cable, phone, etc. and multiply by six. Try to put 5-10 percent of each paycheck after taxes to this fund, and be sure to put the money into accounts that are liquid and stable, like a checking, savings or money market account.
2. Play it safe with investing.
Investing shouldn't entail blindly paying a stockbroker and assuming all the risk with no tangible goal for success. New investing tools have emerged that bring elite investment options to everyday Americans. These can be great assets in a tough economy. Aspiration, for example, offers strategies that limit the volatility of the stock market and invest in companies with sustainable business practices toward the environment and their own workers that make them poised for growth. Best of all, customers set their fee, even if it's zero. Yes, you read that right - Aspiration lets investors pay them whatever they think is fair, and it can be changed at any time. If this sounds like a gimmick, know that Aspiration is a trusted brand that was just named one of Fast Company's Top 50 Most Innovative Companies of 2016.
If you prefer paying an advisor for advice, Personal Capital is another new-school financial company that provides award-winning technology to help you manage day-to-day finances and investments. Personal Capital offers investment advice from licensed financial advisors, at a significantly reduced all-in management fee.
Once your portfolio is set, start investing a modest amount each month. Even $50 a month will add up over time, and that money will do you more good in the long run than one night at the bar, 10 overpriced lattes, or five deli lunches.
3. Open a fee-free bank account.
The days of big banks dominating the industry and charging outrageous fees could be coming to an end. Convenient banking options exist that bear interest and don't charge an arm and a leg for services. Take the Aspiration Summit Account, a checking account that offers a 1 percent annual percentage yield (100 times the interest rate you get at big banks), $0 monthly service fees, and free access to any ATM in the world. Instead of spending millions on Washington lobbyists or corporate jets for its executives, Aspiration puts that money back toward making this the best account possible for its customers. And it gives 10 percent of all its revenue to charities helping struggling Americans. Money magazine named this the "Best Checking Account in America." Another option is your local credit union which will often have better services and fairer interest rates than a big bank.
Once your finances are in order, peace of mind can set in. A down economy is hard on everyone, but knowing you've taken the basic steps to save in case of emergency will pay off huge in times of need. And if the stock market never crashes and the economy only points upward, you can always use the spare cash for a down payment on that European vacation you've always wanted.
Tips for Winning a Scholarship
(Family Features) Winning a scholarship can be as competitive as gaining entrance to the college of your choice. While academic performance, extracurricular activities and character all matter, your success often boils down to discovering scholarships that fit your credentials and properly promoting your accomplishments.
These tips will help you prepare scholarship applications that get you noticed – and could get you some extra cash to help pay for school.
With an organized approach, you could be on your way to winning scholarships that help ease your school debt and set you up for success.
Photo courtesy of Getty Images
Watch for warning signs that your aging parents need help
(Family Features) If you’ve been entrusted to assist an elderly relative with scheduling preventive exams and putting a health care plan in place, you may struggle with knowing when it’s time to take on a greater role in other aspects of their life. That’s why now is the perfect time to look for warning signs that your loved ones might be suffering from a decline in financial ability.
Despite years of accumulated knowledge and experience, it is likely that at some point your loved ones’ financial capability will be challenged as they age, making it more difficult to competently handle money-related matters on their own. And this decline can occur even if illnesses, such as Alzheimer’s or dementia, are not present.
Establishing a plan to manage your parents’ finances is an important task in their senior years, particularly if you intend to engage other family members in the process. A survey from the National Endowment for Financial Education (NEFE) found that 86 percent of people want their family to help with financial matters if they become unable. However, nearly 7 in 10 say their family dynamics prevent that from happening. According to the survey, 58 percent of families experience disagreements, conflicts or confrontation with others when aging affects financial decision making.
Whether you’re a child or family member who has been enlisted to help or even charting your own financial future, approaching these discussions with candor and an open mind is critical.
“Especially if you’re accustomed to handling money matters privately, learning to talk more candidly about your finances may be uncomfortable,” said Ted Beck, president and CEO of NEFE. “However, allowing trusted individuals to take a closer look at your accounts can help you establish a realistic plan for the future, and help flag any potential concerns.”
One way Beck recommends protecting your parents is to allow view-only access to let loved ones help monitor for unusual activity on your banking and credit accounts. If restrictions to unauthorized users prohibit this, you can set up an alert program (via email or text) when a transaction over a set amount occurs. Also, remember to perform regular credit checks to avoid scams and identity theft. Check the three major reporting bureaus and stagger the reports to get one every four months.
Financial Warning Signs
Pay extra attention toward looking for the warning signs of mental and financial decline. Most importantly, take the time to talk to your parents about their wishes and how you can help them.
Additional tools and resources are available at smartaboutmoney.org to help ensure your loved ones’ finances stay healthy through these golden years.
Photo courtesy of Getty Images (women on laptop)
Interested in Publishing on The Business IDEA?
Send your query to the Publisher today!
Interested in Publishing on The Business Idea?
Send your query to the Publisher today!
Get this business content for your website with our RSS Feed below!